Alfred Lin: evaluation

Transcript context

…Yeah. Nobody owns the management company at Sequoia. The GPs manage the management company. We don’t view it as owning it, we view it as we inherited it from the last generation and it’s our job to make sure that we pass it on to the next generation in better hands. All of us come to Sequoia, being able to stand on the shoulder of giants and we want to make sure that this place is better off for the next generation. Just coming off of that is a huge base to be able to build upon. In terms of constant learning, this business, you need three key ingredients. I think I’ve said this before, which is you need high IQ, high EQ, and high hustle. And then you need to apply it appropriately. If you’re just super smart but you can’t influence your founders or have them influence their management team to do the right things, that’s not really going to work. Just because you can identify something wrong with the company, this is a business of influence. You got to influence people that take your money because it’s your money as just as green as everybody else’s. More importantly, after you make the investments, and you become partners with the founders, you have to influence them to do a bunch of things that they may not like. Most founders have strengths, then have weaknesses. They’re really good at certain areas and you have to influence them to round out and build a company not just a product or a feature. This business is high hustle. You hustle every single day going after a theme or a trend. How do I think about that and turn it into understanding the whole landscape of what’s going on and then picking the right founder to partner with, to build a company in that space. Those things require an enormous amount of effort and time. It requires being both a skeptic about what’s going to go wrong and also requires a lot of imagination for what can go right. Back to there’s no secret sauce, if you want to be good at this business, you have to be a constant learning machine. You got to think about every single day what you can improve for the next day. In terms of compounding, that’s probably the most important thing. If you can just improve a little bit every single day, you want to suck lust tomorrow is one way to think about it. This is a humbling business. When I joined, I remember Mike saying a line which was jarring. That this is a humbling business because you can make money even if you got the investment thesis wrong and you can lose money even though you got the investment thesis right. If you don’t get cognitive dissonance hearing that, you have to be both excited by that and also know that you’re not going to get things right every single day. This is what people who are in this business for a long time continue to love. There is an element of meeting founders that even if you don’t agree with them, it’s infectious to hear them speak because they’re painting a future of the world that’s just different. ntinue to love. There is an element of meeting founders that even if you don’t agree with them, it’s infectious to hear them speak because they’re painting a future of the world that’s just different. Then, there is the element of gosh, I got that wrong. Gosh, I got this wrong. Gosh, I made money on this, but I still got most everything wrong. Was I just actually good or was I just lucky? I always tell people if they want to join venture capital, they’re like, I’m going to try to convince you not to join and then after all of the reasons why you shouldn’t join, you still want to join, I’ll tell you more about it. It will take a decade or longer for you to figure out whether you’re good at this business or not. Maybe you’ll find out you’re bad at it because you can’t get in front of interesting opportunities, you don’t dream enough. You can find that out relatively quickly, but you won’t know that you’re good at this for a long time. You’re now in a position where you’re doing a lot of hiring (I assume) at Sequoia in a way that Don famously did in DSPV. From the top lecture, he held up your resume the day you joined Sequoia. When you’re evaluating people to join the firm, what qualities do you look for that give you an inkling that they might be good at this?…

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