20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 26 August 2019
⏱️ 26 minutes
🧾️ Download transcript
Summary
Mike Vernal is a General Partner @ Sequoia, one of the world’s leading and most renowned venture firms with a portfolio including WhatsApp, Zoom, Stripe, Airbnb, Github and many more incredible companies. As for Mike he has led and sits on the board of Citizen, rideOS, Rockset, Threads and Houseparty (acquired by Epic). Prior to venture, Mike spent 8 years at Facebook as VP of Product & Engineering leading multiple different teams including Search, Commerce, Profile, and Developer product groups. Prior to Facebook Mike spent 4 years at Microsoft as a PM lead in Microsoft's Developer Division.
In Today’s Episode You Will Learn:
1.) How Mike made the move from VP of Product & Engineering at Facebook to General Partner at the world-famous, Sequoia Capital? What were Mike's biggest takeaways from his 8 years at FB seeing the hyper-growth first hand?
2.) Mike has previously said that he has struggled in the past when it comes to "overthinking investments". What does he mean by this? How does it play out in reality? How does Mike balance between trusting his gut and relying on the data? How does Mike think venture partnerships should participate in this balancing act?
3.) Why does Mike believe decision-making in venture to be fundamentally different to decision-making in operations? How do they compare? How does the decision-making process and approach change as a result of this contrast? How does Mike think about his own time allocation now in venture? What is the most challenging element?
4.) How does Mike evaluate the proliferated SaaS landscape today? Why does Mike believe that the notion of SaaS as a construct will fade over the coming years? What does Mike believe is the reasoning for SaaS apps becoming more and more niche? What problem does that pose for VC? Will we enter a period of consolidation in SaaS? What size do the incumbents have to be to really engage in the M&A process moving forward?
5.) Why does Mike struggle to see the strength of data moats? What are the major downfalls associated with the argument of their strength? At what point is the asymptotic point of the utility value of the data for models today and how does that change over the coming years? What does Mike instead see as durable and sustainable moats?
Items Mentioned In Today’s Show:
Mike’s Fave Book: One Hundred Years of Solitude
Mike’s Most Recent Investment: Verkada
As always you can follow Harry, The Twenty Minute VC and Mike on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Transcript
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| 0:00.0 | Hello and welcome to the 20 minute VC with me, Harry Stebbings. I'm always looking to improve the show and to make it the best experience for you that I can. |
| 0:06.7 | And so I would love to hear your feedback. You can hit me up on Instagram at H. Stebbing's 1996 with 2Bs. It'll be great to see you there. |
| 0:13.5 | But to the show stay. And I'm so excited to feature someone that I've heard so many great things about from prior guests on the show. And so with that, I'm delighted to welcome Mike Vernal, partner at Sequoia Capital, one of the world's leading and most renowned venture |
| 0:24.8 | firms with a portfolio including the likes of WhatsApp, Zoom, Stripe, Airbnb, GitHub, and many more |
| 0:31.3 | incredible companies. As for Mike, he's led and sits on the board of Citizen, RideOS, Rockset, |
| 0:37.2 | Threads and House Party, which was recently |
| 0:39.1 | acquired by Epic. Prior to Venture, Mike spent eight years at Facebook as VP of Product and Engineering, |
| 0:44.2 | leading multiple different teams, including search, commerce, profile and developer product groups. |
| 0:49.3 | Prior to Facebook, Mike spent four years at Microsoft as a PM lead in Microsoft's developer |
| 0:53.5 | division. |
| 0:57.6 | I'd also want to say a huge thank you to the wonderful Pat Grady for the intro to might today. I really do so appreciate that, Pat. But before we dive into the show today, we need to talk |
| 1:02.5 | about Air Base, the ideal cloud-based spend management platform for growing startups. It's a game |
| 1:07.3 | changer for finance teams that need to keep up with company growth, and for me, |
| 1:10.9 | it's so awesome for three key reasons. |
| 1:13.0 | One, you can use Airbase to issue virtual and physical cards for card payments, as well as |
| 1:17.6 | checks and ACH transfers for invoice payments. |
| 1:20.3 | Second, they have an incredible pre-approval system for expense requests, meaning you see |
| 1:24.4 | expenses as employees request them instead of only learning about them when |
| 1:27.9 | the statement comes in at the end of the month. And finally, because all of the transactions flow through |
| 1:32.0 | the Airbase system, they can help automate a lot of the accounting work, like coding expenses, |
| 1:36.7 | collecting invoices and receipts, and much, much more. And that's why the likes of Gusto, |
| 1:40.9 | front, and segment all love Airbase, and head over to Airbase.com to book a demo |
... |
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