Yahoo Finance Presents: Jeffrey Katzenberg & Sujay Jaswa

Yahoo Finance’s Alexandra Garfinkle sits down with WndrCo Founding Partner & Fmr Walt Disney Studios Chairman, Jeffrey Katzenberg and WndrCo Founding Partner, Sujay Jaswa to discuss Jeffrey’s journey to VC, Sujay’s business philosophy, and WndrCo’s investments.

Video transcript

ALEXANDRA GARFINKLE: Welcome to "Yahoo Finance Presents." I'm Ali Garfinkel and I'm here with former Disney chairman Jeffrey Katzenberg along with former Dropbox executive Sujay Jaswa. Thank you so much for both of you for joining us.

JEFFREY KATZENBERG: Great to be with you today, Ali.

ALEXANDRA GARFINKLE: It's really good to have you here. So we're going to go back and forth with some questions. We'll start with you Jeffrey. So you've had this kind of storied career in entertainment. You were the chairman of Disney. You were the co-founder of DreamWorks. And now you're a VC at WndrCo. So kind of walk me through this trajectory a little bit. What's been driving your interests both then and now?

JEFFREY KATZENBERG: Sure. Well having a fantastic four decade plus career in movies and TV and animation. And when I sold DreamWorks six years ago, I really wanted to do something different and unique. And I asked myself, if you were 23 years old today, what would you be doing? And the answer was pretty obvious. I'd be in Silicon Valley and I'd be in digital technology.

And one of the things I've tried to do as much as possible over the years is to know what I know and more importantly, know what I don't know. And in this case, there was so much for me to learn. I wanted to go out and find some great partners, mentors, people who I could really share the journey with. And I was very lucky to meet Sujay who had just come off of an incredible run of partnering with Drew Houston and building Dropbox and his interest in terms of career wise what he wanted to do really synced up. And so we partnered up now about six years ago. And I found somebody half my age and twice as smart, which I recommend to everybody viewing today. Just go do that.

ALEXANDRA GARFINKLE: Which kind of brings me to you, Sujay. You were Dropbox's first ever executive. You helped shepherd the business through some pretty crucial years. I think the number I found was that as CFO, you helped bring the company's valuation from $18 million to $10 billion. So this is kind of a two-parter to sort of get us started, which is first, what's your philosophy on growing a company? And then specifically when it comes to Aura, what makes you believe and invest in a company.

SUJAY JASWA: So thanks. Thanks again, Ali. In terms of hyper growth, there's so many different things that are being thrown at you that you can always get distracted. And so my view is there's really just two things that matter. One is building great products for your customers and two is hiring amazing people.

If you do those two things and you get everything else wrong, you're going to be just fine. But if you get everything else right and you get one of those two things wrong, you're going to put yourself in a really bad situation. And so, so that's really how I would think about focusing.

ALEXANDRA GARFINKLE: And then when it comes to Aura specifically, what kind of made you believe in them?

SUJAY JASWA: Well, the first thing is that Hari, the CEO, is one of the most spectacular entrepreneurs that I think Jeffrey or I have ever worked with. He is a rare combination of being extremely technical, but being very customer-centric, business minded.

And so when the opportunity to really partner with him to build the business or really to create the company came available, that was exciting to us. And then the other thing that really matters a lot is when Jeffrey and I think about which businesses that we want to really get behind, again we go back to that true north of does the customer have a real problem that nobody else is solving? And I think in the case of security, the really funny thing is there's been, I mean there's been a tremendous amount of media coverage around it.

If you think about privacy issues, security issues, where digital threats are coming from, it's everywhere. And yet at the same time, nobody was actually doing a good job of solving the problem. So the problem was growing exponentially. But the solutions weren't coming. And that's what made it such an awesome opportunity.

ALEXANDRA GARFINKLE: And then for you Jeffrey, Aura is a service that's about simplifying digital security for consumers who may or may not be super tech savvy. And it's something I find really appealing as a consumer, particularly in the wake of the pandemic. For you, when did Aura kind of come into the picture and what drew you to it?

JEFFREY KATZENBERG: Well, great question. I think when Hari and Sujay articulated such a clear perspective on this, that for me, I'm a digital idiot. So I actually even though I was helping him get his camera, I actually don't really know much of anything. And when they pointed out, think about this.

In the last 10 years, all of us have invested in securing our personal property. So we have nest cameras, alerts, alarms, ring doorbells, all of these things that we've done to just sort of protect our physical stuff. But our lives now are on these devices. And it's not that there are no solutions on these devices. There are hundreds of them.

So which ones do I need? And that I thought was really the brilliance of what these two guys really sort of pointed out from a consumer standpoint. It was such a clear vision of, let's go bring together the very best features and functions that would actually give somebody a really robust, full menu of security around their personal devices. And I thought, wow. Like I need that. And I think all of us need that.

ALEXANDRA GARFINKLE: And kind of to that end, this is for you, Sujay, Aura raised $200 million in 2021 at a valuation of more than $2 billion. So I'd love to hear your perspective from not only in terms of growth, but in terms of where you see Aura going, its trajectory, and how you're seeing that capital raised last year deployed.

SUJAY JASWA: So here's the funny thing. If we do what we're trying to do, hundreds of millions of people should be our customers. It's one of the few-- like everyone says things like that. But it's one of the few product categories in the world where, if that happened, that would not be a weird or surprising thing.

We don't have to like do anything beyond deliver an awesome product for that actually protects people. And so the real purpose of the money is two things, or three things. One is hire amazing people, which the team is absolutely killer. The second thing is continue to build a phenomenal product, the best in the market. And the third is make customers and consumers aware of it and really use it to develop our go to market efforts.

ALEXANDRA GARFINKLE: Which, kind of going off of that, this can stay with you, Sujay, and Jeffrey, if you have thoughts I'd love to hear them. Talk to me a little bit about the education piece of Aura and how you guys think about it. Because I mean, it's one of those things where everybody has this cellular device that is so powerful, unspeakably so, compared to what we knew even 15 years ago.

But not everybody understands it. So for you guys. How do you sort of think about where Aura fits in building up that education?

SUJAY JASWA: So, first of all, it's about pointing out things that are-- problems that are in plain sight. So for example, all of us now are getting an absurd number of robocalls or spam texts. Some of those are-- there's some weird marketing purpose. But the vast majority of them are oriented towards trying to figure out how to trick you into giving away your bank account information or something like that.

And while all of us think we're too smart to fall for that, there's a reason so many people are putting so much effort into scamming people in this way. Some people are falling victim to these sorts of things. And if you point that out to everyone, there's not a single person I've talked to in the United States who when I say, hey, do you get too many spam calls, they don't just start nodding their head vigorously.

It's an obvious problem. It's just that we've all gotten used to the idea that it's part of our life. And so, Aura, our job is to point out that for all of these problems that are obvious online, we don't just have to take it lying down as consumers. There's actually a company that can solve these problems for us, prevent these kind of nefarious things from happening, and do it in a way that's honestly quite simple and easy to implement.

ALEXANDRA GARFINKLE: And then kind of for you, Jeffrey, one of the things I wanted to ask about, from an outside perspective, the entertainment to VC investing in cybersecurity pipeline isn't obvious. So I wanted to--

JEFFREY KATZENBERG: Really? I don't know why you would say that. I think it's the most obvious thing in the world, Ali. You're just not using your imagination.

ALEXANDRA GARFINKLE: Well that's actually what I wanted to ask. Because I have to ask about Quibi and where it kind of fits into this trajectory. But one of the things that I have been interested in for you is that I imagine there are more commonalities than one thinks or that there's a clear throughline that you see from your vantage point that other people don't necessarily see.

JEFFREY KATZENBERG: Well it's a handful of things I think go into it. So one, I am attracted to entrepreneurs. I've been one my whole life and mine has mostly been in the entertainment business. But the qualities of those people, the characteristics of dreamers who have ideas, have passion, have ambition, commitment, drive, they're similar characteristics.

They are similar people and I'm drawn to them. And I love being as I was in the really in the entertainment space, I love being sort of the wind beneath the wings of those people. I love helping them realize their ambitions and their dreams. And so to me, I just really feel like this is a natural continuation of it. And you know, I find it just extremely rewarding.

The other thing is that I have been on the side of both selling to consumers and being a consumer and I think a vast experience about how you go to market, how you do reach people, how you communicate, how you tell a story. Everything is storytelling. We're doing storytelling with you right now on this today.

What Sujay just talked about in terms of, well, how do you get people to understand why Aura is essential to them in their life. That's storytelling. And so it's just an easy natural place for me to go to in helping another sort of cohort of people and their storytelling. And that's been really fun, rewarding, exciting, and different.

SUJAY JASWA: Ali, just to add to that. Like basically what I have seen Jeffrey do that I've not really seen anyone else do, is he pushes entrepreneurs who are, in many cases, very talented, very ambitious people, to think even bigger than they were thinking before they talked to him. Like that is a remarkable-- and because it's coming from Jeffrey, they actually really do it. You know what I mean?

It's kind of an amazing-- it's an amazing thing. So yes, he has like incredible connectivity in the worlds of business and marketing and he's an amazing storyteller and has amazing access to storytellers. But that's really to me, that's just a piece of it. The other piece of it is helping these entrepreneurs realize how big what they're doing can actually be.

ALEXANDRA GARFINKLE: That's really interesting. So it sounds like Jeffrey, in your experience, is someone who can help elevate the vision of something.

SUJAY JASWA: Totally. Does it every day.

ALEXANDRA GARFINKLE: That's really interesting and it makes sense. The last thing I wanted to be sure to ask was WndrCo seems to invest in a wide range of companies and sectors. I was looking at some of your recent deals. I saw internet infrastructure with meter and food/pop culture with Popchew. So I kind of to that end, I mean, it seems like you guys are really interested in those kind of big visionary moves.

But I also was curious just on a day to day basis, a deal-making basis, what kind of deals is WndrCo most interested in? And this is for both of you actually. I'd love for both of you to answer.

JEFFREY KATZENBERG: Let me let Sujay go first.

SUJAY JASWA: Well there's three kinds of-- there's three categories of investments that we make. So the first is, we actually have a separate seed fund run by our partner, Anthony Saleh. And really, like that fund prioritizes great entrepreneurs with big ideas. And you know, you're investing it usually at the very beginning of a company's journey. And so it's really about the entrepreneur. And that's one category.

The second is what we call our growth investing. And this is where a company has already gotten product market fit. And we're deploying capital and whatever else they want from us. And usually we're doing it with other investors. We work really well in those investments with some of the best investment firms in the world. And that's a category.

And then finally and this is the part where Jeffrey and I have the most fun is what we call our build investments. And this is where we're really rolling up our sleeves and we're sort of behaving like the founders behind the founders. And in many cases, we'll dive in operationally if the founder wants us to or a bunch of other things. And those are honestly, those are the most rewarding in a sense because we're actually in many ways, they wouldn't exist without us even though we're behind the scenes.

ALEXANDRA GARFINKLE: The founders behind the founders is what you guys kind of say it sounds like.

SUJAY JASWA: Yeah, internally usually. But no, that's right.

[LAUGHING]

ALEXANDRA GARFINKLE: I won't tell anyone. We're just recording this. What about you, Jeffrey?

JEFFREY KATZENBERG: We're OK. It's all good. I think Sujay articulated it. I would just say that in terms of categories where our main focus is really the future of work and cybersecurity, those are really the two lanes in which probably 80% of our interests and our investments and our efforts are being made.

ALEXANDRA GARFINKLE: That's all for me. Thank you so much for joining us.

JEFFREY KATZENBERG: Well, thanks for having us. Appreciate it and you and thank you for the time.