Video Of The Week: Brad Burnham on This Week In Startups

My partner Brad Burnham recently went on Jason CalacanisThis Week In Startups. It is a longish (just over an hour) conversation and they cover a lot of territory.

#VC & Technology

Comments (Archived):

  1. William Mougayar

    Great exchange. I watched it earlier this morning.So true (towards the end), VCs have less influence on companies that raised millions from an ICO. The thicker the bank account, the thicker the hearing 🙂

    1. jason wright

      Which i think is a big danger for so many ICO entrepreneurs.

      1. Richard

        I’m still waiting on an interview with the cryptoscam hired guns (the dc lobbyists) ? Pretty quiet group for a bunch of lobbyists !

        1. jason wright

          the best lobbyists go about their business behind the scenes. It’s not a spectator sport.

          1. Richard

            All lobbying and the subject matters discussed should be subject to fullshine laws. These are our lawmakers. They work for us. Never forget that.It’s this kind of mendacity that discredits the VC industry.

          2. jason wright

            Of course, but every industry lobbies. Policy is power.

          3. JLM

            .The VC industry doesn’t really have an effective lobbying platform.The VC’s individually have some “mullet money” contribution base which is doled out haphazardly.An effective lobbying platform hires top flight lobbyists with connections in both camps, hires lobbyists who then turn around and raise money from their clients for specific politicians, throw lavish parties for the Congressional staffers, spend a lot of time entertaining journalists, and hire the law firms which also make big contributions to targeted politicians.It is just a tarted up money laundering operation.Microsoft figured out their future is in DC and has an elaborate platform they call their Digital Diplomacy team which blows some smoke up the world’s ass on something called “Defending Democracy Initiatives” which is just an in-house lobbying team.There is a model to follow — Mobil Corp moved their corp HQ from NYC to Fairfax, Va in the late 1970s because they correctly understood the regulation of the energy industry was more important than drilling and exploration.JLMwww.themusingsofthebigredca…

          4. Richard

            You are being a bit naive on this one. The cryptocurrencies backers (including USV who has testified to NY regulators) certainly have both in New York and on the federal level. The NY regulators who attack small mom and pop retailers for having a price tag of the wrong size, have sat on their hands while the biggest Ponzi scheme since Bernie Madoof has scammed thousands of New Yorkers. We have warning label on a large soft drink yet no so much of a warning on the hype of Crypto.

          5. JLM

            .I think it is a difference of scale and composition. Note that I am talking about the scale and composition of their lobbying efforts, not the individual voices from the energy who may testify.The US IRS has spoken on the taxation of cryptocurrency while the US SEC has mumbled as to what constitutes a security as a general proposition thereby putting the onus on things like CTOs to sort out who they are.When I speak of lobbyists, I am speaking to the legislative framework embodied in the US Congress, not states.States dealing with securities defer to Federal “blue sky” provisions meaning if a security passes Federal muster/registration, it is blue skyed for the individual states.State securities boards are next to worthless as the regulation of securities is the Federal 33/34 Acts, Reg FD, SOX, etc.No doubt there is a tsunami of bad acts — take a look at US SEC enforcement actions which they have publicly announced.JLMwww.themusingsofthebigredca…

          6. Richard

            The scale and composition of paid lobbying is proportional. Well, a lobbyist (for Angelo Mazilo or John Thein) couldn’t have said it any better. This is not about proportionality. Fred loves to use the quote about History not repeating, but rhyming, well anyone not hearing a rhyme about about cryptocurrencies and previous financial swindles /disasters clearly is tone deaf.

          7. JLM

            .Of course the utterance about history not repeating is a cliche. It is inherently not true.The next big thing on crypto may well be when folks who threw money at ICOs realize they have nothing, but the recipients have something.JLMwww.themusingsofthebigredca…

          8. JLM

            .Lobbyists work with staffs of both individual politicians and committees. This is the real power elite, the Swamp, the Deep State, the Illuminati.It is a dirty little secret.That’s why nobody really knows who wrote the Obamacare bill because it was written by the insurance industry and jammed through by the K Street crowd working with House and Senate staffers and the White House staff.Few of the Senate or House could write a law if they had a month. None of them bother to read them. Their staffs tell them what to vote for.JLMwww.themusingsofthebigredca…

          9. jason wright

            for me the most insidious technique they use is the ‘seeding’ of news media content to serve a client’s brief. Lobbyists and journalists!

          10. JLM

            .If we have learned nothing from the Russian collusion myth it is that everybody — even the FBI/DOJ — leaks and plants stories to accomplish their objectives.I always knew that the CIA conducted powerful misinformation and disinformation campaigns abroad, but I admit to being hopelessly naive on such conduct domestically.Who would have ever thought that the Dir FBI would be leaking info about an investigation to the NYT?The fact that much of the info is fraudulent, manufactured only tells us how deep the corruption is and how pathetic the people involved are.Remember, the media has this connection hanging over the heads of these powerful people for blackmail purposes.It is a mess.JLMwww.themusingsofthebigredca…

          11. Richard

            Law making is far from a dirty little secret. The biggest secrets over the last 20 years have to be the relationships between college presidents and law makers. How is it possible that the “single payer” (federal government guarantees student loans) has not once attempted to negotiate college tuition. The second has to the Banks continuing effort to facilitate housing inflation / and now rental inflation – which just amounts to wealth being redirected into assets such as housing (in which a federal tax on homes in excess of some value is way overdue).

          12. JLM

            .Have no idea what “law making” has to do with my comment.College presidents and law makers is an odd stretch. I sat on the board of a state college and the big fights are always about the amount of state support in excess of tuition.The reason the Feds have stayed out of the tuition debate is they don’t have a seat at the table. It’s either a private or a state issue.The Feds provide a loan guaranty to financial institutions as a fop toward the idea everybody is deserving of an education.The world needs not one more English major, but needs a lot of HVAC techs.The Feds already tax home value accretion as capital gains income in the ordinary course of business and with an Obamacare 3.5% fee.The US doesn’t need one more tax. What the US needs is a leaner, less expensive gov’t which is responsive to citizens not politicians.JLMwww.themusingsofthebigredca…

      2. William Mougayar

        exactly. but many don’t realize it. they think that money solves everything. truth is- excess money can hide a lot of things.

        1. jason wright

          ‘Psychoanalysis and the ICO Ego’ would be a good working title for a book on the whole subject. The getting of so much money is… undoubtedly… the measure of their entrepreneurial brilliance!

    2. JamesHRH

      Insulating the founders even more from the harsh realities of making money.

      1. William Mougayar

        Not making, but, – raising money and being accountable for progress to get more.

        1. JamesHRH

          William…………. What was the topic of yesterday’s discussion?;-)

          1. William Mougayar

            kind of. but i was responding to your comment pertaining to today.

    3. Pointsandfigures

      Might depend on how much credibility the VC has that is invested in the company that did they ICO. If you had Ray Kroc as a VC and you did an ICO for a food franchise you might listen to him.

      1. William Mougayar

        It depends also on the entrepreneur. Some entrepreneurs are more hot headed than others, and do very little listening to outside sources, even if they funded them. They forget quickly who they were begging for money prior.

  2. awaldstein

    Listened at the gym this morning.Long workout with lots of power intervals listening to Brad’s thoughtful and nuanced thinking.A pleasure actually.

  3. jason wright

    A rare outing. Worth the wait.

  4. Tom Labus

    Great job, Jason. Thanks for letting Brad talk without a lot of interruptions.

    1. jasoncalacanis

      Thanks…. some guests you pull the string and step back. Others you have to push and prod if you want to get something useful out of them. Hopefully after 1,000+ interviews I’ve figured out how to do this!

  5. johndodds

    Amazing clarity of thought, not to mention the best single sentence explanation of crypto I’ve ever heard. A pleasure and an education.

  6. JamesHRH

    Brad is the perfect Fred partner.I hate being such a Gloomy Gus about crypto, but:- his rationale is about innovators moving the cheese to a new platform in order to avoid a dominant platform taking their cheese- he’s an open source UNIX true believer (yikes)I love everything about the interview other than those two points.He did not, not even once, suggest that an end user had any reason to move off those dominant platforms. He actually seems to think that those platforms are completely fungible.The innovators will just move to trustlessness based protocols and Zip – goodbye Google, FB, et al, – all the end users will migrate with the innovators.Why?My kids are not Millennials, they are Baby Busters’ kids – Gen Z. We were at a Michelin starred, modernist cuisine restaurant in Paris tonight & the staff offered them, wait for it,……..Coca Cola.How does that happen? How can Coke make the transition through 4 or 5 generations of human beings without being disrupted – by Gatorade, by Snapple, by Red Bull, by Perrier, by…..Some things are very, very, very hard to disrupt because the cost of change is very, very, very high, compared to the improvement.Are there better things for kids to drink than Coke? Absolutely. A lot better? Absolutely not. But SnL were offered, Coke, Diet Coke or Coke Zero. Coke has covered all the bases.And its Coke FFS.10 years in and no one (not even someone as experienced, thoughtful and intelligent as Brad) can come up with a compelling use case for the end user, the person who makes the wheel go around, to switch.

    1. sigmaalgebra

      Once my wife and I were having dinner at the best French restaurant in DC. We had a nice desert; I didn’t want anymore wine; so I got a Coke, the original. It was good with the desert!

    2. JLM

      .Coca-Cola has an odd history as it relates to Europe. Prior to WWII, Coke was not in Europe. They were a purely domestic American brand.The President of Coke, Robert Woodruff, in 1941 ordered that “every man in uniform gets a bottle of Coca-Cola for five cents, wherever he is and whatever it costs the company.”Of course, men in uniform exploded from 175K to 13MM which is a lot of Coke drinkers.When US soldiers began to marshal forces to invade Europe at Normandy in 1943, the Army could not allocate ship space for Coke as it needed the space for war materials.Eisenhower pointed this fact out to Woodruff and Coke sent ten bottling plants to England so they could make it there. This, of course, required them to send people with the secret formula.This was the foundation for Coke’s first foreign operations. When the war was over, these plants continued to operate and more were sent to mainland Europe, including France.Coke was distributed as part of the Marshal Plan.The bottom line is that Coke was considered as an American luxury good for many years. Coke was the largest advertiser in the US post-World War II and was always putting out a unique positive American message — “Things go better with Coca-Cola; things go better with Coke.”Most of that story is on Coke’s history:…JLMwww.themusingsofthebigredca…

      1. jason wright

        My cousin worked for Coca Cola in England. She tired of the particular corporate mentality. She now owns a flower shop. She is much happier.

        1. JLM

          .Perhaps suggesting that “Things don’t always go better with Coke?”JLMwww.themusingsofthebigredca…

    3. jason wright

      Wasn’t his central point that immutable trust in a decentralised platform wins the hearts and minds of developers and mass migration becomes an inevitability? End users follow.

      1. JamesHRH

        That’s not how it works though, as the entrenched players continue to serve the end users is ways that meet their needs, while being less ideal than what could be but safer / easier than the cost of switching.That’s the point of the Coke story.

        1. jason wright

          Maybe it has been that way, but a decentralised architecture could be an environment in which new and inventive strategies might begin to unstitch those naughty entrenched players and their hamster traps and mouse wheels.

          1. JamesHRH

            You are making the ‘It is different this time’ argument for tech that is one of the most well known indicators – in financial circles – of a massive bubble.

    4. fredwilson

      Brad is a big thinker, an idealist, and tends be more right, over the long term, than anyone i know.

      1. JamesHRH

        Idealist is the word that worries me.You and he have 1B times ( more than that maybe ) the track record of being right than I do, but…….I still think BlockChain is for techies only and not Normals.And I am a Normal and not an Idealist.

      2. JLM

        .High praise.JLMwww.themusingsofthebigredca…

    5. kidmercury

      back in the day why would anyone move from the phone book to the internet to look for businesses….the short answer is that search engines helped you find a lot more obscure stuff, because their technology was designed for scale. the same thing will be true crypto, even in the case of search: search engines powered by governance networks reliant on cryptocurrencies as their unifying protocol will be able to crawl much more of the web than google and its highly centralized brute force approach does. most people dont need more than google — yet. but some audience will need more than google, and they will be satisfied by this forthcoming crypto search engine, and that will be the entry point for disrupting search. that is just one example, you can extrapolate the same concept into essentially every vertical.

      1. JLM

        .The macro picture is compelling, but then I ask myself — “If I already have ‘search’ WTF do I get that is better?”I think we are approaching an unusuable level of tech innovation. Not there, but approaching.JLMwww.themusingsofthebigredca…

        1. kidmercury

          back in the day people saw no reason for a mobile phone better than their flip phone, or a computer better than the mainframe they shared with others. yet here we are…..i use duckduckgo mroe and more because of google’s censoring and because of their involvement in project dragonfly. others who want illicit material may not wish to use google. all it takes is a small niche that wants something with sufficient passion to get the snowball going.

          1. JamesHRH

            DDG is chocolate ice cream, when everyone loves vanilla and porn people love strawberry.A flip phone is a cow. An iPhone is a Dairy Queen.

      2. JamesHRH

        And Google is going to hand it to them?Do you think that Coke doesn’t work REALLY HARD to keep every stakeholder happy?Entrenched incumbents from the same industry not the same push over that the past industry category are. Have you noticed how hard it is to rid the world of MS Office?Haopy Hols Kid!!

        1. kidmercury

          google won’t hand it to them and if they do not transform themselves accordingly they will die slowly, like sears, dell, and microsoft almost did (though the latter appears to have transformed themselves sufficiently, at least for now). ms office has already been disrupted by google docs (which required them to distribute office on non-windows PCs as a part of the transformation they needed to survive) and coke has already been disrupted by bottled water (which led them to acquire dasani).

          1. JamesHRH

            Market become sated.Why is there no innovation in backbone data hauling?Why is Coke just defending their market and have done so successfully for 50 years?The web is sated.Mobile is close.Some UI innovation is left. That is it.

  7. jason wright

    Brad’s referencing of healthcare and USV’s investments has the feel to me of cherry picking, where the ‘hard’ health cases are left to rot while political philosophies bicker away at each other. Dostoevsky said something about judging a society by the conditions to be found in its prisons. I would say that it may now be as appropriate to look inside its healthcare system for clues to the state of the nation.

    1. fredwilson

      you have to start with easier things. that gets you in the market and gives you the opportunity to tackle harder things

      1. JLM

        .Do not start with nuclear fission out of the chute.Crawl, walk, run applies to everything.JLMwww.themusingsofthebigredca…

  8. kidmercury

    this was a great interview, thanks for sharing. in the example of “crypto lyft” that brad and jdawg discussed brad mentioned how what is interesting is that the the “lyft token” would be held by both drivers and riders, and that both would thus benefit from its appreciation. to me if the token starts appreciating, riders will not use it, and will switch to a network with a cheaper token. thus, cheaper tokens will get more engagement. in real world economics this is known as gresham’s law, and manifests itself in trade wars in which countries engage in competitive devaluation of their currencies to boost exports. so, i think “crypto lyft” would need a stablecoin of some kind to really work.yes? no?