>> Narrator: theCUBE's live coverage is made possible by funding from Dell Technologies. Creating technologies that drive human progress. (upbeat music) >> Hey, welcome back to the Fira in Barcelona. My name is Dave Vellante. I'm here with David Nicholson, day four of MWC '23. Show's winding down a little bit, but it's still pretty packed here. Lot of innovation, planes, trains, automobiles, and we're talking 5G all week, private networks, connected breweries. It's super exciting. Really happy to have Warren Jackson here as the Edge Gateway Product Technologist at Dell Technologies, and Scott Waller, the CTO of the 5G Open Innovation Lab. Folks, welcome to theCUBE. >> Good to be here. >> Really interesting stories that we're going to talk about. Let's start, Scott, with you, what is the Open Innovation Lab? >> So it was hatched three years ago. Ideated about a bunch of guys from Microsoft who ran startup ventures program, started the developers program over at Microsoft, if you're familiar with MSDN. And they came three years ago and said, how does CSPs working with someone like T-Mobile who's in our backyard, I'm from Seattle. How do they monetize the edge? You need a developer ecosystem of applications and use cases. That's always been the thing. The carriers are building the networks, but where's the ecosystem of startups? So we built a startup ecosystem that is sponsored by partners, Dell being one sponsor, Intel, Microsoft, VMware, Aspirant, you name it. The enterprise folks who are also in the connectivity business. And with that, we're not like a Y Combinator or a Techstars where it's investment first and it's all about funding. It's all about getting introductions from a startup who might have a VR or AI type of application or observability for 5G slicing, and bring that in front of the Microsoft's of the world, or the Intel's and the Dell's of the world that they might not have the capabilities to do it because they're still a small little startup with an MVP. So we really incubate. We're the connectors and build a network. We've had 101 startups over the last three years. They've raised over a billion dollars. And it's really valuable to our partners like T-Mobile and Dell, et cetera, where we're bringing in folks like Expedo and GenXComm and Firecell. Start up private companies that are around here they were cohorts from our program in the past. >> That's awesome because I've often, I mean, I've seen Dell get into this business and I'm like, wow, they've done a really good job of finding these guys. I wonder what the pipeline is. >> We're trying to create the pipeline for the entire industry, whether it's 5G on the edge for the CSPs, or it's for private enterprise networks. >> Warren, what's this cool little thing you got here? >> Yeah, so this is very unique in the Dell portfolio. So when people think of Dell, they think of servers laptops, et cetera. But what this does is it's designed to be deployed at the edge in harsh environments and it allows customers to do analytics, data collection at the edge. And what's unique about it is it's got an extended temperature range. There's no fan in this and there's lots of ports on it for data ingestion. So this is a smaller box Edge Gateway 3200. This is the product that we're using in the brewery. And then we have a bigger brother of this, the Edge Gateway 5200. So the value of it, you can scale depending on what your edge compute requirements are at the edge. >> So tell us about the brewery story. And you covered it, I know you were in the Dell booth, but it's basically an analog brewery. They're taking measurements and temperatures and then writing it down and then entering it in and somebody from your company saw it and said, "We can help you with this problem." Explain the story. >> Yeah, so Scott and I did a walkthrough of the brewery back in November timeframe. >> It's in Framingham, Mass. >> Framingham, Mass, correct. And basically, we talked to him, and we said, what keeps you guys up at night? What's a problem that we can solve? Very simple, a kind of a lower budget, didn't have a lot money to spend on it, but what problem can we solve that will realize great benefit for you? So we looked at their fermentation process, which was completely analog. Somebody was walking around with a clipboard looking at analog gauges. And what we did is we digitized that process. So what this did for them rather than being completely reactive, and by the time they realized there was something going wrong with the fermentation process, it's too late. A batch of scrap. This allowed them to be proactive. So anytime, anywhere on the tablet or a phone, they can see if that fermentation process is going out of range and do something about it before the batch gets scrapped. >> Okay. Amazing. And Scott, you got a picture of this workflow here? >> Yeah, actually this is the final product. >> Explain that. >> As Warren mentioned, the data is actually residing in the industrial side of the network So we wanted to keep the IT/OT separation, which is critical on the factory floor. And so all the data is brought in from the sensors via digital connection once it's converted and into the edge gateway. Then there's a snapshot of it using Telit deviceWISE, their dashboarding application, that is decoding all the digital readings, putting them in a nice dashboard. And then when we gave them, we realized another problem was they're using cheap little Chromebooks that they spill beer on once a week and throw them out. That's why they bought the cheap ones 'cause they go through them so fast. So we got a Dell Latitude Rugged notebook. This is a brand new tablet, but they have the dashboarding software. So no matter if they're out there on the floor, but because the data resides there on the factory they have access to be able to change the parameters. This one's in the maturation cycle. This one's in the crashing cycle where they're bringing the temperature back down, stopping the fermentation process, getting it ready to go to the canning side of the house. >> And they're doing all that from this dashboard. >> They're doing all from the dashboard. They also have a giant screen that we put up there that in the floor instead of walking a hundred yards back behind a whole bunch of machinery equipment from a safety perspective, now they just look up on the screen and go, "Oh, that's red. That's out of range." They're actually doing a bunch of cleaning and a bunch of other things right now, too. So this is real time from Boston. >> Dave: Oh okay. >> Scott: This is actually real time from Boston. >> I'm no hop master, but I'm looking at these things flashing at me and I'm thinking something's wrong with my beer. >> We literally just lit this up last week. So we're still tweaking a few things, but they're also learning around. This is a new capability they never had. Oh, we have the ability to alert and monitor at different processes with different batches, different brews, different yeast types. Then now they're also training and learning. And we're going to turn that into eventually a product that other breweries might be able to use. >> So back to the kind of nuts and bolts of the system. The device that you have here has essentially wifi antennas on the back. >> Warren: Correct. >> Pull that up again if you would, please. >> Now I've seen this, just so people are clear, there are also paddle 5G antennas that go on the other side. >> Correct. >> That's sort of the connection from the 5G network that then gets transmogrified, technical term guys, into wifi so the devices that are physically connected to the brew vats, don't know what they're called. >> Fermentation tanks. >> Fermentation tanks, thank you. Those are wifi. That's a wifi signal that's going into this. Is that correct? >> Scott: No. >> No, it's not. >> It's a hard wire. >> Okay, okay. >> But, you're right. This particular gateway. >> It could be wifi if it's hard wire. >> It could be, yes. Could be any technology really. >> This particular gateway is not outfitted with 5G, but something that was very important in this application was to isolate the IT network, which is on wifi and physically connected from the OT network, which is the 5G connection. So we're sending the data directly from the gateway up to the cloud. The two partners that we worked with on this project were ifm, big sensor manufacturer that actually did the wired sensors into an industrial network called IO-Link. So they're physically wired into the gateway and then in the gateway we have a solution from our partner Telit that has deviceWISE software that actually takes the data in, runs the analytics on it, the logic, and then visualizes that data locally on those panels and also up to their cloud, which is what we're looking at. So they can look at it locally, they're in the plant and then up in the cloud on a phone or a tablet, whatever, when they're at home. >> We're talking about a small business here. I don't know how many employees they have, but it's not thousands. And I love that you're talking about an IT network and an OT network. And so they wanted, it is very common when we talk about industrial internet of things use cases, but we're talking about a tiny business here. >> Warren: Correct. >> They wanted to separate those networks because of cost, because of contention. Explain why. >> Yeah, just because, I mean, they're running their ERP system, their payroll, all of their kind of the way they run their business on their IT network and you don't want to have the same traffic out on the factory floor on that network, so it was pretty important. And the other thing is we really, one of the things that we didn't want to do in this project is interrupt their production process at all. So we installed this entire system in two days. They didn't have to shut down, they didn't have to stop. We didn't have to interrupt their process at all. It was like we were invisible there and we spun the thing up and within two days, very simple, easy, but tremendous value for their business. >> Talk about new markets here. I mean, it's like any company that's analog that needs to go digital. It's like 99% of the companies on the planet. What are you guys seeing out there in terms of the types of examples beyond breweries? >> Yeah, I could talk to that. So I spent a lot of time over the last couple years running my own little IoT company and a lot of it being in agriculture. So like in Washington state, 70% of the world's hops is actually grown in Washington state. It's my hometown. But in the Ag producing regions, there's lack of connectivity. So there's interest in private networks because the carriers aren't necessarily deploying it. But because we have the vast amount of hops there's a lot of IPAs, a lot of hoppy IPAs that come out of Seattle. And with that, there's a ton of craft breweries that are about the same size, some are a little larger. Anheuser-Busch and InBev and Heineken they've got great IoT platforms. They've done it. They're mass scale, they have to digitize. But the smaller shops, they don't, when we talk about IT/OT separation, they're not aware of that. They think it's just, I get local broadband and I get wifi and one hotspot inside my facility and it works. So a little bit of it was the education. I have got years in IT/OT security in my background so that education and we come forward with a solution that actually does that for them. And now they're aware of it. So now when they're asking questions of other vendors that are trying to sell them some type of solution, they're inherently aware of what should be done so they're not vulnerable to ransomware attacks, et cetera. So it's known as the Purdue Model. >> Well, what should they do? >> We came in and keep it completely separated and educated them because in the end too we'll build a design guide and a starter kit out of this that other brewers can use. Because I've toured dozens of breweries in Washington, the exact same scenario, analog gauges, analog process, very manual. And in the end, when you ask the brewer, what do they want out of this? It keeps them up at night because if the temperature goes out of range, because the chiller fails, >> They ruined. >> That's $30,000 lost in beer. That's a lot to a small business. However, it's also once they start digitizing the data and to Warren's point, it's read-only. We're not changing any of the process. We augmented on top of their existing systems. We didn't change their process. But now they have the ability to look at the data and see batch to batch consistency. Quality doesn't always mean best, it means consistency from batch to batch. Every beer from exhibit A from yesterday to two months from now of the same style of beer should be the same taste, flavor, boldness, et cetera. This is giving them the insights on it. >> It's like St. Louis Buds, when we were kids. We would buy the St. Louis Buds 'cause they tasted better than the Merrimack Buds. And then Budweiser made them all the same. >> Must be an East coast thing. >> It's an old guy thing, Dave. You weren't born yet. >> I was in high school. Yeah, I was in high school. >> We like the hops. >> We weren't 21. Do me a favor, clarify OT versus IT. It's something we talk about all the time, but not everyone's familiar with that separation. Define OT for me. >> It's really the factory floor. You got IT systems that are ERP systems, billing, you're getting your emails, stuff like that. Where the ransomware usually gets infected in. The OT side is the industrial control network. >> David: What's the 'O' stand for? >> Operation. >> David: Operation? >> Yeah, the operations side. >> 'Cause some people will think objects 'cause we think internet of things. >> The industrial operations, think of it that way. >> But in a sense those are things that are connected. >> And you think of that as they are the safety systems as well. So a machine, if someone doesn't push the stop button, you'd think if there's a lot of traffic on that network, it isn't guaranteed that that stop button actually stops that blade from coming down, someone's going to lose their arm. So it's very tied to safety, reliability, low latency. It is crafted in design that it never touches the internet inherently without having to go through a security gateway which is what we did. >> You mentioned the large companies like InBev, et cetera. You're saying they're already there. Are they not part of your target market? Or are there ways that you can help them? Is this really more of a small to mid-size company? >> For this particular solution, I think so, yeah. Because the cost to entry is low. I mean, you talk about InBev, they have millions of dollars of budgets to spend on OT. So they're completely automated from top to bottom. But these little craft brewers, which they're everywhere in the US. Vermont, Washington state, they're completely manual. A lot of these guys just started in their garage. And they just scaled up and they got a cult kind of following around their beers. One thing that we found here this week, when you talk around edge and 5G and beer, those things get people excited. In our booth we're serving beer, and all these kind of topics, it brings people together. >> And it lets the little guy compete more effectively with the big giants. >> Correct. >> And how do you do more with less as the little guy is kind of the big thing and to Warren's point, we have folks come up and say, "Great, this is for beer, but what about wine? What about the fermentation process of wine?" Same materials in the end. A vessel of some sort, maybe it's stainless steel. The clamps are the same, the sensors are the same. The parameters like temperature are key in any type of fermentation. We had someone talking about olive oil and using that. It's the same sanitary beverage style equipment. We grabbed sensors that were off the shelf and then we integrated them in and used the set of platforms that we could. How do we rapidly enable these guys at the lowest possible cost with stuff that's at the shelf. And there's four different companies in the solution. >> We were having a conversation with T-Mobile a little earlier and she mentioned the idea of this sounding scary. And this is a great example of showing that in fact, at a relatively small scale, this technology makes a lot of sense. So from that perspective, of course you can implement private 5G networks at an industrial scale with tens of millions of dollars of investment. But what about all of the other things below? And that seems to be a perfect example. >> Yeah, correct. And it's one of the things with the gateway and having flexibility the way Dell did a great job of putting really good modems in it. It had a wide spectrum range of what bands they support. So being able to say, at a larger facility, I mean, if Heineken wants to deploy something like this, oh, heck yeah, they probably could do it. And they might have a private 5G network, but let's say T-Mobile offers a private offering on their public via a slice. It's easy to connect that radio to it. You just change the sims. >> Is that how the CSPs fit here? How are they monetized? >> Yeah, correct. So one of our partners is T-Mobile and so we're working with them. We've got other telco partners that are coming on board in our lab. And so we'll do the same thing. We're going to take this back and put it in the lab and offer it up as others because the baseline building blocks or Lego blocks per se can be used in a bunch of different industries. It's really that starter point of giving folks the idea of what's possible. >> So small manufacturing, agriculture you mentioned, any other sort of use cases we should tune into? >> I think it's environmental monitoring, all of that stuff, I see it in IoT deployments all over the world. Just the simple starter kits 'cause a farmer doesn't want to get sold a solution, a platform, where he's got to hire a bunch of coders and partner with the big carriers. He just wants something that works. >> Another use case that we see a lot, a high cost in a lot of these places is the cost of energy. And a lot of companies don't know what they're spending on electricity. So a very simple energy monitoring system like that, it's a really good ROI. I'm going to spend five or $10,000 on a system like this, but I'm going to save $20,000 over a year 'cause I'm able to see, have visibility into that data. That's a lot of what this story's about, just giving visibility into the process. >> It's very cool, and like you said, it gets people excited. Is it a big market? How do you size it? Is it a big TAM? >> Yeah, so one thing that Dell brings to the table in this space is people are buying their laptops, their servers and whatnot from Dell and companies are comfortable in doing business with Dell because of our model direct to customer and whatnot. So our ability to bring a device like this to the OT space and have them have that same user experience they have with laptops and our client products in a ruggedized solution like this and bring a lot of partners to the table makes it easy for our customers to implement this across all kinds of industries. >> So we're talking to billions, tens of billions. Do we know how big this market is? What's the TAM? I mean, come on, you work for Dell. You have to do a TAM analysis. >> Yes, no, yeah. I mean, it really is in the billions. The market is huge for this one. I think we just tapped into it. We're kind of focused in on the brewery piece of it and the liquor piece of it, but the possibilities are endless. >> Yeah, that's tip of the spear. Guys, great story. >> It's scalable. I think the biggest thing, just my final feedback is working and partnering with Dell is we got something as small as this edge gateway that I can run a Packet Core on and run a 5G standalone node and then have one of the small little 5G radios out there. And I've got these deployed in a farm. Give the farmer an idea of what's possible, give him a unit on his tractor, and now he can do something that, we're providing connectivity he had never had before. But as we scale up, we've got the big brother to this. When we scale up from that, we got the telco size units that we can put. So it's very scalable. It's just a great suite of offerings. >> Yeah, outstanding. Guys, thanks for sharing the story. Great to have you on theCUBE. >> Good to be with you today. >> Stop by for beer later. >> You know it. All right, Dave Vellante for Dave Nicholson and the entire CUBE team, we're here live at the Fira in Barcelona MWC '23 day four. Keep it right there. (upbeat music)

>> Announcer: Live from Copenhagen, Denmark it's theCUBE covering KubeCon and CloudNativeCon Europe 2018. Brought to you by the Cloud Native Computing Foundation and it's ecosystem partners. >> Okay, welcome back everyone. We're live here in Copenhagen, Denmark. It's theCUBE's exclusive coverage of KubeCon 2018 Europe. I'm John Furrier with Lauren Cooney, my cohost this week. Our next guest Shiv Ramji, VP of Product at DigitalOcean, fast growing startup, now growing company. Congratulations, welcome to theCUBE. >> Thank you very much. >> So you guys got some hard news, you got product, Kubernetes product, and you guys just upgraded your status on CNCF. Let's jump into the product news real quick. What's the hard news? >> Yeah, so we just announced a Kubernetes product and service on our platform. And you know, we've had a lot of customers who've actually have been deploying Kubernetes on our platform, either themselves or through a managed provider. And a lot of customers, specifically businesses, have been asking us to provide native support for Kubernetes. So now this is native support for Kubernetes on the DigitalOcean platform. >> What does native support for customers mean specifically? Is it managing the workload down to, how, what level of granularity, I guess, is the question. Be specific about this support. >> Yeah, yeah. So essentially, typically developers who are deploying container workloads or Kubernetes workloads do this themselves. Now we make it very, very easy. So you can come into our platform and, within a few clicks, deploy a Kubernetes cluster with your typical integrations of monitoring or container registry and the Kubernetes dashboard. >> So you basically just select a couple features and they can go from there? It's just run a gun? >> It's just a few clicks and you are running. And the reason why we did that, and sort of the history of the company has really focused on removing friction for developers to get started. So we make it very, very easy from a product experience perspective, and also from a cost perspective. So we remove all the barriers for any team size to get started. And so that's why we've made the product very, very easy to use, very simple. And then we also plan to have a lot of tutorials around containers or containerizing an application and scaling in the microservices work. >> Lauren: That's great. >> Talk about the security aspect of it. It's been a big topic here. We were talking about it on our intro, Lauren and I, around, you know, that it's evolving in real time. Things are moving fast. Up front work needs to get done. How do your customers think about security in context of the Kubernetes offering? >> So we have a story for that. We are trying to essentially deploy some native integrations and some open source projects that help us do security scanning, so the goal is to essentially let our customers know of vulnerabilities that they may have based on the images that they are deploying. And you know, all of us are guilty of it. We will get a public container image and launch it, and then realize that there are some security flaws. So that's something we do want to address as we continue to roll out additional features throughout this year. >> I know we've interviewed you guys before, but I want you to just take a minute and explain, for the folks watching who might not know DigitalOcean, what you guys do, your value proposition, who you guys target, how you sell the product, what's the service, all that good stuff. Share a one minute update on what you guys do. >> So we are a New York based company that were founded in 2012 out of Techstars. And the value proposition is very simple in that we want to be the cloud platform for developers and their teams, so that they're focused on software that changes the world. And what that means is we take all the complexity in our product development process, essentially to make it very easy for a developer to go from concept or idea to production as fast as they can. Once they get there, we want to also enable them to scale reliably on our platform. And essentially, all of the features that we've launched have been driven by customer demand. So they tell us that, hey, we're scaling on your platform, we really need these additional features, and that's how we respond. So we're very developer-obsessed, and focus on that specific persona, and help them get to the cloud as quickly as possible. >> So you're solving the problem for the developer. Bait pain points are, what? >> So there are three. We think of learning as the first one, as a barrier to developers. So this is why we've built a library of tutorials. There are about 1400 plus tutorials. We get about three million unique visitors on our platform. And about 80% of our customers actually came from one of the tutorials. Right, so that's such a great source of >> Lauren: Documentation is so important. >> Documentation. So important. So that's our first one. The second one is building. This idea of let's remove all friction for you to go from zero, essentially an idea, to production as fast as possible. So there're two things we do there. One, we try to make the product very simple and easy to use. And two, we are very price competitive. So we have a very competitive price to performance ratio in the market, with the idea that, if you want to keep your total cost of operations as low as possible. And so, that's another reason why developers, teams, and also businesses are now, we are in their consideration set, because they're like, well developers love this product, and I can get a cost benefit. Why would I not do that? And then the last one is scaling, which is once you're growing your application, you're going to need ability to scale and support. And so we provide free support to all of our customers, regardless of the size of your workload or size of customer or business. And I think that's a very important value proposition for us. >> So who do you compete against? Like, who are a couple of your competitors? >> So, the best way to answer that is to see, so we go to our customers and see who they compare us with. And typically we are compared against AWS and Google. >> Lauren: Okay, okay. >> And so, they are the ones who will come to us and say, "Hey, we're about to launch an app, or we're considering moving our workloads, you know, here's what our setup looks like in Google or AWS. You know, can you provide us similar capabilities?" And a lot of the times tends to be, you know, our developers already love you. If you have this capabilities and features set, we would love to move our workloads. >> Well I think you've got a tremendous amount of active developers as well, correct? >> Yes, yes. >> So, and you're growing that exponentially. What is, kind of your growth look like, year over year? >> Yeah, so last year we signed the one millionth developer on our platform. There's essentially one million developers that have created an account on our platform. And we sometimes have developers who come in and out of our platforms, if you're done with your project, right, if you're a student. But we have about half a million active developers on our platform, and growing rapidly. And we also foster a community which is growing tremendously. So we've got about three and a half million active developers in our communities, reading articles, and going through Q&A, and posting very interesting projects. >> Those are some great numbers. I mean, they're up there with Salesforce growth. So that's tremendous. >> And also the other news is you're upgrading your membership. Cloud Native Compute Foundation, CNCF. Talk about that dynamic, why? Size, did you fall into new bucket or you guys are increasing your participation? What's the news? >> Yeah, I mean, we were founded really on this idea of we believe in helping the community, and so free and open source software is what we've built our business on. And so, as we got active with Kubernetes ourselves, and we've been using Kubernetes for two years internally, so we have lots of lessons of our own. And as we were bringing this product to market, it was only the right, it was the right time for us to really upgrade our membership to gold with the CNCF, with the goal of getting to their platinum level where we can contribute to standards and bodies and really influence the evolution of all the tooling around containers and microservices. So, it was the right, the timing was right, and it's the right evolution of us continuing to support the community. >> Making some good profit, contribute that, and help out CNCF. >> Shiven: Absolutely. >> As the VP of Product, you have the keys to the kingdom as they say, in the product management world. (laughing) You got to balance engineering management with product, and you got to look to the market for the, you know, the needs of the customers, and of course they're helping you. Big time developers aren't afraid to share their opinion of what they need. >> Shiven: Never. >> Pain points, that's a good, good, good, good job there. What is on the road map for you? What's next? How are you looking at short, mid, long-term evolution of DigitalOcean's product strategy? >> Yeah, so I'll break it down in three different areas. The first part is really having a core complete feature set for a modern application that's being built in the cloud. So this is where, over the last 12 months, we've developed, we've deployed, developed and deployed load balancers, cloud firewalls, object storage, block storage, a new control panel experience, and a bunch of networking features that we have released. And so, we have some new features coming this year, which allow you to do, you know, the VPC feature, specifically, that allows businesses to have private networking and peering. That's been a top requested feature, so that's something that's going to come later this year to round out our core platform. And then, beyond that, we have two or three different things that we're doing. So the first category is just having a better developer experience. So this is everything from the experience you have when you are launching any cloud resource, whether it's for a control panel, or API, or CLI. So, continue to make that frictionless. So we have a few updates coming there to our control panel, improvements to our API, and adding a bunch of integrations so that, if you're using different products to manage your cloud infrastructure, we make that very, very easy. The second thing is marketplaces. So, a lot of, as you know, lots of other providers have marketplaces and different versions of marketplaces. A lot of our customers and vendors are now coming to us saying, "You have a really big audience and customer base. We really want to integrate our products so we can make it easy for them to spin up those resources." So marketplaces is the second large category that we're working on later this year. We'll have a lot of updates on that. And the third one is tied to developer experience, but it's essentially the Kubernetes product that we're launching. We also have plans to enable a marketplace-like integrations, and a lot of the CICD integrations, so that once you're up and running with your cluster, you got to get your CICD pipelines and tooling working, so that's an area. >> I want to ask you about multicloud, and where you guys are at with multicloud, and kind of connecting to the other cloud providers that are competitors, but, you know, your users are going to want to use as well as your solution. >> Yeah, this is where I think Kubernetes fits really, really well with the multicloud story for us, which is why, sort of, why now for us. If your workloads are in Kubernetes, and this is why we are going to support all of the latest community versions that are available. If your workloads are in Kubernetes, it becomes very easy for you to move those over to our platform, and so. I think we're going to see a combination of sometimes customers will have split workloads, sometimes they'll run different types of workloads in our platform, and so I think Kubernetes really opens up that possibility >> Lauren: That's great. To do that. There's still some more tooling to be done, but that's essentially where we're at. >> How many employees you guys have now? What's the number? >> We are roughly north of 400. So still very small. >> Well, congratulations. You guys are a growing company. Great to have you on theCUBE. Thanks for sharing the news. >> Thank you very much. >> Absolutely. >> Great job. DigitalOcean. You know, hot startup, growing rapidly, I'm sure they're hiring like crazy. >> We are. >> So go check 'em out. The news here at KubeCon is positive industry. Rising tide floats all boats. That's a philosophy we have seen on theCUBE and great ecosystems, of course that's happening here. More live coverage here in Copenhagen, Denmark after this short break. Stay with us. (upbeat music)

>> Lisa: I'm Lisa Martin with theCUBE. We're on the ground at Google for the 6th Annual CloudNOW Top Women in Cloud Awards. Very excited to be joined by award winner and CUBE alumni Erica Windisch, founder and CTO of Iopipe. Welcome back to theCUBE, Erica. >> Erica: Thank you. Great to have you here, and congratulations on being one of the top women in Cloud. >> Yeah, of course. >> Tell me, when you heard about that you were being recognized, what did that mean to you and where you are in your career? >> Well, oh gosh, I mean it really meant, it was really big for me. I actually wasn't really expecting it. I think I was nominated and I totally forgot. I think somebody had mentioned to me that they were nominating me and I had no idea about it. I totally forgot about it. But I mean, for me it's just so validating because as much as I've, well one, because I've done a lot of interesting things in Cloud and in tech, but I've never really gotten a lot of recognition for that. And also, just recognition, I mean to be quite honest, I'm transgender. So the fact that I was recognized as a woman, Top Ten Women in Cloud Computing, was extra important and special for me. >> Oh, that's awesome. So tell me about your path to being where you are now. Were you always interested in computers and technology, or is that something that you kind of zigzagged your way to? >> Yeah, well, it was one of these things I guess I had some interest. When I was a child, we had BASIC exercises printed in our math books but our teachers never went over it. So I got kind of interested and I would read through those like those little appendums in my math books, and I would start teaching myself BASIC. And I picked up a Commodore 64 and it didn't work and I taught myself BASIC, more BASIC with those manuals. And I just had these little tiny introductions to technology and just self-taught myself everything. Eventually using a high school job to buy myself books and just teaching myself from those books. Managed to grab Linux on some floppy disks, installed it and tried to figure out how to use it. But I didn't really have lot of mentors or anything that I could really follow. At best there were other kids at school who were into computers and I just wanted to try and do what they were doing or do better than they were doing. >> I love that, self-taught, you knew you liked this and you were not afraid to try, "Hey, let me teach myself." That's really inspiring, Erica. >> Yeah. >> So, speaking of inspiring, tell me about the Iopipes story. So you're a TechSource company, tell us a little bit about TechSource, what that investment in IOpipe means. >> Yeah, so, I started, I guess I first started IOpipe two years ago. And I found the co-founder Adam Johnson, who joined me. And we applied for Techstars, got in, and that was like the first validation that we had from outside of ourselves and maybe one angel investor at that time. And that was a really big deal because it really helped accelerate us, give us validation, allow us to make the first hire, and they also taught us a lot about how to refine our elevator pitch, and how to raise money effectively. And then we ended up raising money, of course. So with the end of Techstars we had a lot of visibility, and that helped us raise two and a half million dollars seed round. >> Wow, so a really good launching pad for you. >> Yes, yeah. >> That's fantastic. So tell us a little bit more about the technology, I know that there's AWS Lambda, we just got back from re:Invent last week, so tell us a little bit more about exactly what you guys do. >> Oh yeah, so what we do is we provide a service that allows developers to get better insights into their application, they get observability into the application running a Lambda, as well as debugging and profiling tools. So you can actually get profiling data out of your Lambda and load that into Google DevTools and get Flame Graphs and dig in deep into which function called which function inside of each function call, so every Lambda invocation you can really dig down and see what's happening. We have things like custom metrics and alerts for that. So you can, for instance, we built this bot. I built it in two days. It's a Slack bot that, if you put an image in a Slack, it will run it through Amazon Rekognition and tell you, describe the objects in it, and describe it. So, for instance, if you have visually impaired members of your team, they can find out what was in the images that people pasted. I built it in only two days, and I could use our tool, let's say to extract how many objects were found in that image, whether or not a specific object was found in that image, and then we can create alerts around those, and do searches based on those, and get statistics out of our product on the data that was extracted from those images. So that was really cool, and we actually announced that feature, the profiling feature, at Midnight Madness at re:Invent so it was like the opening ceremony for re:Invent. It was just us, Andy Jassy and Shaquille O'Neal. >> Lisa: What? >> Yeah, and we launched our product, and we did the demo of this Slack bot, and it was a lot of fun. >> Wow! So you were there last week, then? >> I was there, we were there last week, and we were actually the first, myself, my co-founder and one of our engineers were up there and we were the first non-AWS speakers at the entire arena, it was really amazing. >> Wow, amazing. Congratulations. >> Thank you. >> So with all the cool announcements that came out last week on Lambda, Serverless, even new features that were announced for recognition, how does that either change the game or maybe kind of ignite the fire under you guys even a little bit more? >> Well I think one of the biggest announcements relative to us was Cloud9. And we knew that this was going to happen, Amazon acquired them a year ago, a year and a half ago, but they finally launched it. And they really doubled down on providing a much better experience for developers of Lambda to make it easier for developers to really build and ship and run that code on Lambda, which provides a much tighter experience for them so that they can on-board into things like IOpipe more easily. So that was really exciting, because I think that's really going to help with the adoption of Lambda. And some of the other features like Alexa for work is really interesting. It will probably just again, a lot of Alexa apps are built on top of Lambda, so all of these are going to provide value to my own company because we can tell you things like, "Well, how are your users interacting "with those Alexa skills?" But I think it's just generally exciting because there's just so many really cool, I mean, I don't know how many things they announced at this re:Invent that were just really amazing. Another one I really loved was Fargate, because I mean I came from Docker, I used to be a maintainer of the Docker engine and something that I was pushing for at that time in OpenStack and other projects, was the idea of just containers completely as a service without the VM management side of things, because with like ECS, you had to manage virtual machines, and I was like, "Well that is a little, like, "I don't want to manage virtual machines, "I just want Amazon to give me containers." So I was really excited that they finally launched Fargate to offer that. >> So the last question in our last couple of minutes here, tell me about the culture and your team that you lead at IOpipe. You were saying before, you know, when you were a kid you were really self-taught and very inspired by your own desire to learn, but tell me a little bit about the people that work for you and how you help inspire them. >> Oh gosh, well I think first of all, we are, right now we're nine people. I would say about four or five of us are under-represented minorities in tech in one way or another. It's really been fantastic that we've been able to have that level of diversity and inclusion. I think part of that is that we started very diverse. You know, a lot of companies will say, well, one of their problems with not having enough diversity is that they hire within their networks, well we hire within our networks, but we started very diverse in the first place. So that organic growth was very natural and very diverse for us, whereas that organic pairing growth can be problematic if you don't start in a very diverse place. So I think that's been really great, and I think that the fact that we have that level of diversity and inclusion with our employees is kind of inspiring, because a lot of workplaces just aren't like that in tech. It's really hard to find, and granted we're only nine right now. I would really hope that we can keep that up and I would like to actually make our workforce even more diverse than it is today. But yeah, I don't know, I just think it's fantastic and I want what we're doing to be a role model and an inspiration to other companies and say, "Yes, you can do this." And also the work people in the workforce, yes, you can be a woman in tech, yes, you can be trans in tech, yes, you can be non-binary in tech. I am binary, but we have non-binary people in staff. And, I don't know, I hope that's inspiring to people and also myself being a transgender founder, I maybe know one or two other people who are transgender founders, it's very uncommon. And I hope that also is an inspiration for people. >> Well I think so, speaking for myself I find you very inspiring. You seem to be someone that's really known for thinking, "I'm not afraid of anything. "I'm just going to try it. "Starting a company, I'm going to try it." And it sounds like you guys are very purposefully building a culture that's very inclusive, and so I think that, as well as your recognition as one of the Top Women in Cloud, be proud of that, Erica. That's awesome. >> Thank you. >> And you got to meet Shaquille O'Neal? >> I got to meet Shaquille O'Neal, yeah. >> I've got to see the photo. (laughs) >> Yeah. >> Well thank you so much Erica for joining us back on theCUBE. Congratulations on the award, and we look forward to seeing exciting things that you do in the future. >> Okay great, thank you. >> I'm Lisa Martin on the ground with theCUBE at Google for the CloudNOW Top Women in Cloud Awards. Thanks for watching, bye for now.

>> Announcer: Live from Manhattan, it's the CUBE. Covering AWS Summit, New York City, 2017. Brought to you by Amazon web services. >> And we are live here at AWS Summit here at the Javits Center, New York City, we're midtown, Manhattan, a lot of activity going on outside, you can imagine all the buzz inside as well. Somewhere between 6, 7, 8,000 attendees, kind of tough to tell right now, but everybody's jammed inside here on the show floor and they've been here all day and they're going to stay for a while I think too. As I said, a lot of buzz going on, and good buzz too. Along with Stu Miniman, I'm John Walls and we're now joined by Erica Windisch who is the Co-founder and the CTO of IOpipe. Erica, thanks for being with us here on the CUBE. >> Thank you, thank you for having me. >> You have had a big day. >> Yes we have, yeah. >> It's always fun to talk about money but you did have a fairly significant announcement this morning to make. Tell us about that. >> Yeah, so this morning we announced funding, $2.5 million from several investors including NEA, Madrona, and Underscore. >> So, yeah, you don't often get to high-five everybody for a day like that. I mean that kind of validation, obviously is something that not you just take to the bank, you take it to the marketplace too. >> Yeah, absolutely. And we actually started, our first check was from Techstars so we joined Techstars here in New York City and did that last year for their summer program and it was really great and that was the first foundation that we really had, and then having that further validation from major VCs like NEA and Madrona, Underscore, you know that really was really validating for us as well as just the fact that we're building, we're hiring and we're building and having what I think is an increasingly awesome product. >> Sure, well tell us about IOpipe, for folks at home who are watching might not be familiar with your space, what you do and how you do it. >> Yeah, so we provide tools for software developers to build and manage their applications on Amazon Lambda. So, basically, it's all serverless, we're actually built on serverless as well, we monitor with IOpipe, we dogfood everything. And we are providing deeper insights into those application workloads as well as correlating that information in more useful ways. Deeper knowledge of what exactly is happening in the run times, so we're able to see the data we ingest tells us information on the processes and the containers and the virtual machines that are running your Lambda workload, so we can see things like memory leaks and we can see file descriptor leaks and displaced utilization leaks, things like that that Amazon doesn't collect or at least doesn't give you that information. So, we're looking at ways we can provide more value to users of Lambda and also extending it with plugins so we have a plugin for tracing where you can time aspects of your application as well as profiler, so you can enable a profiling plugin and you get a full flame graph. So you can see, these are all the functions and this one ran and this one ran and the stack looks like this and so you can see the full flame graph of what happened and when and full timing information. This kind of insight that nothing else really gives you. >> Yeah, Erica, every time we have a new technology we go through this kind of diffusion of innovation that goes through. Remember back, I go back thinking about when virtualization came, people, what is it, how do I use it? We saw that in containers and each wave seems to be going faster and faster so there's still plenty of people I talked to that were like, "serverless what?" You know, some new as a service, I mean I thought I knew it with SAS and everything else like that. You're digging into these environments further. Can you give us, what are some of the kind of key use cases you're seeing, what are the challenges that customers are having? What works, what doesn't work, help us unpack that some? >> So, I think there's a number of challenges that users run into today. One is the fact that it is new so some of the tools are still evolving. Operations tools, development tools are still evolving. Just this week, Amazon announced SAM local so you can do editing and debugging locally on your machine or your laptop. That wasn't available before, right? So these tools, we're very much still in a learning phase for some of the tools, but some of the things like what we're doing with IOpipe, in some ways is more traditional because we're bringing in some of the basic monitoring tools and capabilities that you would expect from other platforms. But the other side, also innovating because we're bridging that development and operations into a single tool so it's not development and operations, it's, not even just different tools for those two things, but single tools for those. So I think that's part of the solution, part of the problem, in terms of workloads, I think there's a lot of ETLs, streaming applications, very infrequent things like chron jobs, web applications, you can take flask applications or express applications and just port them directly over to Lambda with almost a lift and shift for those, right? So there's a lot of power for bringing on the web 'cause you pay per the request. You don't scale your application and build your application for the number of servers that you need to handle the requests, it scales it per request and you pay per request and that's what's powerful in both scale of operations and team and like financially, but also, yeah, I lost train of thought there, but it all scales that way, right? Like just according to the request. >> Yeah, bring us into a typical customer, I know there are no typical customers, everyone's a little bit different, but you've got the developers, you've got the operators, finance has always had, you know, there's challenges with cloud in general but serverless at least promises that it's going to be less expensive. What are those dynamics from an organizational standpoint that you see inside? >> In terms of cost? >> Not just cost, but do the developers make something and the operators are like, wait, you know, there's challenges there? Or who drives this initiative in general? Does finance come and say, has finance heard about this and said hey, I heard I could save 60-70% on my cloud if you just re-architect this on Lambda. Or is it the developers coming through and saying, oh, wow, this is great, and can do it, or are operators, who's driving the initiatives and what are some of those dynamics? >> So I see a combination of these things. Some organizations, and I don't want to say names 'cause I don't want to like, you know, they did this and that's how it is. But I get the impression that certain organizations they have a top-down approach where they're going like, everything is going to be serverless and the cost really matters. So you're going to build serverless unless you can't, right? Serverless by default, anything else as an exception. Then there's organizations where developers are really pushing for it because it simplifies their requirements, right? It's a self-service aspect, right, even if they can spit out VMs, even if they have self-service VMs, they won't have to spit out VMs, they don't have to build docker images, they don't have to look at how the operating system is configured. They write code and they deploy code. There's no other steps, right? They're not like, oh, what version of Python is on here and how do I install all the libraries and how do I, right, like with serverless you just write the code and you ship the code. Which is really, really nice. So, in a way it's like having a golden image that you can't change, and you just know you're always going to build for in every application and every organization is going to the same golden image. Which simplifies a lot of things. >> Stu and I were talking about serverless, the whole concept, because it's really not truly serverless it's just different server, or it's a different flavor of it basically. So, first off, what gave birth to that and then where do you think, with serverless computering, serverless application, so on and so forth, where's that going? >> Yeah. >> What's going to be the real value at the end of the day of that? >> So, first of all the term "serverless," I look at it as, yes there are servers, serverless is servers are not my concern as a developer, right, I am not worrying about what the server looks like or operating the servers necessarily. I care about building my application which is why we're looking at building tools that are bridging development and operations so that operations is part of your development. But I see, the direction of serverless, really interesting in a few ways. One is that it's going to be available for more use cases. So right now there's certain use cases that make sense and one of the challenges is figuring out which use cases it doesn't work for. Eventually, you're not going to have that question, potentially, right? So maybe we get to a point where you don't have to ask, the challenge isn't, is serverless good for this use case? Maybe it's good for all use cases eventually down the road, maybe. Another thing is... >> If I could just follow up on that. Some of the announcements today like AWS Glue has serverless in the background there. Seems very promising, things like machine learning, artificial intelligence, serverless, IOT where you know, I need to balance the surface area of attack there but with serverless it won't be active as much and there will be links that are a little bit more dynamic. So, lots of those new use cases seem to be built really well for serverless. What are some of the cases today that you just say, hey, don't even go serverless there. >> Oh don't go serverless, where to do that? Well, so, Lambda has an execution time window which can be limiting for some things that you might want to do. So, like, Lambda in particular may not be the best case for all video encoding tasks. Some video encoding tasks if you can time limit it can be fine. But it's not good for all video encoded tasks because it's a batch process, potentially. Serverless processes that can let's say paralyze that and say, we're going to run Lambda but we're going to say split this up into segments, for instance, you can do that, or if you do it as a stream, right? Like you pipe a video and blocks into Kinesis, right, you can make that work. But it becomes a challenge to those kinds of use cases. >> Yeah, there was the example I think in the keynote was, this high process that would have taken five years, we can do 155 seconds. >> Right, but you have to paralyze it, right? >> Stu: Exactly. >> And if you can't paralyze a task and you can't do it within five or ten minutes, you can't use Lambda for it today. But it also depends on how you define serverless, right, because if serverless is Lambda, that's one thing. But if serverless is these other SAS products as well potentially, like AWS Transcode service, well is that serverless? If it is, then there you go. There's a solution potentially for you. So there's very blurry lines sometimes around what is serverless, and we're looking at IOpipe around serverless functions. I feel the same way around cloud in general was that there's cloud compute and it kind of evolved over time and the cloud is everything like all these things are in a cloud. But originally when we're talking cloud, five years ago, ten years ago, it was all compute. That's what we were talking about. So these terms change over time, so it's hard to say what serverless will be in five years or ten years because it'll mean something different. >> Or next week, for that matter. >> Yeah. >> Erica, last question I have. $2.5 million, what's that going to drive, what should we expect to see from your company and give us any final thoughts on what you'd like to see for the maturation of the serverless technology field? >> Yeah, so we've been hiring and building out a team, we're working on improving the user experience of the product, we are adding additional plugins and enhancements to the service. We feel that we have a really good base with our 1.0 announcement, 'cause we're not just the 2.5 million, we also announced our 1.0. And the 1.0 has a really good base of functionality and we're looking at adding additional plugins and additional features that can extend the service. So we're looking at doing that with that money. And with serverless in general, I think this is really compelling, what we're going to see in the next year, because we're going to see more large enterprises and more enterprise adoption, I think. I mean I was involved early in cloud. I was involved early in docker. And this point of serverless is very much at the early days of these technologies, and I definitely see a rocket ship taking off, and I think in the next year it's going to be really interesting to kind of see it starting to orbit a little bit. >> Well, new product, new funding, and a new day for IOpipe. >> Yes. >> So congratulations on a good day and thank you for being with us here on the CUBE. >> Thank you very much. >> You bet, we'll continue here at the Javits Center we're in midtown Manhattan continuing our coverage of the AWS Summit, here on the CUBE. (futuristic music)

>> Narrator: Live from Las Vegas It's theCUBE covering Edge 2016. Brought to you by IBM. Now, here are your hosts Dave Vellante and Stu Miniman. >> Welcome back to Las Vegas, everybody. This is theCUBE the world-wide leader in live tech coverage. Leanne Kemp is here. She's the founder and CEO of Everledger. Leanne, good to see you. >> Hello, hello. What a great place to be. >> Good joke, Las Vegas again. Stu and I spend a lot of time here. Why did you start Everledger? >> Well, you know, some might say it's my mid-life crisis but the reality is I've been in emerging technology for 25 years. In the mid 90s, now I'm giving away my age I was in radio frequency identification so at the chip and inlay level supply chain tracking. A bit boring, really. >> Stu: No, RFID is cool. >> But in the last 10 years I've worked in jewelry and insurance. And that's given me an appreciation of the size of the problems that exist in the market. And couple that with a whole lot of nerd we have the ability to solve the problems that we're solving today. >> And describe that problem. It's a problem of provenance and transparency is that right? >> Provenance, fraud, document tampering. And when you mix all of those together you have a pretty potent formula for black market trade. And sadly, some of that trade is really running into terrorist-funded activities. So, it's a pretty big problem but I think now is a very real issue that's washing the front pages of every paper on a daily event. Diamonds, of course, is one of the vehicles for anti-money laundering. And if we can go and serve to reduce some of those problems then it's worthwhile getting out of bed for. >> Okay, so you're attacking the diamond value chain. Why that? 'Cuz you have a background in jewelry? Okay, how are you solving that problem though? Describe that in a little bit more detail. >> So, attacking's pretty aggressive. I think we're enhancing. So, we're bringing transparency in a once-opaque market. You know, we're enabling, with the use of technology to bring transparency into the market so that we can start to reduce some of the problems around fraud. When you really think about I mean most people look at us as a blockchain company. I liken us to an emerging technology company. We're using the very best of blockchain and smart contracts and machine vision as an enabler to be able to identify fraudulent-related activities and reduce them in marketplaces. And we're just starting with diamonds but it's really anything that is appreciable of value that criminals like to maybe get their grubby mitts on. >> When did you get this idea, like what timeframe? 2010, 2011, 2015? >> To be honest with you I think this has been a cocktail of experience that really has brought it together at the right time. So, you know, as I said my background has been really unfolding like a patchwork quilt. But when you really see the heightened anxiety that's going on in market now particularly around synthetic diamonds that are of gem-quality standards there's no greater time to be able to bring confidence back into the diamond industry and the consumer networks. >> I guess my question is that at what point did you say okay blockchain can be addressed to enhance this problem? Did you look at Bitcoin and say hmm, that's interesting? Not a currency, it's a technology that I can apply to all the problems. >> Yeah, I mean, you know, I'm a technologist so I really am quite bored with Sudoku so I would rather sort of look at what's going on in the tech space. And so when I really saw the emergency of Bitcoin I understood where that application could lie. But because I wasn't from a banking background it was patently obvious to me that I could decouple the currency from the ledger and really use the currency as a vehicle or a tokenization of assets. And the assets is diamonds, a girl's best friend. So why wouldn't you want to protect your assets? (chuckles) >> Fascinating 'cuz I think the first time I heard of, you know, blockchain and Bitcoin it was about being anonymous and therefore there were concerns that some of those unscrupulous people that are trying to benefit off of like diamonds would use, you know, this crypto currency. They don't have to talk to banks. They don't have to talk to governments. So you've almost flipped the usage of the technology to something to help the world a little bit more. >> That's right. I guess when you really think about it, you know the Bitcoin has often been assimilated with the anarchic world. And we're really bringing it to clean and transparency. So, I guess there is a juxtaposition there. But everything's upside down for me. I'm from Australia so it's perfectly normal. >> Go ahead, Stu. >> Yeah, just when you look at Blockchain and kind of the core technology you think we're really in the early days? What kind of usage do you see out beyond the ledgers? Are there other applications be it beyond the diamonds that you guys are looking at? >> Yeah, you know, so it's interesting. In the early 2000s I worked in WAP, you know? And I was so excited. I thought wow, this tech is really going to do something. So, you know, I'm part of Team Asserti in Australia and wrote out an application. And I felt like nearly six months came into the tech. And all of a sudden, I woke up and I went where the bloody hell did WAP go? It just disappeared. There was a very real danger that this technology was likely to face the same ill fate. And we often see in any emerging technology where there are heightened promises. They often end in disappointment. So, actually most of the decisions I've made in a start-up, and we're only 18 months old have really been counterintuitive. You know, when it's the time to put the pedal straight down I've often held back to really wait to see where the maturity of the technology was going to lie. And in any emerging technology and if you're a CEO of a start-up you have to be completely articulate about where the problem is that you're solving. But not only that you need to take the time to really distill the technology to its purest essence and then enable that to be the potent shot that goes out first and foremost. And so this is a nascent technology. And maybe, you know, it has the parentage of a multilingual PhD scientist but the reality is it's only just been born. We're not even nappy feddy. We're not even out of out of our nappies right now. So we need to give it the time to really grow. And we've chosen a niche market. It just so happens that it's a bloody big niche. >> So what took longer to figure out the problem or the solution? >> You know, I think you know, I don't know. That's a really good question, actually. I think the problem for me I understood quite early but I just didn't appreciate the size of the problem globally and the extension of that problem into other areas. And really I think it's taken some time for the technology to be understood. We've taken a view that we'd like to see ourselves as the custodian of the technology. We don't want to go to market too early. We want to be sure that whenever the message is delivered to market that it's something we've already delivered that we have built that the engineering effort has already been afforded. You know, small acorns grow into mighty oaks. And so for us, it's about ensuring that we take the time to really give the right fertilizer to the growth. >> And that's a 50 billion dollar problem you said this morning is that right? Is that there- >> Just in insurance. But we have banks as our clients too so, you know, we're shooting hoops. >> So you're saying it's a multiplier of that 50 billion? >> Leanne: Of course. >> Yeah, big multiplier. >> I mean counterfeit good if you extend it into luxury goods it's 1.7 trillion dollars. >> And you talked about the sort of value chain of rough cut, 15 billion and you maybe triple that when it gets polished almost 50 billion and then another one and a half X at retail. Where are the holes in that value chain, everywhere? I mean are you seeing fraud occur throughout that value chain or- >> Effectively. You know, we don't have you know, visibility of complete provenance through the supply chain. And in fact, it's not just limited to the diamond industry. I mean I guess the diamond industry there's the allure of luxury. You know, there's the backdrop of affluence. And then, of course, there's the atrocity of what goes on in terms of or what used to go on so prolifically in blood diamonds. You know, effectively the industry isn't as burdened with technology as say financial services. It doesn't have the legacy of 50 years of technology that it needs to unwind. So, when you really consider what's going on in the market today to bring emerging technology into this space not limited to blockchain even enabling new technologies like high-definition photographs and machine vision our marketplace has the ability to consume that technology quite rapidly. And when you think about the problems in our market or the restrictions in our market it's really a lightning rod moment for us where we've just been fortunate enough to be able to build out a solid engineering rod to be able to capture that lightning bolt of problem. >> Dave: Mm-hmm. >> We've had a lot of discussions with IBM executives this week and they feel security is one of the things that IBM does really well. Talk a little bit about your relationship with IBM what IBM does well what they're good at partnering with. How is it to work with IBM? >> Dave: What they could do better. >> Yeah. >> Absolutely (chuckles). We, in the very first 12 months of Everledger we managed to onboard, you know, a million diamonds. And most people were applauding the efforts of our engineering team. And we certainly applauded ourselves. But Christmas was a very lonely path for me because I started to become shivered by the thought of what would this mean if I went from a million to 10 million to 15 million and then into rough being able to track 320 million carats of rough diamonds across 80 countries around the world. So, when you're a start-up and you're faced with some of the largest organizations and governments around the world let's face it, the industry's 130 years old. You want to be able to look towards a technology innovator like IBM that has been around and reinvented itself over a trusted 100 years. And that transactional trust is at the very core of this fabric. So, some of the things that you look at in terms of a start-up may be actually too isolated. A lot of technology companies that are in the blockchain space are just looking at the blockchain fabric. But for me, it was patently obvious we needed to stretch further. We needed to realize that we have to deliver this into a cloud solution. We have to deliver this technology in such a form that has to be secured. And the security needs to really be from the ground up at the root source right the way through to the front end. And there's no other partner that's actually doing that. There are other service providers in this space that shall not be mentioned. But they're, of course, taking whatever nascent technology is being built and putting it into the cloud. IBM has really taken the time to sew together the right security fabric. >> And that's about scale for you, right? I mean you wouldn't be able to scale without it. >> I sleep at night knowing that we have IBM. Like as a CEO, I sleep at night. >> My understanding, there's container technology that you're using in here. Most people think of containers as security's one of the holes there so, you know, how do you feel with the security of containers today? And maybe you can share a little bit about you know, what IBM's doing specifically for that. >> Yeah, I mean the container services team that we've been working with and today I had the absolute privilege it was a diary note moment for me to present on stage with Donna. You know, her background in security has afforded us the ability to really deliver this quite quickly. The work that they have been doing is recognized not only and I touched on the surface of the three markets that of real concern or focus for us is fraud and theft and cyber. And when you consider the container services and the security team that's wrapped this around I really think that actually one of the silent winners in this is the reduction in cyber crime. And maybe that hasn't been focused on too largely. And the 50 billion dollars that I was talking about was really around document tampering and, you know, the over-inflation of insurance claims. When you really think about it it's actually cyber crime that I think we could actually truly solve as part of the solution itself. >> So explain again, Leanne, how does it work? So each diamond has a unique identifies it's got a fingerprint on there. How does it get on there? >> So there are existing processes in industry. There are two parts to the market first is rough diamonds and the second is polished diamonds. And as diamonds are crossing borders as a part of international trade they're often inspected by gemologists. Those that, of course, have received licenses in the skill of identifying diamonds. But that's all- >> Dave: But that's a spot inspection, is that right or- >> Correct. >> Dave: Yeah. >> But there's also actual machinery. So there are certain types of science that have been applied and have been applied for a number of years. And one of the challenges that we faced with ourselves is to IoT-enable the diamond pipeline. So, some of these machines have been in existence. They're highly calibrated and they have precision but that data is often blackboxed. It's not, indeed, ledgered or stored for public view or even inter-office view. And so one of the tricks that we've enabled is the ability to take all of those data points 40 meta data points as well as the reputation or the expert opinion and lay that data into the blockchain. So we're layering really a reputation score not only of the person, the machine but also the diamond and the validity of that diamond. And that can only come over time with large aggregated data sets. >> Okay, and that is your providence. You said the world's provenance is locked in paper. So now you're locking it into- >> Leanne: You're listening >> The blockchain. Of course (chuckles). I knew we had to talk to you. We better listen. Okay, so all right. And then can you explain the banking crisis the liquidity crisis in the diamond business? >> Leanne: Yeah, absolutely. >> What's that stem from? I didn't quite understand. >> It's really affecting the middle part of the pipeline. We have very large mining companies and of course quite substantial retailers but it's the middle part of the pipeline that's really being caused in terms of a squeeze. And so they are the diamond cutters and polishers really generational businesses that have perfected the art and the skill of cutting diamonds. It's the middle part of the pipeline that's really being affected at the moment. And as I mentioned there are two brave Western banks that remain supporting industry. The largest, which has been really in industry for quite some time is ABN AMRO. And proudly, they still remain. And Barclay's Bank. But we've seen an announcement more recently with Standard pulling back out of the industry for a lack of transparency and a burden on their balance sheet. This, of course, has come from Basel III and some of the regulations that's been pushed down from them. And if we're able to take certification and extend transparency but also bring certification to the next level to enable a collateral management system to be built so banks can take the security on the underlying asset rather than just take a balance sheet position it will lift the burden on their balance sheet. It will give them security of the diamond. And let's face it, diamonds are worth something. And as I said when you start to understand the true effect of rough to polished to track the diamond through its lifecycle and give security is something that banks are open-minded about. >> Yes, okay. So it's not a chicken and egg problem it's a transparency begets liquidity is that right? That's the premise anyway >> Yeah >> Dave: That you're testing basically making that bet with your company. We don't have much time but I just wanted to ask you about your company. You're an entrepreneur. You started the company, you said 18 months ago. Funding, VC, you know, give us the lowdown. >> Sure, sure, sure. I mean I came into London in October of 2014. And I was desperate to talk to insurers. And so one of the largest insurers in the London market is Aviva. And they had a hackathon at Google so I thought hey, this would be all right. I'm just going to Trojan Horse the event and see if I can have a talk to the CFO and COO. So I went there. They opened up some APIs. And because I, of course, had a technical background I thought those APIs are hopeless there's not much I can do with that. But if you want to solve some of the problems here this is what you can do. You can take diamonds, take certification and put it on the blockchain as a way to reduce fraud. And at that hackathon I was awarded the innovation prize. But the managing director of Barclay's Techstars was one of the judges and came to me and invited me to join them as part of their accelerator in London which began in March 2015. And, of course, I thought this is crazy. Why would I want to do that? Why would I want to be in London with a bank? It doesn't really make too much sense. And let's face it, I mean Australia is a much nicer country to spend your holidays in rather than London. But in any event, I returned and participated as part of the Barclay's accelerator and I've been supported through the process of the acceleration. But Barclay's is both a bank and an insurance company in Africa so the penny dropped and we put our head down. We wore some letters off the keyboard and Everledger was born. And away we go. >> And so Barclay's funded, in part the company or- >> Barclay's and the Techstars accelerator program have a seed funding event which is a part of the acceleration program for start-ups if you're chosen. And we were fortunate enough to be chosen. And since that time we've been we haven't disclosed who one of our backers are. >> Dave: Okay. >> But we will, in time. And so we've been funded by a selected name in industry. And we're actually just about to go into our Series A so we're looking towards that in the next number of months. >> Dave: You're not even in Series A yet? So you've gotten this far without even getting to your Series A? >> Leanne: Yeah. >> 980 thousand? >> Well, we have revenue, so- >> Dave: Yeah. >> This is my last start-up. I had to go through an intervention with my family to enable me to be here. >> Dave: This is my last So this is it. >> Dave: We've heard that before. >> I promise. I know, it's true, it's true. >> Opportunities beyond diamonds or is that getting too ahead of our speech here? >> Diamonds, watches, art, fine wine you know, and I'm completely empowered by how do we bring what the diamond industry did so well in the reduction of blood diamonds and bring ethical trade really to the forefront of the mind of the consumer and also the mind of the financial services market. So, you know, for me it's really around that part of the world. If that nexus point comes together then I'll keep getting out of bed for it. >> Awesome. Great story. Impressive entrepreneur. Thanks for coming on theCUBE. >> Leanne: Yes, thank you. >> London's not so bad (chuckles). Comment? >> London's probably watching. (Dave and Leanne laugh) >> All right, thanks again. Keep it right there, buddy. Stu and I will be back with our next guest. We're live from IBM Edge in Las Vegas. We'll be right back. (low tempo music)

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