Video Of The Week: My talk with Sarah Lacy

We've already been discussing some of the things that I said in this talk, but here's the whole thing.

It's long, ~90mins, but we covered a lot of ground and if you have some time this weekend, it might be worth putting on the big screen and letting it run while you drink coffee, read, or clean the house 🙂

#VC & Technology

Comments (Archived):

  1. William Mougayar

    I liked your Beatles analogy about the 4 Twitter founders & David Karp as the one-man band. Both models work and will have long lasting legacies.These 4 entrepreneurs are already going for their second acts (solo, like the Beatles when they broke-up), and I can’t wait to see what Karp will do in 4 years.

    1. jason wright

      what are the fab four doing now?

      1. William Mougayar

        Jack – SquareEv – MediumBiz- Jelly Jason – Obvious/Medium w/EvIf Jason had a company called Candy, then you could put them in a sentence- Medium Square Jelly Candy.

        1. fredwilson

          last time i checked Jason was working on Branch with Josh Miller so it would be Medium Square Jelly Branch

          1. William Mougayar

            That’s it. I knew there was a sentence somewhere.

          2. Matt A. Myers

            Quite the visual

  2. jason wright

    what was the event & venue?and,… how does this work? do they bug you until your life becomes a misery and you eventually cave in and agree to do it, and is there a prep chat beforehand about the interview or do you just freewheel through?

    1. fredwilson

      Pando Monthly

      1. jason wright

        Monthly?i thought it was Daily

        1. Vineeth Kariappa

          When stuff don’t work, pivot.

          1. jason wright

            confusing brand dilution. might only go there Pando Yearly.

  3. AlexBangash

    I loved the talk. I listened to it twice.My favorite parts:The part about Kevin Ryan. (IMO If he starts a VC firm in New York, it would be a one that could seriously challenge top firms in NYC–much like Andreessen did in the Valley )Investing in Twitter, tumblr, and Zyna in a 3 month periodComparing Twitter founding/management team to BeatlesNot having operational experience and not making any claims to doing a CEO’s job better than them.Extreme revulsion of working with corporate VC’sVenture, as we know it will not exist in 25 years.Why 25 years, why not 10 years? The rate of change of the last 10 years has been amazing. Look at Y Combinator, First Round Capital, Angel list, A-H, Kickstarter and of course USV –not just new firms but newer models, some of course more so than others.I recently talked with with one of the most successful funds of the last decade. They said confidentially that they were completely re-inventing themselves. I wonder when and how Fred will re-invent himself to stay ascendant.

  4. John Revay

    Cleaning the house > doing the dishes

  5. BillMcNeely

    I am watching the John Doerr Pando Monthly chat right now on my channel StartupGuruTV.. I can’t wait to add your chat to the schedule.On a side note, I love these long form discussions that Sarah Lacy puts on. She asks insightful questions and does not allow the guests to speak to to talking points.Yes some of the discussions do get long ( I think the longest I have seen are 2 hours 30 minutes ) but most are laborious.

  6. Aaron Klein

    Wish I could have been there. Sarah’s interviews are great and you’re always a great interview.Her question about “mediocre superpower” is a constant thread through this series and I predicted many moons ago that you would answer with cone of silence. 😉

    1. fredwilson

      I so wish it existed

  7. Guest

    Sure I can multi-task like everyone else but reading and watching an in-depth interview at the same time?! Lol.This w/e I’m watching your interview first and then reading HSBC’s Chief Economist’s new book ‘When the money runs out: the End of Western Affluence’ (….At his LSE lecture he noted that GDP growth rates from 2003 to 2013 ran at 4%.I found this to be surprising since we made leaps and bounds in technology progress during this period with the Web and eCommerce etc.

    1. Matt A. Myers

      I’m not sure why there is such an emphasis on growth. Nations want to grow so they can have an advantage, be bigger, than others – so then inherently they would have more ‘profit’ or gain as they’re managing a greater of the whole. The world can run perfectly well when not growing though, and this is what the world would look like if we were in a sustainable state.

      1. kidmercury

        being anti-growth is another way of saying the 1.5 billion people living in extreme poverty aren’t worth growing for.

        1. Matt A. Myers

          Globally, sure – but in each context where GDP is followed as measure of growth, how much of that growth is positive growth – where local and foreign people are actually benefiting?

          1. kidmercury

            i don’t regard GDP as a useful measure, and think its primary purpose in life is to be mocked and made fun of.

          2. Matt A. Myers

            GPI (genuine progress index) is what I want to see the world move toward, and it seems to be slowly … it morphed into a new name, which I like less, for CIW – Canadian Index Wellness.

          3. Guest

            A few years ago the then President of France, Sarkozy, commissioned Nobel Laureate Stiglitz and other leading economists to develop a Wellbeing or Happiness Index:*…*…Notably HSBC’s Chief Economist said that the quant models are flawed because they assume we’re logical, rational and probabilistic and clearly we’re more complex than that. There’s a lot of uncertainty out there which isn’t being measured yet.It’s not clear yet what metric will replace GDP.It’s only clear that the leading economists are all flummoxed by what can and should be done to stimulate economic activity — other than Quantitative Easing.Just as the VC model will be disrupted over this next decade, so too will economic models at their core assumptions (that we’re logical, rational and probabilistic). It’s not just about information asymmetry or Nash’s bargaining theory which have won the Nobel Prizes for Economics.The next innovation for Economics will go into the very heart of us as humans and how we value the products and experiences we consume and the players in the market. That’s what I believe and build towards.

          4. Matt A. Myers

            The reason economists are flummoxed is because they’re not given the right metrics yet.There are certain leading metics that will lead to a certain place if those metrics are moving in a positive direction. One I would argue would be amount of yoga people are doing – within a framework of ‘approved’ or valid-tried-tested sequences, styles, etc.. There will be a whole assortment of trickle effects that will come from thisThe thing to understand too is not everyone is logical, but enough of us are, and those who aren’t logical basically just end up doing what’s a) accessible / available, b) feels good, c) do what others are doing.I agree that it will be heart, the very heart of us as humans, that guide us – though many people’s hearts are closed, and so for that to come fully true people’s hearts need to be opened up through healing.

          5. Matt A. Myers

            Sure wish downvotes were shown so I could know who I’d like to have a discussion with …

      2. Richard

        For one : Stock Price = No-Grow Value per Share + Present Value of Growth Opportunities

        1. Matt A. Myers

          Growth of a specific company, sure – that’s a sign of opportunity ahead, but not basing it off of quantifiable data that’s already occurred. AFAIK GDP doesn’t include any %s for “how much we expect to grow from current growth trends” … ?

      3. JLM

        .I agree with your sentiment from a purely economic perspective; however, it fails to embrace the reality of simple population growth.America is growing because it is adding population in the basic birth v death v longevity equation.This additional population mandates growth just to tread water.Since 1969, there have been 53MM abortions in the US — not making a commentary on this barbaric practice, mind you — and thus the underlying growth assumptions are even more robust and substantial.Perhaps the biggest driver is the necessity to feed the behemoth that is our government and its unquenchable desire for more and more and more revenue not only beyond “right sizing” for population growth but to provide an increasing flow of income redistribution to our pathetically growing government dependency class.JLM.

        1. Matt A. Myers

          Based on that logic, countries with 1 billion + population should be 3x the GDP of the USA …Re: 53MM abortions – Assume that those 53MM abortions were by people or families or situations that wouldn’t be able to support or handle having babies / children – that would put a huge load of children who couldn’t be raised properly, already in a system where you don’t take care of everyone – where people suffer, etc.. You’re against public healthcare too, right? Which would further mean more negative pressures. Also, I’m not arguing for or against abortion – I argue for taking care of people, properly, sufficiently – and if they are and they end up becoming pregnant, they are more likely to be in a situation where they will be properly supported, and they can trust and feel like their children will be too. Taking care of everyone really does solve a lot of the dividing line issues that exist.The majority of the government comes from military spending AFAIK. If we cut 100% of government spending, who takes care of everyone? Would you be willing to take care / support your neighbour if they had abortions in the past, or might in the future if they couldn’t afford to or support the would-be baby/child they would have?I think the government is mislead by growing to grow GDP, which is the wrong metric — because GDP means every $1 spent, regardless of where (example: killing people costs money, and therefore that is good for the economy), and so that causes money to go to bad places – and policy to reflect that.You do understand why people become dependent right? You need education to get ahead, and you need health. What happens when you’re poor and can’t eat well? Have you thought through these cycles, and why they are so hard to get out of? Yet you blame them specifically? Sure, there are some that don’t care to do anything, maybe they’ve given up, maybe they are in a state of depression because they didn’t have good parents or a good environment – but that’s not what I’m asking you to answer. Have you thought through these cycles deeply and why people get stuck in them?Ever heard the saying “the rich get richer and the poor get poorer?”P.S. You can’t compare yourself right now, if you lost everything, to be able to become rich again (and so why don’t others just do the same) – because you already have life experience (how people learn – opportunities), you had a good enough upbringing to function and succeed (provide some sort of value to others), etc..

          1. JLM

            .Whoa, Matt, bring it back to Earth, please.My comment had only to do with the necessity to grow and not the underlying wisdom of that necessity.Just for the record, as an employer for over 33 years I always provided healthcare to all of my employees. I did not need government to direct or command me to do what I believe to be essentially a pragmatic consideration.An employer owns the problems of its employees and thus has to deal with them in real time.Who takes care of everyone?We all take care of ourselves and we keep the maximum amount of the fruits of our labor and invest it in our economy thereby providing real economic opportunity rather than faux dependency.This used to be called the American Dream and it was real and vibrant and powerful.The rest of it, I really have no idea as to what your are saying.JLM.

          2. Matt A. Myers

            Who educated those employees, and took care of them when they were sick? Family and friends who had the ability or resources. We don’t just take care of ourselves. And when you don’t have those resources, you’re fucked and will get into worse shape – you didn’t hire very sick people and then pay for their salary or healthcare. Your response is dishonest – disconnected from reality to try to sound like you’re making a valid point.And it’s relatively easy to support people you are incentivized to support because they’ll make you money / run your company – those aren’t the only people I’m talking about though.And bring it back to Earth? It’s easy to keep your argument in your mind as the winning argument if you keep within the context you want, and not into a bigger scope – therefore you don’t have answer or respond to what I’m saying. Good way to play it safe.

          3. JLM

            .The “we” is all of us. We collectively take care of ourselves through our own personal efforts, our families, our churches, our communities. This is the collective we — not government.There is nothing wrong with mining incentives as a means of providing services of any kind. That is the game of life. Work for the right company to get the right benefits.I served in the Army, went in harm’s way for 5 years and got an undergraduate engineering degree and graduate school in finance. It was a damn good trade for me.In this manner, I took care of myself rather than asking others to take care of me.In the long run, we must be careful as to how we invest our time, energy and associations. Make the right decisions and trades and things will turn out OK.What we have to combat is those “takers” who simply want to invoke some notion of entitlement rather than earning their way in the world.JLM.

          4. SubstrateUndertow

            Though commendable your wealth-care solution is just level-mixing, trying to solve a global problem at an inappropriate lower level.The proof of that pudding is in the tasting.Most every western democracy had universal access with better aggregate outcomes and at much low cost per/capita than does the USA!

        2. SubstrateUndertow

          The real fix for the wealth-redistribution problem is to deal with the corrupt political/finacial-industry collusion that distorts the distribution of wealth in the first place.It is hard however to find VCs willing to finance that disruption 🙂

      4. SubstrateUndertow

        Stealth confiscation of growth is the engine, the pump, that drives the concentration of wealth for those in the financial industry. It also helps governments rationalize unfunded social promises.So besides the inherent difficulties of framing the complex social mechanics inherent in steady state economics, there is little to no incentive to explore that solution in the world of political or financial governance.the old cliché”trees can’t grow to the sky”must surely at some point apply to human economic reality?Until the economic pain quotient rises high enough to force “the limits to growth” into a universally accepted economic-meme we will all be forced to just keep digging this hole 🙁

    2. ShanaC

      i’m thinking it might be that the gdp core might not grow until 10 years after an invention happens – technology needs to mainstream

      1. Guest

        Good point, Shana. It does take a while for technology to permeate into economists’ models — in part because whilst they use some tech tools they don’t go deep into how that tech generates revenues. Their models still tend to focus on physical goods rather than software output.There was a question to HSBC’s Chief Economist about how a lot of the Digital Economy is about the production of free and open software so how do the economists account for those in GDP?

        1. William Mougayar

          I’ve read somewhere that online accounts for 4% of the US GDP and 8% in the UK’s.

          1. Guest

            Thanks, William, useful to know.When Stiglitz’s report first came out I asked one of the research contributors, Andrew Oswald, whether the economists were using social networks as tools to capture some of the data by which they’re measuring productivity and people’s states of wellbeing.He said that social networks are definitely changing the amount of information available to the economists for their models, and they’re looking into socnets as a future data-gathering tool for specific surveys.

        2. Girish Mehta

          This question touches on the idea of the ‘clothesline paradox’ from energy economics, applied to the digital world. Thanks.

      2. Matt A. Myers

        Isn’t the idea though that new products are more efficient than old, and with that comes potentially cheaper costs, therefore the GDP isn’t going to grow as much? Ideally then that leaves more disposable $ for other things – currently though people aren’t benefitting from these new ‘profits’ / disposable income, it’s companies who direct them how they want — or hold onto them, which is more popular.

        1. SubstrateUndertow

          The inequitable distribution of those new profits is problematic not only because it tends to stall the cyclical equilibrium of production/consumption without generating ever increasingly massive credit overhang.That inequitably concentrated new-profit/wealth also promotes distorted capital-allocation. Capital-allocations largely driven by myopic self-interest. Only those investment that further reenforce the concentration of that profit/wealth need be seriously considered.All other global economic social interests are largely ignored in our present investment equations.Maybe it is time to debate a new corporate mandate. A new set of corporate resposabilitiies and expectation between citizens and their democratically mandated production/consumption institutions.If corporations can be declared as “PERSONS”Maybe they should shoulder some of the same personal responsibilities towards the larger economic community?

  8. Philip Brown

    It was a fantastic interview Fred! Probably one of my favourite Pando videos. I wish it could of lasted longer!I really liked your point of saying Zuck’s move to buy Instagram was genius. I think a lot of the hype around that deal completely missed how visionary Zuck was, so I was happy to hear you giving him props.

  9. kidmercury

    the survey monkey refinancing stuff and a booming IPO market are all dependent upon low interest rates. interest rates have finally begun to rise. all economic doomsday prophecies have ultimately hinged on the expectation that there will be a rise interest rates, and that the US economy and most of the global economy are not equipped to handle the final analysis the only viable answer is a return to businesses that focus on free cash flow generation and reward shareholders with dividends or royalties.zynga’s big chance was to morph into a virtual currency company, similar in a way to how amazon morphed from book seller into everything (although the launch of AWS is what i regard as the most significant evolutionary step of the company). zynga’s downfall is a textbook example of what happens in bubbles (excessive valuations, insiders cash out early, excessive investment in scaling, making overpriced acquisitions) and in disruptive theory (they face innovator’s dilemma regarding mobile). bubble 2.0 still isn’t appreciated enough.

    1. Vineeth Kariappa

      zynga isnt down yet. Their share price is. They have crazy number of users, they launch gaming with money; ppl make money, they get a %. N they r bigger thn google.

  10. Conrad Ross Schulman

    Great talk. I especially like the part when you said that corporate vc’s suck. I couldn’t agree any more!Thanks for the honesty and the learnings!

  11. george

    Enjoyed the broad range of topics discussed. I was quite intrigued with AngelList, -could you one day expand on that vehicle for startup financing a bit more +/-. Solid 90 minutes

  12. James Ferguson @kWIQly

    Really liked at around 22 to 23 mins roughly – “stay lean – money does not buy success” and regards partners”VC is not the business of making money – we are a service to help the entrepreneur – money is the side product”Is this great humility, wisdom, or both – well played

    1. Dave Pinsen

      Sounds like b.s., to be honest. VCs get paid to make money for their L.P.s. And they seem to enjoy making money for themselves as well. If they just wanted to help entrepreneurs and didn’t care about money, they could volunteer for SCORE.

      1. James Ferguson @kWIQly

        Disagree Strongly.Think sports – yes you play to win, but you focus on what it takes to achieve (get ball from a to b) not on how far you are up or down.If you play for the score, you will never play your best game,or score your highest

      2. jason wright

        how do they make money for their LPs and themselves? not by photocopying dollar bills. the central bankers do that.

      3. fredwilson

        yeah well you can look at any number of actions we have taken over the years that were not in our financial interests and you would see it is not bullshit.

        1. Dave Pinsen

          You don’t have a fiduciary responsibility to act in your L .P.s’ financial interests?

          1. fredwilson

            Over the long term, yes. But our franchise is about helping entrepreneurs and that often means doing things in the short run that don’t make financial sense. If our LPs aren’t happy with us, they can opt out of the relationship. So far, that’s not happening.

          2. Dave Pinsen

            IOW, you act in your and your LPs’ long term financial interests, and helping entrepreneurs is in those long term financial interests.

          3. fredwilson

            Yes. But we take a very long view and think about things in terms of the franchise and not on a deal by deal basis



    1. AlexBangash

      Grimlock great story

    2. fredwilson

      i love telling it

      1. takingpitches

        2.5 million venture capital.1.4 billion exit.I’m playing those numbers.

        1. fredwilson

          It was a thing of beauty. Too bad not many saw it.

          1. takingpitches

            Seemed to be the point based on your interview:Hype will bite you in the ass and you will have to live with the consequences

          2. William Mougayar

            Yup. The media is biased for drama and glamour while covering the world of startups, while substantial stories are less interesting to them.But cases like Indeed are very useful if you’re really studying what happens.





  15. Dhru Purohit

    Dope interview!

  16. ShanaC

    I think this is for another day due to length

  17. Richard

    Can you talk sometime about the other end of the VC world, the raising of the fund?

    1. fredwilson

      yes, for sure

  18. takingpitches

    25 Doubleclick CEOs!?

  19. takingpitches

    hope you kept some kozmo swag for that $25 million!

    1. fredwilson

      i have two messenger bags, a tshirt, and a jacket. the $10mm messenger bag 🙂

      1. takingpitches

        I’ll buy one of the messenger bags – but can offer far less than $10 million!Btw, I saw that Joe Park was running Bluefly.

  20. takingpitches

    Btw, FB still far under IPO price ($25 ish vs $38 IPO price)

    1. fredwilson

      Yeah. I got that wrong

  21. takingpitches

    This interview is comforting my 5 month old girls! Future vcs perhaps?

    1. Matt A. Myers

      It must be Fred’s smile

  22. takingpitches

    Sounds like there is some beef with one of your co-investors re the 600 million valuation round in 4 square.

    1. fredwilson

      Yes. They put way too high of a price on the company. It hurt the company.

      1. takingpitches

        Does it suggest it is too hard to be both a seed stage and a momentum investor in one shop or just a one-off mistake?

        1. fredwilson

          It suggests the win the deal at any price approach works better for the VC than the entrepreneur

  23. Michael Elling

    You’ve written a lot on leadership, but your comments regarding the CEO fit for the various stages of the startup (app/service, company, business) stood out. I searched but couldn’t find if you’ve ever delineated or differentiated how each stage differs and what are the 5 key attributes for each.

    1. fredwilson

      Great suggestion for a blog post

  24. MAB

    Fred, loved the talk, it was a true weekend treat. Happy you touched on data science at the end and told the untold story of indeed. also, if you’re taking topic requests, I’d love to hear your thoughts on startups and branding, do you think they should and if so, when is the right time (mainly those headed to IPO.) This is an ongoing conversation in the advertising world!A million thank yous!

  25. andyidsinga

    loved the etsy ceo story.

  26. andyidsinga

    fwiw – I’m totally bullish on foursquare – I love that system.

    1. fredwilson

      there is always an exception to the rule

      1. Pascal-Emmanuel Gobry

        Btw: they didn’t disclose the price when they exited, if you had they would’ve talked about it.I had figured $1.1-1.2b, I wasn’t too far off the mark. 😉

  27. Kirsten Lambertsen

    God, I loved Kozmo. I was a daily customer.

    1. fredwilson

      me too.