SPEAKER_00: Bandwidth for This Week in Startups provided by liquidweb.com. Today's episode of This Week in Startups is brought to you by MailChimp. Manage lists with up to 2,000 subscribers and send 12,000 emails per month for free with MailChimp. And by Sourcebits. Visit www.sourcebits.com to begin your mobile app development journey.

SPEAKER_02: Hey everybody, it's This Week in Startups. It's our Friday news roundtable. There's a lot of news for us to discuss.

SPEAKER_04: Tim Cook's Apple just spoke at the All Things D conference and boy did he say a lot. Larry Ellison was there. He was a gangster. Kevin Rose is going to Google Ventures. And of course Facebook's stock is tanking and a complete utter disaster of an IPO. We're going to discuss it all here today on This Week in Startups. Stick with us.

SPEAKER_10: Hey everybody, hey everybody. It's This Week in Startups.

SPEAKER_14: I am your host, Jason McCabe Calacanis. McCabe is my mom's middle name. She gave it to me.

SPEAKER_17: My mom's last name made a name. She gave it to me. It's my middle name. So as you guessed, I'm Irish, Greek, and Swedish. But that's not what we're here to talk about. We're here to talk about startup companies and the technology industry. And every Friday we do our news roundtable. It's a particularly packed news week because the All Things D conference, which I was just at, finished up yesterday, Thursday, and we got a lot on our plate. Lon Harris is here to read us the news. Good to see you, Lon. You too. David Carter is here from Amplify LA, serial entrepreneur, and now running an incubator here in Los Angeles. How's everything going over there?

SPEAKER_20: Really well.

SPEAKER_17: Awesome. We'll get into that in a little bit.

SPEAKER_14: And James Altucher is on the GoToMeeting. James, how are you?

SPEAKER_23: Excellent. Thanks for having me on.

SPEAKER_17: James, you're a fan favorite because you say all kinds of quixotic things, and we got a lot to talk about. I like that word. Yes. Actually, I think it's Reid Hoffman's Twitter handle is quixotic. Quixotic, yes, it is.

SPEAKER_24: I mean, obviously I knew the word before that, but that's I think when I started really liking the word.

SPEAKER_28: From Don Quixote. That's where it comes from. Oh, is it really? Yeah, because he would try to take on impossible things that he couldn't possibly do with an outsized imagination, so hence quixotic.

SPEAKER_32: Very interesting. There you go.

SPEAKER_33: Thank you, Lon. I knew we had somebody with an Ivy League degree. Well, he graduated. That was really intelligent, yeah.

SPEAKER_04: Wow, that was some intelligent stuff. Hey, and if you're intelligent, you will use the services of Sourcebitz, Sourcebitz, Sourcebitz. They're a leader in mobile app, cloud, and web development and design. They do design-led engineering, just like Apple is famous for pioneering. And hey, they're backed by my friends at Sequoia Capital, and they did Sequoia's beautiful website. They work with companies of all sizes, Hershey's, Coke, GE, and they've made tons of the apps that you use every day, including TwitPic. Hey, check it out. If you guys use TwitPic, here's the iPhone app. I pulled it up here on my iPad, if you don't mind, guys. Maybe I'll have to hit that 2X button and blow it up.

SPEAKER_17: But, you know, to build a big, huge, scalable service like TwitPic, you've got to be doing something right. Oh, look, there's some people on the,

SPEAKER_36: there's Heidi Klum on with Martin Short and, who's that woman? I guess this used to be, who was the guy who had that morning show?

SPEAKER_41: Is that Regis and Kelly? Regis, yeah, but Regis is retired.

SPEAKER_42: It's Kelly Ripa, so it's a Kelly Ripa show, I guess. And Martin Short was on with... I saw that, with Kathie Lee, wasn't it? Oh, with Kathie Lee Gifford.

SPEAKER_43: And she was asking about his late wife, yes.

SPEAKER_44: His wife, who had passed away. I was like, Kathie Lee, read your notes. No, no text. No death in the family, any guest? None. None? I'm all good.

SPEAKER_47: Nobody's spouse died, God forbid, or anything. I don't have to worry about that. Happy, everybody's healthy. Between when I got my show notes. Anyway, listen.

SPEAKER_14: These guys do a great job. I stand behind them 100%. They're a great team. TwitPic is awesome.

SPEAKER_04: And if you do a meeting with Sourcebits, you'll get a 15 meeting with me. Wow, there's great, two for one. And if you end up using Sourcebits, we need to know about it. Because we will demo your app live on the program. You get a free plug if you use Sourcebits to help build your app. And email Sourcebits at thisweekend.com for more info. Email Sourcebits at thisweekend.com for more info.

SPEAKER_51: If you need help building your mobile app, these are the guys to do it and gals.

SPEAKER_17: And they are just really awesome. And I appreciate them supporting independent media. As you know, we get to choose the advertisers on the program.

SPEAKER_51: Help the program by just saying thank you at Sourcebits for supporting independent media

SPEAKER_29: like This Week in Startups on your Twitter account.

SPEAKER_53: Vlad, what's in the news? Well, so we've got to start by talking about the Facebook IPO. That's the big story. There were already cracks starting to emerge

SPEAKER_54: even before the IPO was officially set. In a May 9th regulatory filing, Facebook warned that their dearth of advertising on mobile might hurt their future revenue. There was also a lot of debate about the opening price of $38 and whether that was overvaluing the company. In the first nine trading days, the stock has woefully underperformed. At first, it was a short-lived 18% surge. The stock closed less than 1% down on its first day, but it has stumbled since. It's closed recently. I think $26, we were saying, was the low. It's at 27.72 right now, down 6.35 more percent. Yeesh. So, yeah, just 22% below its offering price. 34% below its first day peak of $45. And there have been other issues too, discussions of maybe certain investors were given more inside information than other investors. All sorts of issues with the NASDAQ and how bungled the sort of initial filing was. Absolutely, yep. So, you know, what happened here? And can Facebook recover? And I think the bigger issue would be, what impact is this going to have?

SPEAKER_56: There's already talk about Kayak delaying its IPO. Sure. What's the bigger picture impact this is going to have on tech IPOs?

SPEAKER_14: Well, let me ask my friend James. James, how do you get people to pay $90 billion for, how do you get people to pay $60 billion

SPEAKER_47: for a company that's only worth $30? Tell them it's worth $90. Well, we don't really know if Facebook's worth it. You like that, Jared?

SPEAKER_63: The market will decide. But, you know, you can easily justify $100 billion by saying, you know, a year from now, they'll have $2 billion in earnings

SPEAKER_64: and 50 times earnings, and they have enormous growth. But I think, as far as the IPO is concerned, clearly there was a disaster. The NASDAQ had like a mini flash crash just on Facebook stock. And what do investors hate most? They hate uncertainty. And that's exactly what we had when the NASDAQ was, everything was going wrong. The NASDAQ was messing up technically. So Facebook shareholders just stayed away. Investors, retail investors stayed away. And then it started dropping. And no one wants to catch a falling knife. Kayak, by the way, completely different story. I mean, their main source of data was just acquired by Google.

SPEAKER_63: Their CFO resigned. They're blaming it now on the Facebook IPO. But clearly Kayak has its own issues. So I don't think this has any long-term ramifications on internet IPOs.

SPEAKER_65: Morgan Stanley's got two internet IPOs happening in the next month or so.

SPEAKER_14: It's, obviously this was a lot of the buzz and joking at the D conference.

SPEAKER_17: And I got to see Sheryl Sandberg there and a bunch of other people associated with Facebook. I guess Dan Rose was there. A lot of people from Facebook were at the D conference. Here's the thing. The company is, if it wasn't a hyper-growth company, it would be worth, let's say, 30 times earning, right? $30 billion.

SPEAKER_14: It's now worth $60 billion, which is 60 times earnings for a hyper-hyper-growth company. As James was saying, $60 billion. He says $100 if it doubled it. So you have to then say,

SPEAKER_04: can they double the billion dollars in earnings to two? If they take that $1 billion bottom line and make it $2 billion in earnings, money actually coming in, that's profits. Okay, if it's still growing fast, is it worth 30 times, 60 times? This is the math you have to start doing on it. The fact is, a $60 billion market cap for a company that's probably worth $30 billion that has a ton of risk, if you believe it has a ton of risk. If you believe it has a modest amount of risk, this is a good price. And if you believe there's absolutely no risk, they're going to double their revenue for next year,

SPEAKER_14: then this is a good deal. And did I summarize that correctly, James? Do you think?

SPEAKER_73: Yeah, and you know, I think if you look at what Facebook is doing, every day I'm seeing them roll out new tools

SPEAKER_64: for advertisers. Like they just rolled out so you can promote new posts on your fan pages. So every day I see them rolling out new ways to generate revenues per user. And we're only in any one, I think, of how Facebook can generate revenues and profits. I don't think there's really any issue that they're going to continue to grow both people and advertising and mobile. So I think that the stock price is purely a function of the disaster that happened with the Nasdaq.

SPEAKER_76: David, what do you think?

SPEAKER_64: By the way, it was an extremely successful IPO for Facebook. They raised $1.5 billion and paid no fees.

SPEAKER_77: They raised $16 billion or $19?

SPEAKER_64: $12.5 billion. Oh, it's not like the insiders, right?

SPEAKER_63: They paid 1% as opposed to everybody else paid 6%. So this was the most successful IPO in history, pretty much.

SPEAKER_02: Yeah.

SPEAKER_14: Now they have a war chest of cash. They have a liquid stock that they can use to buy stuff. What is your take on it?

SPEAKER_80: Yeah, well, I just think that, as usual, the retail investors getting screwed. This control of information on Wall Street and how things are disseminated is ridiculous. I think we're ruining perhaps a generation of investors by just taking away trust in the market. I mean, people, a common person looking at the market right now knows they don't have a chance in hell. I mean, you look at very-

SPEAKER_84: Basically, everything that happened in the first web bubble, the chickens have come home to roost.

SPEAKER_14: People still do not trust the technology industry or Wall Street enough to give them their money for the long term, which means if you believe that, and I do believe that, and I think I heard James say he agrees, if you believe that, then that means the companies, for the people brave enough to buy them,

SPEAKER_86: are a great investment. If nobody wants to buy and there's blood in the streets, that's the time to buy. What do you think?

SPEAKER_80: Yeah, well, I mean, I think that greed had a big part in this. I mean, a lot of people, I had emails probably just like you probably a week before saying, hey, I have some Facebook shares available, blah, blah, blah. If you want to get in, my broker has shares, and anybody who knows that market would know that that means they're having a hard time placing them outside with more sophisticated investors. And anyway, at the end of the day, what happened is a lot of the people that really got hurt were the people that bought in at the opening or a little bit after the opening. $45. Yes, and then ended up selling because in a panic, they're like, oh my gosh, I don't want to lose all my money.

SPEAKER_87: Yeah, sell at 30. Yes, you know, I'm selling out.

SPEAKER_90: I just lost a third of my money, and now they're going to watch it go from 25 to 125 in the next three years, I predict.

SPEAKER_92: And I had heard that Morgan Stanley had sold a lot of shares without actually having them and bought them back later. So they actually made a problem.

SPEAKER_64: That's a really good point. Go ahead, Jake. I just heard today, Morgan Stanley was allowing a lot of short selling on the first day, which is highly unusual because where were they getting the shares to short?

SPEAKER_95: There were no shares available to short. So what they were doing should probably be investigated.

SPEAKER_17: Yeah, it's a very bizarre situation. And I got to tell you, I had been saying on this program, if you remember, Lon, and I don't know if James, you were on the program at that time, I was saying, this is, the market is going to have a great run up up until Facebook's IPO. This is going to be a great run because this is a truly going to be the next great company in America, potentially, could be an Apple,

SPEAKER_51: could be an IBM, could be, you know, a Google. And, but after that, I don't know. And now it's turned out that everybody got too greedy. The second market trades were at $34 two years ago. So if you bought on second market two years ago at $34, $35, $36, you're down to 25% now. I mean, think about that. You thought you were the sophisticated investor buying on second market at $35 or $40. Like, oh, I'm a high net worth individual. I bought at $40 a share. I got in. The IPO, it's going to be, you know, and then all of a sudden the IPO is not at, you know.

SPEAKER_04: Well, I mean, is this the...

SPEAKER_100: Not only that, Jason, all those guys who bought Facebook shares in the private markets, they're all locked up for six months.

SPEAKER_101: And they paid 6%, 7%?

SPEAKER_63: Yeah, they definitely paid fees.

SPEAKER_64: I could tell you, I was in the middle of some Facebook transactions. There were 10 middlemen in almost every single deal. How much in every deal? Almost 10 middlemen. You had two brokers, two lawyers, and then everybody who put everybody in the middle. So I would say on average, every deal got split up 10 ways.

SPEAKER_74: I know that second market got 6%.

SPEAKER_102: I got to think... Second market was a small portion of all the private Facebook's transactions that were happening.

SPEAKER_106: I would say there were less than 10% of all the transactions that were happening.

SPEAKER_04: And I think they did a couple of billion dollars. In fact, I know that because I saw Barry this week. So what you have now is, this could go into... There's two things, I believe. You have to start with, number one, this is a great company. They've accomplished a lot. They've executed better than almost anybody in the history of business. And getting to, you know, a billion people, which they'll get to obviously, is an extraordinary accomplishment. It's never been done before. They've done an extraordinary job making, you know, whatever, four or five billion dollars, a billion dollars in profit. However, they've greatly under-monetized

SPEAKER_51: and there's high risks in social that everybody knows about. But then you go back to the other side and say, but you still have the team there, Sheryl Sandberg, who's worth $10 billion in market cap in my mind, and Mark Zuckerberg, who's worth $10 billion in market cap. I give each of those people, you put those two people in a room and you buy some startup

SPEAKER_36: for $100 million, put them in, and the startup's worth $20 billion, $100 million. It's sort of the way I look at it. Those people are so good at executing in this space that if you put two of them in a room, you get $20 billion in value day one.

SPEAKER_51: Give them like any product. Give them Instagram day one or whatever product. They'll figure it out

SPEAKER_17: and make something awesome happen in all likelihood. So then, what is the future

SPEAKER_14: of this stock and the value of this company? They're not going anywhere. These guys and gals are not going anywhere. They've got a war chest.

SPEAKER_108: Now,

SPEAKER_36: all of these people who bought shares, there's going to be a lot of disgruntled people I think are going to give up. I think it's going to $25.

SPEAKER_04: I think it'll be a low $20 stock for a year,

SPEAKER_109: and then it could be in the coming years $100 stock, $150 stock.

SPEAKER_56: Which is in line with what Zuckerberg was saying. I mean, he said this is long term. He's not looking at short gains in the immediate future. So he did kind of warn people. I mean, so would you say, would you buy a $27 or would you wait for it to go down even more?

SPEAKER_74: You know, I tell people

SPEAKER_17: when it hits the low $20s, I will buy actually. And I think it's got a ways to go. The summer's going to be horrific. There's a lot of big risk factors going on right now. But this is something where James is an expert. I mean, there's a tremendous amount of bad news. Spain is a disaster. But Spain, in terms of its overall impact on the global economy, is single digit percentage points.

SPEAKER_36: And yes, unemployment in this country is a disaster. But the majority of the country is still employed and we're still adding a ton of jobs. So when you look at the big issues for corporations, corporations are more efficient and their gains in productivity

SPEAKER_114: are so great that they don't need to hire more people and they're becoming more profitable. And outsourcing. Yeah.

SPEAKER_117: And that would be an operational gain.

SPEAKER_100: Also, don't forget, private sector job growth has gone up for 26 months in a row. Yeah. So it's not as if the innovators

SPEAKER_64: and creators in this society are going away. You know, private entrepreneurs are starting companies and hiring people.

SPEAKER_121: Right. So what do you think about the macro issue, James? You know, Spain,

SPEAKER_14: you know, unemployment. None of this really concerns you all that much because the companies are fairly valued,

SPEAKER_36: becoming crazy efficient, are building amazing products that are better than any products that came before them and are growing like gangbusters. So while there's risk

SPEAKER_51: for a certain portion of society, let's say the lower middle class, whatever, these companies are in a stronger and stronger global position than ever,

SPEAKER_24: which we've been discussing for a couple of years now.

SPEAKER_64: Absolutely. You know, and look, Elon Musk just sent a rocket into space. Google has glasses that, you know, you could be logged onto Google all the time. You know, biotech is on the verge of curing practically every cancer out there. So it's not as if innovation has died and unemployment, the unemployment rate has been going down. Houses are starting to be built again. Banks are starting to lend again. So the U.S. is actually improving no matter what happens to Europe. Like, I don't care about Europe at all. I don't open up the newspaper and read about Greece. Like, that's, who cares about a beach resort there? But the stock market, of course, cares, and the stock market doesn't like uncertainty. Dave, what does all this

SPEAKER_86: effect have on the startups and Amplify running an incubator? You know, James said, it's not impacting people's propensity to start new businesses. Is that a correct statement?

SPEAKER_80: Yeah, I mean, I think we haven't really seen, I don't think I can't even remember anybody even talking about this, you know, in the past week or whatever. I think a lot of the startups that we're working with are really heads down in building their company,

SPEAKER_130: right? And so, unless their market touches on this for some reason, they're not even aware, or I should say they're aware, but maybe not focusing on it.

SPEAKER_131: Yeah, I mean, I talked to a friend of mine who owns a company called Skip Hop.

SPEAKER_17: They make kids products and his company is doing tremendous. And I was like, so what impact, does Spain have on any of us or whatever? And he's like, oh, well, their orders are off, you know, this percentage. I was like, wow, that's a pretty significant percentage. He's like, yeah, and the person there says it's a disaster. He may close his company. Nobody's buying products. People are very, you know, it's a disaster, et cetera, et cetera. I said, so how's your overall business doing? Oh, it's growing like gangbusters. Year over year is incredible. Brazil, China, India, you know, these other countries, England, Germany, you know, like things are just gangbusters. So I said, okay, so there's always going to be two or three places going down or imploding. I don't think it has any impact. I mean,

SPEAKER_56: well, it's the potential for Europe as a whole. I mean, I'm not necessarily agreeing with the position that Europe's going to tank the U.S. economy, but it's that if the EU, you know, if Germany then suffers because they have to bail out Greece and Spain, it causes a collapse of the Eurozone and then all of our

SPEAKER_136: European trading partners

SPEAKER_137: are impacted. The problem we have, I think, at Amplify would be if investment dries up, right? Right, the angel investors feel poor

SPEAKER_40: because their portfolios go down 30%.

SPEAKER_87: You are screwed. That's right. I've seen that when the market hits down

SPEAKER_80: people. I swear, three years ago. Yeah, they go into a holding pattern and for us, a way that we measure our success is our companies getting funded. And so if companies aren't getting funded, then we're in a tough spot.

SPEAKER_142: Okay, so let's say

SPEAKER_17: one of two or three horrific things happen. One, maniacs in Iran decide they're going to drop a new gun. You know, Israel or Israel

SPEAKER_04: decides rightfully so. I mean, I'm just trying to say this as objectively as I can. Israel decides rightfully so to bomb the hell out of their nuclear positions with our help or not. And the Strait of Amuse is shut down and everybody panics. Number two, the stock market collapses because of Greece. Everybody loses 30, 40% of their money or God forbid, three, a terrorist attack occurs in the United States. Somebody starts blowing up buses or some insanity like that. And again, people, you know, stock market collapses 30, 40%. What happens to all these accelerators? I mean, you guys just shut the doors. You guys tell everybody the goal is not raising money anymore. The goal is building a business that can hit break even by the time you get out of this accelerator because the accelerator boom is based on the angel boom.

SPEAKER_77: What happens if the angels go away? Yeah.

SPEAKER_80: So it's, you're right in that we rely on angels. We have a lot of venture funds too that put money in companies. I think the biggest risk is if people go into a hold pattern like you're saying on the investment side. So it's definitely a risk that we have. I mean, any company that you do, you have a risk. And so one thing I have seen though is entrepreneurs can be very resilient. I have a deal that I put money in about six months ago and I put like 50 grand in and the guys have like 20 grand still in the bank and it's like four of them working 24-7. I mean, who would have ever thought they've had to pivot a couple times

SPEAKER_148: and so I've seen things like that. We can be like cockroaches.

SPEAKER_44: But what percentage of them are like that

SPEAKER_36: today in all honesty because we've seen there are so many companies right now I think we hit one speed bump 60-70% of these startups

SPEAKER_51: are done. Done. And then I think the accelerators

SPEAKER_04: are doing three people a class, not 10. Or 80. You know, Y Combinator goes down to well, they'll have enough money in the bank but they may not have the entrepreneurs who are willing to take on the risk and the angels afterwards

SPEAKER_05: it goes down to 25% of the number of companies but they'll be the stronger more resourceful ones.

SPEAKER_80: I think one of the things we have going for us too is a lot of our deals have revenue and so they have moneys come in we have one deal that has 360,000 worth of booked revenue that came in after they came in we have another deal that went 20,60, 120, 180,000 per month in revenue. Yeah, so we have deals that are actually generating cash and I think our entrepreneurs are focused on the revenue not all of them but a lot of them.

SPEAKER_17: You know, I have a great solution for all of this when the market collapses I'm going to start a gun of the month like a box club like Whittleby but for guns and other survival equipment.

SPEAKER_155: So like Whittleby we get a personal profile on you and then we just send you a different gun and bullets and all kinds of stuff. When we get back

SPEAKER_44: from the commercial break we're going to talk about Apple

SPEAKER_51: and Mary Meeker's talk and Kevin Rose going to Google and a bunch of other awesome stuff but something that is awesome and a company that will be with us for all time

SPEAKER_04: at least if I'm a customer that's going to happen because I use these guys every day of the week MailChimp, MailChimp, MailChimp

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SPEAKER_04: ee ee ee ee ee and cut scene. MailChimp I use it every day it's a great product and the free plan is always free 2,000 subscribers and 12,000 emails per month you get all this amazing reporting you know who's opening your emails or how many people are opening them

SPEAKER_17: it works they have all kinds of great tools and they manage the spam relationship you know there's a lot of people out there who do all kinds of nasty stuff with email and MailChimp is the trusted company so when you align yourself with them you know you just all these problems of like going into spam folders it goes away why? because they won't let you use the service if you're using it for one of those nefarious reasons and they have those deep relationships with the other people who you know are managing the email services so they'll work stuff out for you I've had people you know not get my emails you know because I got into some kind of spam filter and they told me

SPEAKER_51: like oh by the way in your email you said this curse word or you said these 17 curse words in your email or you mentioned this or you mentioned sex or Viagra or something

SPEAKER_14: and they're like you know you might want to take that out and they have tools now that they showed me in their service where you can run your emails against these and it tells you hey what percentage is this likely to get caught

SPEAKER_17: in a spam filter because the spam filters are getting a little bit more aggressive and you can do all kinds of Twitter integration to see who your subscribers follow and what they're saying about you this Tweet Trends product is amazing also you can crop resize and add filters to your images inside of MailChimp no Photoshop needed and these guys just keep adding features like that over and over again that image feature is something I've been wondering about because you know I have to have a designer sometimes you know get all these images ready to put in my email and then I wish like oh I just want to tweak it a little bit now you can do it inside the program it's fun and it's drag and drop file uploads there is no contract there is no trial the free plan is always free and you pay as you go because you're so god damn confident in that service

SPEAKER_36: it's so god damn good that you don't have to pay off two year contract anybody who's trying to get you into one of those two year contracts them bastards are trying to screw you over MailChimp is not you pay as you go pay for what you use that's why I love it

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SPEAKER_114: ee ee ee

SPEAKER_168: ee ee ee how was that it was good is your is your ad going to get caught in a spam filter because you used god damn twice god damn it someone's got one

SPEAKER_172: concern okay you mentioned viagra three times i mentioned viagra three times and now we've got the itunes itunes is giving up the adult itunes is a tag itunes is a tag

SPEAKER_121: itunes is a tag all right next story

SPEAKER_54: all right so we'll talk a little bit about d10 on tuesday night apple ceo tim cook gave his first major interview since ascending to the top apple job last year his chat touched upon a whole lot of different topics including his personal goals for apple and his relationship with steve jobs he refused to give details on apple tv plans because he said you know as with apple he never wants to talk about a new product facebook collaboration in the offing and now that has basically been confirmed by tech crunch

SPEAKER_56: saying that it's going to be facebook integration will be baked into the next version of ios and possibly in mountain lion as well and he stressed the need for the company to be social he used twitter integration in ios as an example without necessarily needing to have its own powerful social network kind of conceding that bing did not ping did not really connect within itunes so how did you think cook did

SPEAKER_54: generally under the spotlight in his first big sort of ceo presentation moment and how do you think are there things you think he might do better than jobs

SPEAKER_14: um yeah there's definitely things he'll do better than jobs um he um he's not trying to replace steve jobs he's trying to be himself

SPEAKER_51: he came across fabulous but boring um and he he has a passion that

SPEAKER_17: would be more like a coal as opposed to a comet right so steve jobs is incredible comet you know like this meteorite going through our universe just burning brighter than anything you know possible um but he's got this like very like burning coal like he wants he sees it as his duty to make sure

SPEAKER_51: apple continues on in steve's vision building the greatest products and has the greatest people and he feels like the perfect person to carry on the legacy in that way actually made me feel very confident in him

SPEAKER_17: and he under pretty brutal grilling while he wouldn't say what they were going to do he was he absolutely said they're making a tv without saying he said we're not a hobbyist company we've been working on apple tv for three years so steve jobs would say we're not building a tablet we're not building a video ipod he would just lie tim cook he would play with you you know well everybody in our company

SPEAKER_51: including myself 100% of what i watch on tv is through apple tv we love this product and we just added hdmi to it and it's doing better than ever and we sold as many in the first six months of 2012 as we did all of last year we're not a hobbyist company when we do something we do it right he basically said that yeah which basically means like and they said and we're going to follow the string

SPEAKER_36: of where to where it takes us and he said that three times follow the string where it takes it basically means they're going to have a tv but we're not going to have it until next year go ahead

SPEAKER_126: he also said he also made it clear that although he's not going to lie he said specifically we're going to double down on C4C so we're not going to get anything new from him and they kept trying

SPEAKER_63: to drill him on Apple TV and on potentials for the next iPhone or iPad and he would just say I am not going to tell you he did that

SPEAKER_84: I'm not going to tell you right but then he would give these long so you're absolutely correct he would say that but then it would you know he's got this like little bit of like a playfulness to him where he's like this is the truth we're going

SPEAKER_51: little catty like I'm going to play with you a little bit like a cat playing with a mouse you know like you're not getting your information won't Mossberg or you know Kara Swisher but let me tell you this when we in case of like multiple sizes for the iPhone

SPEAKER_40: he's like you know we had multiple sizes for the iPod

SPEAKER_04: and let me tell you how we came to those decisions we came to the decision for multiple iPods because we found a feature or a function that necessitated a different size day and I love and that's one thing we did and we named it differently but it was part of the iPod family and when we find a unique function that requires a different form we do it and this is like okay he's basically saying nobody would argue that the Kindle has a different footprint because it's for a

SPEAKER_36: different function which is reading books and the tablet is a more full functional device it's obvious they're going to make a bigger phone and a smaller iPad it's obvious right and he basically said here we do do that I don't think he would take the time to explain that they do that if they weren't going to do it I think that was his way of like sort of like I can't tell you but here's or and maybe he's just totally setting people off in a different direction maybe that whole like we're going to follow

SPEAKER_51: the string and we're not a hobbyist company is to get people off the scent of the fact that they're doing a pen

SPEAKER_17: and they filed a patent for a pen with hip heptics what's the word where you touch it and it vibrates and haptics is when you you know like when you touch the screen on your Android phone it shakes

SPEAKER_191: yeah

SPEAKER_05: yeah it's haptics I think is how you say it anyway with that eye with a phone so anyway he was awesome he was great you know one thing

SPEAKER_73: that was interesting was

SPEAKER_126: he still reiterated the tablet and the PC are different and I think he'll run into a problem when people start making like Microsoft Windows hybrid tablet PCs I think

SPEAKER_63: that's going to be Apple's biggest challenge over the next year and he kind of skirted that issue by saying they're separate we'll see if he's lying or not there

SPEAKER_195: yes that'd be an interesting one you know one of

SPEAKER_17: the hottest selling devices and I'm seeing more and more of and actually today my wife was going on a trip

SPEAKER_51: to New York for her sister's baby shower took my Kensington iPad key Bluetooth keyboard and said can I borrow this and I never use it because I'm like it's terrible like Bluetooth for whatever reason has this crazy lag and I have to bring both devices but for her she's going to do light typing so she wants to bring it and she wanted me to know how to do it and then at the event

SPEAKER_04: I gotta tell you every one of these wanker banker lawyers all these they can't just take their iPad they gotta bring the iPad keyboard and at which point I'm just like well you just leave the goddamn iPad at home and just take your MacBook Air because if you're seriously doing computing that's what you're supposed to do but I think your point James is astute which is Windows the new Windows coming out is awesome and I was talking to a guy senior senior guy most senior guy at Nokia at the event and he was showing me the Lumina and how gorgeous it is I mean

SPEAKER_51: if you've played with that Windows operating system for mobile it is buttery I mean it is as nice as oh it's nicer design wise and much more avant-garde

SPEAKER_17: and beautiful if you were to show the Android device the Apple device and the Microsoft device and say who made each one you would say Apple use the products and I think it's a stoop point James makes which is the way to win in the tablet wars would be to sell a $600 device

SPEAKER_198: that was a hybrid with no compromise and you could just take this off and separate it and we're going to see that

SPEAKER_126: in the next six months Microsoft and their partners are going to start to release those

SPEAKER_204: I think it's really

SPEAKER_80: interesting to see how Apple releases their products versus Microsoft Microsoft they kind of let everybody know about their products a long time before and as a competitor that's really tough because sometimes they put out a product that isn't going to be out for another year or two and as someone trying to develop a potentially competitive product you're like oh my gosh it creates a lot of doubt with buyers

SPEAKER_90: yeah they call it a vaporware

SPEAKER_91: it was actually a Microsoft strategy back in the day they'd be like we're coming out with a Salesforce you know SAP killer we're coming out with this killer

SPEAKER_51: that killer and they would never release it I mean they were coming out with a Lotus notes killer forever I don't think they ever released one but it kept institutions from buying it and

SPEAKER_17: I think Microsoft actually if they separate that company into a couple different parts could be a great potential

SPEAKER_208: it's really hard to do consumer

SPEAKER_80: and enterprise there are different things and it's hard to be both one is just

SPEAKER_29: so design focused the other one is stability and pricing

SPEAKER_17: and other driven but yeah Tim Cook represented Apple well I would say if you owned

SPEAKER_51: X number of shares of Apple a thousand shares of Apple you would have walked

SPEAKER_04: out of the keynote saying I want to buy more and not sell them it made me feel confident I think actually his approach to business of being a little bit more open than Steve but yet still you know so for example not having the Facebook relationship done was a principal thing for Steve but Tim's making his own decision on that because Steve Jobs told him on his deathbed you make your own decisions and he recounted that story at the event

SPEAKER_51: that Steve told him don't do what Disney did when Walt Disney died

SPEAKER_17: everybody sat around in meetings and said what would Walt do and then never did it because it wasn't what they would have done he said when I die you guys go into meetings and you do what you think is best and you do what you think is best based on these

SPEAKER_51: general rules that we've all agreed on design and ease of use but do what you think is best and Tim Cook if you look at

SPEAKER_14: how he's handling the factory issue and the suicides and all that much different than the way Steve Jobs did Steve Jobs was like no manufacturing in America Americans can't do it it's a joke

SPEAKER_36: it's got to go there in a row so they can build up as much money as possible and then take it back to their village

SPEAKER_04: we don't want to do that because that cost us too much stress he didn't say this exactly but basically this causes suicides right if you overwork yourself to death

SPEAKER_218: right

SPEAKER_04: in those conditions so he said they're tracking

SPEAKER_219: every day the hours of 700,000 workers that are not

SPEAKER_04: their workers to make sure they're compliant and posting that every month to their site and he says we're going to be more transparent than any company has ever been we already are and we want to set the standard for this and we want to raise wages and we want to do this and we want to build factories in the United States again and here's what it would take to do that and we're already building our glass in Kentucky for your iPhone from Corning so we'll do

SPEAKER_36: it when people do it so I mean that

SPEAKER_17: those were like if that was Steve Jobs up there and when it was Steve Jobs up there just two or three years ago he would be like not possible in America yeah you know

SPEAKER_36: just absolutely dismiss it next question you know this guy is a humanitarian and he's going to take Apple shoots and the dividend is another thing Steve Jobs would never give shareholders back any money he'd say I will find a creative use for this money and Tim Cook was like listen we're making so much money that we looked at every single

SPEAKER_51: possible thing we could do in the future and then added a bunch and then added a bunch and then there was still money left over

SPEAKER_53: so we thought well we'll just give those back to some of the shareholders been loyal to us so after seeing him talk have you turned around because I know you were very anti that decision no I

SPEAKER_14: think it's I think giving dividends basically signals you're not a growth business anymore and the world is changing and there's no reason there can't be a trillion dollar multi trillion dollar company in the

SPEAKER_36: next couple of

SPEAKER_04: educational discounts over the next year then give 10 billion dollars to those greedy Apple shareholders James what do you think

SPEAKER_64: well two things one is Apple stock market already considers Apple a non-growth company it only trades for 10 times next year's earnings so it could easily double just based on the fact that most companies with 100% growth trade for 30 or 40 times earnings let alone 20 times earnings but the other thing about offering a dividend is now for the first time ever mutual fund companies that can only buy companies that offer dividends can now buy Apple so they opened up the Apple stock to tens of billions of dollars of new potential investors this alone will propel the stock once the market starts to come back

SPEAKER_232: so if you're yeah for that reason it's an okay bet

SPEAKER_64: yeah no matter what problems I think Apple has like and I think this hybrid issue might be a big problem Apple's going to be the first trillion market cap company

SPEAKER_235: hands down

SPEAKER_204: yeah you know dividends increase stock price too a lot of people are dividend producing stocks

SPEAKER_130: right now that's a lot of people look at that as your only way to gain income I just

SPEAKER_91: feel like the way Microsoft when Microsoft did their dividend their stock just went sideways for a decade and it's like every conversation about Microsoft is about the dividend not the products they're creating and the profitability and the earnings of those profits how much is our dividend going to be and not how much are you investing in R&D and I just I don't like it as a decision but I

SPEAKER_77: understand the points that you're both making

SPEAKER_130: one thing I was going to say too is

SPEAKER_80: actually more profitable to do the right thing

SPEAKER_86: absolutely I mean

SPEAKER_17: their computers used to say on the box made in Cupertino made in whatever San Jose lovingly made whatever and people

SPEAKER_04: would Americans certainly pay more for an iPad or an iPhone that was assembled in the United States

SPEAKER_134: or the component parts more of them were made in the United States that has pretty much been shown or

SPEAKER_80: what's done humanely I look at Nike they had a bunch of issues with all that caused huge havoc they had to change their ways

SPEAKER_114: the globe seems to

SPEAKER_04: although it does it slowly parity does seem to

SPEAKER_36: people are poor people looking to get a deal value minded consumers are going there because they're like well kale is $4 at Whole foods and I can

SPEAKER_54: they're not they're not they're they're not they're they're they're they're they're many more topics so here's some just some quick highlights you can let us know what you five times lower on mobile than desktop Kleiner did not invest a penny in private companies during the last quarter as they

SPEAKER_56: felt prices were too high so as private valuations rise when public valuations of companies like Facebook and Zynga fall there's potential for private investors to lose money and finally the volume of Facebook shares traded on its first day exceeded the average daily volume of the entire New York stock exchange so she did not criticize those involved but said if Facebook had conducted an auction instead of a traditional IPO the price would probably have been a lot higher due to the demand

SPEAKER_14: yeah I mean she's great with these

SPEAKER_17: James James who did she

SPEAKER_260: do for she was at Morgan

SPEAKER_17: Morgan yeah and what stood out to you as the single most important statistic or concept from hers

SPEAKER_64: well for one thing she was talking about the internet growth and we're all surprised about Nigeria and Indonesia but you know Nigeria is the seventh most populated country in the world so she just kind of said the basic facts but the mobile growth I'm really curious if she's including laptop and again the issue of the hybrid laptop PC in her numbers because once you start merging the tablet with the PC I think or the tablet with the laptop I think that changes the mobile numbers and

SPEAKER_14: and because advertisers have not

SPEAKER_36: figured out exactly how to use it yet it's making one fifth the price but you have to remember when Google started their auction I

SPEAKER_64: might not be a CPM or CPC issue at all it might be more innovative type issues that Foursquare or Roupon might develop yeah

SPEAKER_270: I

SPEAKER_17: mean let's say

SPEAKER_270: you

SPEAKER_17: can do some things on mobile that you can't do on the desktop

SPEAKER_51: like I know that you're within five blocks of this place and I know what apps you have on your phone right and I know what mobile searches you've done before right so there's this whole subset of things that'll be able to occur I know you have Yelp on your phone or you're a Yelp user I Mexican feast hour because I don't check

SPEAKER_273: into Mexican food is terrible no offense to the Mexican people food is just terrible it's

SPEAKER_275: the same seven ingredients five to fifteen hundred different ways do something great of Mexican people I don't mean to take down the whole culture

SPEAKER_279: all

SPEAKER_278: of Mexican food just dismissed like

SPEAKER_17: come on so I think that was kind of a weird thing but you know Mary stocks are always great and yeah I mean I think the interesting thing is that they didn't invest in any private companies but I mean they also she didn't bring up the fact that Kleiner is in the middle of this huge scandal so yes that was by the

SPEAKER_14: way that was there were two things people if you want to know what's really going on in the industry there were two things people were really talking about the Kleiner scandal and

SPEAKER_287: which we have in our

SPEAKER_51: they seen this movie before and they know that we're at top valuation range and that it's very hard to make money I mean I've stopped angel investing I was very generously a lot of the Y Combinator

SPEAKER_04: founders in the last round were like we really want you in our deal we're oversubscribed but we know the value you bring and we want to be associated and have you as a person on our list to be able to call or ask for a tweet and I said wow that's great and then they you know the valuations were

SPEAKER_17: you know three times what I did for all the deals I did in the last three years you know like I'm

SPEAKER_51: doing deals at two three four five six million angel deals that seems reasonable to me if I hit one out of

SPEAKER_17: 20 becomes you know 100 million dollar company which is probably what will happen then I'm people

SPEAKER_293: are paying it

SPEAKER_17: yeah I mean

SPEAKER_293: I

SPEAKER_17: would never do an uncapped note

SPEAKER_293: I

SPEAKER_17: mean if Mark Ingus or Evan Williams I would do it but you know unless you're like somebody who's got massive track why would you even do that I

SPEAKER_56: she claimed she was the victim

SPEAKER_54: of sexual harassment by Ajit Naser a former Kleiner Perkins investment partner who left the firm late last year the suit alleges that Powell and other female employees were left out of meetings held by the firm's male partners and were generally passed over for promotions

SPEAKER_56: because of gender and because she did not respond to Naser advances in a post published on Kleiner's official site door wrote that there's been an independent investigation by Kleiner Perkins and they found that the lawsuit

SPEAKER_54: claims are without merit so I saw arguments from both sides that this is likely to make VC firms less likely to hire women because now they're afraid of situations like this and also that women may start shying away from taking positions at these boys club VC firms for fear that this is the sort of thing that's going to happen so what do you think the industry can do to counteract this

SPEAKER_56: and in general what can a company like Kleiner Perkins do

SPEAKER_64: it's important for venture

SPEAKER_63: firms to actually hire women but maybe there could be sort of formulas stated in advance on how you do things like promotion you know it could be a function of deal flow plus you know money made over the course of your time at the company plus how much you're helping the companies you're involved so some sort

SPEAKER_302: you're like I have to get funding from these guys

SPEAKER_80: I think they're a great firm they've funded two deals that I've been in and I'm not saying anything negative about them I do think that it's just part of the business where you have 90 to 10 or whatever it is as far as women to men you're going to have problems there and at the same time people just they meet at work and they get married and have relationships it's just part of life I mean yeah you know so so it's like I think that you know try to stop that totally is going to be impossible it's just human nature in fact I

SPEAKER_56: especially in this industry where people are working 16 18 hour days and seven days a week and you're always aware where else

SPEAKER_312: are you going to go here's the now I

SPEAKER_04: there

SPEAKER_36: are many men who have been falsely accused of sexual harassment or shaken down for

SPEAKER_185: sexual harassment when their behavior might not have been anywhere near actionable and there

SPEAKER_04: are situations where people and I've seen I've been involved in one of these not personally but in a company that I was associated with where one person didn't entrap the other person the other person behaved badly and the other person just led them right along to set up a case against them okay again

SPEAKER_315: I know nothing about this situation however here's what the buzz was at the conference and

SPEAKER_296: this is going to get a little controversial so I'm going to have to really there's going to be some pauses in what I say

SPEAKER_17: okay number one Kleiner has been the most diverse firm of all the firms it's

SPEAKER_222: 9 out of its

SPEAKER_17: okay that's number one number two three four five people said that there is a lot more to this story coming and that this might be a shakedown and a scam as they said it to me

SPEAKER_318: from pow like she's this is part she right

SPEAKER_195: so not that these things didn't occur but there was something here and then they told me

SPEAKER_14: and tweets started happening about who is her husband her husband according to what people are saying on twitter is a guy named buddy fletcher who's an african-american guy who has done multiple discrimination suits they've been married for

SPEAKER_04: some time ellen powell and him they have a child together he's been involved in a bunch of other suits so then of course the

SPEAKER_51: get term sheet dot com a fortune yeah

SPEAKER_320: he's a fortune he's a fortune

SPEAKER_51: finance right and so he brought this up on his twitter account and a lot of people started to get back to him and say well what does her husband have to do

SPEAKER_14: with her and as one person said to me they think her husband is putting her up to this and

SPEAKER_51: that somehow this was some strategized thing now the guy Randy Comazar there's two people that said Randy Comazar gave her a book of poetry or something and made an advance it's

SPEAKER_300: funny how often that comes up in these suits because that's exactly Monica Lewinsky and Clinton it was the same thing he gave her I don't know what it is with old guys and supposedly

SPEAKER_195: Randy

SPEAKER_17: is a married guy and I know Randy actually I

SPEAKER_84: poetry and made an advance the other guy was additionally her peer at

SPEAKER_36: the time made multiple advances who I've never met I'm sure I've met him but I don't remember meeting him Ajit supposedly was her peer and then made advances she's

SPEAKER_28: saying back in 2006 he made advances she rebuffed him and then she started getting flacked no no she

SPEAKER_84: rebuffed him and then she slept with him two or three times while she was married to this other buddy who somebody else wrote was a gay man for some period of time and then married her that's on wikipedia I don't know how

SPEAKER_330: reliable if you look at his wikipedia page

SPEAKER_335: it says he lived with his partner Hobart folks jr

SPEAKER_77: yes and so this was the talk of the thing

SPEAKER_335: is

SPEAKER_77: this some

SPEAKER_17: Machiavellian guy who has set her like maybe this guy is some kind of like scam artist who is preying on

SPEAKER_51: her somehow to set this whole thing up like a Svengali situation nobody said that word but that was what they were short of getting at I don't even I should be honest I don't remember the person who was telling me this because it was like I walked

SPEAKER_225: into a conversation of it so if I get subpoenaed for this by anybody I don't remember who said it

SPEAKER_84: subpoenaed me to come in and say who said that and I actually don't remember what it

SPEAKER_54: would be hearsay regardless unless you were talking to Ellen Powell or no no but they could say they want

SPEAKER_36: to know who said that and then they want to go subpoena to that person so I probably should have said that I actually don't

SPEAKER_24: remember who said it it it was in some group conversation somebody was I walked into it I didn't even know the people anyway putting that disclaimer aside I don't remember who said this you do

SPEAKER_345: have to think from her perspective she spent so many years attaining this

SPEAKER_36: been sexually harassed she must have been treated unfairly she must have had this there must be some truth to this or they

SPEAKER_24: $50 million settlement here I think these sexual

SPEAKER_51: harassment claims are taken very serious and rightfully so by our government James what do you think given everything I've just said

SPEAKER_262: you know I

SPEAKER_64: still

SPEAKER_36: that's right a little more transparency in how the meritocracy works right because and this is the thing there are a lot of firms out there

SPEAKER_51: like Benchmark Bill Gurley's firm who I'm very good friends with Charles River George Zachary's firm who I'm very good friends with I or Sequoia that's been built over decades like the person who's on top Doug Leonie or Michael Moritz like they deserve more but for these upstarts like actually a social capital partnership I understand has the same thing so the way these guys are combating those big mega firms where the economics are shared differently amongst the partners is they're saying to the young up and coming partners not that I have any information on this

SPEAKER_354: they

SPEAKER_36: want to give you equal economics coming in so let's say they wanted to theoretically recruit a guy like me their pitch theoretically would be we'll give you equal economics to all of us we're all the same we all are going to fight like dogs in a pack

SPEAKER_04: of 10 to

SPEAKER_219: tiny little share was like 20 million dollars

SPEAKER_36: and the Facebook IPO so you're like a junior

SPEAKER_84: guy who just happened to get into Excel you just happened to be there when that investment in Facebook happened you get 20

SPEAKER_130: based upon this adding these numbers or these things I mean there's a lot of things that

SPEAKER_237: are not tangible so

SPEAKER_64: you know money made profits made by a firm based on whether or not you've been involved in the deal that's tangible

SPEAKER_40: yeah so they do have that but then what they want to do is they don't want it to be

SPEAKER_74: they want everybody to be because the funds are paid off on a group basis you know if you happen to hit Google

SPEAKER_17: and I happen to hit you know Infoseek and you know I

SPEAKER_51: also told the LPs know the performance of individual partners at firms so when the LPs the limited partners who put the money into the venture

SPEAKER_36: firms and then the venture firms go invested when they look at firms they don't look at the firm's track record they say who are the individuals at the firm what are their track records who did you

SPEAKER_04: they are not saying to Cleveland Cavaliers what's your seven year performance how many games did you win they are saying okay who was on your team what was their individual performance oh this

SPEAKER_51: performer LeBron is no longer there oh his performance then tracks over to that other firm

SPEAKER_17: so it's very interesting how sophisticated the LPs are they know what's going on so anyway just as a general disclaimer at the end of this whatever the situation is I feel very bad for whoever has been wronged in this situation and gosh if you're a young person starting in business especially if you're a founder just

SPEAKER_167: especially as a CEO Lon

SPEAKER_368: well

SPEAKER_138: the CEO founder that's just a given but if you're rank and file you gotta

SPEAKER_370: be super careful I

SPEAKER_156: won't be alone there's only one employee in this company too maybe that I will ever

SPEAKER_17: be alone on a flight with or whatever it's like Jason Rapp the president who I've known for over 10 years Tyler Crowley who I've known for like seven years and Sean Gold I

SPEAKER_219: be a venture capitalist why on earth would you hit on somebody in the building

SPEAKER_341: there's only 38 people there nine of them are women there are more than nine women outside the Kleiner Perkins building

SPEAKER_372: a lot of it is

SPEAKER_28: wrong

David Friedberg: like you don't have enough game what do you think James

SPEAKER_381: well most people are losers

SPEAKER_102: so it's gonna happen you know if

SPEAKER_84: this if the person who's accused is in fact guilty this guy or whatever if he

SPEAKER_36: colossal loser if the only person you can possibly woman you can carry on a conversation with is the one in the cubicle next to you leave her alone

SPEAKER_17: so was he married I don't know what that guy Randy was according to the claim I don't think the other guy was but who knows go to

SPEAKER_36: match.com and eHarmony and put in I am a loser who can't get girls I work at venture capital no you write that I'm a loser who's awkward with

SPEAKER_312: girls but I work at the most famous venture capital in the world lead with that I would lead with the venture capital well

SPEAKER_385: yeah okay I'm a venture

SPEAKER_36: capitalist who has no

SPEAKER_385: game thank you

SPEAKER_36: I don't want to hit on the women at work for fear of a potential sexual harassment lawsuit so I type of person if he is in fact one of those type of people that group that type of person is such an idiot because they don't understand how charming it would be to a woman to just say listen just pick the most beautiful next time if you if you hear my voice and you are a colossal loser walk up to the next beautiful woman you meet

SPEAKER_05: and say I'm sorry to interrupt you at the Starbucks line I am incredibly awkward with women in fact most people would say I'm a loser but I just want to tell you I think you're the most beautiful woman I've ever seen and I would love to buy you a coffee sometime and I'm actually a really normal guy but

SPEAKER_393: cooking class I need to host it's so it really is a pick up

SPEAKER_395: artist like that show no I don't want to do that kind of stuff but

SPEAKER_40: I'm just saying you you goddamn losers get yourselves together and just women they want to meet a nice guy all the I mean anytime I meet a single woman you got any friends who are single and normal who are not on drugs actors and wearing more

SPEAKER_17: product in their hair than I am this is Los Angeles where guys more product in their than women like I don't want a guy who gets waxed more than me

SPEAKER_300: right and politicians is another guy that's why you hear so many stories like this coming from politics and big business John Edwards

SPEAKER_402: is a prime example of a guy who just had this like weird narcissistic need to

SPEAKER_91: lie

SPEAKER_402: with

SPEAKER_28: impunity you know right

SPEAKER_91: so let's do one last story let's do something about the dragon SpaceX

SPEAKER_54: yes so SpaceX's dragon cargo capsule parachuted to splash into the Pacific Ocean this week it ended space station the dragon was also the very first US craft to reach the orbital space station since last year's retirement of the space shuttle fleet Elon Musk reported he's the SpaceX founder of course reported that the dragon returned he tweeted splashdown successful and then

SPEAKER_56: in interviews afterwards he compared the nine day space station resupply mission to hitting a grand slam in baseball the demo flight began on May 22nd the dragon launch from Cape Canaveral Air Force Station in Florida and then atop a SpaceX Falcon 9 rocket and then it reached its climax last Friday when astronauts actually used the space station's robotic arm to pull the dragon into the docking port on the station's harmony module as NASA astronaut Don Pettett gushed over the Dragon X's new car smell I thought that was kind of funny

SPEAKER_54: so the test mission is expected to open the way for SpaceX to begin orbital cargo deliveries 12 flights are scheduled through 2016 as part of a 1.6 billion dollar contract with NASA and NASA is hoping

SPEAKER_56: the post-shuttle era will be a lot more like this with sort of consumer companies commercial companies taking over a lot of the resupply mission from them at a cost far less expensive than so how much bigger do you think the space vertical is going to get I guess would be my big question

SPEAKER_406: James

SPEAKER_407: Altucher well I

SPEAKER_64: actually think this is a home run for reasons that Musk is well aware of but he's not saying there are 17 elements that are essentially only found in China called rare earth minerals and there's a reason why they're called rare earth minerals because they're not really found in many places on the earth but they are found on places like Mars and it's with these minerals that we fuel our batteries our light bulbs and even cars and we're running out of

SPEAKER_17: Wow that's incredible it's I text name drop I texted with Alon when all this was going on and he's obviously thrilled what this means I think more than anything is putting aside the financial reasons national security everything is this is the ultimate inspiration what he did with a team of just a couple hundred people and just a

SPEAKER_51: states there's only four people who ever made it to the space station China Japan Russia the United States I believe of the four and

SPEAKER_17: no other country has made it one and just you know like in Beverly Hills or something here in LA and

SPEAKER_36: he told me straight out if I blow up another one of these rockets it's over I got one more shot

SPEAKER_84: let's just think about that for a second as an entrepreneur one more shot and then he hits five

SPEAKER_156: time project was delivering the Tesla Roadster and the Tesla Roadster S is two months ahead of schedule this guy is an animal

SPEAKER_17: he is and he's a personal friend of mine obviously investor in Mahalo and you know our kids play together et cetera et cetera you look at him and he's got a great sense of you whatever but it's like looking into the eyes of

SPEAKER_156: he is the terminator of entrepreneurs he's beyond but he has a sense of humor but he is like unbelievable this I was always impressed with him you know but my god like this is just a whole nother level to sit

SPEAKER_219: there at dinner with him and have him talk because he was not taken seriously with SpaceX he was derived and I remember and you met him he came by

SPEAKER_56: Mahalo very early and hung out for a night and told us about this was right after one of the first rocket launches

SPEAKER_74: yeah he had gotten it

SPEAKER_425: it got like

SPEAKER_56: up and then it spiraled and it came back down

SPEAKER_17: and so I couldn't be happy for him he's obviously you know a brilliant brilliant guy but more than anything the lesson here is resiliency because nothing great doesn't come without a lot of failure a lot of heartache a lot of pain and that is the lesson of entrepreneurship for me and just

SPEAKER_56: vision too I mean I think part of it is how many people would even try to take this on

SPEAKER_17: I come to work every day I feel like a schmuck you know like it's really hard to have him as a friend because when you go out and have dinner he's like how's Mahalo going oh yeah we just we hit a million apps how's things going with your rocket

SPEAKER_36: company he's like

SPEAKER_428: we went

SPEAKER_36: and he never said he's very charming and magnanimous about it it's not like he's putting it over his face but it's you're just a normal guy like me you go to dinner with Thomas Edison it's like oh would you invent today oh electricity cool

SPEAKER_330: yeah I'm telling my farms you know like well don't tell Edison what you've invented or he'll take it

SPEAKER_430: it's so rare to see that nowadays

SPEAKER_432: a lot of people are just taking these baby steps baby ideas to take something like that is so respectable I think a lot of the VCs too are afraid to really take deep bets oh these VCs

SPEAKER_185: screwed him I mean they

SPEAKER_04: with the exception of Founders Fund which supported SpaceX like some of the VCs involved and Tesla just really effed with him and you know what he's a billionaire many times over now and he was broke four years ago like literally broke he had no money left and was taking loans from his friends I mean he has friends

SPEAKER_51: who are billionaires but he was he was basically living off of the loans of his friends and now he's just a straight up billionaire when this company goes public I mean forget it yeah I mean it's going to make Tesla look small

SPEAKER_17: and Tesla's worth three or four billion he he those VCs who screw with him whatever I mean now they're screwing with a guy who's going to be Tony Stark Bill Gates level

SPEAKER_51: I mean he's going to be Bill Gates level wealth he's never going to have to ask anybody for a dime ever again those VCs right now are they are looking in there you know looking at their ceilings that night in bed going wow I have absolutely no judge of character I didn't bet on Elon Musk or I screwed with Elon Musk

SPEAKER_126: you had dinner with him he had one more rocket to go and he was done just like with Tesla

SPEAKER_64: he was he was living on almost nothing right before the IPO like you said he was borrowing from his friends he's willing he's that kind of entrepreneur who's willing to go straight to the edge of the abyss and look into it before that success comes

SPEAKER_271: and you have to admire that

SPEAKER_322: yeah

SPEAKER_51: great guy and hey let's wrap it up there thank you so much to my friends at MailChimp and at SourceBits

SPEAKER_04: for helping support independent media like this any plugs for you James you have anything to plug

SPEAKER_444: a book people should

SPEAKER_91: come to my blog jamesaltager.com go to jamesaltager.com there you go and you you're monetizing at $75 per thousand right

SPEAKER_446: I am making absolutely zero except I like it when people like me I'm insecure

SPEAKER_114: and do you have any source of income at this point or do you just live off the money you

SPEAKER_14: by the way James I know you can't speak to it but that deal is done you're rich again no seriously James when's the last time you

SPEAKER_40: had a job and were gainfully employed like actually went to an office and like showed up before noon and stayed more than two hours

SPEAKER_64: 1997 I worked for a homebox office and one of the best companies out there to work for

SPEAKER_195: but then you had your own firm your own design firm

SPEAKER_455: I didn't come in before noon though

SPEAKER_195: so you went

SPEAKER_455: to an office

SPEAKER_457: what was the

SPEAKER_64: company again

SPEAKER_460: and then I started stockquick.com which I sold to the street.com and I've been angel investing all along

SPEAKER_74: well you got it

SPEAKER_17: figured out you spend a lot of time with your kids and your family and everybody does love you and you have brilliant insights and you're quite quixotic in the best sense of the words and I appreciate you taking the time to be on the program even though you didn't plug in your ethernet cable

SPEAKER_36: next time you put that goddamn ethernet cable in when my people ask you I need to have that high fidelity that wifi next time ethernet okay go ahead what do you got to plug how do I become a member how does Lon when he

SPEAKER_219: comes up with this brilliant idea leave rancor sorry to rancor when he has a brilliant idea next year how does he get to you

SPEAKER_80: well I think that there's several different ways probably the most sure way is to come in through one of the partners so it's some relationship there are to connect in and

SPEAKER_470: so know the partner already that's right but if you don't know the partner that helps or one of our

SPEAKER_80: mentors or one of our investors so a lot of times they're referred in that way I think you have a higher chance of you know getting audience right yeah an audience then and then what happens is that person can then sponsor you to try to get in for an appointment where we have companies come in and present once every week what state

SPEAKER_156: does a company need to be in to get into Amplify LA to get into that gorgeous 10,000 square foot that's been a moving target

SPEAKER_80: so at first it was much lower than it is right now the quality of companies we're seeing right now is super high and it's almost like what a low level series A fund would be

SPEAKER_198: so you guys have sometimes a finished product but maybe not performance yes

SPEAKER_36: so like you got like you got like a basic app out or you got a basic thing so you got to put your $20,000 in sweat equity in $50,000 in sweat equity before you show up for Amplify LA

SPEAKER_87: there's a lot of variables in there

SPEAKER_477: I mean a lot you know it depends on the people the market so if it's

SPEAKER_91: Jason Calacanis walking in you're like you're in that's right but if you're Mark Pincus it's like wow we don't even deserve you

SPEAKER_17: but you know it's just the wrong place for you but if it's in lieu of not having a track record having some product that

SPEAKER_74: $200,000 $50,000 $25,000

SPEAKER_128: it's between $35,000 and $50,000 for 8%

SPEAKER_138: okay so double

SPEAKER_36: the cash of Y Combinator for only two more points

SPEAKER_138: correct why'd you come to that decision

SPEAKER_80: well it was it was a hybrid decision of looking at what we're offering market conditions okay and so

SPEAKER_482: and you feel that's a good deal for entrepreneurs yeah

SPEAKER_80: they feel it's a good deal yeah I think so I mean if you go talk to our entrepreneurs that have come through the program I think that based upon feedback we've heard from other people that they found it very worthwhile

SPEAKER_36: what if somebody has more traction but still wants to come into the program do you negotiate that yeah okay that's good yeah we will yeah yeah awesome

SPEAKER_05: all right we'll continue to successfully have people find out more is there a website

SPEAKER_14: amplify.la there you go amplify.la hey Lon Harris always great to have you on the program everything going well over at ranker.com everything's going great I heard you had a little little seo snap what do you have a little no a

SPEAKER_219: little social media

SPEAKER_295: yes yeah we had a we had somebody doing promotions and reach out normally they're

SPEAKER_54: doing a wonderful job but they got in contact with a certain person a blogger I don't need to get into details they got in touch with the blogger and our material was very inappropriate for this person's blog it was a screw up it was a screw up by one of our

SPEAKER_53: people so you sent them bikini lists we said that it was

SPEAKER_54: actually it was a list about girls with Star Wars tattoos because we keep we keep things classy so it was just it was not a good it was not a good fit for this blog and and this person who was doing the reach out copped a little bit of an attitude when they heard back this person was a being a little bit aggressive and rather than take the take the hit and be very nice in return which is what I sort of tell people to do they got a little aggressive back and it became this sort of feud in email and then this guy

SPEAKER_56: wrote a rather scathing takedown of Rancor but I've been in touch with him and I think we've worked out most of the you know major points of contention and so we're

SPEAKER_494: well I'm you're pulling up Rancorford.com I mean you could you could pull it I mean I mean a big

SPEAKER_280: look at this wow this girl's got R2D2 and Darth Raider and one thing I would stress that's pretty awesome

SPEAKER_491: and she's got an R2D2 bikini

SPEAKER_371: and the issue of contention beyond just

SPEAKER_28: oh look at that it's like a little rebel thing that's awesome beyond just being you know a little bit rude in emails the issue of contention here was

SPEAKER_111: well we do not own all of these photos but it's submitted by somebody right but this is a user generated

SPEAKER_287: does this person really have the death star on her belly as one does wow

SPEAKER_499: that's a little graphic okay it's very graphic

SPEAKER_492: but anyway yes Boba Fett

SPEAKER_499: for the win on your thigh

SPEAKER_300: where was that girl when I was single if we get take down notices or we hear from copyright obviously we take things down immediately and we comply yeah I mean

SPEAKER_91: everybody's got the same issue I mean people submit stuff you take it down if it's not yours that's it you move on right but this blogger

SPEAKER_227: I think it's a I think it's a sign that you guys are succeeding

SPEAKER_56: oh yeah I mean we're getting a lot more traffic we're getting a lot more participation now that it's much easier to re-rank other people's lists so yeah this just comes with the territory being out there invisible

SPEAKER_14: congratulations everybody what is your twitter handle for rancor

SPEAKER_222: rancor is just at rancor

SPEAKER_14: you have at rancor we have at rancor all right everybody follow at rancor

SPEAKER_219: to get all these great girls we'll let you know about all these and this is a theme right like you have like girls with tattoos of

SPEAKER_505: doctor who girls with tattoos we shouldn't have that one we don't have that one

SPEAKER_506: people make all kinds of weird twilight series tattoos

SPEAKER_28: you know what's one that I didn't see coming was we have a lot of lists about people who find those you know those statues

SPEAKER_54: those little gnomes little stand up statues of like comic book characters you'd put on your desk or something like collectible so we have a lot of like very passionate lists about those like which ones are the hottest and which ones are the most expensive and which ones are the most rare and people

SPEAKER_56: those people love the collectors love rancor because it's very you know kind of OCD which is you know what you have to beat I think to collect those kind of things

SPEAKER_44: yeah if you want to rank that stuff you are a man man you're insane or woman hey and thank you to our crew

SPEAKER_17: good job everything looked pretty stand up today another great episode and if you would like to join the back channel you made it to this point in the program that means you are a super fan there are 300 members on twistlist.co T-W-I-S-T L-I-S-T dot C-O you pay a couple bucks a month you get to pick how much you want to pay and then you become a super fan and then you're on the private email list with me and the other super fans where we discuss the show and how good each of the people on the how each of the guests do how the format of the show is going it's a great place to be a great place to hang out and get the support of other entrepreneurs and be more involved in the show

SPEAKER_05: go to twistlist.co T-W-I-S-T L-I-S-T dot C-O and we'll see you all next time on This Week in Startups and we'll see you next time on This Week in