Transcript: Sudip Chakrabarti: Partner Decibel.vc Ex Partner at A16Z, Lightspeed & Madrona

Host: Hey Sudeep, welcome to the show. Thanks for taking time.

Guest: Thank you so much for having me, Natraj.

Host: Uh, so I'm super excited to have you on the conversation uh because, you know, a lot of things are happening right now. Uh, both in venture and public markets.

So it's an interesting time to talk to a uh venture investor uh during these few couple of weeks. Uh, but before getting into, you know, venture capital and investing, uh, can you talk about a little bit?

Obviously, you went to IIT KGP, which is uh one of the well known uh schools in India. Uh, I always joke around with my friends at IIT KGP that there is, you know, PayPal mafia and there is IIT mafia and then there is IIT KGP mafia.

Um, uh, which is also its own little mafia. Um, but can you talk a little bit about, you know, your early, you know, education and uh before moving into venture capital?

Guest: Yeah, by the way, uh, I think you're right on about the IIT KGP mafia. You know, like, I think I think that is the case because it is the best IIT, you know, for sure.

My other IIT campus friends will kill me uh but, you know, that is a fact. But it is the oldest and largest still I believe. So yeah, there is uh there is a very strong connection within the alumni there.

So yeah, very quickly, I actually um I grew up between Middle East and India. Uh, grew up in boarding school. Uh, so I went to boarding school when I was like nine.

Um, and then um, then as you said, I went to IIT for my college, came to US uh directly to do uh my grad school at Georgia Tech. Couple of years into my grad school, I actually dropped out to do my first startup.

So we were working on something really interesting as part of our research project. Very coincidentally my um professor at Georgia Tech and also my co-founder of that first company is actually coming over for dinner uh just tonight.

So, It's quite coincidental. But anyway, so we ended up starting a company. We ended up raising venture money. Um, after, you know, uh, a fair amount of time, we realized, you know, we were not going to hit the scale that we all had hoped for.

So we ended up selling that company to another uh private company. And then I was a product manager for some time in Silicon Valley. I went back to business school, went to Penn Wharton.

Towards the end of my business school, ended up starting another company with couple of my friends. So this one, uh fortunately, we grew to several million in ARR. Um, and then we had a couple of different uh private companies wanting to buy us.

We took one of the offers uh and it watered out actually really well. Um, because you know, it was a uh it was we did not really raise external venture money and kind of grew it by bootstrapping. So that was my second foray into entrepreneurship.

Um, and then I switched to venture investing about nine plus years ago. Uh, in that whole time, I I had been a uh, a few different forms, but what I have always done is I have only invested in enterprise infrastructure companies.

So, in the past, I have invested in companies like Heptio, which was a Kubernetes company, um, VMware bought very quickly, uh, for a pretty decent exit.

And then companies like Temporal and Serviless and XA B, which uh when we invested was a pretty small company. It's around 3 billion in market cap today in the private market.

Spot Nana, which is a travel infrastructure company also doing pretty well, fortunately.

And then um, um, I also uh used to attend the board meetings and you know, had a lot of firsthand experiences with companies like Databricks and Mesosphere and Digital Ocean in the early days.

So yeah, all my life I have only invested in enterprise infrastructure and that that's what I continue to do here at Decibel, too.

Host: So taking a step back uh once you, you know, wound down your startup, uh, what was the decision that drove you to, you know, get into venture capital? Uh,

Guest: Yeah, um, so you know, I and to this day, I still do not rule out doing another startup, just to be clear. But I think, you know, for me, venture was literally the uh other side of entrepreneurship.

Um, and I think as I was doing my company, uh especially second time, I definitely, you know, felt like there were things I was doing better because, you know, I had done it before, I could see some of the patterns.

And I think I was fairly motivated to put that into action where I was just not working with one company or working on one company, but I was working with you know, a number of early stage companies where I could potentially help, uh work with some great people and of course learn along the way.

So, the other you know, the other thing I would say is, you know, I have always been very intellectually curious and that's something I really enjoy being um working in venture capital because, I mean, every day you get educated by really smart people who are working on ideas that, you know, and definitely as some of them will change the world.

Um, so I enjoy that that part a lot too. It's sort of like I enjoy that part at the same time I can bring something of value to these people who have not been through startups before or have not seen the movie, you know, five different ways.

So I kind of enjoy those convergence of those two and I kind of see my um life in venture capital more as a lifestyle thing than as a career because I really uh like enjoy doing it 24/7.

Host: Also, um, I think the the point you talked about, you can influence or like you you get an exposure to a multiple companies, multiple ideas. I think that's the exciting part of uh being an investor in general.

Uh, So you went on to work at A16Z uh and did enterprise investing there. Um, can you talk a little bit about the dynamics of being a partner? Because I think what happens in last couple of years is uh everyone is called as a VC.

Uh, that sort of um, you know, who is it but there are obviously different incentives for different people working at VCs, right? VC firms. Um, and you have from associates to partners, to general partners.

Can you talk about your role and what did it actually meant being a partner at A16Z?

Guest: So, um, and I think there's fairly public knowledge. uh, even though everyone was called a partner at A16Z and internally also everyone was called a partner.

It wasn't like, you know, there was one version outside, one version inside, the roles were different. The roles were a lot more traditional in terms of, you know, kind of uh, associate, principal, general partner.

Um, when I worked there, and that firm has changed since then just to be clear as well. Uh, I think they have more uh gradations internally uh than they used to. When I was there, uh there was really like two kinds of roles.

One was the general partners, and then there was the uh they call them, called everyone else deal partner, but it was basically think of it as you are supporting uh one or multiple general partners.

So, uh when I was there, I was really supporting Peter 11 uh who was their enterprise infrastructure uh lead.

Uh, I was also supporting Ben a little bit, Ben Horowitz, uh and Mark Anderson on a couple of uh more deal uh specific deals, but I was largely uh Peter's uh right hand person.

Um, and in that role, you know, you basically, you know, kind of uh work on everything that a typical, you know, I would say, senior associate principal does uh or a non-partner does, which is obviously you look, you know, you basically try to find great opportunities and then you spend a lot of time evaluating those.

And then I think the other thing that was really uh cool about my role at A16Z was um uh I used to go to about a dozen board meetings as part of that role.

So, um and it just you know, kind of observing some of these companies uh firsthand um across, you know, a dozen or so different uh companies was pretty uh interesting.

So that, you know, so I used to go to the um I was not a board member, but I used to go to the board uh board meetings of Data Bricks, for example, and you kind of see how uh the success they have become, but I've also seen them in the love first, you know, three, four years and it was really interesting to take away some lessons from that.

So yeah, that is the role. Um, I would say, um, just you know, kind of forwarding a bit, um, at Decibel, for example, and I'm happy to give you a quick intro of what we do. We are really trying to build a real partner only form.

Um, and there are, you know, we are not the only one. There is obviously an example of Benchmark doing it very successfully.

Um, the reason we are building a partner only form, which kind of touches on your question a little bit is we feel like, you know, uh, if you take any venture uh investor's job, there is and broadly define, there are two parts, right?

One is like you find and evaluate great companies, make your make your investment decision. And then the second part is post investment, you help them, right?

So, we feel like on both sides, if you delegate too much, um, you kind of either shortchange yourself or shortchange the portfolio company after investment.

So we tend to believe in this model and I'm not saying that's the only model uh that works, but we tend to believe in this model where uh a part as a partner, you are responsible for the end-to-end investment decision, which means not only finding great companies but, you know, really evaluating uh it thoroughly and not delegating it to another junior uh person.

So, you are just you know, building your conviction and so much better and so much deeper.

So once you decide to invest, similarly, you bring that strong conviction to the table and then you you are much better suited to help them because you are really the person, you know, um, that uh is responsible for the company's success.

So we believe in that model at Decibel. Um, but again, you know, that I mean, if we grow too big, you know, that may or may not scale, but we are not there yet.

Host: So I mean, I think that also brings up this interesting question, right?

Where in last two years we've seen a lot of firms go really big and hire a lot of people and even the fund sizes have grown, I don't know, 5x or 3x uh, you know, the usual. I think Benchmark is probably an exception.

They've kept their new fund size lower than uh you know what other funds have been doing. I think probably A16Z uh was almost on running on all cylinders in all sectors, right? Um, how do you see?

I mean, this is probably generally directed towards the ecosystem itself.

Like because I think 10 years or five years back the funds were small, you had like 10 partners, I mean different uh either GPs or uh, you know, other roles and, you know, you are just focused on one particular thesis and you're picking companies and that used to be the case and I think I've heard Mark talk about somewhere about, you know, almost planning A16Z as like, you know, CAA uh the Hollywood agency company.

Um, and sort of bringing in all sorts of things into the venture company and it's a different way of I think building a VC company all together. Um, how do you see um, you know, where we're going in terms of just um the structure of a VC form?

Guest: Yeah, that's that's a great question and it's frankly, it's something we at Decibel think a lot about.

Um, so I think, you know, what's uh, I mean you you know this very well, when the venture industry started, it was much more of an artisanal kind of industry where, you know, you would really work with a specific partner, you had a specific form who would help you with all aspects of business.

I think over the years and particularly over the last, I would say five, six, seven years, virtually pretty much, you know, since I started in venture, you know, it has only uh gotten that way where there has been a clear divergence between two groups of forms.

So today you probably will see there is a large group of forms what I would call are company scalers. So these are the, you know, kind of forms that write, you know, that raise large funds, they also write large checks as a result.

And I think their best value is once you have reached some kind of scale as a founder to take their money and to take their resources and you know, go from there. So these tend to be the company scalers.

We also see a second group, you know, kind of again going back to the roots of the venture industry which are uh what I would call company builders. Um, so company scalar VCs and company builder VC.

So company builder VCs tend to be a lot more specialized, they tend to obviously invest in early stage and they tend to be very uh focused on every company they invest in because they're trying to get that company from inception to product market feed or early stages of scale.

And I think that divergence will stay uh for quite some time uh because it just the need, you know, uh in the market need that drives it. I have been a technical founder twice and I only worked with technical founders.

I can give it to you in writing that throwing in a ton of money uh at a technical founder or founding team in the earliest stages is not going to solve a single problem they have.

You know, yeah, they might buy a very expensive cappuccino machine, that's about it. You know, but it's not the um money is not going to solve their problem.

What is really going to solve their problem is how do you help them, you know, kind of navigate the path to product market fit. So that's why you are seeing the uh seeing this divergence um in the venture industry.

Naturally, they it's a smaller group on the company uh building side because the fund sizes are smaller, you know, you need to be very specialized.

Um, and you know, I'll put in a little bit of a uh shout out to our firm at Decibel because we are all in on the specialist uh company builder strategy.

So, I mean, we are, obviously we are bringing in capital, but if the reason people work with us is we are bringing in specialist expertise, but also we are bringing in specialized founder services.

And this is something, I would say, you see, you know, some other firms do it too, but when you do it in a very specialized way, it becomes a lot more compelling.

Uh, the last thing I would say, you know, uh, you to really be successful on the company building side, you cannot, you know, keep raising large funds and be able to really impact force. right?

I I see that group staying, you know, nimble and smaller and yeah, Benchmark is of course the leading example of that.

Host: I think also uh what do you think about then I think there's another category of investors which are like crossover funds like Coto or Tiger? Like what is their role going to be uh looking forward?

Guest: Yeah, so you know, I I I put them in the company scalar side but towards the tail end or um uh a kind of end of the spectrum on that.

Look, I mean, they um, yeah, someone like Tiger, yeah, they actually uh feel a market need um that obviously existed which is, you know, they they are really great at, you know, funding companies that have figured it out, that have the team, all they need is the capital and they need it at, you know, in a way that is less frictionful and so on.

So I think that part of the market certainly will exist and will be catered by, you know, those firms. I think it is a little bit of a question, particularly given the market turbulence that we all are seeing, uh how active that market will stay.

I think, you know, I mean, this happens in every cycle when there is money is plentiful, you know, and things are easy, like, you know, fundraising is easy, uh and so on, I think discipline sometimes, you know, can be a bit, you know, lacks.

So I think, you know, and I see around, you know, a lot of companies um around in us, you know, my friends, networks and so on.

I would say a number of companies in the last couple of years have raised money from the Tigers and Coto of the world at valuations and at sizes that are probably a couple of notches, you know, uh ahead of what the business was.

So I think, you know, going forward uh you will see less of that, but still that market need exists actually. uh it does.

Host: I think uh, I think what happened was, I think the price matters, sort of like that went away for a while there in last 12 to 18 months.

The entry price matters and it also played into this notion that the markets are much, you know, much larger than what we thought based on our exit scenarios that we've seen.

But when the market caps go down in public markets, then that sort of thought is now challenged that, you know, not all market caps or not all markets are as huge. They're still huge, but not as huge as you know what we thought.

Guest: I I couldn't agree more. Um, I would add one thing which is, I think we all can buy into the fact that, you know, software as a sector, um, as a market is only going to grow larger.

I mean, that is independent of any short-term turbulence in the public market. It just, you know, we all see that every business now is a software business, every company is driving digital transformation in some ways.

So again, these are big words, but you kind of sense that, you know, like the need to buy software is only going to grow. So, yes, I think the market, you know, um sizes are going to go uh going to go even uh bigger. That's for sure.

But at the same time, you know, I think, you know, investing at the end of the day is about building great companies, but also like, you know, uh being disciplined about your uh like you said entry valuation because at the end of the day, people who give us money, who trust us with with their money, our our investors, we need to show them returns, right?

So, I think, you know, that discipline in time you have some, you know, lacks uh or you know, kind of like atical, you know, attitude in that discipline, it will come back to bite you, particularly when the markets turn on you.

So I think in the last two years that has happened a lot, I think you will see some tightening of the belts there.

But overall, I think, you know, it just it just makes sense that there will be a lot more venture funded companies uh company number of companies in software than there was 10 years ago. It just, you know, kind of the natural thing to do.

Host: I think in that sentence, the point I would like to highlight or the word I would like to highlight is software. I think we also sort of tend to deviate in thought, every venture investment is a software investment, it's not.

Like we also have this now a bucket of investment which is not really pure software investors. So there are software enabled business. like enterprise software, I would say is almost like the pure form of software investing you could get to.

Um, but and that's the almost like the return profile you're looking at very well fits with software uh, because you're looking at 100x or you're making a fund work at a 100x exit. Uh so that kind of non-linearity doesn't exist in all businesses.

Uh so I think we almost uh lost a little way in terms of like considering every investment uh as a venture returnable investment. I think that also has been happening more that hey any startup is not non-linear, right?

Because just we're calling it a startup, it doesn't necessarily mean that it will give a non-linear return. There no non-linear outcomes or factors that are generating a non-linearity in this.

Guest: No, you're you're 100% right. I cannot disagree with that. I mean, the venture model really works well when uh the return on every additional dollar turns to an exponential curve, right? So that's when the venture model really works.

In the early days, you're obviously incurring all the cost of product development and then, once you hit that product market fit, once you hit that scale, it should, you know, kind of become like an sort of an exponential or non-linear curve, right?

So yeah, you're absolutely right and I think, you know, my lens um is enterprise software. So that's the what I live in and I'm very bullish about that overall market expanding. Um, not withstanding some, you know, turbulence in near term.

Host: So from A16Z, you went to work at Madrona, which is obviously based in Seattle and pretty iconic. I think they were also investors in in Amazon, I believe. Uh, so what was your experience working there? Tell me a little bit about, you know, working at Madrona?

Guest: Um, it's a great form, um, and I think even more importantly, it's a great group of people.

Um, so I think Madrona and it started as a Seattle form, but I think, you know, uh what is really interesting about, you know, what they have is like, and you probably know this living in Seattle, like Seattle is, you know, really uh if it doesn't happen, you know, there's something wrong uh for sure, but it should be kind of the, you know, next, you know, uh massive tech ecosystem given the talent that is there now, that has moved in over the last, you know, decade, right?

Thanks to, you know, obviously Amazon, Microsoft, but also all the companies, other companies that are now either headquarter there or, you know, have the their largest engineering office there.

I think the strength of is kind of the network and connections they have into all of that ecosystem. So yeah, I mean, I um um, I actually uh had a really fun time at for a whole host of reasons, but particularly for the people.

Um, and I also had a lot of fun, you know, kind of uh connecting or kind of introducing to some of the what I would call younger up and comer uh founder types in Seattle.

Um, because I think, you know, like as I kind of uh I mean, I my family is originally from Seattle, so I have a lot of family connections, but once I started really uh being in Seattle professionally, one thing I realized was how many engineers were probably like, you know, in mid-20s to mid-30s, you know, like, you know, kind of in that demographic who, you know, might be working for Amazon, might be working for, you know, Tableau or whatever, but are thinking about starting a company.

And for Madrona, like I kind of drove that, which is like making those connections with, you know, those kind of folks. So yeah, I mean I I just you know, like in a as a team, as a firm, it was just an amazing experience.

Um, and you probably would ask this question anyway, so let me just preempt it. I still cannot believe I left Madrona, honestly. uh, or you know, um, because I I had so much fun.

But uh uh I can tell you why I went Decibel, you know, in a in a sentence, but it's basically like sometimes you leave your Amazon job to start a company because you just have that entrepreneurial itch.

So that that's really what brought me to Decibel.

Host: So yeah, tell me more about, you know, uh what Decibel is doing and, you know, uh what is your thesis behind starting Decibel uh and more about it?

Guest: Yeah, so Decibel is an early stage venture fund. um, we do seed and series A's, but we are highly specialized. We only invest in enterprise infrastructure companies.

Um, and the whole idea of Decibel is, we we basically invest in technical founders that are building technical products that are being sold to technical users and customers. So think of us as, you know, investing in the technical stack.

So we are not the consumer software investor, we are not the Fintech investor, but we are, you know, investors in modern engineering tools and dev tools and cloud native infrastructure, machine learning ops and data infrastructure and so on.

And we have a very strong focus on uh what I would also call uh community led companies, community community led businesses. So think open source, think bottom-up adoption, those kind of businesses.

Because that's what uh what that's what is happening in our world in the enterprise infrastructure.

People do not I mean people are mostly moving to a model where they are they use a product, they get value out of the product before they even decide to buy the product. So that's kind of a strong thesis at Decibel.

Now, what we are trying to build is basically the form that we wish we had when we were technical founders. So at Decibel, you know, we have three investment partners and two operating partners.

We all have been technical founders and we kind of saw this need also working with technical founders where there is a pattern of need in terms of the help the, you know, a technical founder needs in the early stages.

It is not so much, you know, building the company, sorry, building the product or building the technology. It is, you know, how do you position about position the product? How do you talk about the product?

How do you think about who is getting benefits and how do you amplify those? How do you find the first, you know, 10, 20 early adopters? How do you really recruit the first 20 engineers?

So at Decibel, we are actually building all those founder services uh very uh deliberately. So we actually hired the former CMO of Twilio to help our technical founders with product positioning, product narrative, product marketing.

We hired a phenomenal BD uh partner to help our companies find the first, you know, 30, 40, 50 customers. Like, you know, year we are making 50 to 100 introductions uh for those companies to find their early adopters.

We are bringing on a recruiting partner to help hire engineers, not C level but help hire engineers.

But we are doing all of that you know, very specialized manner only for enterprise infra uh because we believe that that that that really, you know, builds great companies.

So yeah, I mean um, it's a I mean in terms of fund size, you know, if anyone is interested, it's uh uh our first fund was 225, our second fund, which is brand new is 275.

Um, and then, you know, founders partner with us not because of our check sizes, it is because of the health we bring to the table. And it goes back to your earlier point about, you know, where we sit um in the VC spectrum.

We are firmly, firmly in the company building specialist uh end of the spectrum.

Host: So obviously you have um you've seen a lot of enterprise software companies, uh, where do you see uh opportunities right now?

Because, you know, in databases or in infrastructure or you know, uh we've seen from VMware to the Kubernetes uh evolution, we've seen SQL to no SQL uh evolution. Uh we've seen, you know, uh code as an infrastructure with companies like Hashicorp.

Um, where do you see uh you know, the next generation, you know, technical companies in either enterprise software or you know cloud infrastructure or even if you think developers as a customer.

Like where are you seeing most of the, you know, gaps and products come from?

Guest: I mean it's a it's a obviously a long conversation and you know, we certainly have, you know, deep convictions in some areas more than others. I'll give you maybe you know, couple of maybe one example to begin with.

We actually uh very strongly believe that the number of developers and you know, it's a belief I think, you know, most people believe it, the number of developers or at least the number of people who code uh is only going to grow.

So, if you really look at how application development is today, it is a very specialist job still. And particularly with, you know, building scalable applications, like distributed applications, it is a very specialist job.

You mentioned Kubernetes, you mentioned in a containers, Docker. I mean, think about all the various pieces that you need to put together before a developer can write a single line of business logic.

So, today every company has to invest in platform engineering team just to pull all of those things together. Doesn't matter where where your infrastructure is running, Amazon or GCP or Azure or somewhere else. It doesn't matter.

You still have to do all of that work.

Um, so we feel that, you know, there has to be better development platforms that kind of abstracts away all of it or most of it so that the developer who is coming along uh coming through the door, you can focus on writing the business logic and not focus on putting together all the database interfaces and the CICDs and the logging and the monitoring and thoselity.

So we are actually uh pretty uh focused on that um essentially how do you make back end application development seamless and friction less. There is a very good example of a company uh doing that on the front end uh called Vercel.

Um, is there a play like that for the back end application development? So that's like a strong thesis you know we are kind of focused on.

Um, and then I think, you know, there are like so many others uh I'm trying I mean I'll pick, you know, maybe one more example.

So which is like, you know, we we have been you know, going at it for quite some time, but we still feel like the whole notion of data infrastructure is still not solved and it is still like, you know, you see so many companies, so many projects going at it.

It still feels like we are stuck in the pre- uh Cble, pre-Oracle days of databases when it comes to data infrastructure.

Everyone that is putting together infrastructure has to put together the different pieces, you know, stitch them together, run them at scale, monitor them. All of that, manage that.

So, we haven't made a bet, but it's sort of like if there was a magical database data uh sorry, data infrastructure solution out there that could abstract away all of that uh and kind of, you know, take away all the pain of data engineering that the data engineering teams go through, I think that will be a pretty uh substantial opportunity.

So again, that's something we haven't invested in yet, but you know, it continues to be a very strong thesis for us. Because again, like we tie all of these things to macro trend.

The first one I mentioned is tied to the trend that the number of developers is only going to grow, but the sophistication of that expanding developer base is going to go down. So you need something there.

Similarly, on the data infrastructure side, the amount and volume and you know, velocity and you know, variety of data is only going to grow. So you need something to really you know, scale with that. So again, these are like two examples of ideas.

Host: Yeah, I I really love the idea of uh serving developers uh and looking at it that lens uh because I think the value you can generate if you're serving developers because there are so few of them uh I mean in terms of uh not absolute numbers but at least on percentage wise.

Uh you can really create in very interesting companies. One company I can think of is like Educative, which is also like Seattle based company.

Guest: Fahim's Fahim's company, yeah.

Host: Yes, yeah.

Uh and they did a really interesting job of, you know, solving the career problem and learning problem for developers which which is sort of like all out there uh, you know, on the internet but the piece it together so well uh that it makes it very compelling product for developers to use it.

Uh and for them the return on investment of even and that's not a cheap subscription also.

Like it's in a absolute terms, it's a pretty costly subscription, but the return on investment a developer gets out of that platform is way higher than you know what he is uh you know, investing into it.

Uh so that's one good example and I think one of the points that you also mentioned I think is about abstraction. I think we've always continuously been evolving to abstract away things uh in technology.

I think cloud is a great example for that we're just abstracting and uh it's abstracting and then if one person solves a problem well, everyone should be able to access it.

I think that has always been sort of like the underlying philosophy of technology is to like once we have solved then I I should just have a library or a technology out there that everybody can access it.

So, in a lot of ways all of these companies that are are essentially running a scalable service, which ideally should be in some form, you know, be out there ready to go uh at least you know, you can categorize these things.

We have done that in some areas, but in most of the areas we haven't done that, right? Um, so we have like five streaming services, why shouldn't we have like a one click service where we where we can start a decent streaming service?

I I'm not even asking a Netflix scale uh, you know, streaming service. Like why can't I just start a streaming service which does the basic stuff? uh, right?

Guest: 100% and I think you know, abstraction is a key macro trend. And then I think you know, the other thing is, you look into any large company today, and a large tech company, right?

I mean, you take your favorite company, right, Microsoft or Google or Amazon, I mean or Facebook. I mean, you look into them and you see like the investment they have made in kind of uh internally abstracting away some of those paint.

Like when you walk into Microsoft, I'm sure you're not going and tinkering with the you know, lowest details uh of a platform, you know, um, or whatever development platform you guys are using, right? So you see that and they have invested heavily.

Now, there is a mass market that will never be able to invest that kind of resources, right?

So how do you build something that is still functionally useful and valuable to that mass market, but they don't have to take the pain of building something like that, not only building, but running it at scale uh like that in a on a daily basis.

So I think that's a thesis that applies to so many different areas of our enterprise in a investment um that you know, it just you know, it's a common thread across a lot of a lot of our things.

Host: So you've also seen you know good number of acquisitions both as an investor and obviously one a couple with your being a founder. what do you see the common threads why do investment sorry acquisitions happen?

Uh, and what are the reasons the company that is acquiring is really looking for and sort of uh what can, you know, founders do in terms of setting up themselves for acquisitions.

I mean, I know it's obviously not your you can't really predict these outcomes, but what do you see some of the things, you know, the true line across all these uh, you know, experiences that would say, hey, these are some of the things that worked out well versus, you know, uh, that didn't?

Guest: So I would say acquisitions come in two categories, right? You are being bought and then you're being sold, right? And I've been part of both kinds.

So when you are being bought, it means somebody or multiple parties are so interested in what you are building uh both in terms of product as well as business and team that they are coming to you uh in many cases unsolicited and trying to buy you out.

So, would be a really good example. I mean, right in Seattle, right? So, you know, it was started by the two founder, two creators of uh Kubernetes, um Craig and Joe. And then, you know, they ended up building a fantastic team, fantastic product.

They were early on the business traction side but then they actually uh had uh signed the term sheet for their next race when VMware came knocking. So that was a company that you know, it's a very good example of that was bought.

And I would say, the founders and the investors, you know, all would like the, you know, still you would have some thoughts about what if uh if we hadn't sold and kept going, right?

So there are you know, companies of that ilk uh which are great acquisitions, you know, could work out really well and so on. And then on the other hand, there are

---