Invest Like the Best with Patrick O'Shaughnessy
00:51:18 · Michael Moritz
[00:51:18] S2: 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 of what it took to build two things, one of which 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, all the partners killed each other and they all split up and it all became ugly. And then also the byproduct of it being what it took to have an enduring standalone company that a firm like Sequoia could invest in. And I didn't wanna do that through a Silicon Valley lens. And there are enough books about Silicon Valley. So I was casting around for the company or for an 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. It was this manager who took them over, I think in 1986 and retired in 2013. Wendy took them over when they're in bad shape, and then established a record over multiple seasons, twenty six seasons of astonishing success that'll be almost impossible for anybody to duplicate. We had a PR guy who worked, or communications guy who worked for Sequoia, and I'd shown him at that point when I finished the book, and I showed him a draft of the book, and he said, Well, I can't tell because I ghosted the book, ghost wrote the book. And this fella sent to me, I can't tell what's you and what's Sir Alex, I said precisely.
00:53:02 · Patrick O'Shaughnessy, Michael Moritz
[00:53:02] S0: Do you believe in the great man theory of history? I'm asking this question because I'm very interested by 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 partnered to in x.com, how they shape history. And 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? [00:53:37] S2: The short answer to the question is I'm a great believer in the great person theory. All these people that we've talked about, well, you just referred to Elon or we were talking about Li Iacocca or Steve Jobs, or you go into the political realm or the field of battle, it is about great leaders. Great leaders. And 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 capable of, on the good side of it, not the dark side of it, persuading others to achieve what's perceived as impossible. I'm a huge acolyte of that theory. [00:54:34] S0: Do you think Elon is the great exemplar of that today? [00:54:37] S2: Yes. He may well be the greatest industrialist in the history of America. [00:54:44] S0: What would you say about him?
00:54:44 · Patrick O'Shaughnessy, Michael Moritz
[00:54:44] S0: What would you say about him? [00:54:45] S2: I don't know that I have anything to add other than it's impossible for me to understand how one individual has been able to achieve. And 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.
00:55:18 · Patrick O'Shaughnessy
[00:55:18] S0: Your finance team isn't losing money on big mistakes, It's leaking through a thousand tiny decisions nobody's watching. Ramp puts guardrails on spending before it happens. Real time limits, automatic rules, zero firefighting. Try it at ramp.com/invest. As your business grows, Vanta scales with you, automating compliance and giving you a single source of truth for security and risk. Learn more at vanta.com/invest. Bridgeline offers one unified platform that automates away the complexity across portfolio accounting, reconciliation, reporting, trading, compliance, and more, all at scale. Schedule a demo at ridgeline.ai. Every investment firm is unique, and generic AI chatbots don't understand your process. Rogo is built by finance professionals. It's connected to your data, learns your process, and quickly produces client ready outputs. Check them out at rogo.com/invest. The best AI and software companies from OpenAI to Cursor to Perplexity use WorkOS to become enterprise ready overnight, overnight, not in months. Visit workos.com to skip the unglamorous infrastructure work and focus on your product. 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, expand out of monomania, because all these tools give them so much leverage. You Do think that this is like a true tear in history that we now have intelligence?
00:56:50 · Michael Moritz, Patrick O'Shaughnessy
[00:56:50] S2: I don't know. If you go to China, you will find the founders of companies, or if you go to, I think probably South Korea, which I know far less about, you will find that the creators of one company have really imperial ambitions. And the creator of a company is along the way, or they take their one company and convert it into, look at Xiaomi, the manufacturers, these cars today that exceed the quality and 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 selection of power in the tools that are at their fingertips, or at the fingertips of the people who work for them, they're gonna be able to do a lot more in the future than somebody might have been able to do in the past. [00:57:46] S0: What is your model of this technology? Like as an observer of it, and I'm sure interested observer, how do you tell your family about it and what it will mean? [00:57:54] S2: Well, we don't talk about it. Well, not very much. [00:57:56] S0: It's kinda nice. [00:57:57] S2: People will always ask me, but I'm not a technologist. I'm not an AI sousse. [00:58:02] S0: But you were so good at seeing what was going to play out. Like if I think about so many of your investments, the thing seemed small, but it was then something that became like infrastructure that the, Instacart or something that the world was built on.
00:58:02 · Patrick O'Shaughnessy, Michael Moritz
[00:58:02] S0: But you were so good at seeing what was going to play out. Like if I think about so many of your investments, the thing seemed small, but it was then something that became like infrastructure that the, Instacart or something that the world was built on. [00:58:16] S2: Yeah, you're being too generous. I had very little sense that a company could grow at the rate that some of these artificial intelligence companies have grown at today. I mean, it's beyond comprehension. I remember many years ago, this was at the dawn of the internet or probably after the dawn of the internet. And Tom Siebel, who started a well known entrepreneur and had been seen as a very successful entrepreneur, I remember him wistfully saying one day, his company is sold for whatever it was, 10,000,000,000. And he said very wistfully, that was back when $10,000,000,000 was worth a lot of money. Today you look back and you say, whether it was Facebook's IPO or Google, was back when $100,000,000,000 was worth a lot of money. I think the idea that you can have a six year old company with trillions of dollars, nobody would have imagined that. [00:59:10] S0: Are you mostly excited about this technology