On today’s episode, Jason chats with Kara Swisher of All Things D and David Cohen of TechStars. Their electric discussion starts off with Apple and Tim Cook, segways to Yahoo and its fleeting stance in the industry, and closes with a debate circling around the bout between TechStars and YCombinator. Enjoy!
0:30 Let’s welcome Kara Swisher and of All Things D and David Cohen, the founder of TechStars
2:20 Let’s thank NewRelic for sponsoring the program. Use code TWiST to get a free month of New Relic Pro
4:15 Hey Kara, how is everything at AllThingsD?
4:30 Hey David, how’s TechStars doing?
5:40 Do you think bringing manufacturing jobs to the US is something Steve Jobs would have done?
6:25 Are some of Cook’s changes good for Apple?
7:50 Do you think Cook is an appeaser?
9:30 What is the state of Apple and Television?
13:45 Who is the most engaging of startups of the big 4?
14:10 What about Yahoo? Are they showing up yet?
15:50 What do you think of the new Yahoo homepage?
16:50 Is Yahoo going to be a media or a tech company?
18:40 Is Marissa’s PR becoming too much and hurting Yahoo?
20:10 How important is YAhoo’s success to the ecosystem David?
21:10 How hard is it to make mobile work today?
21:45 Let’s talk about Cir.ca
27:45 Thanks to myTurnstone for sponsoring the program, Mahalo is getting new desks over our Holiday closure. Go to myturnstone.com/twist to receive 10% off of your first order
30:05 Let’s talk about the changes of YCombinator
31:50 David what is the largest class TechStars has ever had?
34:20 Is it smart of YCombinator or cut back?
39:05 What does this mean for the accelerator system in general?
41:10 David are you afraid of going head to head with YCombinator?
44:15 Will other studios jump on the Netflix bandwagon now, post deal with Disney?
49:00 David what do you think about content and startup companies? Are you pro-content or anti-content?
53:15 David is Dan Lyons a douche or not a douche?
54:50 Kara what’s the biggest position you ever turned down?
57:30 Did NewsCorp give up too soon on the mobile only daily newspaper?
59:30 Why do you think they gave up David?
60:30 Thanks to Kara Swisher and David Cohen!
61:20 David what’s the number one tip for applying?
Distribution provided by CoudSigma. The cloud that adapts to you. Visit CloudSigma.com/This WeekIn, for a free $200 credit.
Today’s episode of ThisWeekIn Startups, is brought to you by, New Relic. Use promo code: TWIST, and get a free month of New Relic Pro. To redeem: visit NewRelic.com/ThisWeekIn, and see why thousands of developers, world wide, don’t deploy, without it.
And by, Turnstone. More than furniture, we’re an experience. Go to myturnstone.com/twist, to learn more and receive 10% off your first order.
Jason: Hey, everybody. Hey, everybody. It’s, Jason Calacanis. It’s, ThisWeekIn Startups. It’s our News Roundtable. Boy, do we have, two amazing guests. David Cohen, the founder of TechStars, is with us, and, Kara Swisher, the co-founder of, All Things D, and, a great, great journalist are, both, on the program. It’s going to be the best show, ever. Stick, with us.
TWiST title sequence.
Jason: Hey, everybody. Hey, everybody. It’s ThisWeekIn Startups. The show, where, we talk about, entrepreneurship, and, startups. It’s our News Roundtable. Which, is what we do, every friday. And, have done, for the last 3 years. Today, we are going to have two, amazing guests. Kara Swisher, from, All Things D, is with us. Great conference, The D Conference, and, of course, an amazing website and journalistic enterprise. David Cohen, the founder of, TechStars, is with us. He’s done amazing stuff: helped launch, hundreds of startups. Some of them are, very, very successful. It’s going to be a great program. We have, a lot, to talk about. Kirin, is going to read the news. Apple, Twitter, News Corp., shutting down The Daily, NetFlix, getting Disney, Mary Meeker. Tons of great stuff. The Surface, Dan Loins, ripping up the startup ecosystem. Y Combinator, changing their deal. There’s a lot going on in the industry. We’re going to talk about it, today.
Let me start, by saying, thank you, to our friends, over at New Relic. Which, monitors user experience. We use it, here. As, you guys know. We only have sponsors, on the program, when, we actually use their products. New Relic. A lot of, you guys are using it, already. I hear about it, all the time. We can see, very, easily what’s going on, with our servers. We use this, actually, for the Launch servers and for the Launch Ticker. We see, “What’s the problem, with the ticker? Is it the memo cache? Is it a database? Is it Ruby? Is it the web? Is it the network? Who, do I blame?” As, C.E.O., that’s what you’re looking for. Who, to place blame on, to fix problems. This is where, I can look at it, and, see exactly, where our servers are, either, succeeding or failing. CPU usage, physical memory, disk utilization. All that great stuff, in one package. I get this email. Which, is the thing I love. I get this nice email, telling me, what our up-time is. For me, it just feels great to see that our page load time, is going down, and, our views are going up. There’s 100% uptime. It just makes me sleep, well, at night. New Relic works with… again, the customer list, speaks, for itself: SkullCandy, Spotify, Nike, Zillow, Vonage. All these people, trust their performance, for their critical apps to, our friends, at New Relic. If you want to have X-ray vision, into your web apps, sign up, today. Get a free, ThisWeekIn Startups t-shirt. That’s right. It’s a ThisWeekIn Startups t-shirt, that you can, only, get if you sign up for a free trial of New Relic. Go to newrelic. com/thisweekin. It’s fast. It’s easy. No credit card, is required. You can, always, tell when a company is super confident, in their product. When, they don’t require a credit card, for a free trial. That just speaks volumes. Right? What they’re, basically, saying is, they know, they’ll probably convert you. Because, the product is so good. Thank you, so much, to New Relic. I’ve been hearing great things, from the super fans of the show, and, the fans of the show, who have been using the service. Everybody is raving, about it. It’s very affordable and very comprehensive. Go ahead, and thank @newrelic, on your Twitter account, for sponsoring, independent media, like, ThisWeekIn Startups.
On the program, Kara Swisher, is with us. Hey, Kara, how are you doing?
Kara: Hey. How are you doing?
Jason: I’m good. How’s, everything, at All Things D?
Kara: Fantastic. I’m at my house, actually. But, it’s fantastic, I’m sure.
Jason: Absolutely. Good. David Cohen, how are you doing? How’s TechStars?
David: I’m doing great, Jason. What’s up?
Jason: When’s the next class graduating?
David: We have them going on, all the time. We have a TechStars Cloud program. It’s just starting, and, a Boston one, coming up, soon, as well.
Jason: Boston, New York, Colorado, Boulder, Seattle. Who am I missing?
David: There’s a program, down, in Texas. It’s called, Tech Stars Cloud. It’s an API infrastructure accelerator.
Jason: Ah. Good timing on that one, huh? Kirin Kalia, you’re with us, in the news. So, let’s get the first story going.
Kirin: Alright. I think, one of the big stories, this week, was about, Apple, saying, we are going to start creating, the one Mac line, in the U.S. This is something, I know, Jason…
Jason: One Mac line?
Kirin: One Mac line. They haven’t said, which one, or, where they’re going to start manufacturing it. Tim Cook, revealed this, when he did his first TV interview, with Brian Williams, on Rock Center. The interview, actually, aired, last night. They teased the news, yesterday. Of course, it was about, Tim Cook, also saying that Apple has, already, created about 600,00 jobs, in the U.S. Tim Cook, of course, maybe, taking a little bit of a different tact on this, than Steve Jobs would have. The question to you is, do you think, this is something, Steve, would have done? What Steve would think, of this?
Jason: Kara, what do you think? You were, one, of the only people who’ve interviewed, Steve Jobs, multiple times, on stage, at the D Conference. The most famous appearances of his career. He didn’t care about, where the jobs were taking place, right? This, was not on his agenda.
Kara: He never, really, seemed to care. I don’t know, if he did, or not. He didn’t move to move these jobs, here. I don’t think, he didn’t take much interest in those kinds of things. He thought, wherever, they could make the best products, they would do that. That they could sell, for the best prices. This is, definitely, a change. Tim Cook’s, doing a lot of different things. Around charity. Around visibility. Around, a lot of, things. This is just one of the many.
Jason: Are those things, good for Apple? Was, Steve Jobs… is it just a stylistic difference? Does it make any difference in the company’s ability, to recruit employees?
Kara: It takes, a little bit, of the mystery out of the company, I guess. That Apple is secretive, mysterious what they’re going to do, they don’t care. These companies can’t live in Amberg, just because it was a tragic death of, Steve Jobs. A very, early death. I think, one of the things, Cook, said, on stage, with us, last year, and, also, in the recent, Brian Williams article, and several, he’s been doing a big press push, this week. Apple has. Has been, Steve told him not to think about what, Steve Jobs, would do. Not wwsjd, kind of thing. What would, Steve, do? I think, that’s one of the things. He’s doing, what he thinks, is best. I think, the departure of Forstall, wouldn’t of happened, under Jobs. He was tolerated, under, Jobs. Obviously, Cook, is putting on his stamp of leadership of the organization.
Jason: It seems, a lot, more humanitarian, and, caring, and, listening to the market. Steve Jobs… his, sort of, whole vibe was, “If you tell me, I need to do something. I’m, absolutely, not doing it.” Rebellion, to the point of absurdity. Tim Cook, seems to be… I wouldn’t say, an appeaser, but, here we are, one year, into his tenure, and, the biggest issue was Obama, and, other people saying, “What about American Jobs?” He’s, already, saying, “We’re going to start creating, more jobs, here.” That’s, very, reactionary, isn’t it?
Kara: It’s not reaction. It’s a good message. If they can do it, why not? Apple’s got a lot of competition. They, certainly, can’t live their lives, like, they’re on a mountain, on high, kind of thing. They don’t have, Steve Jobs, to do that. He was, very, effective at being very rare. I think, they don’t have that, and, they know that. They have to be, a little, more down in the arena, with everyone else. They, already, were. But, they have to compete. From, Android, there’s a lot of competition. From, Kindle. Everybody. They have to engage, a little, more than they did. You’ll see their executives, out, a little, bit more. Collectively, they were all, Steve Jobs. Steve, was a, very, effective marketing person, for that company.
Jason: I remember, at the event, you pressed him hard, on the TV, obviously. He seems to take a slightly different approach, with the press. Which is, he’s, a little, more playful. He said, to you guys, when you just grilled him, on the TV. He wouldn’t tell you, exactly, they were doing a TV, but, he said, very, memorably, “they’re pulling a string and they’re going to see where it leads, them.” On Brian Williams, which is, the softball, of all softball interviews…
Kara: It was, kind of…
Jason: Yeah. Let’s give him the, most, easiest run, ever given. Somewhere, between, a journalist and your, really, nice uncle. He, basically, gave him a he was volunteering, that they’re obsessed with TVs, They love TVs. I heard, they were testing a TV, 3 or 4, years ago, from insiders, they were testing TVs. What is the state of it? You have, a lot of, inside information.
Kara: You know, we haven’t written, a lot, about it lately. There’s these stories, about, if it’s delayed, or not. They’re, definitely, working on it. The living room is an, incredibly, important area, for all these companies. So, they’re not, not working on it. It’s, just, when they’re going to launch it, and, how they’re going to launch it. There’s a lot of conflicting stories, about it. I don’t think, it’s a matter of “if”. I think, it’s a matter of “when”. I think, that’s the big question.
Jason: What’s the defining feature or holdup, do you think? Is it going to be unbundled TV?
Kara: Who knows, with them. Could be. I think, the problems with the television industry, are myriad. Steve, talked about it, before, he died. The difficulties. The last interview, he did at DA, he did talk about the difficulty of changing Hollywood, and, how you distribute entertainment, and, how you get rights, to things. Hollywood’s been around the block, with this company, before, and, didn’t come out on a great side. They’re, a little, more wary of dealing with Apple, Google, and Amazon. You have to get great shows. If, you have an AppleTV… I have an AppleTV and Roku, in order to get everything. It’s a difficult and fractured experience. They want to have the best experience, have the best stuff. That’s a difficult road, to get Hollywood, to agree, to do all kinds of deals. Same with, Netflix. Everybody faces these issues. Tim Cook, did say a lot of things. He says it in much more coy ways. He talked about… he eluded, he was going to get rid of Ping. He eluded that the Facebook deal, was coming. He eludes things a lot more, than, Steve does.
Jason: Steve, just lies. At the D Conference, he just lied, to my face, literally. I met him at, The D Conference, early on. I couldn’t afford it. I used, to carry a CMA ticket, as a journalist. I asked him, straight up, “Why doesn’t my iPod play video?” He said, “Jason, nobody wants to watch video, on their iPod. Are you stupid?” I say, “No. I’m your customer. I would like to do that.” He goes, “Nobody, wants to do that.” Four months, later, he launches it.
Kara: I remember, we would say, to him, whatever year he’s say, he wasn’t going to do something, then, he’d announce it, the next year. One of the first questions, one of the years, was, “So, what aren’t you going to be doing, this year?”
Jason: David, when, you look at Apple, and the, sort of, new, friendlier, more accessible Apple, what has the reaction been from the startup community? You’re seeing more people, in your orbit, being able to communicate, well, with Apple, and, work better, with Apple. As opposed to this enigma, that they were, just, a year, ago?
David: I think, it, still, feels very insular. It’s, really, difficult, for startups, to build a relationship, inside of Apple. I think, it’s changing, a little, but, they’re not out there, on the corporative front. They’re not engaging startups, deeply, outside of the ecosystems, that they’re, obviously, facilitating. They’re not hanging out, with the startups, or, helping them, get things done. We don’t see, a lot, of them. It’s been that way, forever.
Jason: That, really, hasn’t changed. But, Google, on the other hand, is really, really, embracing. They created that startup group. I guess, consolidated their startup activity. You do have, a lot of, Google, MicroSoft, and, FaceBook interaction, with the startups, at TechStars?
David: Absolutely. They show up, pretty, regularly, and, give up-and-coming news, for the startups, to help get them, in front of the curve, to try and help them be successful. So, those companies do a great job.
Jason: How do you balance those big players coming in and wanting to take out the startups, before they, even, start? Let’s face it, Facebook has been, very, heavy-handed with startup companies. Negotiating, very, hard to buy them. Or, do acqui-hires. As one person, told me… this is a person of influence… Zuckerberg, straight up, told founders, similar to the ones in your group, “Don’t worry about your investor. Just, come work here. We’ll give you a great stock package.” How big, of an impact, have those acqui-hires been on people building sustainable businesses, or, just getting taken out with, $1M stock, packages, by Zuckerberg, personally?
David: It’s pretty much, every team that’s doing, something interesting, is going to hear, something like that, early on. Options aren’t a bad thing. If, somebody comes along, with that option, you can consider it. Hopefully, the companies are looking to build, something real. There’s a lot of activity, right now, for the companies that don’t get over the hump. To have that acqui-hire happen and have some kind of positive outcome, for themselves, also, maybe for their investors.
Jason: Who’s the best, most engaging, and, supportive of startups? The big 4 or 5 internet companies, in your mind? Who does the best job?
David: I think, Google and MicroSoft, Surprisingly, we get, a lot of, AOL interaction. Those, few, seem to be the ones, that get in there and try to help.
Jason: What about Yahoo!? Now, you have, Marissa, at Yahoo. Seems to be doing a great job, at least, on the PR front, the morale front, and, on the hiring front. Are they starting to show up, yet? Or, is it, still, they’re in the planning phases?
David: A few years ago, we had folks like, Greg Khan, who was at Yahoo!, part of BrickHouse, showing up, all the time. I’d say, 3 or 4, years, ago. They’ve lost, so many people, that a lot of the people we used to have coming in, aren’t there, anymore. It’d be interesting to see, what they do, as they enter the new phase.
Jason: Let’s segue, into the Yahoo! homepage, Kirin.
Jason: Story, number 8. Then, I want to hear, Kara’s update on, All Things Marissa.
Kirin: I was going to say, we have to have a Yahoo! update, here.
Jason: Of course.
Kirin: I hope, she’s got some juice news, for us. As, Kara, wrote about, earlier, this week, Yahoo!, looks like it’s got a new home page, said, set to debut. They’re using touchscreen tiles. So, it looks like, it can be consumed, very, easily, on mobile. Looks like, according to Kara’s description, no advertising, at the top part of the screen. Sources have said, the ads can be integrated into the tile modules. The redesigned is being iterated, under the codename: Project Home Run. What do you, guys, think of the version, that Kara got a copy of? What should, Marissa, change, before it goes live?
Jason: I actually got this version, served up to me, on my iPad. It’s being tested, in the field, I think. I got this very version.
Kara: They’re bucket testing it. They’re, widely, bucket testing it. They’ve had tweaks, to it. I shown, several, different types. It’s similar. They’re all similar.
Jason: What do you think?
Kara: What do I think?
Jason: Yeah. She seems to be, very, very, obsessed with the homepage. Why is she, so, obsessed with it? Let’s start, with that.
Kara: I don’t think, she’s obsessed, with it. It has to change. It looks like it’s from 1943, at this point. It was, kind of, who’s using portals, kind of thing? It really does have an, older, old web, kind of, look. I think, they’re changing it to make it, more, mobile attractive. As you can see, with those tiles, it’s very similar, to a Flipboard or a Windows 8, kind of, iteration or design sensibility. Or, Pinterest, even. Very visual. Lot’s of pictures. It looks like, it’s perfectly made, for the iPad, or, any tablet, or, one of the 7″ things. It looks, very… I don’t know the versions they’re going to put on those, if there’s special apps or use HTML5. It’s designed for a mobile environment, much, more so.
Jason: We read, extensively, in All Things D, and, other places. They went with, Marissa, over, Ross Levinson, because, they wanted a tech CEO, not a media CEO. But, a lot of, the changes we’re seeing, feels media-ish. Is Yahoo! going to be a media company, a tech company, or, is Marissa going to try to do, both, effectively?
Kara: They were working on a home page redesign, before she got there. This is just her version, kind of, thing. I think, that, she’s working on a lot of tech things, actually. They have to redo the homepage. It’s the front page of where everything comes in. It’s critically, important. It’s where, most, of their finances, are generated. Off of that homepage ad. They, really, do have to make it look good, and, make it an attractive place. A lot of people go through, Yahoo! Mail, and, things like that. They have to make it compelling, for people to use, on some level. That’s where, most, of the people come through it, and, go to other parts, of Yahoo!. Like, Yahoo! Finance, or, Yahoo! Sports. One of the goals, she’s talked about, I make a joke about it, she, just, says, “Mobile, mobile, mobile, mobile. Then, the stock, goes up.” Even, though, they don’t have any mobile strategy, to speak of, at this moment. They’re buying stuff, but, for the most part, Yahoo! has been, way, out of the mobile game. She’s smart. She knows that, if she says, mobile, 50 times, the stock goes up. Everything she does is going to be oriented towards a mobile type experience. They don’t have a whole lot of choices, at Yahoo!. They run up, against, Google in ad tech. Which, they’re trying to be aggressive in. They run up against Facebook, in social. They run up against, the changing ad market. The problematic buying. The way they used to buy. They have very few choices, of how to, truly, move the needle. Besides, the PR. Which, she’s very good at. That’s going to get her, so, far. If she doesn’t move the needle, in revenue, in significant ways, it doesn’t matter how fantastic she looks at parties. No matter how fantastic she looks, or, anything else, she’s got to move the needle, in terms of, improving revenue. Improving engagement. Improving search revenue.
Jason: Is that PR stuff, a net benefit, to her? Or, is it, now, becoming a net distraction? What I mean by that is, I don’t know how many stories I’ve read, about her pregnancy, or, her collection of suits, or, cover photos. I don’t have a position, on it. Obviously, PR, is important to get your message out. It’s great, that she’s leveraging that. Is it getting, too, much that, people are judging her, more on her on the cover photos, and, the child care issues, and, not the, actual, product?
Kara: Yeah. The child care stuff, is, a little, distracting. I’m sure, she finds it distracting. She, does talk about it, though. She’s, always, been someone who enjoys the limelight. You know what I mean? Even, at Google. Compared to other executives. Even, compared to other, high ranking executives. She got, much, more limelight, than many other executives, who were, much, more powerful. She likes it. She’s good at it. The camera, likes her. She’s a good story. It’s a great story. She’s a, very, attractive, smart woman, who’s, very, accomplished. It’s perfect. You know how media is. You don’t hear, a lot, from Susan Wojcicki, of Google, who is, really, a very powerful person, at Google. She’s someone I would focus on, if I were talking about powerful people, at Google. It’s good for Yahoo!, because, they haven’t had this exciting CEO, kind of character, in a while. It can’t be a Marissa story, it’s got to be a Yahoo! story.
Jason: It seems like it’s starting to convert, there. How important is Yahoo’s success, do you think, David, to the ecosystem? Do you see, a lot of, companies looking at it, saying, “Hey, that’s a potential exit, for us? Or, “We need to get a meeting, with Yahoo.” Is it, still, this dying relic, on the side, here?
David: It’s out there. I think, people are conscious of it. I think, they’re aware that, with the new mobile strategy, perhaps, there’s an exit down the road, through Yahoo. I think, it’s still on people’s radars. Certainly, expecting some activity around mobile, in the near term.
Jason: What about mobile, in terms of, applications and acceptance. Obviously, Marissa’s, saying, “Mobile, mobile, mobile,” because, the usage it there. Are you seeing the applications be mobile first? Are people leading with mobile, still? Are people having a hard time, after they make the mobile application. Everybody can talk about how mobile’s important, but, actually making a product that gets critical mass or delights users, is a totally different story. How hard is it to make mobile work, today?
David: It’s pretty hard. All the tools aren’t in place, yet. Of course, we’ve seen Fred Wilson, blogging about this, in the last few days. It’s harder to close viral loops. There’s still a lot of companies that are mobile first. It makes a lot of sense in certain cases. As we see with some of companies. I’m involved with Circa. They’re just, now, moving onto mobile, even though, they started with mobile, first. I think that’s important for companies that are doing things, like news.
Jason: Let’s talk about Circa, for a second, since you brought it up. I’m… what would be the word… fascinated, enamored, confused. All of these things. It feels like an enigma, to me. I open up Circa. I get these little nuggets of news. I flip through it. It updates automatically. Have they locked into am editorial format? Are they actually doing journalism, there? Or is it random, active curation?
David: I think what’s special about Circa is that they’re, really, summarizing the news. Adapting it for a mobile experience, primarily. It’s two great things. One, it’s familiar on your mobile device. It looks great. It feels great. It’s a summarization, which is very useful. I think, also, the fact that you can subscribe to, a story, instead of, reading 15 stories about the super storm. You get one story that you can subscribe to, and, you get alerts, when, It gets updates. The format, of it, is better for mobile. It’s more consumable, overall. That’s why, I like it.
Jason: Is the idea, there, that there’s ,too, many people reporting on the same story. That it’s better to consolidate it down, into one? Which, we see in the tech business, like crazy. You go to TechMeme and there’s 100 people “writing” a story, about the MicroSoft Surface, but, only three of them are, actually, doing journalism. The other 97 are piling on, to get a link. Is this to solve that specific, over coverage, under journalism?
David: I think, that’s part of it. There are, a lot of, people writing about these things. The approach Circa is taking, is to boil it down to facts. They’re not editorializing. They’re trying to present the facts, as best they can, in a simple format.
Jason: Kara, what do you think of that approach? You live in this ecosystem. You live in an ecosystem, where, TechCrunch will… among others… run with a press release that says, “Google bought something for $400M”, and, not even check it. Not do a basic call. How frustrating is it for you to be a two decade journalist, three decade journalist, and, have to compete against people firing and without, even, aiming?
Kara: That’s not, exactly, competing, is it? I don’t know what you’d call it. We feel like, we’re auto-correct of the blogosphere. Oh, no. Sorry, about that. What do I think about that? I think, it’s terrible. I don’t know why people won’t, just, call. Do the basics. Honestly. I told you, before. I’m being complimented for, making the one call to Google, to confirm it. Which, it wasn’t confirmed. That we got kudos for that, is depressing, to me. Extreme. That’s our job, to do that. What can I say? It’s depressing to watch. What’s, more, depressing though, interesting enough, I get it with some of these sites. Cause, all they do is, constant press releases, whatever comes across the transit mic. I don’t know. Like, the Twitter feed is, now, blue. Who cares. This is not news. What’s really worse is, that, someone will publish one of those pieces, like, the Facebook/Yahoo search engine. I don’t know if, they’ve do reporting on it, but, it’s wrong. Everybody will parrot, what they wrote. Then, I write a piece, saying, “Sorry, folks, it’s not happening. It’s, kind of, ridiculous to imagine this, and, here’s why. I’ve checked with, my sources and they say, no.” Everybody else will, then, write my story, saying I was correct. I mean, “Kara, says, this.” I called one of the better news organizations and said, “How do you know, I’m right? Did you make a call to check, if I’m right?” That was what was, more, depressing, to me. They were like, “Well, your always right.” I say, “Your job is not to assume I’m right, cause, someday I’m going to be wrong. You should have made the call, in the first place. Why didn’t any of you do any reporting?”
Jason: I think, what people are probably doing, is that they’re probably, looking and saying, “We know in this, entire, ecosystem there’s 500 blogs, about, technology. We know that these three or four, actually, do real work, therefore, they’re the fact checkers.” It’s basically, like this crazy compliment. We know, nobody does work. The benchmark’s so low, that, we assume you did some level of work. That’s the best, we have to go on.
Kara: Not some. If, my reporters… Oh, I can’t, even, tell you what would happen to our reporters, if they didn’t make a call on a story, like that.
Jason: You’d fire, them?
Kara: Yes, I would. Yes.
Jason: That’s, basically, what would happen. You would, literally, fire the person, for running that Google acquired that company, for $400M, correct?
Kara: It would not be a good day, for that person.
Jason: Oh. Come on, now. You would, definitely, fire them.
Kara: I would feel, very, angry. Let us, just say. What’s incredible is… I got into a Twitter fight, with one of the TechCrunch writers, about it, and… they were, like, proud of it. That’s the worse part. I, always, joke that raised by wolves, or something. It’s not proud, to be wrong. It was part of the process. I’m always like, “What is process, except saying, you suck at your job?” You know what I mean? That, I don’t get. That’s what drives me crazy. People make errors. We’re going to make an error, some day. So, I’m not going to be one of these people that say, “Nobody makes errors.” It’s the lack of trying. It’s the lack of caring. It’s the lack of thinking, it’s important. I sound like, Ms. Crabtree, or, something.
Jason: No. I think, it’s actually correct. I think, that’s, actually, the opportunity, now. If, everybody doesn’t do work, then, the people who do do work will start to stand out.
Kirin: You’re missing one, little, piece of this. Which is, that you still have this time pressure to be the first one to get it, out there. So, at what point do you say, “The time pressure, doesn’t matter. It’s important to get it right?”
Jason: I guess, that is the rub. When, we get back, let’s talk about…
Kara: There is no time pressure. That is not true. The time pressure is to get the right story out. That’s false. That’s a falsehood. I think, it is. It’s in people’s minds, but, it’s certainly not… everybody’s not a wire service reporter. Speaking of which, AP, got the story wrong, to.
Jason: That’s fascinating. I think, what it is, is that Gabe’s done such an amazing job, on TechMeme, of making people think, being first is most important, but, when you look at it, TechMeme doesn’t send that much traffic. Like, that’s got to be the lowest amount of traffic, to your site, right? What’s the highest?
Kara: Google and Twitter.
Jason: Yeah. I think, it’s moved to social. Hey, when we get back, let’s talk about, NetFlix, and, Disney. News Corp. shutting down, The Daily. What that means, for mobile. Hey, let’s talk about the Y Combinator stuff. Lots of changes, over there. When, we get back. After this, very, important message.
Jason: What is the important message. The important message is, I’m getting new desks. That’s the important message. We’re done. Boom. No. Seriously, it’s an important message. I’m trying to find it, on my screen. Basically, I love these desks, from myturnstone. These are the guys, and the gals, who do, what’s it called? What’s the parent company, called, of myturnstone? They make, really, good furniture. I forgot the name, of it. Anyway, myturnstone, is putting in, a bunch of, new desks, here. This is another example of, I love a product. We talk about the product, on the show. Then, we wind up, getting them, as a partner. Here, it is. Go to: myturnstone.com/twist. Get, a bunch of, amazing desks, chairs, all the great furniture, that any great startup should have, at a great price. You can buy the Ikea stuff, but, we all know, that stuff breaks, after a couple of uses. You can go spend $5K or $10K, per work station, if you were like, some, incredibly, rich company that wants to go blow, all their money. Or, right in the middle, for me, at least, is myturnstone. They make these beautiful desks. I saw them first, at RocketSpace. I fell in love, with them, there. I said, “I gotta get these at my company.” Guess what. Over the holidays, we’re putting in 50 desks, here. I can’t tell you how happy the staff is, to get off of the cheap desks, that we have, and, get into these beautiful ones. How the environment looks, and the vibe, it does matter. We can say that it doesn’t, but, it does. Having beautiful furniture, in a beautiful environment, to work in, matters. I think, that, myturnstone, is the perfect, perfect medium, between, breaking the bank and spending money, on garbage. You want to have something, right in the middle, there. That’s value, looks great, is functional, and, makes optimal use of your space. So, go ahead, go to: myturnstone.com/twist, and, get 10%, off your first order. Ten percent off of furniture, is a good deal. GreenBiz.com, uses TurnStone. They’ve got gorgeous furniture, there. We’re using it, here, at ThisWeekIn, Launch, and, Mahalo. Smart furniture solutions for small businesses and startups. They focused on startups. What’s, really, great, is they have all these consultants, who are sending me stuff. I’m ,like, I want to change this. I want to change that. Get me this desk. Put that couch in. They’re, really, responsive. They’ll lay it, all, out there. I guess, that’s Klout, right there. Who has, a bunch of, the desks. You need to have a, really, great set-up and beautiful office. It really is great at recruiting. Just, thinking about a recruiting thing. If you spend $1,000, on that desk, or something, and, it gets you that developer, hey, it’s worth it. So, have a beautiful office. Get great employees. Thank you, @myturnstone. O.K., let’s talk about the changes, at Y Combinator. Kirin, you want to summarize those?
Kirin: Sure. As we all know, Y Combinator, has grown, quite a bit, over the last few years. They had a class of 84, in the winter of 2012.
Kirin: 84 companies.
Jason: Not a bubble.
Kirin: You think about, teams of more than one, for the most part. That’s, a lot of, people to manage. Paul Graham, did come out, recently, and, he said, “We grew, too, fast. We’re going to cut back.” So, they’re going to accept, much, fewer companies for the upcoming class.
Jason: They, also, changed the money deal. You were, supposed, to get $150 grand, $250 grand, in a crazy, Yuri Milner, deal.
Kirin: Right. The money is, a lot, less. He found that people were starting to fight over the money if, the company didn’t work out. That was one of the reasons…
Jason: Oh. The founders would fight over the $100, 000 left in the bank account?
Jason: So, more money, more problems?
Kirin: His partner, Jessica, was spending, a lot of, time, mediating those fights.
Jason: Wow. That’s fascinating and transparent.
Kirin: That is.
Jason: I heard, a lot, about this. I have some insider information. Which was, a lot of, the angel investors, I spoke to, felt it was too hard to process that many companies.
Kirin: Right. You can’t scale your mentorship, you’re quality of experience, that high. Can you?
Jason: Yeah. That was the two pieces of feedback. I talked to somebody, from the Stanford accelerator. Who was in the Stanford accelerator. I said, “Why did you pick the Stanford accelerator, over Y Combinator?” They say, Y Combinator, was a cookie cutter. They were just churning them out. It’s a factory. They wanted a, more, personalized experience. I heard people, about that, choosing Tech Stars, over Y Combinator. Since, we have other contemporaries… David, I know you don’t want to speak ill. What I guess is, that, you do compete for startups. What do you think about then space. Is there an optimal number to give the right attention? What’s the largest class, you’ve ever done?
David: The largest, we’ve ever done, is 13 companies. Which, we viewed as pushing the boundaries. We like to have a 5-1 or 10-1 mentor ratio, to companies. We’ve always had, a lot of, mentors focused on each company and tried to meaningfully help them. We found, when, you get anywhere near 14 or 15, you’re not necessarily adding the value. We feel, like, it’s been right sized, around 10, from the beginning.
Jason: What do you think of their announcement to scale back? Make sense, logically?
David: You know, frankly, they’re getting closer to what we’ve, always, done. Which is, bring in more mentors, to be hands-on and help. Right size the investment. Kind of, scaling back to be focused on the companies, a bit, more. Not, just, stamp a label on them, but, really help them. We were getting, certainly, companies choosing us, saying they wanted more hands-on attention, and, live mentorship. I think, they’re moving in that direction. It makes sense.
Jason: When, somebody comes to you and says, “Hey, I’m a startup. I’ve got a great idea. We’ve been accepted to both. Or, we’re considering both.” There’s, obviously, other accelerators, out there, as well. It’s bit of a competition, for these startups. What do you say is the top two or three reasons, to come to Tech Stars, over the other competitors?
David: I think, track record. We put our data out there, 100% public. Every company. Whether, it’s dead or alive. How they’re funded. How many employees. Where it’s at. It’s all on our website. We point them at that and we say, “Call, anybody.” So, really, 100% referenceable, founders, who all rave about the program. Sort of, the small class size, the breadth of the mentor network is, very, national. I’ll tell you, honestly, there’s a big chunk, of this, it’s just geography. People will pick a program, that’s in their backyard, if they perceive it as a high-quality program. We’re not in the Valley. We’re not in San Francisco. People that are in New York or Boston, often, tend to pick Tech Stars. It’s simpler for them to stay, at home.
Jason: Yeah. Look at this. The disclosure is incredible. The number of companies, the number funded, and, the total funding. It’s very consistent. $10M, $15M, $25M, every year. $268M over, I don’t know how many classes are listed, here. It looks like 18. Very, consistent in putting it out there. Kara Swisher, is it a bubble?
Kara: Oh, God.
Jason: What do you think of Y Combinator pulling it back? Yes. I asked you if it’s a bubble. It’s so obvious, there is a bubble, in startups.
Kara: It’s, always, a bubble, Jason. I think, it’s smart to cut back. It’s gotten, a little, fried. I think, the other word is frothy. I think, you can use that, too. I think, it’s what, Dave, was talking about. You have to, really, start to focus on the winners. There’s, a lot of, laudable ideas around. In fact, there’s more laudable ideas, than ever before, in the space. But, at the same time, you really want to give attention, mentorship and help, to these companies. It got to be, a little bit, sort of a, dog and pony show, at Y Combinator. Everybody showing up, and, the whole thing. I think, it got a little much. They probably thought, “Let’s be more effective, rather than just churn these things out.” That’s what it read like, to me.
Jason: I think, the valuations, also, just started scaring angel investors. I know, for me, uncapped notes. $15M notes. If I’m putting in $25,000 or $50,000, into something, I own nothing meaningful, there’s no upside, here. What’s the point?
Kirin: We, actually… I sat in on one of your investment calls. You couldn’t believe the valuation, they were raising at.
Jason: I, just, tell them, straight up. “I can’t compete, on this level, with people who are, just, throwing money around and not thinking about it.” There has to be some path to return, in order for me to have a sustainable angel investment process.
Kara: There’s an old expression. “There’s not enough rat holes, in Silicon Valley, to shovel all the money.” I think, it’s just a question of discipline. Just like, even the budget discussions that are going on, in Washington. It’s a question of discipline.
David: You, also, see the note that was put in, with uncapped notes, with, so many companies. Ron Conway, I don’t know why, not participating in the new funding. At some level, it just doesn’t make sense. You’ve got to be rational about the decisions. Even, at volume.
Jason: Yeah. I think that, to me, Ron Conway, is not participating in the new set of things. That, to me, speaks volumes. I think, what was happening is, his branding was getting, horribly, diluted. It used to be, that, if somebody told me, “Ron Conway, is investing.” I’d say, “O.K. I gotta take that meeting.” Just, out of respect to, Ron. Now, it’s like of course, Ron Conway, is invested in 300 companies, in the last year.
Kara: I was joking with him, once. That’s it’s like, “If you put a roulette chip, down on everything, I don’t believe, you win,” if that’s the case. You’re right. He was in, a lot of, things. I think, he probably felt that, too. One of the things that’s important, when, you’re thinking about all this stuff is, “How is it going to end up?” Going back to Yahoo or anyone, who’s going to acquire these things, they can’t buy, a lot of, these tiny businesses. They need businesses that move the needle. Marissa’s, talking about, 100M people or $100M. Most of these mobile companies, for example, many of which, are in these groups, are not going to get to that. Even if, they’re laudable, interesting things, they’re just not going to get to the kind of scale, that you need to.
Jason: They’re going to have to, at some point, say…
Kara: It’s a cool idea, but, so what.
Jason: What I found, really, interesting was, the pitches… I don’t know if you saw this, too, Kirin, when we were sitting in them… a lot of them were like, “O.K., now we’re going to show three charts that show a graph, over 12 weeks, going up and to the right.’ I was like, “If, I spent $5,000 on cost per click ads, signing people up by email, or whatever, I can make any chart go up and to the right. The question is, is this going to convert and be sustainable. I, almost, feel like a lot of the founders started building their products, not out of passion, but, out of conversion. The conversion funnel was converting a conversion of angels. Can I convert angels, into this product? Then, with the lack of large vision, which, only comes from, a lot of, mentorship, it takes a while for entrepreneurs to get up the hutzpah, to be big thinkers. It takes a decade, or, five years, or, fifteen years… some never even get there… but, to think about the big world changing idea, and have the guts to go, after it, and take the small steps. It, really, felt like the grooming, of the entrepreneurs, was lost. You knew it was a problem, when they had to send an email to companies, Ron Conway invested in, saying, “We know, Ron Conway’s invested in your company. Please, don’t email, Ron Conway.”
Kirin: He can’t handle it.
Jason: Isn’t the point of angel investing, is that the angel investor is supposed to be available to… they’re like, “No. He’s the brain surgeon. He, only, comes in at a special time. When, your company is screwed, you’re out of money, or, you’re getting bought. Then, he’ll come in.” That doesn’t make sense, to me. I think, he probably realized that, as well.
Kirin: So, what does this mean, for the accelerator space, in general? How it’s evolved, over the past 5 or 6 years, and, where’s it going?
Jason: I don’t know. Kara, what do you think?
Kara: I can remember, they used to be called, incinerators, back in web 1.0. They had, too, many of them. Then, they didn’t have them. These are better ideas. One of the things, I’m struck by, these was at a Kleiner Perkins holiday party, and, I ran into a guy, I really liked: Pejman Nozad. He’s the rug guy, from Palo Alto. He’s, actually, a really smart angel investor. He told me something, a while ago, that really stuck, with me. He said, “There’s a lot of big minds, chasing small ideas.” It really stuck with me. Of all the many people, I talked to. That, there’s a lot of big minds, chasing rather small ideas.
Jason: Yeah. I’m going to have to agree, with that.
Kara: It’s interesting. It’s an interesting thing to think about. We’ll see. I could be wrong.
David: I, certainly, think, it’s true. There’s a lot of people with derivative ideas. We’re funding about 1%, of what we see. I think, the thing that people forget…I know the people that run companies and have operated companies as founders. Created 3, 4, 5, this all rang true. You don’t, always, know how big it’s going to be. You might be just focused on a passion, that you have. A lot of things, that sound small early on, yet, another photo sharing site, that’s Instagram. Yet, another social network, that’s Facebook. Yet, another search engine, that’s Google. They come from the passion around doing something better. Sometimes, the germ of the idea is small. As, Jason, was saying, it might take a few years, to get up not only the hutzpah, but, also the knowledge, to have permission from their user base, to go on to that bigger thing. I think, discounting a company, just, because the idea, initially, feels small, can be a mistake. You really need to focus on the market space, they’re in, and, how great the team is. Which, is what we try to do.
Jason: David, you never opened up in San Francisco, the bay area. Are you scared of going head-to-head against, Y Combinator. That’s my hard, Kara Swisher-type question.
David: No. For us, we started as a way to build entrepreneurial communities and startup systems. The geographies that we’re in, we feel like there’s an investment thesis, around it. To be in the Valley, is a different game. It’s very high valuations. I think, it’s unlike any place else, in the world. We have a thesis about, if you can get to the best companies, in New York, or the best companies in Boston, or Boulder, or Seattle, you can have a big impact, without, having to over-pay, for that startup. What’s going on in the Valley, right now, is a very difficult dynamic. You’ve got companies, that are taking money, from angels, that don’t necessarily add, a lot of, value. It’s scaring away the angels, that are good, because, the prices gets, too, high. It’s just the dynamic, there, wasn’t a fit for our philosophy and our investment strategy.
Jason: That’s what’s starting to happen, to me. I tell people, “I can’t compete, on this level.” Then, they say, “We really want you” I say, ” O.K. Give me, 50 or 75, basis points, as an advisor. Then, I’ll invest.” You know what? They, all, do it and it, sort of, balances out the crazy valuation. But, I do feel bad, about the crazy valuation, going on, because, they have to, then, live up to it.
Kirin: Well, you also said, “If you can get that kind of money, it’s great, for you, as an entrepreneur.”
Jason: Yeah. It’s great for you, until, you try to sell your company. Now, I’m in the midst, of this with a number of the 25 people, I’ve invested in. Which is, one part of the cap table, is under water. The other part of the cap table, is making, a little bit of money. It’s a $25M exit, or, $15M exit, whatever. You have this bifurcation, of interests. It’s leading to strife and stalemates, in some cases. David, are you seeing that?
David: It always has. It’s amplified, now. It’s happening more. I can’t tell you the number of companies, I’ve seen, been involved with, advised, that raise money, early, on too high of a valuation. There options were, very, limited at the next round. Cause, they couldn’t live up to the valuation. They had to take an early exit. Investors didn’t, necessarily, want that. Things just weren’t aligned. My philosophy is, as a very active angel, I don’t want to overpay. I want to pay the right price, for the right company, at the right stage. We find that’s an opportunity, for us, in the markets that we’re in. We’re focused on that.
Jason: Listen. Let’s talk about this NetFlix thing. That’s interesting, to me, too.
Kirin: O.K. We know that NetFlix did quite a big deal with Disney, this week. They will be the exclusive U.S. TV subscription service, for Disney films. Mind you, Disney is the first major studio to choose NetFlix, over cable TV networks. They’re going to start with films released, in 2016. You’ll be able to watch them, instantly, on any platform. Direct to video new releases are available, starting next year. Today, members can, already, access Disney catalog movies, like, Dumbo, Pocahontas, and, Alice in Wonderland. There are some folks, who are saying, NetFlix, overpaid for this deal. They’re estimating it was, about, $350M, a year. It’s, also, worth noting that, Disney shut down it’s own online streaming service. Or, is about to, at the end of this year, Disney Movies Online. Do you think, other studios are going to jump on the NetFlix bandwagon, now? Are there any parts of this deal, that, surprised you?
Jason: Kara, why is Iger, basically, giving up on going direct?
Kara: I don’t know. Getting to these things is hard. These are going to coalesce around a certain amount of these platforms. These video watching platforms. From YouTube, to NetFlix, to Amazon, to Google, and, Apple, obviously. You’ve got to make your choice of where you get the best return. He, obviously, got a great deal of money, here. I think, they’re trying to replicate what, some of, the music industry is doing with some of the streaming services. That’s a problem, too. I don’t know if you saw a good story, in the Journal, called, essentially, “The more Pandora successful is, the more money they lose.” Because of the fees they have to pay to these music companies. It’s an interesting problem. They did pay a lot. It a lot of money. If these entertainment companies, which, are in the business of entertainment, not necessarily in the business of technology, can get a lot of money for their content, on these very competing platforms, which are going to vie for them, why not take a big pile of money from NetFlix. I would do it.
Jason: It makes sense. You, now, have NetFlix overpaying. I think, the dynamic that’s happened here, is they’re overpaying because, their management team… this is how I handicap it. You tell me, if I’m wrong, Kara. I don’t mean to be a cynic, but… their management team is vested in the stock, in that company. By doing this deal, the stock stays up. They get to sell their shares, over the next 5, 10 years at a high valuation. Whether, it’s profitable, or not, that’s not going to come out for 10 or 15 years. So, the window for them to sell their stock… I hate to be a cynic, about this, but… this is the kind of deal that makes people keep the service. I was thinking about turning off NetFlix, because of, Amazon. Amazon Prime video is so good. I’m getting so little out of it. But, I’m, like, “Wow. My daughter really loves the Disney films, so, I say, screw it. I’ll just get this.” Is that what’s going on, here?
Kara: No. I don’t think it’s a stock thing. I think, they have to compete in this, very, difficult environment. The question is, will NetFlix get sold. It’s a, very, good net brand name. It’s interesting, because, you have them coalescing around Google Play, Apple services, Hulu, you can’t leave out Hulu. YouTube is doing different things. There’s only so many video platforms, this is going to coalesce around. There is competition, here. They will compete over exclusive deals, presumably. Which, is not great. You wish you can buy everything on every platform. Not have 19 devices. I could show the computer, of how many devices we have to watch video. The fact of the matter is, as you know from having a child, my kids don’t watch network television. Network television, to them, is Apple TV, Roku, and Amazon Prime.
Jason: Yeah. YouTube.
Kara: And, some YouTube. It is. That is network, to them. These companies, they’re going to have to have this content. If you’re a content company, you have to think hard about who you want to be available on. You want to stream, some of your stuff. Like, ABC, has a very good streaming app that shows all of their shows. It’s terrific. They’re still doing things.
Jason: It’s changing, rapidly. The whole video space, is changing very rapidly. YouTube coming out, investing hundreds of millions of dollars, in companies, including, Mahalo/Inside.com, is obviously one of the partners. I can’t talk, too, much about that deal. They’re, basically, funding people to make original content.
Kara: Yeah. They’re paying you. You’re not making much money, I’m guessing.
Jason: No. We don’t make any money profit, off of it, but, we own the content. It’s almost like they’re funding the creation of content, that I’ll own for all eternity.
Kara: Yeah. They’re paying you. Why not? It’s not a lot of money though. If you think about it, it’s not that much money.
Jason: No. For them to be able to take these shows to advertisers. The thing that struck me, I was, just, at the YouTube Partner Conference… I don’t know if I’m allowed to say this or not…
Kara: How was that?
Jason: It was great. They were really investing. There was the top 400 people, in the industry.
Kara: It’s interesting. I’ve heard complaints, that there’re not doing things that a network would do. A true network would do, in terms of, marketing. In terms of understanding. There’s a lot of publishers that are not happy about that. Because, of that, Google has a mixed feeling about what’s going on, there. i feel like, they’re not, in it to win it.
Jason: It feels like, there is a religious issue, where, it’s a bit of a philosophical issue, where Google has been the fairness algorithm type company. Now, YouTube has to pick winners. Right? That’s an editorial decision. Where, NetFlix is used to saying, we’re going to buy Disney, we’re not going to buy Dream Works Animation. It’s against Google’s DNA, to be, like, “Wait. We have to make an editorial decision, of what we put on the homepage?” But, they do. If you’re going to compete in this space. It’s just a growing pain. I’m long, on it. David. What about content and startup companies. It seems like content was a dirty word, for the last decade. But, for the first part of web 1.0, it was what everybody wanted to invest in. It keeps coming in and out of fashion. Why is that? Are you guys anti-content? Like, Y Combinator seems to be anti-content. Or, are you pro-content?
David: I don’t know that I’d say we’re either. Where there’s a specific audience, like, I’m an investor in a company, called, Daily Worth, targeting women around finance. That audience is, very, valuable. I think you can still build, real, meaningful things. The game is getting harder to play, on the distribution side. To fund a straight up content play, isn’t, necessarily, interesting to me, but Circa or Daily Worth, are more interesting.
Jason: Interesting. I was going to say, that whole story we did about companies not being able to raise money, Dan Loins, who is a bit of a hater.
Kirin: Have you read that piece? That was a hater piece.
Jason: I think, what it is, is that, Dan Loins, is kind of irrelevant. He keeps trying to get more relevant. It’s ,sort of, like Michael Wolf. I put him in the same category: kind of, a loser. Michael Wolf, celebrates his loserdom.
Kirin: You hated that guy, for so long.
Jason: Everything, Michael Wolf, touches turns to ash.
Kara: He’s still a good writer. Still can write.
Jason: Oh. He can write.
Kara: He has some talent, at writing.
Jason: His best writing, Kara, correct me if I’m wrong, is self deprecating. When, he’s talking about what a loser, he is.
Kara: Yeah. He’s a piece of work. When, I went on my first book tour, he was the only other person writing about the internet, besides me, in ’96. I’ve spent a lot of time with, Michael Wolf, on radio shows and stuff, like that.
Jason: Are you fond of him? Do you like him? Do you think he’s a jerk? What do you think? Tell me.
Kara: He’s an interesting character, on the internet scene. How about that?
Jason: But, you will not talk to him… you and I will have dinner… have a play date.
Kara: I’ve had dinner with him.
Jason: But, you’ll be guarded.
Kara: I had dinner at that fancy New York… I had dinner, with him.
Jason: You’d be guarded.
Kara: Can you hear me?
Jason: I can hear you. Yes. You’ll be guarded when you have dinner, with him?
Kirin: Oops. Did we lose, Kara?
Jason: Oh. Now, she’s going to be like, “You lost me, right as you were asking me the hard question.” I like that move. Kara, are there?
Kirin: We can hear you.
Jason: We can hear you. Oh. Sorry.
Jason: Are you back?
Kara: Sorry about that. Can you hear me? I had a really nice time in the Beatrice Tavern. He’s fine. He’s not my best friend, but, he’s fine.
Jason: When, you had dinner, with him, would you be guarded, though?
Kara: I’m careful about what I say, to him.
Jason: That’s what I’m asking.
Kara: Yes. Yes.
Jason: See. You and I will have a conversation…
Kara: He’s thrown me under the bus, enough, times.
Jason: That’s my experience, with that guy. I think, he’s a douche.
Jason: There you have it. I think he’s a douche. No. I’ll tell you why. Because, every time, I’ve had a conversation, with him, he then says something about me. He compared me to, like, at one point he compared me to the slow kid, from Party of Five, or, Dawson’s Creek. Dawson’s Creek. He’s like, “Calacanis is like the slow kid, from Dawson’s Creek.” I’m like, “Did you just compare me to somebody who’s mentally retarded?” Really? In New York magazine. Douche. I think, I put Dan Loins in the same douche category.
Kirin: Well, he did say something interesting.
Jason: Which was?
Kirin: He believes that smart young people have been fooled into thinking that starting a company is like buying a lottery ticket, or, rolling the dice, in Vegas.
Jason: It is. That’s, exactly, what it’s like.
Kirin: He thinks that a lot of them are in it, just, to make another photo sharing app.
Kirin: They think they can flip it and, maybe, make some money. He wants them to be doing useful, world changing things. Like, working for Tesla or SpaceX, or, teaching at public schools, doing medical research. Those were his examples of useful things.
Kara: I thought that was an interesting piece. Part of it was a little mean, but, that’s Dan. I thought, he made some good points, in it. It was worth reading.
Jason: I think it’s worth reading. Do you think, it’s schtick?
Kara: No. Everybody has a schtick. I have a schtick. You have a schtick. That’s his schtick. I thought, it was good, for someone to write it. I don’t mind those pieces, I like them.
Jason: Dave. This piece was, obviously, directed at you. So, Dan Loins, douche, or, not douche. What do you think? What do you think of, Dan Loins. What do you think of the piece?
David: My connection’s breaking up. I’m sorry. No. There are some interesting points, in there. Of course, people are talking about it. I’m just tired of hearing about it. Hello, it’s venture capital. Some companies are going to get funded. Some companies are going to raise more money. A lot of them are going to die. It’s the circle of life. So, every time we have a swing, in the market, you’re going to have this kind of story. I just try to ignore it and keep doing what I’m doing, right through it.
Jason: Is the fact true, that journalists, are sometimes haters. They don’t get compensated, that, well.
Kirin: Unless, you’re Kara.
Jason: Unless, you’re Kara and Walt.
Kara: I do O.K.
Jason: Back up the Brinks truck.
Kara: That’s why, I’m smiling, all the time.
Jason: (imitating truck backing up) Boop. Boop. Boop. That News Corp. Brinks truck, backing up.
Kara: I am an entrepreneur. I am an entrepreneur.
Jason: The truth is, with journalists… having been a former journalist, myself… Michael Moritz, a former journalist. Arrington, a former journalist. There’s a whole thing, where journalists, if they stay journalist, get more and more, bitter, over time, that, other people get to play the lottery, everyday, and they don’t. Is that not a true phenomenon?
Kara: No. I think, if you want to be a journalist, you’re very happy. I’m a happy, in my job, even if I was making a lot less. It’s you make a decision, to jump into that, or not. I think, the people who love being journalists, love that. I love my profession. I’ve had plenty of opportunities to go into internet companies. Believe me, it would have been, very, lucrative.
Jason: What was the most famous one, you turned down?
Kara: All of them.
Jason: Give me the one, that would have made you the most money.
Kara: Every single one.
Jason: Facebook, Google AOL?
Kara: Facebook, was one. Google was one.
Jason: What position would Facebook put you in? PR?
Kara: Oh. They wanted editorial, something. It was during Owen Van Natta’s era. I think editorial director. Something, like that.
Kara: You know, everyone of them. AOL… Amazon would have been an interesting one. They had a lot of editorial going on.
Jason: Yeah. They did.
Kara: At one point, it was a Yahoo thing. This was way, way back. I remember saying to Ted Leonsis, the first one, “I work at the Washington Post. Why would I want to work, at AOL?” He likes to tease me, every couple of years. ” You would have been worth this.” I like my job. It’s a question of whether you like your job. Some journalists, I think, it’s more irritating when they want to become venture capitalists, without the experience. Which, doesn’t mean you need experience, to be a venture capitalist. Just be one, then. Just, go ahead and do it.
Jason: I think some people have a problem with… I know that, the amount of wealth that’s generated by venture capital, on the fringes, here, and, the amount that’s, potentially, lost, when, something like Color happens or Web Vin, and the amount that can be made. Both of those things are, tremendously, unfair and confusing, to people. It just takes people, I think, journalists, some period of time. You have to be a bigger person to understand that, when, you’re launching rockets and doing satellites, trying to discover life on other planets, its expensive, weird things can happen, things can blow up. You have aberrations, like, Color. You have, on the other end, extremes like Facebook or Google, etc. It’s hard for these journalists, I think, to do it. Let’s talk about… Anything to add, David, to that?
David: I guess, the only other thing I’d say, probably, in the business, Kara would know more about this, there’s some level of driving expectation of what you’re talking about. You can make the choice to be journalistic. To cover something and be thoughtful about it, or, you can make the choice to make a bunch of noise and wave your arms around. We all know people in every industry that are like either extreme. Sometimes, they do that to get the attention and the views.
Jason: Yeah. M.G.’s review of the MicroSoft Surface was the “best” dramatic performance, by a blogger, this year. I don’t know if anybody read his Surface. It was like, and the best dramatic link-baiting performance, on a blog, in 2012, goes to M.G. Siegler. For, throwing his MicroSoft Surface, in the trash. It’s a great device. It’s not that bad of a device. Last story is about, The Daily.
Kirin: We gotta get this one in. The Daily. Exactly. It, probably, doesn’t surprise some folks, that, The Daily is shutting down. They had, already, cut the staff, over the summer. About, 30%. Now, Murdock said, “they could not find a large enough audience, quickly enough, to convince us the business model was sustainable, in the long term.” People have said the stories were not linkable. It took too long to download. It wasn’t an established brand. Did News Corp. give up, too, soon? What should an iPad publication, actually, look like, then?
Jason: David, what do you think? Did they give up, too, soon?
David: No. When, you’re incinerating that kind of money, you make a decision. Right? I think, on some level, there was some element of brand stigma, around it. Information is free, but, analysis isn’t. To me, it didn’t feel like their analysis was, that, additive. It’s that simple. Just, not working. The hardest part’s shutting it down. Making the decision. So, they did that.
Jason: They did have 100,000 people, paying $40, a year.
Kirin: Or, 99¢, a week.
Jason: Let’s just take the lower number. That’s $4M, a year, in subscription revenue. David, have you ever had a content company make $4M, a year, out of Tech Stars?
David: Not yet.
Jason: Yeah. This is the craziness, of this. They are making… I don’t know if it’s sustainable. The subscriptions are, just, plummeting. $4M, a year, in subscription revenue, is a hell of a lot of revenue. I’m having a hard time, personally, reconciling why they would turn it off. Why not give it to me. Or, give it to any media entrepreneur, and, say, “Here is something with $4M, in revenue. Can you make this work, with a 25 person team, instead of, a 100 person team?” I think the answer is yes. What’s going on, here, Kara?
Kara: (audio issues)
Jason: Oh. No. We’ve lost her feed. What do you think, David? Why wouldn’t they spin it out?
David: I think there was a huge burn going on, as well. We talk about mobile, first. I’d like to talk about small, first. Do something that makes sense. Make it profitable, then, grow. Sometimes, you make a big bet. You spend a ton of money on editors and writers, it doesn’t work, you feel like there’s nothing left to do, but give up on it.
Jason: Yeah. It’s sad. What do you think, Kirin?
Kirin: I’m, sort of, with you on the fact, what exactly is success, supposed to look like? $4M, a year, is nothing to sneeze at. So, why would you shut it down?
Jason: It seems like a pretty good place, to be. What do you think, Kara?
Kara: Can you hear me, now?
Jason: Naaa. We’re losing you. I think, your fidelity’s, a little bit, off. Maybe your Wi-fi networks off, or something. Just, count to ten. Let’s see if we can get you back.
Kara: 1, 2, 3,…
Jason: You sound like it’s, Kara Swisher 3000, the robot. I like that, (imitating robotic voice) I am, Kara Swisher. Michael Wolf, is not a douche, but, I would not give him any information. I can hear her robot laughing. Listen. We’re going to wrap up, here. This has been an amazing episode. Thanks, to having two amazing guests. That’s leaving the audience wanting more. Which is, exactly, what I’m trying to do. Thank you, so much, David Cohen, for coming on the program. Tech Stars is a fantastic, fantastic program. I give it, my highest rating. Everybody follow, @davidcohen. Everybody apply to Tech Stars. It’s an amazing, amazing… I’ll say it, straight out, here. I think, it’s a better program, than, Y Combinator. I think, it’s a better experience, for people. I know Y Combinator is a slightly bigger name. I know that they’ve been at it, a little bit longer. The truth is, if you’re going one program with 50 people… I’m not saying that Y Combinator’s bad, but, if it was me and I was choosing… or let’s say, London grows up and she wants to pick one or the other. I’m going to say, “I think Tech Stars might be better.”
Kirin: I love the transparency.
Jason: Hey, David, when’s the next application process? What’s the number one tip, for applying?
David: You can apply, now. Applications open for New York and Boston. The number one tip is, get it in, early. Update us, all the time. Thanks for the kind words. The check is in the mail.
Jason: Of course. We’ll see you at the Launch Conference, March 4th, 5th, and 6th. Thank you, Kara Swisher. Everybody follow, @karaswisher. Not Kahra. Kara. Kahra, Kahra. you need to move that ball. Now, I know her weakness. I’m, like, Hannibal Lechter. Once people tell me their, like, weakness, then, I ride it. I know it for all time. Kahra, you need to throw the ball faster. Clarise, have the lambs stopped crying? Clarise.
Kirin: She’s playing field hockey. You don’t throw a ball, in field hockey.
Jason: I don’t know how field hockey works.
Kara: Seriously, dude?
Jason: I don’t. I don’t actually, know.
Kara: Stick. Hit the ball. On the ground.
Jason: Hit the ball harder, Kahra, faster. Thank you, so much, to New Relic. For sponsoring independent media, like, ThisWeekIn Startups. Hey, where can you get a program, like this. No where. This is the only place. It’s doing fantastic. Over 100,000 downloads, to ThisWeekIn Startups. Thanks for the support of @newrelic. Everybody say, thank you, @newrelic, on your Twitter account, right now. Everybody say, thank you @myturnstone. Get yourself a beautiful desk. Get 10% off. By the way. The margin on a physical product, like that, is not going to be, that high. 10% off, is really, giving you, 30, 40, 50% off. I don’t know the exact margins they have, either, but, it’s a really good deal. Everybody go to myturnstone/twist. Kirin Kalia, great job booking the show. This was our best get, in terms of, a pair. We’ve had equally good guests on the show, absolutely. But, this as a pairing, this, I love. What a great pairing. You got, David Cohen, who’s actually in the trenches, with startups. You got, Kara Swisher…
Jason: That’s what I said, Kara. Kara Swisher, who’s just so “inside information”. She’s so honest. Two really good, honest guests. This is going to be the prototypical episode. We need to get… for The News RoundTable, we need to keep getting, big powerhouse people, like, this. You guys can help me, by saying, thank you, @karaswisher, thank you @davidcohen, for doing the show. I need my fans, my super fans, to thank them, for doing the show. To tweet to them. Tell them how brilliant they were, on the program. If the fans of the show let them know, what a great performance they did, I think, that’s what’s propelling the show, right now. Is that, the fans are reaching out and saying, “Hey, Chris Sacca, you did a great job.” “Hey, Chamath, you did a great job.” Hey, David Cohen, Kara Swisher, whoever, you did a great job. When, they hear that, it makes them realize, God, there’s so many people who watch the program. Now, Chris Sacca, tells me, he can’t walk through a conference, without ten people saying, “I loved your appearance on, ThisWeekIn Startups.” That’s the power of the program. The power of this program, is not me. I mean, listen, it’s a lot of things, I did to contribute, to this program.
Kirin: You sit in that chair.
Jason: I sit in this chair, very week, goddammit. Truth is, the show is, now, been taken over. The inmates are running the asylum. My fans are legion. These fans are insane. I love them for it. I love you guys, for calling people out on Twitter, saying, “Why aren’t you on the program?” Or, telling people that they did a good job, on the program. I got to tell you, that’s the thing that makes the show grow. When, you stop people and tell them. When, you see somebody who was on the show, it is your giri, it is your humble honor and duty. You are in service, of the program. It is your duty to stop them at a conference, stop them on the street. If you see, Chris Sacca, you need to yell, “ThisWeekIn Startups. I saw you on ThisWeekIn Startups. TWiST.” Just, yell at people. That’s what I’m asking my super fans, to do. I want you to yell and accost people who’ve been on the program. Say, “Why haven’t you been on the program? You have to be on the program.” Somebody, did it to, Elon Musk. Somebody, did it to, Mark Cuban. “When are you going to be on, ThisWeekIn Startups?” Please. Yell, like, mentally insane people. I need mentally insane fans, out there, who are going to yell and scream at people to be on the program and to tell them, they did a good job. Thank you, so much, Kirin Kalia.
Kirin: Can I mention one more thing? We are not going to be at this table, next friday. We are going to be in, San Francisco.
Jason: Ah. Correct. San Francisco. Jeff Clavier. Ah, oui. C’est bon. The french angel investor.
Kirin: He will be, freshly, back from Le Web.
Jason: Ah. From Le Web. C’est bon. Très bon.
Kirin: We will be excited for your fans to show up, in person, in San Francisco. Next friday.
Jason: They can get tickets at twistlive.eventbrite. If you want to come to the Jeff Clavier. It’s going to be an hour of booze and food. Hey, RocketSpace, don’t cheap out. Buy the good stuff. It’s an hour, you sit down with your glass of wine. There better be good wine. There better be some Veuve. Nice. Then, afterwards, we have a nice conversation, for an hour. Then, we all have drinks. After that, who knows. Maybe, everybody goes to Dim Sum or 5A5 Steakhouse. Who knows. Maybe, we’ll have a little after party. You have to come to the event. By the way, it’s a dollar. It’s free, basically. It’s a dollar, cause, I want to make sure people don’t RSVP, who are not coming. We’ll see you all, next time, on ThisWeekIn Startups. I’m going camping. Bye-bye.