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Jeff Jordan Interviewed by Kara Nortman | Upfront Summit 2020

Jeff Jordan
Managing Partner at Andreessen Horowitz
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Upfront Summit 2020
January 29, 2020, Pasadena, CA, United States
Upfront Summit 2020
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Jeff Jordan Interviewed by Kara Nortman | Upfront Summit 2020
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About speakers

Jeff Jordan
Managing Partner at Andreessen Horowitz
Kara Nortman
Partner at Upfront Ventures

Jordan is a managing partner at the venture capital firm Andreessen Horowitz where he serves on the board of Accolade, Airbnb, Instacart, Lime, Lookout, OfferUp, Pinterest, and Wonderschool.He was previously CEO and then executive chairman of OpenTable, where he led the company during a period of accelerated domestic and international growth and oversaw its initial public offering during one of the longest tech IPO droughts in recent history. Prior to OpenTable, Jordan was Senior Vice President and General Manager of eBay North America where he oversaw eBay's early growth into one of the Internet's leading commerce brands. In this role, he drove the successful acquisitions of PayPal and Half.com and went on to become President of PayPal where he was responsible for establishing the company as the global standard for online payments.Before joining eBay, Jordan was chief financial officer of Hollywood Entertainment and president of Reel.com. He also worked as senior vice president of finance for The Disney Stores at The Walt Disney Company and prior held various positions at the Boston Consulting Group.Jordan holds an MBA from the Stanford University Graduate School of Business and he received a BA in Political Science and Psychology from Amherst College. Jordan is an active mentor and leader in the Bay Area community; he serves on the board of Stanford Athletics, the DAPER Investment Fund, The GSB Trust, the Stanford School of Engineering Advisory Council, and he also ru

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About the talk

Topic: Business

a16z Managing Partner Jeff Jordan speaks with Upfront partner Kara Nortman multi-stage investing at the firm; trends in VC; how and in what sectors he makes investment decisions including Airbnb and Overtime; how his experience as an operator informs his role as a board member; and the benefit of sports experience as a VC.

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Hello upfront Summit House everybody. We're excited to have come into the doors. That was the doors, right? Okay, I remember I remember I was there originally I remember the movie thank you for that. I'm thrilled to be here today with Jeff Jordan managing partner dance recent Horowitz. Some of you may also know that Jeff did certain iconic things such as taking OpenTable public before that. He's had a long tenure at eBay where he led a QB acquisition to PayPal and then ran PayPal and today we're going to get into a number of

things across Venture and operating so Jeff drill. Either. So maybe I'll just start off with kind of setting the context for Venture in general. We all know about, you know, there's there's quite a bit of late fee. Capital flowing in from both public and private Market, we're still kind of digesting whatever the post wework moment means maybe just set the stage for us. How are you? How are you thinking about the industry? I'm at the whole. There's way too much Capital. The only thing constant since I've

been an investor, which is coming up on nine years. There's always too much Capital the interesting to watch with a Cycles come and go and so there is definitely a we work affect going on. Now in terms of the Ojai burn has gotten less less appealing to people to keep questions on who is wework a real estate company or a tech company that's coming up in a bunch of segment so affected it, but it's in the cycle. So all you do is work with there are companies who we think will be impacted to be ready when they're going out in the market now, so it just goes to do with sea

lions pushing very hard for property building out for example External environment as a whole are you having more conversations about burning Capital efficiency across the board or is it kind of second-place very selective. It's only certain companies still frothy and we just worried we're still we're seeing now Behavior. There's like 100 people real writing checks without diligence again, and they know that cup Die part of the late-stage hybern companies are the ones who I think are

small basket should be paying attention stage fun. When when and how you go in. What stage is sort of the preferred stage? Has that change based on Market or is it pays more based on partner? And I first joined we had a reputation for writing. Big Shaq should have seen valuation in a bunch of strategic companies one of those with Skype we were gratified when it's actually true me all week. They for Exton their money in a couple years that help but then bloat got nuts. And so we didn't write

gross check for a long time like 5 years and then the girls Market kind of came back. And so we recently ate the last one we raise was that what we call a stage Venture which is kind of CD high-growth companies slotted way before a soft egg become intimately got it says practice being thing we've done in and out of his we started doing a lot of seeds. We do very few seeds now part of it. We don't want to compete with her Upstream investors and part of it is The biggest challenge we were

having was competitive company for seeding. We had a Content conflict risk when we invested in their competitor, which was a completely Fair information. We just didn't think about it. So we back way off on scene but the main funds are try to plow in the A's and B's now and then typically that gets the CD that goes into the light Center Woodward if I see you give to Founders when you're meeting them early and it may be a bit early for for you guys to come in as they're sort of navigating a seed environment where they can raise around in a second bring in an eighth from its going

early into a seed Round We believe the council to give is the clothing investor matters. Not just just not valuation and you just see that play over and over and over again. We're going to just kind of like when you take on a board member you are taking on someone who has a fiduciary responsibility to hire and fire and if it work you're going to have that board member for like 12 years so pick carefully. Getting really good investor is someone who you trust someone who you know, you think you have a rapport with it has your back somebody recently said to me I don't think entrepreneurs

realize that venture capitalist have tenure being a professor at a university with tenure which I thought was an interesting comment because you really can't fire your venture capitalist. But if you know, the reverse is obviously we're going to shift gears in two friends solo venture capitalist love to talk to and talk about goat butt off and act like sheep the practice. Come on guys as we know we play a lot of buzzword bingo. Once I can see our air is in one second to see is in now fast is very and

what are you doing? What are you guys kind of viewing as a bit overhyped sectors that you're may be more cautious around right now. We've been fairly Great company are they can grow like crazy. The thing it's been hard for that whole sector is to actually make money. I think that is best. I'm aware. There are after 25 years of venture capital investing in the US and tens of billions of dollars going and e-commerce. I know five companies that have a billion dollars in sales in our profitable. One of them is on and it started before we started our fund where in fanatic we were in Zulily and then

there's chewy & Stitch fix that's pretty miserable for twenty-odd years and tens of billions of dollars in terms of returns. So we we've been leery on that. Is it is it possible that that it's sort of went through this. And be overfunded companies and they weren't forced to be excellent around IP or tack or Diversified marketing consumer behavior is not not staying static on the streets in very desirable neighborhoods in Los Angeles and Retail Store. We can't stay in business and so is it is it possible that you know, if

the contrarian view might like I give her tons of credit it said so it could definitely be I mean, that's the thing about the investment business is you only know the answer like 10 years later was I right. I don't know. You know, I know it's a difficult business in that regard, right? There's no Google dashboard that we can look at everyday talk to us about some of the areas that you guys are are you specifically are most excited about so I'm boring. I'd stay

really close to home. I mean, they think the country's I operated look a lot like the company's I invested in so I mean eBay PayPal and OpenTable look a lot like Airbnb Pinterest and instacart. It's so typical a focus on Marketplace business is our business is where I perceived opportunity. If they're successful over time it so I stay pretty boring firms gotten pretty expensive. We have a we have our main fun and R late-stage fun. We also have a bio fund for the intersection of bio and digital as well as a crypto fund. And so we we we we are the pretty expansive and I

think we're on our way up to eat teen Dental partners. Are you spend more time with me to just started? I think you're allowed to speak about this. But can you talk about sort of your when you came into Venture? I think a few of your first picks for ones that are now the kind of the grab some of the most call them. They are the most iconic consumer brands of the moment and Pinterest Airbnb xcetera. Talk to us about those first meeting great stuff for veterans Stanford physical name Jennifer Hawker and Jennifer had his class is just a really interesting counterintuitive classes one. Is it

humor in business? And the other is storytelling and she had me the guess. I'm like, what do I know about storytelling and then I died talking to her. She goes to tell stories and it's just like I remember the Airbnb pitch like almost word-for-word cuz Brian is a unbelievable Storyteller and he's mesmerizing and he's got energy Pinterest pitch does Ben is just as talented and couldn't be more different Brian the Showman Bookstore at the end the end for us. We have this concept called

products founder fit. You know where we're not looking for Mercenaries were looking for someone who came to this. They didn't go to business school do a spreadsheet and pick the one with the most green balls. They earn secret that they uniquely have and that I have a bias towards I'm sitting here and thinking were you at home scrapbooking and then Pinterest came to you and you just got it with my partner Mark Oliver musical fanatics, but I'm not allowed to ask him to rap on stage. Apparently kid would be upset to be a great big sea.

You have to know enough to not get into you not to not feel like there's a selection but not so much that not know if so much that you talked yourself out of it. And so, you know, it's been a long time. Pretty in the what we used to call local space know when next door and companies like that came around. I just couldn't see how they would work. What was your reaction to say Airbnb the kind of the thesis or the team. Did you just did you say the other?

Absolutely crazy? I did I thought it was a stupid idea I've ever heard of like I like my privacy the concept of stranger in my bedroom me in a stranger's bedroom just wasn't there and I just didn't understand it. So I was at a investor conference soon. Thereafter. Listen house nine years ago or something Brian's been working like 10. So it was pretty early and Brian presented Airbnb at this conference closed investor conference room in the back road going like oh my God, it's deja vu all over again if scale

huge trust and safety issues. The quirky little quaint thing in the community of users were added took animated huge till after I got to go to the bank or after the meeting. I got to meet this guy and he starts laughing Brian estimate one person at the conference and it's you and I want to meet me a stupid that was one where I turned around in 30 minutes half hour to turn into 3 hours and then soon after I became Adventure capitalist. So Mark and I were talking about around and when I was being recruited at Andreessen

Horowitz, I said what company should we be paying attention to an Airbnb and Marcos were raising around until I call Brian saying like I'm going to join Andrews Norwood since that's amazing. Very very likely get it while other people were talking to another those rounds we're going to the criticisms came out all day just over pay they bought at they did all this but we were competing with two very very good investors and we were fortunate to to La so so maybe shifting into some of your new or invest Investments and in general and maybe before we get

there at talking about what you're looking for in Marketplace Investments today. One thing I'm curious about what is we've always kind of been obsessed with DMV growth and rake and now you have all of these Marketplace companies who are layering on product very quickly. Make up a bit more Southlake. And so what are you looking for are the metrics changing gmv conversion rate in a co-worker's in their behavior, everything a long-term retention and things like that. So Center Marketplace

edit the marketplace model apply to vertical X and so the one recent one was Marketplace model apply to preschool. So the Airbnb a preschool is Wonder school and that's just the same classic two-sided Marketplace meet in the middle and no economic empowerment again at a scale be a teacher and $30,000 in wonderschool can put them in the business running their own preschool out of their house and they can be running your own business. Play the network. There's a severe preschool shortage in the United States them. It was funny that what I was considering that investment. I was

getting Lobby by half the women in The Firm thing like that's a great idea. We need that, you know kind of thing. So it's a useful to have women in firms hires. And and you know, some of some of my favorites are there are there other kind of areas that you are actively hunting games with he's he's verticals where you haven't seen the metrics or the founder yet from a a like the marketplace model of the following out of Craigslist. That's a gift that just keeps giving so I keep looking

for the last couple categories of OfferUp is really cannibalizing the goods category, you know, Airbnb the shared rooms in all that they did was it at the classic thing. No one's done Blue Collar Services yet it well. No one's done rental yet. Well and so Waiting for Godot Reynolds of a housing my kids my daughter lives in San Francisco. They just moved they still go to Craigslist a bad experience. I used to be able to say this Craigslist does not know the mobile 2 smartphone came out. They just debuted a

smartphone app. So yeah, I think that's 10 years to write that but it's it's it's such a nice attractive liquid liquid at its not at the classic market place where it's really meeting in the middle and I died actually visited Angie when I was at eBay, I mean cuz I love you one of my misses at eBay as we didn't get into Services particularly after we had PayPal cuz then we had to payment Loop and everything, but I think I miss at the time was that you need is a smartphone you need the provider to be connected during the day. When they're out working and so

the smartphone was required, but I still poking out of yoga with Marca blades move. It might become a Marketplace but historically was just Legion young man there any of them obviously would be a one-time type of thing. So I'm cleaning and and yard maintenance yard maintenance don't really care who's doing it because it's outside you care a lot who's cleaning your house because it didn't side and so that that's been slow to digitize as well as other topics. Tell me about this gen Z Sports media me a very very

very cool. Fort has a huge Sports media in the US has a huge issue with an H problem young people are not consuming watching sports anywhere near like my old people like me and tell me some sports are aging at an amazingly fast, right baseball is basically aging a year or a year. No new kids come in wanting to watch baseball and the people who watch baseball just brought in here. So the average is the other part of sports meet his brutal as you have the rights issue. So I'll just say okay you need

a big check over time is start by Zach Herron's accuweight Winger Dan did OMG pop that last company so he understands the social mechanics started with high school sports gave all the developed an app that ate the friend of a basketball star could use to track him during the game. And when he did something spectacular a highlight, you just say save it would uploaded overtime and overtime. Distribution distributed out to different Channel. That's how they started what they did then developed by terminated Twitter snap YouTube

kids love them cuz they're done both their age and it's done with their aesthetic. It's huge reaction shot thing. Oh my God, Zion Williamson High School. Just did that dung people running around all over and help a 18 year old that's pretty funny. And so over time is already on there doing well over a billion video views a month now and the celebrities at the NBA All-Star game last year overtime Larry Cohen, Cory Batey Secrets. He's homegrown Talent on overtime is walking across the marina at the NBA All-Star Game and 15

18 or older chasing him. Feel like he's LeBron and it's just kind of like if they did they clearly got in a quart. So it's really interesting to the stars in this media when they're Nathan and it's carrying them through college and then professional sport where you have all these other platform celebrity aesthetic or do they are they able to age With Their audience? Cuz you know, Zion Williams was kind of somewhat discovered on overtime and all his best clips from his high school days. Yeah,

we're being distributed on venues like ESPN Rover time and now Zion still likes the overtime guys, you know, when you got to do to The Four Freshmen did an interview with bazooka with overtime and soap Pencils about his Yahoo! Feed really use the players to build the brand and do the Brandon the players live together in the same way, but it did definitely really interesting thesis Adventure. What do you like with your Founders? What is still relevant where you have to hold yourself back? One of the biggest questions I had when I was making the transition was would I be comfortable not having my

hands on the wheel is it would read Hopkins metaphor is as an operator your hands on the wheel and read me this one time. I thought I was sitting in the passenger seat supposed to grab the wheel. But you know, so the biggest question I had would I be reaching for the wheel thing cuz it's just emotion. I'm used to turns out. Didn't need to reach for the wheel at all that I found it quite easy and I did another former BC turned operator. Andy Radcliff was founded wealthfront after his career Benchmark. I was in a real ID called me co-founder

there. So I'm talking to murali at the fire is first employee and he's going to like this stuff is this operating stuff is hard and I don't what do you mean if I did I'd be talking my company for 3 hours and then stand up paddle in the back of the head. Good luck with that. See you next quarter motion has its Advantage stories from your past that allow you to be most persuasive with your Founders. I mean the behaviors where they're doing an x-ray or right

the way you get to be a pretty good operator is you make a lot of mistakes and learn from them. So I I find the most effective when is is not telling them what to do but just say listen what I asked I've been involved in situations like this. I've tried these three things in my experience. This didn't work. This was horrible. And this was the least nauseous. And so that typically I think it gets her former director portare today including my partner Greg bettinelli and I was told to ask such questions as what does he do when he gets up at 4 in the morning and they both said What team what

is your style when someone comes to a meeting unprepared. Doesn't go? Well actually someone in this room tree, where are you? I'm in the room without a Blog today on it saying apparently I was slightly intimidating at eBay not because I was a yeller but because I was pretty deep in the product and had pretty high expectations when people came in that they they similarly word upon the product itself get away. Apparently. She has is his wife found some value in that. Very glowing way

fans baby chicks in the number to Andreessen as managing partner to injuries. And how do you think about picking people enter firm? I mean where I think we now have a hundred and eighty seven employees. That's probably more than R5 closest competitors combined and so it is at our business. And so what were they we we have a bunch of 18g peas and a deal team. We also have a set of networks that we've built that we find our helpful to our Founders tricoli. First time Founders

networks of executives are Engineers. Our customers are following investors are are marketers and Basically, it's a company so would a lot of what I learned is it operator is that is true. There's one huge difference is a partnership. So I'm managing partner, but I'm not a boss equal economic partner with my other partners in the Venture funds or how do you heard 18 cats as a out when the Motions pretty easy you get to make the call. I don't get to make many calls. I may we all make calls and so

dep can invest money in the deal in their area of expertise assuming they've done the work to understand the competitive set. You could be one on 17. But if you're that convicted in doubt, you have to have a lot of conviction of 17 of your partner to yell at you but very few of our investments are I've been unanimous. And some of the ones that I'm not allowed to talk about because of the are a thing that it that perform. Well, very controversial like I wouldn't do that why I kind of think so it's

interesting ball game that I'm I'm hoping. I maybe you'll get an invite to I run a pickup game here in La. Tell Me. Maybe make some people little bit about what it's done for you but maybe make the case for hobbies because I found these in the last couple years and change my life for the better or talk about the top be stupid enough stilted to be highly active and competing at an advanced age against 24 year old cop go D1 college athletes for me. I'm on their man. That's how many other 61 year old. Are the

postgame deteriorates rapidly for me the lessons of team sports in the lessons of business are incredibly similar to terminate their seem like they're just different terminology. You know, it's continuous self-improvement being a good collie being the teenager's all these things. So for me when I'm asked why you know, what's the philosophy you bring? It's like it's a it's a team sport philosophy at my job is to make everyone else on this team were successful and you know and and do it the way that I love you don't take credit for it and and those lessons for me. Translated

literally literally from the sports world into this is what I do for a living. I mean, it's like that scene in animal house where they do the Nerds at the Frat keep getting a puddle in the same room. It's like, it's me. I can keep the boys here later may be keeping Bill girl. Are the 3 l you go to the NBA All-Star Game? Hey, Bill. Hey, Keith, you go to the NBA playing remember so maybe take us home with what is the most delightful non Venture related moments that has come out of sports. Are your basketball game for you? First Hellboy?

I didn't have them on the answer. I'll give us a simple and I have been on this field before but I was under a captain of the Stanford football team when they were taking on UCLA four years ago. I walked on the field with Christian McCaffrey and Solomon Thomas as we were two captains of the time you seem like bought this guy named Rafer Johnson, you know, but I had to take him but an Olympian but that was a pretty special experience a lot of experience cuz I know the Blake

Martinez the Packers and Harrison Phillips of the bills and be Christian and Solomon and it was fun. It was a lot it's important, but it's not everything and please join me in giving Jeff a big round of applause. Thanks for joining us.

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