Generated Transcript

[00:00:15] David Hornik
Hello and welcome to VentureCast. I’m David Hornik of August Capital.

[00:00:21] Howard Hartenbaum
And I’m Howard Hartenbaum, also of August Capital.

[00:00:24] David Hornik
And Howard has been giving me crap this morning calling this the David Hornik show, which I don’t think is fair because Howard is talking just as much as I am. Now. Don’t be that way. That’s what you’re gonna do. This whole show, you told me you.

[00:00:40] Howard Hartenbaum
Pay me by the word and you’ve only got a budget of $38.

[00:00:44] David Hornik
Yeah, but I didn’t tell you how much I’d pay you per word. So you can keep up all the words you want.

[00:00:49] Howard Hartenbaum
We’ll negotiate that later.

[00:00:52] David Hornik
Welcome to the Howard Hartenbaum Show.

[00:00:54] Howard Hartenbaum
That’s not gonna happen.

[00:00:55] David Hornik
With your guest co host, David Hornik. Man.

[00:01:00] Howard Hartenbaum
What do you want to talk about today?

[00:01:04] David Hornik
We just had this big party at our office. We call it the August Annual, but it’s a little confusing because it’s not in August.

[00:01:12] Howard Hartenbaum
So I called in for a board meeting to be an observer at this company nearby now, and on the board is Josh Goldman from Norwest and Emily Melton, who’s at DFJ and moving to Mayfield. Congratulations, Emily. And the CEO and Mike Linton, who is the outside board director. He used to be at ebay. He was their cmo. And Bill Draper was there as well. And I called in, and when I called in, everybody was already there. Oh, Howard, thanks for the. Oh, there’s a great party. The August Annual was fantastic. And the CEO goes, what party?

[00:01:46] David Hornik
So every single one of them.

[00:01:48] Howard Hartenbaum
Everybody except the CEO. And I was like, oh, crap. So right there, I pulled up. I was the only guy calling. I pulled up the list, and we did invite him.

[00:01:57] David Hornik
Yeah, we had spam.

[00:01:58] Howard Hartenbaum
We had a lot of spam filter. So I said to him, check your spam filter. And he was like, oh, okay. It was just terrible. So next year, if we send out stuff, if we don’t see delivery.

[00:02:09] David Hornik
Yeah, we need delivery confirmation.

[00:02:10] Howard Hartenbaum
Delivery confirmation or that it was open. We’ll have to call. It was terribly embarrassing. It was like dead silence. What party?

[00:02:17] David Hornik
Well, I got an email from Mike Arrington saying. Did I. What? Am I off the list? Like, what happened?

[00:02:23] Howard Hartenbaum
Oh, he hit spam, too.

[00:02:24] David Hornik
Yeah. Nice. And so. It’s terrible.

[00:02:26] Howard Hartenbaum
You don’t want to.

[00:02:28] David Hornik
No, please. Arrington, you were on the list. I’ll bring you the list. I’ll show you. I had you on the list, I swear. Yeah, so anyway. But it was a good. It was fun. It’s funny, you know? So we we talk about process improvements in our companies all the time. Like, oh, there are ways to make the workflow make more sense, and it brings people in more quick into websites, et cetera. But I haven’t seen a better example of that. The physical workflow change than. Than last. Last party, where we changed. Where people came in and we put up a shade for the sun. All these, like, stupid physical changes that you think were completely irrelevant.

[00:03:05] Howard Hartenbaum
The big trick is. And people come in the front door, and then they don’t move in, and it crowds. So the trick is you put the bar as far away as possible. So people come in the front door, and then they’re like, they want to get a drink, and it pulls them all the way through the entire venue to get the drink to light, which is where all. And it worked perfectly. We had good distribution. And there was no crowding at the front because the bar was at the other end.

[00:03:26] David Hornik
That’s good. This is important stuff, I’m telling you. Those of you listening who are thinking, like, why does this matter? You know? It does. It made a huge difference.

[00:03:35] Howard Hartenbaum
Yeah. There was a lot of handshaking, and I was. You know, I’m kind of one of those hypochondriacs. Handshaking. And I was kind of washing my hands at the end three times over.

[00:03:43] David Hornik
That’s funny, because I went home and I was feeling sick. Maybe I got something.

[00:03:47] Howard Hartenbaum
Not me. I feel great.

[00:03:48] David Hornik
Who do you think. Who do you think gave it to me?

[00:03:50] Howard Hartenbaum
There was probably 100 people there who were sick, probably at least, but not me. We have flu shots in our building in October. You know that?

[00:03:59] David Hornik
Oh, sweet.

[00:04:00] Howard Hartenbaum
Pay 22 bucks and they shoot you in the arm.

[00:04:02] David Hornik
You know, they. I just read a thing that said that the H1N1 vaccine, that they thought you were going to have to take two shots for it to be effective, that they think it now will only require one.

[00:04:12] Howard Hartenbaum
Yeah. Twice as many people, twice as fast.

[00:04:14] David Hornik
Exactly. That’s good.

[00:04:15] Howard Hartenbaum
So I’m not going to do it.

[00:04:17] David Hornik
Are you one of these anti.

[00:04:18] Howard Hartenbaum
No, no, no. I just have once. I had a shot before, and I got this huge reaction from some ingredient in it.

[00:04:24] David Hornik
Yeah.

[00:04:24] Howard Hartenbaum
Made my skin, like, all red or something. And so I’m always afraid of shots.

[00:04:28] David Hornik
Did you at least immunize your children?

[00:04:30] Howard Hartenbaum
Yeah.

[00:04:30] David Hornik
All right, good. Because I can’t. That I make. That makes me crazy.

[00:04:33] Howard Hartenbaum
Yeah.

[00:04:33] David Hornik
Like, I’m worried. And I’m not gonna immunize her. You’re endangering the population of the human race by not immunizing your Children from these diseases that we can eradicate. Yeah, that’s my feeling, Howard.

[00:04:44] Howard Hartenbaum
No, I’m pro immunization. It’s just I’m afraid of, like, the flu shots, because once I had the shot and my whole arm got swollen and red and hot.

[00:04:50] David Hornik
I’m so sad for you.

[00:04:54] Howard Hartenbaum
They said next time maybe you could die. And your answer would be get some life insurance.

[00:04:59] David Hornik
You have a lovely family. I’m sure you have life insurance. Because I think you want to take care of them. That’s my sense.

[00:05:05] Howard Hartenbaum
Yes, I. Of course I do. I love you. My wife.

[00:05:08] David Hornik
Okay, good. You just never know.

[00:05:09] Howard Hartenbaum
Even though she doesn’t even know this show exists.

[00:05:11] David Hornik
Oh, really? See, my wife knows. She just intentionally would never live. Listen. So the only people. The only person who I mention who always is listening is my mother, who I mentioned a lot. Hello, Mom. I know you. I know you’re listening. You can pretend all you want. She doesn’t even pretend, actually. She’ll say, I enjoyed that conversation of the immunizations.

[00:05:30] Howard Hartenbaum
David has a nice picture of you on his desk.

[00:05:32] David Hornik
Yeah.

[00:05:34] Howard Hartenbaum
So, mom, you can rest assured that David thinks about you every day.

[00:05:37] David Hornik
Thank you, Howard.

[00:05:38] Howard Hartenbaum
Moving on.

[00:05:39] David Hornik
So the thing I like about the August annual. The thing I like about it is that. So originally we had. We did have it in August, but the problem with having it in August was people were still on vacation, you couldn’t get them, et cetera. And so we moved it to right at the end, after August, the beginning of September. And what I think it’s become is sort of this we’re get back to work, end of summer party, right? People come together and they, oh, what are you working on? And it’s a very energetic time for the entrepreneur and venture business because people really psych to be like folk refocusing their businesses and, you know, retail businesses, it’s coming up on their big season, and advertising businesses, it’s their big season. I mean, just everything kind of culminates in Q4 of the year. And so it was good. I mean, I think we had like 600 people. Six or 700 people.

[00:06:26] Howard Hartenbaum
But the kudos go to a friend of ours, a guy named Youta Matsuzaki who works at Rakuten in Japan. If you don’t know ractan, they’re an $8 billion market cap E commerce company in Japan. They have online trading platform and 35,000 storefronts.

[00:06:42] David Hornik
Wow.

[00:06:44] Howard Hartenbaum
Online storefronts. Yeah. Basically it’s like an ebay stores, but.

[00:06:47] David Hornik
It’S not ebay stores, Yahoo stores, but.

[00:06:49] Howard Hartenbaum
It’S for these guys are huge. 500 million a year in profit or whatever. And he is their kind of BD Corp dev guy. And I invited him to the lobby having no expectation that he would come.

[00:06:59] David Hornik
August annual. You did invite him to the lobby, but why isn’t he coming?

[00:07:02] Howard Hartenbaum
I think he might be.

[00:07:03] David Hornik
Oh, good. Well, he better email me.

[00:07:05] Howard Hartenbaum
Oh, or maybe he’s not. So the August annual. So August annual was Wednesday night. He showed up Wednesday morning.

[00:07:11] David Hornik
He showed up from where?

[00:07:12] Howard Hartenbaum
Flew from Tokyo and he came to the party and he was the last guy here because he was on Japan time and it was already daytime over there. So I think you had to escort.

[00:07:21] David Hornik
Him out at the very end, walked him to the front.

[00:07:24] Howard Hartenbaum
Thursday morning, he got back on a plane and flew back to Tokyo. So if we give a prize for the guy who flew the farthest for the shortest time to enjoy the hospitality, it was very nice to see him.

[00:07:33] David Hornik
Exactly. And on the opposite end of the spectrum, anyone from Benchmark who walked down the stairs.

[00:07:40] Howard Hartenbaum
Or it was too much trouble to walk downstairs. Yeah, right.

[00:07:42] David Hornik
Even worse. What’s all that noise downstairs? Oh, that’s the party you’re supposed to be going to.

[00:07:47] Howard Hartenbaum
Nah, it’s too far.

[00:07:49] David Hornik
Yeah, no, he’s heroic. That’s an impressive. That’s an impressive thing.

[00:07:53] Howard Hartenbaum
So if that’s like the attitude of the executives at that company, that company works hard so well.

[00:07:59] David Hornik
Seriously. And, you know, I’ve been trying to. I’ve been trying to discuss this with my children. The importance of working hard. I think people underestimate the importance of working hard. I think they overestimate often the importance of being smart. And smart’s great. Like, you know, but as I think smart, sort of the table stakes, like, okay, you’re smart, great. Now work. Now work hard. And I don’t want to hear about that. So I haven’t convinced my children, necessarily. At least not the lazier of them.

[00:08:28] Howard Hartenbaum
So I would. I would argue that a lot of success relies on luck. But you make your own luck. And one way you can make luck is by working hard.

[00:08:37] David Hornik
That’s right. No, exactly. If you can live two years in a year, then you have twice as much opportunity to run into luck. Right.

[00:08:45] Howard Hartenbaum
If you sit on your butt and you wait for stuff to come to you, probably not going to happen. But if you get off your butt and you work hard and you run around, you’re much more like the sales guys don’t sit behind their desks and wait for sales. They get up, they call people, they go to conferences, they Meet people and the guys that work hard, make money.

[00:09:00] David Hornik
Yeah, I think that’s right. At least that’s what I tell myself when I have another night of not sleeping.

[00:09:04] Howard Hartenbaum
Yeah.

[00:09:05] David Hornik
When I get to the venture business, I thought like, oh, sweet. I can, you know, work nine to five.

[00:09:11] Howard Hartenbaum
And you do.

[00:09:12] David Hornik
It doesn’t work that way, does it? Well, no, that’s true. 9am Till 5am I work 9 to 5, then I go home and hang out with my kids and then I work from 10 to 2.

[00:09:20] Howard Hartenbaum
So there’s some small percentage of the population like David Hornik and Bill Clinton, who literally can survive well on four hours or five hours of sleep per night. And most people in the population cannot do that. But if you look at many very successful peoples and peoples.

[00:09:38] David Hornik
That’s right, groups of people.

[00:09:40] Howard Hartenbaum
People, that’s a better word. Like presidents and prime ministers of countries and very successful large company executives, an extremely high percentage of them are the type of people who don’t need all that much sleep to perform.

[00:09:54] David Hornik
It’s sort of. I view it as sort of lucky because if I did need that sleep, then I’d have to decide between spending time with my children or working. And I think that you love your children and I do love my children, and that would be a tough choice. So I think the fact that I can, you know, hang out and spend time with my kids and then work all night is great. But I think it was just, sir. I mean, you know, I was a lawyer. So when you’re a corporate lawyer, like. Well, and the litigator before that, like, you just. You work as much as you have to work.

[00:10:20] Howard Hartenbaum
Yeah. So you know one guy who’s going to be working really hard is Brad Garlinghouse.

[00:10:27] David Hornik
That’s right.

[00:10:28] Howard Hartenbaum
So he is. If you don’t know Brad, he was an infamous guy at Yahoo and wrote the Peanut Butter Manifesto, basically describing how Yahoo was spread a little bit thin. And I’ve known him, but it was.

[00:10:41] David Hornik
But here’s the thing about the Peanut Butter Manifesto. It was in the spirit of positive, of constructive criticism. Right. It wasn’t like it was a great management socks. We’re cold.

[00:10:51] Howard Hartenbaum
He was trying to motivate people.

[00:10:53] David Hornik
Come on, people. Here’s what we got going. Anyway.

[00:10:56] Howard Hartenbaum
So you were saying, well, anyway, we’ve known Brad for years and I met Brad when we were just launching Skype. Very sharp guy. He was an entrepreneur. He built some companies. He worked at Yahoo for a long time and now he’s at aol. And he is going to be working hard because when you Get a guy like that who really understands the industry and is going into an organization and building out some new stuff. I bet he works 20 hour days for the next year.

[00:11:20] David Hornik
Yeah, well, I think, you know what’s interesting, what is interesting about AOL is, you know, look at, they’ve got some really smart new guys in there, and you look at them and go, okay, here’s, here’s a property that has a, has a pile of assets that could be really interesting with the right guys focused on it. And now they have the right guys. And, you know, so it’s just interesting to watch the ins and outs of the industry. Like if, if you had said a few years ago, oh, you know, Microsoft is going to kind of relaunch a search engine, I would feel, and there’d be a bunch of energy behind it and, you know, people would be feeling pretty good about Microsoft’s web strategy. You know, people would say, oh, really? Come on, you know, it’s Microsoft. But I would say that the sentiment right now is exactly that, like, people are pretty energized about what Microsoft is doing and how they’re thinking the web and, and, and they’re making a bunch of progress. And now you got AOL with some really smart guys at the, at the helm, and so these, you know, your fortunes can shift here in tech land.

[00:12:21] Howard Hartenbaum
And so all the people.

[00:12:22] David Hornik
All about the people. Speaking of people. Speaking of people. Well, no, exactly. I mean, we had a conversation before we started this show about, about my good, good friend Dick Costello. And Howard had a whole lot of penis jokes he was hoping to insert in this.

[00:12:45] Howard Hartenbaum
But I’m sure, I’m sure Dick has heard them all. My favorite one was. We were just gonna call you, Richard. The entire show.

[00:12:52] David Hornik
Yeah, just, you know, for the censors. Because I, we can’t, we can’t have Venture cast be put on the watch list. Yeah, but, yeah, no, I think the fact that Dick is joining, is joining Twitter is huge. And, you know, I knew that Dick was moving out to the west coast and, but he was pretending like, oh, my, I finally convinced my wife that it was nice out here. You know, he gave me this, this is the thing. Like, maybe he’s not my may. You know, maybe like, I think Dick’s like this good friend of mine and then. But he gave me this whole line that he was.

[00:13:25] Howard Hartenbaum
You think everybody’s your friend.

[00:13:27] David Hornik
Yeah.

[00:13:28] Howard Hartenbaum
Yeah.

[00:13:28] David Hornik
Well, no, only the people who are. I have lots of friends. Are you not my friend? What are you trying to tell me?

[00:13:36] Howard Hartenbaum
That’s called lighting him up and walking them in.

[00:13:40] David Hornik
But no, I’m good friends with Dick.

[00:13:41] Howard Hartenbaum
If you don’t know Dick, he is a very fun guy. He is really fun.

[00:13:45] David Hornik
Dick’s an awesome guy. But here’s the thing. This is actually. This is unfortunate for entrepreneurs who don’t live in the Bay Area, because I used to always use Dick Costello as the example of the guy who could live in another city, yet appear to live in Silicon Valley and know everybody and be engaged and be connected, and that you could do it, that you could be an entrepreneur somewhere else and still have that. That kind of connection with the tech community here in the Bay Area. And you know what?

[00:14:14] Howard Hartenbaum
And he has such a great connection. He’s now CEO of Twitter.

[00:14:17] David Hornik
Yeah.

[00:14:17] Howard Hartenbaum
So evidently, it does work.

[00:14:18] David Hornik
It does work. However, now he is. He has to move, living in the Bay Area. So. Welcome to the Bay Area, Mr. Koslo. And. And I think what’s interesting, obviously, is Dick. Dick ran. Created and ran Feedburner before this. He understands monetization. So I think, you know, we can all, rest assured, have those of you who are deeply concerned that Twitter won’t monetize its incredible traffic, have no fear. It’s on. Dick Costello is here. What’s the. I can’t sing this song.

[00:14:48] Howard Hartenbaum
Good.

[00:14:49] David Hornik
Now. Now I’m gonna have.

[00:14:50] Howard Hartenbaum
I don’t know what song you’re thinking of.

[00:14:54] David Hornik
I don’t know. I can’t come up.

[00:14:55] Howard Hartenbaum
Is here to save the day.

[00:14:57] David Hornik
Exactly. Oh, now. Now I’ve got Howard singing.

[00:14:59] Howard Hartenbaum
Great.

[00:15:00] David Hornik
That’s awesome. Anyway, so how did you trick me into that? That was awesome. So we got Dick. We got. We got Garling House. What? You know anyone else on the move?

[00:15:12] Howard Hartenbaum
No, I saw. I mean, on the venture side maybe a month or so ago, who moved?

[00:15:23] David Hornik
Well, so we can talk about Emily. This is interesting, right? Emily’s sort of young hotshot over at dfj, and she’s moving over to join the team at Mayfield. And, you know, these things, these moves don’t actually happen that often in the venture business. Right. I mean, they happen occasionally, but usually, you know, you have good, good solid venture firms and teams, and they stay together. And so. But anyway, I don’t think it’s an indicator of one thing or the other. Other than that, we just don’t really.

[00:15:51] Howard Hartenbaum
You don’t see it all that often.

[00:15:53] David Hornik
Oh, here’s a thought, though. Oh, all right, we’ll talk about that then. I’ll come back to it. But you’re right. Why. Why do you think that is? Why. Why is it that you don’t have a lot of these people moving around in the venture world. Right.

[00:16:04] Howard Hartenbaum
It’s relationships.

[00:16:05] David Hornik
I guess that’s right. I mean, it’s a partnership. And so it’s hard enough. I mean, here’s the thing about partnerships. Anyone who’s been in a partnership knows that partnerships are hard. Right. They. They’re as much as you like your partners, and I love my partners and they love me, I’m sure. Right. This is when you say.

[00:16:20] Howard Hartenbaum
Right, right.

[00:16:21] David Hornik
Okay. You know, it’s a relationship. It’s like a family or a marriage or whatever. I, you know, insert relationship here. And so if you have something that’s working, that’s like a tricky. That’s a, That’s a tricky dynamic. And then to find a new set of people who you feel good about joining, etc, and feel you’re gonna hitch your future to that group of people, et cetera. I mean, that’s a. That’s no small. That’s no small move. So it’s not that surprising to me that it doesn’t happen that. That often. Actually, the thing that’s surprising to me is that anyone ever joins an existing firm. Right. Like. Like, how in the world did we come to the conclusion that you should join us in this partnership? That seems, that seems like madness.

[00:17:03] Howard Hartenbaum
I’m sure they were thinking the same thing when you joined.

[00:17:06] David Hornik
No way. More so when I joined.

[00:17:08] Howard Hartenbaum
The other guy I was thinking of recently was Gideon Wu, who joined Khosla Ventures.

[00:17:13] David Hornik
Yeah. Well, that’s sort of interesting, isn’t it?

[00:17:15] Howard Hartenbaum
Yeah. He was CFO at Facebook beforehand and really nice guy.

[00:17:21] David Hornik
I don’t know Gideon, but I’ve heard nothing but good things. He’s very smart. But it’s interesting because Gideon isn’t.

[00:17:26] Howard Hartenbaum
I see a co investment with Khosla Ventures in our future.

[00:17:29] David Hornik
Good, let’s do that. Except that coast, so coastal, does these kind of clean, techy things and Gideon.

[00:17:33] Howard Hartenbaum
They have the early stage stuff.

[00:17:34] David Hornik
Do they? Other stuff. Because, I mean, Gideon, that’s not really Gideon’s focus. Right.

[00:17:38] Howard Hartenbaum
I think that their new fund that they just raised is now the largest fund venture fund this year. Over a billion dollars. Yeah.

[00:17:48] David Hornik
Man, oh, man. Dwarfing Our mere 600 million. 650. What was it?

[00:17:52] Howard Hartenbaum
651.

[00:17:53] David Hornik
Yeah. Excuse me, 650. Do I hear 652.

[00:17:57] Howard Hartenbaum
Sold. That bid cost you 6.

[00:17:59] David Hornik
Did you notice, by the way, that there were like a million pregnant women at our party at the August annual. No, you didn’t. It was interesting. Like a whole bunch of my friends in the Industry who were springtime were pregnant.

[00:18:14] Howard Hartenbaum
Wait, I always get in trouble when I start saying these things. So no, I didn’t notice any pregnant.

[00:18:18] David Hornik
Women at the party. Okay. I mean I’m not. No, I thought it was exciting. Obviously. I have four kids, I like babies. But it was just interesting to see because very rarely. So first of all in tech events they tend to be very male heavy and I’d say that the August annual, it does a pretty good job of having lots of women from the industry. But you rarely, it’s just this interestingly rarely see pregnant professional women. It’s just not for whatever reason and yet.

[00:18:44] Howard Hartenbaum
Why? Because you think they hide it or they just don’t go out?

[00:18:47] David Hornik
No, I don’t know what it is. Maybe, you know, maybe it’s by the time you’re pregnant, you’re not in the industry or whatever. But. But there.

[00:18:54] Howard Hartenbaum
Emily has two weeks to go.

[00:18:55] David Hornik
Six or seven women.

[00:18:57] Howard Hartenbaum
Yeah.

[00:18:57] David Hornik
@ the, at the full term.

[00:18:58] Howard Hartenbaum
Pregnant.

[00:18:59] David Hornik
Yeah, like very pregnant.

[00:19:01] Howard Hartenbaum
I was hoping one would be born right there and then we could name it like Augustus or Augustine.

[00:19:07] David Hornik
That would have been awesome. No, we didn’t have that. But we did have a couple who were a couple weeks away and they were. Yeah, they were, they were. It was hard, you know, it was a good thing it wasn’t too crowded. Would have been hard to get too close.

[00:19:17] Howard Hartenbaum
So are you saying that with the demise of the economic cycle and people just basically didn’t have as much money to run around and go spend on travel and entertainment, instead they stayed home and.

[00:19:29] David Hornik
No, I wasn’t. I mean that’s an issue. That’s an interesting thing.

[00:19:32] Howard Hartenbaum
We may have an increase in the birth rate as people, I think like that story, you know, from some big blackout in New York City a long time ago that a huge. So maybe the economic cycle is going to produce it’s self healing because people stop spending money, they stay home, they make babies. A year later, they make a baby, 20 years later, the economy is all fixed because we’ve got all these new workers.

[00:19:52] David Hornik
Sweet.

[00:19:53] Howard Hartenbaum
So invest in things related to babies now.

[00:19:55] David Hornik
I wasn’t actually saying that, but that’s an interesting.

[00:19:58] Howard Hartenbaum
Looking for investing.

[00:19:59] David Hornik
It’s an interesting theory, Howard, and I like it. It’s very nice.

[00:20:02] Howard Hartenbaum
Speaking of investment trends, so I’ve been fascinated with all the stuff about robots lately. I mean I was a mechanical engineer.

[00:20:09] David Hornik
All right, so this is just something you like.

[00:20:11] Howard Hartenbaum
This is. And I went to MIT and to be a mechanical engineer at MIT, you have to take part in this 270 contest. You build a battle robot. Basically they give you a box to crack.

[00:20:20] David Hornik
Battle though, right? It’s like you have to figure there’s some task, it’s a competitive task, right? But you have a task ahead of.

[00:20:26] Howard Hartenbaum
Time or so what they do is they give you a box and all the stuff in the box has been donated. And there’ll be springs and wires and motors and wood and toilet paper rolls and all sorts of random stuff in the box. And you’re only allowed to use that stuff in the box, except for glue. I mean, if you want to screw, you got to make your own screw kind of thing. That way you can’t take 10,000 screws and make a counterweight with it. And then there’s a task. In the year that I did it, there was a big table of styrofoam pellets. And you started up at a springboard above the table. And then when it started, both your item and your competitor’s item dropped to the table. You had to rush to the middle and grab the ball and push it onto your competitor’s side and keep it there through this 30 or 60 second cycle. Maybe it was 30 seconds and whoever side it’s on is the loser. And so it’s a task, but there’s some competition to it. And I noticed lately.

[00:21:21] David Hornik
So how’d you do?

[00:21:23] Howard Hartenbaum
I did quite well, actually. I got number two.

[00:21:25] David Hornik
Wow.

[00:21:25] Howard Hartenbaum
Which made me on tv, which was pretty good. And I, I had one of the simplest designs, which generally simplicity is a good thing in design. I didn’t get number one. And the number one design was quite similar to mine, but evidently better.

[00:21:37] David Hornik
Slightly better, yes, but ever so better.

[00:21:41] Howard Hartenbaum
I’ll find the video somewhere and show you. It’s pretty cool. So my kids, my dad started building these bobot programmable robots with my kids. You build a physical robot and then you teach the kids simple basic and you teach them how to program the robot. And then I was noticed on TechCrunch, this great article about this startup company that the founder of iRobot has done that Amazon and some unnamed big name Boston VC had invested in. And there was a cool video about pick and ship robots in a factory warehouse. And then I went to this Nokia ideas camp that Valerie Buckingham had set up two weekends ago and three guys brought these battle robots and they were serious robots, like 50, 60 pounds each, lots of metal pounding, you know, hammers to destroy the competition.

[00:22:32] David Hornik
Watch Robot Wars. I mean, these are Robot Wars.

[00:22:35] Howard Hartenbaum
I don’t watch tv.

[00:22:35] David Hornik
Oh, well, you should, because on Discovery Channel or Whatever. They have Robot wars, and it’s exactly this. It’s like these giant things, and they have cutting and smashing.

[00:22:43] Howard Hartenbaum
And so I think it is a fantastic thing because people are building stuff. It’s not just a piece of software that move bits around on the screen, but they’re building these items, physical items. There’s a lot hardware engineering that goes into it, structural engineering, all sorts of design work, all sorts of software work, fancy creativity that go into these things. And if this is a popular thing, I would say the future is very bright for a lot of industrial robotics and maybe home robotics. I think it’s an interesting area now.

[00:23:12] David Hornik
That stuff will be cool. I mean, look at if you had asked someone, will Roomba be an interesting product and sell millions of units? That’s ridiculous. This little disc that’s zipping around your house, sweeping it up. And yet it’s been a wildly successful product for iRobot. And, you know, here’s iRobot, a company that got started to do military robots and still does these military robots that go in and either do reconnaissance or actually can, you know, do sort of more dramatic things. And then you have Roomba that sweeps up the room. But I think the other thing that’s interesting about these is that not only is it these physical robots that are cool, but it’s that they have this integrated software experience that makes the huge difference. Right. The capacity to have really lots of sensors and lots of intelligence built into these things that’s changing things. And I look at, frankly, all of the physical device design now is as much a software delivery experience as it is a hardware experience. Obviously, the iPhone and the ipod are the best example of that. But, you know, if they had little.

[00:24:16] Howard Hartenbaum
Legs on them, they’d be really cool.

[00:24:17] David Hornik
Yeah, right. And you could just go and it would run over to you.

[00:24:21] Howard Hartenbaum
You can buy, you know, expensive toys on the Internet now, which are basically robots, and they’re in your house, and you can control them over your wifi from a remote location. You can sit at work, and you can make the robot go across the house and harass your pet or take a picture or start talking. And I mean. All right, so robots. Kind of neat. I hope to see more robot stuff.

[00:24:40] David Hornik
You’re working on robots. Howard’s your man. Did you ever see that?

[00:24:43] Howard Hartenbaum
Mr. Roboto.

[00:24:45] David Hornik
Arigato. Mr. Roboto. And he speaks Japanese. That should be helpful.

[00:24:50] Howard Hartenbaum
I can say Mr. Roboto perfectly.

[00:24:55] David Hornik
That’s very nice, Howard.

[00:24:56] Howard Hartenbaum
Anyway.

[00:24:57] David Hornik
But can you say, I can’t. I can’t come up with that. I’VE never heard you speak Japanese. Let’s hear it. What do you got?

[00:25:05] Howard Hartenbaum
What do you want me to say?

[00:25:06] David Hornik
I don’t know. You have to come up with something. Say something interesting. I mean, you know.

[00:25:18] Howard Hartenbaum
I basically said, you know, we’re going to be using Japanese in all our future shows. I don’t know what kind of hell of a host you’re going to be in Japanese. So I’m going to take control of this or something.

[00:25:27] David Hornik
Ok. So it’s basically the Howard Hartenbaum show.

[00:25:30] Howard Hartenbaum
And I know how to swear in Japanese as well.

[00:25:33] David Hornik
Howard San show. I’m out. I’m completely out.

[00:25:37] Howard Hartenbaum
The most common mistake made in Japanese is people you put san as an honorific on somebody else’s name and you never put it on your own name. So you can always tell the real rookies when they come to Japan and they’re introducing themselves to their Japanese host and they say, hello, my name is David Dasan. You’re basically saying, I am the honorable, most important person in the room. Mr. David, it’s always terribly embarrassing for all the Japanese, but. But I’m sure I did it myself when I was getting.

[00:26:06] David Hornik
This happens. This happens. Well, there you go. But I didn’t. I referred to you, which you are.

[00:26:10] Howard Hartenbaum
The most honorable person in the room.

[00:26:12] David Hornik
Exactly as I am. The two of us sitting here.

[00:26:16] Howard Hartenbaum
Yes.

[00:26:16] David Hornik
That’s, you know, high bar there, Howard.

[00:26:19] Howard Hartenbaum
Yeah, sorry.

[00:26:20] David Hornik
All right. What else is happening? What else is happening that’s worthy of discussion? Anything? I don’t know.

[00:26:28] Howard Hartenbaum
I was having a chat with somebody earlier in the week about what would happen if we suddenly had lots more entrepreneurs, like qualified, educated, smart, understood how to set up businesses, suddenly had all these great ideas and started pitching them to. I mean, there’s enough money to go around on the investment side, but if you suddenly had a lot more companies, what would kind of the outcome be? And I came to the thought that I don’t think it wouldn’t create lots more companies. It would probably create. It would create a lot more companies in the short term, but it would create less companies in the long term.

[00:27:08] David Hornik
So you think there’s sort of a zero sum game of, you know, available total economic gain that could be sopped up by future startups?

[00:27:20] Howard Hartenbaum
I think it would reside there would be lower. I think it’s worse than zero sum game. I think actually the entrepreneurs on average would make less and the investors would make less because more money would be invested and there’d be more companies that are overlapping and spending money. And as a result, those companies would be less likely to succeed. So the investments would be no good and the founders would be less likely to succeed and wouldn’t make money from it. And maybe the number of successful big companies coming out of it would be less because you have five companies that are so similar fighting against each other and none really pulls away.

[00:27:52] David Hornik
So this sort of, I mean, it sort of happened right in the late 90s where it was so clear there was money to be made, that people were starting all sorts of companies. And suddenly there was, for every pets.com, there was petsmart.com and doggy.com and whatever. Smartpets.com exactly. And so in the end, people did sort of cannibalize the markets and a bunch of things failed. And you know, sure, the market market crashed and that was a factor. But on the other hand.

[00:28:20] Howard Hartenbaum
But maybe that’s why the market crashed.

[00:28:22] David Hornik
But I think at the time people thought, well, less qualified entrepreneurs are coming to build these things, that people are focused on the money as opposed to the entrepreneurship. And so if we could truly produce a world full of a lot more qualified entrepreneurs, people who are excited about company building and focused on company building, maybe they wouldn’t have, you know, go for the same things. Maybe they would expand the pie and say, oh, robots are interesting. Let me approach this robot question. And oh, but there are robot companies.

[00:28:51] Howard Hartenbaum
That are starting good.

[00:28:52] David Hornik
So they could make a robot company dealing with yard robots. Right. Instead of just doing the same thing, et cetera and so on.

[00:29:00] Howard Hartenbaum
Heavy yard robot. It’s called My Daughter who Pushes a Lawn Mower.

[00:29:03] David Hornik
Okay, that’s one way to look at it.

[00:29:06] Howard Hartenbaum
I was thinking geographically it makes sense and that people are trying to build companies that basically cover all needs for the whole world. A search engine that the entire country or the entire world can use. But I’m sure that the needs of people in cold weather climates versus warm weather climates are very different. And you could have companies that are started in Minneapolis that would never be started here, and they could be very successful in the northern half of the US and northern Europe or whatever that don’t get started because there’s no infrastructure for financing. There’s. So I was thinking if there’s a lot of more entrepreneurs starting things, providing that they were geographically spread out, they’re all started here in Silicon Valley, I think would be bad.

[00:29:44] David Hornik
Right? We just need to have them. And I agree with you. Like, one of the things that’s interesting when you see startups from other parts of the country and the world is that they’re influenced by the places that they come from and what you know. So if you, if you live in and around John Deere and John Deere factories and understanding that kind of big equipment, then you’ll know things that might be interesting, commercially interesting opportunities that you and I have no clue about. Like, you know, I don’t know anything about commercial tractors or whatever. But so, and, and there, you know, hundreds and thousands of industries that Silicon Valley doesn’t know anything about but could be, could be well served by innovation. So I think that’s interesting. And then this idea of the world, like, you know, there are all sorts.

[00:30:27] Howard Hartenbaum
Of things, mobile banking in India, maybe it won’t be important here because we all have bank accounts. But, but in India they don’t have credit cards and they don’t have bank accounts and they have mobile phones and there’s some way of making that work.

[00:30:36] David Hornik
Exactly.

[00:30:36] Howard Hartenbaum
But they shouldn’t expect it’s going to take over here.

[00:30:40] David Hornik
So one of the problems we’ve had in mobile is that we’ve made this mistake, right. Like, oh, American’s trying to figure out how to do mobile, when meanwhile, mobile’s so much more important and prominent in other places in the world and can we really export it from here to other places or are we dealing with American uses of mobile? Which may be fine, and don’t get me wrong, but I’m not convinced that I’m going to be able to fund a company that’s going to be able to understand the mobile needs of the Korean population.

[00:31:08] Howard Hartenbaum
Yeah. So the most innovative mobile product to hit the market, I would say, is the iPhone. But because of the platform and the App Store, people are building apps for it all over the world as it launches in new markets. And they’re taking care of different needs in different markets and some of them transfer and some of them don’t. But it was founded here.

[00:31:28] David Hornik
Well, yeah, well, great. The platform was, but it’s extensible and so it may have the possibility, as can Android, to have sort of broader reach. So just back for one second to this idea of more entrepreneurs and growing global footprints and all. I was reading Brad Feld’s blog, Failed Thoughts Today, and he pointed back to an earlier argument that Paul Graham made. Paul Graham from Y Combinator, about the idea that we really need in this country to allow visas for foreigners who want to come in and start companies and that there should be basically an entrepreneur visa that you should be. If you’re going to come and start a company in this country, then you should be able to get a visa. You shouldn’t have to go through all these, the rigmarole. And maybe it’s not for a million people a year, but if you were to have, I think Brad says 10,000 entrepreneur visas, founder visas, think that would start another 10,000 companies or some fraction thereof and that that would be good for the economy.

[00:32:33] Howard Hartenbaum
And then you would have states and cities, whatever, competing for those people if they’re moving here to get them like we do. See, you see magazines sometimes and you’re reading an article and you realize it’s an advertisement from. We’ll pick on Minneapolis today. Minneapolis is a great place to start a business. And here’s all the great companies and here’s our worker demographic and here’s their cost and here’s our tax structure. And some guys read maybe I should open a company in Minneapolis. And you look at how there’s grants that are made and tax exemptions and you look at the Singaporean government. If you start a business, they’ll just gift you a matching amount of any amount of money you raise from a private investor, which I think is fantastic.

[00:33:10] David Hornik
And I think if we Canadian government does similar things with expense towards company.

[00:33:15] Howard Hartenbaum
Building in Canada, I could imagine if there was this visa thing you would see Minneapolis saying come and set up your company here. And if you raise capital from a private investor that is then applied towards hiring people here, we will match it with tax money which all comes back to them in taxes anyway from the process. And I think Paul’s idea was great. And how do I vote for that?

[00:33:36] David Hornik
Well, you know, so I guess Brad is actually chatting with some congressman about this congressperson about it. And so Brad, count us in the list of people who would be happy to come agree that this is a great idea and good for our economy and good for, you know, I mean, particularly in a time when there’s so much consternation about immigration. Oh, our economy and the immigration like this just has to be viewed differently. It’s good for the country, it’s good for entrepreneurship. So hopefully the idea will move forward. I think it’d be pretty cool.

[00:34:09] Howard Hartenbaum
You pulled up the article that Brad wrote and I like the comment here. It’s making sure that the people that we’re saying are starting a business actually have some background that would be relevant for that, like having a degree from a four year, an accredited four year college anywhere in the world and computer science or engineering or whatever it may be. I don’t think you have to restrict it down so much. But at least we’re not saying we’ll give. Anybody who says they want to start a business can move here. I think there should be some.

[00:34:37] David Hornik
There’s got to be a process, right?

[00:34:38] Howard Hartenbaum
Process behind it.

[00:34:39] David Hornik
Yeah. No, Brad proposes either there’s some panel of people who say, is this actually a business?

[00:34:42] Howard Hartenbaum
Or I volunteer David to be on the panel.

[00:34:45] David Hornik
All right. I would love to be on the panel. So far, it’s me, Brad Feld and Paul Graham. I don’t know what that. I can tell you that that is a panel that’s just built for.

[00:34:56] Howard Hartenbaum
Built for a lot of yeses.

[00:34:58] David Hornik
For trouble. For trouble. That would be good. So I was also reading. I was reading. So I’ve started playing with Foursquare. I had, I had this great entrepreneur in the other day, was chatting with me, guy named Adam Rifkin. And Adam, as you know, has, has been at the front of a bunch of interesting trends. And he was. And we started talking for whatever reason about Foursquare. And I guess he is a fanatic about Foursquare. And Howard, you say you haven’t yet put Foursquare on your iPhone, but Foursquare is this kind of location based thing. He’s gonna do it right now. Hang on. You know, it’s this location based thing and you kind of, you state where you are and you can, you can interact with other people on Foursquare, etc. And we discovered that actually August Capital is on Foursquare as a location. So I have just been named the mayor of August Capital, which is really why I had to get on Foursquare. It’s important. Like, who else could be. That would be rude. I might let Howard be mayor of mayor of August Capital, but can I.

[00:35:58] Howard Hartenbaum
Be the junior mayor?

[00:36:01] David Hornik
Yes, Vice mayor. It’s like being the viceroy in Star Wars. But anyway, so I was reading Fred Wilson’s blog and Fred just seed funded Foursquare along with the O’Reilly Alphatec guys and some other smart people. And he was sort of lamenting in his blog the fact that he had already blogged before he funded them. He had blogged about how much he was sort of smitten with Foursquare and thought it was interesting and liked it. And then he decided to try to fund them. And he said that the financing was really competitive. And so his post is sort of like, you know, did I create do myself a disservice by talking publicly about things that I was interested in before I funded them and then thus sort of creating this interest in the company that resulted in more and more People giving them term sheets and driving up the price, et cetera.

[00:36:55] Howard Hartenbaum
Probably. Except the fact that he said that he liked them and was willing to talk publicly about it may have been the reason why the founders weren’t with him.

[00:37:02] David Hornik
Yeah.

[00:37:03] Howard Hartenbaum
Or participating with.

[00:37:03] David Hornik
Well, I think it’s probably one of them. Right.

[00:37:05] Howard Hartenbaum
Bill Gurley does that a lot. He likes the company, and he gets excited about it even before he’s invested. You’ll see him blog about something sometimes. So if you watch what he’s blogging. I remember he got real excited about Skype before he even met them. And he started blogging about them, and the founders called him and said, hey, you’re pretty cool. You’re blogging about my company. He’s like, that was what I wanted.

[00:37:24] David Hornik
Oh, so basically I should start blogging about things I’m interested in. Is that what you’re telling me? Is that the strategy? I’m guessing.

[00:37:31] Howard Hartenbaum
I don’t know. I like that company bump.

[00:37:36] David Hornik
I do, too, Howard.

[00:37:38] Howard Hartenbaum
I never thought I would be interested in something that, like, as a business that’s making an iPhone app, but I like the physical interaction bump is this software you put on your iPhone and you turn on the software and you physically bump hands, like Obama does with his wife. And you can transfer information back and forth between your phone, like contacts or pictures or whatever. And the physical interaction and the feedback, you know, the accelerometer and the timing makes it identify phones and this physical, you know, vibration, the haptic response you get in this phone for doing that. I was an ergonomics engineer in Honda in a car company for a while, and I actually think what they’ve done is really materially different from. People say, well, you can just transfer information by pressing a button in exchange. But the fact that you physically bump. Even though we’re all worried about catching swine flu, there’s no. There’s no swine flu from bumping.

[00:38:31] David Hornik
Exactly.

[00:38:32] Howard Hartenbaum
That just interests me and. Interesting team, interesting guys.

[00:38:35] David Hornik
No, that’s cool.

[00:38:36] Howard Hartenbaum
So if you haven’t tried to try it out.

[00:38:37] David Hornik
Yeah. And actually, you know, I’ll bump you. What’s interesting? What do you think? Oh, great. That’s all we need. As long as it’s bumping. Howard. No. I was watching an iPhone commercial recently, and they have bump on the iPhone commercial, and I think. I think it’s interesting. Apple is definitely able to make applications interesting and prominent by featuring them on their. You know, there’s an app for that commercials.

[00:39:03] Howard Hartenbaum
So their whole screening mechanism is very obvious. It’s. They pick stuff that is fun, it’s easy to use and it highlights the special capabilities of the phone, which is great.

[00:39:12] David Hornik
It’s great for Bump, it’s great for Apple. I mean, I think it’s cool they’re.

[00:39:15] Howard Hartenbaum
Not highlighting some mobile search company.

[00:39:17] David Hornik
No, exactly. Well, yeah, not anything. And, you know, so I will say here I am. I keep getting notifications now about who’s where on Foursquare. My pocket keeps vibrating.

[00:39:30] Howard Hartenbaum
So there’s been a bunch of companies that tried to do that with a downloaded app and did not. I think Plista was one of those in Germany that was then bought by Nokia for a few tens of millions of dollars type of deal.

[00:39:44] David Hornik
That’s good.

[00:39:46] Howard Hartenbaum
But it just didn’t get the adoption they wanted. They would identify WI fi base stations where people were at, and then when other people were went to them, you could find out where they were and you could say, who are your friends and who are not your friends? You know, where your friends were. It’s a little bit different. There’s a lot more gaming theory put into Foursquare with stuff like, you know, your early on recognition and badges and all that. So I think it’s a much more advanced version of it. But it has been tried and even turned into some. I think it was Plista turned into acquisitions for people in the past. So maybe Foursquare’s future is bright.

[00:40:15] David Hornik
Well, there you go. There you go.

[00:40:17] Howard Hartenbaum
So David’s saying he’s very interested in Foursquares and then. And Bump and he’s the mayor of himself.

[00:40:24] David Hornik
I am the mayor of. I’m the mayor of my home.

[00:40:27] Howard Hartenbaum
It’s like being king of the dipshits.

[00:40:31] David Hornik
Wait a second. I think this has taken an ugly turn. I don’t. I don’t think that.

[00:40:35] Howard Hartenbaum
Oh, I think you’re gonna be cutting this part out too.

[00:40:38] David Hornik
Yeah, I’m gonna cut it out. That’s right. You’re done. This, this piece. I think that’s enough.

[00:40:44] Howard Hartenbaum
I think we’ve been going. It’s probably like lunchtime. I’m getting hungry. I didn’t have my second breakfast.

[00:40:49] David Hornik
Where are you going? Where are you going to lunch?

[00:40:51] Howard Hartenbaum
Probably the same place you’re going. My favorite Japanese restaurant outside of the country of Japan is walking distance from my office called Kegetsu. And it is real Japanese chefs, real food, very high quality stuff. It ain’t cheap, but it’s good.

[00:41:08] David Hornik
It is good.

[00:41:08] Howard Hartenbaum
And if you want to have a romantic dinner in a real Japanese restaurant, it is the place to go if you want to have an excellent high quality, healthy business lunch. Kegetsu is the place for you.

[00:41:18] David Hornik
Except that you’ll almost assuredly bump into either me or Howard.

[00:41:21] Howard Hartenbaum
Or both.

[00:41:22] David Hornik
Or both, as is the case today.

[00:41:24] Howard Hartenbaum
I am not promoting this. I have no intent to invest in this company nor am I a shareholder with any.

[00:41:29] David Hornik
But you are promoting it because I love Kagetsu.

[00:41:32] Howard Hartenbaum
But sometimes promoting your favorite restaurant is bad because it gets too crowded and.

[00:41:36] David Hornik
We can’t get a transformation.

[00:41:38] Howard Hartenbaum
But keeping them promoted and well staffed keeps them a good restaurant.

[00:41:42] David Hornik
Well, I will see you there, Howard. Have a good lunch.

[00:41:45] Howard Hartenbaum
I will see you all there at.

[00:41:46] David Hornik
KE Getsu on Sandhill Road. And until next time, it’s in Sharon Park.

[00:41:51] Howard Hartenbaum
Sharon Park.

[00:41:52] David Hornik
Until next time. I don’t know. We don’t have a tagline to close the show, so it just sort of rambles together.

[00:41:58] Howard Hartenbaum
Good morning, Vietnam.

[00:42:00] David Hornik
Yeah, that’s not it. All right, then how about just bye bye.