COVID, Complexity and the ‘I’ in Team: Takeaways from Tech VC Carl Eschenbach
Published: October 29, 2020 / Author: Michael Hardy
In 2016, shortly after becoming a partner at the legendary venture capital firm Sequoia Capital, Carl Eschenbach started researching an exciting young video conferencing company that promised to transform the way we do business. Eschenbach liked what he saw, and in 2017, Sequoia gave the company $100 million in Series D funding at a valuation of $1 billion. The company was Zoom. When it went public in April, in the midst of a pandemic that has made its service more important than ever, it quickly became one of the hottest stocks in the world. The company currently has a market cap of around $140 billion, and Eschenbach has a seat on the board of directors.
Eschenbach has used his three decades of experience in the tech sector to make a series of similarly prescient investments at Sequoia, including in UiPath, Workday and Snowflake. Before coming to Sequoia, he spent 14 years at the Palo Alto-based cloud computing company VMWare, which he helped grow from $31 million to $7 billion in annual revenue and from 200 employees to 20,000. His extraordinary track record of success made him the perfect first guest for a new webinar series hosted by Tom Mendoza (ND ’73).
In each installment of Tom Mendoza Presents, Mendoza, former president and vice chairman of the pioneering data management company NetApp, will interview a top corporate executive about their life, career and lessons learned. The series kicked off with Mendoza interviewing Eschenbach on Oct. 16.
During his wide-ranging conversation with Mendoza, Eschenbach discussed growing up in a working-class Pennsylvania family, what he learned as a collegiate wrestler, and how to spot the next big tech startup. (Watch the full video here.)
Here are three major take-aways from the conversation:
1. There is an ‘I’ in ‘Team.’
“Everyone says there is no ‘I’ in ‘Team,’ and I actually disagree with that. I attribute this to wrestling—in wrestling, you typically have 10 or 12 people on a team, but when you go on the mat you are an individual. The only way you can impact that team overall is through your performance. And when you think about the business world, yes, it is a team that ultimately leads you to success. But that team cannot be successful if you don’t wake up, look in the mirror every single day, and say, ‘What am I going to do to impact the team, impact my peers, impact the people I’m responsible for?’
2. The fastest way to scale a company is to simplify.
“Simplicity scales. Complexity doesn’t. And what happens when companies grow is that you have more and more layers of management, you have more and more compliance, you have more and more controls, you have more people touching the customers. And it’s not uncommon as you’re scaling companies through rapid growth for people to start saying, ‘Man, you’re hard to do business with,’ or ‘Man, it’s hard to get things done with you.’The more complexity you add into the system, the more slowly you’re able to respond to your customers and to your employees.”
3. The pandemic is accelerating the pace of technological change.
“COVID-19 has accelerated the future in technology by upwards of three to five years. In 30 days we had to go through a digital transformation. Companies had to figure out how to go online, how to communicate internally, how to communicate externally. You had to have the systems and the infrastructure in place to do so, yet to also have the security. It’s really driven the adoption of the cloud, because people aren’t in offices to run their big data centers and infrastructure. It’s forced people to do things that they were planning on doing in a much shorter time frame.”
The next speaker in the Tom Mendoza Presents series will be Jayshree Ullal, president and CEO of computer networking company Arista Networks. The event will take place on November 6 at 1 p.m. eastern time.