WEBVTT - Howard Lindzon on Business Ideas Before the Internet 0:00:02.040 --> 0:00:06.000 This is Master's in Business with Barry rid Hoolds on 0:00:06.240 --> 0:00:07.320 Bloomberg Radio. 0:00:08.320 --> 0:00:11.760 This week on the podcast, I have an extra extra 0:00:11.840 --> 0:00:15.760 special guest. My friend Howard Lindzen is a guest. This 0:00:15.800 --> 0:00:21.360 is a little off of our regular format only because 0:00:21.520 --> 0:00:25.480 Howard and I know each other for forever and less 0:00:25.520 --> 0:00:27.720 than a guest. Doing a Q and A is just 0:00:27.800 --> 0:00:31.400 kind of me goofing around with Howard and having a conversation. 0:00:33.600 --> 0:00:39.560 Howard has had, like, really this shockingly blessed career. He 0:00:39.640 --> 0:00:43.440 launches wall Strip in the early two thousands, and before 0:00:43.479 --> 0:00:45.240 you know it, he's in the middle of a bidding 0:00:45.280 --> 0:00:47.600 war with a bunch of different people The Street, dot Com, 0:00:47.600 --> 0:00:50.640 and CBS wanting to buy it. He rolls that cash 0:00:50.680 --> 0:00:57.800 into his next venture, which becomes a wildly successful angel fund, 0:00:58.720 --> 0:01:02.640 which now is in its fourth edition. He was a 0:01:02.800 --> 0:01:09.920 pre IPO investor in companies like Facebook and Twitter. Literally 0:01:10.000 --> 0:01:14.080 the first check in to Robin Hood, which went public 0:01:14.120 --> 0:01:17.400 in twenty twenty one at about a thirty four billion 0:01:17.480 --> 0:01:22.200 dollar valuation, So you can imagine that first check multiplied 0:01:22.600 --> 0:01:27.440 a little bit from twenty fourteen or so. I know 0:01:27.640 --> 0:01:35.080 him from Linzen Palooza, from his early media work, so 0:01:36.080 --> 0:01:39.960 strap yourself in for a fun conversation about what it's 0:01:40.200 --> 0:01:45.040 like to be at in the room where it's happening, 0:01:45.080 --> 0:01:48.680 to quote Hamilton, but to be at the intersection of 0:01:48.880 --> 0:01:54.880 media and finance and technology as the world is blowing up. 0:01:55.160 --> 0:01:58.640 I thought this conversation was fun and fascinating, and I 0:01:58.680 --> 0:02:02.400 think you will also with no further ado, my discussion 0:02:02.520 --> 0:02:08.640 with social leverages. Howard lindsay, Hello, Barry, So what do 0:02:08.639 --> 0:02:09.560 you think of these dicks? 0:02:09.639 --> 0:02:12.880 Pretty nice better than my you know, Canut is a 0:02:13.040 --> 0:02:17.480 like mcgver of sound. He's my producer, went to school 0:02:17.480 --> 0:02:20.400 together at a ISU and we have this room like this, 0:02:20.639 --> 0:02:22.800 no lights, everything's padded. It's all about sound. 0:02:22.960 --> 0:02:27.680 This is this is professional. First of all, everything at Bloomberg. 0:02:27.760 --> 0:02:30.400 The equipment is just like the best of the best. 0:02:30.440 --> 0:02:32.959 The people are great, they don't fool around. The only 0:02:33.000 --> 0:02:36.280 thing I'm waiting for in the studio is a robotic 0:02:36.360 --> 0:02:38.919 camera so we could do little video clips. But yeah, 0:02:38.960 --> 0:02:41.440 I think video but that's coming also all right, awesome 0:02:41.480 --> 0:02:44.240 if it's interesting and cool and cutting edge, these guys 0:02:44.280 --> 0:02:46.720 are right right on it. So let's talk a little 0:02:46.720 --> 0:02:50.520 bit about your background. I've known you for forever and 0:02:51.040 --> 0:02:53.520 over the course of most of that time, your work 0:02:53.600 --> 0:02:58.640 has really operated at the intersection of finance and media. 0:02:59.040 --> 0:03:01.560 How did those two ent combined? How did that come about? 0:03:02.120 --> 0:03:05.840 What they came about? Because the Internet did its thing. 0:03:06.560 --> 0:03:09.960 You know, I think they called Web two. That's when 0:03:10.240 --> 0:03:13.480 I'm very much not a technical person. 0:03:14.600 --> 0:03:16.680 The I grew up, I thought it was Web three. 0:03:17.160 --> 0:03:20.280 No, they called now, they called the now they call 0:03:20.320 --> 0:03:20.880 it web three. 0:03:22.160 --> 0:03:23.239 In the two thousands. 0:03:23.280 --> 0:03:25.959 Back in the two thousands, we were coming through that nasty. 0:03:26.440 --> 0:03:29.280 I wasn't involved in tech back then, but you know, 0:03:29.320 --> 0:03:33.200 by five, people thought, you know, we were in an 0:03:33.440 --> 0:03:37.320 everything was real estate. But in Lato five Earli oh six, 0:03:37.440 --> 0:03:42.000 YouTube came on the forefront and I saw YouTube, and 0:03:42.040 --> 0:03:45.200 I'm like, this is for whatever reason that was. There 0:03:45.280 --> 0:03:48.040 was many competitors or one hundred youtubes, but you know, 0:03:48.080 --> 0:03:51.160 the YouTube and its ilk. As soon as I saw YouTube, 0:03:51.320 --> 0:03:52.560 everything changed for me. 0:03:52.840 --> 0:03:53.600 Really Yeah. 0:03:54.080 --> 0:03:56.800 And you know before that, obviously the Apple Store of 0:03:56.880 --> 0:04:00.480 my first walking into an Apple store in seeing the 0:04:00.800 --> 0:04:03.600 iPod and being able to play with it inside the store, 0:04:03.600 --> 0:04:05.880 so I was like, oh, one oh two, But that 0:04:06.000 --> 0:04:10.120 was more hardware and music and not Internet related to me, 0:04:10.560 --> 0:04:14.160 you know, because I came from the financial background, so 0:04:14.240 --> 0:04:18.040 everything was DOS and Windows. So first year one to 0:04:18.040 --> 0:04:21.919 oh two, you have Apple and they blew out the 0:04:21.960 --> 0:04:24.040 store model, the retail model, which no one thought. 0:04:24.080 --> 0:04:26.599 And then you bother the headlines from that era about 0:04:26.600 --> 0:04:30.280 why the ice Apple store was destined to be such 0:04:30.279 --> 0:04:31.800 a failure or just hilarious. 0:04:31.880 --> 0:04:35.560 Well, because Gateway had failed, like everybody was doing it and. 0:04:35.600 --> 0:04:39.599 There was no differentiated between Dell, Gateway, HB. Apple was 0:04:39.640 --> 0:04:42.880 its own animal and they controlled their ecosystem. Very different 0:04:42.880 --> 0:04:44.960 creature then different creature. 0:04:45.200 --> 0:04:47.479 I didn't know what Apple was, even though you know, 0:04:47.520 --> 0:04:50.040 because you in the financial world you were on DOS 0:04:50.200 --> 0:04:50.880 or Windows. 0:04:51.000 --> 0:04:53.080 I was one of the few on a Mac and 0:04:53.400 --> 0:04:57.240 uh hard slogging. It was tough. Not everything was available. 0:04:57.680 --> 0:05:00.560 In fact, there was a period of time where it 0:05:00.600 --> 0:05:04.679 looked like Microsoft Office wasn't going to be made available. 0:05:04.720 --> 0:05:07.400 That would have been the death blow to Apple. The 0:05:07.560 --> 0:05:09.840 any trust case against Microsoft is the only thing that 0:05:09.920 --> 0:05:13.560 kept Apple a lot. They needed a quote unquote competitor, 0:05:13.720 --> 0:05:16.320 and now the two of them are the two Mac 0:05:16.400 --> 0:05:17.280 daddy's in the space. 0:05:17.400 --> 0:05:20.280 Yeah, I was living in Phoenix in an Apple store 0:05:20.279 --> 0:05:23.920 open up to build more and I stumbled it across 0:05:23.920 --> 0:05:27.080 the Street, never really an Apple user, and it just 0:05:27.080 --> 0:05:28.239 blew my mind the store. 0:05:28.360 --> 0:05:30.800 So that raises an interesting question. How does a kid 0:05:30.800 --> 0:05:35.800 from Arizona, from Phoenix get interested in venture investing not 0:05:36.000 --> 0:05:40.440 exactly known as a hotbed of early stage core companies. 0:05:40.800 --> 0:05:43.159 Well, I'd have to go further back. It's okay. You know, 0:05:43.160 --> 0:05:46.320 I grew up in Toronto, and I grew up born 0:05:46.320 --> 0:05:50.520 in sixty five and so in my formative years, you know, 0:05:50.520 --> 0:05:53.440 there was TV. There weren't really great video games, matel 0:05:53.520 --> 0:05:57.400 and television cal Eco. But you know, when I'm fifteen 0:05:57.480 --> 0:06:02.400 years old, Second City Television comedy was in the water. 0:06:02.800 --> 0:06:08.280 Like Chicago and Canada was a giant feeder into the US. 0:06:08.279 --> 0:06:10.120 Martin Shore. Go down the list of all the gree 0:06:10.240 --> 0:06:10.640 I grew. 0:06:10.600 --> 0:06:14.320 Up watching them live to stand up at Yack Yuck's. 0:06:14.920 --> 0:06:18.880 So there was Jim Carrey. There was a chain so 0:06:19.400 --> 0:06:22.159 much like you know you went to Stanford and got 0:06:22.200 --> 0:06:24.160 into face. You know, you went to work in tech 0:06:24.200 --> 0:06:27.080 in this generation in two thousand and I mean sorry, 0:06:27.080 --> 0:06:30.000 in nineteen eighty, I was fifteen years old. I'm sneaking 0:06:30.000 --> 0:06:34.880 into comedy clubs watching you know, Jim Carrey and Dave 0:06:34.960 --> 0:06:39.320 Thomas and you know, like everybody could show up on 0:06:39.360 --> 0:06:40.680 a night here in New York. I went to the 0:06:40.680 --> 0:06:45.240 eleven thirty show, a comedy, so just see nobody famous famous? 0:06:45.279 --> 0:06:47.080 Who was funny? I don't care who was famous? Who's 0:06:47.160 --> 0:06:47.320 you know? 0:06:47.400 --> 0:06:49.120 I don't even remember their name. There was only one 0:06:49.160 --> 0:06:51.720 out of six that I thought were funny. But you 0:06:51.720 --> 0:06:56.120 go at eleven thirty here, so hopefully that's but you 0:06:56.160 --> 0:06:58.120 hopefully go that late show to see maybe a Chris 0:06:58.240 --> 0:07:02.960 Rock or somebody shows up to actis So in nineteen. 0:07:02.600 --> 0:07:04.440 Eight, just put out a new show. So he's off 0:07:04.480 --> 0:07:05.360 the market for a while. 0:07:05.480 --> 0:07:09.000 Good point. So in nineteen eighty I would go to 0:07:09.040 --> 0:07:11.440 these clubs and that was who my idols were, and 0:07:11.520 --> 0:07:14.320 I was just you were. Second City was on television, 0:07:14.440 --> 0:07:17.000 so I had a comedy bug and you had Johnny Carson. 0:07:17.040 --> 0:07:19.120 Those were like the shows that a weird. 0:07:18.920 --> 0:07:21.280 Kid would How did that lead to woolstrip. 0:07:22.680 --> 0:07:25.080 Long and then you take a break. I moved to Arizona, 0:07:25.120 --> 0:07:30.200 go to Asu from Toronto. Yeah, from run Away from Home. 0:07:30.240 --> 0:07:32.920 Had it with this gold and snow. I'm going where 0:07:32.920 --> 0:07:35.040 the sunshines and I don't care about anything. 0:07:35.960 --> 0:07:41.600 Made that move. Loved Arizona Golf cycling obviously the weather. 0:07:42.320 --> 0:07:45.520 I go to ASU do my MBA and I graduate 0:07:46.440 --> 0:07:51.160 in nineteen the middle of the pretty bad recession, the 0:07:51.240 --> 0:07:55.880 SNL crisis. So I got my MBA eighties right, No, 0:07:55.920 --> 0:08:00.520 it's the SNL crisis, Charlie Keating, SNL boy and Golf 0:08:00.520 --> 0:08:04.720 of War breaks out right and pretty bad recession. Yeah. Yeah, 0:08:04.760 --> 0:08:09.680 So that's when I started in business and became a stockbroker. 0:08:10.400 --> 0:08:12.640 And I did not know that about you. You became 0:08:13.000 --> 0:08:13.920 who you were broken for. 0:08:14.200 --> 0:08:16.160 It was the prince. It was called the Principal, Eppler, 0:08:16.160 --> 0:08:19.120 Garon and Turner. So it was a little regional, you know, 0:08:19.160 --> 0:08:21.080 and they all got rolled up. I think eventually it's 0:08:21.360 --> 0:08:24.040 wreck Dane Rauscher, which is no royal bank, like it's 0:08:24.120 --> 0:08:27.680 you know, everything got rolled up. I got. I learned 0:08:27.760 --> 0:08:31.960 how to sell pat ryle with my first mentor you know, 0:08:32.200 --> 0:08:34.560 back then, you wore a suit, you went into work, 0:08:34.679 --> 0:08:36.640 You go to Nordstroms, you get a suit, smile and do, 0:08:36.960 --> 0:08:38.320 smile and die, you know. 0:08:39.000 --> 0:08:40.040 I worked with those guys. 0:08:40.160 --> 0:08:42.560 Yeah, and you just had there was no software, there 0:08:42.640 --> 0:08:44.600 was no uh you know, you. 0:08:44.760 --> 0:08:46.360 Just asked for a quot tron. They're like, what do 0:08:46.400 --> 0:08:48.400 you need a quote run for take up the phone. 0:08:48.600 --> 0:08:51.520 So that was my first real job. But I needed 0:08:51.520 --> 0:08:53.840 to do a job to just stay in the United States. 0:08:55.360 --> 0:08:58.000 And so even with my master's degrees, you know, back then, 0:08:58.120 --> 0:08:59.920 I needed to figure out how to stay in the US. 0:09:00.520 --> 0:09:03.800 So I became a stockbroker. Anyways, one of my cold 0:09:03.800 --> 0:09:07.400 calls became a home run. So you smiled and dowed. 0:09:08.160 --> 0:09:10.079 What do you mean one of your cold calls became 0:09:10.120 --> 0:09:14.200 a home run? So you know this by the way, 0:09:14.240 --> 0:09:15.880 I thought I knew your origin story. 0:09:15.960 --> 0:09:16.800 Now this is the real one. 0:09:16.880 --> 0:09:19.960 This is this is the Mandalorian. We're going pre Boba. 0:09:19.640 --> 0:09:22.400 Fett if it's okay, because you have to know, because 0:09:22.520 --> 0:09:24.960 it was really make your own luck. And everything's a 0:09:24.960 --> 0:09:29.440 cold call. So you know, I'm smiling dialand there's no 0:09:29.760 --> 0:09:33.240 internet to search wealth, and so you open the local 0:09:33.440 --> 0:09:36.640 business paper and there's this kid smiling holding a squeeze 0:09:36.720 --> 0:09:39.280 like a product called the Grip, and I figure he's 0:09:39.280 --> 0:09:41.320 got money, So I dial the guy. He goes, yeah, 0:09:41.360 --> 0:09:43.760 come on down, and I go on down. He pitches 0:09:43.800 --> 0:09:46.559 me right, So I'm you know, I got my MBA money. 0:09:46.600 --> 0:09:47.600 I want to do the next ground. 0:09:47.640 --> 0:09:50.439 He goes, I need twenty five grand to make payroll. Anyways, 0:09:50.480 --> 0:09:52.199 he had the stress balls. 0:09:52.120 --> 0:09:55.079 And you know, I love where the eyes pop that. 0:09:55.280 --> 0:09:58.400 No, no, no, it's just I'll get into like the details. 0:09:58.520 --> 0:10:01.720 But anyways, a beautifully con instructed stress ball called the Grip. 0:10:01.840 --> 0:10:05.000 It was four tension. It was four balloons tension wrapped 0:10:05.000 --> 0:10:06.520 around this Siberian millet. 0:10:06.600 --> 0:10:09.280 That's the technical, serious piece of hardware. 0:10:09.360 --> 0:10:13.240 Yeah, serious piece of squeeze ball. Anyways, I give him 0:10:13.240 --> 0:10:16.400 twenty five grand that I don't have, right, and I 0:10:16.440 --> 0:10:17.880 did being a stocktorker. 0:10:18.000 --> 0:10:20.480 Did you just commit to the money and then you 0:10:20.480 --> 0:10:21.320 had to go scramble? 0:10:21.360 --> 0:10:22.360 Oh I had to scramble. 0:10:22.480 --> 0:10:26.480 Okay, but you know, get into the details. We're going 0:10:26.520 --> 0:10:27.880 to find twenty five grand. 0:10:27.640 --> 0:10:30.480 From one of the last conversations I have with my dad. 0:10:30.840 --> 0:10:34.679 We never got along, but one of the last conversations 0:10:34.679 --> 0:10:37.160 I had my dad, I have an MBA. I cut 0:10:37.240 --> 0:10:41.400 this deal with Mark Scattered, who's a great founder and 0:10:41.760 --> 0:10:44.199 he's a very young guy as a fireman, who created 0:10:44.200 --> 0:10:46.600 this product. And I'm like, Dad, I found it. I 0:10:46.679 --> 0:10:49.120 need twenty five grand to get going. And my dad said, 0:10:49.120 --> 0:10:51.360 send me a business plan. I'm like, dude, I'm your son. 0:10:51.400 --> 0:10:52.480 I went to business school. 0:10:52.520 --> 0:10:55.240 He just wanted you to go through the exercise. 0:10:54.800 --> 0:10:59.080 And I didn't want it, so I scrambled my own 0:10:59.120 --> 0:10:59.800 money together. 0:11:00.200 --> 0:11:03.080 Yeah, and I like your dad's idea. You should have 0:11:03.080 --> 0:11:05.480 created a business plan just so you have it under 0:11:05.480 --> 0:11:06.600 your belt now. 0:11:10.000 --> 0:11:12.840 No, so obviously I did the business plan. I'm kidding 0:11:13.320 --> 0:11:15.920 and h but he didn't give me the money, so 0:11:15.920 --> 0:11:19.360 you could just go figure it out. And uh figured 0:11:19.400 --> 0:11:23.360 it out. Gave Mark the money. He went and paid 0:11:23.360 --> 0:11:25.640 off some bill, his MX bill, And now I'm the 0:11:25.840 --> 0:11:28.640 owner of a business that has no money again. Long 0:11:28.640 --> 0:11:30.800 story short, the product was a hit. The product is 0:11:30.800 --> 0:11:33.720 called the grip. I came in, We built out what 0:11:33.880 --> 0:11:36.880 was called this ad specialty business corporate logos, putting it 0:11:36.920 --> 0:11:40.000 on business. Long story short, the product got onto QVC 0:11:40.640 --> 0:11:43.040 and where you're in the QBC Hall of Fame, there 0:11:43.080 --> 0:11:43.680 is a QVC. 0:11:44.120 --> 0:11:45.160 How many units of this thing? 0:11:45.720 --> 0:11:46.600 Tens of millions. 0:11:47.120 --> 0:11:48.840 So just put some jingle in your pocket. 0:11:48.960 --> 0:11:51.440 Yeah, this was our first real hit pre internet. 0:11:51.600 --> 0:11:53.480 Did you ever sell that business? 0:11:54.040 --> 0:11:57.240 So the business still exists. Mark Scatted is a great entrepreneur. 0:11:57.360 --> 0:12:00.240 He's still a huge No. So I was never Lee 0:12:00.320 --> 0:12:02.839 and own. There was an escort and this is when 0:12:02.840 --> 0:12:05.240 you really This goes back to the Rodney Danshfield Back 0:12:05.280 --> 0:12:07.760 to School movie. It's like, get who's going to pay 0:12:07.760 --> 0:12:10.559 the team stairs? So we so I learned everything about 0:12:10.559 --> 0:12:14.280 business from this. We had incredible margins and software didn't 0:12:14.400 --> 0:12:18.320 basically exist back yet, and so you had a made 0:12:18.360 --> 0:12:21.920 locally made locally in Arizona. Wow. And we would sell 0:12:22.000 --> 0:12:24.120 tens of millions, and we were like the Dura Flame 0:12:24.679 --> 0:12:28.679 and everybody started copying us. But we had these incredible margins, 0:12:28.760 --> 0:12:31.120 and that's how I got involved in stocks, meaning we 0:12:31.120 --> 0:12:33.000 were making so much money you had to find a 0:12:33.000 --> 0:12:34.800 home for it. You had to find a home for it. 0:12:34.840 --> 0:12:37.080 And luckily there was a bull market. This was in 0:12:37.120 --> 0:12:39.040 the early nineties, so there. 0:12:39.040 --> 0:12:42.240 Was you still had almost a decade left before everything correct. 0:12:42.880 --> 0:12:45.480 So indirectly I became a hedge fund manager and manage 0:12:45.559 --> 0:12:47.800 our cash at the Squeeze Ball Company. 0:12:47.840 --> 0:12:50.600 At the Squeeze Ball Company, you're managing tens of millions 0:12:50.640 --> 0:12:52.679 of dollars because it's flowing in that way. 0:12:52.679 --> 0:12:55.120 Correct. So the Internet in ninety five or ninety six 0:12:55.160 --> 0:12:57.800 becomes I guess a thing, right, and I walked into 0:12:57.840 --> 0:13:00.280 Mark's office. I go Mark before then, but hold but 0:13:00.360 --> 0:13:02.440 I go mark, we got to own our domain, and 0:13:02.480 --> 0:13:07.000 so the grip was g ri ipp. So remember the 0:13:07.040 --> 0:13:10.480 first experience of the Internet was that when I tried 0:13:10.520 --> 0:13:13.440 to buy the domain, it was owned by a penis 0:13:13.520 --> 0:13:17.600 extension company called the Grip. They were squatting on the 0:13:17.640 --> 0:13:21.360 Grip's website. So here's what's fine. I didn't want to 0:13:21.400 --> 0:13:23.560 buy the domain. I'm not paying this guy for the domain. 0:13:23.679 --> 0:13:24.720 What was he asking for it? 0:13:24.760 --> 0:13:27.240 Do you remember? Honestly, I don't remember, but I was like, 0:13:27.360 --> 0:13:30.160 we'll just we'll just we'll put three p's. I don't 0:13:30.160 --> 0:13:33.600 know what my idea was. But anyways, so our product's 0:13:33.640 --> 0:13:38.319 on QVC. So we now don't have a domain name 0:13:38.520 --> 0:13:41.320 in QVC. We're like a home run product on KVC. 0:13:41.440 --> 0:13:45.200 Who's our customer Seventy year old women buying stress balls 0:13:45.240 --> 0:13:49.360 for you know, therapy, you know, squeezing, you know whatever. 0:13:49.400 --> 0:13:51.880 They were selling it as women were buying it good 0:13:51.920 --> 0:13:55.640 for and so QVC would call sin. We have hundreds 0:13:55.679 --> 0:13:57.640 of complaints from old women that are going to a 0:13:57.679 --> 0:14:01.640 website to buy your product. Again, and that's how I 0:14:01.720 --> 0:14:04.360 learned the Internet. Now that's a good origin story. So 0:14:04.400 --> 0:14:06.680 that is how I got into tech and knew what 0:14:06.720 --> 0:14:09.880 the Internet was, and then I didn't do the Internet 0:14:09.880 --> 0:14:12.319 again until two thousand and six. 0:14:12.720 --> 0:14:15.600 Wait wait, wait, wait, bro back before we're gonna not 0:14:15.679 --> 0:14:19.120 skip that deck. So you learned the lesson about a 0:14:19.160 --> 0:14:20.400 domain squad. 0:14:20.240 --> 0:14:22.240 Own your own domain, master of your door. 0:14:22.560 --> 0:14:25.000 But you did were you master of your own domain? 0:14:25.040 --> 0:14:26.560 Oh? You learned that early. You have to. 0:14:26.640 --> 0:14:29.960 But did you not stop and think, hey, there's some 0:14:30.000 --> 0:14:33.280 money to be made in gramming some domains. This guy 0:14:33.320 --> 0:14:37.280 did it to us. Let's now own taxi dot com. 0:14:37.440 --> 0:14:39.800 Or there was no Netscape browser. 0:14:39.920 --> 0:14:43.640 That's how early I remember the Netscape browser wasn't nine or. 0:14:44.040 --> 0:14:46.520 No, the IPO was ninety six, because I remember so 0:14:46.560 --> 0:14:48.920 then it was right on the cuff. I remember being 0:14:48.960 --> 0:14:51.200 on a trading desk and not being allowed to trade it. 0:14:51.400 --> 0:14:53.760 Rid Holt's you're a movie, don't don't touch that ipo? 0:14:54.040 --> 0:14:58.880 Correct? So so am my genius? Because again, I'm not 0:14:58.960 --> 0:15:01.440 an Internet 'm a car Many kid, and I'm like 0:15:01.960 --> 0:15:06.240 haphazard VC, not haphazard hedge fund. Like I'm a hap 0:15:06.280 --> 0:15:09.080 hazard VC. I mean, I didn't set out in life 0:15:09.120 --> 0:15:11.760 to be a hedge fund guy. Our business turned me 0:15:11.800 --> 0:15:13.880 into a hedge fund. I didn't set out to be 0:15:13.960 --> 0:15:16.680 a venture capitalist. I was an entrepreneur, but it pade 0:15:16.680 --> 0:15:20.040 me access. So sorry to go back to those ten years. 0:15:20.480 --> 0:15:24.400 I am now my big idea of the Internet, and 0:15:24.480 --> 0:15:26.640 a lot of people know the story in general because 0:15:26.640 --> 0:15:28.320 it happened to a lot of hedge funds or people. 0:15:28.560 --> 0:15:32.520 It's like Internet stupid. No one really is using it 0:15:32.600 --> 0:15:35.480 other than to, you know, to swear at people. It's 0:15:35.520 --> 0:15:37.320 kind of like pre Twitter. I don't nobody uses it 0:15:37.360 --> 0:15:40.800 except to like talk sex and check the weather. So 0:15:41.720 --> 0:15:43.880 you know, if anybody's going to use the Internet, the 0:15:43.880 --> 0:15:47.160 FedEx is going to benefit. So through that whole late boom, 0:15:47.520 --> 0:15:50.800 I was the guy like not owning Internet companies. 0:15:50.520 --> 0:15:52.280 But looking at logistics. 0:15:52.400 --> 0:15:55.000 Yeah, like thinking like and FedEx would go down every 0:15:55.080 --> 0:15:57.560 day for some reason. You know, I really got that 0:15:57.640 --> 0:15:59.440 first trade horrifically wrong. 0:15:59.560 --> 0:16:03.160 If you took that to its natural conclusion, then you're 0:16:03.200 --> 0:16:08.000 owning things in the nineties like Cisco and Juniper Systems 0:16:08.040 --> 0:16:11.960 and AMD and Global Crossing, which is, you know, the 0:16:12.000 --> 0:16:14.680 blocking and tackling of the Internet. But you had to 0:16:14.720 --> 0:16:17.240 have at least a little tech. 0:16:17.880 --> 0:16:19.720 I know. My problem is I grew up and try 0:16:19.760 --> 0:16:23.200 them conservative. I'm like very like fundamental, and I didn't 0:16:23.280 --> 0:16:26.040 understand the internet. Not conservative politically. 0:16:25.680 --> 0:16:28.200 No, no, no, I mean you don't strike me as 0:16:28.200 --> 0:16:33.040 somebody risk averse very really. Yeah, we'll talk more about 0:16:33.040 --> 0:16:36.720 that in a little bit. So the rest of the 0:16:36.840 --> 0:16:38.440 nineties you just sat on. 0:16:38.400 --> 0:16:42.120 Your hands, Yeah, sat on my hands, missed the Internet boom. 0:16:42.560 --> 0:16:44.080 Also didn't get killed. 0:16:43.920 --> 0:16:46.720 Right, So you come out of the crash. 0:16:46.360 --> 0:16:48.680 Just hating the market. I didn't understand the market. 0:16:49.040 --> 0:16:52.240 What's down eighty one percent between friends on the NASDAK, right, 0:16:52.240 --> 0:16:53.440 that's that's not a big deal. 0:16:53.480 --> 0:16:57.280 Didn't even know the Nasdaq basically, So what when. 0:16:57.120 --> 0:16:59.520 Did the idea for wall strip pop into your head? 0:16:59.800 --> 0:17:03.240 So now the one lucky investment that I made, and 0:17:03.280 --> 0:17:05.800 it was a dumb investment, much like you know the 0:17:05.840 --> 0:17:08.840 dumb investments people made in twenty one. So in nineteen 0:17:08.880 --> 0:17:12.640 ninety nine, Hu I invested in this. Some guy pitches 0:17:12.680 --> 0:17:16.160 me on a series Q or whatever they were doing 0:17:16.240 --> 0:17:18.800 right then of cars Direct, which was. 0:17:18.760 --> 0:17:20.840 Like I recall that cars Direct was like a. 0:17:20.760 --> 0:17:24.960 Hot late stage end of end of the bubble era 0:17:25.600 --> 0:17:28.000 where you could sell cars at a loss, but we'll 0:17:28.000 --> 0:17:30.919 do it in volume and a little bit. Yeah. Yeah, 0:17:30.960 --> 0:17:34.080 And so someone pitched me like the series Q and 0:17:34.160 --> 0:17:36.800 I was like in cash right, like I was missing 0:17:36.800 --> 0:17:39.160 the whole internet bubble. So I remember then, yeah, I'll 0:17:39.160 --> 0:17:40.800 put some money in this and that was the top. 0:17:40.880 --> 0:17:44.280 The minute my wire hit cars Direct now as an 0:17:44.280 --> 0:17:47.520 added bonus to invest in cars Direct. To induce me 0:17:47.560 --> 0:17:49.400 into car they were going to throw in this other 0:17:49.480 --> 0:17:51.639 internet company. You know sometimes you like go to the 0:17:51.640 --> 0:17:54.800 horse races and they give you like handicapped horses, like 0:17:54.840 --> 0:17:57.439 an extra for betting on one horse then. 0:17:57.600 --> 0:18:00.919 Probably won't finish the race, right, Well, they said, what 0:18:00.960 --> 0:18:01.719 did they throw in? 0:18:01.880 --> 0:18:04.720 They threw in this company, Viva dot Com. 0:18:05.119 --> 0:18:05.479 Viva. 0:18:05.600 --> 0:18:07.359 I didn't even look it up, so they said, listen, 0:18:07.359 --> 0:18:11.640 it is the two for one. Uh. Anyways, the bubble. 0:18:11.480 --> 0:18:13.000 Ends cause Direct goes. 0:18:13.800 --> 0:18:15.840 I think ten years later we sold for a few 0:18:15.880 --> 0:18:18.359 cents on the dollar or something bought it. But this 0:18:18.560 --> 0:18:21.480 Viva dot Com was run by Scott Ingram, who's a 0:18:21.480 --> 0:18:25.440 friend of mine. In an LP now and meet him 0:18:25.480 --> 0:18:28.760 at your events, probably one of our events. Anyway, Scott, 0:18:29.040 --> 0:18:33.320 Viva dot Com becomes rent which was uh means rent 0:18:33.720 --> 0:18:35.640 like it was just they couldn't they couldn't buy rent 0:18:35.640 --> 0:18:38.439 dot Com during that boom, right during the crash, he 0:18:38.480 --> 0:18:40.600 goes and buys the domain rent dot com and builds 0:18:40.640 --> 0:18:44.040 the largest, you know kind of rent marketplace, and eBay 0:18:44.080 --> 0:18:47.639 buys it for four hundred and fifty million dollars. And 0:18:47.760 --> 0:18:50.960 you were so my seed? I seed. That was my 0:18:51.080 --> 0:18:54.480 first seed win by mistake. 0:18:54.480 --> 0:18:57.520 Right and wish. There have been many seed wins. 0:18:57.240 --> 0:19:00.240 By so that was that gave me my first Internet win. 0:19:00.920 --> 0:19:04.200 Were you like a cap table owner or just a 0:19:04.320 --> 0:19:05.000 rounding air. 0:19:05.119 --> 0:19:07.480 A rounding air, But for me it was still real money. 0:19:08.200 --> 0:19:11.399 So I go and I became friends. I used to 0:19:11.440 --> 0:19:14.919 call Scott Ingram and go, how are you still alive? 0:19:15.040 --> 0:19:17.680 Like I was just like my one Internet investment, right, 0:19:17.880 --> 0:19:20.520 and he just thought I was humorous, like as a 0:19:20.680 --> 0:19:23.440 fifty k hundred k investor checking in on my investment 0:19:23.480 --> 0:19:25.000 and we would talk about the. 0:19:25.040 --> 0:19:28.280 Inillion dollar comedy. How's my ten grand doing? 0:19:28.440 --> 0:19:32.720 Yeah? So I was fascinated that a businessman could build 0:19:32.760 --> 0:19:35.840 businesses on the Internet. And so now flash forward to 0:19:36.240 --> 0:19:40.280 you know, my hedgehunk guy, I hate CNBC. I don't 0:19:40.280 --> 0:19:42.520 have money for a Bloomberg. You know, I'm just a 0:19:42.560 --> 0:19:45.000 retael Yahoo finance kind of guy. 0:19:45.200 --> 0:19:46.160 Righty, it's right? 0:19:46.480 --> 0:19:49.560 And e trade and in oh six, YouTube comes out, 0:19:49.760 --> 0:19:51.480 and I have this idea that I'm going to build 0:19:51.520 --> 0:19:54.160 going back to my comedy and going back to how 0:19:54.160 --> 0:19:55.920 I grew up and going I'm going to build CNBC 0:19:56.040 --> 0:19:57.720 on YouTube. That was it. 0:19:58.119 --> 0:20:02.360 That was my idea satirical take on financial television. No 0:20:02.800 --> 0:20:05.159 playing it straight, but I always thought there was a 0:20:05.200 --> 0:20:08.480 lot of tongue in cheek and everything you guys did correct, right, 0:20:08.600 --> 0:20:12.080 It wasn't straight up, it wasn't Second City, it wasn't 0:20:12.080 --> 0:20:15.000 supposed to be funny vin Yettes. You played it straight, 0:20:15.119 --> 0:20:18.240 but there was a subtext of, hey, this stuff's ridiculous. 0:20:18.280 --> 0:20:22.840 Correct the first show, meaning I I that's what hooked everybody, 0:20:22.920 --> 0:20:25.000 That's what hook but we never got beyond that before 0:20:25.000 --> 0:20:27.760 CBS spot up. But going back, I had this idea 0:20:28.080 --> 0:20:32.240 one show song. Yeah, I cold call Fred Wilson, who 0:20:32.320 --> 0:20:34.160 I didn't know at the Union. 0:20:33.960 --> 0:20:36.000 Square backs down here in New York. 0:20:36.720 --> 0:20:39.639 So I used to leave these whack job comments on 0:20:39.680 --> 0:20:41.840 his blog. He had this blog, and back in the day, 0:20:42.119 --> 0:20:43.720 blogs had blog rolls, you know that. 0:20:44.480 --> 0:20:48.560 Bloger had comments up until like nine. Finally I just 0:20:48.560 --> 0:20:49.000 show up. 0:20:49.080 --> 0:20:53.040 Fred was like Twitter. Everybody was there talking to Fred, 0:20:53.920 --> 0:20:56.439 and I would leave these whack job comments like what 0:20:56.920 --> 0:21:00.800 like fun, I can't believe you're giving Yeah, became the 0:21:01.640 --> 0:21:03.040 bouncer at Fred's site. 0:21:03.119 --> 0:21:04.720 You're the Motley fool then. 0:21:04.600 --> 0:21:06.960 Because I was the guy who didn't care about venture 0:21:07.080 --> 0:21:09.200 I was just there. I can't believe he's sharing all 0:21:09.200 --> 0:21:13.439 this wisdom about venture free for free. Anyways, I finally 0:21:13.480 --> 0:21:17.440 pitch him. I say, Fred, you're gonna be in Phoenix. 0:21:17.560 --> 0:21:19.200 He's never met me. I said, I'm gonna take you 0:21:19.240 --> 0:21:22.160 to a Sun's game. And this is like Internet two 0:21:22.160 --> 0:21:25.159 thousand and five. Fred was already I don't feel I 0:21:25.240 --> 0:21:25.760 was famous. 0:21:26.400 --> 0:21:27.200 He had already. 0:21:27.200 --> 0:21:29.840 He wasn't famous that he wasn't famous like he is today. 0:21:29.880 --> 0:21:34.720 Well, because post dot com implosion, nobody cared about career 0:21:34.840 --> 0:21:37.240 was the VC but they had been making money for 0:21:37.280 --> 0:21:37.680 a while. 0:21:37.800 --> 0:21:41.680 Correct. But he had done so many big deals in 0:21:41.720 --> 0:21:46.360 the first run, right, and the biggest one being I'm 0:21:46.400 --> 0:21:49.560 having a senior moment. But anyways, it'll come to me. 0:21:50.640 --> 0:21:52.600 I go, Fred, come to the Sun's game. You know, 0:21:52.640 --> 0:21:55.960 I'm trying to just become his friend, right, And he agrees, 0:21:56.200 --> 0:21:58.720 brings the Sun and we go to the Sun and Joanne, 0:21:58.720 --> 0:22:00.560 his wife, was like, Fred, you can't just go out 0:22:00.560 --> 0:22:02.800 with people on the internet. This is not that long, 0:22:03.920 --> 0:22:07.080 but Fred just we became friends. I pitched him on 0:22:07.119 --> 0:22:07.600 this idea. 0:22:07.640 --> 0:22:10.120 Nobody stalk someone for three years to murder them. 0:22:10.200 --> 0:22:14.160 They normally think about Brad and social media where we're 0:22:14.200 --> 0:22:14.720 at today. 0:22:15.000 --> 0:22:18.520 Yeah, think about how many people you know today from 0:22:18.520 --> 0:22:21.479 social media. You never would have known. It's been flipped 0:22:21.480 --> 0:22:21.960 on its head. 0:22:22.160 --> 0:22:26.359 Unbelievable. So he counts in. He kind of becomes my 0:22:26.520 --> 0:22:29.600 mentor in that, and I find out that he was 0:22:29.920 --> 0:22:32.160 Street dot COM's first I didn't even know this until 0:22:32.200 --> 0:22:35.040 after he invested, So luck would have it. Not only 0:22:35.040 --> 0:22:37.879 did he get my idea to create TMC on YouTube, 0:22:37.960 --> 0:22:40.280 he was there when Kramer was building the Street dot 0:22:40.280 --> 0:22:44.679 com and that was late nineties. Yeah, show Fred. 0:22:44.760 --> 0:22:47.040 By the way, I have said that the very first 0:22:47.119 --> 0:22:52.360 financial blog was Todd Harrison's trading diazing. That was a 0:22:52.440 --> 0:22:55.760 real time series of update embedded in the Street dot 0:22:55.800 --> 0:22:59.320 Com that you know, here's a guy who was Kramer 0:22:59.320 --> 0:23:02.919 burk Witz's trader. I mean a lot of the best 0:23:03.000 --> 0:23:07.320 trades that Kramer did as a hedge fund manager, you know, 0:23:07.520 --> 0:23:10.040 tapping out before everything went to hell in two thousand. 0:23:11.040 --> 0:23:13.720 I think that's Todd saying, listen, every risk measure we 0:23:13.800 --> 0:23:17.160 look at is terrible. I remember reading this, you gotta 0:23:17.200 --> 0:23:20.919 get out and he avoided the disaster. Full credit to 0:23:21.000 --> 0:23:24.000 Harrison on that, but real time, hey, we'll put legging 0:23:24.040 --> 0:23:26.879 into this position. He used to use the bull and 0:23:26.960 --> 0:23:31.439 Bear medical stor. I got one right exactly in all 0:23:31.440 --> 0:23:32.720 the comments, it was all live. 0:23:33.040 --> 0:23:36.480 It was Street dot Com to give credit. Was the 0:23:36.480 --> 0:23:38.000 place your blogs. Listen. 0:23:38.320 --> 0:23:43.199 I have my partner Josh Brown pulls the Street dot Com, 0:23:43.240 --> 0:23:47.080 the Motown of finance, Barry Gordy and everybody who came 0:23:47.119 --> 0:23:49.359 out of Motown. I could give you a list of 0:23:49.440 --> 0:23:52.359 one hundred people you know in finance today that trace 0:23:52.400 --> 0:23:55.760 their roots back to Street dot Com. Present company included. 0:23:55.560 --> 0:23:59.080 Yeah, and I was a customer. And I was a 0:23:59.200 --> 0:24:02.679 Kramer fan at the time because I came from the 0:24:02.760 --> 0:24:04.400 Street myself, right. 0:24:04.240 --> 0:24:06.439 And he was running a fund he was he was 0:24:06.640 --> 0:24:07.240 very active. 0:24:07.400 --> 0:24:10.120 It was like it was real. And so I find 0:24:10.160 --> 0:24:12.800 out Fred was his investor. It was like, wow, so 0:24:12.880 --> 0:24:16.520 I got the right investors. I raised six hundred grand 0:24:16.720 --> 0:24:20.119 for wall Strip, which is a lot of money, right, 0:24:20.359 --> 0:24:24.200 and and well, at then Web two hasn't wasn't really 0:24:24.240 --> 0:24:24.520 a thing. 0:24:24.560 --> 0:24:29.119 Two thousand and five. Yeah, I mean back then it 0:24:29.320 --> 0:24:32.359 was you know today everything is Amazon Cloud. It doesn't 0:24:32.359 --> 0:24:34.760 take a lot. Back then, you had to have servers, 0:24:34.760 --> 0:24:36.600 you had to have had people, you have like just 0:24:36.640 --> 0:24:37.840 building out the back. 0:24:37.760 --> 0:24:40.320 End was a massive and no revenue idea. Right, there 0:24:40.359 --> 0:24:44.000 was no infrastructure for revenue. Right, There's no ad networks 0:24:44.119 --> 0:24:47.800 and there was no so everything from So when we 0:24:47.800 --> 0:24:49.480 did an AD, we had to like make the ad, 0:24:49.560 --> 0:24:51.439 insert the ad ourselves. 0:24:50.880 --> 0:24:53.119 Like we were able to track it, be able to build it. 0:24:53.640 --> 0:24:56.680 So lucky as luck would haven't. The show was a hit, 0:24:57.160 --> 0:25:00.280 and by hit, I mean not like millions of views, 0:25:00.520 --> 0:25:03.480 because but in relative terms at that time, if you 0:25:03.520 --> 0:25:06.720 went to YouTube, it was cat videos and it was 0:25:06.800 --> 0:25:10.000 people filming their television and getting takedown notices of like 0:25:10.080 --> 0:25:12.439 dukes of hazard or whatever. So it was just a 0:25:12.480 --> 0:25:13.240 giant lawsuit. 0:25:13.280 --> 0:25:16.640 The woman you had as an anchor, ye, fantastic, Lindsay Campbell. 0:25:16.680 --> 0:25:20.280 Lindsay was awesome and she went on to go into television. 0:25:20.520 --> 0:25:25.840 When we sold, Lindsey got a part in the show 0:25:25.920 --> 0:25:30.520 that was The Errors Show, the Mob Show on HBO, 0:25:30.920 --> 0:25:34.960 The Sopranos. She was a teacher in a couple episodes. 0:25:34.560 --> 0:25:37.840 For early seventies. Your memory is really terrible. You should 0:25:37.840 --> 0:25:38.320 be a little bit. 0:25:38.400 --> 0:25:40.920 I can't log on the internet to just search IMDb 0:25:41.160 --> 0:25:45.440 basically IMDb. Are you on a screen or It's okay people, 0:25:45.840 --> 0:25:49.760 It's a thing that honestly happens that you just tip 0:25:49.760 --> 0:25:50.880 a your tongue all day long. 0:25:50.960 --> 0:25:53.600 So I have this to look forward to in ten years. 0:25:53.760 --> 0:25:56.119 You do. And by the way, I'm going to have 0:25:56.119 --> 0:25:58.000 to stand up for the last half of this because 0:25:58.160 --> 0:26:01.280 I feel like I have to pee. So so Lindsay Campbell, 0:26:01.280 --> 0:26:05.960 we found uh but what what a time? This was great. 0:26:06.240 --> 0:26:10.480 She was talk about all everything lined up perfectly at once. 0:26:10.560 --> 0:26:14.639 Yeah, and so we had this idea. This a funny story. 0:26:14.880 --> 0:26:19.480 So there Fred was a master. And Fred introduced me 0:26:19.840 --> 0:26:22.400 this is how the internet worked. Before the Internet, there 0:26:22.400 --> 0:26:25.159 was no iPhone yet, there was not even still was 0:26:25.200 --> 0:26:26.920 really coming into its own. 0:26:26.840 --> 0:26:28.600 Right, You're still a few years away. By the way, 0:26:28.640 --> 0:26:32.040 I have a vivid recollection of Lindsay and a cameraman 0:26:32.240 --> 0:26:35.639 with her holding a wired mic back to running around 0:26:35.680 --> 0:26:40.080 Lower Manhattan Midtown, asked throwing the mic on the streets? Step, Yeah, 0:26:40.119 --> 0:26:42.040 what do you think of this? And you know she's 0:26:42.280 --> 0:26:44.800 a pretty girl. People were like more than happy to 0:26:44.840 --> 0:26:47.640 talk to her. Guys in suits with today we would 0:26:47.680 --> 0:26:50.280 call them finance bros. But she would be on Wall Street. 0:26:50.320 --> 0:26:51.560 So what's going on with the markets? 0:26:51.920 --> 0:26:54.160 And the way we edited it was hysterical. 0:26:54.240 --> 0:26:54.840 That was a show. 0:26:55.359 --> 0:26:58.640 So so the idea was we're going to create CNBC 0:26:58.800 --> 0:27:02.520 on YouTube. Fred and handing me a list of eleven people, 0:27:02.640 --> 0:27:05.360 He said, Howard he didn't investor fin Yeah, he said, 0:27:05.359 --> 0:27:09.240 why do you call him? Pee? Pee peep? Roger Ehrenberg, Hey, Roger, Hey, Horod. 0:27:09.520 --> 0:27:13.480 I read your blog blah blah blah Fred Fred's investing. Uh, 0:27:13.520 --> 0:27:16.600 if you drop Fred's name, everybody wrote a check. So 0:27:16.640 --> 0:27:18.400 I go. Of course I didn't know this at the time, 0:27:18.440 --> 0:27:19.880 so I go. Fred said to give you a call. 0:27:19.920 --> 0:27:22.560 He goes, yeah, I'm in for twenty five. Hangs up, 0:27:22.359 --> 0:27:25.240 pee peep. Brad Felt, Hey, Brad. Fred Wilson said I 0:27:25.280 --> 0:27:29.359 should call it, sure, twenty five k peep. Anyways, I 0:27:29.440 --> 0:27:33.000 call Fred back like a day later, I go ten 0:27:33.080 --> 0:27:36.359 for eleven. Okay, who's the eleven. That's a funny story. 0:27:36.440 --> 0:27:39.480 So this guy Mark Pinkas who's gone on to start Zinga, 0:27:40.240 --> 0:27:44.160 and he was investor in Facebook and LinkedIn. He partners 0:27:44.200 --> 0:27:48.520 with Reid Hoffman. Fred is an investor in all his stuff. 0:27:49.440 --> 0:27:51.000 He was a name on the list. So I call, 0:27:51.080 --> 0:27:53.280 I call Mark Pinkas. I'm on a roll. I'm like 0:27:53.320 --> 0:27:57.720 god attitude. So I call Mark Pinkas picked up. He goes, Okay, hey, hey, 0:27:57.720 --> 0:28:00.119 it's Howard. Fred said to give me your number. I 0:28:00.240 --> 0:28:02.919 do the pitch. He goes, it's the dumbest idea over here. 0:28:03.920 --> 0:28:05.600 And he goes and then he goes like this and 0:28:05.680 --> 0:28:08.160 tell Fred not to give up my phone number anymore. 0:28:08.200 --> 0:28:12.520 He hangs up of it. So when I call Fred back, 0:28:14.160 --> 0:28:16.399 so I called for I don't know. That's a hard no. 0:28:16.880 --> 0:28:19.159 And anyways, if you know Mark, and I do, he's 0:28:19.200 --> 0:28:21.399 an LP. He's the friend as much as you can 0:28:21.440 --> 0:28:23.800 be a friend with Mark. He's super smart investor and 0:28:23.920 --> 0:28:26.440 started a thing. Guy I called Fred Becker. Guy, your 0:28:26.560 --> 0:28:29.240 your genius. I go, ten out of eleven people just 0:28:29.280 --> 0:28:32.280 wrote a check over a star Tek phone call pitch 0:28:32.480 --> 0:28:35.040 for an internet YouTube company. I go, I don't know 0:28:35.040 --> 0:28:37.920 what's going on here, And I said, but there's this 0:28:37.960 --> 0:28:41.120 one guy who not only thinks it's the dumbest idea, 0:28:41.600 --> 0:28:44.440 but told me not to give He said to you 0:28:44.520 --> 0:28:46.760 not to give out his phone number anymore for a laugh, 0:28:47.040 --> 0:28:48.400 just for me. He knew who was Yeah, he goes, 0:28:48.440 --> 0:28:52.040 oh that's Mark. Don't worry anyways, So told him back 0:28:52.160 --> 0:28:54.760 and he didn't say call him that. But this is 0:28:54.800 --> 0:28:57.280 a funny Mark story that I haven't told too often. 0:28:58.040 --> 0:29:02.120 Is about three months later we I never I didn't 0:29:02.160 --> 0:29:05.000 know what doc Listen. This was like a loosely the 0:29:05.080 --> 0:29:09.800 internet deals were not handshake deal like I'm a try 0:29:09.920 --> 0:29:12.760 like Fred like, this was like a two person operation. 0:29:13.280 --> 0:29:17.080 Read Sebashian Melbury's book on on the Power law and 0:29:17.160 --> 0:29:20.560 venture capital. Million dollar deals were literally done on a handshake. 0:29:20.640 --> 0:29:22.959 He'll come by Monday for a check. Well, the lawyers 0:29:23.000 --> 0:29:26.600 get the documents. It wasn't like a team of it weren't. 0:29:26.440 --> 0:29:32.000 Even standard docks. Everybody. Fred was the the He's the maestro. 0:29:32.240 --> 0:29:34.840 So I'll trust you know, I'm going to get to 0:29:34.880 --> 0:29:38.120 the docks. Anyways. It's tough, is moving very fast. YouTube's 0:29:38.120 --> 0:29:41.520 getting sued. We're distributing our video across one hundred of 0:29:41.520 --> 0:29:44.760 these YouTube channels. Anyways, three months goes in and I 0:29:44.760 --> 0:29:47.920 get a break. I get like New York Times, the 0:29:47.960 --> 0:29:50.880 Gray Lady is going to do a piece on wall strip. 0:29:51.240 --> 0:29:54.120 There were maybe getting six to ten thousand views an episode, 0:29:54.160 --> 0:29:57.800 which is not nothing, but it's nothing in today's world. 0:29:57.920 --> 0:30:00.840 In today's world. But then, oh yeah, who was getting 0:30:00.840 --> 0:30:01.959 ten thousand views in a day? 0:30:02.200 --> 0:30:04.040 Not just ten times? It was who was watching? Right, 0:30:04.360 --> 0:30:08.400 That's what I learned about the difference between audience and 0:30:08.440 --> 0:30:11.120 the right audience, right. And so Fred was We were 0:30:11.120 --> 0:30:13.280 all promoting. It was a very cute show, as you know, 0:30:14.200 --> 0:30:16.640 and I was writing in and starring in and producing 0:30:16.760 --> 0:30:18.320 it and I didn't know what I was doing, but 0:30:18.480 --> 0:30:21.400 it was the internet. Anyways. But three months go by 0:30:22.360 --> 0:30:27.240 and you know, we're doing the books. There's no revenue. 0:30:27.280 --> 0:30:29.880 The books are pretty easy to do quickly. Oh we 0:30:30.000 --> 0:30:31.080 burned thirty grand. 0:30:32.480 --> 0:30:34.880 That's called accounting. 0:30:36.200 --> 0:30:38.640 No money is coming in correct. I was wearing that 0:30:38.680 --> 0:30:41.000 hat at night. There was not much accounting to do 0:30:41.160 --> 0:30:43.560 except how many months we have left before we have 0:30:43.640 --> 0:30:47.640 to call Fred for more money. So anyways, ten you know, 0:30:47.720 --> 0:30:49.840 I'm doing the books and there's an extra so we 0:30:49.920 --> 0:30:51.760 get in the New York Times whatever, and now I'm 0:30:51.760 --> 0:30:55.760 like famous, and uh, there's an extra ten grand in 0:30:55.800 --> 0:30:59.800 our account and I'm like yelling at my team and yo, Lindsey. 0:31:00.200 --> 0:31:02.080 Did we do revenue that I don't know about it. 0:31:02.200 --> 0:31:04.480 Mark just dropped off a check and nobody. 0:31:05.360 --> 0:31:09.600 Anybody never told anybody. After he knew we were successful, 0:31:09.720 --> 0:31:13.360 sent him the tent. So I called Fred, I got 0:31:13.400 --> 0:31:16.640 this mother, you know, I called this guys like. 0:31:17.240 --> 0:31:20.520 He was the first, like at the higher valuation. 0:31:20.920 --> 0:31:23.600 Now I ended up we ended up selling the CBS 0:31:23.600 --> 0:31:26.239 long Story shirt a few months later, and he I 0:31:26.320 --> 0:31:29.840 returned multiples on that late money and we've been friends 0:31:29.880 --> 0:31:33.520 ever since. So he was like my newman at the time, 0:31:33.560 --> 0:31:37.400 you know, like in Seinfel, I'd see that Checkicoman thinkers. 0:31:37.600 --> 0:31:40.800 So so anyways, it was just that's what the Internet was. 0:31:40.880 --> 0:31:44.360 It was very cottagy, it was Web two. It was 0:31:44.680 --> 0:31:45.480 just coming out. 0:31:45.400 --> 0:31:48.200 Of such a mark of like the seventies and eighties 0:31:48.240 --> 0:31:51.200 that way you're telling me. Even in the two thousands, 0:31:51.480 --> 0:31:54.800 it was still shockingly rudimentary, rudimentary. 0:31:55.320 --> 0:31:57.720 There was no y combinator, there was no text, there 0:31:57.760 --> 0:32:02.320 was no way this y combinator. Probably seven eight that 0:32:02.520 --> 0:32:05.760 late all right, God, I think because I used to 0:32:05.800 --> 0:32:07.240 go to those events the don't want to be twenty 0:32:07.280 --> 0:32:08.120 thirty people there. 0:32:08.400 --> 0:32:12.680 I remember the nineties. If you were interested in venture capital, 0:32:13.360 --> 0:32:15.120 and you were on the East coast. The only way 0:32:15.160 --> 0:32:19.760 you could learn anything was like Fast Money or I'm sorry, 0:32:19.760 --> 0:32:24.320 a Fast company or Wired magazine, but there was really 0:32:24.360 --> 0:32:26.960 not a lot of media coverage of what was going 0:32:26.960 --> 0:32:27.720 on in the West coast. 0:32:28.840 --> 0:32:31.680 To his credits, she used to write a smart money magazine. 0:32:32.000 --> 0:32:34.600 I was a disciple, and then he started in an 0:32:34.600 --> 0:32:35.280 internet company. 0:32:35.320 --> 0:32:38.720 People don't realize he had an internet. If you're not 0:32:38.760 --> 0:32:40.480 a fan of Kramer today. 0:32:41.000 --> 0:32:43.280 Which I'm not, I'm not going to argue with. 0:32:43.280 --> 0:32:47.440 You, but you have to realize how influential and importance 0:32:47.560 --> 0:32:51.200 a player he was in the in the nineties, in 0:32:51.240 --> 0:32:56.680 the two thousands, he was really you know, between between 0:32:56.760 --> 0:33:00.280 running the hedge fund Kramer Berkoitz, between launching the Street 0:33:00.320 --> 0:33:03.720 dot com when nobody really thought, I know, let's do 0:33:03.800 --> 0:33:10.400 a real time finance site that's actually operated by people 0:33:10.480 --> 0:33:14.240 running real money, not just a bunch of ministers without portfolios, 0:33:14.280 --> 0:33:17.920 and all the time dropping in on TV doing his hits, 0:33:17.960 --> 0:33:20.280 like when he had his finger on the pulse when 0:33:20.280 --> 0:33:23.360 he was running money. He was the man for a 0:33:23.360 --> 0:33:27.120 long time. And now it's a different world, it's a 0:33:27.120 --> 0:33:31.600 different environment, and he's in a different role. But regardless 0:33:31.600 --> 0:33:33.320 of what you think of him today, you've got to 0:33:33.320 --> 0:33:35.320 give him props for what he did in the nineteen nineties. 0:33:35.520 --> 0:33:39.920 He looked away and Fred has great Kramer stories. Anyways, 0:33:39.960 --> 0:33:42.960 what made starts with a wall strip grate is, you know, 0:33:43.000 --> 0:33:44.880 we were doing five six thousand views and I had 0:33:44.920 --> 0:33:48.760 this idea to get Kramer's attention. We would spoof Kramer, right, 0:33:49.040 --> 0:33:52.200 I remember that great story. So I, so I go. 0:33:52.920 --> 0:33:55.320 I said, we can't spoof Kramer. You can't. You can't 0:33:55.360 --> 0:33:58.520 upset the guy. What we'll do is have our Kramer 0:33:58.840 --> 0:34:01.440 give cancer and medical advice. So he's going to have 0:34:01.480 --> 0:34:04.440 a show. He's going to be Kramer that people will 0:34:04.440 --> 0:34:05.800 call with medical question. 0:34:06.080 --> 0:34:06.680 Oh god. 0:34:06.840 --> 0:34:09.359 And so we got this method act. Lindsey found one 0:34:09.360 --> 0:34:11.600 of her friends who was a method actor who looked 0:34:11.640 --> 0:34:14.640 a lot like Kramer, and we said, listen, go into 0:34:14.640 --> 0:34:18.120 that room, listen to one hundred hours of Kramer, be 0:34:18.400 --> 0:34:21.640 Jim Kramer, and then we're going to create like a set, 0:34:21.840 --> 0:34:24.600 and you were going to give advice with people calling 0:34:24.640 --> 0:34:28.480 in for medical proms. Anyways, he was so mad Kramer. 0:34:28.600 --> 0:34:32.040 Oh no, he doesn't have a sense of humor like 0:34:33.440 --> 0:34:39.760 So Anyways, this leads to our acquisition. So Kramer wants 0:34:39.840 --> 0:34:41.719 to buy us to get us off the end. Oh 0:34:41.880 --> 0:34:44.479 really yeah yeah? So Street dot Com calls me after 0:34:44.520 --> 0:34:46.680 the show and goes, we'll buy you. I'm like, by me, 0:34:46.840 --> 0:34:48.479 I don't know. I was for set, like, I didn't 0:34:48.480 --> 0:34:50.759 know what I was doing. We had no revenue. I 0:34:50.800 --> 0:34:54.080 had ten grands showing up in the ether. We had 0:34:54.120 --> 0:34:57.440 nothing but expenses. Barry, it wasn't like the nineties where 0:34:57.480 --> 0:34:59.000 you had to build a business like my he was 0:34:59.000 --> 0:34:59.759 a little bit of green. 0:34:59.800 --> 0:35:04.160 Now this is like by so we'll do another parody. 0:35:04.360 --> 0:35:07.080 This is how I got into VC. So straight Tack says, 0:35:07.120 --> 0:35:09.440 we'll give you this amount of money and I say deal. 0:35:09.600 --> 0:35:12.000 Like I'm like, I'm like Kramer and Seinfeld. I'm like, 0:35:12.360 --> 0:35:15.360 just build hot coffee on me. Don't accept the first offer. 0:35:16.280 --> 0:35:19.440 I'm like, deal, Kramer, you got me. So I call 0:35:19.560 --> 0:35:21.960 Fred Wilson. I go, Fred, I go, you know, friend's 0:35:22.040 --> 0:35:23.839 my board. I go, Fred, what do I do? He goes, 0:35:23.880 --> 0:35:26.160 I didn't know you want to sell? You call them 0:35:26.200 --> 0:35:28.879 back and like he you know, Friend's like. 0:35:28.840 --> 0:35:30.839 He walked you through to Yeah, he says, I guess 0:35:30.840 --> 0:35:32.600 there's a competitive bidding. 0:35:32.280 --> 0:35:35.600 Correct Fred, Fred makes it makes a few calls like 0:35:35.680 --> 0:35:38.960 the next damn at CBS, and I have no idea. 0:35:38.960 --> 0:35:42.120 You got to understand, you know me, right, I'm literally 0:35:42.120 --> 0:35:47.080 a nobody, clueless, clueless, you know, obviously good instincts. I'm 0:35:47.080 --> 0:35:50.839 not going to completely terrorize myself, but good instincts, great 0:35:50.880 --> 0:35:54.799 people around me. Lesson number two, you've got to know 0:35:54.840 --> 0:35:57.600 your cap table. You've got to build trust. You've got 0:35:57.600 --> 0:36:00.040 to have great people around you. So I made the 0:36:00.160 --> 0:36:04.200 one call, Fred goes Howard, you want to sell, gotta 0:36:04.239 --> 0:36:06.160 have it. If you didn't know you wanted to sell, 0:36:06.239 --> 0:36:09.080 let's get blah blah blah. Actually know, I'm in CBS's 0:36:09.120 --> 0:36:13.480 office at black Rock. This table is big as Bloomberg headquarters. 0:36:13.480 --> 0:36:17.360 And you got Quincy Smith, who is a great guy. Uh, 0:36:17.640 --> 0:36:20.359 he's running CBS Interactive. And Mike Markus is a dear 0:36:20.400 --> 0:36:20.879 friend of mine. 0:36:20.960 --> 0:36:24.200 Today when wasn't marked, they had already acquired market Watch 0:36:24.239 --> 0:36:24.960 by then, right. 0:36:24.920 --> 0:36:28.280 Yeah, a long time earlier. Yeah, Bill Bishop and those guys, 0:36:28.440 --> 0:36:32.879 great guy Newby, And they go, hey, here, you want 0:36:32.920 --> 0:36:35.120 to sell. And I don't even know how to prepare 0:36:35.160 --> 0:36:38.760 for this, man, I go maybe, and they go, what's 0:36:39.120 --> 0:36:43.640 Street dot COM's number? And like I literally was no, 0:36:44.040 --> 0:36:48.000 I made up a number. Yeah, and they go, we'll 0:36:48.040 --> 0:36:51.759 double it, and I go, deal again. Agad, I've hit 0:36:51.800 --> 0:36:55.920 the table. I'm like nobody in the room with me 0:36:56.000 --> 0:36:58.040 to like stop me. And then I go, but you 0:36:58.080 --> 0:37:00.319 know what. The one thing I said, you know what, 0:37:00.600 --> 0:37:03.880 let me call my board and I remember quinc. They go, 0:37:04.120 --> 0:37:06.760 we'll wait. I'm like, I thought i'd have twenty four hours. 0:37:07.160 --> 0:37:10.080 We'll wait here, and I'm like, so I trample out 0:37:10.120 --> 0:37:13.719 of the boardroom. I call Fred on my starteker. You go, 0:37:13.880 --> 0:37:18.279 Frett CBS offered me Doublewstreet dot Com. He goes, well, 0:37:18.320 --> 0:37:20.359 do you want to do the deal? And I said, dude, 0:37:20.440 --> 0:37:22.640 I mean it's a lot of mon It's been six months, 0:37:24.440 --> 0:37:26.680 I said, I think I do. We have no revenue. 0:37:26.960 --> 0:37:28.359 I mean, I don't see how we're going to make 0:37:28.400 --> 0:37:30.719 this work. Yeah, I'm like, it's a rescue plan before 0:37:30.719 --> 0:37:31.439 we run out of month. 0:37:31.560 --> 0:37:32.040 Correct. 0:37:32.400 --> 0:37:36.080 This was, and and they have the infrastructure to monetize 0:37:36.080 --> 0:37:36.840 it if they want. 0:37:36.680 --> 0:37:38.200 To do that. I for a minute think I'm going 0:37:38.239 --> 0:37:41.719 to be famous. My and my old think me coming 0:37:41.719 --> 0:37:43.560 out of the room, I'm going to be on Letterman. 0:37:44.160 --> 0:37:44.920 I'm going to. 0:37:44.920 --> 0:37:49.160 Have a show, right, Women on the crappy little website 0:37:49.280 --> 0:37:50.120 for a. 0:37:50.080 --> 0:37:54.839 Barely I was now an executive at CBS. Right. Yeah. 0:37:55.160 --> 0:37:57.000 It was like if there was a balloon coming out 0:37:57.000 --> 0:38:00.879 of my head. I'm like, just bring me green eminem stat. 0:38:02.760 --> 0:38:06.399 So you want the green M and ms out of Yeah, And. 0:38:06.640 --> 0:38:08.840 So I call, I said, Fred, goes, walk back in 0:38:08.920 --> 0:38:12.000 there and you tell them that you won't shop the 0:38:12.040 --> 0:38:13.520 deal if they add another. 0:38:13.480 --> 0:38:17.000 Too too right, And I said. 0:38:16.760 --> 0:38:18.920 Can I do that, fredday? Because you hang up and 0:38:18.960 --> 0:38:23.880 you walk back and I go, okay, and I'm wearing 0:38:23.920 --> 0:38:27.120 like my crocs, I think, and sunglasses. I'm not prepared 0:38:27.120 --> 0:38:29.440 for this meeting. And I walked back in and I said, listen, 0:38:29.480 --> 0:38:32.160 I talked to my board and you know, for an 0:38:32.200 --> 0:38:34.240 extra two I won't shop it. And they go deal 0:38:34.480 --> 0:38:36.719 and I go, hang on, they go get the out 0:38:36.719 --> 0:38:40.120 of our offer. So that was how my deal with 0:38:40.320 --> 0:38:44.479 CBS st Oh my god, that's hilarious. And literally half 0:38:44.520 --> 0:38:47.520 my investors had not finished signing their paperwork when we 0:38:47.560 --> 0:38:53.160 returned the money, so it was just had an MBA. 0:38:53.200 --> 0:38:55.439 I was supposed to know what I was doing. I'd 0:38:55.440 --> 0:38:58.160 like to tell people, you know, people look up to me, 0:38:58.560 --> 0:39:00.440 you know, but i'd like to give the on story 0:39:00.560 --> 0:39:04.840 is what made that successful, right idea right time. I 0:39:04.880 --> 0:39:07.640 had no ego about the exit that I was building 0:39:07.719 --> 0:39:11.560 something better than anybody else. I had incredible people around me, 0:39:12.360 --> 0:39:17.440 lindsay running the show over exceeded anything that you could expect. 0:39:17.480 --> 0:39:19.759 I found these people on Craigslist, right, they were just 0:39:20.560 --> 0:39:24.880 and it was a miracle craigs on the internet, on 0:39:24.920 --> 0:39:27.719 the Internet. So I don't know, it was just one 0:39:27.800 --> 0:39:32.719 of the greatest stressful, fun interesting times in my life. 0:39:32.760 --> 0:39:34.719 And I met great people and that's kind of what 0:39:34.800 --> 0:39:37.600 got me started a point. We're out of time. Let 0:39:37.640 --> 0:39:38.600 you know now, how. 0:39:38.520 --> 0:39:40.920 I asked one question, thanks for coming. That's all the 0:39:40.960 --> 0:39:44.319 time we have the sale of woolstrip. The next step 0:39:44.360 --> 0:39:46.799 from there was that social leverage. Tell us a little 0:39:46.840 --> 0:39:47.319 bit about that. 0:39:47.640 --> 0:39:51.960 So so wallstrip. I'm working at CBS, and uh I 0:39:52.000 --> 0:39:54.920 pitched them this idea, what like my best idea I've 0:39:54.960 --> 0:39:57.319 ever had. So you know, there was this moment where 0:39:57.360 --> 0:40:01.040 I said I was going to be famous and CBS goes, Okay, Quench, 0:40:01.120 --> 0:40:03.319 she goes go meet the TV people. They're gonna love you. 0:40:03.560 --> 0:40:05.799 They did not want to meet me. So I have 0:40:05.920 --> 0:40:08.799 this idea for a show for them because they asked 0:40:08.800 --> 0:40:11.160 me to pitch them a show. I thought they bought 0:40:11.200 --> 0:40:14.000 my shot. I thought they owned me. So I stay 0:40:14.040 --> 0:40:16.920 up for three days. I'm writing furiously a show idea. 0:40:17.600 --> 0:40:20.880 And my show idea is very simple. It's like after Dark, 0:40:21.320 --> 0:40:23.560 where ever a guest comes on Letterman or their after 0:40:23.640 --> 0:40:26.280 show that that guess when I come over to this studio, 0:40:26.400 --> 0:40:28.600 the creepy studio, and there'd be a comedian and they 0:40:28.640 --> 0:40:31.239 would just talk about what's in their wallet? You know, 0:40:31.280 --> 0:40:35.160 the celebrity would talk about money. Yeah, oh okay, there 0:40:35.160 --> 0:40:37.160 would just be a show about money. Hey, show me 0:40:37.160 --> 0:40:39.040 a wallet. What credit card do you use? Have you 0:40:39.040 --> 0:40:41.680 ever been screwed by your financial manager? You know what 0:40:41.719 --> 0:40:42.960 I mean? If you got to go to Vegas and 0:40:43.000 --> 0:40:45.279 need ten grand, how do you do it right? It'd 0:40:45.320 --> 0:40:49.160 be an interesting look to how famous people spend. 0:40:49.280 --> 0:40:51.040 If you get in to eat hot wings at the 0:40:51.040 --> 0:40:52.960 same time, that's a show. 0:40:53.200 --> 0:40:57.640 That's a show. So they threw me out of the building. Yeah, 0:40:58.360 --> 0:41:00.880 and that was my end. I was so by that day. 0:41:01.000 --> 0:41:03.920 That was hard. I was Clarence Beaks from that print, 0:41:04.080 --> 0:41:08.279 Who's Clarence Beaks? I was collecting a paycheck and no 0:41:08.480 --> 0:41:11.799 job and Twitter. You know, in the background Twitter now 0:41:11.880 --> 0:41:15.600 starts and I saw Twitter and I said, this is Bloomberg. 0:41:16.200 --> 0:41:18.839 My first call was to Fred Wilson with Twitter. We 0:41:18.840 --> 0:41:20.560 were all making fun of Twitter back in the day 0:41:20.600 --> 0:41:23.960 before iPhone, you were everybody was. I was using it 0:41:24.440 --> 0:41:27.359 and I was telling people where I went to the bathroom. Hey, 0:41:27.400 --> 0:41:30.240 I took a pe at this restaurant. And the vcs 0:41:30.280 --> 0:41:32.719 thought I was funny because it was really vcs on 0:41:32.760 --> 0:41:33.960 Twitter at that time too. 0:41:34.040 --> 0:41:35.800 It was journalists and venture capitalists. 0:41:36.360 --> 0:41:39.280 So I went to friend, I said, Fred, this is Bloomberg. 0:41:39.600 --> 0:41:42.520 If I if the president ever, this is like a 0:41:42.560 --> 0:41:47.000 blog poster. When the president tweets about the economy, the 0:41:47.040 --> 0:41:50.160 market will move. And Fred goes, that's very clever. You 0:41:50.160 --> 0:41:53.160 should start a company. I go, Fred, I'm working for CBS. 0:41:53.880 --> 0:41:55.920 And that's where stock twits came out. I went to 0:41:56.040 --> 0:41:58.040 Jack and Ev at the time and I said. 0:41:57.840 --> 0:41:59.840 So, now at this time, Twitter's pretty small, and you. 0:42:00.000 --> 0:42:02.799 Walking Twitter is very small. Yeah, what is. 0:42:02.760 --> 0:42:05.760 There fifty million people on Twitter? No, not that any 0:42:06.080 --> 0:42:08.320 uh ten million people. 0:42:08.080 --> 0:42:11.719 Brew to invested. I passed on that investment call. 0:42:12.200 --> 0:42:14.560 Yeah, it was a you know, you could have sold 0:42:14.560 --> 0:42:16.800 it to some idiot for forty four billion dollars. 0:42:16.840 --> 0:42:19.480 This show is not Howard's a genius. It's called Masters 0:42:19.480 --> 0:42:22.160 and dismals. You have to have losses to become a master. 0:42:22.400 --> 0:42:23.040 So true. 0:42:23.360 --> 0:42:25.759 So I that is very true, young grasshopper. 0:42:26.120 --> 0:42:29.839 So I go to Jack and Av and I said, 0:42:29.960 --> 0:42:32.000 Twitter dot find this is my pitch to them. I 0:42:32.040 --> 0:42:35.680 go Twitter dot finance dot com. I said, people will 0:42:35.680 --> 0:42:38.520 talk about stocks on here, and they were like, Kumbaya, 0:42:38.840 --> 0:42:41.520 what about green peas and all that stuff? 0:42:41.560 --> 0:42:44.400 That's just that's screenpiece Twitter. This is finance Twitter. 0:42:44.160 --> 0:42:47.279 And finance Twitter, the original fin Twitter idea. And they 0:42:47.280 --> 0:42:48.920 were like, you should just you know, we have an 0:42:48.920 --> 0:42:51.920 open API, which is a trap plug in. Yeah, plug in, 0:42:52.160 --> 0:42:56.719 So build your entire company on our continuing goodwill and 0:42:56.800 --> 0:43:00.560 whim correct. So this was not smart I made. It's smart. 0:43:00.680 --> 0:43:02.480 You know, it depends how you look at it. You know, 0:43:02.600 --> 0:43:04.880 some days I love the idea, some days I'm like wow. 0:43:05.560 --> 0:43:08.719 But I went back and I said, listen, I got 0:43:08.760 --> 0:43:11.800 two choices. I can either just give it away for free, 0:43:11.840 --> 0:43:14.000 which you know, I started the cash tag dollars something 0:43:14.680 --> 0:43:18.319 AAPL dollars on r I m M. Because my idea was, 0:43:18.400 --> 0:43:21.920 how do you separate people talking about green apples, from 0:43:21.960 --> 0:43:23.880 people saying they love the Apple store. 0:43:24.000 --> 0:43:26.279 The stock symbol, yeah, like a hashtag only a. 0:43:26.320 --> 0:43:29.919 Dollar because people already and finance spoke the language of tickers. Yep. 0:43:30.120 --> 0:43:34.000 It was a clever hack, uh, And I created it 0:43:34.080 --> 0:43:36.600 with the team and we just started tweeting with dollar 0:43:36.680 --> 0:43:37.719 signs and it caught on. 0:43:38.040 --> 0:43:38.160 Right. 0:43:38.800 --> 0:43:41.080 So now I had a decision to make because people, 0:43:41.440 --> 0:43:44.080 because I told my last company, all the vcs were like, Howard, 0:43:44.080 --> 0:43:45.440 what are you doing? What are you working on? 0:43:45.560 --> 0:43:45.680 Right? 0:43:46.080 --> 0:43:48.840 And I'm the idiot that just said well this and 0:43:48.880 --> 0:43:50.600 people and I said, but I don't know, like how 0:43:50.640 --> 0:43:52.200 am I going to make money? You know? 0:43:52.400 --> 0:43:53.160 I don't really get that. 0:43:54.160 --> 0:43:56.960 Yeah, so I felt trapped to the very things we 0:43:57.000 --> 0:44:00.120 make fun of other people for is like and just 0:44:00.200 --> 0:44:02.359 goes to today's lessons. You know, just because you have 0:44:02.600 --> 0:44:08.280 an idea doesn't mean it should be venture backed. So kids, today, 0:44:08.440 --> 0:44:11.520 that's a lesson for you. Not everything needs venture capital. 0:44:11.560 --> 0:44:14.640 But at that time it was nirvana, right because there 0:44:14.760 --> 0:44:20.400 was just organic growth very important. Lesson organic growth is 0:44:20.480 --> 0:44:25.239 growth other kind of growth, not so growthy growth, organic. 0:44:25.320 --> 0:44:27.200 As opposed to well it. 0:44:28.719 --> 0:44:34.160 GBT, that's organic growth. The world loves organic growth because 0:44:34.200 --> 0:44:37.560 it's a mystery, it's a miracle. Well, two thousand and 0:44:37.600 --> 0:44:42.000 six was a miracle. You have Twitter, LinkedIn, Facebook, aws, 0:44:42.200 --> 0:44:44.640 the coming of the iPhone, the app store, you know 0:44:44.719 --> 0:44:46.480 what I mean, this was all to come. 0:44:46.680 --> 0:44:50.000 Well, we were still the crashes. Is far enough in 0:44:50.040 --> 0:44:54.640 our recent history five six years earlier that some of 0:44:54.640 --> 0:44:57.759 the wounds are starting to heal. People are starting, the 0:44:57.840 --> 0:45:01.799 market is up off the low's pretty essentially before the 0:45:02.000 --> 0:45:05.880 eight o nine prices market, So people are starting to 0:45:05.880 --> 0:45:08.080 look around and saying, hey, what's going on out here. 0:45:08.120 --> 0:45:11.120 But it was organic growth. You didn't have to force 0:45:11.160 --> 0:45:14.319 somebody like a crypto walle to force feed it down 0:45:14.360 --> 0:45:17.080 their throat. This is the future. It was just happening. 0:45:17.920 --> 0:45:21.439 Plus, you had all of the late nineties infrastructure built out, 0:45:21.920 --> 0:45:25.040 the miles of fiber optic cable and all of the 0:45:25.120 --> 0:45:30.520 various hardware upgrades. Was just waiting for something to be 0:45:30.600 --> 0:45:33.319 built on top of it. Web two oh as you 0:45:33.400 --> 0:45:35.760 called it. And these were all those companies that were 0:45:35.840 --> 0:45:39.040 taking advantage of cheap postcrash prices. 0:45:39.120 --> 0:45:40.719 Yeah. So the smartest thing I ever did in this 0:45:40.760 --> 0:45:43.319 where social ever start is I took everything I made 0:45:43.840 --> 0:45:47.399 and just redistributed it to everybody I saw doing a. 0:45:47.400 --> 0:45:50.160 Startup around just every company shing. 0:45:49.960 --> 0:45:53.120 That I saw. I wrote a twenty five. I ran 0:45:53.160 --> 0:45:56.600 out of money quickly, but I layered the world with 0:45:56.680 --> 0:45:57.399 my twenty five. 0:45:57.480 --> 0:45:59.640 Give us some names that we might be familiar with. 0:46:00.400 --> 0:46:06.360 The most famous is golf now, LifeLock, Buddy Media, to Mogul, 0:46:07.080 --> 0:46:15.759 ticket Fly, tweet Deck, Bitly, Surmise, Beta Work, the uber Yeah, 0:46:16.200 --> 0:46:19.360 so okay, so angel List. I was an investor in 0:46:19.800 --> 0:46:24.120 So all these things came from me just being in 0:46:24.160 --> 0:46:27.759 the mix and knowing Fred and reading blogs and just 0:46:27.800 --> 0:46:32.080 being part of the community. And I was at the 0:46:32.200 --> 0:46:34.600 right place. Intimes, this doesn't happen very often. I think 0:46:34.640 --> 0:46:37.440 the AI some AI machine experts now are going to 0:46:37.440 --> 0:46:40.520 be in this place. But we that was organic growth. 0:46:41.280 --> 0:46:44.960 That was the first real Internet. The Internet of ninety 0:46:45.040 --> 0:46:49.319 nine was infrastructure and promise. The Internet of five and 0:46:49.560 --> 0:46:53.360 six was the user's mass user onboarding. So you have 0:46:53.600 --> 0:46:56.719 you know, as well as I've done, I was supposed 0:46:56.760 --> 0:47:01.360 to do well if you were alive and writing checks 0:47:01.800 --> 0:47:04.360 in two thousand and six to twenty eleven. Hard not 0:47:04.440 --> 0:47:07.560 to make money, correct, So so remember that as a 0:47:07.600 --> 0:47:10.960 master's in business lesson being in the right place at 0:47:10.960 --> 0:47:13.680 the right time with the checkbook matters. 0:47:13.440 --> 0:47:17.759 So that alignment doesn't come along very often. How do 0:47:17.800 --> 0:47:21.360 you recognize, like at the time and you just spreading 0:47:21.360 --> 0:47:24.400 the manure, hoping all the plants grow, are you thinking, wow, 0:47:24.440 --> 0:47:26.480 this is a target rich environment and I got to 0:47:26.520 --> 0:47:27.600 have a little bit in everything. 0:47:27.840 --> 0:47:29.600 It's a good question because I didn't have that much 0:47:29.600 --> 0:47:32.560 money the idea, and you run on a money fast 0:47:32.560 --> 0:47:33.520 even when you're reading. 0:47:35.239 --> 0:47:39.120 Yah, fifty checks and you're you know, that's. 0:47:38.120 --> 0:47:40.800 Fifty checks in quickly. You know, I was flying Israel, 0:47:40.800 --> 0:47:43.719 I did e Toro, and I'm and I'm also running 0:47:43.760 --> 0:47:46.600 stock twits, which is also an extra benefit because everybody's 0:47:46.640 --> 0:47:49.319 pitching me ideas, you're right in the middle. It leads 0:47:49.360 --> 0:47:51.760 to the Robin Hood story later. But so everybody's pitching 0:47:51.760 --> 0:47:54.879 the ideas. I'm running a company, I'm writing twenty five 0:47:55.000 --> 0:47:58.359 k checks, I'm talking to everybody that matters, and there's 0:47:58.520 --> 0:48:02.960 organic growth. No one was faking it. It was just ballooning. 0:48:03.200 --> 0:48:07.400 Whatever you did had traffic, not fake. It may not 0:48:07.440 --> 0:48:09.880 be leverlasting, but it was real. 0:48:10.160 --> 0:48:14.360 So the name social leverage obviously comes from the people 0:48:14.440 --> 0:48:16.839 that you met on the first round that you began 0:48:16.920 --> 0:48:21.240 to socialize with. Suddenly everybody's in everybody else's deals, everybody 0:48:21.280 --> 0:48:24.120 else is seeing what's going on, so happens. 0:48:24.160 --> 0:48:27.080 And also, most importantly, the end of financial leverage. So 0:48:27.120 --> 0:48:29.600 there's a play on words going back to my comedy 0:48:29.680 --> 0:48:32.960 is like, we are coming out of this era where 0:48:33.000 --> 0:48:36.279 we realize that financial leverage is not a strategy, it's 0:48:36.320 --> 0:48:40.000 a tool. Okay, So my play on words here was 0:48:40.040 --> 0:48:45.360 that social leverage is infinite. You and me doing this podcast, 0:48:45.600 --> 0:48:48.440 me starting my own podcast. This all is leverage from 0:48:48.520 --> 0:48:52.640 the network. Right, financial leverage almost brought down the system. 0:48:52.880 --> 0:48:57.640 So your social leverage is deal flow, connections, fun, access 0:48:57.680 --> 0:49:00.279 to start founders, access. 0:49:00.080 --> 0:49:05.160 Low capital requirement. It was just a moment of the 0:49:05.160 --> 0:49:07.839 opposite of what brought down the system. But no one 0:49:07.880 --> 0:49:09.960 really dove in. Most people think, hey, you give them 0:49:10.040 --> 0:49:14.680 back to social good. Go No, I'm pro oil. So 0:49:14.840 --> 0:49:16.880 there is people go, I don't want to invest with 0:49:16.880 --> 0:49:18.799 a guy who's investing in the social good, And. 0:49:18.800 --> 0:49:21.040 I'm like, well, do you drive a car then shut up? 0:49:21.160 --> 0:49:21.480 Yeah. 0:49:21.640 --> 0:49:26.480 But by the way I digression, I don't understand the 0:49:26.480 --> 0:49:30.719 whole low carbon investments. We're gonna not give any money 0:49:30.760 --> 0:49:34.000 to the carbon producers instead will give money to the 0:49:34.000 --> 0:49:37.160 carbon consumers. How are you moving the needle there? If 0:49:37.200 --> 0:49:41.560 you're against oil and want to see alternatives come up, 0:49:42.040 --> 0:49:44.640 isn't there a better way to do it than saying 0:49:44.680 --> 0:49:46.920 we're just going to give money to people who use carbon? 0:49:47.280 --> 0:49:50.319 Yeah? Well, climate now is a big category for PCs 0:49:50.400 --> 0:49:53.880 and I'm not in it, but there's big developments happening. 0:49:54.160 --> 0:49:57.239 If you want to invest in alternative energy, well put 0:49:57.239 --> 0:49:59.360 your money in there because there's a ton of promise. 0:49:59.400 --> 0:50:04.040 That fine, But to say no, Mobile, we're just going 0:50:04.080 --> 0:50:07.359 to invest in ups and FedEx, Amazon, you know this 0:50:07.400 --> 0:50:12.319 way will not spoil the environment is just kind of misguided. 0:50:12.440 --> 0:50:14.759 Yeah. So social levels is just to play on words. 0:50:14.640 --> 0:50:19.800 Right, So so we're from well from from social leverage. 0:50:21.040 --> 0:50:22.080 Where do you go from there? 0:50:22.120 --> 0:50:26.880 How do you as a venture investor? How do you 0:50:26.960 --> 0:50:30.320 think about what you're putting money into? Are you? What 0:50:30.920 --> 0:50:33.480 is it about the management team? Is it about the 0:50:33.520 --> 0:50:35.840 product idea? Is it about the valuation? 0:50:36.120 --> 0:50:36.319 What? 0:50:36.320 --> 0:50:37.880 What's the decision making process? 0:50:37.880 --> 0:50:40.239 It's a great question. Everybody's different. You know. Luckily my 0:50:40.360 --> 0:50:44.239 mentors Brad Feld, Fred what these are like some of 0:50:44.280 --> 0:50:45.080 the great stars? 0:50:45.280 --> 0:50:48.920 Yeah, Rock start begging Fred to come in the show. 0:50:49.320 --> 0:50:53.319 Seven years He's like, I don't really do podcasts, all right, 0:50:53.360 --> 0:50:55.040 Well I'll corner him. I met him somewhere else. 0:50:55.280 --> 0:50:58.439 How Morgan shows up Roger Ehrenberg. So so I got 0:50:58.520 --> 0:51:02.600 very lucky because at that time, remember you're coming out 0:51:02.600 --> 0:51:05.520 of a nasty bear market. These guys were not. So 0:51:05.560 --> 0:51:09.120 this is like as like, yeah, these people were coming 0:51:09.160 --> 0:51:11.400 out of getting their ass kicked for five years and 0:51:11.520 --> 0:51:14.840 lawsuits and IPOs that went down ninety five percent. So 0:51:14.920 --> 0:51:18.000 these were not famous people. These were people that were 0:51:18.040 --> 0:51:22.080 deemed idiots again and truly not idiots, but you know 0:51:22.080 --> 0:51:23.560 what I mean, they were out of favor. 0:51:23.840 --> 0:51:25.680 You're only you're only as good as your last trade. 0:51:25.719 --> 0:51:28.759 Correct. So these people were beat up, but they were 0:51:28.800 --> 0:51:33.440 all smart and they in my team capital. They had capital. 0:51:33.760 --> 0:51:37.719 They survived, They kept their reputation attack by communicating with 0:51:37.800 --> 0:51:41.320 their investors. There's a cycle, and they caught the next cycle. 0:51:41.480 --> 0:51:45.160 Now this cycle. They what what happens to great investors 0:51:45.200 --> 0:51:48.120 after they go through a cycle. If they're great, they 0:51:48.160 --> 0:51:52.399 become great investors because they have memory and they have 0:51:52.640 --> 0:51:55.040 a new muscle that they learned that markets go down 0:51:55.360 --> 0:51:58.920 right right like guess what. Fred hates the stock market 0:51:59.000 --> 0:52:01.719 because he meant, you know, he became a VC. He's like, 0:52:02.040 --> 0:52:04.440 my job is to invest early, and if I have 0:52:04.480 --> 0:52:06.720 a chance to sell, I'm not going to be greedy. 0:52:07.160 --> 0:52:09.879 So luckily I had this great group of mentors, and 0:52:10.000 --> 0:52:12.920 like you, they were blogging. Not only were they blogging, 0:52:13.600 --> 0:52:15.920 they were blogging about stuff that I couldn't get in 0:52:15.960 --> 0:52:16.640 a textbook. 0:52:17.120 --> 0:52:20.360 They were wis blog of vc AVC. 0:52:20.400 --> 0:52:22.880 And brad feldfel dot com and wrote ther Eremberg at 0:52:22.880 --> 0:52:25.200 the time, and there it's like, well was Erenburg's blog 0:52:25.280 --> 0:52:31.640 I event information arbitrage and he was a great writer. 0:52:31.920 --> 0:52:35.760 You and obviously I have stocks now I have hundreds 0:52:35.760 --> 0:52:41.279 of writers. And then you know, they just gave this 0:52:41.400 --> 0:52:44.960 stuff away and they owned their domain, so there wasn't 0:52:44.960 --> 0:52:47.000 any problems. Like you wrote on Fred's blog, you had 0:52:47.000 --> 0:52:49.640 to go to Fred's blog. He linked to other people, 0:52:50.040 --> 0:52:53.360 they picked up the phone. Everybody was moving fast. It 0:52:53.480 --> 0:52:56.120 was just organic get the speed going. And so it's 0:52:56.239 --> 0:53:00.640 just a miracle. And what we focused on was good 0:53:00.680 --> 0:53:05.840 people and big ideas because you could glob onto Facebook 0:53:05.840 --> 0:53:08.160 and Twitter, so that that attracted. 0:53:08.360 --> 0:53:11.520 So how did you become a pre IPO investor in 0:53:11.560 --> 0:53:13.680 stocks like Facebook and Twitter. 0:53:14.280 --> 0:53:18.160 So at Twitter fred because of Wallstrip, he wrote, the 0:53:18.160 --> 0:53:21.080 first they led, the first three million dollar round on 0:53:21.120 --> 0:53:25.359 Twitter had a seventeen million valuation. Think about that right, 0:53:25.520 --> 0:53:29.520 Like today that seems normal. Back then I was Wallstrip 0:53:29.640 --> 0:53:31.839 was like a four hundred k valuation. I was doing 0:53:31.880 --> 0:53:35.760 deals one on two, six hundred grand on one million. 0:53:36.040 --> 0:53:38.760 Like founders were giving up forty percent of their business. 0:53:38.920 --> 0:53:41.400 We were coming out of like a hard time like 0:53:41.520 --> 0:53:45.000 we use kids today, but back then it was like 0:53:45.080 --> 0:53:47.839 you're giving up meaty chunks of the business. So things 0:53:47.840 --> 0:53:50.440 had to move very fast. But really you were betting 0:53:50.440 --> 0:53:53.520 on people. It wasn't so much price because everything was 0:53:53.600 --> 0:53:55.520 cheap because you were coming out of that open Much 0:53:55.520 --> 0:53:56.799 of it didn't happen yet. 0:53:56.840 --> 0:54:00.600 Mark Andriesen said, all right, so imagine we overpaid double 0:54:00.680 --> 0:54:04.880 for Facebook. Who cares it's a six thousand percent return 0:54:05.880 --> 0:54:08.200 instead of a twelve thousand percent. What does it make 0:54:08.239 --> 0:54:08.760 a difference? 0:54:08.920 --> 0:54:11.640 It does now at these levels, at these So what 0:54:11.719 --> 0:54:14.040 happened is that story got you know when you say 0:54:14.040 --> 0:54:17.919 it a thousand times and the twelfth kid graduating twenty 0:54:18.000 --> 0:54:19.520 years later says the same thing. 0:54:19.920 --> 0:54:22.319 It doesn't work It's a difference, and that's why I. 0:54:22.320 --> 0:54:27.080 Flash forward today. But back then, yes, so twitterh so Twitter, 0:54:27.239 --> 0:54:29.080 I had passed. I said, fret, how am I going 0:54:29.120 --> 0:54:31.719 to make twenty times my money? I had my VC 0:54:31.920 --> 0:54:34.560 hat on for an hour and I go fret. Twitter 0:54:34.560 --> 0:54:36.920 would have to be worth half a billion dollars for 0:54:37.000 --> 0:54:40.160 me to make worth my while. So of course I passed. 0:54:40.600 --> 0:54:43.560 Now Fred taught me a lesson there and he said, Howard, 0:54:43.800 --> 0:54:46.799 if you love everything about the product and the team, 0:54:47.800 --> 0:54:51.600 Gorgier knows about the press. But I'm Canadian. This goes 0:54:51.640 --> 0:54:53.759 back to what I said, I'm conservative and believing I 0:54:53.880 --> 0:54:56.839 just mentally couldn't do a model like these guys because 0:54:56.880 --> 0:54:59.879 social leverage hadn't been around that long. Network effects were new, 0:55:00.440 --> 0:55:03.480 So it was mind boggling to think that the president 0:55:03.520 --> 0:55:06.560 would tweet like Trump or the La Musk would be 0:55:06.640 --> 0:55:08.279 the richest guy in the world at the time. 0:55:08.840 --> 0:55:12.280 So this is, by the way, mentioning the president tweeting. 0:55:13.440 --> 0:55:15.400 You have to look at the four years of the 0:55:15.440 --> 0:55:20.520 Trump administration exactly what I asked, golden opportunity for Twitter 0:55:21.160 --> 0:55:24.960 to turn into something. How did they blow that opportunity? 0:55:25.000 --> 0:55:25.080 That? 0:55:25.200 --> 0:55:29.360 I guess that post mortem is not your expertise, your 0:55:29.680 --> 0:55:32.120 pre mortem, you're your much earlier states. 0:55:31.840 --> 0:55:33.959 Well, my pre mortem was going to Jack and Evan 0:55:34.160 --> 0:55:38.160 visualizing that for them and saying, wrap a terminal around Twitter, 0:55:38.600 --> 0:55:43.400 delay the feed thirty seconds for everybody. So imagine you know, 0:55:43.400 --> 0:55:45.160 I go to Ted Mertch as a friend of mine. 0:55:45.320 --> 0:55:48.319 He was Bloomberg here for twenty years. I used to 0:55:48.320 --> 0:55:51.360 come to this building. He's the guy who put the 0:55:51.600 --> 0:55:52.200 sung hero. 0:55:52.480 --> 0:55:56.040 He put Twitter on the terminal. So because for a 0:55:56.080 --> 0:55:59.719 lot of people, Twitter became the new tape and they 0:55:59.760 --> 0:56:01.840 were Bloomberg was smart enough to say, we have to 0:56:01.840 --> 0:56:04.760 have this in our feed. People can't find out about 0:56:04.760 --> 0:56:06.440 it after the fact, and they came up with a 0:56:06.520 --> 0:56:07.680 very clever way to cure it. 0:56:07.800 --> 0:56:10.879 Bloomberg didn't come up with the key, Howard and Ted 0:56:11.239 --> 0:56:13.359 came up. Well, I mean I used to call on Ted. 0:56:13.400 --> 0:56:14.959 I used to come in here, go to the sixth 0:56:15.000 --> 0:56:18.840 floor or a suit, complain that there was no candy, 0:56:19.960 --> 0:56:22.160 and go what kind of mental cases don't have candy 0:56:22.200 --> 0:56:25.200 in there in their in their hallway? And I would 0:56:25.239 --> 0:56:29.719 call on Ted. It was I would call Ted, I 0:56:29.719 --> 0:56:32.480 don't understand. I go, you guys are this is a 0:56:32.600 --> 0:56:35.239 dangerous problem for you to have outside the walls like 0:56:35.320 --> 0:56:37.280 Jurassic Park. I go, trades are happening. 0:56:38.920 --> 0:56:39.920 You can't have trades away. 0:56:40.080 --> 0:56:41.759 And so I said, one day, your headphones are going 0:56:41.800 --> 0:56:44.120 to start screaming at you that news is breaking outside 0:56:44.200 --> 0:56:47.799 the terminal. So Ted understood all that, he went and 0:56:47.840 --> 0:56:50.280 cut the deal of the century. I imagine with Twitter, 0:56:50.560 --> 0:56:54.279 some poor sales kid nipped inside Twitter comes to Bloomberg 0:56:54.640 --> 0:57:00.239 like a like a cob into a and try to 0:57:00.280 --> 0:57:04.560 be order. Tries to meet Twitter's quarter in twenty eleven, 0:57:04.640 --> 0:57:06.360 comes home with like a thirty million I don't know 0:57:06.400 --> 0:57:09.000 what the number is, like a ten year Bloomberg deal. 0:57:09.080 --> 0:57:13.000 What it was? Good time? So this is me yelling 0:57:13.040 --> 0:57:16.560 at Doctor's going idiots like I go Jack. That's why 0:57:16.560 --> 0:57:21.240 I was always mad at management. Don't sell to the 0:57:21.280 --> 0:57:25.760 one customer who violutely needs the data. So this is 0:57:25.760 --> 0:57:28.680 where Twitter's mistake was, and Fredick agrees with it. I 0:57:28.680 --> 0:57:31.000 would go to FREDI go fret, get over to that 0:57:31.040 --> 0:57:33.880 board meeting, and you tell Jack and Ev to delay 0:57:33.960 --> 0:57:37.840 the feed thirty seconds. Somebody will call you and pay 0:57:37.880 --> 0:57:41.080 you a billion dollars to get it in real time 0:57:42.040 --> 0:57:46.360 and charge that company. And that's going to be Bloomberg, Reuters, 0:57:46.720 --> 0:57:50.120 some Warren Buffett, Goldman, Sachs, somebody they can afford to 0:57:50.160 --> 0:57:54.760 pay you. And if Justin Timberlake farts at a concert, 0:57:55.120 --> 0:57:59.000 if someone reads it a minute later, it doesn't matter, right. 0:57:59.400 --> 0:58:02.880 But if a player injures itself in sports, or if 0:58:02.960 --> 0:58:07.000 the president tweets or been Lodden gets shot, right, the 0:58:07.080 --> 0:58:10.600 futures will move. And that was their business idea. They 0:58:10.680 --> 0:58:14.000 kind of had ten employees and they blew it. Yeah, 0:58:14.040 --> 0:58:16.200 and so I always still give about that idea. 0:58:16.280 --> 0:58:20.560 I still don't understand why Twitter didn't or doesn't acquire 0:58:20.600 --> 0:58:22.040 stock to It's it's such a now. 0:58:22.160 --> 0:58:24.880 It's not even about structors. They should have bought DraftKings. 0:58:24.880 --> 0:58:27.640 They should have Robinhood. They should have been a broker dealer. 0:58:27.880 --> 0:58:30.880 There should have been a gambling they should have made 0:58:30.880 --> 0:58:32.040 money off the transaction. 0:58:32.320 --> 0:58:35.400 They think they have this crazy idea that they air. 0:58:35.600 --> 0:58:37.720 They're the town square. 0:58:37.760 --> 0:58:39.080 You know what's in the town scores. A lot of 0:58:39.120 --> 0:58:43.080 poop and a lot of crazy people. You know why 0:58:43.080 --> 0:58:45.200 you can't drink out of the nile because people peeing 0:58:45.240 --> 0:58:48.760 it for a thousand years. The town Score is a dirty, 0:58:48.800 --> 0:58:49.440 dirty place. 0:58:49.920 --> 0:58:54.880 So you end up with a sort of area that 0:58:55.080 --> 0:58:59.000 is central to so many people's It's got nexus of 0:58:59.120 --> 0:59:03.240 so many industry correct and so many journalists and celebrities 0:59:03.320 --> 0:59:06.680 and finance people. And you know, there's medical Twitter, and 0:59:06.720 --> 0:59:09.720 there's black Twitter, and there's finance Twitter, and there's you know, 0:59:10.760 --> 0:59:13.920 I get dragged into I mentioned I set up a 0:59:13.960 --> 0:59:18.120 list of watch companies, right, watch Twitter, Like you have 0:59:18.200 --> 0:59:22.880 all these communities, and it's astonishing that nobody's figured out 0:59:22.880 --> 0:59:23.680 a way to monitor it. 0:59:23.760 --> 0:59:26.400 Because it was an open protocol. Like when Fred invested, 0:59:26.480 --> 0:59:28.840 he envisioned it as an open protocol. What do they do? 0:59:28.960 --> 0:59:31.760 They closed it. It's okay to close it to the 0:59:31.800 --> 0:59:34.200 people that can afford to pay to open it, not 0:59:34.960 --> 0:59:38.040 to the regular people. Charging me eight dollars for something 0:59:38.080 --> 0:59:41.200 i'd pay five grand is not good business, right. Charging 0:59:41.240 --> 0:59:43.000 me eight dollars for something I'm not willing to pay 0:59:43.000 --> 0:59:46.320 eight dollars for is not good business. So that was 0:59:46.400 --> 0:59:49.520 the mistake. You have the Nile River, it's just filled 0:59:49.560 --> 0:59:53.240 with data, right, and you decide to let everybody pissing it. 0:59:53.360 --> 0:59:56.000 Right, And that's the crazy thing is Twitter is a 0:59:56.120 --> 0:59:58.200 data source, is really. 0:59:58.400 --> 1:00:00.480 Especially in an air of machine learning. Right, So this 1:00:00.600 --> 1:00:04.080 word elon could come out. Okay, having a unique data 1:00:04.080 --> 1:00:06.320 set we're jumping around here, but having a unique data 1:00:06.320 --> 1:00:09.480 set in twenty twenty three, like stock twits, does quadruples 1:00:09.480 --> 1:00:12.880 our value because people are doing things. You can't get 1:00:12.920 --> 1:00:15.800 to apply our model, your LM or your model to 1:00:16.440 --> 1:00:19.160 real time financial people that talk about stocks all day long. 1:00:19.320 --> 1:00:20.440 You have to have our data. 1:00:20.520 --> 1:00:24.040 Yeah, so let's circle back to social leverage. We talked 1:00:24.040 --> 1:00:26.120 about what you've done on the media side. We've talked 1:00:26.120 --> 1:00:30.800 about finance side. What else does social leverage focus on? 1:00:30.960 --> 1:00:35.360 Is it just you know, finance and media or do 1:00:35.400 --> 1:00:36.920 you look at tech and other things? 1:00:37.240 --> 1:00:39.440 So, yeah, we're investing out of our fourth fund. It's 1:00:39.440 --> 1:00:42.960 one hundred million dollar fund. We went from six million. 1:00:42.800 --> 1:00:44.400 And you're closed. You're done, We're closed. 1:00:44.440 --> 1:00:47.120 Yeah, so we we we raised six million for our 1:00:47.160 --> 1:00:50.240 first fund. That fund had Robinhood in it, right last. 1:00:50.400 --> 1:00:51.960 The second we'll talk about Robinhood. 1:00:52.320 --> 1:00:54.960 Second fund had some more Robinhood and a company called 1:00:54.960 --> 1:00:57.600 Customer and a few other great companies h both. 1:00:57.640 --> 1:00:58.840 How big was the second fund? 1:00:58.920 --> 1:01:01.760 Twenty just two of us and then we brought on 1:01:01.760 --> 1:01:04.120 our third partner, Gary Bennett, who had sold US company 1:01:04.120 --> 1:01:05.960 to Salesforce and we were doing a lot of enterprise 1:01:06.000 --> 1:01:09.440 and healthcare. And that's our third fund, which was forty right, 1:01:09.480 --> 1:01:11.840 and we we liked the capital constrained model. And then 1:01:11.840 --> 1:01:13.960 our fourth fund will which will be like where we 1:01:14.000 --> 1:01:17.120 settle in at the future is one hundred million dollar fun. 1:01:17.200 --> 1:01:19.440 And you're still doing very early see right. 1:01:19.400 --> 1:01:22.400 One to two million dollars check. We lead rounds. We 1:01:22.480 --> 1:01:24.880 don't have sharp elbows, meaning we don't have if someone 1:01:24.880 --> 1:01:27.080 wants to put their name first, they can't put their 1:01:27.160 --> 1:01:30.160 name first. It's about the ten years stuff. So we 1:01:30.320 --> 1:01:35.360 like to win. Now, what's changes. Social leverage has evolved 1:01:35.360 --> 1:01:38.400 because the markets move. So I was very heavy and 1:01:38.560 --> 1:01:41.160 financial services stuck, which was a great lead. Jon Engine. 1:01:41.320 --> 1:01:46.840 We invested in Rally, Royd road cooy Fin E, Toro, Robinhood, Alpaca, 1:01:48.040 --> 1:01:51.800 Very Finance. Why charts you know, so I didn't realize 1:01:51.800 --> 1:01:55.040 you and why yeah first check and so so yeah, 1:01:55.080 --> 1:01:58.160 sixty thousand dollars check to Sean Carpenter when running White 1:01:58.200 --> 1:02:01.680 Charts and it's a great business. The old chard i 1:02:01.760 --> 1:02:04.480 Q which just sold to S and P. So we 1:02:04.520 --> 1:02:08.480 really I covered if you were going to build a 1:02:08.480 --> 1:02:12.040 Bloomberg terminal. And again this is Twitter screwing this up. 1:02:12.640 --> 1:02:15.040 Twitter should about all these companies and just giving it 1:02:15.160 --> 1:02:18.640 stuff away, right, just giving it away for fifty one 1:02:18.680 --> 1:02:20.920 hundred bucks a Mike, create a two hundred dollars a 1:02:20.920 --> 1:02:22.400 month Bloomberg terminal that's open. 1:02:22.720 --> 1:02:25.280 They've never no one has ever been able to do. 1:02:25.240 --> 1:02:28.160 That, including me. If I don't have the bay the terminal, 1:02:28.440 --> 1:02:31.720 it'll still happen. There'll be a roll up post this crash. No, 1:02:31.800 --> 1:02:33.640 there'll be a role. I think, well, there will be 1:02:33.680 --> 1:02:36.720 an effort. I'm not saying it'll be correct. Why wouldn't you. 1:02:36.720 --> 1:02:39.600 You can buy fintech askeids for ninety cents off the 1:02:39.640 --> 1:02:40.360 doll You. 1:02:40.320 --> 1:02:43.240 Could go back over the past twenty years, and every 1:02:43.320 --> 1:02:46.600 three or four years there's a story about this is 1:02:46.640 --> 1:02:49.439 finally the end of the Bloomberg terminal, and six months 1:02:49.520 --> 1:02:52.120 later they're at old time highs in terms of users. Sorry, 1:02:52.320 --> 1:02:53.640 nobody has ever been able to do it. 1:02:53.720 --> 1:02:56.280 Let me be clear, Berry, you cannot disrupt them. Didn't 1:02:56.280 --> 1:02:58.320 mean it that way, but I mean that's been the 1:02:58.400 --> 1:03:03.200 intense stupid intent. There's things you can't be right, Okay, 1:03:03.280 --> 1:03:05.400 you can't beat open So I'm not going to go 1:03:05.440 --> 1:03:09.760 take on open AI. I meant it works. Okay, you 1:03:09.800 --> 1:03:12.080 can't take on the Bloomer. That doesn't mean rich people 1:03:12.120 --> 1:03:18.080 won't try. But network effects are very powerful. Okay, centralized 1:03:18.120 --> 1:03:21.000 network effects are very powerful. The second thing that Bloomberg 1:03:21.040 --> 1:03:24.240 has is the right customer, of course, and the third 1:03:24.240 --> 1:03:26.880 thing that Bloomberg has is a will to not lose. 1:03:27.360 --> 1:03:32.880 What Bloomberg got right was esthetics, talent, uh, not not 1:03:33.000 --> 1:03:33.560 giving an. 1:03:33.440 --> 1:03:38.919 Inch, stability, rock when support right? When was the last 1:03:38.920 --> 1:03:42.040 time you heard about the terminal going down? But Twitter? 1:03:42.280 --> 1:03:44.880 You know, every other week you were hearing about that 1:03:45.000 --> 1:03:45.600 for how long? 1:03:45.920 --> 1:03:47.800 Early on Twitter could have set up a customer support 1:03:47.840 --> 1:03:50.720 desk for five hundred a month and said call us, 1:03:50.720 --> 1:03:53.520 we'll build you lists instead of what you know they 1:03:53.000 --> 1:03:54.919 sell the hard work. 1:03:55.040 --> 1:03:59.000 I have a behavioral finance list. I have a I 1:03:59.040 --> 1:04:00.680 have everybody in my phone. I'm on a list. I 1:04:00.720 --> 1:04:04.520 see everything that everybody tweets in case anybody that says 1:04:04.520 --> 1:04:09.640 anything non compliant. Compliance tracks that. Also, the watch list 1:04:09.720 --> 1:04:11.720 is just sort of fun. I have a car list 1:04:11.800 --> 1:04:16.000 that's fun like that, sort of curated lists. I still, 1:04:16.040 --> 1:04:18.560 to this day don't understand why Twitter doesn't promote these 1:04:18.600 --> 1:04:21.560 sorts of things. They're amazing science and technology. I have 1:04:21.600 --> 1:04:24.240 a list like that that has like seventy thousand followers. 1:04:24.280 --> 1:04:25.959 I don't know how that true. 1:04:26.120 --> 1:04:29.520 I'll give you my thesis. My thesis is organic growth, 1:04:29.560 --> 1:04:33.280 Well great is also a drug and it got it 1:04:33.400 --> 1:04:37.680 infected people's brains, meaning, hey, we already won America, let's 1:04:37.680 --> 1:04:39.920 go to China. You know how long it took like 1:04:39.960 --> 1:04:42.760 Bloomberg to open at second office. I imagine ten years. 1:04:43.160 --> 1:04:47.080 You know fast, Twitter and Facebook and even Robinhood were 1:04:47.080 --> 1:04:50.680 opening offices in China year two like no one. So 1:04:50.720 --> 1:04:54.200 I'm saying organic growth was a drug that forced people 1:04:54.240 --> 1:04:57.479 to think that they were smarter than they were, grow 1:04:57.600 --> 1:04:59.520 faster than they were. And oh and by the way, 1:04:59.520 --> 1:05:02.440 there was zero percent interest rate and venture capitalists were 1:05:02.440 --> 1:05:05.080 lining up to give you money. Howard. 1:05:05.480 --> 1:05:09.960 In addition to running a venture fund, Social Leverage also 1:05:11.080 --> 1:05:14.919 hosts a podcast called Panic with Friends. So I got 1:05:14.920 --> 1:05:18.400 so many questions to ask you about. First, what what 1:05:18.480 --> 1:05:22.200 is this podcast? Then you you talk about well. 1:05:22.080 --> 1:05:25.120 You started there was there was podcasts a thing now 1:05:25.160 --> 1:05:25.640 a little bit. 1:05:26.920 --> 1:05:27.960 Should I look into this? 1:05:28.280 --> 1:05:32.800 You should? So, I think the podcast is popular in 1:05:32.920 --> 1:05:36.360 general because you get to have these conversations with people 1:05:36.400 --> 1:05:39.360 conan being a perfect example. I listen to comedy podcasts, 1:05:39.360 --> 1:05:43.560 so I listened to Kore and Conan is just so talented. 1:05:43.200 --> 1:05:47.200 So he he happens to be just quick digression, which 1:05:47.240 --> 1:05:50.800 you and I both can't help but do. When I 1:05:50.960 --> 1:05:55.840 was pitching Masters in Business to Bloomberg, I pitched it 1:05:55.960 --> 1:06:00.400 as Mark Maron meets Charlie Rose and Mark Man is 1:06:00.400 --> 1:06:03.320 one of the original pot And by the way, that's 1:06:03.360 --> 1:06:06.520 back when Charlie Rose pants on who nobody knows going 1:06:06.560 --> 1:06:12.080 on but Mark Marin. He was the first guy doing 1:06:12.240 --> 1:06:16.960 long form interviews with people in his industry. And he's 1:06:17.000 --> 1:06:21.200 a stand up and a television show producer. But it's 1:06:21.280 --> 1:06:23.160 let me bring in my friends from the world to 1:06:23.200 --> 1:06:26.600 stand up comedy and let's dissect what makes something fun. 1:06:26.600 --> 1:06:31.000 Correct so inspired like like Jerry's show, inspired by What 1:06:31.040 --> 1:06:34.200 You Do, inspired by Conan. I started my own podcast 1:06:34.840 --> 1:06:37.640 in March tenth of twenty twenty. So the market the 1:06:37.680 --> 1:06:38.360 vix was like. 1:06:38.240 --> 1:06:41.040 Oh, so weird, not quite shut down yet, I feel 1:06:41.080 --> 1:06:43.080 like to shut. 1:06:42.840 --> 1:06:45.520 Down in the you know, and I'm like, people were 1:06:45.560 --> 1:06:49.280 freaking out. As kind of a service to myself and 1:06:49.320 --> 1:06:52.840 my next yeah, and a service to my network to 1:06:52.880 --> 1:06:55.240 be able to talk to like Fred Wilson and Jim 1:06:55.280 --> 1:06:58.160 O'Shaughnessy and you. I said, why don't I just for 1:06:58.200 --> 1:07:03.280 the thirty days document the panic and start the show 1:07:03.320 --> 1:07:05.880 called Panic with Friends, where we are our calm voice. 1:07:06.040 --> 1:07:10.280 So my first inclination with COVID was this will pass. Obviously, 1:07:10.320 --> 1:07:11.120 because by the. 1:07:11.160 --> 1:07:13.800 Day, everybody I think had the same. 1:07:13.600 --> 1:07:15.640 Maybe my best call, but it wasn't like I had 1:07:15.640 --> 1:07:18.760 some great insight. It was just, oh my god, people like, 1:07:19.600 --> 1:07:22.000 at least we could do is take a deep breath. 1:07:22.080 --> 1:07:24.440 So I have this idea, we're gonna We're gonna do 1:07:24.560 --> 1:07:26.760 the opposite of panic, even though the show's called Panic 1:07:26.760 --> 1:07:29.440 with Friends, And I would get my calmest friends that 1:07:29.480 --> 1:07:32.360 have been through many cycles and just chat with them 1:07:32.400 --> 1:07:34.840 about the panic. And at the time that now the 1:07:34.840 --> 1:07:37.800 market closes, I'm doing a show a day. A great guest. 1:07:37.880 --> 1:07:39.920 Jomo Shaughnessy is my first guest, and it was just 1:07:40.320 --> 1:07:42.479 really good advice. It's like that, and then I start 1:07:42.520 --> 1:07:44.760 bringing in traders. When the VIC hits eight and I'm like, 1:07:44.800 --> 1:07:46.840 what are we buying? Oil was negative? I bring on 1:07:46.920 --> 1:07:50.360 my favorite oil trader and we were just like, if 1:07:50.360 --> 1:07:53.160 you listen to my podcast, you made fortunes because we 1:07:53.160 --> 1:07:56.400 were there, and I was so proud of just being. 1:07:57.560 --> 1:07:59.840 Makes the voice of reasons. 1:08:00.280 --> 1:08:02.520 Guys, you don't have to buy, but if you're not 1:08:03.360 --> 1:08:09.200 thinking about buying during these weeks, you will you may 1:08:09.240 --> 1:08:10.840 not want to ever be an investor. 1:08:11.040 --> 1:08:11.560 Let me ask you. 1:08:11.680 --> 1:08:12.480 I was the idea of the show. 1:08:12.600 --> 1:08:14.320 Let me ask you a question because I had a 1:08:14.320 --> 1:08:17.760 similar experience. I'm curious as to what yours was. What 1:08:17.960 --> 1:08:21.519 sort of pushback did you get to that rational Hey 1:08:21.600 --> 1:08:24.960 down thirty percent in a few weeks buying opportunity? What 1:08:25.760 --> 1:08:26.360 did people say? 1:08:26.439 --> 1:08:28.760 The show wasn't like it was more a show of like, 1:08:29.080 --> 1:08:30.760 you know, I have a big audience, not for the 1:08:30.760 --> 1:08:33.880 podcast at the time, but I would just I figured, 1:08:33.880 --> 1:08:37.160 if people ever go back and look for about thirty 1:08:37.240 --> 1:08:40.880 days of podcasting after day, I was going to put 1:08:40.920 --> 1:08:44.559 a piece of work out there that would be timeless. Now, 1:08:44.600 --> 1:08:46.400 I didn't expect to be doing the show for three 1:08:46.439 --> 1:08:49.400 more years, and it should be called Frolic with Friends 1:08:49.400 --> 1:08:51.760 at this point. But I was really proud of it. 1:08:51.800 --> 1:08:53.519 But we just kept going. Canodos are one of my 1:08:53.560 --> 1:08:54.200 best pals. 1:08:54.400 --> 1:08:57.160 It's also you don't realize how much fun it is 1:08:57.200 --> 1:08:59.519 to sit down with somebody. You and I know each 1:08:59.520 --> 1:09:01.720 other for a long time. How often do we get to 1:09:01.720 --> 1:09:04.080 sit down and bs about what we do for two hours? 1:09:04.320 --> 1:09:06.719 It's also it's a blast, It's not just a blast. 1:09:06.760 --> 1:09:08.000 It keeps me ahead of the curve. 1:09:08.760 --> 1:09:11.160 And you got to think about who you're talking to. 1:09:11.720 --> 1:09:14.599 There's some prep work that you wouldn't do otherwise. Hey, 1:09:14.680 --> 1:09:17.639 let me look into seed investing before I sit down 1:09:17.680 --> 1:09:20.400 with Howard. Oh look what I've learned. I mean you 1:09:20.400 --> 1:09:22.840 you must have those sort of experiences. It's that although 1:09:22.880 --> 1:09:24.479 you have a staff that does all the research, I. 1:09:24.400 --> 1:09:27.160 Don't have the staff do everything other than connute myself. 1:09:28.520 --> 1:09:33.040 And you know, I just love the idea that my daughter, 1:09:33.479 --> 1:09:35.920 my wife listened to it and they like it. As 1:09:35.920 --> 1:09:38.400 long as they like it, I'll keep doing it. Every 1:09:38.400 --> 1:09:40.120 time I say I quit, my wife goes, I listened 1:09:40.120 --> 1:09:41.840 while I'm hiking, and go all right, I'll keep. 1:09:41.720 --> 1:09:43.599 Doing So what do you What have you learned from 1:09:43.640 --> 1:09:44.640 hosting a podcast? 1:09:44.880 --> 1:09:48.400 Well, I've learned that people are great, right, I've learned 1:09:48.640 --> 1:09:49.639 obviously because I don't. 1:09:49.520 --> 1:09:51.719 Want you so the opposite of what you learn from Twitter. 1:09:52.000 --> 1:09:55.519 Yeah, I learned that just there's so many smart people 1:09:55.880 --> 1:10:00.320 and I also learn a lot about myself in I 1:10:00.360 --> 1:10:04.040 don't know anything, and I do love to make my 1:10:04.160 --> 1:10:06.120 guest laugh. Like part of the thing is if you 1:10:06.120 --> 1:10:08.280 can make the friends and the Jim o'shaughness is and 1:10:08.360 --> 1:10:11.600 the berries laugh, that is the only gift that I 1:10:11.640 --> 1:10:15.320 was born with, is to probe and make them giggle 1:10:15.640 --> 1:10:19.599 or just look at themselves a little less seriously. Right, 1:10:19.880 --> 1:10:21.880 So when I see a flaw in person, whether it's 1:10:21.960 --> 1:10:25.800 Kramer or whether it's you know, Trump, I look at 1:10:25.840 --> 1:10:28.400 it like, man, these are bad life decisions. Like Jim 1:10:28.680 --> 1:10:30.240 could have been me. He could have he had the 1:10:30.240 --> 1:10:32.080 center of the universe. I look at Jim, and he 1:10:32.120 --> 1:10:35.240 went media. He could have gone venture. Right, maybe he 1:10:35.280 --> 1:10:36.680 did do venture and he doesn't talk about it. 1:10:36.760 --> 1:10:37.799 He did okay for himself. 1:10:38.000 --> 1:10:40.080 To be fair saying he didn't make money, I'm saying 1:10:40.320 --> 1:10:43.080 he's slapping on makeup. But he could have been, and 1:10:43.240 --> 1:10:43.680 he could have been. 1:10:44.600 --> 1:10:47.960 He's got a daily grind that looks from the outside 1:10:48.040 --> 1:10:51.080 like it's you had to pick one of two lifestyles. 1:10:51.400 --> 1:10:55.320 I think Andreasen's lifestyle is a little more less less 1:10:55.360 --> 1:10:57.719 stressful than the lifestyle that correct. 1:10:58.040 --> 1:11:00.640 So I feel like I chose the their side of 1:11:00.680 --> 1:11:03.240 the road. I could have gone down the media side, 1:11:03.479 --> 1:11:06.080 but I still look at the media more like the enemy. 1:11:06.960 --> 1:11:09.040 But I also don't look at it like Trump and 1:11:09.120 --> 1:11:11.840 Elon must look like it. They're out to get me, 1:11:12.120 --> 1:11:13.880 and I know they are out to get them and 1:11:14.120 --> 1:11:16.400 whatever clicks. 1:11:16.080 --> 1:11:18.439 And they're out to get paid. So you know, whenever 1:11:18.800 --> 1:11:21.720 I'm going to interrupt again because I feel like, no, 1:11:21.800 --> 1:11:24.680 we're friends, I feel like this is a conversation, not 1:11:24.880 --> 1:11:27.519 not a Q and A. And I apologize to those 1:11:27.520 --> 1:11:31.280 people who are expecting a Q and A whenever I hit. 1:11:31.320 --> 1:11:35.120 People talk about media bias, and a lot of it 1:11:35.160 --> 1:11:40.480 is just lazy journalism and what is extreme, what is outrageous? 1:11:40.479 --> 1:11:43.000 What is sensationalistic? How do we get the views? How 1:11:43.040 --> 1:11:46.439 do we get the clicks? It's not the sort of 1:11:47.960 --> 1:11:51.439 I think the right misunderstands the left and the left 1:11:51.439 --> 1:11:55.599 misunderstands the whole thing. It's a business and it's about 1:11:55.760 --> 1:12:00.679 generating and capturing attention, not we're put wishing the left 1:12:00.760 --> 1:12:02.960 versus the rights out of view. Fox News is its 1:12:02.960 --> 1:12:07.679 own animal. It has its own origin story that comes 1:12:07.680 --> 1:12:10.080 from a very different place. But when you just look 1:12:10.080 --> 1:12:14.440 at media in general, yellow journalism has been around for centuries, 1:12:14.479 --> 1:12:15.400 literally centuries. 1:12:15.560 --> 1:12:18.800 Yeah, I just loved the idea. I was born with 1:12:18.800 --> 1:12:20.639 the gift to laugh at myself, so. 1:12:20.600 --> 1:12:23.880 Let's talk about So let's talk about laughing at yourself. 1:12:24.960 --> 1:12:28.480 And I'm going to insert myself even deeper into the conversation. 1:12:28.800 --> 1:12:31.920 I wrote a column in twenty twenty one for Bloomberg 1:12:32.439 --> 1:12:35.960 what my worst trades taught me about investing, and I 1:12:36.080 --> 1:12:39.080 mentioned you said it's twenty fourteen. I remember it's twenty fifteen, 1:12:39.120 --> 1:12:42.000 but I wouldn't swear to it. The line I said 1:12:42.080 --> 1:12:44.920 is Howard, that's the dumbest investment idea I ever heard. 1:12:45.280 --> 1:12:47.280 I'm omitting the F bomb that was in the middle. 1:12:47.520 --> 1:12:49.640 You and I were talking. We were in San Francisco. 1:12:49.720 --> 1:12:52.840 I have a vivid recollection of the Ferry building being 1:12:52.880 --> 1:12:55.720 behind us. We were out on the deck behind where 1:12:55.760 --> 1:12:57.599 a couple of those restaurants were, and you were pitching 1:12:57.640 --> 1:13:01.080 me on this ridiculous idea for an app that's going 1:13:01.160 --> 1:13:03.799 to give away free trades to millennials on their phone. 1:13:04.240 --> 1:13:07.200 That's like, you know, the world's moving to passive. Who 1:13:07.240 --> 1:13:11.160 wants free trading? Where is this going? So first kudos 1:13:11.160 --> 1:13:15.240 to you to investing in robin Hood when I was 1:13:15.280 --> 1:13:18.200 too stupid to see it. But second, how did you 1:13:18.240 --> 1:13:21.880 come across the robin Hood opportunity and what made you 1:13:22.000 --> 1:13:23.640 so enthusiastic about it? 1:13:24.400 --> 1:13:27.080 The first of all, it was it was just E 1:13:27.200 --> 1:13:29.840 trade two point zero. So my big idea, like even 1:13:29.920 --> 1:13:33.240 with Wallstrip was CNBC on YouTube. Robinhood was just an 1:13:33.280 --> 1:13:34.840 extension of what each trade. 1:13:34.640 --> 1:13:36.760 Each trade on the phone, so each trade to me, 1:13:36.880 --> 1:13:38.439 if you would have pitched it to me like that, 1:13:38.600 --> 1:13:40.960 because my first gig in the business was at EA Trade, 1:13:41.040 --> 1:13:42.400 I would have been all over it. 1:13:42.520 --> 1:13:46.600 Yes, so it's my fault, I totally, So again I'm in. 1:13:46.720 --> 1:13:49.280 It was in a power position on some level because 1:13:49.439 --> 1:13:52.800 people needed stock twits to spam to get users, so 1:13:52.840 --> 1:13:55.360 we were at gateway to traffic much like Twitter. Uh 1:13:55.439 --> 1:13:57.519 huh okay. So, but the people that came to me 1:13:57.600 --> 1:14:01.320 were people were financial apps, and because I was too 1:14:01.360 --> 1:14:05.400 wimpy to build my own brokerage in twenty thirteen, just 1:14:05.439 --> 1:14:09.840 like you said, vcs are not perfect. They are like moths. 1:14:10.040 --> 1:14:14.400 And at the time, the world of VC was enamored 1:14:14.400 --> 1:14:19.200 with disrupting Vanguard, so the VC model was all the 1:14:19.280 --> 1:14:23.120 V eight trillion get to tell you my hack. So 1:14:23.160 --> 1:14:26.559 the vcs were seeing the world one way. I saw 1:14:26.600 --> 1:14:29.920 the world another way. So the VCS were like, we 1:14:30.000 --> 1:14:32.880 got to go after the assets under management. I was like, 1:14:32.960 --> 1:14:36.120 who cares those are worth? You know, red dollar? You 1:14:36.200 --> 1:14:38.760 need to get the customer and you need you know. 1:14:38.880 --> 1:14:41.439 So it wasn't like any genius insight. It was just 1:14:41.479 --> 1:14:44.479 all the money was trying to disrupt Vanguard, and Vanguard 1:14:44.640 --> 1:14:47.599 wasn't disruptible. You couldn't build a product that was twenty 1:14:47.600 --> 1:14:51.040 times better than Vanguard, whereas E trade they were spending 1:14:51.200 --> 1:14:53.400 billions on advertisements. 1:14:52.720 --> 1:14:55.120 So great emphasizing but expensive average. 1:14:55.400 --> 1:14:58.160 So at the time in twenty thirteen, you could look 1:14:58.200 --> 1:15:01.839 through the financial statements of Schwab and TD public statements 1:15:01.840 --> 1:15:04.280 and they were spending one hundred and fifty dollars for 1:15:04.360 --> 1:15:07.719 a customer acquisition. So this is the math that I applied. 1:15:07.760 --> 1:15:09.280 You could acquire them for next to nothing. 1:15:09.560 --> 1:15:14.040 How about zero and lesson zero? Right? Meaning I show 1:15:14.120 --> 1:15:16.760 my friend my free trade on my phone. He didn't 1:15:16.800 --> 1:15:17.719 see a TV commercial. 1:15:17.840 --> 1:15:19.520 What does that cost you less. 1:15:19.280 --> 1:15:22.400 Than one bucks? Because one the one customer led to ten. 1:15:22.560 --> 1:15:23.559 So it was like Uber. 1:15:23.439 --> 1:15:25.719 Grows, but you're giving them a free trade, You're giving 1:15:25.720 --> 1:15:28.360 them a free share of stock. Understand that, but what 1:15:28.400 --> 1:15:29.320 is that twenty bucks? 1:15:29.360 --> 1:15:31.640 Thirty bucks? Not even you can't think like that. As 1:15:31.680 --> 1:15:34.559 a seed investor, you can now that interestate you five percent. 1:15:35.400 --> 1:15:38.400 If Schwab is spending a buck fifty per client and 1:15:38.400 --> 1:15:41.720 you're spending one share of a five dollars stock, your 1:15:41.800 --> 1:15:44.240 cost of acquisition is five dollars. It's meaningless. 1:15:44.240 --> 1:15:48.000 Who cares, right, So at worst it was five dollars, 1:15:48.000 --> 1:15:50.280 but at best it was still negative because that person 1:15:50.360 --> 1:15:53.519 told five other people. You got to understand how that 1:15:53.600 --> 1:15:58.360 type of networking was virals organic, so it was Snapchat 1:15:58.400 --> 1:16:01.200 but with trading. So think about this, do the map. 1:16:01.360 --> 1:16:05.719 If I acquire a million users and I'm a Schwab 1:16:06.080 --> 1:16:08.600 and I did that for ten dollars, you'd be CEO 1:16:08.800 --> 1:16:12.080 of the company. Bring me the kid that got me 1:16:12.200 --> 1:16:16.719 a million users without a tv AD Right now, your 1:16:17.160 --> 1:16:19.599 all your workers were trying to kill you because they'd 1:16:19.640 --> 1:16:22.280 be slow down, dude, you're you're not supposed to work 1:16:22.280 --> 1:16:25.320 that hard. But this was my idea was like, if 1:16:25.360 --> 1:16:28.840 you can acquire a million users at zero, you're worth 1:16:28.840 --> 1:16:30.599 one hundred and fifty million dollars. 1:16:30.720 --> 1:16:30.920 Yep. 1:16:31.000 --> 1:16:33.799 So if I invest at an eight million dollar valuation. 1:16:33.880 --> 1:16:36.439 Let me put up the check. I'm up nineteen times 1:16:36.520 --> 1:16:39.040 my money in an ARB trade. So it was just 1:16:39.080 --> 1:16:39.720 an AR bike. 1:16:39.800 --> 1:16:42.000 And again, you you should have explained that to me. 1:16:42.640 --> 1:16:45.280 Well, at the time, I probably had gas from something 1:16:45.320 --> 1:16:48.679 I'd eaten in San Francisco and I had other things 1:16:48.720 --> 1:16:51.840 on my mind. No, but the idea then was it 1:16:51.880 --> 1:16:54.360 was very hard for other people to see that because 1:16:54.360 --> 1:16:56.000 they were looking for a business model. 1:16:56.040 --> 1:16:58.200 Well, now that you've explained that, it's easy to say. 1:16:58.400 --> 1:17:00.840 And so what I didn't get right for me? Again, 1:17:00.880 --> 1:17:02.479 a lot of this is luck. I didn't expect it 1:17:02.520 --> 1:17:05.960 to be thirty bill you know. So we did sell 1:17:06.000 --> 1:17:08.160 some along the way, and that was the beauty of 1:17:09.040 --> 1:17:12.280 this market. Markets have become they're a liquid a little 1:17:12.280 --> 1:17:15.639 bit right now. But there became liquidity in the private market, 1:17:16.040 --> 1:17:18.720 which is what I also helped build by investing an 1:17:18.760 --> 1:17:21.160 angel List and others. So I was just part of 1:17:21.160 --> 1:17:25.519 that whole generation which was fun, which created liquidity in 1:17:25.560 --> 1:17:26.040 the system. 1:17:26.160 --> 1:17:28.680 So how early were you in robinhood? We were the 1:17:28.680 --> 1:17:31.280 first check, you were literally the first check. Yeah, they 1:17:31.320 --> 1:17:33.840 go public for thirty five billion dollars. That that's got 1:17:33.880 --> 1:17:35.080 to put a few jingles. 1:17:35.439 --> 1:17:39.200 Yeah, we're we're on a few lists for fun returns. 1:17:39.640 --> 1:17:43.080 So you've you're selling a little bit along the way. Yeah, 1:17:43.080 --> 1:17:46.160 but it's got to be one hundred x plus, right, 1:17:46.360 --> 1:17:49.320 I know you can't disclose that, but yeah, it's huge. 1:17:49.640 --> 1:17:52.120 So now you're in a very different situation instead of 1:17:52.200 --> 1:17:53.120 thinking about. 1:17:53.040 --> 1:17:55.320 Yeah, now you pay me to come on the podcast. 1:17:54.960 --> 1:17:58.880 Right, right, But but for other people we have, we 1:17:58.960 --> 1:18:01.360 have clients who sold businesses, we have other people who've 1:18:01.360 --> 1:18:06.040 had these giant wind falls. Suddenly it's a very different calculus. 1:18:06.080 --> 1:18:09.880 You're saying, all right, I'm no longer worrying about multiplying this. 1:18:09.960 --> 1:18:13.240 How do I go about protecting this giant pool capital? 1:18:13.479 --> 1:18:15.519 And how do I not get killed tax wise? 1:18:15.560 --> 1:18:15.720 So? 1:18:16.280 --> 1:18:18.439 Do you collar this? Do you sell it? What do 1:18:18.479 --> 1:18:21.840 you do when suddenly the bank calls and says, hey, 1:18:21.880 --> 1:18:25.360 there's a couple extra zeros in your bank account, put 1:18:25.360 --> 1:18:28.519 it at the end of your your balance. What sort 1:18:28.560 --> 1:18:30.880 of financial response do you take to that? 1:18:31.160 --> 1:18:32.880 Well, the first thing you do is I tell everybody, 1:18:32.960 --> 1:18:37.160 is you hide it from your your wife and kids? Right, yeah, 1:18:37.240 --> 1:18:37.679 my kids. 1:18:38.040 --> 1:18:39.559 Sorry, that Robin Hood thing didn't work. 1:18:39.880 --> 1:18:43.160 My kids think I'm in trying to still disrupt bankguard. No. 1:18:43.439 --> 1:18:48.280 So the first thing you do is try and just appreciate, 1:18:48.600 --> 1:18:51.400 like you know, the good fortune. Yeah, yeah, set up 1:18:51.400 --> 1:18:51.840 the trust. 1:18:51.880 --> 1:18:53.800 Gratitude all that stuff is fantastic. 1:18:54.040 --> 1:18:57.280 Then set up the trust and you realize that you 1:18:57.360 --> 1:18:59.000 have replying to your children. 1:18:59.160 --> 1:19:01.639 Right you start moving money into various trusts. You're worth 1:19:01.680 --> 1:19:03.639 more dead than alive. You don't want them to know that. 1:19:03.920 --> 1:19:05.760 Yes, yes, yes you you he. 1:19:05.800 --> 1:19:09.880 Incentive to detach the break lines. We don't want that. 1:19:10.280 --> 1:19:13.360 I mean, there's nothing special. We as a conservative person. 1:19:13.960 --> 1:19:17.760 Do you do you color the because that's a big money. 1:19:17.479 --> 1:19:21.800 We We distributed the stock to r LPs so so so. 1:19:21.760 --> 1:19:23.360 A lot of so it's up to them to do 1:19:23.400 --> 1:19:24.120 with this goes to. 1:19:24.160 --> 1:19:26.759 Degreed at the end of the secon. Yeah, you know again. 1:19:26.920 --> 1:19:29.080 I was mentored by Fred Wilson. We've been joking. 1:19:29.200 --> 1:19:30.240 Fred says, hit the bit. 1:19:30.520 --> 1:19:33.080 Fred is always because he went through nineteen ninety nine, 1:19:33.200 --> 1:19:34.519 He's not he went through. 1:19:34.600 --> 1:19:35.880 He's not looking to optimize. 1:19:36.040 --> 1:19:38.000 He's not looking to optimize. 1:19:38.120 --> 1:19:42.520 That is the regret minimization strategy. That's what Fred deploys. 1:19:42.720 --> 1:19:45.040 I've made a few mistakes in my life and investing 1:19:45.120 --> 1:19:47.760 that Fred laughs at or not laughs, but I appreciate you. 1:19:48.479 --> 1:19:51.920 And there do you think where I've optimized over optimized 1:19:51.920 --> 1:19:55.200 for entry? Right? Okay? Fred has always said if everything 1:19:55.240 --> 1:19:57.720 lines up optimized, don't worry. 1:19:57.439 --> 1:19:59.519 About it, optimize for exit. 1:19:59.760 --> 1:20:03.599 So so I've always optimized correctit, meaning I'm never going 1:20:03.680 --> 1:20:06.040 to sell the top right, and I'm generally going to 1:20:06.120 --> 1:20:07.240 sell on the way out. 1:20:07.439 --> 1:20:09.320 You don't even get a ribbon when you top to 1:20:09.479 --> 1:20:12.360 I've top ticked two stocks in my life when I 1:20:12.400 --> 1:20:16.360 was on a trading desk. You don't ring the ball exchange, 1:20:16.520 --> 1:20:18.880 no one, No one gives you a plaque. It's like, oh, 1:20:18.920 --> 1:20:20.240 that was a lot of efforts for nothing. 1:20:20.320 --> 1:20:23.040 So our job is to return capital as fast as 1:20:23.040 --> 1:20:23.360 we can. 1:20:23.479 --> 1:20:24.000 You did that. 1:20:24.160 --> 1:20:26.599 There's a there is a thing in the venture industry 1:20:26.640 --> 1:20:28.600 that's kind of a joke, which is you know I 1:20:28.800 --> 1:20:31.639 R R. Well, y r R might mean something if 1:20:31.640 --> 1:20:33.559 you're returning cash, right, so. 1:20:33.479 --> 1:20:37.000 The eternal rate of return, yes, but you're returning actual share. 1:20:37.080 --> 1:20:41.160 So in our thing, it's dollars return, so it's DPI, 1:20:41.640 --> 1:20:44.360 and so the higher your DPI, now your I R 1:20:44.479 --> 1:20:46.479 R is what matters. When you have a five to 1:20:46.520 --> 1:20:49.280 ten DPI and you've returned that much cash on cash. 1:20:49.560 --> 1:20:52.080 People return your calls. So I was mentored by the 1:20:52.080 --> 1:20:54.360 people that said, focus on DPI. So if you have 1:20:54.400 --> 1:20:57.960 a chance to return your cash, you if you return 1:20:58.000 --> 1:21:01.000 your cash in twenty sixteen, we returned some cash in 1:21:01.080 --> 1:21:05.040 robin in twenty sixteen, very early. But say those LPs 1:21:05.080 --> 1:21:09.040 bought bitcoin, right, they did, okay, Meaning my job isn't 1:21:09.080 --> 1:21:11.880 to manage their money. My job is when when I 1:21:12.040 --> 1:21:15.200 entered a company, I said, if this gets to a billion, 1:21:16.760 --> 1:21:19.120 I got to sell some and it got to a billion. 1:21:19.160 --> 1:21:21.439 You can't change. Yeah, of course you can change. But 1:21:21.520 --> 1:21:24.240 I'm an early stage investor. I mean sell everything. 1:21:24.360 --> 1:21:26.960 You sold a little bit to take some house money 1:21:27.040 --> 1:21:29.839 off the table. You still had a big slug waiting 1:21:29.960 --> 1:21:31.320 to see if it did any better. 1:21:31.439 --> 1:21:35.400 Yes, and it did so even from there, it's thirty five. Oh, 1:21:36.160 --> 1:21:39.919 it's unbelievable. Now we made the decision and our LPs 1:21:39.960 --> 1:21:42.320 agreed that we are as soon as we can sell, 1:21:42.479 --> 1:21:45.040 we will return the shares to the LPs. Let them 1:21:45.040 --> 1:21:47.559 decide me. They have their own tax problem, LP, they 1:21:47.560 --> 1:21:50.280 have their other issues. Let us return the stock market. 1:21:50.640 --> 1:21:53.000 They want to hold it, they can hold it for me. 1:21:53.240 --> 1:21:56.320 What are the rules for early events pre IPO investors 1:21:56.360 --> 1:22:00.719 six months, so you basically give them pre ip shares. 1:22:01.000 --> 1:22:03.160 No, we give them we have to wait legally for 1:22:03.320 --> 1:22:05.840 the shares to be cleaned up. We cleaned them up 1:22:06.479 --> 1:22:09.760 day one. Give them their shares, their free trading can 1:22:10.120 --> 1:22:12.200 hold them and give them to their kids. That's not 1:22:12.280 --> 1:22:14.640 our job. We distributed market. 1:22:14.360 --> 1:22:16.120 And the IPO was one twenty twenty one. 1:22:16.280 --> 1:22:18.880 Yeah, late twenty twenty one. Now, a lot of people 1:22:18.920 --> 1:22:21.800 around this time started cutting up their funds like Andresen 1:22:21.920 --> 1:22:25.120 and Sequoia to be permanent capital. These are the signs 1:22:25.160 --> 1:22:28.080 of the top where they're like, hey, we now have 1:22:28.120 --> 1:22:31.519 an evergreen fund that will hold these stocks. You know. 1:22:31.680 --> 1:22:34.519 So there were all these signs late twenty one one. 1:22:34.800 --> 1:22:36.200 That's not a great call there. Yeah. 1:22:36.439 --> 1:22:40.719 So so again, you know, we consistently try and return capital. 1:22:41.000 --> 1:22:41.800 That is our job. 1:22:42.520 --> 1:22:45.920 So all told, your experience with robin Hood ended up 1:22:45.960 --> 1:22:48.840 being pretty pretty pretty good. 1:22:49.040 --> 1:22:52.800 Yeah, pretty good. We had a few other ones, but ye, Robinhood. 1:22:53.120 --> 1:22:55.960 What was fun about Robinhood is that we saw other 1:22:56.000 --> 1:22:58.640 people didn't like it, and that still goes to our 1:22:58.640 --> 1:23:01.840 strategy today is when you're betting on people, you have 1:23:01.920 --> 1:23:05.360 to have domain experience which we had in Robinhood. We 1:23:05.479 --> 1:23:07.559 have to get the timing right. That's a little bit 1:23:07.560 --> 1:23:10.280 of luck. The world was ready for an app like this. 1:23:10.520 --> 1:23:12.519 And then the pandemic certainly didn't hurt. 1:23:12.439 --> 1:23:16.360 Didn't hurt, but the execution that they had early was fantastic. 1:23:16.360 --> 1:23:20.640 Really quite fascinating. So I have a very vivid recollection 1:23:20.760 --> 1:23:25.920 of you being on my partner's podcast, Compound and Friends, 1:23:26.040 --> 1:23:28.960 Josh Brown and Michael Batnick, and I want to say 1:23:28.960 --> 1:23:31.479 it was like October twenty one, is that about right? 1:23:32.000 --> 1:23:35.559 And you're like, the market screaming higher, We're up from 1:23:35.600 --> 1:23:39.720 the lows. At the end of March twenty twenty the 1:23:39.720 --> 1:23:42.880 markets up sixty eight percent for a calendar year, and 1:23:42.960 --> 1:23:45.840 twenty twenty one the S and P five hundreds up 1:23:45.840 --> 1:23:49.400 twenty eight percent. And you couldn't have been more uncomfortable. 1:23:49.439 --> 1:23:52.759 You just said, wherever you look signs of problems coming. 1:23:53.200 --> 1:23:56.160 What were you seeing in October twenty one that made 1:23:56.280 --> 1:23:58.639 you and not just public markets. You were talking about 1:23:59.120 --> 1:24:04.280 private marketaluations, demands from founders and startups. Like everything you 1:24:04.360 --> 1:24:05.640 said was bubblicious. 1:24:06.000 --> 1:24:07.760 So earlier in the year, in April, you know, I 1:24:07.840 --> 1:24:11.320 rarely do serious interviews, and I came on Joe's podcast 1:24:11.360 --> 1:24:12.680 with Tracy and they were great and they were like 1:24:12.720 --> 1:24:15.519 asking me questions and it went I was like, you know, 1:24:16.040 --> 1:24:19.439 this is stupid. And we had raised one hundred million 1:24:19.479 --> 1:24:21.800 in late twenty twenty one. Again we went from six, 1:24:21.840 --> 1:24:23.800 as I said, to twenty to forty one hundred. That 1:24:23.960 --> 1:24:27.760 hundred was easy really, So when it was easy, it 1:24:27.840 --> 1:24:31.360 was like it was like it was like the Costanza 1:24:31.479 --> 1:24:33.679 venture capital. At that point, I'm like, this has been 1:24:33.720 --> 1:24:36.719 so hard for us. We're good. Why are the people 1:24:37.000 --> 1:24:39.840 giving us one hundred What have we done to deserve this? 1:24:39.960 --> 1:24:42.880 So we was kind of like castandzing ourselves, and so 1:24:42.920 --> 1:24:45.439 we stopped writing checks, which is one of our best decides. 1:24:45.479 --> 1:24:47.360 So wait, hold on a second before we get to that. 1:24:47.680 --> 1:24:49.960 So you raise one hundred million, now you have a 1:24:50.040 --> 1:24:52.519 track record that's you know, Robin Hood. 1:24:52.320 --> 1:24:54.000 Or people wired us money. 1:24:54.040 --> 1:24:58.600 So was this there's too much money around people have 1:24:58.680 --> 1:25:01.800 become reckless with their ca capital or is this a 1:25:01.800 --> 1:25:05.200 little imposter syndrome. Hey we're good, but we're not that good. 1:25:05.240 --> 1:25:07.720 This is a problem. Or a little bit of everything. 1:25:07.400 --> 1:25:10.280 A little bit of everything plus a lot of it's 1:25:10.280 --> 1:25:13.280 not my own money. Right, and I'm conservative, and I'm like, 1:25:13.520 --> 1:25:17.439 nothing makes sense to me, and I'm getting three minutes 1:25:17.479 --> 1:25:21.000 to decide on a deal. We're still doing business on zoom. 1:25:21.080 --> 1:25:24.439 I'm not a zoom guy, right, I just like this. 1:25:24.720 --> 1:25:26.599 You need to see people's body line. 1:25:26.720 --> 1:25:29.559 I can't take three months to do it now, meaning okay, 1:25:29.680 --> 1:25:31.800 I lose Stille in three months. But like, shouldn't I 1:25:31.800 --> 1:25:33.680 have dinner with you? Shouldn't I see if you're like 1:25:34.000 --> 1:25:36.400 treat the staff well? Shouldn't I see what your co 1:25:36.479 --> 1:25:39.479 founder looks like. I don't even know how tall you are. 1:25:40.040 --> 1:25:42.960 So again, God bless the people that wrote checks. So 1:25:43.040 --> 1:25:45.599 my partner Gary wrote a few good checks during COVID 1:25:45.800 --> 1:25:46.400 I didn't. 1:25:46.720 --> 1:25:52.240 So starting in early twenty twenty one, the social leverage 1:25:52.280 --> 1:25:53.480 bigot is shut. 1:25:53.200 --> 1:25:56.360 Off almost in twenty twenty because March twenty twenty I 1:25:56.400 --> 1:25:59.040 start the podcast and there was so much opportunity in 1:25:59.120 --> 1:26:02.000 the public market right that it was saying, how are 1:26:02.000 --> 1:26:05.080 you not buying these stocks? What are you worried about 1:26:05.080 --> 1:26:07.800 private markets when you can make ten x on a 1:26:07.840 --> 1:26:12.240 public stuff with liquidity? So I lost. I got lost 1:26:12.240 --> 1:26:14.960 in the public markets. And of course you know, some 1:26:15.000 --> 1:26:17.880 cool companies got funded. But really those first three months 1:26:17.920 --> 1:26:21.240 of COVID were like you would like a motorcycle accident, 1:26:21.320 --> 1:26:23.479 You get up and you go, we're not dead. And 1:26:23.560 --> 1:26:25.519 so it wasn't like I was in the mood of 1:26:25.600 --> 1:26:28.839 check writing. But by like June of twenty twenty, market 1:26:28.880 --> 1:26:31.760 was open, baby, and people were writing checks right. And 1:26:31.880 --> 1:26:34.639 for a couple months I was excited. You write checks, 1:26:34.680 --> 1:26:38.280 We have money, people love us, we know what we're doing. 1:26:38.840 --> 1:26:41.040 So we wrote a few checks. But then I like, 1:26:41.080 --> 1:26:42.360 by the end of the year, I'm. 1:26:42.200 --> 1:26:43.920 Like, this has gotten crazy. 1:26:44.160 --> 1:26:47.280 The prices were tripling, and people would be that on 1:26:47.360 --> 1:26:50.160 treason line. Hey, if you're going to make a thousand 1:26:50.240 --> 1:26:52.759 on your money, what's the difference if you paid triple 1:26:52.920 --> 1:26:54.920 on the opening price. But that math, if you really 1:26:54.960 --> 1:26:57.519 put it in a calculator, becomes a problem. Becomes a 1:26:57.560 --> 1:27:01.400 problem just if you're wrong. Because now the IRR, which 1:27:01.400 --> 1:27:06.160 doesn't important to me, is important. If you've invested someone's 1:27:06.200 --> 1:27:09.200 money and it takes three extra years, you're not going 1:27:09.280 --> 1:27:11.920 to beat anybody, right. And so my job is not 1:27:12.280 --> 1:27:15.439 just about DPI. It also is about IRR because I'm 1:27:15.439 --> 1:27:17.879 going to put your money to work. The clock starts ticking, 1:27:18.640 --> 1:27:21.519 and you know, delaying an exit three years is a 1:27:21.560 --> 1:27:25.599 real thing. So the risk I just felt the asymmetric risk. 1:27:25.920 --> 1:27:28.919 So wait, let's let's let's just talk about IRR briefly. 1:27:29.400 --> 1:27:32.400 Typical venture funds. If I commit one hundred dollars to 1:27:32.439 --> 1:27:35.320 a venture fund, a great fund, I'll get a capital 1:27:35.360 --> 1:27:40.679 call right away for right, and then the next January 1:27:40.720 --> 1:27:43.639 I'll get another call for twenty five bucks and then 1:27:43.680 --> 1:27:45.479 the fuss so maybe over the course of three four, 1:27:45.600 --> 1:27:47.960 five years, three to four years. So this way they 1:27:48.040 --> 1:27:51.120 can keep They're not sitting with your cash worrying. This 1:27:51.280 --> 1:27:54.479 is just showing zero return or back when you know 1:27:54.600 --> 1:27:57.960 the tenure was two percent. Is showing almost no return 1:27:58.880 --> 1:28:01.000 you have to worry about you can until they call it. 1:28:01.160 --> 1:28:04.200 Yeah, and so we It wasn't like a lack of 1:28:04.280 --> 1:28:07.719 seeing things, you know, because e commerce was booming after COVID, 1:28:07.920 --> 1:28:10.400 and you know, everybody was believing that, you know, the 1:28:10.439 --> 1:28:13.800 future was e commerce and it still is. But people 1:28:13.800 --> 1:28:16.080 were locked down and behaviors were changing. People as they 1:28:16.120 --> 1:28:18.240 thought that would be forever. You know, we're never going 1:28:18.280 --> 1:28:18.600 to go to it. 1:28:18.960 --> 1:28:21.799 It went from this is temporary to everything's different. 1:28:21.880 --> 1:28:24.559 Now we will see the future, right, And I didn't 1:28:24.560 --> 1:28:28.080 see the future the same way because I live in Arizona. 1:28:28.200 --> 1:28:30.719 I was hiking. Phoenix wasn't closed. There was no clue 1:28:30.680 --> 1:28:35.240 to Phoenix. Sure so, and what happened is this phenomena 1:28:35.280 --> 1:28:37.800 of what took four years. The bcs were putting one 1:28:37.840 --> 1:28:39.880 hundred percent of the money to work in twelve months 1:28:39.920 --> 1:28:42.599 out raising their next fund. So there was a lot 1:28:42.600 --> 1:28:45.719 of fomo. And I have to admit that the fomo 1:28:45.960 --> 1:28:49.080 for sure caught up with me personally, so as schmuck 1:28:49.120 --> 1:28:53.000 insurance against me not writing checks, I did write. And 1:28:53.000 --> 1:28:55.720 I remember Packy being on Joshua Sure and I was 1:28:55.720 --> 1:28:56.680 making fun of the whole thing. 1:28:56.720 --> 1:28:57.400 Paki is great. 1:28:57.439 --> 1:28:59.240 I have twenty five K in one of his funds, 1:28:59.240 --> 1:29:01.040 and I was yelling at him. I'm like, you know, 1:29:01.080 --> 1:29:02.960 I gave you money. It didn't mean to just blow 1:29:03.000 --> 1:29:03.839 it in a casino. 1:29:04.080 --> 1:29:07.679 For people who don't know who pack he is, just. 1:29:07.760 --> 1:29:11.439 Give He's just a really smart young. 1:29:11.240 --> 1:29:14.439 Guy, got very young. He watched his first fund right 1:29:14.479 --> 1:29:15.799 into the teeth of the mess. 1:29:16.040 --> 1:29:19.360 Yeah, and so he was. He was really a fun thinker. 1:29:19.439 --> 1:29:21.719 And again we were all locked around house reading smart people, 1:29:22.400 --> 1:29:24.800 and he had good opinions and he was into crypto, 1:29:24.840 --> 1:29:26.799 and I'm not into crypto, so I said, I started 1:29:26.800 --> 1:29:29.559 placing personal bets with money that I had made just 1:29:29.600 --> 1:29:32.439 in case I was wrong, but not my LP's money. 1:29:32.520 --> 1:29:36.280 I wasn't willing to make crazy bets with LP's money 1:29:36.320 --> 1:29:38.600 that just goes to social This is what we called. 1:29:38.320 --> 1:29:42.360 The fun account pull off five percent trade away. If 1:29:42.400 --> 1:29:44.639 you blow it up, who cares. It's a small part. 1:29:44.640 --> 1:29:46.880 So one of the insts I got from my schmuck 1:29:46.920 --> 1:29:49.960 insurance money is that no, I was a schmuck for 1:29:50.040 --> 1:29:52.040 writing the checks, and the people that I gave the 1:29:52.080 --> 1:29:54.000 money to God blessed him as smart as they were. 1:29:54.880 --> 1:29:57.880 I think we're schmucks too, not like bad people, just 1:29:58.120 --> 1:30:01.840 caught up in the moment. Evaluations don't matter. 1:30:01.960 --> 1:30:05.760 But that's why we have schmock insurance and don't use 1:30:05.800 --> 1:30:09.519 our LP's money for these dumb ideas. At times when 1:30:09.560 --> 1:30:12.599 you think this isn't gonna work out, Yeah, but I can't. 1:30:12.720 --> 1:30:14.439 I feel like I have to still be in the game. 1:30:14.560 --> 1:30:16.479 Yeah. I feel our best work as a firm was 1:30:17.560 --> 1:30:20.040 not writing even though we had great returns for our 1:30:20.080 --> 1:30:23.559 first funds, I feel our best work was not writing checks. 1:30:23.560 --> 1:30:25.000 In twenty one and twenty two. 1:30:25.160 --> 1:30:28.479 That's what Buffett says is, you know, unlike the public markets, 1:30:28.520 --> 1:30:31.120 where you have to be invested, you could stand at 1:30:31.160 --> 1:30:33.200 the plate with the bat at your shoulder and not 1:30:33.320 --> 1:30:34.160 take a swin. 1:30:34.160 --> 1:30:38.200 Now and Treason's defense, he would argue for your timing 1:30:38.240 --> 1:30:41.559 the market. And so again, I don't know if it's 1:30:41.640 --> 1:30:43.120 right or wrong. And in a way I did time 1:30:43.200 --> 1:30:45.800 the market, and so maybe I just got lucky. But 1:30:46.280 --> 1:30:49.599 my beef for the last six months, and it's quite public, 1:30:49.640 --> 1:30:52.519 my beef is with my own industry, is that they 1:30:52.560 --> 1:30:56.000 were talking out of both sides, meaning they were writing 1:30:56.080 --> 1:31:01.400 those checks and then also say fed stupid things are overvalued, 1:31:01.400 --> 1:31:03.040 and I'm like, you can't have it both ways. You 1:31:03.080 --> 1:31:03.840 should have been. 1:31:03.720 --> 1:31:08.679 More so that what did you see in twenty twenty 1:31:08.720 --> 1:31:12.680 one that you thought was egregious and ridiculous? What were 1:31:12.720 --> 1:31:16.200 the signposts that led you to say this is just 1:31:16.320 --> 1:31:16.840 out of hand. 1:31:17.360 --> 1:31:21.360 Well, not meeting founders and just assuming that you could. 1:31:21.120 --> 1:31:23.200 Create twenty one at that point. Oh, it was worse 1:31:23.240 --> 1:31:25.320 because we were wide. You know, we're pretty open. By 1:31:25.360 --> 1:31:27.080 twenty one, we were open, but. 1:31:27.200 --> 1:31:30.400 The money was raised and being deployed, and no one 1:31:30.560 --> 1:31:34.080 was taking their time. Everybody felt like get this money, 1:31:34.160 --> 1:31:38.160 ye rush, and the LP's had it, the GPS had it, 1:31:38.400 --> 1:31:41.160 the media had it. And don't get me wrong, I 1:31:41.240 --> 1:31:44.639 had it, but I didn't have it with other people's money. 1:31:44.640 --> 1:31:47.200 I had it with my own money. So we probed right, 1:31:47.280 --> 1:31:49.760 Like I gave money to a lot of young managers 1:31:49.840 --> 1:31:52.360 just to see because I was a young manager myself. 1:31:52.800 --> 1:31:56.280 But that was like sixty seven years ago, right, you 1:31:56.320 --> 1:31:58.479 haven't been a young manager since World War Two. 1:31:58.600 --> 1:32:00.639 So no, but you know, and O five six, when 1:32:00.640 --> 1:32:02.479 I started wall strip and got the bug, I was 1:32:02.520 --> 1:32:05.360 in my you know, I hadn't seen that much. So 1:32:05.400 --> 1:32:07.880 maybe I didn't know what was going on. Maybe I'm 1:32:07.960 --> 1:32:11.120 the old guy. And so as I said, to keep 1:32:11.160 --> 1:32:14.080 that social leverage going, I feel the most important part 1:32:14.080 --> 1:32:16.840 of being an angel investor and I don't consider myself 1:32:16.880 --> 1:32:19.640 a venture capitalist. I consider myself a seed kind of more. 1:32:19.720 --> 1:32:24.920 An angelure is you have to invest, can't just commentate. 1:32:25.960 --> 1:32:28.960 And so by investing, that helped me see how dumb 1:32:29.000 --> 1:32:33.320 I was. And it's not that other people are dumb. 1:32:33.439 --> 1:32:37.000 That the markets are markets and they're open, but you 1:32:37.040 --> 1:32:41.040 could see the mistakes piling up and now here is 1:32:41.080 --> 1:32:41.679 where we're at. 1:32:41.760 --> 1:32:44.840 So so you put a couple of percent of you. 1:32:44.880 --> 1:32:48.679 Yeah, we've deployed thirty percent now but three year old fund. 1:32:48.800 --> 1:32:52.880 But but last year, with your own pocket, you put 1:32:52.880 --> 1:32:55.440 a couple of percent of your net worth. Oh yeah, 1:32:55.600 --> 1:32:58.320 what you call schmuck insurance is just hey, I'm just 1:32:58.400 --> 1:33:00.759 keeping a toe in the water. You didn't any big 1:33:00.920 --> 1:33:01.799 crazy bets. 1:33:02.000 --> 1:33:05.320 No, And I got very lucky because robin Hood benefited 1:33:05.320 --> 1:33:08.879 from covid E Toro. I also was an early investor 1:33:08.920 --> 1:33:11.680 in a couple of crypto funds that had Salana. So 1:33:11.720 --> 1:33:18.400 I mean, I was a lucky participator in this boom, 1:33:18.760 --> 1:33:23.280 which made me think maybe I had to speculate to 1:33:23.400 --> 1:33:26.600 just keep the oil going. And so I made a 1:33:26.600 --> 1:33:30.519 lot of personal luckily, not like anything significant, but it 1:33:30.600 --> 1:33:33.519 taught me a lot about what the end of a 1:33:33.560 --> 1:33:35.479 cycle looks like. So we just saw it. 1:33:35.720 --> 1:33:38.080 So here we are in the second quarter of twenty 1:33:38.120 --> 1:33:42.639 twenty three. When you look around, our evaluations remotely as crazy. 1:33:42.680 --> 1:33:46.200 It was a rough twenty twenty two for both stocks, 1:33:46.280 --> 1:33:50.160 bonds and private What do you see today and what 1:33:50.200 --> 1:33:51.600 are you looking out at? 1:33:51.760 --> 1:33:54.000 It feels like like I've been talking about for a year. 1:33:54.040 --> 1:33:58.280 I'm like bond boy, I never thought i'd be I 1:33:58.400 --> 1:33:59.960 never had owned a bond or a treasure. 1:34:00.160 --> 1:34:02.360 Hey, you could get tax free munis now. I don't 1:34:02.360 --> 1:34:05.160 know if Arizona does a lot of muni writing, but 1:34:05.640 --> 1:34:07.880 you know, if after tax you're getting four to four 1:34:07.880 --> 1:34:10.960 and a half percent, that's fantastic. You haven't seen that 1:34:11.000 --> 1:34:11.559 in decades. 1:34:11.640 --> 1:34:13.679 Yeah, four years ago I invested in Max my interest 1:34:13.760 --> 1:34:16.439 my friend Gary, because he was he was aggregating. He 1:34:16.479 --> 1:34:18.960 was sending out your cash to many different accounts and 1:34:19.000 --> 1:34:22.200 getting you one percent, and I was like one percent 1:34:22.280 --> 1:34:25.280 better than zero. So I invested in that company. No, 1:34:25.360 --> 1:34:27.920 everybody made fun of that company, right, and that was 1:34:27.960 --> 1:34:30.639 a company that's now important because you can get five 1:34:30.680 --> 1:34:35.320 percent on your cash on the internet, distributed through FDIIC 1:34:35.520 --> 1:34:36.320 through many. 1:34:36.280 --> 1:34:39.320 So it's quarter million per bank. So you're way way. 1:34:39.200 --> 1:34:45.120 Below software years ago. So again like it it just 1:34:45.360 --> 1:34:48.479 by participating in the markets, you see things. But we 1:34:48.520 --> 1:34:51.759 are in a much different environment than I've ever seen 1:34:52.240 --> 1:34:55.280 now because we have so much cash raise not deployed. 1:34:56.120 --> 1:35:03.519 The money is out there the young generation, you know, 1:35:03.520 --> 1:35:08.960 it's very mobile, they're very smart, and you know, it's 1:35:09.000 --> 1:35:12.000 just a confusing time because interest rates have shot up 1:35:12.560 --> 1:35:14.960 and we're seeing the first signs of breakage, right, we're 1:35:14.960 --> 1:35:16.040 seeing things break well. 1:35:16.120 --> 1:35:18.799 Silicon Valley broke that that was kind of a crazy 1:35:18.880 --> 1:35:21.040 run on the bank that you could blame a handful 1:35:21.080 --> 1:35:23.920 of venture capitalists for starting. I think they were trying 1:35:23.960 --> 1:35:29.240 to do the right thing by their by their portfolio companies. 1:35:29.280 --> 1:35:33.240 But you know, we could have just easily rowed that out. 1:35:33.080 --> 1:35:36.920 And well, I don't give them that credit. The Silicon 1:35:36.960 --> 1:35:39.240 Valley Bank left a black hole for nine months in 1:35:39.280 --> 1:35:42.200 the bouncy and the Internet found it. And when the 1:35:42.240 --> 1:35:45.360 Internet finds it and something tips, everybody wants to take 1:35:45.400 --> 1:35:47.840 credit or not take credit for it. The Internet found 1:35:47.880 --> 1:35:51.599 a hole, right, and it just imploded. Much like game Stop. 1:35:52.040 --> 1:35:54.320 Silicon Bay Bank was the opposite of Game Stop. Game 1:35:54.320 --> 1:35:56.840 Stop had a different type of hole. There were some 1:35:56.920 --> 1:36:00.080 people showing in short interests and they had models. The 1:36:00.120 --> 1:36:02.920 hedge funds had models that turned out to be outdated, 1:36:03.160 --> 1:36:05.160 right meaning wrong. 1:36:05.280 --> 1:36:05.880 They were wrong. 1:36:06.000 --> 1:36:10.280 The models were not accounting for eight million Robin Hood 1:36:10.320 --> 1:36:13.960 people clicking a green button at the same time, and 1:36:14.000 --> 1:36:17.240 that's what created game Stop. And the same thing happened 1:36:17.240 --> 1:36:21.760 to Silicon Valley Bank and ree everybody hit withdrawal at 1:36:21.800 --> 1:36:22.480 the same. 1:36:22.280 --> 1:36:28.400 Time, Silicon Valley Bank had hedges on their long treasury 1:36:28.400 --> 1:36:33.200 positions as long duration, which the long duration trade is 1:36:33.240 --> 1:36:36.160 the wrong trade while rates are going up, so the 1:36:36.200 --> 1:36:39.720 hedges offset that and they took the hedges off. They 1:36:39.800 --> 1:36:41.600 rang the bell and gave themselves. 1:36:41.880 --> 1:36:44.880 Get said it in Wall Street. They were wreckable. They 1:36:44.960 --> 1:36:48.479 left themselves wreckable, and they were the Internet wrecked them. 1:36:48.920 --> 1:36:52.439 The GameStop hedge funds were wreckable because they didn't understand 1:36:52.479 --> 1:36:56.200 Internet scale. They hadn't seen a model that had Robinhood 1:36:56.200 --> 1:36:59.559 people pushing this button over at the same time with 1:36:59.720 --> 1:37:03.600 lever on short term options. So their three standard deviations 1:37:03.960 --> 1:37:05.479 was an old model. That was it. 1:37:05.720 --> 1:37:07.720 All right, I only have you for a handful of 1:37:07.760 --> 1:37:10.639 minutes before you have to go to your next meeting. 1:37:11.680 --> 1:37:13.960 So let's jump to our favorite questions that we ask 1:37:14.040 --> 1:37:17.559 all our guests, starting with you know, you talked about 1:37:17.600 --> 1:37:22.080 being locked down and podcasting and streaming. What were you consuming? 1:37:22.479 --> 1:37:25.200 What's been keeping you entertained over the past couple of years. 1:37:25.360 --> 1:37:27.240 Well, I'm a media guy. I'm passing about like a 1:37:27.400 --> 1:37:31.000 twenty four all these like like a great studio producing stuff. 1:37:31.040 --> 1:37:34.479 So I'm a media hound. I watch everything on Hulu 1:37:34.600 --> 1:37:37.560 I ask you. You just gave me Daisy Jones and 1:37:37.640 --> 1:37:39.760 the sixth which is fantastic. And I know the guy 1:37:39.760 --> 1:37:42.719 at Amazon that did it. I actually met at my event. 1:37:42.920 --> 1:37:45.559 He's a buddy of my bat Nicks. I bumped into him. 1:37:45.840 --> 1:37:47.799 He reached our blogs Lindsay and Palooza. 1:37:47.920 --> 1:37:49.479 Here's what's so fun about our business? 1:37:49.600 --> 1:37:53.080 So celebrities reading me, Yeah, and they like me. When 1:37:53.439 --> 1:37:54.400 people reached. 1:37:54.160 --> 1:37:55.000 Out, freaking me out. 1:37:55.479 --> 1:37:59.880 So so Ben Klimber of Odinky told me a story 1:38:00.040 --> 1:38:02.840 when I had him on the podcast that he's running 1:38:02.840 --> 1:38:06.400 this blog on watches. It's kind of but not quite 1:38:06.439 --> 1:38:08.960 a business yet. And he gets an email from some 1:38:09.120 --> 1:38:12.160 guy named John Mayer who says, listen, I want to 1:38:12.160 --> 1:38:15.120 talk to you about watches. I got a bunch of 1:38:15.160 --> 1:38:17.760 watches I'd love to have stuff by. So he calls 1:38:17.800 --> 1:38:19.519 the guy back and lo and behold, it's not some 1:38:19.640 --> 1:38:23.240 guy named John Mayer. It's the rock star John Mayer 1:38:23.840 --> 1:38:26.760 who shows up at their studio brings him back. Then 1:38:26.840 --> 1:38:30.120 he rolled heavy, wrote a big bag of watches. Now 1:38:30.280 --> 1:38:34.400 security is a little different, and they that was the 1:38:34.439 --> 1:38:38.479 first talking watches and that blew up and became a 1:38:38.560 --> 1:38:41.760 regular feature. So when you put yourself out there in 1:38:41.800 --> 1:38:46.280 the public. You have no idea what's gonna what's magic. 1:38:47.560 --> 1:38:50.599 By the way, which I was writing in public at 1:38:50.720 --> 1:38:54.840 your Coronado Island event, is where I met the guy 1:38:55.000 --> 1:38:59.679 I would eventually hire and become my partner. And he's 1:38:59.720 --> 1:39:02.160 become I'm a star. Josh Brown is the partner Rehult's 1:39:02.200 --> 1:39:05.840 Wealth Management. But for you, I never would have met Josh. Yeah. 1:39:05.880 --> 1:39:08.639 And by the way, but for me writing a blog, 1:39:08.760 --> 1:39:10.320 Josh never would have cared who I was. 1:39:10.520 --> 1:39:12.920 The best part of my job and people won't believe 1:39:12.960 --> 1:39:15.439 it because I get the money. Is that you met Josh, 1:39:15.680 --> 1:39:18.200 is that we launched thousands of people on stock puts 1:39:18.200 --> 1:39:21.840 into investing, tens of thousands of people that my kids 1:39:22.000 --> 1:39:25.160 friends call me for how to do their who to 1:39:25.600 --> 1:39:29.719 get recruited at a health tech company. Placing young people 1:39:30.120 --> 1:39:34.920 in careers is the greatest feeling in your life. The 1:39:34.960 --> 1:39:39.040 COVID nightmare of kids working from home in zoom it depresses. No, 1:39:39.120 --> 1:39:42.400 we're not. It is the biggest problem right now. But 1:39:42.560 --> 1:39:45.040 we're already off topic. In terms of media. I love 1:39:45.080 --> 1:39:48.720 it all. I don't take a Jones, give me give 1:39:48.720 --> 1:39:51.639 me another one. Beef my friends at eight twenty four, 1:39:51.680 --> 1:39:52.200 So I. 1:39:52.360 --> 1:39:55.479 Just added that is that it's very dark and interesting. 1:39:55.560 --> 1:39:57.840 Yeah, and it's A twenty five is very. 1:39:57.720 --> 1:40:00.360 Good and very old. Guy who's on it is also 1:40:00.520 --> 1:40:01.120 very good. 1:40:01.040 --> 1:40:01.400 Very good. 1:40:01.600 --> 1:40:02.599 I haven't watched it yet. 1:40:04.040 --> 1:40:06.400 So someone who reads my blog, Robbie Nandne, who is 1:40:06.400 --> 1:40:08.519 a partner at A twenty four which was like the 1:40:08.560 --> 1:40:12.920 A sixteen Z date of Media Big Studio, and he 1:40:13.040 --> 1:40:14.920 just emailed me on my blog one day, goes Dad, 1:40:14.960 --> 1:40:18.920 I'm fascinating, you know, And I'm always fascinated that smart 1:40:18.920 --> 1:40:22.559 people are reading me. And you know, longtime reader, first 1:40:22.560 --> 1:40:25.280 time commenter, you get that all the time too, and 1:40:25.320 --> 1:40:28.160 it just amazes me who reads what I write? And 1:40:28.240 --> 1:40:31.000 I'm not so fascinating and trying to meet the biggest celebrities, 1:40:31.120 --> 1:40:33.479 right the fact that Robbie is a creator and did 1:40:33.520 --> 1:40:38.360 the Romi Show, and I'm fascinated by like media because 1:40:38.400 --> 1:40:40.599 I did it like myself, and I don't know. It's 1:40:40.640 --> 1:40:45.240 like it's like, you know, with the Wizard of Oz 1:40:45.280 --> 1:40:47.320 when you meet the wizard like you knows a s 1:40:48.280 --> 1:40:52.040 getting to see behind the curtain and realizing nothing's going 1:40:52.080 --> 1:40:55.680 on behind the curtain. You have to see it to 1:40:55.760 --> 1:41:00.320 believe my CBS meeting, as stupid as it was was, 1:41:01.080 --> 1:41:03.840 to have that meaning and be in that room, you 1:41:03.880 --> 1:41:04.760 can't make it up. 1:41:04.960 --> 1:41:08.840 I picture the episode of Seinfeld where they're pitching the 1:41:08.880 --> 1:41:12.599 Seinfeld Chronicles to NBC. To me, that's the show. What 1:41:12.720 --> 1:41:15.479 something happens, that's the show. Why are you watching it? 1:41:15.479 --> 1:41:17.160 It's on television not yet. 1:41:17.120 --> 1:41:20.120 So to know that I lived it. People can't take 1:41:20.200 --> 1:41:22.760 that away from me. And to know when to meet 1:41:22.800 --> 1:41:25.680 people that create great content. And we have a documentary 1:41:25.720 --> 1:41:26.719 that you're coming to see. 1:41:27.200 --> 1:41:30.360 So this is financial advice. You can say it on the. 1:41:30.600 --> 1:41:32.840 This is not financial advice. It's going to be fantastic. 1:41:33.680 --> 1:41:36.400 By the way, we had the Dosee guy at future 1:41:36.439 --> 1:41:41.440 Proof and it's it's like curby your enthusiasm for money. 1:41:41.720 --> 1:41:45.000 It's so cringey watching this guy go from nothing to 1:41:45.360 --> 1:41:48.519 the greatest dollary and then you're watching him blow it 1:41:48.640 --> 1:41:51.479 up and you ask a screen Adam, you know what's 1:41:51.479 --> 1:41:53.960 gonna happen. You see it coming, and he is just 1:41:54.080 --> 1:41:57.800 so oblivious to what's the freight train barreling down at him. 1:41:58.080 --> 1:41:59.639 It's very hard to take your eyes. 1:41:59.760 --> 1:42:02.080 Odds me making money or getting my money back or 1:42:02.680 --> 1:42:07.439 five percent zero show Labor of Love with Chris Temple 1:42:07.800 --> 1:42:12.400 created this incredible documentary. The reviews are insane. By the 1:42:12.439 --> 1:42:14.320 time this comes out, you will know that it is 1:42:14.840 --> 1:42:18.519 by Tribeca Film Things Right, it's one for one on 1:42:18.600 --> 1:42:23.200 my movie. I have a red cashmere suit to wear 1:42:23.280 --> 1:42:27.160 to the opening. What is the goal? My t score? 1:42:27.600 --> 1:42:30.160 My testosterone score. It's a new thing that I'm launching 1:42:30.160 --> 1:42:32.000 where people wear their te score around their neck. 1:42:32.080 --> 1:42:34.560 What is the what is the launch date of this 1:42:34.760 --> 1:42:35.719 is financial advice? 1:42:35.800 --> 1:42:39.000 The opening date the Tribecca debut is in June. 1:42:39.080 --> 1:42:42.080 Oh so you still have Monster? Yeah, so so so 1:42:42.120 --> 1:42:45.479 I love media clearly. Let's let's talk about mentors. You 1:42:45.520 --> 1:42:49.800 mentioned Fred Wilson. Who else helped shape your career besides Fred? 1:42:49.960 --> 1:42:52.599 Or Is Fred really the most significant mentor? 1:42:52.800 --> 1:42:56.400 No, obviously, I mean again, I don't speak to him 1:42:56.400 --> 1:42:58.920 all the time, but he allows me to check in 1:42:58.960 --> 1:43:01.840 and ask him questions. A lot of my LPs are 1:43:01.840 --> 1:43:04.559 my mentors, even though they give me money. I'm there 1:43:04.680 --> 1:43:07.760 like I've surrounded myself like Paul Grimberg, who's chairman of 1:43:07.800 --> 1:43:10.040 Exos Bank, and I've met. 1:43:09.960 --> 1:43:13.000 Some really interesting LPs at your last event. 1:43:13.760 --> 1:43:17.160 So my LPs are my mentors. Roger Ehrenberg, Brad Feld, 1:43:18.000 --> 1:43:22.439 people that trusted me, and you know, they don't They 1:43:23.160 --> 1:43:26.200 know that I'm weird. They believe in me, but they 1:43:26.240 --> 1:43:29.120 know also that I don't know what I'm doing, and 1:43:29.200 --> 1:43:31.719 so they pick up the phone because they to this day. 1:43:31.760 --> 1:43:33.240 Do you feel like you don't know what you're doing? 1:43:33.560 --> 1:43:33.760 Yeah? 1:43:33.800 --> 1:43:36.559 Are you really that deep into the imposter syndrome thing? 1:43:36.840 --> 1:43:39.040 No, I'm not deep into it, like they've not even. 1:43:39.000 --> 1:43:40.760 I joke about it. I'm like, I don't think it 1:43:40.760 --> 1:43:43.280 really exists. He's like, no, No, you got to talk 1:43:43.320 --> 1:43:47.800 to people who want sociopaths like you, it actually exists. 1:43:48.000 --> 1:43:51.000 Yeah, I think I'm I think I don't have it. 1:43:51.360 --> 1:43:55.559 I just have been humbled ridiculously a few times. That's 1:43:55.640 --> 1:44:00.000 fair that I have to be really careful and again writing. 1:44:00.080 --> 1:44:03.960 Both private and public markets are a very humbling place. 1:44:04.040 --> 1:44:05.680 Yeah. So if I'm Elon Musk and. 1:44:05.640 --> 1:44:07.680 You have a lot to be humble about is the 1:44:07.720 --> 1:44:08.240 old joke. 1:44:08.600 --> 1:44:11.840 So if Elon Musk, what bugs me about it is 1:44:11.840 --> 1:44:14.400 is there nobody whispering in his ear that he looks 1:44:14.400 --> 1:44:16.360 like an ass. I would hope that my wife and 1:44:16.439 --> 1:44:19.839 my daughter would come to me and stop me before 1:44:19.880 --> 1:44:23.439 I embarrass myself day after day. Now, is he embarrassed? No, 1:44:23.640 --> 1:44:25.320 So again, I'm not judging. 1:44:25.040 --> 1:44:27.120 But that's just hoping that he should be. 1:44:27.439 --> 1:44:29.400 I'm hoping that my wife and my daughter who read 1:44:29.439 --> 1:44:31.760 my blog will say, you're full of yourself. You need 1:44:31.800 --> 1:44:36.160 to tone it down and guess what, they're pretty good at telling. 1:44:35.920 --> 1:44:39.160 Me that that's the importance of having some no men 1:44:39.200 --> 1:44:43.320 around you. I tweet something that's tenth as idiotic as 1:44:43.360 --> 1:44:47.559 Elon Musk, and the the tweet is barely live when 1:44:47.600 --> 1:44:51.920 bat Nick comes storming into my office, idiot, delete that. 1:44:52.880 --> 1:44:56.040 You know that you're like junior partner here and I'm 1:44:56.040 --> 1:44:56.679 the chairman. 1:44:57.560 --> 1:44:58.120 I don't care. 1:44:58.360 --> 1:45:02.479 That's the dumbest thing you have a tweet. Take that down. Okay, 1:45:02.520 --> 1:45:05.000 I don't even think about it anymore. Maybe that was 1:45:05.040 --> 1:45:08.720 my response five years ago. Now Batnick says that's a 1:45:08.800 --> 1:45:11.040 bad tweet. I'm like, okay, I don't even think about it. 1:45:11.040 --> 1:45:16.760 It's automatic. What Elon Musk needs is a Batnick. If 1:45:16.800 --> 1:45:18.760 he had a Batnick, he wouldn't have pissed forty four 1:45:18.800 --> 1:45:19.679 billion dollars away. 1:45:19.800 --> 1:45:21.439 Well, he has people cheering him on. 1:45:21.560 --> 1:45:23.880 Yeah, he's the opposite. He has anti Batnicks. He has 1:45:23.960 --> 1:45:29.760 people the soulging his worst instincts, rather than saying, that's 1:45:29.800 --> 1:45:32.160 a lot of money for a really crappy property that 1:45:32.760 --> 1:45:35.479 nobody's ever been able to monetize and its business model 1:45:35.520 --> 1:45:39.280 is awful, and you're running two or more other companies, 1:45:39.760 --> 1:45:41.799 maybe you should just keep tweeting for free. 1:45:42.120 --> 1:45:44.320 Nobody said that that. Yeah. I wrote about this recently. 1:45:44.520 --> 1:45:49.439 We wanted to disrupt television and we got television times 1:45:49.439 --> 1:45:51.920 one hundred, so we wanted we wanted to get rid 1:45:51.960 --> 1:45:54.960 of Jim Kramer. We got twenty Jim Kramer with more 1:45:55.040 --> 1:45:57.200 power than we thought. That's what they would have. Jim 1:45:57.240 --> 1:46:01.000 Kramer is lightweight compared to the Chama, David Sash and 1:46:01.160 --> 1:46:04.880 Laughing el Mos, the Peter Thiels. You just don't know 1:46:04.920 --> 1:46:07.360 if they're happy about the system blowing up. You can't 1:46:07.800 --> 1:46:11.320 tell if they like it, and I guess we shouldn't 1:46:11.439 --> 1:46:14.719 like it. I love the system. I don't think it's perfect. 1:46:15.160 --> 1:46:17.920 I love the things work. They're not working great, but 1:46:18.120 --> 1:46:20.200 relative to everywhere else, it's a miracle. 1:46:20.360 --> 1:46:23.439 Jamath turns his business into a family office. I think 1:46:23.439 --> 1:46:25.920 he's happy with it. I can't. I can't tell you 1:46:26.000 --> 1:46:30.800 about everybody else. Some of these guys, I think if 1:46:30.840 --> 1:46:33.280 their daddy's hugged them when they were younger, we could 1:46:33.360 --> 1:46:35.759 avoid it a lot. I don't know a lot of adjida. 1:46:35.800 --> 1:46:38.040 I don't want to play pop psychologists to any. 1:46:38.000 --> 1:46:40.320 No one hugged me, okay, and you worked at all? Right, 1:46:40.439 --> 1:46:43.439 that's right. I did have Jack one time saying on 1:46:43.479 --> 1:46:45.639 Twitter to one of my tweets that I needed a hug. 1:46:46.240 --> 1:46:48.479 And I think one of the proudest father moments I 1:46:48.560 --> 1:46:51.519 had was that my daughter came right into the thread 1:46:51.560 --> 1:46:55.759 and said he got plenty of hug ah. So that's awesome. 1:46:55.760 --> 1:46:59.080 When your daughter is defending you to check its dorsey 1:46:59.439 --> 1:47:02.280 on Twitter her and he disappears from the conversation. He 1:47:02.400 --> 1:47:07.920 just never responded, can't respond. My daughter destroyed him. He 1:47:07.960 --> 1:47:10.200 didn't know what he was walking into this. That was 1:47:10.240 --> 1:47:12.760 my problem with Twitter. I go, Jack, you don't know 1:47:12.800 --> 1:47:15.080 how to use your own product. My twenty four year 1:47:15.160 --> 1:47:18.599 old daughter just shamed you off your own product. That's 1:47:19.320 --> 1:47:21.720 she's a great girl. Like she's great. She lives Upper East, 1:47:21.760 --> 1:47:23.799 so I'm really proud she's here. One of the proudest 1:47:23.840 --> 1:47:26.320 things I have. Yeah, So one of the proudest things 1:47:26.320 --> 1:47:28.719 I have is my daughter lives in New York living 1:47:28.800 --> 1:47:31.960 the entrepreneur as a father who's an entrepreneur, an American 1:47:33.120 --> 1:47:35.760 born Canada, but an American. To see to have your 1:47:35.840 --> 1:47:39.880 daughter live in New York, the entrepreneurial city in America, Huh, 1:47:40.000 --> 1:47:44.640 this is that's good, Daddy, she likes New York. You 1:47:44.680 --> 1:47:46.439 want your kid to like New York. 1:47:47.240 --> 1:47:51.760 You it's not for everybody. I try it, but right, yeah, 1:47:52.120 --> 1:47:55.240 or any large city like Chicago or my I. 1:47:55.280 --> 1:47:58.439 Was not the same city. New York is closest to 1:47:58.479 --> 1:48:00.960 being the same city. Ain't the same city. 1:48:01.320 --> 1:48:03.640 That's really interesting. Let's talk about books. What are some 1:48:03.680 --> 1:48:05.280 of your favorites. What are you reading right now? 1:48:05.479 --> 1:48:06.840 I have not read a lot of books in the 1:48:06.920 --> 1:48:10.880 last twenty years. Three books that define that I still 1:48:10.920 --> 1:48:15.880 remember vividly and as the Agasy book. Ob Yeah, the 1:48:16.600 --> 1:48:20.120 Shoe Dog Book, which is going to spawn one hundred movies, obviously, 1:48:20.200 --> 1:48:20.879 just his first. 1:48:20.880 --> 1:48:23.360 Yeah, that was that was good. It was good. I 1:48:23.400 --> 1:48:25.000 don't know if i'd call it great, but it was so. 1:48:25.520 --> 1:48:28.160 It was a business book, yeah, Meaning if you're an 1:48:28.240 --> 1:48:32.320 internet entrepreneur and haven't read Shoe Dog, you're not going 1:48:32.360 --> 1:48:34.400 to be a good entrepreneur. To see that he went 1:48:34.479 --> 1:48:36.759 ten years before he got to ten million in sales. 1:48:37.040 --> 1:48:40.320 These kids today with their global growth in the first week. 1:48:40.400 --> 1:48:42.960 So No Shoe Dog was great. Reminiscent of Stock Operator 1:48:43.080 --> 1:48:45.840 was great. There's just not that many books that I get. 1:48:46.000 --> 1:48:49.479 Hey man, that's that's three solid books right there. You're 1:48:49.520 --> 1:48:52.000 okay with it. Our last two questions, what sort of 1:48:52.040 --> 1:48:55.439 advice would you give a recent college grad interested in 1:48:55.479 --> 1:48:59.320 a career in either seed investing or venture capital. 1:48:59.560 --> 1:49:01.960 Well, first, be nice to your parents because you're gonna 1:49:01.960 --> 1:49:06.400 need capital, right, and the first thing is right, stop 1:49:06.439 --> 1:49:08.559 thinking about who's reading it. You know, we're an investment 1:49:08.600 --> 1:49:11.680 in Beehive, which is like a newsletter writing product, or 1:49:11.720 --> 1:49:13.479 whether you're going to do it on mirror wherever you're 1:49:13.520 --> 1:49:17.040 going to or Twitter wherever it's easiest. Start writing and 1:49:17.080 --> 1:49:21.400 stop worrying about who's reading it. Write what you want 1:49:21.400 --> 1:49:25.200 to write about, and that's how you build a domain experience. 1:49:25.240 --> 1:49:28.439 You have to have be passionate about something because that 1:49:28.600 --> 1:49:31.280 will help you see around corners. Whether if my son 1:49:31.400 --> 1:49:34.479 is golf for my daughter she's not quite sure yet. 1:49:34.520 --> 1:49:38.519 It's New York and it's like operations. If you don't 1:49:38.560 --> 1:49:41.439 do it and do it you can't possibly know that 1:49:41.479 --> 1:49:43.360 you're going to be good at it. So the faster 1:49:43.520 --> 1:49:46.160 you figure out something that you want to do, And 1:49:46.200 --> 1:49:49.920 I think the easiest thing to do is write that's 1:49:49.920 --> 1:49:52.519 something that people should do. The second most important thing 1:49:52.600 --> 1:49:55.280 is forget about the job title. Go work at a 1:49:55.360 --> 1:49:59.160 company whose product is flying off the shelf. So when 1:49:59.200 --> 1:50:00.800 we were kids, you and I and I was a 1:50:00.800 --> 1:50:03.719 stockbroker and whatever your first job was. You're a lawyer. 1:50:04.680 --> 1:50:09.760 Our job was to just follow directions right right, Like 1:50:09.960 --> 1:50:12.880 our job was simply you get out there and you 1:50:12.960 --> 1:50:15.479 follow this rule book and you make two hundred calls 1:50:15.520 --> 1:50:18.519 a day and so and so and so and so 1:50:19.360 --> 1:50:20.960 you know what I mean, like pick up that phone. 1:50:21.000 --> 1:50:22.600 We've seen the movies. Wait a minute, what's the. 1:50:22.600 --> 1:50:24.680 Question you used to get a grid? How many do 1:50:24.760 --> 1:50:25.719 an axe every call? 1:50:25.800 --> 1:50:28.160 And I forget the question? Yeah, what's the question? 1:50:28.360 --> 1:50:30.479 So what advice would you give these kids who want 1:50:30.479 --> 1:50:32.560 to start out? And see it our VC investments. 1:50:32.600 --> 1:50:36.640 So so the thing is you've got to go and 1:50:36.720 --> 1:50:39.160 not worry about the title. So that if you're not 1:50:39.200 --> 1:50:42.679 worried about the title, go work at a company whose 1:50:42.680 --> 1:50:44.720 product is flying off the shelf. Don't go push a 1:50:44.800 --> 1:50:47.120 rock up a hill. So forget about the title what 1:50:47.160 --> 1:50:49.240 your pay is. You are going to see things that 1:50:49.280 --> 1:50:51.160 you won't see anywhere else. If you work at a 1:50:51.200 --> 1:50:54.040 company whose product is flying off the shelf, there'll be 1:50:54.120 --> 1:50:56.680 so much work to do, they'll be you won't have 1:50:56.720 --> 1:50:59.679 to hide out. You could shine because there are holes 1:50:59.680 --> 1:51:02.640 to fill. So the biggest mistake young people make is 1:51:03.080 --> 1:51:04.880 they want to just get a job for a certain 1:51:04.920 --> 1:51:08.000 salary and work at a bank. Go like, whether it's Manscape, 1:51:08.000 --> 1:51:11.080 one of our companies, or whether it was the messaging app, 1:51:11.400 --> 1:51:15.160 whatever is flying off the shelves, Get yourself in that room, 1:51:15.560 --> 1:51:18.800 Take a maintenance job, take an office manager job, but 1:51:18.920 --> 1:51:19.720 just get in the door. 1:51:20.360 --> 1:51:23.080 And our final question, what do you know about the 1:51:23.120 --> 1:51:26.799 world of seed investing that you wish you knew seventy 1:51:26.800 --> 1:51:29.320 five years ago when you were first getting started. 1:51:30.240 --> 1:51:32.519 You know, luckily, I think it's such a new thing 1:51:32.640 --> 1:51:34.720 that I don't know if there was anything. I think 1:51:34.800 --> 1:51:36.880 that the thing that I got lucky more than no, 1:51:37.200 --> 1:51:39.960 is it was just the right time right like that 1:51:40.000 --> 1:51:42.639 there was people like Fred and Roger writing and Brad 1:51:42.680 --> 1:51:44.960 Felder writing. So what do I wish I knew? 1:51:46.280 --> 1:51:48.880 And I don't mean buy Apple at two dollars. I mean, 1:51:49.280 --> 1:51:52.160 what would have been useful earlier in your career that 1:51:52.240 --> 1:51:55.480 you now feels a bit of hard won wisdom. 1:51:55.840 --> 1:51:58.200 I think I got lucky because going to the market 1:51:58.240 --> 1:52:03.280 first and exit seeing how markets crash and really seeing 1:52:04.080 --> 1:52:06.960 like how a cycle worked before I got into angel 1:52:07.000 --> 1:52:09.720 investing was actually lucky. So I would say to those 1:52:09.720 --> 1:52:11.960 people who think they want to be seed investors, is 1:52:12.040 --> 1:52:15.360 open a Robinhood account, even if it's one like learn 1:52:15.520 --> 1:52:18.400 what it feels like to lose money. Learn what it 1:52:18.400 --> 1:52:22.040 feels like to both make money and feel you for 1:52:22.080 --> 1:52:24.640 it right and feel like you're an idiot, and that 1:52:24.720 --> 1:52:27.599 will get you a feel and now you know. Obviously 1:52:28.040 --> 1:52:30.200 you can go to Vegas or go on draftings and 1:52:30.240 --> 1:52:33.120 get the same thing. But those are very much not 1:52:33.240 --> 1:52:35.200 positive expectancy type things. 1:52:35.040 --> 1:52:37.960 Like the stock market, whereas the market is. Yeah, Howard, 1:52:38.200 --> 1:52:42.080 thanks so much for being so generous with your time. Really, 1:52:42.120 --> 1:52:44.800 this has been a delight we have been speaking with 1:52:44.840 --> 1:52:48.880 Howard Linsen. He is the co founder of stock Twitz, 1:52:48.920 --> 1:52:52.200 the founder of wall Strip, the managing partner and founder 1:52:52.280 --> 1:52:58.160 of Social Leverage, a pre IPO investor in Facebook, in Twitter, 1:52:58.680 --> 1:53:02.720 and the really the first check into Robinhood. Is that right? 1:53:02.760 --> 1:53:07.000 That's amazing. If you enjoy this conversation, well, be sure 1:53:07.000 --> 1:53:09.680 and check out any of our previous four hundred and 1:53:09.760 --> 1:53:13.519 ninety six discussions we've had over the past eight and 1:53:13.560 --> 1:53:18.800 a half years. You can find those at YouTube, iTunes, Spotify, 1:53:19.160 --> 1:53:22.600 wherever you find your favorite podcasts. Sign up for my 1:53:22.840 --> 1:53:25.479 daily reading list at ridults dot com. Follow me on 1:53:25.520 --> 1:53:29.120 Twitter at Ridolts, Follow all of the fine family of 1:53:29.160 --> 1:53:33.880 Bloomberg Podcasts at Podcasts. I would be remiss if I 1:53:33.920 --> 1:53:36.240 did not thank the crack staff that helps me put 1:53:36.280 --> 1:53:41.680 these conversations together each week. Samantha Danzinger is my audio engineer. 1:53:42.120 --> 1:53:46.639 Harris Wold is my producer. Attika Balbrunn is my project manager. 1:53:46.920 --> 1:53:51.360 Sean Russo is my researcher. I'm Barry Ridolts. You've been 1:53:51.400 --> 1:53:57.320 listening to Masters in Business on Bloomberg Radio 1:54:00.080 --> 1:54:00.240 FO