Michael Moritz - Lessons From 40 Years of Investing and Writing

Michael Moritz · Sequoia HeritageBullish

Xiaomi's cars now exceed Porsche quality, showing Chinese founders' imperial ambitions beyond their first product.

Moritz argues that Chinese founders often have imperial ambitions and expand from one company into much larger businesses. Xiaomi is his example. It started in 2010 as a phone maker, an Android licensee, and it now makes cars that he says exceed Porsches on quality, performance and other attributes. He presents this as evidence of how far Chinese companies can scale beyond their origins.

“the creators of one company have really imperial ambitions. And the creator of a company is along the way... look at Xiaomi, the manufacturers, these cars today that exceed the quality and performance and other attributes of Porsches, but began in 2010 as a phone maker”at 57:00

Michael Moritz · Sequoia Heritage

Economic distress lets authoritarian leaders stoke despair, driving far-right gains in the US and Europe.

Moritz argues that far-right governments have risen in the US, UK, France and other European countries. His mechanism is that in times of economic distress, tens of millions of people feel left behind, and that despair can be exploited by leaders with authoritarian impulses. He cites the recent far-right result in a German state election as an example. The argument is a general political view with a causal mechanism, not a market call.

“I think in times of economic distress, where you have millions of people... who feel they've been left behind. That feeling of despair can easily be whipped up into a horrendous stew by leaders with authoritarian impulses.”at 12:48

Michael Moritz · Sequoia Heritage

Early-stage venture is much harder today than when Moritz started; the ecosystem is healthy for founders.

Moritz says he doesn't think he would flourish in today's venture business because it has become much more difficult. The advantages of the 1980s and 1990s have dissipated over the past 15 or 16 years. The first is information: before the internet, you only knew what was happening if you were close to things, but now everyone has roughly the same information. The second is crowding: there are far more investors of every type, from two- or three-person firms to huge mutual funds, so the early private market is very different. Individuals can no longer build close relationships with founders because there are too many intermediaries. His own advantages, being placed in the middle of the action and luck, don't carry over. He still thinks the ecosystem is healthy if you are a founder.

“I don't know that I would flourish in today's venture business, it's for a whole variety of reasons.”at 45:00

Michael Moritz · Sequoia Heritage

Doomsday AI scenarios are probably overblown, since past predicted apocalypses such as nuclear war did not happen.

Moritz says he is more hopeful than most about AI and does not want to diminish the possible dark side. He takes comfort from history: Armageddon was predicted when the first nuclear bomb was detonated, and close to a century later it has not happened. He also cites 1970s predictions that genetic science would produce legions of engineered humans, which also did not occur. He draws on these past failed predictions to argue that catastrophic AI forecasts deserve skepticism.

“I do take some solace in the fact that Armageddon was predicted or a form of Armageddon was predicted when the first nuclear bomb was exploded.”at 59:32

Michael Moritz · Sequoia Heritage

AI will cause big job-sector disruption but create more jobs than it destroys, as past technologies did.

Moritz is certain AI will cause enormous disruption in particular job sectors, but he expects it to create more jobs than it eliminates. His evidence is historical: over the last two or three centuries, no major technology has led to lower employment in the long term. Depressions and sector-level disruptions happened, but overall employment grew. He expects many new job categories that cannot be named today, and he acknowledges that 'this time is different' is a common claim he rejects.

“even though I'm absolutely certain that there's gonna be enormous disruption in particular job sectors caused by AI, I think that it's gonna create more jobs than are gonna be lost.”at 1:00:04