Sequoia Capital's Doug Leone on Luck & Taking Risks

Stanford Graduate School of Business・2 minutes read

Luck and hustle play significant roles in success, with Sequoia Capital valuing diverse perspectives and decentralized decision-making for innovative investments. The firm focuses on individual growth and turning contributors into team players, emphasizing taking risks and solving personal problems for success in emerging markets.

Insights

  • Sequoia Capital's success is rooted in a culture of hiring unconventional individuals with diverse backgrounds, emphasizing a mix of IQ and EQ to build great companies collaboratively.
  • Luck and hustle are highlighted as critical factors in achieving success, with an emphasis on the importance of turning individual contributors into team players and embracing a sense of paranoia to continuously innovate and prove skeptics wrong.

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Recent questions

  • What are the core values of Sequoia Capital?

    Sequoia values unique backgrounds, IQ, EQ, and teamwork.

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Summary

00:00

"Sequoia Speaker Shares Journey and Insights"

  • The speaker is welcomed to the GSB and is encouraged to be provocative.
  • The conversation covers topics like leadership at Sequoia, the Silicon Valley ecosystem, and the speaker's background as an immigrant.
  • The speaker reflects on formative experiences, including starting at the bottom in a job and facing challenges in high school.
  • The speaker's life is divided into three phases: making it, being the best, and working with younger people.
  • The speaker's journey to Sequoia involved luck, starting in sales, and meeting influential figures like Vinod Costla.
  • The decision to join Sequoia was influenced by luck and a desire to avoid a different path in New York City.
  • Sequoia's success is attributed to Don Valentine's lessons on markets and recruiting unconventional people.
  • The firm values hiring individuals with unique backgrounds and a mix of IQ and EQ.
  • Sequoia's culture focuses on turning individual contributors into a team-oriented spirit to help founders build great companies.
  • The firm remains motivated by a sense of paranoia, a different view on risk, and a continuous drive to prove skeptics wrong.

13:24

Sequoia Capital: Innovating with Risk and Diversity

  • Sequoia Capital constantly changes and innovates, contrary to the belief of not fixing what isn't broken.
  • The company took down all its posters, including those boasting about past successes, to start fresh.
  • They expanded into China and India, decentralizing decision-making to local teams.
  • Sequoia Capital values taking risks as essential for progress and success.
  • When pitching to Sequoia, clear and logical thinking is valued over flashy presentations.
  • Sequoia meetings are punctual and focused, with questions asked to understand the business thoroughly.
  • Entrepreneurs from diverse backgrounds, especially those with unique experiences and risks taken, are preferred.
  • Successful founders often solve problems they personally face, leading to innovative solutions.
  • Sequoia acknowledges the lack of female partners and actively seeks to rectify this diversity gap.
  • The speaker discusses the valuation of companies like WhatsApp and the potential bubble in the private market, cautioning against overvaluation.

26:55

Navigating Financial Challenges in Private Markets

  • Companies in private markets are facing financial challenges, with a forecast of difficulties due to a significant correction.
  • The funding landscape is shifting, with Angels and SIIDE funders gaining power and disintermediating VCs.
  • The cost of starting companies has decreased with the internet and mobile technology, leading to the rise of Angel investing.
  • Party rounds are becoming common, with founders raising large sums before product launch, necessitating careful equity management.
  • Founders are advised to raise minimal funds initially, protecting equity and being generous with early engineers.
  • A+ engineers are crucial for technical products, as they attract top talent, while B engineers can hinder success.
  • Sequoia's success in emerging markets like China, India, and Israel is attributed to decentralized decision-making and trust.
  • Brazil posed challenges due to a lack of computer science engineers, leading to a strategic withdrawal from the market.
  • Sequoia supports women entrepreneurs and acknowledges the value of diverse perspectives in high-performance teams.
  • The speaker attributes part of his success to luck but emphasizes the importance of hustle, curiosity, and exploring unconventional opportunities.

40:37

"Success: Luck, Hustle, Flexibility, Fearlessness, Investments"

  • Luck and hustle play significant roles in success
  • Market predictions are challenging; the best investments often come from unexpected ideas
  • Investments in healthcare companies have increased in the latest fund
  • Flexibility and open-mindedness are crucial in making successful investments
  • Fear of failure and responsibility drive success for some individuals
  • Investing in children and bringing others along in success are key priorities
  • Consistent effort and fearlessness are essential for achieving success
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