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Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.

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Speaker 1: This week on the podcast, I have an extra special guest.

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Speaker 1: His name is Steve Murray and he has a storied

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Speaker 1: background in the world of venture investing. He is currently

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Speaker 1: a partner at Revolution Growth. He spent twenty years at

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Speaker 1: soft Bank working with a legendary list of companies, and

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Speaker 1: we very much get in the weeds about startup and

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Speaker 1: venture investing. If this is an area that is of

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Speaker 1: an interest to you as either a career or just

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Speaker 1: a passing fancy, if you're intrigued by technology, finance, startups, fintech,

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Speaker 1: UH sports technology, wearable technology, well then you're going to

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Speaker 1: find this conversation quite intriguing. So, with no further ado,

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Speaker 1: my conversation with Steve Murray, I'm Barry Ridholts. You're listening

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Speaker 1: to Masters in Business on Bloomberg Radio. My special guest

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Speaker 1: today is Steve Murray. He is a managing partner at

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Speaker 1: Revolution Growth of venture capital funds that specializes in technology, software, wearables,

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Speaker 1: and a number of other fascinating UH tech subjects. He

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Speaker 1: was a partner and managing director at SoftBank for twenty years,

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Speaker 1: working with such companies as Yahoo, e Trade, Geo Cities,

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Speaker 1: Ziff Davis, BuzzFeed, and many others. He is a current

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Speaker 1: board of director member at Fitbit, where he has served

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Speaker 1: since Steve Murray, Welcome to Bloomberg. Welcome. Thank you for

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Speaker 1: having me, Barry. I appreciate it. So let's start with

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Speaker 1: soft Bank, because you were there for twenty years, um,

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Speaker 1: both as a director and a partner for for a

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Speaker 1: large part of that. What did you do with SoftBank

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Speaker 1: A TOF bank or many years is a long time.

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Speaker 1: I can't imagine that I was there for that long,

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Speaker 1: but it was. It was a lot of fun, I

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Speaker 1: guess in summary, I got to sort of be on

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Speaker 1: the front row of the sidelines of the commercial development

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Speaker 1: of the Internet. So what I did, what I did

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Speaker 1: functionally as I started there, I started is really ramping up. Really,

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Speaker 1: the Internet was just starting, and soft Bank had just

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Speaker 1: acquired companies like Ziff Davis, Kingston Technologies, Comdex trade Shows,

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Speaker 1: and plus I trade Shows, and so there were seven

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Speaker 1: different operating units that had had been put together here

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Speaker 1: in the US and outside of Japan. There was a

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Speaker 1: grand total of four people that worked for soft Bank.

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Speaker 1: So I joined initially from an infrastructure perspective to really

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Speaker 1: put together all the information systems, the accounting, legal, tax

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Speaker 1: and other activities for the and and managing that reporting

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Speaker 1: into Japan and working with them on their strategies there.

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Speaker 1: That quickly, as the commercial development of the Internet sort

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Speaker 1: of moved along rapidly, the tasks that I were doing

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Speaker 1: really moved much more into the investing side of life,

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Speaker 1: which really starting in current out of early two thousands,

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Speaker 1: I spent most of my time on the investing side.

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Speaker 1: What what was the relationship between Yahoo and soft Bank

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Speaker 1: way back? Yeah, so that's a that's a one of

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Speaker 1: the great stories of lore, which is um uh soft

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Speaker 1: Bank made an investment in Yahoo and owned about a

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Speaker 1: third of Yahoo at the same time that they made

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Speaker 1: the investment in in Yahoo US. At the time, that

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Speaker 1: was a huge investment. I think it was about a

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Speaker 1: hundred million dollars and they bought a third of it. Right,

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Speaker 1: put things in context, right, it was a a pre

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Speaker 1: I p O investment where Masioshi Son and Jerry Yang

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Speaker 1: got together and decided that Massa wanted to be a

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Speaker 1: big partner here in the US of of Yahoo's but

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Speaker 1: also at the same time they created Yahoo Japan which

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Speaker 1: was a real partnership. Actually, I think it was a

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Speaker 1: sixty forty partnership or something like that between soft Bank

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Speaker 1: as the controlling and managing partner of that entity and

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Speaker 1: Yahoo US. They also created Yahoo Korea, Yahoo UK and

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Speaker 1: some other things, So there was really a global partnership

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Speaker 1: that was set up, and that really was on some

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Speaker 1: level the basis for a lot of soft Banks US

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Speaker 1: and other Internet activities. Really, you know, that's the flagship

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Speaker 1: investment early on in the soft Bank story on the Internet.

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Speaker 1: So it's funny to think of you as a venture

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Speaker 1: investor because your background is that of an accountant. And

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Speaker 1: and maybe it's my bias, but I think of accountants

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Speaker 1: as steady risk averse dotting eyes and crossing teas and

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Speaker 1: making sure double entry accounting adds up. How did you

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Speaker 1: transition from a staid profession of an accountant to something

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Speaker 1: that's got a touch of cowboy in it? Yeah, I'd

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Speaker 1: say a touch of cowboy might be an understatement someday,

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Speaker 1: but I guess it takes all types. Um and uh.

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Speaker 1: I actually really enjoyed my time at Deloitte and was

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Speaker 1: my background is. I was a c p A for

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Speaker 1: a while. I was in the accounting and auditing function

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Speaker 1: within UH within Deloitte for six years, So my first

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Speaker 1: six years of my career were there spent. I spent

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Speaker 1: an inordinately large amount of time on companies, and I

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Speaker 1: think why it translated to my soft bank activities, it's spent.

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Speaker 1: I spent a large amount of my time on companies

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Speaker 1: that were heavily transaction orientated, So companies like Prime Mark

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Speaker 1: that was buying a lot of data service companies at

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Speaker 1: the time, a company like Hardcore General at the time

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Speaker 1: that was buying Hardcore Brace, Jovanovitch and Neeman Marcus and

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Speaker 1: other things. So I was I was involved in the

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Speaker 1: assignments that I ended up being on were very transactional orientated,

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Speaker 1: a lot of acquisitions, and they were doing a lot

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Speaker 1: of activity. Accounting skills would come in very handy with that.

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Speaker 1: Accounting skills come in very handy. I do find that

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Speaker 1: my background of accounting skills is actually quite helpful with

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Speaker 1: the companies, particularly as they scale. As they say there's

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Speaker 1: there's uh, there's nothing like that ruins a good story

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Speaker 1: like facts, and accountants on some level have facts, which

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Speaker 1: is how are the companies doing versus their plan? How

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Speaker 1: much cash is left in the bank, Can we last

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Speaker 1: another year or five years? How would we be viewed

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Speaker 1: relative to comparable companies in the marketplace? So um, Although,

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Speaker 1: for sure, you know the venture capital market is a

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Speaker 1: lot of art project, not necessarily a pure science project.

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Speaker 1: I think having the background and accounting actually has been helpful.

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Speaker 1: So tell us a little bit about Revolution Growth. What

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Speaker 1: sort of companies do you invest in? And gives some

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Speaker 1: examples of of some of the companies you're working with currently. Sure. So,

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Speaker 1: Revolution Growth is a growth fund based out of Washington,

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Speaker 1: d c uh. It was started maybe ten years ago

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Speaker 1: by three folks that previously we're partners together at A

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Speaker 1: o L. So it was Steve Case, Ted leonss and

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Speaker 1: Don Davis started Revolution. That's the murderous row. There we go, right,

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Speaker 1: I have three more podcasts. I'm sure they'd be happy

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Speaker 1: to come. So the three of them started Revolution a

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Speaker 1: number of years ago really to do what at the time,

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Speaker 1: they were trying to figure out what was big and

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Speaker 1: what was next for them in their careers after they

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Speaker 1: left the A O L situation after that merger, and

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Speaker 1: they ultimately created a series of investment funds, one of

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Speaker 1: them being Revolution Growth. Revolution. Growth invests in companies that are,

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Speaker 1: as the name would suggest, at the growth stage, so

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Speaker 1: bigger companies, not smaller, but not generally not billion dollar companies.

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Speaker 1: Generally companies that have twenty thirty fifty hundred million dollars

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Speaker 1: of revenue. We generally invest twenty to fifty million dollars

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Speaker 1: in each opportunity. We usually have a pretty significant minority ownership,

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Speaker 1: so we don't We're not a private equity shop where

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Speaker 1: we take control of businesses. We are more like a

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Speaker 1: venture capital UH even on on some level structured like

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Speaker 1: an early stage venture capital from where we own five

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Speaker 1: percent of a business ten percent of a business, but

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Speaker 1: we get involved as the business is really starting to scale.

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Speaker 1: And so the types of businesses that we get involved

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Speaker 1: in generally our technology related businesses, but they can be

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Speaker 1: across a number of different verticals. Right, So we have

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Speaker 1: UH companies actually as diverse and versus some of the

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Speaker 1: folks that we work with as co investors um in

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Speaker 1: fast casual restaurants, So we're investors in Sweet Green, We're

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Speaker 1: investors in Cava that are both using technology to change

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Speaker 1: the supply chain and change the ordering patterns and change

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Speaker 1: the So that's a fast casual thing that we think

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Speaker 1: is really big. We're involved in UM fintech, so we've

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Speaker 1: recently made an investment in a company called Talo, which

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Speaker 1: is doing UH micro loans in in developing nations through

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Speaker 1: the use of information on people's cell phone. We're involved

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Speaker 1: in sports related technologies like draft Kings where I'm on

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Speaker 1: the board, sport Radar, which we're involved in. I'm sure

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Speaker 1: we'll get to that topic later. UH. We're involved in

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Speaker 1: UH data companies places like Uptake in Chicago, Tempest in Chicago,

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Speaker 1: Interactions in Boston. So those are the types of companies.

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Speaker 1: So they tend to be companies that, when we we

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Speaker 1: get involved in them, tend to have substantive revenue, but

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Speaker 1: not a billion dollars of revenue. We tend to put

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Speaker 1: twenty to fifty million dollars to work. In almost every instance.

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Speaker 1: We're on the board of these companies, and we serve

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Speaker 1: to try to, you know, help them out, get them

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Speaker 1: through their journey, and use the experiences and references and

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Speaker 1: networks that we have to try to make them and

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Speaker 1: make them successful. You referenced soft Bank earlier, and I

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Speaker 1: have to ask you they now have a venture funds

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Speaker 1: it's a hundred billion dollars. That's an insane amount of

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Speaker 1: money for something like that. Uh, what does this say

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Speaker 1: about what's going on in that space? And is this

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Speaker 1: part of what's driving valuations that at firms like uber

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Speaker 1: and we works through the roof? Well, clearly there's been

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Speaker 1: a lot of talk about SoftBank's vision fund UM. I

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Speaker 1: think it's actually it's really an amazing thing. And what

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Speaker 1: does it say about the market and what does it

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Speaker 1: say about where we are in the market and things?

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Speaker 1: I think if we take a half a step back,

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Speaker 1: what it says is certainly something like this was not

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Speaker 1: possible ten years ago as an example, So what's changed

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Speaker 1: that true? A decade ago you could not have had

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Speaker 1: a fund this side, don't I mean outside of the

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Speaker 1: financial I don't believe so just it wasn't the appetite

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Speaker 1: for it, or it wasn't the capital for it. I

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Speaker 1: think maybe a combination of both. But I think what

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Speaker 1: UM has come to more clarity for people, which makes

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Speaker 1: something like this possible, although it is an invent of

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Speaker 1: one so you can't make too many broad conclusions about it.

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Speaker 1: And it is sponsored by Massa, who is one of

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Speaker 1: the world's great dealmakers. So I'm not suggesting that there

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Speaker 1: will be multiple more hundred billion dollar funds, but I

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Speaker 1: think what it does suggest is that the world has

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Speaker 1: recognized the importance of tech aology and major industries and

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Speaker 1: therefore the ability to deploy big amounts of capital in those.

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Speaker 1: So things like industries like real estate, industries like healthcare,

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Speaker 1: financial systems and others are really now being fundamentally changed

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Speaker 1: by technology in a way that it's really just starting

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Speaker 1: to happen, although there's been a lot of talk about it,

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Speaker 1: you know, the industrial complex and the like, those things

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Speaker 1: are really now starting to change materially, and those give

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Speaker 1: real opportunities to deploy real amounts of capital. We say,

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Speaker 1: we see this with a bunch of different opportunities that

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Speaker 1: that's up Bank is deploying. So I think that they

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Speaker 1: are a hugely influencial investor in the marketplace. I don't

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Speaker 1: think a fund like this was possible ten years ago.

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Speaker 1: I'm not sure there's ten more of them that are

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Speaker 1: coming down the path, but I do think it speaks

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Speaker 1: to the importance of technology in major industries that maybe

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Speaker 1: previously had been a bit more immune to it. So

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Speaker 1: not too long ago, I had a conversation with Benic

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Speaker 1: Devans of Andrews and Horowitz, and his comment was, there

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Speaker 1: aren't um technology companies anymore. Everybody's a technology company. If

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Speaker 1: you're not using tech in in the most optimal or

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Speaker 1: most productive way, you're just going to be left behind.

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Speaker 1: I think that's a fair and accurate summary. I do

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Speaker 1: think there are obviously some and many companies that are

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Speaker 1: using it more effectively. There are industries that allow for

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Speaker 1: it to be used more effectively. The pace at which

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Speaker 1: some of these industries are going to be able to

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Speaker 1: adopt the technology is not at the same pace that

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Speaker 1: we've seen in some other industries. So as an example,

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Speaker 1: when you talk about health care and you talk about

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Speaker 1: you know, money supply, and you talk about things like

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Speaker 1: that that are heavy heavily regulated, the pace at which

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Speaker 1: some of these changes are going to be happening is

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Speaker 1: not gonna be like how long it took Facebook to

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Speaker 1: be published. For changes in there, it's going to take.

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Speaker 1: So let's talk a little bit about health I see

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Speaker 1: you're wearing the bigger what is that called the versa?

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Speaker 1: This is all the ionic Oh, the ionic, so that's

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Speaker 1: the big fit. But I'm wearing the charge to my wife.

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Speaker 1: I had the original one, which I had, truth be told,

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Speaker 1: I didn't love, but my wife. I got this from

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Speaker 1: my wife and she liked it so much that I

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Speaker 1: went out and got my own. You've been heavily involved

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Speaker 1: in wearables. Where is that sector going, especially since you

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Speaker 1: mentioned health? What might these things mean for a sedentary

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Speaker 1: overweight nation. It's I think the existing status of wearables

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Speaker 1: means a lot for a sedentary overweight nation, which is

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Speaker 1: that it provides basic information around things like how active

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Speaker 1: you are, what is your what's your pulse, how much

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Speaker 1: sleep have you gotten? Things that are very basic in theory.

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Speaker 1: But those pieces of information, when provided to people and

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Speaker 1: easy to use formats with easy to use devices, change

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Speaker 1: behavior for many many users. I could tell you from

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Speaker 1: pro and experience. When I had the original fitbit and

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Speaker 1: I was doing ten fifteen thousand steps a day, I

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Speaker 1: became a little obsessive with it, and then I I

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Speaker 1: had a couple of glitches with it, and I kind

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Speaker 1: of got bored with it, and I put it down,

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Speaker 1: and the phone is still tracking most of my travel.

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Speaker 1: And I noticed that those ten thousand a day without

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Speaker 1: something on your wrist just disappeared and it. Once I

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Speaker 1: got this back again, suddenly it's all right. My office

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Speaker 1: is down on four the street. We're on fifty eight street.

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Speaker 1: I don't need to take a subway. I could walk,

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Speaker 1: And besides, that's gonna add me two thousand steps. It

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Speaker 1: really makes a significant thing, it really does. The mindfulness

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Speaker 1: piece of it, which you're referring to, is really the

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Speaker 1: key piece of the first generation of these things, which

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Speaker 1: is really we're on maybe the first and a half

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Speaker 1: generation of these things. So we started out with really

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Speaker 1: basic trackers that did a pretty good job of tracking steps,

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Speaker 1: but they were really electronic pedometers, if you will, right,

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Speaker 1: And then they married that with really easy to use

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Speaker 1: mobile software which makes you able to look at a

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Speaker 1: little bit more. They've added sensors to things, and I

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Speaker 1: don't know if you use the other ones that do

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Speaker 1: things like your heart rate, you know, which is actually

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Speaker 1: for lots of people quite interesting, what's my what's very

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Speaker 1: pretty chill? What's your and and people sometimes say when

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Speaker 1: I'm working out, I should get to thirty or forty

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Speaker 1: beats a minute. Okay, how is that? You can drill

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Speaker 1: into that in your mobile app after your workout and

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Speaker 1: look at how that goes. The other feature that I

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Speaker 1: use a lot, and I don't know if you do,

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Speaker 1: but many users do, and it actually has really influenced

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Speaker 1: me is the sleep function my wife uses that I

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Speaker 1: like to take off anything from my winning band is

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Speaker 1: the only jewelry I have on it in your bed.

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Speaker 1: But that's just a function of getting used to it.

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Speaker 1: And I would so the sleep thing for me, as

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Speaker 1: somebody that travels every week and has a lot of

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Speaker 1: functions that I attend to and are in different cities

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Speaker 1: a lot I find, particularly as I'm not getting younger,

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Speaker 1: My my vibrancy, my health, everything seems to directly correlate

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Speaker 1: with the number of hours of sleep I get, it seems.

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Speaker 1: And so as an example, I was looking yesterday, was

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Speaker 1: talking to somebody about this. Yesterday evening. I looked at

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Speaker 1: my fitbit data on my phone yesterday as I was

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Speaker 1: traveling someplace, and I noticed that it has been over

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Speaker 1: a month since I've had more than seven hours of sleep.

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Speaker 1: I said, you know, something is not good there. I

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Speaker 1: gotta fix that, right. So there's a mindfulness piece of

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Speaker 1: it there. You've got to report at the end of

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Speaker 1: a week, says your average sleep has gone up or

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Speaker 1: down since last week, and so those basic things that

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Speaker 1: are being provided now materially change people's behavior. Where is

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Speaker 1: it going? I think is is the next step, and

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Speaker 1: I think of it is around health. So they'll be

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Speaker 1: just as they added functions around things like pulse and

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Speaker 1: things like sleep, they there will be things that will

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Speaker 1: add things around blood sure, perhaps blood sugar contact. You

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Speaker 1: could imagine a whole series of sensors that get added

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Speaker 1: into whether it's a risk device or something else that

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Speaker 1: feeds a central depositor depository like a mobile application. And

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Speaker 1: the real key will be when that can be integrated

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Speaker 1: into your health system. If you will your doctor, If

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Speaker 1: you imagine your doctor at some point getting your report

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Speaker 1: about what's going on with you, and and a check

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Speaker 1: engine light if you will goes off and says, hey, Barry,

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Speaker 1: you know, looks to me like your blood sugar levels

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Speaker 1: pretty low. You might want to get home and get something.

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Speaker 1: You might want to get get something to eat, or

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Speaker 1: eat an apple or something, or geez, your pulse is

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Speaker 1: way high. You have the symptoms of somebody that looks

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Speaker 1: like you might be having some hard issues that you

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Speaker 1: might want to go to your doctor. But so if

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Speaker 1: you think about some of where this is going. I

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Speaker 1: think in the next phase is around this check engine

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Speaker 1: light for yourself. So, without getting to graphic, I've read

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Speaker 1: about sensors that can be put into a toilet where

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Speaker 1: they can check things like blood sugar, and actually check

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Speaker 1: for proteins associated with cancer. This is so small and

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Speaker 1: doesn't have, you know, a giant battery, but I would

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Speaker 1: imagine the next couple of generations of sensors are going

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Speaker 1: to be able to pick up all sorts of stuff that,

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Speaker 1: you know, hard to even imagine. Yeah, the real trick

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Speaker 1: in all this is figuring out what pieces of sensors

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Speaker 1: people would be willing to wear or use regularly so

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Speaker 1: that the data comes through regularly, because with periodic data

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Speaker 1: is and as valuable as regular data. So there's this

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Speaker 1: constant battle between battery life. You know, so this ionic

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Speaker 1: device lasts four or five days, you could put more

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Speaker 1: sensors on it to do more things. It might last

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Speaker 1: four or five hours, in which case, what do you

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Speaker 1: need to watch for that last four or five hours

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Speaker 1: that's of no value to So there's a they're the

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Speaker 1: constant push and pull and struggle and and researches around

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Speaker 1: how do you create sensors that identify things that make

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Speaker 1: the form factor usable enough for people to wear on

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Speaker 1: a regular basis. Related to wearables, I have to ask

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Speaker 1: the question why did Google glass flame out so spectacularly?

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Speaker 1: It seemed like an interesting piece of tech, but it

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Speaker 1: never caught on except for some very specific niches. Yeah,

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Speaker 1: I think it ties back to what we were just

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Speaker 1: talking about with respect to sensors and battery life and usability.

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Speaker 1: It appears as if the form factor never got to

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Speaker 1: a point where people really wanted to wear it. It

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Speaker 1: looked kind of geeky, it looked kind of weird, and

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Speaker 1: you know what we've seen with the fitbit devices and

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Speaker 1: I think it will be applicable for a lot of wearables.

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Speaker 1: Is that the fashionable piece of this is very important.

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Speaker 1: You know, can you is this something that you would

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Speaker 1: wear in public and and and use? Um So, I

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Speaker 1: think I think that might have impacted Google Glass. But

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Speaker 1: the thought of a surgeon who has Google Glass on

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Speaker 1: and wants to pull up a you know, either the

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Speaker 1: X ray or the m R, a you or some

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Speaker 1: other resource makes perfect sense for that absolutely. I think

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Speaker 1: what you what we'll see, particularly for those types of

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Speaker 1: applications on the I've seen something like that that's on

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Speaker 1: the construction floor where actually it was I think of

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Speaker 1: something with Boeing or or Lockheed or something where somebody

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Speaker 1: who was putting together the intricate pieces of a wing

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Speaker 1: of a plane can look at the through his glass

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Speaker 1: blueprints through blueprints right on the throughs. So those are

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Speaker 1: the types of applications that I think are easy to use,

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Speaker 1: much more likely to have early success. I think the

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Speaker 1: form factor for general commercial use hasn't quite got there.

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Speaker 1: And how significant is the Apple Watch as a player

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Speaker 1: in this space because you're your Fitbit watch about the

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Speaker 1: same form factor as the Apple Watch, the same size. Yeah.

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Speaker 1: Everything Apple does is they do a great job. They

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Speaker 1: have a real a loyal fan following. They're passionate, they

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Speaker 1: make great products that they're they're following loves um, you know.

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Speaker 1: So they're they're they're a credible competitor, and I think

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Speaker 1: that they will have and continue to be one of

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Speaker 1: the real leaders in the wearable category for sure. I

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Speaker 1: want to talk a little bit about a fund associated

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Speaker 1: with revolution growth called Rise of the rest O r TR,

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Speaker 1: and the concept is so intriguing. Most of the venture

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Speaker 1: investing seems to take place in San Francisco and New

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Speaker 1: York and Boston. But Revolution Growth does a bus tour,

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Speaker 1: five cities, five days, five thousand dollars, and they do

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Speaker 1: sort of a local pitch competition. Tell us more about

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Speaker 1: the idea behind that, and who's driving that literally driving it,

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Speaker 1: driving above the bus, right, So, so the idea really

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Speaker 1: is Steve Case's idea, um and it's something that he's

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Speaker 1: been and it and it started as an idea and

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Speaker 1: and some activities around a bus tour. They've recently done

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Speaker 1: their seventh bus tour. Really that many wow, And it's

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Speaker 1: half a million per tour or half a million per city,

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Speaker 1: half a million per tour generally, although sometimes he finds

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Speaker 1: a way to involve a couple of the runner ups

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Speaker 1: sometimes get something as well, but apparently that's not to

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Speaker 1: be known. So the activity really is Steve's, and it's

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Speaker 1: one of a personal passion of his, and it's one

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Speaker 1: that the firm Revolution has adopted generally, right, which is

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Speaker 1: in essence, the ideas around good company development and entrepreneurial

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Speaker 1: spirit are not solely located in New York, Boston and

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Speaker 1: San Francisco San Jose region. And if you look at

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Speaker 1: where the distribution of capital is about somewhere between seventy

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Speaker 1: and seventy eight percent of the venture capital money is

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Speaker 1: spent in those three areas. And so there are a

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Speaker 1: number of other great cities in the country that can

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Speaker 1: and should be producing more entrepreneurial based technology companies. It's

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Speaker 1: important for the country, it's important for the people in

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Speaker 1: those communities, and it's a real business opportunity. So we

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Speaker 1: combine all those three and that's really the impetus behind

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Speaker 1: Rise of the Rest. Rise of the Rest has become

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Speaker 1: much more than a bus tour, right, So it started

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Speaker 1: really as a bus tour. It's now become a real

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Speaker 1: platform of folks. There's a real team there as you

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Speaker 1: As you mentioned earlier, there's now a fund associated with it.

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Speaker 1: Hold on a second, I just have to read a

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Speaker 1: few of the names who are affiliated with this fund,

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Speaker 1: because it's just the noodles. Jim Barksdale of nets Gay,

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Speaker 1: Jeff Bezos of Amazon, Tory Birch, Steve Case, Ray Dalio,

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Speaker 1: John Dor, Henry Kravis, Michael Milkin's, Sean Parker, Howard Schiltz,

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Speaker 1: Eric sch Mintmigut Whitman. That's just the like first half

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Speaker 1: and the rest of it is just as impressive. How

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Speaker 1: on earth did a group of rock stars like that

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Speaker 1: come together to fund a concept like this? That's just

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Speaker 1: a mind blowing list of investors. It is an amazing list.

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Speaker 1: I'm not sure that list of investors has ever been

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Speaker 1: put together in a fund. And now I have another

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Speaker 1: twenty two podcasts to do based just on that list.

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Speaker 1: I think it speaks to the power of the idea.

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Speaker 1: Uh as. The first phases of this were the investments

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Speaker 1: were funded mostly from Steve Case's personal UM resources, and

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Speaker 1: as he traveled around the country and as he talked

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Speaker 1: to people that he had known and worked with and

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Speaker 1: interacted with, what he heard was, Geez, this is a

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Speaker 1: great idea. I want to be part of it. And

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Speaker 1: a decision was made about a year ago to to

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Speaker 1: institutionalize that activity, at least in terms of the deploying

432
00:24:37,640 --> 00:24:41,800
Speaker 1: of capital around a fund and based on the names

433
00:24:41,800 --> 00:24:45,240
Speaker 1: of people you can imagine. Um. You know, they really

434
00:24:45,280 --> 00:24:48,919
Speaker 1: thought that this was a powerful idea. They believe that

435
00:24:49,000 --> 00:24:53,000
Speaker 1: it is important for the country, important for the growth

436
00:24:53,040 --> 00:24:56,720
Speaker 1: of entrepreneurship across the country. I mean, anybody that runs

437
00:24:56,760 --> 00:25:00,560
Speaker 1: companies in Boston, New York and San France. Cisco knows

438
00:25:00,600 --> 00:25:04,680
Speaker 1: that labor shortage type hiring and retaining engineers is tight

439
00:25:05,160 --> 00:25:08,040
Speaker 1: um cost of living cause we're living through the roof,

440
00:25:08,680 --> 00:25:11,760
Speaker 1: so there's lots of things that make it challenging. There's

441
00:25:11,760 --> 00:25:13,800
Speaker 1: those are great places, and there are great companies and

442
00:25:13,800 --> 00:25:15,919
Speaker 1: they will continue to be. So the rise of the

443
00:25:15,960 --> 00:25:19,200
Speaker 1: rest is not, you know, sinking of these other places.

444
00:25:19,280 --> 00:25:22,400
Speaker 1: It's that these other opportunity there are places where new

445
00:25:22,440 --> 00:25:25,399
Speaker 1: opportunities can to be created, and we should be really

446
00:25:25,520 --> 00:25:27,800
Speaker 1: sponsoring those. And so that's really what that's all about.

447
00:25:28,080 --> 00:25:31,400
Speaker 1: There was a New York Times article some weeks ago

448
00:25:31,800 --> 00:25:37,080
Speaker 1: about a bunch of Silicon Valley venture capitalists who suddenly

449
00:25:37,160 --> 00:25:41,639
Speaker 1: had become completely enamored with Detroit. The cost of living

450
00:25:41,720 --> 00:25:46,680
Speaker 1: is incredibly cheap. There's a huge engineering and and um

451
00:25:46,760 --> 00:25:49,840
Speaker 1: technology talent pool there that they didn't expect to see.

452
00:25:50,320 --> 00:25:53,560
Speaker 1: How realistic is it to think of parts of the

453
00:25:53,600 --> 00:25:59,520
Speaker 1: Midwest Pittsburgh, Milwaukee, Detroit and other cities outside of the

454
00:25:59,600 --> 00:26:05,679
Speaker 1: core current technology venture capital areas really developing a burgeoning

455
00:26:06,040 --> 00:26:08,320
Speaker 1: texting I think it's very realistic, and I think we're

456
00:26:08,359 --> 00:26:10,800
Speaker 1: seeing it. Two of the most exciting companies in our

457
00:26:10,800 --> 00:26:14,240
Speaker 1: portfolio in Chicago. It's just in the West Loop and

458
00:26:14,280 --> 00:26:18,120
Speaker 1: it's one amazing If you walk into I think it's

459
00:26:18,119 --> 00:26:21,479
Speaker 1: six hundred West Chicago Avenue where these two companies, Temples

460
00:26:21,520 --> 00:26:25,800
Speaker 1: and Uptake are located, you would think you're in Silicon Valley.

461
00:26:25,960 --> 00:26:30,679
Speaker 1: The offices are, you know, vibrant, and there's young folks

462
00:26:30,760 --> 00:26:32,840
Speaker 1: coming in and out of the building all day long,

463
00:26:33,000 --> 00:26:38,240
Speaker 1: and there's the activity level is really buzzing. So Chicago's

464
00:26:38,280 --> 00:26:41,320
Speaker 1: for sure one of those areas that's coming along. Um.

465
00:26:41,359 --> 00:26:44,800
Speaker 1: I've done some stuff down in Atlanta, Atlantis coming along's

466
00:26:44,880 --> 00:26:48,720
Speaker 1: coming along. Um. We just did the investment in tallah

467
00:26:48,760 --> 00:26:50,520
Speaker 1: that we referred to earlier, which is in Santa Monica,

468
00:26:50,600 --> 00:26:52,520
Speaker 1: right outside of el I mean, there's so that we

469
00:26:52,640 --> 00:26:56,960
Speaker 1: believe that there are. Pittsburgh is where Google has their

470
00:26:57,080 --> 00:27:00,160
Speaker 1: autonomous uh and I think Uber has a lot their

471
00:27:00,200 --> 00:27:03,160
Speaker 1: autonomous work being done there. So a lot of these

472
00:27:03,160 --> 00:27:07,000
Speaker 1: cities that have great universities, a lot of young folks

473
00:27:07,400 --> 00:27:10,800
Speaker 1: are support of local community. They can do this and

474
00:27:10,800 --> 00:27:12,879
Speaker 1: and we're really starting to see this. So this isn't

475
00:27:12,920 --> 00:27:15,280
Speaker 1: a press release. This is a real commitment to those areas.

476
00:27:15,280 --> 00:27:17,080
Speaker 1: We stayed in the hotel right across the street, from

477
00:27:17,080 --> 00:27:20,199
Speaker 1: the new Google building, and our office in Chicago is

478
00:27:20,280 --> 00:27:22,520
Speaker 1: at a WEE works right around the corner from that.

479
00:27:22,600 --> 00:27:25,920
Speaker 1: It's amazing, it really is. Let's talk a little bit

480
00:27:26,080 --> 00:27:30,320
Speaker 1: about the modern era of venture investing, because it seems

481
00:27:30,359 --> 00:27:34,320
Speaker 1: so different than the two thousands, with the housing boom

482
00:27:34,320 --> 00:27:37,040
Speaker 1: and bust and the Great Financial Crisis, and of course

483
00:27:37,200 --> 00:27:40,600
Speaker 1: the insanity of the will we had, the dot com

484
00:27:40,720 --> 00:27:44,480
Speaker 1: boom and bust and and and that situation. I've noticed

485
00:27:44,480 --> 00:27:48,120
Speaker 1: that lots and lots of companies are staying private much

486
00:27:48,440 --> 00:27:50,280
Speaker 1: longer than they used to. The number of I p

487
00:27:50,359 --> 00:27:54,840
Speaker 1: o S are down. What's the driver behind that? Well,

488
00:27:54,880 --> 00:27:57,160
Speaker 1: as they say, probably part of it is because they

489
00:27:57,240 --> 00:28:00,280
Speaker 1: can all that all that capital we talked around gives

490
00:28:00,280 --> 00:28:03,400
Speaker 1: them an opportunity to not go public. One reasons, really,

491
00:28:03,440 --> 00:28:07,359
Speaker 1: I think is one is um because of some of

492
00:28:07,400 --> 00:28:11,800
Speaker 1: the regulations that's happened around Sarbanes Oxley and other things,

493
00:28:12,040 --> 00:28:16,000
Speaker 1: the cost and complexity of being a public company has

494
00:28:16,040 --> 00:28:21,160
Speaker 1: gone up, and so there's certainly some piece of it

495
00:28:21,200 --> 00:28:27,439
Speaker 1: is that it's just difficult. It's expensive. Oftentimes, particularly technology

496
00:28:27,440 --> 00:28:32,280
Speaker 1: based companies d prioritize building the infrastructure to support that

497
00:28:32,480 --> 00:28:35,920
Speaker 1: over the next product more sales and marketing, expand into

498
00:28:36,000 --> 00:28:39,800
Speaker 1: international activities and the like. And so there's a part

499
00:28:39,840 --> 00:28:42,440
Speaker 1: of it that is, hey, we don't want to do that,

500
00:28:42,560 --> 00:28:45,160
Speaker 1: and then there's a what what? So it's more let

501
00:28:45,440 --> 00:28:48,040
Speaker 1: me interrupt you. It's more than just regulations. It's building

502
00:28:48,040 --> 00:28:53,560
Speaker 1: out human resources, accounting, payroll compliance, all that stuff. They

503
00:28:53,640 --> 00:28:55,840
Speaker 1: just want to capture market share and sell more and

504
00:28:56,000 --> 00:28:58,560
Speaker 1: varied products. Yeah, if you think about what drives a

505
00:28:58,840 --> 00:29:01,680
Speaker 1: founder to start a company and what drives the founder

506
00:29:01,720 --> 00:29:04,320
Speaker 1: every day to picking a new payroll company, that's what

507
00:29:04,360 --> 00:29:09,440
Speaker 1: they're enthusiastic, picking a cybersecurity expert and and reviewing compliance

508
00:29:09,520 --> 00:29:13,400
Speaker 1: with Sarbanes Oxley for a one C or whatever. I mean,

509
00:29:14,160 --> 00:29:17,760
Speaker 1: for sure there's some piece of it that is not

510
00:29:17,960 --> 00:29:21,360
Speaker 1: prioritized with a lot of companies. So what But what

511
00:29:21,480 --> 00:29:24,240
Speaker 1: has enabled it? I believe as as you referred to

512
00:29:24,280 --> 00:29:27,280
Speaker 1: earlier as really the access of capital to allow for

513
00:29:27,800 --> 00:29:30,600
Speaker 1: the growth without having to tap the public market. So

514
00:29:30,600 --> 00:29:33,440
Speaker 1: that you as a venture capitalist, you as a person

515
00:29:33,560 --> 00:29:37,560
Speaker 1: running of funds, you're looking for an exit eventually, I

516
00:29:37,600 --> 00:29:41,320
Speaker 1: got to imagine that the big backers of shops like

517
00:29:41,480 --> 00:29:44,200
Speaker 1: Uber aren't. Yeah, take your time whenever you get around

518
00:29:44,240 --> 00:29:47,520
Speaker 1: to it will be patient. I think these folks are

519
00:29:47,600 --> 00:29:50,560
Speaker 1: waiting for an exit. And Uber perhaps is a good example.

520
00:29:50,560 --> 00:29:52,680
Speaker 1: If they would have gone public a year ago, they

521
00:29:52,760 --> 00:29:56,080
Speaker 1: might have missed that whole. Gee, here's a haircut on

522
00:29:56,120 --> 00:29:59,520
Speaker 1: your last high water mark valuation. Certainly could have been

523
00:29:59,760 --> 00:30:04,520
Speaker 1: And for sure, venture investors have limited partners and of

524
00:30:05,000 --> 00:30:08,800
Speaker 1: institutions that need money back at some point. That said,

525
00:30:08,840 --> 00:30:10,320
Speaker 1: if you talk to a lot of them, I'm sure

526
00:30:10,360 --> 00:30:12,880
Speaker 1: you hear from others that if they find a great

527
00:30:12,920 --> 00:30:15,920
Speaker 1: company that continues to grow at a fast pace and

528
00:30:15,920 --> 00:30:20,160
Speaker 1: it's continuing to gain market share and developing opportunity, that's

529
00:30:20,200 --> 00:30:22,720
Speaker 1: not something they want to get out of quickly. Right. So,

530
00:30:23,320 --> 00:30:27,600
Speaker 1: on some level, by these companies, the best of them

531
00:30:27,640 --> 00:30:31,000
Speaker 1: not going public, it allows some of these venture investors

532
00:30:31,040 --> 00:30:34,360
Speaker 1: to hold longer and capture more of the upside, where

533
00:30:34,400 --> 00:30:37,600
Speaker 1: perhaps in previous years, when the company goes public, they're

534
00:30:37,640 --> 00:30:41,640
Speaker 1: under a lot more pressure to sell their shares because

535
00:30:41,640 --> 00:30:44,080
Speaker 1: there's a public market for that. Now, I recall in

536
00:30:44,120 --> 00:30:47,680
Speaker 1: the nineties and maybe that's an aberrational period, but every

537
00:30:47,680 --> 00:30:49,560
Speaker 1: now and then a company would come public with a

538
00:30:49,680 --> 00:30:53,239
Speaker 1: very small float. Perhaps that was the thinking behind it.

539
00:30:53,320 --> 00:30:55,320
Speaker 1: All Right, we'll sell ten percent of our holdings, but

540
00:30:55,440 --> 00:30:57,800
Speaker 1: we think this is worth a lot and we don't

541
00:30:57,800 --> 00:30:59,480
Speaker 1: really need the money, so we willing to let it

542
00:30:59,560 --> 00:31:02,360
Speaker 1: ride a little bit. That's right, And and that was

543
00:31:02,400 --> 00:31:05,720
Speaker 1: also particularly in the nineties, Really the I p O

544
00:31:05,800 --> 00:31:08,960
Speaker 1: event was much more of a financing event, right, which

545
00:31:09,000 --> 00:31:13,560
Speaker 1: is they had they got access sitting in boardrooms during

546
00:31:13,640 --> 00:31:16,160
Speaker 1: that time, the question about when to go public was

547
00:31:16,360 --> 00:31:19,000
Speaker 1: when do we need to raise our next round? And

548
00:31:19,040 --> 00:31:21,320
Speaker 1: what would be the benefits of being public? And some

549
00:31:21,440 --> 00:31:23,520
Speaker 1: of them would be access to more capital, some of

550
00:31:23,560 --> 00:31:26,080
Speaker 1: them would be we now have a public currency which

551
00:31:26,120 --> 00:31:28,800
Speaker 1: we can use for acquisitions and the like. And with

552
00:31:28,880 --> 00:31:32,320
Speaker 1: the the world that has changed now where there there

553
00:31:32,360 --> 00:31:36,120
Speaker 1: aren't five soft bank vision funds, but there are certainly

554
00:31:36,200 --> 00:31:41,320
Speaker 1: five multi billion dollar funds that are focused now on

555
00:31:41,680 --> 00:31:45,800
Speaker 1: later stage technology based companies that are private. And so

556
00:31:45,840 --> 00:31:50,560
Speaker 1: the availability of capital I can't imagine it's ever been

557
00:31:50,760 --> 00:31:53,480
Speaker 1: more great than it is right now. Are we creating

558
00:31:54,040 --> 00:31:57,520
Speaker 1: a giant damn behind which there's all this pent up

559
00:31:57,520 --> 00:32:00,760
Speaker 1: demand to go public or pent up demand for for

560
00:32:00,840 --> 00:32:04,480
Speaker 1: more companies, And at some point, not too far off

561
00:32:04,480 --> 00:32:06,680
Speaker 1: in the future, we're gonna see a wave of I

562
00:32:06,800 --> 00:32:09,520
Speaker 1: p O s coming out. I don't know. There's been

563
00:32:09,560 --> 00:32:11,280
Speaker 1: a lot of talk about this wave of I p

564
00:32:11,360 --> 00:32:12,920
Speaker 1: O s for a number of years, and it doesn't

565
00:32:12,920 --> 00:32:16,240
Speaker 1: seem to have happened. I do think some of these

566
00:32:16,240 --> 00:32:19,240
Speaker 1: companies that are private, some of these big companies there,

567
00:32:19,320 --> 00:32:21,280
Speaker 1: B and B and others, they could go public anytime

568
00:32:21,280 --> 00:32:23,840
Speaker 1: they want. Uh. They don't have to wait for a

569
00:32:23,880 --> 00:32:27,280
Speaker 1: good market, a bad market, whatever. There are companies that

570
00:32:27,320 --> 00:32:30,160
Speaker 1: are our size and scale. Many of them are achieving

571
00:32:30,280 --> 00:32:33,040
Speaker 1: or past profitability. They're starting to show real leverage in

572
00:32:33,040 --> 00:32:35,760
Speaker 1: their model. They're starting to show that they're they're able

573
00:32:35,800 --> 00:32:39,240
Speaker 1: to add new products and new services onto what they're

574
00:32:39,240 --> 00:32:41,560
Speaker 1: doing in a very effective and efficient manner. They've built

575
00:32:41,560 --> 00:32:44,920
Speaker 1: out their management team so they are operating almost as

576
00:32:44,960 --> 00:32:47,000
Speaker 1: if they are a public company. When the within the

577
00:32:47,040 --> 00:32:50,560
Speaker 1: shell of within the veil of privacy, if you will,

578
00:32:50,640 --> 00:32:53,720
Speaker 1: and you know so, I think those will happen. Whether

579
00:32:53,760 --> 00:32:56,640
Speaker 1: they happen this month, next month, next year, it's unclear.

580
00:32:56,920 --> 00:32:59,920
Speaker 1: So let's talk a little bit about valuation. I've had

581
00:33:00,320 --> 00:33:05,880
Speaker 1: other vcs like Mark Andreeson tell me valuation is irrelevant.

582
00:33:06,320 --> 00:33:09,000
Speaker 1: Their business model is looking for the needle in a haystack.

583
00:33:09,080 --> 00:33:13,280
Speaker 1: And whether Facebook returns ten thousand times your initial investment

584
00:33:13,320 --> 00:33:16,080
Speaker 1: or twenty thousand times, it's a relevant at pace for

585
00:33:16,120 --> 00:33:19,400
Speaker 1: a lot of other um investments that don't work out.

586
00:33:20,200 --> 00:33:23,240
Speaker 1: You have the accounting background, what do you think of

587
00:33:23,240 --> 00:33:29,160
Speaker 1: of valuation when you're trying to choose amongst early stage companies? Yeah,

588
00:33:29,200 --> 00:33:31,800
Speaker 1: I guess maybe this is where some of my accounting

589
00:33:31,800 --> 00:33:34,720
Speaker 1: background would probably put me in a slightly different uh

590
00:33:35,240 --> 00:33:37,360
Speaker 1: point of view there. I think as it relates to

591
00:33:37,600 --> 00:33:40,600
Speaker 1: super early stage investments where you're really betting on a

592
00:33:40,640 --> 00:33:44,360
Speaker 1: team and an idea, whether you invest that two million

593
00:33:44,400 --> 00:33:47,000
Speaker 1: pre or ten million pre probably doesn't matter too much.

594
00:33:47,920 --> 00:33:50,720
Speaker 1: I think it starts to matter a lot more as

595
00:33:50,720 --> 00:33:54,000
Speaker 1: you get further up the valuation train. So does it

596
00:33:54,160 --> 00:33:57,840
Speaker 1: matter if you invest in the next best travel company

597
00:33:57,880 --> 00:34:01,240
Speaker 1: that has a lot of traction at a two million

598
00:34:01,320 --> 00:34:04,360
Speaker 1: valuation versus a billion valuation? I think it matters actually

599
00:34:04,360 --> 00:34:08,200
Speaker 1: a lot in many instances. In actually most instances, it's

600
00:34:08,200 --> 00:34:10,600
Speaker 1: easy to point to a Facebook and say, hey, you're

601
00:34:10,640 --> 00:34:12,680
Speaker 1: going to make twenty thou times your money. Doesn't really

602
00:34:12,719 --> 00:34:14,960
Speaker 1: matter if you make ten thousand times your money, of

603
00:34:14,960 --> 00:34:20,200
Speaker 1: course it does not. The that's really an exception. Most

604
00:34:20,239 --> 00:34:24,040
Speaker 1: of the companies follow into a much more predictable pattern

605
00:34:24,080 --> 00:34:27,440
Speaker 1: of what they can exit at. Ultimately, as you know,

606
00:34:27,520 --> 00:34:29,839
Speaker 1: what does that bill curve look like of those that

607
00:34:29,920 --> 00:34:32,279
Speaker 1: don't make it, those that break even, and those that

608
00:34:32,760 --> 00:34:37,560
Speaker 1: deliver a profit. It depends when you invest. Uh, if

609
00:34:37,600 --> 00:34:40,640
Speaker 1: you're pure early stage investors, most of them that are

610
00:34:40,680 --> 00:34:43,960
Speaker 1: honest with you would tell you that certainly thirty or

611
00:34:44,040 --> 00:34:48,080
Speaker 1: forty of their companies never make it. That's the earlier stage,

612
00:34:48,320 --> 00:34:51,759
Speaker 1: the much more challenging it is. You're really casting a

613
00:34:51,800 --> 00:34:53,840
Speaker 1: wide neck because so many of them are going to fail.

614
00:34:54,040 --> 00:34:56,399
Speaker 1: At the stage that we invest in, which is really

615
00:34:56,440 --> 00:34:59,960
Speaker 1: the growth stage where there's been there's lots of work

616
00:35:00,120 --> 00:35:03,280
Speaker 1: left to be done, but there's a existing revenue stream

617
00:35:03,280 --> 00:35:05,319
Speaker 1: and there's a product in the marketplace where you can

618
00:35:05,360 --> 00:35:08,800
Speaker 1: see things like margin and things like that. The failure

619
00:35:08,880 --> 00:35:12,920
Speaker 1: rate should be much much lower should be of the companies.

620
00:35:13,200 --> 00:35:16,960
Speaker 1: But you also lose the fifty or a hundred times

621
00:35:17,120 --> 00:35:19,640
Speaker 1: x because you're in at a higher valuation and transpoint.

622
00:35:19,800 --> 00:35:22,319
Speaker 1: But you could still see a ten or twenty x

623
00:35:22,400 --> 00:35:25,359
Speaker 1: return and that pays for a lot of companies that

624
00:35:25,560 --> 00:35:28,359
Speaker 1: for sure don't don't break even for sure. We were

625
00:35:28,400 --> 00:35:31,680
Speaker 1: discussing earlier about some of the companies that have stayed

626
00:35:32,480 --> 00:35:36,000
Speaker 1: UM private, and I referenced Duber. What about a company

627
00:35:36,000 --> 00:35:39,920
Speaker 1: like Tesla that went public and just has this massive

628
00:35:40,719 --> 00:35:44,120
Speaker 1: cash burn? Should they have stayed private and continue to

629
00:35:44,160 --> 00:35:48,080
Speaker 1: tap the venture markets or does this make sense for them?

630
00:35:48,120 --> 00:35:50,239
Speaker 1: I I, you know, I don't know enough to know.

631
00:35:50,480 --> 00:35:52,600
Speaker 1: I don't know all the details of why they decided

632
00:35:52,640 --> 00:35:54,399
Speaker 1: to do what they've do. It seems to have worked

633
00:35:54,440 --> 00:35:58,520
Speaker 1: out okay for them. They're obviously going through some challenges now,

634
00:35:59,160 --> 00:36:02,320
Speaker 1: but people love the product. They've be able to access

635
00:36:02,320 --> 00:36:05,879
Speaker 1: a lot of public funds. Um recently they just did

636
00:36:05,920 --> 00:36:09,640
Speaker 1: another three billion dollar bond bond offering that worked out

637
00:36:09,640 --> 00:36:12,400
Speaker 1: pretty well. And the CEO Ellen is obviously one of

638
00:36:12,440 --> 00:36:15,200
Speaker 1: the world's great visionaries that people want to back and

639
00:36:15,239 --> 00:36:19,640
Speaker 1: want to support. Uh So why they decided to go

640
00:36:19,719 --> 00:36:22,400
Speaker 1: public when they did is not clear, but it seems

641
00:36:22,400 --> 00:36:26,160
Speaker 1: to have worked out okay for them. So you referenced funding,

642
00:36:26,320 --> 00:36:30,520
Speaker 1: an idea and a team. Um, which is more important?

643
00:36:30,600 --> 00:36:33,279
Speaker 1: Is it the idea that grabs your attention? Is it

644
00:36:33,400 --> 00:36:36,200
Speaker 1: the team and how they execute or is it some

645
00:36:36,880 --> 00:36:41,440
Speaker 1: ineffable combination. Yeah, it's I'm sure it's It depends a

646
00:36:41,480 --> 00:36:44,360
Speaker 1: little different on each one, and I think it depends

647
00:36:44,360 --> 00:36:48,000
Speaker 1: a little bit more on the stage of investments. So

648
00:36:48,040 --> 00:36:52,239
Speaker 1: the earlier we go, the more it's simply dependent on

649
00:36:52,320 --> 00:36:55,600
Speaker 1: the team. Right. So it's because what we find is

650
00:36:55,960 --> 00:36:59,920
Speaker 1: great teams can find the opportunity. You know, if you're

651
00:37:00,520 --> 00:37:03,080
Speaker 1: if you're in a general market area where you think

652
00:37:03,120 --> 00:37:05,800
Speaker 1: there's a great opportunity and you have a superior team,

653
00:37:06,239 --> 00:37:10,200
Speaker 1: they will find where those nuanced opportunities will be. They're

654
00:37:10,200 --> 00:37:14,040
Speaker 1: almost never exactly where you start. I use this uh

655
00:37:14,239 --> 00:37:17,120
Speaker 1: analogy with a lot of people because my sons are

656
00:37:17,120 --> 00:37:20,399
Speaker 1: all they they're competitive sale racers, And I said, when

657
00:37:20,440 --> 00:37:24,839
Speaker 1: you're running one of these companies, you're you know where

658
00:37:24,840 --> 00:37:26,600
Speaker 1: you need to go. You're at point A and you

659
00:37:26,600 --> 00:37:29,560
Speaker 1: need to get to point C. The problem is the

660
00:37:29,600 --> 00:37:33,560
Speaker 1: people that you don't realize that the captain of the ship,

661
00:37:33,600 --> 00:37:35,480
Speaker 1: if you will, is actually in a sailboat, not a

662
00:37:35,520 --> 00:37:38,799
Speaker 1: motor boat. So you have to go. And so if

663
00:37:38,800 --> 00:37:40,560
Speaker 1: you try to go in a sailboat from point A

664
00:37:40,680 --> 00:37:42,799
Speaker 1: to point C, if the wind is not exactly where

665
00:37:42,840 --> 00:37:45,759
Speaker 1: you think it is, you ain't going anywhere, right. And

666
00:37:46,160 --> 00:37:48,560
Speaker 1: too many people say, geez, I know where I'm going,

667
00:37:48,600 --> 00:37:50,600
Speaker 1: and I keep going and I'm running into this wall.

668
00:37:51,000 --> 00:37:55,800
Speaker 1: The really talented managers of these companies and founders, they say, geez,

669
00:37:55,840 --> 00:37:57,319
Speaker 1: I know where I'm going, but I have to go

670
00:37:57,400 --> 00:37:59,279
Speaker 1: here first and then there and then there, and I'm

671
00:37:59,320 --> 00:38:00,960
Speaker 1: going to read the t leaves along the way, and

672
00:38:01,000 --> 00:38:02,959
Speaker 1: it's it's actually fun to be a part of those

673
00:38:03,320 --> 00:38:05,920
Speaker 1: We have been speaking with Steve Murray. He is a

674
00:38:05,960 --> 00:38:11,319
Speaker 1: partner at Revolution Growth Venture Funds. If you enjoy this conversation,

675
00:38:11,440 --> 00:38:14,040
Speaker 1: be sure and stick around for the podcast extras. Will

676
00:38:14,040 --> 00:38:17,080
Speaker 1: we keep the tape rolling and continue discussing all things

677
00:38:17,600 --> 00:38:22,239
Speaker 1: venture related. We love your comments, feedback and suggestions right

678
00:38:22,320 --> 00:38:25,439
Speaker 1: to us at m IB podcast at Bloomberg dot net.

679
00:38:25,880 --> 00:38:29,600
Speaker 1: You can check out my daily column at Bloomberg dot com.

680
00:38:29,640 --> 00:38:33,120
Speaker 1: Follow me on Twitter at rit Holts. I'm Barry rit Holts.

681
00:38:33,160 --> 00:38:50,240
Speaker 1: You're listening to Masters in Business on Bloomberg Radio. Welcome

682
00:38:50,280 --> 00:38:53,160
Speaker 1: to the podcast, Steve, thanks so much for doing this.

683
00:38:53,280 --> 00:38:56,680
Speaker 1: I have a list of questions we didn't get to.

684
00:38:56,960 --> 00:39:02,080
Speaker 1: I have to um bounce off view before we start

685
00:39:02,200 --> 00:39:08,280
Speaker 1: with our favorite questions. UM, your New York and DC based.

686
00:39:09,000 --> 00:39:11,920
Speaker 1: I have to ask, what's the difference between venture or

687
00:39:11,960 --> 00:39:16,680
Speaker 1: even private equity? Firms on the East Coast versus those

688
00:39:16,760 --> 00:39:19,520
Speaker 1: out in Silicon Valley. And I say this as a

689
00:39:19,560 --> 00:39:23,280
Speaker 1: person who has been to a number of Silicon Valley

690
00:39:23,560 --> 00:39:26,040
Speaker 1: venture firms, and every time I walk out of one

691
00:39:26,080 --> 00:39:29,440
Speaker 1: of them, I kind of scratched my chin and say,

692
00:39:29,160 --> 00:39:31,759
Speaker 1: I could live in California if I had to, I

693
00:39:32,120 --> 00:39:35,759
Speaker 1: could survive this. In New York. It seems they're role

694
00:39:35,880 --> 00:39:38,440
Speaker 1: in big offices and it's lovely and everything, but it's

695
00:39:38,440 --> 00:39:42,560
Speaker 1: a totally different vibe. Yeah, the weather in UH in

696
00:39:42,640 --> 00:39:46,319
Speaker 1: northern California is certainly superior to Boston or New York,

697
00:39:47,719 --> 00:39:50,760
Speaker 1: to say the least. I agree with that, that's agree.

698
00:39:51,200 --> 00:39:55,480
Speaker 1: So I actually think the differences between the coasts and

699
00:39:55,520 --> 00:39:59,000
Speaker 1: how they approach things has changed a little bit over time,

700
00:39:59,000 --> 00:40:02,160
Speaker 1: and they have become are similar. Partly is that some

701
00:40:02,239 --> 00:40:04,440
Speaker 1: of the firms and the West Coast have opened up

702
00:40:04,440 --> 00:40:06,239
Speaker 1: New York offices, and some of the firms in New

703
00:40:06,280 --> 00:40:09,200
Speaker 1: York and Boston have opened up Silicon value firms. Actually,

704
00:40:09,239 --> 00:40:11,680
Speaker 1: most of the successful firms on either coast now have

705
00:40:11,760 --> 00:40:14,080
Speaker 1: a presence in the coast that they weren't in. So

706
00:40:14,120 --> 00:40:15,839
Speaker 1: I think there's some of that that there's a little

707
00:40:15,840 --> 00:40:19,239
Speaker 1: bit more of similarity. That said, I do think there

708
00:40:19,440 --> 00:40:23,960
Speaker 1: is something to the you know, the the old adage

709
00:40:24,000 --> 00:40:27,400
Speaker 1: that they're the more risk tolerant on the West Coast.

710
00:40:27,760 --> 00:40:32,640
Speaker 1: They're more for sure, and they're the acceptance of failure

711
00:40:32,800 --> 00:40:36,480
Speaker 1: is a little higher, and on some level, particularly on

712
00:40:36,520 --> 00:40:40,759
Speaker 1: the early stage, I find that the West Coast investors

713
00:40:40,800 --> 00:40:46,239
Speaker 1: almost look like, look at somebody's failure as a CEO

714
00:40:46,520 --> 00:40:49,359
Speaker 1: as a badge of honor, not as a you know,

715
00:40:49,400 --> 00:40:52,120
Speaker 1: a black mark. Hey, this guy tried, They went for it,

716
00:40:52,200 --> 00:40:55,920
Speaker 1: they swung for the fences. Now I just um said

717
00:40:56,040 --> 00:40:59,640
Speaker 1: this guy and it's mostly been guys. Do you see

718
00:40:59,680 --> 00:41:02,960
Speaker 1: an each changes taking place with more women, more people

719
00:41:03,000 --> 00:41:09,479
Speaker 1: of color, less um, less just male dominator technology. Yeah,

720
00:41:09,520 --> 00:41:12,440
Speaker 1: for sure, they're they're less pro topia every everything for

721
00:41:12,680 --> 00:41:16,680
Speaker 1: the venture from the venture firms themselves, uh, to the

722
00:41:17,000 --> 00:41:21,960
Speaker 1: firms and the companies running there's there's a clear uh

723
00:41:23,160 --> 00:41:27,319
Speaker 1: emphasis on diversity, and there's real business reasons for it.

724
00:41:27,360 --> 00:41:31,000
Speaker 1: The research suggests that you get people in a room

725
00:41:31,080 --> 00:41:33,120
Speaker 1: with different points of view and you come up with

726
00:41:33,160 --> 00:41:36,359
Speaker 1: a better outcome. So let's group think. I think there's

727
00:41:36,360 --> 00:41:38,720
Speaker 1: a there's a lot a lot of ways to go there,

728
00:41:38,800 --> 00:41:41,800
Speaker 1: and obviously there's been some some you know, very public

729
00:41:41,840 --> 00:41:43,759
Speaker 1: and bad stories that have come out in the last

730
00:41:43,760 --> 00:41:47,680
Speaker 1: couple of years. But that's probably catalyzing change faster, is

731
00:41:47,680 --> 00:41:51,120
Speaker 1: my my guess. So you sit at a unique perch

732
00:41:51,160 --> 00:41:54,279
Speaker 1: where you're looking at things that are changing. What is

733
00:41:54,360 --> 00:41:59,000
Speaker 1: the next industry that's going to be disrupted? Is it healthcare?

734
00:41:59,200 --> 00:42:02,000
Speaker 1: Is it finance? Schools? In fintech, which I know is

735
00:42:02,040 --> 00:42:05,200
Speaker 1: an area, uh you like, is it even something like

736
00:42:05,280 --> 00:42:09,360
Speaker 1: food or transportation? What what's the next disruption that's going

737
00:42:09,400 --> 00:42:12,799
Speaker 1: to take place? I think there's all of those, but

738
00:42:13,120 --> 00:42:16,040
Speaker 1: so here's but there's one that's maybe more more current

739
00:42:16,120 --> 00:42:18,719
Speaker 1: than Okay, an interesting topic to talk about, which is

740
00:42:19,239 --> 00:42:23,880
Speaker 1: the Supreme Court will rule within the next thirty days

741
00:42:24,680 --> 00:42:28,920
Speaker 1: on a case called Paspo, which is the state of

742
00:42:28,920 --> 00:42:34,240
Speaker 1: New Jersey sued the federal government essentially around thing about

743
00:42:34,280 --> 00:42:38,680
Speaker 1: states rights. But depending on which way the Supreme Court rules,

744
00:42:38,880 --> 00:42:43,279
Speaker 1: it could allow for legalized sports gambling on a state

745
00:42:43,320 --> 00:42:48,760
Speaker 1: by state basis. Legalized sports gambling. So currently there's gambling

746
00:42:48,760 --> 00:42:53,200
Speaker 1: allowed in Las Vegas. You can bet on different um

747
00:42:53,239 --> 00:42:57,680
Speaker 1: teams and stuff. Isn't that is that not allowable on

748
00:42:57,719 --> 00:43:00,759
Speaker 1: a state by state basis currently? So you are now

749
00:43:00,800 --> 00:43:03,799
Speaker 1: seemingly making the argument that New Jersey is making, which

750
00:43:03,880 --> 00:43:08,120
Speaker 1: is why does Nevada get to allow for this and

751
00:43:08,280 --> 00:43:11,680
Speaker 1: the other states not? It doesn't make much sense there,

752
00:43:12,360 --> 00:43:15,680
Speaker 1: So that that's the essence of the conflict. There's lots

753
00:43:15,719 --> 00:43:18,279
Speaker 1: of legal nuanced and you with your legal background, would

754
00:43:18,320 --> 00:43:19,920
Speaker 1: be able to read the briefings, I'm sure, and be

755
00:43:19,960 --> 00:43:24,440
Speaker 1: able to summarize them, do you, Lord No, under no circumstances.

756
00:43:24,480 --> 00:43:27,839
Speaker 1: In essence, that is the conflict that's being resolved, or

757
00:43:27,880 --> 00:43:30,399
Speaker 1: that's being that that's at at that issue right now.

758
00:43:30,880 --> 00:43:34,560
Speaker 1: The reason I think that's so important is that sports

759
00:43:34,880 --> 00:43:38,960
Speaker 1: and the media around sports has changed so much in

760
00:43:39,000 --> 00:43:43,560
Speaker 1: the last few years. How people engage with sports, whether

761
00:43:43,640 --> 00:43:48,400
Speaker 1: it's through the mobile device, whether it's through uh fantasy sports,

762
00:43:48,480 --> 00:43:54,200
Speaker 1: both regular league's fantasy sports or daily fantasy sports like

763
00:43:54,239 --> 00:43:58,839
Speaker 1: at DraftKings. The engagement with sports has changed so much

764
00:43:58,840 --> 00:44:03,359
Speaker 1: over time. But the import of sports to the television

765
00:44:03,400 --> 00:44:09,800
Speaker 1: bundle and places cut the chord. You're not seeing live sports,

766
00:44:09,800 --> 00:44:14,480
Speaker 1: that's right, So that this is a big thing. There's

767
00:44:14,560 --> 00:44:18,200
Speaker 1: a strong opinion amongst many people that know much more

768
00:44:18,200 --> 00:44:20,560
Speaker 1: about it than I do, that the Supreme Court will

769
00:44:20,560 --> 00:44:24,840
Speaker 1: in fact overrule. This makes sense and allow for states

770
00:44:25,320 --> 00:44:27,640
Speaker 1: to decide on their own what they want to do.

771
00:44:28,160 --> 00:44:32,760
Speaker 1: That will kick off an enormous game of musical chairs

772
00:44:32,840 --> 00:44:37,200
Speaker 1: around who's doing what. Everybody wants to have their hand

773
00:44:37,239 --> 00:44:44,400
Speaker 1: in that pie. The leagues, the states, want, the operators,

774
00:44:44,800 --> 00:44:49,439
Speaker 1: the media companies. Everyone seems to be positioning there. There's

775
00:44:49,440 --> 00:44:52,400
Speaker 1: a number of states that have already begun to file

776
00:44:52,520 --> 00:44:56,560
Speaker 1: legislation in the event this passes. So this is a

777
00:44:56,600 --> 00:44:59,399
Speaker 1: real game of musical chairs that could start any day.

778
00:44:59,600 --> 00:45:02,239
Speaker 1: And you think this will be explosive. I think if

779
00:45:02,280 --> 00:45:04,560
Speaker 1: it happens, it's going to be really interesting to watch.

780
00:45:04,800 --> 00:45:08,440
Speaker 1: I have a buddy. So I'm not a fantasy sports guy,

781
00:45:08,560 --> 00:45:12,160
Speaker 1: and I'm too old to be the Nintendo I forgot

782
00:45:12,200 --> 00:45:15,320
Speaker 1: the name of the the game where people were running

783
00:45:15,360 --> 00:45:20,440
Speaker 1: around swiping things in in um Pokemon. I'm too old

784
00:45:20,480 --> 00:45:22,640
Speaker 1: to be a Pokemon ghost sort of guy. But I

785
00:45:22,640 --> 00:45:25,359
Speaker 1: have a buddy. Shout shout out to Lend Parissi, who

786
00:45:25,400 --> 00:45:30,040
Speaker 1: created a company that combined fantasy sports with Pokemon Go.

787
00:45:30,239 --> 00:45:33,600
Speaker 1: He got it patented. They were just funded and essentially,

788
00:45:33,600 --> 00:45:37,680
Speaker 1: when you put your fantasy NFL or basketball team together,

789
00:45:37,719 --> 00:45:40,680
Speaker 1: you run around your city and your's, Oh, there's Lebron

790
00:45:40,800 --> 00:45:43,520
Speaker 1: James and you're swiping him like he's a Pokemon go egg.

791
00:45:43,920 --> 00:45:46,400
Speaker 1: When he told it to me, I said, dude, I

792
00:45:46,440 --> 00:45:49,120
Speaker 1: don't do any of that stuff, And I gotta think

793
00:45:49,200 --> 00:45:51,640
Speaker 1: kids are gonna love that. That just seems like a

794
00:45:51,760 --> 00:45:56,480
Speaker 1: crazy good idea. Um, is this the sort of insanity

795
00:45:56,520 --> 00:45:59,720
Speaker 1: that we're gonna be dealing with? As all these different

796
00:45:59,760 --> 00:46:03,840
Speaker 1: kind steps cross fertilize each other and cross pollinate, you

797
00:46:03,960 --> 00:46:07,000
Speaker 1: end up with just a million new ideas and a

798
00:46:07,000 --> 00:46:11,240
Speaker 1: million new businesses. It's very clear that if from sports,

799
00:46:11,239 --> 00:46:14,759
Speaker 1: which is a big and important business in in the U.

800
00:46:14,920 --> 00:46:18,239
Speaker 1: S and and internationally, that the way in which the

801
00:46:18,280 --> 00:46:22,760
Speaker 1: consumers consume that content has changed dramatically and will continue

802
00:46:22,760 --> 00:46:26,520
Speaker 1: to change. That could be where things like virtual reality

803
00:46:26,560 --> 00:46:29,680
Speaker 1: and augmented reality player role like with your Friends Company

804
00:46:30,040 --> 00:46:32,680
Speaker 1: an AI are gonna apply to this. You think about

805
00:46:33,000 --> 00:46:35,480
Speaker 1: a situation where you're sitting at your house on a

806
00:46:35,480 --> 00:46:38,040
Speaker 1: Friday night, you don't feel like going into the Yankees game,

807
00:46:38,640 --> 00:46:42,759
Speaker 1: but maybe for fifteen dollars, you can be essentially at

808
00:46:42,920 --> 00:46:45,759
Speaker 1: the front row in your with put your headset on,

809
00:46:45,840 --> 00:46:48,600
Speaker 1: and you you're there. The game's going on. You hear

810
00:46:48,600 --> 00:46:51,520
Speaker 1: it all, you see the ball flying by, There's those

811
00:46:51,560 --> 00:46:54,640
Speaker 1: types of things. So there's a lot of ideas that

812
00:46:54,680 --> 00:46:57,319
Speaker 1: are going on. What the consumers actually fall in love with?

813
00:46:57,360 --> 00:47:00,000
Speaker 1: Who knows, I don't know. I have three teenage boys

814
00:47:00,200 --> 00:47:03,440
Speaker 1: and they have never seen addictive behavior like their's right

815
00:47:03,440 --> 00:47:06,439
Speaker 1: now with a game called Fortnite. Of course that's it's

816
00:47:06,520 --> 00:47:10,160
Speaker 1: just and so, but if a year ago somebody had

817
00:47:10,200 --> 00:47:12,320
Speaker 1: shown me that game, I would have said, I don't

818
00:47:12,520 --> 00:47:15,200
Speaker 1: see why somebody would want to do that. They and

819
00:47:15,280 --> 00:47:18,480
Speaker 1: all their friends and everybody I knows friends play it

820
00:47:18,520 --> 00:47:21,520
Speaker 1: all the time. So what consumers actually hang onto I

821
00:47:21,520 --> 00:47:24,279
Speaker 1: don't know, but there is, there has started to be,

822
00:47:24,520 --> 00:47:26,759
Speaker 1: and there will continue to be an enormous amount of

823
00:47:26,800 --> 00:47:31,360
Speaker 1: innovation around the activities around sports because they're so popular,

824
00:47:31,360 --> 00:47:33,799
Speaker 1: because the usage patterns have changed so much. And I

825
00:47:33,840 --> 00:47:37,319
Speaker 1: do think this sixty nine. Nobody knows what the number is,

826
00:47:37,360 --> 00:47:40,279
Speaker 1: but it's a big, big number of billions. That is

827
00:47:40,560 --> 00:47:44,160
Speaker 1: that is bet illegally in the US through off shore.

828
00:47:44,360 --> 00:47:46,680
Speaker 1: It's a lot more than that. It's hundreds of billions

829
00:47:46,680 --> 00:47:49,719
Speaker 1: of dollars. It's an insane, insane amount of money, and

830
00:47:50,040 --> 00:47:54,240
Speaker 1: that very soon could be very soon measured in years

831
00:47:54,280 --> 00:47:59,480
Speaker 1: not days, could be now bet legally, huh that? And

832
00:47:59,520 --> 00:48:02,880
Speaker 1: so every any profits from it, taxes it, except for

833
00:48:02,920 --> 00:48:06,520
Speaker 1: the you know Mark Twain called gambling attacks on the stupid,

834
00:48:06,560 --> 00:48:09,280
Speaker 1: but except for the people on the losing end. There's

835
00:48:09,280 --> 00:48:11,239
Speaker 1: a lot of activity that's going to take place, and

836
00:48:11,280 --> 00:48:14,319
Speaker 1: the people the proponents of this would certainly say, well,

837
00:48:14,360 --> 00:48:16,160
Speaker 1: there are people on the losing end of it. Now,

838
00:48:17,000 --> 00:48:20,480
Speaker 1: sure you're not adding to the number of people. Well,

839
00:48:20,560 --> 00:48:23,399
Speaker 1: you might be attracting more people once it comes out

840
00:48:23,440 --> 00:48:27,080
Speaker 1: from the black market. That's certainly a reasonable guess. Certainly

841
00:48:27,120 --> 00:48:30,839
Speaker 1: could be. I remember having a conversation with somebody that's

842
00:48:30,840 --> 00:48:33,520
Speaker 1: involved in one of the operators in Europe, a good

843
00:48:33,520 --> 00:48:35,160
Speaker 1: friend of mine who actually lives in New York here,

844
00:48:35,320 --> 00:48:38,080
Speaker 1: and he said, you know what's interesting is he said,

845
00:48:38,080 --> 00:48:42,080
Speaker 1: when we have a tennis match in Europe where the

846
00:48:42,200 --> 00:48:46,640
Speaker 1: number hundred player beats the number three player, we actually

847
00:48:46,680 --> 00:48:49,520
Speaker 1: go to the logs and see who bet on what when,

848
00:48:49,560 --> 00:48:52,440
Speaker 1: and if there's some unusual activity, if that happens here

849
00:48:52,440 --> 00:48:53,799
Speaker 1: in the U s what do you how do you

850
00:48:53,840 --> 00:48:56,960
Speaker 1: find any data? But what you actually don't. It's a

851
00:48:57,000 --> 00:49:00,680
Speaker 1: way to keep the sport clean and you know they're

852
00:49:00,960 --> 00:49:05,800
Speaker 1: currently enough twelve step programs UM certainly for for angry

853
00:49:05,840 --> 00:49:08,279
Speaker 1: birds and candy crush that if it gets to be

854
00:49:08,320 --> 00:49:10,440
Speaker 1: a problem someone I don't mean to make loud of this.

855
00:49:10,520 --> 00:49:14,040
Speaker 1: I know they're people who have issues with it, but UM,

856
00:49:14,080 --> 00:49:18,120
Speaker 1: it's fascinating to to see what takes place. So so

857
00:49:18,160 --> 00:49:21,080
Speaker 1: that's one area sports, Give me one more area and

858
00:49:21,080 --> 00:49:24,200
Speaker 1: then we'll jump to our favorite UM questions. What else

859
00:49:24,200 --> 00:49:27,839
Speaker 1: do you see as the next area that perhaps people

860
00:49:27,880 --> 00:49:32,400
Speaker 1: aren't paying attention to? We could we really like a

861
00:49:32,440 --> 00:49:38,760
Speaker 1: lot of the areas of UM in fintech and infint tech.

862
00:49:39,000 --> 00:49:42,479
Speaker 1: Fintech Yeah, oh, in within finte I thought you meant

863
00:49:42,520 --> 00:49:45,319
Speaker 1: like newborn technology, and like, what what are we doing

864
00:49:45,400 --> 00:49:49,640
Speaker 1: with no, not infantech, in infant infant technology. So give

865
00:49:49,719 --> 00:49:51,680
Speaker 1: us a couple of examples. So a couple of examples

866
00:49:51,760 --> 00:49:55,359
Speaker 1: is our most recent investment in in Tala Tala. As

867
00:49:55,360 --> 00:49:58,319
Speaker 1: I mentioned what what, So, what we like to see

868
00:49:58,440 --> 00:50:01,080
Speaker 1: is what are they doing now that has changed the

869
00:50:01,120 --> 00:50:04,319
Speaker 1: fundamental value proposition of what is being offered? So as

870
00:50:04,320 --> 00:50:08,680
Speaker 1: an example of this company is taking information that exists

871
00:50:08,680 --> 00:50:13,240
Speaker 1: on somebody's phone for people that are jet almost almost

872
00:50:13,560 --> 00:50:16,319
Speaker 1: universally do not have a bank account, and they're making

873
00:50:16,320 --> 00:50:19,680
Speaker 1: a credit decision based on that activity. Just so you

874
00:50:19,719 --> 00:50:22,040
Speaker 1: give them access to your phone and they determine based

875
00:50:22,040 --> 00:50:25,160
Speaker 1: on what you're doing with your aliate, can you give

876
00:50:25,200 --> 00:50:27,840
Speaker 1: me access to these five things? They say, yes, please,

877
00:50:28,000 --> 00:50:30,400
Speaker 1: I would like a loan of X. They say okay,

878
00:50:30,440 --> 00:50:33,640
Speaker 1: based on that I've correlated that activity with other people,

879
00:50:34,120 --> 00:50:36,000
Speaker 1: and this means that you're good or not a good

880
00:50:36,000 --> 00:50:39,480
Speaker 1: credit risk. I actually read something about an attempt to

881
00:50:39,520 --> 00:50:42,799
Speaker 1: create a credit score based on your social media activity?

882
00:50:42,840 --> 00:50:45,759
Speaker 1: Anything along? Is that similar to this or or is

883
00:50:45,800 --> 00:50:48,399
Speaker 1: that part of that part of the same concept, which

884
00:50:48,480 --> 00:50:51,040
Speaker 1: is how can you use And it informs a lot

885
00:50:51,080 --> 00:50:54,000
Speaker 1: of the investment decisions we make in the companies that

886
00:50:54,040 --> 00:50:57,040
Speaker 1: we like a lot, which is are you using the

887
00:50:57,160 --> 00:51:00,320
Speaker 1: availability of data that either didn't exist previous slee or

888
00:51:00,440 --> 00:51:03,240
Speaker 1: wasn't it didn't exist at the pace at which exists

889
00:51:03,280 --> 00:51:06,440
Speaker 1: now to do something different. Um. We have a company

890
00:51:06,520 --> 00:51:09,120
Speaker 1: and Chicago that we talked about a couple of times, Uptake,

891
00:51:09,160 --> 00:51:13,480
Speaker 1: which is using data from sensors on industrial equipment to

892
00:51:13,600 --> 00:51:17,359
Speaker 1: do things like tell you that the tractor that's going

893
00:51:17,400 --> 00:51:20,480
Speaker 1: across the farm in Iowa is just about ready to

894
00:51:20,600 --> 00:51:22,680
Speaker 1: have a problem, you better go change that oil or

895
00:51:22,680 --> 00:51:27,600
Speaker 1: you and so things like that. Those are amazing opportunities

896
00:51:27,600 --> 00:51:30,080
Speaker 1: within industries that previously didn't have a lot of technology.

897
00:51:30,120 --> 00:51:31,960
Speaker 1: Now there's data, but somebody has to do something with

898
00:51:32,040 --> 00:51:39,360
Speaker 1: industrial self diagnostic equipment correct that. That's just wild um

899
00:51:39,400 --> 00:51:44,000
Speaker 1: fascinating and and Venmo type stuff where you're you're swapping

900
00:51:44,040 --> 00:51:46,640
Speaker 1: money back and forth without a bank in the middle.

901
00:51:47,160 --> 00:51:50,720
Speaker 1: Is that really gonna Yeah, that's happening, not counting crypto

902
00:51:51,080 --> 00:51:55,839
Speaker 1: just talking on an app that theoretically is hackable. Are

903
00:51:55,840 --> 00:51:58,640
Speaker 1: people gonna be able to trust that? Well? That that's

904
00:51:58,680 --> 00:52:00,439
Speaker 1: the question. I think there's a lot out of those

905
00:52:00,480 --> 00:52:03,000
Speaker 1: activities that happen and then there's an event, and then

906
00:52:03,080 --> 00:52:06,480
Speaker 1: there's can you trust them? Can you not? There's obviously

907
00:52:06,480 --> 00:52:12,840
Speaker 1: there is no question a growing concern appropriately so around

908
00:52:12,880 --> 00:52:16,680
Speaker 1: where does my data? Said? Who has access to it? Um?

909
00:52:16,719 --> 00:52:19,080
Speaker 1: How do I protect against that? And part of that

910
00:52:19,200 --> 00:52:20,800
Speaker 1: is an operational thing, and part of that is a

911
00:52:20,840 --> 00:52:23,560
Speaker 1: cybersecurity thing. Right. There's not too long ago a Wall

912
00:52:23,600 --> 00:52:27,560
Speaker 1: Street Journal article about these crypto billionaires who have created

913
00:52:27,600 --> 00:52:32,360
Speaker 1: these bunkers for the secure storage of their codes and

914
00:52:32,600 --> 00:52:35,880
Speaker 1: drives and things like that. Because legitimately, these things can

915
00:52:35,920 --> 00:52:39,120
Speaker 1: get stolen and they just have to hope there's no

916
00:52:39,280 --> 00:52:43,279
Speaker 1: e M electromagnetic pulse that wipes out the hard drive.

917
00:52:43,360 --> 00:52:46,880
Speaker 1: But other than that, UM, that that's fascinating, all right,

918
00:52:46,880 --> 00:52:50,000
Speaker 1: So let's jump to our favorite questions. I asked these

919
00:52:50,040 --> 00:52:52,120
Speaker 1: of all our guests, and let's jump right into this.

920
00:52:52,600 --> 00:52:56,160
Speaker 1: Tell us the most important thing people don't know about

921
00:52:56,360 --> 00:53:01,799
Speaker 1: you or your background. The most important thing people don't

922
00:53:01,800 --> 00:53:04,040
Speaker 1: know about me that where they would be surprised to know,

923
00:53:04,200 --> 00:53:07,040
Speaker 1: perhaps given the nature of what I do. And so

924
00:53:07,080 --> 00:53:10,239
Speaker 1: I'm a pretty energetic guy, and I travel a lot,

925
00:53:10,280 --> 00:53:11,759
Speaker 1: and I see a lot of companies, and I sit

926
00:53:11,800 --> 00:53:13,319
Speaker 1: a lot of boards, and I do a lot of

927
00:53:13,360 --> 00:53:16,200
Speaker 1: outwardly facing things, and I'm a pretty introverted person that

928
00:53:16,239 --> 00:53:19,040
Speaker 1: I most people would not expect. I would not have

929
00:53:19,040 --> 00:53:20,799
Speaker 1: guessed that if I had to, If I had to

930
00:53:20,840 --> 00:53:25,200
Speaker 1: make a guess, who were some of your early mentors. Well,

931
00:53:25,239 --> 00:53:30,160
Speaker 1: I've been amazingly fortunate that. Um, I've had so many

932
00:53:30,200 --> 00:53:33,560
Speaker 1: people in my career that have taken a real care

933
00:53:33,640 --> 00:53:35,759
Speaker 1: about my career and me as a person. And so

934
00:53:35,880 --> 00:53:38,200
Speaker 1: there's a long list of them. But at you know,

935
00:53:38,239 --> 00:53:42,160
Speaker 1: I start at Deloitte and that was really um folks

936
00:53:42,200 --> 00:53:48,040
Speaker 1: like Steve Richards and Bill Platt and Susan Riyo and

937
00:53:48,880 --> 00:53:51,840
Speaker 1: Give Hammond and others. But there each one of them.

938
00:53:51,880 --> 00:53:54,480
Speaker 1: I still to this day bring something to the table

939
00:53:54,560 --> 00:53:58,240
Speaker 1: from them at soft Bank. And probably my best mentor

940
00:53:58,360 --> 00:54:01,080
Speaker 1: and will be forever. My best mentor is Ron Fisher,

941
00:54:01,080 --> 00:54:03,920
Speaker 1: who's still at SoftBank, who I had the pleasure of

942
00:54:03,920 --> 00:54:08,160
Speaker 1: working with for for twenty years. Um. I got to

943
00:54:08,760 --> 00:54:11,560
Speaker 1: Brad Feld was a mentor way back. He started at

944
00:54:11,560 --> 00:54:13,560
Speaker 1: SoftBank way back when, and he and I continue to

945
00:54:13,560 --> 00:54:17,319
Speaker 1: be friends and and he's currently at a Foundry boundary group.

946
00:54:17,320 --> 00:54:19,640
Speaker 1: He's the you know, really the managing partner at Foundry.

947
00:54:19,680 --> 00:54:22,279
Speaker 1: They've been hugely successful and he and I are working

948
00:54:22,280 --> 00:54:25,200
Speaker 1: on something together now. And you know, one of these

949
00:54:25,239 --> 00:54:31,920
Speaker 1: guys that's just such an honest and straightforward and involved guy. Um.

950
00:54:31,960 --> 00:54:34,200
Speaker 1: I've had the pleasure of working with him and learned

951
00:54:34,200 --> 00:54:36,640
Speaker 1: a ton from him. Although he wasn't a day to

952
00:54:36,719 --> 00:54:41,239
Speaker 1: day mentor, having exposure to Massa over the years has

953
00:54:41,280 --> 00:54:44,000
Speaker 1: certainly influenced me in a great way. So I've been

954
00:54:44,080 --> 00:54:46,279
Speaker 1: very very fortunate. I've had people that you know, and

955
00:54:46,320 --> 00:54:49,280
Speaker 1: now I have ted Leonsis and Steve case who who

956
00:54:49,680 --> 00:54:52,000
Speaker 1: I learned from every day. I think one of the

957
00:54:52,080 --> 00:54:55,600
Speaker 1: things that UM is so great about this business that

958
00:54:55,640 --> 00:54:58,240
Speaker 1: we're in is that I get exposed to brilliant people

959
00:54:58,320 --> 00:55:00,239
Speaker 1: every day that are either running these company, is on

960
00:55:00,280 --> 00:55:04,120
Speaker 1: the board, people that I work with, And so I

961
00:55:04,200 --> 00:55:07,640
Speaker 1: literally feel like I learned something new every day. And Uh,

962
00:55:07,719 --> 00:55:12,440
Speaker 1: let's talk about venture investors. Who has influenced your approach

963
00:55:12,640 --> 00:55:16,120
Speaker 1: to making these investments? Yeah, so I'd say Massa has

964
00:55:16,160 --> 00:55:20,319
Speaker 1: influenced my approach Originally his and the influence there was

965
00:55:20,680 --> 00:55:26,560
Speaker 1: his boldness, his willing to take enormous risk against the grain. Uh.

966
00:55:26,600 --> 00:55:30,080
Speaker 1: He he was by you know, he was buying you know,

967
00:55:30,160 --> 00:55:35,440
Speaker 1: mobile companies when that wasn't the right the thing to

968
00:55:35,520 --> 00:55:38,200
Speaker 1: do out of favor if you will. Um, he has

969
00:55:38,440 --> 00:55:42,080
Speaker 1: very you know, he raised a hundred billion dollar fund

970
00:55:42,880 --> 00:55:45,520
Speaker 1: when everyone is saying, jeez, we must be at the

971
00:55:45,640 --> 00:55:48,760
Speaker 1: end of a cycle, right, So this is a person

972
00:55:49,080 --> 00:55:53,959
Speaker 1: that his boldness UM is really inspirational on some level.

973
00:55:54,320 --> 00:55:57,000
Speaker 1: As I mentioned earlier, Brad Feld is somebody that's influenced

974
00:55:57,000 --> 00:56:03,160
Speaker 1: my investing style. He his is very much understand the

975
00:56:03,160 --> 00:56:06,640
Speaker 1: the company, the product of people, walk the hallways, see

976
00:56:06,680 --> 00:56:09,920
Speaker 1: where things are going. Another guy that influenced my investment

977
00:56:10,040 --> 00:56:12,640
Speaker 1: style that's here in New York as a guy named

978
00:56:12,800 --> 00:56:15,600
Speaker 1: actually two people one uh Eric Hippo who runs lair

979
00:56:15,640 --> 00:56:19,840
Speaker 1: Ho Pope Adventures, who um is sort of the ultimate

980
00:56:20,280 --> 00:56:23,400
Speaker 1: uh professional, you know. He everything starts on time and

981
00:56:23,520 --> 00:56:26,359
Speaker 1: ends on time, and decisions get made and you don't

982
00:56:26,360 --> 00:56:29,960
Speaker 1: second guess your decisions, and you and you put you know,

983
00:56:30,000 --> 00:56:33,560
Speaker 1: your very uh matter of fact and non emotional businesses.

984
00:56:33,960 --> 00:56:35,799
Speaker 1: You have to make decisions, and you have to move on,

985
00:56:35,840 --> 00:56:38,560
Speaker 1: and you have to go to the next one. I've admired,

986
00:56:38,600 --> 00:56:41,400
Speaker 1: I've admired him a lot. I've admired, uh you know,

987
00:56:41,480 --> 00:56:43,239
Speaker 1: I've worked with and he still remains a great friend.

988
00:56:43,239 --> 00:56:45,680
Speaker 1: A guy who just recently was the CEO at Forbes,

989
00:56:45,760 --> 00:56:49,640
Speaker 1: Mike Perlis, who's a great friend of mine, who really

990
00:56:49,760 --> 00:56:52,040
Speaker 1: is a real people person, you know. He is the

991
00:56:52,120 --> 00:56:54,840
Speaker 1: guy that walks the hallways and says, this guy and

992
00:56:54,840 --> 00:56:56,600
Speaker 1: this guy don't seem to be getting along, and this

993
00:56:56,600 --> 00:56:59,120
Speaker 1: gal is having a problem here, and how can I

994
00:56:59,200 --> 00:57:02,120
Speaker 1: engage myself off and help this company? And he's all

995
00:57:02,160 --> 00:57:05,040
Speaker 1: about leadership and clear vision and direction. And so from

996
00:57:05,040 --> 00:57:07,640
Speaker 1: each one of these persons, I've learned something different. Let's

997
00:57:07,640 --> 00:57:10,400
Speaker 1: talk about books. Tell us about some of your favorite books,

998
00:57:10,440 --> 00:57:14,920
Speaker 1: be they finance or technology or not fiction nonfiction. What

999
00:57:14,960 --> 00:57:18,760
Speaker 1: do you read? What do you enjoying? Yeah, sure so, Uh.

1000
00:57:18,840 --> 00:57:22,240
Speaker 1: I actually mostly don't read about finance and technology because

1001
00:57:22,240 --> 00:57:26,240
Speaker 1: I live it every day. But and time is short.

1002
00:57:26,280 --> 00:57:27,760
Speaker 1: But I actually get to read a lot because I

1003
00:57:27,800 --> 00:57:31,120
Speaker 1: travel a lot, so I read. I think I've read

1004
00:57:31,160 --> 00:57:33,200
Speaker 1: every John Grisham book and I love them because they're

1005
00:57:33,240 --> 00:57:35,120
Speaker 1: fun and they're easy, and you can read them in

1006
00:57:35,160 --> 00:57:37,320
Speaker 1: a couple and well along flight or two and it's

1007
00:57:37,360 --> 00:57:40,160
Speaker 1: other great. Um, I've read a couple recently that I

1008
00:57:40,160 --> 00:57:42,919
Speaker 1: really like. One is that I've probably many people have read,

1009
00:57:42,960 --> 00:57:45,000
Speaker 1: which is The Boys on the Boat. I like that

1010
00:57:45,040 --> 00:57:46,920
Speaker 1: because I'm a team guy. I'm a sports guy. I

1011
00:57:47,000 --> 00:57:50,720
Speaker 1: love I love how people can overcome adversity and gang

1012
00:57:50,760 --> 00:57:54,800
Speaker 1: together and accomplish something. And I get, you know, goose

1013
00:57:54,840 --> 00:57:57,800
Speaker 1: bumps on my back every time I hear those stories.

1014
00:57:57,840 --> 00:58:00,360
Speaker 1: And I read about success and things like that. So

1015
00:58:00,400 --> 00:58:03,960
Speaker 1: that that's a book that I've recently reread and enjoy it.

1016
00:58:04,000 --> 00:58:06,760
Speaker 1: I'm also reading. I just finished a book, uh that

1017
00:58:06,840 --> 00:58:10,720
Speaker 1: I that has a real influence on me called being mortal,

1018
00:58:11,280 --> 00:58:13,960
Speaker 1: which is about really it's a it's a book written

1019
00:58:13,960 --> 00:58:18,960
Speaker 1: by a doctor about the way, frankly, that we may

1020
00:58:19,000 --> 00:58:22,200
Speaker 1: have screwed up the aging process. We're treating the aging

1021
00:58:22,240 --> 00:58:25,320
Speaker 1: process as if it's a disease, not a condition, and

1022
00:58:25,520 --> 00:58:28,400
Speaker 1: it's fascinating. So I like reading all kinds of different things.

1023
00:58:28,480 --> 00:58:31,680
Speaker 1: I read something about that book, and if I'm remembering

1024
00:58:31,680 --> 00:58:35,960
Speaker 1: it correctly, part of the book is doctors die differently

1025
00:58:36,080 --> 00:58:40,000
Speaker 1: than lay people do because they understand what we do wrong.

1026
00:58:40,080 --> 00:58:42,400
Speaker 1: And I'm recalling the right one. It may be, But

1027
00:58:42,680 --> 00:58:45,000
Speaker 1: really the point of the thing of the of the

1028
00:58:45,080 --> 00:58:48,080
Speaker 1: article was that or the book was that we've made

1029
00:58:48,120 --> 00:58:51,160
Speaker 1: so many advancements in medicine that has allowed us to

1030
00:58:51,280 --> 00:58:57,640
Speaker 1: treat things, and we have. Therefore, when somebody gets older

1031
00:58:57,680 --> 00:59:00,840
Speaker 1: and they have a condition, we read them as if

1032
00:59:00,840 --> 00:59:02,920
Speaker 1: they're twenty five years old and they might have seventy

1033
00:59:03,040 --> 00:59:06,080
Speaker 1: more years to live. Doesn't make and what we end

1034
00:59:06,160 --> 00:59:08,760
Speaker 1: up doing as a society, as we end up making

1035
00:59:08,800 --> 00:59:11,920
Speaker 1: the last five years of somebody's life probably miserable, where

1036
00:59:11,920 --> 00:59:14,400
Speaker 1: they're going through surgeries and all kinds of other things,

1037
00:59:14,640 --> 00:59:17,800
Speaker 1: the likelihood of materially extending their life is not long

1038
00:59:18,040 --> 00:59:20,960
Speaker 1: and you spend enormous resources doing it, something like eight

1039
00:59:21,080 --> 00:59:24,040
Speaker 1: percent of the healthcare costs or in incurred in the

1040
00:59:24,120 --> 00:59:27,520
Speaker 1: last twenty of people's lives. And so there's all these things,

1041
00:59:27,560 --> 00:59:30,160
Speaker 1: and and so instead of that, what he proposes is

1042
00:59:30,200 --> 00:59:33,800
Speaker 1: something more along the lines of what hospice and others do,

1043
00:59:33,840 --> 00:59:35,520
Speaker 1: which is, say, what's important to you and how do

1044
00:59:35,560 --> 00:59:37,840
Speaker 1: I create an environment for you to enjoy as best

1045
00:59:37,880 --> 00:59:41,919
Speaker 1: you can your last remaining piece of your profound We

1046
00:59:41,920 --> 00:59:45,480
Speaker 1: we talked about what what excites you? Tell us what

1047
00:59:45,680 --> 00:59:49,400
Speaker 1: changes you're looking forward uh to the world of of

1048
00:59:49,520 --> 00:59:53,080
Speaker 1: venture investing in startup? What what are How is the

1049
00:59:53,120 --> 00:59:58,640
Speaker 1: industry itself shifting into the future. Yeah, and we've talked

1050
00:59:58,640 --> 01:00:01,280
Speaker 1: about a number of it. The company these are are

1051
01:00:01,320 --> 01:00:05,920
Speaker 1: there are staying private longer. The holding periods therefore are longer.

1052
01:00:06,520 --> 01:00:10,480
Speaker 1: So the idea of investing today and returning capital in

1053
01:00:10,520 --> 01:00:16,080
Speaker 1: a year or two is is much different. The size

1054
01:00:16,320 --> 01:00:20,240
Speaker 1: of the funds seems to be extending. I think partly

1055
01:00:20,520 --> 01:00:23,800
Speaker 1: due to that, which is that people are saying, geez,

1056
01:00:23,840 --> 01:00:25,680
Speaker 1: I have to be able to build a firm to

1057
01:00:25,880 --> 01:00:30,560
Speaker 1: support a company, particularly my best ones from soup to nuts.

1058
01:00:30,560 --> 01:00:32,200
Speaker 1: I don't want to miss out I've talked to a

1059
01:00:32,280 --> 01:00:35,480
Speaker 1: number of early stage investors who have now started to

1060
01:00:35,520 --> 01:00:38,840
Speaker 1: create follow on investment funds because some of their best

1061
01:00:38,880 --> 01:00:41,120
Speaker 1: companies that otherwise would have been private or sold are

1062
01:00:41,120 --> 01:00:43,920
Speaker 1: now still private companies raising money and they want to

1063
01:00:43,960 --> 01:00:47,000
Speaker 1: participate in those, but they don't fit within the constructs

1064
01:00:47,040 --> 01:00:50,000
Speaker 1: of their early stage small fund. They they are now

1065
01:00:50,080 --> 01:00:53,200
Speaker 1: adding different people call it different things, a select fund

1066
01:00:53,280 --> 01:00:55,240
Speaker 1: or a follow on fund or something like that. So

1067
01:00:55,280 --> 01:00:57,960
Speaker 1: I think that the things that are changing, or how

1068
01:00:58,000 --> 01:01:00,680
Speaker 1: do you serve the needs of the company in a

1069
01:01:00,720 --> 01:01:03,800
Speaker 1: better way, given the changing landscape that we exist in.

1070
01:01:03,960 --> 01:01:05,760
Speaker 1: A lot of it is international too. I think that

1071
01:01:05,760 --> 01:01:07,520
Speaker 1: will be another thing that will see more of, which

1072
01:01:07,560 --> 01:01:10,640
Speaker 1: is more firms. Just as we've talked about earlier, more

1073
01:01:10,680 --> 01:01:12,240
Speaker 1: of the East Coast firms they do have a West

1074
01:01:12,280 --> 01:01:15,280
Speaker 1: Coast presence, and likewise, I actually think more of the

1075
01:01:15,360 --> 01:01:18,840
Speaker 1: U S firms will have an international presence over time, Europe, Asia,

1076
01:01:19,480 --> 01:01:22,560
Speaker 1: the least, ETCETERA. Tell us about a time you failed

1077
01:01:22,760 --> 01:01:26,840
Speaker 1: and what you learned from the experience. Well, I fail

1078
01:01:26,880 --> 01:01:30,120
Speaker 1: every day in something particularly and I'm reminded of that

1079
01:01:30,200 --> 01:01:33,360
Speaker 1: by my three teenage sons. I think I actually fail

1080
01:01:33,440 --> 01:01:37,040
Speaker 1: more in their eyes every as they get older, although

1081
01:01:37,080 --> 01:01:39,160
Speaker 1: I think my older one that's eighteen now is starting

1082
01:01:39,240 --> 01:01:41,000
Speaker 1: to come out of that phase. I think he's realizing

1083
01:01:41,000 --> 01:01:42,440
Speaker 1: that I'm not quite as dumb as he might have

1084
01:01:42,440 --> 01:01:44,880
Speaker 1: thought a year or two ago. But I noticed that

1085
01:01:44,960 --> 01:01:47,200
Speaker 1: the older I got, the smart on my parents got.

1086
01:01:47,400 --> 01:01:51,240
Speaker 1: So there's some correlations. It is an interesting correlation. The

1087
01:01:51,280 --> 01:01:56,040
Speaker 1: topic for another one perhaps, UM. I'd say the two

1088
01:01:56,120 --> 01:01:58,240
Speaker 1: or three times that I've failed in terms of an

1089
01:01:58,240 --> 01:02:02,640
Speaker 1: investment bad is when and what I've learned about it

1090
01:02:02,680 --> 01:02:06,520
Speaker 1: is really the value of people's ethics and people's integrity.

1091
01:02:07,080 --> 01:02:10,400
Speaker 1: And so in a couple of different situations where we've

1092
01:02:11,040 --> 01:02:15,360
Speaker 1: where we've you know, where I have known that the

1093
01:02:15,400 --> 01:02:18,320
Speaker 1: person that we were dealing with was something less than

1094
01:02:18,320 --> 01:02:21,000
Speaker 1: the type of quality individual that I want to be

1095
01:02:21,040 --> 01:02:24,520
Speaker 1: associated with. I'm sort of over life on things like that,

1096
01:02:24,680 --> 01:02:27,479
Speaker 1: and so that's happened to me twice where I sort

1097
01:02:27,480 --> 01:02:30,840
Speaker 1: of knew that the person wasn't gonna be the kind

1098
01:02:30,880 --> 01:02:34,240
Speaker 1: of person I really wanted to work with, but you know,

1099
01:02:34,360 --> 01:02:37,360
Speaker 1: the opportunity was exciting and the progress in the business

1100
01:02:37,440 --> 01:02:40,360
Speaker 1: was great, and in both cases it's come to bite

1101
01:02:40,400 --> 01:02:43,120
Speaker 1: me right back in the behind. What do you do

1102
01:02:43,200 --> 01:02:45,040
Speaker 1: for fun when you're not in the office, What do

1103
01:02:45,040 --> 01:02:48,040
Speaker 1: you do to kick back and relax. Well, I mentioned

1104
01:02:48,080 --> 01:02:50,520
Speaker 1: my three sons. So I have three sons. Two of

1105
01:02:50,560 --> 01:02:53,520
Speaker 1: them are in high school, so I love to and

1106
01:02:53,560 --> 01:02:55,240
Speaker 1: then I have another one in seventh grade. I love

1107
01:02:55,280 --> 01:02:56,680
Speaker 1: to spend time with them. I love to go to

1108
01:02:56,720 --> 01:02:59,520
Speaker 1: their sporting events. I love UH. For many years I

1109
01:02:59,560 --> 01:03:02,040
Speaker 1: was the coach of their hockey team, so I enjoy

1110
01:03:02,400 --> 01:03:06,360
Speaker 1: contributing and participating with the kids and their friends and

1111
01:03:06,400 --> 01:03:08,120
Speaker 1: doing that kind of stuff. I like to work out,

1112
01:03:08,200 --> 01:03:11,280
Speaker 1: that's sort of I find, like we talked about earlier

1113
01:03:11,280 --> 01:03:14,120
Speaker 1: with sleep. The other thing that correlates to happiness for me,

1114
01:03:14,600 --> 01:03:16,640
Speaker 1: UH seems to be if I can get a workout in,

1115
01:03:16,720 --> 01:03:18,440
Speaker 1: so I try. I love to work out. I love

1116
01:03:18,480 --> 01:03:21,000
Speaker 1: to be outside. I love to be I love to

1117
01:03:21,080 --> 01:03:22,560
Speaker 1: fish and that kind of thing. But I really like

1118
01:03:22,600 --> 01:03:25,680
Speaker 1: spending time with my family. If a millennial or a

1119
01:03:25,800 --> 01:03:28,400
Speaker 1: recent college grad came up to you and said they

1120
01:03:28,400 --> 01:03:32,320
Speaker 1: were interested in a career in venture investing, what sort

1121
01:03:32,360 --> 01:03:34,440
Speaker 1: of career advice would you give them. It's it's a

1122
01:03:34,560 --> 01:03:36,680
Speaker 1: question that I get, as you might imagine a lot

1123
01:03:36,760 --> 01:03:40,120
Speaker 1: from millennials and recent college grads. Friends of friends and

1124
01:03:40,120 --> 01:03:44,400
Speaker 1: and others. The the good and bad news. I think

1125
01:03:44,480 --> 01:03:47,800
Speaker 1: on that particular question is the honest answer is there's

1126
01:03:47,840 --> 01:03:52,440
Speaker 1: no clear easy path into the venture community. Uh, some

1127
01:03:52,520 --> 01:03:55,560
Speaker 1: folks have. As you pointed out earlier, my background is

1128
01:03:55,600 --> 01:03:57,680
Speaker 1: not sort of classic out of that there. So there's

1129
01:03:57,680 --> 01:04:01,000
Speaker 1: people that have come from legal backgrounds and accounting backgrounds,

1130
01:04:01,000 --> 01:04:03,360
Speaker 1: and they've come from product backgrounds, and they've come from

1131
01:04:03,640 --> 01:04:06,960
Speaker 1: banking backgrounds. So there really is a collection of different

1132
01:04:06,960 --> 01:04:08,520
Speaker 1: types of people that have come through it. What I

1133
01:04:08,560 --> 01:04:10,520
Speaker 1: would advise what I do advise them to do is

1134
01:04:10,560 --> 01:04:14,640
Speaker 1: if if you're passionate about startups, then get involved in one.

1135
01:04:15,200 --> 01:04:20,280
Speaker 1: And that could be as um small as volunteering if

1136
01:04:20,320 --> 01:04:22,400
Speaker 1: you will are helping out at the local tech stars

1137
01:04:22,480 --> 01:04:25,720
Speaker 1: or something like that, or it could be maybe on

1138
01:04:25,960 --> 01:04:27,840
Speaker 1: nights and weekends you're helping your friend that's doing and

1139
01:04:27,800 --> 01:04:30,080
Speaker 1: then they's saying you have not everybody is ready to

1140
01:04:30,200 --> 01:04:32,600
Speaker 1: say I'm gonna move to Silicon value, and do you

1141
01:04:32,600 --> 01:04:34,000
Speaker 1: think if that's what you want to do, go do it.

1142
01:04:34,120 --> 01:04:36,920
Speaker 1: So it's not it's not just go to a big school,

1143
01:04:37,040 --> 01:04:39,960
Speaker 1: get a degree in finance and engineering and you're ready.

1144
01:04:40,400 --> 01:04:42,360
Speaker 1: There's a lot of different paths, and they all can

1145
01:04:42,440 --> 01:04:45,760
Speaker 1: lead to different things. And I think some firms obviously

1146
01:04:45,800 --> 01:04:49,960
Speaker 1: have more of a technology product engineering bend some people.

1147
01:04:50,080 --> 01:04:54,240
Speaker 1: Some firms have more of a investment banking bend. Some firms.

1148
01:04:54,280 --> 01:04:56,120
Speaker 1: I think the best ones have a mix of other

1149
01:04:56,240 --> 01:04:59,000
Speaker 1: Some people have more operators. I think the best firms

1150
01:04:59,000 --> 01:05:02,120
Speaker 1: really as we talked about earlier, with diversity, diversity of experiences,

1151
01:05:02,160 --> 01:05:04,960
Speaker 1: it's important, but it's it's a it's a tricky path

1152
01:05:05,000 --> 01:05:07,280
Speaker 1: because there isn't a clean one where you can say,

1153
01:05:07,480 --> 01:05:10,240
Speaker 1: go get this degree and get this job, and you'll

1154
01:05:10,320 --> 01:05:13,120
Speaker 1: end up at this place. It's not my experiences, it's

1155
01:05:13,120 --> 01:05:15,400
Speaker 1: not quite that. It's not like there are thousands and

1156
01:05:15,480 --> 01:05:18,400
Speaker 1: thousands of vcs and millions of open slots. It's a

1157
01:05:18,440 --> 01:05:22,880
Speaker 1: pretty small that's all community too. And and our final question,

1158
01:05:23,280 --> 01:05:25,680
Speaker 1: what do you know about the world of venture investing

1159
01:05:25,760 --> 01:05:28,520
Speaker 1: today that you wish you knew twenty thirty years ago

1160
01:05:28,520 --> 01:05:31,959
Speaker 1: when you were first getting started. I guess the easy

1161
01:05:32,000 --> 01:05:37,160
Speaker 1: answer would be Amazon, Facebook, Google, Right, Well, that's that's hindsight.

1162
01:05:37,280 --> 01:05:40,680
Speaker 1: What should you have bought thirty years ago? But but

1163
01:05:40,760 --> 01:05:44,040
Speaker 1: what did you learn from None? Was Amazon an option?

1164
01:05:44,080 --> 01:05:46,840
Speaker 1: Did you say pass by the way, there was a

1165
01:05:46,880 --> 01:05:50,440
Speaker 1: thing that I started noticing not too long ago, maybe

1166
01:05:50,440 --> 01:05:53,400
Speaker 1: it was long ago, that a lot of the websites

1167
01:05:53,440 --> 01:05:57,720
Speaker 1: of various venture firms list these are all the companies

1168
01:05:57,760 --> 01:06:01,120
Speaker 1: we passed on, and it's just an sane list of

1169
01:06:01,160 --> 01:06:05,479
Speaker 1: the great we passed on Apple, eBay, Amazon, Why why

1170
01:06:05,800 --> 01:06:08,760
Speaker 1: share that? So it's a little self deprecating. But also

1171
01:06:08,880 --> 01:06:14,240
Speaker 1: they probably don't list here are the other fifteen times

1172
01:06:14,280 --> 01:06:16,280
Speaker 1: that list that we passed on that somebody else thought

1173
01:06:16,280 --> 01:06:19,120
Speaker 1: was a great idea that failed. Right, So there's an

1174
01:06:19,160 --> 01:06:21,360
Speaker 1: equal number of those. So sometimes the best deals, as

1175
01:06:21,400 --> 01:06:22,760
Speaker 1: they say, they are the ones that you don't do.

1176
01:06:23,000 --> 01:06:25,680
Speaker 1: So let me let me bring it back to what

1177
01:06:26,640 --> 01:06:29,640
Speaker 1: years ago stands out what would have been really helpful

1178
01:06:29,680 --> 01:06:33,480
Speaker 1: to know years ago. Not a crystal ball about the future,

1179
01:06:33,520 --> 01:06:35,680
Speaker 1: but part of your process. So one of the things

1180
01:06:35,720 --> 01:06:39,600
Speaker 1: that I think I have learned over time is that

1181
01:06:40,600 --> 01:06:44,320
Speaker 1: people don't change right as much as they would like to.

1182
01:06:44,400 --> 01:06:48,120
Speaker 1: People talk about changing, but it's hard. It's changing people

1183
01:06:48,240 --> 01:06:51,440
Speaker 1: is very very hard. Not people you can move deck

1184
01:06:51,520 --> 01:06:55,080
Speaker 1: chairs around, but the fundamental things that drive people to

1185
01:06:55,920 --> 01:06:59,400
Speaker 1: behave a certain way very hard to change. So don't

1186
01:06:59,400 --> 01:07:02,000
Speaker 1: waste a lot of time trying to do that. Secondly,

1187
01:07:02,120 --> 01:07:05,560
Speaker 1: is that uh failure of these companies that are doing

1188
01:07:05,600 --> 01:07:10,120
Speaker 1: this really really hard stuff is okay, they can adjust,

1189
01:07:10,120 --> 01:07:13,240
Speaker 1: they can do things that I think I was, like

1190
01:07:13,360 --> 01:07:16,480
Speaker 1: most people naive that the business plan is the one

1191
01:07:16,560 --> 01:07:18,919
Speaker 1: that they should go execute on. You spend all this time,

1192
01:07:18,960 --> 01:07:20,880
Speaker 1: you get trained along the way, there's gonna be a

1193
01:07:20,880 --> 01:07:23,000
Speaker 1: business plan and here's how we're gonna do step bay

1194
01:07:23,040 --> 01:07:25,600
Speaker 1: and step B and step see. And I've realized over

1195
01:07:25,680 --> 01:07:27,720
Speaker 1: time that never works. So don't show me a fifty

1196
01:07:27,760 --> 01:07:29,440
Speaker 1: page business plan because I don't want to see it.

1197
01:07:29,480 --> 01:07:31,400
Speaker 1: Tell me about how you're thinking about things. How do

1198
01:07:31,440 --> 01:07:33,880
Speaker 1: you think about challenges, how do you think about opportunities?

1199
01:07:34,200 --> 01:07:35,560
Speaker 1: And those are the those are the things that I

1200
01:07:35,600 --> 01:07:39,800
Speaker 1: wish I knew. Huh, quite quite fascinating. We have been

1201
01:07:39,840 --> 01:07:43,880
Speaker 1: speaking with Steve Murray, here's a partner at Revolution Growth,

1202
01:07:43,960 --> 01:07:49,200
Speaker 1: a early stage ventured capital firm. If you enjoy this conversation, well,

1203
01:07:49,240 --> 01:07:51,080
Speaker 1: be sure to look up and entered down an inch

1204
01:07:51,120 --> 01:07:54,920
Speaker 1: on Apple iTunes at any of the other two hundred

1205
01:07:55,280 --> 01:07:58,920
Speaker 1: such conversations that we've had. You can find any of

1206
01:07:58,960 --> 01:08:04,480
Speaker 1: them i Tunes, Bloomberg dot Com, overcast wherever final podcasts

1207
01:08:04,480 --> 01:08:08,720
Speaker 1: are sold. We love your comments, feedback and suggestions right

1208
01:08:08,800 --> 01:08:12,280
Speaker 1: to us at m IB podcast at Bloomberg dot net.

1209
01:08:13,000 --> 01:08:14,920
Speaker 1: I would be remiss if I did not thank our

1210
01:08:15,000 --> 01:08:18,000
Speaker 1: crack staff who helps put together this podcast each week.

1211
01:08:18,800 --> 01:08:24,840
Speaker 1: Medina Parwana is my audio engineer, slash producer, Taylor Riggs

1212
01:08:24,880 --> 01:08:27,720
Speaker 1: is our booker, and Michael Batnick is my head of research.

1213
01:08:28,479 --> 01:08:31,759
Speaker 1: I'm Barry Results you've been listening to Masters in Business

1214
01:08:32,240 --> 01:08:33,360
Speaker 1: on Bloomberg Radio