(uplifting music) >> Hello, welcome back to theCUBE's coverage of CloudNativeSecurityCon, the inaugural event, in Seattle. I'm John Furrier, host of theCUBE, here in the Palo Alto Studios. We're calling it theCUBE Center. It's kind of like our Sports Center for tech. It's kind of remote coverage. We've been doing this now for a few years. We're going to amp it up this year as more events are remote, and happening all around the world. So, we're going to continue the coverage with this segment focusing on the data stack, entrepreneurial opportunities around all things security, and as, obviously, data's involved. And our next guest is a friend of theCUBE, and CUBE alumni from 2013, entrepreneur himself, turned, now, venture capitalist angel investor, with his own firm, Opher Kahane, Managing Director, Sonoma Ventures. Formerly the founder of Origami, sold to Intuit a few years back. Focusing now on having a lot of fun, angel investing on boards, focusing on data-driven applications, and stacks around that, and all the stuff going on in, really, in the wheelhouse for what's going on around security data. Opher, great to see you. Thanks for coming on. >> My pleasure. Great to be back. It's been a while. >> So you're kind of on Easy Street now. You did the entrepreneurial venture, you've worked hard. We were on together in 2013 when theCUBE just started. XCEL Partners had an event in Stanford, XCEL, and they had all the features there. We interviewed Satya Nadella, who was just a manager at Microsoft at that time, he was there. He's now the CEO of Microsoft. >> Yeah, he was. >> A lot's changed in nine years. But congratulations on your venture you sold, and you got an exit there, and now you're doing a lot of investments. I'd love to get your take, because this is really the biggest change I've seen in the past 12 years, around an inflection point around a lot of converging forces. Data, which, big data, 10 years ago, was a big part of your career, but now it's accelerated, with cloud scale. You're seeing people building scale on top of other clouds, and becoming their own cloud. You're seeing data being a big part of it. Cybersecurity kind of has not really changed much, but it's the most important thing everyone's talking about. So, developers are involved, data's involved, a lot of entrepreneurial opportunities. So I'd love to get your take on how you see the current situation, as it relates to what's gone on in the past five years or so. What's the big story? >> So, a lot of big stories, but I think a lot of it has to do with a promise of making value from data, whether it's for cybersecurity, for Fintech, for DevOps, for RevTech startups and companies. There's a lot of challenges in actually driving and monetizing the value from data with velocity. Historically, the challenge has been more around, "How do I store data at massive scale?" And then you had the big data infrastructure company, like Cloudera, and MapR, and others, deal with it from a scale perspective, from a storage perspective. Then you had a whole layer of companies that evolved to deal with, "How do I index massive scales of data, for quick querying, and federated access, et cetera?" But now that a lot of those underlying problems, if you will, have been solved, to a certain extent, although they're always being stretched, given the scale of data, and its utility is becoming more and more massive, in particular with AI use cases being very prominent right now, the next level is how to actually make value from the data. How do I manage the full lifecycle of data in complex environments, with complex organizations, complex use cases? And having seen this from the inside, with Origami Logic, as we dealt with a lot of large corporations, and post-acquisition by Intuit, and a lot of the startups I'm involved with, it's clear that we're now onto that next step. And you have fundamental new paradigms, such as data mesh, that attempt to address that complexity, and responsibly scaling access, and democratizing access in the value monetization from data, across large organizations. You have a slew of startups that are evolving to help the entire lifecycle of data, from the data engineering side of it, to the data analytics side of it, to the AI use cases side of it. And it feels like the early days, to a certain extent, of the revolution that we've seen in transition from traditional databases, to data warehouses, to cloud-based data processing, and big data. It feels like we're at the genesis of that next wave. And it's super, super exciting, for me at least, as someone who's sitting more in the coach seat, rather than being on the pitch, and building startups, helping folks as they go through those motions. >> So that's awesome. I want to get into some of these data infrastructure dynamics you mentioned, but before that, talk to the audience around what you're working on now. You've been a successful entrepreneur, you're focused on angel investing, so, super-early seed stage. What kind of deals are you looking at? What's interesting to you? What is Sonoma Ventures looking for, and what are some of the entrepreneurial dynamics that you're seeing right now, from a startup standpoint? >> Cool, so, at a macro level, this is a little bit of background of my history, because it shapes very heavily what it is that I'm looking at. So, I've been very fortunate with entrepreneurial career. I founded three startups. All three of them are successful. Final two were sold, the first one merged and went public. And my third career has been about data, moving data, passing data, processing data, generating insights from it. And, at this phase, I wanted to really evolve from just going and building startup number four, from going through the same motions again. A 10 year adventure, I'm a little bit too old for that, I guess. But the next best thing is to sit from a point whereby I can be more elevated in where I'm dealing with, and broaden the variety of startups I'm focused on, rather than just do your own thing, and just go very, very deep into it. Now, what specifically am I focused on at Sonoma Ventures? So, basically, looking at what I refer to as a data-driven application stack. Anything from the low-level data infrastructure and cloud infrastructure, that helps any persona in the data universe maximize value for data, from their particular point of view, for their particular role, whether it's data analysts, data scientists, data engineers, cloud engineers, DevOps folks, et cetera. All the way up to the application layer, in applications that are very data-heavy. And what are very typical data-heavy applications? FinTech, cyber, Web3, revenue technologies, and product and DevOps. So these are the areas we're focused on. I have almost 23 or 24 startups in the portfolio that span all these different areas. And this is in terms of the aperture. Now, typically, focus on pre-seed, seed. Sometimes a little bit later stage, but this is the primary focus. And it's really about partnering with entrepreneurs, and helping them make, if you will, original mistakes, avoid the mistakes I made. >> Yeah. >> And take it to the next level, whatever the milestone they're driving with. So I'm very, very hands-on with many of those startups. Now, what is it that's happening right now, initially, and why is it so exciting? So, on one hand, you have this scaling of data and its complexity, yet lagging value creation from it, across those different personas we've touched on. So that's one fundamental opportunity which is secular. The other one, which is more a cyclic situation, is the fact that we're going through a down cycle in tech, as is very evident in the public markets, and everything we're hearing about funding going slower and lower, terms shifting more into the hands of typical VCs versus entrepreneur-friendly market, and so on and so forth. And a very significant amount of layoffs. Now, when you combine these two trends together, you're observing a very interesting thing, that a lot of folks, really bright folks, who have sold a startup to a company, or have been in the guts of the large startup, or a large corporation, have, hands-on, experienced all those challenges we've spoken about earlier, in turf, maximizing value from data, irrespective of their role, in a specific angle, or vantage point they have on those challenges. So, for many of them, it's an opportunity to, "Now, let me now start a startup. I've been laid off, maybe, or my company's stock isn't doing as well as it used to, as a large corporation. Now I have an opportunity to actually go and take my entrepreneurial passion, and apply it to a product and experience as part of this larger company." >> Yeah. >> And you see a slew of folks who are emerging with these great ideas. So it's a very, very exciting period of time to innovate. >> It's interesting, a lot of people look at, I mean, I look at Snowflake as an example of a company that refactored data warehouses. They just basically took data warehouse, and put it on the cloud, and called it a data cloud. That, to me, was compelling. They didn't pay any CapEx. They rode Amazon's wave there. So, a similar thing going on with data. You mentioned this, and I see it as an enabling opportunity. So whether it's cybersecurity, FinTech, whatever vertical, you have an enablement. Now, you mentioned data infrastructure. It's a super exciting area, as there's so many stacks emerging. We got an analytics stack, there's real-time stacks, there's data lakes, AI stack, foundational models. So, you're seeing an explosion of stacks, different tools probably will emerge. So, how do you look at that, as a seasoned entrepreneur, now investor? Is that a good thing? Is that just more of the market? 'Cause it just seems like more and more kind of decomposed stacks targeted at use cases seems to be a trend. >> Yeah. >> And how do you vet that, is it? >> So it's a great observation, and if you take a step back and look at the evolution of technology over the last 30 years, maybe longer, you always see these cycles of expansion, fragmentation, contraction, expansion, contraction. Go decentralize, go centralize, go decentralize, go centralize, as manifested in different types of technology paradigms. From client server, to storage, to microservices, to et cetera, et cetera. So I think we're going through another big bang, to a certain extent, whereby end up with more specialized data stacks for specific use cases, as you need performance, the data models, the tooling to best adapt to the particular task at hand, and the particular personas at hand. As the needs of the data analysts are quite different from the needs of an NL engineer, it's quite different from the needs of the data engineer. And what happens is, when you end up with these siloed stacks, you end up with new fragmentation, and new gaps that need to be filled with a new layer of innovation. And I suspect that, in part, that's what we're seeing right now, in terms of the next wave of data innovation. Whether it's in a service of FinTech use cases, or cyber use cases, or other, is a set of tools that end up having to try and stitch together those elements and bridge between them. So I see that as a fantastic gap to innovate around. I see, also, a fundamental need in creating a common data language, and common data management processes and governance across those different personas, because ultimately, the same underlying data these folks need, albeit in different mediums, different access models, different velocities, et cetera, the subject matter, if you will, the underlying raw data, and some of the taxonomies right on top of it, do need to be consistent. So, once again, a great opportunity to innovate, whether it's about semantic layers, whether it's about data mesh, whether it's about CICD tools for data engineers, and so on and so forth. >> I got to ask you, first of all, I see you have a friend you brought into the interview. You have a dog in the background who made a little cameo appearance. And that's awesome. Sitting right next to you, making sure everything's going well. On the AI thing, 'cause I think that's the hot trend here. >> Yeah. >> You're starting to see, that ChatGPT's got everyone excited, because it's kind of that first time you see kind of next-gen functionality, large-language models, where you can bring data in, and it integrates well. So, to me, I think, connecting the dots, this kind of speaks to the beginning of what will be a trend of really blending of data stacks together, or blending of models. And so, as more data modeling emerges, you start to have this AI stack kind of situation, where you have things out there that you can compose. It's almost very developer-friendly, conceptually. This is kind of new, but kind of the same concept's been working on with Google and others. How do you see this emerging, as an investor? What are some of the things that you're excited about, around the ChatGPT kind of things that's happening? 'Cause it brings it mainstream. Again, a million downloads, fastest applications get a million downloads, even among all the successes. So it's obviously hit a nerve. People are talking about it. What's your take on that? >> Yeah, so, I think that's a great point, and clearly, it feels like an iPhone moment, right, to the industry, in this case, AI, and lots of applications. And I think there's, at a high level, probably three different layers of innovation. One is on top of those platforms. What use cases can one bring to the table that would drive on top of a ChatGPT-like service? Whereby, the startup, the company, can bring some unique datasets to infuse and add value on top of it, by custom-focusing it and purpose-building it for a particular use case or particular vertical. Whether it's applying it to customer service, in a particular vertical, applying it to, I don't know, marketing content creation, and so on and so forth. That's one category. And I do know that, as one of my startups is in Y Combinator, this season, winter '23, they're saying that a very large chunk of the YC companies in this cycle are about GPT use cases. So we'll see a flurry of that. The next layer, the one below that, is those who actually provide those platforms, whether it's ChatGPT, whatever will emerge from the partnership with Microsoft, and any competitive players that emerge from other startups, or from the big cloud providers, whether it's Facebook, if they ever get into this, and Google, which clearly will, as they need to, to survive around search. The third layer is the enabling layer. As you're going to have more and more of those different large-language models and use case running on top of it, the underlying layers, all the way down to cloud infrastructure, the data infrastructure, and the entire set of tools and systems, that take raw data, and massage it into useful, labeled, contextualized features and data to feed the models, the AI models, whether it's during training, or during inference stages, in production. Personally, my focus is more on the infrastructure than on the application use cases. And I believe that there's going to be a massive amount of innovation opportunity around that, to reach cost-effective, quality, fair models that are deployed easily and maintained easily, or at least with as little pain as possible, at scale. So there are startups that are dealing with it, in various areas. Some are about focusing on labeling automation, some about fairness, about, speaking about cyber, protecting models from threats through data and other issues with it, and so on and so forth. And I believe that this will be, too, a big driver for massive innovation, the infrastructure layer. >> Awesome, and I love how you mentioned the iPhone moment. I call it the browser moment, 'cause it felt that way for me, personally. >> Yep. >> But I think, from a business model standpoint, there is that iPhone shift. It's not the BlackBerry. It's a whole 'nother thing. And I like that. But I do have to ask you, because this is interesting. You mentioned iPhone. iPhone's mostly proprietary. So, in these machine learning foundational models, >> Yeah. >> you're starting to see proprietary hardware, bolt-on, acceleration, bundled together, for faster uptake. And now you got open source emerging, as two things. It's almost iPhone-Android situation happening. >> Yeah. >> So what's your view on that? Because there's pros and cons for either one. You're seeing a lot of these machine learning laws are very proprietary, but they work, and do you care, right? >> Yeah. >> And then you got open source, which is like, "Okay, let's get some upsource code, and let people verify it, and then build with that." Is it a balance? >> Yes, I think- >> Is it mutually exclusive? What's your view? >> I think it's going to be, markets will drive the proportion of both, and I think, for a certain use case, you'll end up with more proprietary offerings. With certain use cases, I guess the fundamental infrastructure for ChatGPT-like, let's say, large-language models and all the use cases running on top of it, that's likely going to be more platform-oriented and open source, and will allow innovation. Think of it as the equivalent of iPhone apps or Android apps running on top of those platforms, as in AI apps. So we'll have a lot of that. Now, when you start going a little bit more into the guts, the lower layers, then it's clear that, for performance reasons, in particular, for certain use cases, we'll end up with more proprietary offerings, whether it's advanced silicon, such as some of the silicon that emerged from entrepreneurs who have left Google, around TensorFlow, and all the silicon that powers that. You'll see a lot of innovation in that area as well. It hopefully intends to improve the cost efficiency of running large AI-oriented workloads, both in inference and in learning stages. >> I got to ask you, because this has come up a lot around Azure and Microsoft. Microsoft, pretty good move getting into the ChatGPT >> Yep. >> and the open AI, because I was talking to someone who's a hardcore Amazon developer, and they said, they swore they would never use Azure, right? One of those types. And they're spinning up Azure servers to get access to the API. So, the developers are flocking, as you mentioned. The YC class is all doing large data things, because you can now program with data, which is amazing, which is amazing. So, what's your take on, I know you got to be kind of neutral 'cause you're an investor, but you got, Amazon has to respond, Google, essentially, did all the work, so they have to have a solution. So, I'm expecting Google to have something very compelling, but Microsoft, right now, is going to just, might run the table on developers, this new wave of data developers. What's your take on the cloud responses to this? What's Amazon, what do you think AWS is going to do? What should Google be doing? What's your take? >> So, each of them is coming from a slightly different angle, of course. I'll say, Google, I think, has massive assets in the AI space, and their underlying cloud platform, I think, has been designed to support such complicated workloads, but they have yet to go as far as opening it up the same way ChatGPT is now in that Microsoft partnership, and Azure. Good question regarding Amazon. AWS has had a significant investment in AI-related infrastructure. Seeing it through my startups, through other lens as well. How will they respond to that higher layer, above and beyond the low level, if you will, AI-enabling apparatuses? How do they elevate to at least one or two layers above, and get to the same ChatGPT layer, good question. Is there an acquisition that will make sense for them to accelerate it, maybe. Is there an in-house development that they can reapply from a different domain towards that, possibly. But I do suspect we'll end up with acquisitions as the arms race around the next level of cloud wars emerges, and it's going to be no longer just about the basic tooling for basic cloud-based applications, and the infrastructure, and the cost management, but rather, faster time to deliver AI in data-heavy applications. Once again, each one of those cloud suppliers, their vendor is coming with different assets, and different pros and cons. All of them will need to just elevate the level of the fight, if you will, in this case, to the AI layer. >> It's going to be very interesting, the different stacks on the data infrastructure, like I mentioned, analytics, data lake, AI, all happening. It's going to be interesting to see how this turns into this AI cloud, like data clouds, data operating systems. So, super fascinating area. Opher, thank you for coming on and sharing your expertise with us. Great to see you, and congratulations on the work. I'll give you the final word here. Give a plugin for what you're looking for for startup seats, pre-seeds. What's the kind of profile that gets your attention, from a seed, pre-seed candidate or entrepreneur? >> Cool, first of all, it's my pleasure. Enjoy our chats, as always. Hopefully the next one's not going to be in nine years. As to what I'm looking for, ideally, smart data entrepreneurs, who have come from a particular domain problem, or problem domain, that they understand, they felt it in their own 10 fingers, or millions of neurons in their brains, and they figured out a way to solve it. Whether it's a data infrastructure play, a cloud infrastructure play, or a very, very smart application that takes advantage of data at scale. These are the things I'm looking for. >> One final, final question I have to ask you, because you're a seasoned entrepreneur, and now coach. What's different about the current entrepreneurial environment right now, vis-a-vis, the past decade? What's new? Is it different, highly accelerated? What advice do you give entrepreneurs out there who are putting together their plan? Obviously, a global resource pool now of engineering. It might not be yesterday's formula for success to putting a venture together to get to that product-market fit. What's new and different, and what's your advice to the folks out there about what's different about the current environment for being an entrepreneur? >> Fantastic, so I think it's a great question. So I think there's a few axes of difference, compared to, let's say, five years ago, 10 years ago, 15 years ago. First and foremost, given the amount of infrastructure out there, the amount of open-source technologies, amount of developer toolkits and frameworks, trying to develop an application, at least at the application layer, is much faster than ever. So, it's faster and cheaper, to the most part, unless you're building very fundamental, core, deep tech, where you still have a big technology challenge to deal with. And absent that, the challenge shifts more to how do you manage my resources, to product-market fit, how are you integrating the GTM lens, the go-to-market lens, as early as possible in the product-market fit cycle, such that you reach from pre-seed to seed, from seed to A, from A to B, with an optimal amount of velocity, and a minimal amount of resources. One big difference, specifically as of, let's say, beginning of this year, late last year, is that money is no longer free for entrepreneurs, which means that you need to operate and build startup in an environment with a lot more constraints. And in my mind, some of the best startups that have ever been built, and some of the big market-changing, generational-changing, if you will, technology startups, in their respective industry verticals, have actually emerged from these times. And these tend to be the smartest, best startups that emerge because they operate with a lot less money. Money is not as available for them, which means that they need to make tough decisions, and make verticals every day. What you don't need to do, you can kick the cow down the road. When you have plenty of money, and it cushions for a lot of mistakes, you don't have that cushion. And hopefully we'll end up with companies with a more agile, more, if you will, resilience, and better cultures in making those tough decisions that startups need to make every day. Which is why I'm super, super excited to see the next batch of amazing unicorns, true unicorns, not just valuation, market rising with the water type unicorns that emerged from this particular era, which we're in the beginning of. And very much enjoy working with entrepreneurs during this difficult time, the times we're in. >> The next 24 months will be the next wave, like you said, best time to do a company. Remember, Airbnb's pitch was, "We'll rent cots in apartments, and sell cereal." Boy, a lot of people passed on that deal, in that last down market, that turned out to be a game-changer. So the crazy ideas might not be that bad. So it's all about the entrepreneurs, and >> 100%. >> this is a big wave, and it's certainly happening. Opher, thank you for sharing. Obviously, data is going to change all the markets. Refactoring, security, FinTech, user experience, applications are going to be changed by data, data operating system. Thanks for coming on, and thanks for sharing. Appreciate it. >> My pleasure. Have a good one. >> Okay, more coverage for the CloudNativeSecurityCon inaugural event. Data will be the key for cybersecurity. theCUBE's coverage continues after this break. (uplifting music)

>> Narrator: From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Hey welcome back everybody, Jeff Frick here with theCUBE we're in our Palo Alto studio, it's still 2020, we're still gettin' through the COVID crisis and we're still reaching out to our community really to talk to leaders who have lead through difficult times, led through transitions, and really go out to the experts and get some advice from people who have been around the block a few times, and I'm really, really excited to have one of my all time favorite business executives joining us, I haven't talked to him in years and years and almost decades, David Pottruck is joining us, he is formerly the CEO of Schwab, how he kind of made his name, now he's an author, he's teaching at the Wharton School, he's a New York Times best selling author and he's also the chairman of Red Eagle Ventures, David, great to see you. >> Thanks, Jeff, it's good to be with you today. >> Absolutely, so before we get in, just to check in, how are you doing, how are you gettin' through 2020, I can't believe we're already on the backside of this crazy year. >> Well, it's been a pretty challenging year as you know, and we've seen companies learn to operate in a virtual world. Zoom has been one of the huge beneficiaries, but technology companies in general, the whole FAANG group of Facebook, Amazon, Netflix and such, they've all benefited from people getting more virtual, and one of the non profits I'm involved with sends out videos to schools on social and emotional learning and that's seen a big uptick. So, the world is changing, and changing in very substantial ways, and I don't think we'll ever go back to the way it was in total, we will go back to having face to face meetings, of course, but I do think that operating virtually and doing more things remotely, remote business meetings over zoom are going to be a fixed part of the future, >> Right, right. >> At least in my opinion. >> So, the reason I wanted to reach out to you is you've managed through some crazy transitions and some crazy disruptions back in the day and for a lot of the young people that don't remember, there was a time before we did everything online. There was a time where you had a broker and you called him on the phone and you paid a pretty big price based on a percentage of the transactions. You were at Schwab in the late 90s when this new thing called the internet came along, and these new things called internet only businesses to compete with you, I wonder if you can kind of take us back as you started to see some of these new kinds of threats, coming not necessarily from people that you recognize from up and down the street, but people who are coming over horizons that you've never ever seen before. And how did you start to get a feel for hmm, the landscapes a changin'. >> You know it's really funny to look back that there actually was a day when something called the internet didn't exist. And, there was no connectivity, there was no internet. We were, of course, at that time a telephone based brokerage firm, what used to be called discount brokers. We don't use that phrase very much anymore at Schwab, but, we were a telephone based discount broker, and the internet popped up and started becoming commercialized, and some online only brokerage firms popped up. And these firms didn't have call centers, they didn't have branch offices, if you wanted to do a trade you did it over your computer, online, and the pricing was dramatically less. To give you some idea, to buy 100 shares of IBM, Merrill Lynch would have charged you $250, for that one trade, Schwab would have charged you $80 and E-Trade would have charged you $25. So, we were much cheaper than Merrill Lynch, but E-Trade was much cheaper than us. So, we were, at the time, we were worried about is there enough security on the internet, can we do trades. We have a reputation to protect, a brand new company they don't have a reputation to protect, we have customer security, we have a reputation to protect. Well, we started doing online trades, and the way we did it was we gave all of our customers a 20% discount on our normal pricing, so instead of charging 80-something dollars, you paid something like $60. So, it was a nice discount, customers liked it, they were doing online trades, and we're seeing that is just taking off, it's getting huge, and we're getting great press, the analysts love it, Wall Street loves it, we're a public company and it's going great, but of course at the same time I'm getting, a basket full of letters and emails from our customers saying "why can't you do trades for $25 like E-Trade? Why are they able to do an online trade for $25 and you're charging $65? I thought you stood for value, I thought you guys wanted to be the best value for the money." So, I'm in this dilemma where Wall Street doesn't see these letters, they don't get reported, I see them, and there dozens and then hundreds, and then thousands. >> Wow. >> We had millions of customers, so to get a thousand letters or emails in a month that's very possible. And so I go to Chuck with this and I said you know, I think we need to make a change because no great company was built on the back of unhappy customers. >> Right, right. But you know, it's so funny, not funny, I'm sure it was a huge challenge in the moment, but you know, Clayton Christensen's another one of my favorite business leaders and why I like him so much, and rest in peace he passed earlier this year, is his very simple statement in "The Innovator's Dilemma" that smart people making sound business decisions based on their customer feedback will always miss discontinuous change. You were right in the middle of this thing and you had to get discontinuous change and it's funny, you've mentioned quite a bit in some of your other conversations about looking for faint signals, well this was not a faint signal, this was pretty much, sounds like came up and banged you over the head. So, how do you make and convince the rest of the people of the team that this is kind of a short-term pain but it's a long-term gain, really thinking about this long-term relationship with our customers, even though it's going to cost us on a per transaction basis in the short-term. >> Well, I had our financial staff run some models, and show me what would be the impact if we reduced our pricing from 60 something dollars a trade to $29 a trade, and the assumption of more and more trades moving to the internet. We also had a model into that the fact that people trade a little more when prices go down, costs go down cause I don't have the cost of someone answering the telephone, so there were some benefits, and I had to run the math to understand how long would it take us to go through the trough to get to the other side. A big important part of this is modeling the numbers. You don't just make this decision as a public company and just hope for the best >> Jeff: Right. >> You need to model it out, you need to run math and say how long will it take, what do we have to assume, what do we need to do, what costs do we need to cut, how are we going to protect ourselves as best as we can? And we knew that the math said that our profitability will go down 25% when we make this change of internet pricing, and we expected that Wall Street would be so upset, because they didn't see this coming, no analyst saw this coming cause they don't know about complaint letters I'm getting, so, analysts would be upset and the stock would go down 40%, going to your board and telling them you want approval for a 25% reduction in profits and a 40% reduction in your stock price is not what you want to do as a CEO, you don't want to go to your board with that and when they ask you, well how sure are you that we're going to climb out of this, you say it's going to take 18 months, what if it takes three years, you know, I was, I didn't see the choice we had, honestly, in my heart, you don't build a great company with an increasing number of unhappy customers. I didn't think we had a choice, and Clayton Christensen was one of the consultants that I used to help me think all this through because it was really hard to make this change, Jeff, because we were doing so well. >> Right. >> Ostensibly, we were killing it. >> Right, so it's interesting, I wonder if you could contrast it to what's happening say now with COVID, right, it was this, didn't sneak up on anyone, it was a really kind of a light switch moment in mid-March where suddenly everyone has to work from home, all your digital transformation initiatives are now put on fast forward, but we still have this situation where there's a variety of potential outcomes and timing that's really hard to gauge, so when you're thinking about managing through change within perfect information and you almost have kind of will we go back to normal, will we stay where we are or some spectrum in between, how do you help people think about how they should come up with contingency plans and think about managing through a number of options with imperfect information and really kind of no clear line, you said you had an 18 month ROI that the analytics point to, we're not really sure how long this thing is going to go and what it's going to look like when we get to the other side. >> Well, I think there's two issues there, one of them is how we get through this pandemic period. Until we get to, there's three things we need, we need inexpensive testing that is not done by a professional that we can do at home to see if we're safe. That's number one. Number two, we need a treatment that helps us get through this and get to the other side without dying, we need the fatality rate to even drop further. And number three we need a vaccine. So those are the three things that we need, that the world is working on all three of those, and my guess is that in the first half of 2021 we will have all three of those, we'll have all three of those and this will be a thing, basically, a thing of the past. >> Jeff: Right. >> So, but I don't think the world goes back, to exactly the way it was. People have learned they can have very effective meetings without everybody flying to Chicago, or New York, or Las Angeles, they can do it over Zoom, that doesn't mean meetings go away, but I think they're going to go down in numbers and more online things are going to happen. More people are going to be working from home at least part of the week. It's going to be different. >> Yeah. >> Those CEO's who sit in a somewhat of an ivory tower and get numbers fed to them from their financial staff, and they're not out talking to customers directly, people look at that as anecdotal information, I think it's more important than that, I think you need to see the passion behind the voice and the eyeballs of some of your best customers to understand what's going on with them, and a lot of CEO's don't actually do that. >> Right. You've made a really interesting comment in another interview that you did earlier, and you talked about the high gain questions. And one of the challenges of all CEO's is nobody wants to be the one that tells his CEO bad news, whether that be someone on your staff, whether that be some lower level person who's on the front lines and really knows there's some broken things, or whether it's a good customer as you said and kind of a social setting, how you doin', oh we love you, blah blah blah. But as a CEO you really have stressed that that is really some important hard to find, and hard to filter information up to the executive suite, so what were some of the tips and tricks you used to make sure that people either A. weren't afraid to tell you bad news, and B. that you could kind of go out and sniff it out a little bit more creatively than just kind of waiting for it to come through in the weekly reports. >> Well, obviously, you know, I think all kinds of executives get out and they talk to their customers on a regular basis, they're out and they're talking to them, the problem with those kind of discussions are no one wants to be disrespectful, people want to be nice in those meetings by and large, and you ask questions "how are we doing" "oh you guys are doing great", meanwhile the guy who tells you you're doing great is also looking at some newer technology that might replace you. (laughs) So that kind of question doesn't get you very far. So what we used to do, to be quite specific, is that we used to do a monthly luncheon where I had 12 of my mostly top executives but some people a level or two down, 12 Schwab people with 24 customers. And so they were tables of six, two of us, four customers, and we had a theme that we would talk through and the themes were always around things of, if you had to pick out three things we don't do well, what would they be? Give the customer permission to be comfortable being critical. What are the three things that you've heard about our customers, our competitors doing, that are better than us? What are the things that we need to change to make you even more delighted? You need to ask those kinds of high gain questions where there's no polite answer, the customer is permitted and given the opportunity to answer in a truthful and critical fashion. >> That's a great lesson, as you said give them permission and give them the format and the forum to say some of those things so that you get some of that information. Another great leadership principle that you shared many times, I want to dig into a little bit is kind of motivation verses inspiration. And that those are often confused, but very different concepts in the way that you lead people. I wonder if you can dig in a little bit on your philosophy on those two things. >> Sure, you know it's funny, those terms motivation and inspiration are used almost interchangeably as if they're the same thing. And they're not. Motivation is fundamental in business, and it's the exchange of behaviors for rewards. I was a psychology major in college, this was one of the things we learned about the exchange of behaviors for rewards and that's motivation. Inspiration on the other hand, is the effort to make people want to do something for, not for rewards that are tangible, but to be part of something great. We want you to be part of a movement, we want you to be part of something special, something that's going to change the world for the better and trying to get your employees to buy into this notion that we are on a mission and that mission is to make the world a somewhat better place, it doesn't mean we don't make money, of course we make money, but we're also out for more than a financial bottom line, we're out for a bottom line that's great for customers and maybe pretty great for employees as well. >> So it's interesting, cause you've seen 'em right, you've been in finance for ever, it's always about the shareholders, you've talked about the stock price a number of times in terms of a measure, but it seems more purposed led or purpose forward organizations now are more appealing to the younger generation, I think the search for a little bit more meaning in our day to day job and what that company is all about seems to have elevated over the last several years and taken a higher role in what they used to call triple line accounting, is it not only your shareholders who always are at the top of the list and have been traditionally, but your customers, your employee, and more and more your community and even the environment. Have you seen the swing towards, it's not just about shareholder value? >> Well, not on Wall Street. (laughs) I think, Wall Street is about money, and the people who go to work on Wall Street, and the way Wall Street operates, it's measured in dollars and cents and share price and profits and distributions to private equity partners and so forth, it's a numbers game and it is a profit game on Wall Street, we should be honest about that, it is what it is. >> Jeff: Sure. >> And, I have yet to see the Wall Street firm that is talking about triple bottom lines cause that just doesn't happen very much on Wall Street, it doesn't happen from my perspective, it almost doesn't happen at all. But there are other companies where they do talk about a more triple bottom line, and I think as a leader if you want to be that kind of company and you want to be that kind of leader you have to be comfortable talking about that, and not feel embarrassed by it, not feel that oh, that's too airy fairy, that's too goody two shoes. If you really believe that our goal is to have a triple bottom line, profitability, great for employees, and great for customers and the world at large, then as a leader you need to talk about that. You need to be willing to stand up and have those kinds of conversations and let yourself be challenged by perhaps the press, employees, shareholders, who think that that's not a good strategy. I believe that in many cases that's a great strategy because on a long-term basis you don't want every employee in your company, and all of your senior executives to basically be up for sale, that if a bigger job comes in with a bigger compensation, they're out the door. You're looking for loyalty, you're looking for buy in, for participation, for wanting to give every bit of themselves for the mission of the company. And as the CEO, if you want to take that path, you got to be willing to put yourself out there and talk about it and suffer the slings and arrows from those who don't believe that that's the best path for the company. >> Right, right. Well and that's another thing that you've talked about quite often, is really that the company feeds off the passion of the CEO, and the CEO has to have that passion because they're lookin', they're watchin', they're lookin' at your moves, they're lookin' at what you say, they're lookin' at your body language, they're lookin' at everything that you do. And I think within the context of these transitions and these difficult times, you have another great line that you've used a number of times, which is: "You need to have a perception of momentum." I love that line, so everyone needs to think that we're on the right path, we're not there yet, I feel it, he looks like he feels it, he looks like he's confident, so now I'm confident and I'm going to jump in and help be part of this change process. You've seen that time and time. >> Well, momentum is a tricky thing, you can have momentum and not have the perception of momentum. Because if you're doing a turn around, what often happens is in the early stages of the turn around, the numbers start to change but they're small, and you really haven't seen, it's not as steep. The turn around doesn't go steep, the turn around goes and builds slowly. And, what you need to be measuring in the beginning, are kind of the inputs and behaviors rather than the outputs, sales and profits. Those take longer. But you need to build belief, you need to build buy in, because it can take a long time before things start getting better and you don't want your best people to wonder whether this is the right move, should I be looking for another job, so, you have to build the perception of momentum even as you're building the reality of momentum. >> Right, right. So another thing we cover a lot of tech conferences, obviously, Cloud and AI, machine learning are hot things. But, you know, it always goes back to the big three. It's the technology, okay, but it's also people, and more importantly I think that gets left out is process. So, when you're thinking about, you know you're management is, and again, especially through a transition or a difficult time or some unknown and choppy waters, how do you think about those three, prioritizing those three and organizing those three between people, process and technology? >> Okay, well, you know always looking for technology that can be implemented to give you productivity, better customer service, you need to be monitoring what you're competitors are doing, and be looking out, sometimes at the bleeding edge, where you don't need to implement those kinds of changes right away, but you need to know where you want to go down the road, so you have some sense of that. As far as process goes, your processes are both a strength and a weakness because the strength of how well you run your processes today is also how hard they're going to be to change tomorrow. You know, companies are built for predictability, reliability, risk minimization, and all of your processes are built for those things. But those are also the things that are the opposite of big breakthrough changes. So you need to be thinking about, all right, are we strengthening our processes but also, if we have a change coming that's going to require a change of some of those processes, how is that going to get in our way and how are we going to get past that? >> Jeff: Right. >> I've left people for the last because to me that's the heart and soul of a successful executive. One person never gets everything done, it's all about the quality of your team. You've got to be a recruiter, you've got to be always on the look out for new talent that can help your company, and you've got to be thinking about how you're going to recruit that talent. You have to be a magnet for talent. When I sit on boards and I talk to the CEOs, I ask them, what are you doing to be a magnet for talent? What does that mean? What are you doing for great people to want to work for you? For you, and your company, what are you doing, how are you reinvesting in people, how are you putting time and energy in their professional development, in their growth? How are you getting to know them? How are you understanding their ambitions, their hopes and desires for the future? How much time and effort do you spend on that? And that's all part of having people not leave, everyone, in a way you can look at the world and think everyone is for sale. But you want people that are not for sale, that are committed to you and committed to the mission and in today's world where everything seems so fluid, I know my ideas about this probably seem very old and perhaps out of date, but I still believe in them with all my heart, that you want people that are committed to you and what we are accomplishing together. And you have to be reinforcing that with your words, and even more importantly with your actions. >> Yeah, I think it goes back to your inspiration, people are much more motivated by inspiration than just collecting a paycheck or getting a compensation back for what they're doing, which is a great segue to the last topic I wanted to cover with you, and I remember this, we had dinner, I think it was 1996 at the Wharton's Zweig Series, and you were such a phenomenal speaker, and I remember asking you the question and I remember your answer, and I've repeated it ad nauseam for the last 20 years. I said, "David, you're such a great speaker, why, how?" And you were so matter of fact in that you just said "hey, it's an important part of my job, I treat it as a skill, I hired a coach, I practiced like I would do any other skill", and why that's such a powerful story is you clearly are in a position of power, you could clearly have a crazy ego that got in the way of such a matter of fact accomplishment of these tasks and all the PR people I talk to and they hear this story "oh my gosh, we got to get him talking to my executives" because so many people let ego get in the way of what is really an important task for a CEO and a leader which is communication and you recognize that early on and really went after it to make sure that you were very good at this very important task. >> Well, what happened to me, I got lucky, I got lucky. When I got promoted to be the CEO of Schwab, I knew I was going to have to do a lot more public speaking and I already thought I was pretty good at being a public speaker, but I thought I needed to fine tune my messaging, I needed to get it better. So, I looked around and I got some referrals and I hired a guy that I thought was going to be a speech writer for me, that would help craft the message. And, we had our first meeting, and we're talking about an upcoming speech and he says to me things like, "Well, Dave, I want to know more about your life. Tell me how you grew up, tell me what you're proudest moments were, I want to learn about you." And I said to him, "Terry, I'm not looking for a biographer, I want a speech writer, I need a guy that can help me craft my message." And he said, "Well, Dave, that's not how I do things. I need to know who you are, I need to know what your passions are and where they come from so that we can give a message that has more than just words it has meaning, it has your passion built into it, that's what we need to do." And that's what Terry taught me, was that it's not just the words, it's also the passion, energy, and meaning and connection behind the words. And I want to mention one other thing that I think is very important. When people talk about being really good communicators, they often talk about speaking. They don't focus on listening. And listening is a tremendously important skill. So for example, you give a speech, you're the CEO or Senior Executive, you give a speech, do you stay there and do you do a Q+A session? The Q+A session can even be more important than the speech sometimes, because all the employees know that the speech is something that was pre-arranged, it's not on the cuff, it's something that's been thought about and prepared. But the questions and answers are authentic and in the moment. People are clamoring for authentic leadership. That Q+A session, where you're listening for the question and maybe the question behind the question. So you're not just trying to get through them as fast as you can, but you're trying to really answer and listen for the question and the question behind the question. And then answer those from the heart with passion, and that's how you will score the most points with your audience. >> That's great. And then who knows what comes from it, in getting ready for this I came across your blog post talking about Gopi Kallayil a mutual friend at Wharton who reached out to you after that same dinner, and you were happy enough, or you were kind enough to respond and grow a friendship and a relationship that again is lasted for decades. So that's such an important message to listen, as somebody said right, "God gave you two ears and one mouth should try to use them in that ratio." (laughs) Well David, thank you so much for taking some time, again I think these are really trying times in leadership, I think it's really an opportunity for great leaders to shine and those that don't there's really no place to hide. So I really appreciate you sharing your insight and taking a few minutes with us. >> Thanks, Jeff, I hope all the people that follow you and listen to your broadcasts learn something today and come away with some benefit from this time we've spent together. >> Undoubtedly, undoubtedly. Well, thanks again. All right, he's Dave Pottruck, I'm Jeff Frick, you're watching theCUBE, thanks for watching and we'll see you next time. (upbeat music)

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

>> Announcer: From theCUBE Studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a Cube Conversation. >> Hey welcome back everybody, Jeff Frick here with theCUBE. We're in our Palo Alto Studios today, having a Cube Conversation, you know, with the COVID situation going on we've had to change our business and go pretty much 100% digital. And as part of that process, we wanted to reach out to our community, and talk to some of the leaders out there, because I think leadership in troubling times is even more amplified in it's importance. So we're excited to be joined today by two leaders in our community. First one being John Chambers, a very familiar face from many, many years at Cisco, who's now the founder and CEO of JC2 Ventures. John, great to see you. >> Jeff, it's a pleasure to be with you again. >> Absolutely. And joining him is Umesh Sachdev, he's the co-founder and CEO of Uniphore. First time on theCUBE, Umesh, great to meet you. >> Jeff, thank you for having me, it's great to be with you. >> You as well, and I had one of your great people on the other day, talking about CX, and I think CX is the whole solution. Why did Uber beat cabs, do you want to stand on a corner and raise your hand in the rain? Or do you want to know when the guy's going to come pick you up, in just a couple minutes? So anyway, welcome. So let's jump into it. John, one of your things, that you talked about last time we talked, I think it was in October, wow how the world has changed. >> Yes. >> Is about having a playbook, and really, you know, kind of thinking about what you want to do before it's time to actually do it, and having some type of a script, and some type of direction, and some type of structure, as to how you respond to situations. Well there's nothing like a disaster to really fire off, you know, the need to shift gears, and go to kind of into a playbook mode. So I wonder if you could share with the viewers, kind of what is your playbook, you've been through a couple of these bumps. Not necessarily like COVID-19, but you've seen a couple bumps over your career. >> So it's my pleasure Jeff. What I'll do is kind of outline how I believe you use an innovation playbook on everything from acquisitions, to digitizing a company, to dealing with crisis. Let's focus on the playbook for crisis. You are right, and I'm not talking about my age, (John laughing) but this is my sixth financial crisis, and been through the late 1990s with the Asian financial crisis, came out of it even stronger at Cisco. Like everybody else we got knocked down in the 2001 tech bubble, came back from it even stronger. Then in 2008, 2009, Great Recession. We came through that one very, very strong, and we saw that one coming. It's my fourth major health crisis. Some of them turned out to be pretty small. I was in Mexico when the bird pandemic hit, with the President of Mexico, when we thought it was going to be terrible. We literally had to cancel the meetings that evening. That's why Cisco built the PLAR Presence. I was in Brazil for the issue with the Zika virus, that never really developed much, and the Olympics went on there, and I only saw one mosquito during the event. It bit me. But what I'm sharing with you is I've seen this movie again and again. And then, with supply chain, which not many people were talking about yet, supply chain crisis, like we saw in Japan with the Tsunami. What's happening this time is you're seeing all three at one time, and they're occurring even faster. So the playbook is pretty simple in crisis management, and then it would be fun to put Umesh on the spot and say how closely did you follow it? Did you agree with issues, or did you disagree, et cetera, on it. Now I won't mention, Umesh, that you've got a review coming up shortly from your board, so that should not affect your answer at all. But the first playbook is being realistic, how much was self-inflicted, how much was market. This one's largely market, but if you had problems before, you got to address them at the same time. The second thing is what are the five to seven things that are material, what you're going to do to lead through this crisis. That's everything from expense management, to cash preservation. It's about how do you interface to your employees, and how do you build on culture. It's about how do you interface to your customers as they change from their top priority being growth and innovation, to a top priority being cost savings, and the ability to really keep their current revenue streams from churning and moving. And it's about literally, how do make your big bets for what you want to look like as you move out of this market. Then it's how do you communicate that to your employees, to your shareholders, to your customers, to your partners. Painting the picture of what you look like as you come out. As basic as that sounds, that's what crisis management is all about. Don't hide, be visible, CEOs should take the role on implementing that playbook. Umesh to you, do you agree? And have fun with it a little bit, I like the give and take. >> I want to see the playbook, do you have it there, just below the camera? (Jeff laughing) >> I have it right here by my side. I will tell you, Jeff, in crisis times and difficult times like these, you count all the things that go right for you, you count your blessings. And one of the blessings that I have, as a CEO, is to have John Chambers as my mentor, by my side, sharing not just the learning that he had through the crisis, but talking through this, with me on a regular basis. I've read John's book more than a few times, I bet more than anybody in the world, I've read it over and over. And that, to me, is preparation going into this mode. One of the things that John has always taught me is when times get difficult, you get calmer than usual. It's one thing that when you're cruising on the freeway and you're asked to put the brakes, but it's quite another when you're in rocket ship, and accelerating, which is what my company situation was in the month of January. We were coming out of a year of 300% growth, we were driving towards another 300% growth, hiring tremendously, at a high pace. Winning customers at a high pace, and then this hit us. And so what I had to do, from a playbook perspective, is, you know, take a deep breath, and just for a couple of days, just slow down, and calmly look at the situation. My first few steps were, I reached out to 15 of our top customers, the CEOs, and give them calls, and said let's just talk about what you're seeing, and what we are observing in our business. We get a sense of where they are in their businesses. We had the benefit, my co-founder works out of Singapore, and runs our Asia business. We had the benefit of picking up the sign probably a month before everyone else did it in the U.S. I was with John in Australia, and I was telling John that "John, something unusual is happening, "a couple of our customers in these countries in Asia "are starting to tell us they would do the deal "a quarter later." And it's one thing when one of them says it, it's another when six of them say it together. And John obviously has seen this movie, he could connect the dots early. He told me to prepare, he told the rest of the portfolio companies that are in his investment group to start preparing. We then went to the playbook that John spoke of, being visible. For me, culture and communication take front seat. We have employees in ten different countries, we have offices, and very quickly, even before the governments mandated, we had all of them work, you know, go work from home, and be remote, because employee safety and health was the number one priority. We did our first virtual all-hands meeting on Zoom. We had about 240 people join in from around the world. And my job as CEO, usually our all-hands meeting were different functional leaders, different people in the group talk to the team about their initiatives. This all-hands was almost entirely run by me, addressing the whole company about what's going to be the situation from my lens, what have we learned. Be very factual. At the same time, communicating to the team that because of the fact that we raised our funding the last year, it was a good amount of money, we still have a lot of that in the bank, so we going to be very secure. At the same time, our customers are probably going to need us more than ever. Call centers are in more demand than ever, people can't walk up to a bank branch, they can't go up to a hospital without taking an appointment. So the first thing everyone is doing is trying to reach call centers. There aren't enough people, and anyways the work force that call centers have around the world, are 50% working from home, so the capacity has dropped. So our responsibility almost, is to step up, and have our AI and automation products available to as many call centers as we can. So as we are planning our own business continuity, and making sure every single employee is safe, the message to my team was we also have to be aggressive and making sure we are more out there, and more available, to our customers, that would also mean business growth for us. But first, and foremost is for us to be responsible citizens, and just make it available where it's needed. As we did that, I quickly went back to my leadership team, and again, the learning from John is usually it's more of a consensus driven approach, we go around the table, talk about a topic for a couple of hours, get the consensus, and move out of the room. My leadership meetings, they have become more frequent, we get together once a week, on video call with my executive leaders, and it's largely these days run by me. I broke down the team into five different war rooms, with different objectives. One of them we called it the preservation, we said one leader, supported by others will take the responsibility of making sure every single employee, their families, and our current customers, are addressed, taken care of. So we made somebody lead that group. Another group was made responsible for growth. Business needs to, you know, in a company that's growing at 300%, and we still have the opportunity, because call centers need us more than ever, we wanted to make sure we are responding to growth, and not just hunkering down, and, you know, ignoring the opportunity. So we had a second war room take care of the growth. And a third war room, lead by the head of finance, to look at all the financial scenarios, do the stress tests, and see if we are going to be ready for any eventuality that's going to come. Because, you know, we have a huge amount of people, who work at Uniphore around the world, and we wanted to make sure their well being is taken care of. So from being over communicative, to the team and customers, and being out there personally, to making sure we break down the teams. We have tremendous talent, and we let different people, set of people, run different set of priorities, and report back to me more frequently. And now, as we have settled into this rhythm, Jeff, you know, as we've been in, at least in the Bay area here, we've been shelter in place for about a month now. As we are in the rhythm, we are beginning to do virtual happy hours, every Thursday evening. Right after this call, I get together with my team with a glass of wine, and we get together, we talk every but work, and every employee, it's not divided by functions, or leadership, and we are getting the rhythm back into the organization. So we've gone and adjusted in the crisis, I would say very well. And the business is just humming along, as we had anticipated, going into this crisis. But I would say, if I didn't have John by my side, if I hadn't read his book, the number of times that I have, every plane ride we've done together, every place we've gone together, John has spoken about war stories. About the 2001, about 2008, and until you face the first one of your own, just like I did right now, you don't appreciate when John says leadership is lonely. But having him by our side makes it easier. >> Well I'm sure he's told you the Jack Welch story, right? That you've quoted before, John, where Jack told you that you're not really a good leader, yet, until you've been tested, right. So you go through some tough stuff, it's not that hard to lead on an upward to the right curve, it's when things get a little challenging that the real leadership shines through. >> Completely agree, and Jack said it the best, we were on our way to becoming the most valuable company in the world, he looked me in the eye and said "John, you have a very good company." And I knew he was about to give me a teaching moment, and I said "What does it take to have a great one?" He said a near death experience. And I thought I did that in '97, and some of the other management, and he said, "No, it's when you went through something "like we went through in 2001, "which many of our peers did die in." And we were knocked down really hard. When we came back from it, you get better. But what you see in Umesh is a very humble, young CEO. I have to remember he's only 34 years old, because his maturity is like he's 50, and he's seen it before. As you tell, he's like a sponge on learning, and he doesn't mind challenging. And what what he didn't say, in his humbleness, is they had the best month in March ever. And again, well over 300% versus the same quarter a year ago. So it shows you, if you're in the right spot, i.e. artificial intelligence, i.e. cost savings, i.e. customer relationship with their customers, how you can grow even during the tough times, and perhaps set a bold vision, based upon facts and a execution plan that very few companies will be able to deliver on today. So off to a great start, and you can see why I'm so honored and proud to be his strategic partner, and his coach. >> Well it's interesting, right, the human toll of this crisis is horrible, and there's a lot of people getting sick, and a lot of people are dying, and all the estimations are a lot more are going to die this month, as hopefully we get over the hump of some of these curves. So that aside, you know, we're here talking kind of more about the, kind of, the business of this thing. And it's really interesting kind of what a catalyst COVID has become, in terms of digital transformation. You know, we've been talking about new ways to work for years, and years, and years, and digital transformation, and all these kind of things. You mentioned the Cisco telepresence was out years, and decades ago. I mean I worked in Mitsubishi, we had a phone camera in 1986, I looked it up today, it was ridiculous, didn't work. But now, it's here, right. Now working from home is here. Umesh mentioned, you know, these huge call centers, now everybody's got to go home. Do they have infrastructure to go home? Do they have a place to work at home? Do they have support to go home? Teachers are now being forced, from K-12, and I know it's a hot topic for you, John, to teach from home. Teach on Zoom, with no time to prep, no time to really think it through. It's just like the kids aren't coming back, we got to learn it. You know I think this is such a transformational moment, and to your point, if this goes on for weeks, and weeks, and months, and months, which I think we all are in agreement that it will. I think you said, John, you know, many, many quarters. As people get new habits, and get into this new flow, I don't think they're going to go back back to the old ways. So I think it's a real, you know, kind of forcing function for digital transformation. And it's, you can't, you can't sit on the sidelines, cause your people can't come to the office anymore. >> So you've raised a number of questions, and I'll let Umesh handle the tough part of it. I will answer the easy part, which is I think this is the new normal. And I think it's here now, and the question is are you ready for it. And as you think about what we're really saying is the video sessions will become such an integral part of our daily lives, that we will not go back to having to do 90% of our work physically. Today alone I've done seven major group meetings, on Zoom, and Google Hangouts, and Cisco Webex. I've done six meetings with individuals, or the key CEOs of my portfolio. So that part is here to stay. Now what's going to be fascinating is does that also lead into digitization of our company, or do the companies make the mistake of saying I'm going to use this piece, because it's so obvious, and I get it, in terms of effectiveness, but I'm not going to change the other things in my normal work, in my normal business. This is why, unfortunately, I think you will see, we originally said, Jeff, you remember, 40% maybe as high as 45% of the Fortune 500 wouldn't exist in a decade. And perhaps 70% of the start-ups wouldn't exist in a decade, that are venture capital backed. I now think, unfortunately, you're going to see 20-35% of the start-ups not exist in 2 years, and I think it's going to shock you with the number of Fortune 500 companies that do not make this transition. So where you're leading this, that I completely agree with, is the ability to take this terrible event, with all of the issues, and again thank our healthcare workers for what they've been able to do to help so many people, and deal with the world the way it is. As my parents who are doctors taught me to do, not the way we wish it was. And then get your facts, prepare for the changes, and get ready for the future. The key would be how many companies do this. On the area Umesh has responsibility for, customer experience, I think you're going to see almost all companies focus on that. So it can be an example of perhaps how large companies learn to use the new technology, not just video capability, but AI, assistance for the agents, and then once they get the feel for it, just like we got the feel for these meetings, change their rhythm entirely. It was a dinner in New York, virtually, when we stopped, six weeks ago, traveling, that was supposed to be a bunch of board meetings, customer meetings, that was easy. But we were supposed to have a dinner with Shake Shack's CEO, and we were supposed to have him come out and show how he does cool innovation. We had a bunch of enterprise companies, and a bunch of media, and subject matter expertise, we ended up canceling it, and then we said why not do it virtually? And to your point, we did it in 24 different locations. Half the people, remember six weeks ago, had never even used Zoom. We had milk shakes, and hamburgers, and french fries delivered to their home. And it was one of the best two hour meetings I've seen. The future is this now. It's going to change dramatically, and Umesh, I think, is going to be at the front edge of how enterprise companies understand how their relationship with their customers is going to completely transform, using AI, conversational AI capability, speech recognition, et cetera. >> Yeah, I mean, Umesh, we haven't even really got into Uniphore, or what you guys are all about. But, you know, you're supporting call centers, you're using natural language technology, both on the inbound and all that, give us the overview, but you're playing on so many kind of innovation spaces, you know, the main interaction now with customers, and a brand, is either through the mobile phone, or through a call center, right. And that's becoming more, and increasingly, digitized. The ability to have a voice interaction, with a machine. Fascinating, and really, I think, revolutionary, and kind of taking, you know, getting us away from these stupid qwerty keyboards, which are supposed to slow us down on purpose. It's still the funniest thing ever, that we're still using these qwerty keyboards. So I wonder if you can share with us a little bit about, you know, kind of your vision of natural language, and how that changes the interaction with people, and machines. I think your TED Talk was really powerful, and I couldn't help but think of, you know, kind of mobile versus land lines, in terms of transformation. Transforming telecommunications in rural, and hard to serve areas, and then actually then adding the AI piece, to not only make it better for the front end person, but actually make it for the person servicing the account. >> Absolutely Jeff, so Uniphore, the company that I founded in 2008. We were talking about it's such a coincidence that I founded the company in 2008, the year of the Great Recession, and here we are again, talking in midst of the impact that we all have because of COVID. Uniphore does artificial intelligence and automation products, for the customer service industry. Call centers, as we know it, have fundamentally, for the last 20, 30 years, not have had a major technology disruption. We've seen a couple of ways of business model disruption, where call centers, you know, started to become offshore, in locations in Asia, India, and Mexico. Where our calls started to get routed around the world internationally, but fundamentally, the core technology in call centers, up until very recently, hadn't seen a major shift. With artificial intelligence, with natural language processings, speech recognition, available in over 100 languages. And, you know, in the last year or so, automation, and RPA, sort of adding to that mix, there's a whole new opportunity to re-think what customer service will mean to us, more in the future. As I think about the next five to seven years, with 5G happening, with 15 billion connected devices, you know, my five year old daughter, she the first thing she does when she enters the house from a playground, she goes to talk to her friend called Alexa. She speaks to Alexa. So, you know, these next generation of users, and technology users will grow up with AI, and voice, and NLP, all around us. And so their expectation of customer service and customer experience is going to be quantum times higher than some of us have, from our brands. I mean, today when a microwave or a TV doesn't work in our homes, our instinct could be to either go to the website of the brand, and try to do a chat with the agent, or do an 800 number phone call, and get them to visit the house to fix the TV. With, like I said with 5G, with TV, and microwave, and refrigerator becoming intelligent devices, you know, I could totally see my daughter telling the microwave "Why aren't you working?" And, you know, that question might still get routed to a remote contact center. Now the whole concept of contact center, the word has center in it, which means, in the past, we used to have these physical, massive locations, where people used to come in and put on their headsets to receive calls. Like John said, more than ever, we will see these centers become dispersed, and virtual. The channels with which these queries will come in would no more be just a phone, it would be the microwave, the car, the fridge. And the receivers of these calls would be anywhere in the world, sitting in their home, or sitting on a holiday in the Himalayas, and answering these situations to us. You know, I was reading, just for everyone to realize how drastic this shift has been, for the customer service industry. There are over 14 million workers, who work in contact centers around the world. Like I said, the word center means something here. All of them, right now, are working remote. This industry was never designed to work remote. Enterprises who fundamentally didn't plan for this. To your point Jeff, who thought digitization or automation, was a project they could have picked next year, or they were sitting on the fence, will now know more have a choice to make this adjustment. There's a report by a top analyst firm that said by 2023, up to 30% of customer service representatives would be remote. Well guess what, we just way blew past that number right away. And most of the CEOs that I talked to recently tell me that now that this shift has happened, about 40% of their workers will probably never return back to the office. They will always remain a permanent virtual workforce. Now when the workforce is remote, you need all the tools and technology, and AI, that A, if on any given day, 7-10% of your workforce calls in sick, you need bots, like the Amazon's Alexa, taking over a full conversation. Uniphore has a product called Akira, which does that in call centers. Most often, when these call center workers are talking, we have the experience of being put on hold, because call center workers have to type in something on their keyboard, and take notes. Well guess what, today AI and automation can assist them in doing that, making the call shorter, allowing the call center workers to take a lot more calls in the same time frame. And I don't know your experience, but, you know, a couple of weekends ago, the modem in my house wasn't working. I had a seven hour wait time to my service provider. Seven hour. I started calling at 8:30, it was somewhere around 3-4:00, finally, after call backs, wait, call back, wait, that it finally got resolved. It was just a small thing, I just couldn't get to the representative. So the enterprises are truly struggling, technology can help. They weren't designed to go remote, think about it, some of the unique challenges that I've heard now, from my customers, is that how do I know that my call center representative, who I've trained over years to be so nice, and empathetic, when they take a pee break, or a bio break, they don't get their 10 year old son to attend a call. How do I know that? Because now I can no more physically check in on them. How do I know that if I'm a bank, there's compliance? There's nothing being said that isn't being, is, you know, supposed to be said, because in a center, in an office, a supervisor can listen in. When everyone's remote, you can't do that. So AI, automation, monitoring, supporting, aiding human beings to take calls much better, and drive automation, as well as AI take over parts of a complete call, by the way of being a bot like Alexa, are sort of the things that Uniphore does, and I just feel that this is a permanent shift that we are seeing. While it's happening because of a terrible reason, the virus, that's affecting human beings, but the shift in business and behavior, is going to be permanent in this industry. >> Yeah, I think so, you know it's funny, I had Marten Mickos on, or excuse me, yeah, Marten Mickos, as part of this series. And I asked him, he's been doing distributed companies since he was doing MySQL, before Sun bought them. And he's, he was funny, it's like actually easier to fake it in an office, than when you're at home, because at home all you have to show is your deliverables. You can't look busy, you can't be going to meetings, you can't be doing things at your computer. All you have to show is your output. He said it's actually much more efficient, and it drives people, you know, to manage to the output, manage to what you want. But I want to shift gears a little bit, before we let you go, and really talk a little bit about the role of government. And John, I know you've been very involved with the Indian government, and the French government, trying to help them, in their kind of entrepreneurial pursuits, and Uniphore, I think, was founded in India, right, before you moved over here. You know we've got this huge stimulus package coming from the U.S. government, to try to help, as people, you know, can't pay their mortgage, a lot of people aren't so fortunate to be in digital businesses. It's two trillion dollars, so as kind of a thought experiment, I'm like well how much is two trillion dollars? And I did the cash balance of the FAANG companies. Facebook, Apple, Amazon, Netflix, and Alphabet, just looking at Yahoo Finance, the latest one that was there. It's 333 billion, compared to two trillion. Even when you add Microsoft's 133 billion on top, it's still shy, it's still shy of 500 billion. You know, and really, the federal government is really the only people in a position to make kind of sweeping, these types of investments. But should we be scared? Should we be worried about, you know, kind of this big shift in control? And should, do you think these companies with these big balance sheets, as you said John, priorities change a little bit. Should it be, keep that money to pay the people, so that they can stay employed and pay their mortgage, and go buy groceries, and maybe get take out from their favorite restaurant, versus, you know, kind of what we've seen in the past, where there's a lot more, you know, stock buy backs, and kind of other uses of these cash. As you said, if it's a crisis, and you got to cut to survive, you got to do that. But clearly some of these other companies are not in that position. >> So you, let me break it into two pieces, Jeff, if I may. The first is for the first time in my lifetime I have seen the federal government and federal agencies move very rapidly. And if you would have told me government could move with the speed we've seen over the last three months, I would have said probably not. The fed was ahead of both the initial interest rate cuts, and the fed was ahead in terms of the slowing down, i.e. your 2 trillion discussion, by central banks here, and around the world. But right behind it was the Treasury, which put on 4 trillion on top of that. And only governments can move in this way, but the coordination with government and businesses, and the citizens, has been remarkable. And the citizens being willing to shelter in place. To your question about India, Prime Minister Modi spent the last five years digitizing his country. And he put in place the most bandwidth of any country in the world, and literally did transformation of the currency to a virtual currency, so that people could get paid online, et cetera, within it. He then looked at start-ups and job creation, and he positioned this when an opportunity or problem came along, to be able to perhaps navigate through it in a way that other countries might struggle. I would argue President Macron in France is doing a remarkable job with his innovation economy, but also saying how do you preserve jobs. So you suddenly see government doing something that no business can do, with the scale, and the speed, and a equal approach. But at the same time, may of these companies, and being very candid, that some people might have associated with tech for good, or with tech for challenges, have been unbelievably generous in giving both from the CEOs pockets perspective, and number two and three founders perspective, as well as a company giving to the CDC, and giving to people to help create jobs. So I actually like this opportunity for tech to regain its image of being good for everybody in the world, and leadership within the world. And I think it's a unique opportunity. For my start-ups, I've been so proud, Jeff. I didn't have to tell them to go do the right thing with their employees, I didn't have to tell them that you got to treat people, human lives first, the economy second, but we can do both in parallel. And you saw companies like Sprinklr suddenly say how can I help the World Health Organization anticipate through social media, where the next spread of the virus is going to be? A company, like Bloom Energy, with what KR did there, rebuilding all of the ventilators that were broken here in California, of which about 40% were, out of the stock that they got, because it had been in storage for so long, and doing it for all of California in their manufacturing plant, at cost. A company like Aspire Foods, a cricket company down in Texas, who does 3D capabilities, taking part of their production in 3D, and saying how many thousand masks can I generate, per week, using 3D printers. You watch what Umesh has done, and how he literally is changing peoples lives, and making that experience, instead of being a negative from working at home, perhaps to a positive, and increasing the customer loyalty in the process, as opposed to when you got a seven hour wait time on a line. Not only are you probably not going to order anything else from that company, you're probably going to change it. So what is fascinating to me is I believe companies owe an obligation to be successful, to their employees, and to their shareholders, but also to give back to society. And it's one of the things I'm most proud about the portfolio companies that I'm a part of, and why I'm so proud of what Umesh is doing, in both a economically successful environment, but really giving back and making a difference. >> Yeah, I mean, there's again, there's all the doctor stuff, and the medical stuff, which I'm not qualified to really talk about. Thankfully we have good professionals that have the data, and the knowledge, and know what to do, and got out ahead of the social distancing, et cetera, but on the backside, it really looks like a big data problem in so many ways, right. And now we have massive amounts of compute at places like Amazon, and Google, and we have all types of machine learning and AI to figure out, you know, there's kind of resource allocation, whether that be hospital beds, or ventilators, or doctors, or nurses, and trying to figure out how to sort that all out. But then all of the, you know, genome work, and you know, kind of all that big heavy lifting data crunching, you know, CPU consuming work, that hopefully is accelerating the vaccine. Because I don't know how we get all the way out of this until, it just seems like kind of race to the vaccine, or massive testing, so we know that it's not going to spike up. So it seems like there is a real opportunity, it's not necessarily Kaiser building ships, or Ford building planes, but there is a role for tech to play in trying to combat this thing, and bring it under control. Umesh, I wonder if you could just kind of contrast being from India, and now being in the States for a couple years. Anything kind of jump out to you, in terms of the differences in what you're hearing back home, in the way this has been handled? >> You know, it's been very interesting, Jeff, I'm sure everyone is concerned that India, for many reasons, so far hasn't become a big hot spot yet. And, you know, we can hope and pray that that remains to be the case. There are many things that the government back home has done, I think India took lessons from what they saw in Europe, and the U.S, and China. They went into a countrywide lockdown pretty early, you know, pretty much when they were lower than a two hundred positive tested cases, the country went into lockdown. And remember this is a 1.5 billion people all together going into lockdown. What I've seen in the U.S. is that, you know, California thankfully reacted fast. We've all been sheltered in place, there's cabin fever for all of us, but you know, I'm sure at the end of the day, we're going to be thankful for the steps that are taken. Both by the administration at the state level, at the federal level, and the medical doctors, who are doing everything they can. But India, on the other hand, has taken the more aggressive stance, in terms of doing a country lockdown. We just last evening went live at a University in the city of Chennai, where Uniphore was born. The government came out with the request, much like the U.S., where they're government departments were getting a surge of traffic about information about COVID, the hospitals that are serving, what beds are available, where is the testing? We stood up a voice bot with AI, in less than a week, in three languages. Which even before the government started to advertise, we started to get thousands of calls. And this is AI answering these questions for the citizens, in doing so. So it goes back to your point of there's a real opportunity of using all the technology that the world has today, to be put to good use. And at the same time, it's really partnering meaningfully with government, in India, in Singapore, in Vietnam, and here in the U.S., to make sure that happens on, you know, John's coaching and nudging, I became a part of the U.S.-India Strategic Partnership Forum, which is truly a premier trade and commerce body between U.S. and India. And I, today, co-chaired the start-up program with, you know, the top start-ups between U.S. and India, being part of that program. And I think we got, again, tremendously fortunate, and lucky with the timeline. We started working on this start-up program between U.S. and India, and getting the start-ups together, two quarters ago, and as this new regulation with the government support, and the news about the two trillion dollar packages coming out, and the support for small businesses, we could quickly get some of the questions answered for the start-ups. Had we not created this body, which had the ability to poll the Treasury Department, and say here are questions, can start-ups do A, B, and C? What do you have by way of regulation? And I think as a response to one of our letters, on Monday the Treasury put out an FAQ on their website, which makes it super clear for start-ups and small businesses, to figure out whether they qualify or they don't qualify. So I think there's ton that both from a individual company, and the technology that each one of us have, but also as a community, how do we, all of us, meaningfully get together, as a community, and just drive benefit, both for our people, for the economy, and for our countries. Wherever we have the businesses, like I said in the U.S., or in India, or parts of Asia. >> Yeah, it's interesting. So, this is a great conversation, I could talk to you guys all night long, but I probably would hear about it later, so we'll wrap it, but I just want to kind of close on the following thought, which is really, as you've talked about before John, and as Umesh as you're now living, you know, when we go through these disruptions, things do get changed, and as you said a lot of people, and companies don't get through it. On the other hand many companies are birthed from it, right, people that are kind of on the new trend, and are in a good position to take advantage, and it's not that you're laughing over the people that didn't make it, but it does stir up the pot, and it sounds like, Umesh, you're in a really good position to take advantage of this new kind of virtual world, this new digital transformation, that's just now waiting anymore. I love your stat, they were going to move X% out of the call center over some period of time, and then it's basically snap your fingers, everybody out, without much planning. So just give you the final word, you know, kind of advice for people, as they're looking forward, and Umesh, we'll get you on another time, because I want to go deep diving in natural language, I think that's just a fascinating topic in the way that people are going to interact with machines and get rid of the stupid qwerty keyboard. But let me get kind of your last thoughts as we wrap this segment. Umesh we'll let you go first. >> Umesh, you want to go first? >> I'll go first. My last thoughts are first for the entrepreneurs, everyone who's sort of going through this together. I think in difficult times is when real heroes are born. I read a quote that when it's a sunny day, you can't overtake too many cars, but when it's raining you have a real opportunity. And the other one that I read was when fishermen can't go out fishing, because of the high tide, they come back, and mend their nets, and be ready for the time that they can go out. So I think there's no easy way to say, this is a difficult time for the economy, health wise, I hope that, you know, we can contain the damage that's being done through the virus, but some of us have the opportunity to really take our products and technology out there, more than usual. Uniphore, particularly, has a unique opportunity, the contact center industry just cannot keep up with the traffic that it's seeing. Around the world, across US, across Asia, across India, and the need for AI and automation would never be pronounced more than it is today. As much as it's a great business opportunity, it's more of a responsibility, as I see it. There can be scale up as fast as the demand is coming, and really come out of this with a much stronger business model. John has always told me in final words you always paint the picture of what you want to be, a year or two out. And I see Uniphore being a much stronger AI plus automation company, in the customer service space, really transforming the face of call centers, and customer service. Which have been forced to rethink their core business value in the last few weeks. And, you know, every fence sitter who would think that digitalization and automation was an option that they could think of in the future years, would be forced to make those decisions now. And I'm just making sure that my team, and my company, and I, am ready to gear to that great responsibility and opportunity that's ahead of us. >> John, give you the final word. >> Say Jeff, I don't know if you can still hear me, we went blank there, maybe for me to follow up. >> We gotcha. >> Shimon Peres taught me a lot about life, and dealing with life the way it is, not the way you wish it was. So did my parents, but he also taught me it always looks darkest just before the tide switches, and you move on to victory. I think the challenges in front of us are huge, I think our nation knows how to deal with that, I do believe the government has moved largely pretty effectively, to give us the impetus to move, and then if we continue to flatten the curve on the issues with the pandemic, if we get some therapeutic drugs that dramatically reduce the risk of death, for people that get the challenges the worst, and over time a vaccine, I think you look to the future, America will rebound, it will be rebounding around start-ups, new job creation, using technology in every business. So not only is there a light at the tunnel, at the end of the tunnel, I think we will emerge from this a stronger nation, a stronger start-up community. But it depends on how well we work together as a group, and I just want to say to Umesh, it's an honor to be your coach, and I learn from you as much as I give back. Jeff, as always, you do a great job. Thank you for your time today. >> Thank you both, and I look forward to our next catch up. Stay safe, wash your hands, and thanks for spending some time with us. >> And I just want to say I hope and pray that all of us can get together in Palo Alto real quick, and in person, and doing fist bumps, not shake hands or probably a namaste. Thank you, it's an honor. >> Thank you very much. All right, that was John and Umesh, you're watching theCUBE from our Palo Alto Studios, thanks for tuning in, stay safe, wash your hands, keep away from people that you're not that familiar with, and we'll see you next time. Thanks for watching. (calm music)

(upbeat music) >> From Santa Clara, in the heart of Silicon Valley, it's the Cube, covering the Churchills, 2019. Brought to you by Silicon Angle Media. >> Welcome back here Jeff Frick here with the Cube. We're at the Chuchill's, it's the 9th annual award celebration put on by the Churchill club and the theme is all about leadership this year. We're really excited to have a very special guest John W. Thompson, chairman of Microsoft, a partner at Lightspeed Ventures, he's been around a long time. He's known and talks to a lot of leaders. So john, great to have you on. >> Nice to be here, thank you very much for having me. >> So leadership is such an interesting topic right? You go everything from, um, West point and trying to train young men to be leaders in a military situation to a start up that starts as some small company that had some interesting idea that grows to a huge corporate thing that's changing the world. Ya know, what are some of your thoughts as Silicon Valley is going through some hiccups right now and when you look, >> [John W. Thompson] We are? >> Just a couple little ones. >> I did recognize any of those. >> Well maybe not looking at the stock market. I don't know when that thing is coming back down. But you know when you think about leaders, what are somethings people maybe don't think about and really more interestingly how should people grow or what do you look for in a board member when you're talking to some CEO of a hot rising company? >> Well I think leadership is is as much about your personality and the business that use chose to go run is anything else. And the skills and experiences that someone might need to run a, pick a business, a business the size of Microsoft are fundamentally different than what you might need to run Rubrik, which is a company whose board I serve on. But that being said, leadership has some core principles that are critical independent of the size of the company or organization you're on. First of which is, integrity, second of which is focus, third of which is follow through and execution. There is lots of things that fundamental do and do well. And those who don't do well, don't become or stay leaders very long, that's for sure. >> It's interesting to look at Microsoft cause, ya know, three big personalities. Obviously Bill got it started as a young kid, I mean he was literally a kid in college. Um, then you had Steve Ballmer come in, completely different personalities and ya know, interesting for Bill to be willing to give up their reigns and then ya know, some tough times at Microsoft little bit stagnant and then Satya came in and just has supercharged and really driven a huge transformation in a giant big company. What are some of the attributes when you look at those three as leaders and you've worked with them, that make them so successful? >> Well, I think each of them brought something fundamentally different to the table when they were in the leadership role. In the case of Bill, he clearly was a visionary. He defined a point of view about the technology industry. That had he not done that, we wouldn't be where we are in the world today. And so, Bills role was unique. In the case of Steve, the company had hit a significant bump in the road all around the anti-trust activity. And candidly, it's my impression that Bill really didn't want to be involved in that, so he turned to Steve and says tag you're it. And Steve had a very fundamental view about execution. He was very much focus on execute, execute, execute. And if you look at the way the company preformed, its revenue grew from roughly ten, fifteen billion to almost eighty billion dollars during his term as CEO. However, the stock did not perform very well. So people weren't very happy with that. Ironically enough Satya come in, Satya had run the search business, had run the cloud business, had even run the enterprise software business. So he had a very fundamental view about of what he thought the company needed to do. And there were two issues, issues number one was strategy around cloud. And on the day of his announcement, he announced mobile first, cloud first are the strategies of Microsoft. And then he quickly, quickly made it clear that the number two issue, for the company, was about its culture. And while I am unbelievably fascinated by how much progress we've made on the product front, I'm even more encouraged by what has happened on the, candidly, on the cultural front. >> Right. So on the cultural front that is, are you a harder thing to impact especially on a large global company with hundreds of thousands of employees distributed all over the world, so what are the secrets that change culture like that? >> Its fundamental, it's about openness and honesty and candor. Um, one of the things that happens here in the valley, often for some companies is when they do their quarterly or monthly employee all hands meetings, guess what? They screen and filter all of the questions. Well, we don't do that at Microsoft office. Satya does not do that. He wants to be open and honest and candid with his employees with what's going on. My gosh! That's what real leaders do. And so I think what he has done is nothing that is unique, it's just consistent. He has been very very consistent and predictable in his execution of what openness, listening rather than talking, all of the things that good leaders are able to do. >> Right, its funny the one word you haven't said since we have been sitting here, you keep saying execution of focus, which I love focus execute and delight the customer. You haven't said strategy one single time. you said vision, but not strategy. Its interesting because I think a lot of people don't put enough emphasis on, its just work, you just got to execute. >> Its one thing to have a strategy, but if you can't execute the strategy, of what value is it? So I have always had a view in my roles as leader that it's about focus and executing. Yes, you have to come up with a vision and yes you have to create ideas that employees, and partners, and customers can become excited about. But ultimately it's about execution day in and day out. 368 days of the years, not 365. >> Alright, final question I know you've got a busy night. As you look as some leaders that you look up to, maybe not of this generation that you've been working with, but maybe of a past generation, who are some of the folks that you look to for your inspiration on the leadership side? >> Well, I would have to say the first one was the former vice chairman of IBM, who I was the chief of staff to many many many years ago. His name was Paul Rizzo. Paul was probably one of the most influential people in the company during that period of time, but you'd never know it. He had a level of humility about himself. He had a level of openness and candor in his interaction with employees at all levels up and down the line. And a company of IBM's size back in those days, it was two, three hundred thousand people big. And so he would be the first leader that comes to my mind as someone who was impactful on me. Another one would have been, a guy who created Akamai. He's on the board of Oracle and he's an awesome awesome friend of mine. He was the guy that ran the America's and gave me my first really really big job. And the fact that he was willing to give a guy like me a job like that, was a pretty important move. George Conrades is his name by the way. And so those two people were very very influential as leaders. As I would look at them and try to determine whether or not can I, can I pattern myself after that? Or are there things that they do and say and execute that I should consider as I think about my evolving leadership. >> Right so important to have people that you can look up to, learn from, and to take care of ya and help you along the way. >> [John W. Thompson] I agree >> John, thanks for spending some time it's always great to sit down with you >> Nice to see you as well. >> And continue success. We'll hopefully see you next time not to long from now. >> Lets hope not. >> Alright, he's John W. Thompson and I'm Jeff Frick. You're watching the Cube, were at the Churchill's in Santa Clara California. Thanks for watching we'll see you next time. (upbeat music)

>> Narrator: From Sand Hill Road, in the heart of Silicon Valley, it's the CUBE. Presenting, The People First Network, insights from entrepreneurs and tech leaders. >> Hello everyone welcome to this special CUBE conversation, I'm John Furrier, host of theCUBE. We're here at Mayfield Fund, on Sand Hill Road and Menlo Park. As part of Mayfield's People First Network, co-creation with SiliconANGLE and theCUBE and Mayfield. Next guest, Beth Devin, Managing Director of Innovation Network and Emerging Technologies at Citi Ventures. Thanks for coming on. >> Thanks for having me. >> Hey, thanks for coming in. We're here for the Mayfield fiftieth anniversary, where they're featuring luminaries like yourself, and we're talking about conversations around how the world's changing and the opportunities and the challenges can be met, and how you can share some of your best practices. Talk about what your role is at Citi Ventures and what your focus is. >> Sure, sure, and boy howdy, has it been changing. It's hard to keep up with. I've been at Citi Ventures about two years and one of the reasons I joined was to stand up an Emerging Technology practice. Citi Ventures does a lot of work in corporate venture investing. We tend to be strategic investors, for start up companies that are aligned with the strategy of Citi, as well as our client. We serve probably, eighty percent of the Fortune Five Hundred companies in the world. But we also are a really important part of the innovation ecosystem at Citi. Which is looking at how to drive culture change, broaden mindset, and really, enlist our employees to be part of the innovation process. So, we have an internal incubator, we have a Shark Tank-like process we call Discover Ten X. And what I really bring to the table with my team is monitoring, and learning about, and digesting technology that's not quite ready for commercialization but we think it might be disruptive in a good or challenging way for the bank or our clients. We try to educate and provide content that's helpful to our executives, and just the employee body at large. >> I want to get into a LinkedIn post you wrote, called the Tech Whisperer, which I love. >> Thank you. >> You're there to identify new things to help people understand what that is. But that's not what you've done. You've actually implemented technology. So, on the other side of the coin, in your career. Tell us about some of the things you've done in your career, because you've been a practitioner. >> Beth: Yeah. >> and now you're identifying trends and technologies, before you were on the other side of the table. >> That's right, and sometimes I'll tell you, I have that itch. I miss the operator role, sometimes. Yeah, you know, I feel so fortunate I sort of stumbled on computer science early when I was going to school. And, the first, I'd say twenty years of my career, were working in enterprise I.T, which at that time I couldn't even have made that distinction, like why do you have to say enterprise I.T. I was a software developer, and I was then a DBA, and I even did assembler language programing. So way back when, I think I was so fortunate to fall in to software engineering. It's like problem solving, or puzzle making, and you with your own brain and sort of typing can figure out these problems. Then over the years I became more of a manager and a leader, and sort of about a reputation for being somebody you could put on any hard problem and I'd figure a way out. You know tell me where we're trying to go it looks knotty, like not a fun project, and I would tackle that. And then I'd say, I had some experience working in lots of different industries. Which really gave me an appreciation, for you know, at the end of the day, we can all debate the role that technology plays in companies. But industries, whether it's health care or media, or financial services. There's a lot of the same challenges that we have. So I worked at Turner Broadcasting before it was acquired, you know by Time Warner and AOL. And I learned about media. And then I had a fantastic time working at Charles Schwab. That was my first big Financial Services role when it came back to the bay area. I worked at Art.Com, it was a need converse company, the first company I worked at where I was in charge of all the technology. We had no brick and mortar, and if the technology wasn't working, we weren't earning revenue, in fact, not only that, we were really making customers angry. I also had a role at a start up, where I was the third person to join the company, and we had a great CEO who had a vision, but it was on paper. And we hadn't really figured out how to build this. I was very proud to assemble a team, get an office, and have a product launch in a year. >> So you're a builder, you're a doer, an assembler, key coding, hexadecimal cord dumps back in the day. >> Way back when. We didn't even have monitors. I'll tell ya, it was a long time ago. >> Glory days, huh? Back when we didn't have shoes on. You know, technology. But what a change. >> Huge change. >> The variety of backgrounds you have, The LinkedIn, the Charles Schwab, I think was during the growth years. >> And the downturn, so we got both sides. >> Both sides of that coin, but again, the technologies were evolving. >> Yes. >> To serve that kind of high frequency customer base. >> Beth: That's right. >> With databases changing, internet getting faster. >> It has. >> Jeff: More people getting online. >> We were early adopters, I'll tell you. I still will tell people, Charles Schwab is one of the best experiences I have, even though at the end I was part of the layoff process. I was there almost seven years, and I watched, we had crazy times in the internet boom. Going in 98, 99, 2000, I can't even tell you some of the experiences we had. And we weren't a digital native. But we were one of the first companies to put trading online, and to build APIs so our customers could self service, and they could do that all online. We did mobile trading. I remember we had to test our software on like twenty different phone sets. Today, it's actually, so much easier. >> It's only three. Or two. Or one. Depending on how you look at it. >> That's right. We couldn't even test on all the phone sets that were out then. But that was such a great experience, and I still, that Schwab network, is still people I'm in touch with today. And we all sort of sprinkled out to different places. I think, I dunno, there's just something special about that company in terms of what we learned, and what we were able to accomplish. >> You have a fantastic background. Again the waves of innovation you have lived through, been apart of, tackling hard problems, taking it head on. Great ethos, great management discipline. Now more than ever, it seems to be needed, because we're living in an age of massive change. Cause you have the databases are changing, the networks changing, the coding paradigms changing. Dev ops, you've got the role of data. Obviously, mobile clearly is proliferated. And now the business models are evolving. Now you got business model action, technical changes, cultural people changes. All of those theaters are exploding with opportunity, but also challenges. What's your take on that as you look at that world? >> You know, I'm a change junkie, I think. I love when things are changing, when organizations are changing, when companies are coming apart and coming together. So for me, I feel like, I've been again, so fortunate I'm in the perfect place. But, one of the things that I really prided myself on early in my career, is being what I call the bridge, or the, the translator between the different lines of business folks that I work with. Whether it was head of marketing, or somebody in a sales or customer relationship, or service organization, and the technology teams I built and led. And I think I've had a natural curiosity about what makes a business tick, and not so much over indexing on the technology itself. So technology is going to come and go, there's going to be different flavors. But actually, how to really take advantage of that technology, to better engage your customers, which as you said, their needs and their demands are changing, their expectations are so high. They really set the pace now. Who would have though that ten years ago we'd live in an environment where industries and businesses are changing because consumers have sort of set the bar on the way we all want to interact, engage, communicate, buy, pay. So there's this huge impact on organizations, and you know, I have a lot of empathy for large established enterprises that are challenged to make it through this transformation, this change, that somehow, they have to make. And I always try to pay attention on which companies have done it. And I call out Microsoft as an example. I can still remember several years ago, being at a conference. I think it was Jeffrey Moore who was speaking, and he had on one slide... Here's all the companies in technology that have had really large success. Leading up to the internet boom days, there would be a recipe for the four companies that would come together. I think it was Sun, Oracle, and Microsoft. And then he said, and now here's the companies of today. And most young people coming out of college, or getting computer science degrees won't use any of these old technology companies. But Microsoft proved us all wrong, but they did it, focused on people, culture, being willing to say where they screwed up, and where they're not going to focus anymore, and part ways with those parts of their business. And really focus on who are their customers, what are their customer needs. I think there's something to be learned from those changes they made. And I think back to the Tech Whisperer, there's no excuse for an executive today, not to at least understand the fundamentals of technology. So many decisions have to be made around investment, capital, hiring, investment in your people. That without that understanding, you're sort of operating blind. >> And this is the thing that I think I love, and was impressed by that Tech Whisperer article. You know, a play on the Horse Whisperer, the movie. You're kind of whispering in the ears of leaders who won't admit that they're scared. But they're all scared! They're all scared. And so they need to get, maybe it's cognitive dissonance around decision making, or they might not trust their lead. Or they don't know what they're talking about So this certainly is there, I would agree with that. But there's dynamics at play, and I want to get your thoughts on this. I think this plays into the Tech Whisperer. The trend we're seeing is the old days was the engineers are out coding away, hey they're out there coding away, look at them coding away. Now with Cloud they're in the front lines. They're getting closer to the customer, the apps are in charge. They're dictating to the infrastructure what can be done. With data almost every solution can be customized. There's no more general purpose. These are the things we talk about, but this changes the personnel equation. Now you got engineering and product people talking to sales and marketing people, business people. >> And customers. >> They tend not to, they traditionally weren't going well. Now they have to work well, engineers want to work with the customers. This is kind of a new business practice, and now I'm a scared executive. Beth, what do I do? What's your thoughts on that dynamic? >> You know, I'm not sure I would have had insight in that if I hadn't had the oppurtunity to work at this little start up, which we were a digital native. And it was the first time I worked in an environment where we did true extreme programming, pair programming, we had really strong product leads, and engineers. So we didn't have project managers, business analysts, a lot of things that I think enterprise I.T tends to have. Because the folks, historically, at an enterprise, the folks that are specifying the need, the business need, are folks in the lines of business. And they're not product managers, and even product managers, I say in banking for example, they aren't software product managers. And so that change, if you really do want to embrace these new methods and dev ops, and a lot of the automation that's available to engineering and software development organizations today, you really do have to make that change. Otherwise it's just going to be a clumsy version of what you use to do, with a new name on it. The other thing though that I would say, is I don't want to discount for large enterprises is partnerships with start up companies or other tech partners. You don't need to build everything. There's so much great technology out there. You brought up the Cloud. Look at how rich these Cloud stacks are getting. You know, it's not just now, can you provision me some compute, and some storage, and help me connect to the internet. There's some pretty sophisticated capabilities in there around A.I and machine learning, and data management, and analysis. So, I think overtime, we'll see richer and richer Cloud stacks, that enables you know, every company to benefit from the technology and innovation that's going on right now. >> Andy Jassy, the CEO of Amazon Web Search, has always said whenever I've interviewed him, he always talks publicly now about it is, two pizza teams, and automate the undifferentiated heavy lifting. In tech we all know what that is, the boring, mundane, patching, provisioning, ugh. And deploying more creative research. Okay so, I believe that. I'm a big believer of that philosophy. But it opens up the role, the question of the roles of the people. That lonely DBA, that you once were, I did some DBA work myself. System admins, storage administrator, these were roles, network administrator, the sacred God of the network, they ran everything. They're evolving to be much more coding oriented, software driven changes. >> It's a huge change. And you know, one thing that I think is sad, is I run into folks often that are, I'll just say, technology professionals, just say, you know, we're at large. Who are out of work. You know, who sort of hang their head, they're not valued, or maybe there's some ageism involved, or they get marked as, oh that's old school, they're not going to change. So, I really do believe we're at a point, where there's not enough resources out there. And so how we invest in talent that's available today, and help people through this change, not everybody is going to make it. It starts with you, knowing yourself, and how open-minded you are. Are you willing to learn, are you willing to put some effort forth, and sort of figuring out some of these new operating models. Because that's just essential if you want to be part of the future. And I'll tell you, it's hard, and it's exhausting. So I don't say this lightly, I just think. You know about my career, how many changes and twists and turns their have been. Sometimes you're just like, okay I'm ready, I'm ready to just go hiking. (Beth laughs) >> It can be, there's a lot of institutional baggage, associated with the role you had, I've heard that before. Old guard, old school, we don't do that, you're way too old for that, we need more women so lets get women in. So there's like a big dynamic around that. And I want to get your thoughts on it because you mentioned ageism, and also women in tech has also grown. There's a need for that. So there's more opportunities now than ever. I mean you go to the cyber security job boards, there are more jobs for cyber security experts than any. >> Oh, I'll tell you, yesterday, we held an event at our office, in partnership with some different start ups. Because that's one of the things you do when you're in a corporate venture group, and it was all on the future of authentication. So it was really targeted at an audience of information security professionals and chief information security officers. And it was twenty men and one woman. And I thought, wow, you know I'm use to that from having been a CIO that a lot of the infrastructure roles in particular, like as you were saying, the rack and stack, the storage management, the network folks, just tend to be more male dominant, than I think the product managers, designers, even software engineers to some extent. But here you know, how many times can you go online and see how many openings there are for that type of role. So I personally, am not pursuing that type of role, so I don't know what all the steps would need to be, to get educated, to get certified, but boy is there a need. And that needs not going to go away. As more, if everything is digitized and everything is online. Then security is going to be a constant concern and sort of dynamic space. >> Well, we interview a lot of women in tech, great to have you on, you're a great leader. We also interview a lot of people that are older. I totally believe that there's an ageism issue out there. I've seen it first hand, maybe because I'm over fifty. And also women in tech, there's more coming but not enough. The numbers speak for themselves. There's also an opportunity, if you look at the leveling up. I talked to a person who was a network engineer, kind of the same thing as him, hanging his head down. And I said, do you realize that networking paradigm is very similar to how cyber works. So a lot of the old is coming back. So if you look at what was in the computer science programs in the eighties. It was a systems thinking. The systems thinking is coming back. So I see that as a great opportunity. But also the aperture of the field of computer science is changing. So it's not, there are some areas that frankly, women are better than men at in my opinion. In my opinion, might get some crap for that. But the point, I do believe that. And there are different roles. So I think it's not just, there's so much more here. >> Oh, that's what I try to tell people. It's not just coding, right. There's so many different types of roles. And unfortunately I think we don't market ourselves well. So I encourage everyone out there that knows somebody. (Beth laughs) Who's looking-- >> If someone was provisioned Sun micro-systems, or mini computers, or workstations, probably has a systems background that could be a Cloud administrator or a Cloud architect. Same concepts. So I want to get your thoughts on women in tech since you're here. What's your thoughts on the industry, how's it going, things you advise, other folks, men and women, that they could do differently. Any good signs? What's your thoughts in general? >> Yeah so, first of all, I'm just a big advocate for women in general. Young girls, and, young women, just getting into the work force, and always have been. Have to say again, very fortunate early in my career working for companies like a phone company, and Schwab, we had so many amazing female leaders. And I don't even think we had a program, it was just sort of part of the DNA of the company. And it's really only in the last couple of years I really seen we have a big problem. Whether it's reading about some of the cultures of some of the big tech companies, or even spending more time in the valley. I think there's no one answer, it's multifaceted. It's education, it's families, it's you know, each one of us could make a difference in how we hire, sort of checking in what our unintended biases are, I know at Citi right now, there's a huge program around diversity and inclusion. Gender, and otherwise. And one of the ways I think it's going to be impactful. They've set targets that I know are controversial, but it holds people accountable, to make decisions and invest in developing people, and making sure there's a pipeline of talent that can step up into even bigger roles with a more diverse leadership team. It will take time though, it will take time. >> But mind shares are critical. >> It absolutely is. Self-awareness, community awareness, very much so. >> What can men do differently, it's always about women in tech, but what can we, what can men do? >> I think it's a great question. I would say, women can do this too. I hate when I see a group together, and it's all women working on the women issue. Shame on us, for not inviting men into the organization. And then I think it's similar to the Tech Whisperer. Don't be nervous, don't be worried, just step in. Because, you know, men are fathers, men are leaders, men are colleagues. They're brothers, they're uncles. We have to work on this together. >> I had a great guest, and friend, I was interviewing. And she was amazing, and she said, John, it's not diversity and inclusion, it's inclusion and diversity. It's I-N-D not D-I. First of all, I've never heard of it, what's D-N-I? My point exactly. Inclusion is not just the diversity piece, inclusion first is inclusive in general, diversity is different. So people tend to blend them. >> Yes they do. >> Or even forget the inclusion part. >> Final question, since you're a change junkie, which I love that phrase, I'm kind of one myself. Change junkies are always chasing that next wave, and you love waves. Pat Gelsinger at VMWare, wave junkie, always love talking with him. And he's a great wave spotter, he sees them early. There's a big set of waves coming in now, pretty clear. Cloud has done it's thing. It's only going to change and get bigger, hybrid, private, multi Cloud. Data, AI, twenty year cycle coming. What waves are you most excited about? What's out there? What waves are obvious, what waves aren't, that you see? >> Yeah, oh, that's a tough one. Cause we try to track what those waves are. I think one of the things that I'm seeing is that as we all get, and I don't just mean people, I mean things. Everything is connected, and everything has some kind of smarts, some kind of small CPU senser. There's no way that our existing, sort of network, infrastructure and the way we connect and talk can support all of that. So I think we're going to see some kind of discontinuous change, where new models are going to, are going to absolutely be required cause we'll sort of hit the limit of how much traffic can go over the internet, and how many devices can we manage. How much automation can the people and an enterprise sort of oversee and monitor, and secure and protect. That's the thing that I feel like it's a tsunami about to hit us. And it's going to be one of these perfect storms. And luckily, I think there is innovation going on around 5G and edge computing, and different ways to think about securing the enterprise. That will help. But it couldn't come soon enough. >> And model also meaning not just technical business. >> Absolutely. Machine the machine. Like who's identity is on there that's taken an action on your behalf, or the companies behalf. You know, we see that already with RPA, these software robots. Who's making sure that they're doing what they're suppose to do. And they're so easy to create, now you have thousands of them. In my mind, it's just more software to manage. >> And a great contrary to Carl Eschenbach, former VMware CEO now at Sequoia, he's on the board of UIPath, they're on the front page of Forbes today, talking about bots. >> Yes, yes, yes, I've heard them speak. >> This is an issue, like is there a verification. Is there a fake bots coming. If there's fake news, fake bots are probably going to come too. >> Absolutely they will. >> This is a reality. >> And we're putting them in the hands of non-engineers to build these bots. Which there's good and bad, right. >> Regulation and policy are two different things, and they could work together. This is going to be a seminal issue for our industry. Is understanding the societal impact, tech for good. Shaping the technologies. This is what a Tech Whisperer has to do. You have a tough job ahead of you. >> But I love it. >> Jeff: Beth thank you for coming on. >> Thank you for having me. >> I'm Jeff Furrier for the People First Network here at Sand Hill Road at Mayfield as part of theCUBE and SiliconANGLE's co-creation with Mayfield Fund, thans for watching.

(upbeat music) >> Welcome back, everybody, Jeff Frick here with theCube. We are at Oracle Park, formerly AT&T Park, recently named Oracle Park. Right on the shores of McCovey Cove, in downtown San Francisco. We haven't been here since Sport's Data, I think 2014. I can't believe it's been five years. So maybe now the Giants' situation will turn as we make a run for the pennant. We're here at a really interesting event, it's called Sports Tech Tokyo World Demo Day. And we're here with kind of the master of ceremonies, if you will, he's Mike Proman, the Managing Director of Scrum Ventures. Mike, great to see you. >> Great to be here. Thanks again for the time. >> Absolutely. So what is this day all about? Give us the low down. >> Yeah so, start up frenzy, right? Sports tech community's just in it's infancy right now. There's a lot of fragmentation though, in this world. And how do we best connect start ups to best-in-class companies, right? Japanese companies, there's a lot of excitement in Japan right now. We have Rugby World Cup coming up next month, we have the Olympics next year. How do we enable the start up community to realize those opportunities from a partnership perspective? So, we set out on this journey about a year ago. Bringing together companies of all different stages, all different geographic regions, and all different areas of focus within sports tech. And our job was to connect them to opportunities in Japan. What we kind of uncovered along the journey right, is that this is a community. And that we're building a platform here that transcends Asia, right. We want to help this community, and whether it's connecting them with the venture audience, or otherwise, we feel this is a great reflection of innovation coming in to this industry. >> Now you took kind of an interesting tact. You've called them, before we turned the cameras on, kind of a cohort, kind of an incubator, not really an incubator. So how is this thing structured, how do people get involved? What are some of the benefits of being part of this group versus out there slogging it on your own? >> Well, absolutely, and I think everyone's first reaction is, oh, this is just another accelerator, right? And we've really made a point of not identifying ourselves as an accelerator, for a variety of reasons. Number one, it's a stage-agnostic cohorts, right. So a lot of the companies that are representative here today, the 159 in our cohort, they've raised 10, 20, 30, $40 million. In many respects, they're all grows up, right. They don't need a quote unquote, a traditional accelerator. But our reality is, everybody needs acceleration. And particularly in Asia, Japan in particular, right? You need allies, you need advocates, you need facilitators. And people who are going to help revenue optimization, as well as just breaking the door in some cases. There's a lot of high profile content coming to that region, and if we can help people, it all comes back to us, long term. >> Right, right. And then the other piece, obviously, is the investment piece. 'Cause you work with a number of Japanese investment firms, so that's really kind of part of the, you know, we're sitting in San Franscisco, the event's called Tokyo, the Olympics are a year way, and you're from the Mid-West. So, you're kind of bringing it all together here in San Franscisco. >> You know, sport is the great unifier, right. So this is a great opportunity for us to speak to other industries, and bring the venture community into this conversation. Because, as you know, it's about top-line growth for a lot of these startups, but in many cases, they need capital to be able to accelerate into that growth. And so, you know, it's a very exciting time, and we're here to help support everybody. Our DNA, we're investors, right. We're a venture capital firm. But at the end of the day, what ends up happening is, these companies needs advocacy and connections, and that's what we're here to provide. >> Right, so, you said 100 plus companies in cohort. So, there's a lot of things going on in sports tech, but what are some of the really oddball ones that you're seeing a little further out than maybe most people aren't thinking about. >> Yeah, you know, the trends to me that I'm really excited about personally, are those opportunities that transcend the industry, right. Where is there opportunity for us to democratize things, from just a lead athletes, right, into things that you and I both need. So look at athlete performance. Look at recovery health, as an industry focus, right. Hydration, you look at mental health, sleep health, dietary health, you know. Players of the Giants, they need that, right? But you and I need that too. So where are those technologies that are innovators or thought leaders and leading the way in those spaces? The nice thing about Sports Tech Tokyo is we focus in athlete performance, stadium experience, and fan engagement, right. And there are 13 sub-categories, so it's a very broad based cohort, a lot of different areas of expertise. But bringing them all together is what's most rewarding. >> What's your favorite piece of it? I mean, it's hard to pick your favorite kid, but a couple of interesting companies in the portfolio that you'd like to highlight. >> Everyone's always saying, oh, you put me on the spot. No, absolutely not, Jeff. But in reality, my background is, I've been an entrepreneur for 10 plus years before this. And I've worked with brands like Coca Cola, and the NBA. What excites me most-- >> So we framed you up with a Coke bottle, by the way. >> Thank you very much. That was a nice product placement there. The nice thing is, I'm seeing technology today that didn't fundamentally exist a year or two ago. So I could tell you my favorite right now, in 2 weeks that might be entirely different, right. You're going to meet somebody from Misapplied Sciences, and they are doing some of the most breakthrough, cutting edge tech that, it's mind boggling, in terms of what they can do. And what's great about a company like Misapplied, is that they're doing it in sports, but they're also doing it in retail, and other high-dense environments. And so to me, those are the winners in this cohort. The ones that can transcend sport, and add value to so many other places. >> Right, so, before I let you go, you got a busy day ahead. What's the run of the day, what should people expect who are coming through the gates here at Oracle today? >> Well I said this is not your traditional accelerator. Well, this is not your traditional demo day, by any means, right. Traditionally, demo day is a bunch of company pitches, and then there's maybe some conversation afterwards. To us, this is a celebration of a broader cohort, right. Our 100 plus mentors that make up the Sports Tech Tokyo community. And we wanted to celebrate those individuals, right. The 100 mentors, the 400 plus attendees we have here today. So, think of it as an extended cocktail party, right. We want people to connect, and connect at scale. And so that's the back half of the day. The front half of the day is more content oriented. We have a lot of industry experts, again, common theme is transcending the vertical. Looking at opportunities to bring the venture community into the conversation. >> All right, well Mike, good luck and have a great and very busy day. >> Yeah, thank you so much. Appreciate it Jeff. >> He's Mike, I'm Jeff, you're watching theCube. We're at Oracle Park in San Francisco on the shores of McCovey Cove, thanks for watching. We'll see you next time. (upbeat digital music)

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

Silicon Valley, it's theCUBE covering People First Network. Brought to you by Mayfield. >> Hello, I'm John Furrier here in Palo Alto for an exclusive conversation, CUBE conversation, part of the People First Network with theCUBE and Mayfield fund. I'm here with John Chambers at his house in Palo Alto. John Chambers is the former CEO/Chairman of Cisco Systems, now running J2C, JC2 Ventures. Great to see you, thanks for spending time! >> It's a pleasure to be together again. >> I'm here for two reasons. One, I wanted a conversation about People First and technology waves, but also, I want to talk about your new book, which is exciting, called Connecting the Dots. And it's not your standard business book, where, you know, hey, rah-rah, you know, like a media post these days on the internet; it's some personal stories weaved in with the lessons you've learned through the interactions you've had with many people over the years, so exciting book and I'm looking forward to talking about that. >> Thank you! >> Again, John Chambers, legend, Cisco, 1991 when you joined the company from Wang before that. 400 employees, one product, 70 million in revenue. And when you retired in 2015, not so much retired, 'cos you've got some--. >> I'm working on my next chapter! >> You've got your next chapter (laughs)! 180 acquisitions, 447 billion in revenue, you made 10,000 people millionaires, you created a lot of value, probably one of the biggest inflection points in computer history, the evolution of inter-networking and tying systems together, it was probably one of the biggest waves somewhat before the wave we're on now. So an amazing journey, now you're running JC2 Ventures and investing in game-changing start-ups. So you're not retired? >> No. It was only my next chapter. I made my decision almost 10 years before I left Cisco first, to make for a very smooth transition because it's my family, and out of the 75,000 people, I hired all but 23 of them! And in terms of what I wanted to do next, I really wanted to both give back, create more jobs, get our start-up engine going again in this country, and it's currently broken, and I want to do that on a global basis, in places like France and India as well. So I'm on to my next chapter, but the fun part in this chapter is that I do the things that I love. >> And you've got a great team behind you, but also, you have a great personal network. And I want to get into that, of your personal stories as well as your social network in business and in the community; but one of the things I want to get up front, because I think this is important for this conversation is, you've been very strong. I've seen you present many times over the years, going way back into the 90's. You're eloquent, you're people-oriented, but you have a knack for finding the waves, seeing transitions, you've been through many waves. >> Yes I have, good and bad. >> Good and bad. But one of the big ones, how do you spot those transitions? And what wave are we in now? I mean, talk about the wave that's happening now, it's unprecedented on many levels, but, different, but it's still a wave. >> It is, and outgoing market transitions and often combined with either economic changes or business model changes with technology. And part of the reason that I've been fortunate to be able to identify many of them is I listen to customers very carefully, but also, you're often a product of your prior experiences. Having experienced West Virginia, one of the top states in the US in terms of the chemical industry, uh, during the 40's and 50's and 60's when I was growing up there, and literally more millionaires in West Virginia than there were in the entire Great Britain. We were on top of the world in the chemical industry, and the coal industry, and yet, because we missed transitions, and we should've seen them coming, the state fell a long way, so now we're trying to correct that with some of the start-up activity we'll talk about later. As you see this, and then I went to Boston, 128, we were talking earlier, Wang Laboratories, the mini-computer era, but I was in IBM first out of the central part of the nation, so I watched IBM and Mainframes, and then I watched them miss on going to the mini-computer, and then miss in terms of the internet. So I was able to see the transitions that occurred in Boston, Route 128, where we were the Silicon Valley of the world, and we knew it, and this unusual area out in California called Silicon Valley, we paid almost no attention to, and we didn't realize we failed to make a transition from the mini-computer era to the pc and the internet era. Then I joined Cisco, and saw the internet era. So part of it is, you're a product of your experiences, and know the tremendous pain that occurs, because Boston 128 is nowhere near what it used to be, so there's no entitlement in this new world out of the thousand high-tech companies that I was associated with, including four or five giants in mini-computers, none of them are really in existence today, so it shows you, if you don't identify the transitions, number one, you're going to have an opportunity to benefit by them, but number two, you sure have an opportunity to get hurt by them. >> And you know, these waves also create a lot of wealth and value; not just personal wealth, but community wealth, and Cisco in particular had a good thing going for them, you know, TCP-IP was a defact-- not even a standard, it was a defacto standard at that time, IBM and these kinds of digital equipment corporations dominated the network protocol. Even today, people are still trying to take out Cisco competitively, and they can't because they connected the world. Now the world's connected with digital, it's connected with mobile, so we're kind of seeing this connected wave globally. How do you think about that, now that you've seen the movie at the plumbing levels at Cisco, you now have been traveling the world, we're all connected. >> We are. And it's important to understand that I'm completely arms-length with Cisco, it's their company to run now, and I'm excited about their future. But I'm focused on the next chapter in my life, and while I think about the people at Cisco everyday, I'm into the start-up world now, so how do I think about it now? I think most of the innovation over the next decade will come from start-ups. The majority of the top engineering students, for example, at a Stanford or an MIT or a Polytechnique in France, which is the top engineering school, I think, in Europe, or at the ITs in India, they are all thinking about going to start-ups, which means this is where innovations going to come from. And if you think about a digital world going from the time you and I, we almost recruited you to Cisco, and then we finally did; there's only a thousand devices connected then when Cisco was founded. Today there are about 20 billion devices connected to the internet; in the future, it's going to be 500 billion in a decade, and so this concept of digitalization combined with artificial intelligence, all of a sudden we'll get the right information at the right time to the right person or machine to make the right decision, sounds complex, and it is. And it's ability to do that, I think start-ups are well-positioned to play a key role in, especially in innovation. So while the first stage of the internet, and before that were all dominated by the very large companies, I think you're going to see, in this next phase of digitalization, you're going to see a number of start-ups really emerge, in terms of the innovation leaders, and that's what I'm trying to do with my 16 investments I've made, but also coaching probably another 50 uh, start-ups around the world on a regular basis. >> And the impact of outside Silicon Valley, globally, how do you see that ecosystem developing with the entrepreneurship models that are now globally connected in with these connection points like Silicon Valley? >> It will partially in parallel, partially, it's a new phenomenon. I sold the movie of Boston 128, as I said earlier, and on top of the world, and there is no entitlement. The same thing's true with Cisco, um, sorry, of Silicon Valley today; there's no entitlement for the future, and just because we've led up until this point in time, doesn't mean we will in 10 years, so you can't take anything for granted. What you are seeing, since almost all job creation will be from start-ups, and small companies getting bigger, the large companies in total will probably not add any head count over this next decade because of artificial intelligence and digitization, and so you're now going to see job growth coming from those smaller companies, if these small companies don't get a forum to all 50 states, if they don't get a chance to grow their head count there, and the economic benefits of that, then we're going to leave whole states behind. So I think it's very important that we look at the next wave of innovation, I think there's a very good probability that it will be more inclusive, both by geography, by gender, and all diversity measures, and I'm optimistic about the future, but there are no guarantees, and we'll see how it plays out. >> Let's talk about your next chapter. I was going to wait, but I want to jump while we're on the topic. JC2 is a global start-up, game-changing start-up focus that you have. What is the thesis? What are you looking for, and talk about your mission? >> Well, our mission is very simple. I had a chance to change the world one time with Cisco, and many people, when I said Cisco's going to change the way the world works, lives, learns, and plays by enabling the internet, everybody said nice marketing, but you're a router company. And yet, I think most people would agree, probably more than any other company, we had the leadership role in changing the internet and the direction going on, and now, a chance to do it again, because I think the next wave of innovation will come from the start-ups, and it doesn't come easy. They need coaches, they need strategic partners, they need mentors as much as they need the venture capitalists, so I would think of as this focusing on disruptive start-ups that get very excited in these new areas of technology, ranging from physical and virtual worlds coming together, to artificial intelligence and automation everywhere, to the major capabilities on cyber security across that to the internet of things, so we're trying to say, how do we help these companies grow in skill? But if I was just after financial returns, I'd stay right here in the Valley. I can channel anybody, VC's here that I trust and they trust me, and it would be a better financial return. But I'm after, how do you do this across a number of states, already in seven states, and how do you do it in France and India as role models? >> It's got a lot of purpose. It's not just a financial purpose. I mean, entrepreneurs want to make money, too, but you've made some good money over the years, but this is a mission for you, this is a purpose. >> It is, but you referred to it in your opening comments. When we were at Cisco, I've always believed that the most successful owe an obligation to give back, and we did. We won almost every corporate social responsibility award there was. We won it from the Democrats and the Republicans, from Condie Rice and George Bush and from Hillary Clinton and President Obama. We also, as you said, made 10,000 Cisco employees millionaires just in the first decade. And we tried to give back to society with training programs like Network Academies and trained seven million students. And I think it's very important for the next generation of leaders here in the Valley to be good at giving back. And it's something that I think they owe an obligation to do, and I think we're in danger now of not doing it as well as we should, and for my start-ups, I try to pick young CEOs that understand, they want to make a financial return, and they want to get a great product out of this, but they also want to be fair and giving back to society and make it a win-win, if you will. >> And I think that's key. Mission-driven companies are attracting the best talent, too, these days, because people are more cognizant of that. I want to get into some of your personal stories. You mentioned giving back. And reading your book, your parents have had a big role in your life--. >> Yes, they have. >> And being in West Virginia has had a big role in your life. You mentioned it having a prosperity environment, and then missing that transition. Talk about the story of West Virginia and the role your parents played, because, they were doctors, so they were in the medical field. The combination of those two things, the culture where you were brought up, and your family impacted your career. >> I'm very proud of being from West Virginia, and very proud of the people in West Virginia, and you see it as you travel around the world. All of us who, whether we're in West Virginia, or came out of it, care about the state a great deal. The people are just plain good people, and I think they care about treating people with respect. If I were ever run off a road at night in the middle of the night, I'd want to be in West Virginia, (both laugh) when I go up to knock on that door. And I think it carries through. And also, the image of our state is one that people tend to identify in terms of a area that you like the people. Now what I'm trying to do in West Virginia, and what we just announced since last week, was to take the same model we did on doing acquisitions, 180 of them, and say here's the playbook, the innovation playbook for doing acquisitions better than anyone else, and take the model that we did on country digitization, which we did in Israel and France and India with the very top leaders, with Netanyahu and Shimon Peres in Israel, with Macron in France and with Modi in India, and drove it through, and then do the same thing in terms of how we take the tremendous prosperity and growth that you see in Silicon Valley, and make it more uniform across the country, especially as traditional business won't be adding head count. And while I'd like to tell you the chemical industry will come back to West Virginia and mining industry will come back in terms of job creation, they probably won't, a lot of that will be automated in the future. And so it is the ability to get a generation of start-ups, and do it in a unique way! And the hub of this has to be the university. They have to set the pace. Gordon Gee, the President there, gets this. He's created a start-up mentality across the university. The Dean of the business school, Javier Reyes is going across all of the university, in terms of how you do start-ups together with business school, with engineering, with computer science, with med school, et cetera. And then how do you attract students who will want to really be a part of this, how do you bring in venture capital, how do you get the Governor and the President and the Senate and the Speaker of the House on board? How do you get our two national senators, Shelly Moore Capito and also Joe Manchin, a Democrat and a Republican working together on common goals? And then how do you say here's what's possible, write the press release, be the model for how a country, or a state, comes from behind and that at one time, then a slow faller, how do we leap frog? And before you say it can't be done, that was exactly what people said first about India, when I said India would be the strongest growing economy in the world, and it is today, probably going to grow another seven to 10%. That means you double the per capita of everyone in India, done right, every seven to 10 years. And France being the innovation engine in Europe to place your new business, you and I would have said John, no way, just five years ago, yet it has become the start-up engine for Europe. >> It's interesting, you mentioned playbook, and I always see people try to replicate Silicon Valley. I moved out here from the East Coast in 1999, and it's almost magical here, it's hard to replicate, but you can reproduce some things. One of the common threads, though, is education. The role of education in the ecosystem of these new environments seems to be a key ingredient. Your thoughts about how education's going to play a role in these ecosystems, because education and grit, and entrepreneurial zeal, are kind of the magic formula. >> Well they are in many ways. It's about leadership, it's about the education foundation, it's about getting the best and brightest into your companies, and then having the ability to dream, and role models you can learn from. We were talking about Hewlett-Packard earlier, a great role model of a company that did the original start-up and Lou Platt, who was the President of HP when I came out here, I called him up and said, you don't know me, Lou, I'm with a company you've probably never heard of, and we have 400 people, but I don't know the Valley, can you teach me? And he did, and he met with me every quarter for three years, and then when I said what can I do to repay you back, because at that time, Cisco was on a roll, he said John, do it for the next generation. And so, that's what I'm trying to do, in terms of, you've got to have role models that you can learn from and can help you through this. The education's a huge part. At the core of almost all great start-up engines is a really world-class university. Not just with really smart students, but also with an entrepreneur skill and the ability to really create start-ups. John Hennessey, Stanford did an amazing thing over the last 17 years on how to create that here at Stanford, the best in the world, probably 40% of the companies, when I was with Cisco, we bought were direct or indirect outgrowth of Stanford. Draw a parallel. Mercury just across the way, and this isn't a Stanford/CAL issue, (both laugh) equally great students, very good focus on interdisciplinary activities, but I didn't buy a single company out of there. You did not see the start-ups grow with anywhere near the speed, and that was four times the number of students. This goes back to the educational institution, it has to have a focus on start-ups, it has to say how they drive it through, this is what MIT did in Boston, and then lost it when 128 lost it's opportunity, and this is what we're trying to do at West Virginia. Make a start-up engine where you've got a President, Gordon Gee, who really wants to drive this through, bring the political leaders in the state, and bring the Mountaineers, the global Mountaineers to bare, and then bring financial resources, and then do it differently. So to your point, people try to mimic Silicon Valley, but they do it in silos. What made Silicon Valley go was an ecosystem, an education system, a environment for risk-taking, role models that you could steal people from--. >> And unwritten rules, too. They had these unwritten rules like pay it forward, your experience with Lou Platt, Steve Jobs talks about his relationship with David Packard, and this goes on and on and on. This is an important part. Because I want to just--. >> Debt for good is a big, big issue. Last comment on education, it's important for this country to know, our K through 12 system is broken. We're non-competitive. People talk about STEM, and that's important, but if I were only educating people in three things, entrepreneurship, how to use technology, and artificial intelligence; I would build that into the curriculum where we lose a lot of our diversity, especially among females in the third, fourth, fifth grade, so you haveta really, I think, get people excited about this at a much earlier age. If we can become an innovation engine again, in this country, we are not today. We're not number one in innovation, we're number 11! Imagine that for America? >> I totally agree with ya! And I don't want to rant and waste a lot of time, but my rants are all on Facebook and Twitter. (both laugh) Education's a problem. It's like linear, it's like a slow linear train wreck, in my opinion, but now you have that skills gaps, you mentioned AI. So AI and community are two hot trends right now. I'm going to stay with community for a minute. You mentioned paying it forward. Open source software, these new forms of operational scale, cloud computing, open source software, that all have this ethos of pay it forward; community. And now, community is more important than ever. Not just from the tech world, but you're talking about in West Virginia, now on a global scale. How does the tech industry, how can the tech industry, in your opinion, nurture community at local, regional, global scale? >> This is a tough one John, and I'd probably answer it more carefully if I was still involved directly with Cisco. But the fun thing is, now I represent myself. >> In your own opinion, not Cisco. There's a cultural thing. This is, Silicon Valley has magic here, and community is part of it. >> Yes, well it's more basic than that. I think, basically, we were known for two decades, not just Cisco, but all of the Valley as tech for good, and we gave back to the communities, and we paid it forward all the time, and I use the example of Cisco winning the awards, but so do many of our peers. We're going to Palestine and helping to rebuild Palestine in terms of creating jobs, et cetera. We went in with the Intels of the world, and the Oracles and the other players and HP together, even though at times we might compete. I think today, it's not a given. I think there is a tug of war going on here, in terms of what is the underlying purpose of the Valley. Is it primarily to have major economic benefits, and a little bit of arm's length from the average citizen from government, or is it do well financially, but also do very well in giving back and making it inclusive. That tug of war is not a given. When you travel throughout the US, today, or around the world, there are almost as many people that view tech for bad as they do tech for good, so I think it's going to be interesting to watch how this plays out. And I do think there are almost competing forces here in the Valley about which way should that go and why. The good news is, I think we'll eventually get it right. The bad news is, it's 50/50 right now. >> Let's talk about the skill gap. A lot of leaders in companies right now are looking at a work force that needs to be leveled up, and as new jobs are coming online that haven't been trained for, these openings they don't have skills for because they haven't been taught. AI is one example, IOT you mentioned a few of those. How do great leaders, proactively and reactively, too, get the skills gaps closed? What strategies can you do, what's the playbook there? >> Well two separate issues. How do they get it closed, in terms of their employees, and second issue, how do we train dramatically better than we've done before? Let's go to the first one. In terms of the companies, I think that your ability to track the millennials, the young people, is based upon your vision of doing more than quote just making a profit, and you want to be an exciting place to work with a great culture, and part of that culture should be giving back. Having said that, however, the majority of the young people today, and I'm talking about the tops out of the key engineering schools, et cetera, they want to go to start-ups. So what you're going to see is, how well established companies work with start-ups, in a unique partnership, is going to be one of the textbook opportunities for the future, because most companies, just like they didn't know how to acquire tech companies and most of all tech acquisitions failed, even through today. We wrote the textbook on how to do it differently. I think how these companies work with start-ups and how they create a strategic relationship with a company they know has at least a 50/50 probability of going out of business. And how do you create that working relationship so that you can tap into these young innovative ideas and partnerships, and so, what you see with the Spark Cognition, 200 people out of Texas, brilliant, brilliant CEO there in terms of what he is focused on, partnering with Boeing in that 50/50 joint venture, 50/50 joint venture to do the next FAA architecture for unmanned aircraft in this country. So you're going to see these companies relate to these start-ups in ways they haven't done before. >> Partnership and collaboration and acquisitions are still rampant on the horizon, certainly as a success for you. Recently in the tech industry we're seeing big acquisitions, Dell, EMC, IBM bought Red Hat, and there's some software ones out there. One was just going public and got bought, just recently, by SAP, how do you do the acqui-- you've done 180 of them? How do you do them successfully without losing the innovation and losing the people before they invest and leave; and this is a key dynamic, how do companies maintain innovation in an era of collaboration, partnerships, and enmity? >> I had that discussion this morning at Techonomy with David Kirkpatrick, and David said how do you do this. And then as I walked out of the room, I had a chance to talk with other people and one of them from one of the very largest technology companies said, John, we've watched you do this again and again; we assumed that when we acquired a company, we'd get them to adjust to our culture and it almost never worked, and we lost the people at a tremendously fast pace, especially after their lock-in of 18 to 24 months came up. We did the reverse. What we did was develop a replicatible innovation playbook, and I talk about it in that book, but we did this for almost everything we did at Cisco, and I would've originally called that, bureaucracy, John. (both laugh) I would've said that's what slow companies do. And actually, if done right, allows you to move with tremendous speed and agility, and so we'd outline what we'd look for in terms of strategy and vision; if our cultures weren't the same, we didn't acquire them. And if we couldn't keep the people, to generate the next generation of product, that was a bad financial decision for us, as well. So our attrition rate averaged probably about 5% or over while I was at Cisco for 20 years. Our voluntary attrition rate of our acquired companies, which normally runs 20% in these companies, we had about four. So we kept the people, we got the next generation product out, and we went in with that attitude in terms of you're acquiring to be able to keep the people and make them a part of your family and culture. And I realize that that might sound corny today, but I disagree. I think to attract people, to get them to stay at your company, it is like a family, it is like how you succeed and occasionally lose together, and how you build that family attitude under every employee, spouse, or their children that was life-threatening, and we were there for them in the ways that others were not. So you're there when your employees have a crisis, or your customer does, and that's how you form trust in relationships. >> And here's the question, what does People First mean to you? >> Well people first is our customer first. It means your action and everything you do puts your customers and your people first, that's what we did at Cisco. Any customer you would talk to, almost every customer I've ever met in my life would do business with us again, or with me again, because your currency in today's world is trust, track record, and relationships, and we built that very deep. Same thing with the employees. I still get many, many notes from people we helped 10 or 15 years ago; here's the picture of my child that you all helped make a difference in, Cisco and John, and you were there for us when we needed you most. And then in customers. It surprises you, when you help them through a crisis, they remember that more than when you helped them be successful, and they're there for you. >> Talk about failure and successes. You talk about this in the book. This is part of entrepreneurship, you can't succeed without failures. Handling failures is just as important as handling successes, your thoughts on people should think about that from a mindset standpoint? >> Well, you know, what's fun is those of you who are parents, or who will be parents in the future, when your child scores a goal in soccer or makes a good grade on a test, you're proud for them, but that isn't what worries you. What worries you is when they have their inevitable setbacks, everybody has that in life. How do you learn to deal with them? How do you understand how much were self-inflicted and how much of it was done by other causes, and how they navigate through that determines who they are. Point back to the West Virginia roots, I'm dyslexic, which means that I read backwards. Some people in early grade school thought I might not even graduate from high school much less go to college. My parents were doctors, they got it, but how I handled that was key. And while I write in the book about our successes, I spend as much time on when disaster strikes, how you handle that determines who you are in the future. Jack Welch told me in the 90's, he said John, you have a very good company, and I said Jack, you're good at teaching me something there, we're about to become the most valuable company in the world, we've won all of the leadership awards and everything else, what does it take to have a great company? He said a near-death experience. At the time I didn't understand it. At the end of 2001 after the dot com bubble, he called me up, he said, you now have a great company, I said Jack, it doesn't feel like it. Our stock price is down dramatically, people are questioning can I even run the company now, many of the people who were so positive turned very tough and--. >> How did you handle that? How did you personally handle that, 'cos--. >> It's a part of leadership. It's easy to be a leader when everything goes well, it's how you handle when things are tough, and leadership is lonely, you're by yourself. No matter how many friends you have around you, it's about leadership, and so you'd lead it through it. So 2001, took a real hard look, we made the mistake of focusing, me, on the numbers, and my numbers in the first week of December were growing at 70% year over year. We'd never had anything negative to speak of, much less below even 30% growth, and by the middle of January, we were -30%. And so you have to be realistic, how much was self-inflicted, how much the market, I felt the majority of it was market-inflicted, I said at the time it's a hundred year flood. I said to the employees, here's how we're going to go forward, we need to bring our head count back in line to a new reality, and we did it in 51 days. And then you paint the picture from the very beginning of what you look like as you recover and in the future and why your employees want to stay here, your customers stay with you and your shareholders. It wiped out most of our competitors. Jack Welch said, John, this is probably your best leadership year ever, and I said Jack, you're the only one that's going to say that. He said probably, and he has been. >> And you've got the scar tissue to prove it. And I love this story. >> But you're a product of your scars. And do you learn how to deal with them? >> Yeah, and how you-- and be proud of them, it's what, who you are. >> I don't know if proud's the right word. >> Well, badge of honor. (both laugh) >> Red badge of honor, they're painful! >> Just don't do it again twice, right? >> We still make the same mistake twice, but at the same time when I teach all these start-ups, I expect you to make mistakes. If you don't make mistakes, you're not taking enough risk. And while people might've, might say John, one of your criticisms is that you spread yourself a little bit too thin in the company at times, and you were too aggressive. After thinking about it, I respectfully disagree. If I had to do it over, I'd be even bolder, and more aggressive, and take more risks, and I would dream bigger dreams. With these start-ups, that's what I'm teaching them, that's what I'm doing myself. >> And you know, this is such a big point, because the risk is key. Managing risk is actually, you want to be as risky as possible, just don't cut an artery, you know, do the right things. But in your book, you mention this about how you identify transitions, but also you made the reference to your parents again. This is, I think, important to bring up, because we have an expression in our company: let's put the patient on the table and let's look at the problem. Solving the problems and not going out of business at that time, but your competitors did, you had to look at this holistically, and in the book, you mentioned that experience your parents taught you, being from West Virginia, that it changed how you do problem solving. Can you share what that, with that in conscience? >> Well, both parents were doctors, and the good news is, you got a lot of help, the bad news is, you didn't get a lot of self 'cos they'd fix you. But they always taught me to focus on the real, underlying issue, to your point. What is the real issue, not what the symptom is, the temperature, or something else. And then you want to determine how much of that was self-inflicted, and how much of it was market, and if your strategy's working before, continue, if your strategy was starting to get long in the tooth, how do you change it, and then you got to have the courage to reinvent yourself again and again. And so they taught me how to deal with that. I start off the book by talking about how I almost drowned at six years of age, and as I got pulled down through the rapids, I could still see my dad in my mind today running down the side of the river yelling hold on to the fishing pole. It was an ugly fishing pole. Might've cost $5. But he was concerned about the fishing pole, so therefore I obviously couldn't be drowning so I focused both hands on the fishing pole and as I poked my head above water, I could still see him running down. He got way down river, swam out, pulled me in, set me on the side, and taught me about how you deal when you find yourself with major setbacks. How do you not panic, how do you not try to swim against the tide or the current, how you be realistic of the situation that you're in, work your way to the side, and then you know what he did? He put me right back in the rapids and let me do it myself. And taught me how to deal with it. Dad taught me the business picture and how you deal with challenges, Mom, uh, who was internal medicine, psychiatry, taught me the emotional IQ side of the house, in terms of how you connect with people, and I believe, this whole chapter, I build relationships for life. And I really mean it. I think your currency is trust, relationships, and track record. >> And having that holistic picture to pull back and understand what to focus on, and this is a challenge for entrepreneurs. You're now dealing with a lot of entrepreneurs and coaching them; a lot of times they get caught in the forest and miss the trees, right? Or have board meetings or have, worry about the wrong metrics, or hey, I got to get financing. How should an entrepreneur, or even a business leader, let's talk about entrepreneur first and then business leader, handle their advisors, their investors, how do they manage that, how do they tap into that? A lot of people say, ah, they don't add much value, I just need money. This is important, because this could save them, this could be the pole for them. >> It could, or it could also be the pole that causes the tent to collapse (both laugh). So I think the first thing when you advise young entrepreneurs, is realize you're an advisor, not a part of management. And I only take young entrepreneurs who want to be coached. And as I advise them, I say all I'm asking is that you listen to my thoughts and then you make the decision, and I'll support you either way you go, once you've listened to the trade-offs. And I think you want to very quickly realize where they are in vision and strategy, and where they are on building the right team and evolving the team and changing the team, where they are in culture, and where they are on their communication skills because communication skills were important to me, they might not have been to Jack Welch, the generation in front of me, but they were extremely important to ours. And today, your communication mismatch on social media could cost your company a billion dollars. If you're not good at listening, if you're not good at communicating with people and painting the picture, you've got a problem. So how do you teach that to the young players? Then most importantly, regardless of whether you're in a big company or a small company, public or private sector, you know what you know and know what you don't. Many people who, especially if they're really good in one area, assume that carries over to others, and assume they'll be equally as good in the others, that's huge mistake; it's like an engineer hiring a good sales lead, very rarely does it happen. They recruit business development people who appeals to an engineer, not the customer. (both laugh) So, know what you know, know what you don't. For those things you don't know, surround yourself with those people in your leadership team and with your advisors to help you navigate through that. And I had, during my career, through three companies, I always had a number of advisors, formal and informal, that I went to and still go to today. Some of them were very notable players, like our President Clinton or President Bush, Shimon Peres, Henry Kissinger, or names that were just really technical leads within companies, or people that really understood PR like Thomas Freedman out of the New York Times, or things of that. >> You always love being in the trenches. I noticed that in Cisco as an observer. But now that you're in start-ups, it's even more trenches deeper (laughs) and you've got to be seeing the playing field, so I got to ask ya a personal question. How do you look back at the tech trends that's happening right now, globally, both political, regulatory technology, what advice would you give your 23-year-old self if you were breaking into the business, you were at Wang and you were going to make your move; in this world today, what's going on, what would you be doing? >> Well the first thing on the tech trend is, don't get too short-term focused. Picture the ones that are longer term, what we refer to as digitization, artificial intelligence, et cetera. If I were 23 years old, or better yet, 19 years old, and were two years through college and thinking what did I want to do in college and then on to MBA school and perhaps beyond that, legal degree if I'd followed the prior path. I would focus on entrepreneurship and really understand it in a lot more detail. I learned it over 40 years in the business. And I learned it from my dad and my mom, but also from the companies I went into before. I would focus on entrepreneurship, I'd focus on technology that enables entrepreneurship, I would probably focus on what artificial intelligence can do for that and that's what we're doing at West Virginia, to your point earlier. And then I would think about security across that. If you want really uh, job security and creativity for the future, if you're a really good entrepreneur, with artificial intelligence capability, and security capability, you're going to be a very desired resource. >> So, we saw you, obviously networking is a big part of it. You got to be networking with other people and in the industry, would you be hosting meet ups? Young John Chambers right now, tech meet ups, would you be at conferences, would you be writing code, would you be doing a start-up? >> Well, if we were talking about me advising them? >> No, you're 23-years-old right now. >> No, I'd just be fooling around. No, I'd be in MBA school and I'd be forming my own company. (both laugh) And I would be listening to customers. I think it's important to meet with your peers, but while I developed strong relationships in the high-tech industry, I spent the majority of time with my customers and with our employees. And so, I think at that age, my advice to people is there was only one Steve Jobs. He just somehow knew what to build and how to build it. And when you think about where they were, it still took him seven years (laughs). I would say, really get close to your customers, don't get too far away; if there's one golden rule that a start-up ought to think about, it's learning and staying close to your customers. There too, understand your differentiation and your strategy. Well John, thanks so much. And the book, Connecting the Dots, great read, it's again, not a business book in the sense of boring, a lot of personal stories, a lot of great lessons and thanks so much for giving the time for our conversation. >> John, it was my pleasure. Great to see you again. >> I'm John Furrier here with the People First interview on theCUBE, co-created content with Mayfield. Thanks for watching! (upbeat electronic music)

(upbeat music) >> Live, from Miami Beach, Florida, it's theCUBE, covering UiPath Forward Americas. Brought to you by UiPath. >> Welcome back to the former home of Lebron James, I'm Dave Vellante, this is two minimum, we are here at South Beach at the hotel Fontainebleau. This is UiPath Forward Americas, and this is theCUBE, the leader in live tech coverage Leo Da Silva is here, he is the process excellent leader for Best Day Travel and Arnold Schiemann who's Vice President of Latin America and Spain. You get to go to all the fun places for Symphony. Welcome to theCUBE >> Thank you, thank you guys for your invitation >> You're very welcome, Leo let's start with you Best Day Travel, travel site, specializing in Mexico and other parts of the region tell us about the company >> Well, we have a leadership in Mexico we are, the last year we have five point four million travelers, okay? And there's a lot of people, okay? We've been in the business for 35 years, 34 years actually, okay? So, we're pretty solid, okay? While 75% of the all the transactions we have online, okay? And 25% we have offline, and that's why we're doing, all the transformation that we're doing is under this 25%, alright? Like, just to get the additional transformation and everything. >> So 35 years, so you started before the internet (Leo laughing) >> So I guess you should be 100% offline you obviously successfully made that transition. >> That's correct, that's correct. >> Okay, and Arnold, Symphony is the solution provider right? the implementation partner in this case, right? tell us about symphony and your role. >> Well, Symphony is probably the is particularly, suddenly concentrated on our PA management and our PA design, and our PA process rewardization. We were invited by Best Day Travel Group to look at the process, to look at the project and we embark in a very interesting transformation for them, so that they could move into their PA arena with a clear road map. >> So you guys are both process experts I mean that's, >> Yes >> You've got process in your title talk more about your role, if you would. >> Yeah, well, I'm a green belt, okay? And at least six sigma, and we use this methodology actually, and we are like, two years ago we implemented like a BPM, the department, you know inside the company, just to lead this transformation, okay? So that's what we're seeking right now to lead this transformation and, it's a very good challenge, you know? It's not easy, but we are trying to do our best. >> With your six sigma background, I think it would really tie right into what RPA is, 'cause you can really understand what has variance, and what is pretty standardized and that would seem is that the direct correlation with thing that you can have, the robot and the automation based on, really, the variance piece? >> Yes, totally, you know, well, when you start, all the implementation was right before where start you like to do a benchmark and you're able to see which technology we wanted to use and well, we found UiPath, alright? In which we found Symphony, and but it's not exactly, I think the technology is the last thing, right? So, the technology is the enabling alright? To do all those thing happening but if you don't have, like process management, you know, if you don't have that, it's kind of difficult to reach the target, okay? So, yeah, it's pretty much, I think it's when you, I think the most challenging is let people know what they're doing wrong you know, what they're doing repeating tasks, right so, when you do, like, the process walk through, people just get amazed, you know, like, what? Are you serious, we're doing that? >> When did you start? >> We started in February >> This year? >> Yeah >> Okay, so, take us back to February or January whatever, December, when you were maybe even before that, thinking about the business case. How did it come about, and how'd you guys meet? Take us through the sort of initiative. >> Yeah, well, right before, it was six months before I think it was, on July of last year, we started a conversation, right? And when I found that, within like six months of benchmarking and, we reached that like UiPath, and we start to ... trying to get something different, you know? To do something different enterprise and we had this need, okay? From inside, you know, from back office to tranformate because it's operation sometimes it costs a lot, alright? The first step that we did was like a future of work accelerator, okay? Which is, it's this scan, it's a total scan of the area, okay? And to see how how big are the opportunities, okay? To transformate things, right, so was the first step and after we had the pilot, we have three or four projects ongoing. >> And you were involved from the beginning Arnold, last July? >> Yes, yes >> One thing which was really very interesting about the project is that the client was the C.E.O and the C.F.O was totally the C-suite involvement So, and we believe that our PA is about the business, is about the process, it was ideal. So, we had really I believe it was really not work but, really a good time that we spent together integrating very closely with the team from Best Day Travel Group, to the point that you couldn't tell who was from Best Day and who was from Symphony, and then we were able to present to the C-suite, the result of the road map to move forward with a very clear business case, the process that was going to be robotized. Simultaneously, Best Day wanted approved inside, saying lets develop robotized version of one of the processes, and we did one which had been quite successful, we were just talking that the amount of work that that robot is handling today life, is such that either robot doesn't operate, he wouldn't know what to do because there is so much work to do behind in the past, and he doesn't know what he did, but today, it is almost impossible to recreate that. >> Yeah, that's correct, singularity is here >> One of the things that maybe you can help me understand, 'cause I'm a little bit new to this technology, how do you figure out, how do you size this, like how do you know how many things a robot can do, we heard one of the customers has a thousand robots, how does this scale, and how does this build out inside of a customer? >> Two thing that we do is that we look at the company, we identify those process, with heavy like, say, head count with lots of repetitive tasks that can be partially or totally robotized, and then we present it as a road map because the first question they have is "how do we start?" I mean, this is a company, 3000 people 4 million passengers, where do we start? How we get good advantage of the robots and that's how we did it, and then it's going on, the project we just did the first part, we continue now with the second part which is going to be even more interesting. >> What'd the business case look like? I mean, was it a saving money, making presumably some of this was cost reduction right off the bat, right? >> Yes, yes >> Lets talk about that business case what's that framework look like? >> Well, the action will have a pilot, that we just did, we launched already, alright? The business case was like, to to reduce cost, alright? The operational cost is very high, okay? So, now, we have like, just to have an idea the situation before would have, like six person working, you know, like the eight hour shift, okay? And doing like issuing tickets and you know and right now we have, like, just one robot and we built a capability of, 126% okay? On this, just with one robot, alright, and yeah, it's amazing, its amazing and 24/7, you know, right now it working pretty fine. >> Specifically, where do the cost savings come from? >> Well, the cost savings is not exactly that ease, but it's a customer's experience, okay? And also the capability that you can build alright? To get more sales, okay? And there's another project that, before that we had the first one, we have to to reduce the cost of the operation you, know, for 65 people, alright? And ... the transactions cost a lot of money for us, okay? So that's how we're trying to we're trying to understand that and we're trying to eliminate those costs or reduce, you know like, as much as we can. >> Its a part of that, you redeploy people, you put 'em on other tasks, is that what you're doing? >> Yes, yes, we free them up, you put another, you add value task, right? >> So the C.F.O is one of the stakeholders here, >> It was >> So many C.F.Os might say "okay, well, we're "not going to cut head count, so where do I "get my savings?" so the answer, if I'm hearing it is well we're going to increase revenue because these people are going to be on other tasks, and >> That's it, yes >> And, do you have visibility in line of sight as to how fast that can happen, whether, is it already starting to happen? >> Yeah, it already start to happen, already start to happen, like in, you know, this project was we have the roll back in 15 days >> I was going to ask you what the break even was it was inside of a month? >> You know, its already paid, it all 15 days, it's already paid, right so, yeah, the C.F.O is pretty happy with that. >> The first project was relatively small right? >> Yeah, yeah yeah. >> You proved it out and now you're going to throw gasoline on the fire >> That's it, that's it. >> That's great, so what's next for you guys? >> Well, next, we are go to the customer service you know, like ano-traceability, there's a traceability project that we have to do, alright? Just to ... To have the client in front of everything, you know? So that's our strategy right now and we're going to do, well Symphony is going to help us out with our PA and with implementation and the process, because its going to be a new process, it doesn't exist, alright? So there's going to be a brand new one so we have to create from scratch. >> Arnold, I wonder if you can go a little broader for us on this, it sounds like you've got a perfect partner inside the company with, you know, process in his title you've got the C-suite engaged, is that a typical deployment, what are you finding? >> Is not typical but it is, that is something that we look for all the time. 'cause it's, if the client is not engaged, we can do nothing, if the C-suite is not engaged, there is very little process people can do and by being engaged the C-suite, we're driving the cost reductions, but there is another point besides cost, consistency, and also we are eliminating side loss that had existed for long time, 'cause the companies are starting with one organization then another one, another one and all of them touch the customer what the probably will be doing to them hopefully before the end of the year, early next year, to be able to see the transverse of the customer, one and a half million passengers arriving to Cancún and they are passengers. But you don't know how many people will come back so you better know that these guys came here they like to go to the scuba diving next time he's around, we can offer him a scuba diving, we can pick him up from the airport, we can offer other services and then, the company is structured to be exponentially, so that you can grow from 4 million to 8 million passengers without adding head count, adding, that is the future of Best Day Travel Group and that's why we have engaged the management. >> Okay, so you're looking at the moon shot double the number of passengers served with the same head count, that's a huge productivity boost, so I'm hearing 15 day break even, some of that was hard cost reduction, its revenue increased, its proven, now you're going to invest more consistency, better customer service, cross selling, hey they like to scuba dive, maybe we can make an offer here, and better data allows you to do that that's going to summarizes the the business case and we're talking I mean, I don't want to, you know, squeeze the M.P.V at it, but we're talking millions? Hundreds of thousands? >> Millions >> Hundreds of millions? >> Millions right? >> Yeah, yeah, pretty much, it's a huge number you, know, its a huge number and, we have a lot of opportunities and, I think it's going to be a success, you know? >> And presumably the employees want to be part of this ride, right? They want to get, whether it's re-trained, or become R.P.A experts, deploy this technology, drive their digital automation and service those 8 million customers with the same resources you know, or invest in other resources. >> yes >> New growth areas. >> Yes, yes. >> Great story >> Yeah, it is, it is, >> we're working hard >> (laughs) figuring it out >> We're privileged to have been work with them because they are, I say unique but it was done for us from day one everything was put in place, engagement, people, and then the company itself is very easy to manipulate and transform because of the way that it was structured 30 years ago. >> And why UiPath? I mean, you said I chose them last summer why, why'd they win? >> Well, because of, well during a benchmarking, I can see a lot of difference between them, you know? And we have concluded that, well they actually Symphony recommend us, alright? So, you want this, you want that for this situation, it's going to be the best solution, right? And after that, we're pretty sure that it's it's the best it's the best choice, right? Because of the personalities, because a lot of stuffs that they have they can bring to us, you know? >> Do you worry about, do you worry about shadow R.P.A, like (laughter) >> The divisions going off and doing their own robots, or have you guys got a handle on that? >> Yeah, you know (laughing) no, not worried about that, you know, but yeah it's going to happen. >> It's a good thing. >> Alright, gentlemen, thanks so much for coming on theCUBE it was great to have you. >> Thank you for inviting us >> Alright keep it right there everybody, Stu and I will be back at UiPath Forward Americas right after this short break, you're watching theCube, we'll be right back. (closing music)

>> Hi from Toronto, Canada. It's the CUBE covering Blockchain Futurist Conference 2018 brought to you by the CUBE. >> Welcome back to the live coverage. Day Two of the CUBE here in Toronto, Ontario in Canada for the untraceable Blockchain Futurist Conference wall-to-wall coverage Day Two. A lot of action going on. Tons of great content, tons of great after-hour networking. Just overall great vibe. In light of the market crashing, bitcoin stabilizing, some old coins getting crushed. We got it all covered for here. I'm John Furrier, your host for the CUBE, and our next guest is Nithin Eapen, who's the chief investment officer of Arcadia Crypto Ventures. Arcadia Crypto Ventures, welcome to the CUBE, good to see you. >> Hey good to see you too John. Thank you for having me here. >> Keep alumni in the know. Okay. So first of all, you're an investor in crypto. Everyone's running for the hills. A dip is happening, a crash, or some will say. Your perspective, what's happening in the market? >> See, happening in the market. So typically just like in any asset class, there was a huge run-up that happened very quickly. It didn't go up slow, alright? And the geeks were in early, the libertarians came in after that, then there were speculators. And the retail market also came in, and they all came in together for let's say the December after the November Thanksgiving week and everybody learnt about cryptos, they came in. Alright, the next set of guys haven't come in. Alright? So there's nothing for them there. Nobody's holding them there. And there were expecting the institutional investors to come in and that hasn't happened due to custody problems, ETF problems and all that stuff. Alright, it started going down. The weak hands are falling. The weak hands are keeping on falling and as with any technology, any bubble of people have come in, now they feel that okay the world is coming to an end and they are selling all their stuff. All the ICOs that have raised money in Ether, selling the Ether. All this together is pushing it down, and everybody's waiting for that next set of investors, or the, every 10 X, I mean, an asset goes up, there's a new set of guys who are supposed to come in, and this time it hasn't come in and we're waiting for that. >> You're on the panel here at the event. A lot of different panels, but one panel I watched you were on, you talked about the token model, people were holding Ether. It's kind of a debate, you know, and Bradley Rotter, another investor was saying, hey, there are too many tokens out there. You had different perspective, but one of the things I wanted to get your reaction to is that people who held on to the Ether lost their runway and it creates a harder road to hold. So people were converting to Fiat. This is a big issue. How are we going to get by this? This whole lot of Ether, more people are going to come in. The dynamics of investing in this token model, has it changed? How are you looking at it, and I'd say, how do you help startups? >> So regarding a lot of tokens, first thing is there are a lot of tokens out there. See that is going to happen. It's just like in the 1999, okay, a lot of websites and a lot of Internet companies, pet.com, everybody's an Internet company. Same way, everybody is a token. 95 to 99 percent of them are going to go away and the good ones will rise from those ashes, okay. Now regarding runway, a lot of these projects have pretty much raised enough money for 50 years of runway. So it has crashed one-fifth, okay, they have 10 years worth of runway. Typically, in the olden days, a small company with an idea or a MVP was max going to raise one million to two or three million, alright? And all of them anyway have that even after Ether has crashed. I'm saying, just don't panic okay? You still have 10 years worth of runway. Utilize that, build upon it because the high period may be over where you can just raise money on a white paper. You've got the money, build yourself. You promised your real investors I'm going to build this great thing. So this is where we're going to see the great founders to the average and the bad ones where they've hit a wall, they don't know what to do, they'll fold their hands and walk away. Really good founders, they're resilient. They will, no matter how hard they're pushed to the wall, they're going to come up with the product, you see, and they're going to try to meet customer demands. They're going to get through the feedback loop, check what the customer wants and start delivering it. >> So basically what you're saying is there's so much money being raised, and I agree with you by the way. If you go the classic venture capital route, if you had a Powerpoint or prototype or even a working product with recurring revenue, your serious preferred stock financing will be anywhere from three to 15 million. >> Oh my god. And that's high end. >> That's a high end. >> 15 million will be on the high end. Some cases are raising 50 million, some cases 70 plus million, so even if you cut that in half, it's still a better outcome on the first round. I agree at that, so I think that's interesting. The other one that you mentioned is that things are dynamic, that we're seeing here at the show is in the hallways, everybody's talking about flight-to-quality. And I was talking yesterday on the wrap-up of Day One that you can tell the good deals from the bad deals by is the venture architecture working for the coin, or is the coin working for the venture architecture. And so this flight-to-quality combined with how people are optimizing their build up is critical. >> Yes. >> Talk about some things that you're seeing with this flight-to-quality. Is there anything in particular? Is it blockchain? Is it token economics? Where's the quality deals from your perspective? >> I feel quality lies in the founder of this. The founding team, because the idea, if you really ask me what is an idea here? An idea is just like mental masturbation. Guys who sit there can come up with so many ideas. That's what ideas are, okay? Now taking these ideas to fruition, like building it. There's a capital raising part, okay? Now a lot of people are good at capital raising. They're raising money and a lot of capital coming in. That's awesome because you need capital to attract talent to the space because a lot of talent who are maybe in astrophysics or in mechanical engineering, you want that talent to come here and come with ideas and build the stuff. Okay, the capital has come in. Now once the capital has come in, you really have to build the stuff. Even after you build the stuff, you have to go find the customer right? You have to go and acquire customers and all these three things coming together are so hard in reality. And that's why the venture capital always give a little bit of money to make sure that these guys are not wasting the whole thing away, right? >> Well, the other thing I want to get in touch, get on to you is here is that, in the old days, Silicon Valley, you got to move there, the VCs were there. Now, talking about the global phenomenon, the capital formation is both inside the United States and outside the United States. Certainly inside the United States, you're starting to see the formation around traditional structures, security token, which is more like, it feels like a security, a more preferred financing model. Equity's now involved. Outside United States, a booming utility token market. Your thoughts on how that's progressing, still open, still crazy? What's your thoughts? >> So the capital model, the beauty that has happened today is, earlier, you had to pitch to two hundred VCs or three hundred VCs to get one guy to put money into it. Most of the time, they'll be wasting your time, alright? So you had to go to them to get a million. And you didn't have any other option. You couldn't get it from a small enthusiast of your project to give you five hundred bucks or a thousand bucks. So now, you have that option, okay. Now that option is being cut by regulation, by the STC and people like that coming in saying, oh you can't do that, it has to be a security token. Alright, let's make it a security token. The moment you make it a security token, my question is, can you raise money from outside? Are you stopping that? Then again it doesn't really make sense. You're cutting the small investor, the chance for him to buy into a good, okay? It was only the VCs like Sequoia, or somebody like that, who could access a deal like Google. Now we have a chance for something like Google to come up with the common man whose putting five hundred, like Ethereum. There was no venture capitalist or Wall Street who got involved in Ethereum. The real money was made by very common people who supported a decentralized world computer. >> All CVCs get it now, market entries or whoever's getting involved, starting to see VCs dabble in there. Has that changed the investment dynamic at all? >> It has because the VCs, they have this feeling they've missed out, right? So now they're putting in five and 10 million dollars into a project, valuing a project to three hundred million. It changes the dynamics because now all these guys, like, there are so many projects that are raising like a hundred million because the VCs, all these private investors, are giving 10, 15, 20 million. Like recently for example, they've raised a 300 million dollar fund. They can't invest 10 thousand to 50 thousand to 100 thousand, right? They have to push 10 million to manage the money. That is skewing stuff, and I personally am not very interested in those kinds of projects, because it's without a community power at that time, so I don't know how the token economics is going to be fruitful for the second investor, the third investor. >> And Block Tower, we found out yesterday, is also investing in putting a fund together, a venture fund. It's interesting. We'll see how that shakes out. One thing that is going to change is the dynamics. You mentioned community, obviously, a big part of that. Big community here at the Futurist event, Toronto. So they've got a Canadian culture, a lot of Ethereum DNA in this area. What are you hearing at this event? What are some of the things that you're hearing in the hallways? You've obviously been on some panels at this event, and you're highly networked. What are you hearing? What's, with your ears to the ground, what's it telling you? >> You were talking about Block Tower, yes, they're doing a venture fund. It's great. He's a very very smart investor and they're going to do very well. On the ground, so most of the questions right now are coming, so we've reached the point that okay, we have built up the blockchains or the bit coins. We want it to be faster, alright? Everybody's looking for scalability. Who can bring scalability? The EOS guys are out there. They are saying they can do, you know what, five thousand or 10 thousand or 100 thousand transactions per second. So scalability is a very very big thing. I personally consider something like interoperability, bigger. Interoperability in the sense, alright, so now you have these multiple chains. It's just like multiple types of phones. Now imagine you had an AT&T phone and you couldn't call the Verizon phone customer, alright? We're at that point. We have all these chains, there's Ethereum, there's One Chain, there's EOS. Okay, I've built, let's say, a distributor app, let's say it's a poker app on Ethereum. But I can't play with the guy who's on EOS right? What if he also wants to play poker in this poker app? Is there somewhere we can make this integrate and interoperable? Now to make it interoperable, now we have, if we go into details, there are assets, there are tokens on both sides. How can we transfer tokens from one chain to the other chain making sure there's no double-spend happening? >> I mean there's two things. That was the consumability, making it easy to use, one. And two, I think you're right on. Interoperability's huge. You got to have that. >> Interface, as you said. Interface is big. To make it simple, it's still the geeks. In geeks, a lot of people are using command lang prompts. You can't expect the common man sitting at home. It's just like email. Email was there from 1978. It's only when all these tools like, beginning '94, and the browser came in, that people started using it. So those things have to come in. >> A lot of work's got to get done. So many on the blockchain side. Well, great to have you on. Good to see you. Congratulations on your panels and this afternoon, you're doing a good job. Thanks for coming on. I appreciate it. >> Thank you so much, John. >> Any predictions by the way? >> Predictions, I don't know, I'm not a predictions guy. I just go with the market. >> Price of bitcoin 20 thousand? >> Oh I never get into those predictions. I never want to get it. I think that it's possible that the bear market can continue for a longer time based on the fact that the newer money cannot come in. It has happened before. Bitcoin has fallen so many times at the 70, 80 percent range and then it stayed stagnant for a year before the next round up came. >> And certainly we got work (inaudible). Thanks for coming on. Keep coverage here live in Toronto, Ontario. Keep coverage here with the untraceable Blockchain Futurist Conference here of two days. Day Two, keep coverage. We're back after this short break. Thanks for watching. (electronic music)

>> Announcer: From New York, it's theCUBE. Covering Blockchain Week. Now, here's John Furrier. >> Hello everyone and welcome back to theCUBE coverage here exclusively at the block party, at the Crypto-House's part of Blockchain Week in New York City, Blockchain New York. Also, Consensus 2018 is having a variety of other events. I'm here with Allan Rothstein, the co-founder of Strategic Coin, also managing partner at Decentralized Ventures. Hey welcome to this Cube conversation. Nights, night party here, exclusive event here in the East Village, thanks for joining me. >> Thank you, thank you for having me. >> So, co-founder of Strategic Coins doing some great work in the maturization of this sector. Still in the first in the half inning, bottom of the first, some would say but also Decentralized Ventures, which I love the name because what does it mean? I mean, it means crypto, token economics, block chain, brand new field. >> Exactly. >> Emerging very very fast. >> And it's global, so it's decentralized. Right now we're in Malta, but we're going all over the world, Estonia, other countries because that's where this market is going. >> So for the folks that don't really grock all that, how would you describe it to your friend that says Hey Allan, what is this all about? What is this decentralized tokens, ICOs, blockchain, bottom line me, what's going on? >> Blockchain is probably the first really global business model that is not controlled by anybody, by any single government, by any single company, by any single industry. It dis-intermediates all of these industries that are filled with middle-men and which prevent end users and peers from interacting with each other. >> I was told by some guy I was interviewing in Puerto Rico, you know the United States is the place where all the money went into because that's where the entrepreneurial energy was. And Europe was the entity that was slow, antiquated, all these rules, hard to make money, hard to be a capitalist. He goes: "now, the United States is turning into Europe." We are the new Europe in the US and all the money is going outside the US, into massively growing middle-class economies outside the United States. And the perfect storm is the crypto token economic model, where money is just running hard. Your thoughts on that comment and reaction. >> I think it's exactly right, and more importantly the road blocks being set up by the US government are not only sending the economics to other places in the world, they're actually sending the technologies to other places in the world. So I've lived in New York all of my life, I've been on Wall Street; the reason I'm setting up in Malta is exactly for that reason. Because it is very difficult to work in Blockchain and crypto here. We don't know what the definition is. The IRS says that cryptos are property. SEC says that they're securities. SFTC says they're commodities. The FED says they're currencies. So you have four different agencies claiming jurisdiction and you don't know who to report to. You don't know what the rules are. >> And all the service providers like law firms, and advisories, accountings, they all come to a screeching halt because they don't know what to say. They don't want to get sued. Entrepreneurs give up, that stifles innovation. >> It stifles innovation, but it, more importantly, it's really sending potentially the most important technology overseas. And you have other jurisdictions that are grabbing at it. You've got Bermuda, I work with the government in Malta, and they are setting up what they call Blockchain Island. They are setting up a crypto-friendly regime. This will be the first EU country with a full set of regulations. It's not that the regulations are easy but you know what the rules are. And at the moment, that's the only EU country that you know all the rules. >> As all these regulations, I mean GDPR is happening this month, I still think that's a shit show, in my opinion, but we'll see what happens there. This is, all these regulations, I get it, but I think that as the economy starts to go global, it's a competitive opportunity for our country and nation to be a digital nation and do it right. And also, people need advisory. What the hell is the playbook? You can't just go to the manual, there's no manual for this. There's no playbook. Strategic Coin, Decentralized Ventures, other leaders in the community on the finance side are pushing the envelope to try and lead by example. Because, as you just said, things are pretty much sideways from a regulatory standpoint. >> Yeah, that's exactly what we do. So at Strategic Coin, we help with jurisdiction. We help with the regulations, we try and direct companies to understand what they're dealing with. We do deep research for companies, we help them work on the corporate side, we really help them navigate some very difficult and choppy waters. >> What's the biggest challenge that companies have right now? Is it domicile, is it token economics? >> The biggest challenge is, there are two. One is regulation, knowing what the rules are. Second one is banking. Without regulation, bank will not allow companies who are getting funding from crypto to open accounts and accept funds. Once regulation is in place, the banks understand that they're no longer at risk of violating laws because they know what the laws are. So banking, in particular is a real issue around the world. >> What's the overseas outlook, obviously age is booming, there's been some, you know here sound here and there, shut it down, build it out, other countries are saying we're going to be the first global Wall Street, clearing out crypto, the Fiat, moving it around. This is all up in the air. Who's leading and who's not leading? >> Right now, obviously Malta's leading because of the first EU country with a full set of regulations that they've proposed. Singapore is looking to do this. South Korea is starting to now turn. They were looking to shut down exchanges and they're actually now starting to realize that they're just sending business and technology overseas. >> What's your story these days, what are you working on? What did you do last week? Did you fly to South Korea, I mean you traveling a lot? What kind of, what are you working on? What kind of things? Give me a little taste of how your life goes every day? What are some of the challenges, opportunities you're working on? >> Well, one of the challenges is trying to filter all of the business that is actually coming to us with Strategic Coin and with Decentralized Ventures. We can handle the business because we have a lot of the answers that people are looking for. >> So you need to hire people? >> We are continuing to hire people. What's important with Strategic Coin is that we're hiring Wall Street people. We're hiring veterans in the industry. Many of these companies out there now are 25 year old kids, mom and pops, who really don't even understand what they're looking at. >> You know, baseball, the old expression about a five tool player, what's the equivalent, crypto young gun that you look for? What are the attributes that you look for in a candidate that really can handle the pressure. I mean it's not pressure, it's really just more of the pace. You need smarts, you got to have energy, got to have integrity but also you got to push the envelope. >> They have to work about 35 hours a day. They have to have the capacity to really continue to learn very very quickly to understand, to take direction. And to really understand what this business looks like and where it's going. >> And good money making opportunities as well. >> There are tremendous money making opportunities as there are in any new industry, in any new technology. >> Before we came on camera, we were talking about your background, some of the things you've done entrepreneurially and also growth. What's your assessment of the current wave we're in? Compared, you seen many waves, of all the waves, compare and contrast order of magnitude, this wave versus other waves. >> What's interesting about this wave is there have been paradigm changes in industry, technology, and they've taken generations. So, an understanding of how that change happens, generally is from text books, you had the industrial revolution and first software revolution in these generations for people my age, or people in their 40's. You've seen the software revolution then you've seen the internet revolution and now you're seeing this, so you actually have experience in seeing how these play out. And that's part of the reason that this technology is moving so quickly. I know how it's going to go, I've seen how it's going because I was involved in the internet. >> Software economics, you've seen software economics before, you know what it looks like. >> I've seen software and I've seen internet. And with blockchain, we know blockchain is here, and we don't know what use it's going to be, we know a lot of these companies are going to fall by the wayside. We know a lot of these companies set up a mom and pop will disappear and we know a lot of these ICOs will be acquired by bigger ICOs who have more experience. >> Well you know, just to add two things to that list of awesome commentary is add in open source software and cloud computing and you got the perfect storm. On top of what you just said, that is the magic. Alright, so I got to ask you for the young people out there, what's your advise, or if you could talk to your 22 year old self right now, what would you say to yourself, walking into this new landscape that's exploding with opportunity, change in all theaters? >> That's a really good question. I would say to try and find mentors, learn from industry veterans, as opposed to setting up your own shop, setting up your own ICO, thinking you're going to raise 50 million dollars and you're going to conquer the world by the time you're 25. >> Allan, thanks for coming on to share. I know you had a big party, we're having a great time here. Thanks for taking a minute out of the networking and schmoozing and to come in and speak with us on theCUBE here in New York City. >> Thank you. >> Alright, I'm John Furrier, we're here at Blockchain Week, New York, of course theCUBE's continuing coverage. Go to siliconangle.com, thecube.net for all the videos. We'll be at Consensus 2018 all week. More coverage on Silicon Angle and thecube.net. I'm John Furrier, thanks for watching.

(techno music) >> Announcer: Live, from New York, it's theCUBE. Covering Blockchain Week. Now, here's John Furrier. (techno music) >> Hello and welcome back. this is the exclusive coverage from theCUBE. I'm John Furrier, the co-host. We're here in New York City for special on the ground coverage. We go out where all the action is. It's happening here in New York City for Blockchain Week, New York, #BlockchainWeekNY Of course, Consensus 2018 and a variety of other events, happening all over the place. We got D-Central having a big boat event here, tons of events from Hollywood. We got New York money, we got Hollywood money, we got nerd money, it's money everywhere, and of course great deals are happening, and I'm here with two friends who have done a deal. Al Burgio is a CEO of DigitalBits co-founder, and Nithin who's the partner at Arcadia Crypto Ventures. You guys we've, you know, we're like family now, and you're hiding secrets from me. You did a deal. Al, what's going on here? Some news. >> Yeah, well first John, thanks for having us. We always love coming on the show, and really enjoy spending time with you and so forth. We, you know previous conversations that we've had, we were not out there fundraising. But really had the opportunity to meet a lot of great people Nithin and his firm being definitely one of them. And as a result of that, really building this, say, following, these relationships within the venture community, more specifically the crypto venture community. When we were ready to actually go out and do, let's say a first round, for us it happened very quickly, and it was a result of being able to leverage those relationships that we had. For me, it was kind of remarkable to see that support come and happen so quickly. Normally venture, it's just a process. Many many months. >> John: Long road. >> Then a month to close. >> John: Kiss all the frogs. >> Yeah, here it's like, you know, people can do due diligence on the fly, You have an opportunity with events like this. >> John: They're smart. >> They're smart, and and there's an opportunity to really foster these relationships in this really tight-knit community. And, you know, Nithin and his firm being obviously one of those. And so when we were ready to go out and do our first round, it happened quickly, and I'd like to think that in a lot of ways, it happened amongst friends. >> Well, you're being humble. We've been covering you, you've been on theCUBE earlier, when you just started the idea, so it's fun to watch you have this idea come to fruition, but you're in a, you're hitting a TAM a Total Available Market that's pretty large. And that's one of the secrets, to have a TAM. Aggressive bold move, we'll how it turns out for you, but you know, you got to have the moonshot, you're going after the loyalty market, which is completely run by the syndicate, what do you want to call it, the mafia of loyalty. >> Yeah, well, I would say that in some cases, those that are supporting us see that as really just one use case. Because we built this general-purpose blockchain, one of the use cases and one of the first use cases that were out there to support, happens to be the loyalty space. >> John: Big. And it's massive, highly fragmented but massive market, and we can solve a lot of liquidity issues with our technology. But then it goes beyond that. So it's a big market at the start, and then that can scale even greater from there. and I think that's part of what, I mean obviously, I'm not going to speak for Nithin. >> Nithin, let me weigh in here, pass the mic over. Nithin talk about the deal, why these guys? I know you met 'em, you like Al, and the feedback I've heard from other folks is he's a classic entrepreneur and that obviously, the entrepreneur gets the deal, but obviously you don't just give money 'cause you like someone. What about this deal is it that you guys like? You guys been there early, you got some great people on your team, what about this deal is it that you like? >> Sure, for us, Al met pretty much most of, almost all the criteria that we had, okay. That we had when we go, the thesis before we go fund someone. We don't get so many deals like that. Usually we get you know, they made 50% of the criteria, we might still put money because you can't get the 100%. So one thing, Al as a founder, he's experienced, he has done it multiple times before, he sold companies. Tech guy, which is very key for us. A tech project is very key. Okay, second thing, he's built the whole thing. It's not like he's raising the money to go and build it. He built it, now he's raising money to go for go to market strategies, which makes sense. He's shown it, and we tested it out. So like, we were completely blown away. He has a team behind 'im. He's built a team on every side, on the marketing side, on PR, events. And the idea, this is a general blockchain, but he's addressing a very specific issue. It is a real problem. Loyalty points, or rewards points, or gift points. Or whatever you call them. It is segmented, it's fragmented, and this is a chance. And there might be many people who are trying to solve this problem, but I think Al has the greatest possibility, or probability, of becoming the winner. >> You and I have talked on theCUBE before, both of you guys are CUBE alumni, I know you both, so I'll ask you, 'cause I'll just remind everyone, we've talked about token economics. One of the things that's coming up here at the Consensus 2018 event in New York, onstage certainly, and some fireworks in one of the sessions, is like if you're not decentralized, why the hell are you doing a decentralized model? So one of the criterias is, the fit for the business model, has to fit the notion of a decentralized world, with the ability of tokens becoming an integral part. What about this deal makes that happen? Obviously, fragmentation, is that still decentralized? So, how are you sorting through the nuances of saying, okay, is it decentralized the market for him, and this deal? Or does it fit? >> See no, decentralize is one thing okay, in here, more than decentralized, I would say there was the platform, so that all the companies can come in, use this common platform, release it, and as a user you're getting a chance to atomically swap it if you don't like something. Most of the reward points or loyalty points go waste. Maybe the companies want it to go waste, I don't know if that is. >> It's a natural burn at equilibrium going on anyway right? Perfect fit! >> So that is the only, that was the only doubt that we had. Would companies want this, because do they want their customers' loyalty points going waste rather than swapping it for something else? That was the only question that we had. Well, that's a question that will get answered in the market. But otherwise we hadn't seen something like this before. >> What's your take of the show so far? We saw each other in the hallway as we were getting set up for theCUBE, for two days of coverage, in New York, for Blockchain Week, New York, what's your take? Obviously pretty packed. >> Oh my god, it's so packed, and it's great, the show is going on. It is bringing a lot of money in, it's bringing all the investors in a new money, old money, traditional money, nerd money as you said. >> It smells like money! >> Everybody's coming in. See the beauty about those things coming in is, you're going to get a lot of people from other fields that are going to come into this field to solve problems. 'Cause earlier, if there is no money coming in, you're going to have very smart people, or very intelligent people stick with physics or whichever was their field. Now, they're going to look into the space because they're getting paid. See that brings more people who are intelligent, and who can solve problems. That is very key for me. >> Al, I want to ask you as an entrepreneur, one things you usually have to struggle with, as any entrepreneur, is navigating the 3-D chess you got to play, whether it's competitive strategy, market movement, certainly the market's moving and shifting very quickly, but you've got growth, big tailwind for you. What's your takeaway? Because now you have new things coming on. Every every day it seems like a new shoe is dropping. SEC's firing a warning on utility tokens, security tokens are still coming, are now coming online, but that looks very promising, and then ecosystems become super important. You guys just announced news this morning around the ecosystem. >> Yeah, tomorrow we have some. We had some news today, but we have more tomorrow. >> John: Well talk about the news. >> Yeah, so we have a multi-tiered go to market strategy. Obviously in the loyalty space, again I want to emphasize, it's just one use case, but it's a massive one. You have brands, the enterprise. And many of those those enterprises or brands may operate their loyalty program internally, in terms of like back offices systems, in some cases they're outsourcing the app to a SAS provider, some application provider, that's kind of hidden in the background. But let's just say like Hilton. I use Hilton, it's the location for the event, but Hilton, you have this user experience using this app, but maybe that technology, the SAS application that's powering that, is actually not Hilton technology. And so let's just say, there's 30 million people in the Hilton program and there may be 30 million of them on the Marriott, coexisting on some SAS application. And so that's another important category for us. SAS providers and so forth, supporting that industry. And then last but not least, today, whether enterprise or SAS company, many cases not touching their own hardware, right? They're using the cloud. >> So they're outsourcing the backend. >> Yeah, and so you have managed cloud providers. >> So what does it mean for the market? I don't understand, I'm not following you. >> Well, I guess what I'm saying is that there needs to be a common standard, across enterprise application provider, in global cloud community, cloud is the new hardware. >> True. So horizontally scaling loyalties as we were (mumbles). >> Exactly, so we have, we're basically securing partnerships on all three levels, to make sure that, if you want to use new technology, you want to ensure that it's widely supported, across a variety of partners you may want to work with if you're an enterprise. Whether, a software company, cloud company, and so forth. You want to be able to ensure that it can back up the truck. So we've basically signed partnerships at all of these tiers. You're going to see news in the morning. It's late here on a Monday evening. So tomorrow 9:00 a.m, major cloud company, one of the major cloud companies, and there's more to follow, making an announcement that they've joined our ecosystem partner program, and supporting this open source technology in a number of different ways. Which we're really excited about. >> You see ecosystem as a strategic move for you. >> Absolutely, this is, for us, this is, it's all about helping the consumer, but it's not about one consumer at a time for us. It's very much an enterprise play. It's one enterprise at a time. And with each enterprise we basically add to the ecosystem millions if not tens of millions of consumers instantly. >> Nithin I want to ask you a question, because what he just brought up is interesting to me as well. As a new thing, it's not new, but it's new to the crypto world, new to the analog world, that's not in the tech field. Tech business, we all know about global system integrators, we know about ecosystems, we know the value of developer programs, and community, all those things, check, check, check. But now those things are coming to new markets. People have never seen an ecosystem play before. So it's kind of, not new, it's new for some people, it's a competitive advantage opportunity. >> True, it is. See the whole thing is so new, that you can't even define it at this point. It's very hard to define. It's like, see, as an example I would say, none of us thought that when the iPhone came, there would be a 60 billion dollar taxi sharing economy that comes out of it, right? Same thing. Blockchain comes, we just don't know. And it's very hard to predict. >> New brands are going to emerge, I mean if you look at every major inflection point, I point to a couple that I think are relevant, TCP/IP was created, internetworking. >> Yep. >> That essentially went after proprietary networks, like IBM, Digital, Stacks, but it didn't replace, it wasn't a new functionality, it was interoperability. >> Yes. >> The web, HTTP, created a whole new functionality. >> Yep. >> Out of that emerged new brands. >> Yeah. >> So I think this wave's coming is a, new brands are going to emerge. >> Here, what's the brand, I don't know what's going to emerge. There it was interoperability. >> John: Well, new players. >> It's here, it's more, the collaboration. The collaboration is so huge, it's the scale is so huge, in the sense you can collaborate across the world. You're cutting those borders, there are no borders that can hold you. Even though interoperability happened in internet, There were the Googles, and the Facebook, that still had those borders. >> Well, don't put it, Cisco came out of that, 3Com, and those generations, but the hyper-scalers came out of the web. >> Yep. >> So I'm saying, well I'm saying, I want to get your reaction to, is I think that is such a small scale relative to blockchain and crypto because it's global, it's every industry, it's not just tech it's just like everything. So there's got to be new brands. Startups going to come out of the woodwork, that's my point. >> It's not yet time for the brands to come in. See that's the whole thing. So let's put it this way, the internet was there from 1978, if you really look at it, ARPANET or DARPA, those things were there. Email was there, but it was by 1997, or by the time we all came to know Google it was 2001. There is that gap between the brand forming, because it has to permeate first, more people have to use it, like what is the user-- >> Everything was was a bubble, but everything happened. I got food delivered to my house today, right? It happened, people were saying that's a crazy idea. >> It's now it's going on, right. So it's the timing and they know the time for it to permeate so here, how many people are using Bitcoin, and to do what? Most of them are just speculating right? There's very few real use case of remittance or speculative trading, that's what's happening. See that's what I said. The other use cases, it has to permeate. And that comes with more user adoption. And the user adoption initially is going to come from the speculation. >> I think it's a good sign, honestly I think it's a tell sign, because I remember when the web was new, I was in coming out right and growing in the industry. People were poo poo, oh that's just for kids. The big company's said, we wouldn't, who the hell is going to use the World Wide Web? Enter the search engines. >> I remember that like it was yesterday. I forget that I'm not a kid anymore, and I had the opportunity to be an entrepreneur during that era. One of the things I want to add is that, we had, I think what Nithin is really pointing out, it started with the infrastructure, you had network engineers and ISPs, you know, and email. But what was the enterprise application here? What was that consumer application, and that followed right? So it started infrastructure, then it evolved. Once we saw these applications, enterprises started to go crazy. Whether it was the Ubers of the world surfacing, or enterprises reinventing themselves, that's kind of the next wave. >> Well, this is why I think you're a good opportunity. 'Cause I remember licking stamps and sending out envelopes to get people to come to a seminar, held at a hotel. That's how you did it in the old world. The web replaced that with direct response. >> But there's some, there's something else-- >> The mainframe ran faster than the web. You're replacing an old loyalty, that's like licking the stamps. It's not about comparing what you're doing to something else. >> There's also something that helps, that we're not acknowledging, that really helped take internet from 1.0 to 2.0, it's Linux. You know I remember websites were insanely expensive. It was Windows servers, it was Sun Solaris, all of this crazy, expensive, server systems, that you needed to have, so the barrier of entry was extremely high. Then Linux came along, and you still needed to have your own data center space, and so still high, but the licensing fees kind of went away. >> And now with containers and Kubernetes-- >> Exactly. >> I made a bet I was going to get Kubernetes in a crypto show. >> Anybody from a bedroom could start a company, right? You could do it with your pajamas still on. >> John: Well orchestration's easier. >> Absolutely. So this has started, this really, revolution. Now you have blockchain and you start to introduce enterprise-grade blockchain technologies, it's the next wave, you know, it's not VoIP, it's value over IP. >> Okay, I'm going to ask both you guys a final question, to end this segment here at the block event. I know you guys want to get back, and I'm taking you anyway from the schmoozing and networking and the fun out there, deejay. Predictions, next year this time, what are we going to be? What's the we're going to look like? What's going to evolve? I mean we had a conversation with Richard, who partnered with you guys at Arcadia Crypto Partners, saying the trading things interesting, the liquidity has changed. What's your take? I want you guys both to take a minute to make a prediction. Next year, what's different, who's out, who's in, what's happening, is it growing? >> So I, you know, I would say this, surprisingly, CTOs, I love CTOs, but many CTOs, I would say that well above 50% of CTOs, still can't spell blockchain. Really, and what I mean by that, really understand the transformational power what this is, in terms of how this is really web 3.0. This is going to change so many industries, create so much value for consumers, help businesses and so forth, and we're going to cross that 50% mark. >> Next year. >> With CTOs-- >> 50% of what? Be clear on-- >> Basically, we're going, in terms of the net, that blockchain's going to capture, and really enterprises and not just enterprises, service providers and so forth-- >> 50% of the mind share or 50% of the projects? >> Yeah no, I'm talking it's, people aren't going to be saying, oh, blockchain, isn't that Bitcoin? They're going to really understand, and they're going to understand that impact. And over the course of the next 12 months, we're going to see that. And it starts, obviously in many cases, with the CIO, CTO of many companies. There are definitely a lot of CIOs and CTOs on the forefront of innovation that get it, but what I'm saying is that more than 50% don't. >> So you're saying-- They're very busy in doing what they're doing today, and it hasn't hit them yet. >> To recap, you're saying by next year, 50% of CTOs or CTO equivalents, will have a clear understanding of what blockchain is-- >> Absolutely. >> And what it can do. >> Absolutely. >> Nithin, your prediction, next year, this time, what's different, what's new, what's the prediction? >> So, one of the key things that I think is going to happen is there's going to be a lot more training, and knowledge that's going to spread out, so that a lot more people understand, what blockchain is and what bitcoin is. Even now, as Al said, he was telling about CTOs, if the CTOs are, that's the state, that they can't spell blockchain, imagine where the real common man is. You've got people like Jamie Dimon coming on TV and saying he doesn't like Bitcoin, but he likes blockchain. I'm like, what the heck is he saying? That he likes a database? >> He was selling it short 100% (chuckles) >> Yeah, he likes a database. And then you have Warren Buffett coming over there-- >> Rat poison. >> And then this is rat poison. And like my question is, does any of his funds buy gold? Do they buy gold? He was telling that this is only worth as much as the next buy buying at a higher price. >> What's Warren Buffett's best tech investment? >> I don't know, I think he bought Apple, he started buying Apple now, right? When it's reached a thousand bucks? Or it reached a trillion dollars or close to that, or 750 billion? >> The Apple buy was 2006. If you were there, then you were good. >> Yeah, but-- >> So, your prediction? >> Market wise I don't know, what's going to happen? I'm expecting this, the crypto, the utility token, or the crypto market, to be at least a six trillion dollar business. But it'll happen next year? Definitely not. But I've been proven wrong, like I was expecting it to happen by 2025, but then it went to 750 billion by December. Well, it's not too far. >> You did get the prediction right, in the Bahamas at POLYCON18, about the drop around the tax consequences of the-- >> Right. >> People slinging trades around, not knowing the tax consequences. >> Right, right. We don't know because, who knows? Because what is going on over there, is IRS is still saying it's a property. That's what the last (slurs) is. SEC is saying it is all equity, and the CFTC was saying it's commodity. So what tax do I pay? >> Okay, lightning round question, 'cause I want to, one more popped in my head. The global landscape, from an investor standpoint, the US, we know what's going on in the US, accredited, SEC is throwing, firing across, bullets across the bow of the boats, kind of holding people in line. What percentage of US big investors will be overseas by next year? >> Percentage of-- >> Having, meaning having deals being done, proxy deals being down outside the US, what percentage? >> It's still going to be low though. That is going to be low, because that, I don't think the US investor, means the large scale of those investors-- >> You don't think the big funds will co-locate outside the US? >> There will be some, but not enough. >> Put a number, a percentage. >> Percentage-wise I think it's still going to be less than 10%. >> Al, your prediction? >> In terms of investment? >> Investment, investors saying hey, I got money here, I want to put it out there. >> Outside of the United States? >> Share money, not move their whole fund, but do deals from a vehicle. >> Do deals outside. I think I agree with Nithin. >> Throwing darts at the board here. >> No, I'm going to clarify. There's definitely massive investment happening overseas. In some respects probably bigger than the United States. So that's not going away. If anything that's going to grow. But your question is, in terms of US entities, making abroad investments, overseas investments, versus just domestic? I think that trend doesn't necessarily change. You have the venture community, there are certain bigger venture funds that can have global operations 'cause at the end of the day, they need to have global operations, to be able to do that, and most venture funds aren't that massive, they don't have that infrastructure. So they're going to focus on their own backyard. So I don't necessarily think blockchain changes the venture mindset. It's just easier for them logistically to do due diligence on their own backyard and invest in those. >> Guys, always a pleasure. Great to see you. You guys are like friends with entourage here, great to get the update here at Blockchain Week. We get to Silicon Valley week, we'll connect up again. I'm John Furrier, here in New York, theCUBE's continuing coverage of crypto, decentralized applications, and blockchain of course, we're all over it. You'll see us all over, all of the web, all the shows. Thanks for watching. (techno music)

>> Voiceover: From New York, it's theCUBE, covering Blockchain Week. Now, here's John Furrier. >> Hello and welcome to exclusive CUBE coverage here in New York City for Blockchain Week, NY Blockchain Week New York City. CUBE's coverage continues with cryptocurrency, decentralized internet, the applications of blockchain. Our next guest is Richard Rofe, who's the co-found partner of Arcadia Crypto Ventures. Welcome to this CUBE conversation. >> Thanks, good to be here. >> So when you're in that neck of the woods, New York City, obviously Wall Street, you know, they traded across the wall in the old days, and then it became now the Wall Street, it's changing. We're seeing crypto and token economics really driving the entrepreneurial energy, both on start-ups, as well as in the capital market. And you guys are on the front end of that, with some awesome investments advisory. And what's the craze all about? I mean, you have more practical view, your firm, conservative and also aggressive. What's your take? >> Well, first off, I'm a little older than most of the guys in the space, so I have a different perspective. I did come from Wall Street prior to this, I ran a hedge fund for 12 years, and before that I was basically an entrepreneur my whole life, software and other things. So, I looked at this a little differently, than probably some of the younger guys do. I've kind of seen this before? I think I saw it with the internet. And I think it's a world-changing shift, and we're an early part of it. We've been in for a while, actually in this space forever. Cause, you know, this space isn't that old. So, six years out of 10, we've been in it from the beginning, basically. >> You know, us old guys look at the waves, these waves of innovation, we're like hanging ten on the old big surfboards, and the young kids are ninjaing up on the small board. What is the younger generation looking at? Cause they're certainly, I wish I was 20-something, this is the best wave I've seen in tech revolution coming, all the ingredients are there, the capital markets are changing radically, the technology product market is changing radically, the global landscape's changing radically, the regulatory landscape, and everything else, is a perfect storm for innovation. >> Rapid change, I got involved early around 2012, just to give you a, you know, since we're at a conference this week, and see how crowded and incredibly busy it is, takes up an entire giant hotel, and bursting into the street, when I, in 2012 when I went to the very first conference, that I attended anyway, you could fill a small room with every single person at the conference. So the growth has been insane. It is driven by younger people, but the beauty of this is it's driven by people all over the world. This is not just an American thing. This is a worldwide thing. This is a shift, a technology shift that I don't think we've seen since basically the advent of the internet itself. >> You know, there's an old expression, both sides of the table, you've been an entrepreneur, you've been an investor. A hedge fund is almost the third side of the table, it's like 3D chess almost, you are now playing in the crypto world. Being an entrepreneur, you've been there, done that, hedge fund you had to run money and make great investments. Now, with this new crypto phase, how are you looking at it? Because you have the experience, you can see the growth in the younger generation, new disruptive people literally just flying blind, just going crazy with some good stuff. How are you managing that? How do you look at the marketplace, how do you make your bets? >> Good question. It's difficult. First of all, the barrier to entry is low. At this time, anyone who understands technology is really getting involved, and for good reason, but therefore you have, hundreds and hundreds of deals that come your way on a weekly basis. So you have to really pick and choose through the ones that are interesting. And you apply the same techniques that you applied as an entrepreneur and an investor prior to that, you look at the underlying business, the area that the blockchain will disrupt, change, shift, how it will do it, how long it will last, and how many people will be interested in it. And if you find the ones that are attractive and interesting, then you find the team that's attractive and interesting. That's the big point, is that you really want to have a very good team, you care so much about their background, their technology background, as well as their business background. If you can put those things together, you have a winning investment, and then you try to do it. >> You and I were talking before you came on camera... crowd sales and Kickstarter, Gofundme, as great ways to get capital. But now there's really no liquidity there. Talk about the dynamics because I think, you know, traditional investors in this market say "hmm", and there's so much more coming that'll create more stability obviously. We see some of that, I'll get to that in a second. But I want to get your take on, from an investor standpoint, the notion of liquidity, and also an entrepenuer's standpoint, access to capital. Talk about the dynamics between access to capital and liquidity for the investors and for the entrepreneurs. >> Also great points. I mean, right now, we have something that is giving both things, right? Access to capital, worldwide access to capital, from the smallest investor to the biggest investor, everybody has an opportunity, where before it was really limited, and then you have liquidity in that if you have a token or a coin, that's tradable, whether it's on an exchange, or private trade, you can actually liquidify your investment. Where if you were in a private company in the past, and I've done many of those, you're locked in. You're kind of at the mercy of the organizers of the company, whoever they are, the people that run the business. And you're kind of stuck there, good or bad. In this case, you have the ability to trade in and out, just as you would with a public stock. >> So you can get some liquidity in the front end, while private still, so it's kind of like a little liquidity market. I want you to address a question that's come up, an observation that we've made on theCUBE. We were at the Bahamas at Polycon 18, Puerto Rico. Not in the US, is New York or New York City the capital, you know, of money, that's where money never sleeps, so to speak, Gordon Gekko would say, in the old Wall Street quote. But this is a global phenomenon. We're outside of the United States, there's a lot of action. Let's talk about the role of global money. >> Well, that's part of the excitement of the whole thing. It's not just the United States. It's all over the world, so it's really democratized investing, it's democratized finance, it's changing the landscape completely. And I think that it's unstoppable. I do think that regulation, and I know we talked about that earlier too, is a good thing. I think that regulation is necessary, because you can't just have a rogue environment completely, but on the other hand too much regulation kills things. So there has to be a happy medium and hopefully they'll find that. >> I love the invisible hand strategy, and certainly let capital take, but you want to have some signaling, SSC's been doing that. I just don't think it's stoppable in my opinion. But I want to go shift to where entrepreneurs are looking at the capital markets. Today the choices are bootstrap, friends and family, small sized business, cash flow business if you will, or go venture capital or private equity, if you have the kind of multiples that would warrant that, assuming the sector is in vogue at the moment. Which, you know, always a coin flip. Here, with token economics, there's a huge access to capital. Bubble we're seeing certainly is reflected in that. What are you looking for, when you see that kind of behavior? How do you manage the risk, how are entrepreneurs navigating that world? >> First of all, managing the risk, it's tough obviously. Especially as I mentioned earlier, there's so many deals coming at you at all times, so you have to choose wisely, that's the first way to manage risk. Always was the way to manage risk. People used to ask me in the hedge fund business, how do you manage your risk? Well, I only try to invest in the things that I think have the best upside, and the smallest downside, it was pretty simple. And it's the same here. It comes down to at the end of the day, what businesses are you choosing? The other thing is that, you know, first of all there's inherent risk. You can never get around that fact. But if you really believe in the long-term future, and you're willing to go through some ups and downs, and there are going to be, and there have been, as we know, over the past 10 years, and there will be more in the future. You have to be willing to ride those waves. And if you can do that, then I think your risk will just mitigate over time, as long as you're a smart, wise investor, and of course spreading it around. You don't want to be in, you know, all your eggs in one basket, then you'll take a giant risk. >> Yeah, it's one of those things where you don't want to zig when you should have zagged, with all this going on. It's certainly a turbulent landscape, I've heard phrases like, it's like wet cement, you don't know when it's going to form, all these kinds of phrases. So the question I want to ask you is, what do you look for? What are you looking at, what signals are you trying to synthesize, what's the tea leaves that you're reading, what're you looking at? What's concerning you, what are some tell signs that are going to help you navigate the investment side and advisory side? >> With regard to the entire space, we're looking very much at regulation, we want to know what the regulators want. I'm not sure they know what they want. We speak to them, we keep them pressed on the situation from our end, and we hear back from them on with their thinking. We'd like to see some regulation over time, but it's complicated because they don't even know what they're looking at yet. That's a big part of it. They're not sure how to regulate something that they don't understand. And there are very few people in this space, and this is one of the biggest risks. There are very few people that even do understand it, and are in this maze. >> I was telling an entrepreneur just here today, and then last week, it's in the Bay Area in California, they're more progressive than their suppliers, their law firm, and some of their accounting help. They're more progressive on the front end, they're actually advising the law firm on deals. >> And that has happened, that's happened with us, in fact we've recently put a structure together, where we taught the law firm how to do it, the law firm was impressed with it. They had to go study it, they spent a few weeks, and they came back and said "Hey, this is a great idea, we're going to do this with everybody else going forward." And that basically came from us backwards. >> Did they bill you for those hours, or did you charge them? >> Great question, I really hope not. I'm going to ask my partner if we got billed for anything. >> Rich, I want to ask about blockchain, we got to see Consensus 2018, it's happening here in New York, big event, part of CoinDesk too, they're doing a great job, content program's been solid. It's been super crowded, they need a bigger venue obviously, the demand was high and sold out. And I know there's a lot of side events going on, a lot of activity. What is your take away, what do you look this as saying? Is it like, wow, what's your take on the impact of the momentum? >> Well, first of all, as I mentioned before, I saw this thing with my own eyes, right, from a little tiny room in Las Vegas, was the entire conference, to what we saw today. With people in the streets who can't even get in, thousands and thousands of people in one hotel, which is probably not even cut out for that many. I think it's incredible, the momentum says a lot, by the way, talking about mitigating risk, there's not just so many people, there's so many smart people, that are figuring this out, one by one, and getting involved early. And that really gives me a lot of confidence, in terms of the long-term strategy. If this thing grew by, you know, two or three times, four or five times what I saw in 2012, I would not be nearly as excited. What I'm seeing here, this mass load of people, who are fighting to get into an event, right, into a venue, and the intelligence, and the kind of people they are, and how educated they are, it really gives me hope. And it reminds me, of early days in the internet, where we saw the super smartest people, kind of broke away from the crowd, did their own thing. We saw guys leaving traditional firms, going and starting companies, the Amazons, the Googles, the Facebooks, and things of that nature, which became the largest companies in the world. >> And there were problems there too. You had back-dating stock options, you had all these deals where revenue is revenue, and then accounting issues, but again all that is just a symptom of a growth market. Final question for you, when you look at what you guys are doing, and how you're investing, how you're getting involved in companies, you're also an advisor to Bloq which is having an event here in New York City. How are you navigating the hiring, the partnership, the community aspect, as in the financial community, like the entrepreneurial community, there's a tight-knit bond. How is it evolving, how are you guys shaping that, what are some of the things you can share around the financial community? >> Well, we do advisory work, so we work with a lot of different clients that want to get into the space. We work with some very traditional clients, that are not really technologists, and those are the most interesting ones. They're difficult, because they don't understand a lot of it, and I don't blame them, I come from that world too. So, we have to really hold their hand, and we deal with a lot of very smart tech people who come from a whole other, but don't know the business side so well, so we kind of work with both. In terms of our own hiring, and who we bring on to our company, we really look for a very unique person, which is, usually in this case a younger, because of the space itself, we look for everybody, but we don't find that many people my age and older, that even want to spend time, let alone understand it. >> Some smart kid "I don't want to work at Goldman Sachs, they're old." >> Listen, and again, we saw this in the internet, you could not get a smart kid out of college to get a regular job back in the Nineties. They were all going to Web startups. Kind of same thing here. So we have a great pool to choose from, we try to pick people that are on the cutting-edge, but that also want to work hard. Because, again, it's a start-up industry, right? So, think about the hours, you know, you're really going to put in a lot more than you would at a nine-to-five job. Your weekend, nights, you know, the phone, you're connected 24/7. But the hiring's been, uh, we have a staff of about six people, and I think they're great, but we do hand-pick them and it takes a while. >> Take a minute to explain what you guys do, how many investments you've made, you've been there early, the year 2012 you mentioned, early on. >> I started in 2012 in terms of in just the space itself, due to my friend Matt Roszac at Bloq, who was really early, a year ahead of me there, and he got me involved, but I didn't really start making serious investments. My first investment was in 2014, we invested in a settlement and clearing house company, that's now one of the fastest growing banks in the country, and then we got into some of the coins, and some of the platforms, that's where we invest the most, and a few deals here and there. And then we started to do advisory work, because let's face it, we knew what we were doing, we were ahead of the curve, we certainly understood it, and so many people want to get into something that they don't know, they're going to need someone to hold their hand all the way through. So, our advisory business is our main stable business, and then we invest into certain deals that we think are interesting, a lot of them are platforms. >> Yeah, and token economics is driving all that. Richard, thanks for coming on, appreciate taking the time to come on CUBE, I'm John Furrier, we're here at New York City for Blockchain Week New York, and this is theCUBE exclusively continuing coverage of the cryptocurrency craze, token economics, obviously blockchains enabling technology underneath it, and the whole new Internet infrastructure is transforming with cloud, everything behind it's really exciting. Thanks for watching.