Technology is like fracking, spreading all over the economy. That's how Michael Moritz, chairman of Sequoia Capital, described the environment in which the venture capital industry plays.
"If you go back 30 years and think about where technology had gone in the economy, it was in niches and crevasses, far more limited than today," he said in conversation with Adam Lashinsky at the Fortune Brainstorm Tech conference in Aspen, Colo. "Now, technology has gone fracking all over the economy."
Moritz, who was knighted this year, has a long history of tech investing, including Google, Yahoo, PayPal, Yahoo, LinkedIn, YouTube, and Zappos.
Moritz thinks of himself as more than an investor. In fact, he "blanches" at being called an investor. "It's a catch-all term that anybody with checkbook can say, 'I am an investor.'"
He views himself as a co-owner who isn't running the company but brings more to the table than the checkbook investor. "There is a substantial difference if you have a 'partner' who owns a meaningful part of the company, and is concerned, worried and thinking about it and has lots of resources to contribute," he said.
Moritz also invested in Webvan, a home delivery service that went bankrupt during the dotcom bust after more than $800 million in losses. Recently, his firm has invested in new generation delivery service, Instacart.
"It's a way to escape the enormous capital infrastructure burden that was so tricky and complicated in Webvan," he said. Webvan attempted to build everything itself, whereas Instacart is more like the car service, Uber, working with independent contractors to attend to grocery shopper needs.
Moritz, who wrote a book on Apple during his prior career as a journalist, was asked about the company's future. "It's best growth rates are behind it...we'll see if good days are ahead when they introduce new products," he said.
Asked to speculate on whether Apple can deliver breakthrough products, he said, "We will have to wait and see. I'm not going to offend people at Apple who are all working super-hard to not disappoint themselves." Sequoia was among the first investors in Apple, putting up about $100,000 in 1978.
Sequoia has also invested in online payment services, such as Square and Stripe, but Moritz doesn't regard Bitcoin as a solution to making payments easier and removing barriers that create friction in financial transactions. "You know when the Winklevoss' get into the business, it's serious," he joked, dissing the twin brothers who famously sued Facebook's Mark Zuckerberg over breach of contract and have filed for an IPO of the Winklevoss Bitcoin Trust. "It will be extremely difficult for Bitcoin to seep anywhere close to the mainstream," Moritz said.
On the practice of pivoting -- companies, especially startups, that need to change direction radically to survive -- Moritz was empathetic. "Pivoting is a near death experience....you are down at the hedge row level, and the branches are going through the fuselage," he said. "I always think about it as a very close family member who is very involved in running the business and worked incredibly hard. People who haven't done it, don't understand how taxing and demanding it is, and the emotional toll." He asks if it would be worth the stress for the "close relative" to spend the next two or three years trying to salvage the operation or to sell and move on to something fresh and more promising.
Moritz is not a fan of selling companies before their time. He gave an example, the online shoe emporium Zappos, which was sold to Amazon for nearly $1 billion in stock and cash in July 2009. Zappos' founder Tony Hsieh wanted to stay independent. In the Fortune interview, Moritz said that he was worried that Zappos' financing could dry up. In 2008, during the height of the U.S. economic crisis, Zappos had a $100 million line of credit to fund inventory from Wells Fargo, and one person could have changed his mind and withdrawn it, Moritz explained. "Clearly, when we were originally involved with Zappos our desire was to have a stand-alone company," he said.
It didn't turn out badly for Moritz's firm. Sequoia had invested $48 million in the Zappos, and made $248 million, according to Hsieh.
The humble billionaire venture capitalist offered advice to those who want follow in his profession. "You could have put a chimpanzee in Silicon Valley in 1986 and it would have been successful in the venture business," Moritz said. "People just have to follow their instincts and do what they think is going to excite them every day."