Michael Moritz——40年投资与写作心得——[Invest Like the Best，第491期]

When I was reading your book, one of the lines or ideas that has really stuck with me ever since is, “Where does one person end and the next person begin?” This deep dive that you took into the impact of one’s history, family history, and heritage on who a person is interests me from so many angles—as a parent, as a person interested in history, and as a person interested in genetics and nature versus nurture. If I were to sum up the book in that question, what is your answer to that? What did you come away thinking after this deep study of your own family’s history?

One of the things that came out of the book, which I didn’t really expect, was discovering who I am and why I became whatever it is that I’ve become. That was an unexpected gift of the writing, and it came from this exploration of my family’s past, in particular my parents. Going back and excavating the deep memories of childhood—the sort of atmosphere in our home and in the general milieu in which I grew up—helped me understand a lot about why I am who I am and react to certain things in the fashion that I do.

Unwittingly, obviously, every parent leaves an imprint on a child. That’s especially true during the formative years. Whatever the formative years are—I’m no child specialist or scientist—but before you turn 12, 13, or 14 years old, those imprints that you’ve absorbed in some manner, consciously or unconsciously, remain with you. They are both the angels and demons, I think, that you deal with for the rest of your life.

What were yours? I’m so curious that you’re performing on yourself the exercise that you’re famous for doing with others whom you invested in or hired, focusing on those first 14 years. What new understanding of yourself came out of this exercise?

1. The Refugee Imprint

I grew up in this family of refugees from Nazi Germany in Wales. Refugees, by definition, are a minority. Jewish refugees in Wales during the 1960s and 1970s were a further minority. People look at me today and think, “Oh, here’s this old white man. He’s not a minority.” I can understand that, but it’s how an individual feels rather than how other people might look at you.

It touched me in a variety of ways. My parents were never in the camps. They got out of Germany in the 1930s, and they were loath to use the word “survivor” because they always felt the word survivor denoted somebody who had actually survived the camps. But they were refugees and, in their own way, had survived.

That motive to survive no matter what the odds were—even though the odds that I faced growing up weren’t like those my parents faced—I think the need to survive makes you think about, to some extent, living by your wits, being very suspicious of the motives of others, wondering where and how bad things will occur and happen, and guarding against them. I think it gave me, in retrospect—I didn’t understand it at the time—a sort of drive and grit that I wouldn’t have had without that particular atmospheric backdrop.

When you study it and think about your own childhood, how did that transfer from your parents to you? Was it the stories they told?

It was definitely not the stories they told, because they didn’t tell the stories. I didn’t really get to know the stories until I sat down and began work on this book. What I did know was the general arc of history—obviously, this miserable, ferocious, catastrophic whirlwind in which they and millions of others were caught up.

They didn’t talk about the past in the real detail that I much later, when I was thinking about the book, became interested in. It was just broad sweeps. I think it was much more the daily behavior, the reaction to events, the reaction to things, and the sense that doom was not very far away.

The fact that horrors had occurred in the past meant there was a real need to be vigilant and wary about navigating daily life.

There were a couple of stories in the book, one in particular, where you talk about 2 separate people: one who decided to stay in Germany and one who decided to leave. It’s quite poignant and interesting on this topic of survival, being an outsider, and having an early instinct, when things are changing, to take notice and not double down and stick around. Maybe tell that story and explain what you learned.

The 2 individuals you refer to, Patrick, were my grandfathers—my maternal grandfather and my paternal grandfather.

I’ll start with my paternal grandfather, who was a civil servant. He was a sort of lower-level judge in the judiciary in Bavaria in southern Germany. He had fought in World War I. He had somehow or other survived the horror of Verdun. He had been given his Iron Cross, and he was, I think, a great believer in the German state and in the security that the state offered.

Then, much later, in 1933, he lost his job. This is my assessment of the situation, because he was a civil servant. He was by nature conservative and somewhat cautious, but he also had this great belief in the state, the endurance of the state, and the durability of the state, and that eventually the storm would blow over.

He also had a pension, and the pension was very important to him as a means for survival. It was a combination of all of those things. He wasn’t oblivious, obviously, to what was happening around him, but it did make him more reluctant to leave Germany, I think, until it was too late.

People forget that even if somebody had decided to leave Germany, there were all sorts of obstacles in the way. You had to find a place elsewhere that would accept you. You had to pay big taxes to the Nazi government in order to be able to secure your exit visa. There were all these sorts of obstacles.

That was my paternal grandfather. He and his wife eventually were shipped off east and disappeared from history.

My maternal grandfather was cut from a different cloth. I was too callow as a youth to really understand this, but he died when I was about 16. He had been a cattle trader, which was one of the occupations that Jews were really permitted to do in Germany.

He was almost blind as a young man and completely blind by the time I met him, but somehow or other had been able to carve out a comfortable living for himself and his family by trading cattle in a rural village in northwestern Germany. My assessment of him, in retrospect, was that he was more streetwise and more entrepreneurial. He wasn’t burdened by the need to remain and collect a state pension, because he had always been able to sustain himself and look out for his future.

He got out with his wife, my grandmother. But they got out by the skin of their teeth. They got out 72 hours before war broke out. Seventy-two hours later, they, too, would have perished.

What do you take from that? What is the big lesson from that instinct? How has that instinct been imprinted on you and on the people you back, the people you’ve written about throughout your life and career?

I’m not sure that it’s all that relevant to the people I’ve encountered in this journey through life, but it certainly has had consequences for me, particularly in times like the ones we’re living through at the moment and the atmosphere that is prevalent, to some extent, in the US and also in Western Europe.

I think the necessity of always feeling that you have a bolt-hole, that you have some place to go if the fire gets too hot. That’s the lesson that I took away from my family history—glibly saying that you can never have enough passports.

Do you feel that especially true now? Say a bit about the state of the world, how you perceive the state of the world.

The United States and Western Europe writ large are uncomfortable places for minorities. It doesn't matter whether you're Asian, Muslim, Black, or Jewish. I understand the reasons, and I want to be careful as well. I am not whining about antisemitism. I'm not complaining about it. I long ago came to terms with the fact that it's just a fact of life. It's been around for 2,500 years. It's not going to disappear in 2026 or 2030. It's always going to be with us.

In fact, as we were talking about a few minutes ago, I think the fact that antisemitism was around and has been around, and has been something I've been conscious of all my life—my sentient life—has made me stronger. But I think it's disquieting if you're living in a society where, in America, my simplistic way of thinking about who feels safe is that the contingent of Americans who feel safe are white Christians who own guns.

Everybody else feels a degree of insecurity, whether you're pursued by ICE or you go to a house of prayer that has to be guarded by police to ensure that it's safe. That exists in America. It exists in the United Kingdom, in France, and in other countries around Europe where far-right governments have come to the fore. Obviously, everybody has read about the recent elections in Germany and the far-right party in Saxony province.

I think in times of economic distress, where you have millions of people—tens of millions of people—who feel they've been left behind, that feeling of despair can easily be whipped up into a horrendous stew by leaders with authoritarian impulses.

If I force you to put on your optimistic or hopeful hat and think about the future as it relates to this problem—

Well, Viktor Orbán was booted from office. He was riding high a couple of years ago. In some places, there clearly are pushes to the center, which would be, I think, very consoling for people, and a return to some modicum of civility in the various societies in which people like us travel.

Here in America, clearly the midterms in the next 18 months are really going to shape how we're going to live in the next decade, because there's been the imprint of one person on the last decade in America. I think in Britain, the person who's identified with the far right, Nigel Farage, may well have had his best day, and his best day may well be behind him. I think it's different in France with Marine Le Pen and the elections next year. It's different in Spain, and it's potentially different in Germany.

Do you think that the internet fundamentally changes the potential for civility and political moderation because it so rewards extremes and attention?

I think the three-letter answer is yes. I think it's been true of every form of new media from the beginning of the printing press. But obviously, the internet and mobile telephony have made it far easier to spread false memes and innuendo. It's a much larger, more amplified version of what occurred in Germany when radio took off during the 1930s, when the radio waves were dominated by extreme propaganda, racist views, and loud lies told frequently.

Going back to your family's history, one of my favorite topics is this idea that you can learn so much about a person from what happens in their first 12, 13, or 14 years, as you said. Carl Jung had this great idea of studying the unlived life of the parent. Another way of framing it would be—and this is a little trite—you should be who your father was supposed to be. You should live the life that he was unable to, or didn't quite, and part of that imprinting is children observing their parents: what they're not going after, the risks they're not taking. Maybe running in that direction is a great way to explore.

Back to the point about where one person ends and the next begins, the break from the parents is really important. I'm curious how you arrived at this method of yours, this first-14-year interrogation method: when you first did it, how you do it, what the method is, and why you find it so impactful in understanding a new person.

2. The First Fourteen Years

I suppose I first came across it, oddly, in Detroit, when I was a correspondent for Time magazine. With a colleague, I wrote a book about the Chrysler Corporation, but more importantly, about the person who turned around Chrysler at the end of the 1970s and the beginning of the 1980s—a man who was, for a time, the best-known business figure in America, even though today most people struggle to pronounce his last name. He was a gentleman called Lee Iacocca.

He was the son of Italian immigrants. In writing this book, we spent a fair amount of time interviewing Iacocca, and what came through loud and clear was how much, as the son of Italian immigrants who'd grown up in Pennsylvania, Lee felt like an outsider. He worked in the automobile industry, obviously in the upper echelons of the automobile industry, where I think he was always viewed with suspicion—most notably when he worked at the Ford Motor Company, by Henry Ford II and the other people who, although everybody had immigrated, were much more members of the establishment.

Iacocca never felt like a member of the establishment, and it became very clear that all of that stemmed from his childhood. As the years went by, he began to interpret many of the slights that then fell upon him—including not getting the top job at Ford—as stemming from the fact that he was seen as an Italian immigrant.

If you think about the people who have harnessed that outsider energy, a lot of whom you've backed with great success, have you seen people graduate out of it? And when they do, does their drive and motivation go away or suffer?

I want to answer the previous question a little bit as well. You asked why, when I've met various people and various founders over the years, I've spent so much time on their backgrounds. Many of these people are only 20 or 21 years old.

So you're covering a big percentage, yeah.

You're not exactly going to be able to ask them about their life in their fifties. So it's just natural to try to understand that. I don't think people grow out of it. I think what happens is that people work with a certain intensity in their late teens and their twenties and maybe their early thirties, and that intensity, for a whole variety of reasons, diminishes over time. I think that's what changes. The inner being doesn't change; the outward intensity changes.

When you were asking these questions, was there any one thing or set of things that you tended to be looking for? Was it you coming away feeling as though someone had extreme drive?

I try to paint when I have some time. I'm not a good painter, but I really enjoy it. At least the way that I paint, you make marks in different parts of the canvas, and the marks seem unrelated. Maybe it's a color blue here and a color brown there. You're putting these marks and dots on the canvas. There doesn't seem to be any composition there whatsoever.

Then eventually, in my case, the picture comes out, and it's bad, but there's a picture at the end of it. It's the accumulation of all these different marks. I think that's what happens when you're talking to people about their backgrounds. You're looking for these little dots here, and then eventually you put together this portrait for yourself of the individual.

In searching for those dots, did you come to favorite questions that you always found yourself asking?

There's one that comes to mind, which I've always found quite revealing: to ask somebody if they think back and had a chance to do one thing differently, one action differently, what is it that they would do. I remember one person we interviewed for Sequoia who burst into tears when I asked that question.

It turned out that he'd grown up as the son of an immigrant here in America. He was Hispanic. His father was very proud to have made it here and that his child was bright, his son was bright, and he was getting good marks at school. This fellow, probably when he was 12 or so, had gone down to a corner grocery store with a pal of his and stolen some candy.

The shopkeeper, who knew his father, complained to his father. His father took him by the ear, took him back down to the candy store, made him apologize, and made him empty his pockets. The man I interviewed was so chastened, so embarrassed by bringing shame upon his family and his father, that he just burst into tears.

What's your answer to the question? What would you have done differently?

You're a good interviewer. People don't listen to answers very often when they interview people. I think every child with parents feels this in one way or another. I felt it as I was writing the book. If I could erase one thing, it would be some of my interactions and dealings with my parents, which I feel ashamed about today.

But there's no going back. I spent the first 16 or 17 years of my life with them, but there were many things that I wish had gone differently. Also, when I was a younger man, there were encounters with them that I wish had gone differently because I didn't really understand who they were. So be it.

Do you think that was mostly a natural drive to create your own independence, like every child goes through with their parents?

Yeah, I'm sure that was some of it. Arrogance was probably another part, and a failure of comprehension of what they themselves had experienced, what had made them who they were, which I didn't understand.

There's this notion of very small deeds in the book. I think the character's name was Anna.

Yes.

Can you talk about what you learned about the impact of small deeds?

It was more than small deeds. This lady that you refer to, whom I knew as a child, her first name was Anna. When my father and uncle were growing up in Munich in the 1920s and the early 1930s, every sort of middle-class, lower-middle-class household had a family servant. These were the days before washing machines and vacuum cleaners and all the rest of it. Those individuals in these households, when children were born, invariably became nannies as well.

For my father and my uncle, this lady, Anna, who was that person in my grandfather's house, became a surrogate. She was a nanny. She was Roman Catholic. She eventually left the employment of my grandparents and married a railway worker in Bavaria who was also a Roman Catholic. They built their own house with their own hands.

She and her husband never forgot the Moritz family. In the 1930s, they opened their house to my grandparents, my uncle, and my father at a time when it became very unpopular to have Jews come stay in rural Bavaria for their holidays. But they did it for as long as possible. They didn't have children, and they were horrified by the Nazis. They did everything possible to help my grandparents, my father, and my uncle.

After the war, because the feelings were so intense between my father and my uncle and this lady, Anna, they went back to Bavaria very soon after the end of the war and developed this very strong connection with her until she eventually died. I remember going and staying in her house, and the story of this house features in the book as well. As a young boy, I was surrounded by the specters of the Nazi past.

But this lady was, I think, what they say at Yad Vashem when they bestow acknowledgments on all the people who helped Jews and others during World War II: She was one of the Righteous Among the Nations and had this ethical compass that she wouldn't allow anyone else to alter.

What did you learn from these categories of people? I think you called them the resisters, the silent, and the collabos.

This is a spectacular series that came out maybe 12 years ago, shot in France. Maybe it's a six-part series about life in a French village during World War II and how some people resisted the occupation for as long as possible. Most people remained silent, and some became active collaborators with the Nazis.

During COVID, when we were all on these long Zoom calls with lots of little pictures of 10 other participants in the Zoom room, I always used to look at each individual whom I knew on the whole, and I kept asking myself, "Well, if these people had been living in the French village in the 1940s, who would have stayed silent? Who would have resisted? And who would have been collabos?"

So I was judging people whom I knew and whom I worked with, and it was an interesting exercise. I didn't tell anybody else about it at the time, obviously, but I knew everybody on these calls well enough to know who had the sort of backbone that this lady we were just talking about had. They were always in the minority.

How rare is it? Is it 1% resisters out of 100 people? How rare do you think that expression is?

I think it's very rare because bad things happen in countries when most people stay silent. Very few actively resist.

Do you think that most of the people that you've backed in your career would be resistors?

I'd have to think about that. I'd like to think so, but I'm not sure.

Can you talk about the role that Bill Deedes played in your life? I'm always interested in these early moments of activation, and I'm curious when you first felt in life, whether it was with him or at some other time, when you first felt you were really good at something.

I've never felt I'm really good at something. That's not false modesty on my part, to this day.

How can that be in the face of the evidence?

Well, I think everybody is plagued by doubts, maybe competitiveness. It's a failing on my part. I have a very difficult time celebrating good things and celebrating success.

Given that you're self-aware about it, have you ever tried to reverse that?

I think it's hereditary. I think it's the fact that my mother always felt that disaster was around the corner. Doom was always around the corner. She died a few weeks before COVID.

My mother was the predictor of doom. I remember, as a kid growing up, she would listen to the radio, and inevitably the talk when we were having breakfast would be about some natural disaster that had occurred, a plane crash, or something dreadful around the world.

She died a few weeks before COVID. I felt sorry for her in a way that she missed COVID because this was the disaster that she'd been predicting, or one of the natural disasters that she'd been predicting, all her life. She was cheated out of COVID. But I think it's that sort of sense of being one step away from the precipice.

Have you ever, though, been proud of a piece of work that you've done or created, or felt that pride, like the emotion of it?

I think I've always felt everything is unfinished and could be improved, and none of it's ever been perfect.

So never a satisfied moment.

Sometimes when I paint and compare a painting to what I might have been able to paint 10 or 15 years ago, I see a road to improvement. But then you go to MoMA or the Met—

You're diminished.

And you're reduced to being an insignificant speck.

What about feeling pride for someone else, not so much for yourself? You've backed some of the most extraordinary people in business history, for sure. You've written about some of the most extraordinary leaders, Alex Ferguson and others. Have you felt proud of them?

No, not necessarily. The relationship is different. Those have been voyages of curiosity. They're the people who should feel proud of their accomplishments, not me as a bystander.

I'm so curious, for someone who's been involved in so many fascinating, unlikely things, what jumps out as the highest-energy moments? What were the things along the whole journey that gave you the most energy? I know you're a deeply curious person, so maybe it's something there.

I think it's family, children, all the moments associated with Harriet. My wife and I have two sons, and they're now in their 30s, and one of them's got a couple of grandkids. I think it's deeply personal stuff.

Back to Bill Deedes. I lost my train of thought there for a minute. I'm curious about the impact that he had on you, and I'm always interested in the early impact that people have on others.

3. From Journalism To Steve Jobs

I grew up, as you know, in Britain, and when I left college, I really wanted to be a journalist. My goal was to work on one of the big, at that point, what were called the Fleet Street newspapers. This was a long time ago—50 years ago—and everybody read them. There were papers for different sections of the population, and I wanted to work on one of the big, really well-regarded newspapers.

But there were trade union rules because the unions had a big clampdown on the way in which they held the operators of these newspapers in a straitjacket. One of the consequences was that newspaper editors weren't allowed to hire college graduates directly from college because the fear of the unions was that it would impede their ability, interfere with their ability, to hire 16-year-olds straight out of high school.

The result was that if I'd wanted to go and work on The Times, the Financial Times, the Daily Telegraph, or one of those papers, I would have had to spend 2 or 3 years working on a small provincial newspaper. I just didn't really want to do it. I was impatient, ambitious, and all that sort of stuff.

I met this fellow, Bill Deedes, who was the editor of the Daily Telegraph and was a revered figure in British journalism. He had actually, in an earlier life, been the figure on whom Evelyn Waugh had modeled one of the characters in his famous satirical novel called Scoop.

Bill Deedes very kindly responded to a letter that I'd written to him applying for a job at the Daily Telegraph. He gave me half an hour in his office in Fleet Street, and I remember it.

It was in the winter, it was raining, and I asked him for advice. He told me that what he wished he had done as a young man was go to America. He encouraged me to move to America. I think that really helped propel me in this direction.

So when you arrived here, what was the first big break or big move that you made that kicked off this career?

Well, I got very lucky. I got hired by Time straight out of school without any work experience. They were very willing to take a risk on a 22- or 23-year-old without any real prior experience. That was my first big break.

The episode with Jobs and Time was so fascinating in your history, and I'm sure frustrating for you. What happened, and what did you learn through that episode?

It's a painful part of the past. This was 3 years after I joined Time. I'd taken a leave of absence. By then, I was working in San Francisco in the bureau there, and I'd taken that leave to write a book about Apple for a variety of reasons, because the magazine didn't have room enough to tell the tale of the private days of Apple, which is what I was really interested in doing.

I was on this leave when I got a call from Time asking me to contribute to a profile of Steve that they wanted to run in what became a very famous edition of Time, which was the Computer of the Year. I think it was the only time in Time's history when they'd picked an inanimate object to celebrate for their big annual issue.

I worked on this profile of Steve. Steve was convinced that he was going to be named Man of the Year, even though nobody had told him that or confirmed it, yes or no. But worst of all, the profile—which he hated, for very good reason, I might say in his defense, and which appalled me for different reasons—severed my relationship with Steve.

Back then at Time, these things went through an editorial combine harvester. So what came out in the bale at the end probably didn't resemble very much the straw that got fed in. The whole tone of the piece was malicious, nasty, and underhanded.

As I said, Steve disliked it, and it was one of the reasons I left Time. I felt very, very disenchanted by the treatment of it all. Sadly, as a result of that, I really never repaired the relationship with Steve.

Were you in awe of him?

No.

Have you ever been in awe of anyone?

That's a difficult question. The people that I've known who have done incredible, remarkable things are also flawed individuals. If you get to know them well, you also see that aspect of it. Seeing that up close makes it difficult to hold anybody in awe because you see the flaws as well as all of their accomplishments and virtues.

Why were you not in awe of Steve? It seems like he's the person that the most people in our world were in awe of in living memory.

I want to be careful here because I respected him. I admired him tremendously. I was well aware of the fact that he had achieved things later, obviously, as well, that I couldn't ever possibly have accomplished. But I think I knew some of his darker shades, which made it difficult to hold him up as an object of unalloyed admiration. But he's a heroic figure, obviously.

What's the role of monomania in all of these character studies? And I'm curious to tie it back to this idea of the outsider, the survivor.

4. The Cost of Monomania

You see it now. This goes in generations. When it comes to creating anything of value—it could be a piece of music, a book, a painting, or a company—monomania is a complete obsession with the topic at hand and locking out the rest of the world, eliminating every unnecessary distraction.

There are downsides to this. People get hurt along the way. There isn't enough time for families or others or friends because of the monomania that you refer to. But then great things sometimes come out of it.

Is the primary cost of monomania typically relationships?

I suspect the answer is yes, or maybe some of these people feel that they may have lived life differently if they had to live it over again because there were consequences to this monomania. But yes, clearly, relationships.

People don't really know him today, but he was a very famous British author who was capable of writing 10,000 words a week with ease—10,000 good words, not rubbish. He said, “The greatest enemy to good art is the sight of the pram”—the stroller, in today's parlance, in the hallway.

What about Frank Auerbach, the painter? Was he monomaniacal?

Frank Auerbach has never gotten the recognition in this country that he deserves, although there's a retrospective of him coming here in the next 2 years at very significant museums around the country. He was a refugee from Nazi Germany. He died maybe 5 years or so ago. I didn't know him well, but I got to know him a little bit, and he was a complete obsessive, completely obsessed with his art.

He painted every day, except he treated himself to 1 holiday. For many, many years, he treated himself to 1 day off a year, and every year he'd go to Brighton, where there's a famous pier on the south coast of England, and take the day off on Christmas Day. Every other day of the year, he worked.

I remember once talking to him. His wife had a house out on the English coast, and I asked him once at a dinner, “So, do you ever go out and visit Julia, your wife?” He said, “I've never been to the house.”

This was probably 10 years ago. We were chatting, and New York came up, and he said, “I love New York City. I just love it. It's so bustling with energy, going to Times Square and all the rest of it.” This conversation was maybe in 2012 or 2013. I said, “Frank, were you just in New York?” He suddenly said, “Oh, yeah, I went there in 1967.”

I knew some of these people who posed for him. All his subjects are still alive. They posed for him once a week. He had this regular coterie of sitters, and he painted these same individuals for his figurative work over the course of 30 or 40 years.

There was 1 of the subjects who lived in Venice, of all places, and flew to London once a week for his session with Frank, because I think the sitters found it like therapy to sit for Frank. But he'd go into an utter meltdown if the sitter was late.

Similarly, with his landscape paintings, he painted the same landscape over and over and over again, interpreting it. But he lived for art. He had a son, Jake, but there was no time for anything else.

Do you get more energy from monomaniacs? You spend a lot of time around them. Do you prefer being with them over dilettantes like yourself?

It's nice to have a mixture of friends and acquaintances, some of whom have tied themselves to a particular mast and others who are prepared to wander around and live life more casually. But I've always found it more difficult to be around people who—I mean, I like them and enjoy being with them—but who appear to be doing nothing.

What did Don Valentine see in you, and what did you see in him?

Don was the founder of Sequoia. He took a risk on me around 1985 and hired me to join Sequoia when Sequoia was a very small firm. We're sitting around this table here in your studio. It's probably large enough to accommodate all of the people who worked for Sequoia at that point.

I was a journalist, had been a journalist, but wanted to get into the venture business because I'd become interested in it and had met some of the people who were running these firms, all of which were very small at the time. I'd written to 5 of them. This was in the days when you didn't send emails; you actually wrote letters. I'd gone to see each of them, and they were kind enough to give me some time.

All except Don said, “We don't really know what to do with you because you don't have a technical background. You don't have an engineering degree of any sort. You don't really have any technical knowledge. You don't have any work experience in a Silicon Valley kind of company. You've been a journalist, so maybe you should go and find a role in public relations or marketing or something like that,” which was not exactly what I wanted to do.

Don was more willing to take a risk, and the reason was fairly straightforward: He had seen a few people whom he expected to succeed because they had big operating backgrounds in technology companies come into the venture business and not be very successful. And then he was aware of some who had carved out very successful lives as investors.

There was a fellow called Tommy Davis, I think, who started the Mayfield Fund. There was another guy who'd been an insurance actuary. But the one that Don pointed to more than anybody else was a gentleman called Arthur Rock, who just celebrated his 100th birthday.

He was an investment banker at a small boutique here in New York called Hayden, Stone & Co. This was back in the 1950s. He'd had the moxie to organize the original breakout and financing of Fairchild Semiconductor.

And then in the 1960s—people won't know the names anymore—he had helped finance Teledyne and Scientific Data Systems, and then became the chairman and original investor in Intel on day 1. And then, a few years later, backed Apple.

Refer to Henry Singleton, right?

Henry Singleton. Henry Singleton, who later became one of the early board members, our first board members at Apple. Don said, “Look, there's nothing in his background that would've suggested he'd be successful.” That was the main reason.

And what did you see in him in the early days?

A job.

What did he teach you?

Don didn't believe in teaching. He had a survivalist instinct, so he believed in tossing people into the deep end to see if they drowned. But I learned a lot by observation and listening—good things and bad things.

There was another gentleman at Sequoia named Pierre Lamond, who played a huge role in the rise of the semiconductor industry, and he, too, was something of an influence. But it was being in the middle of that milieu, watching good things happen and bad things happen, and gradually trying to form my own opinions about things.

What do you think it teaches us about early-stage investing that a journalist with no technical ability and no work experience can be one of the best investors of that type ever?

The venture business that I got into way back when is very different from the venture business today. There aren't many parallels. I don't know that I would flourish in today's venture business. It's different for a whole variety of reasons.

Why not?

I think it's become much more difficult. We had a variety of benefits back in the 1980s and 1990s that began to dissipate maybe 15 or 16 years ago and don't exist today. One of them was imperfect information. In the pre-internet era, unless you were very close to things, you didn't know what was happening. Today, because of the internet and some of the stuff that we were talking about earlier, everybody around the world knows exactly what's happening. Everybody's got access to more or less the same information.

So that's number one. Number two, there are just so many more entities of all stripes: individuals, 2 or 3 people banding together in a small firm, and, at the other end of it, huge mutual funds pouring money into it. The very early-stage private market is very, very different.

Forty years ago, 30 years ago, it was possible, if you were an individual, to form a relationship—a real, close relationship—with the people that you were getting into business with. That doesn't exist today, particularly for a venture firm. There are just too many intermediaries in between.

I'm not sure that the luck that I had back then translates today. I was also catapulted right into the middle of the one place in the world where all of this stuff was happening, so that's a huge competitive advantage, too. I'm not sure that any of that translates today. I think a moderately intelligent 14- or 16-year-old who had his or her wits about them would have been able to succeed in the venture business in the mid-1980s.

Do you think the ecosystem is healthy today?

I think it is if you're a founder.

Pretty good. I like the quote that you've said often, that your favorite investment was Sequoia. What was going through your head as you took it over?

Not to screw it up.

The Sequoia that was around in 1995 was very different from the one that was around when I stepped down in 2012 or 2013. Number one was not to screw it up. Number two was to ensure that everybody who worked there felt that we were only as good as our next investment and that we couldn't rest on the laurels of the past.

And then number three was to take advantage of the new market opportunities that began to occur, whether it was eventually going overseas as Silicon Valley's share of startup activity, though still obviously the best place to be, became smaller. First of all, we went to Israel, and then we went, most notably, to China. We started another business called Sequoia Heritage, which is a very different business.

I know Kevin well. He's an incredible talent.

Yes, and Keith and our small and mighty, heroic investment team there.

I don't want to sound like Joan of Arc here. I felt that doing right by our investors was really important. Most of our investments and investors were not-for-profits. I think making sure that we performed well for them was important.

I didn't want to be in a business where, if we didn't perform well, we still got paid very handsomely. I think that's part of the problem with a lot of the aspects of financial service providers of all sorts, and it has been for a long time: the firm or provider does well, but their clients may not have done as well as if they had just invested in an index fund.

When I did this with Doug, he told me the story of that one fund that you fought so hard to get back to par over 10 years or something like this.

Right. We could have said to investors, "Well, look, you've had a lot of good times with us, and you've just got to accept the fact that you've got a fund here that isn't going to make any money." I certainly wasn't wired like that. It was a matter of pride.

What did you learn about working with someone like Doug who was so different from you, but you had such a fruitful partnership?

Tolerance.

Say more.

I think you have to adjust. When you're trying to work in a team, you have to try to understand what the other people around you need, what's important to them, and feed that need. With people who are wired, as you said, very, very differently, I think that's the most important thing I've learned about building a team or leading a team.

I think today I'd be much better at it than I was 25 years ago or 30 years ago. I learned a lot of that from the way that I did this book maybe 10 or 11 years ago with a famous soccer manager called Alex Ferguson.

I was just going to ask about Alex, yeah.

I think one of his great skills was the ability to understand what motivated each of his individual players.

How did you see him do that? I know he was famous for preferring players with tough upbringings.

He's got this reputation, which is an unfair reputation, of being very hard and harsh. That was certainly an aspect of the way that he managed. But he was a man who didn't want to be loved. He didn't want to be feared. He wanted to be respected by the individuals who played for him.

So he was there for them, which people don't understand, in their bleak, dark times, when they needed support, when they were feeling lower than a snake's belly. He was there for them. None of that really gets written about.

There was an incident I remember. I forget which year it was, but David Beckham had been playing for England in a World Cup competition where he got sent off, and the British press was merciless about Beckham's perceived stupidity. Alex went to meet him at the airport because he knew he needed an arm around his shoulder.

Those sorts of things—little things that happen out of sight. People aren't aware of them. There are no cameras around.

Do you think you were so interested in him for almost autobiographical reasons?

Oh, no.

That description kind of sounds like you.

He was much more skillful at it than I was. The reason the book came together was this: People, for whatever reason, had been badgering me to write a book about Silicon Valley, and I was always very interested, through the Sequoia lens, in what it took to build 2 things.

One was a business that endured for ourselves—for Sequoia—because there are all these tales of venture firms that had a period in the limelight and then blew up for whatever reason. The founders killed each other, or the partners killed each other, and they all split up, and it all became ugly.

The other was the byproduct of that: what it took to have an enduring standalone company that a firm like Sequoia could invest in. I didn't want to do that through a Silicon Valley lens. There are enough books about Silicon Valley.

So I was casting around for a company or organization that had flourished over the course of multiple decades. I'd been a bit of a fan of Manchester United Football Club since I was a kid. Here was this manager who took them over, I think, in 1986 and retired in 2013. He took them over when they were in bad shape and then established a record over 26 seasons of astonishing success that will be almost impossible for anybody to duplicate.

We had a communications guy who worked for Sequoia. When I finished the book, I showed him a draft of it. Because I ghostwrote the book, this fellow said to me, "I can't tell what's you and what's Sir Alex." I said, "Precisely."

Do you believe in the great-man theory of history? I'm asking this question because I'm very interested in institutions that endure and what you've learned about how the ones that have endured have pulled that off, like Sequoia. And I'm also pulled to people, of course, like Elon, who you were an early backer and partner to in X.com, how they shape history. It seems like we might have a few world-historic figures alive and operating today.

What do you think is the balance of shaping history between these world-historic people—great men and women—and enduring institutions?

5. Great People Shape History

The short answer to the question is that I'm a great believer in the great-person theory. All these people that we've talked about, whether you just referred to Elon, or we were talking about Lee Iacocca or Steve Jobs, or you go into the political realm or the field of battle, it is about great leaders. Great leaders.

Obviously, there are some terrible authoritarian figures that have cast black shadows over tens of millions of people and over multiple decades in different countries around the world for hundreds of years. And so, for good and bad, I think the individual has an enormous impact on what is around him or her and is capable, on the good side of it—not the dark side of it—of persuading others to achieve what's perceived as impossible.

I'm a huge acolyte of that theory.

Do you think Elon is the great exemplar of that today?

Yes. He may well be the greatest industrialist in the history of America.

What would you say about him?

I don't know that I have anything to add other than this: It's impossible for me to understand how one individual has been able to achieve so much. I know he's a controversial figure, but I'm just looking at him through the lens of history and through an investor's lens. They have this phrase in Britain called “gobsmacked.” I'm completely gobsmacked by the scale of his achievements in a variety of different industries, which is the thing that sets him apart from others.

What do you make of today's prevailing technology environment and how this changes all the things we've talked about? One of the other PayPal founders told me recently that he thinks people like Elon and other great entrepreneurs will probably do more things—more than one company—and expand out of monomania because all these tools give them so much leverage. Do you think that this is like a true tear in history, that we now have intelligence?

6. AI Amplifies Human Voice

I don't know. If you go to China, you will find that the founders of companies—or, I think, probably South Korea, which I know far less about—have really imperial ambitions. Along the way, they take their one company and convert it into something else. Look at Xiaomi, which manufactures cars today that exceed the quality, performance, and other attributes of Porsches, but began in 2010 as a phone maker, as an Android licensee, I think.

Creative people, or these rare, rare people armed with this extraordinary concentration of power in the tools that are at their fingertips—or at the fingertips of the people who work for them—are going to be able to do a lot more in the future than somebody might have been able to do in the past.

What is your model of this technology? As an observer of it, and I'm sure an interested observer, how do you tell your family about it and what it will mean?

Oh, we don't talk about it. Well, not very much.

It's kind of nice.

People will always ask me, but I'm not a technologist. I'm not an AI soothsayer—

But you were so good at seeing what was going to play out. If I think about so many of your investments, the thing seemed small, but it was then something that became infrastructure that the world was built on—Instacart or something.

You're being too generous. I had very little sense that a company could grow at the rate at which some of these artificial intelligence companies have grown today. I mean, it's beyond comprehension.

I remember many years ago, at the dawn of the internet—or probably after the dawn of the internet—Tom Siebel, who started Siebel Systems and had been seen as a very successful entrepreneur, wistfully said one day that his company had sold for whatever it was, $10 billion. He said, “That was back when $10 billion was worth a lot of money.”

Today, you look back and say, whether it was Facebook's IPO or Google, that was back when $100 billion was worth a lot of money. I think the idea that you can have a 6-year-old company worth trillions of dollars—nobody would have imagined that.

Are you mostly excited about this technology, or scared, or both?

I read what everybody else reads and have heard the boogeyman opine, and I think I'm probably a bit more hopeful than others. Again, I'm not an expert. I don't mean to diminish the dark side of what may or may not happen with AI.

I do take some solace in the fact that Armageddon—or a form of Armageddon—was predicted when the first nuclear bomb was exploded, and fortunately, here we are close to a century later, and that hasn't occurred. If you read all the stuff from the mid-1970s about the genetic revolution and how there were going to be scientists creating legions of individuals that they deemed suitable to walk on the face of the Earth, that hasn't occurred either.

Today, even though I'm absolutely certain that there's going to be enormous disruption in particular job sectors caused by AI, I think that it's going to create more jobs than are going to be lost. Everyone can say that this time is different, but there hasn't been a huge improvement in technology in the last two or three centuries that has led to lower employment in the long term. There have been depressions and massive disruptions in sectors, but overall employment has grown. So I'm a little more optimistic. I think there'll be a lot of jobs that get created that we couldn't categorize today.

Because AI produces prodigious amounts of new text and writing so easily, I think the value of extraordinary writing is going up—writing that can cut through the sea of slop. How would you define extraordinary writing, having done quite a bit of it yourself?

Again, you're too flattering and kind about that particular topic. It's hearing the unmistakable voice of the author.

How do you do that as a writer?

It's the same with the journey through life. The toughest thing, I think, for an individual—whether it's guiding them through what they want to do in life or what they want to put on paper—is being in touch enough with your inner feelings and inner voice to allow those to conquer the pressures of the expectations of others.

Joseph Campbell said the privilege of a lifetime is becoming who you are, but also that that's the hardest thing to do.

I wish I'd been clever enough to say that. I completely agree. I think that's the struggle everybody has, and it's also the struggle when you put things down on paper.

Is there a moment in your own life that was the most important in becoming who you were, like the hardest part of doing it? It's so valuable to do and it's so hard to do. It makes me wonder about what the hardest part was for you.

I don't think I've done it.

Why not? What's the barrier that's left between you and who you are?

It's one of my many weaknesses. I've always been more prone to live up to the pressures or expectations from the outside or from others than to let myself run free.

Is it a goal of the remainder of your life to do so?

I'll try.

I'm so struck by how unbelievably self-aware you seem, but then you're giving yourself poor grades that seem objectively wrong. What is that? I'm still struggling to understand.

I don't know. Maybe it's the specter of my mother.

Can you say more about her? We didn't talk too much about her other than her doom prophecies.

I owe her many things. She aroused my interest in art and a variety of things, but she would always find fault, and no matter how good things were or what I had done, she would find fault.

I remember there was some newspaper coverage years ago in Britain when Yahoo became public, and there were some stories about me in the British press. She was convinced I was a crook. She was absolutely convinced that the police should come for me because there was no possible way that I could have participated in anything like this that could possibly be legal.

Did that hurt?

No. By that point, I was more amused by it than anything else.

Early on, did it hurt that nothing you did was satisfactory, or something?

No, because it was just a fact of life.

And yet it seems to have echoed.

Yeah. You never get the boy out of the man.

What is the experience of stepping back from Sequoia because you were sick? What has that taught you?

7. Life After Sequoia

Well, first of all, I don't think leaders should stick around. If they have decided for whatever reason not to lead, they've got to get out of the way. So I went cold turkey, even though I tried to help Sequoia in what ways I could and was involved with a variety of companies. I was an individual contributor, but I was not in a leadership role. I got out of there as quickly as possible because I didn't think it was fair for someone to linger in those sorts of meetings. I'd lived through that myself.

So it's allowed me to do things. When I was running Sequoia, talk about monomania and obsessions—I mean, that was it. It was everything, every single day of the week. So it allowed me to do things. I could write. My wife and I started a foundation about 25 years ago, so we spent more time on that.

In recent years, I spent more time trying to help San Francisco, which is where I've lived pushing 50 years—not quite—to turn around and flourish. Along with a wonderful co-founder, Griffin Daugherty, I started a media business there as well, which is fun and I hope contributes to the life of the city, called The San Francisco Standard.

Then I'm involved with what used to be called Sequoia Heritage in an advisory capacity. So there's plenty of stuff to do, which is fulfilling and unfulfilling at the same time because while there are a whole variety of things, it's not the obsessive, monomaniacal focus on one thing.

Do you miss it?

Yeah, aspects of it. But I know full well that I would not want to return to that way of life.

Is it the flow state of it that you miss, the feeling of total immersion and forgetting yourself?

Maybe. I get that when I'm painting. It's a simpler life. You don't have to make decisions about how you allocate your time because your calendar is commanded by some other force.

The difference between having your calendar dictated by others and being in complete control of your calendar yourself is night and day.

What's your hope for The Standard? What are the principles that guide it?

Griff and I didn't set it up as a not-for-profit. One of the things that we wanted to do was to show that local journalism can be a profitable business, number one. Number two, it's to have a vibrant, interesting, diverting, but reliable source of information for people in San Francisco and the Greater Bay Area who care about that sort of stuff. Number three, I've been very clear from day one that, when it comes to news coverage, there's no proprietorial thumb on the scale. Some of the stories in The Standard have mentioned and referred to me in ways that I wouldn't necessarily write myself. So that's fair game. But in the ideas and opinions area, it's center-right, and that's what this is. That's a much-needed voice in San Francisco.

As I think back to the book and put it down, wondering about what's going to last in me having read this, the thing I keep coming back to—it's obviously selfish and context-dependent—is parenting. I have 2 young kids.

How old are they?

They're 12 and 10. They're approaching the end of that window where you describe them as being imprinted under 5.

You've already done the damage, Patrick. They're impaired for life.

I know.

So I wonder if you turn the whole exercise of exploring your own history and your family's history into how to think about the role of parenting. I'm curious what comes to mind.

I think it's to arm the children with confidence.

Simple as that? By doing what?

I don't know. I have to think hard about the handbook of parenting. But I think it's to instill that feeling of self-confidence and freedom, and to try, as a parent, not to be censorious.

Do you think, also thinking about the book, that an important lesson is that we cannot take positive progress for granted?

History is littered with examples of terrible things that happened over periods of time for millions of people all around the world: Russia, China, Iran, Africa, India. There have been terrible things that have happened over the last 1,000 years. I think there's very little that separates the human from the beast, and remaining human and not becoming the beast is everybody's challenge.

How do you think you were most changed by the exercise of studying your family and writing the book?

Understanding myself a little better.

And in the final analysis, what matters?

I think it's 2 things. I think it's relationships with the people that you care about, knowing that we're all completely insignificant, no matter what the individual has accomplished. Trying to leave things a little better than they were before any of us got engaged with them.

If you had to write a next book, what topic piques your curiosity?

I've been playing around with this idea, which I don't know if I'll ever actually get around to writing, but I've been reading about it a fair amount. I'm very interested, weirdly, in Iran—Persia of the 1940s. The collision of individuals from inside and outside Iran explains so much about the world we live in today.

I think what I've been thinking about is not nonfiction, but a blend of fiction and nonfiction. Now, as I said, I don't know if I'll ever get the narrative and the structure and the composition right, but it's my view of what has happened in Iran. It's this collision of personalities from very different backgrounds and different parts of the world that have failed to understand each other. It's pretty fascinating.

One of the great things about your thinking and writing was how short some of the very famous memos and things were. Your “What Could Go Right?” underwriting for a company like Stripe, where I understand the memo was quite short. I'm curious about that notion of compression and the power of compression. If you were to write something like that about the state of the world and give it to your grandson or something today, you seem so good at identifying the things that matter that will determine where things will go.

Again, you're too kind. For me, part of the training as a journalist, and part of what I learned at college, was being able to distill things to their essence and keep them very short. That has stood me in good stead over the years.

Can that be taught? It seems more valuable than ever, with so much information and bombardment.

I don't know. I think it depends a lot on reading. It's hard when people are fed a diet of a limited vocabulary. I am singling him out, but if you do these studies of the vocabulary of presidents of the United States, Trump's vocabulary is by far the lowest. I think he's got a vocabulary of about 2,400 words. Obama's was maybe 4,500 words in common vocabulary. I think having a huge vocabulary at your fingertips that you can select from allows you to express complicated ideas in a simple manner.

I loved the book. I loved our conversation. I've loved all your writing.

Oh, you're far too kind, flattering, and gracious. The questions have been, as you can tell, thought-provoking and wonderful.

I ask 1 final question every time I interview someone. What is the kindest thing that anyone's ever done for you?

Marrying me.

So beautiful. Simple. What have you learned from your wife?

Tolerance.

Common theme. Mike, thanks so much for your time.

Thank you. Really good.