WEBVTT - Steve Case 0:00:08.600 --> 0:00:12.280 Welcome, Welcome, Welcome back to the Bob Left Sets podcast. 0:00:12.880 --> 0:00:17.000 My guest today is Steve Case who's chairman and CEO 0:00:17.360 --> 0:00:20.840 of the investment firm Revolution. You know him as co 0:00:21.120 --> 0:00:23.840 founder of a O L and he has a brand 0:00:23.920 --> 0:00:27.760 new book, The Rise of the Rest. Steve, thanks for 0:00:27.800 --> 0:00:30.240 being on the podcast. Great to be with you, Bob. 0:00:31.400 --> 0:00:35.000 What do you hope to achieve with this book? Well, 0:00:35.000 --> 0:00:37.120 I've been working on this effort for about a decade, 0:00:37.159 --> 0:00:40.839 trying to shine a spotlight on entrepreneurs all around the 0:00:40.840 --> 0:00:44.839 country that are building amazing companies in the process renewing 0:00:44.880 --> 0:00:49.120 their communities, creating job growth, economic growth. But their stories 0:00:49.159 --> 0:00:51.839 aren't really told, uh and most people don't really know 0:00:51.920 --> 0:00:54.920 what's happening in most of these cities. And so that 0:00:55.000 --> 0:00:58.480 was the reason to write the book. It was a 0:00:58.480 --> 0:01:01.760 long journey for me when we started a little over 0:01:01.800 --> 0:01:04.839 a decade ago working on this, initially on a policy 0:01:05.400 --> 0:01:09.800 kind of framework working for the President Obama and his 0:01:10.040 --> 0:01:12.520 Jobs Counsel, also cheering at a White House initiative called 0:01:12.520 --> 0:01:14.960 start Up America. And the more I looked at, the 0:01:15.000 --> 0:01:17.280 more I realized there was a problem we need as solved, 0:01:17.319 --> 0:01:19.480 but also an opportunity we should seize and so that's 0:01:19.520 --> 0:01:22.600 led me to this effort over the last decade of 0:01:22.640 --> 0:01:26.640 trying to help entrepreneurs in in these what we call 0:01:26.640 --> 0:01:28.839 the rise of the rest cities outside of the normal 0:01:29.640 --> 0:01:32.399 tech helps. For those who don't follow this, uh, if 0:01:32.400 --> 0:01:34.840 you look at the data, the venture capital data, about 0:01:34.840 --> 0:01:39.360 seventy of venture capital has gone to just three states, California, 0:01:39.400 --> 0:01:42.319 New York, and Massachusetts. The other forty seven states, they're 0:01:42.400 --> 0:01:45.800 kind of fighting over the remaining and we're trying to 0:01:46.360 --> 0:01:49.040 change that dynamic, get more of the capital backing more 0:01:49.040 --> 0:01:51.840 of those entrepreneurs and more of the cities around the country. 0:01:53.400 --> 0:01:56.080 So how bad or good are things in the other 0:01:56.120 --> 0:02:00.680 forty seven states. Well, it's a mixed bad and that's 0:02:00.720 --> 0:02:03.360 part of part of what I tried to explain the book. 0:02:03.800 --> 0:02:06.240 The bad is that for the last several decades, a 0:02:06.280 --> 0:02:10.200 lot of people in the middle of the country who 0:02:10.320 --> 0:02:12.760 wanted to be part of what we think of as 0:02:12.800 --> 0:02:17.880 the innovation economy, the tech sector, the startup sector, concluded 0:02:17.919 --> 0:02:19.640 they had to leave where they were to go to 0:02:19.639 --> 0:02:22.679 the coast because the action terms of other people, the 0:02:22.720 --> 0:02:25.320 action in terms of where the money was was in 0:02:25.360 --> 0:02:27.680 places like Silicon Valley, so that actually led to a 0:02:27.760 --> 0:02:30.840 brain drain in many parts of the other country. Um, 0:02:31.120 --> 0:02:33.800 and you know what, what we were hoping to see 0:02:33.840 --> 0:02:36.240 as a slowing of the brain drain and a kind 0:02:36.240 --> 0:02:38.959 of a boomerang of people returning to some of these cities. 0:02:38.960 --> 0:02:41.680 And some of that's been accelerated by the by the pandemic. 0:02:42.000 --> 0:02:44.520 So the talent has always been there, but the opportunity 0:02:44.560 --> 0:02:46.760 hasn't been there, and that's led to some of these 0:02:46.800 --> 0:02:50.600 you know, these dynamics. What's encouraging to me is just 0:02:50.720 --> 0:02:53.440 what's happened in the last few years. There's far more 0:02:54.280 --> 0:02:56.839 focus on these cities, and there was a decade ago. 0:02:56.919 --> 0:02:59.320 There's a lot of new venture firms that have started 0:02:59.400 --> 0:03:02.240 up in these rising cities. Fourteen hundred new venture firms 0:03:02.240 --> 0:03:04.959 have started in cities outside of San Francisco, outside of 0:03:04.960 --> 0:03:07.800 New York, outside of Boston. In these in these rising cities, 0:03:08.200 --> 0:03:11.600 there's a sixfold increase in the venture capital in those cities. 0:03:12.280 --> 0:03:15.680 But perhaps most importantly, there's now a recognition that some 0:03:15.720 --> 0:03:20.000 of the big potential opportunities for entrepreneurs and for investors 0:03:20.040 --> 0:03:23.359 in this next decade are going to be as sort 0:03:23.360 --> 0:03:26.400 of the Internet meets the real world. And big sectors 0:03:26.400 --> 0:03:31.000 like healthcare or food and agriculture are reimagined and disrupted, 0:03:31.480 --> 0:03:36.520 and in those sectors, expertise matters. Domain expertise matters, partnerships matter, 0:03:36.560 --> 0:03:38.560 and that's actually an advantage I think some of the 0:03:38.680 --> 0:03:41.520 entrepreneurs in these rising cities, even though they've been largely 0:03:41.560 --> 0:03:45.840 disadvantaged for the past, you know, a couple of decades. Wait, 0:03:45.960 --> 0:03:49.800 let's start with the framework. Let's start with the bus tours. 0:03:50.320 --> 0:03:54.280 So you pick a city where a multiple cities, you 0:03:54.360 --> 0:03:56.360 get people in a bus, you go and in each 0:03:56.360 --> 0:03:59.320 city you give a hundred thousand dollar investment to what 0:03:59.480 --> 0:04:03.320 you feel is the best startup. How did you come 0:04:03.400 --> 0:04:05.360 up with the idea and what are the logistics of 0:04:05.400 --> 0:04:09.240 the bus excursions? Well, the idea we started this a 0:04:09.280 --> 0:04:12.320 little over eight years ago, and the original idea was 0:04:12.800 --> 0:04:14.520 building on some of that work I mentioned with the 0:04:14.560 --> 0:04:17.240 White House to start up America effort. Why don't we 0:04:17.240 --> 0:04:19.640 just hit the ground and see what's happening in different 0:04:19.640 --> 0:04:22.800 cities around the country and in the process try to 0:04:22.839 --> 0:04:26.280 showcase some of the things that are positive developments in 0:04:26.279 --> 0:04:29.039 in in those cities and also see what we could 0:04:29.080 --> 0:04:32.360 do to help this next generation of entrepreneurs and so 0:04:32.880 --> 0:04:34.640 Frank we didn't quite know what we're going to get 0:04:34.680 --> 0:04:37.280 into what we did the first one, but we did 0:04:37.400 --> 0:04:42.200 a tour that included cities like Detroit and Pittsburgh, Cincinnati, Nashville. 0:04:42.200 --> 0:04:44.640 Those were the first ones we did, and we found 0:04:44.640 --> 0:04:47.880 it remarkable to see what's happening on the ground, to 0:04:48.040 --> 0:04:50.760 use the bus a little bit as a media prop 0:04:50.839 --> 0:04:53.560 to get attention and and you know, local media to 0:04:53.600 --> 0:04:56.640 pay more attention to the entrepreneurs, even getting national media. 0:04:56.640 --> 0:04:59.119 A few years ago, sixty Minutes Falls Around did a story, 0:04:59.160 --> 0:05:00.920 for example, So that was part of the reason to 0:05:00.920 --> 0:05:03.320 have a bus. Yeah, there was just practically to get 0:05:03.400 --> 0:05:06.200 between city and city and around the cities, visiting different 0:05:06.240 --> 0:05:09.799 companies and universities and so forth. The bus was helpful, 0:05:10.120 --> 0:05:12.880 but the thing was most helpful. And this was one 0:05:12.880 --> 0:05:15.599 of the things I didn't really fully appreciate going into it, 0:05:15.920 --> 0:05:19.160 was using the bus as sort of a platform to 0:05:19.320 --> 0:05:22.680 bring people together, a platform for convening. And in the 0:05:22.760 --> 0:05:25.760 cities we visited now it's it's dozens and dozens of cities, 0:05:26.320 --> 0:05:28.719 we found it really is important to make sure people 0:05:28.800 --> 0:05:31.440 in those cities are aware of what each other is doing. 0:05:31.520 --> 0:05:34.080 There's not as much of the connectivity that that you 0:05:34.320 --> 0:05:36.760 really need to have a thriving startup community. So the 0:05:36.760 --> 0:05:40.200 bus has been a helpful way to bring people together 0:05:40.320 --> 0:05:43.920 and within the community, as well as invite people from 0:05:44.000 --> 0:05:47.080 other places, either journalists from the coast or investors from 0:05:47.120 --> 0:05:49.320 the coast, to see firsthand what's happening in some of 0:05:49.320 --> 0:05:54.359 these cities. Okay, we literally talking like a music tour 0:05:54.480 --> 0:05:57.960 bus with sleeping bugs, etcetera. Now, not the bunks, not 0:05:58.080 --> 0:06:02.000 the bunks. We we we get we do, uh you know, 0:06:02.120 --> 0:06:04.640 least a tour of us that is generally used by 0:06:05.080 --> 0:06:09.520 musicians or politicians doing campaigns and so forth. And and 0:06:09.560 --> 0:06:12.400 we kind of wrap it with our logo of the 0:06:12.480 --> 0:06:15.320 Rise of the the Rest logo and and images and and 0:06:15.600 --> 0:06:17.600 so we do not sleep on the bus because we 0:06:17.800 --> 0:06:20.680 we do bring We packed the bus pretty full. Uh 0:06:20.720 --> 0:06:24.119 so it's not quite like a rock and roll tour bus, 0:06:24.160 --> 0:06:27.040 but it's certainly within the city. We do use it, 0:06:27.080 --> 0:06:29.440 as I said, to move around and also to bring 0:06:29.440 --> 0:06:33.320 people together. So on one of these typical ventures, how 0:06:33.320 --> 0:06:38.640 many people are inside the bus, Well, it's pretty full. 0:06:38.680 --> 0:06:40.760 I'm not sure what the I'm not sure I want 0:06:40.760 --> 0:06:43.560 to report the number because it probably breaks some fire codes, 0:06:43.600 --> 0:06:47.400 but we pack them in pretty pretty pretty tight. Uh. 0:06:47.560 --> 0:06:50.200 And as we're moving around, we have different people coming 0:06:50.240 --> 0:06:52.360 and going, sometimes a governor, of the mayor and the 0:06:52.440 --> 0:06:55.320 university president. CEO is a big company, you know, there 0:06:55.360 --> 0:06:57.880 are some of the people that we try to invite 0:06:57.920 --> 0:06:59.920 on So it's definitely does it's a dozen to people 0:07:00.040 --> 0:07:02.839 that are that are on the bus, and over the 0:07:02.880 --> 0:07:05.479 course of the time we're in a particular city, it's 0:07:05.560 --> 0:07:07.760 it's probably upwards to a hundred people that join us 0:07:07.760 --> 0:07:09.840 for some you know, some part of it. And then 0:07:09.840 --> 0:07:13.720 the events we do in different cities, including you mentioned. 0:07:13.760 --> 0:07:16.800 So we do a pitch competition. We invite companies in 0:07:16.880 --> 0:07:19.840 the city to apply it to pitch generally get you know, 0:07:19.880 --> 0:07:22.920 close to a hundred companies kind of putting their hands up, 0:07:23.280 --> 0:07:25.000 and then we have a team that picks the best 0:07:25.320 --> 0:07:27.840 date or ten to be on stage, and then we 0:07:27.880 --> 0:07:32.120 have a panel of judges that joins me in deciding 0:07:32.160 --> 0:07:34.240 which is the one that is most promising, and then 0:07:34.240 --> 0:07:36.720 we do invest in in that company and have found 0:07:36.760 --> 0:07:40.600 that others will because they're on stage and are telling 0:07:40.600 --> 0:07:43.160 their story to a bigger audience. Generally, you know, somebody 0:07:43.280 --> 0:07:45.480 three or four, five hundred people are at these events. 0:07:46.040 --> 0:07:48.560 Uh that many of the other companies also get you know, 0:07:48.640 --> 0:07:52.000 some some attention and sometimes some funding as well, but 0:07:52.160 --> 0:07:54.720 not just the winner. It's sort of it's it's trying 0:07:54.760 --> 0:07:57.920 to spotlight what's what's unique about some of these some 0:07:57.960 --> 0:08:02.360 of these cities, and how many other professional investors would 0:08:02.400 --> 0:08:06.240 be on one of these bus tours. Again, it depends 0:08:06.280 --> 0:08:08.960 on the city, depends on how many people join us 0:08:09.000 --> 0:08:12.360 in any particular time, but generally there for these tours, 0:08:12.440 --> 0:08:14.760 there's you know, a couple of dozen coastal investors that 0:08:14.840 --> 0:08:17.160 join us for some some part of it just trying 0:08:17.200 --> 0:08:20.400 to see firsthand what's what's happening and in some of 0:08:20.400 --> 0:08:24.720 these cities. Okay, you read the book and it appears 0:08:24.800 --> 0:08:28.240 like I'll use the term underground because many people are 0:08:28.320 --> 0:08:31.960 unaware of them. There's a startup scene everywhere you go. 0:08:32.200 --> 0:08:35.480 Is there a startup scene in every city in America? 0:08:36.080 --> 0:08:38.240 I wouldn't say there's a start up scene in every 0:08:38.320 --> 0:08:40.960 city in America, but it was definitely a startup scene 0:08:41.000 --> 0:08:44.800 in dozens of cities in America, and we obviously profiled 0:08:44.880 --> 0:08:46.840 quite a number of them. Uh in the book. We 0:08:46.880 --> 0:08:49.440 now have investments with our Rise of Rest Fund in 0:08:49.480 --> 0:08:52.360 a hundred different cities. Uh, and so it is much 0:08:52.559 --> 0:08:56.120 more widespread than people think. When I first started talking 0:08:56.160 --> 0:08:58.199 started talking about Rise of Rest, people say, oh, I 0:08:58.480 --> 0:09:02.600 got it. There's ttunities to back companies outside of Silicon 0:09:02.720 --> 0:09:05.400 Valley or New York City or Boston, which are where 0:09:05.400 --> 0:09:08.600 most of the action historically has been. But they assume 0:09:08.679 --> 0:09:11.079 it's like one or Tuesday. Well, maybe Austin is doing, 0:09:11.200 --> 0:09:14.320 you know, pretty well, or Chicago doing pretty well, or 0:09:14.360 --> 0:09:17.199 you know that there's no sense that it's actually dozens 0:09:17.200 --> 0:09:20.280 of cities that are showing real, real momentum in terms 0:09:20.280 --> 0:09:23.360 of what's happening in in in terms of startups and 0:09:23.800 --> 0:09:27.680 you know, the resulting benefits they can provide to the company. 0:09:27.800 --> 0:09:29.880 So that's been the real AHA moment for me as 0:09:29.880 --> 0:09:32.960 I've traveled around over the last decade, and that's certainly 0:09:33.000 --> 0:09:36.959 been the most common kind of feedback I get based 0:09:37.000 --> 0:09:38.600 on people who have read the book, as they are 0:09:38.600 --> 0:09:42.160 surprised that so many cities, each doing it in their 0:09:42.160 --> 0:09:46.320 own particular way, that really are emerging. So you're right, 0:09:46.360 --> 0:09:49.520 it's kind of like a little bit of a underground 0:09:49.600 --> 0:09:53.240 that is now becoming much more more visible now. You 0:09:53.320 --> 0:09:56.720 talk about universities in the book being a generation of 0:09:56.840 --> 0:10:00.520 talent and that talent staying in the city as opposed 0:10:00.520 --> 0:10:04.600 to going to the coast. But generally speaking, you invested 0:10:04.640 --> 0:10:09.240 in a hundred cities. What is creating the startup culture 0:10:09.360 --> 0:10:15.199 or you just can't keep startup entrepreneurs down. Well, entrepreneurs 0:10:15.240 --> 0:10:20.240 at the core see a problem and decide it's an 0:10:20.240 --> 0:10:23.959 opportunity and decided to do something about it, and for 0:10:24.000 --> 0:10:27.760 them that's starting a company. Um. And that insight in 0:10:27.880 --> 0:10:30.440 terms of seeing a problem and and believing it's a 0:10:30.679 --> 0:10:34.320 it's an opportunity, is something that's you know, pretty widespread, 0:10:34.360 --> 0:10:38.840 pretty universal. Uh, it's just that in certain places it's encouraged, 0:10:38.920 --> 0:10:42.280 in other places it's not. Some cases, actually it's discouraged. 0:10:42.320 --> 0:10:44.600 You know, entrepreneurship. Startups are viewed as kind of too 0:10:44.679 --> 0:10:48.000 risky in in some places. Uh. And that's what leads 0:10:48.040 --> 0:10:50.600 to this this dynamic we talked about before where people 0:10:50.640 --> 0:10:52.600 feel like they kind of have to get out of 0:10:52.640 --> 0:10:55.640 dots and where where they're living is not really conducive 0:10:55.760 --> 0:10:58.719 to starting a company. Uh, it is going to be 0:10:58.760 --> 0:11:01.160 able to attract the the money they need. They are 0:11:01.240 --> 0:11:03.000 gonna be able to track the talent they need to 0:11:03.000 --> 0:11:05.200 build a team, They're not going to be able to 0:11:05.280 --> 0:11:07.680 get the attention they need to really scale up, and 0:11:07.720 --> 0:11:09.160 so they feel like they have to leave, and I 0:11:09.160 --> 0:11:12.199 think that's sad. And so we're trying to create a 0:11:12.280 --> 0:11:15.040 dynamic where people really can decide where they want to live, 0:11:15.120 --> 0:11:17.240 decide where they want to you know, kind of build, 0:11:17.640 --> 0:11:19.840 as opposed of feeling like they have to be in 0:11:19.880 --> 0:11:22.960 a certain place where they really don't have kind of 0:11:23.000 --> 0:11:25.280 a shot. And there's some parallels. Obviously, you've done a 0:11:25.320 --> 0:11:29.280 great job over several decades obviously chronicling the music industry. 0:11:29.760 --> 0:11:32.200 There's some parallels there that there there was a time 0:11:32.240 --> 0:11:34.000 where if you wanted to be in the music industry 0:11:34.040 --> 0:11:35.840 you kind of had to be in in New York 0:11:35.880 --> 0:11:38.480 City or Los Angeles. So you're in the movie industry, 0:11:38.840 --> 0:11:41.280 you know, similarly, you kind of Hollywood was the place 0:11:41.320 --> 0:11:44.640 to be. If you're in the financial services industry, Wall 0:11:44.640 --> 0:11:47.160 Street was the place to be. And now over the 0:11:47.240 --> 0:11:50.839 last half century, while those cities still have a lead 0:11:50.920 --> 0:11:53.600 and there's still reasons to be their benefits to be there. 0:11:54.080 --> 0:11:57.200 You know, many ways you're creating music, many ways you're 0:11:57.240 --> 0:12:00.680 creating movies and you're less tethered to a tickler plate. 0:12:00.760 --> 0:12:04.480 That the tech industry is still largely tethered to Silicon Valley, 0:12:04.480 --> 0:12:07.000 and that's starting to change, and I think that change 0:12:07.040 --> 0:12:10.840 will accelerate in the next ten or twenty years. And 0:12:10.880 --> 0:12:13.079 that's a positive because one of the things that really 0:12:13.480 --> 0:12:16.199 surprised me when I first started working on this, as 0:12:16.200 --> 0:12:19.120 I said over a decade ago, uh, it was a 0:12:19.200 --> 0:12:22.160 two data points. One I mentioned that sevent venture Copita 0:12:22.240 --> 0:12:24.440 goes to three states. The other is that most of 0:12:24.480 --> 0:12:28.640 the jobs in this country are not created by small 0:12:28.720 --> 0:12:33.920 businesses or by big businesses, but by new businesses, companies 0:12:34.000 --> 0:12:37.839 under five years old, basically startups. That small business as 0:12:37.840 --> 0:12:40.960 a sector accounts for a ton of jobs. It's very important, 0:12:41.520 --> 0:12:44.600 but as a sector, it doesn't grow a lot of jobs. 0:12:44.600 --> 0:12:46.640 And it kind of makes sense because if a restaurant 0:12:46.640 --> 0:12:49.439 goes out of business, chances are some other restaurant will 0:12:49.440 --> 0:12:51.800 take over that space and will probably hire about the 0:12:51.800 --> 0:12:54.760 same number of people. Similarly, with the big companies of 0:12:54.800 --> 0:12:58.400 fortune companies, some are growing, but some are declining, and 0:12:58.480 --> 0:13:00.959 as a sector ends up being kind of, you know, 0:13:01.040 --> 0:13:03.439 kind of balances itself out so if you're going to 0:13:03.520 --> 0:13:07.440 create jobs, you've got to back new companies. And if 0:13:07.520 --> 0:13:10.200 if in order to start a company, it's not always 0:13:10.200 --> 0:13:12.520 required that you raise capital to start a company. Some 0:13:12.600 --> 0:13:14.840 are able to boostrap those companies, but most of the 0:13:14.840 --> 0:13:17.160 biggest companies that have had the most success, create the 0:13:17.160 --> 0:13:19.960 most jobs, create the most economic you know, kind of 0:13:20.000 --> 0:13:23.640 growth and vitality, do raise venture capital, well, then it's 0:13:23.679 --> 0:13:26.000 kind of a disconnect if if that capital is not 0:13:26.080 --> 0:13:29.920 available to most people in in in most places, and 0:13:29.960 --> 0:13:34.040 so leveling the playing field so that everybody who has 0:13:34.080 --> 0:13:36.520 an idea feels like they have a shot if they 0:13:36.520 --> 0:13:38.960 want to starting a company and they feel like they 0:13:38.960 --> 0:13:41.240 can do that wherever they are, as opposed to feeling 0:13:41.360 --> 0:13:44.120 like they're kind of left out and left behind and 0:13:44.200 --> 0:13:46.960 don't really have a shot at building and frankly a 0:13:46.960 --> 0:13:49.719 shot out the American dream is something I think it's 0:13:50.000 --> 0:13:54.120 important to address boast to maximize the number of innovations 0:13:54.160 --> 0:13:56.160 that come out of this country, the new ideas that 0:13:56.160 --> 0:13:58.560 that you know, kind of lead to the new companies 0:13:58.600 --> 0:14:02.040 and even lead sometimes the new industries. Uh. And it's 0:14:02.080 --> 0:14:04.400 also frankly the best way to maximize the likely of 0:14:04.400 --> 0:14:07.480 the United States continues to be the most innovative entrepreneur 0:14:07.600 --> 0:14:10.040 nation in the world. That's not you know, kind of guaranteed. 0:14:10.080 --> 0:14:13.120 There's some risk to you know, the United States, based 0:14:13.160 --> 0:14:16.920 on what's essentially been the globalization of entrepreneurship over the 0:14:17.000 --> 0:14:21.320 last a couple of decades or venture capital years ago 0:14:21.400 --> 0:14:23.600 was invested in the in the United States of global 0:14:23.680 --> 0:14:27.120 venture capital, and now it's in so other countries have 0:14:27.200 --> 0:14:31.000 figured out that innovation entrepreneurship is kind of the secret 0:14:31.040 --> 0:14:34.280 sauce that's kind of made America America, and they're trying 0:14:34.320 --> 0:14:37.840 to kind of kinta win the next industries. And so 0:14:37.920 --> 0:14:41.640 we need to double down on innovation entrepreneurship, and we 0:14:41.680 --> 0:14:43.400 need to do it in a more inclusive way, so 0:14:43.640 --> 0:14:46.480 not just certain people in certain places doing it really 0:14:46.520 --> 0:14:49.760 well and and other people in other places feeling kind 0:14:49.760 --> 0:14:53.760 of left out and left behind. Okay, in Silicon Valley, 0:14:53.800 --> 0:14:57.680 you had the transistory, had fair Child, so you grew up. 0:14:58.280 --> 0:15:02.000 These businesses grew up around tech, the logical innovation to 0:15:02.120 --> 0:15:05.960 begin with. To what degree is it a matter of 0:15:06.040 --> 0:15:10.360 like COVID where people work remote being one issue, so 0:15:10.440 --> 0:15:15.040 you can work anywhere, or do these locations actually come 0:15:15.120 --> 0:15:19.080 with advantages that you don't get on the coast. Uh. 0:15:19.240 --> 0:15:22.600 Both the first little backstory, even even if you look 0:15:22.600 --> 0:15:26.400 at the the early days of the Internet, when companies 0:15:26.440 --> 0:15:28.800 like mine AO all got started, we were in northern 0:15:28.840 --> 0:15:32.360 Virginia outside of Washington, d C. But that first wave 0:15:32.480 --> 0:15:35.520 of Internet, the first you know, kind of a couple 0:15:35.560 --> 0:15:38.080 of dozen companies that ended up playing a key role 0:15:38.120 --> 0:15:40.920 in building the Internet, building on ramps to the Internet 0:15:41.320 --> 0:15:44.480 were fairly regionally distributed. You know, as I mentioned, we 0:15:44.480 --> 0:15:47.160 were in the DC area. Hayes, the big modem company 0:15:47.320 --> 0:15:51.160 was in Atlanta. CompuServe one of the early online services 0:15:51.200 --> 0:15:56.040 with Columbus Ohio. IBMS PC operations were in boc Overton, Florida. 0:15:56.600 --> 0:16:00.600 Sprend the communications company was in Kansas City. Uh, you know, 0:16:00.640 --> 0:16:05.280 the Dell was in Austin. Microsoft actually started in Albuquerque 0:16:05.640 --> 0:16:09.120 until you know, they moved to Seattle. So the a 0:16:09.200 --> 0:16:11.520 lot of companies were all across the country. It was 0:16:11.600 --> 0:16:15.560 only in the last twenty years where it shifted from 0:16:15.720 --> 0:16:18.960 building the Internet to building software on top of the Internet. 0:16:19.720 --> 0:16:22.400 That's really when Silicon Valley grew to you know, kind 0:16:22.400 --> 0:16:25.640 of its prominence. Indeed, it's it's dominance I think in 0:16:25.720 --> 0:16:28.360 this next era, This next wave what I've called the 0:16:28.360 --> 0:16:31.840 Internet third wave. UH. It is sort of when the 0:16:31.880 --> 0:16:34.240 Internet meets the real world, and that's when some of 0:16:34.240 --> 0:16:36.680 these sectors that we've been talking about, like healthcare and 0:16:37.080 --> 0:16:40.160 food and others start getting disrupted. And some of the 0:16:40.200 --> 0:16:42.880 expertise you need and some of the credibility you need 0:16:42.880 --> 0:16:46.400 to establish partnerships in those sectors are you know, in 0:16:46.440 --> 0:16:50.000 the middle of country healthcare, for example, it depends on 0:16:50.080 --> 0:16:51.680 to see when you're trying to build there. But if 0:16:51.680 --> 0:16:55.120 you're trying to build a disruptive healthcare company, you're gonna 0:16:55.120 --> 0:16:59.400 need partnerships with hospitals so they actually integrate what you're building. 0:16:59.480 --> 0:17:01.960 And you know, you need to get doctors and nurses 0:17:01.960 --> 0:17:03.840 to actually use it, you need to get health plans 0:17:03.840 --> 0:17:07.359 to actually pay for it. Uh. And having some connection 0:17:07.440 --> 0:17:10.920 to that industry, some insights into that industry, some relationships 0:17:10.960 --> 0:17:13.960 with people in that industry likely will advantage you. If 0:17:13.960 --> 0:17:17.720 you're trying to get a deal with Cleveland Clinic in Ohio, 0:17:17.840 --> 0:17:21.080 or Mayo Clinic in Minnesota, or MD Anderson in Texas, 0:17:21.160 --> 0:17:24.440 there Johns Hopkins in Maryland, some of the key companies 0:17:24.480 --> 0:17:27.239 that could really help put your your company on on 0:17:27.280 --> 0:17:29.399 the map. So there is some value to these rising 0:17:29.440 --> 0:17:32.359 cities in this next era we're entering. But to the 0:17:32.400 --> 0:17:34.600 other part of your question, there absolutely is something that's 0:17:34.600 --> 0:17:38.200 happened during the pandemic where it has been a unlock. 0:17:38.840 --> 0:17:40.920 The sense that you had to be in certain places 0:17:41.040 --> 0:17:44.400 is less clear. There's clearly more flexibility in terms of 0:17:44.680 --> 0:17:46.520 how you live and where you live and how you work, 0:17:46.560 --> 0:17:49.639 and the whole idea of more hybrid work and remote 0:17:49.640 --> 0:17:53.600 work is opening an opportunity for people to decide where 0:17:53.640 --> 0:17:55.359 they want to live and not feel like they have 0:17:55.440 --> 0:17:57.320 to be in a certain place, and for companies, and 0:17:57.359 --> 0:17:59.960 as a result, you're seeing an acceleration of companies start 0:18:00.200 --> 0:18:02.480 in these these rise of rest cities. So I think 0:18:02.480 --> 0:18:05.399 it's it's both factors. This next era. There are certain 0:18:05.440 --> 0:18:08.960 cities that give you an advantage, but also there is 0:18:09.000 --> 0:18:12.880 this pandemic induced almost shake the snow globe moment where 0:18:12.920 --> 0:18:15.919 we're as a society trying to figure out this next chapter, 0:18:16.440 --> 0:18:28.639 and clearly flexibility is part of it. Okay, Historically the 0:18:28.680 --> 0:18:31.480 image of an inventor was a lone guy tinkering in 0:18:31.520 --> 0:18:36.120 the basement, But in the book you make a strong 0:18:36.240 --> 0:18:40.919 statement about network effects community. To what degree today is 0:18:41.000 --> 0:18:43.480 important to call on a team or does the loan 0:18:43.560 --> 0:18:47.919 inventor still have a role. Well, it is that the 0:18:48.000 --> 0:18:50.359 loan inventor is a little bit of a you know, 0:18:50.480 --> 0:18:54.720 kind of figment of imagination. Most important thing. You know, 0:18:54.760 --> 0:18:57.920 Thomas Edison a century ago was invented a lot of things, 0:18:57.960 --> 0:18:59.639 but he wasn't really doing it on his own. He 0:18:59.680 --> 0:19:03.200 always had teams that helped take those ideas and scale them. 0:19:03.520 --> 0:19:06.360 And certainly we've seen that in the work I've done, 0:19:06.440 --> 0:19:09.400 including with the with with a O. L. It required 0:19:09.440 --> 0:19:12.159 a mix of skill sets and I provided a certain 0:19:12.600 --> 0:19:15.480 kind of perspective, but I, you know, absolutely couldn't have 0:19:15.520 --> 0:19:17.720 done it on my own. It required a team, and 0:19:17.920 --> 0:19:21.320 I've learned that entrepreneurship is a team sport. As we 0:19:21.480 --> 0:19:25.960 enter this new era where the problems you're solving as 0:19:26.119 --> 0:19:31.280 entrepreneurs tend to be more complicated, more multifaceted, where partnerships 0:19:31.280 --> 0:19:35.359 do become more important, Even understanding policy often becomes more important. 0:19:35.920 --> 0:19:38.280 You've got to have a broader, broader skill set, and 0:19:38.320 --> 0:19:41.600 so that that is I think can increasingly be the 0:19:41.640 --> 0:19:45.720 story of entrepreneurship. Sometimes I think we celebrate the the 0:19:45.920 --> 0:19:48.720 entrepreneur too much and not the team that really takes 0:19:48.760 --> 0:19:52.520 that idea and turns it into something significant that that 0:19:52.680 --> 0:19:56.359 team should get more more attention. And there's also something 0:19:56.400 --> 0:19:59.960 which is part of your question to clustering of people. 0:20:00.200 --> 0:20:04.000 And you know there's something too. When a company is 0:20:04.080 --> 0:20:07.320 successful in a city, what we call a tent pole company, 0:20:07.480 --> 0:20:10.640 that leads to other success in that city. And we've 0:20:10.640 --> 0:20:13.080 seen that in the last couple of decades in Austin, 0:20:13.960 --> 0:20:17.200 the success of Dell there has really been helpful. The 0:20:17.320 --> 0:20:19.680 success to the south By Festival got a lot of 0:20:19.680 --> 0:20:22.520 people visiting Austin that otherwise within the visit of Austin, 0:20:22.960 --> 0:20:25.760 and as a result, it became a magnet for for 0:20:25.760 --> 0:20:29.160 for people. And now there's hundreds of companies that startups 0:20:29.160 --> 0:20:32.240 that have great success there and that was not the case, 0:20:32.359 --> 0:20:35.200 you know, to three decades ago. And so this tent 0:20:35.280 --> 0:20:40.120 pole company dynamic is critical. I mentioned Microsoft moving to Seattle. 0:20:40.720 --> 0:20:43.280 The only reason Microsoft moved to Seattle is the two founders, 0:20:44.240 --> 0:20:46.439 Bill Gates and Paul Allen, We're from Seattle and they 0:20:46.480 --> 0:20:48.760 want to go home. That's fun. They moved to Seattle 0:20:49.119 --> 0:20:53.199 at the time Seattle was struggling. It was overreliant on 0:20:53.240 --> 0:20:56.440 some industries that were in decline, uh and didn't really 0:20:56.440 --> 0:21:00.720 have a new act and you know, because Microsoft ended 0:21:00.800 --> 0:21:04.800 up scaling there and became a tech hub because Microsoft 0:21:04.880 --> 0:21:07.480 was there. Jeff Bezos actually got in a car left 0:21:07.480 --> 0:21:09.520 New York City to drive to Seattle when he was 0:21:09.560 --> 0:21:13.080 starting Amazon for one reason and one reason only. He 0:21:13.160 --> 0:21:15.920 was he wanted to hire some Microsoft engineers. So I figured, 0:21:15.920 --> 0:21:18.000 you can pick off some of those Microsoft people to 0:21:18.359 --> 0:21:21.840 build to build Amazon. Now, Amazon, of course has become 0:21:21.880 --> 0:21:26.920 a very successful company, also strengthened the Seattle startup ecosystem. 0:21:27.040 --> 0:21:29.600 So what was a struggling city just a few decades 0:21:29.640 --> 0:21:32.679 ago now is a thriving city. And the success of 0:21:32.720 --> 0:21:36.080 some companies leads others, you know, companies to start up, 0:21:36.080 --> 0:21:39.800 and some of the early employees at those companies, you know, 0:21:39.920 --> 0:21:42.000 want to be part of some new companies, or they 0:21:42.000 --> 0:21:44.160 had made some money on stock options want to invest 0:21:44.160 --> 0:21:47.240 in new companies. And it creates that positive kind of 0:21:47.280 --> 0:21:51.679 increasing returns network effect, kind of tipping point dynamic for cities. 0:21:51.720 --> 0:21:53.840 And that's one of the things we're seeing more of 0:21:54.000 --> 0:21:56.600 in recent years. And again that's part of the reason 0:21:56.720 --> 0:21:58.560 I even wrote the book because I think people don't 0:21:58.560 --> 0:22:02.679 realize what's happened in these cities, and I think they 0:22:02.680 --> 0:22:05.840 will be surprised and frankly also encouraged that there that 0:22:05.960 --> 0:22:10.280 this innovation economy in this next next chapter can be 0:22:10.359 --> 0:22:13.480 more inclusive. And that really ties also in, you know, 0:22:13.520 --> 0:22:16.680 at least a degree with some of the political dysfunction 0:22:16.800 --> 0:22:19.119 we have in this country where where you know, there 0:22:19.359 --> 0:22:21.600 were in these tribes and there are a lot of factors. 0:22:21.600 --> 0:22:24.600 Obviously I don't want to make it overly simplistic, but 0:22:24.680 --> 0:22:27.359 one of the factors is an opportunity gap where there 0:22:27.359 --> 0:22:29.960 are definitely people that are doing really well in some 0:22:30.000 --> 0:22:32.440 places and a lot of people, most people in most 0:22:32.440 --> 0:22:36.159 places are feeling left out. They are feeling left behind. 0:22:36.160 --> 0:22:39.760 They're not celebrating the disruption and Silicon Valley. They're kind 0:22:39.800 --> 0:22:42.080 of angry about it. And you know, we need to 0:22:42.680 --> 0:22:45.359 you know, kind of create more companies in their own 0:22:45.400 --> 0:22:48.560 cities that can create more jobs in those cities and 0:22:48.560 --> 0:22:51.720 create more opportunity and even more hope in those cities. 0:22:52.119 --> 0:22:54.080 And if we do that, that will be good for 0:22:54.119 --> 0:22:55.960 those cities, and also I think it can be good 0:22:55.960 --> 0:23:00.480 for the country more broadly. Shark take Nipause dive or 0:23:00.600 --> 0:23:03.359 negative for entrepreneurship in the kind I think and that 0:23:03.480 --> 0:23:06.199 positive it it's it's really opened people's eyes to the 0:23:06.320 --> 0:23:08.960 idea of starting a business and and you know, probably 0:23:08.960 --> 0:23:12.160 inspired a lot of people who might not otherwise even 0:23:12.280 --> 0:23:14.119 thought about it. And as people when I was growing up, 0:23:14.119 --> 0:23:16.480 I didn't know what an entrepreneur was until I was 0:23:16.480 --> 0:23:19.120 a little bit older. Uh, And so you know that 0:23:19.600 --> 0:23:22.040 I think is is a is a is a net 0:23:22.040 --> 0:23:24.800 positive just in terms of getting people thinking about things. 0:23:24.920 --> 0:23:27.800 And as I said before, maybe next time they see 0:23:28.720 --> 0:23:31.200 a problem they turned it into an opportunity. One of 0:23:31.200 --> 0:23:32.680 the stories I love it, and it's in the book 0:23:32.680 --> 0:23:35.280 as there's a mom living in a suburb outside of 0:23:35.359 --> 0:23:38.600 Indianapolis who five or so years ago was kind of 0:23:38.600 --> 0:23:42.320 worried about the water quality because in Flint, Michigan, there 0:23:42.400 --> 0:23:46.360 was a well publicized crisis about water quality and safety. 0:23:46.840 --> 0:23:49.119 And she said, I've got young kids. I want to 0:23:49.160 --> 0:23:51.359 test my water to I want to make sure that 0:23:51.400 --> 0:23:54.120 they're drinking safe water. So she called the water companies, 0:23:54.160 --> 0:23:55.600 I want to test my water and they said, what, 0:23:55.680 --> 0:23:59.159 we actually don't do that. I said, okay, and she 0:23:59.280 --> 0:24:03.960 called some other company that specialized in and in sort 0:24:04.000 --> 0:24:07.639 of industrial technologies. Uh and and said, I'd like to 0:24:07.680 --> 0:24:09.399 get my water tests and it will do that, but 0:24:09.400 --> 0:24:11.480 we're really set up to do that for big companies 0:24:11.480 --> 0:24:13.159 and it will cost you a thousands of dollars to 0:24:13.200 --> 0:24:15.160 test your water in your home, and so what makes 0:24:15.200 --> 0:24:17.679 no sense? So she said, well, this is crazy. I'm 0:24:17.720 --> 0:24:19.919 sure that other people like me or concerned about their 0:24:19.920 --> 0:24:22.840 water quality. And she started a company called one Water 0:24:23.240 --> 0:24:26.119 that created a very affordable way for people to inconvenient 0:24:26.160 --> 0:24:28.240 way for people to get their their water tested, and 0:24:28.280 --> 0:24:32.240 that outscaled. It's even providing some of these testing services 0:24:32.280 --> 0:24:35.040 to cities, including cities like like San Francisco. That was 0:24:35.119 --> 0:24:37.560 just somebody who saw a problem and and turn it 0:24:37.600 --> 0:24:41.000 in an opportunity. And so hopefully things like Shark Tank 0:24:41.200 --> 0:24:44.400 will open people's eyes that they see a problem rather 0:24:44.400 --> 0:24:47.520 than just talking about it or complaining about it, they 0:24:47.560 --> 0:24:50.960 maybe can do something about it by by starting a company. 0:24:51.040 --> 0:24:54.040 And increasingly because of what's been happening, they have more 0:24:54.119 --> 0:24:57.159 flexibility to do that anywhere they are as opposed to 0:24:57.160 --> 0:24:58.960 feeling like why I have this idea, I want to 0:24:58.960 --> 0:25:01.320 do something about it, but I really don't have any 0:25:01.560 --> 0:25:04.320 ability to do it. Because I'm you know, living in 0:25:04.359 --> 0:25:06.480 some part of the country that just is not well 0:25:06.520 --> 0:25:11.239 known for for startups and innovation and entrepreneurship, and that 0:25:11.320 --> 0:25:15.000 needs to change. Okay, let's talk about the basics on 0:25:15.080 --> 0:25:18.679 your side of the fence. Obviously, there are legendary venture 0:25:18.720 --> 0:25:22.639 capital firms in the Silicon Valley. They're well known ones 0:25:22.680 --> 0:25:25.119 in New York. Then you read about somebody who's got 0:25:25.200 --> 0:25:29.760 their own little fund. Tell me about the creation of 0:25:29.800 --> 0:25:35.040 the venture capital firm, whether there's competition amongst you, how 0:25:35.119 --> 0:25:39.080 the investment works, a revolution where you get your money 0:25:39.119 --> 0:25:44.240 to fund your funds. A couple of parts of that. First, 0:25:44.680 --> 0:25:49.159 venture capital as an industry as a sector is a 0:25:49.280 --> 0:25:52.720 relatively modern phenomenon. It's really the last fifty years that 0:25:52.760 --> 0:25:55.600 it emerged, and initially emerged in New York and then 0:25:55.640 --> 0:25:58.520 in San Francisco, then in Boston. That's part of the 0:25:58.520 --> 0:26:01.400 reasons why those cities have so strong in terms of 0:26:01.680 --> 0:26:05.600 where venture capitalists have clustered and therefore where entrepreneurs have 0:26:05.600 --> 0:26:10.359 have clustered. There's three ways people raise money for venture firms. 0:26:10.359 --> 0:26:13.480 The first is they've made some money from some other 0:26:13.600 --> 0:26:16.600 thing and start reinvesting. It goes back to this dynamic 0:26:16.720 --> 0:26:20.800 of of of having a successful company leads to people 0:26:20.840 --> 0:26:23.399 making money from that company, and some of them decided 0:26:23.440 --> 0:26:26.000 to invest in the next generation of entreprenurs. That's actually 0:26:26.080 --> 0:26:28.960 how I got started. After you know, starting a O L, 0:26:29.040 --> 0:26:32.600 I started making some investments and then I wrapped it 0:26:32.680 --> 0:26:34.639 up from there. So that's that's one way. They just 0:26:34.680 --> 0:26:38.199 have some access to you know, to the capital. A 0:26:38.320 --> 0:26:40.960 second way is in a more common way, is they 0:26:41.000 --> 0:26:47.119 tap into institutional investors, so big pension funds, university endowments. 0:26:47.119 --> 0:26:50.600 They're trying to maximize the return they get for those 0:26:50.680 --> 0:26:54.399 endowments so they can do more programs for their particular 0:26:54.680 --> 0:26:57.880 university or for the particular hospital. And so they are 0:26:57.920 --> 0:27:01.760 sort of professional investors that have a whole series investments. 0:27:01.760 --> 0:27:05.159 Obviously they have fairly diversified portfolio. But one part of it, 0:27:05.200 --> 0:27:07.760 and recently it's become a more important part of it, 0:27:07.800 --> 0:27:11.480 is investing in these private companies, uh, you know, the 0:27:12.200 --> 0:27:15.960 by terms of venture capital in in in particular. And 0:27:15.960 --> 0:27:18.240 there are also groups that are what are called fund 0:27:18.280 --> 0:27:21.560 of funds that also might make raise capital from some 0:27:21.680 --> 0:27:24.439 large investors and then kind of divate out to a 0:27:24.520 --> 0:27:28.120 group of of of smaller funds, so there's different ways 0:27:28.119 --> 0:27:29.960 you can raise that money. We did something a little 0:27:30.000 --> 0:27:34.400 bit different, uh, for this most recent Rise the Rest Fund. Historically, 0:27:35.040 --> 0:27:38.320 revolutions started initially where it was just money I was investing, 0:27:38.359 --> 0:27:41.520 so essentially my capital. Than about ten years ago, we 0:27:41.560 --> 0:27:44.119 opened it up to institutional investors and we have a 0:27:44.160 --> 0:27:48.159 Revolution Growth Fund and Revolution Inventors Fund investing companies like 0:27:48.600 --> 0:27:52.280 DraftKings and Sweet Green and Clear and and dozens of others. 0:27:52.320 --> 0:27:55.840 And that's with the support of institutional investors who are 0:27:56.240 --> 0:28:00.880 essentially investing alongside of us. For this more recent rights 0:28:01.000 --> 0:28:03.840 Rest furred, we just reached out to individuals and so 0:28:03.880 --> 0:28:08.960 we have very prominent successful entrepreneurs and investors executives who 0:28:09.000 --> 0:28:11.480 have joined us as investors in our Rise of Rest 0:28:11.680 --> 0:28:13.960 seed fund, which is investing in these cities all around 0:28:14.000 --> 0:28:17.280 the country. People like Jeff Bezos and Howard Schultz, and 0:28:17.920 --> 0:28:20.480 you know hedge fund people like Gray Dally, and private 0:28:20.520 --> 0:28:24.920 equity people like uh Henry Kravis, David Rubinstein, you know, 0:28:25.000 --> 0:28:29.439 venture investors like Jim Bryer and John Dorther, entrepreneurs like 0:28:29.480 --> 0:28:33.119 Sarah Blakeley and Tory Birch, and you know, you know 0:28:33.680 --> 0:28:36.720 Eric Schmidt Mike Milk and a great group of individuals 0:28:36.720 --> 0:28:39.960 who basically believe in this idea of the rise the 0:28:39.960 --> 0:28:42.880 rest believe that their entrepreneurs all across the country believe 0:28:42.960 --> 0:28:46.280 there's a disconnect between no ability for most people in 0:28:46.280 --> 0:28:48.600 most parts of the country to access venture capital. So 0:28:48.720 --> 0:28:53.800 are co investors with us in that particular fund? Do 0:28:53.960 --> 0:28:57.719 you personally know all those people or do someone on 0:28:57.760 --> 0:29:01.160 your team reach out? Are you more of a cerebral guy, 0:29:01.280 --> 0:29:04.800 you very social such that you have relationships with these 0:29:04.840 --> 0:29:09.960 investors and could just bring them up just because of 0:29:10.000 --> 0:29:12.960 what I've done over a number of decades, I've have 0:29:13.080 --> 0:29:16.400 built a pretty good network, so you know, I wouldn't 0:29:16.400 --> 0:29:18.720 say all there are a few people that invested. It 0:29:18.800 --> 0:29:21.440 was part of Rise Arrest too. I didn't know personally before, 0:29:21.520 --> 0:29:24.600 but the vast majority I didn't know personally, and many 0:29:24.640 --> 0:29:26.560 actually were aware of what we're doing, and we're kind 0:29:26.560 --> 0:29:29.360 of intrigued with what we're doing and express an interest 0:29:29.400 --> 0:29:32.240 and and and being investors alongside of it. So we 0:29:32.640 --> 0:29:36.680 structured something so uh, there's an ability for those people 0:29:36.760 --> 0:29:38.560 doing it's and it's super helpful if we're going around 0:29:38.600 --> 0:29:42.160 the country that you know some of these prominent successful 0:29:42.840 --> 0:29:46.120 entrepreneurs and investors you know, are are essentially backing them. 0:29:46.120 --> 0:29:48.160 When we make an investment in a company with our 0:29:48.240 --> 0:29:52.280 Rise Arrest Fund, it's it's it's really the these these 0:29:52.640 --> 0:29:55.520 dozens of other people are essentially investors in your company 0:29:55.520 --> 0:29:57.840 as well, and I think that's helpful. I guess people 0:29:57.960 --> 0:30:00.800 are some a little bit more more momentum when they're 0:30:00.880 --> 0:30:03.440 hiring people that they're they're more likely to join the company, 0:30:03.440 --> 0:30:06.680 and a little more momentum when they're they're trying to 0:30:06.720 --> 0:30:11.200 attract customers or partners, a little more momentum when they're 0:30:11.240 --> 0:30:14.760 trying to attract follow on investors. So having that that 0:30:14.920 --> 0:30:17.760 network I think has been been been quite helpful. But 0:30:17.920 --> 0:30:20.200 just me doing this personally, I don't think we've had 0:30:20.280 --> 0:30:23.920 nearly the same level of interest or attraction than having 0:30:24.000 --> 0:30:26.640 several other dozen people you're kind of joining us on 0:30:26.680 --> 0:30:30.120 this effort. Let's talk about venture capital in general, and 0:30:30.160 --> 0:30:32.520 revolution general is opposed to just the rise of the 0:30:32.600 --> 0:30:36.600 rest fun they're different stages of when people invest in 0:30:36.720 --> 0:30:40.280 recent horrowits another venture capital firm. It's famous for coming 0:30:40.320 --> 0:30:44.760 in late, So there's early tell us about the different 0:30:44.920 --> 0:30:49.280 stages you might invest in a company. Well, that the 0:30:49.960 --> 0:30:53.040 very earliest stage. You know, some think of it as 0:30:53.080 --> 0:30:56.640 sort of seed investment or angel investment, where you're raising 0:30:56.680 --> 0:30:59.719 a relatively small amount of money just to kind of 0:30:59.760 --> 0:31:02.520 get going, just to kind of get that idea on 0:31:02.600 --> 0:31:06.640 the playing field, build a initial product or service, and 0:31:06.680 --> 0:31:08.720 you know, hire a few people just to kind of 0:31:08.800 --> 0:31:13.200 get going. So that's called the seed stage. Uh, I 0:31:13.200 --> 0:31:15.360 think if it varies depending on what the company is, 0:31:15.440 --> 0:31:18.760 but yet seed state, you know, the investments generally are 0:31:18.800 --> 0:31:22.040 in the know, few hundred thousand dollar range. Sometimes it 0:31:22.080 --> 0:31:24.440 can be more, sometimes it can be less, but generally 0:31:24.520 --> 0:31:26.960 that's sort of the range that people are talking about. 0:31:27.440 --> 0:31:31.000 And then there's sort of the venture stage, which is 0:31:31.040 --> 0:31:35.000 the company is more developed and and the team is 0:31:35.400 --> 0:31:38.720 more assembled and uh there's a little bit more clarity 0:31:38.760 --> 0:31:43.160 regarding product market fit things like that. So there's still 0:31:43.360 --> 0:31:46.840 risk associated with it still is still a fledgling company, 0:31:47.400 --> 0:31:51.080 but at that point the company and the entrepreneur back 0:31:51.080 --> 0:31:53.440 in the company really feel like they need to raise 0:31:53.480 --> 0:31:56.520 more capital. Usually it's a few million dollars and that's 0:31:56.720 --> 0:32:00.200 a whole other group of venture firms to specialize at 0:32:00.200 --> 0:32:02.600 that stage. And then, as you said, there's a later 0:32:02.640 --> 0:32:05.880 stage where people think of as the growth stage, where 0:32:05.880 --> 0:32:08.920 the company really has you know, kind of got some traction. 0:32:09.000 --> 0:32:11.800 It's kind of a real business. It still needs more 0:32:11.840 --> 0:32:14.600 capital to expand it's still not yet profitable, but but 0:32:15.000 --> 0:32:17.840 it's clear that there really is an idea there, and 0:32:17.880 --> 0:32:20.760 that's the growth stage. And generally people are raising tens 0:32:20.760 --> 0:32:23.640 of million dollars in the in the growth stage, and 0:32:23.800 --> 0:32:26.800 more recently sometimes a lot more people. You know, some 0:32:26.840 --> 0:32:31.040 of the companies more recently have delayed going public and 0:32:31.200 --> 0:32:34.320 be able to raise you very large kind of private 0:32:34.400 --> 0:32:37.560 you know, late stage rounds before they go public. So 0:32:37.600 --> 0:32:39.440 the way to think about it is it, you know, 0:32:39.560 --> 0:32:42.200 kind of whether you're at the very early stage where 0:32:42.240 --> 0:32:44.719 you need some of that initial seed capital to just 0:32:44.800 --> 0:32:47.240 get going, or at the venture stage where you have 0:32:47.560 --> 0:32:50.080 a little bit more attraction but but do need some 0:32:50.080 --> 0:32:52.680 some capital and and also some expertise to help you 0:32:52.720 --> 0:32:56.200 build a company, or the somewhat later stage where you 0:32:56.280 --> 0:32:59.000 really do see a big opportunity and you really want 0:32:59.040 --> 0:33:01.440 to kind of put a foot on the accelerator and 0:33:01.720 --> 0:33:04.080 need the additional capital to hire more people or to 0:33:04.400 --> 0:33:07.000 spend more on marketing or whatever whatever. The you know, 0:33:07.000 --> 0:33:11.800 the focus might be and a revolution participated all those 0:33:11.800 --> 0:33:14.560 different levels, whether it be with different funds. Yeah, we do. 0:33:14.640 --> 0:33:16.760 We do, and then other firms do. There's some that 0:33:16.840 --> 0:33:19.240 just focused on one stage. But we we really want 0:33:19.280 --> 0:33:21.480 to be able to back entrepreneurs to kind of every 0:33:21.520 --> 0:33:23.680 stage of the of the journeys and but way so 0:33:23.760 --> 0:33:27.240 we have dedicated teams focused on that early seed stage, 0:33:27.440 --> 0:33:30.040 another dedicated team focused on the venture stage, and a 0:33:30.160 --> 0:33:33.800 third team focused on the on the growth stage. Okay, 0:33:33.800 --> 0:33:36.920 so you go into one of these cities and you 0:33:36.960 --> 0:33:39.360 start with X number of companies who would like to 0:33:39.360 --> 0:33:43.000 gain the hundred thousand dollars uh, and then you win 0:33:43.040 --> 0:33:46.400 to it down and then you ultimately award one company. 0:33:46.480 --> 0:33:49.000 What are you seeing there? Are you seeing a lot 0:33:49.040 --> 0:33:50.880 of you're an expert, are you seeing a lot of 0:33:51.000 --> 0:33:54.880 viable ideas? Were you're seeing only a couple? What is 0:33:54.920 --> 0:33:57.959 out there in the marketplace? Now, we're seeing a lot 0:33:57.960 --> 0:34:00.000 of ideas that of course a lot of them are 0:34:00.000 --> 0:34:02.320 are not great ideas. You get a mix. But by 0:34:02.360 --> 0:34:05.080 the time we our team kind of talks to people 0:34:05.160 --> 0:34:08.200 and filters it from the initial called hundreds in each 0:34:08.200 --> 0:34:11.120 city to the best ten. You know, the ten are 0:34:11.200 --> 0:34:14.520 are always pretty, pretty interesting, pretty compelling in some way 0:34:14.719 --> 0:34:17.600 or fashion. But one of the things that that we've 0:34:17.680 --> 0:34:20.680 learned as while the idea is important, obviously, it's it's 0:34:20.719 --> 0:34:22.759 sort of the core of what you're building is you 0:34:22.760 --> 0:34:26.000 need to understand what exactly you know is the is 0:34:26.040 --> 0:34:28.160 the goal? What is the vision? What kind of what 0:34:28.160 --> 0:34:31.080 what mountain are you trying to climb? What what you know? 0:34:31.120 --> 0:34:33.400 What what battle are you trying to fight? So it 0:34:33.440 --> 0:34:36.879 starts with that the vision, or it starts with the idea. Uh. 0:34:36.960 --> 0:34:39.840 You quickly realize that it's sort of and there's a 0:34:39.840 --> 0:34:45.000 Thomas Edison quote from a century ago. Vision without executionist hallucination. 0:34:45.320 --> 0:34:48.000 You quickly recognize it's how do you take that idea 0:34:48.040 --> 0:34:50.200 and really scale it? Which gets back to some of 0:34:50.200 --> 0:34:52.239 the things we talked about before that what what is 0:34:52.640 --> 0:34:55.120 the team dynamic and how does that really allow you 0:34:55.160 --> 0:34:58.640 to scale that. So when we're talking to entrepreneurs, whether 0:34:58.640 --> 0:35:00.799 it be in these pitch competitions and are just kind 0:35:00.800 --> 0:35:03.160 of one on one, we understand the idea, we also 0:35:03.200 --> 0:35:05.400 understand want understand the team that's going to turn that 0:35:05.480 --> 0:35:08.759 into a real a real business. Uh. And then you 0:35:08.800 --> 0:35:11.480 also need to have some evidence, particularly as you're looking 0:35:11.520 --> 0:35:13.719 at these some of the later stage investments that there, 0:35:13.800 --> 0:35:16.400 it really has competitive advantage with some people think of 0:35:16.480 --> 0:35:19.759 as competitive moats or something that is unique about what 0:35:19.800 --> 0:35:22.160 you're you're doing. And I also want to understand what 0:35:22.200 --> 0:35:24.000 some of the partnerships are that are allowing you to 0:35:24.320 --> 0:35:26.560 scale the business. So there are a number of different 0:35:26.560 --> 0:35:29.360 different factors, but it's really it starts with trying to 0:35:29.440 --> 0:35:33.239 understand what that big idea is and what's the what's 0:35:33.280 --> 0:35:36.160 the dynamic of the team that's going to execute against 0:35:36.160 --> 0:35:39.799 that idea and turn into a real business. Now they're 0:35:39.840 --> 0:35:44.240 these accelerators, and one is tech Stars and tex Stars 0:35:44.360 --> 0:35:47.680 Music started up a few years ago and they choose 0:35:47.719 --> 0:35:52.120 like ten companies and they come in and they want advisors, 0:35:52.160 --> 0:35:55.279 and I went in to advise, and just about all 0:35:55.320 --> 0:35:59.200 these people were delusional. They did not have an understanding 0:35:59.239 --> 0:36:02.279 of the landscape. They had a slight understanding of what 0:36:02.320 --> 0:36:05.440 was going on, but it wasn't a practical understanding. And 0:36:05.480 --> 0:36:07.920 there were one or two that I thought were could 0:36:07.920 --> 0:36:13.200 possibly be viable, and then ultimately none has really broken 0:36:13.280 --> 0:36:18.000 through on any big level. There's a number of questions here. One, 0:36:18.560 --> 0:36:21.919 you know, to what degree to people know the landscape 0:36:21.920 --> 0:36:25.320 and our sophisticated maybe, and then there's timing. There's a 0:36:25.360 --> 0:36:28.680 lot of investment capital in vtric capital UH. In the 0:36:28.760 --> 0:36:32.640 music business years ago, most people lost all their money. 0:36:33.000 --> 0:36:34.759 As I sit here right now, I don't see a 0:36:34.800 --> 0:36:41.040 ton of opportunity. So what is the landscape do? Is 0:36:41.080 --> 0:36:45.200 it about choosing the right vertical? Is it about having 0:36:45.239 --> 0:36:48.800 expertise in some area that you're matching with the vertical 0:36:49.040 --> 0:36:52.319 or understanding that vertical? Look, I know that there are 0:36:52.360 --> 0:36:56.520 no strict rules, but give us some insight. Well, I 0:36:56.560 --> 0:36:59.520 think it's involving. I think it's an interesting, interesting, wait 0:36:59.560 --> 0:37:02.960 your friend question, because in Silicon Valley there's sort of 0:37:02.960 --> 0:37:09.600 this uh truism that the biggest disruptors often go into 0:37:09.680 --> 0:37:14.160 a new industry knowing nothing about it, and as a result, 0:37:14.640 --> 0:37:17.919 they see things that people in the industry don't see, 0:37:18.000 --> 0:37:20.920 have insights in terms of different products or services, just 0:37:21.000 --> 0:37:24.720 different way of doing things, and as a result having 0:37:24.760 --> 0:37:29.360 that fresh perspective, having that almost naive perspective and asking 0:37:29.440 --> 0:37:33.520 sort of basic kind of questions and looking for kind 0:37:33.560 --> 0:37:36.719 of emerging opportunities, they're able to build some some very 0:37:36.800 --> 0:37:40.840 significant companies. And there are many examples of that. That PayPal, 0:37:40.920 --> 0:37:42.879 which twenty years ago was one of the first really 0:37:42.880 --> 0:37:47.280 successful you know, you know, digital payment companies. Elon Musk 0:37:47.360 --> 0:37:50.799 and others were part of that. None of the team 0:37:50.880 --> 0:37:55.080 really understood the financial service industry or the credit card industry, 0:37:55.120 --> 0:37:57.279 and they were able to do some things because of 0:37:57.320 --> 0:38:01.480 that naivete that allowed them to to to be successful. 0:38:01.560 --> 0:38:04.560 More recently, you know, ten fifteen years ago, a similar 0:38:04.640 --> 0:38:07.920 dynamic happening with Airbnb. The you know, the founders there 0:38:08.280 --> 0:38:11.920 didn't really understand the hotel industry, the hospitality industry, so 0:38:12.320 --> 0:38:14.440 they came up with what most people thought was sort 0:38:14.480 --> 0:38:16.960 of a crazy idea, but it turned out to be 0:38:16.960 --> 0:38:19.960 a great idea. So there's definitely that thread, that that 0:38:20.160 --> 0:38:24.840 stream where those fresh perspectives are are important. Those fresh 0:38:24.880 --> 0:38:29.200 insights are important and can lead to great entrepreneurial success stories. 0:38:29.800 --> 0:38:32.440 But there's also another dynamic, and this I think is 0:38:32.480 --> 0:38:35.040 becoming increasingly important. It goes back to some of the 0:38:35.040 --> 0:38:39.239 things we're talking about earlier that in industries, whether you're 0:38:39.280 --> 0:38:42.640 talking about the music industry or the healthcare industry, or 0:38:42.719 --> 0:38:47.680 the agriculture industry or the sports industry, there are many 0:38:47.760 --> 0:38:51.360 industries where in order to be successful, you have to 0:38:51.440 --> 0:38:54.880 go beyond having that insight and actually be able to 0:38:54.920 --> 0:38:59.480 build partnerships to be be get real scale. Otherwise you 0:38:59.520 --> 0:39:02.320 don't really have much success. Going back to the example 0:39:02.360 --> 0:39:05.120 I mentioned in in health care, if you built really 0:39:05.160 --> 0:39:09.799 cool software, but you couldn't get hospitals to partner with you, 0:39:10.120 --> 0:39:13.520 what's the point. And so increasingly you need to have 0:39:13.680 --> 0:39:17.640 the balance the blend of some of that fresh perspective, 0:39:18.080 --> 0:39:21.440 but also have some real expertise in in the industry. 0:39:21.440 --> 0:39:24.360 That's probably why in terms of tech stars, because you 0:39:24.400 --> 0:39:27.080 have expertise in the industry, they said, let's bring some 0:39:27.160 --> 0:39:31.000 people together that can help these entrepreneurs and complement some 0:39:31.120 --> 0:39:34.200 of the perspectives they might bring by bringing some of 0:39:34.239 --> 0:39:37.680 the real world insights that come from that that that industry. 0:39:37.719 --> 0:39:40.399 I think that balancing act is going to become much 0:39:40.440 --> 0:39:43.440 more important in the next ten or twenty years. And 0:39:43.440 --> 0:39:46.759 and occasionally they'll still be companies that launch where the 0:39:46.760 --> 0:39:49.879 people within the company know nothing about the industry they're 0:39:49.880 --> 0:39:53.000 trying to disrupt, but more often at least some members 0:39:53.000 --> 0:39:55.920 on the team will bring that perspective, bring that the 0:39:55.960 --> 0:39:59.200 credibility that comes with that. That will result in some 0:39:59.280 --> 0:40:02.640 of those companies being much more successful because they have 0:40:02.920 --> 0:40:04.799 on their teams, or on their boards, or in their 0:40:04.800 --> 0:40:08.080 investor groups, or somewhere in their in their network, some 0:40:08.120 --> 0:40:11.080 of the people that really are able to to take 0:40:11.160 --> 0:40:15.320 that idea and scale it, in part by building partnerships 0:40:15.360 --> 0:40:17.360 with people in the industry that will ask some of 0:40:17.400 --> 0:40:21.120 the basic questions that anybody industry would would not ask. 0:40:22.200 --> 0:40:26.400 To what degree do you encounter headstrong entrepreneurs? Here's an 0:40:26.440 --> 0:40:29.839 analogy between the music business. You find someone who says, 0:40:29.880 --> 0:40:32.480 I want to be successful, and if you try to 0:40:32.480 --> 0:40:34.399 give them any advice, say no, no, no, I gotta 0:40:34.440 --> 0:40:36.840 do it my own way, and you end up rolling 0:40:36.840 --> 0:40:42.080 your eyes. Do you encounter that in your ventures companies? Sure, 0:40:42.080 --> 0:40:44.719 And it's a balancing act. We want entrepreneurs who are 0:40:45.360 --> 0:40:49.560 you know, confident and passionate, and you know, have strong 0:40:50.360 --> 0:40:54.840 convictions and and a strong perspective on how the world's 0:40:54.840 --> 0:40:56.879 gonna change, how the market's going to change, why that's 0:40:56.880 --> 0:41:01.720 going to create opportunities and and evangelists for their idea 0:41:01.800 --> 0:41:04.759 and can recruit other people to their team and so forth. 0:41:04.800 --> 0:41:08.040 So you definitely want that that that competence, But I 0:41:08.080 --> 0:41:11.160 do think it's helpful to balance that at least a 0:41:11.160 --> 0:41:13.440 little bit of humility, a little bit of listening, a 0:41:13.480 --> 0:41:15.320 little bit of maybe I don't have all the answers, 0:41:15.360 --> 0:41:18.279 and and but sure we've we've backed a whole mix 0:41:18.320 --> 0:41:21.920 of entrepreneurs over the over the years and find the 0:41:21.920 --> 0:41:24.880 ones that are at least the best fit for us, 0:41:24.920 --> 0:41:26.880 and you know, usually the most successful. The ones that 0:41:26.920 --> 0:41:30.480 are you know, have pretty strong views, but also recognize 0:41:30.520 --> 0:41:34.719 that there's value to to listening and engaging with with 0:41:34.760 --> 0:41:38.399 others and that helps them refine their ideas. Ultimately they 0:41:38.440 --> 0:41:41.719 can be be more successful because of that, that that 0:41:41.800 --> 0:41:51.680 team dynamic. Now, if I win and I get a 0:41:51.760 --> 0:41:55.520 hundred thousand dollars, do you wave and take the bus off? 0:41:55.520 --> 0:41:57.560 And that's the last they ever hear of you? Or 0:41:57.600 --> 0:42:01.200 how involved are you in the company you invest? Now? Well, 0:42:01.200 --> 0:42:03.000 first of all, I should say we started these bus 0:42:03.000 --> 0:42:06.000 tours we talked about earlier eight years ago. We've done 0:42:06.360 --> 0:42:09.560 eight bus tours and visited over forty cities and done 0:42:09.600 --> 0:42:13.440 over forties pitch competitions. Uh, but I said earlier, we 0:42:13.560 --> 0:42:17.640 also invested about two hundred companies and hundred cities, So 0:42:18.040 --> 0:42:21.319 most of our investments are in companies we did not 0:42:21.480 --> 0:42:24.320 meet via bus tours, and most of our investments in 0:42:24.400 --> 0:42:26.719 cities that we haven't visited on our bus tours. So 0:42:26.880 --> 0:42:30.080 initially it was about the bus tours and the pitch competitions, 0:42:30.120 --> 0:42:32.279 but as we saw more and more opportunity, we kept 0:42:32.280 --> 0:42:36.200 extending this. This network of over three hundred regional venture 0:42:36.200 --> 0:42:39.520 firms we co invest with that has been a source 0:42:39.560 --> 0:42:42.480 of more opportunities. But answer your question, I do get 0:42:42.480 --> 0:42:44.840 involved with the companies. I get more involved with the 0:42:44.840 --> 0:42:46.680 companies at the later stage, and I do at the 0:42:46.760 --> 0:42:49.520 earlier stage. But we have a whole team here that's 0:42:49.520 --> 0:42:52.960 focused specifically on working with the companies at the earlier stage. 0:42:53.000 --> 0:42:55.840 We host regular summits who we call Rise of the 0:42:55.840 --> 0:42:59.080 Rest summits, bringing the entrepreneurs together that we're back bringing 0:42:59.080 --> 0:43:02.520 the investors we've how invested with, back bringing the community 0:43:02.520 --> 0:43:06.160 startup community leaders in different cities altogether to to learn 0:43:06.200 --> 0:43:09.440 from each other. So I'm certainly actively involved in this. 0:43:09.600 --> 0:43:11.279 I'm working as hard as I was when I was 0:43:11.360 --> 0:43:13.839 running a well twenty plus years ago, and it's it's 0:43:13.880 --> 0:43:18.200 because it's a lot of fun. So you know, obviously 0:43:18.239 --> 0:43:21.600 the cities should go to the uh you're there with 0:43:21.680 --> 0:43:23.960 the bus there's other people who have you know, combed 0:43:24.000 --> 0:43:27.799 through the companies, but the people ever just knock on 0:43:27.880 --> 0:43:31.120 your door. And for those who have knocked on your door, 0:43:31.360 --> 0:43:34.880 have any of them been good and you've invested in them? Yeah. 0:43:34.960 --> 0:43:37.040 A bunch of I wanted to particularly read about in 0:43:37.040 --> 0:43:39.360 the book is entreprene Jonathan Webb just showed up at 0:43:39.360 --> 0:43:42.279 our office here in Washington, c kept kept pestering the 0:43:42.320 --> 0:43:44.160 people to you know, get a meeting. You know, we 0:43:44.239 --> 0:43:47.120 finally got a meeting. Uh. And initially, you know, we 0:43:47.200 --> 0:43:49.320 thought what you had in mine was a little a 0:43:49.320 --> 0:43:51.880 little crazy, But the more we've listened to them, the 0:43:51.920 --> 0:43:55.000 more we became convinced it was actually a pretty interesting idea. 0:43:55.040 --> 0:43:57.440 And that's gone to you know, create a company in 0:43:57.560 --> 0:44:01.680 eastern Kentucky called app Harvest. UH. That went from an 0:44:01.680 --> 0:44:04.160 idea on a napkin, and we provided some of the 0:44:04.200 --> 0:44:07.080 initial you know, an initial hundred thousand dollars of capital 0:44:07.080 --> 0:44:10.040 to get that idea going and now raised a couple 0:44:10.080 --> 0:44:13.880 hundred million dollars and and have scaled. That's it's about. 0:44:14.040 --> 0:44:17.480 It's in the egg tech sector, agriculture technology sector. They've 0:44:17.520 --> 0:44:20.880 now built the largest indoor greenhouse in America and They 0:44:20.960 --> 0:44:25.839 built it in eastern Kentucky outside of Lexington. Uh. They 0:44:25.920 --> 0:44:29.160 picked that site in part because seventy of the US 0:44:29.239 --> 0:44:31.600 population is with the twenty four hour drive, so that 0:44:32.000 --> 0:44:34.960 fruits and vegetables can get the market quickly. They designed 0:44:34.960 --> 0:44:37.480 it so it uses ninety less water, so it's much 0:44:37.520 --> 0:44:42.080 more sustainable, good for the climate. And did it specifically 0:44:42.120 --> 0:44:44.520 there because that area is known as Apple h a 0:44:44.560 --> 0:44:47.800 coal country which for decades has been in decline and 0:44:47.800 --> 0:44:50.320 it really seen some real challenges as the coal industry 0:44:51.239 --> 0:44:55.360 largely disappeared. Uh. And so Jonathan had this idea for 0:44:55.440 --> 0:44:59.400 creating a company that can could scale, but also creating 0:44:59.560 --> 0:45:02.319 jobs in a community that has felt, you know, kind 0:45:02.360 --> 0:45:05.040 of left left left behind. And so that was one 0:45:05.040 --> 0:45:07.200 example of somebody just kind of knocked on our door, 0:45:07.239 --> 0:45:09.400 heard about what we were doing, and wanted to be 0:45:09.480 --> 0:45:11.239 part of it. And as I travel around, I spent 0:45:11.280 --> 0:45:14.040 a good bit of time obviously not doing the pandemic, 0:45:14.080 --> 0:45:16.040 but in the last year year and a half, been 0:45:16.080 --> 0:45:19.080 a good bit of time traveling around the country meeting 0:45:19.120 --> 0:45:21.239 people and you know, always like you know, people come 0:45:21.320 --> 0:45:24.040 up to me with ideas and uh, you know, sometimes 0:45:24.120 --> 0:45:27.040 they're they're really interesting and we have follow on meetings. 0:45:27.040 --> 0:45:30.719 Sometimes you're less interesting and and I try to be 0:45:30.880 --> 0:45:34.280 polite and figuring out a way to to to pass. 0:45:34.360 --> 0:45:36.440 But you know, it's one of the great things about 0:45:37.320 --> 0:45:43.640 entrepreneurship is is people having these ideas, these sparks of imagination, 0:45:43.800 --> 0:45:46.080 and then wanting to turn them into something. And so 0:45:46.600 --> 0:45:48.879 after many years, I was early years of a oh well, 0:45:48.920 --> 0:45:51.080 and we just got started. I was still in my twenties, 0:45:51.480 --> 0:45:52.960 you know, I would you go up to people at 0:45:53.000 --> 0:45:55.719 conferences and start pitching my idea, and you know, most 0:45:55.719 --> 0:45:58.480 people ignored me. A few people listened, and that sometimes 0:45:58.600 --> 0:46:02.480 led to some partnerships ended up being very helpful to us. 0:46:02.520 --> 0:46:05.440 And so having lived through that, I recognize I have, 0:46:05.920 --> 0:46:09.879 you know, an opportunity and degree of responsibility to help 0:46:09.920 --> 0:46:12.600 this next generation of entrepreneurs. So I'm always open to 0:46:12.680 --> 0:46:17.880 getting pitched by anybody. Okay, this comes down to the money. 0:46:17.920 --> 0:46:21.439 With money comes power. What kind of deals do these 0:46:21.600 --> 0:46:25.759 entrepreneurs get when you invest money in UH and how 0:46:25.800 --> 0:46:28.600 heavily is it negotiated. There's no such thing as a 0:46:28.640 --> 0:46:33.480 standard deal, but are there general splits and things like that? Now, 0:46:33.600 --> 0:46:36.560 they vary pretty dramatically, and it obviously depends on what 0:46:36.600 --> 0:46:38.799 we're going back to before talking about the stage as 0:46:38.800 --> 0:46:41.320 a seed stage, the venture stage, that the growth stage. 0:46:41.360 --> 0:46:44.719 It varies on the earliest stage of seede stage. A 0:46:44.920 --> 0:46:47.200 strategy there with with the Rise of Rest has been 0:46:47.239 --> 0:46:51.359 the partner with other venture firms that are located in 0:46:51.400 --> 0:46:54.160 these cities all across the country, so they really take 0:46:54.200 --> 0:46:56.879 the lead in setting the terms of the deal, evaluation 0:46:56.960 --> 0:47:00.040 and things like that, and then we're participating in in 0:47:00.040 --> 0:47:02.600 in those rounds and then connecting the people were working 0:47:02.600 --> 0:47:05.759 with together in the ways I talked about before. On 0:47:05.800 --> 0:47:09.680 the later stage funds like the Revolution Ventures and Revolution Growth. 0:47:10.000 --> 0:47:12.399 There we we do lead the round, we do get 0:47:12.400 --> 0:47:15.480 more involved, including taking board seats of the companies were back, 0:47:15.560 --> 0:47:17.640 so we really can help them terms of scaling those 0:47:17.719 --> 0:47:21.839 those businesses, uh, and those tend to be more negotiated 0:47:21.920 --> 0:47:25.000 based on kind of what the stat status the business is, 0:47:25.040 --> 0:47:29.680 what the comparable companies, what valuations are of comparable companies, 0:47:29.880 --> 0:47:33.319 particularly the public markets. So it's it's a little more 0:47:33.320 --> 0:47:36.399 complicated to get to the kind of a win win, 0:47:36.680 --> 0:47:39.640 you know, veal where where it makes sense for for 0:47:39.800 --> 0:47:42.240 us as investors and also makes sense for the companies. 0:47:43.320 --> 0:47:47.760 Our entrepreneurs born or they built a little bit of both. 0:47:48.040 --> 0:47:50.560 I think early on, I think the general view was 0:47:50.600 --> 0:47:53.719 they're probably born, but I've had and I was one 0:47:53.760 --> 0:47:56.239 that I think in retrospect, I was kind of born 0:47:56.280 --> 0:47:58.080 in entrepreneur and if I didn't know what it was 0:47:58.120 --> 0:48:00.759 at the time, but I've also had the experience of 0:48:00.760 --> 0:48:03.319 meeting lots of people who had great success and and 0:48:03.440 --> 0:48:05.439 kind of came to it later in life, and so 0:48:05.600 --> 0:48:08.120 you know, it was not something they really were you know, 0:48:08.360 --> 0:48:11.160 familiar with, or not a path they were pursuing, but 0:48:11.920 --> 0:48:15.080 they stumbled into some opportunity that where they were able 0:48:15.080 --> 0:48:18.360 to turn into a company, including some of the most 0:48:18.440 --> 0:48:21.240 you know, celebrated, you know, success stories in the last 0:48:21.280 --> 0:48:26.160 you know, half century, things like McDonald's right Croc basically 0:48:26.400 --> 0:48:28.799 was you know, took the idea of McDonald's when he 0:48:28.840 --> 0:48:33.400 was selling milkshake mixers, you know, two different restaurants, and 0:48:33.440 --> 0:48:36.200 as you know, a couple of McDonald brothers somewhere in 0:48:36.280 --> 0:48:39.360 southern California were started ordering a lot of his mixers, 0:48:39.400 --> 0:48:41.640 and they said, huh, why are they ordering so many 0:48:41.680 --> 0:48:44.279 of my mixers? And so visited them and I saw 0:48:44.400 --> 0:48:47.360 what was essentially the first or one of the first 0:48:47.400 --> 0:48:50.600 fast food restaurant concepts, and that's why they were ordering 0:48:50.640 --> 0:48:53.120 so many of them because they were they were designed 0:48:53.120 --> 0:48:56.560 the restaurant to to basically do high volumes, and got 0:48:56.560 --> 0:48:59.200 more intrigued and so eventually bought the you know that 0:48:59.280 --> 0:49:01.840 you know, the rand and and sort of the some 0:49:01.960 --> 0:49:05.960 of the core ideas and turned that into McDonald's. And 0:49:06.080 --> 0:49:08.279 he was in his fifties when he did that. Sam 0:49:08.320 --> 0:49:12.040 Walton started a little store in Bentonville, Arkansas, you know, 0:49:12.600 --> 0:49:17.080 and just with the idea of providing you know, broader 0:49:17.080 --> 0:49:20.080 selection to people, better prices and so forth. And that 0:49:20.120 --> 0:49:22.440 little idea in Bentville is now Walmart, which is one 0:49:22.440 --> 0:49:25.080 of the largest companies in the world. So, you know, 0:49:25.160 --> 0:49:29.319 some I think are born with that sort of entrepreneurial 0:49:29.600 --> 0:49:34.320 creativity builder you know, new ideas, you know, start businesses streak. 0:49:35.320 --> 0:49:38.680 But there are also many who end up seeing something 0:49:38.880 --> 0:49:43.040 that they just find uh, you know, fascinating and decide 0:49:43.120 --> 0:49:46.640 to pursue it as a as a as a business opportunity, 0:49:46.680 --> 0:49:49.000 as a as a startup, even if they're quite a 0:49:49.040 --> 0:49:52.520 bit older, and if they never really saw themselves as entrepreneurs. 0:49:52.920 --> 0:49:56.239 I realized every investment has a different amount of capital involved. 0:49:56.640 --> 0:49:59.640 But generally speaking as a VC, what kind of hit 0:49:59.719 --> 0:50:04.719 to ship ratio you're looking for your success ratio? Well, 0:50:04.760 --> 0:50:07.360 it again depends on the stage that earlier you're investing, 0:50:07.400 --> 0:50:09.840 when it's more the in the idea stage, it's going 0:50:09.920 --> 0:50:12.520 to be you know, more misss than the later stage 0:50:12.560 --> 0:50:16.400 where the company is a little bit more more developed. Uh. 0:50:16.440 --> 0:50:18.960 You know, we try to minimize what's in the industry 0:50:19.000 --> 0:50:23.839 called the loss ratio, where you basically you know, strike out. Uh. 0:50:23.880 --> 0:50:26.120 And it's easier to do that with the later stage 0:50:26.160 --> 0:50:30.880 investments because there's more to diligence. They're generally pretty significant companies. 0:50:30.920 --> 0:50:34.120 We backed the company started in the Washington c area 0:50:34.760 --> 0:50:37.360 almost fifteen years ago called Sweet Green, which was a 0:50:37.440 --> 0:50:40.680 fast casual restaurant concept. And this really it was just 0:50:40.760 --> 0:50:42.799 one place and there was a few places, and then 0:50:42.800 --> 0:50:45.680 they started expanding, and so we invested in that to 0:50:45.760 --> 0:50:49.640 help them expand other regions and that's gone to you know, 0:50:49.680 --> 0:50:52.200 they're building now a pretty significant business and now it's 0:50:52.200 --> 0:50:56.479 a public company with a couple of billion dollar evaluation uh. 0:50:56.560 --> 0:50:58.880 And they were able to use that capital to to 0:50:58.960 --> 0:51:01.239 scale up. We always new when we invested in them 0:51:01.239 --> 0:51:03.319 that it would be successful. We just didn't know how 0:51:03.480 --> 0:51:05.640 how success would be, how how big it might be. 0:51:06.320 --> 0:51:08.480 But certainly in the earlier stage there's more risk. But 0:51:08.560 --> 0:51:12.080 by co investing with other people were able to you know, 0:51:12.160 --> 0:51:15.200 kind of hedge some of that risk. But for sure, uh, 0:51:15.000 --> 0:51:17.480 you're always going to have as you say, and then 0:51:18.080 --> 0:51:20.840 it's like in the music business or the movie business. 0:51:20.920 --> 0:51:22.799 Some are going to work and some are not gonna work, 0:51:22.840 --> 0:51:25.520 and and you just try to maximize the numbers that 0:51:25.560 --> 0:51:28.479 are the ones that are working and minimize the ones 0:51:28.560 --> 0:51:31.960 that that don't work. How many people work at Revolution 0:51:32.040 --> 0:51:33.920 and how do they get their jobs and what do 0:51:34.040 --> 0:51:37.960 they do? It's a mix of things overall, because about 0:51:37.960 --> 0:51:40.400 seventy five people now, and some of them are focused 0:51:40.440 --> 0:51:42.720 on each of these funds I mentioned. Some are focused 0:51:42.719 --> 0:51:46.840 on sort of broader corporate functions, finance, legal, communications policy, 0:51:46.920 --> 0:51:50.000 you know, things like that, UM, and they know they 0:51:50.040 --> 0:51:52.720 get their jobs like anything, you know, sort of they 0:51:52.840 --> 0:51:56.120 were looking for great people and always on the hunt. 0:51:56.280 --> 0:52:00.040 And sometimes we know somebody because they work together in 0:52:00.160 --> 0:52:03.239 some company or at some other venture fund, or had 0:52:03.280 --> 0:52:06.520 some other role. Uh, And sometimes they just surfaced through 0:52:06.600 --> 0:52:09.360 a you know, kind of a more traditional kind of 0:52:09.400 --> 0:52:11.920 search process. Uh, but you know we have, We've been 0:52:11.960 --> 0:52:15.239 able to build and build a great team. Okay, let's 0:52:15.280 --> 0:52:17.480 go a little into the personal stuff. You grew up 0:52:17.480 --> 0:52:19.959 in Hawaii. What do I know, even at this late 0:52:20.080 --> 0:52:24.480 date living in Los Angeles, we're three hours behind, and 0:52:24.800 --> 0:52:29.400 you frequently an afterthought and an elections, national elections, they're decided, 0:52:29.719 --> 0:52:32.160 except for the last major one with a lot of 0:52:32.320 --> 0:52:34.960 mail in votes out to be counted, were decided before 0:52:35.000 --> 0:52:38.000 we even you know, the polls even closed in California. 0:52:38.239 --> 0:52:41.680 So growing up in a y on some level, that's 0:52:41.719 --> 0:52:45.360 all you knew. But what was it like, Well, it 0:52:45.520 --> 0:52:47.560 was all I knew, and most of that I did 0:52:47.600 --> 0:52:50.799 like it's a great place to grow up and for 0:52:50.800 --> 0:52:52.960 a whole host of reasons. But you're right, I did 0:52:53.040 --> 0:52:55.720 feel a little bit like I was, you know, out 0:52:55.719 --> 0:52:57.480 of the swing of things, a little bit off the 0:52:57.480 --> 0:53:02.880 beaten track. Even when I was up, and the television shows, 0:53:02.960 --> 0:53:06.520 the sitcoms, everything would would run on in Hawaii week 0:53:06.600 --> 0:53:09.439 after they ran on the main land. Basically the tapes 0:53:09.480 --> 0:53:12.439 would get shipped over or flown over. We would watch 0:53:12.440 --> 0:53:15.200 them a week later. So, you know, thankfully, back then 0:53:15.239 --> 0:53:18.600 people weren't using the Internet or lots of phone calls 0:53:18.640 --> 0:53:22.439 because there's been a big spoiler, you know, effact because 0:53:22.440 --> 0:53:24.560 the reality of most people in the country already knew 0:53:24.560 --> 0:53:27.520 what was going to happen before we we did, UH, 0:53:27.560 --> 0:53:30.400 and so that was that was a little bit it 0:53:30.480 --> 0:53:33.840 was a little bit strange. And also I write about 0:53:33.840 --> 0:53:35.560 some of this the book Growing Up in Hawaii. It 0:53:35.600 --> 0:53:39.560 was interesting to see how the economy was evolving because 0:53:40.200 --> 0:53:43.080 for most of the previous century it basically had been 0:53:43.120 --> 0:53:46.440 around agriculture, growing pineapples, growing sugar. That was really the 0:53:46.520 --> 0:53:49.680 core industry of Hawaii. And then you know, competition and 0:53:49.680 --> 0:53:54.879 global competition from other countries really decimated that industry and 0:53:55.320 --> 0:53:57.880 they had to pivot. And thankfully we're able to pivot, 0:53:58.239 --> 0:54:02.200 uh from and move out of agriculture and into tourism. 0:54:02.320 --> 0:54:05.719 And particularly when the Boeing business jet came along and 0:54:05.760 --> 0:54:08.600 the I think it was the early nineteen seventies, you know, 0:54:08.680 --> 0:54:13.440 that really accelerated the amount of people visiting Hawaii, increased 0:54:13.440 --> 0:54:15.920 the number of hotels being built and other other things 0:54:16.120 --> 0:54:19.320 to cater to the you know, the tourism industry. And 0:54:19.320 --> 0:54:22.279 I was able to kind of reposition itself UH and 0:54:22.320 --> 0:54:26.480 benefit from from from from tourism, so there are lots 0:54:26.480 --> 0:54:29.719 of benefits in in in growing up there. And I 0:54:29.760 --> 0:54:33.120 went to a school, uh, I lived near, and it 0:54:33.120 --> 0:54:34.719 was it was fun to you know, go to that 0:54:34.800 --> 0:54:38.200 school and actually you know, and it's a small world department. 0:54:38.480 --> 0:54:40.520 One of the people I met in high school was 0:54:40.600 --> 0:54:43.680 President Obama. I was a senior when he was a freshman, 0:54:43.800 --> 0:54:46.040 so he didn't have classes together, but he didn't. I 0:54:46.080 --> 0:54:48.080 do remember playing basketball with him a couple of times, 0:54:48.120 --> 0:54:51.120 and I do remind people when I'm speaking to two 0:54:51.120 --> 0:54:54.120 younger folks that always be nice to everybody because you 0:54:54.200 --> 0:54:57.920 never know who might be president United States controlling like 0:54:58.000 --> 0:55:00.720 the CIA and the I R S all these other 0:55:01.160 --> 0:55:05.680 other other things. It was kind of kind of interesting. Okay. 0:55:05.960 --> 0:55:09.440 Basketball has mentioned multiple times in your book, as is 0:55:09.480 --> 0:55:15.160 your competition with your brother? How how dedicated to basketball 0:55:15.280 --> 0:55:17.920 were you? How good were you? Into what degree did 0:55:17.960 --> 0:55:21.799 your competition with your brother ultimately inform and enhance your 0:55:21.840 --> 0:55:25.120 career efforts? Oh, I think it's an ext that was 0:55:25.200 --> 0:55:28.799 an average basketball player. It wasn't wasn't definitely not a superstar, 0:55:28.920 --> 0:55:31.400 but but enjoyed it. Uh. In terms of my brother, 0:55:31.440 --> 0:55:33.480 he was a really good tennis player, So that probably 0:55:33.600 --> 0:55:36.000 led me to basketball, you know, wanting to do something 0:55:36.000 --> 0:55:38.000 a little different than what my brother was doing. And 0:55:38.040 --> 0:55:41.520 then he was definitely the one. It was a year 0:55:41.560 --> 0:55:43.839 older and definitely was the one who was getting straight a's. 0:55:43.920 --> 0:55:46.000 I was I was not getting straight a's. And maybe 0:55:46.000 --> 0:55:48.520 that was another way I was going to differentiate him 0:55:48.600 --> 0:55:52.319 if it wasn't necessarily, you know, something my parents were 0:55:52.640 --> 0:55:56.000 or loving um. And then he ended up going to 0:55:56.160 --> 0:55:59.440 college at Princeton and end up being a Rhodes scholar, 0:55:59.600 --> 0:56:03.759 so really quite successful, and then went on to be 0:56:03.880 --> 0:56:05.840 part of an investment banking firm that was one of 0:56:05.880 --> 0:56:09.160 the storied firms and Silicon Valley firm called hambrogton Quist 0:56:09.480 --> 0:56:12.279 took companies like Apple Public and gene Tech Public, and 0:56:12.280 --> 0:56:14.720 he was a close advisor to people like like Steve 0:56:14.840 --> 0:56:17.640 jobs Uh and the fact he was focused more on 0:56:17.680 --> 0:56:20.960 the on the financial side of things, investment banking side 0:56:20.960 --> 0:56:23.600 of things, and I was focused more on the entrepreneurial 0:56:23.600 --> 0:56:26.080 side of things. That was a nice kind of balance. 0:56:26.120 --> 0:56:28.000 And he could help me and I could I could 0:56:28.040 --> 0:56:30.839 help him. Sadly, he passed away over two decades ago 0:56:30.920 --> 0:56:33.840 from brain cancer. He was, you know, in his early forty's, 0:56:33.840 --> 0:56:36.399 had a young family, and it just was a wake 0:56:36.480 --> 0:56:39.239 up call that none of us can really control our 0:56:39.400 --> 0:56:42.959 our destiny, controller or future. He was on the top 0:56:43.000 --> 0:56:45.160 of his game and then you know, sell me. He 0:56:45.200 --> 0:56:48.440 finds out he is brain cancer. Fourteen months later he 0:56:48.440 --> 0:56:53.480 passes away. So that was a a just a reminder 0:56:53.560 --> 0:56:57.120 of the fragility of life and and uh, everybody in 0:56:57.200 --> 0:57:02.000 my family a reminder not to again any of her. Granted, Okay, 0:57:02.040 --> 0:57:05.440 you end up going to school at Williams in western Massachusetts. 0:57:06.280 --> 0:57:09.799 Was that culture shock or your father going to Williams? 0:57:10.120 --> 0:57:13.200 But had you spent enough time on the mainland or 0:57:13.239 --> 0:57:17.960 do you feel like a fish out of water in Williams? Uh? 0:57:18.120 --> 0:57:19.840 I had not spent much time in the man was 0:57:19.960 --> 0:57:24.400 mostly in in in Hawaii. Uh Uh, I didn't necessarily 0:57:24.400 --> 0:57:26.280 feel like a fish out of water. I certainly had 0:57:26.280 --> 0:57:30.080 to adjust to a rather sudden shift in terms of 0:57:30.120 --> 0:57:32.960 seasons because you know, there's of course no snow in 0:57:33.040 --> 0:57:34.960 Hawaii and or there's a little bit of snow on 0:57:34.960 --> 0:57:38.160 one top of one mountain, but essentially no snow. Uh. 0:57:38.160 --> 0:57:41.440 And there was quite a bit of snow and in Massachusetts, 0:57:41.280 --> 0:57:44.840 as you know, Uh, so there's some some adjustments like that, 0:57:44.880 --> 0:57:47.400 but I really enjoyed it. It was it was, you know, 0:57:47.480 --> 0:57:51.440 an interesting place to be. And in full disclosure, at 0:57:51.440 --> 0:57:54.600 that point in time, both high school and college, my 0:57:54.720 --> 0:57:59.560 passion was not around UH technology or things like the Internet. 0:58:00.040 --> 0:58:02.720 It actually was the music business. In high school, I 0:58:02.760 --> 0:58:04.880 did a number of things that were related to writing, 0:58:04.920 --> 0:58:08.240 you know, contra views and taking pictures and and UH 0:58:08.520 --> 0:58:11.440 and UH. I worked with a bunch of people then 0:58:11.520 --> 0:58:13.560 did a lot of interviews when I was a kid, 0:58:13.720 --> 0:58:16.360 you know, Aerosmith and Wolf pan Jack and other bands 0:58:16.360 --> 0:58:19.080 that were coming through town. And I was in college, 0:58:19.120 --> 0:58:22.760 part of my little side hustle was promoting some some concerts. 0:58:22.760 --> 0:58:26.720 So I was initially focused on the music business. A 0:58:26.760 --> 0:58:29.760 couple of things happened that shifted my focus. The main 0:58:29.840 --> 0:58:33.720 one was I started in in the late seventies UH, 0:58:33.960 --> 0:58:37.400 when I was still in college, getting really fascinated with 0:58:37.520 --> 0:58:39.960 the idea of well we now think of as the Internet. 0:58:40.000 --> 0:58:42.840 I remember reading a book by a futurist, Alvin Toffler, 0:58:42.880 --> 0:58:46.240 when I was a senior UH in nineteen seventy nine, 0:58:46.920 --> 0:58:48.760 and the book was called the Third Wave, and he 0:58:48.840 --> 0:58:51.960 was talking about, UH, this next wave was going to 0:58:52.080 --> 0:58:55.840 be around digital technologies, and you know, the first wave 0:58:55.920 --> 0:58:59.080 was agriculture and the second wave was industrial revolution. Third 0:58:59.120 --> 0:59:01.680 way was going to be a dual revolution, and I 0:59:01.760 --> 0:59:03.600 was smitten with that idea. So that was part of 0:59:03.600 --> 0:59:06.600 what you led me onto a different path. But also 0:59:06.640 --> 0:59:09.040 I had some stumbles in the in the music business 0:59:09.080 --> 0:59:12.840 because my strategy, like Venture Capitel, was to back bands 0:59:12.960 --> 0:59:15.200 when I heard their albums and thought they could be 0:59:15.320 --> 0:59:17.640 hits and booked them for dates like six or nine 0:59:17.680 --> 0:59:20.960 months later, with the idea that you know, obviously sometimes 0:59:20.960 --> 0:59:23.080 to get it wrong and nobody would come to the concert, 0:59:23.360 --> 0:59:25.000 but if I got it right, I would lock in 0:59:25.080 --> 0:59:27.560 a band at a pretty good price. And that seemed 0:59:27.600 --> 0:59:29.880 like a pretty, you know, pretty clever idea to me. 0:59:29.920 --> 0:59:32.880 But what I didn't realize is is often you were 0:59:32.920 --> 0:59:34.880 wrong and nobody would show up. But when you were 0:59:34.960 --> 0:59:38.760 right and you were just a promoting college college concerts 0:59:38.800 --> 0:59:42.520 in New England and had no cloud, the bands that 0:59:42.600 --> 0:59:45.520 were successful would cancel on you. And I had two 0:59:45.520 --> 0:59:49.120 examples of this, and I booked both Meat Loaf I think, 0:59:49.160 --> 0:59:52.680 for one of their first dates and Cheap Trick Uh 0:59:52.720 --> 0:59:55.320 for one of their early dates for five dollars each. 0:59:55.400 --> 0:59:58.080 For our concert that were like six months down the road. 0:59:58.600 --> 1:00:00.920 Both of them canceled on me a cheap trick. We've 1:00:00.920 --> 1:00:02.840 got a deal with our offer to be on Don 1:00:02.920 --> 1:00:05.400 Kirsha's rock concert or something like that. So I said, Okay, 1:00:05.400 --> 1:00:08.760 this is not working for me. If I guess wrong, 1:00:08.840 --> 1:00:11.200 nobody comes. If I guess right, they cancel on me. 1:00:11.400 --> 1:00:13.800 I got to move on and thankfully was able to 1:00:14.160 --> 1:00:17.800 pivot to the pivot to the internet. There are stories 1:00:17.840 --> 1:00:21.480 of you being an entrepreneur in college selling different things. 1:00:21.560 --> 1:00:25.320 Are those true? Yeah? Yeah, I was definitely. Uh. We 1:00:25.400 --> 1:00:28.400 had all kinds of different side hustle, some of those 1:00:28.440 --> 1:00:32.880 concert promotions. Some it was one business we had was 1:00:33.320 --> 1:00:37.200 called Williams Fruit Baskets and the pitch was went to 1:00:37.560 --> 1:00:39.440 parents because we realized the parents had the money, the 1:00:39.480 --> 1:00:41.440 kid didn't really have the money. That when it was 1:00:41.480 --> 1:00:44.360 coming time for like to study for exam at the 1:00:44.400 --> 1:00:47.720 end of the semester and send these letters to parents saying, 1:00:48.240 --> 1:00:51.960 you know, don't you want your child to eat healthy 1:00:52.040 --> 1:00:55.320 when when they're studying for exams, And why don't you 1:00:55.440 --> 1:00:57.680 order a fruit basket and we will we will hand 1:00:57.680 --> 1:01:00.360 pick the fruit and deliver it to your your student 1:01:00.440 --> 1:01:03.080 just when they're in this uh, this challenging period. And 1:01:03.160 --> 1:01:05.840 that business did did pretty well. And we also had 1:01:05.840 --> 1:01:08.760 some other bus businesses things like that. So yeah, again 1:01:08.800 --> 1:01:11.960 none of them were big successes, but I enjoyed starting 1:01:12.000 --> 1:01:13.960 them and I got learned a little bit from each 1:01:13.960 --> 1:01:16.520 of them. Well, so if I was on campus, not 1:01:16.600 --> 1:01:19.520 that many people go to Williams would say, oh, yeah, 1:01:19.560 --> 1:01:22.080 that's the guy who starts the businesses. That's the guy 1:01:22.120 --> 1:01:27.479 who does that. That was me. That was me. Really 1:01:27.520 --> 1:01:30.640 sad part is, at one point professor pulled me aside, 1:01:30.640 --> 1:01:33.240 I think it was a junior at the time and said, 1:01:34.720 --> 1:01:38.400 essentially they realized that I was spending less time in 1:01:38.520 --> 1:01:41.400 class doing the work I should have been doing, and 1:01:41.480 --> 1:01:44.440 more time on these businesses on the sides and said 1:01:45.360 --> 1:01:48.080 sat me down, said you know, Steve, you know, we 1:01:48.160 --> 1:01:50.640 know you're like super passionate about some of these ideas, 1:01:50.680 --> 1:01:53.120 but you know, college is kind of a once in 1:01:53.160 --> 1:01:55.920 a lifetime opportunity. You're only here for four years and 1:01:55.920 --> 1:01:58.440 you have an opportunity to learn things and meet people 1:01:58.560 --> 1:02:01.640 and really kind of ban your mind and so forth. 1:02:02.040 --> 1:02:04.439 So it's it really encourage you to spend a little 1:02:04.520 --> 1:02:06.600 less time of the business things, but you can always 1:02:06.640 --> 1:02:08.600 do later and more time on on the you know, 1:02:08.960 --> 1:02:12.479 the college things. And of course I recognized he was right, 1:02:12.600 --> 1:02:15.000 but at that point I was, you know, too far 1:02:15.120 --> 1:02:18.400 into my other things. So I did okay in college, 1:02:18.440 --> 1:02:21.080 but nobody you know, thought I was gonna, you know, 1:02:21.160 --> 1:02:25.400 kinda was gonna win any awards. Your father was a 1:02:25.480 --> 1:02:29.000 lawyer that you grew up in a somewhat comfortable upbringing. 1:02:29.680 --> 1:02:35.400 Were you forming these businesses to make money or to 1:02:35.480 --> 1:02:40.280 have the experience of building a business? Yeah, I think both. 1:02:41.000 --> 1:02:44.840 I dad was a lawyer and I'm a teacher, as 1:02:44.840 --> 1:02:47.760 you said, and he was always lived a comfortable, kind 1:02:47.760 --> 1:02:51.520 of upper middle class, you know kind of life, um, 1:02:51.640 --> 1:02:54.320 and so I never had to worry about kind of 1:02:54.400 --> 1:02:56.000 some of the basic things a lot of people have 1:02:56.080 --> 1:02:59.640 to worry about. But my parents also really believed in in, 1:03:00.080 --> 1:03:04.200 you know, people being independent and resilient, and so I 1:03:04.320 --> 1:03:06.080 got a little bit of allowance, but not much and 1:03:06.160 --> 1:03:07.640 had to do a lot of chores for it. And 1:03:07.720 --> 1:03:10.200 if we really wanted to, you know, buy something, you 1:03:10.200 --> 1:03:11.760 need to figure out some way to make some money. 1:03:11.800 --> 1:03:14.520 So it was not you know kind of here's here's 1:03:14.520 --> 1:03:17.160 our credit card. Uh, you know, you know, I guess 1:03:17.200 --> 1:03:19.240 at back then the credit cards were not even a thing. 1:03:19.360 --> 1:03:22.600 But but you know, you want to buy something, you know, 1:03:22.760 --> 1:03:24.800 you know we'll pay for it. That was not the 1:03:24.800 --> 1:03:28.600 the the ethots. It was more of a we'll give 1:03:28.600 --> 1:03:29.840 you a little bit of money if you do a 1:03:29.880 --> 1:03:33.120 bunch of chores. Uh. And but if you really wanted, 1:03:33.800 --> 1:03:36.640 you know, you have any real flexibility to do anything much, 1:03:36.760 --> 1:03:38.240 you know, you have to go get a job and 1:03:38.280 --> 1:03:41.640 whether that. Sometimes it was just getting jobs, basic jobs 1:03:41.680 --> 1:03:45.720 and doing different things um over the years. And sometimes 1:03:45.800 --> 1:03:48.640 it was starting things, you know, to to also have 1:03:48.720 --> 1:03:50.760 a path to you know, make some make a little 1:03:50.760 --> 1:03:52.880 extra money. But as you said, also there was something 1:03:52.920 --> 1:03:55.400 about the idea of starting the businesses that that also 1:03:55.520 --> 1:03:58.240 was kind of intriguing to me. So you know, for 1:03:58.280 --> 1:04:07.840 me it was sort of a two. When I was 1:04:07.840 --> 1:04:10.919 going to college a few years ahead of you, Uh, 1:04:10.960 --> 1:04:14.000 Williams was not co ed, And I said, no way, 1:04:14.560 --> 1:04:18.120 what was the status of men and women when you 1:04:18.160 --> 1:04:20.920 went to Williams? It had shifted a few years before, 1:04:21.000 --> 1:04:22.800 not too many years, but just a few years before 1:04:23.000 --> 1:04:26.240 I was there in seventy six through eighty. Uh by 1:04:26.280 --> 1:04:29.720 then was co ed. It was still uh majority men. 1:04:29.880 --> 1:04:33.720 But it was it was definitely co ed, okay. And 1:04:34.240 --> 1:04:36.440 what kind of kid were you there? You have a 1:04:36.480 --> 1:04:42.240 million friends? Were you ostracized? Were you popular? Unpopular? Sorry? 1:04:42.320 --> 1:04:44.360 In the middle. I was involved in a bunch of 1:04:44.400 --> 1:04:48.200 different things, including co chairing the entertainment committee that was 1:04:48.280 --> 1:04:51.040 booking concerts to come to the college, worked at the 1:04:51.160 --> 1:04:54.120 radio station, and and uh and so I had some 1:04:54.240 --> 1:04:56.720 and at some of the side businesses that I that 1:04:56.800 --> 1:04:59.400 I mentioned. Um, so I was involved in a bunch 1:04:59.440 --> 1:05:02.520 of different different things. But I would say it was 1:05:02.560 --> 1:05:04.720 sort of kind of the the middle of the pack in 1:05:04.800 --> 1:05:08.320 terms of you know, friend groups and things like that. 1:05:08.880 --> 1:05:12.080 So you applied to get an m b A and 1:05:12.120 --> 1:05:14.920 you didn't get in anywhere? Were you just going through 1:05:14.960 --> 1:05:17.480 the motions or did you really want to get an 1:05:17.600 --> 1:05:19.240 m B A? And how did you feel when you 1:05:19.280 --> 1:05:22.040 didn't get it? Yeah, that was kind of a bummer, 1:05:22.080 --> 1:05:25.000 which is you know. Of course it's been made for 1:05:25.040 --> 1:05:29.120 a fun story since because the two schools I applied to, 1:05:29.160 --> 1:05:33.560 Harvard and and Stanford both rejected me and spoken on 1:05:33.600 --> 1:05:36.200 their campuses a bunch of times. I'm always quick to 1:05:36.240 --> 1:05:40.120 remind them of what In fact. One time it came 1:05:40.120 --> 1:05:42.040 out with another book about six years ago called The 1:05:42.320 --> 1:05:45.200 Third Wave. And I was uh in Boston going to 1:05:45.280 --> 1:05:47.920 some television station to film something and drove by the 1:05:47.960 --> 1:05:50.880 Harvard Business School campus and I said stop, stop, stop, 1:05:51.280 --> 1:05:54.120 and we got out and uh, I did a little 1:05:54.200 --> 1:05:58.000 quick I think it was a Facebook live thing or something. Uh, 1:05:58.160 --> 1:06:01.880 some live video basic wandering are on the campus, you know, 1:06:02.000 --> 1:06:04.560 to find the admissions office to ask why they turned 1:06:04.560 --> 1:06:07.200 me down whatever a number of thirty plus years ago, 1:06:07.320 --> 1:06:10.040 so it's kind of a yeah, fun So I answer 1:06:10.080 --> 1:06:11.680 the question I was. I was not sure what I 1:06:11.720 --> 1:06:14.080 was gonna do at that point. I thought that was 1:06:14.160 --> 1:06:17.439 a good path at least pursue. And at the time, 1:06:18.000 --> 1:06:20.960 most of the business schools didn't really accept them many 1:06:21.200 --> 1:06:23.120 kids right out of school. They wanted to get some 1:06:23.360 --> 1:06:26.760 few years of work experience first. So I didn't really 1:06:26.800 --> 1:06:28.880 have a high expectation that I get in, but figured 1:06:28.920 --> 1:06:31.040 if I did, that at least would be an option 1:06:31.080 --> 1:06:34.640 I would consider. Meanwhile, I was interviewing for a bunch 1:06:34.680 --> 1:06:37.840 of other jobs and New York and other member of 1:06:37.880 --> 1:06:41.160 interview and HBO and some ad agencies and so forth, 1:06:41.200 --> 1:06:43.200 just trying to figure out what what I was gonna 1:06:43.240 --> 1:06:47.040 do at the time, I really knew I wanted to 1:06:47.040 --> 1:06:48.920 the old a company like an A O L. I 1:06:48.960 --> 1:06:52.360 knew it even back in when I was graduating that 1:06:52.480 --> 1:06:54.720 I believed the idea of the Internet was a big 1:06:54.760 --> 1:06:56.560 idea and I wanted to figure out some way to 1:06:57.240 --> 1:06:59.920 pursue that path. But when I was graduating, since the 1:07:00.040 --> 1:07:03.439 Internet was still mostly a research technology, it was still 1:07:03.480 --> 1:07:08.040 limited to government agencies and educational institutions. Consumers and businesses 1:07:08.080 --> 1:07:10.400 weren't able to use the Internet when I was graduating 1:07:10.400 --> 1:07:14.600 from college. Uh, there really wasn't an Internet industry. I could, 1:07:14.640 --> 1:07:17.240 you know, inter act in the Internet company I could 1:07:17.320 --> 1:07:20.200 could join. And back then when I was graduate college, 1:07:20.280 --> 1:07:23.400 venture capitalists, you know, weren't backing twenty one year old 1:07:23.480 --> 1:07:25.560 kids coming out of college. They were they were They were, 1:07:25.720 --> 1:07:29.200 you know, looking for more seasoned people with more experience. 1:07:29.680 --> 1:07:31.320 And so that's what led me on the path. We're 1:07:31.320 --> 1:07:34.560 working for some big companies, Procter and gam once Cincinnati. 1:07:35.600 --> 1:07:39.000 Well before you before you get there, so you talk 1:07:39.080 --> 1:07:44.320 about reading the Toffler book and having an inspiration. Did 1:07:44.320 --> 1:07:47.840 you learn anything about that in college or was it 1:07:47.880 --> 1:07:52.760 all self education? And did anything you learned in college 1:07:53.120 --> 1:07:55.640 help you as you went down the line or it 1:07:55.760 --> 1:08:01.280 was just a contained experience. Uh, well, it's it's it's 1:08:01.320 --> 1:08:04.600 a complicated question. Break into a couple of parts. Uh. 1:08:04.920 --> 1:08:10.400 The interest in essence the Internet technology, uh was inspired 1:08:10.440 --> 1:08:12.280 in part by the top of the book. But even 1:08:12.320 --> 1:08:14.360 before I read the top of the book, I was 1:08:14.400 --> 1:08:17.080 spending a lot of time doing my own research in 1:08:17.400 --> 1:08:20.559 the college library, reading all kinds of newspapers magazines, because 1:08:20.600 --> 1:08:23.160 back then, in the late seventies, there was some of 1:08:23.200 --> 1:08:27.519 these new technologies that were being trialed, things like mini 1:08:27.600 --> 1:08:31.240 tel in France and Prestel in the UK, and concept 1:08:31.320 --> 1:08:35.719 like video text and teletext and interactive TV warrant amics 1:08:35.800 --> 1:08:39.360 at a system called cube and being tested in since 1:08:39.360 --> 1:08:41.400 saniel Hio and Columbus, Ohio. So there are a bunch 1:08:41.400 --> 1:08:44.040 of things that were bubbling even the late seventies that 1:08:44.080 --> 1:08:47.559 I found really intriguing that in retrospect were kind of 1:08:47.560 --> 1:08:51.679 a really early days first experiments and what then ultimately 1:08:51.720 --> 1:08:54.240 led to, you know, the Internet. Uh. So I was 1:08:54.320 --> 1:08:57.280 learning a lot, but it was not necessarily classes I 1:08:57.360 --> 1:09:00.840 was taking that we have related to to you know, 1:09:01.000 --> 1:09:04.439 things that I was focused on then. But I would say, 1:09:04.479 --> 1:09:06.559 and this is true, I think for any uh, you know, 1:09:06.640 --> 1:09:09.760 kind of liberal arts education. I think the value, at 1:09:09.800 --> 1:09:13.400 least the value to me was learning a little bit 1:09:13.400 --> 1:09:15.360 about a lot of things, which gives you a broader 1:09:15.360 --> 1:09:19.839 perspective on life and broader perspective on the world. Learning 1:09:19.840 --> 1:09:25.280 how to aggregate and synthesize information and come up with conclusions, 1:09:25.320 --> 1:09:28.680 points of view, learn how to communicate you know, those conclusions. 1:09:29.479 --> 1:09:31.040 So I think there are a bunch of things that 1:09:31.040 --> 1:09:34.320 that did end up serving me well, even if any 1:09:34.600 --> 1:09:39.280 the specific course material, uh you know one specific things 1:09:39.360 --> 1:09:41.960 you could connect to what I ended up you know, 1:09:42.040 --> 1:09:46.120 later doing. So I'm actually bullish on the value of 1:09:46.240 --> 1:09:49.559 a liberal arts education, uh, while at the same time 1:09:49.960 --> 1:09:54.439 recognizing that that entrepreneurs will end up being passionate about 1:09:54.439 --> 1:09:58.680 a particular idea and likely will pursue that idea in 1:09:58.760 --> 1:10:00.960 a lot of different ways, and and many of them 1:10:00.960 --> 1:10:04.559 are uncoupled from what they might learn and while they're 1:10:04.560 --> 1:10:06.840 in in college. Although it might also would say it's 1:10:06.920 --> 1:10:10.320 changed quite a bit. I have visited, uh dozens of 1:10:10.360 --> 1:10:14.160 dozens universities over the years, including related to our work 1:10:14.200 --> 1:10:15.760 with rise Rest, and even saw him in the last 1:10:15.840 --> 1:10:18.360 month since the Rise of Rest book came out and 1:10:18.400 --> 1:10:21.040 it's amazing to see how many universities really are leading 1:10:21.080 --> 1:10:24.000 into entrepreneurship. And in Phoenix a couple of weeks ago 1:10:24.080 --> 1:10:26.519 is at Arizona State University. They have a whole dorm 1:10:26.640 --> 1:10:29.960 focused on entrepreneurship and makers and builders and so forth. 1:10:30.160 --> 1:10:32.639 So there's a lot more happening on campuses now than 1:10:32.720 --> 1:10:34.680 we're when I was there. You were there in the 1:10:34.760 --> 1:10:37.599 in the in the in the seventies. Uh So I'd say, 1:10:37.720 --> 1:10:39.200 you know that I did learn a lot kind of 1:10:39.200 --> 1:10:43.120 self taught around the The ideas of that ultimately for 1:10:43.160 --> 1:10:45.160 me became you know, kind of a o L and 1:10:45.439 --> 1:10:48.639 more broadly, you know, the Internet. And do think looking 1:10:48.680 --> 1:10:52.000 back that I've benefited, you know, considerably from that that 1:10:52.240 --> 1:10:56.360 kind of broad liberal arts education. So you got rejected 1:10:56.400 --> 1:10:59.760 by PNG, but you showed up then they gave you 1:10:59.800 --> 1:11:02.840 a job. Yeah, I'm this line of questioning, Bob. It's 1:11:02.880 --> 1:11:05.120 really kind of it's gonna kind of making a little 1:11:05.120 --> 1:11:09.240 PTSD for mere. Yes. Yes, every every school, in business 1:11:09.240 --> 1:11:11.599 school I applied to reject the man. Yes, the companies 1:11:11.600 --> 1:11:13.640 I really wanted to work for, not just P and G, 1:11:13.800 --> 1:11:16.680 but HBO and many others rejected me. So thank you 1:11:16.720 --> 1:11:19.240 for pointing out that out no, no, no, when I 1:11:19.320 --> 1:11:22.240 kept fighting and I kept fighting, and and I think 1:11:22.600 --> 1:11:25.600 the second part of that PNGNG story, as you know, 1:11:25.800 --> 1:11:29.000 was they did reject me. I just didn't did an 1:11:29.000 --> 1:11:31.320 interview on campus, and you know, they just you know, 1:11:31.479 --> 1:11:33.679 weren't interested in a follow on interview. But I really 1:11:34.040 --> 1:11:36.439 was interested in P ANDNG. There's something about the company 1:11:36.439 --> 1:11:38.920 and their training program for marketing people that I thought 1:11:38.920 --> 1:11:42.000 would be really good fit for me. So it basically 1:11:42.040 --> 1:11:45.360 appealed their decision. That wrote to Lennon said I'm sorry. 1:11:45.400 --> 1:11:47.080 I don't remember exactly what it was, but something like, 1:11:47.120 --> 1:11:49.360 I'm sorry that interview that goes so well. I really, 1:11:49.520 --> 1:11:51.280 you know, I think P ANDG would be a good fit. 1:11:51.320 --> 1:11:52.880 Here's two or three reasons why I think it would 1:11:52.880 --> 1:11:55.519 be a good fit. Please give me another chance. I'd 1:11:55.560 --> 1:11:58.000 like to have, you know, a second bite at the 1:11:58.040 --> 1:12:01.120 Apple if you will. Um And so they said, okay, well, 1:12:01.160 --> 1:12:04.400 if you'll get to New York City, you know, in 1:12:04.439 --> 1:12:07.160 a couple of weeks, um on, thus in such a 1:12:07.280 --> 1:12:09.840 day that we will have somebody who will meet you. 1:12:09.880 --> 1:12:12.120 And I think they're just kind of testing me. When 1:12:12.160 --> 1:12:13.599 I was a little bit of a hassle. I had 1:12:13.600 --> 1:12:15.560 to you know, kind of take the you know, the 1:12:15.920 --> 1:12:17.960 bus to the city and figure out some way to 1:12:18.240 --> 1:12:20.719 kind of get there. And with the middle of winner, 1:12:20.800 --> 1:12:23.320 so it wasn't exactly the easiest time to be getting around. 1:12:23.880 --> 1:12:26.160 And the fact I just showed up, I think I 1:12:26.200 --> 1:12:30.200 think I passed the persistence test and the passion test, 1:12:30.800 --> 1:12:32.920 and that was a better interview. So ultimately I did 1:12:33.000 --> 1:12:35.439 end up, you know, getting that job and moving to 1:12:35.439 --> 1:12:38.639 to Cincinnati. Well, you're talking about the PTSD. I guess 1:12:38.720 --> 1:12:41.160 the reason I'm asking these questions is not to point 1:12:41.200 --> 1:12:43.679 out the bumps in the road, but to ask how 1:12:43.680 --> 1:12:48.559 did you maintain your optimism? Well, I understand that, and 1:12:48.640 --> 1:12:52.360 I appreciate that. The the um I don't know this 1:12:52.439 --> 1:12:56.240 is this is part of uh, the entrepreneural journey. You know, 1:12:56.320 --> 1:12:58.880 you're gonna you're gonna have a lot of setbacks. Even 1:12:58.920 --> 1:13:01.600 the early days of A Oh well, we struggle a 1:13:01.600 --> 1:13:04.120 couple of times. We had to go through layoffs. Many 1:13:04.240 --> 1:13:07.760 people thought we wouldn't survive, you know, the company would 1:13:07.800 --> 1:13:10.280 just kind of hit the wall. Uh, we had many, 1:13:10.320 --> 1:13:12.479 you know, many challenges there. Remember one point we had 1:13:12.479 --> 1:13:15.400 a deal with Apple worked on for months and months 1:13:15.400 --> 1:13:17.960 and months and the licensed their brand name is create 1:13:18.040 --> 1:13:20.720 something called Apple and Personal Edition, and they decided to 1:13:21.080 --> 1:13:24.240 not long after we launched, to cancel it and and 1:13:24.360 --> 1:13:26.840 uh tear up our contract. And a lot of people 1:13:26.840 --> 1:13:29.120 then thought, you know, company would would hit the wall. 1:13:29.160 --> 1:13:32.960 We had all kinds of you know, challenges, and that 1:13:32.960 --> 1:13:36.320 that is the entrepreneur journey. There's very few overnight successes. 1:13:36.400 --> 1:13:38.800 Most of them are kind of a slog and eventually, 1:13:39.320 --> 1:13:41.000 you know, things kind of you know, if you stick 1:13:41.040 --> 1:13:42.800 with it, things you know kind of turned out. So 1:13:42.840 --> 1:13:45.040 I think that gave me that if you believe it's 1:13:45.080 --> 1:13:48.400 a you know, idea worth fighting for, a business worth building, 1:13:48.520 --> 1:13:50.439 that that you know that you keep keep fighting, you 1:13:50.520 --> 1:13:52.880 keep persisting. And I think some of that may have 1:13:52.920 --> 1:13:54.599 been you know, kind of some of those early days, 1:13:54.640 --> 1:13:56.800 maybe even some of those rejections as you noticed and 1:13:57.200 --> 1:14:00.439 noted and you know, continuing to fight to get what 1:14:00.479 --> 1:14:03.240 I thought was was at least for me, the right, 1:14:03.400 --> 1:14:06.920 right next step. I think you just learned the importance 1:14:06.960 --> 1:14:12.120 of persistence and keep fighting. Even frankly, when I started 1:14:12.160 --> 1:14:15.080 the the the A O. L and we you know, 1:14:15.120 --> 1:14:17.800 struggle to raise capital in those early days, and most 1:14:17.800 --> 1:14:20.479 people did not believe the Internet would ever be a 1:14:20.520 --> 1:14:23.920 mainstream phenomenon. It seems crazy now, but most people would 1:14:23.920 --> 1:14:25.960 say things to me like, what you really think people 1:14:26.000 --> 1:14:29.639 are going to buy something called a personal computer and 1:14:29.640 --> 1:14:32.439 and then sit down in front of a keyboard to 1:14:32.640 --> 1:14:35.680 type a message to somebody when they can just pick 1:14:35.760 --> 1:14:37.880 up the phone and call somebody. That feels like a 1:14:38.040 --> 1:14:40.519 crazy idea. Said no, I actually do think that that's 1:14:40.520 --> 1:14:43.559 gonna happen. Uh, and others. You know, a few years later, 1:14:43.920 --> 1:14:47.599 when things around home shopping and electronic commerce started developing, 1:14:47.680 --> 1:14:50.320 people said, well, do you really think that average people, 1:14:50.360 --> 1:14:54.400 like normal people, would be comfortable buying a product from 1:14:54.439 --> 1:14:57.320 somebody they don't even know, and and you actually think 1:14:57.360 --> 1:15:00.559 they'll be comfortable with this internet thing to type their 1:15:00.680 --> 1:15:03.800 credit card in that somebody might some hacker might steal. 1:15:03.800 --> 1:15:05.400 I said, yeah, oh yeah, I think I think people 1:15:05.800 --> 1:15:07.680 will be interested in that. So there was a lot 1:15:07.680 --> 1:15:10.879 of skepticism, and it really was a decade of struggle 1:15:10.960 --> 1:15:13.640 before finally, you know, we we broke through. And when 1:15:13.680 --> 1:15:16.240 we first started Rise the Rest ten years ago, it 1:15:16.320 --> 1:15:17.960 was a little bit dejabu all over again. When I 1:15:17.960 --> 1:15:20.599 started talking about the idea of backing entrepreneurs all around 1:15:20.600 --> 1:15:23.000 the country. What would happen with these rising cities, How 1:15:23.040 --> 1:15:26.160 we could slow the branger into people leaving boomerang people back, 1:15:26.240 --> 1:15:28.639 more capital and more people, more places, you know, things 1:15:28.640 --> 1:15:31.760 we talked about earlier. Most people were skeptical. Most people 1:15:31.840 --> 1:15:34.719 kind of didn't necessary roll their eyes, but they thought 1:15:34.720 --> 1:15:39.880 it was a mission that likely was gonna end up unsuccessful. 1:15:40.000 --> 1:15:42.440 And you know, it's been great to see the progress 1:15:42.520 --> 1:15:46.160 we made in the last decade, and particularly the momentum 1:15:46.160 --> 1:15:48.400 in the last couple of years, which ultimately loved me 1:15:48.439 --> 1:15:52.000 to write the books. To me, it is around persistence, 1:15:52.040 --> 1:15:53.720 But I don't think it's unique to me. Most of 1:15:53.720 --> 1:15:57.000 the entrepreneurs I've known who ended up being successful had 1:15:57.040 --> 1:16:01.040 to deal with, you know, setbacks, but they just keep fighting. Okay, 1:16:01.400 --> 1:16:03.439 let's bring it up to today. Since you've been a 1:16:03.560 --> 1:16:07.960 seer technologically in the past, what is your view on 1:16:08.080 --> 1:16:14.160 the metaverse and Facebook's pivot to the metaverse. Well, I'm 1:16:14.160 --> 1:16:16.880 a believer in the metaverse. We actually launched one of 1:16:16.880 --> 1:16:21.400 the first metaverse products in the late nineteen eighties. We 1:16:21.520 --> 1:16:25.000 did a partnership with Lucasfilm to create essentially a virtual 1:16:25.040 --> 1:16:29.880 world with avatars. This was very rudimentary technology actually was 1:16:29.960 --> 1:16:33.479 a common or sixty four computer with a three bod modem, 1:16:33.479 --> 1:16:36.799 but essentially was in the early version of the metaverse. 1:16:36.840 --> 1:16:40.080 Since I've always believed in that idea with gaming. I 1:16:40.120 --> 1:16:43.320 think some of the more recent applications in terms of 1:16:43.680 --> 1:16:47.040 kind of business use terms of creating much more immersive 1:16:47.520 --> 1:16:52.160 experiences for people, including things like video conferencing really feels 1:16:52.200 --> 1:16:54.840 like you're you know, sitting with somebody and it's really 1:16:54.880 --> 1:16:57.120 like a real room. All those things I think hold 1:16:57.160 --> 1:17:00.760 a lot of potential, but these things tend to take 1:17:00.760 --> 1:17:03.840 a while before they really are ready for prime time. 1:17:03.920 --> 1:17:07.519 And I think what Facebook now you know, meta is 1:17:08.080 --> 1:17:11.880 struggling with is have been making very very significant investments, 1:17:11.960 --> 1:17:15.280 you know, ten billion plus a year, and these metaverse 1:17:15.360 --> 1:17:18.400 technologies they're a little slower to to take off than 1:17:18.680 --> 1:17:21.439 they thought, while they're seeing some challenges in their their 1:17:21.439 --> 1:17:24.360 core business and so they likely will you know, kind 1:17:24.360 --> 1:17:26.360 of you know, pull back at least a little bit 1:17:26.400 --> 1:17:28.759 on some of their their their efforts. So they probably 1:17:28.760 --> 1:17:32.360 are right in the long run, that's an important new platform, 1:17:32.439 --> 1:17:34.800 but they might have gotten a little ahead themselves in 1:17:34.920 --> 1:17:37.360 terms of the pace at which they were pursuing that 1:17:37.920 --> 1:17:40.320 the timing is certainly key. We certainly saw that with 1:17:40.439 --> 1:17:43.880 music being the canary in the coal mine for digital disruption, 1:17:44.000 --> 1:17:47.240 as I say, twenty odd years ago. But if we 1:17:47.320 --> 1:17:54.000 look forward within our lifetimes, will the public at large 1:17:54.080 --> 1:18:02.080 never participate in the metaverse? Or is augmented reality more 1:18:02.160 --> 1:18:04.400 the thing? What's your prediction there? Well, I think I 1:18:04.400 --> 1:18:07.160 think metaverse is one of these concepts like kind of 1:18:07.200 --> 1:18:10.320 like Web three, which is a basket of ideas and 1:18:10.360 --> 1:18:12.479 so you have to kind of parse it a little bit. 1:18:12.880 --> 1:18:16.200 I think I think, uh, augmented reality, virtual reality are 1:18:16.360 --> 1:18:20.240 are parts of the you know, the technology suite that 1:18:20.320 --> 1:18:23.000 make things like a metaverse possible and other things like that, 1:18:23.080 --> 1:18:26.759 and I do think they'll get broader adoption. Additional running 1:18:26.800 --> 1:18:29.960 a revolution the investment company, I'm currently the chair of 1:18:29.960 --> 1:18:33.599 the Smithsonian Institution. We have the twenty museums in Washington, 1:18:33.640 --> 1:18:36.960 d C. And research operations around the around the world, 1:18:37.240 --> 1:18:39.320 and a big focus there is how do you to 1:18:39.520 --> 1:18:41.400 not just assume people are going to come to d 1:18:41.479 --> 1:18:43.920 C to visit our physical museums, how do we take 1:18:43.960 --> 1:18:46.040 the Smithsonian to them? How do we take the Smithsonian 1:18:46.080 --> 1:18:49.720 to every home in every classroom, and obviously digital technologies 1:18:49.720 --> 1:18:52.160 are key part of that, and some of things including 1:18:52.280 --> 1:18:54.840 a virtual reality, augmented reality, or some of the things 1:18:54.840 --> 1:18:57.240 that we're testing out because it is a way to 1:18:57.400 --> 1:19:01.000 expand our kind of educational mandate. And I do think 1:19:01.040 --> 1:19:04.720 these technologies will get you know, get get broader adoption. 1:19:04.960 --> 1:19:08.000 But you say, sometimes there are these things are just 1:19:08.040 --> 1:19:10.680 take a little while. In fact, it reminds me the 1:19:10.680 --> 1:19:13.080 first time I think we met in person was twenty 1:19:13.160 --> 1:19:15.920 years ago and backstage at an Eagles concert not long 1:19:15.960 --> 1:19:19.280 after a Will merge with Time Warner uh And and 1:19:19.640 --> 1:19:22.519 even then when we did the merger, which was in 1:19:22.640 --> 1:19:25.679 two thousands of twenty two years ago, we talked about 1:19:25.680 --> 1:19:27.679 at the time what was going to happen with streaming 1:19:27.680 --> 1:19:32.519 technologies for for movies and and television. We talked about 1:19:32.560 --> 1:19:36.000 what was gonna happen with music being digitized, things like Napster. 1:19:36.120 --> 1:19:39.120 We're just bumbling bubbling at the time, but there's a 1:19:39.160 --> 1:19:42.519 lot of nervousness in the in the music industry about it. 1:19:42.560 --> 1:19:45.320 The things that we we identified twenty years ago is 1:19:45.680 --> 1:19:50.719 being likely to happen, uh and likely happened soon did happen, 1:19:50.840 --> 1:19:54.160 but they took longer to happen and salally that company 1:19:54.280 --> 1:19:56.680 well in time, Warner together weren't able to capitalize on 1:19:56.760 --> 1:19:59.360 some of those opportunities. In retrospect, you know, we really 1:19:59.360 --> 1:20:03.320 should have lad the charge, not not the Apple with 1:20:03.439 --> 1:20:07.920 the iPod or or Spotify or or or Netflix or 1:20:07.920 --> 1:20:11.320 other things that really were the ultimate successors. It was 1:20:11.360 --> 1:20:13.840 clear even twenty years ago what was going to happen. 1:20:14.479 --> 1:20:17.200 We just didn't get organized to be able to pursue 1:20:17.240 --> 1:20:19.880 those opportunities. In a way, I wish we had some 1:20:19.960 --> 1:20:23.120 of them. Sometimes it's timing sometimes to just execution, not 1:20:23.160 --> 1:20:25.439 having the right people focused on the right priorities and 1:20:25.520 --> 1:20:27.560 working together in the right right kind of ways. And 1:20:27.640 --> 1:20:30.920 so that was one of the lessons from that that merger. 1:20:31.080 --> 1:20:33.639 You know, it could have been this dominant company ended 1:20:33.720 --> 1:20:37.400 up kind of shooting itself in the foot. Okay, let's 1:20:37.400 --> 1:20:40.760 go back to a o L. So the stories your 1:20:40.800 --> 1:20:43.960 brother talks about, an opportunity, you get a job that 1:20:44.240 --> 1:20:48.640 ultimately morph into a O L. What is the special 1:20:48.800 --> 1:20:53.679 sauce that you bring? What is your skill that allows 1:20:53.720 --> 1:20:56.080 you to be successful and allows the companies you're working 1:20:56.080 --> 1:21:01.320 with to be successful? No, it it's hard to say. 1:21:01.320 --> 1:21:03.639 I think it's a it's probably like most people, mixed 1:21:03.640 --> 1:21:07.280 of things. I think I do have a certain sense 1:21:07.360 --> 1:21:09.639 of the future, certain sense of what's possible. I think 1:21:09.640 --> 1:21:12.280 I think that that that's helpful. I do bring a 1:21:12.360 --> 1:21:16.479 certain passion and persistence to it. We talked about, you know, 1:21:16.520 --> 1:21:19.960 some of that before. I think that's that's helpful. I 1:21:20.000 --> 1:21:23.479 think I do bring up particular, uh, particularly early day 1:21:23.520 --> 1:21:26.640 to day well in particular skill set around marketing, you know, 1:21:26.680 --> 1:21:28.200 and some of the things that we did to really 1:21:28.479 --> 1:21:32.080 build the able brand and even distribute these free trial 1:21:32.160 --> 1:21:34.519 disc to the world to get people that you know, 1:21:34.560 --> 1:21:36.720 try out some of those marketing things. I think we're 1:21:36.720 --> 1:21:39.360 also kind of in my in my wheelhouse and thinking 1:21:39.439 --> 1:21:43.240 pretty good at building teams and getting people to work 1:21:43.280 --> 1:21:47.200 together on a on a shared mission and make it 1:21:47.360 --> 1:21:51.040 something that is aspirational, kind of a battle worth fighting. 1:21:51.360 --> 1:21:53.200 I think those are some of the dynamics. But I 1:21:53.240 --> 1:21:55.559 also would point out that none of the things I've 1:21:55.560 --> 1:21:57.360 been able to do I could have done on my own. 1:21:57.360 --> 1:22:00.519 It really is about the the team and even those 1:22:00.520 --> 1:22:02.960 early A O L days. I brought some of that 1:22:03.040 --> 1:22:05.840 marketing sense to the other co founders. Mark Sarah brought 1:22:05.840 --> 1:22:08.200 the technology sense. Jim Kimsey brought them more of the 1:22:08.240 --> 1:22:11.760 business financial sense, and you know, none of the three 1:22:11.760 --> 1:22:13.800 of us could have done that without the other the 1:22:13.800 --> 1:22:16.960 other two. So it's just always a reminder to me 1:22:17.040 --> 1:22:21.240 about this notion of off. We talked earlier about entrepreneurship 1:22:21.240 --> 1:22:23.640 really being a team sport. I have certain things I 1:22:23.640 --> 1:22:26.840 can contribute, but there are many other things I'm not 1:22:26.880 --> 1:22:29.559 good at and need to make sure the overall team 1:22:29.600 --> 1:22:32.639 has the right mix of skills and a shared sense 1:22:32.680 --> 1:22:37.760 of purpose and passion. Okay, I remember getting a free 1:22:37.800 --> 1:22:41.519 subscription to a O L via Warner Brothers Records. They 1:22:41.520 --> 1:22:44.200 had I think they had like ten free subscriptions. Had 1:22:44.280 --> 1:22:47.360 to give me one in nine two, and then I 1:22:47.400 --> 1:22:50.759 started to hear from college students based on an article 1:22:50.840 --> 1:22:54.920 I wrote in the Tower Records magazine saying, you know, 1:22:55.040 --> 1:22:58.320 can I connect with you via the Internet? But I 1:22:58.439 --> 1:23:02.280 really did not become Although I had a modem bud 1:23:02.320 --> 1:23:05.080 at the time and I was connecting, it wasn't really 1:23:05.160 --> 1:23:07.640 till the summer of ninety five that I became to 1:23:07.720 --> 1:23:10.600 say it was an active user. Was ultimately a gross understatement. 1:23:11.160 --> 1:23:14.679 When did you know on the inside that you reached 1:23:14.680 --> 1:23:20.519 a turning point the either gaining traction or traction was imminent. Well, 1:23:20.520 --> 1:23:22.920 it was about that time. We started in eighty five, 1:23:23.040 --> 1:23:25.360 but as I said before, it was really ten years 1:23:25.400 --> 1:23:30.519 of of slog to stay alive, tried different things to 1:23:31.240 --> 1:23:34.679 ultimately get successful. Uh. You know, we did go public 1:23:34.800 --> 1:23:38.240 and was the first Internet company to go public, so 1:23:38.320 --> 1:23:40.040 that was a little bit of a rite of passage. 1:23:40.479 --> 1:23:44.040 But even then there was a considerable skepticism in our 1:23:44.080 --> 1:23:47.080 I p O. We raised ten million dollars and the 1:23:47.160 --> 1:23:49.959 value of AO all that day was seventy million dollars, 1:23:50.000 --> 1:23:53.200 and nobody knew or cared about this little company. A well, 1:23:53.240 --> 1:23:54.960 that was you know, going public. It was kind of 1:23:55.000 --> 1:23:58.760 a you know, a non event um and for a 1:23:58.800 --> 1:24:01.120 few more years it was still the struggle. Most people, 1:24:01.280 --> 1:24:04.639 you know, weren't really believers in the idea of the Internet. 1:24:04.680 --> 1:24:09.439 But it was about where interest started accelerating and people 1:24:09.479 --> 1:24:12.360 started hearing about this thing called the Worldwide Web. People 1:24:12.360 --> 1:24:16.080 started hearing about some of the services available on this 1:24:16.720 --> 1:24:20.519 Internet thingy and and started wanting to get online. Thankfully 1:24:20.520 --> 1:24:22.320 at that point in time, because we've been at it 1:24:22.360 --> 1:24:24.640 for so long, you know, I always kind of the 1:24:24.720 --> 1:24:27.160 right place at the right time, and that really drove 1:24:27.240 --> 1:24:31.320 our our growth in the late nineties UH and and 1:24:31.439 --> 1:24:34.519 uh our peak about half of all the Internet traffic 1:24:34.600 --> 1:24:36.559 United States went through a well. So it was to 1:24:36.600 --> 1:24:40.280 me an example of believing early in the idea, sticking 1:24:40.280 --> 1:24:42.400 with it even though it took a decade and there 1:24:42.400 --> 1:24:45.880 were a bunch of near death experiences there. Even my 1:24:45.920 --> 1:24:50.160 parents one point called and said, like, Steve, it's like 1:24:50.200 --> 1:24:53.160 it's not working. It's you know, maybe it's time to like, 1:24:53.560 --> 1:24:55.439 you know, give it up and get a real job. 1:24:55.520 --> 1:24:57.559 And no, I think, I think, I think it will work, 1:24:57.600 --> 1:24:59.920 and give me think think I'm gonna stick with it, 1:25:00.360 --> 1:25:03.760 and eventually eventually we we we broke through. So it's 1:25:03.800 --> 1:25:08.000 a to me, it's sort of revolution sometimes happened in 1:25:08.080 --> 1:25:10.920 evolutionary ways and you have to you know, kind of 1:25:10.920 --> 1:25:13.080 take the long view and and kind of be able 1:25:13.120 --> 1:25:15.080 to you know, kind of live to fight another day. 1:25:15.160 --> 1:25:17.599 But to answer your question, it was sort of inn 1:25:18.760 --> 1:25:20.960 were things really accelerated. I also remember I think it 1:25:21.000 --> 1:25:25.679 was probably seven we moved to you know, from charging 1:25:25.760 --> 1:25:29.960 per hour to unlimited use. Not surprisingly, you should skyrocketed 1:25:30.600 --> 1:25:33.759 and our systems went down. There was so much demand 1:25:33.840 --> 1:25:37.200 that basically systems crashed. I it's for twenty three hours, 1:25:37.200 --> 1:25:41.679 AO was was inaccessible, which obviously was a problem because 1:25:42.160 --> 1:25:44.439 we had tried to get people to rely on us 1:25:44.439 --> 1:25:48.720 and we were not not providing the service they understandably expected. 1:25:48.760 --> 1:25:51.200 So in that sense, it was kind of mortifying, but 1:25:51.360 --> 1:25:54.600 also was it was It was in one way gratifying 1:25:54.680 --> 1:25:57.800 because it had gone from this thing that nobody cared 1:25:57.840 --> 1:26:00.559 about too suddenly it was this national story. It was 1:26:00.800 --> 1:26:03.559 lead story on the TV network, the lead headline most 1:26:03.560 --> 1:26:07.080 of the newspapers A well down and even a few 1:26:07.120 --> 1:26:10.120 years before, nobody even cared about it all. I who 1:26:10.160 --> 1:26:12.400 cares whether ails up or down? That's not that's not 1:26:12.439 --> 1:26:14.840 a story. So that to me was at one point 1:26:14.880 --> 1:26:17.839 where it felt like the Internet had arrived, Ail had arrived, 1:26:17.960 --> 1:26:29.760 had gone from being ignored to being essential. Okay, meanwhile, 1:26:29.920 --> 1:26:34.680 you get married and start a family, and frequently being 1:26:34.720 --> 1:26:37.439 an entrepreneur a musician, which is almost like being an 1:26:37.560 --> 1:26:43.479 entrepreneur requires all your time. Income is low. Uh did 1:26:43.520 --> 1:26:47.000 you hesitate saying, well, it's like telling your parents calling 1:26:47.040 --> 1:26:49.360 you know the job or joys feel that maybe I'll 1:26:49.439 --> 1:26:52.200 land on my feet. What were your thoughts going through 1:26:52.240 --> 1:26:55.640 your head then? No, I think there were there are 1:26:55.760 --> 1:26:58.400 some tough moments. Uh. It was it was still in 1:26:58.439 --> 1:27:02.240 my twenties that we're when we got started at mid twenties, 1:27:02.280 --> 1:27:06.960 and so when we went public, uh, I was early thirties. 1:27:07.000 --> 1:27:09.360 So this was kind of the real difficult years. We're 1:27:09.400 --> 1:27:12.040 kind of late like twenties, and and I think there 1:27:12.040 --> 1:27:14.040 were some moments where I wondered if I should do 1:27:14.120 --> 1:27:17.080 something else, but I really believed in the idea, and 1:27:17.120 --> 1:27:20.639 thankfully he was able to kind of you know, kind 1:27:20.640 --> 1:27:23.679 of get get by and kind of, as I said before, 1:27:23.760 --> 1:27:25.760 kind of lived to live to fight another day. Again. 1:27:25.800 --> 1:27:28.080 That's not you know, just my story. It's pretty common 1:27:28.640 --> 1:27:31.840 entrepreneur stories, you said, pretty common story, and other industries, 1:27:31.880 --> 1:27:35.240 including music, where people are you know, struggling For a 1:27:35.240 --> 1:27:37.880 while Springsteen was playing a whole lot of clubs, did 1:27:38.000 --> 1:27:41.040 nobody cared about until finally he was able to to 1:27:41.439 --> 1:27:43.960 break through. And I think it's a little bit of 1:27:44.000 --> 1:27:47.360 a test. You learned some things about yourself thing that process. 1:27:47.400 --> 1:27:50.040 You also have some experiences that probably do make you 1:27:50.200 --> 1:27:54.920 better and stronger ultimately. But you know, there was some 1:27:55.000 --> 1:27:58.599 difficult periods of time, but thankfully I I stuck with it. 1:27:58.640 --> 1:28:01.880 And eventually, even though sometimes it felt like the light 1:28:02.080 --> 1:28:04.120 at the end of the tunnel was the light was 1:28:04.280 --> 1:28:07.639 far away and flickering, you know, I kind of stay 1:28:07.720 --> 1:28:10.759 with it, and eventually the tunnel got a little shorter 1:28:10.760 --> 1:28:15.479 and the light got a little brighter. Okay, so a 1:28:15.680 --> 1:28:20.200 O L is marching along. In tech, you have to 1:28:20.240 --> 1:28:23.519 be ahead of the game or you die. Whereas like 1:28:23.560 --> 1:28:27.720 other industries talking about Internet, in intellectual property industries, they 1:28:27.720 --> 1:28:30.759 have a catalog, They have a back list which keeps 1:28:30.760 --> 1:28:35.559 them alive. So alll starts to roll. To what degree 1:28:35.600 --> 1:28:40.160 were you focused on where we're going next? I was 1:28:40.240 --> 1:28:42.720 mostly focused on where we go next, and then secondarily 1:28:43.000 --> 1:28:46.080 focused on continuing to build a team to scale. Always 1:28:46.080 --> 1:28:48.519 started with a couple of dozen people. By the time 1:28:48.560 --> 1:28:50.719 we went public, it was less than two hundred people. 1:28:51.360 --> 1:28:53.840 Uh six seven years later at ten thou people. So 1:28:53.880 --> 1:28:57.080 it really it really scaled up pretty pretty dramatically. So 1:28:57.520 --> 1:29:00.960 I had to, like many entrepreneurs, you know, learned to 1:29:01.720 --> 1:29:04.719 to not do certain things I had been doing and 1:29:05.040 --> 1:29:07.519 build a team that I could empower and trust to 1:29:07.640 --> 1:29:11.280 do them because I needed to focus on some things 1:29:11.320 --> 1:29:13.800 that I could perhaps uniquely do, and some of it 1:29:13.880 --> 1:29:16.360 was trying to understand what was next and positioning a 1:29:16.400 --> 1:29:19.040 company for it. So was you know, building the team. 1:29:19.120 --> 1:29:22.240 Some of it also was being kind of a spokesman 1:29:22.439 --> 1:29:24.439 evangelist for the medium. I had to do a lot 1:29:24.479 --> 1:29:27.519 of things in the particularly the late nineties to educate 1:29:27.560 --> 1:29:30.640 people around about the Internet, the press, you know, Congress, 1:29:30.720 --> 1:29:35.639 other other other other folks, to other people in other countries. 1:29:35.680 --> 1:29:39.559 Even that, because all was visible, I became kind of 1:29:39.600 --> 1:29:42.960 a a spokesperson, not just very well but in many 1:29:42.960 --> 1:29:45.360 ways for the for the industry. So I had to 1:29:45.400 --> 1:29:48.240 focus on those things. I had to spend less time 1:29:48.280 --> 1:29:49.880 on some of the things I had done, including some 1:29:49.960 --> 1:29:52.519 of the marketing things, or some of the product things, 1:29:52.600 --> 1:29:55.200 or some of the technology things that I spent more 1:29:55.240 --> 1:29:58.880 time on in the early early years. Okay, so from 1:29:58.880 --> 1:30:01.880 my perspective, once a again I had a free subscription 1:30:01.920 --> 1:30:03.880 when you charged by the hour, never mind a free 1:30:03.920 --> 1:30:07.360 subscription through the nineties I was living on the service 1:30:07.479 --> 1:30:11.120 was a big education. I remember vividly in the summer 1:30:11.160 --> 1:30:15.799 of nine six you could launch a browser on AOL. 1:30:16.800 --> 1:30:19.960 But for me, the real breakthrough moment was in the 1:30:20.040 --> 1:30:22.320 summer of two thousand. I went to visit my sister 1:30:22.360 --> 1:30:26.360 in Minneapolis where she had a high speed connection, which 1:30:26.400 --> 1:30:30.439 of course led you to Napster. Now, in this particular case, 1:30:31.320 --> 1:30:33.160 I maintained, I don't think we had to pay for 1:30:33.160 --> 1:30:36.520 a while my A O L and the high speed connection, 1:30:37.000 --> 1:30:40.400 I got quite a way right away. But for me, 1:30:41.280 --> 1:30:44.519 what killed A O L or put a dent in 1:30:44.600 --> 1:30:46.479 it was more just the fact there was a high 1:30:46.520 --> 1:30:49.479 speed connection sold by the cable company or a third party, 1:30:49.760 --> 1:30:52.800 and that was twenty dollars right there, and people didn't 1:30:52.840 --> 1:30:56.800 want to spend multiple as opposed to it being the 1:30:56.880 --> 1:31:00.439 Web that put a dent in AO. Well, what do 1:31:00.520 --> 1:31:03.280 you think from your inside view, Yeah, I think that 1:31:03.280 --> 1:31:07.840 that's fair. The way AOL when it first launched, it 1:31:08.120 --> 1:31:11.760 as other competitors at the time, was separated from the 1:31:11.800 --> 1:31:15.680 Internet because at the time and when we started, it's 1:31:15.680 --> 1:31:17.840 hard for people to believe us. But it's true it 1:31:17.920 --> 1:31:20.960 was actually illegal for consumers or businesses to be on 1:31:21.000 --> 1:31:24.160 the Internet. A few years later, Congress passed some legislation 1:31:24.200 --> 1:31:26.879 to commercialize the Internet, but the early years it was separate. 1:31:27.120 --> 1:31:30.760 When the Internet got commercialized, that actually accelerated A A 1:31:30.800 --> 1:31:33.400 Well's growth because people wanted to be on the internet. 1:31:33.640 --> 1:31:37.720 We integrated a very fast web browsers, so actually you 1:31:37.760 --> 1:31:42.320 could get the websites through a well faster particularly with slow, 1:31:42.520 --> 1:31:45.000 slow modems, and you could with most of the other 1:31:45.080 --> 1:31:48.160 Internet service providers. And in addition to that, we provided 1:31:48.200 --> 1:31:51.519 a whole suite of services that were exclusive to well 1:31:51.560 --> 1:31:55.560 people connection and a lot of exclusive content and and 1:31:55.640 --> 1:31:58.160 other services, so sort of the Internet and a whole 1:31:58.200 --> 1:32:00.840 lot more for about the same price as the Internet only, 1:32:01.240 --> 1:32:04.120 and that's really what drove our our hyper growth in 1:32:04.160 --> 1:32:08.280 the late nine nineties. You're right, the transition to broadband 1:32:08.360 --> 1:32:12.880 was was more challenging. We actually argued in Congress to 1:32:13.120 --> 1:32:17.160 pass legislation to open up the cable broadband networks so 1:32:17.320 --> 1:32:20.600 it would work like the dial up narrowband networks. The 1:32:20.680 --> 1:32:24.280 phone companies were required to allow other people to operate 1:32:24.360 --> 1:32:27.560 on their their networks. The cable companies were not required 1:32:27.600 --> 1:32:30.479 to do that. Uh, And that effort did not succeed, 1:32:30.560 --> 1:32:33.960 and so essentially the broadband networks remained closed as opposed 1:32:33.960 --> 1:32:36.080 to being opened, which was one of the reasons that 1:32:36.160 --> 1:32:38.439 led to our merger with Time Warner, because the part 1:32:38.439 --> 1:32:40.800 of the reason to do that was Time Warner at 1:32:40.800 --> 1:32:43.160 the time had Time Warner Cable, which was the largest 1:32:43.160 --> 1:32:47.000 cable system with the largest broadband footprints, So we knew 1:32:47.040 --> 1:32:50.439 the market was moving to broadband. We couldn't on our 1:32:50.479 --> 1:32:53.599 own get there, and so by merging with Time Warner 1:32:53.600 --> 1:32:55.800 would have a clearer path the broadband as well as 1:32:55.840 --> 1:32:59.160 obviously all the other businesses that were part of Time Warner, 1:32:59.200 --> 1:33:02.360 including some of the media business, Warner Music, Warner Brothers, 1:33:02.439 --> 1:33:06.000 you know, CNN, HBO, you know, Time Ink, you know, 1:33:06.120 --> 1:33:08.120 many many other things that were part of that. So 1:33:08.520 --> 1:33:10.439 it was sort of the obvious thing to do in 1:33:10.520 --> 1:33:13.120 terms of ensuring our path the broadband, as well as 1:33:13.160 --> 1:33:16.599 having a broad suite of really great brands that would 1:33:16.600 --> 1:33:20.240 be more valuable in a in a digital world. So 1:33:20.320 --> 1:33:23.679 that really was the motivator doing. Unfortunately, once we did merge, 1:33:24.280 --> 1:33:27.639 uh that some of the synergies that struck me as obvious, 1:33:27.640 --> 1:33:32.280 we're not really pursued integrating a Well and Time Warner Cable. 1:33:32.360 --> 1:33:35.120 So it was one bundled offering, which is what you 1:33:35.240 --> 1:33:39.240 mentioned before, never happened, ended up really competing with each 1:33:39.280 --> 1:33:42.799 other as opposed to benefiting from each other, and ultimately 1:33:42.840 --> 1:33:45.840 that led to you know, not capitalizing on some of 1:33:45.840 --> 1:33:49.320 these opportunities, which which led to the a well going 1:33:49.360 --> 1:33:51.360 from the leader of the pact of being kind of 1:33:51.400 --> 1:33:54.240 irrelevant now, which is which is sad to see and 1:33:54.479 --> 1:33:56.880 it's sad to say, but that that that's the reality. 1:33:56.920 --> 1:33:59.280 I think the takeaway from me goes back to some 1:33:59.320 --> 1:34:03.120 of the things we talked about before getting the you know, 1:34:03.160 --> 1:34:08.400 the vision right is helpful and important, but that's really 1:34:08.439 --> 1:34:10.840 just the starting point. If you look at the initial 1:34:10.920 --> 1:34:13.080 press release we wrote when we merged ale on Time 1:34:13.080 --> 1:34:17.200 war two years ago, it was largely accurate and predicting 1:34:17.280 --> 1:34:19.320 what was going to happen over the next ten or 1:34:19.320 --> 1:34:23.320 twenty years. But our inability to organize the company to 1:34:23.439 --> 1:34:26.839 capitalize on those opportunities and some of the friction between 1:34:26.880 --> 1:34:31.600 different divisions basically hobbled our ability to execute against that 1:34:31.680 --> 1:34:34.599 vision and ultimately lead to you know, the company being 1:34:34.640 --> 1:34:38.599 broken up. So at what point, if the merger happened 1:34:38.640 --> 1:34:41.840 in two thousand, at what point did you have the 1:34:41.920 --> 1:34:46.000 idea it was Time Warner always the target or were 1:34:46.040 --> 1:34:50.400 there other companies in the mix. There are other companies 1:34:50.400 --> 1:34:55.519 in the mix. In in nineteen you know, the when 1:34:55.520 --> 1:34:59.960 the internet really was you know, growing dramatically in popular 1:35:00.000 --> 1:35:04.200 already and a Well's growth rate was accelerating dramatically. Also, 1:35:04.240 --> 1:35:09.000 our stock market valuation accelerated dramatically. We went from mentioned 1:35:09.000 --> 1:35:13.439 we went public in seventy million by late ninete it 1:35:13.520 --> 1:35:16.360 was on sixty billion dollars. It was actually the best 1:35:16.400 --> 1:35:19.360 performing stock of the decades, something like eleven thousand percent 1:35:19.439 --> 1:35:21.960 increase from the time we went public. And so we 1:35:22.120 --> 1:35:26.480 did see the value of having more diversified mix of businesses. 1:35:26.520 --> 1:35:29.960 So we did want to use our our stock our currency, 1:35:30.000 --> 1:35:33.080 if you will, to merge with other companies. We considered 1:35:33.080 --> 1:35:36.840 a lot of different options, including some communications companies that 1:35:37.040 --> 1:35:39.360 you know, discussions with A T and T about merging 1:35:39.439 --> 1:35:43.240 for example. We also talked to a number of of 1:35:43.800 --> 1:35:47.920 internet companies, email, electronic arts, you know, others around merging. 1:35:48.320 --> 1:35:50.960 But but we always kept their eye on the prize, 1:35:50.960 --> 1:35:53.000 which we did believe was time warn't for the reasons 1:35:53.080 --> 1:35:55.640 I said before. It was unique in being able to 1:35:56.120 --> 1:35:58.519 you know, provide what at the time at least I 1:35:58.560 --> 1:36:01.920 thought was uh path the broadband that we couldn't get 1:36:01.960 --> 1:36:04.320 on our own and couldn't get with any other other company, 1:36:04.720 --> 1:36:07.719 which is why I pursued that in particular, and indeed 1:36:07.720 --> 1:36:10.920 the first conversation I had with Jerry Levine, who was, 1:36:11.000 --> 1:36:13.000 as you know, the CEO of Time Warner at the time, 1:36:13.400 --> 1:36:17.000 proposing the idea of merging our companies. Within the first 1:36:17.040 --> 1:36:19.639 minute of explaining why I thought we should merge our companies, 1:36:19.720 --> 1:36:22.200 I said, and if we can do this, I will 1:36:22.240 --> 1:36:25.240 step aside as CEO and let you run the combined company. 1:36:25.800 --> 1:36:27.559 Because I knew it would be hard to get a 1:36:27.640 --> 1:36:30.960 deal with with Time Warner had done. Our value was 1:36:31.080 --> 1:36:33.479 quite a bit higher than their value, and they're all 1:36:33.520 --> 1:36:36.160 kinds of other issues that we're going to be complicating issues. 1:36:36.240 --> 1:36:38.719 But since was the only path to get it done 1:36:39.320 --> 1:36:43.960 was to basically propose that the Time Warner side essentially 1:36:44.000 --> 1:36:46.599 run the combined company. So that's why I did. And 1:36:46.640 --> 1:36:48.599 when we when we did close the merger, I did 1:36:48.600 --> 1:36:51.160 step aside as a CEO, even a well didn't no 1:36:51.240 --> 1:36:54.080 longer reported to me. I was chair of the board 1:36:54.080 --> 1:36:57.000 for a couple of years, and then uh, you know, 1:36:57.080 --> 1:36:59.320 on the board for another year or two, and finally 1:36:59.360 --> 1:37:01.880 decided it was time to move on. We just had 1:37:01.880 --> 1:37:05.120 a difference of opinion of what to do, and I 1:37:05.120 --> 1:37:07.640 think they were getting tired of me saying let's go 1:37:07.720 --> 1:37:09.640 left when they wanted to go right, and I was 1:37:09.760 --> 1:37:12.760 tired as well, so it was time to to kind 1:37:12.760 --> 1:37:15.680 of part ways. And and even though it's obviously a 1:37:15.680 --> 1:37:18.719 big disappointment, and that ultimately led me on this path 1:37:18.800 --> 1:37:21.240 that had been on for most of the past two decades, 1:37:21.720 --> 1:37:25.200 instead of starting in their company, starting revolution a company 1:37:25.200 --> 1:37:29.080 to invest in many entrepreneurs with a particular bias, as 1:37:29.120 --> 1:37:32.360 we've discussed around investing in entrepreneurs outside of the usual 1:37:32.439 --> 1:37:35.920 hubs like like Silicon Valley. So the legend is that 1:37:36.160 --> 1:37:40.560 ultimately the time Warner side of the company became resistant 1:37:40.600 --> 1:37:43.280 to the A O L people in the A Well 1:37:43.400 --> 1:37:47.479 ideas set an accurate description, Yeah, I think that's accurate. 1:37:47.520 --> 1:37:49.479 I think in retrospect we could have handled it better. 1:37:49.640 --> 1:37:52.600 We probably were a little toned depth diplomatic as we 1:37:52.640 --> 1:37:54.880 could have been. There. There's definitely a sense that these, 1:37:55.400 --> 1:37:57.120 you know, new kids on the block that haven't been 1:37:57.120 --> 1:38:00.360 around long are coming and telling us you know what 1:38:00.439 --> 1:38:02.720 to do. And I'm sure there was more of that 1:38:02.760 --> 1:38:04.960 than I was even aware of, which was which was 1:38:05.000 --> 1:38:08.760 a mistake, But there also was a reluctance on the 1:38:08.800 --> 1:38:11.559 part of a lot of parts of the was then 1:38:11.600 --> 1:38:15.360 time Warner to really fully embrace the Internet, fully embraced 1:38:15.400 --> 1:38:19.439 the idea of digital convergence, fully embraced the reality. That 1:38:19.520 --> 1:38:22.599 also meant it would challenge some of the existing business models. 1:38:22.680 --> 1:38:25.960 You have to involve some of the interesting business models, 1:38:26.000 --> 1:38:28.920 and I think there was just a reluctance to do that, 1:38:29.120 --> 1:38:31.960 and in a sense that might take longer for some 1:38:32.040 --> 1:38:35.639 of those innovations to to happen. I again sort of 1:38:35.840 --> 1:38:38.720 remember a meeting probably at least twenty years ago with 1:38:38.760 --> 1:38:41.400 some of the folks UM on the Warner Music side 1:38:41.560 --> 1:38:44.280 and talking about was likely I thought it conda happen 1:38:44.360 --> 1:38:49.080 around streaming, and what likely also going to happen around um, 1:38:49.120 --> 1:38:52.160 you know, kind of how music companies might be structured, 1:38:52.200 --> 1:38:54.280 and over time maybe it's a little bit more like 1:38:54.479 --> 1:38:57.120 you know, venture capital, where they're investing in a new 1:38:57.240 --> 1:39:01.679 artist and and share in the upside across multiple, uh, 1:39:01.760 --> 1:39:04.599 you know, parts of the artist's career what then became 1:39:04.600 --> 1:39:07.080 known as three sixty deals. That seemed like it was 1:39:07.120 --> 1:39:09.120 a pretty obvious thing that was going to happen, but 1:39:09.160 --> 1:39:11.160 there was a lot of resistance to that because the time, 1:39:11.200 --> 1:39:14.160 as you know, the way that business was organized, as 1:39:14.560 --> 1:39:17.240 you know, the music companies just put out the music, 1:39:17.320 --> 1:39:19.439 and you know, somebody else did the concerts, and somebody 1:39:19.439 --> 1:39:21.360 else had the publishing, and somebody else did this, and 1:39:21.400 --> 1:39:24.400 somebody else did that, and having a more integrated view 1:39:24.400 --> 1:39:27.040 of it was just not something most people either believed 1:39:27.040 --> 1:39:30.240 in or just believed you practically they could get everybody 1:39:30.320 --> 1:39:33.040 organized and headed in that, you know, that direction. So 1:39:33.400 --> 1:39:35.080 again it goes back to I said earlier, it's sort 1:39:35.080 --> 1:39:39.160 of a lesson around you know, the idea is important, 1:39:39.240 --> 1:39:43.240 but ultimately it's putting that idea into action. Uh. And 1:39:43.280 --> 1:39:45.400 the fact that we had some of the right ideas 1:39:45.439 --> 1:39:47.600 around what was going to happen with broadband, I was 1:39:47.600 --> 1:39:49.479 going to happen with streaming, or what was going to 1:39:49.560 --> 1:39:53.760 happen with many many different things is sort of irrelevant 1:39:53.840 --> 1:39:57.080 because we weren't able to be the company that actually 1:39:57.760 --> 1:40:01.680 made that happen. And so that apply that lesson to 1:40:01.800 --> 1:40:05.439 the work we're doing now at Revolution, including Rise of 1:40:05.439 --> 1:40:07.000 the Rest. And part of the reason they even wrote 1:40:07.000 --> 1:40:08.760 the book on the Rise of the Rest is I 1:40:08.800 --> 1:40:11.959 really wanted to tell the stories of these these entrepreneurs, 1:40:11.960 --> 1:40:16.240 these companies that were doing amazing things that really inspired me. 1:40:16.320 --> 1:40:21.040 And and also surprised me in many ways, and I 1:40:21.080 --> 1:40:24.799 wanted to make sure that people understood what was happening 1:40:24.800 --> 1:40:27.360 with these with these companies, and particularly understood what was 1:40:27.400 --> 1:40:30.479 happening in these cities that we're kind of being renewed 1:40:30.520 --> 1:40:33.760 and revitalized because of the work of those entrepreneurs. So 1:40:33.760 --> 1:40:36.080 it goes back to this issue of of trying to 1:40:36.479 --> 1:40:39.599 make sure, you know, we don't just say we think 1:40:39.600 --> 1:40:42.000 the rest surprize we hit the road, whether it be 1:40:42.080 --> 1:40:44.479 bus tours or launching a fund or writing a book, 1:40:44.479 --> 1:40:47.640 to actually do everything we can to make sure the 1:40:47.680 --> 1:40:49.920 rest rise, to make sure we kind of level the 1:40:49.920 --> 1:40:56.200 playing field for entrepreneurs in America. So in business books 1:40:56.960 --> 1:41:00.240 and in media, the A O L Time and our 1:41:00.320 --> 1:41:05.520 merger is portrayed is the worst in history of business. 1:41:06.240 --> 1:41:08.679 To what degreed is that effect? And usually people writing 1:41:08.720 --> 1:41:12.640 that have no vision, no knowledge of the inside. Is 1:41:12.640 --> 1:41:15.960 that something that has emotionally hurt you? Is that something 1:41:16.000 --> 1:41:18.040 on your back or is that something those people just 1:41:18.080 --> 1:41:21.520 don't understand what's going on. And I've moved on well 1:41:21.600 --> 1:41:24.280 about that because you don't love the fact that it's 1:41:24.400 --> 1:41:26.160 it's you. It is the worst merger in history. I 1:41:26.240 --> 1:41:29.599 understand why it is. It was the largest merger in history, 1:41:29.600 --> 1:41:32.120 and it was the execution of it was flawed in 1:41:32.160 --> 1:41:33.960 the way as I mentioned, So I think it's fair 1:41:34.000 --> 1:41:37.760 to characterize it as that I of course have a 1:41:37.840 --> 1:41:41.120 slightly different view, maybe more than slightly different view of 1:41:41.160 --> 1:41:44.439 exactly what happened and why it happened. UH, and also 1:41:44.600 --> 1:41:47.800 have the view of the CEO a O Well, which 1:41:47.880 --> 1:41:49.800 might be different than the view of the CEO of 1:41:49.880 --> 1:41:53.320 Time Warner, because for for us and our shareholders in retrospect, 1:41:53.320 --> 1:41:56.000 turned out to be a good thing to do. But 1:41:56.360 --> 1:41:59.600 but certainly understand some of the the the dynamic that 1:41:59.720 --> 1:42:01.639 just in terms of the economics that I just did 1:42:01.720 --> 1:42:04.280 quickly you know, cover it. When when we did the 1:42:04.600 --> 1:42:07.960 you know, the merger, as I recall, the numbers were 1:42:08.000 --> 1:42:12.080 something like the combined company UH would do about forty 1:42:12.160 --> 1:42:16.320 billion of revenue and ten billion of profits something in 1:42:16.320 --> 1:42:21.960 those that magnitude. UH and UH A Well contributed about 1:42:21.960 --> 1:42:24.639 a billion of that ten billion of profit. But able 1:42:24.720 --> 1:42:27.920 shareholders ended up with fifty of the combined company. So 1:42:28.000 --> 1:42:30.120 for the able shareholders, it was a way not just 1:42:30.200 --> 1:42:32.559 to have this what we thought would be this great 1:42:32.600 --> 1:42:36.240 path to broadband, but also with more diversified mixt of businesses, 1:42:36.280 --> 1:42:39.320 and we concluded the better for the able shareholders instead 1:42:39.320 --> 1:42:44.360 of owning a well of this much larger, much much 1:42:44.400 --> 1:42:47.840 more profitable, much more diversified company. I get it that 1:42:47.920 --> 1:42:51.240 the people on the Time Warner side, you know, in retrospect, 1:42:51.280 --> 1:42:53.479 did not view it the same way. I understand why 1:42:53.800 --> 1:42:57.439 people were frustrated and when the stock market crashed after 1:42:57.479 --> 1:42:59.519 the merger, not just for our company, but from many 1:42:59.520 --> 1:43:02.400 other company's. Obviously a lot of people got hurt by that. 1:43:02.479 --> 1:43:05.240 I also understand that. But but do bring the lens 1:43:05.320 --> 1:43:08.360 of of you know what I was charged with doing 1:43:08.400 --> 1:43:13.440 a CEO? H Well, okay, Time Warner was ultimately destroyed 1:43:13.479 --> 1:43:17.519 as a company, broken up, pieces sold off. Presently, David 1:43:17.680 --> 1:43:22.920 Zaslav runs has all the content with Discovery with an 1:43:22.920 --> 1:43:26.320 amazing amount of debt, and keeps cutting costs and programs. 1:43:27.080 --> 1:43:31.720 Rupert Murdoch sold the Fox other than the channel and 1:43:31.800 --> 1:43:35.600 the uh TV stations, I believe, sold all the library 1:43:35.640 --> 1:43:40.639 and the production of Fox to Disney. What should these 1:43:40.680 --> 1:43:44.080 people be doing and what do you view the future 1:43:44.160 --> 1:43:48.760 of this big time entertainment going forward? I don't know. 1:43:48.800 --> 1:43:51.760 I think others have a more informed view I've been 1:43:51.840 --> 1:43:54.479 largely out of it for for two decades and focused 1:43:54.479 --> 1:43:58.920 on this, this next generation of entrepreneurs. I think some 1:43:59.000 --> 1:44:02.120 of the things that Disney is done recently are consistent 1:44:02.160 --> 1:44:04.599 with the kind of things I thought all time Warner 1:44:04.600 --> 1:44:06.960 could do in terms of really driving some of the 1:44:07.080 --> 1:44:09.559 streaming doesn't think we have done with Disney Plus in 1:44:09.600 --> 1:44:14.160 particular is really quite impressive and uh and and because 1:44:14.200 --> 1:44:17.160 they really got the whole company behind that initiative. And 1:44:17.160 --> 1:44:20.120 and so I think when companies really get organized and 1:44:20.280 --> 1:44:24.400 have strategic priorities and need strategic imperatives, and Disney basically said, 1:44:24.439 --> 1:44:27.439 we now recognize the future is is streaming. We need 1:44:27.479 --> 1:44:30.000 to control our destiny. We need to have more direct 1:44:30.000 --> 1:44:32.439 control of our customer and not just rely on Netflix 1:44:32.520 --> 1:44:35.680 or others is sort of intermediaries. They put kind of 1:44:35.720 --> 1:44:38.639 everything behind that, and that ultimately led to the success. 1:44:38.680 --> 1:44:41.280 I think that's hard for big companies to do, but 1:44:41.400 --> 1:44:43.000 that's what they need to do. One of the reasons 1:44:43.040 --> 1:44:47.200 I'm so excited about backing entrepreneurs across a variety of 1:44:47.200 --> 1:44:50.080 sectors is having lived that. I kind of know how 1:44:50.120 --> 1:44:53.840 the big companies, the big companies in the industries that 1:44:53.920 --> 1:44:56.400 are up for up for grabs. Now outside of the 1:44:57.040 --> 1:45:00.559 entertainment business, music business, that publishing businesses, that the digital 1:45:00.600 --> 1:45:03.760 businesses that were associated with Ale and Time Warner, but 1:45:03.880 --> 1:45:05.680 some of the things we've talked about before, like a 1:45:05.680 --> 1:45:10.080 healthcare industry or or other other industries, I understand kind 1:45:10.120 --> 1:45:12.200 of the plays that the big companies are going to run. 1:45:12.280 --> 1:45:16.200 And those plays are even clear when the economy is tougher, 1:45:16.280 --> 1:45:21.519 the markets are tougher, inflation is rising, what's gonna likely happen. 1:45:21.560 --> 1:45:24.320 Many of those companies will pull back on their long 1:45:24.479 --> 1:45:27.880 term innovation initiatives because they cost a lot of money 1:45:27.880 --> 1:45:30.880 and they have an uncertain future, which actually creas even 1:45:31.000 --> 1:45:33.519 more of an opening for the entrepreneurs. They're trying to 1:45:33.600 --> 1:45:37.600 challenge those incumbents and and bring on new ideas. And so, 1:45:37.720 --> 1:45:41.120 having lived through that watching little companies that were just 1:45:41.360 --> 1:45:44.559 around the fringes, when when we did the deal with 1:45:44.680 --> 1:45:47.200 the Able and Time Warner, I stepped aside companies like 1:45:47.720 --> 1:45:50.040 Google and Amazon. We actually had a deal with Google 1:45:50.080 --> 1:45:52.320 early on where we were able at five percent of 1:45:52.320 --> 1:45:54.599 the equity and Google because they wanted to help us 1:45:54.800 --> 1:45:58.080 use their search engine for our audience. You know, those 1:45:58.120 --> 1:46:00.720 companies have risen over the last in a year as well, 1:46:01.000 --> 1:46:03.720 uh well has has been in decline, and now are 1:46:03.760 --> 1:46:07.200 these new powerhouses. That's going to happen in industries all 1:46:07.240 --> 1:46:10.639 across the economy, and it's going to happen in cities 1:46:10.680 --> 1:46:13.559 all across you know, the country. And so that's really 1:46:13.560 --> 1:46:15.920 why the sort of some of the work I'm doing 1:46:15.960 --> 1:46:19.280 now around rise the rest and backing these entrepreneurs and 1:46:19.320 --> 1:46:22.840 supporting these cities and partly informed by that that experience 1:46:22.880 --> 1:46:25.800 and a belief that most of the innovation will come 1:46:25.880 --> 1:46:29.320 from uh, these these entrepreneurs with with with new ideas, 1:46:29.360 --> 1:46:32.479 new business models, new perspectives that can move more quickly 1:46:32.960 --> 1:46:37.160 and and uh try things in a more kind of 1:46:37.439 --> 1:46:41.599 agile kind of way than big companies that big companies generally, 1:46:42.080 --> 1:46:46.320 you know, play defense when young entrepreneur companies are are 1:46:46.320 --> 1:46:49.720 playing offense. You know, the big companies generally are are 1:46:49.880 --> 1:46:53.200 are just more short term oriented. You know, younger companies 1:46:53.400 --> 1:46:55.400 are kind of take the long term view. So I 1:46:55.400 --> 1:46:59.880 think it's very exciting time for innovation entrepreneurship in the country, 1:47:00.040 --> 1:47:02.879 and it's going to impact every aspect of our lives. 1:47:03.080 --> 1:47:04.880 You know, how we learn, how we eat, how do 1:47:04.960 --> 1:47:07.040 we stay healthy, how do we move around, how do 1:47:07.120 --> 1:47:10.439 we invest, etcetera. Uh, And you know, a lot of 1:47:10.439 --> 1:47:12.920 that innovation is going to come from this next generation 1:47:13.520 --> 1:47:15.559 of entrepreneurs and a lot of that innovation is going 1:47:15.640 --> 1:47:18.719 to happen and these dozens of rides the rest cities 1:47:18.840 --> 1:47:21.080 I write about in the book, and you know, Silicon 1:47:21.160 --> 1:47:23.840 Valley will still be strong, will still be the most 1:47:23.880 --> 1:47:27.160 innovative startup hub in the country, indeed probably in the world. 1:47:27.920 --> 1:47:30.080 But we hit peaks Anilicon Valley a few years ago, 1:47:30.320 --> 1:47:33.240 and the rise of the rest is accelerating. The pandemic 1:47:33.280 --> 1:47:36.080 has been a tipping point, and so I think people 1:47:36.080 --> 1:47:39.720 are should pay more attention to the people and places 1:47:39.760 --> 1:47:44.160 that have generally been left left out of the innovation discussion. 1:47:44.560 --> 1:47:46.519 I think that's where the action as, that's where the 1:47:46.520 --> 1:47:50.600 puck is going. Okay, so you spoke in both the 1:47:50.600 --> 1:47:54.280 book and earlier about three waves. Could briefly, could you 1:47:54.320 --> 1:47:57.479 delineate the first and second wave and expand upon the 1:47:57.560 --> 1:48:01.400 third wave where we are now? Well, the first wave 1:48:01.439 --> 1:48:02.880 of the Internet was goes back to some of the the 1:48:02.920 --> 1:48:05.200 things we talked about before with companies like A Well, 1:48:05.240 --> 1:48:07.439 but obviously there were many others. It was taking it 1:48:07.520 --> 1:48:10.719 what was just an idea and turning into a reality, 1:48:10.800 --> 1:48:13.960 building the automaps, building the servers, building the content, and 1:48:13.960 --> 1:48:16.920 other reasons that people should get online. Uh, And so 1:48:17.000 --> 1:48:19.960 that really was the eighties and nineties, and and you 1:48:20.000 --> 1:48:23.080 know that was really you know when the Internet when 1:48:23.280 --> 1:48:26.760 exactly what you said before sort of arrived. And you know, 1:48:26.760 --> 1:48:29.720 it took ten, fifteen, twenty years for you before it 1:48:29.760 --> 1:48:33.400 really kind of arrived, but eventually it did. That then 1:48:33.479 --> 1:48:35.880 set the stage for the second wave of the Internet. 1:48:35.960 --> 1:48:38.360 And because at that point the Internet was built and 1:48:38.400 --> 1:48:41.280 everybody was connected, you didn't have to focus so much 1:48:41.320 --> 1:48:44.559 on the building phase or the infrastructure phase. You could 1:48:44.560 --> 1:48:47.280 focus essentially focus on building on top of the Internet. 1:48:47.720 --> 1:48:50.519 And it's particularly building software and apps on top of 1:48:50.560 --> 1:48:53.160 the Internet. And a lot of the big innovations in 1:48:53.200 --> 1:48:56.320 the last couple of decades have basically been that you know, apps, 1:48:56.479 --> 1:48:59.400 whether it be you know, Facebook or Twitter or Google 1:48:59.439 --> 1:49:02.040 or other things. It's basically software writing on top of 1:49:02.040 --> 1:49:04.960 the Internet. And that's been super important obviously created some 1:49:05.120 --> 1:49:08.880 super valuable companies. The third wave of the Internet, which 1:49:08.920 --> 1:49:11.280 is the phase we're now in, is and we talked 1:49:11.280 --> 1:49:12.720 about some of this before is sort of when the 1:49:12.720 --> 1:49:15.479 Internet meets the real world, and that's when it really is, 1:49:15.880 --> 1:49:18.800 you know, disrupting some of the big industries like healthcare 1:49:18.840 --> 1:49:21.479 and the important aspects of our lives. And that's going 1:49:21.560 --> 1:49:25.200 to require, I believe, a different entrepreneurial playbook. It's not 1:49:25.280 --> 1:49:28.000 just about the software, not just about the apps, not 1:49:28.120 --> 1:49:30.400 just about trying to get the idea spread you know, 1:49:30.520 --> 1:49:32.760 you know, kind of you know, viral e and then 1:49:32.760 --> 1:49:35.479 figuring out ways to monetize it. It's going to require 1:49:35.600 --> 1:49:40.400 more systems level change to really change sectors like like healthcare, 1:49:40.400 --> 1:49:45.040 So partnerships will become more important, policy will become more important. 1:49:45.080 --> 1:49:48.120 These tend to be regulated sectors and entrepreneurs don't like 1:49:48.160 --> 1:49:50.320 dealing with regular but the reality they have to if 1:49:50.320 --> 1:49:53.400 they're going to innovate in this in this third wave. Uh. 1:49:53.439 --> 1:49:55.280 And it's also going to play to the rise of 1:49:55.360 --> 1:49:58.519 rest in place. It's gonna advantage the cities that have 1:49:58.680 --> 1:50:01.599 some of the domain expertise, send credibility, and in some 1:50:01.680 --> 1:50:03.599 of these sectors that are up for grabs. So I 1:50:03.600 --> 1:50:06.720 think even though the first wave was certainly exciting and 1:50:07.000 --> 1:50:10.040 taking the Internet from being an idea to being a reality, 1:50:10.520 --> 1:50:12.960 and the second wave also was very exciting because all 1:50:13.000 --> 1:50:15.000 the things that we've had been built on top of 1:50:15.000 --> 1:50:17.760 the Internet that we're particularly doing the pandemic, we're able 1:50:17.800 --> 1:50:20.720 to take advantage of in ways that seemed inconceivable just 1:50:21.120 --> 1:50:24.000 twenty years ago. I think the third wave, when it 1:50:24.080 --> 1:50:26.719 really is, you know, the Internet meeting the real world, 1:50:26.800 --> 1:50:29.920 is where the most interesting and most successful and most 1:50:29.960 --> 1:50:33.000 valuable companies will will be created, and it will have 1:50:33.439 --> 1:50:38.560 a very uh substantial impact in terms of of America's 1:50:38.640 --> 1:50:42.080 leadership in innovation entrepreneurship. And I hope, which is why 1:50:42.160 --> 1:50:44.160 we're working so hard on the Rise of Rest. I 1:50:44.160 --> 1:50:47.640 hope it will be a more inclusive approach to innovation 1:50:47.880 --> 1:50:52.240 entrepreneurship that does include more people, does include more places 1:50:52.280 --> 1:50:54.960 they are. More people can therefore be optimistic about the 1:50:55.000 --> 1:50:58.000 future as opposed to anxious about the future. We can 1:50:58.080 --> 1:51:01.160 maximize the shots on Goald max My is the ideas 1:51:01.160 --> 1:51:04.519 we try by backing more more entrepreneurs and in more 1:51:04.560 --> 1:51:07.519 cities around the country, and hopefully people reading the Rise 1:51:07.560 --> 1:51:11.120 of Rest book will see why I'm so enthusiastic about 1:51:11.120 --> 1:51:13.720 this and so optimistic about it. It's it's something that 1:51:13.760 --> 1:51:17.719 I've had the privilege of having a front row seat 1:51:17.760 --> 1:51:21.120 literally a bus in some cases over the last decade 1:51:21.240 --> 1:51:24.559 as he developed. And I'm excited about the rise of rest. 1:51:24.680 --> 1:51:27.360 I was in that those early days of the Internet 1:51:27.360 --> 1:51:30.519 when it I believe in the idea even when others didn't. 1:51:31.400 --> 1:51:34.120 To me, the rise of rest is sort of deja 1:51:34.200 --> 1:51:37.760 vu all over again. And sectors other than healthcare that 1:51:37.840 --> 1:51:41.360 are right for integration with the Internet or to be disrupted. 1:51:42.400 --> 1:51:44.320 I mention them basically, if you look at the most 1:51:44.360 --> 1:51:47.120 important aspects of your lives, they've changed a little bit, 1:51:47.400 --> 1:51:50.880 uh in in the last ten thirty years. They'll change 1:51:50.880 --> 1:51:54.000 a lot more in the next ten years. And that's 1:51:54.040 --> 1:52:00.000 this acceleration of digital technology, acceleration of the internet. Uh. 1:52:00.000 --> 1:52:02.400 And you know healthcare, for examples one six of the economy, 1:52:03.080 --> 1:52:04.840 it doesn't work all that well, you know, and there 1:52:04.880 --> 1:52:07.800 are ways to provide better care and better outcomes, greater 1:52:07.840 --> 1:52:11.320 convenience and lower costs that new uh. You know, people 1:52:11.360 --> 1:52:13.680 with new ideas. Many of those will come from young 1:52:13.720 --> 1:52:17.519 companies led by entrepreneurs, are gonna kind of you lead 1:52:17.560 --> 1:52:20.840 the charge on where you're reimagining our food systems, which 1:52:20.880 --> 1:52:25.080 generally are too industrial and not particularly healthy and companies 1:52:25.120 --> 1:52:27.320 that that were back there, like like a Sweet Green 1:52:27.439 --> 1:52:30.760 or and many others are really leading the charge. There's 1:52:30.760 --> 1:52:34.360 a lot of things happening around reimagining education, both the 1:52:34.479 --> 1:52:36.800 K twelve education as well as you know kind of 1:52:36.800 --> 1:52:41.200 colleges and universities, you know, lifelong learning. Digital technology will 1:52:41.560 --> 1:52:43.880 play a key role, you know kind of there. So 1:52:43.920 --> 1:52:47.280 it really is, you know, just all across the you know, 1:52:47.320 --> 1:52:50.680 the landscape in terms of really big industries that are 1:52:50.720 --> 1:52:53.479 likely to change a lot, and really important parts of 1:52:53.479 --> 1:52:55.840 our lives that are likely to change a lot. Yeah. 1:52:55.840 --> 1:52:57.840 That what I would encourage people to do, which again 1:52:57.880 --> 1:52:59.880 is probably reason I wrote the book, is don't you 1:53:00.280 --> 1:53:03.440 be a spectator watching this. If you have a particular 1:53:03.479 --> 1:53:07.000 passion or you have a particular insight, jump in, do 1:53:07.120 --> 1:53:09.920 something about it. And the great thing about what's happening 1:53:09.960 --> 1:53:11.920 now with the Rise to rest and goes back to 1:53:11.960 --> 1:53:14.800 what we said before, four hundred new venture firms in 1:53:14.840 --> 1:53:17.519 these rightsrous cities that didn't exist ten years ago. There 1:53:17.520 --> 1:53:21.200 are now existing backing companies in in you know, dozens 1:53:21.200 --> 1:53:23.760 and dozens and dozens and dozens of American cities that 1:53:23.880 --> 1:53:27.240 historically didn't have venture capital. You can now do that anywhere. 1:53:27.360 --> 1:53:30.680 You shouldn't feel like you're in Ohio or Wisconsin or 1:53:30.680 --> 1:53:34.479 Iowa or Tennessee or something. And so therefore you don't 1:53:34.520 --> 1:53:37.920 have the ability to participate in the start up sector, 1:53:38.000 --> 1:53:40.840 participate in the innovation economy. You're left out because you're 1:53:40.840 --> 1:53:43.920 not in Silicon Valley or some other players. No, you 1:53:44.240 --> 1:53:46.800 can be in the game. Uh, and you can do 1:53:46.840 --> 1:53:49.880 it now. Uh. You just have to get started, and 1:53:49.920 --> 1:53:52.160 you just have to say instead of just looking at 1:53:52.160 --> 1:53:54.280 the problem and wondering if somebody else is going to 1:53:54.360 --> 1:53:56.640 solve it, I'm gonna solve it. I'm going to do 1:53:56.720 --> 1:53:59.200 that by starting a company. I'm gonna do it now, 1:53:59.280 --> 1:54:02.160 and I'm gonna do it from wherever I am. Okay, 1:54:02.479 --> 1:54:05.720 just a couple more things then we'll go. Big point 1:54:05.760 --> 1:54:09.400 in the book is about immigration. The HB one visas. 1:54:09.479 --> 1:54:12.880 Certainly has been stories in the news about a lot 1:54:12.920 --> 1:54:14.880 of people foreign countries who would have stayed in the 1:54:14.960 --> 1:54:18.640 United States ended up going back greatly to India and 1:54:18.680 --> 1:54:21.519 starting the businesses there. Are we going to see a 1:54:21.640 --> 1:54:25.679 change in this what's going on? Yeah? We we we 1:54:25.680 --> 1:54:27.559 we must see it changes. I've been working on as 1:54:27.600 --> 1:54:31.200 sadly unsuccessfully for the last decade. Actually testified the Senate 1:54:31.200 --> 1:54:34.960 about nine years ago around immigration reform. And the reason 1:54:35.120 --> 1:54:38.040 is because the data is pretty clear that immigrants have 1:54:38.080 --> 1:54:41.480 played a central role in driving the American economy. About 1:54:41.960 --> 1:54:46.000 of the successful companies have been immigrants or children of immigrants, 1:54:46.000 --> 1:54:48.680 and part of what's made America so so, you know, 1:54:48.760 --> 1:54:51.400 so compelling as this pioneering spirit, this is being a 1:54:51.440 --> 1:54:53.520 magnet from talent all around the world wants to be 1:54:53.600 --> 1:54:55.920 part of the American story, wants to build the next 1:54:55.960 --> 1:54:58.000 chapter of the American story. But we have made it 1:54:58.040 --> 1:55:00.720 more difficult for people to come. We have made it 1:55:00.800 --> 1:55:03.600 more difficult for people who are here, perhaps at a university, 1:55:03.640 --> 1:55:06.560 to stay. And as a result, we were losing some 1:55:06.640 --> 1:55:09.879 of that that that talent ward to other other countries. 1:55:09.920 --> 1:55:11.760 And we need to we need to reverse it. It 1:55:11.800 --> 1:55:16.240 almost happened this past Sumber. Some legislation past Congress, any 1:55:16.240 --> 1:55:18.760 one bill called the Chips and Science Act, had some 1:55:18.800 --> 1:55:22.160 good things in and around you're reshoring some conductors and 1:55:23.000 --> 1:55:25.680 funding the development of war these regional hubs, you know, 1:55:25.880 --> 1:55:28.080 ties in with our rise of rest of work. But 1:55:28.200 --> 1:55:30.880 also there was a startup VISA provision that was at 1:55:30.920 --> 1:55:33.480 one point part of that when the final bill got done, 1:55:33.480 --> 1:55:36.400 it got kicked out, which is unfortunate. If if we 1:55:36.480 --> 1:55:39.440 fast forward, you know, a number of years in America 1:55:39.560 --> 1:55:42.640 ceases to be the leader of the pack, ceases to 1:55:42.680 --> 1:55:44.760 be the leading and common in the world, ceases to 1:55:44.800 --> 1:55:47.800 be the most innovative entreprene nation in the world. Uh, 1:55:47.800 --> 1:55:50.320 it's like very likely will be we got this wrong. 1:55:50.400 --> 1:55:54.280 We lost that that edge we had globally as this 1:55:54.440 --> 1:55:57.560 as this as magnet. So I'll continue to do whatever 1:55:57.600 --> 1:56:01.040 I can to try to, you know, support uh kind 1:56:01.080 --> 1:56:04.640 of reform around immigrations, so we can when this when 1:56:04.640 --> 1:56:07.360 this battle for particularly around some of the talent that 1:56:07.720 --> 1:56:10.200 you know likely could be the entrepreneurs of the future, 1:56:10.240 --> 1:56:13.200 building some of the companies of future and creating lots 1:56:13.200 --> 1:56:17.560 of jobs for for for Americans in the process. And 1:56:17.680 --> 1:56:21.320 we've covered a lot of the viewpoint of the entrepreneur 1:56:21.440 --> 1:56:23.840 that location is not that important now you can do 1:56:23.880 --> 1:56:29.720 it anywhere. But in conclusion, any other advice for entrepreneurs, Well, 1:56:29.720 --> 1:56:34.440 first of all, I recognize, uh that entrepreneurs are choosing 1:56:34.640 --> 1:56:37.360 a path that most people think as a risky path, 1:56:38.000 --> 1:56:42.920 and so it requires a certain boldness, a certain fearlessness 1:56:42.920 --> 1:56:45.640 to take that path. I think we should understand that 1:56:45.840 --> 1:56:50.160 and and respect that. We also should recognize that sometimes 1:56:50.280 --> 1:56:53.400 people who try things stumble the first time. You know, 1:56:53.520 --> 1:56:56.840 it is the first yet that doesn't work, uh, you know, 1:56:57.280 --> 1:56:59.720 but you kind of keep having to take shots. And 1:57:00.200 --> 1:57:02.400 Ruth was the home run king. He had more home 1:57:02.480 --> 1:57:04.920 runs anybody else. Guess what. He also was a strikeout king. 1:57:05.040 --> 1:57:07.360 He had more strikeouts than ab Els. If you're swinging 1:57:07.400 --> 1:57:09.879 for the fences, you're not gonna always get it. Sometimes 1:57:09.880 --> 1:57:12.360 you'll you'll end up with a strikeout. We also need 1:57:12.400 --> 1:57:15.520 to understand that. So if an entrepreneur try something and 1:57:15.560 --> 1:57:18.600 it doesn't work, that doesn't mean they're a failure. That 1:57:18.720 --> 1:57:22.280 just means that particular idea is a failure. So just 1:57:22.320 --> 1:57:25.680 getting more people to realize that the importance of it. Uh. 1:57:25.720 --> 1:57:27.520 And even though if you go back to what we 1:57:27.600 --> 1:57:31.080 were talking about just a bit ago, that America itself 1:57:31.680 --> 1:57:35.520 was a startup two fifty years ago, America was an idea. 1:57:36.120 --> 1:57:40.360 Most people around the world didn't think America would succeed, 1:57:40.520 --> 1:57:44.760 just as most people don't think startups will succeed. There's 1:57:44.760 --> 1:57:47.240 a lot of skepticism in the first couple of decades 1:57:47.320 --> 1:57:52.200 of that American story. Somehow we powered through, somehow we survived, 1:57:52.200 --> 1:57:54.800 and then we thrived and we went from this fledgling, 1:57:55.000 --> 1:57:58.160 you know, almost hit the wall startup nation to the 1:57:58.240 --> 1:58:00.280 leader of the free world. And so how do we 1:58:00.400 --> 1:58:05.040 keep leading? We can't do that unless we're leading around innovation. 1:58:05.160 --> 1:58:08.160 We're leaning in the future, we're trying new things, we're 1:58:08.200 --> 1:58:11.000 taking risk, and we need to celebrate that as a 1:58:11.040 --> 1:58:15.560 core part of the American story and celebrate the entrepreneurs 1:58:15.640 --> 1:58:18.320 out there. Perhaps I'm listening to this right now that 1:58:18.400 --> 1:58:20.520 are you know, taking that shot? Are the ones we're 1:58:20.600 --> 1:58:23.480 thinking about taking the shot? And maybe now is the 1:58:23.480 --> 1:58:25.880 time they'll step in into the game. So that again, 1:58:25.960 --> 1:58:28.960 that's my you know, my real passion here is making 1:58:28.960 --> 1:58:32.000 sure I can do what I can to make sure 1:58:32.040 --> 1:58:35.000 America continues to lead. America continues to be a magnet 1:58:35.040 --> 1:58:38.560 for talent, America continues to be this innovative, pioneering nation. 1:58:39.040 --> 1:58:41.080 But we do it in a more inclusive way that 1:58:41.160 --> 1:58:43.960 we do bring along more people, we do bring along 1:58:44.240 --> 1:58:47.320 more places, and we can inspire the next generation to 1:58:47.440 --> 1:58:50.640 start here, build here, scale here, create jobs here, drive 1:58:50.720 --> 1:58:54.040 economic growth here. So for those entrepreneurs out there, or 1:58:54.080 --> 1:58:58.160 those potential entrepreneurs out there. Thank you for taking the 1:58:58.280 --> 1:59:01.880 risk you're taking. Thank you for taking a shot. Keep 1:59:01.960 --> 1:59:05.600 fighting and hopefully ultimately you'll you'll be successful in that 1:59:05.640 --> 1:59:08.520 one and then strengthen your community, the community you care 1:59:08.560 --> 1:59:11.800 about by creating more jobs and opportunity in those communities, 1:59:11.840 --> 1:59:16.960 and collectively that can also strengthen our nation. Yeah, that's 1:59:17.040 --> 1:59:19.240 what I've been telling people for years now. There is 1:59:19.280 --> 1:59:23.360 no flyover country all in America. Obviously their pockets that 1:59:23.360 --> 1:59:27.000 don't have broadband, but essentially all of America has broadband. 1:59:27.480 --> 1:59:32.680 Everybody has hundreds of channels. Everybody is hip, everybody is informed. 1:59:32.720 --> 1:59:35.400 It's not like you're talking earlier. It takes a week 1:59:35.440 --> 1:59:39.040 to get the TV show in Hawaii. But I must 1:59:39.080 --> 1:59:42.240 admit your book really fleshes it out. It really talks 1:59:42.280 --> 1:59:46.160 about the different locations and what is happening, and it's 1:59:46.280 --> 1:59:51.000 eye opening, especially in an era where living costs may 1:59:51.000 --> 1:59:57.600 be much cheaper in between Boston, New York and Silicon Valley, California. 1:59:57.640 --> 2:00:00.080 In any event, Steve, I want to thank you so 2:00:00.160 --> 2:00:02.640 much for taking the time talking about your history and 2:00:02.720 --> 2:00:07.040 explaining your investment strategy across the country. So thanks again, 2:00:07.360 --> 2:00:10.600 Thanks Bob. Great to reconnect. Love your writings, love your podcast, 2:00:10.760 --> 2:00:14.400 keep it up. Thanks so much. Until next time, this 2:00:14.480 --> 2:00:15.560 is Bob less sex.