Josh Elman Says Building a Company is Hypothesis Testing
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Josh Elman, Partner at Greylock Partners © Robert Wright/LDV Vision Summit
This fireside chat with Josh Elman of Greylock Partners and Evan Nisselson of LDV Capital took place at the 2016 LDV Vision Summit.
Evan: I'm honored to bring up our next guest, Josh Elman from Greylock Partners - come on up. Hey Josh.
Josh: Hey Evan, thank you.
Evan: Good afternoon. People are going to make pictures, make videos and there's a couple 360 cameras out there. We don't know what is going to happen.
Josh: Do you have drones flying around?
Evan: Yes. They're very silent drones. We talked to Bijan yesterday about Lily Robotics, which is the flying camera and all this kind of stuff. In your own words, what is Greylock's focus, size, stage, and what you're most focused on.
Josh: Greylock as a firm has been around 50 years. We're one of the oldest venture capital firms and we try to look for the same things. In companies we look for ourselves building and companies that are building enduring value that can really lay a foundation to be 50 year or more companies, and really build platforms of the future. We really get excited about companies that understand how to build great network effects. Whether they're consumer networks, where lots of people come together. Whether they're marketplaces, where lots of transactions happen. Whether they're data networks, where the company amasses so much data that creates a real advantage to create and sell more and more products, and we see that often.
We focus on consumer platforms. In the past we've involved in Facebook, LinkedIn, AirBnB, Pandora. On the enterprise side we've been involved in companies like Workday and Palo Alto networks, and AppDynamics. We're a billion dollar fund, we focus mostly on Series A and Series B investments, writing checks anywhere from $7 million up to $25 million or so, in a Series B. Or we take real board positions, we really roll up our sleeves and help.
All of my partners have worked at companies that have become very big, iconic companies in the past and gotten very large themselves, and have been very hands on, usually in product management or founder type roles, where they really are driving the actual strategy of the company. We really take a hands on, helpful position trying to help those companies become great and find their way through.
Evan: You worked at some bigger companies and really always focused in product and growth aspects of those companies, like Twitter, like LinkedIn, like Facebook. Tell us a little bit about the differences of those three, as an example, because most people here don't know what happens inside. What's the one nugget of difference between those three that you experienced as an employee there?
Josh: It's funny that you call them bigger companies because when I joined they were a lot smaller.
Evan: What size were they? What number were you there?
Josh: LinkedIn was about 15 people when I joined. Twitter was about 80 people when I joined. Facebook was about 500 when I joined.
Evan: I remember talking to my friend Constantine who was early at LinkedIn, we were having coffee and talking about our different startups, "Well, is yours going to work?," "I don't know. Is yours going to work?,” “I don't know." Fortunately LinkedIn was one of the ones that worked.
Josh: They figured out a lot. I'll start with the quick similarity between all three companies, LinkedIn, Facebook, and Twitter. We grew up in the era, LinkedIn was founded in 2002 ... Launched in 2003. Facebook 2004. Twitter 2007. This was an era when Google was the big dominate company. Everybody looked at Google as this massive, brilliant technology company that can make great technology that does everything important.
At Facebook, LinkedIn, and Twitter the whole thing was, we definitely thought of ourselves as technology companies, we're building new products and everything else, but in some ways we thought of ourselves not as technology companies. We were really just, we were more like human psychology companies, giving people new tools to connect. I almost joke, but we were just putting up forms that people filled out, then we took the information they submitted in the form and shared it with more people. There wasn't a lot of technology in the way that Google kept talking about technology back then.
That was sort of this amazing contrast, it was like they understand technology, but they don't understand people. We were going to build products that deeply understand people - that get the language right, that get the words right, that get the images, the faces, the right content so that when you're experiencing this product, you're experiencing the much more emotional human way, instead of just think you're talking to like a black box that's masterful in technology.
At Twitter, LinkedIn, and Twitter...we were more like human psychology companies, giving people new tools to connect.
-Josh Elman
Evan: As you were there, you threw things up, forms and content, and images here, but how did you know when a couple of them worked and to double down and triple down on those features? Even on the basis of a low level you put ten things up in the span of a month or two, and you said, "That one's it," because they're all trying to work on companies in the audience, or maybe half the folks in the audience.
Josh: We spent a ton of time looking at our data and really kind-of understanding. At LinkedIn we spend a lot of time on virality, at Twitter we spent a lot of time on retention, really understanding what was the overall conversion rates, was there retention behavior. The thing that I always love to remind people, I think is really important is, as I like to say, "Data is the plural of anecdote." You really can just be looking at all this data and talk about conversion rates and everything else, but you have to get to the meat of the underlying stories. You have to actually talk to users. We would talk to users all the time and say, "Why did you sign up? What made you want to do this? Why didn't you want to sign up?"
At LinkedIn we have a lot of people who didn't want to sign up because they thought LinkedIn was a job site and they didn't want to put their resume online. We ended up building up a whole jobs product so we could sort of say, "Hey we do have a job site too. It's a little bit of a business, but if you don't enter the jobs area, LinkedIn's still really valuable for you as a professional." The other thing we spent a lot of time was on language.
The whole way LinkedIn grew was I was send an invite to Evan, "Hey please come join my network on LinkedIn," and we'd have a bunch of language. If we had language that said like, "It will make both of our networks bigger." Then when Evan signed up for LinkedIn, he was more likely to invite more people. We were able to see a secondary viral effect that was even better just by tweaking the language that we put on the tactfully invitation.
© Robert Wright/LDV Vision Summit
Evan: How were you tracking though, because that was still earlier days, and still companies are struggling with how to track the actual 'one word is better than the next.' Were you guys hacking together stuff behind the scenes or was there actually a whole analytics platform, or flying blind with the blindfold on?
Josh: This was 2004. There were none of these analytics platforms or anything like it. We had a data warehouse, so every night the entire LinkedIn database was cloned into a data warehouse. Then the next day I could go in and tinker around the data warehouse-
Evan: What kind of tinkering? What kind of coding? What were you doing?
Josh: I was writing a bunch of SQL queries that were basically selecting the group that received invite A, versus invite B. Because we actually logged the entire chain - if I sent an email to an email address, I could then track what text they got, and then when they came and signed up - I could track their conversion rate and their behavior. I could join all these things.
I could actually test from the original invitation, how many people actually signed up and how many people then sent more invites. I could start to then go the second degree too. It started to get too complicated for my level of SQL knowledge. Now we have much more robust virality platforms. We were having to scratch and claw and make it up as went back then.
Evan: Before you joined there, did you know anything about SQL or did you think it was a kind of food from Europe? What's the deal? Did you just quickly teach yourself one day and say, "Hey we need this. We need this, and we don't have resources," and you did it, or what?
Josh: My first job was as a programmer. I worked on a product called RealPlayer that some of you might remember. Trust me, when I meet 22 year old founders these days and I say RealPlayer it's a total black stare.
Evan: I mention dial up waiting for an image for half an hour and they're like, "What?"
Josh: Yeah. Re-buffering video. I'd been a Windows programmer that was building the RealPlayer client and running the team doing that. I had a lot of coding experience, but I hadn't done much database work. Given that I had already been writing code and shipping software, picking up SQL to do the basic queries I was doing, was fine. As I said, I did kind of reach my limits and every once in awhile I would write an inner joint that they would come and yell at me for, for taking down the data warehouse.
Evan: We heard from Jack Levin yesterday talking about the first infrastructure employed at Google, and would press a couple buttons and the whole system would go down, and you had to take a bike to the office and go pull off the plugs and put them back in. So times have changed.
Josh: Yeah times have changed.
Evan: What did you learn ... First, it's easy to talk about the good things, sometimes we learn from the good things, sometimes we learn from the bad things. What's a mistake you really screwed up that you learned the most from at one of those early companies that surprised you but you learned the most from?
Josh: That's a great questions. One of the biggest mistakes in, and just one of the great learnings. I like to think of working these companies as you're constantly making experiments. Everything you do is an experiments. If you basically say, "We have a thesis and it's either going to work or not, and we're going to build this thing and we'll see what happens." That way I try not to think of it as a mistake because we went in with the thesis and we tested our thesis. Rather than, "I know this is going to work," and then when it doesn't work, you're disappointed.
Evan: It's that psychology again. Did you study psychology?
Josh: I actually did.
Evan: I knew it. It's a perspective.
Josh: I did this great program at Stanford called Symbolic Systems...
Evan: Okay. Now that makes sense.
Josh: Linguistics, psychology, computer science and philosophy. At Twitter, when I joined Twitter it was 2009 and Twitter had already been on Oprah and a bunch of people had heard of Twitter. We had this massive problem where every signup didn't stick around. We did a bunch of analysis, interviewed and called a bunch of users who had done stuff. One of the big things in the company was, we have to change the Twitter homepage. If we just make Twitter easier to understand when you show up on Twitter.com then it will grow so much better.
This was just this common thread in the company. I think it still is today. "If we just change the homepage, everyone will do it." The first project that I got started on, we rebuilt our onboarding flow. That actually worked really well. I got some credibility in the company, and they were like, "Oh, we can change things and actually make progress-"
Evan: “Josh actually knows what he's doing-”
Josh: I made a good guess and it worked. Then they were like, "The next thing, let's go make that homepage." We were like, "Let's go rebuild and design the homepage. Let's make it fresh with like new tweets coming in that show what's happening live. We'll show trends. We'll show all this stuff to make the Twitter homepage much more dynamic so you'll get a taste of Twitter," and this was replacing a page that had a big search box.
If you don't know how to use Twitter and the first thing you do is type something into a search box to search Twitter, that's probably the absolute worst way to try to figure out what the heck is going on on Twitter. We did all these changes. We made this page. It took us several weeks because we had to build a new algorithm that would surface the top tweets and build some editorial things, for instance, that we could immediately take something out if something inappropriate happened to show up, even if it was there.
Then we shipped it, and we actually did an AB test. We're like, "Okay. We'll ship it to half the users." It's very tricky to do AB tests on logged out pages because you just have to cookie people, but they might come from a different computer, but “we’ll try to do our best analysis.” We shipped it and it made zero difference. Literally what we learned or what I assumed that we learned is everyone who showed up to Twitter had so many preconceived notions of what it was about, that actually just clicking to go sign up and hopefully we could teach them through the signup flow made much more of an impact than whatever we put on the homepage. It turned out as we kept doing more testing, just removing all options except for login and signup, actually performed mildly better than everything else-
Evan: Because you hooked them in.
Josh: Well, by not giving them any other ways to click and then get lost, and then go away. It just turned out literally by not adding any features to the page, but adding nothing was by far the best. For a while, again, I've been gone from the company five years and they keep testing this stuff, but for a long time the Twitter home page was basically like type in your email address and password if you're logging in, or first name, last name, and email address to signup. That was it. It turned out that everything else was distracting.
Evan: Regarding that philosophy and testing, that psychology of not everything's going to be perfect - keep on testing. How does that then transition to your mentality with companies that you've invested in early, and come to you and or have board meetings, "This is working, that's not working," and obviously there's some tension there. "What are we going to do? Where are we going to go? Is this going to happen or is it not?" How do you work with them with your deep knowledge on the product side to help the business get to where everybody wants to go?
Josh: It's funny. We think of investing very similar to this philosophy. We think of company building the same way. Reed Hoffman, who founded LinkedIn is now my partner at Greylock. I remember a conversation he and I had in 2004 where I was like, "Explain to me financing and how that works." He said, "Look, it's a series of hypothesis testing. What you do is you raise enough money to go challenge this set of assumptions, and try to see if they're true or not. If you mostly provide them true, we can build a product and people will use it a little bit, and maybe they will share it with friends, then you go test the next set of assumptions. Which is ‘can we build more features or more things that will help them use it more?’ Then you raise more money to go do that and if that works, then you turn it into a business. Then you raise a bunch more money to turn it into a business."
He says the entire process of building a company is a set of hypothesis testing. We very much keep that philosophy at Greylock. When we make an investment we're not like, "This better work. If this doesn't work we're going to fire you as a CEO and we're going to remove funding from your company." It just wouldn't work that way. It's like we're ready to join the journey and we're excited for the next hypothesis and we're giving you this much capital right now in order to go try to prove it. If we get towards the end of that amount of capital and we haven't proven enough of our assumptions we should rethink what we do with what you've built, with your own career, with where you're going.
If, by the way, we've proved them faster, we should go raise more money and get a lot more aggressive to keep going to prove them. It has been a couple of years now, and I've already gotten to see both sides of that journey. It's incredible. We just keep it as this testing. It's never failure. It's are we testing enough and at some point you may decide that with this cap table and this amount of money, and this set of people that you've hired on this journey, maybe that's enough to try something new and keep going, or maybe it's time to rethink things-
The entire process of building a company is a set of hypothesis testing. We very much like that philosophy at Greylock. When we make an investment...it's like we're ready to join the journey and we're excited for the next hypothesis and we're giving you this much capital right now in order to go try to prove it.
-Josh Elman
Evan: There's a hard question I want to ask and it's tough to pinpoint, but actionable. Some of the ones that are doing great, fantastic. They're doing their thing and they have the secret sauce, whatever it is. The ones that are not, are the harder ones on both sides. It's kind of like, if you failed once and you've learned - great, if you failed twice and you learned - okay, you might still have potential, but if you failed three, four, five, and six times it becomes a potentially negative trend.
If you do the hypothesis that doesn't work for four, or five, six times, is there coaching from your experience to them because you look at network effects that you've got experience in it. Give us an example of things that you said that you thought was going to work with them three, or four, or five times, and it either never did or that one thing came out of nowhere just from the story behind the scenes to give people a flavor of doubling down and tripling down. How many times can I fail before I give up?
Josh: Look, you guys might know I invest in a company called Houseparty (previously known as Meerkat) just over a year ago, I invested right before Southwest Southwest. I'd been doing live video since real networks and I believed they were just in a world where mobile live video was about to happen, where everyone in this room could whip out their phone and be broadcasting live video immediately.
I'd met Ben Rudman, who by the way, Houseparty was already the third product of that company because he had started it several years before and built a team in Israel that said, "We're going to build something really important for live video that we think is going to be amazing." I had gotten to know him and we'd share a lot of ideas on live video and when Houseparty kind of popped late February, early March of 2015, I was like, "Look Ben I'm really excited. This may be the moment in time where the phones and the network capacity can handle it, where we go do this." I had also known that Twitter had bought Periscope, a different live video company, and they hadn't announced that yet or launched it, but I knew about that and I said, "But I'm still going to go back you and this is going to be such a big pie that we're going to go figure out what our share of it is along with Twitter."
Fast forward four or five months, Houseparty was actually doing reasonably well versus Twitter. I think Twitter was ahead and Periscope was growing a little bit faster than Houseparty but we were holding our own. Then Facebook comes out and say, "We're going to do live video now within our network. Any body who's got a celebrity or an audience on Facebook can just go live and go to their whole audience." We were like, "Oh man. I know we can maybe compete against Twitter and that's hard. But competing against Twitter and Facebook, and really, just competing against Facebook really hard. Right?" Facebook was like, "Oh let's go live," and four billion people just show up immediately.
Evan: That's kind of challenging to deal with.
Josh: Live video is much more about the intimacy and the authentic nature. Part of the reason that we're all here is to have a much more authentic experience. When we're in the moment versus somebody can watch later. It's not just about numbers, but numbers do help. We learned that through that experience. We said, "Okay. This Houseparty thing, trying to compete against broadcast live video may not be the thing."
The team has really hunkered down and is working on something new again. We're seeing some really interesting, early positive stuff. What they're doing is much more around group social video. It's really exciting to kind of see they just keep taking cracks at it and the nice part was we all gave them enough capital to be in a great syndicate to join. Enough capital to really go try to prove the future of live video.
It wasn't just a bet that Houseparty must work or bust, it was a bet that Ben and the great team that he's built at the company, the company's actually called Life On Air, because it's about how to you live your life on air. That company is going to go produce something great. I'm still excited, but they also have a runway. At some point the capital that even we gave them might run out. If we don't have ourselves in a position where this company's worth a lot more capital, then we'll figure out what the right thing to do with the company is.
Evan: Cool. Relating to Houseparty, but also probably Jelly and several other companies that you've invested in - we started our pre-interview chat online about a couple weeks ago with a lot photographs of your face which related to the title, because you think faces are the key to social platforms. I thought that resonated with this audience and with this topic. Tell us a little bit more about why is faces is the most valuable part of social platforms?
Josh: We did these eye tests and heat map eye tests of Facebook and Twitter back seven or eight years ago. You could immediately see, just as humans we're programed to recognize a face and the shape of it, almost as babies. You could just see as people go read a Facebook feed when there's faces as the profile icon, people's eyes immediately gravitate towards that and then read the content. Then they go to the next one and then read the content. That's a really important thing.
When you're reading a set of content on Facebook or Twitter, you may not realize it but you're reading the name and identity of the person and then what they say. Then the name and identity of the next person and then what they say. That's what creates this very conversational, very human nature of the whole experience. That is very, very hard to replace. There's other content platforms where the name and identity isn't important. You can go to some of the anonymous platforms like at Yik Yak, and you realize that's just content there's no names or faces, and you actually read it very, very differently than when you're reading stuff on Twitter or Facebook, because those faces are just so key.
That identity is really what keeps people there. I meet people that I have been following on Twitter for a long time and I've seen these words next to their face for a long time and I feel like we really know each other. We're just having this dialog in conversation tied to their face. Then you look at Snapchat which came out more recently, and it was like the quintessential version of the face. It was like the most authentic faces. People make funny faces and awkward faces and faces before they've cleaned themselves up in the morning-
Evan: Which of those faces drive more traffic? That's interesting because the facial recognition, a lot of the computer vision we've discussed yesterday and today and in this sector. At what point can almost the algorithms start delivering on what we understand about sentiment analysis, and about what the face is doing? What the personality of the person with the face is doing?
Josh: It's interesting, the things that we've seen that drive the most traffic are when the face changes.
Evan: You mean in animation or over time?
Josh: No, over time. Actually like when you change your profile picture the single biggest way to get more clicks to your profile, or have more people looking at it, or actually getting your content get more likes and getting more comments is actually to change the profile picture, because all of a sudden we get used to seeing you look the same way in conversation. When you actually change it that's actually the biggest single trigger to doing it.
If you want to just take this trick and go get a bunch more likes or comments or retweets, or whatever social platform you're using, go and change your profile picture like every week or so. You'll be surprised at like, "Whoa, that really works?" When you get a new haircut and everybody that knows you like, "Nice, new haircut." It's exactly the same philosophy to do that.
© Robert Wright/LDV Vision Summit
Evan: I'm sure you can probably test also the type of comments you get if you put an unhappy face or depressed face, versus a laughing face. We've talked about some deals you've already done and towards the end of last year, you wrote about four or five topics that that you were interested in. For the audience's sake it was: live conversations, interests groups, better self expression, preserving all the that content we make, VR/AR. Now, you can imagine in additional to begin a great guy and a smart operator and investor, you are very focused opportunities that relate to everything in this space. Would you have add any to that list since that last five months, that is the newest, and latest, and greatest?
Josh: I think all these are really important, because I think we are more connected than we've ever been to people around us. Yet, I think we are somewhat less fulfilled by that than we've been in a long time. I feel like Facebook and Instagram and Twitter have gotten us so good at shouting at each other, even Snapchat stories to some sense, where you are looking at each other in their best moments when you're bored on the couch, or late at night, or in bed. We're not having as many intimate real experiences. A lot of the stuff around connecting people around the interest groups, connecting people on more live moments or live conversation is really about creating these much more human interactions about the stuff we care about that happens. That kind of is much more enriching versus seeing somebody else have a great time at a party and the time that you're really looking at that is when you're not having a great time, because that's when you have time to look at your phone.
I think there's a lot that's going to happen there. I think all of that is still stuff that I'm looking for, because we haven't seen anything really transform or break out. I'm also getting more excited about the Lily and some of the connected camera stuff that we're really about to see. I think we're moving in a world now where we're so used to having a phone in our pocket, but that's also still one too many steps. Pervasive cameras, and cameras that can get at brand new perspective we never could do-
Evan: So internet of eyes?
Josh: I love your phrasing on the internet of eyes. Have you guys seen the hover camera, which is a new demo and it will come live sometime soon? Watching that video it was like an actual camera that we would feel comfortable in here looking at and having it get a new perspective that we could never do without really expensive equipment.
Evan: Whether or not we're all going to have our personal flying cameras hovering outside, waiting for us to leave to follow us - it could be a good thing and a bad thing. It's a little odd. It’s almost like a parking lot of flying Lilys waiting for us.
Josh: I think it's really interesting. We talked about that, wouldn't it be great if they were silent. The problem with physics is it's actually still really hard to lift a piece of equipment and have it be silent. I think it's also hard to have a camera and a computer and all this stuff, with enough battery life that we don't worry about it crashing on our heads. I think we're a little bit away before it feels like something that we're like comfortable with around all the time.
I think we're going to start seeing us wanting many more moments captured so that we can actually be in the moment. The whole problem with the camera is you either do it with a tripod or you're never actually in the moment. Growing up there's like three pictures with my dad, because he was the family photographer. I think that's going to be a big trend.
Evan: One of the things that I would love is basically, you came from California, flew here, you went to the airport and took whatever transportation, you walked across town or do whatever, there were a thousand cameras that you passed. You don't control the access of that content, but what if you could? If it was say, "Oh Josh arrived here. These are three pictures. Do you want them?" Or they should be sent to you as a service. That identity tracking people look at internet of eyes sometimes negatively, sometimes positively. That's the positive side. I think we are in many places but why do we have to make a picture or have somebody else? There are pictures being captured which have value.
Josh: I think that's a great point. I think as we move into this world, at some level there's a massive debate about privacy but I think the reality is it's always this trade off between privacy and convenience. Or privacy and conductivity.
Evan: Isn't privacy dead?
Josh: At some level privacy is dead.
Evan: At most levels. It's pretty much dead.
Josh: In the United States I feel comfortable saying, "Look, there really isn't anything I'm doing that is so private that I worry about being used against me." I do respect that people from other environments and even in the political environment we may be entering here, people may actually get a lot more worried about actually the things that are naturally doing could be used against you. I don't think privacy and encryption is going to be dead until we really live in a world where we don't have governments or other criminal activity that can really-
Evan: That's always going to exist unfortunately. I mean I'm a very private person with many things and there are other aspects that I'm very public. We're here on stage and we're very social in sharing views online. There's aspects that I want to be private. I still believe because of the growth in technology and the evolution what's going on, privacy to what we know it is definitely dead.
Josh: I think it's fair to say that the expectation of true privacy in anything we do is pretty much dead.
I think there's a really important thing which is I think it's sort of like obfuscation is going to be the key. I don't really share much about the fact that I have a child on Twitter. If you really follow me on Twitter, you could barely detect that I have a kid, but if you follow me on Facebook or on Snapchat I'm very public on those platforms about my kid. I actually think we're going to get much more into selective sharing, and I think we're going to see a lot more happen.
Evan: That's a great question. Let's get the guys with the mics. We are going to start having questions. We have about seven minutes left, so anybody has questions raise their hand in a second. Regarding that question of sharing, you specifically said you don't share photos of your kid or talk about it on Twitter. Where do you like to share what photos? Do you have a mental filter or is it just a natural process that's evolved? What do you share on Snapchat versus Twitter?
Josh: On Twitter having worked at the company and sort of having lived this slightly more public life, I love talking about everything that goes on in technology that comes to my mind. I love talking about things around sports. I'm a huge Seattle Seahawks fan.
Evan: That's Twitter or is that Snapchat, or both?
Josh: This is mostly Twitter because I find that that's where I get the most engaging conversations around topics of technology and that, and a little bit of politics, and a little bit of world things that are happening. On Facebook and on Snapchat I'm much more creative about who my friends are and the people that I'm sharing with. I just share much more about life. Sometimes it's a little bit about work, but a lot of times it's more about my personal life and family. My mom likes just about everything I ever post on Facebook.
Evan: That's a good thing.
Josh: That's great thing.
Evan: If she didn't does it upset you?
Josh: No. Sometimes. She doesn't need to like everything that quickly.
Evan: That's a sensitive issue? Why did you not see it, did you not like it enough? Do you ask her?
Josh: No. It's just like “okay do other things other than Facebook all the time waiting for me to post.”
Evan: She's waiting for you. She wants to live vicariously your life.
Josh: I do think about, I just try to share real life there and on Twitter I just don't feel as comfortable living normal life publicly. Sometimes we all have our first world problems that we occasionally whine about. It's fun to do that with the right group of friends and it's embarrassing to do that on Twitter when everybody yells at you for like, "Why are you complaining about your Uber going too slow?"
Evan: Questions. Who's first? Over here, Rick. Who's got a mic? Okay. Go first.
Audience Question 1: Hi, Rick Smolan. I thought that LinkedIn's purchase of Lynda.com was brilliant. I was on an airplane the other day and you can spend six hours now learning Photoshop or whatever you want. I'm curious to how that decision was made? Likewise, all of a sudden LinkedIn's share price dropped in half on one day, which terrified the whole market. I'm just curious, it seemed to me that the opposite should have happened after Lynda.com, just curious if you could talk about those two?
Josh: Yeah. I'm not involved in LinkedIn other than being partners at Greylock with the founder - I'm just a shareholder. These comments are totally not associated with the company at all. LinkedIn from the very beginning was how do we actually help your professional life? We talked about this in 2004, in fact when I was there, it was how do we help you be a better professional? Obviously one of the ways was give you access to your network and give you access to your network's network, so you can actually reach people in a way that you didn't need it. Especially if you're talking about the hiring views case, we spent a lot of time talking about the expertise views case. If I want to find somebody who is an expert in Photoshop or is an expert in privacy, or is an expert in the legality of something, we really wanted LinkedIn to be the place you could do that.
As they've gotten more into empowering the economic development of everybody, they realized that giving you the platform to learn and create skills were incredibly important. Lynda, by far, was the leading platform. They had created so much great content. Had so many educational ways to create great skills. LinkedIn just saw it as move forward and trying to help professionals be better - they saw that as a great fit. I think so far, I hope, it's been working really well for them. I think that the future of a platform where LinkedIn knows more about me as a professional than anywhere else, it can really help be be even better, I think is going to be great.
In terms of the share price, I think the stock markets and the innovation that's happening at companies is sometimes out of whack, and doesn't always understand. It's LinkedIn's job to keep building a great business, and prove it.
Evan: The next one's over here.
© Robert Wright/LDV Vision Summit
Audience Question 2: Hi Josh. Adaora, Rothenberg Ventures. I'm just wondering about what your thoughts are on what some consider the VR/AR hype and what others don't?
Evan: Good question.
Josh: If you were to ask me in five years will everybody have a VR experience on a frequent basis, that's weekly or a couple times a month, or will AR be something that will be much more pervasive? I think the answer to that is probably, yes. I'd be really surprised if it's not. If you ask me if that's in two years. I don't know. I think VR is a great entertainment experience right now, but I haven't been comfortable in there where I've wanted to stay in for a long time. I think there's a lot of physical technology improvement still to happen. Let alone all the content and great experiencing to get created. I think we're over hyped in the short term, but probably not over hyped in the long term. Sort of in the same way the internet was in 1999. It was like, yes all these things will happen online. It will be incredible, but it might not happen in two years.
Evan: Which is one of the biggest challenges as an investor isn't it? When to invest in those people?
Josh: That's the thing. We've made I think one stealth VR investment. Our theory is small teams building things that can be really core building blocks that as it emerges can sort of scale up with it, gets us really much more excited that a bunch of companies that are spending a heck of a lot of money right now to build all the demos and everything else. I, by the way, think most of the way that most people are going to experience VR is going to be outside their own home over the next year and a half or two years. Very few people have the devices, but you'll go over to your friends house. I think even more there's going to be a lot physical locations you'll be able to go to that will become fun, kind of like what arcades used to be. Then in a few years it will get back into all of our homes.
Evan: Good analogy.
Audience Question 3: Josh, we in the media this spring really like to write about bots. What's it going to take for bots to go from hype to something that actually is relevant for people?
Josh: I think that's a great question about bots. We love talking about VR and bots because we know that they're new thing that are really important, and yet the number of hours people spend in messaging apps is going up exponentially every single year. Right now we're all really good at talking to our friends, and the first time that I want to talk to a friend now I don't think about phone calling them. I think about messaging them, and getting a message back. Yet, when we want to talk to businesses, we want to talk about information elsewhere you kind of have to call a business or go to their website or something else. Where actually messaging actually is often the best interface.
I think we still are confused about bots. Right now the (neuro-linguistic programming) NLP isn't quite there. We have very high expectations that if we say something, we expect a human on the other side to understand it and respond back. NLP is close but not quite there. None of these experiences are great and you start to learn this very cryptic language to interact with your bot. I think we are a few years out on bots being natural to represent everything. I think in the shorter term, we're going to see all this business behavior, all the phone (interactive voice response) IVR trees, press one for this, press two for this, way better done in a bot. Just open up messenger, type in the name of the business like Comcast, go through the exact phone tree, and you can actually everything do much faster than you could sitting on the phone.
I think we're going to see all of that happen in the short term. I also think we are going to see bots that are content delivery, whether it's your shipment just got mailed or a daily newsletter, or a breaking news alert pushed into your messaging, because that's where you are spending all your time and where you're doing all your content. The interactive bots I think are going to take a little bit longer to play out. I do think that much shorter term we're going to do a lot more in messaging than just message friends.
Evan: All right a couple last question to end off. These are fun and challenging questions. Why do most entrepreneurs not succeed?
Josh: Because it's really, really, really hard to take a great idea, a great group of people, build it, hit the right market at the right time and get it in the hands. You have to think of it, instead of why don't most succeed, how the hell do the couple that really do, really succeed. It's so much luck and you can do all this hard work and get in a great position, and if you don't also get lucky at the same time to capitalize on all that hard work you've done, it's just doesn't happen. It doesn't always happen.
Evan: I didn't mean to be negative, but both of those is the right ways to look at it in relating to that, one of the questions I love asking all investors, because it's actionable I think for the audience. You speak to a lot of entrepreneurs, your favorite personality trait of an entrepreneur - one word answer and your hated personality trait of an entrepreneur - one word answer.
Josh: We're in a Vision Summit, so the number one word I would use is vision. Just somebody who can paint this picture of a world five years from now and just get me excited and intoxicated about that. The other word I like to use, I'll give you two, is learner. Somebody's who's constantly learning and processing new information and coming up with new theories on the world. The most hated, arrogant trait is, what's a non-listener. Somebody who doesn't listen and learn and interact that way.
Evan: Mine would be, as I said yesterday, passion and actually for me it's selfish. A CEO that's selfish. Some may like that because they're going to do it no matter what, but if they're not a team player and thinking about the whole ecosystem I think they're deemed to fail. Josh thank you very much. This is fantastic.
Josh: Thank you everybody. It's a pleasure.