John Doerr of Kleiner Perkins and Mike Moritz of Sequoia investment rules

John Doerr of Kleiner Perkins and Mike Moritz of Sequoia are giants in the VC world. They interviewed each other at the National Venture Capital Association (NVCA) annual meeting this week. It was a humorous, nostalgic, and insightful discussion. I had the pleasure of sitting next to Pat McGovern, founder of IDG, and a VC legend in his own right.

John Doerr started his career at Intel in 1974 as a salesman and later moved into marketing. He moved into the VC business in  1980 joining Kleiner Perkins.

Mike Moritz was a writer for Time magazine before joining Sequoia in 1986.

History of success - Kleiner Perkins and Sequoia have invested together in 50 companies, and separately in hundreds more. Some of the notable successes include; Google, Yahoo, Amazon, AOL, Apple, Citrix, Netscape, Intel, Intuit, Palm, PayPal, Plaxo, Sybase, Sun, Lotus, Electronic Arts, 3COM, Cisco, Oracle, YouTube, and many more.

Pattern recognition - John Doerr reflected back on the many successful investments in his career and noted a pattern that is perhaps not politically correct, but a pattern none the less. The most successful investments were in founders that were white, male, under 30, nerdy geeks, with no social life. He rattled off a list of founders that included; Steve Jobs, Steve Wozniak, Larry Page, Sergy Brin, Jerry Yang, David Filo, Jeff Bezos, Steve Case, Marc Andreessen, Scott Cook, and Mitch Kapor. He could have gone on...but he made his point. So, he said when Larry Page and Sergy Brin came along the decision was simple. Hmm...I'm sure there was more to it than that, but there is no doubt it worked out well for Kleiner Perkins and Sequoia.

Kleiner Perkins 7 rules - Doerr and Moritz didn't reveal a lot about their investment philosophy so I dug back in my archives for more insight. I was on a "Future Of Software" panel at TiECon East two years ago with Ajit Nazre, a partner at Kleiner Perkins. Ajit said KPCB has 7 rules for startups they invest in. They are;

• Instant Value to customers - solve a problem or create value with the first use
• Viral adoption - Pull, not push. No direct sales force required
• Minimum IT footprint, preferably none. Hosted SaaS is best.
• Simple, intuitive user experience - no training required.
• Personalized user experience - customizable
• Easy configuration based on application or usage templates
• Context aware - adjust to location, groups, preferences, devices, etc.

John Doerr and Mike Moritz show no signs of slowing down. They both enjoy the challenge and love helping entrepreneurs build great companies.

UPDATE: The Wall Street Journal also has a story on John Doerr and Mike Moritz talk at NVCA. The WSJ mentioned one exchange between them that points to something new Sequoia has going that is still very secret.

But then Doerr asked Moritz, clad in a conservative dark suit, about a sensitive issue that was certainly on the minds of many in the audience, referring to press reports that Sequoia has hired two managers from Stanford University's endowment to prepare for an investment fund that would invest in multiple asset classes.

"We're keeping our lips very tightly sealed on these things," Moritz said. "The stuff in The Wall Street Journal about the hires is true. But it's far too early for us to elaborate."

Subscribe - To get an automatic feed of all future posts subscribe here, or to receive them via email go here and enter your email address in the box in the right column.

Comments

[Sam]

Hi Don,
Sounds like an interesting event is there a podcast or equivalent available?

That laundry list of successful KP and Sequoia investments is mind boggling. Without trying to detract from the outstanding performance of both firms this reinforces my view that founders gravitate towards successful VC's in the same way VC's prefer opportunities involving entrepreneurs with track records.

I love the 7 Rules for startups. As with all lists of this nature the points seem so obvious but the challenge remains identifying and delivery opportunities that conform. Opportunities may exhibit one or two of these characteristics but the home runs are a "grade 7" perfect storm.

Cheers
Sam

[Don Dodge]

Sam, I don't think the NVCA recorded the sessions. There were cameras in the main hall, but mostly for projecting up onto big screens. It is a shame they don't have recordings.

The 7 rules are simple and obvious when you stand back and look at them, but incredibly hard to see and execute when you are in the middle of the action. It is easy to get dazzled by the technology or enthusiasm of the founders and miss the fundemental tests.

[kevin gao]

Last I checked, Jerry Yang wasn't white...and maybe not the most PC, but the insights are relevant