20VC Sequoia's Ravi Gupta on His Lessons From The HyperGrowth of Instacart, The Key Question To Ask When Building or Evaluating Teams & The Importance of Investing In and Detecting Slopes Rather Than Intercepts



In this engaging episode of "20 Minutes VC," host Harry Stebbings interviews Ravi Gupta, a partner at Sequoia Capital, discussing his transition from COO and CFO at Instacart to venture capital, and the importance of vision, team dynamics, and leadership in startups. Ravi shares insights on being both demanding and supportive, the significance of building a team with complementary superpowers, and the impact of parenthood on prioritizing what's important over what's urgent. The conversation also touches on Sequoia's collaborative culture, the concept of investing in 'slope' rather than 'intercept,' and Ravi's approach to his first deal with the firm. Throughout the discussion, they emphasize the human aspect of business, from the founder-investor relationship to the personal growth of entrepreneurs.

Summary Notes

Introduction to Ravi Gupta

  • Harry Stebbings introduces Ravi Gupta, a partner at Sequoia Capital.
  • Ravi Gupta has an impressive background, including roles as COO and CFO at Instacart and a director at KKR.
  • Sequoia Capital is noted for its portfolio, which includes Airbnb, Instacart, Stripe, Uipath, and Zoom.

"I'm thrilled to welcome Ravi Gupta, partner at Sequoia Capital, one of the world's leading venture firms for the portfolio, including the likes of Airbnb, Instacart, Stripe, Uipath, Zoom."

The quote introduces Ravi Gupta and highlights Sequoia Capital's significant investments, setting the stage for the discussion on venture capital and team building.

Harry Stebbings' Acknowledgments

  • Harry thanks various individuals for their question suggestions, emphasizing the collaborative effort behind the show.
  • Harry highlights various companies that exemplify success through user experience and product focus, such as Hello Sign, Digits, and Routable.

"To Pat Grady, Mike Moritz, Will Gabric, Matilde Collin and Sagar Sangvi. Some amazing question suggestions today. Real team effort here on the schedule."

The quote acknowledges the contributions of others to the podcast, showing appreciation for the community around the show.

Ravi Gupta's Journey to Sequoia Capital

  • Ravi Gupta joined Sequoia Capital after his experience at Instacart, where he was deeply involved in the company's hypergrowth.
  • His connection with Sequoia began through its partnership with Instacart, and he admired their style of partnership.

"I joined Sequoia last year after four and a half years at Instacart... I got to know Sequoia because Sequoia has been partnered with Instacart since the earliest days. And I just really liked their style and how they partnered with us."

This quote explains Ravi Gupta's transition from Instacart to Sequoia Capital, emphasizing the importance of partnership style in his decision.

The Role of Vision in Startups

  • Ravi Gupta believes in the importance of a vision to inspire and attract people to a company.
  • However, he also stresses the need for adaptability and not being strictly bound to the initial vision.
  • Ravi was captivated by the vision for Instacart, which resonated with his desire for innovation in grocery shopping.

"I think that vision is really important, but I think that you can't be locked to it, which means you need a vision to get people excited about joining your company."

This quote highlights the balance between having a strong vision and the flexibility to adapt as necessary, which is critical in the startup environment.

Team Building and Talent Evaluation

  • Ravi Gupta emphasizes the importance of team building, posing the key question: "Would you enthusiastically rehire this person?"
  • The concept of enthusiastic rehiring sets a high standard for team evaluation and helps maintain a high-performing team environment.

"Would you enthusiastically rehire this person if given the chance, knowing everything you know?"

The quote presents Ravi Gupta's fundamental question for assessing team members, which underscores the significance of having a team that one is excited to work with.

Talent Acquisition in a Competitive Market

  • Ravi Gupta discusses the importance of hiring the best talent and ensuring they complement the organization's needs.
  • He references Mark Zuckerberg's hiring philosophy and the idea that hiring 'A' players leads to a culture of excellence.

"Mark Zuckerberg talks about how he only wants to hire people who were the world different that he would work for."

The quote reflects on a hiring philosophy that focuses on bringing in individuals who would elevate the organization, which is key to Ravi Gupta's approach to talent acquisition.## Hiring Philosophy

  • Maintaining a high-quality bar is essential, even if it means dealing with the pain of not filling a spot immediately.
  • Hiring the best team is crucial for building something enduring and great.
  • Compromising on hiring quality can lead to risks in future hiring and is difficult to fix.
  • It's essential to consider how a new hire will elevate the team, contribute to learning, and fit into the company culture.

"I personally think that trying to hit targets over hiring the best team, I think it's a real mistake."

This quote emphasizes the importance of prioritizing the quality of hires over meeting short-term targets, as it has long-term benefits for the company.

Winning Top Talent

  • Understanding what is important to a candidate from the first meeting is critical.
  • Building trust with candidates can help in becoming a thought partner for them.
  • Ensuring that the company's mission resonates with the candidate is vital for their long-term commitment.
  • It's important to respect that a career choice is more crucial for the candidate than for the company.

"I really try to make sure that they make the right decision for them."

Ravi Gupta stresses the importance of ensuring that a potential hire is making the best decision for their career, which may or may not be joining the company.

Creating a Comfortable Environment

  • Building real relationships based on listening, caring, and being helpful is key.
  • Authentic interactions and trust are fundamental in creating a safe space for open discussions.
  • The ability to have tough conversations is rare and valuable in a work environment.

"I think it's really just about being helpful and genuine with them along the way."

Ravi Gupta attributes his ability to create a comfortable environment to his upbringing and the values instilled by his parents, emphasizing the importance of being genuinely helpful and caring.

Impressions of Sequoia

  • Sequoia's single-minded devotion to its mission since 1972 is impressive.
  • The culture at Sequoia is purposeful, with a focus on helping daring entrepreneurs build legendary companies.
  • Sequoia's approach to partnerships is based on belief in the entrepreneurs' potential to build something significant.

"The most impressive thing to me about Sequoia is this single-minded devotion to the mission."

Ravi Gupta highlights Sequoia's unwavering commitment to its mission as the most impressive aspect of the firm.

Sequoia's Team Dynamics

  • Sequoia operates as a collaborative team, similar to a basketball team, where everyone contributes to the success of the companies they partner with.
  • Unanimous decision-making and the ability for entrepreneurs to choose their board member from Sequoia are practices that reinforce team collaboration.
  • The team's focus on success and the mission is a key factor in Sequoia's approach to venture capital.

"Sequoia is more like a basketball team. Your strength or your superpower is added to a team with the sole focus of making sure the companies win."

This quote describes Sequoia's team-oriented approach, where individual strengths are leveraged collectively to ensure the success of their portfolio companies.

Importance of Prioritization

  • Saying no and focusing on a single priority can lead to better outcomes than trying to accomplish multiple goals simultaneously.
  • Prioritization is a learned skill that comes from experience and the realization that spreading efforts too thin is counterproductive.
  • Leaders must be willing to make tough decisions to focus on the most critical tasks.

"Focus is dramatically underrated, and I think that it's one of those things that it is a little bit more painful up front to say no and to pick the one thing."

Ravi Gupta discusses the underrated value of focus and the initial difficulty in saying no to prioritize effectively for better results.

Elegance in Declining Requests

  • Saying no to requests for time is more challenging than declining a team member's idea because it often lacks a shared goal.
  • Being authentic and communicating the importance of one's primary commitments can help manage expectations.
  • It's not about never being able to meet; it's about not being able to do so right now, which requires authenticity in response.

"I think that authenticity and the response, I think people will respect that."

Ravi Gupta advises on how to decline requests gracefully by being honest about one's priorities and limitations.## Delegation vs. Ownership and Control

  • Ravi Gupta acknowledges the humor in Sagar's comment about his Excel skills, aligning with Harry's discomfort with Excel.
  • Ravi believes that while starting with a small team might require hands-on involvement, scaling necessitates delegation.
  • A leader should set goals and strategy but give the team freedom to execute.
  • The importance lies in trusting the team to deliver and not micromanaging the 'how' aspect of tasks.

"I think the mistake I've seen people make is needing to do it all themselves... And my philosophy on this is pretty simple, which is you should hire people who you can actually trust to deliver."

The quote emphasizes the importance of trusting the team and delegating tasks to scale effectively.

Accountability vs. Ambition in Delegation

  • Ravi seeks ambitious team members who desire accountability and challenging problems.
  • He prefers allowing team members to drive interactions and report their needs, establishing trust and support.
  • Ravi stresses the importance of the leader's role in ensuring the team knows they are supported and that their success is desired.

"I think that the first thing for me is the most ambitious people, they want the hardest problem... And I think that one of the things for me that I think you have to do is build that relationship of trust where they know you have their back."

The quote underlines the balance between giving ambitious team members challenging tasks and building a supportive, trusting environment.

Insecurities in Leadership

  • Ravi admires Harry's openness about insecurities, which he believes resonates with others.
  • Authenticity and honesty are key for leaders, rather than having all the answers.
  • Sharing mistakes and vulnerabilities can strengthen team bonds and foster a culture of trying new things.

"I think it comes down to authenticity. I don't think people expect their leaders to have all the answers, but I do think that they expect their leaders to be honest with them."

This quote highlights the importance of authenticity in leadership and how it can positively impact team dynamics.

Board Member Dynamics

  • Ravi suggests that a special board member should build trust to be the first call for founders.
  • Empathy, quality of input, and consistent care are crucial for a board member.
  • Trust is the foundation for a strong relationship between board members and founders.

"You should seek out to build enough trust from the very beginning with a founder, where you are their first call when things are good or when things are bad."

Ravi's advice to Harry is to be a trustworthy and reliable board member who founders can depend on in any situation.

Approaching First Deals in Venture Capital

  • Ravi describes Sequoia's approach to investments as selective, with a focus on long-term partnerships.
  • He emphasizes the importance of the founders' potential growth (slope) over their current state (intercept).
  • Ravi's first deal was eased by the founders' impressive growth trajectory and Sequoia's supportive environment.

"I think Sequoia's approach to go all in, keep the bar high, combined with getting to meet Samir and Runik and just believing in them, made it, for me, a lot easier than it could be."

The quote reflects Ravi's experience with his first deal at Sequoia and the firm's investment philosophy.

Demanding and Supportive Leadership

  • Ravi believes it is possible and essential to be both demanding and supportive as a leader.
  • The concept is not contradictory but rather complementary in fostering a high-performing team.
  • Being demanding sets high expectations, while being supportive provides the necessary encouragement and assistance.

"Yeah, I think this concept of demanding and supportive is someth"

Although the quote is incomplete, it suggests that Ravi was about to elaborate on how being demanding and supportive can coexist in leadership.## Adam Grant's Perspective on Leadership

  • Adam Grant, the author of "Give and Take" and "Originals," has proposed a leadership model that combines being demanding and supportive.
  • The conventional belief that being demanding and supportive are on a spectrum is challenged by Grant's idea.
  • Effective leaders, according to Grant, should push their teams to achieve their potential while also providing support when needed.
  • This model is applicable to various roles, including parents, investors, board members, and business leaders.

"It's not a spectrum. The whole point is, you got to be able to do both."

This quote encapsulates Grant's leadership philosophy that being demanding and supportive are not mutually exclusive but are both essential qualities of effective leadership.

Michael Moritz's Role at Instacart

  • Michael Moritz serves as an example of Adam Grant's leadership model in practice.
  • As a board member at Instacart, Moritz demonstrated both demanding and supportive aspects.
  • When Instacart was losing money, Moritz pushed the team to improve and reach their potential.
  • During the crisis of Amazon buying Whole Foods, Moritz provided significant support to Instacart, drafting their press response and hosting the team at his house for strategy discussions.

"Michael thought we could do better, and he respected us enough and had enough pride in what we could accomplish to tell us the truth."

This quote highlights Moritz's demanding side, pushing Instacart to improve its financial situation by being honest about the company's potential.

Ravi Gupta's Family Influence on His Mindset

  • Ravi Gupta places great importance on his family, which consists of his wife and three sons.
  • Having children has helped Gupta focus on what's important in life rather than what's urgent.
  • He credits his family with helping him maintain balance, remember what's important, and bring joy into his life.
  • Gupta is influenced by Clay Christensen's book "How Will You Measure Your Life?" which emphasizes the significance of relationships and impact on family and friends.

"I think having kids has helped me make sure that I focus on the things that are important rather than the urgent."

This quote reflects Gupta's shift in perspective due to his family, prioritizing long-term importance over immediate urgencies.

Ravi Gupta's Views on the Investment Industry

  • Gupta criticizes the tendency within the investment industry to treat founders and companies as mere deals.
  • He emphasizes that companies are made up of people dedicated to a mission, and investors should respect that.
  • Gupta advocates for a more humane approach to investing, where investors genuinely hope for the success of companies they choose not to fund.

"Companies are not numbers on a page. They're groups of people devoting their careers to a mission."

This quote underscores Gupta's belief that companies should be viewed as human endeavors rather than just financial transactions.

Personal Traits and Aspirations

  • Ravi Gupta values efficiency and dislikes processes that slow progress.
  • He believes his strength lies in helping people focus on what truly matters.
  • Gupta wishes to see a change in how investors interact with founders, promoting a more respectful and supportive approach.

"I think I help people cut through the noise and get to the root of what really matters."

This quote describes Gupta's perceived strength in guiding people towards the essential aspects of their work or decisions.

Michael Moritz's Memorable Presence

  • Michael Moritz is remembered by Gupta as the most memorable board member due to his insightfulness and wit.

"He's so insightful, but he's also extraordinarily witty, and it's not even close."

The quote highlights Moritz's memorable impact on Gupta, emphasizing both his intelligence and his personality.

Ravi Gupta's Cocktail Metaphor

  • When asked which cocktail he would be, Gupta is unsure due to his infrequent drinking.
  • Harry Stebbings suggests that Gupta is like an espresso martini, with both an appealing appearance and depth.

"Well, I will tell you, Mr. Stebbings, nobody has ever said that to me before, and so I appreciate it and I'm going to take it as a compliment."

Gupta's response indicates he is open to Stebbings' flattering and thoughtful metaphor, even if it is a novel concept for him.

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