Carl Eschenbach returns to Sequoia as the AI era demands operator wisdom at portfolio companies

Summary

Carl Eschenbach rejoined Sequoia Capital as a partner two months after stepping down as sole CEO of Workday, returning to the firm where he had previously served as a partner for six years. Conversations with Sequoia began within five minutes of his Workday departure, with every partner at the firm texting to ask when he'd come back.

Eschenbach frames the return as driven by a mission to mentor founders and portfolio companies during what he calls the most massive technological disruption in human history. Rather than join another operating role at a large company or AI lab, Sequoia's platform lets him engage across many companies simultaneously and bring operator wisdom around leadership, scaling, and navigating rapid change to a generation of founders moving at unprecedented speed.

Why venture capital still matters

Speed alone isn't enough. Companies raising multiple rounds in quick succession often don't know what to do with the capital. The real differentiator is talent density and directional clarity. Market conditions shift constantly. Foundation models improve weekly, changing the raw ingredients available to build products. The best founders stay agile: when technology shifts underfoot, they pivot without getting caught flat-footed.

Both partners stress founder attributes that can't be taught: grit, determination, attitude, and willingness to experience pain and reflect honestly on failure. Eschenbach points to self-awareness as critical. Founders need to know what they're genuinely excellent at and be willing to delegate the rest rather than trying to do everything adequately.

Enterprise software is durable, but the layers are changing

On whether AI will disrupt incumbent SaaS companies, both partners push back on the doomsaying narrative. Systems of record such as Workday, Salesforce, and ServiceNow sit at the base. Systems of engagement and workflow applications sit above them. A new layer of agentic systems now sits on top, accessing all the data and context from the record layer to do actual work.

Incumbents with strong systems of record are relatively safe because they own customer data and business processes that agents will need to access. Workflow companies in the middle face more pressure; they're neither the core record system nor the agentic capability. AI-native companies on top will proliferate, but they succeed by wrapping context and guardrails around foundation model capabilities.

The real outcome is both incumbents and new entrants thriving in different spaces, not one displacing the other. Workday's 98% gross retention rate across 11,000 customers (65% Fortune 500) suggests incumbency is durable. Scale, security, and compliance still matter in enterprise. New companies built from scratch can move faster, integrate fresh AI approaches day one, and disrupt legacy markets that lack the data or workflows to compete.

Build and buy for Fortune 500s

When asked whether large enterprises should build or buy agentic capabilities, Eschenbach advises doing both. He points to Workday's acquisition of four AI companies in his final six months as CEO, bringing in specialized talent and capabilities while letting internal teams focus on core workflows where competitive advantage actually lives. Why ask your best engineers to build something a specialist company such as Harvey for legal, Sierra for support, or Expo for pen testing already obsesses over every day? The time-to-value calculation favors buying proven solutions and reserving internal talent for what's unique to your business.