Ask Me Anything with Ali Partovi

basically told his parents he's not— he wanted to get a better education and took himself out of high school and enrolled in this boarding school called Exeter, which is a, you know, it's like a distance from home and leaving your whole group of friends to go to school far away. To me, that was really fairly striking because most high school students are, you know, desperate to fit in and to stay with their friends and— When I was in high school, the only thing I wanted was to have a girlfriend and, you know, just to like stay with the few people I was friends with, let alone the idea of leaving everybody I knew to go somewhere because I could learn faster was— would not work for me. So I was impressed with how independent he was and I guess the sense that he expected better things for himself. To your other question about the movie, I feel like the movie was It made him seem a little less— it made it seem like things were just happening without him being the one directing it.

Mm-hmm.

Like he was in his laptop a lot of the time and not the one responsible for some of the things that occurred, whereas I feel like he's extremely aware of what's going on and is controlling the strings on things. So So for example, like the way that— so I don't know the exact facts of what happened with Eduardo, but it made it seem as if Eduardo Saverin was kind of screwed over by other people or by other forces. And, you know, Mark kind of signed the papers and went along with it. Whereas if whatever happened, Mark would have been very directly, closely involved in the strategy of it. So Hiya.

So you touched on their capabilities or characteristics of a founder or founding teams. You spoke specifically of Mark's intensity and perhaps a bit about drive and perhaps historically as a character what he was like. Can you elaborate a little bit more, not necessarily in the area of Mark Zuckerberg, but across your experience, what have been those really key elements of the founding team that's piqued your interest, that's made you want want to progress further, bearing in mind the team rather than the idea?

Yeah, I mean, every person is different, so I'd say it's less about saying, do they fit these checklists, but rather, you know, with each person I meet, I kind of try to see what sets them apart. But I guess I'd say a few common things Being extremely hardworking and having perseverance and drive are pretty critical, because running a startup of any sort will be— there will be times when your confidence is very much challenged and everything's going wrong. So it's easy to run a startup while everything's going well, but when you hit those difficult times, having the—

OK.

you know, the strength to keep going. And I think I mentioned this yesterday, but having conviction about your idea is very important. And I'll often use terms like, you know, religious terms like faith, or, you know, basically having a belief that what you're doing is, is real and will be successful, even in spite of evidence to the contrary. So again, it's if all the numbers are positive, then you don't need vision as much, or, you know, things like vision and leadership are particularly relevant when it looks like things aren't going to work and people are having doubts. And it's, I guess I look for founders who have such a compelling sense of belief in what they're doing that they can push through those periods and lead others with them. Let's see what else. I would guess I would also say this is kind of a prerequisite, but integrity, you know, so this is a very difficult one to judge because someone is, you know, lying to you, sometimes you might not be able to tell until, you know, until later. But I guess I don't like founders who seem overly salesy where they are you know, basically find some kind of glib answer to any question. So it's nice if a founder of a company is willing to admit something they don't know yet, or, you know, where there are real risks, you know. It's interesting, even so, for example, if what you're doing is very unlikely to succeed, it's still— it's actually refreshing to acknowledge, you know. Having vision doesn't mean being 100% sure that this will— that there's no risk at all. You know, you could say that this is extremely difficult, we may fail, but if we succeed, it's worth it. As opposed to, you know, being delusional about, you know, whether there's risk or not.

So it's the difference between faith and blind faith.

Yeah, exactly.

Cool, thanks.

I think you've been waiting for longer. Sorry.

So following on from that, what kind of things do you expect founders to learn, and what would you teach them based on your experience in entrepreneurship?

I don't know if there's a single answer to that question, but, you know, it depends on where they're starting and how much experience they've already had. But certainly the thing that for me has always been— it's been reinforced— is the importance of people. And I know I talked about this a bunch yesterday, but— and it doesn't just mean that— certainly the employees you hire are super important, in particular when you're really starting out. The first employees, the first 3, 4, 5 employees, those decisions of who the first 5 or 6 people you bring on will be probably more important than anything else, including your choice of business area almost. And if you have a really stellar group, the company can pivot or change or figure out how to succeed. And if not, it's much harder. But besides employees, it also applies to your investors. You should evaluate them based on the individual people, not based on whether the firm has a good brand name or your law firm, your PR firm, you know, those— All sorts of firms you might employ, and you might hear that, oh, this accounting firm has a well-established brand, therefore let's choose them. Whereas I would always encourage evaluating the individual person that you're working with, and if they don't seem amazing, keep looking. So I don't know if that's helpful.

No, no, definitely.

Yeah.

So one of the things I've noticed or experienced is the hardest— one of the hardest parts of A startup is establishing a market and getting out there. So if you've got competitors, being or having a way to get to your market and being seen as a leader or get established. So in your experience, based on working with different startups, have you got any examples of firms that have really done a really good job of establishing a market and stepping out there, making themselves known, getting their product out there? I mean, I think the most extreme case of a startup making its way through adversity is probably Airbnb that I can think of. That is now successful. Those guys had a concept that was really quite crazy, I would say, initially. And it started from— I believe the starting point of Airbnb was that Brian and Joe didn't have enough money to pay for their own rent, so they opened their own place for people to stay in. And so it was just their own kind of home bed and breakfast, and they didn't even have an extra bed, so they called it Air Bed and Breakfast. They had an inflatable bed. So, and then they created a website for others who want to open up their home, but they had almost no customers for the first year or so. I mean, it was minimal. It was in the tens of users. And then they were in credit card debt, and they just were running out of money. And so what they ended up doing I think they had something like $30,000 in debt and no cash to continue. And no one wanted to invest in this company because it had no evidence of success going for it. And so they came up with this kooky idea to do with cereal boxes that for the— it was 2008 and it was the US election and— You know, it was Barack Obama and John McCain competing with each other for the election. And so Airbnb purchased a whole bunch of cereal boxes and put— and a glue gun and labeled them Obama O's instead of Cheerios and Cap'n McCain instead of Cap'n Crunch and sold these at the— like outside the national convention for the Democratic and Republican parties. And in like a weekend, they raised $40,000— not raised, they sold $40,000 worth of cereal boxes, which was obviously not their main product, but they used this to, you know, raise enough cash to pay off their debts. Paul Graham said to them after this that, you guys are like cockroaches, you refuse to die. So Yeah, so they survived to live another day. Anyway, I'm not sure if that particular story has a— I'm not sure I would emulate that as a startup. But that's certainly an example of perseverance. Those guys definitely believe that what they're doing is going to, you know, deserves to happen, and we're not going to let it fail just due to lack of cash.

Yeah, I was just wondering what you've sort of passed on in your experience that has then gone on to be really successful, and then perhaps why you actually didn't think it was going to be good at the time, and then what changed, or maybe haven't.

Yeah, probably the biggest one was Google. One of my friends from college was the first employee at Google and CTO of Google, and he was also one of the smartest people I knew in college, so I wasn't I was quite aware of who he was and in hindsight should have invested in this company simply because Frank was joining them as CTO. So I actually very much believe that search was an enormous business opportunity, and I was involved in pioneering the idea of search advertising even before Google. I had been trying to convince other companies like Yahoo to do something very much like AdWords. My company was an ad network, and so we had this concept called keywords that we were pitching to other search engines. So I think for me, the reason I was skeptical about Google was there was already a very competitive landscape in search, and it was also very calcified, meaning Yahoo had 70% or so market share, and no sign of losing share to the second place, which was, I think, Excite. And Excite had something like 10% market share. And, you know, then there was AltaVista, and, uh, there was like 8 or 10 companies, and Google had like, you know, less than 1% market share. And the idea that it was, you know, the person in 7th and 8th place, they were competing It's very hard to try to move up to 6th or 5th place. So the idea that somebody could come from nowhere and capture all this market share would seem to me, I guess, pretty naive. I thought they were naive to think they could do that. What I didn't anticipate was how unstrategic some of the other players, notably Yahoo, would be. Yahoo somewhat gave Google the keys to the kingdom, and, you know, so that I did not anticipate at all.

We have a question from AI and Blockchain Accelerator, which is in Edinburgh. They're asking, what technology do you think is the most exciting yet to really be harnessed?

Yet to be honest?

Harnessed, sorry.

Harnessed, harnessed. What's the most exciting technology yet to be harnessed? Let's see. Certainly I wouldn't quote AI or blockchain since they're here. Let me think about it. Most of the things I can think of are already pretty hyped up. You know, I would actually say I'm more excited about applying, you know, kind of what seemed like more boring, like basic Web 2.0 technology. There's so many spaces that haven't yet been digitized or technology-enabled. So, you know, I guess if I were to think of really sort of futuristic tech, which is what the question implied, there's some new hardware opportunities. and I've invested in them, that are trying to kind of go beyond silicon to make chips break the barriers that right now are slowing down computing. Not slowing down, but sort of prevented the acceleration of computing.

Mm-hmm.

So Moore's Law essentially has begun slowing down, and because we've reached a— kind of an asymptote in things like these chips are getting so small that they're getting too hot. And then to try to make them any smaller, they would melt literally. And so it's— we're reaching like the boundaries of physics for chips. And so I've made a couple of investments in things that are using— one of them is using photonics and basically using light rather than electricity. For computation, and the other is using ferroelectric materials, which is a different way of storing 1s and 0s rather than electricity. It's using a magnetic dipole. And so both of these are quite futuristic, but if they were to work, they would potentially result in not just a 10x, but 100x or 1,000x improvement in computation. So So that's my futuristic answer.

Mm-hmm.

But I would say more kind of in the very present, there are so many opportunities where there are industries not yet web-enabled. So I've made a number of investments, for example, in trucking, a company that I invested in 4 years ago called Convoy. Observed that the trucking industry was still using fax machines for scheduling and negotiating shipping contracts, and there was no central broker or anything like this. You know, the process— if you are trying to get something shipped from A to B, you would send out RFPs by fax, and then you'd have a series of different middlemen or brokers send you back quotes and then you choose one. And there was no transparency as to when will the truck arrive or where is it. And so they created something essentially like an Uber for trucks and using pretty basic technology of, you know, an app so that it could GPS to track where the trucks are and a marketplace for choosing your, you know, choosing who you want to hire or so on. And it's now a billion-dollar company, although at the time it was entering a brand new space without necessarily a lot of evidence as to where it would end up. But I think there are other areas that are still far from being successfully harnessed for technology. Cool, thank you. On this side, yes? Oh, okay.

I kind of feel like the last 2 decades Basically, it's quite the golden age of internet advertising. You've got these huge technology monoliths like Facebook and Google, which have basically built primarily like data ingestion engines, which allow them to sell internet advertising at very good rates, offer very good service to advertisers. Then in the last few years, there's been a bit of a kind of pro-privacy backlash towards this. You've got legislation like GDPR. I think there's similar types of legislation coming into effect or being debated in various other countries in the world. Do you think there's going to be any kind of shift towards different revenue models for consumer-facing services, like more focused on subscription services or microtransactions and things like this?

It's a great question. I don't know the answer for sure, but I will say I personally prefer models where the consumer pays directly. I should say more generally, I prefer models where there's only one customer and whoever uses the product the most is also paying for the product. So having a two-sided model where, you know, these are our users, but over here somebody else is the person paying the bill, it makes it more confusing. So advertising is a prime example of that, but there are other scenarios where people suggest where this is how we will build up traffic, but then we'll sell data. Selling data is another concept of, you know, how to monetize free users. I generally think if you've created something that people want to use, just make them want to use it so much that they are willing to pay for it. And before smartphones, it was— I guess smartphones and apps have also created the potential for transactions within the app. And so further microtransactions are also interesting, but even just within the app-based ecosystem, there's a model for people to pay $1 or so on. And there's a high cost in terms of the transaction fee that Apple might take, but it's still possible at least. So yeah, and part of why I like this idea of having the same people who use your product pay for it is it simplifies within your organization how much you have to keep track of. Your organization might be a one-person team when it's just yourself, as if it's a solo founder or 5 people, or it could be 100 people. And if you have 2 separate groups of customers, the free users and the advertisers, you end up having conflicts and within a team have arguments as to who the priority is, and it just gets messier. So for example, I remember when Dropbox was deciding how to monetize You know, they could have chosen to make it ad-supported or some other mechanism. And, you know, thankfully they chose this freemium model where you get free storage up to a certain point and then you pay. It just makes it simpler because then all you need to do to make more money is just make sure the core service is really great and try to find ways to get people to use more storage, and eventually they'll run out of storage and upgrade, or a percentage of them will upgrade. Was there a second question? Sorry, I've already forgotten. Okay, thank you. A bit of a curveball question. Have you ever come across successful founders who don't read a lot? We do not.

Have you ever come across any of the Silicon Valley top CEOs who doesn't read a lot? Is it possible? I got a theory that you can't be successful without being sort of intensive, very intensive about learning and reading all the time. Is that true or am I wrong?

Yeah, the question is, have I run into any very successful founders who are not voracious readers? I guess it depends what you mean by readers. So when I think of someone who's a significant reader, I often think of them reading like fiction. But you mean more like just curiosity too?

Warren Buffett, Bill Gates style, probably Elon Musk.

Everything I know from—

I don't read these, but I follow blogs and they all seem to be senior types. Is that true?

I think there are a few who are really famous ones who are also voracious readers and will publicize. Bill Gates, as you just mentioned, Mark Zuckerberg for at least a year was posting what books he was reading. But to me, I would not have thought of that as universal amongst founders. I think what I would say is curiosity and then being obsessed with learning everything about their own space of whatever they're working on. Whereas some of these other examples show more broad curiosity about the entire world. So, you know, after they're successful, it's easier to have the luxury to learn about everything or, you know, anything. Whereas when, when they're in the kind of crux of creating the company. The thing I would say is more common that I see amongst founders is being intensely focused and obsessed on their space and then reading or learning everything to do with what they're doing. So, um, so I guess it's still perhaps likely that they're reading a lot, but just extremely focused within their narrow realm. So there's a founder I met just a few weeks ago that, um, in an area that I wasn't very familiar with, and the thing that really impressed me was how insanely well-versed she was in all the details of this whole space that she was working in. And I assume that it was from reading, although I can't know for sure. That to me is more of the common denominator, is really deeply knowing your own space.

Yes.

So yesterday you touched on the fact that when you went into business, you came into wealth and you felt the responsibility. Is that purely towards driving innovation, or is that a wider responsibility?

Yesterday, I think when I talked about coming into wealth and feeling responsibility, I think it can mean a few different things. The most basic one is responsibility not to lose your own money, or not to let it sit without having like good gains, I guess, because simply keeping it in a bank account might have, you know, 1% interest and not keep up with inflation or something. So I'd say the first basic level is responsibility to, you know, I guess to myself, of, you know, still somewhat selfish of you know, having it have a good return. But then I'd say there's a responsibility socially. I think that people who have wealth should use it to make the world better in some way, including simply by investing it. That helps. That's better than hoarding it and, you know, not allowing it to be recirculated or to employ others or to drive change. And, but, but also investing it in a way that aligns with the impact that I would want to see in the world has been— that's a higher level of responsibility.

Yeah.

And I think the happiest people are the ones who figured out how to align their day-to-day work with some sense of impact or purpose that, you know, is making the world a better place in some way. So, you know, some people make a lot of money doing one thing and then donate it. That's certainly great. You know, philanthropy is great. But if the way you are earning money is not making people happier or not making the world better, for example, if it's, you know, traders, you know, hedge funds, generally the more money you make has nothing to do with improving the world. As opposed to creating a new firm that— or creating some product that people want, you are, you know, you've created something and you— the more money you make, that means the more people you have somehow served. So yeah, so for me, for investing, I think often about if this is really successful, what will that have meant for the How it has changed the world. Should I get like Jaime? Do you want to ask another question? And also, do you want to choose the question?

I'm happy for you to choose. But now that just yeah, I am. I was. I was thinking of something you mentioned before about when things go wrong in in startups. You want founders that will.

keep going.

And as an entrepreneur, when things went wrong, seeing experiences of you was very inspiring to keep going. Can you tell us about any of your personal experiences in which things weren't going as you were expecting to and you kept going and managed to get out of it?

Yeah, let's see. I'm trying to think of some— what's the most extreme cases. I mean, my second startup really wasn't that successful. It was called iLike. It had many different lives, and at one point seemed like it would be very successful, but then ultimately it was not the most, you know, not the most financially successful. I'm trying to think of like That's the one sold to MySpace? Yeah, yeah.

So it wasn't so successful before being sold, or like—

It was like this and then like this.

And in which point was it sold?

Towards both. There was a point at which it was probably the most popular music service on the internet. This was all before Spotify, and— or certainly had the— it was on a trajectory for that because it was built on the Facebook platform. And the Facebook platform— I don't know if everyone even remembers the Facebook platform, but there was a period when it was a very vibrant and rapidly growing thing that people were adding apps in Facebook. And then it turned into kind of a terrible experience that people then were removing, and Facebook eventually kind of killed it. So because of our strong alignment with that platform, we had this enormous rapid growth where we grew to like 100 million users very rapidly. And then we still had those users, but we were increasingly losing abilities to serve them or to reach them because Facebook was removing those capabilities from their platform. So we, you know, because of that, actually, you know, We basically ended up finding different other ways to reach users, you know, by building smartphone apps or desktop apps and so on. Well, it's still— I'd say I'm not sure this story had a particularly happy ending because we ultimately sold the company, but we weren't able to find a new path to really growing significantly our user base. Our company had been so reliant on the Facebook platform that essentially the decline of that essentially dragged us down with it. So what about Zynga?

Zynga started very similarly, so it just arrived on Facebook and then they started passing big beats. Was it sort of normal back then?

I don't know what you mean by normal, but I'd say there was a whole group of companies that—

what's that?

Yes, there was an enormous cohort of companies that collectively all got fucked by Facebook, basically. Zynga, I'd probably say, was the most successful, actually. Zynga took a very interesting approach of steering into the problem, I guess, meaning most of the other companies, once they realized how unstable and unreliable the Facebook platform was, kind of tried to pivot away from it or find alternative things to rely on, like creating iPhone apps or so on, whereas Zynga more strongly embraced Facebook. And, you know, for example, Zynga started spending a lot of money on Facebook on top of building their technology on Facebook, which was a— it's like doubling down on the bet. What was unique for Zynga was that they had a very high cash flow business, so There were other companies, mine and others that I can think of, that were trying to build long-term equity to either be ad-supported or first build a lot of users and then later monetize. So we had a number of different paths to monetization, but we were first building our user base up. And but then once the platform started losing features, our ability to potentially monetize was kind of reduced. Zynga, because it was cash flowing, like one of their most popular businesses was an online poker game, and then other businesses they had would have a cash component in them. So they were somewhat— they weren't as long-term oriented. They were just basically whatever will cause short-term growth will generate cash flow. And so spending money on Facebook, spending money on Facebook themselves, they were making money directly back within, you know, same day essentially. So, so they created this funny cycle where they were highly reliant on Facebook. It was the biggest risk in their business, but then they spent a lot of money on Facebook to increase their cash flow, and that made Facebook a little bit reliant on them. Because they were one of Facebook's largest sources of revenue. And so for a period of time, there was a codependence where Zynga was less screwed because they knew that Facebook needed them, sort of needed them. That didn't last very long because Facebook grew bigger and basically screwed them over too.

In your case, when the downslope started, what went through your mind? Did you consider pivoting the product? Did you think, like, let's get out of here as soon as possible?

Or what were, like, the options that you were— So we, I would say, pivoted many times, but the way I'm saying that, I'm defining pivot not as completely ditching the business and doing a new business, but rather smaller, slight direction changes. I've seen, you know, the word pivot has been used more, you know, to suggest a completely brand new business, like literally throw away your old idea and start a new business idea. I don't believe in doing that. I would say if that's what you're doing, shut down the business and launch a new company. But we kept it alive by making sort of smaller pivots to, you know, we were more focused on one sub-feature or sub-area and we would, you know, try to emphasize another area. So yeah, you've been waiting a bunch.

Yeah, got a question from Oldham. So one of our companies is keen to understand what your views are, any suggestions you have on doing business in China? And if you can expand that question a little bit more, given that there's a trade war and China is pumping billions into, into the economy and trying to make it easier for foreigners to do business within that market, it'd be good to get your view on that. I don't know if you want to also talk about Uber's experience in China in relation to Didi.

Yeah, so I have to confess I don't know China that well, and I've generally throughout my career, when I get involved in things I don't know well, I don't do very well. So I've probably missed out on some great opportunities in China just because I am insecure about it. I don't know it. I don't understand enough about the market there. The sense I do have, which has caused me to be reluctant about China, is that the The things that are highly successful end up in some way or another being capped, or the government is so involved, and unless you're closely tied to government, I think your upside is limited. You know, I've heard stories of people who've built an enormous business only to then later have the government find some way to take it away from them or to take the upside away from them. And with high-tech startups, it's such a— the optionality of the very high outcome is such a big part of your expected value. You know, with a smaller startup, meaning— sorry, with a small business, if you're looking for incremental growth, it's okay if you don't have the chance to make, you know, billions. But with— Startups are super high risk, you know, high risk of complete failure. It's worth doing it if you have like a 1% chance of, you know, making billions. And I feel like the influence of the government there significantly reduces that possibility of making billions. It seemed to me Uber's experience was a little bit in the same realm where essentially they were trying to compete in something where incumbent was advantaged by the government. And incumbent meaning the local player, Didi. And so, you know, they sort of, I'd say, didn't have much hope. So they invested a lot of money and eventually had to kind of retreat/settle. rather than trying to— rather than successfully winning in that market.

As a follow-on question on the geography theme, I mean, we all know Silicon Valley is— or most of us believe Silicon Valley is ground zero. But when it comes to other parts of the world that are innovating, do you have any observations or thoughts? Or is NEA looking at investing across regions?

So my fund is generally North America-focused. We, in fact, I think we're legally able to do some outside, but not very much investing outside. So I'm not aggressively looking outside North America. So having said that, I think there is lots of opportunity outside. You know, the— I don't know if I articulated very well what my worries with China are, but outside of that country, I think there's lots of opportunity, you know, and probably not as much entrepreneurship as there ought to be. I think there's a lot of other economies where the culture isn't as risk-taking or as encouraging of risk and entrepreneurship, and maybe that has to do with culture, maybe it has a little bit to do with policy, but I do think that There's a lot more opportunity for entrepreneurship elsewhere.

Yeah. As tech dominates every area of our lives, it feels like the security issues around that— trust and security and cybersecurity— are increasingly important. But it's very— it's pretty much invisible, and it's kind of not terribly glamorous. But you're really grateful for it by preventing something that goes wrong. I kind of wonder if it's a bit like for a long time people were happy to give away their data and now they're like, I'm not sure about that privacy. In the same way, arguably people have been quite gung-ho with the trust they put in the technology and all the things behind it, and we'll see if that's going to change. I'm just really interested in your perspective as someone who seen how this technology can explode, particularly around cybersecurity, because it's, as I say, it's largely invisible, but it's fundamental, especially if we move into a world of smart cities and tech dominating everything. So what's your take, Ali?

Generally, I would agree. I would say you just mentioned 2 areas that I think have the potential for multibillion-dollar business value creation. One is the realm of privacy/identity. And then, you know, and I would say it's not just keeping my, you know, my data safe. It's also the convenience of not having to— like, one of the biggest pains in the necks is trying to remember 100 different passwords for different sites. And so it's not— so there was a time when it seemed like Facebook Connect would be the solution. And frankly, if Facebook had better stewardship of people's data and better trust, it would have been a successful solution. I think most people don't want to use Facebook Connect because they have good reason not to trust what's going to happen. But a workable way to not have to remember all the passwords, I think, would be a huge business. Google is also trying to do that. I mean, there's a few different efforts by the, by the really big companies, although there might be a startup opportunity there. And then somewhat separate is cybersecurity, whether it's for consumers or for small businesses. And it's tricky because it's not very sexy, as you mentioned. And there's also a little bit of a— psychologically, like, people don't want to do the proper kind of hygiene until after, you know, they realize after the problem happens, oh shoot, I should have done it. But like, just like not everyone flosses, you know, even though they know it's important for their— You know, not to lose your teeth at some point, but, or whatever, but people just still are lazier. They don't think long-term enough. So I think there's— it might be challenging to get adoption of it, but I do think that there is a real opportunity there.

And is that about pushing the massive companies, making that provision easier, the kind of push model, or is it about increasing awareness amongst the consumer for them to think, okay, it's important that I floss if I want to keep my teeth. That's the same kind of ethos. It's probably a pincer point, but what's your— again, what's your thoughts on that?

Yeah, for consumers, I'm not as sure, but for the B2B market, I think there you can probably find ways to align it with financial incentive. So, you know, for example, if there was a way to reduce your insurance premium premiums because this reduces your risks of catastrophic loss.

Yeah.

There's a company I've invested in actually called Svanta, which is providing a security framework for small businesses, where it's specifically— their initial focus is businesses who need to pass compliance hurdles in order to make sales. So it's, uh, their ideal customer is a tech company who's trying to sell to large enterprises, and there's a number of different security, like, compliance, uh, requirements. For example, SOC 2 compliance. I don't know if there's a— that is global or there's some different variation here, but, um, you know, these compliance, uh, requirements might include things like verify that everybody in your organization has encryption turned on and everyone in your organization has 2 2-factor authentication on their email and that you have the right firewalls on your servers. And currently, simply like proving those things entails hiring a consulting firm for $100,000, and they'll have someone come to your location and spot-check and personally review what's going on. And you do that once a year in order to become SOC 2 compliant. It's not truly secure because when that consultant leaves, someone might, you know, turn off the encryption or a new employee doesn't turn on encryption. So Vanta has built automated software that will monitor and check these things year-round and sort of have higher caliber security, but more importantly also it's cheaper than hiring a consultant. Because it's automated. And so it's— the long-term goal for them is for everyone to use this software, but their short-term, how to get people to actually pay for it and take it seriously, is because it's a requirement of doing business if you want to meet the certain compliance requirements of your customers.

Thank you.

So I know you have been focusing a lot on investing in young people and making sure that they have the right technical skills to meet the talent demands that are needed in the marketplace. And my question is, for more senior people that already have a career track and that maybe don't have that computer science or technical background, do you have any advice on how to be effective in Do you have any advice on what are the key things that need to be done in order to make that transition?

Well, certainly I would say partner with a co-founder who is technical, and they don't have to be necessarily young. There's very technical people much older than myself. But it's, you know, I would say at the same time also just trying to maintain your own curiosity. And just because you didn't have a technical upbringing yourself doesn't mean you can't start now. And, you know, there— I think that the worst is when people feel intimidated because they don't have certain skills. They assume that they can't learn them. Now certainly, if you're beyond a certain age, it's not worth it to try to become a full-fledged computer programmer. You know, that's, you know, I don't know what age, but let's say if you're over 30, you can learn to code, but you shouldn't expect that you'll be the main coder in your own company. But that being said, I think you would Don't therefore think like, oh, it's completely over my head, I have no idea, I'll never learn. You know, you can still at least learn the principles, learn to be able to speak about it. And, you know, it's not just about coding. I think what's helpful with computer science is it's like a different approach to problems, and it's helpful for, for example, knowing how to break a complicated problem into smaller smaller parts and then you can tackle one part of it, or it's relevant for figuring out if there's a certain band or certain layer of the stack that you should focus on. So if a problem has like many layers, rather than trying to do all of it, maybe you can just as a business do one layer of it and rely on other businesses to do the other layers. So at least thinking In a computational way is helpful, even if you don't develop all the skills.

If one looks at Facebook, Snapchat, YouTube, they've got very— they have a dependency on advertising-led business models. And it's probably fair to say that they apply a degree of AI and parsing, sophisticated parsing methods, when they look at the user data. Why can't they, or why don't they recognize they're being equally simultaneously platforms for everything from trolling to hate, terrorism, promotional videos? Why don't they apply the same level of focus or intellect trying to reduce or compromise the speed and breadth that those very corrosive social things happen. It just seems quite extraordinary. You know, are they waiting for regulators to turn the screws on them? Because it seems like they have the intellect. They just don't seem to be motivated.

Yeah, I think you're correct. I think that different companies are slightly different. Generally speaking, I think Google is better than the others in this realm. So while Google's not perfect, I think by and large, I think their motivations are to be good. And sometimes they might stray from that, but they're, you know, from early on, Google has had from the very top this idea of do not be evil. And, you know, and at least internally, that's a self-correcting influence that I think they are sincere about, even when they might stray from it. Twitter is— I've always thought of Twitter as a little more desperate and actually at risk and vulnerable. And so they may not have the— I guess for Twitter, I would say they would generally look to Facebook. And if Facebook is not correcting it or, you know, like not cracking down on something, Twitter, who needs the money more badly and is, you know, kind of struggling for survival more, is not gonna lead the way in that kind of thing.

Mm-hmm.

So I think the greatest responsibility lies with Facebook in this realm. I'll give you one specific example. Donald Trump's Facebook account was violating Facebook's rules on hate speech because of all the bigotry that he was spewing. And he was also posting the same things on Twitter. And my guess is, I mean, I don't know for sure, but my guess is that the people at Twitter were, if they were considering deleting Donald Trump's account, they would say, well, we won't delete it unless Facebook deletes it. Because for Twitter, this single account was responsible for like a lot of their usage. And Facebook considered it, and there was a— this was published, you know, I think there's been articles about this where internal employees said, hey, this, this violates our hate speech rules. We— if any normal person was doing that, we would delete them, and we should apply that to them. And There was a whole internal debate and it went all the way to Mark, and Mark basically decided, oh no, let's rewrite our hate speech rules to consider this now normal. And I think this was a terrible decision.

Mm-hmm.

And really, for me, like, I lost a lot of respect for him over it. And he should have done it. I think he should have deleted the account. And it's just that, you know, our rules are more important than any one person. And if Facebook had deleted that account, then Twitter might have. But if Facebook didn't, you know, you wouldn't expect Twitter to do so. Yeah, so I guess I'd say generally speaking, I think you're correct in saying they don't have the motivation. If they were motivated to do things well, I think they could have. The other example with Facebook is just the enormous prevalence of fake things. And the current one that people talk about is fake news, but there's a lot of other fake things on Facebook— fake accounts, fake interactions, the situations where you receive a notification that says your friend did X, Y, or Z to, you know, engage you, and sometimes those are not true at all. And I think Facebook has generally had a mindset of, well, if it engages people and they come and spend more time, then it's okay, as long, you know, even if it was for something that's just not true. And I think that's a kind of irresponsible sort of corporate point of view that's very, I guess, very profit-oriented or very mercenary, and it's pretty unattractive, actually.

Okay, one last question.

Yeah.

Okay. If you had to give two or three books every time that you passed, what would they be?

Oh, I'm not a huge reader myself, so no. Yeah, no, there's there is one that I recommend highly, although it's pretty old. It's called Coopetition, and. The title doesn't— I don't like the title because most people hear that word, I mean, cooperation and competition, and they assume that they got the whole message from the, you know, from the one word, and I don't need to read it, I got it. But the book is— that title is not even the appropriate title. The book, I would say, explores the game theory of business in many, many different directions. So in terms of— Much more than just whether to compete or cooperate. It's, it's a really good exploration of how you can change the game in various situations. If you think you're in trouble, you know, find ways to expand or into different territory or so on to, to win in the long run. And so that's a book that I have actually bought for a lot of people. I'm trying to think what else. I actually prescribe watching Silicon Valley to a lot of founders.

It may seem—

I mean, it is funny, but there are certain episodes that are so real and instructive, even though they're taking things to a, you know, kind of a ludicrous extreme, they still have nuggets of truth to them. So I'm trying to think, in particular, there's a few episodes when they're trying to raise financing from VCs, And of course, most of the specific details are a bit ludicrous and not applicable, but a general part of it that I think is true is that raising financing is a— the winds shift super rapidly. And so if everything is going really well, you know, I've seen time and again founders who get overly confident that this is awesome, we're so hot right now. Everybody wants to invest in us, and getting perhaps overly greedy and assuming that that'll last forever, and it lasts for like 3 days, and then suddenly no one wants to invest in them. And, you know, if nothing else, be prepared for that, and perhaps better, you know, try to close the deal while you're hot, you know. So yeah, so that's just one example, but there's a lot of examples in that show that are Actually quite instructive.

So before we finish, I wanted to end on a personal note. So you're a massively successful tech entrepreneur, your twin brother is a massively successful tech entrepreneur, your cousin is CEO of Uber. What do you have for breakfast? Is there like a culture in your family that What's the secret we can apply to our—

I don't really believe in genetics in general as a source of superiority for anyone, I would say, but I guess intellectual, that is. Obviously genetics can help if you're a basketball player, but my family, there are some very successful folks and there's others that you didn't mention as well that I don't want to overlook. But I think the common thing in my family was we were all— we were being an immigrant as a factor. We, you know, most of the members of my family left a lot behind when we left Iran, and that gave a very deep sense of hunger of essentially rebuilding And I think families that go through— I mean, so we weren't just immigrants. There was a revolution in Iran. And so a lot of, a lot of people lost a lot. And people who have experienced enormous loss can react to it in different ways. I think some people kind of cling to the past and can't get past it and, you know, spend the rest of their life wishing they could, you know, return to the past. Whereas my family most of them were able to instead use that as motivation to try to rebuild. I think I would also say that throughout, across my family, education has been an incredibly important priority. So certainly in my parents', you know, the experience that for me was enormously motivating was when we got to America, we had very little money. My mom and dad both had to work very hard. My mom actually had 2 jobs. She was a secretary by day and she was a department store saleslady by night. We didn't have our own house. We lived in our grandmother's house, you know, and the 4 of us shared one bedroom, meaning my parents and my brother and myself. And yet they sent Hadi and me to private school. So whatever money they were earning, they were spending on—

Education.

an expensive education for us. And so that gave me an enormous appreciation for education, but also a sense of responsibility that, you know, I better do something to, you know, pay this back or to, you know, make a better life for my own parents. So yeah, I think that that sense of responsibility was something that across my family was pretty impactful. For other people to be driven to succeed as well.

Thank you so much.

Want to add something?

Yeah, I think we need to finish now. So thank you so much, this was amazing, super inspiring, and please come back soon to London. Thank you.

Right now I may not even recognize that. Um, so maybe it's 45.