The Best Investors Dream Less Than the Founders They Back
Doug Leone's biggest mistake at Sequoia: not believing enough.
Doug Leone was an early investor in Nvidia, Google, and Apple. In each case, the company became something far beyond what anyone at Sequoia imagined. That's not a success story — it's a confession.
His biggest career mistake: not dreaming alongside the founders early enough. The companies that work don't just meet expectations. They obliterate them. And the investor's job, he learned, is to ask one question most people are too cautious to ask — what happens if everything goes right?
Laws of Physics
Leone has a framework he's refined over decades: some principles you write in pen, some in pencil. Strategy is pencil. Principles are pen.
The pen principles don't change across geographies, cultures, or technology cycles. One: bigger funds produce lower multiples. Two: slow down on irreversible decisions, speed up on reversible ones. Three — the one he returns to most — align interests.
His version of aligned interest is almost aggressive. If a VP wants severance protection, that's misaligned. If an investor raises a billion-dollar fund without meaningful personal capital in it, that's misaligned. When interests are truly aligned, he says, implicit trust replaces the need for oversight. You don't have to watch people who have the same skin in the game you do.
Follow the money is how he says it. Not as cynicism — as diagnostic tool. When someone tells you their spouse doesn't want them working so hard, that's a compensation conversation. When a partnership frays, trace the economics.
What Actually Builds Something
On founders: the company's soul lives there. When you lose the founder, you lose something that can't be replaced by a professional CEO, no matter how good.
On strategy: get to 500 customers. That's it. Early-stage strategy is execution. Everything else — positioning, marketing, brand — comes after you have real customers giving you real feedback. The mistake is spending time on the overlay before you've built the base.
On starting: find a problem you've experienced firsthand. Zappos came from not being able to find shoes. Google came from a PhD student who couldn't organize information. Airbnb came from founders who needed rent money and had an air mattress. The founder's unfair advantage is intimacy with the problem — not a market analysis, not a McKinsey deck. Direct, personal, frustrating experience.
The Speed Has Changed
One thing has shifted. The time from technology to adoption — five years in the LAN era, three in the internet era, one or two in mobile — is now compressing further with AI. You can't wait for clear data before moving. You can't prove a market before entering it. The capital exists. The interconnection exists. The question is whether the founder moves fast enough to use them.
The laws of physics haven't changed. The speed at which you hit them has.