Roger King
Roger King founded BayAngels which is dedicated to promoting the entrepreneurial spirit by assisting early-stage technology companies with capital, connections, and board-level advice. Examples of our portfolio companies include Pree Media, CashBet, Trpz, Sea of Change Trading Co.,
CEO of Chiefpeople
20 years’ experience in recruiting at both the executive level and the individual contributor level. Interested in companies with hiring needs. Offering extremely cost-effective solutions. Clients include SoftBank Robotics, Jiff, Gracenote, OpenTable, Manage, Grid Dynamics, and Navera.
Max Shapiro
Max Shapiro Founded PeopleConnect in 2000 to help early-stage high-tech companies find the talent they need to succeed. Their clients are in technology, biotech, cleantech, apps, services, medical devices, and consumer products.
He is also involved in areas that also support the startup community:
● Angel Investor and member of Keiretsu Forum since 2001
● Co-founder of Runway Innovation Hub
● Creator & Producer of PitchForce
PitchForce is a weekly pitch event for early stage companies with a panel of establish angel investors and CEO’s
Steve Hoffman
Steve Hoffman, or Captain Hoff as he’s called in Silicon Valley. Steve is the CEO of Founders Space, one of the world’s leading incubators and accelerators. He’s also an angel investor, limited partner at August Capital, serial entrepreneur, and author of Make Elephants Fly, the award-winning book on radical innovation.
Always innovating on his life, Captain Hoff has tried more professions than cats have lives, including serial entrepreneur, venture capitalist, angel investor, studio head, computer engineer, filmmaker, Hollywood TV exec, published author, coder, game designer, manga rewriter, animator and voice actor.
Steve was the Founder and Chairman of the Producers Guild Silicon Valley Chapter, Board of Governors of the New Media Council, and founding member of the Academy of Television’s Interactive Media Group.
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Shawn Flynn 0:00
On this week’s episode of the Silicon Valley podcast, we revisit some past episodes where we interviewed some angel investors here in Silicon Valley, where they shared their knowledge and wisdom with us. While we’re doing these throwback episodes right now, we’re also doing a lot on the back end for the website and a lot of other things. And we’re gonna have some big announcements for everyone in the next month. So stay prepared, but for right now, let’s start this week’s episode of the Silicon Valley podcast. Enjoy.
Announcer 0:28
Welcome to the Silicon Valley podcast with your host, Shawn Flynn, who interviews famous entrepreneurs, venture capitalists and leaders in tech, learn their secrets and see tomorrow’s world today.
Shawn Flynn 0:46
These companies that you’re working with these entrepreneurs around the world, can you tell us a little bit of the difference between entrepreneurs maybe in Australia, China, and here, what have you discovered on your journeys,
Steven Hoffman 0:59
Entrepreneurs are different everywhere, and a lot of it, people are rooted in their culture, you can’t escape your environment. So in Silicon Valley, what’s beautiful about Silicon Valley is there is no stereotype for an entrepreneur. Because half the entrepreneurs here were born overseas, you know, half the successful startups in Silicon Valley have overseas founders. So when you come to Silicon Valley, you see entrepreneurs from everywhere from India, from Africa, from Asia, from Europe, and they’re all here. When you’re in other countries, you really start to notice the differences. So I would say in Silicon Valley, the people who come here are self-selecting, they’re already highly competitive, highly driven, and they want to succeed, otherwise, they would have not have relocated to Silicon Valley to do that. And even in Silicon Valley, a lot of the entrepreneurs are from all across the United States, or Canada, or places like that. Very few people were actually born in Silicon Valley. In fact, when I go to a meeting in Silicon Valley here, I say, who’s from California, I’m usually the only person to raise my hand. So and I know you’re from Berkeley, but we’re, we’re the exception, not the rule. When I go abroad, I see entrepreneurs in China, in particular, are extremely driven. There is a certain mentality that, you know, China in the past 50 years came up from extreme poverty into, you know, relative luxury. Some people have huge amounts of money, but people had to work really hard. And that work ethic is ingrained in everyone. If you don’t compete in China, you get left behind. It’s sort of like no mercy. So people in China work, like you go to Beijing, and I’ve been in Beijing with entrepreneurs, and I’m like, what’s 10 o’clock, I think I’ll head back to my hotel. They’re like 10 o’clock, whoa, we got to go to a meeting, you know, and they’re having like a meeting at 11 at night, 11 at night. So they work endless hours, and weekends aren’t even weekends. And if you work for a startup in Beijing, in China, in general, they have what’s called 996, you know, work from 9am to 9pm, six days a week. Well, the 996 is for average workers, not for entrepreneurs, if you’re an entrepreneur, it might be 811. Seven, you are working all the time. And I know a lot of people who work in startups who burn out, I mean, it’s just so intense, you barely have time like to get home and shower and shop, there’s almost no time for any free time. In other countries, it’s very different if the other extreme is probably Europe. And now in Europe, people are very smart, very thoughtful, they’re very creative. But they don’t have that same driving work ethic that you would see in Asia, this sort of manic work ethic, which isn’t really healthy to work that hard. So in Europe, they’re much, I would say, much more rational, they take a month off during August for holidays, you know, they don’t work super late at night, unless there’s a really strong reason. So in Europe, they don’t feel that the same pressure. And of course, I’m generalizing, you asked me a question where I’m forced to generalize. So there are exceptions to all these rules in every country. But in Europe, especially when European entrepreneurs come here, and I work with a lot of them, I mentor them and help them raise capital. A lot of times I will look at them and I’ll say Don’t you feel urgency, you’ve been working on this product for a year and a half? Don’t you want to get it out? Now we have time we have time. You know, in Silicon Valley. We’re like paranoid, we’re like we have to get this product out next week, because somebody is copying us. In China. They’re paranoid. You go to countries like Japan and Korea. So Japan has fallen behind and entrepreneurs. I mean, really a lot of Japanese. They just take the comfortable corporate job in Korea. They’re really pushing hard for entrepreneurial ism. In Korea, they work very hard. In fact, the Koreans work the longest hours of anybody in the world. But they actually did a study in Korea, and they found out the Koreans were one of the most inefficient people in the world. So these people in these huge companies like Samsung, and you name it are staying incredibly long hours in these big companies, but they are just killing time. They’re just waiting for their boss to go home so they can go home. So if you look at brands, there will also work like the Chinese extremely hard. But at the end of the day, and I say this in China to productivity is what matters most. It’s not how hard you work, it’s not the number of hours, it’s the results you produce. And I actually think pushing the hours too far out, unless you’re an exceptional individual, and you can stay alert and productive for those long hours without any breaks. Most people, their productivity starts to decline dramatically after eight hours, and they’re just not being productive. So I promote actually greater flexibility. So you look at around the world. And a lot of people say, oh, Americans are more innovative, we’re more creative. And I think some of that comes from our culture, too. In the American culture, we are an individualist culture, we believe that we should follow our own belief. Now, of course, every culture has a group mentality too. But in all of Asia, China, Japan, Korea, it’s much more group focused, you define yourself by your group, and going against the group is something most people do not want to do. So you get a lot of weird and wacky ideas here where the group will say, that’s crazy, give it up, don’t even you know, who would ever want that. And the entrepreneur still going and doing it, they want it and they want to see it happen. And they don’t care. That’s one thing that defines our culture. In all of the world, we like to say Chinese copy, right? We used to say Japanese copy, and then Koreans copy and now Chinese copy. But the fact is, if you’re in Silicon Valley, everybody copies most of the products that were hits like Facebook, that was a copy of MySpace, and Friendster, most of the products are only partially innovative. So I don’t think Chinese necessarily copy more, I think they copied because it works. When they see something working over in Silicon Valley, and they can bring it into the Chinese market. First, they know they have a big win. And it didn’t require all the trial and error that innovation does. And so naturally, what we’re seeing now in China, and in other countries is they become more innovative. Just like in Japan, they’re pushing the limits. So all of these startup communities and entrepreneur communities are always innovating. And they’re always copying
Shawn Flynn 7:28
These startup communities around the world. They try to at least it seems kind of mimic copy Silicon Valley. What advice would you have for them to actually bring Silicon Valley to their locations? Or is it even possible?
Steven Hoffman 7:42
It’s funny you say that, because when I started founder space, our mission was to bring entrepreneurs from all over the world to Silicon Valley. But then we saw an opportunity. We met so many people from all over the world who said, can’t you bring Silicon Valley to us, we want Silicon Valley to you. And since we were already established here, we had all these relationships from all over the world. Our mission became to bring Silicon Valley to the rest of the world. So I meet with Prime Ministers, I meet with mayors, I meet with governors all over the world. And they’re always asking me this question. How do we replicate Silicon Valley here? And the answer is Silicon Valley, very unique. Like I said, the thing that makes Silicon Valley so amazing, are things you can’t export our culture, right? Our individualist culture, the whole hippie culture with Steve Jobs and Wozniak, where part of the whole attraction were this magnet for people from all around the world in a very open system, right? We’re not a homogenous society, like China, or Korea or Japan, or many European countries, we are very open to immigrants from all over the world. Those things you cannot copy, you cannot replicate those in other places. So I tell entrepreneurial hubs and the people who want to develop a real hub for entrepreneurial ism. Look at the strengths of your region. So if you take Shenzhen for example, why is Shenzhen the most dynamic city in China for entrepreneurs? Well, there are a couple reasons and they have nothing to do with Silicon Valley. Number one, Shenzhen is a brand new city. It was literally founded like 3040 years ago. I don’t know the exact date but it’s the new city. It grew out of nothing, which meant everybody in Shenzhen is new. So they all had to immigrate just like people come to Silicon Valley from all across China. So they got a lot of young people. It’s predominantly young. It’s a very young city with young people who move there for the opportunity again, self-selecting very ambitious, very driven, willing to try new things. There wasn’t an established hierarchy like there is in many cities, so that field was wide open. Another thing about Shenzhen is that the whole electronics supply chain and ecosystem for manufacturing Electronics has evolved in Shenzhen, you know, cheap electronics, so with Shenzhen, it naturally became an innovation hub because they had this huge infrastructure where literally you can go out with an idea for a new gadget device electronics device. And within two to three weeks, you can have somebody manufacturing it for you. It’s incredibly fast, incredibly dynamic system. So in each place, I go, and I go to a lot of places, you know, we’ve set up our operations in Australia, we’ve had founder space in Singapore, I go to Malaysia, I go all around the world. I was just in Latvia, you know, working there advising the government, in fact, of Latvia, which is a very small country in Europe, on how to create their innovation ecosystem. And I was like, there are a number of things you need, you need favorable policies that are implemented, to actually attract and promote entrepreneurial ism, you need to look at what your universities, what your research institutions are really good at. You need to leverage that talent pool. And a lot of times you need to push into new territory that isn’t already claimed. So you need to move into new technologies that aren’t already dominated by a certain region that would Latvia be able to compete with Shenzhen on manufacturing electronics? Never. Right. So what are their strengths? What is their position in Europe, a great example is Estonia, which is right next to Latvia, Estonia became a huge hub of entrepreneurism, and it’s a tiny country, like 2 million people, it’s really small. How did it become so dynamic? Well, after it left broke away from the Soviet Union, they totally reorganized the whole economy and how they do stuff. And the number one thing they did was they brought every city service and everything an entrepreneur would need online, very early, so and then they made an E residency. So an E residency means you can actually be a resident start a business in Estonia without ever setting foot there, you can literally set up your whole company, and everything involved in Estonia get favorable tax treatment, and all the advantages of entering the European market without ever going there, then they did a lot of other things. You know, they invested a lot in promoting put in high speed internet, they have a lot of groups that promote entrepreneurship, they reached out to the rest of the world, they made favorable lending policies, all of these things come into play. It’s actually not one thing. It’s a lot of different legislation that the government has to put in place, the culture, what the culture is, what the natural resources are, I mean, resources in terms of talent, knowledge, resources, people that you can leverage all of these coming together.
Shawn Flynn 12:32
So going back to the pitch event, one common question I always hear judges ask, tell us about the traction. And a lot of times I hear the startup go, what do you mean by traction? What do you mean by that? as an investor? Max, what do you mean when you say, Hey, what’s the attraction to this company?
Max Shapiro 12:49
I want to know what kind of sales you’ve got, I want to know your month over month growth. I want to know your cost of acquisition CEOs, you can spit those numbers out our CAC is $3.42. And LTV is $27.32. When they can spit that stuff out. It’s really impressive. And if you see them hemming and hawing and trying to think what the number is, that’s not good.
Shawn Flynn 13:12
Okay, so say there’s a startup founder, and he’s hemming Han, he has no idea. He’s stuck on a question. What’s the best answer for him to give? What if he just doesn’t know?
Max Shapiro 13:23
Yeah, I think the best answer is, Oh, I should have that right tip of my tongue. I don’t let me check. And I’ll be happy to get back to you tomorrow with that number. That’s the best way to handle it and just say, Yeah, I should have known that. I’m sorry that I don’t. But I’ll get back to you tomorrow morning with those numbers.
Shawn Flynn 13:39
And let’s say there’s a startup at an event, either an investor in the audience, or someone on the panel really likes this company. What is the entire process normally for that company, from that day they’re presented to, they get a check.
Max Shapiro 13:53
The timeline could be three or four months, but the next step is going to be investor is going to reach out to that person and say, have to have coffee with you. Maybe it’s a virtual coffee, it’s a zoom meeting, got an hour, or we can really sit down and dig deep into what you’re doing. Because Yeah, you whetted my appetite with this four minute pitch. But there’s a lot more and companies need different types of decks too. You need a deck for a four minute elevator pitch. Maybe for a four minute PowerPoint, maybe you need one for eight or 10. But you need a deck that you can leave behind. It’s more thorough and longer a deck that you can email out to somebody goal in any pitch event is to elicit enough interest and excitement so that the investors want to know more. And I hear that I like what you do, and I’ve got some courses. I really want to learn more. Let’s figure out a time to meet up next week.
Shawn Flynn 14:42
Okay, then what should the normal follow up be? Should the startup just start emailing rapidly or how does that dance work?
Max Shapiro 14:50
Way it works is the investor hasn’t expressed interest. I would follow up and say great meeting you on pitch force last night. I was wondering if You might have 15 minutes to get some questions that I’d love to get answered from you based on your experience. Be quick, be direct, be persistent. I know someone who was very, very prominent with an angel organization. And she was notorious for not getting back to people. But if you got back to her two or three times and showed persistence that impressed her, and that’s, you know, it’s like I emailed her, she never got back to me, I guess she’s not interested. Now, the beauty of email today, and even texting, I mean, if you can text a person, rather than email them, you’re better off. The beauty today is that, well, I don’t want to be too pushy. If you’re being too pushy, they’ll tell you, or after three or four times, if they’re not getting back to you, then obeah, one of my pet peeves is talking to people that say they’re interested in your services, and you had a really good rapport going, and then all I know, and then they change their mind. And I’ll reach out to them two or three times, and they never respond back. It’s stupid to go radio silent on somebody, when it takes you less than 30 seconds. Hey, great talking to you, you know, we decided to move in another direction. Thanks for coming. That’s like you never know when you’re going to need somebody for something else. And if you don’t respond, if you’re not persistent, if you’re not polite, it comes back to bite you.
Shawn Flynn 16:11
What if I’m a startup and one of these pitch events, but I decided, hey, I want to go out to an angel group. I mean, Max, you’ve been involved Keiretsu. And many of the angel groups here in Silicon Valley, everyone knows who you are, what’s the best way for a startup to get an angel groups attention.
Max Shapiro 16:27
Me, hopefully, there’s somebody in that group that they know. But if they don’t, then just go through the process. There are companies that get meetings in ANGEL groups without having a warm introduction. With VCs that’s really hard to get into a VC without a warm introduction. But Angel groups, they’ve all got a procedure, they’ve got a process for companies raising their seed round, it’s not as hard to get into the angel groups, because everybody’s looking for deals. I mean, even during these COVID times people are looking to invest in they’re looking for good opportunities. Angels are not out there spending time, two and a half hours at pitch for us if they weren’t interested in finding something that was going to hopefully benefit them and they can invest in.
Shawn Flynn 17:09
Can you talk about how venture capitalists’ investment banks, Angel groups, how they network, how they talk, how they share deals with each other.
Roger King 17:19
So we do share deal flow. And one of the things that people don’t realize about Silicon Valley, it’s a really small neighborhood, and everybody knows everybody. So if we get a call, and somebody says, Hey, have you looked at this deal that so and so’s doing, and we have and we didn’t like it? We’re gonna tell them what we thought about it. And we’ll do the same if we thought it was a great deal. So yeah, we share information, whether it’s good or bad about startup companies, you know, a lot of people ask me, Hey, I’m an entrepreneur, how do I, how do I get in front of an angel, I can’t get a meeting. Well, that’s not true. Because every weekend saw in San Francisco almost every day, there’s a pitch event. So anybody can attend these pitch events, and maybe meet one of the panelists get a business card, get their email, and then follow up and say, Hey, I saw you at such and such event, I was impressed with your judging. I wonder if you take a minute and take a look at my pitch to you know, be very aggressive and go out there, put yourself out there, it’s not that hard. It’s all about networking.
Shawn Flynn 18:28
So you’re saying all about networking? Is it okay? For a startup founder to ask a judge asked investor to grab coffee and kind of brainstorm with them.
Roger King 18:39
I think the best thing you can do, because we get approached after every pitch event, and I’m a judge on a number of pitch events, the best thing you can do is get their contact information, don’t try and sell them on the spot. You know, this is what I’m doing. This is what I need blah, blah, blah, it’s not going to work because we get pitched all day long. What you can do as a minimum is get their contact information and get their permission. Is it okay? If I send you an idea that I’m working on? I think it’d be very interesting to you. Nine out of 10 investors or angels were gonna say, Sure, here’s my card, I’ll take a look at it, and then follow up. We met at the such and such event. Here’s my idea. I wonder if you take a look at it. Give me some feedback. I’d be open to some suggestions. I’d love to have a meeting. It’s a step by step process.
Shawn Flynn 19:30
So what you’re telling me is if I met an angel today, tomorrow, he’s not going to write a check.
Roger King 19:35
Yeah, that’s correct. It’s just like sending in a resume. You’re not going to get a job offer. But what you’re trying to do is generate enough interest that they might say, Hey, I saw your resume or I saw your business plan. It’s kind of interesting. I’ve got a few questions. Let’s schedule a phone call. And if you do well on a phone call, let’s schedule a meeting.
Shawn Flynn 19:56
So can we go into more detail into that, so say, I’m a brand new Start up, I have an idea on a napkin, kind of what’s my process to get in front of these Angel groups?
Roger King 20:08
Well, again, you have, you have to either apply through our website or come to one of our meetings and get introduced. But what we’re going to be looking at is, you know, what’s the problem you’re trying to solve? What’s your solution? What’s the size of the market? Who’s in the space? Who are you competing with? Do you have any patents? Have you raised any money to date? And hopefully you have we’re not we’re never going to be the first money in? And what is it you’re looking for from us? Is that advice? Is that money? Is it network? Is it connections? Is it introductions to some of our portfolio companies or clients? Tell me what you need, and we will help you.
Shawn Flynn 20:50
That was really interesting. One of the things you said, we’re never going to be the first money, can you talk about kind of the meaning of that?
Roger King 20:57
Sure. So the stages of money, the first money in is perhaps money out of your own pocket as an entrepreneur, the next money is money that you’ve raised from friends and family money that comes from people that believe in you for some reason. Now, we want to know that you vary some money, but that’s not necessarily what we call smart money. You know, maybe you raised $50,000, because you’re at has some money and thinks you’re a nice kid, it’s great that you raised money, but that doesn’t mean that you’ve got something that’s fundable. So we want to see some smart money in the room. And then the next money after friends and family would be perhaps a small Angel round.
Shawn Flynn 21:36
So then what are some common mistakes that founders make when they’re pitching to angel investors for the first time?
Roger King 21:45
So one of the questions I get asked, which is silly question. That’s a basic question is, what should I wear to a pitch meeting? And my answer is just pretend as the most important meeting of your life. But mistakes that they make is, and it’s tough, I my hat’s off to him, it’s tough to present an idea in a fixed time period of say, three to five minutes. But one of the biggest mistakes entrepreneurs make in a fixed time pitch is they spend too much time talking about the problem, and not enough time talking about the solution. Another mistake is, you guys live and breathe. This idea is all you’ve been working on day and night. But the audience has no idea as to what it is that you do. So boil it down to some something simple. We are Airbnb for RV rentals. Well, we know what an RV is, we know what Airbnb is, boom, give us the rest of the story. So boil it down to something simple that we understand. And then go a little deeper. Another mistake people make is sometimes the founder is not the best pitch person, maybe their English is a second language. And maybe they should have their marketing person, do the pitch and then have the founder answer the technical questions.
Shawn Flynn 23:05
Interesting. So are you saying that, say the founders English is maybe not the best that they should have someone else give the presentation? That’s okay with the investors, the judges at these events?
Roger King 23:19
Yeah, not only now I’ll go one step further. You can hire an MBA student to understand your pitch deck and make that pitch. And maybe they’re not even associated with the with the company, they’re just out there to help pitch to introduce the founder who can answer the deeper and technical questions. Again, the whole purpose of the pitch is to generate interest, you’re not going to get a check, because you pitch to an angel group, but you might get some interest. And the interest is, yeah, I’d like to learn more. It’s interesting, I think there’s some potential there. And I’m gonna bring my friend who’s also an investor, who’s invested in this space, because I’m not an expert in that field, but he or she is.
Shawn Flynn 24:04
So then with that, say they only have three minutes or five minutes. you’d mentioned that maybe they spend too much time on the problem, but how should they allocate that the time that limited amount of time? You know,
Roger King 24:19
That’s a broad question it every company is different. So some companies are simply a great idea. And other companies might have landed a key client already. So if you if you’re putting something on the shelf in a retail space, and you’ve already landed Costco, spend more time on that, you know, that’s really interesting. That’s, that’s revenue we’re really interested in, in traction. If you’ve got a patent, tell us about the patent that’s really interesting. You know, the protection. If you’re first to market, you know, make sure you don’t have a competitor that’s already out there. Whatever your biggest bragging point is, that’s purchasers spend the most time on. And it could be that my CTO has three successful exits, you know, that’s really interesting or the founder has successful exits. What have you done in the past? How did you build put the team together? How did you raise $200,000? in three months, you know, what is it that is going to get my interest? And it could be any one of those things, or it could be none of those things for that matter.
Shawn Flynn 25:27
Steve, with all this innovation happening with startups, corporates, everywhere in the world, what excites you about future technology? Where are we headed the next 20 years,
Steven Hoffman 25:36
I spend huge amounts of time traveling around the world, looking at the latest technologies, what entrepreneurs are doing, what’s emerging, going to universities, and I will tell you, it’s both glorious, it’s going to blow our minds away, and a little scary, because this technology is evolving so fast, and I don’t think our society or institutions, you know, democracy can even keep up with these things. What I’m seeing is really exciting me are different areas. So one area is where we’re merging biology and technology. We all know CRISPR gene editing software. CRISPR is amazing, right? You can go in there and edit genes, and actually begin to cure diseases, you can start to create crops that can be resistant to climate change, you can develop new types of animals and plants that never existed before, it’s like we’re taking the power of evolution and natural selection into our own hands, we can literally do this. So we now there are now doctors using CRISPR. And there was a big ace in China with that HIV baby to make the babies HIV resistant. The problem is, in theory, it would be great if every human being was HIV resistant, if we could modify the whole next generation, so nobody ever had to suffer. But we don’t know the long term implications of changing a gene, like of snipping out genes or inserting new genes. We don’t know what the long term implications are in our food. We don’t know what the long term implications are in the cattle and the in the livestock we eat, or in our own bodies. In other cases, there are companies out there doing miraculous things like theirs spark therapeutics, they actually use gene therapy, for this rare eye condition, where you are going where a child is going blind, totally reverse and cure the eye condition, your gene therapy. So somebody who would be blind, can see for the rest of their life. Absolutely amazing. You can actually go in now through in vitro fertilization. And actually, you can’t do this in the US because it’s prohibited. But you can go to the Ukraine, for example. And you can get a baby that has three parents.
It has the DNA from the sperm, the chromosomes from the egg, and then it has mitochondria from a third party and mitochondria also influences how the baby will come out. And so yes, a baby can technically have three parents or 100 parents if we want. And they’re doing this right now, today, in the United States, it’s still legal, you can actually go to a fertility clinic, and they can look through the different eggs. And they can actually allow you to pick out certain traits, like the eye color of your baby. So you could pick out Yes, you could do this today, you could pick out a baby with green eyes, or brown eyes, or blue eyes, whatever you want, and have the it costs a lot of money. So you have to have some money. But this is possible today. Can you imagine tomorrow, what we can do, you know, we could have designer pets, you know, I want my pet to look this way I want this type of fur I want. I want a purple cat, you know, they are actually in this whole convergence of technology and biology, they are actually able to take stem cells now and do incredible things in a dish like a petri dish. You can grow brain cells right now. And they call these mini brains. Why are scientists growing many brains? Well, they’re growing them. And they’re actually using them to test for diseases like Alzheimer’s disease, Parkinson’s disease, to test drugs to actually cure these diseases. So these, these miniature brains, they can do that. But there’s no reason these brains have to be miniature. In fact, they can grow out of stem cells, a brain if they wanted to, and they haven’t done it yet. But a larger and larger and larger brains, eventually the size of a human brain. Now is that conscious, you know, a scientist at Reading University in the UK, they actually took one of these mini brains, they had a little robot car that they built, they hooked the mini brain up to the robot car. And that mini brain could actually be used to help the car avoid obstacles navigate. Well, you know, when do these mini brains become conscious? Where are we headed with this? This is just one area. Then there’s AI, which is exploding the power of AI. So Facebook actually recently did an experiment on their users where they’re always experimenting on their users where they’re doing pigs. What Facebook did was they ran an experiment where they asked their users, what videos, would you click on? What articles would you click on? And the users would say, Oh, I would do this article, I would do that video. That’s what I will do. Then they asked their AI, what the users would do. Who do you think was right? Most of the time, you are telling Facebook what you would do? Or an AI telling Facebook? What you would do? Well, I will tell you, the AI was right, more than you are, the AI knows you. And what you will do better than you know yourself. You’re like, how is it possible? I mean, I know what I will do. But the sad thing is, human beings don’t know themselves that Well, a lot of times, they’ll say, you know, I would read that really intelligent article on climate change. But what we are doing is we’re looking at the cat video, or watching the cat video, because that looks more interesting, you know, the viral video. So AI actually looks at what you actually do what you’ve done in the past. And then they extrapolate from that it doesn’t have to be a genius. It doesn’t have to be a sentience AI to do that. It just has to get enough data and statistics. This is the essence of AI. This power now resides in big companies like Facebook actually predict not just what we’ll do on Facebook. But as we walk around with our mobile phones, interacting with them, everywhere we go. And everything we do, we are giving them data about every decision we make, where we go, what we decide where we decide to eat, what friends we decide to meet all of these things, they can gather data on these different apps. And they can begin to use this data for very useful things for us, like, read through all the reviews, because that’s a pretty cumbersome, just tell me what the restaurant all like it. And then AI will basically be able to tell you, you would love this restaurant, all the qualities you and this is what you should order. So you just and in fact, I’m ordering it for you. And I know you’ll be there around 1230. So I’ll have it all set for you at 1230. You just walk in and sit down, I’ve reserved a table, the food will be there everything. This is the future of where we’re headed. You look at companies like Amazon, and why people are so worried that they have so much power, it’s because they have so much of this data on what we want to buy. And what we’ll do. So I’m looking out there at AI. And I’m saying AI is going to really deeply affect all of our lives, AI is going to change, basically, because it’s so convenient and so useful, how we live, all the things that we do now, that are chores to us that take up our time, but don’t really gratify us, eventually, we’re going to opt to hand them to an AI. So everything from picking your kids up at school, to even answering your phone to scheduling meetings, AI will do all of this. But it will do much more than that. So Amazon right now, the reason they can offer you one day shipping, at no extra cost a lot of the time is because statistically, they’re looking at how many people in a given region, like a city, order a certain product on any given day. So they are shipping those in advance. Essentially, the product, if you’re buying razor blades, those razor blades are already waiting for you. Because statistically they know so many people will buy razor blades today, and they can ship them to your house today, what Amazon wants to do. And the big companies like Alibaba and China, what they want to do where they want to go with AI, is they don’t want to just do it on a group basis. What they want to do is eventually know exactly what you want before you know. So just like Facebook can predict what you will click on before you click on it. They want to know what you will order before you order it. Why do they want to do this so they can ship it to you before you even make the buying decision. Because you understand when somebody makes a buying decision, they can shop around, they can say oh, I want to buy from Amazon or I find it cheaper here. But what Amazon wants to do in the future, if they can is actually ship a product you in advance. You open up the box, you’re like, oh, here’s an Amazon box. You’re used to getting them because you get them all the time. You open it up. Oh my god, there’s that gadget. I was just thinking of buying this gadget. Why were you thinking of buying this gadget? Well, because maybe they got data of you browsing other websites looking reading articles. So Amazon’s goal is to take the buying decision out of buying by knowing as much about you as possible with their AI and big data. So that whenever you need products, whether it’s toilet paper, you’re about to run out some new item that you covet, or gift for your wife or your husband, that item the perfect gift. You open the box, it’s there, they show you what it is, and its already gift wrapped. All you have to do is hand it to your loved one. This is where e commerce is going. Other areas of technology extremely exciting, our space exploration. We all know Elon Musk and Jeff Bezos are leading the charge. You know, Jeff Bezos with Blue Origin Elon Musk with SpaceX. These are billionaires who have the money and really pushing the limits. where humanity will go. So I see Elon Musk goal is to get humans living on Mars. And he’s doing this not for practical reasons. He’s doing it for existential reasons, philosophical reasons, he believes that a single asteroid, which is true, like one that wiped out the dinosaurs could come anytime and literally wipe out most of the world’s population, or a solar flare. Throughout the billions of years of Earth’s history have happened quite often some of them on such a massive scale, that they could literally fry humanity. So you must believe that we have to colonize other planets. That doesn’t mean it’s practical or easy. It just means he’s a determined entrepreneur, and he’s going to do and visionary. Now, if you talk to the scientists, most of them would say, it’s crazy. in our lifetime, unless we extend life, Elon Musk probably won’t get there to really having people more than just if he’s lucky and occasional visitor to Mars. But to actually set up a colony, what’s more likely, we’re going to see is that our machines are going to be the first inhabitants of these planets, we’re going to be building robots, large and small, everything from big robots to nano robots, which are going to be converting Mars over many, many years, it could be 100 years into a habitable planet. Now, 100 years in the scheme of things, it’s a lot for us to imagine. But in the scheme of things, you know, if you look at humans have been around modern humans have been around 100,000 years, Homo erectus and all the precursors a million years, you know, these apes transforming into humans, you know, 100 years is nothing. And in the course of the world, you know, being four point something billion years old, 100 years is nothing. So, we will be using new forms of biology, which will be seeding these planets and robots, that is actually where the action is in space. And also pulling resources from these planets, pulling minerals, rare earth minerals, you know, gold, platinum, all these things, you know, they may be in abundance, definitely on meteors on these planets. Will we mind these planets? How will that look? What type of ecosystem will develop? And will it be an ecosystem that sustainable? Will there be enough money in this like from colonizing these planets that we can actually afford to keep investing in them? Or are they a boondoggle for the near term with our current technology? Those are open questions. But no matter what happens, we are seeing space as something that only existed in the realm of big governments, being able to launch satellites and do these big space projects like the moon landing is now in the commercial sector. That is a huge dramatic change. And that is a whole ecosystem where young entrepreneurs with new ideas can make it this more efficient to do things we never thought were possible, can actually have a lot of potential. Another area I’m excited about. A fourth area that I’m really excited about is brain computer interfaces. I have actually consulted on these projects. I’ve done extensive amounts of research on how do we connect our brains to the internet, because honestly, that’s the next big frontier. You know, phones are pretty efficient. phones are very good for most of what we need. But phones are still slow, like inputting to a phone, typing on a phone is still painful. And even talking with your voice and a phone is painful. And you don’t often want to do it in front of other people. It’s awkward. So what happens when an Elan Musk is working on this many people are working on it, actually, Mark Zuckerberg is working on it. What happens when we are able to literally take our thoughts and translate those into actions over the internet. So Facebook, they are working on a technology right now, where they hope could read the thoughts in your mind and actually allow you to just send a text message, say, Oh, I’m going to send a text message to Shawn and I think and it happens, it’s done. Oh, you order a product online, you just think, Oh, I need this. You know, I’m looking Oh, my cereal box is empty. Amazon got the message, the cereal box is on its way it’ll be at my house in an hour. So this holds huge promise, it will open up something that will make Android and iOS look like operating systems from the cave era. Right? It’s like when we look back at those old computers, you know, the Altair? Or even the early versions of Linux, which, you know, command line you had to do. We never use those right? You’ll be like, Oh, I had to use an Android device when I was younger. That’s crazy. The beauty of this is that it would be so convenient and so easy. The scary part of this is, we all know, without a doubt, we can trust Mark Zuckerberg with our data and Jeff Bezos, we can trust them with our data, because they will never abuse. That’s not true, right? We found that out the hard way. That company’s primary concern is monetizing your data, how to make money off of your data, their secondary, or maybe third or fourth or fifth concern is you’re actually privacy if they have any concern at all. And so when you open up the mind to these new devices that can actually read your thoughts. You are opening up all your innermost thoughts, potentially to some Corporation, which may or may not have your best interests in mind, and may or may not use that data in a responsible way. This is serious, it gets even more serious when you talk about writing to the mind. Now, DARPA is actually building helmets right now, smart helmets for the military, where they want to have two way communication, they have a whole program now for two way, not just reading what soldiers are doing so that they can coordinate everybody on the battlefield, but writing telling them what to do next, and maybe even before they know it. Now, what people don’t realize is that 90% of your actions, actions that you actually take every day are actually triggered by your subconscious, not your conscious, your consciousness, if you read about neuroscience, it’s a very small part of your overall brain activity. And it’s only when you have time to really think about and make a decision on something, all the reactions and stuff you do every day. And even what decisions you make, are all influenced by data that you’re gathering without even being aware of it. So when people have the ability to influence your subconscious, or actually even right into your mind, without you being conscious of it, it’s one thing for them to have for your identity to be hacked, you know, your identity to be hacked, and they steal your credit card, and they go out and they pretend they’re you and order all these products. But another thing to have your real identity hack, you may actually not know they’re doing it. And they may be there’s a lot of paranoid schizophrenics who think they’re being mind controlled. But we are, you know, within our lifetime, we will probably be at the point where we can actually write into the brain to some degree or control. Now, why say in our lifetime, is because it’s happening right now. And people just don’t realize it. And I’m not a conspiracy theorist. But it’s happening with rats in a lab. So scientists in a lab, have actually taken a rat. And they have actually controlled the rat, implanted a chip in the rats’ brain, and were able to control the rat, everything the rat does. And the rat didn’t even know it was being controlled. So we can do this with a chip, a wireless chip and a rat’s brain. If Elon Musk puts his chip in your brain, are you going to get it, you have to have a lot of trust there. Because at a certain point, you could be giving up your autonomy. So these are really important decisions. You know, when we’re talking about CRISPR, when we’re talking about AI, when we’re talking about brain computer interfaces, all of these technologies have amazing benefits to humanity, amazing things they’re going to do. They also have a dark side, you know, so it’s like everything we’ve invented, you know, all the new technologies can be put to good uses or bad uses. And this is where society comes into play and us as individuals in actually making people aware of this and opening it up into a discussion.
Announcer 42:54
Thank you for listening to the Silicon Valley podcast. To access our resources, visit us at the Silicon Valley podcast calm and follow our host on Twitter, Facebook, and LinkedIn at Shawn Flynn SV. This show is for entertainment purposes only. Before making any decisions, consult a professional.
