20VC John Doerr on Buying 12% of Google for $12M, His Biggest Investing Lesson from 30 Years in Venture & The Climate Crisis Why Governments are The Biggest Problem and Where the Biggest Opportunities Are in Climate Investing

Summary Notes


In a revealing conversation on 20vc with Harry Stebbings, venture capital legend John Doerr, chairman of Kleiner Perkins and acclaimed author, shares insights from his decades of experience in Silicon Valley and his commitment to climate change solutions. Doerr discusses his notable investments in Google and Amazon, his pioneering role in the clean tech movement, and his recent work on "Speed and Scale," a book offering an action plan to tackle the climate crisis. He emphasizes the importance of OKRs (Objectives and Key Results), a strategic framework he champions for achieving ambitious goals. Doerr also reflects on his investment misses, like choosing Fisker over Tesla, and the critical role of governments in addressing climate change, stressing that without their action, the world's efforts will fall short. Throughout the discussion, Doerr's optimism and belief in the power of innovation and entrepreneurship to solve pressing global issues shine through.

Summary Notes

Introduction to the Episode

  • Harry Stebbings expresses his excitement for interviewing John Doerr.
  • John Doerr is an engineer, venture capitalist, chairman of Kleiner Perkins, and author.
  • Doerr is known for his investments in Google and Amazon, his role in the clean tech movement, and his new book on climate change.

"This is 20 vc with me, Harry Stebings, and I've always said I'm a student of venture capital and the great." Harry Stebbings introduces himself as a learner in the field of venture capital.

"For over 40 years, John has helped build some of the most generational defining companies of our generation." John Doerr is recognized for his significant contributions to building major companies.

"John has an incredible new book, Speed and Scale, an action plan for solving our climate crisis." Doerr's new book focuses on addressing the climate crisis with actionable strategies.

Sponsorship and Platform Promotion

  • Remote platform is promoted for managing international employment.
  • AlT platform is highlighted for investing in alternative assets like sports cards.
  • AngelList's fund administration platform is recommended for managing investments in startups.

"Remote makes it easy for companies of all sizes to employ global teams." The Remote platform simplifies the process of employing international workers.

"With AlT, you can invest from as little as $7 to a million dollars on their exchange." AlT provides a platform for investing in alternative assets with a low entry point.

"Leading fund managers have made over 10,000 investments into 6000 startups via angel list, all online and all in one place." AngelList is celebrated for its comprehensive fund management and investment platform.

John Doerr's Introduction and Climate Focus

  • Harry Stebbings warmly welcomes John Doerr to the podcast.
  • Doerr expresses his readiness to discuss climate-focused investing.

"John, this is such a pleasure to do. I've wanted to do this for a long, long time." Harry Stebbings conveys his long-standing desire to interview John Doerr.

"It's a privilege to be here. Let's do it." John Doerr reciprocates the enthusiasm for the conversation.

Transition to Climate Investments

  • Doerr reflects on his transition to investing in energy, climate, and pandemics in 2006 and 2007.
  • He discusses the iFund and the financial outcomes of climate investments.

"So it was energy and climate. And also, interestingly, the mobile application store, the App Store and the cloud, all of those came together in 2006 and in 2007." John Doerr outlines the convergence of his investment interests during this period.

"We invested about a billion dollars in 70 or so climate related investments. Those investments, on an as of held basis today are worth about $3 billion." Doerr provides an overview of the scale and financial success of his climate-related investments.

Dedicated Funds for Climate and Pandemics

  • Doerr explains Kleiner's strategy of setting up separate funds for specific focuses like pandemic preparedness.
  • He discusses the importance of focus and the challenges of building a portfolio in the context of climate funds.

"I think that focus is a really powerful advantage when you're trying to serve entrepreneurs and help them succeed in their businesses." John Doerr emphasizes the benefits of focus in venture capital.

"The risk of a climate fund in early climate days is all of the upside of the fund could be decimated by the actions of a nation state like China." Doerr acknowledges the geopolitical risks associated with early climate investments.

Market Timing Risk

  • Doerr shares his views on market timing risk and the importance of being early rather than late.

"I'd rather be too early than too late by the time it's too late, there's seldom a point in pursuing a market." John Doerr expresses his preference for being ahead of the market.

"Google was the 18th search engine. Who would have thought that after 17, search engine two Stanford dropouts would come up with an innovation that would organize all the world's information and the best investment of all time, at least for me and my partnership." Doerr reflects on the counterintuitive success of Google despite being late to the search engine market.

The Google Investment

  • Doerr recounts his first meeting with Google's founders and their ambitious vision.
  • He discusses the debate within his partnership over the Google investment.

"He said, without missing a beat, 10 billion. And I said, surely you mean market cap? And he said, no, I mean revenue." Larry Page's response to John Doerr during their initial meeting demonstrates his confidence in Google's potential.

"We had a big, long debate in the partnership." Doerr acknowledges the internal discussions that took place before investing in Google.

Evolution of Google's Business Model

  • Google's initial web crawling process took several days to refresh the index.
  • The innovation in Google's business model involved selling ads separately from content.
  • Ads were ranked for relevance using the same technology as content ranking.
  • Ads were sold in an open auction where the highest bidder paid the second-highest price.
  • This auction model is known as a modified queen's auction.
  • The auction system was designed to prevent overheated markets and ensure long-term market liquidity.

Then we hit upon the business model. You would sell ads separate from the content. You'd use the same kind of ranking technology to establish relevance of ads as well as content. And then the ads were sold in an open auction. So the winning bidder for a keyword like Hawaii would pay the second highest price. A modified queen's auction, it's called.

This quote explains the innovative approach Google took to its advertising model, which separated ad sales from content and used an auction system to determine ad pricing, ultimately contributing significantly to Google's success.

Mental Plasticity in Venture Capital

  • Keeping a fresh perspective on new opportunities is crucial in venture capital.
  • Avoiding bias based on past experiences, such as losses in certain sectors, is challenging.
  • A prepared mind is essential for making informed investment decisions.
  • Understanding the underlying technology and principles of innovations, like Bitcoin, is necessary for supporting entrepreneurs effectively.

Well, Mamoon Hamid, who you know is one of the leaders of the Kleiner partnership, is fond of saying you must bring a prepared mind to these decisions.

This quote underscores the importance of being well-prepared and informed when making investment decisions, as advised by Mamoon Hamid, a leader in the venture capital industry.

Climate Crisis and Innovation Comparison: 2006-2007 vs. Today

  • The climate crisis is now widely recognized, whereas it was debated in 2006.
  • The physical manifestations of climate change, such as wildfires and floods, are evident.
  • Investors realize missed opportunities in successful green companies like Tesla.
  • There is a significant opportunity in transitioning to a clean energy economy.
  • The U.S. has a historical responsibility to lead in decarbonizing the economy and driving down costs for others.
  • The concept of climate justice is woven into the narrative, addressing the disproportionate impact on less responsible and less capable communities.

In the Climate space are dramatically different. The problem now is evident. It was the subject of some debate in 2006.

This quote reflects on how the perception and acceptance of the climate crisis have evolved since 2006, with the problem now being undeniable due to its visible impacts.

John Doerr's Book "Speed and Scale" and OKR System

  • "Speed and Scale" is not just a book but a plan with six objectives and 55 key results.
  • The book aims to address the climate crisis with specific, measurable, and time-bound actions.
  • The OKR (Objectives and Key Results) system, popularized by Andy Grove at Intel, is applied to climate goals.
  • The book details strategies for electrifying transportation, decarbonizing the grid, fixing food systems, protecting nature, cleaning up industry, and removing stubborn carbon.
  • The ultimate goal is to achieve net-zero greenhouse gas emissions by 2050, with significant progress by 2030.

These six things are the great big objectives. And so for every one of them, an OKR system has three to five very specific, time bound, measurable, key results.

This quote highlights the structured approach to tackling climate change, using the OKR system to set clear, measurable objectives and key results for various environmental goals.

Government's Role in Addressing Climate Change

  • Government cooperation is critical to successfully addressing climate change.
  • The book focuses on the 20 largest emitters and emphasizes the urgency of collective government action.
  • Without ambitious government policies, achieving the necessary greenhouse gas reductions is unlikely.
  • The book warns against distractions and emphasizes the importance of targeting significant sources of emissions.

The governments are the biggest problem. And if the governments don't change, if they don't up the level of ambition and urgency, simply put, we're screwed.

This quote conveys the crucial role of governments in combating climate change and the dire consequences if they fail to act with sufficient ambition and urgency.

Hope for the Future Despite Challenges

  • John Doerr expresses hope, though not necessarily optimism, for the future regarding climate action.
  • The growth of movements and increased public awareness are reasons for hope.
  • Making the climate crisis a top voting issue is a key strategy for effecting change.
  • The book proposes concrete steps and measures to limit global warming to 1.5 degrees Celsius.

Yes, I am hopeful. I may not be optimistic, but I'm hopeful. And what gives me great hope are the movements which we declare this is a subtle point, need to become action.

This quote differentiates between hope and optimism, with John Doerr feeling hopeful due to the rise of climate movements and the potential for these movements to drive meaningful action.

Climate Action and Government Responsibility

  • John Doerr highlights the urgent need for climate action, emphasizing a time-bound goal to influence public sentiment in major countries by 2025.
  • He points out that businesses, the youth, and investors are often ahead of governments in responding to climate issues.
  • Doerr calls for an increase in youth voices and the election of climate officials to support the drive to net zero emissions.
  • A detailed plan with actionable steps is required to achieve climate goals.

"We have no more time than that to waste. So it's an excellent key result. It's measurable, it's specific, it's time bound."

This quote emphasizes the urgency and the need for clear, measurable, and time-specific goals in addressing climate change.

"I set a goal that says a majority of government officials globally, either elected or supported, need to support the drive to net zero."

Doerr is advocating for a global political shift where the majority of government officials are in favor of achieving net zero emissions.

The Power of Active Listening

  • John Doerr defines great listening as active listening, which involves deeper communication and better understanding.
  • Active listening includes playing back what the speaker has said in the form of a question.
  • This approach is particularly beneficial when communicating with entrepreneurs and innovators.

"Somehow along the way, I learned that great listening is active listening."

Doerr emphasizes the importance of active listening as a tool for deeper and more effective communication.

The Role and Impact of Board Members

  • Being a good board member involves asking thought-provoking questions rather than dictating actions.
  • A board member should bring a few questions to each meeting, some of which the team has not considered, to stimulate discussion and reflection.

"The best thing a good board member can do is bring three to five questions for a meeting."

Doerr believes that the role of a board member is to challenge and inspire the team by asking insightful questions.

Recruitment and Team Building

  • John Doerr expresses his passion for recruiting, which he sees as a critical and challenging aspect of entrepreneurship.
  • He emphasizes the importance of finding the right fit for teams and organizations.
  • Doerr views ventures as more than just transactions; they represent the collective hopes and dreams of a team aiming to change the world.

"I love recruiting people. I think building, inspiring, retaining your team is the hardest thing an entrepreneur has to do."

This quote reflects Doerr's enthusiasm for the recruitment process and the importance he places on team dynamics.

Investment Pride and Strategy

  • Doerr is proud of his partnership's investment in Enphase, a company that makes microinverters for solar energy, which has grown significantly in value.
  • He advises against every fund becoming a climate fund but suggests leveraging expertise in specific areas to invest in climate-related innovations.
  • Doerr mentions Watershed, a company he believes is significant in helping manage carbon equations in supply chains.

"That $29 million investment today is worth a billion dollars."

This quote signifies the success and impact of the investment in Enphase, a company contributing solutions to the climate crisis.

"So every fund should not be a climate fund? That's my first piece of advice."

Doerr advises that not all funds need to focus on climate but should instead apply their expertise to areas where they can contribute to climate solutions.

Personal Insights and Anecdotes

  • John Doerr shares his admiration for Bill Gates, including Gates' practice of reading for an hour each night.
  • He discusses the enduring value of physical bookstores and Jeff Bezos's belief in their social dimension.
  • Doerr recounts a memorable moment with Bezos, highlighting the risks and challenges faced by Amazon in its early days.

"Books are my friends. Ever since I started hanging around with Jeff Bezos, jeff said, you know, John, it's going to be really hard to replace the bookstore."

This quote captures Doerr's appreciation for books and the shared sentiment with Jeff Bezos about the importance of bookstores.

"My most memorable impression of Jeff Bezos was my very first meeting when he came bouncing down from the loft in a second floor story of a really dilapidated building opposite the free needle clinic in Seattle, and with his incredible honking voice and laughter, persuaded me on the spot that I wanted to be in business with him."

Doerr shares a personal anecdote about his first encounter with Jeff Bezos, which left a lasting impression and led to a significant business partnership.

Jeff Bezos' Optimism and Energy

  • Jeff Bezos' optimism and energy were key to building Amazon.
  • Recognition of the inevitability of trouble in business plans.

"In that instant, I knew that Jeff would bring an optimism and energy to building one of the most important companies in the world and transforming how we buy, sell, entertain, inform ourselves."

The quote emphasizes the speaker's realization that Jeff Bezos' positive attributes were crucial for the success of Amazon, despite the challenges they would inevitably face.

Aaron's Amazon Bomb Cover Retraction

  • A previous negative assessment of Amazon was publicly retracted.
  • The retraction indicates a change in perception of Amazon's success.

"Well, Aaron's as well. They had a whole cover that, you'll recall, said Amazon Bomb on it. And then a decade later printed a."

This quote refers to a past event where a publication had a negative outlook on Amazon, represented by the "Amazon Bomb" cover, which was later retracted, symbolizing a shift in opinion about the company's performance.

Traits for Children

  • Importance of being strong-willed with an independent view.
  • The value of optimism and making meaning through relationships.
  • Empathy and genuine care for others as desirable traits.

"Well, most important, I want them to be strong willed, and they have a strong, independent view of the world, how it is, how it ought to be, and their role in it."

This quote captures the speaker's desire for their children to have a strong and independent perspective on life and their place in the world.

John's Strengths and Weaknesses

  • John sees his optimism and love for people as his greatest strength.
  • Selling is viewed as a high calling, not to be looked down upon.
  • John's weakness is being overly enthusiastic about big ideas and breakthrough technologies.
  • Loyalty to people and ideas, even when it may be detrimental.

"I think my greatest strength is sense of optimism and a real love for people."

John identifies his positive outlook and affection for others as his key personal strength.

"My weakness, I think, is that I'm a sucker for really big ideas and breakthrough technologies."

The quote reveals John's self-acknowledged weakness for getting overly excited about ambitious ideas and new technologies.

Loyalty and Investment Persistence

  • The difficulty in deciding when to stop supporting a venture.
  • The impact of investment decisions on people's lives and careers.
  • Success stories like Enphase and Symantec as a result of perseverance.

"By staying the course with a venture, you can see amazing things happen."

This quote reflects the belief that steadfast commitment to a venture can lead to remarkable outcomes, highlighting the importance of persistence in investment.

Memorable Board Member: Bill Campbell

  • Bill Campbell's influence and dedication to companies like Go and Intuit.
  • His ability to bring love and honesty into the workplace.
  • Campbell's dual role at Google and Apple, focusing on business improvement.

"And Campbell had this amazing ability to bring into a workplace setting the notion of love."

The quote describes Bill Campbell's unique talent for integrating a sense of care and support into professional environments.

Investment Misses and Mindset Changes

  • John's regret over choosing Fisker over Tesla.
  • The lesson learned about the importance of an entrepreneur's deep technology understanding and willingness to innovate.

"Has reinforced for me today the authenticity and importance of an entrepreneur who deeply understands the technology and is willing to innovate down to the bare metal in the fundamental physics."

The quote captures the insight gained from a missed investment opportunity, emphasizing the critical nature of an entrepreneur's in-depth technological knowledge and innovation.

John's Plans for the Next Five Years

  • John's focus on climate crisis entrepreneurs.
  • No plans for another book, but updates and international versions expected.
  • Advocacy for governmental action and the climate crisis opportunity.

"But I think, Harry, we've got a small number of years till 2030 really to cut emissions in half."

The quote highlights the urgency John feels regarding climate change and the need for significant action before 2030 to reduce emissions.

Episode Conclusion

  • The host expresses gratitude for a meaningful and educational discussion.
  • John thanks the host for the opportunity to be a guest.

"Thank you so much for joining me today. And this really has been a fantastic episode."

This quote shows the host's appreciation for the conversation with John, indicating the value of the episode's content.

"Thank you for the privilege of being a guest of yours."

John reciprocates the host's gratitude, appreciating the chance to participate in the podcast.

Remote and ALT Platform Advertisements

  • Remote offers international employment services, including payroll and compliance.
  • ALT allows investment in sports cards, providing transparency and low fees.
  • Both services offer special discounts or features for podcast listeners.

"Remote makes it easy for companies of all sizes to employ global teams."

This quote is an advertisement for Remote, highlighting the ease of managing international teams through their services.

"With Alt you can invest from as little as $7 to a million dollars on their exchange."

The quote promotes ALT's platform for investing in alternative assets, emphasizing the wide range of investment amounts catered to.

Angel List Fund Administration Platform

  • Angel List provides a fund administration platform for managing investments.
  • The introduction of rolling funds allows for ongoing investment opportunities.

"The team and platform at angel list. They take care of everything that my back office needs so that I can focus on working with great founders."

The quote is an endorsement of Angel List's services, emphasizing the support provided to investors, freeing them to concentrate on collaborating with entrepreneurs.

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