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What makes Sequoia Capital successful? “Target big markets”

Don Valentine, who founded Sequoia Capital, talks about what makes Sequoia Capital effective. It’s one of my favorite talks, and I find myself watching and re-watching it from time to time, and I’d encourage everyone to hear the wisdom themselves.

Markets, not team
In the beginning of the video, Don Valentine asks, why is Sequoia successful? He says that most VCs talk about how they finance the best and the brightest, but Sequoia focuses instead on the size of the market, the dynamics of the market, and the nature of the competition.

This is, of course, super interesting because in many ways it’s contrarian to the typical response that investing is all about “team.”

Creating markets versus exploiting markets
Another choice quote: “We’re never interested in creating markets – it’s too expensive. We’re interested in exploiting markets early.”

In consumer internet, when the divisions that separate product categories are so fuzzy, it can be hard to understand when you’re creating a market versus when you’re attacking an existing one. My rule of thumb is that:

If people know how to search for products in your category then you are in an existing market.

I’ve written more about this in posts here and here

Watch the video of Don Valentine of Sequoia capital on “Target Big Markets” on YouTube or in the embed below:

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