VentureCast Ep. 30
Transcript
Generated Transcript
[00:00:15] Craig Syverson
Welcome to venture cast number 30. I’m Craig Syverson of Stanford Publishing.
[00:00:20] David Hornik
Listen to that. And I’m David Hornik and I am still of August capital, unlike Mr. Severson, who apparently has changed brands when I wasn’t looking.
[00:00:29] Craig Syverson
Well, it’s a, it’s, it’s a subtle cry for a plug, but. And I thought I’d just get it out of the way.
[00:00:37] David Hornik
Yes. All right, let’s hear it.
[00:00:38] Craig Syverson
No, but starting up with Stanford Publishing courses and we’ve. We formed the new media group over there.
[00:00:44] David Hornik
Oh yeah, four of us.
[00:00:46] Craig Syverson
And we are taking a one day intensive seminar on the road starting next month.
[00:00:53] David Hornik
So you’ll, you’ll wander from city to city wandering. Explained.
[00:00:57] Craig Syverson
ING explained.
[00:00:58] David Hornik
ING explained explaining to people how to be new media. Ish.
[00:01:02] Craig Syverson
Yes, exactly. With the focus on video. And it’s a one day super intensive. So it’s going to fill your brain with everything that we know about creating new media for your company, for your publication. In this case, since most of the people who have been involved with Stanford Publishing in the past are in fact publishers. But yeah, our first one’s in New York on the 8th of February.
[00:01:27] David Hornik
Look at that.
[00:01:28] Craig Syverson
Yes. So pretty exciting.
[00:01:30] David Hornik
That is cool. Yeah, very nice.
[00:01:32] Craig Syverson
Then we’re going.
[00:01:32] David Hornik
Congratulations. Happy New Year.
[00:01:33] Craig Syverson
Thank you. Thank you. And we’re going to dc. We’re going to LA or going to San Francisco. Well, here and somewhere else. So Chicago.
[00:01:41] David Hornik
Back. Coming back to San Francisco.
[00:01:43] Craig Syverson
Yeah. It’s what. We’re doing these over the course of a few months. So it’s not all one good.
[00:01:47] David Hornik
You’re basically going to every city with a great museum.
[00:01:50] Craig Syverson
Indeed. In New York there’s a few.
[00:01:53] David Hornik
I heard a few.
[00:01:54] Craig Syverson
Yeah, I heard of a few.
[00:01:55] David Hornik
I’m, I’m, I’m saddened to say that as I just looked over my calendar for the rest of the year. I don’t see Chicago in it. Oh, and I, you know, I would really kill to go to that art institute.
[00:02:08] Craig Syverson
It’s a cool place. I was just there a few months ago.
[00:02:10] David Hornik
Man, oh man.
[00:02:11] Craig Syverson
Spent the whole day later. Richard Mishrach had a show there. He’s a photographer from Berkeley. Beautiful landscape things. These prints were 10ft by 6ft. There was massive. Very, very cool.
[00:02:26] David Hornik
That was what, like a 3 megapixel?
[00:02:29] Craig Syverson
Yeah. Per square inch? Exactly. So. Well, I’ve been a bad podcaster. We, we promised we’d be regular and then.
[00:02:37] David Hornik
But the holiday wasn’t my fault. I pinged you like on a weekend in the middle of. It was like day after Christmas or something. I guess that wasn’t a weekend actually right before New Year’s. Yeah, but it wasn’t going to happen.
[00:02:49] Craig Syverson
It wasn’t.
[00:02:50] David Hornik
We had, you know, these. Family thing, you know. What’s the problem with family? Very distracting.
[00:02:54] Craig Syverson
Yeah, I found that too.
[00:02:56] David Hornik
Yeah. So I’ve given mine away for the new year.
[00:02:59] Craig Syverson
Have you? Yes, the whole, the whole kit. All of them.
[00:03:02] David Hornik
For kids, the wife. I’ve some of them. And I’m going to. I’m single for the year.
[00:03:10] Craig Syverson
Wow. So you’re just gonna travel because you do anyway.
[00:03:13] David Hornik
Do you know how much time I would have on my hands? Like I’d have infinite time.
[00:03:17] Craig Syverson
Yeah.
[00:03:17] David Hornik
It would be like stopping time.
[00:03:19] Craig Syverson
Yes.
[00:03:21] David Hornik
All right. This I, you know, But I haven’t. I love my family.
[00:03:23] Craig Syverson
Of course you do.
[00:03:24] David Hornik
Not that they listen, but should they?
[00:03:26] Craig Syverson
Should they?
[00:03:27] David Hornik
Should they listen? I’m keeping them and I love them and I will spend as much time as possible with them.
[00:03:33] Craig Syverson
Yes.
[00:03:34] David Hornik
So New year.
[00:03:35] Craig Syverson
So it’s new year.
[00:03:37] David Hornik
You have any predictions?
[00:03:38] Craig Syverson
Oh, I don’t know. I think Apple’s gonna come out with a really thin laptop.
[00:03:46] David Hornik
Yeah. Did you buy that?
[00:03:47] Craig Syverson
No, I’m not gonna buy that.
[00:03:48] David Hornik
But you don’t think it’s cool.
[00:03:50] Craig Syverson
I do think it’s cool.
[00:03:51] David Hornik
Aren’t you like a big Apple head?
[00:03:53] Craig Syverson
It’s cool, but I’m not gonna buy it.
[00:03:55] David Hornik
But you’re gonna be traveling. You’re gonna fly all over the place. You just told me.
[00:03:58] Craig Syverson
I know, but it’s not for video, guys.
[00:04:01] David Hornik
Yeah, it’s terrible for video.
[00:04:02] Craig Syverson
I agree. It’s a great thing. If, if I wasn’t doing video. No problem.
[00:04:07] David Hornik
What it would is 64 gig of solid state memory. Is that how much it is?
[00:04:12] Craig Syverson
It’s available? Yeah.
[00:04:13] David Hornik
Yeah.
[00:04:13] Craig Syverson
The gig hard drive, otherwise.
[00:04:15] David Hornik
All right, so the 80 gig hard drive is 1700 bucks.
[00:04:18] Craig Syverson
Yeah.
[00:04:18] David Hornik
But the 64 gig of solid state memory, 3000 bucks, right?
[00:04:24] Craig Syverson
Yeah.
[00:04:24] David Hornik
You think of that?
[00:04:25] Craig Syverson
It’s a new technology. It’s like, it’s for the rich guy who really wants. It’s. The guy’s gonna drive the Tesla, right. He’s gonna get that solid state.
[00:04:31] David Hornik
Exactly.
[00:04:31] Craig Syverson
It’s just, you know, it’s early adopter thing. It’s cool.
[00:04:34] David Hornik
Do you think the battery lasts longer with. With the flash memory?
[00:04:37] Craig Syverson
I think it would because it doesn’t.
[00:04:39] David Hornik
Have to spin any.
[00:04:39] Craig Syverson
Doesn’t have to spin any motors. But I am curious about then. What is the power usage of said chip?
[00:04:46] David Hornik
Yeah. I don’t know what the answer is, but I was sort of stunned. I Emailed my IT guy when it came out saying, so can I get one? Can I get one? What do you think? Should I get one? And then I said, what? And how in the world can it go from 1700 to 3000 bucks? And he emailed me back and he said that a 64 gigabyte flashcard was $1200.
[00:05:10] Craig Syverson
Yeah. Right.
[00:05:12] David Hornik
So which makes sense, like you know, two years ago if you said, hey, you know what I really want is a 64 gigabyte flashcard, you might have said to me and I would like to time travel.
[00:05:21] Craig Syverson
Yeah, exactly. Right.
[00:05:23] David Hornik
So I mean it is pretty cool.
[00:05:24] Craig Syverson
Yeah. You’re at the, you know, at the ending lifespan of the hard drive and the beginning lifespan of the solid state flash.
[00:05:30] David Hornik
So we have a company that’s working on non volatile memory that will replace flash that is let’s say 10 times denser than flash. How awesome.
[00:05:41] Craig Syverson
That would be awesome. And it’s totally, it’s totally going to happen. Yeah.
[00:05:46] David Hornik
Now, you know, right now they have like, they can do like 64k or something, you know, but, but when they ramp it up to 64 gig.
[00:05:59] Craig Syverson
Yeah.
[00:06:00] David Hornik
Then it’ll be awesome.
[00:06:02] Craig Syverson
Yeah.
[00:06:02] David Hornik
And It’ll cost like 20 bucks or something.
[00:06:04] Craig Syverson
Yeah, yeah. It’s happening certainly in the, in the, in the video world with the replacement of tape.
[00:06:10] David Hornik
Yeah.
[00:06:10] Craig Syverson
Which a year ago I was still in the gosh darn it. I’m sticking with tape kind of thing because tape has been such an old evolutionary medium that it’s been very reliable, totally reliable.
[00:06:24] David Hornik
And it has evolved in interesting ways to solve the problem for each next generation.
[00:06:29] Craig Syverson
Right. But this year it’s now time to say by all means go solid state just because the prices are coming down, the reliability is there. I got my wife the little Panasonic SHCD5, I believe it is for Christmas. Little high def, the smallest high def camera out there which has a little SDHC card.
[00:06:50] David Hornik
I need one of those.
[00:06:51] Craig Syverson
And so I’ve been, you know, actually hands on shooting with the solid state thing and it’s quite a bit different from a, from a usability point of view, from I’m going to pick up and take a shot point of view. It’s a no brainer that. And also just pulling it off, it’s like I don’t have to rewind the tape, I don’t have to cue the tape. It’s just, it’s a file on this thing. So it’s, it’s a huge difference in terms of just that ease of transfer.
[00:07:15] David Hornik
Well, it’s funny you know, so now I’m going back, back into the deep dark archives of my life when I was involved in digital audio tape and talking about digital audio tape. This is, you know, and it was the great new medium for digital recording when I was in studying computer music in the late 80s.
[00:07:33] Craig Syverson
Right.
[00:07:34] David Hornik
And the thing that was awesome, we were all really excited about was random access on digital audio tape. You could go to any point on the tape except that it, you know, it was like random access. I want to be here, you know, a minute and a half later. It would. Okay. You’re like, the idea that that was random access now is just unbelievable.
[00:07:58] Craig Syverson
Yeah. So.
[00:08:00] David Hornik
So it is pretty awesome. I do think that the, you know, memory card is awesome. I’m a huge believer. And I was, you know, one of the things that we looked at a number of years ago was were chips that were going to be involved in H264 encoding and decoding to increase solid state camcorders, and then ultimately cell phone usage, etc.
[00:08:21] Craig Syverson
Yeah.
[00:08:22] David Hornik
And that stuff has completely happened.
[00:08:24] Craig Syverson
Yes.
[00:08:25] David Hornik
So commodity.
[00:08:27] Craig Syverson
I mean, it seems like it’s at the commodity spec now because.
[00:08:29] David Hornik
Which is the challenge. Right. If I had invested back there, that turns out there were a handful of these chip companies and if I hadn’t guessed. Right. And then you have to stay ahead of the curve. I mean, ch. Investing is brutal.
[00:08:39] Craig Syverson
It’s brutal. Yeah.
[00:08:40] David Hornik
It’s unbelievable. I was just talking with a guy who is an executive in one of the companies we put money into a company called a Theros. Theros is the WI FI chips that are in the vast majority of devices that are floating out there. It’s been a very successful company. On the other hand, you know, we went from, okay, it’s, you know, 8, 802, dot, blah, blah, blah, and it’s B, A and then B. Actually, it was worse yet. It was B then A, then N, then G, you know, and time. You got to keep up and.
[00:09:11] Craig Syverson
Yeah.
[00:09:11] David Hornik
You know, so it’s very. It’s a tricky business, this chip stuff. And plus, every time you do a new generation thing, it’s like 20 million bucks.
[00:09:19] Craig Syverson
Yeah. To refab.
[00:09:20] David Hornik
Let’s try that one up. 20 million. I hope it works.
[00:09:23] Craig Syverson
Yeah.
[00:09:24] David Hornik
You know, as opposed to. Let’s try a new version of the website. Yeah. Like 12 bucks.
[00:09:28] Craig Syverson
Right?
[00:09:28] David Hornik
Exactly. That didn’t work. Good thing. We can switch the switch to A back to the old one. I like that.
[00:09:36] Craig Syverson
That’s why the other guys in the office do the chip deals and you just sort of sit back and Go. Yeah, yeah, sure. Why not?
[00:09:41] David Hornik
I have, I have. Yeah, exactly. I say. I say, wow, those. Those laws of physics sure are changing. I didn’t think you could do that. And I always hear, like, where are the gluons? You may be able to. Well, good. Let’s put 40 million bucks behind that. That sounds great. You know.
[00:10:01] Craig Syverson
Yeah.
[00:10:02] David Hornik
So what do you think of this? My sequel deal for a billion dollars.
[00:10:08] Craig Syverson
I was wondering about that.
[00:10:11] David Hornik
900 million billion.
[00:10:12] Craig Syverson
Yeah, it seemed really large number for.
[00:10:14] David Hornik
Yeah. For this open source thing.
[00:10:16] Craig Syverson
Yeah, yeah. I’m a little head scratchy on it. Just for the. Not only the price, but the reason to do it.
[00:10:22] David Hornik
And sun.
[00:10:23] Craig Syverson
Yeah.
[00:10:24] David Hornik
Like, okay, you know, if I were Oracle, I’d say, oh, you know what, pay a billion dollars because, you know, we have. We have some bad intent. And then of course, we would have had, you know, then we would have had all sorts of fun with the antitrust division and back and forth and stuff like that. But. But no, it’s son.
[00:10:45] Craig Syverson
Yeah, the hardware kind of crazy.
[00:10:47] David Hornik
And MySQL had, well, less than $100 million in revenue. So we’re talking, you know, somewhere between, let’s say, 15 and 20x revenue for a. For a business that had essentially flattened.
[00:11:02] Craig Syverson
Yeah.
[00:11:02] David Hornik
So, you know, one of my fellow venture capital bloggers blogged after this event happened, Hey, I hope this firmly puts a stake in the question of what’s the business model for open source? And I thought, what kind of stake? Apparently the stake is, you know, the business model is sell it for a crapload of money to someone who has a real business. Yeah. But anyway, there’s still no. It still was like a services business and thousands and thousands of users, and yet, you know, some number of thousand customers. And so the hundreds of customers, the.
[00:11:39] Craig Syverson
Revenue is coming from premium users with.
[00:11:41] David Hornik
For support services. Yeah, support. You know, and support. I mean, you know, if you come and pitch me and say, hey, you know, this is an awesome business because I’m going to get millions and millions of users and they’re going to pay me support and support alone, I think. Oh, and by the way, it’s free for everybody else and if you don’t need support, it’s just playing free.
[00:11:57] Craig Syverson
Mm.
[00:11:57] David Hornik
You know, that’s pretty tough, don’t you think? That’s kind of a tough pitch.
[00:12:00] Craig Syverson
It’s a hard to scale. Well, you get it. Yeah, it’s hard to scale because you. Those people need to be trained crazy.
[00:12:05] David Hornik
A billion dollars. What else happened? There were other. There were some other deals.
[00:12:10] Craig Syverson
Were there other deals? It seemed kind of quiet.
[00:12:12] David Hornik
Everyone’s Bea got bought. Bea big, big, you know, ba was like high flyer and then. What are they bought by? I don’t know. Yeah, like the app server, you know that whole.
[00:12:23] Craig Syverson
Oh, right.
[00:12:24] David Hornik
You know that stuff.
[00:12:26] Craig Syverson
Yeah.
[00:12:26] David Hornik
That we now take for granted again because they’re open source things that are sort of. So it just. That was interesting. Good. Interesting way to start out the year. New year.
[00:12:35] Craig Syverson
So it seems like everyone’s panicking with the stock market so not doing very interesting.
[00:12:41] David Hornik
I just had a haircut and my, my haircut. Er, Haircutrics. Is that what you call it?
[00:12:49] Craig Syverson
No. I don’t know, I haven’t met your hair.
[00:12:52] David Hornik
Yeah, yeah, yeah, let’s don’t tell her my hair. Cutlery was. She asked me whether I thought there were troubles, troubles with the economy. But I was saying the thing that I, you know, she would know because. Do people stop getting haircuts? I mean Silicon Valley, it’s not like we’re immune by any stretch of the imagination. On the other hand, as I sit here investing, I’m investing in super early stage companies. So what’s happening in the economy certainly doesn’t affect the new things I’m doing. Right. Because the. When are they going to get liquid? They’re going to get liquid like you know, four years, six years, eight years or never, you know, from now. So yeah, I guess things that I did six, eight years ago are going to have trouble getting, you know, finding a public market. On the other hand, if they’re really successful businesses that have revenue and profits and all that, they’re going to, they’re.
[00:13:43] Craig Syverson
Going to get bubble weather it.
[00:13:44] David Hornik
Yeah, it’s not, it’s not an issue. So. So it’s interesting, it’ll be interesting to see if this economic downturn, if in fact we are having one, which clearly we are, has an impact on these tech, these tech businesses. How about consumer tech? Right. Is it going to, is it going to drive down ad revenue? You know, it certainly could. Right. You maybe there’s discretionary ad spending but when I look at it, I think there’s still this massive exodus from traditional media to new media.
[00:14:10] Craig Syverson
Right.
[00:14:11] David Hornik
And so even if the total percentage of spend or the total dollars being spent diminishes, it’s still shifting online. So it’s still a growing business.
[00:14:22] Craig Syverson
The share is still going to increase.
[00:14:23] David Hornik
Yeah, it’s going up. So. So even my online businesses that are ad driven and everyone that I see, you know, lots of stuff, you know, same thing. Right. So I’m not saying I’m ignoring the macro economy, but on the other hand, you know, man, when someone pitches me, it’s like, is this an interesting team? Is this an interesting business? Let’s start there.
[00:14:45] Craig Syverson
You know, it’s. It’s the content thing again, Really. I say the same thing in media when, you know, I’m doing my stuff on it. It’s. The content will rule it. Like people say, how do I get. How do I make my show popular? How do I. How do I get well known, you know? Yeah. There are some things you can do, but they’re, they’re very straightforward and common sense. But the strongest thing you can do is have good content.
[00:15:05] David Hornik
Yes, exactly. Damn it. That’s where we’re in trouble.
[00:15:08] Craig Syverson
Well, I know that’s our worst.
[00:15:10] David Hornik
Explain why our. Our. Our listenership is stalled at 17.
[00:15:15] Craig Syverson
Set win.
[00:15:15] David Hornik
77. 1707.
[00:15:18] Craig Syverson
70. I was gonna. My heart jumped because that would have been. That would have been a. Yeah. Massive, big triumph, big increase.
[00:15:24] David Hornik
I, I had the total fun. This was just incredibly fun. Of teaching at Harvard Law School.
[00:15:32] Craig Syverson
Right. I didn’t make it out there. I wanted to go.
[00:15:34] David Hornik
That would. Yeah. Oh, that’s right.
[00:15:35] Craig Syverson
Yeah.
[00:15:36] David Hornik
That would have been awesome. So, yeah, so I was teaching this class, entrepreneurship and venture capital, to law students, which really, you know, sort of took them out of their world. Because, you know, when you’re in law school, this is, you know, this. I lived this. I lived this pain, right? It’s all about doctrine. It’s about rules and expectations. And here’s a case and it sets the precedent. And then, you know, your next case, you figure out how it’s like. Or not like the thing, et cetera, et cetera.
[00:16:02] Craig Syverson
Right.
[00:16:02] David Hornik
And here I am with these students saying, okay, now let’s talk about businesses and how you differentiate. And. And after the first class, there was an email from a student saying, you know, I’m a little. I’m a little confused which of this is going to be on the exam. Like, I don’t. But by just. It might as well have just said, like, I don’t get it. Yeah, question. Yeah, but, but, but the end. A couple of weeks, and I think people were kind of psyched about it. Like, we had brought in a bunch of the Boston VCs, you know, great. Really great group of folks out of place like IDG Ventures and General Catalyst and Highland Capital. And, you know, all these guys came in and they. And my students pitched a business to them.
[00:16:48] Craig Syverson
And I read that you’re. You posted this on.
[00:16:50] David Hornik
Oh, right. I Talked about. Yeah. And then they, then they were so.
[00:16:53] Craig Syverson
Different from your law experience.
[00:16:55] David Hornik
Yeah, totally. Totally different. But it was. But I got an email from a first year law student. He said, you know, hey, I know you’re coming to town and do you have time to grab coffee? I. I listened to Venture cast. I was like, What?
[00:17:07] Craig Syverson
Wow, here’s 10 bucks.
[00:17:09] David Hornik
Yeah, right. Thank you. I couldn’t believe it. I was like, you know, who are the other 16?
[00:17:12] Craig Syverson
Yeah.
[00:17:14] David Hornik
And who would have known that you here at Harvard were like one of the 17? So.
[00:17:17] Craig Syverson
Hey, we got a plug, by the way, from Leo Laporte.
[00:17:21] David Hornik
Nice.
[00:17:21] Craig Syverson
On Twitt.
[00:17:22] David Hornik
Very cool.
[00:17:23] Craig Syverson
This week.
[00:17:24] David Hornik
What was the context?
[00:17:25] Craig Syverson
Well, I was on Twitter and so when he introduced me, it was like any of Craig Seberson. It does that vc. What the hell’s that show again?
[00:17:33] David Hornik
You do I praise.
[00:17:36] Craig Syverson
He does really. He does really appreciate the show. So thank you. I think, I think we might be up to 19 now because, you know. All right.
[00:17:44] David Hornik
Yeah, exactly. Well, Leo, I totally appreciate it.
[00:17:46] Craig Syverson
Yeah, he does really appreciate the show too. He forgets the name. Forgets the name of everything. But yeah, exactly.
[00:17:52] David Hornik
Well, that’s my life too. You know what’s a bad. Here’s a bad idea.
[00:17:55] Craig Syverson
When you’re a vc forgetting names.
[00:17:57] David Hornik
I don’t know if I’ve ever. If you see, this is an example of me not even remembering. I don’t know if I’ve discussed this before, but it is absolutely true. It’s all about names. It’s about people and who you know and what they’ve done and where they’ve been. So like my partner Dave is just unbelievable. We’ll be in partner meetings and we’ll start chatting about someone and he’ll say, oh, yeah, I met the. Do you remember when we saw that deal back in, you know, 1987, it was so and so he did that thing. He was. He was actually just the VP of Engineering. But then he left there to do such and such where he was a cto and then that company went public. But. And he stuck around for another, I think like three years. And it’s unbelievable. You might as well be reading a biography.
[00:18:36] Craig Syverson
Yeah, yeah.
[00:18:37] David Hornik
And I remember actually I had this experience very early on. Steve Jurvetson has this same brain. And Jurvetson and I were at Stanford together and I. This was before I was a vc. I think I was still like a lawyer guy. And I went to the great Professor Jervison. Used to have these schmooze fests which were these Absurd parties. These giant parties where they brought in, like, fire breathers and, you know, Jervison flew in. In a helicopter in. In, like, superhero costumes.
[00:19:07] Craig Syverson
Was this.com one?
[00:19:09] David Hornik
I don’t know. Yes, exactly. Exactly. In the late 90s.
[00:19:11] Craig Syverson
Okay.
[00:19:12] David Hornik
And. And I remember, like, hanging over, hey, Jerv, how’s it going? I was hanging out and chatting with him, and someone walked up and he said something to the effect of like, hey, you know, so and so you should meet David Hornik. David. At such and such. Whatever. But, David. What? Wasn’t your sister a Harvard undergrad? And what. I think she was Winthrop House. What year did she graduate? And I was like, yeah, actually, she was in class. Whatever. And he said, well, so. And so sister was at Winthrop House. But I. But they. I don’t know if they overlapped. When was your sister there? And she was like, how do you know this?
[00:19:44] Craig Syverson
How do you remember it?
[00:19:45] David Hornik
Right.
[00:19:45] Craig Syverson
How do you remember.
[00:19:46] David Hornik
Why do you remember this? Like, I can’t even believe it. And that’s when I understood, like, oh, random access. Memory of the brain is, like, really powerful, and I so don’t have it. Yeah, yeah, it was. There’s sort of like, you know, there are these moments in time when you realize you’re inferior.
[00:20:00] Craig Syverson
Yes.
[00:20:02] David Hornik
And they stick with you.
[00:20:03] Craig Syverson
And they stick with you. And then you assess your other strengths and you go with them.
[00:20:06] David Hornik
Right, exactly. Like, I can see through walls. No, no. You know, taller than the average man. No, I have an excellent singing voice.
[00:20:17] Craig Syverson
No, no, but you find something.
[00:20:19] David Hornik
Yeah, you gotta work. You gotta work. You gotta work for a while and.
[00:20:22] Craig Syverson
Then you leverage it.
[00:20:23] David Hornik
Yeah, exactly. Like, for me, example, I. I am extraordinarily loud.
[00:20:27] Craig Syverson
You’re loud? Yes. And that’s, you know, it’s a natural talent for you.
[00:20:31] David Hornik
Exactly. Yeah, exactly. It’s. It’s good.
[00:20:33] Craig Syverson
As indicated by our levels on our microphone setting. Yours is about, you know, one third of mine. There you go. See, you did that just to bug me. Even mind pegged on that one.
[00:20:46] David Hornik
Yeah. Oh, man, I know. Exactly. That’s because I don’t have your little, you know, filtery thing between me and your mic. So what else. What else is happening in this new year? You got anything?
[00:20:55] Craig Syverson
Spent a whole week at Mac World giving. I spoke every day and. Oh, yeah, on, like five shows. A very.
[00:21:02] David Hornik
That’s awesome.
[00:21:03] Craig Syverson
Very busy week. We had the second largest space at Macworld next to Apple. We being pixel core and just a group of us who are doing this whole podcast thing.
[00:21:12] David Hornik
Wait, were you, like, squatters?
[00:21:14] Craig Syverson
No, no, we Were in the exact far, far, far corner next to the concession stand on the west hall.
[00:21:21] David Hornik
So we’ll basically, we’ll give you massive amount of space as long as you promise to serve nachos or pitch the nachos.
[00:21:30] Craig Syverson
Yeah, that’s good. But no, it was good. It was a good week. We spoke to a lot of people and record a lot of shows, and it’s awesome.
[00:21:36] David Hornik
I wish I had been there. Truthfully. I. I did the next best thing, which is I watched Crunch Gears Live blogging of the keynote, so I could hear what was going on while I was on a board call. That was good. And then secondly, I showed one of Steve Jobs’s keynotes in my class as an example of how to be a presenting God.
[00:22:02] Craig Syverson
Ah.
[00:22:03] David Hornik
Because he’s just unbelievable.
[00:22:05] Craig Syverson
It’s very nested.
[00:22:07] David Hornik
Yeah, it’s.
[00:22:08] Craig Syverson
You say something, you repeat it, you say something further. It’s. It’s this backing and forthing. It doesn’t really go very far, but it’s very nested.
[00:22:16] David Hornik
Yeah. Well, that’s good, right? I mean, it’s about reinforcement. You know what? It’s about reinforcement.
[00:22:22] Craig Syverson
I understand.
[00:22:23] David Hornik
I gotta work on it. I gotta work on the technique. Apparently, the delivery.
[00:22:28] Craig Syverson
Yeah. Content was there. It was that big smirk that gave.
[00:22:32] David Hornik
Well, you know, actually, this was. So this is the thing. Then after I show the key, it was actually the app, the iPhone keynote.
[00:22:39] Craig Syverson
Right.
[00:22:40] David Hornik
This is the one that I’d shown that my, that my son had watched a thousand times and could actually repeat. You know, I introduced to you. It fits in the pocket or whatever it was. And so I show the beginning of it, and it’s like, it’s a revolutionary communicator. It’s a. It’s a next generation ipod. It’s a phone, whatever. And he goes through this process. It’s a this, it’s a that, it’s a this. And then I say, you know, that’s amazing, like the cadence. And then I said, but actually, really, he kind of messed it up because he said, it’s. It’s a revolutionary communicator. And people, yay. It’s a. It’s a next generation phone. And people went crazy. Yeah, they lost their mind. Then it’s the next generation ipod. And they’re like, yay. It’s like, you know, you want to climb it. Right, Right. I mean, and ordinarily, Jobs gets that, like, dead on. You start with the thing that’s kind of interesting, but. But only to the. Your patsies, and then the next thing. Right. So, you know, I just. So it turned out to not be the best example. It was fine. You know, at his worst, he’s better than I am. I understand that. I’m just saying.
[00:23:50] Craig Syverson
Yeah. I think the Apple TV thing is, to me was the most interesting and significant thing that happened.
[00:23:58] David Hornik
Well, and. And it is very interesting. And did you see, you know, this company Voodoo Voodoo already lowered the price of their box in response because suddenly Apple’s Apple TV is competing directly with them. Hey, we’re gonna do down. We’re gonna do rentals and we’re gonna do high def rentals, which was kind of voodoo shtick.
[00:24:18] Craig Syverson
Mm.
[00:24:19] David Hornik
And so the price of their box went down from 399 to 299. Like that.
[00:24:24] Craig Syverson
Yeah, that makes sense.
[00:24:25] David Hornik
Which is kind of a. I mean, it has to happen. 399 was nutty. On the other hand, you know, wow, that kind of hurts when you’re the startup and you were expecting a certain amount of margin and then the big guy comes in and kind of competes right in your front door, front yard.
[00:24:39] Craig Syverson
They also though, they redid the UI of the Apple tv, changed how you’re navigating through things. And I think it’s kind of what it should have been on release one. And also the whole. You can buy it from the Apple tv. But the best news for me was that I. Well, my wife wanted the Apple TV last year or should we get a mini. I said, no, I like the idea of the Apple tv. And we get it and then it doesn’t sync with her machine now and again. And the past four months have been beta versions.
[00:25:11] David Hornik
Pressure curve. So sinking pain.
[00:25:14] Craig Syverson
And she was like, should have gotten.
[00:25:16] David Hornik
A mini rest service.
[00:25:17] Craig Syverson
And so, you know, I was like to. Hang on, hang on, hang on.
[00:25:20] David Hornik
You’re such a. You’re. You’re such a. An Apple apologist.
[00:25:24] Craig Syverson
I’m not apologizing. And then they came out with it and it’s free.
[00:25:28] David Hornik
And is it working?
[00:25:29] Craig Syverson
It’s not upgraded yet. Another couple weeks, but.
[00:25:32] David Hornik
Because I have one. But I haven’t. I didn’t even inquire because I have other things to do like watch repeats of Grey’s Anatomy.
[00:25:40] Craig Syverson
Yeah.
[00:25:41] David Hornik
While the writers are still in stories. Yeah.
[00:25:43] Craig Syverson
But see now in the directory, the way the UI is laid out, the podcasts and movies and television pretty much have the same sort of a layout. Yep. So we’re right there.
[00:25:55] David Hornik
Sweet. Yeah, I gotta check that out.
[00:25:56] Craig Syverson
It’s very nice.
[00:25:57] David Hornik
So we just skipped over it. But hey, shout out to the writer. Strike. Here’s the thing.
[00:26:03] Craig Syverson
Yeah.
[00:26:04] David Hornik
Shout out. What am I, freaking Adam Carolla? That would make you Dr. Drew. In days when love lines didn’t stop stink, we. When. When you could have a caller, you know, talking about erectile dysfunction.
[00:26:17] Craig Syverson
Yeah.
[00:26:17] David Hornik
You know, and. And what? You know what’s interesting, Craig?
[00:26:20] Craig Syverson
Are you going off on another. I’m just branching in my brain here. Yeah.
[00:26:24] David Hornik
What’s interesting, turns out that the. That the marijuana smoking.
[00:26:28] Craig Syverson
Yeah.
[00:26:28] David Hornik
You know, does have an impact on erectile functionality.
[00:26:32] Craig Syverson
Oh, yeah.
[00:26:33] David Hornik
That’s what they say on lovelines. And they say it every night. So should you call in for the 73rd discussion of whether, in fact, getting stoned every night might impact your ability to perform? I don’t understand that. That’s why this is a more. This is a more quality show because we have different topics instead of the same one every night. Somewhat less intriguing, but different at least.
[00:26:59] Craig Syverson
Okay. I’m reassured now that, yes, we’re on the right track, we won’t change the format.
[00:27:04] David Hornik
In other words, that had nothing to do with the writer strike. What? Yeah, there’s all this hemming and hawing about how the rate the writers are. I can’t believe they’re making such a big fuss, etc. They’re so right. It’s. It is absurd to suggest that the writers are. Are being irrationally concerned about online content. You know, this is the studio’s point of view is, oh, you know, I can’t believe that you’re. You know, it’s such a small amount of revenue. It’s. It’s nascent.
[00:27:34] Craig Syverson
Did you see Eisner’s thing?
[00:27:35] David Hornik
You know, not important. No.
[00:27:36] Craig Syverson
What did Eisner, exactly, you’re saying is like, oh, it’s just crazy. These writers are like, we’re not making any money on the Internet.
[00:27:43] David Hornik
Yeah, the Internet’s a loser. It’s a money loser. So how can you do it? Man, oh, man, I think that’s crazy. I think that these writers are coming in, you know, just at the right time. They’re not going to get screwed the way they were with DVDs. They’re going to step in early and they’re going to secure a reasonable and fair right. So I’m totally. I am. Despite the fact that I would like a new episode of Grey’s Anatomy, I am with them 100%.
[00:28:08] Craig Syverson
That’s so honorable, don’t you think? Selfless.
[00:28:11] David Hornik
Look, you know, I go back a long line of socialists.
[00:28:15] Craig Syverson
Yeah.
[00:28:15] David Hornik
So despite the venture capitalist thing.
[00:28:18] Craig Syverson
Yeah.
[00:28:18] David Hornik
I’m trying to make up, trying to make amends to my grandpa Grisha, who would have been like, you’re a venture capitalist.
[00:28:25] Craig Syverson
You.
[00:28:26] David Hornik
That’s disgusting. You sicken me. Don’t visit. That’s what he would say.
[00:28:33] Craig Syverson
And I think I mentioned before, my grandfather was the violinist in the Pelican Rapids Socialist Orchestra in Pelican Rapids, Minnesota.
[00:28:42] David Hornik
Awesome.
[00:28:43] Craig Syverson
Yes.
[00:28:44] David Hornik
I didn’t know that they had like, you know, you had. It’s like the Crips in the Bloods. I’m sorry, you have to go to the socialist orchestra. This is the capitalist orchestra. This is Pelican Rapids capitalist orchestra.
[00:28:55] Craig Syverson
You cannot listen to our music.
[00:28:56] David Hornik
Look at you. Look at the way you’re dressed. Surely you know better.
[00:29:01] Craig Syverson
Take that top hat off.
[00:29:02] David Hornik
Exactly. Good lord.
[00:29:04] Craig Syverson
Yeah, but you’re all. You’re involved in social media, so there, you know, there.
[00:29:09] David Hornik
There you go. I got that. That’s right. I’m giving back to the people.
[00:29:14] Craig Syverson
Yeah. Yep. So did you buy any companies over the holidays?
[00:29:19] David Hornik
Let me think about that. No, not. Not this holiday season. I did just buy Rock Band.
[00:29:25] Craig Syverson
Oh. But not the company. I liked it so much I bought the company.
[00:29:29] David Hornik
See, now this is a test for my children.
[00:29:31] Craig Syverson
Yeah.
[00:29:32] David Hornik
My children, if they were to be listening to my podcast, would find out that they’re getting rock banned for Valentine’s Day. But since they don’t listen, they’re just gonna have to be surprised.
[00:29:42] Craig Syverson
Wow, that’s a big risk.
[00:29:44] David Hornik
There’s been a lot of pressure in the Hornick house since Rock Band came out. We did get. We got the Wii for Chanuka and. And we love the. We. Somewhat addictive and probably not good for my children’s mental health, but highly entertaining.
[00:30:04] Craig Syverson
Yes.
[00:30:04] David Hornik
But then Rock Band came out and do you know the Rock Band? It’s like guitar here only and includes the drum set and a bass and a microphone.
[00:30:12] Craig Syverson
Yeah.
[00:30:13] David Hornik
And it’s just spectacular. I mean, you know, just. What a great game. Good clean fun. Everybody gets to rock out and Rock Band. So they’ve been getting a great deal of pressure to come home with the Rock Band. And so much so that my 10 year old tried to. To strong arm his brother to insist on Rock Band for his sixth birthday, which just happened. Like, what do you really want, Beckett? Oh, I really want, you know, such and such. No, listen up. You want Rock Band? No, I like Lego. You want Rock Band. So I’m very excited about that. But I have to wait because it’s only the. What? It’s 25th.
[00:30:53] Craig Syverson
Not even close.
[00:30:54] David Hornik
Yeah, we got like three weeks and.
[00:30:55] Craig Syverson
If they listen this time, oyve oh.
[00:30:59] David Hornik
That’Ll kill the surprise.
[00:31:00] Craig Syverson
I got. My one gift that I wanted for Christmas was Guitar Hero for the Mac. So I got it.
[00:31:05] David Hornik
Oh, for the Mac. They have such a thing with the controller and all. See, that’s cool.
[00:31:10] Craig Syverson
Yeah. Plug the guitar right in the USB port and away you go.
[00:31:13] David Hornik
Oh, that’s awesome. I had no idea.
[00:31:15] Craig Syverson
And so, yeah, first time they’ve released it for Mac and PC.
[00:31:18] David Hornik
Yep.
[00:31:18] Craig Syverson
And it’s fun.
[00:31:21] David Hornik
I, I was. I. The thing that amazes me, right, this is, this is proof that no matter what it is, there will be it. That is, if it is immensely popular, there will be a gigantic ecosystem around it. And this is a great one because you can get all sorts of different Rock Band controllers. So you can get your flying V guitar, you can get your wireless guitar, you can get the different stickers, you can get the different music. I. And there, and there’s this incredible site that you can go. And you can create your own rock. Your own Guitar Hero songs. Have you seen this?
[00:31:55] Craig Syverson
No, I mean, good rock band songs.
[00:31:57] David Hornik
No, this one is for Guitar Hero, but I’m sure they’ll come up with a version of. But so you go, you go online and you have to. So you have to be able to do a whole set of things. It’s almost absurd. Yeah, you have to have. You got to have your MP3 of the song. You have to find the particular file that lays out the details and someone. And you can literally go through and create. By playing, you basically create a map of the song for the guitar. And then, you know, you create the file and then you play it.
[00:32:27] Craig Syverson
Wow.
[00:32:29] David Hornik
It’s really, it’s really cool.
[00:32:30] Craig Syverson
Wow.
[00:32:31] David Hornik
So there are all these things. But the other thing that’s awesome is if you go look on Guitar Hero or rock band on YouTube, there are thousands of videos.
[00:32:41] Craig Syverson
Yeah.
[00:32:42] David Hornik
There’s this one video of this guy playing guitar. Guitar Hero 3.
[00:32:46] Craig Syverson
Right.
[00:32:46] David Hornik
Like expert on the hardest song.
[00:32:49] Craig Syverson
I play that one and I don’t.
[00:32:50] David Hornik
Know what that song is.
[00:32:51] Craig Syverson
I, I should know because it is insane. It’s insane.
[00:32:54] David Hornik
It’s insane. The guy just, he just crushes it.
[00:32:57] Craig Syverson
Yeah.
[00:32:57] David Hornik
And then I get. And then my buddy Joe. Joe is like a VP at Microsoft in charge of a. Some home thing or whatever. And there’s a. There is a blog post of Joe having completed Guitar Hero, you know, with his certificate. And then the next thing I know, there’s a picture of his 3 year old or 4 year old. I forget, sorry, Joe, how old your son is finishing. That’s why you’re not finishing Beginner on. You know, he’s like, gone through the whole set on Beginner, and the video is adorable. Of his son, like, rocking out. So I’m just a complete convert. I think all web applications should be like a Guitar Hero with a controller. With a controller.
[00:33:40] Craig Syverson
The Amazon guitar controller.
[00:33:42] David Hornik
Exactly.
[00:33:43] Craig Syverson
Push the.
[00:33:43] David Hornik
No, because if Amazon made the guitar controller, it would look like you were playing, like a desk attached to, you know, a string or something. I mean, it would be as just as ugly as their book. It’d be like the kid. Can you imagine the Kindle of Guitar Hero? It would sound like a ukulele. It would look like you were playing a book. I mean, it would just. It would be a catastrophe.
[00:34:08] Craig Syverson
Are we gonna get into any venture capital content in the show or we just.
[00:34:11] David Hornik
I don’t know. What do you want to talk about?
[00:34:12] Craig Syverson
I don’t know. You’re the venture capitalist. You’re the expert.
[00:34:15] David Hornik
All right. I’m bullish on this year.
[00:34:17] Craig Syverson
You are bullish.
[00:34:18] David Hornik
Sure, why not?
[00:34:21] Craig Syverson
You blogged about getting back to the.
[00:34:24] David Hornik
Basics, and it’s true.
[00:34:25] Craig Syverson
And helping people with the pitch. Your latest entry, I think it was.
[00:34:29] David Hornik
Yes. I just. Well, because I’d been teaching this class, and then I’d been thinking about it, and I realized, you know, so five years ago about. I started blogging and then. And. And at the time, I’d write about all sorts of kind of basic things, you know, in the venture business, like how to pitch or, you know. One of my first posts I can remember is it was titled something like, don’t be conservative. And the entire point of that post was every person who comes in and pitches me and then gets to their financial says, oh, well, these are conservative. And I say, like, well, here’s an idea. How about. What do you. Which ones do you believe? Like, don’t tell me conservative. Tell me what you believe you’ll actually do. So there were a whole set of these posts, but they were early on when nobody’d written about venture capital. And so you could write these things.
[00:35:19] Craig Syverson
Right.
[00:35:19] David Hornik
And it seems like those sort of got written. And the. And the thing about. I was going to say problem, and I think it is fair. The problem with blogging is, right, if I wrote it five years ago, it’s five years lower on the stack.
[00:35:32] Craig Syverson
Yeah.
[00:35:32] David Hornik
No one’s going to read through and get the five years. And people, by and large, are not going and saying and going to venture blog and clicking on, you know, entrepreneurial tips or whatever, even though they should. Those. Those that would be Helpful. And so I was thinking about it. We all are now blogging on increasingly esoteric things as there are more and more of us blogging about the venture business. And so I just went koosh, right back to the like, basics of pitching a company, which is. Here are the slides to include. Yes, you know, just the basic eight slides, whatever they were, you know, right. Intro and team and, and product and market and, you know, competition. So. But it’s interesting. So then I had a pitch today and actually I should blog about this. Maybe it was today or yesterday where a guy came in and he got through, he was giving the presentation and then went to do a demo and said, oh, you know, you didn’t really talk about demo in your things. Basics to pitch. And I thought, well, that’s interesting. Like, he actually went and he read venture blog and had to think about whether or not to include the demo because I hadn’t included it. So I should say this up front. You know, it was. Those were the basic slides. Not always going to be those. And demos are awesome. I mean, obviously, if you have something to demo, what more do you want to see? I mean, I want to know about the team, but, you know, if you have something to demo, the. The pitch can basically be, here’s the team and here’s the demo. The rest is almost, you know, completely irrelevant compared to those things. And then he demoed just a fabulous, really cool, interesting thing.
[00:37:01] Craig Syverson
And demoing is probably in some ways easier now with online things and much easier prototypes are easier to build and bring to you.
[00:37:08] David Hornik
And again, just like, you know, this is again the problem with the chip company. What can, what do you demo with a chip company? Even I was looking at this, this company that was going to do the encode decode for H264. And so they’re like, oh, you know, we have a demo we could show you running in the lab. And it’s running on a, you know, it’s not a chip, but it’s a blah. How much do you get out of that? First of all, it’s a little black boxy, right? Like, you know, how much do I believe we had a company pitch us on a perpetual motion machine. No lie. The guys came in and they truly had the perpetual motion machine. And they came in and they, you know, here we’re going to show you perpetual motion machine. And so they put in X amount of energy and then they measure it coming out and they demonstrate that it’s the same.
[00:37:48] Craig Syverson
Okay.
[00:37:49] David Hornik
And you’re like, oh, what’s under the hood. Well, you know, don’t look behind the hood. Battery, the ultimate black box, you know, and not a battery. I mean, they weren’t quite that full of it, but. And then, you know, my partner, one of my partners says, did it ever strike you that, you know, perhaps your measurement device is insufficiently sensitive to pick up the amount of energy lost through the device? You know?
[00:38:14] Craig Syverson
Yeah.
[00:38:14] David Hornik
And their answer was no, that’s not it. No, no. You know, I mean, talk about the ultimate black box. And in fact, that was clearly what was the problem. And they went to Stanford and they tested. It wasn’t in fact a perpetual motion machine because by the way, the laws of physics still apply. I know that’s disappointing to you.
[00:38:32] Craig Syverson
It is disappointing.
[00:38:34] David Hornik
It was disappointing to us. Man, talk about making a bunch of money.
[00:38:37] Craig Syverson
You think, holy cow.
[00:38:39] David Hornik
So anyway, so the demo, now the demo, right? The web demo or the software demo or whatever, then you could get a real sense. And in fact I met with, I met with a company today and they were talking about agile programming and how, you know, when you’re. So there’s this whole industry of people that are building applications for business and Basically software consultants, ISVs and likes that their job is to go to businesses and help them create purpose driven applications that will live in the company to help them figure out some process, you know, how to manage their particular supply chain or how to manage a call center, whatever these things are. And, and this entrepreneur was saying to me, you know, look, the problem with this is no matter how good the consultant and how well the business person has described their processes and what they want to automate and whatever else, at the end of the day you produce something after, you know, hundreds of thousands of dollars or whatever and then, and it doesn’t, it’s not what it was supposed to be. And so this particular entrepreneur was working on something that would do what that was this agile programming methodology that let them very rapidly prototype things. So you could say, hey, look at this, is this what you want? And you can say, no, that’s not what I want. Or whatever before you build out the full version with the, that’s enterprise class and etc. I think that’s super smart. And it’s an indication of what I see lots of which is very early demonstrations, whether it’s an HTML model or it’s a, or it’s, you know, or it’s something running Ruby on Rails that you pulled up quickly and you made it and now there, and there are a thousand people on it. You go wow. All right. I can see what that would be like. I can understand it and appreciate it.
[00:40:20] Craig Syverson
So this brings up a interesting question because it’s something I did at IDEO for some of our clients when they were younger startups and they had a product or they had a service. Is that my whole job there was making video to describe certain things. And some of those were in fact early venture ideas. And we had companies who saying, we can’t get second round funding because we try to explain what we’re doing, but in that short amount of time in the meeting, we can’t. So I’d make them a video that was five minutes or less that was clearly. It was just a demo of a what if? And it was very short. It wasn’t pitching anything. It was just sort of telling a story and putting this thing in context. Have you found those things to be valuable for you? Like if someone produces just a short piece of multimedia that sort of simulates the thing.
[00:41:05] David Hornik
Yeah. You know what, people do it so poorly.
[00:41:08] Craig Syverson
Yeah, right.
[00:41:09] David Hornik
That, that, that it ruins any hope.
[00:41:10] Craig Syverson
Yes. And that is the key.
[00:41:13] David Hornik
One in one in 100 you say, okay, I get what you’re doing. And that was compelling and I enjoyed it. Whatever you, you know, whereas vast majority of time you kind of create something and it’s like, now we interrupt this pitch for a movie.
[00:41:26] Craig Syverson
Yeah.
[00:41:26] David Hornik
And to show the movie and go, oh, you know, maybe you should just explain what you’re doing because it doesn’t do a good job. So now having seen your, your video, I can understand how that would have been really helpful.
[00:41:39] Craig Syverson
Yeah.
[00:41:40] David Hornik
But. So I think that’s a challenge.
[00:41:42] Craig Syverson
It is a challenge. I mean, it’s. Yeah. Find the right person to help you do that. Not that I’m, I don’t do that anymore, but.
[00:41:48] David Hornik
Right, exactly. You can’t go to Craig, but if you, but if you were to go to someone, he would be the guy who really understands. Yeah, you gotta have. Well, it’s got. Yeah, it’s gotta be. Because you have to understand, appreciate, you know, a couple of things. How do you take a big idea and crush it down into something smaller?
[00:42:05] Craig Syverson
Yeah.
[00:42:05] David Hornik
And then secondly, media, which is how do you understand how to create a story?
[00:42:09] Craig Syverson
Right, exactly.
[00:42:09] David Hornik
And I see this all the time. And this is true of a pitch too. Completely true of pitching a business, which. It’s all about a story. Pitching a business is sales sell. You know, you’re selling, you’re selling your business instead of you’re selling your product, whatever. It’s just all sales. And that’s all about telling this compelling story that convinces someone to do something.
[00:42:27] Craig Syverson
Right.
[00:42:28] David Hornik
So whether you’re a televangelist or you’re Steve Jobs or you’re, you know, pitching your startup, or you’re trying to convince me to buy Rock Band, it’s the same thing. You know, you got to tell this compelling story. There just aren’t that many people who are good at it.
[00:42:42] Craig Syverson
Yeah.
[00:42:42] David Hornik
So when you find someone who’s good at it, you know, Sandhill Road, you throw money at them. Oh, my God, you are an unbelievable storyteller. Here, you need to take my money.
[00:42:56] Craig Syverson
We had on many of those cases of our clients, when I made a video for them, it would be like, within a week they had funding and they were like, that was great because their particular things. I’m thinking one case in particular, but it was rather complicated. It involved audio, so it was easy to simulate for me and to create a very fast story that just kind of got in and got out. And, you know, the whole other thing, too, is, for those people thinking of doing this is don’t throw everything into the video. You know, it’s in the context of a pitch. The pitch is going to give you all the details, all the nitty gritty. The video. Just make it short and sweet of a vignette, of an experience, of a what if. If this thing were working. And don’t make it corny unless it’s completely corny.
[00:43:38] David Hornik
Right.
[00:43:38] Craig Syverson
And then it’s. But it’s such a fine balance.
[00:43:40] David Hornik
It’s like. It’s like the demo conference, Right?
[00:43:43] Craig Syverson
Exactly.
[00:43:43] David Hornik
Coming up.
[00:43:44] Craig Syverson
Yes, Coming up. Right.
[00:43:45] David Hornik
When you’re demoing at demo, you have to either be blatantly corny, goofy, you know, whatever to power your demo, or you just do the demo. Right. But don’t. You can’t go halfway.
[00:43:57] Craig Syverson
The halfway ones are just. They just. They’re awkward.
[00:43:59] David Hornik
Yeah.
[00:44:00] Craig Syverson
Yes.
[00:44:00] David Hornik
But it’s funny. I. So I had a buddy come into my. My class when we were talking about pitching and actually pitch his business, and he had. And. And it’s an interesting question because he was doing his pitch and you had four or five different slides leading up to this one slide that was the killer. And it was somewhat unclear what he did until he gets to slide number five. When you go, yowza. That’s, you know, I get it. And the question is, could he have started with slide five, you know, and skipped those first four and, you know, or did it require that kind of buildup in order to get to that? And. And a lot of that is the art of trying to pitch a business in a compelling way without losing people while keeping them engaged and all of that. And it’s. And you know, what you’re saying is true of demos, too. On the one hand, you want it to be quick and clean and easy. On the other hand, you want the person to be. Feel it’s sufficiently compelling that there’s something deeper there.
[00:44:57] Craig Syverson
Yeah. Pulled in.
[00:44:58] David Hornik
And, you know, to take this back to the. To the garage, to the rock band and. And the Guitar Hero experience, I really think it’s like video game design, which is. It has to be instantly compelling. You have to be excited, you have to be energized. But, you know, 10 minutes, minutes later, you have to still find something interesting. You have to feel like there are lots of layers and lots of value going forward. Forward. And if you don’t, you’ll say, well, this is kind of shallow and not that interesting. If you do, then you think there’s something pretty compelling and you’re. And you’re excited about it.
[00:45:30] Craig Syverson
So easy entry and then the ability to have more complexity come along later that you can. That you feel you can follow.
[00:45:38] David Hornik
Yep, absolutely.
[00:45:39] Craig Syverson
I’ve been in this notion of the randomness and predictability together and how compelling that is.
[00:45:46] David Hornik
I think you need to make a video.
[00:45:48] Craig Syverson
I think I should. And all I need to do is videotape our Roomba in the house.
[00:45:55] David Hornik
Right.
[00:45:55] Craig Syverson
Because the Roomba is just this most amazing entertainment device that happens to clean our floors. And it’s just that, to follow it and to watch it and to think about how it was programmed and to see its randomness and its predictability and how you predict it, then it changes. And it’s interesting. And.
[00:46:14] David Hornik
So this is what’s interesting. Right. Because we were pitched relatively recently on a. On a business that involved a device, a set of devices that would create a better Roomba. Right.
[00:46:26] Craig Syverson
Okay.
[00:46:26] David Hornik
And their argument is. Well, the Roomba is immensely inefficient that it ultimately is successful because it uses this set of, you know.
[00:46:33] Craig Syverson
Yeah.
[00:46:33] David Hornik
Chaos theory. Right. Isn’t that right. Right out of. What’s the movie? Jurassic Park. Okay, I’m going to drop a droplet of water. Which side of my hand does it fall off? All right, so the room uses chaos theory, you know, essentially, and. And randomness to be certain, over a period of time, some period of time, to cover the entire room. This device uses certainty. It uses a set of. A set of parameters to literally map the shape of the room.
[00:47:02] Craig Syverson
Yeah.
[00:47:02] David Hornik
So that when it goes, it does it in an efficient manner and makes its way around and it’s done.
[00:47:06] Craig Syverson
Yeah.
[00:47:08] David Hornik
And yet what you describe basically means that the room. But the thing about the Roomba that’s fun is the entertainment, not just that it cleans because. Because actually it’s not a particularly good cleaning device.
[00:47:17] Craig Syverson
I would beg to differ.
[00:47:18] David Hornik
Ah, well, you know, Kara Swisher would argue with you.
[00:47:21] Craig Syverson
Okay.
[00:47:22] David Hornik
I remember Kara’s. Kara’s review of the Roomba was, oh, the Roomba sucks. Only in this instance. That’s because it doesn’t.
[00:47:31] Craig Syverson
No. She might not have had the fifth generation.
[00:47:33] David Hornik
She did not. She. This was very early on.
[00:47:35] Craig Syverson
Yeah, very early. I totally agree.
[00:47:37] David Hornik
But the new one’s actually quite as a good cleaning device.
[00:47:39] Craig Syverson
Gen 5 of the. Of the vacuum and I. We don’t have the floor at the Scuba because I’m. We’re waiting for Gen 4, but yeah, it’s. It’s remarkable and it’s remarkable how much cleaner our house is because it’s going under the bed, wandering around and we’re getting all new furniture in. In the. In the living room. And it’s now it’s. We’re completely speccing for a Roomba friendly. So everything’s got raised and we got the right clearance because.
[00:48:03] David Hornik
Yeah. Because if you get just the right sofa, right. It boom, jams itself in. Can’t back out.
[00:48:09] Craig Syverson
It hasn’t. Has never jammed yet.
[00:48:11] David Hornik
You’ve never seen that happen.
[00:48:12] Craig Syverson
Hasn’t jammed.
[00:48:13] David Hornik
Man. You. You were like the iRobot spokesmodel.
[00:48:16] Craig Syverson
That’s so cool.
[00:48:17] David Hornik
Can you tell us about the. Their military applications?
[00:48:20] Craig Syverson
Oh, I spread. I can’t I’m at liberty speak about that.
[00:48:23] David Hornik
Oh, all right.
[00:48:23] Craig Syverson
And they’re doing some under NDA and they’re doing some rather questionable stuff around their ip. Unfortunately, they’ve been getting some bad press.
[00:48:32] David Hornik
Are they suing people for.
[00:48:34] Craig Syverson
Yeah, they’re being really uber protective of certain aspects of. Was written. It was in tech dirt. I have to look into it again. Interesting.
[00:48:43] David Hornik
Well, you know, this is the challenge, right?
[00:48:45] Craig Syverson
Yeah.
[00:48:46] David Hornik
Patents in theory should protect you. You should have a little. That’s what you’re allowed to patent things and then. And then enforce them. And yet in many instances when you’re overly protective and you do enforce, you look like the bad guys and it can injure you in some ways in the marketplace.
[00:49:00] Craig Syverson
Yeah.
[00:49:01] David Hornik
Which is kind of. It’s interesting contradiction to you know, the O’Reilly crowd loves the Roomba and they’ve open sourced kind of the Roomba control so you can have Roomba wars like I don’t know if you’ve ever been to an E Tech conference, but, you know, they have Roomba battles at the conference. I don’t know they’re gonna do it again, but E Tech’s totally fun because it’s like, you know, bunch of geeks talking about next gen technologies and. And so there’s usually a Make magazine crowd there, and they have Roomba fights and, you know, and then you play werewolf and, you know, it’s cool.
[00:49:33] Craig Syverson
Yeah.
[00:49:34] David Hornik
And so literally, this had been embraced, but I thought by iRobot and open an SDK and you could program your Roomba. And so it’s just an interesting contradiction to, hey, you can’t, you know, you can’t create the Bloomba. The Bloomba is probably, you know, a step too far at the flower trimming for your yards. The Bloomba.
[00:49:56] Craig Syverson
The Bloomba. I want the Windba to do the windows.
[00:49:59] David Hornik
Exactly. That would be the. Let’s see the Glassba. Glassba. It’s a new brand from Vespa, the Glaspa. All right, well, I think we’ve deteriorated sufficiently.
[00:50:12] Craig Syverson
Yes, I think we are. I think we did our duty to talk about something about business.
[00:50:17] David Hornik
Absolutely. And, you know, I’m gonna go to Venture Blog and I’m gonna write the post.
[00:50:22] Craig Syverson
Yeah, we’ll pull up some of the archives and talk about them on the show, too.
[00:50:25] David Hornik
There you go. We’ll see if there’s anything interesting.
[00:50:27] Craig Syverson
Yeah. Are you going to demo there?
[00:50:29] David Hornik
You know what? I cannot go to demo this year. I love demo.
[00:50:32] Craig Syverson
You know, we’ve been there were last year. I can’t go either.
[00:50:34] David Hornik
You can’t make it?
[00:50:35] Craig Syverson
No, I got. I got to prepare for these seminars. I got to write them now.
[00:50:38] David Hornik
Can’t go because you can make. Because Vivek, my buddy Vivek, my partner here at August, is going to go. You could go. That’d be so great. Force Vivek to do the show because it would be so. He just would be kind of horrified by the idea. He’s far too. He’s far too mature, professional, and talented to, like, be doing Venture Cast. But if you’re at demo, track down Vivek, say hi. But. Yep, I look forward to reading all about it and would love. Would love to make it. I’m on a little. I’m trying to, like, limit my conference going this year to only 20 or something. Jeez. I know that’s gonna be tough.
[00:51:16] Craig Syverson
It’s gonna be tough for a jumper like you.
[00:51:18] David Hornik
I know it’s gonna be.
[00:51:19] Craig Syverson
You’re in a 12 step program for. Yeah.
[00:51:21] David Hornik
Hi.
[00:51:23] Craig Syverson
Hi. My name’s David. I go to conferences.
[00:51:26] David Hornik
I’ve admitted the problem.
[00:51:28] Craig Syverson
That’s the first step.
[00:51:28] David Hornik
Baby steps, Craig.
[00:51:29] Craig Syverson
That’s it. I’m proud. I’m so proud. Well, thank you to Cashfly for continuing to provide the massive amounts of bandwidth for this show.
[00:51:39] David Hornik
That’s right.
[00:51:39] Craig Syverson
We appreciate it very much.
[00:51:40] David Hornik
My Harvard law student and the other.
[00:51:42] Craig Syverson
16 people and the guy in Australia who wrote to us last.
[00:51:46] David Hornik
That’s right.
[00:51:46] Craig Syverson
Thank you very much.
[00:51:47] David Hornik
Much.
[00:51:48] Craig Syverson
We’ll see you.
[00:51:48] David Hornik
What do you think? Couple weeks. Can we manage it?
[00:51:50] Craig Syverson
I hope so. I hope so.
[00:51:52] David Hornik
When are you. Where you. When are you back?
[00:51:53] Craig Syverson
I’m only gone for a weekend. I mean, I’m doing these little weekend jobs, but I have to. Next few weeks, I have to actually build the whole thing. I’ll. We’ll do. We’ll do it in two weeks. All right, bye.
[00:52:10] David Hornik
Each minute, the institutional investor has an average of 12. $12,000 of new money to invest. $12,000aminute. There are a good many ways that.
[00:52:21] Craig Syverson
Institutional investors are taking best advantage of.
[00:52:24] David Hornik
This versatile market created by broad public participation. And because most of your orders are.
[00:52:30] Craig Syverson
Executed in the regular auction market, let’s take a closer look at it, starting with a quick rundown on the men.
[00:52:36] David Hornik
Who transact your everyday business on the floor flooring.
