By this, I mean that people don't start a project until some seemingly related (and usually out of the person's control) event happens.
For example, I have a friend who's trying to figure marketing strategies out for his real estate career, but he's considering moving to a different state. So he's been holding off on doing any marketing until he moves.
What I told him was, "why wait?" Even if he moves, the strategies & knowledge he gains from starting now will serve him well in his new market. And waiting will cost him at least a month in time. A month is a LONG time when you're running your own business.
I'm convinced that a large part of the justification people give themselves to wait is based in fear (see my related post). The reality is that we are creatures of habit, and it usually takes an external "jolt" to get us to change those habits. But since those jolts are external by definition, we have no control over when (or even if) they happen, so we become enslaved to these external factors which in reality have nothing to do with the decisions we need to make. So BREAK OUT of the "waiting for something to happen" mentality and just force yourself to start that project, or make that decision today.
To use a golf analogy, my goal is always to be moving the ball forward on the green every day, even if just by a few inches or feet. So make it a priority to move your ball down the green for any project, even if just by a bit, every single day.
Here's another excellent Deloitte TVC "Legends" session, put together by Ellen Mundell, with Doug Humphrey, the founder of Digex, Cidera and Colocation. Doug tells it like it is, with a refreshing perspective on his experiences taking Digex public in the late 90's.
Here is a transcription of the event:
Legends Series: Doug Humphrey, founder of Digex, Cidera & Colocation
Here's another excellent Deloitte TVC "Legends" session, put together by Ellen Mundell, with Doug Humphrey, the founder of Digex, Cidera and Colocation. Doug tells it like it is, with a refreshing perspective on his experiences taking Digex public in the late 90's. Here is a transcription of the event: Legends Series: Doug Humphrey, founder of Digex, Cidera & Colocation Dated: September 22, 2009 [...] (3:22) For those of you who don't know me, I'm Chuck Carr. I'm a partner at Deloitte; I lead our, what we call our, early stage drug practice in the greater Washington area. On behalf of Deloitte and all our Tech Metrocenter sponsors, we want to welcome you all here this morning. This kicks off our fall season of the Technology Venture Center. We're very fortunate to the kickoff the Legend with Doug Humphrey. Basically what we do for these types of events is it's very open-ended; it's a lot of Q and A; Doug will speak a little bit about the companies he's been involved with back in the late 90s, and those of you who were in the area, I'm sure know Doug. He was quite visible during that timeframe. He went into hiding a little bit here. I retired, but I'm done with that now. He's back. And, sort of kicking off being back, I guess, we are so fortunate to have Dough here, and...I'll turn it over to Doug now. Ok. I see ex-business partners here! ... you know who that is. Well, thank you very much. I will refer to notes occasionally so I don't get too far off track...Everyone turn off your phones, etc. and I will try to remember to tell you to turn them back on when this is all over because that's the problem with turning your phones off; you'll be wandering around saying "god, everything must be going great. No one's calling me." And then you're like, "oohhh, nooo!" and you turn on your phone and you can't believe. I turned on my phone one day, and somebody said, "how's it going?" and I said "we'll find out!" And I turned it on...and it went BLEEP every time a text message came in, and it sits there and starts dancing around on the table. BLEEP BLEEP BLEEP BLEEP BLEEP. And, I was like "Oh no." Anything more than, like, eight bleeps and the day's done. So, thanks to Deloitte, which is, congratulations on being a survivor. I had to check yesterday, on a conference call, what is it, a big what now, and they were like: four. I said, "ok, good." When I retired I think it was between like five or six wasn't sure; I remember the phrase "Big Eight" when it wasn't a college. [laughs] You guys remember that? Anyone here old enough to remember that? Yeah, thank you. You make me feel better. And, then Cooley Godward [Kronish LLP], who is my favorite law firm. I think my law firm...I'm nominating Carl Grant [Sr. VP of Business Development] as the majority whip [laughs] because, I mean, none of you guys would be here if it wasn't for the fact that:" ah, I can't, I've got to get up early or else I'll piss Carl off." So, Mr. Grant knows how to whip 'em and drive 'em, so we're very happy for him. And, I did see Corbus down there and my old friend Esther Smith...So, I was told past/present/future or something like that. Every story has an arc. So, I'm going to keep it very simple. My story arc. Dry erase marker; important. I will say this. Immediately, I'm off to a long story. Past. Present. Future. I gotta start thinking. I'm thinking story arc, like on a TV show or something like that, a story arc has a start and an end at a stable point. But, nope. As we know in our industry, I'm a start-up guy, a serial entrepreneur, God help me!, that's what I am. And in my world,I have to get back to this mindset,in my world, everything goes up, so whether that's totally true or not, we'll see. Let's see, very early (I have note that says 'very early'), in junior high school I started a company, which was doing model rocket transmitter, tracking transmitters out of G. Harry Stine's The Handbook of Model Rocketry, which was copyrighted in 1950-something. And, I had my first, it was very educational, because there was a schematic...and I thought: I can do this. I made them, and they didn't work. The schematic was wrong. So I was like "screwed by the engineering department again!" Well, not again, but for the first time, but not the last time! And, so I had to actually then learn what the damn circuit did. And, then, you know, so it was no problem, I figured it out...the value of this was...it was going to work better. And then I sold like three of them. I ran it one on EBay, I don't know, about five years ago,...transmitter or something like that, PI....Corporate, which wasn't even a corporate. They just put it on there because it sounded right. And it was this thing, I went "oh I have to buy this" and so I bought back my own transmitter. [laughs] I did, for more than I probably made on all the transmitters that I owned. But it was in junior high school, so it's ok. So, I have that safely ensconced away so that after I die, my kids will go: "what's this piece of crap?" and throw it away. [laughs] I was at a yard sale,this is so sad,some old guy all his hand...tubes and stuff, and I mean they were going to trash them. Literally, it was this huge box that was going to go in the dumpster. So I walked up and said "what, I'll give you $20 for it," and I send them as Christmas presents to all my friends. Lasers and high energy physics... I send them as Christmas presents to all my friends, and I remember senior year I had old physicists crying...[laughs] There's no profit there. So, let's see: past, present, and future. The past, eh, starting companies wasn't my first startup; my grandmother gave me hell when I was a little kid--I was living in Georgia, so I must have been a really little kid,maybe 1st grade, they bought me this big package of assorted cracker packets. You know, it's like 12 different kinds of crackers. And, so I immediately opened up a little stand on the porch and started selling them. I got yelled at for that. That was probably my first entrepreneurial experience. In '92,'90-'91 I was at a company called Candum Computers, a big, full power matrix systems, and we had a nice clientel: NY Stock Exchange, all sorts of people at NASDAC, and it gave me an appreciation for something that has served me forever, which is no single point of failure, fault..., critical engineering, and everything I ever do in the end comes down to that because there are only 193 people on the entire planet that have that clue; that clue is preserved, conserved, there are no more being made. When one does, a new one isn't like it. It's like Buffy the Vampire Slayer or something. And what you get is, most people think they understand, but most people have no freaking idea. And so there are only a certain number of people who seem to 'grock,' and you do, actually. So, after...is one of my partners here and a million square foot collocation facilities. It's kind of a weird thing, but it's served me well. In '92, I started an Internet Service Provider called Digex. It was way early, so we were driving around putting flyers under windshield wipers saying there's this thing called an Intranet and you need to be on it. It was way pre the World Wide Web or any of that. And, it was started really because I saw my kind of peer group was people who graduated from college. In college 75% of--they were on the Arbornet slash early, early Internet. And 75% of their social lives was over the net; I mean, email and you know...email was the killer app. Email today, right now, it's still the killer app. Everybody goes: "Oh, what's the next killer app?" It's like, it's email! You know, I mean, the second killer app kind of changes and moves around. It's not Twitter, it's email. People Twitter about things that don't matter. You know, people still email about things that do matter. But, um, I notice that all my friends would get out of school and go "aaaah" because they couldn't get Internet access. It's just the end of the world for them. So, we were like "huh." So I got an old Sun...360, 18...base machine; a couple friends of mine, like Bob Stratten, a guy name Rob Seastrom, help me config it up. It was running on Fujitsu Eagles; I don't know if anyone remembers 470 meg, 470 pound, 470 amp, 470 kilowatt heat Fujitsu Eagles sitting on a carpet in my townhouse. When we sold that townhouse, there were two Fujitsu Eagle shaped indentions in the carpet [laughs], and where the heat, since it's sort of, you know, a poly-whatever carpet,if it were wool I'm sure we would have been ok, but then the place would have smelled like lanolin [laughs],but truly, it had the combination of...and the heat had change the...of the carpet, and no amount of physical work was going to get this done. One day I walked somebody through, and they were looking at it and said "what the hell's that?" and I said "Take a guess. I used to have a ... " he said "Fuji Eagles!" and I said "oh my god, you're one of us!" [laughs] Shoot yourself now. But anyway, so, I walked into a party and said, "who needs an email account?" we were CUUP-feed. We weren't even on the Internet, it was still T-1 lines. So that was the bottom line. That was early '92, '93, in '94, I think, I was out raising venture capital and a thing to note, raising VC in '94 was like crawling over broken glass, this was tough. I mean, no one has an official number: 40, 45 presentations. We started that and found a boutique firm, Armada Partners, which was Bob Stewart and George Rich. They put a little bit of seed money in. My law firm at the time was Reed Smith Shaw McClay, which is a great law firm, don't get me wrong, but not a venture firm. And that's my talk that I give at Mike Lincoln's UVA Law School thing all the time: get yourself a venture firm, a firm that knows venture if you want to do ventures, because if you get a litigating firm to do your venture deal, [inhale] it gets a little litigious, and then you don't want to be there. But, they were very sharp people and very good. So, literally, we went to Boston, so I could blow up all the VC in Boston and make...because every time I did our pitch we'd get destroyed, absolutely shredded. There are some other phrases I'd use, but I'll be polite here. And, if you've ever read Mike Lewis's A Liar's Poker, you'll know some of the phrases in there that I really do like. He doesn't like the French for example. I'd go to a meeting and get destroyed, but the cool thing was my two guys from Armada, and this is the important thing, when you go get yourself a boutique consulting firm, whatever, to help you with this, and you're doing your pitch, if they're in the room watching you give the pitch, fire them immediately; bullet to the back of the head. Gone. No discussion. That's not their job. But if they're sitting at the table, one on each side, watching the people you're pitching to and making notes, they should know your pitch by now for God's sake, they can give your pitch in their sleep, in your sleep to [laughs]. I mean, believe me, if you get this close with people, it's sort of a wife-husband relationship, but much closer, you know what I mean? [laughs] None of the benefits from any distance at all. But truthfully, they need to be watching from the other side of the table and taking notes because when you say something, they need to know who liked it, did it work, did it not. Read the body language. Read it. See how it goes. And you need to be tuning this with your pitch. It's back to the hotel to rewrite the pitch. We do a pitch, and ok, back to the hotel, rewrite the pitch: boom, boom, boom. 'Harry McCants' old...guy at Blalock in Boston. The word "autopsy" is almost correct here...to me. I mean, my spirit was in the corner of the room, watching myself get torn into little pieces and admiring the skill with which I was getting torn into little pieces. And at the very end, as we were leaving, he walked up to me, shook my hand, and said, "Listen, nothing personal on that; just thought you needed some...." I said, "I cannot thank you enough." And, when I got funding from...and Grotech and Massey Burch, when I closed my round, I sent him a bottle of champagne, and I said, "Of all of the pain I suffered, yours was the best." [laughs] I know he understood; I know he got that. I completely know he got that. So, we went up to Boston pitched all over the place. Got blown up, crashed and burned. Boom boom boom. And, they came back to where we wanted to score because the truth is a VC wanted to do a local deal. You really don't want to be far, far away. They want to be able to come stand on your desk or you to come stand on their desk with their questions, whatever. Distant VCs tend to follow, which a lead VC tends to want to become a local. I think that hasn't changed. This is a good point here. I've been Rip Van Winkle at it for six, seven, eight years,I don't even know, I'm afraid to really figure it out,so there's this hole in here, and what I am doing is trying to fill that hole. And trying to truly get my situational awareness up; that's why I'm meeting with everyone I know. You'll say, "what are you going to do?" I'll say "I have no idea." I mean, right now, you know, from there to there, what field are you going to be in, I don't know. What kind of position are you looking for? I don't know, you know. I mean, even I don't know, I don't know. So, by the end of the year, maybe I'll have some of this filled in. I don't know. But I can say that the VC world has changed a lot. Now I remember it, though, before it was easy money, before the go-go days. So I do recognize a lot of it, I'm not just wandering in saying "holy shit, where're the VCs? Oh my god!" I'm sort of like going "hmmmm, in 1994...a little bit, but worse." So, that's where we are. So, we IPO-ed in 1997. That worked out pretty well, and in fact, we offered to sell the company to Verizon, back when they were Bell Atlantic for $50million, way back when, and they were like, "what are you talking about? Internet? Huh? What? What's that?" I mean, it was really hilarious. They had no clue. And, if you go to digex.net now, it will push you over to a Verizon website because Digex went public, they went private with a company called...who got bought by MCI, no got bought by WorldCom,remember Bernie? He's still in prison, isn't he?. [laughs]...and, they bought by MCI, then MCI got bought by Verizon. Or close, I don't even keep track of them all. 1998, a company called SkyCache, and this is an interesting thing: the lesson with SkyCache is when you take venture capital money,I get this a lot, people say do you want it,when you take VC money, you're getting on a train that's on a set of rails. That's going to happen. You are limited your options, choice, etc; you are also opening up a gigantic world. I'll tell you my Reed Smith story. I go to sign on the deal for Digex, the first $6million, right? $2million from Grotech, $2million from 'Benrock,' $2million from Massey Burch. By the way, that sounds like a strangely pity deal, but that was a standard deal back in '94. that was a fuckin' lot of money, pardon me. Especially when I already had like $3million of it spent already. My God that was a lot of money. No seriously, back then, a $15million fund was a good sized fund; $100million fund was a big fund. Ok, and besides, the first two they're putting in is a commitment; there's another 2, 3, even 4 million...There's another...behind that too. On their books, they're budgeting that out. So, truly when you're getting a $6million deal, they're $18million in the universe somewhere that's kind of getting earmarked over into your direction. So, that's big. And, we go to the final bing, and my lawyer says to me, who's a litigator, says "you can't sign this deal." It's a horror show; I mean, I'm locked up personally forever, oh it's just terrible, non compete...It's fine, though. You can't sign this because you're getting screwed. So, we went into a little room and she repeated it, and I said "you're not getting this. I'm here to be screwed. I want to be screwed. That's why I'm here. I'm getting screwed." And what do you think is happening to the guys who are putting $6million down on the other end of the conference table? You think any of that is ever going to be seen, ever again? Gone, baby, gone! Half of it's already gone. [laughs] I mean, I just scheduled to get married a month after our close. And at the close, just before the close, they were negotiating: how much of a salary do you want? I mean, we had nothing. And, I said, "I don't know, $120?, whatever, I don't know." And, they said, "yeah, ok, that's reasonable." And I said, "ah, request from my wife: I have a little problem. I've got a wedding to pay for. My own in about a month. We've got like $5 in savings." And to their, to Frank's credit, they got up and said "why don't we just make your pay retroactive to Jan 1." I said: "thank you." So, there's a certain magic to the big-money world, you know. I went home and said, "honey, the wedding's paid for, and I'm employed." And she said, "ehhh." [laughs] 'Cause out of college, she had made a thing that said: "I'm not too picky, but in order to date somebody, they have to be employed." She made an exception in my case. [laughs] Um, the Digex lesson there was, this is not a normal transaction. You can't cover your ass, I mean, this is a big leap into the void, but the good new is that someone is giving you their parachute to leap in the void, so that's quid pro quo. SkyCache...a satellite company in '98. What I was saying about getting on the rails; interesting lesson: on the napkin, and this time we actually wrote it out on a napkin because we knew that everyone was always talking about writing the business plan out on a napkin, so we actually jokingly by a guy who was going to do marketing, Greg Money,..."whoa, whoa, you're going to write some shit on here, on a napkin? God, you're already looking forward to the 'here's a picture of the actual napkin.'" I said, "man you're looking forward." And that's what...I mean, he was good at that: marketing, discussions. We said, listen, what we're going to do is the cutting edge internet, R and D that all the satellite companies are too slow; they're all too stodgy. They're like networking x25. We're like, no, Internet world! So, we did all that work, but we figured we're going to do this, do this, do that. We'll sell it out for like $50million 'cause we'll sell it to the logical buyer, which will be one of a satellite companies. They're going to look at it and go, "damn, you've done all the R and D that we didn't even know we needed to do, but now that we look at what you've done, you know, wow, that's really great!" And, we did, except we didn't because we had taken a VC partner and, there you go, we had taken a VC partner and they were just one of say...a very good one, they owned a piece. You know, what happened was, it went...when the Orion guys showed up [names] all walked in, and we showed them what we were doing, and they looked at me in the conference room and said, "wow, you guys have done all the research work, dadadadada." I mean it completely repeated my preamble to my [illegible noise], and I was like, "God, you haven't even seen the business. This is great!" And, they said, "look, we'll give you $50million for your company right now." Which is exactly the number we were talking, and it was exactly $2million for each person in the company. Now, we had a VC involved, etc., etc, but I was pretty sure I could turn to every member of the company and say, "listen, here's the deal. We're going to get bought by those guys. We're going to turn into a stodgy satellite company. You're going to hate this. But, here's suitcase for a quarter million dollars. here's suitcase for three hundred thousand dollars." Boom boom boom boom boom. And, we'd make everybody feel good. Well, except, once you got the VC in there, it's not your decision. And, the VC said, "wow, if they're willing to pay $50million for it right now, think about how big this is going to be when we IPO." So, that didn't end up working out. But, you know you're in trouble,the only other anecdote would be-- you know you're in trouble when in your D round, the Bank of Kuwait calls you and says, "we need to be in your deal. Whatever it is. Whoever you are." and sends a representative. I didn't even meet with him; I, by then, in both of my companies, I replaced myself with another CEO to go public. And in this case, we had reds, boxes of red herrings to use as kindle wood. End of the market. But, literally the Bank of Kuwait showed up, didn't understand what we did, and gave us $3million or so to be in the D round. And, even sent up, I remember Rick came out of a meeting, I didn't even sit in this one, I don't consider the D round the one I raised, I just wasn't involved, but he came in and was like, "ok, random banks from the Middle East are showing up and shoving money at the deal." And I said, "what's the amount?" and he said "they told us 'whatever we wanted.'" Ah, ok. That's your sign that it's over, I just want you to know, that's your sign that it's over. It's like your cabbie giving you stock tips. You're like, "ehh. Sell everything." So, anyway, that didn't work out so well. But I did have the joy of taking over a company that was crashing and try to soft-land it for two years. And, firing 200 people in one day. And a bunch of other, so remember with the good, comes the bad. Firing 200 people in a day is...they were all really understanding. They really were. They were very nice. I was shocked. I figured I'd have to shoot three of them, but they were like, "dude, I understand. Sorry. If there's anything..." Almost all of them, a few of them just walked out, most of them came up to me and said, "listen, you know, just 'cause I'm not getting paid, doesn't mean I won't work for you, so if you need anything, you call me, and I'll do it." I do still have a cadre of about 100 people who'll drop whatever they're doing and come follow me into hell, which I'm very, very lucky to have. I tell those people, "Don't do that. You have kids now." So, I'll have to figure out some other way to do that. When'd we start Core? '99 '99, yes., that's what I thought. In 1999, in a totally separate direction, and this is sort of what I do. At the UVA Law School picnic, they said "what do you do?" and I said, "the best way I can tell you is I'm a synergist. I'm not the guy who invents the next formula or the next whatever." I have a physics background, which actually serves me very well, because if you understand physics, you kind of 'grock' the physics of any situation, even if it's a business situation. The physics of the situation is simply the stuff that it is and cannot change. And if you can figure that out, it's easy to figure out the rest of the situation. What I do is try to look for large forces moving in different directions and go, ok, the deal is you're a surfer, and if you want to catch the real wave, you've got to figure out where it's going to be long before it is there. If you see it happen, you're late to the game. So you need to be paddling out, and if everyone on the beach says, "you're out of your mind." well, maybe you're out of your mind. But, if everybody on the beach except one or two people you respect, everybody thinks you're out of your mind, but maybe you see a couple people not saying that, then you're probably right. And you're paddling out to where the waves can happen. Almost nothing in life happens for a single event; almost everything is a confluence of events. Almost everything is multiple events coming together. So, one day, I had a good real estate relationship with the Ezra Company, which.... And, they were my real estate guys, so whenever we would start a company, whatever, you and Mike would come on out, or your dad you know, and we would hook up and they'd find me real estate; they're real estate reps, you know. It's a nice business, a nice staid business. But I always knew these guys were entrepreneurial. They've got huge drive. So what I said was, "hey, I talk to them, they talk to me, the opportunity was in what's called collocation. So, collocation in a nutshell is where all the servers are now. The internet used to be, here's the internet tree and it has a branch and off the branch is another branch and a leaf, here's a leaf. And in the original internet model, the leaves talk to each other. There's no smarts, no storage. There's really no computers in the tree, it's just routers. And that worked for awhile, but what happens is, what happens if it's like AOL where seven million leaves are all trying to talk to AOL. The problem is, you can see the branches get pretty thin here. If 7 million leaves here are all trying to talk, there's something...it's just easier and should go some place where there are multiple carriers like ATT, Sprint or MCI and...and where you have big bandwidth available. And where you have generators and infrastructure and everything all together. And that's what collocation basically came from. It was actually a serious shift in how the internet architecture was used....well up until now they'd all the internet colos have really been like telecolos. But telecolos were all about telephone traffic, they weren't computers...no, and orders of magnitude...energy heating and cooling...in downtown DC, a telecolo could be this room, on 20 and L Street, maybe three of these rooms. And that was it, I mean, you put a bomb there and you take out ½ the telecom in Washington DC for awhile, right? We were going to do a calendar, which was just going to be Ryder trucks of different kinds parked in front of critical infrastructure locations, and it would look to anyone who didn't know like it was a Ryder calendar, right? Here's the little truck and the big truck...but anyone in the know would be like, "Here's a Ryder truck parked in front of 55 Market Street in San Jose? Here's a Ryder truck parked in front of Pearl Street station in New York City. Here's a Ryder truck parked in front of the May East." You know, we thought it would be a great calendar. After 9/11 we scraped plans [laugh] 'cause suddenly there were a lot of people who would get it and would not; I will say this, I have a singular credit, a buddy of mine, at an agency/job that shall not be mentioned, faxed me a page, he said, long story short, he said it was the cover page of a report generated by people I can't talk about to people I can't talk about, I had nothing to do with it, except that several years ago I edited a picture that, Federal Express has a service called Custom Critical, which is their super duper high-end service, I used to do nuclear physics and there's a thing called Prompt Critical, and Prompt Criticality is sort of this thing that happens [snap] just before a nuclear explosion,a lot of controversy over it,, very technical but anyway, so I PhotoShop-ed the word "Prompt" over the word "Custom" right? And it was the lead cover item on a top secret report that someone had searched off the internet and put it on this report and it said "Our Biggest Fear." A Fed Ex truck marked Prompt Critical. Well, I didn't intend it to be that joke, but the guy was actually like, ok I've got to scrub all this stuff off but it's just your picture...'cause I didn't have a credit on it, so I was like, "How did you know that was my picture?" and he was like, "I can't talk about that." [laughs] ack, well, thanks a lot, I'll order pizza the next time I talk on the phone. So, what we did at Core Location was we identified these trends. We suddenly realized that if all the servers are in the middle of the internet,and we weren't the first guys, there were bigger colos, I mean you guys were seeing it, where the Ezra guys would try to find office space in some building and like "this is a rinky dink piece of crap building. Why are we paying $40/square foot for this stuff?" The answer was a telecom building. Right? So they were in on this anyway. I went...we talked it over and what we decided was to go look for big white elephant buildings, and we got million square foot buildings for really cheap and we'd go out mega-data-centers, huge things, and it worked really, really well. So we were very happy, very profitable. Carlisle Group was our partner on that; Carlisle put up a lot of money. Morgan Stanley. Morgan Stanley. I mean there was a whole list, but actually Carlisle gets the lion's share of the credit with all of us 'cause we were in the front taking the risk. Big risk. And then, following behind us, when they saw what was going on, Morgan Stanley and all those guys swoooshed. And it was a big industry until the crash. But we got out long before the crash so we're happy now. So that's good. So, that was Core Location. It's not really much known because truthfully it was a small team of people...there was no dilution, no PC model, it was, what that was was a collision between the internet and real estate. And this industry worked in a certain way. And it didn't understand this industry. It worked in a totally different way. And it didn't understand that industry. And truthfully if you had to boil it down, we understood both industries. I mean, that was it. You put you guys and he guys in the room, we all sat around bullshitted and talked about it, and very, very quickly, we grocked both industries. And in doing that, bingo, you identify where the wave is going to happen. In this case, you get there by buying up million square foot buildings which you can buy for a song because nobody used them anymore. And leasing them. And leasing them, yes. And then what you guys did. Buying them was the hard part. It's just like the VC world, you've got the fundraising, then you've gotta go do it, and in your case, you guys, they leased a million-plus square foot building up at what...months. Unbelievable. I couldn't believe it. So, the core exist was 2001. I got my numbers right. Then Cidera crashed. I did two years of trying to [groan] solve...and somewhere along the line, I got out. I said, "ok, boss. That's it. We're going to go have babies. I have a 4 year old, an 8 year old, they're fabulous, so I'm out." My eight year old is named Juniper, which is really funny. Not after the networking company; we liked the name. But I do have a dog named Cisco; and he is named after them. He's a sheltie, we call him Cisco the Router Dog. You know sheltie is the...[laugh] so he's a herding dog, but he will rout you. He's getting old now, but back then, he'd take off and try to run you in a straight line. Now everyone knows if you have herding dogs, they see anything going in a straight line, they need to catch and eat it...not for any reason. It's just DNA. So, um, the first VC was tough; then there were the go-go years. I mean, in NASA they refer to the go-go years, you know, the go-go years were great. The Golden Age of PC, I call it. Just like NASA the go-go years, I was telling...fabulous stuff, you're doing great things, but could get money. I mean the VC would stalk the halls looking to put VC...I will say that it's happened and still happened...out of VC world. You'll find the old line firms and going to make it because they have foundation, infrastructure, deep pockets, or anyone who's going to invest, who you going to trust? An EVC or ...NEA. I think you're going to turn to those guys....I think I'll invest in your fund to 12; I don't think I'll invest in this fund 1, you know? So, that's going to be a big scrub out, and it's already happened a lot but I think it's not done yet. Note that things tend to run in 10-year cycles and we're just coming up on the. Nobody in the VC world has made any money since '01. and if you pull one or four or five or eight deals, big deals, out of the equation, that was '01. so, either you reached your last fund in '00 or, well, we're coming up. And when you send your guys out in 2010 to try to raise your next funding, it's going to be very interesting to see how that's going to happen. So that'll clean up. Yeah, it was a time of excess. I bought a warship. I had two kids; they weren't excesses, they'll pay off eventually...yeah, we should take everybody out for a ride. I'll send you the website 'cause it's up for lease or for sale, people kept calling and contacting me saying, "we want to lease your warship, we want to go fight pirates." The whole piracy thing? It's ready to go, I mean, it's the only...stamp ready to go, armed up, warship, ready to go, just turn on the engines, and go, 50 caliber machine guns...30 side arms, she still has all of her armor plating, the whole nine yards, and except for the hottub that replaced the front gun now. But it doesn't look like it with the covers on...I got an email, there's photos on the web, from a guy who served on it for like 8 years. It's an old British navy boat, and he sent me an email, he's like, "these are a blast. The picture in the buggies, OMG, 'cause it's got buggies, you know strollers...storage for two 50-caliber machine guns, a thousand rounds of ammo, four strollers." So, we're set, we're all good....Everyone wants to lease this thing, sail it halfway around the world, where it will cost a half-million dollars to get it back, and you'll run it into a war zone where there's no insurance. No. cash in the barrel-head or go away. I mean, if you really want it, that's how much it is, write the check. And if you can't write the check, call me when you can 'cause there's just no way. Ok, me? Ok, now we're to the present. Retirement. Me and retirement, not so good. I've been on the beach for a long time; I love everyone I'm on the beach with. A friend of mine called me looking for a job; you getting divorced? Nooooo. Stop that right now. My kids are great; my wife is great; my daughters are great; I have a great life. We're just on the beach, that's all. So, me and retirement, not too good. My eight year old is into horsies now, so daddy has to go get a new job because we all know about horses. Uuugh my god. Also, the economy is also in a weird place. But also, let's look at this ramp thing. What entrepreneur truly worth his salt; I mean, what you always look for is the knee in the curve, and this is for everything in life. Linear things are not interesting. If you put one dollar in and you get two dollars out; if you put a hundred dollars in and two hundred dollars out, not interested. I mean, interested in doubling your money, but you know what I'm saying. Not that interesting. Why is this not that interesting? 'cause if you know that, everybody else knows it. Secret knowledge is what makes it worth doing. Linear things, everyone knows about linear things. Stock market performance: a dollar in a dollar out. Terrific. I know, nobody here lots any money, I know. I know...I think the key is, what you're looking for, is the knee in the curve where things are not linear. You put a dollar in, you get two bucks out; you put $10 in, you get $30 out; you put $100 in, you get $1,000 out. And that's what the VC look for; it's what anyone looks for. That's what you look for at the Stop-n-Save. That's what you look for at the car dealership. Why do you not go shopping for your BMW three days into the quarter? Because they've got quarterly numbers. 'cause there's no knee in the curve, baby, it's all linear. 20 minutes before midnight, you know, on the last day of the quarter, especially if your friend called you and told you that at whatjamagiggyBMW they're way under quota, ahh, there'll be a knee in that curve. It's where you get some leverage. So, you're always looking for this, and if you really think about it, where is the economy today? Now is the time to get in. Now, I could be completely wrong. Understand this, I am wrong many times...but I'm not. So, now's the time. So, the present is, I'm looking around to see what's going on, what I want to do, and I don't know, I mean, someone said "do you want to do a Bears startup?" and I'm looking at some of those; I mean, maybe, you know. I'm talking to professors who are doing things, and that's the bear-est of the bear. That's called get your suit on and suck it up for money. You know, that's the bear-est of the bear. There's also some things you'll see in here like companies that need their second CEO. To quote Jimi Hendrix, "I have tire tracks all up and down my back." So, if you see knife handles sticking out, I know the names and I know how they got there. So I'll try not to do that again. But the reality is, a company that needs its second CEO, I've replaced myself before. I'd like to be a good guy to replace somebody; I mean, I might be a little more gentle this time. I have a friend of mine who called me up and said "I have a 200-person division, I could put you in for your clearance now, and no one will ever hear from you again." And I said, "appealing in some ways, maybe not so much in others." So, I don't know at all the format of any thing....I've talked to some very interesting biomed, biomedtechnology people. Very interesting stuff going on. Part of this is trying to figure out where the future waves are. That has to sort of inform this. What is the future? Boomer warehousing. Everybody's going to get old; you've got to have places to stick 'em. Ok, boomer warehousing. Boomer repair. People repairing boomers. They're all going to need to get fixed before you throw them out eventually, so. Boomer disposal. Betcha not going to be able to fix 'em anymore. At Cisco, there's a phrase for products, EOL: end of life...it's like: what happened to Bob? Oh, he's EOL. Umm, that's now. If you have any suggestions. And, the future. Well, we talk about the VC guys. What are hot areas? Security stuff is hot; christ I can't talk to anybody about anything without the whole security thing popping up. But I'd like to hear from you guys. Why don't we do Q and A? Based on what you described at the...traditional web posting, what I'm hearing in our company is that... Well, clown computing is, in fact, the same thing. Completely the same thing. The only difference in clown computing is 1) whoever owns whatever it is, so in the colo world, you put your hardware in, you own it, you have to run it, etc. and in clown computing, someone else is putting all that gear in. I mean, you couldn't tell by looking at a colo whether that was clown computing or someone's dedicated computing. You couldn't tell by looking at it; the physical is identical. It's a question of who owns it, who manages it. Ah, clown computing, as usual with any sort of thing, clown computing will be very profitable; it's an outsourcing thing. It will be very profitable for the small/medium sized user, and if you get big enough, you'll eventually come around to where you'll want to...stuff. If you're really huge, you're paying someone else's profit and not getting that much better...but, what's happened is that there's enough management software out there now; people have done the work...to manage clown computing things because in your small organization you get the advantage of fully distributed things; you might actually get a couple of extra nines for liability and that sort of thing. So, yeah, clown computing is a great idea...it usually, it started out as Yahoo! and all those other guys, who have lots of spare 'zoobs;' they've got 50,000 spare machines deployed all over the place, and 80% of the time, the machines are doing this. That they were like, "why don't we sell some of that capacity off?" The new CIO for...CIO and CTO are really high on this? Yeah, and they may be really high too, but that's a different...to give you an example, I mean, this is, ok, key things to take away; the knee in the curve; the things that transcend just what we're talking about: there's always, everything in life is cycles, managed, not managed. You get through that, switch. Then, this, that. Those guys love clown computing because clown computing allows them to offload responsibility. The problem is the federal government always gets burned when it offloads responsibility. There used to be dedicated emergency responder networks, going back to the 60s, 70s, 80s. and then everybody realized, that from an economics perspective, your cell phone, why do we need to pay for this huge, freaking dedicated, big, heavy Motorola blah blah blah. Oh my god. Everybody got a cell phone. It's all good. But, in an emergency everybody picks up their cell phone; all of a sudden, the emergency responder cell phones don't work. So, shared infrastructure, dedicated infrastructure that's the back and forth that you see there. The government has always had dedicated infrastructure. It's very expensive. But, on the other hand, you can control your fate. Now they're going " oh wow, oh wow, we're ... bucks." Shared infrastructure, while it's fabulous until it bites you in the ass. I'm not necessarily saying it's a bad thing; I'm just saying the truth is somewhere in the mix of these things because denial of service attacks, you know, if you're really, really, really clown computing, you don't even have control over it, you're counting on Yahoo! or whoever your vendor is to not get 'swacked' in the...the first time that happens and wipes them off the face of the map and then Homeland Security or whoever the hell it is...contracted...is going "ooooh my god!" so, "we must control our destiny!" you'll hear that line. What was your thought on the fact that iPhone, SmartPhone, GooglePhone has come out; what is your thought on the next computing device from PC ...? What I want, the best thing, what I want is I want my iPhone to magically go 'whoop, whoop, whoop', with a bigger screen, to be all touchy, and then go 'whoop, whoop, whoop' and go back into my pocket. That's a little ways away, but if Apple came out with a smaller, Apple will do it and everyone else is in their dust. They're just totally in Apple's dust. I don't even know why anymore. It's not the Steve Jobs' reality distortion...which I've experienced and it's fabulous. [laughs] Steve Jobs. Anyone here ever met Steve or dealt with Steve? Bottom line. Bill Clinton, who I've met twice, and I mean I meet, you know, we worked together, I mean I was at a guy's party who had him there, and I was like... Ronald Reagan had an RDF, a reality distortion field. Bill Clinton's was even more powerful, was different that Reagan's, but he had an RDF. But Steve Jobs bent, is hard to describe when he's in the room. And, it didn't affect a friend of mine, Don Hopkins. And we were at this Apple roll-out event at...and Don Hopkins was like, "watch this." So he goes over to the cruditÃ©s stand and gets a decorative green pepper...and Steve Jobs is in this receiving line. And I mean, he's in complete rope-off mode, and he says "hi, how are you?" and sprays a thousand miles. The RDF really isn't even turned on though. It's just like coasting. But he's like, "ah, you can't have this tie on you." He's been doing this for probably a thousand people. Don steps up; Steve goes, and Don takes the thing and goes, "earth man, give me your seed." [laughs] And Jobs' face! We all watched Steve Jobs reboot. [laughs] It crashed him, completely crashed him. He went...[laughs] you saw the little thing go...[laughs] And, then he went, he just started laughing his ass off; he grabbed Don and hugged him, shook his hand, Don moved on down the line, but it was right, I mean. He crashed. I watched Steve Jobs have to reboot. But I mean, he was a million miles away. And, but the reality distortion field...is a huge connection. I don't know what to tell you. I mean, Apple bleeds it all. Apple will be a leading edge. So, iPhones, iTunes store, the Iapps,revolutionary, completely changed everything. Caught every other cell phone manufacturer asleep, dead, buried, and they're all still trying to climb out of the grave. Ah, here's the Google, dadada, this will be free. Fuck free. Nobody wants free. Because free isn't it. I don't mind paying $0.99 for an app that works; I really don't. I'm good with that. The little slum of people who won't do it because it's $0.99, you really want them as customers anyway? I mean, are those the guys you're really trying to figure out how to get the money out of their pockets? I don't think so. Now, Steve and company, they have it right. I would guess, if they expand their touchscreen to a tablet touchscreen they'll grow continuously for another ten years...I'm not the...guy here, right? I would say that that's set and will I buy one? Will my wife buy one? Are you serious?! Absolutely. No question. If it costs a few thousand bucks? Yes. Related to that, you talked about the boomers. And this is fast...but I see a disconnect between me and the next 30 years and my parents. We just came back from a trip and I wanted to email my mother some pictures. My mother is 89. She cannot figure out... Get her a Mac. Get her a Mac. Her biggest problem is that she's sitting in front of a PC. And I'm not trying to be a ...here, I'm not kidding. My mom, who recently passed away, I bought my mom a Mac, and she was online. I mean, she was truly, even at the end of her days, did not have a huge appreciation for what was going on under the covers, but she was emailing. I asked her, you know what I did, I got her a Mac and this will sound very weird. I got her a Mac, and I got her an AOL account. Took care of everything. I never had to do...the only time I had to a little support call was literally when the phone line wasn't working or something. I guess what I'm asking, though, is actually a little bit bigger question, though, which is: it seems to me that there's a fairly big market who people haven't, you know, bought an iPhone because it's just, kinda, too hard. Well, ahhh, right. And, you know what? Those people will be solved by time. [laughs] EOL. Didn't we discuss EOL? That's...problem. I'm not trying to make...a friend of mine, a friend of mine, we were talking about racism, bigotry. And, look, my grandmother was racist, you know. She grew up in the South; that was her world. And, you cannot judge the past by the standards of today. I mean, you can judge it a little bit, but you've gotta, without the context, the data doesn't make sense. In the context of when she grew up, was the context of when she grew up. She wasn't a bad person, but those were her views. Am I going to get into it with her and try to change her views? Do I need to beat this into my grandmother's head? No. she was smart enough to know; she never said it in public; she never said it to anybody. She maintained politeness; she was a Southern woman. I knew what she thought. It's ok; I didn't think it. Some things get solved with time. Technology uptake, you know to add documents? print them out. On what paper? ...the feel of paper. So, the paperless office, it's just the funniest concept in the whole world to me. I have this shredder, I mean an Oliver North signature model, turns it into dust. This shredder I got at NSA at an auction. Only pushed hard for a few years. Only shredded on Sundays for the...agency or something. But, if I'm editing a real document, I print it...I edit it up. I work on it. Somewhere along the line I go back; I change a version number; I put my edits in. I don't do it online. I've got a $2,000 laptop; it's more powerful than all the computers in the world 25 years ago all combined, right? I edit on paper 'cause I can see it. Just works for me better. But, I'm not trying to say that that's bad or good, but I'm doubting that I'll be editing not on paper on my deathbed, you know what I mean?; it's sort of, it's my MO. It's the way I work. Right. Where I was headed, actually, was thinking of all this biomed stuff and the degree to which if we change the healthcare system... Oh, yeah! That's going to be huge! Ok, ok, I'm type 2 diabetic, right? Although that's weird because I've changed my diet and I'm not anymore, but the underlying lack of basal substance is still there, right? So. If I go in there and chew down a whole, all sorts of carby things, then I'll get my blood sugar level up. But the point is you know I test, I have a little thing, I go boom, I bleed, you know. Right now if I squeeze my finger, I just bleed. A friend of mine tests himself in the middle of his hand; I'm like, "dude, it's like stigmata! What are you doing?" 'cause one day he poked himself, first off, that's like the most, I'm like, you're a masochist, right? You're a ... there's just no question. Because, dude, you like pain far too much. That's gotta be the worst place to hit yourself, and he hits himself right there. And one day, it didn't just close up automatically, so he's doing work on stuff and leaving little bloody, bloddy prints everywhere. I grabbed his hand, turned it over, and...stigmata...no, no, ok. You're ok. But, um, all of this is arcane. I've got an iPhone right there, what do I do? I test myself and I send myself an email with my iPhone that says BG whatever it is in the subject line. And then my mail system takes it out and sorts it and shoves it...it's all good. Ok, wait a minute. There's something wrong with that. This is, like, way back when, when a buddy of mine got a Motorola pager and two Motorola cell phones. He got paged by the Motorola pager, look at the phone number, pull out the Motorola cell phone [laughs], and call. Tell me there isn't somebody who hasn't thought of the idea that you should be able to go...hi, Bob, you know? So so protocol. I'll give a medical device history that will blow you away. A friend of mine is at the highest, highest, highest, highest, highest, highest level as a contractor, but I mean, highest policy levels of National Security Agency. She really is. Having lunch with her...two people standing by the front door at the restaurant...just hanging out....so I had lunch with her the other day. She just had a spine implant done, and she showed it to me the other day...and, um, it's literally a spinal stimulator. It's a row of three by 24 electrode diode thingies and it's implanted in her spine now. I said, "Oh, TSA is going to love you!" and, then we're talking, I said, "oh, you have another problem, what does the office of security at the fort think about this?" And she said, "yeah, didn't have much..." I mean, this has a wireless remote control. No, but she's walking in the spaces at NSA, skiffs...it's like, this thing logs data. You know, when she goes to the doctor, he goes booop and wirelessly downloads stuff from her! She's bionic! I said, "do they have a policy on that?" and she said, "nobody in the entire community has a policy on this." She said, "this has caused, like, waves of trouble throughout the intelligence community." Because, who would have ever thought about this? I mean, you're not supposed to walk in there with a wrist watch, and she's walking in with a wireless data-logging system that's got an...[laughs] I mean, I'm like, you better be careful, someone's going to walk up to you and they're going to, like, Bluetooth and exploit and something like...excuse me...[laughs]...exploit your spine, you know? And, she's like, "that's what they're scared of." Medtronic, that's it, Medtronic. Thanks. I'm just like, "holy shit!" so guess what?...but as everyone gets older, that's the thing to look for. The confluence of events. What is, what will all the, I mean, this is just selling, it's just marketing. What will all these people need as various markets collide? Health care, I mean, I won't go into details, but, I mean, you know, this is a looming disaster that is so big that actually no one will actually, everyone is just diverting the days...ok. And, the only way to solve it is not policy, it's not denial of care, or this or that, it's not beating the 20 or 30%, even if you, ok, even if you got beat 20% profits and 30% in efficiency out of the whole system and cut the costs in half, we are screwed, I mean, we aren't just sort of screwed. We are completely screwed. The only way to solve this is with technology. The only way to solve this is that instead of it being a wrist watch, here that I have, that when I get to be 65 or 50 or whatever the hell it is, I put on the Metronic blahblahblah wrist watch. And the blahblah wrist watch would...allow me to do anything, report my blood sucrose, reports my blood sugar, my blood pressure, and does this and does that, and monitors a zillion things so that without any effort, ie any cost, there's ...eye running somewhere that looks this whole thing over and goes: hey, unit number 7763, I don't know, I am not a man, I am a number...has this problem and we have to take a look and they solve this thing easy because the only other alternative is that three-quarters of us get hit by a bus so the only thing the system has to do is pay out $3000 for burial. But if every single person in the, all of us, everyone in this room, expects someone to spend $3million to get your butt to live six months more at the end of every single life, the math doesn't work. The good news is we're the people who are going to solve the problem. So, other than that, you're question is not interesting. [laughs] One last question. One more, one more. Come on guys, come on. But not you Dennis...financial guys. They aren't going to talk to you anymore. Yes. Just to fill the last question: a guy who was a Chief Information Security Officer at Intuit, and he says 10% of the computers in the US have been botted by guys who will download stuff so they can use it. And he said the only good news is 5%, 10% of the bots here are in this bot herd, and 10% are in this bot herd, and once you're in a bot herd they will make sure you don't get other viruses. Oh yes, each bot herd had very good internet security. Yeah, absolutely. The fear he has, of course, is that these are being orchestrated by foreign governments and... Well, they're being orchestrated by whoever can write the check, but yeah, yeah. So, the point being that stopping that is actually a critical thing to the United States. You can completely blame Microsoft for this. So, fixing it, is that an area of interest? That's the question. It's an area of huge interest. Gigantic. The problem with it is, um, we have now, we have what's called the curse of the installed base. All of us have this problem. As a service provider, look at Microsoft right now. What is it, Microsoft, the browser, for whatever, it's one of old or seven ... I'm a Mac guy. I tell people I know nothing about Microsoft. And that way I don't have to fix their computers. Um, do you know something about...the bottom line is once you let a piece of software out there, it's out there. And, to your point, now you got your mom. What's going to happen when you've got your mom working on something and it turns out she gets owned by a bot 'cause it's an old version of whatever, and she doesn't know how to update her security things, and lalalala. Well, we're going to get mom to upgrade the software? You're out of your mind. You can't get us to upgrade the software. Mom's not upgrading the software. Enterprises solve this by getting an iron fist on the machine. I'm just saying, look you use it, you're not running it, you're not controlling it. There are certain downsides to this, but it's not...example: a buddy of mine works for a data security company. This is good. He lives down here...he had to explain this to me 'cause I'm not a Windows guy but I am a crypto guy sort of. I quickly got it once he got to the crypto part. All the stuff on his PC is encrypted, and it's all encrypted to registry serial numbers of his machine. Someone at headquarters, and his machine is part of the local network of their machines, someone at headquarters in an upgrade shifted their system over from all the machines control their own keys to their crypto off the registry to their crypto off the...all this makes sense except when they pushed the button, it then erased the keys from all the local registries never to...again. But now replacing them with the keys from this central registry, which of course don't work, now he said any new work he does is encrypted under the new keys. And he has sent them his old harddrive with a note that says "Everything I've ever done for you [laughs] is on this harddrive. There are various data places and various agencies that might bust it for you, although I would note that corporately you opted for very strong encryption. So here's a harddrive. Have a nice day." So, there was a little bit of trouble. And management in Toronto said, "well can't we just undo that?" ... so that does happen. Uum, you've got a point, systemic problems, when Microsoft first puts stuff out, they tore all the security out of the baseline stuff because the theory was it's a personal computer, it doesn't even allow for multi-level, multi-user security. When something comes into my map, it tries to do something nefarious, the first thing that happens is that I get asked for the root password. Well, if I don't like what's going on, I type in the password, and guess what, nothing happens. So, that isn't an option on any of your older Microsoft operating systems, they all...boom, someone's telling me to do something, I should do it. It's not multi-level security stuff. Now, the new ones do, and if Microsoft could push a button; they'd pay a million bucks for a PC if they could push a button and make the past go away, know they'd do that. You know they'd...billions of dollars for the...but they can't... Just a simple question for a crypto-expert, super techno... Oh no. Do you shop online? Oh, all the time! All the time! All the time, for sure! I bought my boat on the...server. I will say this, but I have a separate credit card. I have, like, four Visa cards, and they are dedicated to different things, and I have one of them that's my online card, so that not when,not if, rather--but when random charges start showing up, I'll...the damn thing, which they do once in a blue moon. They're not even panicking my other card, and every once in a while I will cancel that card. I mean, literally, I, if anything's funny I call the credit card company and say, "those two charges look bad." And they go, "ok." And I say, "turn it off and send me a new card." I literally, I can't even remember, but I get my bill and I go, "Amazon. Yeah, they have my thing. And these guys, eh, I'll go change my card." And trust me if someone tries to buy something, they will tell me. They're gonna..."We feel unloved." But I do have it on a separate card in general principle. I mean, you know, you can't be too paranoid. I have friends who live in Israel.
August 11th, 2011. Chiba, Japan.
A mix of confusion and awe as I step off the platform.
I must have made a mistake. But maybe a good mistake.
Birds caw and cicadas click gently, filling the warm afternoon air with sounds of nature. The train platform is open to the air and on the other side of the tracks is a high fence. Beyond it, a bicycle and walking path leading to a park.
Children are running around and playing in the park, but surprisingly quietly. Very Japanese.