Humble Beginnings SEQUOIA CAPITAL

AMManagement

Nov 2, 2011 (5 years and 5 months ago)

1,014 views

Jim Goetz (goetz@sequoiacap.com)

Humble Beginnings

© 2011 Sequoia Capital

V I TA L S I GN S

A Little Personal History

2

THINGS


© Play Bigger Advisors


FOUNDERS


IDEA


TIMING


© 2011 Sequoia Capital

NOW

4

© 2011 Sequoia Capital

THEN

5

© 2011 Sequoia Capital

NOW

L A R R Y

P A G E

6

© 2011 Sequoia Capital

T HEN

1 9 9 8

L A R R Y P A G E

S E R G E Y B R I N

7

1999

2004

TODAY

Series A

IPO

Market Cap

$7.5M

$27B

$194B

© 2011 Sequoia Capital

NOW

J O H N

C H A M B E R S

8

© 2011 Sequoia Capital

T HEN

1 9 8 7

9

1987

1990

TODAY

Series A

IPO

Market Cap

$1.9M

$
224M

$95B

S A N D Y

L E R N E R

L E N B O S A C K

© 2011 Sequoia Capital

NOW

J E F F
W E I N E R

10

© 2011 Sequoia Capital

T HEN

2 0 0 3

R E I D

H O F F M A N

11

2003

2011

TODAY

Series A

IPO

Market Cap

$4M

$4B

$9B

© 2011 Sequoia Capital

NOW

O M A R

H A M O U I

12

© 2011 Sequoia Capital

T HEN

2 0 0 6

O M A R

H A M O U I

13

2006

2010

Series A

Acquired

$3.3M

$750M

© 2011 Sequoia Capital

14

PROPS TO PAUL, JESSICA & TEAM

P A U L

G R A H A M

J E S S I C A
L I V I N G S T O N

© 2011 Sequoia Capital

T HE

F OUNDERS

CODE

TM

Iterate

Failures

Focused

Insight

Long
-
term

Underdogs

Unconventional

Relentless

Agility

Rebels

Misfits

15

THEY WERE ONCE IN YOUR SHOES

16

© 2011 Sequoia Capital



Idea

© 2011 Sequoia Capital

UNI QUE & COMPEL L I NG

18

© 2011 Sequoia Capital

Obvious

Lots of
competitors

Easy to build

50% improvement

Too Early

Unique
or

novel

Handful of niche players

“Turing” award

10X better

First Mover


CREAT I VE

T ENSI ONS




Timing

© 2011 Sequoia Capital

1973

1975

1977

1979

1981

1983

1985

1987

ATARI

TANDEM

APPLE

AMCC

LINEAR TECH

LSI
LOGIC

3COM

ORACLE

SYMANTEC

EA

CISCO


S&P DECLINE 1973


74 43%

1980


82 17%

1987 30%

FLEXTRONCIS

NVIDIA

INS

2000
-
02 44%

1998 15%

1989

1991

1993

1995

1997

1999

1990 15%

GOOGLE

RACKSPACE

YAHOO
!

NETAPP

REDBACK

PAYPAL

NETSCREEN

MICROCHIP

ARBOR

DOCUMENTUM

ARUBA

ISILON

LINKED
-
IN

YOUTUBE

PALO ALTO

KAYAK

UNITY

POCKETGEMS

BUMP

AIRBNB

SQUARE

TUMBLR

MONGO

2001

2003

2005

2007

2009

2011

GREENDOT

SOURCEFIRE

ZAPPOS

ADMOB

FIREYE

DROPBOX

JIVE

2007


08 16%

UPS AND DOWNS

21

© 2011 Sequoia Capital

marketplace

App Store

2000

2011

$ STARTUP COSTS

INTERNET/MOBILE START
-
UP COSTS


DROPPED
90%

22

© 2011 Sequoia Capital

MOBILE OUTPACES PC, INTERNET RAMP

23

1994

100M
users

1998

100M
users

2007

iPhone

1996

AOL flat
-
rate
pricing

PCs

~7 years
from 10
to 100M

Internet

~5 years
from 10
to 100M

Mobile
Internet

<4 years
from 10
to 100M

2005

1B
users

2005

800M
users

1980

1990

2000

2010

2005

10M
users

1987

10M
users

1993

10M
users

1990

HTTP, web
browser
invented

1976
-
78

Apple, Microsoft
founded

2002

First RIM
Blackberry
launched

© 2011 Sequoia Capital

POST
-
PC RAMP TO 10 BILLION

24

© 2011 Sequoia Capital

THE WEB GRAVITATED TOWARDS


FREE
+ AD SUPPORTED

Payment Upfront

Payment Ongoing

Free

Contract

Paid

None

Advertising

Lead
-
gen

Training &

Support

Premium

Subscription

In App

Content

Transaction

Based

SaaS

Web

2000s

25

© 2011 Sequoia Capital

NEW AND DIVERSE MODELS ARE BEING EXPERIMENTED
WITH IN THE MOBILE ECONOMY TODAY

Payment Upfront

Payment Ongoing

Free

Contract

Paid

None

Advertising

Lead
-
gen

Training &

Support

Premium

Subscription

In App

Content

Transaction

Based

26




…Great Causes

© 2011 Sequoia Capital


Top VC Firms Benefit From Wave of IPOs


Silicon Valley's technology boom
is giving a lift to the venture
-
capital
industry
. But many of the
gains are being disproportionately reaped
by
brand
-
name venture firms, which are benefiting from a wave of Internet IPOs
and the soaring valuations of closely held companies….

N O T T H E R E A L S T O R Y

T H E R E A L S T O R Y

MacArthur Foundation

International Justice

© 2011 Sequoia Capital

T H E R E A L S T O R Y

Rockefeller Foundation

Community Safety and Survival

© 2011 Sequoia Capital

Sloan Kettering

Cancer Research and Treatment

T H E R E A L S T O R Y

© 2011 Sequoia Capital

T H E R E A L S T O R Y

Moore Foundation

Ecosystem Conservation

© 2011 Sequoia Capital

T H E R E A L S T O R Y

Wellcome Trust

Biomedical Research

© 2011 Sequoia Capital

T H E R E A L S T O R Y

MIT

Student Scholarships

© 2011 Sequoia Capital

© 2011 Sequoia Capital

Alfred I Dupont Trust

Amherst College

Barr Foundation

Boston College

Boston University

Bowdoin College

Brown University

Bush Foundation

Claremont McKenna

Colby College

Columbia University

Cornell University

Dartmouth College

Duke University

Georgia Tech Foundation

Harvard University

Hewlett Foundation

James Irvine Foundation

Johns Hopkins University

Macarthur Foundation

Moore Foundation

MIT

Northwestern University

Norwich University

Princeton University

Rensselaer

Rw Johnson Foundation

Rockefeller Foundation

Smithsonian Institution

Stanford University

The Ford Foundation

University Of Chicago

University Of Minnesota

University Of Notre Dame

University Of Rochester

USC

Vanderbilt University

Washington University

Wellcome Trust

Wellesley College

Williams College


G R E A T C A U S E S

35

Q & A

goetz
@sequoiacap.com

THEY WERE ONCE IN YOUR SHOES

37

© 2011 Sequoia Capital

© 2011 Sequoia Capital

J O I N U S

38

Jim Goetz (
goetz@sequoiacap.com
)

Thank You