Palo Alto and Workday both started at Greylock the same year, in the same office. 2005, San Mateo office. Anil and Dave Duffield started Workday. Nir Zuk started Palo Alto. She wrote the first check, has been on the board for 18 years. I think it just rolled off recently. And these are 50 to $100 billion companies. I think Palo Alto is like a $140 billion company. Workday's, I don't know, between 50 and 100, right? These are big businesses, right? And by the way, we've been a part of starting Abnormal, Sumo Logic, which went public, several companies. Okay, so Greylock's good. Before we get to Greylock being good, why is this?
All right, Sam, I'm happy to be here with you. This will be hard to stay serious, but we'll find our way. You and I talk a lot. We text many times a day. I think we're in, what, 12 different text groups? There was a joke my wife and I had when we were sitting at dinner one time, and I was realizing, I feel like I have so many friends. It turned out that it was the same configuration of three people nine times, and they're all you. But doesn't that make you happy? Yeah. Before we start, by the way, do you have any products you want to plug or things you need to get off your chest? I just got this new standing desk from Design Within Reach.
First of all, it's a standing desk that actually looks good. I don't know if the videos can see these, but these aren't what we want. By the way, mine just arrived. Yeah, mine arrived Friday. Okay. It is really good, though. But the middle is leather, and so I think the mouse just glides beautifully. We do have a memetic product thing going with our friends where everything that one person buys, everybody ends up with. But I think as a result, we all end up with amazing products. It's actually a big hack. Like this rice cooker you got me? The rice cooker's crazy. It's unbelievable. Okay. And it keeps it warm. I'm going to start with a serious topic.
I didn't realize this before, but when I did research prepping for you, Greylock started in 1965, 60 years. I can understand a firm being successful since 2015 and evolving. I get even coming from the nineties, although that still seems like a lot to navigate. But in 1965, there wasn't the internet. There wasn't a TI-83. There wasn't anything. So what was happening in 1965? It's interesting. Greylock turned 60 years old this year. Our understanding, and no one keeps an official record of this, is we're the oldest venture firm in the US to have started with multiple limited partners. And we pioneered the GP-LP relationship that underpins...
Everybody else was like a family office or something. The firms at the time were typically managing capital on behalf of a single family. Yeah. Greylock started as an East Coast firm. It actually moved to the West Coast in the 2000s. And it's gone through generations of partners and generations of investing. And one of the things that's interesting about the firm is we've navigated completely different sectors. By the way, it's interesting. Some of the original partner group is still alive. Wow. And comes to our limited partner meetings. And they're 90? In their nineties. Yeah. And so I talk to them about, how was venture in the sixties and the seventies?
Well, the first thing is, there's no internet. Yeah. So how do you find companies? It turns out they would buy newspapers of different cities, look in the classified sections for job postings, because that was an indication that a company was emerging and hiring. And then they'd fly to the city, show up at the office, and meet the entrepreneur. Decisions today move pretty quickly. Yeah. Term sheets happen in days. They had a year. Six months. Yeah. And by the way, what was the investment size they were contemplating? A million dollars. 200,000. Yeah. That's crazy. So you take six months to make a $200,000 investment decision.
How big was the first Greylock fund? Do you know? I don't know. Small. Small. And what were they investing in? So one of the first major wins for Greylock was a company called Continental Cablevision, which underpinned a lot of cable in the US. It eventually became AT&T and then Comcast. So the underlying cable networks that power a lot of the US, that was one of Greylock's first large successes. But we were investing in all sorts of different companies. Neutrogena, the skincare product, I'm sure you use some of it, was an early Greylock investment. So that was an initial era. Then there was an era that was more health and bio focused.
And Greylock was the initial investor in companies like Millennium, Vertex, Stryker. These are all publicly traded $100 billion companies today. $100 billion. Yeah. And Greylock was early in them. And today we do very little in healthcare and bio. So this firm has navigated through different sectors. Crazy. Crazy. And then we went into the open source era and we did Red Hat, which is the largest outcome in open source software. Yeah. And then the internet and social network era with Facebook, LinkedIn, Instagram, marketplaces with Airbnb. Now enterprise software.
So what I'm curious about is, we were talking about this a little bit yesterday, that venture firms for the most part have a run and then they mostly don't make it. Yeah. Yeah. There's a small number that do. Yeah. Greylock's obviously the oldest I can think of. Yeah. What is consistent from 1965 till now? Do you think there is a thread that stuck, or is it just constant reinvention and the whole thing's different at this point? Yeah. There are some core dimensions that have persisted since 1965. And then I think, critically, the firm has continued to reinvent itself. And I think absent both those things being true, Greylock wouldn't be Greylock in 2025.
What do you think stuck? What sticks? I think the number one thing is just the core values and ethos of the firm. Right. And this is a firm that was founded on a service mindset. Actually, there's this really interesting letter one of the original partners wrote to the partnership that I found a few years ago, and I read it. He wrote it as he was leaving, sort of graduating. It was a reminder to the partners of what the core ethos of Greylock is. And in it, there's a line I love, which is that the ambition of every Greylock partner should be to win the Oscar for Best Supporting Actor to the entrepreneur.
And in that is the ethos of the firm, which is we're a service-oriented firm. We're a people-oriented firm. We're not the stars of the show. We do very little press. We do very little marketing. But we want to be the person who is in the founder's corner and the first call when something's going wrong. And that core ethos of this being a service job has persisted throughout the generations and decades. And that people orientation has also persisted. Many other things have evolved. Yeah. Like the sectors we invest in. We're now a Bay Area-based firm. We used to be an East Coast-based firm, right?
The things we look for in partners, the speed at which we operate, all of this has been very fluid, and we've reinvented ourselves. But I think that core ethos and guiding North Star has not changed. Is being not loud and external and brand and press, is that core or is that an evolving thing? It is our core ethos, and we will never be the loudest.
But I think if you built a spectrum, right, and a one was there's no website and no person, no firm-related marketing ever, and a ten is the firm's a marketing machine and it has an investment arm appended onto it, I think you have to question, in the current environment, can you stay at a one, or do you need to go to a three or four? Right. And I think that's a debate we have internally. But I don't think we would ever change that core ethos of there being no Greylock partner or individual that should ever be larger than the companies and founders we're in business with. Venture got loud basically when Andreessen Horowitz came around, right?
I think that's in that period. That's right. And that prisoner's dilemma forced everybody else to get loud. But I think if you built a spectrum, right? And a one was there's no website and there's no person, there's no firm-related marketing ever. And a ten is the firm's a marketing machine and it has an investment arm appended onto it. I think you have to question, in the current environment, can you stay at a one or do you need to go to a three or four? Right. And I think that's a debate we have internally.
But I don't think we would ever change that core ethos of there's no Greylock partner or individual that should ever be larger than the companies and founders that we're in business with. Venture got loud when Andreessen Horowitz came around, right? I think that's in that period. That's right. And that prisoner's dilemma forced everybody else to get loud. There is a dynamic where if you're in a really competitive marketplace and if you're competing against people who are very loud and have presence all over the place, how do you ensure that you continue to see the best opportunities? Yeah. And you have to have some strategy around that.
And at the end of the day, you've got to play the game on the field. Yeah. You can't not react to what's happening on the field. Can we talk about your own experience of the handoff that happened with you and is in process? You became a partner very young. Now you work really tightly with Ashim and the rest of your partnership. How did you get set up for success to the degree that you did as young as you did? I think one of the core things that's unique about our talent model is we're a very apprenticeship-focused talent model. And by the way, if you rewind the clock, and I think this is true for most of venture, but it was certainly true of Greylock.
You go back to the original generations, people joined Greylock in their mid-twenties to mid-thirties and they built their entire careers at the firm. And there were many people who had multi-decade tenures at Greylock. Right. And then I think what happened as venture evolved is in the early two-thousands, there was a shift towards hiring people who were much more senior, came out of really rich operating backgrounds, people who were founders, CEOs, etc. And at one point, actually a lot of the industry fully rotated that way. Mm-hmm. And now I think there's a mix, right? And if I look at Greylock today, we have a mix. We have people like myself.
I joined the firm at 23 years old, and we have people who joined like Ashim or Jerry, who had significant operating tenures, or Reid Hoffman before they became venture capitalists. Yeah. But independent of when anyone joins the firm, we take the approach to talent that venture is a very different business than whatever business you were doing previously. We're going to hire people who have a beginner's mind, and we're going to develop them in a very, very deep and intricate way. And so, for example, I joined the firm at 23. I immediately joined a number of boards alongside my partners. Yep. I was in every conversation with them, right?
Ranging from the board meetings itself, the follow-on conversations with the CEOs, when they were interviewing executives. I was sitting next to the partner during the interview. And then after the interview, there would be a discussion of what that person detected and learned, right? And so you have this osmosis that happens and this level of immersion that I'm not sure happens at many firms, and it may be hard for others to appreciate. And that enables our younger talent to get developed. I feel like one of the dynamics that has to happen is the senior partners have to, by senior I mean older partners, have to have a generous mindset to the younger partners.
If you're not willing to say, I know this company is really good, but I'm actually not going to bear-hug it. I'm going to let my younger partner take a lot of that relationship on, it won't work, right? Exactly. This all comes back to even how we run the firm, right? So for example, many firms, when they think about investments and attribution, they think a lot about who sourced the opportunity, right? And the person who sourced it is the one who does it and the one who gets the credit. And if you're a young person, the way you progress in the firm is you source amazing opportunities. We don't use that language at Greylock.
We use the language, were you causally impactful to a successful investment? That could mean you sourced it. It could mean you built a prepared mind, which enabled us to make a quick decision. It could mean you helped us win the opportunity. It could mean after we got into the opportunity, you were on the board and did a bunch of great work. Everyone strives to be causally impactful on successful investments. And what that does is it creates the right set of incentives and orientation. Literally, if you were in our partner meetings, right?
When a senior or more tenured partner intersects an opportunity, their first reflex is, can I get one of my younger partners into this opportunity as the primary alongside me? Because at the end of the day, that's what's going to make that person successful, which is what's going to make the firm successful. Does it require a big enough gap then? I feel like one of the things that can be hard is if somebody is only X number of years in, it's hard for people to hand things off to somebody who's just a little click below. It's almost easier when you have these partners that are wildly successful already who have been doing it for a long time.
Is that part of the way you think about it? Is it easier to hand it off to somebody 20 years younger than five years younger? I don't think so. I think the orientation for us is, first, should we make the investment? That's the number one question. Independent of any individual dynamics, should Greylock try to earn this founder's trust and right to invest? And then the second question is, what does the founder want? Right? And in everything, that's how we approach sponsorship, if you will, which is if you're the founder, we're like, hey, Jack, what do you want? And here's what we think the different people can offer, but you should make that decision.
But then let's put those two aside. Now let's say, okay, those two things check out. Our orientation is always, at any moment in time, who on the team is best suited to take on this project? And it's not about, is the gap 10 years or five years? It's like, hey, if this person has more capacity and has the time to go dedicate to this company and work in service of this company, and they didn't source the opportunity, great. Let's have them go do it.
If this person is the one who built a prepared mind on this market area, and it happened that this other partner sourced the opportunity, it makes more sense for the person who actually understands the space to go sponsor the investment. When you think about a venture firm persisting over, let's forget 60 years, let's just take a decade. When you think about that, what do you think are the actual components that are durable? What are the things that hang on through teams and from fund to fund? What persists in a venture firm? So I think a couple of things. One is what we started with, which is what are the core values and ethos of the firm?
I think that gets embedded in the DNA and persists. And part of that is also what's the approach to the job? What does it mean to be a venture capitalist? What does it mean to be a board member? And that gets trained in the new generation of people, and that does get passed on. So that's one dimension. The second dimension is the firm's brand, right? And at some level, my mental model on a firm's brand is the following, which is you're a new company. Nobody knows who you are. You come raise money from Greylock. We stake our credibility on you. Yeah. You now go to customers, and now you're like, hey, I'm Greylock-backed.
Now the CIO of this enterprise company is like, great, I'll take a risk because last time I took a risk on a Greylock-backed startup, it worked for me. The engineer is like, oh, I'll take a risk because look at all these other great companies this firm has been in. For sure. And eventually your brand becomes bigger than Greylock's, and it accrues back to the firm. And now the firm goes and stakes that on the new entrepreneur. Yep. That flywheel, I think, persists. It can erode if you don't keep making terrific investments. Yeah, but it has some amount of time. But it has some amount of time. Yep. And then the third is the network, and there's a two-sided network.
Nobody knows who you are. You come raise money from Greylock. We stake our credibility on you. Yeah. You now go to customers, and now you're like, hey, I'm Greylock-backed. Now the CIO of this enterprise company is like, great, I'll take a risk because last time I took a risk on a Greylock-backed startup, it worked for me. The engineer is like, oh, I'll take a risk because look at all these other great companies this firm has been in. For sure. And eventually your brand becomes bigger than Greylock's, and it accrues back to the firm. And now the firm goes and stakes that on the new entrepreneur. Yep. That flywheel, I think, persists.
It can erode if you don't keep making terrific investments. Yeah, but it has some amount of time. But it has some amount of time. Yep. And then the third is the network, and there's a two-sided network. There's the industry network, the companies you're a part of, and I'll come back to that in a moment. And then there's the limited partner relationships. It's so interesting how much compounding there is in the network and what we do, right? And there's so many stories I could tell you, Jack, but I'll tell you one that I think is interesting. Rewind the clock. Greylock moves to the Bay to be Bay Area-based in the mid-20s. Yep. Okay. We're in San Mateo. It's 2007. Okay.
Okay. There's a star product manager at Google named Josh McFarland. This predates me, but we reach out to him to try to recruit him onto the investment team at Greylock. He's like, hey, spent a bunch of time. I don't want to be an investor, but I'm really glad I met you guys because I want to start a company. So we're like, great. Leave Google, come be in the IR office, and start a company. He leaves Google, comes and sits at the Greylock office, initiates a company at Greylock called Teleport. It's an ad tech company leveraging ML techniques for different ad tech use cases. He hires a young engineer from Google named Sanjay as one of his founding engineers.
And a few years in, business is progressing. He acquihires a small company called Adstack and has two co-founders, a founder named Eben Reiser and a founder named Thanos Bascus. Okay. A few years go by, this company gets acquired by Twitter. It's a $500 million acquisition, largest acquisition Twitter did pre-becoming X. The head of engineering at the company is a guy named Wade Chambers, who leaves and comes and becomes an EIR at Greylock, an exec in residence. He then introduces Greylock to Sanjay, that founding engineer, and Evan, that initial product manager. Yeah. Who were ending their time at Twitter and beginning to think about what's next.
We start working with them nights and weekends and conceive a new company that becomes Abnormal AI. We fund that company in 2018. That company is now the second-fastest-growing security company of all time. Late-stage private, could be a public company. Yep. In the process of that company getting built out of our offices, we meet two new young, very strong product leaders. A woman named Nicole and a guy named Vanit. Nicole joins the company as one of the first 10 employees. Vanit is a year or so after her. They both are part of that business until hundreds of millions of ARR. And last year, they decide, okay, they want to go start new journeys.
Both of them come back to Greylock, and two new companies get started. Yeah. Fable, Security, and Cogent. And it all starts with the reach out to Josh. Exactly. And it's like, we're now 18 years later. Right. And by the way, these two new companies are just beginning to flourish. Yeah. Tomorrow I'm going to an all-hands at Cogent. And I guarantee you there are engineers in that audience who will be founders. That three to four years from now, we're going to be back in our office starting the next company. That's an amazing flywheel around our franchise. And I do think that there's a lot of durability to that. And that's just time.
Time and working closely with the companies. Yeah. And earning people's trust. All of these people could have worked with any venture capitalist they wanted, but they see that firsthand experience of who we are, what we're like to work with. Can this type of flywheel happen without the board relationships? Let's put the board aside. I think the question is, are you intimately involved? A board-level relationship. I think you need a very intimate relationship with the company. You can't just invest and have this happen. I don't think so. Because it requires knowing people at the company that aren't the founders.
It requires the founders saying, hey, anybody who leaves should work with you guys. It requires a few things. And also it requires you having built those relationships. I first met Nicole because I got introduced to her by Evan, and he asked me to go have coffee with her to convince her to, I think she was at Palantir at the time, to leave Palantir and come to Abnormal. So she remembered that coffee. Yeah. Right. She remembered the bet she took. And so then, right. And then a relationship got built. Same with me. And that's one of the things about our model is we have a very small set of very concentrated relationships.
And as such, we get to know people inside the companies. Yeah. And there's a depth and intimacy to it that I think is very profound and leads to this knock-on effect. Okay. I want to come back to the depth thing and put it in contrast to another thing I know you care about a lot, which is seeing enough of the market. Yeah. And I just want to pull that open. But before we do, the first thing you mentioned was the values and ethos, and that that's persistent. Can you describe what it is in Greylock's case specifically? I'm a new hire. I just joined. I'm your Padawan. What are you trying to teach me on the Brandon ethos? I think there's five or six dimensions.
The first, which I don't mean this to be trite, is we are in the customer service business. And we have two sets of customers, entrepreneurs and LPs. But if we do right by the entrepreneurs, we do right by the LPs. So really we're focused on the entrepreneur. I think you have to have that mindset. It's a hard mindset to teach. Do you think not the majority of people in venture do? I think everybody in the abstract can say they have the mindset. I think in Christmas 2024, when we're on six hours of Zooms helping a company navigate a last-minute financing, that really tests, do you understand what it means to be on the service mindset?
And our view is if the entrepreneurs we're in business with are working, we're working. And if they need our help, we're on Zoom independent of where we are. That's hard to actually do day in and day out. And you're saying it's a level that is different than the median venture investor. I am consistently disappointed with what I see from the median venture. Put aside the median. I'm consistently disappointed by what I see from venture investors at firms we would consider top-tier firms. And you think that it's a lack of effort, or you think it's a lack of understanding what needs to be done? It's an incentive problem, right? And the model has evolved, right?
And sorry, now we're overlooking the topic. But look, I think fundamentally for any venture capitalist, you have to have clarity on what's your core economic engine. Are you in the carry business or are you in the fee business? And if you're in the carry business, the only way you do well is if your entrepreneurs do well, right? If you're in the fee business, actually your success, it's not completely orthogonal, but it's less tightly coupled. What's happened to a lot of firms that historically we would have viewed as our competitors is they become scaled asset managers that are running very large portfolios. Yeah. And by the way, it's not a dumb economic strategy.
No, it's the best way for them to make money, is to deploy money. Correct. And by the way, they can build an index of companies, and then they can track those companies, and they can see the top ones, and they can double down and concentrate a lot of capital into those companies. But what it means is now when you're the partner on the team and you have, I'm just making up a number, 25 company relationships, and maybe two of them are of consequence in the way that you think about the world. If you're in the fee business, your success is not completely orthogonal, but it's less tightly coupled.
What's happened is that a lot of firms that historically we would have viewed as our competitors have become scaled asset managers that are running very large portfolios. Yeah. And by the way, it's not a dumb economic strategy. No, the best way for them to make money is to deploy money. Correct. And by the way, they can build an index of companies, and then they can track those companies, and they can see the top ones, and they can double down and concentrate a lot of capital into those companies.
But what it means is now, when you're the partner on the team and you have, I'm just making up a number, 25 company relationships, and maybe two of them are of consequence in the way that you think about the world, it may actually be irresponsible for you to jump on the phone with the entrepreneur on company number seven in your portfolio and help them navigate a financing that's hard to pull together, when instead you could be focused on the next thing to go deploy $20 million to. So it's not that you're not working hard. Yeah. It's just that the incentives have changed. There's also an incentive problem if you don't think you're going to stay somewhere for 15 years.
So you gave this example of how one thing flows to the next, flows to the next, but those all stayed under the Greylock umbrella. Yes. More than the person. You're probably the person's relationship was the thing. You met with this person to try to convince them to join. You could have probably not been at Greylock and that would still exist. But a lot of it endures with the brand. If you're at one of these firms and you're coming up as a junior partner or something like that, and you don't think you're going to be there in seven years, your incentives are to just find a winner more than to help an existing company. Totally.
And there are many examples now of people. Basically, there's this principal-agent problem where the new young partner is like, I just want to put as many shots on goal as I can, because if I hit one thing. Yeah, I'll just get it. And then I'll just switch firms. Totally. I'll switch firms. I'll wipe the slate clean. I'll come in at a more senior level, and I'll start from scratch. And I'll have been an investor in X, and that's all that matters.
And we all know tons of people are doing this, right? And it's great. And by the way, it's really bad for founders. We were talking about this before the show, right? I've had a few, we both have had a bunch of companies raise follow-along rounds recently, right? And these companies get multiple term sheets, and then you get in a room and you're like, okay, what do you want to optimize for? It's the first time this year where I've been like, guys, the number one thing we need to optimize for is the person who's joining the board of the company likely to still be at their firm in five years? To me, that's more important than brand, experience, track record, because fundamentally it's a people business. It's so disruptive.
And it's so disruptive, and it happens so frequently now. And the person who comes on next doesn't care in the same way because they're never going to get credit for it. So they're never going to care in the same way.
Well, not only that, I think one thing that founders don't fully appreciate is, you go into a business with a firm. Do you really understand how decisions at that firm get made? You have your partner, but is your partner a decision-maker? Are they trusted by the decision-makers? Do they have influence? Are they going to be there? Because as you know, these journeys are not all up and to the right. By the way, it's really interesting. We were looking at the data recently. Many of our biggest successes had years where the businesses were in complete turmoil, flat years, financings that couldn't come together. And so the question is, who's going to step up when that happens? And the problem is already, if you're a board member, you don't really understand the company super well at all, because all the context is inside the organization. But now, if you're the board member and I'm your partner and we're two partners in a firm, I really don't understand what's going on. And so if you're somebody who's not high-trust inside the organization, isn't a real decision-maker, and isn't there, now the company's in a really jeopardized position because one of their major insiders is not really supporting them in the way they need. And we see this happen time and time again in our companies when we work with other firms.
As firms get bigger, which they obviously are, does that naturally lead to more turnover? Are those two things inextricably linked? I think it depends on the strategy of the firm. I think you could imagine firms that get larger but maintain a very concentrated approach, a small set of relationships. So what about a large partnership? Absolutely. Yeah. And I think empirically that's what the data would show. The turnover in venture today is much more dramatic. And let's just take whatever, top eight, top 10, top 15 firms. Yep.
The turnover at the partner level is much higher than it's ever been. And I bet you it's correlated with size of partnership. I think that's a big dynamic. It all comes back to this principal-agent problem, which is you have people who, the only way they can progress inside their firm is showing momentum in their portfolio. So they put a lot of short-term-oriented shots on goal. A lot of that blows up in their face, and so then they need to leave as one. By the way, let's say you're a strong-performing partner. You don't want to be diluted by all these people. Of course.
Right. Because that's all going to dilute your terminal carry. So at some point you pick your head up and you're like, wait a second, why am I in this structure? And so then you leave for that. So there's all these different reasons why these turnovers happen. And it's bad for the firms. But again, it's really bad for the entrepreneurs. It's actually interesting. Between, let's say, amongst firms that are in the five- to ten-billion-dollar range, the dispersion in number of partners is crazy. It's like 10x dispersion or something like that. Yes. Some have five and some have 50. Yeah. Just on that metric alone, do you believe more in one over the other?
Maybe there are two parts to that. One is, what do you personally want, and what do you think leads to the best work environment? I think our view is, we think above some group size, it gets really hard to make cohesive decisions. Right? At Greylock, again, our one thing that I think is interesting about our talent model is, if we hire you at Greylock at any role, we're only hiring you if we believe you have the potential to be a long-term partner and could literally spend the next 20, 30, 40 years at Greylock, whether you're a 23-year-old with one year of work experience or you're a 45-year-old CEO. How do we actually implement that? Well, there's no hierarchy inside the firm. Every single conversation is with the entire group. There's no concept of a subgroup, an investment committee. It's like all the partners sit in a room and we make decisions together. We talk about strategy together. We talk about the portfolio together. And so we do believe there's some size limit at which that conversation begins to degrade.
I agree. Now, whether that's eight, 10, 12, 13, we could debate that, but it's in that range. Yeah. And so I think it's hard to consistently make very good decisions when groups get beyond that in size. Yeah. You also have this dynamic where it's easy to hide. You don't want to allow low performers. When it's big. When it's big. Yeah. Because when it's small, at the extreme, if it's just you and I. Yeah. You're going to know if I'm carrying my weight or not. You probably wouldn't, but that's fine. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. We talk about strategy together. We talk about the portfolio together.
And so we do believe there's some size limit at which that conversation begins to degrade. I agree. Now, whether that's eight, 10, 12, 13, we could debate that, but it's in that range. Yeah. And so I think it's hard to consistently make very good decisions when groups get beyond that in size. Yeah. You also have this dynamic where it's easy to hide. You don't want to allow low performers. When it's big. When it's big. Yeah. Because when it's small, at the extreme, if it's just you and I. Yeah. You're going to know if I'm carrying my weight or not. You probably wouldn't, but that's fine. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah.
Know from knowing you well that you care a lot about seeing a lot of the market and about not missing out on what's happening and having a pulse. And I'm just curious how you think about those two, because they seem at odds.
Yeah. So taking a step back, at Greylock, what do we care about? We care about being meaningful partners to the most meaningful companies in every vintage, right? And we don't need to be in every company, right? And a given fund will do something like 20 to 30 core relationships. And the math would suggest that if three to seven of those go on to become really important companies, we'll have very successful funds. So by definition, we don't need to be in every company.
That said, we have to be extremely paranoid about whether we are seeing the best entrepreneurs and seeing the best opportunities. And so that's why, despite the focus and depth of relationship, we care a lot about our capital competing against the opportunity set in the marketplace.
And so, for example, one of the things we were talking about before is we, every single week, there's six core sectors we invest in at Greylock. For all those sectors, we have a list of the competitors we most admire, firms and individuals. And every week we track all the financings that have been done by those groups. And we ask ourselves the question, did we see or have the right to do that financing? Not did we meet it with eight hours to go before a decision got made, but were we there 10 days before a decision got made? In position.
In position, real shot to win the opportunity. And if that number is not 70 to 75%, that's a big problem, right? Because we respect our competitors in the business. If we're fundamentally making investments in a set without seeing the things that they're seeing, it's really arrogant to assume that we're seeing the best opportunities. And so you need to see that cross set, but then you have to remind yourself, and it's really hard, but you have to remind yourself that so few companies matter. So few founders are truly iconic. So few markets can support and have the characteristics to support these outliers. And so most things that a top tier venture capital fund will not go to successful outcomes.
So I get logically, but emotionally, it seems like a very different headspace. How do you avoid the FOMO chasing of deals where you heard Benchmark's looking at something, so we should be looking at something because Benchmark's smart, but we really should continue working quietly on this new company we're initiating with this person we've had a relationship with for six years, and going and spinning our wheels this week on something just because we heard some top tiers chasing? How do you not get lost?
By having real clarity in what you're looking for and then the ability to process and make decisions very quickly. So it's interesting, over my tenure at Greylock, I've been at the firm for nine years. There's this pendulum that swings on everything, right? Because we're constantly reinventing ourselves. So there are periods when we wrote these really long investment memos, these 15-page memos, all this work, right? And then there are periods where we have no investment memo and it's two paragraphs. The midwit take would be, oh, well, investment memos are more rigorous. If you write an investment memo, you're making a better investment decision. But it's not really because we're primarily doing first check investing, right?
Yeah, you're betting on people. We only care about two things. One is who's the person. Yeah. And the second is what's the general area in which they're building it. And if those two things are bright green, we're ready to invest. And we've made decisions in hours. And if those two things are not bright green, yeah, we can go call a bunch of customers and call the design partners and learn some stuff about what they're building. But we're not going to get to a yes on the decision.
So I think a big thing for us over the last few years has been continually refining what it is that we're looking for. And then if we intersect an entrepreneur who's in market and going to get seven or eight term sheets, we want to process that opportunity. But we want to spend a few hours with the entrepreneur. We want to talk to a few people who know him or her. We want to understand the area they're building in. And if those things are really bright green, then we'll run really hard to earn their trust and right to win. And if not, we don't have the FOMO of passing and knowing that one of our top tier competitors is going to do the deal.
How do you manage people to this? I think performance management in venture is probably way under-discussed, under-thought about. It's thought about much more in operating companies, I think. Some of it's because it's really hard. On some level, the only thing that matters is what were the returns, and that takes forever. There's luck involved. There's all this complicating stuff. So how do you understand if somebody's doing a good job?
It's really hard. We, in the last several years, have adopted what we call an inputs-based approach to performance management. So we got together as a full partnership. It was right after COVID, so I want to say in 2021. And we sat together in Napa for two days and we said, let's build a set of inputs that we would all agree: if we hired a new partner, Sally, tomorrow, and she excelled on all these inputs, she's highly likely to have strong outputs over time. Will it be in five years, three years, 10 years? Hard to predict. There's luck. Because at the end of the day, what's a partnership? You and I are pooling together and saying, hey, we want to share in each other's investment interests.
Right. And so we need to agree on what it means to be a good investor. And then if we agree on that and someone's performing on those things, we can take a long-term view on people. And hopefully people get lucky early on. But if they don't and they keep executing the inputs, we'll take the bet that luck will come their way and the outputs will follow. What are the inputs? So we have a document that has 18 inputs, and it's across the dimensions of the job. So it's across C. 18 is a lot. 18 is a lot, but we want these things to be- Is it bucketed? Yeah, it's bucketed. So there's four components of the job, which is C, decide, win, build. Yeah.
And then there's internal partnership. Right. And so, for example, on C, one of the dimensions is, did you see 75% of the seed and Series A opportunities that were done by your competitors in the sector that you're responsible for? At the individual, this is getting maybe a little too fine-toothed comb, but at the individual and hopefully people get lucky early on. But if they don't and they keep executing the inputs, we'll take the bet that luck will come their way and the outputs will follow. What are the inputs? So we have a document that has 18 inputs, and it's across the dimensions of the job. So it's across C. 18 is a lot.
18 is a lot, but we want these things to be— Is it bucketed? Yeah, it's bucketed. So there's four components of the job, which is C, decide, win, build. Yeah. And then there's internal partnership. Right. And so, for example, on C, one of the dimensions is, did you see 75% of the seed and Series A opportunities that were done by your competitors in the sector that you're responsible for? At the individual, this is getting maybe a little too fine-toothed-comb, but at the individual level, do you care that they saw a certain percentage or that they were doing the inputs that would lead the seeing?
I think a bit of what you're asking is, okay, well, if someone's going and pounding the pavement and hosting great events and outbounding to entrepreneurs, is that what matters, or is it the 75% number that matters? We measure the number, but then there's a qualitative sense of, are you doing the right set of activities? And if it's going wrong, you dig into the inputs to that output. Correct. Correct.
Another one that's really basic is, we have a responsiveness SLA, because if you're in the service job, you've got to be incredibly responsive. And so we literally measure each other on how long does it take us to respond, both to the entrepreneurs we're in business with and internally. How can you measure that? You're not going through someone's phone. We're not going through someone's phone, but we collect feedback from the CEOs that people partner with. And then we also internally have a sense of this. And so what we do is we score each other one to five on these dimensions. So it's not like, I know, hey, you're six hours. There's a 360 going on. Yeah, exactly.
There's another one around domain leadership, which is, are you—we do a lot of internally at Greylock, we do these things called sector reviews. Two to four times a year, we present internally on, okay, if I'm covering AI applications, what do I think is going to happen in the next 12 months? And then we look. Oh, wow. And we're like, hey, Jack. Your idea was terrible. Yeah. Did you actually understand what's happening in your domain? Oh, it turns out all of CRM was reinvented and you were asleep. That's not good. That's not me specifically. No, not you specifically, Jack, but in the abstract.
That's interesting. So you basically make people write down what they think is going to happen.
What we have people do is build a point of view on what's going to happen in their sector, present that point of view to the partnership. We debate that, and it drives a lot of good things. One is it forces the person to be proactive. Two is it drives a prepared mind in the entire partnership. Because now if I know that, for example, we're very interested in service management and IT service desk and disrupting it with AI, and so the next time we meet a company that's doing that, there's a prepared mind. It's not just the two or three partners who are pursuing that, but all 11 of us know that this is a red-hot area.
You've thought about the space. You've thought about the wedge. You've thought about what are the weaknesses and the competitors? Yeah. And so that's what enables you to decision quickly. Yeah.
But still have rigor. And then there's the accountability piece, which is, okay, were you focused on the right themes in your sector? And if you weren't, and that consistently is the case, then how can you be a leading investor in your domain? So that's another input that we would measure. Another one we care a lot about is, did you do things that were impactful to the firm independent of your own personal investments? So, for example, you helped us recruit someone amazing. Corinne, who you obviously know well as well, helped build the Greylock Edge program, which is a formalization of all the company initiation. And she has change agents.
Yeah. Those are amazing initiatives. Are those directly responsible for an investment Corinne's worked on? Well, now they are, but those were in the service of the firm, not in the service of Corinne as an individual. Yeah. So we look at all these dimensions, and then another thing that's interesting and I think could be controversial is if someone has good outputs, but no inputs, that's also not a fit for our system. Because it's luck.
Because we can't be convicted that they're going to reproduce the outputs. Right. You have no reason to think it'll happen again.
Yeah. Okay. I want to ask you a little bit about incubations, which I know you call initiations, but Greylock is extremely good at starting companies. We were talking before about this, but you've had several that are really big, like Palo Alto Networks, Workday. People maybe don't realize that those were started—I don't know if they were started in your offices or with your partners, but they were Greylock incubations more or less. Can you talk about, first, why is it so hard? Because so many VCs do try to do them, and there's not that many good examples of them working, even though there's lots of attempts. So why are they hard?
Yeah. By the way, as you were speaking, I was reminded that Palo Alto and Workday both started at Greylock in the same year, in the same office, 2005 San Mateo office. And Anil, obviously, and Dave Duffield started Workday. Nir Zook started Palo Alto. She wrote the first check, was on the board for 18 years. I think it just rolled off recently. And these are $50 billion to $100 billion companies.
I think Palo Alto is a $140 billion company. 140. Workday's, I don't know, between 50 and 100, right? These are big businesses, right? And by the way, we've started—we've been a part of starting—Abnormal, Sumo Logic, which went public, several companies. You've made the joke of, we don't use the word incubate, but we actually don't like that word. And the reason is, it comes back to who is the core of the company? Is it the founder or is it the VC firm? It's the VC firm, obviously. Cut. Go ahead.
And our view is, to state the obvious, it's the founder. And really the way I think about it is there's a spectrum, okay? And on one bookend, you have a company that's in momentum, $5 million of ARR, raising a Series A or Series B. And on the other bookend, you have a person with no idea, right? And what we want to do is we want to intersect people as close to this left bookend as possible. Now, in some cases, they literally have no idea and we co-developed the idea together. There are cases where they have an idea, but there's no team. There are cases where they have a team, but no product. And I was checking this over the weekend: in our current fund, billion-dollar vehicle, we're about 80%, 85% allocated. 93% of our dollars are in companies where we back them at that stage, like we were the first institutional capital in the company.
And then our approach does not necessarily vary a lot based on whether or not we develop the idea or we just partner with someone post-idea and really help support them. So I think that's the kind of area we're focused on. And then I would say the founder is the core. And then we're very focused on taking out the market risk before the company starts. And so we think about things in—and actually this is a model Ashim, I think, has perfected in his investing career, and I and others have learned from—which is, when you think about a company, you could think of two broad vectors of risk. There's market risk and there's execution risk. And what we want to do is pick opportunities where there's zero market risk and actually a lot of execution risk. Because in the execution risk, you build your moat, products are hard to build, there's real technical IP, it's hard to take to market. So if you believe that the founders you back, and the teams that are built around them, are going to be the best executing, it's actually good for there to be execution.
All you need to believe is that they can do this hard thing. Correct. But you don't have
very focused on taking out the market risk before the company starts. And so, we think about things in, and actually this is a model Ashim, I think, has perfected in his investing career, and I and others have learned from, which is, when you think about a company, you could think of two broad vectors of risk. There's market risk and there's execution risk. And what we want to do is pick opportunities where there's zero market risk and actually a lot of execution risk. Because in the execution risk, you build your remote products hard to build, there's real technical IP, it's hard to take to market. So, if you believe that the founders you back, and the people, the teams that are built around them are going to be the best executing, it's actually good for there to be execution. All you need to believe is that they can do this hard thing. Correct. But you don't have to wonder if it's done, whether it'll be valuable. Correct. And not just, will it be valuable, but then there's a lot of nuance, okay, who's the end customer you're selling it to? Can that customer base be serviced by go-to-market motion, that sort of unit economic attractive? How secular is the area? What are, there's a lot that goes into no market risk. But if you look at these Greylock, these companies Greylock's been a part of either helping initiate or from very, very early, they all have a shared DNA, which is, they have unbelievably customer-centric founders, and are a place where there's very little market risk, right? Workday, replatforming HRIS for the cloud. Palo Alto Networks was, by the way, when Palo Alto Networks started, there were 10 or 11 firewall companies. It started as a small add-on to the firewall, then displaced the firewall. Today, it's a, it's a, firewall is a small part of their business. Yeah. When we started Abnormal, AI-based email security company, there was $2 billion of email security TAM and two public incumbents. There was no question that if we delivered a new innovative approach that could solve these more advanced social engineering attacks, there would be a business. The question was, could you build an AI machine that can actually detect these attacks? Could you actually scale? Those are the shapes of opportunities we look for. And I think many other firms, they try to operate at that stage, they make two fatal flaws. One is they view themselves as the core of the company. And by the way, I don't mean that in a trite sense, but one example of that is they do investments that are not economic. They're like, I'm going to take half the company, I'm going to take 40% of the company for $10 million. It's too much. You're not going to get the best founders. Yeah. We view it as we want to market fair up, we just want market terms. Yeah. We might write a bit more capital. And so maybe we'll get a little bit more ownership, but if we're working together, you should view the investment proposal as a fair proposal. Yeah. And why do we care about that? Because the most important thing is the founder and the founder quality. And so if you have any negative selection skew in the founder, you're in trouble. And so I think that's one huge mistake. And almost all the firms that try to do this kind of fail on that. And then the second is, I think they pick areas and ideas where it's less deterministic. And so you can't engineer your way to success the way that you can when you pick these markets that have quote unquote, no market risk. Is it a learnable thing by most firms? Or do you think actually most people are wasting their time? Is there something that is extremely nuanced about a small number of firms who are able to do this? Maybe it's you, Sutter, Founders Fund, but then you see so many other examples where people try spin wheels. I think spend a huge amount of calories on it. I think there's very few people who can consistently do this. By the way, there's the firms, including the ones you mentioned, there's also individuals. I think Zach Frankel's some version of this and he's incredible at it. Right. Yeah. So, but we could build the list. It's, I don't know, between five and seven entities. Right. I think it is very, very hard to do.
Mm-hmm. It requires the ability to detect people and have the right people filter. It requires the right market filter, which I think is very, very hard. Then it requires, okay, let's say you have those two things, right? We think of ourselves as company builders, not as investors. Right. And so in these companies, we're interviewing and helping close the first 20 engineers, the first core executive team. At Abnormal, I don't remember the exact statistic, but I think we sourced 30 to 40% of their initial pipeline to 10 million of revenue. So, we are going to go in there and be costly impactful, to come back to that phrase. Yeah.
Right. And then together, we're going to get the company to a place where now it kind of can be off to the races. That's a type of work that I think most venture capitalists don't know how to do, nor do they want to do. The thing you were saying before was that one of the reasons it's important for you to look at on-market opportunities is because you need to compare it to your initiation set. And so I guess some of the idea there is when you're working with these companies, you've got such a close relationship that you could concentrate like crazy in them, but you need to still make sure that you don't get just so attached to the company. Is that the idea?
Yes. And also I think, again, it would be very arrogant for us to say that we are going to intersect all the best founders of this generation before they've started companies and get the chance to work with them from the foundational stage. And so if you believe that's not true, it's definitely, definitely won't be true. Then how do you know if the person that you're working with or the company you're backing on a relative basis is likely to be one of the best in this vintage? The only way you know is if you've met other companies and other opportunities.
And we don't start with a we want to initiate a company mindset. We start with a we want to back the best founders in the best markets mindset. And if we do zero initiations, amazing, because they take a lot of time and a lot of work.
Yeah. But what ends up inevitably happening is we meet some founders who are off and running with great companies. We back them and we help them. We take the same mindset that we take very early on. And we end up meeting some situations where wow, this person and this idea is better than anything we've seen this year. And yeah, it's really raw, but we're going to really dig in and go do the work. And to your point, because we build that intimacy, we can put a lot of capital behind them. We're working on investment right now where we're writing a $36 million pre-seed check, right? I mean, we've, in this fund alone, we're in multiple $20 to $30 million checks behind an individual with no code and no idea. A general sense of we're going to go explore this area.
Yeah. And prepared mind, you know the area well, I'm sure. Exactly. And they know the area well. And often they might come from the domain. And you know the person previously, probably. Either we know them previously or we've spent real time to get to know them. Mm-hmm. And we intimately understand them at their core. Which is really hard to do in a market process. Like in a, I'm fundraising, I have two weeks to make a decision. You just can't do it really.
No. And actually I was reflecting on my personal investments and, and we do portfolio reviews at Greylock and we happen to be in the middle of one now. And so looking at the fund's investments, disproportionately our best investment, not all, there are good, there are actually a couple of very key exceptions, but for our seed-stage or pre-seed-stage investments, I'm not talking about things in momentum, our best investments are when we've gotten to know the person over very long periods of time. Makes sense. And either we've backed them before, we've had teams where they're on their third company that's been Greylock-backed, they've worked at our companies before, or they're just people in the industry who there was mutual respect and liking and understanding. And I do think that's one thing that
I have two weeks to make a decision. You just can't do it, really. No. And actually, I was reflecting on my personal investments and investments. We do portfolio reviews at Greylock, and we happen to be in the middle of one now. And so, looking at the fund's investments, disproportionately our best investments, not all, there are actually a couple of very key exceptions, but for our seed-stage or pre-seed-stage investments, I'm not talking about things in momentum, our best investments are when we've gotten to know the person over very long periods of time. Makes sense.
And either we've backed them before, like we've had teams where they're on their third company that's been Greylock-backed. They've worked at our companies before, or they're just people in the industry who there was mutual respect and liking and understanding. And I do think that's one thing that delineates Greylock relative to other firms. We care a lot about the people we go into business with. And these people also become some of our closest friends because the relationships are so intimate that it's just hard to overstate how deep these connections become. And as such, really understanding the person at the core is very, very important.
As you look around 2026 and next year, and you think about where there's alpha in venture right now, we've got obviously all the dynamics with AI behind us. We've got firms getting really large, got some that have chosen to stay small, you've got new entrants, you've got some of the big platforms that seem as dominant as ever. What do you think are the strategies that you bet behind? Let's say you're an LP. Yeah. What strategies do you believe in right now, or setups do you believe in?
Yeah. So I'll give you a couple of frames that I think about. One is, are you a market maker or are you a market taker? Right. And by the way, market maker doesn't mean you create something, but it just means, did you create some proprietary opportunity, or are you part of an auction process? And I'd say if you're a market maker, there's structurally more alpha than if you're a market taker. And we talk about this in our friend group. We have this first money and last money. The barbell. The barbell. Let's talk about the barbell. What's the barbell?
But I think there's truth to that, which is, where are there real market makers in the current era of venture? One is the people who are investing at the start. And it doesn't mean you initiate, but you invest at the start. There's nothing there. You stake a lot of capital behind the person. I think there's also something at that front of the barbell where you take something that's really raw and you make it unraw. And the first person to turn those ingredients into something that looks like a meal. Yes. There's a huge jump that happens.
Yeah. Actually, a friend of mine gave me this analogy to venture, that part of venture connected to movie production. Right. And it's like, okay, there's the founder, there's the talent, there's the customer. Yeah. Right. There's the capital. Yeah. And that whole thing has got to sync. And when they're all disconnected, the whole price on that situation is way lower.
Correct. And often you're doing contrarian investing in the sense that that's not something that goes to 10 firms and gets eight offers. It's also very easy to write that situation off and just think, oh, there's nothing there. I'd rather wait for some data. It's like, okay, now you're going to pay seven times more. And by the way, this is not a sad note, but I mentioned we do these competitive reviews, right? So we were doing one two weeks ago, and we saw all these great investments that we didn't make, but we saw them. And our number one takeaway was we met things when they were too raw.
Mm-hmm. And by the way, often we invest when it's very raw, but even still, I'd say Greylock is really oriented towards the raw stuff. And still, that's where you make a lot of mistakes. Yeah. Because it's like, the person met us, we just hated the area they were in. Mm-hmm. And then we never followed up. And six weeks later, of course, they're a smart individual. They're like, yeah, that area sucks. And they moved to a great area. They moved to a great area. And now it's great. And now it comes back to us for Series A. Five times the price. Nine times the price.
10 times the price. Yeah. So I think that's one place where you can be a market maker. I actually think the other place is the last money in, in these really late-stage private rounds where, to price a round, you have to write a billion-dollar check. The Thrive rounds. Thrive is doing a great job here. Founders Fund, Green Oaks, right? Yeah. Yeah. Again, they're market makers. They construct the round, they bring it together, they set the price. Yeah. And there's alpha on that. Well, simply by virtue of there not being many competitors who can create those rounds. Correct. Correct. So it's like one's driven by scarcity at the big end. Yeah.
And then one's driven by squinting at the early end. I'd say both also have an element of capability. On the late-stage stuff, it's like, do you have the capability to look at something at a $50 billion price and imagine it being a $500 billion company? That's not easy. By the way, also, I think a lot of people think that they're just YOLOing these checks, and they're doing deep work. Exactly. Yeah. No, they're incredibly high-conviction, high-bigger investors. Yeah. And then on the other end, it's just like, do you have the capability to take this person who's a 24-year-old engineer and partner with him or her and help them shape the company? For sure.
A lot of people don't have that capability. Or the patience. Or the patience. So I think that's one sort of source of alpha, be at one of those two bookends. Yeah. The other, I think, consensus approach right now, which I think is bad for founders and I think will net lead to worse returns than the prior, but still could lead to decent results, is the indexing model. Mm-hmm. Where you just do a— Yeah, I'm going to do 80 investments. Yeah. Or I'm going to do 100 investments. Catch something. I'm going to catch seven or eight. I'm going to track these things ruthlessly. I'm going to concentrate a lot of capital on them. Mm-hmm.
Write off the others. If the founder calls me, I'll pick up. But otherwise, I don't have anything to do with the business. Yeah. That probably, I don't think it's going to generate 5x, 8x, 10x funds. Yeah. Could that generate 2x, 3x, 4x funds? Possibly. So you just believe early, late, for the most part? For the most part. But then, we were talking about this before the show, it's funny, right? Because there's all this discussion, and you've done an amazing job of bringing a lot of these viewpoints to life on the show. Say a little bit more. At some level, it's just like, you get judged by what you invest in. Yeah.
And if you're in a fund and you've got a few great companies, none of this stuff even matters. Yeah. And it's like, there's so much discussion. Oh, this firm lost this partner, this transition, whatever. For sure. And it's just like, what was in the fund? Yeah. It's just like, okay, great, but they were in four great companies. It's actually— They worked really hard on those companies. And they had an amazing fund. Yeah. How close do you think the connection is between performance of a fund and perception of that firm at that moment in time? Well, I think it depends on what circle of perception, right? I think in the ex-zeitgeist— Yeah. I'll say that one.
I think it's very— Like nearly nothing, it seems like. I think there are the classic big brands that generally aren't going to do well, but I think it's very loosely coupled. And by the way, another, I mean, whatever. For sure. And it's just, what was in the fund? Yeah. It's just, okay, great. But they were in four great companies. It's actually- They worked really hard on those companies. And they had an amazing fund. Yeah. How close do you think the connection is between performance of a fund and perception of that firm at that moment in time? Well, I think it depends on what circle of perception, right? I think in the kind of ex-zeitgeist- Yeah. I'll say that one.
I think it's very- Nearly nothing, it seems. I think there are the classic big brands that generally aren't going to do well, but I think it's very loosely coupled. And by the way, another, I'm stating a very obvious fact, but it's also, okay, cool. You're in all these logos, but how much do you own and at what price? Because not all these companies are going to be a hundred billion dollar companies. Yeah. So yeah, you got into this great AI app, but you got in at a billion dollars and you own six percent of the company, and 10 years later, it's worth 4 billion and your fund is 2 billion, and you've been diluted, so now you own 5%. Yeah.
And so you made $200 million on a $2 billion fund. It's not great. It's not great. Do you think in general that venture firms, well-branded venture firms, do you think the tendency is to get weaker or stronger over time? It takes a long time to kill a venture brand, right? Because you have this brand that's been accrued through the relationships that you've built, and there's some persistence, inherent persistence, in that, right? Yeah. And tomorrow, when you meet a new entrepreneur versus a brand new franchise, you have more things to rest on. Much easier.
But I still think the default trend line is one of decay. Why? Because there's this weird empirical thing that happens when people become successful: they are not willing to reinvent themselves. And reinvention can mean different things, right? It doesn't mean we necessarily radically change our strategy. I don't think Greylock has radically changed its investment strategy in the last 20 years, but we have made a lot of other changes. And I'll give you one example: our team today is a lot younger. It has skewed young. Versus 10 years ago or something. Versus 10, 15 years ago. One big reason why is the world's changing very quickly.
A lot of companies are being started by younger people. I think that in this AI era, first-principles thinking and approach to company building is in some ways more important than experience. So you have to have a team that can meet the entrepreneurs where they are and also support them where they are. But we're not afraid to go make that change to team composition, or we're not afraid to say, hey, we have a new partner and yeah, they haven't had some huge win yet, but the inputs are amazing. And so we're going to empower this person to do more and more. We almost preempt our own talent, if you will. Yeah.
I think that enables us to stay very relevant and not decay. But I think at many firms, that's not what happens. Totally. It's also, you have to keep almost a deranged paranoia, despite the fact that you're objectively winning all the time. Think about if you're Sequoia, let's just take it as an example. They're, in most cases, able to see and win everything, but they still somehow have this maniacal paranoia that we're only as good as the next thing. I think it's really rare.
And it's absolutely necessary because this business is defined by a small set of decisions every vintage. I would take the bet that if you took the top firms, every vintage they see and truly see, they're in a position to win enough things to have a 10X fund. Yeah. But many of them don't. And so something between the top of the funnel and the bottom breaks. And so if you're not super paranoid that the default is that's going to happen to you, and so what are the new lenses you need to take on picking or on appealing to entrepreneurs or on supporting, and that's going to change every era, you're more likely to make the wrong-
But it's also a crazy thing where if you're, let's say, seeing 90% of the market, you still need to get upset about the 10% you didn't see versus being like, oh, this is amazing. We saw 90%. We could have a 30X fund contained in here. Yeah. Well, that's great. If you saw, in this last period, if you saw everything and you didn't see the early rounds of OpenAI and of Anthropic, you missed a lot. You missed a lot of potentially venture gains in this period. And you could have seen all these other great things. And by the way, a lot of these other things will be great. But it might be that those two companies end up being a lot of-
Just funny. You and I were texting about this last night, but we looked at who were the top firms in the year 2000. You recognized them. I didn't recognize most of them. It's crazy. And so it's basically a game of how do you, for you, I'm sure you're thinking about this, where you've got this storied history and the features, we've got these advantages. And the way I see it basically is if you're an existing brand with application of force, you're better off than somebody who doesn't have the brand. But there are all these things that work against you naturally too, just over time.
Exactly. And so you have to be willing to change everything about how you work. And so for, we moved the firm HQ to San Francisco because that's where the AI era is. It's not in Menlo Park. We have partner meetings multiple times a week. We can make an investment decision without bringing an entrepreneur into a full partner meeting. I think if you interacted with us, you would feel like you're interacting with a brand new firm and the speed and velocity and that we work. But then it rests on the foundation of all the learning, experience, institutional knowledge, network relationships of the companies we've been a part of. Okay, I want to talk a little bit about some other aspects of the firm.
So I asked you this morning about portfolio services. I said, do you think that most portfolio services at venture firms work? Nah, not really. Do Greylock's work? Yes. So can you explain to me why, first of all, why do you think they don't work that well? Yeah. What do you do to make them work? Because I agree. I take the view it's rare that they work, is my perception. Well, you didn't work with Greylock. I haven't worked with Greylock. It's a mistake. It would have been special to work together. Maybe it's not too late. Yeah. Are you going to start another company?
Yeah. You can be on the board of Altcap. I'd love that. I won't name the firm, but one of the major firms that invest along portfolio services once asked me a question. I was catching up with someone there, and they're like, do you view portfolio services as in service to the company or in service of marketing for the firm? Yeah, exactly.
I was like, obviously the former. And they were like, you're thinking about it absolutely wrong. It's only marketing. If I have all these people running around and doing these services, I'm doing them because I want to convince the next entrepreneur that I will be able to help them. By the way, it's also I want to convince my LPs that we are scaling and it's appropriate. Exactly. It's both. I think, again, it comes back to what's the ethos, and do you view it as marketing or do you view it as, I'm going to go create value for the founders I'm in business with?
Yeah. And I'd say for us, we view it as the latter, not the former. And that changes everything about how you approach it. I'll give you a couple of examples about how we do it. One is we call them specialist teams. They're not portfolio services. They're specialists because they're extremely good at what they do. Like Glenn Evans, who runs our and doing these services, I'm doing them because I want to convince the next entrepreneur that I will be able to help them. By the way, I also want to convince my LPs that we are scaling and it's appropriate. Exactly. It's both. I think, again, it comes back to what's the ethos? And
do you view it as marketing, or do you view it as, I'm going to go create value for the founders I'm in business with? Yeah. And I'd say for us, we view it as the latter, not the former. And that changes everything about how you approach it. I'll give you a couple of examples about how we do it. Right. One is we call them specialist teams. They're not portfolio services. They're specialists because they're extremely good at what they do. Glenn Evans, who runs our engineering recruiting, ran all of recruiting for Slack. And before that, infrastructure recruiting for Meta in the heyday. Right. He's got a team of amazing recruiters, right? We have the same and exact.
And so we treat people like first classes, and they sit in our weekly partner meetings. They're a key part of every firm decision we make. And so there isn't this first-class, second-class culture. I tell our team that I would not be successful as an investor if I did not have the specialist support I have across recruiting, customer development, marketing, and the rest. So that's one dimension, which is just how do you actually approach them? How integrated are they into the firm? And then the second is what's the impact they go have, and how intimate is the relationship they go build? And so, for example, I
don't want to create a commercial for our specialist team, although I'd be happy to if you let me. We'll chop this in post. Yeah. Yeah. But the level of, we measure the impact, just like we measure the inputs, we measure the impact very quantitatively. By the way, we measure things like how many engineers did we place at our portfolio companies? We backed Resolve when it got started last year. In the last 14 months we've been in business with them, we've placed 19 engineers. Can you make more progress with a company early in its life? Exactly. So it is also connected to the strategy. Yes. And actually the way I, the mental model I use is we're an Ironman
suit. You, as a new founder, don't have any of your own machinery. You plug into our Ironman suit, right? Yeah. Now we're recruiting for you. We're helping you find customers. Right. By the time I'm 100 people, I have my own recruiters. I've got my own sales team. Exactly. And so that actually informs how we prioritize our talent, our resources, which is we're not spending time on the late-stage companies. I mean, we will on a very high-leverage thing. You're hiring a CRO, that's high leverage, but 90% of their effort is on the companies that are just getting started. And if I can help that company get into the Capitol river faster, that's a huge win for the
company, is a huge win for us. Can we talk about the Capitol river? What's the cap? Yeah. What's the cap? So you and I have talked about this, but I think it was my friend, Kevin Kwok, who first gave me this analogy. I hope I'm not mass attributing, but one way to model what's happening in venture right now is there's this river, and there are companies that get into the river. And if you're in the river, the current's behind you, and everything is flowing. Every six months, you have the ability to raise capital at three times your last price. That more capital enables you to hire better engineers. They come to you because your
valuation's higher, you're perceived as a winner. That enables you to build better product, which then gets more customers, which enables you to raise more capital, and all these things. As a new company, you need to get into this river. And by the way, it's this really funny dynamic because in every category, there's 10 or 12 companies wanting to get in the river, and companies three, four, five are super pissed. And they're like, why am I not in the river? That company has less AR than I have. You think the river company usually wins? I've changed my mind on this. Five years ago, I did not believe that to be the case. I don't think
it will always be the case that it's the case. I think we will look back in 10 years, and there will be ones in the river that— But the river helps. I think it helps a lot. So do you believe in these game-making rounds? Is that a thing that works? Again, works is not a binary, and you don't mean in a binary sense, but— Yeah, no, no, but I mean, is it— Would you say that's a third bucket? We talked about the initiation. We talked about the far end of the barbell. Would you say that there's the people who can put you in the river, whether it's at series A or B or whenever it is? Is that another moment that you would count?
It depends on, it's interesting. Part of me says yes, because the argument for yes would be if I'm the firm that does that king-making round and now that company's— There's a pricing advantage. Then there's a pricing advantage on downstream. Yeah. But then the flip is are those firms getting real price alpha when they're doing the king-making round? And I think in some cases they are, and in some cases they're not. And it connects also back to what's the terminal outcome size for these businesses. It's probably a minor source of alpha, but I'm not sure. I think it's way less alpha than the prior buckets we were talking about.
And also because I think there are many firms that can do the king-making. You're like five probably, right? I would guess it's closer to 10 than five. But yeah, it's in that range, right? And what typically happens when these companies get king-made is all of them compete, and then no one gets picked, and then the ones that lose, they do the next round 90 days later. It's kind of funny, to your point, because you're right. There's probably 10, not five. So once one happens, someone else is like, well, I can do it too. Exactly. And then maybe you get two or three happening. And that's why in most categories, you should expect there will be two to three companies
in this quote-unquote river. Yeah. But the reason why I bring it up is I think if you're a new founder, and then also you do seed investments, we do a lot of seed pre-seed work, you do need to get into the river. This connects full circle back to the specialist team, which is okay, well, what's one of the things that leads to companies getting in the river? I believe it's a slope of early customer adoption and quality of customer taste, right? It's like if you're building a new applied AI company and you get Notion and Cursor and Figma to use your product, the odds of you getting in the river are much higher. I think the logo quality matters so much.
If I, as your investor, can go help make that happen, because Figma is a portfolio company, then I can meaningfully dent the odds of you getting into the river. Same with strong talent. Okay, if you go hire a bunch of really strong AI folks out of DeepMind or Open, it's hard to do, but if you can get that talent into the business, there's a perception that you're likelier to build a winning product and therefore likelier to get in the river. There's all these subtle things around company design that you've got to get right in that first year. And if you get them right, the trajectory, even though the business doesn't look that different yet, it's not yet in significant
revenues or anything like that, the underlying foundational architecture of the business is set up to be massively accelerated by getting in this river. How do you read these companies that are having these wild revenue ramps and obviously those correlate with this river, but you also see forget the capital. You see these companies going zero to a hundred in no time. I know you've never, none of us have ever seen this before. What is your zoomed-out assessment of the situation? I think that you have to really decompose these businesses into their underlying components and then measure their revenue and think about their revenue in that context.
you've got to get right in that first year. And if you get them right, the trajectory, even though the business doesn't look that different yet, it's not yet in significant revenues or anything like that, the underlying foundational architecture of the business is set up to be massively accelerated by getting in this river. How do you read these companies that are having these wild revenue ramps and, obviously, those correlate with this river, but you also see just, forget the capital. You see these companies going zero to a hundred in no time. I know you've never, none of us have ever seen this before. What is your zoomed-out assessment of the situation?
I think that you have to really decompose these businesses into their underlying components and then measure their revenue and think about their revenue in that context. So, for example, one misnomer I see happening a ton is people saying, oh, this company is going zero to 100. We've never seen that happen before. And that's true if you think about it as an enterprise company. What if you think about it as a consumer subscription company? There are many consumer apps, and when Facebook Marketplace got started in the App Store, went live, there were many consumer utilities that went, I don't know about zero to a hundred, but zero to
tens of millions of quote-unquote ARR very, very quickly. But they were not ARR businesses. They were monthly recurring businesses. They have very low gross retention. The very reason they were able to grow so fast also was an underlying weakness in the business, which is low switching costs, very easy to adopt. You can swipe your credit card on a monthly deal. It's a low price point. And so when I look at a lot of the companies that are growing on these really terrific revenue ramps, I think there's a lot to be excited by. And to be clear, I think some of those companies are going to go on to be exceptional, right? But I also think you have to
look at it with a lens of, is it that the very reason why you're growing so fast actually implies that you don't really have long-term stickiness, product depth, high net dollar retention? And I think for some of these companies, that's going to be the case. And the reason why I'm trying to get this message out is I don't want us as an ecosystem to warp our perception of success. I'll talk to candidates, right, who are interviewing at one of our portfolio companies, an enterprise portfolio company that's going from 4 million to 40 million or, let's say, 4 million to 30 million. And they're like, oh, but this other thing went zero to 100. It's like 4 to 30, strong. The
candidate's asking me this, and I'm like— Like 4 to 30 is unbelievable. It's, it's, and by the way, this is, you're selling to enterprise, high gross margin. We didn't even talk about gross margin. A lot of those businesses don't have healthy margins today. High gross margin, high net dollar retention. It's amazing. It doesn't mean necessarily that the zero to 100 is not also amazing. They're just different businesses. They have different shapes. And so I would suspect when we look back a decade from now, and we look at the mega winners, let's say in the AI application category, there will be some that will have been these zero to a
hundred to billion dollars kind of things. Some of those will also peter out very quickly, right? But there will be many, the modal outcome, if you will, will be things that, let's say in the past, when you were building Lattice, a great ramp was one to four to 12 to 25. Maybe that's now one to 10 to 30 to 75. That's way stronger. If you play out that curve, that business is worth a lot more, but it still looks like the laws of physics still apply to it. It's going to be interesting because a couple of years ago, there were a bunch of these AI apps where you're like, these things are promising, but not that
many things have made it to 10. Then it became another, they've made it to 50, and it's moving up. It'll be interesting to see how many of these actually make it to 500 or a billion and are still growing at these rates. I suspect it will be a lot more than they've ever been in the past. It's just giving me a new, interesting thing. I also have the positive view, but I'll give you the counter for a second. I'll come back to the positive view. So what's the mistake we all made in 2021? Many. Many. So one mistake we made is we took growth rate to mean growth rate durability. And these are two different concepts. A major venture firm wrote this piece in 2021. And I
think listeners can go look up the piece. It was something like 100X ARR multiples are not actually expensive. And the core argument in the piece was very reasonable, which is if I'm investing in a company that, let's say, grew from one to five, so it grew 5X, and let's say they're projecting 3X the next year and 3X the following year, then if I'm paying a hundred times today, I'm only paying 10 times in two years. That's a cheap price. And they're right. But then the question is, how many companies that went one to five actually go five to 50 in the next two years? And even the more interesting question is how many companies that got to 50 get to 500,
and how many companies that got to 500 get to five billion? And I think what happened in 2021 is there was this pull forward of demand because of digitization, all this stuff. And you remember all the video conferencing-related tools. They were growing at unbelievable rates, but they very quickly saturated the market demand. They pulled it all forward, and then growth fell off a cliff. It's like everybody who was interested in them heard about them at the same time. And so all the demand got expressed immediately. Exactly. So now connect that back to the current moment in time. Why are these businesses growing so fast? Maybe it's the same reason, but with AI.
One view would be, okay, and I'm just going to, I love these companies, I'm just going to pick on a sector. If I'm a law firm, the managing partner of the law firm has probably come and said, we have to buy an AI solution this year, right? AI is going to transform business. All gets evaluated right away. Yeah. And everybody's buying. And these AI legal companies are growing at rates we've never seen in vertical software. But now the question is, okay, cool. So they get to a hundred, they get to 200, they get to 300. But are they going to go from 300 to 3 billion in revenue? Or is it that all the demand got pulled forward, everyone got their
solution, and everyone's like, we're good. And maybe that company that got to 300 really quickly now completely atrophies growth. It's an interesting thing because I think in the 2010 SaaS era, I think the common wisdom was vertical SaaS is not as likely to get huge as horizontal. And people basically were like, there's a few verticals that really go far. Veeva is a good example. For the most part, the horizontal things like Workday, ServiceNow, Salesforce, etc. go a lot further. At the moment, it seems like there's a ton of comparative interest in vertical SaaS. Yeah. I think the contra on that would be something like what you just described where
it all just gets pulled forward, but the markets aren't actually that big. I suppose the bull case on it would be something like it's easier to replace labor in specific areas. And so there's actually much more market there than there ever has been before. Exactly. And again, these things are not binary. And so the question to me is not, is it great to—I think there's going to be amazing outcomes in legal AI, just to be clear. Now, are they going to be $3 billion revenue businesses, $5 billion revenue businesses, $10 billion revenue businesses, $1 billion revenue businesses? I think the jury's still out. And
the pro case, the constructive case, would be labor replacement, labor goes to software, the TAM's much larger. A firm doesn't pay you $100,000 a year, they pay you $3 million a year. Correct. And the early price points actually support the bull case. Yeah. And the contra case would be there's this pull forward. Also, these companies are overearning, because right now people are not discriminating their spend. But at some point, Exactly. Again, these things are not binary. The question to me is not, is it great to—I think there are going to be amazing outcomes in legal AI, just to be clear.
Now, are they going to be $3 billion revenue businesses, $5 billion revenue businesses, $10 billion revenue businesses, $1 billion revenue businesses? I think the jury is still out. The pro case, the constructive case, would be labor replacement. Labor goes to software. The TAM is much larger. A firm doesn't pay you $100,000 a year; they pay you $3 million a year. Correct. The early price points actually support the bull case. Yeah.
The contra case would be there's this pull-forward. Also, these companies are overearning because, right now, people are not discriminating in their spend. But at some point, the comparison is not going to be the cost of the paralegal. It's going to be the other AI solution that's willing to do the same thing for half the price. By the way, software pricing has never persisted based on labor. No, and based on cost. Always. Yeah. Email's free. Yeah. What's the value of labor that email has replaced? Yeah, a lot.
Now, I'm picking an extreme example, but it's not obvious to me that all these companies are going to—right now, it's great because their ROI is so strong relative to human labor. But at some point, they're going to have to rationalize their ROI relative to the next best software alternative. By the way, here's the mega bear case. The mega bear case is software's cheaper and cheaper to build. There's less product differentiation. You'll have 50 companies all doing modulo the same thing. Pricing will completely compress to the inference margin. Right. I don't believe that, but one could make that argument.
For sure. There are also obviously a lot of examples like Salesforce is an example, AWS is an example, where there are tons of competitors and they still maintain a lot of pricing power. And because they build true modes. Yes. And so. Some other way. Yeah. They become the system of record. They are doing something operationally that's very difficult. That's why I take the bullish view on these vertical companies, because I think these are amazing teams that are going to keep innovating and building net-new products and figuring out new things to do and keep moving up the waterline. But it's not as easy as I think the current revenue ramps imply.
Are you more excited about horizontal over the long term?
Look, I'm a student of history. The largest outcomes in enterprise software have been horizontal. A framing that Ashim often uses internally that I really like, and it's very simplistic, is the following. I think there's 1.4, 1.5 trillion of IT spend worldwide. Okay. There are 22,000 companies in the world that make north of a billion in rev. Okay. Those 22,000 companies control 93% of IT spend. If you look at the biggest businesses in the world that are software businesses, they have built products that can be consumed by most of those 22,000: Workday, ServiceNow, Salesforce, Palo Alto Networks, CrowdStrike, Microsoft 365, and Microsoft's business, right?
It's horizontal enterprise software. Horizontal enterprise software. I think, yes, there are going to be great vertical AI companies. Verticals are way better than they were in the past. But I do think the largest outcomes in this generation of software will be exactly like they were in the prior generations, which is they will be horizontal. Candidly, Jack, I feel like we're still so early, and we're just beginning to see the interesting company concepts emerge.
It's interesting. Emil Bouchery is the founder of Encel of Workday and also is a very successful partner at Greylock. He came to a partner meeting in 2017, the year after I joined the firm, and he said, sort of tritely, guys, why are we looking at horizontal software? There's no paradigm shift that will allow us to go take home the incumbents. We'd be better off just buying the public stocks of the horizontal SaaS companies, and we should actually go do vertical software, right? Because that's where, as a VC firm, there's low-hanging fruit.
I remember there was debate and skepticism, and a lot of horizontal software companies got founded. But, by the way, fast-forward the clock, you would have been better off buying Salesforce, ServiceNow, Workday, Palo Alto, CrowdStrike, in the public markets. That basket would have done better than any horizontal startup SaaS basket at the time. Because it turned out that either people were building things for SMB, they were building niche add-ons, but no one really could go build a disruptive core company.
Now, fast-forward. I was with Anil at a Warriors game in spring of 2023, and his advice to me and Greylock was, now's the time to go do new horizontal things. Why is it the time? Because it's the first time since 2005—Palo Alto and Workday get started at the start of the cloud boom—where you have the confluence of three things that need to be true in order to build new disruptive horizontal companies.
One is there's a new pricing model, right? You went from on-license to SaaS to, now, outcome-based pricing. The second is there's a new abstraction or unit of value for work, because now you can actually complete end-to-end tasks. So you're selling something very different than workflow software that's used by people to complete tasks. Then the third is the data model is different, right? When you went from on-prem to SaaS, you had this multi-tenant elastic architecture that could support new use cases. In an AI world, why does the entrenchment of the system of record even matter? Salesforce has this whole schema that they think about customer objects with. The whole world is standardized on that schema. I'd argue that gives them a lot of defensibility.
Why do you need that anymore? Why should you as a CEO go hound your reps to update their account information in Salesforce? I should have an AI system that integrates into email, into my granola, into—there's a recorder in the sales conversation—and it's just implicitly, on the fly, creating the data schema that I exactly need to power these cases I want. If I want to do a pipeline forecast, wouldn't it make more sense for that to be substantiated based on the texture of the actual customer conversation than what my Salesforce instance says? Yeah. The data needs to live somewhere, but it doesn't have to be in a— In a structured schema.
Yeah, it doesn't have to be structured. Exactly. But it needs to exist. It needs to exist. But I would say that a lot of what makes these systems of record that we look at today defensible is they have defined the ontology and they've done the structure. Yeah, exactly. If you want to plug in and you want to integrate with this thing, you have to match it.
Correct. That's why a whole ecosystem is able to run that. By the way, you as a rep have learned how to use Salesforce. What I would argue now in AI is it's all dynamic, it's all generative. So all of that work that you've done is no longer needed. The confluence of those three things means you can go after CRM, you can go after service management, you can go after observability. By the way, there were head fakes. You remember when mobile started, right? There were these mobile CRMs, but none of them became large because mobile was just a UI on top of the existing model. There's no change in pricing, no change in data model, no change in atomic unit of work. I think with generative AI, that's all changed.
I think we're going to see really, really large horizontal companies get founded that we'll look back on in the decade, that were founded in 2025, 2026, that went after these large markets, sold to everyone in the world. That's how you'll build 10, 20, 30 billion-dollar revenue businesses and multi-hundred-billion-dollar market cap application businesses.
To wrap up, I thought it'd be fun to go into some other not-exact venture topics. I think our friend group is a very big part of our lives, and hopefully I'll get everybody to come on at some point. We already had our boy Greg Rosen. We'll get everybody. But how have you thought about that? Obviously, 99% of it is about the personal joy of the friendships, but many of us are in venture. We're all in tech. How do you think about how it plays into your professional life, if at all? Has it surprised you in any ways, or what has it sort of
And that's how you'll build 10, 20, 30 billion-dollar revenue businesses and multi-hundred-billion-dollar market cap application businesses. To wrap up, I thought it'd be fun to go into some other not exact venture topics. I think one, our friend group is a very big part of our lives, and hopefully I'll get everybody to come on at some point. We already had our boy Greg Rosen. We'll get everybody. But how have you thought about that? Obviously, 99% of it is about the personal joy of the friendships, but many of us are in venture. We're all in tech. How do you think about how it plays into your professional life, if at all? And has it surprised you in any ways, or what has it been like for you?
It's funny, right? Because there's this whole concept of venture friends, which are not friends at all, or these transactional relationships. It's acquaintances, and you see them periodically, but it's not like. Exactly. And that's the thing about the venture business, social and professional are so overlapping. Yeah. And the thing that I find so remarkable about our friend group is it didn't start at all around a work pretext. It started purely around personal joy of spending time together. Coincidentally, most of the friend group is investors. And we're all very different in the way we practice the business. Yes.
But, and then we spend too much time together, right? And for me, I think one of the things that I really appreciate about it is it's really rare in life to have people who have high context on your work but truly want to see you win. There are people who truly want to see you win but don't really understand the true nuances of your work. There are people who truly understand the nuances of your work, but they don't necessarily, they might not want you to lose, but they don't really care if you become the best version of yourself. I think what's so special about our crew is we all know each other super well. We make fun of each other continually. Yeah.
And we push each other to be the best version of ourselves. And I'd say I can certainly point to moments where I've made decisions because you or Greg or Brett have pushed me to be more ambitious or to expect more of myself. And I feel like vice versa. I think that's true for you. Totally. And that's a very, very special thing. Yeah, totally. And by the way, that is a little bit how old-school venture worked. I think if you rewind the clock to the early 2000s, there was a lot more friendship and collaboration in the venture business. Yeah. And there were pockets of true friends. They would work together. They would push each other. They'd play golf together.
A little bit of that.
Yeah. We got a little bit of that going. Well, it's funny, because there's this group that we spend an inordinate amount of time with. And then I do think there are venture relationships where Greg made this point when we did the podcast, where he was like, it got really hard to have any sort of relationships at the peak of COVID. And now you're back to a zone where you can have these relationships up the stack. If you're a Series A investor, you've got these preferred relationships at Series B and so on. And some of that exists, but there's still this different thing, which is very lucky to get in adulthood, where if you have people who are thinking about your own life, they care about it like your family or something like that. It makes a huge difference.
Makes a huge difference. Yeah. And I think particularly for people who spend most of their time working, I'm thinking when we went to Santa Barbara with our families for a couple of days, I mean, we spent a lot of the time talking about work-related topics. Totally. And I think it's so unique to be able to have people who feel like family, but also are people you look up to and admire in a work context and learn from. Yeah. That's what we have with the crew.
It also just makes it feel light, because I think there are so many ways where work can feel really heavy in all sorts of different ways. But if you've got a group that is just incessantly making fun of everything about you and what you're doing, I actually think it's really important to get that. I value that specific thing, where nothing is too serious to be made fun of a lot. And I also think you and I talked about this once, but if you're going to work really hard for really long periods of time, maybe decades, you should laugh while you're doing it. For sure. I think humor is one of the true endless sources of joy in life. Yeah.
And if we can bring humor into each other's lives continually, it makes the work more enjoyable.
There's this funny thing. I remember when we were talking about, you wrestle with all of these things because we're ambitious people. And so you're like, what trade-offs do I have to make? I think over the years we've asked, do you have to trade family for work? Do you have to trade joy for success? And there are all these questions. There's truth in all of them, but even exploring all of those concepts, then you think about it, and you're like, actually, no. You don't have to trade joy for professional success. And in fact, I think in order to be your best, you have to have fun doing it.
I really believe that. And I think it's in the friend group, it's in the companies you partner with, it's also in your teams. Yeah. One of the things I'm most proud of is Corinne got married this summer. Every single partner at Greylock on the investment team was at the wedding in Italy. Not because they had to be. Yeah. But because it was super fun. And we spent the four days together, and we went out to meals, and we laughed, and we told stories. And the whole thing's a fund expense at that point. And it's great. Not the case. Another topic, just more about your life, that I wanted to get into is your health routine. You have a biological age in the teens. 17.6.
But you never exercise. And I'm just curious, do you want to say anything? Yeah. I think Ashim wanted me to ask you about this. To me, it all starts with diet. The number one thing, and Jack, I'm being very serious. You're laughing. Go ahead. I source food from as close to the farm as is humanly possible. Here's a good bit. Sam recently said, "I bought this unbelievable produce from the farm this morning." Where did you buy it? It turned out it was a grocery store, and they sourced it from the farm. It was a farmer's market. But I think my couple tips, and Jack, I think you've learned from this, are: eat whole foods, exercise daily. You don't do- I like to swim.
You don't. And make sure you get eight hours of sleep. Okay. That's good. What's your biological age? It was like 26. Yeah. Okay, so I'm nine years younger than you. Yeah. Okay. Anything else in the daily routine stuff that we should talk about?
Yeah. Actually, one thing that I've learned from Ashim, I think you do this, I actually think a number of people who have longevity in venture do this, is making sure you have a lot of unscheduled time on your calendar. I try to keep one day a week completely unscheduled. And then I try to keep my mornings unscheduled until 11. Because once you have a portfolio and a team, at some point in the day, your day becomes entirely reactive. And so you have to be incredibly intentional about scheduling time to do long-term thinking, long-term work, and also to give yourself the energy to sprint. Because I think this job, a lot of being good at this job, in my opinion, is very quickly being able to detect when you need to go 110 miles an hour.
Yeah. And then getting to 110 miles an hour really fast. And if you do that every single day, you're not truly at 110 miles an hour. I actually think a number of people who have longevity and venture do this, is making sure you have a lot of unscheduled time on your calendar. I try to keep one day a week completely unscheduled. And then I try to keep my mornings unscheduled until 11. Because once you have a portfolio and a team, at some point in the day, your day becomes entirely reactive. And so you have to be incredibly intentional about scheduling time to do long-term thinking, long-term work, and also to give yourself the energy to sprint.
Because I think this job, a lot of being good at this job, in my opinion, is very quickly being able to detect when you need to go 110 miles an hour. Yeah. And then getting to 110 miles an hour really fast. And if you do that every single day, you're not truly at 110 miles an hour. It's also really, keeping the open day or the open mornings is so hard. Because there's always the, hey, I'm in town for these three days. Are you free? It's like, well, yeah, I am. Yeah. But that was supposed to be a quiet time. A hundred percent. Yeah. And that, if you asked me, what have I gotten better at over the last nine years?
Because in many ways, there are many more pulls on my time today than there were nine years ago. Just better at not saying. But I'm just very good at saying no. What do you do to make sure you're still exposed to serendipity that you had earlier? Or do you think that that's just a trade and now there's less of it? I think one of the things I'm unhappy with is I do think there's a little bit less of it. And I worry about that because when I think about some of the early relationships I built, they really were so random in how they were built. Right? A good example is this week is AWS reInvent. It's my first year missing it because I have three board meetings this week.
Yeah. But there's so many random events I went to at reInvent where I met someone that four years later ended up being someone who we hired into the portfolio. Or I think I have less serendipity surface area today than I had in the past. But I try to very intentionally do things every week, every month to maintain some serendipity. One is, I try to go to at least an event every week. And then I also try to make sure I meet some founders every month who are completely out of network. And I don't get caught in the, oh, well, I have a good network now and I'm just going to meet people through very strong referrals because then you become really insular.
And I think insularity is the death of this business. You have to maintain a beginner's mind and keep the serendipity, as painful as it is to go to an event in San Francisco. It is. And actually, maybe to wrap on that topic, you, like me now as a recent father, have left the city for the suburbs. Any things about that that have hit you as reflections? The weather's incredible. That's low. It's so good. But putting that aside, look, I think, first of all, I'm in San Francisco a ton. More days than not. More days than not. I always meet founders, especially new founders, in person and disproportionately there in San Francisco.
But I will say that there's a little bit of having a clear mind that is very useful because you could spend your entire day meeting founders. Of course. And you could feel good and go home and be like, I met 12 new companies today. But the real question is, were you awake in the meetings? I mean, for me, when I finish a week where I just had a zillion meetings all week, I don't come out of that week feeling like I crushed it. I feel scrambled. And I think about the last 18 months, I've made four new investments that I'm really excited about. How many net new opportunities do you think I met in that 18-month period? I don't know.
I would suspect it's, on average, three a week. Okay. I mean, if I compare that to myself three years ago, it's probably meeting 20 opportunities a week. Now, are there some opportunities I didn't meet that I should have? Almost for sure. Right. But again, the question is, how do each of us equip ourselves to make a couple of really high-quality investments every year? I like being in the city and then also being in our mental health office and having more clarity around, okay, it's just quieter. You can think more. Yeah. And it's like, who are the people who are going to start companies in 2026 that I should go make sure I build relationships with today?
There've been a bunch of these Charlie Munger clips going around recently. Obviously, it's not the same thing as venture, but I do think a lot of what he says, you can probably apply some percentage of it where it's like, you shouldn't be chasing everything. There's very few things that mattered. You should be thinking and studying a lot and not talking all the time. Yeah. And I, you talk so much.
And I will say that going through one boom-bust cycle has really reinforced that for me because I can't tell you the number of companies I looked at in the 2019 to 2021 period where we decided not to invest and they became super hot and the valuations ran up to unicorn, and then they terminally are now exiting for less than preference now. Yeah. But it's so hard in the moment. We have newer partners who joined our team at Yarn Adventure, and it's so painful. They're like, we didn't do this and three new rounds got done. And it's like, okay, well, did the fundamentals change? Maybe we were wrong. And there are cases where we're wrong. Yeah. We underestimated the person.
Of course. We underestimated the market, but there are going to be many cases where our initial read was right. It's just going to take time for it to play out. And I mean, Charlie Munger and Warren Buffer, the best of the best at this, but how do you have that patience and that conviction in your own framework to not get caught up in that race? Because everyone who gets caught up in that race, I think, fails. Yeah. It's a great place to end it. Sam, I'm grateful for you. This is very fun. Jack, so special. What a pleasure. What a pleasure. There's a pricing advantage. Then there's a pricing advantage on downstream. Yeah.
But then the flip is like, are those firms getting real price alpha when they're doing the king making around? And I think in some cases they are, and in some cases they're not. And it connects also back to like what's the terminal outcome size for these businesses. It's probably a minor source of alpha, but like I'm not sure. I think it's way less alpha than the prior buckets we were talking about. And also because I think there are many firms that can do the king making. You're like five probably, right? I would guess it's closer to 10 than five. But yeah, it's in that range, right?
And what typically happens when these companies get king made is like all of them compete and then no one gets picked and then the ones that lose, they do the next round 90 days later. It's kind of funny to your point because you're right. There's probably 10, not five. So once one happens, someone else is like, well, I can do it too. Exactly. And then maybe you get two or three happening. And that's why in most categories you should expect there will be two to three companies in this quote unquote river. Yeah. But the reason why I bring it up is like, I think if you're a new founder and then also like you do seed investments, we do a lot of, you know, seed pre-seed work,
you have to, you do need to get into the river. This connects full circle back to the specialist team, which is like, okay, well, what's one of the things that leads to companies getting in the river? I believe it's like a slope of early customer adoption and quality of customer taste, right? It's like, if you're building a new applied AI company and you get like, you know, Notion and Cursor and Figma to use your product, like the odds of you getting in the river are much higher. I think the logo quality matters so much. If I, as your investor can go help make that happen, you know, because like Figma is a portfolio
company, like then I can, I can meaningfully dent the odds of you getting into the river. Same strong talent. Like, okay, if you go hire a bunch of really strong AI folks out of, you know, DeepMind or Open, it's hard to do, but if you can get that talent into the business, there's a perception that you're likelier to build a winning product and therefore likelier to get in the river. There's all these subtle things around company design that you've got to get right in that first year. And if you get them right, like the trajectory, even though the business doesn't look that different yet, like it's not yet in significant
revenues or anything like that, the underlying foundational architecture of the business is set up to be massively accelerated by getting in this river. How do you read these companies that are, you know, having these wild revenue ramps and like, you know, obviously those like correlate with this river, but like, you also see just like, forget the capital. You see these companies going like zero to a hundred and like no time. I know you've never, none of us have ever seen this before. What is sort of your like, zoomed out sort of assessment of the situation? I think that you have to like really decompose these businesses into like their underlying
components and then measure their revenue and like, think about their revenue in that context. So for example, one misnomer they see happening a ton is people like, oh, this company is going zero to 100. We've never seen that happen before. And it's like, that's true. If you think about it as an enterprise company, what if you think about it as a consumer subscription company? There are many consumer apps and like when Facebook marketplace got started in the app store, went live. There were many consumer utilities that went like, I don't know about zero to a hundred, but zero to like
tens of millions of quote unquote ARR very, very quickly. But they were not ARR businesses. They were like monthly, monthly recurring businesses. They have very low gross, you know, low gross retention. The very reason they were able to grow so fast also was like an underlying weakness in the business, which is like low switching costs, very easy to adopt. You can swipe your credit card on a monthly deal. Like it's a low price point. And so when I look at a lot of the companies that are growing on these really terrific revenue ramps, I think there's a lot to be excited by. And to be clear, I think some
of those companies are going to go on to be exceptional, right? But I also think you have to look at it with a lens of, is it that like the very reason why you're growing so fast actually implies that you don't really have long-term stickiness, product depth, high net dollar retention. And I think for some of these companies, that's going to be the case. And the reason why I'm trying to like get this message out is I don't want us as an ecosystem to warp our perception of success. I'll talk to candidates, right? Who are interviewing at one of our portfolio companies, enterprise portfolio company
that's going from like, you know, 4 million to 40 million or like, let's say 4 million to 30 million. And they're like, oh, but like this other thing went zero to 100. It's like 4 to 30 strong. Like the candidates asking me this and I'm like- Like 4 to 30 is like unbelievable. It's, it's, and by the way, this is like, you know, you're selling to enterprise, high gross margin. We didn't even talk about gross margin. A lot of those businesses don't have healthy margins today. High gross margin, high net dollar retention. It's amazing. It doesn't mean necessarily that the zero 100 is not also amazing. They're just, they're different businesses. They have different
shapes. And so I would suspect when we look back in a decade from now, and we look at the mega winners, let's say in the AI application category, there will be some that will have been these like zero to a hundred to billion dollars kind of things. Some of those will also peter out very quickly, right? But there will be many, like the modal outcome, if you will, will be things that like, let's say in the past, like when you were building lattice, like, I don't know, a great ramp was like one to four to 12 to 25. Like maybe that's not one to 10 to 30 to 75. That's way stronger. If you
play out that curve, that business is worth a lot more, but it still looks like the laws of physics still apply to it. It's going to be kind of interesting because I, you know, like a couple of years ago, there were like a bunch of these AI apps where you're like, these things are promising, but not that many things have made it to 10. Then it became another, they've made it to fifth, you know, and it's moving up. It'll be interesting to see how many of these actually make it to 500 or a billion and are still growing at these rates. I suspect it will be a lot more than they've ever been in the past. It's just giving me a new, interesting thing.
I also have the positive view, but I'll give you the counter for a second. I'll come back to the positive view. So what's the mistake we all made in 2021? Many. Many.
So one mistake we made is we took growth rate to mean growth rate durability. And these are two different concepts. A major venture firm wrote this piece in 2021. And I think, you know, listeners can go look up the piece. It was something like 100X ARR multiples are not actually expensive. And the core argument in the piece was very reasonable, which is if I'm investing in a company that let's say grew from, you know, one to five, so it grew 5X, and let's say they're projecting 3X the next year and 3X the following year, then if I'm paying a hundred times today, I'm only paying 10 times in two years. That's a cheap price. And they're right. But then the
question is like, how many companies that went one to five actually go five to 50 in the next two years? And even the more interesting question is how many companies that got to 50 get to 500, and how many companies that got to 500 get to five billion? And I think what happened in 2021 is we, there was this pull forward of demand because of digitization, all this stuff. And like, you remember all the like video conferencing related tools, they were growing at unbelievable rates, but like they very quickly saturated the market demand. They pulled it all forward and then growth fell off a cliff. It's like everybody who was interested in them heard about them
at the same time. And so just basically all the demand got expressed immediately. Exactly. So now, now connect that back to the current moment in time. Like, why are these businesses growing so fast? Maybe it's the same reason, but with AI. One view would be like, okay, and I'm just gonna, I love these companies. I'm just gonna pick on a sector. Like if I'm a law firm, the managing partner of the law firm has probably come and said, we have to buy an AI solution this year, right? AI is going to transform business. All gets evaluated right away. Yeah. And everybody's buying. And these AI legal
companies are growing at rates we've never seen in vertical software. But now the question is like, okay, cool. So they get to a hundred, they get to 200, they get to 300. But are they gonna go from 300 to 3 billion in revenue? Or is it that like all the demand got pulled forward, everyone got their solution and everyone's like, we're good. And maybe that company that got to 300 really quickly now, now completely atrophies growth. It's an interesting thing because I think in sort of like the 2010 SaaS era, I think the common wisdom was vertical SaaS is not as likely to get huge as horizontal.
And people basically were like, you know, there's a few verticals that really go far. Like Viva is a good example. For the most part, the horizontal things like Workday, ServiceNow, Salesforce, etc. go a lot further. At the moment, it seems like there's a ton of comparative interest in vertical SaaS. Yeah. I think the contra on that would be something like what you just described where, you know, it all just gets pulled forward, but the markets aren't actually that big. I suppose the bull case on it would be something like it's easier to replace labor in specific areas. And so there's actually much more market there than there ever has been before.
Exactly. And again, these things are not binary. And so like the question to me is like, not like, is it great to, I think there's gonna be amazing outcomes in legal AI, just to be clear. Now, are they going to be $3 billion revenue businesses, $5 billion revenue businesses, $10 billion revenue businesses, $1 billion revenue businesses? I think the jury's still out. And like, the pro case, the constructive case would be labor replacement, labor goes to software, the TAM's much larger. A firm doesn't pay you $100,000 a year, they pay you $3 million a year. Correct. And the early price points actually support the bull case. Yeah.
And the contra case would be like, there's this pull forward. Also, these companies are over earning, because right now, like people are not discriminating their spend. But at some point, the comparison is not going to be the cost of the paralegal, it's going to be the other AI solution that's willing to do the same thing for half the price. By the way, software pricing has never persisted based on labor. No, and based on cost. Always. Yeah. Email's free. Yeah. I mean, what's the value of labor that email has replaced? Yeah, a lot. Now, I'm picking like an extreme trade example, but like, it's not obvious to me that like,
all these companies are going to, like right now, it's great because their ROI is so strong relative to human labor. But at some point, they're going to have to rationalize their ROI relative to the next best software alternative. And by the way, here's the mega bear case. The mega bear case is like, software's cheaper and cheaper to build. There's less product differentiation. You'll have 50 companies all doing kind of modulo the same thing. And pricing will completely compress to the inference margin. Right. That the underlying, I don't believe that, but like, there's, that could, one could make that argument.
For sure. I mean, there's also obviously a lot of examples like Salesforce is an example, AWS is an example where there's tons of competitors and they still maintain a lot of pricing power. And because they build true modes. Yes. And so. Some other way. Yeah. They become the system of record. They are doing something operationally that's very difficult. And that's why I take the bullish view on these vertical companies because I think these are amazing teams that are going to keep innovating and building net new products and figuring out new and new things to do and like keep moving up the waterline. But it's not as easy as I think the current revenue ramps apply.
Are you more excited about horizontal over the long term? Look, I'm a student of history. The largest outcomes in enterprise software have been horizontal. A framing that Ashim often uses internally that I really like, and it's very simplistic is the following. I think there's like 1.4, 1.5 trillion of IT spend worldwide. Okay. There's 22,000 companies in the world that make north of a billion in rev. Okay. Those 22,000 companies control like 93% of IT spend. If you look at the biggest businesses in the world that are software businesses, they have built products that can be consumed by most of those
22,000. Workday ServiceNow, Salesforce, Palo Alto Networks, CrowdStrike, Microsoft 365, and Microsoft's business, right? It's horizontal enterprise software. Horizontal enterprise software. I think, yes, there's going to be great vertical AI companies, both. And verticals are way better than they were in the past. But I do think the largest outcomes in this generation of software will be exactly like they were in the prior generations, which is they will be horizontal. And candidly, Jack, I feel like we're still so early and we're just beginning to see the interesting company concepts emerge. It's interesting. So Emil Bouchery is the founder
of Encel of Workday and also is a very successful partner at Greylock. He came to a partner meeting in 2017, the year after I joined the firm. And he said sort of tritely, like, guys, why are we looking at horizontal software? Like there's no paradigm shift that will allow us to go take home the incumbents. We'd be better off just buying the public stocks of the horizontal SaaS companies and we should actually go do vertical software, right? Because that's where, as a VC firm, there's low-hanging fruit. And I remember there was like debate and skepticism and a lot of horizontal software companies got
founded. But by the way, fast forward the clock, you would have been better off buying Salesforce ServiceNow, Workday, Palo Alto, CrowdStrike, and the public markets. That basket would have done better than any horizontal startup SaaS basket at the time. Because it turned out that like either people were building things for SMB, they were building niche add-ons, but no one really could go build a disruptive kind of core company. Now, fast forward, I was with Anil at a Warriors game spring of 2023. And he was like, his advice to me and Greylock was now's the time to go do new horizontal things. And why is it the time? Because it's the first time since 2005, 2005 Palo Alto,
and Workday gets started at the start of the cloud boom, where you have the confluence of three things that need to be true in order to build new disruptive horizontal companies. One is there's a new pricing model, right? You went from on license to SaaS to now, you know, outcome-based pricing. The second is there's a new abstraction or unit of value for work, because now you can actually complete end-to-end tasks. So you're selling something very different than workflow software that's used by people to complete tasks. And then the third is the data model is different, right? When you went from on-prem to SaaS, you had this
multi-tenant elastic architecture that could support new use cases. In an AI world, why does the entrenchment of the system of record even matter? Like Salesforce has this whole schema that they think about customer objects with. The whole world is standardized on that schema. I'd argue that gives them a lot of defensibility. Why do you need that anymore? Like, why should you as a CEO go hound your reps to update their, you know, account information in Salesforce? I should have an AI system that integrates into email, into my granola, into like there's a recorder in the sales conversation. And it's just implicitly on
the fly, creating the data schema that I exactly need to power these cases I want. If I want to do a pipeline forecast, wouldn't it make more sense for that to be substantiated based on the texture of the actual customer conversation than what my Salesforce instance says? Yeah. I mean, the data needs to live somewhere, but it doesn't have to be in a- In a structured schema. It's- Yeah, it doesn't have to be structured. Exactly. But it needs to exist. It needs to exist. But I would say that a lot of what makes these systems of record that we look at today defensible is they have defined the ontology and they've done the structure.
Yeah, exactly. And then if you want to plug in and you want to integrate with this thing, you have to match it. Correct. And that's why a whole ecosystem is able to run that. And by the way, you as a rep have learned how to use Salesforce. And what I would argue now in AI is it's all dynamic, it's all generative. And so all of that work that you've done is no longer needed. So the confidence of those three things, it means you can go after CRM, you can go after service management, you can go after observability. By the way, there were like head fakes. I mean, you remember when mobile started,
right? There were these mobile CRMs, but none of them became large because mobile was just a UI on top of the existing model. There's no change in pricing, no change in data model, no change in atomic unit report. I think with generative AI, that's all changed. And I think we're going to see like really, really large horizontal companies get found that like, we'll look back in the decade that were founded in 2025, 2026, that went after these large markets sold to everyone in the world. And that's how you'll build 10, 20, 30 billion dollar revenue businesses and multi-hundred
billion dollar market cap application businesses. To sort of like wrap up, I thought it'd be fun to go into like some other not exact venture topics. I think one, like I think our friend group is like a very big part of our lives and hopefully I'll get everybody to come on at some point. We already had our boy Greg Rosen. We'll get everybody. But like, how have you thought about that? Like, obviously there's, you know, 99% of it is about like the personal joy of the friendships, but you know, many of us are in venture. We're all in tech. Like, how do you like think about how it plays into
your professional life, if at all? And like, has it surprised you in any ways or like, what has it sort of been like for you? It's funny, right? Because like, we, you know, there's this whole concept of like venture friends, which are not friends at all. Or like, you know, like these like kind of transactional relationships. It's like you quenches you like and you have some, you see them periodically, but it's not like. Exactly. And I mean, that's the thing about the venture business is like social and professional are so overlapping. Yeah. And the thing that I find so remarkable about our friend
group is like, it didn't start at all around a work pretext. It started purely around like just personal joy of spending time together. Coincidentally, most of the friend group is investors. And we're all very different, like in the way we practice the business. Yes. But, and then we spend too much time together. Right. And for me, like, I think one of the things that I really appreciate about it is it's really rare in life to have people who have high context on your work, but truly want to see you win. Like there are people who truly want to see you win, but don't really understand like the true
nuances of your work. There are people who truly understand the nuances of your work, but like they don't necessarily, they might not want you to lose, but they don't really care if you become the best version of yourself. I think what's so special about our crew is like, we all know each other super well. We make fun of each other continually. Yeah. And we push each other to be like the best version of ourselves. And I'd say, I can certainly point to moments where I've made decisions because like you or Greg or Brett has pushed me to like be more ambitious or, or to expect more of myself. And I feel like vice versa. I think that's true for you. Totally.
And that's a very, very special thing. Yeah, totally. And by the way, I, that is a little bit how old school venture worked. I think if you rebound the clock to like the early 2000s, there was a lot more friendship and collaboration in the venture business. Yeah. And there were pockets of true friends. They would work together. They would push each other. They play golf together. A little bit of that. Yeah. We got a little bit of that going. Well, it's funny. Cause there's like, you know, there's this group that we spend like inordinate amount of time with. And then I do think
there's this, like, you know, there are venture relationships where I think Greg made this point when we did the podcast where he was like, you know, it got really hard to have any sort of relationships at like, you know, the peak of COVID. And now you're back to a zone where you can kind of have these like relationships up the stack. Like if you're a series A investor, you know, you've got like these kind of like preferred relationships at series B and so on. And some of that exists, but it's still, there's this different thing, which is very lucky to get in adulthood where it's like, if you have people who
are thinking about your own life, like, you know, it's like, they care about it, like, like your family or something like that. It makes a huge difference. Makes a huge difference. Yeah. And I think particularly for people who spend most of their time working, like I'm thinking when we went to Santa Barbara with our families for a couple of days, I mean, we spent a lot of the time talking about work related topics. Totally. And I think it's so unique to be able to have people who feel like family, but also are people you look up to and admire in a work context and learn from. Yeah. That's what we have with the crew.
It also just makes it feel light where like, because like, you know, I think there's so many ways where work can feel really heavy, you know, in all sorts of different ways. But like, if you've got a group that is just incessantly making fun of everything about you and what you're doing, I actually think it's really important to like get that. Like I value that specific thing where like nothing is too serious to be made fun of a lot. And I also think you and I talked about this once, but like, if you're going to work really hard for really long periods of time, maybe decades, you should laugh while you're doing it. For sure.
I think humor is just such, it's like one of the true endless sources of joy in life. Yeah. And like, if we can bring humor into each other's lives continually, it makes, it makes the work more enjoyable. There's this funny thing, you know, like I remember when we were like talking about, you know, like you wrestle with all of these things about like, you know, because we're like, you know, ambitious people. And so you're like, what trade offs do I have to make? And so like, I think over the years we've asked, like, do you have to trade family for work? Do you have to trade joy for success? And like, there's all these questions, but you know, there's like truth in
all of them, but even like exploring all of those concepts and then you like, think about it. You're like, actually, no, like you don't have to trade joy for professional. And in fact, I think in order to like, be your best, you have to like, have fun doing it. I really believe that. And I think it's in the friend group, it's in the, you know, companies you partner with, it's also in your teams. Yeah. Like one of the things I'm most proud of is Corinne got married this summer. Every single partner at Greylock on the investment team was at the wedding in Italy. Not because they had to be. Yeah.
But because it was like super fun. And we like spent the four days together and we went out to meals and we laughed and we told stories. And the whole thing's a fund expense at that point. And it's great. Not the case. Another topic, just more about your life that I wanted to get into is your health routine. You have a biological age in the teens. 17.6. But you never exercise.
And I'm just curious how, like, do you want to say anything? Yeah. I think Ashim wanted me to ask you about this. To me, like it all starts with diet. The number one thing, and Jack, I'm being very serious. You're laughing. Go ahead. I source food from as close to the farm as is humanly possible. Here's a good bit. Sam recently said, I bought these unbelievable, this unbelievable produce from the farm this morning. Where did you buy it? It turned out it was a grocery store and they sourced it from the farm. It was a farmer's market. But, you know, I think in all, like my couple tips, and Jack, I think you've learned from this is eat whole foods, exercise daily.
You don't do- I like to swim. You don't- And make sure you get eight hours of sleep. Okay. That's good. What's your biological age? It was like 26. Yeah. Okay. So I'm nine years younger than you. Yeah. Okay. Anything else in the daily routine stuff that we should talk about? Yeah. Actually, one thing that I've learned from Ashim, I think you do this. I actually think a number of like people who have longevity and venture do this, is making sure you have a lot of unscheduled time on your calendar. I try to keep one day a week completely unscheduled. And then I try to keep my mornings unscheduled until like 11.
Because once you have a portfolio and a team, like at some point in the day, your day becomes entirely reactive. And so you have to be incredibly intentional about scheduling time to do like long-term thinking, long-term work, and also to give yourself the energy to sprint. Like, because I think this job, like a lot of being good at this job, in my opinion, is very quickly being able to detect when you need to go 110 miles an hour. Yeah. And then getting to 110 miles an hour really fast. And if you do that every single day, you're not truly at 110 miles an hour. It's also really, keeping the open day or the open mornings is so hard.
Because there's always like the, hey, I'm in town for these three days. Are you free? It's like, well, yeah, I am. Yeah. But that was supposed to be a quiet time. A hundred percent. Yeah. And that, like, if you asked me, what have I gotten better out over the last nine years? Because in many ways, there are many more pulls on my time today than there were nine years ago. Just better at not saying. But I'm just very good at saying no. What do you do to make sure you're still like exposed to like serendipity that you had earlier? Or do you think that that's just like a trade and now there's less of it?
I think one of my, the things I'm unhappy with is I do think there's a little bit less of it. And I worry about that because when I think about some of the early relationships I built, they really were so random in how they, they were built. Right? Like a good example is this week is AWS reInvent. It's my first year missing it because I have three board meetings this week. Yeah. But there's so many like random events I went to at reInvent where I met someone that four years later ended up being someone who we hired into the portfolio. Or I think I have less, less serendipity surface area today than I had in the past.
But I try to very intentionally do things every week, every month to maintain some serendipity. One is like, I try to go to at least an event every week. And then I also try to make sure I meet some founders every month who are completely out of network. And I don't get caught in the like, oh, well, I have a good network now and I'm just going to meet people through very strong referrals because then you become really insular. And I think insularity is the death of this business. You have to like maintain a beginner's mind and keep the serendipity as painful as it is to go to like an event in San Francisco. It is.
And actually maybe, maybe, maybe to wrap on that topic, you like me now as a, as a recent father have left, left the city for, for the suburbs. Any like things about that that have like hit you as reflections? The weather's incredible. That's low. It's so good. But putting that aside, look, I think, first of all, I'm in San Francisco a ton. More days than not. More days than not. I always meet founders, especially new founders in person and disproportionately there in San Francisco. But I will say that there's a little bit of like having a clear mind that is very useful because you could spend your entire day meeting founders. Of course.
And you could feel good and go home and be like, I met 12 new companies today. But the real question is like, were you awake in the meetings? I mean, for me, when I like finish a week where I just had like a zillion meetings all week, I don't think that like, I don't come out of that week feeling like I crushed it. Like I feel like scrambled. And you know, I think about like the last 18 months, I've made four new investments that I'm really excited about. How many net new opportunities do you think I met in that 18 month period? I don't know. I would suspect it's on average three a week. Okay.
I mean, if I compare that to myself three years ago, it's probably meeting 20 opportunities a week. Now, are there some opportunities I didn't meet that I should have? Almost for sure. Right. But again, the question is like, how do each of us equip ourselves to make a couple of really high quality investments every year? I like being in the city and then also, you know, being in our mental health office and having more clarity around like, okay, it's just quieter. You can think more. Yeah. And it's like, who are the people who are going to start companies in 2026 that I should go make sure I build relationships with today?
There've been a bunch of these like Charlie Munger clips going around recently. Obviously, it's not the same thing as venture, but I do think a lot of what he says, like you can probably apply some percentage of it where it's like, you shouldn't be chasing everything. There's very few things that mattered. Like you should be thinking and studying a lot and not like talking all the time. Yeah. And I, um, you talk so much.
And I will say that like going through one boom, bust cycle has really reinforced that for me because I can't tell you the number of companies I looked at in the 2020, the 2019 to 2021 period where we decided not to invest and they became super hot and like, you know, the valuations ran up to unicorn and then they terminally are now exiting for less than preference now. Yeah. But it's so hard in the moment. Like we have, you know, newer partners who joined our team at Yarn Adventure and it's so painful. They're like, we didn't do this and just got, you know, three new rounds got done. And it's like, okay, well, did the fundamentals change? Like maybe we were wrong.
And there are cases where we're wrong. Yeah. Like we underestimated the person. Of course. We underestimated the market, but there are going to be many cases where our initial read was right. It's just going to take time for it to play out. And I mean, Charlie Munger and Warren Buffer, like the best of the best at this, but how do you have that patience and that conviction in your own framework to like not get caught up in that race? Because I, everyone who gets caught up in that race, I think fails. Yeah. It's a great place to end it. Sam, I'm grateful for you. This is very fun. Jack, so special. What a pleasure. What a pleasure.