In pursuit of world-class - with Matt Miller, partner at Sequoia Capital
šµ A new episode is out - A self-proclaimed nerd from an early age, Matt started building computers and writing code at 12 years old in his motherās kitchen.
At Sequoia, Matt has worked closely with companies like VMware Carbon Black, Confluent, Graphcore, Tecton and Tessian among others.
Prior to Sequoia, Matt worked at Goldman Sachs working with top technology companies like Microsoft and Salesforce where he also put together a report for Steve Jobs. In his spare time, Matt is wrangling three young kids with his wife and looking for people with whom he can practice his Swedish. šµ
Many thanks to Nigel Toon from Graphcore and Tim Sadler from Tessian who helped me get more insights into Matts' strengths as an investor and ask more in depth questions.
Main takeaways:
š You will be surprised how much people are wiling to help if you are willing to ask and if you can find a commonality.
š¤ŗ More and more category leaders are coming from Europe.
šļø Shadow other people that have been there and done that.
š Life is too short not to speak up your mind. Be clear and kind!
ā¤ļø This was an incredibly honest conversation on being a great business partner to entrepreneurs and what it means to aim to be world-class that any entrepreneur and investor can learn from.
Many thanks to Matt who took the time to discuss Sequoias' move to Europe and how they challenge their portfolio companies to have higher standards!
Listen on Spotify --> https://lnkd.in/epC_czkX
Listen on Apple podcast --> https://lnkd.in/efKpySzp
Transcript - Not edited
SUMMARY KEYWORDS
sequoia, companies, founders, people, investor, building, matt, europe, partner, business, category, helping, book, leader, person, world, problem, meet, push, nigel
SPEAKERS
Calin Fabri, Matt Miller
Calin FabriĀ 00:01
My guest today is Matt Miller. Matt is a partner at Sequoia focused on early and growth stage investments in technology companies. A self proclaimed nerd from an early age not started building Computers and Writing code at 12 years old in his mother's kitchen. He has worked as an intrapreneur, an advisor and now an investor at Sequoia mad has worked closely with companies like carbon black confluent, graph core tech tone and Dejan among others. Prior to Sequoia Matt worked at Goldman Sachs working with top technology companies like Microsoft and Salesforce, where he also put together a report for Steve Jobs. In his spare time, Matt has wrangling three young kids with his wife and looking for people with whom he can practice his Swedish yet to brown mouth. During this episode, we dive into sequoias moved to Europe, Matt's journey to the investor that he used today, and how they challenge their portfolio companies to be world class. Matt shares some great lessons throughout the episode that any entrepreneur and investor can learn from. Please enjoy this great conversation with Matt Miller, partner at Sequoia. Hello, Matt.
Matt MillerĀ 01:29
Hello, how are you callin pretty good for you? Good.
Calin FabriĀ 01:31
Thank you very much for taking the time to set the stage a little bit here. So if we will start with the first part just to get to know Matt, I kind of read this very funny story how you cold cold Goldman Sachs? I would love to learn more about it. Do you remember what you did that day? And how did you prepare for the call?
Matt MillerĀ 01:47
I think context is always important. So I had taken two years off school to do a startup in digital out of home advertising where we put up these displays and restaurants and showed customers content, the waitlist, and I had a lot of fun doing that. And I was before that I was actually a computer science major. And with that business, I was the CEO, leader or founder, but with some of my buddies, but I was really doing a lot of the technology and then the business. And through that I like realised that I liked the business a lot better. So when I came back, it didn't work out and I came back to school, I changed my major to finance and I was trying to think what's the best way I can really accelerate my learning and finance and get a deep dive into the tech industry at the same time. And I had this light, there was a session where some people from UBS of all places came through and talked about what they did in investment banking. And I got excited about the idea of working with the best technology companies in the world and helping them launch their IPOs and helping them navigate what strategic moves that they might want to consider and make and that was really interesting and appealing to me. But as I did my homework, I realised that the firm's that really were like the best position at that time to do that were Goldman Sachs and Morgan Stanley. But neither of those were coming to recruit at BYU, where I was going to school. And so I just did my research and found people who had gone to BYU who had gone on to work at both Morgan Stanley and Goldman Sachs. And I cold called them and said, Hey, I'm a student at BYU. I've done a start, I'd like to come try investment banking. I'm really interested. Would you mind spending some time with me? And just I could ask you a couple questions. And you'd be surprised that people really want to help people, especially if you have some sort of a shared affinity, like you've been to the same school or you come from the same place. And they were like, Yeah, sure, I'd love to talk to you. And I did a couple of conversations on the phone. And then I followed up and flew myself out to New York and said, Hey, I'm in town, I'd love to meet you, in person, love to ask you more questions. If people are willing to meet me, I'll meet you whenever. And people were willing to meet me and try to help. And thankfully, through those conversations, I was able to impress them enough that they were willing to recommend me for a super day where I was able to then go and and get an interview in New York. And thankfully, luck coincided with that day. And there was somebody from San Francisco in the office because I told them, I really want to do investment banking, but I really want to do it in San Francisco. And really like through learning, I just felt culturally a much bigger attraction to the culture of the people that were working inside Goldman versus Morgan Stanley. And so I really that was the only place I wanted to go was Goldman Sachs, San Francisco. Otherwise, I was gonna do something different. And I just I, I was fortunate that people were willing to take time for me, and then that open doors, and then I got really lucky. And in that there was a person from San Francisco in town on that super day. I got to meet them and then I got to go get the job out in San Francisco. And really, that was a huge thing for me and that it took me from being this young kid who loved and dream about technology, and put me at the centre of these teams working with Microsoft and Salesforce, I remember like my, like a month and a half into the job, I was putting together a book for Steve Jobs, those Representative Steve Jobs, I didn't get to go to the meeting. But at least like I was like, I'm getting like, think about right out of school, what's what we're going to put Goldman Sachs is going to present to Steve Jobs. And that was so exciting to me and so exhilarating. And to be able to do that. And then with time, I got better, and I got more skills. And I was going to meetings and eventually leading some of the content and meetings as I developed an expertise around SaaS and software and and my experience at Goldman is what really gave me the chance to have to even be noticed by Sequoia because I was working with many of the Sequoia CEOs helping them with IPO preparations, or the thoughts at this point at that point in time.
Calin FabriĀ 05:52
Why did you choose Sequoia? Or why did Sequoia chose you?
Matt MillerĀ 05:56
So I mean, why I chose Sequoia was not a complicated question. I mean, think about it, like I'm like a young associate I had, I was on a fast track at Goldman, I got an accelerated promotion to an associate, but I'm still like, five years out of school. And I get an email from this guy Jim gets, who's his legendary Sequoia investor on the board of WhatsApp and Palo Alto Networks and a real luminary in this tech investing space that I had been kind of a fanboy of since I was like 14 years old. And literally, the email said, Hi, Matt, have heard good things. Would you like to meet with you being like you and like cutting all the words down letters, so many abbreviations as possible. And it was like the golden email that changed my life. And of course, I wanted to meet. And all along my thought had been to do investment banking for a few years, get this experience working with some of the best companies in technology, and then go work and accompany and do more operating, or maybe be an entrepreneur again, and then maybe later in my Caribbean investor. But my, I thought was lightning doesn't strike twice. And the chance to have a conversation with Sequoia. And then when they offered me the chance to come work there. It was just like a dream come true. And like God, it was the no brainer of all no brainers. And you know as to why they picked me, I don't know, you'll have to ask the people that interviewed me, I still wonder that today, but I'm very thankful to be here. And having a wonderful time,
Calin FabriĀ 07:27
I see a pattern of preparedness and luck, right? Being always prepared and doing your best but and also maybe a little bit of luck and being prepared when that opportunity actually comes. So you've been now with Sequoia almost 10 years. And now you've decided to move to Europe. Tell me a little bit more about like, why why Europe? How do you see the market now? And what made you guys decide to make the move?
Matt MillerĀ 07:50
Well, I think that again, context is everything. I've always had this natural affinity for Europe, because I lived here for a few years when I was younger. And I really love the experience. I love being here. I love the people I just loved. I loved my time I lived in Sweden and lived all over Sweden. And I'm still very closely connected with many people and families. I met when I was here when I was younger. And so when I got to Sequoia, I was really surprised because we had this thriving business in the US. We had this thriving business in China, we had a thriving business in India at the time, we had a business in Israel. And we didn't have one in Europe. And here we were led by this guy, Michael Moritz, who was from Wales, and Doug Leone, who was from Italy. And we didn't have this business in Europe. And so I said, look, let's go spend time in Europe, let's go scout in Europe. And so I would go on these trips, I'd grab another investor or two, and we'd start coming on these trips, where we would meet 40 companies hit two or three tech hubs. And frankly, at the beginning of my time at Sequoia, there was not a lot that was like super interesting that we'd meet a bunch of companies that were the founders would like openly admit that they wanted to sell the company and, and get a nice, you know, outcome through an acquisition. And that really changed about five years ago. And the biggest change was we were doing this deep dive on AI semiconductors, we thought we felt like there's this interesting opportunity to build a next gen chip company because of the move to machine learning. And this architectural opportunity to build a processor just for machine learning. And we were meeting with companies in California and Israel. And when we were doing our due diligence, the one that really percolated up was graphcore, which was in Bristol, UK. And so we ended up making the investment in Bristol, UK. And then that got me coming over here instead of once every 18 months. I was coming over four times a year for board meetings, spending more time and then all of a sudden we invested in tests Ian. And then we started to notice like the interesting companies and the cattery leaders were like increasingly coming from Europe. So we really want to do it. We invested in UiPath but we were really frustrated that we couldn't get to UiPath earlier because we just didn't know about it because it was from Romania. And we didn't really get it onto our radar screens until they were very firmly established in New York. And we looked at a company like celonis, that we thought was legit, that's a great like category leader, we weren't able to become an early investor there. And we regretted that. And we just started to notice example, after example, where the category leading company was one that was started in Europe. And if we were in your earlier, we would have a better chance of partnering with these founders and helping them on their journeys. And so we made the decision that we should open an office and come here, and we thought about different ways to do that. And the I think the thing that was just no doubt in my mind was the best bet was to go hire like an amazing local investor who had the network and experience. And we had one person at the top of that list the entire time, and we only talked to one person, and that was Luciana, who we recruited and hired from Excel. She's the only person we actively considered for that partner role to come in and help us and that she has been an amazing, incredible addition to our team and has impacted Sequoia in the US, in addition to helping us launch year have just been huge for our whole business. And then we hired a young person, George Robson, and sign up an office in the original plan was for me to move a year ago, but with COVID, and I had a baby that was coming. We pushed it until June. And so we moved over in June. And yeah, we're doing great. We were having a blast and thrilled to be here and be part of this working with this great young team and building up our on the ground presence here in Europe to hopefully identify and partner with these great companies earlier,
Calin FabriĀ 11:33
are very happy that you guys are on the ground and closer to the European companies, there's just no doubt that you're going also to push the boundaries to heights, high standards, and push also other investors to be smarter, be bolder, and make bets on good teams. You mentioned their category leaders, more and more category leaders actually are coming from Europe. And also you mentioned graphcore, and Nigel. So just to change gears a little bit and go into the category of thinking big high standards and aiming to be world class. So actually, when I asked Nigel, can you give me a little bit of a reference about Matt, he said, and I quote, Matt is very impressive. He's both very supportive, but also sets incredibly high standards, he challenges in a super helpful way, helping you to understand what world class means, and really challenging you to achieve this. And I've got so here I kind of wonder like when you meet this potential category leaders, like Nigel, how do you want to assess them? But then second, after you make the investment? How do you actually push them to have higher standards to be world class? And what do you mean by world class?
Matt MillerĀ 12:43
Yeah, so there were a couple questions there. So how do we assess them? I think one of the great things about the way we approach the Western market is we approach it with one fund and one team. And so we look we, like I mentioned earlier with graph core, we were looking across the whole AI microprocessor market opportunity in the West. And we looked at Israel, we looked in the US we looked in here at Bristol, in the UK, and or aircraft core in the UK, which is Bristol, UK. And grabcraft Core was the one that the references pointed to that it looked like the architecture that was the best that the product momentum was the best. And so we made that investment. We have this firm belief inside Sequoia that we want to try to partner with the category leader because the majority of the value and ecosystem accrues to category leader, we want to partner with great businesses more if not just as much as make great returns for our LPs. This is what keeps us so excited energetic is to help build some of the best companies in the world. And how do we help them come become world class? Or how do we help them understand what is world class and there's a few ways that we do that. One of the things you know, clearly is there's a lot of greatness there that leads us to want to invest. But we try to take the benefit of coming into our community and share those with the new company in as many ways as we can. When we first invest, we often do what we call sunrise session, which is like a it's the beginning of our time together as partners, and what are the things that we could maybe help you with to take some low hanging fruit and begin our relationship or helping you and in Nigel's case, he was thinking about go to market in the United States. And so I took him to me, especially around marketing, and what you should be thinking about related to brand and so on so forth to build a community in the AI world. And so I introduced him to a handful of people at MongoDB Docker at confluent that were in our portfolio that had built strong communities of developers, and they're really world class, world class communities and helped him to understand how that worked and meet those people and now he has relationships with people he can go ask questions to. And so that's one of the ways we do is we typically will try to do when somebody is facing a problem or there's an opportunity, we try to help them meet, the best people we know, that have done this in the world are the best people we know in our portfolio. And that really helps them recalibrate their benchmark, because if you're building a great business in Bristol, UK, your super heads down, you don't naturally bump into the person that's building a great world class developer community that lives in New York City or San Francisco. And we try to make sure we get you together with that person, in person, if we can, or over zoom that more frequently. Now, just spend time and then we constantly throughout the course of our relationship, are trying to just encourage your thinking based upon other things we're seeing, or other things we've learned from our companies just to help always keep the bar high and help your heads down running your company, but to help from the fact that we have this 30,000 foot perspective and view from working with many great companies, and working with many companies that have not been so great. And to learn from both the successes and the failures.
Calin FabriĀ 15:54
Right? Got it? And how do you keep the bar high? So Tim, actually from from television, he says that Matt is an expert at having hard conversations and never shy away from speaking the truth, even when it's not the easy thing to do. I appreciate this so much as it actually helps you develop into a better founder and build a better company, when your board members can highlight your development areas, as well as reaffirming your strengths. So how do you balance push and support?
Matt MillerĀ 16:21
So I think it's two things. One is like I learned from my partner, Doug Leone, we have this wonderful apprentice model at Sequoia where you come in as a young person, you work with more experienced investors, and you get a chance to really see them in action and learn from them as the new ascended to a more route all around point person, general partner, yourself. And Doug, one of the things that really scared me about Doug in the beginning, but that I really came to appreciate is he's super direct. And so I try to be that way too in my own style. And that there's no reason we eat around the bush, if you have something on your mind, say it. And just always be direct and clear with your founders. Because trying to life's too short to not be direct and tell people what you honestly think, always. That being said, I think like we also have this role that in times of hardship, our job is to be shock absorbers. And so when things go wrong in some of the companies that we work with, we try to be the support, how do we help you figure this out? That's not the time to push. That's not the time to work on a development area. That's the time just to figure out the problem and make life easier. When things are going well. That's the time to be like wait, like, what else could we be doing? What are we missing? Let's not show up at a board meeting it just all applause because when things are going well, that's when it's easy to miss things that can then compound and become bigger challenges later. And it's it don't try never try to be hard on somebody always try to be direct Hey, like I see this, or I'm worried about this. And when things are going well thinking about what are we not seeing? Or what are we not talking about versus just being happy that things are working. Because there's always something you can do to make the business better or improve and fine tune. Even in moments of great success.
Calin FabriĀ 18:03
It's very counterintuitive, you would believe when the things go bad, you will try to push them and when things go very well, then you're tend to applause whereas actually probably it's the it's the vice versa. I think
Matt MillerĀ 18:13
that the thing that's so important to remember is that for the founder, this is the journey of their lifetime. And this is what is consuming every bit of their personal and professional energy and emotion. And they're putting everything in. And when things are going not going well. There's nobody feeling more stress about that than the founder. And it is so important in those moments to have tremendous empathy. Because you don't need to compound the problem. You're there as the business partner to help solve the problem. And if there's other things that need to be adjusted or feedback to be given, pick another time, because that founder is going through something really tough and tougher than it is for you as the investor that and park business partner that's around the table.
Calin FabriĀ 19:04
So you're looking across Europe, I guess you made your mind on a category that you want to invest. How do you assess a company if they are the category leaders? And how do you assess if they have high enough standards or if they can be coachable?
Matt MillerĀ 19:18
One may not always be the category leader, but we want to believe that there's a path for them to become the category leader. So they don't have to be the category leader necessarily stay but we have to believe that they can become the category leader and how do we get comfortable with that? It's a combination of what is what is the founder like what did he talk about? What are they thinking? How do they think? Are they a simplifier or a complex fire? If somebody is a simplifier and is able to frame problems very succinctly and think about them in a very simple way. They're more prone to success than somebody that complexify as problems. And so we really try to understand that as we're getting to know people around how they think and how they think about building their company. And we try to think a lot of it has to do with market dynamics. Is this a good market? Is it a good business? Will it be able to have good margins? Will it be able to generate free cash flow eventually? What are the dynamics around the market that are either in favour or not in favour of this company being successful? And then what are the signals of sucking sound that we have, from the market that the market really wants this product or service, and sometimes it's just a founder. And so you don't have that signal and you go without it. Sometimes they've got a prototype, sometimes they've got a business with millions of dollars of revenue. And so there's different abilities to understand the demand and interest from the people who will consume the company's product or service. But we like to look at that as to how we determine if they're going to be world class, like, I think we just want to work with great people. And then over time, as they're building and scaling their team, the way we do that is we just help introduce them to great people, like I mentioned earlier, and these great people can take the form of it, visors, they can take the form of board members, they can take the form of executive hires, they can take the form of individual contributors. And we are constantly building our network of people that fit all of those bills and keeping in touch with them and then introducing them to our companies at the right points in time. And that's how we help help them to be world class, when it's not like we don't sell just VPS not world class that want. It's nothing like that. It's okay, it's time to get a new VP of Marketing for whatever reason. Okay, let's go see what like the best ones in the world look like? Let's go here. Some people that we think are interesting, where you want to do more marketing, hey, maybe here's this great board member who has built a couple of really interesting marketing programmes in the past. And maybe we should talk to them.
Calin FabriĀ 21:45
Got it. Got it. So we're now at the end. So just a couple of rapid fire questions, three things that you recommend intrapreneurs go tomorrow and implement in their team to challenge themselves to have higher standards, and to try to be world class.
Matt MillerĀ 21:58
Three things that recommend that they would do to help their teams to be world class. I think that the the one of the best books I read about this about teams is The Five Dysfunctions of a Team by Patrick Lencioni. That's a great book to read, like I wouldn't prescribe it in every situation. But if you're a CEO, and you want to have a high producing world class team, that's a great book to read, because it will help you understand the importance of Team communications, that collaboration. One of the one of the one of the teams I'm working with right now is this company in Philadelphia, DBT labs, and they are just masters of the whole exec team works together as a team. So often in companies, their silos, there's this engineering silo, Silo, there's the marketing silo, there's the sales silo, there's a product silo. And it's like the CEO is like working in between the silos. But DBT is an example of a young company, they have their respective areas of responsibility, but they collectively work together to solve problems very actively. And I think that's one of the best things that you can do. And I think that book talks about that very well about the importance of importance of communication, importance of taking ownership importance of working collectively as a team to solve problems, rather than pointing fingers. So that's not three things is one thing, but that's probably would be the one overarching thing.
Calin FabriĀ 23:14
Thank you. So I think like benchmarking something that you mentioned over and over again, can you benchmark with something that is best in class? And then if you don't do that, and probably there's room for improvement?
Matt MillerĀ 23:26
Yeah. So another CEO I work with, who is really good at this is Jake Krebs, a conflict. J always wants to meet people, great people, wherever they come from whatever they're doing, regardless of what he has going on. He's constantly learning. He's constantly benchmarking. He's constantly trying to bring new in learn new ideas. I think great founders do that. They're constantly it's like they're deciding, oh, hey, look, I like this VP, better than the one I got appeals make a change, but they're constantly trying to meet the best of people in every field, in every area around their business, so they can be constantly improving. And I think that's another thing that really works great founders.
Calin FabriĀ 24:10
Best book that you have read in the last six months and most impactful faux pas is funny.
Matt MillerĀ 24:15
So I saw you, Charlotte, are twos. The question was like I'm most worried about because I haven't read a book. In the last six months, I moved my family to Europe. I changed my house twice. I have three kids. I work at Sequoia I read books, but I like the last six months have been pretty busy. I said, What are the impactful books like The Five Dysfunctions of a Team that's what I really like? I really love Grit by Angela Duckworth, because I really love to look for grit and founders, Tim from testing and is an example of a founder with incredible amounts of grit, like that guy will literally plough himself through a wall to be successful, whatever it takes, and will whether anything, and I love that about him Ryan and Jared Smith at Qualtrics. They're much further along. They are also examples of pure grit founders that will just figure out out any problem that comes their way. So that's a really great book I like is grit from Angela Duckworth, but sorry, I don't have anything exciting to share from the last six months. Hopefully I get settled in, then I'll record again,
Calin FabriĀ 25:13
then I think it's it's good enough. Also, I think you mentioned the trillion dollar coach that I think you recently have read,
Matt MillerĀ 25:19
that is a great book as well. That is a great book as well. And with that, like the importance of having a coach, if you're a CEO, it's so valuable to have somebody who's outside of your board, who can help you in that way, and help you think through building your own career building your team. Anyway, that book exemplifies that. So
Calin FabriĀ 25:41
got it, most thoughtful investor, and or intrapreneur that you have met and admire.
Matt MillerĀ 25:48
Most thoughtful investor and entrepreneur that I admire.
Calin FabriĀ 25:51
You mentioned, Doug. Yeah, Doug, you mentioned that, yeah,
Matt MillerĀ 25:54
the things that I feel like I'm surrounded with such amazing investors that I'm in awe of as my partners, whether it's Doug or Rula, or Jim, or Michael Moritz, or Carl Eschenbach, Pat Grady, like, Andrew Reed, I get to work with some of the most phenomenal people. So it's kind of like every day, I'm blown away by the quality my partners. And it's funny, you mentioned earlier in our conversation, like what made you into the Great Investor you are today, I feel like I'm hanging on by the skin of my teeth, because I'm surrounded by such amazing partners, who do such incredible things. And I learned from them all every day, Luciano be the latest one just being here in Europe and learning from her every day. I mean, just feel as it's like drinking from a firehose, and it's incredible. Yeah, so I'm gonna say my partners and Sequoia probably fit that and with founders, like, I get to work with so many amazing founders, like each one has a different vectors that on which they have such great skills and capabilities, it will be really hard for me to pick one.
Calin FabriĀ 26:49
Yeah, no, I think they'll get upset. It's almost like picking a baby. Who's your favourite?
Matt MillerĀ 26:54
Kids? I can't tell anybody who my feet are three of them. I love them all the same.
Calin FabriĀ 27:01
Exactly. Matt, thank you. Thank you very much for taking the time. But one last question. If you have any as from from the audience that are listening, we
Matt MillerĀ 27:08
always want to hear about great companies. So please never be shy to reach out. One of the one of the biggest challenges we have as people prequalify them out of talking to us. They're like, Oh, this won't be interesting to Sequoia. Don't ever think that please reach out. Please engage with us and we want to help you in any way we can. And we love to hear about new investments, new companies, new founders.
Calin FabriĀ 27:29
Amazing. Thank you. Thank you very much, Matt for for taking the time. Thank you and
Matt MillerĀ 27:33
enjoy Copenhagen. Well do