Visiting Building 43
A few weeks ago, Scoble was in NYC and we had breakfast at his hotel. After breakfast, he asked me if he could ask me some questions on camera. I said sure and we found a room off of the main lobby and did this interview. I don't think he edited it. And I think it still came out great. It's long (22 mins). I sure wish there was a transcript but I don't think there is one.
UPDATE: PhoneTag has an api and they used it to transcribe this. Wow. This is awesome. Here's the transcript:
Robert: So, who are you?
Fred: I'm Fred Wilson.
Robert: And one thing I've been getting around and talking people about is the 2010 Web which some people call Web 3 but, I think, I just don't like the term.
Robert: Web 2.0 or Web 3.0. I think…
Fred: Me neither.
Robert: They explain times in the web, you know, the 1994 Web was about getting a web page. In 2001, it was about adding people and interactivity to those pages. And the 2010 Web is…
Fred: Well, I think, it's real time, for sure. I think it's distributed in the sense that things are going to happen outside of where they start, the whole concept of sort of apps on the iPhone or apps on Facebook or Twitter apps, big part of what's going on now that's going to go mainstream. You know, the way you experience Twitter is through FriendFeed and that's not an entirely obvious thing to most people that, you know, they can use one service through another service and then maybe another service on top of that. And I think that's all part of the 2010 Web. I think games, not so much playing games because we all play games on the Web but, it started to take the notion of what is playing a game and bring it in to more Web services, the notions of virtual currencies and establishing status and just creating game play dynamic inside of services.
Robert: You're talking about Tumblr right?
Robert: The Tumblrity…
Fred: Yes, the Tumblrs are this thing called Tumblrity which is recognizing that just the number of followers isn't really what matters inside a social system. It's a combination of how many people following you and how many people really engaged with you and how many people click on a link that you send around or how many people reply or how many people resend stuff. And what Tumblr is going to say, it built an algorithm that sort of captures all that they've established Tumblrity. It's also how often you actually create content in the system. And so people have gone crazy over Tumblrity. Everybody wants to know what their Tumblrity is. They want to make it better, you know. It created some competitive juices and that's essentially a game. It's not to suggest that Tumblr isn't more than a game, it is more than a game but being that it is really, I think, self-reinforcing game play dynamic. So, I think that is a big part of the 2010 Web. And then, also, you know, the ability, virtual currencies, I think. Maybe that's too big of a word, but Facebook's launching a payment system. And you know, I think, a number of people have written that Twitter should have a payment system. I mean, I've often thought like, if I can say The Scobalizer, you know, and send you a message, why can't I say, (P?) Scobalizer $100?
Robert: You can do that anytime you want.
Fred: Anytime, but, you know, so we could maybe, start getting accounts in these social systems that, maybe get some value, accretion from what we do in the system and also allow us to use as accounts to move money around much in the way that people do this already in Second Life and people will start doing it in Facebook. People already do it in Facebook games. So, these are all the kind of things that I think…Mobile is another big part of the 2010 Web. I don't know if this is true, but, I heard that the 40404 shortcode is the most used shortcode in the United States now.
Robert: Yeah, that's Twitter's shortcode, right?
Fred: Yes, Twitter's shortcode. And if that's true, it's a big deal and I think it shows the power of mobile and Web being connected natively. I pull up my phone, I Twit something, you see it on the Web or you see it in front of you which is also on the Web, or you see it in Twit Deck. And that's a very seamless experience between mobile and Web and desktop. And TV obviously should be another piece of that. And so, that's all…
Robert: Now, we just had Adobe and they're showing up the new Flash Player that does 1080p Video.
Robert: And so, now, you can do a video with a camera like this one and distribute it to iPhones, distribute it to 60-inch TVs and it's (Boxy?) users.
Fred: I'm a huge fan of the TV as… You know, no, the third screen, right. So it's the desktop or Web top, the mobile phone and the TV in the family living room, and we've all known that, but it hasn't really happened. We're still watching more video on our laptops. And we, being geeks, still watch… I'm a geek. Are you a geek?
Fred: More video on our laptops than we do on our TVs and that I think is going to change. But, the thing I really want is… you know, how there's a Delicious Firefox plugin, so whenever you see a Web page, you can just hit your Delicious plugin and it just go… that your (apps?) gets posted on a map into Delicious. What I want is a video plugin, right, where I have a little thing on my browser, anytime you e-mail me a link and I see it in Gmail or you pass a link to me in Friend Feed or Twitter, or I see a link in Facebook, or I come across a video, I just want to bookmark it. But what… I really want to bookmark it. I want to queue it. And then, after I get home at night, after the kids, dinner with the kids and homework, that hour-long time that I have where I sort of lean back, linear video, I just want to go to my queue which I've built up over the past day or two and just boom, sit back and watch linear video, watch this video, and then the next thing is some funny clip somebody saw me and then go watch Charlie Rose and, you know…
Robert: It seems, yeah, I was driving and I just picked up my son… Marian was driving actually one day on a Sunday and it was during one of the golf tournaments. And Twitter was going nuts about Tiger Woods, right. Tiger just made the most amazing shot we've ever seen.
Robert: I was just…hundreds of them, right, you know. And so, that told me that there was something really interesting on TV but I couldn't watch TV right then. I wanted to click a button and save…
Fred: Save that for me.
Robert: And save that for me and bind that moment because I don't want to watch the whole two-hour tournament.
Robert: I just wanted to see that shot, you know. It's sort of like the nightly news, you know. And it's really hard to do that, driving and so…
Fred: And I think when we do that, when we create services like that with Microchunk Video that allow us to essentially queue up that video. I mean, you know, we've seen a little bit with TiVo remote, right. Like you can hear about something and through TiVo you can somehow log on to the Web and tell your TiVo to record it but that's way, way too hard, right. You know, we need to be as simple as your seeing Tiger Woods hit an amazing shot in your Twitter feed and you need to be able to do something right then and there. Maybe through a Twitter and that goes and grabs that thing and puts it into some queue that later on at night, you can sit back and there it's going to be for you. When that happens, I think, video on the Web is going to take off big time.
Robert: So, you've been investing in all sorts of interesting stuff at Twitter and Bit.ly, right? And the…
Fred: I'm not an investor in Bit.ly but I'm a big of the guys who did Bit.ly. That was John Borthwick and Andy Weissman of Betaworks.
Robert: How did you get involved with Twitter?
Fred: I was using it and…
Robert: You chased them. I saw you on the blog.
Fred: Yeah, yeah. What happened was, I was using it and Ev wrote a post on his blog, this is why you got to read blogs. Ev wrote a post on his blog that said, we are going to spin Twitter out of Obvious Corporation. Obvious was the successor to Odeo and I happened to be in San Francisco. I called Ev, he said, yeah, you know, I was coming to talk about it. It turned out I couldn't come in that day. Our schedules didn't work. I flew back to New York. I sat down with my partner, I said, you know, we should make this investment. So, at that time, it was just the two of us. We now have a third partner, Albert, but at that time, it was just Brad and myself. The next week we flew out there. We had a two-hour meeting with Jack and Ev. We basically convinced them that we were good guys. We came back, I called Ev. I said, what do you think? He said, we liked you. I said, can I send you a term sheet? He said, yes. I sent him a term sheet. He called me back the next day. He said, I think we can do this. We did the deal.
Robert: Where do you think, I could spend a whole lot in two hours just typing on my Twitter. For regular businesses on the street, you know, a restaurant, a bike shop or a small manufacturing company. How do you think they're going to use the real time, the Twitter, the Friend Feed, the Facebook from the future?
Fred: Well, I think that we need a lot more stuff built on top of these services. I see Facebook and Twitter and Friend Feed emerging as public channels. I call them public because it's a way for people to communicate with each other publicly. And the problem with those channels is they're really noisy. And I think we need services built on top of them. I think Facebook and Friend Feed and Twitter are building a lot of those services into their services. But I think way more people are building services on top of them. And I think they're going to be people who built services for the small guy, the local merchant, to be able to do what they need to do. There's a company called CoTweet that's here in New York that's building an application for businesses to engage on Twitter. A good example of that is that we have a company called Clickable which is built to service on top of the Adwords API. So, for small businesses who want to buy and sell, who want to buy Adwords, Clickable is a better interface for them. And there's going to be somebody who builds a great interface for the small business on there for Twitter. It could be Clickable. Actually, it's a smart thing for them to do. But, it will probably be somebody else just because they've got a lot of do already. And that's the great thing about these open APIs which is another big part of the 2010 Web, is that services are going to be built on top of services are going to be built on top of services. And you know, how we always have these layers, these stacks and then the next layer comes, the next layer comes. That's happening faster and faster and faster just like pop, pop, pop, pop, pop, pop. And developers are just building amazing stuff. I'm going to a meet up tonight in Brooklyn. Three of our portfolio companies, all my blogging tools and they're having a blogging API meet up so to discuss outside in and (Samantha?) all have really cool blogging tools, all of which have APIs. And they're doing a presentation to developers who want to built blogging tools on their APIs and other APIs. And that's, there's just going to be more and more of that.
Robert: Yeah, it's pretty crazy how the blog is changing. What I'm doing now is doing cut and paste programming, you know, cut and paste programming.
Robert: And so, on my blog, I have a whole bunch of widgets on the side, one of which is Friend Feed, one is a Google Latitude thing, one is a Facebook Connect thing, and those were just copied and pasted…
Robert: (Without a script?). If you're a more adept programmer, then you can actually play with the APIs to build even something cooler, right?
Fred: Right. Yeah, and what people do is they post it for themselves.
Fred: And they put it out there and other people like it too. Etsy has an API and…
Robert: Etsy is a really cool service for people who want to sell handmade goods, right?
Fred: Yeah. It's an arts and crafts marketplace on the Web. It's really the best way to think about it, and many of the sellers are women, and there is a small but meaningful subset of Etsy sellers who are married to geeks, and so, a lot of them have, you know, said to their husbands or boyfriends, "Hey, can you build me something on top of the Etsy API?" And so we see a lot of activity where, you know, sellers want some widget that they can put on their blog or on Facebook and, you know, Etsy doesn't really have that for them, so they get their significant other to build it on top of the Etsy API. And then, once it's out there, other sellers see it and say, "I want that, too" and starts to propagate. I mean, I have this single blog roller on my blog. I just wrote on my blog, like, I don't want to do a blog (roll?) because the blogs are being changed and the idea of constantly managing a blog (roll?) is too hard for me. What I really want is just a Firefox plugin that watches what I read and decides what the most important blogs are to me, and over time, it will evolve and change. Some guy built it. It's called BlogRollr and it's just a widget to put on your blog, you download a Firefox plugin, it basically looks for pages with RSS feeds on them, counts them up, and then the one that you visit the most is first on your BlogRollr, and you can have a…
Robert: That's awesome.
Fred: Isn't it cool?
Robert: That's awesome.
Fred: I just wrote about it. Someone built it. You know, that's the amazing thing is that with all the tools out there, it's not that hard to build stuff. It's about building stuff that people care about.
Fred: So, this is sort of a five-year trend, not a one-year trend. But what we see, these engineers are even more important than ever. Most of our companies, at least half the headcount is in engineering, and I don't see that doing anything but continuing to go up. The other area that we're seeing a lot of headcount in is what I call environmental remediations, sort of trying to deal with all the bad stuff that happens in these systems, spam, hacking, fishing, abusive behavior, you know, squatting, like one of the issues Twitter has to deal with is people squatting on people's brands.
Fred: Someone had Scobalizer, you know, that wouldn't be right, you know, so they have got to deal with that. And so, that's basically large customer support infrastructure and engineering that's dedicated, so, you know, you can't scale… those kinds of problems you can't scale with just adding more humans, so you just have to start building detection systems and moderation systems. And so that whole area is just a huge call center for anybody that's involved in social media, and most of our companies are involved in social media. Discuss, for example, has been building their own comment spam system. They're using all the existing systems that are out there.
Fred: And now, you know, they sort of mash them all together, and now, they're building their own proprietary algorithms that use a lot of the data that they've got inside their system. You just got to do that.
Robert: Yeah. Are you saying that physical infrastructure is changing? You know, 10 years ago, people have to buy their own servers or use…
Fred: Oh, we see most people building on a Cloud, you know, the small startups building on a Cloud. Some people, as they…
Robert: Completely on the Cloud or a hybrid (frame?)…
Fred: Hybrid mostly. Some people pure Cloud. We are seeing some companies as they scale go to a collocation, you know. You know, I think servers the size of Facebook or Twitter, you know, it's unlikely that they could run that entirely on the Cloud and they don't. But it's amazing how many services do still run on the Cloud.
Fred: And I think we'll see more and more of that.
Robert: Yeah. Anything else that you're seeing? It's 2009, we're in the middle of a recession, depression, whatever you really want to call it…
Fred: The only thing that I would say is we would talk a lot about sort of horizontal, you know, innovation, what's… you know, what's happening kind of across all sectors. We're very interested in, you know, a lot of what the internet has changed, disrupted or whatever you want to call it over the past 15 years has been the media business.
Fred: And we think that education, finance, energy, government, health care, those are all sectors that we should look for really disruptive internet services to evolve either into or build up inside of… we're particularly excited about education and energy and finance. Little less excited about government and health care, but we're looking to cross all these sectors and there's lot… lots of interesting innovation going on.
Robert: Sometime in the next 10 years, there's going to be a revolution in education due to the cell phone.
Fred: Yeah, not just the cell phone but you know, this whole home schooling, un-schooling movement, you know, which I thought was sort of like the lunatic Fringe but it's starting to become more mainstream and I think entrepreneurs are starting to build services for that movement. And that movement's just really hungry for any kind of service they could leverage and I think there will be businesses that will ultimately disrupt the entire education system that will start in the home schooling and un-schooling movements because that's the place that they can get going first.
Robert: Yeah. Tell me about the tools that you're using. Yeah.
Fred: What do I use?
Robert: Yeah. I see you on Twitter all the time.
Fred: Well, I'm pretty old school. I… I'm the anti-school…
Robert: I love your blog by the way. It's one of the few that I read everyday and I'm sending…
Fred: Thank you.
Robert: Pretty crazy.
Fred: I'm very old school. I mean, I'm embarrassed to say that I use the Twitter Web app and SMS as the two ways I interact with Twitter which is pretty, pretty (log-eye?) when compared to what's our there.
Robert: I turned off SMS three years ago. So…
Robert: But that's because I, I just couldn't deal with it… with having to manage, you know, that many users. So…
Fred: I still visit Techmeme everyday and try to keep track of what's going on out there. I, I use Gmail just actually switched pretty much from Outlook to Gmail. It took me a while, I kind of force myself to do it. I'm loving it now. What else? I don't use Instant Messaging very much because I'm away from my desk. I spend most of my day in meetings or like out on the road, meeting people like you…
Robert: That's why Twitter works so well. It's like you can do it while in between things…
Robert: You know.
Robert: I (never?) said to the congressmen that I talked with who are on Twitter loved it because they could do it in more other way - going from session to session or…
Robert: From the meeting to...
Fred: I snack on Twitter.
Fred: You know, it's like, I wrote a twit over the weekend. My son and I were waiting in line at the shopping market and we both pulled out our phones and I went to Twitter and started, you know, catching up on Twitter. It was, we knew we were going to be in line for like two or three minutes. So I'm catching up on Twitter and he goes in, he plays his game of Mafia Wars on his iPhone and he goes in and plays two or three hands of Mafia Wars and we both snacked on our particular mobile app and then, you know, it's our turn to pay and we left.
Robert: Yeah. The (road?) really site that because I have a 19-month old son and he already knows how to turn on an iPhone and find his game, so he knows how to page through the apps.
Fred: What's his game?
Robert: Well, Monkey Ball. Yeah, it's Monkey Ball, I think. It's the one that he likes or SmackTalk, he loves that. It's little animals that you talk to the iPhone and it talks back to you with a monkey, with a funny voice. But he knows how to pick out his app and start it up and how, you know…
Fred: It's amazing!