This is Master's in Business with Barry rid Hoolds on Bloomberg Radio.
This week on the podcast, I have an extra extra special guest. My friend Howard Lindzen is a guest. This is a little off of our regular format only because Howard and I know each other for forever and less than a guest. Doing a Q and A is just kind of me goofing around with Howard and having a conversation.
Howard has had, like, really this shockingly blessed career. He launches wall Strip in the early two thousands, and before you know it, he's in the middle of a bidding war with a bunch of different people The Street, dot Com, and CBS wanting to buy it. He rolls that cash into his next venture, which becomes a wildly successful angel fund, which now is in its fourth edition. He was a
pre IPO investor in companies like Facebook and Twitter. Literally the first check in to Robin Hood, which went public in twenty twenty one at about a thirty four billion dollar valuation, So you can imagine that first check multiplied
a little bit from twenty fourteen or so. I know him from Linzen Palooza, from his early media work, so strap yourself in for a fun conversation about what it's like to be at in the room where it's happening, to quote Hamilton, but to be at the intersection of media and finance and technology as the world is blowing up. I thought this conversation was fun and fascinating, and I think you will also with no further ado, my discussion
with social leverages. Howard lindsay, Hello, Barry, So what do you think of these dicks?
Pretty nice better than my you know, Canut is a like mcgver of sound. He's my producer, went to school together at a ISU and we have this room like this, no lights, everything's padded. It's all about sound.
This is this is professional. First of all, everything at Bloomberg. The equipment is just like the best of the best. The people are great, they don't fool around. The only thing I'm waiting for in the studio is a robotic camera so we could do little video clips. But yeah, I think video but that's coming also all right, awesome if it's interesting and cool and cutting edge, these guys are right right on it. So let's talk a little
bit about your background. I've known you for forever and over the course of most of that time, your work has really operated at the intersection of finance and media. How did those two ent combined? How did that come about?
What they came about? Because the Internet did its thing. You know, I think they called Web two. That's when I'm very much not a technical person.
The I grew up, I thought it was Web three.
No, they called now, they called the now they call it web three.
In the two thousands.
Back in the two thousands, we were coming through that nasty. I wasn't involved in tech back then, but you know, by five, people thought, you know, we were in an everything was real estate. But in Lato five Earli oh six, YouTube came on the forefront and I saw YouTube, and I'm like, this is for whatever reason that was. There was many competitors or one hundred youtubes, but you know, the YouTube and its ilk. As soon as I saw YouTube, everything changed for me.
Really Yeah.
And you know before that, obviously the Apple Store of my first walking into an Apple store in seeing the iPod and being able to play with it inside the store, so I was like, oh, one oh two, But that was more hardware and music and not Internet related to me, you know, because I came from the financial background, so everything was DOS and Windows. So first year one to oh two, you have Apple and they blew out the store model, the retail model, which no one thought.
And then you bother the headlines from that era about why the ice Apple store was destined to be such a failure or just hilarious.
Well, because Gateway had failed, like everybody was doing it and.
There was no differentiated between Dell, Gateway, HB. Apple was its own animal and they controlled their ecosystem. Very different creature then different creature.
I didn't know what Apple was, even though you know, because you in the financial world you were on DOS or Windows.
I was one of the few on a Mac and uh hard slogging. It was tough. Not everything was available. In fact, there was a period of time where it looked like Microsoft Office wasn't going to be made available. That would have been the death blow to Apple. The any trust case against Microsoft is the only thing that kept Apple a lot. They needed a quote unquote competitor, and now the two of them are the two Mac daddy's in the space.
Yeah, I was living in Phoenix in an Apple store open up to build more and I stumbled it across the Street, never really an Apple user, and it just blew my mind the store.
So that raises an interesting question. How does a kid from Arizona, from Phoenix get interested in venture investing not exactly known as a hotbed of early stage core companies.
Well, I'd have to go further back. It's okay. You know, I grew up in Toronto, and I grew up born in sixty five and so in my formative years, you know, there was TV. There weren't really great video games, matel and television cal Eco. But you know, when I'm fifteen years old, Second City Television comedy was in the water.
Like Chicago and Canada was a giant feeder into the US. Martin Shore. Go down the list of all the gree I grew.
Up watching them live to stand up at Yack Yuck's. So there was Jim Carrey. There was a chain so much like you know you went to Stanford and got into face. You know, you went to work in tech in this generation in two thousand and I mean sorry, in nineteen eighty, I was fifteen years old. I'm sneaking into comedy clubs watching you know, Jim Carrey and Dave Thomas and you know, like everybody could show up on
a night here in New York. I went to the eleven thirty show, a comedy, so just see nobody famous famous?
Who was funny? I don't care who was famous? Who's you know?
I don't even remember their name. There was only one out of six that I thought were funny. But you go at eleven thirty here, so hopefully that's but you hopefully go that late show to see maybe a Chris Rock or somebody shows up to actis So in nineteen.
Eight, just put out a new show. So he's off the market for a while.
Good point. So in nineteen eighty I would go to these clubs and that was who my idols were, and I was just you were. Second City was on television, so I had a comedy bug and you had Johnny Carson. Those were like the shows that a weird.
Kid would How did that lead to woolstrip.
Long and then you take a break. I moved to Arizona, go to Asu from Toronto. Yeah, from run Away from Home.
Had it with this gold and snow. I'm going where the sunshines and I don't care about anything.
Made that move. Loved Arizona Golf cycling obviously the weather. I go to ASU do my MBA and I graduate in nineteen the middle of the pretty bad recession, the SNL crisis. So I got my MBA eighties right, No, it's the SNL crisis, Charlie Keating, SNL boy and Golf of War breaks out right and pretty bad recession. Yeah. Yeah, So that's when I started in business and became a stockbroker.
And I did not know that about you. You became who you were broken for.
It was the prince. It was called the Principal, Eppler, Garon and Turner. So it was a little regional, you know, and they all got rolled up. I think eventually it's wreck Dane Rauscher, which is no royal bank, like it's you know, everything got rolled up. I got. I learned how to sell pat ryle with my first mentor you know, back then, you wore a suit, you went into work, You go to Nordstroms, you get a suit, smile and do, smile and die, you know.
I worked with those guys.
Yeah, and you just had there was no software, there was no uh you know, you.
Just asked for a quot tron. They're like, what do you need a quote run for take up the phone.
So that was my first real job. But I needed to do a job to just stay in the United States. And so even with my master's degrees, you know, back then, I needed to figure out how to stay in the US. So I became a stockbroker. Anyways, one of my cold calls became a home run. So you smiled and dowed.
What do you mean one of your cold calls became a home run? So you know this by the way, I thought I knew your origin story.
Now this is the real one.
This is this is the Mandalorian. We're going pre Boba.
Fett if it's okay, because you have to know, because it was really make your own luck. And everything's a cold call. So you know, I'm smiling dialand there's no internet to search wealth, and so you open the local business paper and there's this kid smiling holding a squeeze like a product called the Grip, and I figure he's got money, So I dial the guy. He goes, yeah, come on down, and I go on down. He pitches me right, So I'm you know, I got my MBA money.
I want to do the next ground.
He goes, I need twenty five grand to make payroll. Anyways, he had the stress balls.
And you know, I love where the eyes pop that.
No, no, no, it's just I'll get into like the details. But anyways, a beautifully con instructed stress ball called the Grip. It was four tension. It was four balloons tension wrapped around this Siberian millet.
That's the technical, serious piece of hardware.
Yeah, serious piece of squeeze ball. Anyways, I give him twenty five grand that I don't have, right, and I did being a stocktorker.
Did you just commit to the money and then you had to go scramble?
Oh I had to scramble.
Okay, but you know, get into the details. We're going to find twenty five grand.
From one of the last conversations I have with my dad. We never got along, but one of the last conversations I had my dad, I have an MBA. I cut this deal with Mark Scattered, who's a great founder and he's a very young guy as a fireman, who created this product. And I'm like, Dad, I found it. I need twenty five grand to get going. And my dad said, send me a business plan. I'm like, dude, I'm your son. I went to business school.
He just wanted you to go through the exercise.
And I didn't want it, so I scrambled my own money together.
Yeah, and I like your dad's idea. You should have created a business plan just so you have it under your belt now.
No, so obviously I did the business plan. I'm kidding and h but he didn't give me the money, so you could just go figure it out. And uh figured it out. Gave Mark the money. He went and paid off some bill, his MX bill, And now I'm the owner of a business that has no money again. Long story short, the product was a hit. The product is called the grip. I came in, We built out what was called this ad specialty business corporate logos, putting it
on business. Long story short, the product got onto QVC and where you're in the QBC Hall of Fame, there is a QVC.
How many units of this thing?
Tens of millions.
So just put some jingle in your pocket.
Yeah, this was our first real hit pre internet.
Did you ever sell that business?
So the business still exists. Mark Scatted is a great entrepreneur. He's still a huge No. So I was never Lee and own. There was an escort and this is when you really This goes back to the Rodney Danshfield Back to School movie. It's like, get who's going to pay the team stairs? So we so I learned everything about business from this. We had incredible margins and software didn't basically exist back yet, and so you had a made
locally made locally in Arizona. Wow. And we would sell tens of millions, and we were like the Dura Flame and everybody started copying us. But we had these incredible margins, and that's how I got involved in stocks, meaning we were making so much money you had to find a home for it. You had to find a home for it. And luckily there was a bull market. This was in the early nineties, so there.
Was you still had almost a decade left before everything correct.
So indirectly I became a hedge fund manager and manage our cash at the Squeeze Ball Company.
At the Squeeze Ball Company, you're managing tens of millions of dollars because it's flowing in that way.
Correct. So the Internet in ninety five or ninety six becomes I guess a thing, right, and I walked into Mark's office. I go Mark before then, but hold but I go mark, we got to own our domain, and so the grip was g ri ipp. So remember the first experience of the Internet was that when I tried to buy the domain, it was owned by a penis extension company called the Grip. They were squatting on the Grip's website. So here's what's fine. I didn't want to
buy the domain. I'm not paying this guy for the domain.
What was he asking for it?
Do you remember? Honestly, I don't remember, but I was like, we'll just we'll just we'll put three p's. I don't know what my idea was. But anyways, so our product's on QVC. So we now don't have a domain name in QVC. We're like a home run product on KVC. Who's our customer Seventy year old women buying stress balls for you know, therapy, you know, squeezing, you know whatever. They were selling it as women were buying it good
for and so QVC would call sin. We have hundreds of complaints from old women that are going to a website to buy your product. Again, and that's how I learned the Internet. Now that's a good origin story. So that is how I got into tech and knew what the Internet was, and then I didn't do the Internet again until two thousand and six.
Wait wait, wait, wait, bro back before we're gonna not skip that deck. So you learned the lesson about a domain squad.
Own your own domain, master of your door.
But you did were you master of your own domain?
Oh? You learned that early. You have to.
But did you not stop and think, hey, there's some money to be made in gramming some domains. This guy did it to us. Let's now own taxi dot com. Or there was no Netscape browser.
That's how early I remember the Netscape browser wasn't nine or.
No, the IPO was ninety six, because I remember so then it was right on the cuff. I remember being on a trading desk and not being allowed to trade it. Rid Holt's you're a movie, don't don't touch that ipo?
Correct? So so am my genius? Because again, I'm not an Internet 'm a car Many kid, and I'm like haphazard VC, not haphazard hedge fund. Like I'm a hap hazard VC. I mean, I didn't set out in life to be a hedge fund guy. Our business turned me into a hedge fund. I didn't set out to be a venture capitalist. I was an entrepreneur, but it pade me access. So sorry to go back to those ten years.
I am now my big idea of the Internet, and a lot of people know the story in general because it happened to a lot of hedge funds or people. It's like Internet stupid. No one really is using it other than to, you know, to swear at people. It's kind of like pre Twitter. I don't nobody uses it except to like talk sex and check the weather. So you know, if anybody's going to use the Internet, the
FedEx is going to benefit. So through that whole late boom, I was the guy like not owning Internet companies.
But looking at logistics.
Yeah, like thinking like and FedEx would go down every day for some reason. You know, I really got that first trade horrifically wrong.
If you took that to its natural conclusion, then you're owning things in the nineties like Cisco and Juniper Systems and AMD and Global Crossing, which is, you know, the blocking and tackling of the Internet. But you had to have at least a little tech.
I know. My problem is I grew up and try them conservative. I'm like very like fundamental, and I didn't understand the internet. Not conservative politically.
No, no, no, I mean you don't strike me as somebody risk averse very really. Yeah, we'll talk more about that in a little bit. So the rest of the nineties you just sat on.
Your hands, Yeah, sat on my hands, missed the Internet boom. Also didn't get killed.
Right, So you come out of the crash.
Just hating the market. I didn't understand the market.
What's down eighty one percent between friends on the NASDAK, right, that's that's not a big deal.
Didn't even know the Nasdaq basically, So what when.
Did the idea for wall strip pop into your head?
So now the one lucky investment that I made, and it was a dumb investment, much like you know the dumb investments people made in twenty one. So in nineteen ninety nine, Hu I invested in this. Some guy pitches me on a series Q or whatever they were doing right then of cars Direct, which was.
Like I recall that cars Direct was like a.
Hot late stage end of end of the bubble era where you could sell cars at a loss, but we'll do it in volume and a little bit. Yeah. Yeah, And so someone pitched me like the series Q and I was like in cash right, like I was missing the whole internet bubble. So I remember then, yeah, I'll put some money in this and that was the top. The minute my wire hit cars Direct now as an added bonus to invest in cars Direct. To induce me into car they were going to throw in this other
internet company. You know sometimes you like go to the horse races and they give you like handicapped horses, like an extra for betting on one horse then.
Probably won't finish the race, right, Well, they said, what did they throw in?
They threw in this company, Viva dot Com.
Viva.
I didn't even look it up, so they said, listen, it is the two for one. Uh. Anyways, the bubble.
Ends cause Direct goes.
I think ten years later we sold for a few cents on the dollar or something bought it. But this Viva dot Com was run by Scott Ingram, who's a friend of mine. In an LP now and meet him
at your events, probably one of our events. Anyway, Scott, Viva dot Com becomes rent which was uh means rent like it was just they couldn't they couldn't buy rent dot Com during that boom, right during the crash, he goes and buys the domain rent dot com and builds the largest, you know kind of rent marketplace, and eBay buys it for four hundred and fifty million dollars. And you were so my seed? I seed. That was my first seed win by mistake.
Right and wish. There have been many seed wins.
By so that was that gave me my first Internet win.
Were you like a cap table owner or just a rounding air.
A rounding air, But for me it was still real money. So I go and I became friends. I used to call Scott Ingram and go, how are you still alive? Like I was just like my one Internet investment, right, and he just thought I was humorous, like as a fifty k hundred k investor checking in on my investment and we would talk about the.
Inillion dollar comedy. How's my ten grand doing?
Yeah? So I was fascinated that a businessman could build businesses on the Internet. And so now flash forward to you know, my hedgehunk guy, I hate CNBC. I don't have money for a Bloomberg. You know, I'm just a retael Yahoo finance kind of guy.
Righty, it's right?
And e trade and in oh six, YouTube comes out, and I have this idea that I'm going to build going back to my comedy and going back to how I grew up and going I'm going to build CNBC on YouTube. That was it.
That was my idea satirical take on financial television. No playing it straight, but I always thought there was a lot of tongue in cheek and everything you guys did correct, right, It wasn't straight up, it wasn't Second City, it wasn't supposed to be funny vin Yettes. You played it straight, but there was a subtext of, hey, this stuff's ridiculous.
Correct the first show, meaning I I that's what hooked everybody, That's what hook but we never got beyond that before CBS spot up. But going back, I had this idea one show song. Yeah, I cold call Fred Wilson, who I didn't know at the Union.
Square backs down here in New York.
So I used to leave these whack job comments on his blog. He had this blog, and back in the day, blogs had blog rolls, you know that.
Bloger had comments up until like nine. Finally I just show up.
Fred was like Twitter. Everybody was there talking to Fred, and I would leave these whack job comments like what like fun, I can't believe you're giving Yeah, became the bouncer at Fred's site.
You're the Motley fool then.
Because I was the guy who didn't care about venture I was just there. I can't believe he's sharing all this wisdom about venture free for free. Anyways, I finally pitch him. I say, Fred, you're gonna be in Phoenix. He's never met me. I said, I'm gonna take you to a Sun's game. And this is like Internet two thousand and five. Fred was already I don't feel I was famous.
He had already.
He wasn't famous that he wasn't famous like he is today.
Well, because post dot com implosion, nobody cared about career was the VC but they had been making money for a while.
Correct. But he had done so many big deals in the first run, right, and the biggest one being I'm having a senior moment. But anyways, it'll come to me. I go, Fred, come to the Sun's game. You know, I'm trying to just become his friend, right, And he agrees, brings the Sun and we go to the Sun and Joanne, his wife, was like, Fred, you can't just go out with people on the internet. This is not that long, but Fred just we became friends. I pitched him on this idea.
Nobody stalk someone for three years to murder them.
They normally think about Brad and social media where we're at today.
Yeah, think about how many people you know today from social media. You never would have known. It's been flipped on its head.
Unbelievable. So he counts in. He kind of becomes my mentor in that, and I find out that he was Street dot COM's first I didn't even know this until after he invested, So luck would have it. Not only did he get my idea to create TMC on YouTube, he was there when Kramer was building the Street dot com and that was late nineties. Yeah, show Fred.
By the way, I have said that the very first financial blog was Todd Harrison's trading diazing. That was a real time series of update embedded in the Street dot Com that you know, here's a guy who was Kramer burk Witz's trader. I mean a lot of the best trades that Kramer did as a hedge fund manager, you know, tapping out before everything went to hell in two thousand. I think that's Todd saying, listen, every risk measure we look at is terrible. I remember reading this, you gotta
get out and he avoided the disaster. Full credit to Harrison on that, but real time, hey, we'll put legging into this position. He used to use the bull and Bear medical stor. I got one right exactly in all the comments, it was all live.
It was Street dot Com to give credit. Was the place your blogs. Listen.
I have my partner Josh Brown pulls the Street dot Com, the Motown of finance, Barry Gordy and everybody who came out of Motown. I could give you a list of one hundred people you know in finance today that trace their roots back to Street dot Com. Present company included.
Yeah, and I was a customer. And I was a Kramer fan at the time because I came from the Street myself, right.
And he was running a fund he was he was very active.
It was like it was real. And so I find out Fred was his investor. It was like, wow, so I got the right investors. I raised six hundred grand for wall Strip, which is a lot of money, right, and and well, at then Web two hasn't wasn't really a thing.
Two thousand and five. Yeah, I mean back then it was you know today everything is Amazon Cloud. It doesn't take a lot. Back then, you had to have servers, you had to have had people, you have like just building out the back.
End was a massive and no revenue idea. Right, there was no infrastructure for revenue. Right, There's no ad networks and there was no so everything from So when we did an AD, we had to like make the ad, insert the ad ourselves.
Like we were able to track it, be able to build it.
So lucky as luck would haven't. The show was a hit, and by hit, I mean not like millions of views, because but in relative terms at that time, if you went to YouTube, it was cat videos and it was people filming their television and getting takedown notices of like dukes of hazard or whatever. So it was just a giant lawsuit.
The woman you had as an anchor, ye, fantastic, Lindsay Campbell. Lindsay was awesome and she went on to go into television.
When we sold, Lindsey got a part in the show that was The Errors Show, the Mob Show on HBO, The Sopranos. She was a teacher in a couple episodes.
For early seventies. Your memory is really terrible. You should be a little bit.
I can't log on the internet to just search IMDb basically IMDb. Are you on a screen or It's okay people, It's a thing that honestly happens that you just tip a your tongue all day long.
So I have this to look forward to in ten years.
You do. And by the way, I'm going to have to stand up for the last half of this because I feel like I have to pee. So so Lindsay Campbell, we found uh but what what a time? This was great.
She was talk about all everything lined up perfectly at once.
Yeah, and so we had this idea. This a funny story. So there Fred was a master. And Fred introduced me this is how the internet worked. Before the Internet, there was no iPhone yet, there was not even still was really coming into its own.
Right, You're still a few years away. By the way, I have a vivid recollection of Lindsay and a cameraman with her holding a wired mic back to running around Lower Manhattan Midtown, asked throwing the mic on the streets? Step, Yeah, what do you think of this? And you know she's a pretty girl. People were like more than happy to talk to her. Guys in suits with today we would call them finance bros. But she would be on Wall Street. So what's going on with the markets?
And the way we edited it was hysterical.
That was a show.
So so the idea was we're going to create CNBC on YouTube. Fred and handing me a list of eleven people, He said, Howard he didn't investor fin Yeah, he said, why do you call him? Pee? Pee peep? Roger Ehrenberg, Hey, Roger, Hey, Horod. I read your blog blah blah blah Fred Fred's investing. Uh, if you drop Fred's name, everybody wrote a check. So I go. Of course I didn't know this at the time, so I go. Fred said to give you a call. He goes, yeah, I'm in for twenty five. Hangs up,
pee peep. Brad Felt, Hey, Brad. Fred Wilson said I should call it, sure, twenty five k peep. Anyways, I call Fred back like a day later, I go ten for eleven. Okay, who's the eleven. That's a funny story. So this guy Mark Pinkas who's gone on to start Zinga, and he was investor in Facebook and LinkedIn. He partners with Reid Hoffman. Fred is an investor in all his stuff. He was a name on the list. So I call, I call Mark Pinkas. I'm on a roll. I'm like
god attitude. So I call Mark Pinkas picked up. He goes, Okay, hey, hey, it's Howard. Fred said to give me your number. I do the pitch. He goes, it's the dumbest idea over here. And he goes and then he goes like this and tell Fred not to give up my phone number anymore. He hangs up of it. So when I call Fred back, so I called for I don't know. That's a hard no. And anyways, if you know Mark, and I do, he's an LP. He's the friend as much as you can
be a friend with Mark. He's super smart investor and started a thing. Guy I called Fred Becker. Guy, your your genius. I go, ten out of eleven people just wrote a check over a star Tek phone call pitch for an internet YouTube company. I go, I don't know what's going on here, And I said, but there's this one guy who not only thinks it's the dumbest idea, but told me not to give He said to you not to give out his phone number anymore for a laugh, just for me. He knew who was Yeah, he goes,
oh that's Mark. Don't worry anyways, So told him back and he didn't say call him that. But this is a funny Mark story that I haven't told too often. Is about three months later we I never I didn't know what doc Listen. This was like a loosely the internet deals were not handshake deal like I'm a try like Fred like, this was like a two person operation.
Read Sebashian Melbury's book on on the Power law and venture capital. Million dollar deals were literally done on a handshake. He'll come by Monday for a check. Well, the lawyers get the documents. It wasn't like a team of it weren't.
Even standard docks. Everybody. Fred was the the He's the maestro. So I'll trust you know, I'm going to get to the docks. Anyways. It's tough, is moving very fast. YouTube's getting sued. We're distributing our video across one hundred of these YouTube channels. Anyways, three months goes in and I get a break. I get like New York Times, the Gray Lady is going to do a piece on wall strip.
There were maybe getting six to ten thousand views an episode, which is not nothing, but it's nothing in today's world.
In today's world. But then, oh yeah, who was getting ten thousand views in a day?
Not just ten times? It was who was watching? Right, That's what I learned about the difference between audience and the right audience, right. And so Fred was We were all promoting. It was a very cute show, as you know, and I was writing in and starring in and producing it and I didn't know what I was doing, but it was the internet. Anyways. But three months go by and you know, we're doing the books. There's no revenue. The books are pretty easy to do quickly. Oh we burned thirty grand.
That's called accounting.
No money is coming in correct. I was wearing that hat at night. There was not much accounting to do except how many months we have left before we have to call Fred for more money. So anyways, ten you know, I'm doing the books and there's an extra so we get in the New York Times whatever, and now I'm like famous, and uh, there's an extra ten grand in our account and I'm like yelling at my team and yo, Lindsey. Did we do revenue that I don't know about it.
Mark just dropped off a check and nobody.
Anybody never told anybody. After he knew we were successful, sent him the tent. So I called Fred, I got this mother, you know, I called this guys like.
He was the first, like at the higher valuation.
Now I ended up we ended up selling the CBS long Story shirt a few months later, and he I returned multiples on that late money and we've been friends ever since. So he was like my newman at the time, you know, like in Seinfel, I'd see that Checkicoman thinkers. So so anyways, it was just that's what the Internet was. It was very cottagy, it was Web two. It was just coming out.
Of such a mark of like the seventies and eighties that way you're telling me. Even in the two thousands, it was still shockingly rudimentary, rudimentary.
There was no y combinator, there was no text, there was no way this y combinator. Probably seven eight that late all right, God, I think because I used to go to those events the don't want to be twenty thirty people there.
I remember the nineties. If you were interested in venture capital, and you were on the East coast. The only way you could learn anything was like Fast Money or I'm sorry, a Fast company or Wired magazine, but there was really not a lot of media coverage of what was going on in the West coast.
To his credits, she used to write a smart money magazine. I was a disciple, and then he started in an internet company.
People don't realize he had an internet. If you're not a fan of Kramer today.
Which I'm not, I'm not going to argue with.
You, but you have to realize how influential and importance a player he was in the in the nineties, in the two thousands, he was really you know, between between running the hedge fund Kramer Berkoitz, between launching the Street dot com when nobody really thought, I know, let's do a real time finance site that's actually operated by people running real money, not just a bunch of ministers without portfolios, and all the time dropping in on TV doing his hits,
like when he had his finger on the pulse when he was running money. He was the man for a long time. And now it's a different world, it's a different environment, and he's in a different role. But regardless of what you think of him today, you've got to give him props for what he did in the nineteen nineties.
He looked away and Fred has great Kramer stories. Anyways, what made starts with a wall strip grate is, you know, we were doing five six thousand views and I had this idea to get Kramer's attention. We would spoof Kramer, right, I remember that great story. So I, so I go. I said, we can't spoof Kramer. You can't. You can't upset the guy. What we'll do is have our Kramer give cancer and medical advice. So he's going to have
a show. He's going to be Kramer that people will call with medical question.
Oh god.
And so we got this method act. Lindsey found one of her friends who was a method actor who looked a lot like Kramer, and we said, listen, go into that room, listen to one hundred hours of Kramer, be Jim Kramer, and then we're going to create like a set, and you were going to give advice with people calling in for medical proms. Anyways, he was so mad Kramer. Oh no, he doesn't have a sense of humor like So Anyways, this leads to our acquisition. So Kramer wants to buy us to get us off the end. Oh
really yeah yeah? So Street dot Com calls me after the show and goes, we'll buy you. I'm like, by me, I don't know. I was for set, like, I didn't know what I was doing. We had no revenue. I had ten grands showing up in the ether. We had nothing but expenses. Barry, it wasn't like the nineties where you had to build a business like my he was a little bit of green.
Now this is like by so we'll do another parody.
This is how I got into VC. So straight Tack says, we'll give you this amount of money and I say deal. Like I'm like, I'm like Kramer and Seinfeld. I'm like, just build hot coffee on me. Don't accept the first offer. I'm like, deal, Kramer, you got me. So I call Fred Wilson. I go, Fred, I go, you know, friend's my board. I go, Fred, what do I do? He goes, I didn't know you want to sell? You call them back and like he you know, Friend's like.
He walked you through to Yeah, he says, I guess there's a competitive bidding.
Correct Fred, Fred makes it makes a few calls like the next damn at CBS, and I have no idea. You got to understand, you know me, right, I'm literally a nobody, clueless, clueless, you know, obviously good instincts. I'm not going to completely terrorize myself, but good instincts, great people around me. Lesson number two, you've got to know your cap table. You've got to build trust. You've got to have great people around you. So I made the one call, Fred goes Howard, you want to sell, gotta
have it. If you didn't know you wanted to sell, let's get blah blah blah. Actually know, I'm in CBS's office at black Rock. This table is big as Bloomberg headquarters. And you got Quincy Smith, who is a great guy. Uh, he's running CBS Interactive. And Mike Markus is a dear friend of mine.
Today when wasn't marked, they had already acquired market Watch by then, right.
Yeah, a long time earlier. Yeah, Bill Bishop and those guys, great guy Newby, And they go, hey, here, you want to sell. And I don't even know how to prepare for this, man, I go maybe, and they go, what's Street dot COM's number? And like I literally was no, I made up a number. Yeah, and they go, we'll double it, and I go, deal again. Agad, I've hit the table. I'm like nobody in the room with me to like stop me. And then I go, but you know what. The one thing I said, you know what,
let me call my board and I remember quinc. They go, we'll wait. I'm like, I thought i'd have twenty four hours. We'll wait here, and I'm like, so I trample out of the boardroom. I call Fred on my starteker. You go, Frett CBS offered me Doublewstreet dot Com. He goes, well, do you want to do the deal? And I said, dude, I mean it's a lot of mon It's been six months, I said, I think I do. We have no revenue.
I mean, I don't see how we're going to make this work. Yeah, I'm like, it's a rescue plan before we run out of month.
Correct.
This was, and and they have the infrastructure to monetize it if they want.
To do that. I for a minute think I'm going to be famous. My and my old think me coming out of the room, I'm going to be on Letterman. I'm going to.
Have a show, right, Women on the crappy little website for a.
Barely I was now an executive at CBS. Right. Yeah. It was like if there was a balloon coming out of my head. I'm like, just bring me green eminem stat.
So you want the green M and ms out of Yeah, And.
So I call, I said, Fred, goes, walk back in there and you tell them that you won't shop the deal if they add another.
Too too right, And I said.
Can I do that, fredday? Because you hang up and you walk back and I go, okay, and I'm wearing like my crocs, I think, and sunglasses. I'm not prepared for this meeting. And I walked back in and I said, listen, I talked to my board and you know, for an extra two I won't shop it. And they go deal and I go, hang on, they go get the out of our offer. So that was how my deal with
CBS st Oh my god, that's hilarious. And literally half my investors had not finished signing their paperwork when we returned the money, so it was just had an MBA. I was supposed to know what I was doing. I'd like to tell people, you know, people look up to me, you know, but i'd like to give the on story is what made that successful, right idea right time. I had no ego about the exit that I was building
something better than anybody else. I had incredible people around me, lindsay running the show over exceeded anything that you could expect. I found these people on Craigslist, right, they were just and it was a miracle craigs on the internet, on the Internet. So I don't know, it was just one of the greatest stressful, fun interesting times in my life. And I met great people and that's kind of what got me started a point. We're out of time. Let you know now, how.
I asked one question, thanks for coming. That's all the time we have the sale of woolstrip. The next step from there was that social leverage. Tell us a little bit about that.
So so wallstrip. I'm working at CBS, and uh I pitched them this idea, what like my best idea I've ever had. So you know, there was this moment where I said I was going to be famous and CBS goes, Okay, Quench, she goes go meet the TV people. They're gonna love you. They did not want to meet me. So I have this idea for a show for them because they asked me to pitch them a show. I thought they bought my shot. I thought they owned me. So I stay up for three days. I'm writing furiously a show idea.
And my show idea is very simple. It's like after Dark, where ever a guest comes on Letterman or their after show that that guess when I come over to this studio, the creepy studio, and there'd be a comedian and they would just talk about what's in their wallet? You know, the celebrity would talk about money. Yeah, oh okay, there would just be a show about money. Hey, show me a wallet. What credit card do you use? Have you ever been screwed by your financial manager? You know what
I mean? If you got to go to Vegas and need ten grand, how do you do it right? It'd be an interesting look to how famous people spend.
If you get in to eat hot wings at the same time, that's a show.
That's a show. So they threw me out of the building. Yeah, and that was my end. I was so by that day. That was hard. I was Clarence Beaks from that print, Who's Clarence Beaks? I was collecting a paycheck and no job and Twitter. You know, in the background Twitter now starts and I saw Twitter and I said, this is Bloomberg. My first call was to Fred Wilson with Twitter. We were all making fun of Twitter back in the day before iPhone, you were everybody was. I was using it
and I was telling people where I went to the bathroom. Hey, I took a pe at this restaurant. And the vcs thought I was funny because it was really vcs on Twitter at that time too.
It was journalists and venture capitalists.
So I went to friend, I said, Fred, this is Bloomberg. If I if the president ever, this is like a blog poster. When the president tweets about the economy, the market will move. And Fred goes, that's very clever. You should start a company. I go, Fred, I'm working for CBS. And that's where stock twits came out. I went to Jack and Ev at the time and I said.
So, now at this time, Twitter's pretty small, and you.
Walking Twitter is very small. Yeah, what is.
There fifty million people on Twitter? No, not that any uh ten million people.
Brew to invested. I passed on that investment call.
Yeah, it was a you know, you could have sold it to some idiot for forty four billion dollars.
This show is not Howard's a genius. It's called Masters and dismals. You have to have losses to become a master. So true.
So I that is very true, young grasshopper.
So I go to Jack and Av and I said, Twitter dot find this is my pitch to them. I go Twitter dot finance dot com. I said, people will talk about stocks on here, and they were like, Kumbaya, what about green peas and all that stuff?
That's just that's screenpiece Twitter. This is finance Twitter.
And finance Twitter, the original fin Twitter idea. And they were like, you should just you know, we have an open API, which is a trap plug in. Yeah, plug in, So build your entire company on our continuing goodwill and whim correct. So this was not smart I made. It's smart. You know, it depends how you look at it. You know, some days I love the idea, some days I'm like wow. But I went back and I said, listen, I got
two choices. I can either just give it away for free, which you know, I started the cash tag dollars something AAPL dollars on r I m M. Because my idea was, how do you separate people talking about green apples, from people saying they love the Apple store.
The stock symbol, yeah, like a hashtag only a.
Dollar because people already and finance spoke the language of tickers. Yep. It was a clever hack, uh, And I created it with the team and we just started tweeting with dollar signs and it caught on.
Right.
So now I had a decision to make because people, because I told my last company, all the vcs were like, Howard, what are you doing? What are you working on?
Right?
And I'm the idiot that just said well this and people and I said, but I don't know, like how am I going to make money? You know?
I don't really get that.
Yeah, so I felt trapped to the very things we make fun of other people for is like and just goes to today's lessons. You know, just because you have an idea doesn't mean it should be venture backed. So kids, today, that's a lesson for you. Not everything needs venture capital. But at that time it was nirvana, right because there was just organic growth very important. Lesson organic growth is growth other kind of growth, not so growthy growth, organic.
As opposed to well it.
GBT, that's organic growth. The world loves organic growth because it's a mystery, it's a miracle. Well, two thousand and six was a miracle. You have Twitter, LinkedIn, Facebook, aws, the coming of the iPhone, the app store, you know what I mean, this was all to come.
Well, we were still the crashes. Is far enough in our recent history five six years earlier that some of the wounds are starting to heal. People are starting, the market is up off the low's pretty essentially before the eight o nine prices market, So people are starting to look around and saying, hey, what's going on out here.
But it was organic growth. You didn't have to force somebody like a crypto walle to force feed it down their throat. This is the future. It was just happening.
Plus, you had all of the late nineties infrastructure built out, the miles of fiber optic cable and all of the various hardware upgrades. Was just waiting for something to be built on top of it. Web two oh as you called it. And these were all those companies that were taking advantage of cheap postcrash prices.
Yeah. So the smartest thing I ever did in this where social ever start is I took everything I made and just redistributed it to everybody I saw doing a.
Startup around just every company shing.
That I saw. I wrote a twenty five. I ran out of money quickly, but I layered the world with my twenty five.
Give us some names that we might be familiar with.
The most famous is golf now, LifeLock, Buddy Media, to Mogul, ticket Fly, tweet Deck, Bitly, Surmise, Beta Work, the uber Yeah, so okay, so angel List. I was an investor in So all these things came from me just being in the mix and knowing Fred and reading blogs and just being part of the community. And I was at the right place. Intimes, this doesn't happen very often. I think the AI some AI machine experts now are going to be in this place. But we that was organic growth.
That was the first real Internet. The Internet of ninety nine was infrastructure and promise. The Internet of five and six was the user's mass user onboarding. So you have you know, as well as I've done, I was supposed to do well if you were alive and writing checks in two thousand and six to twenty eleven. Hard not to make money, correct, So so remember that as a master's in business lesson being in the right place at the right time with the checkbook matters.
So that alignment doesn't come along very often. How do you recognize, like at the time and you just spreading the manure, hoping all the plants grow, are you thinking, wow, this is a target rich environment and I got to have a little bit in everything.
It's a good question because I didn't have that much money the idea, and you run on a money fast even when you're reading.
Yah, fifty checks and you're you know, that's.
Fifty checks in quickly. You know, I was flying Israel, I did e Toro, and I'm and I'm also running stock twits, which is also an extra benefit because everybody's pitching me ideas, you're right in the middle. It leads to the Robin Hood story later. But so everybody's pitching the ideas. I'm running a company, I'm writing twenty five k checks, I'm talking to everybody that matters, and there's organic growth. No one was faking it. It was just ballooning.
Whatever you did had traffic, not fake. It may not be leverlasting, but it was real.
So the name social leverage obviously comes from the people that you met on the first round that you began to socialize with. Suddenly everybody's in everybody else's deals, everybody else is seeing what's going on, so happens.
And also, most importantly, the end of financial leverage. So there's a play on words going back to my comedy is like, we are coming out of this era where we realize that financial leverage is not a strategy, it's a tool. Okay, So my play on words here was that social leverage is infinite. You and me doing this podcast, me starting my own podcast. This all is leverage from the network. Right, financial leverage almost brought down the system.
So your social leverage is deal flow, connections, fun, access to start founders, access.
Low capital requirement. It was just a moment of the opposite of what brought down the system. But no one really dove in. Most people think, hey, you give them back to social good. Go No, I'm pro oil. So there is people go, I don't want to invest with a guy who's investing in the social good, And.
I'm like, well, do you drive a car then shut up?
Yeah.
But by the way I digression, I don't understand the whole low carbon investments. We're gonna not give any money to the carbon producers instead will give money to the carbon consumers. How are you moving the needle there? If you're against oil and want to see alternatives come up, isn't there a better way to do it than saying we're just going to give money to people who use carbon?
Yeah? Well, climate now is a big category for PCs and I'm not in it, but there's big developments happening.
If you want to invest in alternative energy, well put your money in there because there's a ton of promise. That fine, But to say no, Mobile, we're just going to invest in ups and FedEx, Amazon, you know this way will not spoil the environment is just kind of misguided.
Yeah. So social levels is just to play on words.
Right, So so we're from well from from social leverage.
Where do you go from there?
How do you as a venture investor? How do you think about what you're putting money into? Are you? What is it about the management team? Is it about the product idea? Is it about the valuation?
What?
What's the decision making process?
It's a great question. Everybody's different. You know. Luckily my mentors Brad Feld, Fred what these are like some of the great stars?
Yeah, Rock start begging Fred to come in the show. Seven years He's like, I don't really do podcasts, all right, Well I'll corner him. I met him somewhere else.
How Morgan shows up Roger Ehrenberg. So so I got very lucky because at that time, remember you're coming out of a nasty bear market. These guys were not. So this is like as like, yeah, these people were coming out of getting their ass kicked for five years and lawsuits and IPOs that went down ninety five percent. So these were not famous people. These were people that were deemed idiots again and truly not idiots, but you know what I mean, they were out of favor.
You're only you're only as good as your last trade.
Correct. So these people were beat up, but they were all smart and they in my team capital. They had capital. They survived, They kept their reputation attack by communicating with their investors. There's a cycle, and they caught the next cycle. Now this cycle. They what what happens to great investors after they go through a cycle. If they're great, they become great investors because they have memory and they have a new muscle that they learned that markets go down
right right like guess what. Fred hates the stock market because he meant, you know, he became a VC. He's like, my job is to invest early, and if I have a chance to sell, I'm not going to be greedy. So luckily I had this great group of mentors, and like you, they were blogging. Not only were they blogging, they were blogging about stuff that I couldn't get in a textbook.
They were wis blog of vc AVC.
And brad feldfel dot com and wrote ther Eremberg at the time, and there it's like, well was Erenburg's blog I event information arbitrage and he was a great writer. You and obviously I have stocks now I have hundreds of writers. And then you know, they just gave this stuff away and they owned their domain, so there wasn't any problems. Like you wrote on Fred's blog, you had to go to Fred's blog. He linked to other people, they picked up the phone. Everybody was moving fast. It
was just organic get the speed going. And so it's just a miracle. And what we focused on was good people and big ideas because you could glob onto Facebook and Twitter, so that that attracted.
So how did you become a pre IPO investor in stocks like Facebook and Twitter.
So at Twitter fred because of Wallstrip, he wrote, the first they led, the first three million dollar round on Twitter had a seventeen million valuation. Think about that right, Like today that seems normal. Back then I was Wallstrip was like a four hundred k valuation. I was doing deals one on two, six hundred grand on one million. Like founders were giving up forty percent of their business. We were coming out of like a hard time like we use kids today, but back then it was like
you're giving up meaty chunks of the business. So things had to move very fast. But really you were betting on people. It wasn't so much price because everything was cheap because you were coming out of that open Much of it didn't happen yet.
Mark Andriesen said, all right, so imagine we overpaid double for Facebook. Who cares it's a six thousand percent return instead of a twelve thousand percent. What does it make a difference?
It does now at these levels, at these So what happened is that story got you know when you say it a thousand times and the twelfth kid graduating twenty years later says the same thing.
It doesn't work It's a difference, and that's why I.
Flash forward today. But back then, yes, so twitterh so Twitter, I had passed. I said, fret, how am I going to make twenty times my money? I had my VC hat on for an hour and I go fret. Twitter would have to be worth half a billion dollars for me to make worth my while. So of course I passed. Now Fred taught me a lesson there and he said, Howard, if you love everything about the product and the team,
Gorgier knows about the press. But I'm Canadian. This goes back to what I said, I'm conservative and believing I just mentally couldn't do a model like these guys because social leverage hadn't been around that long. Network effects were new, So it was mind boggling to think that the president would tweet like Trump or the La Musk would be the richest guy in the world at the time.
So this is, by the way, mentioning the president tweeting. You have to look at the four years of the Trump administration exactly what I asked, golden opportunity for Twitter to turn into something. How did they blow that opportunity?
That?
I guess that post mortem is not your expertise, your pre mortem, you're your much earlier states.
Well, my pre mortem was going to Jack and Evan visualizing that for them and saying, wrap a terminal around Twitter, delay the feed thirty seconds for everybody. So imagine you know, I go to Ted Mertch as a friend of mine. He was Bloomberg here for twenty years. I used to come to this building. He's the guy who put the sung hero.
He put Twitter on the terminal. So because for a lot of people, Twitter became the new tape and they were Bloomberg was smart enough to say, we have to have this in our feed. People can't find out about it after the fact, and they came up with a very clever way to cure it.
Bloomberg didn't come up with the key, Howard and Ted came up. Well, I mean I used to call on Ted. I used to come in here, go to the sixth floor or a suit, complain that there was no candy, and go what kind of mental cases don't have candy in there in their in their hallway? And I would call on Ted. It was I would call Ted, I don't understand. I go, you guys are this is a dangerous problem for you to have outside the walls like Jurassic Park. I go, trades are happening.
You can't have trades away.
And so I said, one day, your headphones are going to start screaming at you that news is breaking outside the terminal. So Ted understood all that, he went and cut the deal of the century. I imagine with Twitter, some poor sales kid nipped inside Twitter comes to Bloomberg like a like a cob into a and try to be order. Tries to meet Twitter's quarter in twenty eleven, comes home with like a thirty million I don't know what the number is, like a ten year Bloomberg deal.
What it was? Good time? So this is me yelling at Doctor's going idiots like I go Jack. That's why I was always mad at management. Don't sell to the one customer who violutely needs the data. So this is where Twitter's mistake was, and Fredick agrees with it. I would go to FREDI go fret, get over to that board meeting, and you tell Jack and Ev to delay the feed thirty seconds. Somebody will call you and pay you a billion dollars to get it in real time
and charge that company. And that's going to be Bloomberg, Reuters, some Warren Buffett, Goldman, Sachs, somebody they can afford to pay you. And if Justin Timberlake farts at a concert, if someone reads it a minute later, it doesn't matter, right. But if a player injures itself in sports, or if the president tweets or been Lodden gets shot, right, the futures will move. And that was their business idea. They
kind of had ten employees and they blew it. Yeah, and so I always still give about that idea.
I still don't understand why Twitter didn't or doesn't acquire stock to It's it's such a now.
It's not even about structors. They should have bought DraftKings. They should have Robinhood. They should have been a broker dealer. There should have been a gambling they should have made money off the transaction.
They think they have this crazy idea that they air. They're the town square.
You know what's in the town scores. A lot of poop and a lot of crazy people. You know why you can't drink out of the nile because people peeing it for a thousand years. The town Score is a dirty, dirty place.
So you end up with a sort of area that is central to so many people's It's got nexus of so many industry correct and so many journalists and celebrities and finance people. And you know, there's medical Twitter, and there's black Twitter, and there's finance Twitter, and there's you know, I get dragged into I mentioned I set up a list of watch companies, right, watch Twitter, Like you have all these communities, and it's astonishing that nobody's figured out a way to monitor it.
Because it was an open protocol. Like when Fred invested, he envisioned it as an open protocol. What do they do? They closed it. It's okay to close it to the people that can afford to pay to open it, not to the regular people. Charging me eight dollars for something i'd pay five grand is not good business, right. Charging me eight dollars for something I'm not willing to pay eight dollars for is not good business. So that was
the mistake. You have the Nile River, it's just filled with data, right, and you decide to let everybody pissing it.
Right, And that's the crazy thing is Twitter is a data source, is really.
Especially in an air of machine learning. Right, So this word elon could come out. Okay, having a unique data set we're jumping around here, but having a unique data set in twenty twenty three, like stock twits, does quadruples our value because people are doing things. You can't get to apply our model, your LM or your model to real time financial people that talk about stocks all day long. You have to have our data.
Yeah, so let's circle back to social leverage. We talked about what you've done on the media side. We've talked about finance side. What else does social leverage focus on? Is it just you know, finance and media or do you look at tech and other things?
So, yeah, we're investing out of our fourth fund. It's one hundred million dollar fund. We went from six million.
And you're closed. You're done, We're closed.
Yeah, so we we we raised six million for our first fund. That fund had Robinhood in it, right last.
The second we'll talk about Robinhood.
Second fund had some more Robinhood and a company called Customer and a few other great companies h both.
How big was the second fund?
Twenty just two of us and then we brought on our third partner, Gary Bennett, who had sold US company to Salesforce and we were doing a lot of enterprise and healthcare. And that's our third fund, which was forty right, and we we liked the capital constrained model. And then our fourth fund will which will be like where we settle in at the future is one hundred million dollar fun.
And you're still doing very early see right.
One to two million dollars check. We lead rounds. We don't have sharp elbows, meaning we don't have if someone wants to put their name first, they can't put their name first. It's about the ten years stuff. So we like to win. Now, what's changes. Social leverage has evolved because the markets move. So I was very heavy and financial services stuck, which was a great lead. Jon Engine. We invested in Rally, Royd road cooy Fin E, Toro, Robinhood, Alpaca,
Very Finance. Why charts you know, so I didn't realize you and why yeah first check and so so yeah, sixty thousand dollars check to Sean Carpenter when running White Charts and it's a great business. The old chard i Q which just sold to S and P. So we really I covered if you were going to build a Bloomberg terminal. And again this is Twitter screwing this up.
Twitter should about all these companies and just giving it stuff away, right, just giving it away for fifty one hundred bucks a Mike, create a two hundred dollars a month Bloomberg terminal that's open.
They've never no one has ever been able to do.
That, including me. If I don't have the bay the terminal, it'll still happen. There'll be a roll up post this crash. No, there'll be a role. I think, well, there will be an effort. I'm not saying it'll be correct. Why wouldn't you. You can buy fintech askeids for ninety cents off the doll You.
Could go back over the past twenty years, and every three or four years there's a story about this is finally the end of the Bloomberg terminal, and six months later they're at old time highs in terms of users. Sorry, nobody has ever been able to do it.
Let me be clear, Berry, you cannot disrupt them. Didn't mean it that way, but I mean that's been the intense stupid intent. There's things you can't be right, Okay, you can't beat open So I'm not going to go take on open AI. I meant it works. Okay, you can't take on the Bloomer. That doesn't mean rich people won't try. But network effects are very powerful. Okay, centralized
network effects are very powerful. The second thing that Bloomberg has is the right customer, of course, and the third thing that Bloomberg has is a will to not lose. What Bloomberg got right was esthetics, talent, uh, not not giving an.
Inch, stability, rock when support right? When was the last time you heard about the terminal going down? But Twitter? You know, every other week you were hearing about that for how long?
Early on Twitter could have set up a customer support desk for five hundred a month and said call us, we'll build you lists instead of what you know they sell the hard work.
I have a behavioral finance list. I have a I have everybody in my phone. I'm on a list. I see everything that everybody tweets in case anybody that says anything non compliant. Compliance tracks that. Also, the watch list is just sort of fun. I have a car list that's fun like that, sort of curated lists. I still, to this day don't understand why Twitter doesn't promote these sorts of things. They're amazing science and technology. I have a list like that that has like seventy thousand followers.
I don't know how that true.
I'll give you my thesis. My thesis is organic growth, Well great is also a drug and it got it infected people's brains, meaning, hey, we already won America, let's go to China. You know how long it took like Bloomberg to open at second office. I imagine ten years. You know fast, Twitter and Facebook and even Robinhood were opening offices in China year two like no one. So I'm saying organic growth was a drug that forced people to think that they were smarter than they were, grow
faster than they were. And oh and by the way, there was zero percent interest rate and venture capitalists were lining up to give you money. Howard.
In addition to running a venture fund, Social Leverage also hosts a podcast called Panic with Friends. So I got so many questions to ask you about. First, what what is this podcast? Then you you talk about well.
You started there was there was podcasts a thing now a little bit.
Should I look into this?
You should? So, I think the podcast is popular in general because you get to have these conversations with people conan being a perfect example. I listen to comedy podcasts, so I listened to Kore and Conan is just so talented.
So he he happens to be just quick digression, which you and I both can't help but do. When I was pitching Masters in Business to Bloomberg, I pitched it as Mark Maron meets Charlie Rose and Mark Man is one of the original pot And by the way, that's back when Charlie Rose pants on who nobody knows going on but Mark Marin. He was the first guy doing long form interviews with people in his industry. And he's
a stand up and a television show producer. But it's let me bring in my friends from the world to stand up comedy and let's dissect what makes something fun.
Correct so inspired like like Jerry's show, inspired by What You Do, inspired by Conan. I started my own podcast in March tenth of twenty twenty. So the market the vix was like.
Oh, so weird, not quite shut down yet, I feel like to shut.
Down in the you know, and I'm like, people were freaking out. As kind of a service to myself and my next yeah, and a service to my network to be able to talk to like Fred Wilson and Jim O'Shaughnessy and you. I said, why don't I just for the thirty days document the panic and start the show called Panic with Friends, where we are our calm voice. So my first inclination with COVID was this will pass. Obviously, because by the.
Day, everybody I think had the same.
Maybe my best call, but it wasn't like I had some great insight. It was just, oh my god, people like, at least we could do is take a deep breath. So I have this idea, we're gonna We're gonna do the opposite of panic, even though the show's called Panic with Friends, And I would get my calmest friends that have been through many cycles and just chat with them about the panic. And at the time that now the market closes, I'm doing a show a day. A great guest.
Jomo Shaughnessy is my first guest, and it was just really good advice. It's like that, and then I start bringing in traders. When the VIC hits eight and I'm like, what are we buying? Oil was negative? I bring on my favorite oil trader and we were just like, if you listen to my podcast, you made fortunes because we were there, and I was so proud of just being.
Makes the voice of reasons.
Guys, you don't have to buy, but if you're not thinking about buying during these weeks, you will you may not want to ever be an investor.
Let me ask you.
I was the idea of the show.
Let me ask you a question because I had a similar experience. I'm curious as to what yours was. What sort of pushback did you get to that rational Hey down thirty percent in a few weeks buying opportunity? What did people say?
The show wasn't like it was more a show of like, you know, I have a big audience, not for the podcast at the time, but I would just I figured, if people ever go back and look for about thirty days of podcasting after day, I was going to put a piece of work out there that would be timeless. Now, I didn't expect to be doing the show for three more years, and it should be called Frolic with Friends at this point. But I was really proud of it. But we just kept going. Canodos are one of my best pals.
It's also you don't realize how much fun it is to sit down with somebody. You and I know each other for a long time. How often do we get to sit down and bs about what we do for two hours?
It's also it's a blast, It's not just a blast. It keeps me ahead of the curve.
And you got to think about who you're talking to. There's some prep work that you wouldn't do otherwise. Hey, let me look into seed investing before I sit down with Howard. Oh look what I've learned. I mean you you must have those sort of experiences. It's that although you have a staff that does all the research, I.
Don't have the staff do everything other than connute myself. And you know, I just love the idea that my daughter, my wife listened to it and they like it. As long as they like it, I'll keep doing it. Every time I say I quit, my wife goes, I listened while I'm hiking, and go all right, I'll keep.
Doing So what do you What have you learned from hosting a podcast?
Well, I've learned that people are great, right, I've learned obviously because I don't.
Want you so the opposite of what you learn from Twitter.
Yeah, I learned that just there's so many smart people and I also learn a lot about myself in I don't know anything, and I do love to make my guest laugh. Like part of the thing is if you can make the friends and the Jim o'shaughness is and the berries laugh, that is the only gift that I was born with, is to probe and make them giggle or just look at themselves a little less seriously. Right, So when I see a flaw in person, whether it's Kramer or whether it's you know, Trump, I look at
it like, man, these are bad life decisions. Like Jim could have been me. He could have he had the center of the universe. I look at Jim, and he went media. He could have gone venture. Right, maybe he did do venture and he doesn't talk about it.
He did okay for himself.
To be fair saying he didn't make money, I'm saying he's slapping on makeup. But he could have been, and he could have been.
He's got a daily grind that looks from the outside like it's you had to pick one of two lifestyles. I think Andreasen's lifestyle is a little more less less stressful than the lifestyle that correct.
So I feel like I chose the their side of the road. I could have gone down the media side, but I still look at the media more like the enemy. But I also don't look at it like Trump and Elon must look like it. They're out to get me, and I know they are out to get them and whatever clicks.
And they're out to get paid. So you know, whenever I'm going to interrupt again because I feel like, no, we're friends, I feel like this is a conversation, not not a Q and A. And I apologize to those people who are expecting a Q and A whenever I hit. People talk about media bias, and a lot of it is just lazy journalism and what is extreme, what is outrageous? What is sensationalistic? How do we get the views? How
do we get the clicks? It's not the sort of I think the right misunderstands the left and the left misunderstands the whole thing. It's a business and it's about generating and capturing attention, not we're put wishing the left versus the rights out of view. Fox News is its own animal. It has its own origin story that comes from a very different place. But when you just look at media in general, yellow journalism has been around for centuries, literally centuries.
Yeah, I just loved the idea. I was born with the gift to laugh at myself, so.
Let's talk about So let's talk about laughing at yourself. And I'm going to insert myself even deeper into the conversation. I wrote a column in twenty twenty one for Bloomberg what my worst trades taught me about investing, and I mentioned you said it's twenty fourteen. I remember it's twenty fifteen, but I wouldn't swear to it. The line I said is Howard, that's the dumbest investment idea I ever heard. I'm omitting the F bomb that was in the middle.
You and I were talking. We were in San Francisco. I have a vivid recollection of the Ferry building being behind us. We were out on the deck behind where a couple of those restaurants were, and you were pitching me on this ridiculous idea for an app that's going to give away free trades to millennials on their phone. That's like, you know, the world's moving to passive. Who wants free trading? Where is this going? So first kudos to you to investing in robin Hood when I was
too stupid to see it. But second, how did you come across the robin Hood opportunity and what made you so enthusiastic about it?
The first of all, it was it was just E trade two point zero. So my big idea, like even with Wallstrip was CNBC on YouTube. Robinhood was just an extension of what each trade.
Each trade on the phone, so each trade to me, if you would have pitched it to me like that, because my first gig in the business was at EA Trade, I would have been all over it.
Yes, so it's my fault, I totally, So again I'm in. It was in a power position on some level because people needed stock twits to spam to get users, so we were at gateway to traffic much like Twitter. Uh huh okay. So, but the people that came to me were people were financial apps, and because I was too wimpy to build my own brokerage in twenty thirteen, just like you said, vcs are not perfect. They are like moths.
And at the time, the world of VC was enamored with disrupting Vanguard, so the VC model was all the V eight trillion get to tell you my hack. So the vcs were seeing the world one way. I saw the world another way. So the VCS were like, we got to go after the assets under management. I was like, who cares those are worth? You know, red dollar? You need to get the customer and you need you know.
So it wasn't like any genius insight. It was just all the money was trying to disrupt Vanguard, and Vanguard wasn't disruptible. You couldn't build a product that was twenty times better than Vanguard, whereas E trade they were spending billions on advertisements.
So great emphasizing but expensive average.
So at the time in twenty thirteen, you could look through the financial statements of Schwab and TD public statements and they were spending one hundred and fifty dollars for a customer acquisition. So this is the math that I applied.
You could acquire them for next to nothing.
How about zero and lesson zero? Right? Meaning I show my friend my free trade on my phone. He didn't see a TV commercial.
What does that cost you less.
Than one bucks? Because one the one customer led to ten. So it was like Uber.
Grows, but you're giving them a free trade, You're giving them a free share of stock. Understand that, but what is that twenty bucks?
Thirty bucks? Not even you can't think like that. As a seed investor, you can now that interestate you five percent.
If Schwab is spending a buck fifty per client and you're spending one share of a five dollars stock, your cost of acquisition is five dollars. It's meaningless.
Who cares, right, So at worst it was five dollars, but at best it was still negative because that person told five other people. You got to understand how that type of networking was virals organic, so it was Snapchat but with trading. So think about this, do the map. If I acquire a million users and I'm a Schwab and I did that for ten dollars, you'd be CEO
of the company. Bring me the kid that got me a million users without a tv AD Right now, your all your workers were trying to kill you because they'd be slow down, dude, you're you're not supposed to work that hard. But this was my idea was like, if you can acquire a million users at zero, you're worth one hundred and fifty million dollars.
Yep.
So if I invest at an eight million dollar valuation. Let me put up the check. I'm up nineteen times my money in an ARB trade. So it was just an AR bike.
And again, you you should have explained that to me.
Well, at the time, I probably had gas from something I'd eaten in San Francisco and I had other things on my mind. No, but the idea then was it was very hard for other people to see that because they were looking for a business model.
Well, now that you've explained that, it's easy to say.
And so what I didn't get right for me? Again, a lot of this is luck. I didn't expect it to be thirty bill you know. So we did sell some along the way, and that was the beauty of this market. Markets have become they're a liquid a little bit right now. But there became liquidity in the private market, which is what I also helped build by investing an angel List and others. So I was just part of that whole generation which was fun, which created liquidity in the system.
So how early were you in robinhood? We were the first check, you were literally the first check. Yeah, they go public for thirty five billion dollars. That that's got to put a few jingles.
Yeah, we're we're on a few lists for fun returns.
So you've you're selling a little bit along the way. Yeah, but it's got to be one hundred x plus, right, I know you can't disclose that, but yeah, it's huge. So now you're in a very different situation instead of thinking about.
Yeah, now you pay me to come on the podcast.
Right, right, But but for other people we have, we have clients who sold businesses, we have other people who've had these giant wind falls. Suddenly it's a very different calculus. You're saying, all right, I'm no longer worrying about multiplying this. How do I go about protecting this giant pool capital? And how do I not get killed tax wise?
So?
Do you collar this? Do you sell it? What do you do when suddenly the bank calls and says, hey, there's a couple extra zeros in your bank account, put it at the end of your your balance. What sort of financial response do you take to that?
Well, the first thing you do is I tell everybody, is you hide it from your your wife and kids? Right, yeah, my kids.
Sorry, that Robin Hood thing didn't work.
My kids think I'm in trying to still disrupt bankguard. No. So the first thing you do is try and just appreciate, like you know, the good fortune. Yeah, yeah, set up the trust.
Gratitude all that stuff is fantastic.
Then set up the trust and you realize that you have replying to your children.
Right you start moving money into various trusts. You're worth more dead than alive. You don't want them to know that.
Yes, yes, yes you you he.
Incentive to detach the break lines. We don't want that.
I mean, there's nothing special. We as a conservative person.
Do you do you color the because that's a big money.
We We distributed the stock to r LPs so so so.
A lot of so it's up to them to do with this goes to.
Degreed at the end of the secon. Yeah, you know again. I was mentored by Fred Wilson. We've been joking.
Fred says, hit the bit.
Fred is always because he went through nineteen ninety nine, He's not he went through.
He's not looking to optimize.
He's not looking to optimize.
That is the regret minimization strategy. That's what Fred deploys.
I've made a few mistakes in my life and investing that Fred laughs at or not laughs, but I appreciate you. And there do you think where I've optimized over optimized for entry? Right? Okay? Fred has always said if everything lines up optimized, don't worry.
About it, optimize for exit.
So so I've always optimized correctit, meaning I'm never going to sell the top right, and I'm generally going to sell on the way out.
You don't even get a ribbon when you top to I've top ticked two stocks in my life when I was on a trading desk. You don't ring the ball exchange, no one, No one gives you a plaque. It's like, oh, that was a lot of efforts for nothing.
So our job is to return capital as fast as we can.
You did that.
There's a there is a thing in the venture industry that's kind of a joke, which is you know I R R. Well, y r R might mean something if you're returning cash, right, so.
The eternal rate of return, yes, but you're returning actual share.
So in our thing, it's dollars return, so it's DPI, and so the higher your DPI, now your I R R is what matters. When you have a five to ten DPI and you've returned that much cash on cash. People return your calls. So I was mentored by the people that said, focus on DPI. So if you have a chance to return your cash, you if you return your cash in twenty sixteen, we returned some cash in
robin in twenty sixteen, very early. But say those LPs bought bitcoin, right, they did, okay, Meaning my job isn't to manage their money. My job is when when I entered a company, I said, if this gets to a billion, I got to sell some and it got to a billion. You can't change. Yeah, of course you can change. But I'm an early stage investor. I mean sell everything.
You sold a little bit to take some house money off the table. You still had a big slug waiting to see if it did any better.
Yes, and it did so even from there, it's thirty five. Oh, it's unbelievable. Now we made the decision and our LPs agreed that we are as soon as we can sell, we will return the shares to the LPs. Let them decide me. They have their own tax problem, LP, they have their other issues. Let us return the stock market. They want to hold it, they can hold it for me.
What are the rules for early events pre IPO investors six months, so you basically give them pre ip shares.
No, we give them we have to wait legally for the shares to be cleaned up. We cleaned them up day one. Give them their shares, their free trading can hold them and give them to their kids. That's not our job. We distributed market.
And the IPO was one twenty twenty one.
Yeah, late twenty twenty one. Now, a lot of people around this time started cutting up their funds like Andresen and Sequoia to be permanent capital. These are the signs of the top where they're like, hey, we now have an evergreen fund that will hold these stocks. You know. So there were all these signs late twenty one one.
That's not a great call there. Yeah.
So so again, you know, we consistently try and return capital. That is our job.
So all told, your experience with robin Hood ended up being pretty pretty pretty good.
Yeah, pretty good. We had a few other ones, but ye, Robinhood. What was fun about Robinhood is that we saw other people didn't like it, and that still goes to our strategy today is when you're betting on people, you have to have domain experience which we had in Robinhood. We have to get the timing right. That's a little bit of luck. The world was ready for an app like this.
And then the pandemic certainly didn't hurt.
Didn't hurt, but the execution that they had early was fantastic.
Really quite fascinating. So I have a very vivid recollection of you being on my partner's podcast, Compound and Friends, Josh Brown and Michael Batnick, and I want to say it was like October twenty one, is that about right? And you're like, the market screaming higher, We're up from the lows. At the end of March twenty twenty the markets up sixty eight percent for a calendar year, and twenty twenty one the S and P five hundreds up
twenty eight percent. And you couldn't have been more uncomfortable. You just said, wherever you look signs of problems coming. What were you seeing in October twenty one that made you and not just public markets. You were talking about private marketaluations, demands from founders and startups. Like everything you said was bubblicious.
So earlier in the year, in April, you know, I rarely do serious interviews, and I came on Joe's podcast with Tracy and they were great and they were like asking me questions and it went I was like, you know, this is stupid. And we had raised one hundred million in late twenty twenty one. Again we went from six, as I said, to twenty to forty one hundred. That hundred was easy really, So when it was easy, it was like it was like it was like the Costanza
venture capital. At that point, I'm like, this has been so hard for us. We're good. Why are the people giving us one hundred What have we done to deserve this? So we was kind of like castandzing ourselves, and so we stopped writing checks, which is one of our best decides.
So wait, hold on a second before we get to that. So you raise one hundred million, now you have a track record that's you know, Robin Hood.
Or people wired us money.
So was this there's too much money around people have become reckless with their ca capital or is this a little imposter syndrome. Hey we're good, but we're not that good. This is a problem. Or a little bit of everything.
A little bit of everything plus a lot of it's not my own money. Right, and I'm conservative, and I'm like, nothing makes sense to me, and I'm getting three minutes to decide on a deal. We're still doing business on zoom. I'm not a zoom guy, right, I just like this.
You need to see people's body line.
I can't take three months to do it now, meaning okay, I lose Stille in three months. But like, shouldn't I have dinner with you? Shouldn't I see if you're like treat the staff well? Shouldn't I see what your co founder looks like. I don't even know how tall you are. So again, God bless the people that wrote checks. So my partner Gary wrote a few good checks during COVID I didn't.
So starting in early twenty twenty one, the social leverage bigot is shut.
Off almost in twenty twenty because March twenty twenty I start the podcast and there was so much opportunity in the public market right that it was saying, how are you not buying these stocks? What are you worried about private markets when you can make ten x on a public stuff with liquidity? So I lost. I got lost in the public markets. And of course you know, some cool companies got funded. But really those first three months of COVID were like you would like a motorcycle accident,
You get up and you go, we're not dead. And so it wasn't like I was in the mood of check writing. But by like June of twenty twenty, market was open, baby, and people were writing checks right. And for a couple months I was excited. You write checks, We have money, people love us, we know what we're doing. So we wrote a few checks. But then I like, by the end of the year, I'm.
Like, this has gotten crazy.
The prices were tripling, and people would be that on treason line. Hey, if you're going to make a thousand on your money, what's the difference if you paid triple on the opening price. But that math, if you really put it in a calculator, becomes a problem. Becomes a problem just if you're wrong. Because now the IRR, which doesn't important to me, is important. If you've invested someone's money and it takes three extra years, you're not going to beat anybody, right. And so my job is not
just about DPI. It also is about IRR because I'm going to put your money to work. The clock starts ticking, and you know, delaying an exit three years is a real thing. So the risk I just felt the asymmetric risk.
So wait, let's let's let's just talk about IRR briefly. Typical venture funds. If I commit one hundred dollars to a venture fund, a great fund, I'll get a capital call right away for right, and then the next January I'll get another call for twenty five bucks and then the fuss so maybe over the course of three four, five years, three to four years. So this way they can keep They're not sitting with your cash worrying. This is just showing zero return or back when you know
the tenure was two percent. Is showing almost no return you have to worry about you can until they call it.
Yeah, and so we It wasn't like a lack of seeing things, you know, because e commerce was booming after COVID, and you know, everybody was believing that, you know, the future was e commerce and it still is. But people were locked down and behaviors were changing. People as they thought that would be forever. You know, we're never going to go to it.
It went from this is temporary to everything's different.
Now we will see the future, right, And I didn't see the future the same way because I live in Arizona. I was hiking. Phoenix wasn't closed. There was no clue to Phoenix. Sure so, and what happened is this phenomena of what took four years. The bcs were putting one hundred percent of the money to work in twelve months out raising their next fund. So there was a lot of fomo. And I have to admit that the fomo for sure caught up with me personally, so as schmuck
insurance against me not writing checks, I did write. And I remember Packy being on Joshua Sure and I was making fun of the whole thing.
Paki is great.
I have twenty five K in one of his funds, and I was yelling at him. I'm like, you know, I gave you money. It didn't mean to just blow it in a casino.
For people who don't know who pack he is, just.
Give He's just a really smart young.
Guy, got very young. He watched his first fund right into the teeth of the mess.
Yeah, and so he was. He was really a fun thinker. And again we were all locked around house reading smart people, and he had good opinions and he was into crypto, and I'm not into crypto, so I said, I started placing personal bets with money that I had made just in case I was wrong, but not my LP's money. I wasn't willing to make crazy bets with LP's money that just goes to social This is what we called.
The fun account pull off five percent trade away. If you blow it up, who cares. It's a small part.
So one of the insts I got from my schmuck insurance money is that no, I was a schmuck for writing the checks, and the people that I gave the money to God blessed him as smart as they were. I think we're schmucks too, not like bad people, just caught up in the moment. Evaluations don't matter.
But that's why we have schmock insurance and don't use our LP's money for these dumb ideas. At times when you think this isn't gonna work out, Yeah, but I can't. I feel like I have to still be in the game.
Yeah. I feel our best work as a firm was not writing even though we had great returns for our first funds, I feel our best work was not writing checks. In twenty one and twenty two.
That's what Buffett says is, you know, unlike the public markets, where you have to be invested, you could stand at the plate with the bat at your shoulder and not take a swin.
Now and Treason's defense, he would argue for your timing the market. And so again, I don't know if it's right or wrong. And in a way I did time the market, and so maybe I just got lucky. But my beef for the last six months, and it's quite public, my beef is with my own industry, is that they were talking out of both sides, meaning they were writing those checks and then also say fed stupid things are overvalued, and I'm like, you can't have it both ways. You should have been.
More so that what did you see in twenty twenty one that you thought was egregious and ridiculous? What were the signposts that led you to say this is just out of hand.
Well, not meeting founders and just assuming that you could.
Create twenty one at that point. Oh, it was worse because we were wide. You know, we're pretty open. By twenty one, we were open, but.
The money was raised and being deployed, and no one was taking their time. Everybody felt like get this money, ye rush, and the LP's had it, the GPS had it, the media had it. And don't get me wrong, I had it, but I didn't have it with other people's money. I had it with my own money. So we probed right, Like I gave money to a lot of young managers just to see because I was a young manager myself.
But that was like sixty seven years ago, right, you haven't been a young manager since World War Two.
So no, but you know, and O five six, when I started wall strip and got the bug, I was in my you know, I hadn't seen that much. So maybe I didn't know what was going on. Maybe I'm the old guy. And so as I said, to keep that social leverage going, I feel the most important part of being an angel investor and I don't consider myself a venture capitalist. I consider myself a seed kind of more. An angelure is you have to invest, can't just commentate. And so by investing, that helped me see how dumb
I was. And it's not that other people are dumb. That the markets are markets and they're open, but you could see the mistakes piling up and now here is where we're at.
So so you put a couple of percent of you.
Yeah, we've deployed thirty percent now but three year old fund.
But but last year, with your own pocket, you put a couple of percent of your net worth. Oh yeah, what you call schmuck insurance is just hey, I'm just keeping a toe in the water. You didn't any big crazy bets.
No, And I got very lucky because robin Hood benefited from covid E Toro. I also was an early investor in a couple of crypto funds that had Salana. So I mean, I was a lucky participator in this boom, which made me think maybe I had to speculate to just keep the oil going. And so I made a lot of personal luckily, not like anything significant, but it taught me a lot about what the end of a cycle looks like. So we just saw it.
So here we are in the second quarter of twenty twenty three. When you look around, our evaluations remotely as crazy. It was a rough twenty twenty two for both stocks, bonds and private What do you see today and what are you looking out at?
It feels like like I've been talking about for a year. I'm like bond boy, I never thought i'd be I never had owned a bond or a treasure.
Hey, you could get tax free munis now. I don't know if Arizona does a lot of muni writing, but you know, if after tax you're getting four to four and a half percent, that's fantastic. You haven't seen that in decades.
Yeah, four years ago I invested in Max my interest my friend Gary, because he was he was aggregating. He was sending out your cash to many different accounts and getting you one percent, and I was like one percent better than zero. So I invested in that company. No, everybody made fun of that company, right, and that was a company that's now important because you can get five percent on your cash on the internet, distributed through FDIIC through many.
So it's quarter million per bank. So you're way way.
Below software years ago. So again like it it just by participating in the markets, you see things. But we are in a much different environment than I've ever seen now because we have so much cash raise not deployed. The money is out there the young generation, you know, it's very mobile, they're very smart, and you know, it's just a confusing time because interest rates have shot up and we're seeing the first signs of breakage, right, we're seeing things break well.
Silicon Valley broke that that was kind of a crazy run on the bank that you could blame a handful of venture capitalists for starting. I think they were trying to do the right thing by their by their portfolio companies. But you know, we could have just easily rowed that out.
And well, I don't give them that credit. The Silicon Valley Bank left a black hole for nine months in the bouncy and the Internet found it. And when the Internet finds it and something tips, everybody wants to take credit or not take credit for it. The Internet found a hole, right, and it just imploded. Much like game Stop. Silicon Bay Bank was the opposite of Game Stop. Game Stop had a different type of hole. There were some
people showing in short interests and they had models. The hedge funds had models that turned out to be outdated, right meaning wrong.
They were wrong.
The models were not accounting for eight million Robin Hood people clicking a green button at the same time, and that's what created game Stop. And the same thing happened to Silicon Valley Bank and ree everybody hit withdrawal at the same.
Time, Silicon Valley Bank had hedges on their long treasury positions as long duration, which the long duration trade is the wrong trade while rates are going up, so the hedges offset that and they took the hedges off. They rang the bell and gave themselves.
Get said it in Wall Street. They were wreckable. They left themselves wreckable, and they were the Internet wrecked them. The GameStop hedge funds were wreckable because they didn't understand Internet scale. They hadn't seen a model that had Robinhood people pushing this button over at the same time with lever on short term options. So their three standard deviations was an old model. That was it.
All right, I only have you for a handful of minutes before you have to go to your next meeting. So let's jump to our favorite questions that we ask all our guests, starting with you know, you talked about being locked down and podcasting and streaming. What were you consuming? What's been keeping you entertained over the past couple of years.
Well, I'm a media guy. I'm passing about like a twenty four all these like like a great studio producing stuff. So I'm a media hound. I watch everything on Hulu I ask you. You just gave me Daisy Jones and the sixth which is fantastic. And I know the guy at Amazon that did it. I actually met at my event.
He's a buddy of my bat Nicks. I bumped into him. He reached our blogs Lindsay and Palooza.
Here's what's so fun about our business?
So celebrities reading me, Yeah, and they like me. When people reached.
Out, freaking me out.
So so Ben Klimber of Odinky told me a story when I had him on the podcast that he's running this blog on watches. It's kind of but not quite a business yet. And he gets an email from some guy named John Mayer who says, listen, I want to talk to you about watches. I got a bunch of watches I'd love to have stuff by. So he calls the guy back and lo and behold, it's not some guy named John Mayer. It's the rock star John Mayer who shows up at their studio brings him back. Then
he rolled heavy, wrote a big bag of watches. Now security is a little different, and they that was the first talking watches and that blew up and became a regular feature. So when you put yourself out there in the public. You have no idea what's gonna what's magic. By the way, which I was writing in public at your Coronado Island event, is where I met the guy I would eventually hire and become my partner. And he's become I'm a star. Josh Brown is the partner Rehult's
Wealth Management. But for you, I never would have met Josh. Yeah. And by the way, but for me writing a blog, Josh never would have cared who I was.
The best part of my job and people won't believe it because I get the money. Is that you met Josh, is that we launched thousands of people on stock puts into investing, tens of thousands of people that my kids friends call me for how to do their who to get recruited at a health tech company. Placing young people in careers is the greatest feeling in your life. The COVID nightmare of kids working from home in zoom it depresses. No, we're not. It is the biggest problem right now. But
we're already off topic. In terms of media. I love it all. I don't take a Jones, give me give me another one. Beef my friends at eight twenty four, So I.
Just added that is that it's very dark and interesting.
Yeah, and it's A twenty five is very.
Good and very old. Guy who's on it is also very good.
Very good.
I haven't watched it yet.
So someone who reads my blog, Robbie Nandne, who is a partner at A twenty four which was like the A sixteen Z date of Media Big Studio, and he just emailed me on my blog one day, goes Dad, I'm fascinating, you know, And I'm always fascinated that smart people are reading me. And you know, longtime reader, first time commenter, you get that all the time too, and
it just amazes me who reads what I write? And I'm not so fascinating and trying to meet the biggest celebrities, right the fact that Robbie is a creator and did the Romi Show, and I'm fascinated by like media because I did it like myself, and I don't know. It's like it's like, you know, with the Wizard of Oz when you meet the wizard like you knows a s getting to see behind the curtain and realizing nothing's going
on behind the curtain. You have to see it to believe my CBS meeting, as stupid as it was was, to have that meaning and be in that room, you can't make it up.
I picture the episode of Seinfeld where they're pitching the Seinfeld Chronicles to NBC. To me, that's the show. What something happens, that's the show. Why are you watching it? It's on television not yet.
So to know that I lived it. People can't take that away from me. And to know when to meet people that create great content. And we have a documentary that you're coming to see.
So this is financial advice. You can say it on the.
This is not financial advice. It's going to be fantastic.
By the way, we had the Dosee guy at future Proof and it's it's like curby your enthusiasm for money. It's so cringey watching this guy go from nothing to the greatest dollary and then you're watching him blow it up and you ask a screen Adam, you know what's gonna happen. You see it coming, and he is just so oblivious to what's the freight train barreling down at him. It's very hard to take your eyes.
Odds me making money or getting my money back or five percent zero show Labor of Love with Chris Temple created this incredible documentary. The reviews are insane. By the time this comes out, you will know that it is by Tribeca Film Things Right, it's one for one on my movie. I have a red cashmere suit to wear to the opening. What is the goal? My t score? My testosterone score. It's a new thing that I'm launching where people wear their te score around their neck.
What is the what is the launch date of this is financial advice?
The opening date the Tribecca debut is in June.
Oh so you still have Monster? Yeah, so so so I love media clearly. Let's let's talk about mentors. You mentioned Fred Wilson. Who else helped shape your career besides Fred? Or Is Fred really the most significant mentor?
No, obviously, I mean again, I don't speak to him all the time, but he allows me to check in and ask him questions. A lot of my LPs are my mentors, even though they give me money. I'm there like I've surrounded myself like Paul Grimberg, who's chairman of Exos Bank, and I've met.
Some really interesting LPs at your last event.
So my LPs are my mentors. Roger Ehrenberg, Brad Feld, people that trusted me, and you know, they don't They know that I'm weird. They believe in me, but they know also that I don't know what I'm doing, and so they pick up the phone because they to this day.
Do you feel like you don't know what you're doing?
Yeah?
Are you really that deep into the imposter syndrome thing?
No, I'm not deep into it, like they've not even.
I joke about it. I'm like, I don't think it really exists. He's like, no, No, you got to talk to people who want sociopaths like you, it actually exists.
Yeah, I think I'm I think I don't have it. I just have been humbled ridiculously a few times. That's fair that I have to be really careful and again writing.
Both private and public markets are a very humbling place.
Yeah. So if I'm Elon Musk and.
You have a lot to be humble about is the old joke.
So if Elon Musk, what bugs me about it is is there nobody whispering in his ear that he looks like an ass. I would hope that my wife and my daughter would come to me and stop me before I embarrass myself day after day. Now, is he embarrassed? No, So again, I'm not judging.
But that's just hoping that he should be.
I'm hoping that my wife and my daughter who read my blog will say, you're full of yourself. You need to tone it down and guess what, they're pretty good at telling.
Me that that's the importance of having some no men around you. I tweet something that's tenth as idiotic as Elon Musk, and the the tweet is barely live when bat Nick comes storming into my office, idiot, delete that. You know that you're like junior partner here and I'm the chairman.
I don't care.
That's the dumbest thing you have a tweet. Take that down. Okay, I don't even think about it anymore. Maybe that was my response five years ago. Now Batnick says that's a bad tweet. I'm like, okay, I don't even think about it. It's automatic. What Elon Musk needs is a Batnick. If he had a Batnick, he wouldn't have pissed forty four billion dollars away.
Well, he has people cheering him on.
Yeah, he's the opposite. He has anti Batnicks. He has people the soulging his worst instincts, rather than saying, that's a lot of money for a really crappy property that nobody's ever been able to monetize and its business model is awful, and you're running two or more other companies, maybe you should just keep tweeting for free.
Nobody said that that. Yeah. I wrote about this recently. We wanted to disrupt television and we got television times one hundred, so we wanted we wanted to get rid of Jim Kramer. We got twenty Jim Kramer with more power than we thought. That's what they would have. Jim Kramer is lightweight compared to the Chama, David Sash and Laughing el Mos, the Peter Thiels. You just don't know if they're happy about the system blowing up. You can't tell if they like it, and I guess we shouldn't
like it. I love the system. I don't think it's perfect. I love the things work. They're not working great, but relative to everywhere else, it's a miracle.
Jamath turns his business into a family office. I think he's happy with it. I can't. I can't tell you about everybody else. Some of these guys, I think if their daddy's hugged them when they were younger, we could avoid it a lot. I don't know a lot of adjida. I don't want to play pop psychologists to any.
No one hugged me, okay, and you worked at all? Right, that's right. I did have Jack one time saying on Twitter to one of my tweets that I needed a hug. And I think one of the proudest father moments I had was that my daughter came right into the thread and said he got plenty of hug ah. So that's awesome. When your daughter is defending you to check its dorsey on Twitter her and he disappears from the conversation. He just never responded, can't respond. My daughter destroyed him. He
didn't know what he was walking into this. That was my problem with Twitter. I go, Jack, you don't know how to use your own product. My twenty four year old daughter just shamed you off your own product. That's she's a great girl. Like she's great. She lives Upper East, so I'm really proud she's here. One of the proudest things I have. Yeah, So one of the proudest things I have is my daughter lives in New York living the entrepreneur as a father who's an entrepreneur, an American
born Canada, but an American. To see to have your daughter live in New York, the entrepreneurial city in America, Huh, this is that's good, Daddy, she likes New York. You want your kid to like New York.
You it's not for everybody. I try it, but right, yeah, or any large city like Chicago or my I.
Was not the same city. New York is closest to being the same city. Ain't the same city.
That's really interesting. Let's talk about books. What are some of your favorites. What are you reading right now?
I have not read a lot of books in the last twenty years. Three books that define that I still remember vividly and as the Agasy book. Ob Yeah, the Shoe Dog Book, which is going to spawn one hundred movies, obviously, just his first.
Yeah, that was that was good. It was good. I don't know if i'd call it great, but it was so.
It was a business book, yeah, Meaning if you're an internet entrepreneur and haven't read Shoe Dog, you're not going to be a good entrepreneur. To see that he went ten years before he got to ten million in sales. These kids today with their global growth in the first week. So No Shoe Dog was great. Reminiscent of Stock Operator was great. There's just not that many books that I get.
Hey man, that's that's three solid books right there. You're okay with it. Our last two questions, what sort of advice would you give a recent college grad interested in a career in either seed investing or venture capital.
Well, first, be nice to your parents because you're gonna need capital, right, and the first thing is right, stop thinking about who's reading it. You know, we're an investment in Beehive, which is like a newsletter writing product, or whether you're going to do it on mirror wherever you're going to or Twitter wherever it's easiest. Start writing and stop worrying about who's reading it. Write what you want to write about, and that's how you build a domain experience.
You have to have be passionate about something because that will help you see around corners. Whether if my son is golf for my daughter she's not quite sure yet. It's New York and it's like operations. If you don't do it and do it you can't possibly know that you're going to be good at it. So the faster you figure out something that you want to do, And I think the easiest thing to do is write that's something that people should do. The second most important thing
is forget about the job title. Go work at a company whose product is flying off the shelf. So when we were kids, you and I and I was a stockbroker and whatever your first job was. You're a lawyer. Our job was to just follow directions right right, Like our job was simply you get out there and you follow this rule book and you make two hundred calls a day and so and so and so and so you know what I mean, like pick up that phone. We've seen the movies. Wait a minute, what's the.
Question you used to get a grid? How many do an axe every call?
And I forget the question? Yeah, what's the question?
So what advice would you give these kids who want to start out? And see it our VC investments.
So so the thing is you've got to go and not worry about the title. So that if you're not worried about the title, go work at a company whose product is flying off the shelf. Don't go push a rock up a hill. So forget about the title what your pay is. You are going to see things that you won't see anywhere else. If you work at a company whose product is flying off the shelf, there'll be so much work to do, they'll be you won't have to hide out. You could shine because there are holes
to fill. So the biggest mistake young people make is they want to just get a job for a certain salary and work at a bank. Go like, whether it's Manscape, one of our companies, or whether it was the messaging app, whatever is flying off the shelves, Get yourself in that room, Take a maintenance job, take an office manager job, but just get in the door.
And our final question, what do you know about the world of seed investing that you wish you knew seventy five years ago when you were first getting started.
You know, luckily, I think it's such a new thing that I don't know if there was anything. I think that the thing that I got lucky more than no, is it was just the right time right like that there was people like Fred and Roger writing and Brad Felder writing. So what do I wish I knew?
And I don't mean buy Apple at two dollars. I mean, what would have been useful earlier in your career that you now feels a bit of hard won wisdom.
I think I got lucky because going to the market first and exit seeing how markets crash and really seeing like how a cycle worked before I got into angel investing was actually lucky. So I would say to those people who think they want to be seed investors, is open a Robinhood account, even if it's one like learn what it feels like to lose money. Learn what it feels like to both make money and feel you for it right and feel like you're an idiot, and that
will get you a feel and now you know. Obviously you can go to Vegas or go on draftings and get the same thing. But those are very much not positive expectancy type things.
Like the stock market, whereas the market is. Yeah, Howard, thanks so much for being so generous with your time. Really, this has been a delight we have been speaking with Howard Linsen. He is the co founder of stock Twitz, the founder of wall Strip, the managing partner and founder of Social Leverage, a pre IPO investor in Facebook, in Twitter, and the really the first check into Robinhood. Is that right?
That's amazing. If you enjoy this conversation, well, be sure and check out any of our previous four hundred and ninety six discussions we've had over the past eight and a half years. You can find those at YouTube, iTunes, Spotify, wherever you find your favorite podcasts. Sign up for my daily reading list at ridults dot com. Follow me on Twitter at Ridolts, Follow all of the fine family of Bloomberg Podcasts at Podcasts. I would be remiss if I did not thank the crack staff that helps me put
these conversations together each week. Samantha Danzinger is my audio engineer. Harris Wold is my producer. Attika Balbrunn is my project manager. Sean Russo is my researcher. I'm Barry Ridolts. You've been listening to Masters in Business on Bloomberg Radio
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