Evening panel session:
Matt Cohler of Facebook
Reid Hoffman, founder of LinkedIn
Chris Sacca, Head of Special Initiatives at Google
Alan Morgan, Mayfield, Silicon Valley VC firm
Chaired by Jonathon Guthrie from the FT
[Note: All quotes are paraphrased. Apologies for typos.]
Matt Cohler of Facebook: A pertinent question is how do you bring Silicon Valley to Oxford? Yale modelled itself of Oxford, and both are highly theoretical universities, doing ‘non-applied’ research. This contrast sharply with Stanford University, an engine for Silicon Valley, where students are encouraged to do work and research which will have tangible application.
Alan Morgan, Mayfield, Silicon Valley VC firm: Is VC over? Since startups don’t need money any more and the exits are only $30m and the only question is how much Google will pay. However, he’s been through a lot of cycles. Most new companies are what we call features, not companies. They have am interesting product, but not a full company. They get sold for $10-15m but it’s not enough to support the VC community or the Silicon Valley. The other part of the story is that the IPO market is killed for tech firms in the US. The added cost of IPO market makes it only possible for large companies. Plus the sell-side analysts who covered young tech firms, that class of people, was destroyed after the bubble during the ‘nuclear winter’. It always has take 4-6 year stouild a companies with any endurance, as the oldest stuff. So keep your eyes open for the next 12-24 months. The long term health of the business is
Chris Sacca, Head of Special Initiatives at Google: Please use quote marks around actual quotes, he says. He’s admits been twittering and blogging today, but he he thinks it is incumbent on people to stop and think before they blog quotes marks around what people say. However he thinks that the quality and expanse of blogging has never been better.
Reid Hoffman, founder of LinkedIn: In the next ten years there will be a lot more identity on the Net. There will be social costs to being a “Troll“. What has happened is that the systems for identity are coming into place. Wikipedia tried to be democratic, but around political or intense subjects, they had to introduce controls.
Morgan: We are in the early days of the Web and all behaviours have pre-existing forms offline. But in the future there will have to be more accountability. A light-weight version of ‘letters to the editor’ where there is a name and address attached to someone’s comments. Anonymity does not always bring out the best in people.
Morgan: Today we have an environment where there are a lot of people with experience in this space, so the pressure on deal is increasing but there is more prudence than in 1999.
Question: There is a British paranoia about not being ale to produce a Google. How could we do better?
Morgan: There is an acknowledgement in Silicon Valley that failure can be a positive. That culture doesn’t exist many other places in the world and it’s one of these subtle things which is a huge factor in entrepreneurship.
Sacca: Claims he lost the equivalent of the Liberian national debt in one day in 2000, but now finds himself retelling that easily in his work in Silicon Valley. He also made the point that he had been asked where he went to school more times in the last five hours at the event today than he has in the last five year sin Silicon Valley.
Morgan: Sites that sell things have found that the more data they allow users to put on the site about themselves, the more they are trusted.
Sacca: The future of the web is much more personalised and persistent. That connection will be concurrent across devices, mobile tv, etc. Within 5-0 years you might finally start to seem some humility amongst networks and mobile device will talk to PC etc.
Question (asked by Peter Nixey): At what point does the market cap and tax dollars from Google mean that a threat from another company becomes a threat to the States itself?
Hoffman: There are other search engines than Google. But you can imagine in a Hollywood fllm, might want to hack the search and query flow from the people in the Pentagon.
Sacca: We have no formal relations with the Pentagon [that was a joke]. It’s incumbent upon all of us that we stay within the law on how that data is used. It’s at the core of our company.
Flipping companies for sale:
Hoffman: It’s almost never wise to do a ‘build and flip’.
Sacca: Good Technology was built in the MP3 player market, and instead they changed the company to be a mobile firm and sold to Motorola, so they did adjust.
Morgan: There are not as many acquisitions as people think. The number of deals by the likes of Google or Yahoo to buy smaller firms are much smaller than the reality.
Sacca: We probably do four deals for every one that makes the news. Most are 2-4 person teams which are pre-funding.
Entertainment?
Hoffman: Invest in the consumer internet, then you are investing on one of the seven deadly sins. Paying users might work, but this is not just entertainment it’s also about vanity – and that is a powerful motivator.
Sacca: Across the Net people . People don’t want an 18 cents check. We’ve entered a new era of intellectualism 2.0 (joke). It’s predicated on data – there is a lot ore available now. Margin revolution and Freakenomics talk about this. At Google we worship data, and it can teach you so much about humans.
Cohler: Game theory has something to say here. The general lessons apply to the social networking environment.
How do we start up?
Morgan: In 38 years in the VC business Mayfeild has probably never invested in a company we weren’t introduced to by someone else in person.
Hoffman: In real estate it’s location location location. IN the consumer Internet is distribution, distribution, distribution. Nothing else matters.
Identity?
Cohler: Social networks have indexed people the way Google indexes pages. A social network enables more richly evaluate a person. Linked IN is a place where people are pretty much they are who they say they are. That’s all driven bottom up by users and these have potential to protect identity not undermine it.
Sacca: Recalled a site which had fake email addresses. Incentivised people to authenticate their email with one dollar – and it worked.
Google in China?
Sacca: He says Chinese users complained to Google that it’s links were broken. So what do you do? Ignore them or give them a search engine that gives them MP3 links or pictures of Shakira when they want them?
Hoffman: It’s better to be more engaged in society than not engaged.