"Art of Start"
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Art of Start
-- I don't.
Hello everybody welcome to reporters roundtable our weekly podcast and single solitary tech topic today we're talking about how to start -- tech company 20102011.
First little background for the show. I started covering startups in 1998 at a magazine called -- red Herring maybe you remember maybe not.
I wrote it daily column there -- -- called -- of the day over three years.
For this daily I interviewed the leaders of over 1000 companies.
Most of these companies -- within 950 of them are now out of business.
The methods of starting companies in that dot com bubble where clearly temporary companies that last.
And today we're going to try to learn from that last bubble of the current state of the economy -- of technology and try to come up with some guidelines for starting a new technology business today.
We have two great guests first in the studio with us.
James Joaquin to CEO of the browser bookmark -- company called X marks.
Which as far as I can -- is doing pretty well.
Some are surrogate -- -- the company launched in 2007 and James took over 2008.
I asked James to be on the show though because he was also the co-founder of a dotcom bubble company called when dot com which with -- countering -- that was acquired by -- well.
In 1999 for about 200 million dollars.
Almost exactly one year after the company was founded at a red Herring pairing party that's right.
You guys won the lottery basically so we'll be talking about that and whether we think it's possible or even desirable to have that.
Current event happen again.
So thanks for joining us pleasure to be here James is also CE OO photo another company probably heard of and joining us from.
It's a Los Angeles to Santa Monica today I'm not -- -- Jason Calacanis who is the CEO of my hollow.
And the co-founder of this week in a podcast network.
For which Jason just happens to host a podcast called this we can start -- which is the gradual level version of this podcast on startups today though.
If this half hour as part of piqued your interest go to an end to this week this we can start what does this weekend dot com -- start --
To get a deeper dive into things.
Angel Jason is also an Angel investor in about fifteen companies and you learn exactly what that means in a minute as we do the show he was also previously the CEO co-founder of -- -- which launched blogs such as in gadget.
And which was also sold to bail -- these guys haven't commenting and -- the -- and then place them.
Gentlemen I was a big fan of catch of the dead -- why thank you and you're also -- your my arch nemesis than you were at.
So -- airport silicon Alley reporter yet it was SAR. Red Herring in the industry standard.
Upside -- an upside yes.
Where are foundered -- -- really you're a band of Brothers building -- new digital publishing in the band of Brothers and none of those publications exist today no because like I said that was a different -- -- price anyway gentlemen thank you so much for making it time to join us we've got a ton of things to get through and I'm gonna start with this question you're supposed I want to start at technology business today.
What is unique about this point in time technologically economically for starting -- tech business will go in studio first games.
Something that's fundamentally change that it used to be really hard to build a great.
Tech business and now I think it's really hard to find a great business that's very sad.
Meaning that. Speed winds that if you -- it -- quickly if you have the discipline to really test.
Features products ideas. When you find that winning idea. Then you're well prepared to move fast to be a first mover. I think.
That kind of agility is more valuable than the way intellectual property and building lots and lots of proprietary code used to be valuable when Jason.
In the number one difference between now and the bubble days is clearly cost.
In the early days you had to raise.
A million to ten million dollars to start an Internet company.
And then you basically gave away big chunks of that cash. You give a half million dollars to a server company you get a half million dollars -- -- -- bandwidth provider.
You -- a quarter million dollars to PR firm you -- a quarter million dollars your law firm a quarter million dollars fear headhunter and then maybe a million dollars to Oracle where there.
Ransom for your database certain rate and if he -- about three million dollars starting the company then you would start building your website -- it would take about.
Two years to get a website done or a year today you see. People joining. Incubators like white commentator and with a website already built.
And they've spent exactly zero dollars on the website hosting is free today you can build your application on Google -- and you get free hosting.
Or you can read to -- -- not mentos and NEC two or any number of service for twenty dollars -- a hundred dollars a month.
Very small amount of money all the software today open source my -- out free.
-- you're looking.
To hire people you have incredible services like Lincoln.
And Twitter and -- news.
All these resources free if you wanna start corporate blog to do PR free.
If you want to you.
Market your service you can use FaceBook and Twitter so essentially all the things that -- the cost of lot of money have gone down to essentially cost of free.
So that means the costs of a start up is essentially opportunity cost of technical people.
And business people so how do you managed just.
Ahead in in it in -- with an idea when the barriers to start are so incredibly lowly can step over them in your stocking feet.
It's a great question and the fact is you can't I get -- nothing today.
Everybody's got an idea.
I -- her.
Essentially worthless execution is everything and if you come to an Angel investor like myself with an idea I think great comeback -- have you are --
Period I'm not interested in investing anything without -- you are --
Now James you were at three companies at least three probably more of it going on a -- there was zoom.
Or so of them -- often so you've been at several companies tech companies all of whom have been by any metric successful.
Would. Verses and all of whom have competitors yes.
-- what was it what you do.
Was it was were -- free. You know 2010 companies that required. More resources that you were able to get or.
Was there a difference and how you -- I think you know every chapters different for me and I've been fortunate to.
Let's help build a company that was acquired by Apple one was acquired by AOL one was acquired by Kodak.
Zune is still going strong and it's a really big -- up and coming player in the money transfer space. Ex Marxist doing great.
It everyone those companies is different for me I mean a common theme is I try to work with people smarter than me and find the best and brightest talent that that that Jason mentioned.
I think I used to be more about that kind -- course -- engineering talent.
One of the things I've really shifted my focus on is really great conversion marketing talent I think.
Start -- in 2010.
You know really need to understand to three letter acronyms CPA -- costs to acquire company and cl the the lifetime value of that company.
And you better figure out with with with very very little capital.
How to acquire customers really cheaply and then how to generate revenue from them and keep them around for a long time.
You talk -- hear about something that is.
Pretty standard here from all artsy smart CBOs hire people smarter than yourself.
Okay that's wanting to eat so you find somebody that you think has the skill that you need conversion marketing as you say.
How do you get those people when there -- so many things that you'll find starting company right now according to both you guys already know -- -- I have no money to pay and how do -- attract these brilliant people who are just how they're floating around somewhere you like and find them.
Come work for me on what I think of the great idea but I need them to build it.
How do you do that.
I think -- -- a lot of tools that Jason mentioned Linkedin Twitter -- you try to cast a wide net and find people that resonate with whatever product passion whatever category.
You're trying to disrupt your -- innovate in.
You wanna find people that wanna live in -- that same mission Jason.
Certainly they're passionate about the -- that helps. People do need to pay their rent in general and make a living so here.
If -- -- in school you wanna work on as a side project you can offer people no money in equity.
But that's not sustainable is a lot of jokes there's going around asking people to work on projects.
Without money and -- enough people with money offering. Can't cash compensation plus equity that you're really not gonna compete and I should offer cash comp equity.
And it really depends on where you are and what your reputations. If you are.
Well known in your I don't know marked increase in -- Kevin Rose and he's at starting a new company I can pay you 50000 dollars half of what -- -- -- --
But I'll give you 5% equity it was my jump at the chance.
If you're nobody and you have no track record for he had -- track record of a -- company made -- they know I I need to get a 100% of my cash -- and then I don't even look at the equity.
You know in that way.
I've always look for people my strategy has always been to look for under appreciated people or not not not primarily -- compensating driven.
But. Driven by.
And winning and so the people tend to be younger.
Either younger or what has been described -- the last -- -- post economic meaning they don't need your money anyway -- and for the challenge.
Which -- a whole swath of people in the middle of their lives and out of the picture doesn't.
Yeah I would not wanna be -- -- -- -- -- and a mortgage and car and I am.
You know there's a risk profile that people fall in different places that this risk curve and some people.
Are there are no matter what it's there external desired interview and an early stage start -- they may not be acceptable -- they may not be able to handle the risk they should -- -- an Intel.
-- Cisco or someplace like that.
You wanna find people that are risk prone that are willing to take those -- that you need to take it started.
One of the things into -- talking up before this thing called the lean startup movement seems to be really resonating the whole concept seems to resonate with the -- the technology of today.
How do you what is what is that in a nutshell and how's that relevant to. To new businesses today.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
I and -- dot com.
And a co-founder of India's guy -- Eric Reese who's now become very much associated with the -- startup movement.
You can check out his site at start up lessons learned dot com to learn more.
But the basic idea -- said before is that speed winds that.
You really wanna focus on being disciplined about how you spend -- capital and discipline about how you.
Build products and test them with with customers and don't be afraid to fail don't be afraid to kill products don't be afraid to hit that.
-- city can be really really Agile and and move fast and the roots come out of both Agile programming world which was more of a software development methodology and also.
-- blanks customer development process. Steve blank is an entrepreneur and an author and business school professor.
There's a great book I can mention later quicktime that he wrote that goes into great detail -- that process adjacent have you.
Heard of this thing called the minimum viable product and is that that resonate with that the -- or the start figuring investing right now I I've never heard that term effort -- start --
With something we've talked about here -- when we're working on new projects that at CNET is this idea of the minimum viable product.
Because it anybody has an idea for start up or for new and new technology used and that you have this -- of an idea.
And then it grows -- and -- this way go that way any penalties features and they do this and they should be able to do that.
And you built this grand vision which can never be delivered and the whole idea is to Whittle that down into what the users will attach to and love.
How to get but the essence of your start -- well put what will put that that the real you boil off everything what is that the molecule that has left.
How do you.
Find people who have the discipline to focus on on that and is that necessary or or should you when there's so much competition.
Build these kind of do everything starts.
The truth is both models.
Can work when you get it depends on resources and we you are so -- different -- of my career I have no resources another point that had.
Infinite resources to be honest and so.
The infinite -- time you try a lot of things that my hollow I've been able to try three or four actually different pieces of the puzzle at the same time trying to build.
The largest contents and the world which is our goal and you at other times I've had no resources like -- think we had to kill what we you know what you what we kill.
And you know both closings can work one of -- works you have a tremendous amount of focus and there's no choice but to focus on -- -- and make it revenue.
You know make revenue from that other people like Twitter.
Or FaceBook you know they they -- run either have incredible performance or great leadership or --
They can raise gargantuan amounts of money and they can pursue multiple banks and if they waste a million dollars or to million dollars on a project -- to shut it down and you know what.
Capital is so available today that although it seems capital inefficient the opportunity is so great.
If FaceBook -- to try.
Fifty things this year that cost two million dollars each and all of them felt it would have no impact on -- business ultimately consuming it holds true for --
And Microsoft so that kind of well what would you would consider waste.
Is actually are Indian way so both can work again you have to know we're out -- an entrepreneur our first from -- we have no choice.
But to work on one thing and to make it work and to make it gets some traction in performance -- attract --
Well let's talk about investments here and talk about money we've discussed a bit here how it's possible to start a company with very little -- but -- -- young co founders.
But there is a lot of money out there there's the whole venture capital infrastructure there are.
Pension funds a lot of rich people's money so they put into venture -- just looking for things to invest and and then there's this new class of investor what's what's now called the Angel investor chart lower funding rounds.
Generally less involvement but.
Guys like you basically rent who have looked a little bit of money to put into very young startups if -- if somebody has -- tech idea.
Should they go to -- venture -- should they go to an Angel investors should they try to do it on their own I mean people do have to eat no matter how old rom and hungry they may -- intolerant they may be.
There are smart young people -- -- who have families and mortgages what do they do they need to support themselves why -- while to get this idea off the ground.
Great question now -- and I think.
There's a couple great things about what's happening -- it with angels and especially in in tech investing.
I think the first this if you get a good Angel to invest in your company you're basically getting an adviser.
With real operating experience to give you money.
And that's kind of reverse world right usually you'd have to give advisers you know stock or -- cashed in and help you.
Angel investors they'll roll up their sleeves and help you and they'll give you money that's best of both -- spot W right.
But what angels don't have as they don't have a lot of dry powder.
Have more money in reserve if your company needs it later.
And that's what I think it's really good about institutional capital you know venture capital firms have limited partner investors.
If capital reserves so.
If your if your start -- no matter how great it's doing it needs more capital to grow.
Those those institutional investors are gonna be more likely to help you than an Angel investors on the line -- I think it's great to have a mix of both.
Now you've both worked with -- after firms as well these are these are companies are sitting -- hundred million dollars in many cases the what do they look for in technology today.
Versus say you know in the last bubble -- ten years ago.
-- -- -- --
-- looking at. Two primary -- and you know depending on you talk it'll say one is more important and -- a -- it is both are important. And they're looking for.
A market that is growing. And that is untapped hopefully. Or -- and some sort of transition -- fragmentation struck a big market.
Big market opportunity and then second they're looking for individuals. And management teams that can. Attack that market.
Over some long period of time.
So many times an entrepreneur -- will receive funding.
Strictly because of who they are you know somebody like mark Pincus.
Or Evan Williams are jackal was -- -- routers where they can just walk into a -- and say.
I have a new idea it's gonna be in the social gaming space and then they used in a -- -- might go.
So in that case that now you just demoralizing everybody out there who isn't decorative.
No they should be actually thrilled because what it means is that -- they could be that if that track record.
And that that that is the the the the reward of having a successful venture.
-- not that kind of person yet to come in with proof.
And so you need to have a more detailed plan you're gonna need to have evidence things to win them over and say.
The president make it a first time but there they've identified a market that other people may not be aware of -- that's untapped and look at their execution.
-- -- like Zuckerberg comes in -- and nobody.
And they say wow this nobody has you know thousands of people signing up today and there are blogging in every day and the curve is going like this.
And this is 1% of the population in the other the rest of that the -- people on the -- on the Internet you know it is only 1% of the way there.
-- huge upside left in this business so it's -- performance with a person.
Okay one -- to atom -- it's I personally.
Like to see early stage investors that have operating experience because there's so much uncertainty in the early days the text -- operating experience mean they've run the company in the past suspect or or had -- senior position -- especially in the start right so.
To pick one example there's a firm -- ventures and they do really early stage investing may be.
Are not afraid to take risks and all the partners have been founders and the reason I single them out as they'd be unique model where.
They have guys like O'Malley who runs -- home. Tony's Conrad who -- -- -- -- -- has and you start up.
They're venture partners in the firm they make deals that -- sport seats but they're also -- time CEOs see -- guys that are right on the front lines we view here in March and mountain.
When it's interesting not -- like.
When you do start a company. For people who are new to this the thing that.
All founders have their eye on whether or not they will admit it to the to the press is the exit and getting out.
And the exit used to be the IPO your company would go public you'd make --
The company and in filing through it and selling it shares would make -- tens of millions hundreds of millions of dollars and -- get.
Five and 50% of that.
Now the IPO window is closed more or less you don't see many tech companies going public especially copies that are started -- --
But people still want.
To change the world and get rewarded for what are the exit is that acquisitions from Google Microsoft -- all -- -- are or are there other types of exits.
How -- you take this great idea that you have.
And make into a company that will reward you insanely --
-- as well I'll jump in I think you're number of.
Exit options is in adversely proportional to the amount of venture capital take.
The more money you raise. The fewer -- you have because union bigger and bigger exit.
To make you -- -- investors happy in your ownership goes down accidents that are.
Jason -- a great point earlier that it's really inexpensive. To build tech -- now.
-- versus ten years ago so.
If you can build say a mobile application and you just to two people. You have zero costs. The app takes off and you start generating.
25000 dollars a month in revenue through app stores.
-- you might be able to actually you don't pay your rent pay your mortgage.
And you might have -- a small exit that's very meaningful as you might get rolled up into a bigger mobile company it's gonna buy ten little guys can.
But if you raise five million bucks you probably don't have that option.
We need more.
Yeah you basically get to pick where you wanna send the goal post and if you.
Yeah -- -- hollow my current company.
I'd raised you know twenty million dollars or so and that means. You got pushed out the exit you know has to be -- critical to be happy.
And but with this weekend.
We raise 300000 dollars Angel investment.
And so a 25 million dollar exit would be.
Amazing in -- and it was true weblogs -- thirty million dollar exit was amazing because -- only -- were raised a couple 100000 dollar one Angel investor.
So there's there's there's two games going on concurrently in the -- --
And then there's you know the sort of homes home run Grand Slam kind of club and both work and so do you typically in this industry get people saying like it's it's one or the other it's not expo.
Both to work both are effective strategies you just have to know which -- -- actually play just like in poker you can play tight.
Where you can play aggressive.
Both strategies can -- winning strategies both strategist new winning strategies in the same company you could start small and then go -- you can start big.
And while it can't right I don't wanna wait did you gotta get it quite active. If you if you -- but yeah you just have to know.
Who you are as a person and what.
You've set yourself up for.
A lot of people don't -- -- let's.
That's really good advice know what you're confirming if I if I start account -- personally I would start a business today I would be happy with the lifestyle exit you know.
Put -- -- with debt pay the mortgage but my -- to college that's all I'm asking when -- Jason.
They want -- on --
And -- and more power India and we need we have all -- yeah wouldn't it.
Let's talk -- open -- -- -- talking a lot about minus talk about technology and opportunity here you mentioned James mobile what other hope we at both of you gentlemen our investors.
Where do you think four four tech entrepreneurs the the open spaces -- the real opportunities that are -- are slightly untapped dark.
Jason you're -- first.
-- -- the market opportunities I would now like to speak about that in.
And that's how come I don't all right let's yeah I thought it damn I was hoping it shows starts firth yeah exactly I -- -- by the way I'm holding 27 and now I'm just here.
Hold on and second seriously guys you both have money to put into startups and investors.
If I were to locking your doors what is the magic -- it takes for you to take the meeting.
More quickly than say another what are you looking for what.
What gets you excited I'll give you tangible example okay and I can I can now promote a company that I invested in the same time.
So I mentioned those those three letter acronyms right CPAC LV when I'm -- in on fundamentally invest in consumer. Companies -- that's my that's my wheel house that's my domain expertise.
I look for teams entrepreneurs ideas that have.
A solid understanding of how they're gonna acquire customers really really cheaply that might be through some viral social mechanism but it might not it might be some other.
Trick up their sleeve.
And how they're gonna generate interest in revenue from those customers so there's a company New York City that I'm an Angel investor and -- twenty by 200.
And they make are affordable they sell limited edition -- as cheap as twenty bucks for an eight by ten print them.
So when I saw a how disruptive that is it's an e-commerce category that's new.
It's one that Amazon's probably not gonna move into any time soon.
And how effective they were at acquiring -- customer base that was growing very rapidly add little to no marketing cost.
That was it perfect example that fit my model where. That's a really disruptive company with a lot hadn't done.
-- -- -- -- --
I'm consumer Internet is also my -- house it's where I can provide the most value -- I have two basic investment strategies one.
-- -- investing people I know.
Quite worked with perhaps. So.
Phil Kaplan who did asked company. And add bright watched Libby.
And so when you tell me what it was that it immediately consumer Internet and I know you please let me invest. GD GT.
Pronounced gadget without the vowels which was done by -- -- -- -- Brian block Peter --
I told them before they even told look -- whatever you next. Time.
You know where to send a check and how much -- you put on it.
And and then -- any other case is.
I might find a product on the Internet that I really like.
And that I seek out the person who made it so. An example of that would be back up a -- I was looking for -- way to back up my.
Cloud based services like Flickr or FaceBook or.
And back up a -- Had a product that did that I contacted this CEO. And he was living outside the major markets I talk -- about my interest.
I invited him to something called open Angel forum which is -- -- beta form dot com which is an Angel group that I founded this year.
And operates in -- cities I've brought -- to that and a bunch of people at the opening department vested in them.
And so I source that deal based upon a neat I had and looking on the market for something so execution is everything.
If you have an idea I don't care -- get a business plan I don't care if you work somewhere before I don't care.
If you have -- you are row that has a great product that's designed well with a great domain name.
In a great market.
And then -- interest execution is.
It's everything I'm not interest and people can -- themselves if you're an idea guy you're worthless.
If you're a business guy you were close if you can code if you can build if you can.
You know -- product management if you can -- user interface and make wire frames actors sales like I want -- doers.
Actual builders I get too many people -- -- business plan that is the lead are an open them.
Who hope there's. I do it but -- command doesn't it's it's it's entrepreneur masturbation.
Well speaking of this figure that sort of how highly I do wanna talk about business plans and business models here for a minute because one of the things that I saw.
Will back when I was covering starts every day started today.
With a lot of people who were in heavy development of their product beta testing their product revising their product over and over again that show me one thing -- come back -- later -- -- change the product.
And yet how are you gonna make money if that were not working on that yet.
We're gonna work on it later.
So they were beta testing the technology but they weren't even an alpha on their business model because there's no one way to make money -- on the Internet there are many ways and some of them have many of them -- discovered it.
What do you guys think about that about working on -- and tweaking the -- in the -- and attack and then delaying. The money side of the equation.
For very long time Twitter did this and it might work for them but -- work for other people.
It depends on the kind of business you're trying to built if you're trying to build.
A large scale consumer service that's gonna that's gonna basically grow exponentially.
A Twitter. A location service something that's you know and take advantage the social graph and it's either gonna grow -- a hundred million users or it's not.
I think it's probably reasonable to say we're not gonna worry about revenue which is gonna focus on growth -- are metric for success.
But you might be trying to do is start up that is a very different kind of start up and eat it requires you to think about.
Not just users but customers who's gonna actually pay you money and why.
He used -- a -- comes down to knowing warrior that you know that you yes you can build and to far.
Making money for a couple of years if you're a certain type -- entrepreneur -- -- certain amount of runway -- we're dry powder also known as money.
In the case of my hollow I -- the investors it's -- seven year mission we're not gonna try to make money for two years.
In this very year will start thinking about modernization which is exactly what we did we just finished her third year.
And we're making you know nice nice revenue. And I didn't even tried at first years what's the point I have you know I've I've raised 67 years what the capital.
I have to get to critical mass that's what I need to do what they broke ten million weeks a month.
And -- eleven million EXPF fifteen million now we've got something so the reason this strategy exists is what before that season people.
Who have earned the privilege. Of --
You know working on the art of the and they and they consumer engagement and pushing out the revenue it's not again people like to make it out have to start -- revenue -- one.
Or you have to not worry about revenue you can do -- weblogs and I'll -- business.
We would start applaud when we found somebody to sponsor for the first six months --
This week is start -- we will build if we could find a great sponsor we will build a show to -- and so somebody comes and says.
Yeah I I mean. IPad cases I want an iPad show -- we'll start to speak iPad.
A pleasure willing to pay for the first six months of us doing it gives you get people models can work you have to know where you are -- -- -- -- your resources are.
What got you still that's a tangible example -- when we started -- photo.
We thought about revenue from day one -- twelve billion dollar consumer photo market from from films and we're gonna disrupt that digital cameras.
Our -- you take over people that we're crazy at the time.
But we -- a revenue model we had a price per print on the very first day that we launched the service.
But we also launched with. -- we -- -- -- member incentive basically sign up and --
100 free prints so we used free as a very very appealing way to get people to try this new thing why should why should they try -- -- startup that never heard of that don't trust it.
But it wasn't free forever it was it it was a free try before you buy -- ultimately led to monetization that businesses.
On its way to being a half a billion dollar size revenue business and we're gonna run out of time quickly -- -- reader questions here before we do that. What have been the most.
Educational failures that you -- have been involved in either personally or other companies in the failures from which you have learned a lot and hopefully.
Succeeded on the back.
And I have it's an I have -- -- -- -- that.
One during my a you -- five years running a photo you know.
We we went through a phase that was very much the whole Internet industry in -- used to call get big fast.
And we scaled up in terms of number of people and expenses. Way ahead of where we were on revenue.
And when they Internet bubble burst that was a painful process to that and shrink that back down.
And that ice I carry that with me as a reminder and I tell entrepreneurs.
In the early days you don't control revenue yet the only single thing you have total control over is your expenses -- burn --
So this idea being more lean more Agile -- not adding people unless you absolutely really need that person.
I think is a critical lesson for me.
The second one is my time. CEO zoom the money transfer company we spent a lot of time and money launching a real notable ATM card.
And -- it it was a real technical -- building our own ATM switch -- -- -- setter and after making that investment I learned that we you know we hadn't done enough.
Market acceptance testing before the before actually building I wish I'd built just a dummy landing page and -- and -- to say.
Do you want this -- notable ATM cards and money so you had a product that nobody want.
Turns out -- and we quickly killed it to our credit and -- it was a lesson number one don't be afraid to kill product but more importantly.
Test the idea validate the idea before you invest in building it --
I'd say the biggest lesson I learned when the market went bad in the web one point oh days. I did like three rounds of layoffs that silicon Alley reporter.
And I could just done -- at once incentive.
Trying to get bad business to -- you know back to its heyday red Herring industry standard outside all crashed as well and -- out of selling to Dow Jones.
-- -- slightly better than those other publications which.
-- decision went out of business -- offered cases because they had too much overhead.
And big commitments to. Actually contracts that conference is a -- so they can break.
So. And moving quickly when things don't go well and then not moving fast and -- do though well.
And and so it is there's decisive action needs to be taken at start -- whether things are going well or whether these are going portly.
So weblogs think these are going really well I could've gone faster I could hired more salespeople and I could have watched more blogs I -- gone faster.
Add soda -- -- when they -- that I could have cut quicker and -- I actually took those things.
And and actually learn them there -- things that were working on a -- that.
I cut very quickly. Carried a human part search what part wasn't working very well.
Was maybe 20% better that was in the market but the answers product and content product we do each stream we -- -- getting millions of users so we double down -- down on those very quickly very quickly.
So I basically. Now on I'm kind of ruthless and that way that I just if something's not working -- I don't have -- go about stopping at and -- -- is working.
I am absolutely gratuitous and doubling down and doubling down in doubling down so.
I think the people who gamble.
I know -- to get up from the table of people who are the best gamblers.
We have two quick questions from mr. buyer here listeners that one the first one is -- -- patents.
He says he sees close to a hundred patents for ideas similar to his is -- worth spending the money to hire patent attorney to investigate this.
Ort worth taking the chance of my ideas are really different enough or -- on a patent holders will care and save the dollars and have to pay for an attorney.
When we think about patents on the startups we worry about them.
That the pendulum gonna start up your -- you know -- Biotech or. You know I chip company maybe.
These can be used to be essential in the in the consumer Internet space.
Ideas are very hard to protect. What is easier to protect is a brand.
And a user base. And other ways to -- people -- software patents.
I didn't believe in them a lot of people don't and actually when you filed patent base and explain to the world had a Boris engineer stuff.
A philosophy and don't explain how you get something and maybe filing a patent when -- -- -- or something is find that. In general.
People get focused on patents and hiding their ideas.
Are sort of the small thinkers who never execute and they do that instead of executing and so people like I I want -- -- -- -- companies can't tell you what it is.
I'm like well that doesn't work it -- --
Nobody knows who you are you have is incredible idea.
You haven't executed on it -- in -- care in Alec.
And this is the over valuing of ideas is just extraordinary if you look at the -- like FaceBook data -- one original idea everything has been.
And evolution of Friendster or I -- I -- beating up on them but admitted the truth and it basically I can take it.
What I -- and look how successful they are stealing ideas -- mean.
They just -- one Brevard yup Q and at which we stole from Yahoo! answers which they stole from the Japanese market and that which the Japanese sultan Korean market neighbor.
And -- and some other things --
You know ideas why overvalued patents. Way overvalued business plans way overvalued undervalued execution.
-- -- I think Byron.
Don't spend your time and that's anytime focused on it -- it Jason's and I think there it's a few companies that are the R&D labs of their industry Apple comes tomorrow -- -- Apple patents are really important because.
You're like a sharp -- has to keep -- to innovate or die if your small market share.
And there's a whole line of OEMs and -- -- gonna copy everything you do.
But for for software for it for consumer Internet just just go build it.
No one's gonna care if you're violating their patent and what's your wildly successful for the new high class problem that is correct I think we're gonna leave it that actually.
James looking from X marks -- -- dot com.
Right correct Xbox dot com and calacanis you get one pimp what you want to be today.
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Again and I'll throw in this we can start -- which is comin' up actually collections like in fifteen minutes on this weekend.
Thank you gentlemen both for your time and I hope people out there found it useful interest thing next time we've got three reporters that Defcon and black cat.
Echlin McCullough -- or mills and Seth Rosenblatt they will be here talking about what they learned at the security and hacking shows.
That's this that's next week on Friday noon here.
-- report roundtable.
If you have questions you can send them to roundtable at cnet.com or you can see.
Everything about the show at what -- -- CNET reporters' roundtable it's in a -- the other.
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Cnet.com slash -- at cnet.com slash roundtable get all the show notes and all the links right there and we'll see you next time thanks everyone for.
Behind the scenes of Science Fair with co-director Cristina Costantini