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Optimal minimal. At this altitude, I can run flat out for a half mile before my hands start shaking.
Can I ask you a personal question? No, I just need a break in time.
What if I did the opposite? I must have a magnetic organism living tissue over a metal endoskeleton.
Hello boys and girls, ladies and germs. This is Tim Ferriss and welcome to another episode of the Tim Ferriss Show. My guest today is John Doerr, d o e r r. You can find him on Twitter at John Doerr. John is an engineer, venture capitalist, and the chair of Kleiner Perkins, as well as the author of the number one New York Times best-seller Measure What Matters. He has just written his new book Speed and Scale, subtitle An Action Plan for Solving Our Climate Crisis Now. This is something that has really been on my mind, and I'm thrilled to have him on. Doerr was an original investor and board member at Google and Amazon, helping to create more than half a million jobs. A pioneer of Silicon Valley's clean tech movement, Doerr has invested in zero emission technology since 2006. He's passionate about encouraging leaders to reimagine the future, from transforming healthcare to advancing applications of machine learning. Outside of Kleiner Perkins, Doerr works with social entrepreneurs who are tackling systemic issues across climate, public health, and education. You can learn more about Speed and Scale at speedandscale.com. I recommend everyone take a look. John, welcome to the show.
Thank you very much. I'm thrilled to be here.
I am very excited to explore many, many facets of your life and certainly current interests, and I wanted to start with perhaps the first visit or your relocation to Silicon Valley. How and why — I suppose why is most important — did you end up in Silicon Valley initially?
I came to Silicon Valley in the summer of some graduate studies I was doing in Boston. And I came there with no job, no place to live, and no girlfriend. My beloved Anne had dumped me and fled herself to Silicon Valley because I was persistent is the way I'd put it. And so she found herself a great summer job at Intel. I didn't know where she was working. And I too was looking for Anne and looking for a summer job. So I rented a $55 a month garage apartment in the hills above Stanford and set out to cold call my way into some kind of summer opportunity. And this was just at the same time Tim, you'll remember this, that Intel invented the 8-bit microprocessor, the 8080, which was the engine that MS-DOS ran on and Microsoft BASIC and so forth. And lo and behold, I got myself an internship at Intel. And the first day that I showed up for work, guess whose office was down the hall from mine? Well, Anne Holland. She was not pleased to see me.
Took the better part of the summer to put the relationship together, back together I'll say. And now we've been married 43 years.
So that is a huge win and certainly persistence rewarded. There are some other factors that seem to also contribute to another big win and that is landing at Intel and also getting to know Andy Grove. For those who don't know, could you describe Andy Grove and perhaps your first impressions.
Andy Grove is a Hungarian immigrant. He came to the US with literally nothing, enrolled in City College in New York, spoke broken English, and studied semiconductor physics taught at UC Berkeley. Has always been an educator. And he worked at Fairchild Semiconductor, the godfather if you will, or the progenitor of the Silicon Valley semiconductor industry. When Bob Noyce and Gordon Moore left Fairchild, the so-called traitorous eight, the fairchildren, resigned to form Intel. Andy Grove was the first executive that they hired. Initially he ran operations. Ultimately he ran the entire company. But he's arguably thought to be the best manager and leader of his or maybe any other generation.
That very first summer that I was at Intel, I got to attend Andy Grove's courses on Intel. He called them IOP for Intel Organization Philosophy and Economics. And a particular lesson that he taught was how to get people to set goals, to get them focused and aligned and committed and tracking their progress. Andy called these Imbos, Intel Management by Objectives. I call them OKRs for Objectives and Key Results. But to make a long story short, in the semiconductor business tens of thousands of people have got to get lines a millionth of a meter, one micron, right or nothing works at all. So discipline, precision, accountability, stretching to do amazing things — that was all a deep part of the Intel culture and this system. I took this idea of OKRs when I left Intel everywhere I went. I was the Johnny Appleseed of the good gospel of Andy Grove. And so I had the chance to introduce it to small companies and large companies, to startups like the Gates Foundation when it was getting started, to Larry and Sergey in the very early life of Google. This is interesting because our plan for the climate crisis is based on OKRs, Objectives and Key Results.
We're going to spend a lot of time on OKRs and discussing the climate crisis, but before we do, I want to spend a little bit more time on Andy Grove and your professional development after Intel. Could you say just a bit more about what made Andy a good or great manager? How did that manifest? What did you see?
Several qualities. Foremost among them was he was an educator. He thought that leading involved educating your direct reports and the entire organization. Andy was extraordinarily disciplined. He was also ruthlessly intellectually honest. And you always knew where you stood with Andy. He was gifted and skilled at confronting problems without confronting people. But sometimes and very often in business, in fact, those two distinctions get unfortunately mixed up. During my first summer assignment at Intel, my job was to build benchmarks comparing Intel processors to the competition, which was Motorola. I did that. Andy Grove saw one of my training sessions and drafted me to need travel with him to Europe to train the Intel European organization and compete to win business at three very large accounts. This was quite a heady experience, a thrill for, as you can imagine, a summer intern. But he became a mentor, a valued advisor, and gave me my fair share of tough love.
When he gave tough love, this is something I'm trying to develop as a skill myself, candid feedback, this ruthlessly intellectual honesty, do you recall how he did that with you, for instance? How he would deliver that so that it would be perceived as being tough on the problem, but not abusive to the person?
It was always balanced, but direct. So, he'd say, 'John, I'd love your potential at Intel, but you have failed miserably to communicate with the field organization the crisis that we're having with our 16-bit microprocessor.' And he had, I remember when I told Andy that I was going to leave Intel to join a venture capital firm of all things. Well, he had the ability to reach inside your chest and grab your heart, hold it in his hands in front of you, and really question not just what you were doing, but why you were making that decision. So, he was a role model for more than the company, far more than me. I think for the whole innovation industry in his tenure.
Before you made your decision to become a venture capitalist or to pursue venture capital, and please correct me if I'm getting this wrong, but while at Intel, you made what people might think of as an unusual request to be transferred from the Santa Clara headquarters to the Chicago sales office. Why did you do that if I'm getting my research right?
You're right. That's impressive. My initial assignment at Intel was in engineering and then in product management. But through my career I've been really blessed to have at any given time one or maybe two mentors. And my mentor Jim Lally advised me, 'John, if you ultimately want to be a marketing manager or general manager, you're going to succeed or fail based on your ability to motivate others to get sales, to generate revenues, to have happy customers. And you're never going to learn that skill if you stay in the factory. You should go out to the field, take on a quota, carry a bag, solve problems for customers, sell, make your commission or fail at it, motivate others to do the same.' And so he pushed me out of the offices. It was a great gift. And I decided I'd go around and hire myself a field sales manager, somebody to manage my career. I settled on Chicago. And that year and a half helping people succeed with Intel's new microprocessors was one of the most gratifying times of my career.
Was that an easy decision to make, an easy recommendation to accept? The reason I ask that is that you have technical training. And coming into Intel as an engineer, at least what I've seen in some places in Silicon Valley is a disdain by the technical for the non-technical, for marketing and sales on some level. Did you see the value in that recommendation immediately? Did it make sense to you or was there some resistance?
Yes, I seized it. There were a couple reasons for that. First of all, I love people and selling, consultative selling, and I'm not talking about flogging breakfast cereals, but solving real technical problems is a very high calling. But the second is my father, who's my hero, was also an engineer and a sales leader and an entrepreneur. So, in many ways my career choices are reflections of his choices and his great advice. One of the entrepreneurs I work with, Jeanie Chen at Nuna, reminded me, 'John, when you're backing the leader of an enterprise software company, be sure that leader loves enterprise selling because it sets the tone for the entire rest of the organization.'
That makes a whole lot of sense. And I would love to come back to the segue to venture capitalist, and I'm actually going to read a little bit from Measure What Matters, and this revisits that conversation that you had with Andy about your decision. So, I'm going to paraphrase here just for the sake of making it easy for this conversation, but Andy said, 'Come on, Doerr, don't you want to be a general manager and own a real P&L? I'll let you run Intel's software division.' End quote. So, now your commentary is it was a non-existent business, but could have been built into one. And then he added a zinger, 'John, venture capital, that's not a real job. It's like being a real estate agent.' So, of course, he knows how to push the buttons. He knows how to use the carrot and the stick. But all this begets a question for me, which is why were you so interested in venture capital? How did you become so interested?
I wasn't interested in venture capital.
What I understood was that venture capital had something to do with starting companies. And I was held that as an entrepreneur, start a company with friends, with co-founders, because that's what my dad did, and that just made sense to me. So, after I interviewed with Kleiner Perkins Caufield and Byers, which sounded to me like a law firm, they said, 'What we're looking for, Doerr, is someone with a strong technical background, an excellent network among brand name Silicon Valley companies, who has good people skills, strong technical skills — I've already covered that — and is willing to be kind of a gofer, carry business plans, read them, do whatever we need to do to be successful.' I responded, 'Well, that's fine. I would join Kleiner Perkins, but only if you promise you will back me in starting my own venture.' And they said, 'Well, sure, we have a long history of doing that. Genentech was created in our offices, Tandem Computers, so we'd love to see our younger associates write plans and go develop them.' And they stood by their promise on multiple occasions when I was fortunate enough to help others start new companies.
Let's flash forward, if we could, to an encounter that you already mentioned, and we may fill in the gaps, but I think this is also perhaps a segue into further discussion of OKRs. Could you describe your first meeting with Larry and Sergey, please?
Yeah, that was great. I just committed the largest amount of capital that our partnership had ever committed at the highest price to two Stanford computer science dropouts who had no business model, no idea how they'd make money. They were 24 years old. Perhaps you can add a rare photo that I have of them in their garage, but I was doing my gospel of Andy Grove OKR Johnny Appleseed slideshow. I literally took Andy's slides and presented them to Larry and Sergey. At the end of that talk, I asked them for feedback. I wanted to know if they were going to adopt it or not. And Larry was his usual quiet self and gave me no feedback whatsoever.
Sergey, who was more ebullient and expressive — well, I'd like you to believe that he said enthusiastically, 'John, we'll do this.' Actually, the truth isn't quite that. What he said was, 'Well, we don't have any better way to manage this company, so we'll give that a try.' Which I took as a kind of ringing endorsement. Because every quarter since then, every Googler has written her objectives and key results for the next 90 days, posted them on a public website, graded them from the period before, and shared them. And Google does this to get everybody focused and aligned, committed, tracking their progress, and most of all, Tim, stretching for amazing, audacious, nearly impossible goals. So, a good grade at Google is considered to be 70% or so. Now, at the end of a quarter, what they do is they sweep these aside because very importantly, they're not used for bonuses, they're not used for promotions. They're used for a much higher calling, which is to get a collective kind of social contract and getting everybody to want to do what must be done.
Do you recall what was on those initial slides? Was it copy and paste more or less the same thing you just described, but those slides that you presented in the garage? Do you recall the primary takeaways or—
Oh, sure. In fact, I have a set of them to this day.
If you'd want to post them on your website for your audience.
Oh, I'd definitely love to do that. So, we'll follow up and put those in the show notes.
Why did you present that to them? Was it to try to provide them with a framework for ultimately executing on a business model once they identified one? Was it for some other purpose?
It was simply so that they could achieve operating excellence, maintaining their culture as they grew faster than anyone ever had attempted before. They may not have known how they were going to make money, but they were very clear on their mission and their values. Their mission was to organize all the world's information and make it readily available everywhere. That's pretty breathtaking and ambitious and timeless and true still today. To do that while you're trying to constantly improve the product and recruit more talented people to go faster, you want to have a sturdy, reliable way to set goals, check goals, get everybody aligned around really owning and wanting to do the right thing. I'll never forget some sessions I had with Larry Page. Every quarter for a long time, for many years, he would review the individual objectives and key results for every engineer at Google. This would take him a day and a half or more per quarter. And of course, he walked the talk. He would stand up in front of all the employees, Eric, Larry, Sergey, and they'd show their individual OKRs graded as well as the OKRs for the entire organization. And here's one remarkable thing, Tim. Those goals, those OKRs, to the best of my knowledge, never leaked. It was part of the Google culture that that information, which is very business-sensitive and confidential, could be shared and kept within the organization.
That is really remarkable just to try to wrap your head around, especially as they began to scale and add such tremendous headcount. At the time, if we could peg a date to it more or less, what year was that first deck?
The first OKR session with Google was in 1999.
Okay, this is 2 years before I moved to Silicon Valley, and part of what impresses me about your career and experience is the breadth of investing that you've done. You've invested in so many different sectors, so many different types of companies. You mentioned this was the largest capital commitment that the partnership had made to date. Why did you decide that was warranted, and how did you convince the other partners that this was a good idea?
Well, it was certainly a group decision, and while I was the advocate, there were co-sponsors. It was a controversial decision, which is true, I think, of many great investment decisions. If it's obvious, then someone else will have done it before, or everyone's doing it. But this was, you'll recall, I think, about the 18th search engine, and Kleiner had invested in an earlier portal and search company called Excite, which became Excite at Home. And so, there was some coordination, I guess I'll call it, or maybe just best practices of making sure that Excite had bid to try to acquire Google in the early days. I think they offered a million dollars, which the founders wisely rejected. And Google had a stronger technology by far than Excite did. And so, the idea of an 18th search engine didn't faze me one bit. I'll never forget my first conversation with Larry Page when I asked him how big Google would be. And he told me 10 billion dollars. Remember now, this is around 1998. This is at a time when you still dialed up to get into the internet. I about fell out of my chair. I said, 'Larry, you surely you mean market cap at 10 billion.' He said, 'No, John, I mean revenues. Search today is just in the very beginning. In fact, it's a very crummy experience. I want the search system to be able to answer any question that's asked of it, and indeed to anticipate what our users want to know.' So, I'm a sucker for big ideas and big dreams. And certainly Google was one of the largest that I'd ever seen.
And was part of that just looking at the numbers they already had? Was it your engineers' assessment of the technology? I understand that Larry and Sergey, I mean, they're called the wonder twins for a reason, right? They're incredibly impressive. And there is that sort of force of intellectual horsepower and personality. But as the 18th search engine, were there just characteristics of the technology or the growth trajectory that were unlike anything that you'd seen before?
