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This Silicon Valley VC likes to keep a low profile—no easy feat when you have one of the biggest IPO years in history

May 18, 2021, 10:30 AM UTC
Sequoia partner Alfred Lin
Photo courtesy of Sequoia; photo illustration by Fortune

Alfred Lin and I are seated—at an acceptable social distance—in Sequoia Capital’s San Francisco office. It’s empty. No one is here except for me, Lin, and the venture capital firm’s VP of communications. The quiet is even more pronounced because Lin, a partner at Sequoia since 2010, isn’t a big talker. He answers each of the questions I pose thoughtfully and economically. When he’s finished, he stops. He looks at me, waits for the next question. Unlike almost every other person I’ve interviewed in the past 15 years of my career as a business journalist, he feels no need to fill the silent gaps in conversation.

But Lin’s disarmingly low-key presence—and his vacant office—are misleading. Both the man and the firm, one of the oldest and most venerable venture capital shops in Silicon Valley, have had a hell of a year, generating plenty of noise in the tech world and beyond. “Reflecting on it, the words that come out of my head are ‘both exhilarating and exhausting at the same time,’” Lin says when asked how he would sum up his 2020. “There were a lot of highs and a lot of lows.”

The highs are easy enough to unpack. Seven of Sequoia’s portfolio companies IPOed in 2020 (an eighth, Clover Health, joined the public markets via a SPAC). Two of those, Airbnb and DoorDash, were the biggest IPOs of the year, earning the investment firm stakes currently worth more than $23 billion, collectively. These so-called exits helped make 2020 one of Sequoia’s strongest years ever in terms of returns, a notable achievement especially when you consider that the firm, founded in 1972 and named after California’s giant redwood trees, has invested in the likes of Google, LinkedIn, Oracle, and many other humongous tech successes over the decades. Lin was at the forefront of Sequoia’s monster year: Airbnb and DoorDash are his “babies,” and he sits on the boards of both. (Sequoia, for its part, prefers to present its investments as firm-led as opposed to affiliated with any one particular partner.)

The lows are more complicated. They are also harder to quantify—and much harder to talk about, particularly if you’re someone who is not prone to talking much.

Before becoming a venture capitalist at Sequoia, Lin had run several businesses with the entrepreneur Tony Hsieh—their most famous venture was the online footwear marketplace Zappos, which they sold to Amazon in 2009. Lin was the company’s CFO; Hsieh was its CEO. Hsieh, who had reportedly been struggling with drug and alcohol use in recent years, died last November, after suffering injuries in a house fire in New London, Conn. The two had been college classmates and spent 15 years working together as business partners—and close friends. “This is someone that, for a period of my life, I saw every single day,” says Lin. The fact that the personal tragedy struck in the midst of a pandemic made it that much harder to digest and heal. Lin, who tends to be very private, published a “final letter” to Hsieh in Forbes just days after his friend’s death, in which he highlighted some of the ways Hsieh had inspired him. He also used the opportunity to say a final goodbye. “It was a surprisingly authentic way of mourning and grieving and getting closure in the COVID world,” says Lin.

Alfred Lin (left) and Tony Hsieh at Zappos.com’s annual “Bald and Blue” charity event in 2008.
Courtesy of Alfred Lin

But while the pandemic may have pushed Lin to be more public than usual in his healing process, he remains very much out of the limelight—by design. Unlike a lot of other Silicon Valley venture capitalists, Lin doesn’t do a lot of public speaking. He doesn’t spend much time on social media. He’s never been been active on Clubhouse, the audio-based networking app that went viral in tech circles. (He set up an account just to “test” it out.) “He doesn’t have a million followers on Twitter, and I don’t think that’s a bad thing,” says Brian Chesky, cofounder and CEO of Airbnb.

Lin has never participated in an in-depth profile; this is his first. But he sat down with me twice, once in Sequoia’s office and once over Zoom, and was willing to talk openly about the wild ride he has been on in recent months, the record financial gains and deep personal loss. He agreed to talk about the impact Hsieh’s unexpected death had on him, and what he learned from his late partner and friend. And he was open, though definitely not boastful, about the part he played in Sequoia’s exceptionally fruitful 2020.

Lin’s relationship with Sequoia actually started back in the days when he was first working with Hsieh, after the VC firm invested in their first company, LinkExchange, in 1997. Sequoia also invested in Zappos, the duo’s second company. And then, after leaving Zappos in 2010, Lin joined Sequoia as a partner.

Both Hsieh and Sequoia have shaped Lin’s career in ways large and small. But that influence has been far from a one-way street. It’s easy to miss in the blinding spotlight that has shone on his former partner and his current firm. But Lin, in his characteristically quiet way, made an indelible mark on each of them as well.

‘R.I.P. Good Times’

In the fall of 2008, Sequoia’s partners sent an email to the founders of all of their portfolio companies, asking them to come in for a mandatory, all-hands emergency meeting. More than 100 founders and founding team members gathered for the event, which took place in the Quadrus Conference Center on Sand Hill Road, close to the firm’s office in Menlo Park, Calif. But the message that was relayed at the meeting reverberated way beyond those four walls—prompting a sonic boom throughout Silicon Valley and the broader startup world.

The aim of the meeting was to issue a dire warning to Sequoia’s portfolio companies about just how far south the unfolding recession might send the global economy and, hopefully, provide some tips for how to survive. (In a nutshell: Hunker down.) To drive the message home, the firm’s partners had prepared an ominous, 56-slide presentation, titled “R.I.P Good Times,” which featured all sorts of economic charts sloping downward precipitously. The third slide was simply a knife plunged into a pig’s head—nothing else. Not surprisingly, the deck was effective.

It wasn’t just the visuals that got the industry’s attention. Sequoia was a kingmaker in Silicon Valley—if the firm invested in your company, you were taken seriously. After all, Sequoia was behind some of the biggest tech successes around, from Oracle to Google. So it was simple: When the firm spoke, the startup world listened. The foreboding slide deck was posted online, spreading faster than a beta invite for the latest mobile app. Silicon Valley news site TechCrunch called it a “presentation of doom.” Entrepreneurs freaked out. Layoffs ensued, not just at Sequoia portfolio companies but across the industry.

Lin, who was running Zappos with Hsieh at that time, was one of the entrepreneurs who had piled into the Sand Hill Road conference center. So was Hsieh—the two had flown out together from Las Vegas, where Zappos is headquartered.

But while the Sequoia presentation rattled them—it’s hard to ignore a pig head—its pessimistic message didn’t come as a surprise. The two had already seen sales at Zappos begin to soften in the second half of 2008. They knew it was a dire moment. “Sequoia doesn’t publish any of this stuff to founders unless it’s super important and serious,” says Lin.

Back in Las Vegas, they acted quickly, laying off around 100 employees, 8% of the Zappos workforce at that time. The downturn turned out to be as bad as Sequoia had predicted. “During that time, I noticed there was one day where our sales dropped 30% year over year,” Lin recalls. “I mean, we were growing 30% year over year. To see sales drop 30%, it was quite jarring. And to be able to be prepared for that was quite important. I think if we had not seen that presentation, we wouldn’t have taken it as seriously.”

In the end, Zappos was able to weather the storm. The company even managed to come out stronger, selling to Amazon for $1.2 billion in 2009. But it wasn’t just Sequoia’s guidance that had gotten Lin and Hsieh through the tough times. It was also each other.

A 15-year partnership

The two met as college students, at a dorm party at Harvard University. Lin was a senior, Hsieh was a junior. They had a lot in common. “We were both wearing big glasses and khakis, oversized button-down shirts that were hanging out,” says Lin. As he remembers it, the two of them stood toward the back of the room, observing the others as the crowd got more and more tipsy. While the other students partied, they discussed business ideas. “It was entertaining just to riff with him even if I thought [Hsieh’s ideas] were crazy,” says Lin. “And even if he thought I was thinking too conventionally.”

Lin had always had a nerdy, mathematical streak—okay, more than a streak. “We did a lot of card games that involved a lot of math,” Lin says when asked what he did for fun as a kid.

The 48-year-old moved from Taiwan to the United States when he was just 6, in first grade. His dad had been sent out to New York to open a branch for the international bank where he worked. Lin’s mom had a career in banking too, but she stopped working and became a stay-at-home mom when they moved to the U.S., in order to focus on her children’s education. Lin has a younger brother, and the two boys switched elementary schools three times. “It wasn’t for a better apartment, it was just for a better school district,” he recalls.

Hsieh and Lin bonded over their academically intense childhoods and their nerdy proclivities. But while Lin was methodical and analytical, Hsieh was creative and, sometimes, unrealistic. They both dreamed big, though. Starting with pizza.

There was a restaurant on the ground floor of their dormitory at Harvard, called the Quincy House Grille. It served burgers and fries. Hsieh believed that what college students really wanted, especially after a late night of partying, was pizza. He put in a bid to manage the restaurant; it was up for new management every year. But he did it his way. Instead of the usual one-year deal, he asked for two. For his offer price, meanwhile, he entered, “highest bid + $1.” It worked. And so did the pizza. Hsieh invested in a couple of pizza ovens for the restaurant; word spread, and soon the place had a line out the door.

Lin wasn’t Hsieh’s business partner—yet. But he found a way to get in on the pizza venture anyway. It’s a story Hsieh used to recall often. He even told it in the book he published in 2010, Delivering Happiness, which highlighted the culture the two had created at Zappos. But Lin has a slightly different version.

The two had grown close, and Lin had become Hsieh’s best customer at the Quincy House Grille. It wasn’t because he ate a lot himself. He would buy a full pie, then resell the individual pizza slices. The way Hsieh told the story, Lin charged more money for each slice in order to turn a profit. (And that’s how Hsieh knew he wanted his friend to someday become his CFO.) But as Lin tells it, he kind of fell into the profit part. He says he had negotiated a discount for the pizzas he bought from Hsieh, because he was purchasing such large quantities. So instead of the $2 per slice that the restaurant typically charged, he was getting his pies for about $1.25 or $1.50 per slice. Then he’d run the pizzas upstairs to sell by the slice. But the price hike wasn’t about profits. “I didn’t mark it up, but quarters were a prized commodity because they were needed for washing machines,” says Lin. So instead of $1.25 or $1.50, students gave him $2 per slice.

Whatever the real story is, the pizza connection helped solidify a long-standing friendship and business partnership between the two. They respected each other’s business acumen immensely. They complemented each other. And they would end up working together for 15 years.

Lin (left) and Hsieh making and serving pizza at Zappos, year unknown.
Courtesy of Alfred Lin

Lin and Hsieh eventually ventured West. Hsieh took a job at Oracle, which didn’t last long, and Lin started a Ph.D. program at Stanford University, which also didn’t last long. They both caught the startup bug. Hsieh founded LinkExchange, an online ad marketplace, in 1996. Lin came on board to be his CFO shortly after. After selling LinkExchange to Microsoft in 1998, they started a venture fund. Then they discovered Zappos, which was one of their smaller investments, and decided to take it over; it had been struggling to figure out how to grow. Hsieh came in as CEO, and Lin as CFO. They wound down their venture fund and went all in on shoes.

Zappos wasn’t just a business endeavor. It also gave the two entrepreneurs an opportunity to define and create the kind of culture they wanted to immerse themselves in. (LinkExchange, meanwhile, had given them an opportunity to discover the kind of culture they didn’t necessarily want to create.) Their idea? To make both customers and employees happy. It was revolutionary. At Zappos, call center workers weren’t rewarded for getting off the phone quickly with problem customers. It was the opposite—the more time they dedicated to talking through issues with customers, the more they were recognized (the longest customer service call logged in at 10 hours, 51 minutes, and is still celebrated by the company). And the broader mission at Zappos? It included unconventional values like “Create fun and a little weirdness” and “Be adventurous, creative, and open-minded.” The company became a case study for its unique culture and innovative approach to customer service. And in the process, Lin and Hsieh also built a multibillion-dollar online shoe store.

Lin left Zappos and joined Sequoia shortly after the Amazon acquisition, while Hsieh stayed on as CEO until August 2020, just months before his death. But Lin says the impact Hsieh had on him is lasting, and helps inform how he works with entrepreneurs to this day. “I think the reason I was good at working with Tony Hsieh, is the same reason I’m good at working with a lot of founders,” says Lin. “Because I try to parse their ideas and figure out how to make them better. I try to be a partner and a coach to them. And that started early on with Tony.”

The circumstances around Hsieh’s death are still murky—and Lin did not want to comment on the details. But articles that were published after Hsieh’s passing painted a picture of drug abuse and all sorts of erratic behavior, including a reported fascination with fire. (Hsieh’s fatal injuries were a result of smoke inhalation from the house fire in Connecticut, where he was staying at the time of his death.)

After Hsieh passed away, Lin was invited to join a memorial for friends and family, an attempt to commemorate the entrepreneur over Zoom. He says it didn’t provide him with the kind of forum he needed to grieve or get closure. That’s why, even though he’s usually very private, he published his letter to Hsieh online.

“I think what I wanted to get across for other people to read, is just the different facets of Tony that I saw,” says Lin. “I think there are certain people that saw certain pieces of Tony throughout different parts of his life. And I had the privilege of seeing him through many different phases, from a nerdy computer science person who was interested in business and wanted to create the best restaurant in a dorm building, to building a first Internet empire, to falling in love with Zappos.”

Lin had watched Hsieh take a crazy idea from concept to reality; he had watched him fundraise and deal with rejection, over and over again. And being exposed to that process, and very much a part of it, helped define him as an entrepreneur—and as an investor.

The Black Swan of 2020

The last time Sequoia’s partners all gathered in person, pre-COVID, was Monday, March 9, 2020. “I made a $20 bet that we wouldn’t be back in the office by July 1st,” says Doug Leone, a partner at Sequoia since 1988. “It was a bet I was hoping I would lose.”

Along with veteran investor Michael Moritz, Leone had been one of the lead instigators of the “R.I.P. Good Times” presentation back in 2008. Now, it was Lin and Roelof Botha, another of the firm’s younger generation of partners who would be the main drivers in Sequoia’s next message to go viral: the “Black Swan” memo. The email went out on March 5, just a few days before the firm’s last in-person gathering. Only this time, it wasn’t leaked. Sequoia published it on Medium.

“Coronavirus is the black swan of 2020,” were the ominous first words in the memo. “Some of you (and some of us) have already been personally impacted by the virus. We know the stress you are under and are here to help. With lives at risk, we hope that conditions improve as quickly as possible. In the interim, we should brace ourselves for turbulence and have a prepared mindset for the scenarios that may play out.”

The message was signed by “Team Sequoia.” But toward the bottom, just one of the firm’s partners was called out: Alfred Lin.

“I was serving as the COO/CFO of Zappos when I was summoned to Sequoia’s office for the infamous R.I.P. Good Times presentation in 2008, prior to the financial crisis,” Lin was quoted as saying in the Black Swan memo. “We didn’t know then, just like we don’t know now, how long or how sharp or shallow of a downturn we will face. What I can confirm is that the presentation made our team and our business stronger. Zappos emerged from the financial crisis ready to seize on opportunities after our competitors had been battered and bruised.”

Sequoia—and Lin—got their prognostications mostly right. But they definitely got dinged for the title (and a few other prophecies, which we’ll get into later).

“There are people who say [the pandemic] was completely foreseeable so therefore it’s not a black swan,” says Lin, adding that the fact that it caught so many people by surprise does merit the headline. Besides, says Lin, “it was catchy.”

Sequoia had no idea exactly how big or how long of a hit its portfolio companies would take as a direct result of the pandemic. But the firm thought the effect of the virus would last at least a few quarters, and that supply chains would be greatly impacted. Just as they had back in 2008, Sequoia again advised its portfolio companies to hunker down, to reevaluate headcount and other expenses.

Lin, who sits on more than 10 boards, including Airbnb and DoorDash, had already been through major crises with several of his entrepreneurs. Sequoia had initially invested in Airbnb in 2009, before Lin joined the firm. In 2012, the partner who had been on Airbnb’s board left Sequoia, leaving a position that needed to be filled. Chesky, Airbnb’s CEO and cofounder, asked Moritz to put Lin on his board. “I went to art school and had no operations experience,” says Chesky. “[Alfred] had operational discipline; he is highly analytical. We are a bit of yin and yang, a symbiotic relationship.”

Airbnb CEO Brian Chesky (left) with Lin at Sequoia Base Camp 2016.
Courtesy of Sequoia

Lin had also helped build a culture at Zappos that Airbnb’s founders admired. And he, along with Hsieh, had been through not just one but two downturns (in addition to the 2008 economic crisis, Zappos sales had taken a hit post-9/11). All of that experience and knowledge turned out to be very valuable for Chesky. Around 2013, Lin actually spent one day a week in the Airbnb office. It was a period of hypergrowth for the company, when Chesky was struggling to expand his executive leadership team at a clip to match. The CEO was also juggling regulatory lawsuits and instances of discrimination on the platform, and he didn’t have a chief operating officer to help him handle day-to-day management. Enter Lin, who, at least on a temporary basis, assisted Chesky with ramping up customer service and internal operations. “I went through a lot with him,” says Chesky. But the pandemic would test Airbnb in a whole new way.

In March 2020, the company’s business dropped by 80%.

“You learn a lot about people in a crisis,” says Chesky. “Alfred was everything I hoped he would be. He was optimistic and steady. He stood by us; he actually leaned in as a champion.”

Airbnb had to decide whether to raise debt or equity to get through the massive drop in sales. Debt was riskier but cheaper. Lin was a big proponent. He didn’t want Airbnb to take a “down round”—raising equity but lowering the company’s valuation. And he was confident in the company’s ability to rebound in the future. “It was a bit of a Rorschach test for which side you’re on,” Chesky says of the way his board, and Lin, handled the decision.

Airbnb eventually took on $2 billion in debt. It delayed its IPO, originally slated for earlier in 2020, and then finally went public at the end of the year, in December. Sequoia had invested a collective $375 million in Airbnb. Today, its stake in the vacation rental marketplace is worth a staggering $15 billion. After the IPO, Chesky asked Lin to remain on the Airbnb board. Lin agreed.

At the height of the pandemic, the two had talked multiple times a week, sometimes every single day, sometimes hours a day. “We have a very close relationship,” says Chesky. What began as a business relationship has also developed into a friendship.

“He has a poker-faced countenance,” says Chesky. “His voice doesn’t inflect very much when he talks. You don’t know how much he likes you when you first meet him. But he’s extremely passionate, and he’s actually emotional.”

It’s hard to see those characteristics in Lin, even when face-to-face, at least for those who don’t know him as well as Chesky does. But the Airbnb CEO has another proof point for Lin’s more emotive side: “Tony Hsieh would not have had a non-humanist as his partner.”

Saying no—then yes

It wasn’t just the title of the Black Swan memo that Sequoia got a little wrong. It also misjudged a financial aspect of the pandemic, predicting that private financing could “soften significantly,” as had happened in 2001 and 2008–09. In the end, while the virus wreaked havoc on many businesses and many lives, it provided a boon to others. And venture capital dollars, instead of drying up, flowed like never before. Amid the chaos, it wasn’t just Airbnb that bounced back. Another of Sequoia’s investments, and Lin’s board positions, actually ended up profiting immensely from the pandemic, resulting in the second-biggest IPO of the year: food delivery app DoorDash.

“They were really scared that restaurants wouldn’t survive,” Lin says of the takeout delivery app’s initial reaction to the virus. “It was a very uncertain time.”

But Lin never wavered. He and Tony Xu, CEO and founder of DoorDash, had already become close; Lin had been on Xu’s board since Sequoia invested in the company in 2014. Lin spent hours crunching the numbers with Xu, looking for trends and modeling financial projections. Instead of a doomsday scenario, another picture soon emerged: In the first nine months of 2020, DoorDash tripled its revenue, compared with the same time period a year before. The cause? Housebound Americans were ordering more food deliveries than ever before.

Like Airbnb, DoorDash ended up going public in December. In its first day of trading, shares of the company closed at $190, a full 86% above the IPO price of $102.

When Lin first met Xu, though, he wasn’t so sure that DoorDash would be a good investment. At the time, Xu was trying to raise a seed round of financing, and had pitched Lin on the deal. But Lin thought the food delivery space was already crowded and overly competitive, with a slew of well-established rivals like Postmates, Caviar, and Grubhub. He called Xu to tell him that he was passing on the opportunity. “I felt really bad because I didn’t realize he was at a wedding,” says Lin. It wasn’t Xu’s wedding—that came two weeks later. But he was one of the groomsmen at a friend’s ceremony when he got the call.

DoorDash CEO Tony Xu (left) with Lin at Fortune Brainstorm Tech in 2018.
Stuart Isett—Fortune

“It was like, ‘Okay, smile for the cameras,’” recalls Xu. “It was tough, tough to take that rejection, especially when your company doesn’t have much money.”

Though he’d passed on the investment, Lin says Xu made an impression on him: “There was something I just couldn’t get out of my head.”

Xu had been incredibly detailed in his analysis of his business, in the breakdown of how restaurant kitchens operate and how to optimize the process, from cooking lines to front-door delivery. That had impressed Lin. So had Xu’s tenacity. “Founders start companies by ignoring everybody’s advice,” says Lin. “If they listened carefully to all the feedback, they would just not start the companies.”

That certainly had been the case with Hsieh, as Lin had witnessed several times over. “With Tony [Hsieh], I don’t know how many people said no to LinkExchange before Sequoia invested,” says Lin. “I think it was probably a dozen.”

A few years after first meeting Xu, Lin happened to sit down next to the entrepreneur at a dinner put on by venture capitalist Aileen Lee. This time around, he was persuaded. Sequoia participated in DoorDash’s Series A funding round, after passing on the seed. (“God, I was at the same dinner,” says Lee. “Why didn’t I invest in DoorDash?”)

In the end, Sequoia invested a collective $415 million in DoorDash, and the firm’s stake is now worth over $8.5 billion. “I dream of being good enough at my job in order to invest with Alfred,” Lee, founder of investment firm Cowboy Ventures and a friend of Lin’s, jokes when asked about his track record.

Seize the day

Lin has made a name for himself by picking winners. But the entrepreneurs who have worked with him say there’s much more to him—that he’s more than a successful guy who knows how to crunch data.

“You know, behind the scenes, Alfred is a person who I think first and foremost genuinely cares about the entrepreneur,” says Xu. “I think he kind of has to, by the way, because there’s going to be too many tough moments if you’re just looking at the numbers when the numbers don’t exist, and when you have to believe in something with some level of conviction.”

Lin is also on the board of Houzz, a home design site run by cofounder Adi Tatarko. “From the outside he’s a tough person, he’s very analytical and supersmart,” says Tatarko. “But I believe inside he’s a soft person in a good way. He’s in it with you. He goes a very long way to support his founders and to support us the way we want him to support us.”

Houzz cofounder and CEO Adi Tatarko
Stuart Isett—Fortune

Jess Lee, a Sequoia partner who works closely with Lin, says his attention to people and culture is a huge part of his appeal to entrepreneurs. “Zappos literally wrote the book on how to build a great company culture,” says Lee. “And, you know, I think that was just as much Alfred as Tony [Hsieh].”

About a year after the Black Swan memo, Sequoia issued yet another message to its founders, including Tatarko, Xu, and Chesky. This one was labeled “COVID Accelerated the Future: Now Seize It.” This particular communication took a much more optimistic tone, projecting that the U.S. was poised for “stronger economic growth” in the second half of 2021 than we’ve seen in decades.

Perhaps because bad news travels faster than good news, this particular manifesto didn’t set off quite the same waves as the R.I.P. Good Times and Black Swan communications had in the past. And unlike those previous memos, there was another element to Sequoia’s advice to startup founders: a focus on the well-being of their teams.

“We’re seeing a difference between how business metrics are performing and how many people in those companies are feeling,” the memo read. “Keep an open dialogue about the challenges your employees face. Strong leadership that puts people first will continue to be critical.”

The tone made sense, not only because of the obvious toll the pandemic had taken on the mental and physical health of many. But also because, particularly for Lin, the year had been a mixed bag. Unprecedented professional highs had coexisted with unprecedented personal lows. Once again, the firm’s memo was simply signed by “Team Sequoia.” But just like Airbnb and DoorDash, and the companies he had run with his late partner, Hsieh, Lin’s touch was palpable, even if his name wasn’t front and center.

Editor’s note: An earlier version of this story misstated the number of employees laid off by Zappos during the 2008 financial crisis. The company laid off about 100 people.

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