Jim Goetz is a partner at Sequoia Capital, and there were high expectations as the celebrated investor took to the stage to address the capacity crowd at the CED's annual Tech Venture Conference in Raleigh, North Carolina. For those not familiar with tech ecosystems outside of Silicon Valley, Boston and New York City, there is a vibrant entrepreneurial eco-system that has been quietly producing disruptive tech in and attracting innovative companies to the South East. And the CED is the member organization for many of those innovators (as well as the investors looking to fund disruptive technology). The CED has been connecting entrepreneurs and investors in the burgeoning upstart eco-system of the Triangle (Durham, Raleigh and Chapel Hill) since 1984 – yes, for the past 30-years. According to its website, CED entrepreneurial member companies have raised $8.5 billion, collectively. The latest Silicon Valley unicorn and the fastest to get there (a mere 24 months) is yet another unicorn in Sequoia Capital's portfolio as well as being a CED member company: Carbon3D, is a startup combining molecular science with hardware and software technologies to advance the 3D printing industry. Goetz lead Sequoia's investment in Carbon3D, which explains why Goetz, the investor who has topped Forbe's Midas list for the last two years running, made the trip to North Carolina. Celebrated venture capitalists get out of Silicon Valley for unicorns, as well as for those communities with a track record for producing cutting-edge innovation.
What can be learned from the top venture investor on returns (WhatsApp)? A lot, is the annoyingly brief answer to that question. From why taking a bespoke approach to working with startup founders is a winning strategy to why you should never assume all venture capitalists are alike, Goetz quietly imparts his wisdom and in doing so, reveals a rather compassionate version of venture. After 90 minutes on stage at CED's 2015 conference, I share with you just a few of the insights from the incomparable Jim Goetz:
He's no parade jumper and don't call him legendary. Humble almost to a fault, Goetz keeps the focus constantly where it should be – on the entrepreneurs. Insight for any leader in any industry: know when you have the right to claim the spotlight and recognize your role in the team effort that brought you to success or industry acclaim.
Adding to the first insight is this wisdom from Goetz: don't look to venture capitalists for the next innovation trend, look to entrepreneurs.
Immigrants drive entrepreneur eco-systems. The American story continues to be an immigrant story. Over 50% of Sequoia's portfolio is invested in immigrants. As Goetz noted in his remarks, immigrants naturally take risks (they've left their home country and surmounted huge challenges to get to the United States) and risk-taking is at the core of all entrepreneurs. The takeaway from Goetz: instead of closing our doors to immigrants, tap into our history of determined immigrant energy, as it is the foundation of innovation and new business opportunities.
Don't run at the first sign of a tech bubble. Don't waste a good tech bubble or recession by running away, instead get ready to double-down by making additional investments. Quoting Don Valentine, founder of Sequoia, Goetz admonished the investing portion of the CED audience to ignore the daily stock market fluctuations and think long term. True believers (aka real entrepreneurs) will survive and likely thrive through impending troubled times. With a rich menu of emerging tech companies out there, make investing in troubled times part of your overall investment strategy. And, yes, Goetz believes a downturn would be good for Silicon Valley.
Follow your passion but blend it with computer science. Goetz passionately believes that learning code is the equivalent to learning English. Computer science is the language of the information age and should be as mandatory a portion of the school curriculum as reading, writing and arithmetic.
Wall Street or Startup? Goetz's advice for college graduates: your first job should be with a startup. The startup environment is where you can learn and grow as a professional without waiting for opportunity to arise due to mandatory retirement, departmental reorganization or reductions in headcount. But don't confuse starting an upstart company with the experience of working for one (see the next lesson).
The Next Mark Zuckerberg? You don't have a start a company when you're in college or by the time you are 30. On when is the right time to launch your own venture, Goetz was very clear: start a company when you're ready. Wait for your own magic problem-solving moment and don't pressure yourself into grasping for one.
Which comes first, the business model or traction? There is an ongoing startup and media obsession with startups getting funded and having nailed the business model early on – and again, on what startup founders should be focused on, Goetz sees things just a little bit differently. His guidance: with mobile, upstarts have access to 3 billion consumers, so founders should focus their efforts on gaining traction.
Passed on Pinterest. Goetz didn't dodge the question on Silicon Valley's (and even his own firm's) track record on women venture partners and venture-backed companies. The lack of diversity in tech is a huge problem, with an epicenter in Silicon Valley. According to Goetz, all of us in tech (investors, entrepreneurs, educators) need to do more to remove barriers and create greater access to opportunity. As for passing on Pinterest, Goetz wonders if having a woman at the table would have changed Sequoia's decision to pass on that opportunity.
An exit that fuels a mission is twice as nice. Don Valentine swore off financial investors after his first fund, requiring Sequoia to look for other types of limited partners when raising their next fund (i.e. institutions, such as the Ford Foundation). The massive insight: get the backing of those investors whose mission you believe in and then, understand the bigger impact of what you do. When Sequoia returns an investment to an L.P., they know the exit is backing vital research or fueling scholarships or ensuring other equally worthy outcomes.