>> Announcer: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. >> Hey, welcome back everybody, Jeff Frick here with theCUBE, we're in our Palo Alto studios today on this kind of ongoing leadership conversation, reaching out to the community during these crazy times, we're two months into the COVID crisis, and we're excited to have two of our favorite guests, one is a frequent guest, Greg Sands, he's the founder and managing partner of Costanoa Ventures, Greg, great to see you. And he brought along Martina Lauchengo, also from Costanoa, Martina, great to see you, is this, I think your first time on theCUBE, right? >> This is my first time, nice to be on, Jeff. >> Great, and Greg, great to see you as well. >> Great to be here. >> So let's get into it, I mean, part of this conversation came from a lot of efforts that you guys are putting into really getting information out to the community, and I think if there's a silver lining and there's a couple here and there, that have come from this, is that everyone is really trying to help each other out. So you've come up with something you call virtual office hours. What is that all about, is that new, or is that just kind of a greater emphasis now that most people are working from home? >> Well, we've also always done a great deal of work with our portfolio on how to deal with changing times, how to graph, go to market, both sales and marketing onto what are often product-led and founder-led companies, and in a time of crisis, we felt like it was important to share that knowledge more broadly, and to set up a venue where we can interact with the broader startup community, and hopefully in the process of doing that, we're useful. >> I just saw a quote I think today or yesterday, from Jim Hackett, the CEO of Ford, and it was "I didn't have the playbook for the global pandemic," in terms of preparation and being able to pull something off the shelf to help work through this, so as we've gone through mid-March, just this immediate, full stop, unanticipated light switch moment, now we're two months in, what are the specific actions you've been giving to your portfolio companies, and how has that changed over the course of the last 60 days? >> Well I'll take a first stab, and Martina, feel free to jump in if you've got additional thoughts, I think the first piece, going back, six, seven, eight weeks, was we all had that hair on fire moment, where you just have to understand where you are. And so I think that sense of situational awareness, and how does it affect your customers and your market, and figure out if the basics of the business, including revenue rate and what's guaranteed and what's not and expense base and planned growth trajectory are any of those foundational elements what you thought they were going to be, and readjust them, and re-plan, so almost every company went through two or three complete planning cycles, trying to understand where we are. And I think also trying to do that with a sense of authenticity and transparency and humanity, 'cause you're dealing with a company, and people's careers and people's jobs. So now I think we're more at the place where we understand the foundation, and you can more reasonably plan for the future. >> Yeah, I'd say I think what I've observed in our portfolio is people are through the shock, and that's also true for all of the customers that they're trying to reach out to, and the big adjustment is, what does our new normal look like? Jeff, before we started we were talking about how everyone has moved digital and virtual, so people did that initially because they had no choice, but now they're looking at the data they've been collecting saying "Gosh, should this mean that we should no longer do "physical events because we're having five or 10x "the amount of registration that we did before." Our digital channels are way more successful than they were in terms of outreach and awareness raising, and so everyone's looking at this moment, and saying "How should be adjust our new normal, "even post-COVID era, and do things differently "as a result of what we're learning from this time "where we have to be constrained in what we--" >> Right, so Greg, you had an interesting quote in an article recently talking about the harder challenge is going to be for people that are on this blitz scaling run, and you've talked about there's kind of two paths, there's growth at all costs, and then there's growth within a reasonable plan, clearly, if you were growth at all costs, and you were Uber or Lyft or one of these types of operations where your revenue just got turned practically off, really significant challenge, so as you look at it from an investor point of view, and what is a good rate of growth, what is the way to build a company versus this hellbent hair on fire, grab global market share at absolutely no, just spend spend spend spend spend? >> Yeah, and so of course this is independent of the pandemic, I think it's the case that there was this orientation towards blitz scaling, towards we're going to grow as fast as we can, and one of the things, if you just think about a biological metaphor, growth is expensive, growth takes a ton of capital, a ton of hiring, a ton of on-ramping, and the like, and you do all of that at very rapid speeds and you tend to cut corners, have people poorly trained, drop balls on the floor and the like, so I think the, generally speaking, our experience is that our portfolio companies, partly due to our guidance, partly 'cause we've selected each other, have been, look, we've got some very fast growers, we've got companies like Alation that have been here a lot, that have created brand new categories, but they've done it with bounce, and they've done it efficiently, and that's always what we preach, it's always what we've believed in, and I think our companies are in much better shape as a result. Martina and I both grew up as young athletes, and one of the things that you learn as an athlete is you got to be balanced, you don't know if your next step is going to have to be forward, back, left or right, and you've got to have all your sensors out and be paying attention, to figure out where you ought to go, and if you're all in one direction, you can only go forward. And when the environment changes, you're toast. >> Yeah, it's really wild to see, 'cause who ever plans for literally a binary turnoff of revenue stream, and we're seeing it in hotels and in obviously conferences and airlines and a whole bunch of industries, so it's pretty challenging. But for a lot of people, business still goes on, and Martina I want to jump into it with you, 'cause you've been a marketer in tech for a long time, but man oh man, the conference itself, the physical events, whether it be a big giant one like AWS re:Invent which had I don't know, 50,000 people, it's going to outgrow Vegas, to smaller events, those are no longer an option, yet people are still delivering products, they still have messaging to get out, they still want to touch their community. How are you kind of looking at the new normal around marketing, both for the portfolio companies but also a little bit of a broader view? >> So I'll start with the broader view, I'd say in general, Dreamforce is canceled, AWS, I mean all these things have shifted so massively and all the major companies have simultaneously made that shift, and I think one thing that they are all seeing is, they are getting a lot more registration, they're getting a lot more in engagement, this happened at Atlassian where, they rapidly made the shift to virtual, and what they saw was because they had that many more people participating in events, that they had a much bigger social bump, because that many more people were talking about what was happening simultaneously, and it also became this virtuous loop, where more and more people were talking, it was creating this intrigue, where people wanted to participate and see what was happening. So, I think people are looking at that and saying "Well how does that affect our business, "and how does that increased potential "for evangelism actually positively convert towards "a future customer, or more people talking about us "in a positive way?" So this is where they're looking at what they've put out in market and seeing what they should learn from that and I'd say that's the number one recommendation I have for all of our companies is, look at what the data is telling you, and trying to extract what your lessons are about this to what your ongoing normal should be from a marketing perspective. >> Yeah, it's such a good tip, there was so much focus at the beginning of this about what you cannot do in digital, you can't have the hall room chat or you can't have the water cooler chat, but on the other hand there's so many things you can do in digital that you can't do in the physical. And by separating content generation versus content publishing, if you will, and then content consumption, and those no longer have to happen at the same one hour window where there's an available conference room for a breakout session at the Sands on Tuesday at six, that I can't see 'cause I want to see somebody else's conference Tuesday, I mean there's so many things that you can do, and kind of just democratization of the access to the conference, if you don't have the means, the time, or just the ability to get on a plane and fly to Vegas or to New York or San Francisco, so there's a lot of stuff you can do in digital that's different, it's just not the same as the physical space, what are some of the other things that you're finding that are kind of unique and novel and actually really great? >> Well, one thing that you talked about is it relates to events, it's not just the attendees being there, it's also the talent. A lot of times you would want talent, but they're not available because they have a conflict or they can't accommodate that travel, a guy participating in a conference that's based out of London, and they are having people that it doesn't matter what time zone you're in, because they're like "Oh, you can prerecord it, "you can do it live if you choose," and so there's a flexibility that just wasn't there before, certainly as it relates to events. But in terms of novel stuff, people are reexamining things that they might have charged for in the past, so one company in our portfolio used to charge for their certifications, and now they've made it free and they've had over 1000 signups in the last couple of weeks, and so that was a small program that they ran and it's now the single largest generator of new leads for them, because they reexamined it and said "Well what assets do we have "and how can we use them differently?" And so I'd say it's not so much that people are doing monumentally new things that they haven't tried before, but they're examining the quiver of assets they have at their disposal and they're saying "Well how can we deploy them differently?" And they see the two things that are really bubbling up are you just have to do things in an excellent way, number one, and number two, you really have to do it in that much more empathetic way. >> Right, right. And Greg, I want to go back to you, go ahead. >> Jeff, if I can add two things, I think there are some things that it's worth noting that digital is uniquely good at. So one of which is inferring intent, which you don't necessarily get in the context of conferences, and the second is that as companies have dug deep and realized that they really need to take full advantage of their assets, one of the things that we find people really trying to do is to marry first party data, their own data about their own customers and their own interactions, with third party data which includes that intent data, and when you combine those together in a business to business marketing context, you can really do extraordinary things, and many companies have been under-optimized on that because they could rely on going to events and traditional face to face marketing activities. >> Well, and to me there's so many things, I mean conferences were designed in an age where there was no telephone, and you sent letters, and the speed of communication was weeks, and so that's how you had to get people together, but today, 2020, when information flows, it seems so waterfall to me to kind of squeeze everything in, especially for a big company, into three days in Las Vegas, in terms of all your product announcements, all your partner announcements, all these things, it seems completely against the trend of more of a DevOps world, which is if product group A is ready to roll, why do they have to wait to that date, and wait for product B and everyone else, not to mention that if you're some esoteric cool thing that gets lost in the sea of product announcements and press releases and events, does it really make sense? What we're seeing is there's certainly an opportunity for what's called a rally moment, whether that's a keynote or introducing a new CEO, or we want to have this moment where we have singular focus, but as soon as that's open, let the content be free, let people find what they want, when they want, and to your point Martina, if people want to self-organize, you can actually have almost infinite long tail sessions, if you give people a platform in which to organize, versus being this one way conduit of information which is the old way of working, but not really the new way in which we find, consume, and learn about things in 2020, it just seems so antiquated when we actually take a step back and think of how do we get our information today, and it's not wrapped up in one big giant splash moment. >> Well Jeff, I want to pull on a thread a little bit that you just brought up, which is that the old way of doing things, and I'd say old average, just there's no space for it right now, so I'm going to read through five things that were in my inbox this morning that went into the auto-delete pile, which is what everyone does every morning. "Tomorrow's webinar," "Only three days left, "have you registered yet?" "This week in review." So those were the bad ones that went to the automatic delete pile, that's the average run of the mill stuff that all of us get every day, and I hope everyone that's listening to this stops sending them. And here's the ones that stood out, "Why every startup CEO needs a chief of staff," so something that was specific, it told me more concretely why I should engage with what was being sent to me, it didn't tell me if it was an article or webinar, but it engaged me with content, and if you just look at Netflix as a platform, as an example of how they're very very content-forward, and they're trying to find what specifically is going to get you engaged, all the way down to the thumbnail level, that's what we are needing to do as marketers, where we're taking advantage of the knowledge that we have of our customers, where they are, and trying to create genuine connection with whatever it is we're trying to bring to them. >> With data, right, and you can AB type and all the stuff that Netflix does, it's so funny to me, the answers are all around us, we're just not looking in the right place, but I want to shift gears a little bit for marketing and talk about leadership, we've been doing a lot of these around leadership, 'cause leadership is so important. And really the uncertainty, more even the tough times, I think it's the uncertainty that really challenges people, and you mentioned something Greg, earlier, about really the transparency, and I think there's so much to be learned in terms of being human in your leadership, showing vulnerability, admitting, I'm a little scared too, I don't know what's happening, no one has been through this type of inexperience before, so from just a leadership perspective, again, what are you sharing with your portfolio companies, how are you advising people who are in this position, because they're probably nervous and uncomfortable as well, to lead these teams and to help them through this time of uncertainty. >> Well, it's an amazing and uncertain time, and frankly everybody is challenged by it, nobody's been through it before, even those of us that went through 2008 and 2000 and 2001, the ecommerce blowup in 9/11, this is different, it has a different cause and a different set of effects. I know in my case I spent the weekend rereading Jerry Collona's book, "Reboot," which talks about leading from the heart, and leading with transparency, and leading with authenticity, and what we've been trying to do in working with our founders is one, listen, and be there, and be a support, and recognize that we don't know all the answers either, and so we're in it together. Second is to try to give them the confidence and the room to do that in leading within their teams, and then the third is to focus on a couple of things that I think are particularly important, which is as I said before, situational awareness, you got to understand where you are, and the second is focus. So one of the things that everybody is finding, and we find it true with people's customers, too, hey, we were going to do five things, now we're going to do two. So companies have got to narrow the scope, they got to figure out how to be in the top two for their customers that have to get done. And so you got to do that from a strategic and execution perspective, you got to lead your team to do it, and in order to rally around it, people have to understand the facts, they have to trust you. And they have to know that your heart's in it. >> Yeah, it's almost interesting, the fact that everyone is separated, we have to communicate more, we have to communicate more frequently and we had Darren on from GitLab talking about the variety of types of communications beyond just your standard staff meeting and project updates to things, like social things and happy hours and these things, so it almost feels like because we're forced into scheduled communication, it's almost happening more frequently because you have to make sure it does, then maybe some of the ad hoc stuff that might happen in the hallways are on a more informal basis. You find that happening, are people really stepping up the scale in which they're making sure they're touching base with their team members? >> I'm definitely seeing that throughout our portfolio, so people are doing things like scheduled game nights that would've been more ad hoc in the past, or specifically scheduling water cooler time, or one of our companies has been doing specific meetings and get-togethers of parents, how do you maintain your full time job and actually coparent or figure it out while your kids are doing whatever it is that they need to and being a part of home, and working at home, and so they've definitely scheduled more, but it's really been about acknowledging the whole self that is part of this unique time, and that everybody's in the same boat, I think that is something that is really unique about this is that it is a global phenomenon, and so it's not sort of like oh, this country or this state or this industry is facing this, all of us are facing this, and so to your point, Jeff, about what does it mean to be human and to connect, it is a time in which we are uniquely capable of connecting with one another, and we all have the same way to do it, I meet a bunch of new people every week, and now we all start off actually seeing each other's homes. Saying "Oh, what is that, what book are you reading?" And so it's almost an invitation to have a more personal connection and I've definitely found despite the fact that we're doing all these meetings virtually, I actually feel more connected to a lot of people than I would have normally. >> Law of unintended consequences, you just never know. So last topic to shift gears before I let you go, we're still in the business of investing, and as I'm sure you're seeing or starting to see, now that the shock and awe's kind of over, and people are starting to define new opportunities, basically, to reassemble assets, to reassemble delivery methodologies, to reassemble business plans, and I wonder, as you look forward now to your next wave of investments, assuming everything's medium settled with the current portfolio, how is your investment thesis changing a little bit, what are you seeing in kind of a rejiggering of assets and business models that are going to take advantage of this new normal, 'cause sure enough, I'm sure there's a whole bunch of people in garages right now that are building those companies based on this new normal that are going to be leaders down the road. What are you thinking of, how are you thinking about what's going to happen later this year, and in 2021 and beyond? >> So, we absolutely are continuing to invest, and so for quick context, we're seed and A up and down the stack of enterprise technology, so think of it as applied AI and the infrastructure that supports it, much of which is data and machine learning infrastructure, but also cybersecurity and DevOps, and I think for us, one of the things that showed up right away was this idea of, we're all going to work in more distributed fashion. And I think many versions of that were "Oh, we've got a new work from home app," or the like, and we haven't actually found that those are the difference makers, what we think is that these business processes that tie together application logic and data and analytics and a collaboration layer, like in Alation, so that you can collaborate on your data, you can collaborate while you're performing an absolutely critical business function, and what used to be tribal knowledge that was passed around in the halls is embedded in software, and cataloged. And so we're seeing lots of opportunities to do that, both in workflow context and in the context of data scientists and data engineers working on the data stack and developers in and around the DevOps ecosystem, that we think are really interesting and acknowledge the fact that you can't assume that all the people working on this application are sitting in the same building, and get to talk around the water cooler. So they talk about it in the application. >> I just want to add a little something to what Greg said in terms of the things that we're seeing, really the importance of data right now, people are trying to refactor all of our operating plans, they're trying to say "What is this actually doing to our demand," and so the accuracy of data and the quality of it is more important than it ever has been, and being able to do that wherever it exists, if it's frontline, inside of a dashboard, if it's cleaning up stuff that's coming out of a data lake, people are investing in that infrastructure right now because they have the capacity to, so that's a place where we've seen I'd say probably the least amount of change, and then the other thing that this has revealed are gaps in the technology infrastructure that wasn't available, so for example supply chain, being able to identify all the elements of the mask, or the ventilator supply chain. Those systems were massively disconnected and extremely manual, and so people are looking at that saying there are some gaps that still need to be closed in a big way with infrastructure and technology, and those are some areas that we're seeing very interesting and illuminated as a result of this time. >> Yeah, I mean to certainly, what we've been talking about really is just a light switch moment, in terms of digital transformation and whether that is working from home, which is probably the top focus for a lot of people in the short term, or whether that's in education, suddenly everyone from kindergarten teachers to professors at Stanford had to suddenly learn to teach online with absolutely no preparation, no time to think about it, and then up into the data layer as well, because it's just this ongoing democratization and now with distributed teams, you are forced now to make that data available to them, really as a process as much as an objective to get it into hands to do more things, so certainly a digital transformation accelerant, like nobody expected, there's no more time to prepare and plan, it's ready set go, now. So we see it over and over again. Well thank you so much for coming on, thank you for sharing the information, just kind of last point, one of the things that I think is so interesting about today's time is it used to be the power was held by the people that had the information. And really what we've seen, and what you guys support is now the information is infinite and it's everywhere, and you should be able to find it. Now it's more about who shares the information, who's a trusted source to filter, to find the right information, and who can I go to who I know's going to give me stuff that's relevant for me, and I think you guys have really shown time and time again that in sharing information and helping others to do better, you get this multiplier effect that you wouldn't get if you're just worrying about yourself, and I think it's such a modern way to think about empowering people, and as you said, it even makes you more powerful and more successful, so really a very different way than it used to be in terms of everybody kind of holding the information, and who had the keys, had the information, that's completely turned up on the side of it's head. >> That is absolutely right, and we're thrilled to be here talking about it with you today, thanks for your continued support of the community and trying to help good people get the word out. >> Thank you, thanks a lot. >> Thanks for doing exactly what you're talking about, which is getting the right information out to people so they can be better. >> All right, well Greg, Martina, stay safe, thanks for stopping by, and hopefully next time we'll see you in person. You're watching theCUBE Conversation, Jeff Frick here in Palo Alto studio, thanks for watching, we'll see you next time. (calm music)

(electronic music) >> Host: Live from Midtown Manhattan it's The Cube! Covering Big Data New York City 2017, brought to you by Silicon Angle Media, and its Ecosystem sponsors. >> Okay, welcome back everyone. We are here live, The Cube in New York City for Big Data NYC, this is our fifth year, doing our own event, not with O'Reilly or Cloud Era at Strata Data, which as Hadoop World, Strata Conference, Strata Hadoop, now called Strata Data, probably called Strata AI next year, we're The Cube every year, bringing you all the great data, and what's going on. Entrepreneurs, VCs, thought leaders, we interview them and bring that to you. I'm John Furrier with our next guest, Greg Sands, who's the managing director and founder of Costa Nova ventures in Palo Alto, started out as an entrepreneur himself, then single shingle out there, now he's a big VC firm on a third fund. >> On the third fund. >> Third fund. How much in that fund? >> 175 million dollar fund. >> So now you're a big firm now, congratulations, and really great to see your success. >> Thanks very much. I mean, we're still very much an early stage boutique focused on companies that change the way the world does business, but it is the case that we have a bigger team and a bigger fund, to go do the same thing. >> Well you've been great to work with, I've been following you, we've known each other for a while, watched you left Sir Hill and start Costanova, but what's interesting is that, I can kind of joke and kid you, the VC inside joke about being a big firm, because I know you want to be small, and like to be small, help entrepreneurs, that's your thing. But it's really not a big firm, it's a few partners, but a lot of people helping companies, that's your ethos, that's what you're all about at your firm. Take a minute to just share with the folks the kinds of things you do and how you get involved in companies, you're hands on, you roll up your sleeves. You get out of the way at the right time, you help when you can, share your ethos. >> Yeah, absolutely so the way we think of it is, combining the craft of old school venture capital, with a modern operating team, and so since most founder these days are product-oriented, our job is to think like product people, not think like investors. So we think like product people, we do product level analysis, we do customer discovery, we do, we go ride along on sales calls when we're making investment decisions. And then we do the things that great venture capitalists have done for years, and so for example, at Alatian, who I know has been on the show today, we were able to incubate them in our office for a year, I had many conversations with Sathien after he'd sold the first two or three customers. Okay, who's the next person we hire? Who isn't a founder? Who's going to go out and sell? What does that person look like? Do you go straight to a VP? Or do you hire an individual contributor? Do you hire someone for domain, or do you hire someone for talent? And that's the thing that we love doing. Now we've actually built out an operating team so marketing partner, Martino Alcenco, and Jim Wilson as a sales partner, to really help turn that into a program, so that they can, we can take these founders who find product market fit, and say, how do we help you build the right sales process and marketing process, sales team and marketing team, for your company, your customer, your product? >> Well it's interesting since you mention old school venture capital, I'll get into some of the dynamics that are going on in Silicon valley, but it's important to bring that forward, because now with cloud you can get to critical mass on the fly wheel, on economics, you can see the visibility faster now. >> Greg: Absolutely. >> So the game of the old school venture capitalist is all the same, how do you get to cruising altitude, whatever metaphor you want to use, the key was getting there, and sometimes it took a couple of rounds, but now you can get these companies with five million, maybe $10 million funding, they can have unit economics visibility, scales insight, then the scale game comes in, so that seems to be the secret trick right now in venture is, don't overspend, keep the valuation in range and allows you to look for multiple exits potentially, or growth. Talk about that dynamic, because this is like, I call it the hour glass. You get through the hour glass, everyone's down here, but if you can sneak through and get the visibility on the economics, then you grow quickly. >> Absolutely. I mean, it's exactly right an I haven't heard the hour glass metaphor before but I like it. You want to basically get through the narrows of product market fit and the beginnings of scalable sales and marketing. You don't need to know all the answers, but you can do that in a capital-efficient way, building really solid foundations for future explosive growth, look, everybody loves fast growth and big markets, and being grown into. But the number of people who basically don't build those foundations and then say, go big or go home! And they take a ton of money, and they go spend all the money, doing things that just fundamentally don't work, and they blow themselves up. >> Well this is the hourglass problem. You have, once you get through that unique economics, then you have true scale, and value will increase. Everybody wins there so it's about getting through that, and you can get through it fast with good mentoring, but here's the challenge that entrepreneurs fall into the trap. I call it the, I think I made it trap. And what happens is they think they're on the other side of the hourglass, but they still haven't even gone through the straight and narrow yet, and they don't know it. And what they do is they over fund and implode. That seems to be a major trap I see a lot of entrepreneurs fall into, while I got a 50 million pre on my B round, or some monster valuation, and they get way too much cash, and they're behaving as if they're scaling, and they haven't even nailed it yet. >> Well, I think that's right. So there's certainly, there are stages of product market fit, and so I think people hit that first stage, and they say, oh I've got it. And they try to explode out of the gates. And we, in fact I know one good example of somebody saying, hey, by the way, we're doing great in field sales, and our investors want us to go really fast, so we are going to go inside and we, my job was to hire 50 inside people, without ever having tried it. And so we always preach crawl, walk, run, right? Hire a couple, see how it works. Right, in a new channel. Or a new category, or an adjacent space, and I think that it's helpful to have an investor who has seen the whole picture to say, yeah, I know it looks like light at the end of the tunnel, but see how it's a relatively small dot? You still got to go a little farther, and then the other thing I say is, look, don't build your company to feed your venture capitalist ego. Right? People do these big rounds of big valuations, and the big dog investors say, go, go, go! But, you're the CEO. Your job is analyze the data. >> John: You can find during the day (laughs). >> And say, you know, given what we know, how fast should we go? Which investments should we make? And you've got to own that. And I think sometimes our job is just to be the pulling guard and clear space for the CEO to make good decisions. >> So you know I'm a big fan, so my bias is pretty much out there, love what you guys are doing. Tim Carr is a Pivot North doing the same thing. Really adding value, getting down and dirty, but the question that entrepreneurs always ask me and talk privately, not about you, but in general, I don't want the VC to get in the way. I want them, I don't want them to preach to me, I don't want too many know-it-alls on my board, I want added value, but again, I don't want the preaching, I don't want them to get in the way, 'cause that's the fear. I'm not saying the same about VCs in general, but that's kind of the mentality of an entrepreneur. I want someone who's going to help me, be in the boat with me, but not be in my way. How do you address that concern to the founders who think, not think like that, but might have a fear. >> Well, by the way, I think it's a legitimate fear, and I think it actually is uncorrelated with added value, right? I think the idea that the board has certain responsibilities, and management has certain responsibilities, is incredibly important. And I think, I can speak for myself in saying, I'm quite conscious of not crossing that line, I think you talk. >> John: You got to build a return, that's the thing. >> But ultimately I would say to an entrepreneur, I'd just say, hey look, call references. And by the way, here are 30 names and phone numbers, and call any one of them, because I think that people who are, so a venture capital know-it-all, in the board room, telling CEOs what to do, destroys value. It's sand in the gears, and it's bad for the company. >> Absolutely, I agree 100% >> And some of my, when I talk about being a pulling guard for the CEO, that's what I'm talking about, which is blocking people who are destructive. >> And rolling the block for a touchdown, kind of use the metaphor. Adding value, that's the key, and that's why I wanted to get that out there because most guys don't get that nuance, and entrepreneurs, especially the younger ones. So it's good and important. Okay, let's talk about culture, obviously in Silicon Valley, I get, reading this morning in the Wymo guy, and they're writing it, that's the Silicon Valley, that's not crazy, there's a lot of great people in Silicon Valley, you're one of them. The culture's certainly an innovative culture, there's been some things in the press, inclusion and diversity, obviously is super important. This whole brogrammer thing that's been kind of kicked around. How are you dealing with all that? Because, you know, this is a cultural shift, but I think it's being made out more than it really is, but there's still our core issues, your thoughts on the whole inclusion and diversity, and this whole brogrammer blowback thing. >> Yeah, well so I think, so first of all, really important issues, glad we're talking about them, and we all need to get better. And to me the question for us has been, what role do we play? And because I would say it is a relatively small subset of the tech industry, and the venture capital industry. At the same time the behavior of that has become public is appalling. It's appalling and totally unacceptable, and so the question is, okay, how can we be a part of the stand-up part of the ecosystem, and some of which is calling things out when we see them. Though frankly we work with and hang out with people and we don't see them that often, and then part of which is, how do we find a couple of ways to contribute meaningfully? So for example this summer we ran what we called the Costanova Access Fellowship, intentionally, trying to provide first opportunity and venture capital for people who traditionally haven't had as much access. We created an event in the spring called, Seat at the Table, really, particularly around women in the tech industry, and it went so well that we're running it in New York on October 19th, so if you're a woman in tech in New York, we'd love to see you then. And we're just trying to figure-- >> You're doing it in an authentic way though, you're not really doing it from a promotional standpoint. It's legit. >> Yeah, we're just trying to do, you know, pick off a couple of things that we can do, so that we can be on the side of the good guys. >> So I guess what you're saying is just have high integrity, and be part of the solution not part of the problem. >> That's right, and by the way, both of these initiatives were ones that were kicked off in late 2016, so it's not a reaction to things like binary capital, and the problems at uper, both of which are appalling. >> Self-awareness is critical. Let's get back to the nuts and bolts of the real reason why I wanted you to come on, one was to find out how much money you have to spend for the entrepreneurs that are watching. Give us the update on the last fund, so you got a new fund that you just closed, the new fund, fund three. You have your other funds that are still out there, and some funds reserved, which, what's the number amount, how much are you writing checks for? Give the whole thesis. >> Absoluteley. So we're an early stage investor, so we lead series A and seed financing companies that change the way the world does business, so up and down the stack, a business-facing software, data-driven applications. Machine-learning and AI driven applications. >> John: But the filter is changing the way the world works? >> The way, yes, but in particularly the way the world does business. You can think of it as a business-facing software stack. We're not social media investors, it's not what we know, it's not what we're good at. And it includes security and management, and the data stack and-- >> Joe: Enterprise and emerging tech. >> That's right. And the-- >> And every crazy idea in between. >> That's right. (laughs) Absolutely, and so we're participate in or leave seed financings as most typically are half a million to maybe one and a quarter, and we'll lead series A financing, small ones might be two or two and a half million dollars at the outer edge is probably a six million dollar check. We were just opening up in the next couple of days, a thousand square feet of incubation space at world headquarters at Palo Alto. >> John: Nice. >> So Alation, Acme Ticketing and Zen IQ are companies that we invested in. >> Joe: What location is this going to be at? >> That's, near the Fills in downtown Palo Alto, 164 staff, and those three companies are ones where we effectively invested at formation and incubated it for a year, we love doing that. >> At the hangout at Philsmore and get the data. And so you got some funds, what else do you have going on? 175 million? >> So one was a $100 million fund, and then fund two was $135 million fund, and the last investment of fund two which we announced about three weeks ago was called Roadster, so it's ecommerce enablement for the modern dealerships. So Omnichannel and Mobile First infrastructure for auto-dealers. We have already closed, and had the first board meeting for the first new investment of fund three, which isn't yet announced, but in the land of computer vision and deep learning, so a couple of the subjects that we care deeply about, and spend a lot of time thinking about. >> And the average check size for the A round again, seed and A, what do you know about the? The lowest and highest? >> The average for the seed is half a million to one and a quarter, and probably average for a series A is four or five. >> And you'll lead As. >> And we will lead As. >> Okay great. What's the coolest thing you're working on right now that gets you excited? It doesn't have to be a portfolio company, but the research you're doing, thing, tires you're kicking, in subjects, or domains? >> You know, so honestly, one of the great benefits of the venture capital business is that I get up and my neurons are firing right away every day. And I do think that for example, one of the things that we love is is all of the adulant infrastructure and so we've got our friends at Victor Ops that are in the middle of that space, and the thinking about how the modern programmer works, how everybody-- >> Joe: Is security on your radar? >> Security is very much on our radar, in fact, someone who you should have on your show is Asheesh Guptar, and Casey Ella, so she's just joined Bug Crowd as the CEO and Casey moves over to CTO, and the word Bug Bounty was just entered into the Oxford Dictionary for the first time last week, so that to me is the ultimate in category creation. So security and dev ops tools are among the things that we really like. >> And bounties will become the norm as more and more decentralized apps hit the scene. Are you doing anything on decentralized applications? I'm not saying Blockchain in particular, but Blockchain like apps, distributing computing you're well versed on. >> That's right, well we-- >> Blockchain will have an impact in your area. >> Blockchain will have an impact, we just spent an hour talking about it in the context our off site in Decosona Lodge in Pascadero, it felt like it was important that we go there. And digging into it. I think actually the edge computing is actually more actionable for us right now, given the things that we're, given the things that we're interested in, and we're doing and they, it is just fascinating how compute centralizes and then decentralizes, centralizes and then decentralizes again, and I do think that there are a set of things that are fascinating about what your process at the edge, and what you send back to the core. >> As Pet Gelson here said in the QU, if you're not out in front of that next wave, you're driftwood, a lot of big waves coming in, you've seen a lot of waves, you were part of one that changed the world, Netscape browser, or the business plan for that first project manager, congratulations. Now you're at a whole nother generation. You ready? (laughs) >> Absolutely, I'm totally ready, I'm ready to go. >> Greg Sands here in The Cube in New York City, part of Big Data NYC, more live coverage with The Cube after this short break, thanks for watching. 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>> Narrator: Live from San Francisco It's theCUBE. Covering RSA Conference 2020, San Francisco. Brought to you by Silicon Angled Media >> Hi everyone, welcome to theCUBE's coverage here at RSA Conference 2020. I'm John Furrier, host of theCUBE We're on the floor getting all the data, sharing it with you here, Cube coverage. Got the best new generation shift happening as cloud computing goes to the whole other level. Multi-cloud, hybrid cloud changing the game. You're seeing the companies transition from an on-premises to cloud architecture. This is forcing all the companies to change. So a new generation of security is here and we've got a great guest, so a hot start-up. Masha Sedova, co-founder of Elevate Security. Welcome to theCUBE, thanks for joining us. >> Thank you so much for having me, John. >> So the next generation in what will be a multi-generational security paradigm, is kind of happening right now with the beginning of, we're seeing the transition, Palo Alto Networks announced earnings yesterday down 13% after hours because of the shift to the cloud. Now I think they're going to do well, they're well positioned, but it highlights this next generation security. You guys are a hot start-up, Elevate Security. What is the sea change? What is going on with security? What is this next generation paradigm about? >> Yeah, so it's interesting that you talk about this as next generation. In some ways, I see this as a two-prong move between, yes, we're moving more into the cloud but we're also going back to our roots. We're figuring out how to do asset management right, we're figuring out how to do patching right, and for the first time, we're figuring how to do the human element right. And that's what where we come in. >> You know, the disruption of these new shifts, it also kind of hits like this, the old expression, 'same wine, new bottle', all this, but it's a data problem. Security has always been a data problem, and we've seen some learnings around data. Visualization, wrangling, there's a lot of best practices around there. You guys are trying to change the security paradigm by incorporating a data-centric view with changing the behavior of the humans and the machines and kind of making it easier to manage. Could you share what you guys are doing? What's the vision for Elevate? >> Yeah, so we believe and we've seen, from our experience being practitioners, you can't change what you can't measure. If you don't have visibility, you don't know where you're going. And that's probably been one of the biggest pain-point in the security awareness space traditionally. We just roll out training and hope it works. And it doesn't, which is why human error is a huge source of our breaches. But we keep rolling out the same one-size fits all approach without wanting to measure or, being able to. So, we've decided to turn the problem on its head and we use existing data sets that most organizations who have a baseline level of maturity already have in place. Your end point protections, your DLP solutions, your proxies, your email security gateways and using that to understand what your employees are doing on the network to see if user generated incidents are getting better over time or getting worse. And using that as the instrumentation and the level of visibility into understanding how you should be orchestrating your program in this space. >> You know, that's a great point. I was just having a conversation last night at one of the cocktail parties here around RSA and we were debating on, we talk about the kind of breaches, you mentioned breaches, well there's the pure breach where I'm going to attack and penetrate the well fortified network. But then there's just human error, an S3 bucket laying open or some configuration problem. I guess it's not really a breach, it's kind of an open door so the kind of notion of a breach is multifold. How do you see that, because again, human error, insider threats or human error, these are enabling the hackers. >> Yeah >> This is not new. >> Yeah. >> How bad is the problem? >> It depends on what report you read. The biggest number I've seen so far is something like 95% of breaches have human error. But I honestly, I couldn't tell you what the 5% that don't include it because if you go far enough back, it's because a patch wasn't applied and there is a human being involved there because there is vulnerability in code, that's probably a secure coding practice when you're a development organization. Maybe it's a process that wasn't followed or even created in the first place. There's a human being at the core of every one of these breaches and, it needs to be addressed as holistically as our technologies and our processes right now in the space. >> The evolution of human intelligence augmented by machines will certainly help. >> That's it, yeah. >> I mean, I've got to ask you, obviously you're well-funded. Costanova Ventures well known in the enterprise space, Greg Sands and the team there, really strong, but you guys entered the market, why? I mean you guys, you and your founder both at Salesforce.com. Salesforce gurus doing a lot of work there. Obviously you've seen the large scale, first wave of the cloud. >> Yeah >> Why do the start-up? What was the problem statement you guys were going after? >> So, my co-founder and I both came from the world of being practitioners and we saw how limited the space was and actually changing human behavior, I was given some animated PowerPoints, said use this to keep the Russians out of your network, which is a practical joke unless your job is on the line, so I took a huge step back and I said, there are other fields that have figured this out. Behavioral science being one of them, they use positive reinforcement, gamification, marketing and advertisements have figured out how to engage the human element, just look around the RSA floor, and there's so many learnings of how we make decisions as human beings that can be applied into changing people's behaviors in security. So that's what we did. >> And what was the behavior you're trying to change? >> Yeah, so the top one's always that our attackers are getting into organizations, so, reducing phishing click-throughs an obvious one, increasing reporting rates, reducing malware infection rates, improving sensitive data handling, all of which have ties back to, as I was mentioning earlier, security data sources. So, we get to map those and use that data to then drive behavior change that's rooted in concepts like social proof, how are you doing compared to your peers? We make dinner decisions on that and Amazon buying decisions on that, why not influence security like that? >> So building some intelligence into the system, is there a particular market you're targeting? I mean, here people like to talk in segments, is there a certain market that you guys are targeting? >> Yeah, so the amazing thing about this is, and probably no surprise, the human element is a ubiquitous problem. We are in over a dozen different industries and we've seen this approach work across all of those industries because human beings make the same mistakes, no matter what kind of company they're in. We really work well with larger enterprises. We work well with larger enterprises because they tend to have the data sets that really provides insights into human behavior. >> And what's the business model you guys envision happening with your service product? >> We sell to enterprises and security, the CISO and the package as a whole, gives them the tools to have the voice internally in their organization We sell to Fortune 1000 companies, >> So it's a SAAS service? >> Yeah, SAAS service, yeah. >> And so what's the technology secret sauce? (laughing) >> Um, that's a great question but really, our expertise is understanding what information people need at what time and under what circumstances, that best changes their behavior. So we really are content diagnostic, we are much more about the engine that understands what content needs to be presented to whom and why. So that everyone is getting only the information they need, they understand why they need it and they don't need anything extra-superfluous to their... >> Okay, so I was saying on theCUBE, my last event was at, CIO's can have good days and bad days. They have good days, CISOs really have good days, many will say bad days, >> Masha: Yeah, it's a hard job. >> So how do I know I need the Elevate Solution? What problem do I have, what's in it for me? What do I get out of it? When do I know when to engage with you guys? >> I take a look at how many user generated incidents your (mumbles) responding to, and I would imagine it is a large majority of them. We've seen, while we were working at Salesforce and across our current customers, close to a 40% reduction rate in user generated incidents, which clearly correlates to time spent on much more useful things than cleaning up mistakes. It's also one of the biggest ROI's you can get for the cheapest investment. By investing a little bit in your organization now, the impact you have in your culture and investing in the future decision, the future mistakes that never get made, are actually untold, the benefit of that is untold. >> So you're really kind of coming in as a holistic, kind of a security data plane if you will, aggregating the data points, making a visualization in human component. >> You've got it. >> Now, what's the human touchpoint? Is it a dashboard? Is it notifications? Personalization? How is the benefit rendered for the customer? >> So we give security teams and CSOs a dashboard that maps their organization's strengths and weaknesses. But for every employee, we give personalized, tailored feedback. Right now it shows up in an email that they get on an ongoing basis. We also have one that we tailor for executives, so the executive gets one for their department and we create an executive leaderboard that compares their performance to fellow peers and I'll tell you, execs love to win, so we've seen immense change from that move alone. >> Well, impressive pedigree on your entrepreneurial background, I see Salesforce has really kind of, I consider real first generation cloud before cloud actually happened, and there's a lot of learn, it was always an Apple case, now it's AWS, but it's it's own cloud as we all know, what are the learnings that you saw from Salesforce that you said hey, I'm going to connect those dots to the new opportunity? What's the real key there? >> So, I had two major aha's that I've been sharing with my work since. One, it's not what people know, but it's what they do that matters, and if you can sit with a moment and think about that, you realize it's not more training, because people might actually know the information, but they just choose not to do it. How many people smoke, and they still know it kills them? They think that it doesn't apply to them, same thing with security. I know what I need to do, I'm just not incentivized to do it, so there's a huge motivation factor that needs to be addressed. That's one thing that I don't see a lot of other players on the market doing and one thing we just really wanted to do as well. >> So it sounds like you guys are providing a vision around using sheet learning and AI and data synthesis wrangling and all that good stuff, to be an assistant, a personal assistant to security folks, because it sounds like you're trying to make their life easier, make better decisions. Sounds like you guys are trying to distract away all these signals, >> You're right. >> See what to pay attention to. >> And make it more relevant, yeah. Well think about what Fitbit did for your own personal fitness. It curates a personal relationship based on a whole bunch of data. How you're doing, goals you've set, and all of a sudden, a couple of miles walk leads to an immense lifestyle change. Same thing with security, yeah. >> That's interesting, I love the Fitbit analogy because if you think about the digital ecosystem of an enterprise, it used to be siloed, IT driven, now with digital, everything's connected so technically, you're instrumenting a lot of things for everything. >> Yeah. >> So the question's not so much instrumentation, it's what's happening when and contextually why. >> That's it, why, that's exactly it. Yeah, you totally got it. >> Okay. I got it. >> Yeah, I can see the light bulb. >> Okay, aha, ding ding. All right, so back to the customer pain point. You mentioned some data points around KPI's that they might or things that they might want to call you so it's incidents, what kind of incidents? When do I know I need to get you involved? Will you repeat those again? >> There's two places where it's a great time to involve. Now, because of the human element is, or think about this as an investment. If you do non-investor security culture, one way or another, you have security culture. It's either hurting you or it's helping you and by hurting you, people are choosing to forego investing security processes or secure cultures and you are just increasing your security debt. By stepping in to address that now, you are actually paying it forward. The second best time, is after you realize you should have done that. Post-breaches or post incidents, is a really great time to come in and look at your culture because people are willing to suspend their beliefs of what good behavior looks like, what's acceptable and when you look at an organization and their culture, it is most valuable after a time of crisis, public or otherwise, and that is a really great time to consider it. >> I think that human error is a huge thing, whether it's as trivial as leaving an S3 bucket open or whatever, I think it's going to get more acute with service meshes and cloud-native microservices. It's going to get much more dynamic and sometimes services can be stood up and torn down without any human knowledge, so there's a lot of blind spots potentially. This brings up the question of how does the collaboration piece, because one of the things about the security industry is, it's a community. Sharing data's important, having access to data, how do you think about that as the founder of a start-up that has a 20 mile steer to the future around data access, data diversity, blind spots, how do you look at that and how do you advise your clients to think about that? >> I've always been really pro data sharing. I think it's one of the things that has held us back as an industry, we're very siloed in this space, especially as it relates to human behavior. I have no idea, as a regular CISO of a company, if I am doing enough to protect my employees, is my phishing click (mumbles), are my malware download rates above normal, below or should I invest more, am I doing enough? How do I do compared to my peers and without sharing industry stats, we have no idea if we're investing enough or quite honestly, not enough in this space. And the second thing is, what are approaches that are most effective? So let's say I have a malware infection problem, which approach, is it this training? Is it a communication? Is it positive reinforcement, is it punishment? What is the most effective to leverage this type of output? What's the input output relation? And we're real excited to have shared data with Horizon Data Breach Report for the first time this year, to start giving back to the communities, specifically to help answer some of these questions. >> Well, I think you're onto something with this behavioral science intersection with human behavior and executive around security practices. I think it's going to be an awesome, thanks for sharing the insights, Miss Masha on theCUBE here. A quick plug for your company, (mumbles) you're funded, Series A funding, take us through the stats, you're hiring what kind of positions, give a plug to the company. >> So, Elevate Security, we're three years old. We have raised ten million to date. We're based in both Berkeley and Montreal and we're hiring sales reps on the west coast, a security product manager and any engineering talent really focused on building an awesome data warehouse infrastructure. So, please check out our website, www.elevatesecurity.com/careers for jobs. >> Two hot engineering markets, Berkeley I see poaching out of Cal, and also Montreal, >> Montreal, McGill and Monterey. >> You got that whole top belt of computer science up in Canada. >> Yeah. >> Well, congratulations. Thanks for coming on theCUBE, sharing your story. >> Thank you. >> Security kind of giving the next generation all kinds of new opportunities to make security better. Some CUBE coverage here in San Francisco, at the Moscone Center. I'm John Furrier, we'll be right back after this break. (upbeat music)

(orchestral music) >> Hello everyone. Welcome to the special CUBE conversation here in theCUBE's Palo Alto studio. I'm John Furrier. Where conversation around venture capital, entrepreneurship, crypto currencies, block chain, and more, Jonathan Ebinger our friend with BRV, formerly Blue Run Ventures, but BRV for short, sounds better, welcome to theCUBE. >> Thanks John, looking forward to it. >> Great to see you, we've known each other for a long time and you've been a great investor, your firm has done a lot of great stuff, deals are really famous deals, but also you dig into the companies and you really stand by your portfolio companies, but you've also done a lot of work in China. >> Yes. >> So you have a good landscape of what's going on. What's the, what's going on in China? >> Well China is really expanding in ways which we had not foreseen when we first started investing there almost 15 years ago. We were really active for five to 10 years, investing in companies that initially were considered copycat companies, you can't really use that term anymore. In fact what's happening more and more, you're seeing Chinese ideas coming to the United States. Businesses like We Chat are being copied as fast as they can, you're seeing Snapchat, Messenger and so forth, they're quickly trying to amalgamate as many assets as they can within their viewership much like we're seeing in a lot of the other Chinese analogs over there. It's exciting to see, it's very much an arms race. >> It's been interesting to watch. We were at the Ali Baba Cloud Conference last year, at the end of last year, it's interesting the innovation and entrepreneurial thirst has really changed. If you go back just 10 years ago when you guys were first getting in there, I remember the conversations were what's going on in China, it's very developmental but what's going on 10 years ago, they are dominating the mobile space, they're mobile usage is really much different makeup in how they do startups, the apps. How much of that has influenced some of their success just the demand? >> Always on, location always available, it opens up a whole new level of communication services. The idea of the larger screen format, people used to think in the United States, these large devices coming out of Korea first and then China, we thought these would never play in the United States, now Apple 10, larger screen size, it makes sense, it's mobile first right from the get go for a now billion plus users. >> So BRV, how many active portfolio companies do you guys have and what's the profile that you're looking for for entrepreneurs, what are some of the kind of companies? >> We're about 45 active companies right now. We're putting about, we're putting money in about 10 new companies a year at this point. We have a very disciplined approach of investing in Series A style companies, Series A of course means a lot of different things to people, but generally, we like to put $3 to $5 million to work early on and then follow on. >> How much do take for that, just a third? >> Typical in the 20%-25% range. There's a lot of companies out there that still fit that profile. Of course you're seeing some super sized Series A's that happen, we don't play in those but for the traditional software companies, evaluations are really right in our sweet spot. >> How big is the fund now, just what's the number in terms of capital? >> We're in fund six, we're just over $150 million. >> And you got to save some for follow on rounds. >> Exactly. >> Talk about the changes in venture capital because what's interesting, I had a conversation with Greg Sands with Costanoa Ventures, another great investor, formerly I think the first employee of Netscape I think or the business plan. Great guy, he talked about the dynamics of, you don't need that much cash anymore because if you can get unit economic visibility into what the business is working, you can do so much more with that and I'm calling it the hourglass effect, you get through that visibility, you're in control, you own your own destiny, versus the old Silicon Valley model which seems to be fading away, which is hey, what do you need? $40 million, or here's $100 million. That really limits your exit options and sometimes you can drown in your own capital. Talk about that dynamic. >> You're seeing the $40 million rounds with businesses that are much more capital intensive and that's coming back in vogue now but for the most part, I agree with what Greg's saying and this whole advent of seed funds and super seed funds and angel funds and so forth has been really great for the traditional series A investor. A lot of that early fundamental and foundational work is being done and then when the series A comes, it's more about expansion so we're effectively getting what was a Series B type stage company now we're investing in Series A. We're saying hey, this product works, there's product market fit, let's put dollars to work to really grow the market. >> So you're saying Series B was a kind of prove the business model, shifted down to the A because the cost to get there is lower and hence that's opened up a seed round lower in numbers, so it just shifts down a little bit. >> It really has, it really has and that plays into our sweet spot. We really like working on business models, distribution strategies, things like that. >> And what kind of startups do you want to invest in? What are some of the categories? >> Love financial services, we like health tech, we're doing education, we're really pretty omnivorous when it comes to the sector. What we're looking for is really businesses that are using data, real time data to disrupt the numbers. >> So you're not sector driven, you're disruption oriented. >> That's right. >> Okay let's talk about disruption, my favorite trend. Obviously I love the China dynamic because you're not sure what it is, but it's really doing well so you can't ignore it and they're innovative and they're hustling hard and they've got massive numbers. Block chain, we're super excited about, we love crypto, we think it's the biggest wave coming out there, so a lot of my smart, entrepreneurial friends are jumping on their surfboards literally and jumping out into those waves and there's a lot of action there. At the same time, people are saying, stay away from that crypto thing, it's a scam. Kind of a different perspective, what's your thoughts on that? >> If you look at, you separate the cryptocurrencies from block chain, I think it becomes a lot more clear. Block chain is for real. Tracking provenance on transactions, real estate transactions, multinational transactions, makes a lot of sense, dovetails nicely with security, so there's a real business there. You saw the announcement with IBM and Mersk the other day, what they are taking enterprise level block chain into their whole supply chain. I think that's really important. We have a company in the category called pay stand which is doing the same sort of thing with smaller size businesses, just accelerating the whole process on accounts receivable, taking working capital. >> And they're doing block chain for that? >> Yes block chain is an option, we're not forcing people onto block chain, but the idea of hey, let's give people more cost effective ways to transact, get rid of the paper checks, get rid of the invoicing and just join the modern world, much like you use Venmo if you and I are going to exchange money. >> That's pay stand, that's one of your hot companies. >> Yeah it is, absolutely. >> So are they using block chain or not? >> They are, yes. >> Okay, because it's a physical asset, it's kind of a supply chain thing? >> They use it to track the funds themselves, unlike a credit card where you have to pay a big fee or ACH which you can't really get proof of funds, with their block chain technology, you can be sure that you have the funds available and you get it instantly. >> Let's talk about use cases that you think out there, I'd like you to just weigh in on use cases for block chain that a mainstream person that's not in the tech business would understand, because they say, is it real or not? I agree block chain is legit, what are some use cases that would highlight that? >> I think if you've ever been involved in real estate, bought a home, things like that, just tracking title insurance, you're going all the way back if you live in California, you're going all the way back to pre-statehood days, you have to track the provenance of that land all the way through. You're paying title insurance, title insurance is a business you don't really need if you have accurate provenance tracking through block chain. I think that's one most of us can understand. Obviously bills of weighting with things coming over on ships. That's natural and right now things get held up in port because people are trying to find a clipboard before you can sign off on who, is this bill of weighting actually clean, that stuff can be done automatically with 2D barcodes, block chain usage. >> Certainly with perishable goods too, we learned that with IBM's example. >> Sure. >> Okay let's get into the hot companies you got going on. Name some of the hot investments that you've done. >> Sure, well I talked about pay stand a minute ago, really excited about them, another one we really like is a company called aerobotics. I know you're a fan of autonomous flying. If you think about drones and everyone knows DJI and they're a great company, that's one to one, one person flying one drone, that's not scalable obviously, it scales at one to one. With autonomous flying, you can have a whole army of drones out doing your business, whether they're doing site exploration, checking for chemical spills, looking at traffic and so forth. The company is now operating in three continents, it's just, if you think about what a drone is, effectively it's a flying cell phone. It's a cell phone that goes around, takes pictures, transmits data back, we know something about cell phones at BRV, we've been investing in this category for a long time so when we say aerobotics come along, we said this is just a natural extension of real time data, cellular technology, and location based services. >> You guys don't get a lot of credit as much as you should, in my opinion on that, you guys were very early on the mobile, mobile connectivity side and mobile footprint and device and software. That's playing well into the hottest trend that we see, that's not the sexiest trend, that's IOT. >> Absolutely. >> Because drones are certainly, industrial IOT is a big one. Instrumenting physical plants, equipment, and IOT in general the edge of the network. What's your thoughts on IOT and how would you, how do you see that evolving? It's more than just the edge of the network issue, it's bigger. >> It is, well of course the devices and sensors are important. I think a lot of that's been commoditized. The business that we've been seeing develop and there's a lot of folks, they've moved from analytics of the web to analytics of IOT, so there's a lot of interesting companies coming in the analytic space. We're not playing in that as much, we tend to like to invest in companies that are big enough that you need to have analytics for them. We like companies that have proprietary control of analytics versus necessarily running analytics for company X. >> So you're not poopooing IOT per se, just that from an investment thesis standpoint, it's not on your radar yet. >> That's right, they're either too capital intensive for us as a firm or you're basically managing someone else's data. I want to be in companies that we're managing our own data for a proprietary advantage. >> That's really what I was going to get to next, the role of data driven, so we've lived in dupe world, theCUBE started in 2010 in the offices of Cloud Air actually and people don't know the history and it's been interesting, Hadoop was supposed to save the world, the data, but it really started the data trend, the data driven trend, Mike Olsen, Amar Omadala and the team over there really nailed it but it didn't turn into be just Hadoop, it's everything so we're seeing that now become a bumper sticker, data driven marketer, I'm a data driven executive, I'm a data driven interviewer, all that stuff, what does it actually mean? What does data driven mean to you? >> Data is, there's big data and then there's actionable data obviously people talk about exhaust, the data coming off, we really got started with, as you know, we were investors in Waze, awful lot of data coming out of your cell phone, extracting just the important pieces of it are really what's important. We're investors in a company called Cabbage which looks at every transaction a small business makes to determine their credit worthiness. It's really the science. People talk about data scientists, what do they actually do? What they're actually doing is separating out the wheat from the chaff because it's just a crush of data. I saw your interview with Andy Jazzy to other day from AWS, the amount of data that's being stored, it's almost unfathomable but the important people. >> They have a lot of data. You'd like to invest in them now. >> Exactly, but that's really the thing, it's being able to separate the good data from the bad. >> You look at Amazon, I was talking to Jesse and he didn't really go there because he was kind of on message but when I talked with Swami who runs the AI group over there, we were talking about, I said to him straight up, I'm like, you're running a lot of workloads on your cloud, I'm sure you have data on those workloads. Just the impact of what they could do with that data. This is the virtuous cycle that their business model is made up of, but it's changing the game for what they can become. The thing that we're seeing in the data world is, sometimes the outcome might not be what you think because if you can use the data effectively, it's a competitive advantage, not a department. >> Right and you have to really stay true to your commitment to data. What we've seen happen is when companies, if you've been around for 10 years or so, you start to trust your gut, that's important, but it can also not lead you to see obvious conclusions because the world changes. >> And also committing to data also means from a practitioner's standpoint, investing in the tech, investing in things to be data driven, not just to say it. >> Exactly. >> Okay so what's the future for you guys? What are you looking at next year, what are some of the things you'd like to accomplish for investment opportunities, besides getting all the hot deals, you did Waze, that was an amazing deal, one of my favorite products, how did that go down? How many people passed on Waze? >> I don't know how many people passed, but we were lucky, they wanted to bring us in to the initial syndicate, they wanted to have some folks who understood. >> But it wasn't that obvious though at the beginning. What was the original pitch? >> The initial pitch was that they were going to have folks have the dash devices, the product would sit on your dashboard and they were going to be using it to map Eastern Europe because Eastern Europe was just coming into the Western world and they didn't really have good roads and good maps. We thought, that's interesting but they probably also don't have smartphones, so why don't we come across the Atlantic and let's make this thing work in the US and then from there, the rest took off country by country we were the number one navigation app in I think 150 countries at one point. >> What's the biggest thing that you've learned over the past few years in the industry that's different now I mean obviously there's some context that I'll share which is obviously the big cloud players are becoming bigger, scale's a big thing, you got Google, you got Microsoft and Amazon, you've got Facebook's out there as well. Then you get the political climate. You go to Washington D.C. and New York, Silicon Valley is not really talked highly about these days on the hill in Washington, yet GovCloud is completely changing the game of how the government is going to work with massive innovations and efficiencies, literally overnight, it's almost weird. >> It is and it isn't. If you look at it through a longer term horizon, Silicon Valley is again at the forefront, we're really the first ones with more transparency in the industry, all the different movements which are really important and all the conversations that are happening are important and they're happening here first. I think you're starting to see a ripple effect, you're seeing it going through entertainment, you're going to see it in the government, industry after industry I think is going to start to have to be more open as Silicon Valley has led the way on that. >> That's a great point. Take a minute to describe the folks out there watching that aren't from here, what is Silicon Valley about in your opinion? >> Silicon Valley is, of course it's more than a mindset, but folks who are here are here on purpose. They come here intentionally. There are very few people that I know who were born and raised here, so they're coming here because they want to be part of a shared ethos around success, around success, around shared values and competition so it's a very healthy environment, I came, I used to live in Washington D.C. and I couldn't be happier to be 3000 miles away. >> If you're a technology entrepreneur, this is where all the sports and action is, as I always say, we always love sports analogies. Okay, I got to ask you about the VC situation around ICOs, initial coin offerings are being talked about as an alternative to fundraising, there's some security options on token sales as a utility, the SEC has started to put some guidelines down on what that looks like, but the general sentiment is, it's a new way to raise money and some people are doing private rounds with venture capital and doing token sales through ICOs. You see some hybrids, but for the most part, the hard core I don't want to say right or left wing, is there a wing of the political spectrum, but the hard core ICO guys are like, this is all about disrupting the VC community and you're a VC, so you got to take that a little bit personal but the point is, what do you think about that? Is that talked about? >> I think that's good salesmanship. The VC industry such as it is, you can fit every VC into one section of Stanford stadium. There just aren't that many VCs to really go after. We're a small group of folks. I think that going after maybe disrupting the way folks are raising money through Kickstarter and things like that, that's all great. We're not going to stop it, we're going to embrace it. I think that there's plenty of different ways to raise capital, I have no compunction about those things. >> Do you think it's more of a democratization trend or a new asset class, so you don't see it disrupting the VCs per se, but if it's only a handful of VCs that could fit into Stanford Stadium, for instance, then certainly there's more options, it's a dilution. >> I think you look at it as it's just an alternative financing method, do I take debt, do I take equity, do I take venture, do I take friends and family? It's just one more arrow in the quiver of the entrepreneur, I think you have to be smart about it because thinking that you're going to get the same level of attention from an investor in your ICO that you are going to get from a series A investor who owns 20% of your company, those are two very different value propositions. >> So you see a lot of pitches and sometimes, you have to say no a lot and that's the way the game is, but a lot of times, you want the best deals. But the founders' side of the table, they're looking at the VC, I need money. So that's one of the options, what they really want is a value added partner, so what's your current take on what that means these days? Sometimes it means a firm, sometimes it means a partner, sometimes it means the community. How are you guys looking at BRV as value add versus the worst case scenario which is value subtract, you just want to have that be positive. >> I see that written about venture too. >> I know, some people experienced it. >> I think it helps that we've been around now for almost 20 years, we got started in '98 so you have to look at our body of work and the continuum of investments and founders and CEOs and CTOs that we've invested in. There's hundreds and hundreds of people who have taken money from BRV, and so that's one of the real positives about this current state we're in is that there's so much transparency. The fact that we are, I like to think we're good actors and have been for a long time, that comes out, now through our words but through the words of. >> What would they say about you guys? What would your entrepreneurs say about BRV? >> Aside from using buzzwords like value add, they say, they know their industry, they're not afraid to ask for help, they try to call problems when they see it, things like that. >> You stand by your companies. >> Absolutely. >> Awesome, well what's your favorite trend that you're personally interested in? >> I think you have to go after health care right now. It is just such a big market right now. People have been nibbling all different sides of it right now, there's been folks who are trying to expedite processing, there's actual innovations happening on the medical side, I think there is just, technology is just now starting to get into that, technology has gotten into education. >> How about the startup you guys funded that's related to the health care field. >> Yes, we're in a company called Hello Heart which is really at the confluence of a number of trends. It starts off, what Hello Heart is, it's a personal blood pressure cuff for you as an employee of a big company, more and more companies are starting to self insure. If you're a big enough company, 10,000 plus employees or even fewer, you're going to want to self insure to save money but also, your employees get very much more comfortable with you as an employer, you care about my well being, so it's a very virtuous cycle for the employees. >> So companies themselves insuring their own employees. >> Absolutely. >> They have to be super big, this company. >> This is just one component of a self insured business. You also, of course you still have access to doctors and stuff, I'm not making the pitch for being self insured as a company, I'm just saying that. >> But that's a trend. >> It's absolutely a trend and you're seeing a lot of what I would call point solutions stepping in, whether it's psychiatric, whether it's opioid help, whether it's working on heart conditions, these are all different point solutions which are being amalgamated together to help companies which are self insuring. >> So is Hello Heart for consumers or for business? >> It's sold to businesses but individual employees have it so they can keep track of their blood pressure. >> But I can't buy one if I wanted one? >> Not today, but I'll make sure I can get one to you. >> I need one, get all of our employees instrumented. >> Exactly. >> Drug tested all that stuff going on. People worry about the privacy, that's something I would be concerned with, putting. >> That's taken a really fast pendulum swing. A few years ago, Generation X was privacy, there is no privacy, the default was, location is always on, that's just flipped 180 degrees in the last few years. >> Well Jonathan, thanks for coming into this CUBE conversation, I want to ask you one final question, one thing we're passionate about is women in tech and underserved minorities, obviously Silicon Valley has to do a better job, it's out on the table, and it's working but we're still seeing a lot more work to be done, we're seeing titles not being at the right level, but pay's getting there in some places but titles aren't, some paying still below for women, still a lot more to do, what are you guys doing for the women in tech trend, how are you guys looking at that? Certainly it's a sensitive topic these days, but more importantly, it's one that's super important to society. >> It is, I think like a lot of things that have long term value, it's really about your actions versus your words, so our firm has two out of the five investment professionals are female, one of the last three CEO's we've founded is a female CEO, we have technologists, we have marketing people, we have CEO's that are females it's very much of a cross the board, sex, race and so forth. >> You guys are indiscriminate, a good deal's a good deal. >> Exactly right. >> It's about making money, VC's are in the business of making money, a lot of people don't understand, you guys have a job to do but you do a good job. >> We're in the business of making money but our investors for the most part are not for profits. Large universities, our biggest investor is the Red Cross, so when we do well, the Red Cross does well and the country does well. >> You're mission driven at this point. >> Exactly. >> Is that by design or is that just, your selection? >> We're delighted with our LP's, it's important that we have synergies aside from just finances with our investors. >> That's super well, I appreciate you coming on, I think it's super great that you're tying society benefits into money making and entrepreneurship, great stuff Jonathan Ebinger here on theCUBE, BRV check them out, great VC firm here in Silicon Valley. It's a CUBE conversation, we're talking about startups and entrepreneurship I'm John Furrier, thanks for watching. (dramatic music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering AWS Reinvent 2017, presented by AWS, intel, and our ecosystem of partners. >> Welcome back everyone, live here in Las Vegas. We're at AWS Reinvent. Day one coverage of three days of theCUBE, I'm John Furrier, the host this week. >> We've got two sets, our fifth year covering Reinvent. It's been great to watch. Every year we try to get in the VC panels. We just had Jerry Chen on from Greylock. We've got two more awesome friends of theCUBE in the community here. We've got Sunil Dhaliwal who is the founder of Amplify Ventures and Nick Sturiale with Ignition Partners. Guys, great to see you. >> Great to see you, John. >> Good to see you, John. >> Boy what a lineup it's been over the past three years, four years with Amazon, just watching them tear. Now it's all steamed ahead. Microsoft is totally gearing up. You can see them playing, what they're doing, they're pedaling as fast as they can. Google Play and the (mumbles) we're gonna compete on TensorFlow and other, little goodness, a lot more to go. You got Alibaba Cloud. Intel behind us is making (mumbles) chips. Good market on paper. >> Yeah. >> But we're seeing startups kind of get bought, not for what they wanted. Didn't go public. Skyhigh from Greylock. You see Barracuda going private. A lot of money to be made. Maybe the investment thesis of 200 million dollar fundings, that's over, is it over? Get a little bit of cash and get the critical mass and... >> Well, here's a question. Do you invest in these companies thinking every one of them is going to go public? Or do you think that a good number of them are gonna get acquired? And I think the investors that have done this for a while, and Nick's done this for what, like 45 years? >> I started when I was two, so. >> I've done this like two years less than you have, so I don't pretend I'm dramatically younger. But the reality is, these companies get acquired. And pretending that you're gonna pile into a company late and expect every single thing to go public I think is kind of crazy. And the people that are getting caught in that trap, I think they're gonna be in for a rude awakening. But look, you've got a billion six outcome for Barracuda, right? >> John: That was pretty damn good. >> And you know Skyhigh number hasn't been printed, but it wasn't a small one. Like, those are good outcomes. Those are good venture returns, if you were smart about where you got in. >> So I have a slightly different perspective, which is the real issue is that so much money moved into the late stage, and these companies thought that growth would always be linear even asymptotic. And so what happens is that their growth rate slows down and the cost of growth goes up, and suddenly the company's not quite as hot as it was a year ago, and so now the options for what they do have shrunk dramatically, and so you get exits like you just mentioned. And so part of the problem is is that entrepreneurs and investors really have to have a sober view of what is a business model that's durable over time and which ones really are gonna start to leak in their later phases. >> Well it's kind of a planted question for you guys, because you're early stage in Amplify. I've been following you guys, do a great job. You guys do a range of early, end growth. >> Mostly early though. >> The days of just laying back and kicking your feet up and throwing cash at stuff is over. You actually gotta do the work. It sounds like old school VCs. Greg Sands and I talk about this all the time. You gotta go in and be venturing. You gotta actually make it work. >> And that sucks, I was just told I put my feet up, I put some money in and then I get a distribution check at the end of it. >> That's what everyone thinks you guys do. What do you guys do every day? Take us through your day. >> It looks a lot like that except... >> It's so easy to be a VC, all you do is okay, yes, no, okay that's good. >> We got a dartboard. >> All you gotta do is bet on the good ones. >> Yeah. >> That's so easy. >> So there are what, 14,000 startups in the bay area, how many of them are worthwhile you think? >> It's a lot of work. Well old school, let's go back to the old school tactics, because you're seeing a couple things going on. You guys essentially pointing it out, you gotta do the work and pick the winners. But now that the business models are changing, right? You're seeing Amazon just ignoring conventional wisdom, and they're winning. The game is changing a bit in the business model side. How are you guys looking at that as you make investments? So you got the classic venture, bet on a good team, do all that stuff. What do you guys look at now in the marketplace for fit, scale, longevity, durability? >> I mean the stuff we care about the most is are you going after a big problem? Because I think a lot of the stuff we see, even with your great teams and great technologies, but you step back and you actually think, you know, that isn't a company, that's a product, or that's not even a product, that's a feature. And I think that's the natural outgrowth of what happens when you got 14,000 startups in the bay area, is there aren't 14,000 products that are companies worth having. What you have is, probably 12,000 features, 1500 products, and then like 500 real companies. And that's probably the biggest filter that you gotta apply on the way in, and it's maybe the hardest one to solve for, which is, roll this out seven years, nine years, because that's really what you're talking about when you're talking about building a public durable company is, what does this market look like way down the road? And is that a thing that can stand alone? And that's really, I think, the difference between the companies and the investors that do really well and the ones that can kind of squeeze by, knocking out a couple interesting outcomes. >> My favorite thing is that when you say we just pick the winners, is that nobody knows who the winner is a priori. If you knew that, that market would be gone already. And most successful companies that you read about, and they talk about the (mumbles) investors that were in it early, that's all BS. It's a million good things happen along the way, serendipity, a ton of hard work on the management team and the employees. So this idea that things are preordained is just silly. And I would tell you that you look at most really successful companies today, their business model is completely different than the one that the venture person backed. >> I mean it's always the classic, because I remember when I first started an entrepreneur in the 90s, the question was what's your exit strategy? It was a legitimate question at that time, and it was kind of a peg mark, okay, when I build a growing company and have an exit. Now the exits are, as you mentioned, buyers. And that's not necessarily a bad thing. If Microsoft's in a race to fill in their white spaces, man, I would crop up and get the crops growing, right? So you can say, okay, Microsoft. So you guys gotta kind of do a little bit of homework there, do some relationship work, and you guys are close to Microsoft, so. >> Yes. >> I mean, is that kind of the new playbook? >> Yes. >> How should entrepreneurs posture to this? I mean obviously they're gonna try to build a durable venture, but they don't want to be zig-zagging too much or pivoting. >> No. >> I mean Nick made the point earlier, which I think is absolutely the one to focus on, which is when you raise a ton of capital your options start to shrink. The more money you raise at the higher and higher price, there's somebody you gotta serve who's thinking about the even bigger pot of gold at the end of the rainbow. And honestly, when we look at, I'll take one company in our portfolio for example, and I think the Splunk story is right up there with it, If you look at Datadog, Datadog's huge here at this show. There's purple shirts everywhere and a massive booth, and they've been here for five years running or four years running. That business has barely touched the last round of capital they raised, let alone the round of capital before that. The capital efficiency of that business, not only is it gonna make it a great outcome, but it's gonna give them tons of options of things that they can do. And, you know, they'll get to make every single decision they make, whether it's going to new product or whatever, position of strength. And not a lot of companies do that. >> So Splunk started in 2004. Guess how much total the company raised before it went public? >> How much? >> Forty million. Guess how much it spent up to the time it went public? >> John: How much? >> John: Twenty five. >> So it went public... >> So very capital efficient? >> John: Think about that. >> Yes, and it's worth 9 billion now. So you had several hundred millionaires created out of Splunk, and I would submit to you if Splunk was started today, the investor community would have killed it. >> John: Why? >> Because 18 Brinks trucks would have backed up and dumped a billion dollars on top of it, and buried it in too much money without allowing the company to get the time to become a fully viable system. >> Sunil: Yeah. >> So the too much cash can create toxicity for the startup? >> Money rarely makes the company. Money rarely makes the company. >> Lew Cirne was on earlier, founder of New Relic. Another capital efficient company. >> Great company. >> Went public all time high. Love that guy. He's such a strong, he wrote some code last week. He said, if you can help your partners be successful, in referring to Amazon. >> Man: Amazon. >> Then you can be a great ecosystem partner. So the question now is that's not a bad deal for a company to jump into the Cloud game and be a really good partner and build a kick-ass product. >> Yes. >> And look like a feature maybe on paper, and then sequence to an opportunity. Thoughts on that? It's certainly lucrative if you can get the flywheel going. Right? >> So you don't want to build a company whose basic thesis is helping Amazon or Azure or Google. That is a dead company. If, however, you pull revenue for one of those three in a way that's interesting to them, they will support you all day long. We have two companies in particular, Icertis and KenSci that are pulling a lot of revenue for Azure right now. And Microsoft gives them extraordinary support. >> That's the nuance right there. That's the nuance. Pulling revenue, value, creation. >> Yes. >> Well, they've created Amazon and Microsoft and Google, to a degree, as they get going. They've created a really interesting model, which is unlike your traditional ecosystem, hub-and-spoke model, where someone's gonna capture (mumbles) control of the sale, etc., etc. The smart thing that Amazon's done is they say, you use whatever you want, we're gonna bill you for the primitives until the cows come home, and as long as you're not standing in between Amazon and their primitives revenue, you're gonna do great. >> All right, final question for you guys. First of all, great conversation on the capital markets, certainly it's crazy. We always try to cover it, but here's a thought exercise. Last night we were at the analyst summit. We were talking to some analysts, and the question was, the airplane's going down, and you're in a board meeting, I gotta pick a parachute. There are only three parachutes, Amazon, Microsoft, and Google, which one do you grab? You got 10 seconds. >> To sell to or? >> No, just grab a parachute, and you hope that it opens and you live. Pick a parachute. >> Amazon, >> I'm going with Amazon. This one isn't hard. >> Microsoft and Google. The only person who's gonna grab the Microsoft parachute is the guy who's been with Microsoft for 30 years and knows they're not gonna let him down. If you're a forward-facing company you're going with Amazon, and if you're nuts, you're gonna grab Google right now. No offense to my friends at Google. >> So we're sitting here at Reinvent, so I feel like that's a trick question. (laughing) >> Well, that's good. If you're in the Microsoft ecosystem, they do take care of their own. >> They do. >> Their DNA is tuned to ISVs, they're very good at it. >> and that's their track record. Well, the one guys says, well it depends. By the time you argue with the parachute the planes (mumbles). But it does depend on your business. >> Sunil: Yes. >> Nick: Yes. >> But it is hard not to look at this show and say this is what electricity was in 1920. >> Final question, obviously Amazon is looking at all steam ahead, business models are changing, you're starting to see the top of the stack develop nicely, moving up the stacks seems to be the trend. You got this decentralized market up there. Bitcoin hit 10,000. A lot of smart alpha geeks, including some of the guys here at theCUBE team, is looking at ways to kind of leverage this decentralization trend in a way that's productive. Yet there's a lot of scams out there with these ICOs. Decentralization good or just another infrastructure dynamic? Thoughts on this whole decentralized token economics wave? Also the FCC has regulations now in it. Is it disrupting VC? Your thoughts, Nick. >> Do remember what H.L. Mencken said? "A fool and his money are soon parted." so I think anyone who sits there and says I understand completely what an ICO is and what I'm buying and doesn't view it as something that'll be a tax deduction for next year, I think is gonna be in for a bumpy ride. >> Get out your Gartner Hype Cycle. And if you don't know what it is, go look it up, and there's a spot right now of where we are in the hype cycle, and I think the movement my finger tells you where we are, but this is coming, but this comes afterwards. >> I heard this argument, the web is just for kids. No one will ever use the web. Browsers is a toy. >> A K memory is all you'll ever need. >> Yeah, but guess what, guess what, 2001 happened before we got to 2017, so let's never forget where we are at that kind of hype. >> ICOs are like subprime mortgages, and I speak Spanish and I can't even read the thing. That is what an ICO is. >> So certainly hyped up. Winter's coming, we'll see. All right, we got the VCs here, Nick and Sunil. We got Amplify and Ignition Partners here in theCUBE. More live coverage day one after this short break.

>> Live from midtown Manhattan, it's theCUBE covering Big Data New York City 2017. Brought to you by Silicon Angle Media and its ecosystem sponsors. (upbeat techno music) >> Welcome back, everyone. Live here in New York, Day Three coverage, winding down for three days of wall to wall coverage theCUBE covering Big Data NYC in conjunction with Strata Data, formerly Strata Hadoop and Hadoop World, all part of the Big Data ecosystem. Our next guest is Nenshad Bardoliwalla Co-Founder and Chief Product Officer of Paxata, hot start up in the space. A lot of kudos. Of course, they launched on theCUBE in 2013 three years ago when we started theCUBE as a separate event from O'Reilly. So, great to see the success. And Stephanie McReynolds, you've been on multiple times, VP of Marketing at Alation. Welcome back, good to see you guys. >> Thank you. >> Happy to be here. >> So, winding down, so great kind of wrap-up segment here in addition to the partnership that you guys have. So, let's first talk about before we get to the wrap-up of the show and kind of bring together the week here and kind of summarize everything. Tell about your partnership you guys have. Paxata, you guys have been doing extremely well. Congratulations. Prakash was talking on theCUBE. Great success. You guys worked hard for it. I'm happy for you. But partnering is everything. Ecosystem is everything. Alation, their collaboration with data. That's there ethos. They're very user-centric. >> Nenshad: Yes. >> From the founders. Seemed like a good fit. What's the deal? >> It's a very natural fit between the two companies. When we started down the path of building new information management capabilities it became very clear that the market had strong need for both finding data, right? What do I actually have? I need an inventory, especially if my data's in Amazon S3, my data is in Azure Blob storage, my data is on-premise in HDFS, my data is in databases, it's all over the place. And I need to be able to find it. And then once I find it, I want to be able to prepare it. And so, one of the things that really drove this partnership was the very common interests that both companies have. And number one, pushing user experience. I love the Alation product. It's very easy to use, it's very intuitive, really it's a delightful thing to work with. And at the same time they also share our interests in working in these hybrid multicloud environments. So, what we've done and what we announced here at Strata is actually this bi-directional integration between the products. You can start in Alation and find a data set that you want to work with, see what collaboration or notes or business metadata people have created and then say, I want to go see this in Paxata. And in a single click you can then actually open it up in Paxata and profile that data. Vice versa you can also be in Paxata and prepare data, and then with a single click push it back, and then everybody who works with Alation actually now has knowledge of where that data is. So, it's a really nice synergy. >> So, you pushed the user data back to Alation, cause that's what they care a lot about, the cataloging and making the user-centric view work. So, you provide, it's almost a flow back and forth. It's a handshake if you will to data. Am I getting that right? >> Yeah, I mean, the idea's to keep the analyst or the user of that data, data scientist, even in some cases a business user, keep them in the flow of their work as much as possible. But give them the advantage of understanding what others in the organization have done with that data prior and allow them to transform it, and then share that knowledge back with the rest of the community that might be working with that data. >> John: So, give me an example. I like your Excel spreadsheet concept cause that's obvious. People know what Excel spreadsheet is so. So, it's Excel-like. That's an easy TAM to go after. All Microsoft users might not get that Azure thing. But this one, just take me through a usecase. >> So, I've got a good example. >> Okay, take me through. >> It's very common in a data lake for your data to be compressed. And when data's compressed, to a user it looks like a black box. So, if the data is compressed in Avro or Parquet or it's even like JSON format. A business user has no idea what's in that file. >> John: Yeah. >> So, what we do is we find the file for them. It may have some comments on that file of how that data's been used in past projects that we infer from looking at how others have used that data in Alation. >> John: So, you put metadata around it. >> We put a whole bunch of metadata around it. It might be comments that people have made. It might be >> Annotations, yeah. >> actual observations, annotations. And the great thing that we can do with Paxata is open that Avro file or Parquet file, open it up so that you can actually see the data elements themselves. So, all of a sudden, the business user has access without having to use a command line utility or understand anything about compression, and how you open that file up-- >> John: So, as Paxata spitting out there nuggets of value back to you, you're kind of understanding it, translating it to the user. And they get to do their thing, you get to do your thing, right? >> It's making a Avro or a Parquet file as easy to use as Excel, basically. Which is great, right? >> It's awesome. >> Now, you've enabled >> a whole new class of people who can use that. >> Well, and people just >> Get turned off when it's anything like jargon, or like, "What is that? I'm afraid it's phishing. Click on that and oh!" >> Well, the scary thing is that in a data lake environment, in a lot of cases people don't even label the files with extensions. They're just files. (Stephanie laughs) So, what started-- >> It's like getting your pictures like DS, JPEG. It's like what? >> Exactly. >> Right. >> So, you're talking about unlabeled-- >> If you looked on your laptop, and if you didn't have JPEG or DOC or PPT. Okay, I don't know that this file is. Well, what you have in the data lake environment is that you have thousands of these files that people don't really know what they are. And so, with Alation we have the ability to get all the value around the curation of the metadata, and how people are using that data. But then somebody says, "Okay, but I understand that this file exists. What's in it?" And then with Click to Profile from Alation you're immediately taken into Paxata. And now you're actually looking at what's in that file. So, you can very quickly go from this looks interesting to let me understand what's inside of it. And that's very powerful. >> Talk about Alation. Cause I had the CEO on, also their lead investor Greg Sands from Costanoa Ventures. They're a pretty amazing team but it's kind of out there. No offense, it's kind of a compliment actually. (Stephanie laughs) >> They got a symbolic >> Stephanie: Keep going. system Stanford guy, who's like super-smart. >> Nenshad: Yeah. >> They're on something that's really unique but it's almost too simple to be. Like, wait a minute! Google for the data, it's an awesome opportunity. How do you describe Alation to people who say, "Hey, what's this Alation thing?" >> Yeah, so I think that the best way to describe it is it's the browser for all of the distributed data in the enterprise. Sorry, so it's both the catalog, and the browser that sits on top of it. It sounds very simple. Conceptually it's very simple but they have a lot of richness in what they're able to do behind the scenes in terms of introspecting what type of work people are doing with data, and then taking that knowledge and actually surfacing it to the end user. So, for example, they have very powerful scenarios where they can watch what people are doing in different data sources, and then based on that information actually bubble up how queries are being used or the different patterns that people are doing to consume data with. So, what we find really exciting is that this is something that is very complex under the covers. Which Paxata is as well being built upon Spark. But they have put in the hard engineering work so that it looks simple to the end user. And that's the exact same thing that we've tried to do. >> And that's the hard problem. Okay, Stephanie back ... That was a great example by the way. Can't wait to have our little analyst breakdown of the event. But back to Alation for you. So, how do you talk about, you've been VP of Marketing of Alation. But you've been around the block. You know B2B, tech, big data. So, you've seen a bunch of different, you've worked at Trifacta, you worked at other companies, and you've seen a lot of waves of innovation come. What's different about Alation that people might not know about? How do you describe the difference? Because it sounds easy, "Oh, it's a browser! It's a catalog!" But it's really hard. Is it the tech that's the secret? Is it the approach? How do you describe the value of Alation? I think what's interesting about Alation is that we're solving a problem that since the dawn of the data warehouse has not been solved. And that is how to help end users really find and understand the data that they need to do their jobs. A lot of our customers talk about this-- >> John: Hold on. Repeat that. Cause that's like a key thing. What problem hasn't been solved since the data warehouse? >> To be able to actually find and fully understand, understand to the point of trust the data that you want to use for your analysis. And so, in the world of-- >> John: That sounds so simple. >> Stephanie: In the world of data warehousing-- >> John: Why is it so hard? >> Well, because in the world of data warehousing business people were told what data they should use. Someone in IT decided how to model the data, came up with a KPR calculation, and told you as a business person, you as a CEO, this is how you're going to monitor you business. >> John: Yeah. >> What business person >> Wants to be told that by an IT guy, right? >> Well, it was bounded by IT. >> Right. >> Expression and discovery >> Should be unbounded. Machine learning can take care of a lot of bounded stuff. I get that. But like, when you start to get into the discovery side of it, it should be free. >> Well, no offense to the IT team, but they were doing their best to try to figure out how to make this technology work. >> Well, just look at the cost of goods sold for storage. I mean, how many EMC drives? Expensive! IT was not cheap. >> Right. >> Not even 10, 15, 20 years ago. >> So, now when we have more self-service access to data, and we can have more exploratory analysis. What data science really introduced and Hadoop introduced was this ability on-demand to be able to create these structures, you have this more iterative world of how you can discover and explore datasets to come to an insight. The only challenge is, without simplifying that process, a business person is still lost, right? >> John: Yeah. >> Still lost in the data. >> So, we simply call that a catalog. But a catalog is much more-- >> Index, catalog, anthology, there's other words for it, right? >> Yeah, but I think it's interesting because like a concept of a catalog is an inventory has been around forever in this space. But the concept of a catalog that learns from other's behavior with that data, this concept of Behavior I/O that Aaron talked about earlier today. The fact that behavior of how people query data as an input and that input then informs a recommendation as an output is very powerful. And that's where all the machine learning and A.I. comes to work. It's hidden underneath that concept of Behavior I/O but that's there real innovation that drives this rich catalog is how can we make active recommendations to a business person who doesn't have to understand the technology but they know how to apply that data to making a decision. >> Yeah, that's key. Behavior and textual information has always been the two fly wheels in analysis whether you're talking search engine or data in general. And I think what I like about the trends here at Big Data NYC this weekend. We've certainly been seeing it at the hundreds of CUBE events we've gone to over the past 12 months and more is that people are using data differently. Not only say differently, there's baselining, foundational things you got to do. But the real innovators have a twist on it that give them an advantage. They see how they can use data. And the trend is collective intelligence of the customer seems to be big. You guys are doing it. You're seeing patterns. You're automating the data. So, it seems to be this fly wheel of some data, get some collective data. What's your thoughts and reactions. Are people getting it? Is this by people doing it by accident on purpose kind of thing? Did people just fell on their head? Or you see, "Oh, I just backed into this?" >> I think that the companies that have emerged as the leaders in the last 15 or 20 years, Google being a great example, Amazon being a great example. These are companies whose entire business models were based on data. They've generated out-sized returns. They are the leaders on the stock market. And I think that many companies have awoken to the fact that data as a monetizable asset to be turned into information either for analysis, to be turned into information for generating new products that can then be resold on the market. The leading edge companies have figured that out, and our adopting technologies like Alation, like Paxata, to get a competitive advantage in the business processes where they know they can make a difference inside of the enterprise. So, I don't think it's a fluke at all. I think that most of these companies are being forced to go down that path because they have been shown the way in terms of the digital giants that are currently ruling the enterprise tech world. >> All right, what's your thoughts on the week this week so far on the big trends? What are obvious, obviously A.I., don't need to talk about A.I., but what were the big things that came out of it? And what surprised you that didn't come out from a trends standpoint buzz here at Strata Data and Big Data NYC? What were the big themes that you saw emerge and didn't emerge what was the surprise? Any surprises? >> Basically, we're seeing in general the maturation of the market finally. People are finally realizing that, hey, it's not just about cool technology. It's not about what distribution or package. It's about can you actually drive return on investment? Can you actually drive insights and results from the stack? And so, even the technologists that we were talking with today throughout the course of the show are starting to talk about it's that last mile of making the humans more intelligent about navigating this data, where all the breakthroughs are going to happen. Even in places like IOT, where you think about a lot of automation, and you think about a lot of capability to use deep learning to maybe make some decisions. There's still a lot of human training that goes into that decision-making process and having agency at the edge. And so I think this acknowledgement that there should be balance between human input and what the technology can do is a nice breakthrough that's going to help us get to the next level. >> What's missing? What do you see that people missed that is super-important, that wasn't talked much about? Is there anything that jumps out at you? I'll let you think about it. Nenshad, you have something now. >> Yeah, I would say I completely agree with what Stephanie said which we are seeing the market mature. >> John: Yeah. >> And there is a compelling force to now justify business value for all the investments people have made. The science experiment phase of the big data world is over. People now have to show a return on that investment. I think that being said though, this is my sort of way of being a little more provocative. I still think there's way too much emphasis on data science and not enough emphasis on the average business analyst who's doing work in the Fortune 500. >> It should be kind of the same thing. I mean, with data science you're just more of an advanced analyst maybe. >> Right. But the idea that every person who works with data is suddenly going to understand different types of machine learning models, and what's the right way to do hyper parameter tuning, and other words that I could throw at you to show that I'm smart. (laughter) >> You guys have a vision with the Excel thing. I could see how you see that perspective because you see a future. I just think we're not there yet because I think the data scientists are still handcuffed and hamstrung by the fact that they're doing too much provisioning work, right? >> Yeah. >> To you're point about >> surfacing the insights, it's like the data scientists, "Oh, you own it now!" They become the sysadmin, if you will, for their department. And it's like it's not their job. >> Well, we need to get them out of data preparation, right? >> Yeah, get out of that. >> You shouldn't be a data scientist-- >> Right now, you have two values. You've got the use interface value, which I love, but you guys do the automation. So, I think we're getting there. I see where you're coming from, but still those data sciences have to set the tone for the generation, right? So, it's kind of like you got to get those guys productive. >> And it's not a .. Please go ahead. >> I mean, it's somewhat interesting if you look at can the data scientist start to collaborate a little bit more with the common business person? You start to think about it as a little bit of scientific inquiry process. >> John: Yeah. >> Right? >> If you can have more innovators around the table in a common place to discuss what are the insights in this data, and people are bringing business perspective together with machine learning perspective, or the knowledge of the higher algorithms, then maybe you can bring those next leaps forward. >> Great insight. If you want my observations, I use the crazy analogy. Here's my crazy analogy. Years it's been about the engine Model T, the car, the horse and buggy, you know? Now, "We got an engine in the car!" And they got wheels, it's got a chassis. And so, it's about the apparatus of the car. And then it evolved to, "Hey, this thing actually drives. It's transportation." You can actually go from A to B faster than the other guys, and people still think there's a horse and buggy market out there. So, they got to go to that. But now people are crashing. Now, there's an art to driving the car. >> Right. >> So, whether you're a sports car or whatever, this is where the value piece I think hits home is that, people are driving the data now. They're driving the value proposition. So, I think that, to me, the big surprise here is how people aren't getting into the hype cycle. They like the hype in terms of lead gen, and A.I., but they're too busy for the hype. It's like, drive the value. This is not just B.S. either, outcomes. It's like, "I'm busy. I got security. I got app development." >> And I think they're getting smarter about how their valuing data. We're starting to see some economic models, and some ways of putting actual numbers on what impact is this data having today. We do a lot of usage analysis with our customers, and looking at they have a goal to distribute data across more of the organization, and really get people using it in a self-service manner. And from that, you're being able to calculate what actually is the impact. We're not just storing this for insurance policy reasons. >> Yeah, yeah. >> And this cheap-- >> John: It's not some POC. Don't do a POC. All right, so we're going to end the day and the segment on you guys having the last word. I want to phrase it this way. Share an anecdotal story you've heard from a customer, or a prospective customer, that looked at your product, not the joint product but your products each, that blew you away, and that would be a good thing to leave people with. What was the coolest or nicest thing you've heard someone say about Alation and Paxata? >> For me, the coolest thing they said, "This was a social network for nerds. I finally feel like I've found my home." (laughter) >> Data nerds, okay. >> Data nerds. So, if you're a data nerd, you want to network, Alation is the place you want to be. >> So, there is like profiles? And like, you guys have a profile for everybody who comes in? >> Yeah, so the interesting thing is part of our automation, when we go and we index the data sources we also index the people that are accessing those sources. So, you kind of have a leaderboard now of data users, that contract one another in system. >> John: Ooh. >> And at eBay leader was this guy, Caleb, who was their data scientist. And Caleb was famous because everyone in the organization would ask Caleb to prepare data for them. And Caleb was like well known if you were around eBay for awhile. >> John: Yeah, he was the master of the domain. >> And then when we turned on, you know, we were indexing tables on teradata as well as their Hadoop implementation. And all of a sudden, there are table structures that are Caleb underscore cussed. Caleb underscore revenue. Caleb underscore ... We're like, "Wow!" Caleb drove a lot of teradata revenue. (Laughs) >> Awesome. >> Paxata, what was the coolest thing someone said about you in terms of being the nicest or coolest most relevant thing? >> So, something that a prospect said earlier this week is that, "I've been hearing in our personal lives about self-driving cars. But seeing your product and where you're going with it I see the path towards self-driving data." And that's really what we need to aspire towards. It's not about spending hours doing prep. It's not about spending hours doing manual inventories. It's about getting to the point that you can automate the usage to get to the outcomes that people are looking for. So, I'm looking forward to self-driving information. Nenshad, thanks so much. Stephanie from Alation. Thanks so much. Congratulations both on your success. And great to see you guys partnering. Big, big community here. And just the beginning. We see the big waves coming, so thanks for sharing perspective. >> Thank you very much. >> And your color commentary on our wrap up segment here for Big Data NYC. This is theCUBE live from New York, wrapping up great three days of coverage here in Manhattan. I'm John Furrier. Thanks for watching. See you next time. (upbeat techo music)