♪ emily: it is the iconic venture capital firm. kleiner perkins caufield byers made its name investing early in google, amazon, and genentech, but a series of miss investments left many wondering if the glory days for this company are over. then, the firm was rocked by the most closely watched trial in the industry. revealing intimate details about why ellen pao sued the firm for gender discrimination. and sparking debate for equality 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.

john: it is a pleasure to be here. emily: you have been quiet for a long time, quiet through the trial. why are you here? john: you know, nobody likes litigation. and we are human. this trial was painful. at the end of the day, six women and six men heard five and a half weeks of testimony. they deliberated for 1.5 days. they found decisively on the facts that this company did not discriminate, that we did not 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 that it has been so hard for our entrepreneurs and partners to go through this, but more than anything else, i am sorry for venture capital and minorities in the tech industry. look, this is very personal. i have two daughters.

getting to a 50-50 world where they and everyone can participate is super important. emily: you have been at kleiner perkins for 35 years. how did you feel when ellen sued you? john: disappointed, betrayed. i read her suit and the world she described was not what our partnership is or 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 our business and on our results. emily: ellen pao says that she repeatedly was excluded from meetings and dinners and e-mails, that she 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: so that has not been my experience, but emily, i know as a woman that i have often been the only, the only woman on the leadership team, the only woman

to this day, many of my boards, i am the only woman. 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: sheryl sandberg told me that she saw herself in ellen pao. many women have said the same thing in the technology industry. cfo sue decker said that many of the behaviors raised in this trial often happens in incremental steps. it happens in incremental steps. that often seemed so small that individual act seem 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. and we all possess biases, hidden biases, unconscious bias. 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 great irony is that kleiner has had women in leadership, women as 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 the venture capitalists are female. it is ridiculous emily: john, is it just a pipeline thing? or are people not looking hard enough? john: they are not looking hard enough. they are not trying hard enough. if you want to hire outstanding woman, you go out and find them. i worked to recruit mary for over a decade. 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 in the world at what she does. as is dr. beth. emily: this idea that you have to be a founder or ceo, is that closing the door on good candidates? john: yes it is. emily: so 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 knew from that very moment that these had no merit. emily: how aware were you of the situation, like when she was there, how aware where you that she was not happy? john: you know, i'd rather not get into the past. ellen did some good things. i wish her well at reddit. emily: now 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 or being an investor, i think ellen can be a really great ceo. i hope that she is. but to be a successful investing partner is a really different job. emily: have you talked to her? john: only briefly in the trial. emily: what did you guys say? john: i said, "hi, ellen, how is your family?" "how are you doing?" emily: what did she say? john: 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 that this matter should be settled outside the courts. from the beginning. it just wasn't possible. emily: she is proceeding with and 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 there are not really what matters. what matters is we 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, that it happened to us. that 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, so, no, it's not. look, emily, i'm sad that anyone has a bad experience at our firm. and ellen did. but we are moving forward and we know there is more we can do. we can be better. emily: what is it like being a female partner at kleiner and being a female venture capitalist? what is that like? beth: so being a female partner at kleiner has been the best work environment of my career. and that is because i'm

surrounded by great women and great partners. emily: other women have left kleiner. does this alarm you? john: now, over the history of kleiner perkins, more than 30 junior partners have come to work for us and then gone on to do amazing things. emily: do you worry that kleiner 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 youngest daughter esther came to court the day i testified. they are very smart. they knew what was happening. emily: why not have hr? john: we are a small firm. we have policies. beth: we have somebody that comes in as a consultant. emily: john, do you feel like you made any mistakes with how you run the firm? john: i don't run the firm, i have always had partners to run

it with me. beth: i help a little. john: help a lot. i am one of six general partners. do we make mistakes, sure. but we learn from them and try not to make the same mistakes again. emily: do you feel you have made mistakes with regard to ellen pao? john: i feel like it was an error to promote her to investing partner role. that didn't work out for her. she was a really good chief of staff 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 complaints? john: no. emily: beth, do you feel that there were mistakes in how the firm was run? beth: no, and we are really looking forward. emily: are you doing anything differently now? john: yes, we are doing a lot. emily: because of what happened? 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, is we are publishing a diversity report. you can judge us not by our rhetoric but by our results. beth: and the third thing we are doing is we are improving the pipeline. we have the kleiner 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 has affected your reputation. do you worry about the image of kleiner? john: the results of the partnership are some of the best we have ever seen. emily, in the last 24 months, kleiner has generated $4 billion in returns, we had the most exits of any firm. 13 such exits. we had huge winners like n.e.s.t. which we helped incubate. second largest acquisition by google. so, we are really doing well. in a competitive environment. emily: what do you see out there

that could be the next google? the next amazon? ♪

emily: you guys made a shakeup a couple of years ago, two dozen junior partners, only five were promoted and 19 were fired. or 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 do you feel the partnership is today? john: partnership is firing on all cylinders. it is better than i ever remember. emily: john, you have been there for 35 years, kleiner was one that got in early. it seems you are making later stage investments, is that of the fundamental shift in strategy? john: adding later stage investments is a strategic thing. early-stage venture capital from incubations to startups is the bread and butter of our business, but companies stay private longer than ever before and they are raising 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 these entrepreneurs build great companies. we want to find amazing entrepreneurs and go with them on the entire 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 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 are 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. and that is because of the extraordinary effect that these devices have had. we have 2.5 billion people carrying them around. and another billion to come. an entrepreneur, innovator, 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 that is 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 so incredibly competitive out there that we have to wake up every morning and compete to win and work with the best entrepreneurs. john: there has never been a better time than now to create a new company. emily: it is great for companies , but 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 insurmountable 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. and i think 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 really valuable new service, or kind of product, that makes the world better. emily: john, you're the guy who put bets on google and amazon early, what do you see out there that could be the next google or amazon? john: gosh, there are three areas i am really excited about. 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 dollar education companies. john: no, there haven't, but there will be. second, on demand services.

yes, we are investors in uber. if you look at instacart, doordash, other 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: it is interesting that you use that example because chris sacca 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'm not here to tell you what their strategy is, but we were pretty thoughtful about that. but the third area is explosive, what happens with these devices in emerging markets? now the next billion cell phone users are going to come from india and china. so the idea that all of our contact information is in this phone is an old idea. it belongs in the cloud, like a cloud-based white pages or yellow pages.

beth and i, we backed some entrepreneurs out of stockholm called true caller and they have over 1.5 billion phone numbers in the cloud. this is a good idea. emily: kleiner famously 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. and our limited 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. so hopefully some time later this year you will be able to put on a set of magic leap 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: i think so. facebook is a great company, but the idea that you will block out everything to get your experience of the world is one approach. i think the larger one is to see anything overlaid on the world that you are really in. emily: i saw you wearing google glass when it debuted, but it hasn't worked out. what can the next iteration of google glass do to be better? john: i couldn't really comment on that, but tony is really committed to it. emily: how optimistic are you about wearing this thing all day long? john: it won't look like that thing as 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 probably the first company to $1 trillion in market cap. ♪

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

going to be the four major platforms 10 years from now? john: the conventional wisdom would be, probably not. but the truth of the matter is that these are four amazing companies with really talented people and proven propositions to consumers that i think are durable and will last for more than a decade. if you look 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: so at the time he said we are not ready? john: yes. emily: what about tv? did you talk to him about tv? john: yes. emily: what did he say? john: he said he thought he had cracked the code on apple tv. emily: you think he did? john: i do. emily: so what are we waiting for? john: maybe deals with the media

companies. emily: as i understand it , kleiner was in talks to merge. happened? john: venture firms don't merge. there are partnerships of partners, and we are always talking to people who are great about whether or not they would fit on our team. emily: what happened with thomas? john: he wouldn't fit. emily: 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 coinvest with him and his team. which is also very good. 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 to join our team. we are always doing that and we are exciting that we will add

one this summer and probably another one by the end of the year. emily: sucession in vc firms has historically been difficult. what is the succession plan at kleiner perkins? john: at any given time, kleiner has been unusual in that we have multiple generations of partners , and we have been diverse in age, gender, and ethnicity. so we are on our fourth generation transition in 40 years. and 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 it is not the reality. the reality is that it 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 in breakthrough, risky fields like augmented reality. that is even more diverse than we are today. and that's backing the world's best entrepreneurs. emily: john doerr, beth seidenberg, thank you both so much for joining us. it has been really great to have you. john: emily, thank you.

beth: thank you for having us. ♪

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