Generated Transcript

[00:00:14] David Hornik
Hello and welcome to VentureCast. I am David Hornik of August Capital.

[00:00:19] Howard Hartenbaum
And this is Howard Hartenbaum also of August Capital.

[00:00:23] David Hornik
It’s been a little bit, but I guess we’re used to that. How have you been, Howard?

[00:00:29] Howard Hartenbaum
All is well in the venture capital front?

[00:00:31] David Hornik
Exactly. No, it’s interesting actually. I just, I probably on Monday will close a second deal in a month and that’s kind of unusual just. But tells you this venture business is kind of this patchy thing, right? You meet with lots of companies and some are interesting and some are whatever, but when you see something interesting, you fund it independent of whether you just did a deal or you haven’t done a deal forever. And even if you haven’t seen a deal for two years, if you haven’t seen the deal for two years, if you don’t, if it’s not a great company, don’t fund it. These things are not time based. There’s no criteria.

[00:01:09] Howard Hartenbaum
This company in particular, I think is an interesting example of how August partners all work together in funding a company. In this case, our partner Vivek Mehra was introduced to this company and it sounded kind of interesting. And he met them and he was calling some customers and doing some technical background on it. He then brought them into the partnership for everybody to meet. And because of David’s experience with Splunk, the company was very interested in David’s background and understanding of the market space because it’s in a somewhat related area. Then other partner Dave Marquardt called someone that he knew who one of the entrepreneurs used to work for. And I called a good friend of mine who used to work for one of the entrepreneurs to do some reference checking. And those guys called the entrepreneur and told them good things about us and kind of all of the partners were involved in finding the deal and doing the research on the deal and reference checking and helping to determine if it was a good fit, but also to help win the deal. And unlike many firms where the guy who finds the deal, it’s his deal, in this case, David was the best fit to be the partner on the board. And even though Vivek did all the work to find the deal and David is now taking the deal, it really is a, a partner collaboration. Even though I hate that word, I stole the deal. No, and I think it’s great because we all work together and now we’re all investors in this great company and we’re excited by it. Many venture firms don’t work that way. It’s more siloed and the guy who finds a deal with his deal and nobody really wants to pass it off. But we’re a little bit different here in that respect.

[00:02:50] David Hornik
Sometimes it’s economic, right? I mean, there are some firms where your. You get more money for your deal, right? You get, you get better economics for your deal. So if you think it’s a super exciting deal, it’s going to be worth a ton of money, then you fight. Oh, no, I’m gonna, I’m gonna get more economics because it’s gonna be a great outcome. Whereas here at August, we all work hard together to make everything work because it’s, because it doesn’t impact the economics, right? If you. I would be thrilled if any one of my partners invested in the next great company. That’s worth it. Ton of money. We all benefit from that.

[00:03:26] Howard Hartenbaum
The only challenge to the way it works in getting kind of assigned responsibility is if a company is funded by a specific partner. And in the process, sort of everybody votes to do the deal and then later, it craps out. Often our investors, our LPs, look at that deal and they blame that partner for it, which I think is a little bit unfair. But on the flip side, when this company that David will be on the board on is worth $5 billion and we all make money, the LPs will give him all the credit for it. Which is a little bit unfair because Vivek deserves some as well for finding it and bringing it in. It’s not as cut and dry as many people would think. He found the deal, he made the decision, and he did all the work that partnerships, some work less together and some work more together. But in this case, in the future, when this company is very successful, we. We will remind our investors that it was mostly David doing the work for a long time, but Vivek was the one who found it and brought it in in the first place. And that they should remember that.

[00:04:26] David Hornik
Yeah. But it is interesting. The LPs do track. They track partner performance, Right? And they. At one point, one of our investors said that on average, a venture fund has 1.4 good investors. So in this instance, it’s impossible.

[00:04:43] Howard Hartenbaum
And 3.6 sycophants.

[00:04:45] David Hornik
Yeah, whatever it takes, you know, singing the praises. But I’ve. I was at this dinner the other night. There’s this professor, Adam Grant, and he’s a professor at Wharton. Really, really great guy. Kind of the fastest rising star in Wharton history. Or maybe he was the youngest tenured professor of Wharton, and. And he’s just written this new book and the book is called Give and Take and I raise it. I am only partially reluctant to raise it because if you actually get the book, Give and Take and read it, you’ll see that in the very first chapter, it talks a fair bit about me and Danny Shader and a set of interactions we had. But I think what the book talks about is interesting. It talks about this idea that there are different types of people in the world. There are givers and there are takers. And people think that the most successful people on this planet are the ones who are the takers. Right. That you, you know, you’re aggressive and you take, take, take. And Adam’s book basically comes to the conclusion that there are givers on this planet who are at least as successful by paying it forward, by being involved in, in giving to others and making connections and building relationships, and that in the end they reap the benefit of it. But it’s. But it’s not a short term thing, right? It’s a long term thing. So you got the takers, you have these givers, and then they have the majority of people that they call matchers who are sort of like, I’ll help you, you help me. It’ll all come out in the wash. Yeah.

[00:06:24] Howard Hartenbaum
And I hadn’t even heard of this book, but I was, until last Friday, I was having dinner with one of our investors and he had read the book and he was talking about givers and takers, and he was telling me about my own partner, David Hornik, who is a giver. And one of the benefits of that is that David wins greater than 80% of the time when he puts a term sheet down. And that’s a pretty high success rate for winning a deal. And it’s attributing. I have not read the book yet, so I may have this wrong, but he, you know, attributing that to. Because people like you and because you’re helpful and do stuff and what comes around goes around.

[00:07:04] David Hornik
Yeah, no, that’s definitely one of the, you know, that’s a very particular part of the venture business. Right. And it is tricky, right? I mean, I think it’s important and I think that as a firm, we do very well when it comes to wanting to do a deal and having people be interested in having us invest in the company. But, man, there’s nothing worse than being excited about a company and then having someone else fund it. And so do I attribute all of that to us being givers, being willing to, you know, pay it forward into the universe? You know, I Certainly do in some respect. Right? I mean, Howard, you spend a lot of time speaking and teaching and doing stuff over at Stanford. And you know, it’s not with an expectation that, oh, someone will give you something back, right. It’s just with the expectation that, you know, that it’s valuable to the entrepreneurial community and at some point you’ll meet someone interesting. And you know, actually Vivek, we taught him, he’s been very involved in Berkeley and we, he and you and I have periodically helped out with this one particular class and he met some great entrepreneurs through the class who we funded. And it’s a company called Retail Next. And it was not intended in any way to be a trade off. It’s just that we met great people and, and in fact, I think he helped them for like a year before it became clear that there was a deal there at all. So I, it, I, I like the theory. I think it’s, I think that it is.

[00:08:24] Howard Hartenbaum
Well, you like it because it says good things about you writing the book.

[00:08:27] David Hornik
I like the book. I like the book. Get Adam’s book, Give and Take.

[00:08:30] Howard Hartenbaum
If you get Adam’s book, David will sign it for you.

[00:08:32] David Hornik
Yeah, bring it by. I’m happy to, I’m happy to sign it. It actually puts a lot of pressure on you because you have to be a nice guy. And so every so often when you’re like being a jerk, you got, hey, they said in Give and Take you were a good guy. What a jerk. It’s too much pressure, Howard. You don’t have that pressure.

[00:08:49] Howard Hartenbaum
You can handle it. So I did this. David was saying that we do stuff at Stanford and Berkeley and other places. Most of the stuff or many of the things that we do are judging business plan competitions or doing panels discussing specific topics like do’s and don’ts of venture financing or the, or how to pick your co founder or what is a reference check. Good things like that. But I did one recently at Stanford where it was a class on a specific topic where they recorded it as a video. And it was the first time in a long time. I don’t really like being on video because it’s memorialized forever.

[00:09:33] David Hornik
They say only what you believe.

[00:09:35] Howard Hartenbaum
The trick is to just of course, be honest as always. But you know, if you swear a little bit on it, then you realize like you’re caught like on tape forever swearing. But this one video, and maybe it’s like an hour long video or 45 minutes or something like that, it was, I think, the most interesting one. I’ve done based on the response, which was, I’m getting emails from strangers all over the world every two or three days now. I’ve watched your video. In fact, I watched it five times, and I feel like I know you so well now. I’m hoping that when I come to the Bay Area, I can talk to you about my company, because I feel like I know you. So I have to go back and watch this video now and see, like, did I come across as approachable or open or. I don’t know what it is, but this is happening every few days. And it’s kind of an interesting. I mean, you’ve been on a lot of videos before, David. I don’t.

[00:10:27] David Hornik
You know, I haven’t done that too much. I actually better. I have a video and nobody calls me. You do one little video. Everybody loves you.

[00:10:33] Howard Hartenbaum
That’s because you take your clothes off and shit in the video. It’s better.

[00:10:36] David Hornik
You’re nicer. Plus, I always swear in my videos. Yeah, so. Oh, you know what? I was just reminded of this thing. So I teach this class back east, and part of it is about term sheets. And so I had Bijan Sabat come, and we were talking about term sheets, and we do a kind of mock negotiation. But anyway, one of the things that we were joking around about was the fact that VCs always make the companies pay for their lawyer fees, right? Then in the term sheet, it says, and you’ll cover legal fees up to 25,000 bucks or 40,000 bucks or whatever it is. And, you know, and Bijan was saying, like, oh, you know, I can’t believe you gave me a term sheet where I have to defend this, because really, I don’t even think it makes sense. Like, why is it that. Why is it that the VC’s legal fees are paid for by the company or whatever? And, you know, it’s just a cost of the financing. It’s been that way for a long time. And I’m not sure what was the thing that led to it, but we have this interesting conversation, and basically Bijan said, I don’t. It doesn’t make sense to me. And so now, I don’t know if it’s a coincidence or what, but a short time later on TechCrunch, there was. Or no, it was on Pando Daily, maybe there was an article saying that they had decided at Spark Capital that they would no longer require entrepreneurs to pay their legal fees, that they would pay their own legal fees and entrepreneurs pay their own legal fees, and that was that. And I just thought it was an interesting, interesting. It may have been coincidence. And they were working towards that anyway. But we had this conversation in the classroom and then the byproduct was, now, if you get funded by Bijan, he pays his own lawyers.

[00:12:14] Howard Hartenbaum
Good, good for Bijan. I mean, I’ve had, I’ve been doing this now for 12 years. And this has come up on numerous occasions. And in one occasion, the entrepreneur just dug in as he was a $2 million financing, and he’s like, I’m not paying. The company is not paying the legal fees. And I said, okay, how about if I increase the financing amount to $2,030,000 and we get the same percentage? And he still was upset at it. And I’m like, but what’s the difference? And he wanted to know why. And in this case, it was when I was working with Bill Draper. It was simply because we have the money in the investment entity in terms of expenses and we didn’t have a line item for legal and we had the money in our investment account for that. So we would rather do it that way. It wasn’t about getting money back out of the entrepreneur, as I proved by saying, I’ll just give you that money extra in the financing and we get the same percentage. But I think he was a little bit torqued by that. He thought we were trying to pull something over on him somehow. But in the end, I think I gave him the extra $30,000. So it did come out of my. It is coming out of my pocket. Yeah. It’s just.

[00:13:17] David Hornik
No, I mean, the reality is that they’re different. You know, this is just an accounting thing ultimately. Right. And when it’s a small financing, obviously if you’re raising 100,000 bucks and you have to pay, you know, $20,000 in legal fees, that’s a huge percentage or whatever. When you’re raising a 25 million dollar finance again and you pay 25 or 30 thousand dollars in legal fees, it’s, you know, it’s a, it’s a small tax, but. But it’s an interesting question. And it did make me wonder whether by Spark and Bijan taking this position, it was going to start and be a tipping thing where others feel the pressure and they say like, you know, well, Spark doesn’t take legal fees. Why are you guys doing it?

[00:13:53] Howard Hartenbaum
I think that’s what they were hoping.

[00:13:55] David Hornik
Yeah. All right, everybody join in.

[00:13:56] Howard Hartenbaum
I mean, if you were to think that a small point like that would make that big a difference, then exploding term sheets would have gone away a long time ago. You want to explain exploding term sheets?

[00:14:06] David Hornik
Yeah, I mean, the exploding term sheet is like. Is this idea that you give someone a term sheet and you say, this term sheet’s good for two days, after which I won’t fund you anymore. Right. So. Or by Thursday or whatever it is. It’s, you know, it disappears after a period of time. And it’s designed entirely to put pressure on you to make a decision quickly. Not to make the right decision, but to make a quick decision.

[00:14:27] Howard Hartenbaum
And we and many other good funds don’t use exploding term sheets, but many do. And as an entrepreneur, if you get a offer from somebody that says, I would like to marry you and be your partner for the next 10 years, but you have to tell me by 5pm today, yeah, not so much. There’s something wrong with that.

[00:14:44] David Hornik
So, by the way, bringing it back to give and take. I’m pretty sure there’s a piece in the story in the book about the fact that when I gave Danny Shader his term sheet, it wasn’t an exploding term sheet. And I said, look, you should explore whatever opportunities you see fit, and et cetera.

[00:14:59] Howard Hartenbaum
So what I’ve said to entrepreneurs on occasion is, here’s a term sheet. This is the deal we’d like to do. Let me know if you have any comments on it. Every now and then one says, but why doesn’t it have a time limit on it? And I said, because I don’t want to pressure you into making a decision. I want you to be comfortable with it. And frankly, if you really don’t like this deal and you don’t want to work with me, then take the deal and use it to bid up somebody else. And if you do that, I didn’t want to work with you anyway.

[00:15:24] David Hornik
Yeah, I mean, we often do this like, oh, you made a different decision. That’s a great indication that we didn’t want to work with you.

[00:15:31] Howard Hartenbaum
Yeah, maybe that’s a. Being a sore loser.

[00:15:33] David Hornik
I have decided that all future financings I’m going to fund in bitcoin. That’s my. That’s how we’re going to differentiate August Capital. We’re going to convert all our LP money into bitcoin, then it may appreciate, and then we can fund companies in bitcoin.

[00:15:50] Howard Hartenbaum
So bitcoin is an interesting example of excitement and hype and momentum that will yield a bunch of venture financing in the next 30 days or 60 days. Bitcoin has been nascent for quite a long time. For years, in fact. There are real Concerns about the business, like will the US Government allow a non governmental currency to get to any real significance? That is a significant risk. Maybe they will, maybe they won’t. There’s been issues about volatility, about trust, about how it’s being used, whether it’s for illegal gambling and all sorts. But regardless, it’s growing fast. It’s exciting, it’s in the press a lot. So we’re going to see a bunch of financings coming in the near future. And the kind of. The story, if you haven’t seen it lately, is that one of the nascent but respectable bitcoin companies had a partnership with the largest bitcoin exchange in Japan, called Mount Gox. The claim that the company is called Coin Lab, Coin Lab claimed that Mount Gox was violating their agreement and was doing business in the U.S. behind their back, even though they had U.S. rights. And they filed a $75 million lawsuit yesterday or today on the company. And that adds a lot of excitement. And it’s particularly interesting because I’m sure both companies are trying to raise money at the same time right now. One suing, one getting sued. I’m sure the press is going to eat this alive and it will probably drive even more venture capitalists to say, what’s going on? What’s going on?

[00:17:25] David Hornik
Well, did you see the story that the Winklevoss twins. So the Winklevoss twins are the guys who originally funded Facebook to the tune of some number of thousands of dollars. They ultimately settled making hundreds of thousands of dollars. I don’t know how much they made, but anyway, they have taken some portion of their wealth and bought 10% of the bit. Bitcoins outstanding. 1% of bitcoins outstanding. Okay, 1% of bitcoin outstanding. So imagine you have 1% of a currency and this, you know, I mean, and it’s pre appreciated a huge amount, although it does fluctuate wildly. The other day it. There was some issue with one of the, you know, one of the agents, bitcoin agents in it. And the bitcoin currency dropped by tens of percentage points across the entire currency. So it’ll be super interesting to see whether anything comes of it. I will say so. It’s funny, Howard, I had this conversation with someone about this recently where I likened it to Skype. Right, so you funded Skype. The early days of Skype. Here’s this P2P network that creates value, that allows you to create a telephony experience that is at least as good, if not better than the telephony infrastructure that Exists around the world, right. And it starts getting traction. It’s working as long as you’re on a computer and someone else is on a computer. But the reality is that the telephony liquidity of computer to computer communications was at the time relatively small compared to the ability to get out two way telephone. Right. But the second Skype solved that problem and allowed you to go from Skype to a natural currency, a natural telephony currency, which is my cell phone or someone’s phone and whatever, boom, thing wins. Right.

[00:19:09] Howard Hartenbaum
So bitcoins in cash.

[00:19:11] David Hornik
That’s right. If I’m going to invest at this point, I want to invest in the thing that allows you to bridge that gap between bitcoin and dollars, between bitcoin and yen or whatever. And I think it’s an interesting question. I mean I had this conversation with Danny Shader about pay near me, right? Where they can take cash into the system and convert, convert that cash into bits, right into and, and do an online transaction. And so someone will solve it. But right now there is no good way to get, you know, to get money out of bitcoin. There’s no clean exchange.

[00:19:46] Howard Hartenbaum
Yeah, I think a big piece of excitement around bitcoin is simply it’s a speculative item right now. It’s no different than you betting on, it’s different than you betting on gold, that there might be gold in the ground somewhere and you’re bidding up the value of the land around it. You know, you may never get your money out of it because you might not find gold in it in the process. But there are speculators that do that. And a friend of mine who’s a venture capitalist, he has this unit in his head of $250,000. And whenever he sees something that he thinks could be kind of a speculative bet, he puts one unit or $250,000 down. And I was talking with him the other day and he bought $250,000 worth of bitcoins at $2.40 about a year and a half ago.

[00:20:32] David Hornik
What’s it worth now?

[00:20:33] Howard Hartenbaum
10 million or something like that.

[00:20:35] David Hornik
Is that right?

[00:20:37] Howard Hartenbaum
It’s trading at 100 bucks. 100 bucks I share right now. So 50x right? So he can’t get his money out so easily right now.

[00:20:43] David Hornik
But the fact if there’s ever liquidity, that was a good speculation.

[00:20:47] Howard Hartenbaum
But you know, it’s sort of like, oh, that ground looks like there might be some gold in it. So let’s start bidding up the price of that ground and then we’ll dig later and figure out what’s there. People like stuff like this.

[00:20:57] David Hornik
Sounds a little bit like some of these hot deals where the rational valuation of the deal may be 40 million free and it gets done at 200 million free. Yeah, because hey, it might be worth a ton, you know, we’ll see how it goes. Yeah, it’s pretty crazy.

[00:21:14] Howard Hartenbaum
I think we’re going to see a lot of press and funding and excitement around Bitcoin for a while, but there is a huge amount of risk going.

[00:21:22] David Hornik
It’s really weird. I mean, why now? Because I don’t know if you read it, but there was a great article in Wired magazine about bitcoin months ago. This is not a new, this isn’t like it just popped up last week. Why suddenly does everybody think that they should be talking about bitcoin? It’s amazing. What a bunch of lemmings we all are in that, you know, I think.

[00:21:41] Howard Hartenbaum
It may have to do with products that are hitting the market that may, that are making mining a, you know, simpler thing to do. If you search on Google for like bitcoin graphs, there’s some sites that just track various parameters of bitcoin. And what you’ll notice on those sites are banner advertisements for bitcode mining equipment, $2,500 Linux based box, this and that. There are tools companies that are coming out and they’re taking $50 boxes and slapping Bitcoin miner on the front and charging 2,500 bucks for them. And people are buying these boxes and mining for bitcoin.

[00:22:19] David Hornik
But these people are dopes. Have they even read about Bitcoin? Because the truth is that for every bitcoin that is mined, it makes the next one that more difficult, that much harder to mine. It makes it require that much more processing power, whatever.

[00:22:31] Howard Hartenbaum
Processing power is growing rapidly.

[00:22:33] David Hornik
Yeah, but not in one Linux box. I mean we’re talking about supercomputers worth of power to get any meaningful value out of the, out of bitcoin ground or whatever. Anyway, it sounds like you’re, you’re intrigued.

[00:22:46] Howard Hartenbaum
I mean I think anytime you see something that has that much enthusiasm and growth and it could be a very valuable thing. My concern is more around if the government really doesn’t like this and it’s non trackable and they’re worried. All the US has to decide is that terrorists are using this and if they are, then there’s going to be some issues with the system. It won’t be the same.

[00:23:06] David Hornik
Well, there’s been lots of efforts to try to create anonymous currency. How do you anonymize the process of buying stuff, Cash? Yeah. Well. And that’s the thing everybody’s saying, oh, my God, I can’t believe that. It’d be so scary. What do you think cash is? It’s not. Yeah, okay, yeah, you could get serial numbers, but the reality is there’s a long history of people understanding how to. How to launder money to make sure that cash is not traceable. So. Whoopi. Crap. So. So bitcoin isn’t traceable any. So neither. It. Neither are the 20s that are in my pocket. So. What? Yeah, of course your Buddy has many 20s worth of Bitcoin. So we’ll see. We’ll see what he. Maybe he can trade them for building or something. You know, it’s got to be like.

[00:23:50] Howard Hartenbaum
A university or something.

[00:23:51] David Hornik
Yeah, something you could buy. Something like that. You know, be. You could. You could. Because right now, barter is pretty much all you got in bitcoin land is I’ll. I’ll give you this. So give you a small jet for a bunch of bitcoin. Talk to the Winklevosses. Maybe they got something. Their. Their apartment or their house down in LA is very nice. Have you been thinking about that? No, I just. I haven’t been. I just seen it on the. I saw pictures.

[00:24:16] Howard Hartenbaum
So have you gotten a pair of Google Glasses yet?

[00:24:19] David Hornik
You know what? So, first of all, I thought that Google glasses were literally Google Glasses, right? Like, I thought they were attached to glasses. And so I thought, oh, that cat. That’s gonna work because I wear prescription glasses. It turns out that it’s kind of like a glass frame that sits on top of your glasses. So you can actually get Google Glass that is just a projector into your eye that. So I could wear them with my glasses.

[00:24:41] Howard Hartenbaum
So. Meaning they decided not to cut out half of the market size, apparently.

[00:24:45] David Hornik
But. But, you know, when you saw Sergei, right. He was always wearing these goofy glasses. I just figured, like, that was the only format that worked, was having these giant glasses in it. But. So if I had known that, I might have been more persistent about getting a pair just to try them out. On the other hand. No, but we’ve seen lots of stuff. I mean, there’s this really horrifying photo of Robert Scoble in the shower wearing his Google Glass.

[00:25:11] Howard Hartenbaum
I’m wondering if, you know, as they start proliferating, if there’ll be, like, new human interactions. Like, you’ll see somebody who’s wearing a pair, and you’ll, like, cover your face or you’ll have a special anti Google Glass mask that you wear. Or people start talking to you and you just like, ignore them or like, you know, culturally, it’s not acceptable to, to be wearing these. When you just approach somebody, you’re a store clerk and you’re waiting there and somebody comes and starts talking to you and you just ignore them. It’s socially acceptable to ignore somebody who’s wearing Google glasses. It could happen.

[00:25:44] David Hornik
Yeah. No, it’ll be interesting, right? I mean, it certainly is. Currently, social interactions are presumed to be, you know, to dissipate. Right. Sort of. Like, what’s the thing where you take a picture and it goes away? What? What’s that stupid thing?

[00:25:59] Howard Hartenbaum
My stupid thing? My daughter sends me all the time.

[00:26:01] David Hornik
Twitpic.

[00:26:02] Howard Hartenbaum
No, no, no. Snapchat.

[00:26:04] David Hornik
Thank you. Snapchat. Right. Our experience on aren’t supposed to be memorialized forever. They’re supposed to be. And then you have a memory of them or whatever. But that’s sort of that, right? So if there’s suddenly there’s this intervention that requires that this intervening piece of technology that can capture our experience. And I just read that there’s a new piece of software that will take a picture when you blink, right? So it’s not even. You don’t even have to do anything. You don’t have to say anything or do anything. It’s just a hack that says, okay, when I blink, take a picture. Right? So. Or maybe you’re constantly recording someone or maybe you’re live streaming them, right? What about when someone walks into the bathroom or when someone walks into the gym shower, Right. I mean, it’s not like there aren’t, there aren’t problems with this thing. So. But I’ll tell you what I would love. I would love to have something that is, that does face facial recognition and tell me the context in which I met that person. You know, like, oh, good to see you again, John. It has been a long time since I met you.

[00:27:03] Howard Hartenbaum
No, it’ll be more like on the cruise ship, it’ll be more like, oh, good to see you again. And then John will see you take your eyes up to the upper right as you’re looking to try and get it. And the pause and then John, and it was good to see you as I look up to the upper right.

[00:27:17] David Hornik
But just like name tags, when you look down, it’s someone’s name tag.

[00:27:21] Howard Hartenbaum
Yeah, I hate when the name tags are really low and somebody comes up, hey, Howard, how’s it going? You’re like, hi. And you’re like trying to look down at their data.

[00:27:28] David Hornik
And if I look, it looks like I’m looking inappropriately. It’s very troubling. So you’re not, so you’re not getting glass. You’re not a.

[00:27:36] Howard Hartenbaum
You know, it’s certainly interesting and I think that I can imagine a reason, like, everybody wants to have more brain and computing and memory capability, and this could potentially do that for them. My questions are all around, and it is a huge change in the social conventions to know that you’re talking with somebody who is using technology to potentially reach past what’s happening. I mean, like, I would feel, be happy if every. You’re coming into the US and every immigration officer is wearing them and looking at all the people coming in. It might make you feel safer. Like, it’s okay that they’re violating your privacy. They’re trying to catch a criminal in the process.

[00:28:16] David Hornik
Airport security is airport security, right? I mean, you know, we go, we, we, we give up some of our privacy and you accept it.

[00:28:23] Howard Hartenbaum
So it’s a privacy question. If you’re walking down, you know, I’m not a famous guy, but if you’re Mike Moritz and you’re walking down University Avenue, 99% of the people aren’t going to recognize you. But if everybody’s wearing Google Glass, like, there goes your life. Because everybody like, oh, it’s Mike Moritz. And you know, some people will be, can I get your autograph? And other people will be kicking them in the shins. This would be horrible. You know, Steve Jobs could walk on University Avenue and very few people would recognize him. Yeah, if everybody’s wearing Google Glass, it’s.

[00:28:57] David Hornik
Well, it’ll be very interesting. So you know what? I also think it’s sort of surprising, and I was about to say crazy, and I guess it sort of is crazy, but that they announced that, you know, Google and Google Ventures announces this venture fund, venture effort to invest in companies focused on Google Glass. And it’s Dreesen Horowitz. And they show that picture of Mark Andreessen with the Google Glass. And then you have Kleiner Perkins with John Doar wearing his Google Glass sort of remind me of. And Bill Maris, and Bill Maris from Google Ventures. But it reminded me of like, you know, last time it was John Doerr wearing a hoodie and announcing the social fund when social had already played itself itself out. You’re like, wait, it’s sort of too late for the social fund in this instance. It may be too early. Like, you know, there are seven of these devices out there. And you’re really going to create a fund that’s interested in investing in what apps that live on a device that doesn’t have very broad distribution. And so it just, I thought it was quite interesting that they’re willing to. Now it’s probably about reputation and PR and all those things. So you get, you know, you get a bunch of, get a bunch of coverage for something that really just means that you’re looking at deals. And so maybe they may never fund a single company in this space.

[00:30:11] Howard Hartenbaum
But it was a nice picture.

[00:30:12] David Hornik
Pretty. It’s pretty crazy, right? Like, you know, I think we should, we should announce the, the Wireless Power Fund where we’re going to fund companies that do wireless power and are. And, and devices and services that are enabled by wireless.

[00:30:27] Howard Hartenbaum
Wireless Power and Quantum Computing Fund.

[00:30:30] David Hornik
That’s what we’re doing. Exactly. And then you know, look, if you have those things, you’ll come tell us about them and if you don’t, you won’t care. And let’s do that. And when we don’t invest in any of those things, we’ll go, oh man. You know, we were looking for the best possible investment. You know, we were ahead of the curve.

[00:30:44] Howard Hartenbaum
If you and Vivek and I will come up with a good new focus area that doesn’t exist yet. We’ll do that and we’ll take a picture. This is coming. We’re going to do a sub fund in our fund and it will be not Wireless power. I’m sure we can find something more interesting. The anti patent troll fund.

[00:30:59] David Hornik
The anti bad. Yeah, exactly. Well that those exist. Right? I mean there have been whole funds set up to like attack these. The patent roll. The attack of. The attack of the patent troll. And rightfully so because look, you know, at the end of the day, IPs. IP, I understand it, it deserves to have some value at folk. Whatever. But. But honestly, if you’re a non practicing entity, if you have a patent that you didn’t create and wasn’t involved in your business and you’re not using to for it for the sake of your business, like you know, who are you to be attacking with it? And more importantly to use it as a, as a, as a, as an attack, not as a shield, but as a sword, you know, pretty challenging. So. Well, Howard, I know that we haven’t done this for a while, but unfortunately we have to cut this one short because it’s a mid mid Friday and.

[00:31:51] Howard Hartenbaum
You and I have a meeting.

[00:31:52] David Hornik
We actually have meetings to go to. That’s an unusual thing in the venture business that a Friday afternoon has to be interrupted with meetings. But Howard and I actually are here. We’re here at 2480 Sandhill Road every Friday afternoon. Feel free to drop in Building 5. Building 5, 2480. Say hello.

[00:32:09] Howard Hartenbaum
Good luck getting past the front desk person.

[00:32:12] David Hornik
Yeah, very, very tough, tough minded. But if you say hey, Venture cast, they said they that we should stop by and say hello. Ideally on the hours. So if you meet, if you come by in between hours, like at 12 or 1 or 2, we’re more likely to be, you know, passing through and would love to say hello. Howard’s not sure. He’d love to say.

[00:32:31] Howard Hartenbaum
I’m perfectly happy to say hello. I was just waiting for you to do your sign off.

[00:32:35] David Hornik
Oh, all right. Well, anyway, this is David Hornik and this has been. Oh, I’m sorry. This is David Hornik of August Capital and this has been Venture Cast.

[00:32:42] Howard Hartenbaum
Thank you for coming today.