Fireside Chat, Q&A and "Stern Tank" with Mark Cuban

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[Music] - Wow. (audience applauding) Folks, folks, folks, Hold your... Is this on? Hold your applause, please, because the real guests of honor are yet to come, so that's when you need to applaud. Good evening, everybody. My name is Raghu Sundaram. I have the honor of being the dean of Stern and the even greater honor of kicking off tonight's program. A few words of introduction to the sponsors of this program and the context of this program. At Stern, entrepreneurship, innovation have always been at the heart of everything we've done for over a hundred years, in our very DNA. For the last several decades, we've produced a huge range of entrepreneurs that have transformed the industries they've worked in, some very openly, some very much more quietly, but still quite ferociously. To those who follow these industries, the list of names reads like a Who's Who, from Bill Berkley and Ken Langone through Andrea Bonomi, Lorenzo Fertitta, Liz Elting, Peggy Yu. Entrepreneurs have been the very face of Stern for several decades. Today, we are at a point in time where entrepreneurship has become more central to our activities than ever before, a point in time that is absolutely bristling with challenges, but also because of that, bristling with opportunities, and at a point in time where the pace of change makes the need for nimble leaders who can think and move fast greater than ever before. At NYU, as a university, across the university, we work with more than a thousand aspiring entrepreneurs across our 16 colleges and two global campuses in Shanghai and Abu Dhabi. Amongst the many ways we foster entrepreneurship here at Stern is through programmatic innovation, both in and out of the classroom. Two examples of that innovation are the co-hosts of today's program, the Entertainment, Media and Technology, the EMT program at Stern, and the W.R. Berkley Innovation Labs. The Berkley Innovation Labs prepares the entrepreneurial students and alumni to launch and lead transformative ventures. This year, 244 teams entered the Entrepreneurs Challenge. In a few short months, the Innovation Lab will award $300,000 to NYU startups on this very stage, in this very room. Teams in our programs have gone on to be acquired by Amazon, by Airbnb and Twitter, and have appeared and done quite well on a program we all know well, Shark Tank, where Vengo Labs, the maker of high-tech vending machines, secured a $2 million deal in 2016, and Keen Home, makers of a smart air vent, walked away with $750,000 in 2015. The other co-sponsor, our EMT program, provides students with a global perspective of the entire spectrum of the media and entertainment business. The program offers more than a hundred courses taught by distinguished faculty and industry thought leaders and practitioners. Last year, 4,400 students from across the university took EMT courses here at Stern. One of EMT's most distinguished faculty members, a man I'm proud to call my colleague, is Greg Coleman. Greg is the Executive-in-Residence at Lerer Hippeau, which is a preeminent early-stage venture fund that has invested in such notable companies as Casper, Glossier, Warby Parker and BuzzFeed. At Stern, Greg teaches the popular class Digital Marketing and Innovation. He brings to the course more than 40 years of experience in advertising and media, spanning executive roles at Yahoo!, the Huffington Post and at BuzzFeed, where most recently he was president. Greg was also one of the earliest members of our Tech MBA Advisory Board and has been hugely supportive of our attempts to integrate ever more closely business, entrepreneurship and innovation, including through the Creative Destruction Lab. Thank you, Greg, for inviting Mark Cuban to campus. Mr. Cuban embodies, in every sense of the word, Stern's driving principles of innovation, of entrepreneurship, of technology. We are thrilled to be spending this evening with him. Our thanks, again, to the EMT program and to the Berkley Innovation Labs for sponsoring this program. Professor Greg Coleman. - Thank you very much. (audience applauding) Thank you. Wow, we have a full house tonight. (audience applauding) So, Dean, 40 years of experience. Did you really have to do that? - You know, I was impressed. - My God, that's a lie. It's 10 years of experience (audience laughing) is what I've had. Before I make any formal comments, I would like to ask Sara Kim to come on up. Sara is our. (audience applauding) Come on, let's give her a round of applause. (audience applauding) Sara is one of my two teaching fellows. Lucy Zhang is here, as well. There's Lucy. (audience applauding) Round of applause. Sara is gonna introduce Mark. - Good evening. My name is Sarah Kim, and I'm an MBA Langone student here at NYU Stern. I've had the pleasure of being a student and teaching fellow, as Greg mentioned, for Professor Coleman's Digital Media Innovation class. This past semester, we've been lucky enough to have some incredible speakers, including Jeff Zucker, president of CNN, who came to speak to us after CNN sued the White House. We've also hosted, (laughs), yeah. It was great. (audience laughing) We've also hosted Jonah Peretti, CEO and founder of Buzzfeed, and Kara Swisher, renowned journalist and founder of Recode. Tonight, I have the privilege of introducing someone who needs no introduction. (buzzer rings) (audience laughing) You may know him as your favorite investor on ABC's Shark Tank or as the outspoken owner of the Dallas Mavericks. He's also been a lifelong businessman. Some lesser known facts about our guest tonight. At the age of 12, he was an entrepreneur selling trash bags. He also took on the challenge of managing a Dairy Queen for the day. He also set a Guinness World Record in 1999 for the largest single e-commerce transaction when he bought a Gulfstream jet for $40 million. (audience laughing) He did this after he sold his company Broadcast.com to Yahoo! for a cool 5.6 billion. I don't know about you guys, but I don't think back then it was very common to be making online purchases. Clearly, he was ahead of his time. He also may or may not have been quoted to say that he wanted to speak to NYU Stern students and illustrious alumni as part of his impressive career. (Mark laughs) I'm thrilled to help you do that today. (audience laughing) Ladies and gentlemen, please join me in giving a warm welcome to the incomparable Mark Cuban. (audience applauding and cheering) - Thank you. Where do you want me, Greg? - You'll go right there, the far one. (audience applauding) - I gave Mark an NYU jacket, but he said he's an Indiana man (audience laughing) so he wouldn't. - Go IU. - Which I respect. - Okay, thank you. - We have to do that. Mark, thank you so much for coming in. One, I'll tell you Mark and I are on the board of a company called ZergNet. Actually, the CEO, Reggie Renner, is here with us tonight, as well. When I asked Mark at the end of one of the board meetings, I said, hey, I teach this class at NYU. Would you be interested in coming to talk to the school? He takes his phone out and he says, "Hold on," and he looks. I said, you're not looking to see when the Mavs are playing the Knicks, are you? (audience laughing) He said, "Yeah, 'cause then I know "I'll be here." (audience laughing) You have lots of friends that figure their calendar out. One way, I see when I'm having spaghetti and meatballs at home (Mark laughs) and I know I'll be there. Other people, when their ball club is there. Before we go into our Q and A, we're gonna do a fireside chat now. Then we're gonna hear a little later from some students that will have some questions. Then we have three amazing presentations tonight, five-minute presentations that Mark will hear and he'll give some feedback, which will be a real treat for the students that will be presenting. - I'm gonna rip some people apart. (audience laughing) - But what I'd love to do is let's put, I just wanna share with you, for those of you that are not in my class, I did have the chance this year to get some pretty cool speakers. (audience laughing) Mark, why don't you take a look? This is the only thing I tried to rehearse. We had the head of sales for Twitter. - Wow, Greg, that's a great list. (audience laughing) Okay, moving on, moving on. (audience laughing) - The class had the chance to meet with people that are the movers and shakers in the digital world. We had the chance, if you take a look up there. As Sara mentioned, the morning that we had Jeff Zucker come, Jeff came at six o'clock at night, he did, he sued the president of the United States for taking Jim Acosta's credentials away. He gave no interviews during that day, but he gave our class the full speak, inside and out, of what the lawyers said, how he made the decision, how they served the papers. It was a moment in time. Then one of the other highlights, as ya heard, Kara Swisher, unbridled. - That's her. - Her comments about tech titans, at least they can't take it with them. That was her generous point of view about people, Mark Zucker and the rest. Let's go right into this. I started off talking about ZergNet, Mark, and talking to Reggie, the CEO. One of the things that I found out that I think this class would be very interested, the school would be very interested, is that after watching Shark Tank, Reggie cold emailed you. - Yep. - He cold emailed you with what he told me was a pathetically long email. Apparently, you read it and you responded. - Yep. - You got hit on by somebody from the outside you never met before with a long note. For those people that are afraid sometimes to take a chance, what happened when you saw his note? - Well, first of all, he went to Indiana. (audience laughing) Or from Indianapolis. I get hundreds of emails, business-related emails a day and I get pitches every day. mcuban@gmail. (audience laughing) I'll read the first paragraph. If you say something of substance that catches my interest and I think is differentiated in some way, I'll keep on reading. That's exactly what Reggie did. He said, "We've got some technology that," I won't go into the whole thing, but it caught my attention. I started asking some followup questions. Very quickly, my BS meter is really good. Based off the answers, I can tell if it's real or it's nonsense. We just kept on following up, did my due diligence, and we didn't meet until long after I invested in him. - Oh, wow. But Mark also comes to every board meeting. Occasionally he'll have to call in, but you make every single one. - Of course, yeah. - How many boards are you on where you will spend that kind of time? - Only three or four, not that many. I really limit it because it does take time. Fortunately, I'm in a great position where I can dictate (laughs) kinda where and when I wanna go. That's very beneficial. But I don't do a lotta meetings. I don't do a lotta phone calls. I try to do everything via email because it just makes me more efficient. Now if you wanna write me a check, I'll show up. (audience laughing) If there's some issues that I need to address or need to help you with, I'll show up, whether it's a Shark Tank company, Reggie's company or much larger companies I'm invested in. It works for me. I've invested 25, $30 million in companies where people cold called, emailed me, and in a lotta cases, I still have never met them. - Wow. - I've made a lotta money off of those. - Wow, well, ya made a good investment in Reggie's company. - He's just getting started. (Greg laughs) - He is. I wanna go back in time to a company that I used to work for called Yahoo!. - I remember them. - That had a very (audience laughing) meaningful role in your life. - Yep. - I think everyone here knows that Mark and his partner Todd Wagner sold their company to Yahoo! in what was it, '99? - '99, yeah. - '99 for $5.6 billion. - In stock, not cash. - I wanna talk about that. When I got to Yahoo! in April of '01, two things happened. There were about a dozen people left from the Broadcast.com acquisition. This is about a year after you sold it. I remember my boss at the time, Tim Koogle, asked me would our Southeast regional manager like to be running Broadcast.com. I'm like, oh, my God, this is such a horrible thing-- - What a mess. - to hear about after all of that happened. It would be great if you could give everybody kind of a glimpse of, remember, this was the heyday. The internet was booming and it was rocking and rolling, and valuations were different than we look at them now. But if you could give us that peek 'cause I have not heard you talk about this much, about what happened, how you were approached or how you approached them. Then I'd love to hear about-- - In terms of buying the company or? Well, let me give you the background 'cause people probably don't know about the company. In 1995, the internet was just getting started. As I kid, referred to multiple times, I went to Indiana University, where basketball is big. The way we listened to basketball games in Dallas is somebody in Bloomington, Indiana, would put a speakerphone next to a radio, an AM radio, and then in Dallas, we'd have a table, a whole lotta six-packs, and we'd have a speakerphone there and we'd listen to the game. That's how we listened to the game. The internet was just starting to happen. I set up my own little Netscape server, Mosaic server, all this stuff. I was getting into it 'cause I'm a tech guy. All of the sudden, it's like, wait. We've gotta figure out a way to use the net to listen and eventually watch stuff online. That sounds like so nothing now, but back then, you had to have a PC. You had to have a modem. You had to download TCP/IP software, which y'all probably don't even know what that is. Then you had to log in. Then you had to have enough bandwidth available to actually download or stream something. Now back then, we didn't call it streaming. We called it internet broadcasting, or netcasting. I said, okay, let's just go for it. I took money from a company I had previously sold. We started this company called AudioNet. That's exactly what we did. We went out and locked up the rights to everything, hundreds of radio stations. We created Pandora, Spotify. We had hundreds of radio stations by 1997 and 1998. We had police scanners online. Then we started getting into video, and we changed the name to Broadcast.com. Then we started doing live broadcasts of video. We did corporate videos. By the time we started talking to Yahoo!. Well, in 1998, we went public. It was the largest one-day jump in the history of the stock market, opening day price jump in the history of the stock market. It was a good day. Yahoo! happened to be a small investor in us, so we had a relationship with us. To really, to give you some context, we dominated streaming. Not a little bit. We started the whole streaming industry. We built the streaming industry. Our market share was enormous. We were doing everything. We had all the radio stations, all the TV stations. We even, Lionsgate movie studio, we had bought 10% of Lionsgate just to get access to their TV and movies to stream them online. Then Yahoo! came along and it just made sense. They were a destination. They could drive even more traffic. Broadband was starting to take off. I remember we did a survey for in-office media. We controlled 97% of in-office media. It was crazy because people didn't have radios or TVs on their desks, but they had a PC and they had access to faster internet speeds, broadband, in their corporate office. It made perfect sense. They made a bid on us. It was great. We thought, this is going to be great. Not less than a year later, the internet stock market crashed, and they freaked out. Again, in context, YouTube, this was before YouTube. We had people, businesses and individuals could upload their own content onto Broadcast.com. We indexed it and did sorts and searches by keywords. We had hundreds of radio stations. The digital laws were different. We had a CD jukebox. We did hundreds, thousands of live events, we did corporate events. We were killing it, dominating. It made perfect sense. The market dropped. They didn't know what to do. Their board at the time said, we were actually cashflow breakeven. They didn't support us any longer. They just kept on pushing people to the corners. - It was horrible. - They screwed up. - Mark, one of the things that you did, and would be great to hear from you about what the hunch was, instead of just holding onto all of the stock that you got from Yahoo!, you did what we call a collar, you collared. - Hedged it. - You hedged it. Tell everybody what went through your mind because that was a big bet with huge dollars. - It was actually pretty simple. Hedging stock. Yahoo! paid us in Yahoo! stock. I was smart enough to recognize, I guess, that what goes up could go down. But it wasn't that big a step because I was worth more than a billion dollars. How much did I need? I was telling everybody just find me a way to hedge it so in the event, look, if the stock price goes up and I leave something on the table, so be it. But I liked that being next to my name and I wanted to keep it. (audience laughing) I sold calls, bought puts and effectively hedged it so that by the time. There was a period of time from when I'd done that. The internet stock market kept on going up. I told people I'd hedged it. Goldman Sachs, the company, had told people what I'd done. I remember going on CNBC, the business channel, and the guy going, "Boy, don't you feel stupid? "That Yahoo! stock has kept on going up "and you had this hedged." I'm like, yeah, I feel so stupid riding around in my G5 that I bought online. (audience laughing) Not to sound like a crazy, greedy capitalist, but, yeah. (audience laughing) I just didn't wanna screw it up. So I hedged it, and then the internet bubble burst and I was fully protected and actually even made a little bit more money. What I learned was you just don't need to be greedy. I was very, very blessed, I was very fortunate. Look, I didn't plan the internet stock market to go up and I didn't plan it to go down, so I was lucky in terms of scale. I didn't wanna screw it up, and so I hedged. - You didn't screw it up. One other thing from that time, when I arrived in April of '01 with Terry Semel, three weeks after I started, Todd Wagner shows up to wanna meet with us, but not with Jeff Mallett, who was then the president. We're like, what does he wanna talk about? We knew about the deal. He was like, "I'm an activist. "I demand that you fire Jeff Mallett," who was my boss. I'm like, wow, this is a really nice environment that I've gotten into out here. (audience laughing) Even after you had done your thing, there was still an ache to make sure that Yahoo! itself was on track. Do you know what that was about? - Yeah, they were screwing everything up. Look, they had an opportunity to dominate streaming media. They also owned, at the same time, the patent to cost-per-click. Now, Google's entire business to this day is built around pay-per-click, rather-- - And Criteo. - They had the entire patent for pay-per-click. Had they just said, "Sorry, Google, "you can't use it," there would be no Google. Instead, they said, "Yeah, $133 million "and give us some stock." They were just too nice, which blinded them in a lotta respects. I remember walking in with a $32 million sale, saying, okay, we're gonna do streaming. We're gonna sell all this company's content. It's worth $32 million for us. It's gonna preempt these other potential competitors. I forget if it was Jerry or Tim or whoever, said, "No, we don't work that way. "We don't preempt competition. "We just leave it open." I'm like, okay, it's time for me to go buy a basketball team. (audience laughing) They just didn't see these things. It's a lesson in your businesses. Everybody's always trying to kick your ass. You have to figure out how to kick your own ass first. Seriously, because if you're not brutally honest with yourself in your own business about what your frailties are, someone else is going to find them. Yahoo! didn't get that. Yahoo! just thought, ya know what? We're just gonna continue moving forward and we'll just compete with everybody else. We have no other problems. Didn't quite work out for 'em, did it? - No, it did not. Then we gave it a good go. From '01 to '08, we-- - Terry tried. - We raised it back up. But they did slip on a big banana peel. I wanna pivot right now. Purple and yellow banana peel for Yahoo! for you that know their colors. - That was another thing, wait. We sell to them, right? Our office is in Dallas. The way we ran our business, it was just like lean and mean. You invest in your product, you invest in your customers, you invest in your people. We had open offices. You don't need fancy stuff. They immediately came down-- - I bet. - And just redid all the furniture in purple and gold. I'm like, it's cool, that's my high school's colors. (audience laughing) But why are we spending this money? Got a whole new office, a whole new building. I'm just like, why are we spending this money? - Well, one of the ways. The pivot is. (audience laughing) - The moral of the story is you spend money. - Reggie knows how to spend money. - Or not to spend it, right? - Right. One of the things in my rules, when I look at companies to invest in, if someone walks in with swag, here's my coffee mug with my logo, here's your T-shirt with my logo, I don't see anybody wearing a T-shirt with a startup's logo, do you? - No. - Would you wear some other startup's logo polo shirt? Hell, no. Hell, no. It's just a waste of money. Put your money where you're able to differentiate yourself and add value that separates yourself so you can get ahead. Don't waste it. - We talked about a company's frailties. Let's talk about individuals. One of the question that I've asked all those amazing speakers-- - Amazing. - That I put up there, is what is your thing? By that, I mean what is it that you love to do more than anything else? What do you think that you're best at? What makes you click your heels? For example, I'm a connector. It started early in my life. I don't know, but I love to connect really smart people. I like to connect you with NYU here. But as you think about your career and in your early days, what is your thing and when did you understand what it was? - It hasn't changed. My thing is learning, learning whatever's new, and applying it in ways that other people aren't thinking of. I got fired from a job selling software, started a company. Within six months, this is the early days of PCs, I recognized that, okay, we need to connect PCs together. Back then, you walked around and you had your 5 1/4 inch floppy. Who would need to connect a PC? We started writing software for local area networks, became a systems integrator. $30-some million run rate, and sold it to H&R Block. Then got to the internet. Let's look at this internet thing. Someone's gonna need to put audio and then video on there. Great. Then after Yahoo! did Yahoo!, I'm like, you know what? I'm looking at these big screen TVs that cost $30,000 that are high-definition television sets, and I'm thinking, you know what? Eventually, they're gonna follow the price performance curve of traditional consumer electronics and they're gonna come down in price. I started the first all-high-definition TV network called HDNet. Then I'm looking and saying, okay, ya know what? It's like 2006, 2007, and traditional television and cable is going digital. I'm saying, you know what? There's gonna be a lotta storage space and first access digital space that cable companies aren't used to using. So let's take a movie production company that we created and let's make it available for day and day distribution where people will pay 20 bucks to the cable company to watch this brand-new movie, and we get to keep 10 of it. We had 2929 Productions. We started producing movies. Lo and behold, the first movie we created was a documentary called Enron: The Smartest Guys in the Room. (audience laughing) Got nominated for an Academy Award. Then we didn't really create any good ones after that, but (audience laughing) by being first, leveraging digital storage, we were able to take advantage and make a lotta money. Then the NBA with the Mavericks, just doing those types of things. It's what I like to do now. Now I'm going through and teaching myself neural networks and doing the same thing with machine learning and GANs and this and that because AI is going to have more of an impact than the internet did. AI plus new types of chip sets plus 5G is going to change things far more than we've ever seen anything change. Understanding where and how to apply it is going to be critical, but just as important, knowing how to segregate and separate the bullshit is as important because every email y'all are about to send me is gonna say, "I have this AI solution "and we're using algorithms." Yeah, of course you are. Then what? What really makes you different? What really sets you apart? But if I didn't do that work, if I didn't sit down and do the AWS machine learning tutorials, if I didn't go on YouTube and take the NYU Introduction to Neural Networks or whatever, I'm not gonna know it, I'm not gonna be able to apply it and I'm not gonna be able to be first. That's fun, that's fun. Knowing I get to kick the ass of some 22-year-old NYU graduate, that's awesome. (audience laughing) - Are there any big companies that get the future right now? Of the telcos that are diving into 5G, do you have some other companies in the tech space? Is that where you're also learning, or are you seeing an incredible groundswell of early-stage activity? - The big companies are trying, but it's difficult. It's more smaller lean and mean companies that are able to try different things and apply new types of sensors. I've got one company, Genestesis. I didn't know this, but every organ in our body emits an electrical impulse. There are now sensors that capture those electrical pulses. There are ways to capture them into a WAV file. Who knew, an old-school WAV file? Well, what Genestesis did was go to Mayo Clinic and other hospitals and use these sensors and capture tens of thousands of outputs of people's hearts into a WAV file, and then ran 'em through machine learning, and were able to discern, with starting 92 or 3% accuracy, now up to 95 to 97%, five different heart ailments just based off of what's recorded in this WAV file output from a sensor. Now that's critical because when people, as you get older. There's this old show, Sanford and Son. I'm coming, Elizabeth. It's the big one. Because as you get older, there's something you think is screwed up with your heart. You don't know if it's a heart attack, you don't know if it's just a misbeat, whatever is it, but it's hard for hospitals to discern, so you have to run every test. With just this little bit of innovation using machine learning and sensors, that's all changing right now as we speak. There's big companies and little companies. But I'll tell you the thing that's most important and one of the things I wanted to convey here that's changing. How people perceive entrepreneurs is changing dramatically, and how entrepreneurs are contributing to society is changing right now as we speak. I see it on Shark Tank. Companies coming on Shark Tank now, particularly from younger entrepreneurs, have a social component. You don't wanna buy something unless you think the company is contributing. Even more so now, a lotta people were saying, "You know what? "If you're an entrepreneur and you happen "to get rich, that's bad." Entrepreneurs, people particularly in my generation, have kinda segregated themselves into, okay, just get me all the money I can, into, okay, there can be such a thing as compassionate capitalism. Really, it's falling on you guys now to set the message. If you are going to be an entrepreneur, having a social component is good. Being a compassionate entrepreneur is better because when you change things, when you can hire people. I had to go back through the companies that I control now and I said I wanted to make sure that nobody who works for, in particular the arena and the Mavs, is on public assistance because it's wrong. I think it's wrong that somebody who works for me doesn't make enough money to be on public assistance. That's the type of attitude I think that needs to change now with entrepreneurs. That's now becoming part of your responsibility. I think that's critically important. Guys like me, women like me, can look and backtrack and backfill in where we've made mistakes. I've made plenty, and I've learned from 'em. But it's your opportunity, and I think it's critically important to recognize that you are gonna set the tone for how people perceive entrepreneurs going forward. If you introduce compassion and you look at the needs of the people that work for you, right from the beginning, I think you're gonna have stronger companies, less turnover and better results. - You've done a lot of cool things. Everybody here that's in school is gonna graduate, and at some point in their life, they're gonna get their ass kicked in business. They're gonna get fired, they're gonna have a boss that they hate. In your case, you've done a lotta cool stuff so you can talk about it, what was the biggest lump and learning, and how did you get up off the floor, if ya got up off the floor? - When I got to Dallas, I was a bartender at night. I moved in one of my buddies from Indiana. I said, ya gotta come to Dallas. I'm like, I'm there. My car would only get so far. Had a Fiat X1/9 with a hole in the floorboard that guzzled oil every 60 miles. I went down there, and this place called The Village. It was the world's largest apartment complex. We had six guys in a three-bedroom apartment. I didn't have my own room, I didn't have my own drawer, I didn't have my closet. I had a pile and I had one ratty towel that I stole from Motel 6. That was it. I was looking for my career. Got a job at a software store. I didn't have a tech background, so I was teaching myself all this. Because the way I look at tech is somebody invents it, and everybody else is tied for second place in the ability to learn it. If I work harder and faster to really dive in, even if it means reading the manual, just diving in, then I can get a headstart and I can-- - How old were you during this? - I was 24. Sleeping on the floor, working in the software company, learning, learning, learning, learning, learning, getting better at what I was doing. Then one day, because I was dying to get out of that rat hole that I lived in, I had the chance to go out and close the sale that would have got me a $1,500 commission. I went to my boss. His name is Michael Humecki. I said, boss. One of my responsibilities was to sweep the floor, wipe down the windows and open the door to open the store. I got this sale, ya gotta let me close the sale. He goes, "No, you've gotta be in here "to open the store." I'm like, Michael, I mean. "No." I made the executive decision to go out, pick up the check, thinking if I hand this guy a $15,000 check, of course he's gonna change his mind. (claps hands) Fired me on the spot. Here I was living in a shit hole, excuse my French, just this ratty place with a Motel 6 towel. Sorry, Motel 6. (audience laughing) Really didn't know how I was gonna get out. I decided, okay, I'm a lousy employee. I went to one of the companies that I had been talking to, Architectural Lighting, and I said, look, I need $500 to be able to buy the software you want. I promise you that even if it doesn't work, I will wash your car, I will walk your dog. I don't care what it is, I will do whatever it takes to make it up to you. They gave me the $500. That allowed me to create MicroSolutions. Six months later, I was out of the rat hole and my company turned into a real company. That's the one I sold for $6 million when I was 29, 30 years old. - The word balance. Obviously, you're wired a little differently than some people. - Some people think that, yeah. - Just a little bit. But how do you find a center, how do you get balance, how do you spend time with your family? How do you do that to make all of this stuff worthwhile? - Two different things. I was at two different points in my life. I waited. I didn't have a family. When I was 24, 25, I went seven years without a vacation. To me, I was balanced, a lotta people disagreed, 'cause I loved every minute of it. Yeah, there was hardships and my back was against the wall. I'll give ya a story, your back against the wall. After Michael Humecki fired me, H-U-M-E-C-K-I. (audience laughing) But I don't hold grudges. (audience laughing) We had started this company, MicroSolutions, which, just what it's named. It just is what it implies. We would hook PCs together and LANs and this and that. One day I get a call from the bank. We were small, four employees. We finally had $84,000 in the bank, which was amazing for us. We were maybe six, eight months old, I forget exactly what it was. We were small. We had one of my buddies who helped install the computers; we had a guy, partner, Martin Woodall; and a receptionist. I thought I was using all the accounting principles I learned at Indiana where I would go through the AP, the accounts payable, and then one of the other people would sign it after checking it, put it in an envelope. Then the receptionist would then take the printed out check, lick it, put it in the envelope, lick it and mail it. Easy, breezy, right? Get a call from the bank. "Um, we had a bunch of these checks "totaling $82,000 where somebody "whited out the payee "and put in her own name, Renee Hardy." Not that I hold a grudge. H-A-R-D-Y. (audience laughing) And cashed it. Literally, this woman, Renee Hardy, if you ever run into her, she's a little bit older now, took 82 of our $84,000. I remember calling the bank. You just let them white out a check and put their own name, and you cashed it. This old-school Texas banker. He goes, "Son, leave it alone. "You don't have a pot to piss in." (audience laughing) I had two choices. I could get mad or I can just get over it and go back to work. (laughs) I'm like Boss Hogg, how could you do this to us? (laughs) You guys don't know who Boss Hogg is, nevermind. (audience laughing) I just went back to work. We called all our vendors and yada, yada, yada, worked our way through and paid back the money that the checks were supposed to pay. But shit happens. In terms of balance, I dated. I made it really, really, really clear that I was in love with MicroSolutions. (audience laughing) I would never leave it alone forever. The girlfriend was like, it's me or your business. I was like, what was your name again? (audience laughing) No balance. But once I got to that point where I didn't have to stress about that stuff and I'd sold multiple companies and things were well, then I started really dating and started a family. Now my three kids are nine, 12 and 15. Now things revolve around them. It was worth waiting. I'm a little bit more mature. Sure, not a lot more, but a little bit more mature in terms of those things. It made me smarter. Now I can focus on balance and put them first, but I waited. For those who are trying to do all at once, it's hard. I'm the wrong person to ask. - People are starting to throw their hats into the ring to become the next president of the United States. Do you know anything about that? - Well, I'm here to announce that. (audience laughing) The definition of bad parenting is running for president when you have three kids, nine, 12 and 15 (audience laughing) because the doxing and everything. Look, it's an interesting time. I've been very vocal, I'm not a fan of the president's, but I'm not gonna get into the why or how because all that's pretty obvious and I'm not changing anybody's minds. But the reality is I think it's time for a change. Obviously not just from him, but just in general. Regardless of what I do, I think watching Kamala Harris come out there, she was amazing. Watching what AOC is doing. There's people who wanna break things 'cause I think the system is broken and we need people who will break things. But I think what's happening right now is people are first establishing themselves within one or the other party. Yet, the two parties are, I think, responsible for a lot of the problems that we're having because everything is so partisan. I think there's gonna be an opportunity, whether it's me, somebody else, whoever it may be, either from a party or independently, to go out and lead with solutions. I'll give you a perfect example, healthcare. How do we measure the success of the Affordable Care Act, the ACA? By number of people who are insured. The greatest lie ever told, what does insurance have to do with healthcare and wellness? You can have all the insurance in the world, and most people don't have enough money to pay the deductible. Yet we're standing up there saying, "Keep the ACA." Okay, it was a great effort, but insurance has nothing to do with wellness. To me, an entrepreneur, like somebody here, has to come up with solutions, fix those problems. GDP. I think income inequality is one of our greatest problems. It's horrible. It's one of the reasons why I went back to my companies and made sure everybody made at least $15 an hour, if not more, made sure no one was on public assistance, got the help that they needed. Again, compassionate capitalism. But we tried to gauge the strength of our economy based off of GDP. GDP is total. It has nothing to do with bringing up the bottom or helping the bottom, yet no one's gonna say anything about using GDP as a measurement or coming up with alternatives. That's for y'all to start thinking about because if you can't measure it, you can't evaluate it, you can't find solutions because everybody's gonna gauge you based off of GDP, and GDP is the worst possible measurement. The number of people insured is horrific, it's one of the greatest lies ever told. There are solutions. If I come up with them, and I'm working on them, and I think there's better ways, then, all right, there's something to do. If I don't get the solutions, then I don't wanna be somebody that just stands up there because it's typical. Here's what I believe. Here's what I'll do. Here's what's wrong. Here's why everybody else sucks. Here's why you should elect me. To me, that's just not the way this country is going to go forward. That's not gonna bring people together. But if you walk in and say, "Forget insurance. "Insurance is part of the problem. "Insurance should not be part of the solution. "Let's come up with a better answer." All right, I think people will listen to that person. - Mark, the last question that I have, and then we're gonna get some really good questions from the audience, which is that a lot of this team is gonna be graduating in the not too distant future. We have a lot of second MBAs in my class this year. They're getting out in May. We have a lot of other students. Not everybody is wired like you. We understand that. But in terms of your point of view on people, whatever their thing is, taking a chance. As I do one-on-one meetings with my students, and some of them are in jobs that are okay, but they're not really doing anything to get out of it. We have a special chat when that takes place. But I think my last question is, from an advisory standpoint, what kernel would you give people? 'Cause as far as we know, this is not a dress rehearsal. - The same thing I told myself, the same thing I tell everybody. One, you're 21, 22, 23 years old. You don't have to figure it out right now. Don't try. You spent all this money, sorry, (audience laughing) paying to learn. Now it's your chance to get paid to learn. You don't need the perfect job. You just need to go somewhere where you'll learn and start to be exposed to different ideas. Now it's not like when Greg, 40 years ago, was graduating. - Oh, Jesus Christ. (audience laughing) Wow. - And me five years ago. (audience laughing) It was like, get a career. The pressure was get a career. It's go work for IBM or General Motors and get a pension. Those days are gone. People can't even pay their pensions anymore. You're a free agent. You're always gonna be a free agent on the market. You guys are the Kevin Durants and LeBron James, where you're always out there and can go find a better situation for yourself. Do what's best for you. What have you got to lose? When I started my company, after I got fired by Michael Humecki, (audience laughing) (laughs) how bad could it be? I would lose my Motel 6 towel? What have you got to lose? Yeah, I understand there's pressures from student loans and there's a lotta conversations we can have there, but you can get a job that doesn't have to be perfect. You can learn at that job. You guys have the pedigree, you have the brains, you have the initiative to go out and try the next job. The good news is the economy's good enough that it may not be perfect, but you can go job to job. Don't look for the perfect answer. Just look to get the experience, look to learn. Because all these different exposures, all the different things you learn, learning how to learn, that's what's gonna get you excited and juice you for something that you love. Because once you find something you love to do, that's when the magic happens. Because when you're able to find something you love to do, then you can start focusing on how can I be great at this. Like Greg found out he was a great networker. I like to play with technology and try to do things first. Whatever it is that you find about yourself, then you can try to be great at it. It's rare when people quit things they're great at. Trying those things. That's how I advise people. Don't stress. Just go out and try different things. - Our friends that graduated from college that thought they had the perfect job were mostly incorrect 'cause you just don't know-- - You have no clue. Are you the same as your 22-year-old self? (Greg laughs) - No. - I am, but that's a whole different story. (audience laughing) - Why don't we do this? Let's line up and we're gonna get some questions. My class, hopefully you'll ask some questions, too. - Bring it on. Which class are you in? - [Steve] Actually, I teach these people. My name is Steve McCarthy. I'm a metro coach and judge at NYU Competition Stern for the last 15 years. - Cool, great. - [Steve] First, an observation and a question, Mark. Observation. In 1995, I look back, I think the Indiana team was really pretty good. They were decent. They knocked out of the NCAA the first two times in those two years. What made you wanna think of that? By the way, do you give Bobby Knight any cash or money on the side to be part (Mark laughs) of your entity? - No. What made me think about it? (Steve laughs) I'm a basketball junkie-- - [Steve] So am I. - Since I was a little kid. - [Steve] I was a quick Caucasian point guard way back when. - There ya go. - I'm sorry, we're short on time, so thank you. - [Steve] Quick question, quick question. What do you think of Magnolia Pictures? - To what? - [Steve] Magnolia Pictures. Why do ya do it? You didn't sell it in 2011. What's the value right now? - Magnolia Pictures is a distribution company, film distribution company we have, which, by the way, distributed RBG, nominated for an Academy Award. Great movie. - Woo! (audience applauding) - We like to give filmmakers the ability to do cool things. Now we don't produce films. We take them when they're done and find innovative ways to market 'em. That's why I have Magnolia Pictures. - Let's go over here. - [Daria] Hi, Mark, my name is Daria, and I'm an MBA student here. - Hi, Daria. - [Daria] Hi. I wanted to know what industry you think still requires a lot of innovation. - All of 'em. (Daria laughs) Seriously. Look, one of my dad's favorite sayings was ya don't live in the world you were born into. Everything changes all the time. You know what's better than change? Creating change. Whenever I see something that's done the way it's always been done. Like when I got to the NBA, my whole goal was just to eff things up because everything was done the exact same way. They thought they were in the business of basketball. For 50 years, they thought they were in the basketball business. No. When you go to a basketball game, you don't remember the jump shots, the dunks. You remember who you were with, the fun you had. It's one of the few industries when that ball is in the air at the end of a game, everybody holds their breath. If it goes in, you're hugging people you've never seen before. You can take any industry and look at the way things have been done and try to come up and innovate. Like I said, with just the nature of capitalism right now and all the changes that are required, every industry needs change. There's a unique opportunity that I don't think any generation's ever seen. - [Daria] Thank you. I'll be emailing you. (audience laughing) - [Joshua] Hi, Joshua Spodek. I teach leadership and entrepreneurship here. You talked about the changing role and perception of entrepreneurs. There's a big culture, a lotta students come in and they wanna be on Shark Tank. They wanna follow the model of Shark Tank, even when their businesses really ought not to go in that direction. - What do you mean? What you talking about, Willis? (audience laughing) - [Joshua] Some of them are more community based or they should be a nonprofit or something like that. - So what? - [Joshua] What you guys do is amazing television. Do you think there's sometimes a tension between the roles that you're presenting for people and sometimes the best way to learn something different? Would you say it's the best way to do everything? - No, no, there's no one way to do everything. But look, the beauty of Shark Tank is you get to see, for people watching, they get to get exposed to two things. One, every single person in this room has had that one idea. You get all excited, ya get that feeling in your stomach. You Google it. Then all of the sudden, it's (gasps) no one else is doing it. Now ya don't think that 20 companies have gone outta business, that's why they're no longer on Google. (audience laughing) But then you go to your friends and they're like, what about this idea? (gasps) "That is so cool. "I'd buy 273." Then they stop because then you have to actually do the work. Watching Shark Tank, you get to see people who came from all walks of life, from all around the country who didn't stop and went through certain experiences that are common to all entrepreneurs. That's why I do the show, because it presents that. Now in terms of whether every business should come on, no, of course not. Like you mentioned nonprofits. We don't do nonprofits because it's not gonna work really well for me to say, that's the dumbest idea I've ever heard, and it be a nonprofit, it's not good for the brand. (audience laughing) But for a service, a product, it depends where you are in your life cycle. If you can benefit from one of the five of us and our experience, and you think that we're able to help you, and you think that there's value to the capital we can provide, then yeah. There are rarely going to be times when it's a business we can't contribute to. If it is a business we don't know how to do, we'll tell you. Yeah, it's worth coming on always. - [Joshua] Are you looking to evolve in other ways as the role and perception of entrepreneurs change? - No, because we're trying to encourage entrepreneurs. I'll sit on Shark Tank all day long and ask people about diversity because, look, I learned a tough lesson with the Mavericks where I wasn't paying attention and I missed a lotta bad things. But what I did learn along the way is I had 40-year-old white guys trying to sell to Latina moms Mavericks tickets. That was stupid. I always thought that you treated people equally. You don't have to treat people the same. Treating people equally doesn't mean treating them the same. It means looking at them for who they are and being able to take advantage of the unique skillset that they bring. That is the type of thing I try to convey on Shark Tank. If you watch, you'll see me say those types of things 'cause those are the lessons I learned. By coming on Shark Tank, working with us, hopefully we can convey those lessons in this new universe. It's the same with social impact opportunities. You'll hear me ask all the time, what are you doing that has a social impact? Because people aren't gonna buy your product or your service unless there's an authenticity in what you're doing and what you're giving back. Yeah, I think that even in this day and age, we can play an every bigger role. Now maybe not Kevin. (audience laughing) There are exceptions, but I think generally that we add a lotta value, and I think moving forward, we can add even more. - [Joshua] I'd like to keep going, but thank you. - Thank you. - Thank you. - Before we go to the next question, I'd like to acknowledge Sam Craig. Sam, could I ask you to stand up, please? (audience applauding) Sam just retired this year. He ran the EMT program, and he hired me to teach here at NYU. Thank you, Sam, for such a great job. (audience applauding) - [Kyle] Hey, Mark, my name's Kyle. I'm an MBA student here. I'm not sure if you remember me. - Love the overalls. - [Kyle] Thank you, thank you. I had the opportunity to present my brand to you a few months back. During our conversation, you said you used to wear overalls all the time in college. - I did, yeah, yeah. 'Cause ya know why I wore overalls? Because I had a pocket for vodka, I had a pocket for mixers. (audience laughing) - [Kyle] Exactly. That's what you said, so you're consistent. - See? - [Kyle] My question to you is-- - The truth is always that way, ya know. (audience laughing) - [Kyle] If you'll accept a pair of Hoosier logo, a pair of Swoveralls with my investor deck. - Wow. - Sure. (audience laughing) - Better than an NYU jacket. - Those I'll accept. Come on, bring 'em down. (audience applauding) Wow. Whoops. Thanks, Kyle, appreciate it, buddy. - Smart move. (audience laughing) - Did I say I went to Indiana? - Over here. - Here we go. - [Man] How you doing, Mark? What I wanna know-- - I hope you're on radio or something. (audience laughing) - [Man] Yeah, I am. (audience laughing) What I wanna know is that-- - Are you related to Barry White? I just got. (laughs) (audience laughing) - [Man] Yeah, that's my cousin. (audience laughing) No, what I wanna know is how do you pick an industry and dominate in it? Don't just play it, just go in it and dominate because without dominate, nobody pays attention. - First of all, if ya have to ask, then you don't know. That's why I said in terms of what your first job is. You just gotta find something you love and just dig in. Find a niche that you start with and just expand from there. It's not like I can just tell you this is the industry. Well, I will. If everybody asked, "I need a job, Mark. "What's a way that I, as an NYU student, "can make money right now? "I need to get paid." All right, I'm gonna tell you exactly what you should do. (audience laughing) That's what I learned on television, dramatic effect. (audience laughing) Alexa, if you've ever used Alexa and all the different Amazon devices, developing skills on Alexa is a huge opportunity. It's like writing the simplest HTML code. Super simple, yet 99% of the people who buy the devices don't know how to do it. Businesses, car dealerships, individuals and homes. I've taken the time to use blueprints and teach myself how to write skills. I set it up for my kids so that if, my son's name is Jake Cuban, so that if you walk in the door, and I do this to embarrass him in front of his friends, Alexa, who is Jake Cuban? It goes, "Jake Cuban is the fart master." (audience laughing) But just stupid shit like that. But it's the same concept because in businesses, this is what's new. People are so in tune with just trying to keep up and run their own businesses, they don't pay attention to what's new. Now what's the extension from that? Well, as people start using voice-activated devices more and more and more, what about voice-activated SEO? You know Amazon, probably the smartest company in the world, is pushing you to order and do everything. Well, how is SEO working? I'm learning, I'm figuring it out, how SEO is working. Why aren't y'all? Because if you're that person that walks in and says, "You know what? "In your business, here's five different places "that you can use Alexa. "Here's the devices, here's how ya use Alexa, show. "I'm gonna script out all the commands for you. "Then I'm also gonna show you how "to use SEO so that when someone says, "'How do I order Mavericks tickets?' "there's already a script, there's already "connected to those keywords, and they come to me." That's what we're doing. That's a unique opportunity that you can spend an hour a night teaching yourself. Within three weeks, you're the expert and you can go charge 30, 50, $75 an hour. Then you send me my $25 an hour commission. (audience laughing) - [Man] Thank you. - Thank you. - [Adam] Hi, Mark, I'm Adam Licker. I'm an MBA student here-- - Hi, Adam. - [Adam] I had a question for you about television and entertainment. I'm not curious what you're watching, but how you watch. Are you a cord cutter? What services do you subscribe to? Then also, do you have any predictions on what the media business is gonna look like and what the old-school companies, like a CBS or that ilk, needs to do to survive the next five to 10 years and beyond? - Sure, I use everything. There's not a service I don't use. There's not a platform I don't use it on because, like I said, I wanna stay ahead and I wanna be able to kick your all's ass. That's one. Two, in terms of transition, obviously traditional television's dying quickly. I just read something that for 18 to 49, ratings are down 27% in just two years. There's a challenge there. The unknown question for traditional television is as people age, like as Greg gets older, (audience laughing) does he revert to traditional TV or do you stay with streaming? That's part two. Now the bigger question. Sorry, Greg. I get the same shit all the time, too. The biggest question in all of that is 5G. Because 5G changes everything. I've been trying to convey to those industries that 5G with zero latency and much higher speeds is going to cut the broadband cord. For those of you, like you might order your internet first thing when you move into a new place or whatever, not anymore. You're not gonna wait for the cable to come in. You're just gonna order 5G and it's gonna be wireless, it's gonna connect with your phone and everything else. Maybe you put your phone in the little holster that connects your apartment or house or whatever it may be. When you have zero latency available like that everywhere, then apps will change and how you consume all types of content will change. It can be a lot more interactive 'cause of the zero latency, so we'll see more of that. These are all the types of questions that I think we don't have the answers to that will impact all those outcomes. That's what I pay attention to. - [Adam] Thank you. - [Alexander] Hi, my name is Alexander Heyman and I am-- - Alexander Hamilton? - [Alexander] Alexander Heyman. - Heyman, okay. - [Alexander] Heyman, like hey, man, what's up? - Heyman. (audience laughing) - [Alexander] Today I wanted to ask you about how to make passive income. I'm a musician and that's what I wanna do full time, but on part time-- - Seriously? (audience laughing) No, not the musician part, go for it. The way you make passive income is to start with a whole lotta money. (audience laughing) - [Alexander] That wasn't about my question. - Go ahead. - [Alexander] I have a set of money. I wouldn't say it's-- - Oh, good for you, good for you. - [Alexander] Set aside-- - Good for you. - [Alexander] I've done a (Mark claps) couple successful calls and puts on stocks. (Mark claps) I was wondering what your method to investing and diversifying-- - Couple things. - [Alexander] Your portfolios? - When you're looking at investing in stocks, you always have to realize whoever you're buying from is not an idiot. There's a reason why they're selling it. Chances are, they spent a whole lot more time than you have in trying to figure out why to sell. Now that's not to say you can't make money every now and then 'cause it's not easy to beat the pros. The pros can't beat the pros. Typically I tell people two things. One, if you have any debt, pay it off because that debt, paying off that debt is a guaranteed return. If you're paying 19% on your credit card. Now if you pay it off within 30 days, more power to you. Most people can't. But if you pay off that debt, you just made 19% on your money. Second way to do it, you buy toilet paper? You buy toothpaste? Get that 30% off, buy more of it. Seriously. Stacks of toothpaste. (audience laughing) Razor blades in particular. I bought all the razor blades I'll ever need for five years. I got my 40% off, I made 40%. - Do you have a plane for those (audience laughing) kind of items? - I have a big closet though. - A little cargo plane somewhere that-- - Where I store it all? But seriously, just being a smart shopper. If you know you're gonna be buying $5,000 worth of these things, and you can save 40% on those things versus how you otherwise might buy it, that's a return that's passive income. Most people just don't think of it that way. Paying off your debt, being a smart shopper and taking advantage of bulk or whatever it may be is two. Then three, just SXP funds. Really low-cost mutual funds. At your age, you just put 'em away and forget about it. - [Alexander] Yeah, I have T-bills. - There ya go. (audience laughing) You're way ahead of the game, congratulations. - [Alexander] Thank you. - What's your latest hit so I know? - [Alexander] I'm working for Kendrick Lamar's engineer over the summer. - Cool. - [Alexander] I'll be releasing my song very soon. You can check it out on-- - Under what name? - [Alexander] Under Heyman, like hey, man, what's up? (audience laughing) - There ya go. (audience applauding) - [Alexander] My song is about never being in debt and always paying your credit off. (audience laughing) - Guys, we have only time for one more question, so I'm sorry for those of you that stood in line. We have time for one more question on this side. - [Rashiv] Hey, Mark, thanks so much for coming and talking to us. - My pleasure. - [Rashiv] My name's Rashiv, I'm an undergraduate student here. My question is I heard Reid Hoffman saying that in order to scale, you gotta do things that don't scale. Like when he interviewed Airbnb, he's like, "Okay, don't try to make a three-star experience. "Try to make like an 11-star experience." That sounds awesome, but all the craze right now in startups is agile, lean. Build an MVP, get feedback, build it a little bit more, get more. How do you reconcile those? How do you build something amazing, but start, and then other people-- - You ask your questions 'cause it's all, you ask your customers, it's all relative. If you have a great experience, then they're gonna be happy. 11 is great, like, oh, my God is great, but if ya can't get to 11, just ask your customers. Whatever it is you're doing, just be better than that. Airbnb can talk about an 11, but if you've used Airbnb, I think they rented out my old apartment. You've just gotta put yourself in the best position to succeed by taking care of your customers. Just like I told that first customer I had, I'd walk your dog, whatever, you just gotta have that attitude and go out there. But you do have to have customers. There's never been a business in the history of businesses that succeeded without sales. Customers will tell you by whether or not they spend money with you. - [Rashiv] Sounds good, thanks so much, Mark. - Why'd you wear a suit? - [Rashiv] I forgot my Indiana jersey at home. (audience laughing) - That's fast. (audience applauding) - That's good, I give him credit. - Okay, I'm gonna get in trouble. We're gonna do one more. - [Mahmoud] Thank you so much. Mark, I'm an NYU graduate from-- - Everybody else can sit down 'cause we can't take anymore. - Go ahead. - Thank you. - [Mahmoud] My name is Mahmoud. I graduated from NYU School of Engineering about a year 1/2 ago. - Thanks, Mahmoud. - [Mahmoud] I have been working in venture capital in New York since then, and my technology knowledge has helped me out a lot in that. Now I'm in the process of setting up a venture fund. I have two questions basically. A lot of the students here, they're all from other parts of the world, not America. Eventually because of immigration laws and work laws and everything, a lot of them will end up going back to their home countries, essentially. - That's unfortunate. - [Mahmoud] Do you have any advice for people who are in this room who have acquired a lot of knowledge and learning from here and now want to go back? Then the second question becomes that how important is venture capital, essentially, and doing anything about your learning there and taking it back to the industry or whatever? - Well, the first thing I would do is really talk to every single person you know that's eligible to vote, and kick 'em in the ass and make sure they vote. (audience applauding and cheering) Because that's the only way it's gonna change. But that's your way to help control your own destiny. Get out there and volunteer. You don't have to be an eligible voter to volunteer for the candidates that you support or you think really help. In terms of venture capital, I'm not as big a fan of vulture capital as a lotta people. (audience laughing) I'm a really big fan of sweat equity. Because once you take money from somebody, everything changes, right, Reggie? (audience laughing) It's just different because when it's your baby, and even though you might be capital constrained, you get to call all the shots. Once somebody else comes in, everybody's got their own opinions. If you can do it without taking capital, that's always the best bet. If you need to go out and get capital, friends and family. Once you get friends and family, or if you can't get friends and family, then you have to start getting, like the last gentleman was talking about, MVP, most viable products, and moving and starting to create sales. Because if you can get a company that's generating sales, maybe even profits, then hopefully you don't have to raise money, but if you need to, you have-- - [Mahmoud] The question I was asking, would you have advice for a person like me who's going back to their country again in a few years, setting up a VC fund that taps into the ecosystem of innovation here to the benefit of the industry there? - Look, anytime you get to leverage your networks, that's something Greg is great at, then take advantage of it. But it depends on the country and it depends on the laws and it depends on the cultural norms there. It really is individualized, so I'm not really the person to speak to that. But good luck. - [Mahmoud] Thank you. - Great, so thank you for the (audience applauding) questions. Now you're gonna see three of the best presentation from NYU. - Cool. Now we need everybody to go du-du-du-du-du-du-du. (audience laughing) - We're gonna take one second. They're gonna move these chairs around. Somebody's gonna do that. Oh, yeah, oh yeah, we're gonna give you a gift now. - Cool. - Come on, let's give a gift and a big round of applause. (audience applauding) I'm doing a selfie here with you, Mark. Gonna get a selfie with the whole crew. My class knows this is our signature selfie. Oh, I forgot my selfie stick that (audience laughing) somebody gave me. - I would not do a picture with a selfie stick. (audience laughing) - Come on, everybody has to at least pretend to be clapping. (audience applauding) Thank you. All right, let's get ready to do this. We're gonna have somebody who's gonna be doing the announcing. - Mm-hm. - Yes. - Yes. Oops. Hi, everybody. I'm Cynthia Franklin. I'm Director of Entrepreneurship at the W.R. Berkley Innovation Labs, and I also have the pleasure of teaching the Startup Lab, which is an undergraduate course here at Stern. I just wanna shout out to Startup Lab students that are out there. Thank you very much, many of them are wearing the ideas never sleep garb. They are helping out, so thank you very much, students. (audience applauding) Normally I'm quite witty and funny, but I've been told I have about 13 seconds, so I'm just going to do a seven-second commercial. That is to invite everyone here in the room who is an NYU student, alum, faculty member who is interested in starting a venture or who's already in the process of starting a venture, we'd love to work with you. That's what we do. To the last question there, or the next to the last question regarding MVPs, we have a bootcamp this Sunday in this very room on concept testing and prototyping. It's not incongruent. You can do both. We work a lot with that at the W.R. Berkley Innovation Labs. It is my pleasure to introduce three teams that we've had the honor of working with over the years who have come out of the, a lot of programs at NYU because NYU has a lotta resources, but most notably the 300K Entrepreneurs Challenge, which is the single largest entrepreneurship initiative that my team puts together here at Stern. First up will be Josh Sakhai of Ephemeral Tattoos. Go for it. - Ephemeral Tattoos. (audience applauding) - Can I borrow your clicker? Hey, Mark, hey, guys. Thank you for having me. - What about Greg? - Greg. I didn't even see you, you look so young. (audience laughing) How are ya? I'm Josh. - That's a great one. - I'm the co-founder and CEO of a company called Ephemeral, and we're gonna talk about tattoos. Tattoos have become this massive part of our culture. Right now, about 90 million Americans have tattoos. Most people I've spoken to who don't have one have thought about getting one because, well, they're pretty awesome. But what isn't awesome (audience laughing) is the regret that comes with it. Tattoos are permanent, but people change. Your lifestyle, your relationships, it's all gonna adapt as you start to grow. Figuring out what you want for the rest of your life can be really hard. Forget about removing tattoos. The only way to remove tattoos is with laser surgery. That's actually my friend Seung's arm. He went through laser. Paid 500 bucks for one session. Left him with permanent scars. He was told to come back 10 more times over two years. He didn't go back. If you wanna get a tattoo, you've got two options. You can get one of those kinda silly temporary stick-on tattoos that maybe last two weeks, or you can get something that lasts forever. There's really no space in between. That's why we started Ephemeral. We're the team of Ph.Ds in chemical engineering. We're creating tattoo inks with different lifespans. These inks are applied by tattoo artists the same way they would apply any other ink, but fade away completely naturally and on their own. The first product we're launching is a four- to six-month tattoo. We're opening up our shops by end of 2019 right here in New York. Now, Mark, you might be thinking maybe tattoos could be a thing for me when I was younger. I wouldn't forget my girlfriend's name. But I'm a little older now. - You wanna see my tramp stamp, right? (audience laughing) - That's awesome. (audience laughing) Honestly, I think you've gotta go to some Mavs games with some ink. Imagine how pumped up (audience laughing) they would be if you walked into the next game like that. I think they would go wild. In all seriousness, we see a huge application in sports. Players and the fans can support the teams they love. I think you'd be the best guy to lead that effort. (audience laughing) We started off research on our technology around four 1/2 years ago in a tiny little lab space, literally just one bench, up in Harlem. Over the last four years, we've taken the research through in vitro studies all the way to early human studies. When I say early, I mean really, really early. Right now, the tattoo industry generates around $2 billion, just north of that in the U.S., but we think this market could be so much larger. We've spoken to around 500 millennials around New York and learned that 2/3 of 'em who don't have tattoos actually want one. The only thing holding them back is a lifetime commitment. Not even just opening the market to these new consumers, but changing the way people purchase tattoos. Instead of getting three tattoos in their lifetime, we think people are gonna be getting three tattoos every year. They're gonna come to Ephemeral, fall in love with their pieces, they're gonna go away and they're gonna come right back. A bit about the team. I was born and raised in a Jewish family in Long Island that hates tattoos. Came to New York to study computer science at NYU. Now, obviously, I run a tattoo company. (audience laughing) Our CTO and co-founder Brennal was a former adjunct professor here at NYU. He most recently came from the Open Innovations group at Unilever. Our VP of engineering and co-founder Vandan was actually Brennal's mentee while he was doing his Ph.D at NYU. They've worked together over the last four years. A bit of company history. We started here at NYU. The first two years were supported, thank you, Cynthia, entirely off of these super scrappy, non-diluted funding, competitions, grants, any free capital we can get our hands on. NYU is a huge supporter, so thank you, guys, for helping us get there. Two years later, towards the end of 2016, we got our first lab space, started to do some studies. Raised around 500K in small free seed round angel and small VCs. Went through Techstars. Towards end of 2017, raised our first round of venture. Mark's advice is good advice on venture. This year, we scaled up our studies. We're scaling up from three subjects to 50. Should be opening up our first shops. I think somewhere there it says partnership with Mark Cuban, but we can talk about that later. (audience laughing) Thank you, guys, for your time. If you wanna learn more, always feel free to shoot me a note. Wanna get some tattoos, you know where to go. Thank you. (audience applauding) - So when do you release your product and what's kept you from releasing it so far? - Yeah, so R and D's really hard, it takes a lotta time. In our business, particularly, there's a long feedback cycle. If you wanna get a tattoo-- - Feedback on what? Feedback on what? What is the element of the product that requires feedback that you're uncertain about? - Good question. Watching the tattoo as it starts to fade. One thing that's important to us and important to our customers is making sure that your tattoo doesn't look like crap one month in. It's gonna last six months, and it looks like crap for more than 1/2 that time, that's not a nice product. Something that's really important to us is optimizing its fading profile-- - That's crazy. First of all, no one's gonna expect perfection. Just one line to remember, perfection is the enemy of profitability. You don't need it to be perfect. You've already raised $3.3 million at what valuation? - Most recent price was on 12. - On 12. You've sold 25, 30% of your company, depending on the earlier valuations, right? You don't wanna have to raise more. Why do you think it has to be perfect in how it fades, as opposed to just telling somebody everybody's skin type is gonna react differently to the fade. So it'll effectively work for at least a month. What's it cost you for the ink? - Ink is cheap. - Right. The time is just the time from the tattoo artist, right? They're gonna charge that separately anyways, so why wouldn't you already have opened your store and say, "Look, it'll be great. "Based off of your skin type, "here's a little chart. "We're teaching our tattoo artists "based off the chart. "You've got 30 days for sure, and we're only "gonna charge you 10 bucks. "The tattoo artist will charge you whatever, "depending on the complexity." Then we'll learn because people are trying it. - That's a great question, great points. For a while, that wasn't our problem. We were having trouble getting the ink to go into the skin, stay in there and heal nicely. Just now we started to solve those problems, and this has started to become our concern. If we keep talking to customers-- - Wait, wait, wait, wait, wait, wait, wait. So you're saying it didn't work. - Well, didn't work is a little challenging. Let me clarify for a second. - It's very binary. (audience laughing) - No, to the extent that it worked, we were getting ink to go in the skin and go away, but it wasn't lasting very long. It was lasting less than 30 days. Something we had to work on-- - So why didn't you come up with a two-week tattoo? - You can just get a sticker. - What's that? - You can just get one of those stickers. - But still, you've got the upside of it being able to be retained. Come back every two, three weeks. The point is, like someone said earlier, you wanna be able to get it out there. As long as you set the expectations the right way. You might not sell as many, but at least you're going to get the feedback and as long as there's no threat of injury or threat of complications, which it doesn't sound like you're concerned about. - No. - Then why wouldn't you just start doing it? I'm sure the differentiation is based off of skin type, right? - Sure. - The ink and the skin type, which is gonna be a variance anyway, so you can't promise a specific amount of time anyways. Why wouldn't you just do it now? - These are great points. - Well, that's why I'm here. (audience laughing) You didn't answer the question. You've talked around it. - At this point, we haven't even gotten the ink to look that great. - Well, that's a problem, right, because that's not what you said. You said that you're going to 50. Either it works or it doesn't work. Does it work? - Define work. (audience laughing) - Do I say that looks like shit or I can live with that? - It depends, but it doesn't look great right now. - What's even worse is if you said, oh, I thought it was gonna fade. If that-- - That's not the issue at all. - That's not the issue? - It's going away. - It's gone, gone? - Yes. - What does it take for you to get from two weeks to four weeks to six weeks? 'Cause that's the uncertainty from an investor's perspective. How do you solve that problem and what is the solution? - Engineering. That's exactly why we're doing the labs. Slight changes to the formulation, slight tweaks. - Is it engineering or is it chemistry or? - Engineering. - Engineering. Explain that 'cause that part I'm uncertain in dealing with inks. - We have two more presentation. - Okay, sorry. - You're starting to fade away. (audience laughing) - It's a great idea. - Very short presentation. - It's really a great idea. The challenge from my end is that you've already raised $3.3 million. You've gotta be able to show me that you can effectively use that $3.3 million to get to a sellable product. Now I'll say it again, perfection is the enemy of profitability. If you can get to the point where it's not a perfect product, but because it's so differentiated, it does solve. Like the henna tattoos and everything, people know it's a henna tattoo. Really, for a drunk at 12, you went out, you go to NYU and it's two in the morning and your friends are getting a tattoo, and you don't want a henna 'cause you'll look like a bum, but you can do this and it lasts for a month or two weeks or whatever, and you're getting the ink and you're going through the whole thing, yes, people are still gonna say yes to that and they'll pay a premium for that. In this particular case, you've gotta know what business you can be in, as opposed to the perfect business you're looking to solve and the problem you're looking to solve. Again, you can introduce this and solve that late-night problem and temporary, at least I got a tattoo. I saw what it was like, I know what it's all about. Charge a premium for that, and then work on your chemistry in parallel. I think it's a great idea. I think you've already raised too much money for me to get involved, but you know my email, and so you can keep me updated. - Sure. Thanks, Mark. Thank you, guys. (audience applauding) - [Cynthia] Okay, ladies and gentlemen, please welcome Kobi Wu of Visuwall. (audience applauding) (Greg grunting) - Don't do that to me. Don't do that. (Greg grunting) It's great to be back. Thank you, everybody. I graduated here A15 from the executive MBA program. Cynthia, thank you for inviting me. I did not win, Josh won that year, but that's okay. We're here today. Very excited to introduce you guys to Visuwall Technologies and introducing it to all of you, as well. Very simply, we are a data-driven marketplace that is paving the way for programmatic outdoor, one storefront at a time. As you know, the face of retail is changing, or maybe you don't know that, but you can see it if you're walking down the street. If you go down any street in Your Town, USA, you'll see a lot of vacancies. Those vacancies are staying empty for 24 to 36 months. Landlords are making no money during that time. It's painful. But it's a huge opportunity that's been hiding in plain sight. What we do is we take a vacant storefront, we put a big pretty picture in it. Media, eye-level media. You've seen it before. It looks great. But we're doing a little bit more than creating just a billboard at eye level. We have computer vision technology that's sitting behind every picture that's telling you how many people are walking by and the level of engagement. What do I mean by engagement? ♪ Cardi B I run this shit like cardio ♪ - We're gonna talk about it for a little bit. ♪ Diamond district in the Jag ♪ - Turn it up, my team. ♪ Certified, you know I'm gang, gang, gang, gang ♪ ♪ Drop the top and blow the brains ♪ ♪ I said I like it like that ♪ ♪ Oh he's so handsome, what's his ♪ - All right, all right. Cardi B and I, we decided that that is engagement, those heads turning and for as long as they were looking. Granted, I slowed it down, but you know that you saw two eyes looking at that picture. That's very important analytics for any brand, and not for nothing, landlords, as well. Visuwall is basically a marketplace that allows an advertiser, a media buyer, a brand director, whoever, to go onto the platform, find the location, assess the media rate and plan their campaign. Production for us is turnkey. You just deliver the artwork to us and we take care of the rest. Then there's a dashboard that actually gives you your analytics in real time so you can see what's going on with your campaign in real time, by the second, by the day, by the hour or at the end for a nice neat and tidy report. The analytics that we're providing to you, like I said, it's computer vision so we're able to tell you the brand if it's a man or woman walking by, your approximately age and whether they're smiling, happy, sad, neutral, disgusted, confused, what have you. It's no secret most New Yorkers are disgusted or neutral. (audience laughing) The way we deliver our artwork is simple. The media can be a vinyl cling that's adhered to the interior of a window. You could take over the full landscape of the window. We call those scapes. It's window sill to window sill. There's sheets, which is four by six, which is the standard side of a bus shelter, so you're very familiar with that. We also have a shadow box where you can display an actual product in the window. You just pop that sucker in there and we take care of that for you. Then the third is kinda the vision of where we're going. Digital screens in a storefront window, which allows us-- - Let me interrupt, sorry to interrupt, I apologize. - Sure. - Not all those in the previous slide were digital screens, right? They were-- - No, those are static. - Those are static, just sheets. Okay, got it, okay, sorry. - You're moving to the digital. - I'm moving in digital. Digital allows us to sell it, sell the media now instead of static, where it has to stay put for a week, two weeks, a month. Now we can sell it by the seconds, so 10 seconds, 30 seconds, or even a 60-second domination. Overall, the synopsis of our benefits are we're providing incremental revenue to the landlord. Thank you very much. We're providing demographic and traffic analytics that people on both sides of the marketplace find super valuable. Not for nothing, we're increasing curb appeal. Doesn't it look so much better than just that brown paper that's peeling when it gets cold and it looks nasty and you don't know what's going on inside and you're actually kinda wondering what's going on side, but then you're like, no, no, no, let me just scurry by. Anyway. To date, we've done very well. Since we left Stern, we have worked with some great brands. We even have Uber, adidas, Marie Claire on the hopper. Hopefully up in window by March. Our landlords have provided us properties across New York and Los Angeles. We've got about 80 on the platform right now. We're looking to expand that as we grow into our broker strategy. We are probably going to see about $300,000 in this first quarter. Thank you. (audience applauding) We're excited about that because, of course, that's exceeding 50% of what it took us 12 months to make last year. We're gonna be in Chicago and Miami by the end of this year. We will be expanding to additional markets, like Seattle, Boston, Philadelphia by the end of 2020. By the end of Q2, you will see a new marketplace and dashboard which allows all of you all, if you have a property, to list it yourself. Basically, we're like an Airbnb now, if you will. We've kicked the door in, in terms of retail, in terms of beauty. We're now kinda looking at sports and entertainment. We feel that the journey to arenas in order to see a game or to see a concert is the next thing to go after. If you know anybody. (audience laughing) - But why, why? - Because. - Because, that's always a good answer. - Because is a great answer. No, if you're on your way to the arena, brands are excited to present their messages. - You're just talking about better traffic availability? - Absolutely. - Got it. - It's a concentrated group of folks that are on their way to the arena. But not for nothing, the brands that are in the arena now have an opportunity outside. We can expand that footprint. Anyway. (audience laughing) Thank you so much. I'm looking forward to speaking to anybody who has an arena in their back pocket or a team franchise. (audience laughing and applauding) - Do you have something, Greg? - My first question is measurement, attribution. I get it, domination and surprise. The brands are gonna ask you to measure. I see you have the dashboard. But it has to, at some point, convert to something. How far down the funnel are you taking your customers? Or is it way, you're keeping them way up top, branded plus? - We are absolutely looking towards digging in a little bit deeper. With the introduction to the QR code reader on iPhones, people are starting to find ways to implement that in windows, which we're finding helps with at least that click-through engagement. We've geofenced all of our locations and we can understand who's in those locations from mobile devices. - Good start. - We can deliver ads directly to those mobile devices. Tap that ad. If you see it, it'll take you right through to whatever dedicated page-- - Hold on, hold on, okay, okay. - Now you're excited? - No. - No. (audience laughing) - You have to explain to me exactly what you're doing from a computer vision perspective because a lotta people say there's computer vision, but just putting the little camera, like you have there, isn't gonna give you computer vision and it's not gonna give you accurate demographic information and it's not gonna give you an accurate count. You gotta tell me exactly what you're doing and how. - The sensor that's actually in window is looking at the people that are directly in front of it. It counts out to 30 feet. We have another sensor that would move across a hundred feet. - What technology are you using? Because, again, and if you just don't know, you don't know, but there are different ways, using computer vision, there are different ways to count what goes in front of you. Most of them fail because once you go from, it double counts and triple counts and quadruple counts. (crosstalk) Walk back. Four people, it's hard to separate. There are very specific technologies that do that, a couple of which are a couple of my companies that I have patents with. - I know about one or two. (laughs) - That's why I'm asking specifically. - A, I'm open to using some of those other technologies. - It's expensive. - It is. - Put aside the camera, you need the connectivity because if you want it in real time. Where I was gonna go with this, you don't need it. - What, the computer vision? - Yeah, you don't need the demographic information. What makes this work is, I think it's a great idea, but what makes it work is you just use sheets, which are cheap. If you're selling to, if you're going to a brand. First of all, you've acquired property. Like you said, there's a lot of empty real estate, so it's a great opportunity. But what makes it work is you don't have to make a capital, would make it work good is not having to make any type of capital investment because by doing it this way, put aside using displays, you have to have power, you have to have connectivity, you have to pay by the bit or ya have to pay for the setup fees, you have to monitor it, you have to measure it, you have to confirm the accuracy. That complicates it dramatically. - It does. - As opposed to, and put aside the music. The cost of a sheet, like one of the sheets you have for, what does that cost? - A couple hundred bucks. - At the most. Even customized and everything. Being able to say to a brand, "Okay, on the way to the American Airlines Center, "or going down Fifth Avenue in New York, "for $27,000, we already know, generally, "there's 26,000 people walking by "on any given day. "This is the cheapest way for you "to get access to those people. "Everybody else has got this huge capital cost. "We're lean and mean. "We'll give you a beautiful graphic "that makes you stand out. "We can change it as often as you want. "Pay me." Now your way, you've complicated it because you feel that there's such a need to provide demographics to get everybody certainty on how they're seeing that you've jacked up your costs dramatically. Rather than taking the path of least resistance, which is always the best way because you can iterate, you can learn, you can take care of your customers much more quickly, and you're spending all this other ancillary money to do the technology. If you said to me, "Mark, "if you wanna see my companies, "you can go to markcuban.com. "I went through and looked at this company. "Alissa's Cookies would be great. "Because all your inventory's perishable, "I have this inventory that it takes us "three days to get the sheet made up," or maybe one day if you go to a fast print place. "We can have it up. "For a thousands dollars, you get it up "for one day to promote your brand." That's easy money. - It is. - Then you do your split with the real estate company-- - The landlord. - Property management company. Boom, boom, boom, you get to go everywhere immediately. You don't have to make sure that they have power and all that other stuff. Why not keep it simple and just take the path of least resistance to more money? - Okay. (audience laughing) - We're running out of time 'cause we have one more group. - Real quick, how much money have you raised? - 550,000. - Don't raise another nickel. - Don't want to. - Seriously. It's a great idea-- - Thank you. - If you simplify it. Just go where it's easy for people to spend money and you don't have any capital costs. Window meet sheet from customer that paid me X amount of dollars, depending on the traffic and how much inventory I have available 'cause then you can vary it. If you're selling everything on Fifth Avenue, as an example, raise your prices. If you're not, you lower 'em. They can be variable pricing. Do it that way and it's easy money. - So scrap the technology part-- - Yeah, who needs that shit? - Oh, (laughing) okay. - Seriously because it's gonna be incorrect no matter how hard you try. That diminishes the overall value there. - Hm. - Good luck. - Thank you. - Thank you. (audience applauding) - [Cynthia] All right. - Who's my next victim? (audience laughing) - [Cynthia] Actually, you still wanna come up, Chris? (audience laughing) Christopher Mitchell. - Wait, Christopher, before you come out, first of all, I was remiss. Sunday nights on ABC, Shark Tank. (audience laughing) I'm gonna tell you, this is exactly how it works. We know nothing when people walk in. On TV, you see it for 10 minutes. We get in there and we might grill 'em. If it's a silly deal, it might take 20, 30 minutes, but if it's legit, something like these companies, it could go on for two hours. - Wow. - Then they edit it down. What you're going through, it's not just me. There's five idiots up there (audience laughing) and we're all grilling you. Congratulations. - [Kobi] I feel for those guys. (audience laughing) - Me, too. (audience laughing) Go ahead. - [Cynthia] Christopher Mitchell of Geopipe. (audience applauding) - Hey, everyone. Perfect. Have you ever thought about what it would take to create a perfect copy of New York, San Francisco or Paris that you could explore in your computer? I'm Dr. Christopher Mitchell and I'm excited to introduce you, and you all, to Geopipe. Creating detailed virtual copies of the real world is a core problem across many industries, worlds that can be used for visualization, simulation and interaction. While raw data about the world, everything from photographs to laser scans to maps is readily available today, it's still expensive and time consuming to turn this data into usable 3D models. Geopipe aims to be this missing link between data acquisition and data presentation. For example, consider autonomous vehicles. They need to be trained in virtual copies of real cities, virtual copies that show where every single curb, lane, tree and street sign is. But creating those models today can take huge teams of artists months of time. Geopipe aims to solve this by understanding what's in the world, not just how it looks. Similarly, for video games, you often want to take a game and set it in a real world, but creating a model of an entire city can take a team of artists months. Geopipe can create a model of an entire city in less than an hour. Finally, consider an architect. Even for extruding and modeling, a plain white model of a single block can take an hour. If you need to add detail and color and expand this to an entire neighborhood, the time can spiral out of control to months. Geopipe allows you to get a model of a city at any level of detail, at any scale, in about 30 seconds. We're working within what in 2020 is estimated to be a $17 billion space of 3D mapping and 3D modeling. Then within this, about 7 billion will be spent specifically on creating 3D models of the real world for automotive applications, training simulations, for entertainment and for architecture, engineering and construction. My co-founder Thomas is rarely seen without a Star Wars T-shirt, and I really love trains. But more relevantly, we share a passion for distributed systems and algorithms. I'm Geopipe's chief science officer, chief executive officer, excuse me. I got my Ph.D in computer science right here at NYU. Although Thomas almost came to NYU, he's at Brown. He's in the last month of his Ph.D, also in computer science. We have exactly the skillset necessary to solve this problem, and we've spent 15 years working together building teams and solving big problems. We've also collected an advisory board with expertise across business, entrepreneurship and academia, and we now have a team of four working with us. We consider one of the coolest parts how it works under the hood. We start with raw data about the world, that same raw data that I talked about that's pretty readily available, everything from photos to laser scans to maps. We get this data from a variety of sources, public, private and government. Then we pass it through our proprietary algorithmic pipeline. As cliched as it is, we do use deep learning and computer vision techniques, and I'm happy to go into as much depth as you like, to examine this data and understand the shape and facades of every building, the locations of trees, the number of lanes in roads, where sidewalks are, where water is. Then we go one step further, turning this enriched understanding of the world into detailed immersive 3D models. We allow our customers to access our models through a simple, easy-to-use web interface called Contextsnap. They simply select an area that they need, the level of detail that's appropriate to their application, and then they can download those models to use in the software that they already love. We also allow customers who would prefer to take our models and put them directly into games, simulations and VR experiences to use our Unity SDK and our API to stream those worlds directly into their applications. For example, our Unity SDK allows you to fly, drive or walk through an immersive copy of a real city with every detail reproduced. - This is every detail being produced? - We're getting there. (audience laughing) Happy to talk more about that. We bootstrapped ourselves with about 400K in non-diluted funding over the last two 1/2 years to a first fully functioning product. We've worked with customers in the architecture space and in the gaming space. We've had dozens of free and paid customers. We're working on bringing an additional $200,000 of potential annual revenue through our pipeline to prove product market fit this year. Thank you to Techstars, to the Berkley Innovation Lab and to other places that we've been able to refine our company and our business model. We're in the process of expanding the coverage, getting more customers, building our team, getting to ever higher levels of detail. We're in the process of closing the final chunk of a 500K pre-seed round. If you're as excited as we are about understanding and analyzing the world on a massive scale, we would love to speak to you. We are Geopipe. (audience applauding) - The demo that you gave us-- - Yes. - Didn't have all the detail? - Correct. - Is that where you're at, and you're in progression to get further? - That's exactly it. - Your real challenge is processing speed and the time it takes to process everything? That's your cost and that's your time consumption? - Almost all of our budget goes to R and D. We have models we can produce now that are already good, more than good enough, for architecture, engineering, construction companies. - Those are physical models that are printed out? - No, these are virtual models. - Only virtual, okay. - They can look at them on a screen. They can print them out, but they mostly use them for virtual applications. - When you say what's good enough, 'cause that's the question. Because if it's good enough right now, then you have a product. - Exactly. - If it's not good enough, like what you showed earlier, then there's different types of challenges. - It is good enough for architecture, engineering and construction. We've had those as customers. - Did anything you showed us show us the level of detail that represents what you can do right now? - Yes, everything in that is what we can do right now, and good enough for that first set of customers. We're just reaching the point where we're good enough for gaming and entertainment applications. - Then I'm guessing, and tell me if I'm wrong, the challenges now are capturing enough data for your models, or having the right data in your models so that you can create it with the least expense possible in the least amount of time 'cause you're saying you can do it in an hour 1/2. - Right. - Right. What's kept you from getting to the higher end production? - Yup. It's simply the R and D time to implement-- - But what are you R and D'ing? That's what I wanna get to. - We, my co-founder and I, both have expertise in this area, and we've-- - I know, you told us. - Planned out, yes, (audience laughing) exactly what we need to do. We know what additional computer vision techniques we need to extract more information from the data we already have, for example. - Right, okay. You're creating the libraries or you're using third-party libraries? - We're creating the libraries. - You're creating libraries that can take a picture, extract the data that you need to be able to re-create it, and you use other sources of data into your model to be able to find what you already know? - Right. - Right? You'll take satellite, not satellite data, but you'll take actual data mappings-- - Could be satellite data. - Yeah, but those are typically. Okay, could be whatever data. Then you need to be able to extract more from the computer vision to get more discreet data. Then you need to have the processing power. Writing those algorithms to extract more CV, more data from computers, from pictures, is gonna be time consuming and it's not easy. Otherwise, you've already done it, right? - Right. - How long, when, how many more Ph.Ds, how many people? - Then if I can add to that. - Please do. - How are you gonna make, what's some easy money that you can make along the way to help your burn and help pay some of the bills? - To answer your question first, that's why it's good that we already have customers whose needs we're meeting, in terms of the level of detail, because those are customers who are already paying us and giving us money. - How are you charging them? - We are charging either on a monthly basis, depending on the number of users at those companies that are on the platform, or on an annual basis. That works well. - You're saying these are the locations and the destinations we've already created? You have access to those models? - Right. - You pre-configure certain destinations and you say, "Here's the level of detail "that we have. "Does that fit your need?" - Exactly. - If it's like a game where it doesn't have to be too detailed, then you've just saved 'em a bunch of coding time, and they just download the model and they input it into Unity or whatever? - Correct, right. - Why not go bigger with that? Because that seems to have a decent size market, to Greg's point. - Yes, and that's exactly the point we're at now, of expanding our marketing efforts to get more people, that product in front of more people. We do not wanna fall into the trap of letting perfection be the enemy of actually making money, so we're working on getting people to just use that plugin for free, get them hooked, and then get paid. - How many people do you have working on the CV algorithms and that side of it? - We have three people working on that. - Okay, three people. You wanna use the 500K in your pre-seed round to do what? - We wanna hire two additional backend engineers to work on exactly that, as well as a sales and business lead to keep getting it in front of more customers across the enterprise. - Are you working with any of the processing manufacturers, like Nvidia or the new Google stuff? Who are you working with there? - We're working with Nvidia, we're in their Inception Program. We work with Google to get access to their cloud. We've gotten several hundred thousand dollars of credit that saved us from having to spend money on servers. Well, AWS and Azure, as well. We're also looking to work with some of the companies that have more data than we've been able to get our hands on now. - Have you written this at all to custom? If I understand it right, you have three major sellers. One is selling it because you have to get people to trust it. Two is your extraction algorithms because you've gotta get into the detail of it. That's just, like you said, that's research and development. Then three is your processing speed and time because that $200,000 in credit is very dear to you because that bill can be enormous, particularly as you test everything, because you're gonna be doing all your limits and all that kinda shit. It takes a lotta time to try to get it right, a lotta trial and error. How are you gonna deal with that problem, and can you write it to specific processors, like some of the new ones that are being developed? - Yeah, so, in fact, we don't have to write it for specific processors. - I know you don't have to, but you need to get it to the point where it's so fast that someone doesn't have to pay you a ton of money or it doesn't take you as long to test. - Right, but we're using things like TensorFlow where we let somebody else spend the R and D time on actually giving us GANs that we can use to look at a three-dimensional point cut and understand this is a tree versus this is-- - No, I understand using TensorFlow and then it's already on AWS and you're doing all that. But where I'm trying to get to is, in terms of potential investing, is if you can do it much faster. 'Cause Google's not gonna optimize to you. None of 'em are gonna optimize to you. If you get to optimize to you, for your GANs, whatever, or your neural networks, then you can have multiple processes running at the same time, one feeding the other, and you can get shit done a lot faster. Is that an opportunity? - It is an opportunity. - At what point in time do you get to that opportunity? - We're already going after that. When we generate these cities in about an hour, that's about, generally, four dozen processors on-- - What does it cost you? Assuming you didn't have AWS for free, 'cause you're gonna run outta your credits here any minute, what's it gonna cost you per minute? - About $15 an hour per computer. Just running the numbers, it takes us-- - So $60. - Yeah, it takes us a few hundred dollars to generate out an entire city. Then we amortize those costs. We then resell those models. - As you get more discrete detail, that's gonna take more processing-- - That's gonna scale up, absolutely. - Look, I like the idea. I don't really know the industry at all, but obviously if you're able to create unique CV algorithms that allow you to get to the level of detail to re-create from external data points and train your models very quickly so you can bring in new cities and new destinations, that's a unique opportunity. - We think so. - For your pre-seed, what's the valuation that you're working for? - We're raising that on $4 million cap. We have circled 400K of that so far, and we're raising the final hundred K. - 500K more or 500 total? - 500 total. We have 400 already, getting the last 100. - Now I'll negotiate with you 'cause I'm a shark. Yeah, reach out to me, you've got my email. - Excellent, will do, thank you. - Wow. (audience applauding and cheering) Thank you. - Thanks very much. - Thank you. That was pretty cool. So, Mark, thank you for coming. - My pleasure, thanks for having me. - People are gonna go to dinner. Maybe next year in 2020 you could come back. - Right, I'll call you from the White House, cool. (audience laughing) (audience laughing) - Thank you, that was so good. [Music]
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Channel: NYU Stern
Views: 94,534
Rating: 4.5817876 out of 5
Keywords: new york university, nyu stern, stern school
Id: qlxIyvvGmLM
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Length: 104min 7sec (6247 seconds)
Published: Fri Feb 08 2019
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