WEBVTT - Steve Murray Discusses Startup Valuation 0:00:02.240 --> 0:00:06.840 This is Masters in Business with Barry Ridholts on Bloomberg Radio. 0:00:11.480 --> 0:00:14.400 This week on the podcast, I have an extra special guest. 0:00:14.640 --> 0:00:17.720 His name is Steve Murray and he has a storied 0:00:17.720 --> 0:00:21.239 background in the world of venture investing. He is currently 0:00:21.239 --> 0:00:24.920 a partner at Revolution Growth. He spent twenty years at 0:00:24.960 --> 0:00:29.800 soft Bank working with a legendary list of companies, and 0:00:30.200 --> 0:00:34.800 we very much get in the weeds about startup and 0:00:34.920 --> 0:00:37.479 venture investing. If this is an area that is of 0:00:37.520 --> 0:00:41.159 an interest to you as either a career or just 0:00:41.320 --> 0:00:47.400 a passing fancy, if you're intrigued by technology, finance, startups, fintech, 0:00:48.120 --> 0:00:52.400 UH sports technology, wearable technology, well then you're going to 0:00:52.479 --> 0:00:56.800 find this conversation quite intriguing. So, with no further ado, 0:00:57.480 --> 0:01:05.600 my conversation with Steve Murray, I'm Barry Ridholts. You're listening 0:01:05.640 --> 0:01:09.240 to Masters in Business on Bloomberg Radio. My special guest 0:01:09.280 --> 0:01:12.679 today is Steve Murray. He is a managing partner at 0:01:12.760 --> 0:01:20.280 Revolution Growth of venture capital funds that specializes in technology, software, wearables, 0:01:20.520 --> 0:01:24.520 and a number of other fascinating UH tech subjects. He 0:01:24.680 --> 0:01:28.160 was a partner and managing director at SoftBank for twenty years, 0:01:28.680 --> 0:01:33.480 working with such companies as Yahoo, e Trade, Geo Cities, 0:01:34.120 --> 0:01:38.800 Ziff Davis, BuzzFeed, and many others. He is a current 0:01:39.240 --> 0:01:42.319 board of director member at Fitbit, where he has served 0:01:42.360 --> 0:01:47.120 since Steve Murray, Welcome to Bloomberg. Welcome. Thank you for 0:01:47.160 --> 0:01:49.680 having me, Barry. I appreciate it. So let's start with 0:01:49.800 --> 0:01:53.280 soft Bank, because you were there for twenty years, um, 0:01:53.280 --> 0:01:56.160 both as a director and a partner for for a 0:01:56.240 --> 0:01:58.560 large part of that. What did you do with SoftBank 0:01:59.120 --> 0:02:00.880 A TOF bank or many years is a long time. 0:02:00.920 --> 0:02:02.840 I can't imagine that I was there for that long, 0:02:03.080 --> 0:02:04.960 but it was. It was a lot of fun, I 0:02:04.960 --> 0:02:07.160 guess in summary, I got to sort of be on 0:02:07.200 --> 0:02:10.799 the front row of the sidelines of the commercial development 0:02:10.800 --> 0:02:13.079 of the Internet. So what I did, what I did 0:02:13.120 --> 0:02:21.440 functionally as I started there, I started is really ramping up. Really, 0:02:21.480 --> 0:02:24.440 the Internet was just starting, and soft Bank had just 0:02:24.520 --> 0:02:30.520 acquired companies like Ziff Davis, Kingston Technologies, Comdex trade Shows, 0:02:30.680 --> 0:02:34.080 and plus I trade Shows, and so there were seven 0:02:34.080 --> 0:02:36.960 different operating units that had had been put together here 0:02:36.960 --> 0:02:38.760 in the US and outside of Japan. There was a 0:02:38.800 --> 0:02:41.119 grand total of four people that worked for soft Bank. 0:02:41.520 --> 0:02:45.680 So I joined initially from an infrastructure perspective to really 0:02:45.680 --> 0:02:50.079 put together all the information systems, the accounting, legal, tax 0:02:50.120 --> 0:02:54.040 and other activities for the and and managing that reporting 0:02:54.040 --> 0:02:56.720 into Japan and working with them on their strategies there. 0:02:56.760 --> 0:03:00.280 That quickly, as the commercial development of the Internet sort 0:03:00.320 --> 0:03:04.919 of moved along rapidly, the tasks that I were doing 0:03:05.000 --> 0:03:07.919 really moved much more into the investing side of life, 0:03:07.919 --> 0:03:10.880 which really starting in current out of early two thousands, 0:03:10.919 --> 0:03:13.079 I spent most of my time on the investing side. 0:03:13.200 --> 0:03:16.640 What what was the relationship between Yahoo and soft Bank 0:03:16.720 --> 0:03:19.360 way back? Yeah, so that's a that's a one of 0:03:19.360 --> 0:03:23.480 the great stories of lore, which is um uh soft 0:03:23.520 --> 0:03:26.000 Bank made an investment in Yahoo and owned about a 0:03:26.040 --> 0:03:29.280 third of Yahoo at the same time that they made 0:03:29.280 --> 0:03:32.560 the investment in in Yahoo US. At the time, that 0:03:32.639 --> 0:03:34.239 was a huge investment. I think it was about a 0:03:34.280 --> 0:03:36.320 hundred million dollars and they bought a third of it. Right, 0:03:36.680 --> 0:03:39.600 put things in context, right, it was a a pre 0:03:39.720 --> 0:03:43.600 I p O investment where Masioshi Son and Jerry Yang 0:03:43.680 --> 0:03:46.000 got together and decided that Massa wanted to be a 0:03:46.000 --> 0:03:48.880 big partner here in the US of of Yahoo's but 0:03:48.960 --> 0:03:52.720 also at the same time they created Yahoo Japan which 0:03:52.760 --> 0:03:55.680 was a real partnership. Actually, I think it was a 0:03:55.760 --> 0:03:58.960 sixty forty partnership or something like that between soft Bank 0:03:59.000 --> 0:04:01.960 as the controlling and managing partner of that entity and 0:04:02.200 --> 0:04:06.320 Yahoo US. They also created Yahoo Korea, Yahoo UK and 0:04:06.360 --> 0:04:09.280 some other things, So there was really a global partnership 0:04:09.320 --> 0:04:11.760 that was set up, and that really was on some 0:04:11.840 --> 0:04:15.480 level the basis for a lot of soft Banks US 0:04:15.640 --> 0:04:19.800 and other Internet activities. Really, you know, that's the flagship 0:04:19.880 --> 0:04:23.480 investment early on in the soft Bank story on the Internet. 0:04:23.960 --> 0:04:26.360 So it's funny to think of you as a venture 0:04:26.400 --> 0:04:29.680 investor because your background is that of an accountant. And 0:04:29.680 --> 0:04:33.200 and maybe it's my bias, but I think of accountants 0:04:33.240 --> 0:04:38.680 as steady risk averse dotting eyes and crossing teas and 0:04:38.720 --> 0:04:42.280 making sure double entry accounting adds up. How did you 0:04:42.600 --> 0:04:47.400 transition from a staid profession of an accountant to something 0:04:47.440 --> 0:04:50.640 that's got a touch of cowboy in it? Yeah, I'd 0:04:50.640 --> 0:04:53.720 say a touch of cowboy might be an understatement someday, 0:04:53.760 --> 0:04:59.280 but I guess it takes all types. Um and uh. 0:04:59.400 --> 0:05:01.800 I actually really enjoyed my time at Deloitte and was 0:05:01.960 --> 0:05:03.760 my background is. I was a c p A for 0:05:03.800 --> 0:05:07.479 a while. I was in the accounting and auditing function 0:05:07.640 --> 0:05:13.320 within UH within Deloitte for six years, So my first 0:05:13.360 --> 0:05:15.840 six years of my career were there spent. I spent 0:05:16.000 --> 0:05:18.640 an inordinately large amount of time on companies, and I 0:05:18.680 --> 0:05:21.600 think why it translated to my soft bank activities, it's spent. 0:05:21.760 --> 0:05:24.120 I spent a large amount of my time on companies 0:05:24.120 --> 0:05:28.640 that were heavily transaction orientated, So companies like Prime Mark 0:05:28.720 --> 0:05:31.320 that was buying a lot of data service companies at 0:05:31.320 --> 0:05:34.200 the time, a company like Hardcore General at the time 0:05:34.240 --> 0:05:37.640 that was buying Hardcore Brace, Jovanovitch and Neeman Marcus and 0:05:37.680 --> 0:05:39.919 other things. So I was I was involved in the 0:05:39.960 --> 0:05:43.679 assignments that I ended up being on were very transactional orientated, 0:05:44.000 --> 0:05:45.880 a lot of acquisitions, and they were doing a lot 0:05:45.920 --> 0:05:48.599 of activity. Accounting skills would come in very handy with that. 0:05:48.880 --> 0:05:51.360 Accounting skills come in very handy. I do find that 0:05:51.600 --> 0:05:55.159 my background of accounting skills is actually quite helpful with 0:05:55.240 --> 0:05:58.240 the companies, particularly as they scale. As they say there's 0:05:58.360 --> 0:06:01.320 there's uh, there's nothing like that ruins a good story 0:06:01.400 --> 0:06:04.160 like facts, and accountants on some level have facts, which 0:06:04.240 --> 0:06:07.960 is how are the companies doing versus their plan? How 0:06:08.040 --> 0:06:11.000 much cash is left in the bank, Can we last 0:06:11.040 --> 0:06:14.040 another year or five years? How would we be viewed 0:06:14.080 --> 0:06:18.640 relative to comparable companies in the marketplace? So um, Although, 0:06:19.040 --> 0:06:22.560 for sure, you know the venture capital market is a 0:06:22.600 --> 0:06:26.200 lot of art project, not necessarily a pure science project. 0:06:27.240 --> 0:06:30.599 I think having the background and accounting actually has been helpful. 0:06:31.520 --> 0:06:34.960 So tell us a little bit about Revolution Growth. What 0:06:35.200 --> 0:06:38.240 sort of companies do you invest in? And gives some 0:06:38.320 --> 0:06:42.039 examples of of some of the companies you're working with currently. Sure. So, 0:06:42.120 --> 0:06:45.960 Revolution Growth is a growth fund based out of Washington, 0:06:46.040 --> 0:06:50.600 d c uh. It was started maybe ten years ago 0:06:50.760 --> 0:06:54.200 by three folks that previously we're partners together at A 0:06:54.240 --> 0:06:57.039 o L. So it was Steve Case, Ted leonss and 0:06:57.080 --> 0:07:00.880 Don Davis started Revolution. That's the murderous row. There we go, right, 0:07:01.080 --> 0:07:04.640 I have three more podcasts. I'm sure they'd be happy 0:07:04.680 --> 0:07:08.080 to come. So the three of them started Revolution a 0:07:08.160 --> 0:07:11.760 number of years ago really to do what at the time, 0:07:11.800 --> 0:07:13.560 they were trying to figure out what was big and 0:07:13.600 --> 0:07:15.640 what was next for them in their careers after they 0:07:15.720 --> 0:07:19.760 left the A O L situation after that merger, and 0:07:20.160 --> 0:07:23.640 they ultimately created a series of investment funds, one of 0:07:23.720 --> 0:07:29.160 them being Revolution Growth. Revolution. Growth invests in companies that are, 0:07:29.520 --> 0:07:31.760 as the name would suggest, at the growth stage, so 0:07:31.880 --> 0:07:36.840 bigger companies, not smaller, but not generally not billion dollar companies. 0:07:36.880 --> 0:07:40.720 Generally companies that have twenty thirty fifty hundred million dollars 0:07:40.720 --> 0:07:44.360 of revenue. We generally invest twenty to fifty million dollars 0:07:44.360 --> 0:07:49.280 in each opportunity. We usually have a pretty significant minority ownership, 0:07:49.320 --> 0:07:51.480 so we don't We're not a private equity shop where 0:07:51.480 --> 0:07:54.160 we take control of businesses. We are more like a 0:07:54.280 --> 0:07:58.080 venture capital UH even on on some level structured like 0:07:58.080 --> 0:08:00.480 an early stage venture capital from where we own five 0:08:00.520 --> 0:08:02.680 percent of a business ten percent of a business, but 0:08:02.760 --> 0:08:06.000 we get involved as the business is really starting to scale. 0:08:06.480 --> 0:08:08.880 And so the types of businesses that we get involved 0:08:08.920 --> 0:08:12.360 in generally our technology related businesses, but they can be 0:08:12.520 --> 0:08:15.120 across a number of different verticals. Right, So we have 0:08:15.720 --> 0:08:20.480 UH companies actually as diverse and versus some of the 0:08:20.480 --> 0:08:24.520 folks that we work with as co investors um in 0:08:24.960 --> 0:08:27.520 fast casual restaurants, So we're investors in Sweet Green, We're 0:08:27.560 --> 0:08:30.240 investors in Cava that are both using technology to change 0:08:30.240 --> 0:08:32.920 the supply chain and change the ordering patterns and change 0:08:32.960 --> 0:08:35.520 the So that's a fast casual thing that we think 0:08:35.559 --> 0:08:39.199 is really big. We're involved in UM fintech, so we've 0:08:39.320 --> 0:08:41.800 recently made an investment in a company called Talo, which 0:08:41.840 --> 0:08:47.200 is doing UH micro loans in in developing nations through 0:08:47.320 --> 0:08:51.600 the use of information on people's cell phone. We're involved 0:08:51.640 --> 0:08:55.600 in sports related technologies like draft Kings where I'm on 0:08:55.640 --> 0:08:59.600 the board, sport Radar, which we're involved in. I'm sure 0:08:59.600 --> 0:09:02.920 we'll get to that topic later. UH. We're involved in 0:09:03.440 --> 0:09:08.280 UH data companies places like Uptake in Chicago, Tempest in Chicago, 0:09:09.160 --> 0:09:11.959 Interactions in Boston. So those are the types of companies. 0:09:11.960 --> 0:09:15.080 So they tend to be companies that, when we we 0:09:15.120 --> 0:09:18.440 get involved in them, tend to have substantive revenue, but 0:09:18.559 --> 0:09:21.320 not a billion dollars of revenue. We tend to put 0:09:21.440 --> 0:09:24.440 twenty to fifty million dollars to work. In almost every instance. 0:09:24.480 --> 0:09:27.200 We're on the board of these companies, and we serve 0:09:27.320 --> 0:09:29.640 to try to, you know, help them out, get them 0:09:29.640 --> 0:09:32.520 through their journey, and use the experiences and references and 0:09:32.520 --> 0:09:34.480 networks that we have to try to make them and 0:09:34.559 --> 0:09:38.360 make them successful. You referenced soft Bank earlier, and I 0:09:38.440 --> 0:09:41.800 have to ask you they now have a venture funds 0:09:42.440 --> 0:09:46.200 it's a hundred billion dollars. That's an insane amount of 0:09:46.240 --> 0:09:49.840 money for something like that. Uh, what does this say 0:09:49.880 --> 0:09:53.800 about what's going on in that space? And is this 0:09:54.320 --> 0:09:58.920 part of what's driving valuations that at firms like uber 0:09:59.000 --> 0:10:03.200 and we works through the roof? Well, clearly there's been 0:10:03.240 --> 0:10:07.280 a lot of talk about SoftBank's vision fund UM. I 0:10:07.320 --> 0:10:14.400 think it's actually it's really an amazing thing. And what 0:10:14.480 --> 0:10:16.360 does it say about the market and what does it 0:10:16.360 --> 0:10:18.240 say about where we are in the market and things? 0:10:18.480 --> 0:10:21.160 I think if we take a half a step back, 0:10:21.200 --> 0:10:23.200 what it says is certainly something like this was not 0:10:23.320 --> 0:10:26.160 possible ten years ago as an example, So what's changed 0:10:26.200 --> 0:10:28.000 that true? A decade ago you could not have had 0:10:28.000 --> 0:10:29.559 a fund this side, don't I mean outside of the 0:10:29.559 --> 0:10:32.520 financial I don't believe so just it wasn't the appetite 0:10:32.520 --> 0:10:34.360 for it, or it wasn't the capital for it. I 0:10:34.400 --> 0:10:37.160 think maybe a combination of both. But I think what 0:10:37.720 --> 0:10:41.079 UM has come to more clarity for people, which makes 0:10:41.160 --> 0:10:43.640 something like this possible, although it is an invent of 0:10:43.760 --> 0:10:46.080 one so you can't make too many broad conclusions about it. 0:10:46.120 --> 0:10:49.200 And it is sponsored by Massa, who is one of 0:10:49.240 --> 0:10:53.480 the world's great dealmakers. So I'm not suggesting that there 0:10:53.520 --> 0:10:55.920 will be multiple more hundred billion dollar funds, but I 0:10:55.920 --> 0:10:58.360 think what it does suggest is that the world has 0:10:58.440 --> 0:11:02.120 recognized the importance of tech aology and major industries and 0:11:02.320 --> 0:11:05.560 therefore the ability to deploy big amounts of capital in those. 0:11:05.600 --> 0:11:09.319 So things like industries like real estate, industries like healthcare, 0:11:09.800 --> 0:11:15.040 financial systems and others are really now being fundamentally changed 0:11:15.080 --> 0:11:17.680 by technology in a way that it's really just starting 0:11:17.720 --> 0:11:20.320 to happen, although there's been a lot of talk about it, 0:11:20.720 --> 0:11:23.880 you know, the industrial complex and the like, those things 0:11:23.920 --> 0:11:28.640 are really now starting to change materially, and those give 0:11:28.720 --> 0:11:31.480 real opportunities to deploy real amounts of capital. We say, 0:11:31.600 --> 0:11:33.680 we see this with a bunch of different opportunities that 0:11:33.679 --> 0:11:36.360 that's up Bank is deploying. So I think that they 0:11:36.360 --> 0:11:39.280 are a hugely influencial investor in the marketplace. I don't 0:11:39.280 --> 0:11:41.480 think a fund like this was possible ten years ago. 0:11:41.559 --> 0:11:43.280 I'm not sure there's ten more of them that are 0:11:43.280 --> 0:11:45.559 coming down the path, but I do think it speaks 0:11:45.640 --> 0:11:50.640 to the importance of technology in major industries that maybe 0:11:50.640 --> 0:11:53.439 previously had been a bit more immune to it. So 0:11:53.720 --> 0:11:56.080 not too long ago, I had a conversation with Benic 0:11:56.160 --> 0:12:00.240 Devans of Andrews and Horowitz, and his comment was, there 0:12:00.280 --> 0:12:06.319 aren't um technology companies anymore. Everybody's a technology company. If 0:12:06.360 --> 0:12:10.680 you're not using tech in in the most optimal or 0:12:10.760 --> 0:12:13.640 most productive way, you're just going to be left behind. 0:12:14.040 --> 0:12:16.720 I think that's a fair and accurate summary. I do 0:12:16.800 --> 0:12:20.640 think there are obviously some and many companies that are 0:12:20.720 --> 0:12:24.120 using it more effectively. There are industries that allow for 0:12:24.200 --> 0:12:27.439 it to be used more effectively. The pace at which 0:12:27.480 --> 0:12:29.800 some of these industries are going to be able to 0:12:29.840 --> 0:12:32.280 adopt the technology is not at the same pace that 0:12:32.320 --> 0:12:35.160 we've seen in some other industries. So as an example, 0:12:35.240 --> 0:12:37.240 when you talk about health care and you talk about 0:12:37.840 --> 0:12:40.679 you know, money supply, and you talk about things like 0:12:40.720 --> 0:12:43.720 that that are heavy heavily regulated, the pace at which 0:12:43.760 --> 0:12:46.200 some of these changes are going to be happening is 0:12:46.240 --> 0:12:49.360 not gonna be like how long it took Facebook to 0:12:49.400 --> 0:12:52.480 be published. For changes in there, it's going to take. 0:12:52.920 --> 0:12:55.240 So let's talk a little bit about health I see 0:12:55.280 --> 0:12:59.400 you're wearing the bigger what is that called the versa? 0:12:59.559 --> 0:13:01.880 This is all the ionic Oh, the ionic, so that's 0:13:01.920 --> 0:13:06.280 the big fit. But I'm wearing the charge to my wife. 0:13:06.520 --> 0:13:08.559 I had the original one, which I had, truth be told, 0:13:08.600 --> 0:13:10.439 I didn't love, but my wife. I got this from 0:13:10.440 --> 0:13:13.080 my wife and she liked it so much that I 0:13:13.200 --> 0:13:16.720 went out and got my own. You've been heavily involved 0:13:16.720 --> 0:13:21.719 in wearables. Where is that sector going, especially since you 0:13:21.800 --> 0:13:25.880 mentioned health? What might these things mean for a sedentary 0:13:26.000 --> 0:13:31.920 overweight nation. It's I think the existing status of wearables 0:13:32.000 --> 0:13:35.040 means a lot for a sedentary overweight nation, which is 0:13:35.080 --> 0:13:40.400 that it provides basic information around things like how active 0:13:40.480 --> 0:13:45.720 you are, what is your what's your pulse, how much 0:13:45.800 --> 0:13:49.000 sleep have you gotten? Things that are very basic in theory. 0:13:49.520 --> 0:13:53.000 But those pieces of information, when provided to people and 0:13:53.080 --> 0:13:56.120 easy to use formats with easy to use devices, change 0:13:56.160 --> 0:13:59.480 behavior for many many users. I could tell you from 0:13:59.679 --> 0:14:03.360 pro and experience. When I had the original fitbit and 0:14:03.400 --> 0:14:06.560 I was doing ten fifteen thousand steps a day, I 0:14:06.640 --> 0:14:10.080 became a little obsessive with it, and then I I 0:14:10.120 --> 0:14:11.760 had a couple of glitches with it, and I kind 0:14:11.760 --> 0:14:13.199 of got bored with it, and I put it down, 0:14:13.840 --> 0:14:17.920 and the phone is still tracking most of my travel. 0:14:18.040 --> 0:14:21.440 And I noticed that those ten thousand a day without 0:14:21.520 --> 0:14:26.320 something on your wrist just disappeared and it. Once I 0:14:26.360 --> 0:14:29.640 got this back again, suddenly it's all right. My office 0:14:29.680 --> 0:14:32.040 is down on four the street. We're on fifty eight street. 0:14:32.360 --> 0:14:34.040 I don't need to take a subway. I could walk, 0:14:34.080 --> 0:14:37.440 And besides, that's gonna add me two thousand steps. It 0:14:37.560 --> 0:14:40.240 really makes a significant thing, it really does. The mindfulness 0:14:40.280 --> 0:14:43.440 piece of it, which you're referring to, is really the 0:14:43.880 --> 0:14:46.440 key piece of the first generation of these things, which 0:14:46.480 --> 0:14:48.960 is really we're on maybe the first and a half 0:14:49.040 --> 0:14:51.200 generation of these things. So we started out with really 0:14:51.240 --> 0:14:55.280 basic trackers that did a pretty good job of tracking steps, 0:14:55.320 --> 0:14:58.600 but they were really electronic pedometers, if you will, right, 0:14:59.160 --> 0:15:02.240 And then they married that with really easy to use 0:15:02.680 --> 0:15:05.800 mobile software which makes you able to look at a 0:15:05.800 --> 0:15:08.640 little bit more. They've added sensors to things, and I 0:15:08.680 --> 0:15:11.000 don't know if you use the other ones that do 0:15:11.080 --> 0:15:13.680 things like your heart rate, you know, which is actually 0:15:13.680 --> 0:15:19.160 for lots of people quite interesting, what's my what's very 0:15:19.160 --> 0:15:21.880 pretty chill? What's your and and people sometimes say when 0:15:21.880 --> 0:15:25.040 I'm working out, I should get to thirty or forty 0:15:25.200 --> 0:15:27.600 beats a minute. Okay, how is that? You can drill 0:15:27.680 --> 0:15:30.280 into that in your mobile app after your workout and 0:15:30.280 --> 0:15:33.200 look at how that goes. The other feature that I 0:15:33.320 --> 0:15:34.800 use a lot, and I don't know if you do, 0:15:34.880 --> 0:15:37.800 but many users do, and it actually has really influenced 0:15:37.840 --> 0:15:40.360 me is the sleep function my wife uses that I 0:15:40.520 --> 0:15:43.760 like to take off anything from my winning band is 0:15:43.800 --> 0:15:46.200 the only jewelry I have on it in your bed. 0:15:46.560 --> 0:15:48.840 But that's just a function of getting used to it. 0:15:49.040 --> 0:15:51.800 And I would so the sleep thing for me, as 0:15:51.880 --> 0:15:56.680 somebody that travels every week and has a lot of 0:15:56.720 --> 0:15:59.560 functions that I attend to and are in different cities 0:15:59.560 --> 0:16:03.880 a lot I find, particularly as I'm not getting younger, 0:16:04.320 --> 0:16:10.560 My my vibrancy, my health, everything seems to directly correlate 0:16:10.640 --> 0:16:12.920 with the number of hours of sleep I get, it seems. 0:16:13.280 --> 0:16:15.200 And so as an example, I was looking yesterday, was 0:16:15.200 --> 0:16:18.480 talking to somebody about this. Yesterday evening. I looked at 0:16:18.520 --> 0:16:22.320 my fitbit data on my phone yesterday as I was 0:16:22.440 --> 0:16:26.000 traveling someplace, and I noticed that it has been over 0:16:26.040 --> 0:16:28.320 a month since I've had more than seven hours of sleep. 0:16:28.360 --> 0:16:30.120 I said, you know, something is not good there. I 0:16:30.200 --> 0:16:32.680 gotta fix that, right. So there's a mindfulness piece of 0:16:32.720 --> 0:16:34.400 it there. You've got to report at the end of 0:16:34.440 --> 0:16:36.840 a week, says your average sleep has gone up or 0:16:36.880 --> 0:16:40.320 down since last week, and so those basic things that 0:16:40.400 --> 0:16:45.080 are being provided now materially change people's behavior. Where is 0:16:45.120 --> 0:16:47.360 it going? I think is is the next step, and 0:16:47.400 --> 0:16:50.600 I think of it is around health. So they'll be 0:16:50.720 --> 0:16:54.880 just as they added functions around things like pulse and 0:16:55.080 --> 0:16:58.720 things like sleep, they there will be things that will 0:16:58.760 --> 0:17:02.600 add things around blood sure, perhaps blood sugar contact. You 0:17:02.640 --> 0:17:07.959 could imagine a whole series of sensors that get added 0:17:07.960 --> 0:17:11.680 into whether it's a risk device or something else that 0:17:11.920 --> 0:17:16.800 feeds a central depositor depository like a mobile application. And 0:17:16.840 --> 0:17:19.439 the real key will be when that can be integrated 0:17:19.440 --> 0:17:22.320 into your health system. If you will your doctor, If 0:17:22.359 --> 0:17:25.480 you imagine your doctor at some point getting your report 0:17:25.520 --> 0:17:28.240 about what's going on with you, and and a check 0:17:28.280 --> 0:17:31.560 engine light if you will goes off and says, hey, Barry, 0:17:31.800 --> 0:17:34.280 you know, looks to me like your blood sugar levels 0:17:34.280 --> 0:17:36.640 pretty low. You might want to get home and get something. 0:17:36.680 --> 0:17:38.480 You might want to get get something to eat, or 0:17:38.560 --> 0:17:41.600 eat an apple or something, or geez, your pulse is 0:17:41.720 --> 0:17:44.840 way high. You have the symptoms of somebody that looks 0:17:44.880 --> 0:17:47.639 like you might be having some hard issues that you 0:17:47.680 --> 0:17:49.360 might want to go to your doctor. But so if 0:17:49.359 --> 0:17:51.600 you think about some of where this is going. I 0:17:51.600 --> 0:17:55.840 think in the next phase is around this check engine 0:17:55.920 --> 0:17:59.280 light for yourself. So, without getting to graphic, I've read 0:17:59.320 --> 0:18:03.640 about sensors that can be put into a toilet where 0:18:03.680 --> 0:18:06.680 they can check things like blood sugar, and actually check 0:18:06.760 --> 0:18:11.479 for proteins associated with cancer. This is so small and 0:18:11.520 --> 0:18:14.240 doesn't have, you know, a giant battery, but I would 0:18:14.240 --> 0:18:17.600 imagine the next couple of generations of sensors are going 0:18:17.640 --> 0:18:19.680 to be able to pick up all sorts of stuff that, 0:18:20.119 --> 0:18:22.840 you know, hard to even imagine. Yeah, the real trick 0:18:22.880 --> 0:18:27.600 in all this is figuring out what pieces of sensors 0:18:27.880 --> 0:18:32.239 people would be willing to wear or use regularly so 0:18:32.320 --> 0:18:35.600 that the data comes through regularly, because with periodic data 0:18:35.640 --> 0:18:38.600 is and as valuable as regular data. So there's this 0:18:38.720 --> 0:18:43.640 constant battle between battery life. You know, so this ionic 0:18:43.680 --> 0:18:46.600 device lasts four or five days, you could put more 0:18:46.640 --> 0:18:49.040 sensors on it to do more things. It might last 0:18:49.040 --> 0:18:51.040 four or five hours, in which case, what do you 0:18:51.080 --> 0:18:53.000 need to watch for that last four or five hours 0:18:53.000 --> 0:18:55.560 that's of no value to So there's a they're the 0:18:55.840 --> 0:18:59.800 constant push and pull and struggle and and researches around 0:18:59.840 --> 0:19:03.720 how do you create sensors that identify things that make 0:19:03.800 --> 0:19:06.760 the form factor usable enough for people to wear on 0:19:06.800 --> 0:19:09.480 a regular basis. Related to wearables, I have to ask 0:19:09.520 --> 0:19:13.560 the question why did Google glass flame out so spectacularly? 0:19:13.600 --> 0:19:17.000 It seemed like an interesting piece of tech, but it 0:19:17.119 --> 0:19:22.640 never caught on except for some very specific niches. Yeah, 0:19:22.800 --> 0:19:24.560 I think it ties back to what we were just 0:19:24.600 --> 0:19:28.320 talking about with respect to sensors and battery life and usability. 0:19:28.880 --> 0:19:31.960 It appears as if the form factor never got to 0:19:32.000 --> 0:19:34.840 a point where people really wanted to wear it. It 0:19:34.880 --> 0:19:38.000 looked kind of geeky, it looked kind of weird, and 0:19:38.359 --> 0:19:41.040 you know what we've seen with the fitbit devices and 0:19:41.119 --> 0:19:43.840 I think it will be applicable for a lot of wearables. 0:19:43.920 --> 0:19:46.760 Is that the fashionable piece of this is very important. 0:19:47.160 --> 0:19:49.400 You know, can you is this something that you would 0:19:49.400 --> 0:19:52.359 wear in public and and and use? Um So, I 0:19:52.400 --> 0:19:55.359 think I think that might have impacted Google Glass. But 0:19:55.440 --> 0:19:58.119 the thought of a surgeon who has Google Glass on 0:19:58.200 --> 0:20:01.119 and wants to pull up a you know, either the 0:20:01.320 --> 0:20:03.520 X ray or the m R, a you or some 0:20:04.240 --> 0:20:08.520 other resource makes perfect sense for that absolutely. I think 0:20:08.800 --> 0:20:11.320 what you what we'll see, particularly for those types of 0:20:11.760 --> 0:20:15.080 applications on the I've seen something like that that's on 0:20:15.119 --> 0:20:18.920 the construction floor where actually it was I think of 0:20:19.040 --> 0:20:21.800 something with Boeing or or Lockheed or something where somebody 0:20:21.840 --> 0:20:25.120 who was putting together the intricate pieces of a wing 0:20:25.160 --> 0:20:28.560 of a plane can look at the through his glass 0:20:28.720 --> 0:20:31.919 blueprints through blueprints right on the throughs. So those are 0:20:31.920 --> 0:20:34.680 the types of applications that I think are easy to use, 0:20:34.800 --> 0:20:38.199 much more likely to have early success. I think the 0:20:38.320 --> 0:20:41.600 form factor for general commercial use hasn't quite got there. 0:20:41.760 --> 0:20:45.119 And how significant is the Apple Watch as a player 0:20:45.160 --> 0:20:50.280 in this space because you're your Fitbit watch about the 0:20:50.359 --> 0:20:53.800 same form factor as the Apple Watch, the same size. Yeah. 0:20:54.359 --> 0:20:57.320 Everything Apple does is they do a great job. They 0:20:57.320 --> 0:21:01.080 have a real a loyal fan following. They're passionate, they 0:21:01.119 --> 0:21:05.480 make great products that they're they're following loves um, you know. 0:21:06.320 --> 0:21:09.160 So they're they're they're a credible competitor, and I think 0:21:09.160 --> 0:21:12.199 that they will have and continue to be one of 0:21:12.240 --> 0:21:15.080 the real leaders in the wearable category for sure. I 0:21:15.119 --> 0:21:18.879 want to talk a little bit about a fund associated 0:21:18.960 --> 0:21:24.080 with revolution growth called Rise of the rest O r TR, 0:21:24.400 --> 0:21:28.359 and the concept is so intriguing. Most of the venture 0:21:28.359 --> 0:21:31.560 investing seems to take place in San Francisco and New 0:21:31.640 --> 0:21:36.960 York and Boston. But Revolution Growth does a bus tour, 0:21:37.560 --> 0:21:41.360 five cities, five days, five thousand dollars, and they do 0:21:41.480 --> 0:21:45.320 sort of a local pitch competition. Tell us more about 0:21:45.400 --> 0:21:49.760 the idea behind that, and who's driving that literally driving it, 0:21:50.080 --> 0:21:52.920 driving above the bus, right, So, so the idea really 0:21:53.000 --> 0:21:56.680 is Steve Case's idea, um and it's something that he's 0:21:56.720 --> 0:22:00.280 been and it and it started as an idea and 0:22:00.280 --> 0:22:03.720 and some activities around a bus tour. They've recently done 0:22:03.720 --> 0:22:06.760 their seventh bus tour. Really that many wow, And it's 0:22:06.960 --> 0:22:09.440 half a million per tour or half a million per city, 0:22:09.760 --> 0:22:13.160 half a million per tour generally, although sometimes he finds 0:22:13.280 --> 0:22:16.400 a way to involve a couple of the runner ups 0:22:16.400 --> 0:22:18.840 sometimes get something as well, but apparently that's not to 0:22:18.880 --> 0:22:21.760 be known. So the activity really is Steve's, and it's 0:22:21.760 --> 0:22:25.440 one of a personal passion of his, and it's one 0:22:25.480 --> 0:22:29.040 that the firm Revolution has adopted generally, right, which is 0:22:29.359 --> 0:22:35.560 in essence, the ideas around good company development and entrepreneurial 0:22:35.680 --> 0:22:39.919 spirit are not solely located in New York, Boston and 0:22:40.000 --> 0:22:43.480 San Francisco San Jose region. And if you look at 0:22:43.480 --> 0:22:46.960 where the distribution of capital is about somewhere between seventy 0:22:46.960 --> 0:22:49.639 and seventy eight percent of the venture capital money is 0:22:49.640 --> 0:22:52.240 spent in those three areas. And so there are a 0:22:52.359 --> 0:22:55.840 number of other great cities in the country that can 0:22:55.920 --> 0:23:01.160