Summary
Following a recent talk at Stanford’s Graduate School of Business, Sequoia CEO Greg Golub reflects on 25 years of building the company without outside investment. As business leaders navigate rising healthcare costs and rapid AI disruption, Golub shares how establishing core company values early on helps teams say no to the wrong opportunities, hire resilient people, and make tough calls during high-stakes seasons.
Earlier this month, my wife, Kelly, and I spoke to a class at Stanford’s Graduate School of Business about the 25-year journey of building Sequoia from scratch without outside investment. Thank you to Allison Baum-Gates, Huggy Rao, and the students for having us and for the thoughtful and insightful questions. Getting ready for the talk meant looking back at our biggest decisions, and the feedback afterwards was generous enough that I wanted to share a few of the learnings here.
The timing feels right, because two forces are shaping almost every conversation we’re having with clients right now.
The first is cost. Many of the leaders we work with are making people decisions with numbers they’ve never had to plan for. We’ve just been through our own benefits renewal, and with healthcare costs climbing the way they are, it wasn’t an easy one. Employers feel it on the balance sheet, and employees feel it at home.
The second is pace. AI is changing the way work gets done faster than any of us expected, and every organization, ours included, is learning and adjusting as it goes.
Neither force is new. What’s different this year is that both are arriving at once, and decisions about one affect the other.
Every day, our own client teams are working alongside leaders making these decisions, and I see the weight of it. Our clients and their employees need us more now than at any point in our 25 years.
When pressure arrives this fast, the question isn’t only what to decide, it’s how you decide. That’s where we started with the class, and something Kelly and I had to answer very early on.
In May 2001, we put five credit card applications in the mail and started Sequoia. We were 29, recently married, and the dot-com crash was still unfolding around us. We had no clients and no revenue, and we wouldn’t have any income for 13 months.
Within that first month, we answered four questions. How will we make decisions? What matters most to us? How do we stay viable and grow sustainably? And how do we build a great business, relationship and family together? We answered the first one first. Before we had a business plan, we had agreed on how we would decide.
Roy Disney is often quoted as saying it’s not hard to make decisions when you know what your values are (the actual quote is, “When your values are clear to you, making decisions becomes easier.”). Twenty-five years later, I’ve never looked back and wished we’d made a decision that went against our values. The decisions haven’t always been right, but the reasons behind them have been.
Values Matter Most When They Guide Tough Calls
Everything at Sequoia starts with one reason for existing: to come through for people who put their trust in us. Our values sit underneath that: Passion for Service, Integrity, Trustworthiness, Quality Over Scope, Leadership & Innovation, Commitment to Winning, Teamwork, and Fun & Meaningful.
A list like that can easily end up on a wall and gather dust. What I’ve learned is that values are only useful if they’re written down and specific enough to rule things out. When you’re stressed, when the stakes are high, and when smart people are all telling you “you should do this,” you need something that guides which way to go.
We’ve needed that through four very different and very hard seasons.
Hard Seasons Unlock Some of the Best Ideas
Looking back, every defining chapter of Sequoia started as a time of real adversity, the kind where we had to come together to get through. One of the biggest lessons of our 25 years is that adversity will unlock some of your organization’s best ideas.
Starting Out
We entered a traditional industry believing we could do a better job if we worked harder and cared more. So instead of investing in marketing, we invested in great service people.
When the Rules Changed
About a decade in, new legislation reshaped our market, and clients we loved started moving to PEOs. If there was ever a time to sell, it was then. Instead, we went back to how we defined Commitment to Winning: “a healthy dissatisfaction with the status quo” and “a compelling desire to improve.” We built a PEO from scratch, knowing almost nothing about payroll. A painful payroll tax penalty soon after led to the 3am realization that what we really needed was a technology team for our future. That team, in Bengaluru, became the foundation of the platform we run on today.
When the World Shut Down
In March 2020, our technology team in India was locked down overnight. I told Kelly I thought there was a 35% chance Sequoia wouldn’t make it. Then a client and longtime friend asked us to help companies get their people back to work safely, so we built return-to-work tools with healthcare, legal and technology partners. That software didn’t last (and it was our hope that it wouldn’t have to), but it showed us something we’ve built the company around since: when employers and employees invest in each other, something special happens. It’s how we arrived at total people spend. Values don’t always show you where they’ll lead. Often it’s somewhere better than you could have planned.
Now
We’ve always said disruption equals opportunity, but none of us have seen risk and opportunity arrive as fast as they have with AI. Our answer has been to build capability before we’re forced to, which is why we launched Sequoia PeopleLoop. One principle doesn’t change, though: AI changes the work, but it doesn’t change the accountability.
Values Decide Who You Hire
It’s hard to attract the people you most need when you’re not clear about what you need. Being clear on our values fixed that, and it shaped the qualities we hire for: caring, trustworthy, personally responsible, humble, resilient, and with a long-term perspective.
It matters now, too. A big part of our AI transformation has needed to come from people who aren’t at Sequoia yet, and clear values are what let us bring new talent in without losing what works. More than 300 team members have been with us for over five years, and 67 for more than ten. One joined in December 2001 and is still on the team. People stay for the journey, and so do clients.
Back to This Season
So what does this mean for leaders facing rising costs and faster change right now?
In the 1990s, trees grown in Biosphere 2 with perfect light, water and nutrients grew faster than trees outside, then toppled. Without wind, they never built strong wood or deep roots. Resilience isn’t built in comfort. Sequoias work the same way: their roots are shallow, but they interlock to hold each other up, and their seed cones only open in fire.
A Few Suggestions for Facing This Season
Here’s what we shared with the students, and what I’d offer anyone facing this season.
Write your values down early. Make them specific enough to explain why you say no, and get them in place before the hard call arrives. Hire for those values, and be clear about what each role needs. Your culture is the people you choose.
Decide what you’re optimizing for before you decide how to fund it. We learned this about capital, but it applies just as much to how you invest in your people, especially when costs are rising.
We haven’t always made the right decisions, but I don’t lose sleep over the reasons we made them. And to everyone working through this season together, our clients, partners and our own team: thank you. It takes all of us.
