What is common to Cisco, Oracle, Google, Apple and WhatsApp?

Besides being some of the most iconic technology companies in history, all these marquee firms share one more thing in common – an investor named Sequoia Capital.

Sequoia Capital is arguably the most prestigious VC firm on the planet and its chairman, Michael (Mike)Moritz is undeniably a legend in the tech investment arena. In a glittering career spanning over thirty years, Mike Moritz has presciently identified and backed companies like Google long before they were the behemoths that we see today.

Hearing Michael Moritz of @sequoia on investing in India. Tks @247life & @Product_Nation pic.twitter.com/CwnaywQAgj

— Prasanna K (@prasanna_says) July 25, 2015

Mike was recently in Bangalore and shared some insights in an event organized by iSPIRT, India’s leading technology thinktank.

Backing unfundable startup chasing seemingly impossible dreams

When asked about what Sequoia looks for in a startup, Mike says that they look to fund people with a deep sense of purpose working on ideas that seem unfundable to others. In his view, the best entrepreneurs are obsessed with a particular idea and see it as their life’s mission to make that idea work.

They are ready to perseverefor years and make painful decisions to achieve this mission and exhibit an almost unnatural clarity of thought when they communicate this dream to others.

Start small, dream big

While history inevitably builds a romantic narrative around successful companies post facto, Mike believes that at the time they got off the ground the household names of today, each worth billions of dollars, started off with things that seemed small with little inkling on how that their startup would evolve into anything big.

On day one, very little is obvious – but as time goes by, opportunities open up almost magically so much so that a seemingly arcane PhD thesis about a way to index information metamorphosizes into a platform called Google that is valued more than Microsoft.

Steve Jobs – what to emulate and what to ignore

Many Indian founders are besotted with Steve Jobs and are fashioning themselves after him. Mike knew Steve Jobs well, in fact he authored a seminal book on him. He feels that the media largely missed the truth about Steve Jobs – while there are multiple stories about his temper and acerbic personality traits,at his essence, Jobs was a dreamer obsessed with his ideas on personal computing.

Despite all the failures that he had to face, he preserved through over a very long period and brought out innovations like the iPhone and the iPad. Rather than emulate his personality traits, Mike feels that entrepreneurs should learn this sense of playing the long game against impossible odds from Steve Jobs.

Go East

Mike is of the opinion that while hitherto, the US had a near monopoly on tech innovation, the next twenty five years will belong to the East.

He feels that the biggest companies of tomorrow will emerge from China and to a lesser degree from India. This has as much to do with the large local markets where competition is fierce as it has to do with the greater appetite for work, the resilience and the stronger fortitude that entrepreneurs from the East have.

In an era where competition is global and information is transmitted instantly, these qualities put Eastern entrepreneurs at a marked advantage compared to their Western peers.

Unicorns that may go extinct

While there is so much euphoria about Unicorns – startups that are worth at least $1 billion – Mike feels that there is a good chance that many of these companies are overvalued and will die sooner rather than later. In his considered opinion, the best companies will not get stuck up in valuation but will instead try to build sustainable business models.

Epilogue

While Mike’s insights were valuable and his humility and candor were admirable, one couldn’t help but notice a proverbial sting in the tale.

Does the thought of backing unfundable entrepreneurs still hold true in a world where VC firms are fiercely competing with each other to fund the next hot startup in thehot category du jour? While traditionally Sequoia has avoided funding competitors, six of the largest funded hyperlocal startups in India are all funded by them opening up seemingly irreconcilable conflicts of interest.

Similarly, it seems incongruous to caution about Unicorns and bubble valuations but simultaneously deploy huge rounds of capital in unproven companies in crowded winner-takes-all markets feeding the frenzy further.

While history has already recognized Mike Moritz as a doyen of technology investing, time will tell whether his firm will continue to build on his pioneering path or chalk out a completely different destiny.