20VC Why Operating Experience Becomes Irrelevant Fast and Operators Often Give Bad Advice to Founders, Is Silicon Valley Really Dead Are Gen Z the Most Entitled Employees What Will Happen to a Generation of PrePMF Companies with $50M in the Bank with



In a dynamic episode of "20 VC," host Harry Stebbings is joined by Jeffrey Katzenberg and Sujay Jaswa, co-founders of Wonderco. Katzenberg, with a storied career including CEO of DreamWorks Animation and chairman of Walt Disney Studios, and Jaswa, a key figure in Dropbox's scaling, discuss the nuances of entrepreneurship, the importance of adapting to change, and the pitfalls of applying outdated operational advice to new ventures. They emphasize the significance of hiring for potential and placing individuals in roles that align with their strengths. The conversation also touches on the challenges of remote work, the need for a work-life balance, and the future of Silicon Valley amidst a changing venture landscape. Katzenberg and Jaswa candidly reflect on their own partnership dynamics, the value of optimism, and the necessity of taking risks while being prepared for failure.

Summary Notes

Experience-Based Advice

  • Operators often give advice to founders based on their own experiences, which may not apply to the current entrepreneurial environment.
  • The tools, capabilities, and macro circumstances have significantly changed, and advice should consider these differences.

"I think the biggest mistake operators make when they give advice to founders is it's purely out of the lens of their experience in the environment and the circumstances with the tools and the capabilities that they had available to them."

This quote emphasizes the importance of contextualizing advice to the current state of the entrepreneurial landscape rather than relying solely on past experiences.

Podcast Dynamics

  • The show features a unique dynamic with two guests, Jeffrey Katzenberg and Sujay Jaswa, which is different from the usual format.
  • The host, Harry Stebbings, expresses excitement about the episode and the dynamic between the guests.

"Oh, this show is such a good one. This is 20 vc with me, Harry Stebings and today's show is different. Today we're joined by not one, but two incredible guests."

Harry Stebbings sets the stage for the episode, highlighting the novelty of having two guests and his anticipation for the conversation.

Career Accomplishments of Guests

  • Jeffrey Katzenberg has a history of leading companies to success, including DreamWorks Animation and Walt Disney Studios, and has co-founded Wonderco.
  • Sujay Jaswa has played a pivotal role in Dropbox's growth and has led investments in numerous successful companies at Wonderco.

"So I'm thrilled to welcome Jeffrey Katzenberg and Sujay Jaswa, co-founders at Wonderco, starting with Jeffrey so many accomplishments."

The host introduces the guests and their notable achievements, setting the tone for their expertise and experience in the industry.

Corporate Gifting and Investment Tools

  • Andopen and Angelist are presented as valuable tools for corporate gifting and investment management, respectively.
  • Angelist Stack is highlighted for its ability to help founders by handling incorporation, banking, cap table, and fundraising.

"Their platform is filled with best in class brands... Angellist has been a key partner for me in managing my investments... With Angelist Stack, you can create a fundraising ready startup in just a few clicks."

This quote introduces the services provided by Andopen and Angelist, showcasing them as solutions for corporate gifting and streamlining the investment process for founders and investors.

Online Presence and SEO

  • Squarespace is recommended for its all-in-one platform capabilities, including mobile optimization, email campaigns, and SEO tools.
  • The platform is designed to help businesses establish and manage their online presence effectively.

"From websites and online stores to marketing tools and analytics, Squarespace is the all in one platform to build a beautiful online presence and run your business."

The quote promotes Squarespace as a comprehensive solution for businesses looking to enhance their online presence and marketing efforts.

Founders' Backgrounds

  • Sujay Jaswa grew up in the tech industry, witnessing the ups and downs of the market through his father's entrepreneurial ventures.
  • Jeffrey Katzenberg's career in media and entertainment was significantly influenced by technological advancements and partnerships.

"I grew up in tech, Harry... Technology has been my ally, my friend, my partner in pretty much everything that I've done."

These quotes provide insight into the personal backgrounds of the founders and how their experiences have shaped their perspectives on technology and entrepreneurship.

Key Takeaways from Career Experiences

  • Sujay Jaswa emphasizes the importance of hiring talented individuals with potential and placing them in roles that suit their strengths.
  • Jeffrey Katzenberg stresses the need to anticipate change and adapt, citing the transition from hand-drawn to computer animation as a significant challenge.

"Takeaway is hire really, really talented people... To literally every day, make sure you're looking around the corner, over the horizon to what's coming at you?"

These quotes highlight the primary lessons learned by the founders through their career experiences, focusing on talent acquisition and adaptability to change.

Attitudes Toward Risk and Failure

  • Jeffrey Katzenberg discusses the cultural differences between Northern and Southern California regarding risk and failure.
  • He reflects on the failure of Quibi, acknowledging the lack of product-market fit and the importance of learning from such experiences.

"If you want to do something that is original and unique, it equals risk... We never had product market fit."

Jeffrey Katzenberg's quote addresses the relationship between innovation and risk, as well as the acceptance of failure as a learning opportunity in the entrepreneurial journey.## Lessons from Failure

  • Jeffrey Katzenberg reflects on the failure of Quibi, acknowledging the pandemic's impact but also taking responsibility for the project's shortcomings.
  • He expresses humility but not humiliation, finding pride in the attempt despite the outcome.
  • Jeffrey's experience taught him to act decisively when recognizing failure, leading to the return of $600 million to investors.

"But I don't blame it only on that. That certainly was a factor. So a good learning lesson for me. I'm humbled by it, but I wasn't humiliated by it because I thought we did something that we could be proud of."

The quote reflects Jeffrey's balanced perspective on failure, recognizing external factors while maintaining a sense of pride in their efforts.

"One of the things that happened out of it is that when it was clear that Quibi wasn't going to succeed, which was pretty early on, by the way, I mean, it was in 60 days of our launch of it that it was a misfire. One of the things Suj impacted on me gigantically is the fact I shut it down as quickly as I possibly could because I wanted to return as much of our money to our investors as we could."

This quote highlights the importance of quick decision-making in limiting losses and being responsible to investors when a venture is not succeeding.

Investor Relations and Founder Success

  • Sujay Jaswa shares an anecdote about successful founders often being those who ignored their investors.
  • There is an implied tension between investor engagement and founder independence.
  • Sujay's Silicon Valley experience provided a different approach to launching a company, offering counter perspectives that were valuable but ultimately not enough to save Quibi.

"And the founders that didn't actually talk to them, refused to take their calls, were the ones that were the most successful, and they didn't really know how to process that emotionally."

This quote suggests that the most successful founders may prioritize their vision and strategy over constant investor input.

The Fate of "Living Dead" Companies

  • Sujay discusses the dilemma of "living dead" companies, which lack product-market fit yet continue operating due to various pressures.
  • He acknowledges the rarity of successful pivots among these companies and the potential negative impact on individuals involved.
  • The discussion touches on the social pressures and personal reasons that may keep founders from making rational decisions about their failing companies.

"And so the irony of it, you basically have a situation where the people that should fight on, God bless, go for it, keep trying. But there's a whole bunch of people who are doing it for the wrong reasons."

The quote highlights the paradox that while perseverance is admirable, many companies continue for misguided reasons, leading to wasted resources and effort.

  • Jeffrey believes that there is no one-size-fits-all advice for companies facing hard decisions during downturns.
  • Sujay advises companies to strip down to their core if their current path is not working and to take moonshots if they decide to persist.
  • The conversation revolves around the balance between cutting costs and investing in growth during challenging economic times.

"Basically, I think strip the business down to the core. Don't waste more time on it if it's not working."

Sujay's advice suggests that companies should focus on their essential operations and not spend time on unsuccessful ventures.

The Relevance of Operating Experience

  • Sujay argues that operating experience becomes irrelevant quickly due to the fast-changing nature of business environments.
  • He emphasizes the need for continuous involvement in building and running companies to maintain relevant operating experience.
  • People management is one area where Sujay believes operating experience remains valuable.

"I actually do think it's largely irrelevant. The one area where I've found it to be useful over time is in people management."

Sujay acknowledges that while much of operating experience quickly becomes outdated, the interpersonal aspects of managing people remain consistently important.

Maintaining a Network

  • Jeffrey Katzenberg discusses the importance of investing in relationships and maintaining a deep network through various methods.
  • Sujay provides an anecdote about Jeffrey's dedication to keeping in touch with his extensive network.
  • The conversation touches on the balance between network breadth and depth and the effort required to maintain meaningful connections.

"Investing in relationships and partnerships and friendships to me have always been high priority."

Jeffrey's quote underlines the significance he places on nurturing and maintaining relationships in his professional life.

Silicon Valley's Future

  • Jeffrey and Sujay debate the claim that Silicon Valley is losing its influence.
  • Jeffrey believes that the current downsizing in the valley will fuel a new generation of innovation and entrepreneurship.
  • Sujay is open to the idea that Silicon Valley needed a recession to address issues of entitlement and inefficiency but sees these problems resolving quickly.

"Not only do I feel it's not dead, I'm going to take a contrary point of view. That what in fact is going on in the valley today is going to create a whole new crop, a whole new generation."

Jeffrey's quote expresses his contrarian belief that Silicon Valley's current challenges will lead to a resurgence of creativity and the birth of successful new companies.## Startup Priorities

  • The recent shift in startup culture places hard work at the forefront again.
  • Startups must focus on three core tasks: acquiring customers, creating innovative products, and hiring the best talent.
  • This focus was lost in previous years but is now realigned with traditional startup values.

Nine months, the idea of hard work being the priority of a startup, it's back to the top of the list. That your job is to fight for customers and build cool products and recruit the best people.

The quote highlights the renewed emphasis on fundamental startup activities like customer acquisition, product development, and talent recruitment.

Recruiting Top Talent

  • The importance of maintaining a high talent bar in a company, as demonstrated by Dropbox's rigorous interviewing process.
  • Arash, Dropbox's co-founder and CTO, was particularly effective in preserving this high standard.

The person who I actually thought was the most insightful interviewer of normal team members was Arash, who was the co-founder and CTO.

This quote emphasizes the critical role that Arash played in maintaining a high standard for talent at Dropbox, contributing to its reputation as a workplace with many talented employees.

Employee Motivation and Wealth Generation

  • The discrepancy in wealth generation affects employee motivation and retention in startups.
  • The potential valuation of a company influences whether employees are willing to endure the startup grind.
  • High company valuations can diminish the drive for entrepreneurial pursuits post-acquisition.

You don't make generational wealth if you're employee 500 at a $10 billion company, whereas if you're at 100 billion dollar company or a 500 billion dollar company, it's really, really hard to get motivated to go through the full startup grind.

This quote discusses the impact of a company's valuation on an employee's potential for wealth creation and subsequent motivation to work in a high-intensity startup environment.

Work-Life Balance

  • Jeffrey Katzenberg's evolution from a work-centric to a more balanced approach to employee management.
  • The understanding that personal life can enhance an individual's professional capabilities.
  • Recognizing individual working styles and personal needs is crucial for a productive team.

I actually have come to understand there is a work-life balance that actually makes somebody the best version of themselves.

Jeffrey Katzenberg reflects on his past perspective and acknowledges the importance of work-life balance in making employees more effective and fulfilled.

Employee Commitment

  • The challenge of dealing with employees who do not share the same level of commitment.
  • The necessity of accommodating individual differences while maintaining a high-performance culture.
  • The importance of recognizing when an employee is not a good fit for the company quickly.

It's not one size fits all, Ari. And you have to make accommodation.

Jeffrey Katzenberg advises that while it's essential to accommodate individual differences, it's also crucial to ensure that employees contribute positively to the company's goals.

Firing Decisions

  • The difficulty of firing employees, especially for empathetic leaders.
  • The importance of considering the best interest of the entire company when making tough decisions.
  • Personal experiences of leaders with the challenges of firing underperforming employees.

So it's not what matters to me. It's what's the right thing for all these other people who are bought into this mission that we're pursuing together.

Sujay Jaswa shares his realization that tough decisions, such as firing an employee, should be made by considering what is best for the collective team and mission, rather than personal discomfort.

Generational Work Ethics

  • The perception of millennials and Gen Z as less desirable employees.
  • The changing priorities of younger generations, emphasizing fair treatment, quality of life, and corporate social responsibility.
  • The challenge of finding employees who align with the company's mission and values.

A recent national Society of high school Scholars survey of 11,000 high school and college age people found that Gen Z's highest priorities when choosing an employer were the fair treatment of all employees across genders and races, followed by quality of life, employer flexibility, and corporate social responsibility.

The quote presents survey findings on Gen Z's employment priorities, illustrating a shift towards social values and work-life balance.

Team Dynamics and Remote Work

  • The impact of remote work on learning and mentorship opportunities.
  • Anecdotes illustrating the value of in-person interactions for professional growth.
  • The realization that there are different levels of dedication and work ethic.

I guess I just realized there's another gear. And I think that's actually the biggest thing that's missing from remote work.

This quote from Sujay Jaswa's associate reveals the insights gained from observing the work ethic of experienced leaders, highlighting the limitations of remote work in conveying such lessons.## Mentorship and Learning

  • Sujay Jaswa credits his closeness and learning to spending hours conversing and working closely with his mentor.
  • Jeffrey Katzenberg emphasizes the importance of practical lessons learned through experience, such as efficient traveling and punctuality.
  • Sujay Jaswa experienced significant personal growth from day one to day six through these lessons.

"then we'd just shoot the breeze for a few hours. And that's how we became so close pretty early on. He's one of the greats, in my opinion, in this business, and I got to work with him on everything for years."

This quote highlights the value of informal conversations and spending time together as a way to build close relationships and learn from experienced individuals in the industry.

"It's just like lesson after lesson after lesson. He just kept seeing when we say we'll be down at five minutes of. Six, it's six minutes of six that we're down, not five minutes of six."

This quote underlines the importance of precision and punctuality in professional settings, as well as the transformative impact of learning these lessons on an individual's work ethic and personal development.

Remote Work and Company Culture

  • Jeffrey Katzenberg discusses the inefficiency of commuting for jobs that do not require in-person interaction and the potential for remote work in such cases.
  • Sujay Jaswa observes that remote work's success can depend on leadership and the nature of the company, citing the example of Twingate, which thrived remotely since its inception.
  • Both speakers agree that in-person work is valuable for certain roles and predict a gradual return to it for some companies.

"The herd idea that everybody moves in sync with one another, I don't think that makes a ton of sense, but the value of people being together in certain types of functions inside of companies, I think is invaluable."

This quote suggests that while a one-size-fits-all approach to work schedules is not practical, there is significant value in in-person collaboration for certain job functions.

"But for us, and I think probably for most companies, in-person, is big."

This quote reflects Sujay Jaswa's belief in the importance of in-person work for most companies, despite acknowledging that some leaders and companies manage to succeed with remote work arrangements.

Personal and Professional Growth

  • Jeffrey Katzenberg jokes about Sujay Jaswa's lack of weaknesses, reflecting a positive view of his colleague.
  • Sujay Jaswa and Jeffrey Katzenberg discuss each other's traits, with optimism and the drive to achieve big goals being highlighted as both strengths and areas for balance.
  • The conversation touches on the need for balance between ambition and practicality in pursuing goals.

"He's an optimist. And to do what we're doing, if you're not an optimist, you'll never find opportunity."

This quote emphasizes the necessity of optimism in entrepreneurship and the pursuit of opportunities, while also hinting at the need for a balance with skepticism.

"I guess the only thing I would say is that he always wants to hit the home run."

This quote from Sujay Jaswa critiques Jeffrey Katzenberg's inclination to always aim for major successes, suggesting that sometimes smaller, strategic moves can also be effective.

Venture Landscape and Future Outlook

  • Jeffrey Katzenberg expresses concern that the venture landscape may take time to adjust to the current economic environment and the need for hard choices.
  • Sujay Jaswa references Warren Buffett's "circle of competence" and emphasizes the importance of understanding one's own limitations.
  • Both speakers share their visions for the future, with Sujay Jaswa envisioning a focus on building companies and making growth investments.

"Just that it's going to take longer for it to right size itself for the economic environment that we're in."

Jeffrey Katzenberg's quote reflects his concern about the venture capital industry's pace in adapting to economic changes and the potential reluctance to make necessary adjustments.

"Buffett circle of competence. So the concept is, stay within your circle of competence."

Sujay Jaswa's quote refers to the principle of understanding and operating within one's areas of expertise, which is crucial for making sound business decisions and avoiding overreach.

Company Gifting and Investment Management Tools

  • The conversation shifts to discussing tools and services that facilitate company gifting and investment management.
  • Andopen is highlighted as a platform that simplifies corporate gifting with a focus on quality and ease of use.
  • Angellist is praised for its ability to streamline fund management for investors and its new product, Angellist Stack, which supports founders by handling incorporation, banking, and fundraising.

"Their platform is filled with best in class brands, there are no bad gifts, ever."

This quote underscores the quality and reliability of Andopen's gifting platform, emphasizing the absence of undesirable gift options.

"Angellist Stack, which is purpose built for founders with Angellist Stack, you can create a fundraising ready startup in just a few clicks."

This quote highlights the benefits of Angellist Stack for founders, offering a comprehensive solution for starting and funding a business with minimal complexity.

Online Business Presence and Marketing

  • Squarespace is mentioned as a comprehensive platform for creating and managing an online business presence.
  • The platform's strengths include mobile optimization, integrated email campaigns, and SEO tools that simplify digital marketing efforts.

"All websites are optimized for mobile content automatically adjusts beautifully so your site looks great on any device."

This quote emphasizes the importance of mobile optimization in today's digital landscape and Squarespace's capability to ensure websites are mobile-friendly.

"Squarespace makes it super easy to grow and engage your audience with Squarespace email campaigns, so you don't need any other tools or providers."

The quote highlights Squarespace's integrated approach to email marketing, which allows for audience engagement without the need for additional tools or services.

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