emily: it is behind some of the biggest successes in text -- tech history. valley,nding in silicon greylock has backed hit after hit. they have backed 170 public companies, four of them worth more than $10 billion. 1.0, youe on studio

have been at the firm how long? guest: 16. john, you put greylock on the map in silicon valley. how did you do that? guest: it was a partnership effort. it is a team effort. 2000's, we were able to connect better to entrepreneurs, to build companies. ofly: john, you were the ceo mozilla. you started at apple? guest: i was doing experiments around the edges. emily: why greylock? i would not want to work in most firms. emily: why not? guest: i like to make things. everyone a greylock valued making products.

it is of him to say it was everybody else. emily: he designed facebook and linkedin. you convinced treetop to join the firm. how did you do that? toid: again, it comes down -- we believe if you come from product and have that background , there is an authenticity. most people do not remember, but in 2005, valuation was $500 million. emily: just students on it at the time. a lot of people looked at that and said, we lost their minds. people inside greylock said this is not a we do. emily: who said that? john: we had partners. we like to disagree, push each other.

there were partners saying, this will ruin the firm. emily: do these people still work at greylock? david: some do, some retired. not because of that. emily: john, you are behind dropbox, instagram. how do you fill the big shoes of david sze? instagram, people did not love it. they were not sure it would work. kevin and want to do it. emily: why didn't reed think it would work? he thought it was interesting, but not huge. emily: is there a formula to these things? with kevin, it took me a while to convince them to raise money. airbnb is another example. i did not get it.

reed was pushing really hard to make it through. we think that dialogue gets us to good outcomes. emily: good that you on that. are -- newunit yorker article about marc billessen, he called gurley his newman. who is your newman? david: we may be each other's newman. emily: is there competition between you guys? david: john and i, things from different perspectives. there are times where i do not understand what you're talking about. this: i understand agreement can lead to better outcomes. but does it create tension? of course. our partner neil is partner of

workday. you argue about the merits. or have to argue with reed david, which is stressful. , do you wanthand to play in the big leagues or not? emily: how would you rate competitions for deals? john: intense at every level. emily: more competitive than ever? in some senses, i would say it has never been more competitive. but underneath, it is the same five or six firms. too much money out there right now. i think the risk is mispriced. a lot of belief and not a lot of fear. those are worrisome. they can be dangerous if unchecked. if you look at it, there are only a handful of firms we find ourselves competing with again and again. john: it is easy to start a

company, but not to get them to the finish line. we think about what it means to scale. emily: bill gurley says we are in a respirable. -- risk bubble. how would you describe it? john: there's a lot of risk, a lot of money in the system. that is causing pricing to be higher, causing expectations to be higher. david: i think we are asked to take higher risks since 99 four 2000. i believe mobile is a fundamental shift and is only in the third inning. you can see how it is changing the world where businesses that have been terrible businesses, , are enabled in ways that were not possible before. you can look at public companies and say does not

so clear that they are overvalued looking at their multiples. there are mixed signals that lead to an environment of risk. emily: would you use the term bubble? we talked about prices being expensive but make our decisions based on if it is a great entrepreneur to be with. as long as we're finding the opportunities, i feel the prices are higher and we are taking on risk, but we are finding great entrepreneurs. john: we are trying to create companies in tens of billions of value. you have to keep your eye on the target. emily: it does not matter if you overpay? john: in the early stages. emily: why take on risk? john: we have exciting companies losing money with huge bankrolls

because they were raising and bringing in capital, almost unprecedented. that is the opportunity for the companies to build real businesses within the capital. but that is also the risk. at some point, the music stops. you are sitting down or you are not. emily: are we in a bubble? there is a new google to get built. there will be companies that look expensive veteran to be cheap. things are obviously overpriced in retrospect. some will be the opposite in retrospect. david: i just want to make sure ours are the ones -- not the ones. emily: you invested in dropbox but did not get a board seat. 20 that happen?

-- why did that happen? b round.was a they were writing a large wave. emily: how do you protect yourself as investors? we do not tend to use financial engineering. emily: you do not have liquidation practices? david: you're talking about unusual liquidation preferences. we do not do anything fancy. is alignmentting with the entrepreneur. that comes out at the weirdest moments. misalignment can hurt you. we tend to manage risk by picking well. emily: there are always these unicorns worth more than a billion dollars. are they really? because of the liquidation practices. does that mean the values are inflated?

valuations are just numbers you put in. until these become liquid, you do not know what the numbers are. david: if you want to be a public company, you will have to cross the chasm of public metrics. if you cannot cross the chasm, valuations from the early days can hurt you. then there is the opportunity to be acquired. you need acquirers willing to value you for whatever reasons and have the wherewithal to buy you and justify that. if you do not have those things, you get in trouble. emily: what about burn rates? do those can turn you -- concern you? john: what else matters beside how much you are spending? emily: have you been warning companies? david: at the end of the day,

private companies run losses. we have cavities with so much castle -- capital that it becomes hard to frame the burn rate too high. emily: is there too much arrogance in silicon valley? john: there has always been too much arrogance. look like andy rose or steve jobs. move out of my way, i will make this happen. there is a lack of fear. that is a little scary. but not much arrogance. emily: you said twitter is a big mistake that you did not invest. what do you think about their future now? ♪

emily: i want to throw a few examples of their. at $50 billion. would you put it at $50 billion? david: i have not looked at

their financials in a while. there would have to be numbers where you can see them crossing the chasm. emily: john? john: i am looking for companies with 5, 10, 15 times returns. i could imagine them at $500 million. it is a big opportunity, but i would not invest venture dollars right now. emily: let's talk about companies you know. what could disrupt facebook? david: if they cannot stay current providing value, that is their biggest risk. a platform shift. they nailed it moving to mobile. on mobile, who else is there? ibm,: microsoft to beat they are being google in mobile. john: he is using market cap to

buy whatsapp. he is using market capitalization to find what is next. david: complacency snuck in. chamath just said he thinks the facebook killer is going to be built in two or three years. john: i do not think that is right. you need a new platform to emerge. it is not obvious to me with a platform is. we are early on mobile. what is possible is that we are starting to internalize what it means to have a supercomputer in our pockets all the time. strapped to your wrist or whatever. it will not disrupt the market. but i do not think the next two or three years will be when that happens. been knownavid:has

to exaggerate. emily: ken snapchat disrupt facebook? john: it is not the same thing. emily: you said twitter is a big mistake, that he did not invest. what do you think about their future now? there is a lot of question as to what their place in history will be. david: any time you carry a high public valuation, you have a target on your back. you will be criticized. they have time to figure out how to stay relevant, how to stay valuable. john: i think we forgot how transformative twitter has been. with periscope and meerkat, you can see things life. that is likely to persist. the way early twitter users used twitter is not the way users use it today. there is something twitter is

losing moving away from that. but being a global place where people can talk about things is a unique position. emily: why is meerkat not dead? john: your cat is doing really well. madonna released her latest single on it. one button and you are broadcasting to the world. it feels like an opportunity is large. david: i think it is too early to write the story of the winner or loser. emily: there has been a rise in angel investing. angel list has created a structure by which you can invest in a person who invests in companies. how does that impact you guys? do you worry about that? there are more companies getting created no matter how you look at it. our job is to figure out which ones are interesting. emily: that is politically correct. john: it really isn't. when you have a billion dollars

to deploy, you can cash in different places and still be fine. not being distracted is the challenge. emily: what do you do on a daily basis to make sure you are connecting with the entrepreneur you want to back? david: a lot of shoe leather. a lot of going out and hitting the street and connecting. thewant to hit the moment person is ready to start a company. you have to be there at the right time. john: we try to say, how can we help? how can we make this a valuable meeting for you? emily: venture capital firms have had a problem with the russian -- succession. ♪

emily: what are the hot trends you are most excited about? john: search and intent.

called jackomething mobile. if you ask 100 people whether google is perfect for search, 99 will tell you it is finished. what if you had every question you asked google you could know the answer? there are a lot of questions that google is not good at answering. google is about web and documents. ofid: for me, the future digital media is social networking. i stick close to home on those. john: we will probably not do meal replacement drinks. david: we have a company called sprig that is growing like crazy. 10 companiesare that do what they do. jordache. -- doordash.

david: but how many people eat at restaurants? how many times a day? john: you're trying to do frequency and habits, things that are foundational. there will be competition. how do you make great food people love and be operationally excellent at scale? emily: what about apple. you are wearing the watch. john: i do not know what to make of it. populationteresting data. as a consumer category, they are a puzzle. i am an apple fan boy, for sure. i think this will not be a great product for a little while. version two and three, when you do not carry a phone, that feels like a real thing. emily: are there any apps in the future? john: the naive view is things

stay proprietary. all of is what a lot of people think. i think something new will happen. some new platform. there are too many smart people with access to too many consumers for interesting explosions to come out of left field. emily: ellen pao versus kleiner perkins. what did you see in that? a no-win situation for anybody. it was a tragedy all the way around. emily: why? david: it is something that is not good for venture, not good for kleiner, not good for ellen. it turned out to be something where there is a lot of drama and pain. i am not sure what good came out of it. i am hoping there will be some. there are some good lessons about how you treat employees.

maybe some lessons about retention. maybe some thoughts about how you build your firm. level, the pressure it puts on the industry is to make sure we are representative of full diversity. that is very good. part of the reason kleiner found itself in this position is venture capital firms have historically had a problem with succession. how to make sure greylock is around for 50 years? david: it may get told it is too old or stodgy. but over 50 years, you cannot continue to survive unless you make innovative changes. like some of the partners surprising me and saying, do facebook, it is the look towards innovation and willingness to change. emily: john na li, davidemily:

sze, thank you for joining us. ♪

al: i'm al hurt. mark: and i mark halperin. and we want to spend all of our time talking about jeb bush, but we want to get out of here by 5:30. ♪ mark: in tonight's superhero universe, batman, superman, and super-pac-man. but first, fundraising man. jeb bush has raised $14 million, -- $11.4 million in 16 days. that is not nearly as much as hillary clinton