View From The Top with Roelof Botha, Managing Partner of Sequoia Capital

Roelof Botha's Journey: From Stanford to Silicon Valley

• Roelof Botha's Silicon Valley story began at Stanford GSB, where he felt intimidated but privileged to be, and it was an amazing experience as an international student (16s).
• Botha's grandfather, P.W. Botha, was a minister in Nelson Mandela's cabinet, and having a famous grandfather meant that people often prejudged him, but it also gave him a sense of what could be achieved on a world stage (1m7s).
• Botha's grandfather had a book called "The Who's Who" in his library, which listed important people in the world, and Botha wondered if he could make his way into that book one day, which partly led him to Stanford (1m43s).
• At Stanford, Botha graduated as a Henry Ford scholar, the number one student in his business school class, driven by his intense curiosity, competitiveness, and the challenge of being an immigrant with a limited visa (2m11s).
• Botha's experience as an immigrant with a 2-year student visa and a 1-year training certificate motivated him to work hard and make the most of the opportunity, which he considered an incredible gift (2m29s).
• Botha did not initially aspire to be the top student but started to perform well and eventually took on the challenge of getting the best grades he could, although he had a bit of a gliding path in the last quarter (2m52s).
• The lessons Botha took from the classroom into his career include the signal value of having a Stanford MBA, the branding, and the network of people he got to know, which he considers invaluable (3m25s).

Lessons from Stanford GSB

• The importance of relationships and learning at the Graduate School of Business (GSB) is highlighted, with the note that while friends come and go, enemies accumulate, and one should delight in the success of others and take pleasure in their achievements (3m53s).
• The third element of the GSB, what you learn, has decreased in relative importance in the minds of students over the years, which is a concern because there is much to learn from the incredible teachers that can help students be effective in their careers (4m12s).
• Examples of practical learning experiences at the GSB include managing in non-market environments and cost accounting, which were applied in real-world situations at PayPal (4m32s).
• The value of learning in the classroom is emphasized, with the note that students should take the time to learn and absorb valuable information, even if they plan to pivot their careers (5m38s).
• A personal anecdote is shared about meeting one's wife, Hen, at the GSB, and how she has been a life partner and thought partner, influencing decisions such as joining PayPal and navigating career choices (5m47s).

Hen's Influence and the Decision to Join PayPal

• Hen's influence is described as helping with the decision to join PayPal, and being a sounding board for ideas and career aspirations (6m0s).
• The story of how the couple met at the GSB is shared, including a humorous anecdote about trying to sit in the back of a human resource management class to look at Hen without appearing distracted (6m47s).
• Roelof Botha was deciding between joining a startup and taking another job offer, but his then-fiancée, Hen, who was also an immigrant and had experience working in startups, encouraged him to take the leap and join the startup, which was PayPal (7m58s).
• When Botha received a job offer from Sequoia, he asked to make a phone call before accepting, and he spoke with Hen, who was a huge influence in his decision-making process (8m42s).
• Having a partner who is technical and has experience working in startups has been incredibly valuable for Botha throughout his career as an investor (8m58s).

The Immigrant Experience and its Impact on Entrepreneurship

• Hen provided valuable insight when Botha was dealing with a company that was experiencing management strife, and her comment that "nobody wants to buy a fixer upper" perfectly summarized the challenge of selling a company with problems (9m30s).
• Botha and Hen met at the GSB, and they have a special relationship as both life partners and thought partners (9m54s).
• Botha and Hen are both immigrants, and they are part of a growing trend of international students at the GSB, with over 40% of the class of 2026 coming from abroad (10m11s).
• When Botha moved to the United States, he faced challenges such as learning to drive on the other side of the road and adjusting to language quirks, such as the difference between the AA (Automobile Association) in South Africa and the AAA (Triple A) in the US (10m31s).
• Immigrants often face challenges and feel the need to prove themselves, but data shows that immigrants are twice as likely to start companies as those born in America, and four times as likely to start companies that go public (11m28s).
• Immigrants have a significant influence on the success of the country, with about 40% of the founders being first-generation immigrants, and they are often motivated to succeed due to the circumstances of their immigration (11m41s).
• The lack of distractions and the realization that not succeeding means returning to their home country can be incredibly motivating for immigrants (12m8s).

Joining PayPal and the Early Years

• After graduating, an offer to join PayPal was received from Elon Musk, another immigrant, but the initial offer was declined due to visa issues (12m18s).
• A classmate, Jeremy, who worked at McKenzie in Australia, introduced Elon Musk to the speaker, illustrating the small network and six degrees of separation (12m36s).
• The speaker eventually joined PayPal in March 2000 after the company merged with x.com, and was drawn to the company's focus on payments and the acceleration of payments (13m51s).
• The decision to join PayPal was also influenced by the speaker's financial situation, having lost 30-40% of their savings due to the Emerging Markets currency crisis in 1998, and borrowing money from a former mentor to make ends meet (14m24s).
• The speaker started working at PayPal immediately after graduation, without taking a summer job, and found the company-building experience to be tough (14m59s).
• In the summer of 2000, PayPal was struggling with a burn rate of $14 million a month and only 7 months of runway left, prompting the company to charge for payments and solve the fraud problem to scale the business (15m17s).
• After Elon Musk left, Peter Thiel became the CEO, and the author became the VP of finance and risk management, attending board meetings, involved in fundraising, and participating in M&A conversations (15m55s).
• In 2001, the company needed a CFO to take it public, and the author, then 27, raised his hand for the opportunity, emphasizing the importance of not being timid and asking for opportunities (16m19s).
• The author became the CFO and led the company through its IPO in 2002, a secondary offering, and the acquisition transaction with eBay (16m57s).

Career Advice and Pivotal Decisions

• The author advises second-year MBA students to think about their career decisions with an expanded time horizon, considering the arc of their career and not just making short-sighted decisions (17m36s).
• Peter Thiel's insight is that most people think one step at a time about their career decisions, but it's essential to expand the time horizon to make more informed choices (17m39s).
• The author suggests that taking calculated risks and working with great people can lead to more opportunities and a more enjoyable career (18m34s).
• The author's career path serves as an example of taking risks and expanding one's network, leading to new opportunities and a fulfilling career (18m48s).
• Three pivotal career decisions were made, each involving a version of the "marshmallow test," where a choice had to be made between immediate gratification and long-term benefits (19m18s).
• The first decision was to take a 50% pay cut to work at McKenzie, which allowed for the opportunity to work or study abroad, and required paying back the cost of education (19m38s).
• The second decision was to join PayPal, which involved paying back McKenzie for tuition and taking a lower cash salary in exchange for more equity (19m52s).
• The third decision was to join Sequoia, turning down an incentive package worth $20 million to stay as the CFO at PayPal, and instead taking a cash salary with no bonus or carry (20m15s).

Characteristics of Successful Founders

• Founders who change the world often have authenticity, a growth mindset, and a passion for solving a particular problem that is personal to them (21m19s).
• These Founders typically have a unique insight and a burning desire to solve a problem, and are able to deliver value to customers and create a good business model (21m43s).
• They are often strong-willed individuals who are eager to listen and soak up the benefits of other people's advice and experience (22m2s).
• Founders are not typically risk-takers, but rather risk mitigators who understand the variables that can go wrong in their business and work to fix them (22m25s).

Sequoia Capital: Humility, Impact, and the Steward Mentality

• Many successful companies have been founded by GSB alumni, including Medalia, Trulia, and Ethos, which was started by Peter and Linky, class of 2016, and is an online life insurance company (22m42s).
• The quality of GSB has changed over the years, and it is now considered a good place to find investment opportunities, unlike 20 years ago (23m19s).
• The growth mindset is essential, and it has been embodied throughout the career of Roelof Botha, who used to write "10^9" on every piece of paper to remind himself of his goal to generate $1 billion in returns (23m36s).
• Roelof Botha has generated over $10 billion in gains, but success has not changed his mindset, and he now thinks more about the performance of his team rather than his individual contribution (23m59s).
• At Sequoia, the mindset is that the company is only as good as its next investment, and nothing wilts as fast as laurels that have been rested on (24m22s).
• Roelof Botha was attracted to Sequoia because of the humility of its people, who had enough money to never have to work again but were still relentless in their pursuit of the next interesting company (24m56s).
• Sequoia's clients are almost exclusively endowments, foundations, and nonprofits, including Stanford, and this motivates the company to work hard and make a positive impact (25m25s).
• Roelof Botha's career may seem flawless, but he has made 15 investment recommendations that ended up being failures during his 21-22 years at Sequoia (26m15s).
• Don Valentine, a former leader at Sequoia Capital, emphasized the importance of facing adversity and failure when interviewing for a position at the firm, as about half of the investments made by Sequoia do not generate a profit over the company's 50-year history (26m34s).
• To be exceptional, one needs to push boundaries and be at the edge of incompetence, where sometimes things won't go right, but staying within those boundaries will prevent achieving something special (27m15s).
• The title "Steward" at Sequoia Capital means leaving the firm in a better place than when one found it, and the company has changed its constitution to make it virtually impossible to take it public or sell any part of the GP to a third party (27m44s).
• The role of a Steward at Sequoia Capital involves ensuring the firm's continued success and positioning it for the future, with a gradual transition of leadership from one generation to the next (27m59s).

Giving Back and Philanthropy

• When interviewing candidates to join Sequoia, the focus is on finding individuals who could potentially lead the firm in the future and make great decisions (28m44s).
• Philanthropy and giving back are essential, as many people have benefited from the generosity of others, and it is crucial to pay it forward, as seen in the example of Stanford University, where a building is named after Roelof Botha and his wife (29m17s).
• The importance of giving back is rooted in the idea that one's success is often the result of the opportunities and resources provided by others, and it is essential to recognize and appreciate this (29m29s).
• The Stanford Graduate School of Business (GSB) played a crucial role in providing opportunities, and the education received there has been essential in daily work at Sequoia Capital, particularly the strategy lessons from Professor Salona (30m15s).
• Giving back to the next generation seemed natural, and there has been immense joy in being able to do so, especially through the Innovation program at the GSB (30m38s).
• The Innovation program has already produced a couple of venture-funded companies, and it has an unusual story behind its creation (30m55s).
• The program was initiated in response to a call for help from Dean Lan in 2020, as many internships for first-year students had dried up due to the pandemic (31m6s).
• The idea for the program was to provide a stipend to students who would work on a business idea during the summer, with the goal of making it somewhat practical (31m51s).
• The program was initially intended to be a one-time thing, but a student's email in the subsequent year led to its continuation, with the realization that it could provide opportunities for people who don't have the means to pursue something entrepreneurial (32m5s).
• The program aims to support students who want to pursue an entrepreneurial dream but need financial support, providing them with enough money to get by and work on their ideas (33m10s).
• The program's goal is not to be lavish but to provide a balance between financial support and the need to be resourceful, with the amount of money provided per student being less than what they could get from another paying job (33m12s).

Continuous Growth and the Importance of Mentorship

• The idea of being at the top is a misconception, as there is no summit, only a continuous climb, and one's position is only as good as their next investment or decision (33m46s).
• Mentors play a crucial role in providing guidance and advice, and having multiple mentors throughout one's journey is beneficial (34m22s).
• Examples of mentors include a high school teacher, sports coach, or professionals in one's industry, such as Goth Saloner and Doug Leone (34m30s).
• Intergenerational transfer of knowledge is valuable, and having access to experienced individuals like Doug Leone and Jim Goetz can provide valuable insights and advice (35m3s).
• When making decisions, it's essential to distinguish between irreversible and reversible decisions, with the former requiring more thought and pressure testing (35m57s).
• Irreversible decisions, such as the decision to split Sequoia into separate entities, require careful consideration and input from advisors, including Condoleezza Rice (36m31s).
• The ability to make non-consensus decisions is crucial in leadership positions, and it's essential to take the time to think through the consequences of such decisions (35m47s).

Decision-Making and the Sequoia Capital Fund

• The Sequoia Capital Fund, an evergreen fund launched in 2021, is an example of a non-consensus decision that required careful consideration and planning (35m46s).
• Decision-making in venture capital often involves consensus-building and can take months to arrive at a conclusion, as seen in the case of the Sequoia Capital fund, which started as an idea and was pressure-tested and refined over time through feedback from others (36m59s).
• Launching a new idea or initiative requires iteration and adaptation, and it's essential to avoid letting perfection be the enemy of good, instead making a decision and refining it as needed (38m5s).

Leaving Your Mark: Resume Virtues vs. Eulogy Virtues

• The theme of "leaving your mark" is about considering how one wants to be remembered, and it's a question of balancing "resume virtues" (accomplishments) with "eulogy virtues" (the impact one has on others) (38m17s).
• As one grows older, the focus often shifts from achievement-oriented "resume virtues" to the more meaningful "eulogy virtues," which prioritize the impact one has on others and finding purpose in life (38m49s).
• Finding purpose and motivation is crucial, and it's essential to look beyond personal accomplishments and ego-driven goals, as seen in the book "Man's Search for Meaning" by Victor Frankl (39m6s).
• In terms of personal legacy, it's essential to consider how one wants to be remembered by others, including family, friends, and colleagues, and to strive to be wise, kind, fair, and a good role model (39m31s).

Time, Decisions, and Global Trends

• The question of how to comprehend the power of time is an important one, and it's essential to recognize that time is limited and should be used wisely (40m21s).
• A time span of discretion is the period over which one optimizes and makes decisions, and it varies among individuals, with those at the front line often having a relatively short time span and CEOs having a longer time span measured in years or decades (40m38s).
• It is encouraged to lengthen one's time horizon as early as possible to make better decisions (41m6s).
• The split of the global technosphere into regions like China, India, and the US, with increasing economic nationalism, is a concerning trend that may not be permanent, but it's a sad state of the world (41m26s).
• The benefits of trade and global integration have been evident in the past 50 years, with phenomenal economic growth, but this trend has stalled in the last decade, raising concerns about repeating the mistakes of the 1930s (41m54s).
• The African Venture Capital landscape is not closely tracked, but there is a recognition that talent is more distributed than opportunity, and technology has made it more accessible globally (42m45s).
• Building stronger bridges between the US and African markets is an opportunity, and there are many interesting opportunities to build technology companies around the world (42m57s).

Entrepreneurship: Sales, Persistence, and Passion

• For those interested in starting their own ventures, the importance of sales and real-life experience cannot be overstated, and being told "no" is a valuable learning experience (44m8s).
• Raising money from investors requires persistence and learning from rejection, as exemplified by the experience of trying to raise money for PayPal (44m20s).
• To be successful in entrepreneurship, one needs to learn how to sell their idea and be open for business, as it can be difficult to win investments and overcome setbacks (44m26s).
• Founders must solve a problem that truly motivates them, as perseverance is key in overcoming the many challenges and setbacks that come with entrepreneurship (44m46s).
• It's essential to choose something you're truly passionate about, as this passion will drive you to break down walls and keep going despite the difficulties (45m30s).

Building Something Useful: Value Delivery Before Value Capture

• Building something useful is crucial, and entrepreneurs should focus on solving the problem for their customers rather than over-intellectualizing and thinking about features and business models too early (45m45s).
• Value delivery should come before value capture, and entrepreneurs should focus on creating something useful before thinking about the business side of things (46m12s).
• Being entrepreneurial is not synonymous with being a founder, and one can have incredible entrepreneurial experiences by joining a company early and helping build it (46m19s).
• Entrepreneurship is about building something that didn't exist before, and it can be a fun and impactful way to change lives, organizations, and the world (47m5s).

The Current Technological Landscape and its Opportunities

• The current technological cycle is deeply technical, with the internet and other advancements creating new opportunities for entrepreneurship and innovation (47m44s).
• The current data and analytics age is highly technical, but this is not unique to this era, as previous technological paradigms also had their technical nuances (47m48s).
• When building PayPal, the impression was that technology was essential, and this has continued to be the case in investing, with the current landscape being more advanced and deep (47m59s).
• The transformation that has happened in a short period is significant, with changes in the way people shop and access information, and this is just another wave in the evolution of technology (48m32s).
• Despite the intimidating nature of technological advancements, they have generally improved layers of abstraction, making it easier for business people to leverage available technology (49m19s).
• Business-focused individuals are in a good position to build applications on top of available AI technology, and they should understand the technology tools available today (49m30s).
• Embracing data-driven decisions is essential, and having a statistics background can be helpful in building systems that utilize data and decisions (49m53s).
• The models built at PayPal in 2000, which scored every single transaction, were an early example of machine learning, and this technology has continued to evolve (50m2s).
• The current foundation models are driving down the cost of inference dramatically, making it possible to assume a marginal cost of zero and build applications on top of this technology (50m41s).

The Power of Pairing Business and Technology

• The pairing of business people with technologists can lead to successful businesses, as business people often understand end markets and applications better than technologists (50m57s).
• The tradition of ending interviews with Rapid Fire questions will be followed, with a question being asked, and the response will be based on what comes to mind (51m10s).

Rapid Fire Questions and Concluding Remarks

• Roelof Botha had a diverse breakfast consisting of leftovers, including salad, squid, cod, seabream, bone broth soup, cooked vegetables, and a half of mango. (51m29s)
• If Roelof Botha were an adventure capitalist, he would be unemployed, implying that his current role is more secure and stable. (52m5s)
• One investment Roelof Botha wishes he had done but didn't is Facebook. (52m14s)
• Roelof Botha recommends the book "Man's Search for Meaning" to all aspiring founders. (52m20s)
• Roelof Botha has a book of jokes by his bedside, but most of the jokes are likely to offend at least one person. (52m28s)
• Roelof Botha shared a joke about the day of the week when most diets start, and the answer is "tomorrow," emphasizing the importance of prioritizing tasks and procrastination. (52m48s)
• Roelof Botha encourages the audience to decide what to prioritize and what to procrastinate on in order to achieve their goals, as they have incredible talent and opportunities. (53m20s)