Renowned Silicon Valley venture capitalist Michael Moritz faults US immigration policy for discouraging overseas entrepreneurs from starting up in America. Speaking to paidContent:UK at a Cardiff Business Club lecture on a visit to the Welsh capital of his birth, Moritz, who made early investments in the likes of Google (NSDQ: GOOG) and Yahoo (NSDQ: YHOO) for his Sequoia Capital, said restrictions introduced following 9/11 “won’t surface as a huge issue until several years from now, when the crop of people who have (not come to America), their absence will begin to be noticed … In California anyway, hiring engineers is much more difficult than it’s been for any number of years … in part because of the difficulty in getting green cards. A lot of the people who might have chosen 10 years ago to seek their way to the west, and to the US in particular, now elect to build their companies at home.”
Extolling “the virtues of immigration”, Moritz told attendees: “It’s no coincidence. You go around most of these companies and … all of the founders and very early employees are either an immigrant or a first-generation American. That has been the fuel that has propelled these companies.”
Advertising vs. subscription: Moritz, seemingly like most people at the moment, was resolute in his dismissal of subscription charges for web content. “I think it’s a lot easier and quicker to build advertising businesses,” he told members. “If you look around the conventional media business – whether it’s the newspaper business or the magazine business – a fairly small portion of their revenues comes from subscriptions and the bulk they get from advertising. And I don’t think anything is different about it on the internet. Consumers like — and have now become used to getting things for free. When The New York Times (NYSE: NYT) and the Wall Street Journal and all the rest of these people who had precious content that they wanted to protect their users from started levying subscription charges, it was clear that they were doomed and that ad-sponsored models would flourish and prosper.”
“The really good news about that is, globally, it’s an enormous market; in the US, it’s $270 billion … (as people) move to the internet and mobile telephony, those dollars are going to follow.”
Education: Moritz said the “navigators of the future” are all people captivated by mathematics: “As a child, I did not develop an appreciation for mathematics or physics or biology or any of the natural sciences. The course were intimidating, they were difficult, it was far easier to read English – much more difficult to read Welsh, I might hasten to add – and history. I think of all the people at Sequoia who we’ve had the good fortune to give backing and I would be hard-pressed to name one who took history or the fine arts.”
Change: Highlighting the pace of technology since he left Wales for the US in 1973 to become a business journalist: “I find it, sometimes, hard to believe that, last month, around the world, 200 million people tuned in to the service of a company (YouTube) that didn’t exist 24 months ago. I also find it hard to believe that, this month, I hope, 500 million people will turn to a company that didn’t exist 400 weeks ago to conduct a search on the internet. That company is obviously Google.”
On home: With Wales’ first minister nodding and listening intently in the front row, Moritz said: “Small countries can do extraordinarily well.” “(Singapore) was impoverished 40 years ago, and with a population barely bigger than the population of Wales, today has a foreign exchange reserve of $150 billion. But key, he warned, was the competent “financial stewardship and husbandry” of universities.