Ravi Gupta - Bring Joy - [Joys of Compounding, EP.21]

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Hello and welcome to the Joys of Compounding.

We're still on the same mission to study greatness in order to help you find and compound your life's work as fast as possible for as long as possible. I'm Paul Buzer and I'm Rick Berman.

We're your hosts and each session our teachers will be some of the world's most compelling people from across the vast range of human achievement.

This show is brought to you by Pine Grove Studios in collaboration with Colossus, the host of the show. Rick Berman and Paul Buzer are the co founders and co CEOs of Sada Grove holdings and co CEOs of Sada Grove Management Company. All opinions expressed by any of Rick, Paul or their podcast guests are solely.

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Take your seats. Class is in session.

Today's teacher is Ravi Gupta partnered renowned venture firm Sequoia Capital. This was a fun session and I can't think of someone better aligned to kick off our JOC journey with. Ravi's had such a fascinating and meandering career on his way to becoming a VC. From consulting at McKinsey to private equity at KKR and then operations at Instacart where he served as both CFO and coo, and now as member of the Board of Directors, as you'll hear from him. All along the way, Ravi was gathering and cultivating a unique set of skills that's equipped him to now identify and support some of the most daring founders striving to build the most legendary companies in the world. Beyond investing, we touch on Ravi's other loves including family writing, Duke basketball and bringing joy wherever he goes. While still youngish, Ravi's life and career are already teeming with trials, success and applicable lessons for all of us. He's such a thoughtful and deep thinker and I'd encourage you to check out his personal site, RKG Blog for more of his musings. With that, we hope you enjoy class with the ever joyful Ravi Gupta of Sequoia Capital.

Come on. Woo. One, two.

Well, Ravi, welcome to the joc day one of the rebrand. How do you think it's going so far, Paul?

Seems like there's lots of joy, lots of potential. Talk about compounding.

We have the ideal guest for sure for the new pod because Ravi Gupta is all about joy and he's all about compounding. And we got a lot of wood to chop today. We're definitely going to talk about your career. We're going to talk a lot of Instacart, we're going to talk a lot of Sequoia. I think what would be really helpful, Ravi, is just before we get into your career, just maybe let's level set a bit. Help us understand and feel free to go back as early as you're comfortable. But help us just understand what's most important to know about just your early formation.

Oh, wow, that's a good question. Most important to know. I'm very close to my family and I think that comes because I owe a lot to them. My parents were Indian immigrants, very devoted to us. And I feel, I don't know if I always felt like this as a kid, always as grateful as I should have been as a kid, but everything they did was to create opportunity for us. And then also I'm very close with my brother now, but growing up, he was an amazing big brother, but a tough example to follow. And I think that I hope that makes me some combination of competitive and ambitious, but I hope also a good person.

Would you go as far as to say that your parents were both supportive and demanding?

My parents are the ultimate example of demanding and supportive. When I heard that the first time, those words, I never heard those words. And I heard those words from Adam Grant the first time and he actually described it as parenting about, do you think parents should be highly demanding or highly supportive? And before you can answer, he's sort of like, it's a trick question. They got to be both. That's what they have to be in a huge light bulb of hearing someone else's words to describe perfectly your own parents. I think that, like you said, Rick, a lot of the reason that I think that's such an incredible leadership philosophy is probably the thing that I embodied in the best leaders I know, which are my parents.

Yeah.

One of the things we definitely want to spend more time on is talking about your own approach to parenting. Just before we started to record, you mentioned that at least one point early on you thought you might become a teacher and maybe just say more about whether it's that aspiration of teaching or just even that inclination to think that you might want to become a teacher. Maybe talk a little bit about your recollection of some of those early aspirations. What did you really want to do when you were young?

When I was young I wanted to play in the NBA. That was what I wanted to do. Still time I wish I was good enough to have played. And it was funny. I think on this demanding and supportive side. My dad pulled me aside in sixth grade and what are you going to do when you grow up? I said, I'm going to play in the NBA. He effectively told me, I don't know if it's fifth or sixth grade, but effectively some version of that's definitely not going to happen. And he went through in his own way the logic for it, which was funny of do you think you're the best player in our district? I think I'm tied for the best player in our district. Great. Do you think our district is like the best district in the Chicago area? Do you think that this area is the best area for everywhere to play basketball in the world went through? And the vibe of if you were on track to play in the NBA, you probably would be a pretty standout dude in a pretty big area. And at the moment you're good for our district, but our district might not be the best district in the country anyway. I still joke. I think that was a little early from my dad on the sort of you're not going to play in the NBA. But the teacher thing, yeah, I did mention that I still hope I get to be a teacher at some point in my life. And then my dad is actually up until recently taught a few courses at Kellogg, at the business school at Northwestern. And I've always wanted to be like my dad. And I think that even into college. Like when I first met Avni, when I would talk to her about what I was going to do, I think the plan was to be a teacher. And then of course what we've done now is different than that. But hopefully it all comes full circle. I joke because I never. I'm like the only one in my extended family without A graduate degree that notionally one place I could supposedly teach is at a business school but I don't have an MBA and so I'm not sure they'd ever take me. So I've joked that my brother who's a doctor has to get me some sort of honorary degree so I can be able to be qualified to be a teacher somewhere.

As non academics who have been teaching at Notre Dame for 15 years, there is a path to get there.

You have paved it for me.

You're spending a lot of time with Shane Battier these days. Maybe he'd take you on his mini NBA team at some point.

Here's hoping my friend Mike Dunleavy is the GM of the Warriors. I'm still hoping he's going to put me on a 10 day contract at some point. I don't have to play, I could just be on the squad.

Iri I think it was your conversation with Shane Parrish a few years ago where you talked quite a bit about the influence, the legacy of being a son, a grandson of immigrants. And to me there's so many powerful stories of the resiliency that develops early on when there's a migrant story embedded in a life. I'm curious if you have additional thoughts just about what that maybe meant for you on but I'm also curious just how you think about your own Indian heritage and is there anything that's distinct in connectivity to the country of India that you think plays into the person that you're becoming?

One thing I really appreciate is you talked about the person that we're becoming rather than the person we are because I do think it's an evolving thing and hopefully we're not finished products. I always, when I look back, even a few years, I'm surprised in many ways for the way things are and so I presume I'll be surprised again in a few years on the grandson and son of immigrants. My grandfather came here in 1957, which is pretty early and I won't repeat it, but he was a young 35 years old, left 5 kids in India and my grandmother and just came here for a new life and that's a very hard thing to do. And three years later he came back and got my aunt and my grandmother and left the four boys there. And so my dad and his brothers were like away from their dad for six years. Pretty formative years. 1957, 1963, my dad was 8 to 14 years old and that's particularly impactful to me because my kids right now are 11 11, 10. I'm holding on to 11 for the Twins because they turned 12 on Friday, and I'm not ready for that. They still joke with me of, like, dad, we're going to be preteens. I'm like, stop. Anyway. But it's a very formative time. And so I think the first thing I think about when I think about my grandparents or my grandfather in particular, just sacrifice. This is incredible what somebody came and did. And then also real vision. The idea of the life for him and the life for all these people that come after him will be better if he moves here. That's a pretty hard thing to do. There is literally nothing that could make me be away from the kids for six years in order to build a better life for people I'd never meet. That's just really different. I think, to your point on the Indian heritage, you don't really know any different when you're growing up. My parents are from India, and I think that many of their friends. Growing up, I was surrounded by people who were Indian immigrants. There was a real kinship from my parents and their friends. And so actually, it's hard to compare and contrast exactly what comes from. I can tell you what things are that were obvious. There is a deep family orientation. Super deep. And I think that little things like my mom's mom, my grandmother was around whenever she'd come from India. She's with us. And I would say some version of that is. When the twins were born, we were living in a small New York apartment, and there was just no question that my parents and Avni's mom were going to be there and not just be there for the birth, but stay in our apartment afterwards in our tiny place, sleeping on the floor. And some of my friends would be like, are you going to get them a hotel room? And I'm like, I can literally imagine nothing more offensive than me telling my mom, hey, I got you a hotel that you could stay at. I think she'd be like, if anyone's staying in a hotel, you can stay in the hotel. I'm staying with these babies. So I think deep family orientation, I think that's one. I think the second thing, and this is maybe broader than Indian, but there is just a pretty deep focus on education. I think that when they look at their own lives, I think they credit a lot of the good things that have happened to having access to education and for taking advantage of that. And I think that when I talked about the sacrifices my parents made, my dad drove an hour and a half Commute each way to work. And now as like a 43 year old man. And that's crazy. That's a really long time.

And there were no podcasts to listen to.

Glue Guys hadn't launched yet.

Glue Guys hadn't launched yet. Joy of compounding hadn't launched yet. He didn't even have the original art of investing. But that's a crazy thing. And the only reason that they did that was so that we could go to the public high school that he thought was like an excellent public high school, Stevenson High School. Again, all of this was done just to give us access to great education. And funny enough, you guys talked about, we haven't talked about Shane Battier yet, but he talks about in his life the sacrifices his parents made to let him go to Detroit Country Day. And so I just come back to. It's probably broader, but for me it feels consistent with Indian culture of just this deep focus on education. And then the other thing I would say, Rick and I haven't thought about this a lot, but I do think about this now, which is that when I was a kid, it was weird to be different and people would mispronounce your name or just different. And it wasn't hard, it was nothing a long time ago, but it was just you noticed you were different. And one of the things that's definitely better now is my kids, it seems less weird to be different, you know what I'm saying? There seems like there's a little bit, maybe it's where we live, whatever. But I think they feel some pride sometimes in having differences. I notice with my kids if somebody mispronounces their name, they stop. They're like, no, that's not how you say it. And they just correct them and the person wants to be corrected and it's just such a different thing.

It's beautiful. Thinking about this manifestation of compounding, I don't think there's a better way to frame it. I know Rick and I in our short founding memo talk about creating more value than we capture. That's from our friend Patrick. And then we talk about how it actually leads to value capture for future generations. We try not to think too short term. And my mother in law had to flee Cuba and she passed away last year. But we had so many memories hearing these stories of giving up everything and then education was everything. And there was something beautiful about this American experiment where that's possible. And then the self sacrifice that one can proceed with and then that pays dividends. A few generations down the line. So, yeah, thanks for sharing that. And I think on this topic of education, it's probably time to open up the can of worms on Notre Dame versus Duke.

Before we go there, let's give him a little time to think about what he's going to say after our cross dominance the last couple of years.

I actually went to a Notre Dame lacrosse game last year and I will give you guys, or maybe it was two years ago. I will give you guys credit. You have an amazing squad and very rabid fans. I have nothing but respect for Notre Dame, especially given that I'm on the joc. I will tell you, Paul, it's funny you mentioned the compounding that I've never thought about that. But yeah, my grandfather came by himself. He has five kids. There are 17 grandkids and his entire purpose was to make sure the 17 grandkids have education. And I think he succeeded. I mentioned I'm the only one of the 17 without a graduate degree. But then the 17 of us, again, what we care about is opportunities for our own kids. And I don't know the number off top of my head of how many kids there are that each of us have, but if you go back to what you said, one, I always. It's a little bit more of layman's terms, but just like a decision one guy made in 1957 has created all of the goodness, created the opportunity for all of the goodness that 17 of us have. And we've carried it. All of us care a lot about education. All of us aspire to be demanding and supportive.

All that.

So now we should get to the good stuff of the Notre Dame Duke rivalry. But it is interesting.

You're quick to say that you can't imagine coming to that same decision and being able to be separated from your kids for many years. But it does make me think that if faced with the same conditions, it does sound like he was operating off of basically the same principles, which was a fierce love for the family and finding more opportunity for that family. I do think it's interesting to think about just even generationally, when you have this cultivation of a certain level of just perseverance. What it does.

I do want to take us to that fall of 99. It was a special time. There were three amazing freshmen coming into Duke that loved basketball. You had Mike Dunleavy, you already mentioned Carlos Boozer, no relation, and Ravi Gupta. And a couple of them made the team. One might have fallen off, but the.

Only mistake Coach K made keeping you off the roster.

Thank you Guys for recognizing that.

What was that like? We heard about Duke your whole life. Strangely, my twin brother and I got into Duke that year. We're the same class as you. We were at a knife's edge, almost came to Duke, and we're friends all these years later.

And you have the same dynamic, too, where your dad went to Notre Dame.

Exactly. And we felt that love. And so it was almost like a fait accompli that we were going to be in Notre Dame. So happy we went there. There's an alternative universe. If we had gone to Duke, share what that could have been like, what makes it so special? What did you get out of it?

I think in particular, we were talking about this the other day. Notre Dame is notorious for having a bunch. Everybody goes to Notre Dame is just nuts for Notre Dame. And somebody came up to me the other day and was like, man, I'm meeting all these Notre Dame people recently, and we're down in Florid. And it's like, yeah, that's because they make it very clear that they're from Notre Dame. They're wearing all the clothes and everything. And Duke is that other place. There seems to be something singular about it.

I guess the first thing before going to Duke was because my dad had gone there and because I was always a fan. It was like something that mattered to me. Well, before I went there first, Duke couldn't win a national championship for a few years, and it was tough because you kept this team as so good. And then one thing, I don't know if it's like this, where you guys grew up, but certainly where I grew up, everyone hated Duke. Being a fan of that was very weird. I still remember my gym teacher when I was in elementary school was like, duke sucks. And I was like, I don't know. That's something that your gym teacher should say as a little kid. But anyway, he was, I'm sure, a good gym teacher, other than that. But the first thing that I remember was, I remember in 1990, Duke losing a UNLV by 30 points. And we went to school with a uniform. And I remember being in bed being like, I don't want to go to school tomorrow because everyone's going to make fun of me because I've been like, oh, we're going to win this. That. And my parents are like, you're definitely going to school. And in fact, you're not just going to school. You're wearing a Duke shirt. You're not wearing your uniform, you're wearing a Duke shirt. I was 8 years old and it's like, okay, I guess I'm wearing a Duke shirt. It's like first thing of, there's some pride there. I remember in 1992 when Duke played Kentucky in the regional final, my uncle was in town and Duke, it looks bad. Duke is losing. Sean woods hits this bank shot for Kentucky to go up 103, 102 with 2.1 seconds left. And it's like, oh man. And I had a $2 bet with my uncle on the game, 2 bucks. I had Duke, he had Kentucky, which by the way, actually very gracious of him because I'm sure Duke was favored and he just gave me straight win, lose. And my uncle, because he's like a nice person, he's my dad's older brother, he was like, we can switch. You take Kentucky, I'll take Duke. Because at this point we're like, we're definitely going to lose. And I was like, no, I'm sticking with Duke. And then Laetner hits the shot. And so I do think that even then, like before going, it was a couple of moments I still remember of, I joke, but my 10 year old self, 1992, I have a chance to switch my bet. And I'm like, that's not who I. I'm not doing that. Anyway, the best thing came out of Duke for me for sure was I met my wife. It's like by a factor of a million, by far best thing ever. And Avni's from North Carolina and she's a year behind me in school. And the fact that I met her, everything good in my life has come from that. So I will forever be grateful to. But I think to your point, there's visible school spirit. And I think what that is, from the day you get there, people are proud to be there, they've bought in, they're not acting cool. I really think there's just an element of buy in that happens. And maybe it's related to the sports. I presume it is, but I don't know. And I think what that creates, in my opinion is this buy in and this shared togetherness while you're there. And that's like a big deal. The second thing that happens I think is Duke is insular enough, it's not a huge town. And so I presume if you go to NYU or something, which is an amazing school, but I bet you go to the city a lot and you are doing stuff off campus at Duke, a lot of the stuff is on campus. And so again, there's this bonding that comes above about from being together. I actually think of Durham honestly as much as home as anywhere else. And I think that's another thing for me that added to it, which is that Duke feels like home. And then now my brother lives there. He's a doctor there and lives in Durham. My sister in law used to be a doctor there. My nieces are in school at Durham Academy. There is this real gravitational pull for us. And then Avni being from North Carolina too. So it's a special place that people feel as special in the moment rather than only upon reflection 100%.

Rick and I have talked about that over time. There's something the physical manifestation of campus within a small town makes it feel like once you enter the gates, it does feel like home and it has this air about it. You walk in and it's its own world that you can be a part of. It never goes away.

It doesn't go away. Your point on the sort of the pride, the spirit, the belief becomes a commitment to something bigger. That's great cultivation for young people in a career because they're already accustomed to attaching to something that they find worthwhile and worth investing in.

I totally agree. I also think again, it doesn't have to be specific to your school, but I would tell people in training sessions all the time, you go to a training session, okay, I'm going to sit in the back, I'm just going to get through this. At some point you're not just attending them, you lead them. And so I remember at Instacart I would start our manager training being like, look, if I can give you one piece of advice, don't be cool. I've wasted time doing that. I've been dumb, I've done that. Don't sit in the back, don't count the minutes. Don't make fun of the training, training. Try to get something out of this. And I'm telling you, if you do, you will be friends with the people that are in this session and you will learn something. And it's not that there's nothing cheesy in any part of it. I'm not saying that. I can tell you I regret every time I tried to be cool in a training session or something like that. And in general, rather than just buy in, and I do think to your point, Rick, the value of buying in is so much higher than people give it credit for. One other thing I presume helps people from Duke and Notre Dame is you have to defend your school. Sometimes people have Opinions and they say things and you're like, oh, that's not what it's like. Your perception is wrong. And so there is a little bit more of an us against the world dynamic that I think happens at places that spur some dislike.

Before we flip off of Duke, we got to talk Coach K. First of all, I have to mention you guys have to get him on Glue Guys, right?

He's committed. He told Shane he's in and that is 100% we're doing that and we're going to do it in person. And when I heard that Coach K had committed, Patrick, our mutual friend Patrick joked that he thinks that the entire reason that I am doing the Glue Guys podcast is so that I can go to the Coach K conversation and meet him and hang out with him in person. He's not wrong. He's not wrong about that.

That will be a very difficult milestone to top for you. We were talking before we started recording just about Coach K in the context of being a teacher as much as a coach. What would you just say to try to synthesize learnings around and obviously all your friendship with Shane as well and having worked alongside Coach K for his collegiate career, what would you just say about this is probably one of sports greatest coaches you want to talk about an amazing compounding journey.

I've met Coach K one time. All of my impressions are from watching his teams for a long time and then from being lucky enough to hear some stories from friends who got to play for him. One thing he said that I read one time, which is I don't consider myself a basketball coach. I consider myself a leader who happens to coach basketball. And I think you could replace leader with teacher in that case. I do think he thought of himself as a different kind of thing and I think you see that by him trying to be the Olympic coach and all this stuff. But I do think his mindset was one way. What Shane will always say is he's obsessed with his people. Obsessed with his people. And I don't know well enough to know whether Coach K's X's and O's are the best in college basketball history. I presume they're not. I presume that what he is best in the world at is understanding what will motivate each person and caring enough about them to demand the most from them. And I think that's why I'm so interested in learning from him because I think the lessons are hugely applicable everywhere. And I think that people now he's like this name, but being A college coach who's supposed to go coach the best professional players on the Olympic team. He was just able to prove it over and over again. And I think it's amazing. And this is a very hokey thing, but my parents are from India. As we mentioned, Coach K's family is Polish. And we're all like here in America. Growing up, some of the times when my parents would want me to do something, they would quote Coach K. And I just thought it was. You look back and it's just like cool to think about two Indian immigrants quoting this Polish guy when we all live in the same country. We all like this. Who lives in North Carolina. That's the leadership lessons that are being given to a little Indian kid. I don't know. That's just a cool part of living in our country. I am very willing to admit that I get overly excited about this. You know what it is, Rick? I think I like excellence everywhere. I like to learn from excellence wherever it is. People are talking about this. I haven't read it yet, but apparently the Mr. Beast document that has recently come out about onboarding into his organization, I can't wait to read it. Just because apparently it's just your written version of what it means to be excellent. I think Coach K happens to be excellent at two things that I really care about. General leadership and basketball. And so I think you take my interest in excellence, my interest in leadership, my interest in basketball, and man, I really admire him.

One of the really cool aspects of what you guys are exploring with Glue guys and something you said just about your passion for excellence, that's one kind of common thread too, I feel like that is woven through your career. You've been at a lot of pretty storied places. I've not been at any of them that I think of as being quite singular. And I think McKinsey was your first stop post Duke. Is that where you guys met when you guys were doing consulting interviews?

I didn't know you were going to bring this one up.

I had all kinds of consulting jokes. We have consulting jokes.

We have a rule in Seder Grove. We don't use PowerPoint because I did enough in three years at BCG for my whole life, but we actually did that. We had a great job.

We also don't use Excel because I can't use it.

That's a whole other story. We did have this really talk about excellence. Excellent crew of 10 people back in spring of 03 who were going to go to BCG Chicago when we showed up In September, there were only nine of us. And it just so happened that Ravi decided to go across town to McKinsey instead. Singular firm. I'd say BCG is up there, too. But it's funny. With Duke, there was another chance where maybe we could have spent more time together. Ravi, anything you carry forward today that you want to call out? Just in terms of those few years at McKinsey, what then helped you with KKR or Instacart and beyond?

Totally. I met Paul at the BCG sell weekend in 2003.

That's crazy.

When I first and I met Paul 21 years ago, and just to make sure it's not misunderstood, I never signed with vcg. I did not renege on an offer. I just accepted a different one. And I have a ton of respect for that. I think maybe a few things I took from McKinsey. One is I should have paid them. The idea of going out of school at that time to get to work at some place that just teaches you how to be a professional, teaches you how to work with companies. That's an amazing job out of school. I don't know what it's like today in that role. I know that back then I should have paid McKinsey. That's 1, 2. The whole reason I went to work at KKR, at Capstone and the group that I joined was because the person two years ahead of me, who one of them, who I really admired, he had gone and worked there. Your world is so small when you're young. At least it was for me. So the person who I felt like was an amazing performer a couple years ahead of me. This was the job that he went and took. So I was like, okay, I should try to get that. I didn't know anything about private equity. I didn't know anything about that. And then the third thing that I took is I have some incredible friendships that have come from that. But I do think that, probably career wise, just seeing what is possible. Sheryl Sandberg has this great quote of, you cannot be what you cannot see. And I think sometimes what happens when you take these first jobs is they help you see other things that you didn't even know existed. I didn't know what KKR was when I was in college. The only reason I knew what it was at McKinsey was because one guy had gone and worked there. And so that's what happened.

Yeah. A couple of weeks ago in our physical class up in Notre Dame, we had one of our friends, Vijayan Patel, who another Chicagoan I think he would've been three or four years younger than you, who also started his career at McKinsey. And he was saying that. I think there is this oversimplification that consulting is always on the outside looking in and you're just pining on things from a distance. And he had some statistic. There was something like if 20 of his peers at McKinsey went off and built their own companies, something crazy like over 15 of them had really big outcomes. You should have just basically backed anybody coming out of there with an idea. And it just makes me think that there's probably something in the operating system really useful in thinking about how to cultivate success and how to actually execute well.

Rick, it's so interesting you say that. Look, I think like anything people in the Twitterverse, they want to a lot of times paint something with a broad brush. Oh, consultants are this McKinsey's that true of the matter is there's thousands of people that work at any of these places. And the question is, what are each of them? I do think, just like what you just said, McKinsey did have a value when I was there. I presume they still have this value. But it was very amazing language, in my opinion. It was the obligation to dissent. And it wasn't like a right to dissent. It wasn't whatever another word might be, this word obligation to dissent. If you think something is wrong, you have an obligation to say it. And I think that what that created, and I do think this is a big deal for the rest of my career, is some try to get the answer. Don't worry about where you are in the org. I think that's a big deal. And again, you can say whatever you want about consultants and PowerPoint. All that's true. I get it. I understand the knock. But I think this idea of the obligation to dissent taught me very early in my career. You don't have to act like you're junior. Try to get to the right answer and speak up. And I think that's something that I certainly think has been impactful for me. And that's again, value. That was at a company I worked at 20 years ago. Yeah.

And I've heard you talk about just the value of agency and trying to instill in your own kids just how important that is. And it sounds like that's something that's central with the culture there. Once you learn that, actually you have the obligation and you have the potential to control a lot of things a lot more than maybe you otherwise would think or to at least influence a lot more. And I think with your career it's so easy to just jump to Instacart and Sequoia, but you spend a lot of time at kkr and this is a firm that we're really fascinated and just getting your perspective on because it's really in pretty short order become one of the most important alternative asset management firms in the world. And I have to think that you learned a lot there that led to your success. Some of the things you were able to contribute toward at Instacart, and then now it's Sequoia. But maybe if you're open to it, just giving us a little crash course on kkr. What could you only understand about the firm if you spend serious time on the inside?

I really like how you asked the question, was IT KKR for 10 years, five years in a group called Capstone, which is effectively led to spend time with the portfolio companies and then five years in private equity and particularly in our infrastructure business. So the first thing I guess I'd say, and this is going to sound like false humility, it's not. I have nothing to do with KKR's success. KKR is successful for the work of tons of other people, particularly Henry and George, but tons of other people. I think a few things. The first thing you have to start any conversation with KKR about with the founders, with Henry and George. And there's this business trope of co CEOs don't work. And that's actually directly untrue. If you look at the KKR situation, Henry and George for effectively since they found it with Jerome Kohlberg. But the whole time the three of them ran it. Then when Kohlberg left In I think 87, Henry and George have run it together. And then when they stepped down and moved into co executive chairman roles, Scott Nuttall and Joe Bay, another two coach CEOs, ran it. And so I think the first thing that you get is you have to throw out a bunch of rules that you have for what you think works in business and doesn't because they fly in the face of it. And what I always say to people is it's not that CO CEOs don't work, it's that CO CEOs without 100% trust don't work. Now, Henry and George had 100% trust, like 100% trust. It is laughable to think about going around one of them to talk to the other one of like, oh, George, Henry wouldn't let me do this. It's so clear that they're the team. There was no air between them. They would talk every day. And I think that what I learned first thing is if there is extraordinary trust, you can break a lot of other rules, which is all of a sudden they get the best of both of them together. So that's one thing. And it's interesting that they've chosen as they stepped out of the CEO roles to make it. They believe that's the best approach. They made two people, co CEOs who have known each other since 1995. And I think that Scott and Joe now have that trust. But they built it over years and years. I think they'd worked together for 22, 23 years before they put them in the seats as the CO CEOs, maybe even longer. So you start with that. I think the next thing that you look at for KKR is KKR is an adaptable place, man. These guys are not just investors, they are business builders. They are entrepreneurs. There's stories just from the very beginning of they couldn't raise the money and they couldn't figure out how to do it. And then when they first could get the money, somebody was basically like, we want to be the investment committee. And Henry and George are like, we're not doing that. We got to decide. And then they came up with the entire private equity compensation model based on oil and gas. Back in the day of Henry grew up in Oklahoma and there was a model of you could get a third for a quarter, you put in a quarter of the money, but you get a third of the profits. And that's like an oil and gas thing. And they were like, okay, cool, maybe we'll just take that to our new venture. When they left Bear Stearns. So you think they innovated in the first place. Think about that's persisted for all this time. 2 and 20, they just made it up and they took it from oil and gas and just that confidence of okay, we're gonna do that. But then the adaptability of started out as a private equity firm. Now KKR has real estate and infrastructure and credit. It has an investment bank, it owns an insurance company. It has a giant balance sheet. And this transition for them was not easy. If KKR just stayed a private equity firm, it would definitely not be what it is now. And so I think this answer of these guys were billionaires when they adapted KKR from a private equity firm until a multi strategy asset manager. They were multi billionaires when they decided to take on a Berkshire type approach. They're just Adaptable, incredible entrepreneurs. And I think that people don't totally get that when they look at it from the outside. First word people think about with Henry and George is probably investors. I would tell you that I think the first word you should think about with them are entrepreneurs. Another thing about the KKR culture is of course it's a very demanding culture. It's not an eat what you kill culture. Henry and George hated that from Bear Stern, they used to tell this story of they would lock their offices when they left because people would take their ideas and kkr. It's sort of like, look, make KKR win and you'll be fine. We will all get taken care of. And I think that is a really different thing than a lot of. I've never worked at another private equity firm, but I am confident that it's different. And I think where that shows up is they probably are a little bit more patient with people because they feel like they've had a really rigorous hiring process. They're probably a little bit more patient if they believe someone's doing the right stuff of okay, they'll figure it out. And it doesn't mean they don't make the changes they need to make, but they're probably a little bit more patient, I would guess, than firms of their peer group. And then I think the last thing is the best way to distinguish yourself there is to be a little bit more entrepreneurial. They definitely like because they start as entrepreneurs, they like people that have ideas and have the willingness to speak up and all of that. Scott Nuttall, who's the co CEO, Scott just was full of ideas and amazing ideas and some of them worked and some of them didn't. But Henry and George just always loved and admired and appreciated him even when he was younger because he just had incredible ideas. Joe, who's the other co CEO Joe, went and built the Asia business. And you think about both those guys, the thing that runs through them in addition to their performance was this entrepreneurialism. And I think that's probably something that's really underrated when it comes to evaluating KKR is how much that spirit of entrepreneurship runs through the firm. And it's pretty awesome to see it.

I was going to ask you how the founders, what you experienced and how they transmitted culture through the place, but I think that's at least a big part of the answer is how you incentivize people and what you reward and what you don't reward. So often you look at these firms that start off entrepreneurial, but if it's just a matter of scale or a matter of a certain level of wealth creation, bureaucracy sets in. And entrepreneurialism is not what gets rewarded. It's actually more protect the core. We've got a good thing going here. That's a powerful, at least one powerful explanation, because it does seem like we had last week. Sean Klimset, you mentioned infrastructure. Sean Klimczak, who runs Blackstone's infrastructure Fund, good friend and former section mate of mine was teaching and in class, and I asked him a similar question about Blackstone and Steve. And some of the answers were a little bit different to what you said with George and Henry. But the commonality is, I think, that entrepreneurial spirit and what's rewarded. And also he brought up this idea, and we're curious because this definitely comes up, I think, with Sequoia, when you talk about culture at Sequoia, but this concept of success, amnesia, how you balance, okay, we are good, we've done good things, we've created value, we've made great investments. We're not going to just be grounded in complete humility, per se, where the humility shows up. It's just that you just discount everything that's been done in the past as if it just doesn't matter, as if today really is day one. It sounds very similar to how you're describing kkr.

I think people, when they hear. I know you understand this very deeply, but I think people, when they hear it's about how you incentivize people, they automatically go to. It's how much you pay and how you pay. And I actually think it's like a very narrow understanding. So one of the things I think that KKR did extremely well and what you just said, Rick, made me think about it, because you're right, it is about the incentives, but it's not.

It's not the monetary incentives per se.

One of the incentives for being entrepreneurial at KKR was that Henry and George would like you better and they would spend time with you. Not because they would do it on purpose, but they just gravitated towards that. One of the things you would notice is that Scott was in Henry's office a lot or on the phone with George a lot, even when he had the same title as other people. And sometimes they'd refer to him of, yeah, I was talking to Scott and you could just tell that they respected him. You know what I'm saying? And I think that when people talk about incentives, I think they undervalue the thing we all want, which is respect. We want to earn respect from people we care about and we want to respect ourselves. But I think that one of the things that you can't fake is do you respect somebody? Do you care to spend time with them? Do you choose in your discretionary time to go and seek them out? Do you walk over to their desk and say, hey, what do you think about this? So much of the value later, when I got to experience being a leader, is that I find that people care about is just asking them what they think and actually caring. I incentivize to care what you think. It's. You have to be good. You have to actually have an opinion that I want to hear.

That reminds me of one of your writings on hiring. Hiring why more is often less. You have a bunch of ideas in there around this form of respect actually is giving those people the hardest, most important projects too. So you show respect, but the way you do that is to give them as many people as they can handle and the hardest projects because that's actually how they're going to get ahead and they're going to make the most money and have the most leadership or responsibility.

Yeah, you want to know that you respect them enough to give them responsibility. But I think that's something because Henry and George never left the field. They would be out there talking to people and if you were interesting, they would want to spend time with you. And I think that's independent. People talk about skip level. I was so many levels below Henry and George when I was at kkr. And I didn't work for them. I worked for people who worked for people who worked for people who worked for them. Yet they both made time for me. How cool is that? That's like a five skip level thing.

It actually makes me think about some of your writings on friendship as well. Because when you get into incentives, it's not just that George and Henry were carving up their time coldly and saying, we're going to dole out our time today. It's actually if you step back and see in your blog post on it, you reference the inner ring by C.S. lewis, who's one of my favorite authors, but he basically talks about. The whole book is broken down into four sections on what he categorizes as four forms of love. Affection, Eros, friendship, and agape. And Agape deals with the love with higher power. And he distinguishes between these loves. And they're quite different. Some of them are jealous loves. Others, like friendship, actually get better with more. And I think this is where I was Leading me to. You had written, you said, if a friend is spending time with you, it's because they want to do it. There is something special about this. Particularly at this point in my life when I and many of my friends have young children, the opportunity cost of time with friends has never been higher. I'm grateful that my friends choose to spend time with me. But as I reflect, it's not just gratitude, it's pride. I am proud that these people enjoy our time together enough to spend their limited free time with me. And I imagine that's very similar to how somebody would feel if George and Henry wanted to grab a coffee with you. But the point to me is actually that where Lewis roots friendship definitionally, is that you see aspects of the world the same way, that you share the same values, that you care about the same things. It's not the love my wife and I have, it's we love one another. We're like, looking at each other and we love one another. The love of friends is not looking at each other, it's looking out. And so there's plenty of room for there to be other people. But if somebody's really entrepreneurial and has lived a life that likes to embed those risks and take those chances and stuff, they're going to seek that out in their friends. They're going to want to attract folks who also have that kind of same disposition, if you will. And so I really like you reframing incentives because, yes, absolutely. Most of the time people talk about incentives, they go right to how somebody compensated. And actually, for most of us, most of the time, it's not the thing. It might be the thing for a little bit, but it becomes not the thing very quickly.

It's a hygiene factor. You want it to be fair and you want to buy stuff for sure, but it's not enough. It does not last forever. That is not enough. At least for most of us. And I think what you just said of the reasons that we find friendship, I really did to this day. I was walking the other day. Our offices, the Sequoia offices, are in the same building as kkr, which is so funny. People in New York are always like, oh, that's not that interesting. No, no, it is interesting. There's only two tenants in our office building. The idea that one of them is kkr, one of them is Sequoia, that is weird. That's interesting. But I was going for a walk the other day. I had my AirPods in. I was just, like, walking on Sandhill Road, and then this older gentleman, I was like, in my own world, walking. And then this person stops and and is looking at me. And I come to attention and it's George. And I'm like, oh, shit. And I'm like, hey. I immediately take out the AirPods. It's still full boss mode, of course. Take out the AirPods. And how are you? And he was walking and I just was like, can I walk with you to the office? I was like, where are you going? He's like, I'm walking. He walks from his house some number of days to the office. He's like, yeah, of course. And I just got 25 minutes, 20, 25 minutes walking with George. And dude, I was so happy that he said yes. Can I walk with you? Yeah, you can. How good does that make me feel that he's willing to spend the time with me? To this day, he could easily have said, no, no, I'm busy, I'm doing this. And no, he made the time and shared his walk with me. And so to your point, I completely think that there feels great when somebody you respect is willing and wanting to spend time with you. And I think that is something that people underestimate in organizations of just how valuable that is of somebody's attention.

We often, the class that we teach is all undergraduate seniors, and so we talk a lot about mentorship, and we know that it's not really a word that should mean all that much quite yet, but it's going to be very quickly and we'll come to it because I think there's some really awesome stuff in the instacart era with Mike Moritz and some of the mentorship that he modeled to you. But I often comes back to this perspective that mentorship is like this subsidiary of friendship. It's a certain kind of a friendship. You can't force mentorship if you don't have enough in common with somebody. It just doesn't make sense to try to build a mentorship. A lot of times what you might have in common is that you both want to build something great. It could be a company that could very well be enough. A lot of times it just takes a few other things that could be just unique to you. And so it's like so much just encouraging people to continue to follow those things that make them unique, because that is exactly how they're going to find the right bosses, find the right jobs. One question I had about your KKR time, having spent half the time really working on a portfolio group, what the learnings were working in a Group like that versus just doing private equity deals that would then I would imagine set you up in a way to take on a significant operating role at Instacart. But maybe just say a little bit about those two posts that you had at kkr.

Yeah, I think the portfolio team at Capstone, I really enjoyed the work of Go be with a company. We mentioned earlier, consulting and how one of the knocks is you don't have enough skin in the game. One of the things that's nice about being in the portfolio team at Capstone is KKR owns the company usually. And so you do have skin in the game in the sense of you're right there with the management team. And I think that there is a credibility that comes along with that. It's not perfect, but it comes along. And I think that maybe the big thing, Rick, would just be theory doesn't help you. Either you make the company a way better company alongside of management or you don't. And either it shows up in the financials or it doesn't. But if it doesn't show up in the financials, it doesn't matter. Do you see what I'm saying? I'm sure we've all had this experience with sometimes a procurement team in a company will be like, oh, we saved $700 million in procurement and the company has $400 million of EBITDA. And you're like, does that make sense to you that you think the company would have like negative $300 million of EBITDA if you didn't do the procurement that you're doing? Their numbers are divorced from reality. You know what I'm saying? Whereas the truth of the matter is kkr, you buy something, it is a certain price. If you cannot make it a better business, you cannot exit for more than you bought it for. And so one of the big things was just. Just where you focus your attention when it has to show up in the financials. That was cool. That was a real big learning. The truth of the matter on the private equity side, dude, is I went. It was awesome. Incredible learning. You learn what are the three things that have to go right for this investment to work. But it was also deeply humbling because the guys that were doing it, I thought they were better at it than I was. Raj Agarwal, better investor than me. Brandon Freeman, better investor than me. Billy Butcher, better investor than me. And those guys, a couple of them we were, would be side by side and some of them were in different groups. But it was also a learning of at the Time certainly they were just better at the job than I was. And I think that it's like anything else you have to commit to are you going to go and earn the right to be great? And it will take time. And I think some of these guys, it was a very humbling thing to be on the private equity team there because you learn some of the things that folks have that make them excellent and you're going to have to build those up. And it wasn't going to be just one or two years. It was going to take real time. But there were very different posts. I am happy that I was one of the things that's happened. And again, These guys deserve 100% of the credit. But Raj let me be on the infrastructure team early on as it was getting created. And so I remember being part of the team that raised the first fund and raised the second fund. And so I do feel pride when I watch these guys in the platform they've built on their own. It's an enormous platform now. And I think truthfully, I don't know that I would have perfectly predicted how big it's going to be. And I think it's a testament it to, to their performance and it's also a testament to compounding they have built a really giant business and also again humbling. This is a business that was built, I left and the business succeeded fantastically after I left. It's not like I left anything there that grew into something. So I do think it's also a lesson in humility of people did incredible stuff and you have nothing to do with it. And so anyway, another lesson, it's also.

So powerful when you can just be honest with yourself when you come into contact with, with certain things that you're just not the best in the world at or not.

You Learned that in 6th grade from your dad with basketball.

We geek out way too much on this compound interest equation. But we think about the P, the principle in the equation as being really someone's purpose or their passion. And then you've got the R, the rate at which we're compounding knowledge, our craft, our jump shot and then how long we can keep it going. And that's the exponent, that's where the real power is. So we'll get to lessons on the R and the T. But how would you describe your P key coming together as you're observing even just yourself and being able to have the self awareness to recognize there were certain roles as an investor that maybe you weren't as skilled at as others. Was it clear to you by this point, pre instacart that what it was you were trying to compound what it was you wanted to be extremely good at?

I don't think so. I don't think it was as clear. I think truthfully what happened was when we had our kids, I do think that obviously was just a. A fundamentally shifting moment. And Nayan and Shreya are twins, were early and they were so small when they were born. They were like, thank God for neonatal nurses. But I think having kids, certainly that's the only thing I can think of that provided the purpose. Because even before they were born, I was, of course, close with my parents and all that stuff, but not as close, I think, until they came along. I don't think I realized what people had done for me, realistically. I don't think people, until you're up in the middle of the night waking up with them and taking care of them, I don't think it's really visceral to the extent somebody is lucky enough to have great parents like what somebody did for you. So I think that having them made me much closer, of course, to my parents. It obviously brought me this incredible purpose to be great for them and of course brings you even closer with, in my case, my wife. But I think that combined with the Clay Christensen book, How Will youl Measure youe Life? Huge deal for me, I think. To your point, what does that mean professionally? I actually think that what it means professionally for me, and as it relates back to the purpose, was you want to be able to tell your kids what you did and why you did it, and you want that to be a lesson for them, hopefully. Shane has this great quote of the lessons we learn from our parents are the ones when they're not trying to teach us. It's not the stuff that they say, it's what the kids observe. Honestly, I'll tell you, Rick, I haven't thought about this, but I think that that not being great at the private equity investing job probably made me want to do something that either become great at that or do something that I think I have the chance to be really good at. And I think you can become really good at stuff. You can start as a beginner, but I think that in order to be really great at something, you have to be really ready to commit a lot of time. You have to be ready to commit a lot of yourself. You have to do all that stuff. And I think that I was probably a little bit more excited about trying to be great at helping lead a company than I was trying to learn to be great at becoming an amazing infrastructure investor. And whether that's because of natural affinity or skill or I don't know. But the gravitational pull towards Instacart was I really wanted to go work at a company, particularly after we'd moved to California. I just felt like there was a world happening in tech and it was exciting and I was excited to go and work at it. But I think that maybe that's the point because, like, I wanted to be able to tell the kids that I'd worked hard and become good at something. And I was probably, maybe I thought I had a chance to be better at that.

When you look back at that period, maybe before and after, what's your perspective on the power of motivation? And that could be carrots, could be sticks, could be fear induced, it could be joy induced. Rick and I think about this a lot. Why we do our work, why we do our teaching. You already alluded to money being a little bit ephemeral or having a little bit of a short fuse in terms of the longevity of that being a motivational factor. What are the different types of tools you used at Instacart or with yourself, with your team to motivate folks? And what do you think is the most powerful source of long term motivation?

Tell you, and I'll try to. Maybe we can work it out together as we're in office hours right now and I'll start with something and we can figure it out. But I think one thing that happened at Instacart was I inadvertently ended up feeling desperate. I did not go there in order to feel desperate. That was not the purpose of going. But I think having gone somewhere, having taken a big pay cut, having made some commitment to my family, I'm going to go try something new. And then having a big team that you were one of the leaders of, I think that, oh my God, we have to make this work. I think that ended up being a very real motivation and something that I really hadn't felt before. I had felt pain, I had felt like I was going to fail. I'd felt stuff like that at KKR for sure, but I don't know if I've ever felt desperate, truly desperate. And that was very motivating. And I think that that is an underrated source of motivation because just I have no other way out. I mean, there's all these books, like the Ryan Holiday books, whatever they like, of the obstacle is the way ego is the enemy, the Only way out is through that kind of stuff. Getting to those points is actually, I think, a good thing. I will also tell you, I think to be fair, I really, on the money being ephemeral side, I do want to make the point of. One of the things I don't like is when people are like, oh, you shouldn't care about that. I don't think that's true for me. I definitely cared about money and I still care about money. I think the point for me was I didn't want to only care about money. And I think that what earning some early on in my career allowed me to do was take some more risk on afterwards with things that I was okay doing. The fact that we had earned some at KKR allowed me to be more willing to. To take a bigger risk financially by going to Instacart. Anyway, going back to your point on what do I think the enduring motivations are? I do think that we all went to the Zuckerberg thing with the acquired guys. One of the things he just said in passing was just, I'm just insanely competitive. I don't know why Mark Zuckerberg is competitive. I do know that competitiveness seems to be an enduring motivation of just wanting to play the game and wanting to try and be a winner in the game. And I don't know what the root is for why people become competitive, but I do think competitiveness of just like there's that. I think another enduring motivation is having a team doing things for people that you care about and doing things with people you care about. Most of the time you talk to people who, like, have accomplished anything they ultimately are looking for. I want to make an impact and I want to have fun doing it. And I think that having fun doing it comes from having people around you you care about. My best moments at work, for sure, are always moments where the team accomplished something and I got to see it through someone else's eyes in addition to my own. Something I think about, about. And back to Coach K, he talked about after the 92 championship how instead of feeling joy, he felt relief and how that was not good. It's not good if the only thing you feel after you accomplish something is relief rather than joy. And he worked hard to bring back, okay, how do I get to a place where I feel joy when something good happens rather than relief? Because if the only thing you aspire for is something that allows you to exhale, that is something I think we all have to work on. You know what I'm saying? I Rambled there. But no.

Well, I think it's helpful and it goes back to this compounding equation that Professor Rick outlined for us, and especially now that we are co CEOs who run a company. You wrote in that piece on friendship that you believe that earned success is the key to happiness. And so I think all we're obsessed with is the T. How do you keep it going? So if for a little while you need to be desperate, that can be amazing. And I think one key here, and we felt it now that we run a company. You were running a company with a senior team at Instacart. The buck stopped with you, this small group and then having a real thing that you. And you're trying to create value for the world by building a beautiful company. You're also trying to hire and manage this team of a players around you. So it's. Yeah. And we would agree money is a great motivator. We just don't think it's the only thing that can lead to unending tea. There's a collage or a kind of a kaleidoscope of different motivational factors.

Look, if you do that, then at some point the expected value of one thing is greater than the expected value of the other thing. And if it's just money, then there's only certain things that you definitely will do. Yeah, I agree with you though, Paul. I like the way you said it. If we're going to make the team win, there are different moments where different things are going to be the motivator. And it's also different for each person. Right. Somebody might be motivated by trying to be great. Somebody at that point might be motivated by trying to make a lot of money. Somebody might be motivated by trying to prove that they're not a failure because their last one didn't work. I actually think it's person by person. And then creating that in terms of a shared purpose of wherever your individual motivation is. The only way we accomplish that is if the team wins. That I think is a cool wrapping.

Going back to these great coaches. None of them treat every player the same. So much of the job is being able to understand what that individual needs, what that individual is fueled by at the time. And like you said, it's ephemeral. But I think for me, I think this is where studying the human condition becomes so important for leaders. What does it mean to be human? What do we actually need? We have these basic needs and we have these basic desires. But ultimately I think there are these really enduring forces. I remember Hearing Oprah Winfrey explain why she's been able to get so many people to confess to her crimes and all kinds of things. And she basically said, it's because I believe that everybody, everybody wants to understand and be understood. Just the power of being understood is such a huge motivator. The other side of that is just the desire to understand the world around us more, to understand other people, to build our knowledge base. It's why you have to invest so much time in people around you, because it's not easy oftentimes to understand what somebody is looking for and how to get the most out of them and how to help them to flourish. But I imagine stepping into that role at Instacart, there is this sense that this is why we're always pushing our students to get operating roles as early as possible. And even if they want to become an investor eventually is go get into the scrum, get into the mix. Understand what it takes to build company, but understand what it takes to marshal other people with. Got a great idea. Great. How do you communicate it so that you get other people on board?

I think Jamie Dimon has this quote that I heard one time that he had said, which was like, theory and practice are the same. In practice, they couldn't be more different. And I think that that is a pretty good distillation. And then the other thing I was thinking about on your people stuff, listen, One of the best leaders I have ever met is the CEO of Instacart, Fiji, Simo. She's amazing leader. And one thing about her is, look, she cares deeply about the company succeeding deeply, but she still cares about the people enough where if there is something that is good for them, she still is able to separate herself and talk to them about what's good for them. People aren't vessels by which she can accomplish her goals. She is able to actually care more about the person than about her particular goal. And the crazy thing is, in the long term, it creates more followership, more motivation, more all that. But she genuinely cares about the person. I aspire to be that way. I hope I'm that way. But seeing somebody be that way, even in moments of real stress, is awesome. It is awesome. And I think that the best leaders earn followership, and that's what she does. And I think that what you just said, though, about people can feel if you just view them as a vessel by which your goals can get achieved versus no, I actually care about you. I care about you, your goals. I want you to do this. Now. Hopefully we can do it together as it's here. But if not, what matters most is that I do care about you. And that also allows you to be demanding of people because they know you actually care.

Can you talk about Mike Moritz in that light? Demanding and supportive, creating that followership from you and that long relationship you've had with him now?

Yeah. And maybe just a little context for those who might not have the full backstory on the Instacart journey, but specifically when you came into the story, what was going on, why you needed someone like Mike and his support and his demanding nature, but ultimately his mentorship maybe just give us a little bit of a sense for the transition to Instacart and then feed into the relationship with Mike, who was on the board at the time.

Look, Instacart is an amazing public company today that has beautiful financials and incredible leadership team and this wonderful opportunity in front of it. So this is 100 years ago to answer your question. Yeah, it wasn't always like that. And I think when I joined almost 10 years ago now, most of the people that listen to Joys of Compounding, I presume, are pretty financially oriented. We're burning $12 million a month. We were losing $16 on every order that we did of gross margin. It was pretty. Whoa. We had less than a year of cash and it was getting worse every month.

There was a time where essentially the unit economics were just backwards, totally backwards.

My kids homeschool. One of the lessons we try to teach them on business is there's only two rules of business. Make something that people want and sell it for more than you would make it for. And, well, you're violating number two in a pretty severe way. So I think that you asked about Mike. Mike, of course, was the Sequoia board member at the time, and obviously this legendary investor. The first thing when I saw the financials was, remember, I'd come from private equity. It's very different. And even within private equity, I'd come from a very. Something that aspires to be lower risk and more consistent in the infrastructure business. And so certainly my lens on businesses was particular. I'd seen businesses that got bought by private equity firms that have stable cash flows and all this stuff. And so the first time when I saw it, this is bad, this is terrible, but maybe this is. I was hoping that this was more normal for Silicon Valley. Maybe venture vendestors can see that, oh, it's going to be fine, and we're going to figure it out and we'll still get funded and all these things. The first reaction was like, oh, my God, what am I going to do? But then there's a little. Turns out to be false hope. But maybe it's okay. Maybe this is a world I don't yet understand, whatever. And I think the first thing that Mike provided was just the reality of, no, this is not okay. This is bad. We need to fix this. And I think that I say this to people now, but occasionally I'm bearer of bad news. Our financials are bad or we're not on track, and sometimes people don't like that. But I think the truth of the matter is, don't get mad at me. Be mad at the standard that we both agreed that we were going to hold ourselves to. Don't be mad at me. Be mad at reality. And I think what people most. Mike did a good job of was like, establishing reality of this will end in bankruptcy. It will not end in the business continuing and being funded and all that. And I think that the clarity of that was actually extremely demanding, but it was extremely helpful, you know what I'm saying? Of just, you need to get shaken and this is not going to work. Figuratively speaking. The beginning of that relationship was for sure, just honestly, something resembling, what the heck are you doing doing? And remember, I'm the CFO now. Again, these financials, My first reaction, I don't feel proud of this. My first reaction was like, man, I wasn't even here for this. These were September financials. I got here September 28, November 5, we were presenting the September financials. I was here for two days. Come on. But of course, that's the stupidest reaction. Who cares what you are here for? What you weren't. You're the CFO now. Let's go. And so the demanding part was like, effectively, if this continues, you're going to.

Go out of business.

And do the math. What else do you think is going to happen? I think the supportive part started out demanding was Mike. Then following up with, and you and I are going to do a weekly board meeting, me and Mike.

Tuesdays with Maury. Was it Tuesdays with Maury, Wednesdays with Moritz.

I still remember he's like, you and I should talk weekly. And I remember being like, of course the answer is yes. But I remember saying. I was like, hey, listen, yes, of course it will be hard for me to produce something every week that's worthwhile of us. This is worthy of a board discussion. He was like, I just want to talk to you every week about what's going on. And so again, double demanding. I think that the supportive part, part you learn later is also, look, man, he was ready to spend the time, wasn't just like, go figure this out. Mike Morton's got a lot going on. He's a busy dude. He also, at that time was a knight, a multi billionaire. He didn't have to be doing that. And realistically, if you really think about it, if something hadn't gone right with the company, it would matter a lot more to me than it would matter to him. But he didn't behave that way. And so the idea of the every week, all of a sudden, now we can talk. Okay, this is what's going on. This is what we're doing. And I think that that that combo was pretty powerful. Now, look, the team deserves all the credit for all the good stuff that happened at Instacart afterwards. The leader can ask the right questions, and Mike in that case was a leader on our board. But he did provide real reality. He did provide the willingness to spend time, and he did provide a standard. And I think what happens then is then when we beat that standard, when the team produced all these incredible results, there was so much pride. When he was proud, there was so much, oh, man. Because he had beaten us up. And so all of a sudden, when he said stuff like, this is an incredible turnaround, I still remember there's this old interview that he had given at YC when Sam Altman was running yc where Sam asked him about what keeps him going. And he referenced the team, like the team at Instacart, as one of the things on this super long interview. And it was February of 2016. Remember the beginning of this was November of 2015. It was terrible. And I think it was February, March 2016. But seeing that I remember, I teared up. I was sitting at my desk and I teared up. But what happens when you set a really high standard standard is when you make somebody feel like you're achieving it. You give them the chance to have some earned success. And then the other thing Mike did was when he interviewed me the first time, he asked me all these questions about my relationship with my parents and all these things that I'd never been asked. The reason I think that also has been fascinating for me is it's helped me with language for learning about people. It's given me more willingness to ask people questions about their lives early on and they this wanna be understood concept. I asked him, I was like, do you think that anybody else can ask questions like you ask. And he was like. I joked. I was like. At the time, he was 65. I was like, you're a knight. You were a former journalist. And he was basically like, yeah, everybody likes talking about themselves. If you're actually willing to listen, you can ask. And then I also noticed, interestingly enough, Doug Leone does something similar of asking questions about you as a kid. But that's another thing that Mike and Doug both did for me of they've helped me build better friendships, they've helped me be better at leading. Because now all of a sudden, you ask people some things that you wouldn't other asked them. I'm very grateful to Mike for all the stuff that happened early on at Instacart. But I also think just being an embodiment at the time of this demanding and supportive, but also was seeing that up close in addition to the way I'd grown up. And I still like that leadership philosophy.

What an amazing lesson in how to venture capital. I don't know if you knew at the time that this was going to be your path.

No, no idea.

To just understand, just this is the essence of being a great board member.

Remember, I had come from a path where I wasn't very good at the investing job at private equity. I certainly didn't think I was going to go be an investor again. That was definitely not what I was thinking.

It's just, I think these circumstances like this that you happen to have found yourself in a company that happened to have Mike Moritz on the board. There's a thousand different ways that venture capital could be modeled to you as a corporate executive. And that's the one that had this profound impact because it was a reality you needed. But I also think in a world where, where, yeah, again, the tropisms around what value do venture capitalists provide and beyond the capital, to have that example of just powerful leadership and mentorship and basically helping a company to not only survive, but get back to a position of outright flourishing, it just has to have had a profound impact.

I think Mike represented what Sequoia aspires to be in that case, you know what I'm saying? That's definitely what we aspire to be. And also to your point, again, on painting with a broad brush, I don't know how valuable valuable every venture capitalist is to every company. I know that some venture capitalists for some companies are helpful. And I think that it's still the management's team, it's still the founders, it's still the leadership that does the stuff they still deserve all the credit, but it helps, you know what I'm saying? And I think that to your point, you can't say it. You have to see it. You got to see somebody doing it. I remember being surprised. I remember being surprised that he was available every time I wanted to talk to him. I just remember being like, oh, really? Wow. I didn't know that's the way it would be. And even little things, that stuff went a long way with me.

Yeah, Ravi. It reminds me so much of our relationship with Mitch Rales, who co founded danaher. And in a similar way, we locked into this relationship a few years ago with him related to one investment. Now that's expanded and to many of them, we don't understand why he's always available for a text or a call. Why someone about the same age Mike was back then, 40 years of experience, not only seeing what it took to evolve Dan or her many times over, but lots of mistakes. And he's very open about them and he wants to share those constantly with the new companies we're building with him. The biggest value for us beyond the mentorship friendship is just to see that up close, to see what that world class, excellent, singular type orientation can be. And Mike does it differently than Mitch. There's only a few people in the.

World world like that.

I think what we've been shocked by is he has more energy to go build companies or whatever he's working on. He does it at that excellent level still, which means he's available for it. And we know from the stories we've heard about Mike and from what we're hearing from you, it seems very similar in terms of just that obsession with doing high quality things.

Also, I think to your point, going back to the mentorship conversation, I bet you it makes you feel good that he has time for for you and that he responds. And the nice thing about it is he's definitely only doing it because he wants to. He has respect for you guys and he wants to spend the time he can do anything he wants because he's choosy about where he spends his time. But I would bet you it does as much for him that you're asking him for advice and perspective as it does for you, which is crazy. This is such a stupid example, but it is the thing that came to mind. I coach our kids basketball team, the school team, because even if you're homeschooling, you can do stuff with the public school, which is awesome. But anyway, at the end of the season, parents will be like oh, thanks you, it's really nice of you to do that. In my heart I'm always like, I should thank you. This was way more fun for me. So fun. Be around and have somebody actually want to learn or be asked. And one of the cool things about mentorship and now I'm lucky enough to have some other ones as well. If you really care and they care about you, then both people are getting something out of it which is just a really special way to have a relationship.

It's a good transition to talk more directly about Sequoia and I guess maybe just first question I would want to understand you don't really have the self belief as an investor and yet somehow you end up maybe the world's best investment firm, certainly the world's best venture firm and coming from having had a Sequoia backed operator seat and helping with righting that ship and all that I'm sure played into it. But there's got to be more to the ingredients that Sequoia would look for for a teammate. When you look at just your transition to Sequoia and now just having had some experience and seeing and living the culture and also just seeing, seeing people come and go, what are the attributes of somebody who is fit to join.

Sequoia, present company excluded? I'll try to answer this as best as I can. So there's two things that Sequoia stands for more than everything else, which is performance and teamwork. And that's not platitudes in my interview. Doug Leone. Hey, look, just so you know, if you don't perform, we're definitely going to get rid of you. That's during the interview process where I'm partially being sold.

Should I high five you after you say that or.

Yeah, exactly, great plan. The other way to interpret that is if you do perform, you're only going to be around performers. But okay. And then the teamwork thing of look, you have to do it together, otherwise don't do it. And I think that there's these incredible examples, but the stories that are told inside of Sequoia are always ones that involve many members of the team accomplishing things. And it's weird because you generally think of venture as individual business, business or a collection of individuals. And SEGOI definitely does not try to have it be that way. So if there is a great result, it's this person was the importance in sourcing it. This other person actually served on the board, this person helped recruit this person to the company. But all the credit goes to the founder Anyway, performance, teamwork are the things. I think the number one thing that Sequoia probably looks for, if you had to pick one thing, is a hyper competitive gene. I think we also want to pair that with people that are really, really good people with great hearts of gold, whatever it might be. But the hyper competitive, it doesn't work unless you probably are hyper competitive. You really have to try. And whether it's a love for winning or a hate for losing or both, that is probably the number one thing that runs through everyone. I would actually argue that I think the more confident you are as an investor about your past, the less good you're going to be in the future. Because it just doesn't matter. Do you see what I'm saying? It truly doesn't matter. It is like sports. In this case, LeBron having won a bunch of championships and MVPs, it does not matter in the Olympics. He's got to go play and you got to do it on the floor and people are going to come at you at their full thing. And so I think that even the people that have generated incredible results, what hopefully they have is honestly a humility of, okay, I got to go do it again. And the thing that I did before, maybe it helps me win something that I wouldn't have otherwise won, but I still have to pick it. Do you see what I'm saying? They still have to pick which one to go after. And so I think what Sequoia tries to do a lot on this success amnesia, which I have never heard that language, but I really like it. It tries to really make sure, you know that it's not just that we by nature try not to celebrate the successes of the past or lean too much on them. It's actually that they, they don't really matter. For the thing of tomorrow, this we're only as good as our next investment. It's not a trope, it is the truth. And I think we want people who are that way by nature. And so I think, Rick, what ends up happening in the interview process is a lot of trying to figure out what makes you like that, why are you like that? And is that enduring even as good things happen in your career or you have some success, but more importantly when you have the failure, because it's going to happen, right? Our business has a lot of failure in it by nature. Our business also has super long feedback cycles. And you want the competitiveness to be crazy enduring because no matter what, you want your reaction to be, I want more competition, whatever. But it's weird, right? You want more competition, but you want it to be in this teamwork orientation where you don't want it against your partners. You want the competition to be outside the building, not inside the building. But if you made me describe it, I think that's probably the main thing. It's not about are you a lover of technology? It's not about was your GPA this or that. It is what is the forever hyper competitive part of your history. And then you probably would add some sort of deeply curious part of your.

It'S interesting because I know Paul spoke with Jeff Wang, one of his best friends and one of your partners there at Sequoyah, a little bit about you. Paul was basically one of the things that he shared with me was he was remarking about he had just come from meeting with you and he was just just barely spend any time with this guy and yet I feel like he's a long lost brother. That's one of Ravi's superpowers and literally it's why founders like to spend time with him, et cetera. I guess in my mind not being a venture capitalist but being very interested in how you as an investor support founders and operators. Maybe just thoughts on how you would articulate what it is you really do, what you need to be good at. And maybe if we could table the you need to be able to see the future, but more in the context of of the investments that you have. And what is the art of being a venture capitalist in the sense of being a supportive. We use the term builder helper. You're basically surrounded by people who have committed their every waking hour and their sleepless nights to trying to see one thing happen successfully. And you've got a collection of these people and you're there to, I don't know, be their guide, sometimes be their support. But just say a bit about how you would even just describe what it is that you do do in the context of how Sequoia has been so successful at that craft.

I'm very person driven to make that more real. I think there are some people that will spend a lot of time writing and coming up with their view of where the world is going. Here's this industry and it's ripe for disruption and I'm looking for a company that's going to do this. I do not have that in me. That's why I laugh and see the future. I definitely do not know how to see the future in any form or fashion. Even the Matt Kohler version of this of job is not to see the future, but it's see the present very clearly. I don't even know if I do that. Well, I think what I try to do is when I meet with somebody, I try to really listen to what they're telling me about how the world is going to be different. And I try to see if what they say as the Founder resonates with me, or almost better than resonates, takes me aback. Well, wait a second. What did you just say? And I got this piece of advice early on, which there should be something you hear where you almost can't believe what you just heard. Get curious. What did you say? Why'd you say that? How confident are you in that? And so what I'm looking for in a meeting with a founder is for them to describe some future that is compelling, inevitable, and we're early in the journey. So I always talk about, I'm looking for things that are early and inevitable, but ideally it's surprising that they're inevitable. You know what I'm saying? You haven't thought about it yet. Oh, my gosh. Oh, wow. Wow. That could be. That is going to happen. And the reason I think that matters, it's very, very hard to just conjure something into being. I think you can accelerate it, but ideally, the thing you're describing will happen with or without you. It's like something in the world that's going to happen with or without you. Maybe you can make it happen five or ten years earlier, maybe you can be the one that captures the rewards from doing it, but ideally, it's not. The inevitable is important to me. Oh, this is the way the world is going to work. The reason I start with that is I want a founder to have seen what the world is going to be. Be like, and then I want them to tell me what it's going to be like, and then I want to believe them. That is super different to me than I'm going to figure it out myself and then look for somebody who's doing that. That is not how it works for me. I then combine that with the idea of the future is here. It's just not evenly distributed. Even when I went to Instacart, when I asked Avni, we used it a lot when I asked her, what do you think of this? And she said, I love it so much. If you wanted to move, I wouldn't move unless Instacart delivered to the new house. That felt like, damn. That felt as incredible customer love. And it did feel inevitable that people would buy more groceries online in the future than they bought at home. It felt like that was something that was going to happen. And then you combine that with the real life feedback. That's not like an NPS score. That's not like a 70 NPS. Even though that's great. That's like, I can't live without this. So you combine it with early and inevitable combined with some customer perspective, some number, something that's just. Oh my gosh. Combine with that. I think then it becomes very. These things are true. I just named some pretty art things. Right. That's not a ton of science yet. And I would say the next one's also art. How will I feel if this founder calls me at 10:30 at night? Because if I take back this idea of a lot of the value that you provide as being available to somebody and willing to tell them the truth and willing to be there for them, you got to want to talk to them at any time. And even if that's an inconvenient time or anything, you got to want to talk to them. You're signing up for a really long journey. And in my heart, I don't think this is incongruent. I believe that 99.9999% of the credit goes to the founder and the management teams that build these companies. And I think it's valuable to be available for them when they want to talk. You know what I'm saying? And I don't care what percentage of value it creates. I just think it is useful. Have somebody who wants to talk to you or help you. And so I think the combination of early and inevitable something that makes me blows my hair back, metric number, customer testimony, something combined with do I want to pick up the phone? How do I feel? Patrick calls this the green button test. Those are things that I look for. And I'll tell you now if I bring it back to Sequoia, what's interesting there is we're a very written culture. I have an extremely hard time writing memos on companies that I'm not super excited to invest in. And I actually find it very easy to write portions of a memoir when I'm really excited about.

Does lead me to the question of how joy fits in. Because I know I've heard that. I think you have a sign on your desk or something that bring joy, which generally sounds good to me. I think I like your speed there. But maybe just say more about man. In a world where it sure seems like a lot of people try to keep joy out of the professional equation and make it all about the brass tacks. What's your lane there and what's given you the confidence. The joy is such an important additional component to a successful culture.

I'm so happy you asked because it gets to combine a bunch of stuff that I believe, and also it will tell you a little bit about our place. So, one, I am somebody who gets to contribute to the culture at Sequoia. There was a culture before me. There will be a culture after me. You know what I'm saying? And a lot of what we were trying to do, each of us who were there, is leave it better than you found it. But I don't know how big of a role Joy played at different points in the Sequoia culture in the past, but I hope it plays a bigger role in the future.

Future.

And so, to answer your question, I was reading this article a long time ago about Steve Kerr when he became the coach of the Warriors. And Kerr talked to Pete Carroll, and Pete Carroll, the former Seahawks coach and coach at USC and a bunch of other teams.

He said, let's just keep it at Seahawks. We don't like to talk very much about the Trojans.

Okay, okay. Sorry, sorry, sorry. He said, look, the X's and O's aren't going to matter. It's not going to be what matters. What's going to matter is the culture you bring to the team, the culture you establish for the team. And he's like, it's weird. He's like, you're going to have to help do that while stepping into a culture. And so what Kerr said was he looked at the team, and of course, Steph Curry, even at the time before the championships, was the heart and soul of the team. And Kerr came up with four values. I can remember three of them now. Compassion, mindfulness, and joy were the three things. And I think actually it might have been competitiveness. I'm not sure. But I remember being like, man, how cool is that? Joy is one of the values. And it was because the team had joy because of the way Steph was. That is a big part of who he is. And I was like, huh? I wonder what I would say is, like, something that I care about. For me, it's joy and competitiveness. Those are the two. Joy and competitiveness. I want a culture that is extremely competitive with the outside world, but I also want one that has joy. So, truthfully, Rick, to make it real, it's not easy to enter a new culture and to try and put something that you care about in it. But I was like, look, I haven't been at Sequoia forever and that firm has had tons of success without me and hopefully in the future have tons of success without me. At some point, I want to enjoy myself when I'm at work. I think that's an important part of duration. That's an important part of delivering and just who I am. And so I'm going to try and have that be part of the way we are. And I feel proud. I hope we joke around more than we did my first day, and I hope that is more part of who we are than it was my first day. But I also think that is something that helps on the joy versus relief side that we talked about earlier. And frankly, man, I think about a lot, like how I spend my time. I think about every minute I'm away from my family. What am I doing? Why am I doing it? And I think if it didn't have joy and I didn't bring joy, I'd feel a lot less good about any moment I'm away from. Though.

The context that we place around joy and why it matters so much is really comes to the T because in the end, to be able to perpetuate anything, people have to be loving it and they have to be feeling like they're not coming to an office and getting emptied and going home empty. They need to feel like they're coming home at the end of the day more full than when they showed up. It's very hard to do, but I think it's extremely powerful. So many of these, I think these great cultures, whether it's in sports, and I'll have to tune in to all the good stuff you guys have coming down the pipeline with glue guys. But these truly great teams, they seem to be. The programs seem to have these incredible sort of alchemies behind their culture. These things that we've touched on at a bit, just talking about supportive and demanding. Wait a second, aren't those the opposite things that people feel like should not go together, but somehow when you combine them, it leads to this multiplicative effect. And so I think that when we look at the sort of inherent latency that's in something like inequality, like joy, it's good for everybody. It's generally, I think, a signal of other good things. People are not joyful when they're losing. And yet it can also be something where. Where like you touched on earlier. I mean, investing is one of those professions where you're going to lose a lot in the Micro things are not going to always go your way. You need something to fall back on. You need something else other than just, well, you better do better next time. You need to know that you're loved. You need to know that you're supported and ultimately brings it to this sort of higher purpose. And again, these firms that can demonstrate through multiple generations that it is really more. Yes, of course there's people in. You cannot talk about Sequoia without talking about a long list of extraordinary individuals. But it just seems critical to the story is that somehow those individuals write themselves out of the script.

I could not agree with you more. And then they also, the thing they do, which is really great, when I started, when Jim Goetz sits with you and it's sort of like, look, all you got to do is leave it better than you found it. That's very intimidating. You found it pretty good. And when Ruloff says that and you see people that are working like they are 20, 25, even more than that years in, I think that it's actually quite valuable to tell someone, leave it better than you found it, because that's what each of them did. And that sets a standard. But it also makes sure that, look, you have to be real. I don't deserve any credit for the history Sequoia had before I got here. Zero. This firm was amazing before I got here. And there's humility in that. And then you don't want to be the generation that screws it up. But I think making sure you're not the generation screws it up. You got to make sure you're on offense rather than protecting. And I think Doug was always really good about reminding us that there's no protecting. When you're in the prevent defense, you lose, you got to go play offense.

I know you're a huge fan of Clay Christensen, which is awesome and crazy because we are, too. Reading how will you measure your life has been part of our final exam for our Notre Dame students for many years. And so as we close, how do you think about answering the question right now, now for yourself, how do you want your life to be measured in the fullness of time?

I actually feel confident that my answer will not change on this one. And I could be wrong, but it's been the same now ever since I read the book, which is what do my close friends and family say about me? That's how I'll measure it. And that's a small group. But what do those people say with particular incredible focus on closer? They are the more important, what they say is what will the kids say about their dad? What will my wife say about her husband? What will my parents say about their child? What will my brother say about his brother? And then my friends. Same thing. Friends are the family you earn. What will the closest people say? Bob Myers has this great quote of the people that know you the best should love you the most. That to me is how to measure it. And that is the way I'll measure it. That's the way I want to spend time. And of all the things it's probably the thing I have the most confidence in is my by definition, there is not going to change.

We do not know you the best, but we're huge fans of the life you're crafting, of the work that you're doing, the manner in which you're sharing with others, and super excited about this next phase with Glue. Guys, I know you all have a ton of really fun stuff ahead, but that Coach K episode, whenever it happens, is going to be just epic. Just keep shining bright and keep being you and thanks for your friendship and keep being filled with joy and compounding to new heights.

Thank you guys. It means a lot to me that you had me.

It's a pleasure and Go Blue Devils. Go Duke.

Did not see that coming. That's it for now and we'll see you next time.