Mutuo Stage | Bryan Schreier & Errette Dunn

I've only been in one heart for about an hour, but I've already seen such a warm welcome, and I'm really excited to be here. I want to apologize that my Spanish is terrible. I know that all of you probably speak English because it seems that all the countries outside of America do the job of learning other countries' languages, but Americans never do very well learning. So if I could just—and I'm not to repeat myself or clarify what I mean—so can we make that deal? Just give you the signal, and I'll say it again. But I'm looking forward to excellence.

Okay.

When I was trying to invest, the person that would have answered the phone or emailed me back was Sheryl Sandberg. Do you know what Sheryl Sandberg is? She's now the COO of Facebook. And so she offered me a job—not in the case of startups she said—'I'll offer you a job, and the job will change every month.' And from there, I was able to go on and bring Google to new countries. So I love international work, and my first job was moving to Europe and bringing jobs. I hired about a thousand people in Europe for Google, the first thousand or so, and then actually worked on Google Latin America and Brazil, mostly Brazil and Argentina, although I ran Google Israel too.

A second company idea. So I launched my second company idea, and after about four more minutes, they said, 'No, thank you.' And you know, my forehead—she was the first investor in Google itself—got up and he left and said, 'Don't call us, we'll call you.' Sequoia as an investor three months later.

Yeah, well, so it's interesting. I think one of the reasons I was drawn to Sequoia was because Sequoia is actually an international firm, and it's the most international of all the venture capital firms. So we have a team in China and a team in India, and we've also made some important investments in Latin America. Do you know Rappi, the delivery company? That's a Sequoia company. We have a company in Brazil called Nubank, which is going to open up in Mexico very soon. It's worth about $5 billion, so it's the biggest startup in Brazil right now, and they're going to open up here. But you know, the truth is, Eric, it is actually very difficult to get an investment from Sequoia. We meet probably about 2,000 companies per year, and we're only able to partner with about 10 or 12. So people kind of see our name and they see WhatsApp and Google, and they think that maybe we make lots and lots of investments like a hedge fund or something like that, but it's the opposite. And when we partner with a company, we're looking for the right team, the right business, the right market, on down the list. There's something that's really important to note, which comes back to this international theme I was talking about: more than half of the companies that Sequoia has partnered with are started by immigrants or people that were not born in the United States. I think it's actually over 60%. And so I think it's important to share in this audience—not that you're going to leave Mexico. What are the differences in the success rates of hardware companies versus software companies? Traditionally, hardware companies have been much more difficult, and I think it's largely because they're lower margin. So it's really hard to make a good gross margin on a chip or a camera or a computer, and it's hard to keep that going and grow to a large scale. Although I think there's been a renaissance in the hardware space recently because, just like people have been iterating on software, there's now an ecosystem that enables startups to iterate on hardware and produce products at a smaller scale. It's much easier to create a virtual hardware company. It's also easier to create a virtual consumer product company, like there are makeup companies that are doing $600 million in revenue that are three people in a back room and the rest of it is outsourced. So it's a really awesome time in the world to start a company or join a startup because really anything is possible right now. It's pretty cool—you guys know that though.

Yeah, so I think everybody's heard of YC, Y Combinator. They have a great nonprofit program, which I'm not sure if you're aware of this, but you can apply to YC just as you can apply to YC as a startup; you can apply to YC as a nonprofit. And YC is based in Silicon Valley, but I think probably about half of the companies that go through each batch come to Silicon Valley from outside the US. That's pretty interesting, and they always have part of the batch that are nonprofits. I do think for building a nonprofit or any company today, technology in the form of software is more important than ever. Five years ago, the average small business or nonprofit was paying for one piece of software, and today the average is about a dozen pieces of software that they're paying for. What that means is you can start a smaller organization and operate more efficiently using software, thanks to tools that the engineers, designers, and product managers in this room are building. I hope that helps. I'm happy to talk more about it later, but I'm glad you're here to talk about nonprofits.

Yeah, that's a good question. So if you can incorporate in the US, it does make it a lot easier to raise from US-based investors, if you want that, and it also makes it easier to take your company when you do your big IPO on the stock market, if you want to do that in the US, which is what most companies want to do. Even my Chinese companies and European companies, it's easier if you start as a C-corp early on and you incorporate in Delaware or somewhere else in the US. I hope I didn't offend anyone in the government here or in other areas, and I could be very wrong because I don't pretend to understand the environment here in terms of how you do business. But yeah, it makes it easier for folks like us to invest if you're incorporated in the US, so if we're your target, it makes it easier.