Generated Transcript

[00:00:00]
Hi, this is Craig Severson with a special message for this particular episode of VentureCast. Just wanted to warn you, it’s really long. David and I went up to the Web 2.0 conference last week and did a guerrilla style interview process with the people that we randomly ran into in the course of about two and a half, three hours last Wednesday morning. So we have a technological advantage in that this is an extended podcast like the other two that we’ve done so far, where each of these separate interviews are marked with a chapter marker enabling you to skip ahead or go back to a particular interview you want to listen to. Just helps you navigate the material a little bit better.

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And this will work whether you’re listening to it on your ipod or using itunes or if you’re listening to it on the VentureCast page at gruntmedia.com venturecast but in listening to this, I think we’re putting into practice Chris Anderson’s principle of the economics of abundance in that I didn’t feel like I wanted to edit this down to make it really slick. This is not traditional media. We do have the capability of putting up long conversations like this that I think some people might find interesting. If anything, it’s an interesting anthropological record of what happens in the hallways of a major conference like this. It’s not all Schmoozefest.

[00:01:10]
I mean, it’s part that. But there are some very passionate people there who are really smart and I felt really great that we got to hang out and talk with them. Thanks for all your questions and comments and if you have any further ones, feel free to drop me a line@venturecastruntmedia.com welcome to program 10 of Venturecast. I’m Craig Severson of Grunt Media. And I’m David Hornick from August Capital.

[00:01:47]
In the driver’s seat. In the driver’s seat. Literally? Yes, literally. For those of you who haven’t heard the early David Only Venture cast, there’s a tradition here that, that we’re holding up that I wanted to hold up, and that is that in the early versions, David record a lot of shows whilst driving.

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That’s right. With his handheld recorder. And we’re headed up to the Web 2.0 conference this morning. And I thought that needs to be reinstated, that tradition. So here we are, we’re driving up 280.

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It’s a beautiful morning. It is nice, very nice day. You can see the fog sort of coming over the mountains here on the 280 highway. So. And we’re on our way up to harass people, I think.

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Is that kind of the. That’s the plan. That’s sort of the intent. Yep. Also a tradition.

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Yeah, the plan and the tradition. Always a good combination. And you’ve got, you’ve got a badge. So you were there yesterday? I was.

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I went. Although it took me like an hour and a half to get from the entrance of the hotel to registration because every two feet I saw someone else to chat with. Yes. I just got back from the ad tech conference in New York City, which was very well attended. I gave a talk there on podcasting for the corporate person who wants to learn more about it.

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Oh, very cool. So that was very cool. And it was gorgeous out there as well. But it’s fall, you know, fall is always beautiful. Except when it’s not.

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Except when it’s not. Except when it’s snowing. We don’t get snow here though, for. Well, we shouldn’t rub it in, should we? So what are we going to talk about today?

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What do you think? What do you think? Well, so that’s a good question. So last year, when. I guess it was last year or was it two years ago?

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Last year. Last year when I was hanging out in the lobby of Web 2.0, I asked everybody, what is Web 2.0? And got some great answers. That was completely substanceless but very entertaining. So I think maybe we can ask people, what, what is Web 3.0?

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What do they think Web 3.0 is going to look like? That might be interesting. Yeah. You know, there’s always the, gee, is this a bubble? Which is kind of, you know, it’s kind of a well worn path.

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What about client app or web app? Client app or. I think, you know, frankly, most of these guys, that’s a, that’s an answered question. Yes, that’s kind of predetermined when they start up. Right.

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The, with broadband, the client thing is sort of falling away. And actually the really interesting thing is with Firefox and now I guess with the new ie, there’s a whole lot of infrastructure to make what seems a web app a client app, and vice versa by using really simple lightweight downloads. So I think there’s lots of excitement around how do you infuse a company into the browser experience? And that stuff’s happening. So I wonder if that’s viewed as a, as a client experience or whether it’s viewed as a web experience.

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But. Right. What else, what else can we ask all these ne’ er do wells that are going to be hanging out in The Lobby Web 2.0 Ne’ er do wells like Dave Sifri. We’ll find you Dave Sifri of Technorati lingering in the lobby or, you know, tail rank. You guys.

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You guys are always hanging out in the lobby. So there’s. The conference was over, subscribed, what you were saying, and there’s people hanging out all over the place. Yeah, no, it’s a madhouse, actually. And it was.

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There were lots of people who were trying to get to the conference at the last minute. And I heard from folks even associated with O’Reilly that they couldn’t get people in. So if the folks who are running the conference can’t get you in, you’re probably not getting in. I was chatting with someone yesterday, yesterday that thought maybe what we should do is rent our badges on a daily basis for a couple thousand bucks and make some money on the deal. Absolutely.

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Or have Web 2.0 camp across the street or in the square. Well, they’re doing that. They’re having web 2.2, I think is what they’re calling it. The reason that Bar Camp started was that foo Camps, Tim O’Reilly’s friends of O’Reilly Camp, by its nature, invite only. And he ended up not inviting some folks he’d invited before.

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And people were sort of either bitter or disappointed, depending on who you talk to. And so they created a non exclusive experience to have those same conversations. And it was a big success. So I think that the same thing’s happening here with the Web 2.0 conference. Although the difference is anyone could have gone to the Web 2.0 conference, give or take the $3,000 that it costs.

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But what’s interesting to me actually is this is a much better location. It’s in the. I forget which hotel it is in the palace, that’s right, on Montgome there. And it has a great big lobby and there’s no way to sort of control people in the lobby. And so this is an experience where there are lots of people who are at the conference and participating in these conversations who are not registered and they just stop at the door so they can’t hear the speakers.

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More importantly, they can’t go get the alcohol, but they can have friends bring it out to them. Well, there’s another business there too. Yeah, right, exactly. The conception, the concession outside. This is great.

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Now this is classic Silicon Valley as we drive up 280 and get passed by the Maserati on the right and the Porsche on the left. It’s so bizarre, I hate to say it, but sometimes I just become accustomed to it and I go to other parts of the country and I do suddenly notice it’s like, where are all the Maseratis? And it’s just, it’s an odd feeling to think, where have all the Maseratis gone? Long time passing. You know, Craig, I am going to sing at least once every show.

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Yeah, I know, and I’ll probably stop you, but that’s just the way it’s going to be. Well, so this is going to be. I actually think that the energy around this Web 2.0 conference is really impressive and not in a truly not in a bubble kind of way, as far as I’m concerned. You know, and that look, there’s going to be lots of, there’s going to be conversation about this bubble, non bubble, until it resolves itself with huge amounts of money being made and really important companies growing out of it or lots of money being lost and non important companies not growing out of it. Right.

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But, but just the conversations with, with people who are, who are building this stuff. You know, the Dave Sifries of this world who are always part of the conversation. Jason Calcanis, who I was talking with yesterday, I saw Owen Venotta from Facebook pass through and Lisa Gansky who used to run Ofoto, and Linda Stone, who was senior person at Apple and Microsoft. These folks are all here excited about the opportunities, the things that can be done on the web. And so maybe it’s just that I’m a perennial optimist, but it feels great.

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It feels like people are trying to build real companies that change the way people interact with each other and with the web and with businesses and, and that’s what gets me out of bed and to the office looking at these companies all the time, is that I think there is still a huge opportunity to make a difference and build really big interesting companies. Yeah, no, the network effect of social media stuff has such leverageable power. Sure. And I think one of the things well worth commenting on is since our last podcast, the Charles River Venture guys have come up with this, this new program they’re calling their Quick Start program. And is it alone?

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Right. Angel Bunny finds a question. Exactly. But actually it was funny that, you know, Calcanis mentioned that. Although I didn’t actually ask that question directly, but whatever.

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But that, that is somewhat of the model that river came up with. It’s this pseudo angel loan thing, right? Absolutely. It’s a nod back to the pure Bridge loans for starting up companies which I was chatting with an entrepreneur yesterday who said, what do you think of this? And is it a good thing for them?

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Is it a good thing for entrepreneurs? And for entrepreneurs there is a great opportunity to say, hey, I’d like to get started quickly and this is the Quick Start program. And so I can take $250,000, get started and start building out the company and see what comes of it. The quid pro quo for CRV is that along with them giving you the $250,000 to get started or loaning it to you and not giving it to you, they have the right to invest in your next round. And so at an equal percentage of however many investors you have, right.

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So they’re going to, if you raise money, you’re going to raise money with a couple of investors, then they’ll do half the round or whatever. Which again, I think I understand the motivation for the CRV guys. It’s great for them to see a bunch of stuff early and then have the opportunity to invest in the things that are working. The flip side of that, of course, for the entrepreneur, is that it does create some limitations on their ability to raise the next round, depending on whether there’s room for two investors, et cetera, et cetera. So lots of publicity and press about this program and whether it’s an indication that the venture business has really changed.

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On the other hand, also in full force at the Web 2.0 conference’s first round capital, which is Josh Koppelman’s group. Not just Josh, it’s Howard and it’s Rob, it’s Chris. It’s a great team of people, but they’re focused on these early stage investments and they’ve built a really impressive smart portfolio of early companies and they are among the go to guys. I think if you’re Starting a Web 2.0 company, you should talk to First Round because they see lots of interesting stuff. They’re funding smart companies, they’re very helpful.

[00:11:26]
They even have a pavilion at this conference. It turns out that they got one of the conference rooms and you can go to the first Round pavilion and drink margaritas and see the latest from, you know, their newest company just launched a company called Mashery, which is getting lots of great press, run by a great guy. So, you know, so crv, I totally understand why they’re doing it and I think it’s an interesting model. But I still think that the pure angels like Josh or Ron Conway and his crew, or you know, Peter Thiel or Reid Hoffman or these guys have been doing lots of angel investing early on they are helpful and smart. That they’re definitely the model that I would say is the best opportunity for entrepreneurs looking to get started quickly.

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And by the way, if you know of the gas station, it is. It hosts 380. 380 up there. Okay. Yeah, it’s the one.

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Yeah, there’s one that you go right off. And then. Yeah, that’s right. Here. We’re podcasting while getting gas.

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Yes, we’re a little low on gas, and we really like to get to the conference. But that’s live radio. Except it’s neither live nor radio. No radio, Exactly. It would be live radio if it was either live or radio.

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It seems like with the Charles river thing, there’s room for. It’s just another interesting slice of another interesting way to get funding. I think, personally, as an outsider, I thought this is another part of the spectral continuum for people wanting to raise money. This is really early stage, and I would imagine for them the risk is slightly less, and then they can really get a sense of an early company and then have that ability to become a strong venture partner when they do this Series A. And so then their quote, bridge loan, then converts to equity.

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Is that right? Right, exactly. And I think that’s exactly it. I mean, I think that George Zachary and Bill Tighe, really smart guys, have been in the business a long time and have seen super early companies are taking this opportunity to say, hey, we will look earlier. We’ll get involved earlier.

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Interestingly, George Zachary is the guy who funded Odeo, and he was just bought out by EV to take his company private again. So I wonder to what extent this is a reaction to that experience. Instead of having put the $5 million into Odeo, if he’d put a $250,000 bridge loan in, would that have changed the nature of the investment and how the company moved forward? So it may just be coincidence. But on the other hand, I think that all these sets of factors are influencing the way that we professional investors are looking at the landscape and trying to figure out how we fit into it.

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Right. Okay. Well, we’re getting off at Picky Boulevard to get gas. Excellent. So we’ll probably pick up this show when we get to the conference.

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That sounds great. We’ll see you at web 2.0. This is like the center of the podcast universe with Steve Gilmore, Jason Calkanis, and Nick Denton all sitting in a row. So, yeah, so you put it all together, and you’ve got incredible blog dominance. So I guess, let’s see, my question of the day is what is.

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What do you think Web 3.0 is going to be? We’ve got to move on. It’s time to move on to bigger and better things. What do you think, Steve? No, no, no.

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Jason will pontificate. Mr. Calcanis, a graph of this last Gilmore gang. And was by time and Jason was, well, let’s see, I was 2%, Arrington was 16%, Jason was 40%. So ask him. Nicely done.

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Web 3.0. They did that same graph by how interesting the guests were and I was 80%. So actually I’m disproportionately good, disproportionately talkative, but it’s unrepresentative of how fascinating you are. Exactly, exactly. So what was the question?

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Web 3.0, there is no web. The web is dead. Web is dead. Have you’ve gone to print? It’s over.

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No, it’s not print, but I mean, why the web? Why limit yourself? It’s obviously, I mean, are you guys building a webpage right now? So you answered your own question. I mean, blogging is over.

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Guys didn’t sell the company quick enough. Podcasting is in, then you’re dead. Timing is everything. Blogging is dead. It’s all about podcasting.

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We need to rewind to gnome decks. What was it? 3. Remember gnome decks? Negative 2.

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What? In. Remember Reno? Yeah, in Reno, when we were. I was asking you.

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I shot a developer in Reno once just to watch him die. Well, put it this way, we’ve got him on tape saying pretty much the exact opposite about two years ago. Is that right? That it was all about the web. Everything’s migrating to the web.

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You know, there was, there wasn’t anything to it. And then by the end of the panel, it was like, I think I’m going to start a podcast tomorrow. That was version one. He did that. He worked on it for about what, three weeks and then he threw them all away.

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Don’t you think it’s all about video? Of course, podcasting is just the short step between audio and video. Podcasting is the oxygen supply. And once that is dominated, which it is, then you have to go to video to get more. That’s right.

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The next thing you know, we’ll be back to the MTV generation short attention span theater. But there’s still a place for audio. I mean driving and it’s so much easier to make. And I think it’s a huge place for audio. Still, the notion that it’s easier to make, I mean if Sony had a built in microphone he’d already be podcasting right now.

[00:17:11]
That’s true. Well, actually, the new PowerBooks that have their built in camera, so it’s simple. You’re carrying it with you. This is an exacting. Yeah, it’s an HD camera.

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Let me explain to you the power of podcasting, Dave. When I first met you, and we say hello at every conference, right? And we smile and hey, how’s it going? Whatever, and you’re joking around and I would just like, I walk away and I just think to myself, just another typical vc. No offense, right?

[00:17:36]
Just another VC kissing up to entrepreneurs trying to get their next deal, you know, taking credit for their entrepreneur’s work. You know, it’s like the same stuff every time with these VCs. And I do that. You do that, right? It’s like, oh, yeah, well, what we’re doing at Six Apart, it’s like you did nothing at Six Apart.

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You wrote a check, right? You picked the right horse and you made a bet. So I don’t need to hear you talk for 40 minutes about all the stuff you’re doing at 6 apart because you don’t work at 6 apart. Right. Rather go talk to the people doing that.

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And so I just lumped you into this category of VCs who are good at placing bets, which is what VCs do, and then supporting them, whatever, and taking credit for their work. I’m joking, obviously. But then I listened to your last couple of podcasts. I listened to your last couple of podcasts and hearing your voice and the love fest begins, and hearing some of your thoughts on the industry and your honesty, I realized you were actually a human being, not a vc. So I humanized you and I said, resigns Hornic.

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A human being. No, but I just thought to myself, wow, this guy’s actually smart. Okay, I would actually. Can you give me a little more than human beings, honestly? Well, that was the start.

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And then once I was dreaming of being, I started listening to. I said, this guy’s actually got some interesting points. He’s adding to the discussion. I would actually listen to the show again. I listened.

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You actually put two shows together in two weeks, which, you know, considering you did three shows in seven months, that was a pretty good, pretty good run for you guys. And this will be on in January of 2008. No, we’re on every other week. We’re on a weird. You know, if you guys can do it every other week, I’ll keep listening.

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But no, honestly, you get something when people talk that you don’t get in blogging. And we’re all big blogging supporters here. Obviously, a number of us are heavily invested in it.

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I’m never gonna blog again because I’m so misunderstood in blogging. But you don’t get misunderstood in podcasting because people hear tone. People understand that I’m joking with you about the vc. You have never been misunderstood. That’s the problem.

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I am so misunderstood. You’re not misunderstood. Every time I vlog something, I’m always smiling and laughing as I blog, and my wife’s like, what are you laughing about? Oh, my God, this is gonna be great. I’m gonna drop a tunnel bomb.

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Wikipedia should have ads, you know, boom. But when you. When you say it, Himmler said, you know, he was always laughing, too, you know, Please. You know the podcast over. When somebody brings up Himmler, once it goes to the Nazis, it’s over.

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Yeah, right, Exactly. The podcast is over. It always ends. It always ends that way. But anyway, I think it’s good for you guys for Deal Flow, and I think it’s great that you found a host who has absolutely no idea what venture capital is.

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But it’s really good with the audio stuff because your podcast has great fidelity and you have somebody who can ask you questions, who thinks that angel investing is like getting a business loan, which I thought was a classic question. Oh, Craig, please. You’re missing. That was great. No, I thought it.

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I think that’s good because it’s got. You got a certain Laurel and Hardy thing going on. He’s a straight man. Which one am I? Exactly.

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I can’t. I don’t know. Are you looking up or down? I’m always looking up. Exactly.

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Welcome to my world at 5. 4. You know, there’s no congratulations on the podcast. I think it’s absolutely awesome. Thanks.

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It’s in my top 217. It’s in my top 10 podcasts. If you did it every day, I would actually listen to it every day. Then I. Then I wouldn’t be able to.

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But I don’t know. If you have enough interesting things to say, you should do that, because then he wouldn’t have time to do a show every day. I actually have a new idea. I was talking to Nick Denton earlier today, and I said, we should start paying people not to blog or podcast. And so I’m putting it out here right now.

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If anybody donates $100,000 to my scholarship fund to put kids from foster care in a private school, it’s a big jump in your lifestyle. I will stop blogging. First person to do it, I will stop blogging, and I will put a note on my blog linking to their whatever. So if it’s Gawker wants to do it or Six of Four wants to do it, I will put a plug for their products and I’m out. Right?

[00:21:25]
Exactly. A small price to pay for the. Somebody write a check.

[00:21:31]
$100,000. I will stop blogging. Donate $100,000, we can put two kids into private school from Brooklyn. So let’s do it. You’ve already committed to not blogging.

[00:21:41]
No, I’m not blogging. If somebody gives me $100,000, I’m restating my position. I’m going to start blogging again. I see. This is the ransom note.

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Virulently. He’s going to blog and blog and blog. I’m going to blog only about August Capital. Resign. He’s back.

[00:21:54]
He’s back provisionally. Until he’s paid $100,000 to stop. Exactly. All right, we’ll look. We’ll look around.

[00:22:03]
We’ll see what we can find for you. Thanks, gentlemen. You know what? Shouldn’t you be monitoring your investments, not doing podcasts? I mean, is there a portfolio company that could use.

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You just told me that VCs don’t do anything. So what would that monitoring involve? I don’t know, calling people up, Calling. Giving them a hard time, micromanaging. Hi.

[00:22:20]
Barack Berkowitz. How are you? Are things going well? Okay, great. Talk to you later.

[00:22:25]
Can I get a report that shows all the insignificant drivers of the business with 15 different views of those insignificant drivers, and so we can have four meetings about it while you guys should actually be fixing the products and, you know, doing triage. Oh, my God. You’ve been in our board meetings. You’ve lived them. I’ve been there.

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I’ve been there. You guys are cool VCs. You know what? Your entrepreneurs love you. And when your entrepreneurs love you, that’s always a good sign for a VC.

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When you see VCs walking around alone without their entrepreneurs, that’s how I know if you see the vc and their investments are, like, hanging out with them at the conference. Good. If Nina Trot’s, like, on the other side of the building, and when, like, Dave comes around the corner, she’s like, boom, out. Well, look, I happen to have Michael Sippy right here with me. This is Michael.

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Don’t you love me? Absolutely, David. Absolutely. See? There.

[00:23:14]
Can we renegotiate my options package now? What? I don’t have an options package.

[00:23:21]
Well, good Luck with this model. I love it.

[00:23:30]
All right, Craig, we’re going up the escalator. Up here is the first round pavilion. Now, do I need a special badge or something to get in here? You just have to kiss Josh Koppelman’s ring. Okay, when you come in, which one time or is there a genuine selection?

[00:23:44]
I don’t know. I don’t know. We’ll find out. Okay. And I understand that they have margaritas.

[00:23:49]
Excellent. That’ll help our dictionary quite a bit, right? Exactly. It’s 10:20. 10:20.

[00:23:53]
So it’s perfect. 10 minutes to go before it’s actually here it is in the Sonoma Room. First round, Capitol Pavilion. And then there’s some people lingering over here. Let’s.

[00:24:04]
Let’s see what we got. It’s like a bad invasion. Exactly. Hey, Mr. Stevens. How are you?

[00:24:11]
So, Mark Stevens is the lawyer to the stars. You represent the finest that the web 2.0 world has to offer, as I understand it. I do my best. So the question of the day is, what’s Web 3.0 going to be? Or maybe what’s Lawyer 3.0 going to be if we’re moving on to the next great thing?

[00:24:37]
Oh, boy. I leave predicting those trends to smarter guys like you. Really? Because I leave it to smarter guys like Paul over here.

[00:24:49]
But you get to. I mean, the nice thing about where you sit, and I used to sit in a slightly lower chair than you, is that you do get to see a whole bunch of stuff, which is the exciting thing. I think I know what Web 2.1 is, because I’m involved in that. What I don’t know is what’s the new revolutionary step. So you get to see where the video market is going with the YouTube event and all the various companies that are flooding in and all the various theories of what is the next great hit in the video world.

[00:25:21]
And I have my own theories as to what that’s going to be. But what I don’t know is how this gets transformed once again in the quantum leap when you go to web 3.0. Well, it’s funny, I was talking with a reporter who asked me, so what’s the next great mover of the economy? Is it wireless? Is it whatever?

[00:25:42]
And I said, I think it’s the Internet. I think it’s this thing called the Internet now. Interestingly, we were just talking to Jason Calcanis, who said, it’s not the Internet. The Internet’s dead. No one has webpage.

[00:25:53]
It’s all about podcasting, which, you know, I Don’t know that it’s all about podcasting, but, you know, the web is certainly motivating broader things. I’m sure you’re seeing companies dealing with TV and in the home through the headset, but it’s all over an IP infrastructure. And I think if you, if you look at it, it’s not about, I mean, it’s not Internet versus traditional media or delivery of sound files or whatever in a podcasting format. I consider the podcasting revolution to be exactly the same, you know, underlying forces that created the Internet. It’s basically an Internet revolution.

[00:26:27]
It’s just another aspect of it. And podcasting is the next generation of radio content, or if it’s a video podcast, it’s the next generation of TV content. And how it gets delivered and how it gets distributed is a function of the Internet and IP connectivity. So I don’t see these as multiple disparate threads. This is all one evolution that’s going on.

[00:26:50]
Right. So I think it is interesting both from where you sit and where I sit. In August, wireless Internet was not much more than an idea relatively short period of time ago. I mean, when we funded Atheros, which is powering a big chunk of these 802.11 chipsets, it was just, gee, I think we can deliver data across the air. And now that’s sort of a given.

[00:27:16]
Right now it’s a thousand models trying to, well, what’s the best way to make data move across the air? Well, and what I’m interested in is when is that mythical third pipe going to be created into the home? You know, when are you going to have somebody who’s going to have a viable offering that can go head to head with cable and with dsl? Because right now you still only have the two viable broadband connection choices. And in that kind of oligopolistic environment, you’re going to have lack of innovation and pricing pressure going the wrong direction.

[00:27:46]
So I’m waiting for a viable wireless connection that is a consumer offering that everybody can sign up to really break that open. Yep. When that happens, I don’t know. But there’s a lot of companies that are doing some really interesting things in that regard. No, absolutely.

[00:28:03]
In fact, August is an investor in a bunch of companies in and around that ecosystem. Metro Phi doing the Metro Networks and Sky Pilot doing the equipment to allow outdoor propagation tropos like it. Yeah. So I think that this stuff is going to blow open the connectivity world and the next set, whether it’s WiMax or some other more broader band Wireless protocol. So it’s cool stuff.

[00:28:32]
I don’t think it’s a protocol. We need to have a protocol that makes it work. But ultimately what I’d like to see is a company that provides a service that’s a viable service that can go into. They can make the market. Because ultimately right now it’s a science experiment and a little bit more than that as the protocols get tested.

[00:28:52]
But none of that’s relevant until you get a mass market. No, you’re right. No consumer wants to buy a protocol. Right. It’s hard to market that.

[00:29:02]
We’ve got a great protocol. Are you thinking that there’s going to be a distinction for in home and wireless? In other words, is there still going to be fiber that needs to come into the home, or do you foresee that everything’s going to be wireless? What’s kind of your thinking? I don’t think it’s about limiting the choices as much as it is about multiple connections.

[00:29:24]
Having spent a lot of time at excited home, where we were the pioneers with the arrows in our backs to create a home broadband experience over cable, and obviously that is now the standard connectivity solution for, you know, for the home marketplace. I’d like to see a fiber to the home, fiber to the curb solution. I’d like to see a wireless, you know, one or more wireless solutions so that you have, you know, ultimately it’s. It’s just IP dial tone. Yes.

[00:29:53]
And there’s no reason why you can’t have multiple ways of delivering that. We need it all. Competition is good. We like competition. Sir.

[00:30:01]
Thank you, sir.

[00:30:05]
So we’re going to pass this? Yeah. No, let’s talk to Ariel. So, Ariel Polar. So, Ariel, actually.

[00:30:09]
So, Ariel, you’ve been responsible for Web 1.0, Web 2.0, and now you’re working on Web 3.0. Is that fair? You had iPro and 1.0, which was the first effort at tracking how people are actually looking at things on the web, which is pretty amazing at the time and continues to do great stuff, right? Yeah, it’s amazing. Twelve years later and still around, which is fun.

[00:30:33]
Sometimes you think you have to move real quickly because the opportunity is going to shut. And then years go by and the opportunity is still there. Right. And the interesting thing is, I think the opportunity is. It’s huge.

[00:30:42]
It’s just tracking new stuff in deeper ways anyway. But, you know, this was back in what, 95, 6. 94. I mean, unbelievable. 94.

[00:30:52]
In fact, I have sitting on my table in my Office report from IPro on Yahoo’s traffic signed by you. Yeah, that was. Our first customer was Yahoo. So that’s pretty awesome. And then Ariel did Topica which also doing great and continues to drive a bunch of groups traffic and the sort of one to many phenomenon.

[00:31:16]
And now interestingly you seem to be back in force. What do you think? Having a good time? Yes, yes. Starting your own company and funding some great stuff and sitting on board.

[00:31:26]
Yeah, exactly. Those are the three things I was, I started. Yeah. Two years ago things started to lots of interesting things came my way and I joined a few boards and then more exciting things came and I didn’t have time for more boards so I made a few investments and then I had this idea in the text messaging space. I got so excited about it, I said okay, I gotta do it.

[00:31:46]
Right, so tell us. The URL is textmarks.com right. Instead of bookmarks it’s text marks and you go to text marks and I’ve done this and you set up a text market, you can claim a mark and then what’s the SMS address is 41411. So 41411. So in fact we’ll set up Venturecast for when we’ve launched this.

[00:32:08]
So when you go 41411 and then Venturecast and then I go to your, I go to Textmarks and I set up what to send back for venturecast. Right. And their response, you can program it, you know, you can type it on the web, you can update it from your mobile. So you can be here, here at the conference and say, oh, you know what, like for example, I had a user the other day that they had to print their brochure for a conference but they didn’t know what room they were going to be in. So in the brochure they just say to find us just text papilla241411.

[00:32:36]
And then when the conference came, they updated it from their phone or if things change, hey, we just moved somewhere else. Or one of the most cool uses that we’re seeing is instead of just hard coded response, you can scrape information from a URL. So for example, we have a bunch of hang gliders and paragliders that are using this to send real time information back about wind conditions. You can do more ordinary things like scrape what’s playing now at a radio station. If you try KQED 241411 you’re gonna get what’s playing now at KQED.

[00:33:10]
Cool. So we can do this with Venture Blog. I can do my headlines if you got you can I do have the text Mark Venture blog and I have the text Mark David Hornick I think I don’t I should check what they what they return. It may have been it may have been hacked by my children to return you know like old doofus or something. But anyway but so that that’s cool stuff and then what’s happening on the boards you’re sitting on the so I’m helping the guys at StumbleUpon which you’re familiar with and it’s really awesome.

[00:33:40]
You know again the idea there is to the issue of search. There’s a lot of people doing that obviously Google lead in that space but the problem of discovery. How do you find cool stuff that you’re not necessarily. You don’t know exactly what you’re looking for. You just know you want to find interesting things in your photography.

[00:33:59]
That’s where your interior is sailing. And yeah we stumble upon we have a toolbar that you put in Firefox or ie click the stumble button and it just recommends very very cool stuff. What’s powerful about it is that it works. It works well. Growing quite rapidly I’ve gotten on this kick.

[00:34:17]
I stumbled upon a site that taught guitar so it was tab for a guitar and said oh that’s pretty cool. I gave it the thumbs up and then started stumbling for other things like it and have found some really cool you know like guitar licks and all this stuff. So when I first met the guys last year and I saw the concept I’m like yeah right. I’ve been surfing the web for 12 years. You’re not going to show me anything.

[00:34:39]
And I install the thing and all this awesome stuff comes up and that’s what so what’s amazing is it works for the early adopters like us. But then most of our users are not Silicon Valley Web 2.0 crowd. Most of our users are average people all over the world in our age distribution our education distribution is not similar to the typical Web 2.0 company because it’s so simple. You scrape click the stumble button. You don’t need to know anything about tags even though we use them.

[00:35:03]
You don’t need to know anything about cloud. All you need to know is press a button and it takes you to a cool place. So that’s been great fun. We’re doing some really interesting stuff with video for example. So you can take YouTube.

[00:35:16]
It’s hard to find great videos on YouTube but we have stumbled through video so you do that through our service and we’ll Take you into all these great tools. See, my problem with stumbling, stumbling video, is that if I’m using StumbleUpon while I’m in a conference, I need headphones to listen to the audio. That’s a problem because you don’t know what’s gonna come, but that’s good fun. And then, well, until recently, as you may know, I was on the board of audio. Right, right.

[00:35:43]
Just. So Evan walked by. So it’s interesting. We’ve talked on venturecast about the comings and goings of Odio, and so it’s good for Evan for. Actually, yes, yes.

[00:35:55]
It was obviously very unusual the way it turned out. Hard to predict, but it was great that everyone involved really worked together to, okay, let’s find an outcome that makes sense. And Evan was obviously terrific about doing that. So at the end of the day, I think he’s gonna turn it into something great in his own way. Right.

[00:36:12]
And now he has the luxury to do it as sort of. He sees fit with the time and totally freedom to do that. So that’s. That’s great. And then, and then there’s some of the companies I invested in recently, Rockview, which is doing just awesome in the widgets space, and Flixter in the social network for movie recommendations.

[00:36:32]
Bright Roll in the advertising Network for Video AdMob Advertising Network for mobile. So, wow, you’re in the heart of it again, Ariel. Jeez. You know, I guess you got well rested in the early 2000s and now you’re back with the strength of two men. No, in the early 2000 2000s, I was busy with my three boys.

[00:36:51]
You know, I have three young boys, so I don’t know if well rested is the right term. How old are they now? So they’re nine, six and five. All right. So, yeah, see, I have the.

[00:37:00]
I have 11, 11, 9, 7, 5. So I totally. Yeah, so I totally. But I totally understand. No, it’s exactly the same.

[00:37:06]
Right. You know, they’re too tightly grouped and they’re insane. And I have a girl in there to make my life miserable in the teen years. Wow. I just have to deal with boy issues.

[00:37:18]
Right. They’re predictable entities.

[00:37:23]
Munjal Shah, the mastermind behind Ria. But you are now relaunching. Am I correct about that? Yeah. We just launched a new product today called like.com, which is a search.

[00:37:37]
A visual search engine. And the idea is that every other search engine in the world, you have to put. Put in text to get something back. And this is one where you can point to a Photo or upload a photo a little later that lets. And say, find me something that looks like this.

[00:37:51]
That’s awesome. Great, great. URL. Did you have to wrestle someone for it or. Yeah, we did.

[00:37:59]
That’s actually an interesting story if you want to hear it. Yeah, totally. Absolutely. So we were emailing the guy who had it, you know, and who is the email address? It wasn’t responding.

[00:38:07]
Wasn’t responding. Responding. His phone number? Wasn’t responding. Nothing.

[00:38:11]
Like, this is the right name for finding things. Alike, right? We’re like, you gotta get this name. And was he using the guy who had alike? Wanted like $350,000 for alike.

[00:38:23]
And I was like, alike’s not even that good. You know, what am I. I’m not gonna do that. And then so we just realized his address in San Francisco. We said we’re going to his house. We’re just gonna go.

[00:38:32]
We’re just, we’re just going like, you know, I know it’s kind of stalker ass, but we’re just going live large. You need the URL. You need the URL. So we go to his house. Turns out he lives behind a gated community.

[00:38:42]
So my VP of climb over the wall, my VP of BD says screw this, we’re getting to this guy climbs over the wall, goes, rings his door, he’s not home. I’m like, oh, no. We don’t even know it’s his house. Maybe moved for all we know. And so then he climbs back over, goes down the street, buys an expensive bottle of wine and a card and climbs back over, leaves it for him.

[00:39:04]
We got a call the next day. Ah, very nice. And we got about 100k. All right, there you go. For that kind of URL.

[00:39:10]
That’s good. That’s still more money than I ever like to spend. But. But I, I don’t think. I think it was pretty decent value.

[00:39:17]
Well, you could have. You could pay 100k and be like. Or you could be Z. Like. Or rz.

[00:39:24]
Like. Liker. Yeah, right. Liker. Or liker.

[00:39:29]
Liker. Likeissimo. Well, cool. Yeah, so that’s that. So, like, is today focused at letting you visually search products?

[00:39:40]
Okay, cool. Narrowly, things that are aesthetic because, you know, you don’t need, like to help you find an ipod. Nano text gets you to that search just fine. So. But I throw in shopping for Hanukkah for my wife, an orange purse, and it says, all right, we could find you other orange first.

[00:39:56]
You’re a guy now. Searching, right? Because. Yeah, well, girls don’t Say orange purse. They say, I’m looking for that style with that kind of flower pattern with.

[00:40:04]
You can’t describe it. And if you find something on the Web, you say, it’s sort of like this. You provide that as a reference. And then we don’t have that ability yet. But in about a month, we’ll have a browser toolbar as well as an upload.

[00:40:14]
So you can right click on any photo on the web. You can say, you’ll have to draw a box around the items, which part of the darn picture you want is to focus on. And then you say, yeah, do a likeness search for me. And it’ll run a likeness search and show you the result. The algorithm looks at each picture, computes from it what we call a visual signature, which is a mathematical representation using the pixels of the item, and then compares those to decide whether things are similar.

[00:40:42]
So we used a lot of our computer vision technology that we had done for RIA for doing face recognition to look inside the photo again, this time for a far more different purpose. Right, that’s cool. So it’s. It’s video photo search, Rather Photo Search 3.0. Visual Search.

[00:40:59]
Visual Search. Second generation of Google Images and Yahoo Images. In my mind, right. Those products haven’t changed for five years. Somebody needs to invent something new in the space of searching photos.

[00:41:09]
And this may or may not be it, but people will tell us it’s awesome. All right, cool.

[00:41:19]
So I’m here with Stan Chernovsky who recently left. Is that correct? Monster.com I’m leaving in the process of. In the process was one of the senior folks who ran Tickle and then ultimately did run all of Tickle within Monster. And now you’re reuniting, as I understand it, with James Currier to form a new company.

[00:41:39]
So what’s that all about? Oh, just another. I mean, at this point, I’m ashamed to say, because everyone is, all the time is putting labs in the name of the company. And so when we came up with the name Google Labs, we thought we were original, but of course. So now Oogle Labs is just one of the many labs.

[00:41:58]
One of the many labs. And people are emailing me from different labs and they’re like, can you talk to us how our labs are different from your labs? And then. But the idea is simple, is that in today’s day and age is that technology is easy and it’s all about product, and it’s all about figuring out the right way to communicate to the consumer. And it’s Also about an idea that actually can lead to a big business.

[00:42:22]
And so if you have these two things together, then assuming the technology works, it’s only probably responsible for 10 or 15% of that call stock. Of course if it doesn’t work work then it’s responsibility.

[00:42:36]
But getting technology to work is not a problem anymore. It’s all about how the product works and if idea is good enough and actually going to make money someday, hopefully not in the very distant future. So we’re going to just try to do many of those and maybe three or four at a time and just fool around and see what’s going to happen. So it’s interesting, I mean, so Stan and I met first in a company called sayit, which was this online greeting card company that would have been a huge success. It just had bad timing and was raising money in 2000, but really predated a lot of this interesting user generated content.

[00:43:15]
It was create your own greeting cards, send them out to the world. But you were and the VP of engineering were very much the make the make the thing work as opposed to the product guy. But it seems that you’ve evolved to a much broader role which is not just how do you build it, but more importantly what’s interesting, how does it work, how do you measure it? Right. First of all, the way to look at that again is that in my mind is that it’s just interesting to be able to look at how to run product and how to run sales and how to run marketing.

[00:43:49]
And if you, you have the full picture in your head in today’s day and age you get huge competitive advantage versus the divided world of sales is in hate relationship with engineering and relationship is in hate engineering is in hate relationship with sales and so forth, so on. It’s all the same thing. We are all trying to just to build a company that is successful and there is no need anymore to separate. However, the reason why it became possible for people to have it in their head is just again, what probably happened in sometime in 2001 and 2002, which was overlooked because no one cared about it back then, is that hardware finally got to the point when it was capable of running less than perfect software. Right.

[00:44:42]
We were talking about the efficiencies of the chips and. Right. And so, and so was the way I always sort of envisioned that when I was growing up back in Russia and then starting to code when I was whatever like 12 years old on PHP PDP 11 and so going forward, oh my God, you’re old PDP 11. I am old. I am old.

[00:45:05]
What can I say? Like I always thought I’m so smartest kid on the block. And then like I woke up one morning and I’m like, there are so many smart people and they’re 10 years younger than me. And I’m like, that all happens in one day. You don’t know from the PDP 11 when I was, I had, that was a big machine when I was a young boy.

[00:45:23]
Right, right. But the point though is that it’s always had to be a perfect software or it wouldn’t scale. Right. And that was just. And I was the one who was always saying like, software needs to be right, Software needs to be right.

[00:45:35]
You can’t put crappy software out there because no matter what sort of hardware you put out there and no matter how much money you will spend on it, you’re going to be doomed eventually because it’s just not going to work. And so all the energy and all the focus of software engineers was forced to make it happen. And then all of a sudden again, if it would have happened now, then everyone would be talking about it. Since it’s happened in 2001, 2002, everyone overlooked it. But what finally happened, chips finally got there.

[00:46:05]
And so you can put software that is less than perfect, I’m not saying put crap, but you can have less than perfect things that will work. And the way to scale it is just to add another box and add another box and it’s finally is cost effective. Before it was more cost effective to hire more people to get it into a perfect software. Now it’s not, you know, but it’s ironic to me. I mean, I think that’s absolutely the case and it’s driving the economics of these, of massive services.

[00:46:33]
On the other hand, you know, the thing that was astonishing at tickle is that you managed to get a relatively small number of machines to serve millions and millions of users, which was necessary because we were running out of money. Right. You know, so you look at with your eyes, right, Exactly. It had to be more efficient. So you had to write, you know, really great efficient software out of necessity.

[00:46:54]
Well, that’s why, it’s the only reason why I’m saying all that is being an engineer. If engineers are listening to that, then they’re going to say I’m ignorant. The only reason why I’m saying that because I am an engineer and I am actually a good one and I actually write a good code. And that’s why I’m saying those things, like if you if it would someone else. Wake up, guys.

[00:47:14]
It’s not about how good the code is anymore. No, that’s a great. I mean it’s a super interesting question. Right. And in fact it’s not about the same, I think applies to the product.

[00:47:25]
Right. And I saw you guys do this at Seyit, I saw you do it at Tickle. And I know that you’re doing it now, having talked with you and James is it’s not about creating the perfect product, put aside the perfect code, but it’s not about creating the perfect product. It’s about creating something that’s interesting and that may be compelling and then seeing how people use it and then morphing it to create a better product and see how people use it. And you guys are creating a lab so that if the product doesn’t look like it makes sense, throw out the whole product and go to the next thing.

[00:47:55]
You should be able to say after six months of working on something okay, that didn’t work and feel good about it because you don’t have to spend another year working on it. You can actually do other stuff. But another thing is that it all comes down to the marketing and distribution games these days. And so unless. And it also is a judgment call, of course, because you have to make sure like is product good enough?

[00:48:18]
Do people use, Are people using it? And now we can improve and work on product or people are not using it because it’s like one 16s effort, what I call. And it’s like there’s no way to use it. So you have to be. It has to be workable product.

[00:48:34]
But at the same time you don’t have to launch with the last iteration of that. And certain elements of that need to be changed all the time. And in fact, like. Right. So one of the things is that I’ve been building those systems for like whatever, eight years now.

[00:48:51]
And the main thing, what we’ve been working is that the testing is built into the way we are building our applications. Like the main requirement is that you should be able to do ABCD test on the fly and it should automatically pick up the right one. And you need to be able to run 10 of those tests at any given time. And you need to be able to look at the data, not necessarily through going yourself and training the database queries. So it needs to be actually some sort of meaningful reporting that comes out of it that allows you to make very quick decisions on the fly.

[00:49:26]
And then it’s becomes easier. So you guys have one that’s working great right now. Right.

[00:49:33]
We do have a couple of things that look promising. I’m giving you a chance to pimp them here. No, you don’t want to. We are not ready. It’s just we didn’t even spend much time on certain things.

[00:49:46]
It’s just like we put some stuff together and it looks like people are liking it. So we’re actually at this point we are just scaling back looking at things and we are saying like, oh my God, so how we can start improving product because we didn’t think that the product we put together actually would be usable and looks like it is. And so now we need to improve product before we can actually show it even to you. Because I don’t wanna, I don’t want you to be unhappy. I’m a brutal critic.

[00:50:14]
So are you spending more time with them, with the user experience and the design of the product? You were saying before that the actual engineering can be slightly inefficient. But I would think when it comes to the user experience, things can’t be slightly inefficient. Right. Because people will reject them.

[00:50:28]
Because we as human beings don’t really like to be. It should be good enough things that we always sort of. Okay. I mean the tough thing is that I agree with you. However, the products that we always were trying to build were products that the 35 years old woman in.

[00:50:54]
In the cubicle in insurance company in Minnesota would use. Yes. We have no living here and talking to each other and liking our own gadgets and liking our products. We don’t have a visibility into what those people do. Like I don’t treat people much, do you?

[00:51:09]
No. Okay. I don’t think Dave reads people’s magazine either. But nevertheless this is the freaking biggest publication in the United States still. And those people read that and so.

[00:51:22]
And it’s not the best product, but somehow they read it. It’s not New York Times, but somehow people read it. So we want our products to be to some extent something that those people will like. And so it should be good enough for them. Of course, of course.

[00:51:35]
If you will look at that or they will look at that, or if one of our products when it’s very young would be presented to me, I would be able to shoot it all over the place at the same time. If those people like it, then we say, okay, great, so we are onto something now. Let’s build it up. Cool. All right.

[00:51:55]
Always a pleasure to see you.

[00:52:00]
I’m here with Mark Pincus who founder and funder of many interesting Web 2.0 companies. What do you think? Are you still enthusiastic about this Web 2.0 business? Well, I just said to someone, and we’re standing in the back of the room listening to everyone gawk over Ross Levinson. And I said, three years ago, if you would have told me that in three years we’d be sitting in a gigantic room with someone gawking over some guy newscarp, I would have believed you.

[00:52:32]
Right. Because it seemed like. It seemed like all this. It was gonna go this direction, but then, like, you’re living in the middle of it, and you’re, you know. Well, actually, last year, everyone walked around saying, oh, my God, this is a bubble.

[00:52:44]
True. And this year, you just kind of roll your eyes. Right? And here’s my question to you. Wait a second.

[00:52:52]
My friend has this show, Sex with Emily, and the only thing she doesn’t talk about is sex with Emily. It’s kind of the same thing. Like, probably Dave, the only thing he doesn’t talk about is his own venture Capital on Web 2.0. Here’s my question to you. As a venture capitalist.

[00:53:06]
If there’s so many companies getting funded and record amounts of money being raised and invested, yet there’s no exits in sight, as far as I see, why is it that all the venture capitalists say this is the best time ever, and they’re so happy? What I don’t get, as entrepreneurs, it’s like. It’s like the only thing I don’t hear people talk about, and I think I’m literally missing something. So you can. Okay, okay.

[00:53:31]
I don’t see any exits in sight, and I see lots and lots of companies. And I would be okay. Who gives a shit what Wall street thinks? But I would be okay with it if I saw a ton of companies that were doing a lot of cash flow right, and it just wasn’t valued by the rest of the world. I don’t.

[00:53:51]
So how do you still remain optimistic as a venture capitalist? Well, I think, you know, I think it’s a little bit like the same way entrepreneurs remain optimistic despite being a video company and they’re 200 more. Right. And I think that the thinking is essentially, there are lots of people doing this, only I’m smarter than they are. There’s always room for a good idea.

[00:54:12]
Right? The best one will always be wildly successful. I do believe that. And it is true. And it’s true, right?

[00:54:18]
I mean, YouTube, depends on the market, Was an interesting company. Is an interesting company. Built interestingly large space, was so late to the game, right? But did a better job and quietly marched forward and built a big, built a big community. And so I sit as an investor and say, okay, I understand that there are lots of companies being funded, there are lots of entrepreneurs out there, lots of money being put to work, but if I fund the one that is truly interesting, that builds true value and ultimately provides value either in terms of cash flow or community, etc.

[00:54:53]
That they’ll be successful and there’ll be liquidity. So here’s my other way of saying what you just said. The flip side of my question is that people always whine about how these are harder times and business is fucking hard and it’s hard to go out and do anything unique and defensible that can make money. It is. And it’s always been pretty hard and it’s never been easy.

[00:55:18]
And people just whine about the fact that it’s not easy. So it could be crowded, but there’s a lot of money available and there’s a lot of opportunity, or there could be very limited opportunity and not crowded, right? No, I think that the thing about it is, particularly in Silicon Valley, right, if there is an exit, like a YouTube, then you say, hey, wow, look at those. I know guys who are now multi millionaires by virtue of a startup that they created two years ago. So I should start 10 more.

[00:55:48]
So it should be my turn, right? It’s my turn. Because I’m at least as smart as they are. I will say this, what I still fault with the venture capital model from what in the majority case model is it doesn’t support enough experimenting and failing. And I think that the ecosystem needs to change more so that it enables a lot more starts and stops and you’re much more able to throw a lot more lines in the water and start a lot more interesting ideas and kill them quickly and not get so attached to them.

[00:56:21]
So I think to the credit of Charles river that has created this Quick Start program. Oh, I just saw that. You know, maybe that’s exactly what it is. Maybe it is. Here’s $250,000 in a loan.

[00:56:32]
It’ll convert you around if the round makes sense. If it doesn’t, then. And by the way, encourage the entrepreneur to be the first one to tell you it’s not working because you’ll find them again with something else. This is the challenge, because entrepreneurs gonna snow you because they have too much investment. And so the challenge is to have a sufficient self awareness that after $250,000 worth of money put into an idea.

[00:56:54]
You can look at it and say, this is not it. Okay, so here’s how I think you do that. The MOLE program. What you do is you have some smart MBA or product manager or engineer who you contribute to these companies, and he knows he’s only paid on equity, really, and that he’s welcome to do any startup and leave that one. And when you see the MICE program, right?

[00:57:22]
When you see the mice jump the ship, you know that, right? You should put the canary in the coal mine. Oh, my God. Pinkus left that company, right? We’re out.

[00:57:30]
Well, you know, so. But the interesting thing to me is you said, oh, this is the problem with the venture business. And I think that the problem isn’t with the venture business. The problem is with what has happened to the segmentation of the business, right? Angel investors have traditionally been the first folks who fund that, that experimentation, right?

[00:57:46]
What hasn’t happened is the discipline on the end of, of some investors to say there isn’t enough data to know if this is a good idea before you give someone $5 million. Right? It moves too quickly. That is a challenge. Whereas if you let the million dollars in angel money play itself out, build something.

[00:58:05]
Is it interesting? Hey, it is interesting. Let’s put the next amount of rational money to work and then we’ll see how that works out, right? But I hate being an angel investor because you always get such a shitty deal. They always offer you a convertible note.

[00:58:21]
I’m like, why the fuck don’t want to give you a convertible note so that I get like 20% warrant coverage next to blah, blah, blah, capital, who I wasn’t even excited to invest in anyway. See, so this is. And Craig and I talked about this in a recent VentureCast. This is the challenge that sophisticated angels like yourselves, Josh Koppelman and Reid Hoffman and the folks who have been through this experience say we need to price the round because that’s a fair way to get the amount of value. Ron Conway, who’s walking by the smart venture world of angel investing, you priced around so that you have a.

[00:59:01]
So you have a foothold and this is the amount of company and you drive value. But on the other hand, for an entrepreneur, as you’re looking at it, you would certainly rather take money and have it at a discount. And if you are wildly successful with the money that you put in, there’s what’s funny about it. Here’s what’s just so terrifically ironic. The less sophisticated the entrepreneur is, the worse the deal is.

[00:59:24]
They offer you which is why I find if they’re really unsophisticated, they offer you a convertible Note with like 10% warrant coverage. Me, like pretty sophisticated, pretty seasoned entrepreneur. If I do a startup and I’m bringing angel money or something, I offer them either 50% discount, you know, to the A or priced, I mean, Right, right. It’s so funny. Like I get worse turns than a first time gun.

[00:59:51]
But I think that’s an interesting. And I think that’s also true of seasoned entrepreneurs with respect to venture capitalists. Right. Where you may say, okay, VCs are fungible and I’ll take the highest bidder. I think that the seasoned entrepreneurs, you’ve been through a lot of experiences and if you were to take venture capital money again, you do it with your eyes wide open.

[01:00:11]
And would there be factors that were important to you that would be different from then simply the dollar. I like to say that the dollar job of the entrepreneur is to protect investors from themselves. Wow, I need more of that. That’s the job of my children too. Right.

[01:00:28]
Protect investors of my wife or the first, the first job of the VC should be don’t kill the patient, do no harm. Cynical. Yeah. Do no harm. If you just started at that point, it’d be.

[01:00:41]
So for what it’s worth, I mean, you know, I don’t think that that’s so wrong. Ultimately, at August, our view is that you invest behind really smart entrepreneurs who are the experts in the thing that they’re thinking about and you as your partner. And then. Right. You’d be foolish to then tell them how to run their business because they’re the experts.

[01:00:59]
Right. So, and, and my one piece of advice for venture capitalists is now this is like your seventh piece of advice. But. All right, here’s your seventh piece of advice. Okay.

[01:01:09]
No, no, I want it. All you want to do, I would say this. If you really are backing an entrepreneur and you believe in him, A, don’t ever let him leave the company and not get engaged. And B, don’t ever have an executive session of the board where you say, oh well, we want to have a session without you in the room. Because the minute that you do that, you’ve screwed the pooch.

[01:01:33]
Like they’re no longer your equal partner. There’s no longer a trust, trusted relationship. And you should do that if you’re trying, if you want to get rid of them.

[01:01:44]
June. So I’m here with June, June Cohen from the TED Conferences. Fabulous. I’ll get to listen to myself on my ipod now. Well, you could start your own podcast.

[01:01:57]
And then I can listen to you as well. I could. Maybe that’s next, is it? All right, The TED Podcast. Wouldn’t you like to be the host of the TED podcast?

[01:02:05]
I would. Well, you know, I’m all about bringing TED into new media. That does seem to be going. So you’ve spent the last, what, week here? TED is now officially located in.

[01:02:14]
For those of you listening, TED is the Technology, Entertainment and Design conference. And I’m a huge, huge fan of ted. I go to TED every year and occasionally, and it’s very occasionally. Blog on the TED blog. We.

[01:02:31]
We would like to see that more often. But you are a great friend of ted. It’s true. Thank you. And our most prolific recommender.

[01:02:36]
All right, so that’s good. And I actually, I have many more recommendations. I can’t wait to hear them. But anyway, so TED relocated, the organization relocated to New York City to get sort of more of the east coast blood into the program, into thinking. But you just have been out here for the last week hanging out with all these new, new media companies.

[01:02:57]
So what’s that been all about? I have. Well, the thing is, when you live in New York and you work on technology and new media, especially if you’re doing things that are really leading edge, you really have to work to keep up. Because when you’re in San Francisco, you breathe in technology, you can’t help but know what people are talking about and what’s interesting and what’s new, which might slightly reflect my social circles, but I think is generally true. Whereas in New York, you can, you know, about theater and music and culture at large and politics.

[01:03:25]
But on the technology front, I wouldn’t say it’s a wasteland, but it’s hard. It’s hard to stay ahead of the game. So I’ve been out here for 10 days talking to almost everybody who’s interesting and smart and working on similar projects to me to absorb. Cool. So, I mean, by way of history, June, you started out at Wired, right.

[01:03:44]
You were part of the original Wired team, so the original hot Wired team. So. Right. Hot Wired, the Wired.com world. None of this print stuff.

[01:03:52]
Yeah, exactly. Print is for sissies. That’s right. In fact, Chris Anderson was feeling so jealous that he had to take it back. I want the online back.

[01:04:03]
What a smart move that was. Yeah, great. And actually, and then buying Reddit, which I think is also a brilliant move and completely in keeping. We talked about this in a recent podcast about. So this is the Chris Anderson who runs Wired, not the Chris Anderson who runs ted.

[01:04:19]
And the Chris Anderson who runs Wired gave this talk about economy of abundance and how when he talked about it, he said, gee, you know, I don’t really want to program my.com because I want to provide everything and then let the consumers then say these are the interesting things, or whatever. And it turns out that Reddit is just the right channel for that. And so now it’s a part of the organization. It’s going to work with Conde Nast to allow users to percolate up the interesting stuff. Which is exactly what’s cool about user generated content, right?

[01:04:49]
It is. I was really fascinated by that purchase because it also really underlies how serious Wired is. I mean, of course Wired would be serious about the online space, but how serious they are about it on a personal level, on a company level. Yep, yep. Now you guys have done something that was maybe considered.

[01:05:16]
Craig is here to like, keep me honest and help me. Anyway, so you guys recently did something that was, that probably would have been viewed as controversial even a short period of time ago, which is to, to release a bunch of the talks from TED on video. So I, I go to TED and what do I pay, 4,500 bucks or something to hear these talks. And then you guys record them beautifully. And now you’re making them available to anyone who goes to the TED blog, which is what, ted.typepad.com well, they can go to either ted.com or ted blog.typepad.com ted blog.typepad.com but it’s amazing, right?

[01:05:53]
Because these talks are just incredibly interesting people. Whether it’s Hans Rosling talking about how populations have grown and measuring them in interesting ways, or it’s Tony Robbins, you know, telling the former presidential candidate Al Gore how he could have won the president the equivalent of the DVD by visiting, like, oh, I’ll go to Ted.com and I can watch these incredible speeches. So that’s, I mean, it’s a, I guess it’s a change in mindset. It is, but it’s one that we feel really works. And people have really taken to the idea that you can have, you know, an elite invitation only, very intimate gathering at one end of the sort of the brand experience, if you’ll forgive me for saying, brand experience.

[01:06:38]
And then on the other hand, this very egalitarian ideas for the world. Ideas change the worldview. And when we were thinking about it, we were thinking about, gosh, you know, the talks at TED are so impactful and we work so hard to Curate them correctly and to get people who are wonderful storytellers with big ideas. And if you think about the part of the mission of TED to have impact with those ideas, there’s only so much impact you have when you’re talking to a thousand people in a room, no matter how phenomenal those people are. And so we really felt that there was a huge market for them and that we could have just a much broader impact and that the talks deserve this much wider audience.

[01:07:12]
So you guys are now. It totally works for me not being able to go, but catching them on video, it’s just amazing because. Exactly. You said the whole focus of the conference and the people that come there is about this expansion and the egalitarian thing. So the fact that it’s out there for those of us who can’t go, I think is totally in line with what Ted’s about and just makes me like it even more.

[01:07:34]
I think it’s been great for me personally. And the other thing that’s cool. So Craig is the master of the video podcast and is teaching all of us how to do a better job at video grunt of, you know, expressing these sorts of stories. And what you guys have done an amazing job of is to take that, what is an experience of someone standing on a stage and bring it to an experience. That’s the, what do they call it, the 10 inch view, as opposed to the 10 foot view or in the conference maybe it’s, you know, the 100 foot view.

[01:08:03]
And I guess, you know, so that’s been a focus of the team and I think it’s done. You guys have done a great job, so thank you. Well, you know, we’ve worked really specifically on that. So it’s really gratifying to hear you say that. We really focused on two things, on getting the production values right, that it’s a really different.

[01:08:22]
Well, a. It’s a different experience, you know, the 10 inch view watching on the microscreen versus watching on TV or you know, certainly on a movie screen. But there’s also, there’s a. You can lose a lot in translation from a stage presentation to a recorded presentation. In fact, you, you almost always lose a lot in translation.

[01:08:38]
And we were very specific. I hired the smartest person I know, who’s a filmmaker and a long time expert in online video, who’s judged micro cinema competitions, who’s been thinking about the space for 10 years, to help me make sure we were getting it right. And so we lit the stage specifically, we captured specific camera angles. We have five cameras to work with, to make sure that we’re getting tight shots, that we’re getting in a variety and editing so that the podcasts really speak to people. And we feel like they’re hitting the mark.

[01:09:06]
Just from the feedback we’ve gotten that people are having a real emotional reaction to these podcasts, like they’re speaking to them on a personal level. It’s totally hitting the mark. I mean, to me, it’s the gold standard of recording a conference. Well, thank you. I truly mean that.

[01:09:19]
But hey, if you can light vegetables to do Oedipus, then this is simple, right? I mean, lighting vegetables is hard. So David’s referring to the amazing eight minute short film that my wonderful hire, Jason wishnow, who’s my director of film and video at ted. His previous big project was doing an eight minute short of Oedipus with all the characters played by vegetables. And it was in and it worked.

[01:09:50]
It’s hilarious. Have you seen it? Oh, my God. So you can get it right. It’s Oedipus, the movie.

[01:09:54]
Com. Yes. And it’ll be on the. It’s played in around 80 to 100 film festivals and it’ll be on the Sundance channel next month. It’s too great to believe.

[01:10:04]
I had this great conversation with Jason about how he had to break a picket line once to go to a grocery store because he needed a particular potato. And the people picketing were furious at him, like, don’t break the picket line, you know, and he said, but I went to all the other stories and they don’t have the right potato. And I really. I’m with you, but I need this potato. And they were.

[01:10:25]
They just didn’t appreciate that he truly needed the right potato. This wasn’t like some, you know, being, I’m crossing the picket line because you’re the closest grocery store. He’d been to seven others. This is the attention of detail. It’s all about casting.

[01:10:37]
It’s all about the right casting. Right potato casting is very important. Now, interestingly, Chris Froehlich, come back here. Chris Froehlich. Here we have an interesting.

[01:10:47]
The interesting confluence. Sorry, guys. But here we have the interesting confluence. I’m talking with June Cohen of ted. I’m standing in the first Round Capitol Pavilion.

[01:10:56]
And here’s Chris Froelich, who you cross the boundaries of these two worlds. Right. You both work with the TED organization and you work with First Round. I do. I’ve had the great pleasure to work with June and Chris and Tom and the whole team and was part of TED Talks and helped find BMW and bring them into the fold.

[01:11:16]
And I think it was a great partnership. And I’ve been doing. I was doing first round along with that for a while, and now I’ve been full time at first round for about three months now. Great. And Chris was really key in the success of TED Talks, in that finding and working out the partnership with BMW is a big part of what helped us succeed.

[01:11:34]
And we think it was probably the biggest podcast sponsorship sold at that time. We’re pretty sure. I looked at some. Some figures for the industry, and I think we had the single largest sponsorship at that time. It’s been a pleasure.

[01:11:47]
What’s really great is I’m a huge podcast consumer. I’ve been listening to them. I have more hours of them on my ipod than I could possibly get to. But it was so great to get this awesome content out to the world that you and I have known about TED forever, but most people just heard about now they get to experience it, and there’s a great partnership with BMW to bring it up, bring it out to the world. Well, it’s cool.

[01:12:11]
And in fact, Craig just came back from the ad tech conference where one of the speakers was the guy who, from the agency side who came up with the whole BMW films concept and drove that, which was another one that I think was a monstrous success. Drove people onto the web, watched BMWs being driven in insane ways where you thought to yourself, I want to be that guy, and then drove you to their site and all. So I think that BMW is obviously being really forward thinking about it. And so if. If they want to sponsor podcasts and they want to sponsor VentureCast, that’d be fine.

[01:12:44]
I’m okay with that because I drive a Mercedes, but I’d be willing to switch. Flexible. Yeah. Don’t you think? I think you’re flexible.

[01:12:53]
One for you, one for me. Well, yeah. Great. Can have. What do you want?

[01:12:56]
Which one do you want? I think the six series. The six series. And I’d take an M5, but not. I want the Mini Poo pearls.

[01:13:02]
Oh, I want a Mini too. That seems like they make motorcycles too. I think that’s going just a little too far. Chris, come on, we’re not that piggy. I don’t mean to sound like I’m trying to sell something here, but I’m involved in video podcasts and enjoy the TED videos very much.

[01:13:19]
And also the BMW sponsorship, to me was another really great example of how sponsorship podcasting can come together because it’s really. It’s the perfect tone. And for me, I’m a huge kind of proponent of let’s not make video podcasting just another television experience. So kudos again just for having that campaign and how it’s presented in your show. At the tail end, I believe.

[01:13:44]
Well, that was really fascinating because obviously brands like to get their message out far in front. Their agencies are really pushing to, you know, pre roll and we want to be there. But you know, June and Chris Anderson, you know, really set the tone of we have to respect our audience. Your brand will have more value if you let them get to it. You know, let get right into the great content and then follow it up in a more subtle way.

[01:14:09]
And then June was able to work with them and really find new clever ways to get the message in there. And, and at one point they said they saw this as important as BMW films. They saw this up in the par of that kind of a move. And I think it’s great. I think it’s been a home run.

[01:14:28]
Well, it’s interesting looking at a bunch of different new media companies and the question of how are you going to drive advertising into so that it doesn’t interfere with the experience. And I think that increasingly it is going to be this sort of product placement like world that we see. And so again, I’m happy to describe the driving experience of my new BMW M5, which has incredible pickup. I mean it’s really astonishing. Have you felt that you could feel it literally in your stomach.

[01:14:56]
It’s just awesome. Sort of like the ultimate driving. And you could probably. It is, I think it is the new line is that ideas are everything. Yes.

[01:15:04]
You know what I like about the BMW thing? They really drive good ideas. It’s all about ideas are everything to me and driving. I like that metaphor. But can I add that actually it’s important to note that it has had these podcasts have had the intended impact for BMW.

[01:15:21]
So they’re thrilled. And one of the outcomes that I was actually surprised by is that in the blog coverage. So we’re covered in a couple thousand blogs each month. People who found TED talks and have really taken to them. And so many of the comments that we get share that affection and that thankfulness with BMW.

[01:15:39]
Just outright just saying like thank you BMW for making this available on my ipod. You know, one of my favorite brands is sponsoring this. BMW made such a smart move. Thank you BMW. And you know, that’s a hard reaction to get when you’re combining ads with a, you know, with a video.

[01:15:55]
Imagine what the venture blog audience would say about BMW. They were so forward thinking as to, well, look at, you know. Exactly. And I. I mean, I don’t want to go on at great length about the incredible disposable wealth of my listeners. It’s vast.

[01:16:11]
BMW, I’m telling you. Thank God for editing. Actually, it’s interesting. It’s.

[01:16:21]
It is these freedoms that have made America strong. Okay, okay, Case, so we got our freedom, but management’s lousing up everything. Labor is at fault. It’s ruining the country. My constituents, as your elected representative, I’m strictly neutral.

[01:16:39]
Labor, management, politicians, buoy, they can’t tell corn from oats.