It’s not every day that you meet the legendary Sir Michael Moritz (https://en.wikipedia.org/wiki/Michael_Moritz) whose firm Sequoia funded Google, Yahoo, PayPal, Zappos, and many other massive tech companies. I was lucky to see & interact with him twice in 2 days in a row. Last Friday (24th) evening, I was invited for the brand new 7 office building inauguration and I saw him for the first time & he briefly spoke about his association with the company and the people PV & Nags (Founders of 7). The next day Saturday morning , I was lucky to be part of some 80 odd people who had the privilege to listen to Mike Moritz through ispirit initiative and ask him any questions they wanted to. For the benefit of everyone, here are the questions and Mike’s answers (abridged & simplified):
- What do you think about the future of Artificial Intelligence?
I do not know what you meant by Artificial intelligence. Similarly, people ask about B2B, B2C etc and I say these are atmost descriptions or means and not a business by themselves. If you ask me specifically about the use cases of artificial intelliegcen, say will drones be useful for business or if robotics will be useful in the future for mankind, the emphatic answer is yes.
- What do you think about IOT?
Again, like AI, IOT is a generic terminology. To me , Google’s driverless cars is an iOT. Uber is an IOT for me where the driver, the car to some extent and the user have all got computing power and are connected. Apparels that have sensors , bathroom fittings that are wi-fi connected are already coming into the market in the west and to me there is a lot of opportunity there.
- What traits do successful Founders have in common ?
Off late, I have worked with Sir Alex Ferguson in understanding how he was successful for 26 years in soccer and how he identifies geniuses in soccer. The book will be out in the next month . However, what I learnt is that most of these football players are obsessed with the football and they come from poor backgrounds but that did not deter them from their obsession. What I observed was that the company becomes the obsession of the founder. Larry Page was obsessed with his algorithms in Standford while doing his Ph.D and Google is what he is. Bill Gates had started coding from age 11 or so and was obsessed with personal computing space. Elon Musk as a child , I learnt was damn interested in space and cars and that transformed into his company. So, most successful Founders are obsessed with their interests and that transforms into a company into which they further get passionately obsessed with persistence thrown in a good measure.
- Lot of people here (India) are imitating Steve Jobs personality but not the innovation. Since you knew Steve so well, what are your thoughts? Is it true that Mark Zuckerberg met you in pajamas and did not pitch?
It’s unfortunate that Steve is not with us but he was a great man. Lot of people dream to give out to the world just one product that is life changing but Steve is one guy who had massive successes with multiple products. What he did with Apple in the 80s, to the ipod to the iphone to the ipad are all unbelievable successes! He was a perfectionist whether it is in his designs or in treating people or about his competition. He would go ahead and do everything too destroy his competition if he wished to. I believe if we could do one thing as what Steve did, it would be great as an outcome. I do not know much about people imitating him here in India.
- We are a 5 years old services company. Do you think VCs can help us launch some products alog with funding?
As I understand, you want to transform from a services to a product company and believe me if a VC were to do, the results would be pretty bad. No, VCs do not help you at this level and you need to have a product that solves a need.
- With every entrepreneur focusing on raising money and with Indian companies heating up on crazy valuations, how do you see the game playing out ?
On valuations, I only look at how much gross margin can your company make once it is at steady state. If you say its 10% over your cost, Iam least interested and interest levels increase once you start saying that my gross margin is more than 50%? As you increase margins, the interest levels go up and valuation are a consequence of that.
- Why are people always talking about products and services and not about solutions?
I think everything is a solution to a problem whether it’s a product or a service . I do not understand what you mean by solution.
- Are there only particular industries in which India will excel?
Hmm.. Let’s look at global companies that were not formed in the US. Skype is one success. If you take enterprise software or consumer companies or any field, most of it came from US companies. If you take DJI, the Chinese drone company, it is a world class one. When I got one , I thought it was an American product. Practo one of our portfolio companies is connecting Doctors and patients beautifully in India but I can tell you that it won’t work in the US at all. So, there are geography limitations of companies and truly global companies will have to emerge from across the world to see trends.
- What do you think about Indian entrepreneurs?
My first interaction was with a person called Romesh Wadhwani who told us about the immense potential of Indian engineers during the 80s. We just saw and then we started investing in small US companies that have Indian founders and then slowly started coming towards India.
Indians are very hardworking, can get lot of things done with very little and see this! A testimony – you would not find so many people on a Saturday morning in America listening to me.