Full transcript: Giles Palmer on London Real
1:45 Here today to talk tech. My co-host is Colin Pyle, entrepreneur, Crew Coffee. What’s going on? Coffee is going well, busy, busy. What else is going on?
1:55 Oh, the India ride, so my motorcycle ride around India coming out this month on the Travel Channel. Okay. And the China one, it just got picked up by Netflix, so which will be cool because no one watched it the first time around. I watched it. You watched it.
2:11 So it was on the Travel Channel about a year ago, year and a half ago. It’s a good show, I liked it, I thought it was fun, so hopefully, you know, we’ll get a few more eyeballs. It’s him and his brother driving around China on motorcycles for 60 days, getting the Guinness Book of World Records, and you get to see all sorts of stuff. It’s cool. It’s good.
2:26 So fun. So China was BMW 800 GSs. Okay, I like those. India was a really terrible Royal Enfield that hurt after after. They still sell them over there, I think.
2:38 I can’t wait to see that. They don’t cost very much, so yeah. Okay. Colin, road hazards and stuff. Okay, cool.
2:44 On with the show. Our guest today is Mr. Giles Palmer, who is the CEO of Brandwatch, which is a company devised to help organizations find and engage with online conversations that matter. You like that? It took us a while to script that one. Yeah, it’s good though.
2:59 You just flew in from San Francisco, literally hours away. It’s how we roll here at Silicon Real. Brandwatch started in 2006 out of Brighton. A few milestones for you: in 2011 I think you got access to the famous Twitter fire hose, which gave you 100 percent of their API info in real time. All my nerd friends think that’s the real shizzle, you know, that’s, you’ve made it, right?
3:22 Yeah, that’s big. And you’ve recently raised $22 million with the plan to, quote, double down on engineering. That’s quoting you. You’ve got customers like Whole Foods, Verizon, British Airways, Dell, Giles. Welcome to Silicon Real.
3:34 Thank you, Brian. Thank you, nice to be here. Good intro, right? I’m thinking I might start just doing intros, all right, like a ring announcer. You, in the red corner.
3:44 I think I’m actually getting pretty good. I was, if the Silicon Real limo picked you up. Okay. At the airport. Yeah, I missed it.
3:50 What the hell, I missed that too. I missed that too, actually. Speaking of pitches, Kevin Hartz yesterday said that I was giving him some good, you know, nuggets that he could use you for Eventbrite, right? So all right, I’m done with my own horn. On your site it says you guys crawl over 70 million sources, including blogs and forums and news sites, social networks.
4:09 You know, we all hear about what big data is. I don’t know what the hell big data is, and I was wondering if you could tell us what is it that you guys actually do at Brandwatch. Yeah, okay, so do you get that a lot? Yeah, we do. You know, my mom still doesn’t understand it, you know, so we’re trying to, we’re trying to help organizations kind of cut through the fog of all of this chat and get to the bits that matter to their business.
4:33 So you know, what are my customers saying? If we take someone like Verizon, if one of their customers says, you know, my contract’s coming up, is anybody looking at Sprint because I’ve heard good things, blah blah blah, that’s a signal that they should probably be picking up on, because it’s a a revenue kind of revenue lost opportunity. So it’s getting to that, kind of getting to the small data almost, trying to get, you start off with this huge data set and then trying to get through to the bits that matter, and it’s fuzzy, it’s unstructured, so we’ve built this platform that allows people to drill into it.
5:06 You know, it’s very flexible, it’s very kind of targeted. So that’s the kind of, that’s the whistle-stop. You have this great, like, infographic on your site where you’re taking all the data and you put it through and you clean it and then you parse it and then deliver it into a form. It’s like a martini glass that you can give to your clients. How important is it to clean the data, and what the hell does that mean?
5:26 Yeah, so there’s two or three different kind of things. That one is duplication, so even on big sites like Daily Mail, they’ll push out the same content in five or 10 different places sometimes, so you probably don’t need to see it 10 times, so we dedupe across sites and across the web. And then there’s like the problem with spam, and it’s the most prevalent in, say, the pharma industry, where there’s quite a lot of black market kind of drug-selling kind of companies out there.
5:59 So if you look for Viagra, if that’s your thing, online, you’re going to find people trying to sell you cheap meds all over the place, so the pharma companies don’t want to know about that stuff, or I mean they do and they don’t, when they when they’re trying to understand if there’s any issues around their drugs, or if they’re trying to understand if, you know, trying to help people with information, then getting rid of all of this spam is a big deal, so kind of spam detection is a big part of what we do. Do you have, like, algorithms that go in there, like for example that Sprint thing that you’re talking about? I mean, the algorithm has to go in there and it can’t just look for keywords, it has to look for conversations, and then how do you make metrics out of social conversations?
6:39 That seems to be the most difficult thing, because we’ve had data companies on before, we had GoSquared on, we had, you know, Ometria on, but what you guys is really try to convert some of that human information into data, right? Yeah, so let’s take, let’s take the Verizon as an example. There’s a pattern of kind of language that people use when they’re in a certain place, when they have a specific intent, so things like “I’m looking for,” “thinking about,” you know, these kind of phrases attached to “me,” so “mine,” “I,” “me,” “thinking about,” “looking for,” and then you kind of construct a query which takes those little segments of conversation, of kind of patterns of words, and you build this thing and you basically throw that at the entire data set, the whole kind of online conversation, and it pulls back, you know, specific conversations, specific tweets as an example, that have that kind of pattern of conversation.
7:43 And let’s take another one, let’s take auto companies. We’ve got a bunch of customers in that space, they’re not interested in secondhand cars, you know, that’s not their business, their business is selling new cars, so trying to get rid of all of the conversation online which mentions, you know, secondhand cars, ’cause there’s more chat about selling secondhand cars than there is about new cars and reviews and all that kind of stuff. So you know, we end up building a big kind of query which just gets rid of all of that chat, you know, for sale, all, there’s a whole raft of kind of words that people use when they’re talking about selling their secondhand car or even servicing their existing car, so it’s getting rid of all of that noise and cutting through the kind of the fogginess of all of that massive data set to get to specific, you know, reasonably small data sets which are actionable.
8:33 So that’s the kind of the secret in the whole thing, and it ends up being, you know, building these, ends up with these kind of queries which look like code. You know, they’re kind of complex, and that’s, there’s a lot of that’s where the magic is. How’s business I mean, the weird thing about big data is that no one understands it. It sounds like there’s some big data shysters out there that just, you know, take these big corps and say, “You’ve got to do this, ’cause you don’t know what’s going on.”
8:58 And are there some of those people out there, and how do you actually provide real value when these people don’t understand the product? Sometimes finding the right person within the organization who knows what their problem is is the kind of the first step, right? So if you’ve got an individual who works in a company that says, “Right, this is my specific problem,” then you can go after the answer. Where there’s, like, you know, “I’ve got big data, I don’t know what to do with it,” it’s like, Jesus, well nor do I, frankly.
9:21 So that’s the first thing. There is this, there’s a massive hype cycle with it right now, so I don’t know what the Gartner kind of hype hype, what we look like, but we’re definitely in the hype area. Okay. There’s another kind of interesting point on big data is that a lot of this stuff sits within companies, it’s their own data, so there’s security issues, there’s privacy issues, and that’s quite interesting, navigating all that sort of stuff. And then where does it sit?
9:48 So a lot of companies need to have it on site, so we were, you know, working with a Turkish telecommunications company, they have to have all of their data on their premises, and that’s quite tricky for a SaaS company to deal with, on-prem data with cloud data, so there’s all these kind of annoying and interesting kind of challenges around it. Jeez. And but you guys have been in this for the long haul, you were saying that earlier, I mean, you guys doing this for eight years now, not the latest trend of big data, right?
10:19 So what does that bring when you bring to the table, the fact that you’ve been doing this for a long time, does that give you a lot of credibility with these customers? It’s a difficult problem to solve ’cause we’re trying to index, you know, the entire open internet in real time, which is a challenge, right? So it took us 5 years to build the infrastructure to handle that. You know, there’s about a thousand servers that sit behind that kind of last sued together that sit behind the live application, the live platform, so that took a long time to build, and I think that’s primarily, you know, what gives us the credibility, and then building an interface that allows people to actually ask specific questions and get specific answers, again that’s not easy.
10:55 So you know, I look back and think, Jesus, it took a long time to get where we got to, but I can go back over every year and think, oh yeah, I know why that took so long, it was a challenge. And now we’re in a position where we’re looking at other data sources and then bringing those into social, so for example, you know, looking, it’s a beautiful day today, what effect does the weather have on behavior patterns of people and what should companies do about it? So overlaying locational weather data with social and transactional data gives other insights, gives, you know, brings out other patterns of kind of behavior and other patterns of topics that companies could act on if they’re nimble enough.
11:37 So you know, that’s just one example, there’s plenty of others. I always find it interesting when sort of companies like yours that deal with so much data actually have an international presence in multiple languages and different cultures and slang, and how hard is that for you guys to filter that out? Well, the machines don’t know what language it’s in. I mean, you, they kind of, we’ve got this kind of language identification software which says, okay, this is Norwegian or this is English, but but that doesn’t mean the same thing to a machine as it does to you and I.
12:10 Then it’s just a question of applying some specific analysis to that. Like sentiment analysis, for example, is language specific, but entity extraction, so looking at topics of conversation, that’s language agnostic, it’s just looking for common phrases. So that from a technology perspective is actually not much of a problem, but when you look at the marketplace and the cultural nuances between, say, like our big three markets are UK, Germany and US, very, very different.
12:36 The US is ahead in the marketing, most of our customers are marketers. The marketing departments in the US are night and day different from, say, Germany. You know, I think there’s over 100 companies with almost a thousand marketers in them in the US, there isn’t one in the UK and I don’t think there’s probably one in Germany, I don’t know the data on that, but it’s a big deal over there and a lot of the stuff is done in house, there’s big budgets, they’re very, very smart people kind of, you know, bringing data science into the marketing kind of discipline, and you see that with websites and e-commerce and all that kind of stuff, but now it’s moved into social and all the other kind of marketing disciplines.
13:13 So in the US we can have very kind of advanced conversations with these guys because they’re smart and they get it, whereas in someone like Germany, which is a little bit, I guess, behind time-wise on the kind of this the curve, then it’s more educational. We’re dealing with a smaller subset of companies that really understand, you know, what’s going on here and what they want to do about it. So and then there’s the cultural differences, you know, UK and England, I’m amazed when we went to the US, sorry, US and England, when we went to the US, we had a guy, I took our head of sales in the UK and kind of exported him and said, “Right, you are a startup guy in New York,” and within a month he was like, “You know, there are some big cultural differences over here,” even from Brit.
13:59 Yeah, huge, like you don’t say, you don’t say Happy Christmas in the US, say Merry Christmas. Well no, you say Happy Holidays. Oh, of course. And there are so many things like that that are just subtly different, and if you get it wrong you can, it’s a bit of a snafu, you just don’t want to do it. So we’ve learned quite a lot about doing business in the US versus the UK.
14:22 It’s, is there a lot of subtleties there? You went to the US pretty quickly, right? We went to the US towards the end of 2011, which is kind of four years after launch, so I mean, you know, for a UK company, I guess, medium, but we realized that the market is 20 times bigger, and 20, it’s always 10, but 20. Yeah, I think it’s 20. Okay, bigger than the UK or.
14:46 Yeah, bigger than the UK, five times the population, 20 times besides, I would say, something like that, especially in marketing, you know, there’s a lot more money in marketing in the US than there is here, you know, per capita. So and we realized that all of the competitive companies for us were North American and they had this natural advantage of being operating in a market that was like 10, 20x what we had, and the natural economics of that is just even if we’re just as good as them they’re just going to get bigger quicker, accelerate away, hire more people, out-market us, out-develop us, you know, and then we’ll end up, you know, being an also-ran. It’s the pattern you see across the board as a startup.
15:25 You mean as a startup? The natural economic advantage to being in the US with one market, speaking one language, one, you can do, you know, you can sell to people in a straightforward way is massive. So we thought, you know, if we’re going to be serious about this, then which, you know, we were, then we need to be in the US. So that was a real, you know, punt as it were, but the guy that went over there for us has just done an amazing job, you know, literally he’s just been an entrepreneur within an existing company, and we incentivized him pretty heavily, and he nailed it, you know, and now there’s, now it’s, I think as of last month it’s our biggest market.
16:03 So four years later from pretty much zero it’s now our biggest market, and it will continue to accelerate. What have you learned from the Ys? If you had to boil it down to a few sentences, go big or go home. Okay. You know, it’s ambition, it’s, you know, literally if you see something that is, use a little fire analogy, if there’s a little smoke on there or a little bit of flame, pour the fuel onto it as quickly as you possibly can, or someone else will, or someone else will, and the fuel is money, and fuel is money, people and marketing talent and all of that stuff.
16:37 Okay, so the Yanks see that, they smell it and go for it, and the investment community over there gets that, and if you can prove that there is a little bit of a spark and there’s a little flame, you can get the fuel to put on it, whereas over here the investment community, at least back then, needed lots more proof, much more data point for fire going on. Yeah, exactly. I’m not quite convinced that that’s going to make it this way. Will this continue? Jesus Christ.
17:05 Yeah, yeah. It’ll go out, it’ll go out. Talk to me about this fire hose, because my tech guys all want to ask, how did you get access to the fire hose, is the fire hose all that, and like what did you do with it? So Twitter have certified maybe a handful of products in our space and we’re one of them, so we just built a relationship with them. So you know, we got to know them, we showed them our product.
17:30 They’re quite, you know, a classic kind of San Francisco company, they’re very product orientated, so if you show them a product that they like, then you’ve got their attention, and if you’re reasonable people to do business with, then there’s nothing really stopping you. And we had a good product, so they liked that, they liked our metrics, you know, we were already buying quite a lot of data and they were like, okay, you know, we’ll get you guys going. But they’ve since acquired a company called Gnip, which is ping backwards, that’s what that name comes from, you know, like the machine that goes ping.
18:03 Okay. And I think they’re going to innovate, they’re going to be doing some, you know, product innovation around data over the next few years, which is interesting. So potential competitor to you? Maybe. I think unlikely, more likely that they will, there’s other data that Twitter have that isn’t in the fire hose, it isn’t in any of their data products right now, such as kind of follow a graph or whether people have actually seen a tweet, and I don’t know, I’m guessing that the way they get that is if you’re logged in and you’re following somebody that tweets something, then there’s an assumption that you’ve probably seen it, or at least you’re likely to have, it’s cross your other data they’ve got.
18:51 Other data and they’re going to bring that to market, I imagine, over the next few years, so that’s going to be helpful to everybody, I think. I think they wouldn’t want people to see that data of how many people are actually seeing tweets because now I think just so many tweets, do you know what I mean? I wonder if you’re following 5,000 people, how many tweets, you know, what percentage of those. I mean, I have that problem myself, so I think I follow maybe 3,000 people and you can get totally lost in that, right?
19:19 So you can lose half an hour just kind of sifting through, and rather than go and manage your follower list, which is a bit of an effort, right, you kind of wait for stuff to find you in a funny way. That Twitter have got this new Discover, it’s not that new, but this discovery thing which I think is helpful, so to try and distill these big streams into interesting bits of data. And actually we’re working on something a little bit similar, not just for Twitter but for the whole web, where we’re trying to pull out unusual.
19:49 So we’ve got this new thing that we’re kind of, we’ll be launching in about 3 or 6 months, where we’re taking the whole stream, the whole kind of web stream, and depending on what it is you’re looking at, you know, who you work for and what stuff you’re interested in, will uncover unusual patterns of information. So this thing has been shared by four or five influential people. It’s a related product to what you guys do. It’s kind of, it’s like, guys, you should probably look at it, and it might not bubble up to the top of the stream naturally, but it actually, there’s something going on there with the kind of network effects and so on.
20:26 So we’re working on something a little bit similar, which is, you know, it’s an interesting area. And you use that fire hose in a big way for your clients over the last, like, four years? Yeah, yeah. Okay. And you use it just for that kind of a real time, like today it’s a warm day in London, what are people doing, are they spending money on World Cup events, are they not, are they at this retailer, are they at that retailer, I mean some stuff like that is.
20:51 Yeah, I mean the CL, it comes back to, you know, our customer base, so we’ve got about a thousand customers and they’re looking at that, it’s a platform, right, so they use it to look at whatever they’re interested in. So rather than us doing stuff, we build the platform to allow them to do it. So if they want to look at something that’s interesting to them, if one of them is sponsoring the World Cup, then they’re going to be looking at the World Cup stuff the whole time and trying to figure out whether their messaging is getting across, or whether they’re getting any exposure, sponsorship, whatever.
21:23 So yeah, makes sense. What do you do with $22 million? That’s the question of the hour. And were you going for that money, were you looking for less, or is this, I mean, this seems to be the days of big raises. Yeah.
21:36 So tell me about that raise. Yeah, so we were in, when did we do it, like a month ago, just over. We were, we just traded back into profit, right, so the, I mean, a classic SaaS, SaaS curve is hopefully the revenues double each year, the kind of give or take, and so you’ve got kind of exponential revenue line, but some of that stuff, certainly in the B2B land where you’ve got a lot of marketing expense and sales expense, the costs kind of lead the revenues, so you’ve got this kind of hockey, hockey stick of cash where you’re dipping down into negativity, and then what happens?
22:18 So you have this hockey stick there, and then you get to this position where you break even, and then you have a decision which is, do we use organic growth, do we spend the money that we’re making to grow organically, like Amazon kind of style, or do we double down and raise again and do a classic kind of US model where you raise a B and a C and so on, pour the oil, more and more oil onto that massive furnace. That’s why we don’t hear those letters B and C, we’re in the UK, right, we just don’t hear that, but that’s the classic US model where you’re in the Valley and you need a big more chunk of change to pour more oil on the fire. Yeah, so you have things like double down on marketing, launch new products, build new products, get move into new markets, you know, our head of sales in the UK went over to China last month and came back, you know, fizzing.
23:10 I mean, I’ve never seen her so kind of frothy about the opportunity in China. I mean, it’s a difficult or challenging place to do business, but the scale of the place is just insane, and we don’t have any really big customer competitors in China, you know, there’s no global players coming out of China in our space, so, you know, opportunity, but that’s not going to come cheap. You can’t just take 50k and just open an office in China, expect it to work, right?
23:37 So there’s all of these different things, and then we’re seeing competition increase, and not necessarily by volume, but it’s the leaders in the field are getting, you know, raising money, they’re getting more aggressive, they’re trying to kind of out-market us. We’re in a couple of companies in the US, some very big companies, where we sit alongside a pseudo competitor, a company does something very similar to us, like online engagement, like, you know, and they’re, you know, they’re trying to elbow us out and say, you know, “We’re going to, we’ve got this whole listening and analytics piece as well,” and it’s like, well, you know, we need to defend ourselves against stuff like that, and you need resource to do it. So we raised in 2012 about $6 million with a kind of a plan to double and double, and we did that in 13 and we’re on track in 14, and we just thought, okay, we’ve achieved that goal, we’ve got back to break even, do we kind of carry on trading and realistically expect to get bought out in the next 18 months, or do we go for a sight, something slightly bigger and say that we’re going to go long term here, we’re going to think 3 to 5 years, we’re going to move, you know, go towards an IPO.
24:55 If somebody comes along in the meantime and says, you know, “We think it’d be a great strategic fit to acquire you,” and so on, we obviously, you know, you look, listen to that, but we decided let’s grab the bull by the horns and let’s take responsibility for our own future, and the way that we’re going to do that is, well, we need more cash. So it’s for infrastructure, it’s for more development and it’s for international expansion and maybe a bit of M&A. So we’ve got a kind of a little, we’ve got defense on the balance sheet now, but we’ve also got some ability to go out and get a bit aggressive in the market.
25:27 Interesting to hear, trying to be more American. Yeah. Were you hesitant or were you for that big race? I was for it. You for it?
25:34 I was for it, and the guys that the the VC that we had for our Series A, they’re called Nauta Capital, they’re out of Barcelona, they’re really good guys but they’re quite small, they don’t really have a US footprint, so I wanted a US, you know, or a global VC, so the guys that we’ve got now, they’re investing out of their European fund but they’re headquartered in Boston, so and they’ve got an office in Shanghai as well, so they’re a big US VC, which gives us the ability to scale if we can continue to deliver on the business. How many employees are you at now and where will you be in 2 years? 220, 500.
26:08 Okay, look at that, it’s boken like a true C dou down there. We go. That’s a lot of hiring. Yeah, it is, Jesus Christ. We’ve got, we’ve got four, soon to be five people out of the 220 just in recruitment and they’re maxed, so it’s brutal, hiring is brutal.
26:26 And I was speaking to, we just hired someone from Google to run revenues from the UK, and she was saying that for every opportunity, every job that Google has, they get about a thousand applications, right, to work at Google. Right. Yeah, I heard that from someone. So, and we get 50 for the creative jobs, couple hundred for the developer jobs, 50, you know, and so we have to, you know, and it’s a great place to work, like all the Glassdoor scores on the kind of employee satisfaction are right up there, like 4.8 out of five or whatever it is for you, for us.
27:04 So we built this really swe. Yeah, we got espresso machine, you can steal them and we won’t tell. Exactly, the capsules, so you know, it’s a great, people don’t leave, there’s a great vibe in the company, we’re trying to do something cool, and yet it’s really hard to get that, you know, flood of inbound talent applying, you know, hats off to Google, they’re an extraordinary company, but for the rest of us we actually have to go, you know, try and source great talent in London or in New York and San Francisco too.
27:35 It’s easier in New York? Is it? Yeah, I mean New York’s so big, right. In Brighton it’s challenging, like Brighton’s only 250,000 people. Beautiful place, beautiful place, there’s a beach with stones.
27:48 The worst beach in the world. Well, the fellow Bri say, you know, Canadian going down to the break, go rock climbing, I’ve never seen that before, it’s awful. I’ve been a few times, I just really like it though. I can’t get it yet, I’ve never been shown around by a local. I hear, no, come down, I’ll show you around, there’s some cool little places in Brighton, there really are.
28:11 The locals love it. Yeah, yeah. And but that’s the reason why we opened in Berlin, because Berlin is a city of 3 million people and there’s a big tech kind of scene over there, so we were kind of realizing that if we wanted to double the engineering team in Brighton from say 60 to 120 over the next 18 months, we were going to struggle, you know, I was going to have to poach people from companies which are run by friends of mine, which is like, that’s not cool.
28:38 So and it’s a small place, so we thought, where do we go, and we did some analysis and we chose Berlin, and the dev team in Berlin’s already kind of 20 people, so that’s our kind of growth strategy for engineers. And what about you, I mean, can you realistically stay in Brighton or do you need to think about San Francisco or New York? I’d, you know, I’d love to go to the US and frankly I think the investors would love me to. I have three children from an ex-marriage and I just can’t walk away from that, so I’m staying here.
29:10 Fair enough. It’s London Technology Week this week, we’ve had everybody here, we had Bloomberg over here at Central working you with James Leafield that we had in here a couple weeks ago. What do you think the state of the union is now in the London tech sector? When you’re in San Francisco and you’re telling people about London, are you are you being like a proud father and telling you everything that’s going on, or are you justifying your redheaded stepchild for staying in the family?
29:35 San Francisco is so self kind of referencing that they don’t see anything outside. No, really, you know, I mean San Diego is, you know, another world. New York is kind of me kind of thing. London is like, well, isn’t that part of Europe? So there’s a little bit of that.
29:54 New York’s a bit different, you know, New York, London, I think have a similar sort of thing going. I think it’s great what’s happening here and I think picking a location was really smart. You mean like as in the roundabout or Tech City or something? Exactly. Interesting.
30:08 But one of the things that we don’t have here, which is going to take time to build, is really a really strong ethos of product development. There aren’t many UK product companies. They’re beginning to emerge right now, like we’re one of them and there are others, and there’s an ethos around building a product which is different to being an agency, right. London’s massive in the agency world, and you’ve got, you know, groups of developers and creatives building stuff in those agencies which are kind of cool, but they tend to be one-off things, you know, campaign driven sorts of things.
30:41 Okay, so an agency would be like a marketing campaign, a product is like something you use, like a software product. A product is like, if it’s a B2C then you know there’s probably an ad revenue stream it’s associated with, if it’s a B2B there’s probably subscription revenue stream, and it’s one thing that gets bought by lots of different people. Okay. And it requires a different mindset, it requires finance because it takes a while to build the first version and get it monetized before you actually start to see the returns, and it also requires some product management skills, people who can understand how to build products, can design them, can see that through to execution.
31:19 And you know, when we were looking for product managers, you know, there might be, for everyone that is in London there’s probably 10 in New York and there’s probably a thousand in San Francisco. So you know, San Francisco is the place where products get built, and London is nascent in that area. So I think, how many, Berlin, out of curiosity, a half? No, no, Berlin’s more than London. Oh really?
31:43 You know, you’ve got people like SoundCloud in Berlin, and you know, the Berlin, I would say, is New York, maybe halfway between. Germans are good at manufacturing, so they’re probably good at building products, right? Yeah, there’s, and I think it’s a lot cheaper than London to live and to kind of have to find somewhere to live, so there’s a lot of kind of struggling entrepreneurs, young guys who can’t afford rents here and so on, that, you know, getting together in Berlin.
32:14 Berlin is a really interesting place for startups, actually, I think it’s probably the most interesting in Europe as far as I can see, but London’s pretty damn close, but we need, that takes years and years to be getting that product development. My worry with London is that you’ve got these companies like Google, Facebook and Twitter that are kind of landing here, and Google’s built this huge development office in London, I say huge but I mean there’s 4,000 Googlers in London, they’ve got a lot of smart developers working for them and they’re not working for the startups, right. That’s a challenge, and they’re going to build, but they’re not in Berlin, like Google aren’t in Berlin, Facebook I don’t think got much going on in Berlin.
32:49 Why is that? I think American companies, they go London first, right. Okay, but we hear a lot of times that guys go spend a couple years at Google or Facebook in the Valley and then they come out and they work for a startup or they start something up themselves, so you know, maybe we’ll, a few years, they get looked after. I’ve got some friends at Google that, you know, they get approached the whole time to do startups in London and they’re like, you know, “What about my free food and my auction packages and all that sort of stuff?”
33:18 Yeah, no, it’s a cushy, and you know, I’ve got to give that up. What, in fact one of them was, I was speaking to yesterday and he said, you know, “J, what’s your opinion, should I be looking at 3, 5x the kind of the number for the startup to take account of the risk?” It’s like in equity or? Yeah, exactly, how do you define it, but well, first equity, salary, whatever it is, you know, how getting to some idea of what this X is, you know, is a challenge, but they obviously, it’s a difficult equation to weigh up when you’re getting pretty well paid and very well.
33:53 That’s the question, are startups paying that? I mean, if Google’s paying you X, I don’t know, it’s probably 6 figures if you’re a good developer, now the startup can’t necessarily pay you 2x salary, they might not even be able to pay you X in salary. Yeah, no, they probably pay you half X, half X, so then you’re really talking about some option back, and then it’s how good is the salesman as the guy, exactly, and the idea, and actually from this guy’s point of view it’s like, is there significant finance behind this, you know, I don’t want to be here in 9 months’ time and running out of money.
34:22 And then have to compete with a thousand people to get my job back. Exactly, yeah, that sucks. We’ve heard this before where it comes to, like, actually guys that manage projects, and project managers, where people are really looking for those guys, ’cause you might have the really smart developer and the smart, you know, ad guy, but to get things done. And like Silicon Valley has a life cycle, even yesterday Kevin was talking about, what I never think about, the chip industry.
34:47 Real, yeah, the silicon in Silicon Valley, like they’ve been doing that since the 70s and ’80s, then you had the hardware boom and then the software boom, like there, and social, right, social, they’ve been building products for many, many, many decades, so I guess they’re a little bit better. Yeah, than, and there’s money, you know, because especially in the B to C side, like I can’t, I was walking here and I was trying to think, what’s a B2C company that’s come out of the UK? And I couldn’t really think of one.
35:19 Wonga, is that a tech company? I, that’s, they say it is, with the real time credit scores and stuff. I mean, I think it’s, no, I think it’s a bank with good tech, right, you know, I don’t see it as an innovative technology company, but yeah. They were the, in fact they were the only ones I could think of, just one that came off the top of my head. Yeah, but you’re right, but I can’t think of many others.
35:40 And you know why the hell is that? And I think it’s because it costs so much money to get one of these things off the ground, and there isn’t that kind of appetite over here, plus you’ve got the 20x economics over there, so if it does get off the ground over there then it’s going to be 20 times bigger, bigger just naturally. So it’s challenging building a B2C over here, I think is really challenging. I’d love to see one. I mean, Spotify is probably the closest, but that’s not British, right, it is located in Sweden, right.
36:09 Moshi Monsters, those guys are, yeah, Moshi Monsters, I guess. Yeah, yeah, you’re right. Yeah, could be one. Spotify’s got Sean Parker working for him, is that right? Yeah, yeah, I read some article about Sean and he was like, he was like jet-setting all over the world and consulting for Spotify and all that stuff, so if I meet him I feel like I’m just Justin Timberlake, like, I’m sorry, man, but you going to do D for me.
36:31 Exactly, yeah, right. I guess, you know, whatever happens to him, you always were portrayed in that movie. Exactly. I mean, you know, could have been worse, could have been worse. Sure, sure, sure.
36:39 How much time do you spend in San Francisco? About a week every two months. Okay, and what, and do you like it there? I love it there. Why?
36:47 God, the city’s beautiful, you know, it’s got this incredible setting, it’s the weather’s weird but interesting, and for a geek like me, you know, just getting the 101 or the or the Caltrain down into the Valley, you just go past, there’s the Oracle campus, there’s the Salesforce campus, there’s the, you know, the Facebook, you can’t see Facebook and Google from the road, but these things are iconic and it’s all there. Like we were driving around the peninsula and the person was like, “Oh look, is that, is that Firefox?” Yeah, there’s the Mozilla building right there, LinkedIn’s right there, Yelp’s there, we went to the Twitter building, it’s just, you know, it’s so, it’s Mecca for tech, right, and there isn’t anywhere else, sadly, but that’s why I love it, right, and it happens to be a beautiful city, right, right on top of that.
37:36 What do you think we’re going to do right in London? I mean, you talk about we got to get down to products, but I mean, do certain things excite you in fintech or in other pieces where fintech, definitely, I mean, there’s a natural win here because of the financial services industry in London, so I would hope that we can build out some fintech stuff here and have a natural advantage over almost anywhere else. Yeah, New York maybe, but would be close second, but I think that’s a big opportunity.
38:00 I’d love to see some more early stage investment stuff going on. So I met with one, I was saying before we went on air, I met with one of the venture partners at 500 Startups. They’ve invested in 780 startups in San Francisco, 780 out of this one fund over how long, roughly, do you know? 5 years, I want to say, something like that. Average investment, the average investment 25,000, and then of those ones that they invest in they follow on for the top 25 percent, so they’re building an internal market, and they do them in batches, so they’re on batch 10 right now and they’ll take 30 companies in a batch or so, and they’ll incubate them and they’ll allow them to kind of hang out in their office and stuff, and then the ones that perform really well they’ll follow on and they’ll introduce to some of their LPs, venture partners, other big, bigger VC firms, so they get deal flow data from 500 Startups.
38:58 It’s a brilliant model. Kind of Y Combinator is, yeah, exactly. It didn’t take much to get off the ground financially, so I think, you know, their funds are kind of 20, $30 million, they’re on fund three, those aren’t massive numbers, but they’re just throwing a lot of, and I quote, spaghetti at the wall, and then they’re building an internal market, internal startup market. It’s so damn smart. So I’d love a bit more early stuff over here, and as we see people like me and other kind of guys that have built companies that have got somewhere, you know, put, and then we can put some stuff back in maybe and mentor some of these guys and help them out.
39:35 I think that would be fantastic if we could do that in London. What are your thoughts on Uber, has it gone too far? I think Uber is an amazing product, I mean, you know, I use it all the time in America. It’s disruptive, right? You know, so you’ve got the London taxi scene is going to have to give 10 percent of its revenues to Uber, or not going to have to, but that’s what it stands to.
39:58 With the CEO, CEO just came out, did you hear that? I think it’s 10, isn’t it? Oh really, is that what they’re going to end up, mean, giving him in market share, or well, it’s 10 percent of every journey. Okay, right, okay, right, right, right. But what the CEO just said, he’d use robots if he could, he used robots to drive the car, and now imagine Uber with self-driving cars, it’s like, you know, goodbye taxi.
40:21 Well, they were like, the Uber guys were like, do you know what the London cabbies have to do to get a licence? Oh yeah, they have to do this thing called the Knowledge, knowledge. We had Gary Jackson on from Hailo many months now ago, it seems, who had done the Knowledge. People don’t know it’s, you have to memorize the streets of London, it can take anywhere between three and 5 years. Yeah, there’s a lot of them, it’s becoming, and Google Maps has just kind of just obliterated that as far as I’m concerned.
40:45 Yeah, that, not to mention Google drivers, Google driver cars, so it’s going to be interesting. I don’t know Uber, I mean, he’s got, they’re very outspoken CEO, and they say that’s why he gets evaluations, ’cause he’s not trying to be a taxi company, he’s trying to be a logistics company. He’s think he’s super big and he’s really aggressive and Silicon Valley guys love that stuff, they love that stuff, they love big disruptors, right, they’re betting on the disruptor.
41:07 Yeah, yeah, yeah, right, sure, sure. And a lot of them don’t come through, but you know the ones that do, Mark Zuckerberg for example, make a big difference, come through big. J, we ask everybody a few questions here on the show always. I’m going to ask you, if you can make a phone call to the 20-year-old Giles Palmer and give him a bit of advice, what would you tell that young man to do? So I’m 45 now, so I was 20 in 1990.
41:31 I went through a kind of a classic English education, I went to a private school and then I was 17 when I left school and I happened to be good at science, so I did physics at university without really understanding why, I, you know, I had a great time at university but I didn’t learn very much. I came out and I thought, what do I want to do now? Then I became an accountant, you know, physics, accountant, probably the most boring man on the entire planet.
41:56 So I think I would have said, you know, take a step back and think about things a little bit more from your own perspective, what do you really want to do? Do you want to become an accountant? Probably not. You’re kind of a geek, you’re into tech stuff, so go find where that stuff’s happening, go to Silicon Valley, frankly, because that’s the only place it was happening in 1990, and try and get into something which actually interests you. I didn’t get into something which interested me until I was 29, so I kind of screwed around in my 20s, I’m not, not literally, I didn’t do nothing, but I worked for boring companies doing stuff that didn’t motivate me at all, and I worked for GlaxoSmithKline, it was called SmithKline Beecham back then, and I remember waking up one morning and thinking, if I don’t go into work today nothing will change in this company, I make zero difference to this organization.
42:48 I’ve had that realization and I just thought, God, how awful is that. And you know, I resigned pretty soon after that, but that’s a good litmus test. Yeah, you know, I mean, if I don’t come to work today, what kind of impact will that have? Exactly. And and how empowering is it that when you think, yeah, if I don’t go into work today stuff won’t get done, people won’t get what they need, you know, there’s, that’s such a different place to be.
43:15 So I would encourage myself not to go down the well-worn routes, and I think, you know, BR being the, back then in the ’90s there was this kind of, you know, you go to a private school, you go to a school, good school, you get good grades, you go to university and then you go into the City, and so, or become a lawyer, and so many of my friends did that, and I’m glad I didn’t. Well said. On that same note, what’s the best advice you’ve ever received? My father was, he’s not around anymore, but I remember asking him, when I was 17, you know, what should I do at university?
44:00 I said, I’m quite good at physics, what about that? You, that sounds, that sounds good, you know. I said, what about engineering? I didn’t know anything about it. I said, what about engineering?
44:08 Goes, yeah, that sounds good. Well, my dad never gave me any advice, and at the time I was so frustrated by it, I just thought, God, Jesus Christ, just give me some steering here, you know, help me out. And when I look back I think, you know, that’s brilliant, from a paternal perspective, allowing your son to figure it out by himself, allow him to kind of make his own mistakes, and I was pretty headstrong and pretty stubborn, and I think he realized that, you know, if I tell you what to do and it’s not the right thing to do, or if I give you bad advice and you follow it, you know, that comes back to me, so it’s kind of, you decide.
44:42 So I like to think, actually, that no advice is the best advice. That’s the first time we’ve heard that, absence of advice, best advice. I like that. That’s a good answer. Last part of that question is, to the 20-year-old listening around the world, world that could be in Shanghai, who wants, you know, to get involved in tech or to be part of the startup community, what do you tell them to do?
45:05 I’m amazed at how few people actually contact me and say, “Can I come and kind of intern with you,” or “Can I come and, you know, spend some time in your office?” I think just figure out who you admire or what you think is cool and make a nuisance of yourself until they let you in the door, and it’s amazing what happens when you get into an organization, you start talking with and hanging out with the people that are kind of making the decisions and making that organization work. The very big organizations it’s difficult to get to those people, but medium and small organizations it’s not, and and then you’re off and away.
45:42 So again, when I was younger, friends of mine wanted to get into the film industry, and the only way into the film industry, as far as they were aware and therefore I was aware, was to be a runner. So it was like a modern-day intern, so you would do whatever you could to get a runner job at a production company in London, and you get paid nothing or very little, but gradually after kind of six months, a year, you get to know the people, if you work hard, if you’re engaging, if you show an interest, if it is your true passion, that will happen, and then you start to get stuff, and then within 5 years you, you know, you’re running a production crew or whatever it is, whatever the what is the company does. But I think, you know, make a nuisance of yourself, go find somebody that you find inspiring and badger them until they’ll let you sit in their office for a week, and then refuse to leave.
46:33 Be careful what you’ve just unleashed on yourself. So what’s your email address? No, I think that’s larry.page. I think it’s, that’s great advice, and I think for small, you know, small medium-sized companies, to make that barrier of the decision to say, okay, fine, come in for a month or two, is key, and so many guys now don’t take no for an answer. First time somebody says that, you know, we’re too busy, okay, when can I call you back, a week, two weeks?
46:59 If you call somebody back 10 times they’re going to say, okay, come and spend a, come and spend a week with us. That is true. I’ve had guys, you know, want here, for example, like if they did it to you guys, you’d have somebody in back, back that, sorry. No, no, but it’s, so I’ve had people just interested in working for me and stuff and they, you know, I can barely get them to come to my office for a coffee, it’s crazy, going with this interconnected world, a lot of people will hear this and they’ll just bust out an email, but that’s all it is is an, so sometimes you get a lot of this interest that has nothing behind it, but if you show up at the doorstep, you know, with a cover letter and a suit, like, and you be like, oh Jesus, who’s this?
47:37 100 percent. That’s happened maybe once in the last 3 years to me, and generally speaking, you know, you’ll give somebody 10 minutes, and if they’ve got that keenness and that hunger in their eyes and they’re not a complete lunatic, you like, okay, we’ll find you something. Today has $22 million to spend. When I was running my, when I was running my FX company I remember this kid from Australia, he pulled, like, a George Costanza from Seinfeld, you know what I mean?
48:03 I was like, you, I said no, I said no, and he just showed up the next Monday morning for work. Oh, is that what he, kid, how good, that I was like would said him no, don’t you understand, I know, and I was just like, all right. Is that him breaking up with his girlfriend? I don’t know. No, where he gets, George gets fired but he just ignores being fired.
48:23 I disagree. Raper, right, lest madman did the same thing, kept showing up, so, you know, and he turns out to be one of my best, my best sales guys, right. Good advice. Oh, look what we’ve just unleashed. Well, Hallelujah, if we do, right, let’s get motivation going.
48:37 Yeah, no more of that, like, I don’t know, kids just come out these days and you just think, it’s, you know, expectation. Started the grumpy old man coming out, I got gray in my beard, it’s over, kids today. What about in America, do you get people that do that in America or not even there? No, not even there, but I imagine when we’re not well known at all in America, but I imagine that the firms that are, do a lot, right, so I can imagine that Twitter get their door knocked on every day, right.
49:08 So it’s, and that goes back to my earlier point, if you are a B2C company you’ve got visibility with these young guys, which helps dramatically with your hiring. But so and Americans are way more kind of busy and brash than the Brits, in a good way in my opinion, ’cause they get stuff done, they make things happen, right. Well said. All right, you are hiring though, so if people want to get a hold of you, what’s the best way? Lay us with your Twitter and email, if you want, Larry.
49:39 So I’m at Jud do9, which is a slightly strange handle, I’ll tell you about that in a sec, and I’m Giles at brandwatch.com. Like literally having a chat with this person, I said, so you know who you, mobile, shower hose or landline, my phone, one of these things that you pull out of the B, so she’s having a chat, I said, who are you talking to? She said, my friend Tilly. Okay, what are you talking about? Her cat.
50:11 I said, what’s her cat called? She said, what’s your cat called, Tilly? It’s called judu n daddy. So I thought, what a crazy name, nobody, there’s no way anybody’s got that handle right now, so I decided, right, I’ll be that, Jud n, and that’s J-O-O-D-O. Yeah, you must have been an early adopter of Twitter, you’re one of those.
50:30 Yeah, that was probably ’07. Yeah, yeah, yeah, was tell, but I didn’t really use it for the first year, but you know, and I didn’t get it, and nobody got it to start with, right. I don’t get Instagram yet, I’m working on that. Work on that, you know, you can check your first tweet ever, there’s like a little app that you can go in and it sends you back your first tweet ever, it’s a little creepy, shows you the date and you can see, like, what the hell. You can check anyone’s first tweet, actually.
50:54 Yeah, anyway, there was one, was it the US Army? No, there was one that came out recently, first TW, which is really, yeah, no, it was really sweet, it was a really smart one, maybe it was U. I should, I should know what I’m about to say before I, I think it was the US Army that came up with something, anyway, it’s quite telling, it’s almost like a selfie, because it’s like the first time you would have used the service and you’re probably using it to say something that was important at the time, this isn’t your thousandth tweet, so you’re not going to be like, oh, last night, man, you’re probably going to be like, “Hello Twitter,” or “This is really special.”
51:27 Wonder the average time between setting up a Twitter account and your first tweet was back in the day, back in the day, because maybe that’s interesting. You if you actually set up an account, it’s like setting up a soapbox to then say something, you’d think that saying something would be some, you know, irrelevant. I think they’re pretty good, those tweets. Giles, thanks so much for coming on. This was a whole hell of a lot of fun.
51:47 You know, we never know who’s going to come in here, like that’s the crazy thing, we don’t know if they’re going to be fun or not fun, but this was a lot of fun, and it’s a great story, and I just hope you guys really kill it with this financing and everything like that. So as we say on Silicon Real, it’s about the people. If you’re listening to us on iTunes, you can see our pretty faces on YouTube. Hope you guys enjoyed the stream. Hit us up on Twitter, [email protected], if you want to help, if you want to knock on our door.
52:13 Yeah, come, come. Yeah, knock on our
