[SOUND] Thank you very much for taking the
time to come in and speak to us. Many of us, are aspiring entrepreneurs, so
we'd really quite like to be like you. And, many others, would also like to pitch
to you. >> [LAUGH] >> Actually sitting here makes me, gives
me a sense of how intimidating that must be, so, I won't, I won't wish it
for much longer. >> [LAUGH] >> And perhaps, perhaps we could, just
start by outlining the, the three main topics I'd love to
cover today. The first is your views on tech and
venture capital trends. The second is, how you assess
entrepreneurial DNA. And the third is your views on leadership
and your leadership experiences, that, that you've
had throughout your, your esteemed career. And so, if we could perhaps start with
the, that first, tech trends, and go with
something topical. You mentioned last month at the
Goldman-Sachs conference, that tech was not in a bubble. Rather, it was in a mature deployment
phase. And then the WhatsApp deal happened. And Mark is on the board of Facebook. So I just wanted to ask you, what do you think about that deal and how are you
thinking about evaluations? >> So I, unfortunately, I can't, ten
years, ten years from now I can come back and tell you all about the
WhatsApp deal, but right now I'm on the, I'm on the, I'm on
the Facebook board and I know that you all would not come
visit me in jail. So I will, I will keep that one to myself. so, there's a couple of big things. So, just in terms of thinking about what
we've been through in the last 20 years in Silicon Valley, some people in the room
are old enough, you may remember there was a
bubble. and, it was a fairly big deal, in sort of
1998 to 2000, and there was a very profound crash, which was deeply
traumatizing, for those of us who went through it. And then we went through this extremely long period of, basically, you know, years
of pain followed by then, sort of, what I
think of as, as very slow recovery. I think it's actually been an object lesson in the psychology of markets and
bubbles. I think that, people are much more highly
sensitized to bubbles after a bubble. If you could be sensitized to them before
a bubble, you could make a lot more money. But people get highly sensitized and so
there's this phenomena of, of trying to close the, the barn door after
the horses have escaped. And that, that is a lot of what all the bubble talk in the last, ten years has
been about. And so we, we could talk at length about
kinda why I think, in fact, tech is not now in a bubble and has not
been in a bubble since 2000. the, the deeper thing, the more
interesting is this follows a historical pattern, which is what I talked about at
the Goldman Conference, which is based on the, the best thinker on this
topic is an, is an economist named Carlotta Perez, who wrote a book called Technological
Revolutions. It's probably the single best book. Like, that book and The Innovator's
Dilemma are probably the two key books that are really critical to
understanding how this industry works. And so she describes in her book, she
describes a general model for the deployment of new
technologies. And then how technologies intersect with
financial markets. And so she's got this whole thing, and it's basically this
multi-generational process. And there's what, it's basically these two
big, sort of phases of it. There's what's called the installation
phase and there's what's called the deployment
phase. And it turns out in every single case and this includes railroads and, like, lots,
electricity and steam engines and lots of prior new fundamental
technologies, there's always this just gigantic bubble and then crash kind
of halfway through. And historically that marks the transition
from the installation phase to the deployment
state. The deployment stage, you could argue, is where the actual interesting thing, things
happen. It's where all the tech-, all the new
technologies actually start to work. They actually make it into everybody's
hands. They actually become cost effective and we
actually find out how to actually use all these
things. And so that's the phase I think we're in,
in now. You know, without talking about the
Whatsapp deal in particular, it is interesting to note that the
companies that people think are overvalued today, generally either
have billions of dollars of revenue, which was not the case, in, in, in, in the
90s. For example, Facebook, people argue
Facebook as an example. Facebook went from $0 to $10 billion of
revenue in less than ten years. And so that is definitely not what
happened in the 90s. The other thing is the companies that
people debate today, for the most part, have
extraordinarily high customer, count. user, user count. Market sizes have expanded gigantically
and so you've got these things now that people are
arguing about that have, in some cases, a half billion users, on their way to a billion
users. And if people want to take a position that
you can have a large scale internet service
that's worth a billion users that's not gonna be worth
anything, you, you could take that position, I'm not sure you
would recommend it. >> Yeah, no, that makes sense. When you, as you say, when you look at
the, the cost per user, it's actually only $36, which is much, much
less than in many others for the What'sApp
deal. But another thing you, you previously
mentioned was that, MBAs flocking into the tech sector is a sign of
the bubble. So to play devil's advocate. >> Yeah. >> Many of the people here are flocking to
the tech sector. >> Yeah. >> So, could that, perhaps, be a sign of a
bubble? >> So things are heating up. And so, [LAUGH] Historically, there's
actually been, and I suspect everybody in the room knows this, there has been a direct correlation between, PE multiples
and, MBAs. tilting, tilting, tilting into the,
tilting into the, the tech industry, for sure. So I think something different is actually
happening. I think something different is happening
with how companies are getting built. And maybe I can do the long version, kinda
the, the slightly long version of this, which I, I think there's actually a
whole new, a whole new way companies are being built in the last ten years and, and
I think that business people and MBAs turn out to be very central to it in a way
that's different than the past. So I kinda divide the story of how technology, the great technology
companies got built kind of in the three phases and I think
we're in the third phase now. The first phase was in the 40s, 50s, 60s,
70s. And it was so crazily hard. If you talk to people who were in business
then or you read the stories, it was so hard to build
a new tech company. It was such an unbelievably, sort of
exceptional thing to do that you, you, you only really have these really
extreme characters who, who would do it. And there were a pretty small number of
them. And they were extreme, extreme characters,
like they were, they make all the current, like, high octane
entrepreneurs look like wusses. And the ones I'm thinking of, Thomas
Watson Senior. If you want to read, like, what it's like
to work for somebody who's harsh, read the book on
Thomas Watson Senior. You know, he makes, he makes all of today's entrepreneurs look like cream
puffs. >> [LAUGH] >> He would just literally sit in his
staff meetings for like five hours and just
scream at his, scream at his guys, there's just this,
then he built this astonishing company, IBM, off the
other side of that. David Packard. David Packard, actually, was quite a
character. He, David Packard, people now remember for
the HP way and for kind of that whole warm and fuzzy, you know,
kind of approach to running companies. When, when David Packard was actually
running HP, he had two nicknames. One was Pappy, which is kind of what people remember in a kind of paternal
instinct, type. His other nickname was the Mean One. And he similarly would just, you know,
tear people apart. And then Ross Perot is my favorite
example. Ross Perot built the first great
outsourcing company, one of the big tech successes in the 60s. And of course, you know, he was fantastic
as a business builder when he came into contact with the
American public, people went, what? and, you know, again this sort of extreme
personality. So you get into this, this kind of, this sort of will to power thing that was
happening. and, by the way, the VCs in those days, I
think, were very similar. Tom Perkins, who's become re-famous again
lately, you know is, is the same kind of character. He's, he's an ex-, he's a very, very extreme character and, and, and he always
was. But that's what it took, you know, for him
to do what he did in the 70s, and 80s in venture
capital. So those were kinda the extreme days and
then I think both VC and entrepreneurship, tech entrepreneurship,
sort of professionalized, and so you had a lot of VCs then. And this includes great VCs, John Doerr,
Mike Morris, Jim Breyer, you know, who are business people or investors
first, and, and never ran companies. And then you have this kind of move
through the 90s where you had this kind of default model where the one thing
everybody knew was that founders couldn't possibly
run their companies. And so you would have a founder and then
you would basically promote or fire them to chairman or CTO and then you'd put in a
professional CEO as fast as possible. And I think what happened is that model
just got extreme. And i think by the late 90s in the Valley,
we were mostly building companies that were kind of shells, or,
you know, kind of like puff pastries of companies where, you know, they didn't
really have, at the height of the bubble in '98, '99, the products that were getting
built for the most part weren't very good. And these companies were kind of on this
bomb run to get public as fast as possible, and you had all these catch
phrases, like go big or go home. Or my other favorite one at the time which
was, forget details, just do deals. And so you have this really kinda mercenary, hit and run approach to
building companies. And then all those companies vaporized
after the crash cuz it turned out they didn't have
valuable products. They didn't have deep engineering
capability. And then all the engineers who worked for those companies hated working for
those companies. Cuz they were completely sales-driven,
sales-led, these kind of mercenary kind of exercises. At, at the, at the height of, of, of how
bad it got. Now I think you've got the exact opposite
thing. I think the pendulum has swung all the way
in the other direction, which is, now we all understand and take for granted,
founder CEO, technical founder CEO is a good
thing. You know, Mark Zuckerberg is kinda the
apotheosis of kinda the, the idea that we have now. And so now what's been lost for a lot of
the entrepreneurs. A lot of the entrepreneurs are engineers,
but not business people. Now what's been lost is a lot of the
actual art of building a business. and, in particular, what's been lost is
the art of sales and marketing. And a lot of today's founders, one of the big issues we deal with is they're very
technical. They're very product-centric. They're building great technology and they
just don't have a clue about sales and marketing, and what's more is they almost
have an aversion to learning about it. It's almost like a post traumatic stress
kind of thing, you know, like 15 years after the
crash. And so now the challenge for a lot of these companies is how to take what are
actually fantastic products and fantastic technology and then
integrate in top-end business thinking, top-end sales and marketing thinking, and top-end operational
thinking. So I think we have actually collectively
have a huge opportunity to put the pieces back
together. And I think that's what the next five
years are going to be about. >> Could you see the role of MBAs in terms of helping scale through that sales
and marketing function? >> Yeah, so, yes, definitely and, and, in
fact, in the abstract, there is kind of two models, that are both
actually working quite well. The kind of reference model now is the
Mark Zuckerberg, Sheryl Sandberg model. And I work with Sheryl at Facebook and I
tease her all the time. She's lost control over her own name. It's now become a proper noun. >> [LAUGH]. >> You know every 24-year-old technical
founder, you know, was like, I need a Sheryl. And I'm like, so do 400 other people. Unfortunately, human cloning is not quite
at the stage yet where we can fulfill everybody's
need. But basically the model of a very
high-powered business person with deep capabilities in sales, marketing, and
operations, who's able to partner as a number two, as a president or COO,
with a technical founder, CEO, when you have
somebody like a Mark Zuckerberg. So that's one model that works very well. And one of the interesting things about
the last five or ten years is more and more of the top end business leaders
in Silicon Valley have figured this out. And, like Sheryl, have chosen to partner
not as the CEO, but as the president or COO with a great technical founder and build great
companies. A recent example, Dennis Woodside, who's a top-end Google product or business
executive, just left and became number two at Dropbox to Drew
Houston, who's another one of these guys. And so that's one model and I think that's a very exciting model and I think it's
working well. The other model is what you might call sort of the Bill Campbell, Scott Cook
model. Or maybe the Dick Costolo, model as sort
of the other example, which is, in the case
where these companies don't have a founder who's
capable of being CEO or who wants to be CEO, to have a business person, become the CEO, but with the sort
of, with a much more advanced understanding of the
role of founders and the role of product strategy and
technology strategy than I think the professional CEOs got into in
the 90s. So, and, and this is the, I, I describe
this as the Bill Campbell-Scott Cook model because that's maybe the best
example in the history of the Valley. Which is, you know, Bill Campbell,
probably well known to the folks in the audience, you know, is not himself
a technologist or a product person, but is an outstanding operator of
businesses, has profoundly deep respect for founders, and has profoundly deep respect for products and, and for
technology. And always makes it a point in, in his
career, he's always made it a point to partner with the engineers
as opposed to be threatened by them or feel like, you know, they have
to be, you know, in the case of the technical founder, they
have to be forced out. And, of course, Apple, Apple over the
years has been a case study of this, and, of course, Bill came up for
Apple and so he saw this. And so you kind of contrast the now
legendary kind of John Scully-Steve Jobs model to to
the Bill Campbell-Scott Cook model and you
kind of see how, you know, kind of where that came
from. And so that's a model that can also work
very well. And so as, as the folks here think about
as you build your careers, and think about these things, I think if you're gonna be in the tech industry, the really key
question, you know, it might turn out either way, but the really key question is what's the
partnership that you're gonna have with the technical
visionary, in the company who will often be a technical
founder? And I think if you can crack that code, I
think there is just an enormous opportunity to, you know,
to have one plus one equals three. >> So at, at Andreessen Horowitz, the, the
VC fund you founded, you invest in many of these
founder COs. They all want a share-all? >> Yep. >> And finding a share-all isn't, isn't
necessarily that easy. And you've built up a, a very disruptive
model within the venture capital industry where you provide a lot of value-added services including hiring and marketing,
to portfolio companies. Could you talk a little about, how you
came up with that disruptive model and what opportunities you see going forward to continue shaping the VC
industry? >> Yes, so my partner and I came up as
entrepreneurs kind of in the phase where the assumption
was that you fire or demote the technical founder and
you bring in the professional CEO and you become a sales,
sort of a sales-driven company. And so, and we, we kind of, we have a lot
of experience with that model. Like I said, sometimes it works sometimes
it doesn't. But we thought, this is, we started our
firm, we planned our firm in 2007-2008 and started it in '09 and our
basic take was there was an opportunity. Many of the other venture capital firms
had tilted hard in the direction of sort of professional sales-driven CEO, we
decided to tilt hard in the direction of technical founder
CEO. And so, we basically said, how would you
build a venture capital firm optimized for a technical founder who
wants to become a CEO? That let us, and by the way, not
religious, that's not the only thing we do, but like, how would you center the
culture of the firm around that idea? And I'll, I'll come back to the other
part. So we kinda decided on two things that
would come out of that. Which is, one is, if you have somebody
running a company who has not run a company before or has not,
maybe, necessarily been a manager in some cases before, or, in
some cases, maybe has not held a job before, they become CEO of
their own company. It really shines a very bright light on
the, the background, and caliber of the general partner that you're going
to propose to put on their board. And we just made the decision that, and
there are many different kinds of successful
VCs, but we just made the decision at our firm, the
general partners will be people who have built
technology startups before. And so I think at this point, seven of our
eight GPs, I think I'm the only one who hasn't
actually been the CEO. I think seven of the eight of our GPs have
been a, a CEO and I think five or six of the eight
now have been founders. And so, sort of by definition at our firm,
you get somebody on the board who really knows,
has been through the war. Really understands, you know, what things
are like. And so, when something goes wrong, and,
you know, things are just, like, horribly,
like, crashing. You know, the key engineer quits, or the
founders can't get along. Or the biggest customer dumps you. Or a competitor comes out with a much
better product. And all these really horrible things that
happen. You can't raise money, that we have
somebody in the board seat who is a really good advisor and can say, I was
in that situation before, and I can tell you what doesn't work, cuz I
probably made all those mistakes and then I can tell you, you know, gives you
some advice on what does work. So that's one, and then the other thing we
said was we said, okay, well what's, what's the, you know, we sort of
thought about what are the reasons why? You know, if, if a VC brings in a
professional CEO and fires the founder, why do they do
it? Part of it is likely experience. The other thing a professional CEO brings
in, is very, very deep network. If you've been a, you know, VP or general
manager, or CEO in Silica Valley for 20 years, you
have this enormous network of executives who you can
hire and engineers, and recruiters and you know all the reporters
and all the editors. And you know all of the customers. You know CIO's, and CTO's and you know how
to go sell the things and you know all the VC's you know
how to raise money. So you just have the business people in the valley, who have been in the valley,
have this just giant network of people and
these technical founders often don't because they've often
been heads down. You know, writing code most of their, most
of their lives. And so basically, what we decided was,
let's preconstruct the network that will basically, where we can take a
technical founder, inject it straight in the network, and sort of
give them super powers of a network that's comparable to
what, John Chambers might have. And so, and, and that's been a very big
effort on our part. We have about 60 full-time professionals
now, across five operating teams in the firm. That are not GPs, but are full time professionals organized around the
different areas of the network. So, sales, business development, corporate
development, marketing and PR, executive talent,
engineering talent. And so, as an example when it comes time
to find a sharer as a consequence, we, waiting
for, we are trying to build very deep relationships with all the
sharer of both genders, throughout the valley just a sort of a normal part of
sort of art network building exercise, and then
when we have companies that are kind of maturing to the point when they
need somebody like that, you know, as one example, we will know who
those people are and we'll have kind of you know, very easy
access to them. You kind of help them to sort of bridge
the gap. >> No that's, that's very understand,
helpful understanding how you lean in once you've identified the
founders. >> That was good, that was good. >> Stop it. >> That was good. >> The how do you actually identify them
initially? And so what do you think are the, the
traits that founders have and I'd also love to hear about some of the best
and worst pitches you ever heard. >> So the, the basic math is the, so
there's a basic math component and then there's
the, all the intangible. So the basic math component is there's
about 4,000 start-ups a year that are founded in the technology industry
that would like to raise venture capital. We can invest in about 20. So the falloff is significant. we, I like to say our day job is crushing
entrepreneurs' hopes and dreams. We actually have focused very, very hard
on being very good at saying no cuz that's mostly what
we do. We see actually, we see 3,000 inbound
referred opportunities a year. We narrow that down to a couple hundred
that are taken particularly seriously. And I would say there's kind of this very interesting kind of process where there's
you know, say the hard thing is deciding which one's we're
going to invest in, because we can just invest in
so few. The somewhat easier thing actually it
turns out, this has been a surprise, it's actually after you have
been in it for a while, the thing that's actually fairly
easy to tell is, will this team and company be fundable by
a top VC. Will it get funded by a top VC. It may be, it may be Sequoia, or Excel, or
Greylock, or who, who knows who it is, but you know, does this
company kind of clear the bar? And I think the way the math works,
basically, is, you know, there's about 200 a year that are
fundable by top VCs. That, that, that get funded. By the way, within the 200, about 15 of
those will generate, you know, 95% plus of all
the economic return. So just cuz it gets funded by a top VC
doesn't mean, it, even the top VCs right tank, you know,
generally, about half their deals. So even if you get funded by a top VC,
it's not complete validation. So about 200 a year that are kinda
fundable by top VCs. We can fund 20 and then 15 of them
actually generate all the returns. And so, it's kind of a white knuckle thing
when it gets right down to it, to try to make, you
know, the picks. And if there's one thing that's
frustrating in this job, that every VC deals with it's, you know, you miss most
of the big winners, right? It's like, the thing all the top ventures
have in common is they did not invest in most of the great successful technology companies, which is an
incredibly frustrating thing. So, that's the basic dynamic, and that's
the framework within which, you know, people come in and pitch
to us. At the heart of it, there's two things
which we look really, really hard for. I mean, there's the kind of surface level
stuff you look for. So if you look for a huge market, you look
for, you know, differentiating technology. And you look for you know, incredible
people. I think in practice, I think that we collectively and certainly, we
specifically and then we collectively, VCs, I think we
probably, we, we spend a lot of time talking about markets and
technology and we have lots of opinions and I'm not sure that those opinions are actually all that relevant, all that
often. I think probably, the decision ultimately,
is and should be around people. As like 90% of the decision. The two things we really zero in on on
people are, you know, two things. They sound simple and they end up being
very difficult: courage and genius. Courage is the one we talk about a lot because it's the one that people can
learn. You know, courage which is to say not
giving up in the face of adversity. You know, just being absolutely determined
to succeed, you know, is something that, you can, you can like,
force yourself to do. It can be very painful, you can force
yourself to do it. The genius part is a little bit hard to
force yourself to do. You know, courage without genius might not
get you where you need to go but genius without courage
almost certainly won't. And so, we're looking for some kind of
magic combination of genius and courage. You know, there's there's one of my
partners quotes, he quotes Nichie a lot on these,
he says it's, it's will to power, it's, it's you know, it's people who simply will not
stop. and, and by the way, right, there's always
been this kind of thing at Silicon Valley of like, sort of this, like
I call it the failure fetish, right? Failure is good, right? Failure, you guys have probably all been
taught this. Heard about this from a lot of people like
failure is a wonderful thing, failure teaches you all this stuff,
and it's great to fail a lot. Like, and we don't like buy any of that. We think that's all complete, complete
nonsense. We think failure sucks. [LAUGH] We think failure is a terribly,
terribly depressing thing to go through. We think success, on the other hand, is
wonderful. You know, you wouldn't think that this is something you have to actually say out
loud. But we, we do find it to be clarifying
when we point it out. And so we are strongly biased towards
people who are so determined to succeed that they just, they never give up, they never quit,
and I think that's a huge part of it. And that's something we really look deep,
we look incredibly deeply for, you know that's the kind of thing that's not
listed on a resume right. That's something that has to be deep in
somebody's, fundamentally deep in somebody's character and you have to
see it in their backgrounds. >> And what has been your, talking of
courage, what has been your most courageous moment, and perhaps
the moment of which you're most proud? >> Oh, the moment, actually this is
actually a good day to ask that question because my partner Ben's
book actually came out today. So if you haven't bought it yet, number
one on Kindle in management, $14.44. $14.44. [LAUGH] Makes a, makes a great birthday
present for all of your friends. [LAUGH] He actually tells the story in his
book, it's actually in his book, and it's it's
when our, it's actually it's it's when our, it's
it's, our second company, Loud Cloud, when, when got
just taken apart. We started our second company Loud Cloud
in September 1999. And it was classic, you know, we were, I
mean it was fantastic. It was incredibly high rapid growth rate
off of a standing start. Straight into the, you know, the the last
six months of the bubble. You know, unprecedented growth. Cover of Wired magazine. On and on and on. We took it public in 18 months, and then just the world caved in, our entire
business caved in. burning, you know, an enormous amount of
cash, cuz we were, we had, created a company for much,
much higher growth. And and our stock, ultimately bottomed out
at half of cash. So our shareholders, made the judgement,
that not only were we so incompetent, that we were not capable of justifying the
amount of cash we had in the bank, but that we were certain to burn
at least half of it before we would call it quits and just
give them the cash back. Those were probably the dark days. And then, you know, NASDAQ, you know,
start sending the D-listing letters and they send about one a day saying if
you don't get your, your, your stock back above a dollar,
we're gonna D-list you and you'll be on the pink sheets and we came
within days from that. And so guiding through that, and by the
way, guiding through that kind of thing at the same
time it looks like the entire world is ending,
that it looks like you know the tech industry will never
ever recover. I think we, the thing we are most proud of is, is, is actually working our way
through that. >> Fair enough that is a tough thing to
get in. The You spoke about Ben's, Ben's book and,
and Ben talks a lot about these, these challenges, the
whole notion in the book is dealing with the hard things and have
there been hard moments in your relationship and can you talk a
little bit about that relationship? I remember once reading that, he described
you as the Beyoncé of the relationship and him as Kelly Rowland, so
how do you feel about being Beyoncé? >> Yes, yes. I'm hoping, I'm hoping that wasn't a
commentary of my figure, that's my, that's my main,
that's my. [CROSSTALK]. >> Or your dances. >> Or my dance moves. So, I would, let me, maybe brought it up, so it goes to the nature of business
partnership. So Ben and I have been partners for 18
years, so I first met Ben in 1995. He actually tells the story, in the book,
of how we met, which is a whole story in and of
itself. It involves a lot of curse words. You know, we kind of describe ours, I mean
we, we, we love each other and we, we, we do everything
together, everything in business together. We you know we describe ourselves a little
bit as the old married couple. Yeah, you know that, you see like out on
the park bench in the park in the middle of the afternoon, sitting on
opposite ends of the bench kinda staring at each
other. They're always there, but they're not
talking, you know, and maybe they argue every now and
then. But they're there this year and they'll be
there in five years, they'll be there in ten
years. So you, you know I would say at this
point, at this point it's troubly hard to untangle how the partnership works
other than just we've been working together for so
long. And so we have the we have a deep level of
trust that comes from understanding each other very
deeply, and so I know exactly what he's good at and I know what to defer to him on
and I know, he knows exactly what I'm good at and what
to defer to me on. And then both of us trust the other, you
know. So we, we both know that we'll make
decisions in both of our best interests, and there's never anything
that's you know, advantages one of us over the other, and so, as a consequence, each of us are
very comfortable, you know, essentially caving to the other on any topic, which I
think is, is actually very helpful. That said we argue about everything and we
constantly argue. and, you know, we often come at things
from very different points of view and, you know, in you know, I don't
even know how to describe. We, we just have different backgrounds
from before we have kind of different reference points for how
we think about things. He is a far better operator than I am, so
he's much better at running a business. So for example, a lot of things, when we,
when we used to run companies together. A big thing we'd argue about is, you know,
I would, I, I, sort of I think what he would say
about me is that I'm sort of abstract, so I
think about things like products and strategy and
business in an abstract way. And so for me it's like, okay, what's the
right answer? Like, what, what's the, you know, what
should we do? And then the way he thinks about it is,
from an organizational standpoint, from a management standpoint, is, what I,
what are we capable of doing? And so I will often propose things that,
where he's like, you're out of your mind. Like, the entire, you know, yes, in theory
that might be a good idea, in practice, you'll destroy the
entire company if we try that. And I'm like well, that's a pretty good
point. And then, you know the argument in the
other way is you know, look, I know that the organization is
gonna get challenged by this and I know it's gonna be hard and we might lose
people, but it's so important that we have to do this thing, that we
have to really push it. And so I think a lot of the theories that
he and I have developed over the years about how to run
companies are kind of at that intersection point of what's kind of
intellectually the correct thing to do or the optimal thing to do and then the actual
practical reality, of what can be done. He talks a lot about one of his theories
that we use a lot at the firm is uses his book is kind of all about this is we, we call it, there are no silver bullets, there are
only lead bullets. There's this, there's this temptation
especially when you get into crisis. When you get into real, real, real
problem, there's this temptation to think there must be a
magic answer. Like, there must be some stroke of genius,
you know. It's almost, it's like what you, I don't
know. if people watch the new Sherlock Holmes,
you know, TV series, which I just love. It's like, you know, Sherlock is gonna
have, you know, no matter how dire it gets and no matter how like evil Moriarty is,
Sherlock's gonna have that stroke of genius that's gonna save
the day. And there's this really strong tendency to
kind of think, that that, that that's out
there. And we see a lot of entrepreneurs that
kind of cycle through different silver bullets, and then they don't work and they
don't work and they don't work. Ben's point is always, it's probably the
answer, it's probably firing a whole bunch of lead
bullets. And so the answer probably is, you know, the engineers working, you know, later at
night for, you know, six months and, you know, getting the next version of the product
out. And the answer is probably for, you know,
the sales reps to go call in twice as many
customers and try to close some more deals and the
answer is probably to, you know, your stock price
is low. You know, go find the investors who are
willing to invest when you're trading at half the cash cuz it turns out
they actually do exist. And then your stock goes up a little bit. People start to regain confidence. And so, I would say, I've, you know, I've certainly come around to that point of
view a lot. And so whenever we work with entrepreneurs
we often have very similar advice cuz it's kind of,
it'll be tempered through the very practical
realities of what you have to do to get through a situation like
that. >> At yeah, that, that seems a, a very
healthy argument. Perhaps I can bring you on to a, an argument that, that's probably much harder
to deal with. I mean, in general you enjoy an incredibly
strong public image. And, last week, Carl Icahn, rather than
using either silver or lead bullet, used the kind of badly
trained Gatling gun. [LAUGH] And when, he a, he brought up, as
an investor of eBay and that eBay should divest PayPal
and allege the you had a conflict of interest and could you speak
a little bit about how it feels dealing with those sorts of
allegations in the press. >> I think that the and by the way it's
not just, it's you know, Carl has become very active in a
bunch of Tech companies lately. It's actually not just Carl, there's a
firm called Elliot Associates, it's a top hedge fund that's become very active
buying beaten down tech companies. There's a bunch of others. Actually this, this is part of my theory
of we're not in the bubble, which is when activists
become interested in a sector it's because the PEs are low,
because the cash balance is high and the debt
levels are low. And so, it, it, you know, although I'm
not, not, I'm not getting that much of a thrill out of the, my
current level of personal engagement. This stuff is, I view this, all this activist, and, activity as validation of,
of my thesis, which is, we're not only not in a
bubble, we're actually still in a bust. Especially the big tech companies are
still in a bust. Multiples are very low, cash balances are
very high. It's the kind of thing where I think time
will cure that. Because in time, PEs will expand. In time companies will invest more of
their cash in their own business or find other things to do with it and the activist will go back to harassing steel
mills. >> Yep. Fair enough. >> And oil companies and airlines. >> Yeah, it was, it was interesting to see
that in, as you, as you blogged in 2011, he was advocating exactly the, the sorts
of board management that he's now seems to be
criticizing it. >> Yeah, Carl Ichan in 2011 was extremely
enthusiastic about board nominees with conflicts of interest
that came from his organization. And so I, I posted from this morning extensive exerts from his communications
from that time. And so, as far as I'm concerned he can now
argue with himself. [LAUGH]. >> And it's very helpful for us as, as students to understand how you actually
spend your day. And, and I'm sure it's a, an incredibly
busy one. So, thank you for taking the, the time out today. But could you perhaps describe what
yesterday looked like? [LAUGH]
>> Oh, yesterday? Good lord, what did yesterday? What day was yesterday? >> Monday. >> Monday. Okay, good. So Monday is butts in seats day for us. So Monday is all day partner meeting. And all the VC firms kinda have this in
common. And so, like one of the really critic,
when you're starting a company, there's all these really critical issues, like what product you're gonna
build. [UNKNOWN] are going to go into. And he start a VC from what's really
important and what your conference table gonna look like, and how
comfortable your chair is gonna be. Because you are gonna be in those chairs
for along time. So it's basically, it's, you know,
sometimes, yesterday was like eight hours, it can be as long as 12 hours straight, of
just straight meetings. And so, it's basically two things happened
on a Monday. Well three things happened on Monday. So we have a, breakfast every Monday. Then we alternate breakfasts. We have a general partner breakfast, and
then we have a general partner plus senior
operating staff breakfast and we alternate back and
forth, and we kinda do all the firm related
things. And then we have back to back, what we
call the all GP pitch meetings. And so these are the companies that we are
most likely to invest in. And so the signal if you're raising
pension money, if you get invited on Monday, that's a
good sign. If you don't get invited on Monday it's
not a good sign. And so, and we have, and I think yesterday
we had three of those back to back. Sometimes we have four or even five. also, by the way, pitch early in the day
not late in the day. Just helpful advice. so, we do those, and then and then we
have, at the end of the day we have what we call
[UNKNOWN] review. so, we actually do that twice a week. Most firms do that once a week, but we
wanna move a little faster, so we do it twice a
week. Mondays and Thursdays, and so that's
basically a complete, you know, sort of, you know, basically a complete pipeline report, maybe possibly
interesting. So, so we actually run our deal process like a sale, like a, we actually use
salesfirst.com and we actually run our entire process and
the firm like a sales first runs a sales
pipeline. And so we have comprehensive tracking of
kind of the stage of every. All the way from all initial inbound
deals, all the way through the ones that are being
closed. And so we kind of review that entire
pipeline, and we actually have a team that you know, a team
that manages that. And a great, a great operating person who
who manages all that. And so we, we go through all that. And that's where we have. That's basically a long argument and we go through it and we argue about every
company. And we argue about everything else we can
think to argue. And then we go home and collapse. >> In those in those deals for the
meetings, are there any technologies? I know, for example, you've blogged
recently about Bit Coin and how excited you are about Bit Coin and the
future of the news industry. Are there any particular technologies or industries that you're, you're most,
excited about? >> So there's a two part, two part answer
to that. And so, the first answer I will answer the
question in the second part, but the, the, the first answer is, we, this is another kind of theory we have at the
firm. So, there are venture capital firms that
are very top down and thinking about markets
and technologies. So, if you go inside a particular sequoia
and Excel, and Bessemer, and I think Kleiner Perkins used
to, and may still. The way that they, they, they actually
are, those firms are actually very explicit
about how they think about Protestant markets, and
so they actually will have I think in each case,
they'll run an annual planning process, where they
will actually get together, you know, at the
beginning of each year, and they'll literally draw a
map of what they think markets are gonna look
like. And, so, you know, and, and it, it's
basically a value chain map. And, so, it's an interesting exercise to
think about. It's like, okay, like for example, for
networking, is that, like, fiber optics and communication chips, the
family of such things like routers, but, then we get into things like, you
know, ISP's and then ultimately lead into things like, you know, and other wireless businesses,
whatever. Kind of draw that entire thing out, as a
map. And then you basically have boxes for each
of the product, product categories. And then, you know, a VC firm can invest
in one company per category. And then basically the goal for the year
is to put a name in each box. And so they sort of consider it a success
at the end of the year if they've invested in the best possible
company they can in each box that they've
identified. That's kind of one extreme, we decided to
be more on the other extreme, which I think is a
little bit more what I would call the benchmark approach or, in
the old, in the prior generation, it would have been
called maybe the Arthur Rock approach. Which is basically, and, and by the way,
we have all the same theories, like we can't
help ourselves. We just sit around and talk about this
stuff all day. But, we need to climb more towards the other side, which is basically, the big
breakthrough ideas. The, the entire art of venture capital in
our view, is the big breakthrough ideas. The nature of the big breakthrough ideas
is that they're not that predictable and in
fact often upon first contact they seem nuts and it
actually turns out to be the case, now all the crazy ones also seem nuts so it's a
little bit of a you know they called Einstein crazy but they also called
Charles Manson crazy you have to be cautious on this
stuff. But, the really, really breakthrough ideas
often seem nuts the first time, the first time you see them and, and it's the fact
that they seem nuts, can be a very positive signal because number one,
it, that, that can explain why that thing already isn't being done by an existing big company, cuz it's just considered too
strange. And then number two, you know, if, if it
works, like if, if the bit flips at some point and it goes from being nuts
to being like, oh, that's a good idea. Like, then, you know, those are the
companies that could just explode. Could become just gigantically huge. And most of the, big ideas, the PC seemed
nuts at one point, the internet seemed nuts,
BitCoin today seems nuts. And, Airbnb seemed nuts Uber seemed nuts
in the beginning. And so you kinda wanna in, in our view we
have this sort of approach, you wanna kinda tilt
into the really radical ideas. But by their nature, you can't predict
what they're gonna be. And so what you basically wanna do is have
as prepared a mind as you possibly can. And learned as much as you can about as
many things as you can. And then basically enter as close to a zen like blank slate kind of state at the
beginning, you know kind of zen, you know set ideal of kinda perfect humility, which is hard
for venture capitalist. You know, sort of perfect humility at the beginning of the meaning basically saying
teach me. And then they either, you know, they
either do or they don't. But then, you know, the, the hope is, you
know, if Larry and Sergey walked in, and they're like, I know this is the 35th
search engine but this will be the one that works you know, you're open-minded
enough to say, you know, yeah, that might work, as opposed to, you idiots, don't you know
that that's been tried and failed so many times
before. And so we're way more on the side of we've
gotten sort of opportunistic trying really hard not to let ourselves be educated by the really smart
entrepreneurs. You asked about the best and worst pitch
meetings. The worst pitch meetings by far, are the
rip. And, I mean, we try really hard to not
have these get to us but. You know, snap trap for dogs. Like, it, it, you know, it's the I, I. [UNKNOWN] This is not a startup thing. I was giving an example. You see it in Hollywood, right? It's like one volcano movie works and then
there's like 400 volcano movies. It's like how many freaking volcanoes? It's like 35 of the top hundred games of
the iOS app store and now are like Flappy Bird
clones, like, and so and, and, and Paul Graham in, in, in
the adventure community Paul Graham calls this the
Hollywood approach to, to startups. Which is, it literally is, you know, it,
you know, is Airbnb for parrots. It's just, it's these infinite variations
of all the successful ones that you get. And by the way, the ones that sound silly
also just ones vertical search engines. When Google worked, so search engines went very deeply out of style when Google
worked. And then there were vertical search
engines in every single category, and, except for travel,
they all failed, right? Cuz it turns out there was just gonna be a
search engine. There wasn't gonna be a search engine for
health, there was just going to be a search
engine. and, so, it's all the variations and
clones and kind of, the mercenary kind of, kinda hit and run, you
know, kind of stuff. So, we, we try really hard not to sit in
those, because those are very painful. The ones that are the most exciting are
the ones where it's a, it's a really, really bright founder who's done a
tremendous amount of work and completely understands
the domain. And walks in with a really crazy idea and
then in the course of an hour, can basically
walk you through. Where we have this sort of concept we use
called the idea maze, which is the really bright founders with these really radical
ideas tend to go through what they call the idea
maze. So they tend to have worked for years. Working their way through the idea to try
to figure out how to get from kind of the initial crazy starting point to at the
end, something that will actually work in the
real world. And the really great entrepreneurs can
walk you through the idea maze and make you understand the flow
of thinking that got, got them to the point where they
actually came out the other end with what is a
great idea. And what's interesting about that is those
are generally not, there's this kind of you know, theory in venture capital that you want back coachable
entrepreneurs. The entrepreneurs who really have the
radical ideas are generally not in a way coachable, they generally react
with hostility to being coached. And so one of the things we test for, is
you know, basically say, have you thought
about doing it this other way? And what we're not looking for is the, oh,
that's a great idea. What we are looking for is the stare
that's just like, you idiot. Right? You moron. You've been sitting here listening, you
know, this is them to me, you've been sitting here
listening to me for 20 minutes and I've been working on this for five years, and you think you
understand this so well that you can make me a suggestion and not only are you an idiot for thinking
you can do that, but I will now explain to you
in detail why you're that big of an idiot. We love those. [LAUGH] Boy those are fantastic, those are
outstanding. and, so, and it goes right back to the combination of genius and courage I was
talking about. And so in particular I mean part it's of
us in the word, but part of us it's just the look on
the face. We love that look, it's like caviar. >> So I want to turn it over to Q and A,
so perhaps you can just finish with one question, which
is you had built two very, very successful
companies. And then in 2009 you decided to not run a
technology business, and instead found, what's become the fastest growing venture capital
business. People were probably telling you, you're
nuts, like you just said. >> Oh, yeah. >> Yeah. Well we went, we went, we went around to
see, we went around to see, cuz we'd worked with, we were working with
all, all the, all, most of the big, most of the big VCs, so we went around to see
all of our friends in venture capital, and tell them what we were
thinking, and they all told us we were nuts. Actually with two exceptions actually, two
of them are incredibly helpful, Jim Breyer and Neil [INAUDIBLE] were both
just tremendously, tremendously helpful. And we are very grateful to them for all
their help, but the rest of them pretty much told us
we were nuts. >> So what, what drove you? And, and perhaps you could answer in this
context when we apply to the GSP we all get asked to write an essay on the following question, what matters most to
you and why? So what today matters most to you and why? >> So we're really deep believers in the
power of technology. Like we, we, we, we think that the
technology industry has made the world a radically better place in
the last 70 years. And we think it will make the world a
radically better place yet in the next 30 years, and we think
it's just starting. You know, the fact that we've just now after seven years in the computer industry
gotten to the smart phone, which is the first computer that can get to everybody on the
planet. That everybody on the planet is gonna have
one of those. You know, that is a you, you know, we're just reaching the point now where we're
able to apply technology to a, a lot of really
fundamental problems in the world, a lot of fundamental
problems and opportunities. And so it, it, we, we just all feel or I,
I feel like we have spent, we, I spent my
career and then even previous generations of entrepreneurs the
value they have spent their career getting to the point where we can now do the things
that we can do. And so it's an amazing, it's an amazing,
amazing time in terms of what we can do. In terms of starting a venture capital
firm there is an aspect to starting there are some serial entrepreneurs who
like starting seven or eight companies in a
row. Dave Duffield is probably the best example
of this. I think [UNKNOWN] is company number 8 for
Dave which is amazing. I've done it three times, Ben did it
twice. Well, it depends how you count but twice,
two and a half times. it, for some of us at a certain point it
starts to be like, you know, it's like you climb
all the way up the hill and then you end up back at
the bottom of the hill and you have to start
the climb again. And so at some point you start to think,
maybe there's a way to contribute. That has to do with helping people climb
the hill, as opposed to being the person out
in front. And so I think we've reached that point. And we're very, you know, we're very happy
doing that. >> Thank you, thank you so much. Now we can have some smart questions. >> We're actually hosting the Future of
Media Conference here tomorrow. So I was interested to ask you about the
news business. Of course you've been tweeting and writing
and thinking a lot about that lately. And I guess if I could sum up your views,
your optimistic about the prospects for journalism to
thrive using a variety of business models. So I'm a former journalist and a lot of
the issues that you are thinking about now
have been being discussed within the industry for maybe eight or ten
years, a lot of you know, soul searching and, and
reflection and experimentation. So what I'm curious about is why did you
get interested in it now? Like what prompted you to get excited
about that space and to start thinking and talking
about it? >> Also, less from an investment
standpoint, cuz we don't really, content's not content,
generally, so we don't really, we're not gonna be making a lot of investments in, in media
production. Just cuz it's a, it's a different field. We, we can talk more about that. My interest in news, in media, is sort of
twofold. One is, as a, is a gigantic consumer of it, and somebody who thinks it's very
important, and then two, because everything I've worked on my
whole life gets constantly blamed, for the decline
and fall of journalism. so, the Internet. Everybody knows, right, the internet has
completely destroyed the news business. The internet has destroyed journalism. The democracy is in peril, and it's all my
fault. so, at a certain point, I, you know, I
start to, I get, get, the, the, and, and, on behalf of all
the people I, I worked with, to, to, to build, to build things
like the web, it's like okay, maybe it's, maybe, maybe it's not the new
technology's fault at a certain point. So my observation is, and that I think
it's a very interesting topic, so I think the news, and I focused
on the news business, cuz that's kinda the, the, the
pointy end of the spear, in terms of, you know, the thing that
people are most worried about. I look at it as, as, I, I look at it, I do what very few people have been
willing to do, I think, which is look at it purely as a
business and basically say, and, and, so here's my
basic position is. Our view of what the news business is, and
about journalism is, is an artifact of a specific period of time, from 1945
basically into, basically 1945 to 2005, and basically
post-war post-war US. If you go back to the news business, before World War II, if you start in
Colonial days, and if you extend all the way to the 1930's, the news business worked
very differently. It was a very successful business and it
was, a lot of people were in it, a lot of people made a
lot of money. But like, as an example this whole idea of
objectivity, the journalist now take as kind of this, kind of, you know, kind of,
purer concept that has to be maintained. Like there was really no such thing. Like I always say like in in, sorry to
say, like objectivity's an artifact of an era in which news
businesses were monopolies or oligopolies. In the days when news businesses were fully competitive, subjectivity was out it
went. And they always say, you know, you're a
scumbag, how can you say that, and I'm like well Ben Franklin was a subjective
journalist and so stop calling Ben Franklin a
scumbag. You know, he actually knew what he was
doing. He was actually a very successful
journalist, a very successful publisher. There's a great book on the news business
in the Colonial era in the US called Infamous
Scribblers, which was what, it was a pejorative at the time for reporters, which could come back
into fashion. and, it's a great articulation of how the
news business actually grew up in the US. And then in the 20s and 30s, it got really interesting with figures like
Hurst and Pulitzer. And so, you can kinda, you can actually
study, kinda, the historical news business, kinda
through, I think through those two time periods and then you kinda
look at post World War II, and you say, well what
happened. Well monopolies and oligopolies got
established and so for and it, it was sort of this era of centralization in a
lot of parts of the economy. But it was very clear in the news
business, you had, you know, you'd have one major newspaper per metro
area, because of the cost of distribution. You'd have, you know, three TV networks,
nationally, because of the limited bandwidth for VHF
TV. You'd have, you know, a handful of local
radio stations. You'd have a handful you only had a
handful of magazines. You could only really have three general
news magazines on newsstands cuz you just couldn't afford to
distribute more than that. You scale, scale economics kinda ruled the
day. And so, so the news business went into
this mode where they kinda said, okay, we're a
monopoly. We're a monopoly or an oligopoly. And if you're a monopoly or an oligopoly, it's incredibly important to stay out of
antitrust trouble. And the best way to stay out of antitrust trouble is to not, to not make anybody
angry. And the best way not to make anybody
angry, is not have any opinions. And so therefore let's be objective about
everything. And then we can we can just basically say, First Amendment objectivity, don't
break us up. And that worked really well, as long as the distribution was controlled, which
it was. The distribution was locked down. And then the internet showed up. And then the internet introduced basically
took the legs out from under all the distribution monopolies and then all of a sudden there are you know millions of
voices. So my point as a business person is okay
that, that's the past, right, that's, that's, that's
the old days that's over. We need to look back to what happened when these things weren't
monopolies and oligopolies. We need to look back to the thirties and
twenties. And back to the colonial era, and we need
to basically think about how to build news businesses, media businesses, that thrive in a competitive
market. And that has to do with being, you know,
incredibly aggressive. That has to do with in many cases having a
very strong point of view. It has to with, not with the idea that
you're gonna be the only point of view, but you'll be one of many and you
have to argue things out. You have to have the right cost structure you have to think about market
segmentation and you have to, you have to do all the things that people do when they actually
build businesses. The issue in the news business is that a
lot of the executives in the business did not grow up in a competitive market and
and so they just don't know how to do that. So, now what's happening is, the new
entrepreneurs like Jonah Peretti at Buzzfeed, or Sarah Lacy at Pando, or,
you know, the people, the folks who built, you know, you
see a lot of this in the tech industry, TechCrunch
and all these things. You know, a, a lot of these new things,
they're, or, you know, what Pierre Omidyar is doing
with First Look is, you're getting, now, very smart people who
are coming in from outside with very fresh points of view,
building very exciting things. And all the traditional journalists are
like, oh yeah that doesn't count, but healthy
business, healthy journalism you have to get the healthy business before you get the
healthy journalism. And so, so then you look at market size
and you basically say, well how big is the market
for all this stuff? And it turns out the market for news is gigantic and it's growing very fast
because so many people are becoming part of the modern world and
so many people are getting access to information
for the first time. And so the global market for news is going
to be five billion people within ten years and
everybody needs to know what's going on. And so the market's gonna be large. And so I think there's huge opportunities
for market growth, but it's gonna be from companies that are, that are able
and that are willing to compete. >> I'm looking for an internship in High
Tech, and there is a great quote that software is
eating the world. And what I think is going to be next, and
if you were an MBA, which university would you go to
work to for the summer? Oh, that's a good question. So I think that, I mean, so the big one,
the big one, the big one's clearly. The big one's clearly on deck are healthcare, education, and financial
services I think are the next three, kind of, giant sectors where software can have a
revolutionary impact. We're actually putting, we actually
started out saying we're not going to do any healthcare, was
one of our things we, we had a bunch of no fly
zones when we started our firm. No rocket ships no no flying cars no space
elevators no, no drugs either in the drug development
sense or any other sense. And then and then and then we said, no
biotech no healthcare because it's, you know, it's
a different category, and if you're gonna make you know, pharmac-,
you know, industrial biotech companies or medical device companies, FDA
approval, it's a different thing. We've actually got much more involved
lately in the cross-section of health care and
IT. And there's all kinds of interesting
things happening. At the intersection of healthcare and, and
IT and software. And, actually, there's things happening,
actually, on the medical side, and a lot of that, it's very interesting,
things now happening around genomics. And big data applied to genomics. And then there's another whole set of things happening around healthcare
information. and, you know, making, like, health marketplaces work better and, you know,
direct access for consumers to doctors online and
all these incredible kind of new services. So, I think healthcare is gonna be really
interesting and we're, we're diving in much more
aggressively there. education, you know, is a big one. That I talked about a lot in public. But I think education is right for, for
transformation. Actually, Clay Christianson has been doing
really amazing work on that th, it's worth
reading. He's very passionate about that. And then financial services I mean we
think it's go time for financial services. We needed a breakthrough software
technology to be able to go after financial services. Financial services right. The big problem for startups and financial
services is, it's regulated to death. And so and it's gotten worse, right,
through, like we, we call Dodd Frank the big bank protection
act of 2012 like it's, it's the largest wall in the
world for a startup to have to climb over to really
compete from scratch. But Bit Coin and Crypto currencies gave us
that technology change that we needed to after
financial services. And so we are now looking at a very broad cross section of, new kinds of, whether it
is new kinds of lending, new kinds of insurance new
kinds of derivatives new kinds of small business financing, new kinds of
fundraising, crowdfunding, crowdsourcing. We think now there's enough technology
change happening and both consumers and business are
desperate for alternatives. There's some very interesting financial
services companies to get built. And in the long run the two we would like
to work on, we haven't gotten to yet, but in the
long run law and government are the other two really big
ones but those are probably more in the out here, talk about that more
at a future date. >> How do you see about, how do you see
sort of the path of affordable internet for the
rest of the world? And when will Edgarson Crow It start
investing in future rocket technologies? >> I'm sorry, what was the last question? >> When will Edgarson Crow It start
investing in future rocket technologies? I just didn't catch the. >> Frontier, frontier mode. >> Frontier. >> Oh, oh, it's developed like, developing
worlds. >> Yeah. >> Or whatever the, yes, yeah, the term
is. [LAUGH] It's a, it's a, it's hard to keep
up with all the terms. So we don't so we consider, I would say
the following. We consider that the basically the, the,
the amazing opening of the developing world or whatever terms
you wanna use. The, the billions of people around the
world who have not had access to what we would consider to be modern education,
modern information, modern communication, modern
politics access to markets. You know, most of the world has not, has not had access to those things
historically. Most of the world is in the process of
getting access to those things. And so we think the biggest thing
happening in our time is the just tremendous flowering of, of basically the en-, the entire developing
world. And it's all over the planet. And it's happening at different paces but
it, it's really all over the planet. There's extraordinary stories now in
almost every country on the planet of just amazing things
happening. And we think it's a twin story, it's you
know, it's a political and economic development story and a, and a markets
development story, but then it's also a technology
story. And, we think it sort of is the rise of the developing world with first the PC and
now the smartphone. It's not an accident that it's happening
now. and, you know, it's, it's on the heels of satellite TV and fax machines and so
forth. And, and, and the internet, but now it's
smartphones. And so we think a world in which everybody
on the planet has a smartphone with internet
access is a completely different world. Not just because they can play floppy
birds but because they can, you know, very
fundamental things. They can get up to date market information
on pricing. Which is very important if your a farmer and you've never had that
information before. Or they can get up to date health
information, or they can educated, kids can get educated
in ways, you know. A lot of countries around the world like they don't have textbooks much less like
modern education systems so there's just an
enormous ability to upgrade modern education across the
entire world. And then of course huge political change
and a lot of that is a consequence of people number one being able to see what they're missing and then number two being able to
organize. And we think the potential for these
technologies as a way for, for political organ,
organization, political protest to happen. Everybody I ever talked to who has been
through one of these kind of political protests in the last five years talks about the centrality of this
technology. It's only Western media commentators that
say it doesn't matter. It's the people on the ground that are all
over all the new stuff. So, it's really, really fundamental. We as an investment firm, are not, we're a
single office firm, we're a boutique firm, so
we're just investing out of Silicon Valley and we're mostly
investing in U.S. companies and maybe a few, a few companies in
markets like Europe. We're not really set up to invest on the
ground in the developing world. But a lot of the companies that we're
investing in are building products that we think are going to be
transformative on the ground. And so I'll just give you one example. Lyft is a company that we're involved in. Lyft actually is, is a ridesharing
company. That's a, it's a, Lyft and Uber are kind
of roughly in the same market. The difference with Lyft is that anybody
can become a driver. So it's not professional drivers, it's
ordinary people being drivers. Lyft is actually based on the founder's
experience on the ground in Zimbabwe, when he was
working on a development project where he saw in,
like, poor villages in rural areas all over the
world. You know, you have you know, there might
be a couple of cars and if somebody's going to take a
drive into town, you know, anybody who wants to get in, in, you know,
is gonna like chip in for gas, and everybody's gonna get
to go on that ride. So ridesharing is kind of a thing that
happens when not everybody has a car. So, Lyft is basically gonna take the
concept of ridesharing global and gonna make it an
information system, so you can have a much more optimal, right, spread of drivers and cars
and rides. And so you can have transportation work
much better, all throughout the world, including in the
poorest parts of the world. Right, all through the smartphone. Which could be a huge boost to quality of
life. Air BnB, same thing. Air BnB, you know, it's, you know, it
comes across as a way for kids to travel around and stay in
other people's houses. The founder of Air BnB, and by the way
this is a classic case, the founder of Air BnB
Brian Chesky went around and tried to raise venture capital
everyone said you're crazy that's this, you know, nobody will ever stay in
somebody else's house that's nuts. He was getting really depressed. He went home for Christmas and talked to his grandfather, and his grandfather
says, oh yeah, yeah, yeah back in the 30s and 40s,
that's what we used to do. Like, if you were going to go to another city, you would find out a friend of a
friend, and you would say, hey can I, you know, use your spare bedroom, cuz like we
couldn't afford hotels. And so the opportunity to take real estate globally, and make it much more
accessible. And make it much more cost effective for
people to be able to stay, you know, be able to stay whenever their
on the road, whenever their traveling. To make it possible for everybody who owns
a house or owns any kind of property to be able to open it up for be
able to make extra money. You know we think many of these ideas can
scale, basically all the way up and all the way
down. We think that these can be very
broad-based ideas and so we can kind of come at things, ridesharing, real estate sharing,
education, financial services, all these things, and we can make them very, very
broad. So that is what we are trying to do. >> Mark we're sadly out of time, so thank
you so, so much. >> Thank you everybody. >> Thank you. [SOUND] [MUSIC]
