How startups can continue to innovate over long time periods

Edited excerpt from a Y Combinator interview with Michael Moritz:

Most organizations are capable of maintaining a consistent level of exceptional performance through a year, or five years, maybe ten years. Very few are able to do it over multiple decades. How have we done it?

1. Yesterday is irrelevant. The best leaders want to make sure that their product is fresh, that it changes with the times; that they never rest on their laurels, or get complacent; that they always have an element of insecurity about feeling that they can always get eaten by a competitor, and that past successes don’t mean all that much. All your past success is yesterday, and it’s irrelevant to the future.

2. Maintain a fresh team. You have to focus on the team. Field the best team at any one time, no matter how long people have been with you. Don’t be unfair, or ruthless, or harsh; but detached, objective and clinical about the performance of each individual. No matter how well they’ve performed in the past, if their heart is no longer in it, if they no longer have the burning desire to compete, it’s time for them to move on. Bring in young people who have zest, ambition, energy.

3. Change with the market. Stay alert to market opportunities. When we started a long time ago we were just here in Menlo Park, but the world of technology has changed, because of what’s happening principally in China. So about 12, 13 years ago, we started a business in China because we felt that, over time, it was going to be increasingly important for Sequoia, for the companies that we have investments in in Silicon Valley, to really understand the Chinese market because of what was going to happen there.

Notes:
(1) Re. Maintain a fresh team — for practical advice, see: How to hire – drill a well before you need a drink.
(2) Re. Change with the market — contrast that with The question that Amazon answers to set its strategy.

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