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- [00:01]
Francine Lacqua
Introducing B of A Rewards a new way to reward your every ambition. It all starts with a Bank of America checking account and grows from there. You get cash back deals on brands
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Mamun Hamid
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Francine Lacqua
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- [00:22]
Mamun Hamid
Bank of America Open or enroll your
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Francine Lacqua
account@bankofamerica.com bfarewards bank of America Corporation all rights reserved.
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Barry Ritholtz
The thing about AI for business, it
- [00:33]
Mamun Hamid
may not automatically fit the way your business works.
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Barry Ritholtz
At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [00:59]
Francine Lacqua
IBM Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make healthcare work as one for everyone. Learn more@business.optum.com Bloomberg Audio Studios podcasts Radio
- [01:36]
Barry Ritholtz
News this week on the podcast another banger, Mamun Hamid is partner at Kleiner Perkins, where he's been focusing on early stage AI investments for nine years. He's got a fascinating background, early investor in Slack, Figma, glean box and etc. Previously he co founded Social Capital with Chamath and worked for a number of other venture firms, including US Venture Partners. I thought this conversation was fascinating and I think you will also, with no further ado, my conversation with Kleiner Perkins. Mamun Hamid. Mamun Hamid, welcome to Bloomberg.
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Mamun Hamid
Thank you so much for having me, Barry.
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Barry Ritholtz
So I'm fascinated by your background. You grow up in Frankfurt, Germany. You come to the US to go to college at Purdue, Bachelor's in electrical and computer engineering, master's at Stanford, MBA from Harvard. What was the original career plan?
- [02:49]
Mamun Hamid
So let's go back to I think 1986. Do you remember the Challenger Explosion?
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Barry Ritholtz
Sure.
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Mamun Hamid
Every kid growing up remember that. And one of my teachers was actually supposed to go on the space shuttle because there's a teacher.
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Barry Ritholtz
That's right, Christy that's right, yeah.
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Mamun Hamid
And everyone, every kid got fascinated by, especially if you had a teacher going to space. So followed the whole journey of the Challenger space shuttle and the teachers and all that. But with that also came this desire to learn more about space. And I instantly wanted to become an astronaut, naturally. I think I was 7 or 8 years old and as I thought about high school, liking science and math, thinking about where to go to college, and I was, as you mentioned, I was in Frankfurt, Germany growing up and one of my uncles, he'd given me this list of colleges, the top 10 engineering schools, and I just applied to all 10 and one of them happened to be Purdue, where actually to this day the most number of astronauts have graduated from.
- [04:00]
Barry Ritholtz
Really? Oh, that's fascinating.
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Mamun Hamid
Yeah. So my path was aeronautical engineering and trying to figure out a way to get into space. I've yet to do that, but. But that is what led me down the path of applying to Purdue in the first place and the association with space and NASA and then actually going from something so massive and big space to something so small, chips and semiconductors
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Barry Ritholtz
and transistors, which, which are enabling space. So there's definitely a connection. Is it true that when you went to business school you were thinking about already being a venture capitalist?
- [04:36]
Mamun Hamid
I actually, when I applied to business school, so I'd worked for a good six years after undergrad, so studied electrical engineering, computer engineering, and that naturally made me think about a career in Silicon Valley designing chips, which is what I did for the first six years of my career working in the semiconductor industry. But what really got pretty interesting for me was the notion of startups and founding companies and how these so called venture capitalists were behind some of the most iconic companies that I was coming across. And so I actually wanted to get into venture capital and that's actually why I applied to business school and specifically only applied to one business school, Harvard, because I naively thought that if you wanted to get into venture capital, you had to go to Harvard or Stanford. And I'd already gone to Stanford for grad school, so. Okay, well it'd be nice to get
- [05:25]
Barry Ritholtz
a change of scenery, just round it
- [05:27]
Mamun Hamid
out a little and move to Boston. Yeah.
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Barry Ritholtz
Give up the nice weather.
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Mamun Hamid
Yeah.
- [05:31]
Barry Ritholtz
And so you started in between college and grad school. You spent how many years you were at Xilinx? Years.
- [05:40]
Mamun Hamid
Yeah. So the story actually goes is I was 19 when I graduated from college, so from Purdue. And I thought, okay, the best thing for a young kid is to continue to go to grad school. So applied to grad school and ended up getting in at Stanford. But I also got a number of job offers. This is 1997, the.com boom. I'm thinking it's a bit like this time. Where should you opt out of the job market and get like extremely valuable experience or continue on with grad school? So I did the best of both worlds, which is like I went to Stanford, took a few classes every quarter, and then worked full time at Xilinx. And this is back in 1997, we're talking about sort of the middle of the dot com boom.
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Barry Ritholtz
Yeah, really, really interesting. You're known today as someone who thinks about software generally and enterprise software in particular. That seems like an unusual transition from semiconductors. What led to that shift? What changed your thinking?
- [06:46]
Mamun Hamid
Great question, Barry. So in 2005, when I got into venture capital, my full intent was I would like to learn how to invest in great semiconductor companies or founders who build semiconductor companies of the future. And it turns out after the dot com bust there was not a lot of investment in infrastructure, so data centers and networking and switching and semiconductors broadly. And so I realized pretty early on that hey, like, if I want to build a career in investing, you kind of have to go where the puck is going to and so skate to where the puck is going. And I sort of skated towards Web 2.0 and software because I felt like also in my own firm at US Venture Partners, where I started my venture capital career, where I was an associate, I was hired to go help my, the partners there evaluate semiconductor opportunities. And that's actually why I went there because there are some legendary semiconductor investors who happened to be there. And some of my mentors even today were the folks running the firm there. But I realized that all my friends in 2005 were moving to Web 2.0, Internet. This is the beginning of Facebook, which happened to be started at Harvard when I was there. So you're seeing all these, the people, my cohorts age group moving into software and web and I felt like I had to sort of move along with that. And my day job was evaluating semiconductor businesses. But in the, in the evenings I was in San Francisco. I was going to, you know, the web 2.0 parties and meeting all the founders starting software businesses. And so I slowly started to just, you know, as a side project. The side project became the main project which, which was to move from semis to software and Internet stuff. And. But in the back of my mind, I always remained a semiconductor guy. And you know, semis are Back now,
- [08:47]
Barry Ritholtz
as you know and I seems to be the application of both semis and software. So you're well prepared. We'll talk about AI in a bit. I want to stay in the 2000, when you were at US VP, you had early exposure to companies like Box and Yammer. I don't really remember Yammer. I remember Box. Big enterprise software deals. What did you learn from that experience? What have you brought forward with you from that era?
- [09:17]
Mamun Hamid
Yeah, so Box happened to be my first investment at usvp, where I joined the board. It was an early stage company, was a few hundred k of revenue. Two very young founders, Dylan and Aaron, 20 and 21 years old, dropped out of college, sort of like the prototypical founder, the archetype of a young founder. And they were going after storing your files in the cloud and sharing them inside of your company.
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Barry Ritholtz
Let me stop you for a second because I think anybody under 40 is perplexed by what you just said. I recall like late 90s, early 2000s, if I'm either at home or at work or on a laptop or at the beach house, whatever I needed was always somewhere else. And the beauty of, of early blogging software is I could upload files, I could upload charts, I could upload images. And that was the closest thing to the cloud. It just didn't exist then. If you wanted to have something that you can access anywhere you had an Internet connection literally did not exist.
- [10:26]
Mamun Hamid
Yeah. So maybe I'll. If I go back to exactly the point I made in my head is that if there is one application that moves into the cloud first it's going to be file sharing. If you recall. I remember this when I was on my Windows computer in the 80s and 90s. What's one of the applications we all used a lot of? Do you know the Windows File Explorer we're currently clicking in and trying to find the file something.
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Barry Ritholtz
Or searching for it.
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Mamun Hamid
Searching for it or placing it in a folder very nicely.
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Barry Ritholtz
Like the name you used to have to put on a file was important because if you couldn't remember the name, it wasn't like here's a phrase that's somewhere in this document, go find it. If you didn't remember exactly where that was nested or what name you put. Good luck.
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Mamun Hamid
Good luck. Right. And so as the world moved from the desktop to the browser. And so by 2006, 7 we all are using at this point, like Firefox, Mozilla, Chrome's not even existent.
- [11:27]
Barry Ritholtz
Right. It was Internet Explorer until Chrome came along.
- [11:29]
Mamun Hamid
Exactly Right. So my thesis was, okay, one of the applications for business that will move into the browser, so software as a service will be file sharing and collaboration. And so because precisely to your point, like the file that you always needed was somewhere else. And this made so much sense to me. And so at the time in 2007, when I invested in Box, there were probably half a dozen, two dozen. I don't know. There's many of these companies doing file sharing, but it was mostly for consumers, mostly for like your Dropbox. Dropbox was in that same era, but there was like X File and Elephant Drive. I mean, I remember these. As an associate, you're know when you're suggesting an investment, you're going to do a lot of diligence. I remember like the laundry list of companies I looked at. There were probably like 40 companies that were doing something similar, but most of them were dedicated towards sort of consumer use cases, photos, music, stuff like that.
- [12:26]
Barry Ritholtz
Napster era was right around then.
- [12:28]
Mamun Hamid
Exactly, exactly. And so hypothesis was, hey, like this stuff will be relevant to large companies who will want to have file sharing and collaboration for their companies. And Box actually pivoted from being a consumer company to being an enterprise company. And that's when I got pretty excited because it lined up with sort of this view that I had that large companies will move from file file servers in their data centers or wherever in their, in their buildings into files that now reside in the cloud.
- [12:59]
Barry Ritholtz
And they're willing to pay for it.
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Mamun Hamid
They're willing to pay for it.
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Barry Ritholtz
Unlike back then. Anyway, consumers were so reluctant. Exactly. Pay for anything. So it's interesting because you've had a lot of early investment success with a variety of companies. Is it easy or difficult to learn from past winners? Is every startup different or do you start a little pattern recognition that gives you some clues, hey, these guys are on to something.
- [13:28]
Mamun Hamid
Yeah, I think there's definitely some, some compounding of learning from early wins and losses. You brought up Box. And so Box first investment got to spend a lot of time with the founders. Got to learn the business with the founders, actually, because they were young. I was young. I was in my 20s when I joined the board. And from that experience I learned a lot about what it meant to actually, bottoms up, sell software into large companies. Which led me actually to this investment in Yammer, which many folks may not remember, but it was an enterprise social network circa 2010, kind of like Twitter meets Facebook, but for your company. Microsoft ended up acquiring it in 2012 and is part of the Microsoft suite now. And Part of teams and all that. But the experience of this bottoms up adoption, you looked at Yammer and a lot of large companies wanted to have a enterprise social network or somewhere where kind of like a town hall, a messaging platform, you share a file, people comment on it like people do it on Twitter or Facebook. And that was taking some of the learnings from the web era and the social era and applying it to the business world. And so at Yammer, I learned a lot. It was a quick journey, but nevertheless like it. There was a level of engagement and monetization that was good. And a few years later, maybe even like a year later, I came across another company, Slack.
- [15:07]
Barry Ritholtz
Slack, yeah.
- [15:08]
Mamun Hamid
And it was similar now, it was true messaging. Actually on my way over here, I was walking through and I saw a bunch of colleagues on Slack, which makes me really happy. And Slack is used broadly across the globe to this day in 2026. But the lessons learned in that 201011 era led to the investment in Slack in 2014 for me when it was a 10 person company. And so back to the point around compounding of learning box led to Yammer, Yammer led to Slack. And since Slack, there's been others, but there certainly is some pattern recognition around products that are working.
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Barry Ritholtz
And then in 2011, you co found social capital with Chamath, very famous model of social capital, which is how can we address many of the social ills that are hurting the country through the intelligent use of startups, technology, et cetera. Was this a reinvention of venture capital or just a new set of tools within a partnership that, you know, was kind of novel for its era?
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Mamun Hamid
It was novel for its era because we decided that we would go after education, health care and finance, you know, three of the largest parts of society. And how do we address inequities in those areas with our investments and believing that technology has the ability to democratize access to healthcare, education, financial services. And that's largely played out over the last 15 years, but we just thought that there would be a ton of opportunity. As venture capitalists, we're seeking out opportunity and we thought that going after large pockets of gdp, you'd identify really exciting opportunities. Turns out my interests remained in enterprise software and I did spend a lot of my time in enterprise software even, even when we started social capital.
- [17:16]
Barry Ritholtz
So 2017, you leave social capital for Kleiner Perkins, a firm that has long been iconic. The laundry list of companies Kleiner has backed, Google, Cisco, were they early in Apple also?
- [17:30]
Mamun Hamid
I think they were Google, Amazon, Sun Microsystems, Genentech Intuit, Unbelievable Tandem, if you remember. The list of greats is amazing.
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Barry Ritholtz
So they're an iconic company but they're not the dominant force they once were. When you joined, what made that opportunity so attractive?
- [17:52]
Mamun Hamid
Yeah, so look, I actually long admired Kleiner Perkins, had an extreme reverence I would call it for Kleiner Perkins going back to my days moving to Silicon Valley. I mentioned I moved to Silicon Valley in 1997. I worked for this company, Xilinx. And if you think about my first few weeks on the job, I'm in my cubicle, I've got a Sun Microsystems workstation which is actually a dream because in college we had to share 20 of them amongst like 2,000 of us. And now I have my own sunspark. I think it was a spark 20. And guess what, there's the Netscape browser and I'm buying books for grad school on Amazon. And by the way, there's a couple of guys down the hallway at Stanford who are starting this company called Google and I'm starting to use that search engine called Google. The one commonality amongst Xilinx, Sun, Netscape, Google and Amazon is that Kleiner Perkins had led the Series A, so the first institutional investor for all five of those companies. So as a young guy I had this, developed this extreme reverence for Kleiner Perkins because of the investments they had made in these, these really like history making companies. And so which is also what led me to think about venture capital as a career as a young engineer is like, you know, I want to be like those guys, those guys are investing in all the coolest companies that I'm using as a 19 year old here. And, and that's really what got me excited about venture capital. And actually one of the people behind many of those investments, Sun, Netscape, Google and Amazon was my partner John Doerr. And so for me there was this extreme reverence for John Doerr and his career and trying to emulate that. And he was an electrical engineer from Rice, went to Harvard Business school, worked at Intel Corporation, then came to Perkins out of business school. And so it had a deep meaning to me. And actually, truth be told, I actually in my business school essay, which I have still wrote that I wanted to go work at Kleiner Perkins. This is in 2003 when I wrote the essay. 2002 I wrote the essay. And then when I tried to apply for a job in 2005 coming out of business school, I didn't get very far, but I did end up there in 2017.
- [20:16]
Barry Ritholtz
So you know eventually if you keep plugging away, you get to where you want to go. That's great. Coming up, we continue our conversation with Mamoon Hamid Kleiner Perkins managing member, talking about the reboot of the firm. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.
- [20:37]
Francine Lacqua
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- [20:40]
Barry Ritholtz
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- [20:46]
Francine Lacqua
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- [20:52]
Barry Ritholtz
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- [20:57]
Francine Lacqua
Subscribe to Bloomberg Daybreak for a precise, thoughtful take on the stories that matter.
- [21:01]
Mamun Hamid
Listen to Bloomberg Daybreak each morning on
- [21:04]
Barry Ritholtz
Apple, Spotify, or anywhere you listen. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Mamun Hamid. He is managing member and general partner at Kleiner Perkins, where he is pivoting the firm towards early investors in software and artificial intelligence and automation. So you co led the refounding of Kleiner Perkins In 2017, 2018, the firm was refocused on Early Stage Series A investing. Tell us what was behind the thought process. What made you say we don't want to be bigger, we want to be smaller and more focused?
- [21:49]
Mamun Hamid
Yeah. If I look back at the decades of being probably the most successful venture capital firm throughout the 70s, 80s, 90s, and even the early 2000s, the one thing that defined Kleiner Perkins was it was a small partnership of 7ish or so partners who sat around a table in Menlo park meeting companies and having healthy discourse and debate about what companies to invest in and what the future of technology would bring to the world. And it was defined really by a small group of partners that were in many cases technical. They were operators. They had a passion for technology and its impact on humanity. And that was sort of what I kept coming back to, is that that was what defined Kleiner's decades of success. And we went back to the future in 2017 and 18 to that model. And today our partnership is six partners, and then we have three more investment professionals. So we're, we're a very small, nimble team. So we have two funds and this team invests from both pools of capital.
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Barry Ritholtz
So Early Stage does that seed round or is it a little more developed?
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Mamun Hamid
Yeah. So the Early Stage fund is seed Series A mostly, and maybe some B's. And then the growth fund is BC's all the way to. We invested in the last anthropic round and you know, a $900 billion valuation, which is rare for special companies but, but it has the ability to invest across even to the pre ipo.
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Barry Ritholtz
And is it a coincidence that the growth fund is two and a half times the size of the seed fund at that point? These companies are bigger, require a bigger check, or is that just happenstance?
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Mamun Hamid
I think our funds are sized based on the opportunity set in front of us. Our early stage funds have been almost exactly 35 companies for the last 15 years. So 35 companies per fund, which we think about is the right number of shots on goal for an early stage fund to return. Multiples on it.
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Barry Ritholtz
25 to 30 million per.
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Mamun Hamid
Exactly, exactly. So it starts out with maybe in some cases a $5 million check and the subsequent checks is another 15, 20. Or it could be first check is 30 and then with pro rata you're investing let's say up to $40 million in a company and then your growth fund is doubling down, investing a lot more in those companies.
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Barry Ritholtz
Huh. Really, really kind of interesting. So the focus is artificial intelligence startups across software, healthcare, transportation and autonomy industries. So let's unpack that because I'm hearing a little overlap with each of your prior venture experiences. Tell us why those four areas are so attractive.
- [25:05]
Mamun Hamid
Yeah, so this is a truly once in a lifetime revolution that we're going through with AI and the number of exciting companies, people that we're seeing right now is at an all time high. The whole world in some ways is being refactored with AI and this is just the very beginning. And so I would say that all parts of the economy, even beyond those four areas, it is like I mentioned earlier, health care, financial services, it is all sorts of knowledge work. It is going to be all sorts of physical automation in terms of robotics, even space, even defense areas, drug discovery, materials discovery. I think it is all fair game at this point in terms of where the exciting pockets of innovation are. Just because there has never been a tailwind like this that really allows all parts of the world to be refactored based on the biggest technological revolution ever.
- [26:30]
Barry Ritholtz
So I'm glad you described it that way because I keep hearing people compare AI to the Internet and that seems too contained, too timid. I wonder if you agree with the thought that the only thing remotely comparable to this is the industrial revolution, which centuries later we're still dealing with the impact of.
- [26:54]
Mamun Hamid
I absolutely agree with you, Barry. It is like the Industrial revolution. It's like the railroads. It's like the printing press. It is, it is that. It's not the Internet.
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Barry Ritholtz
That's really interesting because when I think Internet, the first thing you think of is, oh, this is a bubble and this is going to collapse. But you mentioned you're an investor in Anthropic. These are forget not profitable companies. These are companies with giant revenue streams already. They're barely a few years old. How big can this sector get? Is this going to take over every corner of the economy?
- [27:31]
Mamun Hamid
Yeah, let's talk about that. I think that's the real conversation and the more the very exciting conversation that one can have about this topic is, and I start at a very high level, which is the GDP of the world today. It's, it's about $120 trillion. And about half of that is labor, the labor component of it. So roughly $60 trillion. And of that 60 trillion, roughly 60% or so is white collar. 50, 60 somewhere. So that's anywhere from 30, $35 trillion. And if you look at tokens and what the frontier model companies provide, it is units of labor. We're already seeing how those units of labor are being utilized in computer science. So software development, in law, in medicine, in drug discovery. These are little agents and buddies that we as humans have now to help us do more with our intellect. And the way I see it is that, you know, we're talking about trillions of dollars that are opening up for these companies that exist. And exhibit A is a company like Anthropic, which is publicly stated has gone from 0 to 45 billion revenue run rate.
- [29:01]
Barry Ritholtz
That's unbelievable.
- [29:02]
Mamun Hamid
In a matter of less than three years. Okay, and that is likely going to double. And you know, and the company started this year, I believe at 20. It has already doubled, more than doubled in the short year that we've been in so far. And so these numbers are astounding. Not only because these companies are selling software or technology, they're selling units of labor. And the labor markets, as we all know, are the biggest component, as I just mentioned earlier, of the world's gdp. We're talking about trillions of opportunity, dollars of opportunity. And that's what excites us so much about this time, is that it's not just about selling tools and software that we've been accustomed to selling to IT departments, it's selling actual labor to companies, to corporations, to even to consumers who are using AI in their personal lives.
- [30:02]
Barry Ritholtz
So let's talk a little bit about that. The fear I keep hearing is everybody's going to lose their job. It's a very Malthusian argument that this technology is going to replace labor the way the steam engine did. I'm getting a sense from the data and from other analysts like Torsten Slok that this isn't a replacement for white collar labor, it's an enhancement or at least that that's the argument. Give us, give us your perspective on that.
- [30:33]
Mamun Hamid
I actually fully agree with that point of view that you have. It is, it's, it's like you know, getting email. I mean, I think the fact that the we got the computer didn't, you know, the people were using the typewriter, started using the computer and started doing other types of jobs. And even in the steam engine era or the industrial revolution, we found ways to repurpose jobs or people and their skills. I don't think humans are going out of style. I don't think the world is going to be largely unemployed on UBI because we are going to displace all this work and all these people with AI. I think it's the extreme where the mind goes to, but that's just not the reality. And that sort of bears itself in the numbers that we see, you know, in record low unemployment rates. And actually we need more labor, more people than we ever have and so more skilled labor.
- [31:32]
Barry Ritholtz
We are seeing a decrease in job availability for kids right out of college for unskilled labor. If anything, is this likely to force more people to get more technical to up their skill set?
- [31:49]
Mamun Hamid
I actually do believe that it is not like a, oh, you know, you don't need to be a software developer and study CS anymore because these software jobs are going away. It is like now the job of a software engineer is to manage a whole host of agents and make them do work for them and be the brains behind the operation. Think of it as like you have all these little agents and common little employees who are working on your behalf. And so yeah, that is like the higher level thinking and the things that actually, you know, like when we go to school we think about how to problem solve and you know, if we're solving a math problem, it's hard. We think about many different ways to solve it. And the same way it's how am I going to use AI to help me solve problems? And that's the way I think we all, and I would say, you know, we have four kids, believe it or not, I'm telling them, go into math, science and actually art. Have spectral diversity in your learning because all the skills that mattered in the past. Solving math problems with pen and paper will really matter in the future.
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Barry Ritholtz
So let's bring this back to how you think about the opportunity set that's out there at Kleiner Perkins. You do structured reviews of every interesting deal that was passed on. I'm kind of fascinated by, by that. I know a lot of VCs kind of hold their misses as a badge of honor. Some, some firms posted on their website, what, what do you think of what's driving the thought process around revisiting either missed deals or mistakes or what have you? What does the process teach you?
- [33:35]
Mamun Hamid
Yeah, so actually one of the things that I did when I got to Kleiner Perkins in 2017 was that we would look every week at the that week's Series A's that got done by our peer firms, about 30, 40 firms, and whether we had seen the company that it was invested in or not. And a simple heuristic of like, are we seeing the things that matter? Because they seem to matter because our peer firms invested in those companies. And so we've been doing this now for the last nine years. And initially our goal was like, we should see 60% and seeing means you met the company. And for us that hovers around now 70% or so. You don't want it to be 100% because then you're just, that's the game you're playing. We just see everything. And you don't want to be 20% because you're not seeing enough. But we think 70% is a good number and we look at the ones okay, we saw, if we saw 70% of the good stuff, let's say, let's call it, was it 30% that we didn't see even better? Or if we saw the 70%, do we pass on the good stuff and do the bad stuff? And so we go through that exercise quite frequently. We just had an off site a few weeks ago and we go through again. We pour salt on the wounds and say, okay, we saw these companies and we passed. Why do you pass at that round, that early stage round? And just to remind ourselves why we need to adjust the way we do things. I'll give you an example. The Anthropic, which is an incredible company, Series A was not a traditional one. SBF from FTX led the Series A famously.
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Barry Ritholtz
We know how that worked out.
- [35:25]
Mamun Hamid
We do know how that worked out. It was an amazing investment and very prescient on his behalf. I forget how much it would be worth today, but it would be Worth a lot. But the Series B was a sort of non consensus, non obvious round and we actually met with the founders, but we met them over Zoom and we played with the product. But you don't get the same visceral feeling about a company and the founders and their ambitions and aspirations and what they're trying to do with their companies. And so what a miss. Right. And I think that round got done in 4 billion valuation or something, which not a small valuation, but still compared to today. Compared to today. And so, and we looked a lot of our passes that we were good companies and many times we just didn't meet them in person. So the pandemic era bred some really bad habits of, you know, you did a first meeting over Zoom. And so, and I looked at my own investments and the last 20 investments that I've done, the first meeting was always in person, the first meeting. So I've driven my whole calendar to like, I just don't want to do any meetings on Zoom anymore. I want to meet people in person. And if it's worth a 30 minute zoom, it should be worth a 30, 30 minute in person meeting. And I'm glad we get to do this in person because, you know, big difference. It wouldn't be the same thing if I was on a Zoom screen doing this thing with you.
- [37:00]
Barry Ritholtz
That's exactly right. What about the reverse of that? If you're analyzing your misses, do you ever review your hits, your wins and saying, why did we get this right? What can we take forward from this?
- [37:15]
Mamun Hamid
That's a great question. I think we just assume what we do look at, okay, is are the ones that we did, the portfolio that we built, is it better than the portfolio that we missed? And it's actually a toss up. It's that, you know, huh.
- [37:33]
Barry Ritholtz
That's really interesting in the sense that
- [37:35]
Mamun Hamid
we didn't even see it because it would be bad if we didn't see companies. And that basket of companies was way better than the companies we saw. And we try to be very intellectually honest about like, are we seeing the right stuff or the wrong stuff? And it turns out we're seeing, it's a, it's a toss up actually.
- [37:57]
Barry Ritholtz
Right. The reason I asked that question is you learn in the public markets, you learn more from your misses than your wins. Because it's very hard to tell the difference between skill and luck in the public markets. I'm curious if the same sort of thing applies to venture.
- [38:16]
Mamun Hamid
I think it does. I think you, you, you really beat yourself up on the misses and the ones that you do, you're just like, okay, check, you know it happened and you don't maybe don't think about it as much as the ones you missed.
- [38:29]
Barry Ritholtz
Huh? Really, really interesting. Coming up, we continue our conversation with Mamoon Hamid, partner at Kleiner Perkins, discussing the state of venture investing today. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.
- [38:46]
Francine Lacqua
The Bloomberg Sustainable Business Summit returns to Singapore on July 22. Our 5th annual Asia Pacific Summit will explore how business and finance leaders are shaping the next phase of globalization by strengthening resilience and driving a multi speed energy transition across Asia's diverse markets. Join us for solutions driven discussions and networking opportunities. Thank you to our Summit advisor, Bangkok bank. Learn more at bloomberglive.com SBS-singapore I'm Barry Ritholtz.
- [39:18]
Barry Ritholtz
You're listening to Masters in Business on Bloomberg Radio. Mamun Hamid is my extra special guest. He is a partner at Kleiner Perkins where he is driving the firm's focus on early stage investments in artificial intelligence and related technology. So let's talk a little bit about the state of venture investing today. When you meet a founder for the first time, preferably in person, what are you looking for? What are you trying to spot that isn't in the pitch deck they sent earlier? How do you separate intensity from delusion? What are you trying to identify in that first meeting?
- [40:02]
Mamun Hamid
Yeah, it is the most interesting time in my venture career and for obvious reasons, this AI revolution, the tailwinds that AI brings to companies that are being started today is unlike anything we've seen before. So the quality of ideas is at an all time high and I would say the quality of the people is also at an all time high. And those two forces combined suggest that there's a lot of really high quality ideas and founders that we're seeing. And so I would say the volume is because of that at an all time high. And so to your question of what are we looking for, I think obviously everything today is AI enabled AI tailwinds and venture capital isn't venture capital unless there's a strong tailwind of something. And so this makes it such an exciting time because there's such a strong tailwind and the pace at which the tailwinds are like the winds are so strong in some ways because the frontier model companies are providing better and better models which allow companies that build on these models to provide strong value proposition. Take for example a company like Harvey, which is AI for legal, is in most of the Am Law 1/ hundreds sells to large enterprises and Fortune 100 type companies and becoming sort of the de facto way that legal law firms and legal departments are using AI inside of their companies and inside of law firms. And yes, they have a lot of secret sauce on top of what the model companies. But at the same time they get better and better as these models get better and better. And this is a category that just got created in the last few years and there are numerous examples like it in every sector of society. And just take a step back. When we first saw, I don't know what your reaction was to ChatGPT when you first saw it, but for me it was the same reaction I had when I first got to use a browser, Internet browser. To me that that Netscape moment was equivalent to the ChatGPT moment. And we started to think about what are the second order effect, what are the things that come from here, from ChatGPT, from LLMs. And it was, we thought about like the labor pyramid. Think about knowledge work. And we went straight to okay, what are the most highly skilled, highly paid jobs in the, in the country. And if you actually look at the top 20 list of jobs dollars made by job, it's some form of engineer, doctor or lawyer. And so what we did at Kleiner Perkins was to invest in companies that do AI for legal, AI for software development, AI for medicine or. And so we invested in companies like Harvey Windsurf which got acquired by Google. We invested in a company called Ambience Open Evidence to go after that labor pyramid. Top of the pyramid, top of the pyramid. And back to your point, it's like an enhancement to those people. It was supposed to be like a copilot, which it is, and in some
- [43:34]
Barry Ritholtz
cases registered trademark Microsoft Corporation.
- [43:37]
Mamun Hamid
Yeah, exactly, Copilot, exactly. And in some cases it's become an autonomous agent for those people. So software developers run agents to do work for them now. And so we worked our way down the labor pyramid a bit and we went down what's the next level? So think of it like if doctors, lawyers, engineers are in the 200k plus a year pay, then what's one below that? You know, like you've got financial analysts, salespeople, nurses. And so then we invested in the next class of companies. So Rogo, which is AI for finance, Hippocratic, which is an agentic nursing platform, Nooks and Revo, which are helping salespeople be co pilots for their work. And so we've sort of worked our way down the labor pyramid. And if you think about the pyramid. Guess what's at the bottom of the pyramid? It's physical labor. It is lowest paid, low scale in some and eventually robotics will get there and hopefully do a lot of the backbreaking work that nobody should be doing. And I think eventually that is sort of the way also goes along with the timeline of the way we're thinking about these things is that you start with the highly skilled, highly paid and eventually over the next decade we get down to the sort of the lowest scale, lowest, lowest paid work.
- [45:01]
Barry Ritholtz
So, so you mentioned the tailwind behind AI. What does that do to valuations. How do you underwrite startups in a market where even the half decent companies look kind of expensive?
- [45:16]
Mamun Hamid
Great question. So when you have companies have gone from zero to a trillion in value, you know, in the last three to four years and when you're a founder, what do you do? You point to that that's what I can be, I can get to a trillion dollars because I'm going after really large problems. And we love that, that ambition. And what do people do then? Is it. Well, you know, if the probability of a, of a $1 trillion outcome is 1% and you do all the other 99% of probabilities for the rest of the numbers, you've got yourself to a expected value of $10 billion or more. least that's the minimum. Right. You do the 1% of 1 trillion is 10 billion and you add up all the other probabilities, it's probably like 30, 40, 50 billion. And so if you're looking at a series A company where the ambition is, is tremendous, the valuation may just be you're raising 100 million at a billion dollar valuation for two guys out the gate. And those are real examples. And I think we've got a bit of this pointing at the large outcome and if it's paired with smart people, ambitious idea, it has that kind of potential. But the reality is there's usually one or two of those, the real outliers that are mag seven scale and just the, you know, just gravity in itself doesn't allow for, you know, the world can't have, you know, 100 trillion dollar companies.
- [46:59]
Barry Ritholtz
Plus if it's a trillion dollar total addressable market, it's going to attract a lot of competition, a lot of other startups, perhaps more than if you're focusing on a smaller niche. Although even the cloud storage was. You mentioned 40 companies early days. There's got to be tens of thousands of companies going for each of these segments in AI.
- [47:24]
Mamun Hamid
Yeah. And there Are and I think the hard part of the work that we have is, is identifying what we think will be the leading company. Because in technology generally speaking, the leading company gets most of the market cap. Which is if you look at the
- [47:40]
Barry Ritholtz
Mag 7 winner take all.
- [47:42]
Mamun Hamid
Winner take most. Right?
- [47:43]
Barry Ritholtz
Right.
- [47:43]
Mamun Hamid
Like take 90% of the market Nvidia 95% of all GPU spend. You know, take Google Alphabet multiple businesses or take a Tesla, take a meta own social. Right. So winner takes most in technology.
- [48:01]
Barry Ritholtz
Really interesting. You've described the AI moment as one of the most important company building opportunities in our lifetime. What's the risk of venture funding too many of these startups? Or is this just a fat head of winners and a long tail of well, we gave it a shot. Is this just the nature of this business where it's a couple of winners are driving all the returns for, for your funds?
- [48:30]
Mamun Hamid
Yeah, venture is a power law business, there's no question about it. And if you already look at like there's this article I read the other day where 90% of air revenue is in the hands of two companies.
- [48:44]
Barry Ritholtz
That's crazy.
- [48:44]
Mamun Hamid
OpenAI and Anthropic.
- [48:46]
Barry Ritholtz
Right.
- [48:47]
Mamun Hamid
So, and the remaining 10% is in a bunch of companies are excellent companies. But the scale of those two other companies is so massive.
- [48:54]
Barry Ritholtz
Right.
- [48:55]
Mamun Hamid
That it dwarfs all the other good, great work that's happening in tons of other companies that we've backed. And by the way, like you know, those will be great outcomes and be great companies. There's no question about it. It's just that it dwarfs and the power law really does. You can see it when you look at the numbers and it' sy our job is to be in the companies that make history and are in the power are following the power law. What we find is that there actually, you would think there's dozens of companies, there's actually tens, maybe like less than 10 and there's like two to three that are converging to become winners in a category. And I think everyone's trying to identify those two to three companies and be in those two to three companies. And so one of the challenges we face is that we try to invest in what we think is the winner in the category early. Sometimes you don't know early that this is the winner. And if you invest too early, you conflict yourself out of the the eventual winner.
- [49:58]
Barry Ritholtz
Right. You only invest in one company per silo, so to speak.
- [50:02]
Mamun Hamid
Yes.
- [50:03]
Barry Ritholtz
Right. Just to avoid those sort of conflicts.
- [50:05]
Mamun Hamid
So the conflict, typically we're joining the boards of these companies and, and if you have, you know, confidential board level information and you don't want that. Like now you invest in a competitor, all of a sudden there's a chance of conflict, conflict of interest. And so we definitely try to avoid that conflict of interest.
- [50:21]
Barry Ritholtz
So I'm kind of fascinated by, as venture investors you obviously see the promise of AI across all these different economic sectors. I'm curious how you're using AI internally at Kleiner Perkins. Are using it to source deals or do due diligence or predict specific outcomes. How does AI fit into your operations?
- [50:47]
Mamun Hamid
Yeah, we have definitely been maxing out on AI internally not only because we invest in these companies, whether we use. Glean is a company we incubated inside of Kleiner Perkins actually and it sits in year seven now is a pre company started by an incredible engineer, Arvind Jain. And that's like our knowledge management. Every single piece of knowledge inside of Kleiner Perkins resides in Glean. And you can go to it, query it, chat, chat with it. Like if I want to find out your phone number and email like and then I've never met you before but I know someone at Kleiner probably knows you. I'll go to Glean or if I want to ask about like a HR policy, I'll go to Glean quickly ask. Because it just knows everything about Kleiner Perkins. It knows investment memos, it can, it knows cap tables, it knows like the really like confidential stuff. It's permission in a way where the people who are supposed to know will can know. And that is part of the magic is that it's very safe, secure, you trust it to really know the things it's supposed to know and not know the supposed things it's not supposed to know. And so that's an example. But we get so much information and whether it's board decks and they're long board memos, financials. And so when I'm going to a board meeting after this I got the board memo and the first thing I do, it's sent to an email alias and that runs it through AI and it produces a summary for me of the board meeting and questions I should be thinking about as an instant thing that I do once I get the board materials just so that I start thinking about it before I actually go read the board memo. I sort of have a preview of it in my mind. We do a quarterly or every four month portfolio review and we have a couple hundred companies. It used to be a very manual process that we had a dedicated person working on it and now our Technology team has built a system where we take these summaries. They get piped into this, this, this portfolio book that we create and with all the financials, all the metrics and everything. And it's, it's something that we are heavily leveraging. AI, in this case, it's, it's glean. It's, it's Claude. So the underlying models, obviously, and we have done a bunch of other things. I actually love to rate my meetings just so I know, like, so I remember, like, what are the, the tens and the nines that I should have paid attention to, but I forgot because I didn't. So I want to have an exhaust of all the things that I'm encountering my real life. And AI is an amazing capture of the exhaust and to provide intelligence and signals to our team and it can pipe it into our CRM. And so there's all these cool things that we've done. We have an internal tech team, which is an amazing team of four folks who build a lot of these tools. And we are definitely maxing out. Out on using everything that's out there.
- [53:50]
Barry Ritholtz
Huh. Really, really quite fascinating. So, final question before we get to our favorites that we ask all our guests. What are investors not thinking about when it comes to AI, but or, or anything else but perhaps should be what sort of topics? Policy, data, geography. What's getting overlooked? But shouldn't.
- [54:13]
Mamun Hamid
I think right now we're going through a time of where software is considered to be dead and, or there's called the SaaS apocalypse, although they're just coming off their lows. Yeah. And there's always an overreaction to, oh, my God, it's going to be an AI capex world, and only chips will matter and only like, you know, like fiber and data centers and power will matter. The reality is, like, the way we as humans interact, interact with software, with technologies, through software, and through things we have known to be called software and tools. And by the way, CIOs and large companies buy from companies that sell to them and they don't just buy a smart agent. And so I think something that's been certainly just a pendulum swung a little too far is that we underappreciate what software still does and will continue to do forever for our enterprises, for governments, et cetera.
- [55:11]
Barry Ritholtz
Software not going away. Yeah, really interesting. All right, let's jump to our favorite questions, starting with who are your mentors who helped shape your career?
- [55:22]
Mamun Hamid
Yeah. One of my mentors is Irwin Federman, who I dearly love. He's 90 years old. Now he's a New Yorker.
- [55:32]
Barry Ritholtz
Wow.
- [55:32]
Mamun Hamid
He sold peanuts, I believe, at Dodger Stadium when there's still The Dodgers.
- [55:36]
Barry Ritholtz
The 50s. Yeah. That's amazing.
- [55:38]
Mamun Hamid
But he was my mentor at USVP and he's a legendary semiconductor investor, believe it or not. He was one of the co founders of SanDisk Corporation. Before that he was a CEO of AMD.
- [55:52]
Barry Ritholtz
I hope he still has a few shares of those.
- [55:54]
Mamun Hamid
Yeah, and he probably does. But SanDisk, which is in this memory hype.
- [55:59]
Barry Ritholtz
Yes.
- [55:59]
Mamun Hamid
Cycle that we're going through and hype or not, but like there's a real need for memory, I believe now is maybe like a half a trillion dollar market cap company. Crazy. Don't quote me on that, but memory's having its day right now. But in any case, he was a mentor because not only I worked for him and but I saw through his lens how to be a great board member, how to make investments, how to back people, how to build relationships with people. But he also gave me feedback that no one else in life would because I think he just wanted. He loved me. I really felt the love because the kind of feedback he gave me was feedback that I don't think people generally have the courage to give you. And it's sort of, you know, it's. It's like pretty direct. It's. It cuts love, tough love.
- [56:50]
Barry Ritholtz
Yeah.
- [56:50]
Mamun Hamid
And I love that about him and, you know, reminds me that I need to go pay him a visit.
- [56:56]
Barry Ritholtz
Well, you're in New York, you might as well.
- [56:57]
Mamun Hamid
Oh, he's actually, you know, he lives in the Bay Area.
- [56:59]
Barry Ritholtz
Oh, okay.
- [57:00]
Mamun Hamid
Yeah, so he's. He's a New Yorker, relocated to the Bay Area, I think like 50 years ago.
- [57:04]
Barry Ritholtz
So let's talk about books. What are some of your favorites? What are you reading currently?
- [57:08]
Mamun Hamid
So I'm just starting on this book. It's called Believe why you should believe, especially in this, like, era of AI. And it's my. I'm on the board of a company called Thrive Global, and the CEO founder is Arianna Huffington. And Ariana gave me the book and she and I have very aligned views on faith and spirituality. And she gave me this book and said, hey, you know, like, so Ariana, I believe Greek Orthodox, I'm Muslim, and we talk about how faith guides our lives. And we talk about how in this age of AI, this is actually the conversation she and I have. And she's like, I have the perfect book for you. And it's about how we should believe it even more in this age of AI because it helps us actually understand the world because we're trying to make sense of it all the time. All the, all the time. And actually religion can give us a bit more constrained view of, like, what the world actually is, because otherwise it's just like a, a black hole, black box. You won't be able to comprehend the, the, the vastness of, of what we're trying to comprehend as human beings. And especially with AI now we're, we're pushing boundaries of what's possible. And I think there's actually more, more in the, in the scriptures than you think is sort of the view that she and I share. And this book actually sort of hits home with it. It's New York Times columnist Roy Dahut. But yeah, belief.
- [58:45]
Barry Ritholtz
Check it out on my list. Now, what about streaming? I know you host a podcast. What do you either watch or listen these days?
- [58:55]
Mamun Hamid
So my wife and I, we love to watch Dateline, 48 Hours, these.
- [59:01]
Barry Ritholtz
All the crime shows.
- [59:02]
Mamun Hamid
All the crime shows. It's like in some ways it just kind of takes it down a notch. But it also is so instructive around human psychology, what motivates people to do not so great things. And there's generally like a theme to it at this point.
- [59:21]
Barry Ritholtz
It's a very repetitive theme, but Dunning, Kruger, it's all. They have no idea. They're just trail of DNA evidence they leave everywhere. Anytime I've watched that show, it's just like, what are you doing?
- [59:32]
Mamun Hamid
And it's, you know, it should be that it's harder and harder to commit crimes. It should be harder and harder. And yet there are still crimes.
- [59:40]
Barry Ritholtz
There's still. And just as many as ever. Only people are getting caught more easily.
- [59:44]
Mamun Hamid
Yeah. And we know the cell phones, they're pinging those towers, you know.
- [59:48]
Barry Ritholtz
What do you mean? You weren't in the house. We could tell you were within 100ft of this person. Exactly.
- [59:53]
Mamun Hamid
Yeah. So it is like, it's not probably a very full answer, and you're probably looking for some cool show.
- [60:01]
Barry Ritholtz
No, not at all. I'm fascinated by that. My, my, it's funny because there was used to be this giant gap between the CSI and, and, and what actually was going on. But if you watch the two of them, it's really closed because maybe there's a little selection bias here, but all those shows, it's all these people they got that got caught. So you're seeing where the technology worked, where the forensic science was. That guy. Yeah, it's really, really very funny. All right, our final two Questions what sort of advice would you give to a recent college grad interest in a career in either venture investing or technology?
- [60:42]
Mamun Hamid
I would. It's probably the same advice I would have given 20 years ago or get given myself when I came out of college is go work at a fast growing company where you can learn from the growth that it's encountering but also the people and then probably the network that you will build for the rest of your life. It is probably the best time in your life coming out of college to go learn from others around you and to experience high growth because from high growth lots of lessons learned. And so if you can find a way to get into a high growth technology startup, AI startup, it is the best way to develop the skills but also like the empathy of what it means to have carried a bag and sold something and built something and shipped something. I always tell folks like there shouldn't be a direct path into venture capital is not a it's a second thing. It's not the first thing you do coming out of college or coming out of grad school. It's like you have to have built and shipped and sold and developed that empathy for high growth and the lessons learned before you get into our career.
- [61:57]
Barry Ritholtz
Really, really interesting answer. And our final question. What do you know about the world of venture investing or technology today? Might have been useful to 25, 30 years ago when you were first ramping up.
- [62:11]
Mamun Hamid
It's all about the people. It sounds so trite, but it is about special. It's I say ordinary looking people doing extraordinary things and how do you assess those ordinary people who are doing extraordinary things is by really understanding the people, their intentionality, their desires, their ambition. Ambition. What drives them? Their motivation which goes back to the why do you meet them in person? Because you're trying to figure out like why are they doing this. Building a startup, a company is hard work. It's a sacrifice on life. So there better be a good reason why you're doing this.
- [62:49]
Barry Ritholtz
Really, really interesting answer. Thank you Mamun for being so generous with your time. We have been speaking with Mamun Hamed. He is partner at Kleiner Perkins. If you enjoy this conversation, well check out any of the 647 we've done over the past 12 years. You can find those at Apple, Spotify, YouTube, Bloomberg, wherever you get your favorite podcasts. I would be remiss if I did not thank the crack staff that helps put these conversations together each week. Alexis Noriega is my video producer. Sean Russo is my researcher. Anna Luke is my podcast producer. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.
- [63:43]
Francine Lacqua
I'm Francine Lacqua, an award winning journalist and I've got a new podcast, Leaders with Francine Lacqua from Bloomberg Podcasts. I've interviewed everyone from heads of state to fashion icons about the news of the moment, but I've always been curious, who are these people as leaders? I don't think there's one right way to be a leader.
- [64:02]
Mamun Hamid
Make decisions.
- [64:04]
Barry Ritholtz
A poor decision is always better than no decision.
- [64:07]
Francine Lacqua
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