MARC ANDREESSEN, PETE BLACKSHAW

so very briefly it's 1994 and I'm my arm has been blown out I was I was pitching at Santa clar like little minor league baseball and there goes the arm and well there goes that idea so I'm going to be

a agent at IMG that sounds like a good career my buddies call me and say have you seen this uh this internet

thing uh and you know I'm ball player internet what what's that no this internet thing this Netscape this browser and there were buddies that were about three years older than me they

were probably 25 at the time they ran a multimedia video production shop right and we sat there for a whole weekend surfing this thing called the internet and Sunday afternoon at 5:00 after

several beers we decided we're going to build websites for people okay great you know and that started my digital career 20 years ago uh fast forward uh I was

chairman of adtec as many as you know many of you know about three years ago uh I see softwares eating the world and I started a conference called

app nation of which we've done 10 app Nation events so um thank you sir uh twice both uh earlier in my life and then later in life uh you've had a great

impact and uh I'm really glad you're here thank you very much and Mr blackshaw and we were just talking about this is yeah go ahead go ahead black Shaw come on yeah yeah

there it is joking it's a it's a a family reunion for Pete here as well as much as it is for me and I know uh so many people here are really happy to see Pete as I am thank you for coming from

Switzerland so with these two gentlemen here I feel very blessed uh that they've joined us for uh the inaugural Chief digital officer forum and I'm going to let you take it away and uh thanks again

for coming uh everyone enjoy dinner and enjoy the conversation Pete okay great um again yeah great to see some uh old friends and we're going to have just a a

good back and forth uh conversation and first thing I wanted to say Mark is just a thank you because back in um 93 first year business school at Harvard there

was some guy in the tech department that showed me this crazy thing it was a mosaic browser and I'll never forget there actually was video he actually had a video clip in there it was a very

simple piece of content it was just a toaster oven and the to going up and down but it was like a you know we all

have these aha Epiphany moments and um literally I think within a half hour I was at the business school newspaper the harbest and I just said I'm going to

write an article every week and I called it the surf report and it was that Mosaic moment that literally got me thinking about digital and I've literally not lost the bug and actually having talked to you just a few minutes

before this I kind of realize that we are still in just this incredible Renaissance of of of of innovation it's just a different different wave of technology so great to have you here

let's start by just um uh tell me let's talk a little bit about the firm sure um and what you're looking at and maybe a little bit about

just what differentiates your investment strategy relative to the zillions of other VCS that are out here yeah so my partner um Ben Horwitz and I started a venture capital firm we're coming up on

our 5year anniversary uh which for a company is you know for a Silicon Valley technology company is starting to be old age um for a venture capital firm is still very much a you know toddler you

know edging into uh into having a big vocabulary um we uh we have about uh $3 billion under management we uh have a team of about 95 folks um and we are

very aggressively and I'll I'll talk I'll close with introduction for the folks who are my colleagues who are here so people can meet them um and we're very actively involved in trying to find the best and brightest of the new

entrepreneurs um and the serial entrepreneurs um who were building the most interesting new companies um we think it's a really special time in the industry um we think in a lot of ways um

a lot of the ideas from 20 years ago are happening now um in fact one of our core theories is that every idea in the era that failed spectacularly was actually correct um

just in fact just I was thinking of my next book and it was going to be two Dam early yeah right yes exactly exactly exactly exactly exactly correct but two Dam early um and unfortunately in our

industry uh early is is is the same as wrong um but the ideas I can't tell you how many people come up to me who I knew in '93 '94 and like Facebook you know I had

social networking collaboration chat in 1994 nobody used it um and so um we think a lot of it's actually happening now right and and a lot of that is because ised Broadband a lot of that is the spread of mobile um and so we're

really looking we're looking for the killer apps uh we're looking for the killer entrepreneurs um you know we have sort of a platonic ideal of what we're looking for which is the technical innovator the Founder The Genius um who

then has the entrepreneurial gumption to start a company um who then has the willpower and determination of stubbornness to run the company yeah um and so we're looking for you know Mark Zuckerberg is sort of a case study of

this um Ben Silberman a pentrest is a case study of this in the old days uh you know people like Bill Gates Larry Ellison uh Andy Grover examples this and so we're looking for the really special people the really big Ideas the really

important companies the really powerful technology changes um it's a really fun I mean it's a fun it's an interesting business it's uh to be in Venture Capital because you have such an amazing license to go find the really crazy

ideas um and to you know literally you know give them money and see how they turn out and sometimes you generate smoking creators in the ground sometimes you know the rocket ship at least gets into orbit um sometimes it goes all the

way to the Moon um and uh you know we have incredible investors incredible Partners uh who are you know completely supportive of of of all these new companies and what's the mix between the

um entrepreneurs that find you versus you finding them yeah so we get inbound uh about 3,000 uh deals a year um through our referral Network and so those aren't over this gives you an idea of the level of entrepreneurial activity

happening in the world right now is we get about 3,000 uh entrepreneurs coming in who are referred to us by people we already know um and so that could be people we' worked with in the past or other investors um or um you know other

people the ecosystem um and then that's and then on top of that is stuff that just comes in over the transom but it's 3,000 a year that are basically it's it's a referral business it's a relationship business it's a referral business so it's basically 3,000 you

know theoretically qualified opportunities a year um of those about 6,600 of those are at the Venture growth stage so kind of companies where you might invest 5 to 10 million or above

out of the 1,600 a year we can maybe do 20 okay um and so uh we like to say our day job is crushing entrepreneurs hopes and dreams um know it's a bizarre business you you say

no all the time you get actually really it's very interesting actually you get very good at saying no um because you you ideally you don't want all the people you say no to to hate you um and so um uh you you turn away an enormous number of people but it's you know it's

the it's the diamond and the rough thing you're constantly looking constantly you know fil filtering searching um the other of course you know thing that you can imagine is you make mistakes um and so you know you you say no and then you

know Larry Page not in our case thank God but um we weren't around then but you know a whole bunch of venture capital firms said no to Larry Page and he went down the street and raised money for Google you know I guarantee you you know get three drinks into those guys um

and they are kicking themselves um and so the level of humility um and the level of uh sort of nose to the ground um and the level of mental flexibility to be able to wrap your head around

these new ideas now let's take the 3,000 and overlay this new Dynamic we were talking about earlier around crowdfunding yeah um how does that change the equation because here you

have a model where um you know you got kind of this uh many many points of of funding at the early levels you've got products actually being ordered before the before it actually kind of goes to

Market does that change the way you think about you know kind of running the numbers in terms of this has odds of success yeah so as everybody at this point probably knows what crowdfunding is or at least what Kickstarter Kickstarter is so the the idea of

crowdfunding we think is going very broad um we have an investment our company is called crowd tilt which is really much more broadly commercializing the idea of crowdfunding um interesting thing about Kickstarter is they have a very specific idea of what Kickstarter

is useful for which is which they basically is art projects and so they specifically exclude both nonprofit projects and for-profit projects which we attempted at one point to explain to them is in fact most of the world's economic

activity um and they were not interested so we said okay we'll go find another company um and so uh we think there's an enormous uh wave happening of

crowdfunding um examples of this um the uh in actually Hollywood the Veronica Mars movie I don't if that's is that you guys uh no somebody else uh Veronica Mar's Big T you know cult TV hit um the people involved in it had

been trying to cancel several years ago trying to get a movie made forever they kept showing up in Hollywood with the script the idea they kept getting turned down so they went on Kickstarter because it's an art it's an art project and they uh raised $6 million for the movie from

fans um by the way no movie right they haven't made the movie like they don't actually have you know contractor they don't have you know anybody signed up but they rais $6 million from fans who want to see the movie and they walked right back into the Studios in Hollywood

and I am reliably told that if you have a script in $6 million you have a much higher odds of getting green lit than just a script um and sure enough the movie's been green lit um there's an independent video game that's the

current record holder that's raised $26 million uh in advance of development um and then we're seeing a whole wave especially of new consumer electronics companies who show up in our office and they've raised 5 or10 million before

they even through literally pre-sales to customers before they' begun development um and before they've raised Venture Capital um it is an enormous uh well number one we think it's just a very very big deal because from an from an

economic standpoint you know so much of how the economy works so much of how all of our companies work so much of how all of your companies work is you have to guess what customers want right you you you design the product you know you try to do test marketing and all this stuff

but like fundamentally you know there's a lot of guess work that takes place you bring the product to Market you do all the advertising to try to generate demand and then sometimes you hit and sometimes you miss well with crowdfunding and crowdsourcing you can know ahead of time whether there's

demand for the for for the product which we think completely changes the nature of how you do ultimately product design marketing distribution changes relationship between product companies and retailers um in really interesting

ways um for us it's also very exciting because it's such a strong signal um because you know company walks in and you know same thing they walk in with $5 million of pre-orders it's much easier for us to be able to um you know to be able to to make the leap of faith and

that's actually playing out in terms of how you're doing the investment strategy no it's early right it's an early phenomenon um you know it's going to it's going to be it's going to be these things are always Rocky right and so like right now um there's like on kickstarter's example there's now a big

fraud problem right and so you know so first it's the people who raise 5 million for a product that they're going to BU Nexus to people raise 5 million for a product they have no intention to building um and so um you uh you know

it's going to be an adaptation uh an adaptation process um but it's extremely powerful um and we're we're seeing more and more companies that are coming in with you know serious companies with serious efforts and I think more big companies are going to start to do this I think you know companies athletic shoe

companies and video game companies and movie companies and so forth are going to start doing this a lot so let's go from micro crowdfunding to currency yeah how is currency evolving in the context

of how we pay for things evolution of e-commerce and the like uh you know is is Bitcoin for real yeah yeah so we talked you know you mentioned sort

of in 1994 and mentioned the Mosaic and Netscape early on my view is there was an original sin in how the internet got built and which is we didn't give it the concept of money um and we should if we had a time machine and we could go back

in time we could fix one thing about the internet we would build in money and that has played out in all kinds of ways um you know including you know the whole you know the whole you know the banner ad phenomenon and a desperate attempt to

you know monetize things because you can't collect microp payments um you know it uh has turned into you know e-commerce is much harder than it should be because you know 20 years into the internet consumers are still expected to type in their credit card number and the

code and the expiration date and the billing address and the shipping address and and then there's all the chargeback fraud um so there's all all these issues with uh with with with with with fraud um which is a huge issue for for

e-commerce um and so and and then there's you know even like even spam like the reason there spam because it's free it's basically free to send out bulk emails if there had been a charging mechanism in place you know if you could charge people to put an email in your basket if you haven't previously

communicated with them you could essentially eliminate spam and we just didn't like we literally like just didn't have time we didn't have um uh you know it was mostly academics at one point and so money was not you know the

thing that was high up on the list to build in um so this is where Bitcoin enters the picture um so there's a whole bunch of innovation happening at payments um and a lot of it is is very practical and can be used today and we have a bunch of very interesting companies but the big big thing

happening right now is Bitcoin um and this one is real is is we think Bitcoin is extremely important it's very challenging right now to talk about Bitcoin number one because it's because it's very complicated and nobody in the Press understands it yet and so just

take whatever you've read in the press and just ignore it because they literally don't understand it um and then um two is the Winkle bosses are supporting it

[Laughter] um and I can't tell you how painful that is um we literally we set up a call with our we we were about to start making we're about to start making investments

in Bitcoin a while back and we we were going to set up a call for our investors because we had to explain to them like what we're doing investing and essentially what is a madeup fake cryptographic currency um and we had our explanation we had you know 80 slides and we had the

whole thing all completely explained and then 3 days before the call the Winkle bosses announced they were supporting it and we get on the phone and we're like let's start with the Winkle bosses um and then let's work our way backwards so

notwithstanding that that aside little yeah so um it's like Bernie M off comes out in favor of your mutual fund just a bad just a bad bad it's it's just a bad scene but this is a real deal not

withstanding that it's it's a real deal um and so it's basically if the internet had money it would be Bitcoin um and so if we knew what we knew if we knew then what we knew now we would have built Bitcoin in from the very beginning it would have literally been Bitcoin um it

only got invented a few years ago it took a long time to figure it out uh but it did get built it is the ideal Mash of money to the internet um it is a really really elegant amazing system um and uh

we think it's going to be a really big deal um the capsule explanation for why it's such a big deal is U basically it's being repres it's part of the pr press represents it as a currency and there is a currency but the currency is not the

main thing the main thing is think of it as a distributed Ledger um so think of it as literally an internet of money so think of it as a ledger that's spread all across the internet all over the planet and basically anybody in any

country at any time can put value Into The Ledger like in paloalto and then somebody in you know Shanghai you know 2 seconds later can take money out of the Ledger um and it just works it's

completely cryptographically secure the you know exactly who put the money in you know exactly who's taking the money out that the money can only be put in or taken out once um every individual entry in The Ledger has complete Providence so

you know exactly who's dealt with each piece of currency throughout the history of that piece of currency um you completely think so think about the things you eliminate you completely eliminate uh all the crossborder trade all the crossb currency issues you

completely eliminate currency exchange um you completely eliminate transaction fees and you completely eliminate uh fraud uh charge pack fra um and so and then and then you can do this all the way you know credit cards you still have these minimum thresholds

for the size of the transaction like below three bucks it becomes economically difficult to the transaction Bitcoin you can take it all the way down to micro pennies um and it works just as elegantly as it does for for $10,000 but the generic label for

this is you call it cryptographic currency cryptographic currency the yeah so it's the same technology that if you use it's the same it's the same technology used for e-commerce you know when you go to a website and you have a cryptographic with a secure connection

to send your credit card number it's that same kind of math but applied to this much deeper idea of of of of money um this is going to be a big deal this is going to you know this is already attracting enormous amounts of debate

from a regulatory standpoint uh this was actually a big week for Bitcoin this week Ben beri uh there was a Senate hearings on this topic and Ben ber he wrote a letter and he said he thinks it's for real and he thinks it has very real applications um a bunch of

government agencies this week were very Treasury Department was very supportive of it um and then the other really interesting thing so that's like in the US you know in the US we're lucky we have a you know relative relatively good currency then think about all the countries around the world that have

terrible currencies and terrible governments right and so think about being in Cyprus right or think about being in you know um you know many other countries that just have you know think about God help you know Venezuela you

know with hyperinflation um uh there Insurance what's that it's a form of insurance yeah exactly right and and you know think of the alternative you know you know at first blush again it's like it's it's it's it's a currency made out of math and so it's literally a string

of numbers and so how could that have value and it's like well how else are you going to store value you know you basically gold you know uh art you know the the the the number of mechanisms to be able to travel around the world with

value is actually very limited and this one works incredibly well so we think it's be a really big deal it's going to get built into all kinds of applications and services it's the very early stages it reminds us a lot of the internet 93

right which is everybody's kind of like you know really like seriously um and uh you know sometimes that means something really is crazy but sometimes it means it's for real so did everybody get that

cryptographic currency exctly that's a good one ask all the nerds in your life now let's pivot to ask your 14-year-old Sons now let's pivot to one of my favorite subjects sensors yes okay and I

remember when I was leading digital at PNG we'd bring in Paul safo from Institute for the future and he would swear that was the next big thing um but I don't think any of us have really felt

that until just the last 12 months or so because we're all wearing you know variations of this um price points are going down is this the real deal and where is it going to go and and how is it going to kind of change our world

from a from a well from many different angles starting with big companies that are you know selling products like ours yeah so sensors so basically sensors have become chips or chips have become sensors and

so there's this huge Revolution happening in semiconductors companies like Qualcomm and Intel that are building sensors into chips and turning uh chips into sensors and so the price of cameras you know you see this with every device you buy now that has a high

definition camera in it um uh you know so cameras and then all kinds of other sensors uh location sensors um you know and and uh you know pulse monitors and all kind you know all kinds of things

the new Beacon functionality in the iPhone is another really good example um and so sensors are getting incredibly cheap and therefore sensors are going to be everywhere basically chips and sensors in literally everything um you

know a lot of that you can kind of see cheaper and smaller cheaper and smaller and and and exponential growth um um exponential growth of of uh of units and so like cameras are an obvious example right I mean the the the planet is being

blanketed with cameras um on the one hand you know Orwell was right um in that there's going to be cameras everywhere and we're going to be watched everywhere on the other hand Orwell was wrong because we are also ourselves all going to have cameras yeah yeah um and

every time you know every every every you know in the future all interactions with police officers are going to be recorded by several different video cameras uh for the purpose of subsequent you know court cases and arguments um there's a by the way those of you don't

there's a whole genre I have seen big brother and it is me it is it is there's a whole genre on YouTube of um of traffic accidents in Russia um which is just absolutely fascinating because it

turns out because of all the insurance fraud because of all the all this insurance fraud in Russia um become very common in Russia now to have front and rear M actually Russia and Los Angeles

um are the thank you that's my in all seriousness um and uh so in Russia they'll drive around now with cameras running fulltime uh forward and back on every car um and so every accident is on video which is why they had the footage

of the meteor when it landed is because all the cars it was all the cameras mounted in all the cars and they had a whole bunch of footage of that so so imagery is everywhere um uh from a health and wellness standpoint um you know these gizmos which I know a lot of

people here have uh these gizmos are going to be packed with sensors uh in the future um and so these are going to have you know every these are going to these these this is a job on up there's other products Nike and Fitbit and others they're going to be packed with

sensors for things like pulse and blood pressure um and they're going to be used for a wide variety of Health applications Wellness applications um and then there's my favorite example which is a company we're not invested in

but I'm just completely fascinated by which is a company called Proteus Health um which is putting a sensor in every pill um and it's it's really interesting cuz literally is putting a chip in every

pill now the chip is Tiny and completely completely digestible which is important um but that's not the funny part the funny part um is that the way this thing works is they put a chip in every pill and then you take the pill 2 minutes

after you take the pill it's dissolved enough where the sensor comes in contact with your body and then if you remember from being in science class as a kid and you built the potato clock where you have the little digital clock and then you you use the the the literally you

plug into potato and the potato is the battery um your body is the potato in this case um um and um this little chip in the pill literally lights up for 2

minutes and sends a uh basically a signal um out to your um your armband or your Smartwatch or your smartphone and basically says you know essentially says hello I've been swallowed like I I I I

am a pill and I am currently being digested um and it turns out in medical care this would be a very very very big deal um for example there are lots of medical protocols where the frequency and the Precision with which people take

their pills uh take their meds has an enormous outcome um on on how they do with you know with very serious conditions um but then apply obviously this concept more broadly um there's no reason the same technology over time

can't get embedded into all food um and when it's embedded into all food then all of a sudden you're going to have a completely Quantified uh experience right like for example this thing right now can track in great detail all of your physical activity all of your

motion all of your sleep um it's going to be able to track things like pulse and blood pressure in the future it but it can't currently tell what you're eating you have to tell it what you're eating um and in the future there will actually be an opportunity to have a completely different approach to food

and nutrition as well as Medical Care based and this kind of thing by the way next to my sensor is my rainbow loon um bracelet that my daughter made for me did you guys invest in these guys we have not

yet cuz if you didn't that was a big miss you know this thing is there a chip in there and it talks to you is that all I know is that my someone gave my wife one of these and my daughter was just on

fire and there's all these videos on YouTube they kind of show them how to do it and so when she went back to the states she kind of came back with like all this like Contraband uh uh rainbow loon stuff she's been dishing them out

all over great example though just of kind of an you know analog you know analog kind of a toy that just is like it's very color coordinated with your

it's very she's very good oh yeah if anybody wants to you know start a fundraising thing um let's um let's talk

about TV um media content where um what are your thoughts on the evolution of uh of TV as we know it today so I think there's no question we're in a golden age for television um I think

it's it's just absolutely extraordinary the the the creative art of Television is just absolutely extraordinary um and I think you know the people in the audience know a lot more about this than I do but I think the business side has gotten a lot more exciting as a consequence of all the new distribution

Technologies yeah you know a few years ago friends of mine in the TV business were saying that TV's doomed because you know there's not going to be a way to make money once DVDs go that's it and now there's all these new revenue streams from places like Netflix so I think we're in a Renaissance of of

television from a production and creativity standpoint um that said I think the Cable Bundle is on the verge of collapse like I think it's melting like an ice cube and at some point it goes critical um and I think that the

odds that in you know and I don't know exactly what time a time frame I it's going to it's one of these things it's like the old um remember the old day remember the old remember the old day in the old days in the old days when you used to get your telephone service it was from one company called AT&T you

used to lease you remember you used to lease your telephone from AT&T um and then um the telephone came in one color black with one cord 10 ft um and AT&T technicians for up and down that if you

plug any other phone into the network it would kill the entire network um a friend of mine was at AT&T we were talking about this yesterday and she pointed out even 20 years later when that whole regime had long since uh

Fallen apart there were still 3 million people in the US who were still leasing their Tel there I think there are still 3 million people in the US today who are leasing their telephones right which makes no economic sense at all and so I think the cable bundle's going to follow

a very similar path um you know I think every day that goes by there's more content in the bundle that's now available outside the bundle and every day there's an announcement you know you know yesterday was the announcement Direct TV is making 30 channels

available out you know streaming outside the home on top of the I don't know 80 channels or something that available in the home you know HBO shows are now available on iTunes which didn't used to be the case um you know more TV shows are getting their own websites and all

the contents being available made available you know streaming websites and so I think this kind of you know one- siiz fits-all cross- subsidized you know 15% annual escalation pricing scheme uh connected to linear

programming connected to cable or broadcast Technologies it's just it's just not the future yeah um the future is internet streaming distribution um this is obviously a gigantic technology

change it's a gigantic business model change um I think it's going to be a big deal yeah I agree too I um you know haven't been a digital passionista I always found myself in an antagonistic relationship with TV because that was

the budget I was always trying to get and then um when I had sold my company to neelon I started to dive into their data I was always kind of amazed at how the TV consumption was actually going up

M um and that's partly because in a world of fragmentation these devices allow you to consume tv anywhere whether it's the bathroom or whatever it might be um and that creates you know huge

opportunities it's just not the same Central centralized model that we had before the other thing that I found interesting is um you know I think there is this emerging story around the

convergence of digital and TV from a um especially from a social perspective so it seems like everyone from um you know Facebook to to Twitter

um you know even Google have a story about how um you know uh the digital elements kind of complement the TV and I and I buy into a lot of that um I do

think it creates some very interesting questions around um what type of programming is going to be most relevant to drive those synergies like from a Nestle perspective I'm asking myself is

uh you know you know maybe it's live programming because that's where you're going to you're going to kind of maximize earn media impact off of the programming element because of thef on Twitter and the like um yeah I think

live programming is become much more important and valuable and then I think also um I think sponsorship I think there's a return to the 1950s um that's going to happen uh obviously product placement has become much bigger uh

recently but uh sponsorships it's going to make I think it's going to make a lot more sense you know I was thinking about that because uh we do the um we sponsor uh Roland garos and um uh tour to France

and then most recently uh uh nepresso um spor sponsored the uh the America's Cup and I've got this great photo not withstanding the fact that our team lost um the uh great photo of like I think

the last day I think every single person had a camera phone yeah right you know and what I've been kind of thinking about is like what's the incremental value of the earned media in a world of sponsorship so we make it can kind of go back to your point about you know

certain things that we dismissed at one point might actually be more valuable especially as we develop better better me measurements for kind of you know understanding the uh the upside yeah and then blend even then in that case like

blending of professional content a professional event with all the amateur footage right so one of the things there's a whole bunch of attempts people haven't figured this out yet the killer app hasn't emerged yet but if you just you like everybody in a crowd has a camera phone everybody's taking photos

and video one of the things you should have out of every sporting event is you ought to you you literally have a comprehensive video coverage of everything that's happened and there ought to be a way to pull all that stuff in right off of everybody's phone and create a composite of the entire thing

and be able to like view things from every angle from every angle yeah and do all that stuff and and there's a whole bunch of entrepreneurs that are trying to build apps that do that it hasn't yet been cracked but it's very it feels very close the key is to figure out how the

sponsors get comfortable with those alternative models because a lot of them are almost like these choke point models that really kind of limit you know how you um integrate the user content into the into the programing we see a lot of

that with the Olympics right right but that's where you that's where if you build the brand into the event itself right then it's part it's sort of you know what's the best right the I my view like the best advertising is content right I mean the be the the the best way

the best way is to be so deeply embedded that you're actually you're part actually part of the valuable content um and in that case if people want to film it from 80 different angles with you know 60 different Instagram filters you know let them have it so let me ask you

about um you know put yourself in my shoes so um lead digital for Nestle and just to kind of put things in

perspective we sell 1.2 billion products every day in social media on Facebook alone we're publishing 1500 pieces of content every day that's before you

count comments and reactions and all that stuff [Music] um you know how do we um you know how do we uh you know we just created a Silicon

Valley Outpost a couple of our folks are here that are leading that effort you know what role can we play with the VCS you know where where do we add value

where do we slow things down how should we be thinking about um you know connecting with you know not only kind of the The Proven startups but maybe you

know the ones that are in that 3000 list that might have some strategic relevance to our bus yeah so I think there's ACH I think there's a bunch of things and we're focusing on Healthcare big time yeah yeah so I think there's a bunch of

things so I think that I I think especially the kinds of companies represented here tonight have an enormously important role to play the way I describe that is um all the companies all the startups we deal with they all have this incredibly daunting problem which is they've got some you

know what they hope is an amazing new technology but the world is a gigantic place and how are they ever going to actually get this technology out to the world are they ever going to have an impact on a on a broad scale so it's not just a new gizmon lab somewhere that

nobody ever sees um and so you know it's so funny when you're in a big company it always feels like we can't innovate fast enough or it feels like we don't enough new ideas when you're in a startup it's always like oh my God we can't actually get to Market we can't ever actually

have the impact that we want to have and so we believe there's an enormous uh collaboration opportunity um between the best Leading Edge technology companies and the best big Brands and the best

agencies um and the best retailers and you know the best the best of of U of of big companies um you know there's obviously a bunch of ways to to to to screw it up on both

sides um we we can talk about those at length um the key to it uh we think on the on the the way to do it right is have to have the right kind of communication that have a lot of communication um and so we would

certainly encourage uh obviously people on the ground especially here I think is a very good idea um you know face FaceTime is is the heart of this um one of the things we encourage um we think

uh more big companies ought to do two things uh in particular um one is there ought to be a lot more rotation programs in our view if I were if I were running a big company or all the big companies I'm involved in basically have a as part

of the career development path for all the up and cominging folks in the company um have them rotate through the valley or have them rotate through Tech or have them rotate through uh you know the the whatever the new you know sort

of the new ideas Hub is uh for the business and so have it you know so not necessarily not necessarily lifetime appointment but you know some cases that works well but um you know have it actually be like a rotation program we

have to make sure they rot back yes yes yes yes yes that that is that is also an important part um the other is I think corporate venture capital is really underutilized um is a really

underexploited opportunity for for all sides corporate Venture Capital has had historically a bad reputation because what's happened is when the stock market is booming and when silicon Val is on fire a whole bunch of corporate uh a whole bunch of big companies launch

corporate Venture Capital programs pile a ton of money to startups and then just get slaughtered um or they send the startups in the wrong direction yeah well well yeah so they lock their hands yeah there is that yeah the terms the terms that can come with that so there

sort of and then they and then of course then what happens is and this happened in in 2000 a bunch of corporate VC programs had taken apart and then people pulled back of course um you know buy high sell low um and then and you know

when it would have been a really good time to invest between you know 2005 and 2009 they were gone but I think that's because the motivation was too profit oriented ironically um I think the purpose of corporate Venture Capital

should be strategic um and should be precisely around your question which is how do we plug in all the new ideas um and it's the same you know it's the same thing I said with the Veronica Mars movie like showing up with like you know hi you know I'm here and I want to talk

is is the only better than that is hi here I want to talk and I have a checkbook um and speaking you know as a venture capitalist on behalf of the Venture Capital Community you know we don't necessarily want we would necessarily want big companies to

compete with us but our companies end up raising over time lots of money our companies end up having lots of Partnerships with big companies that they can work with and having an appropriate investment role um I think can be very good it can be a hook um you

know to make these relationships uh serious um so I think there's huge um there's huge uh underexploited opportunity um and then yeah just to acknowledge on the on the downside you know the down you

know couple pieces of downside I mean one is one of the things that goes wrong is you know small companies are small companies and so sometimes they blow up and sometimes they fail or sometimes they don't live up to their obligations and one of the things we we work with our portfolio companies a lot on is when

you tell a when you tell Nestle that you're going to do something like you have to be serious and we have to be serious as your investor behind you uh you know that this thing is going to work uh the other side is you know big companies do have a tendency especially

the really big ones I do have a tendency to smother uh startups to death um and so you know we're the 30 people from Nestle and we're here to help you um is not necessarily uh as attractive as

we're the two key people from nesle and we're here to help you um and so U and and I think big companies the best of the big companies are getting much better at that I think that's that's that's becoming people are becoming

sharper in the I'll just give a we work a bunch of companies but GE has had taken I think a very very good approach out here uh Comcast has been very effective um I think that uh uh who else City City Bank actually has been

extremely effective for Motor companies been out here a lot um and so there are more and more case studies of how this has done really well and what's more important the investment side or just being a really good customer oh uh moves

really fast being a really good customer the the interesting being a really good customer so Scott McNeil used to say the best strategic partnership is a purchase order

um and that is hard to argue with um uh so so being I mean being a customer um uh um Arnold rosstein said on Boardwalk

Empire nothing says I'm sorry like money um so um uh that is very valuable but that said it's you know it's not always the right time at the point of contact First contact with the company of like

okay you know hand over money may not be ready yet um the thing about the investment is it helps the investment as a catalyst to build a relationship um and that is a very big and by the way this is the other thing is I'm not talking about huge amounts of money I'm

talking about you know rounding error on a rounding error on big company balance sheets as a hook uh for the conversation of startups and then with the very nice side benefit of the conversation the relationship deepening over time obviously then

shared success um you know when things work then you know obviously the there you know there's there's Mutual success on both sides and then kind of setting up the right Dynamic um you know setting up a collaborative supportive you know

high bandwidth communication Dynamic to then ultimately do business together okay yeah I am I remember when I um had started a company in 2000 that uh boy

it's just uh you know there were some companies that just would help you move fast they'd kind of pay an honest you know kind of honest invoice so to speak yeah um and

then a lot of the big companies just strung you out and um or maybe had an elevated sense of the value that the name brought um and I think what entrepreneur is they need um you know

the customers early and they just got to also move really fast sometimes the selling cycle would literally would bury the companies and we were lucky enough to have a few customers that would allow

us to move relatively fast but I uh we you you learn some really harsh lessons and what I've been trying to think from a Nestle perspective is that okay you know given my own entrepreneurial experience like what's that right

formula where we can really you know add value or to kind of a a clear clear exchange well the other thing is right um you know big big companies obviously used to deploying large amounts of money um you know for startups for a brand new startup you know a million dollar order

is like a big deal um early on and so you know in a context of a large marketing budget right that's just in context it's a small amount of money and so and and a lot of the marketers a lot of people in the room you know do you you have you have allocations in your

budget for experimentation and for trials um and I think that's an incredible opportunity um both to explore these ideas as well as to work with these startups early on um and so it's um but but having a different

expectation on that having a different uh interface path you know kind of your point a different decision-making process uh to be able to really make sure you're connected to the new ideas and that the companies you're working with are able to move fast despite the fact that you know they will typically

have fewer employees than you have people use end of the meeting um quick word on content I'm sure uh I was in here earlier I saw some of the tweets but I'm sure content was a big theme but

um huge number of players um quite a bit of fragmentation will there be a ShakeOut or we going to see more consolidation in that area um I just got back from Salesforce um their event and

you know they got the big players like buddy media and Oracles in that business but you've got a lot of small Niche players out there we just going to see a lot of um you know Innovation there before it consolidates or any thoughts

there yeah so I think well I think on the professional content side I think there's going to be an explosion of sources um like so for example in the news business right the the the news industry across all the different forms of media I think is is actually it's

actually it's another Back to the Future thing it's actually going back to the 1930s and before um right so the phenomenon of three broadcast networks and you know and three cable news networks and one local newspaper you

know is really only an artifact since the 1940s 1950s um back in the 1930s and before you know every city had 5 10 15 newspapers um if you go back actually even earlier in time uh in the colonial

era like there were lots and lots and lots of newspapers right all of which had a very distinct point of view um you know there were pitched ideological battles between them you know very much like what you see with with you know with blogs today um and so because

Distribution on the internet has taken you know is it cost zero uh there's just going to be an explosion of voices there's be explosion of content providers there's actually tons of startups there's tons of new media companies being formed U BuzzFeed is

probably the best in class right now um is the one we probably have you know the think is sort of the leading sort of uh example of what's possible but there's you know there are many many other uh fantastic ones that are growing up you

know are you going to get another Time Warner out of it not necessarily um on the other hand maybe was Time Warner an artifact of the 1950s to the 1990s you know possibly right and maybe we're just going to be in a more fragmented World

um the other side is I think content you know we've lived in this world for a while where content only comes from content companies I think content is going to increasingly come from everybody we're actually an example of that we actually hired uh we we hired a reporter U at my Venture Capital firm

and I can I can give guarantee you based on that experience if you want to get the attention of every reporter in the world hire a reporter um it is like high alert

antenna go up um dogs watching television oh my god um every other reporter called us and was like why did you hire a report is like the most exciting thing um that that that we've

ever done um so like we're in the content business and and why are we in the content business interest just bring in a big reporter from like uh oh did they oh I actually didn't see that yeah well so these time Twitter has had you

know and Tumblr and a lot of these companies end up and Google end up so and and and we're not the only other Venture Capital firms recently that have HED reporters so it's I would say this goes back to kind of you know the best

advertising is is good content um you know why do we need a reporter uh we need a reporter because the stuff that we do is complicated and new you know things like Bitcoin um and we you know we we we we have to do better than

cryptographic right yes we need to explain it in English uh to normal human beings um and so you know but look we think we we think we develop a deep understanding or at least we try very hard and then we want to explain we want to explain these things and these things

are complicated and the world's moving fast um and so we're trying to take more responsibility to being able to articulate complex subjects to to uh uh to large audiences um and so I think that you know the spectrum of companies

that are going to be involved in in in literally you know it's like you said you know the number of like you said the number of posts that just Nestle does on Facebook um I think uh I think every company the communications the communications functions in many companies has been try to get reporters

to write try to get reporters working for you know new newspapers to write the right things I think increasingly is direct communication now let's go from reporters to just uh um you know the rest of your team or staff I mean what

are you looking for when you're recruiting your talent um you know I think we're all probably asking questions about what's the formula for um the teams that we build you know we looking for folks that have been in the

company for a while are we looking for entrepreneurs um are we looking for I often ask myself I I I talk a lot about this notion of what I call digital dualisms which or these tension points

you know integration versus stimulation and often times I'm kind of looking for that stimulant that really kind of uh shakes up the uh shakes up the organization knowing that eventually it kind of all needs to kind of integrate

but when you're recruiting for you got a couple of your colleagues here um what are you looking for well there's what we're looking for and then there's what all of our companies are looking for um let's cover both yeah so we're looking for we're we're small we're I mean we're

small I mean we're large for a venture capital firm but we're small for a company so we're 95 folks you know and kind of our Global World ambitions maybe we'll get to 130 or something right so we're not we're not looking for huge numbers of people and so we're looking um and I'll I'll talk about my

colleagues in a little bit but we're we're looking for people who are really sharp and have their nose to the ground and really understand what's happening um and so we tend to hire actually a lot of people out of tech companies exactly

exactly um and uh you know part of it and part of it is you know the intellectual content of the changes that are happening uh and deep technology implications and then part of it is a social for us is a social exercise which

is uh you know it's it's because of the referral Network um you know it's knowing everybody turns out to be an enormous part of what we do um and so um getting enough people the founders of the firms are are introverts um and so

getting enough extroverts in The Firm um who can be at all the events uh and and meet everybody and know everybody uh is a really big deal collaboration is a really big deal team players you know we're trying to operate uh as a single

firm so you know what's interesting about that I was um we have one of the largest uh kind of implementations of U chatter similar to Yammer but it's basically an internal version of of

Facebook and L as I've been kind of looking at résumés and kind of building my team I've been spending more and more of my time looking at the um the employees chatter profile which is pretty interesting because you can

actually get some really good it's almost like an internal version of LinkedIn are they high in influence are they promoters or do people actually like their content and you can actually learn a lot by looking at social media

patterns cuz for me what really matters is I mean I really do believe in the sharing philosophy if you're not good at sharing especially in a large radically decentralized company like Nestle you're

off the list y I mean you're off the list because you want people that really are very very good connectors good sensors and they're just really good at very intuitively kind of trading

information and I so I think your rule applies as much to the large you Enterprise maybe more so in the large Enterprise where a lot of us kind of desperately need external Focus so um

yeah any other points on Talent now let's talk about the company side yeah okay so on the company side the war for talent is even more int than it was in the late '90s um it is just at an absolute fever pitch um all of our

companies are just dying for people um and in particular it's actually across domain it's you know programmers is sort of the classic but it's also designers and it's data scientists and it's product managers and by the way it's also sales people marketing people and

PR people um and uh there's for all of us Finance I mean it's it's it's uh it people are dying it it's it's an enormous problem it's an enormous challenge if we had three times the number of people in the valley with that those skill sets we could easily have

three times the amount of output in terms of both innovation in terms of companies and so people are just dying um the thing we've been working a lot on which is I I think maybe an interesting

broader topic is with our companies is um in our you know our companies all have this problem called too hungry to eat right which is they're just so desperate for talent that they just need to go get somebody who has a specific

skill set today um and so they all go try to recruit essentially from each other um and so it's this giant Feeding Frenzy where you know they're all trying to recruit from Google and Google's all trying to recruit from them and it's just kind of this this nightmare um a

dystopian kind of Labor Market it's like uh these companies are ripping people out from each other all the time um and I always what I'm looks a lot like Facebook four years ago yeah yeah yeah like literally a lot of yeah and and and

Facebook looked a lot like you know Google at one point and and this the cycle kind of the cycle repeats and there's something to that which is you know the people who are really good are able to fully maximize their skills and their Opportunity by going to these

different places and you know there's a magic to it but it's really brutal um and you know it's hard to run a company when you don't know if you're if you're if you're if you're resting on a stable Foundation of people who are really loyal and really with you so we've been

telling our companies is something that I think needs to happen across the entire economy more and more which is number one sourcing the idea of sourcing has to change and in particular college recruiting has to become much more serious for many companies and in

particular college recruiting outside of the specifically outside of the IV League frankly out outside of you know there's six or eight or 10 schools um that everybody focuses on this is true to a shocking degree in Silicon Valley

you would have I would have never imagined how focused Silicon Valley would be on the IV League um which you know is sort of you know Prides himself in being anti-establishment to a certain amount and like we just die to get people out of Harvard and Stanford and

it's like you know there's actually a very large number and first the banana Slugger before a Harvard guy got it got it got it U well I mean they're fantastic I mean the reason why you want to recruit people out of those places um is is because they're you know they're so well selected and then they're so

well they're so well educated um but there's an enormous number of schools and in particular state universities um and then there's so many smart people coming from all over the world now coming out of the developing world and coming out of China coming out of India

and all these countries and so go more broad um and having a much broader intake uh especially on younger people is I think a very big opportunity but requires a big investment you know think of from a startup standpoint this is something we try to help our companies

with because it's very hard you know in the middle of everything you're trying to do is a startup to try to go figure out how to recruit at you know 15 different state schools so one is the intake and then the other is training and development um I I think our

companies systematically are too weak on helping people evolve in their careers and develop new skills and I think that same thing is true across the entire economy and you almost can't be too good at it um the class example in the valley right now is everybody needs mobile

everybody needs iOS programmers and so everybody's out trying to recruit the same it feels like there's only 3,000 like iOS programmers in the valley and everybody's trying to recruit them all it's like well you've got like you know you've got in a lot of these companies you've got Java programmers and you've

got PHP programmers and you've got web programmers it's like you know take you know four months and and we actually there's a there's a a training company we work with called Big Nerd Ranch um and um they're spectacular they

literally are like it's Big Nerd Ranch it's like you send you send people off and they train them on how to be iOS programmers at the Big Nerd Ranch um and um yeah everybody's writing that

down he's pointing to somebody who's been there um and so you know train people up uh on on on how to do these things we have another company called Udacity that does this kind of training now online and is rolling out all these tracks to be able to train people how to

do mobile development or how to train people uh how to do uh data science um and so I think that that development uh career path um skills training is going to be such a more fundamental part of

how the economy works and I think it has to be um because right today we're all hiring mobile developers you know 3 years from now we're all going to need to hire you know neural implant developers or whatever it's going to be I love it and we're and we're going to have that exact same problem again Big

Nerd Ranch and cryptographic Camp right yes exactly exactly exactly exactly um now let's um let's have a little fun y

so your mobile phone MH all right what apps are in your mobile phone that you haven't invested in okay what's that newos oh I don't have that yet oh yeah

after yeah exactly what's on that first the first interface so and I would say two things uh one is uh way um way company is if you haven't seen it called

W and Google bought it um and very successful outcome yeah it's so this it's so fascinating this is one of those ideas where you first year you're like that's crazy that'll never work and then it turns out it works incredibly well so it's literally Crow it's really

crowdsource maps and crowdsource traffic and and and you know there a funny part to the idea right which is literally which is well you know the the you know the slightly scary part of the idea is people when they're driving are on their

smartphones saying uhhuh you know um boy there's a lot of traffic today um crash um but um it's a it's a very powerful phenomenon it's now being layered into Google Maps and so it's

going to become standard for everything and so it's a great outcome a great Israeli uh company group very very great team great outcome um the other one um is uh Tesla um Tesla is an app on my

phone cuz if you if you if you if you have if you have a Tesla they they have it's the first car that comes with its own app um and like I've got the app on the phone and like literally like if my you know where's my car where did I park

my car has my car been stolen if it has where is it um uh you know um it's you know it's hot you middle summer it's hot outside turn on the air conditioner um you know did I lock up before I got out um will it actually activate the the

yeah yeah so you can control the climate system right now you can control the climate system you control the windows um uh and then you can do all the all the monitoring um of a l aspects of the car charge you knowes have doesn't have enough charge to get me home um uh you

know and that's today you know that's today it doesn't yet you can't yet drive the car uh from the app um that that that that's still a few years off um but I just love I just love the fact that um that I mean I just love the fact that

Tesla is succeeding the way that it is but I just love the fact you know and the the the key to it is the Tesla is the first car that has a built-in wireless connection like Tesla itself is Tesla is basically a laptop on Wheels it's a it's a rolling computer um and so

I get a huge kick out of the fact that it's it's always on the network which has all kinds of benefits when you're in the car like Internet Radio you can listen to every radio station on the planet which is really cool um but also the fact that you can get get to the car

from your smartphone um and then also by the way if those of you haven't been in the new Tesla Model S it's the first car with a built-in web browser um which is also really cool and also very dangerous on the big screen when you're in traffic

reading CNN anything else anything else that we're uh again that you haven't invested in those are the big ones um you know there's there's all kinds of stuff um you know another actually another car related thing we haven't

invested in but I'm a huge fan of um uh I don't have it yet but a lot of people are getting it there's a new um car insurance uh company called metr mile um that plugs a little dongle into the standardized maintenance port on your

engine um and it does realtime uh pricing of car insurance um with which it turns out has all kinds of consequences um right because car insurance is one of these things where

right 20 80% of the good driver subsidize 20% of the bad drivers um and um and uh you know with this and and you know car the car the insurance company's trying to price these things have very crude data about what they're actually

getting this like literally instruments every car with sensors does all kinds of really cool things for pricing um but the other cool thing it does things like a a it it's able to fingerprint drivers right um and so it can tell the difference between you and your

20-year-old son driving the car um based on things like you know do you stop come to complete stop at stop signs um and it can actually differentially not today but it will be able to differentially price Insurance depending on who's

driving the car nice um and so that kind of thing is going to be a really big deal we're very heavily involved in the and Lyft which is one of the one of the big uh Drive ride sharing apps uh you Uber is the other company in that

category there's a whole bunch of my first Uber ride the other day yeah yeah exctly amazing I love like it's really coming down it's really it's such a big deal it's actually there's a whole uh set of delivery services that are going

to launch um the the whole concept of Home Delivery is going to change because when you can actually know where the driver logical extension of that yeah it is it's a it's a it's a really big deal and and what's so interesting is you know this is what I find interesting

with this industry today is these all like everything we just talked about Transportation related topics and they all really really seriously affect how Transportation Works how delivery Works how Logistics works and they're all based on the smartphone right so they're all elaborations off the power of the

smartphone the power of the sensors the power of the network okay last question yeah so you're the person who's just kind of nailed it many many times in terms of uh

where the future's going but you're on a desert [Music] island and you only have a choice of five folks or sources you can either

follow you know five people on Twitter or uh you know tune into just a couple sources I mean how do you keep your Competitive Edge like who's going to be on that list to stay current to Cent

what's going oning Edge so uh I'm going to give you names of people you've never heard of that's what we're looking for man who are up andc comers some of whom are trying to hire I won't tell you which ones okay uh blog bloggers I want

names bloggers uh Ben Evans um Ben Evans uh is absolutely extraordinary what's this Thompson it also Ben Thompson is anybody there's another the new there's

this new generation of analysts so Ben Evans Ben Thompson uh and then there's a guy in Europe named Horus uh deu uh who is a Finnish uh former Nokia internal

analyst who has by far the best blog on mobile technology okay and covers it um extensively uh there's another guy Steve Cheney um this is I I just find this so it's I mean I read the you know I read the Wall Street Journal I read all the

all the all the mainstream press but the number of domain experts in this is the content fragmentation thing absolutely the number of domain experts in all these different fields who are now lighting up um and all of a sudden becoming inde independent Publishers um

and um are often extremely insightful sometimes because they're actual practitioners they're going to get paid with Bitcoin yeah and they're going to get paid with Bitcoin um this guy Horus this guy Horus actually sent he he was a uh he was at Nokia back in the Heyday

and then Nokia went sideways and so he left and so he was and he's just this amazing blogger um on um on the topic of uh mobile uh development of the mobile industry but he's literally working like on his own he's trying to figure out

should he do sponsorships or whatever and so um he um he I saw he did an interview one time with another blogger and he basically said you know what's your biggest thing you need right now and he says I need a new I need a new

Mac I need a new computer and so I sent him an iMac um because literally as a thank you for like all all of his absolutely amazing work um and you know he will go on you know these guys now will end up getting snarfed up and

they'll end up working for you know sort of Nate Sil kind of came you know kind of kind of kind of came out of this Vector um and so it's going to be a really interesting environment for really really short people with very

very strong deep insights um to be able to really contribute um and then for the and and this is the thing I mean this is this is you know people the people sort of there's this whole sort of thing and and the you know sort of this theory of

like the Press basically without the old business model of of the media without the old newspaper you know business model and profits how are you going to ever have investigative journalism how are you ever going to have you know good objective coverage of what's happening and somehow it's all going to fall apart

and we're just all going to just be subject to propaganda all the time I think it's the exact opposite well we're going to get all the propaganda but um I think the number of really smart people in the world who are now going to be able to express themselves um is

going to rise dramatically um and the world's going to be much better place because of that outstanding those guys are the ones I follow well I for one I'm pumped and energized and ready to uh

push forward so I really appreciate your uh your time can I add one closing remark yeah absolutely so we have two things so one is we have a whole program at our firm that some of you are involved in um some of you are not yet we'd like to invite you all to be

involved in uh we call it our Market Dev velopment program and it's a whole team and a whole uh briefing Center that we have which is literally 200 ft that way

um so don't go over there tonight um but uh any uh time in the future um we would invite you all in uh and then all of your your teams uh and your colleagues uh to come in and we run basically a

whole program um around for for for basically any big company in any industry that plays an important role which is true of everybody here um what are the areas of Technology Innovation Silicon Valley startups that are most

you know exting and interesting um and we put together whole customized curated programs um and do a lot of you know introductions connections briefings um and information sharing and so we want to invite everybody to be a part of that

um and then I have four colleagues here you ask people stand up maybe and raise your hands just so people can tell who you are uh we got Eugen Sebastian uh um uh

Mark and and prey yeah and so uh they're running around and um they would be happy to they I would be happy to hook you up with that program we would love to see you all at some point and I also wanted to introduce my colleagues that

are here Stephanie Nall stand up please she actually got us got us going like about a year and a half ago and then Mark Brer who's officially heading up our uh Silicon Valley Outpost so I hope

you take a moment to uh introduce yourself but um again this was energizing um appreciate your perspective cryptographic as it was um

and and we'll be uh sticking around for uh side conversation Drew good thanks everybody