June 13, 2014

Guy Kawasaki: The Top 10 Mistakes of Entrepreneurs

The UC Berkeley Startup Competition (Bplan) proudly welcomed Guy Kawasaki to the Haas School of Business. Kawasaki, former chief evangelist of Apple and co-founder of Garage Technology Ventures, explained the top ten mistakes that entrepreneurs make. His talk covered all stages of a startup from inception to exit.

About Guy Kawasaki
Guy Kawasaki (born August 30, 1954) is the chief evangelist of Canva, an online graphic design tool. Formerly, he was an advisor to the Motorola business unit of Google and chief evangelist of Apple. He is also the author of APE, What the Plus!, Enchantment, and nine other books. Kawasaki has a BA from Stanford University and an MBA from UCLA as well as an honorary doctorate from Babson College.

Bibliography
  • APE: Author, Publisher, Entrepreneur—How to Publish a Book. Nononina Press, (Guy Kawasaki; Shawn Welch) ISBN 978-0-9885231-0-4
  • What the Plus! Google+ for the rest of us. (2012) (Only available on the Amazon Kindle, iBooks and on Google Play).
  • Enchantment: The Art of Changing Hearts, Minds, and Actions. Portfolio Penguin, London 2011, ISBN 1-59184-379-0.
  • Reality Check (2008) ISBN 1-59184-223-9
  • The Art of the Start (2004) ISBN 1-59184-056-2
  • Rules for Revolutionaries (2000) ISBN 0-88730-995-X
  • How to Drive Your Competition Crazy (1995) ISBN 0-7868-6124-X
  • Hindsights (1995) ISBN 0-446-67115-0
  • The Computer Curmudgeon (1993) ISBN 1-56830-013-1
  • Selling the Dream (1992) ISBN 0-88730-600-4
  • Database 101 (1991) ISBN 0-938151-52-5
  • The Macintosh Way (1990) ISBN 0-06-097338-2
Transcript
0:05 thank you all for coming tonight look at this crowd this is great 0:10 this is uh... of fantastic event 0:12 i'm really happy that 0:14 be introducing on my name is alex lower doses sala balter 0:17 where the co-chairs of the be planned competition 0:20 the u_c_ berkeley startup competition are really happy to present this event 0:24 today 0:25 uh... just a few things about the plan how we're doing 0:28 first of all this is our fifteen th anniversary of the plan here at u_c_ 0:32 berkeley 0:33 pretty good 0:38 and on it's it's going to be an exciting competition already there's we have 0:42 signed up some really recognize mentors and judges from silicon valley and uh... 0:47 this year there are over a hundred and sixty teens that entered 0:51 and we have already selected the thirteen nineteen children semifinals 0:56 subsequent prefab before we get to back for sake 1:00 uh... it's about where we stand with the competition uh... out of the hundreds 1:05 sick best sixty plus teams at the summit this year the thirty nine-a answered 1:09 they're not getting about ready so 1:10 then i start competing through the next few months and going to start a ready in 1:14 the process 1:15 and using some the techniques potentially a lot of the market today 1:18 worrisome wisdom from god 1:20 and uh... trying to get to the process of what is my idea mean and how to 1:24 actually bring it to prototype in april 1:27 sold really excited about some of the teams that come out of the process this 1:30 year 1:31 uh... will continue to learn from them and they'll continue learned from some 1:34 of the mentors that we have on board 1:36 so uh... wanted steel also quick give a quick round of applause for the lester 1:41 center and kirsten the for putting on this uh... about tonight's 1:49 summerside let's work as well as the beep lags active committee so if you do 1:53 have a chance to say hi put that out awesome as well 1:59 and last but not least the hard work of one of our own executive members antonia 2:03 selva he's been working uh... diligently very hard to 2:07 gay guy cathartic on campus and here we are 2:10 so uh... tonya come onstage want to give a quick instructional pass off 2:20 so presenting ngai ko psyches 'cause sometimes nonsensical for 2:25 that group of geeks like all of us 2:28 he's very well-known and he's also going to be a semi final judge for this year's 2:32 people and competition 2:34 guy was born in honolulu hawaii he has to be a from psychology from stanford 2:39 and an m_b_a_ from u_c_l_a_ 2:42 keys 2:43 the apple 2:45 in fabulous 2:47 since nineteen eighty four 2:49 uh... turned a decline in federalist marketing started with him 2:53 he's now an advisor for google in motorola so that's an interesting shift 2:57 if we have time for questions that it would be something else like to ask 3:01 but he hasn't he's a preferred profil aka writer as you can see here has 3:05 returned for more than a doesn't books 3:08 and he's going to talk to us about the top ten mistakes of enterpreneurs alike 3:12 to say thank you paco sake for coming here today 3:22 thank you very very much will 3:25 this room have 3:26 very good feelings about this room because 3:29 my son is a freshman here at cal 3:32 and uh... 3:33 half-filled 3:37 this is the ruling where 3:39 drink out they wind up that 3:42 pitch 3:43 for cal of for hosp 3:45 and so i have a very warm feeling about this uh... place and i went to stanford 3:50 but i 3:52 how focus in allentown 3:56 genesis in that 3:58 so 3:59 if any of you start companies and you need an intern 4:03 my son is available 4:04 but and if you combine the number of followers that my son and i have on 4:10 social media it's five million 4:12 now 4:21 sloan yes they are very happy to be here and uh... it's going to be a lot of fun 4:26 uh... 4:28 i'm going to present 4:30 something about the top ten mistakes of entrepreneurs and let me give you a 4:34 little bit more about my background 4:36 i work for apple from nineteen eighty three to nineteen eighty seven i was 4:40 apple software eve angeles owes my job to convince people write mac software 4:45 has meant that i worked uh... in the macintosh division which meant that i 4:48 work for steve jobs huto which meant that 4:53 let's just say i had a very interesting career uh... 4:56 he was not an easy person to work for but he definitely got the best results a 5:00 lot of people 5:02 and so i learned a lot from him uh... back then 5:06 the macintosh division was probably largest collection illegal maniacs in 5:09 the history of california 5:12 we held a record until last year when face book broke it but we held it for 5:16 yeah good thirty years 5:20 allowed to show you what bad people we were uh... back in the company was the 5:25 apple division in the map division the apple division was shipping 5:28 you know the loads of happens tombs 5:31 making tons of money 5:32 mcintosh a vision was still in r_d_ so we were you're burning monies if you 5:36 look at the apple pml looked he was apple to any l was macintosh 5:41 and uh... yet we would not let people into the 5:45 macintosh division buildings and you can imagine 5:48 if you ever become c_e_o_ than ever let this happen where 5:51 one part of your company cannot go into the other part of the company of that is 5:55 not good for morale and especially after the applicant people figured out that 6:00 they were paying for the building they weren't being led into 6:04 as you can imagine a religious them off a husband quite logically so 6:08 so they came up with a great joke i love to tell this to a great job of autumn 6:11 about the mac division which is how many macintosh division imposes take the 6:14 screw delightful 6:16 vance's one beat macintosh division of wells holds a polite baldwin expects the 6:19 universe to revolve around him 6:23 as a microsoft version of this joke 6:25 and the microsoft version is how many microsoft imposes a take this colonel 6:29 ipo 6:30 and the answer is 6:31 none because bill gates is the care darkness the new standard 6:38 year year early in your career spanned connelly in my career 6:42 well i started in technology about nineteen eighty three 6:46 and so for about twenty five or thirty years i watched high-tech speakers 6:52 and i'll tell you have with the reception of steve jobs 6:55 uh... most high-tech speakers 7:00 to salient qualities first they suck speakers 7:04 and the second qualities they go along and that is a really 7:08 ironic and dangers combination 7:10 because 7:11 if you sucking your speeches short it's okay 7:15 and if your speeches lol 7:17 and your great it's ok but if you've sucked into law 7:21 mostly b stupid n erica in oceans 7:23 uh... be good combination 7:26 and so what i did in early markers i embrace the top ten formats i always use 7:31 the top ten format for my speeches 7:33 uh... but i have to tell you it's uh... this is a speech i have never given 7:37 before 7:39 and so are just realized that aphrodite the put numbers 7:43 of my top ten points 7:45 so uh... but there are ten points tonight 7:47 and the reason why use the top ten format is that the case you think i saw 7:51 you know approximately how much longer outside 7:56 ten points or yourself 7:58 uh... with no further ado if you let me 'em 8:00 talk about the mistakes of entrepreneurs 8:03 been an entrepreneur 8:05 i have worked for fortune five hundred company like apple 8:08 i have been a picture capitalists are funded accompanies 8:11 i've been advisor for many startups 8:15 so i sort of cement from all sides of the investor the entrepreneur the 8:19 advisor 8:21 and uh... so this is three of you what ive 8:24 after twenty five or thirty years of working uh... in technology okay 8:32 let's just say that i'm not known for 8:34 subtlety 8:35 so we're just gonna cut to the chase okay 8:38 uh... cassie you should hear it straight from 8:42 straight from the bottom line actually self 8:45 number one mistake is many entrepreneurs make the mistake of 8:49 taking a large market 8:51 and multiplying it by one percent and saying 8:54 how hard could that be conservatively speaking 8:57 will just walk through a hypothetical case 9:01 three hundred million americans 9:03 one-in-four owns a dog seventy five million dollars 9:06 each dog eats two cans of dog food per day 9:09 that's a hundred and fifty million cans of dog food per day 9:12 how hard could it be to get a mere one-percent of a hundred and fifty 9:16 million cans of dog food total adjustable market 9:19 that's the one and a half million cans of dog food per day let's say you make 9:23 two dollars per can 9:26 acts three million dollars a day 9:29 and now 9:31 you know dogs this is not like enterprise software 9:34 dogs e_t_ everyday they don't take saturday and sunday off 9:38 so this is three hundred sixty five days a year 9:41 we can't we could 9:43 worst-case make three million dollars update 9:47 so conservatively speaking worst-case with our rockstar programmers 9:52 we should do a billion dollars in the first year 9:55 i can tell you how many stories i've heard like that 9:58 you take a large market 10:00 you multiply by a small number then you say how hard could that be 10:06 soldiers to fundamental flaws with this first 10:11 getting one percent 10:13 of any market is not that easy 10:16 number one 10:17 and number two 10:18 which sort of contradicts number one 10:20 number two is no investor wants to hear that you all we are going to get one 10:25 percent 10:26 so in one sense you say one person is easy but investors also hearing that 10:31 their predicting bakit only get one percent of this market 10:35 so you're between stand between 10:37 sold dealt use this kind of logic 10:40 uh... dole take this large 10:43 three hundred million times point to five 10:46 you know equals one fifty unequal seventy five times to legals one fifty 10:51 times a one-percent eagles one-and-a-half million it just doesn't 10:54 work like that 10:56 that's life 10:57 the mistake number one 10:59 mistake number two 11:01 sort of the flip side of this which is 11:03 you scale too soon 11:05 so this is how this goes 11:07 so we go through the one-percent right 11:09 so conservatively speaking you should be selling 11:11 a million and a half cans of dog food per day 11:14 worst-case 11:16 so now you think all my god 11:19 yugo we're gonna need 11:20 at least 11:21 three facilities to ship 11:24 and we're going to need 11:26 co location because our service can never go down to as these millions of 11:30 dollars come to our site and order did housing kent's 11:36 and so we need order processing we need for 11:38 stalemate we need customer service 11:41 so let's start with wrapping up because our rockstar programmers who have never 11:45 delivered a piece of software no lives we are going to be on time 11:49 okay 11:51 and with our rockstar marketing people in our rock star 11:55 you know b_m_w_ cornflower blue 11:58 tears ear 11:59 business development vice president he's going to deliver all the partnerships 12:03 so we need to ramp up 12:06 we need separate several locations we need cold location of servers 12:10 week customer service people 12:12 and so what happens in the real world is of course your rockstar programmers 12:17 turned out to be 12:18 total bozos right 12:20 and so your software is late your website is late 12:24 and the dogs no pun intended are not feeding the food is it just happens that 12:29 not that many people one of my dog food online 12:32 so your soft or as late 12:35 people are not buying your product but you've already ramped up you have 12:39 several facilities you have all this automation built in your customer 12:43 service yet people you know in banglore just waiting to take those calls of 12:47 people need tech support for opening cans of dog right 12:51 so then what happens 12:53 so then what you do is 12:54 you have a board meeting in you you tell the investors as well 12:59 we were wrong 13:00 palmar programmers have 13:02 hit some limits using visual basic that they didn't foresee 13:06 himself 13:07 so now we're now we really got it right now we're going to go to 13:10 python or we're gonna go to p_h_p_ or 13:13 me who will go to mysql but their visual basic just didn't work out 13:17 okay so investors are used to hearing this that you know mister first 13:22 your first marks of course the understand 13:25 and but then you see but you know what 13:27 we've made a really great good recruiting 13:29 so we have these 13:30 great ita staff with his great support staff with this great fulfilment staffed 13:36 and those people are rock stars 13:38 and so 13:39 we know that our rock star team of programmers is going to be a few months 13:43 late 13:44 but it would be a crying shame 13:46 there we recruited all these great other support people 13:50 to let them gold nile because in three months we're gonna have to hire new 13:54 people again and bring them into the company train them again 13:57 where so much invested in these great rockstar people 14:00 that we should let them go 14:03 and so what you do 14:04 is you keep those people on board 14:06 right because now you know you know shipping three months 14:10 guess what 14:11 three months come by and you don't ship again 14:14 and now you have to go back to your board enya explain again well we're not 14:18 shifting but we still have these great people we've invested we need to keep 14:21 them because we will just have to hire people like them again and start from 14:24 scratch 14:27 that's what happens scaling to survive high in my career 14:31 i have never seen a company 14:35 donny 14:36 because it did in scale fast enough 14:39 for once in my life god help me i would love to have a problem where 14:43 i advise or invest in a company 14:45 it could end scale fast enough 14:49 that would be as we say 14:50 a hike 14:51 quality problem 14:53 dear god gave me this problem once in my career 14:56 the company's growing to fast too many orders are coming in for dog food they 15:01 cannot handle the volume please god give me that problem 15:06 i know how to solve that problem 15:09 usually what happens is the scale to fasten anticipation of a conservative 15:13 one percent 15:14 with the programs created by your rockstar engineering staff 15:18 it doesn't come true 15:19 you're stuck with big overhead and you run out of money 15:24 that's mistake number to be 15:26 mistake number three 15:28 an obsession with partnering 15:32 let me tell you something parker in is bullshit 15:36 partnering is bullshit is only one thing that counts 15:39 in a startup 15:40 it's sales 15:42 partner is bullshit partnering means 15:44 two organizations 15:46 try to compensate for their weaknesses by partnering with another 15:50 two plus two equal furry in this case 15:54 partnerships mean nothing 15:58 just just don't get me started on this just 16:01 you know other what what what 16:02 what entrepreneurship focus on 16:05 is saying yes 16:07 sales 16:08 fixes everything 16:09 you want to be left alone by investors 16:12 meet your numbers 16:13 it's as simple as that nobody cares about partnering 16:17 partnering is total 16:18 bullshit 16:19 you only use that word whenever you don't have sales 16:24 partnering is bullshit 16:30 number four 16:32 uh... i think a lot of entrepreneurs are focusing on the pitching process how do 16:37 we pitch to raise money 16:39 how do we win business plan contests 16:42 how do we 16:43 perfect our power point skills 16:46 and i'll tell you something 16:48 list that i can help you in a business plan ka bas i can help you perfect your 16:51 pitch 16:52 no question 16:54 in the real world 16:56 the key is not the pitch 16:58 the key is the proto type 17:01 it's if someone gave me a choice of having a team come in with a great power 17:05 point pitch 17:06 or come in 17:07 with the proto type that is working i would pick the working prototype all 17:12 vague 17:13 because in a few hours i can help most of you fix your pitch 17:18 i cannot in a few hours helped anybody fix their prototype 17:21 prototyping is the key 17:24 in a perfect world in this pc world it's change completely now in the used to be 17:29 that you tried to raise money 17:32 because you have to 17:33 build the team 17:34 to write software you needed a year he needed two million dollars you need 17:38 something like that right 17:40 but now if you think about all the things you need for a text are up 17:44 they're free or cheap let's go down through the list 17:47 you need 17:49 infrastructure 17:51 infrastructure today's free or cheap you use rackspace 17:54 you use amazon web services 17:56 you don't buy any servers anymore you don't buy buildings you know lease 17:59 buildings 18:00 use amazon use rackspace 18:03 thousand bucks to get terrified in the sky 18:06 marketing before you have to throw parties yet the higher p_r_ firms have 18:10 to do all this kinda stuff now 18:12 you have to interests yes twitter if 18:14 face book 18:15 you've google plots 18:17 you've linked cnf all the social media the marketing is free 18:21 before you have to have commercial real estate you have to have a team 18:24 physically in one place 18:26 naal many teams are virtual 18:28 you don't need as much commercial real estate 18:30 before you have to buy a license for as sql from oracle now everything is open 18:36 source so do you go down this list 18:38 everything is kind of free or cheap 18:41 and so this is a completely different world and in this world you are expected 18:46 to show up with the proto type 18:49 not just the pitch a prototype because 18:52 with twenty five or fifty thousand dollars which is you know money that you 18:56 should be able to get from your parents from your credit cards 19:00 shaking down people you know 19:02 you should show up with the pro types completely different expectations and it 19:05 works to your advantage because when you show up with the prototype you have 19:10 significantly reduced one risk which is that you can actually deliver a product 19:16 before with power point 19:17 you had a much lower valuation because the carport is total bullshit you making 19:21 stuff up a park or right folks 19:24 the cabin like to so many times you could not possibly tell me alive and i 19:27 have not heard 19:29 looked the part wanted to find the money laudable ship right 19:32 but the prototype is not bullshit analyst your the person you showing that 19:36 is so stupid that doesn't understand that using mockups but then the person 19:40 is that still but are you wouldn't want their purses money because a person is 19:43 too stupid you don't want stupid money 19:48 prototype 19:49 prototype not pitch okay 19:52 next life 19:54 next lies 19:55 if you are going to ph 19:58 that accident not mix the state 20:00 this is called the guy kawasaki ten twenty thirty room par point i hope 20:04 that you will trust me on this 20:07 the optimal number sliding apart when presentation is ten 20:11 you'd be lucky to get ten parts across 20:14 ten cogent points across okay 20:17 the the 20:19 time you should be able to give those ten slides in his twenty minutes 20:23 ste ten twenty thirty rule 20:25 now you may ask well why would you limit yourself to twenty minutes when you have 20:29 a one hour meeting 20:32 probably not in this audience but in most audiences roughly ninety five 20:35 percent of the world is still using windows 20:38 missile that ninety five percent of world they need forty minutes to make 20:41 their laptop work with the projector 20:43 now 20:45 so if the whole world if the whole world was using mcintosh the rule would be 20:50 ten minutes sixty thirty 20:53 it's not true so it's ten slides 20:56 twenty minutes 20:57 and then the ideal font sizes thirty points or larger 21:02 if you use eight ten or twelve 21:05 you're going to be tempted to put too much text 21:07 then you can read the text 21:08 and one slide into the presentation your audience of figure out 21:12 this bozo is reading his lights to bismol those reading verbatim 21:17 i can read finally to myself acid in this bozell can read them to me 21:22 algis read ahead 21:25 so 21:27 if you have heard nothing else in this presentation than 21:30 in the business plan contexts 21:32 ten slides 21:35 you know to be they even have twenty minutes 21:37 that even have ten slides 21:39 even better 21:41 in the real world 21:42 ten slides 21:43 twenty minutes 21:44 thirty point font a good rule of thumb for the font sizes 21:47 figure out who the oldest person is in the audience the by his or her age by 21:50 two 21:52 sixty-year-old bc divide by two thirty fifty-year-old bc divide by two 21:59 sunday may be pitching a sixty-year-old bc that day god bless you use the eight 22:03 point five d 22:05 but until that day 22:08 ten slides twenty minutes thirty points on 22:11 next life 22:13 the nexus take of our entrepreneurs is they believe that they should do things 22:18 serially 22:19 which is to do things one at a time 22:21 first you raise money 22:24 when you build a team 22:26 then you write the software 22:28 then you should 22:29 then you collect 22:31 okay that's a serial world 22:33 the serial world in entrepreneurship does not exists 22:38 unfair as it may seem 22:40 if you are not japan or 22:41 you are going to have to be 22:43 raising money 22:45 writing software 22:47 prototyping 22:49 selling 22:50 recruiting and collecting money all at the same time 22:54 all these past moving down 22:56 the road at the same time it is not the serial processed it is a parallel 23:01 process 23:02 you need to understand that's how the world works 23:06 bps all about moving multiple things down the road 23:09 in a perfect world i grant you you would be nice if 23:12 all you could do was focused on money 23:15 and that all you have to do is focus on hiring and then all you have to do is 23:19 focus on programming and that all you have to do is focus on selling and all 23:23 you have to do is focus on collecting that is not the real world the real 23:27 world is to have to do all that and what's 23:32 next mistake 23:34 many many 23:35 entrepreneurs believed that as long as they and their bodies own fifty one 23:39 percent of the company they are in control of the company 23:43 because they believe 23:45 in board meetings things come down to a vote 23:49 fifty-one percent wins i have never seen anything come down to a vote in a board 23:55 meeting 23:57 it's either 23:58 everybody wants to do it or nobody wants to do it 24:01 and the fact that you retain fifty one percent of the company may make you feel 24:05 better 24:06 and make you think you are in control of the company 24:09 but the truth is that the moment to take outside money 24:13 you have lost control of the company 24:16 it never comes down 24:18 to devote 24:19 fifty one to forty nine 24:21 this is not the u_s_ senate 24:25 god help us there's no such thing as a filibuster 24:28 yeah 24:29 in a venture capital board be but 24:32 the this is a delusion the moment you take outside money 24:36 you know moral 24:37 ethical and financial obligation to the outside money 24:41 if you cannot deal with that 24:44 outside money 24:46 fifty-one percent is an illusion of control 24:50 the next thing 24:52 that you believe that patents equals defense ability 24:56 the ideal number of times you should use the keyword in your presentation 25:02 we have filed 25:03 patents 25:07 if you say it twice 25:08 we have file path instantly is going to create 25:11 a defensible position for us 25:15 that's too 25:17 you're wrong 25:18 happens 25:19 realistically 25:21 will not help you 25:23 if you are acquired some day 25:26 yes the acquiring company will love that you have patents 25:30 that's a good reason to do it 25:31 another probably the most 25:34 compelling reason to file for patents as a startup 25:37 it will make your parents problem 25:41 that they can say that my daughter or my son has a packed into to her name 25:47 to his name 25:48 that is worth something 25:50 but if you believe 25:51 that you tapped into something and that's going to make you defensible 25:56 you're deluding yourself 25:57 because it takes about five or six years of 25:59 file this pattern and get it done 26:02 and then let's suppose you do this you finally did get it done 26:05 and let's say 26:07 microsoft steps all over your pat 26:10 so now you have to ask yourself 26:11 do you have the time 26:13 and the money 26:14 to how litigate microsoft 26:17 years ago that is no you don't 26:20 you never will now 26:21 every once in awhile you here to this great story did some 26:25 file compression utility company in calabasas california has won a sixty 26:29 million dollar suit against microsoft will pay you will hear that 26:33 but you know what 26:35 getting into 26:35 fringed ensuing microsoft successfully is not be fun double business model 26:42 and the reason why there's headlines when microsoft loses a lawsuit like that 26:47 is because it hardly ever 26:49 happens 26:50 if it happened everyday 26:52 it would not be used 26:54 and then they never follow up that story to see if the thing was appealed 27:00 the little company in calabasas california ever really collected the 27:03 sixty million dollars okay 27:05 file the path of god bless you 27:09 dole king 27:11 it makes you defensible at first sure for sure 27:14 dole tell the sophisticated investor 27:17 that the reason why 27:19 we all are 27:20 the festival 27:21 is because we filed a packet 27:24 because the surface in fact that's a very good test 27:27 if when you say that 27:30 the investor last and rolls his or her eyes 27:34 that's a smart investor 27:36 if the invest this is you have that's true 27:38 what part of that group 27:41 that person is immediate 27:44 happens to not there's no patent lawyers in here 27:47 bob now i would say the exception to that is probably a biotech where you can 27:51 tap into the drug okay but 27:54 if you believe that you can tap into the method 27:56 to sell dog food online 27:59 using crowd source rss 28:01 for roles 28:04 less just saying that you know i wish i could short privately held companies 28:10 next mistake is too high a renew our own image 28:15 you know uh... if you were an engineering person you need to balance 28:19 off 28:20 for balance out 28:21 york engineering problems 28:23 so an engineering person should hire a salesperson a sales person should hire 28:28 an engineering person 28:30 many times companies like to all higher 28:32 the same kind of people 28:35 and when that happens 28:36 you'll have 28:37 blaring weaknesses you're totally engineering 28:41 totally sales 28:42 order totally biz dev 28:44 you need to hire people who compliment your skills 28:47 fundamentally 28:49 what you need in the start-up is you need someone to 28:51 make it 28:52 you need someone to sell it and you need someone to collect it you need those 28:56 three people 28:59 i didn't mentioned is that i didn't mention anything else and saying 29:02 make it so it can collect it that's what you the 29:06 and so 29:07 the danger is that 29:10 you know if you're a sales and marketing oriented guy you hire sales and 29:13 marketing or indeed people but you really need to balance off all the 29:17 talents in the company 29:19 so remember remake it's only been collected 29:21 uni all three skills 29:23 the next mistake 29:25 befriending your venture capitalists 29:29 the way this works is 29:31 you get funded by a v_c_ 29:35 today that they say yes or the day the check clears 29:41 while 29:42 you know i heard vcs are assholes but not this one 29:46 this one 29:48 understands what we're doing 29:50 this one really likes us 29:53 this once said that 29:55 he's never seen a team is good as always 29:58 and this one said that 29:59 he's gonna stick with us 30:01 and this one said that 30:02 his first conference in our ability 30:06 having hired all these visual basic programmers 30:08 the basically he's gonna leave us alone 30:11 you know we're not one of his problem portfolio companies 30:14 were one of the most promising ones 30:16 and you know what he also said that 30:19 there are investing technologies they're investing markets 30:22 the investing 30:23 people 30:24 v 30:25 they invest in people and they invested in aus 30:28 so no matter how much we screw up 30:30 because the invested in people 30:33 deacon alike cuts 30:34 they're going to give us more chances to get us through dead right because in 30:38 this city us 30:39 not the prototype we showed 30:41 but the market 30:42 forecast we showed none of that 30:44 people 30:45 there are best 30:46 friends they said that they will always be available call than anytime pick up 30:50 the phone 30:51 still even come in and roll up their sleeves and work with us 30:55 because they're investing in people they're my friends i mean i i think i'll 30:59 take up golf and circling golf with them 31:03 let me tell you something 31:04 nice shirt up there i liked that shirt now 31:10 bcs 31:11 and investors are not to your friends 31:14 i'm not saying you should hate them 31:17 but i am saying that 31:18 it is a business they are in the business 31:22 of making money 31:25 there are not in the business of making friends 31:28 angel investors maybe 31:30 the venture capital are not in the business of making friends 31:33 they would rather heat you as a seal 31:37 but see you go public and media reach 31:41 dole believed that their her friends don't try to become 31:45 their friend 31:46 make your forecasts 31:48 cake that's all that they really 31:51 care about 31:52 and and i've seen time and time again where 31:55 the seal really believes sudhir here here's 32:00 what happened so 32:02 you raise money 32:04 you mister for ship date 32:06 the border millisecond ship 32:08 mister first 32:09 ship date because everybody does that everybody does that 32:13 you know they invested in youth so they still support you 32:16 you mister second date 32:18 and now they say well you know 32:21 you really have to be careful we're gonna give you another five million 32:23 bucks but now email where they were really gonna hold you accountable 32:28 then you have one more meeting 32:31 and 32:32 to your are surprised 32:34 they're saying we want you to step aside 32:37 and you say but last month he said you're going to stick with us because 32:40 you still believe in us 32:42 what happened in the last thirty days 32:45 and the d_c_ will say well you know every monday i was going to our partner 32:49 meeting in every monday i was telling them all the the slept but they look 32:53 really promising the of rock stars you know they 32:55 one percent of all these dogs eating food you know how hard can that be 33:00 so i would after telling the story monday after monday after monday and 33:04 then finally 33:05 we had this partner all site 33:07 and i just got tired of teeth 33:10 sending you guys 33:11 and i just you know it's not worth my bandwidth because mike time in my mental 33:16 faculties 33:17 are so important 33:19 so we're gonna take 33:20 use a loser company in our portfolio olympic is other loser company in our 33:25 portfolio 33:26 we're gonna sell your ass is to be other music company 33:29 willing to declare victory that you were a art 33:34 so everybody's happy 33:36 so if you have to step aside you are now gone 33:38 and then the steel goes home in a state of shock uses 33:42 frickin bc 33:43 last month the lonely this month they don't loneliness throwing me out i don't 33:47 understand what happened 33:50 will see if they want their standard taken to a vote there are a in the 33:57 had yet i'm not going to to think of for the painter okay but 34:01 ike just ike told 34:02 don't try to be friend your bc 34:07 the key to managing of ec or any investor is to just 34:12 projections 34:16 meet your projections 34:18 my advice to you 34:20 is that the set projections 34:23 that you are 34:24 in the percent confident you'll make 34:27 eighty percent that's the minimum competency issue have eighty percent 34:33 god bless you if you do hundred-percent you'll make history because you're the 34:36 first person to make your forecast 34:39 to do a hundred twenty percent you're gone 34:42 goddess not to be sexist 34:46 do you need to 34:47 under promising over dinner 34:50 on their promise an order 34:53 now you might ask what what happens if 34:55 are realistic projection 34:57 doesn't make the company interesting enough 35:00 to get funded 35:01 like what's the 35:02 bombing and 35:03 and that is a real problem and i will tell you that 35:07 you know bridger capro is not for everybody 35:11 that venture capital was playing a game every venture capital of the fund the 35:14 nex 35:17 so lots of companies are just thrown out of that but there's no way that 35:21 a new chain of restaurants is likely to be the next google 35:25 it could be the next mcdonald's don't get me wrong but the likelihood is very 35:28 low 35:29 it's unlikely that a 35:30 consulting practice is the next google or that a web design company is the next 35:34 google the somethings they're just not applicable for venture capital is only 35:38 several thousand deals happen for a venture capital per year of the millions 35:42 of companies that sparked so don't set yourself up for failure 35:46 they're looking for the next google 35:48 they will settle for a hundred million dollar exit but they want to the next 35:51 google bats to game you've decided to play 35:55 self don't be afraid your bc 35:59 and in the last one is 36:04 assume 36:05 that vcs truly can add value 36:10 at any given moment easy sees on five to ten boards of directors 36:15 they 36:16 are also looking at companies everyday they are very very busy people 36:22 they are 36:25 their prachi 36:27 indeed judy 36:29 this certainly eagle center 36:32 it's very difficult for mostly seized two separate 36:35 causation 36:36 and correlation 36:38 you know they invested in a certain company and it did so well 36:42 that it must have been 36:44 who made that company succeed 36:46 be interesting to ask the c_e_o_ what his or her version of that success 36:50 stories 36:51 so 36:53 you know of ec 36:55 can pick up the for and introduce to you 36:58 can send an email to introduce you can help you recruit 37:02 but you should at think that they're going to do a lot of 37:05 heavy lifting 37:07 fundamentally what you want from a v_c_ is 37:10 money 37:11 and you want 37:15 two or three hours amman of their bandwidth 37:18 that's about it 37:19 should be happy with that if you get that you're doing well 37:23 the irony is that 37:24 the more successful you are the more bandwidth you'll get 37:28 which is kind of unfortunate because 37:30 the less successful the more you might have needed the help 37:35 you know what happens with these days is 37:37 the venture capital gain 37:39 is a game of hindsight 37:41 so what you do is you invest in twenty companies 37:45 wanted to become successful 37:47 you made it to make a successful let's just say it's a moderate success 37:51 and so bomb 37:53 you you have invested in twenty companies let's say one is successful 37:59 so people ask you about the one company newsday 38:02 i knew though it's a good team 38:05 i knew there was a rock stars 38:08 i know they were in a 38:09 great market 38:11 millions of dogs 38:13 more dogs coming over every day 38:16 i knew this was a good business model 38:19 there were going to 38:21 dissenter mediate this very inefficient way of getting 38:24 did cows 38:26 into cancer to do all strike 38:28 why was there a pet food store in the middle 38:30 so stupid the pet food stores grab in twenty five percent margin 38:34 what bury the dead pet food store at the end of getting your car 38:38 drive to the proposed org 38:40 find a parking space going to the press would store and then a lot 38:44 it's dead housing plans did you do any point of purchase announces did you do 38:48 any 38:48 taste has no they had no value 38:51 so what's alarming is that of course 38:54 there had to be a better way to buy did comes in cairns 38:58 so i knew that 38:59 i knew the team was rock stars and a great business model i knew there was a 39:03 great market 39:04 so i invested in that company 39:07 then aspen bc so why what about 39:10 the web and that you invested in put four hundred million dollars did 39:13 so people could buy broccoli online why did you invest in web there 39:18 why why did you invest in web that and the bc will tell you 39:23 my partners did that deal 39:25 but hiked a volcano was a stupid idea 39:30 not nearly the potential of 39:31 selling 39:32 did housing hands 39:35 two seventy five million americans 39:37 who all dogs 39:40 so very retroactive business 39:42 i'm not saying that all he sees a like this i'm telling you 39:46 have realistic expectations of venture capital 39:50 uh... 39:51 it's a mistake that many many entrepreneurs me 39:54 and still believe it or not 39:56 that's eleven mistakes 39:58 that's 39:59 uh... 40:00 entrepreneurs make because 40:03 i believe in over delivering 40:06 sound 40:08 so uh... 40:09 with that 40:11 questions 40:25 as mike on call for any questions by the way on step up to the mikes because we 40:29 are having a baby reporting 40:30 so if you do have a good questions for a guy please so step on up 40:36 today as you have any impact that he had possibly not blue chip 40:39 and my question is we do not believe startup 40:43 nana starling set up in a moment when i hear your take on that 40:46 and and have you know you see more companies actually falling that pat yeah 40:51 and and uh... and they do you actually working with the company that that 40:54 visiting them up by innocence 40:56 uh... offers all my love the constable billy thorpe 41:00 my experience is that 41:01 too much money is worse than too little 41:04 because when you have too much money 41:06 you start thinking in very sloppy ways to start thinking we need to scale 41:11 you start thinking well they gave us five million dollars they didn't give it 41:15 to listed 41:16 collect one percentages as the cd they gave it to us to invest 41:20 so we can invest 41:22 we need to invest in 41:23 thousand-dollar herman miller chair so that our rock star customer service 41:27 people 41:28 have comfortable 41:29 seating arrangements 41:31 and so 41:32 and and 41:33 you know we have to have a we have to have a role all-party because 41:37 we need to make a statement 41:39 and so 41:40 if you didn't have money you would not have such stupid conversations okay 41:45 soul 41:46 up too much money is worse than too little when you have to middle 41:49 you really have to think hard you have to do guerrilla things you have to you 41:54 if the host 41:55 your website 41:56 rhonda u_c_-berkeley our server and not tell anybody here may need to do stuff 42:01 like that 42:02 that's just the way it is uh... 42:06 you know don't feel bad you can always in dollar chair later 42:12 right now do what it takes 42:14 so uh... art i hardly endorse that i've been out there and i went through my 42:18 dialogue of 42:19 marketing is free 42:21 tools are open source 42:23 virtual teams need only commercial real estate of morgan you know 42:27 i mean that's why why commentator so interesting for twenty five gretna can 42:30 do a lot of damage an arguably if you cannot do a lot of damage the 42:34 twenty-five rant 42:36 maybe you're not such a great entrepreneur 42:38 so if it you know if it takes you two million dollars today to get to a 42:41 prototype now of course we're not talking about tech without talking you 42:44 know if carmel all think about 42:48 a certain kind of start up 42:50 uh... that's a good tests that you need too much money so uh... i love the 42:54 concept of the startup 42:56 time yes i did 42:58 experiment you better 42:59 last year it's gonna burst out of house seats uh... residential incubator 43:03 they're really have speakers coming in 43:06 timber hands one of the guys was call alex ma'am 43:09 and he's doing a company called click time 43:12 and he owns the company with his brother and then they'll students in the calm 43:16 and consulting 43:17 uh... so they were able to 43:19 from delaware because ultimately i would go something on 43:23 and then uh... of course 43:25 disputes with his brother of a 43:26 there there were two other soaring for years 43:29 and so now 43:30 twelve thirteen years later and getting like to cost him these days 43:34 every week 43:36 wanting to understand 43:37 in his company ok they did tell this one story where and they were getting 43:44 competitor there was you see funded 43:46 and uh... 43:48 he he was like devastated by that this is a now double two campaigns and we 43:52 have completed by all this week the money 43:55 but being eighteen months that wasn't there one 43:58 he would get on your honor coming and i just have to shut down 44:01 so uh... use the number two position right now 44:05 and that you don't hear much of the stories and bed so there was a start-up 44:08 here here 44:09 how they're going to go 44:11 and there was a company called guidebook 44:14 and they didn't do you really need it 44:16 you need to embrace the ten twenty thirty room 44:19 but 44:26 for those doing the friggin transamerica tower this elevator i'm off the elevator 44:30 on high denying a temporary union square 44:35 pockets of continue 44:39 for now i'm alex distinguish opera grozny's tonight it's open twenty four 44:43 hours 44:46 says that's not his daughter in the nineties and again and 44:51 baghdad this battle a billiard reagon maverick twenty for use in their didn't 44:55 even to go to the reality and they have so much castano they have to double 44:59 their 45:00 their employees way and philip boroff his with out bc funding 45:03 but i can uh... title you must be stories then and studying 45:08 on translator for a question 45:11 democrats and 45:16 hopefully not in your contest cuz 45:20 practically right now is not getting past the semi-finals 45:23 but i don't care 45:25 uh... stands in a sharp standards 45:27 insist on 45:29 but my question is 45:30 the funeral 45:31 the stories where uh... convince grow organically and successful and 45:40 seasons 45:42 and 45:45 i'd like to 45:46 paying you for what you just didn't confuse you 45:50 everything i said tonight 45:54 fides you know i i i think 45:56 that the organic need the way it is the way to go 46:00 you you are 46:01 it's a harder way to go 46:03 it is you did 46:05 it when you do it that way you have to prototype because you need to sell right 46:08 you don't 46:09 you know you know just doing power points 46:12 slides you have to sell something nobody buys a powerpoint slide 46:16 so i think that is very good 46:19 you know art if you look at 46:23 if you look at something like microsoft for apple 46:27 you know their names start off with venture capital they started off with 46:32 two guys in the garage two gals in the garage 46:35 and they've built something that they wanted to use the dead organic revealing 46:39 going to raise millions of dollars into power point 46:43 and so i think a lot of these things that start organically 46:47 in really serves the needy 46:49 and it takes off in one day you're microsoft oracle 46:53 and unloved that story i i think 46:55 is sequestered co ever comes to speak to you like michael moore rates i think 46:58 he'll tell you that the richest main for supporting capital has been 47:04 to engineering students building the product is they want to use 47:09 which is very different then 47:12 into a group of people 47:15 slaw 47:16 uh... some kind of jupiter 47:18 for i_d_c_ or by the geopolitical use the or accenture 47:23 report about the market forecast the desired decided 47:27 that because the mckinsey report said at 47:30 the pet food business would be a five billion dollar business we should have a 47:34 pet food 47:34 online store 47:36 so i love the organic pat 47:43 play on the charlie chan 47:44 discussion plaza stalker 47:47 i want for was between ashland and 47:49 there's talk of prep starting a nonprofit 47:52 company too 47:53 you educates you know 47:55 the youth in richmond st units in eighty people want 47:58 college of education 48:00 and youth education spoiler 48:03 wbc and it's could be a non-profit wouldn't be selling anything 48:07 on soviet which of the regulations 48:09 you know how we did 48:10 would it be people covers that would be engine funding that to respect that 48:17 uh... venture capitalists 48:20 or e even angel investors 48:22 i would say you know they are trying to increase their financial returns as 48:28 opposed to do good 48:30 if they do good it may be by accident 48:33 uh... 48:34 it may be a natural outcome i mean if you build the most successful solar 48:38 panel company in the history of mankind 48:41 you are but we do good you reduce the carbon footprint of homes 48:45 they did it 48:46 because they want to sell a boatload of solar panels right 48:50 so 48:51 rxpop 48:52 if i understand your question correctly 48:55 it is not going to be very successful for you to go to professional venture 48:59 capitalists to try to raise money for a not for profit 49:02 if that's what you're asking 49:04 the way he should do that is 49:06 what you want is you wanna rich people who have made money 49:09 through various means 49:11 give you the money for philanthropic reasons but it's not an investment 49:17 this is a very different 49:18 yet yet yes my questions 49:21 you actually look at the state bank 49:24 one for one uh... 49:27 i'm playing a trend you know if you ask another fifteen minute question on 49:30 whether chachi doubtful 49:33 we actually had a twenty minute prisons are so it's a good hahahahahaha 49:37 one about my name is america armed compound in on into their size solar for 49:42 hospitals are this update 49:44 and i want to see what the increase rise of a different story programs uh... also 49:48 with those not given in the up-front investment what is your take on them 49:52 also with uh... them disrupting the p_c_ world 49:56 uh... i thought it might take on 49:58 the incubators on the rise of the debate index over programs and also your 50:01 thoughts on them this little cases so hahaha i have 50:07 have really have mixed emotions about those because and alarmed by the end of 50:11 his hitting them i love the energy i love the 50:14 missile banding together they were all missile of the sort of 50:18 shared stays 50:21 holding together for warmth 50:24 sharing expertise sharing xerox machines 50:27 but she really 50:29 trixie the front desk receptionist 50:32 asshole 50:35 i love 50:38 coleman 50:39 itself 50:40 so i'm not in that aspect 50:43 having said that 50:46 i think that 50:49 just because you have free space 50:52 and you have shared resources 50:54 that doesn't necessarily make you more successful 51:00 to meet you know the most important thing 51:03 is the prototype 51:05 and defeat 51:06 advances your prototype 51:09 then i would be all for it 51:12 hanging around other people in shared space 51:15 is fun 51:16 ping pong table all the good stuff 51:18 but that doesn't necessarily 51:20 increases the chances of your success 51:23 so the key is inspect keep coming back to that 51:27 it's the proto type and build a freaking good prototyping 51:32 market 51:33 which is one of the beauties of not having a lot of money 51:35 because if you don't have a lot of money you cannot decarava 51:39 making a lot of crappy prototypes you have to get it right 51:43 which is a good outcome of 51:45 not having money 51:47 uh... you also mentioned that about bcs 51:51 or bilkul perception prosper you were standing at pcs can add them to the 51:54 company's yes in most instances these accelerating to get a programs don't 51:59 give you as much money but may have different value adds so at what point 52:03 does non-financial 52:05 kind of overtake 52:08 large investments bomb at what point does non-financial overtake larger 52:12 investments from 52:16 wow that's that is so much of a case by case basis uh... 52:20 you know i i i hated 52:21 not that i have 52:22 hesitated to generalize tonight 52:26 itself 52:28 house how do i do not answer that question i mean you know you 52:31 summer-like all grandma why commentator 52:33 you know he may just in a five minute conversation 52:36 we had so much value to your company that fundamentally changes your company 52:40 whereas you could be in another incubator where you know the blindly the 52:43 dumb 52:44 and 52:47 just hanging around there for years you won't gain anything so it really 52:51 it's 52:53 it's it's kind of just a crapshoot uh... 52:57 you know again i mean 53:00 just keeps coming back get a prototype and put it out there 'cause either of 53:04 the dogs needed or they don't minutes 53:07 that's the key 53:08 i think you did 53:09 tactic that yes 53:13 prime minister only in the fourth time in their students began you mentioned 53:17 before that wanted to every portfolios twenty company asked 53:21 actually succeed at 53:23 alleging that there's a need to do is is it easy can have a 53:27 if there are a bit really make those stand out 53:30 the colombians is there any resistance to infection of first of all you know in 53:33 a rare moment of humility let me say i'm not exactly proven as of the sea 53:37 because i haven't so you could take everything i say 53:40 situated right or wrong 53:41 so you know you could make the case do everything opposite of what i just say 53:44 that you may be successful 53:50 i think when most people look back on their successes 53:55 they will say 53:57 they quote knew that it was a good team 54:01 problem is 54:06 you really have to ask what if you knew 54:08 that one was a good team and that's why you invested in it 54:12 why did you invest in the nineteen other losers 54:15 because at the time you squeeze the trigger 54:18 you new 54:19 no they were good to unless you are purposely investing in new business 54:23 right so it's not rational soap 54:25 at the time you squeeze the trigger 54:28 all twenty you thought they were winners otherwise you wouldn't squeezed the 54:31 trigger so why is it that one succeeded in nineteen phil 54:36 and it's not as easy as saying well anew that he would succeed because what about 54:40 the other ninety 54:41 so i 54:45 as i get older and older i've come to believe that it's better to be lucky 54:48 vince marks 54:50 so 54:52 you know 'cause 54:53 unit just a matter of a vcs perspective 54:56 these are some of the pitching pitches you would have hurt right so 55:01 repeats these students at stanford 55:03 and we miss computer science class or work in this new search engine at 55:06 measures you know in bombings 55:09 at that point or five search engines did the world news six search engine called 55:12 google 55:13 uh... maybe not 55:15 or my buddy and i we want to have a business model where we need 55:19 internet server space in the sky 55:21 with infinite bandwidth 55:23 so people can optimal their videos that they stole 55:27 and know what's going to make our company tip 55:30 is when people start dropping mentos into diet cokes 55:35 are okay 55:38 raise your hand more investing you too 55:41 gate none of you right 55:43 okay so 55:44 uh... we're going to enable people to send a hundred and forty character text 55:47 messages 55:49 well what a concept have you heard of 55:52 have you heard of 55:53 email have you heard of text messages 55:56 would you want to send tweaks 55:58 and what your business model 56:01 i went on well but you know lots of people 56:05 lots of people want to tell everybody on the internet that their camp rolled over 56:09 notice 56:10 one percent of the cab owners jews 56:13 and 56:16 to tell the internet that their category relies on each week that would be 56:20 prepared 56:22 and so if you look at these things so 56:25 so you know you have to sign a bill back in time so at that moment you know you 56:28 you had you could invest in twitter you could investing in 56:32 arm 56:33 when they're 56:34 you know like 56:35 lots of walking is sold in all those people may brought me they don't want to 56:39 drive to say employees imagine if you could just go a long line of order 56:42 broccoli 56:43 to just get one percent of the broccoli so in america you realize how big that 56:47 would be like 56:48 and so 56:49 at any point lou at the point that you have to squeeze the trigger while i 56:54 i squeeze that you're wrong made under false negatives than false positive 57:00 i think if you honestly just have to say 57:03 gotten lucky now clearly trying to perk is a sequoia gets lucky all the time so 57:06 they must know something 57:09 while uh... 57:11 balloonist needs something 57:22 allergic to cap with the stafford 57:24 and 57:28 cell 57:29 so i'm saying is very difficult to say 57:33 but the if you look at trends i really i really think it's the 57:36 two guys in the garage 57:39 engineering background building the product that they want to use 57:42 in another another sir ritual active story was all my girlfriend wanted to 57:48 seller pez dispenser collection online so i started debate 57:53 great sport total bullshit story but 57:56 here wanted to make it the perfect market online but it's a great ritual at 58:00 the store 58:01 so you know if you're successful man you can you can just to reinvent history 58:05 right 58:06 all the time you could just 58:08 interpretation anywhere you want 58:09 and if you fail well nobody's heard of usa doesn't matter 58:14 so that's i did nothing but outside right so uh... 58:17 the i wish i could tell you 58:21 you you need to get another speaker to tell you 58:24 because i cannot 58:28 all will go back up there 58:30 and i'm using my hands 58:32 inform content 58:35 online 58:35 foreign student from create an 58:38 trying to stop here marcyle 58:41 now 58:44 just in case we didn't minimal 58:47 now 58:53 pollinate right 58:56 tired of hearing life on this 58:57 quite hard for 58:59 foreigners vic 59:01 the self-confident 59:03 himself no connection here 59:05 so can you give me any 59:07 house concert comment worldwide for foreign trip from 59:10 on you know i have to admit 59:12 i think that acoustics were this is built for the audience not them 59:16 speaker so i could not understand your question to somebody 59:21 although i have any advice for foreign entrepreneurs 59:24 in the u_s_ 59:25 uh... you know i i actually think 59:28 you have an advantage 59:31 as a foreign entrepreneur into america 59:33 because 59:35 uh... i think one of the richest veins 59:38 for investing 59:40 in particular using the square phiri 59:42 he's too 59:44 engineers 59:46 who are 59:48 or second-generation american 59:51 and if you look at it 59:53 you know like 59:56 andy grove 59:57 from hungary 59:59 uh... 60:00 sergei from russia 60:01 uh... look at all the indian entrepreneurs that built this valley 60:05 offers a second generation 60:08 uh... i think that uh... 60:13 poverty is a very motivating force 60:16 and so if you gave me a choice of investing 60:19 in a startup 60:21 where the c_e_o_ is the fifth generation american 60:25 you know his great great great great grandfather came over in the mayflower 60:31 started the largest 60:33 i don't know you know 60:36 farming supply store in connecticut 60:39 built that up built that up billionaire 60:42 uh... 60:44 this person's name is you know jonathan sebastian bill for 60:49 and uh... 60:51 father has a dollar cheery yale and darkness and coincidentally he went to 60:55 yale in dartmouth 60:57 total trust fund baby analyses that while there are a seventy five million 61:01 dollars in america 61:03 on her sis 61:06 uh... 61:07 vs 61:09 partial meat 61:11 who one generation ago 61:13 uh... his parents were in banglore 61:16 and you know that they put him through i i t any came over here 61:20 or his parents 61:21 big they caught the last helicopter out of self vietnam 61:25 and the landed in sacramento and so his mother became a made in his father 61:31 started running a liquor store and they saved everything they could 61:34 you know their son through 61:37 sintomas state 61:38 and me and that kind of thing and 61:41 are would invest in the immigrant all day long 61:44 all day long because hot because just look at the history of 61:49 entrepreneurship 61:50 it's toward people who made big companies it's not 61:53 fifty in a region trust fund babies 61:56 so i think utila asthma 61:59 will get me started in politics but 62:01 if i want to united states 62:04 god help us 62:06 decimal macintosh india standard computer 62:12 if i were president 62:13 i would say we should make 62:15 the most flexible visa program in the world 62:24 domain 62:26 i would say 62:28 you want to come to america 62:30 with the greatest education system in the world 62:34 careless in our right to have a stanford 62:36 as of yesterday 62:39 you cut the united states you get the best education 62:42 you'll be in a legal system where 62:45 it might be flawed 62:47 but it is not criminal 62:49 you don't have to pay people off to get permits you have to pay people off to 62:53 get your money out of the bank 62:54 you have to pay a people often ok he there's eight common law system here 63:02 you don't have to fear for your life 63:04 you don't have to worry about the mafia you have to those come to america 63:08 and start the great company i would do that 63:11 i can't solve the housing crisis if our obama i would say right so this is the 63:15 deal 63:16 if you wanna hollis that cost more than half a million dollars in america 63:21 you are now a citizen of the united states 63:25 here are 63:26 on all the problem with disappearing in one day 63:31 because 63:32 all of these rich people from all over the world to see 63:35 our son or daughter can be a citizen of the united states 63:39 biomol split 63:41 that would fix the housing problem right 63:45 you know 63:46 eleven months strategy would be 63:51 instead of using 63:52 jibril 63:55 refuse the visa system 63:58 and so what we want to is 64:01 want to come to america to study and work and start a company 64:05 we will give you a visa 64:06 come along now 64:08 and because we want to 64:10 create a brain drain 64:12 we want all the countries of the world to be discovered america not for killing 64:16 them 64:17 but for draining their 64:20 we want the best people from every country to come to america 64:23 start your company create jobs 64:26 to other countries dot 64:27 move back send the money that we don't care but has come to america be america 64:30 the land of opportunity 64:33 i think man 64:34 because if you look at all the great companies it's immigrants to do it 64:37 and so 64:39 i three you know this this 64:40 dislike ross perot well if we have you know people from mexico comprising the 64:45 take american jobs i don't think so metals 64:48 those of the hungry people do the aggressive people intelligent people 64:51 should 64:51 bring 'em all down like 64:53 i'm third-generation japanese-american 64:55 you know like 64:57 what would happen if they say they are no more japanese-americans and japanese 65:00 americans are taking away the me jobs in the gardiner jobs you know no more 65:04 mister biondi we want americans to do the yard work right 65:08 i would not be here right i would like to be working starbucks in your sheila 65:12 right now so 65:17 i don't get me started on this i really 65:19 i think we should create a reverse granger and she's just sucked the 65:22 brightest people on their own 65:24 i'll tell you could have a test you know just 65:26 you very much uh... the s_a_t_'s if you get 65:28 twenty four hundred on your safety as you know big everything one day 65:34 dictate six months to get fifteen hundred 65:37 and i'll stay in russia 65:38 but 65:44 well still 65:49 guy i thank you so much for your time amazed at the table diana for service in 65:53 the air uh... 65:54 by one of your advice for 65:56 prototyping in industries that have higher capital expenditure requirements 66:00 concern products are biotechnology stuff where 66:04 the infrastructure for creation is not 66:07 like intact 66:08 wednesday is the only one one 66:10 do you have advice on prototyping in industries that require higher capital 66:15 expand our or structures time plates 66:18 miracle where my uh... 66:20 all pitch for prototyping breakdown uh... 66:23 but 66:27 my advice in the 66:28 change industry 66:30 but 66:32 partner 66:34 yeah i mean that that is that is that a flaw in what i'm saying that 66:38 you know it's it's hard to build a quick prototype of a new kind of meaning 66:42 nuclear you know powerplant right 66:45 um... 66:46 but you know i'd might 66:49 okay so you can't get a prototype of a and you know you funding for your new 66:52 neighborhood nuclear power plant 66:55 i mean the message is the just got 66:59 to have something tangible to show people more tangible than parkway 67:04 whatever you can do 67:05 on the point to a similar companies 67:08 france that has neighborhood nuclear power plants and do something 67:12 but don't just talk about 67:14 you know 67:16 three hundred million americans on seventy five million dollars 67:20 you have to do something more tangible it there's the expectation in this 67:24 mean startup world 67:27 most resources are free or cheap these days the chick show up with more than 67:31 park one 67:32 uh... before i forget the enemy speak on gary in in this on 67:37 pass too bad because i just got the hungarian version of my book and i don't 67:41 know what to do what 67:45 if any of you 67:47 similar anybody who's the son gary in 67:50 uh... ice 67:51 speaking from the area 67:53 but job 67:56 please help herself to this book 67:58 high also i brought some of my heart of the starts 68:02 which is 68:03 and the book that i wrote about how to start company so i have this many here i 68:06 don't know how we're going to 68:08 give them out 68:09 people who s the shortest question maybe 68:11 and 68:14 and then one more pitch 68:16 from my most recent book is the book called eight which is why single out the 68:20 guy wearing a t_-shirt up there 68:22 and uh... eight is a book that explains how to write a book 68:27 and so if any of you are interested in how to write a book 68:31 program one of these cards 68:33 because this is uh... innovation in the book business of this card these cards 68:38 on the back 68:38 have been placing scratch off a specific uh... redemption code 68:43 to goto website you get this number re-type it and 68:46 and then you can download the e-book version of this self 68:50 though the for for an author 68:53 this is probably 68:54 two hundred cards 68:56 if i were to bring two hundred books 68:59 you know they would be stacked this paul i would never do that 69:02 so this is a way that i can for fill orders and with much better way to do is 69:07 so 69:07 uh... if if you're interested in a book 69:10 uh... about self publishing this is my latest book called eight 69:15 help herself 69:16 uh... i do this for my love of cal that uh... 69:20 because the 69:26 blasting questions okay 69:28 hey guys less teary three 69:30 in norway has come up with that 69:32 um... 69:35 i would love for you any day 69:38 on the first generation immigrants from the nam 69:41 anna of this my question for you 69:43 we did in getting to the plan 69:46 i was trying so hard for four five months to get funding from angels yeah 69:53 when is the time for you to 69:58 arches find something else well um... 70:03 there is a difficult question because 70:09 what is in a sense it's what's worth giving up too quick or staying too long 70:15 and there is no simple answer to that 70:18 the development also released 70:21 hall you know fred smith was on his last year only went to las vegas city may ten 70:26 grand any state federal express right 70:28 but you never give the people who 70:30 did it make ten grand in las vegas and 70:32 mister last 70:34 you know when out of business you don't hear about those 70:37 so 70:41 lessons for one thing how old are you 70:45 so you know it's not like here at the end their life it right on that's so 70:51 so problem 70:54 ta twenty three years old when you try to raise money for six months 71:03 you know a lot of time to alan and i mean i wouldn't don't sweat it 71:08 filter anything silverdarkcure yourself in the 71:12 envisioned democrat within a year 71:14 demand i have resumed 71:16 dada adult dog sledding uh... 71:19 by your parents here are still in and out there and you know 71:22 and um... 71:23 underwriting liquor stores a you know that you know actually denies hanson mir 71:28 my parents are 71:30 not the poorest people 71:32 so i i don't want to ask him for money 71:34 for some reason 71:35 go ahead and they're they're like 71:36 this so proud of your your 71:39 uh... data 71:45 yourself well in your town 71:49 you know they would probably really happy if you wanted to do 71:53 dentistry or 71:55 medical arm and a lawyer 71:58 marian nice vietnamese girl 72:01 dino 72:06 k 72:09 maybe if you file for a captain 72:10 they would be happy here 72:14 are 72:17 uh... you know i mean 72:19 by god that is so late 72:21 obviously on asian i went to stanford i graduated in three-and-a-half years 72:25 and i have to tell you 72:26 one of my biggest regrets in life 72:31 was 72:33 furqan driven asian rights you know you've got a like t 72:37 as many courses as you can t 72:39 go to summer school 72:41 you know you want your in a rush to get out there and 72:44 need get out and you working you finally got a work for bozos for the next 72:48 sixteen years of your life right 72:50 and so 72:51 uh... i would encourage all of you 72:54 undergrad order ad 72:57 you you want your parents as long as you 73:03 tell my son is not in the early morning 73:05 i think he inherited that 73:07 perspective 73:11 you know because like 73:13 your parents right in there like you know it 73:17 working hard and it's a probably a little although it is a lower 73:21 barcelona is that the 73:23 bessie university 73:25 in america 73:28 well that's not correct she said well you know what 73:30 my 73:32 hussein harbor 73:33 so also you know there's still probably telling all there 73:37 friends and all that and and 73:41 under the vietnam and there's a lot of school is in the ninety-one personal 73:44 scooters and 73:49 so i i i guess 73:50 along wit me telling you that you have don't sweat it images 73:56 but listen i've got ten dollars or so 73:59 before stories though 74:01 uh... after i graduated from stanford 74:04 the next year entered law school at u_c_ davis 74:09 and i went to law school for 74:10 two weeks 74:11 and that could not stand off school 74:15 i'm just hated law school 74:16 uh... basically back then anyway 74:19 they see the law school was the carried in your piece of shell memory meet you 74:24 and i had a real fragile need or that point of my life hard to imagine but i 74:27 had a real fragile heels 74:29 so i just could not 74:30 panel 74:31 the concept that there are going to remake me because i was a piece of shit 74:35 so i left moscow after two weeks 74:37 and uh... 74:40 you know that's the first time i quit something in my life and i thought 74:44 i thought this was the first in the end of the world rights asian-american clean 74:48 lost a lot of login alike 74:50 applaud also would like 74:51 hill twenty generations of kawasaki they're like working in rice paddies and 74:57 and 74:58 fifteen the homes of white people 75:00 and they do it all this is so finally you know one of the u breaks through 75:05 can you get to law school use data for two weeks in a court it 75:09 rights alike 75:10 bringing shame on pharmacol sake name for the next twenty generation's going 75:14 for 75:17 yes what is it suicide what should i do you know should i run away from home 75:22 so i call upon our ceo that is the heck yeah jk adequate 75:26 inside the reason i do still want me right are you know whatever 75:30 it tells me 75:32 so carefully to make something of your life 75:35 or why aren't you first middle last food and 75:39 dot edu 75:40 wall you force me to law school so anyway 75:42 but the last word today that 75:44 blacks 75:46 dana 75:47 w 75:49 by god first of all i think use has been a great informative and very 75:52 entertaining type 75:54 uh... so my question is what superior mac 75:57 for pc 76:00 well that is a dumbass question gas fayaz and so i could get that books and 76:04 now it's my real russian 76:06 the 76:07 distractions 76:08 requested 76:09 he said the shortest question get started on a plane you know you've got 76:12 to the pope and say well what's better catholicism laurie in a lot but right 76:17 outside uh... 76:20 there is really a madonna urban education start-up and so this question 76:24 pertains to die for is not a short for sure but i was joking 76:29 multiple questions ok specimen one this pertains to your lesson about the fifty 76:34 one percent win control of the company 76:37 so when our where some sardinia and education startup nontraditional as much 76:42 as possible 76:43 wonder stand outside your situation 76:45 what is a reasonable amount of what is the maximum amount of equity you might 76:48 be willing to share or you noted to vcs with the reasonable expectation that you 76:53 can maintain control 76:56 that will uh... as i said there is no reasonable expectation of 76:59 maintaining control the moment you taken outside investor 77:03 you are kind of fiduciary early working for that investor whether it's still one 77:08 percent or fifty one percent just just get that it's not exactly true but it is 77:13 a better model to be thinking that way that you losing control but on the other 77:18 hand 77:19 you know you're really not losing control 77:21 you on our 77:25 jennine kapil two to make it a bigger part that's what you're truly does it 77:29 also you should do so by yourself because of the cure 77:32 giving part of your company to the v_c_r_ gay you're not giving 77:36 part of your company you are selling 77:39 part of your company it is an arm's length transaction you're not doing them 77:42 a favor anymore than they're doing you a favor 77:45 it's a mutually beneficial or playing transactions that 77:49 so 77:51 so having said that we know generally speaking 77:54 you tried to sell them all 77:57 twenty to thirty percent of your company program 78:02 so 78:03 uh... then then you question becomes well how much is your company work 78:09 and so if your company is worth 78:11 four million free money and you raised two million somalis six million polls 78:16 so to sixty is the third so you sold off thirty three percent of your company for 78:22 two million 78:24 kine about rider if your if you're selling forty or fifty percent of your 78:28 company 78:30 you're doing yourself too much if you try to only sell ten percent of your 78:33 company most p_c_'s will not be interested because it's not because 78:37 enough for them 78:38 so votes its 78:40 kind of in that range 78:43 last question antonyms daniel 78:46 undergraduate here house just re-entering 78:50 growth in a family with with both partners on mom and dad and 78:53 second-generation american 78:54 um... you're making me cry 78:57 hahaha 78:58 so having them 78:59 knowing that mike has always driven it to you that the innovative and placed in 79:03 excess 79:04 believing in me 79:06 making us all a product that's going on 79:08 and something that you would want that somebody else would benefit from l 79:11 i have 79:12 and that bill prototypes are working prototypes with happens 79:16 at a promise on the stones 79:18 this fall 79:19 they stole the patents from 79:22 but that prototype is still workable 79:24 welfare on them 79:25 i'm tryin ta they steal a package from you 79:29 the copying what you did you cannot be what i did aka but i have the reginald 79:33 stalin was the best time to introduce this to my picture capitalists 79:37 pixel dot paddy's day seeing these prototypes and their workable 79:45 was the best time to introduce 79:47 these patents and these products in market 79:50 wind you see there's other bible solutions on the market but you know all 79:58 my advice is that 80:00 you should always deliver bad news early 80:03 and so 80:06 you know 80:09 it's a very good acid test of how much the v_c_ really believes that you if you 80:12 tell them this and they say okay forget it 80:18 uh... height you know 80:20 understated 80:22 if you are transparent an honest 80:24 from the get go 80:26 it just takes less mental energy to maintain 80:32 aria 80:33 come to the conclusion that when you live 80:37 he takes too much energy too long 80:40 because when you start lying you need to keep track of what lies you told 80:45 because you need to be 80:47 consistent with your lives 80:49 resisted tell the truth 80:51 there's only one true 80:53 you don't have to read 80:53 member which a version of the truth be told there is only one version 80:57 so i would be on us 81:00 if if the vcd or the investors 81:03 are truly believers in your company 81:06 the first of all they would probably become stronger believers 81:09 because they now know that you have the integrity to deliver bad news 81:15 which is a very very useful thing 81:17 our integrity is a very useful thing 81:20 and arguably if they just 81:23 turn around and run away 81:26 you know they didn't really believe in you anyways so 81:29 apparently there is there 81:31 i would also make the case that 81:34 even if someone copied your idea 81:37 but the wave of the company becomes defensible 81:40 is the first company to scale 81:44 as opposed to the first company to file happen 81:47 so 81:48 army even in the race the races to scale 81:52 to build a successful company 81:54 as opposed to 81:56 you know 81:58 the word the reason why we defensible is a patent 82:02 is 82:03 there are many i would rather have a company 82:05 with the prototype 82:07 that is not path of the bull 82:10 thousands of people using the service and joining every day 82:13 than something that is rock-solid airtight patents 82:18 no one is using 82:20 you know just you want you want something the dogs are already even the 82:24 food 82:25 sightseeing 82:26 i seen the need for this product 82:28 nobody else how this product 82:30 i built the product built the working prototype 82:32 people seen it 82:33 and an actor 82:35 and and they talked about 82:36 but i saw how there were some product well on welfare another perspective on 82:39 this which is 82:43 if simply seeing your product and copying it 82:47 renders you one defense of all 82:49 did you do then have a good enough product anyway 82:52 you should take more 82:54 than seeing the product 82:57 and copying it 83:00 to make to you 83:02 bowling ball 83:04 we should take more 83:06 if if that's all it is it just 83:08 cheering what your ideas on the cell bulk food offline 83:12 but i'll tell you that as a non-disclosure 83:14 you're a loser 83:15 because 83:16 that's just not that even if you had a path in for selling dog food online 83:21 s does not defensible doesn't matter so 83:24 it's the first to scale 83:26 first to succeed 83:29 that's what makes it 83:30 successful well i guess if i start acting like that counts 83:33 yes i've had to ask 83:43 five fact guy for in fact it come with us and have a conversation right then 83:48 and i think they care

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