>> Hey welcome back everybody. Jeff Frick here at theCUBE. We're at Node Summit 2017 in Downtown San Francisco. 800 people hanging out at the Mission Bay Conference Center talking about development and really monumental growth curve. One of the earlier presenters have one project last year. I think 15 this year, 22 in development and another 75 toy projects. The development curve is really steep. IBM's here, Microsoft, Google, all the big players so there is a lot of enterprise momentum as well and we're happy to have our next guest. Who's really started this show and one of the main sponsors of the show He's Charles Beeler. He's a general partner at Rally Ventures. Charles great to see you. >> Good to be back. Good to see you. >> Yeah, absolutely. Just kind of general impression. You've been doing this for a number of years I think when we talked earlier. Ryan Dawles interview from I don't even know what year it is I'd have to look. >> 2012, January 2012. >> 2012. It's still one of our most popular interviews of all the thousands we've done on the theCUBE, and now I kind of get it. >> Right place, right time but it was initially a lot. In 2011, we were talking about nodes. Seemed like a really interesting project. No one was really using it in a meaningful way. Bryan Cantrell from Joint. I know you all have talked before, walked me through the Hello World example on our board in my office, and we decided let's go for it. Let's see if we can get a bunch of enterprises to come and start talking about what they're doing. So January 2012, there were almost none who were actually doing it, but they were talking about why it made sense. And you fast forward to 2017, so Home Away was the company that actually had no apps. Now 15, 22 in development like you were mentioning and right now on stage you got Twitter talking about Twitter light. The breath and it's not just internet companies when you look at Capital One. You look at some of the other big banks and true enterprise companies who are using this. It's been fun to watch and for us. We do enterprise investing so it fits well but selfishly this community is just a fun group of people to be around. So as much as this helps for our rally and things. We've always been in awe of what the folks around the node community have meant to try to do, and it did start with Ryan and kind of went from there. It's fun to be back and see it again for the fifth annual installment. >> It's interesting some of the conversations on stage were also too about community development and community maturation and people doing bad behavior and they're technically strong. We've seen some of these kind of growing pains in some other open source communities. The one that jumps out is Open Stack as we've watched that one kind of grow and morph over time. So these are good. There's bad problems and good problems. These are good growing pain problems. >> And that's an interesting one because you read the latest press about the venture industry and the issues are there, and people talk more generally about the tech industry. And it is a problem. It's a challenge and it starts with encouraging a broad diverse group of people who would be interested in this business. >> Jeff: Right, right. >> And getting into it and so the node community to me is always been and I think almost any other out source community could benefit at looking at not just how they've done it, but who the people are and what they've driven. For us, one of the things we've always tried to do is bring a diverse set of speakers to come and get engaged. And it's really hard to go and find enough people who have the time and willingness to come up on stage and it's so rewarding when you start to really expose the breath of who's out there engaged and doing great stuff. Last year, we had Stacy Kirk, who she runs a company down in L.A. Her entire team pretty much is based in Jamaica brought the whole team out. >> Jeff: Really? >> It was so much fun to have whole new group people. The community just didn't know, get to know it and be in awe of what they're building. I thought the electron conversation. They were talking about community, that was Jacob from GitHub. It's an early community though. They're trying to figure it out. On the Open Stack side, it's very corporate driven. It's harder to have those conversations. In the node community, it's still more community driven and as a result they're able to have more of the conversation around how do we build a very inclusive group of people who can frankly do a more effective job of changing development. >> Jeff: Right, well kudos to you. I mean you open up the conference in your opening remarks talking about the code of conduct and it's kind of like good news bad news. Like really we have to talk about what should basically be. It's common sense but you have to do it and that's part of the program. It was Woman Attack Wednesday today so we've got a boat load of cards going out today with a lot of the women and it's been proven time and time again. That the diversity of opinions tackling any problem is going to lead to a better solution and hopefully this is not new news to anybody either. >> No and we have a few scholarship folks from Women who code over here. We've done that with them for the last few years but there are so many organizations that anyone who actually wants to spend a little time figuring out how can I be apart of the, I don't know if I'd call it solution but help with a challenge that we have to face. It's Women who code. It's Girls who code. It's Black girls code and it's not just women. There's a broad diverse set of people we need to engage. >> Jeff: Right, right. >> We have a group here, Operation Code who's working with Veterans who would like to find a career, and are starting to become developers and we have three or four sponsored folks from Operation Code too. And again, it's just rewarding to watch people who are some of the key folks who helped really make node happen. Walking up to some stranger who's sort of staring around. Hasn't met anybody. Introduce himself say, "Hey, what are you interested in "and how can I help?" And it's one of the things that frankly brings us back to do this year after year. It's rewarding. >> Well it's kind of interesting piece of what node is. Again we keep hearing time and time again. It's an easy language. Use the same language for the front end or the back end. >> Yep. >> Use a bunch of pre-configured model. I think Monica from Intel, she said that a lot of the codes they see is 2% is your code and everything you're leveraging from other people. And we see in all these tech conferences that the way to have innovation is to label more people to contribute. That have the tools and the data and that's really kind of part of what this whole ethos is here. >> And making it. Just generally the ethos around making it easier to develop and deploy. And so when we first started, Google was nowhere to be found and Microsoft was actually already here. IBM wasn't here yet and now you look at those folks. The number of submissions we saw for talk proposals. The depth of engagement within those organizations. Obviously Google's got their go and a bunch of it but node is a key part of what they're doing. Node and I think for both IBM and also for Google is the most deployed language or the most deployed stack in terms of what they're seeing on their Cloud, Which is why they're here. And they're seeing just continued growth, so yeah it drives that view of how can we make software easier to work with, easier to put together, create and deploy and it's fun to watch. Erstwhile competitors sitting comparing notes and ideas and someone said to me. One of the Google folks, Miles Boran had said. Mostly I love coming to this because the hallway chatter here is just always so fascinating. So you go hear these great talks and you walk out and the speakers are there. You get to talk to them and really learn from them. >> I want to shift gears a little. I always great to get a venture capitalist on it. Everybody wants to hear your thoughts and you see a lot of stuff come across your desk. As you just look at the constant crashing of waves of innovation that we keep going through here and I know that's apart of why you live here and why I do too. And Cloud clearly is probably past the peak of the wave but we're just coming into IoT and internet of things and 5G which is going to be start to hit in the near future. As you look at it from an enterprise perspective. What's getting you excited? What are some of the things that maybe people aren't thinking about that are less obvious and really the adoption of enterprises of these cutting edge technologies. Of getting involved in open source is really phenomenal thing of environment for start ups. >> Yeah and what you're seeing as the companies, the original enterprises that were interested in nodes. You decided to start deploying. The next question is alright this worked, what else can we be doing? And this is where you're seeing the advent of first Cloud but now how people are thinking about deployment. There's a lot of conversation here this week about ServerList. >> Jeff: Right, right. We were talking about containers. Micro services and next thing you know people are saying oh okay what else can we be doing to push the boundaries around this? So from our perspective, what we think about when we think about when we think of enterprise and infrastructure and Dev Ops et cetera is it is an ever changing thing. So Cloud as we know it today is sort, it's done but it's not close to being finished when you think about how people are making car-wny apps and deploying them. How that keeps changing, questions they keep asking but also now to your point when you look at 5G. When you look at IoT, the deployment methodology. They're going to have to change. The development languages are going to change and that will once again result in further change across the entire infrastructure. How am I going to go to place so I would say that we have not stopped seeing innovative stuff in any of those categories. You asked about where do we see kind of future things that we like. Like NEVC, if I don't say AI and ML and what are the other ones I'm suppose to say? Virtual reality, augmented reality, drones obviously are huge. >> It's anti drones. Drone detection. >> We look at those as enabling technology. We're more interested from a rally perspective and applied use of those technologies so there's some folks from GrowBio here today. And I'm sure you know Grail, right they raise a billion dollars. The first question I asked the VP who is here. I said, did you cure cancer yet? 'Cause it's been like a year and a half. They haven't yet, sorry. But what's real interesting is when you talk to them about what are they doing. So first they're using node but the approach they're taking to try to make their software get smarter and smarter and smarter by the stuff they see how they're changing. It's just fundamentally different than things people were thinking about a few years ago. So for us, the applied piece is we want to see companies like a Grail come in and say, here's what we're doing. Here's why and here's how we're going to leverage all of these enabling technologies to go accomplish something that no one has ever been able to do before. >> Jeff: Right, right. And that's what gets us excited. The idea of artificial intelligence. It's cool, it's great. I love talking about it. Walk me through how you're going to go do something compelling with that. Block chain is an area that we're spending, have been but continue to spend a lot of time looking right now not so much from a currency perspective. Just very compelling technology and the breath of our capability there is incredible. We've met in the last week. I met four entrepreneurs. There are three of them who are here talking about just really novel ways to take advantage of a technology that is still just kind of early stages, from our perspective of getting to a point where people can really deploy within large enterprise. And then I'd say the final piece for us and it's not a new space. But kind of sitting over all of this is security. And as these things change constantly. The security needs are going to change right. The foot print in terms of what the attack surface looks like. It gets bigger and bigger. It gets more complex and the unfortunate reality of simplifying the development process is you also sometimes sort of move out the security thought process from a developer perspective. From a deployment perspective, you assume I've heard companies say well we don't need to worry about security because we keep our stuff on Amazon. As a security investor, I love hearing that. As a user of some of those solutions it's scares me to death and so we see this constant evolution there. And what's interesting you have, today I think we have five security companies who are sponsoring this conference. The first few years, no one even wanted to talk about security. And now you have five different companies who are here really talking about why it matters if you're building out apps and deploying in the Cloud. What you should be thinking about from a security perspective. >> Security is so interesting because to me, it's kind of like insurance. How much is enough? And ultimate you can just shut everything down and close it off but that's not the solution. So where's the happy medium and the other thing that we hear over and over is it's got to be baked in all the layers of the cake. It can't just be the castle and moat methodology anymore. >> Charles: Absolutely. >> How much do you have? Where do you put it in? But where do you stop? 'cause ultimately it's like a insurance. You can just keep buying more and more. >> And recognize the irony of sitting here in San Francisco while Black Hat's taking place. We should both be out there talking about it too. (laughing) >> Well no 'cause you can't go there with your phone, your laptop. No, you're just suppose to bring your car anymore. >> This is the first year in four years that my son won't be at DEF CON. He just turned seven so he set the record at four, five and six as the youngest DEF CON attendee. A little bitter we're not going this year and shout out because he was first place in the kid's capture the flag last year. >> Jeff: Oh very good. >> Until he decided to leave and go play video games. So the way we think about the question you just asked on security, and this is actually, I give a lot of credit to Art Covella. He's one of our venture partners. He was the CEO at our safe for a number of years. Ran it post DMC acquisition as well is it's not so much of a okay, I've got this issue. It could be pay it ransom or whatever it is. People come in and say we solve that. You might solve the problem today but you don't solve the problem for the future typically. The question is what is it that you do in my environment that covers a few things. One, how does it reduce the time and energy my team needs to spend on solving these issues so that I can use them? Because the people problem in security is huge. >> Right. >> And if you can reduce the amount of time people are doing automated. What could be automated task, manual task and instead get them focused on hired or bit sub, you get to cover more. So how does it reduce the stress level for my team? What do I get to take out? I don't have unlimited budget. That could be buying point solutions. What is it that you will allow me to replace so that the net cost to me to add your solution is actually neutral or negative, so that I can simplify my environment. Again going back to making these work for the people, and then what is it that you do beyond claiming that you're going to solve a problem I have today. Walk me through how this fits into the future. They're not a lot of the thousands of-- >> Jeff: Those are not easy questions. >> They're not easy questions and so when you ask that and apply that to every company who's at Black Hat today. Every company at RSA, there's not very many of that companies who can really answer that in a concise way. And you talk to seesos, those are the questions they're starting to ask. Great, I love what you're doing. It's not a question of whether I have you in my budget this year or next. What do I get to do in my environment differently that makes my life easier or my organization's life easier, and ultimately nets it out at a lower cost? It's a theme we invest in. About 25% of our investments have been in the securities space and I feel like so far every one of those deals fits in some way in that category. We'll see how they play out but so far so good. >> Well very good so before we let you go. Just a shout out, I think we've talked before. You sold out sponsorship so people that want to get involved in node 2018. They better step up pretty soon. >> 2018 will happen. It's the earliest we've ever confirmed and announced next year's conference. It usually takes me five months before >> Jeff: To recover. >> I'm willing to think about it again. It will happen. It will probably happen within the same one week timeframe, two week timeframe. I actually, someone put a ticket tier up for next year or if you buy tickets during the conference the next two days. You can buy a ticket $395 for today. They're a $1000 bucks. It's a good deal if people want to go but the nice thing is we've never had a team that out reaches the sponsors. It's always been inbound interest. People who want to be involved and it's made the entire thing just a lot of fun to be apart of. We'll do it next year and it will be really fascinating to see how much additional growth we see between now and then. Because based on some of the enterprises we're seeing here. I mean true Fortune 500, nothing to do with technology from a revenue perspective. They just used it internally. You're seeing some really cool development taking place and we're going to get some of that on stage next year. >> Good, well congrats on a great event. >> Thanks. And thanks for being here. It's always fun to have you guys. >> He's Charles Beeler. I'm Jeff Frick. You're watching theCUBE, Node Summit 2017. Thanks for watching. (uptempo techno music)

prepare for the extraction point we've been briefed on all the important stories and events in the world of emerging information now it's time to extract the data and turn it into action live from the silicon angle studios in the heart of Silicon Valley this is extraction point with John furrier okay we're live back in the palo alto studios i'm john furrier for the extraction point we extract the signal from the noise and my special guest today i'm excited to have here is Paul Martino who is the founder of aggregate knowledge and also storied entrepreneur in Silicon Valley who now lives in Philly with his family comes out here Paul is known for among other things being a great entrepreneur tech geek loves tech loves to build build startups started one of the first social networks with Mark Pincus called tribe started his own company funded by Kleiner Perkins with his partner Chris law called aggregate knowledge which is booming and doing great and now more famous for being the first round investor in zynga company that is exploding with revenue as Kleiner Perkins said is the of all their portfolio comes in the history more than Google's made more money faster than anybody Paul Martino welcome to the extraction point great to see you John as always awesome to see you first I got to start with your now I forgot to mention that you're actually running a venture firm so in addition to being famous with Zynga you're running bullpen capital so first give the folks out there an update and first confirm or deny you were in the first round of Zynga or not yes the the first round of Zynga there were several institutional investors and several individual investors Morocco me Reid Hoffman were individual investors Avalon Union Square accelerator ventures and foundry where the institutional investors in that first round Peter was Peter Thiel yeah Peter was also an individual investor in the first round so that's officially the first round investors of Zynga we have clarified that and that is now hot on the books but now you're you've been successfully founded aggregate knowledge you know have a CEO running that what's the update with aggregate knowledge yeah so great guy runs that company as a guy you need to meet and have on this show Dave jakubowski aggregate knowledge really went in a direction where all of the focus was on providing data and analytics to the major ad agencies and John John Nelson who started organic one of the first agencies is now the CEO of Omnicom digital joined the board and I said look we got to get a guy who's an ad heavy in here and jakubowski was previously the GM of microsoft adcenter and had a senior position at specific media and we brought him in and he's just been kickin butt our greek knowledge has really really made a significant significant contribution in the area of data and analytics for these major agencies and he was very able to bring in a crew of people know exactly how to run that business so you're a big fan of big data then mm-hmm oh yeah we just had a big special yesterday on Big Data mentioned about it so that's cool we're going to get into a lobbyist I was just kind of get the small talk out of the way here your current role is the founder of bullpen capital right so bullpen to me I'm a baseball not I love baseball bullpen means you go the bullpen for relief right yep thank God close the game out hopefully or mid-innings relief so tell us about what bullpen is it's a special fund as I know from reading talk to you to target an expansion of this new seed and explosive new funding environment Bryce plain force right I'll tell you how we got the name at the end too so here's what happened I've been investing with a lot of the so-called super angels and that's kind of a misnomer because they really are actually in some cases actual small venture firms to I've been investing with a lot of them since they got off the ground Josh Kopelman from first round is one of the first investors in aggregate knowledge mike maples was an early advisor to the company I've known Jeff claw be a who run soft tech since he was at Reuters and with the late 90s and so I've worked with these guys done a lot of investing and we were me and my buddies Duncan Davidson rich Melman were sitting around over summer of 09 doing a little bit data analysis right another big data assignment we realized that as more and more these seed funds got created they were creating an inventory of companies that weren't quite ready to go to the traditional venture guy but we're also difficult to bridge from just the seed guys because the see guys at that time didn't have really big funds so wait a minute you've got some really good companies here is to clarify the for the folks out there seed funds don't traditionally have follow-on big funds like a VC firm right that's what you're referring to yeah they tend not to have as bigger reserve so if a big fun writes you a five-million-dollar check and you stub your toe you can probably get some more money to get through the hardships but a lot of the the new super angel funds or smaller funds and you get a five hundred thousand dollar check and if you need another five hundred thousand dollars it can frequently be very difficult because they make so many investments with smaller reserves yeah and so you've got dave McClure clavey a maples first round capital true ventures made the first round truevision more traditional VC then say dave McClure and mike maples and claw VA they're out doing some really good work out their funding really good company spending a lot of time I know I've seen them working their butt off yeah they need some air support right they need some cover the little bullpen is that that's you come in and say hey for your stars they're going to rise up yep and so that's exactly right so what happens is here's what the analysis we did turned out of their portfolio thirty percent of their portfolios in aggregate quickly are really exciting companies you know and they quickly go up to a venture auction and the guys and sandhill rotor excited about it about twenty percent of their deals you know that they don't like too much it's kind of just floating there yeah that you know the entrepreneur wasn't a fit that team didn't execute that left fifty percent of their deals in the middle which they kind of were too early to tell as Mike maple sometimes says they were in an extended learning and discovery phase they hadn't quite figured out what their models yeah and this de pivoting stuff's going on right now the Marcus changes turbulence so these guys are right and so you look you look at some examples and you go well wait a minute for every zynga that goes up into the right immediately go look at the stories of chegg and modcloth and etsy and quite frankly the in-between round on twitter and for everyone Zynga that you find that just hits it out of the park the right way there were four to five companies that went through that hard intermediate round that it was difficult in the environment where you have only a potentially thinly capitalized seed fund in front of you go get through that difficult point I said guys you need a bull pen and way we came up with the name is I'm involved in a deal with Chad Durbin who used to pitch for the Phillies and now as a relief pitcher for the cleveland indians and he was in our office and we were talking about this idea and Chad said yeah it's kind of like you're building a bullpen for the seed guys I'm like that's exactly right that's the name we got to go with and so fortunately I was involved in in this company called showcase you which is actually cool cited suppose for recruiting for college scholarships for a collegiate athletes right you're a high school student you throw 80 miles an hour left hand it and you're in 10th grade how do you figure out where the right scholarships are so Durbin and some of the Phillies where the original investors in this company called showcase you it's actually a cool company as the combine work out online basically fries for the high school kids and because the high school kids sometimes are in tough geographies to get to you're in you're in a small rural area in Nebraska how do they find out that you're the guy who can throw 89 miles an hour great so I mean this VC market so basically you're referring to with bullpen right now is an innie and you've been in our sprayer so you live through classic you know classic financing your last company financed by kleiner perkins and a tribe i forget who financed tribe yet Mayfield was the lead investor may feel again another traditional VC firm all tier 1 VCS although may feel people are you now is slipped a little bit that's some of their key partners who have slipped away but they've all moved on what you're really referring to is there's a new dynamic of entrepreneurship going on now we're now there are some break outcomes that just need a little bit more time to mature in the old model they just be kind of closed down the VC guy would be on the Bora has just a pain in the ass and you know really not growing and do another round it's they get kind of lazy in a way if they got 10 10 boards are on so with the super angels and the fact that does take a lot of cash to start a company you've got more deals getting done so the the Y Combinator the Dave McClure's and chef claw va's in the mike maples and sometimes SiliconANGLE labs which we're doing here is telling you about right we're funding companies the more [ __ ] is funded a better will you come in as you keep them alive longer just wreck the pivot possibly that's right and so what happens is right now the venture industry is being disrupted the same way the venture industry has funded companies that have rupted other industries they are being disrupted in the exact same way and the disruption happened from below as always happens it started in seed stage now in order for the disruption to go all the way through there need to be companies that come after seed stage investors that have the same philosophy and mentality pro entrepreneur easy terms operating people who get their hands dirty to get deals done you need that in the B stage and in the sea stage and here's what our prediction is John our prediction is a few years from now there'll be a company that comes after bullpen that does series c and series d financing or mezzanine financing but the same philosophy is bullpen and then DST s at the end of that chain and you can imagine building companies that go all the way to liquidity that you got money from maples first bullpen second this unnamed company third and you went quasi-public with DST and you've bypassed the entire venture scheme entirely and the entire institutional public markets complete liquidity wealth creation companies creating jobs I mean this is new paradigm I mean this isn't amazing I mean this is a potentially amazing point in the history of us finance the idea that you could go two billion dollar outcomes by passing not only the public markets on the back side but the traditional venture ecosystem on the front side I mean that is a disruption if ever there was one amen I mean hi and with you a hundred percent the other some people who will argue regulation is if market forces first of all I'm a big believer in market forces so I think what you're doing is clearly identifying an opportunity that dynamics are all lying lining up entrepreneurs are validating it and so but the questions are regulations I mean first of all I'm anti-regulation but as you start to get to that liquidity and some are arguing I even wrote a blog post about saying hey you know basically Facebook's public merry go buddy what do you say to those guys this is the change in the history of this financial asustor we want the government regulating this yeah so my co-founder of both i started bullpen with two really good guys Duncan Davison who was the founder covad was advantage point for years asking them to buy government regulation would go bad i mean what happened then because of the I lack warsi like Wars but only that the some extent covet doesn't exist unless the telco 1994 happens through in some ways a creation of the government to good point it's social right but but think about it the arbitrariness of government as opposed to a well-thought-out centralized plan so anyway so Duncan sometimes uses that phrase you know he talks a lot about the way in which the government you know that the worst thing you can ever hear is I'm with the government I'm here to help right i mean that's about the way it goes but his point around the the the new quasi public markets is money we'll find a way yeah and when sarbanes-oxley happens and it's tough to go public and you're a CEO like Pincus who's running one of the great all-time companies in Silicon Valley at Zynga he says you know going public is not an entrance is not an exit it's an entrance that's that's this quote what why would I why do I need that headache I mean I was just talking with Charles beeler who sold for the hell dorado he sold to compel in one of his investments to dell for over a billion dollars and and 3 para nother firm he wasn't on that one that was sold to HP during storage wars he's talking about the lawsuits literally this shakedown of immediately filed lawsuits you know you could have got more money so this is this public markets brutal no doubt no doubt i think what you're doing is a revolution I'm all excited about this new environment again anything with his liquidity wealth creation with the engine of innovation can be powered that's fantastic look back the startups okay get back to where you're playing yeah the history of Silicon Valley was built on the notion of value add some have said over the past 10 years venture capital has not been truly value add and some were arguing value subtract and then just money so what you're talking about here is getting in and helping me stay alive what's the value added side of the equation mean I know that a lot of these folks like like like ourselves here it's looking angle McClure Xavier and maples and true ventures they roll their sleeves up first round capital right before we can only provide so much it kind of expands right you guys are filling in the capital market side right how are you guys helping out on the value add because a lot of those companies may be the next Twitter right you've got a bridge to finance that's right allow them to do the pivot or get the creative energy to grow and they hit that market if they hit that hit it going vertical you got it kind of sometimes nurture it you guys have a strategy for that talk about the so let me let me give you my perspective on that so I think 10 years ago when you're starting a company the name of the venture firm was more important than potentially the partner on your board ten years later the name of the firm matters much less and it's the name of the partner and it's the operating experience that that partner partner brought to bear and you go talk to the 24 year old entrepreneur verse the 34 year old entrepreneur the 24 entrepreneur 24 year old entrepreneur wants a guy like you or a guy like me on his board he wants have been there done that started a company was a CEO exited it got fired hired people fired other people scar tissue scars knowledge experience exactly and if a good friend of mine who's in the traditional business I'll leave his name out of it he sometimes says the following phrase the era of the gentleman VC is over and what he means by the era of the gentleman VC is over is you know if your background is you were a junior associate who came in with a finance degree in an MBA and it never started a company you're not going to get picked by the entrepreneur anymore in 10 years from now almost everyone in the business is going to have a resume that looks more like a Cristal Paul Martino a mark pincus that you name all the people who we've started our companies with if there's a lot more hochberg with track record certainly with with the kind of big companies in the valley just in our generation yet started with netscape google paypal right now i want to see facebook is and then now's inga either the ecosystem is just entered intertwined I mean for every failure that spawns more success right so that's right that's a Silicon Valley way yeah well a tribe was tribe was a perfect example of a successful failure tribe was not a successful outcome but it was in many ways a very successful way to actually pioneer what became social networking you know investments got made into Facebook as a result of that Zynga in aggregate knowledge were both the outcrops of what was learned to some extent the original business case of Zynga was remarkably simple there is a ton of time being spent on social networks and after you get done finding your buddies and looking at photos what do you do and Pincus is original vision to some extent was let's have games to play and that insight doesn't happen that way unless you don't do tribe and go into the trenches and get the scars on your back and your in your your second venture of our adventure right at the tribe was aggregate knowledge was similar concept people are connected I mean you got to be excited though I mean you know you were involved in tribes very early on all the stuff that you dealt with activity streams newsfeed connections the social science you know the one that one of the nicest pieces of validation of this recently was over in q4 of 2010 seven of the patents that me Chris law Elliot low and Brian Waller wrote got issued now they're all owned by Cisco Cisco bought tribe in the end they bought the assets in the and the patent filings but there are patent filings that go back to 2002 on the corner stones and hallmarks of what social networking really is that we wrote back then that have now issued order granted or sitting in the cisco portfolio and well that's kind of like a consolation prize and that there wasn't a big outcome for tribe it is very validating to see that those original claims on really cutting-edge stuff have been had been issued and I'm excited about that you should be proud i'm proud to know your great guy you have great integrity you're going to do well as a venture capitalist i think you people will trust you and you're fair and there's two types of people in this world people who help people people who screw people so you know you really on one side of the other you're you're not in between you're truly on the on the good side I really enjoy you know having chatting with you but let's talk about entrepreneurship from that perspective about patents you know I'm try was an outcome that we all can relate to the peplum with Facebook of what Zuckerberg and and those guys are doing over there that's entrepreneurship so talk to the entrepreneurs out there yeah hey you know what you do some good work it all comes back to you talk about the the Karma of entrepreneurship a failure is not a bad thing it's kind of a punch line these days I'll failures are stepping stone to the next thing but talk about your experience and lets you and i talk about how to deal with faith for those first-time entrepreneurs out there in their 20s what just give them a sense of how to approach their venture and if it fails or succeeds what advice would you give them yeah well like winning and losing is important part of the game I mean certain companies are going to be successful in certain ones art and if you go and start ten unsuccessful companies maybe this isn't exactly the business for you but that said how you the game is important as well and if you're a high integrity guy who gets good investors and you make quality decisions and let's say the market wasn't a fit you're going to get the money the second time because people said you know I work with that guy that guy really did a good job you know they never got it quite right but this is a guy learn the right lessons so when I'm coaching a first-time CEO and i'm the CEO coach of a couple guys now you know i'm looking for someone who's sitting there going hey i not only want to do this to win and be successful but i want to learn i I want to do this better than no one no one walks in and says I learn from my failure I hope I'm successful I mean you let it go and say hey I'm gonna be successful I want to win failure is not an option but failure happens right i mean you know it's bad breaks that mean but but here is the key less I tell this to all of the entrepreneurs I work with you will not be successful if you're making mistakes that were made by those before you if you make novel mistakes you're in good company right and so only ever make a novel mistake I made a good example this is one claw and I started Chris law and I started aggregate knowledge aggregate knowledge was the original business model was around recommendations and there were dead bodies in front of us there was net perceptions there was fire fly and she was in the office this morning with Yazdi one of the founders of [ __ ] cast with it man yeah so predictive analytics residi what did we do we went out and we I flew out and met John riedle University of Minnesota who was the founder of net perceptions I dug up yes d i got these guys on my advisory board and while aggregate knowledge was not successful in the recommendation business and pivoted into the data management thing we made novel mistakes we did not repeat the mistakes of met perceptions and firefly and so i think that's an important important lesson to an entrepreneur if you're going into an area that has dead bodies in front of you you better research them you better know who they are you better know what happened and you better make sure that if you screw it up you at least screw it up in a way which none of us could have predicted yeah that's the only way you're going to get a hall pass on that well let's talk about talk about some of the hot Renisha of activity saw so you're in that sector where you're feeding the seed the super angels in the first rounds early stage guys and it's a good fit what about some of the philosophies on like the firms out there there's of this to this two philosophies I just taught us to an entrepreneur here you met on the way out a street speaker text and there at seven you know under a million dollars in financing hmm series a yeah and then you got in the news yesterday color 41 million dollars building to win magnin flipboard a hundred million dollars i got this is these guys that we know i mean there are yep our generation and a little bit around the same time and certainly they have pedigree so remember the old days the arms race mentality right when the sector at all costs right that's kind of what's going on here i mean some of the command that kind of money there's actually an auction going on what do you make of that I mean bubble is an arms race so so rich Melman inside a bullpen de tu fascinating analysis he looked at the full portfolio of 28 took about 20 of the best super angels by the way the super angles are all different some are micro vc summer buying options etc so so first off super angel is a weird word but it's everybody from Union Square and foundry on one side first round and flooding but any take the top 20 or so of these guys and look at their portfolios what's amazing about their portfolios is the unlike 10 and 20 years ago in prior tech bubbles there are not 20 companies doing the same thing when you categorize them yeah ten percent are in ad tech ten percent our direct-to-consumer consider but like forty percent are one-offs that is this is I think one of the first times in the history of venture that forty percent of the deal flow is a one-off unique business idea that there aren't 30 guys going to do and I think that the importance of that to what happens in this next stage of the tech boom we don't know what that means yet because back in the day well we need to just we're venture firm we need to disk drive company okay so your venture firm you've got your disk drive companies and I'll 20 venture friend knows if drive out and created the herd mentality everyone talks about with venture yep mean I was an opponent on a talk on here in the cube and I don't think I actually put in a blog post but I called the era of entrepreneurship like with open sores and low cost of entry with cloud computing and now mobility the manure of innovation where you know in the manure that's being out in the mark place mushrooms are growing out of it right and these you don't know what's going to be all look the same in a way so how do you tell the good ones from the bad ones so it's hard right so you have a lot of one you have a lot more activity hence angel list hence the super in rice so so the economics and the deal flow are all there the question is how do you get them from being just a one-off looked good on paper flame out the reality yeah well look in my opinion seed stage investing is about investing in people and I think when big firms trying to seed stage investing there's an impedance mismatch a lot of times because they want more evidence they want to know did the market work to the management then this is this is an early stage venture and am I going to want to go in a foxhole with this person and in many ways the good super angels are instinctive investors who are betting on people that they want to be in the foxhole with and yeah did they do it before do they know how to hire people is the market reasonably interesting but guess what they're probably gonna pivot three times so wait a minute at the end of the day you got to invest in people later stage venture is not you can look at discounted cash flows you can look at mezzanine financing you can do traditional measures but if you're going to invest in two people who have a prototype and need five hundred thousand dollars you're investing in people at that point what do you think about the OC angel is I'm a big fan of and recently was added thanks to maybe out there but even though i'm not i don't really co-invest with anyone else other than myself maybe you guys would bullpen but but if that's a phenomenon you don't have angel list which is opening up doors for deal flow companies are getting funded navales getting yeah a ton of activity nivea doing great job with venture hacks i get y combinator which I called the community college of startups they bring in like they open the door and I mean that an actually good way don't mean that negatively I mean they're giving access to entrepreneurs that never had access to the market right and now you have Paul Graham kind of giving the halo effect or thrown the holy water on certain stars and they get magically funded but yesterday at an event and they're they're packed right I've heard from VC saying I'm not invited because I didn't wasn't part of the original investment class so it seems that Y comma day is getting full yeah so do you see that you agree is there will be an over lo y combinator you know kind of like I've TED Conference has you know Ted they'll be you know y combinator Boston little franchises will be like barcamp for sure I mean look and look at techstars they franchise they'd I was over there with Dave Tisch in New York there's TechStars New York after those TechStars older in techstars seattle there is no doubt in my mind that right now there is an over investment in the seed stage meaning that there is a little bit of a seed bubble going on that's not necessarily bad though because in terms of raw dollars there's not a bubble yet Rory who's over at rafi it smells like a bubble it looks like a bubble but when you look at the mechanic when you look at the actual total dollars it's not a bubble rory who has a hinge recent Horowitz been said that that it's a boom not a bubble yeah so don't be confused it looks like bubbles and booms kind of look together the same right I actually I'm not quite sure I had the exact data right but here's the quick summary if you take a look at venture capital investment as a percent of GDP historically it's been something like point one percent of GDP in the bubble back in 99 it went to one percent something like it went 10x higher right now we're still at point one percent but since it's very much centered around the seed stage investing you see this frothiness in the sea but until that number goes from point 1 percent of GDP back up to one percent there's no real bubble because the tonnage of money hasn't come in yet and so so it's starting but this is what a tech boom feels like the early stages are excitement and lots of ideas and lots of flowers blooming and then the big money comes in because John I'll bet you're your brother and your sister and your mom haven't invested in a tech startup back in 99 video there's no public market that supports seven in a way that's a good and bad star basement yeah there's no fraud going on and most of the companies that are out there whether their lifestyle business or seed or bullpen funded are actually generating income the entrepreneur he has any earlier Mike was saying that he could a business deal so people are kind of like saw the old bubble and said shoot I don't want to do that again I gotta have at least revenue right and so companies didn't seem to start out with cash so you know that because you invested it but you know Pincus was getting some cash flow in the door from day one that's right that company was company was profitable the first day it started basically so talk about you know so I'm with Paul Martino by the way with bullpen capital entrepreneur wrote the patents on social networking which he sold the cisco when they sold the company now with bullpen capital huge dynamic you're a company out there this is exactly the positive dynamic you want to see because mainly you know dave mcclure jeff clavier mike maples have been kind of getting their butts handed to them in the press about super angels not having the juice to kind of go anywhere and it's been kind of a negative press there so you know this is the kind of void that's been filled by you guys to show the market that look at this there's a road map here so even though that the McClure's and clubs don't have big funds that there's a path to follow on financing so that the vc's can't shut them down and i've heard some pc say that so a lot of traditional venture guys would like to say that you know this little disruption we nipped it in the butt and it stopped after the seed stage but that's not the history of disruptions the history of disruptions are they start from the bottom then they get ecosystem support and then they grow and they disrupt the incumbents and I think we're halfway there so so the Angel gate thing that Arrington reported on was interesting because you know essentially what happened there it was a lot of him fighting Ron Conway I was not happy you can't be happy about competition I mean this is competition that increases prices right so you know in the short term prices have been inflated on valuations true or false that's true but but but I think I think the whole way angel gate was reported was absurd the most Pro entrepreneurial venture people perhaps in the history of the business are the guys who were supposedly at those tables I mean mike maples Jeff claw VA josh cop and Ron Conway fired his guy that was there I I understand suppose again suppose a key are right these are the most Pro entrepreneurial venture guys in the history of the business so I think that turned into something that it never was yeah well I mean that's the thing you know good for content producers who want page views I got to create some drama and you know as you know SiliconANGLE doesn't have any banner ads on our site quick plug for us we are motivated by content not page views so thanks for coming in today no but seriously I mean there's a there's a black cloud over the super angels has been since Angel gate I've heard privately from VCS that super angels it's been kind of a scuttlebutt they're misaligned just rumors I completely overblown and you know their business model threatens the incumbents and you know someone needed someone needed a piece of fodder to start a you know start a techcrunch discussion right there's no doubt that the market is need in need of a new ecosystem for the early stage because individual angels traditionally were wealthy individuals but now you have people with more experience like yourselves and entrepreneurs from google and facebook etc coming out and doing some things okay so next topic more on a personal kind of professional note k last final question is I know you got to run appreciate your time you're a technologist a lot of folks don't know that you're hardcore computer science guy and our model southern angles computer science meet social science right in your wheelhouse so with that just kind of final parting question what gets you excited technically right now I mean I'll see you have roots in both comps I and social Iran Zynga's early investor roster you got a bullpen capital you're looking at a lot of deals outside of that you as a computer scientist geek mm-hmm what gets you jazz what do you see in the horizon that's not yet on the mega trend roster that kind of you can't put your finger on it truly we might really get a good feeling well so I think you'll be disappointed with this answer because I think it's now cross the chasm to start being one of those mega trends it's called consumerization of enterprise and that's now the buzz word for it but what is it really mean and why do I think it's for real look you've got cool self-service applications for everything you can go do home banking by logging into a portal you can go to an ATM you can go do these things but you know go bring a new laptop into your big stodgy fortune 500 company and you know it's like getting a rectal exam right you know we got to install this we got to give you this private key yet that's TSA it writes like going through TSA exact idea that IT inside of big fortune 500 companies is going to stop being this gatekeeper to new technology I think look how long do you think it'll be until pick your favorite fortune 500 company the IT people know how to deal with the ipad 2 but how many people bought an ipad 2 into the off already everyone and so this to me is going to be the big next deck the next decade are going to be self service offerings for the enterprise getting around a very frustrating gatekeepers inside of you know the IT department etc and that's going to lead to an awesome boom of everything from security to auditing to compliance etc that's the convergence question Paul Martino my friend entrepreneur great guy venture capitals now on the good side helping the seed Super Angel micro VCS great to have you consumerization of IT that hits the cloud mobile social it's everything so that I was buzzword compliant on that great job great to have you know you're busy got to have you in again thanks so much for time that's a wrap thank you very much great thank you John

okay we're back at SiliconANGLE comms continues coverage of vm world 2010 in the cube with a discussion with venture capitalists who are investing in all the next hot startups software companies infrastructure companies we all know three par two billion dollars is big big wins out there and data domain was a big acquisition and we're here with three venture catalyst to my left is charles beeler from El Dorado ventures and he's done a bunch of storage cloud deals Pete sonsini from NEA and ping li from accel partners so guys welcome welcome to the segment so first question we just go down the line real quick on a scale of 1 to 10 how would you rate the overall investment climate for startups in cloud startups the cloud I'd say pretty close to seven eight nine you know the negative right now is a little bit more around the funding environment than the opportunity for the companies and I think you as venture guys you really have to go to look past that and see the opportunities for the businesses and fortunately got three groups here of capital put to work so you can actually fund these things it's the biggest challenge we're seeing out there right now great Pete yeah i agree i mean it's it's definitely 89 if there's a hot sector or enterprise related it's certainly cloud cloud related you the backdrop is relates to overall venture climate you know casa paypal and affects the investment in this area a little bit but everybody knows this is a big change the ecosystem is creating tons of opportunities for new businesses and so everybody's very focused on it really minute they're missing it yeah i agree i think in terms of areas of excitement enthusiasm with entrepreneurs it's definitely nine or ten i think it it's not just on the infrastructure side as well i think if you look across you know our portfolio i'm sure it's the same with Pete and Charles you know three quarters of the companies are actually built on cloud infrastructure now so there's no more servers or data rooms at any of the startups and we work with so i think there's up and down the stack from the applications down the infrastructure there's a lot of enthusiasm for what the cloud can bring great same same same process right down the line and another question is how do you guys evaluate a company these days because it's so easy to fake out a VC if they're not smart about throwing some clouds stuff up there making it look great at a rails front end doing some voodoo I mean is there a new model of evaluating an entrepreneur or startup the old days it was hey what's Stanford at a PhD look at this unique IP with a patent now it's a really fast Market things going crazy how do you guys look at deals and evaluate entrepreneurs and startups I for me it still comes down to the team and I don't really care where they went to school I care what they know about the market they're going after you know to the extent they're going they're going after something in virtualization and cloud layer storage the pedigree matters a lot at what are they done before that shows they understand the market they're going after I'm hoping that the operators we back know a lot more about the market they're pursuing that I could so if they're really good at it you know i'm not going to keep up on that piece of it i just want to make sure they understand it to understand how they fit the ecosystem you can drive it and the stage we invest it really is all about the team because good teams have good ideas and they know how to pursue them he yeah I mean you can be aware of the trends but you don't know everything about everything there's no way you possibly can so you you try to narrow it down to you know generally speaking it's its people its markets its business traction is technology I think at the end of the day it comes back to those same four things most the time and everybody's got their own personal filter as to what they like to optimize around I think for the deals that that will do in one of those four categories you know and others i think one of them really has to be out off the charts to grab your attention to want to do the deal but i think it still goes back to you know people technology markets and and the passion behind the entre nerd is the ant really have that privileged insight and the opportunity they really know this market and this opportunity and how to exploit it better than everybody else and being the gauge of that is you know at the end of the day that that's probably the most important thing because as I say you're not going to know you're not going to know everything everything about every and you can't expect you anywhere close to that so you try to find those those individuals that really do have that key in so it inside the exploited opportunity so that's how we would look at it today thank you yeah i agree i think the fundamentals of what we look for in a company hasn't really changed i think the sectors and trans as you as you noted have changed a lot and i think there's still the constant tension that we see between kind of features and actual category defining breakdown companies but i think that is a you know a lot of times when you see a new market like cloud computing the first wave of a lot of the ideas are more features or trying to evolving existing platforms and then the next generation of the emerging ideas are are going to be more kind of the category platform type opportunities so trying to kind of parse out which one is which is not an easy task is something we spent a lot of time on I think the other big changes capital efficiency I think a lot of these companies are able to get to market with a lot less capital because the tools and resources whether it's open source products or you know things like ec2 s3 really change how companies can get to market much faster so that's something we do look for if you can build it and get market faster let's see it as opposed to building for three years and then created the markets there I mean capital efficiency is a great entrepreneurs of great at bootstrap so they love clouds okay I can do a data center for 20,000 in three countries yeah so let's talk about that i mean let's a couple efficiencies one thing and you guys provide a lot of funding but now momentum has always been the thing you could be capital efficient and never never make the market so it's about momentum where do you guys see the most momentum in cloud cloud related things we have end-user environments with the beady eye stuff at some desktop mobile obviously in the middle where that model is changing and an infrastructure that network at the plumbing storage what do you guys see the most momentum and most fertile for entrepreneurs to stay a safe harbor if you will do you see that anything out there I mean clearly the place you're going to see the most momentum is the closer you get to the end user of a product that if something's getting adopted quickly and wrapping quickly and if you're hosting that Klaus a lot easier to get deployment continue to deploy and meet that scale I think as you look at more the infrastructure the guts and things that are going on it we're pretty big believers that while virtual desktop is still early in terms of Enterprise usage we think it's at the point now with technology has evolved far enough that it's ready to go we made a bet and recently we just we think that's a market that's starting to gain momentum and when it happens we think will happen quickly I think in a lot of these other areas there are great opportunities but in some ways it's still company-specific if someone really figures out how to take advantage of a technology and leverage something whether it's software infrastructure Network it's more the company getting it and getting it right and you're seeing that today and you mentioned some of these acquisitions it's companies you figure that out understood how to get that wave and catch it and hit it at the right time yeah I mean I think that you know you want to get it you want to get in before the momentum hits I mean that's really where the money's made in venture capitals is getting in ahead of the ways before they all head and you know so so there's certainly exciting there's plenty of excitement around the cloud to spread around and and you know you point out what year as you like the best which ones yes I think that you point out platform as a service and private clouds there's a lot of excitement around there right now I think it's because it's you know it's kind of open field it's is there's huge growth prospects ahead of it there's no real dominant player and the venture investors mines kind of go why you know kind of go crazy thinking about where you know how big this opportunity could be without really that many proof points category not for him you're saying categories not formed yet one two and three I'd approve you know it with private clouds taking private class or as an example there's clearly a lot of interest and talk around IT organizations about private clouds people are talking about it how many deployments are there there's actually you know not you know not commensurate with the hype and so you know you have to discount that back and so you know there's still a lot of interest there's there are always going to be interest from venture investors and things like that but the end of the day you know you're taking a leap of faith that i materialized and something like that it's just not there yet yeah well you had data domain in your confirm a date of domain acquisition that was a big exit three far just went when or going to HP it looks like so you know there's big deals to be had I mean big big meals you know there's you know as it relates to virtualization and cloud is really shaking up the entire that we all know that we all know it's it's a big change in all these areas are presenting huge opportunities for new businesses and really novel technology to come in and capitalize on them and even though traditional areas like storage which is you know storage I mean it's it's boring old storage but no it's crazy yeah there are the rules exactly but it's crazy things happen and there's a lot of innovation be had as it relates to cloud and yeah Charles knows with companies that he has this thing so paying you you're on the board of an investment that you have a cloud era which we were familiar with their friends of ours in Palo Alto they serviced the Hadoop platform and it's an open source project commercializing it but you have big cloud players out there that have a product that they don't sell they just use like Facebook Google Amazon so so there's a whole nother world of big data and data is the big themes in this conference and the world what is your view of that trend of data the tsunami of datas Michaelson would say at Cloudera what is your view on that yeah I think it ties really well into a lot of the conversations I think you got your having around virtualization and cloud computing because if you look at what cloud computing is doing its actually reinventing the entire computing stack from it was there was mainframe whose client server there's web and heathers cloud computing so I think there's opportunities that all the layers of the stack i think what cloud era is focused on is around the data layer and i think what you mentioned that the Big Data trend is one that one could argue start in a web world because they were pushing the envelopes of data when Facebook Yahoo and google were collecting click streams and then trolling the entire web to figure out you know what's what's relevant to two different people i think that amount of data has really pushed the envelope with today's database technologies i think what cloud air and Hadoop is trying to do is change the boundaries of what data can do and what database technology and data management technologies can do so I think one thing we've seen a clatter is everyone's got big data we most of the customer we talked to always start off with a terabyte before the end of the conversation they find it petabytes so the reason why people didn't have all the data back place is because they were throwing them away there's no cheap efficient way to store and derive value from semi-structured or unstructured data so they were kind of going to waste I think now with technologies such as a dupe you can really change that that paradigm around and you can do analytics you can do a lot more data data management capabilities you couldn't do before it's hard to think of a better guy than Michaelson to run something like that yeah he's a good he's a good guy great guy the question about scale and startups dynamic so let's talk about from a starter's perspective they're out there they can deal with in Super Angel has been in the news we've covered that in SiliconANGLE you guys are venture capitalists and you deal with big deals if ficient to get started off the ground what advice you have to an entrepreneur out there they want a good bc they want to have someone's not going to screw them over hey what someone is going to grow with them help them navigate and reduce their risk as well and go to the market be successful so what advice do you have to offer up there about navigating the I need to get financed I have a prototype I'm going to fill this white space of a VMware platform or do this and that what was your back was your eyes by speak I'm sure we agree that you just go to El Dorado start there do your series be with one of these guys a lot of ways it really depends on what your business is we talked about capital efficiency but if you're building a storage solution if you're building complex technology it's going to take 12-18 months to build and get to market you got to be funded to get through that point the hardest van sings today are the series b financing for these companies if you don't appropriately find your company through the series a give yourself time to get to market get the product out have some customers work with it it's going to be really hard to raise a good following financing around as an entrepreneur you suffer the most frankly because you've suffered dilution from that more capital efficient deals you know and really smart super angels say the same thing the best deals they've ever done they may have done it on their own initially but most of those over time taking of capital that to not raise venture money would be a very challenging thing to do it to really build it a profile you're saying if you want to build a real big business go to a serious VC absolutely and if you need to start if you want to start small at few million bucks because your idea only takes that to start great most of the companies that we're seeing the cloud space are not companies or didn't get to profitability on two million dollars and as an entrepreneur if you really think that's going to happen you should look very hard to your business and look at all the comps around your business and see how many of them were able to do it and if none of them were you guys question what's so unique about our model it's different or show to be planning to get more tableau most most most hunters don't know that tend not to do follow on financing so that if it's an intensive deal that needs more cash they may not pony up more right I mean I would just add that you know when you're as an entrepreneur looking at a venture for an angel you need to pick a firm that is going to have some money to me to be there for successive financing I mean people don't knocked out of the park every time after their first financing usually they have successive deals and is it up and down drive so you need to have a firm that obviously has money and as deeper as you know there's obviously constraction value where they was very well there's certainly value at the point I was making is that there's contraction in the venture business right now and so there's a lot of pressure on firms you aren't can be able to raise future fun so you got to feel good there's going to be funding there for you down the road is obviously obviously very important and you need to feel good about who you're working with obviously and yeah I mean that the value add is important i mean the network that the firm brings the experience they have in building companies is actually we feel like it's worth something we've we've done that before and you gotta bail you got a lot of success and we think that that can helps i mean we have a bench of entrepreneurs they can you know speak on behalf and hopefully say the same thing but that's the way we look references are a big thing right you're saying but a big part of that value added speed said is having access to additional capital from your initial funding sources knowing that when push comes to shove if things are going well but you're having a hard time raising money out in the market you can come back to your existing group of investors and continue to scale a business the way it needs to be scaled or should be scaled to be successful and that's that is a component of being value add to those companies being there when they need you to really support them through those time paying you work for a blue chip in Excel there you know earned the reputation over the years I say the facebooks a big investment and they got slew of other great investments and you've got a good tracker green cloud what do you say to the folks out this a no just go Super Angel there's some dilution not just in capital but reputation don't you think you know I i think the angels are or the super angels are an important part of the ecosystem for startups I think we work with a lot of angels we have angels in cloud era we have angels a lot of our companies so I think they definitely provide an important you know segment of the creation of startups more and more today than ever because the capital just to fund no I think I think they provide value add just like just like a VC well I think for me it's more the entrepreneur's to decide what they want and where they want the company to go and I think and figuring what the business needs should be able to help you figure out if you go with angels you go with VCS you go with both no combination you bring people at different times I don't think there is there's one formula but I do encourage entrepreneurs not to feel there's only one way to do it there's probably more than one way to do and take the time to figure it out i think the most important thing is get to know the people that will be investing in your company spend the time to get to know the VC we're all very accessible we return emails phone calls whatever it takes and that's true for the angels get to know everyone and I think that will help you make the right decision I saw a quote recently that said it's very hard to get an investor to come into your company but it's ten times harder to get them out and in thanks point me you got to get it right because you know they can absolutely kill a company if you get the wrong ones in yeah and you run out of cash too you're at a business I have that too somewhere I've heard it quite never seen a quick get go to business we have money in the bank Pete guys can you guys comment on facebook what is the Phenom of facebook obviously it's a cloud play for themselves it's a huge platform growing at scale I know ping your company has the big data business and trying to figure out clustering google has that but all my facebook and particularly growing very short history is that a cloud play for enterprises to look at is it a unique data point is that cloud any any takers on that question I'm going to look at the expert the last time I sat on a panel if King was three weeks after they did the initial investment in facebook and I still couldn't get in because it was only for college I mean they are operating a scale they use our open source or writing their own code it is a cloud kind of play yeah I mean I think you know we've had a lot of conversations with different Enterprise architects who are curious in terms of how Facebook has built their data center I think whether it's you know Facebook Google or Yahoo or Amazon it's it's very interesting see how these internet data centers are becoming thought leaders in terms of where some of the new groundbreaking technologies are whether it's in the storage layer networking or compute layer you know Facebook's an early adopter of a lot of these technologies just because they were pushing the boundaries of what can be done with you think it's a proof point though of what as a road map for the enterprises to look at or is it just a unique one-off I I think it is I think you have to be careful about just transplanting things that were done for a consumer web property and all the nuances that you need for an enterprise environment but I think absolutely just like a lot of consumer companies like Facebook to use enterprise technologies right so i think it's just an evolution of you know what they're building will be adapted i think a lot of private cloud stuff that we're investing in is very much borrowing from a lot of the clinical public cloud understandings and then bringing that to an enterprise environment so you talk to the enterprise IT guys and the cios are saying to the architects we want one of those amazon things inside driving yeah that's what they're saying right so I think I think there's a I think that's one sure i think the other trend is the episode we don't want them to have it we don't want them happen right and any other things applications are getting rewritten for different ways in other words people are building applications for ec2 and s3 that our web-based cloud type applications as more of these type applications get built they're going to end up in the enterprise and then the infrastructures gonna have to adapt to the application so i think that cycle just keeps going peep peep for you question for you you've been in the evil attic space in the enterprise obviously an IT was a sector that kind of went dark from a venture perspective seems to be coming back with cloud how are the enterprise IT changing as a marketplace when I say market I mean like a market for entrepreneurs what what do you see that's different now from when you were in the enterprise and you were to HB you worked at some startups in the enterprise it's changing what a what do you want him you know when I was I mean before you're in the venture you know six seven years ago the whole social media you know consumers ation of IT was not really happening so that's a huge change that's impacting enterprise IT landscape but it's it's got you know IT executives running around with their hair on fire and how to deal with so that's in the world of IT that's a huge change since I was in the business eight or nine years ago and it's still you know it's a nun saw there's nobody knows exactly how you know what the right answer is with all these these iPads and so forth entering the world so at the same