He's got killer instinct for hot tech startups

john lilly
John Lilly, partner, Greylock Partners

John Lilly calls himself an "alpha nerd."

It's a trait that's served him well in spotting tech startups early and investing in them.

Lilly is a partner with heavyweight Silicon Valley venture capital firm Greylock Partners, which has invested in companies like Facebook (FB), Airbnb and LinkedIn (LNKD).

He joined Greylock in 2011. It's where he's led investment in Dropbox, Tumblr, (later acquired by Yahoo) and in Instagram, which Facebook bought in 2012.

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So what's his MO for picking investment targets?

"When you see alpha nerds, and I qualify as one, move to using something right away, it's a pretty strong signal that it will become important," he said.

He remembers when Mozilla (the company behind Firefox) caught his eye in 2005.

"Same thing. Firefox was new and everyone was starting to move over to it," said Lilly.

Lilly joined Mozilla in 2005 as VP of business development, became its COO a year later and eventually rose to CEO in 2008.

"By the time I left, 400 million people were using Firefox," he said. There were just 7 million users when Lilly joined the company.

Lilly left Mozilla in 2010 to try something else.

"I had wanted to do investing for a while and was thinking about the right firm to join," said Lilly.

He settled on Greylock, where he reconnected with Reid Hoffman, also a partner at the firm. Hoffman co-founded LinkedIn and was also on Mozilla's board of directors.

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Lilly is a bonafide techie. He studied computer systems engineering at Stanford, followed by a graduate degree there in computer science with a focus on human computer interaction.

It's that nexus between technology and consumer behavior that captures his fancy as an investor.

"Dropbox has something so obvious in that regard," he said. "Dropbox has done something so obvious and necessary. Everyone in the world needs storage that works across devices and to share with others, and it just works."

And Tumblr, he said "uniquely captures the zeitgiest of teenagers."

He likes Quip, a mobile word processor app, and ClearSlide (both Greylock investments) a lot, too.

"Quip [has] rethought the word processor from the ground up, but in a way that's true to all the raw materials of mobile: multi-screen, touch and real-time," said Lilly. "The result is something that is familiar like Word, but also people use in new ways."

And ClearSlide, a sales management platform, "is a a great example of a functional app that's built in a way that makes sense for how we work together today," said Lilly.

"ClearSilde has built tools that help people actually close sales, but in a modern way by using the cloud, mobile and data analytics to help sales teams engage better with their customers," he said.

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Even though Lilly is laser focused on gamechangers in the tech arena, he said no industry is immune to disruptive ideas. "It could be health, finance, even the government," he said.

There is one area, however, where he is keen to see disruptive thinking take effect.

"There isn't enough diversity in tech, including women," he said. "My sense is that things are set to change. I'm optimistic even though things aren't good enough yet."

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