Charlie Rose Talks to Sequoia Capital's Michael Moritz

The chairman of the venture capital pioneer discusses the sector’s future, counters Apple’s critics, and talks about his health and his changing role

Charlie Rose Talks to Sequoia Capital's Michael Moritz
“Apple was at a $200 billion-a-year sales rate. You can’t grow that at 45 percent a year”
Photograph by Noah Berger/Bloomberg

Where are today’s tech entrepreneurs coming from?
It’s obviously unfair to paint with a broad brush here, but the germ of an idea for a breakthrough in technology doesn’t come out of a business school curriculum. It comes out of a laboratory or a math lecture or a physics tutorial. Or in the case of somebody like Bill Gates, from an avocation in which he deeply immersed himself, like Warren Buffett, who discovered investing when he was 11 or 12. These people discovered their calling at a young age, and they fell in love with it. That’s a common theme for the people we encounter as they start to develop ideas.
You were originally a journalist and got to know a young Steve Jobs. What was he like then?
Steve is probably an example of, like many, many people, the truism that you can never take the boy out of the man. Many of the traits that people became familiar with in the last few years of his life were on full display 30 years ago. A spectacular communicator, a wonderful salesman, a man on a messianic mission, a taskmaster, a man who’s difficult to please. But also an extraordinarily mesmerizing figure, probably the most interesting person I’ve met. He wanted me to write a flattering book about Apple. I was interested in the private years, the ups and downs. And along the way, there were a couple of stories [written by Moritz] that irritated him. After that our relationship became distant. In the last decade it was intermittent, just related to business. We weren’t friends.
Is venture capital as attractive today as it was when Sequoia was getting behind Google and PayPal and Yahoo! and
It’s probably more attractive, oddly enough. It’s a business that’s always had the investment returns concentrated in very few hands. Many of the venture firms don’t succeed. They’re around for 5 or 10 years, but they’re not around for 40 or 50. For people who know what they’re doing in Silicon Valley, the business is actually better. The investment menu is longer than it’s ever been because technology has seeped into more and more crevices and nooks of the economy. When I started at Sequoia Capital, there was no way that we would have considered investing in a payments company, a financial-services company, a media company, an advertising company, all of which we’ve invested in quite happily for the last 15 years.
Do you still invest with long-term intentions?
People would be staggered at the length of time that we hold investments. It’s not uncommon for us to hold investments for 10 years or more. It’s certainly not uncommon for the partners at Sequoia to own stock for 15 or 20 years. Why, with a well-positioned company that’s growing, would you ever want to sell? We invested in Cisco Systems shortly after I joined Sequoia. It was before John Chambers, before his predecessor, in fact. I owned that stock for 16 or 17 years. It’s the same with a company like Google. It was so obvious that it was such a well-positioned company.
You defended Apple after its stock price took a hit recently. Why?
I’m not a soothsayer. All I was trying to do in the pandemonium after they announced their results was try to paint a picture of realistic expectations for a company as large as Apple. The point that I was making was that if its growth rates of the last five years were to continue, by 2020 it would be equivalent in size to somewhere between the GDPs of France and Germany. Apple was at a $200 billion-a-year sales rate. You can’t grow that at 45 percent a year ad infinitum. It’s physically impossible. I was trying to help give people a sense of perspective.
You’ve reduced your role for health reasons. Can you talk about that?
I’m very involved with the investments that we do, but not the management. I was diagnosed with a rare condition six or seven years ago, which I kept to myself, and then had an encounter that I didn’t want to have with some doctors at the beginning of last year and decided I had a choice. I was going to take more time off; I needed that for myself and my family. Given our work ethic at Sequoia, you couldn’t have a leader taking off 12 weeks a year.
Tell me why you continue to serve on so many corporate boards?
I love it. Particularly the younger companies. There’s nothing more invigorating than being deeply involved with a small company and a young team of founders out to do something incredibly special. And everybody’s betting against us. It’s another mission impossible.

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