Speaker 1: This is Master's in Business with Barry rid Hoolds on
Speaker 1: Bloomberg Radio.
Speaker 2: This week on the podcast, I have an extra extra
Speaker 2: special guest. My friend Howard Lindzen is a guest. This
Speaker 2: is a little off of our regular format only because
Speaker 2: Howard and I know each other for forever and less
Speaker 2: than a guest. Doing a Q and A is just
Speaker 2: kind of me goofing around with Howard and having a conversation.
Speaker 2: Howard has had, like, really this shockingly blessed career. He
Speaker 2: launches wall Strip in the early two thousands, and before
Speaker 2: you know it, he's in the middle of a bidding
Speaker 2: war with a bunch of different people The Street, dot Com,
Speaker 2: and CBS wanting to buy it. He rolls that cash
Speaker 2: into his next venture, which becomes a wildly successful angel fund,
Speaker 2: which now is in its fourth edition. He was a
Speaker 2: pre IPO investor in companies like Facebook and Twitter. Literally
Speaker 2: the first check in to Robin Hood, which went public
Speaker 2: in twenty twenty one at about a thirty four billion
Speaker 2: dollar valuation, So you can imagine that first check multiplied
Speaker 2: a little bit from twenty fourteen or so. I know
Speaker 2: him from Linzen Palooza, from his early media work, so
Speaker 2: strap yourself in for a fun conversation about what it's
Speaker 2: like to be at in the room where it's happening,
Speaker 2: to quote Hamilton, but to be at the intersection of
Speaker 2: media and finance and technology as the world is blowing up.
Speaker 2: I thought this conversation was fun and fascinating, and I
Speaker 2: think you will also with no further ado, my discussion
Speaker 2: with social leverages. Howard lindsay, Hello, Barry, So what do
Speaker 2: you think of these dicks?
Speaker 1: Pretty nice better than my you know, Canut is a
Speaker 1: like mcgver of sound. He's my producer, went to school
Speaker 1: together at a ISU and we have this room like this,
Speaker 1: no lights, everything's padded. It's all about sound.
Speaker 2: This is this is professional. First of all, everything at Bloomberg.
Speaker 2: The equipment is just like the best of the best.
Speaker 2: The people are great, they don't fool around. The only
Speaker 2: thing I'm waiting for in the studio is a robotic
Speaker 2: camera so we could do little video clips. But yeah,
Speaker 2: I think video but that's coming also all right, awesome
Speaker 2: if it's interesting and cool and cutting edge, these guys
Speaker 2: are right right on it. So let's talk a little
Speaker 2: bit about your background. I've known you for forever and
Speaker 2: over the course of most of that time, your work
Speaker 2: has really operated at the intersection of finance and media.
Speaker 2: How did those two ent combined? How did that come about?
Speaker 1: What they came about? Because the Internet did its thing.
Speaker 1: You know, I think they called Web two. That's when
Speaker 1: I'm very much not a technical person.
Speaker 2: The I grew up, I thought it was Web three.
Speaker 1: No, they called now, they called the now they call
Speaker 1: it web three.
Speaker 2: In the two thousands.
Speaker 1: Back in the two thousands, we were coming through that nasty.
Speaker 1: I wasn't involved in tech back then, but you know,
Speaker 1: by five, people thought, you know, we were in an
Speaker 1: everything was real estate. But in Lato five Earli oh six,
Speaker 1: YouTube came on the forefront and I saw YouTube, and
Speaker 1: I'm like, this is for whatever reason that was. There
Speaker 1: was many competitors or one hundred youtubes, but you know,
Speaker 1: the YouTube and its ilk. As soon as I saw YouTube,
Speaker 1: everything changed for me.
Speaker 2: Really Yeah.
Speaker 1: And you know before that, obviously the Apple Store of
Speaker 1: my first walking into an Apple store in seeing the
Speaker 1: iPod and being able to play with it inside the store,
Speaker 1: so I was like, oh, one oh two, But that
Speaker 1: was more hardware and music and not Internet related to me,
Speaker 1: you know, because I came from the financial background, so
Speaker 1: everything was DOS and Windows. So first year one to
Speaker 1: oh two, you have Apple and they blew out the
Speaker 1: store model, the retail model, which no one thought.
Speaker 2: And then you bother the headlines from that era about
Speaker 2: why the ice Apple store was destined to be such
Speaker 2: a failure or just hilarious.
Speaker 1: Well, because Gateway had failed, like everybody was doing it and.
Speaker 2: There was no differentiated between Dell, Gateway, HB. Apple was
Speaker 2: its own animal and they controlled their ecosystem. Very different
Speaker 2: creature then different creature.
Speaker 1: I didn't know what Apple was, even though you know,
Speaker 1: because you in the financial world you were on DOS
Speaker 1: or Windows.
Speaker 2: I was one of the few on a Mac and
Speaker 2: uh hard slogging. It was tough. Not everything was available.
Speaker 2: In fact, there was a period of time where it
Speaker 2: looked like Microsoft Office wasn't going to be made available.
Speaker 2: That would have been the death blow to Apple. The
Speaker 2: any trust case against Microsoft is the only thing that
Speaker 2: kept Apple a lot. They needed a quote unquote competitor,
Speaker 2: and now the two of them are the two Mac
Speaker 2: daddy's in the space.
Speaker 1: Yeah, I was living in Phoenix in an Apple store
Speaker 1: open up to build more and I stumbled it across
Speaker 1: the Street, never really an Apple user, and it just
Speaker 1: blew my mind the store.
Speaker 2: So that raises an interesting question. How does a kid
Speaker 2: from Arizona, from Phoenix get interested in venture investing not
Speaker 2: exactly known as a hotbed of early stage core companies.
Speaker 1: Well, I'd have to go further back. It's okay. You know,
Speaker 1: I grew up in Toronto, and I grew up born
Speaker 1: in sixty five and so in my formative years, you know,
Speaker 1: there was TV. There weren't really great video games, matel
Speaker 1: and television cal Eco. But you know, when I'm fifteen
Speaker 1: years old, Second City Television comedy was in the water.
Speaker 2: Like Chicago and Canada was a giant feeder into the US.
Speaker 2: Martin Shore. Go down the list of all the gree
Speaker 2: I grew.
Speaker 1: Up watching them live to stand up at Yack Yuck's.
Speaker 1: So there was Jim Carrey. There was a chain so
Speaker 1: much like you know you went to Stanford and got
Speaker 1: into face. You know, you went to work in tech
Speaker 1: in this generation in two thousand and I mean sorry,
Speaker 1: in nineteen eighty, I was fifteen years old. I'm sneaking
Speaker 1: into comedy clubs watching you know, Jim Carrey and Dave
Speaker 1: Thomas and you know, like everybody could show up on
Speaker 1: a night here in New York. I went to the
Speaker 1: eleven thirty show, a comedy, so just see nobody famous famous?
Speaker 2: Who was funny? I don't care who was famous? Who's
Speaker 2: you know?
Speaker 1: I don't even remember their name. There was only one
Speaker 1: out of six that I thought were funny. But you
Speaker 1: go at eleven thirty here, so hopefully that's but you
Speaker 1: hopefully go that late show to see maybe a Chris
Speaker 1: Rock or somebody shows up to actis So in nineteen.
Speaker 2: Eight, just put out a new show. So he's off
Speaker 2: the market for a while.
Speaker 1: Good point. So in nineteen eighty I would go to
Speaker 1: these clubs and that was who my idols were, and
Speaker 1: I was just you were. Second City was on television,
Speaker 1: so I had a comedy bug and you had Johnny Carson.
Speaker 1: Those were like the shows that a weird.
Speaker 2: Kid would How did that lead to woolstrip.
Speaker 1: Long and then you take a break. I moved to Arizona,
Speaker 1: go to Asu from Toronto. Yeah, from run Away from Home.
Speaker 2: Had it with this gold and snow. I'm going where
Speaker 2: the sunshines and I don't care about anything.
Speaker 1: Made that move. Loved Arizona Golf cycling obviously the weather.
Speaker 1: I go to ASU do my MBA and I graduate
Speaker 1: in nineteen the middle of the pretty bad recession, the
Speaker 1: SNL crisis. So I got my MBA eighties right, No,
Speaker 1: it's the SNL crisis, Charlie Keating, SNL boy and Golf
Speaker 1: of War breaks out right and pretty bad recession. Yeah. Yeah,
Speaker 1: So that's when I started in business and became a stockbroker.
Speaker 2: And I did not know that about you. You became
Speaker 2: who you were broken for.
Speaker 1: It was the prince. It was called the Principal, Eppler,
Speaker 1: Garon and Turner. So it was a little regional, you know,
Speaker 1: and they all got rolled up. I think eventually it's
Speaker 1: wreck Dane Rauscher, which is no royal bank, like it's
Speaker 1: you know, everything got rolled up. I got. I learned
Speaker 1: how to sell pat ryle with my first mentor you know,
Speaker 1: back then, you wore a suit, you went into work,
Speaker 1: You go to Nordstroms, you get a suit, smile and do,
Speaker 1: smile and die, you know.
Speaker 2: I worked with those guys.
Speaker 1: Yeah, and you just had there was no software, there
Speaker 1: was no uh you know, you.
Speaker 2: Just asked for a quot tron. They're like, what do
Speaker 2: you need a quote run for take up the phone.
Speaker 1: So that was my first real job. But I needed
Speaker 1: to do a job to just stay in the United States.
Speaker 1: And so even with my master's degrees, you know, back then,
Speaker 1: I needed to figure out how to stay in the US.
Speaker 1: So I became a stockbroker. Anyways, one of my cold
Speaker 1: calls became a home run. So you smiled and dowed.
Speaker 2: What do you mean one of your cold calls became
Speaker 2: a home run? So you know this by the way,
Speaker 2: I thought I knew your origin story.
Speaker 1: Now this is the real one.
Speaker 2: This is this is the Mandalorian. We're going pre Boba.
Speaker 1: Fett if it's okay, because you have to know, because
Speaker 1: it was really make your own luck. And everything's a
Speaker 1: cold call. So you know, I'm smiling dialand there's no
Speaker 1: internet to search wealth, and so you open the local
Speaker 1: business paper and there's this kid smiling holding a squeeze
Speaker 1: like a product called the Grip, and I figure he's
Speaker 1: got money, So I dial the guy. He goes, yeah,
Speaker 1: come on down, and I go on down. He pitches
Speaker 1: me right, So I'm you know, I got my MBA money.
Speaker 2: I want to do the next ground.
Speaker 1: He goes, I need twenty five grand to make payroll. Anyways,
Speaker 1: he had the stress balls.
Speaker 2: And you know, I love where the eyes pop that.
Speaker 1: No, no, no, it's just I'll get into like the details.
Speaker 1: But anyways, a beautifully con instructed stress ball called the Grip.
Speaker 1: It was four tension. It was four balloons tension wrapped
Speaker 1: around this Siberian millet.
Speaker 2: That's the technical, serious piece of hardware.
Speaker 1: Yeah, serious piece of squeeze ball. Anyways, I give him
Speaker 1: twenty five grand that I don't have, right, and I
Speaker 1: did being a stocktorker.
Speaker 2: Did you just commit to the money and then you
Speaker 2: had to go scramble?
Speaker 1: Oh I had to scramble.
Speaker 2: Okay, but you know, get into the details. We're going
Speaker 2: to find twenty five grand.
Speaker 1: From one of the last conversations I have with my dad.
Speaker 1: We never got along, but one of the last conversations
Speaker 1: I had my dad, I have an MBA. I cut
Speaker 1: this deal with Mark Scattered, who's a great founder and
Speaker 1: he's a very young guy as a fireman, who created
Speaker 1: this product. And I'm like, Dad, I found it. I
Speaker 1: need twenty five grand to get going. And my dad said,
Speaker 1: send me a business plan. I'm like, dude, I'm your son.
Speaker 1: I went to business school.
Speaker 2: He just wanted you to go through the exercise.
Speaker 1: And I didn't want it, so I scrambled my own
Speaker 1: money together.
Speaker 2: Yeah, and I like your dad's idea. You should have
Speaker 2: created a business plan just so you have it under
Speaker 2: your belt now.
Speaker 1: No, so obviously I did the business plan. I'm kidding
Speaker 1: and h but he didn't give me the money, so
Speaker 1: you could just go figure it out. And uh figured
Speaker 1: it out. Gave Mark the money. He went and paid
Speaker 1: off some bill, his MX bill, And now I'm the
Speaker 1: owner of a business that has no money again. Long
Speaker 1: story short, the product was a hit. The product is
Speaker 1: called the grip. I came in, We built out what
Speaker 1: was called this ad specialty business corporate logos, putting it
Speaker 1: on business. Long story short, the product got onto QVC
Speaker 1: and where you're in the QBC Hall of Fame, there
Speaker 1: is a QVC.
Speaker 2: How many units of this thing?
Speaker 1: Tens of millions.
Speaker 2: So just put some jingle in your pocket.
Speaker 1: Yeah, this was our first real hit pre internet.
Speaker 2: Did you ever sell that business?
Speaker 1: So the business still exists. Mark Scatted is a great entrepreneur.
Speaker 1: He's still a huge No. So I was never Lee
Speaker 1: and own. There was an escort and this is when
Speaker 1: you really This goes back to the Rodney Danshfield Back
Speaker 1: to School movie. It's like, get who's going to pay
Speaker 1: the team stairs? So we so I learned everything about
Speaker 1: business from this. We had incredible margins and software didn't
Speaker 1: basically exist back yet, and so you had a made
Speaker 1: locally made locally in Arizona. Wow. And we would sell
Speaker 1: tens of millions, and we were like the Dura Flame
Speaker 1: and everybody started copying us. But we had these incredible margins,
Speaker 1: and that's how I got involved in stocks, meaning we
Speaker 1: were making so much money you had to find a
Speaker 1: home for it. You had to find a home for it.
Speaker 1: And luckily there was a bull market. This was in
Speaker 1: the early nineties, so there.
Speaker 2: Was you still had almost a decade left before everything correct.
Speaker 1: So indirectly I became a hedge fund manager and manage
Speaker 1: our cash at the Squeeze Ball Company.
Speaker 2: At the Squeeze Ball Company, you're managing tens of millions
Speaker 2: of dollars because it's flowing in that way.
Speaker 1: Correct. So the Internet in ninety five or ninety six
Speaker 1: becomes I guess a thing, right, and I walked into
Speaker 1: Mark's office. I go Mark before then, but hold but
Speaker 1: I go mark, we got to own our domain, and
Speaker 1: so the grip was g ri ipp. So remember the
Speaker 1: first experience of the Internet was that when I tried
Speaker 1: to buy the domain, it was owned by a penis
Speaker 1: extension company called the Grip. They were squatting on the
Speaker 1: Grip's website. So here's what's fine. I didn't want to
Speaker 1: buy the domain. I'm not paying this guy for the domain.
Speaker 2: What was he asking for it?
Speaker 1: Do you remember? Honestly, I don't remember, but I was like,
Speaker 1: we'll just we'll just we'll put three p's. I don't
Speaker 1: know what my idea was. But anyways, so our product's
Speaker 1: on QVC. So we now don't have a domain name
Speaker 1: in QVC. We're like a home run product on KVC.
Speaker 1: Who's our customer Seventy year old women buying stress balls
Speaker 1: for you know, therapy, you know, squeezing, you know whatever.
Speaker 1: They were selling it as women were buying it good
Speaker 1: for and so QVC would call sin. We have hundreds
Speaker 1: of complaints from old women that are going to a
Speaker 1: website to buy your product. Again, and that's how I
Speaker 1: learned the Internet. Now that's a good origin story. So
Speaker 1: that is how I got into tech and knew what
Speaker 1: the Internet was, and then I didn't do the Internet
Speaker 1: again until two thousand and six.
Speaker 2: Wait wait, wait, wait, bro back before we're gonna not
Speaker 2: skip that deck. So you learned the lesson about a
Speaker 2: domain squad.
Speaker 1: Own your own domain, master of your door.
Speaker 2: But you did were you master of your own domain?
Speaker 1: Oh? You learned that early. You have to.
Speaker 2: But did you not stop and think, hey, there's some
Speaker 2: money to be made in gramming some domains. This guy
Speaker 2: did it to us. Let's now own taxi dot com.
Speaker 2: Or there was no Netscape browser.
Speaker 1: That's how early I remember the Netscape browser wasn't nine or.
Speaker 2: No, the IPO was ninety six, because I remember so
Speaker 2: then it was right on the cuff. I remember being
Speaker 2: on a trading desk and not being allowed to trade it.
Speaker 2: Rid Holt's you're a movie, don't don't touch that ipo?
Speaker 1: Correct? So so am my genius? Because again, I'm not
Speaker 1: an Internet 'm a car Many kid, and I'm like
Speaker 1: haphazard VC, not haphazard hedge fund. Like I'm a hap
Speaker 1: hazard VC. I mean, I didn't set out in life
Speaker 1: to be a hedge fund guy. Our business turned me
Speaker 1: into a hedge fund. I didn't set out to be
Speaker 1: a venture capitalist. I was an entrepreneur, but it pade
Speaker 1: me access. So sorry to go back to those ten years.
Speaker 1: I am now my big idea of the Internet, and
Speaker 1: a lot of people know the story in general because
Speaker 1: it happened to a lot of hedge funds or people.
Speaker 1: It's like Internet stupid. No one really is using it
Speaker 1: other than to, you know, to swear at people. It's
Speaker 1: kind of like pre Twitter. I don't nobody uses it
Speaker 1: except to like talk sex and check the weather. So
Speaker 1: you know, if anybody's going to use the Internet, the
Speaker 1: FedEx is going to benefit. So through that whole late boom,
Speaker 1: I was the guy like not owning Internet companies.
Speaker 2: But looking at logistics.
Speaker 1: Yeah, like thinking like and FedEx would go down every
Speaker 1: day for some reason. You know, I really got that
Speaker 1: first trade horrifically wrong.
Speaker 2: If you took that to its natural conclusion, then you're
Speaker 2: owning things in the nineties like Cisco and Juniper Systems
Speaker 2: and AMD and Global Crossing, which is, you know, the
Speaker 2: blocking and tackling of the Internet. But you had to
Speaker 2: have at least a little tech.
Speaker 1: I know. My problem is I grew up and try
Speaker 1: them conservative. I'm like very like fundamental, and I didn't
Speaker 1: understand the internet. Not conservative politically.
Speaker 2: No, no, no, I mean you don't strike me as
Speaker 2: somebody risk averse very really. Yeah, we'll talk more about
Speaker 2: that in a little bit. So the rest of the
Speaker 2: nineties you just sat on.
Speaker 1: Your hands, Yeah, sat on my hands, missed the Internet boom.
Speaker 1: Also didn't get killed.
Speaker 2: Right, So you come out of the crash.
Speaker 1: Just hating the market. I didn't understand the market.
Speaker 2: What's down eighty one percent between friends on the NASDAK, right,
Speaker 2: that's that's not a big deal.
Speaker 1: Didn't even know the Nasdaq basically, So what when.
Speaker 2: Did the idea for wall strip pop into your head?
Speaker 1: So now the one lucky investment that I made, and
Speaker 1: it was a dumb investment, much like you know the
Speaker 1: dumb investments people made in twenty one. So in nineteen
Speaker 1: ninety nine, Hu I invested in this. Some guy pitches
Speaker 1: me on a series Q or whatever they were doing
Speaker 1: right then of cars Direct, which was.
Speaker 2: Like I recall that cars Direct was like a.
Speaker 1: Hot late stage end of end of the bubble era
Speaker 1: where you could sell cars at a loss, but we'll
Speaker 1: do it in volume and a little bit. Yeah. Yeah,
Speaker 1: And so someone pitched me like the series Q and
Speaker 1: I was like in cash right, like I was missing
Speaker 1: the whole internet bubble. So I remember then, yeah, I'll
Speaker 1: put some money in this and that was the top.
Speaker 1: The minute my wire hit cars Direct now as an
Speaker 1: added bonus to invest in cars Direct. To induce me
Speaker 1: into car they were going to throw in this other
Speaker 1: internet company. You know sometimes you like go to the
Speaker 1: horse races and they give you like handicapped horses, like
Speaker 1: an extra for betting on one horse then.
Speaker 2: Probably won't finish the race, right, Well, they said, what
Speaker 2: did they throw in?
Speaker 1: They threw in this company, Viva dot Com.
Speaker 2: Viva.
Speaker 1: I didn't even look it up, so they said, listen,
Speaker 1: it is the two for one. Uh. Anyways, the bubble.
Speaker 2: Ends cause Direct goes.
Speaker 1: I think ten years later we sold for a few
Speaker 1: cents on the dollar or something bought it. But this
Speaker 1: Viva dot Com was run by Scott Ingram, who's a
Speaker 1: friend of mine. In an LP now and meet him
Speaker 1: at your events, probably one of our events. Anyway, Scott,
Speaker 1: Viva dot Com becomes rent which was uh means rent
Speaker 1: like it was just they couldn't they couldn't buy rent
Speaker 1: dot Com during that boom, right during the crash, he
Speaker 1: goes and buys the domain rent dot com and builds
Speaker 1: the largest, you know kind of rent marketplace, and eBay
Speaker 1: buys it for four hundred and fifty million dollars. And
Speaker 1: you were so my seed? I seed. That was my
Speaker 1: first seed win by mistake.
Speaker 2: Right and wish. There have been many seed wins.
Speaker 1: By so that was that gave me my first Internet win.
Speaker 2: Were you like a cap table owner or just a
Speaker 2: rounding air.
Speaker 1: A rounding air, But for me it was still real money.
Speaker 1: So I go and I became friends. I used to
Speaker 1: call Scott Ingram and go, how are you still alive?
Speaker 1: Like I was just like my one Internet investment, right,
Speaker 1: and he just thought I was humorous, like as a
Speaker 1: fifty k hundred k investor checking in on my investment
Speaker 1: and we would talk about the.
Speaker 2: Inillion dollar comedy. How's my ten grand doing?
Speaker 1: Yeah? So I was fascinated that a businessman could build
Speaker 1: businesses on the Internet. And so now flash forward to
Speaker 1: you know, my hedgehunk guy, I hate CNBC. I don't
Speaker 1: have money for a Bloomberg. You know, I'm just a
Speaker 1: retael Yahoo finance kind of guy.
Speaker 2: Righty, it's right?
Speaker 1: And e trade and in oh six, YouTube comes out,
Speaker 1: and I have this idea that I'm going to build
Speaker 1: going back to my comedy and going back to how
Speaker 1: I grew up and going I'm going to build CNBC
Speaker 1: on YouTube. That was it.
Speaker 2: That was my idea satirical take on financial television. No
Speaker 2: playing it straight, but I always thought there was a
Speaker 2: lot of tongue in cheek and everything you guys did correct, right,
Speaker 2: It wasn't straight up, it wasn't Second City, it wasn't
Speaker 2: supposed to be funny vin Yettes. You played it straight,
Speaker 2: but there was a subtext of, hey, this stuff's ridiculous.
Speaker 1: Correct the first show, meaning I I that's what hooked everybody,
Speaker 1: That's what hook but we never got beyond that before
Speaker 1: CBS spot up. But going back, I had this idea
Speaker 1: one show song. Yeah, I cold call Fred Wilson, who
Speaker 1: I didn't know at the Union.
Speaker 2: Square backs down here in New York.
Speaker 1: So I used to leave these whack job comments on
Speaker 1: his blog. He had this blog, and back in the day,
Speaker 1: blogs had blog rolls, you know that.
Speaker 2: Bloger had comments up until like nine. Finally I just
Speaker 2: show up.
Speaker 1: Fred was like Twitter. Everybody was there talking to Fred,
Speaker 1: and I would leave these whack job comments like what
Speaker 1: like fun, I can't believe you're giving Yeah, became the
Speaker 1: bouncer at Fred's site.
Speaker 2: You're the Motley fool then.
Speaker 1: Because I was the guy who didn't care about venture
Speaker 1: I was just there. I can't believe he's sharing all
Speaker 1: this wisdom about venture free for free. Anyways, I finally
Speaker 1: pitch him. I say, Fred, you're gonna be in Phoenix.
Speaker 1: He's never met me. I said, I'm gonna take you
Speaker 1: to a Sun's game. And this is like Internet two
Speaker 1: thousand and five. Fred was already I don't feel I
Speaker 1: was famous.
Speaker 2: He had already.
Speaker 1: He wasn't famous that he wasn't famous like he is today.
Speaker 2: Well, because post dot com implosion, nobody cared about career
Speaker 2: was the VC but they had been making money for
Speaker 2: a while.
Speaker 1: Correct. But he had done so many big deals in
Speaker 1: the first run, right, and the biggest one being I'm
Speaker 1: having a senior moment. But anyways, it'll come to me.
Speaker 1: I go, Fred, come to the Sun's game. You know,
Speaker 1: I'm trying to just become his friend, right, And he agrees,
Speaker 1: brings the Sun and we go to the Sun and Joanne,
Speaker 1: his wife, was like, Fred, you can't just go out
Speaker 1: with people on the internet. This is not that long,
Speaker 1: but Fred just we became friends. I pitched him on
Speaker 1: this idea.
Speaker 2: Nobody stalk someone for three years to murder them.
Speaker 1: They normally think about Brad and social media where we're
Speaker 1: at today.
Speaker 2: Yeah, think about how many people you know today from
Speaker 2: social media. You never would have known. It's been flipped
Speaker 2: on its head.
Speaker 1: Unbelievable. So he counts in. He kind of becomes my
Speaker 1: mentor in that, and I find out that he was
Speaker 1: Street dot COM's first I didn't even know this until
Speaker 1: after he invested, So luck would have it. Not only
Speaker 1: did he get my idea to create TMC on YouTube,
Speaker 1: he was there when Kramer was building the Street dot
Speaker 1: com and that was late nineties. Yeah, show Fred.
Speaker 2: By the way, I have said that the very first
Speaker 2: financial blog was Todd Harrison's trading diazing. That was a
Speaker 2: real time series of update embedded in the Street dot
Speaker 2: Com that you know, here's a guy who was Kramer
Speaker 2: burk Witz's trader. I mean a lot of the best
Speaker 2: trades that Kramer did as a hedge fund manager, you know,
Speaker 2: tapping out before everything went to hell in two thousand.
Speaker 2: I think that's Todd saying, listen, every risk measure we
Speaker 2: look at is terrible. I remember reading this, you gotta
Speaker 2: get out and he avoided the disaster. Full credit to
Speaker 2: Harrison on that, but real time, hey, we'll put legging
Speaker 2: into this position. He used to use the bull and
Speaker 2: Bear medical stor. I got one right exactly in all
Speaker 2: the comments, it was all live.
Speaker 1: It was Street dot Com to give credit. Was the
Speaker 1: place your blogs. Listen.
Speaker 2: I have my partner Josh Brown pulls the Street dot Com,
Speaker 2: the Motown of finance, Barry Gordy and everybody who came
Speaker 2: out of Motown. I could give you a list of
Speaker 2: one hundred people you know in finance today that trace
Speaker 2: their roots back to Street dot Com. Present company included.
Speaker 1: Yeah, and I was a customer. And I was a
Speaker 1: Kramer fan at the time because I came from the
Speaker 1: Street myself, right.
Speaker 2: And he was running a fund he was he was
Speaker 2: very active.
Speaker 1: It was like it was real. And so I find
Speaker 1: out Fred was his investor. It was like, wow, so
Speaker 1: I got the right investors. I raised six hundred grand
Speaker 1: for wall Strip, which is a lot of money, right,
Speaker 1: and and well, at then Web two hasn't wasn't really
Speaker 1: a thing.
Speaker 2: Two thousand and five. Yeah, I mean back then it
Speaker 2: was you know today everything is Amazon Cloud. It doesn't
Speaker 2: take a lot. Back then, you had to have servers,
Speaker 2: you had to have had people, you have like just
Speaker 2: building out the back.
Speaker 1: End was a massive and no revenue idea. Right, there
Speaker 1: was no infrastructure for revenue. Right, There's no ad networks
Speaker 1: and there was no so everything from So when we
Speaker 1: did an AD, we had to like make the ad,
Speaker 1: insert the ad ourselves.
Speaker 2: Like we were able to track it, be able to build it.
Speaker 1: So lucky as luck would haven't. The show was a hit,
Speaker 1: and by hit, I mean not like millions of views,
Speaker 1: because but in relative terms at that time, if you
Speaker 1: went to YouTube, it was cat videos and it was
Speaker 1: people filming their television and getting takedown notices of like
Speaker 1: dukes of hazard or whatever. So it was just a
Speaker 1: giant lawsuit.
Speaker 2: The woman you had as an anchor, ye, fantastic, Lindsay Campbell.
Speaker 2: Lindsay was awesome and she went on to go into television.
Speaker 1: When we sold, Lindsey got a part in the show
Speaker 1: that was The Errors Show, the Mob Show on HBO,
Speaker 1: The Sopranos. She was a teacher in a couple episodes.
Speaker 2: For early seventies. Your memory is really terrible. You should
Speaker 2: be a little bit.
Speaker 1: I can't log on the internet to just search IMDb
Speaker 1: basically IMDb. Are you on a screen or It's okay people,
Speaker 1: It's a thing that honestly happens that you just tip
Speaker 1: a your tongue all day long.
Speaker 2: So I have this to look forward to in ten years.
Speaker 1: You do. And by the way, I'm going to have
Speaker 1: to stand up for the last half of this because
Speaker 1: I feel like I have to pee. So so Lindsay Campbell,
Speaker 1: we found uh but what what a time? This was great.
Speaker 2: She was talk about all everything lined up perfectly at once.
Speaker 1: Yeah, and so we had this idea. This a funny story.
Speaker 1: So there Fred was a master. And Fred introduced me
Speaker 1: this is how the internet worked. Before the Internet, there
Speaker 1: was no iPhone yet, there was not even still was
Speaker 1: really coming into its own.
Speaker 2: Right, You're still a few years away. By the way,
Speaker 2: I have a vivid recollection of Lindsay and a cameraman
Speaker 2: with her holding a wired mic back to running around
Speaker 2: Lower Manhattan Midtown, asked throwing the mic on the streets? Step, Yeah,
Speaker 2: what do you think of this? And you know she's
Speaker 2: a pretty girl. People were like more than happy to
Speaker 2: talk to her. Guys in suits with today we would
Speaker 2: call them finance bros. But she would be on Wall Street.
Speaker 2: So what's going on with the markets?
Speaker 1: And the way we edited it was hysterical.
Speaker 2: That was a show.
Speaker 1: So so the idea was we're going to create CNBC
Speaker 1: on YouTube. Fred and handing me a list of eleven people,
Speaker 1: He said, Howard he didn't investor fin Yeah, he said,
Speaker 1: why do you call him? Pee? Pee peep? Roger Ehrenberg, Hey, Roger, Hey, Horod.
Speaker 1: I read your blog blah blah blah Fred Fred's investing. Uh,
Speaker 1: if you drop Fred's name, everybody wrote a check. So
Speaker 1: I go. Of course I didn't know this at the time,
Speaker 1: so I go. Fred said to give you a call.
Speaker 1: He goes, yeah, I'm in for twenty five. Hangs up,
Speaker 1: pee peep. Brad Felt, Hey, Brad. Fred Wilson said I
Speaker 1: should call it, sure, twenty five k peep. Anyways, I
Speaker 1: call Fred back like a day later, I go ten
Speaker 1: for eleven. Okay, who's the eleven. That's a funny story.
Speaker 1: So this guy Mark Pinkas who's gone on to start Zinga,
Speaker 1: and he was investor in Facebook and LinkedIn. He partners
Speaker 1: with Reid Hoffman. Fred is an investor in all his stuff.
Speaker 1: He was a name on the list. So I call,
Speaker 1: I call Mark Pinkas. I'm on a roll. I'm like
Speaker 1: god attitude. So I call Mark Pinkas picked up. He goes, Okay, hey, hey,
Speaker 1: it's Howard. Fred said to give me your number. I
Speaker 1: do the pitch. He goes, it's the dumbest idea over here.
Speaker 1: And he goes and then he goes like this and
Speaker 1: tell Fred not to give up my phone number anymore.
Speaker 1: He hangs up of it. So when I call Fred back,
Speaker 1: so I called for I don't know. That's a hard no.
Speaker 1: And anyways, if you know Mark, and I do, he's
Speaker 1: an LP. He's the friend as much as you can
Speaker 1: be a friend with Mark. He's super smart investor and
Speaker 1: started a thing. Guy I called Fred Becker. Guy, your
Speaker 1: your genius. I go, ten out of eleven people just
Speaker 1: wrote a check over a star Tek phone call pitch
Speaker 1: for an internet YouTube company. I go, I don't know
Speaker 1: what's going on here, And I said, but there's this
Speaker 1: one guy who not only thinks it's the dumbest idea,
Speaker 1: but told me not to give He said to you
Speaker 1: not to give out his phone number anymore for a laugh,
Speaker 1: just for me. He knew who was Yeah, he goes,
Speaker 1: oh that's Mark. Don't worry anyways, So told him back
Speaker 1: and he didn't say call him that. But this is
Speaker 1: a funny Mark story that I haven't told too often.
Speaker 1: Is about three months later we I never I didn't
Speaker 1: know what doc Listen. This was like a loosely the
Speaker 1: internet deals were not handshake deal like I'm a try
Speaker 1: like Fred like, this was like a two person operation.
Speaker 2: Read Sebashian Melbury's book on on the Power law and
Speaker 2: venture capital. Million dollar deals were literally done on a handshake.
Speaker 2: He'll come by Monday for a check. Well, the lawyers
Speaker 2: get the documents. It wasn't like a team of it weren't.
Speaker 1: Even standard docks. Everybody. Fred was the the He's the maestro.
Speaker 1: So I'll trust you know, I'm going to get to
Speaker 1: the docks. Anyways. It's tough, is moving very fast. YouTube's
Speaker 1: getting sued. We're distributing our video across one hundred of
Speaker 1: these YouTube channels. Anyways, three months goes in and I
Speaker 1: get a break. I get like New York Times, the
Speaker 1: Gray Lady is going to do a piece on wall strip.
Speaker 1: There were maybe getting six to ten thousand views an episode,
Speaker 1: which is not nothing, but it's nothing in today's world.
Speaker 2: In today's world. But then, oh yeah, who was getting
Speaker 2: ten thousand views in a day?
Speaker 1: Not just ten times? It was who was watching? Right,
Speaker 1: That's what I learned about the difference between audience and
Speaker 1: the right audience, right. And so Fred was We were
Speaker 1: all promoting. It was a very cute show, as you know,
Speaker 1: and I was writing in and starring in and producing
Speaker 1: it and I didn't know what I was doing, but
Speaker 1: it was the internet. Anyways. But three months go by
Speaker 1: and you know, we're doing the books. There's no revenue.
Speaker 1: The books are pretty easy to do quickly. Oh we
Speaker 1: burned thirty grand.
Speaker 2: That's called accounting.
Speaker 1: No money is coming in correct. I was wearing that
Speaker 1: hat at night. There was not much accounting to do
Speaker 1: except how many months we have left before we have
Speaker 1: to call Fred for more money. So anyways, ten you know,
Speaker 1: I'm doing the books and there's an extra so we
Speaker 1: get in the New York Times whatever, and now I'm
Speaker 1: like famous, and uh, there's an extra ten grand in
Speaker 1: our account and I'm like yelling at my team and yo, Lindsey.
Speaker 1: Did we do revenue that I don't know about it.
Speaker 2: Mark just dropped off a check and nobody.
Speaker 1: Anybody never told anybody. After he knew we were successful,
Speaker 1: sent him the tent. So I called Fred, I got
Speaker 1: this mother, you know, I called this guys like.
Speaker 2: He was the first, like at the higher valuation.
Speaker 1: Now I ended up we ended up selling the CBS
Speaker 1: long Story shirt a few months later, and he I
Speaker 1: returned multiples on that late money and we've been friends
Speaker 1: ever since. So he was like my newman at the time,
Speaker 1: you know, like in Seinfel, I'd see that Checkicoman thinkers.
Speaker 1: So so anyways, it was just that's what the Internet was.
Speaker 1: It was very cottagy, it was Web two. It was
Speaker 1: just coming out.
Speaker 2: Of such a mark of like the seventies and eighties
Speaker 2: that way you're telling me. Even in the two thousands,
Speaker 2: it was still shockingly rudimentary, rudimentary.
Speaker 1: There was no y combinator, there was no text, there
Speaker 1: was no way this y combinator. Probably seven eight that
Speaker 1: late all right, God, I think because I used to
Speaker 1: go to those events the don't want to be twenty
Speaker 1: thirty people there.
Speaker 2: I remember the nineties. If you were interested in venture capital,
Speaker 2: and you were on the East coast. The only way
Speaker 2: you could learn anything was like Fast Money or I'm sorry,
Speaker 2: a Fast company or Wired magazine, but there was really
Speaker 2: not a lot of media coverage of what was going
Speaker 2: on in the West coast.
Speaker 1: To his credits, she used to write a smart money magazine.
Speaker 1: I was a disciple, and then he started in an
Speaker 1: internet company.
Speaker 2: People don't realize he had an internet. If you're not
Speaker 2: a fan of Kramer today.
Speaker 1: Which I'm not, I'm not going to argue with.
Speaker 2: You, but you have to realize how influential and importance
Speaker 2: a player he was in the in the nineties, in
Speaker 2: the two thousands, he was really you know, between between
Speaker 2: running the hedge fund Kramer Berkoitz, between launching the Street
Speaker 2: dot com when nobody really thought, I know, let's do
Speaker 2: a real time finance site that's actually operated by people
Speaker 2: running real money, not just a bunch of ministers without portfolios,
Speaker 2: and all the time dropping in on TV doing his hits,
Speaker 2: like when he had his finger on the pulse when
Speaker 2: he was running money. He was the man for a
Speaker 2: long time. And now it's a different world, it's a
Speaker 2: different environment, and he's in a different role. But regardless
Speaker 2: of what you think of him today, you've got to
Speaker 2: give him props for what he did in the nineteen nineties.
Speaker 1: He looked away and Fred has great Kramer stories. Anyways,
Speaker 1: what made starts with a wall strip grate is, you know,
Speaker 1: we were doing five six thousand views and I had
Speaker 1: this idea to get Kramer's attention. We would spoof Kramer, right,
Speaker 1: I remember that great story. So I, so I go.
Speaker 1: I said, we can't spoof Kramer. You can't. You can't
Speaker 1: upset the guy. What we'll do is have our Kramer
Speaker 1: give cancer and medical advice. So he's going to have
Speaker 1: a show. He's going to be Kramer that people will
Speaker 1: call with medical question.
Speaker 2: Oh god.
Speaker 1: And so we got this method act. Lindsey found one
Speaker 1: of her friends who was a method actor who looked
Speaker 1: a lot like Kramer, and we said, listen, go into
Speaker 1: that room, listen to one hundred hours of Kramer, be
Speaker 1: Jim Kramer, and then we're going to create like a set,
Speaker 1: and you were going to give advice with people calling
Speaker 1: in for medical proms. Anyways, he was so mad Kramer.
Speaker 1: Oh no, he doesn't have a sense of humor like
Speaker 1: So Anyways, this leads to our acquisition. So Kramer wants
Speaker 1: to buy us to get us off the end. Oh
Speaker 1: really yeah yeah? So Street dot Com calls me after
Speaker 1: the show and goes, we'll buy you. I'm like, by me,
Speaker 1: I don't know. I was for set, like, I didn't
Speaker 1: know what I was doing. We had no revenue. I
Speaker 1: had ten grands showing up in the ether. We had
Speaker 1: nothing but expenses. Barry, it wasn't like the nineties where
Speaker 1: you had to build a business like my he was
Speaker 1: a little bit of green.
Speaker 2: Now this is like by so we'll do another parody.
Speaker 1: This is how I got into VC. So straight Tack says,
Speaker 1: we'll give you this amount of money and I say deal.
Speaker 1: Like I'm like, I'm like Kramer and Seinfeld. I'm like,
Speaker 1: just build hot coffee on me. Don't accept the first offer.
Speaker 1: I'm like, deal, Kramer, you got me. So I call
Speaker 1: Fred Wilson. I go, Fred, I go, you know, friend's
Speaker 1: my board. I go, Fred, what do I do? He goes,
Speaker 1: I didn't know you want to sell? You call them
Speaker 1: back and like he you know, Friend's like.
Speaker 2: He walked you through to Yeah, he says, I guess
Speaker 2: there's a competitive bidding.
Speaker 1: Correct Fred, Fred makes it makes a few calls like
Speaker 1: the next damn at CBS, and I have no idea.
Speaker 1: You got to understand, you know me, right, I'm literally
Speaker 1: a nobody, clueless, clueless, you know, obviously good instincts. I'm
Speaker 1: not going to completely terrorize myself, but good instincts, great
Speaker 1: people around me. Lesson number two, you've got to know
Speaker 1: your cap table. You've got to build trust. You've got
Speaker 1: to have great people around you. So I made the
Speaker 1: one call, Fred goes Howard, you want to sell, gotta
Speaker 1: have it. If you didn't know you wanted to sell,
Speaker 1: let's get blah blah blah. Actually know, I'm in CBS's
Speaker 1: office at black Rock. This table is big as Bloomberg headquarters.
Speaker 1: And you got Quincy Smith, who is a great guy. Uh,
Speaker 1: he's running CBS Interactive. And Mike Markus is a dear
Speaker 1: friend of mine.
Speaker 2: Today when wasn't marked, they had already acquired market Watch
Speaker 2: by then, right.
Speaker 1: Yeah, a long time earlier. Yeah, Bill Bishop and those guys,
Speaker 1: great guy Newby, And they go, hey, here, you want
Speaker 1: to sell. And I don't even know how to prepare
Speaker 1: for this, man, I go maybe, and they go, what's
Speaker 1: Street dot COM's number? And like I literally was no,
Speaker 1: I made up a number. Yeah, and they go, we'll
Speaker 1: double it, and I go, deal again. Agad, I've hit
Speaker 1: the table. I'm like nobody in the room with me
Speaker 1: to like stop me. And then I go, but you
Speaker 1: know what. The one thing I said, you know what,
Speaker 1: let me call my board and I remember quinc. They go,
Speaker 1: we'll wait. I'm like, I thought i'd have twenty four hours.
Speaker 1: We'll wait here, and I'm like, so I trample out
Speaker 1: of the boardroom. I call Fred on my starteker. You go,
Speaker 1: Frett CBS offered me Doublewstreet dot Com. He goes, well,
Speaker 1: do you want to do the deal? And I said, dude,
Speaker 1: I mean it's a lot of mon It's been six months,
Speaker 1: I said, I think I do. We have no revenue.
Speaker 2: I mean, I don't see how we're going to make
Speaker 2: this work. Yeah, I'm like, it's a rescue plan before
Speaker 2: we run out of month.
Speaker 1: Correct.
Speaker 2: This was, and and they have the infrastructure to monetize
Speaker 2: it if they want.
Speaker 1: To do that. I for a minute think I'm going
Speaker 1: to be famous. My and my old think me coming
Speaker 1: out of the room, I'm going to be on Letterman.
Speaker 1: I'm going to.
Speaker 2: Have a show, right, Women on the crappy little website
Speaker 2: for a.
Speaker 1: Barely I was now an executive at CBS. Right. Yeah.
Speaker 1: It was like if there was a balloon coming out
Speaker 1: of my head. I'm like, just bring me green eminem stat.
Speaker 2: So you want the green M and ms out of Yeah, And.
Speaker 1: So I call, I said, Fred, goes, walk back in
Speaker 1: there and you tell them that you won't shop the
Speaker 1: deal if they add another.
Speaker 2: Too too right, And I said.
Speaker 1: Can I do that, fredday? Because you hang up and
Speaker 1: you walk back and I go, okay, and I'm wearing
Speaker 1: like my crocs, I think, and sunglasses. I'm not prepared
Speaker 1: for this meeting. And I walked back in and I said, listen,
Speaker 1: I talked to my board and you know, for an
Speaker 1: extra two I won't shop it. And they go deal
Speaker 1: and I go, hang on, they go get the out
Speaker 1: of our offer. So that was how my deal with
Speaker 1: CBS st Oh my god, that's hilarious. And literally half
Speaker 1: my investors had not finished signing their paperwork when we
Speaker 1: returned the money, so it was just had an MBA.
Speaker 1: I was supposed to know what I was doing. I'd
Speaker 1: like to tell people, you know, people look up to me,
Speaker 1: you know, but i'd like to give the on story
Speaker 1: is what made that successful, right idea right time. I
Speaker 1: had no ego about the exit that I was building
Speaker 1: something better than anybody else. I had incredible people around me,
Speaker 1: lindsay running the show over exceeded anything that you could expect.
Speaker 1: I found these people on Craigslist, right, they were just
Speaker 1: and it was a miracle craigs on the internet, on
Speaker 1: the Internet. So I don't know, it was just one
Speaker 1: of the greatest stressful, fun interesting times in my life.
Speaker 1: And I met great people and that's kind of what
Speaker 1: got me started a point. We're out of time. Let
Speaker 1: you know now, how.
Speaker 2: I asked one question, thanks for coming. That's all the
Speaker 2: time we have the sale of woolstrip. The next step
Speaker 2: from there was that social leverage. Tell us a little
Speaker 2: bit about that.
Speaker 1: So so wallstrip. I'm working at CBS, and uh I
Speaker 1: pitched them this idea, what like my best idea I've
Speaker 1: ever had. So you know, there was this moment where
Speaker 1: I said I was going to be famous and CBS goes, Okay, Quench,
Speaker 1: she goes go meet the TV people. They're gonna love you.
Speaker 1: They did not want to meet me. So I have
Speaker 1: this idea for a show for them because they asked
Speaker 1: me to pitch them a show. I thought they bought
Speaker 1: my shot. I thought they owned me. So I stay
Speaker 1: up for three days. I'm writing furiously a show idea.
Speaker 1: And my show idea is very simple. It's like after Dark,
Speaker 1: where ever a guest comes on Letterman or their after
Speaker 1: show that that guess when I come over to this studio,
Speaker 1: the creepy studio, and there'd be a comedian and they
Speaker 1: would just talk about what's in their wallet? You know,
Speaker 1: the celebrity would talk about money. Yeah, oh okay, there
Speaker 1: would just be a show about money. Hey, show me
Speaker 1: a wallet. What credit card do you use? Have you
Speaker 1: ever been screwed by your financial manager? You know what
Speaker 1: I mean? If you got to go to Vegas and
Speaker 1: need ten grand, how do you do it right? It'd
Speaker 1: be an interesting look to how famous people spend.
Speaker 2: If you get in to eat hot wings at the
Speaker 2: same time, that's a show.
Speaker 1: That's a show. So they threw me out of the building. Yeah,
Speaker 1: and that was my end. I was so by that day.
Speaker 1: That was hard. I was Clarence Beaks from that print,
Speaker 1: Who's Clarence Beaks? I was collecting a paycheck and no
Speaker 1: job and Twitter. You know, in the background Twitter now
Speaker 1: starts and I saw Twitter and I said, this is Bloomberg.
Speaker 1: My first call was to Fred Wilson with Twitter. We
Speaker 1: were all making fun of Twitter back in the day
Speaker 1: before iPhone, you were everybody was. I was using it
Speaker 1: and I was telling people where I went to the bathroom. Hey,
Speaker 1: I took a pe at this restaurant. And the vcs
Speaker 1: thought I was funny because it was really vcs on
Speaker 1: Twitter at that time too.
Speaker 2: It was journalists and venture capitalists.
Speaker 1: So I went to friend, I said, Fred, this is Bloomberg.
Speaker 1: If I if the president ever, this is like a
Speaker 1: blog poster. When the president tweets about the economy, the
Speaker 1: market will move. And Fred goes, that's very clever. You
Speaker 1: should start a company. I go, Fred, I'm working for CBS.
Speaker 1: And that's where stock twits came out. I went to
Speaker 1: Jack and Ev at the time and I said.
Speaker 2: So, now at this time, Twitter's pretty small, and you.
Speaker 1: Walking Twitter is very small. Yeah, what is.
Speaker 2: There fifty million people on Twitter? No, not that any
Speaker 2: uh ten million people.
Speaker 1: Brew to invested. I passed on that investment call.
Speaker 2: Yeah, it was a you know, you could have sold
Speaker 2: it to some idiot for forty four billion dollars.
Speaker 1: This show is not Howard's a genius. It's called Masters
Speaker 1: and dismals. You have to have losses to become a master.
Speaker 1: So true.
Speaker 2: So I that is very true, young grasshopper.
Speaker 1: So I go to Jack and Av and I said,
Speaker 1: Twitter dot find this is my pitch to them. I
Speaker 1: go Twitter dot finance dot com. I said, people will
Speaker 1: talk about stocks on here, and they were like, Kumbaya,
Speaker 1: what about green peas and all that stuff?
Speaker 2: That's just that's screenpiece Twitter. This is finance Twitter.
Speaker 1: And finance Twitter, the original fin Twitter idea. And they
Speaker 1: were like, you should just you know, we have an
Speaker 1: open API, which is a trap plug in. Yeah, plug in,
Speaker 1: So build your entire company on our continuing goodwill and
Speaker 1: whim correct. So this was not smart I made. It's smart.
Speaker 1: You know, it depends how you look at it. You know,
Speaker 1: some days I love the idea, some days I'm like wow.
Speaker 1: But I went back and I said, listen, I got
Speaker 1: two choices. I can either just give it away for free,
Speaker 1: which you know, I started the cash tag dollars something
Speaker 1: AAPL dollars on r I m M. Because my idea was,
Speaker 1: how do you separate people talking about green apples, from
Speaker 1: people saying they love the Apple store.
Speaker 2: The stock symbol, yeah, like a hashtag only a.
Speaker 1: Dollar because people already and finance spoke the language of tickers. Yep.
Speaker 1: It was a clever hack, uh, And I created it
Speaker 1: with the team and we just started tweeting with dollar
Speaker 1: signs and it caught on.
Speaker 2: Right.
Speaker 1: So now I had a decision to make because people,
Speaker 1: because I told my last company, all the vcs were like, Howard,
Speaker 1: what are you doing? What are you working on?
Speaker 2: Right?
Speaker 1: And I'm the idiot that just said well this and
Speaker 1: people and I said, but I don't know, like how
Speaker 1: am I going to make money? You know?
Speaker 2: I don't really get that.
Speaker 1: Yeah, so I felt trapped to the very things we
Speaker 1: make fun of other people for is like and just
Speaker 1: goes to today's lessons. You know, just because you have
Speaker 1: an idea doesn't mean it should be venture backed. So kids, today,
Speaker 1: that's a lesson for you. Not everything needs venture capital.
Speaker 1: But at that time it was nirvana, right because there
Speaker 1: was just organic growth very important. Lesson organic growth is
Speaker 1: growth other kind of growth, not so growthy growth, organic.
Speaker 2: As opposed to well it.
Speaker 1: GBT, that's organic growth. The world loves organic growth because
Speaker 1: it's a mystery, it's a miracle. Well, two thousand and
Speaker 1: six was a miracle. You have Twitter, LinkedIn, Facebook, aws,
Speaker 1: the coming of the iPhone, the app store, you know
Speaker 1: what I mean, this was all to come.
Speaker 2: Well, we were still the crashes. Is far enough in
Speaker 2: our recent history five six years earlier that some of
Speaker 2: the wounds are starting to heal. People are starting, the
Speaker 2: market is up off the low's pretty essentially before the
Speaker 2: eight o nine prices market, So people are starting to
Speaker 2: look around and saying, hey, what's going on out here.
Speaker 1: But it was organic growth. You didn't have to force
Speaker 1: somebody like a crypto walle to force feed it down
Speaker 1: their throat. This is the future. It was just happening.
Speaker 2: Plus, you had all of the late nineties infrastructure built out,
Speaker 2: the miles of fiber optic cable and all of the
Speaker 2: various hardware upgrades. Was just waiting for something to be
Speaker 2: built on top of it. Web two oh as you
Speaker 2: called it. And these were all those companies that were
Speaker 2: taking advantage of cheap postcrash prices.
Speaker 1: Yeah. So the smartest thing I ever did in this
Speaker 1: where social ever start is I took everything I made
Speaker 1: and just redistributed it to everybody I saw doing a.
Speaker 2: Startup around just every company shing.
Speaker 1: That I saw. I wrote a twenty five. I ran
Speaker 1: out of money quickly, but I layered the world with
Speaker 1: my twenty five.
Speaker 2: Give us some names that we might be familiar with.
Speaker 1: The most famous is golf now, LifeLock, Buddy Media, to Mogul,
Speaker 1: ticket Fly, tweet Deck, Bitly, Surmise, Beta Work, the uber Yeah,
Speaker 1: so okay, so angel List. I was an investor in
Speaker 1: So all these things came from me just being in
Speaker 1: the mix and knowing Fred and reading blogs and just
Speaker 1: being part of the community. And I was at the
Speaker 1: right place. Intimes, this doesn't happen very often. I think
Speaker 1: the AI some AI machine experts now are going to
Speaker 1: be in this place. But we that was organic growth.
Speaker 1: That was the first real Internet. The Internet of ninety
Speaker 1: nine was infrastructure and promise. The Internet of five and
Speaker 1: six was the user's mass user onboarding. So you have
Speaker 1: you know, as well as I've done, I was supposed
Speaker 1: to do well if you were alive and writing checks
Speaker 1: in two thousand and six to twenty eleven. Hard not
Speaker 1: to make money, correct, So so remember that as a
Speaker 1: master's in business lesson being in the right place at
Speaker 1: the right time with the checkbook matters.
Speaker 2: So that alignment doesn't come along very often. How do
Speaker 2: you recognize, like at the time and you just spreading
Speaker 2: the manure, hoping all the plants grow, are you thinking, wow,
Speaker 2: this is a target rich environment and I got to
Speaker 2: have a little bit in everything.
Speaker 1: It's a good question because I didn't have that much
Speaker 1: money the idea, and you run on a money fast
Speaker 1: even when you're reading.
Speaker 2: Yah, fifty checks and you're you know, that's.
Speaker 1: Fifty checks in quickly. You know, I was flying Israel,
Speaker 1: I did e Toro, and I'm and I'm also running
Speaker 1: stock twits, which is also an extra benefit because everybody's
Speaker 1: pitching me ideas, you're right in the middle. It leads
Speaker 1: to the Robin Hood story later. But so everybody's pitching
Speaker 1: the ideas. I'm running a company, I'm writing twenty five
Speaker 1: k checks, I'm talking to everybody that matters, and there's
Speaker 1: organic growth. No one was faking it. It was just ballooning.
Speaker 1: Whatever you did had traffic, not fake. It may not
Speaker 1: be leverlasting, but it was real.
Speaker 2: So the name social leverage obviously comes from the people
Speaker 2: that you met on the first round that you began
Speaker 2: to socialize with. Suddenly everybody's in everybody else's deals, everybody
Speaker 2: else is seeing what's going on, so happens.
Speaker 1: And also, most importantly, the end of financial leverage. So
Speaker 1: there's a play on words going back to my comedy
Speaker 1: is like, we are coming out of this era where
Speaker 1: we realize that financial leverage is not a strategy, it's
Speaker 1: a tool. Okay, So my play on words here was
Speaker 1: that social leverage is infinite. You and me doing this podcast,
Speaker 1: me starting my own podcast. This all is leverage from
Speaker 1: the network. Right, financial leverage almost brought down the system.
Speaker 2: So your social leverage is deal flow, connections, fun, access
Speaker 2: to start founders, access.
Speaker 1: Low capital requirement. It was just a moment of the
Speaker 1: opposite of what brought down the system. But no one
Speaker 1: really dove in. Most people think, hey, you give them
Speaker 1: back to social good. Go No, I'm pro oil. So
Speaker 1: there is people go, I don't want to invest with
Speaker 1: a guy who's investing in the social good, And.
Speaker 2: I'm like, well, do you drive a car then shut up?
Speaker 1: Yeah.
Speaker 2: But by the way I digression, I don't understand the
Speaker 2: whole low carbon investments. We're gonna not give any money
Speaker 2: to the carbon producers instead will give money to the
Speaker 2: carbon consumers. How are you moving the needle there? If
Speaker 2: you're against oil and want to see alternatives come up,
Speaker 2: isn't there a better way to do it than saying
Speaker 2: we're just going to give money to people who use carbon?
Speaker 1: Yeah? Well, climate now is a big category for PCs
Speaker 1: and I'm not in it, but there's big developments happening.
Speaker 2: If you want to invest in alternative energy, well put
Speaker 2: your money in there because there's a ton of promise.
Speaker 2: That fine, But to say no, Mobile, we're just going
Speaker 2: to invest in ups and FedEx, Amazon, you know this
Speaker 2: way will not spoil the environment is just kind of misguided.
Speaker 1: Yeah. So social levels is just to play on words.
Speaker 2: Right, So so we're from well from from social leverage.
Speaker 1: Where do you go from there?
Speaker 2: How do you as a venture investor? How do you
Speaker 2: think about what you're putting money into? Are you? What
Speaker 2: is it about the management team? Is it about the
Speaker 2: product idea? Is it about the valuation?
Speaker 1: What?
Speaker 2: What's the decision making process?
Speaker 1: It's a great question. Everybody's different. You know. Luckily my
Speaker 1: mentors Brad Feld, Fred what these are like some of
Speaker 1: the great stars?
Speaker 2: Yeah, Rock start begging Fred to come in the show.
Speaker 2: Seven years He's like, I don't really do podcasts, all right,
Speaker 2: Well I'll corner him. I met him somewhere else.
Speaker 1: How Morgan shows up Roger Ehrenberg. So so I got
Speaker 1: very lucky because at that time, remember you're coming out
Speaker 1: of a nasty bear market. These guys were not. So
Speaker 1: this is like as like, yeah, these people were coming
Speaker 1: out of getting their ass kicked for five years and
Speaker 1: lawsuits and IPOs that went down ninety five percent. So
Speaker 1: these were not famous people. These were people that were
Speaker 1: deemed idiots again and truly not idiots, but you know
Speaker 1: what I mean, they were out of favor.
Speaker 2: You're only you're only as good as your last trade.
Speaker 1: Correct. So these people were beat up, but they were
Speaker 1: all smart and they in my team capital. They had capital.
Speaker 1: They survived, They kept their reputation attack by communicating with
Speaker 1: their investors. There's a cycle, and they caught the next cycle.
Speaker 1: Now this cycle. They what what happens to great investors
Speaker 1: after they go through a cycle. If they're great, they
Speaker 1: become great investors because they have memory and they have
Speaker 1: a new muscle that they learned that markets go down
Speaker 1: right right like guess what. Fred hates the stock market
Speaker 1: because he meant, you know, he became a VC. He's like,
Speaker 1: my job is to invest early, and if I have
Speaker 1: a chance to sell, I'm not going to be greedy.
Speaker 1: So luckily I had this great group of mentors, and
Speaker 1: like you, they were blogging. Not only were they blogging,
Speaker 1: they were blogging about stuff that I couldn't get in
Speaker 1: a textbook.
Speaker 2: They were wis blog of vc AVC.
Speaker 1: And brad feldfel dot com and wrote ther Eremberg at
Speaker 1: the time, and there it's like, well was Erenburg's blog
Speaker 1: I event information arbitrage and he was a great writer.
Speaker 1: You and obviously I have stocks now I have hundreds
Speaker 1: of writers. And then you know, they just gave this
Speaker 1: stuff away and they owned their domain, so there wasn't
Speaker 1: any problems. Like you wrote on Fred's blog, you had
Speaker 1: to go to Fred's blog. He linked to other people,
Speaker 1: they picked up the phone. Everybody was moving fast. It
Speaker 1: was just organic get the speed going. And so it's
Speaker 1: just a miracle. And what we focused on was good
Speaker 1: people and big ideas because you could glob onto Facebook
Speaker 1: and Twitter, so that that attracted.
Speaker 2: So how did you become a pre IPO investor in
Speaker 2: stocks like Facebook and Twitter.
Speaker 1: So at Twitter fred because of Wallstrip, he wrote, the
Speaker 1: first they led, the first three million dollar round on
Speaker 1: Twitter had a seventeen million valuation. Think about that right,
Speaker 1: Like today that seems normal. Back then I was Wallstrip
Speaker 1: was like a four hundred k valuation. I was doing
Speaker 1: deals one on two, six hundred grand on one million.
Speaker 1: Like founders were giving up forty percent of their business.
Speaker 1: We were coming out of like a hard time like
Speaker 1: we use kids today, but back then it was like
Speaker 1: you're giving up meaty chunks of the business. So things
Speaker 1: had to move very fast. But really you were betting
Speaker 1: on people. It wasn't so much price because everything was
Speaker 1: cheap because you were coming out of that open Much
Speaker 1: of it didn't happen yet.
Speaker 2: Mark Andriesen said, all right, so imagine we overpaid double
Speaker 2: for Facebook. Who cares it's a six thousand percent return
Speaker 2: instead of a twelve thousand percent. What does it make
Speaker 2: a difference?
Speaker 1: It does now at these levels, at these So what
Speaker 1: happened is that story got you know when you say
Speaker 1: it a thousand times and the twelfth kid graduating twenty
Speaker 1: years later says the same thing.
Speaker 2: It doesn't work It's a difference, and that's why I.
Speaker 1: Flash forward today. But back then, yes, so twitterh so Twitter,
Speaker 1: I had passed. I said, fret, how am I going
Speaker 1: to make twenty times my money? I had my VC
Speaker 1: hat on for an hour and I go fret. Twitter
Speaker 1: would have to be worth half a billion dollars for
Speaker 1: me to make worth my while. So of course I passed.
Speaker 1: Now Fred taught me a lesson there and he said, Howard,
Speaker 1: if you love everything about the product and the team,
Speaker 1: Gorgier knows about the press. But I'm Canadian. This goes
Speaker 1: back to what I said, I'm conservative and believing I
Speaker 1: just mentally couldn't do a model like these guys because
Speaker 1: social leverage hadn't been around that long. Network effects were new,
Speaker 1: So it was mind boggling to think that the president
Speaker 1: would tweet like Trump or the La Musk would be
Speaker 1: the richest guy in the world at the time.
Speaker 2: So this is, by the way, mentioning the president tweeting.
Speaker 2: You have to look at the four years of the
Speaker 2: Trump administration exactly what I asked, golden opportunity for Twitter
Speaker 2: to turn into something. How did they blow that opportunity?
Speaker 1: That?
Speaker 2: I guess that post mortem is not your expertise, your
Speaker 2: pre mortem, you're your much earlier states.
Speaker 1: Well, my pre mortem was going to Jack and Evan
Speaker 1: visualizing that for them and saying, wrap a terminal around Twitter,
Speaker 1: delay the feed thirty seconds for everybody. So imagine you know,
Speaker 1: I go to Ted Mertch as a friend of mine.
Speaker 1: He was Bloomberg here for twenty years. I used to
Speaker 1: come to this building. He's the guy who put the
Speaker 1: sung hero.
Speaker 2: He put Twitter on the terminal. So because for a
Speaker 2: lot of people, Twitter became the new tape and they
Speaker 2: were Bloomberg was smart enough to say, we have to
Speaker 2: have this in our feed. People can't find out about
Speaker 2: it after the fact, and they came up with a
Speaker 2: very clever way to cure it.
Speaker 1: Bloomberg didn't come up with the key, Howard and Ted
Speaker 1: came up. Well, I mean I used to call on Ted.
Speaker 1: I used to come in here, go to the sixth
Speaker 1: floor or a suit, complain that there was no candy,
Speaker 1: and go what kind of mental cases don't have candy
Speaker 1: in there in their in their hallway? And I would
Speaker 1: call on Ted. It was I would call Ted, I
Speaker 1: don't understand. I go, you guys are this is a
Speaker 1: dangerous problem for you to have outside the walls like
Speaker 1: Jurassic Park. I go, trades are happening.
Speaker 2: You can't have trades away.
Speaker 1: And so I said, one day, your headphones are going
Speaker 1: to start screaming at you that news is breaking outside
Speaker 1: the terminal. So Ted understood all that, he went and
Speaker 1: cut the deal of the century. I imagine with Twitter,
Speaker 1: some poor sales kid nipped inside Twitter comes to Bloomberg
Speaker 1: like a like a cob into a and try to
Speaker 1: be order. Tries to meet Twitter's quarter in twenty eleven,
Speaker 1: comes home with like a thirty million I don't know
Speaker 1: what the number is, like a ten year Bloomberg deal.
Speaker 1: What it was? Good time? So this is me yelling
Speaker 1: at Doctor's going idiots like I go Jack. That's why
Speaker 1: I was always mad at management. Don't sell to the
Speaker 1: one customer who violutely needs the data. So this is
Speaker 1: where Twitter's mistake was, and Fredick agrees with it. I
Speaker 1: would go to FREDI go fret, get over to that
Speaker 1: board meeting, and you tell Jack and Ev to delay
Speaker 1: the feed thirty seconds. Somebody will call you and pay
Speaker 1: you a billion dollars to get it in real time
Speaker 1: and charge that company. And that's going to be Bloomberg, Reuters,
Speaker 1: some Warren Buffett, Goldman, Sachs, somebody they can afford to
Speaker 1: pay you. And if Justin Timberlake farts at a concert,
Speaker 1: if someone reads it a minute later, it doesn't matter, right.
Speaker 1: But if a player injures itself in sports, or if
Speaker 1: the president tweets or been Lodden gets shot, right, the
Speaker 1: futures will move. And that was their business idea. They
Speaker 1: kind of had ten employees and they blew it. Yeah,
Speaker 1: and so I always still give about that idea.
Speaker 2: I still don't understand why Twitter didn't or doesn't acquire
Speaker 2: stock to It's it's such a now.
Speaker 1: It's not even about structors. They should have bought DraftKings.
Speaker 1: They should have Robinhood. They should have been a broker dealer.
Speaker 1: There should have been a gambling they should have made
Speaker 1: money off the transaction.
Speaker 2: They think they have this crazy idea that they air.
Speaker 2: They're the town square.
Speaker 1: You know what's in the town scores. A lot of
Speaker 1: poop and a lot of crazy people. You know why
Speaker 1: you can't drink out of the nile because people peeing
Speaker 1: it for a thousand years. The town Score is a dirty,
Speaker 1: dirty place.
Speaker 2: So you end up with a sort of area that
Speaker 2: is central to so many people's It's got nexus of
Speaker 2: so many industry correct and so many journalists and celebrities
Speaker 2: and finance people. And you know, there's medical Twitter, and
Speaker 2: there's black Twitter, and there's finance Twitter, and there's you know,
Speaker 2: I get dragged into I mentioned I set up a
Speaker 2: list of watch companies, right, watch Twitter, Like you have
Speaker 2: all these communities, and it's astonishing that nobody's figured out
Speaker 2: a way to monitor it.
Speaker 1: Because it was an open protocol. Like when Fred invested,
Speaker 1: he envisioned it as an open protocol. What do they do?
Speaker 1: They closed it. It's okay to close it to the
Speaker 1: people that can afford to pay to open it, not
Speaker 1: to the regular people. Charging me eight dollars for something
Speaker 1: i'd pay five grand is not good business, right. Charging
Speaker 1: me eight dollars for something I'm not willing to pay
Speaker 1: eight dollars for is not good business. So that was
Speaker 1: the mistake. You have the Nile River, it's just filled
Speaker 1: with data, right, and you decide to let everybody pissing it.
Speaker 2: Right, And that's the crazy thing is Twitter is a
Speaker 2: data source, is really.
Speaker 1: Especially in an air of machine learning. Right, So this
Speaker 1: word elon could come out. Okay, having a unique data
Speaker 1: set we're jumping around here, but having a unique data
Speaker 1: set in twenty twenty three, like stock twits, does quadruples
Speaker 1: our value because people are doing things. You can't get
Speaker 1: to apply our model, your LM or your model to
Speaker 1: real time financial people that talk about stocks all day long.
Speaker 1: You have to have our data.
Speaker 2: Yeah, so let's circle back to social leverage. We talked
Speaker 2: about what you've done on the media side. We've talked
Speaker 2: about finance side. What else does social leverage focus on?
Speaker 2: Is it just you know, finance and media or do
Speaker 2: you look at tech and other things?
Speaker 1: So, yeah, we're investing out of our fourth fund. It's
Speaker 1: one hundred million dollar fund. We went from six million.
Speaker 2: And you're closed. You're done, We're closed.
Speaker 1: Yeah, so we we we raised six million for our
Speaker 1: first fund. That fund had Robinhood in it, right last.
Speaker 2: The second we'll talk about Robinhood.
Speaker 1: Second fund had some more Robinhood and a company called
Speaker 1: Customer and a few other great companies h both.
Speaker 2: How big was the second fund?
Speaker 1: Twenty just two of us and then we brought on
Speaker 1: our third partner, Gary Bennett, who had sold US company
Speaker 1: to Salesforce and we were doing a lot of enterprise
Speaker 1: and healthcare. And that's our third fund, which was forty right,
Speaker 1: and we we liked the capital constrained model. And then
Speaker 1: our fourth fund will which will be like where we
Speaker 1: settle in at the future is one hundred million dollar fun.
Speaker 2: And you're still doing very early see right.
Speaker 1: One to two million dollars check. We lead rounds. We
Speaker 1: don't have sharp elbows, meaning we don't have if someone
Speaker 1: wants to put their name first, they can't put their
Speaker 1: name first. It's about the ten years stuff. So we
Speaker 1: like to win. Now, what's changes. Social leverage has evolved
Speaker 1: because the markets move. So I was very heavy and
Speaker 1: financial services stuck, which was a great lead. Jon Engine.
Speaker 1: We invested in Rally, Royd road cooy Fin E, Toro, Robinhood, Alpaca,
Speaker 1: Very Finance. Why charts you know, so I didn't realize
Speaker 1: you and why yeah first check and so so yeah,
Speaker 1: sixty thousand dollars check to Sean Carpenter when running White
Speaker 1: Charts and it's a great business. The old chard i
Speaker 1: Q which just sold to S and P. So we
Speaker 1: really I covered if you were going to build a
Speaker 1: Bloomberg terminal. And again this is Twitter screwing this up.
Speaker 1: Twitter should about all these companies and just giving it
Speaker 1: stuff away, right, just giving it away for fifty one
Speaker 1: hundred bucks a Mike, create a two hundred dollars a
Speaker 1: month Bloomberg terminal that's open.
Speaker 2: They've never no one has ever been able to do.
Speaker 1: That, including me. If I don't have the bay the terminal,
Speaker 1: it'll still happen. There'll be a roll up post this crash. No,
Speaker 1: there'll be a role. I think, well, there will be
Speaker 1: an effort. I'm not saying it'll be correct. Why wouldn't you.
Speaker 1: You can buy fintech askeids for ninety cents off the
Speaker 1: doll You.
Speaker 2: Could go back over the past twenty years, and every
Speaker 2: three or four years there's a story about this is
Speaker 2: finally the end of the Bloomberg terminal, and six months
Speaker 2: later they're at old time highs in terms of users. Sorry,
Speaker 2: nobody has ever been able to do it.
Speaker 1: Let me be clear, Berry, you cannot disrupt them. Didn't
Speaker 1: mean it that way, but I mean that's been the
Speaker 1: intense stupid intent. There's things you can't be right, Okay,
Speaker 1: you can't beat open So I'm not going to go
Speaker 1: take on open AI. I meant it works. Okay, you
Speaker 1: can't take on the Bloomer. That doesn't mean rich people
Speaker 1: won't try. But network effects are very powerful. Okay, centralized
Speaker 1: network effects are very powerful. The second thing that Bloomberg
Speaker 1: has is the right customer, of course, and the third
Speaker 1: thing that Bloomberg has is a will to not lose.
Speaker 1: What Bloomberg got right was esthetics, talent, uh, not not
Speaker 1: giving an.
Speaker 2: Inch, stability, rock when support right? When was the last
Speaker 2: time you heard about the terminal going down? But Twitter?
Speaker 2: You know, every other week you were hearing about that
Speaker 2: for how long?
Speaker 1: Early on Twitter could have set up a customer support
Speaker 1: desk for five hundred a month and said call us,
Speaker 1: we'll build you lists instead of what you know they
Speaker 1: sell the hard work.
Speaker 2: I have a behavioral finance list. I have a I
Speaker 2: have everybody in my phone. I'm on a list. I
Speaker 2: see everything that everybody tweets in case anybody that says
Speaker 2: anything non compliant. Compliance tracks that. Also, the watch list
Speaker 2: is just sort of fun. I have a car list
Speaker 2: that's fun like that, sort of curated lists. I still,
Speaker 2: to this day don't understand why Twitter doesn't promote these
Speaker 2: sorts of things. They're amazing science and technology. I have
Speaker 2: a list like that that has like seventy thousand followers.
Speaker 2: I don't know how that true.
Speaker 1: I'll give you my thesis. My thesis is organic growth,
Speaker 1: Well great is also a drug and it got it
Speaker 1: infected people's brains, meaning, hey, we already won America, let's
Speaker 1: go to China. You know how long it took like
Speaker 1: Bloomberg to open at second office. I imagine ten years.
Speaker 1: You know fast, Twitter and Facebook and even Robinhood were
Speaker 1: opening offices in China year two like no one. So
Speaker 1: I'm saying organic growth was a drug that forced people
Speaker 1: to think that they were smarter than they were, grow
Speaker 1: faster than they were. And oh and by the way,
Speaker 1: there was zero percent interest rate and venture capitalists were
Speaker 1: lining up to give you money. Howard.
Speaker 2: In addition to running a venture fund, Social Leverage also
Speaker 2: hosts a podcast called Panic with Friends. So I got
Speaker 2: so many questions to ask you about. First, what what
Speaker 2: is this podcast? Then you you talk about well.
Speaker 1: You started there was there was podcasts a thing now
Speaker 1: a little bit.
Speaker 2: Should I look into this?
Speaker 1: You should? So, I think the podcast is popular in
Speaker 1: general because you get to have these conversations with people
Speaker 1: conan being a perfect example. I listen to comedy podcasts,
Speaker 1: so I listened to Kore and Conan is just so talented.
Speaker 2: So he he happens to be just quick digression, which
Speaker 2: you and I both can't help but do. When I
Speaker 2: was pitching Masters in Business to Bloomberg, I pitched it
Speaker 2: as Mark Maron meets Charlie Rose and Mark Man is
Speaker 2: one of the original pot And by the way, that's
Speaker 2: back when Charlie Rose pants on who nobody knows going
Speaker 2: on but Mark Marin. He was the first guy doing
Speaker 2: long form interviews with people in his industry. And he's
Speaker 2: a stand up and a television show producer. But it's
Speaker 2: let me bring in my friends from the world to
Speaker 2: stand up comedy and let's dissect what makes something fun.
Speaker 1: Correct so inspired like like Jerry's show, inspired by What
Speaker 1: You Do, inspired by Conan. I started my own podcast
Speaker 1: in March tenth of twenty twenty. So the market the
Speaker 1: vix was like.
Speaker 2: Oh, so weird, not quite shut down yet, I feel
Speaker 2: like to shut.
Speaker 1: Down in the you know, and I'm like, people were
Speaker 1: freaking out. As kind of a service to myself and
Speaker 1: my next yeah, and a service to my network to
Speaker 1: be able to talk to like Fred Wilson and Jim
Speaker 1: O'Shaughnessy and you. I said, why don't I just for
Speaker 1: the thirty days document the panic and start the show
Speaker 1: called Panic with Friends, where we are our calm voice.
Speaker 1: So my first inclination with COVID was this will pass. Obviously,
Speaker 1: because by the.
Speaker 2: Day, everybody I think had the same.
Speaker 1: Maybe my best call, but it wasn't like I had
Speaker 1: some great insight. It was just, oh my god, people like,
Speaker 1: at least we could do is take a deep breath.
Speaker 1: So I have this idea, we're gonna We're gonna do
Speaker 1: the opposite of panic, even though the show's called Panic
Speaker 1: with Friends, And I would get my calmest friends that
Speaker 1: have been through many cycles and just chat with them
Speaker 1: about the panic. And at the time that now the
Speaker 1: market closes, I'm doing a show a day. A great guest.
Speaker 1: Jomo Shaughnessy is my first guest, and it was just
Speaker 1: really good advice. It's like that, and then I start
Speaker 1: bringing in traders. When the VIC hits eight and I'm like,
Speaker 1: what are we buying? Oil was negative? I bring on
Speaker 1: my favorite oil trader and we were just like, if
Speaker 1: you listen to my podcast, you made fortunes because we
Speaker 1: were there, and I was so proud of just being.
Speaker 2: Makes the voice of reasons.
Speaker 1: Guys, you don't have to buy, but if you're not
Speaker 1: thinking about buying during these weeks, you will you may
Speaker 1: not want to ever be an investor.
Speaker 2: Let me ask you.
Speaker 1: I was the idea of the show.
Speaker 2: Let me ask you a question because I had a
Speaker 2: similar experience. I'm curious as to what yours was. What
Speaker 2: sort of pushback did you get to that rational Hey
Speaker 2: down thirty percent in a few weeks buying opportunity? What
Speaker 2: did people say?
Speaker 1: The show wasn't like it was more a show of like,
Speaker 1: you know, I have a big audience, not for the
Speaker 1: podcast at the time, but I would just I figured,
Speaker 1: if people ever go back and look for about thirty
Speaker 1: days of podcasting after day, I was going to put
Speaker 1: a piece of work out there that would be timeless. Now,
Speaker 1: I didn't expect to be doing the show for three
Speaker 1: more years, and it should be called Frolic with Friends
Speaker 1: at this point. But I was really proud of it.
Speaker 1: But we just kept going. Canodos are one of my
Speaker 1: best pals.
Speaker 2: It's also you don't realize how much fun it is
Speaker 2: to sit down with somebody. You and I know each
Speaker 2: other for a long time. How often do we get to
Speaker 2: sit down and bs about what we do for two hours?
Speaker 1: It's also it's a blast, It's not just a blast.
Speaker 1: It keeps me ahead of the curve.
Speaker 2: And you got to think about who you're talking to.
Speaker 2: There's some prep work that you wouldn't do otherwise. Hey,
Speaker 2: let me look into seed investing before I sit down
Speaker 2: with Howard. Oh look what I've learned. I mean you
Speaker 2: you must have those sort of experiences. It's that although
Speaker 2: you have a staff that does all the research, I.
Speaker 1: Don't have the staff do everything other than connute myself.
Speaker 1: And you know, I just love the idea that my daughter,
Speaker 1: my wife listened to it and they like it. As
Speaker 1: long as they like it, I'll keep doing it. Every
Speaker 1: time I say I quit, my wife goes, I listened
Speaker 1: while I'm hiking, and go all right, I'll keep.
Speaker 2: Doing So what do you What have you learned from
Speaker 2: hosting a podcast?
Speaker 1: Well, I've learned that people are great, right, I've learned
Speaker 1: obviously because I don't.
Speaker 2: Want you so the opposite of what you learn from Twitter.
Speaker 1: Yeah, I learned that just there's so many smart people
Speaker 1: and I also learn a lot about myself in I
Speaker 1: don't know anything, and I do love to make my
Speaker 1: guest laugh. Like part of the thing is if you
Speaker 1: can make the friends and the Jim o'shaughness is and
Speaker 1: the berries laugh, that is the only gift that I
Speaker 1: was born with, is to probe and make them giggle
Speaker 1: or just look at themselves a little less seriously. Right,
Speaker 1: So when I see a flaw in person, whether it's
Speaker 1: Kramer or whether it's you know, Trump, I look at
Speaker 1: it like, man, these are bad life decisions. Like Jim
Speaker 1: could have been me. He could have he had the
Speaker 1: center of the universe. I look at Jim, and he
Speaker 1: went media. He could have gone venture. Right, maybe he
Speaker 1: did do venture and he doesn't talk about it.
Speaker 2: He did okay for himself.
Speaker 1: To be fair saying he didn't make money, I'm saying
Speaker 1: he's slapping on makeup. But he could have been, and
Speaker 1: he could have been.
Speaker 2: He's got a daily grind that looks from the outside
Speaker 2: like it's you had to pick one of two lifestyles.
Speaker 2: I think Andreasen's lifestyle is a little more less less
Speaker 2: stressful than the lifestyle that correct.
Speaker 1: So I feel like I chose the their side of
Speaker 1: the road. I could have gone down the media side,
Speaker 1: but I still look at the media more like the enemy.
Speaker 1: But I also don't look at it like Trump and
Speaker 1: Elon must look like it. They're out to get me,
Speaker 1: and I know they are out to get them and
Speaker 1: whatever clicks.
Speaker 2: And they're out to get paid. So you know, whenever
Speaker 2: I'm going to interrupt again because I feel like, no,
Speaker 2: we're friends, I feel like this is a conversation, not
Speaker 2: not a Q and A. And I apologize to those
Speaker 2: people who are expecting a Q and A whenever I hit.
Speaker 2: People talk about media bias, and a lot of it
Speaker 2: is just lazy journalism and what is extreme, what is outrageous?
Speaker 2: What is sensationalistic? How do we get the views? How
Speaker 2: do we get the clicks? It's not the sort of
Speaker 2: I think the right misunderstands the left and the left
Speaker 2: misunderstands the whole thing. It's a business and it's about
Speaker 2: generating and capturing attention, not we're put wishing the left
Speaker 2: versus the rights out of view. Fox News is its
Speaker 2: own animal. It has its own origin story that comes
Speaker 2: from a very different place. But when you just look
Speaker 2: at media in general, yellow journalism has been around for centuries,
Speaker 2: literally centuries.
Speaker 1: Yeah, I just loved the idea. I was born with
Speaker 1: the gift to laugh at myself, so.
Speaker 2: Let's talk about So let's talk about laughing at yourself.
Speaker 2: And I'm going to insert myself even deeper into the conversation.
Speaker 2: I wrote a column in twenty twenty one for Bloomberg
Speaker 2: what my worst trades taught me about investing, and I
Speaker 2: mentioned you said it's twenty fourteen. I remember it's twenty fifteen,
Speaker 2: but I wouldn't swear to it. The line I said
Speaker 2: is Howard, that's the dumbest investment idea I ever heard.
Speaker 2: I'm omitting the F bomb that was in the middle.
Speaker 2: You and I were talking. We were in San Francisco.
Speaker 2: I have a vivid recollection of the Ferry building being
Speaker 2: behind us. We were out on the deck behind where
Speaker 2: a couple of those restaurants were, and you were pitching
Speaker 2: me on this ridiculous idea for an app that's going
Speaker 2: to give away free trades to millennials on their phone.
Speaker 2: That's like, you know, the world's moving to passive. Who
Speaker 2: wants free trading? Where is this going? So first kudos
Speaker 2: to you to investing in robin Hood when I was
Speaker 2: too stupid to see it. But second, how did you
Speaker 2: come across the robin Hood opportunity and what made you
Speaker 2: so enthusiastic about it?
Speaker 1: The first of all, it was it was just E
Speaker 1: trade two point zero. So my big idea, like even
Speaker 1: with Wallstrip was CNBC on YouTube. Robinhood was just an
Speaker 1: extension of what each trade.
Speaker 2: Each trade on the phone, so each trade to me,
Speaker 2: if you would have pitched it to me like that,
Speaker 2: because my first gig in the business was at EA Trade,
Speaker 2: I would have been all over it.
Speaker 1: Yes, so it's my fault, I totally, So again I'm in.
Speaker 1: It was in a power position on some level because
Speaker 1: people needed stock twits to spam to get users, so
Speaker 1: we were at gateway to traffic much like Twitter. Uh
Speaker 1: huh okay. So, but the people that came to me
Speaker 1: were people were financial apps, and because I was too
Speaker 1: wimpy to build my own brokerage in twenty thirteen, just
Speaker 1: like you said, vcs are not perfect. They are like moths.
Speaker 1: And at the time, the world of VC was enamored
Speaker 1: with disrupting Vanguard, so the VC model was all the
Speaker 1: V eight trillion get to tell you my hack. So
Speaker 1: the vcs were seeing the world one way. I saw
Speaker 1: the world another way. So the VCS were like, we
Speaker 1: got to go after the assets under management. I was like,
Speaker 1: who cares those are worth? You know, red dollar? You
Speaker 1: need to get the customer and you need you know.
Speaker 1: So it wasn't like any genius insight. It was just
Speaker 1: all the money was trying to disrupt Vanguard, and Vanguard
Speaker 1: wasn't disruptible. You couldn't build a product that was twenty
Speaker 1: times better than Vanguard, whereas E trade they were spending
Speaker 1: billions on advertisements.
Speaker 2: So great emphasizing but expensive average.
Speaker 1: So at the time in twenty thirteen, you could look
Speaker 1: through the financial statements of Schwab and TD public statements
Speaker 1: and they were spending one hundred and fifty dollars for
Speaker 1: a customer acquisition. So this is the math that I applied.
Speaker 2: You could acquire them for next to nothing.
Speaker 1: How about zero and lesson zero? Right? Meaning I show
Speaker 1: my friend my free trade on my phone. He didn't
Speaker 1: see a TV commercial.
Speaker 2: What does that cost you less.
Speaker 1: Than one bucks? Because one the one customer led to ten.
Speaker 1: So it was like Uber.
Speaker 2: Grows, but you're giving them a free trade, You're giving
Speaker 2: them a free share of stock. Understand that, but what
Speaker 2: is that twenty bucks?
Speaker 1: Thirty bucks? Not even you can't think like that. As
Speaker 1: a seed investor, you can now that interestate you five percent.
Speaker 2: If Schwab is spending a buck fifty per client and
Speaker 2: you're spending one share of a five dollars stock, your
Speaker 2: cost of acquisition is five dollars. It's meaningless.
Speaker 1: Who cares, right, So at worst it was five dollars,
Speaker 1: but at best it was still negative because that person
Speaker 1: told five other people. You got to understand how that
Speaker 1: type of networking was virals organic, so it was Snapchat
Speaker 1: but with trading. So think about this, do the map.
Speaker 1: If I acquire a million users and I'm a Schwab
Speaker 1: and I did that for ten dollars, you'd be CEO
Speaker 1: of the company. Bring me the kid that got me
Speaker 1: a million users without a tv AD Right now, your
Speaker 1: all your workers were trying to kill you because they'd
Speaker 1: be slow down, dude, you're you're not supposed to work
Speaker 1: that hard. But this was my idea was like, if
Speaker 1: you can acquire a million users at zero, you're worth
Speaker 1: one hundred and fifty million dollars.
Speaker 2: Yep.
Speaker 1: So if I invest at an eight million dollar valuation.
Speaker 1: Let me put up the check. I'm up nineteen times
Speaker 1: my money in an ARB trade. So it was just
Speaker 1: an AR bike.
Speaker 2: And again, you you should have explained that to me.
Speaker 1: Well, at the time, I probably had gas from something
Speaker 1: I'd eaten in San Francisco and I had other things
Speaker 1: on my mind. No, but the idea then was it
Speaker 1: was very hard for other people to see that because
Speaker 1: they were looking for a business model.
Speaker 2: Well, now that you've explained that, it's easy to say.
Speaker 1: And so what I didn't get right for me? Again,
Speaker 1: a lot of this is luck. I didn't expect it
Speaker 1: to be thirty bill you know. So we did sell
Speaker 1: some along the way, and that was the beauty of
Speaker 1: this market. Markets have become they're a liquid a little
Speaker 1: bit right now. But there became liquidity in the private market,
Speaker 1: which is what I also helped build by investing an
Speaker 1: angel List and others. So I was just part of
Speaker 1: that whole generation which was fun, which created liquidity in
Speaker 1: the system.
Speaker 2: So how early were you in robinhood? We were the
Speaker 2: first check, you were literally the first check. Yeah, they
Speaker 2: go public for thirty five billion dollars. That that's got
Speaker 2: to put a few jingles.
Speaker 1: Yeah, we're we're on a few lists for fun returns.
Speaker 2: So you've you're selling a little bit along the way. Yeah,
Speaker 2: but it's got to be one hundred x plus, right,
Speaker 2: I know you can't disclose that, but yeah, it's huge.
Speaker 2: So now you're in a very different situation instead of
Speaker 2: thinking about.
Speaker 1: Yeah, now you pay me to come on the podcast.
Speaker 2: Right, right, But but for other people we have, we
Speaker 2: have clients who sold businesses, we have other people who've
Speaker 2: had these giant wind falls. Suddenly it's a very different calculus.
Speaker 2: You're saying, all right, I'm no longer worrying about multiplying this.
Speaker 2: How do I go about protecting this giant pool capital?
Speaker 2: And how do I not get killed tax wise?
Speaker 1: So?
Speaker 2: Do you collar this? Do you sell it? What do
Speaker 2: you do when suddenly the bank calls and says, hey,
Speaker 2: there's a couple extra zeros in your bank account, put
Speaker 2: it at the end of your your balance. What sort
Speaker 2: of financial response do you take to that?
Speaker 1: Well, the first thing you do is I tell everybody,
Speaker 1: is you hide it from your your wife and kids? Right, yeah,
Speaker 1: my kids.
Speaker 2: Sorry, that Robin Hood thing didn't work.
Speaker 1: My kids think I'm in trying to still disrupt bankguard. No.
Speaker 1: So the first thing you do is try and just appreciate,
Speaker 1: like you know, the good fortune. Yeah, yeah, set up
Speaker 1: the trust.
Speaker 2: Gratitude all that stuff is fantastic.
Speaker 1: Then set up the trust and you realize that you
Speaker 1: have replying to your children.
Speaker 2: Right you start moving money into various trusts. You're worth
Speaker 2: more dead than alive. You don't want them to know that.
Speaker 1: Yes, yes, yes you you he.
Speaker 2: Incentive to detach the break lines. We don't want that.
Speaker 1: I mean, there's nothing special. We as a conservative person.
Speaker 2: Do you do you color the because that's a big money.
Speaker 1: We We distributed the stock to r LPs so so so.
Speaker 2: A lot of so it's up to them to do
Speaker 2: with this goes to.
Speaker 1: Degreed at the end of the secon. Yeah, you know again.
Speaker 1: I was mentored by Fred Wilson. We've been joking.
Speaker 2: Fred says, hit the bit.
Speaker 1: Fred is always because he went through nineteen ninety nine,
Speaker 1: He's not he went through.
Speaker 2: He's not looking to optimize.
Speaker 1: He's not looking to optimize.
Speaker 2: That is the regret minimization strategy. That's what Fred deploys.
Speaker 1: I've made a few mistakes in my life and investing
Speaker 1: that Fred laughs at or not laughs, but I appreciate you.
Speaker 1: And there do you think where I've optimized over optimized
Speaker 1: for entry? Right? Okay? Fred has always said if everything
Speaker 1: lines up optimized, don't worry.
Speaker 2: About it, optimize for exit.
Speaker 1: So so I've always optimized correctit, meaning I'm never going
Speaker 1: to sell the top right, and I'm generally going to
Speaker 1: sell on the way out.
Speaker 2: You don't even get a ribbon when you top to
Speaker 2: I've top ticked two stocks in my life when I
Speaker 2: was on a trading desk. You don't ring the ball exchange,
Speaker 2: no one, No one gives you a plaque. It's like, oh,
Speaker 2: that was a lot of efforts for nothing.
Speaker 1: So our job is to return capital as fast as
Speaker 1: we can.
Speaker 2: You did that.
Speaker 1: There's a there is a thing in the venture industry
Speaker 1: that's kind of a joke, which is you know I
Speaker 1: R R. Well, y r R might mean something if
Speaker 1: you're returning cash, right, so.
Speaker 2: The eternal rate of return, yes, but you're returning actual share.
Speaker 1: So in our thing, it's dollars return, so it's DPI,
Speaker 1: and so the higher your DPI, now your I R
Speaker 1: R is what matters. When you have a five to
Speaker 1: ten DPI and you've returned that much cash on cash.
Speaker 1: People return your calls. So I was mentored by the
Speaker 1: people that said, focus on DPI. So if you have
Speaker 1: a chance to return your cash, you if you return
Speaker 1: your cash in twenty sixteen, we returned some cash in
Speaker 1: robin in twenty sixteen, very early. But say those LPs
Speaker 1: bought bitcoin, right, they did, okay, Meaning my job isn't
Speaker 1: to manage their money. My job is when when I
Speaker 1: entered a company, I said, if this gets to a billion,
Speaker 1: I got to sell some and it got to a billion.
Speaker 1: You can't change. Yeah, of course you can change. But
Speaker 1: I'm an early stage investor. I mean sell everything.
Speaker 2: You sold a little bit to take some house money
Speaker 2: off the table. You still had a big slug waiting
Speaker 2: to see if it did any better.
Speaker 1: Yes, and it did so even from there, it's thirty five. Oh,
Speaker 1: it's unbelievable. Now we made the decision and our LPs
Speaker 1: agreed that we are as soon as we can sell,
Speaker 1: we will return the shares to the LPs. Let them
Speaker 1: decide me. They have their own tax problem, LP, they
Speaker 1: have their other issues. Let us return the stock market.
Speaker 1: They want to hold it, they can hold it for me.
Speaker 2: What are the rules for early events pre IPO investors
Speaker 2: six months, so you basically give them pre ip shares.
Speaker 1: No, we give them we have to wait legally for
Speaker 1: the shares to be cleaned up. We cleaned them up
Speaker 1: day one. Give them their shares, their free trading can
Speaker 1: hold them and give them to their kids. That's not
Speaker 1: our job. We distributed market.
Speaker 2: And the IPO was one twenty twenty one.
Speaker 1: Yeah, late twenty twenty one. Now, a lot of people
Speaker 1: around this time started cutting up their funds like Andresen
Speaker 1: and Sequoia to be permanent capital. These are the signs
Speaker 1: of the top where they're like, hey, we now have
Speaker 1: an evergreen fund that will hold these stocks. You know.
Speaker 1: So there were all these signs late twenty one one.
Speaker 2: That's not a great call there. Yeah.
Speaker 1: So so again, you know, we consistently try and return capital.
Speaker 1: That is our job.
Speaker 2: So all told, your experience with robin Hood ended up
Speaker 2: being pretty pretty pretty good.
Speaker 1: Yeah, pretty good. We had a few other ones, but ye, Robinhood.
Speaker 1: What was fun about Robinhood is that we saw other
Speaker 1: people didn't like it, and that still goes to our
Speaker 1: strategy today is when you're betting on people, you have
Speaker 1: to have domain experience which we had in Robinhood. We
Speaker 1: have to get the timing right. That's a little bit
Speaker 1: of luck. The world was ready for an app like this.
Speaker 2: And then the pandemic certainly didn't hurt.
Speaker 1: Didn't hurt, but the execution that they had early was fantastic.
Speaker 2: Really quite fascinating. So I have a very vivid recollection
Speaker 2: of you being on my partner's podcast, Compound and Friends,
Speaker 2: Josh Brown and Michael Batnick, and I want to say
Speaker 2: it was like October twenty one, is that about right?
Speaker 2: And you're like, the market screaming higher, We're up from
Speaker 2: the lows. At the end of March twenty twenty the
Speaker 2: markets up sixty eight percent for a calendar year, and
Speaker 2: twenty twenty one the S and P five hundreds up
Speaker 2: twenty eight percent. And you couldn't have been more uncomfortable.
Speaker 2: You just said, wherever you look signs of problems coming.
Speaker 2: What were you seeing in October twenty one that made
Speaker 2: you and not just public markets. You were talking about
Speaker 2: private marketaluations, demands from founders and startups. Like everything you
Speaker 2: said was bubblicious.
Speaker 1: So earlier in the year, in April, you know, I
Speaker 1: rarely do serious interviews, and I came on Joe's podcast
Speaker 1: with Tracy and they were great and they were like
Speaker 1: asking me questions and it went I was like, you know,
Speaker 1: this is stupid. And we had raised one hundred million
Speaker 1: in late twenty twenty one. Again we went from six,
Speaker 1: as I said, to twenty to forty one hundred. That
Speaker 1: hundred was easy really, So when it was easy, it
Speaker 1: was like it was like it was like the Costanza
Speaker 1: venture capital. At that point, I'm like, this has been
Speaker 1: so hard for us. We're good. Why are the people
Speaker 1: giving us one hundred What have we done to deserve this?
Speaker 1: So we was kind of like castandzing ourselves, and so
Speaker 1: we stopped writing checks, which is one of our best decides.
Speaker 2: So wait, hold on a second before we get to that.
Speaker 2: So you raise one hundred million, now you have a
Speaker 2: track record that's you know, Robin Hood.
Speaker 1: Or people wired us money.
Speaker 2: So was this there's too much money around people have
Speaker 2: become reckless with their ca capital or is this a
Speaker 2: little imposter syndrome. Hey we're good, but we're not that good.
Speaker 2: This is a problem. Or a little bit of everything.
Speaker 1: A little bit of everything plus a lot of it's
Speaker 1: not my own money. Right, and I'm conservative, and I'm like,
Speaker 1: nothing makes sense to me, and I'm getting three minutes
Speaker 1: to decide on a deal. We're still doing business on zoom.
Speaker 1: I'm not a zoom guy, right, I just like this.
Speaker 2: You need to see people's body line.
Speaker 1: I can't take three months to do it now, meaning okay,
Speaker 1: I lose Stille in three months. But like, shouldn't I
Speaker 1: have dinner with you? Shouldn't I see if you're like
Speaker 1: treat the staff well? Shouldn't I see what your co
Speaker 1: founder looks like. I don't even know how tall you are.
Speaker 1: So again, God bless the people that wrote checks. So
Speaker 1: my partner Gary wrote a few good checks during COVID
Speaker 1: I didn't.
Speaker 2: So starting in early twenty twenty one, the social leverage
Speaker 2: bigot is shut.
Speaker 1: Off almost in twenty twenty because March twenty twenty I
Speaker 1: start the podcast and there was so much opportunity in
Speaker 1: the public market right that it was saying, how are
Speaker 1: you not buying these stocks? What are you worried about
Speaker 1: private markets when you can make ten x on a
Speaker 1: public stuff with liquidity? So I lost. I got lost
Speaker 1: in the public markets. And of course you know, some
Speaker 1: cool companies got funded. But really those first three months
Speaker 1: of COVID were like you would like a motorcycle accident,
Speaker 1: You get up and you go, we're not dead. And
Speaker 1: so it wasn't like I was in the mood of
Speaker 1: check writing. But by like June of twenty twenty, market
Speaker 1: was open, baby, and people were writing checks right. And
Speaker 1: for a couple months I was excited. You write checks,
Speaker 1: We have money, people love us, we know what we're doing.
Speaker 1: So we wrote a few checks. But then I like,
Speaker 1: by the end of the year, I'm.
Speaker 2: Like, this has gotten crazy.
Speaker 1: The prices were tripling, and people would be that on
Speaker 1: treason line. Hey, if you're going to make a thousand
Speaker 1: on your money, what's the difference if you paid triple
Speaker 1: on the opening price. But that math, if you really
Speaker 1: put it in a calculator, becomes a problem. Becomes a
Speaker 1: problem just if you're wrong. Because now the IRR, which
Speaker 1: doesn't important to me, is important. If you've invested someone's
Speaker 1: money and it takes three extra years, you're not going
Speaker 1: to beat anybody, right. And so my job is not
Speaker 1: just about DPI. It also is about IRR because I'm
Speaker 1: going to put your money to work. The clock starts ticking,
Speaker 1: and you know, delaying an exit three years is a
Speaker 1: real thing. So the risk I just felt the asymmetric risk.
Speaker 2: So wait, let's let's let's just talk about IRR briefly.
Speaker 2: Typical venture funds. If I commit one hundred dollars to
Speaker 2: a venture fund, a great fund, I'll get a capital
Speaker 2: call right away for right, and then the next January
Speaker 2: I'll get another call for twenty five bucks and then
Speaker 2: the fuss so maybe over the course of three four,
Speaker 2: five years, three to four years. So this way they
Speaker 2: can keep They're not sitting with your cash worrying. This
Speaker 2: is just showing zero return or back when you know
Speaker 2: the tenure was two percent. Is showing almost no return
Speaker 2: you have to worry about you can until they call it.
Speaker 1: Yeah, and so we It wasn't like a lack of
Speaker 1: seeing things, you know, because e commerce was booming after COVID,
Speaker 1: and you know, everybody was believing that, you know, the
Speaker 1: future was e commerce and it still is. But people
Speaker 1: were locked down and behaviors were changing. People as they
Speaker 1: thought that would be forever. You know, we're never going
Speaker 1: to go to it.
Speaker 2: It went from this is temporary to everything's different.
Speaker 1: Now we will see the future, right, And I didn't
Speaker 1: see the future the same way because I live in Arizona.
Speaker 1: I was hiking. Phoenix wasn't closed. There was no clue
Speaker 1: to Phoenix. Sure so, and what happened is this phenomena
Speaker 1: of what took four years. The bcs were putting one
Speaker 1: hundred percent of the money to work in twelve months
Speaker 1: out raising their next fund. So there was a lot
Speaker 1: of fomo. And I have to admit that the fomo
Speaker 1: for sure caught up with me personally, so as schmuck
Speaker 1: insurance against me not writing checks, I did write. And
Speaker 1: I remember Packy being on Joshua Sure and I was
Speaker 1: making fun of the whole thing.
Speaker 2: Paki is great.
Speaker 1: I have twenty five K in one of his funds,
Speaker 1: and I was yelling at him. I'm like, you know,
Speaker 1: I gave you money. It didn't mean to just blow
Speaker 1: it in a casino.
Speaker 2: For people who don't know who pack he is, just.
Speaker 1: Give He's just a really smart young.
Speaker 2: Guy, got very young. He watched his first fund right
Speaker 2: into the teeth of the mess.
Speaker 1: Yeah, and so he was. He was really a fun thinker.
Speaker 1: And again we were all locked around house reading smart people,
Speaker 1: and he had good opinions and he was into crypto,
Speaker 1: and I'm not into crypto, so I said, I started
Speaker 1: placing personal bets with money that I had made just
Speaker 1: in case I was wrong, but not my LP's money.
Speaker 1: I wasn't willing to make crazy bets with LP's money
Speaker 1: that just goes to social This is what we called.
Speaker 2: The fun account pull off five percent trade away. If
Speaker 2: you blow it up, who cares. It's a small part.
Speaker 1: So one of the insts I got from my schmuck
Speaker 1: insurance money is that no, I was a schmuck for
Speaker 1: writing the checks, and the people that I gave the
Speaker 1: money to God blessed him as smart as they were.
Speaker 1: I think we're schmucks too, not like bad people, just
Speaker 1: caught up in the moment. Evaluations don't matter.
Speaker 2: But that's why we have schmock insurance and don't use
Speaker 2: our LP's money for these dumb ideas. At times when
Speaker 2: you think this isn't gonna work out, Yeah, but I can't.
Speaker 2: I feel like I have to still be in the game.
Speaker 1: Yeah. I feel our best work as a firm was
Speaker 1: not writing even though we had great returns for our
Speaker 1: first funds, I feel our best work was not writing checks.
Speaker 1: In twenty one and twenty two.
Speaker 2: That's what Buffett says is, you know, unlike the public markets,
Speaker 2: where you have to be invested, you could stand at
Speaker 2: the plate with the bat at your shoulder and not
Speaker 2: take a swin.
Speaker 1: Now and Treason's defense, he would argue for your timing
Speaker 1: the market. And so again, I don't know if it's
Speaker 1: right or wrong. And in a way I did time
Speaker 1: the market, and so maybe I just got lucky. But
Speaker 1: my beef for the last six months, and it's quite public,
Speaker 1: my beef is with my own industry, is that they
Speaker 1: were talking out of both sides, meaning they were writing
Speaker 1: those checks and then also say fed stupid things are overvalued,
Speaker 1: and I'm like, you can't have it both ways. You
Speaker 1: should have been.
Speaker 2: More so that what did you see in twenty twenty
Speaker 2: one that you thought was egregious and ridiculous? What were
Speaker 2: the signposts that led you to say this is just
Speaker 2: out of hand.
Speaker 1: Well, not meeting founders and just assuming that you could.
Speaker 2: Create twenty one at that point. Oh, it was worse
Speaker 2: because we were wide. You know, we're pretty open. By
Speaker 2: twenty one, we were open, but.
Speaker 1: The money was raised and being deployed, and no one
Speaker 1: was taking their time. Everybody felt like get this money,
Speaker 1: ye rush, and the LP's had it, the GPS had it,
Speaker 1: the media had it. And don't get me wrong, I
Speaker 1: had it, but I didn't have it with other people's money.
Speaker 1: I had it with my own money. So we probed right,
Speaker 1: Like I gave money to a lot of young managers
Speaker 1: just to see because I was a young manager myself.
Speaker 2: But that was like sixty seven years ago, right, you
Speaker 2: haven't been a young manager since World War Two.
Speaker 1: So no, but you know, and O five six, when
Speaker 1: I started wall strip and got the bug, I was
Speaker 1: in my you know, I hadn't seen that much. So
Speaker 1: maybe I didn't know what was going on. Maybe I'm
Speaker 1: the old guy. And so as I said, to keep
Speaker 1: that social leverage going, I feel the most important part
Speaker 1: of being an angel investor and I don't consider myself
Speaker 1: a venture capitalist. I consider myself a seed kind of more.
Speaker 1: An angelure is you have to invest, can't just commentate.
Speaker 1: And so by investing, that helped me see how dumb
Speaker 1: I was. And it's not that other people are dumb.
Speaker 1: That the markets are markets and they're open, but you
Speaker 1: could see the mistakes piling up and now here is
Speaker 1: where we're at.
Speaker 2: So so you put a couple of percent of you.
Speaker 1: Yeah, we've deployed thirty percent now but three year old fund.
Speaker 2: But but last year, with your own pocket, you put
Speaker 2: a couple of percent of your net worth. Oh yeah,
Speaker 2: what you call schmuck insurance is just hey, I'm just
Speaker 2: keeping a toe in the water. You didn't any big
Speaker 2: crazy bets.
Speaker 1: No, And I got very lucky because robin Hood benefited
Speaker 1: from covid E Toro. I also was an early investor
Speaker 1: in a couple of crypto funds that had Salana. So
Speaker 1: I mean, I was a lucky participator in this boom,
Speaker 1: which made me think maybe I had to speculate to
Speaker 1: just keep the oil going. And so I made a
Speaker 1: lot of personal luckily, not like anything significant, but it
Speaker 1: taught me a lot about what the end of a
Speaker 1: cycle looks like. So we just saw it.
Speaker 2: So here we are in the second quarter of twenty
Speaker 2: twenty three. When you look around, our evaluations remotely as crazy.
Speaker 2: It was a rough twenty twenty two for both stocks,
Speaker 2: bonds and private What do you see today and what
Speaker 2: are you looking out at?
Speaker 1: It feels like like I've been talking about for a year.
Speaker 1: I'm like bond boy, I never thought i'd be I
Speaker 1: never had owned a bond or a treasure.
Speaker 2: Hey, you could get tax free munis now. I don't
Speaker 2: know if Arizona does a lot of muni writing, but
Speaker 2: you know, if after tax you're getting four to four
Speaker 2: and a half percent, that's fantastic. You haven't seen that
Speaker 2: in decades.
Speaker 1: Yeah, four years ago I invested in Max my interest
Speaker 1: my friend Gary, because he was he was aggregating. He
Speaker 1: was sending out your cash to many different accounts and
Speaker 1: getting you one percent, and I was like one percent
Speaker 1: better than zero. So I invested in that company. No,
Speaker 1: everybody made fun of that company, right, and that was
Speaker 1: a company that's now important because you can get five
Speaker 1: percent on your cash on the internet, distributed through FDIIC
Speaker 1: through many.
Speaker 2: So it's quarter million per bank. So you're way way.
Speaker 1: Below software years ago. So again like it it just
Speaker 1: by participating in the markets, you see things. But we
Speaker 1: are in a much different environment than I've ever seen
Speaker 1: now because we have so much cash raise not deployed.
Speaker 1: The money is out there the young generation, you know,
Speaker 1: it's very mobile, they're very smart, and you know, it's
Speaker 1: just a confusing time because interest rates have shot up
Speaker 1: and we're seeing the first signs of breakage, right, we're
Speaker 1: seeing things break well.
Speaker 2: Silicon Valley broke that that was kind of a crazy
Speaker 2: run on the bank that you could blame a handful
Speaker 2: of venture capitalists for starting. I think they were trying
Speaker 2: to do the right thing by their by their portfolio companies.
Speaker 2: But you know, we could have just easily rowed that out.
Speaker 1: And well, I don't give them that credit. The Silicon
Speaker 1: Valley Bank left a black hole for nine months in
Speaker 1: the bouncy and the Internet found it. And when the
Speaker 1: Internet finds it and something tips, everybody wants to take
Speaker 1: credit or not take credit for it. The Internet found
Speaker 1: a hole, right, and it just imploded. Much like game Stop.
Speaker 1: Silicon Bay Bank was the opposite of Game Stop. Game
Speaker 1: Stop had a different type of hole. There were some
Speaker 1: people showing in short interests and they had models. The
Speaker 1: hedge funds had models that turned out to be outdated,
Speaker 1: right meaning wrong.
Speaker 2: They were wrong.
Speaker 1: The models were not accounting for eight million Robin Hood
Speaker 1: people clicking a green button at the same time, and
Speaker 1: that's what created game Stop. And the same thing happened
Speaker 1: to Silicon Valley Bank and ree everybody hit withdrawal at
Speaker 1: the same.
Speaker 2: Time, Silicon Valley Bank had hedges on their long treasury
Speaker 2: positions as long duration, which the long duration trade is
Speaker 2: the wrong trade while rates are going up, so the
Speaker 2: hedges offset that and they took the hedges off. They
Speaker 2: rang the bell and gave themselves.
Speaker 1: Get said it in Wall Street. They were wreckable. They
Speaker 1: left themselves wreckable, and they were the Internet wrecked them.
Speaker 1: The GameStop hedge funds were wreckable because they didn't understand
Speaker 1: Internet scale. They hadn't seen a model that had Robinhood
Speaker 1: people pushing this button over at the same time with
Speaker 1: lever on short term options. So their three standard deviations
Speaker 1: was an old model. That was it.
Speaker 2: All right, I only have you for a handful of
Speaker 2: minutes before you have to go to your next meeting.
Speaker 2: So let's jump to our favorite questions that we ask
Speaker 2: all our guests, starting with you know, you talked about
Speaker 2: being locked down and podcasting and streaming. What were you consuming?
Speaker 2: What's been keeping you entertained over the past couple of years.
Speaker 1: Well, I'm a media guy. I'm passing about like a
Speaker 1: twenty four all these like like a great studio producing stuff.
Speaker 1: So I'm a media hound. I watch everything on Hulu
Speaker 1: I ask you. You just gave me Daisy Jones and
Speaker 1: the sixth which is fantastic. And I know the guy
Speaker 1: at Amazon that did it. I actually met at my event.
Speaker 2: He's a buddy of my bat Nicks. I bumped into him.
Speaker 2: He reached our blogs Lindsay and Palooza.
Speaker 1: Here's what's so fun about our business?
Speaker 2: So celebrities reading me, Yeah, and they like me. When
Speaker 2: people reached.
Speaker 1: Out, freaking me out.
Speaker 2: So so Ben Klimber of Odinky told me a story
Speaker 2: when I had him on the podcast that he's running
Speaker 2: this blog on watches. It's kind of but not quite
Speaker 2: a business yet. And he gets an email from some
Speaker 2: guy named John Mayer who says, listen, I want to
Speaker 2: talk to you about watches. I got a bunch of
Speaker 2: watches I'd love to have stuff by. So he calls
Speaker 2: the guy back and lo and behold, it's not some
Speaker 2: guy named John Mayer. It's the rock star John Mayer
Speaker 2: who shows up at their studio brings him back. Then
Speaker 2: he rolled heavy, wrote a big bag of watches. Now
Speaker 2: security is a little different, and they that was the
Speaker 2: first talking watches and that blew up and became a
Speaker 2: regular feature. So when you put yourself out there in
Speaker 2: the public. You have no idea what's gonna what's magic.
Speaker 2: By the way, which I was writing in public at
Speaker 2: your Coronado Island event, is where I met the guy
Speaker 2: I would eventually hire and become my partner. And he's
Speaker 2: become I'm a star. Josh Brown is the partner Rehult's
Speaker 2: Wealth Management. But for you, I never would have met Josh. Yeah.
Speaker 2: And by the way, but for me writing a blog,
Speaker 2: Josh never would have cared who I was.
Speaker 1: The best part of my job and people won't believe
Speaker 1: it because I get the money. Is that you met Josh,
Speaker 1: is that we launched thousands of people on stock puts
Speaker 1: into investing, tens of thousands of people that my kids
Speaker 1: friends call me for how to do their who to
Speaker 1: get recruited at a health tech company. Placing young people
Speaker 1: in careers is the greatest feeling in your life. The
Speaker 1: COVID nightmare of kids working from home in zoom it depresses. No,
Speaker 1: we're not. It is the biggest problem right now. But
Speaker 1: we're already off topic. In terms of media. I love
Speaker 1: it all. I don't take a Jones, give me give
Speaker 1: me another one. Beef my friends at eight twenty four,
Speaker 1: So I.
Speaker 2: Just added that is that it's very dark and interesting.
Speaker 1: Yeah, and it's A twenty five is very.
Speaker 2: Good and very old. Guy who's on it is also
Speaker 2: very good.
Speaker 1: Very good.
Speaker 2: I haven't watched it yet.
Speaker 1: So someone who reads my blog, Robbie Nandne, who is
Speaker 1: a partner at A twenty four which was like the
Speaker 1: A sixteen Z date of Media Big Studio, and he
Speaker 1: just emailed me on my blog one day, goes Dad,
Speaker 1: I'm fascinating, you know, And I'm always fascinated that smart
Speaker 1: people are reading me. And you know, longtime reader, first
Speaker 1: time commenter, you get that all the time too, and
Speaker 1: it just amazes me who reads what I write? And
Speaker 1: I'm not so fascinating and trying to meet the biggest celebrities,
Speaker 1: right the fact that Robbie is a creator and did
Speaker 1: the Romi Show, and I'm fascinated by like media because
Speaker 1: I did it like myself, and I don't know. It's
Speaker 1: like it's like, you know, with the Wizard of Oz
Speaker 1: when you meet the wizard like you knows a s
Speaker 1: getting to see behind the curtain and realizing nothing's going
Speaker 1: on behind the curtain. You have to see it to
Speaker 1: believe my CBS meeting, as stupid as it was was,
Speaker 1: to have that meaning and be in that room, you
Speaker 1: can't make it up.
Speaker 2: I picture the episode of Seinfeld where they're pitching the
Speaker 2: Seinfeld Chronicles to NBC. To me, that's the show. What
Speaker 2: something happens, that's the show. Why are you watching it?
Speaker 2: It's on television not yet.
Speaker 1: So to know that I lived it. People can't take
Speaker 1: that away from me. And to know when to meet
Speaker 1: people that create great content. And we have a documentary
Speaker 1: that you're coming to see.
Speaker 2: So this is financial advice. You can say it on the.
Speaker 1: This is not financial advice. It's going to be fantastic.
Speaker 2: By the way, we had the Dosee guy at future
Speaker 2: Proof and it's it's like curby your enthusiasm for money.
Speaker 2: It's so cringey watching this guy go from nothing to
Speaker 2: the greatest dollary and then you're watching him blow it
Speaker 2: up and you ask a screen Adam, you know what's
Speaker 2: gonna happen. You see it coming, and he is just
Speaker 2: so oblivious to what's the freight train barreling down at him.
Speaker 2: It's very hard to take your eyes.
Speaker 1: Odds me making money or getting my money back or
Speaker 1: five percent zero show Labor of Love with Chris Temple
Speaker 1: created this incredible documentary. The reviews are insane. By the
Speaker 1: time this comes out, you will know that it is
Speaker 1: by Tribeca Film Things Right, it's one for one on
Speaker 1: my movie. I have a red cashmere suit to wear
Speaker 1: to the opening. What is the goal? My t score?
Speaker 1: My testosterone score. It's a new thing that I'm launching
Speaker 1: where people wear their te score around their neck.
Speaker 2: What is the what is the launch date of this
Speaker 2: is financial advice?
Speaker 1: The opening date the Tribecca debut is in June.
Speaker 2: Oh so you still have Monster? Yeah, so so so
Speaker 2: I love media clearly. Let's let's talk about mentors. You
Speaker 2: mentioned Fred Wilson. Who else helped shape your career besides Fred?
Speaker 2: Or Is Fred really the most significant mentor?
Speaker 1: No, obviously, I mean again, I don't speak to him
Speaker 1: all the time, but he allows me to check in
Speaker 1: and ask him questions. A lot of my LPs are
Speaker 1: my mentors, even though they give me money. I'm there
Speaker 1: like I've surrounded myself like Paul Grimberg, who's chairman of
Speaker 1: Exos Bank, and I've met.
Speaker 2: Some really interesting LPs at your last event.
Speaker 1: So my LPs are my mentors. Roger Ehrenberg, Brad Feld,
Speaker 1: people that trusted me, and you know, they don't They
Speaker 1: know that I'm weird. They believe in me, but they
Speaker 1: know also that I don't know what I'm doing, and
Speaker 1: so they pick up the phone because they to this day.
Speaker 2: Do you feel like you don't know what you're doing?
Speaker 1: Yeah?
Speaker 2: Are you really that deep into the imposter syndrome thing?
Speaker 1: No, I'm not deep into it, like they've not even.
Speaker 2: I joke about it. I'm like, I don't think it
Speaker 2: really exists. He's like, no, No, you got to talk
Speaker 2: to people who want sociopaths like you, it actually exists.
Speaker 1: Yeah, I think I'm I think I don't have it.
Speaker 1: I just have been humbled ridiculously a few times. That's
Speaker 1: fair that I have to be really careful and again writing.
Speaker 2: Both private and public markets are a very humbling place.
Speaker 1: Yeah. So if I'm Elon Musk and.
Speaker 2: You have a lot to be humble about is the
Speaker 2: old joke.
Speaker 1: So if Elon Musk, what bugs me about it is
Speaker 1: is there nobody whispering in his ear that he looks
Speaker 1: like an ass. I would hope that my wife and
Speaker 1: my daughter would come to me and stop me before
Speaker 1: I embarrass myself day after day. Now, is he embarrassed? No,
Speaker 1: So again, I'm not judging.
Speaker 2: But that's just hoping that he should be.
Speaker 1: I'm hoping that my wife and my daughter who read
Speaker 1: my blog will say, you're full of yourself. You need
Speaker 1: to tone it down and guess what, they're pretty good at telling.
Speaker 2: Me that that's the importance of having some no men
Speaker 2: around you. I tweet something that's tenth as idiotic as
Speaker 2: Elon Musk, and the the tweet is barely live when
Speaker 2: bat Nick comes storming into my office, idiot, delete that.
Speaker 2: You know that you're like junior partner here and I'm
Speaker 2: the chairman.
Speaker 1: I don't care.
Speaker 2: That's the dumbest thing you have a tweet. Take that down. Okay,
Speaker 2: I don't even think about it anymore. Maybe that was
Speaker 2: my response five years ago. Now Batnick says that's a
Speaker 2: bad tweet. I'm like, okay, I don't even think about it.
Speaker 2: It's automatic. What Elon Musk needs is a Batnick. If
Speaker 2: he had a Batnick, he wouldn't have pissed forty four
Speaker 2: billion dollars away.
Speaker 1: Well, he has people cheering him on.
Speaker 2: Yeah, he's the opposite. He has anti Batnicks. He has
Speaker 2: people the soulging his worst instincts, rather than saying, that's
Speaker 2: a lot of money for a really crappy property that
Speaker 2: nobody's ever been able to monetize and its business model
Speaker 2: is awful, and you're running two or more other companies,
Speaker 2: maybe you should just keep tweeting for free.
Speaker 1: Nobody said that that. Yeah. I wrote about this recently.
Speaker 1: We wanted to disrupt television and we got television times
Speaker 1: one hundred, so we wanted we wanted to get rid
Speaker 1: of Jim Kramer. We got twenty Jim Kramer with more
Speaker 1: power than we thought. That's what they would have. Jim
Speaker 1: Kramer is lightweight compared to the Chama, David Sash and
Speaker 1: Laughing el Mos, the Peter Thiels. You just don't know
Speaker 1: if they're happy about the system blowing up. You can't
Speaker 1: tell if they like it, and I guess we shouldn't
Speaker 1: like it. I love the system. I don't think it's perfect.
Speaker 1: I love the things work. They're not working great, but
Speaker 1: relative to everywhere else, it's a miracle.
Speaker 2: Jamath turns his business into a family office. I think
Speaker 2: he's happy with it. I can't. I can't tell you
Speaker 2: about everybody else. Some of these guys, I think if
Speaker 2: their daddy's hugged them when they were younger, we could
Speaker 2: avoid it a lot. I don't know a lot of adjida.
Speaker 2: I don't want to play pop psychologists to any.
Speaker 1: No one hugged me, okay, and you worked at all? Right,
Speaker 1: that's right. I did have Jack one time saying on
Speaker 1: Twitter to one of my tweets that I needed a hug.
Speaker 1: And I think one of the proudest father moments I
Speaker 1: had was that my daughter came right into the thread
Speaker 1: and said he got plenty of hug ah. So that's awesome.
Speaker 1: When your daughter is defending you to check its dorsey
Speaker 1: on Twitter her and he disappears from the conversation. He
Speaker 1: just never responded, can't respond. My daughter destroyed him. He
Speaker 1: didn't know what he was walking into this. That was
Speaker 1: my problem with Twitter. I go, Jack, you don't know
Speaker 1: how to use your own product. My twenty four year
Speaker 1: old daughter just shamed you off your own product. That's
Speaker 1: she's a great girl. Like she's great. She lives Upper East,
Speaker 1: so I'm really proud she's here. One of the proudest
Speaker 1: things I have. Yeah, So one of the proudest things
Speaker 1: I have is my daughter lives in New York living
Speaker 1: the entrepreneur as a father who's an entrepreneur, an American
Speaker 1: born Canada, but an American. To see to have your
Speaker 1: daughter live in New York, the entrepreneurial city in America, Huh,
Speaker 1: this is that's good, Daddy, she likes New York. You
Speaker 1: want your kid to like New York.
Speaker 2: You it's not for everybody. I try it, but right, yeah,
Speaker 2: or any large city like Chicago or my I.
Speaker 1: Was not the same city. New York is closest to
Speaker 1: being the same city. Ain't the same city.
Speaker 2: That's really interesting. Let's talk about books. What are some
Speaker 2: of your favorites. What are you reading right now?
Speaker 1: I have not read a lot of books in the
Speaker 1: last twenty years. Three books that define that I still
Speaker 1: remember vividly and as the Agasy book. Ob Yeah, the
Speaker 1: Shoe Dog Book, which is going to spawn one hundred movies, obviously,
Speaker 1: just his first.
Speaker 2: Yeah, that was that was good. It was good. I
Speaker 2: don't know if i'd call it great, but it was so.
Speaker 1: It was a business book, yeah, Meaning if you're an
Speaker 1: internet entrepreneur and haven't read Shoe Dog, you're not going
Speaker 1: to be a good entrepreneur. To see that he went
Speaker 1: ten years before he got to ten million in sales.
Speaker 1: These kids today with their global growth in the first week.
Speaker 1: So No Shoe Dog was great. Reminiscent of Stock Operator
Speaker 1: was great. There's just not that many books that I get.
Speaker 2: Hey man, that's that's three solid books right there. You're
Speaker 2: okay with it. Our last two questions, what sort of
Speaker 2: advice would you give a recent college grad interested in
Speaker 2: a career in either seed investing or venture capital.
Speaker 1: Well, first, be nice to your parents because you're gonna
Speaker 1: need capital, right, and the first thing is right, stop
Speaker 1: thinking about who's reading it. You know, we're an investment
Speaker 1: in Beehive, which is like a newsletter writing product, or
Speaker 1: whether you're going to do it on mirror wherever you're
Speaker 1: going to or Twitter wherever it's easiest. Start writing and
Speaker 1: stop worrying about who's reading it. Write what you want
Speaker 1: to write about, and that's how you build a domain experience.
Speaker 1: You have to have be passionate about something because that
Speaker 1: will help you see around corners. Whether if my son
Speaker 1: is golf for my daughter she's not quite sure yet.
Speaker 1: It's New York and it's like operations. If you don't
Speaker 1: do it and do it you can't possibly know that
Speaker 1: you're going to be good at it. So the faster
Speaker 1: you figure out something that you want to do, And
Speaker 1: I think the easiest thing to do is write that's
Speaker 1: something that people should do. The second most important thing
Speaker 1: is forget about the job title. Go work at a
Speaker 1: company whose product is flying off the shelf. So when
Speaker 1: we were kids, you and I and I was a
Speaker 1: stockbroker and whatever your first job was. You're a lawyer.
Speaker 1: Our job was to just follow directions right right, Like
Speaker 1: our job was simply you get out there and you
Speaker 1: follow this rule book and you make two hundred calls
Speaker 1: a day and so and so and so and so
Speaker 1: you know what I mean, like pick up that phone.
Speaker 1: We've seen the movies. Wait a minute, what's the.
Speaker 2: Question you used to get a grid? How many do
Speaker 2: an axe every call?
Speaker 1: And I forget the question? Yeah, what's the question?
Speaker 2: So what advice would you give these kids who want
Speaker 2: to start out? And see it our VC investments.
Speaker 1: So so the thing is you've got to go and
Speaker 1: not worry about the title. So that if you're not
Speaker 1: worried about the title, go work at a company whose
Speaker 1: product is flying off the shelf. Don't go push a
Speaker 1: rock up a hill. So forget about the title what
Speaker 1: your pay is. You are going to see things that
Speaker 1: you won't see anywhere else. If you work at a
Speaker 1: company whose product is flying off the shelf, there'll be
Speaker 1: so much work to do, they'll be you won't have
Speaker 1: to hide out. You could shine because there are holes
Speaker 1: to fill. So the biggest mistake young people make is
Speaker 1: they want to just get a job for a certain
Speaker 1: salary and work at a bank. Go like, whether it's Manscape,
Speaker 1: one of our companies, or whether it was the messaging app,
Speaker 1: whatever is flying off the shelves, Get yourself in that room,
Speaker 1: Take a maintenance job, take an office manager job, but
Speaker 1: just get in the door.
Speaker 2: And our final question, what do you know about the
Speaker 2: world of seed investing that you wish you knew seventy
Speaker 2: five years ago when you were first getting started.
Speaker 1: You know, luckily, I think it's such a new thing
Speaker 1: that I don't know if there was anything. I think
Speaker 1: that the thing that I got lucky more than no,
Speaker 1: is it was just the right time right like that
Speaker 1: there was people like Fred and Roger writing and Brad
Speaker 1: Felder writing. So what do I wish I knew?
Speaker 2: And I don't mean buy Apple at two dollars. I mean,
Speaker 2: what would have been useful earlier in your career that
Speaker 2: you now feels a bit of hard won wisdom.
Speaker 1: I think I got lucky because going to the market
Speaker 1: first and exit seeing how markets crash and really seeing
Speaker 1: like how a cycle worked before I got into angel
Speaker 1: investing was actually lucky. So I would say to those
Speaker 1: people who think they want to be seed investors, is
Speaker 1: open a Robinhood account, even if it's one like learn
Speaker 1: what it feels like to lose money. Learn what it
Speaker 1: feels like to both make money and feel you for
Speaker 1: it right and feel like you're an idiot, and that
Speaker 1: will get you a feel and now you know. Obviously
Speaker 1: you can go to Vegas or go on draftings and
Speaker 1: get the same thing. But those are very much not
Speaker 1: positive expectancy type things.
Speaker 2: Like the stock market, whereas the market is. Yeah, Howard,
Speaker 2: thanks so much for being so generous with your time. Really,
Speaker 2: this has been a delight we have been speaking with
Speaker 2: Howard Linsen. He is the co founder of stock Twitz,
Speaker 2: the founder of wall Strip, the managing partner and founder
Speaker 2: of Social Leverage, a pre IPO investor in Facebook, in Twitter,
Speaker 2: and the really the first check into Robinhood. Is that right?
Speaker 2: That's amazing. If you enjoy this conversation, well, be sure
Speaker 2: and check out any of our previous four hundred and
Speaker 2: ninety six discussions we've had over the past eight and
Speaker 2: a half years. You can find those at YouTube, iTunes, Spotify,
Speaker 2: wherever you find your favorite podcasts. Sign up for my
Speaker 2: daily reading list at ridults dot com. Follow me on
Speaker 2: Twitter at Ridolts, Follow all of the fine family of
Speaker 2: Bloomberg Podcasts at Podcasts. I would be remiss if I
Speaker 2: did not thank the crack staff that helps me put
Speaker 2: these conversations together each week. Samantha Danzinger is my audio engineer.
Speaker 2: Harris Wold is my producer. Attika Balbrunn is my project manager.
Speaker 2: Sean Russo is my researcher. I'm Barry Ridolts. You've been
Speaker 2: listening to Masters in Business on Bloomberg Radio
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