Alfred Lin with Justin Kan

Lin describes how Tony Hsieh and Sanjay Madan started by building websites, then created a banner exchange to help small sites attract visitors. The network became more useful as it grew, and LinkExchange eventually sold to Microsoft. Lin joined from a statistics PhD program to handle finance, despite having no finance experience.

After LinkExchange, Lin and Hsieh started the Venture Frogs angel fund, investing in 27 companies in nine months. Lin says Tellme had raised $265 million and was losing about $60 million a year when he joined. The company narrowed its focus to enterprise voice automation and 12 to 24 large customers, growing to about $150 million in recurring revenue before Microsoft acquired it.

Lin says Zappos pursued online shoe sales because the market was large and mail order already accounted for about $2 billion of a $40 billion shoe business. Funding was difficult, so the company relied on debt and merchant credit, and aimed to be profitable on its first order. Its operating choices included round-the-clock fulfillment, shipping orders within hours, and tracking each item by a unique identifier.

Lin says culture needs daily attention to become a company’s core strength, much like customer service or fitness. He recounts Zappos facing a potential bank covenant breach after an inventory ordering error, and describes how earlier payroll scares helped him stay steady through later crises. His startup advice is to keep pursuing a big goal while making necessary pivots, and to solve a hard problem rooted in personal experience.

Lin advises founders to treat investors as long-term partners and spend time getting to know them before accepting funding. He says Sequoia looks for persistent founders with deep industry insight. Founders should challenge industry assumptions, choose a small number of priorities, and define a clear entry point into the market.