>>Hello, everyone. Welcome to the cubes presentation of the 80, but startup showcases MarTech is the focus. And this is all about the emerging cloud scale customer experience. This is season two, episode three of the ongoing series covering the exciting, fast growing startups from the cloud AWS ecosystem to talk about the future and what's available now, where are the actions? I'm your host John fur. Today. We joined by Cub alumni, Jerry Chen partner at Greylock ventures. Jerry. Great to see you. Thanks for coming on, >>John. Thanks for having me back. I appreciate you welcome there for season two. Uh, as a, as a guest star, >><laugh>, you know, Hey, you know, season two, it's not a one and done it's continued coverage. We, we got the episodic, uh, cube flicks model going >>Here. Well, you know, congratulations, the, the coverage on this ecosystem around AWS has been impressive, right? I think you and I have talked a long time about AWS and the ecosystem building. It just continues to grow. And so the coverage you did last season, all the events of this season is, is pretty amazing from the data security to now marketing. So it's, it's great to >>Watch. And 12 years now, the cube been running. I remember 2013, when we first met you in the cube, we just left VMware just getting into the venture business. And we were just riffing the next 80. No one really kind of knew how big it would be. Um, but we were kinda riffing on. We kind of had a sense now it's happening. So now you start to see every vertical kind of explode with the right digital transformation and disruption where you see new incumbents. I mean, new Newton brands get replaced the incumbent old guard. And now in MarTech, it's ripe for, for disruption because web two has gone on to web 2.5, 3, 4, 5, um, cookies are going away. You've got more governance and privacy challenges. There's a slew of kind of ad tech baggage, but yet lots of new data opportunities. Jerry, this is a huge, uh, thing. What's your take on this whole MarTech cloud scale, uh, >>Market? I, I think, I think to your point, John, that first the trends are correct and the bad and the good or good old days, the battle days MarTech is really about your webpage. And then email right there. There's, there's the emails, the only channel and the webpage was only real estate and technology to care about fast forward, you know, 10 years you have webpages, mobile apps, VR experiences, car experiences, your, your, your Alexa home experiences. Let's not even get to web three web 18, whatever it is. Plus you got text messages, WhatsApp, messenger, email, still great, et cetera. So I think what we've seen is both, um, explosion and data, uh, explosion of channel. So sources of data have increases and the fruits of the data where you can reach your customers from text, email, phone calls, etcetera have exploded too. So the previous generation created big company responses, Equa, you know, that exact target that got acquired by Oracle or, or, um, Salesforce, and then companies like, um, you know, MailChimp that got acquired as well, but into it, you're seeing a new generation companies for this new stack. So I, I think it's exciting. >>Yeah. And you mentioned all those things about the different channels and stuff, but the key point is now the generation shifts going on, not just technical generation, uh, and platform and tools, it's the people they're younger. They don't do email. They have, you know, proton mail accounts, zillion Gmail accounts, just to get the freebie. Um, they're like, they're, they'll do subscriptions, but not a lot. So the generational piece on the human side is huge. Okay. And then you got the standards, bodies thrown away, things like cookies. Sure. So all this is makes it for a complicated, messy situation. Um, so out of this has to come a billion dollar startup in my mind, >>I, I think multiple billion dollars, but I think you're right in the sense that how we want engage with the company branch, either consumer brands or business brands, no one wants to pick a phone anymore. Right? Everybody wants to either chat or DM people on Twitter. So number one, the, the way we engage is different, both, um, where both, how like chat or phone, but where like mobile device, but also when it's the moment when we need to talk to a company or brand be it at the store, um, when I'm shopping in real life or in my car or at the airport, like we want to reach the brands, the brands wanna reach us at the point of decision, the point of support, the point of contact. And then you, you layer upon that the, the playing field, John of privacy security, right? All these data silos in the cloud, the, the, the, the game has changed and become even more complicated with the startup. So the startups are gonna win. Will do, you know, the collect, all the data, make us secure in private, but then reach your customers when and where they want and how they want it. >>So I gotta ask you, because you had a great podcast just this week, published and snowflake had their event going on the data cloud, there's a new kind of SAS platform vibe going on. You're starting to see it play out. Uh, and one of the things I, I noticed on your podcast with the president of Hashi Corp, who was on people should listen to that podcast. It's on gray matter, which is the Greylocks podcast, uh, plug for you guys. He mentioned he mentions the open source dynamic, right? Sure. And, and I like what he, things, he said, he said, software business has changed forever. It's my words. Now he said infrastructure, but I'm saying software in general, more broader infrastructure and software as a category is all open source. One game over no debate. Right. You agree? >>I, I think you said infrastructure specifically starts at open source, but I would say all open source is one more or less because open source is in every bit of software. Right? And so from your operating system to your car, to your mobile phone, open source, not necessarily as a business model or, or, or whatever, we can talk about that. But open source as a way to build software distribute, software consume software has one, right? It is everywhere. So regardless how you make money on it, how you build software, an open source community ha has >>One. Okay. So let's just agree. That's cool. I agree with that. Let's take it to the next level. I'm a company starting a company to sell to big companies who pay. I gotta have a proprietary advantage. There's gotta be a way. And there is, I know you've talked about it, but I have my opinion. There is needs to be a way to be proprietary in a way that allows for that growth, whether it's integration, it's not gonna be on software license or maybe support or new open source model. But how does startups in the MarTech this area in general, when they disrupt or change the category, they gotta get value creation going. What's your take on, on building. >>You can still build proprietary software on top of open source, right? So there's many companies out there, um, you know, in a company called rock set, they've heavily open source technology like Rock's DB under the hood, but they're running a cloud database. That's proprietary snowflake. You talk about them today. You know, it's not open source technology company, but they use open source software. I'm sure in the hoods, but then there's open source companies, data break. So let's not confus the two, you can still build proprietary software. There's just components of open source, wherever we go. So number one is you can still build proprietary IP. Number two, you can get proprietary data sources, right? So I think increasingly you're seeing companies fight. I call this systems intelligence, right, by getting proprietary data, to train your algorithms, to train your recommendations, to train your applications, you can still collect data, um, that other competitors don't have. >>And then it can use the data differently, right? The system of intelligence. And then when you apply the system intelligence to the end user, you can create value, right? And ultimately, especially marketing tech, the highest level, what we call the system of engagement, right? If, if the chat bot the mobile UI, the phone, the voice app, etcetera, if you own the system of engagement, be a slack, or be it, the operating system for a phone, you can also win. So still multiple levels to play John in multiple ways to build proprietary advantage. Um, just gotta own system record. Yeah. System intelligence, system engagement. Easy, right? Yeah. >>Oh, so easy. Well, the good news is the cloud scale and the CapEx funded there. I mean, look at Amazon, they've got a ton of open storage. You mentioned snowflake, but they're getting a proprietary value. P so I need to ask you MarTech in particular, that means it's a data business, which you, you pointed out and we agree. MarTech will be about the data of the workflows. How do you get those workflows what's changing and how these companies are gonna be building? What's your take on it? Because it's gonna be one of those things where it might be the innovation on a source of data, or how you handle two parties, ex handling encrypted data sets. I don't know. Maybe it's a special encryption tool, so we don't know what it is. What's your what's, what's your outlook on this area? >>I, I, I think that last point just said is super interesting, super genius. It's integration or multiple data sources. So I think either one, if it's a data business, do you have proprietary data? Um, one number two with the data you do have proprietary, not how do you enrich the data and do you enrich the data with, uh, a public data set or a party data set? So this could be cookies. It could be done in Brad street or zoom info information. How do you enrich the data? Number three, do you have machine learning models or some other IP that once you collected the data, enriched the data, you know, what do you do with the data? And then number four is once you have, um, you know, that model of the data, the customer or the business, what do you deal with it? Do you email, do you do a tax? >>Do you do a campaign? Do you upsell? Do you change the price dynamically in our customers? Do you serve a new content on your website? So I think that workflow to your point is you can start from the same place, what to do with the data in between and all the, on the out the side of this, this pipeline is where a MarTech company can have then. So like I said before, it was a website to an email go to website. You know, we have a cookie fill out a form. Yeah. I send you an email later. I think now you, you can't just do a website to email, it's a website plus mobile apps, plus, you know, in real world interaction to text message, chat, phone, call Twitter, a whatever, you know, it's >>Like, it's like, they're playing checkers in web two and you're talking 3d chess. <laugh>, I mean, there's a level, there's a huge gap between what's coming. And this is kind of interesting because now you mentioned, you know, uh, machine learning and data, and AI is gonna factor into all this. You mentioned, uh, you know, rock set. One of your portfolios has under the hood, you know, open source and then use proprietary data and cloud. Okay. That's a configuration, that's an architecture, right? So architecture will be important in terms of how companies posture in this market, cuz MarTech is ripe for innovation because it's based on these old technologies, but there's tons of workflows, but you gotta have the data. Right. And so if I have the best journey map from a client that goes to a website, but then they go and they do something in the organic or somewhere else. If I don't have that, what good is it? It's like a blind spot. >>Correct. So I think you're seeing folks with the data BS, snowflake or data bricks, or an Amazon that S three say, Hey, come to my data cloud. Right. Which, you know, Snowflake's advertising, Amazon will say the data cloud is S3 because all your data exists there anyway. So you just, you know, live on S3 data. Bricks will say, S3 is great, but only use Amazon tools use data bricks. Right. And then, but on top of that, but then you had our SaaS companies like Oracle, Salesforce, whoever, and say, you know, use our qua Marketo, exact target, you know, application as a system record. And so I think you're gonna have a battle between, do I just work my data in S3 or where my data exists or gonna work my data, some other application, like a Marketo Ella cloud Z target, um, or, you know, it could be a Twilio segment, right. Was combination. So you'll have this battle between these, these, these giants in the cloud, easy, the castles, right. Versus, uh, the, the, the, the contenders or the, or the challengers as we call >>'em. Well, great. Always chat with the other. We always talk about castles in the cloud, which is your work that you guys put out, just an update on. So check out greylock.com. They have castles on the cloud, which is a great thesis on and a map by the way ecosystem. So you guys do a really good job props to Jerry and the team over at Greylock. Um, okay. Now I gotta ask kind of like the VC private equity sure. Market question, you know, evaluations. Uh, first of all, I think it's a great time to do a startup. So it's a good time to be in the VC business. I think the next two years, you're gonna find some nice gems, but also you gotta have that cleansing period. You got a lot of overvaluation. So what happened with the markets? So there's gonna be a lot of M and a. So the question is what are some of the things that you see as challenges for product teams in particular that might have that killer answer in MarTech, or might not have the runway if there's no cash, um, how do people partner in this modern era, cuz scale's a big deal, right? Mm-hmm <affirmative> you can measure everything. So you get the combination of a, a new kind of M and a market coming, a potential growth market for the right solution. Again, value's gotta be be there. What's your take on this market? >>I, I, I think you're right. Either you need runway, so cash to make it through, through this next, you know, two, three years, whatever you think the market Turmo is or two, you need scale, right? So if you're at a company of scale and you have enough data, you can probably succeed on your own. If not, if you're kind of in between or early to your point, either one focus, a narrower wedge, John, just like we say, just reduce the surface area. And next two years focus on solving one problem. Very, very well, or number two in this MarTech space, especially there's a lot of partnership and integration opportunities to create a complete solution together, to compete against kind of the incumbents. Right? So I think they're folks with the data, they're folks doing data, privacy, security, they're post focusing their workflow or marketing workflows. You're gonna see either one, um, some M and a, but I definitely can see a lot of Coopers in partnership. And so in the past, maybe you would say, I'm just raise another a hundred million dollars and do what you're doing today. You might say, look, instead of raising more money let's partner together or, or merge or find a solution. So I think people are gonna get creative. Yeah. Like said scarcity often is good. Yeah. I think forces a lot more focus and a lot more creativity. >>Yeah. That's a great point. I'm glad you brought that up up. Cause I didn't think you were gonna go there. I was gonna ask that biz dev activity is going to be really fundamental because runway combined with the fact that, Hey, you know, if you know, get real or you're gonna go under is a real issue. So now people become friends. They're like, okay, if we partner, um, it's clearly a good way to go if you can get there. So what advice would you give companies? Um, even most experienced, uh, founders and operators. This is a different market, right? It's a different kind of velocity, obviously architectural data. You mentioned some of those key things. What's the posture to partner. What's your advice? What's the combat man manual to kind of compete in this new biz dev world where some it's a make or break time, either get the funding, get the customers, which is how you get funding or you get a biz dev deal where you combine forces, uh, go to market together or not. What's your advice? >>I, I think that the combat manual is either you're partnering for one or two things, either one technology or two customers or sometimes both. So it would say which partnerships, youre doing for technology EG solution completers. Like you have, you know, this puzzle piece, I have this puzzle piece data and data privacy and let's work together. Um, or number two is like, who can help you with customers? And that's either a, I, they can be channel for you or, or vice versa or can share customers and you can actually go to market together and find customers jointly. So ideally you're partner for one, if not the other, sometimes both. And just figure out where in your life cycle do you need? Um, friends. >>Yeah. Great. My final question, Jerry, first of all, thanks for coming on and sharing your in insight as usual. Always. Awesome final question for the folks watching that are gonna be partnering and buying product and services from these startups. Um, there's a select few great ones here and obviously every other episode as well, and you've got a bunch you're investing in this, it's actually a good market for the ones that are lean companies that are lean and mean have value. And the cloud scale does provide that. So a lot of companies are getting it right, they're gonna break through. So they're clearly gonna be getting customers the buyer side, how should they be looking through the lens right now and looking at companies, what should they look for? Um, and they like to take chances with seeing that. So it's not so much, they gotta be vetted, but you know, how do they know the winners from the pretenders? >>You know, I, I think the customers are always smart. I think in the, in the, in the past in market market tech, especially they often had a budget to experiment with. I think you're looking now the customers, the buyer technologies are looking for a hard ROI, like a return on investment. And before think they might experiment more, but now they're saying, Hey, are you gonna help me save money or increase revenue or some hardcore metric that they care about? So I think, um, the startups that actually have a strong ROI, like save money or increased revenue and can like point empirically how they do that will, will, you know, rise to the top of, of the MarTech landscape. And customers will see that they're they're, the customers are smart, right? They're savvy buyers. They, they, they, they, they can smell good from bad and they're gonna see the strong >>ROI. Yeah. And the other thing too, I like to point out, I'd love to get your reaction real quick is a lot of the companies have DNA, any open source or they have some community track record where communities now, part of the vetting. I mean, are they real good people? >>Yeah. I, I think open stores, like you said, in the community in general, like especially all these communities that move on slack or discord or something else. Right. I think for sure, just going through all those forums, slack communities or discord communities, you can see what's a good product versus next versus bad. Don't go to like the other sites. These communities would tell you who's working. >>Well, we got a discord channel on the cube now had 14,000 members. Now it's down to six, losing people left and right. We need a moderator, um, to get on. If you know anyone on discord, anyone watching wants to volunteer to be the cube discord, moderator. Uh, we could use some help there. Love discord. Uh, Jerry. Great to see you. Thanks for coming on. What's new at Greylock. What's some of the things happening. Give a quick plug for the firm. When you guys working on, I know there's been some cool things happening, new investments, people moving. >>Yeah. Look we're we're Greylock partners, seed series a firm. I focus at enterprise software. I have a team with me that also does consumer investing as well as crypto investing like all firms. So, but we're we're seed series a occasionally later stage growth. So if you're interested, uh, FA me@jkontwitterorjgreylock.com. Thank you, John. >>Great stuff, Jerry. Thanks for coming on. This is the Cube's presentation of the, a startup showcase. MarTech is the series this time, emerging cloud scale customer experience where the integration and the data matters. This is season two, episode three of the ongoing series covering the hottest cloud startups from the ADWS ecosystem. Um, John farrier, thanks for watching.

(gentle music) >> From the Cube Studios in Palo Alto and Boston, connecting with thought leaders all around the world. This is theCube Conversation. >> Hi everybody, this is Dave Vellante, we're back at Cube on Cloud, and with me is Muddu Sudhakar. He's a long time alum of theCube, a technologist and executive, a serial entrepreneur and an investor. Welcome my friend, good to see you. >> Good to see you, Dave. Pleasure to be with you. Happy elections, I guess. >> Yeah, yeah. So I wanted to start, this work from home, pivot's been amazing, and you've seen the enterprise collaboration explode. I wrote a piece a couple months ago, looking at valuations of various companies, right around the snowflake IPO, I want to ask you about that, but I was looking at the valuations of various companies, at Spotify, and Shopify, and of course Zoom was there. And I was looking at just simple revenue multiples, and I said, geez, Zoom actually looks, might look undervalued, which is crazy, right? And of course the stock went up after that, and you see teams, Microsoft Teams, and Microsoft doing a great job across the board, we've written about that, you're seeing Webex is exploding, I mean, what do you make of this whole enterprise collaboration play? >> No, I think the look there is a trend here, right? So I think this probably trend started before COVID, but COVID is going to probably accelerate this whole digital transformation, right? People are going to work remotely a lot more, not everybody's going to come back to the offices even after COVID, so I think this whole collaboration through Slack, and Zoom, and Microsoft Teams and Webex, it's going to be the new game now, right? Both the video, audio and chat solutions, that's really going to help people like eyeballs. You're not going to spend time on all four of them, right? It's like everyday from a consumer side, you're going to spend time on your Gmail, Facebook, maybe Twitter, maybe Instagram, so like in the consumer side, on your personal life, you have something on the enterprise. The eyeballs are going to be in these platforms. >> Yeah. Well. >> But we're not going to take everything. >> Well, So you are right, there's a permanence to this, and I got a lot of ground to cover with you. And I always like our conversations mood because you tell it like it is, I'm going to stay on that work from home pivot. You know a lot about security, but you've seen three big trends, like mega trends in security, Endpoint, Identity Access Management, and Cloud Security, you're seeing this in the stock prices of companies like CrowdStrike, Zscaler, Okta- >> Right >> Sailpoint- >> Right, I mean, they exploded, as a result of the pandemic, and I think I'm inferring from your comment that you see that as permanent, but that's a real challenge from a security standpoint. What's the impact of Cloud there? >> No, it isn't impact but look, first is all the services required to be Cloud, right? See, the whole ideas for it to collaborate and do these things. So you cannot be running an application, like you can't be running conference and SharePoint oN-Prem, and try to on a Zoom and MS teams. So that's why, if you look at Microsoft is very clever, they went with Office 365, SharePoint 365, now they have MS Teams, so I think that Cloud is going to drive all these workloads that you have been talking about a lot, right? You and John have been saying this for years now. The eruption of Cloud and SAS services are the vehicle to drive this next-generation collaboration. >> You know what's so cool? So Cloud obviously is the topic, I wonder how you look at the last 10 years of Cloud, and maybe we could project forward, I mean the big three Cloud vendors, they're running it like $20 billion a quarter, and they're growing collectively, 35, 40% clips, so we're really approaching a hundred billion dollars for these three. And you hear stats like only 20% of the workloads are in the public Cloud, so it feels like we're just getting started. How do you look at the impact of Cloud on the market, as you say, the last 10 years, and what do you expect going forward? >> No, I think it's very fascinating, right? So I remember when theCube, you guys are talking about 10 years back, now it's been what? More than 10 years, 15 years, since AWS came out with their first S3 service back in 2006. >> Right. >> Right? so I think look, Cloud is going to accelerate even more further. The areas is going to accelerate is for different reasons. I think now you're seeing the initial days, it's all about startups, initial workloads, Dev test and QA test, now you're talking about real production workloads are moving towards Cloud, right? Initially it was backup, we really didn't care for backup they really put there. Now you're going to have Cloud health primary services, your primary storage will be there, it's not going to be an EMC, It's not going to be a NetApp storage, right? So workloads are going to shift from the business applications, and these business applications, will be running on the Cloud, and I'll make another prediction, make customer service and support. Customer service and support, again, we should be running on the Cloud. You're not want to run the thing on a Dell server, or an IBM server, or an HP server, with your own hosted environment. That model is not because there's no economies of scale. So to your point, what will drive Cloud for the next 10 years, will be economies of scale. Where can you take the cost? How can I save money? If you don't move to the Cloud, you won't save money. So all those workloads are going to go to the Cloud are people who really want to save, like global gradual custom, right? If you stay on the ASP model, a hosted, you're not going to save your costs, your costs will constantly go up from a SaaS perspective. >> So that doesn't bode well for all the On-prem guys, and you hear a lot of the vendors that don't own a Cloud that talk about repatriation, but the numbers don't support that. So what do those guys do? I mean, they're talking multi-Cloud, of course they're talking hybrid, that's IBM's big play, how do you see it? >> I think, look, see there, to me, multi-Cloud makes sense, right? You don't want one vendor that you never want to get, so having Amazon, Microsoft, Google, it gives them a multi-Cloud. Even hybrid Cloud does make sense, right? There'll be some workloads. It's like, we are still running On-prem environment, we still have mainframe, so it's never going to be a hundred percent, but I would say the majority, your question is, can we get to 60, 70, 80% workers in the next 10 years? I think you will. I think by 2025, more than 78% of the Cloud Migration by the next five years, 70% of workload for enterprise will be on the Cloud. The remaining 25, maybe Hybrid, maybe On-prem, but I get panics, really doesn't matter. You have saved and part of your business is running on the Cloud. That's your cost saving, that's where you'll see the economies of scale, and that's where all the growth will happen. >> So square the circle for me, because again, you hear the stat on the IDC stat, IBM Ginni Rometty puts it out there a lot that only 20% of the workloads are in the public Cloud, everything else is On-prem, but it's not a zero sum game, right? I mean the Cloud native stuff is growing like crazy, the On-prem stuff is flat to down, so what's going to happen? When you talk about 70% of the workloads will be in the Cloud, do you see those mission critical apps and moving into the car, I mean the insurance companies going to put their claims apps in the Cloud, or the financial services companies going to put their mission critical workloads in the Cloud, or they just going to develop new stuff that's Cloud native that is sort of interacts with the On-prem. How do you see that playing out? >> Yeah, no, I think absolutely, I think a very good question. So two things will happen. I think if you take an enterprise, right? Most businesses what they'll do is the workloads that they should not be running On-prem, they'll move it up. So obviously things like take, as I said, I use the word SharePoint, right? SharePoint and conference, all the knowledge stuff is still running on people's data centers. There's no reason. I understand, I've seen statistics that 70, 80% of the On-prem for SharePoint will move to SharePoint on the Cloud. So Microsoft is going to make tons of money on that, right? Same thing, databases, right? Whether it's CQL server, whether there is Oracle database, things that you are running as a database, as a Cloud, we move to the Cloud. Whether that is posted in Oracle Cloud, or you're running Oracle or Mongo DB, or Dynamo DB on AWS or SQL server Microsoft, that's going to happen. Then what you're talking about is really the App concept, the applications themselves, the App server. Is the App server is going to run On-prem, how much it's going to laureate outside? There may be a hybrid Cloud, like for example, Kafka. I may use a Purse running on a Kafka as a service, or I may be using Elasticsearch for my indexing on AWS or Google Cloud, but I may be running my App locally. So there'll be some hybrid place, but what I would say is for every application, 75% of your Comprende will be on the Cloud. So think of it like the Dev. So even for the On-prem app, you're not going to be a 100 percent On-prem. The competent, the billing materials will move to the Cloud, your Purse, your storage, because if you put it On-prem, you need to add all this, you need to have all the whole things to buy it and hire the people, so that's what is going to happen. So from a competent perspective, 70% of your bill of materials will move to the Cloud, even for an On-prem application. >> So, Of course, the susification of the industry in the last decade and in my three favorite companies last decade, you've worked for two of them, Tableau, ServiceNow, and Splunk. I want to ask you about those, but I'm interested in the potential disruption there. I mean, you've got these SAS companies, Salesforce of course is another one, but they can't get started in 1999. What do you see happening with those? I mean, we're basically building these sort of large SAS, platforms, now. Do you think that the Cloud native world that developers can come at this from an angle where they can disrupt those companies, or are they too entrenched? I mean, look at service now, I mean, I don't know, $80 billion market capital where they are, they bigger than Workday, I mean, just amazing how much they've grown and you feel like, okay, nothing can stop them, but there's always disruption in this industry, what are your thoughts on that. >> Not very good with, I think there'll be disrupted. So to me actually to your point, ServiceNow is now close to a 100 billion now, 95 billion market coverage, crazy. So from evaluation perspective, so I think the reason they'll be disrupted is that the SAS vendors that you talked about, ServiceNow, and all this plan, most of these services, they're truly not a multi-tenant or what do you call the Cloud Native. And that is the Accenture. So because of that, they will not be able to pass the savings back to the enterprises. So the cost economics, the economics that the Cloud provides because of the multi tenancy ability will not. The second reason there'll be disrupted is AI. So far, we talked about Cloud, but AI is the core. So it's not really Cloud Native, Dave, I look at the AI in a two-piece. AI is going to change, see all the SAS vendors were created 20 years back, if you remember, was an operator typing it, I don't respond administered we'll type a Splunk query. I don't need a human to type a query anymore, system will actually find it, that's what the whole security game has changed, right? So what's going to happen is if you believe in that, that AI, your score will disrupt all the SAS vendors, so one angle SAS is going to have is a Cloud. That's where you make the Cloud will take up because a SAS application will be Cloudified. Being SAS is not Cloud, right? Second thing is SAS will be also, I call it, will be AI-fied. So AI and machine learning will be trying to drive at the core so that I don't need that many licenses. I don't need that many humans. I don't need that many administrators to manage, I call them the tuners. Once you get a driverless car, you don't need a thousand tuners to tune your Tesla, or Google Waymo car. So the same philosophy will happen is your Dev Apps, your administrators, your service management, people that you need for service now, and these products, Zendesk with AI, will tremendously will disrupt. >> So you're saying, okay, so yeah, I was going to ask you, won't the SAS vendors, won't they be able to just put, inject AI into their platforms, and I guess I'm inferring saying, yeah, but a lot of the problems that they're solving, are going to go away because of AI, is that right? And automation and RPA and things of that nature, is that right? >> Yes and no. So I'll tell you what, sorry, you have asked a very good question, let's answer, let me rephrase that question. What you're saying is, "Why can't the existing SAS vendors do the AI?" >> Yes, right. >> Right, >> And there's a reason they can't do it is their pricing model is by number of seats. So I'm not going to come to Dave, and say, come on, come pay me less money. It's the same reason why a board and general lover build an electric car. They're selling 10 million gasoline cars. There's no incentive for me, I'm not going to do any AI, I'm going to put, I'm not going to come to you and say, hey, buy me a hundred less license next year from it. So that is one reason why AI, even though these guys do any AI, it's going to be just so I call it, they're going to, what do you call it, a whitewash, kind of like you put some paint brush on it, trying to show you some AI you did from a marketing dynamics. But at the core, if you really implement the AI with you take the driver out, how are you going to change the pricing model? And being a public company, you got to take a hit on the pricing model and the price, and it's going to have a stocking part. So that, to your earlier question, will somebody disrupt them? The person who is going to disrupt them, will disrupt them on the pricing model. >> Right. So I want to ask you about that, because we saw a Snowflake, and it's IPO, we were able to pour through its S-1, and they have a different pricing model. It's a true Cloud consumption model, Whereas of course, most SAS companies, they're going to lock you in for at least one year term, maybe more, and then, you buy the license, you got to pay X. If you, don't use it, you still got to pay for it. Snowflake's different, actually they have a different problem, that people are using it too much and the sea is driving the CFO crazy because the bill is going up and up and up, but to me, that's the right model, It's just like the Amazon model, if you can justify it, so how do you see the pricing, that consumption model is actually, you're seeing some of the On-prem guys at HPE, Dell, they're doing as a service. They're kind of taking a page out of the last decade SAS model, so I think pricing is a real tricky one, isn't it? >> No, you nailed it, you nailed it. So I think the way in which the Snowflake there, how the disruptors are data warehouse, that disrupted the open source vendors too. Snowflake distributed, imagine the playbook, you disrupted something as the $ 0, right? It's an open source with Cloudera, Hortonworks, Mapper, that whole big data that you want me to, or that market is this, that disrupting data warehouses like Netezza, Teradata, and the charging more money, they're making more money and disrupting at $0, because the pricing models by consumption that you talked about. CMT is going to happen in the service now, Zen Desk, well, 'cause their pricing one is by number of seats. People are going to say, "How are my users are going to ask?" right? If you're an employee help desk, you're back to your original health collaborative. I may be on Slack, I could be on zoom, I'll maybe on MS Teams, I'm going to ask by using usage model on Slack, tools by employees to service now is the pricing model that people want to pay for. The more my employees use it, the more value I get. But I don't want to pay by number of seats, so the vendor, who's going to figure that out, and that's where I look, if you know me, I'm right over as I started, that's what I've tried to push that model look, I love that because that's the core of how you want to change the new game. >> I agree. I say, kill me with that problem, I mean, some people are trying to make it a criticism, but you hit on the point. If you pay more, it's only because you're getting more value out of it. So I wanted to flip the switch here a little bit and take a customer angle. Something that you've been on all sides. And I want to talk a little bit about strategies, you've been a strategist, I guess, once a strategist, always a strategist. How should organizations be thinking about their approach to Cloud, it's cost different for different industries, but, back when the cube started, financial services Cloud was a four-letter word. But of course the age of company is going to matter, but what's the framework for figuring out your Cloud strategy to get to your 70% and really take advantage of the economics? Should I be Mono Cloud, Multi-Cloud, Multi-vendor, what would you advise? >> Yeah, no, I mean, I mean, I actually call it the tech stack. Actually you and John taught me that what was the tech stack, like the lamp stack, I think there is a new Cloud stack needs to come, and that I think the bottomline there should be... First of all, anything with storage should be in the Cloud. I mean, if you want to start, whether you are, financial, doesn't matter, there's no way. I come from cybersecurity side, I've seen it. Your attackers will be more with insiders than being on the Cloud, so storage has to be in the Cloud then come compute, Kubernetes. If you really want to use containers and Kubernetes, it has to be in the public Cloud, leverage that have the computer on their databases. That's where it can be like if your data is so strong, maybe run it On-prem, maybe have it on a hosted model for when it comes to database, but there you have a choice between hybrid Cloud and public Cloud choice. Then on top when it comes to App, the app itself, you can run locally or anywhere, the App and database. Now the areas that you really want to go after to migrate is look at anything that's an enterprise workload that you don't need people to manage it. You want your own team to move up in the career. You don't want thousand people looking at... you don't want to have a, for example, IT administrators to call central people to the people to manage your compute storage. That workload should be more, right? You already saw Sierra moved out to Salesforce. We saw collaboration already moved out. Zoom is not running locally. You already saw SharePoint with knowledge management mode up, right? With a box, drawbacks, you name anything. The next global mode is a SAS workloads, right? I think Workday service running there, but work data will go into the Cloud. I bet at some point Zendesk, ServiceNow, then either they put it on the public Cloud, or they have to create a product and public Cloud. To your point, these public Cloud vendors are at $2 trillion market cap. They're they're bigger than the... I call them nation States. >> Yeah, >> So I'm servicing though. I mean, there's a 2 trillion market gap between Amazon and Azure, I'm not going to compete with them. So I want to take this workload to run it there. So all these vendors, if you see that's where Shandra from Adobe is pushing this right, Adobe, Workday, Anaplan, all the SAS vendors we'll move them into the public Cloud within these vendors. So those workloads need to move out, right? So that all those things will start, then you'll start migrating, but I call your procurement. That's where the RPA comes in. The other thing that we didn't talk about, back to your first question, what is the next 10 years of Cloud will be RPA? That third piece to Cloud is RPA because if you have your systems On-prem, I can't automate them. I have to do a VPN into your house there and then try to automate your systems, or your procurement, et cetera. So all these RPA vendors are still running On-prem, most of them, whether it's UI path automation anywhere. So the Cloud should be where the brain should be. That's what I call them like the octopus analogy, the brain is in the Cloud, the tentacles are everywhere, they should manage it. But if my tentacles have to do a VPN with your house to manage it, I'm always will have failures. So if you look at the why RPA did not have the growth, like the Snowflake, like the Cloud, because they are running it On-prem, most of them still. 80% of the RP revenue is On-prem, running On-prem, that needs to be called clarified. So AI, RPA and the SAS, are the three reasons Cloud will take off. >> Awesome. Thank you for that. Now I want to flip the switch again. You're an investor or a multi-tool player here, but so if you're, let's say you're an ecosystem player, and you're kind of looking at the landscape as you're in an investor, of course you've invested in the Cloud, because the Cloud is where it's at, but you got to be careful as an ecosystem player to pick a spot that both provides growth, but allows you to have a moat as, I mean, that's why I'm really curious to see how Snowflake's going to compete because they're competing with AWS, Microsoft, and Google, unlike, Frank, when he was at service now, he was competing with BMC and with on-prem and he crushed it, but the competitors are much more capable here, but it seems like they've got, maybe they've got a moat with MultiCloud, and that whole data sharing thing, we'll see. But, what about that? Where are the opportunities? Where's that white space? And I know there's a lot of white space, but what's the framework to look at, from an investor standpoint, or even a CEO standpoint, where you want to put place your bets. >> No, very good question, so look, I did something. We talk as an investor in the board with many companies, right? So one thing that says as an investor, if you come back and say, I want to create a next generation Docker or a computer, there's no way nobody's going to invest. So that we can motor off, even if you want to do object storage or a block storage, I mean, I've been an investor board member of so many storage companies, there's no way as an industry, I'll write a check for a compute or storage, right? If you want to create a next generation network, like either NetSuite, or restart Juniper, Cisco, there is no way. But if you come back and say, I want to create a next generation Viper for remote working environments, where AI is at the core, I'm interested in that, right? So if you look at how the packets are dropped, there's no intelligence in either not switching today. The packets come, I do it. The intelligence is not built into the network with AI level. So if somebody comes with an AI, what good is all this NVD, our GPS, et cetera, if you cannot do wire speed, packet inspection, looking at the content and then route the traffic. If I see if it's a video package, but in UN Boston, there's high interview day of they should be loading our package faster, because you are a premium ISP. That intelligence has not gone there. So you will see, and that will be a bad people will happen in the network, switching, et cetera, right? So that is still an angle. But if you work and it comes to platform services, remember when I was at Pivotal and VMware, all models was my boss, that would, yes, as a platform, service is a game already won by the Cloud guys. >> Right. (indistinct) >> Silicon Valley Investors, I don't think you want to invest in past services, right? I mean, you might come with some lecture edition database to do some updates, there could be some game, let's say we want to do a time series database, or some metrics database, there's always some small angle, but the opportunity to go create a national database there it's very few. So I'm kind of eliminating all the black spaces, right? >> Yeah. >> We have the white spaces that comes in is the SAS level. Now to your point, if I'm Amazon, I'm going to compete with Snowflake, I have Redshift. So this is where at some point, these Cloud platforms, I call them aircraft carriers. They're not going to stay on the aircraft carriers, they're going to own the land as well. So they're going to move up to the SAS space. The question is you want to create a SAS service like CRM. They are not going to create a CRM like service, they may not create a sales force and service now, but if you're going to add a data warehouse, I can very well see Azure, Google, and AWS, going to create something to compute a Snowflake. Why would I not? It's so close to my database and data warehouse, I already have Redshift. So that's going to be nightlights, same reason, If you look at Netflix, you have a Netflix and you have Amazon prime. Netflix runs on Amazon, but you have Amazon prime. So you have the same model, you have Snowflake, and you'll have Redshift. The both will help each other, there'll be a... What do you call it? Coexistence will happen. But if you really want to invest, you want to invest in SAS companies. You do not want to be investing in a compliment players. You don't want to a feature. >> Yeah, that's great, I appreciate that perspective. And I wonder, so obviously Microsoft play in SAS, Google's got G suite. And I wonder if people often ask the Andy Jassy, you're going to move up the stack, you got to be an application, a SAS vendor, and you never say never with Atavist, But I wonder, and we were talking to Jerry Chen about this, years ago on theCube, and his angle was that Amazon will play, but they'll play through developers. They'll enable developers, and they'll participate, they'll take their, lick off the cone. So it's going to be interesting to see how directly Amazon plays, but at some point you got Tam expansion, you got to play in that space. >> Yeah, I'll give you an example of knowing, I got acquired by a couple of times by EMC. So I learned a lot from Joe Tucci and Paul Merage over the years. see Paul and Joe, what they did is to look at how 20 years, and they are very close to Boston in your area, Joe, what games did is they used to sell storage, but you know what he did, he went and bought the Apps to drive them. He bought like Legato, he bought Documentum, he bought Captiva, if you remember how he acquired all these companies as a services, he bought VMware to drive that. So I think the good angle that Microsoft has is, I'm a SAS player, I have dynamics, I have CRM, I have SharePoint, I have Collaboration, I have Office 365, MS Teams for users, and then I have the platform as Azure. So I think if I'm Amazon, (indistinct). I got to own the apps so that I can drive this workforce on my platform. >> Interesting. >> Just going to developers, like I know Jerry Chan, he was my peer a BMF. I don't think just literally to developers and that model works in open source, but the open source game is pretty much gone, and not too many companies made money. >> Well, >> Most companies pretty much gone. >> Yeah, he's right. Red hats not bad idea. But it's very interesting what you're saying there. And so, hey, its why Oracle wants to have Tiktok, running on their platform, right? I mean, it's going to. (laughing) It's going to drive that further integration. I wanted to ask you something, you were talking about, you wouldn't invest in storage or compute, but I wonder, and you mentioned some commentary about GPU's. Of course the videos has been going crazy, but they're now saying, okay, how do we expand our Team, they make the acquisition of arm, et cetera. What about this DPU thing, if you follow that, that data processing unit where they're like hyper dis-aggregation and then they reaggregate, and as an offload and really to drive data centric workloads. Have you looked at that at all? >> I did, I think, and that's a good angle. So I think, look, it's like, it goes through it. I don't know if you remember in your career, we have seen it. I used to get Silicon graphics. I saw the first graphic GPU, right? That time GPU was more graphic processor unit, >> Right, yeah, work stations. >> So then become NPUs at work processing units, right? There was a TCP/IP office offloading, if you remember right, there was like vector processing unit. So I think every once in a while the industry, recreated this separate unit, as a co-processor to the main CPU, because main CPU's inefficient, and it makes sense. And then Google created TPU's and then we have the new world of the media GPU's, now we have DPS all these are good, but what's happening is, all these are driving for machine learning, AI for the training period there. Training period Sometimes it's so long with the workloads, if you can cut down, it makes sense. >> Yeah. >> Because, but the question is, these aren't so specialized in nature. I can't use it for everything. >> Yup. >> I want Ideally, algorithms to be paralyzed, I want the training to be paralyzed, I want so having deep use and GPS are important, I think where I want to see them as more, the algorithm, there should be more investment from the NVIDIA's and these guys, taking the algorithm to be highly paralyzed them. (indistinct) And I think that still has not happened in industry yet. >> All right, so we're pretty much out of time, but what are you doing these days? Where are you spending your time, are you still in Stealth, give us a little glimpse. >> Yeah, no, I'm out of the Stealth, I'm actually the CEO of Aisera now, Aisera, obviously I invested with them, but I'm the CEO of Aisero. It's funded by Menlo ventures, Norwest, True, along with Khosla ventures and Ram Shriram is a big investor. Robin's on the board of Google, so these guys, look, we are going out to the collaboration game. How do you automate customer service and support for employees and then users, right? In this whole game, we talked about the Zoom, Slack and MS Teams, that's what I'm spending time, I want to create next generation service now. >> Fantastic. Muddu, I always love having you on you, pull punches, you tell it like it is, that you're a great visionary technologist. Thanks so much for coming on theCube, and participating in our program. >> Dave, it's always a pleasure speaking to you sir. Thank you. >> Okay. Keep it right there, there's more coming from Cuba and Cloud right after this break. (slow music)

>> from our studios in the heart of Silicon Valley, Palo Alto, California It is a cute conversation. >> Welcome to this cube competition here at the Palo Alto Cube Studios. I'm John for a host of the Cube. Were here a special guests to keep alumni investor An entrepreneur who do Sudhakar, would you Good to see you again, John. Always a pleasure. You've been on as an entrepreneur, founder. As an investor, you're always out. Scour in the Valley was a great conversation. I want to get your thoughts as kind of a guest analyst on this segment around the state of the Union for Enterprise Tech. As you know, we covering the price tag. We got all the top enterprise B to B events. The world has changed and get reinvent coming up. We got VM World before that. The two big shows, too to cap out this year got sprung a variety of other events as well. So a lot of action cloud now is pretty much a done deal. Everyone's validating it. Micro cells gaining share a lot of growth areas around cloud that's been enable I want to get your thoughts first. Question is what are the top growth sectors in the enterprise that you're seeing >> papers. Thank you for having me. It's always a pleasure talking to you over the years. You and me have done this so many times. I'm learning a lot from you. So thank you. You are so yeah, I think Let's dig into the cloud side and in general market. So I think that there are 34 areas that I see a lot that's happening a lot. Cloud is still growing, a lot 100% are more growth and cloud and dog breeders. And what is the second? I see, a lot of I T services are close services. This includes service management. The areas that service now isn't They're >> still my ops was Maybe >> they opt in that category. E I said With management, the gutter is coming with the new canticle a service management. So they're replacing idea some with a different. So that's growing 800% as a category tourist. RP according to again, the industry analysts have seen that it's going at 65 to 70% so these three areas are going a lot in the last one that I see a lot of user experience. Can you build? It's like it's a 20,000,000,000 market cap, something. So if you let it out, it's a cloud service Management services RP user experience cos these are the four areas I see a lot dating all the oxygen rest. Everybody is like the bread crumbs. >> Okay, and why do you think the growth in our P A. So how's the hype? Is it really what? What is going on in our pee, In your opinion, >> on the rumors I'm hearing or there is some companies are already 1,000,000,000 revenue run great wise. That's a lot in our piece. So it's not really a hype that really so that if you look and below that, what's happening is I'd be a Companies are automating automation. The key for here is if I can improve the user experience and also automate things. RPS started doing screen scraping right in their leaders, looking at any reservations supply chain any workflow automation. So every company is so complex. Now somebody has to automate the workflow. How can you do this with less number of people, less number, resources, and improve the productivity >> coming? R P A. Is you know, robotic process automation is what it stands for, but ultimately it's software automation. I mean, it's software meets cloud meets automation. It seems to be the big thing. That's also where a I can play a part. Your take on the A I market right now. Obviously, Cloud and A I are probably the two biggest I think category people tend to talk about cloud and a eyes kind of a big kind of territories. RPG could fall under a little bit of bulls, but what you take on a guy, >> Yeah, so I think if you look at our pier, I actually call the traditional appears to be historical legacy. Wonders and R P companies are doing a good job to transform themselves to the next level, right? But our pianist Rocky I score. It's no longer the screen skipping tradition, making the workflow understanding. So there are new technology called conversational Rp. There's actually a separate market. Guys been critical conversation within a Can I talk to in a dialogue manner like what you experienced Instagram are what using what's up our dialogue flow? How can I make it? A conversational RPS is a new secretary is evolving it, but our becomes have done a good job. They leave all their going out. A >> lot has been has great success. We've been covering them like a blanket on a single cube. Um, I got it. I got to get your take on how this all comes into the next generation modern era because, um, you know, we're both been around the block. We've seen the waves of innovation. The modern error of clouds certainly cloud one Dato Amazon. Now Microsoft has your phone. Google anywhere else really goes. Dev Ops, The devil's movement cloud native amazing, create a lot of value continues to do well, but now there's a big culture on cloud 2.0, what is your definition of cloud two point? Oh, how do you see Cloud 2.0, evolving. But >> I like the name close to party. I think it's your third. It is going to continue as a trained. So look, throw two point with eyes. I don't know what it will be, but I can tell you what it should be and what it can have. Some other things that should do in the cloud is cloud is still very much gun to human beings. Lot of develops people. Lot of human being The next addition to a daughter should have things done programmatically I don't need tens of thousands off Assad ease and develops people. So back to your air, upside and everything. Some of those things should become close to become proactive. I don't want to wait until Amazon. Easter too is done. If I'm paying him is on this money. Amazon should be notifying me when my service is going to be done. The subsidy eaters They operated Chlo Trail Cloudwatch Exeter. But they need to take it to a notch level. But Amazon Azure. >> So making the experience of deploying, running and building APS scalable. Actually, that's scales with Clavet. Programmable kind of brings in the RPI a mean making a boat through automation edge of the network is also interesting. Comes up a lot like Okay, how do you deal with networking? Amazons Done computing storage and meet amazing. Well, cloud and networking has been built in, I guess to me, the trend of networking kicks in big because now it's like, OK, if you have no perimeter, you have a service area with I o t. >> There's nothing that >> cloud to point. It has to address riel time programming ability. Things like kubernetes continues to rise. You're gonna need to have service has taken up and down automatically know humans. So this >> is about people keep on fur cloak. What should be done before the human in the to rate still done. It develops. People are still using terror from lot of scripting. Lot of manual. Can you automata? That's one angle The second angle I see in cloud 2.0 is if you step back and say What, exactly? The intrinsic properties of Claude Majors. It's the work floor. It's automation, but it's also able to do it. Pro, actually. So what I don't have to raise if I'm playing club renders this much money. Tell me what outrageous are happening. Don't wait until outage happens. Can you predict voted? Yes, they have the capability to women. It should be Probably steal it. No, not 100%. So I want to know what age prediction. I wonder what service are going down. Are notified the user's that will become a a common denominator and solutions will be start providing, even though you see small startups doing this. Eventually they become features all these companies, and they'll get absorbed by the I called his aircraft carriers. You have Masson agile DCP. They're going to absorb all this, a ups to the point that provide that as the functionality. >> Yeah, let's get the consolidation in second. I want to get your thoughts on the cloud to point because we really getting at is that there's a lot of white space opportunity coming in. So I gotta ask you to start up. Question as you look at your investor, prolific investor in start ups. Also, you're an entrepreneur yourself. What >> is? >> They have opportunities out there because we'll get into the big the big whales Amazon, who were building and winning at scale. So embarrassed entry or higher every day, even though it's open sources, They're Amazons, betting on open source. Big time. We had John Thompson talk about that. That was excessive. Something Nutella. And so what? What if I was a printer out there? Would what do I do? I mean, is there Is there any real territory that I could create a base camp on and make money? >> That's plenty. So there's plenty of white faces to create. Look, first of all your look at what's catering, look at what's happening. IBM is auto business in service management, CSL itself to Broadcom. BMC is sold twice to private companies. Even the CEO got has left our war It is. Then you have to be soldiers of the Micro Focus. The only company that's left is so it's not so in that area, you can create plenty of good opportunities. That's a big weight. >> Sensors now just had a bad quarter. So actually, clarity will >> eventually they're gonna enough companies to go in that space. That play that's based can support 23 opportunities so I can see a publicly traded company in service. No space in next five years. My production is they'll be under company will go a p o in the service management space. Same things would happen. Rp, Rp vendors won't get acquired A little cleared enough work for automation. They become the next day because of the good. I can see a next publicly traded company. What happened in the 80 operations? Patriotism Probably. Computer company Pedro is doing really well. Watch it later. Don't. They're going to go public next. So that area also, you see plenty of open record companies in a UPS. >> So this is again back to the growth areas. Cloud hard to compete on Public Cloud. Yes, the big guys are out there. There's a cloud enablers, the people who don't have the clouds. So h p tried to do a cloud hp They had to come out, they'll try to cloud couldn't do It s a P technically is out there with a cloud. They're trying to be multi cloud. So you have a series of people who made it an oracle still on the fence. They still technically got a cloud, but it's really more Oracle and Oracle. So they're kind of stuck in the middle between the cloud and able nervous. The Cloud player. If you're not a cloud player large enterprise, what is the strategy? Because you got HP, IBM, Cisco and Dell. >> So I don't know. You didn't include its sales force in that If I'm Salesforce, I want sales force to get in. They have a sales cloud marketing cloud commerce code. Mark is not doing anything in the area of fighting clothes. They cannot go from 100,000,000,000 toe, half a trillion trillion market cap. Told I D. They have to embrace that and that's 100% growth area. You know, people get into this game at some point. It'll be is already hard and 50,000,000,000 market cap. Then that leaves. What is this going to do? Cisco has been buying more security software assets, but they don't wanna be a public company, their hybrid club. But they have to figure out How can they become an arms dealer in escape and by ruining different properties off close services? And that's gonna happen. And I've been really good job by acquiring Red Heart. So I think some place really figuring out this what is happening. But they have to get in the gaming club they have to do. Other service management have begun and are here. They have to get experience. None of these guys have experienced in this day and age that you killed and who are joining the workforce. They care for Airbnb naked for we work. They care for uber. They care for Netflix. It is not betting unders. So if I'm on the border, Francisco, I'm not talking about experience That's a problem to me. Hey, tree boredom is not talking about that. That's what if I'm I know Mark is on the board. Paramount reason. But Mark is investing in all the slack. Cos then why is it we are doing it either hit special? Get a separate board member. They should get somebody else. >> Why? He wouldn't tell. You have to move. Maybe. I don't know. We don't talk about injuries about that. But I want to get back to this experience thing because experience has become the new expectation. Yes, that's been kind of a design principle kind of ethos. Okay, so let's take that. The next little younger generation, they're consuming Airbnb. They're using the serious like their news and little chunks be built a video service for that. So things are changing. What is? I tease virgin as the consumption is a product issue. So how does I t cater to these new experience? What are some of those experiences? I >> think all of them. But I think I d for Social Kedrick, every property, every product should figure out how to offer to the young dreamers how they were contributed offer to the businesses on the B two baby to see. So the eye has to think every product or not. Should I start thinking about how my user should consume this and how should out for new experiences and how they want to see this in a new way, right? It's not in the same the same computer networking. How can a deluded proactively How can a dealer to a point where people can consume it and make other medications so darn edition making? That's where the air comes in. Don't wait for me toe. Ask the question. Suggest it's like Gmail auto complete. Every future should be thinking through problem. Still, what can I do to improve the experience that changes the product? Management's on? And that's what I'm looking at, companies who are thinking like that connection and see Adam Connection security. But that has to happen in the product. >> I was mentioning the people who didn't have clouds HP, IBM, Cisco and Dell you through sales force in there, I kind of would think sales were six, which is technically a cloud. They were cloud before cloud was even cloud. They built basically oracle for the cloud that became sales force. But you mentioned service now. Sales force. You got adobe, You got work day. These are application clouds. So they're not public clouds per se they get Amazon Web service is, you know, at Adobe runs on AWS, right? A lot of other people do. Microsoft has their own cloud, but they also have applications as well. Office 3 65 So what if some of these niche cloud these application clouds have to do differently? Because if you think about sales force, you mentioned a good point. Why isn't sales were doing more? People generally don't like Salesforce. You think that it's more of a lock inspect lesson with a wow. They've done really innovative things. I mean, I don't People don't really tend to talk about sales force in the same breath as innovation. They talk about Well, we run sales for us. We hate it or we use it and they never really break into these other markets. What's your take on them? >> I think Mark has done a good job to order. Yes, acquiring very cos it has to start from the top and at the market. His management team should say, I want to get in a new space. He got in tow. Commerce. Claudia got into marketing. He has to know, decide to get into idea or not. Once he comes out, he's really taken because today, science. What is below the market cap? Com Part of it'll be all right. If I am sales force, I need to go back down. Should I go after service? No. Industry should go after entire 80 services industry. Yes or no, But they have to make a suggestion. Something with Toby Toby is not gonna be any slower. They will get into. I decide. They're already doing the eyesight and experience. They're king of experience. Their king off what they're doing. Marketing site. They will expand. Writing. >> What does something We'll just launched a platform. Yes, that's right. The former executive from IBM. That's an interesting direction. They all have these platforms. Okay, so I got together to the Microsoft Amazon, Um, Google, the big clouds and then everybody else. A lot of discussion around consolidation. A lot of people say that the recession's coming next year. I doubt that. No, nos. The consolidation continues to happen. You can almost predict that. But where do you see the consolidation of you got some growth areas as you laid out cloud I t service is our p a experience based off where looks like where's the consolidation happening? If growth is happening, they're words to tell. >> It was happening. Really Like I see a lot in cyber security. I'm in Costa Rica, live in public. You have the scaler, the whole bunch of companies. So the next level of cos you always saw Sisko Bart, do your security followed has been buying aggressively companies. So secret is already going to a lot of consolidation. You're not seeing other people taking it, but in the I T services industry, you'll start seeing that you're already seeing that in the community space. That game is pretty much over right. Even the ember barred companies, even Net are barred companies and the currency. So I think console is always going to happen. People are picking up the right time. It's happening across the board. It's a great time to be an entrepreneur creator value. They come this public. So it's like I think it's cannot anymore very time. Look to your point where the decision happens or not. Nobody can predict. But if a chance now, it's best time to raise money. Build a company. >> Well, we do. I think the analysis, at least from my perspective, is looking at all the events we go to is the same theme comes up over and over. And Andy Jassy this heat of a tigress always talks about Old Garden new Guard. I think there's two sides of the streets developing old way in a new way, and I think the modern architect of the modern era of computer industry is coming, and it looks a lot different than it. Waas. So I think the consolidate is happening on those companies that didn't make the right bets, either technically or business model wise, for they took on too much technical debt and could not convert over to the cloud world or these really robust software environment. So I think consolidations from just just the passing of holder >> seems pretty set up for a member of the first men. First Main Computing was called mainframe Era, then, with clients Herrera and Kim, the club sodas 6 2009 13 years old, the new Errol called. Whatever the name, it will be something with a n mission in India that things would be so automated. That's what we have new area of computing, So that's I would like to see. So that's a new trick, this vendetta near turn. So even though we go through this >> chance all software software sales data 11. Yeah, it's interesting. And I think the opportunity, for starters is to build a new brands. His new branch would come out. Let's take an example of a company that but after our old incumbent space dying market share not not very attractive from a VC standpoint. From market space standpoint, Zoom Zoom went after Web conferencing, and they took on WebEx and portability. And they did it with a very simple formula. Be fast, be cloud native and go after that big market and just beat them on speed and simple >> experience. They give your greatest experience just on the Web, conferencing it and better than sky better than their backs better than anybody else in that market. Paid them with reward. Thanks, Vic. He had a good >> guy and he's very focused. He used clouds. Scale took the value proposition of WebEx. Get rid of all the other stuff brought its simple to video conference. And Dr Mantra is one >> happening. The A applying to air for 87 management. A ops A customer surveys. >> So this is what our Spurs could do. They can target big markets debt and go directly at either a specific differentiation. Whether it's experience or just a better mouse trap in this case could win, >> right? And one more thing we didn't talk about is where their underpants go after is the area number. Many of these abs are still enterprise abs. Nobody really focused on moving this enterprise after the club. Hollis Clubbers are still struggling with the thing. How can I move my workload number 10%. We're closing the club 90% still on track. So somebody needs to figure out how to migrate these clouds to the cloud really seamlessly. The Alps are gonna be born in the cloud club near the apse. So how do you address truckload in here? So there's enough opportunity to go after enterprise applications clouded your application. Yeah, >> I mean, I do buy the argument that they will still be on premises activity, but to your point will be stealing massive migration to the cloud either sunsetting absent being born the cloud or moving them over on Prem All in >> all the desert I keep telling the entree and follow the money. When there is a thing you look for it Is there a big market? Are people catering there? If people are dying and the old guard is there to your point and is that the new are you? God will happen. And if you can bet on the new guard in your experience, market will reward you. >> Where is the money? Follow the money. Worse. What do we follow? Show me where it is. Tell me where it is >> That all of the clothes, What is the big I mean, if you're not >> making money in the club for the cloud, you are a fool right now. If there any company on making out making in the club as a CEO, a board member, you need to think through it. Second automation whether you go r p a IittIe automation here to make money on, said his management. Whether it's from customer service to support the operation, you got to take the car. Start off it if you are Jesse ever today and you're not making birds that cementing. I see it mostly is that still don't want to take it back. They want to build empires. The message to see what's right, Nice. Either you do it or get out. Get the job to somebody that >> I hold a lot of sea cells and prayer. Preparing for reinforce Amazon's new security cloud security conference and overwhelmingly response from the sea. So's chief security officer is we are building stacks internally. When I asked him about multi cloud, you know what they said? Multi cloud is B s. I said, Why? Because Well, we have a secondary cloud, but I don't want to fork my development team. I want to keep my people focused on one cloud. It's Amazon. Go Amazon. It's azure. We stay with Azure. I don't wanna have three development teams. So this a trend to keep the stack building internally. That means they're investing in building their own text. Axe your thoughts on that >> look, I mean, that's again. There's no one size fits all. There will be some CEOs who want to have three different silos. Some people have a hard, gentle stack like I've seen companies. Right now. They write, the court wants it, compiles, and it's got an altar cloth. That's a new irritability you're not. We locate a stack for each of them. You're right. The court order to users and NATO service is but using the same court base. That's the whole The new startups are building it. If somebody's writing it like this, that's all we have. Thing is the CEO. So there's that. The news he always have to think through. How can you do? One court works on our clothes? >> Great. You do. Thank you for coming on again. Always great to get your commentary. I learned a lot from you as well. Appreciate it. I gotta ask the final question as you go around the VC circles. You don't need to mention any names you can if you want, but I want to get a taste of the market size of rounds, Seed Round A and B. What are hot rounds? What sizes of Siri's am seeing? Maur? No. 10,000,000? 15,000,000? Siri's >> A. >> Um >> Siri's bees are always harder to get than Siri's. A seeds. I always kind of easier. What's your take on the hot rounds that are hot right now. And what's the sizes of the >> very good question? So I'm in the series the most easy one, right? Your concept. But the seed sizes went up from 200 K to know mostly drones are 1,000,000 2 1,000,000 Most city says no oneto $10,000,000. So if you're a citizen calmly, you're not getting 10 to 15. Something's wrong because that become the norm because there's more easy money. It also helps entrepreneurs. You don't have to look for money. See, this beast are becoming $2025 $5,000,000 pounds, Siri sees. If you don't raise a $50,000,000 then that means you're in good company. So the minimum amount of dries 50,000,000 and CDC Then after that, you're really looking for expansions. $100,000,000 except >> you have private equity or secondary mortgage >> keys, market valuations, all the rent. So I tell entrepreneurs when there is an opportunity, if you have something, you can command the price. So if you're doing a serious be a $20,000,000 you should be commanding $100,000,000.150,000,000 dollars, 2,000,000 evaluations right if you're not other guys are getting that you're giving too much of your company, so you need to think through all of that. >> So serious bees at 100,000,000 >> good companies are much higher than that. That'll be 1 52 100 And again, this is a buyer's market. The underpinnings market. So he says, more money in the cash. Good players they're putting. Whether you have 1,000,000 revenue of 5,000,000 revenue, 10,000,000 series is the most hardest, but its commanding good premium >> good time to be in our prayers were with bubble. Always burst when it's a bite, mark it on the >> big money. Always start a company >> when the market busts. That's always my philosophy. Voodoo. Thanks for coming. I appreciate your insight. Always as usual. Great stuff way Do Sudhakar here on the Q investor friend of the Cube Entrepreneur, I'm John for your Thanks >> for watching. Thank you.

from our studios in the heart of Silicon Valley Palo Alto California this is a cute conversation welcome everybody to this cube conversation my name is Dave Volante and we're here in our Palo Alto studios Medusa doc R is here he's an investor and entrepreneur and a friend we're do great to see you again thanks so much for coming in thank you it's a head too long it is you and I sat down and had a conversation on the cube so it's been well yeah yeah well you've been on the cube a bunch and you've a I've seen some great conversations that you had with with with Peter and John so thanks for making the time and coming back in thank you so I want to start with when I go around and talk to executives every CEO is trying to get digital right you know whatever that means you know they know it's important and they're trying to figure it out they know it relates to data they know they have to leverage data they know this buzzword of digital transformation what are you seeing when you talk to executives and companies how real is this digital transformation is it a fad or is it a substantive good question to look from my view point of view digital transformation is the word people use but at the end of the day CIOs have to disrupt their businesses every CEO has to figure out am i cutting the cost I'm a helping companies grow in revenue from a look at from a board perspective and what people are looking at the investor perspective most CEOs are CEOs are looking at somehow looking running their operations on a day-to-day basis to that point I think most CEOs are expecting see I was to do the new innovative things at you probably hearing that people are adding CDO as a title yeah so it's up to see I were to see will it be the innovate to CIO it's like you have two kids like in your case your four kids you have two how do you make sure that all four kids are given the equal responsibility so Ciara has to decide look I have budget X X by two goes to my existing business X by two goes to the new business that decision making is not happening with the see I was today and that's what the distal transformation has to be is going on in a what I call not in a disruptive manner but the CEOs who have figure out how to disrupt it I really taking the next stage the next thing that people are interested there is where do I start right you have all should I start with my CRM supply chain should I start with my IT you got to figure out what all the but start someplace you pick one the area but that has to be disruptive in the sense we are living in the age of where I call it autonomous everything right there's a data there is cloud and there's AI our mission like what are you these three are such a large disruption in our industry see us how to figure out and say what can I do in terms of cost saving in terms of revenue growth but that can't be incremental it has to be revolutionary so I often say we've decades we've marched to the cadence of Moore's law in this industry that's where innovation came from no longer it's as you said it's data now for the last 10 years and you were involved in this we were collecting all this data we lowered the cost of collecting data and and and in running data warehouses with Hadoop but now data's plentiful insights aren't so you have data you have to apply machine intelligence to that data and then cloud gives you scale so that's like the new innovation cocktail so you agree that digital I agree digital transformation is real and the other dynamic mudo is you see companies are because it's data are able to traverse industries used to be you're in an industry if you're in financial services that's it if you're in healthcare that's it now you see Amazon's and content apples into financial services so people are afraid of getting disrupted you've got this new innovation cocktail so your point was really get started so you've got a shift resources you don't have unlimited budget right so how do people do that how are they taking cost out of the business and how are they reapportioning that cost for innovation really good so I'll give you two examples from Megan again thinking of where I see it one is for CIOs has something called IT operations IT operation is a very big piece that people need to figure out how to get the cost out of it the IT operations cannot be developed we've been running IT for last 30 years I mean what are the word they used I know Gartner uses the word called AAA Hobbs I don't care what the word is but the key is you have to run your 18 autonomous manner we are living in the age of your trading is autonomous your my your four on game by four on K is being traded through hedge funds your add technologies autonomous with Facebook Google and Amazon with all data when I saw with with Casper and Splunk we made cybersecurity autonomous to whatever extent threat detection but when it came to IT operations and IT customer support today manual if I may see over right now I'll invest on customer service and support to start as a point of what can I do to make my service agents better or what can I do to make the end users or the users experience better without going to a human can I eliminate the human in the equation here the mileage may vary it's like the driverless consequence you have level 1 to level 5 they may like to have autopilot some people may have a fully autonomous car depending on the organization you got to have a right amount of autonomous City in your organization both for IT operations and IT Service Management that hasn't happened and that will be happen in the next 4 5 years so let's talk about that you were at ServiceNow for a period of time they've obviously disrupted the old-line helpdesk and you know they really did a job on BMC and hewlett-packard etc are they in a position to take that next step in when you go to service now analogy here folks talk about AI and infusing AI obviously there's a lot of data being collected is that the right model I mean if they've automated forms but you think you're talking about something more I help us understand that sure looks abused know is in a great position they'll continue to do well it's a great company right I think what's going to happen next is how can companies like ServiceNow take her to the next stage right either become a partner with ServiceNow or service now itself we'll do it a little bit new companies will be for me one angle is forces enterprises is this game going to be for enterprises same playbook as a playbook for the cloud so imagine an apps that are born on the cloud their IT operations data their ticketing data where will that go to that means we think through enterprise data which is enterprise apps and so as they need to figure out so if I am a company today if I'm daring I need to decide what will I do for my enterprise applications and services what do I do it for my cloud Orion services so that is addition you have to make it at the top once it goes down the next level then able to decide is it for IT support customer support or IT operations what can I do in terms of augmenting there if I do is just to make my agents better you can take the cost out of the equation the cost should be is can I automate to the point I can eliminate 50% of my DevOps 50% of my SR ease my role of the come is in the next four five years this 70 80 % of devops I tell you when I study jobs will be gone that should be automated it should be a driverless IT autonomous IT people should have him that's not even a moonshot goal we all in America let's make great our great again this is our time it's IT if we don't do it some other country will do it Chile is going to eat us for lunch so he basically putting forth the scenario a DevOps was essentially a stepping stone and you see that largely going away it has to be it has been automated I'm not going to hide hundreds of tunas I called Manuel tuners right yes I'll need some DevOps people I need some IT admin things that system cannot do it algorithmically should go to humans at some point but there are enough things like if you want to install something in your laptop why should I talk to somebody else if I want to upgrade to Microsoft Office if I want to buy a CRM license if I want to get a zoom provisioning why do I need to talk to a human being in this equation can I oughta mater complete autonomous can I get to a level five autonomous in IT right that's what I'm looking towards robotic process automation play a role here can our PA we've done some some events with automation anywhere new iPad you're seeing huge valuations uipath as supposedly as another six billion dollar evaluation I mean you know amazing unicorn plus plus plus can those technologies be applied to solve this problem yes or no I think it depends on what the HRP are under star doing IP is a great topic right not be resolved very successful what I'm talking about is our IT operations and IT support and customer support automation can our PA guys take their technology their substrate a platter sure they can try it but these are all have to be grown organically doing this in nit going for customer service and support doing it for the cloud has its own its own skin its own platform like you and me were talking earlier if I'm doing this thing on Amazon why wait and launch a VM I won't even do it like if a new ticket comes in I should be doing through kinases I should be doing through my lambda functions I shouldn't be my cost of goods with so much that I want it should not cost me anything until the point Dave generates a ticket to me first all why should Dave generate a ticket right look at the very much extreme model of the test laws just like our today tells me when should I service my car why should you do the same thing like I should be coming and telling your SharePoint is going to go down they have today your Kube application you cannot do an interview with me too unless you fix it that is what the world wants to go so back to service management for minutes so in the old days our service manager was too cumbersome we really didn't have a single CMDB it just really didn't work that well it didn't change anything a lot of tickets that's what it did service now obviously solved that that that problem but what I'm inferring from what you're saying is it's still too expensive the entire infrastructure it needs to be more streamlined and automation is the answer absolutely so I think if you take it'll add layers and layers the first is in the support starting women from CMDB most organizers say my CMD that I still all are stale that's never accurate how can I get a dynamic view of Dave's ink right I should know when and that has to be done at the level of services and apps and at kubernetes level 2 container level once I have a blueprint of what my organization is then I need to know how do I handle the tickets against it then I can I do a health monitoring for all my CIS right I should be telling the outage put it at the another what business carries is my business running correctly you do have a downtime what is going to happen even though if I am false positives few times people are expecting saying that tell me proactively what services will impact and who will be impacted so I can take a corrective action and that will happen starting from CMDB automation I actually call it cloud CMDB our dynamic CMDB in the world of cloud and dynamic let's make a good cmdbs dynamic and accurate then take it to the ultimate outage prediction right if I can give your business up time and outage prediction that would be Nirvana are you telling me that IT cannot solve it you and me are saying in Palo Alto a driverless cars are going around we are going to see it in our lifetime IT can be so complex that the car can be autonomous but IT cannot be I don't buy them well I mean you hear about all the systems are down or my systems are slow today that's that's a form of outage that costs Fortune 2000 companies and money I mean it's you know 50 60 thousand dollars a minute in this in some cases so the and I think sometimes people aren't aware as to how much how much revenue is lost to downtime or lost productivity so there's huge huge gains to be made there and it seems that the cloud is the platform on which you're going to you're gonna build these these these natural choice it has to be yeah and it has we want a cloud to you can't say we are in the eight if you are a noose new cloud you're building it I tell people bill it is a multi cloud your same code should work on GCP Amazon and Azure right and on VMware if you want to be a private cloud but should be same the same codebase should be able to compile and run on all multiple processor kubernetes micro services that's really the enabler there right right at once run it anywhere interesting conversation multi-cloud you're hearing a lot of discussion you know certainly in DC the Jedi case Oracle is contesting that when you read the rulings from the General Accounting Office that basically the the DoD determined that multi-cloud is is less secure more expensive more complex now that's the DoD everybody's gonna have multi cloud because multi-cloud is multi vendor sure but it's interesting you don't hear Amazon talking about multi cloud other than you don't want to do it because it's too expensive but everybody else is talking about multi cloud is kubernetes somewhat of a threat to that Amazon posture I don't think I think if you look at Amazon is saying they call it hybrid cloud the word may be different multi cloud or hybrid cloud yeah say they've already partnered like the best public cloud partner with the best pressure of your house is awesome announcement right so vehement software ever talk to Pat gal singer and his team and look they got VMware working with AWS vice-versa so that's it great I mean maybe even call it a two ecosystem but they got that whole thing working there yeah anything with agile is going to do with their public cloud on Azure with as you understand I'll just tack on prom yeah right everybody has 70 mgcp will figure out so then after a while if you and me as a customer I should be able to move things many times it happen is I'm not going to move things dynamically for a nibble but if I want I don't want to vendor lock it I want a code such that if tomorrow something happens I should be able to have an option to move my code base to a different cloud and that's what multi-cloud will happen as a requirement as you build it how much you exercise are not people will design software going for a formal techno so a whole new vector of conversation I would love to get your opinion on that multi-cloud opportunity obviously Cisco's going after VMware's in the strong position there certainly Microsoft is is vying for that you have a ton of startups looking at this IBM with the Red Hat acquisition now is in a in a pretty strong position you know given its open source chops how do you see that whole multi-cloud you know vendor landscape shaking out I think I got really good I have a TD for this at the end when the dust settles you won't have 100 aircraft carriers you will have only four or five yeah so it's like what happened in 90s compact went away Dec went away so same thing is going to happen here there will be four or five vendors will survive there will be Amazon's as yours maybe GCPs VMware's maybe it's Cisco and IBM talks about a I mean there's like maybe alley cloud in China you won't have hundreds of cloud so the number is already decreasing it will let be 10 will it be 5 will it before that still you will see the tall rise but it's already been the whole council isn't happening so if I'm a customer if I'm a vendor if I'm a startup or a public company I'm going to build it only for a few these multi cloud vendors I'm not going to across hundred yeah because the marginal economics of those those hyper clouds we've been saying this for years if there's just so much more compelling and at the end of the day if the economics are 10x less expensive and more attractive that they're gonna win you know and and I think even though you have thousands and thousands of service providers who call themselves cloud we're talking about a different kind of cloud it's got one of those you know it when you see it types of things and I'm going to add something so if you take this back to your earlier question about where the disruption is happening we talked about all the customer service support an IT service management industry but imagine if an app is born on the cloud call it cloud native applications you have millions of new apps that are there on this cloud platforms what is that going to do where is the data going there they want another customer service and support applicant on their platform it currently it's like I'm in your house I'm drinking your wine but when it comes to managing my customers of an operation I will take your log data your even data or take indeed and put in somebody else's house even though John is your partner when you put it there it doesn't make sense it should run it inside yours so all these vendors would want a native application that is running on their platform solving their customer data which hasn't happened yet well this is interesting so obviously Oracle has its own cloud but you're seeing well see work day Salesforce service now all these SAS companies just used to build their own clouds they're building their own data centers Chuck Chuck Philips oven forces I don't friends don't let friends build data centers so maybe he's prescient maybe the trend is that these apps are going to largely predominantly run in the public cloud the Oracle IBM notwithstanding they've got the resources to maybe you know tough it out is that the scenario that you see I have take the consumer companies whether you take V work Airbnb uber all these guys you are already seeing them on to some opinion maybe they have their own datacenter but there are vastly learning and public clouds right and you have already seen that's even the big SAS vendors whether it's Adobe yeah it'll be solid partner with Microsoft Azure workday is partnering with Amazon you saw em Salesforce partnering with Google cloud and AW so you're only seeing these vendors the large SAS when there's already saying in order for me for economics wise it doesn't make sense whether it's for my marketing cloud my service cloud my ecommerce cloud I want this to run on this cloud platform to get scale cost of economics and also I need my services that are built there with a new substrate like we talked about that's lambda functions to kinases I'm not going to do it on my platform but and that trend is going on it's just accelerating so how are you spending your time these days you've had a very successful entrepreneur investor you've been CEO of multiple companies what do you do in these days I'm look I'm very happy with what I'm doing right now so I spend a lot of time with this company called I set up that's right I'm even we talked about it it's a startup company in Palo Alto their vision is to apply like what we got AI ops applying AI for digital transformation for AI customer service I trps oh I like the region look I want to spend time with companies which are taking a big bet right it's like in our IT industry nobody talks about moonshot goals let's take a bigger bet let's take a much vision of for five year ten years what can we disrupt right and I look at those companies I invest with those companies and spending time with them I'm learning a lot in the process I'm contributing back to the those companies well you know sitter I was on Twitter yesterday with with a little group we're having an interesting discussion about you know how things are changing the dynamics of where innovation comes over so we started this conversation with that sort of new innovation cocktail and there just seems to be a whole new fabric of services not only it's not just remote cloud services anymore it's these embedded services that are can think they can act they can sense and it's ubiquitous now even the edge autonomous vehicles we're entering a whole new era it's very exciting right and again one thing that we didn't talk to see Mike and son and my it again it's society has to have regulations and will come if you look at the what's happened in this whole call center customer service industry if autonomous city will happen of any level from level even if I automate 30 percent of your customer service and you don't touch a human being when you are at home for your Comcast to your nest imagine all those services inside your home from field service to if they get automated what's going to happen first of all if Sally's gonna improve your costs are going to reduce if I'm a business I can take that money and invest somewhere else but more importantly those most of those things it's it's a big disruption happening in the outsourced industry right these are your jobs in China India Philippines Vietnam my concern is dart saying that there will be a certain is going to happen people are not paying attention to that and this this strain has already left the station yeah it's going to come to a platform again some next platform but next for five years you'll see a tremendous disruption in this area of digital transformation well I remember a couple decades ago there was a lot of talk about well you people spending a lot of money on IT but that you don't see it in the productivity numbers and all of a sudden because of the PC revolution the productivity went through the roof you're hearing similar sort of discussions now we feel like productivity is about to explode because of what you're saying here absolutely and again the per back to the RP has already shown the value our peers no longer in each category it's what we talked about success renders from you iPad automation anywhere blue prism that just on the back end of the supply chain and RPF cell taking the two front office applying that to customer service facing to your crm facing that your IT hasn't happened yet can I automatically can I ought Americans right from an employee experience to customer experience that productivity if you employ it you'll get more customers doing that yeah it scares people but but it's the future so you better embrace it and lean in voodoo thanks so much oh let's go always measure to see you alright thanks for watching everybody this is David day from our studios in Palo Alto and we'll see you next time thank you [Music]

(Upbeat music) >> From the Hard Rock hotel in Las Vegas, its theCUBE! Covering the Hosho Con 2018, brought to you by Hosho. >> Okay, welcome back every one, this is theCUBE's exclusive coverage here live in Las Vegas for Hosho Con, the first inaugural event where security and block chain conferences is happening, it's the first of its kind where practitioners and experts get together to talk about the future, and solve some of the problems in massive growth coming they got a lot of them. Its good new and bad news but I guess the most important thing is security again, the first time ever security conference has been dedicated to all the top shelf conversations that need to be had and the news here are covering. Our next guest Greg Pinn who's the head of strategy and products for iComply Investor Services. Great to have you thanks for joining us. >> Very nice to be here >> So, we were just talking before we came on camera about you know all the kind of new things that are emerging with compliance and all these kind of in between your toes details and nuances and trip wires that have been solved in the traditional commercial world, that have gotten quite boring if you will, boring's good, boring means it works. It's a system. But the new model with Block Chain and Token Economics is, whole new models. >> Yeah I think what's so exciting about this is that in the Fiat world, from the traditional financial market, everyone is so entrenched in what they've been doing for 20, 30, 40 years. And the costs are enormous. And Block Chain, Crypto coming in now is like we don't have to do it that way. We have to do compliance. Compliance matters, it's important and it's your legal obligation. But you don't have to do it in the same sort of very expensive, very human way that people have been doing it in the past. >> And Cloud Computing, DevOps model of software proved that automations a wonderful thing >> Right >> So now you have automation and you have potentially AI opportunities to automate things. >> And what we've seen is huge increases in technology, in around machine learning and clustering of data, to eliminate a lot of the human process of doing AML, KYC verification, and that's driving down costs significantly. We can take advantage of that in the Crypto Space because we don't have thousands of people and millions of millions of dollars of infrastructure that we've built up, we're starting fresh, we can learn from the past and throw away all the stuff that doesn't work, or isn't needed anymore. >> Alright let's talk about the emerging state of regulation in the Block Chain community and industry. Where are we? What's the current state of the union? If you had to describe the progress bar you know with zero meaning negative to ten being it's working, where are we? What is the state of >> I think if you'd asked me a year ago I think negative would've been the answer. A year ago there was still a big fight in Crypto about do we even want to be part of Compliance, we don't want to have any involvement in that. Because it was still that sort of, Crypto goes beyond global borders, it goes beyond any of that. What's happened now is people have realized, it doesn't matter if you're dealing in Crypto Currency or traditional currency, or donkeys or mules or computers or whatever, if you're trading goods for value, that falls under Regulatory Landscape and that's what we're hearing from the SCC, from FinCEN, from all the regulators. It's not the form it's the function. So if you've got a security token, that's a security, whether you want it to be or not. You can call it whatever you want, but you're still going to be regulated just like a security. >> And I think most entrepreneurs welcome clarity. People want clarity, they don't want to have to be zigging when they should be zagging. And this is where we see domicile problem. Today it's Malta, tomorrow it's Bermuda. Where is it? I mean no one knows it's a moving train, the big countries have to get this right. >> A hundred percent. And beyond that what we're seeing, what's very, very frustrating for a market as global as this is it's not just country-level jurisdiction, the US you've got State-level jurisdiction as well. Makes it very, very hard when you're running a global business if you're an exchange, if you're any sort of global, with a global client reach. Managing that regulation is very, very difficult. >> You know I interviewed Grant Fondo who's with Goodwin Law Firm, Goodwin Proctor they call it Goodwin now, he's a regulatory guy, and they've been very on the right side of this whole SCC thing in the US. But it points to the issue at hand which is there's a set of people in the communities, that are there to be service providers. Law Firms, Tax, Accounting, Compliance. Then you got technology regulation. Not just financial you have GDPR, it's a nightmare! So okay, do we even need GDPR with Block Chain? So again you have this framework of this growth of internet society, now overlaid to a technical shift. That's going to impact not only technology standards and regulations but the business side of it where you have these needed service providers. Which is automated? Which isn't automated? What's your take on all of this? >> I agree with you a hundred percent, and I think what's helpful is to take a step back and realize while compliance is expensive and a pain and a distraction for a lot of businesses. The end of the day it saves people's lives. And this is what, just like if someone was shooting a gun as you were running down the street, in your house, you're going to call the police, that is what financial institutions are doing to save these industries and individuals that are impacted by this. A lot of it from a Crypto Currency perspective, we have a responsibility because so much of what the average person perception is, is Ross Ulbricht and Silk Road. And we have to dig our way out of that sort of mentality of Crypto being used for negative things. And so that makes it even more important that we are ultra, ultra compliant and what's great about this is there's a lot great opportunities for new vendors to come into the space and harness what existed whether that's harnessing data, different data channels, different IDDent verification channels and creating integrated solutions that enable businesses to just pull this in as a service. It shouldn't be your business, if you're in exchange, compliance is something you have to do. It should not become your business. >> Yeah I totally agree, and it becomes table stakes not a differentiator. >> Exactly >> That's the big thing I learned this week it's people saying security's a differentiator, compliance is a, nah, nah, I have standards. Alright so I got to ask you about the, you know I always had been on the biased side of entrepreneurship which is when you hear regulations and you go whoa, that's going to really stunt the growth of organic innovation. >> Right. But in this case the regulatory peace has been a driver for innovation. Can you share some opinions and commentary on that because I think there's a big disconnect. And I used to be the one saying regulation sucks, let the entrepreneurs do their thing. But now more than ever there's a dynamic, can you just share your thoughts on this? >> Yeah, I mean regulators are not here to drive innovation. That's not what their job is. What's been so interesting about this is that because of regulations coming to Crypto along with these other things, it's allowing businesses to solve the problem of compliance in very exciting, interesting ways. And it's driving a lot of technologies around machine learning, what people like IBM Watson are doing around machine learning is becoming very, very powerful in compliance to reduce that cost. The cost is enormous. An average financial institution is spending 15 percent. Upwards of 15 percent of their revenue per year on compliance. So anything they can do to reduce that is huge. >> Huge numbers >> And we don't want Crypto to get to that point. >> Yeah and I would also love to get the percentage of how much fraud is being eaten into the equation too. I'm sure there's a big number there. Okay so on the compliance side, what are the hard problems that the industry is solving, trying to solve? Could you stack rank the >> I think number one: complexity. Complexity is the biggest. Because you're talking about verifying against sanctions, verifying against politically exposed persons, law enforcement lists, different geographical distributions, doing address verification, Block Chain forensics. The list just stacks and stacks and stacks on the complexity >> It's a huge list. >> It's a huge list >> And it's not easy either. These are hard problems. >> Right, these are very, very difficult problems and there's no one expert for all of these things. And so it's a matter of bringing those things together, and figuring out how can you combine the different levels of expertise into a single platform? And that's where we're going. We're going to that point where it's a single shop, you want to release an ICO? You're an exchange and you need to do compliance? All of that should be able to be handled as a single interface where it takes it off of your hands. The liability is still with the issuer. It's still with the exchange, they can't step away from their regulatory liability, but there's a lot that they can do to ease that burden. And to also just ignore and down-risk people that just don't matter. So many people are in Crypto, not the people here, but there's so many people in Crypto, you buy one tenth of a Bitcoin, you buy a couple of Ether, and you're like okay that was fine. Do we really need to focus our time on those people? Probably not. And a lot of the >> There's a lot big money moving from big players acting in concert. >> And that's where we need to be focused. Is the big money, we need to be focused on where terrorists are acting within Block Chain. That's not to say that Block Chain and Crypto is a terrorist vehicle. But we can't ignore the reality. >> And I think the other thing too is also the adversary side of it is interesting because if you look at what's happening with all these hacks, you're talking about billions of dollars in the hands now of these groups that are highly funded, highly coordinated, funded basically underbelly companies. They get their hands on a quantum computer, I was just talking to another guy earlier today he's like if you don't have a sixteen character password, you're toast. And now it's twenty four so, at what point do they have the resources as the fly wheel of profit rolls in on the hacks. >> You know, one of the interesting things we talk about a lot is we have to rely on the larger community. We can't, I can't, you can't solve all of the problems. Quantum computing's a great example. That's where we look for things like two-factor authentication and other technologies that are coming out to solve those problems. And we need to, as a community, acknowledge That these are real problems and we've identified potential solutions. Whether that's in academia, whether it's in something like a foundation like the Ethereum Foundation, or in the private sector. And it's a combination of those things that are really driving a lot of it's innovation. >> Alright so what's the agenda for the industry if you had to have a list this long, how do you see this playing out tactically over the next twelve months or so as people start to get clarity. Certainly SCC is really being proactive not trying to step on everybody at the same time put some guard rails down and bumpers to let people kind of bounce around within some frame work. >> I think the SCC has taken a very cautious approach. We've seen cease and desist letters, we've seen notifications we haven't seen enormous finds like we see in Fiat. Look at HSBC, look at Deutsche Bank, billions of dollars in fines from the SCC. We're not seeing that I think the SCC understands that we're all sort of moving together. At the same time their responsibility is to protect the investor. And to make sure that people aren't being >> Duped. >> Duped. I was trying to find an appropriate term. >> Suckered >> Suckered, duped. And we've seen that a lot in ICOs but we're not seeing it, the headlines are so often wrong. You see this is an ICO scam. Often it's not a scam, it's just the project failed. Like lots of businesses fail. That doesn't mean it's a scam, it means it was a business fail. >> Well if institutional investors have the maturity to handle they can deal with failures, but not the average individual investor. >> Right, which is why in the US we have the credit investor, where you have to be wealthy enough to be able to sustain the loss. They don't have that anywhere else. So globally the SCC care and the other financial intelligence units globally are monitoring this so we make that we're protecting the investor. To get back to your question, where do I see this going? I think we're going to need to fast track our way towards a more compliant regime. And this I see as being a step-wise approach. Starting with sanctions making sure everyone is screened against the sanction list. Then we're going to start getting more into politically exposed persons, more adverse media, more enhanced due diligence. Where we really have that suite of products and identify the risk based on the type of business and the type of relationship. And that's where we need to get fast. And I don't think the SCC is going to say yeah be there by 2024, it's going to be be there by next year. I was talking to Hartej, he was one of the co founders of Hosho and we were talking on TheCUBE about self-regulation and some self-policing. I think this was self-governed, certainly in the short term. And we were talking about the hallway conversations and this is one of the things that he's been hearing. So the question for you Greg is: What hallway conversations have you overheard, that you kind of wanted to jump into or you found interesting. And what hallway conversations that you've been involved in here. >> I think the most interesting, I mentioned this on a panel and got into a great conversation afterwards, about the importance of the Crypto community reaching out to the traditional financial services community. Because it's almost like looking across the aisle, and saying look we're trying to solve real business problems, we're trying to create great innovative things, you don't have to be scared. And I was speaking at a traditional financial conference last week and there it was all people like this Crypto is scary and it's I don't understand it. >> You see Warren Buffett and Bill Gates poopooing it and freak out. >> But we have an obligation then, we can't wait for them to realize what needs to be done. We need to go to them and say, look we're not scary, look let's sit down. If you can get a seat at a table with a head of compliance at a top tier bank, sit down with them and say let me explain what my Crypto ATM is doing and why it's not a vehicle for money laundering, and how it can be used safely. Those sorts of things are so critical and as a community for us to reach across the aisle, and bring those people over. >> Yeah bridge the cultures. >> Exactly. Because it's night and day cultures but I think there's a lot more in common. >> And both need each other. >> Exactly. >> Alright so great job, thanks for coming on and sharing your insights. >> Thank you so much. >> If you have a quick plug on what you're working on, give the plug for the company. >> Sure, so iComply Investor Services is here to help people who want to issue ICOs, do that in a very compliant way. Because you shouldn't have to worry about all of your compliance and KYC and Block Chain Forensics and all that, you should be worried about raising money for your company and building a product. >> Alright final question since I got you here 'cause this is on my mind. Security token, has got traction, people like it 'cause no problem being security. What are they putting against that these days, what trend are you seeing in the security token? Are they doing equity? I'm hearing from hedge funds and other investors they'll want a little bit of equity preferred and or common, plus the token. Or should the token be equity conversion? What is some of the strings you're seeing? >> You know I think it' really just a matter of do you want paper or do you want a token? Just like a stock certificate is worth nothing without the legal framework behind it. A security token is the same way. So we're seeing where some people are wanting to do equity, where some of their investors want the traditional certificate. And some are fine with the token. We're seeing people do hybrid tokens where it morphs from security to utility or back. Where they're doing very creative things. It's what's so great about the Ethereum Network and the Smart Contracts, is there are all of these great options. The hard part then is, how do you fit those options into regular framework. >> And defending that against being a security, and this is interesting because if it converts to a utility, isn't that what security is? >> So that's the question. >> Then an IPO is an, again this is new territory. >> Right, and very exciting territory. It's an exciting time to be involved in this industry. >> In fact I just had an AE3B Election on tokens, first time ever. >> Yeah it's an amazing state that we're in. Where serious investors are saying yeah token's great for me. Give me the RC20 I'll stick it in my MetaMask Wallet, it's unbelievable where we are. And only more exciting things to come. >> Greg Pinn, thanks for coming on and sharing your insights. TheCUBE covers live here in Las Vegas, Hoshocon, the first security conference in the industry of its kind where everyone's getting together talking about security. Not a big ICO thing, in fact it's all technical, all business all people shaping the industry, it's a community it's TheCUBE coverage here in Las Vegas. Stay with us for more after this short break. (Upbeat music)

>> Live from Toronto Canada, it's The Cube, covering Global Cloud and Blockchain Summit 2018, brought to you by The Cube. >> Hello, everyone welcome back to The Cube's live coverage here in Toronto for the first Global Cloud and Blockchain Summit in conjunction with the Blockchain futurist happening this week it's run. I'm John Fourier, my cohost Dave Vellante, we're here with Cube alumni, Bradley Rotter, pioneer Blockchain investor, seasoned pro was there in the early days as an investor in hedge funds, continuing to understand the impacts of cryptocurrency, and its impact for investors, and long on many of the crypto. Made some great predictions on The Cube last time at Polycon in the Bahamas. Bradley, great to see you, welcome back. >> Thank you, good to see both of you. >> Good to have you back. >> So I want to just get this out there because you have an interesting background, you're in the cutting edge, on the front lines, but you also have a history. You were early before the hedge fund craze, as a pioneer than. >> Yeah. >> Talk about that and than how it connects to today, and see if you see some similarities, talk about that. >> I actually had begun trading commodity futures contracts when I was 15. I grew up on a farm in Iowa, which is a small state in the Midwest. >> I've heard of it. >> And I was in charge of >> Was it a test market? (laughing) >> I was in charge of hedging our one corn contract so I learned learned the mechanisms of the market. It was great experience. I traded commodities all the way through college. I got to go to West Point as undergrad. And I raced back to Chicago as soon as I could to go to the University of Chicago because that's where commodities were trading. So I'd go to night school at night at the University of Chicago and listen to Nobel laureates talk about the official market theory and during the day I was trading on the floor of the the Chicago Board of Trade and the Chicago Mercantile Exchange. Grown men yelling, kicking, screaming, shoving and spitting, it was fabulous. (laughing) >> Sounds like Blockchain today. (laughing) >> So is that what the dynamic is, obviously we've seen the revolution, certainly of capital formation, capital deployment, efficiency, liquidity all those things are happening, how does that connect today? What's your vision of today's market? Obviously lost thirty billion dollars in value over the past 24 hours as of today and we've taken a little bit of a haircut, significant haircut, since you came on The Cube, and you actually were first to predict around February, was a February? >> February, yeah. >> You kind of called the market at that time, so props to that, >> Yup. >> Hope you're on the right >> Thank you. >> side of those shorts >> Thank you. >> But what's going on? What is happening in the capital markets, liquidity, why are the prices dropping? What's the shift? So just a recap, at the time in February, you said look I'm on short term bear, on Bitcoin, and may be other crypto because all the money that's been made. the people who made it didn't think they had to pay taxes. And now they're realizing, and you were right on. You said up and up through sort of tax season it's going to be soft and then it's going to come back and it's exactly what happened. Now it's flipped again, so your thoughts? >> So my epiphany was I woke up in the middle of the night and said oh my God, I've been to this rodeo before. I was trading utility tokens twenty years ago when they were called something else, IRUs, do you remember that term? IRU was the indefeasible right to use a strand of fiber, and as the internet started kicking off people were crazy about laying bandwidth. Firms like Global Crossing we're laying cable all over the ocean floors and they laid too much cable and the cable became dark, the fiber became dark, and firms like Global Crossing, Enron, Enron went under really as a result of that miss allocation. And so it occurred to me these utility tokens now are very similar in characteristic except to produce a utility token you don't have to rent a boat and lay cable on the ocean floor in order to produce one of these utility tokens, that everybody's buying, I mean it takes literally minutes to produce a token. So in a nutshell it's too many damn tokens. It was like the peak of the internet, which we were all involved in. It occurred to me then in January of 2000 the market was demanding internet shares and the market was really good at producing internet shares, too many of them, and it went down. So I think we're in a similar situation with cryptocurrency, the Wall Street did come in, there were a hundred plus hedge funds of all shapes and sizes scrambling and buying crypto in the fall of last year. It's kind of like Napoleon's reason for attacking Russia, seemed like a good idea at the time. (laughing) And so we're now in a corrective phase but literally there's been too many tokens. There are so many tokens that we as humans can't even deal with that. >> And the outlook, what's the outlook for you? I mean, I'll see there's some systemic things going to be flushed out, but you long on certain areas? What do you what do you see as a bright light at the end of the tunnel or sort right in front of you? What's happening from a market that you're excited about? >> At a macro scale I think it's apparent that the internet deserves its own currency, of course it does and there will be an internet currency. The trick is which currency shall that be? Bitcoin was was a brilliant construct, the the inventor of Bitcoin should get a Nobel Prize, and I hope she does. (laughing) >> 'Cause Satoshi is female, everyone knows that. (laughing) >> I got that from you actually. (laughing) But it may not be Bitcoin and that's why we have to be a little sanguine here. You know, people got a little bit too optimistic, Bitcoin's going to a hundred grand, no it's going to five hundred grand. I mean, those are all red flags based on my experience of trading on the floor and investing in hedge funds. Bitcoin, I think I'm disappointed in Bitcoins adoption, you know it's still very difficult to use Bitcoin and I was hoping by now that that would be a different scenario but it really isn't. Very few people use Bitcoin in their daily lives. I do, I've been paying my son his allowance for years in Bitcoin. Son of a bitch is rich now. (laughing) >> Damn, so on terms of like the long game, you seeing the developers adopted a theory and that was classic, you know the decentralized applications. We're here at a Cloud Blockchain kind of convergence conference where developers mattered on the Cloud. You saw a great developer, stakeholders with Amazon, Cloud native, certainly there's a lot of developers trying to make things easier, faster, smarter, with crypto. >> Yup. >> So, but all at the same time it's hard for developers. Hearing things like EOS coming on, trying to get developers. So there's a race for developer adoption, this is a major factor in some of the success and price drops too. Your thoughts on, you know the impact, has that changed anything? I mean, the Ethereum at the lowest it's been all year. >> Yup. Yeah well, that was that was fairly predictable and I've talked about that at number of talks I've given. There's only one thing that all of these ICOs have had in common, they're long Ethereum. They own Ethereum, and many of those projects, even out the the few ICO projects that I've selectively been advising I begged them to do once they raised their money in Ethereum is to convert it into cash. I said you're not in the Ethereum business, you're in whatever business that you're in. Many of them ported on to that stake, again caught up in the excitement about the the potential price appreciation but they lost track of what business they were really in. They were speculating in Ethereum. Yeah, I said they might as well been speculating in Apple stock. >> They could have done better then Ethereum. >> Much better. >> Too much supply, too many damn tokens, and they're easy to make. That's the issue. >> Yeah. >> And you've got lots of people making them. When one of the first guys I met in this space was Vitalik Buterin, he was 18 at the time and I remember meeting him I thought, this is one of the smartest guys I've ever met. It was a really fun meeting. I remember when the meeting ended and I walked away I was about 35 feet away and he LinkedIn with me. Which I thought was cute. >> That's awesome, talk about what you're investing-- >> But, now there's probably a thousand Vitalik Buterin's in the space. Many of them are at this conference. >> And a lot of people have plans. >> Super smart, great ideas, and boom, token. >> And they're producing new tokens. They're all better improved, they're borrowing the best attributes of each but we've got too many damn tokens. It's hard for us humans to be able to keep track of that. It's almost like requiring a complicated new browser download for every website you went to. We just can't do that. >> Is the analog, you remember the dot com days, you referred to it earlier, there was quality, and the quality lasted, sustained, you know, the Amazon's, the eBay's, the PayPal's, etc, are there analogs in this market, in your view, can you sniff out the sort of quality? >> There are definitely analogs, I think, but I think one of the greatest metrics that we can we can look at is that utility token being utilized? Not many of them are being utilized. I was giving a talk last month, 350 people in the audience, and I said show of hands, how many people have used a utility token this year? One hand went up. I go, Ethereum? Ethereum. Will we be using utility tokens in the future? Of course we will but it's going to have to get a whole lot easier for us humans to be able to deal with them, and understand them, and not lose them, that's the big issue. This is just as much a cybersecurity play as it is a digital currency play. >> Elaborate on that, that thought, why is more cyber security playing? >> Well, I've had an extensive background in cyber security as an investor, my mantra since 9/11 has been to invest in catalyze companies that impact the security of the homeland. A wide variety of security plays but primarily, cyber security. It occurred to me that the most valuable data in the world used to be in the Pentagon. That's no longer the case. Two reasons basically, one, the data has already been stolen. (laughing) Not funny. Two, if you steal the plans for the next generation F39 Joint Strike Force fighter, good for you, there's only two buyers. (laughing) The most valuable data in the world today, as we sit here, is a Bitcoin private key, and they're coming for them. Prominent Bitcoin holders are being hunted, kidnapped, extorted, I mean it's a rather extraordinary thing. So the cybersecurity aspect of if all of our assets are going to be digitized you better damn well keep those keys secure and so that's why I've been focused on the cybersecurity aspect. Rivets, one of the ICOs that I invested in is developing software that turns on the power of the hardware TPM, trusted execution environment, that's already on your phone. It's a place to hold keys in hardware. So that becomes fundamentally important in holding your keys. >> I mean certainly we heard stories about kidnapping that private key, I mean still how do you protect that? That's a good question, that's a really interesting question. Is it like consensus, do you have multiple people involved, do you get beaten up until you hand over your private key? >> It's been happening. It's been happening. >> What about the security token versus utility tokens? A lot of tokens now, so there's yeah, too many tokens on the utility side, but now there's a surge towards security tokens, and Greg Bettinger wrote this morning that the market has changed over and the investor side's looking more and more like traditional in structures and companies, raising money. So security token has been a, I think relief for some people in the US for sure around investing in structures they understand. Is that a real dynamic or is that going to sustain itself? How do you see security tokens? >> And we heard in the panel this morning, you were in there, where they were predicting the future of the valuation of the security tokens by the end of the year doubling, tripling, what ever it was, but what are your thoughts? >> I think security tokens are going to be the next big thing, they have so many advantages to what we now regard as share certificates. My most exciting project is that I'm heavily involved in is a project called the Entanglement Institute. That's going to, in the process of issuing security infrastructure tokens, so our idea is a public-private partnership with the US government to build the first mega quantum computing center in Newport, Rhode Island. Now the private part of the public-private partnership by the issuance of tokens you have tremendous advantages to the way securities are issued now, transparency, liquidity. Infrastructure investments are not very liquid, and if they were made more liquid more people would buy them. It occurred to me it would have been a really good idea if grandpa would have invested in the Hoover Dam. Didn't have the chance. We think that there's a substantial demand of US citizens that would love to invest in our own country and would do so if it were more liquid, if it was more transparent, if the costs were less of issuing those tokens. >> More efficient, yeah. >> So you see that as a potential way to fund public infrastructure build-outs? >> It will be helpful if infrastructure is financed in the future. >> How do you see the structure on the streets, this comes up all the time, there's different answers to this. There's not like there's one, we've seen multiple but I'm putting a security token, what am i securing against, cash flow, equity, right to convert to utility tokens? So we're starting to see a variety of mechanisms, 'cause you have to investor a security outcome. >> Yeah, so as an investor, what do you look for? >> Well, I think it's almost limitless of what these smart securities, you know can be capable of, for example one of the things that were that we're talking with various parts of the government is thinking about the tax credit. The tax credit that have been talked about at the Trump administration, that could be really changed on its head if you were able to use smart securities, if you will. Who says that the tax credit for a certain project has to be the same as all other projects? The president has promised a 1.5 trillion dollar infrastructure investment program and so far he's only 1.5 trillion away from the goal. It hasn't started yet. Wilbur Ross when, in the transition team, I had seen the white paper that he had written, was suggesting an 82% tax credit for infrastructure investment. I'm going 82%, oh my God, I've never. It's an unfathomable number. If it were 82% it would be the strongest fiscal stimulus of your lifetime and it's a crazy number, it's too big. And then I started thinking about it, maybe an 82% tax credit is warranted for a critical infrastructure as important as quantum computing or cyber security. >> Cyber security. >> Exactly, very good point, and maybe the tax credit is 15% for another bridge over the Mississippi River. We already got those. So a smart infrastructure token would allow the Larry Kudlow to turn the dial and allow economic incentive to differ based on the importance of the project. >> The value of the project. >> That is a big idea. >> That is a big idea. >> That is what we're working on. >> That is a big idea, that is a smart contract, smart securities that have allocations, and efficiencies, and incentives that aren't perverse or generic. >> It aligns with the value of the society he needs, right. Talk about quantum computing more, the potential, why quantum, what attracted you to quantum? What do you see as the future of quantum computing? >> You know, you don't you don't have to own very much Bitcoin before what wakes you up in the middle of the night is quantum computing. It's a hundred million times faster than computing as we know it today. The reason that I'm involved in this project, I believe it's a matter of national security that we form a national initiative to gain quantum supremacy, or I call it data supremacy. And right now we're lagging, the Chinese have focused on this acutely and are actually ahead, I believe of the United States. And it's going to take a national initiative, it's going to take a Manhattan Project, and that's that's really what Entanglement Institute is, is a current day Manhattan Project partnering with government and three-letter agencies, private industry, we have to hunt as a pack and focus on this or we're going to be left behind. >> And that's where that's based out of. >> Newport, Rhode Island. >> And so you got some DC presence in there too? >> Yes lots of DC presence, this is being called Quantum summer in Washington DC. Many are crediting the Entanglement Institute for that because they've been up and down the halls of Congress and DOD and other-- >> Love to introduce you to Bob Picciano, Cube alumni who heads up quantum computing for IBM, would be a great connection. They're doing trying to work their, great chips to building, open that up. Bradley thanks for coming on and sharing your perspective. Always great to see you, impeccable vision, you've got a great vision. I love the big ideas, smart securities, it's coming, that is, I think very clear. >> Thank you for sharing. >> Thank you. The Cube coverage here live in Toronto. The Cube, I'm John Furrier, Dave Vellante, more live coverage, day one of three days of wall-to-wall coverage of the Blockchain futurist conference. This is the first global Cloud Blockchain Summit here kicking off the whole week. Stay with us for more after this short break.

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