David Rosenthal: belief

Transcript context

…It is the beauty of proliferation and then consolidation. Buffett has, I think it's in a 2000 Fortune article that he wrote—it's weird that I know that, but I think that's right—in an op-ed about how there were, whatever it was, 70 car companies before we narrowed it all the way down to Ford, GM, and Chrysler. The airlines were sort of the same way. There's this proliferation, there's no one who can really differentiate, no one can build any power, and so you only have a few survivors left. In general, they compete on pretty low margins when there are only a few left. Their defensibility comes from their scale. I think, open question, if that's sort of how the graphics market necessarily matured. But you're absolutely right to self-reflect on the time when Sequoia and Sutter Hill invested to say, would you make that type of bet again? You backed one of the two winning horses out of 90. Should you do that and just say, we're betting on amazing founders? This is the nuance. I think what is so cool and part of the fun of the art and the science of what we do, the company they backed was wrong. I think a lot of the GPs at Sequoia and certainly Mark Stevens, who was one of my professors at GSB, who was on the board for Sequoia and still on the board, have held their shares personally to this day. That's one of the best venture investment returns of all time, full stop period. Anything going from a $6 million valuation to the eighth largest company in the world, definitionally, has to be one of the best of all time.…

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