Michael Moritz: Tyler Cowen Interview Takeaways

In a gas chamber at Dachau, the ovens had been scrubbed clean. Michael Moritz stood inside it last summer while a group of high school students scrolled through their phones nearby, AirPods in, bored. He closed his eyes and tried to imagine the heat, the smell, the sound. He could not really get there. The room was too spotless, the distance too complete (21:12). That gap between memory and evidence is, in a way, the subject of Moritz's new book, Ausländer (German for foreigner), and it turns out to be close to the same gap he has spent decades trying to close as a journalist and a venture capitalist: the distance between what a person or a company looks like from outside and what is actually happening inside.

Moritz's parents were teenagers, both around 14, when they escaped Nazi Germany for Britain, one of the few countries that took in Jewish refugees, even with quotas (02:34). He grew up in Wales, in a Jewish community that had shrunk to a few hundred families by the 1960s. He describes Welsh and English prejudice as roughly interchangeable, both symptoms of a country that, at the time, treated almost anyone unfamiliar as an outsider (03:07). He left for university at 18 and never really went back.

What he took with him was a habit of close looking, learned first from his mother, who left school at 15 and loved museums despite feeling, in his words, inferior to people with more schooling. She took him to Wales's National Museum, where a small collection of Impressionists, and oddly, Francis Bacon, caught his eye. He bought his first picture at 13 (06:10) and still owns it. Decades later he told Tyler Cowen that looking hard at demanding paintings, the kind other people find ugly or hard to live with, sharpened the same skill he uses to size up founders: watching carefully and listening carefully before deciding whether to trust someone with money (09:35).

He got a similar education, by accident, from novelist Philip Roth, who taught a seminar Moritz took at the University of Pennsylvania. Roth assigned short Eastern European novels rather than six hundred page classics, so students had time to actually absorb what they read, not just finish it (11:02). Roth later wrote Moritz a recommendation for a job at Time magazine, and, years afterward, the two shared Thanksgiving dinners in New York until Roth's death.

The Ledger of Exile

The instinct to look past the surface also sent Moritz back into his family's history for Ausländer. He traces German anti-Jewish law back centuries before the more familiar horror of the 1930s: Jews were barred from most professions and tolerated mainly as peddlers, cattle dealers, and merchants, with an occasional court Jew allowed close to a monarch to help finance wars (16:58). The resurgence people usually date to the late 19th century, he argues, actually intensified after the First World War, fed partly by refugees fleeing pogroms in the East (16:08). He resists the idea that any of this is unique to Germany. Prejudice against Jews, he says, is a condition of the human race that flares up whenever people feel left behind by their economy or their government, a description he thinks applies as easily to current politics as to 1920s Munich (18:17).

What he actually learned from years of research into his grandparents Max and Minnie, killed in the Holocaust, was less a grand theory than a practical rule.

"The one lesson that I took from working on my book was you can never have enough passports." Michael Moritz, [23:04]

He was not being dramatic. Moritz has since added German citizenship to his British status, not because he expects to be forced out of San Francisco, he says, but because Germany, in his account, is the one country that genuinely teaches its own population the history of the 1930s and the Holocaust, unlike Britain, France, or the United States (23:04).

Obsession as a Method

The same appetite for looking closely explains, in a roundabout way, how a classics professor's son with no engineering background ended up running one of Silicon Valley's most successful venture firms. Moritz moved to San Francisco in the early 1980s to cover technology for Time, at a moment when Apple, newly public, was selling only 100,000 to 150,000 computers a year (26:11), a volume that today would barely register. He had never met anyone who started a company, let alone one founded by someone 18 or 20 years old, an idea that simply did not exist in the Wales he grew up in (26:39). Covering Atari, Apple, Microsoft, and Oracle as a reporter led him to the small circle of people who financed them, including Sequoia's Don Valentine, who eventually hired him despite Moritz having, in his words, not an ounce of technical background (28:01).

Asked what people get wrong about Steve Jobs, whom he got to know fairly well as a journalist for Time magazine, Moritz points to something less flattering than the usual visionary story: Jobs's stoicism, and the way he fused the temperament of an artist with that of a capitalist, especially during the years he was pushed out of Apple and had to rebuild (28:20). He places Jobs alongside Bill Gates and Elon Musk, entrepreneurs he considers obsessives above all else. The purest version of that obsession, though, belonged to the painter Frank Auerbach, a friend of Moritz's whose work he collects. Auerbach painted every day of the year except Christmas, when he allowed himself a trip to Brighton Pier, until he decided even that single day was stealing time from the studio, and stopped going (30:27).

Moritz applies the same close observation to countries. He and his colleagues at Sequoia began visiting mainland China in the early 2000s and found something that upended their assumptions: for all the talk of Communist Party control, China had a thinner social safety net than the West, so people succeeded or failed by their education and their wits. That, Moritz argues, made early 2000s Chinese capitalism more intense than anything happening in the United States at the time, and it shaped nearly two decades of Sequoia's investing there before conditions tightened in recent years (31:35).

He turns the same lens on Britain and finds decline rather than intensity. A country that once controlled the world's reserve currency and its largest navy has never, in his view, recovered from losing that position to what he calls an entrepreneurial country, and has cycled since between governments that treat the state as the answer and governments that treat it as the problem. His verdict is blunt: Britain suffers from the residue of imperial arrogance and, now, from too much government (38:59).

Moritz's own arrangements changed after he was diagnosed, about 20 years ago, with an incurable blood cancer. The diagnosis did not make him more efficient, he says; if anything it made him less efficient. But it did make him determined to control his own calendar, rather than let obligations that were not part of the life he wanted crowd it out.

"I did not want to be imprisoned by obligations that only form part of the life I wanted to lead." Michael Moritz, [37:45]

That same instinct, guarding the calendar so curiosity has room, runs through everything else he described: the paintings he collects because they reward years of looking, the Booker Prize submissions he reads even though he has no say in the judging, the housing shortage he now calls the single biggest problem facing California (36:55). Asked what he wants to learn about next, he did not hesitate: Iran, not the country in the news today, but Iran of the constitutional era around 1908 to 1911, and the decades leading into the 1950s, a period he thinks still explains a great deal of what the region confronts now (40:26). It is the same move he made with his own family: pick an unfamiliar country's most difficult decade, and go looking for what actually happened inside it.