Tech Brew Ride Home - (Bonus) Kitchen Table Ep. II - With @ceonyc

Episode Date: March 6, 2022

Chris was in town again! So we asked the great Charlie O'Donnell of Brooklyn Bridge Ventures to come over to my kitchen to talk about the tech news of the week. But Charlie also gives us his analysis and history of the New York Tech scene, and the state of venture and tech generally, coming out of these Covid years. Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. everybody, Brian here. Quick note that Chris's microphone is a little low at the beginning, but about five minutes in, I discover that and fix it. So just bear with me. You can still hear him just a little low, and it gets better quickly. Welcome everybody to the tech meme ride home

experience for Saturday, March 5th. I'm actually here live in New York with Brian, and we have a special guest today. Charlie? How you doing? Charlie O'Donnell of Brooklyn Bridge Venture. That's me. Yes. We're sitting here. We should also say that we're sitting here in my kitchen again, like we did a few months ago. And the listeners said that this was one of their favorite episodes when we did this the last time.

Wow. With Alex. Yes, with Alex. Cantorwitz. This is the shortest walk I've ever had to go for a podcast. I appreciate that. That's good. Anybody else, Park Slope who has a podcast?

I'm willing to come on. Exactly. It's, you know, it's good to be in, in actual physical meat space with people because it's useful to understand people's moods and things like that. Especially this week, there's no way we can do this without talking about the Ukraine situation. and I'm going to kick it to you, Charlie, in a second, but I'm going to tell you the way that I framed the conversation about the Ukraine stuff this week, which was this.

I feel I'm concerned that the tech industry in general is still in the 90s in the sense that if you have a social media platform, what you want to do is because of scale just run one platform for the whole world. In the same way, in the late 90s, early 2000s, if you're a hardware company or whatever, the U.S. is the dominant power.

We don't have to worry about pirates so much. Like, we can source our goods from anywhere around the world. I'm concerned that the tech world, the tech industry is not prepared for the 21st century, two decades in, where it's politically not a monoculture, where you're going to have to make choices. You're going to have to make choices in your markets, in the markets you address, in where you get your goods from, and things like that. we've seen the tech industry respond very well, I would think, so far. We can get into that to what has happened.

But the dream of the 90s might be dead in terms of it's super easy. We're an American company. We're a technology company. What do you think the events of the last two weeks have meant to the tech industry? Well, I'm not so. For sure, it's always been sort of easy for the American tech industry to export itself everywhere. China historically has been a really hard place for American companies to do business. And certain companies have decided not to be there at all.

Right. For sure. I think what we're seeing now, I think the key word that you mentioned is politically. right it's it's not market structure it's not I mean there's still some IP and you know privacy stuff or whatever but it's literally speech media levels of accept you know cultural acceptability government influence all of those types of questions and there are so many different perspectives on, you know, what, whose role it should be to influence the end product when the end product gets consumed by the masses and has a huge amount of influence, right? So for everybody who says, well, you know, Facebook isn't doing a good job of it, but then somebody else saying,

well, I don't know if we want governments doing it either, right? And then there's a whole Web3 faction that says we should just democratically vote on it with our, you know, 98% white male participation you know, kind of dows and whatever. But that's almost

the point that I'm trying to make is that that assumption of the late 90s, early 2000s of the idea that if you you can create a product, and I know that this is part of the idea of it doesn't scale to have to

change your product for every market. But do you know what I'm saying? Like the tech... Well, I agree with you. Actually, one way to think about it is the product has shifted from being more media than social media, I think. And I know we're talking about different things, because again, the idea that you can create one platform that should be able to exist in 190 countries is maybe that's number one. I think that what you're getting at is something that's on the one hand about efficiency and about creating a standard product that you can use in lots of places and make a set of assumptions about how that product will be used. And I actually would push back that there haven't been certain types of whether it's localization or adaptations to local markets or local laws or local rules or local moderation policies. You know, for example, certain products have been banned in France for a long time. You know, any Nazi paraphernalia, for example.

So there are and have become, I think, increasingly sophisticated ways that those products do adapt to local conditions. on the ground. I think maybe what you're pointing to some degree is the level of like maybe whether these things and the rules apply on a macro or micro level. Specifically, you know, when it comes to the type of moderation that exists, you know, Facebook might, you know, I guess in this case Facebook has been banned in Russia, WhatsApp and Instagram are still operating there. However, in other places, you know, Twitter will just pull out altogether because the level of of moderation or censorship, depending on which side

of the moderation in your feeling, I suppose, is not worth it for them or it's too difficult. In other words, the cost to bear of actually trying to discern between, or to be in the fog of war, that these systems are not really set up for that, to do it in real time, to evaluate what's good and what's not, and then to get on the wrong side of the government

or something else. And so I do think that tech companies in particular have been feeling more pressure than certainly several years ago, when it was really just about adoption. and it was creating new market opportunities, growth. You think about what happened to Twitter in India, where the government was either threatening to or did arrest people who worked there. That is when you really need the rubber road.

That is kind of my point is, are we reaching a world where people will have to make a choice, where you have to make the choice that are you... Sorry, can you be specific about the people? Which people? choices. I'm saying... ...major tech platforms. Tech execs. Are you a platform that is from a liberal democratic society, or are you a neutral around the world serving everybody?

Is that what is changing, and is the tech industry ready for that? If that were the case, if you had to... I'm talking... right? I'm talking... Do you want to be responsible for what happens on your platform as opposed to sort of being a neutral you know, like, you know, desert someplace where things happen and you might own the land, but you take no responsibility for what happens there.

And the reason why I'm bringing it up is because I think that Telegram is one of the few kind of holdouts that's still holding on to this idea that, you know, we're going to let anything happen on the platform. We're only going to remove things where there are actual threats of violence or, you know, their list is starting to grow as pressure has amounted on them. But for mainstream platforms, Porn's, you know, where, you know, they're getting talked about on, you know, morning shows and are part of the...

But that's what I'm saying is that, like, is that now this is, the rubber is hitting the road where choices are going to have to be made. Because, look, if Exxon isn't going to do business in Russia, if Coke hasn't yet several times, but if Coke did, then, like, you see what I'm saying, like, if you are a telegram, like, and we can get in the crypto stuff, soon too but like choices like this idea again as I framed it of the early 90s 2000s where the West is ascendant being free markets are ascendant and there aren't these power blocks around the world if you're a company that is as big as a Google a Facebook or an Apple could you have to make a choice where we represent a certain set of values politically and we won't do business with people that don't represent that I'm a little bit cynical about that I don't think that you know the

companies that have shut down or pulling out of Russia at the moment given the price of the ruble and the economic situation in those countries you think they're losing a lot of money you think you think you think Russia is a great place to do business right now. I did that on Friday. The big five platforms are losing one to two percent of their revenue if they set down money. Right. It is

a lot of these decisions are getting made because they are PR and comps decisions. I'm not even going to say they're politically unpopular because to be honest, most of the, I mean, you use the term liberal Democratic.

I don't think the average tech executive is liberal? Let me, let me, let me, let me specify, I'm saying, I'm saying liberal in the broader from the 18th century, from the French Revolution to today. Okay. I'm not saying, I'm saying democratic, so let's, let's, let's, let's say Western. Okay.

Okay, so the Western ideal of democracy, free markets, those sorts of things. Yeah, no, they're not making a moral stand. I don't think that they are. Because at this point, who could still be doing business there? And I hate to use this term. People talk about canceling. Is Russia getting canceled? This is the definition of canceling.

This is the definition of canceling. Because no one wants to be the last person. If Coke stops doing business in Russia tomorrow, Pepsi's going to have to. That's what canceling is. It's like we can't be the last people there. You're only going to be able to. get Tab and R.C. Cola over there. No, but it is, I think it's a lot of, you know, window dressing and, you know, for the most part, most of these companies are absolutely willing to hold their

nose and do business in a place if it makes them money, and it makes their shareholder money, in a way that does not get egg on their face. Now, I think what has changed is the at which egg can get on your face and the speed at which what's really going on in places, right? Everything from, you know, real sweat shops to digital sweatshops and, you know, moderation places, right? The speed in which that can bubble up and go viral and all has really, really shifted the game. Because, you know, the major economic players is, you know, the major economic players is, you know, in our country have been doing business overseas in ways that most people will probably not be comfortable with for years and years and years. That is that that's not new.

I think my original question is is you no longer get away of that maybe? Yeah. Is the tech industry ready for a situation where you have to create if you create a TikTok tomorrow, a new TikTok that it has to be different if you if you are Apple, You can't assume that you can just always go to wherever the cheapest labor is because there will be blocks coming where, like, back in the day, you could sell to half the world, but you couldn't sell to this half of the world.

We had to open a back door for somebody. The dream of the tech industry, to a certain degree, for the last 25 years is we will serve all of humanity. And we're going to bring them all online and we're going to do all this stuff. Regardless of what government you're under. Now, okay, what's the nuance that's got to come in and are people prepared for that? If Apple can never go back to Russia, if Apple will be back in Russia at some point. Eventually, well, let's hope. Let's hope because that will mean that Putin will be gone.

Chris says, yes, oh, go. All right, I'm sorry, I inserted something. Go ahead. I think the extent to which governments impact the economy is something that people didn't, may not have been prepared for in the sense that like, yeah, your market's free-ish, except that, you know, everything from small-time grease payments to, you have to agree for this approval, to, you have competitors in some of these local countries that are so. so tied in to the local politics as to be an arm of the government in some way, right? And so all of that, it's not just like, you know, here we have pretty good separation, right? Where you're sort of like, okay, it's pretty clear what the law set is. We got a team of lawyers here.

They can craft us a license to do business and a way of doing business that we're pretty sure we're not going to get interfered with in the government. And, you know, we just assumed that, because it's all online, it's all ones and zeros or whatever, that, like, nobody can get in our way of doing business over here. And when, like, when the government can shut down parts of the internet, right? Like, you're not, you are dependent on other governments for permission to deliver your services. I mean, one question I would have, which I don't know the answer is, If you're in one of these places where the government regularly blocks stuff and you're aware that you're not getting the whole story,

is like what percentage of Russian internet users do you think actively use a VPN? I would, a better question would be in Iran where they have been blocked for multiple years for half a decade at this point. Yeah. Yeah. I mean, I mean, I have no idea like it's sort of very easy for us. going after though, right? Because you have to, I was thinking about this, if, for example, you only had a voice assistant to watch television, you have to first have an imagination or at least some exposure to what is even possible to be out there to ask for. And so you might have

VPN, but if the only thing that you're really looking to get is Netflix, then you're not actually searching for specific news or new stories because the seed of those ideas were never planted. So you wouldn't even know to ask the question. Right, and given the fact that everybody's social network experience a sort of a reflection of their own, you know, it's... Right. Whatever they're originally exposed to. I mean, like, think about, like, the thing that, like, kind of where maybe we could dig this a little bit, Brian, is to reflect a bit on, and I think what you're getting at implicitly is a sense for where some of us in the tech world sort of started from, some of those first principles or ideas. And the fact that, you know, for a very long time, you know, the internet technology was a space that was a green field because so few people understood it.

You know, we were able to go out there and create brand new things sort of out of, you know, whole cloth because the rest of the world, or much of the rest of the world, was preoccupied with, you know, conventional marketplaces and what was happening. And so, you know, whether you want to go all the way back to the well or other early online communities, there was a sense, you know, of possibility, of pioneerism, of, you know, sort of this western expanse, just like, you know, that was the cyberspace back then that you could expand into and bring a whole, well, at least what we thought at the time, was a new set of values, a new set of inclusivity or opportunity of homesteading. And what seems to have happened over the last 20 years, you know, Charlie, we were talking about how, you and I first met back in 2006 or seven, you know, at Citizen Space, which was the first co-working space in San Francisco and that's the world, you know, we thought of doing things differently. We put our

entire business operation online. We let everyone see how much money we were losing to run that business in the hope that it would inspire other people to build their own co-working spaces. That's where we work out their money-losing business model from. Yeah, sure. Oh, this is the way to do it. They took it to the logical extreme. They really got it good, you know, whereas, like, we got out at the right time, maybe. But nonetheless, like, there was a certain idealism,

which I think is what Brian is talking about, that infused a lot of our decisions. I think you bring up a perspective that I think tech always has and always gets proven wrong on, in that the, the, there's this idea of like tech will be the great equalizer, tech will be the great democratizer. I mean, you use the analogy and you said this is like pioneering and going with us, right? Well, I mean, actually, when you take that analogy, right, when we were sort of pioneering, like,

that wasn't exactly empty land. Well, okay. So actually, this is a very, like, this is exactly where I wanted to go because the point is you're a weirdo coming out to the Bay Area back then because you were from New York. Right. And New York is very close to Europe in the sense that, you know, the Mayflower came over there first and it took quite a, you know, a couple hundred years perhaps for those folks to then make their way out to, you know, California, you know, blow up some shit in the meanwhile.

But like, I guess the point is California and the Bay Area, Silicon Valley has kind of offered this, this hope or this promise, this source of optimism. Right. Because it wasn't so close to prior. establishments that went back for thousands of years in terms of human culture. And so, you know, being on the edge of where humanity is going, perhaps, because things haven't really been established yet in the same pattern as what came before, affords us that sense of optimism. And so when I'm hearing from you, when you're cynicism and skepticism is a very East Coast, I grew up

on the East Coast. I'm from New Hampshire. Like, is a kind of East Coast mentality about, well, look, guys, like, this is all going to go to shit anyways. So, like, you know, let's just like make some money and get out while we can, or something along those lines, as opposed to coming from a generative place where it's like, actually, maybe this time can be different. And so the holding onto, you know, what is that naive optimism is, I think, what allows us to do the things we do.

I think it's actually funny coming from you, and I'd love to hear your perspective on this as a VC. Like, you have to maintain that kind of optimism and hope about things being built and created that can be, you know, useful, important and good. I don't know if I agree with that, actually. Okay, please. Because I think it's the optimism.

I mean, to some extent, there's a certain optimism about a small team, perhaps, to say, you know, it is possible that these three people around a kitchen table can build a company that one day employs 10,000 people. Sure. Right. Is that optimistic by its nature? Sure, I don't know. I've certainly never thought about it that way. Like, what else would motivate them? I mean, I suppose there's just a profit of interest and, you know, having things. But, like, you know, I mean, if you listen to any...

Working in a big company sucks, and they're in love with a problem, and they can't stop thinking about it. And they, there's no way they... They don't even understand the idea of not doing it. So do you think that they can be pessimistic and believe that maybe they won't succeed and still pursue it with the same level of... Oh, yes. Really? Yeah, yeah, yeah. Yeah, and it's not about...

Just because it's interesting to work on. And it's not about a pessimism. Okay, so I had a conversation with another VC, and this person was sort of feeling the stress of the job being responsible for other people's money and all that sort of stuff, right? And he was feeling it. And he said, you know, you've always come off as kind of level-headed or whatever. Like, how do you bear the responsibility and all of that sort of stuff?

And I said, well, first of all, I think that the fact that I don't stress about it comes from the fact that I admit I might not be good at this. The possibility exists that I am not a good VC. See, what I'm hearing you say, that's real. It's realism. Yeah. So what we're talking about is realism. It's realism, right? I don't think of realism is pessimism.

Yeah. Interesting. Right. And so, you know, when I look at the, you know, somebody, building some social network that connect the world, right? I think it's, you know, optimism is like, this will be great. We'll just get everybody connected and all will be good, right? And to me, pessimism is like, what a stupid idea, that'll never happen, right?

And to me, realism is like connecting the world is challenging. And by the way, there's a whole shitload of, you know, stumbling blocks that you should have real answers to, right? What do you do if somebody writes, you know, suck on every Wikipedia page? Like, there's just because somebody's going to do that, right? And you just have to sort of build in those kind of mechanisms. And what I see from a lot of these platforms is that they were largely built without thinking about what it would be like if somebody started abusing.

other people in their platform. Part of the problem though is the ignorance and the privilege of not having to think of all those things because those things hadn't been experienced by the people who were building these things. Exactly, exactly, exactly, for sure. Yeah. So maybe, again, trying to bring this back around both to Brian's point and also to consider that this is the first, well, actually I should be very clear, this is not the first time where there's been a war or a warlike context that's happened in the era of social media.

You know, whether you want to think about the Arab Spring or you want to think about what happened in Syria, or you want to think about what happened in Syria, you want to to think about what happened in Africa. Like, there's wars going on all the time. Right. This seems to be the first time. Some of whom we care about, some of whom we... Exactly. And for any number of reasons, we care about this one, particularly, especially as it relates

to the number of context or apparent connections between what goes on in Russia and the rest of the world, as connected to the, through the financial market, through oil, through resources that we need for, you know, our comfortable lifestyles, I suppose. And it is shocking to me and alarming to me, going back to your point about maybe the intersection of government and government control over how or if some of these companies are able to operate in those places, that there can just be a wholesale sort of removal and isolation of this fairly large country from the rest of the world, from the swift banking system and from the rest. So to see that and to observe that does feel like we have crossed a, God, what is the name of the thing? Threshold? Rubicon. Thank you.

A Rubicon where, and this is the last thing I'll say about this, is that anybody who, okay, sorry, one and a half things, that starts the next TikTok or begins their next company now has seen this possibility and may need to have people employed who are able to adapt and deal with this type of. circumstance. And the thing that I was going to say before when I got this whole thing going was if I were to start a Twitter account today, the influences or the accounts that I would follow are quite different than the ones that any of us here having this conversation would be exposed to. And so we have the privilege of growing up with these services and connecting to a wide plurality of different views and perspectives. And it's not even, you know, as diverse as it could be but nonetheless more so than someone who starts today and attempts to try to understand what's what's going on in the world from anyone beyond their echo chamber

well now the systems are just reinforcing those echo chambers even more so and now they're pushed to connect to brands right influencers and all that sort of stuff whereas you know yeah when we started like probably 500 or 1,000 people in follow wise before ever followed anything was like a brand or a company Like lame, why do you want advertising on these things? Yeah, yeah. Can I bring it to crypto specifically? Yeah, sure.

Speaking of unbridled optimism or realism or realism. Or naivete, all the above. How do you feel about the idea? Now, of course, if you're a Coinbase, if you're a business that exists in a regulated world, you have to... Coutout the regulations. That's what you do. otherwise you go to jail.

Especially the financial markets. Now, there's a two part here, and you know the second part, Chris, which is, isn't this the perfect use case for crypto? So what's going on with that? But number one, how do you feel morally about the idea that crypto folks are like, okay, you can ban certain accounts because your coinbase or your, the NFTs, you can, but, but morally the idea that this is crypto writ large, which is you can't ban my account even if I'm a bad actor. And this is coming to the fore

right now. How do you feel about that coming to the fore? Are you still, are you still on board with the dream of crypto? I guess I would, I would clarify some things, you know, like, If I have Fiat USD, I mean, I suppose, yes, you could maybe ban a set of serial numbers, you know, for the dollars that I've, you know, laundered or something. But for the most part, if I have, you know, fiat currency, I can use that as I, as I like. So the property that allows crypto to be used in a similar way, like, is no different than that. So if you want to ban the use of crypto for those purposes, then you need to ban money. And money is a concept. And so concepts are very hard to ban.

Yeah, but fiat accounts can be frozen. Accounts, yes. But I'm making... He's talking about cash, like literally... And I want to actually circle back to something else you said, right, where you're talking about custodial accounts, like Coinbase, that are holding on behalf of their users, those resources and that crypto. Just like, you know, Iranian NFT owners who use OpenC because of sanctions,

accounts that have NFTs on OpenC have been deleted. And so suddenly those NFTs and that crypto is gone, right? Same way, you know, if you had a bank account or something and, you know, it was found to be connected to the Iranian government or whatever or sanctions touched it, then those assets could either be obtained or confiscated or what have you. So the similar properties are still there. I think that this point that you make about, you know, censorship-resistant money, i.e. crypto, might be better to evaluate at a smaller,

individualized level as opposed to what happens when crypto interacts with the conventional banking system. And so if I have my, you know, Tessor wallet or my hardware wallet, and I've got my crypto on there, and the war goes on for six months, and then, you know, there's a ceasefire or something, and now we want to rebuild. If I've stored and kept that crypto and I come back into the marketplace, that money was never confiscated, and it was separate from the value. And it was separate from the value, the devaluing of the ruble. It's sovereignty. It's your control of your... So it's, you know, it's my mattress full of, you know, dollar bills that is now much smaller and portable, and I can still interact with the banking system someplace else, as long as I

stay outside of the conventional financial marketplace. Now, maybe that's not realistic and not plausible, but for those people who want that level of control, this technology does enable that. And so I would say that the jury is out in terms of how this is actually going to play out longer term. Although I'd argue that in most war-torn places, you could also probably show up with a fistful of dollars and get a ride out of the country or a private plane. I'm not so sure it's that different. It may not be, but I do think that there's, I guess maybe this is the question. You know, like it seems like if I were, you know, stuck in the Ukraine or Russia right now, I would be careful about, you know, how many people can actually accept my crypto.

Can I ask that question? Because this is what the promise of crypto was. Satoshi 2009, if your country gets cut off... Yeah, from the blockchain. From the entire world banking system, you can still leave the country with a thumb drive. Right. And you can...

So, I don't... Listen, jury's still out. We've seen that crypto usage in Russia has gone down percentage-wise based on again. These are marketplaces that would, so we don't know what other marketplaces, etc., etc. What happens if this is the actual definitional reason for crypto to get your wealth out of a country that the currency is going to toilet paper? But you can't. What? Then what? Then what? And then the, and, and, and, and, and, and, And by the way, crypto can still be something else,

but the original dream of crypto, would that mean it's dead? Well, when you're talking about crypto, though, it's hard to pull apart the discussion of crypto from the companies, the wallets, the infrastructure around it. If you're just talking about, like, you know, somebody in a thumb drive, right? Yeah, you always walk around with your thumb drive, right?

Part of the issue is the biggest supporter of it, both functionally championing-wise and all that sort of stuff, want to play both sides. Coinbase wanted the IPO on a traditional stock market and all of this sort of stuff, right? You talk about, like, I mean, it's funny because I just saw, maybe it wasn't as recently as I'm thinking about it, like the Series B for Life Pier. And I was like, wait, Series B, like, I thought that the original. construction of that company was ICO and an organization and you explain what that what that is oh so live here is a video transcoding network so rather

going going or something or well rather than going like to Adobe servers to split your video feed into you know mobile and okay and all of this sort of stuff there was some distributed aspect to it it's a New York based company it's run by this guy, Doug, who's in Brooklyn and runs, and I run into him in different races and stuff like that. Nice guy. And I wound up, and also a Mets fan. That's actually I held at first. We found him on hashtag, thank you very much, Chris, hashtag Mets Twitter. But anyway, I said, hey, I was surprised to see a conventional funding round into like a corporate structure. And his response was some version of, and I'm maybe misquoting, so I'm not the expert on this, but, you know, enterprise customers wanted some, you know, tangible corporate entity in terms of service and all this sort of stuff, right?

So the bigger point is until you have whole systems from top to bottom, full stack, operating. Right, completely integrated, right? You are going to have to play with the rules of the most conventional lowest common denominator, basically. The CIA, the CTO, the CTO is going to ask for those things. Let me give you a devil's advocate argument here, which is, if I'm a crypto maximalist, I want that to happen. Which part? Okay. If I always use the example of my mom, if my mom, I never thought she'd use Facebook,

or an iPhone or whatever. If you... You were wrong on both counts. I was wrong on both counts. If you want crypto to take over the world, it's not going... This is my opinion, to take over the world in the maximalist libertarian sense

of it's just fucking anarchy and if your stuff gets stolen, you can't get it back. It's got to get plugged into everything else. Now, it can get plugged in in a different way. I'm not saying that you have to conform, you have to sell out you don't have to do that but if I were a crypto maximalist I would want some way and and while we plug into the systems we can change them wait I'm sorry you

didn't finish what you were saying you would want I would want crypto to plug into systems existing systems to plug into or to replace both slowly yeah plug in and slowly place, right? So that with the things that are better about crypto can replace the things in the legacy systems that we don't like. What I don't like about crypto maximalism is that it is just burn it all down. But this is part of the both naivete and maybe it's a kind of imperialist optimism that wants to replace the previous system because it's too hard to understand the logic of the previous system. as a newcomer. So you look backwards in time. You're like, how the hell did this shit get this way? I just realized what I described was communism versus social democracy as it exists in Europe. Like, you know, as opposed to burn down the government. It's, we're going to get into the government through democratic means and then put socialism in place. Okay. Sorry.

No, but I think it's, you make a really good point, though. It's, it's, it's, the idea that to disrupt you have to fully understand why the other system and why it's set up that way, it's a big reason why I see startups fail. I mean, I remember this one startup that pitched me that was disrupting Blackboard in the classroom. And Blackboard is the worst software anybody's ever made. Hopefully they're not sponsoring the podcast. I don't think they are. I haven't heard them.

But teachers hate it, students hate it, whatever. But it's very popular. Well, it's everywhere, right? It is powering more and more aspects of the university, all sort of stuff. And this person said, we're going to make this much better classroom software. And I was like, I don't doubt that you can make a better classroom software, but you have to do that while understanding why it is like that. Have you ever talked to the IT person who works in a university?

because they spend most of their day resetting the accounts of tenured professors who forgot their password and they clock out at five and all of that sort of stuff. The last thing, because the entrepreneur had made this comment to me, once all the professors start using it, they will be forced to rip out their blackboard. And I was like, no, no, they're not. Those contingencies don't work that way. No, because that, you know, the dean is going to come to them. They're going to say, well, everybody seems to be using this.

What do you think? and they're going to kick the tires on. They go, well, it's full of security holes. And they're like, oh, oh, well, security holes. That's, can't deal with that. Okay, we're going to stick a blackboard and we know in love and all of that sort of stuff, right? And so you really need to understand the ins and outs of the systems. Like, I think there are huge opportunities for something crypto-like and distributed

and all of this sort of stuff in our legal system and case system and all of this sort of stuff, right? But, like, I was just involved in, in a settlement, in a real estate transaction, separate from what I do. And the point of failure of bringing technology into this was it, thankfully, you can, as of June 30th, can't notarize a document online in New York. It's not legal. It's not illegal. And so it's like, we're going to have ownership represented by coins and whatever.

People are still asking me for wet ink signatures. It's the underpants gnomes thing. It's step A and then step C, profit. Try and open up a bank account without wet ink, right? Why? Now, by the way, we can get there. And that's why I like what the energy around crypto is, is like that's the energy of changing that bullshit yeah but most of the people that I see in those systems can't

explain to you why anybody asked for wedding or can't just even in a cynical way saying well somebody asked for wet ink because the person above them was asked for wedding and all those are stuff and here's who I need to lobby and I need to talk to this person and it's this part of the New York State you know commercial code and and here's the strings I need to pull go to front and and it Listen, let's transition into talking about you. When you talk to people that say putting it on the blockchain is better, can they explain that? They can explain anecdotes and stories what a world may be like if, which...

Usually starts with imagine if. Imagine if everyone adopted this. Imagine a world. Well, okay, well, why is the first person, what is the second person, you know, whatever. Then you start to bring up the realism. I was going to say this sounds like realism. Like, no, go with me. My New York realism.

But explain to me, you know, how does X, Y, and Z, how do you overcome hurdle X, Y, and Z? I'm trying to be a jerk. I'm not trying to be old stodgy East Coast VC that can't see the bigger picture, but like, you know, and it's not trying to be a jerk. It's sort of like you can't just shine. me. You can't just, we're going to sprinkle magic dust on this. Here's the problem, sprinkle magic

dust, and then it all works out. But what this is bringing up again, coming from now probably the Kool-Aid West Coast perspective, is that actually both of these perspectives are incredibly valuable and useful. And you actually need them to be somewhat in competition.

Because everything that you just described about your skepticism asking the questions, like, okay, yes, if all a set of classes, people do this new behavior, yes, it will be great and it will enable these things. However, convince me that the first person and the second person are going to do it. It's like, well, I'm not really sure, but just imagine like, you know, the law. And so like the optimist does need to be there to have that sort of vision about how things

possibly could happen, but then you need that realism that steps through things, which goes back to your point about like when I was saying, well, don't, don't these, you know, founders or start-upers like need to be optimistic about their vision of the future. And you said, well, I don't know if that's really true. I think your point actually is that they need to be in love with the problem because everything I just said is actually enumerating the different steps of the problem that need to be addressed in order to actually to have a solution. Sure.

As opposed to a you burn it all down, start over, and I just want to have all the same problems that everyone else before me had and end up in the exact same place or fail, which is what happens to most startups because they don't have respect for those who came before. They have a certain level of hubris that actually denies them the wisdom of having, compassion or empathy or just understanding for everyone else who also tried to solve a similar problem, but perhaps at a different set of users or a different context or in a different time period or whatever. So to bring this back momentarily to the crypto thing, what I'm very curious to see is whether or not this will actually be a set of good adverse scenarios for crypto that they need to actually now design for and against. Because I think that the previous purpose that you were talking about, the reason why crypto is there and does this undermine the whole

case, you know, was really against deflationary contexts where governments would print, you know, millions of, you know, pesos or dollars or whatever it was and cause those people who had been holding, you know, those currencies to basically go to zero. And so by using crypto and math, they could say, well, actually, we're going to have a very, you know, regimented form of inflation that no person who is either emotional or, you know, being, you know, attacked or whatever it is, you know, by people in the streets can't actually change or fuck with monetary. policy the way that it's happened before. So this is the first time that crypto is really going through or being used in a war in this way. So it actually... In the way that in theory we were sold on.

Or at least one of the use cases. So some coins may persist and actually get better and stronger and they will design for those use cases. Yeah, it's true. We're a weekend. So it shouldn't be, yeah. And by the way, what I thought when I was thinking about this earlier today is like, oh, is it because crypto or Bitcoin hasn't gone to $100,000? Is that why I don't think it's working? I don't know that it's not working yet. Right. In terms of getting your money out of Russia.

I mean, if I have Bitcoin and not rubles, I know. I'm probably, you know. I don't know that it's not working in that use case yet. Can you buy javelins with crypto? I bet you can. I mean, like, in theory, I'm sure the Germans will sell them to you. I'm curious about how all the crypto money that winds up going to Ukraine and other places. Yeah.

Right. Like, what are the off-ramps? Well, yeah. Yeah. Like, like, like, suitcases of, like, you know,

hardware ledgers, like hardware wallets? But I mean, okay, but that is actually... I know. The use case, it's not suitcases of cash.

It is... The suitcase of bits. It's... Some little cat... Thumb drive. Cat thumb drive. I want to talk about you, Charlie,

and Brooklyn Bridge ventures and New York City. And we can end up with some other stuff. too but do you invest heavily in crypto and Web 3 what's your what's your thesis on that for investment I'm a generalist and so I don't have well I have no shortage of opinions from an investment standpoint I am looking to hear the opinions of the people that pitch me right so I am not for or against whole

categories of things because you name the category and there are really good ideas in the category, and really awful ideas in the category, unworkable ideas. Ideas that would be good if done by different people, right? So I'm open to hearing all sorts of web theory and crypto ideas. What that means is, and anyone who's pitched me will attest to this, is I'm gonna ask some real questions, right?

And that doesn't matter, the category. I mean, for example, and it's just on my mind because I just came from home and I have a small little baby at home and we're finally using one of my portfolio companies, assembly diapers, reusable diapers. And it was a company that had pitched me and millennial parents care about the environment and all this or stuff. First question in the meeting. I said, said to the founder, tell me about the poop in the washing machine. That's because like that's the thing. That would be my question.

Right. That's the first thing that a customer is not to give me your business plan or tell me about the poop in the washing machine. It's like, I'm sure this is a great product if it works. Right, right. And, you know, so and the founder's answer was great. And she said, do you have little kids in the building? And I said, yes.

She said, there's already poop in the washing machine. She said, do you have anybody older in the building? She said, yes, there's already poop in the washing machine. What is the grossest thing you put in the washing machine? I said, my ice hockey stuff. And she goes, that's pretty gross, right? She's like, yeah, it gets clean, right? I said, yeah, it does get clean.

And so, yeah, she's like, that's how washing machine work. There's a great answer to that. This is a total aside, but I know for sure that my parents got through me and my brother without throwing him out. Right, no disposable diapers. It was all washable. We're late 70s kids, right? Yeah, so it's not just millennials. Yeah, well, there you go.

Yeah. Let me ask you this. A company pitched me last week, and they want to do something with NFTs, I won't go too far into it because I don't want to blow up the spot. And I was like, okay, but if NFTs don't happen in two years, three years, can we still do it? Right. Like, do we have to build it around this? Do you find yourself doing that where someone that pitches you in a Web3 way, and you're like, great, this is a good idea, and you're doing it in a Web 3 way.

But what if it wasn't? Well, so this is the difference between taking each company and evaluating it individually versus taking a portfolio risk. And I'm actually more of a portfolio thinker. I mean, my financial background is I started out at the General Motors Pension Fund. VCs used to pitch me. how I met the guys at Union Square Ventures. Brad and Fred came in with their pitch for the Union Square Ventures Fund, to which the first time I heard it before I even met them was

startups in New York, that seems like a terrifically stupid idea. What year was that? 2004. Yeah, there you go. At the time, it kind of was. Yeah, exactly. Well, they had already made their money a little bit, but yeah, yeah, yeah. And so, you know, so in that kind of case, I think there's a kind of, I think there's a little bit.

there's totally room to say, hey, you know, I should have a bet in this space that, you know, should this stuff take off? You know, it might be worth having a play there. Now, I don't necessarily go looking for that kind of stuff, but I would be lying if I said that there haven't been certain deals here and there where it's like, you know what, I really like this team and I feel like I should have something in the space. So like that's what kind of tipped me. But I do like scenarios where there's a good answer to that. So for example, like I'm invested in a company called Infinite Objects.

And Infinite Objects is a way to print video. That's the way we think about it. And it started out as like art and DIY. It's these frames where you permanently flash a single video onto it. So it's not a, you know, electronic frame. the thing you're giving is the video itself, right? It's like somebody finds some long-lost image of your parents' wedding, they give you the thing or grandparents or whatever,

and you're not like, oh, this is a nice frame. It's the photo, and it's the whole thing. That's the gift, right? People started using it to upload their NFTs. I was going to say they started pre-NFTs. Right, right. They started pre-Crypto. And so people started putting their NFTs in there,

which creates a whole image, like, do you own the, file and what if you sold the NFT and you still have the image and all this for stuff. We actually have done some, a business deal with Dapper and their, you know, small investor in us. And we're looking for more and more ways to work together. But the thing I like about that company, and I sent it to the founders the other day, is like, the price of crypto and the price of NFTs could crash. and we could still be valuable because I actually do believe in the collectibles market.

I think the concept of something like a top shot is really cool. And it generated so much young fan engagement at all ages, right? Whether it's NFTs or not, it's... Right, right. And look, speculators ruin a lot of that sort of stuff much in the same way they did with baseball cards

when I was little, and if you look at the market for baseball cards, whatever. And it's kind of funny, actually. My box is useless baseball cards. My Frank Thomas rookie card isn't as much as I thought it would be. It's because we all have one of them. We all have a Frank Thomas rookie card. That's the 1990 extended set, right?

The Fleer. Fleer. Yeah. Yeah. So, man, you know, I probably somewhere in my parents' old house is still getting a Beckett subscription. We used to go in the seventh grade and we would sit there when Beckett would come out and we'd sit there in seventh grade and just look up all your cards.

That was open C at the day. Do that Phil Planteer rookie, never take off. Never took off. But, you know, but that's a scenario whereby I could have a bet where that company wins and the most expensive stuff sold on their platform are NFTs that are minted and limited edition because of some, your team wins the World Series or whatever, and they're like 200 bucks. And that's the cost of it. You know, it might go up in value or whatever, but like you don't care because you have this awesome thing that was one of only a thousand made and you're a big fan of whatever team and you have it and exists in your real world and you love it and you're not investing because you're expecting it to get rich.

I think that's fine. I think that's great and I think companies should realize that that's a possibility for this stuff. that's an important consideration. What if, you know, what if this all doesn't go to the moon? What does a post crash scenario look like? Mooning is different than sustainable business. Right. That's a weird thing to say.

Quick aside, the reason I got a baseball card is because I bought a Ken Griffey Jr. rookie card. And when I took it home, I realized it wasn't in mint condition. there's a little tip. So I spent, what, was it, $200 at the time? I still have it opened my 89 upper deck. There you go, 89 upper deck. So, Charlie, you're a legend here in the New York City. I'm not even a legend in my house.

Because, look, from Brad and, you, like, you were at first round. You were, like. Do you want to give the quick two minute? Yeah, do it. Okay. So, born and raised in Brooklyn. Union Square in first round. I can never remember Union Square.

That's on their, that's on them. But, and yeah, Wall Street loomed large. And that's where smart people, you know, it's funny. I grew up in Bensonhurst in Brooklyn. At the time, it was the largest Italian neighborhood in the five boroughs. And so my

version of Wall Street and what successful Wall Street types look like was kind of something out of Wolf of Wall Street. There's just these like bros that would hop on the train and sell stocks and whatever. But that's where smart hustling people went to go make money. And my godfather had given me a tiny little sliver of IBM stock when I was born. So as a little kid, I knew the stock market exists.

IBM, they would always mention it. because it was a big company at the time, right? And so I knew up was better, down was worse. And so I wound up going into finance, and I wound up working at the General Motors Pension Fund through a high school internship of all things. Again, I got to ask what year if you're willing to say? Yeah, so 1997.

There you go. Okay. And so I worked all four years throughout college because I went to Fordham, and the GM pension fund was, on 59th and 5th where the Apple store is now, but there used to be a hula hands there on the corner. They're a little garden patio. And when I graduated in 2001,

the one group where there happened to be an opening was the venture capital and private equity group. And so not knowing really anything about how either of those two things worked. But being a finance student during the late 90s who definitely bought internet stocks and felt really smart when they went up and felt really stupid when they went down. Like I was into tech. Small aside, I invited Kara Swisher to come talk at my college back in, I'm going to say like 98 or 99 or something like that. Because I was a big fan of her Boomtown column.

And she showed up. There was an embarrassingly small audience. Because this is pre-Facebook, right? So it was actually hard. I was like, fucking flyering the campus, right? And it was like a room for like 200 people. And they were like, this tech journalist that I read every day and everyone is like, no, we don't read about tech music. I was so excited.

I thought I was going to pack the room, right? There had to be like, if there were 15 people. It was a lot. I felt so stupid. She was so cool about it. She did her thing. And, you know, the whole walk back to the Metro North Stop. Fordham I was like super embarrassed and she's like well it's fine it's it I don't care you know

it's great to meet you and whatever but yeah so anyway go to GM wound up in the venture capital group VCs would pitch me and I spent a lot of time in the four years I was at GM to be to be specific pitching you for money right because no one ever thinks about the money that goes into VC funds they have to raise the capital that they deploy from institutions from LPs and all of this sort of stuff right and and I mean, when you say VCs were pitching you, do you mean that these, I guess, Fred Wilson is pitching him apparently? Yeah, like, Excel came in. Okay, I guess like I'm trying to understand, like, who the VCs were back then, what the different areas they were investing in.

Right. And whether, or like what proportion of that might have been tech VCs? Yeah. So. What was their pitch? Right. So short history of VC, VCC used to be more than just tech, right? If you look in the 80s, it was like consumer brands.

It's like V.C.'s new. Vs has been around for a long time. Right. So actually, one of my favorite conversations, oh man, I'm like totally blanking his name now, which I, is awful. But this investor, is it Jerry Gallagher? That might be his name. And he passed away for years ago. Jerry Kalana. No, no, no, no, no. I don't think of it. I was going to say.

Maybe it'll come to me, but he was an investor. at Oak and he was a retail VC, like literally sporting goods stores. And, you know, like, Gailin's sporting goods. And a few others.

And I was doing this project on like consumer investing in like VC and private equity and all that sort of stuff. And he had made a whole bunch of money investing in these startup retailers, right? What basically happened is when the late 90s

came if you were not investing in dot coms you underperformed relative to everybody else right so either you retired because you were like this is bullshit I can't deal with this or you hopped on exactly right and then it's happening there are definitely people who are exiting stage left because they're like this crypto stuff I do not have the time to get to know the I can't be I can't compete with some college kid who's not going to any classes you know raising virtual horses the whole day or whatever right And so, yeah, everybody went to tech. And then when the crash came, it was actually really interesting because a lot of those people that had made a bunch of money in the late 90s didn't continue.

And so what you wound up with, it was really interesting situations like in 2004, Excel comes back to market with their new fund. Now, their 94-95 vintage year fund was like a 24X returning fund. fund, which like in the fund world, it's just like shouldn't happen, right? That's 24X on the whole portfolio. Have you been reading that new book from What's His Face? I interviewed him for the internet history podcast. Anyway, there's a new history of VC. Sorry. Is it a Josh Leonard book? No, it's called the power law. I can't remember the guy's name, but it. Oh, this is the guy that was being obnoxious to, uh... I'm sure he's obnoxious. I don't know. I can't speak to that. But anyway, sorry. Let me, let me tell you one of the things that I took from that

is, and I meant to highlight it on the page, but like, so imagine that in 1999, venture in the United States raised $130 billion, and that was a record. Yeah. And then in 2003, that year they raised $9 billion. Oh, yeah, I'm not surprised. Wow. Right. Well, because when you think about it like so VCs historically used to raise money every four years like clockwork right there were VC funds that raised two funds in 99 I'm pretty sure like Red Point was one of the funds to two funds in 99 because if you deployed it in January the speed and people talk about how fast things are moving now the speed in which how things were moving was even faster a company could go

from a business plan to an IPO. To IPO. In 18 months, nine months. Easily. Easily. That was happening, right? So anyway, so what you wound up happening is these really interesting situations like Excel comes back to market in 2004 and Blue Chip fund historically, right?

90s great success. Last two funds kind of dogs, right? There was a 98 fund that kind of underperform a 2000 fund that like didn't look great. basically all new team. I mean there were some people that were sort of carryovers, but it was unclear they'd already made their money, how much time, right? So you have folks like Theresa Ranzetta who relatively new, right? But you were counting on, maybe done a handful of deals. The deals looked interesting, but you just didn't know. And it becomes this like, it's sort of like the Yankees rooting for the pinstripes thing.

like is it the fun is it the way the the the fund does business or is it can we identify that these people are actually smarter than other people which I was found is a really hard bet to swallow and I don't know with some funds it does seem to be the fund right Sequoia's had persistent top quartile returns for 45 years right but like you would have said that a Kleiner in the late 90s and that's not that's a you know not the same fund it was at the time so anyway So these VCs were mostly doing tech deals and Chips router software you know basic stuff and what struck me about the unions square ventures guys when they came in also in 2004 Was they were like yeah all that just been plugged in we have all the chips and the routers we need and you don't need your computer to be faster or

but what happened when we were all plugged in? They were onto the next generation. The next order was going to be enabled. Right, what it was going to enable. And I just remember thinking, like, if you're a portfolio manager, which is what we are, I don't know if these guys are right. It sounded really good, but I was 24 at the time. And unlike most current 24-year-olds, I was like, I'm not sure I know as much as I, you know enough to make a really smart decision.

year. But these guys are doing something definitively different. And we should be investing in a handful of funds that are doing something definitively different. Because if it's not the whole chips and routers thing, then we're all going to get crushed somewhere else, right? So we should go into that fund. The problem was it was a $100 million fund on paper. GM was used to writing $40 million checks. That because we were putting $2 billion of venture to work. And so like that didn't work for us. So I pounded the table for GM to make an investment. I was a junior guy, low guy on the totem pole, they passed. Wow. That first Union Square Ventures fund's probably like 2025X returning fund. I mean it's Zinga, Etsy, Indeed, Tumblr, Twitter. See, that's the thing

about Fred is that like so, you know, wasn't it GeoCities was the big one from the 90s fund or whatever, but um it was you know back in the day when we were reading tech crunch and and like seeing like things pop up like it was you mean when tech crunch was just a blog right 2004 2005 michael her it was he was one of the first people to see that there's the second order thing of even though this is dead and especially here in new york city i say this all the time all the people that were here in the dot-com era because of the great jobs all those jobs went away because all of the sort of new media divisions went away and so like the idea that people like fred saw that uh fred and brad um that this is no no no the the groundwork is laid we're just waiting for the

the seeds to sprout like that was the thing that they saw that i always thought was was brilliant is that We're just waiting. It's not, it wasn't brilliant to say that it's not dead, but it was brilliant to say that, no, it's not only not dead, it's the spring is almost here. Right. No, and I think, and it's funny because Fred is definitely, historically, the front guy, right? The blog and all of that sort of stuff. But I'll say firsthand, like, I think Brad deserves way more credit than he,

gets for the success of that fund because he's like the theoretical thinker he's like the you know Fred's always the the user like I'm blogging that I'm trying this new thing out and you know buy my virtual horse or whatever right one of the first users. Always the first user right and Brad's like where's this going and what are these you know they are as good a complementary pair as a set of co-founders as I've ever seen, which is funny because people, so I also worked at first-round capital, and so I got to work at, for Josh Copplin and Fred Wilson, two VCs, they're very visible, and people know them, and, and it's funny because I think about, like, the advice that each give to me, and, um, Fred's advice was always some version of, you should get a partner,

because he had such a great experience with his partner and it was integral to the success of that fund. I was like, I'm not a partnering type. I'm a terrible team player. Like, I am much, much better at Solo, and Josh would never tell me to go get a partner. Josh always starts out with like, okay, well, what are your goals? And then how do I?

much more like... And to be clear, we're talking about Josh... Josh Coppomit as first round. Yeah. Much more like somebody who has been the CEO of a company full of disparate personalities and 150 people go in in all sorts of different directions and just knowing that like the thing that works for him as a CEO is not always going to be the thing that works for all of his employees

and comes from it from that perspective. And so that's... That was helpful to me personally. Let me do first round. Just give me what you learned from first round being like, you know, big bet on Uber, like big bet on the mobile era if I'm not being too, you know, whatever. So you've got Union Square, and then what does first round teach you that you take out to your own fun? So I think a couple of lessons that I learned at first round,

So I learned personal lessons like knowing that I'm not a great team player. Because first one is a great firm. Firm, right? It is a company, right? Multiple people work there, multiple people involved in the decision-making process. Like that is the way it is inherently built. It is really, really good at doing that thing. And if you don't fit in that, it's you.

You don't want that thing, right? because the way they do that thing is the best at that thing, right? And so... Is it culture-based or is it thesis-based? Like, what sort of inform their structure in that way? I just think, like, Josh is a really good entrepreneur, and he's just good at building stuff. And he's really good at, like, sort of...

And this is a skill that I think founders really need is the ability to zoom in and zoom out constantly. And that is a struggle for a lot of people, too. hard to get into the weeds and be like the reason why people aren't signing up on our sign-up page is like this color thing right that's throwing them off right but big picture we want people to think about our brands like this constantly zoom in zoom out right um because you can be too in the weeds or high level and i think like he's really good at that um and so uh the the thing i I take with me from the first round experience is also the long-term nature of these investments.

And when I think about the first-round portfolio, there was a time when we were, and this is how GroupMee got done. GroupMe was the last deal in our second fund. You should probably just provide context for those who don't know what GroupMe was. Yeah, so GroupMe, well, GroupMe is still like a top 100 app on the App Store. Yeah, most football season comes along. Like, people still use it with their fantasy football. You know, it's funny when it literally pops up at the beginning of the football season. The people dig up their group chats.

Yeah, it's really funny when it pops up. So GroupMe is a group chat app, basically, right? And it's nothing that you can't do on WhatsApp today or whatever. But at the time, it continues to have a little bit of an audience. But it was born of the TechCrunch Disrupt Hackathon in 2010 out of New York. And it was just, there was no app, it was just chat, it was built on Twilio. And, yeah, there was no other way to do group text messaging in a single phone number. That's right, right.

And so I was hanging out at the TechHunch Disrupt hackathon because I thought it was my job. And this is the way I run my fund. hackers are building things in the space and it's super early, I should be there. Because my job as an investor should be where innovation is happening. Even though most of the projects aren't real projects, the chance that one thing right here is worth my afternoon hanging out there. And I wound up meeting them there. It was very contentious as to whether or not we should do that deal. It ended in a two-two tie.

And at the time, the way it worked was Josh could break ties as the founder of the fund. And only partners could vote on deals. So I was a principal, so I could lead a deal, but I couldn't vote on it. I convinced Josh to break the tie because he had said that, you know, our fund too is a solid fund, but there are no clear standouts. And we could use some extra risk on our last few deals, right? Roblox is in that fund. Wow.

Chris Fralick has been on the show to talk about this story, but yes, go ahead. And Roblox took a long time. It was like 2006 or 2007. We're sitting there. I mean, just sit here and go, and this is why I'm like a little bit of a skeptic on like people's performance and the short term. This is a long-term asset class is. You don't know how your stuff is going to do. And on the flip side, like, I've had experiences where I've invested in companies like fall of 2000.

19, Audrey Gilman's on the cover of Ink is the first pregnant founder on the cover. The wing is doing, you know, I forget what the run, $60 million run rate, some crazy run rate. And I was like, oh, shit, that's going to return multiples of my funds. I didn't really see a pandemic coming from the horizon, let alone everything else that happened to that company, right? But like, we thought that looking at midstream, and that's probably after the Roblox series. B even that we didn't think there was a blowout deal in that fund and that company is a monster multi-billion dollar company right Uber right we used to everybody used to vote and we vote from one to five right nobody voted a five

one of the best rate returning venture deals of all time no one thought it deserved a five it was all force it was unanimous everybody thought it was a good deal but a good deal not a great deal highly regulatory it regulated industry at the time it was luxury, right? Because it was Uber black, black cars, all of this sort of stuff, right? So I have been humbled over the years as to what I know and don't know and really try and approach things from the perspective of like, how can I still win and not have to be really smart?

Like, that's sort of my approach. So like going back to you, I mean, like the real tension though seems to go back to the, that we were describing earlier, where there's the realist perspective, right, where Uber Taxi would have been a startup there like, well, given all these, you know, real, realist sort of conditions will never work. And so, I guess, how would you have gotten to a five where, you know, I don't know, that would have been driven by such optimism that through sheer force of will or timing or any number of things coming together, again, seeds planted in the, in the marketplace from, you know, the wide distribution of iPhones to GPS, to Google Maps, to those things coming together,

and then a product experience, I mean, having worked at Uber, the thing that was so, I think, compelling about Uber for me was that it was one of the first times where Internet technology, ideas, behavior interacted with the real world. Real world. Yeah. That was, that was huge. And that was different. Internet affecting my real life experience. That was like the day when I let go of my username, Factory Joe, my original hand. to use my real name because suddenly I realized that there was no separation between the internet world and the real world. And so Uber was a similar type of experience like that.

So I guess I'm just very curious about that question of what would have made that a five? And, you know, how much were you sort of vacillating or maybe condulating between realism and optimism? I'm going to go back and I should ask Josh actually how many fives I ever came out. I don't remember. I would imagine knowing myself, I think five is probably hard to talk. like a solid four. Yeah, I'm a four. I think this is a worthwhile, but I can see this working out, right?

But one thing I appreciated about those early Uber pitches was that despite the fact that Uber came out of a little bit of a Silicon Valley Insiders Club, right? Right. Because Garrett Camp had sold Stumble Upon. Josh was an early investor in Stumble Upon. So like... Travis had done red swoosh.

Right, right, exactly. So this was a group of insiders who had they come out of left field, may not have gotten funded but they still did the work yeah part of the original pitch was the fact that in cities where the number of medallions were capped was there was a lower number of cabs per person than there was in cities where there was sort of a quote unquote free market right and so we like literally added up like there was not excess demand based on the medallion system if all we do is take the chunk of the excess

That's left over. So despite the fact that these were like inside area guys, they were probably going to get a check anyway. They did their homework. And that's one thing that I really, really appreciate is somebody who comes to me with an idea that like, there's no chance that they won't get funded based on like who they are in the space or whatever, but they still do the work because they themselves are preparing for success.

And they know that doing their homework is highly, uh, um, you know. predictive of future success. Chris and I just made eyes at each other because we've been going for almost an hour and a half now. Have fun editing. You, you, we don't, listen, I don't have time for that shit. Let me do three rapid fire. We'll get you back to your daughter, okay?

Okay. Number one, are you seeing valuations go down or is that a bunch of bullshit right now? Yeah. Certain areas, late stage, they are. Early stage, not at all? Well, so the thing about early stage to me, I'm like two people in a PowerPoint. And so, like, I'm still investing at single-digit valuations. And that really hasn't changed.

And the range is going to be still pretty consistent, right? Yeah. I mean, yeah, most of the stuff I do is such a ridiculously early stage that I didn't see valuations of my deals come up that much. I do think that people are comparing it to the wrong thing, though. It's like people are comparing seed rounds to series A's of seed rounds to seed rounds 10 years ago or five years ago. And that's not the case. It's totally different. You know, the first series A that ever got raised in my portfolio in 2013 was like floored.

And I think it was like Dave Eisenberg's company. It was like five on 20. well that's the sort of pre-a seed round now it's the same amount of money it's the same timing from the origination of the company it's a different definition it's a different definition do you think this might be an unfair question to be a speed round everybody raising 10 billion dollar 100 billion like the amount of fund raises right now I haven't I want to do something on the show about this. You mean, the size of the funds.

Do you think that's a bearish thing? Because the argument I would, I haven't thought this out yet. It's a nice way to make management fees. Yeah. It is. And is everybody doing it right now because they feel like you got to strike while the errand's hot? And that's where I feel like it could be bearish.

I don't know what people tell themselves at that stage. I sort of think it's just, unfortunately, limited partners are always looking in the rear of your mirror. If your last $500 million fund was a top quartile fund, there's going to be a billion dollars of people willing to invest in it. So like the idea that they're really being thoughtful of, I need this to because of what the market's going to do, whatever, it's like, no.

Fundraising, especially for GPs, is such a pain in the butt that, you know, LPs coming back a truck up full of a billion dollars. You're taking it, right? So I don't know. Is it bearish of the LPs? I think it's almost bearish on the LPs perspective because I think the LPs are looking at their asset classes and going, how the hell are we ever going to add up all these asset classes

and get to 8% or 9% forward-looking returns across all these asset classes? And you look at historical returns in venture as an asset class. And, like, you tell yourself that, like, you should be getting. 20% out of venture, 25, or whatever, right? You're adding that into your mix and you're convincing yourself and the people you work for that you should get as much ventures you can get your hands on. If you can convince yourself that this is a top-tier fund. And very rarely, I can't think of any time where somebody's like, yeah, these guys were

a top-tier fund when they raised a $500 million fund. But I'm very skeptical of their ability to do the same thing with a billion-dollar fund. And so even though I'm getting a $50 million allocation, even though I don't know where else I'm going to put it, I'm not going to put in. LPs just don't do that. Sequoia raises a $6 billion fund to do something you're getting into Sequoia. Are you putting your money in? There's no state pension fund employee that would say no to anything that Sequoia raised. That's just the way the LP side works.

So I don't know how thoughtful they are about future economies. All right, last one, although Chris, I apologize. I do want to make room for you. New York City, been doing this for 20 years here. How do you feel about the startup scene in New York City? When will Chris Messina move here, et cetera, et cetera? What do you think about the startup scene right here? You know, there's a lot of renewed excitement from a whole new group of people.

which is exciting. There's so many, like, during the pandemic, kids right out of school moved into Manhattan. Like, that hasn't happened since, like, I moved into, you know, 83rd in York when I graduated from school, you know, 20 years ago. 80th at Amsterdam. There you go, right? The days of Dormandy and Yeah, right, Dormand. All of those places. So there's a new crop of folks who are very excited about the scene here, very excited about all that New York has to offer, culture, diversity, the excitement, which is awesome, because now, compared to back when we first met and whatever,

like, when I was in my 20s in the New York startup scene, nobody knew what we were doing. Our scene, like the late 90s New York crowd that built the New York Times.com and all these other things picked up their marbles and went home for five years. So the 2005, six, seven, eight vintage

of startups in New York was done largely without the mentoring of existing tech companies and all this or stuff. And yet still we figured out how to make a bunch of big companies, which was awesome, right? But now people are sticking around. People are sticking around and you have product managers who grew up at Data Dog at Etsy and all of these bigger companies

that can now be combined with this influx of new talent. And so I think the talent pool here is as as rich as it's ever been. Every single VC on the planet has done a deal here. No one hate coming to New York. And even 10 years ago, that was a different scenario? When was 10 years ago? What years ago?

2012. 2012? 2012. 2008. Well, I tell you, well, look, one of the ways that I got to first round was because I helped Foursquare raise its initial round of financing. And a lot of people didn't think that the hot new social networking company could be built out in New York.

And so immediately after that, round became very highly competitive between a few funds first round opened up an office here Polaris opened up dog patch neither of those two things old Polaris I guess is still a health care fund now there's not really tech fund anymore flybridge hired John Steinberg who then became the founder of Cheddar and put him here right so so funds were my whole inbox was full of BC's being like hey what's what's going on in New York looks like there's some competition going on there, right? So New York was like initially a bright shiny object.

And there are some deals, but then, you know, some people, you know, like the SV angel guys used to come here once a quarter and then stopped because they were like, there aren't big outcomes here and it's not worth it. I think we have largely gotten over that hump. I think there was a time where it was like, yes, New York's cool for small outcomes. And it. And it If you want to build a thing that somebody's going to buy for $100 million, $100 million, $2 million. Which even Etsy, when it went public, was kind of the smallish side. Yeah. Yeah. Yeah, for sure.

ETSY's done amazing as a public company, if you think of their IPO from now. So, yeah, I think we've gotten over the Flatiron Health deal. I mean, like, you name the category. There's been a billion dollar outcome in the space. And so now I sort of feel like, you know, we're primed. And as a city, look, there's lots of things we need. need to fix. We were just talking about the mayoral election and all of that sort of stuff before we started recording. But I think a lot of people are looking at New York as a city and San Francisco

is a city and saying like, San Francisco's got a lot of structural issues as a city that if I'm looking to where I want to plant my life over the next few years, that they feel like New York might be a better spot. If you're going to be in a big startup. city, right? If you want to like hang out in Nashville or, you know, different pace or whatever, hey, that's cool. You don't like weather, okay, then don't come to New York, right? But, like, if you want to be in one of the top handful of startup places, I think people, as a city, I think New York has a lot to offer. You know, just to build on this point, like as you're talking, I do think that one of the things that I'm interested in, I don't know, understanding more of

is what will happen post-pandemic, right? Like we've just had the announcement in New York, you know, that the mask mandate is going away. We're having similar changes in the Bay Area. And there has been this kind of period where people have, you know, of course, relocated, gone elsewhere, they've become accustomed to working in from home and having those privileges, perhaps.

Some of those privileges were maybe about to be revoked. And so the point that you make, I think, is interesting about the maturing of both the New York tech space, as well as the investment scene, as well as kind of like the cultural opportunities that exist in New York. New York has always been, in many respects, I think just a broader, more diversified place when it comes to cultural experiences. And, you know, I do live in Oakland now, but I feel like when I go to San Francisco, it just feels really carved out and hollow. And, you know, like one of the things that was probably necessary in the early days of building social networks and social media,

ironically, was how antisocial lot of people in like, San Francisco are. That's the problem they were solving for. Yes, exactly. They're like, I will connect with you through the internet, but I don't really want to see you in person. Whereas New York has always been quite different about that. Anybody will stop and talk to you in the street. Literally. Literally.

And, you know, that's... Which I didn't the other day. Yeah, I don't know why. That's not you. Post-pandemic sort of awkwardness. But anyways, and Miami, I think, is also this weird, you know, hybrid of, you know, people in bathing suits and then people, you know, working, like, nonstop, I don't know, on laptops all day long. And those cultures don't quite feel perfectly aligned. Like, whereas, I guess what I see happening is, like, New York does have more of a sense for art and culture, which is great for, like, the NFT space and the NFT community.

And then also, you know, because tech is now kind of like this underlying enabling. substrate, you know, then maybe that actually does bring more of a locus of integration between all those different areas that creates a different expression of what, you know, art and technology and the seams of those things that previously were quite, you know, split apart dichotomists, like come together. And it just feels like, I don't know, San Francisco is somewhat myopic about, I don't know, like the world and culture. And And to bring it back to where we started this conversation, you know, there is a question about what tech companies are going to do next and what their responsibility is and how they fit into culture. And there is this Peter Pan syndrome that happens in San Francisco that I feel like, you know, I don't want to overspeak or something, but that you come to New York and just feels like there's more of room to be an adult and to act like an adult.

And that may be quite a defining aspect. Charlie, not to jump on you real quick, but they said that crypto has become the New York City has become the crypto capital recently. I've heard that. Yeah, I haven't done that article yet. Maybe I'll do it next week. But the thing that I always say about New York is we're not a one company town. Right. We've got motherfucking Wall Street.

Not a one industry. We've got. In terms of money and finance. Advertising, we've got, no, but if you go out and you're sitting at a table and there's people over here talking about fucking Broadway shows. and things like that and like media and like whatever so that when you're saying that like the ebb and flow of san francisco i'm not anti san francisco it's not a one company town here yeah there's always people doing stuff in seven different industries here and that's a really interesting but also challenging thing about the new york tech community is that it's not

one community and that's very hard for people to sort of figure out because you know where the centers of power are in the valley, right? You know that there's a concentric circle around YC and, you know, maybe Stanford or Facebook, Google, well, whatever, strike, you know. And a lot of people come into New York and you're like, where do I go to meet tech people, right? and it's funny because it's very hard to go to a New York Tech gathering and not have a super wide range of they're all lovely people but like professional quality of you know there's some really aspirational people of really terrifically bad ideas and and then it'll be like you know

the first product manager at whatever unicorn and you're just like, what are you doing here? I don't know, where else am I supposed to go, right? Because it's not sort of pedigree-based, you know, oh, this is the team from wherever that built this thing, right? And so like I'm doing deals where out of the, call it 100 deals that I've done at Brooklyn Bridge Ventures, I think three have run venture back to companies before.

And I'm doing deals where literally, the founder, I look on LinkedIn, because I know basically all the VCs in New York, and a good chunk of them in the Valley, doesn't know any VCs. Like, literally, we have no VCs in common. There's no one starting a company in the Valley that doesn't have a VC connection in common with the VC that they're pitching. That's just, like, not even a thing here, right? And it's, it does slow things down a little bit, right? It, it makes, it, it makes a lot. makes it harder for good deals to finish their rounds and to get the kind of buzz that actually they deserve and you know it makes it really hard in a noisy environment for VCs to

sort of pick out like who's capable and who's not because you know proxies are good and bad right it's like you don't want to just keep investing in the same people all the time But if you did build that thing for whoever and it works, like, that has a valuable experience. And it is something to kind of lean on. But at the same time, makes the ecosystem a lot more open. Right. So, for example, I think it's the 23rd. It's like a couple of Mondays from now.

Yeah, do you want to promo anything? Yeah. So figuring out what to do in New York for the last, 12 years or so, I've been running a weekly newsletter of tech events and whatever else is going on. And he does them and he attends with his daughter in a stroller. I've seen it happen. He will show up, yes. There's a, so the newsletter is NYCweekly newsletter.com. It probably has a title next to NYC. I've called it. People just refer to it as Charlie's newsletter. It comes out every Monday morning. And it's an event listing and whatever. using. I've been blogging for 18 years now. At CEO NYC on Twitter. At CEO NYC on Twitter. It's my initials.

And yeah, I'm findable and I put out stuff in places. And I will accept most podcast invites, especially when they're in my neighborhood. Yeah, yeah. Charlie will come to your kitchen, apparently and Charlie thank you so much thanks for having you Chris no man this is this is great man it's it's great to catch up again yeah for sure and you were welcome in New York any time well thank you thank you I like Oakland though Oakland's in real place all right we're gonna we're gonna wrap it there everybody I think I'll put this out tomorrow if you're hearing this whenever I put it out I put it out that day so there you go surprise bye everybody