Invest Like the Best with Patrick O'Shaughnessy - Hemant Taneja - Engineering Global Resilience - [Invest Like the Best, EP.382]

Episode Date: July 31, 2024

My guest today is Hemant Taneja. Hemant is the CEO and Managing Director of General Catalyst, the global venture capital firm you’ll hear us refer to as GC. GC has set out to build resiliency across critical industries worldwide. The firm leverages technology to retool sectors such as healthcare, energy, defense, and manufacturing and explores innovative capital structures to support founders and businesses. Hemant discusses how the firm is positioned to respond to the aftermath of crises, including the pandemic, wars, energy issues, and beyond. We also discuss the building of a category-defining healthcare company, Livongo and much more. Please enjoy this conversation with Hemant Taneja.  Listen to Founders Podcast For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by Ramp. Ramp’s mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Ramp is the fastest growing FinTech company in history and it’s backed by more of my favorite past guests (at least 16 of them!) than probably any other company I’m aware of. It’s also notable that many best-in-class businesses use Ramp—companies like Airbnb, Anduril, and Shopify, as well as investors like Sequoia Capital and Vista Equity. They use Ramp to manage their spending, automate tedious financial processes, and reinvest saved dollars and hours into growth. At Colossus and Positive Sum, we use Ramp for exactly the same reason. Go to Ramp.com/invest to sign up for free and get a $250 welcome bonus. ----- This episode is brought to you by Tegus, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. Plus, with 75% of private market transcripts available exclusively on Tegus, we offer insights you simply can't find elsewhere. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.com/patrick. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.  Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com). Show Notes: (00:00:00) Our Partners: Ramp and Tegus (00:03:00) Welcome to Invest Like the Best (00:03:57) Introducing Hemant Taneja and General Catalyst (00:04:17) Global Resilience and Innovation Post-Pandemic  (00:05:56) Re-Globalization and Manufacturing  (00:07:03) Building Livongo: A 20-Year Overnight Success  (00:13:23) Aligning Incentives in Healthcare  (00:15:40) Re-imagining the Investment Business  (00:20:54) Evolution of General Catalyst (00:27:04) Succession and Trust in Asset Management  (00:35:00) Founder-Centric Capital Goals  (00:36:32) Balancing Growth and Liquidity  (00:41:39) AI and Onshoring Productivity  (00:47:10) Defense Investments and Ethics  (00:50:11) Geopolitics and Regulation  (00:53:16) Reflections on Leadership and Strategy  (01:01:14) Hemant's Future Plans  (01:02:55) The Kindest Thing Anyone Has Ever Done for Him

Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest Like the Best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at join colossus.com. Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of positive sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Clients of positive sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc. My guest today is Haman Tanaja. Haman is the CEO and managing director of General Catalyst, the global venture capital firm you'll hear us refer to as G.C., which oversees nearly $30 billion. GC. has set out to build resiliency across critical industries worldwide. The firm leverages technology to retool sectors such as health care, energy, defense, and manufacturing, and explores innovative capital structures to support founders and businesses. Hamont discusses how the firm is positioned to respond to the aftermath

of crises, including the pandemic, wars, energy issues, and beyond. We also discussed the building of a category-defining health care company, Livongo, and much more. Please enjoy this conversation with Hamat to Naja. Amon, I always like to start somewhere that is energizing the person, things they're thinking about. We were just talking about this. I think it's a great place to begin. Can you describe this concept of your and your firm's role enabling global resilience, sort of in the aftermath of the pandemic and lots of what's changed in the world,

and why that through line is such a key idea for how you spend your time and energy? If you think about the crisis after crisis, we have dealt with a lot. five or six years, the pandemic, the wars, the financial markets, the energy crisis. And you think about the climate that we have in different nations because of the rising nationalist interests. Our whole belief is that a huge wave of innovation is about bringing resiliency of nations. So what does that mean in terms of critical industries like healthcare? And if you are a country today, are you really going to rely on the United States for the vaccines for the next pandemic? Are you going to really prepare yourself to build your own capability?

same thing around energy independence, defense, all the critical industries. Our goal has been to think about how do we retool ourselves as the firm that leverages technology to create new businesses to rise up to that occasion and be good partners in driving that kind of resiliency for the nations. Where does that manifest most immediately? Like healthcare is a great example, obviously, because what we all just lived through in the last four or five years. but what are other areas that you feel like that sense of nationalism, that sense of self-reliance,

nation-level resilience need the most investment in work? Where does it meet with opportunity? There's a few industries where that dynamic is playing out. As we discuss, health care is one, energy is a huge one. If you think about defense, there's a lot going on there. And then also there is this whole idea of re-globalization around manufacturing in the last 30, 40 years where every nation every business was focused on globalization, you always focused on going and moving and manufacturing a lot of the other core functions to China and places where there was labor arbitrage and you could take advantage of cost efficiencies. Now, I think as there's a decoupling of the two worlds and there's the US, Europe, India, technology ecosystem coalescing and there's the China plus its

affiliates. What you're seeing is there's a re-globalization of those supply chains as well. So manufacturing is another area where that is taking hold. And we're thinking a lot about how do we enable these resilient supply chains in the markets that are of interest to us. One of the most wild things and interesting things I've seen you and the firm do is on the healthcare side, thinking about it through the lens of controlling an entire healthcare system and then trying to innovate within that thing. Can you talk about that grand idea in as much detail as you can? I'm fascinated by where the idea came from, what you've done so far, what you intend to do, and whether this could be like a model for new kinds of innovation.

Yeah, so look, the work we're doing in healthcare is a 20-year overnight success. In 2005, I got a call from Partners Healthcare, somebody there who said, hey, we have these electronic medical records and we're trying to figure out what to do with this information. And my first question was, what is an electronic medical record? Because I knew nothing about healthcare at that time. So I actually hired a friend of mine who was a physician. She walked me through how to read these things. And I was like, wow, there's a lot to be doing there. That whole top process led to building the first. first company that we incubated in the healthcare space, where we were basically aggregating these records to improve quality of care in hospitals. That taught me how siloed the healthcare world was from the technology world and how, in a lot of ways, we were building technology completely backwards. The impact of technology in healthcare was it actually created less efficiency, and to counter for that, the health systems had to create more jobs, which is the And this is the word technology does. It brings productivity in an industry. I sort of became a lot more intentional from that. After selling that business, I teamed up with

Glenn Tolman, who was a very successful founder in the healthcare business. He was retiring from all scripts. And I said, hey, let's take a shot of building a company that truly is culturally at the intersection of technology and healthcare. All bring the technology expertise. You bring the healthcare expertise. And let's go take a shot at a problem. That thought process led to the creation of Livongo. And we built what ended up becoming a category-defining company, taking care of consumers with chronic conditions. We came up with a business model that scaled by selling through employers because they're rational economic buyers. And as you know, most of healthcare is not a free market. So we found this pocket where you could actually build a

business, built a product, had an NPS better than Apple at that time. Took the company public in 2019, sold it in 2020 for 18 billion. That gives us a playbook for thinking about, hey, we can actually create this radical collaboration between technology and healthcare and solve problems in the industry. So rather than thinking about ourselves as let's go disrupt healthcare, we're going to team up with the folks that really know a lot about it, have empathy for it, and we'll go take a shot at it. While building Livongo, I started applying this idea of radical collaboration, went around to a bunch of health system CEOs and they said, hey, the technology that we have created is insurmountable. we really need to build a software company that's truly in service of your needs. And I would love to have three partners that kind of want that to be their legacy. If you want a vendor to solve this problem, we'll come to in a few years.

But if you really want it to be your legacy, then come join me. And I had Steve Clasco, who's now actually at GC, who is the CEO of Jefferson Health, and a couple of other CEOs sign on. And we started this company called Camilleur, where we went down this path of, let's really build a software stack, which is truly dedicated to healthcare. And then what happened in 2019? We were actually presenting internally a plan because I was seeing Camero being successful. I saw Devongu being very successful.

I told our partners, I think we cracked the code. I think we know how to finally build businesses in this industry that can be at scale with technology. And we should put 20% of our capital in the next 10 years in healthcare. I wrote a book about it. We're going to publish it in November. And guess what happened in 2019? COVID happened. So talk about having a prepared mind and therefore the opportunity to, turn a crisis into an opportunity, we just fully leaned in. We went to our LPs, we went to

health systems, we raised the health care fund, and we put down this whole thesis around health assurance that I published with Steve Plasco as a manifesto. Since then, we've basically been focused on a core thesis that health care should be proactive, affordable, and accessible. And in order to do that, we have to make our health institutions, our health systems, better businesses. And so a lot of what we have done since then has been with the belief that we need to deliver health assurance, we need to help these hospitals become better businesses, and we need an ecosystem of companies that are required to actually go do that. And I said that in my book as well. So we started a bunch of companies. We invested in a bunch of other great founders. And then we

went and partnered with now over 20 health systems, almost 15% of US healthcare system. We're working with their C-Suite's on how do you really think about technology innovation and transforming the industry. We also decided, as you mentioned, to go and acquire one of the health systems ourselves, partner with the community, and actually create a center of excellence that can be a blueprint for all of the United States, and then also for the rest of the world on how we really should create proactive, affordable, accessible healthcare. I have a dumb question. Can you just define what a health system is for us. The thing you bought, what are the component parts of the health system so that I could then ask some questions about, okay, cool, now you control one. You don't have to worry about

decisions they make because you control the thing so you can start really pulling the levers. So what is a health system? Like, how should people think about what that contains and doesn't? You have these acute hospitals. So if you need to have surgery or you've got cancer, you go and get these complex treatments. And then you have these outpatient procedures where you can actually go get an outpatient procedure on even in knee surgery, you can go urgent care, all the things that we deal with. And what has happened is you have these systems that ended up aggregating the acute care hospitals, building sort of this primary care, urgent care, outpatient services model around it. And the way our system works for the most part is insurance companies are the ones that end up

paying for the services that these systems deliver. So there's this model where there's a misalignment where health systems, the combination of outpatient and patient, in a volume-based system, are literally incentive to have heads in bed. The more sick people, the more money they make. Insurance companies want people to not be sick because then they get the premiums that they don't have to have a cost. So the who pays, who benefits is fundamentally misaligned in our system and is volume-based. So what some of the health systems have also started doing to say, hey, what if we took our own

risk? We should have our own insurance company so that we can actually fundamentally, do what's called value-based care more effectively and keep people healthy and actually get paid for keeping people healthy. The U.S. healthcare system pays you for people being sick. And what the consumer actually wants, if you sort of think about our orientation and entrepreneurs, the consumer wants to be healthy. And so how do we orient the system there? And the key is to have a model where the entity that's providing the care is also taking risk. And our health systems are too weak to actually be able to do that.

They don't have the capital base, and I'm the expertise. There are so many problems operationally with these systems. That's where we thought, hey, would step in. And I've actually said before the Amazon of healthcare, that sort of can be the transformative companies, not a trillion-dollar company,

but a trillion-dollar ecosystem. Because the healthcare problem is way too big for any one company. So how do we actually create an ecosystem of companies that can then go and help these health systems, as I described in just now, become much more vibrant and actually have the ability to deliver health versus being insented to entirely focus on delivering sick care. Could you give an example of this notion of taking risk and why that's such a key

component of a healthier incentive chain? Take Kaiser. Kaiser is the ultimate example. Kaiser is a health plan and you go to Kaiser's primary care services. And so now the way, in theory, I don't think it works perfectly and they have their own set of challenges. But in theory, when you go see a physician that's in the Kaiser network, their whole job is to keep you out of the hospital because Kaiser health plan is ultimately responsible for covering the cost of the patients. So if Kaiser is seeing you as a patient and also

are getting paid as a health plan, they're not motivated to have you enter the hospital. They don't want you to enter the hospital. So they'll do all the things to keep you healthy and invest in those things versus, hey, you're sick, welcome to us so now we can make revenue off of you. So I think that's why pairs and providers kind of converging and becoming payviders is ultimately what will create a rational economic behavior in this space. So if you look at United, United has in some ways the largest delivery system attached to it called Optum. They own it. And so now they have the risk and they have the delivery mechanism. And the question is, can you also help health systems do the same on the reverse order so that on the other side of it, you have these systems that can

truly focus on keeping people healthy, sort of being value-based, if you're Can we talk about the steps you've taken as the leader of GC to reimagine the structure of the investing business itself and what evolutions are necessary that you've done so far or will do in the future that position you as a big investing firm to tackle these kinds of challenges? Because like this is very different stuff than writing a million dollar seed check into a company. Buying a health system or doing much bigger moves with more capital, I'm sure requires like a different way of thinking about the firm. So I'd love you to just riff on the future of private investing and your origins and how it's

evolved. Look, 20 plus years ago, when I got in the investment business, we were essentially funding companies that deliver software to make us efficient in some way. And when after 2007, when social mobile cloud trends manifested themselves, we started doing this digital transformation of society. We went from building software for doctors to building healthcare service companies. We built from building software for insurance to building insurance companies. So the scope changed. And I would say there are like two companies that have had a profound impact on me in how we thought about the evolution of the firm.

It was probably Stripe and Livongo. So when I moved to the Bay Area because David and Joel, the founders of the firm, asked me to go take a shot at building us in the valley. At the very first investment, as luck would have it, I ended up seeding with Stripe because I just thought John and Patrick are amazing. I knew nothing about payments, total luck. What I got to see by watching them was, hey, geez, what the operational excellence was which we build a business.

And I thought a lot about how we had applied that to ourselves. Because in some ways, venture businesses are the worst run, or used to be the worst run at least. And we're like, how do you be operationally excellent ourselves? Second thing was just watching the scope of what they were doing was, boy, this company has infinite runway. The venture business at that time largely was, You invest in a company early.

You hope it goes public for a billion dollars. If you own 20%, you make a couple hundred million bucks to return your fund and you're a genius. You do that once in your lifetime, you're lucky. You do that twice or good. You do that three times. You're legendary. That's what the business was. And then all of a sudden you look at Stripe, which we invested in 2010.

I've been invested in 14 times, including a very large investment in this last round. And we doubled down when COVID happened. And the belief was, well, there's infinite amount for this company to do. So if we're actually going to be good partners to them, how do we need to change to actually have both the capital solutions and the kind of governance it takes to build companies that do execution of that skill? So that was about value creation, maximization, profit maximization, and just, hey, we just got to change.

That was sort of an interesting thing. In parallel, as I mentioned, I was starting to build Livongo in 2013. in 2014. And that company, all of a sudden, we're like, wow, we're taking care of people's lives. And this thing is, first of all, only going to scale if it improves health. It's got to have real purpose and impact. It's only going to scale if we can actually take costs out of the system, going back to my health assurance thesis of affordability. And it's also a very large market. We have 35 million people in United States that have diabetes and other chronic conditions, hundreds of millions worldwide.

So that's an infinite market too. So we could actually be company for a long time. So seeing these companies build, and I'll tell you in like 2019, then we took Livongo Public, and then in 2020, we sold the business. We sold for like $18.5 billion. And that day, I had an incredible buyer's remorse.

So I was like, wow, we created a lot of value in the short term. We made billions of dollars for our investors, who were the largest shareholder. But what would have happened if in serving only half a million people were actually serving 10 million people, and we kept doing this. And what would have happened if we had kept the relationship with all the employers, we signed on and convinced them to deliver health this way with this business model to their employees?

We would have done something much more profound from an impact perspective and also maximized return. So the thought process was, if you want to build an enduring company, you have to think about it on a much longer horizon than we're used to. You have to think about a capital basis that is much larger and much more differentiated. come back to that as well. And you need to think about doing it in the way that the products are fundamentally in the interest of society. So purpose and profit are not either or, but you got to align them. And so just watching these companies and others that are in our portfolio like that, Gusto and Airbnb and others that we worked with, it just became clear to us that the opportunity is

was far greater than what venture used to do. And with our mindset, because we also build companies were as much builders as investors, we just wanted to make sure we were building an enduring firm that could, A, be there for our founders for the long term. So we had to change ourselves in the way we run ourselves. And B, we had to build with a different playbook that really focus on this whole idea of profit and purpose. I have a million questions about all this because I think it's so interesting how you refactored the whole thing. Maybe let's just start with like the way the firm GC works. What is most different about it? today in 2024 versus 10 years ago or something like that.

Like if I was to step in one day and a decade later, like what are the biggest changes that I would notice, just about the firm itself? Maybe I'll start with a story. In 2014, 10 years ago, to your point, I went to go visit David and Joel in Boston, and I said, look, I think the world's changing in this industry. And I've also got a lot more confidence that I can be a decent investor

because I was completely unproven when I came to the Bay Area in 2011. and I'd love to know what you want to do with the firm because I'm going to build something that's going to be fairly different given what I see the opportunity set to be changing, but it's your firm and I'm happy to help think about a proper transition over a couple of years and go do something or if you guys are open to building something, I'd love to build. But out of respect, I wanted to ask them, to my positive surprise,

did anyone blank? They were like, no, let's go build. And they're entrepreneurs, right? our GC started out as entrepreneurs helping in entrepreneurs. We decided, okay, great, but what does that mean? We need to turn ourselves into a well-run business. We know nothing about it. Then we brought on Ken Chenal to come be a chairman. And a lot of people were like, geez, somebody retiring for running a Fortune 500 company after 18 years to come start doing venture. What does that mean? And I think now it's pretty clear. It really was about building a technology platform that could have a great impact in society. And by the way, he's also made from great investments. And then

we just went down this bat. We did a very intentional succession to going from a partnership to me sort of taking on as a CEO. The firm never had a CEO before, and it was important for us to make that transition because we were going to be a company and an investment firm. So we sort of thought about what is the culture that builds an enduring firm? It needed to run with the rigor of any other company, and let's take inspiration from somebody like Stripe and others. And it also needed to protect this magic where you were really backing conviction of a few people versus consensus in some process. And so we designed ourselves to be able to do that. We also thought that the goal is going to be about transforming industries. It's not about just going and chasing

deals. So you become a lot more intentional from being certain dividends in the beginning. And so that required us to have people that are deeply, deeply entrepreneurial and have a change in the world they want to create. All of a sudden as entrepreneurs, they're sort of saying, hey, we have capital. We have these amazing community of founders that we work with. And what's the theory of change around which we want to build towards together? So that became an interesting sort of cultural evolution of the firm. And then the other thing we thought a lot about is like, what are the capital solutions required to help founders really build companies in this next generation? So then we started thinking about the various pools of capital. So today,

The way firm runs is we have a set of partners that all have these deep views on sectors and geographies and the change they want to create. And we have a set of partners that are fiduciaries for these different capital solutions that are required from a company building standpoint. And we all act as one team. We all share in the same economics. We all get together once a week. It sort of maintains that sort of spirit of the partnership. But we go off and really run. We have OKRs and we have goals and we have budgets.

and everybody's got responsibility of part of the firm that they're running. When Ken joined from American Express, that was this prior stop before coming to GC, what were the most tangible things that you remember him doing or installing that changed the way the business ran? So many. First thing that was amazing was we had dinner in Cambridge with David, Joel, Ken, and me right after he started. And it was like such a pressure in common.

He said, I think I know why I'm here. I'm here to take the firm, the two of you. and create succession to him. And I want to just tell you guys, it's going to be very messy because change is messy. And I was like, I don't even know what that means. And I was even uncomfortable by the idea of there's a succession because we've done this together for like so long since pretty much the firm started.

But that was like a very interesting journey that he sort of set us on. And we're all one big family after that messy succession. So that was one. The other thing he helped us do, he said, we really need to do a mission and values exercise. So think about it, 18 years into its existence. since we did what a company typically does at the beginning. This goes back to like, it's just this next phase of going from completely

certainipitous to being much more intentional. So we did that. We had this beautiful set of values that were created out of that exercise by somebody Ken had worked a lot with Jennifer Zimmerman. And then she came on to be our CMO. So we did that. Then he asked me to write a three-year strategy for the firm. And that's when I was able to take a step back and think, what we're really building,

what is the culture going to be just old? sort of duality of partnership in a company. And also, there were some design principles that we agreed on with which I took on the orchestration of the platform build. One of those is venture actually does not scale. So if you think about the last 30 years of venture capital, it's just accordion. Bubbles happen, funds get bigger. Bubbles collapse, funds get smaller. The good firms stay on. And once in a while there's a new firm, but it's just been kind of like this thing happening going back and forth because by having more money, you can't manufacture more outliers and all the return is in the outliers. So one of the things that would like, well, you know what, we actually

shouldn't be thinking about scaling how much capital deploying venture. But then the conflict is, but then we want to have all this great change. You want to drive transformations in these industries. You can't do that with small venture funds. So what else do we need? We started thinking about building those products. It's been a remarkable journey. And then the more we sort of put that viewpoint out, these amazing entrepreneurial people that are hoping to create the change in these thesis decided to be like, hey, we want to come work with you guys, come work at G.C. So I think it became clear to flywheel of talent that now I feel like we can go tackle any interesting problems because you have such amazing bandwidth with these people that all want

to run these directions and be entrepreneurial. Good succession, successful succession in asset management businesses is incredibly rare. It's really fraught. It's really hard to do. You called it messy. What was the messiest part of it? Why do you think it's the case that it's so rare that good succession happens, you've managed it.

So what was messy and what were the keys to making it happen? When we move to the Bay Area, let me start there. I do think that's an important insight into why this transition worked really well. We talked to a lot of firms that moved from the east to the west to try to become a Silicon Valley firm, and most of them failed. And they all had a common pattern to them. The pattern was they would go and essentially hire a couple of young people in the valley, give them some agency, and see if they can perform.

What we didn't say was we literally took everybody we were developing in Boston and sent them 3,000 miles away and said, we'd rather replicate trust and they can go build a community themselves so that the firm is intact. Our LPs were super mad at us. They said this firm is over because if Hamont and others, were successful, they're going to split off. If they failed, you're going to cut them off,

but now you have nobody left to make the firm endure in Boston. So they were really concerned, but they underestimated the power of that trust. And then when Ken came, his whole criteria was, I want to be part of the team that I can deeply trust. I think first thing is, like, the sort of foundational trusting was really important. The other thing is, look,

our succession isn't really a traditional succession because I've been there since 2002. The firm's already in 2000. So it's just really, it happened to be 15 years younger. and I've got that runway so that we can actually have, as luck would have it, we have the bridge to really do the succession

that's going to come after which with Ken and I talk a lot about because I want to get that right now to make sure we are able to do that when the time is right. And then I think the messy part, boy, think about it, we were changing the firm in such large ways. I mean, David and Joe were predominantly early stage investors

were like, I remember when I, in 2016, when I said, hey, let's lead stripes around at $9 billion. They were like, what are you talking about? And it was sort of this conversation of how does that even make sense? I was like, no, I think there's going to be a hundred billion dollar company. And those are strange words to come out of your mouth, right? But we just had conviction and they obviously, great partners they are. We've gone along with it.

But like we stretched in all these directions. And we said, let's go build this health practice. That's not quite just venture investing, but we're going to do all these things. And oh, by the way, we're now going to have a CEO where we had this deep belief that there was only four or five was surrounded TABEL as a partnership. So like so many changes that they had to get comfortable with in the process of letting go and thinking about, hey, this is our baby and is just going to endurance thrive or what's going on? That creates anxiety. Very understandable. But again,

goes back to that trust and confidence. It's never been that complicated or acrimonious ever in our conversation. But these are like real things we should be talking about. And I do think as luck would have it, some of the decisions we ended up making in the valley really worked out. Some of this growth investing we did really worked out. Some of the hatching we did of companies he's worked out. And so that also got them more comfortable. So I think it's been a very good process because to me in the end, did that trust and the relationships really preserve and we still all get together. I'll call Joel, who's now retired from being on a managing company all the time because I'm just used to it because it's been 20 plus years of thinking through complex things together

and we'll even joke about the things that used to work us each other all the time. It's exactly where you want to end up. There's trust, there's agency to like do things differently and take them in different directions, but you protect the core of the values of the firm. And that's something I am very protective of. We don't want to lose the institutional knowledge. We don't want to lose the history of how the firm got it to where it is and preserve the core values, especially around creativity and relationships in the way. And then the generosity of spirit. If you read our values, every time I read those words, like, yep, that's us. I love that idea. I think Ravi Gupta from Sequoia is the first one to introduce me to it, that Amazon has its 14 values. But if you

really pressed Bezos on it, the customer obsession would be the one that he stuck with. If I did the same pressing of you on your values, what do you think would be the last one that you held on to? Relationships. It's all about relationships. When I think about our business, it's a relationship with the founders, it's a relationship with those industries that we want to change. Is it relationships with the government and sort of having collaboration? So it really is about this radical collaboration. And relationships persevere because there's mutual respect, There's transparency and there's like real collaboration. And we take a lot of pride in being genuine about that everybody would do with business with. That's the last thing that'll go. I'm sure that the answer to the next question flows from the relationship thing, but I'm fascinated to learn the story of how these new and different capital solutions came to be. How did you learn on top of just a traditional like pool of a couple hundred million bucks to make early stage investments or whatever? How did you layer on other things with LPs?

How did you learn from them? How did you form capital, you know, a new, unique and interesting ways and learn how to deploy it? Talk me through that evolution and the role of the relationships played in that. So look, I'm the CEO of the CEO. The one that gives me the most energy is actually being the chief product officer of the firm. And you're really thinking about what are the founders need to drive the creation of these enduring companies and these industry transformations, which is the ultimate goal in a lot of ways. And so for that, obviously, first we had to think about the capital waste and the governance models.

As we said, these things are much bigger markets, much more responsibility. So how do we evolve around that? And then I think there's this whole idea that equity as the only lever for how we build these companies may not make sense. For unstructured risk, when we're building a product, it makes a lot of sense. But when you think about sales and marketing and how do we drive growth in a business, is it really in the founder's interest to be diluting them all the time to go to that growth?

Is there a better way to give them capital to be able to do that? We have this, our head of data science, in fact, the only data scientist we had at that time, and I think it was 28, came to me and presented me this idea around a better way to be founder-friendly in the way to build a company,

subscription businesses. First time I told him to go away. He kept coming back at me, and then I gave him a million bucks to trial, the concept. He showed me the data. I was like, wow. And so then we went and raised $300 million.

Ask our LPs, they'd give us a shot. This is entirely new, but we think this is part of how the companies need to be built. That worked really well. And today, it's a couple billion dollar fund that Pernov, who's now in his early 30s and KV, who's his co-founder of this effort, kind of run on platform. They've done an amazing job. And I think we have something that really helps the founders, and especially in these markets, by the way, where not everybody's going to get to go public. The market dynamics are changing.

We now have a way for them to actually build these companies and do their life's work, even if they were private the whole time and still take care of their shareholders and still take care of their growth capital needs. And so that's an example of it. And then, as I mentioned, like from the beginning, we've been incubating businesses. So we've built three category defining businesses from scratch. It was kayak and travel, which my partner Joel started, demand where which my partner Larry started, which became the Commerce Club for Salesforce, and then Livongo, which I had worked on with Glenn. And there's many more. And we said, gosh, being a builder, A makes us good player coaches, gives us the empathy, gives us strategic

thinking around the spaces. And it's an amazing business from a return's perspective. And we should institutionalize it. So we started institutionalizing this whole idea of incubating, transforming, venture buyouts or like where we really get to play as builders with co-founders. versus in the venture business where we're sort of investing and really getting behind other people's visions. And so we institutionalized that. So I think we've been very founder-centric on like what capital rules are required. What should their structures be to drive the change that is required? And so it's been very organic. And it's not focused on AUM because we want to be a high-performance firm, which is the reason we don't scale our venture funds. But we are willing to think about

going in all directions that can help increase the chances of founders being successful. Could you give me like a sample transaction just to really like bring to life that middle bucket that the data scientist brought to you and how it would work? So if I'm a company that's got a subscription software or something and I want some capital, what is the structure and nature of that capital? Almost 50 companies are using this now, including companies like 5 trend and others. The way that works is let's assume you're spending 100 million bucks a year on customer acquisition. That spend leads to acquiring new set of customers that pay you.

What we say is we'll give you a percentage, let's say 80% of that $100 million that you spend, so you don't have to spend your own cash. So all of a sudden, once you sign with us, we'll give you $80 million to acquire the next set of customers, which means your cash balance will go up by $80 million bucks because you didn't spend that. Now when those customers get acquired with that $80 million of ours

and $20 of yours, those customers, when they pay, then pay us what you're getting from them up to a cap to return. You pay us and then at some point, we're done and you're getting all that revenue stream on your business. So you grew without actually shrinking your balance sheet. In fact, you grew your balance sheet. Another question is, what do you do with that balance sheet? You could use that to give liquidity to your shareholders,

which everybody needs. You could use that to do acquisitions. You could use that to actually grow faster and invest more in growth. So it opens up all these avenues because the spend on sales and marketing is a very structured risk. We know what the inputs and outputs are. So why take really expensive venture capital money from our venture capital funds when we can actually help you grow with this? And that has served these companies to manage a new product. And so, you know, it's been in an industry where we've been on this juice of how do I get the next mark and the next mark.

So my returns look good. So actually thinking about how do I dilute less and dilute less and get bigger and bigger? because ultimately it's the end game that matters. I think that behavior change, I still think some of the venture investors don't fully get it, but I think they will over time. But some have really had religion now, and they're getting behind this in a meaningful way. And there's some incredible case studies of companies who have just completely changed a trajectory with this product.

And so the skill set there, I'm sure, which then helps you elsewhere in the business, too, is just a really deep understanding of the customer acquisition efforts of a company and in the lifetime value associated with the given customer. And if you understand that equation, you feel confident that you can earn a great return, maybe not an unlimited high return, but a high return by understanding that component of one of these businesses like VibTrain really well. I'd love to learn a bit more about the lessons you've learned on the incubation starting company side and also mistakes that you've made.

Like I'm fascinated by the role of leadership and also like the role of first risk, like someone that is both a leader but also willing to like take that entrepreneurial risk. And that without that, it can be harder to build a 20, your long-duration, big build-out. How do you manage that? Let's say you have an idea as GC, and you need a leader to be the CEO of that thing. What have you learned about that matchmaking process

and making sure that the motivation and source of the idea has a nice long duration, and it's not a mercenary or something? We have a very clear framework for where we take on projects like this, because these are very costly from a time perspective. When one of us was in incubates for like six, nine months, That's how you're doing. So we're kind of out of the market, and we have a lot of capital to invest.

So first is we don't want to work on problems that founders are already solving. So we look for things that are not happening because of structural reasons. Those structural reasons might be the very interdisciplinary, or you really need a lot of capital, so no one wants to take that risk, or you need collaboration from people in industry that somebody just starting with no credit, you just couldn't get, things like that, which we can overcome, given our gravitation. us as a firm in our relationships, in our capital base. That's an important criteria that we want to be not accrued to the ecosystem in that sense. The second thing is, this is a lesson learned

because I've started companies where it was just me in the beginning. I was just excited about it, but you're fragmenting doing 50 different things. Those never worked. So we don't start unless there's somebody who's a co-founder and the primary founder that wants to own it from the beginning with us. We'll be with them through and through, but that's got to be there as a point. The other thing we do is we set it up in a way that if along the way, we lose confidence, but the founder wants to keep going, the capital stack isn't so messed up where we own so much that they can't keep going. It doesn't really usually happen, but it could. So we want to make sure the founders that come and partner with us on the creation side to start new businesses, they could always raise

from the outside if our own sort of alignment wasn't there, even though it doesn't happen. So I think it's sort of thinking about those conditions to make sure the success of the project and the person you're partnering with, is set a first and foremost and doing something that's really needed. Commure that I mentioned earlier, that was not going to happen. Going and building a software company,

I've bought seven businesses into Commure to actually put pieces together, help scale, and we've got a phenomenal leader, Teney, who's running it now, and I just think the world of. But it's zinging and zagging, and that wouldn't have happened

without somebody like us coming into it, but so many things just automatically would, and we should just back founders and be good partners to them in that sense. What do you think about the Rubicon to be crossed or not for firms like yours to get into full traditional, like control positions in companies where you're just buying and running businesses like private equity would with or without leverage, you know, whatever. The capital structure could be a different conversation. But it seems like we're kind of heading that direction. If firms are excellent at technology and precipitating change and transformation of industries and the way you're describing, at some point, maybe you just want to buy massive whole businesses and drive change that way in the way that you bought the health care system.

What do you think just industry-wide about that trend? Yeah, it's a couple things. One is on the healthcare system, we're actually buying that from our balance sheet because we want to hold that for a long time, and we don't want to put that community and, hey, we're going to sell it in like seven years and all the PE issues going to be. It's like very much, you're part of our long-term healthcare strategy, and we're going to be a center of excellence, and we're going to do it right by the community at Tsuma. And for that, it just can't be a portfolio of companies as a pressure to exit.

So it's sort of a different scenario. Having said that, I do think with AI, there's a lot of sophistication around the data infrastructure being built and the models and how that all plays out. We can at some point talk about that. But the place where AI has immediate value from my perspective is to onshore productivity, where we offshoreed labor in the past. So think about businesses that have gone and outsource jobs in call centers or accounting or revenue cycle management issues like that. Yeah, I can do all those things really well. we're going to bring that product to be back onshore.

Every market, not just the U.S., with AI, because those businesses will go from low-service businesses to high-margin software businesses. In fact, some of the most exciting IPOs that might happen financially, 10 years from now, might be those kinds of companies that today we think are not that interesting. But it just became economically interesting with AI as a leverage point. Those businesses, we are already putting plans in place

and have been buying into vehicles that we've started and then applying AI to them. So this is already happening. We've done half a dozen of these. There's others that have started doing that as well. So I think it's naturally going to happen. The difference is in private equity, you take cost out. In what we call venture buyouts versus leverage buyouts, we put innovation in.

And that's the big difference. And so I actually think our creation effort where we build businesses, we buy businesses, we transform businesses. There's a lot of alpha to be created, but it's hard work. You really have to be a builder. slash investor to want to do that. And the people that we have doing those types of deals in the firms were just entrepreneurs.

They just think that way. And they're investors today. They have a capital base, but there's entrepreneurs. And so I think that's an important tool in the tool set to go drive these transformations. What have you seen in the way that AI is being approached by companies, by entrepreneurs, by investors, that is the most confusing to you? Like, is there an area where you feel like you're the most different in your understanding of what this might mean or where it might create the most opportunity or anything like that?

Look, I don't know if we are different, but when Livongo went public in 2019, we took it public as an applied AI company. Applied AI is where I feel like we can capture the most value and we've been systematically thinking about we have this matrix, which is what are all the business functions, for all the industries, and what needs to happen for each spot in that matrix? So we've incubated Hippocratic AI, which is a language model for healthcare. Got 40 systems to team up with us. We built a language model, but we don't sell that as an AI model. It's literally a online agent, AI agent, which used to be an online nurse. That's the smartest agent that can actually check up on you and prepare you for our procedures

that are coming up and whatnot and do it for a few bucks an hour versus $90 an hour, which helps us really going back to their need to cut costs and be more vibrant. That's an example of a business. We helped catalyze, we collaborate with the industry. We teamed up. up with one of my partners who left to go build this business on Andy Lee, who built a Lorica, which is like the fourth largest call center company. And we are building this company called crescendo, which is building these full-on sort of AI-enabled call centers. So that matrix is super interesting. Marketing, legal, contact center, every one of those dimensions. And then how we fundamentally think about care with AI in health and financial services and others, how we kind of

redefine that. Underneath it, I think there's a lot of focus today on. on building the AI models and sort of chasing AGI. That place is very hard for us to invest. Because I feel like every round is a venture round. Even if you have some short-term revenue, because as technologies get commoditized, you're just not going to be able to capture that much value. So you don't get a return on your investment

or building the model. But people keep funding because it's the race to AGI with the prize is so large. And then whoever gets there, maybe, if there is AGI to be had, would be this multi-trillion dollar company and none of the rest of the stuff matters. We're not really in that game. We're much more focused on applying AI and creating this sort of value in transitioning

these businesses in the short term. So there's a lot going on. There's obviously then there's a semiconductor layer underneath it that all has to evolve as well to take advantage of this. And I do think there'll be value captured. We've decided we want to be very deep in making sure we build these solutions that transform the workforce. We go from, again, these companies.

where it was all about labor and outsourcing to building great businesses onshore. So it's a bit of a global resilience team per every nation in that as well. And technology is ready today to capture the value. What we're seeing is just unbelievable in terms of what these products look like and the economic benefits those products have for their customers. Can we talk a bit about defense? That seems if you just were an outside observer to be one of the biggest zones of change in this whole world where huge companies that require,

lots of capital and are hard to build products are spinning up like every day, it seems like, and a huge amount of capital is flowing to them. You and I, I think, actually first met for the first time at a dinner where the topic of conversation was China. And just like the new landscape of geopolitics in the world and that driving lots of this defense investing and innovation, which kind of had been the same like defense primes for forever and ever. What are you seeing there? How does that have your interest? How would you describe it to people learning about it for the first time? Yeah, so defense is in an area. We've actually been investing in for 20 years. We bought the first defense contractor, actually David did, one of the co-fifers, from BB& Technologies in 2004,

the idea that we will commercialize technology from there. And we built down. We did that a couple times. And then I think the first really profound company we seated with our friends at the founders fund was Enderle. There, the belief was, to me, there's two issues. One is the misalignment of the business model with the primes. When it's cost plus, as well as going to be high cost and high plus. And then when you think about the technological capabilities that they have, versus all the innovations that got done in the consumer and enterprise world, they were just backwards.

It's sort of interesting, right? In the Silicon Valley came out of defense. Sure. It's a very symbiotic, right? It's origins. And we're feeding back into defense. I think that's really what's going on to say, let's take all these really high-reliable hardware software capabilities that are being used at scale.

let's bring them back in and now really rethink with the cost structure should be. So I think that's one thing, which is an amazing opportunity. We have a large investment in Andorra. We also have a European company in defense called Helsing that is doing incredibly well, and we have invested in the amount of capital there. And we're looking at doing the same in India, going back to sort of what is the defense sort of the ecosystem across the markets that we care about. It's very tricky because every time we do a defense investment, we have a huge,

debate around it. Is this ethical? Is this the kind of thing we're going to do? And I think now, thanks to Paul, Jeanette, Teresa Carlson, who's at GC as well working on our global policy work, we now have sort of created a framework to be like, look, we're focused on deterrence. And in fact, the first time we made the large investment in the world, not the first check, but the second check, we met five times in a week. We had to write an ethics member. It was like so unusual for people because they're like, this makes kinetic weapon someday and what is really going to happen? What has deterrence mean? We're not used to thinking about it. But thanks to having Ken here, who's got a lot of experience to some of these other folks, we've created a framework,

and we said, we're going to do it on deterrence. What does deterrence mean? I think deterrence, we have a three-star general and a former senior person from the CIA asked me, what does deterrence mean? Whatever you need to do for the bad actors to not attack? It's not about there's a line of kinetics or not. Whatever you need to do for the bad actors to not attack? And so So using that as a framework is a bit of a very intentional moving target as well as what we think about what we're going to do in defense. But look, I think these companies are very important. They're doing incredible work.

And they are applying AI and all the innovations that have happened to this industry. It'll reduce taxpayer dollars on it. And I think if done right, it'll create conditions for better peace as well. So we're big believers in it. We have a whole strategy, Paul and Jeanette in particular in US and Europe. and then our team in India is now trying to replicate the same in India, are very deeply thinking about how to build in your income companies in the space. What are you most paying attention to in the realm of geopolitics and regulation?

It seems like everything you've described about GC is just bigger. It's more ambitious than a bottom-up seed stage focus type firm. And so you're going to just encounter these big issues as much as any investment firm. What most has your eye? Like, what are you watching most in terms of what's going to matter and drive outcomes and opportunities in the geopolitical and regulatory spheres? It is the question I think a lot about. We're multi-stage from. We're not just seed stage, but for us, it's very important that it's not just that we're funding these companies for long-term,

but that they actually have real societal impact, sort of going back to that alignment of profit and purpose. So I think in that arena, there's two things. Take AI. By the one thing I should say with geopolitics and AI, this is pure. cheek ambiguity. In the last 25 years I've been in the business, it's never been sort of more confusing as to what's going to happen. So I think in those times, you really have to lean into your values to sort of follow a true north. And I would say with AI, there's this regulation, non-regulation that sort of, I try to stay away from a lot of that. What we need is collaboration.

What we need is work with the governments because that's going to happen and make sure we accelerate our resiliency in AI. So we develop, and every nation should think this thing to this way. I'm saying we here in US, Jeanette will say that in Europe, and Nirij and Pri are India partners will say that about India. But like, how do we make sure that there is resiliency and we advance our technological capabilities so we're winning? I think we have to do that. We have to make sure we're investing in everything that does that. At the same time, when you apply it to society, we have to make sure it doesn't cause unintended consequences, like what happened with social media and whatnot.

So I don't think it's either or of regulation, nor regulation. The world's not black or white guys. You've got to embrace this ambiguity and understand how to work towards a solution that accomplishes both. So I think that's one thing I think about it and say is Europe trying to think about regulating too much and slowdown.

It's U.S. kind of not thinking about the right way. Every region's got their own issues in how they're approaching. So I think a lot about that. And then I think on the geopolitic side, the other thing that's really top of mind is what is this democratic supply chain going to look like in AI, in manufacturing, in defense, in energy, in health? And can we actually be custodians of innovation across these ecosystems that can pull that together? But you bubble both to those up? The thing that I think a lot about

as effectively a global CEO of a global firm is, will we be given the license to do that the right? I mean, can we build a culture that we really think what's best for US, what's best for Europe, was best for India, and our teams on the ground are really dedicated that mission, and how do we go execute that? Ken and I had a long conversation about our union yesterday on, like, how do we just make sure our culture and values are that that's the way we're going to build this firm, that's the way we're going to do our work, and our doors are open to do business with all these geographies that share our values. Are there other investing firms that have most inspired you? Our lead investor for the last 20-plus years has been Andy Golden. Andy just retired as the head of

the Princeton Endowment. He's a very close friend and mentor. And when I was leaving Boston to come to the valley, those last three years, I would take him down to the bar of the annual meeting and just bludgeon him with booze and ask him, how do I beat the firms that are these legendary firms? What do I have to do? And I think it was more hubris and I was young. And he would always say to me, play your own game, run your own race. I do think I actually took that to heart before I came to the Valley. I've not really paid attention to what other firms are doing in terms of their strategies. Again, as I said, there's such amazing people here. I learn a lot from Mark and Andreessen or Vinod and like some of these other people. They're legendary people that are just such

deep-rooted understanding and history of technology. I learn a lot from these folks. But when it comes to what we want to do, I just think we have to do our own thing. I'm heads down in that and I always encourage our team to just not worry about other people are doing. I think you have to believe in what you're doing and stay the course. in time with Andy from the endowment, but his name comes up a lot in the context of a question like this. What about the flip of the question, which is a lot of times you'll hear people ask limited partners like him, what makes a great GP? What's the inverse? From your GP perspective and investing perspective, what makes a fantastic limited partner capital provider investor?

I would tell you what Andy said about this because we just had a retirement party for him and he said G.C. was an experiment for him because there was a belief that in order to be a good steward of capital for an endowment, you have to be hands off and away from your managers and not engage and build relationships. And with G.C., he really invested in building a deep relationship, which, by the way, gave him the agency to help shape us. They've always on every key decision gone and gotten their advice. You usually get yelled at, hold my firm ground, and get my way, but like it's always the big daddy taking his belt out scenario before I go talk to him, you know? So I think that's one, which is can you actually build the same deep relationship like we

try to do with our founders? And so I think that's one. The thing I would say is, look, when you are a big endowment and you're creating a portfolio to de-risk yourself, you don't want a portfolio of portfolios. You want people that are really focused on the strategy that they're executing and not diversify. If they're backing us to be an early stage firm, the moment we come and say, hey, we all through our do goods, they're like, no, we already have growth firms. or if you say we want to do, I'm going to make this up because we don't do this real estate.

They're like, what are you talking about? We already have real estate. So I think that's where the misalignment happens. So as an entrepreneur, I always look at it and say, who are the LPs that want to believe in the strategy, believe in me and our team, and give us the agency? But in return, what we ask them to believe in is a framework, to say, here's our guiding principles which we're going to innovate on the platform. As long as we're agreed to that, as long as we adhere to that, back us. And don't question why are we scaling? Because we're scaling to just, help build the biggest companies, which is inevitably going to make us a high-performance firm if you do our job right. Some of our old LPs has stuck with us and sort of helped us,

got behind us in that like Princeton and others. And then we have new LPs that came in that also wanted to back us as some ways of entrepreneurs in that journey. And that's been really amazing. I can tell what it feels for our founders when we do that with them, to really have their back and give them the agency to take risk and increase their ambition and go bold. And fortunately, we have some LPs that also do that with us. Very cool. What do you think GC is the worst at? We lean on creativity over process all over the place. And so if you walk inside a GC, it's just going to feel like a broken startup and all kinds of shit breaking everywhere. Okay. So when you're in it and we have some investors that have a tremendous track record as having been in these elite disciplined firms, they're like, what is going on?

And I think you look back and say the numbers are actually pretty good, but it just feels messy. And I think you either just embrace that and embrace the chaos and the ambiguity because it breeds creativity and frankly ambition or it'll drive me nuts. And so I don't think G.C. is for everybody. And by the way, look at David and Joel, they were like from the beginning. People at G.C. were like that. I'm like that. And so I think that's probably the place where I think we can get better. In all of the things we've discussed, which is starting companies, backing companies, new forms of capital, industry transformation. There's so much going on inside the firm with a common mission. Which pieces of it get you the most personally juiced up? Is it dealmaking?

Is it some new understanding of a product or technology? What are the moments, the repeatable moments, that you find yourself most living for inside the business? Creation. I just love creating new stuff. We built a school with Helcon where our kids went. I've started in a climate policy shop 15 years ago. but very vibrant and active, started some businesses.

Even on the GCP platform, each one of these is a new business. So I think just bringing new things to life just gives me a lot of energy. That inevitably requires doing deals. I love doing deals. I am still the largest deplor of capital in the firm, every fund.

And I see my obligation to be that if I am not delivering elite returns, I should not run it. I strongly believe that. And I do think whoever will end up taking over from me, that's going to be a criteria as well, that you got to be in the business of creating value. You got to live it. That's what gives me the most energy. If we were writing Hamat's The Art of the Deal book, what would the key chapters be?

What would be the key components of your version of that book? It's very simple. I think I always start to focus on the win-win. I always think about what's best for the other person and can be structure something that also works for us. That's one. And I think the other is a lot of people get stuck in short-term optimizations, local maximizations, and I always think about the longer game. And I'm happy to give to move forward on things if I think the prize is big enough for all of us. So I think just having that mindset, which again comes to me, good relationships are based on mutual respect, transparency, trust. I think every deal needs to be based on that. In the spirit of that longer game, what have you learned from John and Patrick Collison at Stripe

about building in an infinite market, which is a nice term you used earlier. So much. I mean, I think they've had such a profound impact on me. I think they're relentless focus on talent, their deep belief on the journey and not the endgame. There's no end game for them. I think that's important. I asked Patrick yesterday, what's the second act? And he's like, Arc.

So I think I think this ambition to be like, we can do anything. So, you know, a stripe and arc to me is like this continuation of a journey because it's, you know, it's a big journey, him and Savannah. And I just think thinking and playing that long game, having confidence in what they're doing, there were so many other competitors. And if you think about the payments market, you had three companies that got started that were meaningful. One focused on big companies, Adi, and one focused on small existing businesses square and one focused on new businesses. They kind of stuck to the fact that, you know what, we just have to get every new business because the world just turns over in 20 years. then we're going to have everybody, right? And so I think that kind of a long-term mindset

and not being seduced by what else might be working and doing. I think they did that for a long time. And then they also had the patience. Remember at one point that all these products that they built but not launched, they're like, we don't want to be distracted. We want to really sort of be a singular focused company. So just the way they made these decisions, the patience, the relentless excellence, and sort of having maintained their boldness and their humility,

all through this, that's something I really aspire to. I think that's really important. And that's the kind of leader I want to be. That's the kind of leader I want everybody else to be. What's next? What are you thinking about that hasn't yet happened that you think might happen at G.C. And the G.C.

Cinematic Universe. So I think we have a really good plan around some of these industries like health, defense, manufacturing, from a transformation standpoint. We have a really good thesis around AI that were quietly executed. but at scale. We've to put a lot of capital towards this applied AI theme. I do think a lot about energy. As I mentioned, I created this organization, Advanced Energy Economy with Tom Steyer,

and a lot of it was focused on creating clean, affordable, secure energy. This was not a solving environmentalist, but really building advanced energy solutions. And I feel like technology industry has the ability to shape the energy industry because we represent a lot of new demand, because a lot of the compute work that's going to happen. And so can we step up to the occasion? Because once you have new demand, you can bring innovation into a sector. So I think a lot about how do we go about executing that where you're going to have to do some moonshots that are 25-year horizon projects.

They don't get done in the venture scale. And you're going to have to think about infrastructure that gets built. What is our role in enabling that? Because that's in some ways foundational to everything we do on top of it. So I'm thinking through that with a few people in the team as to like, can we, should we, when would we do something in that area? My friend David Senra has this phrase he loves, which is, I think it's from Churchill. And the phrase is always more audacity.

And that seems like a good description of DC under your leadership and kind of your plans for the future. It's been fascinating to hear about its evolution. When I interview people, I always ask the same traditional closing question. What is the kindest thing that anyone's ever done for you? Wow, that is an amazing question, the kindest thing. I'll have to give you a little detour first. My definition of happiness is this interplay between curiosity and generosity. I feel like you're happy if either you're learning and growing as a person or you're helping other people.

I do think that's like an amazing way to think about sort of what makes you happy. So when I did my first deal at G.C., it was a complete. called SmartLink. I just joined DC. It just happened to be a business and a bit of deal. And David called me and said, I want you to take a couple thousand bucks, go have a meal with who you want to go do it with. And I actually took my parents and then we went and celebrated, sort of doing my first sort of milestone thing. It wasn't the deal that I led, but I sort of helped do. And moments like that are just incredible where somebody is kind of celebrating in your success and helping you, you know, share that forward.

What a lovely little thing and moment. And knowing David, like I can just see it, I could see the conversation that is so cool. I love it. What a great story. Simple. Hamann, this has been a total pleasure. Thank you so much for your time. Awesome.

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