INTERVIEW   Investor Venture

Ted Schlein on Startups, Venture Capital, and More


Ted Schlein is a General Partner at Kleiner Perkins Caufield & Byers (KPCB), one of Silicon Valley’s prominent venture capital firms with early investments in Amazon, AOL, Electronic Arts, and Google, to name a few. He graduated from the University of Pennsylvania in 1986, majoring in Economics. At KPCB, Ted focuses on early-stage technology companies in the enterprise software and infrastructure markets, including ventures within the networking and consumer security arenas, and has led a number of successful investments and IPOs. Before joining KPCB in 1996, he was an early employee and former Vice President at Symantec. There he spearheaded the company’s growth and dominance in the global software space, bringing Symantec into the software utilities market and commercializing its anti-virus solution, now an industry standard. Ted also currently serves on the Board of Trustees of the University of Pennsylvania and the Board of Overseers of the Engineering School at the University of Pennsylvania.


What kinds of things were you involved in as a student at Penn?

One of the most significant things I did while I was at Penn was actually joining FIJI, which gave me a sense of belonging and community in a place that's relatively big. As undergraduate students, it's your first time away from home, so finding a group of like minded folk that you could bond with and share experiences with was super important to my experience early on. To this day, some of my best friends are my FIJI brothers I met when I went to school.

Outside of class, I was decently entrepreneurial. I worked on a couple different companies while I was at Penn – I started a resume company, and worked on another software company that was started by some ex-Wharton professors. So I exercised my entrepreneurial genes while at Penn, which was always fun and different. Doing that at school went hand in hand with my summers spent in Silicon Valley working in startup companies.

What was the motivation behind your resume company and what was it like starting something on your own in college?

Well, I had a Macintosh and a laser printer at the time and most people didn’t have those in their rooms, so everyone kept using my computer to do resumes! So then I figured I could start to make some money off of this laser printer, and I could print resumes for people.

The experience was pretty rewarding since it forced me to think of a way to market and come up with a unique value proposition (in my case it was the ability to make unlimited changes). You learn how important unique value propositions are if you're going to start a business. So it was a pretty successful way to leverage assets that I already had. And then I hired: somebody to help with marketing, somebody to do data input. So I got a little bit of experience hiring people and getting them to do things. It was a fun foray into the world of entrepreneurship in a small way.

You mentioned that you interned at different startups in Silicon Valley. Can you talk about your experience there and how it might have influenced where you are today?

Well, you have to remember back then in the 80s there weren’t many tech companies yet. So I was kind of lucky, my family lived in California and my sister was one of the first evangelists in the Macintosh group. She knew everyone who was developing software for the Macintosh and so I was able to leverage that to get different jobs over the summer. My first role was at a personal robot company where I was doing software design as well as market research. Another summer, I worked for the very first Macintosh independent software vendors called T/Makers, and at a summer job you basically do anything they asked you to do. It's cool because there’s not that many people so you have the opportunity to do a lot and learn a lot and you kind of fall in love with it.

I particularly loved the vagaries of a startup. There's not a lot of structure. You don't know what's going to happen the next day and you love that. If you want to come here, it's not like going to a big company where you know it's very structured and you know if I do this then that will happen; it's not that way and that's not for everybody. But I did that during my summers.

What was it like joining Symantec as a startup right after college?

I didn't think twice about it. Back then, I think they were like three software startups out here. Once again it was different; a different world in a different time in the evolution of Silicon Valley and innovation. I've had the privilege of being around it for over 30 years now and it is as cool as ever. Maybe the entrepreneurs are different, maybe the ideas are different but entrepreneurship is pretty much the same. And I would argue for the most part while the market dynamics change, how you do venture capital I don't think has changed all that much.


Could you talk about what led you to join KPCB and what the motivations were around that switch?

So Symantec was funded by Kleiner Perkins, and on the board of Symantec were two Kleiner Perkins partners, John Doerr and Jim Lally. So as a result, given what I did for Symantec, I presented to the board quite a bit and I got to know a lot of these folks. Back in ‘96, KPCB was starting a new fund called the Java fund, right when the programming language Java was coming out. Kleiner Perkins had just backed Sun Microsystems and they wanted somebody to help to promote Java and Java adoption. So the idea at Kleiner Perkins was that we'll start this thing called the Java fund and use that to promote people using Java, and they came to me and asked me to run that. I jumped into it and that was 20 years ago.

So at KPCB, perhaps similar to your work at Symantec, you've led a lot of investments into cyber security and related startups in the space. What particularly draws you to Internet security?

Well, my big claim to fame at Symantec was that I designed and brought to the market the first commercial antivirus software in the world. I did have a passion for the field, but I would argue you get lucky in a lot of things in life and in business. I'm not going to sit here and tell you I knew this would work out the way it worked out, but it did. I started to get an appreciation for how one of the base instincts of humanity is to be safe. The first antivirus software I think was actually on the Macintosh, believe it or not. It started because Mac users loved their computers versus PC users, who really thought of their computers as more of a utility than anything else. They didn't care that much about them. I started on the Mac and it just worked out pretty fantastically well. So when I became a venture capitalist the very first investment I did was in a company called Internet Security Systems, which was the first intrusion detection system ever built. I leveraged what I knew pretty well and to me the investment was so obvious based on where I was coming from on the antivirus side.

Then you start to leverage what you know best, because in the world of venture you need some sort of advantage. I felt like I knew the world of security better than most human beings on the planet. I have now been a part of helping start probably more cyber security companies than anyone ever and I'm a firm believer that everyone always wants to be as secure as they can. I love the work and I have this underlying desire to make the world safer. In venture I think it can be dangerous that everyone wants to be all things everywhere. And I think actually picking is really important. I think you got to pick what you want to really be good at.

Advice for Students

For students interested in entering the venture space, what are some of the things that people don't really realize in terms of what venture is actually about?

I get asked the question by students all the time. Not speaking for late or growth oriented venture, but particularly with early stage venture, it’s a really hard thing to decide you want to go into. It's hard to take early venture as a career path and say I'm going to do this. If you want to do early stage venture, you're identifying an entrepreneur and an idea before anyone else has ever thought of it and you want to try and go build a brand new business before anyone else. So you got to go out and experience it yourself, whether being an entrepreneur or working in an entrepreneurial company. Then you need to exhibit some level of success in doing it. Think about it: you want to earn the right to provide funding to some great entrepreneur’s life story and life's work and you've got to give them advice and figure out how to help them. Almost nothing in venture is about the money. It's all about “can I help them build their company and how am I going to help them build their company?” I think it's very hard to do that if you A) have not done it yourself or B) don't have the experiences to truly be able to help the entrepreneur get a competitive advantage. That's generally the high-level advice I give.

Then there are skills I think everyone should get. Communication skills. Whenever you have the opportunity to present in front of a group, do it. I don't care if you're an engineer, I don't care who you are. Learn how to communicate. And it goes hand in hand with selling skills. You want to be a venture capitalist or an entrepreneur? You're going to have to learn how to sell. So I always tell people if you have the opportunity in your careers early on, get yourself a quota, figure out how to get somebody to part with money. It'll make you better at whatever job you take, whether you're an engineer or in marketing or whatever. And most venture capitalists come from the product side of life. I was a product manager. Being a product person is what it's all about. You’ve got to understand product. You've got to understand why customers want a product and what's going to make a customer want a product. I highly stress getting into product management if you can, that's a good grooming ground eventually for being a venture capitalist.

To wrap things up, what advice would you give for smart, driven Penn students?

First of all, patience. Chances are that the very first job you get, you may not be doing everything you think you deserve to be doing and want to be doing. But eventually you’ll get there. So give it some time.

Second thing, a Penn student today is outrageously smart, and I don't want them to feel entitled. You got it into Penn and that's wonderful. Maybe you're paying for it, maybe your parents are paying for it, or maybe you got a scholarship. All great. But remember—no one owes you anything. You have to go out and earn it, whatever it's going to be, you earn it. So don't approach all this with some sense of entitlement.

Next, very early in your careers—it's important where you are on the integrity scale. I have a saying that I use all the time: integrity is binary, it's either a zero or a one. There's no grey in integrity. There's no “today I'm going to have integrity on this issue but tomorrow I'm not.” It doesn't work that way. So decide where you are and live by it, even if it's not popular. You'll have a much better experience in life.

Finally, do what you say you're going to do. If you commit to doing something, do it. Do not be one of those people in the group where they go "Ted says he's going to do it but we know he's not, he never follows through." You do not want to go through life that way. If you can't get it done then just say you can't get it done. But don't be one of those people that doesn't live up to doing what they say they're going to do. Don't commit to it if you can't do it. There's a few words of wisdom.


Jonathan Mak
Always Learning.


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