“Harnessing Innovation and Globalization to Grow Your Business.”

without further ado I’d like to introduce a close friend of mine I combed the rabbit of CES if you’ve ever gone to see us in Las Vegas he’s been there before all of us even knew what CES is but he’ll introduce the rest of our panel my close friend shelly palmer thank you very much good evening good evening that’s so much better when everybody like does that that’s really good welcome thank you so much as if that was a lovely introduction and I it’s such a pleasure to be here I was I didn’t know anything about the organization until a few weeks back when he also sent me a note and the more I learned about it the more it made me smile just really extraordinary we’re going to have an interesting panel in a moment it’s going to be a Socratic discussion about life liberty in the pursuit of entrepreneurship before I bring the panel up which I will do in just a minute I’d like to level set for a second and what we’ll do after this little few minutes of level settings bring the panel up each panelist will self introduce make a short statement and then we’re going to go at it like good Jews and we’ll see how it happens um how many of you were at CES this year how many of you know it don’t know what CES is all right it goes like this consumer electronics show is brought to you by the Consumer Electronics Association which recently renamed themselves the consumer technology association figuring that consumer electronics were no longer meaningful they have expanded to a couple of million square feet with 20,000 new product announcements and about 3,500 exhibitors and they’ve taken over the entire city of Las Vegas sort of like locusts it’s just horrifyingly large but there’s an interesting pavilion under the sands convention center that they call eureka park that has grown so dramatically over the last few years that they needed to give it a million square feet of exhibit space and there were 500 basically ten by ten booths down there each of them from a start-up now there was something unique and interesting about these startups most of the people in those environments that little ten by ten booths had spent more money buying their plane tickets to Vegas getting their hotel rooms and paying CES then they spent to start their companies that is really important because if you will it to happen in 2016 it’s going to happen so ideas have never been cheaper and more useless executions never been more cheaper and more valuable and a combination of a great idea and great execution as always is the key to everything now as you walk through these 500 exhibits you got to see a very wide spectrum of people who had a lot of passion and belief and not a whole lot of brains and a lot of brains and technique and not a lot of passion and everything in the middle and I don’t think that there’s any one right formula I don’t think you can say that there is special alchemy that makes somebody a successful entrepreneur there are plenty of aphorisms and all kinds of Yoda like wisdom a lot of Ann Landers kind of sound bites sociology i could give you about you know inspiration and perspiration the end of the day we’re living in an accelerated time today is the slowest pace of change you will ever experience for the rest of your life we are in a curve of technological advancement that is now a step function going straight up somebody if you think of how to do it cheaper somebody is going to figure how to do it cheaper than you figured out how to do it if you figured out how to do it faster somebody’s gonna figure out to do with faster than you figured out how to do it the question isn’t about technique as much as it is about a team execution we are definitely in a time when we’re betting the jockeys not the horses and so to every person who’s in this room that is dreaming an entrepreneurial dream make sure you’re concentrating on the only thing that you have that no one else in the world possibly can have and that’s your Yiddish a cup it’s yours it’s your personal understanding so what you know it’s your domain expertise because everything else is commoditized i can buy better machine learning than anybody else i can buy cheaper machine learning i can buy better servers i can buy access to better servers i can buy math i can buy computer science i can’t buy passion and i can’t buy your special subject matter knowledge or special internal flame that says I’m going to make this happen and willing something to be in 2016 is the only way stuff will ever come to be and with that sort of level set about the times in which we live and the billet fun with JSON strings and if you don’t know what that is look it up let’s bring up the panel and let’s start to talk a little bit about entrepreneurship in 2016 and how to globalize your entrepreneurial

idea gentlemen come on up and join me so Howard if you just start the ball rolling by picking up great so Howard if you dumb so this is a little better power switches are always useful so I’m Howard Morgan I am a founding partner of first round capital and early-stage venture capital fund started in 2005 that has done about 350 investments ranging from ranging from things like uber which has done pretty well for us to a lot of e-commerce startups which we do less of today to high-tech things like MC equal high-speed databases and before before I started first round I was a college professor for 14 years at Cornell and Caltech and pen and after that I started Renaissance with jim simons so so we’ve been involved in quantitative investments and and I’ve gotten involved with a number of causes including the to a Children’s azeem and about on campus where I’m on the board and I really try to support entrepreneurship wherever I can Eric good evening my name is Eric serkan I just arrived today from California i’m here from israel I on a three-week trip I have a PhD out in chemical physics out of Berkeley and then after my degree I went and Tata niversity in Jerusalem their chemistry department for two years they went back to the valley where I started working at Xerox PARC in the early early 80s during what they call the golden era when never sleep everything you know today was invented laser printing Ethernet I work in the first season that implementation in the world and many other things my officemate was the event laser printer and two doors down for me where John Warnock and Chuck gasket the founders of Adobe and so I lived in the valley for over 30 years and after four years of Xerox went to my first startup which is called surround corporation I was employee seven it went public after about nine years and I left it for six and in the chip industry and then I changed the chip industry to the systems and networking industry in between I was the color printing industry when I back this is it went back to Xerox spent eight years at Apple I was an executive Apple then it was called Apple computer now it’s called apple and worked in mostly managing engineering organizations there and then after Apple I went to start up in the digital watermarking space we sort of technology to a Japanese company that used in the DVD standard for rights management and then I was drafted by symmetric capital firms I know in the valley to run engineering at one of the first internet companies call him to travel network we’re the first to travel booking and long before Travelocity expedia we took the company public a year after I got there and then we were purchased for a billion dollars by sabre holdings in two thousand and I was there for a couple years and then let took her peers off and start up a company my own that the mobile software space that we shut down after two years because we couldn’t monetize it so there are successes and failures in all of our lives and that was one of my failures but good entrepreneurs pick up the ball and they move forward and then I was then drafted by another venture capital firm to run engineering at a solar energy company and then after that I made my move to Jerusalem near kodesh and I live in Jerusalem been there for five and a half years I may I work about three days a week in Tel Aviv and I was mentioned one thing about what I’m doing I work I’m not working about side the fence if you will I work with a venture capital firm in Tel Aviv a small one called maverick ventures and I help them screen companies and evaluate the mall from a technology perspective and help manage them afterwards I’ve also started my own company of all well in Israel and reference to what someone said earlier about the the message from mom bond I’m very proud that the maverick venture is a dedicates two percent of its earnings to a charity called huts Allah if you’ve been Israel you familiar with the score ganization where all the partners were all very active and it’s all in one form or another and I also sit in the board of the lone soldier center and honor Michael Levine it helps Sloan soldiers not only from foreign countries but they’re about half the lone soldiers are actually Israelis and more elaborate more about that perhaps later okay my name is time Tokarski I companies cold doesn’t work nothing too good CNA

marketing in a business about 20 years about 13 years ago I parked it up with my partner who was my competition and if you’ve ever purchased if you purchase stuff on Amazon and a regular basis chances are I’ve made money on you so I saw on amazon ebay make a lot of stuff some things that people need some things that people don’t need but they buy it anyway all right and on that note let’s see a Socratic debate has to start with a Socratic premise so Apple had a record quarter in fact until alphabets earnings were announced today it was the highest-grossing quarter in American history but today alphabet which is google and other bets beat them best strategy for an entrepreneur right now figure out how you’re going to sell to Apple or Google Apple or Google immediately discuss Apple or Google or Facebook or Amazon actually the people you have to sell Ganga for the Ganga for they dominate everything I think that’s not necessarily the best strategy I don’t think so either but I just wanted to say something ridiculous oh well so I’ll the counter to that is first of all they have to they’ll put too much price pressure on you because if most of your business is selling to those big guys they have they can control you and they also can buy you whenever they want so and sometimes they pay well sometimes they don’t you really have to develop your own business with hopefully a lot of customers there are companies that do well with Amazon the the company that’s all with robotics stuff then got work for them by what from them from a billion dollars but unless you’re providing something that they’re really desperately need but you’re just competing with other people providing the same services or products they’re not necessarily the best customers app look at Apple does so much in China and they beat the margins really down for those people they provide giant volumes but I don’t think that’s a strategy I don’t having worked at Apple I only three of them a hundred percent I’m think of anything that they’re very difficult companies to sell to and they they will understand your margins better than you will and they’ll squeeze you every penny you’ve got and they’ll make it very difficult for you to conduct business overall unless you’ve gotten large by selling to other people first and then come to them that’s a strategy that can work Methos if you’re not selling on Amazon or to the big boys like Walmart you’re probably not in business so yes you do need those people but what you said was very correct don’t put all your eggs in one basket if you’re doing all your business just on amazon or just to a big retailer you’re putting yourself you may be doing very well but you’re putting yourself in a very exposed position so you really need to build yourself up slowly where they need you just as much as you need them frustratingly the month of january sonn no IPO at all no tech IPOs happen in the month of january so if I can’t sell to the Gang of Four cuz they’re going to bleed me dry and I can’t go public as clearly Wall Street hates me now what do I do discuss well first of all if you get your getting to the point where you in the old days would have done an IPO which means in the old days you did an IPO 850 million dollars in sales now if you don’t have a couple hundred million most of the bankers don’t want to talk to you that’s the result of a horrible miscalculation on the part of the regulator’s called decimal pricing where and it was a nice old game six we traded stocks they traded in eights there was twelve cents a share to share between the brokers so they wanted to trade more shares and they use that money that they made to do research in to help small companies now they get a tenth of a cent to share there’s no money to share and so they don’t care about small companies so if you’re a small company that you can’t go public and this was the first month there were no IPOs which was pretty dramatic yeah very dramatic very dramatic we we have 350 companies we had a bunch of exits but out of that we’ve had three I POS maybe four and we have two one that’s murd and almost all of our other exit 70 of them have been M&A activities mergers into companies and that is what you should expect as an exit if you’re an investor if you’re an entrepreneur and you want to grow your company you want to grow it to as large as you can but you may sometimes get to a point where you’ll be approached by other people and so you want your company to be bought you don’t want to sell it and the IPO which was the traditional way to do that is very hard so now if you want to sell it there’s private equity players but mostly there’s your competitors or co-op edition is the word people use you people you cooperate and compete with and you know align with some of them but

it is it is a sad state what’s happened to the IPO market it’s a little crazy I’ve got that that subtlety by the way is not subtle right you want to be bought you do not want to sell selling right now it’s all bad in every way that you can describe bad air give a position well you understand the differentiation you’re making between selling and and not but i would take a slightly different tact and this is something i learned for many years in the valley this is all about creating value it’s not about creating an exit investors want to see an exit you’re the entrepreneur your job is is regardless of the investors you take on is to create value and if you’re creating value and you find the market is going to pay for that value you’ve got a business and hopefully you figured out a way to make money and if you’re making money and your business is growing then going public or getting bought it’s a sideshow it’s irrelevant to your overall strategy of what you want to become and what you want to be so don’t focus on the exits don’t focus on getting bought or whatever our terminology want to use focus on creating a truly great company that creates a service or products that people need and they want to buy and that is what it’s all about Wow couldn’t sit that better just let me add for at to that second that when we see a slide in the in the deck with first rat first stage companies are presenting that talks about the exits it turns us off completely so we want them to be building a great company not worrying about the exit one of the hundreds want Britain I wouldn’t suggest there except was very true um you should run your company like you’re going to sell it from day one how would this company be sellable don’t sell it run it build it milk it and build it again and again and again if someone comes knocking on your door and that could happen and says I want your company because there’s something that you do that we can’t do ourselves fast enough or cheaper than buying your company will buy you but build your company in such a way that it is sellable it is marketable and even if you never sell it it’ll be a very successful company and the reason is is because if you’re just doing something that everybody else is doing you’re not really creating value you may be generating cash you may be generating profits temporarily or for a long term but if you don’t have any disel value proposition there’s nothing that you do that’s different that’s better that’s more efficient that’s actually creating value in the company intangible value then you should change your business change your strategy because then you’re actually building some real value in the company good advice all right been given two texts I don’t like that question I like this one ok so it’s CES this year one of the big story the buzz store was about virtual reality everybody who know what virtual reality is yes you’ve all seen oculus rift and you understand what Samsung Galaxy VR is good so the question is for our steam panel how do you think virtual reality will impact shopping experiences online not for a while not for quite a while I think I mean you know we’ve seen demonstrations of walking around virtual stores and picking up products it’ll it’ll have an impact but it’s the same way that people thought 3d was going to make a big impact when you could rotate models and pictures in 3d on on sales and we had a company in the 90s that the heck I was on used their technology to let you spin the things 3d virtual reality gets you further along that line I don’t I think for in the next few years very very little well I would agree i don’t think i think virtual realities got a way to go before it goes mainstream and people really start using it but there’s something called augmented reality and that’s here that’s now that’s real and there are commercial applications are being deployed and people are buying it and using it i’ll give you one maybe a couple examples of firms that came through the vc office i work with in tel aviv one is a company up in high feria that has augmented reality for furnitures so if you have a piece of furniture that you like you going to the store and they’re actually the sign contracts with three major furniture change here in the US you can select a piece of furniture and if you’ve taken a series of photographs properly taken in your living room for example you can place that piece of furniture exactly where you think you want it and you can see how it looks in respect to the rest of the furniture that’s a real application with real commercial has real value to end users and people are using and buying it and there other examples of augmented in landscaping industry and and many other things and those things are here they’re real today and people are using and buying them Microsoft has a technology if you haven’t seen it it’s called the hollow lens and it’s an AR

technology AR you can immediately see a hundred different billion dollar businesses a doctor would put on a pair of augmented reality glasses walk into a hospital room and see the patient’s vital signs right over the patient walk into a ward or NICU and every babies bassinet you look and you see one hundred percent of the right is a heads-up display the the technology is Sony’s got it out there right now it’s pretty spectacular just my own take on VR which you can go to shelly palmer calm and read about all to your heart’s content it’s really early days it’s spectacular for gaming the oculus rift gaming demos will stop your heart for vocational training it’s off the hook and when it comes to everything else narrative storytelling and the like virtual reality it’s super early days augmented reality is a much closer technology so I love these two questions these are two outstanding questions I don’t know which one to do first they’re both great here’s the first one how do you market a Yiddish a cup when competing with MBAs and other certifications that attract VCS I’ll take one get a checkup / 10 MBAs any day yeah ah what he said but but on the other hand give me 10 MBAs with you to Chicago yeah one is nothing to do with the other they’re people who are trained I have people who have PhDs degrees up to the that work for me and their expertise is learned it’s not something that I could just open up a book and learn it there is a place for PhDs and MBAs and all of that and there’s a very very strong need for it and then you need someone with the either she cooked around the business I have a slightly different take I really get go so the I believe in getting an MBA is not about what you learn about hoop but it’s about who you meet you go to the right mba program at the right school whether it’s Harvard Business School or Stanford or the Kellogg at Northwestern this is more about the people you meet the faculty you meet in the context you meet these places that benefit your businesses or whatever you decide to start later in your career the benefit more than what you learn I would I would offer to you that most of what you learn MBA program with your Yiddish acup you can learn on your own at home reading the right books at the right at your own pace and you could learn pretty much all of it on your own so that’s my take on that can I disagree with you yeah well actually I agree with you but there are there are certain disciplines that are very hard to learn on your own whether they engineering or just there are certain time but yeah our business no MBA ambient bit yeah b school basically glitter for YouTube wasteth right but i will say so first round did a study of the first 10 years of our investment and what factors perform better than other factors in how the companies did from an investment point of view and we found a bunch of interesting things one thing we found was that companies that had a female co-founder did sixty percent better the companies that were all male founders the little got a lot of press but it was quite interesting but the other thing we found was the companies that had one of the founders from one of the top colleges of kinda derek mentioned also did better not quite not sixty plane Feder I think of what the number was twenty or something percent better mainly because of the network they built not the knowledge they built but the fact is we’ve done companies where the founders have not even gone to college I mean and forget about the guys who dropped out of college because there’s only three of them if they’re Zukerberg those gates and there’s Dale after that I’d stand Steve Jobs so for but so 4 out of 4 it’s pretty decent house work four o’clock clearly the messages don’t go to school oh right so as bill girly said says he says okay now now show me the next thousand right right and next thousand aren’t there so going in school does does that does pay its dividends some of it through the knowledge particularly if it’s computer science to you know details or engineering details or accounting or finance details you don’t see a lot of accountants at deloitte who haven’t gone to college even though you can learn accounting without going to college but the network is who you’re going to hire from and that’s where the glacier cup helps to think of yiddish accomp Elms too because the inertia cop says who do I meet in shul I know Fred who’s a friend of a friend of a friend that knows somebody who might be useful it’s building that network that gets you the right people in your company that’s the most important thing I have a slightly different take on all this actually I the question is interestingly worded is how do you market a Yiddish a

cup when competing with MBAs and other certifications to attract VCS I’d argue the following everybody’s job is exactly the same on this planet every single person’s job in this room is the same it’s to translate the value of your intellectual property into wealth nobody hears lifting boxes for a living everybody is using their brain and they’re either renting it out to someone else or you’re using it to actually generate your own cash and so a yiddish a cup and my my definition there of the ability to understand who you are in the world around you in a way that others don’t see that’s part and parcel to translate in the value of your intellectual property into wealth and you have to make the decisions i’m going to use i have to clean this up in some way but if you built the death star you have a choice you can a rent it out or be go blow up some planets i usually say something else about blowing up planets but those are the two possibilities so if you built the Death Star do you rent it out because that’s a strategy or do you go blow up planets on your own and everyone gets to make that choice and that’s a choice that be school doesn’t help you with that I promise you but if your marketing yourself against b-school candidates or people who are out there in the real world chances are they’ve learned more from books and less from life chances are unless they’re late stage MBAs in which case their formidable components opponents but a formidable opponent is what makes you awesome like god bless every formidable opponent I’ve ever had in my life and the ones who’ve beaten me are the best ones I know and that’s the way I have to think about it and actually I think that’s a nice Yiddish a cup way to look at life now go gun thing versus own ink sometimes you could work for somebody and make more money than being in your own business so you’re not saying there’s a right way or wrong way i’m not taking yourself out it’s just how do you monetize that and for some people you can work and you could work somewhere to make a lot of money my eyes I am absolutely not in any way disagreeing with that statement I’m simply saying it’s a choice here’s a good question how does one approach an idea so big it would conservatively require a hundred million plus dollars and startup money before you could even show a proof of concept I can’t imagine anything that big but if you can how would you do it well if you’re Elon Musk and you’re going to build a car company you approach it by making 100 million first and putting it in yourself because finding a nice advice Howard final I festers who will do it is pretty is pretty hard yeah I won’t have much that I mean if you have that big idea you aren’t going to you just aren’t going to be able unless you’ve done it before I mean you’ve built you know from scratch a company that’s worth you know billions of dollars then maybe you got a shot at getting a lot of money early on from an investor but that’s the only possibility otherwise you’ll never get it I don’t think there’s such an idea even exists well yeah you have to wonder how they thought up fedex and demonstrated at hi i’m going to absolutely have it there by ten o’clock tomorrow morning all over the united states somebody had to build that Network right so you had to do a proof of concept at some point I can’t imagine how they actually convince someone to give them the amount of money they needed for fedex but it was a more naive time I guess I’ll mr. Fred Smith built fedex with his own money you didn’t go make a hundred-million-dollar right yeah there you go so that I stand corrected you need 100 million bucks whoever asked that question you need 100 million bucks go get it first let’s see oh this is nice where do you see the future of brick-and-mortar retail there is no clear straight answer but it’s in flux there is always going to be a need for brick-and-mortar always pick up for what you were online that’s for drones come on brick and mortar has changing dramatically if you look at best buy for example everybody thought that they were history and they’re making money they’ve changed their whole way of doing business by having stores within the stores and but basically you’re renting they’re renting out their space it becomes almost showroom like so that you know that if you really want to buy something online you really many times want to touch and feel the product even if you’re talking to the sales associate has no clue what he’s talking about you still want to go in there touch feel the product and sometimes even buy it on the spot and so brick and water will always always have some I’m form and some neat there will always be a case for it although in 10 years it will probably look very very different than what it is today very different and I think it depends on the product set I mean in the food space where investors in blue apron which is doing very well but you know people want to go to restaurants for social reasons so that’s a brick and mortar business that it’ll last in many others showrooming at that you mentioned is happening already

people go in and some of these smarter retailers like Prada give you have iPads now and you go in and you say look I saw this online and the first thing they do is give you an iPad and says okay this iPad will direct you to the rack that that particular dress is on so you can go and find it inside the store after you’ve actually done some of the previous prior work online but in terms of the mix between Commerce that’s et al vs brick-and-mortar there’s a long way to go before etail takes over brick and mortar however what amazon has done is kind of revolutionary which is when i want a piece of electronics today and it’s three o’clock in the afternoon and i go to amazon prime now it can be in my house at seven before I come home I could walked across Union Square and gone into best buy and picked it up but that would take me 20 minutes this way I spent five minutes online and when i get home it’s there so i don’t need the brick-and-mortar store for that for clothing that’s there’s a little and if we see dozens of technology startups that want to show you how they can fit you perfectly online none of them have really gotten there with with the coast i think you’re right there there’s actually a it’s very it’s very product lined dependent how many people here subscribe to diaper services online so the diaper business is about it’s at about 16 and a half or seventeen percent subscription now it’s a perfect subscription product because you kind of know exactly how big the child is going to be you can’t stock up on the wrong size you buy a certain amount kids use apparently six to eight diapers a day don’t ask me how I know that but I do here’s the thing diapers are the entire driver for Toys R Us diapers and formula that’s a gigantic retail driver you load up the minivan once a week on Thursday nights are going to grab all the diapers and formula you need for that week and next week you’re probably going to be in a different size if you’re not your half-size doubt you’re maybe going to blow one half a container that stuff they’re brutally expensive now you figure out what a quid z which is diapers now owned by amazon has done to that business which is the most affluent most electronically connected human beings in the world Millennials with babies never have to walk into a toys r us ever never have to walk into a drugstore never unless there’s an emergency where they find themselves in a very funny place they’ve taken feet across the door and dropped it by an entire group of Millennials connected Millennials so the question isn’t really how soon will um will that e-commerce st. you know beat brick-and-mortar the question is really what changes are about to occur what’s the white space that as an entrepreneur you can look at and say consumer behaviors are being changed at by empowered technologies right I have a quad-core computer in my pocket that’s connected broadband connected to a network and that empowers me to do certain things much more quickly and also allows me to do things in a more proactive way that is data-driven the data set becomes a currency and I’ve got a completely new value chain that’s been created right so the question about e-commerce to brick-and-mortar is much less about can you buy a suit online because you can if you know what you’re buying these blue shirts I’m on TV of four days a week makeup gets on the collar at a certain point it can’t come out i order these online from Brooks Brothers by like a dozen at a time it’s not that I I just know what size it is I know what it is I know it’s going to last for five weeks and then there’s nothing that can happen with the laundry that’s going to get the makeup off the collar so I never have to walk into a Brooks Brothers but years ago and I’m talking maybe only three years ago that I had to go in every few weeks and place the order could have done it by phone but it wasn’t in my mindset to do that it’s one button press so that consumer behavior change is the most important part it’s not whether the retail store lives or dies that’s not whether the e-commerce lives or dies as an entrepreneur your job is to find the white space in there and figure out what you can do about that behavior change because without the behavior change there is no there’s nothing there’s no opportunity with the behavior change there’s nothing but opportunity a last question that I have here is a great one how soon do you see IOT reaching critical mass with consumers Internet of Things I don’t use the Internet of Things internet of everything connected devices so i’m a bit jaded in this space because i lived through this once before the previous generation Apple when we were investing in home networks and devices connected and outside the home and the market never really took off I know there’s I mean I bought a flat in Tel Aviv and I’m now designing it and I’m automating elements of it and so I’ve invested a lot of time in

investigating what’s going on home automation now and so I think that there’s a lot happening in a home automation I think some of that’s going to be real and persist and take over certain sections of the market and there’s certain Nicias of Internet of Things but this I have to say I’m a bit skeptical about this grand market of Internet of Things being pervasive and happening because I’ve just seen it talked about so many times before that never really and it really fizzled out pretty quickly Eric what what do you mean are you talking George Jetsons house that we’re not going to see is that what you’re definitely how are you defining IOT in the what yeah so in a home automation space you know I talk with friends who’ve automated their homes and the ones who really invest in it I think most of them complained that they over invested it sure it was gross overkill they don’t use the eighty percent of the functionality and their children or their wives or their friends or or their husbands get confused and can’t figure how to use things half the time and the blinds go up the wrong time of the day and the Denver doesn’t work and and and because they able to call some programmer to come fix it and so they get mad and upset but extends beyond the home of course Internet of Things talks about you know factory automation and and I mean we I helped out a small the incubator group of guys that came out of the issuing of a time unit in the Army in Israel they had some ideas I feel those are stupid ideas let’s work on something more interesting and I help them work on a project for securing smart meters you know what the markets not quite fully taken off in smart meters but one day I will and that those things need to be secured and be be secured from hacking and so on so um I don’t know I I you that bearish on industrial internet and no no no there’s there’s a lot over to industrial industrial automation and the connected things in industry but you know people been talking about you know CRT screen or displays on top of refrigerator and heating things up the right way and wrong way for years and I don’t believe that some kind of stuff will ever happen I’ve here I’ll differ socratic Lee in a couple of ways first of all I agree on home automation I started investing in home automation in 1984 and then 1986 and you know it’s like the year of the network they were like 10 years but eventually it did happen my friend texted me when he I said this year was my 36th CES and my friend said also it must be your your ninth year of the network on your fourth year of VR because they’re just everything takes so long a home automation we have net I have six nests in my home and Villanova in Pennsylvania so when my wife drives down there now I can turn the heat on before she goes so there’s some uses the big thing I see right now for the next few years is in his Factory in industrial so I’m on John Deere technical advisory board we had a meeting the other day and one of the big notions was that the factory internal to the factory the amount of IOT is growing dramatically and really helping to streamline the movement of the stuff through the factory the prognostics on the machines all sorts of stuff like that and in the industrial I mean you all see the GE ads for you know measurement of engines and stuff that’s happening more and more we have an investment in israeli company called augury that measures with Johnson Controls heating and air conditioning systems anything with moving parts rotating parts so I think that’s happening pretty pretty soon I think the home automation will see if Mark Zuckerberg here this year mark zuckerberg said he wants to have his home fully automated with a I like Iron Man film like Jared the butler in the iron man film and he’s going to spend the year working on that and so he may get further than people have gotten before but that’s the real problem is not mark saying it it’s making it easy enough for my wife to use because she hates the technologies and she’ll use them when they’re really good tivo is the first thing that she really took to and we loved for television but home automation system she goes crazy when she can’t change the nasta when the power goes out and the nest goes down and it’s just it’s just very very tough I’m you have a position yeah I mean I’m trying to disagree with everybody but it’s for those of you of making products is very home automation i think is the next generation of opportunity if you’re making products or selling products it’s a huge opportunity i think what happened is is is that they went into overkill and people said oh I’m going to automate the whole thing from the blinds that are refrigerated to the and everything else which i think most of it is just it doesn’t work and people are really not interested in automating their life to that level but there is a balance over there and there are core things in home automation that are a huge opportunity today whether it’s security fire alarms there are those basics those basic things that people

want in their home today that if they can get their hands on it understand how to use it in a plug-and-play way it’s not over complicated where the technology doesn’t confuse them it’s a huge opportunity I mean who here wouldn’t want to know who’s at their front door if someone’s in the front of the front door without having to download or attach too many wires in your house if it’s some plugins play you want to have it if God forbid your house is on fire you want to know about it before you get home or before the neighbors see smoke and coming up coming out of the house but if it means that you have to now buy some sophisticated hardware and start wiring the place up and connecting apps and love to use the phones and tablets most people will give up at that point that’s true but there is a huge huge huge demand for very basic home automation like you put in a plug on that for rink on one of our companies that has a doorbell that sits outside with a camera and when somebody rings the doorbell it rings your iPhone you see you there it’s caught many burglars now it there it sits they they send the video of the police and say so-and-so is trying to break in so that’s a good I think one thing you have to think about with IOT or Internet of Things both industrial internet internet at home is that this is not going to play out the way you think it’s going to play out every single sensor that is made by Intel by AMD by Nvidia this there’s going to be so about 50 billion of them deployed over the next few years is going to go in something and the data sets that these create these endpoints are going to create data that’s actionable by marketers and actionable why entrepreneurs and it’s making that data actionable whether I don’t think George Jetsons house is a goal I don’t think there’s a consumer value proposition there but there certainly is in the sensors and the self-driving car lane on the Long Island Expressway there certainly is an industrial building where the building itself is made to come alive and take care of itself in an energy efficient way run its own security and then that data set is created so I think there are a lot of opportunities around IOT in in the sources and uses of the data the collecting of that data and I would not look so much to the oh I’m going to make George and Judy Jetsons house a reality because that no one has proven to Eric’s point has ever proven that that is something people actually want the doorbell thing is great ring has the thing there’s a company called Vivint just really quickly Vivint is another doorbell company they learn something at CEO they told me so they see us that made my whole CES work for me apparently Vivint it’s works the way ring works you press the doorbell there’s a app that opens up and you get a two-way conversation with whoever’s on the standing at your door turns out that little kids want to get their parents attention would go outside and ring the doorbell to get their parents on the nap to talk to them and I thought that was funny until I saw a video of a German Shepherd that had figured out that the kid can do it I can to the German Shepherd go outside and ring the doorbell in bark at the owner and I thought this is the funniest thing I’d ever seen in my life unac an unintended consequences of Technology I’d like to thank the panel a Howard Eric and hi I’m thank you all very much for being here this evening happy anniversary good evening everybody this is my second event and I had a phenomenal time do you guys agree let’s give them another round of applause this was a phenomenal phenomenal pal I like to thank my partner Yosef phenomenal job in terms of putting this together this was absolutely an event to to be here has everybody enjoyed the food drink camaraderie and networking all right are we looking forward to doing this again next year all right the windows are there but I would suggest that we build another room outside of the windows because I think it’s going to be very very packed here next year what do you guys think all right so on behalf of my partners at deloitte we thank you we thank you please as you think of entrepreneurship please think of delight once again please enjoy drinks will be here for a little bit longer thank you once again for coming take care everybody