Generated Transcript

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

[00:00:20] Howard Hartenbaum
And I’m Howard Hartenbaum, also of August Capital. And today we have a guest, a special guest.

[00:00:26] Jeff Klavier
And I’m Jeff Klavier of August Capital, not from softech vc. Thank you guys for having me.

[00:00:31] David Hornik
Yay, Jeff. Have we ever had any other guest on adventurecast? I don’t know.

[00:00:36] Jeff Klavier
I think I’m the honored special guest that has been here two or three times, and I’m the only one because it’s such a bad experience for you guys to have someone else that you say, God will never do it again.

[00:00:46] David Hornik
Oh, I thought you were going to say it’s such a bad experience to work with us that no one would ever come.

[00:00:52] Jeff Klavier
No, I think I might be the only sort of VC listening to venturecast and sending you comments and emails and saying, hey, you guys, this or forgot that. And that’s what gets me here. But I’m really thrilled to be on the show.

[00:01:01] Howard Hartenbaum
Jeff doesn’t know that after he leaves, we’re going to edit out all the stuff we want and just make him look like a fool.

[00:01:06] David Hornik
Yeah, right, Exactly.

[00:01:08] Jeff Klavier
I don’t need your help, I guess.

[00:01:10] David Hornik
I got to tell you that editing thing. So I was just. They had this. This roast of Robert Scoble this week, Startup to startup. I think both of you have been to startup to Startup before.

[00:01:22] Jeff Klavier
Many times. Many times.

[00:01:23] David Hornik
So startup to startup is. So those of you who don’t know, it’s just. It’s this cool event. Basically, it’s largely founders of companies getting together. There’s a speaker or two who sort of talk about important things that have to do with the entrepreneurial process. And then there’s a roundtable discussion at each table where people talk about topics that are relevant to building startups.

[00:01:45] Jeff Klavier
And it’s a structured conversation where we try to address a few key questions every time.

[00:01:49] David Hornik
And there’s a moderator. I assume you’re a moderator.

[00:01:51] Jeff Klavier
No, I’m not the moderator. I’m the suit at the table. So I’m the VC at the table. And the issue as a moderator is that you’re not supposed to talk all the time, which I do. And so that’s why.

[00:02:00] David Hornik
So you refused to be a moderator?

[00:02:02] Jeff Klavier
No, I was a moderator once.

[00:02:03] David Hornik
And then you got fired.

[00:02:05] Jeff Klavier
That was. Yeah, I was out.

[00:02:06] Howard Hartenbaum
You just use the C word. Do you know how it used to be? Everything was convergence and then everything was collaboration. Now everything is conversation. What’s the next C word that’s coming? If you can identify that trend now we can make money on it because now there’s like a hundred companies. They all come in, they’re like. We are extending the conversation.

[00:02:26] Jeff Klavier
So one thing. I tried one thing last night at yet another conference that we speak at almost every week, and I said, bring the cloud and the crowd together and you have a whole new platform.

[00:02:39] Howard Hartenbaum
But it’s Japanese that already is together. Crowd.

[00:02:43] David Hornik
I’m only going to let you get away with that because you speak Japanese and you’re married to a Japanese woman, because otherwise.

[00:02:49] Howard Hartenbaum
And I have half breed Japanese children and I drive Japanese cars.

[00:02:52] David Hornik
Great. This is half breed.

[00:02:54] Howard Hartenbaum
But when you say the word crowd in Japanese, you can’t tell which one you’re saying.

[00:02:58] David Hornik
It’s unclear.

[00:02:59] Jeff Klavier
So you bring the crowd and the cloud.

[00:03:03] David Hornik
Right, right. With the French accent.

[00:03:04] Howard Hartenbaum
All right, we’ll let you finish.

[00:03:05] David Hornik
So we. So basically we need the. That’s good as it’s two Cs, but we need the C word that brings those together. Crowd aberration.

[00:03:13] Jeff Klavier
Crowd aberration. Which is. Which is. Which was essentially the thesis behind one of my latest investments, which was enabled by the crowd, but leveraging the cloud for. To have a really low cost of operation. And that is called retail technologies.

[00:03:30] David Hornik
Retail technologies. Which is number one. Jeff has pitched retail collaboration. I’m just going to keep track. Jeff, it’s good that.

[00:03:38] Jeff Klavier
Can I mention the 45. I’ve done the fund in the past.

[00:03:41] David Hornik
45.

[00:03:42] Howard Hartenbaum
No, only the ones that start with.

[00:03:43] David Hornik
C. You said that you just closed another one yesterday.

[00:03:49] Jeff Klavier
That was. No, yesterday was another one announced on TechCrunch. It’s next big sound.

[00:03:54] David Hornik
Next big sound. That’s number two.

[00:03:58] Jeff Klavier
Alexa, OMDB of music. And I basically said, you know, that will basically be the last deal of the year. And I actually lied because I just committed to yet another deal this morning.

[00:04:07] David Hornik
Wait, wait. Will you get it closed in time?

[00:04:09] Jeff Klavier
Oh, it will close.

[00:04:10] David Hornik
It’ll close before the end of the year. Because that’s.

[00:04:12] Jeff Klavier
I’m essentially going to close two before the end of the year.

[00:04:15] David Hornik
Two more.

[00:04:15] Jeff Klavier
Two more.

[00:04:16] Howard Hartenbaum
Wait, so now we’re gonna put him on the spot. Two ditch to retail collaboration and next Big Sound. Which one is a better company?

[00:04:23] David Hornik
Yeah, which is the better one?

[00:04:25] Jeff Klavier
Which of your children do you favor the most?

[00:04:27] Howard Hartenbaum
For me, that’s easy. My older.

[00:04:29] David Hornik
Yeah, he’s such a freaking bastard. It would be my daughter, Darrow. I only have one of them and I have three.

[00:04:35] Howard Hartenbaum
I only have one older.

[00:04:38] David Hornik
Which one would you pick plus your younger daughter?

[00:04:40] Jeff Klavier
Well, I’m not gonna pick any of My children. Because by definition, I’ve invested in them. And you know how it is, right? You invest in a company, it’s all honeymoon, it’s all purple until the first boarding. Great. Fantastic. Until the first booming, where you realize that. Whoops, I missed that in the Duty agents only.

[00:04:56] David Hornik
You told us before we got started here that you liked retail collaboration better.

[00:05:01] Jeff Klavier
No, it’s not retail technologies.

[00:05:04] David Hornik
Oh, I’m sorry. I just made that up. Anyway, he never said any such thing. Retail technologies. My bad.

[00:05:11] Howard Hartenbaum
Wait.

[00:05:12] David Hornik
Howard, do you think you have one more deal that might close by the end of the year? Is that possible?

[00:05:16] Howard Hartenbaum
It’s slated for December 19th.

[00:05:19] David Hornik
Nice.

[00:05:21] Howard Hartenbaum
Well, gotta do my deal by the end of the year. My Christmas deal.

[00:05:24] David Hornik
You need the Christmas Hunuka deal. Good joke.

[00:05:28] Howard Hartenbaum
So I went to the Sutter Hill Christmas party at the Menlo Country Club last week.

[00:05:35] David Hornik
The Circus Club.

[00:05:36] Howard Hartenbaum
Circus Club.

[00:05:36] Jeff Klavier
That’s it.

[00:05:37] David Hornik
That’s where you’re supposed to have your VC party, is at the Circus Club. If you’re a real vc, you have it at the Circus Club. You know why they have polo ponies?

[00:05:44] Howard Hartenbaum
No, no, no. This is the. This is the one That’s. What? It’s the one that’s on Woodside. Not the one that’s. That’s way up in Atherton.

[00:05:51] David Hornik
No, no, no, that’s not. No, that’s Circus Club.

[00:05:53] Howard Hartenbaum
No, this is the one.

[00:05:54] David Hornik
The Menlo. Menlo Country Club or whatever.

[00:05:57] Jeff Klavier
So, anyway, it’s for those of you who are not in the VC industry. It’s basically Christmas season, so we meet almost every day or every second day at one or two parties organized by, you know, our friends, the VCs, either in the Valley or in San Francisco.

[00:06:12] Howard Hartenbaum
Yeah, so I’m gonna check on the name. Exactly. Anyway, the Sutter Hill. You know, I have to go there. It’s at the Menlo country Club on 2300 Woodside Road in Woodside, California. I have to go there, and I like going there. Bill Draper, my prior partner, was the founder of Sutter Hill. So he invites me to this party, and it’s kind of a good party, and they have good food and nice wine, and they give you boxes of chocolate when you leave, which is great.

[00:06:35] David Hornik
Always.

[00:06:35] Howard Hartenbaum
Always the same kind of, like chocolate.

[00:06:38] David Hornik
I’m coming next year. Only I didn’t get an invite.

[00:06:40] Howard Hartenbaum
I’ll get you an invite.

[00:06:41] David Hornik
Talk to Bill.

[00:06:41] Howard Hartenbaum
Anyway, so I’m talking with a venture capitalist who will be left unnamed from a very large venture firm. And he says to me after a couple of drinks, so, Howard, you got Any deals for me? I haven’t done a deal all year and I got to do something before the end of year. My partners are going to be pissed at me.

[00:07:01] David Hornik
What do you got? What do you got?

[00:07:03] Howard Hartenbaum
So I just see opportunity for entrepreneurs to go in front of every venture capital creator Christmas party with a big sign that says haven’t done your Christmas deal.

[00:07:11] David Hornik
Here I am, I am your Christmas.

[00:07:13] Jeff Klavier
I am so gonna tweet that. Hey, need any sort of mock up last minute, whatever, call me, call me.

[00:07:21] David Hornik
Well it’s a little bit like companies that have to spend their budget and so all these enterprise software companies used to do a bunch of deals. At the very end was like I gotta use it or lose it. So I gotta, you know, now’s the time. And so you could sell a bunch of software. So maybe that’s the right thing you say. I, what did you say? 40 some odd companies?

[00:07:35] Jeff Klavier
45.

[00:07:36] David Hornik
45 companies. Surely one of those would fit the like. Oh, what are you looking for? Oh, you need collaboration, you need cloud, you need music, real time. What do you need? I got one of those, no problem.

[00:07:47] Howard Hartenbaum
The wisdom generally says that you should never like be looking for money in December because it’s hard to raise money. It’s a Christmas time. Then you’ve got January and people will lose momentum that you met before the holidays. But, but I would take a different tech. Every company should wait to do their financing until December, right after Thanksgiving. That’s when you should start because there’s bound to be some VCs out there who haven’t done their deal for the year and they’ve just. I’ve got to do a deal, get.

[00:08:13] David Hornik
It in under the wire, how much? And you know what, you can’t over negotiate it like seriously, no time, no time. I don’t have time to keep fighting over these stupid terms. You know, these are the deal, this is the deal. Just you know, do it.

[00:08:24] Jeff Klavier
And 100 posts is such a round number.

[00:08:27] David Hornik
Well it’s the, it’s the price of price digior. First you do 100 posts and then you do something in the 230 to 280 or whatever and a billion and then a billion. Right. And then in theory something should happen. But we haven’t had any of these billion dollar valuation companies actually then do the next thing which is in theory should be liquidity.

[00:08:45] Jeff Klavier
Yep.

[00:08:46] David Hornik
I mean we’re assuming LinkedIn.

[00:08:48] Jeff Klavier
LinkedIn will come. LinkedIn, welcome.

[00:08:50] David Hornik
You know I was talking with some.

[00:08:52] Howard Hartenbaum
A well placed source who has provided verified information.

[00:08:57] David Hornik
Yeah, right, exactly. And I. And I made a similar assumption. I said, well, you know, it’s given. Doing great and blah, blah, given that I look forward to seeing that IPO in the, in the coming year. And I heard, nah, you know, I don’t see any reason why LinkedIn will be public company this coming year. Like, all right, okay, never mind then. But, you know, we would like you to be public.

[00:09:20] Jeff Klavier
Yeah, I think we need to be public. No, we need. Seriously, we need. We need the. We need LinkedIn on the public market because it’s one of those companies which would be sort of a bare weather for the reopened IPO window.

[00:09:31] David Hornik
And the real company we got up, this is the thing, in the late 90s, we all got a bad reputation because allegedly we were taking out shitty companies that didn’t have real revenue models and didn’t have real revenue and they weren’t real businesses. And the reality was that some of that was happening in the late 90s. But from 2000 until now, there are real companies being built with hundreds of millions in revenue and profitable. And LinkedIn’s one of those. And clearly Facebook is one of those. There are lots of businesses that have real businesses.

[00:09:59] Howard Hartenbaum
The next one to go out will be Skype, right?

[00:10:02] David Hornik
Yeah, exactly, Skype. I mean, I wouldn’t be surprised at all. Right.

[00:10:06] Howard Hartenbaum
Company formed in late 2002, sold in 2005, sold again 2009, go public in early 2010.

[00:10:13] David Hornik
Well, one of the biggest exits of the 2000s was Seagate, which we took private. Then, what, few years later, a company was doing great and we. And took it public again. And it’s been a great, strong public company since. And it then has a public currency and it can be strong. And, you know, so we need the. I agree with you. We need the linkedins and the. And the.

[00:10:35] Jeff Klavier
And we need a few more public acquirers because the list that we have today is kind of getting old.

[00:10:40] David Hornik
Yeah. And I’m sick of pitching the same people who actually won’t acquire. I think they’re completely incapable of acquiring things.

[00:10:48] Jeff Klavier
Sorry.

[00:10:51] David Hornik
I’m just coming.

[00:10:52] Jeff Klavier
No, seriously, the other day I was. I was at the airport. It was like 5am or whatever. And my time. I was in Charlotte on layovers to Toronto. And I see that fake Carol Bartz. So fake Carol Bartz is following me on Twitter. And so I just went, like, who? And I went to see the. The tweets. And it’s just freaking excellent. Like, if you have a minute to waste or whatever and you want to just get a good laugh, you can either Go to shit my dad says. Or Carol Bart. Or fake Carol Bart.

[00:11:24] David Hornik
So I’m gonna translate for a second. I believe what Mr. Clavier just said is shit my dad says. Which is a very popular translation of the French accent. Shit my dad says. Is that correct?

[00:11:39] Jeff Klavier
And yes, they don’t hit on my partner.

[00:11:42] David Hornik
It is hard. I mean, he’s a good looking man and then he starts using that French and we have to. You’re gonna have to sit between the two of us.

[00:11:50] Jeff Klavier
Yeah, okay, fine. I will show next topic. But hey, fake Carol Barts.

[00:11:54] David Hornik
Fake Carol Bart. I was at the airport on Monday night sitting, waiting to take a red eye to Boston. And another VC friend of mine goes by on the moving, moving floor like waves. Hey, how are you doing? Where are you going? Oh, taking the red eye to Chicago. It’s pretty sad actually. If you look on Foursquare.

[00:12:11] Howard Hartenbaum
What was that, Kevin?

[00:12:13] David Hornik
No, Foursquare or Gawala. You know, you can see the people who check in at SFO at 11, 7, 9, 10, 11, everybody hopping on their red eyes. Red eye to Charlotte is really bad in Chicago because they’re like what you sleep for three and a half hours.

[00:12:29] Jeff Klavier
Three and a half hours. And. And I was expecting sort of a half empty plane or whatever. It was full.

[00:12:34] David Hornik
Full. It was full.

[00:12:35] Jeff Klavier
Unbelievable. Who takes a red eye to Charlotte? Besides me?

[00:12:38] David Hornik
Yeah, no.

[00:12:39] Jeff Klavier
Plenty of people.

[00:12:40] David Hornik
No, who goes to Canada via Charlotte where the problem. That’s not. You heard there is no Chicago. Relatively close to Charlotte. Yeah, Boston. I mean relatively close to Canada.

[00:12:50] Jeff Klavier
Look, that, that was the only flight I could, I could find to get to Toronto at that time on time to get onto a panel, whatever.

[00:12:57] David Hornik
So what was I talking? Oh, I was talking about the start startup.

[00:13:01] Jeff Klavier
Austin Hill says hi by the way.

[00:13:02] David Hornik
Oh good. I love that Austin Hill. Talk about like you know, hardcore. This guy’s been in a hardcore entrepreneur since he was what, 18?

[00:13:09] Jeff Klavier
Yep.

[00:13:11] David Hornik
It’s just that’s he’s a very well.

[00:13:13] Jeff Klavier
Known entrepreneur in Canada.

[00:13:14] David Hornik
Yeah, he’s the man in Canada.

[00:13:15] Jeff Klavier
Absolutely.

[00:13:16] David Hornik
Not to say he’s not the man here. But I’m just saying, you know, it’s a little bit like. Actually so here’s the thing. I was just in Boston, I took this rad eye to Boston and I. I was having a board meeting with the Bain Capital guys have co invested in this company. No Ms. Solutions. The price optimization company that, that we both. Ding, ding, ding, ding. Now put that on my list. No miss Solutions. If you need to reprice your loans or your credit cards, give us A ring at nomus solutions. That’s 1-800-NO- MISS I think it’s nomasolutions.com I don’t know that we have any. But anyway, the Bain guys have done this awesome thing. It’s called. It’s called Founders Club. And it’s basically a party of all these great founders and the Bain guys. In fact, the fact that I was allowed at this party was sort of controversial. No VCs are ever allowed to go to their parties, and they throw these awesome parties. But in Boston, you could identify. Oh, these are the great. You know, these were the great entrepreneurs. And in fact, I had had. I had hung out with one of these guys at the. At the hotel. Airport hotel. You know, I was doing drinks before my board meeting, and then I see him at this party is like, hey, how’s it going? He’s like, this is great. These are. You know, you should meet that guy and that guy and that guy. And it’s a little bit like that when you fly to Canada. Oh, here’s Austin Hill and Austin. Truce. You too. They’re the 20 guys that do are doing the interesting things. But, Howard, I thought of you. This party was at. At the office of this thing called KIVA Systems. And we. For those of you who are serial listeners, you will know that in a recent podcast, we talked about robots and how Howard loves robots. Well, this company.

[00:14:51] Jeff Klavier
That was the last show, right?

[00:14:52] David Hornik
Was it last show? All right. Howard loves robots.

[00:14:53] Howard Hartenbaum
I just bought a robot vacuum cleaner.

[00:14:55] David Hornik
For my garage that’s like, what, hard? Heavy duty Roomba.

[00:14:59] Howard Hartenbaum
Yeah, it’s like heavy duty Roomba. Oh, it’s fantastic. I have the cleanest garage. My wife is, like, so annoyed. Like, stop vacuuming the garage every day. I can’t help it. I love that thing.

[00:15:08] David Hornik
You just put it down. Well, how hard you stop vacuuming it. Well, you just put the thing down and it zips around. Like, how hard is that?

[00:15:14] Howard Hartenbaum
She’s like, stop watching the robot vacuum the.

[00:15:17] Jeff Klavier
No, it’s fun. We have three roombas. We have two roombas to actually vacuum and one to clean.

[00:15:23] Howard Hartenbaum
What does that mean in French? Roomba.

[00:15:26] Jeff Klavier
It’s the dance. La rumba.

[00:15:29] David Hornik
It’s not.

[00:15:31] Jeff Klavier
That’s what?

[00:15:32] Howard Hartenbaum
Close enough. All right, back to Kiva.

[00:15:34] David Hornik
Oh, and the beauty of that is, like, it can clean under your car.

[00:15:37] Howard Hartenbaum
Oh, it does everything. It’s just fantastic.

[00:15:39] David Hornik
Awesome.

[00:15:39] Howard Hartenbaum
But sometimes it stops, and it could stop under the wheel of your car.

[00:15:43] David Hornik
Like, that’s a problem.

[00:15:43] Howard Hartenbaum
Well, you gotta be careful.

[00:15:44] David Hornik
That is an issue. So, anyway, so Kiva Systems. Basically, these guys have built these awesome industrial robots that do pack and pick shipping.

[00:15:52] Howard Hartenbaum
I saw the video on this.

[00:15:53] David Hornik
Have you seen it?

[00:15:54] Howard Hartenbaum
Oh, it’s fantastic.

[00:15:54] David Hornik
It’s unbelievable. So basically, the traditional model of pack and pick shipping is that the person is at the, like, you know, warehouse for Zappos, and they have this. They need these three pairs of sneakers. And so they march down the aisles until they get them. And so they’re walking a ton. And the sneakers may be way separated. This thing brings the sneakers to you. So all of these shelves are sitting on top of a robot. And you put, you know, you say, okay, and you’re simultaneously picking for like 10 different boxes. You put the 10 different boxes, you say, okay, I’m ready for these things. And all of a sudden the robots start delivering these shelve units. And there’s a little light flashing next to the thing you need. And you, you take that thing off the shelf, you press the button, you scan it, and then it flashes over the box it’s supposed to go in. You put it in the box, and then the shelf takes itself away to somewhere.

[00:16:43] Howard Hartenbaum
So now a picker can sit on a stool and listen to his music, and his headphones and boxes just show up at his side and he just drops the things in, and when he’s done, he pushes the red button and away it goes.

[00:16:53] David Hornik
No, absolutely. And I had this interesting conversation with one of the guys. So one of the things that’s interesting when you talk about Live Ops with, with Maynard, Web. Live Ops. Excuse me? That’s number two for me, Live Ops.

[00:17:07] Howard Hartenbaum
When I’m saving mine for later.

[00:17:09] David Hornik
You are. All right, but I thought we were going to lose you soon. Okay, so when you talk to Maynard about LiveOps, one of the things that he appreciates about the company in the same way that he appreciates ebay, where he used to be coo, is that it employs people at home who may not otherwise be mobile. You know, gives them the opportunity to be employed in ways that they wouldn’t have otherwise. And I was talking to this guy about the fact that this Teva job, because it’s essentially thing flashes, you take a box, you put it in another box. It’s very, very simple. But, you know, but it’s sort of a game like experience. You could imagine that folks with down syndrome or other, you know, who, who would love to work and could, could do this job, do a good job of it, be, you know, really productive, they wouldn’t get burnt out the same way I, I get. I’M guessing you wouldn’t get burnt out the same way that people do in this job because that things are just coming to you or whatever. But anyway, that’s a total aside. But the thing that’s awesome, actually the thing that I thought was really perhaps the most interesting is they showed this diagram and maybe. Where’s the video on YouTube? It’s not on YouTube or is it on Kiva Systems?

[00:18:09] Howard Hartenbaum
Somebody sent it to me and it was fantastic. No, I think it was actually on TechCrunch a while ago when Bain did the financing. TechCrunch did an article and they linked to the video on it.

[00:18:18] David Hornik
Well, so they show a simulation of. If you have a warehouse full of shelving and you have, let’s say 10 pickers and packers and you’re doing a bunch of orders, what happens to all of the, all of the goods because there’s no fixed shelf space. It’s not like, oh, the running shoes go there. They go wherever they go. And the end result is that the stuff that is frequently bought moves closer to the people who are packing them. And the stuff that’s not bought very often moves far away from them. And it’s just incredibly efficient model that looks just like memory. The memory model of, you know, how you, how you rewrite memory in a disk drive. So it’s really just incredibly cool. So in the world of robot deals, that one’s awesome. So we should like.

[00:19:03] Howard Hartenbaum
Let’s go visit.

[00:19:03] David Hornik
Hello, if you’re listening, if anybody from.

[00:19:08] Howard Hartenbaum
Kiva’s on the other end of the.

[00:19:09] Jeff Klavier
Phone, there is a term sheet on.

[00:19:11] David Hornik
The table we would like to have. Howard would like to add that to his.

[00:19:14] Howard Hartenbaum
I would like to just put some numbers on this. There is some money.

[00:19:17] Jeff Klavier
That’s the money which is ready to be invested.

[00:19:19] David Hornik
Do you hear the coins clinking? But it was really awesome.

[00:19:24] Jeff Klavier
Here’s $5 million and I will say this.

[00:19:27] Howard Hartenbaum
I raised your 5 million with another million.

[00:19:30] David Hornik
$6 million. That’s what we do here at VC Land. We sit around counting our millions to give to you. It was a great party. Kiva Systems was awesome. I love those Banguys. Although I will say, you know, you get to Boston, you go to their offices, they have hardwood. You know, there’s a Brooks Brothers box sitting on the guy’s desk. I mean, you know, it’s just that you’re not in Kansas anymore. When you’re over, when you’re over there, how are you checking your voicemail? While we’re doing, while we’re trying my kids school, I Always check kids, school. We’ll. We’ll forgive you. Well, then while we lose Howard.

[00:20:04] Howard Hartenbaum
Jeff, that’d be like 10 seconds.

[00:20:07] David Hornik
Okay. Yeah.

[00:20:09] Jeff Klavier
You want us to wait for you?

[00:20:10] Howard Hartenbaum
I can’t pull it anyway. Bad connection.

[00:20:12] David Hornik
That’s too bad. What else? What else? It doesn’t feel. It feels pretty frothy for a recession, don’t you think?

[00:20:19] Jeff Klavier
Like, yeah, I completely agree. When Sequoia published the end of Good Times last October, everyone went, okay, so it’s going to be a tough time. We’re all in. I’m really an early stage investor.

[00:20:34] Howard Hartenbaum
How many deals have you done this year?

[00:20:38] Jeff Klavier
So closed as of right now?

[00:20:40] David Hornik
Yes.

[00:20:41] Jeff Klavier
16.

[00:20:42] Howard Hartenbaum
How many have you done this year? Three.

[00:20:45] David Hornik
Four this year I’ve done three.

[00:20:49] Jeff Klavier
Three.

[00:20:49] David Hornik
And I’ve done two last five in the last 15 months. Three in the last 12.

[00:20:53] Jeff Klavier
Which is insane for you.

[00:20:55] David Hornik
Yeah, that’s nutty. And you’ve done.

[00:20:56] Howard Hartenbaum
I’ve done close. Two and one more should close this year. So that doesn’t sound like a venture recession to me.

[00:21:01] Jeff Klavier
No, no.

[00:21:02] David Hornik
And you know, we gotta get over it. Like, what are we doing? We just. We’re just drunk, punch drunk with money.

[00:21:07] Jeff Klavier
So the whole point. Yeah, well, there is money. There is definitely a lot of money. But the sound effects, you know, for a quarter, I would say, you know, Q4 of 08, people sort of stepped back, you know, cut a little bit in terms of expenses and everything and actually use that as an excuse to get the bottom performers out of the companies. So whenever someone said, hey, I’m just getting, you know, 10 to 15%, it was just not cuts. It’s just, you know, cleaning up. Q1 was sort of quiet, but Q2 started to see a lot of activity. And since September, there’s just been like a ton of interesting deals coming out at the early stage. And all my peers, you know, just investing right, left and center because we at the early stage, First Round Capital and Mike Maples and True Ventures and, you know, Ron Conway. And Ron has done like 20 deals in three months or something.

[00:21:54] David Hornik
20 deals in three months?

[00:21:55] Jeff Klavier
Yeah. Ever since he separated from baseline, he’s done. He’s closed anywhere from 20, 25 deals.

[00:22:02] David Hornik
Wow, we’re slackers.

[00:22:03] Jeff Klavier
Yeah, well, you know, he’s wrong. And Ron can actually do that because it’s just his own money. He does whatever the hell he wants. But the point is that, you know, it felt that for recession there was a ton of activity at the early stage move to series A. So when we have invested in the company and helped grow it for 18 months. It’s time, you know, it’s sort of time to figure out whether there’s someone else out there in the market, you guys, or, you know, your peers will invest in those companies. And what I’ve seen is a ton of activity, a ton of interest. And each of the companies which have raised over the past three months got multiple term sheets and competitive bidding. And competitive bidding means that you get higher prices and we get into very nice multiples on our investment. So very happy. And, you know, M and A is back. You know, we’ve seen billions of dollars of exits closing in the past three months.

[00:22:58] Howard Hartenbaum
You have a good admob deal.

[00:22:59] Jeff Klavier
Yeah, well, admob, you know, that was a good one. Playfish.

[00:23:04] David Hornik
Yeah.

[00:23:04] Jeff Klavier
You know, another good one, Mint, which looks like a small deal at the end, you know.

[00:23:08] David Hornik
Yeah, right. You did Mint, right?

[00:23:10] Jeff Klavier
Yeah, I was an early angel in Mint.

[00:23:15] Howard Hartenbaum
Yeah.

[00:23:16] David Hornik
So you, you did Mint and I did Pay Cycle and both of those were sold to Intuit for the same hundred and seventy million dollars.

[00:23:21] Jeff Klavier
And we tried to get 175. We couldn’t. Buggers.

[00:23:23] David Hornik
Good. They better not. That would have really made us angry. Nicely done. Yeah, no, it does. It feels like things are, things are better. But so, but you, you, you made an interesting comment. You said, like the deals that are getting series A deals done, the companies that get series A deals done get multiple term sheets. But there, my sense is that it’s sort of bifurcated and there are those companies that are going to get funded and when they do, it’s, it’s very rarely like one, One firm says, oh, I believe in this. When you’re going to get funded, it’s an interesting company and there are a number of people who are interested or whatever else. And then there are some where it’s like, hello, Hello.

[00:23:59] Jeff Klavier
I will actually disagree with that statement in the sense that there is not.

[00:24:04] Howard Hartenbaum
Allowed to disagree on the David Hornik Show.

[00:24:05] Jeff Klavier
Of course, I’m French.

[00:24:07] David Hornik
It’s the French exception to the don’t disagree with Hornick rule.

[00:24:11] Jeff Klavier
Exactly. So, you know, two cases in point. Even bright and outright. So, ding, ding, ding, ding, ding, ding. Even bright and outright.

[00:24:21] Howard Hartenbaum
So if you can go up with a company called. That’s right, we’re certainly going to fund it.

[00:24:25] Jeff Klavier
And so Evenbright, fantastic company built, you know, it’s a ticket processor and they are now powering the ticket management for most of the conferences and events related to all industries. Essentially there’s. Well, I can’t say how much money they will make this year, but It’s a lot of money and. But they’re doing really, really well. And so we had like four term sheets lined up and, And Sequoia ended up getting the deal. So I’m really thrilled to have roll up.

[00:24:53] David Hornik
And they paid up. They had a big. It was a big fight.

[00:24:56] Jeff Klavier
I will not comment on that.

[00:24:57] David Hornik
But we, from what we hear here on Sandhill Road, every so often there’s a brawl. You know, it’s like a cat. You hear the noise. Oh, there’s a cat fight going on. And then out of curiosity, you have to go check it out. And from what I hear, they, you know, not. It was Sequoia wasn’t able to muscle there, like, well, we just. Sequoia will pay less in this instance. They had to pay up, didn’t they?

[00:25:16] Jeff Klavier
I will not comment on that one. But let’s say that we’re good for the entrepreneurs.

[00:25:19] David Hornik
Yes, we’re really thrilled. Great outcome. And Rule Off’s a great guy. I mean, the nice thing in that instance is that you get a great board member from a great firm and a great price and, you know, in a great company, you know what that all adds up to. Great.

[00:25:33] Jeff Klavier
And so, you know, now it’s a great exit, It’s a great product, it’s a great team, it’s a great product, it’s a great service, it’s a great potential.

[00:25:43] David Hornik
Yeah.

[00:25:44] Jeff Klavier
And I’m really, and I don’t want to hear the word exit for another, you know, three, five years.

[00:25:51] Howard Hartenbaum
Exit.

[00:25:52] David Hornik
No, no.

[00:25:53] Jeff Klavier
And I would try.

[00:25:54] Howard Hartenbaum
How about a company called Exit? Oh, I put money at an exit.

[00:26:00] Jeff Klavier
So whoever gets exit.com gets ready for the auction. It’s gonna be a good one. And so outright was exactly the same thing. Outright was. So outright, interestingly, is to QuickBooks what Mint was to Quicken. And so when the Intuit. Exit. Exit happened, we had a lot of friends in the industry who said, oh, you know, I missed on Mint, I should have done Mint, and so on, so forth. And then, good, now you could do this one. And then, you know, the Mint Syndicate funded outright. And so we said, you know, you have your redemption opportunity. Does outright.

[00:26:32] Howard Hartenbaum
So historically, though, when you do really well on a deal and you’ve in an area, in a market and then you like, make a, you make some money and then you go, I like that market. And then you do another one. Historically doesn’t go so good.

[00:26:44] Jeff Klavier
Sort of like we funded outright a bunch, you know, like beforehand. Beforehand. And so same thing, you know, four or five term sheets. And we Ended up with Sequoia as well.

[00:26:54] David Hornik
Oh, is that right? So you’re just Sequoia’s bitch.

[00:26:58] Howard Hartenbaum
No way to say that.

[00:27:03] Jeff Klavier
So I really saw Sequoia on Living Bright and so I think it was a perfect match. I just didn’t see Sequoia on Outright and they just fold tooth and nail to just get it.

[00:27:12] David Hornik
So I’ve looked up exit.com it is a GPS clock. I’m always looking for better and more precise timing solutions. While the GPS clock 200 is very good at its price performance point, there are certainly more precise GPS GPS timing receivers out there. So far though, they haven’t been any that came to the integrated package of GPS clock 200.

[00:27:31] Howard Hartenbaum
Too many words. But.

[00:27:34] David Hornik
Exit.Com. what a. That’s just not great.

[00:27:38] Howard Hartenbaum
Stock ticker too.

[00:27:39] David Hornik
No.

[00:27:39] Jeff Klavier
Yeah, Exit.

[00:27:40] Howard Hartenbaum
Yeah.

[00:27:41] Jeff Klavier
And so the point is that those were both great. Yeah, great companies, lots of momentum. And then there is another category where, you know, the company is so interesting but not interesting to the overall market. And then there is like a couple of funds that say, hey, you know, I will, I will just, I will just do this. And typically you don’t get the Christmas deal. The price. You don’t get the price.

[00:28:05] Howard Hartenbaum
You know, they got revenue. Christmas deal.

[00:28:08] David Hornik
No, look, I don’t, I actually don’t think that there’s a huge price differentiation between, oh, super competitive and a deal that. And the deal that one VC wants to do. Because at the end of the day, I mean there’s a difference. But is there a massive.

[00:28:20] Jeff Klavier
Well, at series A. No, I think that it’s a series B that you start seeing sort of the real shift. But you will essentially in the multiples, to you as the early investor, you will definitely see a, you know, maybe where the. I’m the only one who sees a potential, you know, you’re going to see a 1.5 to 2x multiple maybe.

[00:28:39] David Hornik
Yeah.

[00:28:39] Jeff Klavier
Whereas I really want this deal. I really want this deal like you’re going to see 1, 2, 3, 4, 5x.

[00:28:46] Howard Hartenbaum
So what I saw recently was a deal where it was very hot and contested and there was a group of very big name investors like Neas and Kleiners and such putting out term sheets and they put out, from what I hear, kind of roughly 5 million valuation. And there was three other firms that I wasn’t familiar with that weren’t big names but good guys and they all put out term sheets like 13, 14, 15 million value. So there was this bifurcation in pricing between the two types of firms and ultimately what the Entrepreneur did. I don’t know. I haven’t found out yet. But it was interesting to see how that’s anticlimactic.

[00:29:25] David Hornik
I mean, you know, what’s the moral of the story?

[00:29:29] Howard Hartenbaum
The moral of the story is pick the guy you want to work with the most.

[00:29:31] David Hornik
Yeah, I agree with.

[00:29:33] Howard Hartenbaum
So whether the price is high or low, you should pick the guy you want to work with the most. And if you don’t like the price, it’s low, try and talk it up.

[00:29:38] Jeff Klavier
But yeah, I think it does.

[00:29:39] Howard Hartenbaum
You gotta be married to that guy for the next few years.

[00:29:41] Jeff Klavier
Yeah. And there’s always a good question, which is what’s the premium that you’re ready to pay as a discount to get, you know, a premium brand? And you guys sort of mentioned that in one of your previous shows. And I think that within reason, yes, you will accept lower valuation for someone who can really sort of help you out and so on so forth. But it’s the partner.

[00:30:00] Howard Hartenbaum
Yeah, take when, you know, you’re a young man and you want to get married, you know, what do you go to? What are the trade offs? You know, she’s got a lot of family money, but she’s got a really nasty laugh.

[00:30:12] David Hornik
Howard, I just don’t think you should discuss your wife this way.

[00:30:15] Howard Hartenbaum
I mean, yeah, it’s the opposite Doe family, buddy.

[00:30:20] Jeff Klavier
Beautiful laugh. I am still going to take the fifth on this one.

[00:30:27] David Hornik
One of the things we were talking about before we started, before we actually started recording this conversation, was that there are a bunch of these. There are a bunch of companies where we funded them and then suddenly there appear new companies. So like this. Oh, Mint sold. And so now there’s this hot space and then people all appear.

[00:30:43] Jeff Klavier
Oh, I got four Mint like, business plans since Mint existed. Like, okay, so you made a bunch of money on Mint. So here’s the new one. Here’s the next gen Mint.

[00:30:51] David Hornik
Would you like to do Mint double down?

[00:30:52] Jeff Klavier
And you’re like, I did Mint.

[00:30:54] Howard Hartenbaum
No, this is minty, minty fresh.

[00:30:57] David Hornik
But we’ve noticed this because, you know, Howard funded Swoopo. And then I don’t get a ding.

[00:31:03] Howard Hartenbaum
Because I didn’t mention it.

[00:31:05] David Hornik
Ding, ding, ding, ding. Only if I only.

[00:31:08] Jeff Klavier
Thank you. Okay, let’s.

[00:31:09] Howard Hartenbaum
So we funded Swoopo in March and we got a lot of press. And then a bunch of entrepreneurs started looking, you know, oh, that looks kind of interesting.

[00:31:17] David Hornik
And analyzing because it was making money, right? It was a cash flow positive business.

[00:31:21] Howard Hartenbaum
And it was a bunch of guys.

[00:31:23] Jeff Klavier
Start analyzing in Germany for folks. Oh, sorry.

[00:31:26] Howard Hartenbaum
We’re not going to launch it in French. Bunch of entrepreneurs looked at some smart guys. They analyzed it up and down and left and right. And the next thing you know, I’m hearing from some very, you know, big venture firms, oh, we’re going to fund this competitor to Swoopo. We think the market’s big enough. It’s going to be, you know, we figured it out. We’re going to, you know, there’s some problems with your model. And we figured out a big difference for them. And they funded it and they launched a site and it came out and it was pretty much a knockoff and with a. With a small tweak that Swoopo had tried before, which really wasn’t that significant, frankly, I was a little disappointed. I was hoping they would come up with more innovation because if they did, we would just copy it.

[00:32:03] David Hornik
You can’t say that. You can say whatever you want. You would enjoy it. Oh, that’s an interesting.

[00:32:08] Howard Hartenbaum
That’s an interesting. But the reality is Swoopo’s been in business for years and has tried a lot of these things before. And so we’re hoping people come up with some new things that make it better. But the reality was it wasn’t that different and impressive. I mean, it’s going to be a nice business. But I guess the topic in do you fund companies which are me toos of somebody else that’s already doing something, and that’s just something that doesn’t personally interest me all that much. I would rather bet on like the leaders or the innovators or the guys who really have come up with something new and original than somebody who looked at somebody else’s deal.

[00:32:40] Jeff Klavier
And kind of what’s interesting with Suppo is that it started in Germany and.

[00:32:45] Howard Hartenbaum
It was under the radar of everything.

[00:32:46] Jeff Klavier
It’s very rare to see German innovation. Typically you would see the German knockoffs. Right? So you have.

[00:32:52] David Hornik
The history of the web has been.

[00:32:53] Jeff Klavier
You have, you know, and the funding model for the angels in Germany is you just fund 20 of those with €25,000 and you get, you know, 10% of the company for that, and nine out of 10 die. And one of them is 2 Division, which is a knockoff of Facebook. And basically you make all the money on that. And here we have Swoopo, the German company, which is innovating. And I think that their thought process was Swoopo wasn’t really launched in the US or wasn’t in the US or whatever. And so they could do an actual US Leader in doing. So what was interesting to me is that since the suppose launch, I’ve seen maybe one of those FUPO like business plans every three weeks. The last one was two days ago, which was Penny something.

[00:33:41] Howard Hartenbaum
And what they’re going to learn is it’s a nice business, but it’s really a hard business to get to scale.

[00:33:46] David Hornik
It’s metrics driven.

[00:33:48] Howard Hartenbaum
It’s really.

[00:33:48] Jeff Klavier
But have you seen the day that competitor launched on TechCrunch, another company from Australia did the homepage takeover and therefore you had the article about the competitor of Suppo and there was like this other competitor advertising their services, you know, on TechCrunch. And they were sort of, you know, essentially saying, hey, we’ve been in business too, or whatever. And they did that on a completely bootstrapped basis.

[00:34:13] Howard Hartenbaum
So we’re in Asia now. TechCrunch launched Korea this week.

[00:34:15] David Hornik
It’s kind of fun to see the Korean site. I was looking at it and it’s got some little Korean elements, you know, that make it look and feel a bit. I mean, the same essential structure, but you know, the cute little Korean witchy guy that’s walking around and all that stuff. So that was kind of fun. But this happens all the time. Like how many of these buyer club things have come out since what was the.

[00:34:39] Howard Hartenbaum
Only original concept?

[00:34:41] Jeff Klavier
Yeah. Is it true?

[00:34:45] David Hornik
Harsh. All right, I’m getting the big signal from Howard that he has to run away. He’s got more important things to do.

[00:34:52] Howard Hartenbaum
Than stay here obligations with us.

[00:34:54] David Hornik
All right, well, but we appreciate it because David.

[00:34:57] Jeff Klavier
David was 30 minutes late, just for the record.

[00:35:00] Howard Hartenbaum
Bye, guys.

[00:35:00] David Hornik
Wait, Howard, do you, do you, do you want to suck up to anyone before you go? Since we have this, you know, sucking up section of our program now.

[00:35:07] Howard Hartenbaum
I don’t have a good suck up this week.

[00:35:09] David Hornik
You don’t. We’re gonna work on it over the.

[00:35:11] Howard Hartenbaum
You know, I’ll give my suck up to Jeff.

[00:35:14] David Hornik
All right.

[00:35:14] Jeff Klavier
You see, I never stuck up to anyone.

[00:35:16] David Hornik
All right, well, thanks for joining us, Al.

[00:35:18] Jeff Klavier
Good to see you, Howard.

[00:35:19] Howard Hartenbaum
Thanks.

[00:35:20] David Hornik
Yes.

[00:35:26] Jeff Klavier
Which is rumored to be acquired by Amazon.

[00:35:28] David Hornik
Oh, is that true?

[00:35:28] Jeff Klavier
Yeah. There was like a business. It’s a massive business.

[00:35:31] David Hornik
And then the US the leading US One is Guild Group, which was started by Kevin, Kevin Ryan, who was the.

[00:35:40] Jeff Klavier
Founder of Double Click.

[00:35:41] David Hornik
So that’s sort of an amazing. Because they’re so unrelated, these businesses, and yet killer businesses. And then you have all sorts of other copycats of those. And same thing with Bitly. Right? You’re a Bitly guy.

[00:35:51] Jeff Klavier
Yeah. So I’M an investor in Bit Ly and we’ve seen.

[00:35:55] David Hornik
Are we going to count that as one of yours or not? I mean, I’m okay.

[00:36:01] Jeff Klavier
And so Bitly. So tinyurl was the first URL shortener way back when. And the concept really was that tiny URL was just a shortener. And that’s it. There was no statistics, there was no analytics, there was nothing, just the shortening. And John Boothwick at BetterWorks said, well, we need just something better than that. And that’s how the concept of Bitly, which is, okay, there’s the shortening part, but then there is the tracking and the analytics and everything that makes Bitly interesting. And we launched that, we fund that, and then suddenly we have like 10 URL shorteners trying to just grab a bit of the shortening market. Primarily thanks to Twitter or because of Twitter.

[00:36:46] David Hornik
There was a shortening market.

[00:36:48] Jeff Klavier
Well, there is a shortening when you have 140 characters.

[00:36:50] David Hornik
Really need a shortening market.

[00:36:52] Jeff Klavier
But that’s really sort of the initial driver, initial hook. But what you discover is that you can really track the dispersion of your content thanks to Bitly wrapper. And that’s really what’s valuable. You can see how quickly content gets disseminated. And so now we see a bunch of people using Bitly and there’s a ton of announcements sort of coming through in the next few weeks as to who’s going to adopt this thing, which don’t have this sort of. Okay, well, I only have 120 characters. There’s no restriction. They have like plenty of space. But they want to use Bitly and we just killed everyone else.

[00:37:27] David Hornik
Well, I would say, you know, Stowe’s TumbleUpon launched Super Su PR, which is a shortener, but it’s again, a different twist on the thing, which is ultimately a service. Yeah. Plugs it into the Stumble on service and allows you. But you know, they’re related things. It has statistics and it has that stuff. And, and so the interesting thing is that that the, the folks who are innovating on it, they create real value for the, for the customer and the copycats sort of do, you know, oh, oh, you just create a shortener and we’ll let you, you know, create your own, you know, URL or whatever. So. But, but, you know, I’ve shamelessly included Stumble upon in my list of companies, so.

[00:38:08] Jeff Klavier
Which is a great company.

[00:38:10] David Hornik
Thank you very much.

[00:38:11] Jeff Klavier
And, and it’s rare when you have the opportunity to get in a company, sell it, buy it back and Burn it again. That’s, that’s always something which amuses me.

[00:38:21] David Hornik
No, it’s great. Right? That’s, this is like, you know, it took a long, it was a long round trip for Dave Marquardt, my partner. Dave, with, with Seagate, but he funded Seagate and then 25 years later took it private. Yeah, he was the first investor in Seagate. Yeah, Dave, investor. So that was quite a, you know, talk about a round trip there.

[00:38:38] Jeff Klavier
Yeah. You know, Narendra Rochal is a, is a good friend of ours. And so Narendra sold Webshots and then bought it back a few years later and then sold it again. And he’s done now.

[00:38:49] David Hornik
Really good.

[00:38:50] Howard Hartenbaum
Yeah, yeah.

[00:38:50] Jeff Klavier
Asking whether it would go at the third round. But it’s an end.

[00:38:53] David Hornik
He said, yeah, Webshots, I’m gonna move on to a new business. Is there now. I know, I know. I’m heading off to Paris. I assume you are as well. I mean, I don’t have the accent.

[00:39:04] Jeff Klavier
I am off to Paris, not Texas, the French one on Monday on, you know, it’s going to be the Paris Loeweb shuttle Air France on Monday, you know, and it’s AF83 or 84, I never remember which one it is. Leaving at 3pm, arriving at 11am and it’s going to be like a bunch of the speakers and attendees on that flight. So it will be one of those flights where you actually know half of the plane and you’re really happy with it.

[00:39:37] David Hornik
If I had known, I would have taken that flight. I’m flying out Saturday and I’m doing. And the problem is I, you know, stupid frequent flyer miles. I’m going United and United. So you fly through London or Munich. So I’m flying through Munich. So you fly to Munich and then come back, switch planes, come back. But it’s a fine flight. They’ve gotten much better. It’s much less painful, particularly.

[00:39:58] Jeff Klavier
So you’re taking the kids with you.

[00:39:59] David Hornik
Or just, just, you know, my, my wife and I are flying over. But here’s my. So I, I, I gotta say we’re going to Paris.

[00:40:08] Jeff Klavier
Here’s the rent. Here’s the rent.

[00:40:09] David Hornik
Here’s my rent. No, no. One of the things that’s amazing about Paris, of course, is that the art is just stunning. Like there’s just no place on the planet as amazing as Paris when it comes to art. So what is happening right now? There is a strike. The art museum workers are on strike. And they’re welcome to party. It’s unbelievable. And so I’ve been reading these blogs talking about, like, well, sometimes the strikes gain force and sometimes they lose. If they lose momentum, it’ll be over quickly. But if it starts to gain momentum, then other people will strike and support. So, you know, you may not be able to get a taxi cab from the airport because the cab drivers may strike along with the. With the museum workers.

[00:40:49] Jeff Klavier
I’m shaking my head.

[00:40:50] David Hornik
Yeah. So anyway, I’m sure it’ll get resolved.

[00:40:53] Jeff Klavier
Don’t look at me to defend those fuckers.

[00:40:56] David Hornik
I was a little, you know. Now, of course, I’m just going there for business. So it doesn’t matter that the Musee d’ Orsay is closed, but.

[00:41:04] Jeff Klavier
Yeah, well, that’s such a pity because the Muse d’ Orsay is so beautiful. I mean, that’s one of my favorite museums in Paris. But now it’s. It’s one of those things which drives me nuts as. As a Frenchman. And that’s why I often sort of picture myself as the French who hate the French. I don’t hate the French per se, but I hate the French mentality and all those strikes and, you know, things.

[00:41:22] David Hornik
It’s challenging, right? I mean, can you imagine trying to build businesses here with that kind of, you know, instability?

[00:41:28] Jeff Klavier
No, no, that’s what. And, you know, that’s sort of the situation that French entrepreneurs who are trying to build real businesses have to face. Because obviously you don’t have those issues in startups, right? But you live with an environment where suddenly you have unpredictable sort of events like that, where the ERA tp so the people who drive the metro sort of ground straight, and suddenly your guys just can’t get to the office where it takes like two or three hours and it’s just like, you know, it just can’t happen. You just can’t fathom that as someone living in the U.S. it’s just a question.

[00:42:03] David Hornik
These infrastructure things matter, right? We often talk about the outsourcing of development, et cetera, to places that have less stable infrastructure. And for a period of time, it was unclear connectivity and power and those sorts of things. In India and other places still, there are certain unpredictability, unpredictable elements of China and sort of this interchange between China. And so what you really need is true stability and predictability if you want to have this commerce go back and forth and be able to develop at the same pace and all those things. So it’s just been. It’s very interesting to watch. It’s interesting to watch, of course, Paris, but it’s. It’s more interesting from where we sit to say, what’s happening in India? Is there enough, you know, is there enough predictability about power and connectivity and.

[00:42:47] Jeff Klavier
Workforce and all that stability of government and so on?

[00:42:50] David Hornik
Absolutely.

[00:42:50] Jeff Klavier
Comes, you know, a holistic issue. And I remember a couple of years ago, five years ago maybe I was at this meeting of Invest in France, which is sort of the agency which is trying to promote France as the place for US Companies to go to when they establish a headquarter, you know, in Europe. And there were all those sort of high powered CEOs of tech companies and you know, saying, hey, you know, this, that and the other. And that gentleman sort of raises his hand, says, so how can you wave strikes in 35 hour week to my company if I move to France? Oh, but monsieur, we can’t. Okay, I’ll move to Ireland.

[00:43:26] David Hornik
Right, exactly, exactly.

[00:43:27] Jeff Klavier
And Ireland has just been capturing a ton of that because, you know, they speak English with a strange accent, but speak English. And it’s just, you know, a lower cost labor and very high quality labor. And so that’s why, you know, Ireland has been doing really, really well in that environment.

[00:43:42] David Hornik
But what’s interesting is that I’ve noticed a trend towards lots of outsourcing these days to South America, to different countries.

[00:43:48] Jeff Klavier
Argentina, Argentina.

[00:43:49] David Hornik
And again, there’s this challenge. One is a language challenge. Although by and large the world does speak dual languages, their own in English. And so that tends to help. That may be shifting, you know, Chinese, Chinese, Chinese in your language.

[00:44:03] Jeff Klavier
But anyway, you know, my daughter, who’s, who’s turning nine, is doing sort of a program where she learns Chinese a couple of hours a week at her age. And then she’ll have. It’s very tough, actually. It’s very, very challenging.

[00:44:16] David Hornik
It’s like, those are bad. My son’s taking Japanese and Japanese. If Japanese is hard and it is terribly hard, Chinese is, you know, is yet another order of magnitude.

[00:44:24] Jeff Klavier
But the concept of, hey, you know, let’s have English, Spanish, Chinese, you know, will at some point become the curriculum as opposed to us. You know, I learned in my times, I hope it’s over now, you had to learn German first, then English, then Latin, you know, to have the best teachers in science. So if you’re not taking German as a first language, which is pretty useless now, right, to me, you would not get the best teachers in physics and math. And so we all did, you know, an entire generation did German, English and Latin, you know, to get the best teachers to science.

[00:45:00] David Hornik
That’s wacky. So I don’t Think we said the reason we’re going to Paris is to. For the Le Web conference.

[00:45:04] Jeff Klavier
For Le Web. Yes. Which is sort of the. The biggest and brightest, you know, European conference around the web, new technology and so on, so forth. It’s been around for six years, you and I. You were at Les Blog, the first one.

[00:45:17] David Hornik
Yeah, absolutely.

[00:45:17] Jeff Klavier
So we’ve been there for six years. Right. So Libblog, Liblog did. And the Web. And now we have the Web09, which is going to have. It’s going to be the biggest to date. As of this morning, 2050 people have registered.2050.

[00:45:34] David Hornik
I hope we have heat. I hope.

[00:45:36] Jeff Klavier
What?

[00:45:37] David Hornik
Look, last year we had no heat.

[00:45:39] Jeff Klavier
Yeah, we had no heat. And the WI Fi. And that wasn’t.

[00:45:42] David Hornik
I can live without the WI Fi because you know what? It’s hard to get wi fi for 2,000 people. I’d rather. But on the other hand, heat just seems like that one. Like, how hard is it to have heat?

[00:45:52] Jeff Klavier
Well, I did the whole thing just. They had. So the place where the. The web is organized by our good friends Geraldine and Luc le Mer had just, you know, launched. It just opened and they’ll be back.

[00:46:04] David Hornik
Is that same place?

[00:46:05] Jeff Klavier
Yeah.

[00:46:05] David Hornik
Okay, well, they should have heat by now.

[00:46:07] Jeff Klavier
They will have heat and WI Fi.

[00:46:09] David Hornik
And look, I totally feel for Geraldine and Lorique because, you know, as a conference organizer, there are a million things that can go wrong. Like this year at my conference, there was so much wind at one venue that I had to move that like in two hours, had to move an entire event. And dinner, really, whatever. From the outside.

[00:46:25] Jeff Klavier
The outside dinner.

[00:46:26] David Hornik
Yeah. Because there was like so much wind, that sand, it was just terrible. So, I mean, I certainly understand that, like, their problems. So. So it’ll be nice that they’ve had a year at this facility to work out the King.

[00:46:36] Jeff Klavier
So hopefully they will work out the kinks. And, you know, it’s, it’s, It’s a very ambitious program. We’re gonna have Her Majesty, Queen Rania, you know, so we’re gonna have a queen in. You know, we had Sarkozy two years ago. And we’ll have a queen.

[00:46:48] David Hornik
Not just a drama queen, but a.

[00:46:50] Jeff Klavier
Real queen, the Queen of Jordan, to come and be interviewed. And so I sort of look forward to that. And we have a great program. The issue is that there are so many speakers that, you know, I’m gonna be leading the panel on mobile applications, so iPhone, Android and so on and so forth. Have great speakers. Six of them.

[00:47:08] David Hornik
Yeah. But they’re too Many.

[00:47:09] Jeff Klavier
And I have 40 minutes, and I’m gonna be like, you know, if ever someone speaks for more than 30 seconds, I’m gonna go, kill sign, kill sign. But it’s gonna be great. Just like everyone and his mother in Europe is coming. There’s a ton of us from the Silicon Valley actually moving.

[00:47:21] David Hornik
This is what.

[00:47:21] Jeff Klavier
This is for the week.

[00:47:22] David Hornik
This is what Nawik has figured out, which is absolutely right. Get the core group of people who are, you know, who are thinking about this stuff in the Bay Area and convince them to go to Paris and talk about and address these questions in Paris. The end result is that all the Europeans then come with the most interesting things that are happening in Europe, which then drives everybody else say, oh, well, okay, this is a gathering now of all the interesting stuff that’s happening in Europe. And the folks are coming from the Bay Area, etcetera, And I get, you.

[00:47:49] Jeff Klavier
Know, a bunch of my friends from Sand Hill saying, dude, dude, this. The Web thing, you looking like, interesting. Big. Should I come? I say, yeah, if ever you go to Europe once, yeah, if you’re gonna go to just check out, you know, the ecosystem and companies or whatever, just go. So, you know, there’s still time. There’s still some tickets, you know, I’m not sure. When does it start?

[00:48:06] David Hornik
Wednesday.

[00:48:06] Jeff Klavier
It starts. Yeah. Wednesday. We have the speaker’s dinner on Tuesday.

[00:48:12] David Hornik
On Tuesday or Wednesday? I think it starts Wednesday night. We have a speaker’s dinner.

[00:48:15] Jeff Klavier
No, our speaker’s dinner is on Tuesday. And then the program is Wednesday and Thursday.

[00:48:20] David Hornik
All right, well, that’ll be good.

[00:48:22] Jeff Klavier
So if you’re in Paris and listen to this, come and say hi.

[00:48:25] David Hornik
Yeah, absolutely. All right. I think. I think we. You people have probably had enough of us, frankly, don’t you think? But here’s your chance. But here’s your chance again. We’ve instituted this important part of the program where, in conclusion, we suck up to someone, our favorite person, and.

[00:48:40] Jeff Klavier
Okay, so suck up to someone so I can think about someone.

[00:48:42] David Hornik
Well, I want to say. But first of all, I want to. I want to just do. No, I’ll do. I’ll suck up first. So. So I was.

[00:48:52] Jeff Klavier
So David is rolling on his couch here.

[00:48:55] David Hornik
I was at this board meeting in Boston for this company, Nomis Solutions, I was telling about. And I was talking about this, talking with the CEO, who’s a guy named Frank Rhodey about VentureCast, because he actually listens to VentureCast when he’s out running. And he was talking about.

[00:49:09] Jeff Klavier
So there’s two of us.

[00:49:11] David Hornik
There are Two people listening. So he was saying that he associated certain arbitrary things I said with, oh, I, I was running on the Rhine, or I was such and such. But anyway, so the person I want to suck up to is Frank this time because. So this is a company that’s doing price optimization for banks. This is like, how can you. I mean, just the unbelievable pain that he’s had to deal with coming into this year where the entire financial services sector collapsed. And yet he’s providing this software that provides real, manageable, trackable value. Right. Which is you’re making 200 more basis points on your loans over billions of dollars, whatever. So he’s been pounding his head against the wall and he’s had a great year just, you know, working hard to convince financial services that if they want to survive in this economy in the future, they need to understand pricing as much as risk. And so, A, I want to suck up to Frank for listening to venturecast, so thank you for listening. But B, for just like doing such a great job in a brutally tough environment economy. I mean, that’s the difference between a great entrepreneur and a good entrepreneur. A great entrepreneur says, yeah, this is a tough, tough environment. But I’m. But it motivates me to just keep going and crush it. And when it’s a good environment, he’s just going to soar. So that’s all. So I’m sucking up to Frank Rode, the CEO of Nomad Solutions. I thank you.

[00:50:33] Jeff Klavier
And I think that these kinds of entrepreneurs will actually do even better in tough environments because that’s when there’s no competition, they will just like, see the opportunity and shoot for it and run.

[00:50:41] David Hornik
Yeah, just kill it. So.

[00:50:43] Jeff Klavier
So it sounds like you have a winner in the, in the making.

[00:50:45] David Hornik
I hope so. I hope so.

[00:50:46] Jeff Klavier
You know, so who am I gonna. Oh, I didn’t know I had to suck up to someone, which I hate doing.

[00:50:53] David Hornik
I know.

[00:50:54] Jeff Klavier
If you don’t want me.

[00:50:55] David Hornik
I mean, I love sucking up to everyone. I’ll suck up to you, Jeff. You’re the man.

[00:50:58] Jeff Klavier
You’re the explorer.

[00:50:59] David Hornik
I’m the man for a long time.

[00:51:02] Jeff Klavier
Sorry. Oh, I’m getting in trouble now.

[00:51:04] David Hornik
Sucking up.

[00:51:06] Jeff Klavier
That’s. That’s the one for my. But I just can’t help myself. No, I think that’s the guy I have a ton of respect for. The early stage world is an ecosystem where there’s maybe six to ten firms or individuals who do most of the deals. And so for me, it’s a distributed partnership and we make our own decisions independently. But we work together and share due diligence and so on, so forth. And we always try to assemble syndicates in a way that will satisfy everyone’s interests, if we can.

[00:51:38] David Hornik
If you can, if possible.

[00:51:39] Jeff Klavier
And, you know, there’s first Round capital, there’s True ventures, there’s Mike Maple’s investments, there’s one convent, so on, so forth. But the one I would like, I would suck up to just as a sign of being impressed by his recent investment is Mike Maples, who is not only a very, very smart guy, is very, very nice, but if you look at the portfolio he’s built, you know, between being involved in Twitter and Chegg and a bunch of really interesting companies, we have like five in Commons, which I won’t mention because I’m already six.

[00:52:07] David Hornik
Six.

[00:52:08] Jeff Klavier
You’re up to six. I’ve really been impressed by his ability to pick deals which are not obvious, work with them and turn them into something which will contribute to turning them into really something interesting. So, Mike, well done.

[00:52:24] David Hornik
Yeah, no, and you said something in there that I’d like to re, emphasize, which is, he said, and he’s a nice guy and he is like the consummate. This is not the. Go for the jugular. Mike is a believer in, you work hard, you work with great people, you’re, you’re a nice and supportive guy and things work out great. And for him it will. And he’s done a fantastic job. So I, anyway, so we suck up to you, Mike Maples. We, and we, and we need to.

[00:52:48] Jeff Klavier
Make sure that you listen to this.

[00:52:49] David Hornik
All right, so. Yeah, exactly. Someone will say, hey, Maples, did you hear Clavier and Hornick were sucking up to you and what are you talking about? You’ll now you have, you’ll have to listen to 52 minutes of venture cast to get to it for you. All right, I just want, in closing, I just want to summarize that. Mr. So thank you, Jeff Clavier, for joining us, as always.

[00:53:08] Jeff Klavier
My pleasure, David.

[00:53:09] David Hornik
Our only, our one and only guest. But maybe we should do that. Maybe we should have guests because, you know, Howard and I are kind of boring over time.

[00:53:16] Jeff Klavier
No, you’re not boring. I really enjoy your shows, but I think they just add, especially if you have a funny accent, you know, it just adds diversity.

[00:53:21] David Hornik
All right, so I’m gonna have another good accent. Another good accent. So just, just in closing, I want to summarize that Jeff Clavier of Softech VC has invested, has pitched for us today. Retail Technologies next big sound Mint Eventbrite outright and bit ly. Those were the six companies that he mentioned. He has another 30 some odd more.

[00:53:44] Jeff Klavier
So Mint was in my first personal portfolio in which there was 24 and the other five are in the fun portfolio where there is, as of today, 45.

[00:53:53] David Hornik
45.

[00:53:54] Jeff Klavier
Two more coming.

[00:53:55] David Hornik
Very nice. Well, we look forward to hearing about the other two and we wish all of you a very happy hol. You venture investors who are listening. We hope you find an excellent Christmas deal to get done at the last minute. Your Hanukkah deal.

[00:54:07] Jeff Klavier
And remember, there’s always some for you in my portfolio. So call me.

[00:54:10] David Hornik
Just give email jefftechvc and he’d be happy to let you choose among a panoply of excellent deals. Thanks for listening. Goodbye.