20VC Kleiner Perkins' Bing Gordon on Lessons From Serving On Amazon & Zynga's Board, Why The Best Investors Are Good Listeners and Sceptical Optimists & The Most Important Value Add A VC Can Provide

Summary Notes


In this episode of 20 minutes VC, the host announces their new app, thanking developer Jason Humphreys, and introduces the guest, Bing Gordon of Kleiner Perkins. Gordon shares his journey from Electronic Arts to venture capital, emphasizing the importance of cash management and the CEO's role in a company's success. He discusses board dynamics, the value of controversial ideas, and the significance of being a "skeptical optimist." Gordon also touches on his investment philosophy, contrasting early-stage ventures with M&A and real estate, and highlights his recent investments in Network and Zoom Pizza, attributing his choices to strong founder relationships and business metrics. Additionally, the episode features endorsements for products like Raiden luggage and Simba mattresses.

Summary Notes

Introduction to 20VC App

  • Harry Stebbings announces the launch of the 20 minutes VC app.
  • The app provides a centralized location for all show-related content.
  • Users can access resources, categorize episodes, and rate the shows.
  • The app's development is credited to Jason Humphreys.

"Starting today with some very exciting news. The 20 minutes VC now has its very own app."

This quote introduces the main topic of the announcement, which is the release of a new app for the 20 minutes VC podcast.

"After many thousands of requests, there's now a centralized home for all things 20 VC, so you can easily access the resources mentioned in the show."

The quote explains the app's purpose, which is to centralize resources and improve accessibility for listeners.

"And most importantly for me to bring you better shows, you can rate the episode and then I can learn what you really like and what you don't and bring you the best content consistently."

Harry Stebbings discusses the importance of user feedback through the app to improve show quality.

Introduction to Bing Gordon

  • Bing Gordon is introduced as the guest, with a notable background in venture capital and technology.
  • Bing is a partner and chief product officer at Kleiner Perkins, a prestigious venture fund.
  • His investment work includes companies like Spotify, Zynga, Amazon, and Twitter.
  • Bing serves on the boards of various companies and has a history with Electronic Arts.
  • The introduction to Bing was facilitated by Wright at Outpost Games.

"A phenomenal guest we have in store, you might remember we had Mark Pinkus on the show last Monday."

Harry Stebbings sets up the introduction of Bing Gordon, referencing a previous episode with Mark Pinkus.

"At Kleiner, Bing has either worked with or invested in the likes of Spotify, Zynga, Amazon, Twitter and Magic Leap, just to name a few."

The quote highlights Bing Gordon's significant investment history and his role at Kleiner Perkins.

"Prior to Kleineck, Bing had been a longtime executive at Electronic Arts, beginning with EA's founding in 1982 with initial funding from Kleiner, he was chief creative officer at EA from 1998 to 2008, and previously headed EA marketing and product development."

This quote provides a background on Bing Gordon's career before joining Kleiner Perkins, emphasizing his long-term involvement with Electronic Arts.

Product Endorsements

  • Harry Stebbings and the co-host discuss the benefits of the Raiden luggage and Simba hybrid mattress.
  • Raiden is praised for its durability, lightweight design, and warranty, along with a promotional offer.
  • The Simba mattress is recommended for its advanced technology and trial period.
  • Harry's personal endorsement is visible on his Snapchat stories.

"It fits on every plane. My favorite for this, of course, being the carryon."

This quote from the co-host endorses Raiden's carryon luggage for its universal fit on airplanes.

"It's the most advanced mattress in the world."

Harry Stebbings provides a strong endorsement for the Simba hybrid mattress, highlighting its technological sophistication.

Bing Gordon's Venture Capital Journey

  • Bing Gordon shares his journey into venture capital, starting with Electronic Arts.
  • He met influential figures like John Doerr, Brooke Byers, and Don Valentine, who were foundational to his career.
  • Bing's wife worked with John Doerr and Vinod Khosla, further connecting him to the venture capital world.
  • He was involved with Kleiner Perkins for 35 years before officially joining.
  • Bing was a founding board member of Audible and attended Kleiner CEO conferences, where he met Jeff Bezos.

"In 1982, I met John Dor and Brooke Byers and then also Don Valentine at Sequoia, who were the founding investors in electronic arts."

Bing Gordon recounts his early encounters with key venture capitalists and their investment in Electronic Arts, which played a role in his entry into the venture capital industry.

"So I was basically a fellow traveler with Kleiner Perkins for 35 years before I called him up and said I thought it was time."

The quote reflects Bing Gordon's long-term association with Kleiner Perkins before officially joining their team.

Early Days of Electronic Arts

  • Bing Gordon reflects on overcoming negativity and challenges in the boardroom.
  • He shares a story about a board meeting where Don Valentine emphasized the importance of cash flow by writing "90 days cash."
  • Bing learned that cash management and CEO support are vital in venture capital.
  • He stresses the importance of helping CEOs scale successful companies and being attentive to cash flow.

"Cash is king and CEO helping is the most important value add."

This quote summarizes Bing Gordon's key takeaway from his early experiences at Electronic Arts, emphasizing cash management and CEO support as critical elements for success in business.

"So how do you help ceos scale when they succeed? You can't much help them when they fail, but how do you help them scale when they succeed?"

Bing Gordon poses a rhetorical question that highlights the venture capitalist's role in aiding CEOs to scale their businesses during successful periods.

Time Allocation in Venture Capital

  • Venture capitalists often have a dichotomy in their approach: fix losers or ride winners.
  • People who hate failure focus on fixing losers.
  • Pure investors tend to ride winners and get out of losers.
  • Great investors prioritize expected value over loss avoidance.
  • Bing Gordon organizes his time by setting quarterly objectives (OKRs) using BetterWorks.
  • The difficulty of objectives is matched with the expected level of engagement.
  • High achievers in adulthood are masters of time management.
  • Time is allocated based on priorities, with regular assessments to ensure proper focus.

"Well, I've discovered that people tend to fall in one of two personalities. It's fix your losers or ride your winners."

This quote explains the two distinct strategies venture capitalists use to manage their portfolios: focusing on improving underperforming companies or concentrating on those that are succeeding.

"Great investors think about expected value, not loss avoidance."

The quote emphasizes that successful investors focus on the potential future value of an investment rather than trying to avoid or recover losses.

"I set quarterly objectives, okrs now using a company we're involved with called betterworks set my okrs and the difficulty of the objectives tend to match my expectation of setting."

Bing Gordon describes his method of setting quarterly objectives using a tool called BetterWorks, indicating that the objectives' difficulty aligns with what he expects to be involved in.

The Role of a VC as a Board Member

  • Jeff Bezos' principle of being "right a lot" involves being a good listener and a skeptical optimist.
  • Skeptical optimism entails asking tough questions without a negative tone.
  • Engineers and those with similar mindsets often luxuriate in failures.
  • The challenge for VCs on boards is to maintain a balance between optimism and critical questioning.
  • Confidence and creativity in teams are bolstered by optimism and earned success.
  • The role of a board member is to contribute without being overbearing or negative.

"Jeff Bezos says there's a leadership principle at Amazon which is to be right a lot."

This quote refers to a leadership principle at Amazon that values the ability to frequently make correct decisions, which is linked to being a good listener and maintaining a balance of skepticism and optimism.

"So in general, the trick is to ask challenging questions with a smile."

Bing Gordon emphasizes the importance of posing difficult questions in a positive manner to foster a constructive environment rather than a negative one.

Learning as a Board Member

  • Parenting can be a good analogy for developing business management skills.
  • Being a board member is similar to parenting teenagers: providing guidance without micromanaging.
  • Adding value as a non-operational board member is crucial.
  • Board meetings should be rated by both the CEO and board members.
  • Effective board meetings energize participants and provide the management team with actionable ideas.
  • The best board meetings are those where significant initiatives are discussed and shaped.

"The best way to develop as a business manager is to be a parent, because you find out with kids that if you micromanage, you destroy them."

Bing Gordon draws a parallel between parenting and board membership, highlighting the importance of allowing independence and avoiding micromanagement.

"My best model is to have board meetings rated and ask the CEO to rate the board meeting and ask the other board members to rate the board meeting."

This quote suggests a method for improving board meetings by having them evaluated by both the CEO and the board members to ensure they are productive and valuable.

"Tell me the best board you've ever been on and why, and tell me the best board meeting you've ever been in and why."

Bing Gordon encourages CEOs to inquire about the experiences of their board members to learn from the most effective board meetings they have attended.

Memorable Initiatives from Board Meetings

  • Bing Gordon recalls significant board meetings at Amazon that led to the creation of AWS, Kindle, and Prime.
  • At Zynga, memorable meetings included CEO discussions and scaling strategies.
  • The company Ngmoco, led by Neil Young, executed a significant pivot after their non-compete expired.

"I remember the board meeting in Amazon where we first talked about what become Amazon Web Services AWS."

This quote highlights a memorable board meeting at Amazon that led to the development of Amazon Web Services, showcasing the impact of strategic board discussions.

"This company called Ngmoco, sold it to DNA. It was a great early mobile game company, but their non compete expired and they raised money from the investors."

Bing Gordon recounts a pivotal moment for Ngmoco, a mobile game company that made a significant business pivot, emphasizing the importance of strategic flexibility and timing.

Founding of a Game Company

  • The individuals in the discussion decided to start a game company after a holiday.
  • They developed a comprehensive business strategy, including a business plan, funding plan, personnel plan, and ideas for the first three products.

Christmas holiday and the three of us sat down in January and said, we've decided maybe we should just go be a game company. By the time the meeting was over, they had a business plan, a funding plan, a personnel plan, and a first three product idea.

This quote outlines the origin story of the game company and the strategic planning that went into its inception immediately after the decision was made.

Learning from Board Members

  • Bing Gordon values the opportunity to work with certain board members, particularly Mike Maples and the Union Square Ventures team.
  • He admires Mike Maples for his empathy towards CEOs and his ability to contribute game-changing ideas in board meetings.
  • Bing Gordon respects the strategic thinking and intelligence of the Union Square Ventures team, including Brad Burnham, Fred Wilson, and Albert Wenger.

Yeah, there's a couple people that I would always lean in to try to work with. So I love Mike Maples from floodgate. He's been on a couple boards with him. What he does is so well, he has high empathy for ceos. It seems in every board meeting he says at least one thing that's game changing.

This quote emphasizes the value Bing Gordon places on board members who can provide significant insights and have a strong understanding of CEOs' challenges.

Fred Wilson is kind of the crown prince of New York venture capital and a great blogger. He was extremely helpful in the early days of zynga, even though he was mostly dialed in. He's just such a crisp, sharp thinker. And then Albert Wenger, he created the meme of hacking education, which I'm a fanboy of.

Bing Gordon praises Fred Wilson for his clear and sharp thinking, as well as Albert Wenger for his innovative ideas in the education space, demonstrating the high regard he has for their contributions.

Perspectives on Price Sensitivity in Investments

  • Bing Gordon shares his view on price sensitivity in different investment areas: M&A, real estate, and early-stage venture.
  • He believes in paying a premium only if the M&A deal is worth double the cost, due to the potential for significant value increase.
  • In real estate, he emphasizes the importance of never overpaying due to the limited upside.
  • For early-stage ventures, he acknowledges the risk of overpaying and reducing the number of investment opportunities, but also the importance of not being overly price-sensitive if the company is highly desirable.

My math is never do a merger and acquisition deal if you wouldn't pay double, because the ones that work basically a year later, they're twice as valuable as thought they were.

This quote captures Bing Gordon's investment strategy for M&A, highlighting his approach of only proceeding with deals that have the potential to double in value.

Early stage venture, which I think Fenton is talking know where it's either a home run or a bunt single. If you're big game hunting, you think you want to get in any price.

Bing Gordon discusses the high stakes of early-stage venture investing, where the outcomes can be extreme, and the temptation to invest at any price for potentially high rewards.

Optimal VC Partnership Dynamics

  • Bing Gordon values partners who challenge him to improve as an investor.
  • He believes in the importance of trust and the ability to engage in nuanced discussions rather than purely analytical ones.
  • Controversial deals can be positive if there is a strong advocate for the company within the partnership.
  • KP's investment decision-making involves exploring themes, meeting companies in the category, and having at least one partner who is passionately supportive of the deal.

So you don't want to have as buzkill, what you want to have is thoughtful questions and you want to be able to get down to kind of your true selves.

This quote indicates Bing Gordon's preference for a VC partnership where members can delve into their genuine interests and motivations, fostering a deeper level of discussion and collaboration.

And at that point we depend on one person being a fervent champion on behalf of the company. But if it's really obvious to us, it's probably obvious to everybody.

Bing Gordon explains that having a passionate advocate for an investment can be crucial, especially when the investment's potential is not immediately apparent to all members.

Quickfire Round Introduction

  • The quickfire round is a segment where short statements are made, and Bing Gordon is expected to respond with immediate thoughts in a brief timeframe.
  • There was a moment of levity when Taylor Swift was mentioned, leading to a brief discussion about favorite books.

I would love, though, to move into a quick firearound. So my favorite of any interview. So I say a short statement, and then you give me your immediate thoughts in about 60 seconds or less.

This quote sets the stage for a rapid-response segment of the interview, indicating a shift in the conversation's pace and style.

Let's see. My most favorite recent book is called Data Clism. It's the social scientist who writes the blog for. Okay, Cupid. That's fascinating.

In response to a quickfire question, Bing Gordon shares his recent favorite book, "Data Clism," which reflects his interest in social science and data analysis.

Favorite Books and Series

  • Harry Stebbings mentions his favorite book for a desert island would be "The Discoveries" about great scientific papers of the 20th century.
  • He is currently re-reading his favorite book series, "Spenser" by Robert Parker, which is a detective series.
  • He appreciates the main character Spenser for being a former pugilist, physically fit, and culturally literate with a strong relationship featuring witty dialogue.

It's kind of the freakonomics of people. Let's see, if I had to take one book away to read on a desert island, it would be a book called the Discoveries about the great scientific papers of the 20th century. And then right now I'm rereading. So my favorite book series is called Spencer by Robert Parker.

This quote highlights Harry Stebbings' interest in both scientific literature and detective fiction, indicating his diverse reading preferences and the value he finds in both factual and narrative forms of writing.

Misnomer About Esports

  • Bing Gordon addresses a common misnomer about esports, suggesting that it is often overestimated in size and compared to the NFL.
  • He believes that esports will be as big as Formula One, indicating a more moderate yet significant level of success in the industry.

I think that it's going to be as big as the NFL. I think right now there's a little too many people trying to slice and dice it in. Too many to be. I think esports going to be as big as Formula one.

Bing Gordon's quote reflects his perspective on the future of esports and the current misconceptions within the investor community, pointing out the overhyped expectations and the realistic potential of the industry.

Biggest Mentor

  • Bing Gordon shares that he doesn't typically resonate with authority figures, learning more from peers.
  • He credits Alan Mooney from the advertising business as an influential mentor.
  • Mooney advised him on the effective handoff of strategies to creative people, recommending the use of short stories over analytical documents.

The authority figure I best learned from was a guy named Alan Mooney in the advertising business, who told me that the way to hand off strategies to creative people was not to write an analytical doc. He said his secret was to write a short story.

The quote conveys Bing Gordon's appreciation for Alan Mooney's unconventional approach to inspiring creativity in others, which has influenced Gordon's own method of engaging with creative teams.

Changes in VC and Startups

  • Bing Gordon wishes for VCs to place more emphasis on aiding CEOs in becoming exceptional leaders.
  • He highlights the emotional challenges VCs face with companies that fail and the importance of supporting CEOs as a way to improve the startup ecosystem.

I wish that vcs focus more on helping ceos be great ceos.

This quote succinctly captures Bing Gordon's desire for venture capitalists to take a more active role in the professional development of CEOs, which he sees as a critical component of a successful startup environment.

Recent Investments

  • Bing Gordon discusses his recent investments in network and games and Zoom Pizza.
  • He emphasizes the importance of the people behind the companies, citing long-term relationships and impressive focus as key reasons for his investments.
  • He also mentions favorable metrics, such as the customer lifetime value (LTV) versus customer acquisition cost, and the potential of human-powered robotics.

One is a growth round in a game committee I tell you about called network and games can be treacherous. But I'm a fan here because I've known Neil Young for a long time and said yes because I've known him since 1990 and I'm impressed with how focused he is. And in this case, the LTV versus customer acquisition cost is incredibly strong.

The quote sheds light on Bing Gordon's investment philosophy, which prioritizes personal connections and proven focus, as well as strong financial indicators, when deciding to invest in a company.

Endorsements and Recommendations

  • The speakers discuss the 20 VC app and encourage listeners to rate the episode for feedback.
  • Harry Stebbings endorses Raiden luggage, citing its convenience, durability, and associated Uber credit with a purchase using a promo code.
  • Stebbings also recommends Simba Sleep's hybrid mattress, praising its advanced technology and comfort, along with a sleep trial and guarantee.

You purchase your raiden with the code 20 VC, that's 20 vc at checkout, you'll get a $25 of uber credit this season.

Harry Stebbings provides listeners with a practical incentive to try Raiden luggage, highlighting the benefits of the product and the additional value of a promotional offer.

It's the most advanced mattress in the world. With a unique combination of 2500 conical pocket springs and responsive memory foam, it offers the perfect support for two people.

This quote from Harry Stebbings serves as a strong endorsement for the Simba Sleep mattress, emphasizing its cutting-edge design and the personalized comfort it provides.

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