WEBVTT - Greg Sands Discusses Technology and Investment 0:00:02.200 --> 0:00:06.800 This is Masters in Business with Barry Ridholts on Boomberg Radio. 0:00:09.200 --> 0:00:12.160 This week on the podcast, I have an extra special guest. 0:00:12.400 --> 0:00:16.239 His name is Greg Sands. He is the founder and 0:00:16.280 --> 0:00:19.680 managing partner at Cost to No A Ventures, of venture 0:00:19.720 --> 0:00:23.480 capital firm that has been around for a decade or two. 0:00:23.880 --> 0:00:28.160 He was the original product manager at a little firm 0:00:28.240 --> 0:00:33.600 called Netscape, working with Jim Clark and Mark Andreeson. Uh. 0:00:33.640 --> 0:00:36.080 Not only was he the first product manager, he put 0:00:36.120 --> 0:00:39.159 together the business plan and he came up with the 0:00:39.240 --> 0:00:44.519 name Netscape. And he is not just a technologist, but 0:00:44.600 --> 0:00:49.080 a venture investor and a very insightful person who sits 0:00:49.720 --> 0:00:54.480 really at the nexus of a number of fascinating aspects 0:00:54.760 --> 0:00:59.920 of business, finance, technology. Go down the list. Uh, they're 0:01:00.080 --> 0:01:04.800 out in Palo Alto. He is an early seed investor. UM. 0:01:05.000 --> 0:01:07.679 I wouldn't even call it a stage or be a round. 0:01:08.040 --> 0:01:11.760 He's earlier than that. Uh. They focus on a number 0:01:11.800 --> 0:01:17.000 of really interesting technologies and platforms. If you're remotely interested 0:01:17.040 --> 0:01:20.840 in anything having to do with angel or venture capital investing, 0:01:21.360 --> 0:01:26.480 if you're intrigued or fascinated as I am about technology 0:01:26.520 --> 0:01:29.600 and how it's going to develop and impact. Uh, the 0:01:29.640 --> 0:01:33.800 economy and society at large. Then you're really gonna enjoy 0:01:33.920 --> 0:01:39.800 this conversation. So, with no further ado, my interview with 0:01:39.920 --> 0:01:47.039 Greg Sands of Costa no Ah Ventures. My special guest 0:01:47.080 --> 0:01:50.760 today is Greg Sands. He is the founder and managing 0:01:50.840 --> 0:01:54.480 partner of Coast to Noah Ventures. He was the first 0:01:54.520 --> 0:01:58.440 product manager at Netscape Communications, where he not only wrote 0:01:58.720 --> 0:02:03.320 the initial business plan in but coined the name Netscape. 0:02:03.720 --> 0:02:06.720 Greg Sands, Welcome to Bloomberg. It's great to be here 0:02:06.760 --> 0:02:10.720 with you. So you're a founder and a managing partner 0:02:10.800 --> 0:02:13.800 at a venture capital firm. Is this the sort of 0:02:13.960 --> 0:02:16.880 career path you were expecting to take? Your background is 0:02:16.919 --> 0:02:21.040 not quite um total VC, although I guess in hindsight 0:02:21.080 --> 0:02:24.280 we could say that, well, it isn't what I saw 0:02:24.320 --> 0:02:27.040 myself doing as a kid. I grew up thinking I 0:02:27.040 --> 0:02:30.480 wanted to be the Senator from the great state of Minnesota, 0:02:30.760 --> 0:02:33.520 and much to my surprise, Al Franken holds that job 0:02:33.960 --> 0:02:37.280 instead of me. So that's funny. I expected to be 0:02:37.320 --> 0:02:39.639 a fighter pilot or an astronaut, so we had very 0:02:39.639 --> 0:02:42.520 different goals, that's right, absolutely, and so that evolved as 0:02:42.600 --> 0:02:47.640 I as I got into my career. Initially, at a 0:02:47.639 --> 0:02:50.639 management consulting firm in Boston, made my way to business 0:02:50.680 --> 0:02:53.600 school in at Stanford, so in the in the heart 0:02:53.600 --> 0:02:56.480 of Silicon Valley, and then just started navigating my way 0:02:56.520 --> 0:03:01.200 through the software. So so from Minnesota to Cambridge in 0:03:01.200 --> 0:03:05.639 in outside of Boston to southern California. Did you how 0:03:05.680 --> 0:03:09.399 did how did that transition go? I'm always surprised at 0:03:09.440 --> 0:03:13.239 how people find their way to California and it's, oh 0:03:13.240 --> 0:03:16.360 my god, it's beautiful. The geography is spectacular, the weather 0:03:16.480 --> 0:03:19.160 is great. It's hard to leave there, isn't it. Well, yes, 0:03:19.240 --> 0:03:22.280 and so you know we're we're we're in Palato in 0:03:22.280 --> 0:03:25.800 the in northern California, near near San Francisco. And I 0:03:26.000 --> 0:03:29.000 ended up, having spent seven years in Boston and Cambridge, 0:03:29.840 --> 0:03:32.880 having the opportunity to head out there. And I didn't 0:03:32.880 --> 0:03:36.600 know what I was getting into. I literally told people, Hey, 0:03:36.720 --> 0:03:38.840 I'm I'm going to Stanford. I'm going to the beach. 0:03:39.200 --> 0:03:41.280 And they said, it's not anywhere near the beach. Have 0:03:41.400 --> 0:03:42.880 you ever been there? And I said no, but it 0:03:42.880 --> 0:03:47.840 sounds great. The weather, everything is still spectacular. Boston's winters 0:03:47.840 --> 0:03:51.080 are not not easy winters, well, they're easy when you 0:03:51.320 --> 0:03:53.600 spent the first eighteen of them in Minnesota. I guess 0:03:53.640 --> 0:03:56.360 it's all relative, isn't it. So so let's talk a 0:03:56.440 --> 0:03:59.839 little bit about, um, what you were doing at at 0:04:00.280 --> 0:04:04.880 uh sutter Hill. You started at a very story I 0:04:04.920 --> 0:04:08.320 guess the first venture capital firms sutter Hill goes back 0:04:08.360 --> 0:04:10.440 to the early sixties. Yeah, that's right, goes back to 0:04:10.480 --> 0:04:13.720 the early sixties, and it's the longest running venture capital 0:04:13.760 --> 0:04:15.160 firm on the East Coast. There were a couple of 0:04:15.200 --> 0:04:18.680 earlier firms, but that don't still exist now, don't aren't 0:04:18.720 --> 0:04:21.920 they also out in Palo Alto or y? I mean 0:04:21.960 --> 0:04:26.559 then the original am I misremembering the original Sandhill VC? 0:04:26.920 --> 0:04:29.240 Or or were they not not on sand Hill? But 0:04:29.360 --> 0:04:31.760 you would think of him as basically the original West 0:04:31.760 --> 0:04:36.279 Coast venture capital firm and a storied firm. Uh. You know, 0:04:36.440 --> 0:04:39.640 a great group of people, very high integrity, great values, 0:04:39.680 --> 0:04:43.960 performed exceptionally well, incredible companies video and just the list 0:04:44.040 --> 0:04:47.359 of of companies that they backed were astonishing. And you 0:04:47.360 --> 0:04:51.600 were there for more than a decade. What was that experience? Like? Well, 0:04:51.960 --> 0:04:56.680 I came in having been basically uh GM of business unit, 0:04:56.720 --> 0:04:58.560 most recently at ne Tscape. So I had never been 0:04:58.600 --> 0:05:01.719 a professional investor, and I came in there was a 0:05:01.760 --> 0:05:05.680 group of five partners or managing directors who had all 0:05:05.720 --> 0:05:10.560 been there at least, you know, really thirteen to twenty 0:05:10.640 --> 0:05:13.239 five years, and so I got to learn the trade 0:05:13.839 --> 0:05:17.240 of venture capital. And so even in our at Coastineau, 0:05:17.360 --> 0:05:20.240 we talked a lot about the old school craft a 0:05:20.400 --> 0:05:23.039 venture capital and being a partnered entrepreneurs and being a 0:05:23.080 --> 0:05:25.560 company builder. And I really did get to learn that 0:05:26.040 --> 0:05:29.360 with an extraordinary group of people and feel really fortunate 0:05:29.400 --> 0:05:30.960 to have been able to do that. What were some 0:05:31.040 --> 0:05:33.880 of the companies you worked on when you were at 0:05:33.920 --> 0:05:37.520 a Sutter Hill so Yoku, which is about the world's 0:05:37.520 --> 0:05:40.240 third largest video property now owned by Ali Baba, but 0:05:40.279 --> 0:05:42.280 went public on the New York Stock Exchange and was 0:05:42.880 --> 0:05:44.920 had a five billion dollar markets going to say, that's 0:05:44.920 --> 0:05:46.920 a good exit to Ali Baba. That's right now, that's 0:05:46.920 --> 0:05:49.440 an excellent one. Quinn Street, which is a public company. 0:05:49.440 --> 0:05:52.240 It was a guy in twenty power point slides. That's 0:05:52.279 --> 0:05:56.760 a performance marketing company. And one that I that I 0:05:56.839 --> 0:05:59.440 love but isn't very well known as a company called 0:05:59.720 --> 0:06:02.520 mrs Said Systems. It was a call center performance management 0:06:02.920 --> 0:06:07.920 software company. That's and we uh, we are they still 0:06:07.960 --> 0:06:10.599 independent or they were brought by Nice Systems, which is 0:06:10.640 --> 0:06:15.120 a billion dollar public software company and uh, and one 0:06:15.200 --> 0:06:18.360 of the two founders there is working with us at 0:06:18.360 --> 0:06:20.800 Coast to know Mark selco Oh really, that's really that's 0:06:20.800 --> 0:06:25.039 really interesting. I recall you did something with feed burner. 0:06:25.160 --> 0:06:27.719 Was that at sutter Hill. So back at Cutter Hill, 0:06:27.760 --> 0:06:30.960 I was an investor at feed Burner. So Brad felt 0:06:30.960 --> 0:06:35.040 from founder group and I let around and so I 0:06:35.080 --> 0:06:37.640 was I was an observer on the board and worked 0:06:37.640 --> 0:06:42.360 with Dick Costello and team and it was a terrific experience. 0:06:42.680 --> 0:06:44.960 One of the things that was very interesting about it 0:06:45.000 --> 0:06:49.119 is that Fred Wilson came in a year later and said, 0:06:49.400 --> 0:06:51.640 I turned it down at the last round, but now 0:06:51.680 --> 0:06:53.960 all of my friends in the publishing industry are using it, 0:06:54.279 --> 0:06:57.120 and I want in. He's a blogger. I've been blogging 0:06:57.160 --> 0:07:01.520 for a hundred years. When Google acquired FeedBurner, everybody I 0:07:01.600 --> 0:07:04.480 know is using feedbourder as a way of shooting out 0:07:04.520 --> 0:07:08.839 their daily update. To to this was this was back 0:07:08.839 --> 0:07:11.240 in the day when everybody was using block feeds and 0:07:11.280 --> 0:07:15.440 not actually going to specific websites. But FeedBurner was a 0:07:15.480 --> 0:07:17.200 great property and that was a good exit. Was that 0:07:17.320 --> 0:07:19.040 was a good exit. And yet one of the things 0:07:19.080 --> 0:07:22.280 that I think is most interesting is that the investors 0:07:22.560 --> 0:07:24.720 actually wanted to keep going. We felt like there was 0:07:24.760 --> 0:07:28.080 a bigger, broader opportunity when we were when we were offered, 0:07:28.440 --> 0:07:32.120 UH Google UH came and offered to buy the company, 0:07:32.200 --> 0:07:35.320 and Dick Costelo, to his credit, he looked at us 0:07:35.320 --> 0:07:38.800 and we put together basically effectively a competing offer that 0:07:38.840 --> 0:07:41.440 would provide some founder liquidity. But he looked at us 0:07:41.440 --> 0:07:45.200 and he said, we have in fact won the war 0:07:45.320 --> 0:07:47.000 for the hearts and minds of bloggers, and we are 0:07:47.040 --> 0:07:50.760 deployed everywhere, but we haven't yet figured out how to monetize, 0:07:50.960 --> 0:07:53.680 for example, how to use to insert ads in the 0:07:53.760 --> 0:07:56.240 RSS feeds. And if we had figured out monetization, I 0:07:56.280 --> 0:07:58.560 would press on the gas and go for it. But 0:07:58.600 --> 0:08:00.640 I don't think we've eliminated that risk in a business, 0:08:00.640 --> 0:08:03.560 and as a result, I recommend that we that we 0:08:03.600 --> 0:08:06.080 take this offer and we sell. And that's I think 0:08:06.120 --> 0:08:10.200 a great example of the partnership between great founders and 0:08:10.280 --> 0:08:14.480 leaders and great investors, and that Dick Costello has been 0:08:14.520 --> 0:08:17.720 involved in other tech startups, hasn't he yes, as it 0:08:17.760 --> 0:08:20.160 turns out he he ended up leading Twitter, and he's 0:08:20.160 --> 0:08:22.160 now has his own company and is a is A 0:08:22.280 --> 0:08:24.120 is a great friend and a and a great leader. 0:08:24.480 --> 0:08:28.600 What does a product manager do in a tech startup? 0:08:29.360 --> 0:08:34.040 So product manager is really the person who connects market 0:08:34.120 --> 0:08:39.120 to technology. So ultimately that person decides what you're going 0:08:39.160 --> 0:08:42.160 to build and then works with the engineering team to 0:08:42.840 --> 0:08:48.720 make sure that, uh, what you're delivering basically meets the 0:08:48.800 --> 0:08:52.600 requirements that you've mapped out. So it's a combination of 0:08:52.960 --> 0:08:56.319 making it work, making sure the features are as promised. 0:08:56.760 --> 0:08:59.120 Are you involved in the branding or marketing or is 0:08:59.160 --> 0:09:03.640 that a different team. It's done differently at different times, 0:09:03.679 --> 0:09:09.439 but mainly mainly not mainly the there's a separate marketing organization, 0:09:09.480 --> 0:09:14.320 and there the product management often does product marketing, so 0:09:14.440 --> 0:09:17.880 articulating the features and benefits and capabilities of that product, 0:09:17.920 --> 0:09:19.800 but not of the company as a whole. So you 0:09:19.880 --> 0:09:24.360 put together the first business plan effectively for Netscape. How 0:09:24.400 --> 0:09:27.280 what was the thought process like behind it? It was 0:09:27.440 --> 0:09:30.360 clear that if this worked, it was going to be revolutionary, 0:09:30.400 --> 0:09:32.640 but how was the company ever gonna make any money? 0:09:32.840 --> 0:09:36.120 It was fascinating exercise. So we did, in fact have 0:09:37.200 --> 0:09:40.240 the company and innovated on on a whole variety of things, 0:09:40.240 --> 0:09:43.800 including public beta, including affiliate programs and the like. But 0:09:43.920 --> 0:09:46.920 it really was a very early version of a freemium 0:09:46.960 --> 0:09:50.520 business model where the product was free for personal use 0:09:50.640 --> 0:09:54.920 and use in educational institutions, but we charge businesses. And 0:09:55.160 --> 0:09:58.280 so that's basically what we came up with. And I 0:09:58.320 --> 0:10:02.640 will point out that working with Jim Clark, and you know, 0:10:02.679 --> 0:10:05.800 with his guidance, we came out and we had a 0:10:05.840 --> 0:10:07.600 plan that said the first year of revenue we were 0:10:07.640 --> 0:10:10.520 going to do a little over fifty million dollars. And 0:10:10.559 --> 0:10:12.960 then they hired three vps who are all much more 0:10:12.960 --> 0:10:15.200 experienced than I. I was a kid, a puppy dog, 0:10:15.720 --> 0:10:18.000 and they came in and said, you know what are 0:10:18.040 --> 0:10:20.280 you doing? We actually are going to be responsible for 0:10:20.320 --> 0:10:23.080 delivering this. This is ridiculous. They lowered the plan to 0:10:23.280 --> 0:10:24.959 thirty five and then we went out and did eight. 0:10:26.240 --> 0:10:30.800 So Jim Clark is a fascinating character. I love Michael 0:10:30.840 --> 0:10:33.600 Lewis is the new new Thing. Tell us a little 0:10:33.600 --> 0:10:36.880 bit about working with Jim Clark. Well, Jim has an 0:10:36.920 --> 0:10:43.199 amazing capability of spotting mega trends and assembling incredible people 0:10:43.200 --> 0:10:45.800 to do it before the trends are understood. A well 0:10:45.840 --> 0:10:48.719 known he's we can all see a trend when it's 0:10:48.760 --> 0:10:52.240 fully robust, but his genius is really this is where 0:10:52.280 --> 0:10:54.680 the trend is going to go. Am I over didn't 0:10:54.679 --> 0:10:57.800 know it's exactly right. And so to his credit, he 0:10:57.880 --> 0:11:02.079 went out and saw this thing coming and he went 0:11:02.280 --> 0:11:06.680 and grabbed Mark and Reason, who was also a kid 0:11:07.480 --> 0:11:10.640 years old right at the time, and said, this is 0:11:10.679 --> 0:11:12.680 the guy who has been the innovator in the category. 0:11:12.760 --> 0:11:14.880 I want to work with him. We can go do 0:11:15.000 --> 0:11:18.280 this together. And there aren't very many people who are 0:11:18.320 --> 0:11:23.240 already luminaries, who have already started and led public companies 0:11:23.360 --> 0:11:25.760 who go and look to a twenty one year old 0:11:26.080 --> 0:11:28.760 right and say we're going to do this together. We're partners, 0:11:28.880 --> 0:11:32.319 and and be right in his selection of people. And 0:11:32.640 --> 0:11:35.199 by the way, Andreason was a prior guest. It's one 0:11:35.200 --> 0:11:39.280 of everybody's favorite interviews because he is just fascinating. So 0:11:39.520 --> 0:11:41.920 you were working with him in the early days, tell 0:11:42.000 --> 0:11:45.840 us a little bit about Mark. What was that like? So, uh, 0:11:45.880 --> 0:11:49.680 it was really clear that not only was Mark brilliant, 0:11:49.720 --> 0:11:53.160 but he was just learning at an incredible rate. And 0:11:53.240 --> 0:11:55.440 so I know about you but at twenty one, I 0:11:55.440 --> 0:11:59.280 had no judgment about anything, certainly not about guilties. And 0:11:59.520 --> 0:12:05.800 he us was a voracious reader and a voracious learner 0:12:05.960 --> 0:12:09.800 and sought out mentors and got better and better and better. 0:12:10.080 --> 0:12:12.199 And to me, that was really the most striking thing 0:12:12.240 --> 0:12:15.120 about Mark in those days. That's that's fascinating you say 0:12:15.200 --> 0:12:18.400 that because when I sat down with him out in 0:12:18.480 --> 0:12:23.920 Palo Alto to do our conversation, he described Mark Zuckerberg, 0:12:24.440 --> 0:12:28.480 founder and CEO of Facebook, as quote a learning machine 0:12:28.960 --> 0:12:31.880 and pretty much that's how you're describing andrees. And it's 0:12:31.920 --> 0:12:36.079 interesting each of you have described you describing him, him 0:12:36.120 --> 0:12:39.760 describing Zuckerberg more or less in the same way. That's right. 0:12:40.240 --> 0:12:43.680 So so let's talk a little bit about um, the name. 0:12:43.760 --> 0:12:48.960 Where did the name Netscape come from? So the I 0:12:49.120 --> 0:12:54.360 had been keeping a notebook of possible names. I'd led 0:12:54.400 --> 0:12:59.440 brainstorming exercises with the engineering team, and we came up. 0:12:59.480 --> 0:13:02.079 We were just coming up with anything. The company was 0:13:02.120 --> 0:13:06.800 founded as Mosaic Communications. There was saber rattling about trademark 0:13:06.840 --> 0:13:10.679 infringement and lawsuits from from who else, from the University 0:13:10.679 --> 0:13:12.719 of Illinois. So Mark had been at the University of 0:13:12.760 --> 0:13:16.559 Illinois and it created the freeware product Mosaic There gotcha. 0:13:16.640 --> 0:13:19.640 That's that's not an unreasonable claim on their part. I 0:13:19.679 --> 0:13:24.319 agree with that. And so one day I was Jim Clark, 0:13:24.360 --> 0:13:26.480 Mark and Reason and Mike Homer, who was our new 0:13:26.600 --> 0:13:29.400 vice president of marketing, pulled me into Mark's office, which 0:13:29.480 --> 0:13:32.600 was a tiny little office with stacks of paper and 0:13:32.640 --> 0:13:35.680 boxes of honeycombs everywhere, and they said, this is critical. 0:13:35.960 --> 0:13:38.319 We really need to do something about it. And I've 0:13:38.400 --> 0:13:40.000 been working on it. We've all been working on it. 0:13:40.080 --> 0:13:42.600 We had nothing that was any good. And it literally 0:13:42.640 --> 0:13:47.600 just popped into my head that you've the this visual 0:13:47.679 --> 0:13:51.640 view of the Internet and the ability to navigate across it. 0:13:51.800 --> 0:13:55.520 And I said how about Netscape? And everyone looked around 0:13:55.559 --> 0:13:57.920 and they said, yeah, that might be it and we 0:13:58.000 --> 0:14:00.440 walked out of the room and that was it. Bank 0:14:00.640 --> 0:14:04.560 just like that. Yeah, that that's unbelievable. So Netscape goes 0:14:04.600 --> 0:14:10.480 public in nine fourteen months after the company was founded, 0:14:11.240 --> 0:14:14.920 which is an incredibly short period of time. Uh. People 0:14:14.920 --> 0:14:17.800 looked a little askance at it, thinking it was well, 0:14:17.840 --> 0:14:20.920 they have a business model, but look at the valuation. 0:14:20.960 --> 0:14:23.840 It just blew up on I p O. Was there 0:14:23.840 --> 0:14:29.360 any sense in that this was starting to become unhinged, 0:14:29.840 --> 0:14:32.480 or was that still so early days that hey, we 0:14:32.560 --> 0:14:34.960 rang the bell, let's move on to the business of 0:14:35.040 --> 0:14:38.000 running the company. It was really more the ladder, I 0:14:38.040 --> 0:14:40.640 think it was the way I think of it. There 0:14:40.640 --> 0:14:43.400 were kind of two phases of that bubble, and we 0:14:43.400 --> 0:14:47.240 were at the beginning of phase one. So we really 0:14:47.280 --> 0:14:49.800 did have a sense that we were doing something special 0:14:49.840 --> 0:14:51.600 and remarkable, that we were in the right place at 0:14:51.640 --> 0:14:56.640 the right time. And you know, it literally was siege mentality, 0:14:56.800 --> 0:14:59.440 and we were just after it every day, no room 0:14:59.520 --> 0:15:01.840 for rest, no room to think about it, sitting at 0:15:01.840 --> 0:15:05.080 the eye of the hurricane. But the company, if you 0:15:05.080 --> 0:15:08.200 think about it in the context of today's internet companies 0:15:08.280 --> 0:15:12.520 and technology companies, it had an eight billion dollar market cap, 0:15:12.560 --> 0:15:14.480 which is which is a big market cap, a little 0:15:14.560 --> 0:15:20.240 rich but but enormous potential, but enormous potential. It actually 0:15:20.280 --> 0:15:24.120 mainly drifted down, and then at the end the acquisition 0:15:24.200 --> 0:15:26.640 by A. O. L really was about an eight billion 0:15:26.680 --> 0:15:30.800 dollar acquisition, so it did end up getting back to 0:15:30.880 --> 0:15:33.720 that number, but it pretty quickly drifted down after it 0:15:33.760 --> 0:15:36.720 after the early days when you were at Netscape, after 0:15:36.800 --> 0:15:39.760 the I P. O. There was a tremendous amount of 0:15:39.840 --> 0:15:43.600 potential and it looked like, hey, this could be a 0:15:43.720 --> 0:15:48.040 giant company that really brings the Internet forward to the 0:15:48.520 --> 0:15:54.760 twentieth century until the beheamoth from Redmond's Washington named Microsoft, 0:15:54.840 --> 0:15:57.760 said hey, we want a piece of that. When did 0:15:57.800 --> 0:16:00.440 you guys realize that, oh, these guys is are really 0:16:00.440 --> 0:16:02.760 going to put a herd on us. It was about 0:16:02.760 --> 0:16:05.360 a year in. It was about a year in and 0:16:05.400 --> 0:16:07.760 they had started writing a little bit about it, and 0:16:07.800 --> 0:16:10.360 at some point we saw Bill Gates memo on it, 0:16:10.440 --> 0:16:13.880 and then you could really start to see them attempt 0:16:14.240 --> 0:16:16.040 to make a difference. And it took them out about 0:16:16.040 --> 0:16:18.400 another year to warm up. But by the end of 0:16:18.560 --> 0:16:22.520 year two they had gotten their guns trained on us 0:16:22.640 --> 0:16:27.040 and started having a pretty substantial impact on the business. 0:16:27.200 --> 0:16:32.960 What once they built Internet Explorer into Windows. Every piece 0:16:33.080 --> 0:16:36.320 in the world comes with their web browser. Why would 0:16:36.320 --> 0:16:41.720 anyone have to download Navigator? Well, it's particularly challenging if 0:16:42.080 --> 0:16:45.600 Steve Bamber Bill Gates is calling the CEO of your 0:16:45.720 --> 0:16:49.920 hardware manufacturer and telling them if you include Netscape Navigator, 0:16:50.240 --> 0:16:54.920 they'll stop selling you Windows. And hence the subsequent anti 0:16:54.960 --> 0:16:59.800 trust trial which ultimately Netscape. Was there a settlement, Well, yeah, 0:16:59.840 --> 0:17:03.480 there were no Ultimately there there was a settlement. It 0:17:03.520 --> 0:17:06.280 was frankly long. It was two years after the sale 0:17:06.280 --> 0:17:08.439 to a well, so it wasn't fast enough to have 0:17:08.520 --> 0:17:12.399 any useful impacts as old patent litigation and any trust 0:17:12.440 --> 0:17:16.680 litigation tends to be um And then eventually the any 0:17:16.680 --> 0:17:20.639 trust case was settled. And but that created a Cambrian 0:17:20.720 --> 0:17:25.360 explosion of people freed from the oppressive thumb of Microsoft. 0:17:25.920 --> 0:17:28.600 And at the same time you end up going to 0:17:28.760 --> 0:17:32.800 the starting uh as a venture capitalist. What was it 0:17:32.880 --> 0:17:36.440 like in the mid to late nineties when there was 0:17:36.480 --> 0:17:38.720 a lot of cash going to startups and a lot 0:17:38.760 --> 0:17:43.280 of innovation and software and semiconductor and hardware. That was 0:17:43.359 --> 0:17:45.399 really you know, it must have been an amazing period 0:17:45.400 --> 0:17:47.520 of time. It was an amazing period of time. So 0:17:47.560 --> 0:17:50.000 I started in September of ninety eight, so I think 0:17:50.000 --> 0:17:52.760 of that, I think remember the Asian Flu that period 0:17:52.760 --> 0:17:54.880 in there, so that's right when I started. And basically 0:17:54.920 --> 0:17:57.320 coming out of the Asian Flu was phase two of 0:17:57.359 --> 0:18:00.600 the bubble, which is about ten x on phase one 0:18:00.640 --> 0:18:04.080 of the bubble, and it really was quite insane. And 0:18:04.440 --> 0:18:07.040 did you realize you were in a bubble in real time, 0:18:07.040 --> 0:18:09.840 because everybody says, well, you know, you can only identify 0:18:09.880 --> 0:18:12.400 it after the fact, but you're right in the thick 0:18:12.440 --> 0:18:15.000 of it is are people looking around and saying, hey, 0:18:15.040 --> 0:18:20.560 we've valuations have become unhinged from reality. In nine and 0:18:20.680 --> 0:18:23.800 early two thousand, I think it was pretty clear. And 0:18:23.920 --> 0:18:26.399 so you know, one of my I was sitting with 0:18:26.440 --> 0:18:29.000 a very experienced group of investors and we were just 0:18:29.040 --> 0:18:31.760 looking at a whole bunch of things where you'd say, 0:18:32.200 --> 0:18:34.199 you know, we're not gonna We're just not gonna do it. 0:18:34.240 --> 0:18:36.560 We're not going to touch it if it goes into 0:18:36.600 --> 0:18:39.840 those into those kind of categories. But it's still the 0:18:39.880 --> 0:18:43.760 case that I can think of one specific example where 0:18:43.800 --> 0:18:47.480 someone was offering US fifty million dollars for a company, 0:18:47.520 --> 0:18:50.520 which was an irrationally high price, but that but the 0:18:50.560 --> 0:18:54.640 comps were much higher. In the end, the company turned 0:18:54.640 --> 0:18:57.239 down the acquisition and it, you know, ended up being 0:18:57.280 --> 0:19:00.240 worth less than a hundred million dollars. Regretted, regretted not 0:19:00.359 --> 0:19:02.639 selling into the bubble. That's right. So there's one of 0:19:02.680 --> 0:19:04.879 the one of the legends of the of the venture 0:19:04.920 --> 0:19:10.600 capital industry. When the bubble finally blew up, said basically, 0:19:11.040 --> 0:19:13.400 you know, thank God had ended, because I was just 0:19:13.520 --> 0:19:16.600 holding on to my principles, like I was just about 0:19:16.640 --> 0:19:19.520 to let go. I couldn't hold on anymore that that 0:19:19.960 --> 0:19:24.359 crowd enthusiasm. It's really easy to get swept up, both 0:19:24.400 --> 0:19:28.480 positively and negatively. When the crowd is surging. It's it's 0:19:28.600 --> 0:19:32.760 a siren call that is really difficult to resist. And 0:19:32.800 --> 0:19:36.679 it sounds like you successfully navigated that. I think it's 0:19:36.720 --> 0:19:39.960 an overstatement to say I said, well, so I you know, 0:19:40.040 --> 0:19:42.840 I was the new guy, and so you were a 0:19:42.840 --> 0:19:45.160 little cautious to begin with. Well, no, I would say 0:19:45.160 --> 0:19:47.159 that I was the new guy, so I was unencumbered. 0:19:47.160 --> 0:19:49.600 I mean, the venture capitalist is most dangerous when they 0:19:49.600 --> 0:19:52.919 start because you don't know very much and you've got 0:19:52.960 --> 0:19:55.200 a clean slate. You're not sitting on ten boards already. 0:19:55.600 --> 0:19:57.200 And I was the guy who knew the internet stack, 0:19:57.320 --> 0:20:00.760 so I wasn't doing crazy consumer internet things. It's still 0:20:00.800 --> 0:20:05.080 I made I went too quickly. I made nine effectively 0:20:05.119 --> 0:20:08.280 pre revenue venture capital investments over an eighteen month period. 0:20:08.320 --> 0:20:12.720 Early seed, very early stage. Yeah. Uh, you know in 0:20:12.840 --> 0:20:15.720 ninety nine there wasn't anything called the seed financing, so 0:20:15.760 --> 0:20:18.919 they were you know, Series eight financings and formation just 0:20:19.080 --> 0:20:21.880 very early. That's right. And so in Quinn Street, which 0:20:21.920 --> 0:20:23.720 is now a public company with three hundred million dollars 0:20:23.720 --> 0:20:26.000 in revenue, was the one that paid for the other eight. 0:20:26.160 --> 0:20:28.479 I have to ask you, Coast to Noah, there's nobody 0:20:28.520 --> 0:20:31.840 on your team page named Coasta Noah Where And I 0:20:31.960 --> 0:20:35.720 keep mangling unfortunately the name Where does the name Coasta 0:20:35.720 --> 0:20:38.399 Noah come from? So the Coast Sinowans are the Native 0:20:38.400 --> 0:20:41.320 American tribe that occupied from Big Sir all the way 0:20:41.359 --> 0:20:43.840 to the tip of the San Francisco Peninsula. And so 0:20:43.920 --> 0:20:47.600 it's a way of uh sort of situating both in 0:20:47.720 --> 0:20:53.000 place and also I think recognizing that, uh, the development 0:20:53.040 --> 0:20:57.239 of Silicon Valley is has layers and is built on 0:20:57.280 --> 0:21:00.119 the shoulders of giants. So we try to on are 0:21:00.359 --> 0:21:03.000 the old school craft of the past as well as 0:21:03.000 --> 0:21:06.080 having some ways in which we're uh modern and innovating. 0:21:06.520 --> 0:21:09.040 So one of the things we always hear about early 0:21:09.160 --> 0:21:13.080 mover advantages it's the second mass that gets the cheese. 0:21:13.400 --> 0:21:16.399 How accurate is that? Is there a big advantage to 0:21:16.480 --> 0:21:21.199 being first or is timing more important? So the answer, 0:21:21.359 --> 0:21:24.240 as in most things that involve investing, is it depends 0:21:25.040 --> 0:21:27.560 but I and so there are many examples of each. 0:21:28.280 --> 0:21:30.720 I do think it's the case that, you know, one 0:21:30.720 --> 0:21:33.359 of the things, you know, we in investing companies that 0:21:33.440 --> 0:21:35.320 change the way the world does business, but we are 0:21:35.400 --> 0:21:38.720 trying to focus on things that have platform capabilities that 0:21:38.800 --> 0:21:41.800 can build ecosystems. And I do think it is the 0:21:41.800 --> 0:21:46.000 case that when you're talking about platforms, it is often 0:21:46.040 --> 0:21:49.640 the case that the first mover to be in market 0:21:49.960 --> 0:21:54.160 and start attracting users and the data that comes with 0:21:54.200 --> 0:21:57.359 it and the applications that get built on top of 0:21:57.359 --> 0:22:00.399 it really does have a significant advantage. So you say 0:22:00.560 --> 0:22:03.159 you want to invest in companies that can change the 0:22:03.200 --> 0:22:07.119 world's of business, in what way? How can a startup 0:22:07.640 --> 0:22:11.360 or an early venture funded entity really have an impact 0:22:11.440 --> 0:22:15.199 on the giant world of business. It's amazing, actually the 0:22:15.280 --> 0:22:18.600 impact that they can have. So, for example, all companies 0:22:18.640 --> 0:22:22.280 that sell the businesses use a form of account based marketing. 0:22:22.280 --> 0:22:25.320 You sell the companies, not to individuals. And on the 0:22:25.320 --> 0:22:27.840 other hand, there wasn't really any way to do that 0:22:27.920 --> 0:22:31.920 in the context of online or digital advertising. So demand Base, 0:22:31.960 --> 0:22:35.359 which is a portfolio company, basically identified a way of 0:22:35.640 --> 0:22:38.719 matching those two pieces of data together and by the 0:22:38.720 --> 0:22:42.320 time they got distributed to hundreds of companies using it, 0:22:42.320 --> 0:22:44.760 it is a self refreshing data advantage. And it is 0:22:44.800 --> 0:22:48.280 now the platform for account based marketing. And there you know, 0:22:48.320 --> 0:22:51.600 Google isn't doing it, Facebook isn't doing it, Salesforce isn't 0:22:51.640 --> 0:22:54.560 doing it, Adobe isn't doing it, Oracle isn't doing it. 0:22:54.880 --> 0:22:57.080 And so it really is the case that you can 0:22:57.119 --> 0:23:00.040 sometimes take this kernel of an insight and turn it 0:23:00.040 --> 0:23:02.840