tera gold and whoever will give it to me - MIG

Six Must-Watch On-Stage Videos From Disrupt | TechCrunch. We have hours and hours of quality video from this year's Disrupt SF, and you can browse it all over at TCTV, but there were a few on-stage interviews and discussions that we felt were unmissable.Whether they're funny, interesting, or controversial, these show the quality and variety of the guests and topics we get to feature at Disrupt. Click the titles to view the original posts with our summary and commentary, as well as transcripts of the videos. The rest of the conference can be found at our Ultimate Guide to Disrupt SF.A Year After “AngelGate”, More Angelic Angels Descend Upon DisruptOh. We're sitting in order.It's pretty good.I just remember the same panel last year. When you guys were trying to explain how you weren't all price fixing. Lord, I hope not. And now I'm like, I just want to go to the dentist. Mike started a fund just so he can get invited to dinner. That's why there was no extra glass for you. Your mic isn't working very well. Can you guys hear Jeff very well on that? Can you hear me?No? Yeah? 1, 2? Alright whatever, as long as mine works. Could you guy do a quick introduction? Starting with Ron. Who you are, your fun name and maybe the three things that you love best about me. I'm kidding. Also just tell us how much you have under management it becomes relevant, to your current fund, it becomes relevant later I think. Ron Conway, SV Angel, current fund about 30 million, and we're dying to see Mike on stage the rest of the day. Since it's his...No, I was kidding about what he loved. No I was kidding. But you have $30 million with SV Angel. In the last fund. SoftTech VC. We have invested in consumer time for 7 years, 50 million under management across 2 funds, and we're here because Mike told us to. You don't have to say why you're here. You can if you want. Josh Felser from Freestyle Capital. We actually announced our first fund this week, 27 million dollars and I guess we're the newest kid on the block. Good deal.Aydin Senkut, Felicis Ventures, 40 million dollars under management, and we're excited to be here.You're what? Excited to be here.To be here at Tech Crunch Disrupt?Yup. Dave McClure, 500 start ups an indiscrimnate number between 20 and 40 is what I'm going to do right now at least I don't know if I'm actually supposed to disclose exclusive numbers. What else? Why, I like you? Seriously I am sorry about that actually I have a present for you if someone is...Really? is it embarrassing?No, it is to welcome you to the club. Oh. Actually I have two presents. One is for Ron for being the first guy who got us all started I would say thank you. Thank you. And one is for Mike. Now that means we have to do a deal together. OK. Well you seem to invest in everything. So...Not everything, but a lot.I'm not gonna hold these, the entire. So, I'm gonna give these. Here. Will you give those to Eric and tell him I say congratulations on getting my job?Wait, wait, wait. I want to give these to Heather Hardy. Right. These are for Heather. Well deserved.So your gifts were immediately re-gifted.That's quite alright.So, OK. So here's what I want to talk about. I'd like to honestly talk to you guys about why there's so many of us all of a sudden, where this goes, something about. have been investing for a decade, some less, and just kind of see where the conversation goes. And, you know, let me get some advice from you guys, you know, on like how to do this, so. You should start. Yeah since Ron has been doing this since the 30's. The 30's? Since 1994, and it's interesting to note that in 1994 Mark Endresen was still at the University of Illinois. But I made one of the best decisions I ever made in my life deciding that I wanted to invest in this thing called the Internet. And I've never been distracted from investing in the Internet and it's the greatest thing that I've ever done. The internet is getting bigger. I think it's early days of the internet, and therefore or innovation for company creation on the internet is in the early days. So the more angels there are to support the increasing number of companies working in the new application spaces on the internet. We need as many angels as we can find to fund these companies. We're looking at a new space today called collaborative consumption. It will be a multi-billion dollar market space. Air B;B would be the most vivid example of a company in space. We need more angels to fund yet another a multi-billion dollar market that is being created on the web. I 'm convinced after, I know you pretty well at this point, I'm convinced, that you invest on gut instinct alone, and then later on you kind of look back and frame these theories around what you're doing to sort of fit what you did. But I've seen you. I saw you today. I see you and I'm like, I have no idea what this company does, but you know what I think we want in. And I think it's because of who you are, and you see the atmospherics around a person and a deal. I think it's just better to be upfront about this. We say data collaboration, what is that? Wait, wait, wait. I think he has a excellent to try to tell. Let's have an English lesson, collaborative consumption. What does that mean? What is that? Three years ago on body knew what real-time data was. Remember that? I do, and I think I didn't know you as well then. It was just sort of you know. Well, what do you guys think? Well I think, so when I started back in 2004, to invest in the second generation of consumer internet companies. It was really based on the few deals which I could have access to and invest in. And then after three years I sort of put it together according to sort of a strategy that made sense of those investments but then when I invested as a fund. I announce my funds at this conference about 4 years ago on September 18th of 2007. Then at that time I had an investment strategy with Clearly identify a set of sectors. And I think that we all sort of figure out, sort of sectors that we like.Yeah.That we focus on but we are also very opportunistic. So, Jeff you invest in one or two startups, one a month, one every two months?Yeah, two months.Ron, you invest in how many a month or per day?We, roughly one a week.Okay, so one a week. Josh, you're also more select- One a month. Hmm?One a month.One a month.One to two a month. And Dave, I think it's almost one every other day, and I'm not kidding, right? About ten per month, probably two or three per week. I don't know if the audience knows, remember the the time that you tweeted out, "I need a ride, and whoever will give it to me, I'll listen to your pitch," and then somebody picked you up.I'll listen to the pitch. I wasn't promising I would invest in it.But by the end of the ride, you had invested 100,000 dollars in them.I think a lot of our investment thesis is pretty easy to understand quickly whether we want to invest or not. So, decision making is fast. Also, because we're doing a lost of investments, any individual investments are a small percentage.Don't you feel, though, a little irresponsible Responsible to your lp.No, not at all. What do you guys think about? In fact I would say quite the opposite, we have a very quantitative strategy and we know we are going to come up with winners because we do a lot of investments. I actually think that, not necessarily these folks up here, but I think a lot of venture capitalists are gambling, because they're only making ten to twenty bets, maybe 30 bets out of a portfolio, and the failure rate is astronomically high with most startups. So I actually think that the trend in the industry is doing more and smaller bets is a rational strategy. It's not like spray and pray, it's a quantitative way... You're kind of in the middle, what do you think? You know? Well, I learned two important things by doing it with my own money. The first thing, also, obviously I owe thanks to Ron for helping me to get started is that, there will always be a lot of investors, so you need to build a personal brand and you need to figure out a way to differentiate. So we see ourselves as a service bureau to entrepreneurs, and we will also work with entrepreneurs wherever they are in the world. In fact, 2 of our largest investments, one is in Finland, and the other one is in Canada. And the second thing that I learned is that every time you get started you feel like you missed the big wave. I was at Silicone Graphics and I thought, I saw Yahoo and I'm like holy shit I missed it and then I ended up at Google and then I left Google and then I'm like oh I missed YouTube and I missed LinkedIn but then I invested in Mint. And so, I think the important thing there was just to kind of build a few ideas of what I think is where the industry is going, where the world is going and be 12 to 14 months ahead, and investing those pieces. Josh? Yes, we have a fundamentally different model, not better or worse just different than probably most of the folks at the table. We invest in a handful of companies a year as a business partner and we do five or six a year and we only invest in companies that actually leverage our backgrounds as entrepreneurs. So that rules out areas where we have no right investing, like hard-core enterprise. And so I think it's a, you know, we're one of the weapons that entrepreneurs can bring to the successes of their companies. And I think we each bring something different. And we can leverage our backgrounds, dictates kind of a our strategy we have as investors. I think another thing that's changed a lot is sort of a now adoption of incubators is a model that's become widely accepted so Y-combinator at first and then text ours and others. Initially models were maybe ridiculed or marginalized. Paul Gram was talking, he was here Monday, I was talking to him, out of the blue he said, you know what I think our best advantage is that we actually don't, the companies aren't in our office, we don't have that costs. It's hard to call it an incubator.I, well, I disagree with him because we actually have companies in our office and I think that community builds actually a lot of quick learning and iteration for watching other people, but you know, he also has a large number of companies that would be hard to fit into one building.Is there any residual? Do you guys all work together pretty well? Well, last year got sort of ugly. So, I mean like Ron and Dave. Unless you're sitting as far apart as you can be. Is that? Is there any?Well, we're in Twilio together.No, well seriously.We're in Twilio together and we're supposed to talk about a deal after this panel, I believe.Oh, you let them into Twilio. That comment, we have scratched each others back a few times. You have scratched each others back? The run invested in I think two of the companies I first worked at. Josh is going to get up now. Well you know, hey there's some rough and tumble now and then, but we're more often partners then not. But no, but is there, I mean let's look back at AngelGate. Was it complete bullshit? I'm joshing. In Hawaii... Well no, Mike, you wrote the story. Well I, you know, as an outsider thinking, you know, what I thought. But Josh, you told me I just was, you know, that I thought I was way off. And actually, I think you said I might have been a little unfair. And what you, do you still feel like... What was all that a year ago?I still think you're way... I mean, people in the same industry get together all the time. VCs get together all the time. So, I don't, you know, it was interesting and controversial to bring it out. And I think we each are in charge of our own behavior. And I think all we have are our reputations, so if we screw that up we're toast. So I wasn't there. My partner was there. Not to throw him under their bus, but... Did you not go because you were against the whole idea of it or..? No, we divide and conquer. But I, I think it was a story that became interesting and drew attention, and... But you don't think there was a lot of there, there. I don't. No because there's no way for us to control anything in terms of prices, pricing, terms, or whatever. We as firms decide that we have investment strategy and we try and get companies at certain terms and the vision if ever it's too expensive or things that we don't like, then we don't do the deals. But there's no way for us to force anything. And if you look at the deal that we are in all together and there is a lot of collaboration very often those deals come to us separately and we made individual investment decisions, and then we found ourselves together in the deals. It's not like we have a sharing platform where all the deals we do suddenly get syndicated.I think there's also more competition when the check size gets about 500 thousand. I think for a lot of us that started out doing individual investing at 25 to 50 thousand it was a very collaborative environment where we always went in together I think that some folks...Did you collaboratively determine price or no?No, because at least for a lot of us and for me I'm doing most of our investments on convertible notes, which is exactly the opposite of collaboration.Ron, what do you think about all this? Do you still think it's an issue or no or never was the benefit was I think everyone realized that we should focus on helping entrepreneurs. That's what's important.Down with that. Common sense.So, I would not say this personally on stage, but I will say that others have said and I do say it. There's an issue that I saw even before I was investing of these uncapped convertible. What this means is, you're investing now as an angel. The price is determined later, essentially much later. I've talked about this before, you know, people have written about it. Did Ron really make this a problem when he and Gary Milner started investing in all the white companies with these uncapped notes, it seems when like that's when it all exploded, or was it coming anyway? What do you guys think? I think what probably 5 years ago or perhaps longer was, once there became Angels who were very visual investors, the act of their investing raised the price of the company and so you know someone Ron who's very famous didn't want to act against his own interes in having an uncapped note. Several of us may have different opinions but I think the rise of the capped convertible note meaning there's a limit above which, you know, our money won't be priced is much more common. Will you invest in uncapped notes? You said you have right? I've done it on occasion, but probably out of seventy convertible notes where there was a cap. We've done 3 that were uncapped.Aydin, would you?Let's take a specific example. Great companywe like, we spend months working with the entrepreneur the deal change into a non cap convertible walked away. You walked away? And actually threw that company out the window. He will not have an un cap convertible. Jeff?Yeah. You will not?No.Ron?Happy to.In my opinion the only rule for investors should be that there aren't any rules about getting into great companies and if you really want to get into the great companies sometimes the terms are going to be tough, yeah you have to keep an eye on valuation. But, you know, you should be open to great companies.That's the point I'm making. An entrepreneur who has had prior successes and a proven track record probably has the leverage to say in my new company I'm going to raise money on in uncap note and if you'd like to participate feel free, if not that's fine too.Let me ask the guys in the middle who don't do it you guys talk about why you don't.It 's, it's actually bad. It's bad in ways that may not be apparent when you first think about it and check on it. So you have, you know, friends and family and angels who were kind of there in the beginning and really try and help people with their company and now it's a year later and they're gonna be investing, you know, at. They want. You want their support in helping you achieve the greatest valuation that you can get in the next round and now you've lost their support, because they're supporting you, they're not going to support, you know, a, what was supposed to be, we thought would be like a four or five million valuation. Now you're kind of, how can they support investing at 16 million and $20 million series A. It's a really. It's a weird alignment issues. I think it's kind of bad for even for the entrepreneur, because they're not gonna feel great about their earliest investors, their friends, their family, their angels that they trust, kind of now having to invest into an evaluation. They never thought they'd be investing at, so I think it's kind of, it creates a weird weird situation for us.The beauty of the free enterprise system is, we all can make our choices.Exactly.And there's no right or wrong way. Yeah.I can tell you I invested in Google at 75 million free, which at the time a lot of people thought was crazy. That was, that at the time the equivalent of an uncap note. Yeah. Pretty good deal. And pretty good great results, Jim Breyers invested in Facebook that 85 million when Facebook was an infant. That was basically an un cap note. These people were happy. Right. Definitely become a more common, you know, structure for cap convertible notes that I think is very prevalent. I want to focus on the middle right now on this just to hear why they don't like it. So, a couple things. The point of investing early is that you take a real risk in backing specifically. First timer entrepreneur and if you are not rewarded for that risk then there is a problem in our own model in the example we give which is someone who is a proven entrepreneur who can dictate their term I would say it's different. But I think it's fair to both sides to figure out what is the right set of terms. Even if it's a high valuation at least it's set in stone and then we know what we're in for and so that's why we don't do end cap notes. I think, you know, there's a lot of focus on the instruments themselves sometimes prices and uncapped or not. I mean, at the end of the day it's a free market. I think Ron made a great point. For some teams and companies that might be available but we all individuals as individuals and investors have to stand on the track record of the companies we keep and how those kind of come about with the strategies working and also most importantly, if we put ourselves out there where people thought it was really bad investment or crazy investment and it works out. I think it's really important to call your bet and that's where I think kind of,I think each group strategy comes into place, and then looking at how the portfolio develops after that.I've been an entrepreneur twice successfully. I have a third one that I co-founded, and someone else is running. I could have done a uncapped note for that. I didn't because I don't think it's fair for the earliest investors, I think. As an entrepreneur, I could probably do it if I wanted to. I wouldn't. I think where you have the uncapped notes that take a long time to resolve the pricing, that's where you see the structure that I think is most challenging if there is a relatively short time frame between an uncap note and something that is likely the next 3 to 6 months particularly with like. We would start finding those companies would in six months.Have you, I've heard the argument that if you have a note, I'm going to move on from this topic in a minute, but if you have a cap on a note, let's say we call it a ten million dollar cap, I've heard entrepreneurs say that they're afraid that in their A-round that 10 million dollars will be seen as a sort of devaluation it won't be above that. I actually don't think that's true, do any of you think that is? Have you ever heard this concerned before? I don't think it's a concern I think that actually is the case there are often times as they cap functions as a signaling method for the price of the next round it doesn't always end up there but that's often the case. I don't actually there's anything wrong with that either. Typically you have a runway that becomes in your acquires a realm which is 12 to 18 month, and so we're getting in very, very early and help the company get to the first set of milestones. And so the fact that we invested at, you know 10 pre or 8 pre or whatever pre. 18 months prior doesn't really mean much, because what you're doing is you're pricing the opportunity which is in front of you. That's right, and I think that's what we see is that cap typically becomes the price people assume the seed round was done at. Yeah. The seed round, not...Yeah, not the yeah there are two points to make. One is, companies have to realize that they always have to build the value of the company to the value of the investment. So, just the fact that an investment was valued at a number x doesn't mean that company is value x. At that very moment they have to actually create value. The second thing is, again I think one thing we have to remember about convertible notes, with a cap, the actual final ownership when a price, Ron, actually does happen, fluctuates. So if there's a cap say of $8,000,000.00 and the series happens at $32,000,000.00, now the investors will get 4 times their price, where I think it would have been much more straightforward to do a [xx], and just lock the price and ownership percentage. So, I mean, I think both instruments have their advantages and disadvantages, but should not be used in isolation.Do you guys mind if I move onto the next question? I hope so, because most of building successful companies is not about the financial structure, it's about the product and the attraction and the entrepreneur. None of this matters. I'm going to learn everything I can from you, Ron. Dave has sort of famously said, you know, "Fuck VCs, we don't need them, they're all dead anyway."Did I say that?So Angels are all you need. I think you guys are trying to take a more nuanced approach to try to work with venture capitalist. Can we just accurately quote what I said? Sure, well just have our team, we'll look it up. But, I think you said, fuck venture capitalist . They are dinosaurs, the angels are going to take over everything. Kind of was a reference to 90 percent not the entire industry and what I was emphasizing was that there is a lot of VCs, traditional VCs running large funds out there. Who don't have operational experience doing early stage investing looker and while I think there might be great if doing later stage investing . They're probably not as appropriate for earlier stage.So let's put that in a box, put it over here, and then ask the other guys what do you think about VC's and to sort of evil. Do you actually enjoy working with them? What are your strategies there?They're downstream partners.They're downstream partners?Yeah.As opposed to they talk tolerate your existence. Well, some of them may not tolerate my existence. What do you guys think about VCs? Yeah. So, I think for us the reality is angels or VC, doesn't matter. I mean like Ron said, I think... Wait a second, angels or VCs doesn't matter? No, no, I'm just saying the fact that you're doing deal with angels or VC's doesn't matter. At the end of the day, are you finding the best investors who are a good match for that company? In fact we were in a deal together, Ron, you and I, where we'd basically gotten a company that was working on credit cards. An investor that previously ran a credit card company that was on the east coast and didn't even know that this company was in the west coast. So it wasn't really relevant if that was a VC or angel or whatever. For that company...All right.That was one of the best investors that we could find. But the motivations of angels and venture capitalists is different. I'll actually give to you plenty of chances because I know I've completely slandered you, but let's just let them get their boxes in there. Let's keep going on this. So I think that you know, seed investors, kind of like most of us, are really good at taking companies to a certain, helping entrepreneurs GO to a certain place and then it's really less about the firms and more about the partners and so we like to find partners who are experienced in the companies we've helped build to with the entreprenour to a certain place and then there's probably a better investor to take over to help the entrepreneur grow from no revenue or little revenue to 15 million in revenue, I think there are partners venture firms who are gonna be capable of that. We don't target firms, we target partners versus the firms themselves. Have $2,000,000.00, and then take them to the next level with $5,000,000.00, then $10,000,000.00, then $50,000,000.00. We can't do that, because we don't have the capital.Ron?VCs are a very, very, necessary part of the ecosystem and they all have different sets of value-added expectations just like all the angels do. So what are the vc's that matter in your opinion ? I think it matters a lot like what the type of company it is. One thing is the trend is we've definitely seen a lot more Small acquisitions where companies are. like experience that matters a lot in folks like Matt Kohler at Benchmark, Reed Hoffman, people who've actually built companies that have product or marketing experience are very relevant at an early stage. Most later stage VCs don't always have that in their background. Ron's done a lot of sales and also has a ton of contacts. That's relevant for a lot of things, that early stage as well. There are a lot of people who just have a lot of money who don't have as much expertise in the industry, come on Mike I'm not going to like blow things out of the water here. But I think it's important when you're doing early stage investing where the focus is on building product and doing customer acquisition that you have relative expertise in those areas. We'll say more about this.I think it's about the partner.Yeah.You know of VCs.Yeah.VC funds like to brand themselves but guess what? It's the partner in the firm that's gonna build their own...Yeah.... Brand whether the VC wants them to or not. Jeff Jordan just joined Andrese and Horowitz. He's adding massive amounts of value at AR B;B. He's gonna build his own brand. Did he stare, did he, was he working with him before or after the, what was it? What drug were they creating? They were creating speed, methamphetamine? You know, the whole crisis. Was he there before or? Oh yeah Jeff Jordan came with the increasing horror with investment. He was there before. OK, so he's helping them sort of repair and then grow? Yes. I have never met him, that's a great. He is valuable there at BMB because he came out of eBay and Air BMB is following an eBay type model in what we call collaborative consumption. And he was also... I've never heard that before. What do those words mean? Jeff is also CEO of Open Table and took them public. He sounds like a really awesome dude. Well I mean he has operational experience in building companies for like 25 to 250 people and larger. So I think at that stage he's certainly relevant. Which one of you would you say is the best friend of Jordan? Like who likes him the best? I know Jeff a little bit from PayPal days, but not that well. I think Hey. By the way, I met Jeff Jordan through Air BnB. I didn't even know what the guy looked like. All I'm saying is I watched him help one of our companies and the guy gets an A for that.Okay.I don't know him from before.We're going to take, do you guys mind taking some questions from entrepreneurs? Sure.All right, so if you want to ask a question we'll probably get through 3 or 4. We've got this going on here. Okay.The point I wanted to make is that the part of the help we sort of offer to entrepreneurs is to figure out who would be the best three to five partners to reach out to, to get the next financing done. And we arrange those discussions, and we sort of test the water. We prep the whole thing, because we've worked with most of the firms for the past 7-10 years and so we know who all the best guys and if they bite, great, and if they don't then we just hang up the phone.Yeah so we don't always know but we have a company in the security kind of enterprise space and I just started asking around people who were smarter than I am in that space, and Guy Techline, I never met him before, he's a client here, he came up as someone who's knowledgeable and so we're gonna know we're going to reach out to them. Before we start questions, let me ask this personal question. And it can be off record, but do you guys think I'm gonna be OK at this or no? Josh has been giving me almost like motherly disapproving looks the whole . . .Not true.Am I going to find my way here, or are you guys going to gang up. I mean, how's this going to work, because I don't have a blog anymore to trash you. It depends on how much value you add to the entrepreneur. Well I'd like to talk to you about that backstage a bit.Let's have dinner at [unintelligible] and talk about it. They haven't turned off my TechCrunch credentials. So maybe I can get in like one more post just to see how great you guys are, if you could give me a couple of good deals. I think it will be yours to fuck up. I mean, you're going to get tremendous deal flip because everybody wants you, everybody wants a piece of you. Entrepreneurs want you to invest in them and then if you deliver on what you know what. What is more important deal flow or picking the winners? Both.Depends on your strategy. You know, Ben Horowitz told me a few weeks ago. Actually when we were talking about investing. He goes, if you have the right deal flow it almost doesn't matter, because you just have to get in those one or two deals that are and the drop boxes, Facebook, and the rest of the time you could be doing anything. And you're going to make your money. Good, deal and the profitability to pick follow ups or what matter. Good flow-ability to build follow on investments. You guys built great follow ons.I have a slightly different take on it. I thought the idea flow was extremely important, and I still feel that. However you can also make your own luck. I mean there were two companies where one was our largest investment. I literally fought eleven months to get into that deal and flew like had meetings in two different countries . And if we didn't do that we would never be in. And it wasn't in our deal flow. We just knew that company was a company we wanted to work with. And I think that reinforces people's impression of us. Oh, these guys helped with this company, I'd better go look for that. So it's kind of, I think, a cycle and shouldn't be viewed in isolation.Well, but getting off your ass on Saint Hill road then visiting other parts of the country, other parts of the world is part of deal flow.It is very important. I'm just saying that, depending on how you look at it.I wanted to see where that went for a minute. Two D's; deal flow and due diligence equals a successful portfolio. Three D's just for the record. Deal flow, oh your right, due diligence, but I do think that due diligence is often a myth. I mean, I think we all think we are brilliant on the initial stock picking, but we all have companies that we.I disagree. Let's go to a question here.Hello. This is a question for Ron, but you can all answer. My name is On. I'm from Picturely. We work with image recognition, which we know is important for brands. When we start getting traction you all talking about partners and people who you'd wanna work with. Who you recommend we start working with?VCs or Angels or?VCs. So, at the Angel stage, we need accelerate and get traction with image recognition around brands. The next step, who would you start recommending we should work with? Well the top tier VC's are Andreson Horowitz, KP.What?The importance of partners. Not just the VC firms, what kind of partners would you see in the media space? Could you keep going with the top VCs?Partners or patents?It was this thing called the [unintelligible].I can't believe you asked the perfect question, and then you cut him off.Are you asking for names of partners at the firm.No. He was asking the list of top VC's and you listed KP and Andreesen Horowitz and then you stopped. Is that the only, is that it? Is that the whole list?Sequoia, Benchmark, Greylock, Excel. That's it? No that's not it. That is off the top of my head. Somebody from tech crunch. Those are all great firms because they have great people. I think that was the question, the names of the partners? I'm sorry, I'm sorry. But I think that earlier . . .Ben at Andreesen Horowitz. Ben Horrowitz, Mark Andreeson, Jeff Jordan. At Sequoia Ruloph Boda, Alfred Lin just came out at Zappos. Once I get to know the company. Yes, once I get to know the company.Quick tip for entrepreneurs don't ask for introductions from people who haven't already invested in you. That's a waste of fucking time.Yeah.And often it's seen as. negative like. Why don't you help people, you haven't invested in? It's like because the person you refer to is going to say, well what do you think about the company and... That's alright, I've seen you help people who you haven't invested in. I think that makes you...It's the over generalization, but it is very true that if you refer a company that you haven't invested in I'm going to treat that referral much differently than you have invested in. Yep. About it.Sure, which leads to my question. Greg Gutman, MallWallet, what is the best way to start building a relationship with you guys before we have a product that's built attraction while we're still in development state, just so we can get to know you a little better? You know, is there like happy hour, special Twitter handle like love answering on? Alright. So there's a lot of great... How to stalk us effectively is that the question? Not so much stalk, you know, it's a courting process, right? So we are all dating each other here so. You know one thing I have found is the power of just having one person on your side who is already on the inside is so valuable. That if any one of these people are talking to me about you, I'm going to listen. There's still so much noise and no good way to filter it when no one is making the introduction. Do you guys agree? Yes, well like you know, I get if there's one thing you shouldn't do is do the canned linkedin thing. That's like, you can do better than that and I also would go running with some of the entrepreneurs over the I get to know them that way. The beauty of Disrupt is that it allows this to happen. Over the objections of Arianna Huffington apparently. I think the common mistake for entrepreneurs is to try to bum-rush the stage shove a business card in my face or try to get an angle into us. And a super simple rule is like find the second most important person in the room which is find the person that is associated with us whether that is another person on our team, a previous company founder that we have invested in or mentor or something. It's so much easier to get the contact when you work indirectly through someone that we already know rather then trying to go direct with the person. Because we are going to get a hundred pitches a day with no filter for that. That's very good advice. We have six people on our team. If you get to any one of them, they're going to get to me in our weekly meeting. And I think most of us have others with us. And that's a good piece of advice. Get to anyone of us and you're gonna get heard.Oh, I gotta take the microphone away so there's no chance for follow up. Hi I'm James Adams, founder of Air Pay, and my question is: When is the right time to approach you? When we're ready to pitch, or do you want to get to know us earlier so you can start, you know, kind of getting a sense of who we are before we pitch? This feels like a pitch.Number one boot strap as long as you possibly can. If you come to us with traction, the funding process is gonna be a lot quicker. Functional product. Functional product.Hold on.Existing customers, revenue.Hold on.Any of those are incremental stages. I understand like if too many people come at us, you can't filter it all. But how can you say to an entrepreneur, go get some traction and then we'll pay attention to you? I mean, it's that attitude from the venture capitalists that lead to the birth of angel investing. Right? It feels like there's got to be a better.Yeah. Well, well you are an example of somebody who boot strapped and got . . . I wrote a Wordpress blog. No, no, boot strapping is the best way to build success. No, you know, I have seen companies really struggle because they couldn't get any money and they slow, development crawls to a stop. Let me answer your question in a different way. I think thinking about it in a pitch is misleading. You know, the right time is whatever is the time you can get whatever you want. But one of the best things that I've heard, this is actually Peter Teal who said it to our founders, is that you need to capture the imagination of your investors, as well as employees. The way to think about it is imagine that you're pitching your eighteenth or twenty seventh or thirty ninth employee. So these people are not going to get as big up side. If you can still get them excited and capturetheir imagination. You're going to pretty much capture the imagination of everybody that you want, their imagination. So, I think the thing that we don't want to see is like 40 pages of the pitch. OK, this company needs money. It's not yet another pitch. You can kind of read our blogs, our websites, what we have said publicly. And the most important thing is look are we going to get inspired are we going to get inspired about working on this thing? You obviously are your founding the company and hopefully we can be part of it is we can share that and you know, we can make a contribution, you know, if it's in our relevant areas.And the point is that when I started investing the cost of failure of the company was around 5 million dollars. So it took 5 million dollars to burn to figure out it was a bad idea in the first place. And then in 2004 and 2005 it became 500 and then 250. And now have founders basically would fund the company with 10,000 dollars and get the usual product that they can get somebody from the marketplace and gives tangible results. That's what makes it special. I think, you know, there's an entrepreneur maybe in the audience, Jeff Chan. He sold his company to Zynga. I didn't know him really well but we really took off we've been cycling though ideas for the last seven months and we've been with him through the whole process and we know he'll probably find one that really works for him and for us and we'd love to back him. But we'd been talking for seven months before he even had like a fraction of any idea. So really depends on the entrepreneur and the relationship you have with your funder. I think if we're waiting for attraction we're going to lose to BC's. I mean, BC's are going to be willing to pay up for a deals and if there is demonstrable traction, they'll win on those deals. So we have to be investors before traction in most cases, I think.Do you want to amend your answer Ron? Or do you want to stick with the? I just wanted to clarify what you said. About the traction. No, I want to hear the next question. For an entrepreneur that has a product that is fully big but not launched what do you think is a good way to go about finding a reasonable evaluation that is not through the roof? You know something that's very... Pre-launch? Yes, pre-launch, pre-revenue but a great product, great concept that you really dive into. What's a way to get a an evaluation that both sides say you know it's a good place to start. Can I answer first? As I guy, I get worried just hearing that question for an entrepreneur. What I want to hear an entrepreneur say, now of course pretty conflicted right but what I want to hear an entrepreneur say is who are the right investor for me and how I do make a deal for everyone? And as soon as I start hearing about what's the way to get the highest evaluation I'm immediately worried that theirs the wrong conversation is going on. Well, what do you guys think? Yep.Good answer.I mean, I think focusing on the customer's problem and your solution to the customers and mostly the conversation that they want to hear and then towards that. So do you understand the customers problem? Have you thought about a solution that's relevant? Do you have a functional product? Are they using it? Are they paying for it? Do you have scale? That's the progression. And then you just pull a number out of your ass right? I mean it's got to be ultimately just what the markets doing?I would say in this market. Roughly let's say there's 5 points that are interesting. Each is worth one million dollars. Market product team customer revenue.That's a great article right there. Market Product Team Customer Revenue. You have all that thrown away and pull a number out of your ass. It's rough now but...What do you guys think?I think it's expected that I agree with you Mike. Pick the investors that you want, and then try a maximize evaluation from them. Which probably won't be as high as the evaluation from investors that you don't want. I think that's the way I would approach it. And the only thing is I mean the way that you're going to optimize prices is by scarcity so the way to get the best price is how unique, how different and how challenging is your solution. And is it a good solution. I mean just at Mike you know as an entrepreneur I mean I started a PhoneCycleso I consider myself a founder you always think of all your own product always does a great job but it would be great to give real validation that yes it is a really good product that's why attraction really matters that much it's not just important of what we think what the product does but how it is being perceived by its actual users and is it really taking care of the important pinpoint and if that's the case then sky is the limit.I will say that if you invest is just if you're investing early, I mean you don't have traction, a lot of the times you won't have any traction. You've gotta just, you have to make the call based on the, really the relentlessness with which you foresee in the entrepreneur will pursue this. I think that's a big part of it. And the excitement you have about the product.Yeah, 90% of the companies we invest in are pre-launch anyway, so there's no attractions there's just initial sort of validation. The point is fund raising is a giant waste of time, right? And hanging out with investors is not building a company. So what you want to do is really to focus on the people that can help you and if you can get money from them at a reasonable evaluation then do that because there is no point in spending all of your time fund raising just to optimize the initial evaluation. Ron? Nothing to add. I think, one thing I will say is that if you are an early investor at low evaluation you can be pretty fucking stupid. If you're a late investor at high evaluations you better know exactly what the hell is going on. I love how you watch Twitter about comments about comments about you I think you're trying out soundbites on stage to see other reactions and going with them. I would never do that. Ron why did you turn off a little bit there at the end? Are you sort of just low energy, or No. I am looking at the line of entrepreneurs who want a question answered.Sorry, this was the last question, we are actually done. I am sorry, I was trying to signal that, but we're out of time. I feel sorry for all the people who have other questions. What I was going to say was:We'll just let them all back in.Build a great company evaluation will follow. Say that again? Build a great company, valuation will follow. What does that mean as an entrepreneur? I know what you mean, but Well, ask Mark Zuckerberg. I don't have the opportunity ask Mark.Just build a great product, and everyone's going to do fine. Talking about valuations These guys want simple instructions on how to get your money. Talking about valuation does nothing to enhance the product.Does it ultimately come down to: you are not going to get your money until you don't need it any more? No, but that is often the perception, I think similar to banks. It's great to know if you have a great product and you have someone that we trust making the referral, then a lot of times you'll get money. We are going to look at the team and if the team is super impressive with 2 or 3 guys who have an established track record with the product is really differentiated and kick ass and the market is gigantic, then yes you might go above the traditional four prix, five prix, six prix and pay the price which is through the nose, but eventually might be fantastic which is the example with Excel at 83, remember when they paid that price for Facebook every one was saying that Breyer had lost his mind, lost it. Just a year later when tested at 500...We are going to wrap up - any last thoughts? Don't give up. I had a hundred VCs say no to me for both of my companies. Ron invested back in the day. I had a hundred VC's say no to me and all it takes is one. One in this crowd or more then just us obviously and then your round is going to come together so don't give up. Don't give up. Mike, welcome to the club, hope to see you in a couple of back room deals that been 38 soon. Thank you. Thank you very much guys.For all these people who are, are you all waiting to get questions answered? No they're waiting for you to pitch you. So, somebody from SV Angel is here. Is somebody from SV Angel here? Come up here and help these entrepreneurs please. That was good. That was a good move! I feel sorry for whoever the hell has to now go up there and talk to everyone. I think it's awful. I think, if you want, we could... In my promise is I have to go to TechCrunch TV or I will get my Forget TechCrunch. I think you guys should just go down and just, you know, talk to people who wanna talk to you and you know. You brought your check books so let's do this. Thank you very much. Ladies and gentlemen This all-star panel of VCs and (perhaps former) angel investors was consistently interesting and entertaining. Arrington moderates as Ron Conway, Dave McClure, Jeff Clavier, Josh Felser, and Aydin Senkut dispute the best way to help and fund entrepreneurs. Capped vs. uncapped, VC vs. angel, due diligence vs. whatever the opposite of due diligence is. The end was inspiring, as Conway instructed anyone there from SV Angel to help the long line of entrepreneurs building up at the question mics. He then went down to the show floor and braved the frenzy himself.Max Levchin And Peter Thiel: Innovation Today Is Between ‘Dire Straits And Dead’Are you both Founders Fund?No.No, your not familiar with Founders Fund. Okay, so, Peter is an investor. Was the first investor in Facebook. Correct. And you invest with several vehicles Clarium Capital, which is a hedge fund and a Founder Fund, which does more of a venture capital fund and Max, met Peter at Pay Pal, right? You were both at Pay Pal together? and you've had a long, long friendship after Pay Pal. Max, he was the founder of Slide which is sold to Google and Google recently shut Down Slide except for one product. Max is now on the the next thing. In fact, the next thing for Max is a book you've been working on for two years with Peter, call The Blueprint and Gary Kasparov, the chess champion.Great.So, welcome. Thank you for joining us. Tell me a little bit about off this book. What's the prep basic premise of the book Blueprint?The book is vaguely controversial, but that's how we like it. The fundamental premise is that, despite of what the popular media and other such people might tell you, innovation, specifically technology innovation, in this country is somewhere between dire straights and dead. And we felt the need to call that out and sort of layout the argument for why it is in such bad shape or what we thought were the causes of it's decline with some notable exceptions. And also attempt to create sort of a blueprint, pardon the pun in the name for what to do about it and and how to go forward. That's an interesting position for an internet entrepreneur and, you know, an investor in many internet start ups including FaceBook Are you saying that that's not innovation? A slide not innovative...?I think there is a great deal of ferment and activity in Silicon Valley. There has definitely been some innovation, so it would be an exaggeration to say that nothing has happened. But if one looks outside of computers and the Internet, there has been...we've had 40 years of stagnation. And take the most literal instance: we are no longer moving faster. Travel speeds kept getting faster in the 16th, 17th, 18th century with faster sailing boats, faster railroads in nineteenth century, faster cars, faster planes in the twentieth century. It peaked with the Concorde in 1976. It was decommissioned in 2003. And when you then, you know, and then when you include the strikingly low-tech post 9/11 airport security even a decade after 9/11, we're probably back to travel speeds of something like 1960. And then, you know, you sort of expand from the failure of innovation in transportation points to a larger failure in energy, where, you know, we have not been able to move off fossil fuels. The clean tech area is this increasingly large disaster. The people in Silicon Valley are not even talking about it anymore. There's been a failure in commodities more generally. There's some progress in bio-tech and bio-medicine, but even there, there are sort of concerns that things may or may not be stalling out. So I think when one... as soon as you widen your focus beyond this, you start to see that there are some serious problems. And, of course, you know, if we were to say that California is the center of technology in the world, which I believe it is true, and you then looked at the health of the state of California and you saw the people were moving from California to Oklahoma, tho opposite of what was happening in, say, the 1930's, you'd say something's not quite right, and we have to ask some serious questions about how much is happening, and how it all should be calibrated. How much do you think that the reason for this decline in innovation is because in these areas like transportation, energy,etc. The technology are long in the tooth and you know, all the big gains, traditionally, are you get the game's early on in the early life cycle of technology. Do you buy that argument or do you think that there's still a lot of advancements that we can make in those areas and there's other reasons why it's not moving forward.There's several causes and unfortunately, part of a theme of the book is that, there isn't a single thing you can stick a finger in and say you just fix bad and everything's going to be ok again. One problem that I think we identified correctly is the overall risk taking culture in this country in particular has declined. The famous speeches that sent us to the moon or otherwise inspired us are few and far between these days. The space program is basically on its last legs. Now the great highlight of privatization of the space program with the Space X...Our third Beetle missing here, Elon, is building a company that's going to privatize space travel. So that's pretty amazing and awesome and that is in fact transformative innovation. In the past, however, you would see multi-billion dollar, sometimes tens of billion dollars being allocated by the government towards extreme transformative revolutionary innovation without much of a plan at all. And there's kind of a famous quote that I think appears in a book or we certainly ran into it when we were doing our research saying, you know, "If you're trying to create a budget for your space travel plan, you're not innovating." You can't forecast some of these expenses. And so, of course, not being able to forecast expenses is a crazy risk taking proposition, and so as the appetite for risk overall declined, so did the innovation. And you see this as a global problem or you're identifying this as a problem specifically in the United States.I tend to think it's a global problem. I tend to think it's a problem that's particular to the US because the US of the country where people do new things and so, if the US does not innovate. This is actually a serious problem for the US. There are a lot of emerging market countries where people don't really need to do anything new. They can just, they have plenty of room to just copy things and catch up, and so you can have a story in China of twenty years of progress where you just get nineteenth century rail roads and twentieth century cars and maybe, you improve them a little bit then you skip a few steps and its a much more serious problem for the developed world, and indeed when people we'll talk even about the developed and developing worlds. That's sort of the globalization terminology. Is implicitly an anti tech term. Because when you part of the world developed. You're implicitly saying there's nothing more really forward to do except these small things at the margins. Coming back to your previous question about, you know, is it just that we're at the end of the cycle and there aren't things to do. I think, I think it's hard to say. Certainly people in 1985 would have said that Apple was at the end of the cycle and that it was simply a matter of selling computers was like selling Pepsi, and that's what you needed to do. And it turned out that was not entirely correct, and that there was still room for tremendous risk taking and innovation and Apple is a striking instance of significant risks being directed in an innovation direction over the course of the last fourteen, fifteen years. And, it's not clear why that's not true in many other domains.Let me challenge a little bit your exceptionalism, you know, that there's no innovation except for in technology. I mean I think we can talk, you can point to innovations in technologies like what Apple has done, but there's also the counter-argument that some people have been making and I think Nathan Mergold wrote an article a year ago or something about how innovation is dead in Silicon Valley, which I completely disagreed with. But people do point to the, you know, the frivolous nature, say, of social networks and they say, "That's not real innovation." Like what is the...is Facebook innovative? Is that the type of innovation you're talking about? Or are you talking about like hard science problems that need to be solved?Well, I wouldn't separate them out. I think that all of the larger Web 2.0 companies involve real innovation and the creation of real value. And the question around a company like Facebook or any of the other half a dozen companies people always mention is not weather the specific company's not innovating or not doing enough, it's that there aren't that many companies. And so when people think of innovation in the US, they automatically talk about Facebook. And and I think it's a great company. I'm bullish on them. I'm a little bit biased obviously, but at the same time the social and political question is, how many companies like that should one being producing in very divergent fields? And, so, I think, I think you can say there was important innovation on social networking and there has not been in many other areas.So, Max, you've been spending the past few years on social software, right? Which you know, is open to same types of criticisms. What's your argument for you know the fact that social is, is innovative. Is it? or was just fun?I am not sure social is a segment or certainly not a company name or a company. I think innovation is slightly deeper in a stack [xx] things to think about. It's a slightly long-winded answer, but here's what I think about the matter. In the nineties, when Peter and I met, I was a hard-headed engineer and he was a fresh-off-the-bench lawyer and a financier and the lesson that he taught me very early on was the causality and correlation between hard and valuable. So, all I wanted to do right after college is start companies that solved really hard problems because I was absolutely certain that we would build something very, very valuable and to change the world and everything would be amazing. And at some point, Peter took me aside and you don't have to beat your head against the wall every time. It's not particularly valuable. But it turns out that I think, anyway, I took that lesson to heart. We built a pretty good company together. The flaw of a lot of companies today, social or otherwise, they've completely gone to the other side. They've basically said, "You know what? Hard, is not that valuable at all." In fact, the because we have lamp and we have all these great technologies and all these things that allow us to turn through ideas in a couple hours time must in fact mean that starting a company that's really hard is just a dumb idea. That's solve simple problems. Let's make things that are trivial because hard doesn't correlate to valuable at all. And that's also not true. Innovation ultimately winds up being quite frequently, about solving very, very, hard problems. So, if you're in social and you're solving your really hard problem by [xx] innovating. If you are trying to build one more wrinkle on the Angry Birds idea with, you know, pigs versus gerbils instead of chickens, you're not solving a hard problem and it's not really an issue.So, what's the hard problem, say, Google is trying to solve a social versus Facebook. Is it the same problem or are they different problems?Given the fact that I'm actually technically still on Google payroll right now, it's probably a really bad idea for me to reveal the very secret plans that Google has.Peter, do you have a point of view. I think that. Well, I think that it's core Google is a search engine and that's the hard problem Google solved. That was extremely valuable. People thought of search in the late 90s as not a particularly difficult problem. And when Google reconceptualized that as a difficult problem and looked at the many additional layers that one could tackle in solving that problem, that's where they created this phenomenal company. And I think one should not be too distracted by the many other initiatives that Google is doing and not ever lose sight that it is a monopoly search company with a more powerful monopoly than Microsoft ever had on the operating system in the 1990s. And it was driven by a great set of technological innovations and insights that they have.Let me ask you this. You know, the cycle of disruption seems to be accelerating. And even if you're just thinking just in technology, right, if Google disabled Yahoo and all the first generation search engines and Facebook is disrupting who or what is going to disrupt Facebook?Well I, I would quivel with the claim that things are going simply faster. There certainly are aspects where they're going faster, to the extent things are extremely thin. And, it's just, you can substitute one design for another very quickly. Or fashionable restaurant in San Francisco can shift very quickly, and just put a new sign on the door and things of that sort. But I do think one has to always differentiate the idea of change and progressband what's desperately needed did in our society, and what I am interested in investing in, and I think the greatest companies that one can build are those that represent genuine progress as opposed to ones that merely represent a sort of frantic change of going from one passion to another.So, you've identified the problem, and we haven't gotten to the solution. The name of the book is "The Blueprint." So you've got about 50 seconds, what is the blueprint?What is the solution? The solution is actually very simple. You have to aim almost ridiculously high. A huge amount of innovation that has been productized and capitalized on and ultimately, made lots of people very wealthy or otherwise, created value was, for example, fell out of the space program. The space program was this incredibly insane, and almost a useless idea of let's put the man on the moon. Why the hell not? What are we gonna do there? We'll see, but we got fuel efficiency, composites, Tang. All kinds of crazy stuff you might the space program that ultimately made billions and billions of dollars worth of economic value in the long and short term. So aiming very high creates residual opportunities for value creation. While, aiming here, you know, if you look at the target for today or tomorrow, you'll have acceleration that you pointed out but you won't have long term lasting revolutionary in the bay.But are you calling for the government to fund that innovation or for private enterprise to fund that innovation?We're calling for Americans to wake up to the fact that they're isn't much going on. And so the government should do it. If you're in position to allocate capital in the government you should absolutely do that, if you're a private investor like Peter you should invest in it, if you're an entrepreneur like me you should start companies that aim very high.If you're non-profit, you should redirect the money towards technologies of non-profit.How many founders companies are not internet related? I would say on capital allocations bases were probably half internet half non-internet.Really? Interesting. And you're looking for more non-internet?We're looking for innovation in both areas.So I think there will continue to be the next generation of computer technology is an important area, but it is very important to look at what are the problems that are both hard and valuable. Not just hard, which was the mistake people might have made forty years ago, and not hard, which is the worst mistake people are probably making today.Peter, I'd like to give you a chance to answer the question. How do we go faster? I think we re-frame the question not as a political or a social question but a question about what people individually do and so it's a question about a recession today in the US. What should be done about the recession? There are all sorts of ideological debates about that. I would say the way the question should be re-framed is, what are you doing to end the recession? And the question about technology is, what are you doing to try to help accelerate technology? And as long as it's a problem that's seen as a problem that will simply be solved by other people it's not going to get done. And so the future it's not something that's undefined or that is determined by other people or to the extent everybody believes that, we will not, we will certainly give up our ability to impact the future. And I think the, we need to somehow go back to the future and back to the idea that we have some mastery over it.And take some responsibility but with that I think we'll leave it. Thank you very much. I can't wait to read the book. It sounds fascinating and maybe next time we'll have Gary join us as well, see if he argues with you. Please give Max and Peter a round of applause. Thank you very much.Thank you. So, we're gonna break for lunch. We're gonna try and get back on track and back on time. So, come back here at 2:00. We have, I believe, it's Dustin Moskovitz for a quick Fireside Chat. The we're going right into the, the Battlefield. We have an amazing set of companies. I've been working with them pst few weeks and I'm really excited about them. So, break for lunch and back here at two. Thank you. This talk was controversial among our readers. Could a guy who urged people to drop out of school and a guy who made Facebook games really speak to the question of "hard problems"? The discussion on the stage is interesting whether you buy their premise or not. Our commenters bring up some very salient points as well, which you can read at the original post.Is Facebook Copying Google+ And Twitter? VP Of Engineering, Mike Schroepfer, Respondsdoes those office tours. Okay, maybe that's not very funny. I had five people tell me that last night. Anyway, so I'm here with Facebook Vice President of Engineering, Mike Schroepfer. So, thank you for joining us.Yeah.In my understanding is that you had something you wanted to say about a teacher. You guys just launched. I just wrote about it, literally an hour ago. We just announced at 10 a.m. this morning as a subscribe button, and it's one of many things we've been rolling out in the last two months or so that really helps you control what you see on Facebook. So the first part of it is, it makes it really simple as I'm looking at a friend's profile to decide, hey I'd like to see all the updates from this friend, or maybe I want to see only their photos, or maybe everything but their game updates, is one big part of it. So it really lets you, along with the friend list that we announced yesterday, really kind of dial in your Facebook experience, so you can see exactly what you want from who you want on Facebook, is the first part. And the second part, that I think is equally exciting, this is something that your colleague Mike Arrington has actually asked me about for years so finally able to deliver a way to get past this five thousand friend limit via the subscribe button. So if you want, you can enable anyone to subscribe to your public updates. So I'm gonna boil that down a little bit. It's sort of like Twitter, where, anyone if provided you opt in to it you can allow people to subscribe to you. Somewhere to go to my profile right now, they can hit a button, I don't have to preview it, you can follow public updates. Which reminds me to two things; first is: didn't you guys launch Facebook pages like two years ago, to do the same thing? Yeah, and they've been wildly successfull. I mean we have pages like the Starbucks page and Coca-Cola that have tens of million or 20 plus million fans on them. And I think Pages are an awesome product for someone who has multiple people administering a Page. When you're talking about sharing photos with people who might be interested in viewing them but I don't want to have to administer a whole separate thing. That's trying to maintain a grand presence or something else like that, that's really what subscribe is for. It allows me to share with my friends and it also allows me to share with whoever else might be interested in seeing what I have to say, or do So it's a kind of single click opt in, and then once you've got it, you have one place to publish everything from. And if you kind of move into meaning, you know, multiple admins and understanding metrics and things like that, Facebook pages are a really great product for that. So why now? I mean, Facebook...the subscription feature you launched seems like something that I'm sure has been on the drawing board for years, right? It's not something that...it's fairly obvious. And yet you haven't launched it until now, which, as it happens, it's been a few months since Google launched its own social network, which also allows users to follow people without needing to get approved to do so. How much of a role did the launch of Google Plus play into this or is this something that you had planned, you know, for the last three years that you're going to wait until, you know, September 2011 to launch?Yeah, it's a good question. We' ve been working on lots of iterations of both friend lists and this kind of subscribe metaphor for a while, and actually hadn't come up with...for friend list, really the challenge was, hey, no one wants to spend their afternoon dragging and dropping and building lists. Like, that's just not fun. What you really want to do is kind of get people started very quickly and get something going so they can just start using it start using them right away without having to do a lot of work. And it wasn't until we really got the SmartList working well that we decided this was a feature we wanted more front and center. Kind of similar with Subscribe in the sense that we experimented with multiple different ways of allowing light-weight ways for you to get public people to follow you. But we just couldn't or subscribe you but we couldn't get a implementation that we really liked until recently.I notice you, I don't think you said "Google" once in that answer. So I'll be a little more direct. I'm sure you've used Google Plus, so when you login to it for the first time you know, may be for the first few days, what was your favorite feature?Favorite feature, Google Plus...I hear the laughing in the crowd...the stumper so...I think it's a valid question, I mean, all right. Let me put it this way. Over the last few weeks tera power leveling, Facebook has introduced a variety of changes which I think are great. It's finally...I've been on the site forever. I joined when I was a freshman in college, it was a few months after the first launch. And I've been tagged in my fair share of photos that I didn't particularly want to be tagged in. And I quickly de-tagged them but not until a few hours after, who knows why I didn't get up at 8:00 AM that morning. And now, like I think it was earlier this month or a few weeks ago, you can finally approve a tag before it goes live on your profile, which I've been asking for forever.Yeah. But it didn't happen until after Google+ launched.Yeah, I mean the challenge with this is I think that right now any time we launch anything you can say it's a response to X or Y. I mean that's something we been working on for quite a while. And I think competition is great, it's a lot of fun, I think it keeps everyone sharp, and I think it's really good for people because they get their choice of a lot of different services and they can choose the one based on what makes them happy and how they use it. So mostly I'm excited that we just, you know Mark said a couple of months ago that we were entering what he called launch season. And you know, we have a developer conference next week, and we've, you know, already launched two major features now, a major feature a month ago. We launched video calling before that, we've got a couple more things coming before F8, and then there's F8 itself. So I think it's just, we've really been building up steam in terms of being able to make a bunch of improvements we wanted to make to Facebook for a long for a long time, so mostly I'm just psyched that I think that all of these changes, we've been using them internally for awhile, are really pretty awesome and I think you'll enjoy them.And weren't motivated by Google+ at all.We've been working on lots of different stuff for a while.All right. I can tell you're not really going to talk about Google anymore. It's all right, fair enough.So let's talk a little bit about one of the changes you made. I called it a kitchen sink roll out. I think the title of your blog post was Making Facebook Easier to Use or something along those lines. And one of the changes involved Facebook Places. And I was kind of curious because Places only launched and it's been less than a year, and I think we wrote a post saying that you had killed Places, but I don't think it's true but you've definitely drastically changed it. Do you want to talk a little bit about what you were seeing there or what made you tweak the way place work so drastically?Yeah. I mean the real insight there is that, location is just one part of the things that you want to share. So, when I'm sharing a status update, it might be who am I with? Here's a picture of that place. And by the way, here's the location tag in a structured way. And so rather than being a separate thing, which is you think about location as being an individual product, really it's like look, I want to share what's going on or I want to be be able to share that experience with my friends. And here's some information, a photo, a tag of a person, a tag of a place, that kind of enriches that experience and makes it easier for people to understand what's going on. So really, it was about not just having a check-in product but really kind of integrating the idea of location in all different ways in which I can share. And what about Facebook Deals? Because that's another product that launched several months ago, but I mean, it's had a relatively short life, and I think you guys killed it off entirely now. I know there is an initial trial run and so what did you see there? And I'll ask you a follow up question after that. Well, I mean it's funny cause we're, I'm staring a huge sign that just says Disrupt right there. And like, you know, we are famous for our Hackathons and you know, a Hackathon this weekend, and I think that, you know, in order to innovate you have to experiment. And in order to do a real experiment, sometimes they fail. And I think that's pretty baked in to the ethos of what we do. So we experiment with lots of different products and directions and futures. And sometimes we get them really, really right and sometimes we get them a little wrong. And I think the key things is to make sure you you kind of pivot and iterate from there. So a lot of these things, you'll see us continue to try out new things and try them out, test them, and see how people like them and then figure out where to go from there. Part of the fun of being at Facebook, part of why I love my job is, we have a sign hanging in our office that says "This Journey is 1% Complete." I think we have no belief that what we have right now is anywhere near perfect. There's so much more that can be done. That's why I'm excited by all the start ups who are innovating and trying out new things. That's why we push ourselves to, to innovate and try new things all the time to make sure we can get to, you know, a better place to where we are today.And you know you actually, I think there was a similar issue with Questions. Facebook Questions launched, and that process effectively killed off and reinvented as more of a polling service, if I'm describing that accurately. Yeah. So was this another case where you said, let 's throw stuff against the wall, see what sticks. Yeah. Cause I'm kind of curious, I know Mark Zuckerberg has talked pretty extensively about the way social can reinvent all of these different industries, provided you start with social from the ground up. And I think, I mean, looking at questions and looking at deals, these are two case this is where social didn't, it wasn't like the special sauce that made it magical yet. Or maybe you haven't found the right recipe, but is there any concern that maybe there are some areas where social isn't the answer? Well I think that's one interpretation. I think the way we actually also think about it is it's really important for company's to focus on, kind of core experiences that they do really, really well. And I think that if you look at the companies that are doing deals, and are doing questions, they integrate social into them quite deeply. And all this the company is successfully doing that. So, I think it was just for the time it wasn't the right product experience. We weren't totally happy with it and we wanted to focus more of our attention some of the core aspects of the product and the platform and let other people really innovate in those areas.OK. OK so one of the, there is a blog post fairly recently on the developer blog that talked about how Facebook is going to start bug testing releases, for some period of time, I think it's mostly to developers that you're saying this, before the code gets pushed live to the site. Right, am I correct on that?We were opening up beta of the platform to developers, so they could test with the early release before it goes out.So, I mean, this has been an issue that I've been hearing about for years now,--Yep.--that Facebook is just really buggy, and it's not even like people are discreet about it, it's like dude, you need to write about how buggy Facebook is, it's driving me nuts.Yes.So I'm curious, why did it take so long to, to do this? And I'm wondering -- I'm also curious on sort of a related topic. Facebook itself, even beyond the developer platform, is rife with bugs, and, or at least it has been, I've written about plenty of them over the years, and I don't mean to say that, and you guys are solving some really hard problems--Yeah .--but I feel like you've reached the point, or you're well past it, where bugs can be just shrugged off, like 'Oh it's a start-up', or 'Oh they're growing quickly', so I mean--Yeah. -- have you turned the corner where bugs on Facebook are going to be so rare that it's going to be like hearing...I mean you don't hear about Google accidentally exposing private information that often. Whereas with Facebook, even if it's only minor private information that was exposed, it's still like the fact that it was exposed in the first place that's unnerving, or it is for me, so.Yeah, I think those things are very rare and something we take really seriously, but I think too few. You know, and I don't think we've ever shrugged bugs off in terms of something we don't care about. But I mean, you know, there's the saying that I think actually Reed Hoffman is the first person I've hear say it, you know, talking about start ups and saying, you know, if you're not embarrassed by your first product you took to long to make it.And so I think everyone in the audience here who's building a start-up product realizes that the first thing you've got to figure is, is your product right. Because if you product is not right, fixing it and polishing it is not the right thing to do. You need to adjust it to make sure it's the right product. So I think there's always a balance in terms of how fast you can iterate, and how much you spend time on these issues. The other thing that's interesting to me you mentioned us growing really quickly. I mean, the scale of Facebook is still mind blowing to me, and I deal with it every day. You know, 250 million photos a day, three quarters of a billion people on the site a month. You know, Nielsen released a report recently that said more time spent on Facebook than the next three domains combined. And so when you're operating on that scale growth. There's also just challenges. I think the fact that the site is continuously up and fast, on it's own is a fairly big engineering challenge for the team.Absolutely.But to kind of get back to your original point, you know, we have been focusing a lot on quality, particularly of the developer platform, but also quality of the main site too. I think we can, you know, a lot of the investment, a lot of, I spend my time out there trying to hire all the great engineers I can, and a lot of that is so we can solve two things that are hard to solve together, which is, we want to really move fast and be able to innovate and ship new products. And ship things faster to you know three quarters of a billion people than a startup can to a million people, that's really our goal. But at the same time, we also want to be, you know, building great, high-quality products that are reliable, and that requires a fairly significant kind of investment in time and attention in engineering skill. And I think so, we're trying to solve for both of those.So, its getting better?It is getting better. I know, you know, there's been a big focus on reliability and bugginess, particularly this year, and I would say that every metric I can see on the site says that it's improved significantly already this year. What is operation developer love? It's part of this which is to try and make sure that you know, people, you know when the platform first started it was all great. You build a Facebook application and everyone uses your app as a new user. A couple years in we have, you know, many hundred million, billion dollar businesses built on top of the Facebook platform. And so, they understandably expect a quality of service to make sure that they can have a good sustainable business. We want to make sure we're doing everything we can to again bridge these gaps which is we change our platform quite a bit to adjust and add new features. But we want to give people heads up, time to look at the new features and test them out themselves before they go live to the site. So it's trying again to solve these two things of moving fast but building a high quality product. And going back to the product. Facebook, it seems like you are always trying to refine some settings. Privacy settings have gotten significantly easier to use in the last few years...Yeah.But you're also adding things all the time too. And like today, subscriptions. I feel like if I were trying to explain subscriptions to someone who isn't familiar with Twitter or Google+ or the difference between a one or two-way friending model, it would probably be, it might be a little confusing. So I'm wondering what are you guys doing to address or at least keep in mind the fact that your site is growing quite complex? And that there are different ways to follow people and there are all these different things you can install and content is being shown to you in all these different places. It's kind of overwhelming sometimes. I think my favorite part and one of the things I really like about both friendless and subscribe is if you don't want to have to deal with them, nothing for you to do. Like literally use Facebook the way you have been, you don't have to adjust any settings. You know, like nothing has changed in your experience. So I think from that side it's not an addition of complexity, including you know the way we've done friend lists is that they get added to your left nav by default so you can see them when they are there and you can experiment with them and decide whether you like them. But if you don't use them they will fall off the left nav. So they literally get out of your way on the home page. So you don't have to deal with them if you never use that feature. Similarly with subscriptions if you want to fine tune what you see from people, which is feedback we get all the time. I mean, it's a very commonly requested feature. It's just, hey I really want to hear when John gets married but I don't want to get every photo he publishes. I remember you guys actually used to have this ridiculous system where you could dial in various types of content. It's like a big mixing board. It was like a DJ mixing board like, no one used it. I did, I regret it. Well you did so sorry. But it was way too complicated for what we are trying to accomplish. So and then subscriptions I think, you know, not everyone is going to want people to follow their public updates and that is why we decided that you had to explicitly enable it. So that's something that I gotta turn on so, you can follow me if you're interested in hearing what I have to say, you know, I'm sure you do too. But you know, other people don't, you know, want to be, have their public updates don't have to do a thing. Is Facebook music going to integrated into the iPad app? I'm sorry? Is Facebook music going to be integrated into the iPad app? Facebook? Do you want the Andrew Mason death stare at this point? I can take it, I can give one back too. Let's do Alright. I think that was good. Okay. So here's another, I feel like I'm going through all the things on Facebook that irritate me, but thank you for being so receptive. Alright so...I think I flustered you. It's not that hard. So one of the things on Facebook that's sort of gotten to me, like I said, I've been on the site a long time and at times it feels like a chore. And part of this stems from the fact that I have a significant number of inbound friend requests and messages from people I don't know. And I'm sure most people won't have to deal with some of these. And the other hand, it seems like everywhere I go on the site there's like a new widget saying, hey, do you want to approve these new friends or you forgot to look at this message. I'm like I didn't want to look at the message in the first place. How are you, I mean, is this something that you guys are considering or are aware of, the fact that sometimes Facebook feels increasingly like work? Well I think a lot of the things we've launched this week actually are designed to help, you know, the way it's like really dial in the experience for what you want. So for example, getting friend lists, friend requests from people you don't want up 'til now that has been the only way if people have been dying to hear from you the only thing they could do was send you a friend request. So of course, they're going to do that. And now you can enable subscriptions and I think people that would normally say, hey I'm sending you a friend request can instead subscribe to you and there's no more work for you. So, I think that that is one very concrete way to make in particular your life easier. But even with Friend List the beauty of it is really allowing you to really filter your feed and my personal favorite feature is the close friends friend list. When you add people to that list, you get notified when people publish. Because I think the other feature I've certainly felt it personally. And we've heard it all the time is, like, look I have all these friends but I missed the update from my wife or from my brother and, like, that was the one I really wanted to see. So you have this kind of stress of like I have to keep checking to make sure I didn't actually miss this one update and really kind of close friends helps with that just like hey, we'll notify you when these people publish an update so people you care about . And so you don't have you know check and check and check to make sure you see them. So I think these things even though are really designed I think to tune the experience so you kind of get exactly what you want out of Facebook. As a product used by a good fraction of the world, many billions of minutes a month, it's important for us to provide the full kind of spectrum of tools for someone who just doesn't want to mess with anything and wants ten friends to, you know to power user who has 500 friends and fifteen thousand subscribers. Like, so we want to provide the few range of tools to make every ones experience what they want. So we've got probably time for one more question. How is Facebook messages doing? So, that launched also about a year ago. I believe it was last November with the goal of, it wasn't. You guys were saying it wasn't e-mail. Although, you is get an email address, and sort of trying to reinvent the way people communicate by consolidating all of these messages into a single platform. For me, it just means I have one more thing I have to check. I guess I already had to check this instant messages. But is this something you're seeing, maybe teenagers? I know mark at the time when I introduced it said that teenagers were using chat all the time in these instant communication. That trend? Are you seeing them using facing messages a lot? Because it hasn't really changed the way I communicate.Yeah, have you used the Facebook Messenger app?I have. That's pretty nifty. I'll give you that.Facebook app I have to give a shout out to the team that built that. That app is awesome. It just is...You know, once you...I have it on the bottom doc of my iPhone, and it just is the go to place I go to to communicate with people, because it's so fast. It's faster than SMS. It's faster than email. It's got everything I need right there. So that has changed the way I communicate for sure. We've seen, since we've launched Facebook messaging, like in a month over month just staggering growth in usage. So, you know, the number of messages flowing through the system is pretty insane. So we've seen a really great adoption of that. I think, you know, Facebook messenger is starting to change I think the way people communicate if you use it. Cool. All right, well, thank you so much, Mike Schroepfer...Yeah....for joining us. It's been a really fun conversation. And I think we'll have some cool stuff at F8.Cool. Yeah.Is the iPad app coming? F8's going to be awesome. I think everyone should come. The next week and a half are going to be really exciting.Cool. All right, thanks again.Cool. Thanks. There have been allegations that Facebook has, shall we say, had a spurt of inspiration following the unveiling of Google+. Mike Schroepfer is given the chance to defend their new features here, and to explain some recent decisions to change or eliminate features. And of course, it's fun to put companies on the spot when we've got inside information. In this case Jason brings up the unannounced iPad app and Facebook Music. The subsequent "death stare" is pure gold.Elon Musk: Starting A Company Is Like Staring Into The Face Of DeathAs you're all headed back into the auditorium, we want to thank Motorola Mobility Ventures for hosting our closing cocktail reception. Many of you have noticed that we really sort of upgraded this year. We've had forward Ford as a sponsor and I think they really embodied the true spirit of what we try to do at Disrupt both through all the activities that they did at the Hackathon, as well as during the conference proper. So we're really excited that they're embracing technology as much as we're excited to have them a part of the conference. So we started off with the Hackathon: over 700 participants, 130 hacks, over 20 sponsors giving away over a half million dollars in awards, products, and recognitions, including Ford, CrowdStar, Fox.net, NewRelic and IBM. For the conference, we've had over eighty sponsors and over two hundred fifty start-ups who are participating in StartUp Alley, which is a huge record for us, and I think it's just a great symbol of everything that's in our ecosystem today. There are a number of our lead sponsors that we've really like to call at and thank. AMEX is a serve and Red Bull kept us well caffeinated and full of sugar this week. Ask ran a number of contests. We have creative content that was streamed by Mind Jet and dot net. Start up 411 was hosted by IBM. We had some cool lounges each by tagged imposturous after parties every night that I know kept you out late. From Bridge water, Mail Chimp and Mind Jet, sponsored our VIP lounge, and we're really lucky to have a number of partners who work with us on this start up battlefield content sponsorship and those include Google CRV, Perkins, Cooley, fund and NEA. We're also incredibly lucky to have some great partners with us on the events. Mosaic Events did our AV production, Marriet Systems kept over 300 Mbits of internet power distributed all week for us, which was terrific. Giovanni did wonderful Disrupt artwork for us and Alexander did an endless number of creative projects, both digital and print, for us. And we have a wonderful Tech Cruch event team under the leadership of Tanya Porquez, Lejeannie Legozo, Jennae McPherson, and Susan Hobbes, who will be looking forward to getting a little sleep tonight. I've told a number of you that this is usually my favorite part of the conference, because it's at this point that most things that could have gone wrong would have. Thankfully, we haven't run out of food or lost air conditioning or Internet connectivity. But tonight I find myself really not wanting this event to end so much. And I think that's because tomorrow Tech Crunch has to start a new chapter of its life, and that's a chapter without our founder, Michael Arrington. And because Disrupt is really full of start-ups and founders, under. I think that there are many of you in the room who can probably appreciate and empathize with how, we, at TechCrunch might be feeling tonight. TechCrunch, like most start ups, has really been operating as a really closely knit family. And so the loss we feel is great, even as we welcome and embrace, Eric is our new editorial lead. Sorry to accept the loss of a business partner and it's hard to accept losing a war of principle, when unconventional ways have made us, and our events like Disrupt such an amazing success. Steve Gillmor wrote a beautiful piece about Michael last night on TechCrunch. And I'd encourage you all to read it. Not only because it will drive page views and our advertising, but and mostly because it really sort of nails the effects of Mike. Mike has been the first to say he doesn't want it to feel like this is a funeral. He's certainly not dying, he's going on to do amazing, new and wonderful things. So in that spirit, we have a little memento for him. Mike, are you around? Yeah?We can't really hear you back here.OK.So he has something. It's probably the one piece of technology that you don't own. It's a financial calculator and it's in honor of your new role as a VC. I know it's something that you'll never use but it looks really at meetings, and if you get bored, you can try to predict the future cost of milk in 25 years or how you should remortgage your boat or any number of other crazy ideas. But in all sincerity, the reason you won't need the calculator is because your natural business instincts have always been more accurate than my best financial models. So again, just on behalf of TechCrunch, we want to thank you for creating the business thank you for really impacting the ecosystem, and thanks for being such a great friend and partner.Thanks. And so now we're thrilled to be able to introduce the Elon Musk, who I'm not sure. We wanted to sort of bring him in from space, but I think he came in as Tesla to speak for a few minutes with us with Eric John Felt. Thank you. So Elon just rolled in, literally, and thank you for taking the time for us. Speak for a few minutes, and then we got the winners. So, you know, we have a room full of entrepreneurs here and 30 of them, actually more than 30 of them. 30 launched onstage in the past few days, and then we had 200 more in the alley and so, for many of the people in the room, this is sort of day one for, you know, their entrepreneurial journey. Someone who has founded numerous companies and built them to billion dollar companies. What advise do you have for anyone starting on day one? What can they expect?Well, expect it to be very difficult. A friend of mine, Bolie, who I think phrased it well, "Starting a company is like eating glass and staring into the abyss of death". If that sounds appealing, go ahead.Yeah. Why is that appealing?Well, I think It's going to be different for different people. In my case, the companies that I started, I wanted to have a significant effect on the future of the world, or try to, at least. And so it wasn't really from the perspective of figuring out what's the easiest way of making money. Because that would have certainly ruled out rockets and electric cars that it was really from the stand point of what do I think of the important problems have to be solved in order for humanity. Have a bright future and the sustainable energy with production consumption as well as space exploration and ultimately, you know, getting out there and scoring the stars. And I think those are two major ones. You know, I think the biggest problem that humanity faces in the 21st century is sustainable energy, terrestrially. And then the biggest problem of the sort of Millennia is the extension of life beyond earth, so I want to try to do as much as I can in that regard even if it's not the easiest way to get money.Right. So, some of your former PayPal colleagues, Peter Thiel and we're sitting here earlier and we're lamenting the fact that weren't enough entrepreneurs really going after true innovation. I don't think anyone can accuse of that. For many of the entrepreneurs here who are, you know, creating internet companies for the most part. That has definitely been, in the past decade, this crucible of innovation. Where are we in that cycle or should they be looking elsewhere, like where you are looking? I think for somebody who is just starting out as an entrepreneur, I think the internet is is a great place to start. Because if you're just starting out, unless you've got a ton of capital that somebody gave you or you inherited or something, you have to start a company that requires a small amount of capital where it's heavily weighted towards the intellectual capital in your head. So I think anything to do with sort of software and/or the internet is a really good starting point. It would have been impossible for me to have done electric cars, or rockets, right from the start. Because, it does require money to get anything done. One thing - and if anyone wants to ask a question, we might be able to take one or two questions and you can come right up here. Can you explain to me, how do you run a space company and an electric car company at the same time? Both of them seem like very challenging enterprises in their own right. Does it help you to more than one or are you just juggling everything?I'd say I do it with great difficulty. It is quite hard. Do you recommend running more than one company? No, I don't recommend it. I tried to not run two companies but then I didn't have a choice. I had to run both companies or one of them would have failed. where are you with, so Tesla, I think is a very interesting example where your entry product was a very high end product, right? Yeah. And now you're going to have more of a mass mainstream product with this civic model, more or less sedan. What the price, did that work out as you had planned or were there hiccups along the way that you weren't expecting.Well, there were certainly many hiccups. That's an under statement. More like choking to death and barely surviving. So it was difficult, I mean never having been in the order of business it is impossible to predict. All the issues that we would encounter ahead of time and yes. So we knew it would be hard, but we didn't know it would be as hard as it was. And then, with the down turn of the economy, which particularly affected core companies, you know General Motors and Chrysler went bankrupt, So it's a really just proportionately affected the car business that made it even more difficult. It's still tough times. Do you feel like you are still in the valley or where are you in that?I actually feel very confident of Tesla's future at this point. I don't want to be complacent or overconfident, but I actually think it's in a really good spot. Is SpaceX going to be our trucks to space that everyone wants? Well, SpaceX is already slated to be the main replacement for the space shuttle, and we'll be doing the first docking with the space station probably in December. Although with the recent [xx] failure that could get pushed to January or February. The schedule is somewhat in flux, but basically, within the next three to six months, we should be docking with the space station; transferring cargo there and bringing science experiments back. And then in about three years or so, we expect to be carrying astronauts. Wow. And then-. That's the real test. That's right?No.No?No. Astronauts are just biological cargo.You make me nervous. Do we have questions? So the problem we have with electric cars is that currently they are still plugged into cold generators. Do we need to reduce the cost of electricity or increase the amount of local solar generation to make the electric cars even more viable economically? So he's asking, "How do you make electric cars viable, but think about the whole solution, about the generation side, as well?" Right, absolutely. Well, that's why I sort of phrased it as sustainable energy, rather than just cars because you need to have sustainable production as well as sustainable consumption of energy. The good thing about electric cars is that they allow you to create energy by a number of renewable means and then gain transportation by charging the car. But you do have to solve the sustainable power generation problem. That's what solar city is about. [xx] are doing a phenomenal job. SolarCity is actually the largest provider of solar card systems in the country. In fact, they just announced a deal to do solar panels on military housing which are more solar installations than have been done cumulatively in the United States to date. Right. So basically you have to tackle both ends of the problem at the same time? Yeah, exactly. Do we have another question? Hi Elon, a lot of people consider you a visionary. Could you talk a little bit more about your vision for the future in the next maybe, twenty and fifty years, and what you see the world looking like then? Well, on the energy side, I think by the mid point of the century I think solar power will be the single largest source of electricity. It may not be a majority but it'll be the single largest the combination of [xx] and solar thermal. I think in about twenty years, a majority of all new cars manufactured will be purely electric. And twenty years after that, the install base will have flipped over to the point where the vast majority of the cars of the road are are purely electric. Because the install base of cars turns over about every twelve to fifteen years. So, I think that's a pretty positive thing that will occur which is going to require an enormous amount of work and investment and everything, but, that's where I think things will end up. We have time for one more question. Anyone have one last question? Right there. Come right in front here so Elon can look you in the face.I would like to know your point of view view about education; the future of education.Sure. My point of view on the future of education. Well, I can tell you what I think education should be Education should be more like an interactive game, and much less like what it is today which is sort of a rather boring vaudeville act. Sort of one person kind of droning on in front of a bunch of others with with no special effect. If you think of the days of vaudeville - before there were movies, or video games or anything. If you wanted to see a play, any given town would have a troupe of actors. They usually wouldn't be that good. And now with movies you take the best actors in the world, the best scriptwriters, the best directors, special effects. You do multiple takes and you make it really compelling, and that's why you want to sit down and watch a movie. That's how teaching should be. Then what teachers - and there's still a role for teachers - should be to help people where they get stuck. AS oppose to sort of, you know, just lecture at them in front of a class room. That's helpful. Okay, that's perfect. One last question I would like to ask you. We're talking about these different areas, education, energy, transportation. Do you think that it takes sort of, you know, extraordinary resources, the types of resources that you were able to accumulate to tackle these areas or do you think that any entrepreneur can tackle these areas just like any entrepreneur can create a mobile, a mobile app or an internet service. We've been talking about the cost, the cost to create an internet company has decreased. You know, it's so cheap. Some of these areas the capital primes are higher.Yeah, absolutely.Should that discourage people or not?Well I think, I think, it it the various and the higher the capital requirements the higher the barriers to entry. There as on we haven't seen significant improvements in space transportation is because the barriers to entry is extremely high. There's normally the province of governments and big governments at that. So when they're entry then you don't see the new entrance. You don't see the innovation. It's really the new entrance that would drive innovation. For entrepreneurs that don't have capital they're really going to have a hard time starting a company in a high capital business. It's possible, but in order to do that you'd have to work at a company that does something comparable so you have a convincing story to venture capitalists to give you quite a significant amount of money rather than, instead of saying, say three million dollars. You need say 30 or 40 million dollars. It's a much higher hurdle. Right.So therefore, I think it's better to try doing something Requires low capital as kind of your first company with the success of that. Then take the capital from that and plow it into your second company. That's what I did basically. My view is that information technology can drive disruption in all these different industries and for the low cost way perhaps you can do that. And once you, maybe you won't be as destructive cleaning an electric car, but you can still make some sort of progress in different industries like transportation and energy there might be a way to get your foot in the door. Sure, its basically just software as applied to those industries. Well, what a great way to end a conference on disruption internet entrepreneur trying to disrupt transportation, energy, space. Thank you for joining us this.Well thanks for having me.Thank you. So we're gonna go to the awards. The mega-rich investing in space travel are often written off as modern-day Don Quixotes with too much money on their hands. I myself have done so. But Elon Musk isn't some lunatic miser, building expensive toys to satisfy his vanity. He and others like Jeff Bezos and Richard Branson are investing where the industry fears to tread. I love the dispassion with which he refers to astronauts as "biological cargo." And on a more grounded topic, Musk's comparison of our education system to the vaudeville era is simultaneously esoteric and insightful.Sequoia’s Doug Leone On Entrepreneurs, Billions, CrunchFund, And His Hatred Of PhotographsDo we have Michael and Doug? So Michael's now going to interview Dough Leone from Sequoia. Sorry. I got a cough over the last week. I don't know why but hot tea seems to be the only thing to do it so I'm running out of hands. I'm super excited about this next interview, because not many people know Doug Leone personally because he keeps a pretty low profile but he has been at Sequoia since 1988, I believe and he's one of the most powerful venture capitalists who ever lived. And he's going to come up on stage in a rare interview and talk to us about what he's seen over the last twenty plus years in this industry. And I'm really excited about this. So give a welcome to Doug Leone, partner at Sequoia Capital. You're all miked up. Ok.Ya. You joined Sequoia in 1988, is that right?It was a thousand years ago it feels like, yes, 1988.What made you decide to become an Adventure Capitalist? I was a sales guy, and a sales manager in New York City, and I met the CEO of Sun Microsystems where I would their very early I think employee number 50 something and he was my age and I met the venture guys where my and I said, "Holy cow". I thought I was a little hot thing in New York City selling and managing and I met these guys called "Adventure Guys". And I said,"I want to be one of those guys." So I put myself on a path, an forward path to become an Adventure investor.Was Sequoia the same power house then, that it is now. What was Sequoia in 1988?Oh, it was a very different firm. It was a partnership with a conductor route, very dark offices, not very friendly, keep keep in mind that back in 1988 the typical founder was a forty five year old middle manager, maybe an engineer, who had started a fund whose thought he knew everything and so it was a different set of rules. So, look, I'll be very frank, back in 1988 I think that Sequoia was a pretty tough place but I should also tell you that we have spent the last 20 years to completely change up with the times for the simple reason that if you don't change in our world, I think you go out of business as many of the firms have.You just jumped ahead a bit. The kindler a gentler Sequoia. I didn't know you had a reputation for being bad access back then. What does that mean? Is it, do, you just don't take any shit? I mean, you still don't, it's so what.No, no look. There's many ways to give a message and clearly we run our partnership in the same way that we coach our companies to be run. Meaning that you want to get the job done, if someone sends you an email they'll try to respond within the next two, three, four, five minutes. Think about all the first order issues. Be a clean thinker. Those things were always there. But now you're investing in a 22, 23 year old founders, in may cases a 19 year old founders and you want to save the founder in either a CEO role, a VP product roles or a very important technical role and that is possible to actually do with a 22, 23 year old founder. You'd have a 45, 50 year old founder, who is really bent to being the CEO, if things don't work out for that founder, it's a different conversation but thankfully in 2011, many of the founders in Sequoia Companies are now running the companies and if they're not running the companies they're definitely in the key role to manage the direction of the company do, you said that the average age of a founder in, when you joined was around forty five? Is that Much older.Much older than that.Much older. And now what is it, below thirty ?I would say twenty five or less.Ya, amazing. Does that mean that, you know for me I'm forty one, if I was pitching a start up. Am I a natural, is there age discrimination for anyone over thirty or it's just works out that way.Yeah I think you're over twenty six, fix that you shouldn't bother to come inNo, that's not the case. We have many founders that are more advanced age. I'm lucky enough to be on a board of a wonderful SAS company, probably the number one company, the private SAS company in America in a SAS world called Service now the founders started a company at forty five years of age and he is terrific so.Are 25 year olds awesome entrepreneurs because they're fearless or because they're clueless?In some ways clueless is a little harsh. I think I'd say it a different way. They're big dreamers. They want to change the world, and in many cases, they don't know what they don't know. But that's where we come in. We want to make sure we help, as business partners at 25, 24, 23, 27 year old founders and make sure that we help that founder just stay away out of making basic business mistakes that could cost them but in some ways it's a little bit of both.There was some of us in this room remember what happened around 2000 with the internet bubble exploding. Yes. And everyone knows that a lot of venture funds lost a lot of money. Yes. Have you guys ever or had a fund, atleast since you've been there or ever, that lost money for investors.No, we actually, our worse fund has returned capital and then some and actually look, look I don't think we're babes in the woods and so on but in, I remember in 2002 when it looked like one of our funds wasn't going to do well, we actually took our check books out in a personal level and wrote personal checks to the individual investors. The Silicon Valley crowd that invests side by side with us, to make sure that we could say no one has ever lost money investing in Sequoia Capital. I don't know. If you look at a start up, you talk about 88 or 90, a 45 year old founder some can conduct hardware type, core technology and science start ups. Today we'll talk a little about what you're seeing today in the investment space but younger founder maybe confuse about what to do about press and more importantly investment and there's angels and there's competitors or Sequoia and all the other VCs. What advice do you give to young founders in this sea of confusion around starting a company today? Well, think of your investors as your business partners. And think of your company, not just in what you need in the first four or five months but what you're going to need over the next three, four, five years and choose your investors and you're business partner extremely carefully. Said differently, there are some companies where you may try to answer a question in the next ninety days, if you got that kind of company maybe having angels who we consider partners as well may make a lot of sense. But say you're extremely focus and you know what you're going from day one, and you know your company is going to need 20, 25 million in to get there, because while it's very cheap to start a company. It's not so cheap or inexpensive to roll out a company. In our case one of the things you may want to just consider is finding business partners from day one that can take you to the long run, take you through the winding road that's clearly going to have some ups and downs and help you to finance your company through what could be some of the tougher days ahead. So in my mind, Angels have a role thankfully. Venture guys have a role, the people that make me the most nervous are the angels that are really venture investors because now they have a hundred million dollar fund and they call themselves Angels. At that point, they're bona fide venture firms and so... make sure that you invest in a partner that has experience, bandwidth and tells it like it is. Can I just say, I really like your socks?Thank you.Your socks are awesome. People were pointing them out backstage. I hadn't gotten a good look at them yet, but it makes a statement so. Let's talk a little bit more about Angels and VCs. There's been a lot of stress between VCs in general and Angels in general over the last couple of years and how much of that is manufactured and how much of it is real and also why do Angels exist? What is the evolution of venture capital, what's happening? so turn the clock back to fifteen years ago, we invested a lot in the infra structure layer. If you're investing in a computer company and or a semigraphic company, chances are that company is not your first rodeo. Chances are that you've gained experience at Cisco or Sun Microsystems were never compliant, and now you wanted to go build a big thing. That big thing was gonna require 30, 40, 50 million dollars and experience really mattered. Knowing how to build the chip really mattered because the last thing you want to do is build a very expensive chip the first time around. Now we saw the maturation of technology, lots of the infrastructure has been built, clearly that's gonna involve, a lot of it has been built, and we're investing a lot more at the application layer, so as you're investing in the application layer, a few things are starting to happen. One, the cost of PCs are down to five hundred dollars. If you want to host something in the Amazon Cloud, it's very kind of inexpensive. Feel free to use the open source software. So it's become a lot more inexpensive to start a company and you're investing at this thing called the application layer, not the technology layer, therefore younger founders can now try to participate and do which means that as a response to that, there's been the growth, the rapid growth of the angel round, which I view as a good thing because of the one thing it did, it put all of the sleepy venture guys out of business to wait to see change. We at Sequoia, love to see change because change means opportunity. So what you've seen as the growth of the angel community, which is quite necessary. Now, if you look the angels, they like to say, well, you Sequoia, you are the latest stage money, like we'll come see you at the Series A or the Series B, we at Sequoia feel quite differently, we do a number of Cs, where the sponsors are Y Combinator, we believe we want to be the very first penny of capital into a company for the simple reason, we want to be the business partners to these young entrepreneurs from day one, so many times we cooperate with angels, I see some angels in the front row where we're coinvestors with in number of our companies in many cases the angels invest in companies and then we follow them and in some cases the angels follow us, but make no mistake, we want to be the first business partner that a young entrepreneur has for the simple reason that we understand that we know after many, many years, that your DNA in your company, is said in the first 30, 60, 90 days and we like to be there to assist you in creating some of the greatest DNA that Silicon Valley has ever seen. Well, let's say hypothetically that there's a young entrepreneur who wants to take angel money from you and you've offered it but let's say that entrepreneur also wants to take money from a new angel fund, like say crunch fund, you're okay with that, right? Or is that a situation where you're going to be squashing us out of a deal.No, I'm, look I'm incredibly ok, with coinvesting with angels. The only thing I ask the entrpreneur think about is what differentiated knowledge does the angel bring, is it a different part of roll, that's where different part of the world is it a different set of experience. So the one thing that I would counsel an entrepreneur to do, is don't just do an angel round with people whose money has been thrown your way. Think very, very, very carefully playing chess with your company and make sure your Angel investors can assist you in building the business, so if the crunch fund has a differentiated set of experiences that are going to be quite useful to you, then by all means invite them in. I think I have some skills. Crisis management, for example.Then you're welcome. I have a Twitter account with 80,000 followers.Good for you.And, you know, I can use that to.Exactly.With appropriate disclosure, I think I can do whatever I want so. Do you have any other advice for me now that I'm joining the dark side? Do you mind me calling it the dark side or?Well, actually I don't think it's dark side, I think it's the dark side in that the way it's prosecuted by many of the other investors, Like who?Yeah, no chance. No chance. So look my advice would be the following to you. The little companies have really two advantages: stealth and speed. And you come from a world of speed and no stealth. And so if I were going to give you one advice it's to really understand that the best thing for the little companies to do is stay away from the cocktail circuit; don't tell a single soul what you do. We at Sequoia never issued a press release in 35 years and run like a son of a gun and do not tell anybody what you're up to. Okay. I'd say I'd had a conflict of interest in that, except for TechCrunch of course. But frankly, I don't give a damn any more.But now it's no longer going to be TechCrunch.I'm an unpaid fucking conglomerate now, so yeah. Damn it, I promised myself I wouldn't bring that up. How much money has Sequoia raise since you joint?You know it's really funny that you asked that because we really, I really don't know I mean I can guess, but if you look in the Sequoia website, the acronym AUM, which is a private equity acuity, how much money we raised is no where near on our website. You know why? It's irrelevant how much money you raise, it's only important how much money you return to your investors but if you want me to take a guess, I'll say 5,6,7 million dollars but I really don't know.How much have you returned?Well, that I do know. It's going to be closer to 15 to 20 billion and the great majority of that, maybe two thirds of that is to non profits and dominance foundations that have bought great causes to help people in need, whether it be scholarship or the under privileged people, and so on. And we're very proud of that. It's actually LPs you're saying, the investors in Sequoia.Most of our LPs, 90% of our capital is endowment as foundation, It's Harvard and Cornell and Princeton and so on and the Ford Foundation. You know there have been a few big rounds of funding this year. It looks like Dropbox, which you are an early investor in, is closing, something announced yet as far as I know. AirBnb did their round and others. What do you--I mean, this seems like a relatively new thing, particularly these secondary parts--what do you think about these from a VC perspective? Are they healthy for the ecosystem? So there's two answers. First, on the secondaries. I have quite a set of mixed emotions on that. In some ways what a secondary does, it really allows a founder to take some money of the table and then really go for it and really try to build big business. Now on the other hand, maybe because of my upbringing--I'm an immigrant from Italy, I actually came off a boat in the age of eleven and there's something to be said for the feeling of desperation and the feeling that you have no choice but to win and in some ways when a young founder takes 50 million dollars of the table that feeling of desperation may be partially gone and I actually think that feeling of desperation is actually a huge asset to a founder. But having said that you know it, it stops a founder for selling his or her company early and I would tell you all of our great companies, all of our great investments really have had tremendous aquisition opportunities in front of them but if it stops a founder from selling a company early then I'm all for it, but boy, you know, is tough not to love that founder that really is so selfish with his equity and doesn't want to let go a single share until the final day so I have quite mixed emotions about that. In the late 90s these things just didn't happen.Well in the late 90s you didn't have much capital around as you do right now. and right now a days.And everybody get publican incredible amount of capital. There's Morgan Stanley capital, no there's Goldman Sass capital, there's Russian capital, there's US capital, European capital, there's capital all over the place right now.Ya.Why you want to join the capital side is beyond me considering that you're joining the abundant side of the market not the scarcity side of the market.I just like the idea of investing money that isn't my own and making money doing that. And I think that's a pretty good business that's normal.Well, we.I can lose nothing except, really nothing, my job I was going to say, but, we, I mean, but it's just a, it's complete leverage. It's a wonderful thing. That's why I want to be a venture capitalist.Well, then it may surprise you that we invest a great deal of our capital right next to our investor capital, we at Sequoia are not allow to invest in anything that is not completely align with our investors so that we cannot do seeds in the side, the seeds for our investors, sees if somebody, if we pass on an investment, we completely want to align interests with our investors and be incredibly transparent for the benefit of the entrepreneur.I want to jump in to what I actually think is the most interesting thing we talked about in our prep call about this application layer and core technology science, but before we do, that's more for back stage, I like for the audience to be able to ask Doug questions and Doug wants to do that, but I don't think there's any mechanism for doing that, so is there a way to maybe somebody come out with a microphone and people could raise their hands or something like that you know a couple of minutes. You talked about, you mentioned a couple of times this application layer, we're investing in the application layers, cheaper to start companies, younger founders. What are you talking, like what does that mean exactly and what was before?Where, back again, I hate talking about the past, you know, the one thing you should know about me is that I don't even take any photographs because I am deathly afraid of photographs tied me back to the past so I refuse to take photos. So I'm always a little nervous when we talk about the past so turn the clock back ten, fifteen years ago what you do you would invest in fundamental IP that bordered on science. twelve to fifteen months of hiding in a building and coming up with a beta site where now things are very different, now what you can do is get two super smart people in a room, give them two computers and within a weekend, they have something they can launch on the net and they can irritate upon that as quickly as possible. As imperfect as it is, they can get quick feedback from customers and they can irritate as possible. Yes, it's technology but in some ways it's not what I consider and I don't want to offend anybody, the fundamental IP that may require 15, 20 people 15 months to go build. That's what I mean by the application layer. Something a lot closer to the consumer versus the infrastructure layer.So we'll start taking questions in a minute, we have people up here with microphones so if you want to ask the question I'll ask you just walk up here and form a line and then in a couple of minutes, we'll take, we'll be able to take at least three or four questions I think, so just go ahead and do want to ask you a question. So, okay, so that's great application, easy to start company, but what about, what's the next platform? Like core, technology, science. What's going on that you're excited about and where do we need, what do you think that we need to be putting resources and research?So you know, it's almost like, it's very close to the what's hot question, and the real answer is I have no clue. I haven't explained why, the day before we met the You Tube guys I could not have been able to tell you that video on the internet was hot. The day before we met the Yahoo guys, I could not have told you that, boy, finding things on the internet was hot, or the day before the google me and I could not have told you the search is on, what we do know is that we are very at tuned to listening incredibly carefully not holding onto any preconceived notions and really completely fall in love with the entrepreneur who can very clearly articulate a view of the future. So not the answer that you wanted, but that is what we look for, what we listen for, and the last twist I will add, we're very attuned to the entrepreneur that is solving a problem for his or her personal need. The Zappos founders couldn't find a pair of shoes, the Sun Microsystems founder didn't like the computer he was using. The Cisco founders had to connect the routers at Stanford. The Yahoo founders couldn't find anything on the internet. So I love entrepreneurs that look to solve problems they personally have and they just happen to be a proxy for the market for the next 15, 20 years. So I have no idea what's hot, but I'm certainly always listening, big dumbo ears, just listening.Do you want some questions. Could I ask anything? Anything, anything. Ok, so let's ask questions about me. And you could you tell us who you are first too? My name is John Rampton with Pixel. I have a question about raising capital and funding. Are you more likely to safely invest in a company that's in a bay area, or outside, and, you know, if you are more at tune in a bay area, is it worth, more worth it for entrepreneurs to move to the Bay area?So first of all, on the notion that a young company needs a lot of help and a lot of resources. It's very tough to provide a lot of help, a lot of resources to a company in Omaha. So, if you're a young company we prefer you close to home. Now home for us is in the Bay area. Back nine, ten years ago when we made a lot of communication and investment we went to Dallas and now we're going to New York City a little bit but those are the centers and again it is tough if you're in Cleve Land, we cannot help you Now for an entrepreneur coming to the bay area I would absolutely advise that. The only thing that I had wonder about if you had a larger company and you had to hire 400 people, I'd wonder whether you want to come to the Bay area where the competition for talent is so difficult and so pricey, you know. So, but, if you're a young entrepreneur with a young company and a dream, I would absolutely counsel you to come to the Bay area and get embedded in the ecosystem. You know, it's interesting seeing what you've done with companies like Unity, where they're based in Copenhagen, but in all of their development has stayed there but the executives have moved here and they're here most of the time and that seems to work out well. It's not just because of you guys but there's just a lot here going on. That works, right? You can make that work?Yeah, it actually works. And what we did in that case, is we took the CEO, and we spent 24 hours. 48 hours in two days we had them booked in 20 meetings with some of the key people in the Silicon Valley that they should meet, rule off our partners escorted them meeting after meeting after meeting and in 48 hours that CEO got a six month head start in the Bay Area.Next question? Francesco from [ xx]. I really enjoy your talk and I would like to hear like so much more about your experience in the VC business. So here are my two questions. What do you do for lunch and can I join? Thank you. I have to go back to Sequoia in a partner's meeting which unfortunately I'm missing, but I'm happy to lunch with you anytime. My email address is leone@sequoiacap.com. Yeah, but what's your real email address?What?What's your real email address?So what is going... Okay, go ahead. I'm leaving and coming back to Copenhagen because we're based there... in two days, so, we probably need to arrange this kind of early. Is there a way before Thursday to have like ten minutes?No, before Thursday because I'm actually out of town on business for the rest of the week, but send me an email. And when you send me an email, mention, if you say, I'm so and so, forget it. Okay, because now I'm getting old, I can't remember things. But just say, I met you at the show, I asked a question, and we could have lunch.If you could send me a copy of the email as well because if you go with us we're pretty hot. Sequoia is one of our partners you get Sequoia's money to go through us anyway, so there's reasons why you would go with us over. What! Before we got the answer you said you are missing a partner meeting like how awesome are those do you guys I mean you sit around and decide the fate of like these companies is it, is it, do you guys ever do like the, like the Dr. Evil stuff? How does it go?No, the thing we do, we have a dart board and we put the face of the entrepreneur now, no they are quite serious actually there is 10-12 people on the room not a word is wasted, and you know, and we are very conscious, that we are affecting the lives of people, if you come to Sequoia, and you present a Sequoia, there are no Blackberries no looking at your email, the meetings will start on time because we completely understand the pressure you're under when you come to see us and we take that presentation quite seriously and the follow up type conversation quite seriously and so we are very serious about that you're business, our business and so on.Thank you. I'm Ace with NoJuice.com. For early stage or companies that are in stealth mode what types of things are needed in order to be properly prepared when we meet you as far as financial forecast, you know, beta test that sort of thing. Well it's very important that you have a balance sheet for the year 2022 that's quite accurate. I'm kidding about that. No, if you're a consumer company, what we like to see is a very carefully and thoughtfully articulated market view. In my mind, it all starts with you articulating the world at large and why the world needs your product or service. We would counsel you don't come in and just give us the quick, you know, come right down to the atom level. Stay at a high level to begin with. Try to describe why the world is what it is and now it's going to change over time and what your company's role in that world is. In some ways that is the toughest part. Building the product once you have that crystally clear articulated I would argue is the easy part, is almost like coding right? The last thing you want to do is just start coding, you wanna totally just outline what you're going to do. I know the coding part is the easier part. So that's what we really need. A careful articulation of the world. How it's going to change within your market and why you are going to win in the market segment, no more complicated than that.Doug thanks very much, appreciate your time, great we're done.That's it? Network well over and you have one of your portfolio companies coming up on stage.Oh, that.I'll make sure to get out of the way Thank you.Thanks very much.Thank you. For someone who's been with Silicon Valley veteran Sequoia for over 20 years, you'd think Doug Leone would cut more of a visible profile in the valley. Despite his seeming reticence to publicize himself and his company's funds, he's candid here. His perspective is slightly detached, as one who perceives the beginning and end of his investments, and his commentary is astute. More of an insider than many insiders, yet thinking outside the outsiders.TC Disrupt: Office Hours With YC Partners Paul Graham And Harj Taggarrearrangement and if Paul Graham and Harish Kagar [sp?], partners of YC [xx] can come up, we're going to do, I'm very excited about this next session. We did this in New York, with Paul. Paul and [xx] famous for their office hours, where they bring in the [xx]companies, and they get, what, like a few minutes just to come and get advice and ask question to the partners. They get- we have a mic? We have a mic up, please? Hello? Ah. They get 20 or 25 minutes, but I think here, it's short. Here, it's like 6. Yeah, so here Here we have some companies in the hat. Attendees were able to apply online beforehand. So we're going to pick six companies, and you're each going to have six minutes to come up and talk to Paul and [xx]. And so, if you could pick a name. If you're not in the room, I'm going to go to the next name. So let's see, what's that? [xx] John, of TapToLearn. Are you here? OK, come on up to this side please. Robey John.Should we pick them all now?Yeah. Let's pick them all.How many are we picking?Six.Six. So this is much faster than real office hours. Also, we don't know these people!Reedmill. Picking them out of a hat.Henry Bergman from Reedmill. Reedmill? Is Reedmill here? Ok come on up. Right here. Kyle Powers of 'Slides.io'. Kyle Power, are you here? Slides.io?Powers.Powers. No? No, I see someone. Yell if you're here, I can't hear you.I'm here!Ok, come on up. All right. Chen Lee from Bimaple Technology.Chen Lee? Is Chen Lee in the house?Here.Ok, come on up here. How many do we have, four?Four.Yeah, we've got two more.Two more to go. Pick wisely. Emanuel Schattauer from Testranking. Testrank. Testranking. Are you here? Yell. Okay.Okay. Come over here.Honan [sp?] Oresena[sp?] from [xx] [xx] Hernan[sp?] Arrecina[sp?]?Hernan[sp?] Arrecina[sp?] from Ojala or Ojala. O-J-A-L-A. No? Are you here? Yell out if you're here.No Hernan.No Hernan [xx]. Ok, we're going to pick one more.Ok. Keyton [sp?] Aungaria [sp?]Here.from Card Flick, Okay, he's here.Okay, so let's go with the first one. [xx].Alright.Okay. Are you gonna be the timekeeper?I will be the timekeeper. So, can we put six minutes on the clock, or no? I'll be the timekeeper.You've gotta talk into that thing. Introduce yourself, please.I'm Robby, and I run app development company called Tap to Learn. We founded Tap to Learn to add touch to the learning experience. We thought that touch can make learning a lot more engaging.So what age kids This is for age 8 to 13 primarily. So, that's, you know, higher elementary school and intermediate school primarily.Is it used in or is this more of something parents would buy to use at home?This is used, we thought this would be used mostly by parents but we've see large scale adoption in schools as well.You've see large scale adoption in schools?Yes. It's hard to sell to schools. How do you do that?It's online through Apple Educational Pricing.I see. I see. So, you take advantage of Apple's pipeline in through the school?Correct.So, what is. So, you guys are launched.Correct. So we've been there for about 14 months. We've got-14 months.Yes.What's your growth rate like?So we're growing at about 20 percent a month.Twenty percent a month! Yeah. So, it's partly slow, but you know, it's been growing really fast. We've got half a million users.What do you mean? What do the apps actually do?Huh?What do the apps actually do? So, app speech Mac English, Mac English, grammar and spelling. So, that's really three sections. We have about 35 apps and we've got about half a million users. So, you guys are doing good. You guys are actually doing a lot better than most of the start-ups I talked to.But yeah and you know, we doing you know, what we're launching here is you know, we came to Mac World you know, to see what our users think of us. We are actually based in India and then we came to Mac World and we saw all our users and they say: Hey, you know, you should bring education like Angry Birds. So, I did a lot more gaming to our educational apps with Math and grammar. And you know, what we thought was missing was, the fact that there is no OpenFeint or game center for education.There is no what?OpenFeint or game center in which you can actually track your performance on various subjects in a central location which I see.Would be important for parents and teachers and that's what we're launching here at TechCrunch.So, you guys, I mean, you guys are doing great now. The only, the only question is, what to do next. Correct.Right? I mean, do you have any idea where your current market tops out. Is your 20% growth going to stop at some point?It's the school season so we've seen a huge growth spurt. But what we see is You know, post school season, it kind of taps out. Okay and, you know Well, it's okay if it's seasonal. What I'm worried is, like, you have, like, 20% growth is great, right? If you keep that up, eventually, if you really keep it up long enough, you really own the entire universe. So, the only question is, if you have 20 percent growth, the only worry is, where does it stop? Correct. Do you have any guess? Like, what you worried about?Our problem would be covering multiple curriculums. Okay, and, you know, what we focused on is just Math and course standards for K-6 and, you know, going beyond that, we see a lot more requests coming in for tackling higher grades, higher levels of education and that's really an area of focus.Does your stuff, do your apps seemed to people like games, or do they seem to people like educational apps...Educational apps....that have some game aspect?Educational apps that have some game aspect. So another way you could expand if to expand more into the games.Games.I've always thought games could be more educational.Yeah.Right? And if you made them more entertaining right, eventually. I mean, there are some health foods that actually taste good, right? It might be possible to expand into the game space. So that people weren't just, so that you might even, just like, get more use out of the same users. Correct. Right? So, like not just using you as work, but using you as fun too. Are you guys any good at that though? Yeah, I think so, you know.Do you have a knack for making games? Yes, we've launched about five. We've written five game engines and we'll launching new games.Whoa! Are you charging for these?Yes. So, all of our games, all of our apps, are paid. Ninety-nine cents or two dollars.And you say,most of the sort of, distributions, has come from selling to schools?Yes.Have you had any failed pitches?Failed?What's, like, the number one reason when a school turns you down? It 's being not comprehensive enough. We don't cover the entire curriculum.Who is in charge of the educational side of the software? Is there someone behind the scenes keeping track of all the stuff that you have to have in one of these apps?Not yet. So you're just making it up as you go along, and sometimes you happen to make the schools happy and sometimes you happen to be missing something and you didn't even know it, right? True true But I guess you can learn from them.What we get is, because most of our users are paid, they are most happy to voice their opinion and we get a barrage of bad emails that we try and tackle. So that's how we actually understand--Do they give you bad ratings in the app store? Yes we do get bad ratings as well. You know you can avoid that if you encourage people to complain direct to you, do you have stuff in your app for that? Yes. Ok, you'll notice you can predict, if you look at what people are doing in your app so you can predict the point where they're going to be mad, do you do that too? You guys are doing everything I mean there's nothing I can suggest, you have this super successful business, grows at twenty percent a month, right? I'm like looking for something I need to worry about and there's nothing to worry about. Everybody jokes all they say [xx] [xx] I worry about this, I worry about that. I mean it sounds like you guys don't have that much to worry about.No, no. We have plenty to worry about. How do we go comprehensive? How do we reach out in a larger scale, especially to schools you know, and covered up code standards. How have you been doing the sales so far? Is it just one of you?We started off as four members largely, but recently we hired four more so we don't have the personnel. You're all programmers and no salespeople. No salespeople. Wow, that's my kind of start up. Okay. Unfortunately, we're out of time. I'm going to be the bad guy here. Next up, Heinrich. Please give a big round of applause.We need somebody who's in trouble. It's more exciting when people are in trouble.Heinrich Bergren from Reedmill. Are you in trouble, or are you growing at 20 percent a month, too? In trouble.Okay, alright. Here we go. Like soap operas, it's always like disastrous, right? That's what makes an exciting plot. But the only reason is that we're still in private theater. Okay, well, still. What does it do? It's a social layer for eBooks. A social layer for eBooks? What does that mean? So it's making it very easy easy for you inside of the book to share what you're reading and data around that read, and also your favorite quotes and highlights.How does it work? Like, which ebook reader does it work with?We have our own ebook reader. But the end game is obviously to create a platform that taps into every e-reader available. So people have to use your e-book reader in order to use this app. Right now yes. That's a big step to get over. Well yes, but the thing is that we are providing an experience that is very much better than a lot of the different e-readers out there. Yeah, but unless they realize that they won't even try it out, I mean do you have any evidence how hard it is to convince people to use your ebook reader instead of whatever they would have used? Evidence? No. But what we've so far is that superior[xx] a physical e-book reader? Sorry? Is it a physical device or- no no no, of course not, it's an app it's only software. No no, we're not that crazy. Make a physical device are you kidding? We are from Berlin, but we're not, you know.Ok. So I worry.But don't you think there is going, there's how to be third party service that collects social data from people that love reading books, from all around Well, people have to be excited enough about the additional features you offer them. Right.To use your reader instead of what they would've used otherwise.Sure, but that's the case of every start-up, right? No, there's not necessarily some existing thing people already used, right? So, Kindle kind of already does this a bit. You can highlight stuff, you can see them as highlighted passages?Yeah. Are you using that?Yeah, I use that.The problem is for me with the Kindle stuff, obviously that it's for everyone. They don't have any connection to your social graph. And I think that's a big thing. So if they just integrate with Facebook, is there any room left for you?I think so, yeah. Because there's a lot a lot of different e-readers out there, and a lot of different apps. I mean, there's actually, I think Tim Morales said that there's 28,000 reading apps, only for IOS. Where are you in development, like do you have a version 1 of this built? Of the app? Yeah.Yeah. Do you have people using it?Yeah, of course. We have a couple thousand people using it.A couple thousand? That's a pretty big private beta. Where did they come from?You mean country-wise?Just like, how did you find them?We find them mostly because of the viral effect. People share quotes on Twitter and Facebook and also on our platform.So, you see they were like friends and family and they grew it.Yeah. Yeah.What's the greatest thing?And also, you know, our reader is based on three things. It's very simple, it's very beautiful, and it's very social. And that's stuff that not a lot of other e-readers are doing.So what do they do with it? Like, of all of all the different features you have, what's the one the users are most excited about?Probably quote sharing. Quote sharing?Yeah, it's what I think is that quote sharing undergoing a huge social revolution. I don't know if you collect quotes from the books you read, and you go back to them. Yeah I have a quotes page on my website. No, I agree with you. So, people find a passage they like, and they share it with their friends. Yeah. And also collect it for later reference. Yeah. And the cool thing, that it, and it's also available through an Open API, so that you can actually collect all your quotes and then access them later on.Have you ever heard of a commonplace book?A commonplace book? No.Yeah, back in the 19th century there was this big fashion for people writing down quotes in books. Um-huh.That's what you're making.Yep. Your making like, kind of a new, shared, commonplace book. You should study the commonplace book.I should. I'll remember that.How long did it take you to reach 2000 users?We've been... So, we released the private beta in June.It's pretty fast, yeah.And it's more than 2000. It's a couple of thousand. Yeah.OK. And so if somebody wants to sign up some friend of theirs, they just get an account. Right? Yeah.OK. It's not too restrictive for a beta. Well, you still need an invite to use it, but I will give you two so you can try it out. But, no. But if, but if anybody invites one of their friends, if anybody wants share something with someone in their social graph, that person automatically gets an account, right?We haven't even turned that on yet. So you still need to find invites on the web.Good gracious! Why make it so hard for people?Because we want to try out the stuff that we have and make it good enough before we release it to the public.But you yourself want to know the rate at which it spreads.Sure. When the spread is unconstrained. You can of course.Because you want to optimize that. You can't know how well you're optimizing it, unless you know what the actual number is. Right. Why don't you just launch it? We are. Right here. Well, not right here, but in a very short amount of time. What you mean is we will. All right. So, what are you waiting for? No, why don't you just launch?So, I think we're waiting for just to have people to be able to access it from as many devices as possible. So, what I told you, we don't want to be just one app, where people can just read open e-books that they can now, so we're working with a with a few partners that are integrating our API as we speak.I think you should have launched. I think you're waiting too long.Okay.The point to launch is when anybody in the world would be...would say, "Oh, I'm glad these guys launched. Because now the world is better by that one little amount." Right?Okay. Clearly, if people are recommending this, you know, and sharing quotes, it's doing something they couldn't do otherwise. So you should launch.Okay.Okay.Okay. Let's launch.All right. All right. So that's good advice. Thank you very much. Please give a round of applause for Henrich here. Next... Thanks. Our next entrepreneur in the hot-seat is Kyle Powers from slides.io.It's literally hot, 'cause someone just got out of it. It's a little sweaty too. All right, what is slides.io?It's an online interactive presentation software. We're trying to make presentations. . .Like Keynote.Not like Keynote. It's not like Keynote, not like a Powerpoint, not like Prezi even.What's it like? What does it do?We allow for interaction between the presenter and the audience. So there's things such as...But it's slides?Yeah, there's still slides. There's still traditional slides.Okay. So it's sort of a super set of Keynote?Kind of. You could call it that.Okay.Yeah. Yeah, it is So what other things does it have?So you have, the audience can chat with each other, there's a live video stream of the presenter.A live video stream?Yes.So this only works if someone has got a camera on you? Well, you don't have to use the video. You can be presenting locally.OK.But then the idea is that everybody in the audience, so, like, look at all these people out here with their laptops. Everybody's got laptops, iPads, you know, just a lot of technology that is being unused. I want to be able to utilize this and get live feedback from the audience so, the audience can ask questions to the presenters to vote up other people's questions...Okay. So..The presenter can ask questions to them, as well, like polls.The essential thing is more engagement with the audience. It's sort of not just one way. Traditional presentations, you stand to you in-declaim and it gets broadcast. This way, they talk back.Yeah, exactly. And the specific features are they can talk to one another using chat and they can ask you questions?Yeah, the audience. Because in a traditional presentation, The presenter has to say just save all your questions for the end. And then you make a line and then people, just like we did right here. It's not the most effective way to do that. You could have everybody on their own devices. They entered a question and then other people can see that question if they have the same question voted up.What types of presentations would this be used for because I'm sure the vast majority of cases where key note or something like that is used is like, you know, some meeting of like ten people who work together in some giant company, right? Is that who this is for?There's really a wide variety. It could be for small meetings like that in small companies and distributed workplaces would be a great place for this.Was there a kind of meeting that you had in mind when you first built this?Originally, I was thinking conferences just like this because you have everybody in the audience is on their laptops, but they're probably distracted like reading their email or on Twitter and not paying attention. How big a market is that though? And also, it's such enterprise sales, right? Imagine how long it would take to sell just Tech Crunch.Yeah.On using your system, right?Have you tried selling to anyone? Yeah. Have you tried pitching the software or running this idea by anyone yet?Not yet. It's actually about a month old.A month old? Yeah, but we're launching today, so.Okay. You're launching when?Today. It's live right now.Alright, so you're not waiting too long.Yeah.So what are you launching with? All those things you described? Not all of them. Most. The live polling, I had to disable that, there was a couple bugs last night but that should be working within a couple days.Okay, so it's talks with, it's got all the slide stuff keynote, does it? Does it have that?Yeah. You can, you know, well, there's also kind of another part, aspect of it too, and it's making slide shows easy to build. It's got all the slide show building type stuff, right? Yeah, the same interface.You can drag and drop puts stuff in your slides. You can make the kind of slide, the kind of presentation that you would expect to. Yeah, yeah, it's a little bit more simple. There's some sort of like a lot of animations things you can't support on the web yet because this is all browser based too.So why would someone use it? They would use it, they would say I'll use this instead of the presentation software I usually use because I can ask the audience questions. Is that why?Well, because of the enhanced interaction you keep your audience engaged. No, like the guy's not thinking, I can keep my audience engaged. He's thinking about some specific feature that you give him. What's the specific feature he's going to be saying? Well, the distributive aspect of it, I guess, is the main feature we're targeting. So, you can be giving your presentation in one place. Anybody anywhere in the world is going to watch it live as it's happening. Okay, so you can play your presentations over the web essentially?Yeah, this is all browser based.Surely any web based presentation app could do that too.What do you mean any? Well I know we've funded two, although both of them disappeared after being acquired. It seems there must be many more of them. It seems like a sort of problem like big confrences generally seem to be live streamed on the web.Yeah, and they do, basically usually, it's a live stream, just a video feed. is what you watch, but this...You can't see the presentations. Yeah. Unless they do like an overlay on the video, in which...that's a lot more complicated. Right.But aren't there other web-based presentation tools? Because if you build a web-based presentation tool, you kind of have to go out of your way not to make it possible to play the thing with people on the web, right?Yeah.Aren't there others?There's others. There's a lot of others where you can make your slides online.Yeah.But there's nothing where you can like...Where you can play them?Well, you can play them. And Slide Share actually just started doing this where you can keep them in sync with other people and the video. They don't have any interactive stuff. With Slide Share, you just upload your presentation, your PDFs, you don't have...like this is all HTML. This is so unclear. I can't really...I'm trying to get to like the heart of what's distinctive about you and I'm not getting it. Right? So... how much time do we have? Thirty seconds. Maybe we can still get there. So why is the guy...why is some presenter gonna use you instead of Slide Share or whatever other web-based presentation software?Interactive content, like, keeping the audience with you so they're not...No. I mean specific features, not Okay. Features. I mean we're also adding analytics too, which analytics on presentations right now doesn't exist. So, with this Is analytics the feature that's going to get them? Perhaps - it depends on the brand.You've got to know, you've got to know. When you have a startup and nobody's ever heard of you, and they don't trust you and you might be out of business in a year, there's got to be some specific thing that they need to get from you that they can't get from somebody else that will make them use your thing instead of whatever they're used to. Alright. So think about that, please give Hal a big round of applause.Thanks.That literally was the hot seat. Our next entrepreneur is Chen Li from BiMaple technology. Welcome, Chen. BiMaple. Hi, pleased to meet you. Ok what is BiMaple do? So, BiMaple is a company that does very powerful location pages search is base my research.Location-base what?Search.Location-base search.Yes.Is that like Google Map search?Similar, but the base is much more powerful. Why is it? It's more powerful than Google Map search. Because we see the new trend of location based services and by using our technology-now product, we can enable much more powerful features.Can you give me an example of the kind of search that you could do that Google can't? We provide a few very unique features. First, we can do, look instant search. Search as you type. Second, we can do even fuzzy search. If you couldn't remember the Ghirardelli. We can still find the records for you. What was that second thing called? Ghirardelli, the chocolate. No, no, I know Ghirardelli. What kind of search is that?Fuzzy search.Fuzzy ?Yes.Fuzzy, what does that mean?Meaning, we want to solve the problem of fat fingers. Why you want to tab. You can mistype stuff.Yes.But Google can definitely deal with that. You can try it, especially want you, we can combine all the features into one framework.But you can misspell things in Google search and Google can still find what you're looking for. What Google does, we do this suggestions how to finish the typing but what we are doing is based on my research at my university. We can make the search, we can combine instant searching such as searching to one free market.So, essentially, you heard better mobile UI?That's correct.I bet you you're underlying searching other than algorithms aren't better. The difference is that you're more convenient to use on the mobile phone.That's correct. In addition to supporting a mobile phone so, we can also make a web basing search also very powerful. In fact we just launched our product today in this event called OmniPlaces.com. Called what? OmniPlaces.com . Omni what? OmniPlaces.com. Omni Places. Dot com. What does that do? We can do search millions of business listings and for each place, you can go to many other sites, such as Yelp, Goala, Foursquare or Yahoo Local and it will make it much easier for a user to go different location based sites.What kind of searches do you think are gonna be really popular? Sorry. What are going to be the popular searches on this? Sorry, I didn't get the question. What are going to be the popular searches, like what are people really going to use this for? The reason we want to launch this Omniplaces is if you want to get any information from different site, Yelp for reviews, Gowalla, Foursquare for check-in data, it is now it's very inconvenient to go to different sites by typing in different addresses. By using our Omniplaces you can go to these sites from a single place. We can aggregate, we get their information to make it easier for user to go to the list.Can you give me an example of a search?Do I have any?Can you give me an example of a search Ok. that people will try on Google Ok. and it will be a disaster and they'll say "Google doesn't work. I'm going to go to this start-up I heard that's going to solve my problem". What will they jump to you for?I haven't done the comparison of our search with Google today yet because we just launched our product today. I think about Well, you must have been testing it yourselves before you launched it.Yes, we haven't done the comparison with Google Local completed yet. We're still doing it. Well you must have found examples where Google completely screws up and you're better. Yes, what we can do is, if you want to type in Ghiradelli on the fly, on your cell phone we can immediately find the right country for you. Even without typing in the entire keyword.Okay.Google cannot do it.People will switch to you because they'll say to themselves, "If I search in Google I'll have to type out this whole Ghiradelli and I'm not even sure how to spell it," I'll just go to Omni Places and search there. That's correct. That's one reason. The second reason is, if you go to Google Local you cannot go to other sites such as Yelp or Kaula or Foursquare.You can't search Yelp on it?No, if you go to Google Local, if you say you want to search for Starbucks closer to current location, Google does not provide all the links to all the different places. If you go to Omni Places, you search Starbucks next to current location, we provide you all the links of different social websites and that information. Is that true? Can't Google tell you about the Starbuck's near you? Google does not provide all the links in different places, we can essentially.What links? Like the links of the Yelp profile? Yelp reviews for the particular site, for a particular restaurant, a link to Foursquare or Gowalla about the check-in data for this particular restaurant.How do you come up an idea to work on this?Sorry?Like why did you decide to work on this particular problem of all the things you can work on?We want to provide the user the experience. Now, why did you decide to do this as your start up, rather than a start up to do a social network for teenagers or something?So OmniPlace is just one of our products we are launching today. So, the backing technology is the key we are trying to push the market, it's based on the.No, we're asking why did you decide to do this as your start-up?Because if you want to make a search on mobile phones, Location Based is much more powerful. Was there some moment when there was a search that you were trying to do yourself that you were frustrated by? That can be why you decided, please, you were sitting in a cafe somewhere and you're thinking, God! I need to make search on mobile phones easier. That is not how people start startup ideas. Yeah. People start startup ideas because they have some problem they need to solve or something there were doing in a previous company. I'm asking for the mundane explanation of why you started.Sure. Sure. The story of the company is I'm a faculty at a university. And we do...my research is about research.And this is commercialized research.That is correct.Ouch. So...Like, seriously, commercialized research is like a solution in search of a problem usually. That's why you started. Because you had some software for like...That is...predicting what people were gonna type and you said, "I'll make a start up out of this." Whether people want it or not, right? But there are many companies that are commercializing university research results, which is one of them.In biotech. Do you have a plan for getting users? Like... We just launched the product today. This is it.This is it. We're it. Yes, yes. Okay.All right. Okay, so I am worried about you guys.Sure. Yes. Keep trying.You're competing with Google, right? That's bad. I mean, you're competing with Google at something Google is good at, too. It's not like you're like Apple competing with Google in cellphones. You're competing with Google in search.Paul, you have to think big. That's my answer to your question. "Why not?" Well, the problem, the reason, the reason it's scary is because it's hard to even get a toehold. Right? You have to somehow get users to switch from Google, which they're very familiar with, like their used to the UI, they're used to going there, they know about it. They don't know about you, you know? So you guys are going to have to be like flamingly better at something. Right? There's got to be, what I would do is like, of all, you're, I worry that your appeal, your like sort of 1% Better than Google across a broad spectrum of things. Right? And that's not going to be enough to get people to switch. What I would do is make yourselves much better than Google at a small subset of things. At least the people who need to do those things will switch and then you'll like be at least hanging from the cliff by a finger instead of a free fall.Sure. Well, that's a good piece of advice, Ted. We're out of time.Sure.So, thank you. Please give Tenley a big round of applause.Thanks.On Google. Kind of entrepreneur we like to see. next we have Emmanuel Shatauer with Test Ranking. Sorry if I mangled your name there.What's the start up called? Test Ranking. Test what? Ranking.Test ranking. What does it do? With tag line Google analytics for consumer electronic products. Who is the user who looks at the analytics?Yeah. Let's...allow me to give some background.No, we don't have time. Just tell me, who's the user? Who looks at the analytics?We have a consumer product right out now, and we want to see if it's valuable to switch to the business side, business intelligence.Are you using it yourself right now?Yeah.How do you use it? Like, what exactly are you using?All right. If you got a test ranking.com, you have our old data set. Data set of what?Of laptops. So, what we do is we have a problem by... if you want to buy...Can you just give me an example of like how you yourself are using it right now.If you want to buy a laptop, you have the problem, you have to make sure availability, prize, text. So this is a website for people who want to buy laptops. Currently, yes. That's who the user is. May I?What?We only got six minutes.Okay.You have a website. People go to you if they want to buy a laptop and this tells them about the features of different laptops. Is that what it is?Yeah. The biggest problem when you buy a laptop is that you don't know what's written in the reviews unless you read them. That takes a lot of time, this is what we do, we read the reviews at all 300 attributes, and tell you, "oh wow!" that laptop is really great. Okay.For display and daylight.So, you boil down the reviews of laptops?Exactly. In term and for eachIf I want to go and figure out what laptop to buy, I go to your website and it will have a list. I dont have to read the reviews because it will just show overall "Everybody loves the case. Everybody hates the screen" or something like that.Exactly. Yes.Okay. Well, how long have you been out? How long does the site been launched? We launched very quietly in November and was getting nice traffic with no marketing revenue.Where does the traffic come from? Google searches? And then Google Panda happened and we got obliterated. And that's why we're here.Oh. I see. Were you doing anything dubious? We don't think so. We try to . . .All right. So, your traffic was growing and now, it's flat.Yeah.Because for a while you were getting a lot of traffic from Google. And the plan for making money is lead gen or something like that?Yeah. We are here to test the idea of selling the data and monitor we have to businesses. Because, Toshiba might be really interested in how they are perceived in America, compared to Dell. Well it sounds like the kind of thing that they might have someone in the company already doing. Right? There is probably someone who reads the reviews and says, "this is what people think of us." So you would be selling to that person, you would be like a data service to them, the problem is. you probably could not grow, you could probably grow that into a business that would pay your salaries.Exactly. But you can't grow that into something that like grows into a giant start-up business, which is cool. We are completely bootstraped and, we want to grow, we need a lot of data, we have a system that is efficient, but we need more people doing it.But would it be okay to you if you just had a company that was made, you know a million dollars a year or something like that for you might be able to use.Yes, but Yeah, sure. No. I mean like ever. That's a trouble.No.Because if you're only ever selling data to the laptop manufacturers No.You're like a small service company. Not a design startup...This is a idea to generate enough revenue to support gathering of the data and expanding to other products.Okay, so what is the next product? Camera is interesting because they're quite homogeneous.But you're going to keep doing this plan of summarizing reviews. Ultimately, the way you make money is Other than, selling data to the manufactures, right. Exactly, ultimately your site, that like, everybody who wants to buy anything, goes to you and they just like, look at the summary. The reviews on you and then they go buy it and then you make money from...Affiliate income. We have quite a decent conversion rate. But so where do people go now when they wanna figure out what to buy?Buy.com and then maybe reviews on Cnet and then you have to repeat until you find the product that fits.So, people, right now, they just read the reviews? They have to find them first, which is quite a task. They have to find the reviews? They're usually on the product pages.I apologizeThey are usually on the pages. In the United States, yes. We are in Japan Germany and United States at the same time. We found that especially for Japan there's a huge market, but almost no information available.Do you have someone who speaks Japanese?I.You do?No, I just speak but we have a Japanese person. Ok, because it's hard to be international so early. We started from day one, it came naturally to us. Because you started in Germany, or something like that. Yes, Austrian, Austria, you started in a small country, you have to be international from day one. I wonder if that's good though. Okay. So, do you have evidence that people. I guess you don't really. If all your traffic was coming from Google Searches, you don't know if people like your site or not. If you started to have lots of direct traffic then you know it's working. The you know that you're summaries or reviews are actually preferable to reviews. Do you have any evidence that people actually like this, because you might be going down the wrong path, maybe people don't like summaries or reviews.Yes this is possible but we have a quite acceptable conversion rate which tells us the people who come to our site then go to Amazon and buy the product.I see. Which implies they're not going somewhere else afterwards.Yeah.That's a good sign. You have a blog who does something similar. Much more traffic. Google-ize them. The conversion rate is nowhere near it.Okay. Okay. So, the fact that people are not going somewhere else after you, is a sign that you're good. Alright, alright, because it is always worrying if you spend long time working on something and you don't have any evidence that what you're working on is actually leading down the right path.Yeah.I worry three hundred categories is a lot. Do you think you can make it easier for people? Couldn't you just, I'm just suggesting this idea, couldn't you just say "you should buy, here's the three laptops you should buy, and if you like this, you should by this, if you like this, you should buy this, and otherwise this is the only laptop you should consider". You couldn't just do that, couldn't you? Absolutely, we tracked 300 different attributes, but what we show is only 12, the 12 most important. We also do research on what people actually search for.So, why track the other 288? roughly, because we want to have 100% of this information. If something shows up to be really important but we don't have it, we are Ok, I see, because one of the two-hundred eighty eight might turn out to be important later. Ok, the right product or not, but how do you know you are building the right product? I want to give a chance to our last entrepreneur, please give a big round of applause to Immanuel and Cayton Angeria from CardFlick.Hi.Hi.Hey.Hey. Nice meeting you.You know, that shirt would work better if you used a rounder typeface for the navels.I'm sure it's not an accident.I don't know what you're talking about.So, what does it do?Cardflick is an app that lets you create and share digital business cards. Create and share digital business cards. So the graphic design aspect of business cards or the contact info of business cards? Both parts. One we have a live We're able to do amazing themes created by world class designers and member part.David, are you sure that people still want the graphic design? I mean, don't you think that that's just an artifact of having them be on paper. No, because personal brands are even more important. It's not just about data, it's about who you are and when you meet someone, how they present really matters. When you get a crappy business card you're probably not going to evaluate that person the same way as a really nicely designed card. Yeah. So you think people still want to use some kind of graphic design in order to seem impressed? I think so, the brand obviously carry more weight than ever have. So tell about it. So, the way it works today, once you're logged in, it pulls your entire profile from your various profiles and fills out the card for you and you can edit the info anytime. So Once you logged into the app Okay.You just signed up for this.Right, right. like an app.Yes. Cardflick.co. You download it.How do I send you my card?There's two ways to do it. One One is two people have the app you can just flick the card, hence the name. It's a pretty nice UI gesture.So why is it different to B.U.M.?Well, because B.U.M. sucks. when you are sharing information is more than the data. How do I know who you really are, what you represent the company. What we're trying to say is it's more than just data, it's about the person.So it's sort of like a Belt Dot Meade boiled down to a business card right?In a way, I mean...You can log in and it sucks everything off the web on to you.Right.Sucksing, the good way. But also it's all about expand touch gestures in a natural way. When you're sharing information. Right now, if you want to upload an image it takes forever, you've got to find the file, select the thing. All you do on our app is just literally flick, that's it.You mean when your building your business card? Right. The UI is all flick-base.Exactly.I see. And is there. Do you have some kind of novel trick? Maybe you should make something where there a gag aspect to exchanging the business card, right. Imagienne if you put two iPhones together and flick and you can actually see the image move.That 's what it does.Oh that's what it does? Alright tera gold, I can see people being interested to do something like that, just sort of as a novelty, right?Right, right.Yeah, there has to be some sort of magic or excitement right? Yeah.Kind of like bumping a plane.What's that?Kind of like bumping a plane together.Yeah, but I could see in that world the graphic design part was in fact the important right, it is all about seeing that completely unnecessary, but amusing.Exactly.Bling of like that thing animatedly like moving from one phone to the other.Right.I could see people would be into that kind of stuff. Its dangerous though because you're essentially doing something frivolous, right? If you're solving a definite need, then you know if you're solving it. If you're making something frivolous there's a danger that it could be sort of fashionable for a while.Sure. Sure.Right?So, one other thing we do is we sort all your contacts in the Cloud. So, now you have the Clouds sync contacts database and never needs updating. So, you updated your info. You add a new job or a new position, I would automatically know about it.So, is this billed?So, the business card changes? I have your business card in my system and like the e-mail address changes on the card?Then I would know about it, yes.What if it's too long? We're working on some.You have to do graphic design after the fact.We have some font scaling we employ to make sure that most text. There are limitations obviously in what we can support. Yeah.But most average e-mail lens and website lens workout for now. And would you ask a question?So, is there. Is this launched like people sending calls by now.We're in the App store now, and yes actually was our best day so far. We have 7,000 downloads.Wait.Is it paid app?It's free right now for this week for TechCrunch's rep.Where did the downloads come from?Under I mean, how do they find out about the app? How do they know you're existing?The next web review is on Wednesday. We've got some people that've been tweeting about us, but it's been pretty much organic.Has there been any surprising feedback, anything that you hadn't expected?No, we kind of knew what was coming down the pipe, but I think the biggest thing is, the question of how, how you share with everyone. Diversified public versus private.So you cant you really drag your thing publicly, right? And it seems like the flick aspect of it is an important part.Right.People like to have little social rituals back when they had cigarettes, they would light people's cigarettes and stuff like that.No true. And that's I think where Bump and other interactions don't really work. Imagine you're at a VC meeting and you're meeting eight VC's, are you really going to go. "Hey, Ron. Bump, bump, bump Paul", whoever? It seems kind of awkward, but if you could walk in the room and flick once and they all get it at once, I think is so much natural interaction. But you have to authenticate your phones together somehow or So, if the person doesn't have the app, you can always e-mail the card and then they get a nice beautifully formatted image.No, even if they have the app, how do you specify "I want to exchange my card with these particular eight people?" Right, it looks at the location of where you're at and everyone around you,. So the secretary who's sitting in the cubicle on the other side of the wall also gets it? Right now it's public but what we're doing is we're adding a private UI we're working on. It's done but we have to build it out.If you're going to authenticate the particular phones, right...Right.That's what the bump thing does.Exactly. They do a good job of that. Business cards are essentially public information. You want to get your business out there for the most part. It's gonna freak people out though that they suddenly get this extra person in their contacts that they didn't need to get. Well, you can accept it and deny the contact. You can always say, "I don't want it accept this."I feel like...I worry. All you have to do is have one kind of leak, right? Where two people are meeting and on the other side of the wall there's somebody who's like, "Hey, wait a minute. These two people are exchanging business cards." You know?I know. That's totally valid and we need you to address that well.What if it's a business insider around the other side of the wall? You know?That would be troublesome.Erickson would like that. So, unfortunately we're out of time. Okay, I would worry about the security thing. All you have to do is have like one bad story. That's the way security works. One bad story...Okay....and everyone jumps all over it. You gotta be able...if you're gonna share with people, you can't share with people you didn't mean to. Right. Understood. We've got a fix for that in place.All right. That's my biggest worry.All right.Okay. Well that's all the time we have for our episode of Office Hours. Please give Paul, Art, and all the entrepreneurs There's a big round of applause, always fun, you can just, leave that with me, thank you very much, thank you, thank you very much. Okay. We have one more amazing session before lunch. I Paul Graham's Y Combinator "office hours," in which YC company founders get brief but to the point advice from this startup wizard, was a hit in New York, so we were looking forward to the sequel. Graham didn't disappoint, doling out encouragement, criticism, and sage advice in general to entrepreneurs who were at a loss. Worth a watch if only for the looks of intense attention maintained by Graham and YC partner Harj Taggar practically the entire time.That's as many videos as I dare embed without risking browser implosion, so if you're looking for more video, go to TCTV's Disrupt channel and start scrolling. Crunchbase RON CONWAY DAVE MCCLURE JEFF CLAVIER MAX LEVCHIN PETER THIEL ELON MUSK PAUL GRAHAM JOSH FELSER DOUGLAS LEONE AYDIN SENKUT HARJEET TAGGAR Person: Ron Conway Website: Companies: Haute Secure, Jaxtr, Angel Investors LP, Topsy, Asana, SV Angel, Associated Content, 140 Proof, WePay, MarketShare Partners, Start Fund, DonorsChoose.org, ZocDoc Ronald Conway has been an active angel investor for over 15 years. He was the Founder and Managing Partner of the Angel Investors LP funds (1998-2005) whose investments included: Google, Ask Jeeves, Paypal, Good Technology, Opsware, and Brightmail. Ron was previously with National Semiconductor Corporation in marketing positions from 1973-1979, and Altos Computer Systems as a co-founder, President and CEO from 1979-1990. He eventually took Altos public in 1982 and served as CEO of Personal Training Systems (PTS)... Learn more Person: Dave McClure Website: 500startups.com Companies: Simply Hired, PayPal, 500 Hats, TeachStreet, Founders Fund, FF Angel LLC, Twilio, fbFund, CrowdFlower, Samasource, FanBridge, Life360, SlideShare, KISSmetrics, bitly, Jambool , MyGengo, Worldly Developments, Ninua, Recurly, Linkdex, AwayFind, Wildfire Interactive, ERPLY, UserVoice, 500 Startups, TextualAds, CapLinked, CoderBuddy Dave McClure is a venture capitalist & the founding general partner at 500 Startups, an internet seed fund and startup accelerator program in Mountain View, CA. Dave has been geeking out in Silicon Valley for over twenty years, and has worked with companies such as PayPal, Mint, Founders Fund, Facebook, LinkedIn, SlideShare, Twilio, Simply Hired, O'Reilly Media, Intel, & Microsoft. He also likes to play ultimate frisbee when his knees don't hurt.Dave has been an investor in over 100... Learn more Person: Jeff Clavier Website: softtechvc.com Companies: Gnip, SoftTech VC, FanBridge, Curse, Worldly Developments, VigLink Based in Palo Alto, California, Jean-Francois “Jeff” Clavier is the Founder and Managing Partner of SoftTech VC, one of the most active seed stage investors in Web 2.0 startups. Since 2004, Jeff has invested in more than 20 consumer Internet companies developing new concepts (such as social media) or revisiting “old” ideas with a new set of economics and technologies. In 2007, Jeff was recognized as one of the 13 “Web 2.0 King Makers” by Business 2.0, and is... Learn more Person: Max Levchin Website: max.slide.com Companies: Slide, Evernote, PayPal, Yelp, Confinity, WePay, NetMeridian Software, SponsorNet New Media, Fieldlink, Quid Max Levchin the founder and CEO of Slide, which creates and distributes popular Web applications on Facebook, as desktop widgets, and elsewhere. He is also the chairman of local review site Yelp. Prior to Slide he was the co-founder and CTO of PayPal, which was sold to eBay for $1.5 billion in 2002. Learn more Person: Peter Thiel Website: Companies: Founders Fund, Geni, Powerset, Clarium Capital, Facebook, Bildaburg, Palantir Technologies, Asana, Confinity, Halcyon Molecular Peter is Clarium Capital’s President and the Chairman of the firm’s investment committee, which oversees the firm’s research, investment, and trading strategies. He is also a managing partner at The Founders Fund. Before starting Clarium, Peter served as Chairman and CEO of PayPal, an Internet company he co-founded in December 1998 and was acquired by eBay for $1.5 billion in October 2002. Prior to founding PayPal, Peter ran Thiel Capital Management , the predecessor to Clarium, which started... Learn more Person: Elon Musk Website: Companies: zip2, x.com, Tesla Motors, SolarCity, Space Exploration Technologies, PayPal, Halcyon Molecular Elon Musk (born 28 June 1971) is an entrepreneur and a co-founder of PayPal, Tesla Motors and Space Exploration Technologies. He is chairman/CEO of Tesla Motors and SpaceX, and chairman of SolarCity.Musk was born and grew up in South Africa, the son of a South African engineer and a Canadian-born mother who has worked as a New York City dietitian and modeled for fun. His father inspired his love of technology and Musk bought his first computer at age... Learn more Person: Paul Graham Website: paulgraham.com Companies: Y Combinator, Skepsu, 280 North, Evolving Paul Graham is a partner at Y Combinator. He is also the author of On Lisp (1993), ANSI Common Lisp (1995), and Hackers & Painters (2004). In 1995, he and Robert Morris started Viaweb, the first ASP, which in 1998 became Yahoo! Store. In 2002 he discovered a simple spam filtering algorithm that inspired the current generation of filters. Graham has a B.A. from Cornell. He earned an M.S. and a Ph.D. in Applied Sciences (specializing in computer... Learn more Person: Josh Felser Website: Companies: Spinner.com, Freestyle Capital, Crackle, Fox Inc, CrowdFlower, The Start Project Josh founded and sold two successful Internet businesses for a combined $400mm and is now making early stage investments through Freestyle Capital.Josh is a founding partner in Freestyle Capital, an early stage venture fund focused on the Internet and technology sectors. Mr. Felser was the CEO and co-founder of Crackle (formerly Grouper), an Internet video community, acquired by Sony for $65 million in 2006. Until February of 2001 he was General Manager of AOL Time Warner's music brands' Spinner,... Learn more : Website: Learn more Person: Douglas Leone Website: Companies: Sequoia Capital tera gold, Aruba Networks, Aster Data Systems, Cafepress, Meraki, RingCentral, Rackspace, inCode Wireless, SearchMe, Sentient Networks, SourgeForce, Telera, Birst, Hayneedle, MedExpress Urgent Care, ServiceNow, ZirMed, Color Labs Douglas Leone is a venture capitalist at Sequoia Capital focusing on internet, software and communication investments. Doug currently sits on the boards of Aruba Networks, Aster Data Systems, Alion, Birst, CafePress, Color, Hayneedle, MedExpress, Meraki, RingCentral, Service-Now and Zirmed.Doug's previous investments at Sequoia include Agitar Software and SourceForge Inc. Prior to joining Sequoia Capital in 1988, he held sales and sales management positions at Sun Microsystems, Hewlett-Packard and Prime Computer.Doug is a true powerhouse in the world of venture... Learn more Person: Aydin Senkut Website: Companies: Felicis Ventures, ImageShack, CrowdFlower, Aardvark, Webs, Dropcam Aydin Senkut is the Founder and President of Felicis Ventures. He's been an angel investor in promising start-ups since the end of 2005. His current portfolio emcompasses over 30 companies including Buzzlogic, Cake Financial, Dogster, Meraki Networks, Mint, Social.im Shopittome, Yapta, Yume Networks, Webs.com, Weebly and others. Prior to starting Felicis Ventures, he was a Senior Manager at Google, responsible for strategic partner development and account management in Japan and Asia Pacific. Learn more Person: Harjeet Taggar Website: harjtaggar.com Companies: Y Combinator Partner at Y Combinator. Previously founder of Auctomatic, a YC funded company acquired by Live Current Media. Learn more. Six Must-Watch On-Stage Videos From Disrupt | TechCrunch.