00:19:24 · Scott Kupor, David Senra
So to this day, right, if you go to Sequoia, who's an amazing, you know, player in the space, you if you go to their conference rooms, you'll see Cisco in the... You know, a poster of Cisco and Apple and, you know, Google and all these other things. Like, we had none of that. Right? We had... Marc and Ben had done their own, you know, angel investing, and, of course, the two of them had had success as entrepreneurs, but, like, we couldn't compete against that. So, what they rightly did was they said, Look, if we can't compete on what people are competing on today, we have to change the rules of the road and go compete on something else. And so, they created this category was, okay, the new venture capital firm is going to be not just capital, it's but going be capital plus plus, right? It's going to be plus this whole network of people whose job it is to help the entrepreneur. It's in servicing the entrepreneur. That's exactly right. So that was a huge major, major difference that they did, which also played out really well. We got a lot of shit from all the other VCs on Sand Hill. They're like, look. It's, you know, for Bowton to market and all this other stuff. We would... I I remember because I was talking about all of our LPs every day, and they're like, oh, so and so, you know, we heard we heard this from, you know, one of your competitors, and it was always, look. These guys talk a big game, and they, you know, tell people stuff before they've done it. And we're like, you know, we're [00:20:31] S1: doing Sounds like an entrepreneur to me.
00:20:31 · David Senra, Scott Kupor
[00:20:31] S1: doing Sounds like an entrepreneur to me. [00:20:32] S2: Yeah. We're doing exactly what any entrepreneur would do, which is, like, we were trying to create a category. You have to tell the category. You have to actually tell your narrative. And and look, had to deliver on it at the end of the day, which we did. It was just such a unique way to approach the business, not just the foundations of the business model, but the idea that we were gonna actually create a marketing strategy around that that, enabled the firm to grow at a pace that I don't think anybody's ever anticipated. [00:20:54] S1: So it sounds like at the beginning you were much more operational. Yes. As your tenure continues, did you switch over to investing, you always were operations? How did
00:21:02 · Scott Kupor
[00:21:02] S2: I you did, yeah. So I remember when I first came, I was like, you know, what do you want me to And they're like, well, we're gonna invest, and you're gonna do everything else. And I have to admit, like, you know, my ego for a little while was kinda hurt. I was like, okay. Well, why can't I why can't I also invest? Right? What I came to realize, particularly what they were... At the time they were doing early stage investing was, I'm not a deep technologist like these guys are, and so much of that game, I believe, is your ability to actually understand the technology at a way more granular level. So we sit in pitches all day long. And if you don't understand databases, for example, you can hear 10 pitches about database companies, and unless you have that depth of knowledge, the honest answer is you have no fucking clue, like, which one is the right one to invest in. And so, I ultimately assuaged my ego by saying, okay, look, like, that's not my strength, basically, and so I need to focus on the stuff that I think I can do. What happened over time was we changed the nature of the firm. This is another thing that I heard Ben talking about this on another podcast not too long ago, which was we started with a centralized firm, right? So everything reported to me, we grew that for about ten years till about 500 people or something. So all of those operating functions reported to me, even like the investors essentially reported to me. Marc Andreessen didn't really have any direct reports. What they realized over time, which was brilliant, was you can't scale a venture firm in that fashion. So there were two reasons. One was they said, look, like, we can't have 20 people sitting around when we're doing software in the world, and we've got crypto and health care and bio and, you know, American Dynamism and all these other things going on. You have to specialize. And so we started a process ten years into the firm where we basically decentralized the firm. And we said, look, like, we're going to have smaller investing teams that are going to be domain specific. So we're going to have a crypto fund that Chris Dixon runs, and we're going to have an American dynamism fund that David runs, and we're gonna have AI infrastructure that this guy, Martin, runs, and and on and on. And then we said, look.
00:22:46 · Scott Kupor
In order to do that right, the needs of the entrepreneurs are different. So all of these, like, ancillary operating services we built, they all also need to feather in into these different verticals that we can do the things that are appropriate for the entrepreneurs. So, like, what a gaming entrepreneur needs in terms of business development support is totally different than what a life sciences entrepreneur needs. And so we went through this process of basically, you know, disaggregating everything into these structures, and we just kept a few things centralized that made sense. Like, so legal and finance. Right? Core compliance functions. Look. You don't necessarily want people doing those separately on their own. Let's keep those centralized, you know, investor relations. Right? From an LP's perspective, their view is, look. Like, I want to interact with Andreessen Horowitz as a firm. I don't wanna have to, like, build completely independent relationships. So we kept feeling centralized. And so what that did for me, which admittedly, I will say, and, you know, Marc Andreessen, I fought initially because when you go from owning everything, right, you go from owning everything, you're like, wait a second. I all of a sudden feel like my domain got a lot smaller. In fact, actually, Ben, I heard him talk about this on a podcast. He said exactly what I felt, which is true. It's like, anytime you do a reorg in a company, you know, you always get a lot of hurt feelings. Right? Because by definition, somebody in a reorg has fewer things than they used to have. Basically, that's just the nature of it. It took me a while before, again, this was another one where my ego got hurt. Was like, Wait a second. I thought I was doing a pretty damn good job managing these things. Marc Andreessen said, Look, we're not saying you're not doing a good job. We're saying the needs of the business have changed, the needs of the business demand that we do this, and so let's go find other ways in which you can add value to the business. So that was kind of when I finally got an opportunity to start doing some investing, and what I recognized again was, look, I can't do early stage tech investing because I'm just not a domain expert, and so we started a later stage fund, we call it later stage venture, for lack of a more creative word. And we started that in 2019.
00:24:32 · Scott Kupor, David Senra
We brought him in a guy named David George from GA, General Atlantic who had been doing this. He was great. And so I basically started working with David and kind of carved out more of, like, doing stuff on the health care side. So by the time I left for government, I had about 15 companies that I invested in, about 10 of which that I was sitting on the board of, but doing stuff where the evaluation of the company was more about the operational successes and kind of the opportunity for the company from, like, one to infinity as opposed to the zero to the one side of investing, which I just didn't feel like I had the right skill set to do. [00:25:01] S1: So you just mentioned it, then you decide to leave after sixteen, seventeen years, you take a hard turn- [00:25:08] S2: Do you think so? [00:25:08] S1: I sure do think so. Into government. Why? [00:25:12] S2: Yeah. My wife asked me that a lot too. Look, this seems to [00:25:16] S1: be a reoccurring theme with your My wife questioning
00:25:18 · Scott Kupor
[00:25:18] S2: your wife is way smarter than I am, and her job is mostly, yes, to question, like, what the hell am I doing? So the historical reason was I had literally done policy stuff starting in... Literally in high school, actually. I worked for a group back in high school that used to do health care policy research, so we were trying to figure out... We were doing breast cancer screening stuff. Right? You know, like, do the economics look like? And then when I went to Stanford, I worked for a professor, this guy named Alan Garber, who's actually now the president of Harvard, doing stuff around prostate cancer. Right? Which is okay. Like, does it make sense to screen large populations of men for prostate cancer? And I won't go into details, but it turns out there's these weird nuances of prostate cancer. The basic answer is most men die with some form of prostate cancer. Very few men die of prostate cancer. And so screening broad populations can be problematic because you will catch a lot of stuff that never would have actually had health outcomes. Anyway, so I've been doing that, and then when I went when I went to Stanford through law school, I actually worked for another guy who... His name is in the news today, a guy named Jay Bhattacharya, who now runs the NIH, if you follow that. Jay was a researcher at Stanford. I was his grunt. I used to do, like, modeling for him for this policy group that worked on. So I always had these, like, interests in policy, and then whatever, life kind of intervened, and I ended up obviously going in a different path and going to the private sector. But at some point in my bucket list, I always thought I'd do policy stuff. The reason now was really a couple of things. One was just from a personal perspective, like, was the right time in my life to do this. So my kids were all out of the house at this point in time. Marc and Ben were incredibly gracious and said, hey. Look. If this is what you want to do, like, we're happy to support it. You know, they were... They enabled me to kind of transition my stuff off and, you know, gave me the freedom to do that. And obviously, I've been very lucky just financially along the way to have the means to be able to kind of take a break from the business.