Hussein Kanji - Silicon Valley Matters

Full transcript: Hussein Kanji on London Real

0:20 All right, guys, let’s do this. Yeah, okay. This is Silicon Real, the video podcast dedicated to the people of the London technology startup scene. I’m Brian. I also host London Real, which is a similar format.

0:32 There’s three guys, usually guys, not always. It’s a trialogue. We have people like UFC cage fighter Dan Hardy, the 4-Hour Workweek, Tim Ferriss, futurist Jason Silva and drug smuggler Howard Marks have all been sitting in your chair, Hussein. My co-host today is entrepreneur Colin Pyle, who comes to London from Toronto. You’ve also taken some memorable motorcycle rides across China and India.

0:56 You got one of them on Amazon right now, right? Yeah. The China One, Middle Kingdom Ride, is, yeah, the book and DVDs on Amazon. Awesome. When is the India one coming out?

1:05 India Ride’s pretty much finished. I just saw the final cut. So, yeah, it’s not bad. It’s coming along. Yeah, they still have all the graphics which really adds to the show, right?

1:15 Yeah. But we’re hoping end of this year, early next year, it’ll be out on Travel Channel again. Awesome, awesome. All right, well, check that out. Also, the person here in spirit is Mr Bryce Keane from The Three Beards.

1:25 He’s also part of this show if you don’t know who The Three Beards are, they host the Silicon Drinkabout, which we’ll be going to right after this. It’s every week. You get to get together with people of the London tech industry. It’s a lot of fun. Everyone’s got crazy ideas, and it’s just a really cool vibe.

1:41 So definitely check that out. Our guest today is Mr Hussein Kanji, who is a partner at Hoxton Ventures, which, funny enough, is not in Hoxton. Right, yes. Ironically, we’ll talk about that later. It’s a venture capital company that helps entrepreneurs disrupt existing industries and invent new ones.

1:57 You were formerly a partner with Accel Partners, part an associate, sorry, an associate with Accel Partners. Got to be careful with that. Were you focused on consumer internet, financial technology and software investments in companies like OpenGamma, Playfish and Dapper? Yep. Right, okay.

2:13 You got your MBA from London Business School, undergraduate from Stanford? My brother went there. They did not accept me at Stanford. My dad went there and I didn’t even think to apply, really. He’s getting tougher and tougher.

2:24 It got harder this year than Harvard, so really? Yeah, really. The more like the lowest admissions, I think, in the US now. Back when I went, it was not like that. It was much, much, much easier to get in.

2:34 I’m definitely not, I’m from California, so I went up there and I wasn’t really feeling it, to be honest, and my brother was already there, and I was like f*** this. I’m not going there, so I went to MIT on the East Coast instead, but yeah. Anyway, no, no issues with Stanford. You, my sister went. So, okay, oh really?

2:50 Yeah, my te Oh, nice. Course six, course six, yeah. Was she double E or computer science? A core, double E with bio. Okay.

2:59 Nice. Yeah, there’s like a 6 point something. I don’t get the MIT numbering. Yeah, I mean, when you’re in MIT, you know every major has a number. That makes sense.

3:07 Yeah, so I was course two, which is mechanical engineering. Course six is computer science. Course 10 is like brain science, but like, you refer to the higher number, the harder. Like, no, because 15 is management, which is the Sloan School of Management, which everyone thinks is a joke. There, no offense.

3:21 It’s management is always a joke at every… It’s a great business degree, but as an undergrad, does it get respect? No. We used to call Industrial engineering “imaginary engineering,” which, I think, is like, if you Google it, that’s what almost everybody calls it. So yeah, I think Disney had the first Imagineers were probably IND.

3:39 Yeah. So we’re going to get some hate on that one. Uh, but yeah, that’s MIT for you. I could go on and on. What was I going to say?

3:45 You spent time between London and San Francisco, which is, that’s bi-coastal, you know. Paris Hilton says she’s bi-coastal, but she’s got, I live here. So I moved here eight years ago. Okay, all right, very good. You, yeah, among your AAL age apparently you built Apple’s first website.

4:00 That’s pretty cool, way back in the day. Okay, that’s good. Anyways, enough about that. Welcome to Silicon Real. Thanks for being here.

4:06 Thanks for having me. Awesome, awesome. There’s tons of video of you out there talking to everything from youngsters to Bloomberg to old people, but I listen to you say one thing, and you said since about 1985, only 12 to 15 companies a year turn out to be like those billion-dollar success stories, and I think you broke it down and said, like, half were in China and a third were in Europe, and I was just wondering, I guess it’s ultimately your job to find those companies, and being in the UK, since we’re not in China, we’re not in America, how do you do that?

4:38 So that’s the hard part. So it’s about 12 to 15, and there have been a bunch of studies on this. So there was one done at Stanford by one of the folks who’s now partnered at Floodgate. There’s one done by Benchmark, which is one of the big venture firms on the West Coast. I think there’s another study done by August, and all of them, almost all the studies, same numbers.

4:53 They all did their own analysis, 12 to 15 a year. Most of them in the 80s sat in the US. In the, there was a little bit of a transition to China, so about a third of them would sit in China, and today probably a third are sitting in China. China’s gone from like no people on the internet to 300 million people, and there’ll probably be a billion people on the internet, which is what drives most of the Chinese software growth. I would have never guessed 12 to 15.

5:16 Like, I would number one to come to my head. So the weird thing is the 12 to 15 stays stable. So despite the dot-com bubble, 12 to 15, maybe it goes up a little bit, but it basically stays the same. And if you look and you, it’s hard to do statistically, so you have to kind of do it anecdotally, although you can try and do it statistically. You look back and you see what creates these 12 or 15 companies.

5:36 The vast majority of them are companies that were created in the bulk in the wave of a new market creation. So what’s a new market creation? You know, something happens, the internet pops up, and you can now do certain things that you could do that you couldn’t do before, and new companies get formed, and often times new categories get formed. So a very good example is, you know, there are a bunch of people who believed the web was going to go mobile, uh, back in 2000, 2001, 2002, 2003.

5:59 Most of those guys all failed because they were a little bit too early. 2005, 2006, if you made that bet and then the iPhone came out in 2006, 2007, you could have written an exponential curve and that creates billion-dollar companies. The big company in that space was AdMob. But if you look at AdMob, this competitor was Quattro, which got bought by Apple for 400 million bucks. AdMob got bought by Google for 750.

6:21 The number three company is an Indian company. It’s called InMobi. Doesn’t look like an Indian company, feels much more like a global company, and that’s, you know, people estimate that to be a billion-dollar company. So, you know, number one, number two, number three, all real winners. Social gaming, same exact thing.

6:34 You know, Facebook releases an API, and all of a sudden you can build stuff on top of Facebook, couldn’t do that before. There wasn’t a platform like this before, and the platform wasn’t open. Facebook opens it up. A bunch of entrepreneurs decide that they’re going to be able to build apps on top of this. Some of the apps are greeting cards, some of the apps are birthday cards, you know, birthday applications, a bunch of lightweight fun applications.

6:52 And then a couple of people decide that you know you can build video games on top of this. The biggest is, of course, Zynga. Playfish comes up with the same thing. The number three company in the space, Plum, gets it completely wrong, right? They decide to build on top of the MySpace API.

7:06 Remember MySpace? But all three of, exactly, all three of the companies end up becoming really large companies. So Playfish gets acquired for 375. Zynga goes public. You know, north of a $2 billion valuation.

7:16 I think they got up to four at one point. And then the Plum one, which is the most interesting one, so it completely gets it wrong, right? MySpace, $750 million takeout. So, you know, all three companies end up succeeding. So it’s new market creations.

7:29 So there are shifts in our industry that happen, and I guess part of being a venture guy is figuring out where those shifts are going to be and anticipate them. You have to kind of invest pre-shift or into the shift, which means you have almost no clarity whatsoever into them, and a lot of these shifts are going to, they’re going to kind of expire, right? You’re not going to be able to make that much money on them because the shifts don’t actually happen.

7:49 You could have invested in the mobile web in 2003, 2004. You would have had the direction right, but you would have had the timing wrong. So part of your job is getting the timing right, and a lot of it’s luck at the end of the day. But these shifts tend to build really, really large companies, and because there’s not that many shifts every year there not that many companies that get to those kinds of stages, and then, you know, that number is like I said consistent.

8:10 Europe is now producing about one, one a year, pretty much regularly. We can probably, hopefully, get to two a year, but we’re still at the one a year stage. What were the last like five in Europe? Like, let’s see, what are the big ones? So Wonga is a big one.

8:23 You know, doing kind of real I mean, their tech is real-time credit scoring, taking in a bunch of signals. Like, one of Wonga’s big signals is looking at cell phone data. So they figure out, you know, folks who are not able to really pay. Any, you know, these are folks who are, you know, lower middle class, who are cash strapped and, you know, don’t actually have that much money, which is why they’re going to Wonga for a loan. What they look at is folks who end up paying their cell phone bills.

8:45 And these are all post-paid customers. These are not folks who have, you know, credit accounts with the with the carriers. You know, folks who have enough cash to pay their cell phone bill and keep the cell phone bill alive, probably enough cash to service debt. And so that’s one of the signals that Wonga uses. You could historically you know, you historically go to Experian or TransUnion.

9:03 You look at your mortgage. You look at other signals. This idea of taking, like, cell phone signals was a new signal, and the amount of computation that you need to do to be able to do this is also new. So Wonga is one of them. How big’s Wonga?

9:14 They’re not public, but what would you reckon market cap-wise? A billion, a billion pounds plus. Their last valuation was 800 million. So you know, and that was ironically the guys who backed them. Were Wellcome, and if you guys know Wellcome, the Wellcome trust, the Wellcome Trust, the biggest charitable trust in the United Kingdom.

9:28 They have an investment arm, and that’s what that exactly was there some pasture or something in that? Yeah, there was. There’s been a bunch of friction and controversy around. Is that what you call bad press, friction? Yeah.

9:40 No press is bad press, I think. Yeah, well, I’m just curious if Wonga was in your portfolio, would you sleep at night, would you be happy with that? So we used to have this litmus test at Accel. So our test was, you know, imagine the Wall Street Journal decides to write about you, and you know, they have the little, well, not even your mother, you have that little image, ’cause the Wall Street Journal has like its distinctive image. Imagine that’s your picture on the front page.

10:02 I’m not so sure I could sleep. Back to Wonga, Wonga is a great company. I, all respect to Errol for building something that big, but, you know, I’m not so sure. And to me as, especially, as a Muslim guy where I don’t do, like, you know, usury. Is there a hard, usually is often a soft line, but I think when you’re charging 4,000, 5,000% APR, I think you’re firmly in the user bucket now.

10:24 The counter argument to this, to make it fair for the Wonga guys, right, is they say, look, these are folks who nobody’s going to loan to. The loans are not rolling. They’re only two weeks. So, you know, and if you default on that, they, you know, they obviously try and collect, but, you know, it’s not like the interest piles up and you can think of it as almost like a service fee, versus an interest rate. You know, that’s the positive.

10:44 You know, 4,000, 5,000 percent. I mean, I personally think this is a business that should be regulated right? And the only reason why it really exists is because it’s not a regulated market in the US. It’s a regulated market, which is why you don’t have the Wongas of the world, really. That couldn’t exist in the US.

10:58 No, no, it’s all regulated by the, by, by the folks who. I mean, you can’t charge 4,000%. Does the US have a cap? Is user considered like 20% above or something? They have some kind of cap.

11:07 I know what the, I don’t know. hated that word, user. You know, we’re providing the service. Yeah, well, that’s the, that’s the W, but Wonga is one But same kind of, same kind of meme. You know, just taking real, real credit data and figuring it out.

11:19 Klarna is another one in Sweden. So Klarna is very similar to an American company called Bill Me Later, so in the continent, not a lot of people have credit cards, and not a lot of people pay for goods and services with credit cards. They’re much more used to paying with bank accounts. This is a different phenomenon. If you come from the US, and the further, the further you go into the continent, the more it’s debit card, bank card, and the problem is, if you buy something with a bank card, your return policy, you’ve got to trust the merchant, right, to be able to return the goods, and, you know, you’re paying for the goods upfront.

11:48 It’s not like you can call American Express and say, you know, these guys, these jokers didn’t send me something, right? ‘Cause credit cards kind of give you an implicit guarantee, and they’ll tell the vendor to give you your money back. Exactly. The bank won’t fight for you that way. The bank won’t.

12:01 What banks really fight for you if something happens? I mean, that’s a, that’s a nice pipe dream. So Klarna’s, so Klarna’s big thesis was, can you build a model where you can build a Bill Me Later, you send them the goods now. Obviously, if you’re going to send someone the goods and not take payments, you know, the fraud risk is really, really quite high. So they have this, and it’s all, it’s all computer science guys at Klarna.

12:20 It’s interesting that there’s this parallel computing, there’s a switching technology that came out of Ericsson to switch a you know, bunch of network processors out there, which are, you know, which are switching your internet traffic. They built a parallel computing engine, and there’s a language for this called Erlang. It’s a derivative of Lisp, and, and they use this technology to make real-time credit decisions, to figure out if someone qualifies for, sending them a product and figuring if they’re going to be able to pay for it and will pay for it, and that company’s done really well.

12:49 Sequoia ended up backing them as a growth round. That’s another interesting company in Europe. Probably the most company, the most interesting company right now in Europe, is Supercell, which, you know, started about two years ago. They have two games, Clash of Clans and Hay Day. Actually, both of the mobile gaming companies in the world.

13:07 The market leaders are European. They’re both Finnish, Helsinki digital studios in Helsinki. Plus, you know, mobile talent you know, it’s hard. I mean, Angry Birds was the first, right? So Angry Birds, and they, the last time I checked that 50 million concurrent active users playing their game at the same time, and I think there’s something like several hundred million people who’ve installed the app.

13:29 Huge, huge, huge number. Is that Sweden as well? Helsinki? No, no, not Sweden. And then the other company, Supercell, which built this game called Clash of Clans, which about six, seven months ago is probably doing about a million and a half bucks a day in revenue.

13:43 About a year ago, it was doing about a million bucks a day and today it’s doing about 2 million bucks a day. Is that like App Store cash in the bank? Two million bucks yeah, coming in every single day. And it’s all basically, and I don’t know if you, if you have kids or if you play, if you hang out with kids, but, like, you know, their target audience is kids, and you know they create a clan. They get their friends to come be their clan members, and the game is so well engineered mechanically to force you to, you can level up, but it’s going to take you a really long time.

14:10 So you know the kids are basically going back to their parents and saying, you know, give me the credit card, give me the App Store. And I was with a friend last week, and I don’t, I forgot this, but you know, on the App Store, if you put in your password for about an hour, the password stays stagnant. They it doesn’t time out. So if the kid gets the password for the next hour, they can kind of spend as freely as they want if you haven’t turned up that setting.

14:33 So this particular kid, I think, spent £300 in the course of an hour on this Clash of Clans game. That’s part of the 2 million bucks a day, that Supercell. That’s the premium model, right? That’s what everyone wants to be part of. Yeah, item sales.

14:45 We noticed that Playfish as well. Playfish, when we turn off all the advertising, when we when we funded the company, first of all we didn’t even know if games on Facebook would work, right? Right, you said you spent like a year trying to convince people that people would play games on top of… Yeah, like, you know, that the entrepreneurs behind Playfish were super bright, you know. Chris came in and gave this big thesis of why, you know the gaming market was moving.

15:05 We’d done this internal homework at Accel, saying console games are kind of a, that’s last year’s stuff, right? And there’s going to be something that replaces them. We had no clue as investors what would replace them. We could see that there were, you know, massively multiplayer online games. We could see that there was good stuff happening in the online space, but we didn’t really know what was going to be the next wave, and then here comes Chris saying Facebook just opens up his API.

15:27 You know, I think I built at that point. Facebook had 4 million, 400 million users. I have 400 million users I can market to. And I remember when I wrote the investment memo, you know, we didn’t know if you were going to be able to charge a subscription service. We didn’t know if this was going to be ad supported.

15:42 Games, you know, we didn’t know if you were going to pay for levels. And then what the Playfish guys found out by shipping a product and then testing a whole bunch of stuff, they found that if you turned off everything else except for the item sales, so you force people to upgrade their character by, you know, spending money on their on their player. Conversion, everything maxed out. That was the point on the the curve economically where you maximize: no ads, no other stuff.

16:06 Turn all that other stuff off, everything, every, you, you, all the other stuff. Your conversion rate goes up, everything goes up, and you maximize, you maximize your economic yield. And that’s basically what they did. And then Zynga guys took it even a concept further. And there were, you know, it was funny if you ever talk to Mark Pincus, he will tell you.

16:22 A friend of mine sent him a couple of, like, one of his early, like, buddies. And I don’t think he was an angel investor, but sent him a couple of resumes of like top-notch game designers, right? Like guys who had, like, really creative DNA, you know, perfect product managers. And Pincus said I don’t want to talk to these guys. I want quants.

16:39 I want ex-Goldman, you know, ex-analysts, you know, people who know how to run a spreadsheet. You know, these guys, these monkeys, don’t know how to run a spreadsheet. I don’t want to hire them. I don’t care how good they are at the design or the building of a game. That’s not what he was looking for.

16:51 Number crunchers, just number crunchers, like it was maximizing yield right inside of these games. And it turned out, you know, it was all item sales, and that’s what that’s what happened. You know, it has kind of had its ups and downs. Right now, especially in the last few months, cuz their games have slowed down, but, and they haven’t made the transition to mobile, but, you know, this entire industry, you know, the social games industry, no one there was like a very popular blog, uh, back in the day, that one of the venture guys, I won’t name him, used to run.

17:14 And I remember talking to him about the Playfish investment, and he just looked at me really funny. He was like, I don’t think anyone’s going to play video games on top of Facebook. You know, I think, you know, the apps on top of Facebook when we made the investment were all, you know, the slide was the big company. You know, they were going to be lightweight fun applications that you’re going to play with your friends. They weren’t plays, even the wrong word that you were going to kind of share with your friends.

17:33 They’re going to be like greeting card things, not. And you know, Slide turned out to get acquired by Google. So all of these things actually, you know, these new market shifts are huge, right? Because when there’s a new market shift, nobody knows what’s going to happen. And if you happen to catch the market shift, right, maybe you turn into a billion-dollar company.

17:47 If you happen to catch it wrong, you know, even the incumbents, yeah, even, even the incumbents don’t know, and they acquire you, right? Which is what happened with Slide. So you know, it’s an interesting place to invest. And you know, so you know, we’re looking to see at least as a fund what’s going on in Europe. You know, are there folks out here catching the same trends as they are and the trends are global these days, right?

18:09 And can they position themselves to catch the trend and turn into, you know, the next billion-dollar company? Do you have a question? Yeah, well, just, what, what are you guys anticipating as the next trend, or what are you investing in now? So it’s hard, right? So, you know, part of, part of this job is an extreme amount of humility, cuz, like, none of us really know what the future, what the future holds.

18:28 All we can do is we can kind of, we can, we can do a little bit of homework to figure out where the shifts are changing. So, like, one big shift for us that we see is this whole idea of kind of quantified self or health. Now, not regulated. So I’m not talking about, like, healthcare or medical stuff. I’m talking about the things like RunKeeper or Fitbit, or, you know, Nike has a product, Jawbone UP.

18:49 You know, this is a new market. I have no idea what it’s going to look like 10 years from now, but the idea of being able to measure things that are going on in your body, inside or outside, connect them over to a device that processes it or cloud that processes it and gives you information and tells you what to do. It’s an interesting space, and they’re clearly, I mean, clearly the early successes are all related to, you know, running and fitness, and, you know, being able to track your steps, etc.

19:15 But I think this is at the beginning of the wave, right? I think as we get more and more technology, we’ll be able to do more and more interesting things. We actually backed a company in Berlin that we’re excited about, but again, we have no idea if it’s going to. With all of our investments, we never know what the future really looks like, like, but, you know, they’re going to, they’re building a sensor that accurately measures hormone levels in your saliva.

19:34 So, you know, to be able to measure hormones, you have to be able to draw blood, and blood is, you know, you have to pull it out. You have to send it to a lab. It’s all regulated. If you can build a consumer at-home device for a couple of hundred bucks or a few hundred bucks that can measure this, this kind of stuff, you know, in real time and give you all kinds of data, like, again, we have no idea what the inside’s going to look like. We know what the inside’s going to be.

19:54 We have no idea what people are going to do with it, but it’s an interesting new market. Our job most of the time is listening to people who see these trends before us, anticipating the trends, and then trying to figure out, is the timing right, is the, is the, is the set of, you know, the set of attributes that people are coming to us correct, or or good enough to be able to go build something really big? So it’s really qualitative. It’s a really subjective view.

20:17 I mean, you’re not really throwing darts at a board. You’re not betting on a product or a specific revenue of a market. You’re trying to, so, us as a fund, I mean, I, different venture guys take a very different attitude to this, but for us, like we’re, we’re pretty much in the 100% market camp, which is we’re looking for new changing markets where, again, the entrepreneurs come in, and we’ve backed entrepreneurs literally, you know, sheet of paper, two people.

20:39 You know, come, we the new investment that we’re doing, we’re waiting for the company to get incorporated, hopefully on Monday, they can incorporate it so we can give them the term sheet, because we can’t even give them a term sheet until the company’s incorporated, so we can actually start the process and give them their money. You know, two bright guys, they’ve identified a market that’s shifting. It’s a new market. We think they’re best in class in terms of their talent.

20:59 We look a lot at not just the market but also who they’re recruiting. Our biggest sign for whether a company’s going to succeed or not is who they’re able to recruit as their first handful of employees. If they’re able to recruit best in class, you know, guys who they really shouldn’t be able to recruit, who shouldn’t quit their jobs and kind of join these guys, right? And oftentimes most of the people we back are first-time guys and they’re young. It’s just kind of nature of our industry, so, but if they can go track, you know, a world expert in something to quit and join, that’s a pretty good sign that they’re going to be able to do that consistently over the next, you know, decade.

21:28 So that actually it’s called social proof. So that actually that impresses you when they can get guys to leave industries to come to their, yeah, if you can, if you can hire world-class people around you and you’re sitting on top of this new market, you know, probably pretty well catalyzed to be able to go build something great. And again, you know, we’re venture guys, right? So most of the stuff that we invest in is going to fail, and the reason why we’re so focused on these new market stuff is when we don’t fail, those things can turn out to be really big, and they kind of outweigh all the losses for us.

21:55 You said that you want people to hire better than yourself. Yeah, that’s our second criteria. Well, we found that that’s been pretty consistent. Like, the guys who are exceptionally good are able to hire people who are just as good if not better than themselves. And you look at, like, the early composition of Google, you know, the two guys who started Google, Larry and Sergey, were exceptionally bright, but then you look at the people who they put around themselves, you know, they recruited a professor out of Stanford, Peter Norvig, to come, and he was like a world expert in AI.

22:20 He taught my AI class. You know, you don’t get people like this quitting a 10-year job to come and join a company if you yourself are not really impressive, right? And Peter was a different level. Peter’s still the head of research. He’s got he’s got a senior, uh, senior engineering title in Google, but, you know, world-class guy to come and join.

22:37 And you know, being young, being first-time, you know, being new in the industry, hitting at that level is a really good sign that you’re building something great. It’s a good point. Again, the people comeback is a constant theme on the show, that people are like, investing, you’re investing in the people ultimately. Yeah, of course. The idea and you want a new market, but everyone’s saying, “90% is the people.”

22:57 Yeah. And for us, you know, most of the time when there’s a new market, it’s more than one person trying to capitalize on it. You know, not everybody sees it. A lot of people see the market after the market’s actually clear, and then a bunch of money rushes in, and how much money rushed into the social game space about a year or two after we invested in Playfish and Zynga was already funded, because people understood that social games are a real market, and you can build great companies.

23:21 King.com is one of these companies. It’s a European company, and those guys have just been execution machines. But then you’re backing execution when you’re backing the early part of it, you’re backing the market creation and the exponential growth, and you know, the market forgives most of the mistakes, because you know you get this exponential growth, nobody knows what the hell they’re doing, and the growth kind of carries you up. But the better the people that you’ve been able to recruit, the more you can capitalize on that growth.

23:46 You hire weak people, you’ll rise up, but you’ll rise up a lot slower. So are there times where you see the similar idea but pitched by different groups of guys? Oh yeah, yeah, all the time. We probably see it less here than we do in California. In California you have the luxury of sitting back, and you’ll see like 10, 15 guys all basically, and you know that’s when the light bulb should go off, right?

24:06 Saying, I think there’s a new market here, cuz, like, 10 different people pitch me the same thing, and then in the course of like a month or two, and you know, you can kind of spot the market almost. So you do a little bit of work up front to figure out where the kind of tides are shifting, and then you listen, and in the listening process you learn a lot about the market. So do you make the decision about those guys like in the first two minutes when you meet them?

24:28 I mean, like, what, you know, you had first impressions. Everything. Yeah. I mean, I mean, you know, impressions do count for something, but at the same time, you know, the guys that we back, again, cuz we skew young and technical and first-time founders. You know, we had a founder who had never pitched.

24:46 It was his first business. He was 30, maybe 29, 30 at the time, and had never pitched a business before, and came in, did the investment committee at Accel, and literally read off of his slides. This was probably the worst presentation I’ve ever seen in my life. He was wooden. He read off the slides.

25:04 When we asked him hard questions, he, you know, got really nervous, and his answers were short, and they probably weren’t very complete, and then he spoke in a Southern accent, so, you know, Southern speak, kind of slow, so you know, he didn’t come across very well. You know, fast forward, we went in and backed him anyway. We knew that we’d spent a bunch of time working with him in a much more casual setting, where we literally, you know, hung out, stood around his office, hung out in his conference room, actually wrote a business plan together with them, cuz he had bootstrapped the business.

25:33 He was selling Industrial Supplies products. He stuck up a website. His website used to take literally like 40 seconds to load. This is a terrible website. And he did 3,000 the first month, 10,000 the next month, 20,000 a month after three.

25:47 There was clearly something that he tapped into. Nobody sells Industrial Supplies products in Europe and in Africa and in the Middle East, and had people like the Cutler Air Force military base buying stuff, and they literally found him on Google. So there was something here. There was a gem here. There’s a good guy.

26:02 Came from the industry. He needed some help. He needed some support. He needed to find the right CTO, build a team around him, which we could help. And fast forward a year and he’s running around talking to investors today, and he charms the hell out of us.

26:14 The problem was he’d never done it before, right? So, you know, if you just judged him on that first impression of how he pitched, you would have you would have just, you know, dismissed him at that point, right? But he had a good idea. He had some early market traction, and, you know, you have to, you have, our industry is all about believing in future outcomes. You can’t just look at what people are doing today.

26:34 You have to project and figure out what they’re going to be in 10 years. Right? It’s really easy to read about all the greats in our industry and, like, how great they are today, but you got to look at them like when they first started. Right? When they first started, you gotta, you have to look forward.

26:46 When Steve Jobs was soaking his bare feet in toilets. Exactly. I mean, could you have predicted that he was going to be that much of an iconic… uh, person in our industry? Right. So, uh, and you know, the truth is we often don’t know, but there’s signs, right?

26:59 And again, for us, and jobs fits this as well, look at the folks, look at his first employee. His first employee was W, right? His co-founder. He convinced a guy who’s actually a world-class engineer, because Steve Jobs is not a world-class engineer, right? Convinced this guy to kind of work for him while and quit his job.

27:14 I forget whoever was working at the time. I don’t think it was at Atari or HP or something like that, and got him to, like, leave, right, and go join this company and start the company in the garage. Yeah, exactly. So it’s weird, because like the guys that have those game-changing ideas and that passion and that drive are probably a little introverted and a little crazy, and they probably don’t give the slickest presentation. I wonder if that’s a warning sign sometimes when some guy gets up who’s extroverted and polished and has all the hockey stick projections, and you’re like, ah, this is too, this is too smooth.

27:43 Yeah, I mean, it takes all kinds, and I think in different kinds of markets, like in the enterprise software market, where sales is so important, the guys are much more slick, often times, but you look at the new markets, and there definitely are changes in the enterprise software market as well, right? Cuz there are new shifts in that market as well. Like when Salesforce came around, that was a new shift. It was a very easy shift, going from like the Siebel old-school, you know, million-dollar-plus implementation, so something that was browser-based, much lightweight, but you know, the guy running it was Marc Benioff, and he was a sales guy at Oracle, and you know, was very polished, right?

28:13 So you do see, you do see guys like that, but at the same time you see guys who are like, you know, two kids in a garage, right? You know, the classic Stanford, maram, my story. Um, and you know, again, you have to look forward. You have to see if they have the core ingredients to build something that can be really big. And you know, as much as we back people and we believe in the people, we also believe that the markets also turn these people great.

28:33 Sometimes just being in the right place at the right time with the right idea and the right backing, you know, will lead you to be one of these guys. And you know, people, people develop smart, people develop really fast and really rapidly, and you can almost watch your transformation as they’re running the business, right? So they may be like grad students one day, but the next day, you know, they’re on the cover of one of the magazines, and you know, they’re very slick and very, you know, very, very different, and you can watch the evolution kind of over the few years, if you get to, if you’re lucky enough to back people like that.

29:02 That’s exciting to kind of, you know, watch that whole thing happen. What, uh, can you tell us about Hoxton Ventures, as far as why aren’t you in Hoxton? That’s one of them. Um, because we are, I guess, um, we can’t afford it. We can’t afford it.

29:13 It’s too expensive. We can barely afford it. Um, how, how big are you? What’s your typical investment? How many do you make a year?

29:20 Um, yeah, just, and, and roughly, breakdown of different industries you’re in? Yeah, so, uh, so we set up, uh, we started fundraising a couple years ago. It took us a long time, so the amount of malaise there is in the European economy for venture is so bad. It made life really difficult for us, cuz, you know, there are all these people who’ve been trying to do investments in Europe before us, and not as many of them have succeeded. Some of them have, but not as, not enough.

29:43 So most of the money that goes to people like us has been turned off. So it makes it really difficult to go raise a new fund, and you put yourself in the brash, young new category. You know, I’m 36, but, you know, people tell me I don’t look 36. So skew a little bit younger, and so, you know, going off talking to institutional investors, like, who the hell is this kid, you know, asking me for money in a place where, you know, people don’t really make money.

30:05 So people have dismissed European venture. Europe hasn’t had the big exits, which I think is unfair. I mean, I think historically, if you look back again, you know, 25 years ago, and you were apart from the semiconductor industry, which is very global, and that’s where actually a lot of the success in the European industry has been. But if you look at the software industry, good guy, you’re going to build a company here, likely chances there’s an American who’s got the same idea, you know, who’s going to get three times as much money and then has a market six times bigger than you, and by the time you’re ready to expand, he’s ready to expand.

30:33 So you both go into France, and you, they’re both go to Germany, and you can kind of play out the movie, and it’s very easy to see how the ending works. The guy who wins is usually the Americans, and you know, the edge case is, the is the European, and you don’t see very many great European software businesses as a result, relative to the Americans. But five years ago, or seven years ago, you had Facebook and you had the App Store, so for the first time ever, you could go global as a software business and get distribution.

30:56 It’s not surprising nowadays that the mobile games companies, the two best games are in Finland, right? Helsinki is a 500,000 person town. It is tiny, but Supercell, right? But Supercell have been mobile for a long time, great talent, and almost all their users are outside of Finland, right? So they’ve figured out how to go outside the country, and then it’s become really easy for them because going outside the country means putting a great game on top of the App Store, or, you know, Google Play, uh and you get, or go, you know, Google Mar?

31:22 Uh, what is Google’s App Store? I don’t know. Google’s app store called used to be called the Android Marketplace, but I think it’s called Google Play now. But you drop down on those things, and all of a sudden you’ve got, you know, a billion people that you can kind of target. Uh, you know who’ve got those devices.

31:34 So you can go global, but all of that’s changed in the last five or seven years. So if you’re an investor who’s normally giving to venture funds, you typically look in the rear. You look at fund performance. You look at how the funds do, and then you make a, you make a speculative bet on how the funds are going to do in the future based on how they did in the past. Unfortunately, all of these changes happened over the last few years, so we haven’t seen all that many catalyst for, for, for great venture returns in Europe, because the companies are new in this sense, and the funds that are backing them, you know, the companies aren’t mature enough to see all the results.

32:06 So for us it was a, it was a, it was a tough process, but we convinced enough people to give us money. Just took us a really long time. The reason why we’re in Mayfair which is where we are, right at the top of Berkeley Square. If you’re not a Londoner, it’s the posh part of town. It’s where all the hedge funds are.

32:21 It’s where, yeah, to be fair, Balton’s up, Balton’s up the street from us. Accel is down the street from us, and Ni is like on, just a little bit, a little bit east of us. So the Bentley dealership is right across the par. Well, the Porsche dealership is right next door to us. The Oscar delarent is right across the street.

32:35 Now the reason why we’re there is because one of our investors owns a building there, and he gave us, he gave us the building effectively. We have the third floor. Uh, and one of I remember one of our investors came in, and he said, you know, one of the hallmarks of a good startup is they’re scrappy, and they’re able to convince people to give them stuff at no cost. Uh, and so he was like look at you guys, like you have like a super posh office. Uh, and we have a beautiful office.

32:56 I mean, it’s really nice, nice. Uh, but we don’t, we don’t, we basically don’t pay rent. I mean, it’s basically one of our investors generosity that keeps us there. Um, which is why we’re in Mayfair. If we weren’t in Mayfair, we’d probably be in Clerkenwell, maybe, if it’s Shoreditch, being in Shoreditch or Hoxton is a little bit too east, and then the question is, why do we call ourselves Hoxton Ventures?

33:15 So like all startups, we could not figure out what to call ourselves, so we went through every single variant, and eventually found that Hoxton. I wanted to call, Rob hates this story. I wanted to call Rob’s, my business partner, I wanted to call the gray squirrel investment company. Squirrel investment. Yeah, there’s got to be a good story here.

33:33 Yeah, so, in England they’re red squirrels, and they’re gray squirrels. The gray squirrels are American. The red squirrels are British. The gray squirrels cannot mate with the red squirrel. However, the gray squirrels have no problems chatting up the red squirrels, and they effectively block the red squirrels from doing their thing.

33:48 The gray squirrels also, like, if there’s a big open plain, the red squirrels are scared. They don’t cross it. They stay where they are. The gray squirrel has no problems, goes right across them, which is why it expanded. And there are all these societies in England.

33:59 You can Google this. The New York Times wrote a wonderful piece a few years ago called, like, The Squirrel Wars. Yeah, this, it’s like an eight-page article called The Squirrel Wars, and it’s all about how, like, English, like, they, you know, the red squirrel is like, it’s cuter than the gray squirrel, so they’re all these, like, red squirrel conservation societies, and they want to get rid of the gray squirrel as, like, a pest, like from America. And back at Stanford we have the black squirrel, which we all used to say came out of some, like, lab, and the black squirrel’s taking over all the grad girls in in, at least on the Stanford campus.

34:30 Uh, but you know, we figured, like, this was kind of tongue and cheek. We’re both Americans. We Europe a lot of connotations to that name, but that name was vetoed, so, you know, we ended up picking Hoxton, because it sounds like a good, nice, easy name, and it’s kind of within the meme, right, which is there’s a bunch of stuff happening in East London, and that is in many ways kind of the future of the tech economy. But then, ironically, like I said, we ended up in Mayfair because we have cheap friends.

34:54 Well, that’s important. So, okay, and roughly what kind of capital are you looking to contribute to each company? How many in your portfolio, how many a year? I just try to get an idea of scale. So when we first started, we thought we’d invest kind of between the half a million to $2 million dollar range.

35:08 Again, we still, we think in terms of dollars because most of the things that we end up selling will be to American companies or go public in America. Are your investors in dollars as well? Uh, so all, all, all of our usually. Most, well, we invest in whatever, wherever the company is, so we’ll convert, but you know, we tend to think as a fund and as just a dollar based fund versus anything. We’re a dollar-based fund.

35:25 Um, so when we, uh, when we first started with half a million to 2 million bucks. There’s a bunch of money available in the UK from an angel perspective, or from a seed perspective there’s not a lot of money at the series A, not as much money in the series B. We’re too poor to do series B, and series A is kind of where we saw the biggest gap. And so half a million to two million is where we kind of want it to be. Um, within, within a few months of doing this, we realized that was that we were wrong.

35:49 So we thought the average check would probably be about a million, maybe sub a million. It’s too little money if you’re going to try and build a company. Um, you need more money than this, and we learned this by working with entrepreneurs, and several times we ended up having arguments with entrepreneurs, saying you’re asking for X. We’ve run our own calculations. We actually think you need a lot more than X, like 3X, right?

36:08 Usually 2X. Yeah, so like in the case of Luster, they were asking for half a million pounds. We ran our numbers, and we’re like, you need a million to start with, which, like, a million and a half bucks. Um, and we end up in these conversations where, like, we don’t want the million, we want the half a million. We’re like, look, we don’t mind the valuation.

36:23 We’ll just reset the valuation so you have the same amount of ownership, and we have the same amount of ownership. It’s the different size check. Um, sometimes that’s too much responsibility for folks. So we’ve had these awkward conversations, and we’ve basically settled on our average check is now between a million and a half and two. Uh, so that’s if you’re going to try and build one of these world-changing companies, you just need that amount of capital to even get a start, and sometimes rounds are slightly bigger than that as well, where some other co-investors come alongside of us.

36:49 And as far as deals, you know, again, because we’re so focused on these new market shifts, we don’t think there’s a ton of them. Uh, so we try and do one deal maybe every two to three months. We have no formula for this, right? So we can do one deal every two weeks if we felt like it, if we see the amount of companies that we see. But roughly one to maybe two a quarter is what we’re seeing right now, and, you know, we want to have enough bets in the portfolio, enough bets on new markets, where, you know, we can run effectively a fund strategy.

37:15 Um, to be able to, you know, hopefully, and we’ve been lucky. Most of the investments that we made, have all, with the exception of one thing, which I had at Accel, have not, none of them have gone to zero, with the exception of one. Uh, so they’ve all actually turned out to be decent outcomes. And is it like similar VC percentages? Do you usually take, like, between 20, 25% of the company, or somewhere between 15 to 30?

37:36 Is kind of our number. Okay. And you’ll be the first investor, or like you said, you’re more like the Series A guy, but it sounds like two guys in a piece of paper is angelish? Yeah, we’ve done everything. So, you know, we’re, we’re more like a Series A fund.

37:49 We really do want to see evidence of, you know, some kind of product-market fit. These days it’s so cheap to build the prototype. You can get some, you know, there’s other people’s money, seed money, angel money, et cetera, but, you know, if we, if we have conviction that there’s a new market and these are the right guys, so, you know, when the Luster folks came there, there was one, was X, Playfish, one was another VC. We knew that they could execute. Um, the model that they were doing was already established at Fab.

38:09 They were basically doing the European version. There were only a handful, like, three, four months after Fab, but it was an execution plan. You know, we can take execution risk, right? It wasn’t concept risk. Uh, so you know, we were very, very happy to fund them off of a sheet of paper, the one that we’re doing right now.

38:23 Again, we understand the market. They’re experts in this space. You know, it, the product might not work, but it’s one of these things where it’s very technically dependent, and so you just need to give them the, they can’t go raise angel money to go build a prototype. They’ve got to build a real product, and so again, we’re very happy to make that, that, that, that kind of investment. Um, for other things where it’s like, it’s a consumer service, uh, especially where these days it’s very easy to go test assumptions in the consumer space, and one thing I’ve realized as a venture guy is our judgment in consumer internet companies or consumer mobile companies is basically nil.

38:56 None of us really know how these things are going to work, so you almost have to build and ship a product and see how it reacts, because it’s, it’s impossible to figure out Instagram is going to become Instagram, or Snapchat’s going to become Snapchat. It’s just too hard. Even Instagram, if you look at Andreessen Horowitz, which is a phenomenally great firm, um, you know, they passed on the Instagram. They seed-funded Instagram, and they funded a competitor, and they believed more in the competitor.

39:19 I think it was P pleas than they believed in Instagram, and, you know, that was clearly not the right bet. It’s just too hard, so you end up having to see data. So for those kinds of bus businesses, we actually, there’s a slightly higher burden. We want to see them have a, some, and especially because it’s not that expensive to build a product, so we want to see them you know, introduce something into the market and show us the early bit of data, but you won’t give them the 50k or 100K to get that product.

39:39 You kind of want them to do that on their own. Yeah, yeah. And there, there’s other money out there for that stuff. So we’re, we, we try and be the scale investors. So again, we can be very early in the scale, in the scale part, but, you know, we want our money to, to make sary growth more than anything.

39:53 So where do you find your companies? Generally, do they come to you, or, like, how do you find this guy with an idea and they’re not even incorporated? Yeah, so we’ve, we’ve, lo, we, we, we just we just did an internal bit of work, um, to figure out where our companies are coming from. So we get, you know, we chase after stuff that we hear about, uh, cuz, you know, that is part of our job. Uh, we, you know, we go to conferences, etc., and we, we meet people there, uh, but virtually every single investment that we’ve made, I actually think every single investment that we’ve made has been inbound from the entrepreneurs.

40:23 Uh, so they have figured out that they want to work with us. Uh, maybe they, we’re one of a handful of people that they want to work with, and they’ve come and talked to us, and we’ve convinced them that they should take our money. Wow, do you do PR? Uh, well, we, we end up in in things, but we have, we don’t have a PR firm. Um, you know, we uh, we don’t actively look for press.

40:43 Uh, you know, but, you know, when people want comments on on things, you, we’re very happy to contribute. So, and are you always looking for money? Are you always raising money, or is that something you have enough money now, or, we’re, we’re done, thank goodness. Uh, we were, we were in, we were, we were in that it’s the same bucket as an entrepreneur, except, you know, unlike an entrepreneur, where you can actually, you know, take a little bit of money, prove something, come back for some more money, you know, you’re kind of, you know, you hold out the bag and say, you know, trust me, I’ll give you your money back in 10 years, and I’m really good at my job, and there’s no proof that you have whatsoever.

41:14 So, um, uh, we’re past that phase. Our next phase for, like, funds, usually raise on a three-year cycle, so in about two and a half years we’ll be back on the road again, hopefully this time with a portfolio. You know, unlike before, actually, what we, as we were going through this, you showing people evidence that you can actually do what you say you’re going to do, even at any, even at a small scale, is is just as important in the investment business.

41:37 So what we started doing, we took all of our savings, uh, which wasn’t a lot, but we took all of our savings, all of our outcomes, and we’re basically surviving. We had no salary for for three and a half years. Uh, so we took all of our savings to basically fund ourselves, but then we said, you know, what, we had an early exit. We said, let’s just take all the proceeds, and, you know, what, screw it, we’re going to prove to people that we’re actually good investors, and we started investing, and uh, we started investing some of our investors came alongside of our investments, and this is how we did the first handful of deals, and, and that made a difference, cuz among that, among, we had two exits in, in, you know, in, it’s been basically a year and a half, and people, you know, said, maybe these guys are, they might be young, you know, they might still be unproven, uh, but you know, they’ve got instincts, they’re, they’re seeing stuff, and that made it a lot easier to fund raise, for, because you used your own money in the fund.

42:20 Yeah, yeah, well, this wasn’t in the fund. We were doing it as, like, a special purpose vehicle, so we’re taking our money, pooling it, put into a company, holding it directly, so we did go cardless. this way, we did Luster this way. Um, what else we did? Taro this way.

42:34 Um, and then, you know, people, people said, yeah, you, these guys might be able to trust them with giving them money and putting it into a fund, and getting the fund off the ground. And then you talked there about sort of some quick exits. Do you think that’s changing, at your curiosity, because we had Simon Cook in your chair when he was talking about sort of five to seven exits, and you’re saying, you know, you had a few in a year and a half. Yeah, I was surprised to hear that.

42:55 Yeah, is that something you see change in the industry, where actually exits are happening quicker? Or, yeah, I think I think they’re different kinds of companies right now. So there, you know, there are companies, um, especially in Europe, right? You know, if you’re scaling, there are American companies interested in acquiring you to be, you know, so in the case of Luster, you know, Fab was growing, and now Fab, I think, does almost 35, 40% of its revenue in Europe, and a lot of it’s attributable to Luster.

43:19 They also bought a German company, so the two combined, and what do they do? I don’t know. Fab, or, so Fab, uh, Fab sells boutique, bouquey design goods that you would normally find at shops like the independent shops online. They initially started off flash sales, so it was, you know, one thing a day or a handful of things a day. They’re now much more like a store.

43:39 They’re actually, they built their first physical store in New York City. So I mean, they’re trying to build a design-led IKEA, like, some, you know, with boutique designers, but, you know, with all the advantages that IKEA has, a low price, you know, availability. Um, and when we looked at the market data, uh, Europeans spend three times as much as Americans do on decorating their homes, both in terms of volume as well, three times. Yeah, that’s cuz they know how to live, or they have smaller, and they have smaller houses.

44:10 Is that per square foot? They smaller houses, but think about Scandinavian design, you know, uh, Italian design. Like people care much more about their fit and finish in their home so it’s both volume as well as price per unit. So we looked at what Fab did, and by the way, Fab has a wonderful story, right? They started off as a gay social network called Fabulous.

44:28 Uh, didn’t work. Uh, and one of the things that they did on their discussion forums was decide to sell some stuff, and they noticed that if they sold these design products, they stuck really well. Uh, and so they pivoted entirely, turned from Fabulous to Fab, and decided to become a design store. Awesome. And their early users, 65,000 users, were their gay social network members, and then, you know, kind of, it kind of, uh, it kind of grew from there.

44:51 They have a few million people now using it. Um, so Luster is doing the same exact thing, and when Fab was thinking about expansion, they bought, they bought Luster. So actually, they came to us with, with pretty much a gun to our heads, saying, look, either you sell to us or we’re going to come into the market. And, you know, this is a big, big difference between American firms and, and European firms. They, in the course of about eight months, I think, raised about $50 million.

45:13 Fab, yeah, we, in the course of eight months, raised 750,000. You know, this is a totally different… So when they came in, they came knocking in England, so we’re going to spend a million dollars a month. You at that point, we were not spending anywhere close to those kinds of levels, and so the question was, do you sell to Fab or do you try and raise around and go head-to-head against them? Uh, and they made us an attractive enough offer that it made sense to sell.

45:34 It was extortion, but it is extortion, and that’s exactly what you crush you. Otherwise, exactly, and it was, it was very entertaining conversation, because it was very polite, very diplomatic, but the message is pretty clear: is either you sell or we, we, we compete, and we figured we probably had a four or five month head start, right? So even if they didn’t want to compete, it would take them a while to be able to build the talent base, etc. Uh, so we’re able to use that to our advantage, and there are a couple of other people interested in the company as well.

45:57 So, so you were talking about early exits. Sorry, just finish up on that. Yeah, so, you know, so you do see early exits like that. You also see early exits in the, you see them less in Europe, and in the acqui-hire space. So you know, a company builds something, they’ve got phenomenally gifted engineers, you know, Facebook, Google, Twitter, etc.

46:12 They’re all looking for engineering talent. I mean, it is, it is, you know, prices have gone up. The great people are great. You know, everyone’s, there’s a huge hunt for talent, and because these companies are so desperate for great engineers, if they see a company that’s struggling, that’s probably not living up to where it wanted to be, and but they’ve got exceptional talent, they’re willing to acquire it, and so you see a lot of these early exits for that reason, just for the people, just for the people, and, and the tech as well, or the people.

46:38 It’s usually the people. Wow, that’s wild. Uh, cuz the tech they can kind of rebuild, but the people, you know, the people are hard to find, and they’re paying like half a million dollars for these people, usually, a million, a million to a million and a half per person, and they only value the engineers. So you know, if you’ve got 10, 10 people, and two people are like, bus people, tell that to the sales guy. Ex-CEO.

46:56 CEO, man. If the CEO’s a coder, it’s great. If the CEO’s not, and they’ll run engineering interviews on these kinds of guys, before, yeah, to make sure that these are the folks that they want to hire. In, why don’t they just poach them? Uh, it’s hard if you’re cheaper, like, you know, you, you show an engineer, you know, a lot of zeros.

47:14 Yeah, and you know, so, but you know, salaries in the Valley have gotten inflated, but you know, usually if the startup’s done a good job at recruiting, they’ve also done a good job at retaining these guys, cuz, you know, these, these engineers are getting offers all the time. I found out my old salary, so you know, I was probably director-level product manager. Um, you know, back in the day you’d earn somewhere between like 100 to 120k dollars. Uh, you know, it’s a good salary, and you know, if you got to a VP product manager, you probably earn 2 to 150k today, 400 to 600k.

47:45 I, you know, these are, these are insanely high salaries, and, and there’s a scarcity of talent, and so, you know, so there’s, there’s a war for talent, and so people will buy, for, for talent. Is that the big, the big sort of debate in the US about immigration? Just because they’re keeping some immigration down, and if they open it up, maybe those salaries, all tech companies want immigration doors to open, because there’s, yeah, yeah, and because we, they want more people, so the local engineers are are fighting for immigration.

48:13 Yeah, for non-immigration. I want to keep my 400,000 salary than you. So the company keeps these engineers with equity stakes, but they don’t have non-compete agreements, usually, with software. Non-competes are unenforceable, at least in law, so you can’t stop somebody from working somewhere else. So you keep them with their equity, or whatever, or the idea or the team.

48:33 What, what is a, um, a master’s in computer science out of Stanford making when they, when they, they sprayed out 100, 100? So in the old days it used to be like 70 to 90. Yeah, the old days used to be even less. Yeah, maybe even less. Yeah, I think now it’s probably 120, maybe, maybe even a size 150.

48:50 So on par, would say a business school? Yeah, yeah, and a lot cheaper. Yeah. Interesting. Um, um, all right, we, uh, we are, you know, back to your timing question.

48:59 Just really quick to finish up on that. To build the great companies, you know, to build the things that turn, it’s, it’s seven to 10 years. You know, people forget, and Facebook started 2004, you know, they went out on the public market 2012. Right? That’s eight years, and Facebook feels like an instant phenomenon, right?

49:14 You know, it feels like it just happened overnight. You know, overnight was eight years. Um, so you know, so the great companies still take a lot, still take a while, but the quick sort of, the quick ones. Yeah. And so you’re, you’re getting this kind of bodal distribution, right, where you’re getting the quick ones, which are the ones that are either not working or they’re working well enough, but you know, they could fit within someone else’s home.

49:35 And then the really great ones take a long time. So um we we always like to ask a couple Devil’s Advocate questions, so I got one. So, uh, I’m going to ask you about Hoxton Ventures. I mean, uh, you guys have said some things on your site, you know, you like the young technical first-time founders, and then I saw it said that you said you roll up your sleeves and help, and actually Simon from DFJ was here and he was talking about the time, and I think Love Film’s warehouse burned down, and, like, they all had to go in there to, like, collect DVDs and stuff like that.

50:01 I was wondering, is it really true that you roll up your sleeves and help? And if so, give me an example? Yeah, sure. Uh, so most of our helping is, so we’re a passive fund, so we have no desire whatsoever to run these companies or to tell the companies what to do, or, you know, to, you know, there’s some venture investors, and oftentimes they’re more private equity investors who consider themselves active, right? They like telling management what to do.

50:26 We’re dumb, right? We write you a check, you know, the market way better than we do. All we can do is, we’re rolling up the sleeves is making sure and facilitating intros and connections, so that you can get to where you need to be 10 times faster. So I give you an example. So we invest in this company, it’s again, another early-stage company, in Sweden, called Compa.

50:45 They build a real-time bidding engine on top of Google. So they look second by second. It’s actually every fourth bid. That’s what Google’s API allows you to do, to figure out if you’re spending money on top of Google for advertising, whether it’s positive yield or not. So positive yield, uh, and they’re trying to maximize your yield.

51:01 Um, their big reference customer now is Netflix. So they improve Netflix’s spend on Google significantly, like in the double digit percentages, which is huge. They’re doing, like, a real-time ROI on your advertising spend. Yeah, so very similar to what, like, a quantitative hedge fund would do in the markets, but doing this on advertising. So when they, when we invested in them, you know, one of the things that they really wanted to do is get close to Google.

51:22 So we called one of our friends who happens to be one of the early angel investors in Google, Ram Shriram. He still sits on the board. He was the guy who wrote them a $250k check and walked away with a billion. Uh, you know, great investment for him. Uh and so we got, so because Ram is, you know, because of that he’s got money, and so he, we got him he, we introduced him to Compa.

51:40 He got excited, so he ended up investing alongside of us. The other guy invested was David Axmark, who founded MySQL. So among the three of us, you know, we have a decent Rolodex, and so when Marcus, who’s the CEO, and Marcus is, I think, 26, so he’s a young guy, uh, first-time founder, uh, super, super, super bright. But you know, whenever he needs access to folks, he calls us up, and usually we can shortcut what would normally, and he’d be able to do it on his own.

52:05 It just might take him, like, a week or two to track down the right guy on LinkedIn, and, you know, meet so-and-so. But, you know, it’s a lot easier when Ram, who sits on the board of Google, or us, pick up the phone and call up a Google exec or an exec in the Valley to say, you really ought to meet Marcus and make that connection. So a lot of our business in terms of being active and rolling up our sleeves is, is that kind of, is that kind of stuff. But there have been instances where, you know, sometimes we actually have product DNA.

52:28 Now our product DNA is a little bit, we’re getting old and long in the tooth, and, you know, we haven’t been building companies recently because we’ve been investing. But you know, there’s still some stuff that we, we know, right? So we know how Google, we know how to optimize analytics. Sometimes probably don’t know how to do this to the level of someone who worked at Playfish, but sometimes if you don’t have a guy like that on your team, you can run those questions past us.

52:48 So we’ve done this all the time with Tesaro, which has been building out its team. Um, you know, they come to us with questions like how to optimize conversion, and we can point them… look, pretty detailed. Rob is much better at this than I am, because Rob’s been closer to building stuff than I am. Rob used to run the front end part of AdSense at Google. Say knows this super well, but, you know, he can write very detailed stuff on how to how to do some of these things, um, and, and pass it on.

53:11 So, you know, if one of our companies calls us up and says, you know, we’re selling out of all of our boxes at Christmas, we need you out here in the warehouse. I think we’d we’d cancel our vacations and go back in and put on the overalls, and do that too, might be held to that okay, all right, that’s a good answer. Uh, you got some for? Um, yeah, I guess, you know, I think the whole VC world now is PE. It just seems a lot more holistic and more for the entrepreneur.

53:37 Do you think that’s, is that sort of just kind of smoke screen, or, or you really think, like, the VCs are changing and they’re working far more with the entrepreneurs and not just for the quick exit and the quick returns, but are actually trying to grow billion-dollar companies and hang on to them for a long time? I think it, I think it totally depends on the, every firm has a different strategy, and I think in Europe you probably don’t see as many of the, you know, I’m, I’m shooting for the big outlier. I think here, you know, so we, one of the things that we explain to our investors, if someone came to us and said, look, you can invest in a company, put a million bucks in, and I can guarantee, guarantee that you will make three times your money, uh, so you will not lose your money, and you’ll have a check for 3 million bucks in, say, 5 years, we would turn that investment down, uh, if it has no potential for a billion-dollar outcome.

54:21 So we’re only interested in the things that can really be defined in categories. I would argue most of the venture community, at least in Europe, would take that, would take that, that bet. The reason why we don’t do it is because if we have a bunch of those things in our portfolios, we have a limited amount of arrows in our quiver. If we have a bunch of 3Xs in our quiver, even if it’s 3Xs, we will have failures, and our fund returns will go down. So we’re only shooting for the really large outcomes.

54:45 As far as the entrepreneurial service, I think the industry is shifting, right? So the way we think about this is, you, the entrepreneurs, are our customers, and then our shareholders are our investors. So we’re in the business of making money for shareholders. That’s what we’re supposed to do, but we only do that by empowering our entrepreneurs. So our entrepreneurs, or our customers, we want to make those customers as happy as possible.

55:03 How do you make them happy? You obviously write him a check, that helps them a lot, but that’s sometimes not the only thing that needs to happen inside the company. So whatever problem they’re facing, we want to be one of their first points of call to fix it for them, or to help them fix it. Uh, the more we can do that, and there’s some firms that have done a really admirable job on this stuff. Andreessen Horowitz is one.

55:23 Social+Capital, Chamath’s fund, is another one in the Valley, where they’re actually building processes inside of the firm to be, as, as entrepreneur, not just entrepreneur-friendly, but as entrepreneur-service-friendly as possible. Right? So they have recruiters on staff, PR people on staff. We’re a small fund. We can’t do that.

55:39 So you know, you get Rob and me. Unfortunately, we can’t have a payroll of folks. Uh, Andreessen Horowitz takes an approach where they’re trying to be like CAA, Creative Artists Agency, in Hollywood. Right, where if you’re an actor or producer or director, right, it’s a full-service operation to make you as successful as possible, and CAA takes care of a lot of that stuff. We would love to do the same stuff, but to do that, you just have to be a much bigger fund.

56:00 So probably something on our horizon. Um, now I don’t think every single firm is like that. There are still firms that look at entrepreneurs as the folks who are, you know, making them money versus, you know, the guys who are the stars, uh, and trying to make them shine. So, you know, it totally depends. It totally depends on the attitude of the… you could be anywhere.

56:17 You could be in Silicon Valley, you could be in the Alley in New York City. Why London? And, and, and everyone on this show, we talked about it, is it, you know, doesn’t have the big exit, doesn’t have the number of IPOs. If if anything, it’s, you know, everyone talks, “okay, F has potential, fintech does.” But, you know, do you find opportunity?

56:34 So you know, I came here accidentally, right? So I came here, uh, you know, I came here. I, I had a bad breakup, uh, I didn’t want to go back to Stanford, and I said, you know, when I applied to business school, there were a handful of places I could go. One of them was to go back to Stanford. Another was to come all the way out to London.

56:48 I had a bad breakup. It was with a Stanford girl, didn’t want to go back there, and moved out here, relocated, and then accidentally Accel called me up and said, can you help out on the portfolio? And I joined the firm, and I basically, I mean, I kind of went to business school, but really most of the time I was working at Accel, uh, and then I stayed at Accel for, for a couple of years after, after school. Um, and I realized, you know, the world was shifting in Europe, and if you look, you know, you look at New York.

57:12 New York had the same shift, right? Uh, but, you know, New York is a very vibrant tech economy right now. Lots of investors chasing after stuff there. Not that many investors chasing, chasing after stuff anywhere in Europe. It’s a third the size of the market in the US, and I would argue the quality is going up to the right in terms of people who can actually build these large businesses.

57:29 And so this is, I’ve been here for eight years. I got, you know, permanent residency a year ago. Said Rob, both of us ended up here almost accidentally. We both like the international aspect, but we both see it as huge market opportunity, where they’re, they’re not that, in terms of absolute numbers, there’s not that many investors in terms of relative investors, there’s not that many investors who have deep connections to the valley, not that many folks who can pick up the phone and call up one of the Google board directors and make an unfacilitated intro.

57:54 We’re fortunate, cuz we both came from that EOS system, when we know these guys, so it’s easier for us. Um, and that’s an that’s an advantage, and it’s a service that most entrepreneurs here don’t get. Um, and there are not that many investors who are trained in the Silicon Valley way of building things, which is try and build something that can truly be great, right? You know, if someone asks you, can you be a billion-dollar company? Have an answer.

58:14 Your next question should be, can you be a $1 billion company? Can you be a hundred billion dollar company? You know, risk in the UK and risk in Europe is not, it’s not understood the same way as it is in the Valley, where you’re always shooting for something bigger and greater. So you know, I would argue we’re both two Americans, kind of fish out of water. Right, maybe we should go back to America, and we probably could be reasonably successful at, on the West Coast, squirrels.

58:36 We’re gray squirrels. Uh, you know, sometimes we’re, we’re annoying. Uh, you know, sometimes we’re offputting, because you know, not everyone thinks it’s, we’re brash, you know, we’re in your face, uh, uh, we’re young, uh, but you know, there’s a, there’s a big market opportunity for the guys who are building these kinds of businesses. You know, again, we’ve been fortunate. They come to us, and they like what we stand for.

58:55 Not every single person does. Uh, so you know, we’re, we’re binary in that sense, but you know, if you’re going to try and build one of these things, I think we can actually offer something in this market, and I think this is a market that needs people like us. I would love to see another four or five folks like us, four or five firms like us, not even people like us, because that would vital, that would revitalize this economy. Right? We need more money.

59:15 We need more, more of this attitude. The more of it that you get the more of a community you get around it, and the bigger the entire thing gets. Um, you know, so you know one of my, like, one of my biggest disappointments here, still to this day, and I talk a lot about this, is I think employees don’t get enough stock options, you know, and this is a huge cultural difference between America and specifically the West Coast, not even the East Coast, the West Coast, where you create 20 to 25% option pool for your employees, and the reason why you do this is, as an investor, and the reason why you encourage it as an investor is not so you can make as much money on that deal, because obviously you’re going to dilute, right?

59:48 You’re going to give away a percentage of your company to employees, but those employees are going to go off, and, you know, most engineers are going to go off, and if they get rich, they’re going to invest in other engineering stuff. They’re going to invest in the next wave of startups. They’re going to have some capital to go experiment, and that’s how you get the YouTubes, right? You, the PayPal guys. Um, sorry, the YouTube guys were not PayPal executives.

1:00:06 They were like engineers at PayPal, but they made enough money to not have to worry about rent, which allowed them to go off and build something like YouTube, which turned out to be a great outcome. So you want to see wealth get recycled, and you want to take a very long-term view. I don’t think there are enough people in Europe who have this kind of view. So I would imagine, I, me, I would, I would argue that folks like us are, are in many ways necessary for, for the, for the ecosystem here to get stronger, but I want more of us here, and, and that, that’s hard given how, how bad the fundraising climate is for folks like us.

1:00:33 Simon said the same thing from DFJ. The last thing you would expect, you know, a capitalist to want is competition. You know, but I guess for you, it expands the market. Expands the market. I mean, it’s hard work building these companies, right?

1:00:44 And you need, you need a collection of people around the table. Uh, you know, you need the entrepreneurs, you need the executives, you need the engineers, and you need the money, right? So, and you know, it can’t just be one person or two people, or people supporting the economy. It’s much easier when they’re 20 or 30 people. I like, I like your website.

1:01:00 One of the things he says on there is “We Believe Silicon Valley matters,” and you know it’s one short sentence, but I mean, it says a lot about your whole mantra. Yeah, yeah. I mean, you know, we we compare it, you know, if you’re going to build a financial company, uh, you, you can be anywhere in the world today and trade. Right? You can trade on a boat, right, if you wanted to, but, you know, for connections and for knowing flow, you know, you’re probably going to be much more successful if you came out of London or New York.

1:01:25 You could even come out of Dubai or Singapore, but it’s probably not to the same level as New York or London, because that’s where all the really smart people, you know, that’s where the major leagues are, that’s where the Premier League is, so that’s where you really want to be trained. Our industry, as much as it’s getting global, and it’s getting very global, very distributed, you know, the center of our industry to this day is still Silicon Valley, so you want to be as plugged into that community as possible. The more plugged in you are, the more chances of success you have.

1:01:49 You don’t necessarily need to be there. I would argue in some cases you do, and some cases you don’t, but you need to be plugged into that community, and that’s why we think it matters so much, and there’s not enough people in London or anywhere in Europe, I think, who are as well connected into that ecosystem as they should be. There’s a little bit of a disconnect, a divide shrinking, but there’s still a little bit of a disconnect today. It’s wi… stop.

1:02:10 All right, I’m going to hit him with the advice question. Yeah, you ready? Here we go. If you made a phone call to the 20-year-old Hussein, and you had to give him some advice, and it can’t be to buy Apple stock or some nonsense. What would you tell him?

1:02:22 What would you tell that kid? Oh wow, that’s that’s hard. Uh, yeah, it’s this is Silicon Real. Yeah, yeah. So I mean, that’s hard.

1:02:30 I, you know, Bloomberg won’t ask you these questions. You know, I took, I took. If I have, I don’t have very much regret in this, but you know, one of the things is because I started up a company, uh, and because a lot of my life has been on this deferred plan, I think you hear this LW from entrepreneurs, right? You know, you do something, and you’re spending all your time doing something with the expected, you know, the payout, and as well as, like, being able to do the next thing in your life, kind of comes down the future, right?

1:02:55 I’m going to work really hard on this. I’m going to ignore relationships. I’m going to ignore ex, right? Uh, you can kind of see where I’m going with this. Ignore food, ignore clothes, exactly.

1:03:03 I’m going to go build something really big, and then once I get really big, I’m going to go on, and I’m going to worry about all that other stuff, right? You know, to the extent, I think, as you get older, you get a little bit wiser on this stuff, and you realize you can do a lot of these things at the same time, and you’ve, you’ve gone, you know, you’ve gone to China and India and you’ve built companies. I mean, you can integrate both these two things in your life, and I think when I was in my 20s, I was definitely on the deferred life plan, and I I would encourage, I would have encouraged my younger self to not be as deferred, uh, and to integrate some of this stuff much earlier in your life.

1:03:32 Um, you know, does living in London make you think that even more, because you’re next to, you’re in London, people announce their vacation plans. You know, in the US they keep them quiet. Obviously, on Europe they take August off. Do you think being here as a location also kind of allows you to appreciate there can be a work and life balance, and they both can help each other? Yeah, yeah.

1:03:52 I mean, to, I, I think people here do a better job than in the US. I mean, I think people on the continent do a better job. I think people here don’t scale as much. I mean, they, they take out lower, they, they take out if they see a certain thing, they, they go for the lower-risk outcome. So I would still, I, I still think you can maintain you can go for the big outcome, but you can, you know, you can be less deferred about your life, and you can you know, you can find ways to integrate these two things in together, and there are lots of, there, lots of folks who, you know, become triathletes or run Ironmans, or you do whatever it is that they’re passionate about, and still run their companies at the same time, as opposed to putting stuff off.

1:04:25 And maybe I’m doing this, cuz I’m, I’m, I’m getting closer to 40, right? So I’m hitting my middle age, you know, at some point, and you, you realize after a while you know, you put a lot of stuff on your deferred plan, and, you know, you really should be able to integrate it in with the way you’re, you’re living life. So yeah, I think it’s part of the American mentality, maybe Canadian mentality, that if you’re, if you choose to do something like a project and you’re not putting 24 hours a day into it, then you’re not really committed.

1:04:48 And this whole concept that, yeah, you can maybe run a triathlon, and it’ll get your head in a better space, that you might be able to work better, and more than that, if you take time away from whatever it is that you’re doing, then you’re, you’re, you’re putting whatever you’re doing at risk, right? And, you know, these things are not as zero-sum as, as you would imagine. There, they fact that often times they can be really quite additive, right? You can do both, and both end up rising.

1:05:08 Yeah, both end up doing better, right? Because you’re actually able to give yourself some of that space. Yeah, definitely. All right, there’s two more parts of the advice question. Uh, the second one is what’s the best advice you’ve ever received?

1:05:17 So the best advice I’ve ever received was from Paul Saffo, who, who at the time was running something called The Institute for the Future, is now a professor at Stanford. He said, when you’re choosing mentors, and this stuck with me for a long time. When you’re choosing mentors, there are mentors that you will find that will want to see you succeed, but only to the level of their success, and there are other mentors that you will find that want to see you succeed to the maximum level, and they will never keep you back.

1:05:38 So when you’re choosing a mentor, find someone you know, where if you eclipse them and you become a hundred times better than they do, they will be proud of the fact that they were mentoring you. And not everybody’s wired to be this way. There are a lot of people in the world who will, you know, look at you and say, you, I want that guy to succeed, but, you know, only if he’s a level below me. Right? I’m the managing director.

1:05:56 I want him to kind of be a little you know, step by step behind me, cuz, you know, he’s younger, etc. You want to find those people, and you want to surround yourself with the people who want you to, who want you to grow to your maximum potential, whatever that potential is, and if you overshadow them, kudos. Right? You’ve got to play a part in their kind of, in their kind of success. And they’re really hard people to find like that, and if you can find people like that, they’re they’re, they’re super valuable, not just mentors, even friends, girlfriends, exactly, employees, employees as well, who, who, who your mentors.

1:06:26 So I me. Paul was one of them. Um, you know, I had great mentors when I was at Accel. I had a couple of great mentors. Uh, my old co, my second business was a really good mentor.

1:06:35 Um, you know, so they, they were great at, like, pointing out stuff. So, you know, there’s, like, a, there’s a group of people I can go back to and ask a bunch of questions. And you, one of the things in this fundraising journey, which is quite difficult, we, we made a bunch of kind of friends and supporters, you know, who really, you know, they just took an interest in, like, you know, the young guys who are trying to build a venture fund from scratch, uh, in a difficult and and went out of their way to make connections for us and to help us out, and, you know, for, for you, know, completely selfless motives, right?

1:07:02 Just to see us succeed. And so you can intersect a bunch of these kinds of folks, but they’re rare. Uh, and so you know, but that goodwill does exist out there. Yeah, it does, and it’s probably more prevalent in our industry than any other industry. I think our industry is an industry which knows that, you know, supporting people, growing people, leads to, you know, it works itself out in the long run.

1:07:22 It’s the funny thing about mentors. As you get older, you, you know, when you’re young, you’re like, oh wow, I’d be great if that guy mentored me. I don’t know why he’s doing it, cuz he doesn’t get anything out of it. And when you get older, you see that 22-year-old who has a great idea, and you’re like, I really want him to kill it, you know? And that really makes my life better.

1:07:38 And I hope he just owns it, and, like, I can help him, and, like, I don’t even need him to thank me later. I just need him to just do it, and that’s just as important. Uh, you know, when you get a bit older, that relationship can be, and I find you can just see it better as you get older. You’re like, I was that stupid 22-year-old. You know what I mean?

1:07:56 Not thinking, and you can just be like, no, no, no, don’t do that. There was an article on LinkedIn recently, and they said, uh, don’t find a mentor at a company. Find someone that will champion you, and that’s what they said. And maybe it’s a little bit about what you’re saying. It’s one thing to go and get that occasional piece of advice and to get patted on the head or whatever, but you have someone who’s in those meetings, saying, who’s saying, you really should take a look at this kid.

1:08:18 He is going places, really give him the work, give him this, because he’s the guy I’m putting my money on. I mean, that’s like a kind of a different person, and maybe someone that’s just giving you the advice. So all right, last part of the question is, uh, you know, there’s a lot of people listening to this on iTunes, watching us on YouTube, and some of them are young entrepreneurs, or maybe they’re at business school or at Stanford, and they’re 20 years old, and they want to grow up one day and be part of one of these startups, or maybe they want to be a venture cap guy or something.

1:08:42 What advice do you give them? So the venture cap advice is one that we often get, right, especially as one of the younger guys. You often times get this question. The best training for venture capital, if you’re going to do early stage and late stage, is a little bit different. Different, then it’s more financing.

1:08:56 Um, if you’re going to do early stage, is learn how to build a company. You know, work for a company. So you know, all these business school guys who come and, you know, knock on your door, saying, I want to learn how to be an investor, and, you know, invest, because it’s a, it’s a cool job in many ways, right? It’s hard to run a fund. It’s really hard to get fund returns, and you have to learn the fun part of the job.

1:09:13 Um, but you know, the real core part of the job is learning how to build companies, and the only training for learning how to build companies is being in a company building a company. Um, you can’t go to McKinsey to learn this stuff. You can’t go to Goldman to learn this stuff. They’re great places, and they’re great training grounds for other things, but they’re not training grounds for this stuff. And so then the question is, finding a startup, and the best startup, and this is where it gets a little bit more precise: the best startup to join, and you have to have a very long view if you’re going to work in this industry, right?

1:09:40 To take a 10-year view. Don’t try and get rich in two years or three years or not, you know. Take a 10-year view. Almost everybody who I know is taking this advice and taking a 10-year view. Sometimes they hit it right out of the park the first time.

1:09:50 Sometimes it’s the second time. Sometimes the third time. Each one, there’s usually a three or four year gap, but over the course of 10 years, they usually make it. So a bunch of my Stanford classmates have done very well. You know, some of them exceedingly well, but most of them have done pretty darn well.

1:10:02 Um, seven, eight figure payouts, that kind of thing. Yeah, usually seven plus, sometimes eight plus. Uh, you know, pretty well. But, you know, 10-year horizon, right? So you know, you might not get it the first time.

1:10:10 Might not get it the second time. You’ll get it the third time, but surround yourself, put yourself in a place where you’re hyperconnected in the industry. So not every single startup, or not every single company that you join, works alongside of its peers. Good, very good example. Microsoft’s a very insular place.

1:10:24 It does business with other Microsoft people. It has, you know, obviously does business with Intel and now Nokia, etc., but it’s an insular place, where something like a Yahoo is very, very, it’s very extroverted, right? It does deals and partnerships with people all across the industry. This is especially Yahoo in its early days. It was all partnership driven.

1:10:41 So you want to be in a, in a nexus of an industry which is very connected to other folks, um, because you want to be able to transition at some point, and that’s how you’ll find your next opportunity. The more insular place you, the more insular of place you’re in, the harder it is for you to be able to get to the next step, right? Uh, the more extroverted that company, the better. So that’s one, and two is make your decisions on one really simple criteria.

1:11:04 Be in environments where the people are going to challenge you, are going to be 10 times smarter than you. Put yourself in the teams and the groups where you’re the dumbest guy on the team, because the likelihood, that’s what I do here. Hey, we’re fighting for that spot, because the likelihood is you know, the guys who are around you are going to go off and do great things. So if you put yourself in these places where they’re extroverted, you know, those people you’re working with are probably going to jump ship, and the likelihood is that’s where your next lead is going to come from, and that’s how you’re going to position yourself for the next 10 years.

1:11:33 And so you know, find the company that’s connected in the industry and does business in the industry, and find a place, group, division, company, etc., whatever it is, where again the people there are rock stars, and they may not be rock stars at that moment in time, but they turn into rock stars. So a good example of this, so one of my closest friends at Stanford, so first company joined was a company called Amai. It was a language translation company.

1:11:53 Completely went bust. Most of that team today, it powers Google Translate. Rock star guys, and the that company had a complete, it was a terrible trajectory. It was, you know, lots of mistakes inside the company. Started in Japan versus in the US.

1:12:05 You know, you know, founder was a little nuts and kind of quirky, you know, but and you know, lots of scars there, but the people were exceptionally talented, and they’ve all ended up in good spots, then. So that was a failure for him. Second business that he went to was, he joined a team at Yahoo, right? So hyperconnected company, but it, and Yahoo was not a great company at the time relative to Google, but it was a team that was going to try and build a competitive product to Google.

1:12:27 So what they did was they took all the rock stars at Yahoo and put them in one place, and he joined that team. So Jeff Weiner, who now runs LinkedIn, was on that team. Eard Walther is an entrepreneur in residence and now runs Cards Space. Axel Btam was on that team. Ali Varan, VP of product for AdMob, was on that team.

1:12:43 Uh, Kevin was on that team. So Kevin joined that, and Yahoo fortunately had a good run. He made some money on the Yahoo stock and enabled him to buy a house, etc., but all those people scattered after a while, and Vol ended up in great spots. Then he ended up joining IGN, which is a turnaround. It was a new site for, for video games.

1:13:00 He became the VP product there, made some money there, and then his fourth company was, he was, uh, he joined Zynga as a really early employee, and so you look at his 10 years, right? His first, his first choice wasn’t all that great, but he picked it on the basis of people, you know, number two worked out for him. Number three worked out for him. Number four really worked out for him, uh, and now you know, he can pick and choose what he wants to do, and it’s only, he’s a couple years younger than I am.

1:13:21 It’s only been about 10 or 15 years for him outside of school. Um, so that’s what I mean by taking a long view, and things work out. Don’t stress about them, right? Because again, you might not get it right the first or second time, but if you follow these two things, I think in general you’ll do pretty well. Solid advice, fantastic advice.

1:13:38 Very solid advice. Um, I think we could sit here and talk for hours, guys, you know. Um, but we’re, uh, we’re going to wrap this up. How do people get in touch with you if they want to? Uh, I, super, super easy.

1:13:48 Go to the website. Uh, there’s an email button on there. Uh, the email button is info at Hoxton Ventures. It may look like a generic email. It goes to both Rob and I.

1:13:57 We read all the emails. Uh, we’ll respond if you don’t want to do that and you want to make it personal, you can just use my first name. It’s Hussein at Hoxton Ventures. Otherwise, you can find me on Twitter, LinkedIn. You can probably find me on Facebook, although Facebook my, my Facebook stuff is pretty closed because it’s, it’s mostly for friends, but, you know, no, I’m, I’m, I’m out there.

1:14:15 It’s not that hard to find me, and not that hard to contact me. Okay, and that’s hoxtonventures.com, right? Yeah, Twitter, you’re Hussein Kanji, that’s right. And, um, awesome. I’m always surprised how accessible these VC guys are, like Simon.

1:14:29 I was like, what’s your email? And he was like, Simon DF. It’s our job, right? You know, so, you know, we don’t come up with these ideas. People out there come up with the ideas, and it’s our job to listen to them and then figure out what to do about them.

1:14:41 It’s just, I think the whole business, since we know we don’t bump into that many of you guys, cuz there’s not that many people that people kind of think you’re, you’re up on the hills, you know, you’re gods, and you’re, you will be chosen, and you will be chosen. And you know, I think that’s why it’s great to talk to you for, like, an hour and figure out what’s going on inside your head, because, you know, we’re a service economy, right? So, you know, again, maybe we have a little bit of a gate because we see so much stuff, but you, our job is to listen to the stuff that’s coming in, and then to back the stuff that’s the most interesting.

1:15:10 And often times that stuff looks pretty raw, pretty new. Um, but you know, turns out, you know, hopefully some of the things turn out to be great companies. Awesome. Um, did I miss anything, Colin? No, I think, yeah, we, if we had lots of time, we didn’t really even touch on BlackBerry or Microsoft or anything like that, but we, you know, we covered everything.

1:15:27 We got a drink to get to. Yeah, we got going to drink about right now. So yeah, we’re going to the Silicon Drinkabout. Check that out. I think it’s a @ SiliconDrinkabout or something on Twitter.

1:15:34 Um, that’s it. If you’re listening to us on iTunes and you want to see all of our beautiful looking faces, we’re on a YouTube channel right now, London Real TV, also Silicon Real TV as well no, just, just Silicon Real. Okay, cool. Uh, Twitter at Silicon Real. Um, we want your suggestions for guests, and, uh, so please hit us with that.

1:15:54 Um, what’s the best way? Tweet at us, right? Tweet’s the best way. Yeah, yeah, you’re all over that Twitter. I’m working on it.

1:15:59 Okay, awesome. And, um, yeah, that’s it until, that, we’ll keep bringing you guys things every week. I think we’re going to something on October 2nd at, uh, Level 39. It’s called Wine Meets Tech. It’s been, um, it’s been, uh, hosted by The Humble Grape.

1:16:11 If you want to get in touch with that, it’s at humble grape. It’s a good friend of ours, James Dawson, over at Level 39. He’s hosting that, so you can get great views of Canary. It’s humblegrape.co.uk. You can check it out.

1:16:21 Yeah, what’s better than wine and cheese? I guess wine and Tech. And so yeah, we’ll be there. Come check that out. Us on a Wednesday night, and, uh, there you go, guys.

1:16:29 Um, we say it’s about the people here at Silicon Real, and it truly is, so thanks for coming on. Thanks for having me. Great. All right, guys, take care. Like what you’re doing, and thought you could apply it to that part of the business.

1:16:41 In this whole process, I’m just curious, how much is the technology and the business idea, and how much is the person behind it? And that’s why we do this show, to find out the people behind the tech. And a lot of people that have been here said they invest in people ultimately. You know,