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TR: How about “first to market”?

MM: An utterly dreadful phrase. I way prefer to focus on how a company becomes first in market.

TR: And “passion”? You’ve cited Steve Jobs and Steve Wozniak at Apple and David Filo and Jerry Yang at Yahoo! as examples of entrepreneurial drive. But the same could be said about the founders of eToys and Webvan, and look how they turned out!

MM: People who haven’t worked at a small company don’t understand how difficult it is to get one off the ground, and the amount of drive and tenacity and enthusiasm-passion, in other words-you need in order to build the business out of nothing. Yes, some of them go awry; many of them disappoint.

TR: Was the problem in the late ’90s just too much money?

MM: It certainly flew in the face of everything that we try to preach, about how the best venture capital returns actually come from companies that don’t take a lot of capital to get off the ground and that get profitable fairly early.

TR: What’s the worst company you’ve ever put money into?

MM: We fail a lot and make tons of mistakes. But clearly the worst investment we ever made-not the worst company, by the way-was Webvan. It was a 16-wheeler nightmare. I feel a migraine coming on as soon as I think about it.

TR: You’ve had companies where the founders tried to kill each other

MM: The little companies we invest in are stacked with all sorts of human drama. Some of the soap operas would just stun you. We did indeed have a company where one cofounder drove a pickup truck through a plate glass window in an effort to exterminate another. It was a more dramatic example of the gulfs that sometimes occur between management teams or cofounders.

TR: Midnight phone calls?

MM: The dreadful news travels a lot more quickly than the good news. We had a call just this morning-a new CEO frantically announcing that a creditor had swept all the cash out of their bank account. That was eight hours ago.

TR: You’ve done investments in less than 24 hours.

MM: Frequently they’re ones we come to regret.

TR: Are there things you won’t even look at?

MM: You’ll think I’m kidding, but again, I got an e-mail this morning about some guy who wanted to know whether we’d consider investing in pig farms in Russia. A little bit beyond the ken, but we will look at every business plan; we’ll look at every e-mail for the sectors we work in.

TR: What’s the best idea Sequoia Capital has turned down?

MM: Silicon Graphics. And more recently, Netflix. It came along during a period when we didn’t have enough time to think-there was such a hurricane of new ideas every day.

TR: Best idea that you wish you’d had a chance to turn down?

MM: Expedia, but Mr. Gates owned that one.

TR: Entrepreneurs are often associated with risk taking. What’s the risk-taking weather report? Did people go into hibernation again on risk taking for the last couple of years?

MM: Yes, they certainly did, although you could look at it the other way: the people that you really want to be in business with are the people who have the fortitude to want to try and start a business precisely at the time that everybody else doesn’t.

TR: Do you see the PC’s status diminishing?

MM: Potentially, but I think computing in general will play an ever bigger part of everyone’s life. I remember 25 years ago listening to Gordon Moore telling about all these computers that would be in cars, refrigerators, and everything else. Well, I just sold one car that had too many computers-they all kept going wrong.

TR: Outsourcing: are you worried that “jobs moving overseas” will undermine support for free trade, with calamitous effects on the world economy?

MM: Outsourcing will have calamitous effects on all the people who are in denial about it. We have investments in a company called 24/7 Customer that operates call centers in India. It makes the companies here that use its services much stronger companies.

TR: The Internet: over- or underhyped?

MM: I’d say underused compared to where it will be. We don’t spend a lot of time here thinking about the economy or talking about the information economy or the industrial economy. We just want to invest in a business or a company-to be the entrepreneurs behind the entrepreneurs. I know that sounds simplistic, but it’s the reality of what we do.

TR: Last chance for a lesson from your amazing run of “luck” launching Internet companies?

MM: Small amounts of money, tight groups of very focused people, an unwillingness to splurge when temptation calls, constrained infrastructure, outsourcing all that is unessential. In other words, less makes more.

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