The Power of Courage with Jim Breyer of Breyer Capital

At Consensus 2023, CoinDesk’s flagship event in Austin, Texas, Circle CEO, Co-Founder, and Chairman of the Board Jeremy Allaire joined Jim Breyer* to discuss the legendary investor’s entrepreneurial philosophy, perspective on AI and China, and lessons he’s learned from the most innovative companies. Their conversation touched on:

  • [1:56] – Breyer’s beginnings with Circle
  • [7:30] – Investing in Facebook
  • [11:14] – Jim’s long interest in AI
  • [15:30] – A bet on China
  • [19:28] – The US dollar’s importance
  • [25:17] – Lessons from the best companies

If you’re interested in learning more about entrepreneurship, scaling companies, AI, and investing in innovation, tune in to this episode of The Money Movement.


*Jim Breyer is an investor in Circle.

Jim: Most of my very good investments were too early, backing an extraordinary team and helping to hire additional talent.

Jeremy: Hello, I'm Jeremy Allaire, and welcome to The Money Movement. I am here today in Austin, Texas, at Consensus 2023, obviously a big event in the industry. But I'm joined by a really special guest, which is Jim Breyer, legendary venture investor, investor in Circle and someone who has seen probably everything in the technology industry and the financial industry over 35 years. So I'm really excited to have you on the show today.

Jim: Jeremy, it's a pleasure.

Jeremy: Excellent, excellent. So lots for us to talk about today, maybe because it is Circle's 10th anniversary and you've been involved with me for a really long time and the founding of Circle as well. It's always fun to just share a story, but I'd love if you could maybe talk a little bit about your journey into Circle and what that's been.

Jim: Absolutely. Well, it's great to be here. Jeremy is a phenomenal CEO and leader. I had backed Jeremy before at Brightcove. We sold it effectively, including going through a public offering prior. And I knew I just wanted to back you again. And that is part of the history here. You were and are a phenomenal leader and entrepreneur. So in 2013, I remember talking to you and Sean in Harvard Square and we shook hands after the hour walk and I said, we're in.

Jeremy: It was obviously very exciting for us and have loved partnering with you over decades now. But maybe it's always fun, right? So going back in time, here I am saying we're going to build the future of the financial system on top of Bitcoin. We didn't know how it all evolved, but this is a time when all the attention on this was about the Silk Road or all this sort of stuff. And I remember joking that, you know, and and you maybe remember this, but, like, I think you and the kind of founding investing partners were kind of like, we really should get a strong legal and regulatory opinion on whether or not, if we do this, it might actually be illegal. But maybe just reflect on coming into this obviously backing an entrepreneur that you knew, but this extraordinary uncertainty and kind of deep skepticism about, can you even build something with digital currency? And what that was. And how did you think about that?

Jim: Well, one of the things I loved about our conversation in May, 10 years ago, soon to be ten years, was the product focus and the technology focus. And I still believe that is the future. Really understanding the different layers, like some of the great historical software companies. And I recall on our walk talking about the technology and the product. Bitcoin has been a crazy good ride in many ways, but it was the technology and the infrastructure that you laid out that compelled me to shake hands and go forward. And by the way I'll add, I think I've seen a lot. But you think of the last six months, there's always something new.

Jeremy: It is literally a roller coaster ride. Some people really like the thrill of a roller coaster ride and some people don't have the stomach for it. And so these are all good metaphors as well. But obviously it's been tremendous. But maybe stepping away from Circle specifically, I want to draw out some of your insights and wisdoms. As noted, you've been investing in technology that changes the world and changes the way commerce works and changes the way media works and the financial system works. All of these big changes. You've seen it for 35 years. There's not a lot of people who have that. And you have, I think, one of the best investing track records in all of Venture Capital history, which congratulations, but maybe just for the benefit of everyone, talk about the phases. It was the PC revolution in 1987 and that was before the Internet and kind of all the way through to where we are today. The arc of investing and of technology change. Would love to hear you talk about kind of that journey a little bit.

Jim: Well, our HBS class, 1987 is still the largest percentage Harvard Business School class ever to go to Wall Street. And the market crashed three or four months later, october ‘87, and I would say only 5% versus 30% remained. When I joined the business, I thought I would invest for two years and start a company. And you may remember I was on the board, an investor in macro media.

Jeremy: Absolutely.

Jim: So we go way back. I was on the other side of the negotiation and there's always challenge and so it always takes longer. I remember 2000, if we dial forward, April of 2000, everything was still going straight up.

Jeremy: Yeah.

Jim: Then the consumer stocks Internet was pummeled, but the enterprise stocks held on for about nine months and then they were pummeled.

Jeremy: Yeah. I had been public for a year and a half with my first company and yeah, I was down to the right. I don't know what the metaphor is, but yes, it was brutal.

Jim: Basically, I spent two years as a Board Member investor just encouraging companies to lay off. There was very little time spent on strategy. I did look at a couple social networking companies in 2004, including MySpace and several others and decided that it didn't hit certain metrics that I was looking for. I met Mark Zuckerberg when he was 20 and a week after we met, very similar to the discussions we had. Mark and I shook hands on a deal and so we were the large institutional investor. I invested significantly. How that works personally, it didn't work out badly. There's some good reports out today in terms of after the market close. My view, Mark, like you, like Michael Dell, Doug McMillon, there's a courageous quality of what it takes to build and continue to enhance the opportunity. And Mark is also not given enough credit. I made two important decisions at what was then Facebook invest in this 20 year old. And then after we had a disastrous launch of our advertising product called Beacon in 2007, Mark finally called and said, Jim, you're right. We need a Chief Operating Officer. We interviewed several of the most visible, best internet CEOs in the world, Sheryl Sandberg, whose final interview was at my home in the Bay Area. We spent 3 hours just discussing everything, and she started April 1 of 2008. And she is extraordinary. And the two of them built a phenomenal team. And so I was close to several of the Google founders executives, and we hired about 400 Google, mostly sales and service. So they were calling, what are you doing here at this social network? You're getting a lot of our talent. And that was really Sheryl and Mark recruiting extraordinarily well. And many of them are great friends.

Jeremy: Yeah, it's being in sort of focusing on people and obviously like great big opportunity spaces and all that kind of stuff has, I think, characterized a lot of your success. And people always ask me about you, how does Jim do this or do that or whatever. I don't actually know the answer. Maybe you'll give us all your secrets, but happy to. Yeah, but I'm always struck by how attuned you are to what the thinking is, what's going on, and sort of figuring out who are the smartest people and really tuning into them. And then obviously the kind of connectivity and the combination of that attunement and listening and figuring out who the smartest people are with the smartest ideas. I think that's part of your success. I'm just sort of sharing my own outside view. But you obviously, more recently actually, you'll maybe share the history, but for a long time have been focused on AI and focused on the enormous potential of AI. You'll tell us how far back that goes, but would love to obviously hear your most contemporary thoughts around this. And I may have some follow up questions too.

Jim: Well, my interest goes back 20 years, and I looked at a number of startups in AI. Most of them are long gone. And in 2016, a couple things happened. We were, of course, investors in Circle. I was working very closely with Harvard University and the President on the Dean of Medicine search. And of the 30 terrific candidates, there were only a couple. When I asked, what will AI and Computation mean in medicine? Articulated what it might look like. So it was the George Daley hire, and I was part of the Harvard Corporation at the time. And that's, I think, where a lot of the light bulb went off. And I'll tell you this thank you for the kind words. I don't think there's this massive distinction between great public companies and the great private companies. My journey with Walmart was a cold call to Rob Walton in 2000. And he said, Jim, next time you're in Bentonville, Arkansas, we'd love to have you come by,

Jeremy: Which will be next week.

Jim: You absolutely.

Jeremy: When they got it right. You should come to Bentonville. You go.

Jim: By the way, I'm in Bentonville next week. And so the story is unreal. Much of Silicon Valley at the time was extremely dismissive of Walmart costco target. The future would be eBay versus Amazon. What struck me on that personal journey, I flew into Bentonville, Arkansas, northwest Arkansas Airport. Rob said, There will be a car that you can pick up and drive. And of course, it was his car. And I'm driving down Walton Way, getting ready for a dinner and then next set of meetings. And what I can really say is what I have grown to appreciate is really, really good succession planning. So I was part of the Doug McMillon discussion. We looked at some outside individuals, and Doug, like Michael Dell and a number of the people I've been very fortunate to work with, incredibly courageous. And when I sat down with Doug two months ago in Bentonville, the fact that he remembers and I remember he was the University of Arkansas grad who joined Walmart out of the University of Arkansas. And I'll share with Doug, how do you manage 2.5 million associates worldwide? And he'll say, that's much easier than your day-to-day business, seeing two or three years out. What are the corners we have to think about? That's been part of the great journey. I've been on the Board of Blackstone since 2016. I formed with George Roberts and Henry Kravis, Accel-KKR, in 2001. And I've been part of some remarkable public and private companies.

Jeremy: Yes, indeed. I think one of the themes I want to come to and The Money Movement, obviously, we talk about a lot that's specific to digital currency and the financial system and all this. But now and then we journey into kind of what's happening at a global macro level, and we journey into the shifting landscape politically as well, because all this at the end of the day, impacts the way that money works in the world, the way that economic systems are organized. And you were very early in making a bet on China and on the transformation of the Chinese economy and growth. And I want to start just by hearing about that and how that has unfolded, but then I want to kind of bring it more contemporary. But let's first hear a little bit about that, and then I want to get your take on kind of the global landscape a little bit.

Jim: I met with the co-founders, Hugo Shong, Quan Zhou in 2004. And part of the reason I set up the meeting again, a cold call. We at Accel, had started Accel Europe in 2001, and the founding partner of Accel Europe was my HBS section mate, Kevin Comolli. I spent the next couple of years thinking we have a great European office and presence, but what do we do about China and India? And I flew to Beijing in 2004. We shook hands on the deal about a year later. And that was the formation of the partnership that I'm so proud of. They're two of my best friends in the world. Here we are a number of years later.

Jeremy: Yeah. And obviously prescient in terms of just sort of seeing the kind of unleashing of growth in the Internet sector and technology sectors in so many industries around the world and in China. There's a lot of talk in the world of currencies about, is the dollar in a competition? I mean, it is, right? I mean, that's obvious, right? But is the dollar in a competition? There's a lot of talk about de-dollarization, the Bricks kind of alliance, thinking about how to construct an alternative monetary and payment system that's outside of the US. And I've always felt strongly that the world is better off, obviously, if we have economic systems that are well-connected and we have monetary systems that are well-connected, in many ways. My hope for global digital currency from the founding a Circle was this technology actually could advance that. It could advance a more integrated, high velocity economic engine on the Internet for the whole world. China, Europe, the US. India, India, all these growth markets everywhere. So that sort of vision, I still believe that very strongly. But with these themes, the decoupling themes and all this, where do you think we are? And how real do you feel that? I mean, it's real in that there's lots of people shifting different manufacturing, doing other things, but there's also a major new Tesla plant in Shanghai and in Austin, Texas, and in Austin, Texas, and in Berlin or wherever it is in Germany. And so the global reconfiguration is sort of maybe more ambiguous than is made out. But what are you seeing there?

Jim: We last were together in Davos a couple of months ago, and I just really enjoy being intellectually curious and speaking to leaders in France, in Germany, the UK, Brazil.

Jeremy: Yeah.

Jim: Argentina. My view is the US dollar is the worldwide fiat currency. It'll weaken, I believe, if I have to I'm not sure. Short seller?

Jeremy: No.

Jim: That's not my business. But my view is the European countries recognize, particularly the finance leaders, there needs to be a worldwide stablecoin in addition to the dollar. India again, the meetings two months ago, similar. Each country within Europe, of course, is different. There's an opportunity in Africa, of course, where we've made several investments. Latin America is challenged. Singapore is unstoppable. And there are certain regional hubs I would bet on again and again. I'm a big fan of the leadership in France and many of the leading founders, CEOs. I first met Bernard Arnault in France in 2001, where we met together for about 6 hours.

Jeremy: Amazing.

Jim: Remarkable. So I've been very lucky and fortunate, but every, particularly with the technology trends, technology is unstoppable. We can talk about valuation and what it might be, but when I think of Meta, which reported today Alphabet, where Ruth Porat, their CFO, is a Co-Board Member at Blackstone, when I am fortunate at Blackstone to see the world and walk through the geographies again, Jon Gray and Steve Schwarzman, they're breathtaking. The global nature of many of these markets, whether it's commercial office or whether it's the different regions, is a puzzle which I love to try to solve.

Jeremy: Yeah, it's fascinating. There is this kind of feeling of a reconfiguration that's happening. Right. The superstructures of post World War II kind of made sense then, but boy, the world is different now. And so we're definitely seeing this, and it actually increases my conviction about the prospects for blockchains and this connective tissue that can kind of bring all these different geographies economic systems, others, together directly on the Internet. It's fascinating, but I think you maybe remember, and I share this a lot to people because they kind of ask, how is it going at Circle? Or what do you think about the future or other things? And I tend to remind people that when we founded the company ten years ago, I remember telling you and telling all the founding employees like, this is a 10 to 20 year journey. I was very clear. I was like, this is the kind of change that's going to be possible from an Internet of value exchange, like a real upgrading of the Internet to support value exchange writ large, right? It's a 10 to 20 year, if not 30 year journey. But on the other end of that,

Jim: You told me 10 to 20..

Jeremy: Well, now I’m saying 30.

Jim: I'm smiling.

Jeremy: All I'm saying, you should be happy. What I'm saying is, I've got another 20 years in this.

Jim: I am happy about that.

Jeremy: Ten to 20 years, right. And I remember talking about at board meetings, we think it'll take about four or five years for this to be able to happen, and that will unlock this. And doing big things takes a long time. Walmart Ecommerce, I mean, you were there when you were like, we got to do something, right? And now look at that. They're crushing it. It's like, I buy stuff from all the time. Right.

Jim: Good to hear..

Jeremy: Yes. But in all seriousness, these investments in these changes, they take a very long time. And I feel like you again, with your investing history over decades, you can see that. And what do you think over the next ten years? What do you think are going to be some of the defining, technology driven shifts that ten years from now, we're going to all go, oh, my God, I cannot believe how much the world has changed from that. Because you can look back and ten years before and ten years before and you're like, holy cow, things have changed. So what do you see in the next ten years?

Jim: Well, it does take ten years or so. Most of my very good investments were too early, backing an extraordinary team and helping to hire additional talent. The other set of lessons I've learned, the very best companies, whether it's Dell, Walmart, Meta, the first 30 minutes of board meetings are always about what's not going well. So there are some characteristics where I think that's what, whether it's a big bank, whether it's a big retailer, whether it's a startup, one has to understand dialing forward, the investments take time and you can never quite predict what IPO windows look like. M&A and that's my view. Ten years from now, I am absolutely convinced Circle will be far, far, far more valuable than it is today.

Jeremy: I'll buy that for a dollar. Well, I appreciate that and certainly have very high conviction on the opportunity there. It's a fascinating kind of space to be in when maybe coming back to another theme, which is AI and ten years out. It seems like the breakthroughs in AI are by the day like the compounding effects. We're in this compounding phase, which as everyone is sort of saying, it's compounding so fast that it's dangerous. We had Kurzweil talking about super intelligence and that kind of being in a 2030 time frame. Is that actually coming faster? Are we going to see AI superintelligence or what we think of as autonomous kind of AI faster? And what are the implications of that?

Jim: It's happening extraordinarily quickly and part of my job is to help Breyer Capital portfolio companies hire the best and brightest out of many of the leading technology companies in Silicon Valley and Seattle. I also spend a lot of time with the leaders. There is absolutely no question we're at the beginning. And Microsoft and Satya, Larry and Sergey going back into Alphabet,

Jeremy: Mark too, right?

Jim: Mark Zuckerberg, who's doubled and tripled down for over a decade in AI. These are among the megacap leaders that will lead when it comes to AI. This is why startup investing can be so compelling. It's not winner take all. And my view is there will be six to twelve companies, ten years from now that have a trillion dollars of market cap or more. How we get from point A to point B is always a challenge. I would also add a personal story. I was at Stanford in 1982 as an undergrad and I needed a summer job. Steve Jobs had been visibly public. I sent him a cover letter and quote unquote, a resume. And Steve, who became a great friend, forwarded that to the VP of Marketing. And my journey back in the day, I was still a college student, was summer and part-time at Apple.

Jeremy: Amazing. That is tremendous. Well, maybe just kind of end by once again thanking you for your partnership over the years, sharing your wisdom constantly and being able to share that here. Any parting thoughts for all of us on what's important?

Jim: I'm very fortunate at Breyer Capital to have Ted Breyer and Daniel Breyer as core partners. The way they come at new business investing is illuminating my view. One, have multigenerations around the table. Two, always be thinking about who are the AA+ people to recruit. Stanford, MIT, Harvard, University of Texas will be the grounds of much of this breathtaking talent. And so my day job is to visit the top universities and several that are not perceived as top universities and meet with the mathematicians, meet not only with the computer scientists, but the linguistic leaders. I think we are at the beginning of the most interdisciplinary set of investment opportunities that I've ever seen. Once upon a time, I could back the four brilliant engineers,

Jeremy: Computer scientists, whatever, yeah.

Jim: Out of Stanford or MIT. Today, that's not enough. We need that talent. But the great companies will have domain expertise and an understanding. One has to be multigenerational. And two, interdisciplinary. Those would be the Breyer Capital investment themes at this stage.

Jeremy: Awesome. Thank you very much for joining us here today, Jim.

Jim: Always a pleasure. And Jeremy, may I say, as an investor, what matters most is the founder and the founding team and how great people are recruited. When I think of today's great market caps and technology, they are founder-driven to this day. And so I really appreciate being part of the Circle journey.

Jeremy: Thank you again.

Jim: Thank you, Jeremy.

Jeremy Allaire
Co-Founder, CEO & Chairman at Circle
Jim Breyer
Founder & CEO, Breyer Capital

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