9-12-19 Firseide Chat with George Zachary, Charles River Ventures

Okay ladies and gentlemen, thanks for coming tonight. I heard there's a debate on TV but paying attention to that, you guys are here tonight so thanks for coming. My name is Rob, I organized Idea to IPO. We've been doing events in Silicon Valley for many many years. We always have a busy calendar of events. I'd like to highlight two events that are coming up: September 17th, how to get seed funding for your early-stage startup, that's all the way up in San Francisco; September 19th, deep learning 101, that's in Sunnyvale. Check out the details for those events and all of our events on our website, ideatoipo.com. We launched officially on February 1st, 2010. At that time, we had no members and no events on our calendar. At this stage, we have over 60,000 members among all our Meetup groups in the Bay Area. We've completed over 2,100 events. By any standards, by any measure, we're the most active, most prolific startup event organization in Silicon Valley, bar none. We're actually the most active, most prolific startup event organization in the history of Silicon Valley. Just just I'm not bragging, I'm just stating a fact. Our mission is to promote entrepreneurship, support entrepreneurs, build community, and provide value in the Silicon Valley startup ecosystem. To that end, we provide content that is practical, actionable, relevant stuff you can actually use to succeed as entrepreneurs. We believe in building community because Silicon Valley is an aspirational ecosystem. It attracts people from all over the world who come here to do great things. Who here is not originally from Silicon Valley or the Bay Area? Who here was born and raised in Silicon Valley or the Bay Area? For natives, including our moderator, let's hear it for the natives. So whether you were born and raised here or just arrived last night, it's important for us to provide multiple channels for you to meet people, build relationships, and grow your network. In addition to our content oriented events throughout the week, we also have some fun events on Friday nights. The next one actually is tomorrow, Friday the 13th. We have a TGIF mixer, "Thank God It's Friday" for Friday the 13th celebration, so if you're free on Friday the 13th, tomorrow, come check it out. You're all invited; it's free and I hope to see you there. With regard to value, it's important that we provide value at each and every one of our events, so we make sure that we're affordable because we know many entrepreneurs are struggling financially. And at each and every one of our events, we make sure that we provide a delicious buffet meal. Is that a delicious buffet meal? Well, let's thank Perkins Coie for sponsoring that delicious buffet meal. I know you guys were expecting Costco pizza. That's next week, so enjoy it. Why? Yeah. Most importantly though, at each and every one of our events, we want to make sure that we provide value for your time, which is your most valuable resource. I have to ask, is anyone here getting any younger? I didn't think so. So when you invest your valuable time to come to our events, we want to make sure that you maximize your ROI. We have many, many partners that help us do what we do: law firms, venture capital firms, angel investor groups, incubators, accelerators, colleges, universities, lots of other players in Silicon Valley. Tonight, once again, we're grateful to Perkins Coie for hosting us at this beautiful venue and providing us with an awesome moderator. So once again, let's hear it for the law firm of Perkins Coie. A few of our other partners are here tonight; I would like to have them come up and say a few words. First off, let's hear it for SVA Hub and Searle.

Welcome everybody. My name is Sarah and I'm running one of the incubators in Sunnyvale which is called SVA Hub. It's one of the new co-working spaces as well. We offer some office solutions to the startups and founders. We do have different memberships like private offices, dedicated desks, flex desks and co-working space, as well as offering office solutions. We also offer some other services such as business development, accelerator corporate innovation, and by the way, next Tuesday we have an event at our space about product market fit. Everybody is also invited to that event. It's svahub.com. Thank you so much.

Right next up, we have Laptop Radio and Michelle. Hi, I'm Michelle. I am on Wednesdays on at Laptop Radio, which is my show on KCSKU 90.1 FM Stafford. I have a show about tech, so I talk about games, gamification, blockchain, AI, and just did a whole three-episode series on employment and labor law for startups, interviewing someone from Perkins Coie. That was super awesome. And you can find Laptop Radio on Apple Podcasts, Google Podcasts, and Spotify, so check it out. Thank you.

Alright, next up we have Coldwell Banker and Raahat. Good evening everyone. My name is Raahat Subedar. I've been practicing real estate here in Silicon Valley for a while and I'm a firm believer that you need good information to make good decisions. If you're contemplating any real estate decisions, please feel free to reach out to me as a resource. Thank you.

Alright, next up we have Happiness Factors and Anita. Thank you all. This is Anita from Happiness Factors, and Happiness Factors was founded on the concept that we want to eradicate death by suicide which is due to emotional unwellness. At Happiness Factors, we provide emotional wellness tools and techniques based on NLP, hypnotherapy, and amer psychology. And we not just make you happy, but we help you sustain it without the use of drugs, marijuana, or alcohol. If you would like to find out more about it, please contact me. And we are also looking for some marketing and some technical folks, so come talk to me if you are interested in making a difference in the emotional wellness across the globe, and at the same time making some stock options out of it. Have a nice day.

Alright. So our local mission in Silicon Valley is to support entrepreneurs here locally in the valley. Our global mission is to democratize entrepreneurship and innovation all around the world. To that end, we maintain a robust YouTube channel: youtube.com/ideatoipo. Tons of videos there, check it out. We've documented and archived many of our events, and this rich valuable content is available on demand anytime, anywhere, totally free of charge, whether you're in Palo Alto, San Francisco, New York, LA, Maui, Moscow, or Timbuktu. Our partner in this endeavor is Tim Jaegers of Jaegers Films, one of the top professional videographers in Silicon Valley. So let's give it up for Tim.

Thank you Rob. Thank you everybody. This is a hot mic so I'll be quick. Tim Jaegers, I've been doing multimedia production all around the Bay Area for the last ten years or so. I specialize in videography, I also do photography, web development, everything from pre-production to actual production and post-production. So any questions regarding content creation, feel free to reach out to me. If I don't have the answers, I can definitely point you to the people that do. And looking forward to a good chat. If this many people are here, these guys must have something interesting to say. Thanks for having us.

Alright ladies and gentlemen, here's the schedule for the rest of the evening. Our special guests and moderator will go into their fireside chat. Audience members, hold your questions until 8:00 PM. At that point, we're going to open it up to audience questions. Please use the microphone. We'll take as many questions as possible. They'll take us to 8:30 PM, at that point we're going to end the formal program. We do have a raffle. I got this book last week at the CMX Summit, "Turn the Impossible into the Inevitable: Story 10x" by Michael Margolis. It's a pretty awesome book. So we'll pass around the bowl again if you haven't had a chance to answer that raffle. So that's at 8:30 PM, you can stick around, network, socialize, and connect. As a courtesy to Perkins Coie, we would like to leave the building by 9 PM. We might have an after-party somewhere, maybe the Rosewood, we'll see. So without further ado, I would like to pass it off to our awesome moderator and our unbelievable special guest. So let's hear it for Jim Brenner and George Zachary.

Thank you very much. This is hot. Just really quickly, for those who don't know Perkins Coie, we're a national law firm across the country with over a thousand lawyers. We specialize from everything from M&A to labor law to regulatory advice. Here in Silicon Valley, this office particularly focuses on emerging company and venture capital. That's what I specialize in, and patent and privacy. So that's the pitch. Here with me, I got George Zachary from CRV. George, won't you tell us a little bit about yourself, just get the audience familiar with your background and where you're from, and we can get started.

Alright. Um, so George, you and I were talking. I know you recently you switched to biotech. Do you want to talk a little bit about that history? Because I guess I know historically you were consumer, you were one of the early investors in Twitter, and you switched to biotech. Do you want to give a little bit of a why and what you see, why you think bioengineering and biotech is important and what sort of drove you to start looking at that?

And going back to original thesis, how do you see... what are you looking for in biotech to help empower the individual? Or where do you see the market going that would empower individuals? I know we all kind of understand the healthcare system doesn't give a lot of power to individuals, but where are you focusing?

Why do you think that? Because I think everyone's focused on trying to change it, at least I see a lot of clients trying to focus on changing the healthcare system. Why do you think that's not either something for you or the market is able to do?

And would you care to give us any previews of where those platforms are coming from, or the edges that you start seeing?

So the place where this is touching on, which is something that I'm super interested in, is the brain as a platform. And for me, this is going to be the most revolutionizing concept that we're going to see that's well past the phone, which will be your brain as the platform. Do you mind expanding on that a little bit, what you mean by the brain is a platform? You and I, you explained it to me earlier, but for the audience's benefit, what do you mean when you think of that, what does that mean to you?

So I know a lot of... excuse my wife, I didn't text her today. It was just... why did you think I mean it'll go out? Yeah, I mean, we can already get signals from your visual cortex of what you're seeing. So if we can take the signals of what you're seeing and refine them, there needs to be really good definition and refining of the definition right now. Then it's possible to look up who those people are using the vast database of people's faces that we have right now and to identify people walking down the street towards you. I mean, you could say this is dystopian, but it also provides people a sense of safety.

Well, my interest is basically people's health. But this is going to become, I think over the next 20 or 30 years, effectively the platform. I mean, the phone is a proxy because you hold it to your head and you look at it like here. You look at it here. I bet why should it be something you hold in your hand and look at here? It'd just be completely dumped into your brain. It's going to be a different intake experience. It'll be a lot faster.

Alright. Well, okay. Now we have in a dish, we've got normal neural tissue that has neurons that have now started to communicate on their own when we've never said like try to get them to communicate on their own. In academia, there's basically a group of professors saying they're measuring brain waves between neurons and questioning whether these brain organoids are actually thinking. Some ethical questions there.

Yeah. So there's, while there's Beyond Meat and Impossible Foods that are basically built off of conventional ingredients, there'll be a new wave of cell-based meat products. And these are not genetically modified products, is that... I mean, I think you don't have to answer this question. Is that once again something that they can scale to a level where it's actually going to be something that... I know that's the hope. But do you think they'll be able to scale to a level that actually can reach all everyone's plates, or is it something that is this cool thing but it's going to be tough to a next life sort of? It's like the seeds of the next big thing.

Yeah, that'd be really interesting to not have to worry about where our meat is coming from anymore.

So it's changing gears for a second. Let's play hypothetical. Say I was an entrepreneur and I had some bioengineering company and I wanted to get your attention. What are you looking for from a series A stage investor to really get your interest?

This kind of raises the question of what gets you excited? I don't know you know, okay.

Yeah, my best decisions have been ones that I kind of knew right away, but they always haven't been great decisions that I knew right away or acted on quickly.

Spaceship to Mars, controversial, probably not up your alley though.

Do you think you can do it in ten? Okay.

So my client, we discovered the ones who get it, investors who get what they're doing really quickly, tend to be the best relationships they have.

And when you lead, you're going to take a board seat or do you get involved? How involved with your companies?

What role do you normally see yourself playing on the boards? I know different VCs see themselves in different positions or it depends on the company itself.

Yeah, those are never fun times. No.

So do you see a trend in things that often lead to how CEOs end up in that position where they're about to be let go? Or is it normally...

For this one example, was it something that the CEO, if he was more aware, could have helped prevent or done something about? Or was the person just in way over their head?

I can second that from my own experience. It doesn't. I wish that it had happened, but it had never happened. So that's one vector. And the second half of that vector is ethical issues. We can watch a couple documentaries on that.

So I know you've been doing venture capital work for 25 years. What's different from when you started? Obviously, we don't do as much in capital markets as we used to. But what else do you see differently from the culture and the industry? And where do you see it going?

Do you think Silicon Valley still, at least the venture capital, I mean do you have tight ties to the public markets? Because I know it's not like it was 20 years ago and everyone was rushing to public markets. Now there's a definitely different piece to get there. So you're saying how tied is it? How tight, how cyclical is Silicon Valley tied to the public markets?

Well, yeah, it makes us think. Well, our limited partners almost become a version of competition, especially if you have a growth fund, right?

Do you see the possibility for a second mega fund like that in the Valley, or do you think it's a one-off aberration?

Well, yeah, you see it because you know SoftBank's investment in WeWork and Uber at prices that people are saying are not sustainable. How much are they driving the unicorn market that we've been seeing?

Do you see what do you see differently about those companies once they take those growth funds or the traditional IPO money or the Vision Fund? I mean, do you see change in the operations or change in the culture at the board level of the company, or is it still very traditional, just trying to innovate and make a product that scales very quick, very fast?

How does when you start taking in money from more traditional capital market investors, and they come into the company, does it change how the board would operate if those people weren't involved?

Yeah. We have about five minutes left. Just in the future, where do you see this bull market finally ending?

No, I was there with you too.

Do you think the valuations starting to get out of control will be a sign that we're almost there?

So you don't see geopolitical forces causing or pushing us towards a recession? You think it's more gonna be the typical excesses in the marketplace?

War, war, yeah.

What about Brexit? Do you think it can have an effect on the US market if Britain can't figure it out?

Yeah, yeah. And what about the results of this trade war if it continues on with China? How do you see that affecting the US markets other than increased price of goods?

All right, well thank you so much for joining us this evening.

All right, now it's time for audience Q&A. Who's got a question for George? I want to form a line right here. Come on down and let's try and ask as many questions as possible. This is not a pitch event, by the way, so please no pitches or thinly veiled pitches. If you do pitch, it's unauthorized. We have an announcer enemy that's our balancer, so be careful.

Professor, go for it. You talked about Twitter and how social media has turned into a tiara with fake news and they sold our elections. Because you started social media, do you think it's your responsibility to fix it?

What about authentication?

Next question.

Hello. So a question regarding applied research whose business model from the point of view of a venture capital. Basically, let's say you come across some basic research that already has a very wide application field, artificial intelligence in this case, but I suppose that's generic. How would you recommend the leadership of the company approach that? Because you can always find some way to apply that research that may look very promising on the short term, but the truth is that if it has a very wide appeal, it is not clear at all how to move forward and make it available to such a huge market from the point of view of starting with a spoken.

Yeah.

Thank you very much.

Great. So going to Mars was mentioned, but you're not really in anymore in the biotech besides communication and imaging. Do you see the biotech market looking at new space for opportunities and innovation as well?

But do you see any of those biotech companies looking for doing their research in space or developing in space or factoring in space? Not necessarily going to Mars, but doing platform meaning like pharma companies?

This is from Western Digital. Can you comment about the sustainability aspect of your non-chicken, non-pork, non-beef solution? Meat is usually 15 times more resource intensive compared to vegetarian or vegan diets. So can you elaborate on that?

I was more interested in understanding the sustainability impact of it, in the sense how much more resource intensive your solution is compared to real meat.

I'm sorry, I didn't hear you.

Hi, my name is Georgie. I'm a director of products at Co Software, and probably a really interesting comment on vegetarianism and vegan. I'm trying to convert to be a vegan and it's been hard. So my question is about you made a really interesting comment about brain as a platform and tying it into AI. You also made some comments about ethics and how that influences your investment decisions. So I was trying to understand how that plays in the context of your investment decisions with respect to AI specifically, the role of ethics.

Thanks for your thoughts.

Hey, my name is Deep. Thanks so much. Years ago I used to run an innovation hub at Berkeley and Stanford in clean energy, like 12 years ago. Ever since then, I'm taking care of aging parents. I've spent nine years of my life dealing with cancer, dementia, diabetes, heart disease, osteoporosis, a bunch of different diseases. So I stuck my foot into this. As I read recently, you also were in their process when you decided to switch towards healthcare. Is your goal really to help the end patient who's sitting there in the hospital going, 'Oh my God, I have no idea what to do,' and to help them have a better experience and a better outcome? What's your why behind the switch? I'm really curious to know that.

Hi, I'm Annessa. I'm an engineer at Uber. I have two questions, and if you want to answer only one, that's cool. First one: do you think we should have any changes in our education system to meet the demands of how much we could do and for the next generation to actually have a happy and healthy life? The second question is: from your experience of running so many startups, what were the common qualities of those that were successful and not successful? Thank you.

Education.

Would that be on the government? How do we go about making it?

I'm very curious. I come from a brain-computer interface background. I did academic research for many, many years. And in the academic community, we are very amused by the amount of money that's being thrown at BCI companies that are making claims that are not justified by science at all, including Facebook, which was a huge joke, and I would even say Neuralink. Some of the things are completely unworkable, they're dangerous. So I'm curious, why do investors and smart people apparently keep throwing money at dumb ideas?

Yeah, I'm not disputing that. I mean, we all believe that brain-computer interfaces will happen. Most of the academics don't believe it'll happen in their lifetime. So it's a question of timing and making claims that can be backed by the state of science at that point in time.

Alright, next question.

Hey, George, thank you very much for your time today. Question for you. You said that you're pretty active sometimes unfortunately in letting go CEOs or startup CEOs. I would love to understand from you, when it comes to hiring an executive team, do you have any influence or do your colleagues have any influence in choosing the people that get hired?

I'm an aspiring marketing executive for a startup in the Valley. What are some of the qualities that you typically look for in top-line executives, and how do you influence the executive team to choose those qualities?

Thank you very much.

I hope I'm the last question. Oh my gosh. I was wondering if you had any experience with female-founded companies, all-female founded companies, and do you see a different pattern of leadership structure with them versus all-male founded companies? And if so, can you describe it? If not, can you list in priority order what your expectations are from a CEO and/or what hands-on skills you look for for a CEO in a company?

Can you describe your expectations from a CEO and their hands-on skills that you prefer to see? Like what would be number one, number two, number three?

Thank you. Yeah, all right, let's give it up for George and Jim. Ladies and gentlemen, stay in your seats. It's time for the raffle. This is the book 'Story 10x'. Has everyone who wanted to enter the raffle already done so? One, once, going twice. Here's your chance. Get this row right there. Out of George and we do the honors.

Amy, George is gonna do the honors. Oh, oh, come on, you late in the show. All right, a drumroll please. George is gonna do it.

And the winner is Kabil Lucre. Come on down.

All right, so ladies and gentlemen, the video will be on their YouTube channel, youtube.com/ideatoipo, within 48 hours. Stick around, network, socialize, connect. As a courtesy to Perkins Coie, we'd like to leave the building by 9 p.m. However, if you want to check out the after party, meet me at the Rosalee. It's Thursday night now. Set. Thanks for coming. See you next time.