Pandocast Episode Two: Where Google went right

By Sponsored , written on August 14, 2014

From The News Desk

Episode two of the Autodesk Pandocast -- Pando's Autodesk-sponsored podcast, starring Sarah Lacy and Carl Bass -- is now live.

In this episode, Carl and Sarah discuss the differences between the software and hardware market, the challenges of crowd funding, and where Google went right.

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The full transcript is below. You can browse all episodes right here.

Sarah: Do you have a new sympathy for these entrepreneurs who think, "Oh! It's the golden age of hardware. We can send stuff to China. We can do a Kickstarter. It'll be the same as doing an iterative web company."
Carl: Right. I'm in the recovering Kickstarter mode. I don't know how many hardware projects I've funded, but I haven't gotten anything but emails full of excuses. I think it's hard. A huge amount depends on how good the team is, and how experienced they are and know how to do this.
Sarah: Right. People always say what they love about Silicon Valley style entrepreneurship, and these young founders, is that they don't have any of this baggage and they don't realize what they can't do and all that, which is genuinely important. I've seen it over and over again.On the other hand, when you are doing hardware, and in so many cases when you're doing enterprise software too, at some level you've got to know what you're doing, don't you? Does that just break down?
Carl: I think you're right. There's something about the can do attitude in the face of everything that's telling you you're going to fail. You just keep trying harder and harder.This place is peppered with people who have done that and succeeded despite all the odds. There's something great about it. There's something great about it that's reputation enhancing, the trying and character building.

There's some stuff that you need a little bit more of a leg up, you need to know a little bit more. Or you're going to be one of those big flameout disasters.

The thing that people forget is that for every successful startup, there are dozens, hundreds or thousands that are filled with equally smart people who, tried equally hard.

Sarah: Who also didn't know the subject or have any baggage.
Carl: Exactly. It totally doesn't line up that this is the qualification. Knowing nothing doesn't guarantee success.
Sarah: To me, that's sort of the problem. I did a post for "Tech Crunch" several years ago that was called "You're not the exception, you're the rule." Everyone will hold up Mark Zuckerberg and be "Well he dropped out of school." So did my drug dealer on the corner. [laughs]This is something great about the Valley, because if we didn't all believe that we could do this, then no one would start it. If you actually internalize the odds and didn't think you were the exception, you would probably not quit a job to start a company.
Carl: Our inability to process stack probabilities is what allows Silicon Valley to succeed. The idea that you're going to have an idea, that you're going to raise money, that you're going to be able to get a bunch of...
Sarah: That anyone will want to work for you, which is the hardest part.
Carl: Exactly. That your customers will like it, that no one else will come along and do the same thing better or cheaper, or whatever.All of those facts have to conspire in some way to let you get you to that point. If you ever did the math on it, [laughs] you'd go "You should get a job at IBM."
Sarah: Someone usually succeeds, in this line of hypotheticals, and then they're like "Do you know what I really miss? I really miss those early days in the garage."They totally glamorize how shitty the first year was because it worked out well in the end. Then they're like "I've got to do this again!" They jump back in, but they're tired, they've been through it once. At that moment when you have to give an extra 40 percent, they're just, "I've made money and I've proven them. Why am I doing this again?"

I think the serial entrepreneur thing is another exception rule thing.

Carl: Absolutely.
Sarah: I think it has been overstated to death.
Carl: I have a bunch of friends right now who are doing a second start up, but they're all in their late 40's and 50's. The first one was very successful, but 20 years ago and I just keep calling them the Rolling Stones. It's like...
Sarah: [laughs]
Carl: I forget which one's Keith Richards, but they're doing the same thing in the space and the same everything and going, "I hope the people like it as much the second time as they did the first time."
Sarah: That's supposedly how you actually have success, so people started parsing the serial entrepreneur data more.
Carl: Right.
Sarah: I think Graylock is the one that did a study on this and they found that at least in what they had seen, if you were doing something in the same space or if you were doing something in enterprise, it actually really mattered for the serial entrepreneur.
Carl: Right.
Sarah: When it doesn't matter is someone who did a digital music start-up and then goes into sides to do Cloudstore.
Carl: A [inaudible 06:37] device. [laughs]
Sarah: Yeah, something like that and I'm not totally convinced on that either, but it makes slightly more sense. My question is, then, aren't you bringing in that baggage that everyone's saying it's so great about entrepreneurs who've never done it before because they don't have the baggage.
Carl: Right, that's the exact opposite.
Sarah: Right.
Carl: Yeah, because you're bringing the baggage and in every idea, you have where you can question and challenge. You're not because you're part of the old thinking.
Sarah: Right and it's like, I think it's we're really bad at extrapolating why things went right or wrong with our companies and so you can do all the right things and it can work out the right way, but it could be a total fluke that it worked out that way.
Carl: There's absolutely no good reason that anyone does good analysis.
Sarah: [laughs]
Carl: I mean, because you're just self glamour it.
Sarah: Yeah.
Carl: When you tell the story after the fact, you're making the stuff up to make it're re-writing history to be it the way you want it told, but nobody goes in and really picks this apart in some analytical way.Enough entrepreneurs, I've been honest enough to say that the thing that matter the most was luck, that there was a whole bunch of stuff, that I was in the right place. I knew the right people. I saw the right opportunity. I just got fired from my job.
Sarah: Right.
Carl: A lot of things came together is probably the biggest predictor is you have good luck.
Sarah: Right.
Carl: After that there's a whole bunch of other stuff, but like I said, I don't think you could look at the failure and the success and go to credentials, or smarts, or hard work, or many of other things.
Sarah: Or even, the whole classic fork in the road thing, like, I'm sitting there and I know like we should either start investing in 3D printing and do a mobile app in your case or stick with CAD design software and you seized it up and you were like, "That one."I just think the way people even look back on their decisions and that they knew this was a risk, but if it's exceeded it, do this.
Carl: Yeah.
Sarah: Maybe this is just saying something about me as a CEO but it's like there are so many times where I'm like, I think this might work.
Carl: Yeah.
Sarah: I know that, like, here's the certainty of this fucking up if I go this way. There's a probability of this going right. How do those...OK, I'm going to try this and constantly course correct it until it worked.
Carl: Yeah.
Sarah: There's never a clear fork in the road. It's always like, what's the least bad thing I could do right now?
Carl: Right and I think there's a lot of, just trying to figure out...the question I asked, so what's the down side to this? You know, so I go, let's just figure it out. For example, when we went to the go into hardware which there's been a lot of noise. What does Autodesk know about hardware?
Sarah: Right.
Carl: I thought about it and I said, "Look.", so what we decided to do was we did this open software, open hardware, open materials. We said we're going to go out there and do it. We'd be getting no grief if we were a small company. I must say we've had a lot of positive response to it.
Sarah: Right.
Carl: Then, they say, "What do you know?" and I go, "OK, so what's the real down side to this for us?" and I thought it's something we wanted to see. We wanted to see people getting into 3D printing with new materials. We thought it was too expensive and too inaccessible and we said, "Let's just broaden this and get it out to more people."I looked and I said, "OK, so what's the big deal? We spend a few million dollars on it."
Sarah: Right, well, you can argue a company like Autodesk or any public company in tech should be the ones doing a lot of that because some of this wouldn't be commercially viable for a VC to back. Google is the ultimate example of this.
Carl: Yeah, they have tons of projects that nobody would fund.
Sarah: [laughs]
Carl: They're at the extreme thing I always wonder at Google is you have so many projects. The way they make money, so few people work on the way they really make money. That's the odd thing. That's the dynamic I wonder about.In a place like this, whether it's 3 percent or 10 percent or whatever the population that work on things that you can't even really see the clear connection to how you turn it into a business, I understand. When that's 70 or 80 or 90 percent, that gets slightly more perverse.
Sarah: It's funny, though. I feel like Google had this very brief lost period where they woke up to social. They desperately tried to chase Facebook before Facebook went public because they were terrified Facebook was going to go public and they would be the big large-cap growth stock and everyone would want to be into it.That was when they started wearing hoodies and they just totally was like watching your dad moonwalk. It was like, "OK, Google has finally reached its embarrassing point." That was clearly them trying to chase, "What is the next big thing after search we can make money from that billions of people will use?"

I think what snapped them out of that was Android and how good of an acquisition Android wound up being, and Facebook's IPO not being this "Hail all the new conqueror of tech" moment. Then it seemed like they totally got their mojo back. They were like, "OK, well, what works for us is not trying to chase a big market someone else has done. Let's just go crazy and create markets."

Carl: That's what I think, is they found their own true north. It has a huge amount of credit to Larry, because it really ties back to Larry. He takes over the reins and says, "A bunch of this other stuff, I've sat on the side and I've watched it, but now I'm in charge. I don't want to do any of this crap."A lot of it I thought was follower. They went back to the things that they believed in, looking at things where they thought they could change the world in big ways and the kind of skills that they have they can bring to bear on the problems. That's the stuff they're chasing, so it rings true. It has this authenticity to it.

Who knows whether or not we're going to be getting our electricity from kites that are flying or we'll be in self-driving cars. There are possibilities in all of these things, but at least it's authentic to them. They believe in it. They're, if not uniquely qualified...

Sarah: The market's letting them do it, so do it.
Carl: Absolutely.
Sarah: They have shitloads of money and the market's letting them.
Carl: Absolutely. You only have a limited time period before people turn on you.
Sarah: Yeah. I don't know if you were at Re/code this past year but, what's his name, Sergey Brin spoke at the opening night. It was after Gwyneth Paltrow's bizarre poem, so it was safely the highlight of the evening.I had not seen him speak for a really long time and he came across, and I told him this afterwards, he came across super relaxed and super chill and like, "Hey, I'm just this rich dude who's had a shitload of success and here's the ten things I'm working on that I think are amazing that no one else would have the resources or money to do, and I don't really give a shit what you think."

I was like, "You came across like this guy." He was like, "I kind of am that guy." You've got to have that level of swagger to be a publically traded company like Google and be doing as many parallel moon shots.

Carl: Yeah. I give them huge credit. Their dark period really was this thing of trying to be somebody that they weren't.
Sarah: Let's be honest. It was Schmidt's twilight looking at his legacy period. If you listen to interviews at the time, he was terrified that people were going to look back and see him as the guy who fucked up on social and missed social.He had done this amazing thing in building this company, and in interviews he sounded morose. He sounded like, "I've missed this thing. I totally screwed it up." It was like he was so in his own head about all that.
Carl: Yeah. When you think about the people who were there in leadership, social is not necessarily their thing.
Sarah: It's not in their gene. No. Social is inherently about people, even though Facebook wants to get is data that they can manipulate in any way. But it's inherently about people. Google's whole thing was a reaction from more curated portals into pure machines and artificial intelligence and everything. It was completely outside their expertise.
Carl: Exactly. I give huge credit to Larry. I like watching them do it because when you get that level of success and you have those resources it's so delightful to see them trying to work on hard problems that you know if they succeed will have a huge impact.
Sarah: Right, and they'll have even more data about us. In a way, though, it does set a tone where it frees up companies like Autodesk to, "Hey, we're taking 3 percent and doing something a little bit weird."
Carl: Yeah.
Sarah: You think so?
Carl: Google has helped a little bit, but a little bit it's just you just bring your own attitude to it. Just as, you fire me if you think it's the wrong thing to do.
Sarah: [laughs]
Carl: You just do what you think is important. We've been doing it for a while. You can look at a bunch of stuff, whether it's us making 3D printers or us building software for synthetic biology. People look and go, "Synthetic biology! What the heck are you guys doing with synthetic biology?"I can tell you the whole reason why I think it's important, but for those who don't think it's important, that's not their job.

One of the things that's always interesting to me is, I don't spend any time, Caroline's going to kill me but it's true...

Sarah: [laughs] I love that she sits in on these and cannot speak so you are just torturing her, just torturing her.
Carl: Exactly. Pull the legs off the spider.
Sarah: [laughs] He just called you a spider. [laughs]
Carl: [laughs] Exactly. Terrible.
Caroline: Oh my God! OK, that's all I'm going to say. Oh my God!
Carl: [laughs] I don't read anything that's written about us. I read what you write, but not about us. I read it about other people. I won't listen to this interview. I was here.
Sarah: [laughs]
Carl: The last thing in the world I want to do is listen to myself again. I always think of it that way, is that you have to know enough and have enough self-confidence. That doesn't mean you don't get input from a million places and don't reflect upon what you're doing.I always think about it, if you're LeBron James, did you have to wake up on Thursday morning and figure it out how you guys lost to the Spurs by some overweight 60-year-old who never played basketball is going to write something, and you're going to wake up and know [inaudible 16:51] . Oh, I didn't realize!
Sarah: Oh, they were better at defense!
Carl: Exactly. Oh, they played as a team and we didn't! It never occurred to me!
Sarah: [laughs] Why didn't we play as a team? We never thought of that!
Carl: Yeah. It's this idea of, on Monday morning the LeBron James' or the Joe Montanas or if you're leading an organization you're going to read or somebody who writes on your blog and says, "You're screwing up [inaudible 17:17] by doing blah, blah, blah." That is not the appropriate forum to get good input.
Sarah: Mostly because no one understands the inside of your company. So frequently people don't understand, all the things that they're bitching at you about, you have already considered.
Carl: Absolutely.
Sarah: There's nothing anyone has ever brought up about my company I have not considered already.
Carl: Right. The two funniest things. I've been on boards and I watch boards. Most boards try to be well-meaning, but there's nothing like giving a presentation, you're about to buy a company and spend a gazillion dollars on it.You give a 90 minute presentation on why we've got to do this, and then some well-meaning board member raises his hand and says, "Did you think about building this rather than buying it?
Sarah: [sarcastically] No. [laughs]
Carl: Oh my god, breakthrough, hold the presses. I don't even want to answer before I call people and say, "You better go back and start looking whether we should build." and you're like, "Did you really ask that? I mean, like you're, oh my god." You know, our people really saying...I just had this same experience, so our CFO just resigned and he's going to work at sales force and what was interesting to me is, within minutes of it hitting the news wire, I got at least 30 or 40 names sent to me by all kinds of people.
Sarah: Right.
Carl: People who worked at the company, mostly it was from investors, analysts, people I meet in the street, so it felt like, you didn't do the first [inaudible 18:49] . What are you looking for in your next CFO?
Sarah: Right.
Carl: There was a little of that question. It's like, somehow, we've been single too long and somebody's setting you up on a blind date. You need to meet some people.
Sarah: Right.
Carl: I have a [inaudible 19:02] . Here's whole list of people and I'm like, it was the craziest thing I ever saw and so a lot of people have a lot of ideas that come from out and I think you just have to have a thick skin about this stuff and say, "Thanks very much."
Sarah: Right.
Carl: I took all 37 names and I sent it to the recruiter who's working on the project. If you see something interesting there, great. I am not going to spend long enough to write an email that says, "Thank you."
Sarah: Wow, that's cold. You can find an auto key shortcut for that.
Carl: Yeah, exactly.
Sarah: I want to get back to crowd fundings, we've mentioned that at the beginning.
Carl: Yes.
Sarah: I'm getting weird waves from Paul Carr. I think that means we're low on...Hey Paul, how's it going? We're not stopping. I want to talk about crowd funding because you mentioned you'd back to ton of stuff.We have been writing a ton about backlash against crowd funding and I think what is more common is what you expressed where people have just funded a ton of these things.

Then it's like, they get all these excuses and there's this, it's a hangover.

Carl: Right.
Sarah: Then, there are more of these guys that are just outright scams like this Healbe automatic magic calorie counting bracelet that we wrote about and meanwhile, Kickstarter's even lowering its barriers so now there can be even scammier things on there.I think all that's been written about a lot and it's interesting. But what I found really interesting, recently I was talking to a hardware entrepreneur who has built a brilliant prototype for something.

Every single person including us, he's met with has been like, "Why, wait, you haven't done a crowd funding campaign? Why wouldn't you? You would get so much money for this. This is exactly the kind of thing people get excited by."

He keeps resisting and keeps resisting and he's trying to raise venture money. A few years ago, people will be like, "Take the free money. Don't give up equity. You don't have to put these guys on your board." I finally was like, "OK, you got to explain this because you're not an idiot. Like, what's happening? What am I missing?"

He said, "If we raise crowd funding now, we're going to spend the next three years satisfying all of those small 400 to 10,000 dollar cheques and not building our company. We would rather basically do a transaction with one big investor and give up equity and then have three years to build out our vision.

I wonder how much there is this sort of just hangover from the people launching these campaigns, too, of like, god, this has gotten annoying admin.

Carl: I must say, in general, I love the idea of this democratization of funding and more funding sources available. I've had better interactions on Angel List than on Kickstarter.One of the best ways to fund is if you can find the right network of Angel's. I think that's a good one. There's a lot of problems with the Kickstart for a certain product.

If you come out with a consumery product that you're going to be able to satisfy the demands in three months and you just want to see if you test market it and pre-sell it, the next thing you know, you're out there and doing this. It's not bad.

As a matter of fact, we've been thinking, which is strange for a big company to do it that we wanted to do Kickstarter for our 3D printer project.

I have an inbox this long of people who want to buy this thing that's going to cost 5,000 dollars and so doing it on Kickstarter just seemed like, maybe we should do it and for different levels we'll get materials or a printer or a conference room or whatever.

Sarah: [laughs]
Carl: I understand the thing if it's a long project and it's very speculative. You can get really distracted.
Sarah: Right, but that's on a typical Kickstarter. You know you can make this thing and have the resources to make it.
Carl: Right, yeah, so we're going to do it, but I was saying, that's speculative, if you really have a speculative project, maybe Kickstarter is not good. The place that I like is Angels who really understand what you're doing and are really aligned. I think the best VC's are aligned with the people they fund, but not always.
Sarah: Right.
Carl: I see a lot of things don't get done well because of divergence in interest between the VC and the entrepreneur.
Sarah: How many things have you invested in on Angel List? Do you do a lot of stuff?
Carl: Yeah, things that have been one way or another, probably a dozen, either I did through Angel List. My thing that's got me a little bit sour on Angel List is the syndication.
Sarah: Yeah.
Carl: That feels creepy to me. It ruins the essence of what it is.
Sarah: It's not just because people are following people who have names versus really [inaudible 23:50] themselves.
Carl: Now, there's trying to be some intermediaries who are trying to make money out of it. "I'm putting together five people and then, I'm going to take carried interest on it." I think I like, huh?
Sarah: Yeah.
Carl: You're trying to be like a mini VC.
Sarah: Right.
Carl: If you really want to be a venture capitalist, go be a venture capitalist.
Sarah: Right. Well, one would presume the people good at it would, but the other people would be on Angel's to gather syndicates. [laughs]
Carl: Oh, that's a good idea. I missed that part of it. Yeah, so that's the part where OK, these things degenerate and get a little bit creepy that way whereas I think the original idea was that there were people who didn't know about each other who should and that would be great.Certainly, our personal networks get us to many other people but not all of them.
Sarah: The thing for me is, I have a big personal network of potential investors, not surprisingly, I've been in Silicon Valley referring this area for 15 years.There's something wrong with me if I did not, but anytime we've been at the point of raising around like, I have a list of a dozen people or so. I'm paying existing investors, but there's so many people I've met at one point, I've forgotten I know.
Carl: Right.
Sarah: After we close something, get a note from someone like at least five people who are like, "Why didn't you tell me?"
Carl: Yeah, exactly.
Sarah: It's like, the problem with me is, not that I don't know people, it's remembering the people I know and being able to put something out that doesn't sound desperate which is the key that says, "Hey, we're putting together another round. Would you be interested?"We really considered doing an Angel List round at our last fund raise our A because we were doing, it was right when general solicitation was up, so we can actually just write about it, but we wound up not doing it. We were a little bit scared off because of first of all having to put up so many details of our financials out there.

It's like, I don't know, I'm a little bit of a control freak, so that freaked me out a little and we obviously have a lot of enemies and stuff. It would be used against us and then, the other thing was, it's like, you just are worried you'll look desperate. It's like the early days of online dating.

Carl: [laughs]
Sarah: If you aren't desperate and you don't have to go that route, like I have all of these other investors lined up to put a million and a half in the company. What if I put something on Angel List and there's nothing?Then, are those guys, like, woah, whatever? Maybe, the crowds are wise. I don't know. There's something still a little risky about it to me.
Carl: I think there is, but maybe the online dating is not a bad analogy.
Sarah: Yeah.
Carl: There is this chance that you find someone that really is special for what you're trying to do.
Sarah: Maybe, the key is when you're a pure start-up.
Carl: Yeah.
Sarah: You do it, like maybe the fact that we had a little bit of a business already made it messy.
Carl: You were already there. Many people come to this, they work at companies. They get together and they're making a new product. "I'm going to make a new social..."
Sarah: Yeah.
Carl: That's their first four rate. They don't have the networks that you have. They're not going to get anyone saying, you know, "Why didn't you call me?"
Sarah: [laughs]
Carl: Their problem is exactly the other.
Sarah: Right.
Carl: There are people in the world who would want to see the thing exist that they're trying to do. Either believe in them or believe in the idea because early on, certainly a lot of the funding is you believe in a person.
Sarah: Right.
Carl: In many cases, you're not in a real position to understand whether this is a good product or whether the market wants it.
Sarah: Yeah and if you're doing something really new, you'll probably, not use the word pivot, but I will.
Carl: Change three times.
Sarah: If you were starting a company now, if you were starting a hardware company, would you do a Kickstarter? Would you not? Would you list on Angel List? How would you fund it?Let's say they fire you tomorrow because of your radical move in making 3D printers.
Carl: Exactly, if I was doing it, I would most likely go to friends and family and that's what I would probably do. I wouldn't go to VCs early on. I think you can get prematurely.As a matter of fact, I just spent the last two days talking with a start-up that wants to sell itself and I was looking where they ended up and it's so clear that the founders and the VCs just got a cross purposes.
Sarah: Interesting.
Carl: They invested in the wrong things. They happen to have a great idea, but the time frame for returns was not a brilliant...nothing lined up.I think that's one of the real mistakes and if you don't need huge amounts of money and you can go to something else, I would probably tap into my network of people I know and do it that way.
Sarah: Yeah, I'll tell you one thing I see a lot with VCs and entrepreneurs when they get to cross purposes is that the VC, ironically, is the one who's like, "Go big, spend more money. Go big, spend more money." because if it goes well, that means you got to come back for money in their self interest whether that's why they're doing it rationally or not. It's a fact.If it fails, then they're out of it. They don't have to sit on the board anymore.
Carl: No.
Sarah: They sell it off. They move on to something else. They've already written up that money.
Carl: It's part of the business plan.
Sarah: If you do have something, they are way better with you trying to go big and if you don't, it's not going to meaningfully impact their returns either way. Whereas, an entrepreneur has totally, totally different pros and cons for going big.
Carl: Yeah, the times in my business career that I've spent money the most stupidly was during the dot come bubble. I was running a start-up. We had raised 90 million dollars. A couple hundred million dollar valuations on something that didn't exist and so nowadays, it's common, but that was 15 years ago we did this.
Sarah: [laughs] Yeah.
Carl: Every board meeting was, you're not spending fast enough. I will tell you like hiring hundreds of people, in a big company it's OK, but like, relative to the size you are, if you're five people, you can hire 25 the next month and do it well.
Sarah: Right.
Carl: You can integrate it. You can make sense of direction and every board meeting was the board members going, "You're not spending fast enough."
Sarah: Why were they saying that?
Carl: I think it's the same thing as now. There were these big exits.
Sarah: Yeah, yeah.
Carl: If you look back...
Sarah: Some people were buying companies based on a multiple of engineers that you had employed.
Carl: Right.
Sarah: That's a tangible reason than just build a building.
Carl: My son was asking me the other day, he said, "What did Mark Cuban do to get rich?"
Sarah: [laughs]
Carl: I was like...
Carl: I said it's hard to explain because it didn't turn into anything. He was like, "So, he became a billionaire like over nothing?" and I said, "Yeah, essentially. It was an idea..."
Sarah: I will say, when I did a show for Yahoo Finance, we had to route the video through Dallas. Yahoo still to this day feels like they spent so much money on Whether it makes sense or not, they make part of all the video go through Dallas and do something in the process.
Carl: Is there any other company that does that?
Sarah: No.
Carl: Exactly, so I mean...
Sarah: No and Yahoo shouldn't in my experience.
Carl: OK. The answer is he got rich building a video service for Yahoo's internal, is in use. OK. Now I have a much better answer for him. He was just dumbfounded. He was going off to college. We were having this funny conversation because he was trying to register online.He was trying to figure out the game theory of what classes to get into. He said, "This one I better sign up first because every aspiring entrepreneur wants to be like Mark Cuban." He's signing up for this class first. It was the CS class.

He said, "So I better sign up for that one first. The Latin, nobody is going to try to get into, so I'll do, I'll do that one last." We go through this. It degraded into how Mark Cuban became rich.

Sarah: That's crazy. It is funny how much he has become such a bad-ass for someone who...meanwhile you have things like, I can't remember what I was talking about the other day, but there, oh, Square, with all the trouble Square is having.I was talking to someone about their business which everyone seems to be talking about at every dinner party I go to right now and...
Carl: You need to broaden your network of friends.
Sarah: [laughs] I desperately do. I do not disagree with that. It's either reading Madeline or...[laughter]
Sarah: ...about Square. I think what occurred to me is if you look around, particularly city like San Francisco, you can see how much Square as a company has just transformed payments and small business in a more tangible and visceral way than I think anything I've seen in a long time.Yet it probably, not probably, it's highly likely they still will not build a huge company out of that because it is Tbow. It transformed the market but then ultimately wasn't able to capture the whole market.

When you put that next to something like, it's depressing.

Carl: On the other hand, you look at things that you're not quite sure what is that thing that allows someone with an idea, but not that unique an idea or an idea that's reproducible. I think Uber is doing a fantastic job or LB&B.Where you would have said, as soon as someone saw Uber happening here, it should have happened in 12 other places. A lot of people were deniers. Oh, this won't happen or they were too [inaudible 32:57] .
Sarah: I'm not the world's biggest [inaudible 32:59] fan. I think what he had going for him is he is not in any way intimidated about sued. He is not in any way intimidating taking on huge thuggy unions. He doesn't care if there's a guy with a tire iron in the back of his car wants to knee-cap him.I think that probably put off a lot of people.
Carl: Yeah, it is interesting that a market that is not as obvious that you could capture it wholesale is actually going that way. That one you could imagine really fragmented, just like taxis are fragmented.
Sarah: The whole Lyft thing has been amazing. Lyft went from the 5th place player in that market with the stupid mustaches. It is a strong number two.
Carl: OK, what do you, where...
Sarah: Over so many...
Carl: When you leave here, what do you...?
Sarah: For a while I actually was taking Lyfts even though I used to say I would never take them because they were 25 percent cheaper. It's honestly who is raised the $100 million that week and has a bigger discount. They are interchangeable.In San Francisco and I think San Francisco only city like this, they're interchangeable. The same drivers are driving both.
Carl: Right, that's true.
Sarah: The UI is pretty much exactly the same. So whoever's going to give me the best discount? If I go to Uber and they have surge pricing, I open up Lyft, vice versa.
Carl: OK. I need to download Lyft.[laughter]
Carl: I've just been lazy for no good reason.
Sarah: You've been lazy for no good reason. All right, we should wrap up. Paul warned me 4000 years ago. We were going to talk about patents but we didn't. We'll talk about patents next time.
Carl: Oh, yeah, there's a bunch of interesting stuff happening in patents.
Sarah: Hopefully things that get us to a better place with patents. It was good to see you this month.
Carl: Nice to see you too.
Sarah: I'll see you next month in another conference room.
Carl: Yes, exactly, we'll find a good room. Good.
Sarah: That's really fun.
Carl: That was great. Thank you!