emily: he got his start as a journalist with a front row seat to steve jobs' inner circle. then michael moritz decided to try's luck and venture capital. he joined the boards of google and yahoo!, then took a step back for a rare health condition he has never revealed. joining me today on "studio 1.0," sir michael moritz, chairman of sequoia capital and

co-author of the book "leading." you cowrote this book with another sir, sir alex ferguson. what drew you? sir michael: i always followed united. not as a raving fan. as the young boy, i followed them through the years. the working hard to help build sequoia, i was very curious about organizations that had succeeded for a very long time and performed at an extremely high level, particularly organizations that had been run by one individual. and there are just not that many.

emily: you have both been tasked with taking undervalued assets and making them profitable. sir michael: he grew up in scotland and i grew up in wales. both of us have an outsider's mentality. and i think a fair amount of a work ethic. emily: he is credited with transforming the faltering club into a $3 billion public company. and what are the lessons here? sir michael: i wish i had known about these topics 30 years ago. i know i certainly would have been far more effective. one is patience. in two is a long-term view. three is developing people in inside organizations, particularly young people, bringing them along, because if

you are successful doing that, you build great consistency, loyalty, and it's easier to instill the sort of levels of performance that you want. emily: you have boiled down these distinctive traits to two -- obsession and capacity for dealing with people. sir michael: you might look at jeff bezos or mark zuckerberg. these people are obsessed with, at the beginning, the products they want to build, and then their company. i think very successful people are great at building teams around that.

microsoft, for example, in its and heyday, had a very stable management team. the same has been true at apple. emily: you are so well known for your time chronicling the early days of apple. you spent time with jobs. you were in favor with him, you were out of favor with him. i wonder what you learned, watching steve so closely. what makes a good leader and what makes a bad leader? sir michael: with steve, the product was never good enough, whether it was a computer or a phone or a tablet. i think that is the hallmark of a truly great leader. great is never great enough. emily: there were a lot of qualities about steve that are so controversial. is the jobs model a good one? sir michael: i am a huge admirer. was a huge admirer, am a huge admirer of steve. it is very easy for people to sit and snipe. i don't think any of us understand the emotional consequences of being put up for auction and how that affects and auction and how that affects your life afterwards. i am not trying to whitewash. this was an individual, very

capable when he wished, of showing great in that the end compassion. steve is the most remarkable person i have met. emily: just out of curiosity, where did you leave it with him? sir michael: sadly, unfinished. polite on business terms, but that was about it. emily: you wrote the famous "time" cover story. you were a journalist at the top of the computer revolution. i want to talk about the architects. sir michael: ryan exemplifies the wonderful traits of a leader. he is obsessed with his company. for him there is always another hill, mountain to climb. he pushes his team very hard to do the impossible. he has a very long-term view of

his business. and he has got a lot of energy. he's got a lot of optimism. he is a fantastic leader. emily: what about travis? sir michael: travis is someone i do not pretend to know well. emily: he is so controversial. sir michael: do you know anyone who has done well that is not controversial? emily: after three decades -- sir michael: four decades. emily: four decades. do you have to be arrogant to be successful in silicon valley? sir michael: sometimes it spills over into arrogance.

i'm different from how i was in my 20's. bill gates, who is in his 50's, is very different from what he was in his 20's. everybody learns a lot in their pursuit. the understandable energy and enthusiasm sometimes spills over to arrogance, and some people and their 20's tend to get saddled with it. emily: you wrote this book before jack dorsey was named ceo of twitter. and the only silicon valley company that grew from strength to strength, as you put it, is intel. do you think twitter can be the second in history? sir michael: i think it is better to have a founder then going outside. jack has not been bashful about saying twitter needs improving. and that is where his strengths ought to be. as the product improves, presumably consumer satisfaction in the business will improve as well.

emily: how do you see this playing out? does this bubble burst? ♪ emily: as you said, you grew up

in wales and somehow made it to silicon valley. what kind of kid were you and how did you get here? sir michael: i got here through no grand plan. i went to college in britain, and this was the britain of the mid-1970's. it was not a particularly enticing place if you were a young graduate looking for opportunity. i came here and was very lucky to get a scholarship to study here. and after that was lucky again to get a job at "time" magazine which sent me out to silicon valley, knowing nothing about technology. eventually through a stroke of great luck, a fellow who started sequoia, don ballantyne, took a great risk on me.

emily: what qualities as a journalist made you a good investor? sir michael: i'm not sure i can make good investor. emily: [laughter] sir michael: we keep making mistakes. the venture businesses, other businesses we are in in sequoia -- very humbling pursuit here it as soon as you think you are good at it, you get chopped off at the knees. journalism was very helpful. you're often parachuted into stories. you have to get your bearings quickly. you've got to deal with imperfect information. and then you've got to have a point of view if you are a journalist or you make an investment decision if you are investor. you are trying to read people. you are trying to gauge sentiment. i found that i had been trained to make up my mind about a

confusing set of information extremely helpful. emily: andreessen horowitz has perpetuated this idea that good vc's need to be former founders or ceo's. of which you are neither. sir michael: i think it's important to tell from someone's background whether they will be successful in the venture business. we have a lot of companies that sequoia. let there is room for lots of other people to succeed as well as. being in business is also different from running a company. people like us, we are not running the company. we are trying to help the company as much as possible. the other thing people miss is we are working very hard on building our own organization, because unless you have that at the heart of everything, you

cannot make consistent investment. emily: you say in the book, the minute you think you were winning, that is dangerous. sequoia may be the most successful venture capital firm in history. what do you do to evolve the firm and stay on the edge? sir michael: showing up for work every day. i know -- emily: a lot of people show up for work every day. they are not sequoia. sir michael: it's true, but it's easy to start easing back and not working quite as hard. and not seeking the same level

of success, not having the same hunger, getting arrogant, becoming complacent, believing you are as good as your press clippings, which are never true. we still act like we are only as good as two things. one is the next person we hire to be part of sequoia and the other is -- emily: what would the headline be today? sir michael: gravity has not been repealed. emily: what do you mean by that? sir michael: things are eventually all down to earth if they are not properly constructed. emily: how do you see this playing out? does this bubble burst? sir michael: it is a more rational time the 1999, because i don't think there is a universal feeling that every company is going to be a massive success and people are a bit more discriminating. and some of them are going to come a cropper. emily: is that a british phrase? what does that mean? sir michael: they will not pay.

they will fail. it is the law of corporate, business evolution. if people get too big for their britches, if money is wasted, if the product is not going to fulfill his promise, companies are going to fail. emily: how protective are late stage investments? sir michael: many are just well-disguised debt. the terms that investors have put around them -- emily: the ratchets. sir michael: the ratchets, the liquidation preferences. these are not really investments. emily: is this a dangerous trend? the guarantee investors will get a certain amount back? sir michael: if the companies do not perform, yes. this is high-stakes poker. we have gotten to this time where the evaluations in the private market are far in excess of what they are in the public

market, so you have one bucket of bubbling water and one bucket of relatively cool water. if they commingle, the temperatures will even out. emily: what businesses do you see will be the first to go belly up in what trends do you see that will last? sir michael: the businesses that go belly up are the ones run by people who deny reality. and do not use the money they have raised very wisely. and think that there are a bunch of shortcuts to success. those things will come a cropper. companies that behave prudently, have very good business behind them, that have distinctive promises -- emily: let's talk about the web

van. sir michael: the one thing we got right about web van, although it was a horrible mistake -- the consumer part of the business is right through the roof. which is what young instacart is finding out today. instacart does not have a huge factory or distribution centers. it does not have all of the capital infrastructure required. in a can manage a workforce through these incredibly powerful smartphones and it is incumbent on instacart and it's wonderful under and ceo to make sure all of the economics makes sense, which it will. but the company is providing a fantastic service to consumers who just swear by it.

emily: any concern about the petition from uber? sir michael: we are always aware of competitors, particularly a company as successful as uber or amazon. but you cannot to find yourself by them. instacart is a business that is very difficult for any company to make. emily: how bullish are you about alibaba and chinese interest companies? ♪ emily: i know that you were

really bullish on alibaba's ipo him last year.

him him him him him him how bullish are you about alibaba

i'm always struck by how eager people running chinese companies are to learn about their american counterparts. how frequently they come to the united states, how'd jammed

their schedules are when they come here. i wish that the ceo's and founders of silicon valley did the same thing in china. i think we could learn a lot in ai think we could learn a lot from them. global in particular, the products are different. the services are different.

if any silicon valley company as spires to be a global company, china will be a very big part of their future. emily: now we see airbnb start its own chinese company -- sir michael: and linkedin as

emily: do you think it is a pipeline problem? some would say you are not looking hard enough. sir michael: oh, we look very hard. we just hired a young one from stamford who is every bit as good as her peers and if there are more like her, we will hire them. what we are not prepared to do is lower our standards. what if there are fabulously

him think of bright, driven women interested in technology, it has been wonderful to have you on the show, sir michael. sir michael: good. ♪ sam: every year around november

or december, many journalists will get an assignment that makes them feel -- >> gulp. sam: a little nervous. >> you are putting me on the spot. sam: they will be asked to write a story about what will happen in the coming year. >> the worst thing that a journalist can do is predict the future. >> i don't think anyone has made an accurate prediction wanted sam: we thought about the latest developments and medicine, transportation, and energy. story is we think will have a huge impact in 2016.