Sir Michael Moritz on ‘Auslander,’ Identity and Life as an Outsider

On with Kara Swisher

In this episode, Kara Swisher interviews legendary venture capitalist Sir Michael Moritz about his new book, 'Auslander.' The conversation t

Key takeaways

• Moritz transitioned from a journalist at Time magazine to a prominent venture capitalist after being recruited by Don Valentine of Sequoia.
• His book 'Auslar' was prompted by discovering family documents and photographs following his mother's death and during the COVID-19 pandemic.

Main topics

• Family history and the Holocaust
• The evolution of Venture Capital

Notable quotes

I'd fly the flag as an ink-stained wretch every day.

Conclusion

A deeply reflective episode that connects historical trauma with the h

Transcript preview

Speaker 2 (0:00) You British types are smart. Anyway. Speaker 1 (0:03) Well, some of them are. Speaker 2 (0:04) Yeah, some of them are. That's true. Fair point. Even the dumb ones are smarter than we are. Speaker 2 (0:20) Hi, everyone from New York Magazine and the Vox Media Podcast Network. This is On with Kara Swisher and I'm Kara Swisher. My guest today is the investor Sir Michael Moritz. For almost two decades, he led the Silicon Valley venture firm, it was legendary, Sequoia, and turned it into one of the tech industry's leading kingmakers. He was an early investor in companies all of us know today, like Google, YouTube, PayPal, and LinkedIn. I covered all of it, including all of his investments. His keen eye for opportunity made him a legend in the Valley and a billionaire. a few times over. But Moritz has a rather unconventional background in the world of venture capital. He was born in Cardiff, Wales. He's also the son of German Jewish refugees who escaped Nazi rule as children. And before his time in venture capital, Moritz was, wait for it, a journalist for Time magazine. And he was a good one. And he's authored a handful of very... Terrific books, I have to say. That journalism background informs Moritz's latest book, Auslander, One Family's Story of Escape and Exile. It tells the stories of his own family, those who survived the Holocaust in exile, as well as those who did not. Auslander means outsider in German, and the book becomes a searing reflection on the ways grief and trauma are passed down through generations. It's a bit of a surprising book, and yet at the same time not. Michael, compared to a lot of people in Silicon Valley, is incredibly erudite. He's a student of history. Obviously, he's a beautiful writer, and you will find this a pleasure to read this book, even though it's a very difficult topic. But one of the things I've always found interesting about him is he's willing to stand up. He's one of the few venture capitalists who stand up to Trump and continue to do so. At the same time, he can be more conservative. He's a complex guy. And so I think it's interesting to talk to him. All right, let's get into my interview with Michael. Our expert question comes from San Francisco Mayor Daniel Lurie. Don't go anywhere. Speaker 2 (2:20) Support for this show comes from Odoo. Running a business shouldn't feel like surviving a software group project. One app for accounting, another for inventory, another for sales, and somehow, none of them ever talk to each other. That's where Odoo comes in, an all-in-one business management software that brings every part of your business together, from sales and accounting to inventory and marketing, all in one powerful platform. No messy integrations, no bouncing between tabs, and best of all, no spreadsheets. Stop managing software and start managing your business with one unified system. Try it today for free at odoo.com slash Cara. That's O-D-O-O dot com slash Cara. Speaker 4 (3:04) Hogging seats on a crowded train, not saying excuse me, watching videos on your phone with no headphones in. Sometimes it feels like we don't know how to act anymore. What we have been seeing increasingly is people breaking rules. Why should I play by the rules if nobody else is going to do that for me? This week on Explain It To Me, how to mind your manners. New episodes Sundays, wherever you get your podcasts. Speaker 6 (3:32) We all know the Beach Boys, but to really understand them, you have to get to know the genius behind their songs, Brian Wilson. I'm Will Anderson, and this week on the Monday Music Club podcast, we dive into the history behind two of his masterpieces, the Beach Boys album Pet Sounds and their song Good Vibrations. I was joined by Brian's biographer, David Leaf, and we went through what drove Brian. what it was like in the studio during those sessions, and why the pressure of following them up made Brian have to take a step back from music. You can listen to the episode everywhere you get your podcasts by searching for Monday Music Club. Speaker 2 (4:06) Michael, thank you for coming on on. I really appreciate it. Speaker 1 (4:10) It's very kind of you to have me. I'm flattered. Speaker 2 (4:12) So let me just say at the start, I texted you this last night and I was finishing up your book. You were one, a very good journalist when you were one, as I was reminded. And this is a beautifully written book. You have not lost any of your skills as a journalist. Speaker 1 (4:26) That is too kind, but thank you. Speaker 2 (4:28) I'm not sure you want to be known as a journalist. Speaker 1 (4:31) Oh, I'm very happy. Oh, I'd fly the flag as an ink-stained wretch every day. Speaker 2 (4:36) Yes. Yeah. Well, it's beautifully written and really, you should keep it up. Anyway, for people who don't know, besides you being a reporter, you basically help fund the construction of the modern internet. Let's talk about that just a minute so we can talk about where you're coming from here and your time at Sequoia. You invested and sat on the boards of... Huge companies, many, many huge companies. And you topped Ford's Midas 100 list of top tech investors twice. And as I noted before, Tech, you were a journalist. We've known each other a long time. Talk a little bit about that so people understand what most of your career has been. Speaker 1 (5:11) Well, I grew up in Britain, came here 50 years ago, and began life in America as a journalist for Time magazine. and did that for about four years. And then along the way, wrote a couple of books, one that I did with a time colleague about the automobile industry, and the next one was a book called The Little Kingdom, which was a book about Apple's years as a private company, and the first book about Apple. And then as a correspondent for Time, I didn't know anything about Silicon Valley. when I moved to California, just literally didn't know it existed. And I got very interested in it. And I did a few stories about the venture business, which again was something that I didn't know anything about. And the venture business back in the early to mid eighties was a world separated from the venture business that both of us know today. And I decided I wanted to see if I could get a job in the venture business. And I wrote to, this is pre-email, so these were actually typed letters that I sent to the leaders of, well, the five firms that stood out. Feiner Perkins. Speaker 2 (6:25) Feiner Speaker 1 (6:26) Perkins and Merrill Pickett and NEA and a couple of others. And the leaders were all really kind. You know, they were kind. They opened their doors and they gave me an interview. And I think just to be polite. And all brushed me off and said, we wouldn't know what to do with you. You were a history major. You were a journalist. You have no technology background or education whatsoever. And one person, thank goodness, had a different point of view. And his name was Don Valentine, and he was the founder of Sequoia. And he... was straightforward enough to suggest that he didn't know what made for a successful venture capitalist because he'd watched some of his buddies from, you know, who had held high positions in semiconductor companies or some of the computer companies and they'd come into the venture business and had flamed out. And then he pointed to several people that he knew who had not identical backgrounds, but similar, you know. backgrounds that on paper wouldn't suggest that they'd be successful in the venture business. One was a guy called Tommy Davis, who started the Mayfield Fund. But, you know, the big witness for the defense was Arthur Rock. And Arthur Rock became the first investor and chairman of Intel. And then a few years later, became the first investor in Apple. And on paper, Speaker 2 (7:56) He didn't look like a Speaker 1 (7:57) good prospect for the venture business. But that was the reason that Don was more open than the others. Speaker 2 (8:06) So was there something that you wanted to do? I know you had written the book The Little Kingdom, which I read and remember very well. Beautifully written book again. Steve called you the historian of Apple in a lot of ways, although I don't ever imagine you were in the tank for him. I think that of a lot of books, but I didn't think about that one. So you had some familiarity with technology. Speaker 1 (8:28) Some, but it was as it is today. Very superficial. Speaker 2 (8:34) Right. But what made you see something like a Google in that garage? You and I have both been to the late Susan Wojcicki's garage. What did you see there at that time? Because that's what really made your fame, really. Speaker 1 (8:48) Well, it was actually... It was pretty straightforward. Sequoia had a big advantage because we had provided the original financing in, I think it was 1995, for Yahoo. And most people in Silicon Valley at that point, most of the investors shied away from the idea that you could provide a service for free. They didn't understand how the economics would work. Speaker 1 (9:20) For me as a journalist, it was extremely straightforward. I remember having these conversations with a couple of the skeptics at Sequoia that it was no different on the internet than it was in television or radio, where the consumer paid for their use of the service by enduring the advertisements that they were shown. And so we invested in Yahoo, and that's what played out at Yahoo. And then Jerry Yang called one day and said, you know, We're thinking about changing our search engine. And we're thinking about using the technology from a couple of people that we knew a little bit at Stanford, Larry Page and Sergey. And I'd met Larry a few years earlier. And he said, but we're pretty apprehensive and nervous about it because it doesn't have any venture financing around it. And I don't think we're going to license this unless it has venture backing. Speaker 1 (10:17) That was the first time that I really heard about Google as a company. And so he encouraged us to invest in Google. And for me, it was very easy. It wasn't complicated. The results were just better. The search results were just better. So again, it was a straightforward investment, say, for one thing, which was the valuation. Speaker 1 (10:46) And there was, I won't name names, but there was another character who participated through his partnership in the investment. And he said, when he heard about the valuation, he said, I've never paid so much for so little. Speaker 2 (11:05) That Speaker 1 (11:06) was a door Speaker 2 (11:07) because he was your investor. No, Speaker 1 (11:09) no. But I'll protect the not so innocent. Speaker 2 (11:12) I can guess. Speaker 1 (11:14) Well, you're such a close chronicler of all the scallywags out here that you would know that. What Speaker 2 (11:20) a nice term for them, scallywags. So I want to start talking, I'll get back to Silicon Valley in a minute, but talking about the book, because what's incredible is it has nothing to do with Silicon Valley or venture capital. It's a personal exploration of your family history in Nazi Germany. It tells the story of your family who escaped the Holocaust and those who were killed by the Nazis. It's one thing to investigate your family history for your own knowledge. It's another to turn your research into a book. Talk a little bit about this because you got a box after your mom died that caused you to do this. Talk about what made you pay attention to this. Speaker 1 (11:57) It was all very accidental. I never set out to write this book. And three things happened. My mother died slightly short of her 96th birthday. My sister, who lives in Britain, cleared out the house and put the documents and papers that she found. I mean, this was not the Rothschild archives, you know, in maybe four or five cardboard boxes and shipped them to me. And these were some old letters. There were some documents, old identity cards, passports, you know, and a few photo albums. Speaker 1 (12:35) And then COVID happened simultaneously. And we all remember COVID. And suddenly there was a lot more time on my hands anyway. I wasn't traveling, wasn't commuting. And I got engrossed in the story. Now, I obviously knew the arc of my familial history. What I didn't know were the details. And it's the details that make everything come to life. And so the papers that I received started me. on this mystery trail where I was trying to, you know, find the clues, find the traces, piece the bits and assemble the bits and pieces. And, you know, our family story is not unique. Obviously, there are tens of millions of other people in various ways who got swept up in this horrific whirlwind that occurred in Europe. But obviously, your own family story. tends to become the most important. So that's how the book came about. Right, Speaker 2 (13:37) because of these boxes. And you wrote, quote, the entire heritage of what we knew about our shattered family was in them. Is there something that you pulled out? I just recently got a box. My dad died when I was very young, and my aunt recently died, and I got a box of stuff of his. And I pulled one thing out that was disturbing, which was that he was in a play where he was in blackface, which was astonishing. This was West Virginia in the 19... you know, 50s, early 1950s. So it's not a surprise. But is there something you pulled out that made you say this is actually a book? Because you can just, I've looked through them and I haven't thought, wow, I should write a book here. Speaker 1 (14:14) Well, there were two or three things. Let me tell you about them. Speaker 1 (14:17) made it much more vivid and helped me assemble some of the pieces. So I had the brother of my paternal grandfather. There was a photograph of him that had survived in the files of the Gestapo. And the Gestapo were not supposed to take photographs of what they were doing to the Jews that they rounded up. But some... some smart aleck had taken photographs to present to his commanding officer. And so there was a photograph of my granduncle, Uncle Oscar. It was the last photograph obviously taken of him stepping off a bus after he had been rounded up with the other people who lived in his little village. So that was one thing that... He brought everything to life for me. Right, there he was. You can imagine. Can you just imagine? Even though the photo was in black and white, all of this stuff is about bringing color into the story. So that was one thing. Then a different scene was my father had been... Speaker 1 (15:28) save from the horrors, because he was sent to school in England. And then in 1940, after the British government felt that they were in profound danger of being overrun by the Nazis after the Nazis had swept across Western Europe, they rounded up all the enemy aliens. And on the whole, these were people of German or... Italian descent who hadn't been granted citizenry and were labeled enemy aliens, irrespective of whether they supported Mussolini or were Jewish or, you know, or Nazis. Speaker 2 (16:05) Familiar in this country, Japanese, it goes on and on. Speaker 1 (16:08) You're exactly right. You're exactly right. So my father had been rounded up and then shipped off to an internment camp on an island called the Isle of Man on the west coast of Britain. And again, I was sifting through archives and found, as you do in archival searches, one footnote leads you to another thing. And I found a trove of black and white photographs in the Tate archives in Britain. And I was, you know, really, you know, I was engrossed here. Because my