♪ emily: it is the iconic venture capital firm. kleiner perkins caufield byers made its name investing in google, amazon, and genentech, but many begin to wonder if the glory days for this company are over. then, the firm was rocked by the most closely looked at trial in the industry. revealing intimate details about why ellen pao sued the firm for gender discrimination. sparking debate about equality for women in business worldwide. joining me today, general partners john doerr and beth seidenberg. thank you for doing this. it is great to have you here.

you have been quiet for a long time, quiet through the trial. why are you here? john: nobody likes litigation. we are human. this trial was painful. at the end of the day, six women and six men heard five weeks of testimony. they deliberated for 1.5 days. they found decisively on the facts that this company did not discriminate or retaliate and that ellen's claims had no merit. we know there was a second trial going on in the court of public opinion and on this topic of diversity it found against the technology industry and we in the venture industry. we get that. emily: so you feel like you lost in the court of public opinion? john: i'm sorry it was so hard to go through this, but more than anything else, i am sorry that it's hard for eventual --

venture capital and for minorities in the tech industry. this is very personal. i have two daughters. getting to a 50-50 world is super important. emily: you have been a kleiner perkins for 35 years. how did you feel when ellen sued you? john: disappointed and betrayed. i read her suit and the world she described was not what we stand for. emily: this has been going on for three years, what is it like behind the scenes? beth: it has been hard, but we have been focused on business and on our results. emily: ellen pao says that she was repeatedly excluded from meetings and dinners and e-mails, and repeatedly brought her concerns to management and asked for better hr policies to deal with issues and those requests fell on deaf ears. how do you answer that? beth: that has not been my experience, but emily, i know as a woman that i have often been the only woman on the leadership team, the only woman to this day

on many of my boards. so it is hard, which is why we are excited about some of the initiatives and things we are doing to try to improve the situation. emily: ms. sandberg said that she saw herself in ellen pao. many women have sent the same thing in the technology industry. sue decker said that many of the behaviors raised in this trial have been thing she has personally witnessed that often happens in incremental steps. they seem so small in isolation that it seems silly to complain about so we move on. in aggregate, with the perspective of hindsight, they are real. how do you respond to the idea that while this may not be discrimination according to the letter of the law, small repeated slights can have a real impact on someone. beth: there is no question, all of us women saw ourselves in this situation. we are often the minority. emily: but do you understand how

a lot of these things can be small things in isolation, but altogether they are a big deal. john: yes, i understand that. we understand that. we all possess biases, hidden biases. it is important to be aware of those and mitigate them, act on them. so you can get the best out of all of your people and make decisions. emily: the irony is that this firm has had women top partners for a long time. there are many top firms who have none. is there a fundamental problem in the vc industry? john: sure. it is pathetic. 6% of venture capitalists are female. emily: it is a pipeline thing? are people not looking hard enough? john: they are not looking hard enough. if you want to hire outstanding women, you go out and find them. we looked long and hard.

it was a concerted campaign. i hired mary not because she is a woman but because she is the best at what she does. as is dr. beth seidenberg. emily: this idea that you have to be a founder or ceo, is that closing the door on good candidates? john: yes. emily: john, ellen is someone you personally brought in. she was your chief of staff, you were her mentor. how did you feel when you found out she was suing you? john: i was sick. it was painful. ellen was a good chief of staff. but when i read the charges, i i knew that these had no merit. emily: how aware were you of this situation, when this happened how aware where you , that she was not happy? john: i'd rather not get into the past. ellen did some good things. i wish her well. emily: she is now the ceo of

reddit. she is making bold moves. was she really not senior partner material? john: it is important to look at the difference between being an operator and an investor, i think that she can be a good ceo. i hope that she is. but to be a successful investing partner is a different job. emily: have you talked to her? john: only briefly in the trial. emily: what did you guys say? john: i said hello and how is your family? she said ok. that is it. i have not spoken with her since. emily: why didn't you try harder to settle? john: i always believed it should be settled outside the courts. it just wasn't possible. emily: she is proceeding with an appeal, she is asking for $2.7 million to walk away. why not just pay her and be done with it? john: if it were that easy, it would have been done. i will just tell you. it is not possible.

beth: we have tried. emily: how hard did you try? beth: very hard. john: the details are not what matters. what matters is we have tried really hard and it is not possible at this time. emily: do you feel if you pay her $2.7 million it is an admission of guilt? john: i'm sorry this happened to ellen and to us. it happened to the tech industry. this is not a question of guilt. this is a civil case, the question is liability. emily: is it an admission of liability? john: the jury found that we are not liable after 5.5 weeks of testimony. emily, i'm sad that anyone has a bad experience at our firm. ellen did. but we are moving forward and we know there is more we can do. emily: what is it like being a female partner at kleiner and being a female venture capitalist? beth: being a female partner at kleiner has been the best work environment of my career.

that is because i'm surrounded by great women and great partners. emily: other women have left kleiner. does this alarm you? john: over the history of the firm, more than 30 junior partners have come to work for us and then moved on. emily: do you worry that this could be a difficult place for diverse candidates to succeed? john: i'm always interested in having it be a place where the best people can be in the best place to work. emily: how do you talk to your daughters about this? john: i talked to them at the dinner table. my daughter came to court. they are very smart. emily: why not have hr? john: we are a strong -- small firm. we hired experts, we put in place policies. beth: we have somebody that comes in as a consultant. emily: you feel like you made mistakes? john: i don't run the firm, i have always had partners to run

it with me. i am one of six general partners. do we make mistakes, sure. we learn from them and try not to make the same mistakes again. emily: do you feel you have made mistakes in regard to ellen pao? john: it was an error to promote her to investment partner. that's didn't work out for her. she was a really good chief of staff but not a good investor. , emily: you don't think she should have been made an investor? john: she should have been given a shot, which we did but it did , not work out. emily: do you think you made mistakes when it came to listening to her complaint? john: no. emily: beth, do you feel that there were mistakes in how the firm was run? beth: no, we are really looking forward. emily: are you doing anything differently now? john: sure, because of what has happened. we are doubling down on diversity and taking the firm

through unconscious bias training. i have been through it myself and we will take it to the portfolio companies where we serve on the board. the second thing we are doing, we are publishing a diversity report. you can judge us not by our rhetoric but by our results. beth: the third thing we are improving the pipeline. we have a fellows program that brings in top students from universities around the country and we are focused on diversity there. emily: do you worry about how this affects your reputation and image? john: the results of the partnership are some of the best we have ever seen. emily, in the last 24 months, we have generated $4 billion in returns, we had the most exits of any firm. 13 such exits. we had huge winners like nest. which we helped incubate. second largest acquisition by google. we are really doing well. emily: what do you see out there

that could be the next google? ♪

emily: you guys made a shakeup a couple of years ago, two dozen junior partners, only five were promoted and 19 were fired. we're told to get an operating role at a company. you now have a partnership with six general partners and you guys are equals. how is this going and how strong is the partnership today? john: it is firing on all cylinders, better than i ever remember. emily: john you have been there for 35 years, this firm was one that got in early. it seems you are making later stage investments, is that of the fundamental shift in strategy? john: it is a strategic thing. early-stage venture capital from incubation's to startups is the bread and butter of our business, but companies stay private longer than ever before

and they raise more capital, and we believe that if you are smart, if you are careful about the choices you make, you can earn six times on your money on twitter, or 11 times your money on lending club, while helping those great companies. we want to find a amazing entrepreneurs and go with them on the journey. emily: there is a growing concerns about valuations of nonpublic tech companies, all of these unicorns, do you think these valuations are getting ahead of startups and their ability to grow? john: we are in a rare time of normalcy. good companies can go public and bad ones can't. in the private market, there is pockets of valuations that are too high, and some too low. emily: no bubble, the sky is not falling. john: this is a boom, not a bubble. it is a long boom. that is because of the effect that these devices have had. we have 2.5 billion people carrying them around. another billion to come. an entrepreneur can create a new

product or service and in a week have a billion people using it. that is different. emily: what is also different is the amount of capital flowing into silicon valley. private equity firms, hedge funds, people like carl icahn. what do you make of that trend, is it creating more competition for you? beth: it is incredibly competitive out there. we have to wake up every morning and compete to win and work with the best entrepreneurs. john: never been a better time than now to create a company. emily: is it great for investors? john: if the markets were not growing, it would be bad for investors. but that is not the case. we are in the midst of opportunity. emily: so other investors have been a bit more about doomsday about the scenario going on,

saying that there are startups out there that are burning cash, burn rates are too high. beth: the cycle of success and failure goes on all the time. we will see the same thing here. if a company is at too high of a valuation and that they are raising too much money, that will not last. john: companies will fail, you can only lose one time your money. if you invent a new service or kind of product, that makes the world better. emily: john, you put bets on google and amazon early, what do you see out there that could be the next google or amazon? john: there are three areas, one of them is a revolution in education. education is one of the largest parts of our economy and it is well positioned for improvement. emily: but there haven't been many multibillion education companies. john: but there will be.

second, on demand services. yes, we are investors in uber. if you look at doordash, other or ship devices, they are a remote control for the world. you can summon services and you can take friction out of all kinds of everyday activities. emily: that is interesting, another investor just told me he did not invest in those kinds of companies, because he thinks uber will do that. john: i spoke with travis before we made those investments, and i got a different sense. i am not here to tell you what their strategy is we were thoughtful about that. but the third area is explosive, what happens with these devices in emerging markets. the next billion cell phone users will come from india and china. the idea that information is in this phone, that is an old idea. it belongs in the cloud, like a

cloud-based white pages or yellow pages. we backed entrepreneurs out of stockholm and they have over 1.5 billion phone numbers in the cloud. this is a good idea. emily: kleiner made a bet on cleantech that did not pan out. how much do you worry about making that mistake or missing the next google or amazon. john: i don't want to make mistakes, but most importantly, i do not want to repeat mistakes. our partners have said that they want us to pioneer new areas and explore disruptive changes. an example of one i am excited about is augmented, not virtual, but augmented reality. hopefully some time later this year hopefully you will be able to put on a set of magic glasses. emily: facebook has made bets on virtual reality, why do you say augmented versus virtual-reality? do you think that was a good bet

for facebook? john: facebook is a great company, but the idea that you will block out everything to get your experience of the world is one approach. the larger one is to see anything overlaid on the world that you are in. emily: i saw you wearing google glass when it debuted, it hasn't really worked out. what can the next generation of google glass do to be better? how optimistic are you about wearing this thing all day long? john: it won't look like that thing. it gets better and better. apple watches will get better and better. emily: do you have one? john: i do, it is a fun thing. look at the stuff at apple, this is the first company to $1 trillion in market cap. ♪

emily: of the four major platforms, google amazon, facebook, and apple, are they

going to be the four major platforms 10 years from now? john: conventional wisdom, probably not. but the truth of the matter is that these are four amazing companies with talented people who have proven propositions to consumers that i think are durable and will last for more than a decade. if you look at the stuff at apple probably the first company , to $1 trillion in market cap. emily: what about an apple car? john: i think it is a great idea. i had a lot of conversations with steve. i wanted him to build a car. one of the wonderful qualities of steve is he was incredibly focused. he was really good at saying no. emily: at the time he said we are not ready? john: yes. emily: did he talk to him about tv? what did he say? john: he said he thought he had cracked the code on apple tv. emily: you think he did? john: yes. emily: what are we waiting for?

john: maybe deals with the media companies. emily: as i understand it he was in talks to merge. venture firms don't merge. they are partnerships. we are always talking to people we think are great about whether or not they would fit on our team. emily: what happened with thomas? did he really want to be ceo? john: if he did, it wouldn't really work. partnerships don't have ceos. beth: we are looking for people all the time. we are recruiting on an ongoing basis. john: i want to be clear. he is brilliant. we co-invest with his team. emily: i've heard whispers that you are actively talking to other funds about, maybe the word is not merging but working closely. john: partners leave partnerships and join new partnerships. beth: we are talking to people. individuals. hopefully we will add another partner by the end of the year.

emily: secession in vc firms has historically been difficult. what is the succession plan at kleiner? john: at any given time, we have been unusual in that we have multiple generations of partners and we have been diverse in age, gender, and ethnicity. we are on our fourth generation transition in 40 years. i am confident we will do it successfully. emily: how long do you plan to stay at the firm? john: i have no present plans to leave. emily: but this is your baby. john: that may be a public perception, but that is not the reality, this is a partnership. emily: where do you see this firm in the next 10 years? john: a top three venture capital firm that is pioneering breakthrough, risky fields like augmented reality. that is even more diverse than we are today. backing the world's best entrepreneurs. emily: thank you both so much for joining us. it has been really great to have

you. john: emily, thank you. ♪

♪ emily: he has been dubbed the "venture cowboy," not just for his signature shirts, but also for his grassroots way of doing things. along with bets on uber and instagram, he also wrote a check to buy twitter. he amassed so many outside shares, he was the biggest outside investor by the time of the ipo. he recently made news by outlining his vision for the future of twitter, addressing the possibility that twitter sell to a bigger company like google or facebook. i sat down with billionaire lowercase capital's chris sacca just days before twitter's ceo