Generated Transcript

[00:00:15] Craig Syverson
Welcome to Venture Cast 28. I’m Craig Syverson of Grunt Media.

[00:00:19] David Hornik
That’s it. We’re jumping right in.

[00:00:21] Craig Syverson
We’re jumping in. We’re ready to go. Are you ready?

[00:00:23] David Hornik
Yeah.

[00:00:24] Craig Syverson
All right then. You usually say.

[00:00:26] David Hornik
Oh, I’m sorry.

[00:00:27] Craig Syverson
Yes.

[00:00:28] David Hornik
And I am David Hornik from August Capital.

[00:00:31] Craig Syverson
Yes, you are.

[00:00:31] David Hornik
You just caught me by surprise.

[00:00:33] Craig Syverson
I did. I’m sitting here.

[00:00:34] David Hornik
Boom.

[00:00:35] Craig Syverson
So this, the whole thing about setting up the microphone and setting levels and.

[00:00:38] David Hornik
That, that confused me. Well, you know, people come in and do that every day here.

[00:00:42] Craig Syverson
They do?

[00:00:43] David Hornik
Yeah.

[00:00:43] Craig Syverson
Oh, I’m not, I’m just. I’m not your only media.

[00:00:46] David Hornik
Well, they just do it, you know, to make me feel comforted that it’s a Craigless day. But I.

[00:00:51] Craig Syverson
Yes. You know, get you through the day.

[00:00:53] David Hornik
Exactly.

[00:00:54] Craig Syverson
I can’t believe it’s been two weeks since we recorded.

[00:00:57] David Hornik
Me too. I was thinking about, like, what has happened. I may assume something’s happened in the.

[00:01:01] Craig Syverson
Last two weeks, but it seems like literally three days. Yeah, I mean, just. Yeah, that’s right. I went to Vegas and then I went to Monterey. So I did have. I had two conferences just in the past.

[00:01:12] David Hornik
You went to Vegas.

[00:01:13] Craig Syverson
You went to Vegas.

[00:01:14] David Hornik
You erased your short term memory.

[00:01:15] Craig Syverson
Exactly. At Blog World.

[00:01:17] David Hornik
Oh, yes, Very interesting. So I was reading Crunch Notes. Crunch Notes. It’s sort of. So originally, when Mike arrington started writing TechCrunch, he would include periodic posts that weren’t really product related or whatever. They were just Mike’s musings about things. Things. And then he decided to do the right thing, which was to say, oh, those things don’t belong on TechCrunch. And so he created this thing called Crunch Notes, which I told, you know, there are two versions of the, of the blog. There’s the Pure blog, which is, hey, you know Venture blog is just venture capital, right. You don’t. If I sneak in a reference or two to my son’s music, you know, it’s just in the. It’s always incredibly logically in the context of incredibly. Whereas others, you know, it’s. So here’s, you know, here’s travel and here books and here, whatever. So Mr. Aaron and I. And I like the purity. I really do. And so, so when Mike decided to keep TechCrunch pure, I thought, oh, that’s great.

[00:02:13] Craig Syverson
Yeah.

[00:02:13] David Hornik
And so the thing that he created that was the alternative was Crunch Notes where he puts random thoughts, largely he puts in things where he feels like someone, you know, he’s pissed off at someone and he says, like you’re stupid. Or. Or someone calls him stupid and then he defends himself. No, I’m not stupid. You are. You know, stuff like that.

[00:02:30] Craig Syverson
Stuff like that.

[00:02:31] David Hornik
So he was supposed to be at Blog, right? In theory.

[00:02:34] Craig Syverson
In theory.

[00:02:34] David Hornik
In theory, right. Arrington did not come to Blog World.

[00:02:37] Craig Syverson
Right.

[00:02:38] David Hornik
And then people beat him up about it.

[00:02:39] Craig Syverson
Right.

[00:02:40] David Hornik
And then he. And then he wrote in crunch notes, people, I never agreed to come to. To Blog World, which is very interesting. And, you know, look, Mike is not a guy who lies. He’s just not. I’ve known him, I know him well, and he’s irascible and all those things. But if he says he never. That no one had ever got him to agree that he would show up, then he didn’t.

[00:03:02] Craig Syverson
Right.

[00:03:03] David Hornik
You know, so the. This idea that he reneged and just didn’t show up despite having been put in the program, whatever, it didn’t happen. On the other hand, it doesn’t matter because he’s getting beaten up right over the fact. And then Mike’s reaction is, okay, I’m not speaking at anything anymore. Oh, you know. Cause it’s too much work anyway. And. And people are gonna. People are gonna blame me if I show up or don’t show up and stuff like that, which, you know, I don’t. Obviously, I don’t think that’s the right choice. And I think ultimately he won’t think that’s the right choice either. But it’s been very interesting. I mean, was there any. Was there any discussion of this at the event or.

[00:03:41] Craig Syverson
Yeah, well, just. I mean, people were saying, oh, I’m gonna go hear the arrogant thing. I said, he’s not here. Really? Oh, well, then. And I hung out with Leo a lot. He was going to do a panel with. With Mike. So he was. Yeah, he was bummed because he was hoping to. I mean, he likes Mike and thought it’d be fun to be on a panel with him. So. Yeah, happens sometimes. And I didn’t know the backstory, didn’t care.

[00:04:02] David Hornik
That’s the backstory again. Backstory. And it’s on crunchnotes. He is fun. I mean, I will tell you that it is fun to be on a panel with him or being moderated by him because he has. He’s looking for entertainment. So, like, when I was on a panel with a bunch of other VCs at. At, what was it, the Web2 Expo, you know, he basically went into lawyer mode to dissect the venture business and the venture capitalists, and it was very entertaining. I mean, it Was, you know, despite being under fire, where he basically objected to my business model, etc, and, you know, I tried to disabuse him of, of all of his, all of his preconceived economics lessons, etc.

[00:04:44] Craig Syverson
What’s wrong with your business model?

[00:04:45] David Hornik
What’s wrong with my business model? Well, the big question he had for the business model was one, is it unsustainable to continue to grow these giant funds in the name of management fees, which is the stuff we make that relates to how much money we’re managing? And then secondly, if we manage all this money, we will ultimately fail at making interesting investments, and therefore we will make no good money on the carry, which is the percentage of the money that we make that.

[00:05:14] Craig Syverson
Right. The profit.

[00:05:15] David Hornik
The profit. So what piece of the profit we get?

[00:05:17] Craig Syverson
So was your business.

[00:05:18] David Hornik
No, no, it wasn’t August. It wasn’t August in particular was. It was the venture business, which he was, which he felt was dying, you know, dying or whatever. And look, my feeling is the venture business should live and die by the carry, which is to say if we make money, then no one will be, no one will object to us keeping a piece of it. Right? So the problem is, to the extent that there are venture investors who are ultimately making a lot of money by virtue of managing a great deal of money and then losing it, you know, that is a black eye to the business. But, you know, there’s nothing that’s not new. There’s nothing new that either. You know, there are people who’ve always made a bunch of money for investors, and therefore no one’s ever begrudged them whatever money they made. And there are people who’ve always lost them money, and that has made people less happy.

[00:06:06] Craig Syverson
Do angel investors have a management fee?

[00:06:11] David Hornik
Well, most, most angel investors don’t have funds.

[00:06:14] Craig Syverson
They don’t have funds. They have their own funds.

[00:06:15] David Hornik
They’re very few. They use either their own money or like angel investors, or a band of angels, rather gather a group of angels. They’re a collective for the information and deal flow, et cetera. But then when they invest, they invest individually. Okay, now that recently changed with respect to Jeff Clavier, who at, at the TechCrunch 40 conference announced that he had raised a fund. So up until then he had been sort of a venture advisor and helper of startups, and he was using, to the extent he was investing, he was investing his own money and then he was investing a lot of time. And then he, then he decided to create his own fund. And in fact I think he was ultimately urged by lots of different venture capitalists to create his own fund. And he’s now affiliated with another venture fund. I’m forgetting which one. But they’re. They invested in his fund as did others, and then he’ll. He’ll presumably let them see the deals that he’s doing, etc. So now he will have a management fee on his fund, I’m sure.

[00:07:11] Craig Syverson
So it is a venture fund. He’s not an angel anymore?

[00:07:13] David Hornik
No, no. Now he’s a, you know, venture angel. I don’t know.

[00:07:16] Craig Syverson
What, I don’t know.

[00:07:17] David Hornik
Maybe what’s the institutional angel would be my guess as to how he would, how I would describe. That’s how I would describe it.

[00:07:25] Craig Syverson
Right.

[00:07:25] David Hornik
An institutional angel.

[00:07:26] Craig Syverson
Now, so just a one man band. And the fund’s probably not as big as August’s, right?

[00:07:33] David Hornik
No, it’s not. He actually says on his thing how much it is and it’s, you know, some single digits.

[00:07:38] Craig Syverson
Is it still soft tech vc, do you remember?

[00:07:40] David Hornik
Yeah, yeah.

[00:07:41] Craig Syverson
Okay.

[00:07:41] David Hornik
So he’s still soft tech vc. And then, you know, then there’s an interesting, you know, look at First Round Capital, who I do not believe have a fund, but they have a group of people. Right. So it’s. Oh, they are they. Or maybe they have, they raise money, but they do it in a, you know, on an annual basis or something. I mean, you know, I don’t know what their specific structure is, but it’s not my structure. But there’s Josh Koppelman who started it, and then there’s a group of other people, Rob Hayes out here, and Howard Morgan. There’s Chris Fralich back in New Jersey. No, they’re not in Jersey. They’re in Philadelphia. What exit Philadelphia?

[00:08:14] Craig Syverson
Yes.

[00:08:14] David Hornik
That’s where First Round is born. Did you know that?

[00:08:17] Craig Syverson
I did not. Well, yes, I knew they, I knew only Rob was out here.

[00:08:21] David Hornik
Yep.

[00:08:21] Craig Syverson
On this, on this part of the world.

[00:08:23] David Hornik
The guys back in, back in Philly.

[00:08:25] Craig Syverson
So what’s their, what’s their deal then? You’re saying they don’t, they don’t have a fund. Fund. Fund.

[00:08:30] David Hornik
Yeah, I don’t. Yeah. Again, I don’t know how the specifics work for them except to say that unlike Jeff, I haven’t heard them announce a specific institutional fund yet. They have a set of people that are engaged in. So it’s, you know, it’s a more fun like structure in terms of their organization, but they still are early stage angel investors and, you know, investing in a set of little things as opposed to a big chunk of money in some big thing.

[00:08:55] Craig Syverson
Okay. And then in the whole evolution of things, is what comes next, an incubator in terms of. Or is that a totally different thing?

[00:09:03] David Hornik
First comes love, then comes marriage, then comes an incubator in the baby carriage.

[00:09:07] Craig Syverson
Yes, something like that.

[00:09:10] David Hornik
It could be. I mean, there are some suggestions of.

[00:09:13] Craig Syverson
That happening again, but what does an incubator do then?

[00:09:16] David Hornik
Well, the theory of an incubator is that a certain set of resources can be shared that makes it easier to start companies. So legal and finance and. And HR and, you know, all the thing and space and I t. All that stuff sort of sits in a central location. And you say, hey, I want to get going. You come to the incubator, you get some money, you get these resources to kind of help you get off the ground, and then presumably you eventually, then, you know, leave the nest and launch to create your own company.

[00:09:46] Craig Syverson
When you say get some money, do you get some.

[00:09:48] David Hornik
Yeah, oftentimes. Oftentimes incubators include funding. So early. Early kind of angel funding.

[00:09:54] Craig Syverson
Okay.

[00:09:54] David Hornik
So you get funding and resources in exchange for, you know, in exchange for equity. And. And then the assumption is then you go off and you go build a business independently and raise venture money, etc. And succeed.

[00:10:08] Craig Syverson
Hmm. Got it.

[00:10:09] David Hornik
So that’s the. That’s that whole thing.

[00:10:12] Craig Syverson
So now what about these rumors that Walter Mondale is. Is going to join August Capital?

[00:10:17] David Hornik
Yeah. What. Why would you give us Fritz Mondale?

[00:10:22] Craig Syverson
Fritz. He’s Norwegian. He’s got to be good.

[00:10:26] David Hornik
JFK is who’s joining.

[00:10:30] Craig Syverson
No longer alive.

[00:10:31] David Hornik
No, actually, we were. We were talking at our strategy meeting recently. It was actually this Monday when they announced that Kleiner had Mr. Gore. Al Gore joining the firm. And I was saying, gee, you know, you got. You got Al Gore at Kleiner, then you got Bono doing this. This other venture firm and that. I thought maybe we should go with Madonna. You know, I understand her to be quite tech savvy. She has only the latest wireless microphones, which you emulate. Well, so anyway, no, we. There will be no celebrities joining August Capital in the near term. Sorry.

[00:11:10] Craig Syverson
Yes. I’m disappointed.

[00:11:12] David Hornik
We are. We’re missing out. We’re missing out. You know, what do you think of that? You’re an entrepreneur. Does that make you more inclined to go to Kleiner to get money?

[00:11:22] Craig Syverson
Well, Kleiner’s always been Kleiner, you know, sort of the floats and. Yeah. So I think if I were a bigger entrepreneur. Yeah, probably. I’d probably like, be into the Gore thing.

[00:11:35] David Hornik
Yeah.

[00:11:35] Craig Syverson
But As a little guy now, it doesn’t make any difference.

[00:11:37] David Hornik
Kleiner is untouchable regardless, so who cares?

[00:11:41] Craig Syverson
Yeah, it’s. It’s all abstract to me.

[00:11:44] David Hornik
Well, the interesting thing about Kleiner is unless you’re doing green tech now, it’s. There’s no point in talking with them because they’ve made a strategic decision to go, do you know, green and clean? Green and clean. Clean and green.

[00:11:56] Craig Syverson
No, it makes. It makes.

[00:11:56] David Hornik
It sounds like a detergent. I’m not saying that Kleiner’s investing.

[00:12:01] Craig Syverson
No, no.

[00:12:02] David Hornik
But maybe green.

[00:12:03] Craig Syverson
Let’s get off your soapbox, David.

[00:12:06] David Hornik
But seriously.

[00:12:07] Craig Syverson
Yes.

[00:12:08] David Hornik
Oh, my God.

[00:12:09] Craig Syverson
Yeah. I was reading somewhere where some guy was saying, yeah, you know, Web 2.0 is no longer cool. Now they’re just doing green. It was vc.

[00:12:16] David Hornik
Right.

[00:12:16] Craig Syverson
But, you know, it’s not enough. No, you haven’t.

[00:12:18] David Hornik
No. Bring. You know what? Bring me web 4.0. That’s what I’m looking for. Thinking 4.0.

[00:12:24] Craig Syverson
That’s what. Those guys down the road, who are the spook agency. Yeah, who are they? The investors for the CIA.

[00:12:32] David Hornik
Oh, my God. In Q Tel. Thank you.

[00:12:33] Craig Syverson
Yes. Right.

[00:12:34] David Hornik
You think that’s what in Q Tel.

[00:12:35] Craig Syverson
Is doing web 4.0?

[00:12:36] David Hornik
Don’t you think 4.0 is good? Because 4.0 is like perfect score.

[00:12:41] Craig Syverson
Oh, yeah.

[00:12:41] David Hornik
You know, unless you went to MIT, then you needed a 5.0.

[00:12:45] Craig Syverson
They’re always so much harder there.

[00:12:46] David Hornik
Why?

[00:12:47] Craig Syverson
Yeah, it’s like they go to 11.

[00:12:49] David Hornik
Yeah. How much louder could it be? And the answer is none.

[00:12:52] Craig Syverson
Not at all.

[00:12:54] David Hornik
How much better grades could you get? None better.

[00:12:56] Craig Syverson
You can get 25%. Wait. Yeah, yeah. Goes that way. 25%. I always get confused. You go back, you go forward.

[00:13:05] David Hornik
No, that’s. That’s not it. You’re shuffling papers as if to say you have topics for us to discuss.

[00:13:12] Craig Syverson
Well, I’ve just looked over some things.

[00:13:14] David Hornik
I appreciate.

[00:13:14] Craig Syverson
I actually found, interestingly, that there was a lot of little media companies. This is sort of in the little media companies. Fortnite.

[00:13:21] David Hornik
Oh, yes.

[00:13:22] Craig Syverson
And actually content companies, believe it or nay.

[00:13:25] David Hornik
That’s true. Is this new movie production group is.

[00:13:29] Craig Syverson
That’s one of them. That was. What are they called? I didn’t print that one out.

[00:13:34] David Hornik
I don’t know what you’re talking about.

[00:13:35] Craig Syverson
No, the movie company. The movie studio esque thing down there.

[00:13:38] David Hornik
Yes, exactly. Started by one of the guys from Ignition Partners. I guess he was an EIR or something, and then he hooked up with a movie with a guy who produced a bunch of things. It was funny. What they said was basically, look, we’re going to create this smallish studio. We’re going to produce independents, we’re going to actually produce them, but we’re also going to look for. We’ll distribute other people’s. And we want to be the Napoleon Dynamite studio.

[00:14:04] Craig Syverson
Yes. Right.

[00:14:05] David Hornik
That’s basically, you know, look, if you make the next Napoleon Dynamite, we want to. We want to distribute it or we want to produce it or whatever, which I can appreciate that.

[00:14:12] Craig Syverson
Yeah. No, it’s not bad.

[00:14:13] David Hornik
I enjoy. I enjoyed the Napoleon Dynamite. In fact, my son, while he was briefly ill and in the hospital, we got Napoleon Dynamite and watched it twice.

[00:14:23] Craig Syverson
Wow.

[00:14:24] David Hornik
And it was really funny. Although he was not. While he was in the hospital, he wasn’t allowed to eat.

[00:14:29] Craig Syverson
Oh.

[00:14:30] David Hornik
And so the problem with Napoleon Dynamite was that there’s all sorts of random.

[00:14:35] Craig Syverson
Food snacking a go go.

[00:14:36] David Hornik
Yeah. On the other hand, it’s all disgusting. So I knew that my son really hungry because every time they showed something, you’d be like, ooh, nachos. Be like, oh, give me a break. That’s. If that’s appealing to you, we need to get you food, because that’s ridiculous. You know, give me a tot.

[00:14:54] Craig Syverson
Give me a promo.

[00:14:56] David Hornik
All right. So that was not where you were going, though, was it?

[00:14:58] Craig Syverson
No, no. It’s like, I don’t care where I’m going. I’m going nowhere. Today it suddenly got cloudy.

[00:15:03] David Hornik
We’re on the road to nowhere.

[00:15:07] Craig Syverson
Friday afternoon.

[00:15:07] David Hornik
We’re like daylight savings time. Or is it losing time? What is it called when.

[00:15:12] Craig Syverson
Yeah, we lost it?

[00:15:13] David Hornik
Dark.

[00:15:14] Craig Syverson
It just seems like 4 o’. Clock. It’s like, am I too late? Is it over? Is the day over? Where is it? Everybody must have gone home, which they have around here. You guys, your partners. Anyway, they’re never here on Fridays.

[00:15:25] David Hornik
These lambasting the work ethic of the venture business.

[00:15:29] Craig Syverson
That’s necessary. Ethic.

[00:15:30] David Hornik
It’s just presence, observation. That’s right. They must all be working from home.

[00:15:36] Craig Syverson
Yes, that’s it. They’re telecommuting.

[00:15:39] David Hornik
Well, I can assure you they’re busily earning money for management. Listen, get that stinger off of me.

[00:15:50] Craig Syverson
So, mahalo. Raised some more money.

[00:15:52] David Hornik
Are you kidding me?

[00:15:53] Craig Syverson
No.

[00:15:54] David Hornik
Why? Did they go through their first money?

[00:15:57] Craig Syverson
No, he just won a little backup.

[00:15:58] David Hornik
A bank. Say how much?

[00:15:59] Craig Syverson
20 million.

[00:16:00] David Hornik
20 more million.

[00:16:01] Craig Syverson
See?

[00:16:03] David Hornik
To back up, how much did they raise the first time? 25 or something. Right.

[00:16:06] Craig Syverson
Stand by.

[00:16:07] David Hornik
Reading. He’s reading.

[00:16:09] Craig Syverson
It’s not on this. This report.

[00:16:11] David Hornik
I don’t even think they truthfully.

[00:16:13] Craig Syverson
Yeah, no, they don’t really need it, but they wanted a little backup. And then, you know, this cha cha just got 10 million more. So you got to look out for them. There’s human powered researchers.

[00:16:26] David Hornik
Those 20 more million who’d Mahalo great get their 20 million from?

[00:16:29] Craig Syverson
Probably. Where was. Where was he before Sequoia.

[00:16:32] David Hornik
Three guys, the same people.

[00:16:34] Craig Syverson
Sequoia News Corp. CBS, PayPal. Well, Elon, those are all the people.

[00:16:38] David Hornik
There gave him more.

[00:16:39] Craig Syverson
And Cuban. Mark Cuban.

[00:16:42] David Hornik
Just because. For the fun of it, like, here’s some more money. He’s Calcanus burnt through it.

[00:16:46] Craig Syverson
He did not burn through it.

[00:16:47] David Hornik
What do you do? He used it to buy bulldog puppies.

[00:16:50] Craig Syverson
No.

[00:16:50] David Hornik
How much did those bulldog puppies cost? No, he flew all the way to Florida to get them.

[00:16:55] Craig Syverson
Well, that’s.

[00:16:56] David Hornik
They must be expensive puppies there in Florida.

[00:16:59] Craig Syverson
I don’t think you can expense that. This is a.

[00:17:02] David Hornik
He’s a business or 6 million. You can’t expense 12 million bucks for two puppies. You don’t think that was it? You know what I’m going to do while we. While we have this conversation? I’m going to go look up bulldog puppies on Mahalo. Let’s see if.

[00:17:15] Craig Syverson
I think it’s a slow news week.

[00:17:17] David Hornik
Let’s see if he’s made.

[00:17:18] Craig Syverson
Let’s see if he has a. If he has a human search.

[00:17:20] David Hornik
Yeah, I want to see if he’s created a search result for Bulldog. I bet you he has.

[00:17:24] Craig Syverson
He’s probably one of the first.

[00:17:25] David Hornik
He must have done that because, you know, mahalo dot com.

[00:17:30] Craig Syverson
I’m gonna see if I have that print out of.

[00:17:32] David Hornik
Yeah. What else have you got? While we.

[00:17:33] Craig Syverson
While you do.

[00:17:34] David Hornik
This is fascinating radio, by the way.

[00:17:35] Craig Syverson
Yeah, this.

[00:17:36] David Hornik
This means typing you. Oh, look at. Celebrity gossip is a big chunk of Mahalo. I haven’t been to the homepage here.

[00:17:43] Craig Syverson
And by the way, and Veronica’s launched her show Mahalo Daily video podcast.

[00:17:48] David Hornik
Yes, I watched. Did you watch the first one on.

[00:17:49] Craig Syverson
Which is funny.

[00:17:50] David Hornik
On Tesla. Right? Oh, you watched that one.

[00:17:53] Craig Syverson
I haven’t seen that one. I missed that one for some reason. Yeah, see, that was my former client.

[00:17:57] David Hornik
Look. I know exactly.

[00:17:58] Craig Syverson
Nice.

[00:17:59] David Hornik
Sexiest Man Alive 2007. I got distracted from bulldogs because I had to go to the page. Would you go to Sexiest Man Alive news?

[00:18:06] Craig Syverson
We’re losing the branching tree of your distraction.

[00:18:08] David Hornik
No, literally, sexy Man Alive. That’s what Mahalo has brought us. Bulldog.

[00:18:14] Craig Syverson
I’m sure it’s a special kind of bulldog that he has. You Just.

[00:18:17] David Hornik
Oh, yes, he does. You’re right, he does. It’s here. But this is the one. In fact, who knows? Maybe this is his fun facts. The bulldog is also referred to as the English bulldog in the United States.

[00:18:27] Craig Syverson
Oh, yeah, it was the French bulldog.

[00:18:29] David Hornik
No, no, he is the English bulldog. That’s very nice. Is it actually quite a good. So there was a page, quite a large page.

[00:18:37] Craig Syverson
Yes.

[00:18:38] David Hornik
Bulldog history trivia and other fun stuff. Bullwrinkle.com. did you know there was a site Bull Wrinkle, like bullwinkle, but it’s bullwrinkle.com. i’m guessing that’s a, you know, site about bulldogs.

[00:18:49] Craig Syverson
I would guess with their wrinkly skin. That’s that Chinese dog, though.

[00:18:52] David Hornik
That’s the Shar Pei Sharp. I’m guessing that we could, you know, we could look at the Shar Pei.

[00:18:57] Craig Syverson
I think maybe we should not. What happens is back to. Let’s get back to our audience.

[00:19:01] David Hornik
Okay, sorry.

[00:19:02] Craig Syverson
Giga Ohm got some more money.

[00:19:04] David Hornik
Yes, again, this is a trend. This is this weird trend. Maybe we should discuss this. This is this weird trend because Giga Ohm got money from True Ventures. Again, more money from his existing investors. Now, it used to be the case, by the way, that if you. This is called an inside round when you get money from your existing investors. Yeah, it’s called an inside round, meaning that the insiders provide the money for the round. And it used to be the case that when you did an inside round, it was an indicator that you couldn’t find, couldn’t raise money elsewhere. So an inside round was, it was a negative indicator because it was like, oh, you could, you went out to the marketplace. Nobody else wanted to invest, but your investors, you know, wanted you to continue on or whatever. And so, you know, it’s not necessarily hugely negative. I’m just saying that sometimes, you know.

[00:19:48] Craig Syverson
Out of desperation, the insiders say, well, we’ll at least give it more money to see if it’s.

[00:19:52] David Hornik
We’ll give you a little more money. Keep, keep the business going because we’re not ready to call it quits yet.

[00:19:56] Craig Syverson
Right.

[00:19:56] David Hornik
But in both of these instances, it just doesn’t feel like that. It doesn’t feel like they burnt through all the money. And it was like, well, we’re going to close down the business or you give us money. It was, you know, no, we’re excited about what’s happening and we want to continue to support it. And, you know, I’ve seen this in other financings, my own companies and my firm’s companies where the company is doing really well.

[00:20:17] Craig Syverson
Yeah.

[00:20:17] David Hornik
And there’s a lot of interest from outsiders to fund it. On the other hand, you say, well, gee, you know, I’m pretty excited about it too. And, and if it were to come to me independently, I would want to fund it. So why don’t I just put more of my own money in?

[00:20:28] Craig Syverson
Are there any such things as rights of first refusal on, like, first rounds were kind of like what Charles Ventures doing with their.

[00:20:35] David Hornik
Yeah. So. So almost all venture investments include some sort of right of first refusal, but what they don’t include is a right of first refusal on all of it. Right. What they typically do is they include a right of first refusal on your pro rata percentage of the deal. So if you own a quarter of the company and you go and raise money, it basically says, oh, you know, you get to also buy a quarter of this round as well so that you can stay owning a quarter of the company. Even we though we raise more money.

[00:21:03] Craig Syverson
Okay.

[00:21:04] David Hornik
And then the big question is sort of how do you define a quarter? Is it, you know, et cetera, et cetera? But that’s, that’s a typical right of first refusal.

[00:21:10] Craig Syverson
And is it. Is it typically a part of an agreement?

[00:21:12] David Hornik
Yeah, absolutely. It’s part of the financing agreements. And actually have to get. Got to get fresh on this stuff, Craig. I’m teaching it. Teaching it in January. Entrepreneurship and venture capital is what I’m teaching.

[00:21:24] Craig Syverson
Are you really?

[00:21:24] David Hornik
Yes.

[00:21:25] Craig Syverson
Oh, I got to sit in on those. One of those classes. Well, maybe we’ll do a show there.

[00:21:28] David Hornik
It’s. It’s at Harvard, so you’re gonna have to fly to Harvard. You can fly. You want a podcast from.

[00:21:34] Craig Syverson
We should.

[00:21:35] David Hornik
It’s a law school class. Be pretty good to podcast my. My Harvard law class. That’d be good. You’re on.

[00:21:41] Craig Syverson
All right.

[00:21:42] David Hornik
The week of the 7th and the week of the 14th of January. I’ll be there.

[00:21:46] Craig Syverson
I’m not going to be there on the 14th. Man. Mac World, baby. You’re going to miss Macworld.

[00:21:52] David Hornik
Yeah.

[00:21:53] Craig Syverson
Oh, no, it’s a bummer.

[00:21:54] David Hornik
That is a bummer.

[00:21:55] Craig Syverson
There was a. There wasn’t.

[00:21:56] David Hornik
They’re going to do anything interesting this.

[00:21:57] Craig Syverson
Well, we are the. Alex at Pixel Core. We got the. We’ve got a podcasting thing going on.

[00:22:03] David Hornik
Oh, yes.

[00:22:03] Craig Syverson
Whole huge section. And I was even thinking you and I might have done a show there. Well, now that’s not going to happen live.

[00:22:10] David Hornik
That would have been. Yeah, we’ve never done live.

[00:22:14] Craig Syverson
Yeah. Anyway, we digress. Yet again.

[00:22:17] David Hornik
But I think. You know what, here’s. Have I mentioned this on Venture Cast before, that I’m. I’m really hopeful that Apple has a touchscreen MacBook.

[00:22:27] Craig Syverson
You haven’t mentioned it, but I would.

[00:22:29] David Hornik
Like a touchscreen MacBook because I really like kind of the gestural stuff of the iPhone. And I think it would be great to, you know, imagine the browser on the I photo with the same kind of gestural zoom in, zoom out, and flip between songs. All that stuff I think would work beautifully on a. On a laptop.

[00:22:46] Craig Syverson
I’m already doing it. So I have a lot of fingerprints.

[00:22:48] David Hornik
On my lap and nothing happens.

[00:22:50] Craig Syverson
Nothing happens.

[00:22:51] David Hornik
I agree with you. That is a tendency where you go.

[00:22:54] Craig Syverson
Oh, wait a minute, useless. I would even. Wouldn’t mind. I know I’m probably the only person who would want this, but I use a tablet as, you know, a pen tablet. I wouldn’t mind that to be a touchscreen.

[00:23:05] David Hornik
That seems like you could do that.

[00:23:07] Craig Syverson
Yeah. Shouldn’t be too hard. But it’s yet another separation. But at least to keep the fingerprints off. Or both. Let’s have both. So you need to bone up on entrepreneurialism. You were saying?

[00:23:18] David Hornik
Yeah, I got to. Well, first of all, I have to figure out what I’m teaching that’s helpful, especially, you know, write a syllabus that’s.

[00:23:24] Craig Syverson
Always interesting because this isn’t Harvard Community College we’re talking about.

[00:23:28] David Hornik
You know, actually, you guys might want.

[00:23:30] Craig Syverson
To take this seriously.

[00:23:31] David Hornik
No, that’s right. These, you know, I have. It’ll be very interesting to see the difference between the Stanford Business School students and the Harvard Law School students.

[00:23:39] Craig Syverson
Don’t think that probably won’t be much different.

[00:23:41] David Hornik
Yeah, no, they’ll be. They’ll be exactly the same. I’m sure, unfortunately for them, I will be teaching them in the same way. Oh, so we’ll see who is. Who reacts more negatively.

[00:23:52] Craig Syverson
Yes.

[00:23:53] David Hornik
To this.

[00:23:54] Craig Syverson
Well, you have homeschool advantage at least.

[00:23:57] David Hornik
Yeah.

[00:23:57] Craig Syverson
In both places, I guess. But. Yeah, but I mean, you’re an east coaster, so they might. They might get you.

[00:24:03] David Hornik
All right, well, we’ll see. I’ll let you know.

[00:24:05] Craig Syverson
Yep. Or I might be there. All right.

[00:24:06] David Hornik
Yeah. The week of the 7th.

[00:24:07] Craig Syverson
Okay. On network’s Got Money. Do you know on networks?

[00:24:12] David Hornik
No, talk to me.

[00:24:13] Craig Syverson
I know them because my good colleagues produce shows for them and they’re a company out of Austin that’s doing high definition programming online. All right.

[00:24:21] David Hornik
Online. High def.

[00:24:22] Craig Syverson
Online. High def. High quality stuff.

[00:24:24] David Hornik
Yep.

[00:24:25] Craig Syverson
Got series B of 12 million, which is Very cool. So again, it’s just like the more and more of these companies that are content based starting to get. I don’t think it’s related to the writer strike. I really don’t. That would be too trendoid. It’s really about infrastructures kind of.

[00:24:39] David Hornik
It can’t happen that quickly. Yeah, it’s really can, but here. So this is actually interesting and given, given these, these particular investments and whatever. I had a conversation today with a gentleman at hbo. So he’s looking at HBO Digital and thinking about how, you know what to do about hbo. And the problem HBO has in a different way from say NBC going Interactive or CBS going Interactive is that, you know, their stuff is already pay is for pay, right. You subscribe to it.

[00:25:07] Craig Syverson
Yeah, right.

[00:25:07] David Hornik
So for a CBS like, okay, well, we get paid by advertising on the television. Now we’ll do hyper distribution and it’ll be somewhere else and we’ll get paid on advertising. But for HBO to open it up online, you know, talk about a problem, a challenge for their online subscription business.

[00:25:25] Craig Syverson
So mean to get paid on it or what?

[00:25:27] David Hornik
Well, yeah, maybe you could create an online subscription business, right?

[00:25:31] Craig Syverson
Yeah, people have done it.

[00:25:32] David Hornik
And so that’s what we. So we were talking about this. So you know, we’re chatting about and this gentleman asked me, so, you know, do you see any analogous businesses, etc. And so I started thinking about it, right? We had the New York Times and Wall Street Journal. They were paid for content. Well, New York Times isn’t Wall Street Journal. Looks like it’s going, possibly going away. Probably going away.

[00:25:54] Craig Syverson
Rupert’s been, you know, using that.

[00:25:56] David Hornik
So now we got Zagat. Still. Still have to pay for Zagat. I don’t know why they did that. They had a huge opportunity to use that as a lever to become TripAdvisor or one of these other bigger and more interesting businesses. But instead they’ve held steady to this little stream of money.

[00:26:13] Craig Syverson
Is it little?

[00:26:14] David Hornik
You know, relatively little. I mean, we’re not talking about hundreds of millions. And then Consumer Reports, which is another one that has steadily held. I remember when I was out when I had babies and I needed the latest stuff on car seats or whatever, I didn’t, certainly didn’t go to a store and buy the car seat, the baby guide. So I have to go on to online.

[00:26:34] Craig Syverson
Yeah.

[00:26:34] David Hornik
And I’d have to buy my subscription to Consumer Reports Online and all that.

[00:26:39] Craig Syverson
$2, right.

[00:26:40] David Hornik
So what? But yeah, they forget. You forget to get. Stop it. I did four and then it’s six. Right?

[00:26:46] Craig Syverson
I know. I did the same thing with Consumer Reports.

[00:26:48] David Hornik
Yeah, exactly.

[00:26:49] Craig Syverson
It’s like months go by, which is part of the.

[00:26:52] David Hornik
Yeah, that’s part of their model.

[00:26:53] Craig Syverson
But then it’s busy. It’s also them. And I didn’t really mine. Yes, yes, I liked giving them money, so.

[00:26:59] David Hornik
But, but I did come up with a business. You did an extraordinarily analogous business.

[00:27:03] Craig Syverson
You heard it here first.

[00:27:05] David Hornik
And what, what do you suppose that was, Craig?

[00:27:07] Craig Syverson
Online micropayments. Dun dun dun dun.

[00:27:10] David Hornik
The adult entertainment business.

[00:27:12] Craig Syverson
Oh, you know, you can make money. What.

[00:27:14] David Hornik
Where is, where is all of this subscription revenue in the online world coming from? You know, like by a huge percentage. It’s the online adult business. So then we had this very interesting conversation about what were the, what were the causes of that? Was it because there were fewer distribution channels and therefore you could charge for it, or was it uniquely compelling, you know, or whatever. Right. So that. I thought that was pretty. A pretty interesting. Interesting conversation. Then it got me to musing and you know, you’re not supposed to, apparently you’re not supposed to muse about the adult business, so I’m not, I wasn’t really. Let’s just pretend I wasn’t.

[00:27:52] Craig Syverson
Okay, you were not.

[00:27:53] David Hornik
But if I had been, I then thought about this question, which is, you know, there’s a whole hullabaloo, right, about how did you. How is YouTube affecting the professional content business? As things are illegally migrating onto YouTube as a. And it’s not really as a distribution system for other places, it’s really about keeping traffic on YouTube, et cetera.

[00:28:16] Craig Syverson
Right.

[00:28:18] David Hornik
So I’m not sure if you’re aware of this, but there’s a thing called pornotube.

[00:28:22] Craig Syverson
Yeah, I’ve heard of it.

[00:28:23] David Hornik
So this thing, pornotube. And so how is it, is it impacting, do you think? You know, we don’t have any statistics. I get lots of statistics about the, about the non adult world. And yet, you know, the adult world is a huge innovator in the online world. And they’re usually first, they’re usually the best at it.

[00:28:41] Craig Syverson
Right. In media in general. I mean, we talk about it regularly on this Week in Media, my new media show. We were always, believe it or not, we’re always talking about porn, the porn industry.

[00:28:50] David Hornik
I believe it, Craig. Every time I talk to you, it’s porn.

[00:28:54] Craig Syverson
I know, I know, I gotta stop. But they are a harbinger of methods. VHS is here because of them.

[00:29:02] David Hornik
Yep. All sorts of formats.

[00:29:05] Craig Syverson
Yeah. So it’s always interesting to see kind of what’s happening on that front?

[00:29:09] David Hornik
So anyway, so I recommended to the, to the guy from, from HBO that he should spend some time with the adult industry, which by the way, you need. You’re supposed to call it the adult entertainment industry. Or apparently they now prefer the entertainment industry.

[00:29:25] Craig Syverson
They are part of the entertainment.

[00:29:26] David Hornik
They prefer that you describe it as. Talk about. Oh yeah, we service the entertainment industry. Cut out the adult.

[00:29:35] Craig Syverson
Yeah, right.

[00:29:36] David Hornik
Not porn, Craig.

[00:29:37] Craig Syverson
No, no, no, not prawn.

[00:29:39] David Hornik
Because that’s derogatory and you know, they got to make a living like anyone else.

[00:29:45] Craig Syverson
On that derogatory note, I highly commend people to go to the Onion and see. And see a recent report they had on the entertainment industry, the one of which we are describing.

[00:29:57] David Hornik
Oh, okay.

[00:29:57] Craig Syverson
It’s a few weeks ago. It’s a news report they did. It is absolutely hilarious. Not for your children.

[00:30:03] David Hornik
Yeah, skip the children.

[00:30:04] Craig Syverson
But it is unbelievably funny.

[00:30:06] David Hornik
All right.

[00:30:07] Craig Syverson
Almost as funny as the duly noted Congress trying to pass a law where universities have to enforce illegal P2P downloads.

[00:30:14] David Hornik
Or is that right? They have to act independently and be sure to stop ill behaved students or.

[00:30:23] Craig Syverson
They won’t get federal funding for student loans. Yeah, you know what have you heard about this bill? I mean this is. It’s a part of a big education bill. It is unbelievable. Unbelievable that, you know, it’s buried in page 463 out of 700. But it’s like, you know, universities now shall become the cops for the enforcement.

[00:30:43] David Hornik
Agency for the riaa.

[00:30:45] Craig Syverson
Right. And if not, then the federal government will pull your.

[00:30:49] David Hornik
How do you think that ended up.

[00:30:51] Craig Syverson
In the bill, I wonder? Some people who went to the lobby, some lobbyist.

[00:30:58] David Hornik
It’s crazy madness.

[00:31:00] Craig Syverson
And, and unfortunately we were all up in arms about it past couple days and then heard again today that it’s now got through committee.

[00:31:08] David Hornik
Craig, Craig, can’t. You’re not. You’re not in college anymore, so why do you care?

[00:31:13] Craig Syverson
Yeah, that’s right. 39 minutes and counting.

[00:31:16] David Hornik
You know, this is. I think it’s. I think it’s a slow news day. Unless you got something good.

[00:31:21] Craig Syverson
I got something boring.

[00:31:22] David Hornik
Oh yeah, let’s do that one then.

[00:31:23] Craig Syverson
I don’t know if it’s boring, actually. I haven’t read it enough to know, but IBM. Well, no, I know.

[00:31:28] David Hornik
This is your preparation. You print things that you haven’t read and that may be boring.

[00:31:33] Craig Syverson
Well, they’re boring because I can’t. I can’t comment on it yet. All right, what’s the but it’s an interesting report that I want to read.

[00:31:39] David Hornik
Yes.

[00:31:40] Craig Syverson
That IBM, IBM Media and Entertainment, did a survey about advertising.

[00:31:46] David Hornik
IBM Media and Entertainment. Isn’t that an oxymoronic statement?

[00:31:50] Craig Syverson
No. Why IBM? They’re cool now. Oh. They’re hip. They’re cool. They’re doing a lot of cool studies. No, they’re really doing great. Basically, they’re saying advertising is. Is being flipped on its head.

[00:32:03] David Hornik
You don’t know. You didn’t read it?

[00:32:05] Craig Syverson
Well, I don’t.

[00:32:05] David Hornik
I come back in two weeks, we expect a report on that study.

[00:32:08] Craig Syverson
Yes, sir. But that’s my feeling, basically. When I skimmed it, this was all the stuff that I said before. That’s all I got to say. Yeah, I’m just. I’m a genius that way. Years ago, you heard it here always.

[00:32:21] David Hornik
You always knew it to be the case.

[00:32:23] Craig Syverson
Yep. It’s all. It’s all the time.

[00:32:25] David Hornik
Oh, wait. I have some interesting stuff.

[00:32:26] Craig Syverson
Good. Blowtorch was the name of that studio, by the way.

[00:32:29] David Hornik
What’s that?

[00:32:29] Craig Syverson
Low Torch was the name of that studio.

[00:32:31] David Hornik
Blowtorch. Thank you.

[00:32:32] Craig Syverson
Hollywood Studio.

[00:32:33] David Hornik
Thank you.

[00:32:34] Craig Syverson
Thank you.

[00:32:34] David Hornik
So I got to chat with some of the Akamai guys yesterday, and we were just talking about kind of the things that Akamai is doing and the Akamai world, etc. And listen to this. These guys say that their Edge network touches every web user in the country. In this country. Every day. Every day. Their web touches every. And that every web user in the world touches their system at least once a week.

[00:33:10] Craig Syverson
Mm.

[00:33:12] David Hornik
That’s astonishing.

[00:33:13] Craig Syverson
Yeah.

[00:33:14] David Hornik
And they also told me something, how much traffic they have. And their traffic is just crazy. I’ll have to see if I can find that while we chat here.

[00:33:20] Craig Syverson
For those of you who don’t know, Akamai is known as a cdn.

[00:33:23] David Hornik
Oh, yes.

[00:33:24] Craig Syverson
Content delivery network. So they are. They. They. They spit files out quite aggressively.

[00:33:33] David Hornik
That’s. That’s. Well, that’s your assessment.

[00:33:35] Craig Syverson
Is it? That. That’s my. That’s my, you know, quick and down and dirty definition where this.

[00:33:39] David Hornik
I’m in the wrong thing here because I just found a piece of music.

[00:33:42] Craig Syverson
When we praise Cash Fly, that is our cdn, which would. Could be considered a competitor to Akamai, Just like an ant would be considered a animal compared to an elephant.

[00:33:52] David Hornik
Yeah, right. Exactly. It is a competitor scale in a little vertical. Yeah, but.

[00:33:59] Craig Syverson
Yeah, but Occam is the engine behind here. It is.

[00:34:02] David Hornik
So here’s the other.

[00:34:03] Craig Syverson
The itunes store. Right.

[00:34:04] David Hornik
Okay, here’s the other one. Okay. I’ll tell you this. 240,000,000 unique IP addresses a day. 240,000,000, unique IP addresses a day. How many hits a day to the Akamai cdn? How many pages are requested. Oh, from their network today? Two billion. Is your. Yes. If I told you higher, what would you say?

[00:34:32] Craig Syverson
I would say 2.1 billion.

[00:34:35] David Hornik
I would say 300 billion hits a day.

[00:34:41] Craig Syverson
Wow.

[00:34:41] David Hornik
Holy cow.

[00:34:43] Craig Syverson
Wow.

[00:34:43] David Hornik
Isn’t that cool? That. That was amazing.

[00:34:47] Craig Syverson
It is amazing. How do you even calculate that?

[00:34:49] David Hornik
Yeah, 300 billion. And they were talking about how busy, you know. Oh, yeah, it’s a whole lot of data, etc. And you know what I told them they needed splunk. Yes, that’s what I told them. Because you know what a good VC.

[00:35:02] Craig Syverson
Should always do is pitch your.

[00:35:03] David Hornik
Pitch your portfolio. Companies in this instance, actually, they really do need spot, but I mean, I was shamelessly pitching it Anyway.

[00:35:11] Craig Syverson
That’s right.

[00:35:12] David Hornik
300 billion. I think that’s really just incredibly cool. So here’s the other interesting thing, right. About the Akamai cdn. Now I’m like a commercial for Akamai, brought to you by Akamai.

[00:35:22] Craig Syverson
No, it’s not.

[00:35:23] David Hornik
It’s not. You’re right, sorry. Brought to you by Cash Fly. Not to be confused with Akamai. I said it was like a commercial.

[00:35:31] Craig Syverson
Okay, Just making sure.

[00:35:33] David Hornik
So because they got going at the outset of the sort of formation of the web and the web experience or whatever, they were able to co locate their servers, their cache, their edge servers with ISPs. So they’re literally living in and among the ISPs at the edge, as opposed to some of these later entrants to the market that have had to create server farms at the edge, but that are a hop away from the particular ISPs where you live as an end user. And so it gives them this interesting advantage by being specifically built into the. Into the edge of these. Of these service providers.

[00:36:13] Craig Syverson
Interesting.

[00:36:14] David Hornik
I wasn’t aware of that distinction. And I don’t know, you know, ultimately how much an additional hop makes a huge difference. Except, you know, from an infrastructure cost and management and all that stuff, it seems like a lucky position to be in.

[00:36:25] Craig Syverson
Yes. So lucky because they were early.

[00:36:28] David Hornik
No, it was smart. You know, lucky to be smart. Smart to be lucky.

[00:36:31] Craig Syverson
Yeah.

[00:36:32] David Hornik
Anyway, so that was cool. So I got to meet with Akamai, got to hang out with and talk with the HBO person. Oh, I was chatting with the guy, Digital media guy from Turner Broadcasting. They’re doing all sorts of cool stuff. He’s been in interactive TV and then digital space for a long time and, and just a really smart guy. And it’s interesting to hear them thinking about how to deal with more more broadly with their content. And we had this very interesting conversation about whether Turner was going to do this hyper distribution st that, that Quincy Smith over at CBS Interactive has been, you know, thinking, I guess they’re not CBS Interactive. What are they? It’s NBC Interactive and it’s CBS Digital.

[00:37:14] Craig Syverson
CBS Digital.

[00:37:15] David Hornik
So it’s nbci.

[00:37:16] Craig Syverson
Oh, okay, right, right, right.

[00:37:19] David Hornik
NBCI and cbsd. It’s all about brand Craig.

[00:37:22] Craig Syverson
Yeah, that’s right.

[00:37:23] David Hornik
Keep track of these things. But anyway, Quincy Smith, who is an incredibly well respected guy. The number of superlatives I use in any given venture cast is, is a, is. It’s, it’s astonishing.

[00:37:34] Craig Syverson
And I, it’s, it’s unbelievably, incredibly overwhelming.

[00:37:39] David Hornik
Fabulous.

[00:37:39] Craig Syverson
Amazing. And I edit. I edit half of them too.

[00:37:42] David Hornik
Yeah. Do you really? Here’s another super.

[00:37:45] Craig Syverson
I got a whole bucket full of superlatives just laying around in my studio.

[00:37:49] David Hornik
You know what we should do? We should, we should do a new Schoolhouse Rock on superlatives. Superlatives. Superlatives. They make your sentences more flowery.

[00:38:02] Craig Syverson
Amazing.

[00:38:04] David Hornik
Whoa, where were we even? Anyway, whatever we were talking about Kevin Cohen from Turner about, you know, whether he viewed hyper distribution, this idea of getting Turner’s content out into the world and monetizing it outside of the Turner world or whether he would rap. And that’s what Quincy Smith is doing clearly with CBS Digital or maintaining a walled garden.

[00:38:27] Craig Syverson
NBC.

[00:38:28] David Hornik
Yeah. Well, whether it’s a walled garden or just a destination.

[00:38:31] Craig Syverson
Right.

[00:38:31] David Hornik
Is it, is it, does it still make sense to have a destination? And if so, how do you get people to your destination? And so it’s, it’s just a different philosophy and I think there’s gonna be lots of experimentation in the big media companies that have a lot of compelling content, but they don’t necessarily have a lot of traffic on their particular sites to how, how best put to use this, this great traffic.

[00:38:51] Craig Syverson
I agree. Content. Adobe Media Player will be an interesting part of that. That’s coming up coming soon to a computer near you where they are like itunes in a way that there’s a directory where large networks sit side by side with small networks. There’s something with the Adobe Media Player interface that makes it interesting and kind of puts it on this more even level. I think it could represent an interesting cross pollination amongst the amateur or the small networks like me and the big networks like them.

[00:39:22] David Hornik
Yep, we’ll see. That’s interesting. So in the conversation with the Akamai guys, they had a slide of the players and players and they showed, you know, Windows Media Player and they showed Flash and they showed. But then they also showed real networks and then they had. And they had QuickTime.

[00:39:38] Craig Syverson
Yeah.

[00:39:39] David Hornik
And so I asked sort of, you know, so which are the predominant players and is anyone actually using real still as a player format and. Nope, you know, there’s. There’s like one publisher that’s using real.

[00:39:50] Craig Syverson
Just because they had a long contract. There’s. Can’t wait to get out of it.

[00:39:52] David Hornik
Exactly. But it was interesting. I mean, QuickTime, they said, oh, other than the fact that Apple’s gaining market share and therefore there’s a little more QuickTime, you know, QuickTime is. Is a pretty small format compared to Windows Media. Window Media is just massive. And then flash, obviously, 96, become this massive, you know, behemoth in the space which, which we were laughing about. The fact that in, you know, 95 or 97, whatever. Can you imagine saying, oh, yeah, you know, it’s going to be the predominant video delivery platform, Flash, because you can make stick figures dance.

[00:40:22] Craig Syverson
Yeah, right, exactly. Flash.

[00:40:24] David Hornik
That’s go Flashes for, you know, bad online greeting calls.

[00:40:28] Craig Syverson
Exactly. No, I know that’s. We’ve been telling Apple for a long time. Okay, guys.

[00:40:34] David Hornik
But you know what I did find out, which I thought was interesting? They said that QuickTime was a really great delivery platform for mobile. Did you know that? You did?

[00:40:44] Craig Syverson
Of course.

[00:40:45] David Hornik
That’s right. You’re a video guy.

[00:40:46] Craig Syverson
Yeah. And I’m a QuickTime.

[00:40:47] David Hornik
So you’re a big fan of QuickTime. So apparently it’s just, it’s a lesson hoggy kind of protocol for video delivery to the handset.

[00:40:55] Craig Syverson
Right. And yes, it is indeed. And little.

[00:40:58] David Hornik
Here ends the technical minute of Venture Cast. Venture Cast Technical minute. Well, no, you were going to say something more about it. What?

[00:41:04] Craig Syverson
No, I wasn’t.

[00:41:05] David Hornik
All right, good.

[00:41:06] Craig Syverson
I was going to say that was.

[00:41:07] David Hornik
The end of the technical minutes.

[00:41:09] Craig Syverson
Yeah, the technical minutes, indeed. You reminded me that when I was at Blog World, I met two interesting companies. One was Gimp tv. Gimp.

[00:41:18] David Hornik
Yep.

[00:41:18] Craig Syverson
And this is another content play. And these guys are. I mean, I had a chance to sit with them and actually look at what they’re doing and they’re really cool. They really get it.

[00:41:27] David Hornik
Yep.

[00:41:27] Craig Syverson
And you know, they produce content as well as distribute it, so they’re ones to watch, in my opinion. They’re just.

[00:41:33] David Hornik
All right.

[00:41:33] Craig Syverson
Yeah. Gimp tv.

[00:41:35] David Hornik
Yeah.

[00:41:35] Craig Syverson
Another company which I’m. I’m not going to mention their name.

[00:41:38] David Hornik
Yeah, please don’t.

[00:41:39] Craig Syverson
Because they. But no, no, no, no. Because they asked me not to.

[00:41:46] David Hornik
Oh.

[00:41:46] Craig Syverson
Because they’re kind of. Even though they sort of made an announcement there. So it’s sort of weird. But anyway.

[00:41:51] David Hornik
But they’re still stealthy.

[00:41:53] Craig Syverson
They didn’t want too much traffic. This. Basically.

[00:41:55] David Hornik
Who would.

[00:41:56] Craig Syverson
Yeah.

[00:41:56] David Hornik
You know what I don’t want when I’m an online media company?

[00:42:00] Craig Syverson
Well, because it’s in. It’s in beta, but safe to say as a teaser, this. This was the thing. This thing blew my mind. Like, my. I was walking around in a daze for hours.

[00:42:09] David Hornik
Your mind had been blown.

[00:42:11] Craig Syverson
It had been blown. I had to scatter around and pick up parts. Yeah, it was pretty cool. Really wacky. Like, unbelievably. Like, how can you do that kind of thing?

[00:42:20] David Hornik
So this is a little bit like our discussion of the lobby. Like, oh, good. Fun. The things happen.

[00:42:25] Craig Syverson
Yeah.

[00:42:25] David Hornik
Okay. It’s really cool. It blew my mind. You got to see that thing. And whenever we let you see it.

[00:42:30] Craig Syverson
Exactly. So I promise, once it’s past that stage, then we will talk about it. It’s cool.

[00:42:36] David Hornik
So you’re going to have to cut this part that I’m about to tell you.

[00:42:39] Craig Syverson
Okay.

[00:42:39] David Hornik
It’s not for public consumption, but guess who I’m meeting with on Monday.

[00:42:51] Craig Syverson
We’re back on the record.

[00:42:52] David Hornik
Do we have a transition? I don’t have a transition, so. Hey, Craig. Craig.

[00:42:58] Craig Syverson
Yes?

[00:43:00] David Hornik
Never mind. We’re not going to do that.

[00:43:01] Craig Syverson
Okay, I think we’re done.

[00:43:03] David Hornik
We got nothing left. We’re out. We’re all out. Oh, yeah, it’s good. It’s late. It’s Friday, and as I said, it’s dark.

[00:43:09] Craig Syverson
We’ll see in two weeks. Thanks for Akamai for being big and thank you for Cash Fly for actually paying for bandwidth and being such a great content delivery network.

[00:43:20] David Hornik
There you are. Exactly. Because you know what? Sometimes the vertical is able to focus on the important needs of. Of. Of a market.

[00:43:29] Craig Syverson
Yeah.

[00:43:30] David Hornik
You know what I’m saying?

[00:43:31] Craig Syverson
I know what you’re saying.

[00:43:31] David Hornik
Those of you entrepreneurs out there listening. Exactly. This is my. This is my business school teacher, Fi.

[00:43:37] Craig Syverson
And.

[00:43:40] David Hornik
Verticals can be focused markets where you can provide additional value to the vertical and therefore beat a larger incumbent in that particular vertical by virtue of focusing on the vertical ness of the vertical.

[00:43:59] Craig Syverson
Because you create another power curve.

[00:44:01] David Hornik
See what I’m saying?

[00:44:02] Craig Syverson
Within that little vertical.

[00:44:04] David Hornik
Oh, no, don’t be.

[00:44:04] Craig Syverson
Don’t be. Don’t.

[00:44:05] David Hornik
You don’t be trying to sneak in more math. Finance.

[00:44:10] Craig Syverson
It’s not finance. This is math. This is phenomenon.

[00:44:14] David Hornik
See? Look at this. You thought we were done, and then we gave you this little tidbit of educafying.

[00:44:20] Craig Syverson
All right, we’ll say goodbye now.

[00:44:22] David Hornik
Goodbye now.

[00:44:26] Craig Syverson
We may never settle the question of which comes first, the chicken or the egg, the acorn or the oak. But the proof is clear that where a community, state or nation courageously invests a substantial share of its resources in education, the investment invariably is returned in better business and a higher standard of living. This we do know. Good education is good business.