Speaker 1: This is Masters in Business with Barry rid Holts on
Speaker 1: Bloomberg Radio. Welcome to the podcast this week. I'm Barry
Speaker 1: rid Holtson. You're listening to Masters in Business on Bloomberg Radio.
Speaker 1: This week. I have an old friend in as a guest,
Speaker 1: Howard Lindzen, who has a storied background in the world
Speaker 1: of angel and venture investing. I know Howard for a
Speaker 1: good couple of years, primarily from his time when he
Speaker 1: was running the stock Twits network, which was the largest
Speaker 1: financial social network out there, as well as a number
Speaker 1: of other investments that he's made over the years that
Speaker 1: I've been familiar with in the technology space. Howard is
Speaker 1: a Canadian, so that makes him nicer than most people,
Speaker 1: but also gives him a slightly different perspective on how
Speaker 1: things are here in the States. And and we've seen
Speaker 1: a number of different Canadians like Howard and Paul Couldraw,
Speaker 1: you know, there's such folks come down from Canada and
Speaker 1: just you know, have a slightly different perspective which lets
Speaker 1: them see things a little bit differently. And I think
Speaker 1: you'll find this and amusing and interesting conversation with no
Speaker 1: further ado. Here's my conversation with Howard Linson. This is
Speaker 1: Masters in Business with Barry Ridholts on Bloomberg Radio. My
Speaker 1: guest this week is Howard Linsen, entrepreneur, angel investor, hedge
Speaker 1: fund manager. What what else can we add to your curriculum?
Speaker 1: Vitae married nineteen years, two kids, two dogs, two kids,
Speaker 1: two dogs. I get my best ideas from the dogs
Speaker 1: and the kids. You know. I read somewhere that your
Speaker 1: hobbies are driving your kids around and staying awake, and
Speaker 1: I will save the answer to what that actually means
Speaker 1: till till later. So let's talk a little bit. Remind me,
Speaker 1: resumet and sleep are two big absolutely, So let's talk
Speaker 1: a little bit about your background. You grew up in Canada,
Speaker 1: in Toronto, and then not like it's like New York
Speaker 1: considered Canada, Montreal's Canada, Yukon territories as Canada. So you
Speaker 1: don't think growing up north of the border impacted the
Speaker 1: way you view the economy, economic activities, and technology. Good question.
Speaker 1: I think Toronto's boomed for so long that I don't
Speaker 1: think we were subject to some of the some of
Speaker 1: the stuff that probably happened in the United States. Tront
Speaker 1: has just been in such a long boom. Maybe it's
Speaker 1: because they couldn't leverage themselves. I feel the city has
Speaker 1: become like in l A without an ocean. So I'm
Speaker 1: not I'm not barish on Torona. I don't like it
Speaker 1: as much as I used to in it. But I
Speaker 1: moved away when I was young. I moved to Arizona
Speaker 1: when I was nineteen. So but you still effectively grew
Speaker 1: up north of the border. Oh yeah, I grew up
Speaker 1: love the city. All my friends were there. I grew
Speaker 1: up in a wealthy neighborhood, so I was lucky. Uh
Speaker 1: And so maybe I just didn't see the differences as
Speaker 1: much as you know. We grew up watching CBS affiliates Buffalo.
Speaker 1: We saw Buffalo burn during the seven News. Everybody was
Speaker 1: burning down Buffalo. Cheek to Wauga, Tonawanda. Those our news
Speaker 1: in Buffalo. And the Bills. We were bills, and I
Speaker 1: don't know we were bill. So you moved to Arizona.
Speaker 1: You get an undergraduate degree in Canada, graduate degree in
Speaker 1: UM the United States? How did you find your way
Speaker 1: to angel technology investing? The I came out of a
Speaker 1: school called Thunderbird right after the Gulf War, whose logo
Speaker 1: looks like it's right from the trans never really cared
Speaker 1: about my degree, never mattered to mean, that's worthless. That
Speaker 1: logo looked it was right off of the Transformers movie.
Speaker 1: It was right off the Transfort So the dean was
Speaker 1: Optimus Prime and and I didn't know. They went why
Speaker 1: how does the school go bankrupt? How mismanaged is their endowment?
Speaker 1: They just college doesn't have TARP. That's why to go bankrupt.
Speaker 1: There you go no bailouts. But there's no bailout from
Speaker 1: Howard's graduate school. Listen, it was a dual degree with
Speaker 1: a s U and Thunderbird, which is not So it's
Speaker 1: a good question. I don't know, because you could give
Speaker 1: yourself a doctorate if they don't assist anymore, you could
Speaker 1: promote yourself. I gotta be honest. Is this a funny story?
Speaker 1: The But I'll go quickly because there's more important things
Speaker 1: to talk about. I think I had missed two classes
Speaker 1: and we were in a fight over whether my degree
Speaker 1: was there. I waited a couple of years, walked in
Speaker 1: really dumb and asked for my degree one time, and
Speaker 1: they gave it to me. So I do have that degree.
Speaker 1: But more importantly, I don't know I think it's still
Speaker 1: I don't know. I you know, I don't I know.
Speaker 1: I have the most Twitter followers because they invited me
Speaker 1: to school. They never liked me, but I got invited
Speaker 1: social I got the claim to fame. The dean called me,
Speaker 1: who's now a George Mason who was a really good
Speaker 1: guy to President Angel Cabrera, not the baseball player, And
Speaker 1: uh he called me one day, goes, oh, we're very
Speaker 1: interested in social media and you are the so so
Speaker 1: how did you become the man? How? Let's start first,
Speaker 1: how did you find your way to angel investing? Yeah?
Speaker 1: What a? What a? What a? First of all, very
Speaker 1: I think a lot of angel investing is uh, first
Speaker 1: of all passion. Second of all, it's no different than
Speaker 1: anybody with domain expertise, little luck, little passion um. But
Speaker 1: that's how do you be successful once you're there? Okay,
Speaker 1: how do you go from I'm a business major? Two,
Speaker 1: I have an idea. Why don't I seed a bunch
Speaker 1: of startups? Well? I only seeded one. I graduated. I
Speaker 1: was illegal in the States. It was hard to work.
Speaker 1: I didn't have it was the Gulf War we had.
Speaker 1: And do you want to graduate from school? Uh? The
Speaker 1: country was at war. I was um. It was a recession.
Speaker 1: You had Charles keating, Phoenix was a mess s and
Speaker 1: l Christis was the center of the mess. And you
Speaker 1: know I the only job I could get was as
Speaker 1: a stockbroker for the Principal Group, which became Eppler became
Speaker 1: many things. Principal Group. Yeah, yeah, yeah yeah. But when
Speaker 1: I was doing I was cold calling. It was the
Speaker 1: only job I could get. They sponsored me and I
Speaker 1: cold called this kid Mark scatter Day and he had
Speaker 1: invented a product called the grip. It was a stress
Speaker 1: ball to two meetings later, I realized he didn't have money,
Speaker 1: so I wasn't gonna get him as a client. But
Speaker 1: I had invested in twenty five grand hard during twenty
Speaker 1: five grand, I went to my dad's and Dad backed me.
Speaker 1: We got this great product. Blah blah blah. He asked
Speaker 1: for a business plan. It's a business plan. This is
Speaker 1: just yeah, this is just a home run product. Come on,
Speaker 1: and uh, Unfortunately was probably one of the last times
Speaker 1: I talked to my dad. So you failed backwards into
Speaker 1: through through this product in events are investing exactly. This
Speaker 1: product became the pet Rock. It's in the QBC Hall
Speaker 1: of Fame. Uh. It was giant success, giant success, forty
Speaker 1: million in revenue. Um really got me going in my
Speaker 1: hedge fund world because Mark and I had all this
Speaker 1: cash to manage, and the nineties were point what a
Speaker 1: boom time. It was roll up city and UH in
Speaker 1: our business, which was the specialty business, it became you know,
Speaker 1: I had learned about roll ups. I learned about the
Speaker 1: healthcare indstory, fight Corps and all these uh healthcare roll
Speaker 1: ups if you can remember. And it was a bullmarket
Speaker 1: of like a epic proportions in the night. It was
Speaker 1: a low vall bowl market, and I thought I knew
Speaker 1: what I was doing. It was just a good lucky
Speaker 1: first Angel investment. And really the core of that Angel
Speaker 1: investment was, oh my god, this is the best product
Speaker 1: I had ever felt. Earlier, I used a quote of
Speaker 1: yours and I want to repeat it. And have you
Speaker 1: explained it a little bit? You recently said in print
Speaker 1: There's never been a better time to build the business
Speaker 1: in America than today. Explain I say it every time
Speaker 1: I get asked. November my favorite, the best time I
Speaker 1: ever said it was in front of a bunch of
Speaker 1: Canate Torontonians and two after I'd sold wall Strip and
Speaker 1: it was the crash VIX was a hundred. I posted
Speaker 1: a chart to the SMP on the VIX and I said,
Speaker 1: what are you people doing watching me? You should be
Speaker 1: a building a business. That's really when I started plunking
Speaker 1: down a lot of my money. But today I say
Speaker 1: the same thing. Here's what Well, let me just back up.
Speaker 1: Wall Strip was one of your earlier investments. It was
Speaker 1: a satirical um sort of like the Daily Show for finance,
Speaker 1: only online and three to five minutes segments. You had
Speaker 1: lindsay correct, Libell threw was terrific, right, and um you
Speaker 1: sold that to CBS for a nice jump to change. Yeah,
Speaker 1: we started six months. I cold called Fred Wilson, who
Speaker 1: would backed Cramer at the Street dot com. Fred gave
Speaker 1: me my first fifty K, introducing me to a bunch
Speaker 1: of other vcs. I used the term loosely because they
Speaker 1: all invested without meeting me. Twenty five Grand Brad Feld,
Speaker 1: Mark Pinkas. It was a who's who at the maybe
Speaker 1: not at the time on Fred's phone call, the funniest
Speaker 1: being Mark Pinkas, who said no at first and said
Speaker 1: tell Fred to stop giving up my phone number. Mark
Speaker 1: went to under starred Zinga but he it has been
Speaker 1: a big success. But he did invest, but never really
Speaker 1: give me any at kudos. Marks a pretty tough kid.
Speaker 1: So but so by the way, Fred Wilson runs at
Speaker 1: hopefully we get him in here, hopefully we so. So
Speaker 1: just a little background, Fred runs Venture from my mentor.
Speaker 1: He started Union Score Venture, which has been wildly successful.
Speaker 1: I would say the best East Coast media VC of
Speaker 1: all time. Right and after he's made people enough money
Speaker 1: at a certain point, he calls up and says, hey,
Speaker 1: I'm putting some money into this throw or fifty and
Speaker 1: most people don't even He looked at it as an
Speaker 1: art project. Obviously YouTube it just started. We had chatted
Speaker 1: on his blog for a long time. I never really
Speaker 1: needed anything. I was taking ideas from him. Term sheets.
Speaker 1: Had to build a term sheet. This was you know,
Speaker 1: this was my way into the into the truly learned,
Speaker 1: real education. For it was Fred the school. Fred was
Speaker 1: this is who's going to pay the teamsters type stuff
Speaker 1: from Rodney Danger Phil. So I would cut and pay
Speaker 1: stuff from their blog and build term sheets. And I
Speaker 1: was so grateful. And there's oh five and the uh
Speaker 1: when I saw YouTube. I said, it's time to disrupt them.
Speaker 1: See let's build a show reverse it cramer, a female
Speaker 1: cramer that there's nothing about the markets. Let's see if
Speaker 1: we can educate her and teach her about trend Following
Speaker 1: Fred plunked down, we put our first show on online.
Speaker 1: It was really funny. The Apple Show was the original show.
Speaker 1: It was like, let's get long Apple. Obviously continue to
Speaker 1: be long Apple probably a probably about twenty bucks counting
Speaker 1: for oh now it splits, it's probably like six bucks,
Speaker 1: five six bucks, So home run idea. We covered Nike
Speaker 1: next to Paul Day's companies that I felt. The idea
Speaker 1: was stocks making all time highs that I felt were
Speaker 1: in trends that were everlasting. Obviously what not quite ever lasting,
Speaker 1: but long long lasting, everlasting themes. But the point is, yeah,
Speaker 1: trying to find companies that you didn't have to day trade.
Speaker 1: So uh. We raised six hunder grand sold to CBS
Speaker 1: for five million in six months. Now, so I became
Speaker 1: a little bit of a almost ten x and six
Speaker 1: times that came a little bit of a celebrity. So
Speaker 1: that was kind of the fun little interlude to started
Speaker 1: parlaying that money into Angel investment. The comment, there's never
Speaker 1: been a better time to build. Here's here's here's what
Speaker 1: I said. Go ahead. In nineteen eighty when I started
Speaker 1: a company, it was you had to spend three grand
Speaker 1: on a box, just a box. To get a telephone
Speaker 1: in your room, you had to spend a rent with
Speaker 1: your name on it. You had, um, you had. You
Speaker 1: had to buy PCs for four or five grand. Uh.
Speaker 1: It was just ridiculous. Today you do it at Starbucks
Speaker 1: with the laptop that you can let your parents you Now,
Speaker 1: anybody can start a product. The other thing is number
Speaker 1: one way to get into business by yourself, to start
Speaker 1: a franchise. Right, Okay, so so even today, UH to
Speaker 1: toot one of my portfolio companies. We you know, with
Speaker 1: Lending Club going public and on Deck Capital going public.
Speaker 1: Now we're going to see the verticalization of these platforms
Speaker 1: were getting money. I invest in a company called apple
Speaker 1: Pie Capital, which helps franchise e s UH crowdsource money
Speaker 1: to open their first UH franchise operations. So the franchise
Speaker 1: ors are now because the banks aren't lending going on
Speaker 1: these platforms or someone being apple poecat like a kick
Speaker 1: Starter for angeling starter but in a very specific niche
Speaker 1: of franchisees. Yeah, which is business in America. It's the
Speaker 1: it's the it's the pulse of America. Fran I want
Speaker 1: to open to McDonald's saying McDonald's because we're not doing
Speaker 1: business with me yet. But companies in the Midwest, whether
Speaker 1: they're like this big jewelry franchise or a pizza franchise
Speaker 1: where it's approven franchise, if you follow the instructions, you
Speaker 1: can make the money. Uh, and they can't. Banks can't
Speaker 1: fund them. So now you know that's a great yield
Speaker 1: type play for institutions. So put two hundred thousand across
Speaker 1: a diversified portfolio of franchises. So when I say never
Speaker 1: been a better time to start a business, you go
Speaker 1: start a franchise company right now. A business you can
Speaker 1: go start, You go get a job anywhere you've got
Speaker 1: Craigslist LinkedIn. Uh, there's no excuse not to be able
Speaker 1: to just show up at a company and just approve yourself. Yeah,
Speaker 1: you can go learn to code for thirteen grand and
Speaker 1: one of these private schools and Nila, build a game.
Speaker 1: Build I'm not saying you have to go build something
Speaker 1: because there's a lot more skills and marketing and sales
Speaker 1: and getting your first customers and figuring out all that
Speaker 1: to do. But you can get your skills free. You
Speaker 1: get your skills for basically free. It's more than just
Speaker 1: the basic technology, it's everything that surrounds coming up with
Speaker 1: an idea, making it sellable, and then doing everything surrounding
Speaker 1: it beyond the technology. And you can do this while
Speaker 1: you have a job. So, I mean, you know, I
Speaker 1: always recommend people don't take the leap until you really
Speaker 1: are committed to being an entrepreneur. A lot of people
Speaker 1: call themselves entrepreneurs. I think we're at a stage where
Speaker 1: there's a lot of entrepreneurs. There's these people that you know,
Speaker 1: have a job, they think they have another business. You
Speaker 1: don't have a business until you're doing it full time.
Speaker 1: You're not committed. Uh no real investors going to give
Speaker 1: you money if you haven't taken the leap away from
Speaker 1: or at least guys like me aren't. But um, you know,
Speaker 1: it's never been a better time to take that leap
Speaker 1: to do research. All these things that used to be
Speaker 1: behind needs now in the wall are now there. Uh.
Speaker 1: Your phone is forty bucks a month, eighty bucks a month.
Speaker 1: That is your your your business. You've got relate i Q.
Speaker 1: You can go build a CRM product, you go use
Speaker 1: a CRM product on your own, start your business Gmail,
Speaker 1: relate i Q. That sounds like it's all very straightforward stuff,
Speaker 1: not a lot of out of pocket cost. One of
Speaker 1: the things I wanted to talk specifically about today. You know,
Speaker 1: we always hear about the the idea, here's a world
Speaker 1: changing idea. But as an investor in startups, I want
Speaker 1: to throw five bullets out and you tell me what's important,
Speaker 1: what's less important, what's not important? The founders, the idea,
Speaker 1: the technology, the business model, or the valuation. What are
Speaker 1: those things matter most? I see them and getting so
Speaker 1: I would throw out a technology doesn't not important, Well
Speaker 1: I don't think so. So over the tech behind Uber
Speaker 1: not significant doesn't work unless there was Google Maps. That's
Speaker 1: theoretically it's not even their technology. Well it is, but
Speaker 1: I mean you gotta blend it with Google Maps. Where
Speaker 1: would over show up? They wouldn't know where to show up.
Speaker 1: So you know, I can talk about that with all
Speaker 1: the things that I do. You know, a mashing just
Speaker 1: like speech up. So I think Tommy domain expertise in
Speaker 1: the founders matter. You know, I'm forty nine years old.
Speaker 1: I'm not writing checks like a surpriad chicken anymore. This
Speaker 1: gray and prey. I'm looking for founders with domain expertise,
Speaker 1: because you're gonna have to get You're gonna get hit
Speaker 1: over the head. There's gonna be false starts, there's gonna
Speaker 1: be all kinds of issues. I think we're you know,
Speaker 1: uh still called Valley has been fanatical about these young kids.
Speaker 1: I think as the market boom matures, uh, you know,
Speaker 1: having some domain experience matters. So founders matter. The idea
Speaker 1: obviously matters because with the founders they have to have
Speaker 1: passion around the idea and some knowledge around the idea.
Speaker 1: So um, it's a founders first, uh value technology lass
Speaker 1: valuation second last. Because if the founders are great, the
Speaker 1: market idea is great, and the idea is great, you're
Speaker 1: not gonna have that much choice over what the valuation is.
Speaker 1: My biggest mistakes so far have been in passing based
Speaker 1: on valuation Twitters and Twitter at twenty million valuation in
Speaker 1: two thousands and seemed crazy. Luckily, I am an investor
Speaker 1: through Bitley and tweet Deck and many other companies in
Speaker 1: that system they bought. They bought some Eyes, which was
Speaker 1: the search engine of Twitter. So luckily I ended up
Speaker 1: with a lot of Twitter shares and then a very
Speaker 1: low profect the same valuation. And I basically tweet deck
Speaker 1: as well, the same thing. So I backed into a
Speaker 1: lot of Twitter shares. But and and Twitter inspired me
Speaker 1: to start stock Twitter, which is now, like you said,
Speaker 1: the largest social network for traders. So founders idea, um,
Speaker 1: business model matters. I think as we get late in
Speaker 1: the boom, you gotta have a thought about how you're
Speaker 1: going to do business. So you now just hinted it.
Speaker 1: My next question as we get like technology last and
Speaker 1: valuation last. So here's the other question. So is the
Speaker 1: startup market frothy? We've been here for five years, Ah,
Speaker 1: Silicon Valley, it's a bubble, it's this Is it frothy?
Speaker 1: Does it? Is it? Always? Is this abnormal? Tell us
Speaker 1: the state of technology investing in Well, like I said,
Speaker 1: I don't think there's enough entrepreneurs. There's there's Cash has
Speaker 1: become a commodity. Uh. Platforms to invest, whether it's angel
Speaker 1: List or Kickstarter or apple Pie Capital or lending Club,
Speaker 1: have become helped cash become a commodity interest rate to
Speaker 1: zero or forcing people to invest. So that's where the
Speaker 1: bubble is. The bubble is in the commodity of cash,
Speaker 1: I mean bubble cash that they've created another one. Bitcoin
Speaker 1: capital isn't as valuable as it once was because there's
Speaker 1: so much. There's so much of it and leields are
Speaker 1: so low. So don't kid yourself what we are shortage
Speaker 1: of our great entrepreneurs, but domain experience. Who knows anything
Speaker 1: about But you go back a kid or to do
Speaker 1: a blockchain or a bitcoin thing. They may know a
Speaker 1: little bit about tech, they know nothing about how the
Speaker 1: regulations work in the industry works. So there's a huge
Speaker 1: disconnect there. The second disconnect is, you know, there's a
Speaker 1: lot of great ideas, but good luck finding an entrepreneur
Speaker 1: the execute soup to nuts on that. Including myself, it's
Speaker 1: very hard to do that. I haven't turned out to
Speaker 1: be able to do everything I wanted with stock twids
Speaker 1: because there's a lot of moving parts to how all
Speaker 1: these things work and timing in raising the right capital, etcetera.
Speaker 1: It's a very subtle thing to be a great entrepreneur.
Speaker 1: And so I'm biased in the sense that my big
Speaker 1: winds have come from great entrepreneurs. So when we look
Speaker 1: at when we look at the issue of of the bubble,
Speaker 1: is this just too much cash taste chasing too few
Speaker 1: entrepreneurs or do you think this is a full blown
Speaker 1: bubble that ends the two thousand ended? And no, this
Speaker 1: is not. I mean, let's let's let's really look at
Speaker 1: this market. And I see crashes and oil, I see
Speaker 1: crashes and currencies. I see crashes in Russia, and I say, well,
Speaker 1: you know, the bubbles have never been like this, where
Speaker 1: this SMP continues to rise through it and race continue
Speaker 1: to decline. So I would say I went down almost
Speaker 1: from the peak. I don't I think what we have
Speaker 1: a bubble in h is this idea of being an
Speaker 1: entrepreneur and that's dangers. So it's it's not it's you know,
Speaker 1: similar to nineties and everybody said, hey, I could be
Speaker 1: a day trader. Similar, exactly similar. And when people thought
Speaker 1: they could be a day trader, everybody thinks they can
Speaker 1: start a company. And I'm saying, if you have a
Speaker 1: good job, don't kiss a goodbye so quickly. And if
Speaker 1: you don't have a good job, absolutely start looking to
Speaker 1: build your network. I mean now anybody can build their network.
Speaker 1: My fund is called social leverage. The whole premise based
Speaker 1: on financial leverage was a bubble that was the last
Speaker 1: true bubble and then ended in two thousand eight, and
Speaker 1: we still are paying the price for that. But social
Speaker 1: leverage is a brand new boom, and that's people using
Speaker 1: the networks LinkedIn Twitter, Facebook to accelerate themselves, kind of
Speaker 1: like the peloton, to accelerate themselves through learning curves, mentorship,
Speaker 1: what I did with Fred and Brad in terms shoots,
Speaker 1: and what you can do on stock, Twits and Twitter
Speaker 1: now to accelerate yourself. I want to talk a little
Speaker 1: bit about some of the lessons learned from investing. You
Speaker 1: mentioned earlier you passed on Twitter. That's a giant mess.
Speaker 1: You ended up backdooring into a lot of Twitter shares.
Speaker 1: But how does one deal with, Hey, this is a
Speaker 1: good investment and it turns out not to be or
Speaker 1: this is a band investment it turns out to be great.
Speaker 1: What do you learn from that process? What do you
Speaker 1: take away from that? Oh? You know the number one question.
Speaker 1: I guess if you're gonna call me a master in business,
Speaker 1: it would be because it goes down to the basics, right,
Speaker 1: you can learn all this stuff and textbooks. Um, and
Speaker 1: I have a kid's fifteen and seventeen. I wonder if
Speaker 1: I want them even go into business school because it
Speaker 1: really comes down to pie, right, how do you slice
Speaker 1: the pie? And then it comes down to foundation. How
Speaker 1: do you structure the company? You know at the beginning,
Speaker 1: because the mistakes you make at the beginning over those
Speaker 1: simple things of understanding how you're splitting up a pie
Speaker 1: and what you really own, the type of shares you own,
Speaker 1: the type of shares everybody else owns, and the way
Speaker 1: you structure the company. Meaning if then then that, if this,
Speaker 1: then that you have to assume you've been through this.
Speaker 1: You have to assume how you're gonna fight with your
Speaker 1: partners mathematically, you have to assume you're gonna back looking
Speaker 1: at this cap table. You know all the time this
Speaker 1: weekend on that exact subject. And I remember saying to somebody, Dude,
Speaker 1: you're doing this twenty years. You haven't figured out the
Speaker 1: cap structure is significant. It was, It drives stud paying,
Speaker 1: it drives all the pain here. I've made so many mistakes,
Speaker 1: meaning the capitalization structure, who owns? What? What happens when
Speaker 1: you fight all those basics you're talking. If we're talking
Speaker 1: masters of business, learn that understand what you own always
Speaker 1: goes back to understanding what you own. We buy public stocks.
Speaker 1: I look at public stocks. Is I think, I'm it's
Speaker 1: the worst piece of paper you could possibly own in
Speaker 1: a company. Yeah. So I prefer to own the most
Speaker 1: high momentum, high pe things because they're liquid and I
Speaker 1: can change my mind. But I'm betting on catalysts, which
Speaker 1: are products and not people. I'm betting on products and
Speaker 1: themes at the public company. In public companies the earliest stage,
Speaker 1: I am trying to control the cap table and make
Speaker 1: sure everybody understands because my job is as a maestro
Speaker 1: of all this is making sure the founders have structured
Speaker 1: themselves right. Uh do they get along? Are they going
Speaker 1: to get along? How does the cap table look? What
Speaker 1: are my rights? What are my investor rights? Because those
Speaker 1: are the mistakes that I've made the most. Do I
Speaker 1: have follow on rights to what happens if a founder
Speaker 1: hates another founder? Let me let me interrupt you right here.
Speaker 1: You said, do you learn more from your failures or
Speaker 1: your success? You don't learn from winning the grip? The
Speaker 1: grip my squeezeball company. I didn't learn a damn thing.
Speaker 1: We were smoking cigars, buying cars at lunch, orders were
Speaker 1: coming in over the fax machine. Gross margins. You don't
Speaker 1: learn from having gross margins. You learn from having tem
Speaker 1: percent gross margins. Going the hell am I doing with
Speaker 1: teen percent gross margins? Shut this business down? Uh? So
Speaker 1: I can say that all my growth has come from failure. Uh,
Speaker 1: it's painful. I don't recommend it. I don't think you
Speaker 1: have to have failure. I mean the grip was the grip.
Speaker 1: I should have just retired and and done nothing. But
Speaker 1: what what are then we wouldn't be having this conversation.
Speaker 1: So what are your biggest failure and what were the
Speaker 1: lessons from those? The biggest failures I have and you
Speaker 1: can get specific. Yeah, I mean it's just putting myself
Speaker 1: in business with the wrong people and not really understanding
Speaker 1: the business that I myself was involved. And I was
Speaker 1: in a brokerage business in the late nineties. I thought
Speaker 1: it was a great idea, as a hedge fun guy
Speaker 1: to own my brokerage to cut my commissions. I got
Speaker 1: myself in bed with a nastack guy who I thought
Speaker 1: it was the right guy to be in business with.
Speaker 1: And let me just tell you, I didn't understand what
Speaker 1: a broker dealer really how much trouble you could get
Speaker 1: yourself into at a broker dealer. Long story short. He
Speaker 1: was putting winning accounts in his personal account and and
Speaker 1: bad and bad winning trades in his personal account, bad
Speaker 1: trades in the air. How do you that it was
Speaker 1: impossible to discover their Stearns never called him out on this,
Speaker 1: and then ran up a six million dollar air account.
Speaker 1: I would say that was a local six and you
Speaker 1: know the power by arbitration, so I couldn't even really win.
Speaker 1: And then nine eleven happens, of course, and most are
Speaker 1: counts are a few thousand dollars five rand max. And
Speaker 1: we bought, we bought a little too much of this
Speaker 1: and moved against us client argues about the price and
Speaker 1: your that's insane. It was insane. It was the worst. Yeah, yeah,
Speaker 1: and he dollar fine still works at a hedge fund. Criminal.
Speaker 1: You know, the sec is so broken. The NS used
Speaker 1: to trust them. When we started stock Twits, we went
Speaker 1: at a disadvantage because I said, you know what, I
Speaker 1: don't want to be a broker dealer. You know, I
Speaker 1: could probably build a big business if I was actually
Speaker 1: in charge of the trades. But you know, I've just
Speaker 1: tried to figure out how to do business without even
Speaker 1: getting myself involved with FINRA, an E s D and
Speaker 1: the N s D. Uh they're sloppy. Uh. They don't
Speaker 1: work for the people that matter. Uh. They work for
Speaker 1: the wealth and they work for the wealthy. It's just broken,
Speaker 1: you know. So combat struggled with disrupting this this industry
Speaker 1: because they don't. Google don't even want to be involved
Speaker 1: the one industry. Google doesn't really want to put it
Speaker 1: himself involved in his money, and actually that is Google
Speaker 1: is the smartest people in the world. All they do
Speaker 1: is feed brains and they go, you know what, let's
Speaker 1: avoid the N s D, SEC and FINRA because you
Speaker 1: know what they're they're wild cards. They're the worst part
Speaker 1: of the government. That's really fascinating you. I know you personally,
Speaker 1: I don't know these people. I know, I know you're
Speaker 1: friendly with Mark Cuban. When we did the interview with Mark,
Speaker 1: you're basically quoting from his playbook. He went off on
Speaker 1: a on a jihad for ten he has more reason. Right,
Speaker 1: I was involved criminal. They didn't mean no wrong. The
Speaker 1: finn run any s D, I, like an idiot, take
Speaker 1: full responsibility for not understanding what I was doing. I
Speaker 1: wasn't a criminal. I was involved with the criminal. So
Speaker 1: this is a different reason. I just look at it
Speaker 1: as like Google, the greatest company we've ever seen, refuses
Speaker 1: to challenge Bloomberg or the or nasdak cme the market
Speaker 1: makers are the biggest market maker in the world. I
Speaker 1: don't think with the sec and finright, we want to
Speaker 1: be we don't want to go there. That is how
Speaker 1: I would decide that. That's the difference between East Coast
Speaker 1: and West coast. And that's why nastac that story. That's
Speaker 1: why it's still combat. But it's coming, man, it is coming.
Speaker 1: And by the way, there's end a rounds with bitcoin
Speaker 1: in the blockchain. Uh. Google's an investor with me and
Speaker 1: robin Hood and many financial startups. Now they're getting so
Speaker 1: buch sort of financial startups. Data Fox, which is kind
Speaker 1: of like a which I'm an investor company. No, no, no,
Speaker 1: it's just a way to organize private company information. So
Speaker 1: it's kind of like a NASDAC for private companies. That's interesting,
Speaker 1: very interesting. Uh, they're involved in robin Hood with me,
Speaker 1: which is a broker dealer, a mobile broker deal I
Speaker 1: call it the Uber of trading, which is my favorite
Speaker 1: startup at the moment. They are involved in Lending Club,
Speaker 1: They're involved in Uber, they are involved in uh so
Speaker 1: many financial startups that you don't know, and Uber being
Speaker 1: and Lending comb being two of the biggest ones. So
Speaker 1: they're backdooring into this space. They're they're buying their time patiently,
Speaker 1: and uh you know, it's going to be exciting next
Speaker 1: ten fifteen years in finance. I'm very bullish on fintech.
Speaker 1: So so let's talk So there's fintech, let's talk about
Speaker 1: a couple of other technologies, wearables, you mentioned bitcoin, nano genomics, biotech.
Speaker 1: What what space coming down the road is really exciting
Speaker 1: beyond fintech. Well, they talk about big data and fintech.
Speaker 1: I think that's a bit of a Bologna maneuver. I
Speaker 1: think Bloomberg has got a great handle on big data
Speaker 1: on markets. I think big data as it applies to
Speaker 1: genetics is obviously the cloud computing. So so all this
Speaker 1: technology applied to you're seeing the biotech. Nobody understands them,
Speaker 1: nobody owns them, right, it's been a five year bull run.
Speaker 1: They were, they've had a huge understand But when people
Speaker 1: really start owning these things, they're still not talked about,
Speaker 1: Like on CNBC, BBC still shutters on Fanny May, City
Speaker 1: Bank old analysts that Google Apple, When was the last
Speaker 1: time they really dug in for months? On biotech it's coming,
Speaker 1: I'm not that's a bubble. That's the closest we have
Speaker 1: to a bubble is what is biotech but a time
Speaker 1: But nobody's talking about biotech. But I'm saying they can
Speaker 1: double during that last phase. But they've you know, they've
Speaker 1: definitely had a great run, you know, the leader since
Speaker 1: the bottom of aile way. The the amazing thing about
Speaker 1: biotech is any one of these companies can easily put
Speaker 1: out a billion dollar product if it hits. And the
Speaker 1: traditional way of putting out a new drug is you're
Speaker 1: spending three four five million dollars in R and D
Speaker 1: and but no, you don't have to and and so
Speaker 1: you buy one dollar. Company could come from biotech. You know,
Speaker 1: everybody's focused on Apple and Google, but let's face it,
Speaker 1: it could come from a biotech company. Someone who can
Speaker 1: help us live to a hundred heart company you know
Speaker 1: a global company that solves you know, helps me live
Speaker 1: ten years longer. Uh is could be a trillion dollars?
Speaker 1: How far off are we to a cure not for
Speaker 1: cancer with a capital C, but your cancer that we
Speaker 1: take your genomic reading and identify exactly what we need
Speaker 1: to do to kill your specific runaway cells that are
Speaker 1: unique to you. You and I are yeah, I'm a
Speaker 1: little older. Yes, so we're screwed. But our kids may
Speaker 1: live till they're hundred very easily. And that goes to
Speaker 1: why I'm investing in fintech. My kid's generation doesn't like
Speaker 1: what's retirement. I have a mobile phone, I have have Uber.
Speaker 1: I'm gonna live till I'm a hundred. You're the idiots.
Speaker 1: Uh you know this is uh, this is why you
Speaker 1: have to rethink how things are done. We have this
Speaker 1: long Schwab generation, which I'm bullish on Schwab but and
Speaker 1: I own the stock. But they don't understand how to
Speaker 1: think like a fifteen year old whose whole life is
Speaker 1: on a phone. Every message disappears in snapchat, every car
Speaker 1: is on demand. They can get shows up and then
Speaker 1: Netflix for all my content that is my life and
Speaker 1: my iPhone or in my droid. So if you think
Speaker 1: you can understand what's going through a millennial's head, you're
Speaker 1: just lying to yourself, and that's a beautiful opportunity. I've
Speaker 1: been speaking with Howard Linson of Social Leverage. He's an
Speaker 1: angel investor and venture capitalist. If you enjoy this conversation,
Speaker 1: be sure and check out our podcast extras, where we
Speaker 1: continue speaking at great length about these and other subjects.
Speaker 1: You can also check out the entire archive of past podcasts.
Speaker 1: You can find that at Bloomberg dot com or on
Speaker 1: Apple iTunes. Be sure and follow me on Twitter at Ridholts.
Speaker 1: Check out my daily blog at Ridholtz dot com, or
Speaker 1: read my daily column on Bloomberg View dot com. I'm
Speaker 1: Barry Ridholts. You're listening to Masters in Business on Bloomberg Radio.
Speaker 1: Welcome back to the podcast. I'm Barry Ridholts, and you're
Speaker 1: listening to Masters in Business on Bloomberg Radio. This is
Speaker 1: my favorite part where I don't have to worry about
Speaker 1: reminding you that there are no commercials or anything else.
Speaker 1: My guest is an old friend today, Howard Lindson, have Aldwie,
Speaker 1: how weird, how weird? How weird? So I know Howie
Speaker 1: for a long time. Um, what is it about people
Speaker 1: like you and Kedroski coming down here from Canada trying
Speaker 1: to eat our launch here in the States. What he
Speaker 1: truly he's from Vancouver. That's as opposed to Toronto, which
Speaker 1: is merely situated across the border. State right, it's the
Speaker 1: it's I mean, Paul is an academic, a good investor
Speaker 1: in a smart cookie. Um, I think I think we're explorers,
Speaker 1: right or anybody who explores, uh is not going to
Speaker 1: choose the Yukon. They're going to choose California. So a
Speaker 1: Canadian explorers prefer to come south people better weather, Yeah,
Speaker 1: more more, You're not just doing oil and timber. And
Speaker 1: And that was the one guy from my friends that
Speaker 1: just just wanted to come to the States. I love
Speaker 1: the desert. I moved to Arizona and now I love
Speaker 1: the beach. I think a mayor, as a Canadian in America,
Speaker 1: I look at politics and it disappoints me because we
Speaker 1: have so much good that we could do, and I
Speaker 1: just you know, it's been so good to me living
Speaker 1: in America. With the size of a market, it's always
Speaker 1: disappointing to see the negative news. I don't watch TV
Speaker 1: anymore because it's impossible to gauge the negativity. It's just
Speaker 1: negative two seven. Can I tell you I haven't watched
Speaker 1: live TV to be fair, and my wife flips on
Speaker 1: um CBS to get the weather in the morning and
Speaker 1: when I'm sitting at my desk at four thirty writing
Speaker 1: the morning commentary. But other than that, we never watch
Speaker 1: live TV. Watch the watch TV. Any of the top
Speaker 1: investors if they're watching TV and be shocked, it's either
Speaker 1: something that I wanted to see that I DV yard
Speaker 1: or something that I specifically hunted. By the way, so
Speaker 1: I've used Apple TV. Everything on Apple TV is it's
Speaker 1: net flicks, put every plus everything else. But where I
Speaker 1: live up in the Woods, we have Dish instead of cable,
Speaker 1: and now Dish has Netflix built into them. You're lucky.
Speaker 1: I'm stuck on Tyre Moarner from the moment. I don't
Speaker 1: think there's a work. You can move to Dish if
Speaker 1: you want, you can move to satellite of you. It's
Speaker 1: like it's like Wells Fargo. I cannot believe what they
Speaker 1: put me through yesterday with fraud. You know, I'm in
Speaker 1: New York trying to spend money at Lululu Iman then
Speaker 1: they've decided my card to stolen despite you purchasing a
Speaker 1: plane ticket to come to New York City. So I
Speaker 1: think you talk about big data. That's dumb day small data. No,
Speaker 1: they can't do small data like pick up the phone.
Speaker 1: They have my cell number, call me uh and then
Speaker 1: I give Wells Fargo, my name, my social my shoe size,
Speaker 1: and they asked for my They asked for my Internet online. Yes,
Speaker 1: some number, would I know? I don't know. Driving in
Speaker 1: a car trying to spend money at Lulu with your
Speaker 1: credit card? Can I get my money? No? Can I
Speaker 1: tell you what I found? Very effective? The systems are okay,
Speaker 1: this is what makes me bullish. So so never I
Speaker 1: will do everything I can to talk badly about Wells
Speaker 1: far going to with TARP money, holding me iron zero interest,
Speaker 1: holding me hostage while I try to try and spend
Speaker 1: money in the economy. So we know what. So we
Speaker 1: have two separate in our house. In our household, we
Speaker 1: have two separate um JP Morgan Chase accounts. The first
Speaker 1: one began as the Dime, which was brought by Chemical,
Speaker 1: which was brought by Manny Have and it ultimately ended
Speaker 1: up in JP Morgan. The second was Washington Mutual, which
Speaker 1: in the middle of the financial collapse, the fd I
Speaker 1: c auctioned off to JP Morris. So now all of
Speaker 1: our cancer JP Morgan, and we we know that we're
Speaker 1: gonna get this headache. So anytime we travel abroad, we
Speaker 1: go to Chase and we say, look, we're gonna be
Speaker 1: in this country or this island, and this isn't fraud,
Speaker 1: it's us. Hi, here's our I D it's US. So
Speaker 1: expect from the fifth to the tenth or whatever it is,
Speaker 1: the first of the eighth, we're gonna be sitting on
Speaker 1: a beach and here's the hotel, and don't be surprised
Speaker 1: when you get thinks. So what happens We go to
Speaker 1: the hotel, give them the card immediately. What bounces back
Speaker 1: is UM, you have to contact the bank they have
Speaker 1: a I did this previously, So now what I've started
Speaker 1: doing is when that happens, I pull out the Amex
Speaker 1: and then when I don't get the transaction through UM Chase,
Speaker 1: I then call him up and say, hey, I just
Speaker 1: want to let you know we dropped ten grand on
Speaker 1: Amex because you idiots. Despite me saying I'm gonna be
Speaker 1: on I'm gonna be in this island at this date.
Speaker 1: And here's the hotel. You still kick the charge back,
Speaker 1: embarrassing me at the desk, and the m X went
Speaker 1: right through. Well, they're not embarrassing you, because now that
Speaker 1: happens to everybody, But it's annoying. You're annoying me if not.
Speaker 1: And here's what happens. I Meanwhile, I'm I tweet I
Speaker 1: hate Wells Fargo. What do I get today? A d
Speaker 1: M or a question from Wells Fargo? Pack the freaking phone.
Speaker 1: Oh no, that's tree twittering. So let me tell you
Speaker 1: you're gonna do I don't want to talk to them
Speaker 1: ever again. They're done. So one of the great advantages
Speaker 1: of working hard in this country and getting lucky a
Speaker 1: few times is we're in this age where everything's robot.
Speaker 1: Oh you gotta cut fees. You gotta cut fees. I say,
Speaker 1: the number one thing you should pay for is financial
Speaker 1: advice and for I mean obviously gotta find the right
Speaker 1: financial advice and for service. I just the greatest gift
Speaker 1: I've ever had is having a uh high net worth
Speaker 1: Morgan Stanley account. I pick up the phone. Yea, I
Speaker 1: need a wired that it's done. Okay, I don't care
Speaker 1: what they're charging me. I just wanted to want it
Speaker 1: done professionally, on time, on demand. I want my trades
Speaker 1: done on demand. I want I want to talk to somebody.
Speaker 1: I don't want to any But one of the benefits
Speaker 1: of of working hard, that is the difference between the
Speaker 1: robo advisors and the other robo advisor is geared to
Speaker 1: be very inexpensive. In my office lift Off, we set
Speaker 1: up a row Bowl advisor because we have clients that
Speaker 1: and we have potential clients that don't want to pay that.
Speaker 1: Not if they're paying, you know, they still think they
Speaker 1: can call you. And I believe in it at many levels.
Speaker 1: I'm just saying one of the greatest we and we enough.
Speaker 1: Have you called Amazon to have No, you can't. That's
Speaker 1: part of the reason it's so an expense. No, I understand,
Speaker 1: you know, pick up the phone and call PayPal to
Speaker 1: complain about a mistake, and it can happen. That's why
Speaker 1: it's so biggest change coming is fintech, Wells, Fargo, all
Speaker 1: these banks they got their free paths and two eight
Speaker 1: they maybe they've been unfairly punished, uh and fines would
Speaker 1: be interesting thing about the fines is it's been a
Speaker 1: distraction for the banks, and so as much as they've
Speaker 1: had the cash to pay these things, they the gramlins
Speaker 1: are loose, whether it's payments or whether it's now transfer wise,
Speaker 1: it's just raised money. So you can do uh wires
Speaker 1: inter country without the money ever crossing border genius friend
Speaker 1: of mine investor Roger in Berg, or whether it's Robin
Speaker 1: Hood or whether it's bitcoin, or whether it's just Apple Pay,
Speaker 1: which still is not quite there because the banks are
Speaker 1: still involved, and so I refused to use it. Well,
Speaker 1: Apple has all these credit cards to Apple Pay because
Speaker 1: it could have been exactly what I want them to
Speaker 1: have a bank. Yeah, I understand they don't want to
Speaker 1: mean anything to me. Well, they need to do it.
Speaker 1: And that's so I said about the banking. Google and
Speaker 1: Apples still have that. That's not what they do, that's
Speaker 1: not what they're interesting to understand. But there's got to
Speaker 1: be another There's gotta be something better than seeing the
Speaker 1: Chase logo. I don't want them to see a nickel
Speaker 1: of my money. I don't trust them. They don't pay me. Uh,
Speaker 1: they waste money on real estate and services that I
Speaker 1: don't want, so you effectively invented the cash tag on Twitter.
Speaker 1: It's called the hashtag, it's called the cash. They they
Speaker 1: have now stolen that idea and called it the cash
Speaker 1: like it hasn't heard us. We've been growing really fast,
Speaker 1: but you know, it's not something that we felt that
Speaker 1: we could patent. All they're signed in front of a
Speaker 1: symbol and was a language that when Twitter started, I
Speaker 1: was inspired to start to start stock twits. I called
Speaker 1: Fred Wilson. I said, Fred, what do you think? He goes,
Speaker 1: this is genius, but I can't invest because I first
Speaker 1: see this is where Fred's genius comes in. He could
Speaker 1: see the future and say, you know, I'm gonna be
Speaker 1: in a board meeting a Twitter and they're gonna be like,
Speaker 1: you know, I just don't wanna I foresee a prom
Speaker 1: So he passed. But also it was very bullish on
Speaker 1: the idea. Twitter didn't think it was interesting. So we started,
Speaker 1: you know, using a couple hundred thousand people, right, it's
Speaker 1: a lot of half a million people, a hundred thousand
Speaker 1: regular lunatics. Every month, I've been doing the digging, like really,
Speaker 1: our training tickers really means something because of our messages
Speaker 1: today are on just stock twits. They don't see the
Speaker 1: light of day. On Twitter. Sixty one percent of our
Speaker 1: messages on a daily basis now have the cash text.
Speaker 1: So there's really a lot of intent on stock twits.
Speaker 1: You know, May you may not like day trading, but
Speaker 1: the traders are the market makers. They are the ones
Speaker 1: that talk about what's important. So our job is to
Speaker 1: surface that stuff. But let's get to some questions on
Speaker 1: stuff that we um we missed earlier. Um, I'm gonna
Speaker 1: throw some stuff out you and I feel free to
Speaker 1: go as longer as short as you want on any
Speaker 1: of these. So we briefly touched on this, but we
Speaker 1: didn't spend a lot of time on it. What are
Speaker 1: some of the similarities and differences between startup investing and
Speaker 1: buying regular stocks? Yeah, one of my favorite subjects. So
Speaker 1: started a complete opposite the way I look at it.
Speaker 1: You know, I think I've dropped earlier that if if
Speaker 1: I'm looking at stock I assume my paper is the
Speaker 1: worst paper in the world, I wipe my butt with it.
Speaker 1: I don't want the paper out of one, I don't
Speaker 1: want the searchs. I just assume everything's corrupt. So when
Speaker 1: I buy a stock, I think the world's were against me.
Speaker 1: First of all, I don't care about the information that
Speaker 1: I'm getting. I have a catalyst in mind. I look
Speaker 1: at price and volume characteristics of stocks. I like to
Speaker 1: buy stocks that are at or near all time highs
Speaker 1: or five year highs, which means that frowned upon the
Speaker 1: word momentumus, which means that, which means when we're in
Speaker 1: a correction or sessions and you're just anything well, and
Speaker 1: I get hurt at the end of a run, and
Speaker 1: I take my lumps at the end of a run,
Speaker 1: but you're missing that whole down down, I hope if
Speaker 1: I'm doing my job right, I'm missing the whole most
Speaker 1: of it, anything and and and in markets like this,
Speaker 1: it's been difficult because last February I got stopped out
Speaker 1: of a lot of things you had pullback in last year,
Speaker 1: and I haven't really found a good my portfolio. I
Speaker 1: haven't found you know, I've had occasional winds, but it's
Speaker 1: been choppy and whatever. So you want a trending market,
Speaker 1: not a range bound sadways, yeah, two steps forward, one
Speaker 1: step back, everybody gets panicking. I mean, cash is not
Speaker 1: a dirty word to me. My investors have known me
Speaker 1: a long time, and I'm patient and I'm busy, So like,
Speaker 1: I like easy markets, and I don't think we're in
Speaker 1: an easy market no longer and easy an easy market
Speaker 1: for bond people because it's been trending for twenty years,
Speaker 1: but they're not a bond guy. So I've missed that.
Speaker 1: I definitely have missed biotech. I mean, I don't understand
Speaker 1: the catalysts, and I don't understand the valuations, and I
Speaker 1: don't use the products, and I'm too old, so I mean,
Speaker 1: you can only be an expertise in a few things.
Speaker 1: So for stocks, I like to keep it simple. I
Speaker 1: like to understand the catalyst. For me, Nike has been
Speaker 1: a huge winner. Uh for me, Apple and Google have
Speaker 1: been huge winners. There's been deep corrections along the way,
Speaker 1: but I've stuck with them in one um. In the
Speaker 1: private market is completely different. Private market, all I care about,
Speaker 1: rightly or wrongly, as the team and the management and
Speaker 1: the valuation, even the evaluation I said earlier, sometimes it's
Speaker 1: important to me it matters because I can't get out.
Speaker 1: I mean, I'm gonna be in this. It's a combination
Speaker 1: of both. But in the public markets, I want to pay.
Speaker 1: I want the most liquid securities, right, I want to
Speaker 1: see in And that matters to me. I don't care
Speaker 1: about the valuation. I care about can I get out?
Speaker 1: And the private markets I care. I know I can't
Speaker 1: get out. So what matters to me is is this
Speaker 1: management team wanted to get hit in the head for
Speaker 1: six or seven years, because that's what it takes. You know,
Speaker 1: now that I've been doing this for six years to
Speaker 1: Mogil an example, being like, I don't know about twenty
Speaker 1: I don't know if I want to be in companies
Speaker 1: that take twenty years. No, No, you you've been doing this, yeah,
Speaker 1: but I mean I've been in deals now and I
Speaker 1: have It's like investing in horses, are investing in seeds, right,
Speaker 1: you have to continually invest in crops to make money, right,
Speaker 1: because it's gonna be wipeouts. There's gonna be a year
Speaker 1: of a group of bad investors, are going to be
Speaker 1: a group where everybody got the technology wrong, and you know,
Speaker 1: so you have to continually place bets. And that's different
Speaker 1: building the ladder, building an angel investing ladder, I call
Speaker 1: it a ladder, or I call it crops. You know,
Speaker 1: you can't be biased. Right, when my investors give me money,
Speaker 1: it should be for three or four funds. It shouldn't
Speaker 1: be for one fund because then they're cherry picking. And yeah,
Speaker 1: they're cherry picking. And technology changes, so you know, the
Speaker 1: social wave of his past, what's the new wave? You know,
Speaker 1: I'm not so much doing hardware a wearables um, but
Speaker 1: I'm more focused on fintech, okay, and I'm learning quickly
Speaker 1: that I've evolved from social to fintech and even and
Speaker 1: social right now. But it's a much small or niche,
Speaker 1: you know. It's you're not going to get billion dollar
Speaker 1: companies and niches, so you have to accordingly adjust your
Speaker 1: expectations and evaluations and all that stuff according to the
Speaker 1: niche that you're in. But I think we're in an
Speaker 1: era of the mega niche where mega nie. Yeah, we're
Speaker 1: in China, we chat dominates, Twitter doesn't dominate, or Facebook
Speaker 1: doesn't dominate, and the rest of the world Facebook dominates,
Speaker 1: Twitter dominates in certain other areas, LinkedIn dominates. But now
Speaker 1: we get into the air where with all those networks proliferating,
Speaker 1: now you've got to focus on drilling deep. Let's talk
Speaker 1: about linked In a second, Yeah, they're I think they're
Speaker 1: the best of the of the business networks because I
Speaker 1: I find that LinkedIn for me personally. Now, obviously you're
Speaker 1: not hiring, well, we have hired from LinkedIn. The problem
Speaker 1: is the other eleven months when we're not putting out
Speaker 1: a request for we need a new setifically, the other
Speaker 1: eleven months people are just bearing me with resumes that
Speaker 1: I have no interest in. Hi, can can you be
Speaker 1: in my network? Now? That person who doesn't listen to
Speaker 1: you and say you're not if when you're not using
Speaker 1: a network and people are still hitting you over the head,
Speaker 1: they're not using the network properly, so they're probably not.
Speaker 1: Isn't that endemic to LinkedIn and many other networks? It's not,
Speaker 1: but that's the mistake that people make. They make fun
Speaker 1: of LinkedIn because of that, but they're not understanding that. Really,
Speaker 1: it's really uh the other way scenario. The companies that
Speaker 1: are hiring are using it like crazy. Can I tell
Speaker 1: you something? So you have every time we've made a
Speaker 1: major higher all of our hires have come from Lincoln
Speaker 1: And if you're a growth company, that's what you live on. Yeah, No,
Speaker 1: it's terrific. The problem is. So. The nice thing is
Speaker 1: when you say don't know how to use social, some
Speaker 1: people will walk up to you on the street and
Speaker 1: like immediately a costume. Do they know Social? They're idiots.
Speaker 1: So there's idiots out there, like people know how to
Speaker 1: use the tools you mentioned as far ago. Ye, they're
Speaker 1: m when they could have just called me, well, they
Speaker 1: can't DM me, you're not following, damn me. But they're
Speaker 1: now publicly embarrassing themselves. Every want to with every now
Speaker 1: and again, I will be so I take the same
Speaker 1: train ride back and forth to work every day, and
Speaker 1: I'm my little Verizon modem which I plug into my laptop,
Speaker 1: which is fantastic because I get basically, i could leave
Speaker 1: an hour early because I'm working on the train, I
Speaker 1: mean on the way home, on the way in if
Speaker 1: I want to come in later. I'm at work at
Speaker 1: wherever I am with the laptop, and every there's a
Speaker 1: couple of dead spots. You would think in New York City,
Speaker 1: perhaps not Manhattan proper, but within the border of New
Speaker 1: York City, my data service should be flawless. I know
Speaker 1: we're not Singapore or other countries that have a good infrastructure,
Speaker 1: but so every now and then I just get so
Speaker 1: frustrated and I'll tweet about how angry I'm about how
Speaker 1: terrible VERI Verizon Wireless is. The last time I did it,
Speaker 1: a T and T Wireless comes at me. If so,
Speaker 1: I turned to I responded back to them, I go, no, no,
Speaker 1: I'm with Verizon Wireless because you guys are so awful.
Speaker 1: I went to that they're the tallest midget in the room.
Speaker 1: They're the best, but only because the rest of you
Speaker 1: are so Often if these companies new And by the way,
Speaker 1: I haven't made a lot of money in my private
Speaker 1: investing along customer support. So one of my other well
Speaker 1: my other thing was customer support. When social came along,
Speaker 1: I thought Twitter would be a great customer serce. So
Speaker 1: we invested in Buddy Media, which got bought by a
Speaker 1: Salesforce eight d s. Salesforce is an unbelievable company. Unbelievable company.
Speaker 1: Some people hate the product. But I'm using relate i Q,
Speaker 1: which is the dumb down version that they just played
Speaker 1: quarterbillion for. It's a great product. Um that changed my life.
Speaker 1: Semantic act in the eighties change remember that. So I
Speaker 1: am big believer in contact management and Benny Off running
Speaker 1: the table. Uh's he's pretty much. This is who Mark
Speaker 1: Beneof has been on how to choose the table sales
Speaker 1: t is Salesforce found sales. So luckily for me, they
Speaker 1: bought four companies of of mine over the years because
Speaker 1: I believe in customer support as they've got a billion
Speaker 1: dollars on companies that I was an angel investor, and
Speaker 1: so I'm very grateful to them. But the media assistly
Speaker 1: go instant. They've invested in in Bedley, on and on
Speaker 1: and on, great great vision. For whatever they can't build,
Speaker 1: they buy um, which a smart way. Here's what corporate
Speaker 1: America doesn't know. They don't know how to use these tools, right.
Speaker 1: Why are they not using the They use the tweets
Speaker 1: when they should be using the phone. They use the
Speaker 1: phone when they should be using the tweets. They're there's
Speaker 1: you know what I mean. They don't have instinct. So
Speaker 1: so I don't want to talk to Verizon or my airline.
Speaker 1: I want to vent on Twitter. Doesn't mean they shouldn't
Speaker 1: interrupt my vent. They should listen. And by the way,
Speaker 1: if they really want to do something, if you really
Speaker 1: have a voice, don't talk to me, send me ten
Speaker 1: bucks in a coupon because I'm a good customer, or
Speaker 1: or asking why you unhappy? Never asked me why if
Speaker 1: I'm kid? How about fix what's not? I can't, of
Speaker 1: course they can. They don't want to. You're on the train,
Speaker 1: You're respected to be done by the time I get
Speaker 1: into the understand. All they could say is Verizon is
Speaker 1: a good example. Hey, if I'm complaining about this, put
Speaker 1: some guy in a train, follow that and see where
Speaker 1: the weak spots are and throw another damn tower. Okay,
Speaker 1: but they can that, Hey, we heard you. But they
Speaker 1: can also win a d M or or at messaging. Barry,
Speaker 1: I see you know. They know that you have a
Speaker 1: lot of followers, They know you have a lot of influence.
Speaker 1: They could easily buy a service that would allow that
Speaker 1: and send you ten bucks for your aggravation. I don't want.
Speaker 1: I want the product to work the way it works
Speaker 1: in Singapore, in London, in Berlin, you go anywhere outside
Speaker 1: of the United States, the internet is faster and chief
Speaker 1: the cell phone services. I think you should move. I
Speaker 1: like Berlin. I enjoy every time I go to Berlin.
Speaker 1: I have a great time. But probably probably the hippest,
Speaker 1: hottest city in Europe right and has been for some time.
Speaker 1: It's also the cheapest of all the European cities outside
Speaker 1: of Greece. So um, But that's not the issue. The
Speaker 1: issue is you try a lot of America. What isn't
Speaker 1: the stats something like one in four Americans have a
Speaker 1: passport you travel abroad, And even though in many ways
Speaker 1: we live in a great country, we've allowed a lot
Speaker 1: of other people, a lot of other countries to pass us.
Speaker 1: We're the forrest country that had this spectacular national highway
Speaker 1: system which is now falling into disrepair, and everybody else
Speaker 1: leapt fraud us because they started twenty thirty years after us.
Speaker 1: Everything we have is on a relative basis. Are two
Speaker 1: flaws are uh not keeping our infrastructure up to speed? Tremendous? Okay,
Speaker 1: so that's number one money wasted on that. We're not
Speaker 1: helping the poor hare we're helping everybody else. The second
Speaker 1: thing is education we're taking I look at my kids
Speaker 1: and in their special kids in my opinion, but they're
Speaker 1: all thrown in the same funnel to the wider the
Speaker 1: funnel at the tops getting wider in and the testing
Speaker 1: gets weirder, meaning more kids are different. Kids have Google today,
Speaker 1: the testing does well because kids have Google today. To
Speaker 1: have any test in an era of Google that's the
Speaker 1: same as twenty years ago is ridiculous. Right, My kid
Speaker 1: shouldn't be punished for understanding how to use Google. It
Speaker 1: just changed education and they have It's going to be
Speaker 1: a decade long understand. But you're asking what the really
Speaker 1: big issue? And then the third one is banded with
Speaker 1: I don't understand how country this great can't have the
Speaker 1: best band with elsewhere. Canswer it true that calls itself
Speaker 1: democratic and free to be trailering and anything Internet. Well,
Speaker 1: the answer is when you go to Singapore, you go
Speaker 1: to Hong Kong, the rule is, oh, you want to
Speaker 1: be an Internet provider. These are the minimum require absolutely,
Speaker 1: and we look at that as a nanny state in
Speaker 1: the United States. But it's like certain, why right, Sorry, hey, listen,
Speaker 1: You're free to do whatever you want as long as
Speaker 1: it's one gigabyte up and down, anything that get to it.
Speaker 1: Anything less than that, we're not interested. Here's the floor. Now,
Speaker 1: everybody compete with this floor. Were not that complicated. We're
Speaker 1: on the same page here. If you give people the tools,
Speaker 1: the smart people will use them, and the country will
Speaker 1: explode the peloton situation. Everybody will nothing wrong. I mean,
Speaker 1: you know, you gotta watch out for the blood doping,
Speaker 1: and you gotta watch out for the tricks, and you
Speaker 1: gotta watch up for the criminals, the outliers, and you
Speaker 1: punish the outliers. You don't, you know, we live in
Speaker 1: a country where we're not punishing the outliers and we're
Speaker 1: not encouraging the peloton. So let's you know, and I
Speaker 1: and I and I and I relate everything to sports
Speaker 1: because it's pure right. Other than the blood doping. Peloton
Speaker 1: has been the same since the race started. You the
Speaker 1: great riders figure out when strategically to break free. But
Speaker 1: the peloton is the pelotoni United States, our peloton of
Speaker 1: internet system is behind. Everybody else's behind the keep up,
Speaker 1: no excuse for that and the money wasted on Why
Speaker 1: is there not a San Francisco l a train, a
Speaker 1: bullet train. There is no excuse period. Why can't I
Speaker 1: get there's no so since mentioned blood doping, let's let's
Speaker 1: talk a little bit about the Federal Reserve because um,
Speaker 1: you you had not a great subject of mind because
Speaker 1: I don't really understand. But well, but here's the question.
Speaker 1: So you mentioned earlier rates are at zero. You know
Speaker 1: ZERP quantitative easing, the FED has tilted the playing field.
Speaker 1: Let's bring it back to the area of your expertise.
Speaker 1: With money effectively at no cost, what does that do
Speaker 1: to start up investing? What does that do to start ups?
Speaker 1: And how does that change the entire venture market. I
Speaker 1: think I can talk to that well. I'll talk to
Speaker 1: first about the markets and my experience lately with the markets.
Speaker 1: I think that's so good, that too good, But you're
Speaker 1: not getting a bubble this time. You're getting You're getting
Speaker 1: really weird behavior because everybody knows it's overvalued, so the
Speaker 1: game is being played to not be a ninety No,
Speaker 1: I don't know if everybody knows it's overvalue. The smart
Speaker 1: money is like very fidgety myself, but that's what I'm saying.
Speaker 1: It makes it very hard even in a glow interest
Speaker 1: rate environment. What I'm saying is the market should just
Speaker 1: be relentless. And although it looks relentless on the SMP,
Speaker 1: there's been massive rotation because everybody fidgetty trying to find
Speaker 1: cheap things because it's so crazy out there. So we've
Speaker 1: avoided the bubble. Because everybody's pulling money out of things
Speaker 1: as soon as they feel like a bubble into the
Speaker 1: non bubble idea. So guys who have been in the
Speaker 1: market for forty year and fifty years, guys like Jeff
Speaker 1: s Out and Laslow Burrini, and they've all said that
Speaker 1: this reminds them very much of the early nine eighties,
Speaker 1: where you had just come off of a sixteen year
Speaker 1: bear market. The negativity could be cut with a knife.
Speaker 1: People's muscle memory was, hey, every time there was a
Speaker 1: pullback and I bought it, it was a rally and
Speaker 1: I got killed. So this is this is just like
Speaker 1: we're going back to the crash. But they said it
Speaker 1: took a full five six seven years after the bear
Speaker 1: market ended for people to wrap the head around that, hey,
Speaker 1: this is a different secular market. Even the eight seven crash,
Speaker 1: we still finished the europe one and everybody used the
Speaker 1: eighty seven. Let me rephrase that. The people who were
Speaker 1: unwilling to accept that the bear market, oh it was over,
Speaker 1: use the eighty seven crash as a c I told you,
Speaker 1: But again they missed. They avoided the drop, but missed
Speaker 1: move up. I try not to think I let the
Speaker 1: market get me into positions. The private market is interesting
Speaker 1: because companies that I was investing in an oh ay
Speaker 1: to two million valuation, those same founders and companies are
Speaker 1: getting ten to twelve million dollar valuations to start, and
Speaker 1: so the math really starts hurting. You know that two
Speaker 1: to twelve You know that's different than the market being up.
Speaker 1: So so I think that's what makes me nervous. You know,
Speaker 1: when you're investing in a company that everything can go
Speaker 1: wrong at a start up phase, right, you know, two million,
Speaker 1: I'm sure it might have sounded cheap, but it's still
Speaker 1: like for a company that don't have anything going on,
Speaker 1: Like I'm still in my head the old guy in
Speaker 1: the industry where I'm complaining that I can't pay ten
Speaker 1: million valuation for three kids in a room. But earlier
Speaker 1: you were saying valuation is your least important thing. It's
Speaker 1: it's just it's it's just something that I've never gotten
Speaker 1: comfortable with. That's why Fred Wilson is the best, and
Speaker 1: I'm just so he's willing to take a chance ignore
Speaker 1: the value he thinks, like I did with Robin Hood
Speaker 1: in certain companies. I'm starting to get more comfortable and
Speaker 1: become a better investor, because if price is the only
Speaker 1: reason you do not want to do a private investment,
Speaker 1: you should do that in the public markets. Know, if
Speaker 1: price is the only reason to not do something, it's
Speaker 1: also a mistake because you can get liquidity the next day,
Speaker 1: so price drives every next day. But that we're talking
Speaker 1: quarters and years, not hours and days. Sure, absolutely, but
Speaker 1: that's a trade. Not if you don't want to buy
Speaker 1: Google because you think it's pricey, and and your answer is,
Speaker 1: but you can sell it tomorrow. Most most people these
Speaker 1: days is aren't looking at day trade Google. They're looking
Speaker 1: to buy a tech company. Look at Apple as a
Speaker 1: perfect example. You know, it was seven and change. It's split,
Speaker 1: it's a huge split, and here we are we're now
Speaker 1: over that prior pre split high. But when you spoke
Speaker 1: to people at Apple at six fifty Apple, oh that's crazy. Yeah,
Speaker 1: I mean, I just I'll use it more at the
Speaker 1: private market. What if price is the absolute reason you're
Speaker 1: passing on an investment and you really feel good about
Speaker 1: every other aspect team market everything, will hold your nose
Speaker 1: and it and own it. Okay, Um, that's a very
Speaker 1: hard hurdle for the average, even good investor. That I
Speaker 1: was at the beginning to get over. I have definitely
Speaker 1: learned to live with that. In this disk Us evaluation,
Speaker 1: Twitter and Zingle two giant home runs, I know, but
Speaker 1: his Zingle was twenty million valuation when a poker room
Speaker 1: at the time. What Zingle worth today, I don't know,
Speaker 1: but I mean it definitely was a mistake on Twitter.
Speaker 1: We know Twitter as a multibillion dollar times but you
Speaker 1: learn it's not like I'm perfect. I mean, like I said,
Speaker 1: you know on my if you go to my blog
Speaker 1: or if you go to my our website at social leverage,
Speaker 1: I'm proud of those misses. What am I doing there?
Speaker 1: At least I was in the batter's box. The biggest
Speaker 1: crime is for my investors is not to see those deals.
Speaker 1: So if they pay me the two and a half
Speaker 1: and twenty, which they do and half and half, and
Speaker 1: that's standard in it's in the in the industry. I mean,
Speaker 1: the middle of our third fund raising and you know
Speaker 1: we're we're raising capital, but I mean that is standard, right,
Speaker 1: there's certain standards. It's richer than funds fee structure. Yeah,
Speaker 1: I mean because two point five yeah, and it's like
Speaker 1: that those are ten years of these things that standard.
Speaker 1: I mean, listen, if you're if you're gonna write me
Speaker 1: a check for ten million, you're probably going to negotiate fees.
Speaker 1: I've never had that happened negotiation, but it can happen.
Speaker 1: So those are you listening? If you got ten million
Speaker 1: for Howard, you could cut a deal. Yes, the sounds
Speaker 1: good to me. The Jerry picks up the difference, the
Speaker 1: it's good to be the GP Is that what you today? No?
Speaker 1: But this this the thing about this style of investing
Speaker 1: is the Twitter. I'm embarrassed about in hindsight Twitter and
Speaker 1: think it looked like unbelievable gaffs. And you could laugh
Speaker 1: at me for that, but it would be worse to
Speaker 1: not be seeing the deals. My job is to get
Speaker 1: into the flow. You got good deal flow, but you
Speaker 1: looked at these valuations and said a little rich for me.
Speaker 1: Well and I and I looked at the products and
Speaker 1: I wasn't using the products. The other thing is I
Speaker 1: got to use the products Twitter. At the time I
Speaker 1: was laughing at we were on our blackberries. Remember two
Speaker 1: thousand seven blackberries market crash, twenty million valuation in an
Speaker 1: era of two million valuations. By the way, you could
Speaker 1: have bought Apple and Google and tripled your money. Whatever
Speaker 1: not not. Twitter obviously returns because it was a mistake.
Speaker 1: But I'm really proud because by being in the market,
Speaker 1: I caught an Uber at four million valuations. So you
Speaker 1: have to be in the market, meaning I'm gonna make mistakes.
Speaker 1: I didn't know. I didn't know that outside return, Twitter
Speaker 1: was the nil brain or Uber was the hardest thing.
Speaker 1: That's fascinating to me. Tell me why, because when Uber
Speaker 1: first came around, it's like, wait, and he used my
Speaker 1: phone to call a cab. I walked down to the street.
Speaker 1: I waved my hand. There's a cab. Tell me what
Speaker 1: made you think the magic of it? I live in
Speaker 1: Coronado and I could just push a button and the
Speaker 1: car would come over the It wasn't it was fifteen minutes,
Speaker 1: five years ago a cab. Don't trust the cab. I mean,
Speaker 1: I don't trust the system. You know, the medallion system
Speaker 1: was broken. It deserves disrupted. Weren't investing in their infrastructure. Okay, no,
Speaker 1: this is the problem I have with the Listen, it's
Speaker 1: not fair. Let's talk about it right up front. It's
Speaker 1: not fair. It's not fair. They're breaking some rules and
Speaker 1: Uber is not fair, and well, I'm just saying they
Speaker 1: don't have their licenses and they've they've been creative. Let's say,
Speaker 1: and I say this offer a more creative Let's just
Speaker 1: think how broken the medallion system is. One dude making
Speaker 1: all the money or one woman making all the money
Speaker 1: at the top. They're not investing in technology. The drivers
Speaker 1: are unhappy, the customers are unhappy. Everything's broken. There's no
Speaker 1: trust in the system. It was due to be disrupted
Speaker 1: in hindset. Okay, so what and then we're looking at Zinga.
Speaker 1: I'm going on, I don't play mobile games. Uh, twenty
Speaker 1: millions crazy, the markets crashing, and so as a non
Speaker 1: user of the product, ever still not to this day.
Speaker 1: You know, it was such a leap of faith. But
Speaker 1: market played angry Birds or anything like that. But Mark
Speaker 1: Pinkas was the outlier. Actually just invested in him because
Speaker 1: he was going to do anything, gonna be a billion.
Speaker 1: He wanted to do anything to be ability. So back
Speaker 1: to Uber and so the people you look at this
Speaker 1: and say, here's an entire infrastructure right to be disrupted.
Speaker 1: We've seen four million valuation, I mean and New York
Speaker 1: City taxis the medallions have dropped value just as a
Speaker 1: reflection of how broken and if the city was going
Speaker 1: to do its job, whoever is a mayor would step
Speaker 1: in and say, listen, we're going to train people on Uber.
Speaker 1: We're going to train people how to use their iPhones,
Speaker 1: and we're going to give people. You don't have to
Speaker 1: train people to use it, That's what I'm saying. Like,
Speaker 1: so that's why they And you know, I'll tell you
Speaker 1: a funny Uber story. So last week, we're in Seattle
Speaker 1: and I'll spay you. What's that. That's in the US,
Speaker 1: not too far from Vancouver, And I'm on the Microsoft campus, which,
Speaker 1: by the way, you know i'm Microsoft. You know, I'm
Speaker 1: an Apple guy, was never a giant Microsoft fan. It
Speaker 1: is astonishing. The campus is I'm insane. Number it goes
Speaker 1: as far as the I can see. You can get
Speaker 1: in a car and keep driving. So we we call
Speaker 1: an uber to get back into into Seattle proper. The
Speaker 1: place is so big and the way the maps work
Speaker 1: because it's not like roads. So we had a haunt
Speaker 1: a make a left. I'm on the phone with one phone,
Speaker 1: looking at the Uber with the other phone. All right,
Speaker 1: look make a left. It took us fifty minutes for
Speaker 1: the guy to find New York, Seattle, London. Uber doesn't
Speaker 1: work perfectly because subtleties to the road. I've never had
Speaker 1: issues in Manhattan having had a driver didn't know the shortcuts.
Speaker 1: So one other, one other personal story. So we have
Speaker 1: a client who happens to be the guy who turns
Speaker 1: Google Maps into Google Map app. That's a client of us.
Speaker 1: So one day someone's going to meet the office and
Speaker 1: meeting us and they're late, and I was like, how
Speaker 1: are you late? Well, google Maps sent me to not
Speaker 1: too so our addresses a Park Avenue South address. I'm sorry,
Speaker 1: our addresses park having you proper and it sent them
Speaker 1: to Park Avenue South, and so where are you? I'm
Speaker 1: down now, we're all the way. We're by Grand Central.
Speaker 1: Well google Maps sent me to Park Avenue South, not
Speaker 1: Park Avenue. I sorry, I'll take care of it. They
Speaker 1: thought I was joking and send send an email a client. Hey,
Speaker 1: here's the issue with Google Maps. Here's the fix. Oh no,
Speaker 1: it was by the time the person got to office.
Speaker 1: I go search for Google Maps, search for address. He's like,
Speaker 1: how did you do that? I go, which is really
Speaker 1: a hilarious. So the key is flow my customers or
Speaker 1: my partners. Uh, the way I do them wrong is
Speaker 1: to be out of every deal. Just so batter's boxing.
Speaker 1: You've got to be swinging. I'm not happy I made.
Speaker 1: Here's what a mistake I made was Zinga. I passed
Speaker 1: on a great founder. The stake I made in Twitter was, uh, well,
Speaker 1: this price was my only reason for not doing it.
Speaker 1: It was I was using it and I didn't get
Speaker 1: the valuation. Although you're still not happy with the product,
Speaker 1: and you're not happy with the phenomenal, you're not happy
Speaker 1: with the business around the product. Well, I'm just you know,
Speaker 1: they've created all these pressures the market. The public markets
Speaker 1: are all about pressure. You can delay ratification, you can
Speaker 1: push off evaluation. Amazon's done that successful. Twitter hasn't done
Speaker 1: a good job of talking to the street and explaining
Speaker 1: their vision, let's face it. But at the same time,
Speaker 1: it's an incredible product. It's an incredible company to build
Speaker 1: so fast. But they're obviously having trouble living within the
Speaker 1: market cap that they've been given. They have to figure
Speaker 1: out how to monitor, they need to figure out how
Speaker 1: to communicate the vision. Yet, yeah, and so, so you
Speaker 1: and I can talk about it is the core product.
Speaker 1: I think it's the greatest product ever created for guys.
Speaker 1: Can I tell you I was never a very active booker.
Speaker 1: It was always like, I don't care about the pictures
Speaker 1: of your kids. I don't care about your vaca. It's
Speaker 1: like everybody's the minutia of everybody's life without the wit
Speaker 1: and charm of Seinfeld. That's that's so. And then it's
Speaker 1: the same LinkedIn thing. You start to friend everybody and
Speaker 1: the next thing you know, it's it's it's completely worthless. Twitter.
Speaker 1: On the other hands, what I love about Twitter is
Speaker 1: I get to say I'm going to effectively higher the
Speaker 1: smartest people I know to be my research to point.
Speaker 1: That's exactly it. It's completely complete expert network. And but
Speaker 1: it's not free in the sense that it's just magically
Speaker 1: going to work for you. It's free, you have to invest.
Speaker 1: The investment is time, not money, and that's and curation
Speaker 1: and get what you put it in stock Twitch, which
Speaker 1: we created, was just a pew Alton for finance and
Speaker 1: a peloton of traders and investors define peloton for research
Speaker 1: for listeners who may not be bike racing fans. Well,
Speaker 1: I mean, if we watch the Tour de France, which
Speaker 1: bores most people. It's because it is a peloton most
Speaker 1: of the time. That's just a beautiful looks like a bumblebee,
Speaker 1: looks like a hive of bees, a group of people,
Speaker 1: which is really hard to stay in if you're that's
Speaker 1: the That's why people love it is because it is
Speaker 1: beautiful to see two people who so close together riding
Speaker 1: at forty. There is an art to that, but there
Speaker 1: art too. Winning the race is deciding when you're going
Speaker 1: to break free. When when you linked, I mean, Twitter
Speaker 1: is the greatest mental and and educational and mind expanding peloton.
Speaker 1: You're hanging out with the smartest people in the world
Speaker 1: just flipping the news or and it is your job
Speaker 1: to curate. That's a that's a that's an overwhelming to
Speaker 1: most people. Lazy people's Oh, I want this to magically work.
Speaker 1: We're in a world of Netflix, and this is where
Speaker 1: Twitter could really do something interesting. I could start a
Speaker 1: business tomorrow called Twitter, and I could put five people
Speaker 1: in the room and start shipping and and have you
Speaker 1: called me to tell you how to use Twitter. Twitter
Speaker 1: should have had a much bigger support test to help
Speaker 1: people get to the peloton stage. Faster. Hey I'm interested
Speaker 1: in beer. Okay, I'll send you a list in ten
Speaker 1: minutes of the five people that will give you the
Speaker 1: best links and the best brains on beer. And how
Speaker 1: is that for Twitter to set up a dozen verticals
Speaker 1: and say if if you're an entrepreneur, you should do
Speaker 1: it like I've often thought of starting a Twitter helped deak,
Speaker 1: So just play it with that. You take the daily
Speaker 1: sections of the New York Times, so it's it's it's
Speaker 1: business and investing, it's sports, its metropolitan, it's food, it's theater,
Speaker 1: it's film, it's going down the list, sports and dining,
Speaker 1: and travel and hauntamobiles. Those are your verticals. You come
Speaker 1: up with variations of each of those verticals and say, hey,
Speaker 1: you follow this, here click this, and here are those
Speaker 1: you're following the hundred people in the space who cover this.
Speaker 1: We invested. I invested with Mark Cuban in a company
Speaker 1: called Get Little Bird that does that. So it's just
Speaker 1: a matter of when we execute on this. But Mercia Kirkpatrick,
Speaker 1: it's called get Little Bird dot Com and it's you know,
Speaker 1: people are solving these problems, just not Twitter. Sawing. Now
Speaker 1: with Twitter buys these companies that will be interesting. But
Speaker 1: this is this is what people don't understand about a
Speaker 1: Twitter is it's got so much potential. And that's what's
Speaker 1: exciting about stock twitch at the same level. Why why
Speaker 1: we're so excited about stock twits, the same thing for finance.
Speaker 1: So we're gonna I'm gonna interrupt you here because you
Speaker 1: and I have been talking now for ninety minutes. We
Speaker 1: could go for another two hours. I know you have
Speaker 1: places to go and things to do, so I'm gonna
Speaker 1: wrap this up. Howard. I really appreciate you coming in
Speaker 1: and speaking with us for for so long. I hope
Speaker 1: listeners can parse um son of the subtleties in our
Speaker 1: conversation and actually pull something out. I've been listening, You've
Speaker 1: been listening. I've been speaking with You've been listening to
Speaker 1: Howard Lindzen of Social Leverage, stock Twits, and a variety
Speaker 1: of other companies. He's an angel investor and venture capitalist.
Speaker 1: Be sure and check out our previous UM previous podcasts.
Speaker 1: If you're listening to this, you probably know where our
Speaker 1: podcasts are there on iTunes, in Bloomberg dot com. Uh my,
Speaker 1: follow me on Twitter. What is your Twitter handle at?
Speaker 1: Howard That's gonna be That's gonna be tough. Remember at
Speaker 1: Howard Lindzen. You can follow me at rid Holts or
Speaker 1: check out my daily column at Bloomberg View dot com.
Speaker 1: I'm Barry rid Holts. You've been listening to Masters in
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