Lessons from Alfred Lin

Alfred Lin, a partner at Sequoia Capital and a key architect behind the success of companies like Zappos, Airbnb, and DoorDash, is a revered figure in Silicon Valley. His journey from an immigrant from Taiwan to a top-ranking venture capitalist has been marked by a distinct investment philosophy and a deep understanding of what it takes to build legendary companies.

On Company Culture and Leadership

Lin, heavily influenced by his time as COO and CFO of Zappos, is a staunch advocate for the power of a strong and intentional company culture.

On the foundation of culture: "You have to start with the leader of the company and the founder, and ask yourself: What are the values that are the most important to you?" [1]
On defining values: A helpful exercise is to think about the people you never enjoyed working with, identify the worst things about working with them, and do the opposite. [1]
On the purpose of culture: "A strong culture with core values can align people, provide stability and trust, and help retain the right employees." [2]
On hiring for cultural fit: "I think you can have the smartest engineer in the world, but if they don't believe the mission they are not going to pour their heart and soul into it." [1] It's easier to teach skills than to instill values. [1]
On the nature of culture: "There's no such thing as a good or bad culture, it's either a strong or weak culture. And a good culture for somebody else may not be a good culture for you." [3]
On servant leadership: "My leadership style is not complicated... My job is to make other people successful. I want others to have the best track record that they can. I fundamentally believe in servant leadership." [4]
On daily reinforcement: "Everybody wants to provide great customer service, every company wants to have great culture. What they fail to do is make it a daily habit." [1]
On cultural homogeneity: While diversity in background and beliefs is crucial, you want homogeneity in values. [3]
On Zappos' core value: "We are very specific that we wanted to deliver great customer service and it was going to be a 'wow' experience." [1]
On the evolution of a company: Founders must transition from building a product to building the company that builds the product. [3]

For Founders and Entrepreneurs

Lin's advice for founders is both pragmatic and aspirational, grounded in his extensive experience as both an operator and an investor.

On the founder's mindset: "The toughest job of a founder is holding two opposite ideas in your head and still function." [5]
On having a unique insight: "If you're starting something, I think you need to have a unique insight into what the world has gotten wrong and why you have a unique ability to solve that problem." [6]
On the entrepreneurial journey: "The entrepreneurial journey is long and hard. It is also lonely, because you can't necessarily share your struggles." [7]
On constant self-reinvention: "You're going to have to constantly re-create yourself as a founder. You are under no obligation to remain the same person." [4]
On passion and market size: Founders should have a passion for the business problem they are solving and then determine if the market is large enough, rather than starting with large markets and trying to find a passion. [6]
On the importance of "Why now?": Early-stage investing is predicated on investing in markets undergoing significant change. [8]
On optimism and vision: "Successful companies have really optimistic founders... Great companies have this great vision of the world that they paint." [6]
On building a sustainable company first: When asked for advice on getting a company sold, Lin's simple answer is to "build a real sustainable company first." [9]
On iteration: "As a startup you don't necessarily know [the right business model]. To that end, find one that's at least a big opportunity and try, iterate, try, iterate, etc." [9]
On competition: "The best companies never talk about the competition. They just talk about the fact that they're different than everybody else." [10]
On having your head in the clouds and feet on the ground: Lin quotes Richard Feynman's description of Albert Einstein, applying it to founders: "He has his head in the clouds, but his feet on the ground." [5]
On defensibility: "No startup is defensible on day one. Your job is to build something that the world has never seen before and then run as fast as possible in the right direction." [5]
On the power of compounding: "At Zappos, we preached the power of improving one percent every day... If you start off with $1 at the beginning of the year, and you can compound it one percent daily, you will have more than $37 at the end of the year." [11]
On making mistakes: "Making mistakes isn't the sin. The sin is not being willing to admit and correct those mistakes." [11]

On Investing and Venture Capital

As a partner at Sequoia, Lin's investment philosophy is centered on long-term partnerships and identifying outlier founders.

The goal at Sequoia: "We help the daring build legendary companies." [7]
What investors look for: All investors seek outlier founders, a delightful product, a massive market, and a disruptive business model. [12]
The Sequoia edge: "To have an edge, you have to play the game differently. I am much more focused on the founders' special characteristics, their novel and unique insights, the eureka moment of their founding story, and their lived experiences that creates empathy for the customer they will serve." [12]
On founder-market fit: "Basically, I am on the lookout for founder-market fit." [12]
The ultimate criterion: "After you strip through all that, there is only one criteria for me: would I love to work for the founders and help them reach their and their company's full potential?" [12]
On being partners, not just investors: "We don't buy low, we don't buy and then we don't sell high. Our job is to become partners with the founders." [13]
On long-term obsession: "A key part of our culture is to be extremely obsessed with the long term. What do we think we can get accomplished in a decade?" [4]
On holding ideas in tension: Sequoia's culture values holding opposing ideas in tension, such as individual performance and teamwork, or being supportive and demanding at the same time. [14]
On market timing: "To be too early is just as bad as being too late." [6]
On the cost of missing opportunities: "The cost of missing a spectacular opportunity is far greater than the cost of losing money on an opportunity that didn't work out." [11]
On long-term holdings: "We think about whether the company has brighter prospects in the future than they do today. And if that's the case, then we continue to hold." [8][15]
On global reach: "Talent is evenly distributed and opportunity is not... we're sort of expanding around the world because we want to be a global partnership." [15]
On the investment pace: Each partner at Sequoia's early-stage team makes only one or two seed or venture investments a year to ensure they can partner closely with founders. [8]
On the nature of the business: "We work in a business where 30% of the time we strike out, so it's going to happen." [16]
On building enduring franchises: "When we invest, we make it clear to the founder(s), we are not interesting in creating a nice lifestyle business. We are looking to build an independent enduring franchise on our way to building a category king." [7]

On Business and Strategy

Lin's broader views on business reflect a focus on the customer and the fundamental drivers of success.

On customer experience: "I think if companies start reinventing themselves and focus on the customer experience more, they will win out in the end." [17]
On the global nature of business: "Businesses are not just local or even national anymore - good ideas are immediately global." [17]
On enduring companies: "It's harder than ever to build an enduring company." [17]
On competition from day one: "As soon as a product strikes a nerve with customers, competitors emerge globally because the costs to start are so low." [17]
On the importance of being different: "You can't just be better, you have to be different too. You don't want to compete with someone bigger than you head on because they have more money, they have more people, they have more history." [18]
On the power of technology: Every company will need a strategy around AI and ML, just as they did with the internet, mobile, and the cloud. [16]
On market opportunities: "The market opportunities are much larger than we've ever imagined or seen." [17]
On the shift in AI: Lin highlights the shift from mere automation to enhancing creativity and customer experiences through AI. [5]
On the future of discovery: "AI assistants are becoming the new front door to every business. If you're not showing up in those conversations, you're invisible to billions of consumers." [19]
On the importance of inputs: "When you want to accomplish something, it's about the inputs. It's about the process by which you go about getting the outputs." [18]
On the long and short view of time: A friend shared the adage, "the days are long, but the years are short," which Lin applies to focusing on both the immediate moments and long-term milestones. [11]

Learn more:

Lessons from Alfred Lin

On Company Culture and Leadership

For Founders and Entrepreneurs

On Investing and Venture Capital

On Business and Strategy

Written by Antoine Buteau

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