>> from our studios in the heart of Silicon Valley, Palo Alto, California It is >> a cute conversation. Hey, welcome back. Get ready. Geoffrey here with the Cube. We're gonna rip out the studios for acute conversation. It's the middle of the summer, the conference season to slow down a little bit. So we get a chance to do more cute conversation, which is always great. Excited of our next guest. He's Ridge, IP, Ops Statik. He's a VP and GM from key. Cite, Reject. Great to see you. >> Thank you for hosting us. >> Yeah. So we've had Marie on a couple of times. We had Bethany on a long time ago before the for the acquisition. But for people that aren't familiar with key site, give us kind of a quick overview. >> Sure, sure. So I'm within the excess solutions group Exhale really started was founded back in 97. It I peered around 2000 really started as a test and measurement company quickly after the I poet became the number one vendor in the space, quickly grew around 2012 and 2013 and acquired two companies Net optics and an ooey and net optics and I knew we were in the visibility or monitoring space selling taps, bypass witches and network packet brokers. So that formed the Visibility Group with a nice Xia. And then around 2017 key cite acquired Xia and we became I S G or extra Solutions group. Now, key site is also a very large test and measurement company. It is the actual original HB startup that started in Palo Alto many years ago. An HB, of course, grew, um it also started as a test and measurement company. Then later on it, it became a get a gun to printers and servers. HB spun off as agile in't, agile in't became the test and measurement. And then around 2014 I would say, or 15 agile in't spun off the test and measurement portion that became key site agile in't continued as a life and life sciences organization. And so key sites really got the name around 2014 after spinning off and they acquired Xia in 2017. So more joy of the business is testing measurement. But we do have that visibility and monitoring organization to >> Okay, so you do the test of measurement really on devices and kind of pre production and master these things up to speed. And then you're actually did in doing the monitoring in life production? Yes, systems. >> Mostly. The only thing that I would add is that now we are getting into live network testing to we see that mostly in the service provider space. Before you turn on the service, you need to make sure that all the devices and all the service has come up correctly. But also we're seeing it in enterprises to, particularly with security assessments. So reach assessment attacks. Security is your eye to organization really protecting the network? So we're seeing that become more and more important than they're pulling in test, particularly for security in that area to so as you. As you say, it's mostly device testing. But then that's going to network infrastructure and security networks, >> Right? So you've been in the industry for a while, you're it. Until you've been through a couple acquisitions, you've seen a lot of trends, so there's a lot of big macro things happening right now in the industry. It's exciting times and one of the ones. Actually, you just talked about it at Cisco alive a couple weeks ago is EJ Computer. There's a lot of talk about edges. Ej the new cloud. You know how much compute can move to the edge? What do you do in a crazy oilfield? With hot temperatures and no powers? I wonder if you can share some of the observations about EJ. You're kind of point of view as to where we're heading. And what should people be thinking about when they're considering? Yeah, what does EJ mean to my business? >> Absolutely, absolutely. So when I say it's computing, I typically include Io TI agent. It works is along with remote and branch offices, and obviously we can see the impact of Io TI security cameras, thermal starts, smart homes, automation, factory automation, hospital animation. Even planes have sensors on their engines right now for monitoring purposes and diagnostics. So that's one group. But then we know in our everyday lives, enterprises are growing very quickly, and they have remote and branch offices. More people are working from remotely. More people were working from home, so that means that more data is being generated at the edge. What it's with coyote sensors, each computing we see with oil and gas companies, and so it doesn't really make sense to generate all that data. Then you know, just imagine a self driving car. You need to capture a lot of data and you need to process. It just got really just send it to the cloud. Expect a decision to mate and then come back and so that you turn left or right, you need to actually process all that data, right? We're at the edge where the source of the data is, and that means pushing more of that computer infrastructure closer to the source. That also means running business critical applications closer to the source. And that means, you know, um, it's it's more of, ah, madness, massively distributed computer architecture. Um, what happens is that you have to then reliably connect all these devices so connectivity becomes important. But as you distribute, compute as well as applications, your attack surface increases right. Because all of these devices are very vulnerable. We're probably adding about 5,000,000 I ot devices every day to our network, So that's a lot of I O T. Devices or age devices that we connect many of these devices. You know, we don't really properly test. You probably know from your own home when you can just buy something and could easily connect it to your wife. I Similarly, people buy something, go to their work and connect to their WiFi. Not that device is connected to your entire network. So vulnerabilities in any of these devices exposes the entire network to that same vulnerability. So our attack surfaces increasing, so connection reliability as well as security for all these devices is a challenge. So we enjoy each computing coyote branch on road officers. But it does pose those challenges. And that's what we're here to do with our tech partners. Toe sold these issues >> right? It's just instinct to me on the edge because you still have kind of the three big um, the three big, you know, computer things. You got the networking right, which is just gonna be addressed by five g and a lot better band with and connectivity. But you still have store and you still have compute. You got to get those things Power s o a cz. You're thinking about the distribution of that computer and store at the edge versus in the cloud and you've got the Leighton see issue. It seems like a pretty delicate balancing act that people are gonna have to tune these systems to figure out how much to allocate where, and you will have physical limitations at this. You know the G power plant with the sure by now the middle of nowhere. >> It's It's a great point, and you typically get agility at the edge. Obviously, don't have power because these devices are small. Even if you take a room order branch office with 52 2 100 employees, there's only so much compute that you have. But you mean you need to be able to make decisions quickly. They're so agility is there. But obviously the vast amounts of computer and storage is more in your centralized data center, whether it's in your private cloud or your public cloud. So how do you do the compromise? When do you run applications at the edge when you were in applications in the cloud or private or public? Is that in fact, a compromise and year You might have to balance it, and it might change all the time, just as you know, if you look at our traditional history off compute. He had the mainframes which were centralized, and then it became distributed, centralized, distributed. So this changes all the time and you have toe make decisions, which which brings up the issue off. I would say hybrid, I t. You know, they have the same issue. A lot of enterprises have more of a, um, hybrid I t strategy or multi cloud. Where do you run the applications? Even if you forget about the age even on, do you run an on Prem? Do you run in the public cloud? Do you move it between class service providers? Even that is a small optimization problem. It's now even Matt bigger with H computer. >> Right? So the other thing that we've seen time and time again a huge trend, right? It's software to find, um, we've seen it in the networking space to compete based. It's offered to find us such a big write such a big deal now and you've seen that. So when you look at it from a test a measurement and when people are building out these devices, you know, obviously aton of great functional capability is suddenly available to people, but in terms of challenges and in terms of what you're thinking about in software defined from from you guys, because you're testing and measuring all this stuff, what's the goodness with the badness house for people, you really think about the challenges of software defined to take advantage of the tremendous opportunity. >> That's a really good point. I would say that with so far defined it working What we're really seeing is this aggregation typically had these monolithic devices that you would purchase from one vendor. That wonder vendor would guarantee that everything just works perfectly. What software defined it working, allows or has created is this desegregated model. Now you have. You can take that monolithic application and whether it's a server or a hardware infrastructure, then maybe you have a hyper visor or so software layer hardware, abstraction, layers and many, many layers. Well, if you're trying to get that toe work reliably, this means that now, in a way, the responsibility is on you to make sure that you test every all of these. Make sure that everything just works together because now we have choice. Which software packages should I install from which Bender This is always a slight differences. Which net Nick Bender should I use? If PJ smart Nick Regular Nick, you go up to the layer of what kind of ax elation should I use? D. P. D K. There's so many options you are responsible so that with S T N, you do get the advantage of opportunity off choice, just like on our servers and our PCs. But this means that you do have to test everything, make sure that everything works. So this means more testing at the device level, more testing at the service being up. So that's the predeployment stage and wants to deploy the service. Now you have to continually monitor it to make sure that it's working as you expected. So you get more choice, more diversity. And, of course, with segregation, you can take advantage of improvements on the hardware layer of the software layer. So there's that the segregation advantage. But it means more work on test as well as monitoring. So you know there's there's always a compromise >> trade off. Yeah, so different topic is security. Um, weird Arcee. This year we're in the four scout booth at a great chat with Michael the Caesars Yo there. And he talked about, you know, you talk a little bit about increasing surface area for attack, and then, you know, we all know the statistics of how long it takes people to know that they've been reach its center center. But Mike is funny. He you know, they have very simple sales pitch. They basically put their sniffer on your network and tell you that you got eight times more devices on the network than you thought. Because people are connecting all right, all types of things. So when you look at, you know, kind of monitoring test, especially with these increased surface area of all these, Iet devices, especially with bring your own devices. And it's funny, the H v A c seemed to be a really great place for bad guys to get in. And I heard the other day a casino at a casino, uh, connected thermometer in a fish tank in the lobby was the access point. How is just kind of changing your guys world, you know, how do you think about security? Because it seems like in the end, everyone seems to be getting he breached at some point in time. So it's almost Maur. How fast can you catch it? How do you minimize the damage? How do you take care of it versus this assumption that you can stop the reaches? You >> know, that was a really good point that you mentioned at the end, which is it's just better to assume that you will be breached at some point. And how quickly can you detect that? Because, on average, I think, according to research, it takes enterprise about six months. Of course, they're enterprise that are takes about a couple of years before they realize. And, you know, we hear this on the news about millions of records exposed billions of dollars of market cap loss. Four. Scout. It's a very close take partner, and we typically use deploy solutions together with these technology partners, whether it's a PM in P. M. But very importantly, security, and if you think about it, there's terabytes of data in the network. Typically, many of these tools look at the packet data, but you can't really just take those terabytes of data and just through it at all the tools, it just becomes a financially impossible toe provide security and deploy such tools in a very large network. So where this is where we come in and we were the taps, we access the data where the package workers was essentially groom it, filtering down to maybe tens or hundreds of gigs that that's really, really important. And then we feed it, feed it to our take partners such as Four Scout and many of the others. That way they can. They can focus on providing security by looking at the packets that really matter. For example, you know some some solutions only. Look, I need to look at the package header. You don't really need to see the send the payload. So if somebody is streaming Netflix or YouTube, maybe you just need to send the first mega byte of data not the whole hundreds of gigs over that to our video, so that allows them to. It allows us or helps us increase the efficiency of that tool. So the end customer can actually get a good R Y on that on that investment, and it allows for Scott to really look at or any of the tech partners to look at what's really important let me do a better job of investigating. Hey, have I been hacked? And of course, it has to be state full, meaning that it's not just looking at flow on one data flow on one side, looking at the whole communication. So you can understand What is this? A malicious application that is now done downloading other malicious applications and infiltrating my system? Is that a DDOS attack? Is it a hack? It's, Ah, there's a hole, equal system off attacks. And that's where we have so many companies in this in this space, many startups. >> It's interesting We had Tom Siebel on a little while ago actually had a W s event and his his explanation of what big data means is that there's no sampling air. And we often hear that, you know, we used to kind of prior to big day, two days we would take a sample of data after the fact and then tried to to do someone understanding where now the more popular is now we have a real time streaming engines. So now we're getting all the data basically instantaneously in making decisions. But what you just bring out is you don't necessarily want all the data all the time because it could. It can overwhelm its stress to Syria. That needs to be a much better management approach to that. And as I look at some of the notes, you know, you guys were now deploying 400 gigabit. That's right, which is bananas, because it seems like only yesterday that 100 gigabyte Ethan, that was a big deal a little bit about, you know, kind of the just hard core technology changes that are impacting data centers and deployments. And as this band with goes through the ceiling, what people are physically having to do, do it. >> Sure, sure, it's amazing how it took some time to go from 1 to 10 gig and then turning into 40 gig, but that that time frame is getting shorter and shorter from 48 2 108 100 to 400. I don't even know how we're going to get to the next phase because the demand is there and the demand is coming from a number of Trans really wants five G or the preparation for five G. A lot of service providers are started to do trials and they're up to upgrading that infrastructure because five G is gonna make it easier to access state of age quickly invest amounts of data. Whenever you make something easy for the consumer, they will consume it more. So that's one aspect of it. The preparation for five GS increasing the need for band with an infrastructure overhaul. The other piece is that we're with the neutralization. We're generating more Eastern West traffic, but because we're distributed with its computing, that East West traffic can still traverse data centers and geography. So this means that it's not just contained within a server or within Iraq. It actually just go to different locations. That also means your data center into interconnect has to support 400 gig. So a lot of network of hitmen manufacturers were typically call them. Names are are releasing are about to release 400 devices. So on the test side, they use our solutions to test these devices, obviously, because they want to release it based the standards to make sure that it works on. So that's the pre deployment phase. But once these foreign jiggy devices are deployed and typically service providers, but we're start slowly starting to see large enterprises deploy it as a mention because because of visualization and computing, then the question is, how do you make sure that your 400 gig infrastructure is operating at the capacity that you want in P. M. A. P M. As well as you're providing security? So there's a pre deployment phase that we help on the test side and then post deployment monitoring face. But five G is a big one, even though we're not. Actually we haven't turned on five year service is there's tremendous investment going on. In fact, key site. The larger organization is helping with a lot of these device testing, too. So it's not just Xia but key site. It's consume a lot of all of our time just because we're having a lot of engagements on the cellphone side. Uh, you know, decide endpoint side. It's a very interesting time that we're living in because the changes are becoming more and more frequent and it's very hot, so adapt and make sure that you're leading that leading that wave. >> In preparing for this, I saw you in another video camera. Which one it was, but your quote was you know, they didn't create electricity by improving candles. Every line I'm gonna steal it. I'll give you credit. But as you look back, I mean, I don't think most people really grown to the step function. Five g, you know, and they talk about five senior fun. It's not about your phone. It says this is the first kind of network built four machines. That's right. Machine data, the speed machine data and the quantity of Mr Sheen data. As you sit back, What kind of reflectively Again? You've been in this business for a while and you look at five G. You're sitting around talking to your to your friends at a party. So maybe some family members aren't in the business. How do you How do you tell them what this means? I mean, what are people not really seeing when they're just thinking it's just gonna be a handset upgrade there, completely missing the boat? >> Yeah, I think for the for the regular consumer, they just think it's another handset. You know, I went from three G's to 40 year. I got I saw bump in speed, and, you know, uh, some handset manufacturers are actually advertising five G capable handsets. So I'm just going to be out by another cell phone behind the curtain under the hurt. There's this massive infrastructure overhaul that a lot of service providers are going through. And it's scary because I would say that a lot of them are not necessarily prepared. The investment that's pouring in is staggering. The help that they need is one area that we're trying to accommodate because the end cell towers are being replaced. The end devices are being replaced. The data centers are being upgraded. Small South sites, you know, Um, there's there's, uh how do you provide coverage? What is the killer use case? Most likely is probably gonna be manufacturing just because it's, as you said mission to make mission machine learning Well, that's your machine to mission communication. That's where the connected hospitals connected. Manufacturing will come into play, and it's just all this machine machine communication, um, generating vast amounts of data and that goes ties back to that each computing where the edge is generating the data. But you then send some of that data not all of it, but some of that data to a centralized cloud and you develop essentially machine learning algorithms, which you then push back to the edge. The edge becomes a more intelligent and we get better productivity. But it's all machine to machine communication that, you know, I would say that more of the most of the five communication is gonna be much information communication. Some small portion will be the consumers just face timing or messaging and streaming. But that's gonna be there exactly. Exactly. That's going to change. I'm of course, we'll see other changes in our day to day lives. You know, a couple of companies attempted live gaming on the cloud in the >> past. It didn't really work out just because the network latency was not there. But we'll see that, too, and was seeing some of the products coming out from the lecture of Google into the company's where they're trying to push gaming to be in the cloud. It's something that we were not really successful in the past, so those are things that I think consumers will see Maur in their day to day lives. But the bigger impact is gonna be for the for the enterprise >> or jet. Thanks for ah, for taking some time and sharing your insight. You know, you guys get to see a lot of stuff. You've been in the industry for a while. You get to test all the new equipment that they're building. So you guys have a really interesting captaincy toe watches developments. Really exciting times. >> Thank you for inviting us. Great to be here. >> All right, Easier. Jeff. Jeff, you're watching the Cube. Where? Cube studios and fellow out there. Thanks for watching. We'll see you next time.

(upbeat music) >> From our studios in the heart of Silicon Valley, Palo Alto, California, this is a CUBEConversation. >> Hi everyone, welcome to the special CUBEConversation. We're in Palo Alto, California, at theCUBE studio. I'm John Furrier, co-host of the CUBE. We're here with Chris Yeh. He's the co-founder and general partner of Blitzscaling Ventures, author of the book Blitzscaling with Reid Hoffman, founder of LinkedIn and a variety of other ventures, also a partner at Greylock Partners. Chris, great to see you. I've known you for years. Love the book, love Reid. You guys did a great job. So congratulations. But the big news is you're now a TV star as one of the original inaugural contestants on the Mental Samurai, just premiered on Fox, was it >> On Fox. >> On Fox, nine o'clock, on which days? >> So Mental Samurai is on Fox, Tuesdays at 9 p.m. right after Master Chef Junior. >> Alright. So big thing. So successful shows. Take us through the journey. >> Yeah. >> It's a new show, so it's got this kind of like Jeopardy vibe where they got to answer tough questions in what looks like a roller coaster kind of arm that moves you around from station to station, kind of jar you up. But it's a lot of pressure, time clock and hard questions. Tell us about the format. How you got that. Gives all the story. >> So the story behind Mental Samurai is it's from the producers of American Ninja Warrior, if you've ever seen that show. So American Ninja Warrior is a physical obstacle course and these incredible athletes go through and the key is to get through the obstacle course. If you miss any of the obstacles, you're out. So they took that and they translated it to the mental world and they said, okay, we're going to have a mental obstacle course where you going to have different kinds of questions. So they have memory questions, sequence questions, knowledge questions, all these things that are tapping different elements of intelligence. And in order to win at the game, you have to get 12 questions right in five minutes or less. And you can't get a single question wrong. You have to be perfect. >> And they do try to jar you up, to kind of scrabble your brain with those devices, it makes it suspenseful. In watching last night at your watch party in Palo Alto, it's fun to watch because yeah, I'm like, okay, it's going to be cool. I'll support Chris. I'll go there, be great and on TV, and oh my, that's pretty interesting. It was actually riveting. Intense. >> Yeah. You have that element of moving around from station to station and it's dramatic. It's kind of a theater presence. But what's it like in there? Give us some insight. You're coming on in April 30th so you're yet to come on. >> Yes. >> But the early contestants, none of them made it to the 100,000. Only one person passed the first threshold. >> Right >> Take us through the format. How many thresholds are there? What's the format? >> Perfect, so basically when a competitor gets strapped into the chair, they call it Ava, it's like a robot, and basically they got it from some company in Germany and it has the ability to move 360 degrees. It's like an industrial robot or something. It makes you feel like you're an astronaut or in one those centrifugal force things. And the idea is they're adding to the pressure. They're making it more of a challenge. Instead of just Jeopardy where you're sitting there, and answering questions and bantering with Alex Trebek, you're working against the clock and you're being thrown around by this robot. So what happens is first you try to answer 12 questions correctly in less than five minutes. If you do that, then you make it through to the next round, what they call the circle of samurai and you win $10,000. The circle of samurai, what happens is there are four questions and you get 90 seconds plus whatever you have left over from your first run, to answer those four questions. Answer all four questions correctly, you win $100,000 and the official title of Mental Samurai. >> So there's only two levels, circle of samurai but it gets harder. Now also I noticed that it's, their questions have certain puzzles and there's certain kinds of questions. What's the categories, if you will, what's the categories they offer? >> Yes, so the different categories are knowledge, which is just classic trivia, it's a kind of Jeopardy stuff. There's memory, where they have something on screen that you have to memorize, or maybe they play an audio track that you have to remember what happened. And then there's also sequence where you have to put things in order. So all these different things are represented by these different towers which are these gigantic television screens where they present the questions. And the idea is in order to be truly intelligent, you have to be able to handle all of these different things. You can't just have knowledge. You can't just have pop culture. You got to have everything. >> So on the candidates I saw some from Stanford. >> Yeah. >> I saw an athlete. It's a lot of diversity in candidates. How do they pick the candidates? How did you get involved? Did your phone ring up one day? Were you identified, they've read your blog. Obviously they've, you're smart. I've read your stuff on Facebook. How did you get in there? (laughs) >> Excellent question. So the whole process, there's a giant casting department that does all these things. And there's people who just cast people for game shows. And what happened with me is many years ago back in 2014, my sister worked in Hollywood when I was growing up. She worked for ER and Baywatch and other companies and she still keeps track of the entertainment industry. And she sent me an email saying, hey, here's a casting call for a new show for smart people and you should sign up. And so I replied to the email and said hey I'm Chris Yeh. I'm this author. I graduate from Stanford when I was 19, blah blah blah blah. I should be on your show. And they did a bunch of auditions with me over the phone. And they said we love you, the network loves you. We'll get in touch and then I never heard. Turns out that show never got the green light. And they never even shot that show. But that put me on a list with these various casting directors. And for this show it turns out that there was an executive producer of the show, the creator of the show, his niece was the casting director who interviewed me back in 2014. And she told her uncle, hey, there's this guy, Chris Yeh, in Palo Alto. I think would be great for this new show you're doing. Why don't you reach out to him. So they reached out to me. I did a bunch of Skype auditions. And eventually while I was on my book tour for Blitzscaling, I got the email saying, congratulations, you're part of the season one cast. >> And on the Skype interviews, was it they grilling you with questions, or was it doing a mock dry run? What was some of interview vetting questions? >> So they start off by just asking you about yourself and having you talk about who you are because the secret to these shows is none of the competitors are famous in advance, or at least very few of them are. There was a guy who was a major league baseball pitcher, there's a guy who's an astronaut, I mean, those guys are kind of famous already, but the whole point is, they want to build a story around the person like they do with the Olympics so that people care whether they succeed or not. And so they start off with biographical questions and then they proceed to basically use flash cards to simulate the game and see how well you do. >> Got it, so they want to basically get the whole story arc 'cause Chris, obviously Chris is smart, he passed the test. Graduate when he's 19. Okay, you're book smart. Can you handle the pressure? If you do get it, there's your story line. So they kind of look from the classic, kind of marketing segmentation, demographics is your storylines. What are some of the things that they said to you on the feedback? Was there any feedback, like you're perfect, we like this about you. Or is it more just cut and dry. >> Well I think they said, we love your energy. It's coming through very strongly to the screen. That's fantastic. We like your story. Probably the part I struggle the most with, was they said hey, you know, talk to us about adversity. Talk to us about the challenges that you've overcome. And I tell people, listen, I'm a very lucky guy. A lot of great things have happened to me in life. I don't know if there's that much adversity that I can really complain about. Other people who deal with these life threatening illnesses and all this stuff, I don't have that. And so that was probably the part I struggled the most with. >> Well you're certainly impressive. I've known you for years. You're a great investor, a great person. And a great part of Silicon Valley. So congratulations, good luck on the show. So it's Tuesdays. >> 9 p.m. >> 9 p.m. >> On fox. >> On Fox. Mental Samurai. Congratulations, great. Great to be at the launch party last night. The watch party, there'll be another one. Now your episode comes out on April 30th. >> Yes. So on April 30th we will have a big Bay area-wide watch party. I'm assuming that admission will be free, assuming I find the right sponsors. And so I'll come back to you. I'll let you know where it's going to be. Maybe we should even film the party. >> That's, well, I got one more question on the show. >> Yeah. >> You have not been yet on air so but you know the result. What was it like sitting in the chair, I mean, what was it personally like for you? I mean you've taken tests, you've been involved with the situation. You've made some investments. There's probably been some tough term sheets here and there, board meetings. And all that experience in your life, what was it compared to, what was it like? >> Well, it's a really huge adrenaline rush because if you think about there's so many different elements that already make it an adrenaline rush and they all combine together. First of all, you're in this giant studio which looks like something out of a space-age set with this giant robotic arm. There's hundreds of people around cheering. Then you're strapped into a robotic arm which basically makes you feel like an astronaut, like every run starts with you facing straight up, right? Lying back as if you're about to be launched on a rocket. And then you're answering these difficult questions with time pressure and then there's Rob Lowe there as well that you're having a conversation with. So all these things together, and your heart, at least for me, my heart was pounding. I was like trying very hard to stay calm because I knew it was important to stay clam, to be able to get through it. >> Get that recall, alright. Chris, great stuff. Okay, Blitzscaling. Blitzscaling Ventures. Very successful concept. I remember when you guys first started doing this at Stanford, you and Reid, were doing the lectures at Stanford Business School. And I'm like, I love this. It's on YouTube, kind of an open project initially, wasn't really, wasn't really meant to be a book. It was more of gift, paying it forward. Now it's a book. A lot of great praise. Some criticism from some folks but in general it's about scaling ventures, kind of the Silicon Valley way which is the rocket ship I call. The rocket ship ventures. There's still the other venture capitals. But great book. Feedback from the book and the original days at Stanford. Talk about the Blitzscaling journey. >> And one of the things that happened when we did the class at Stanford is we had all these amazing guests come in and speak. So people like Eric Schmidt. People like Diane Greene. People like Brian Chesky, who talked about their experiences. And all of those conversations really formed a key part of the raw material that went into the book. We began to see patterns emerge. Some pretty fascinating patterns. Things like, for example, a lot of companies, the ones that'd done the best job of maintaining their culture, have their founders involved in hiring for the first 500 employees. That was like a magic number that came up over and over again in the interviews. So all this content basically came forward and we said, okay, well how do we now take this and put it into a systematic framework. So the idea of the book was to compress down 40 hours of video content, incredible conversations, and put it in a framework that somebody could read in a couple of hours. >> It is also one of those things where you get lightning in a ball, the classic and so then I'd say go big or go home. But Blitzscaling is all about something new and something different. And I'm reading a book right now called Loonshots, which is a goof on moonshots. It's about the loonies who start the real companies and a lot of companies that are successful like Airbnb was passed over on and they call those loonies. Those aren't moonshots. Moonshots are well known, build-outs. This is where the blitzscaling kind of magic happens. Can you just share your thoughts on that because that's something that's not always talked about in the mainstream press, is that a lot of there blitzscaling companies, are the ones that don't look good on paper initially. >> Yes. >> Or ones that no one's talking about is not in a category or herd mentality of investors. It's really that outlier. >> Yes. >> Talk about that dynamic. >> Yeah, and one of the things that Reid likes to say is that the best possible companies usually sound like they're dumb ideas. And in fact the best investment he's been a part of as a venture capitalist, those are the ones where there's the greatest controversy around the table. It's not the companies that come in and everyone's like this is a no-brainer, let's do it. It's the companies where there's a big fight. Should we do this, should we not? And we think the reason is this. Blitzscaling is all about being able to be the first to scale and the winner take most or the winner take all market. Now if you're in a market where everyone's like, this is a great market, this is a great idea. You're going to have huge competition. You're going to have a lot of people going after it. It's very difficult to be the first to scale. If you are contrarian and right you believe something that other people don't believe, you have the space to build that early lead, that you can then use to leverage yourself into that enduring market leadership. >> And one of the things that I observed from the videos as well is that the other fact that kind of plays into, I want to get your reaction, this is that there has to be a market shift that goes on too because you have to have a tailwind or a wave to ride because if you can be contrarian if there's no wave, >> Right. >> right? so a lot of these companies that you guys highlight, have the wave behind them. It was mobile computing, SaaSification, cloud computing, all kind of coming together. Talk about that dynamic and your reaction 'cause that's something where people can get confused on blitzscaling. They read the book. Oh I'm going to disrupt the dry cleaning business. Well I mean, not really. I mean, unless there's something different >> Exactly. >> in market conditions. Talk about that. >> Yeah, so with blitzscaling you're really talking about a new market or a market that's transforming. So what is it that causes these things to transform? Almost always it's some new form of technological innovation, or perhaps a packaging of different technological innovations. Take mobile computing for example. Many of the components have been around for a while. But it took off when Apple was able to combine together capacitative touchscreens and the form factor and the processor strength being high enough finally. And all these things together created the technological innovation. The technological innovation then enables the business model innovation of building an app store and creating a whole new way of thinking about handheld computing. And then based on that business model innovation, you have the strategy innovation of blitzscaling to allow you to grow rapidly and keep from blowing up when you grow. >> And the spirit of kind of having, kind of a clean entrepreneurial segmentation here. Blitzscaling isn't for everybody. And I want you to talk about that because obviously the book's popular when this controversy, there's some controversy around the fact that you just can't apply blitzscaling to everything. We just talk about some of those factors. There are other entrepreneurialship models that makes sense but that might not be a fit for blitzscaling. Can you just unpack that and just explain, a minute to explain the difference between a company that's good for blitzscaling and one that isn't. >> Well, a key thing that you need for blitzscaling is one of these winner take most or winner take all markets that's just enormous and hugely valuable, alright? The whole thing about blitzscaling is it's very risky. It takes a lot of effort. It's very uncomfortable. So it's only worth doing when you have those market dynamics and when that market is really large. And so in the book we talk about there being many businesses that this doesn't apply to. And we use the example of two companies that were started at the same time. One company is Amazon, which is obviously a blitzscaling company and a dominant player and a great, great company. And the other is the French Laundry. In fact, Jeff Bezos started Amazon the same year that Thomas Keller started the French Laundry. And the French Laundry still serves just 60 people a day. But it's a great business. It's just a very different kind of business. >> It's a lifestyle or cash flow business and people call it a lifestyle business but mainly it's a cash flow or not a huge growing market. >> Yeah. >> Satisfies that need. What's the big learnings that you learned that was something different that you didn't know coming out of blitzscaling experience? Something that surprised you, something that might have shocked you, something that might have moved you. I mean you're well-read. You're smart. What was some learnings that you learned from the journey? >> Well, one of the things that was really interesting to me and I didn't really think about it. Reid and I come from the startup world, not the big company world. One of the things that surprised me is the receptivity of big companies to these ideas. And they explained it to me and they said, listen, you got to understand with a big company, you think it's just a big company growing at 10, 15% a year. But actually there's units that are growing at 100% a year. There's units that are declining at 50% a year. And figuring out how you can actually continue to grow new businesses quicker than your old businesses die is a huge thing for the big, established companies. So that was one of the things that really surprised me but I'm grateful that it appears that it's applicable. >> It's interesting. I had a lot of conversations with Michael Dell before, and before they went private and after they went private. He essentially was blitzscaling. >> Yeah. >> He said, I'm going to winner take most in the mature, somewhat declining massive IT enterprise spend against the HPs of the world, and he's doing it and VMware stock went to an all time high. So big companies can blitz scale. That's the learning. >> Exactly. And the key thing to remember there is one of the reasons why somebody like Michael Dell went private to do this is that blitzscaling is all about prioritizing speed over efficiency. Guess who doesn't like that? Wall street doesn't like because you're taking a hit to earnings as you invest in a new business. GM for example is investing heavily in autonomous vehicles and that investment is not yet delivering cash but it's something that's going to create a huge value for General Motors. And so it's really tough to do blitzscaling as a publicly traded company though there are examples. >> I know your partner in the book, Reid Hoffman as well as in the blitzscaling at Stanford was as visible in both LinkedIn and as the venture capitalist of Greylock. But also he was involved with some failed startups on the front end of LinkedIn. >> Yeah. >> So he had some scar tissue on social networking before it became big, I'll say on the knowledge graph that he's building, he built at LinkedIn. I'm sure he had some blitzscaling lessons. What did he bring to the table? Did he share anything in the classes or privately with you that you can share that might be helpful for people to know? >> Well, there's a huge number of lessons. Obviously we drew heavily on Reid's life for the book. But I think you touched on something that a lot of people don't know, which is that LinkedIn is not the first social network that Reid created. Actually during the dot-com boom Reid created a company called SocialNet that was one of the world's first social networks. And I actually was one of the few people in the world who signed up and was a member of SocialNet. I think I had the handle, net revolutionary on that if you can believe that. And one of the things that Reid learned from his SocialNet experience turned into one of his famous sayings, which is, if you're not embarrassed by your first product launch, you've launched too late. With SocialNet they spent so much time refining the product and trying to get it perfectly right. And then when they launched it, they discovered what everyone always discovers when they launch, which is the market wants something totally different. We had no idea what people really wanted. And they'd wasted all this time trying to perfect something that they've theoretically thought was what the market wanted but wasn't actually what the market wanted. >> This is what I love about Silicon Valley. You have these kind of stories 'cause that's essentially agile before agile came out. They're kind of rearranging the deck chairs trying to get the perfect crafted product in a world that was moving to more agility, less craftsmanship and although now it's coming back. Also I talked to Paul Martino, been on theCUBE before. He's a tribe with Pincus. And it's been those founding fathers around these industries. It's interesting how these waves, they start off, they don't get off the ground, but that doesn't mean the category's dead. It's just a timing issue. That's important in a lot of ventures, the timing piece. Talk about that dynamic. >> Absolutely. When it comes to timing, you think about blitzscaling. If you start blitzscaling, you prioritize speed over efficiency. The main question is, is it the right time. So Webvan could be taken as an example of blitzscaling. They were spending money wildly inefficiently to build up grocery delivery. Guess what? 2000 was not the right time for it. Now we come around, we see Instacart succeeding. We see other delivery services delivering some value. It just turns out that you have to get the timing right. >> And market conditions are critical and that's why blitzscaling can work when the conditions are right. Our days back in the podcast, it was, we were right but timing was off. And this brings up the question of the team. >> Yeah. >> You got to have the right team that can handle the blitzscaling culture. And you need the right investors. You've been on both sides of the table. Talk about that dynamic because I think this is probably one of the most important features because saying you going to do blitzscaling and then getting buy off but not true commitment from the investors because the whole idea is to plow money into the system. You mentioned Amazon, one of Jeff Bezos' tricks was, he always poured money back into his business. So this is a capital strategy, as well financial strategy capital-wise as well as a business trait. Talk about the importance of having that stomach and the culture of blitzscaling. >> Absolutely. And I think you hit on something very important when you sort of talk about the importance of the investors. So Reid likes to refer to investors as financing partners. Or financing co-founders, because really they're coming on with you and committing to the same journey that you're going on. And one of the things I often tell entrepreneurs is you really have to dig deep and make sure you do more due diligence on your investors than you would on your employees. Because if you think about it, if you hire an employee, you can actually fire them. If you take money from an investor, there's no way you can ever get rid of them. So my advice to entrepreneurs is always, well, figure out if they're going to be a good partner for you. And the best way to do that is to go find some of the entrepreneurs they backed who failed and talked to those people. >> 'Cause that's where the truth will come out. >> Well, that's right. >> We stood by them in tough times. >> Exactly. >> I think that's classic, that's perfect but this notion of having the strategies of the elements of the business model in concert, the financial strategy, the capital strategy with the business strategy and the people strategy, all got to be pumping that can't be really any conflict on that. That's the key point. >> That's right, there has to be alignment because again, you're trying to go as quickly as possible and if you're running a race car and you have things that are loose and rattling around, you're not going to make it across the finish line. >> You're pulling for a pit stop and the guys aren't ready to change the tires, (snapping fingers) you know you're out of sync. >> Bingo. >> Chris, great stuff. Blitzscaling is a great book. Check it out. I recommend it, remember blitz scale is not for anyone, it's for the game changers. And again, picking your investors is critical on this. So if you picked the wrong investors, blitzscaling will blow up in a bad way. So don't, don't, pick properly on the visa and pick your team. Chris, so let's talk about you real quick to end the segment and the last talk track. Talk about your background 'cause I think you have a fascinating background. I didn't know that you graduated when you're 19, from Stanford was it? >> Yes. >> Stanford at 19, that's a great accomplishment. You've been an entrepreneur. Take us through your journey. Give us a quick highlight of your career. >> So the quick highlight is I grew up in Southern California and Santa Monica where I graduated from Santa Monica High School along with other luminaries such as Rob Lowe, Robert Downey, Jr., and Sean Penn. I didn't go at the same time that they did. >> They didn't graduate when they were 17. >> They did not, (John laughing) and Charlie Sheen also attended Santa Monica High School but dropped out or was expelled. (laughing) Go figured. >> Okay. >> I came up to Stanford and I actually studied creative writing and product design. So I was really hitting both sides of the brain. You could see that really coming through in the rest of my career. And then at the time I graduated which was the mid-1990s that was when the internet was first opening up. I was convinced the internet was going to be huge and so I just went straight into the internet in 1995. And have been in the startup world ever since. >> Must love that show, Halt and Catch Fire a series which I love reminiscing. >> AMC great show. >> Just watching that my life right before my eyes. Us old folks. Talk about your investment. You are at Wasabi Ventures now. Blitzscaling Ventures. You guys looks like you're going to do a little combination bring capital around blitzscaling, advising. What's Blitzscaling Ventures? Give a quick commercial. >> So the best way to think about it is for the entrepreneurs who are actually are blitzscaling, the question is how are you going to get the help you need to figure out how to steer around the corners to avoid the pitfalls that can occur as you're growing rapidly. And Blitzscaling Ventures is all about that. So obviously I bring a wealth of experience, both my own experience as well as everything I learned from putting this book together. And the whole goal of Blitzscaling Ventures is to find those entrepreneurs who have those blitzscalable opportunities and help them navigate through the process. >> And of course being a Mental Samurai that you are, the clock is really important on blitzscaling. >> There are actually are a lot of similarities between the startup world and Mental Samurai. Being able to perform under pressure, being able to move as quickly as possible yet still be accurate. The one difference of course is in our startup world you often do make mistakes. And you have a chance to recover from them. But in Mental Samurai you have to be perfect. >> Speed, alignment, resource management, capital deployment, management team, investors, all critical factors in blitzscaling. Kind of like entrepreneurial going to next level. A whole nother lesson, whole nother battlefields. Really the capital markets are flush with cash. Post round B so if you can certainly get altitude there's a ton of capital. >> Yeah. And the key is that capital is necessary for blitzscaling but it's not sufficient. You have to take that financial capital and you have to figure out how to combine it with the human capital to actually transform the business in the industry. >> Of course I know you've got to catch a plane. Thanks for coming by in the studio. Congratulations on the Mental Samurai. Great show. I'm looking forward to April 30th. Tuesdays at 9 o'clock, the Mental Samurai. Chris will be an inaugural contestant. We'll see how he does. He's tight-lipped, he's not breaking his disclosure. >> I've got legal requirements. I can't say anything. >> Just say he's sticking to his words. He's a man of his words. Chris, great to see you. Venture capitalist, entrepreneur, kind of venture you want to talk to Chris Yeh, co-founder, general partner of blitzscaling. I'm John Furrier for theCUBE. Thanks for watching. (upbeat music)