Generated Transcript

[00:00:14] Craig Syverson
Welcome to venture cast number 22. I’m Craig Syverson of Grunt Media.

[00:00:18] David Hornik
I am David Hornik of August Capital.

[00:00:21] Craig Syverson
This will be the magic show because 22 is a very important number in numerology.

[00:00:26] David Hornik
Is it?

[00:00:27] Craig Syverson
Yes, it’s a master number. And with Pluto on the ascendant of your sixth house, David, I think if you cross water, you will meet with great fortune.

[00:00:36] David Hornik
All right, but I should just tell you, I really, I only have one house. When you buy one house in Palo Alto, that’s all you can afford. That’s all you can afford.

[00:00:44] Craig Syverson
Oh yeah, house or a garage.

[00:00:47] David Hornik
We’re just talking actually yesterday about what we could have done with all the billions of dollars that we’ve spent on this war. And I said I could dig a basement.

[00:00:57] Craig Syverson
Yeah.

[00:00:59] David Hornik
So I could have a bedroom for all my children.

[00:01:01] Craig Syverson
Yeah, exactly.

[00:01:03] David Hornik
That didn’t seem to be what they were telling you. They were thinking, you know, research and.

[00:01:07] Craig Syverson
For clean tech, silly government stuff.

[00:01:10] David Hornik
I was thinking basement.

[00:01:11] Craig Syverson
Yes, exactly. Basement in Palo Alto. So it’s been a couple of weeks, has it or. Yeah, we’re on schedule.

[00:01:16] David Hornik
I think we’re doing back. We’re back on.

[00:01:18] Craig Syverson
We’re back on. We’re back in the swing of things. And what have you bought lately? You buy any companies or. The other question is web 2.0 bubble or bust? How many talks have you given on that?

[00:01:33] David Hornik
I have not bought anything. But this is funny. I met with this entrepreneur. People keep saying, oh, it’s too late and there’s all this money and everything’s too late and you can’t put money to work. So I sat down with this guy. A friend of mine told me this is a really great smart entrepreneur. He has a good idea. It’s a super early. So it would be putting in kind of angel investment. Do you even do that? I said, sure, I do that. If it’s an interesting idea or whatever.

[00:01:57] Craig Syverson
Right.

[00:01:57] David Hornik
So I sit down. He kind of describes his idea. It’s in the advertising space. It’s a great idea. He’s onto something really interesting. It’s fun. It’s not being done. I mean, you know, here’s my 500,000 bucks. Yeah, it’s like a no brainer. And so this idea that there’s. There’s nothing interesting to be done. The web things over. Oh well, it’s so crazy competitive that, you know, all the angel investors are in charge of the universe.

[00:02:24] Craig Syverson
Right. You don’t need that much money to start up a company.

[00:02:27] David Hornik
Well, you know, smart entrepreneur is doing something cool. I Hope that I get a chance to fund it early, and if it works out, then it’ll be an interesting deal. So I think that welcome to the venture world. It’s basically, you got to be opportunistic and look for things that are interesting and. And if you find them, then you might actually make some money.

[00:02:45] Craig Syverson
Well, so, I mean, this is a discussion that’s going on a lot. Is the venture world in general more open to these smaller things? Was typically a venture deal. Was. We’ve talked about this, like 10 million or. I mean, there’s no fixed number.

[00:02:58] David Hornik
I think the answer has got to be yes. I mean, I think, look, it’s not that August would never do them. Actually, we’ve done them a lot over time. But I just think at this point, there are certain ideas that you have to embrace early. And maybe you. Because it takes a relatively small amount of money to figure out if it’s a really bad idea, you may not be able to figure out if it’s a good idea, but you’ll certainly be able to figure out if it’s a really bad idea for 500,000 bucks or a million bucks, then do that. Right. Because the worst case scenario is you’ve invested a million bucks. Turns out it’s not a good idea. Well, guess what? You know, we invest in things all the time that don’t work, only usually we’ve invested 5 or 7 or 8.

[00:03:35] Craig Syverson
Or 12 million bucks. Now, there’s a time issue though, too. Right. With. With VCs, there’s expectation that you’ll be with them in the company a bit or be on their board or.

[00:03:45] David Hornik
Yes.

[00:03:45] Craig Syverson
Right. So you can’t overdo that.

[00:03:47] David Hornik
No, that’s absolutely right. You have to decide are you going to continue doing the things that you ordinarily do?

[00:03:52] Craig Syverson
Yeah.

[00:03:52] David Hornik
And be. This is the difference between an active investor and an inactive investor. Right. So, yeah, August is always. Almost always an active investor and I’m almost always an active investor.

[00:04:02] Craig Syverson
And.

[00:04:03] David Hornik
And that means I sit on the board. And so, yeah, that takes more time. And you can only be on so many boards. Right.

[00:04:07] Craig Syverson
I mean, yes.

[00:04:08] David Hornik
It’d be interesting to hear what various people up and down Sandhill Road thought was the appropriate number of boards. Because, you know, there’s some who would probably say, oh, five, which is a pretty low number. And there are others who are on 15, which is a really high number. Right. I mean, you look at it, let’s say you have a board meeting per company per month.

[00:04:27] Craig Syverson
Per month. Do some do that?

[00:04:28] David Hornik
Yeah, most of my Companies have monthly.

[00:04:30] Craig Syverson
Board meetings, I would say per quarter would be a lot.

[00:04:32] David Hornik
Per quarter is when the, things are getting more mat and everything really. But early on, things are changing quickly and you want to try and be helpful. And so, you know, if you have a board meeting per company per month and how many, how many work days are there? There’s five times 420 and you’re on 15 boards, it means you have a board meeting almost three out of four work days. And it doesn’t even work out that way because you never, the schedules don’t really work. And so you end up having a couple board meetings, you know, twice a week for every week. And you know, so I think that’s very tough. On the other hand, it certainly can handle more than five boards without, without feeling like you’re not, you don’t have the capacity to be helpful. So that’s definitely true. That gating item or a factor that controls the number of companies you can be involved in is time.

[00:05:19] Craig Syverson
Now is there, how do I put this? Some board meetings are obviously harder than others. And I guess the age of the company has no effect on that. An older company could have issues that the board requires attention on. Yes, just as much as a young company can.

[00:05:34] David Hornik
But as a general rule, the more mature the company, the less direct involvement. Except around extraordinary events, right? Those extraordinary events are basically a change of leadership. There’s a CEO stepping down or new CEO being hired, or M&A or IPO.

[00:05:54] Craig Syverson
Right.

[00:05:54] David Hornik
Big events where occasionally you’re doing a big deal or whatever. But basically in later stage deals, things are moving apace. And unless there’s one of those large events, whereas in early stage deals there are all sorts of things. You know, you’re recruiting new team members, you’re trying to figure out the market, you’re trying to engage with customers and all of those things. And all that takes time. And if you’re, I think if you’re a good active investor, you’re trying to be helpful in all of those arenas. And so yeah, you have board meetings that have lots of issues, but more importantly, there are lots of ways in which you should and could be more helpful to the company before and after the board meeting. And so if all of your companies are brand new companies just getting started and figuring out their business or whatever, you know, six boards is a lot of boards. If they’re all been around a decade and moving towards IPOs or feeling stable or whatever, you know, and you’ve, you’re on six of those, you could do another six Boards, so.

[00:06:52] Craig Syverson
And soon you’ll be off of those in theory. In theory, yeah. Once the IPO or the merger, sometimes.

[00:06:58] David Hornik
You know, you stick with it.

[00:06:58] Craig Syverson
Right, yeah.

[00:06:59] David Hornik
My partner Dave’s been on the Microsoft board for 25 years or something and it’s because it’s a great board.

[00:07:05] Craig Syverson
Sure.

[00:07:06] David Hornik
You get to see all sorts of things. And it’s great on the resume. Yeah, it’s good, right? Exactly. You know, how big are boards?

[00:07:13] Craig Syverson
Is that part of the bylaws?

[00:07:15] David Hornik
It is in the charter for the company and it is determined by the company and it is usually in a negotiate. With early stage companies, it’s a negotiation with the investors to determine what’s the appropriate number of board members. You know, sometimes it’s how many founders are going to be on the board, how many investors. And then do you have some outside members to even things out. And you pretty much always want to have an uneven number of members on the board because in the very, very, very rare circumstance where you actually have to vote on something, helps if you can have someone break a tie.

[00:07:47] Craig Syverson
Yeah, right.

[00:07:49] David Hornik
I’d say in early stage companies it’s kind of five board members.

[00:07:52] Craig Syverson
That’s all.

[00:07:53] David Hornik
As they get a little further down, seven. You know, public companies have a number of board members, but the, the role of the board member in a later stage public company is very different.

[00:08:03] Craig Syverson
Like what with Microsoft, what do you think?

[00:08:04] David Hornik
It’s a lot of governance. It’s overseeing how many people? Oh, I don’t know. Yeah, it’s a good question.

[00:08:10] Craig Syverson
Publicly available?

[00:08:11] David Hornik
It is. We could find out. While we discuss this, I’ll see if I can find out what the answer is.

[00:08:15] Craig Syverson
It brings up an article that I was just lamenting that I don’t have on me right now. But the Journal had a front page article in Investments recently on this issue of being a board member as a venture capitalist. Did you happen to see that one?

[00:08:27] David Hornik
You know what? I did not.

[00:08:28] Craig Syverson
It was sometime in the past couple weeks and now I can’t mention names because I don’t have it in front of me. But a gentleman who’s a part of a San Francisco investment firm, they were talking about his profile where he invested in company A. He’s also on the board of company B. Company A’s business starts to lean towards what company B is doing. But it wasn’t originally that way. Right. Because, you know, these things are, these things are volatile. And so they’re just talking about that whole, you know, how companies are putting in certain policies of how do they determine if there’s a conflict of interest going on and that kind of thing. So it’s.

[00:08:57] David Hornik
It’s true. You know, this. The sort of classic example of that in the Bay Area tech scene is that Mike Moritz was an investor in Yahoo. He was an investor in Google.

[00:09:08] Craig Syverson
This was mentioned.

[00:09:09] David Hornik
And there was a period of time when Yahoo was talking about buying Google and didn’t. And then there was a period of time when Google became larger and sort of more powerful and ultimately clearly competitive with Yahoo. And then Moritz needed to decide which board he was going to be on. He stepped off of the Yahoo board, they stayed on the Google board, and then he recently stepped off of the Google board because, among other things, there were some challenges being an active investor in the online space and having one of the potentially largest acquirers or the largest competitors as another board on which you sat. So it’s certainly the case. I mean, you know, frankly, go even further back. There was a period of time when Draper, Fisher Jurvetson had investments in two of the largest online email companies. And I think Tim Draper was on the board of one and Steve Jurvetson was on the board of the other. And I can’t remember whether it was Tim on Hotmail and Steve on 411 or whether it was the other way around. Tim, it doesn’t matter. Clearly competitive. And they said, look, we have a Chinese wall. We don’t talk about it. These are great investments. We’re going to move forward. As a general rule around here, if there’s some potential conflict, we then stick with the company in which we’ve invested. If you happen upon a conflict over the term of the investment, that’s a trickier problem. And if it’s sufficiently acute, then I think you have to step off of one of the boards or the other.

[00:10:29] Craig Syverson
Now, is there a problem if you’re on the board of company A, but you have an investment opportunity with company B, is it okay to go with company B and then you just stay off the board? Would August do that, or do they even.

[00:10:38] David Hornik
No, we tend to take the view that it is better to err on the side of caution.

[00:10:44] Craig Syverson
But there’s no regulation around that.

[00:10:46] David Hornik
No, absolutely not. I mean, I think that you need to demonstrate your fiduciary duty to the company on which you sit on the board. And. And that may mean not investing or sitting on the board of another one, but it’s an ad hoc decision and not the sort of thing where they’re.

[00:11:01] Craig Syverson
Very clear rules or what. Having worked in heavy IP protected areas like IDEO for so long. And we started to have this with these different companies as a consultancy and a very broad consultancy. Lots of Chinese walls started to come up and we were very careful about observing them because you just had to like, one team couldn’t talk about their project publicly.

[00:11:20] David Hornik
Hey, you know what Ford’s doing, right?

[00:11:22] Craig Syverson
You know what we’re doing with these guys, right? Exactly. It’s just like, no, you can’t do that. So it became interesting as the company got bigger. It’s like maintaining that level of these Chinese walls that you’re talking about.

[00:11:32] David Hornik
Well, I think you know what an area that this is interesting. Increasingly interesting. Or maybe it’s not interesting at all. Only to me as a former lawyer. But what’s happening in the law firm world is that smaller firms are merging to form bigger firms and bigger firms are buying additional firms because there is this general sense of the value of having big multinational practices that cover everything that a client might want, etc. But as each time you buy one of these, new companies bring their clients, you have these conflicts and it’s a challenge. And you, you know, I’ve had clients in the past where I’ve said, oh, this is potential conflict. And I’ve asked other clients to waive that conflict and in writing say, I don’t view there’s a conflict. I remember one instance a client said, no, forget about it. You’re our attorney. Don’t.

[00:12:16] Craig Syverson
Yeah.

[00:12:17] David Hornik
I was like, no, no, you know, you should waive it. Really, Because I’m going to. Don’t worry, it’s fine. And they said, no.

[00:12:23] Craig Syverson
Yeah.

[00:12:24] David Hornik
And that’s that. You know, it’s not right in that instance. It is a client based. Right. And they don’t waive the conflict. You know, you’re playing with fire if you ignore that kind of behavior. So.

[00:12:34] Craig Syverson
Right.

[00:12:34] David Hornik
So, by the way, I have the answer. The answer is 10.

[00:12:37] Craig Syverson
10.

[00:12:37] David Hornik
Okay, so 10 board members.

[00:12:39] Craig Syverson
It’s still not huge, you know, it’s not like 20 some.

[00:12:41] David Hornik
Nope.

[00:12:41] Craig Syverson
Which would be unwieldy, I guess. Hard for a conference call.

[00:12:44] David Hornik
It’s interesting crew. We’ve got Mr. Ballmer and Mr. Gates. We have recently joined Reed Hastings, CEO of Netflix. Yep.

[00:12:54] Craig Syverson
Awesome.

[00:12:55] David Hornik
We have Jim Cash from Harvard Business School.

[00:12:59] Craig Syverson
Great name for a business guy, you know.

[00:13:02] David Hornik
Yeah, right, exactly. The former chairman of AT&T got the former financial officer of JP Morgan, you know, president, chief executive officer of Merck. I mean, it’s just, oh, John Shirley, who’s the COO of Microsoft. So it’s not like, oh, we picked up this guy.

[00:13:19] Craig Syverson
Yeah, right. This guy’s selling coffee out in Seattle. He had really good ideas.

[00:13:25] David Hornik
Well, you know, that guy’s on a lot of boards, that coffee guy. What else?

[00:13:34] Craig Syverson
Aggregate knowledge got funded, I read somewhere.

[00:13:37] David Hornik
Yes, well, they certainly did. To the tune of a lot of money, I believe.

[00:13:41] Craig Syverson
Yeah. Good for them. Congratulations to a former Joinee of Venturecast.

[00:13:46] David Hornik
That’s right, exactly. Mr. Martino.

[00:13:49] Craig Syverson
Yes.

[00:13:49] David Hornik
Who’s a great, smart entrepreneur. And there was no question he was going to raise money, raise whatever he needed. But it’s just interesting, I mean, this, this idea of wisdom, of crowds, you know, the idea of applying the aggregate knowledge of all of your consumers to figure out what behavior makes sense.

[00:14:06] Craig Syverson
Yeah.

[00:14:06] David Hornik
You see it with aggregate knowledge and a company that’s competing with them called Lumia. And then of course, you know, StumbleUpon is really using that in the background to show you the next interesting thing across a whole range of things. And obviously Amazon was, is probably the most successful company at demonstrating. I mean, how often do you get the, hey, David, you might like this. And then you go, oh, I would like.

[00:14:29] Craig Syverson
Yeah, as a matter of fact, yeah.

[00:14:31] David Hornik
I’ll buy pots and pans.

[00:14:32] Craig Syverson
They definitely nailed the reputation system thing.

[00:14:34] David Hornik
It’s. And you know, a lot of it is about just scale, right?

[00:14:37] Craig Syverson
Yeah, absolutely.

[00:14:39] David Hornik
Enough data and data is just so powerful. I just love data.

[00:14:42] Craig Syverson
Yes.

[00:14:42] David Hornik
Have I told you how much?

[00:14:43] Craig Syverson
No, tell me how much you love data.

[00:14:45] David Hornik
The data stuff, I just love that.

[00:14:46] Craig Syverson
Yeah.

[00:14:47] David Hornik
You know, Tickle, where we had just, I don’t know, billion plus questions answered by consumers and we had the ability to help predict what behavior would track across people who answered a particular way about how they felt about cheese. Or maybe it wasn’t quite that specific except when selling cheese. I mean, it’s just amazing to think that the more data you have, the more you can leverage it to predict consumer behavior or influence consumer behavior or whatever. So I think that increasingly advertisers are going to be looking for this stuff. And so therefore the aggregate knowledges and Lumias of this world are in a great position.

[00:15:25] Craig Syverson
Yeah. Congrats to them.

[00:15:28] David Hornik
So this advertising world, boy, have you been. I mean, just.

[00:15:31] Craig Syverson
I’m definitely keeping my eye on it.

[00:15:33] David Hornik
It’s on fire. Where, where’s my advertising company? I need to sell it.

[00:15:37] Craig Syverson
I know, yeah.

[00:15:38] David Hornik
That’s crazy.

[00:15:39] Craig Syverson
Yeah.

[00:15:39] David Hornik
Well, I suppose in many ways that’s what video egg is. Right. It’s become this network. Video network, but it’s really an ad network that serves on, into these consumer networks, into the bebos and high fives, whatever, on top of video and ultimately other widgets. So, you know, hey, listen, you advertising companies, I’ll take a billion seven for video egg.

[00:16:00] Craig Syverson
Yeah, yeah.

[00:16:02] David Hornik
Billion eight, maybe.

[00:16:03] Craig Syverson
No, you’re going the wrong way.

[00:16:05] David Hornik
No, I’m just saying.

[00:16:06] Craig Syverson
Oh, you’re going up already.

[00:16:06] David Hornik
It’s crazy.

[00:16:07] Craig Syverson
You rethought it.

[00:16:07] David Hornik
It’s madness. Yeah, got 24, seven, got. You got double click and then the big double click. Competitor Microsoft. Billion dollars for those guys and one.

[00:16:20] Craig Syverson
Billion eight to bargain.

[00:16:21] David Hornik
Billion eight. I’m telling you, video eggs growing fast. That’s a, it’s awesome. I mean, I think that. And it makes perfect sense, right. Ultimately, nail down traffic, nail down understanding creation of media and creation of attention and eyeballs. Now comes advertising being got to figure out how to do a better job of serving ads and managing ads and controlling ads. And so obviously lots of the consumer companies that I look at are looking at those questions and then distribution and advertising connected. The, you know, companies that are doing that well obviously are going to do a great job.

[00:16:57] Craig Syverson
So, yeah, it’s a huge shakeup. I mean, you know, as we were working on new media and you know, we’re seeing all the different distribution platforms in a sense, like most new technologies. We worked out the geek part. Like, we’ve got all these distributed ways of getting media out there and now we’re thinking about, okay, now I need to pay for it. Right. And so in advertising, it’s starting to like do that implosion explosion sort of thing. Like we’ve got, you know, they have to rethink how they’re getting their message out. Yep, it’s a very exciting time. Really. It’s a big shift, really is from like, okay, we’ve got three networks, we’ve got these publishing houses, and we’ll just send huge chunks of money to them. It’s not that way anymore. And those of us in the smaller media realms, we’re frustrated because we’re too small to get their attention. So we need to aggregate in some way and then that becomes another network. It’s like, wait a minute, there’s got to be a different way. And I think there will be, but it’s going to take a lot more work on everyone’s part, on the advertiser’s part, to find places to put their money and for all these individual people to be professional enough to attract those advertisers. And then finding the metrics.

[00:18:00] David Hornik
Yep.

[00:18:01] Craig Syverson
And yeah, and the dirty secret is the metrics haven’t been all that great anyway. I mean, well, but you know, the.

[00:18:06] David Hornik
Flip side of that is TVs never had any metrics. Well, yeah, it’s got a pass. You know, it’s like. Yeah, well, we advertise on TV because we always have. Well, how’s that working out for you? Well, we don’t know, but.

[00:18:15] Craig Syverson
We don’t know. But we can’t stop.

[00:18:16] David Hornik
Well, how’s the Internet thing working? Well, we know it doesn’t work well because we measured it.

[00:18:19] Craig Syverson
Yeah.

[00:18:20] David Hornik
Okay, wait, stop. You know, go measure television. And by the way, you know, we’ve done an incredible job in this industry of figuring out how to make online advertising work and demonstrably work. I mean, that’s the real change. The real shift that has rejuvenated the online media space from the late 90s to now, the approaching late 2000s, is we figured out how to make really effective use of online advertising. Right. That’s just an astonishing change. So anyway, but it’s going to be an ongoing issue where small guys need to aggregate or need to figure out some unique space and the big guys have a lot of control. And you know, it’s why these endpoints you have, Yahoo. Bought it, right? Media, you know, you have all of these big endpoints buying their own media properties, their own advertising properties to try and drive more control of the ad experience. End to end ad experience, which makes perfect sense.

[00:19:15] Craig Syverson
Right.

[00:19:16] David Hornik
So I don’t blame them for doing it. I think it’s smart.

[00:19:19] Craig Syverson
Yeah. And there’s also, together with that, I also contend there’s going to be a whole new different way in which we need to approach advertising and how we consume it and how we as certainly us, as producers, deliver that to our audience. Like the eyeball tracking of websites, as the web medium has progressed and matured, eyeball tracking of banner ads is getting such that now people aren’t looking at them, we’ve tuned them out. The dancing bear is no longer so interesting. Right. It’s like you look at a webpage, you just go past the ad. So even that is becoming not as effective as it used to be. So there are ways that I’m very interested in is how I can work with my audience, which I know more intimately because I’m not that big with the advertiser and really make it work. I mean really make it work in a two way thing for both parties. That to me is what’s exciting is that we’re not going to abuse our listeners anymore or our viewers anymore.

[00:20:11] David Hornik
That’s right, you listeners, we’re not abusing you.

[00:20:14] Craig Syverson
Yeah.

[00:20:15] David Hornik
Zip it. Blast you.

[00:20:16] Craig Syverson
I hear my head now. I hear voices. Stop it.

[00:20:21] David Hornik
So I. I made the mistake of stepping into an Apple Store.

[00:20:25] Craig Syverson
Oh, did you have a credit card with you?

[00:20:28] David Hornik
You shouldn’t step in an Apple.

[00:20:29] Craig Syverson
No.

[00:20:29] David Hornik
Well, here’s why I had to step in the Apple Store. My power cord somehow got frayed and it wasn’t working.

[00:20:35] Craig Syverson
The magnetic cord.

[00:20:36] David Hornik
Yeah, the magnetic cord which. Have you ever had that happen in a single Mac power cable? I’ve never had this problem.

[00:20:43] Craig Syverson
Afraid. Cord at the end.

[00:20:44] David Hornik
Frayed cord. Based on.

[00:20:45] Craig Syverson
I’m afraid I did in a previous. In a previous one. I did.

[00:20:51] David Hornik
You did?

[00:20:51] Craig Syverson
Yes.

[00:20:51] David Hornik
All right, so maybe it’s just. I’ve just never had this problem, so had to go buy a new one. And then while I was there, I decided that, you know, the laptops that have been kind of falling apart in my boy’s room, so I bought a mini. The Mini is just such a nice little machine. Little machine. So. So relatively inexpensive. Powerful, you know, you get the screen. Boom.

[00:21:11] Craig Syverson
Just about to be upgraded. So. Good timing, David. I know you didn’t call me again.

[00:21:14] David Hornik
No, I heard that was the case, but I just didn’t. You know, you just can’t.

[00:21:18] Craig Syverson
I know, I know you can’t. It’s true.

[00:21:19] David Hornik
Particularly when you’re, you know, you’re in the Apple Store and you got, you know, money burning. It’s just burning, burning. And then, of course, while I was there, I had to buy an Apple tv because, yes, they were there.

[00:21:29] Craig Syverson
They were there. And they’re quite attractive. They’re the same size as the Mini.

[00:21:32] David Hornik
And now I have to admit, I did use my faculty discount. That’s why I teach my visit school class. I can get my Apple discount.

[00:21:45] Craig Syverson
Don’t you have to go to the Stanford bookstore?

[00:21:47] David Hornik
No, you can go to any Apple store. However, the discount is like, Yeah, I got 20 bucks off the mini.

[00:21:53] Craig Syverson
Oh, wow.

[00:21:54] David Hornik
I got 10% off the cord. And then.

[00:21:57] Craig Syverson
Okay.

[00:21:57] David Hornik
And by the way, it turns out you get nothing off of the Apple tv because apparently they can envision no academic use.

[00:22:06] Craig Syverson
Hey, I watched a list of podcasts on it.

[00:22:08] David Hornik
Yeah, exactly, exactly. Well, and I did. I hooked it up. And, you know, I got an HDMI cable and I hooked it up with. Oh, my God, that’s so awesome.

[00:22:17] Craig Syverson
Yes.

[00:22:18] David Hornik
Boom, boom. Done. One cable just comes on perfectly clean. The signals, beautiful setup was basically easy, but basically it’s a connector for your itunes. For your itunes. Yes, an itunes connector, plus a hard.

[00:22:29] Craig Syverson
Drive system, a lot of cash.

[00:22:31] David Hornik
You know, you cache Your stuff. Yeah, the hard drive, then you push it. On the other hand, it’s pretty cool. Like watch movies and you can, whatever you have on your itunes, you can listen to music now.

[00:22:39] Craig Syverson
Yeah.

[00:22:40] David Hornik
So I, I think that if Apple’s goal was to make the easiest possible experience for pushing stuff from itunes to an endpoint, that is a television set, they did it. Bing.

[00:22:51] Craig Syverson
The streaming works well for you.

[00:22:53] David Hornik
Fine. Yeah, totally fine. Everything and you couldn’t tell the difference.

[00:22:57] Craig Syverson
Yeah, that’s cool.

[00:22:58] David Hornik
And that’s over. WI fi.

[00:23:00] Craig Syverson
Yeah, that’s cool. On n. I’m sorry, that’s fine.

[00:23:04] David Hornik
But no, I’m not.

[00:23:05] Craig Syverson
I’m just regular og.

[00:23:06] David Hornik
I’m just regular og.

[00:23:08] Craig Syverson
Yeah, I hear it’s working fine on you.

[00:23:10] David Hornik
It was totally fine.

[00:23:11] Craig Syverson
Yeah.

[00:23:12] David Hornik
Even when I had the laptop with itunes downstairs and the TV upstairs and the access point somewhere in between, it was totally fine. So I thought that was cool. I think it’s step one, so limited in functionality, but if you have your entire media universe in itunes, it’s perfect.

[00:23:29] Craig Syverson
Yeah, it’s just awesome. So what are the limitations that bother you? Not that we want to go.

[00:23:34] David Hornik
I just, you know, it seemed like there was more that it could do. Like you can’t go to the store and buy stuff, you can’t, you know, it’s not fully functioning itunes and you’d think, boy, you’d like to be able to sit there and go, well, what movies are available to buy? And I’ll just buy them and then let them. While I’m buying them, they’re streaming.

[00:23:51] Craig Syverson
I see.

[00:23:51] David Hornik
You know, you can imagine that being.

[00:23:53] Craig Syverson
Whilst on the big screen experience. Yeah, yeah. Rather than having to go back to your laptop.

[00:23:56] David Hornik
So I mean, in some ways the Windows Media Home Edition is better in that respect. It really is a full featured OS with what they call the ten foot experience. You know, just a big screen, big logos and button UI and stuff. You know, my buddy Joe Belfiori over at Microsoft was the guy who originally designed some of that stuff and he’s just a great UI designer.

[00:24:20] Craig Syverson
No, it’s a beautiful.

[00:24:21] David Hornik
It’s cool, right? And the way, and the way you connect it, instead of having the Apple TV thing, you got an Xbox. Yeah, so I was thinking about that. Like that’d be great, you know, right off the Xbox.

[00:24:30] Craig Syverson
Yeah, yeah, yeah, perfectly.

[00:24:32] David Hornik
I don’t think so. I haven’t done that because two, two problems. One, you know, it’s a little bit of a stretch and two, my wife would kill me.

[00:24:40] Craig Syverson
Oh yeah, it’s a bad one.

[00:24:42] David Hornik
You Know, have the Xbox in our. In our living room.

[00:24:45] Craig Syverson
And I’d say, oh, bedroom.

[00:24:46] David Hornik
You know, it’s just a connector for the windows, you know.

[00:24:49] Craig Syverson
Yeah.

[00:24:49] David Hornik
And she. No, you got to be kidding.

[00:24:52] Craig Syverson
Yeah. You’re going to be put that.

[00:24:53] David Hornik
They can’t. It’s black and green and big X and.

[00:24:56] Craig Syverson
Yeah.

[00:24:57] David Hornik
Not happening. So not happening in my. Whereas the apple things. This pretty little silver box.

[00:25:03] Craig Syverson
Yeah.

[00:25:03] David Hornik
So I can get away with it. I had this akimbo box for a while. Really easy to set up and cool. But it basically had no content unless you really wanted lots of porn.

[00:25:13] Craig Syverson
Oh, you know. Yeah. Not good for the bedroom.

[00:25:16] David Hornik
Yeah. Or maybe. Or otherwise.

[00:25:18] Craig Syverson
Or otherwise.

[00:25:18] David Hornik
I. My wife said, what is that? I said, it’s kimbo. And she said, what’s it good for? I said, pretty much a box of porn. And she said, yes, put that away. Yeah, it needs to go, you know.

[00:25:27] Craig Syverson
Right.

[00:25:28] David Hornik
Was that your sales pitch?

[00:25:30] Craig Syverson
Yeah, yeah, yeah.

[00:25:31] David Hornik
Box is going.

[00:25:32] Craig Syverson
It didn’t work out, you know, so.

[00:25:34] David Hornik
But it’s been an interesting evolution. Right. Sling box, akimbo. You know, the Windows media, now the Apple tv. So I’m. I’m a believer. Always have been.

[00:25:44] Craig Syverson
Well, you know, it’s an ipod for a tv. Think of it that way. Don’t think of it as its own thing.

[00:25:48] David Hornik
You know, it’s great.

[00:25:49] Craig Syverson
Think of itunes as your. As your central.

[00:25:50] David Hornik
It was what, 300 bucks? 350 bucks? Yeah, it would have been 340 if I’d gotten a discount as an educator.

[00:25:58] Craig Syverson
Well, there you go. God, that was really important.

[00:26:00] David Hornik
Yeah.

[00:26:02] Craig Syverson
Well, shameless plug. I was. I got scobalized.

[00:26:06] David Hornik
Oh, yeah.

[00:26:06] Craig Syverson
He had a list of the. He asked people what the best things to put on your Apple TV were and video grunt got on there.

[00:26:11] David Hornik
Oh, nice.

[00:26:12] Craig Syverson
Which isn’t bad because video grunt still actually, I haven’t up resed it, so it’s still the super small resolution, but it actually translates. Okay, that’ll look great.

[00:26:18] David Hornik
Yeah, the stuff translates pretty well.

[00:26:20] Craig Syverson
Yeah. And I’m going to all up res the whole kit.

[00:26:23] David Hornik
It will.

[00:26:24] Craig Syverson
It’ll look better. Yes. It’s a question of how much you do it. Like there’s the Apple TV resolution and there’s the maximum ipod revolution. So I’m waiting for the iPhone, then I’ll really know the next spec.

[00:26:34] David Hornik
Speaking of which, by the way, did you hear yesterday, fcc. FCC signed off. I know you’re a fanatic. You’re sitting waiting with my. Literally yelled at me earlier because I’ve just bought a new trio. What do you. What are you doing? The iPhone’s almost here.

[00:26:49] Craig Syverson
I spotted across the room. I said that that paint is too fresh.

[00:26:52] David Hornik
That’s the trio 755.

[00:26:55] Craig Syverson
Don’t get me wrong, Trio is the best thing out there. And that in the BlackBerry. They’re doing great. But.

[00:27:00] David Hornik
But you’re waiting.

[00:27:00] Craig Syverson
Why would you buy it now? Well, of course I am.

[00:27:02] David Hornik
Because you’re psych.

[00:27:03] Craig Syverson
I’m not made of money. No, I’m not made of money like you are. Oh, Mr. 20% off.

[00:27:06] David Hornik
I’m made of money. What’s my. Do you think they’ll have an educator discount on the iPhone called a vc? Discount the vc. I know. I didn’t want to mention that I was venture capitalist. No, no, it’s. I’m a professor. It says educator right here on my Stanford id. You can. All right, Yeah, I won’t use that discount next time.

[00:27:26] Craig Syverson
No. Well, that’s okay.

[00:27:27] David Hornik
Just don’t tell Apple.

[00:27:28] Craig Syverson
Don’t tell anyone about it.

[00:27:30] David Hornik
Oh, okay. Well, no one will know. I’m sure no one listens to this, Craig, so we’re probably safe. It’s not illegal. It’s perfectly legal.

[00:27:37] Craig Syverson
And of course, yeah, let’s talk legal and ethics, Mr. Lawyer, slash VC.

[00:27:42] David Hornik
I’m not. I don’t think it’s unethical.

[00:27:44] Craig Syverson
I mean, it’s not unethical. It’s. It’s. It’s just, you know. All right, who am I to say whatever.

[00:27:49] David Hornik
You want me to pay double because I’m a vc?

[00:27:51] Craig Syverson
No, no, I’m not. I’m not in the tax the rich category. I’m just saying. You’re right. It’s okay. You’re a professor. That’s honorable. You know what, Professor? You spend a lot of time doing that service that doesn’t pay all that much, if anything, and so there you go.

[00:28:11] David Hornik
I’m trying to look out for America’s youth.

[00:28:14] Craig Syverson
If you hadn’t said that, we would have gone on. We would have transitioned.

[00:28:17] David Hornik
Well, but now, no, hey, listen. I mean, look, I’m even taking the time. I’m going to teach a class at Harvard Law School. In the winter. I’m going to fly to Boston another and hang out and. And talk with the future lawyers of America.

[00:28:32] Craig Syverson
Oh, wow, that’s. That’s touching that. The future poverty lawyers going to Harvard.

[00:28:38] David Hornik
You know, how do you. Don’t you think some of them are going to do poverty IP law?

[00:28:44] Craig Syverson
Oh, yeah, right. They should work for Gonzalez. In fact, the whole class of 82 wrote him an open letter about his recent. Did you see that?

[00:28:52] David Hornik
Dear, dear sir, are you out of your mind?

[00:28:54] Craig Syverson
There’s this document called the Constitution.

[00:28:56] David Hornik
We like it. Could you stick with it a little bit?

[00:28:59] Craig Syverson
Thought crime around copyright infringement. Did you have you followed that at all?

[00:29:02] David Hornik
Yes.

[00:29:02] Craig Syverson
Oh my God.

[00:29:03] David Hornik
Crazy. Totally ridiculous. Totally. So this is so seriously, this is why I’m going. I’m co teaching this class with John Palfrey who runs the Berkman center. And Palfrey is a great guy, he’s really smart and he is quite focused on bringing the realities of the web and web kind of architecture infrastructure and all and mixing that together with the law and legal theory and those things. And so he and I decided that it’d be fun to talk about IP law and venture capital in that context. So we’re going to talk, you know, so it’s going to be about being practical, making practical legal decisions, etc. So I think it’s going to be, first of all, it’s going to be fun. I really look forward to it. Secondly, I think it will be great for folks because I remember when I was there, you get very engrossed. Not engrossed, you get very ingrained in the minutia, like the details. You want to fight about little bits and pieces of the law.

[00:29:54] Craig Syverson
Right.

[00:29:55] David Hornik
And you know, I’m going to. That may make them crazy, but I’m going to say step out.

[00:29:59] Craig Syverson
Yeah, let’s take a wider view.

[00:30:00] David Hornik
See this thing called the Web, it’s actually the thing in which all these laws function. And so let’s think about it in that context.

[00:30:08] Craig Syverson
I just think the work that the Berkman center is doing, that Stanford’s doing and Berkeley and American University, I mean, it’s all really great, very necessary stuff around copyright and ip. It’s clearly everyone’s going crazy.

[00:30:21] David Hornik
I met today with a group from Stanford called the Codex Group. And it is the combination of law and engineering, computer science.

[00:30:29] Craig Syverson
Okay.

[00:30:30] David Hornik
So figuring out how to encode rules that are envisioned by laws in a more systematic way so that machines can strip away a bunch of the work around the applicability of zoning laws or the applicability of sets of, you know, various laws and how can you use the semantics and Semantic web to decrease the amount of difficulty in parsing these laws and those sorts of things. So really smart group of people had a great conversation. I’m going to try and get involved over there if I can.

[00:30:59] Craig Syverson
Was this related to your thing about creating the online terms of service? Yes.

[00:31:04] David Hornik
Well, you know what the interesting thing is that it wasn’t. It’s just That I started chatting with these guys. I had been working with a group at the business school that we’re working on, I think called cipx, which was a standard IP protocol, and it was originally developed as part of this Codex group. So I met with them to talk with them, and when they described what they were doing, it was a perfect analog for this terms of service issue, which is breaking down what are the defining factors of a terms of service. And therefore, by describing the service, you have then automatically generating a terms of service agreement that reflects that service. So they are going to work with me on creating the final website. Cool. And so hopefully in the near future, we’ll actually roll it out. Because it’s a great thing, this idea that if you’re a young entrepreneur and you’re putting something out there, you’re. Instead of just doing what you typically do, which is, oh, I’m going to go find a similar terms of service and just rip it off instead, you can actually describe the things you do and generate one that makes sense. And then instead of having to pay a lawyer a whole bunch of money to do it, maybe you pay a lawyer to review it.

[00:32:05] Craig Syverson
Review it.

[00:32:06] David Hornik
Does this make sense? They tweak it and you’re done.

[00:32:08] Craig Syverson
Right, right. But that’s three hours instead of 30.

[00:32:11] David Hornik
Hopefully it’s an hour. I mean, maybe it’s three if there’s something that needs changing.

[00:32:14] Craig Syverson
Yeah.

[00:32:15] David Hornik
And so. And it’s.

[00:32:16] Craig Syverson
I’m not.

[00:32:16] David Hornik
Look, I’m not interested in putting lawyers out of work. On the other hand, you know, this isn’t like the interesting, important stuff lawyers are doing. This is the stuff that you have to do to protect yourself. So hopefully we can get that nailed and we can get the site. And when we do, I will happily announce where you can go. Www.terms of service service generator. I don’t know. I should look, I should start buying some URLs.

[00:32:38] Craig Syverson
We didn’t say anything. He didn’t hear anything.

[00:32:40] David Hornik
Forget about it. Don’t be buying that.

[00:32:41] Craig Syverson
I’ll edit that.

[00:32:43] David Hornik
Whatever. Hornick said. Www.I have idea.com all right.

[00:32:49] Craig Syverson
You were at 35 minutes already.

[00:32:51] David Hornik
Seriously?

[00:32:52] Craig Syverson
Yeah, we just. We just got going.

[00:32:53] David Hornik
Oh, and you know what? My assistant, the lovely Mary, just gave me the look. Like that.

[00:32:58] Craig Syverson
I see it. That is the look.

[00:32:59] David Hornik
You’re done. In fact, you know, let’s see if we can look across. Oh, no, they didn’t put them in the.

[00:33:05] Craig Syverson
My martini glass is still in the conference room.

[00:33:06] David Hornik
That’s right.

[00:33:07] Craig Syverson
See my martini glasses?

[00:33:09] David Hornik
We gave finally Craig martinis After all.

[00:33:12] Craig Syverson
My ranting about not having martinis when I get here. Mary getting one today. It was a while back, so that’s why my species flirt.

[00:33:20] David Hornik
That’s right. We took care of that. Well, I just want to.

[00:33:23] Craig Syverson
I want to give a shout to Greg Gallant, Adventure Voice, because he did. Again, my notes are missing, but he did an interview with the gentleman who was one of the early guys in Doubleclick. And, like, this interview came out, like, the day after the announcement. It was like. It was like, perfect timing, but just another shout out for Adventure voice. It’s a great show.

[00:33:39] David Hornik
Love Venture voice.

[00:33:40] Craig Syverson
Yeah, he’s doing a great job.

[00:33:41] David Hornik
You know, Craig, I didn’t sing today, and that disappoints me.

[00:33:44] Craig Syverson
I’m sure.

[00:33:44] David Hornik
Looking for anything in particular?

[00:33:45] Craig Syverson
No, it’s fine. In fact, I think we need to wrap this up. And the time has come. All right, Whatever.

[00:33:51] David Hornik
Final curtain.

[00:33:52] Craig Syverson
Oh, my way. Right.

[00:33:54] David Hornik
Yes, exactly.

[00:33:55] Craig Syverson
Was that the Sid Vicious version?

[00:33:56] David Hornik
Yeah, right, Exactly. It wasn’t even that good.

[00:34:02] Craig Syverson
All right, we will roll because you have a meeting. It’s been a pleasure, as always. Good to catch up. And we will see you. Oh, thanks to Cash Fly.

[00:34:10] David Hornik
Cash Fly. Of course. A couple weeks in between now and the next time we get together. I will go to the Wall Street Journal conference.

[00:34:16] Craig Syverson
The D conference.

[00:34:17] David Hornik
D. All things digital.

[00:34:19] Craig Syverson
Yes. That’s a couple weeks from now, right?

[00:34:21] David Hornik
It’s from Tuesday.

[00:34:23] Craig Syverson
I’m trying to get down there, too. Be fun.

[00:34:24] David Hornik
Cool.

[00:34:25] Craig Syverson
We’ll see. All right, well, it’s in California.

[00:34:27] David Hornik
If we sit around the Aveiras, it’s held at the Four Seasons, Avier, and San Diego. Although it’s to call it San Diego is kind of a. Is a stretch because it’s in the middle of freaking nowhere.

[00:34:38] Craig Syverson
Garl’s bad.

[00:34:39] David Hornik
Take drive and drive and drive. But anyway, yeah, we could just set up shop, hang out in the. Like in the lobby. Be compelling, but just, you know, instead this time, we’ll just sit around on couches. We won’t chase people down. We’ll let them come to us. Oh, yeah. Wouldn’t that be good?

[00:34:51] Craig Syverson
We should have some sort of schwag to lure them in. We’ll think of something.

[00:34:55] David Hornik
Just. We’ll just give them. We’ll just ply them with drinks.

[00:34:58] Craig Syverson
Yes. And then promise that we’ll. We’ll. We’ll speak highly of whatever they’re doing on the podcast.

[00:35:02] David Hornik
Right, exactly. And then we will brutally dis them.

[00:35:06] Craig Syverson
When they walk away.

[00:35:07] David Hornik
Dismember their. Their. Their assertions of excellence. So those of you listening? Be sure to stop by. That’ll be festive.

[00:35:20] Craig Syverson
All right, see you there. Enough damage.

[00:35:25] Clip – Unknown Woman
All right, class. Before we go on with the next exercise, I’d like to make one of my little speeches. You’re starting a new career. It can be fun or it can be hard. It all depends on the way you look at things, your attitude. Treat others as you want to be treated. First, of course, know your job. Enjoy it. But also enjoy the people that you’re working with. Be considerate of them. Remember those simple rules of office etiquette, and you’ll get along in the business world.