Gadgetory

just want to ask you about two different areas one has to do with tweet storms everyone has to do with this app and what's going on in SF today so let's talk about San Francisco first and about you and I have talked about this in the past the culture around tech here in San Francisco and how welcoming it is to the tech community or not yeah so I mean look I think it's primarily still a good news story like I actually don't think there's a huge backlash I think there's a small backlash and I think it's a backlash worth like acknowledging and we're dealing with and I think it's great you see people like Marc Benioff you know really stepping up and you know doing just like miraculous thanks for the city I think there's a lot of ways of detecting industry in the tech community can give back and can help kind of bolster the social infrastructure at Bentley but i think it's primarily good news story i think there's a whole broad cross-section of very thriving very happy tech companies in san francisco i would go long personally if i were in real estate i would probably go along berkeley and oakland and then i would also go along i think the east bay i think well for sure pleasanton but i would also go along like hayward and Fremont I think the valley is going to build out to the east over the next 10 or 20 years in a really dramatic way I think also over time that will relieve some of the pressures in San Francisco but your latest tweet storm was about the fact that startups need to be a little bit more cautious about how they're spending their money and I guess my question to you is since you are an enabler of startups for one of the enabler of startups what is the takeaway we should be taking from that that they're not listening to management advice about how to be prudent and how to grow successfully from their advisors who I imagine our representatives of your firm and others that are on there or are you backing the wrong people who don't have the experience what does it take way yes sir time will tell what I will tell you is the conversation that I brought into the public is the same conversation we've been having with their companies in private and so it literally its exact same thing if you ask any of the CEOs we've been talking to in our portfolio they'll all tell you that's what we've been telling them for the last at least the last several months if not the last few years and it really is Leah grew the book early a lot it really is a discussion about risk and discipline so the general theory of how startups are supposed to spend money is that as you spend money you reduce risk and basically you spend a certain amount of money you take a certain amount of risk out and then you spend more money you take a certain amount of risk and what just happened is the amount of money in the environment is just now so big and by the way a big part is so much money has not arrived from outside of entry capital so so many hedge funds and private equity firms and sovereign wealth funds have shown up in the valley with huge check books and writing giant checks to a lot of these companies the good news is many of these companies are growing and doing very well we just feel generally there's just an attitude that has been developing that basically says we can spend ahead of the reduction of risk and not in every company right this is a very you know situation is very specific for every company but just in general we feel that the discipline about risk is mainly lost problem with that I mean one is just the cash burn we think is just too high at a fairly large number of companies but part of that is as the consequence companies are hiring too many people too fast the problem with that is it's not like you don't get a high quality company out the other side if you hire too many people too fast right because you screw up the culture like you hire too many people you can't assimilate them and then by the way at some point you'd have to do a layoff and ran one of the things that I'm completely convinced of is layoffs are always the fault of the people who did the hiring right it's like you shouldn't done hiring then enough just lay off and so the way to prevent layoffs is to not over higher why do you think you had to make that conversation public if you are advising your companies as an advisor that's kind of a secret sauce message that you want to share with your your group of companies that you're taking successful that's very nice as a PSA to the tech industry but I'm just curious why you felt you had to do that kind of a PSA and not keep it within the what's an industry-wide issue it's not anything that's can find our companies during a particular set of companies as an integer right issue and it's sort of it's a race right the like for example an example be too fancy offices right so if the expectation gets set that in order to recruit you need to have the world's fanciest office then every company is going to need to raise money to go build a fancy office if on the other hand the expectation is no we're not in this for the fancy offices are in this to build you know real substance of real technology and it you know go back to the Amazon model it doesn't matter if our desk is you know a used or on a couple of sawhorses all right then the burn rate across the entire industry is going to naturally be lower and so there's kind of ratchet there's a ratcheting affect what happens I think so I just felt like just talking to our companies was not going to have the same effect as taking the conversation where broad so too much cucumber water that's very dangerous way way too much cucumber water yes hey all right well thank you so much for your time really I