How to Raise a CEO: The "Godmother of Silicon Valley" Esther Wojcicki

0:00We're the Hartford, with decades of experience insuring millions of unique small businesses. When it comes to your small business insurance, one size absolutely does not fit all. Get a quote or find an agent today at thehartford.com slash smallbusiness. Trading at Schwab is now powered by Ameritrade, giving you even more specialized support than ever before. Like access to the trade desk, our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy gut check. Need assistance? No problem. Get 24-7 professional answers and live help and access support by phone, email, and in-platform chat.

0:38That's how Schwab is here for you, to help you trade brilliantly. Learn more at schwab.com slash trading.

0:45Allie Garfinkle:What do the former CEO of YouTube, NBA legend Jeremy Lin, and Steve Jobs' daughters have in common? They all have the same guide behind them. Her name is Esther Wojcicki, and she is the godmother of Silicon Valley. Esther is an original disruptor. She didn't just raise three of the most powerful women in tech and medicine. She's also widely recognized for pioneering a framework of high-performance leadership that scales from the nursery to the C-suite. Her philosophy is simple. Move quickly and revise. Today, she's teaming up with her former student, Mary Minow, on a new venture to incubate the next generation of builders in healthcare and biotech.

1:22Allie Garfinkle:Part of their core mission? Proving that educators are better at identifying founders than venture capitalists. It's about your curiosity, your rigor, your grit. Welcome to Termsheet. I'm Ali Garfinkel. Now before we get to the interview with Esther, I just wanted to say I have been reading your emails, I have been reading your comments. I am also so excited about the secondaries market and I am excited that you are excited. We are planning some episodes around secondaries, we're planning some stories around secondaries. I am very excited to bring you more on that topic. Keep telling me what you want to hear about.

1:58Allie Garfinkle:Now, on to this week's news. On Monday night, the news dropped that Tim Cook was stepping down as CEO of Apple. Now, you might be sitting here thinking, this is a public market story. Allie, what are you talking about? I would argue it's a private market story for two reasons. First, consider who the successor is. John Ternus is a longtime insider at Apple. He's only 50 years old, and he has long led the hardware business. Now, why does that matter to the private markets? The answer is pretty simple. The conversation around investing in AI from a private market's capital perspective has evolved substantially over the last two years to 18 months.

2:37Allie Garfinkle:For a while, everyone was saying, oh, we can invest in the model layer. Maybe there's a possible competitor to open AI. Everyone threw that aside. And then everyone was saying the application layer is the way. That has also started to fall to the side. And now what is everyone saying? This is the time to invest in physical AI in hardware. Clearly, Ternus is someone who has been chosen because he is someone the board believes can execute Apple's AI strategy, which there are a lot of questions about in the public markets. And I do wonder if it's an indication that Apple sees physical AI hardware as the real future of where they should be investing in artificial intelligence.

3:10Allie Garfinkle:The second thing to consider is acquisitions. Apple has a history of doing smaller deals that are generally quite specialized. But earlier this year, Apple acquired a company called QAI, which focused on audio out of Israel to the tune of almost$2 billion. Now, this matters quite substantially for the private markets if Apple, indeed under Ternus's leadership, enters a period of acquisitions. The private markets are liquidity starved, as many of you who watch this know, and that would be very big news. You know, we're a few years into the AI boom now, and I know there are concerns about regulatory matters and what can and can't get approved.

3:47Allie Garfinkle:However, I do think it is actually going to be an interesting time for acquisitions, particularly for big tech for the rest of the year. I'd be curious, Termsheet audience, what do you think? Who's going to be out there doing deals? Send me an email. Send me a message. I would be very curious to know. And now, without further ado, on to my conversation with Esther and Mary. Well, Esther Wojcicki, thank you so much for being here. You are a parenting icon. You have raised three high-achieving daughters who went on to be leaders at YouTube, 23andMe, and in medicine. Talk to me about your advice to fail fast and revise.

4:23So I think that all learning involves failure. That means you try to do something and then it doesn't work out. And so the fact is you just need to do it again and do it again until you get it right. Unfortunately, the school system usually gives you one shot. If you have that one shot and you get a bad grade, you get discouraged and don't want to do it anymore because, you know, you feel bad about yourself and you didn't do it well and all that stuff. So I got rid of that. You couldn't get a bad grade in my class. You could just revise until you got it right because all these mistakes that people were making were just examples of them just not knowing it when somehow they didn't understand it.

5:02But when they revise, then they understand it and they do it perfectly. My classes were very large, but almost everybody got an A because they never had to worry about the grade. They just had to worry about learning from those mistakes they made. So my philosophy is move quickly and revise. It works. And it works in companies.

5:23Allie Garfinkle:I was going to say, it sounds like it works in a classroom and it works in real life. Yes, it works in real life. Nobody does it right the first time. I mean, just look at all these companies. I mean, if you didn't do it right the first time and then they fired you, I mean, that would be the end of the company. Yes, you need to remember, everybody needs this opportunity to revise. Well, and I think the other thing about it, too, is it's actually hard to fail the first time. But when you have a blueprint for failing, you know what it feels like. You know it doesn't necessarily feel good, but you know how to move forward afterwards.

5:54Allie Garfinkle:What are some stories you have about people who have failed spectacularly the first time and then revised? Well, one of them is my daughter, Susan, that headed up YouTube. Can I just tell you briefly? Yes, please! Please, before YouTube, there was something called Google Video. I don't know how many of you ever heard of Google Video. And let me tell you, it was a colossal failure. And Susan had to go before the board and say, you know, you spent all this money and it didn't work. But by the way, I found this other company on the side that is going to work. And it's called YouTube. And you're going to have to pay another billion dollars to get that company.

6:36Talk about a colossal failure. but she owned up to it and did it and made a plea to the board and then they bought it and look at where it is today it's the largest on the web largest video platform so you see you can't do

6:51Allie Garfinkle:it perfectly the first time what was your conversation with her like around that time did she come to you for advice well she came to me for a lot of advice all different kinds of advice you know parenting advice you know what i should buy was this dress better than that one all that kind of stuff. You know, she was pretty firm in what she was doing in terms of she knew that what she was doing didn't work. Her only question was, should I really move forward on this other company that I just found? It's just a little company, you know, and there were just two guys involved. So, of course, I said, well, if you found something that you think is going to make a bigger difference and going to fulfill your dream, go for it.

7:33Yes. Don't worry about, you know, telling them you made a mistake, just do it, which is what happened. She did it. And here we have today YouTube. Thank God.

7:43Allie Garfinkle:Well, and YouTube is among the most successful businesses in the world, even without the context of Google at this point, right? But at the time, it really wasn't obvious at all. Sort of to this end, what is the secret to raising a future CEO, if there is a secret at all? Well, so I have this acronym, TRIC, and I have an app which I created with a group of engineers called Parenting TRIC. So the app is to help parents raise happy, successful children. And TRIC stands for trust, respect, independence, collaboration, and kindness. It works in parenting. It works in the classroom. And it works in all your relationships.

8:27and it works in corporations also. Everybody wants to be trusted and respected, whether they're five years old or 50 years old. Nobody wants to be disrespected ever. And so respect means you give people an opportunity to talk and explain their position. Just like kids give them an opportunity to say why they think they should have three chocolate chip cookies instead of one. You know, give them an opportunity. Give them as much independence as possible. Collaborate with them instead of dictating. That's what's going on in the world today. Parents are dictating, telling kids what to do all the time.

9:07They're worried they're not on the right path. There is no right path. You know, what's happening next century is different from what happened last century. So, you know, kids have to be able to think. Creativity is the most important. Critical thinking skills are the most important. And then, of course, kindness. Kindness, we all need, we all respond to kindness. Everybody needs to have kindness in their life. It's like you might forget what you said. You might forget what happened, basically. But you'll never forget how people made you feel. Maya Angelou, she made that statement. And I think it's true.

9:46Nobody forgets about how they felt during a situation. That's why when a teacher yells at one kid in the class, just one, every single kid in that class identifies with the kid that's being yelled at. It's a feeling. And it's important to realize that how you feel is really, really the key. It's important. You want to feel good about yourself. You want to feel that you can make a difference. And that's true for everybody. So that's my trick philosophy.

10:20Allie Garfinkle:You said the next century is going to be very different than the previous one. What do you think needs to evolve in parenting to meet this next century, to prepare kids? I think kids need to be able to be innovative. They need to think critically. They must because that's what's coming for them in the next century. You can't just follow us a path. That's what we did in the last century. You know, you went to college or you went to high school, graduated, went to college, got a job, stayed in the job, retired, and that was it. That's not happening anymore now. And now with AI, the world is totally different.

10:58And kids have to be able to think and they have to be able to make decisions that are smart, independent. They have to stop being afraid to make a mistake because you're not going to get it right the first time. No one gets it right the first time. I just want to know how many times did it take for you to learn to ride a bike or learn to swim? No one jumps in the pool and swims like an Olympic champion. It takes time. And so we need to use all of our creative energy to revise until we get it right. Right now, people are using AI and they think AI has all the answers. It has some of the answers.

11:35It doesn't have all of the answers. You need to be able to know how to use AI.

11:40Allie Garfinkle:What are the situations in education where you think AI is useful? And what are the situations in education where you think absolutely not? Well, AI is incredibly useful in education because it can be like a tutor on the side of the teacher. It can help you understand something. So if you are explaining how to do like fractions or you're explaining how to do quadratic equations or whatever you're explaining and the child doesn't understand, they can go to AI and ask AI to explain it. People should not be afraid of AI, especially teachers. It's very useful in helping explain concepts, ideas, vocabulary, how to write.

12:18So that's what I've been doing with all the people that I'm working with, all the students, using AI as a way to help you understand something, not in place of you, but in addition. And it works. It works really well.

12:34Allie Garfinkle:I would be really curious on the subject of failing and revising. Your daughter, Anne, recently had a very public setback around 23andMe, but has since regained control of the company. Did you give her any advice around this as it was happening? Number one, don't give up. Never. That's it. Just look at what she accomplished. It's shocking because every single lawyer that she had on her team, every single one said she was wasting her money. She'll never get the company back. Never. Every single one. Every single one. She just plowed ahead anyway. Yes, anyway. And she did it. I mean, we were all shocked.

13:18We were all grateful.

13:20Allie Garfinkle:But you're telling me even you were surprised. Well, not totally. But then she refigured it as 23andMe Research Institute. So now she's using all that incredible DNA to find solutions to diseases and medications that we can't do it before. And she's using it to make the world a better place for every single one of us. I'm so proud of her. What can I say? What a deal. Sort of to this end too, I've been covering tech for a few years now, long enough that I've stopped counting. And I've been joking that my job is to talk to men. It's true. It's like every day it's like, ah, how many men have I talked to before lunch?

14:02You have a few people of the opposite gender.

14:05Allie Garfinkle:Yeah, it's always like, oh, God, Jesus, is there a woman anywhere in here? Good God. But it's the sort of thing where Susan and Anne are examples of women who've succeeded in tech. And the reality is there's only so many of them. What have you sort of learned from watching your daughters navigate such a male-dominated industry? And what do you think has made them successful? Well, number one, I think it's very difficult for women to deal with the male dominance in industry. But the fact is, you don't want to give up. And also, you don't want to have a grudge. You never carry grudges because grudges take energy.

14:45And then also people change and the grudge might not be warranted. I remember that when Anne was first hired on Wall Street, she worked as an analyst on Wall Street to start. She was a little bit on the young side, so she might have been 22 or 23. And when she walked into a room full of people, she was working as a manager of a large Swedish biotech fund. When she went into that room, the guys said, you know, we need more coffee. Here are the cups. they assumed that she was you know the person in charge of the food or the drinks or whatever and she had to say to them she's like hey guys I'm I'm part of the group here you know I'm not not in charge of the coffee but you know then she thought of it as okay it's pretty funny and so instead of getting angry she thought of it as funny and a lot of humor if you just look at it It's a result of making a mistake, you know, and so you can either laugh or cry.

15:47And so my choice is always let's laugh about it. I mean, I took a bunch of kids to New York City. We went on the metro or I guess it's not called metro. There's called the subway. And I got on the subway with 52 kids and we went the wrong way. Can you believe we went uptown instead of downtown? How many stops? Like three stops. And finally, I was like, oh, my God, we're going the wrong direction. And so I had to get all these 52 kids off the subway. I was like, so I could have treated it as a tragedy. It's like, oh, my God, I lost them all uptown or wherever. But it was funny. And they all came back, as you can tell.

16:26There were no tragedies. But it was a crazy event. And it's also, you know, should we really believe this teacher? Does she really know where she's going? So I actually gave the navigation to one of my students who, after that, you know, took us to all the right places.

16:40Allie Garfinkle:You have famously talked about students as CEOs of their own learning and there have been some very famous people like Jeremy Lin, for example, who've come through your classroom, I believe. That's right. Many CEOs. Yes. If you were to redesign the education system from scratch today to match the reality in 2026, what are two things that you would say are non-negotiable must be implemented? Well, number one is I would change the grading. If not getting rid of the grading, I would change the grading system so that people wouldn't be so discouraged all the time. Kids get discouraged and then they think they aren't good at something.

17:19The second thing I would do is I would make at least 20 % of the curriculum peer-to-peer project based. So that made, I've tried to change the whole curriculum. So let me tell you, I'd like to see a hundred percent, but realistically speaking, since I've done this for so long and been trying forever, I think if we just had 20 % of the time where kids were in charge, they got to come up with their own ideas. They worked together, peers, they worked with AI, they did projects that they care about. I'll tell you, no one, no one would drop out of school, But right now they're dropping out because they don't get that opportunity.

17:56Today, they are memorizing the answers to last century's problems. And they don't want to do that anymore. They're sick of it. And so they drop out, which is very bad. It's unfortunate.

18:09Allie Garfinkle:Well, and the answers to last century's problems wouldn't have been helpful 15 years ago and definitely won't be helpful for the next 25 years, if I had to guess. That's right. Won't be helpful. and you know the school should know that I mean they're teaching information that is no longer relevant. On the subject of problems of the future it's time to bring in Mary. Hi Mary. Hi Allie. It's good to see you. Can you tell me very quickly about the mural in the background? Of course yes so I am sitting in TREHUB which I'm excited to tell you more about and this is a mural done by Michaela Karthik.

18:49And it actually has the handprints of everyone who is involved in Treehub, ranging from Esther and Anne to myself, my partners, Roxanna, Alex, Derek, and even my children. Their handprints are on the wall.

19:03Allie Garfinkle:Even your children's handprints are on the wall. Now, Treehub is a Silicon Valley-based accelerator and venture initiative that's co-founded by both of you, focuses on healthcare and biotech. My understanding is you've invested about 12 companies in stealth. Mary, walk us through what the core mission is. Treehub is, we actually call it a residency program. So our idea is to bridge lab to launch for the best and brightest computational health builders out of academic circles. And for me, this started when I was recently postpartum from my second child. A loved one got diagnosed with acute leukemia.

19:40And so five weeks postpartum, I became my full-time job to keep this person alive. And we did. They're doing great. But had nature taken its course or the healthcare system taken its course, that wouldn't have been the case. And I became a little bit problem obsessed. I'm a student of Esther's. I believe in iterating on things until they're correct. And so I couldn't believe that we sit here and let the healthcare system operate the way it does because truthfully, all of us wind up in that bed one day. Right. And so I sat there watching someone I love in the bed, realizing that I will end up there and I will wish I'd put more energy into fixing it.

20:18So I don't know, four months postpartum, I showed up at Esther's door with my son in my arms and I was like, you have to help me fix health. It's terrible. And she was like, Mary, maybe kind of. Okay. And I kept coming and I kept showing up at her house until I don't know, maybe three days later, she said, I'll do it. You've convinced me. Gosh, that was late summer. And in October, we closed on our first capital for the AI Health Fund. Tim Draper anchored us with a first check, put us in business. And we teamed up with two faculty members at Stanford, both brilliant scientists. And we are investing first check into AI and health companies, mostly from Stanford, but from a lot of different academic circles.