One of the most influential speakers that spoke in the early days of Startup Grind. Kevin Rose spoke during any interesting points in career, after leaving Digg and during the rise of Oink in the app store. Learn more about Kevin's history, getting exclusive deals, what he looks for ini entrepreneurs, and getting the right attention from VC's.
So without further ado, lets welcome Kevin Rose to the StartupGrind Stage. Here we go
Do you want to hand him that mike please.
00:00:44.80 ROSE: It’s amazing. I had no idea this was happening.
00:00:47.80 QUESTION:He’s not with you?
00:00:50.30 ROSE: He’s not with me!
00:00:50.40 You would have known if he'd been in your car on the way down. Zackerberg has guys like this.
00:00:57.90 QUESTION:Chris is our actually our Community Manager, he is great! He could be better with what he does, maybe give him a little bit of space, if that works for you, it will work for us! Yes, when I said a little bit, maybe a little bit more? Like six or eight, yeh ok. So sometimes, is this your first time attending?
00:01:31.50 ROSE: Is this the normal thing that happens every time?
00:01:34.20 QUESTION:Well, it varies. Tony Conran we definitely need a community guard, community managers, and Andy Siegler not as much. But Chris, sometimes our founders, we have a great crowd, but sometimes they get a little zealous. They can really come after you.
00:01:53.70 Man from audience: I actually have a business plan. For execution and I really would appreciate it
00:01:59.90 Take care of him
00:02:04.20 QUESTION:Lets give it up for Chris! I mean this is ..........Come on you guys, bring him out, give him a seat. Give him a round of applause, he's trying. He’s trying to stand out! So Kevin, we stoked to have you, there’s a lot to talk about. I sent an email yesterday just to the audience to say what did you want to hear from Kevin, and we got dozens and dozens of questions so we'll try to work through them. In the spirit of foundation I wanted to start out and have you tell us a little bit about where you are from, where you grew up and tell us about your family a little bit.
00:02:50.80 ROSE: I grew up in Las Vegas, Nevada, of all places. Not a big fan of Vegas anymore, kind of had a little bit too much of that in my youth, but I went to UNLV for Computer Science, dropped out of school, moved out here in 2000, to San Francisco. During the end of the first dot com boom, working for a handful of start-up, and ended up landing a job with TechTV. Ended up hosting a TV show on TechTV for a little while, for about a year and a half, and then started Digg in late 2004. After that then just started Angel investing and a whole show of other things.
00:03:30.40 QUESTION:Can you tell us a little bit about your family background in terms of your parents. Did your Dad work in tech or did your Mom. What was your background.
00:03:37.90 ROSE: Dad was an accountant, mom very artsy, very much into everything, she had a gourmet gift basket business, and did flower arrangements and things like that. Always trying to get artist,
00:03:53.10 QUESTION:She did it at the house? Or did she have
00:03:55.10 ROSE: Yes she did some of that at the house. She took over our garage at one point, but a family of entrepreneurs. My dad worked for himself, mom the same way, my sister is a big buyer for Zaplos right now, so she handles four of five of their private brands. She has 15 employees, they are a separate company on the Zaplos. I think that I learned a lot from my dad, and watching him. I remember at a very young age, my dad having his own office in the house and thinking, he doesn’t go to work, that’s so cool! He was always at the house, and I was like, that’s so awesome! He's just on his computer all day long and I want to do that, so I eventually just
00:04:38.10 QUESTION:You're sure he was working right?
00:04:40.60 ROSE: There was a little bit of TV watching in there as well, definitely some football games happening.
00:04:44.50 QUESTION: And so you were in Las Vegas, you went to UNLV, studied Computer Science, right? Did you plan to be an engineer or were you, did you just have a fascination with computers, or what was the motivations.
00:04:57.90 ROSE: I started programming when I was probably around 13 of 14 years old, just basic and visual basic, and then some PASCAL. Then I went into school and was doing the same thing, but it was just kind of boring. I was also big into Photoshop and playing around with, creating my own websites back then and coding, I was good but not great. So I would always meet developers that were a lot better than me, but I was really good at taking a product and figuring out, just looking at something and looking at a problem and trying to figure out why it’s not working, and how it could be better. I started to drift a little bit more towards product design and being more of a PM type role.
00:05:47.60 QUESTION:Right out of school? Do you feel like you always had that kind of skill?
00:05:50.80 ROSE: Yes, I think I started when I was at TechTV I had a couple of little projects that I outsourced and had developers write for me and I was very much the person that was co-ordinating the entire thing. Bringing together the illustrators, designers and also working with the developers and kind of marrying those two things, making sure everything would flow right. That there wasn’t anything that was glaringly wrong with the product, that the usability was ok. It was just something that I was always fascinated with, that side of the house.
00:06:22.50 QUESTION:You came out of UNLV and then, like you said, you did some things at TechTV and down in LA, like G4?
00:06:28.20 ROSE: Initially TechTV was San Francisco based, and then we were acquired by ComCast and I was forced to move down to LA for a year. It’s OK there’s lots of traffic, it’s kind of crappy!
00:06:39.20 QUESTION:You've talked about the founding of Digg extensively, so I won’t really go into it too much but you came back up here after that and got Digg going. Can you give us the, again you've told the story a lot but quickly tell us?
00:06:57.40 ROSE: Yes, I started Digg in LA, actually, when I was down there working for G4, and it was really just looking at these existing sites out there. I mean Slashfelt was pretty much the biggest tech news site that was out there at the time and it was just looking at that and seeing all this user generated content. All these users were submitting great content to Slashfelt, but the editor was picking the ones that belonged on the home page. So it was really, AJAX was just starting to come out, where you could, you probably all remember this, when websites actually became alive a little bit. Where you could click a button and something would happen without having to go to another page. It wasn’t quite working yet and so when we first launched Digg, you would click the Digg button and it would take you to another page and say thank you for your Digg. I remember when we got that actually working where it could happen on the page, I was like this is so cool! You can click a button and the vote goes up, and nobody was doing this! There was no Facebook likes or anything like this, and I was really excited about the fact that it was just like it seemed like a fun little game that people could do, and also giving the power back to the people so that they could choose the best stories. So that was really the premise. It was really just building on that idea and we built the prototype in about a month and launched it, threw it out there and wanted to see what would happen if we exposed it to some people.
00:08:16.40 QUESTION:And you boot strapped it(00:08:19.30) Right. You funded it yourself.
00:08:21.00 ROSE: Yes, I basically had about four or five thousand dollars in the bank at the time and I spent all that savings and my girlfriend at the time was really pissed because we were supposed to be saving for a down payment on a house, or something like that. She was not very happy.
00:08:34.50 QUESTION:How did that work out?
00:08:36.50 ROSE: We ended up breaking up. We are still very good friends today.
00:08:40.50 QUESTION:It worked out though, it’s cool.
00:08:41.60 ROSE: It worked out. It’s all kind of one of those things where, boots strapping is the best way. I hate to go out and raise money unless you can prove out an idea first. It’s so cheap to do new projects nowadays.
00:08:59.10 QUESTION:A lot of the start-ups that you see, that you look at, are they doing that or are they bringing you mock-ups or bring you live code or are they bringing you something in the outsource, or where is it coming to you generally that the start-up that ended up getting funding.
00:09:15.10 ROSE: I think it is fairly flushed out now, I think that there is actually working prototypes. The ideas are pretty baked. Often there’s been times, I had a friend that introduced me to an investor and I’ve raised twenty five grand and I’m looking to raise a half million. This is what I've done with that twenty five thousand right. So I was able to quit my job and spent the last three months building this, and it lets me into other people and that’s like a typical setup that I would say.
00:09:44.60 QUESTION:We going to get to Angel Invest, but I want to talk to you about Diggnation which you just recently after six years, almost seven years shut down. This was a question that we got, how important do you think Diggnation has been for your career. How important was it to Digg and how important was it for you personally.
00:10:05.50 ROSE: Digg was already starting to take off before we actually started to do the podcast Diggnation, so it was growing at a decent clip. I think that Diggnation was a great outlet to talk to the community so we had, often times we would talk about the most popular stories on Digg. The users that were submitting those stories, would hear their name on the podcast and so they would know that the podcast had a lot of people watching and listening to it so, it was like an extra little incentive for them to want to submit great content. Early on it definitely helped out. It’s been great, it’s been a great vehicle to announce new projects to talk about. All of the crazy tech stuff that’s going on. I mean that a little bit of my DNA has always been in media and doing TV related stuff and so being able to get back to that and sit on the couch and drink beer with a co-host. It’s always felt very natural and organic and always felt like I’d be doing that regardless of whether we had the camera turned on.
00:11:06.10 QUESTION:Like you’d have a host at your house or what do you mean?
00:11:07.90 ROSE: I mean just b-assing with a friend. We all do it, we all talk about gadgets and what’s going on and then it’s just like, you know,
00:11:15.80 QUESTION:Yeh, that you just filmed it,
00:11:16.60 ROSE: The fact that we get paid to do that is pretty amazing.
00:11:17.50 QUESTION:It’s awesome. Yes, and you met amazing people right? You’ve had all sorts of guests on your show, and access to those people. When Digg launched was it like Facebook where Zuckerburg says, it’s twenty two thousand hit’s on the first night. Was it one of those overnight successes, something that clearly sparked something or was it slow.
00:11:39.20 ROSE: Slow. Digg has never been a viral site in any way. It’s always been month over month slow growth, and it was slow. We were pegged a hundred new registered users per day for a pretty long time. I remember we'd get into one hundred fifty, two hundred registered users a day and then all of a sudden it was growing from there. I dont know, at it’s peak we were doing, I dont even really know what we were doing, maybe twenty or thirty thousand a day or something like that. It was watching that climb.
00:12:08.00 QUESTION: And did it climb, was it always climbing? Was it the type of thing, like a lot of start-ups, that you had to tweak along the way. Did it dip down or was it consistent growth month over month over month. Kind of like Borsing or Pinterest at this point.
00:12:21.40 ROSE: I think it was consistent month over month, definitely consistent month over month. There are certain months that are a little bit slow, just due to seasonality and depending on whether people are going to school, or what’s going on, how much time they are spending at their computer. I think that it was always like that. It started to slow down initially about six months before the last Digg V4 that we launched. It just was people were starting to flock to other sites, they were starting to go to Twitter and Facebook, and we were seeing more of our traffic just erode through a handful of different things. By that point Digg was five years old and these things go in cycles. At first I was really scratching my head and trying to figure out what can we do to stay relevant and there was a lot of people, we made some bad decisions based upon, we need to be more like Twitter, we need to be more like Facebook to try and get these users to stick around. Part of it was like you need to try and stay ahead, and stay alive and win but at the same time, I realise that sometimes there’s not much you can do to avoid, different ways of communication. I feel that there was always these questions over the years, people would say are you worried about this site, are you worried about that site. I would look at the site and it would be exactly like a Digg clone. We saw a thousand different Digg clones, like ten thousand of them. We had one that was a porn site, and more like the penis got dug, the larger it would become. I kid you not! We saw these clones, it was weird.
00:14:02.00 QUESTION:Did you make that? There’s the founder here right? That was a Digg with a triple D! That was another one.
00:14:03.70 ROSE: Yes, there was all types of stuff. But there was never those that really frightened me. It was really someone taking a different angle. I think that when news starting breaking on Twitter, it was the first time when I was like, damm, I’m so glad I invested in Twitter. No I’m just kidding! I definitely looked at that and was like, well that’s going to be hard to beat. Because they were just so light weight and getting so much more data than us. That was tough.
00:14:38.80 QUESTION:When you walked away from Digg, how did you feel. I mean it was your baby, you had boot strapped it, you had put your own money into it from day one, and you really were, I mean to everyone here observing it, you were Digg. Your face was so tied to the company that, how was that walking away from that and giving that away. I know you were less involved well before you actually left, but you were CEO and were still active with product. How did you feel. How difficult was it.
00:15:16.40 ROSE: You know it was a rollercoaster the entire time. There were so many user revolts on the site. People will remember HG DVD key and all the different, where we have hundreds and thousands users, revolting against us and taking over our site and putting crazy things on the front page. It’s like every time that would happen, it’s like I would get another ulcer or something. It was awesome. I feel like after five years of that it just took it’s toll on me like I wasn’t really passionate about the product, the way I once was. So, I feel like I got a little burnt out and needed to re settle a little bit. So I focused on doing more Angel Investing for a while, until I felt like I could take on and start something new again.
00:16:05.40 QUESTION:Is that advice you have for founders? How does a founder figure out when he or she needs to walk away from their baby. Whether it’s been successful or not, how does one come to that conclusion, come to that decision.
00:16:20.60 ROSE: That’s a good question. I was reading that Steve Jobbs book and I think that one thing really struck a chord with me. He talked about how, if you look yourself in the mirror, every single day, and say I hate this and you're not really enjoying doing your job. If you do that for too many days in a row then you need to change something. I tried to do that, I didn’t enjoy my job but I’d switch my focus a little bit in the company. Then I’d just realise I need to step away from this a little bit, so I can get a little bit of perspective and then help out from a board level. So that’s what I did.
00:16:52.30 QUESTION:The thing that I personally always appreciate about what you did, even with Digg V4, was that there was this group of users that you were talking about, that would give you ulcers. Sometimes it was great what they did, but other times even as a user it was like was what the freak is this? It was just this group, this hard-core group of people these super users that would sometimes kind of take over, and it would seem like what you guys tried to do was, really take a fresh stab at it and say, hey, we're going to do what we think is right, and our users may not like it but, you know, we're just going to go for it.
00:17:24.10 ROSE: We really kind of had to. We had to make some type of change because, it’s funny, if you take a look at Digg, at that point in time, it was losing traffic, it was starting to decline a little bit. People were going to other sites, so we had to roll the dice and try some big bold things. We could have been, done that a little more of a stage debater, where we would let people in and try it out. Let the community give us feedback and definitely we set it up where, you were swopped out the back end and at the same time we swopped out the front end. Which I think was a really bad move because essentially what happened is we made these changes to the new platforming consandra and everything else off of PHP and then we got all this harsh, really bad feedback on some of the features. Some of the features were ok, and then we wanted to make some changes but we couldn’t because our back end was falling over. So we had this broken site, broken site and this little wagon icon, that I still dream about at night, and it was just by that point by the time that we actually reversed some of these features and bring some of the functuality back on line it was
00:18:33.20 QUESTION:You had to build it all from scratch
00:18:33.40 ROSE: We over start ourselves, you know and the users were just like, clearly Digg doesn’t care about us, it’s been two and a half weeks, and we're like putting our fires and it was just a really bad move.
00:18:45.00QUESTION: I really want to talk about Milk a lot. The first thing I want to talk to you about it at what point, you are doing this Angel Investing, what point did you say, you know I think I want to start a new company. Was it around a specific idea or was it just, hey, I want to get this going again. Where did it spark from?
00:19:04.20 ROSE: I think that part of the problem that I had, I’ve always had, maybe it’s 80HG or something. but I’ve always had a hard time, I’ve always had too many ideas running through my brain. A lot of them really suck, and we've built some of them and never launched them. Jeff, one of my co-founders of Milk is back there and we built one actually at Milk, and we never launched it, but, I'll tell you about it if you want to hear about it?
00:19:28.80 QUESTION:Go ahead, we'd love to hear about it! Sounds awesome.
00:19:29.20 ROSE: All right. So we built this extension, what were we calling it? Pica, so we built this Chrome extension called Pica and essentially what it would do is that would install this bar at the bottom of your screen, once you had installed it in Chrome, and as you are browsing around the web, you could essentially say that I’m ok with sharing with my friends that I’m here. So any time I’m on TechCrunch and any of these articles I’m OK with the domain of TechCrunch, right? So there would be this little countdown clock, and it would count down from ten down to zero and if you didn’t stay stop it would automatically share out where you were on the web. So you're sitting there installed with a bunch of friends and you see your friends icon, and they would be checking their GMail, like doing all these random things, and then you would get these
00:20:15.60 QUESTION:It could take a turn for the worse!
00:20:15.60 ROSE: It can!
00:20:17.20 QUESTION:With Jeff’s friends, that’s all I’ll say right!
00:20:18.50 ROSE: You would get these three bombs, like a little tiny bomb, and like an explosion, per twenty four hours and a bomb essentially forces your friends to a web page. So if you found something really cool you could drop a bomb and it would open a new tab in all your friends and all your friends would be on this same page and then it would make this explosion sound, like KEFOOOIRR, you just got bombed! It was a horrible surprise.
00:20:38.00 QUESTION:It’s a dud bomb, that’s what it is.
00:20:40.80 ROSE: It was fun to develop but that was
00:20:44.60 QUESTION:I’m in for a hundred bucks, two hundred bucks.
00:20:46.10 ROSE: We got together and we started thinking about when then you could have like a loyalty reward programmes round the stuff, I spend enough time on the New York Times and they can give me like a free subscription, we were thinking about all these different things we could do with it, and it ended up being a bad idea. We killed it off but we realised that we really like rapidly prototyping out ideas. Why not try out a bunch of different stuff. Daniel Burka, who is my old Creative Director, at Digg, he had since left and joined Stuart Butterfield from Flicker to work on Glitch. He was there for like a year, realised he didn’t really like to do games that much and then interviewing at Facebook and a few other companies, and he was like, I’m considering a start up again. I’m like well if you’re considering a start-up then let’s get together and the three of us can go and launch something, and just have a little Apps company where we churn out two or three ideas a year and some will fail, and some might be cool and we can see what happens.
00:21:40.60 QUESTION:Then you guys, this was your first thing that you killed immediately,
00:21:47.70 ROSE: Yes, we didn’t even launch it.
00:21:47.70 QUESTION:Then where did Oink come from? Where did the idea for Oink come from?
00:21:52.40 ROSE: Oink, I was sitting in a restaurant and I was having an amazing burger, and I remember thinking that it’s a shame that I can’t tell anyone about this burger. Yeh, I can instagramme it, but that kind of goes out and then just dies away down the path. I want something that, at this location, when you add a place, you can say what is the best thing here. What have my friends tried here before and, then if there’s anyone I look up to, like a food critic or celebrity or something, what have they had here, right? Then I was thinking that this burger is awesome. I know it’s the best burger but what if we take this item and allow it to be compared against similar items, so how does this rank against all the burgers in San Francisco. All the burgers within five miles. So we started out with a pretty rough prototype and then we started taking pictures of all kinds of random stuff and we invited twenty or thirty of our friends. One of our friends went to a theme park and all of a sudden was rating his favourite roller coaster, and we were like, wow that a weird use case we haven’t seen before. Then we saw another person was rating their hygienist, taking pictures of them. I was like well that’s strange, and that was under the tag of like dentists, or whatever, and then there was a ranking of dentists. We were like well this could be pretty cool if we allow people to, part of the problem I always had with Yelp is you go on there and look at the star rating and kind of judge it on what you see in the stars, but to get at the meat of what you really want like buried in the reviews. They were really long, sometimes multi page reviews, and I wanted a really light weight more consumer, mobile friendly way to do that. So we got the domain Oink and decided to launch that.
00:23:27.90 QUESTION:Did you, I mean with Yelp, did you feel like it feels like it follows this trend of just diving deeper into the data, how deep can we go with the data, and that feels like the next simple evolution with Yelp. They are so general, yes they have a lot of places but you guys are diving deep into very specifics within the products, with those services.
00:23:48.20 ROSE: I dont know if it’s going to work, it’s still very early days, but we have had a lot of people write back and say I discovered something really cool because of your app. There’s certain pieces of the app that a lot of people are using. There were like a lot of people were adding to dos when they see really cool stuff because they want to be notified when they are around that place later. So we are kind of redesigning the App now on this next version that we're going to launch in a couple of months, that is a lot more focused on exactly what people are doing with the app, versus what we thought they were going to do when we launched it.
00:24:18.40 QUESTION:Your philosophy at Milk and Oink, is it everyone, how big is the team and is everyone focused specifically on this. Do you have other people that are building prototypes for other projects? How is the structure of the company?
00:24:31.70 ROSE: There is a couple of us now that are starting to at least white board, and kind of create flow charts of how some other projects we might want to work on. So Daniel is tidying up all the last bit’s of V2, he’s our head designer, and then I have gone off with another guy and we are working on some ideas for different product stuff. We have pulled the team together for all hands meeting like once a week. We give updates on what we are thinking and try and take in their feedback if they have any ideas for cool projects that we might want to tackle. The team is seven people total.
00:25:02.80 QUESTION:This was a question that we got from the audience. It feels like there is definitely some Digg characteristics in there right, of voting things up and voting things down a little bit, like you said it’s everywhere now. It likes, it’s coral, that mechanic is pretty ubiquous. Have you felt like this is any sort of iteration on that, of the voting mechanic. Have you felt like those two things are tied together. Is that something that you think about. Do you think about what is the next generation forward?
00:25:29.60 ROSE: I really dont. I dont think it is. I feel like if anything, we're all getting a little bit like, a little fatigued on using this stuff. I’m a little bit like, we have Four Square and we have Path and we have Instagramme and we have all these things competing for our time. I dont know if it’s just me, or how many people are just getting a little tired of doing all that stuff? Are there some other people? I’m starting to see more and more people be like I’m not checking in as much, I’m not doing this as much, and I just feel like, I dont know if just voting again on top of something else is the next step. If anything it might be to take that away.
00:26:04.50 QUESTION:I saw our Community Manager in the back, Chris, like you better not get tired of that stuff. That’s your job. You'd better be tweeting that all day long man. Have you guys cornered up every, all the final animal sound domains? Are they gone now? What have you got?
00:26:21.90 ROSE: All I have is Oink.
00:26:23.80 QUESTION:I looked up a few, like did you get HISS.
00:26:26.40 ROSE: I did not get HISS.
00:26:26.40 QUESTION:Gibber
00:26:28.10 ROSE: Hiss is not a bad one, I like Hiss.
00:26:29.70 QUESTION:Or groan, that was another one, I dont remember exactly which animal it was but, is that an animal noise? Just trust me, it’s in the dictionary. You'll keep iterating on Oink and hopefully this next version will increase engagement and then what? You'll just keep iterating on it? Or you'll just see and maybe move on to something else or what do you see as your strategy.
00:26:53.40 ROSE: Yes, we're looking for something to kind of double down on. We do want to focus on something and put all the team behind it. But we are also still very early, we're a young company. We are just experimenting to see what else if potentially out there? We will launch this next version, let in run for a few months and then just evaluate it from there. Probably if we see some decent traction we will launch an Android version. I had to say that because I know there are some Android people here.
00:27:17.40 QUESTION:What is the ratio? IPhone, raise your hands. Android? Windows? There’s always a Windows guy. There’s always that guy! And that guy’s name is? No, I’m just kidding you. What about Web OS, any Web OS? We usually maybe get just half a Web OS guy here. So let’s talk about Angel Invest. You have invested in Square, and Twitter, Foursquare, and AboutMe and you've been an advisor for, what, when you see these companies, and at the moment, just to kind of clarify it, at the moment you’re not really actively investing. You still meet with some entrepreneurs but, not like before, before you started Milk, you were really actively investing, or are you?
00:28:10.00 ROSE: Not really, not as much as I once was. I had a lot more free time back then, so I would take more meetings. But I think that now, there’s a community of people that you get to know that are also Angel Investors and every once in a while they will have a deal, or I will see something cool and send it to them or they will see something cool and send it to me. So it happens, every few months but it’s not, I mean I'm probably doing four or five things a year maybe.
00:28:35.70 QUESTION:What are the criteria, everyone has standard criteria that they look for. What are the things that you immediately look for when you meet with an entrepreneur or a team?
00:28:45.80 ROSE: Well, I like ideas that aren’t me to ideas. That isn’t just an improvement on something or IMV or B and B for this. New fresh ideas, brilliant entrepreneurs, I dont know if you have ever met Caleb from You Bongo, do you know him at all? You Bongo is one of those services that, yes Group Messaging. Not many people have heard of them. They launched and they
00:29:13.60 QUESTION:They were acquired weren’t they?
00:29:13.60 ROSE: No not yet. He is one of those guys that I sat down with and as an entrepreneur, I wasn’t totally sold on the idea. I was like this is a cool concept but he was just so brilliant, I thought this guy is going to be something huge eventually. I kind of went in, all in on him, just because I know he's going to kill it someday. Basically products that I can get behind. Part of the value that I bring as an Investor is exposing some of the people that follow my work to cool new things. I try and get behind projects that I’m like well, not only what I use but I know other people who would, and I can help that entrepreneur as well. Stuff that also, products that hopefully I can bring some product experience to as well. Usability stuff, mobile whatever it may be.
00:30:04.50 QUESTION:You are talking basically about helping with marketing or distribution, tweaking about using it and getting that group to use it. What type of financial investments do you usually make. Does it vary completely, is it in the tens of thousands, hundreds of thousands. Where do you typically invest?
00:30:24.80 ROSE: I dont have a fund or anything like that. Just me personally. Typical Angel deals are anywhere from twenty five to seventy five K per investment. I think that if there is later stage stuff, you know if you are investing in Facebook now, not now but Facebook two years ago, you’re not going to put twenty five thousand in. You would definitely put a lot more once the companies a little more baked. It really varies.
00:30:56.40 QUESTION:I think that people have this conception, it may or not be true. I'd like for you to tell us. That you could pretty much get in to any deal that you wanted to get into.
00:31:03.10 ROSE: That’s not true.
00:31:05.10 QUESTION:Is that not true?
00:31:05.70 ROSE: It’s not true. A great example is.
00:31:09.10 QUESTION:Who would believe that? Raise your hands, who would think Kevin Rose could get into any deal, look no one is raising their hands, cos you just said that! You sold me out! Not even the loyal guys. Thanks Alex!
I won’t forget that.
00:31:20.10 ROSE: Square was a great example of that. Jack Dorcy, I’ve hung out with him a handful of times. Just in passing at different parties like that, we've hung out and had different conversations. I really dont know him that well, better now since I’ve made the investment, but I hit him up and heard about Square. It was going around the valley and I heard know Jacks working on so and so, I dont know what this is. I didn’t have the chance to see the deal. Then I heard that he was fully booked, I mean that everyone wanted in on the idea once they found out what this was. I found out what it was and said, oh that’s cool. That’s really cool, that’s going to be huge.
00:31:59.00 QUESTION:We used it tonight.
00:32:00.30 ROSE: Yes I saw that, but it was awesome. You have an old one too, it’s like really junky. You got to get a new one.
00:32:05.80 QUESTION:Like most of our stuff!
00:32:07.30 ROSE: So I saw that deal and thought that this is really awesome. I hit Jack about it, I sent him an email and said like can I get in, come on, like what have you got, and he’s just like I can’t let you in, I’m sorry, it’s oversubscribed blah blah. So I went out and was like, you know what? I’m going to make an awesome video. I went and shot a HD video of this square for the first time, and was like this is how it works. This is why it’s so cool, cos I had a little early pre-release version of it, and the video ended up getting a couple of hundred thousand views. I sent it to him,
00:32:34.90 QUESTION:It was professionally done and everything?
00:32:34.90 ROSE: Totally, I had a whole HD crew come out and it was awesome. So after I launched that he was look you can drive some traffic and some usage. OK I'll make a little room for you, and that’s how I got into.
00:32:47.40 QUESTION:Then you sent him the bill for the video.
00:32:48.40 ROSE: Exactly!
00:32:50.40 QUESTION:That’s a great example of you networking your way into it. I think for founders it’s, there’s this sense sometimes of, gosh if this guy would just kind of king me but I'd be there, but even for you, you’re hustling. You are trying to get deals and do you see founders doing similar things to catch your eye? You know they will go out and do something or target something that you that’s highly produced, they put a lot of time and energy into, really makes a difference.
00:33:22.00 ROSE: Yes, I've seen a couple of strategies that work really well. In fact a couple of people used it are here tonight. Where they come up to you, and it’s not just like, hey I have this site, and here’s my business card. It’s more like, here’s my demo. Check this out. Heres my game. Play with it. Heres my product and it’s like, that’s cool, because then I can really check it out. You can imagine that a lot of these investors, you get so, just a lot of crap! It’s true, there’s a lot of people out there creating stuff, some people have great awesome stuff, and there’s some people that dont, it’s their first time, there’s a lot of garbage. You have to wade through all this stuff. If you have like an hour or two hours a day to go this, and figure out where you might want to return an email, if it’s just a pitch, I get a lot of like one or two three paragraphs pitches that’s like, yes, I’m not a developer and I dont have this but if you can just call me. I can’t tell you the idea, call me.
00:34:15.90 QUESTION: I believe I can fly! I believe I can touch the sky.
00:34:18.90 ROSE: You got to have something. Like go out find, if you are not a coder, that’s fine, I wasn’t either, but you got to find a technical co-founder and get a prototype made. If you are really that passionate about it and you really want to win, you will go to that level. You will create a demo. If there's a link that isn’t like an IP address and I think I’m going to get a virus from, then I’ll check out the demo. It’s there a video, that’s awesome too, I’ll check out the video. It’s like that’s a great way to get in front of these people. I think that if you see a little YouTube video, or a Vime a Video or whatever, nine times out of ten, the investor will click through it. Just watch a one minute pitch of something.
00:34:56.70 QUESTION: Have you ever invested in a company from a completely cold email. Just out of the blue? No referral or anything like that.
00:35:08.60 ROSE: You mean that they emailed in to me that I found? That’s a good question. I’m sure it’s happened. I would have to look through the list of companies.
00:35:19.30 QUESTION:We had Jeff Clavey here last month, or a few months ago, he said he hadn’t. He said he had never invested in a company from a cold email. They always came through introductions. It’s part of the filtering process. It feels like, sometimes as an entrepreneur, you just get into this mode like, you’re so desperate sometimes, that I just got to make this happen, and you know we dont go through the right channels and they are in place for a good reason. Sometimes, sometimes they’re not, but a lot of times they are. They filter out the crap.
00:35:46.40 ROSE: and I got to say that a really good strategy for getting some of these brilliant product minds is to kind of work your way into them through someone else you know. I’ve past on a lot of recommendations to people that normally a lot of people wouldn’t have access to. Like you are not going to be able to track down Jack Darcey, he’s too busy running around doing a thousand different things right? But if you can somehow get to someone that he knows and trusts, that will pass that deal on to him at least for a yes or no. That’s how you get in. It’s not by necessarily approaching them directly.
00:36:23.70 QUESTION:Is there anyone that you would like to meet or network with but you are not able to? Is there anyone like, or you have tried to reach out to but have been unable to meet.
00:36:34.70 ROSE: That’s a good, a great question.
00:36:38.30 QUESTION:I didn’t write it!
00:36:38.30 ROSE: Yes, you know the Venmo guys I would like to meet. I haven’t met them yet. I’ve been using that app a lot. I dont know if you guys have used it, but it’s like free PayPal. It’s just so easy to just send money to friends when you are doing
00:36:50.10 QUESTION:They’re like in the mid-west somewhere right?
00:36:51.20 ROSE: I dont know where they are at. I haven’t even looked into it yet, but that’s an app vie been using a lot that I like. I’d like to meet them a lot.
00:36:57.30 IOWA.
00:36:59.20 ROSE: I dont know how they are going to make money but I’m using it now, it’s cool.
00:37:02.90QUESTION: If you were a first time founder, you walked into this room, you know you’ve packed up your car, and this happens. We’ve people that may be here tonight that have done this, pack up your car, came over to Silicon Valley, first time founder. What’s the first thing you would do? What would you do.
00:37:20.30 ROSE: Stuff like this. Events, parties. Dont be afraid to crash a party but dont be obnoxious about it. Just kind of meet some people, network. I’ve become friends with a lot of people randomly that just became friends of friends and you’ll just end up hanging out. You know, I’m new to town. I just met a guy we had here a minute ago, right there, he came up and was like, I want to do beady stuff, I like to hustle, I like to do this, I’m like this. You should meet my beady guy Chris. They’re going to go have coffee. They will meet friends, and that kind of stuff is just a great way to get involved and connected.
00:38:01.80 QUESTION:If you were a first time entrepreneur would you apply for incubators like Y Combinator or Tex Stars. Would you do that, or would you do like…….
00:38:11.60 ROSE: Yes I think so, I’ve gone and given a couple of talks there and sat in on a few of the different things and I think that there’s a lot of structure that you get, I remember the first time that I went to try and raise money. I had brought on Jay at that time, to be the CEO at Digg, I didn’t know the first thing about anything when I came to the difference between the priced round and convertible notes and the way to structure debt and all these different things that I just needed a crash course on. I feel that you may have the tax side down, but you probably missing as a first time entrepreneur, there’s one of the four main categories, that as a CEO you need to be proficient in. Whether it’s marketing, the tax side, the beady side or whatever it may be. Like there’s one of those that it’s just going to help with. It will fill in those gaps. That said, if you double majored in CS/Business Degree maybe not.
00:39:12.40 QUESTION:We talked about this a little bit, but do you spend, would you boot strap it again? Would you fundraise? What would be the time ratio that you would spend building a product versus trying to raise money to fund building a product?
00:39:29.40 ROSE: It really depends on how capital intense the product is. I mean if you are building data centres you are going to raise a ton of money. If you are doing something that is, a buddy of mine has an App on the app store that’s in the top 5, consistently in the top 5 of paid Apps. It’s like 99 cents. I won’t tell you the App because he will kill me but he makes like thirty grand a day just chilling. There’s no server back end, he just hangs out and he doesn’t need to raise money, it’s like him and a couple of other friends.
00:40:02.40 QUESTION:What was his name again?
00:40:03.50 ROSE: Yes that’s right! But that kind of thing you dont really have to go out and raise funds, That said also if you do need to raise money, the longer you wait just the better it’s going to be for you because your evaluation just keeps going up and up and up. You buoy less of your company. So if you do have the means to boot strap a little bit longer, and you think you are on to something, then I'd hold off for as long as possible.
00:40:29.00 QUESTION:Let’s take a couple of questions from the audience. You can also submit a question on the IOS App if you want, if you have an Ipad or IPhone. Yes go ahead, and I’ll repeat it out after.
00:40:42.00 QUESTION:What were the four proficiencies for the CEO.
00:40:42.70 ROSE: I just made that up. I dont even know if there are. I mean I just think that there are. Looking at a handful of CEO's I like to see CEO's with some tech background. A little bit CS in there somewhere. Just because they have a really hard time. I’ve met some CEO's that are all design centred. It’s awesome and they are really good at building beautiful products but they dont know how to hire developers. They just hire really crappy engineers. That’s right. So having someone that can at least vet that or having that strength is a good quality. Someone that understands Media and Marketing. And has hopefully had some kind of management experience in the past. Like dealing with just general issues that come up with having a team. Understanding that’s it ok to let someone go if they are not a good fit rather than just keep them around for ever. I dont know if there’s four, but those are the ones that I look for.
00:41:41.10 QUESTION:Anyone else. What do you think of K12 education in America?
00:41:51.40 ROSE: Like K through 12?
00:41:54.30 QUESTION: Can you be more specific? Do you fundamentally believe the education system is broken.
00:42:01.10 ROSE: It was really crappy for me. I actually, Tony Shay from Zapose is building a new school system in Vegas. He’s just now started talking about it. It’s fascinating. It’s awesome. I dont know how much of it he’s disclosed yet so I dont want to say a ton.
00:42:18.50 QUESTION:He just announced everything yesterday so, it’s like, schools and Vegas. It’s really fascinating.
00:42:26.70 ROSE: It’s really cool like one of the issues that I had growing up was that I wasn’t ready for certain classes when they were forced at me. Like it wasn’t until my later years that I really started caring about Math. Once I understood that I needed some of it for development. Like when I was out of high school. The idea of, I dont even really know what I should say. The idea of being able to go at your own pace, and pick classes in different things. If I dont want to take English this year I dont have to take English this year. Things like that are more structured towards the student. I like that idea. There is a handful of different, I went to Montessori when I was growing up. It was a lot like that which was really cool. But there are a handful of schools systems that are like that. I won’t say private but.
00:43:17.60 QUESTION:Right here then we will come back, or the other way around.
00:43:38.20 ROSE: Probably Tim Ferris. Tim Ferris is going to be a great Angel if you can get him because he straddles both worlds and he’s awesome. So if you can get him as a spokesperson for your product then that’s just a home run because he has a crazy following. But I have seen a handful of different food related start-ups that have had difficulty raising money from traditional technology VC's. Even though there is a little hint of tech there so I would probably go with the VC's that are more catered toward the food and beverage industry.
00:44:12.50 QUESTION:Can I just ask you a question on that in terms of the following of these certain kind of people. Have you felt like Twitter, your impact, your 1.3 or 4 million followers that you have, do you feel that the impact of that has diminished over time or has in increased over time. Do you think you get more clicks, more noise coming at you now then you did twelve months ago, or eighteen months ago when you may have had less followers.
00:44:40.40 ROSE: I think that for me it’s really just seeing the shift, I dont know if it’s really a shift or a coming on line of other networks like Google Plus and Facebook, has been fascinating. The level of engagement and clicks that I see at Facebook just blows everything else out of the water. Just because I think users check in on a more frequent basis, you know they are right in front of their computer and they see the story come down and so more people actually happen to see the story. That’s been awesome. It’s been about the same. It’s kind of flat. Twitter is weird. Even though you have a lot of followers, it only represents five thousand clicks, seven thousand clicks. Ten thousand if it’s really cool. Depending on your title.
00:45:32.00 QUESTION:Do we have any other questions. Right here.
00:45:37.40 ROSE: Good tea as a replacement for black coffee! Well the fully oxidised black teas are going to give you the most caffeine punch, so I would just start exploring the black teas like the Indian teas or the Sri Lankan teas and things like that. That’s probably the best yet. Actually pure teas are good too but they dont have as much caffeine but they have some very coffee like characteristics and they are very woodsy and earthy, and awesome. The Pure teas from the Province of China also.
00:46:20.00 ROSE: No not really. Nothings really excited me. Like I haven’t opened an App in a while and gotten really excited about it. I was playing around with HeyTel a while ago. About three or four months ago. It’s like the walkie talkie app with your IPhone and it was kind of fun. But it was like a big competitor, what’s the other one called. Vox or Voxlee or something. Those are fun but often times I worry that, I feel that when there wasn’t as much competition for like our eyeballs and our time in general, we would stick with Apps just a little bit longer and I think that now you check something out and you just bounce out after a couple of weeks. There’s been, what was it, Turntable FM. I was all about that for like a month then all of a sudden I dont even check it anymore. I’m wondering how many of these little spikes we going to start seeing of people quickly moving on. Like our ADD has gotten worse with all these new Apps. I started playing Amazing Breaker, now I’m on to Where’s my water.
00:47:27.80 QUESTION:Do you think it’s work with mobile than it is with web.
00:47:30.10 ROSE: Absolutely. I’m just trying to kill ten minutes when I get tired of that App I’m clearing it out and on to the next thing.
00:47:37.10 QUESTION:OK. Right here. Do you feel investing in enterprise infrastructure Apps is more interesting than Social Apps.
00:47:55.50 ROSE: I think that it’s definitely a space that has less activity in, in as far as Angels and that world. It’s not a space that I really understand, so I tend to not really do anything there. That said, if there was another Mint type App that would be consumer but more finance, or something like that then I might be interested.
00:48:22.30 Tom.
00:48:38.10 ROSE: So the question is what are we asking ourselves internally when we are thinking about creating a new App. It’s a good question. There is a couple of different ways that we come up with ideas for applications and things that we want to tackle. We have some really awesome design talent. I think that it’s pretty easy nowadays to just go out and build really beautiful applications that are something like, you take the calculator and you make it awesome, or you build, Tweepod does a really good job of that. Who’s the company that does Tweepod, do you know what I’m talking about? Anyway they put out a suite of different Apps and they are all very beautiful and they are all great. I think that’s easy to go after. It’s hard to find the bigger kind of disruptive Apps, and so when we are coming up with ideas, we always ask ourselves what kind of new market is this creating. Then also what part of my day and what problem is it solving and so I’ve gone as far taking an entire catalogue my day from the moment I open my eyes, and writing down every single thing I do. Then asking myself is there something here. So when I wake up, I take the covers off me. How are the covers over me, am I too warm or am I too hot, or is there anything there. Like all the way to brushing my teeth, turning on the hot water to like is the temperature right in the house. No that’s already been taken by those cool guys that made that thermometer thing. You have walk yourself through the entire day and think about are there any pain points there. I was really impressed by Warby Parker with the glasses maker. Do you know who I’m talking about, they make these awesome designer glasses for like ninety nine bucks for the frames. Ninety five? I came up with an awesome start up that donates belts to gangsters that like snag their pants, you like buy a belt. I thought that would be a good Saturday Night Live skit. Where they are doing a belt drop and all these gangsters run up and grab the belts. Anyway. That’s bad! The cool thing about the eye glass company is that they went out and said ok, you can look at designer glasses that are four hundred dollars and you dont know they are designer glasses but they look cool. So often times they have little markers on the side, but it’s very different from designer apparel or purses or shoes. So they said we can make something that looks exactly like designer glasses at a fraction of the price. They were able to just kill it. They created a great online experience, where you can map your face to the glasses and all that stuff. I’ve been exploring all that stuff both externally, you know like actual physical goods, tied to technology. Like the Cherry guys did with dropping your pin wherever you’re at and all a sudden your cars washed. To what Oover has done, I think that there’s a lot of unchartered territory in the real world. No one has really nailed, Task Rabbit is doing a pretty good job, Coffee empowers and some of these others. Someone is going to win that space of me wanting Ben and Gerry’s at two am. That’s one way, the other way we look at industries so that we made a big long list of probably about a hundred different industries and went down them one by one and talked about, are there any pain points here. Is there anyone that is slow to adopt a new technology and it’s like an industry that hasn’t been touched. To just random, like dumb middle of the night, in the shower kind of ideas. Those ideas are also kind of fun to explore.
00:52:22.70QUESTION: Do you think a team is more likely to pivot into a great idea or to come up with the great idea right from the beginning.
00:52:30.30 ROSE: That’s a great question. I’ve seen it go both ways. It really depends on the team.
00:52:39.50 QUESTION:Ok let’s take one more question. Over there. Can you do sales without being pushy?
00:53:02.80 ROSE: What is it about the pushyness side that you’re
00:53:14.50 ROSE: Yes I’ve seen the guys that do base camp and a handful of different collaborations suites that they do, 37 signals, that group, I think they have done a really good job of just building high quality tools and using their customer bases as the word of mouth of spreading their products out. They have been extremely successful they have a great book out too. That Jason Free put out Rework, that you should check out if you haven’t already checked it out. It’s awesome. There’s a lot about the Lean Start-up than just how he got started. I think that’s been the one example of a business play that I’ve seen that isn’t in your face but it’s all about the high quality product that I’ve seen succeed.
00:53:56.70 Can we give Kevin a big round of applause and thanks for coming.
00:54:02.80 So a couple of things and then, first of all I want to thank Google Places and is Ashley here, right here at the back. Google Places has bought dinner for us which we are so grateful for and, let’s give her a big round of applause. Use this product for the love that’s all good in this world please use this product. How did we do.
00:54:33.40 ASHLEY: He’s all right. It’s for a tablet so somebody here is going to be a winner.
00:54:40.80 Let me see
00:54:40.80 ASHLEY I have two in case the first ones not here. Kate Monks. No. Brent Dadey.
00:54:58.50 Brent is the game manager of the new Lauran Croft game for Chrystal Dynamics. Cool guy.
Thanks you so much and let me just introduce a couple more people and then we will finish this. A couple of people at the back that I want you to meet. Ashley where are you going to be standing. Are you going to be there at the table on the left. Go up and please meet Ashley, meet her and give her a hug if she’s comfortable with that. I dont know. We’ve never met in person so ... I wanted to introduce you to a couple of guys. First is, Start-up Monthly Yuri. Yuri has been doing this for about a year and he has got all sorts of awesome programmes for start-ups and you should go meet him and meet his team. I’m not going to let you speak. Sorry. We have to move. But go meet Yuri if you haven’t already. He’s awesome, he’s a hustler. You totally got to meet him and join his programme. Brian Reeven where are you.
Brian Reeven, Brains done all our commercial real estate. He’s like an amazing guy. These people are just friends of ours, people we’ve used who are really great. His commercial real estate in the last month is for companies over a hundred million in funding. He’s just really great at what he does. Go meet Brian. These guys here Tom and James have flown in from LA. Again guys that I’ve worked with and are recruiting managers and they focus on mobile and technology and thy are amazing. If you are looking for those types of skills technical skills developers mobile developers these guys are the absolute best. The were joking about this. Toms already smiling but they are the only sleazy and non, no not sleazy bad call, Dang it. Least you got the free peanuts out of the flight right. They are like the best hiring guys I’ve ever met so. Next to them on the left are the media fire team. This really amazing actually massive start up out of Houston whose got his presence in Silicon Valley and they are like, they do a lot of things that Dropbox does and are extremely successful. Go meet those guys and talk to them and just of other people. Spenser Neilson, IOS developer. Download his game, it’s awesome. He’s been doing this with us for two years. Go see his game, he built it all himself. Invaders erp IOS. IPad IPhone. Give it a good rating. Dina and Geeo from Asian Fusion. Really awesome entrepreneurs, Dina is like the nicest person in San Francisco and Don and Sean from Ola sitting here on the front row and Chris, and Junior, community managers.
Can we give these guys a warm round of applause.
A couple of other people I just want to quickly point out. Garry Trianguan and Duncan Fairly. Stand up really quickly. Garry does all of EA's electronic arts ESP Integration. If you see anything from EA SPN this guys the guy that was in charge of it. He’s also an Emmy award winning professional. It’s true. Duncan does all of EAs social projects with YouTube and Facebook and Twitter and actually Duncan is an intern. He started his twitter feed in 2008 and like no one cared about it for the longest time and he built it to what. How many has it got now. Eight hundred thousand. That’s pretty good. Intern zero then they snatched it out of his hands. Jesus this is awesome, Twitter it’s the new thing. We can’t have an intern doing it.
Couple of other things, Kevin has to run. He came down from San Francisco. What he has agreed to do which is, lot of you are new so you haven’t seen this. A lot of our speakers have done this, and we are going to hold a VIP meeting contest with Kevin where you can go in and you can pitch your start-up he has agreed to meet with the person that wins. That contest, I will send out a link to that.
00:59:10.30 ROSE: How many did Clavier do: He meet with three people. I’ll do five.
Standing O.
I will send that out tomorrow and you can go load up your pitch and I will send you how that works and everything. Other than that next month. I’m almost done. Pinterest founder Ben Silberman is here next month. We just confirmed it. We also have Bo Fishman. Neville Robercome in San Francisco next month as well.
Start-up grind dot com, we just re launched start up grind is great site to get news and information about events by daily blog posts and features start-ups. If you have a great start up come talk to me. then Erica in the back is a square reader and she is available , we have a start-up grind black hart programme you can get access to all of our events for the rest of the year there’s going to be over twenty events and it’s two hundred dollars and so it works out to be less than ten dollars en event so if that makes sense too and you are going to come to a bunch of these then we hope you will then talk to her and we get you on the list and send you a card.
Brian at the back, great fan. Tell everyone what you do real quick. 3D printing.
Thanks you so much for coming. If you leave here without meeting someone you have failed, That is the absolute truth. As interesting as Kevin has been he has been incredibly interesting you got to meet somebody so meet one of these people that I’ve pointed out and come say hi to me try and get your start up the next step tonight.
Please stay for food and thanks to Kevin for coming and to everyone.