Mike Vernal on what Facebook taught him about patience — and why big tech is too risk-averse to fix email

you. Uh it's Thanks for having me. It's a wonderful Monday. I hope your Easter was well if you celebrate. I hope your weekend was great and I hope you're off to a great start of the week. Thanks. It was great. Yeah. Fantastic.

Uh yeah, I mean I'd love to kick kick it off with just um a little bit of a little bit of background on your career and then um what you're excited about today and then we can kind of go from there. Does that sound good? Yeah, that sounds great. Um so let's see.

Uh my career I've been I've been an investor for the past decade. Um kind of an accidental investor. I never aspired to this. Um but I I sort of um I spent 15 years operating. I was at Facebook for many years and um decided to give it a try and it's been great. Uh so I've been an investor for the past decade.

Um I am like uh I'm very motivated just by like individual founders and folks that I find compelling and so like a pretty broad set of companies. Um so like a mix of consumer and like SAS and hardware and infrastructure and some others.

Um, some of the larger companies are companies like Rippling and Notion and Verata and uh Clay uh and a couple others. Yeah, we just heard about Clay from David Tish. What what was the what uh Yeah, we we we just heard about Clay.

David Tish from box was on and he was saying about how Clay was this you know overnight success that took seven years but um as they usually do. Uh I'd love to know the story of the first uh first investment that really made you catch the bug.

Obviously, you read Facebook for a long time, but then uh at at some point you were like, I got a knack for this and I'm going to take it more seriously. Um, you know, I made a handful of angel investments before I like formally became an investor. Sure.

Um, but they were and I think in retrospect they're actually like they're they're pretty reasonable. Um, like I only made a handful. Um, I I probably made like seven or eight.

One of them was Notion, which is probably the best of the bunch, but like Wealthfront, it was like notion and Wealthfront and this company called um Human Interest, which is like a 401k provider, and a couple others. I know the CEO. Sayan, I I I I'm like randomly friends with Jeff Schnebly who runs the company now.

It's a fascinating story because it was a YC company and then he came in as as like a founder mode CEO, but he had like like his background. I mean, I I love him, but it's like not super He's He didn't start the company.

He has a MBA and I believe he has a PhD and he's almost like a manager mode type of guy, but he's been fantastically successful with the company and I'm just the biggest fan. Anyway, sorry. Exactly. Exactly. Um, but I I think uh none of them really motivated me to do it.

It was more um I uh so I was lucky enough to join Facebook when it was relatively early like a few hundred people and I was there for eight or nine years and I uh I led a mix of sort of product and engineering at the company.

Um, and I was my wife and I had our first kid and it was the first time that I I took like six weeks off for paternity leave and it was a little bit of a uh it was like the first chance to catch my breath in eight or nine years and I was trying to figure out like what I wanted to do next.

Uh, and the obvious thing would have been to stay at Facebook and Facebook is was and I think still is just one of the most amazing companies out there. Um, but I'd gotten to know a guy named Brian Shrier uh at Sequoa.

And Brian was Brian had actually backed two of my close friends at the series A, a guy named Matt McInness, who's now the COO at Rippling. That's right. Uh, and Steve Gity uh at a company called Hearsay.

And Brian uh had kind of said, if at some point you decide to pop your head up and do something else, you should come come talk to us. And so one thing led to another uh and I ended up at Sequoa. And it was a little bit of an experiment to just see if uh investing was uh uh would be fun and interesting.

And as it turns out, it is both fun and interesting. So, how did you um you know, people talk about quote unquote operate, you know, uh investors love to say if they've spent, you know, two years at a company, they love to say they've had operating experience. You had some very real operating experience at Facebook.

How did you feel? Um uh how did you feel? How how durable were the learnings from the true operating experience versus finding sort of common truths about the way to do business and the way to build products and teams.

Um that you know because cuz I've found like for example like the influencer marketing that I maybe did in 2016 like no longer works, right? And but yet there were things that I learned in that era that you know I still use today, right?

So how do how do you kind of delineate like you know sort of like a higher level of abstraction? Yeah. Higher level sort of these sort of lindy ways of doing things that are durable and valuable to communicate to entrepreneurs that you back. Yeah, it's a good question.

Um I will say one thing that I think I learned that still applies and one thing I had no clue about um uh which I didn't learn until like the investing side of things. Uh, I think one thing one thing that's underrated, maybe it's not underrated, uh, about Mark at Facebook is he's incredibly patient.

Um, I mean, I guess you kind of see it. I think he's like spent $80 billion so so far on like reality labs. Um, but I think, you know, he's he is at the same time both like patient and impatient.

Uh I mean everyone talks about like the move fast break things and I think there is like an like a very strong bias towards action and just like getting getting stuff done but he also like from a first principles perspective kind of if something should work like if something logically makes sense he will just keep playing it out to try to to um until there's like new data that suggests that it that it is wrong which I think explains a lot of the reality labs investment.

Um, and I think like I think one thing that's underappreciated about like a lot of great companies, maybe it's appreciated, I don't know, but like they take a long time. Like uh I mean some companies are really fast and off to the races, but like you know Figma was like four or five years before it started to work.

Um, Notion was like four or five years before it started to work. Clay was four or five years before it started to work. I think Air Table like was founded in 2010 and didn't really sort of break out until maybe 2017 2018.

I mean all the sort of the PLG companies you know everyone's everyone says they like want to be a PLG company which to me is like yes I want to be a high growth company that is a I don't want to have to do sales. I want to grow quickly without doing sales too. Yeah. Exactly. Exactly.

It's like I also want to be born rich and handsome but you know what are you going to do?

uh the it's it it takes I mean these companies just take a lot of bake time and I think I think if you've operated for a while and you've seen how um like if you viscerally understand patience and like if you're if you're doing random stuff or if you're like literally there's no hope then you should probably throw in the towel.

But in a lot of cases, if you're doing the right thing and it just hasn't hit yet, you just kind of uh sort of you got to play out another uh play out some more cards.

Uh and I do think I've observed a lot of financial investors having a like if it's not up into the right three months in it's like oh man we made a mistake and like what the hell are you doing?

Or I was talking to a founder recently uh who has like a financial investor on the board now and they were like your competitor is you know at 5 million in AR why aren't you at 5 million in AR yet?

Which is like I get it on one level but on another level like you just got to um I think uh I I think you got to make sure you're doing the right thing and sort of doing it in the right way.

Um so I think that was one lesson that definitely carried over from operating which I I think you kind of don't have until um I think is correlated with people who have done it and and sort of understand the the messiness of building something.

I will say conversely um at both I mean I was at Microsoft before Facebook and in both cases you're pretty insulated from like the market you're operating in.

Like I think uh once you get to a certain scale the you're you're kind of just thinking about how to build new things for your existing customers as opposed to how to really like start in brand new markets.

Um, and so I had no real intuition for how to like evaluate a business and whether it was a good business and a bad business and if it was how to think about um the like I there were obviously sales and marketing teams at both Microsoft and Facebook, but you don't really build an intuition for how to like attack a new business category, I think, unless you've worked at a startup.

So that that was all new to me. Uh, I have a question. Uh, I've I've heard founders bring up the example of Figma as a company that took a long time to get a product out into the market and get, you know, traction. It was what it was like four or five years until the first million of ARR.

Um, and I've heard founders use that as a reference point and be like, we're doing the Figma thing. Like, it's going to take a while. And I'm like, no, you're not.

they were doing something that was like fundamentally you know very technically difficult leveraging a new technology when there was no not of they were operating in a space that maybe wasn't hot for different reasons like you know sort of cloud design collaboration you know you you had I'm sure there was other players but they had sort of four years to be multiplayer wasn't a trend multiplayer wasn't a thing they sort of created that so what what would you say to founders that that tell you you know oh yeah we're doing this but then you look at the market and you say, well, you have four or five other companies that are have sort of more advanced feature sets, uh, maybe and are high, you know, it's highly competitive and um, I feel like that having the opportunity to do the Figma thing is like a luxury of being like very early.

You got to earn that. You got to be Dylan to earn that. Yeah. I mean, I I don't think Yeah. If anyone came in and said it was going to take like four or five years to build Figma, I don't one, I don't think anyone would build Figma. Two, I don't think anyone would fund Figma.

Um I I think there's an element of um like you you have to I think you have to be moving quickly in the short term like anyone you know sometimes founders will come in and say I mean what is it it's April and they will be like oh yeah we'll be ready to launch at the end of the year and unless you're like taping out silicon or something that that scares the crap out of me because I don't know there's a lot of time between now and the end of the Um, and so I I think you want someone that is just like iterating at an insane clock speed and like learning at every iteration.

And I think those iterations have to be pretty fast, but like sometimes you just don't know when it's going to start to catch. And so I I know the Figma story less well than than some of these others, but it's, you know, you were just talking to David and you Notion notion's a good example, too, right?

didn't they were toiling away, you know, doing some, you know, in in relative obscurity until they found the thing that really was magical. Yeah. One of my favorite set of videos, uh, you can find it online, uh, is there's like a notion product demo from, I think, late 2013.

Um, and it's this it's like this low code, no code environment. There's all these blocks. There's like a Stripe block so you can like drop payments in. like it's a pretty uh it's a it's a pretty wild demo uh because you see like the through line from today to what it was back then.

Um and it's clear like all the ideas are basically the same. It's like this canvas and it's got blocks and you can drop all this stuff in.

Um, but of course like the first iteration was like wildly complex and no one um no one really used it other than like a handful of like uh dieh hard folks that that that um that figured it out.

And so of course like the rethinking of it was okay make this an like an insanely great note-taking app and then go from there note-taking to Ricky and the lake.

And notion is an interesting example because I think uh there's like incredible stubbornness on the vision and I think like what Ivan has been trying to build has like not changed in 12 or 13 years. But there was like a lot of flexibility on tactics and it was like okay this thing didn't work. Let's try it again.

Let's try it again. Until something caught. And I think that's kind of the like the the the art of it is like have a really clear vision of where you're like what you're trying to build over a five to 10 year window and then but just move insanely quickly and be willing to like constantly change tactics.

I've been super excited about the idea of a email client built ground up around AI. It seems like an obvious startup idea. We saw like the the mailbox era where Dropbox bought Mailbox and there was a new email client startup every few years.

Uh now we're in this dangerous territory where you know you have a company like Notion where founder mode CEO at the helm plenty of resources clearly not asleep at the wheel understands what AI is capable of. Uh but as a as a product manager or just a user of email uh how do you think about AI in the context of email?

What are you hoping for? I have an idea in my head of what I want, but I think I might be wrong. Uh, just because that's the nature of these things. So, how would you break down that problem? How do you think about AI email? Um, yeah, I think actually this is one I've thought a decent amount about.

Um, actually in the beginning, so if I go back like two years ago, two and a half years ago, my like theory of the world of like where what what would be interesting to invest in was there's kind of like three levels of the stack. There's kind of like the foundation models at the problem.

there's all this at the bottom there's like dev tools and infrastructure in the middle and then there's like applications at the top. Um and I was like generally pretty pessimistic on the dev tools and infrastructure space because I think it's just moving really quickly.

Um at the application layer seemed like the obvious place to invest and you can kind of subdivide the application layer into like um I would say like head, torso and tail um or like horizontal and vertical, however you want to split it. Um, and I was actually pretty skeptical at the time.

It like it was clear to me like I should not be writing my own emails in 2025 or to like a very small degree. Like uh there is a massive amount of corpus. I've had like a Gmail account for 21 years at this point. Like it should just be able to write every single email for me.

Um, but it's 2025 and I'm still writing my own emails. Like it it maybe gives me like two-word completions. Uh, and I think I have two two conclusions from this. One is like the large tech companies are just I think way too riskaverse to build anything good here. Um like I I like this Google must be able to build this.

Like it it's just it seems like a very trivial problem. Um I assume like the risk of me accidentally saying something really offensive in email is just too high for them to launch anything here. Um, and so I like and I think that's kind of true at large.

Like there is also like there is not a great assistant experience yet. Like Siri is still pretty bad. You can get like the meta AI assistant is actually pretty good if you're wearing like the meta glasses, but you have to wear the glasses to use it.

Um, and so, uh, I actually think the horizontal like, uh, experiences are addressable by startups now because I I think the big tech companies are just going to be too conservative.

Um, and then in terms of like the experience that I want, I mean, I I don't actually want I don't really want I'm like pretty good at email. I'm like I'm I'm a very diligent person. I like go through all of my emails. I get a lot of them. Um, reading them is like pretty fast. I don't need it to be summarized.

If someone sends me a really long email, like I'm probably not going to read it anyway. Like I don't need it summarized. Like it is a negative signal if you send a very long email. Um the the hard work is replying to them.

Um and if something could just give like read the thing and like write exactly what I was going to write, that would be an amazing experience, especially if that worked on mobile because like composing on mobile is a total pain in the ass. Y um so I'm amazed someone hasn't built that yet.

It it doesn't seem like there seem like there are a lot of hard problems out there. that does not seem like the hardest problem. Um, and so I'm I surprised. Yeah, I mean, we're seeing a lot of like uh bolt-on AI narratives in the public markets.

Uh, are you seeing uh the AI narratives uh take hold in the fundraising around like scaleups, growth stage companies that aren't AI native companies, but they make so much sense in the context of of AI. Um I don't know that's a good question.

Um I like I think AI is like very core to notion for instance and so I think notion has like a has like a very deep advantage here. Um and I think it's just like the next evolution of notion. I think um I don't know I don't know if I have enough data points on this.

I mean the thing about AI in my view is like it is not to I never went to business school so I may get the definitions of all this wrong. It's a lay person's understanding but like in the sustaining versus disruptive innovation I think AI is like pretty clearly a sustaining innovation in almost all cases. Sure.

Um I think it like might be disruptive to Google. Um and so assuming like a scaleup is still competent and can still build new product. I think they can just kind of uh adopt this stuff as opposed to being disrupted by it. So yeah, this is the uh Salesforce for mobile was just Salesforce. Yeah.

And so yeah, you could imagine that Salesforce AI winds up working potentially or at least uh they'll they'll hold on to that for a while.

But uh it is it is a fun time because at least at the very least it's like a new battle for everyone to fight out like uh you know the Gmail team needs to pay attention because notion's coming for them. I love to see it. Uh, do you recommend sbaticals? Uh, oh yeah. Um, I most definitely do too.

I had never So, I had like worked continuously from when I was 14 years old. Um, I like worked at a startup in high school and college and then I took off like a week between college and Microsoft and like three days between Microsoft and Facebook and a week between maybe it was 10 days between Facebook and Sequoa.

Um, I took off almost two years. I I say took off because I I kept like 15 boards and so I was on like uh 30 hours of board board meetings and one-on- ones a week, but it was still amazing. I got to like play baseball with my kids uh almost every day and now they're pretty good at baseball.

Um, I knew nothing about baseball. Um, and so now I know something. Um, and I was I I think I was terrified that I would just be like irrelevant after taking some time off, but um I don't know, maybe I am, but it was like it was it was very still got it. It was amazing.

And I I just like I would rather uh like getting to hang out with my kids is like the best thing in the world. So, I feel like saying that you're on a satical allows you to release the FOMO, which like as an investor, there's probably no stronger force, right?

It's like the founder wants to talk and Oh, I should probably take this call. Why uh why why Conviction and why why partner with Sarah? I have a bunch of like, you know, guesses, but I uh I'm assuming you could have basically gone anywhere.

Um uh you know, any firm, you know, raised 500 million out the gates on your own, you know, whatever. Um so, I'm curious to hear. Uh well, I've known Sarah for a long time, almost a decade.

Um though I I recently discovered that she sent me like a LinkedIn message in like December 2016 which I did not see until like two weeks ago. But I I I thankfully ran into her in other contexts.

Uh and I think um my my theory on uh I I'd spent a bunch of time thinking about emerging managers and like what is the right strategy for starting a new firm and I think like I think one thing that is underappreciated or maybe I I certainly underappreciated for a long time is the degree to which like venture firms you know there's this funny thing where like people who work in venture kind of get like a little bit ruffled when you call their thing a company instead of a firm because it's not a company, it's a firm.

Um, but you know what, like firms and companies are like first cousins. Uh, and they're they're all just organizations.

Um, and I think that uh you know, if you're doing a startup, um, generally you don't say I have an exception to this, but generally you don't say like I'm just going to go like build the next Google like that that seems like a kind of crazy thing to do. Um, you like you start off with a market that seems kind of small.

you dominate that market, then you expand to like the next tier of market and then the next tier of market and suddenly you build something gigantic. Uh, and I think the same thing is true in venture. Like it's hard to just go out of the gate and be like, I'm going to be the next gigantic global multi-stage firm.

I think you got to like pick a market and go dominate that market and then sort of expand from there. Uh, and if you look at over the past like 10, 15, 20 years, the folks that I think have done this well, it's like Matt at Paradigm with crypto. It's Mickey at Rivet with fintech.

Um I and so I you know AI was clearly going to be uh a thing the most important thing over like the next 10 or 20 years. And so I think building a firm focused on AI and intelligent software and becoming the sort of preferred partner for founders category and then expanding from there seemed like the optimal strategy.

Uh, and I think that's very much the founding thesis of Conviction. And, uh, I think like Sarah and Pranov and the team here, we're off to an amazing start. Um, so I've known them for a while. I think the thesis makes a ton of sense. Um, and it's really fun.

I think like one thing that is underappreciated in venture, back to this like firms versus company thing, is like venture is fundamentally predicated on the idea that there are things that like a 2-year-old startup can do that like are hard for a 50-year-old company.

Um, but then when you like but venture is like not always that introspective about itself. Um, so I I think there is a belief that there are things that like a 2, three, fouryear-old startup that is in founder mode can do that maybe a 30 40 50 60 70 year old venture firm cannot. So So, so when's the IPO?

I know's going out. General Catalyst, we're hearing rumors about conviction. I'd like to see them. How have you uh what's your broad uh I'd love to give you a few minutes to talk about enterprise adoption of AI.

We talked last week about how Johnson and Johnson had basically piloted, you know, 30 plus different AI tools. Wasn't it like it might have been, it might have been like 300. I might have it off by like an order of magnitude. It was like they basically tried hundreds of tools across different teams.

It was called like the thousand and then they've just been, you know, basically culling, you know, a bunch of stuff that was cool but didn't quite work. Um what are what are you seeing as somebody who is I'm sure at times a big buyer on the other side at Facebook.

Um well I mean certainly there are there are things that are working like obviously cursor um cursor is working in a gigantic way. I think Harvey is working in a gigantic way. Decagon and Sierra seem like they're they're doing really really well.

I I I caught some of the conversation you were having with David right before this and you guys were talking about rappers a little bit and I like I I don't love the term rappers and to me there's like back to like the bottom, middle, top thing.

you can kind of like if you're going to build an interesting company, I think you either have to attack it from uh you have the handful of researchers that can literally push the state-of-the-art forward, which is like maybe eight organizations in the world or you know and understand and like love and can serve a type of customer better than anyone else in the world and just like build down from the customer.

So, you're either like building up from the technology or building down from the customer.

Um, and so I I mean I think that the companies that are working I think just like deep just have really good taste and like deeply understand what their buyers like what the c the customers need and are figuring out how to like adapt the technology to that.

And then I think there's a bunch of folks that are like not are kind of like hypothesizing what people might need but don't don't like viscerally understand it either because they haven't worked in it or they're just like they they haven't figured it out yet. And I think that's the stuff that is probably turnurning.

But I mean I think it's kind of standard at this point in the cycle like some things some things are working some things are not. I think more things will work. I think the defining characteristic will be like uh a deep focus on the customer like the the buyer and like building a great product for them.

Uh do you expect big tech broadly to get more and more inquisitive?

Uh we were talking with David too around you know just this era maybe 101 15 years ago when you had companies buying you know a single big tech company even a Twitter would buy many many many companies and it was uh probably healthy for the ecosystem broadly and then you know now you know on the show last week we spent a bunch of time talking about you know the FTC's you know what they're doing to Meta around something that happened you know many many you know over a decade to go.

Um, but I'm curious, uh, you know, what what's your outlook on on M&A? I mean, I hope so. I mean, I think all the I think it all got shut down just due to government action and I think like misplaced government action.

Um, I mean, I I I think there hasn't really been anything interesting on the consumer front in over a decade.

like probably I mean if you ignore Tik Tok and Tik Tok has like a million asterisks next to it um there I mean uh it's basically chat GPT I guess uh and chat GPT is obviously super interesting um but there haven't um you know if you look at the 2008 2009 2010 era there was Instagram there was Snapchat there was there was Uber there was there was Door Dash there was Instacart um and part of that is just like the mobile phone and obviously like all the change that that ushered in.

But I I think part of the problem is uh especially starting around maybe it's probably 2016 2017 there was just this crackdown on the ability to do acquisitions by big tech and I mean especially for consumer consumer has the this property that like very very very few things are going to work but if it works it works really big but if it doesn't work it's often like really talented entrepreneurial founders that can then either like um take what they've built to a larger company and adapt it for that or work on something else at that larger company.

And if you shut down the outs for those consumer companies, like eventually people just stop funding them. So like every year some venture capitalist is like this is the year that consumer is back.

And I just I don't think consumer will fully be back until either there's like some massive platform shift or um like those companies can get acquired. Speaking of speaking of consumer, uh I'd be interested to get your thoughts on consumer agents.

I was talking with a founder last week that had an idea for a consumer agent in the insurance space and it was a great idea.

seemed like it'd be a very very valuable product and I knew right I basically explained my point of view is that uh even if OpenAI is not explicitly saying that they're they're going to do this specific use case the sort of natural evolution is that at some point you will be able to use OpenAI to do a series of tasks like he was describing.

How do you think of the con do you see opportunities in consumer agents broadly or given the foundation model sort of emphasis on the application layer and building consumer products that it's sort of a dangerous path to be building on?

Yeah, I thought for a while there seems like there's some intrinsic tension between between being a great research lab and being a great product company. Like the with the exception of OpenAI like most of the other folks haven't shipped that much product. Enthropic is starting to ship some product.

And then OpenAI has had some uh complexity over the past couple years. Um I I think I don't I think there may just be some like intrinsic tension between being great at research and great ated product. And I think that is good news for founders that are building like horizontal products.

And so I do think I mean this is kind of like the email thing. There's no there's no great like AI assistant yet for people and it seems like it is a thing that is possible to build.

Um, I think the more general purpose you are, like if you're building something literally for multiple billions of people, I think the higher the likelihood that you're like in a really square dead conflict with the foundation model providers.

But I think I mean this goes back to the like building down from the customer. If there's some set of customers you can go build for that is even hundreds of millions of people.

Um I think I don't know like a a company um a lab like OpenAI has um like they have so many important things to work on like there has to be and I have incredible respect for for OpenAI but it's like if you have some strict stack ranking of the teams within OpenAI like only 10 problems can have like the top 10 teams on it and so if you're any if you're doing anything after like the top 10 problems that they have, then you're like by definition don't have one of the top 10 teams working on it.

And that seems like a an opportunity for a startup. Great opportunity. Yeah. Well, a great conversation. I have a lot more questions. Yeah. Yeah. We'd love to have you back soon because I mean, you can just talk about everything that's going on. It's amazing. Uh we really appreciate you taking the time. So, thanks.

Thanks so much for having me. Okay. Have a good one. We'll talk to you soon. Bye. Bye. Uh next up, we got Edward Mayor from uh I'm gonna mispronounce it. It's I think it's Machina Labs. I got it wrong the last time I tried to pronounce a word like that. Uh but we'll hear it from him.

Uh he's got a bunch of a bunch of interesting topics and he uh is going to