Jeff Wang
speaker
190 appearances
1 recordings
1 series
first heard Oct 2024
last heard Oct 2024
Jeff Wang’s voice in public audio — every appearance, attributed to the second.
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Appearances
It's just not what you're spending every minute of every day thinking about. It's also really hard to recruit great talent if you watch over and second guess every single investment. But that said, there are also many aspects of running a first-class investment firm that do overlap. So for example, hiring the best talent.
So instead what Michael and Doug did was they were heavily and actively involved contributing through leadership and mentorship. So Michael and Jim Goetz joined our portfolio reviews for the first several years from inception and helped us refine our investment process every week. Doug and Jim have been critical with LP relationships. With recruiting, Ruloff still interviews all our key hires.
Michael's even come with me to meet public company CEO management teams. We've taken multiple international trips together, including several to China. So they helped inject Sequoia DNA in a way that was very, very valuable for us.
Now, when I speak to other VCP funds that have reached out to me over the years to get advice about launching a similar effort, they almost never want to give up control. They want to dictate the investing. And I just don't think that's a recipe for success. It's when the fundamental discipline is so different from what they're doing at the core.
I think the biggest risk for us is being based here in Silicon Valley, you believe everything's going to happen overnight. Mobile or cloud and now AI are taking over the world. They're just going to leave all this destruction in the wake. And the reality is these things usually happen very fast, but also much more slowly than peak enthusiasm would suggest.
As a hedge fund, we're trading off the Wall Street echo chamber for the Silicon Valley venture echo chamber. And that's certainly got puts and takes. One thing that we try to do is to combat that is to host outside voices to speak on occasion.
And so I forget if it was Doug or Ruloff who organized this, but we organized, for example, Charlie Munger before he passed to come in and talk to the partnership. We've had Stan Druckenmiller come in and talk to us. They think in a very different way than we do.
Well, we get the benefit of seeing things very early on. We get really excited about AI, how it's going to take over the world. Maybe we put on a short that it's just too early. It's going to take time for some of these things to actually happen. There are areas within AI where I do think it's happening very fast. I think there is going to be massive disruption, for example, in call centers.
And I don't think that's going to take a lot of time. There are other areas in AI. Now there's this, there's a narrative that I hear now that software companies are going away, right? AI is going to write all software. And I just think that's, that's a naive view. It may happen, you know, over the longterm, but
And Klarna is a very tech forward company. 99.9% of the companies in the world are not Klarna.
Yeah.
I think it is for some time. So when you think about AI today, productization of AI is a function of owning the customer and owning the data. We are not in a world where AI has created a new distribution methodology. And so if I think about some of the walled gardens, like a meta, you own the customer experience, you own the data.
And so your ability to productize and roll out AI features and functionality to Instagram users very seamlessly is incredibly powerful. And because Meta has this auction marketplace for ads, you also have the ability to reprice your AI features very quickly, right? All these merchants are getting a return on their ad spend.
And if someone is getting better return on ad spend, the CPMs for these ads go up. So there's a massive moat for some of these largest companies. Now, what I worry about is this will start to disperse more broadly, but at least in the initial stages of AI, where your data and distribution are so important, I think the Mag7 will continue to do quite well.
On Google, I'd argue GCP is not the cash cow. It's search. With search... I'm not sure. I'm not sure how AI is going to impact search. Where it is today, AI is really good at taking low signal data and translating into high value output. So in the case of meta, taking what you're looking at on Instagram and figuring out, okay, you want to go buy this type of product. That is incredibly valuable.
Google's got an incredibly valuable machine in that you type into the Google search bar exactly what you want. You type in skiing in Park City. Well, guess what? I know you want to go skiing in Park City. Your intentionality is 100% known at that point for me.
Whereas I think for Meta, I think the value of AI is, at least on the ad matching side, I look at a bunch of what you are browsing on Instagram and I say, okay, Harry wants to go skiing. He hasn't decided yet that he wants to go to Park City. Maybe he wants to go to Whistler. How do I then move you in that path to get you to a different location?
Or maybe you're even earlier on in the funnel and you say, I just, Harry wants to go on vacation. And maybe you haven't even decided on skiing. Maybe you want to go, you want to go to the beach. So I think AI has a lot of value for that. I'm not sure as much for Google.
How do you influence, how do you drive a material uplift in search when you have one of the most beautiful businesses out there ever?
We're not either long or short, Google, but I do think there are more threats on Google's business than there have been essentially ever in the company's history. I don't think it's just perplexity. In fact, if I were to say, who do I think is going to be the number two threat in search to Google? I think it's probably Meta, right?
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