We’re delighted to add our voices to the growing choir shouting words of admiration and congratulations to Sam Altman on his new role as president of YC.
We were fortunate to have gotten to know Sam when he founded Loopt, where we became an early business partner and investor. He was still underage when we proposed going out for celebratory drinks after signing the term sheet. Even from the beginning, it was clear to us that Sam is whip smart and possesses a keen understanding of how technology will change our lives. That’s why we weren’t at all surprised when years later, after Greendot acquired Loopt, it added Sam to its board.
There is no doubt that Sam is an operator who knows how to scale businesses and navigate his way around Silicon Valley. These qualities, in addition to his experience as a founder, makes him a uniquely great choice to lead and scale YC and continue to disrupt the way interesting companies are built in the future.
Four Numbers That Explain Why Facebook Acquired WhatsApp
WhatsApp Co-Founders Jan Koum and Brian Acton
Earlier today, Facebook announced its acquisition of WhatsApp for $16 billion. It’s a spectacular milestone for the company’s co-founders Jan Koum and Brian Acton, and their remarkable team.
From the moment they opened the doors of WhatsApp, Jan and Brian wanted a different kind of company. While others sought attention, Jan and Brian shunned the spotlight, refusing even to hang a sign outside the WhatsApp offices in Mountain View. As competitors promoted games and rushed to build platforms, Jan and Brian remained devoted to a clean, lightning fast communications service that works flawlessly.
This approach has served WhatsApp well and its users better. WhatsApp has done for messaging what Skype did for voice and video calls. By using the Internet as its communications backbone, WhatsApp has completely transformed personal communications, which was previously dominated by the world’s largest wireless carriers.
For the past three years, it’s been our privilege to work shoulder-to-shoulder with Jan and Brian as their close business partner and investor. It’s been a remarkable journey, and we could not be happier for these talented underdogs whose unshakeable beliefs and maverick natures epitomize the spirit of Silicon Valley.
Those less familiar with WhatsApp and its wonderful product will marvel at how a young company could be so valuable. Many of those people will be in the U.S. because there’s no other home grown technology company that’s so widely loved overseas and so under appreciated at home. WhatsApp reminds us of other companies that we partnered with — like PayPal, and YouTube — whose founders chose a similar path to Jan and Brian. Today PayPal and YouTube are both household names around the world. Tomorrow the same will hold true for WhatsApp.
The Bet-the-Company Pivot That Led to Nimble Storage’s IPO
In July 2009, Varun Mehta—a first-time founder—was driving toward a courageous decision: giving up a sure success for a long shot at disrupting a major category.
Nimble Storage, the company he started 18 months earlier with Umesh Maheshwari, was testing its product, a flash-based caching appliance, or “cacher,” that sat on top of existing storage systems and dramatically improved I/O performance. Beta customers loved the cacher and it looked like a hit. Shockingly, Varun and Umesh wanted to kill it. Instead, they proposed building a primary-storage system that incorporated flash, a much bigger opportunity, but a far riskier one.
“I loved Trivial Pursuit as a child, so I was drawn to Thor’s marvelous vision of developing a trivia network on mobile that thoughtfully integrates social features. QuizUp taps our desire to learn, keep in touch with friends and connect with strangers who share our niche interests.”—Roelof Botha on our latest partnership QuizUp in VentureBeat
A Conversation on Philanthropy with Bill Gates and Sir Michael Moritz
Giving away $30 billion is hard—at least if you want to do it well.
Bill Gates, the world’s greatest active philanthropist, has not only given away that much, but he’s built a foundation that is capable of making sure that money is spent on projects that will make a big difference in the world.
At Sequoia, we’ve long worked with nonprofits and other philanthropic organizations. These groups make up most of our investors, meaning the profits generated by the companies we partner with support their work. So we were thrilled when Bill agreed talk to members of our extended community about philanthropy.
The event took place last month at Airbnb’s new San Francisco headquarters in front of an audience of about 200.
In a wide ranging conversation, Bill and Sequoia’s Sir Michael Moritz discussed which problems are best left to the market and which require philanthropic intervention, the political and geographic problems that often prevent scientific breakthroughs from reaching the people who can benefit from them, and how to get involved in philanthropy even as you work full time.
Exceptional entrepreneurs can still succeed in a market that already seems saturated, especially if they combine a simpler product with a better business model. That’s the lesson from Barracuda, which is going public Wednesday.
Dean, Michael and Zach in 2000 founded Affinity Path, a white label ISP for universities, churches and other nonprofit organizations. Email spam was just becoming a big issue. They would have needed to spend 10 times as much on its infrastructure to handle all the unwanted messages.
Companies like Postini and IronPort were already trying to stop spam. But Dean, Michael and Zach concluded they were too costly and complex.
Instead, the team developed its own solution for blocking spam.
Smartphones have redefined people’s expectations for how and where they work. These days, you can respond to an email from an airplane and update a website from the beach.
But don’t you dare get a glass of water when you’re expecting an important call on your office line.
RingCentral is going public today in no small part because it’s managed to fuse office communications with today’s anytime-anywhere reality. Unlike traditional office phone systems that are fixed to a single device and a single location, RingCentral allows employees to send and receive calls, voicemails, texts and other communications on any device from any place. That means no more being tethered to the desk waiting for that client to call.
The modern shopper looks very different from the consumer of just a decade ago. Not only can she buy just about anything she wants from any number of online stores, but now that she has a smartphone, she can buy those things from anywhere and at any time she chooses.
U.S. consumers spent over $4 trillion at retail last year, 95% of it at traditional brick and mortar stores. But each year, consumers shift more and more of their spending online.
The proliferation of smartphones has so far contributed to that shift, most notably with the rise of showrooming, when people find an item they like in a store and order it at a discount from an online retailer.
But smartphones can also fuse the online and real-world experiences in a way that makes in-store shopping better. There’s a large opportunity to help retailers influence shoppers as they’re considering purchases.
Shopular has a unique vision for how to enhance the in-store shopping experience and we’re pleased to announce today that we’ve partnered with them to build a company around it.
In September 2004, Ashar Aziz took up residence at Sequoia, working by himself out of a windowless office that’s since become a server closet.
He had recently shared with us his vision for how computer attacks were likely to evolve and an innovative way for detecting them that took advantage of virtualization—the first time we’d heard anyone consider the technology for something other than simulation or efficiency gains. It made a lot of sense to us, so we provided him with seed funding and invited him to work out of our office in Menlo Park. He stayed here for nine months.
Every startup has ups and downs, but FireEye’s story stands out. That the company is now a publicly-traded one with a bright future ahead of it is a testament to Ashar’s and his team’s foresight, conviction and perseverance.
People are buying an ever-growing number of things through app stores, including music, games and productivity tools. This has given rise to a new digital economy that has emerged over the last several years with app stores at the epicenter.
There are whole companies that only sell through app stores and these days one would be hard pressed to find a large business that isn’t trying to reach customers that way, too. Airlines, banks, media companies and retailers all have their own mobile apps.
But it’s still hard getting any sort of meaningful information about how this new economy really works. App Annie is the first company we’ve found that offers meaningful market data and an analytics platform that allows people to see how mobile apps are faring. More than 300,000 apps are being tracked by their creators using App Annie, providing them with analytics on downloads, revenue, and rankings across several app stores. So far, the company has tracked over 25 billion downloads and $6 billion in app-store revenue.
The way people work is changing in profound ways, as a new class of company - the data factory - makes powerful tools accessible to the masses for the first time. The changes wrought by these data factories may come to exceed the changes and dislocations produced by the companies that sprung up during the industrial revolution.
We are at the dawn of the “Personal Revolution”. While the epicenter of the Personal Revolution has been California’s Silicon Valley – its shocks are being felt around the world. The Personal Revolution is changing the way people work, live and play. For the educated, skilled and enterprising, it promises much. For many others it means great hardship.
We spelled out our thoughts about the Personal Revolution at TechCrunch Disrupt this week.
So much of our lives are public these days. We share updates on Facebook, Instagram and Twitter, and, in the age of smartphone cameras and 4G networks, every interaction we have could end up online somewhere.
One byproduct of this digital life is that we’re always on, making sure we present the versions of ourselves we most want people to see. That creates a lot of pressure, especially for students and recent college graduates who spend so much of their lives in the presence of friends and roommates.
That’s why Whisper makes so much sense. Whisper is a mobile social network where people share secrets anonymously. You choose a picture, write a short confession and post it. Others respond with their own whispers or send direct messages, which are also anonymous.
A lot of high-school students spend their summers lifeguarding, scooping ice cream or mowing lawns.
Twenty young women in the San Francisco Bay Area spent the last eight weeks learning how to write code, design games and build mobile apps. More than 300 hours of training culminated last week in one of our conference rooms on Sand Hill Road where the girls pitched their ideas.
One of the girls was Lexi Grubman, a 16 year old from San Jose, who’s on her school’s robotics team.
But when her vice principal approached her about the summer program, run by the non-profit organization Girls Who Code, she hesitated. “I wasn’t sure about coding,” she says. She didn’t want to be a programmer.
It costs about $1.8 billion to bring a new drug to market, with more than 90% of that spend on clinical trials. It’s a huge process, made all the more complicated by the myriad databases and software programs researchers use to track and analyze the results.
Today, we’re partnering with a company with big plans to make it easier to run trials.
Comprehend, which has innovative reporting, analytics and collaboration software, has been on our radar screen since 2010, when we met Rick and Jud at YC. We were re-introduced earlier this year and since then we’ve watched leads turn into pilots and pilots turn into purchase orders.
Recently, Drew and Bryan Schreier, who represents Sequoia on the Dropbox board, sat down for a joint interview with Leena Rao of TechCrunch. It was published last week in three parts, which we’ve included here.
Part one. Drew reveals how he learned what to expect from top executives and how the company’s momentum helps attract talent. Bryan describes how hiring has changed since Google’s early days.
Part two.Drew discusses why he likes to stay on the edge of his comfort zone and the importance of anticipating the new skills he’ll need at least six months in advance. Bryan discloses Dropbox’s original code name. View on TechCrunch.
Part three. Bryan and Drew talk about companies that seem to be focused solely on consumers and why they are often the ones best positioned to target businesses. View on TechCrunch.
Walk into any Starbucks during business hours and you are likely to find smartly-dressed people on their phones or iPads, reviewing documents in Dropbox, looking up accounts in Salesforce.com, or pounding out messages in Gmail. It’s the kind of everyday activity that makes people much more productive – but it also gives IT departments heartburn. That, in a nutshell, is why we are thrilled to partner with Skyhigh Networks.
Everyone, I’m elated to tell you that Tumblr will be joining Yahoo.
Before touching on how awesome this is, let me try to allay any concerns: We’re not turning purple. Our headquarters isn’t moving. Our team isn’t changing. Our roadmap isn’t changing. And our mission – to empower creators to…
“There’s nothing more invigorating than being deeply involved with a small company and a young team of founders out to do something incredibly special. And everybody’s betting against us. It’s another mission impossible.”—Michael Moritz to Charlie Rose
This article was originally published by The Financial Times and is now available on ft.com.
It is ironic that both Dell and Apple shared big news last week.
Back in 1998 Michael Dell, then the crown prince of the personal computer industry, recommended that Steve Jobs shut down Apple, which was in dire shape, and distribute the proceeds to shareholders. By contrast, reflecting the turmoil now afflicting all PC makers, Mr Dell is negotiating to borrow money to make his company disappear from public view. Apple, meanwhile, announced that its shareholders would receive a Valentine’s day dividend of $2.5bn – a tiny portion of its $137bn cash pile.
But Apple earnings announced on Wednesday, and the subsequent fall in the value of its stock, grabbed more headlines than Dell’s prospective leveraged buyout. Moments after the financial figures were released, which showed a slowing growth rate, soothsayers took their gloomy predictions to the Twittergraph. The hordes who bought Apple stock in the past few years stampeded for the exits.
Immigration Reform: Stop Ejecting the Brightest Minds From America
Let’s hope Congress does not flinch as it begins the debate about immigration reform because the future is passing through security – in the wrong direction. It leaves the United States on every departing airplane carrying a foreign born student who has graduated from an American university with an advanced degree in the sciences, technology, engineering and math. The majority of these people want to stay in the United States but because of existing immigration laws, they have no choice but to leave.
In Silicon Valley, which has always been blind to any attribute other than ability, everyone knows that the remarkable achievements of the foreign born have led to the formation of companies such as Google, Intel, Sun Microsystems, nVidia, Yahoo! PayPal and scores of others that are less well known. Of the last eleven early stage companies that have allied themselves with Sequoia Capital, seven have had immigrants among their founding lineup. This is not a sudden or recent phenomenon; it has been the leitmotif of our business since the 1970s. However, the number of startups would be even higher if we weren’t ejecting foreign-born students and if we welcomed their contemporaries who have been educated overseas. Today, it is impossible to satisfy Silicon Valley’s appetite for engineers and scientists with people born in America.
Cisco acquires Meraki: how 3 guys from MIT transformed the networking industry
Quick: when was the last time you plugged in an Ethernet cable? If you have trouble answering that question, you’re one of the reasons why Cisco has agreed to acquire Meraki.
Six years ago Sanjit, John and Hans saw our Wi-Fi world before many others. Meraki offered smaller wireless ISPs a complete package to roll-out wireless networks without a lot of time, money or expertise. It gave upstart ISPs a way to enter new markets and disrupt existing ones. The benefits were obvious: the ability to scale without wires, low cost of entry, ease of use, and network analysis tools to help operators maximize revenue from their small networks.
I’ll always remember meeting the guys for the first time. We were introduced by Rajeev Motwani, Larry & Sergey’s thesis advisor at Stanford. They were a bunch of MIT PhDs who had built a very proprietary solution as part of their own thesis called RoofNet. They were clearly world-class, super smart and personable. I bought their product to test it out. It was so easy to use, I set up a wireless network myself in minutes. You just plugged in the box and it worked. That’s all we needed to see. Chris Sacca, who was at Google at the time, was equally enthusiastic. Google bought 1,000 routers and invested as well.