RICK JONES: Thank you
all for coming.
It's a real pleasure to see
so many people here.
I've got the absolute privilege
to introduce Brent
Hoberman to you, who is, well,
a bit of a personal hero of
mine, having been through the
dot-com boom and bust myself.
We almost worked together, in
fact, with a company called
QXL.com, before Brent left
to found Lastminute.com.
So he probably made quite
a smart move.
Anyway, Brent probably needs no
introduction, but just to
summarize the journey
he's been on--
obviously, you know, I'm sure,
about lastminute.com and its
incredible success.
But he's gone on then to found
mydeco, PROfounders.
They're an investment company
who have built the likes of
onefinestay and Made.com.
He sits on the board of the
likes of TalkTalk, the
Guardian Media Group, and
recently, easyCar.com.
So he continues to be very
much an entrepreneur.
So if you'll join me
in welcoming Brent.
Thank you.
[APPLAUDING]
BRENT HOBERMAN: Great.
Thank you, guys.
So I think Rick had suggested
that, first I talk about the
actual-- because many of you are
very entrepreneurial and
an entrepreneurial company,
maybe talk about the actual
startup bit and what that was
like then, and I guess maybe
what it's like now, because of
some of the more recent ones
that I've done.
So it was a long time ago when
we started Lastminute.com.
It was actually, I think, '96
I had the idea for it.
And the idea was based--
I guess that's important, too,
is where do the ideas for
these things come from.
And this was very much
based on the fact
that I'm late today--
I've always been late--
and literally, procrastination
and the fact of putting off
tomorrow what I can
do today was a
personal character trait.
It also started because I was
at a strategy consultancy
which was not a bad
place to be-- one
called Spectrum Strategy--
where we just worked on
media and telecoms.
So we worked on, back in '95,
I think a company called
ViewCall, which was a bit like,
I guess, Microsoft Web
TV before that, if you remember
Web TV and trying to
put shopping onto TV sets.
It didn't work, but I was very
lucky to be consulting on it,
and then thinking, god, this
e-commerce thing-- this idea
of shopping online or on a TV
set and electronically--
to a strategy consultant, it
just seemed so damn obvious
that it's a good idea.
And then I thought,
in '96, well, why
aren't I buying online?
Because I'm a classic
early adopter.
Even my kids think I-- basically
every gadget that's
going, including today
the UP and whatever.
So I thought, well, what would
I do and what would I buy?
So it really just
started as that.
I just thought, well,
I would do
everything at the last minute.
And there must be a logic.
And then when you thought about
that more and more, and
I drew that one piece of paper
which one often does with
bubbles of what could you
do at the last minute--
everything, actually, including
some stuff we never
got to, like information,
actually.
But the initial premise
was going away, going
out, staying in.
So it included ideas like
DVD rental, like
restaurant food delivery.
We even bought-- it's an
interesting thing.
At many points, we
were too early.
And a good example of that
probably was the acquisition
of Urbanbite, which
was a restaurant
food delivery service.
In probably 2000,
we bought them.
And then since then, obviously,
many of you who
will be familiar with, I guess,
GrubHub in the States
or Just-Eat here or
Delivery Hero--
these are $100 million
plus companies.
But probably a lesson that
Lastminute.com did do-- one
lesson is we tried to do,
probably, too much.
Partly, that sort of worked,
because I was slightly insane
at the time-- much younger, no
kids for most of it, and no
wife for a bit of it, so
working obsessively.
And so in the end, we ended up
across 14 countries and going
public and all that.
But I guess going back to that
early start up bit that's,
again, more relevant--
so I had the idea, then thought
about it, discussed it
with a friend.
He wrote down a few pages on
it because he was much
brighter than me.
He was working with me at
Spectrum Strategy Consultants.
He was much brighter, so
he had lots of time.
He didn't need to do the
consultancy work for more than
a few hours a day because most
of his work was done.
And then he wrote down--
a guy called Rogan
Angelini-Hurll, an
old friend of mine.
And he wrote down some
stuff on it.
And then we decided--
well, I looked at it and
thought, god, the internet.
This was in '96.
There's hardly anyone on it.
It's a bit of a niche
of a niche--
in other words, online travel,
online leisure, people aren't
doing this at all.
And I don't really understand
the internet, either, at that
point in '96.
I bought a book from
Amazon US, and that
was most of my knowledge.
And I'd actually also done a
study for cable and wireless
voice over IP, where I did--
again, not knowing
any of these.
It's quite important sometimes
not to know anything.
I said, this is really going
to happen and really be
important, not really
understanding why or the
technologies behind it.
Cable and wireless-- all their
guru technologists said, no.
Here's why it won't happen.
And obviously, the muppet was
right and the guru was wrong,
which I think often happens.
I'm not saying that I'm often
right, but I think too much
knowledge is one
of my mantras--
that I think if you know too
much about something, you
don't do it.
Thomas Cook didn't do
Lastminute.com because they
knew too much.
And that's important.
So what happened is then
we shelved the idea
for a couple of years.
I then went and thought, well, I
really do like reading about
the internet and learning about
the internet, so I need
to go and do it.
So I spent six months at
LineOne, which is the internet
service provider owned by BT and
News Corp doing biz dev--
very powerful for somebody
who was 25 years old--
fantastic in that you could
ring up any company.
So I'd ring up eBay or On Sale--
which was the other big
online auction site at the
time-- and say, I want to look
at your model for Europe,
that sort of stuff.
And because it was BT and News
Corp, they would talk--
not because it was me,
the 25-year-old kid
who didn't know much.
And so it meant I had this
amazing overview.
I then met Tim Jackson,
who founded QXL, at
a Red Herring event--
saw him speak when the company
was just him, thought, hey,
I've been looking at this
online auction thing.
And here's somebody's who's
going ahead and doing it.
So I spoke to him, using, of
course, the initial intro of
BT and News Corp and why don't
we partner with him?
In the end, we didn't
partner with him.
I just said, well, why
don't I join you?
It ended up I was the
first employee--
but I'd like to think
part of the
founding team, I remember--
searching on some search
engine then--
It wasn't Google--
for online and software and
finding Blue Duck software.
So we replaced what he
was trying to write
with Blue Duck software.
And we had an auction
platform even then.
But then after four months, Tim
and I very quickly fell
out, which was very lucky for
me, because then I just went
straight away after that--
having seen four months of
QXL, seeing that online auctions
were working, seeing
e-commerce was working, thinking
I knew a lot more
than I did, I thought, right
now, I'm going back to that
Lastminute idea.
Lastminute.co.uk was registered,
and was actually
my non-compete with QXL,
as an exception.
I said, right, I want the
exception to be able to do
Lastminute.co.uk.
Tim thought it was
a terrible idea.
So he was like, fine,
go for it.
You can have that in
your non-compete.
I actually tried to get Baroness
Lane Fox, as she's
now called as of today, Martha
Lane Fox, to join QXL.
But Tim had a no poach thing,
agreement there.
So I couldn't go leave
and work with her.
So I said, well, don't come
then, because we might want to
do something together
afterwards.
But then, after I left QXL, I
asked Rogan Angelini-Hurll,
the guy before I'd mentioned
earlier who I'd done the
initial idea with--
I said, Rogan, do you
want to do it?
Do you want to leave your
analyst job and all
that sort of stuff?
He was doing very well
and decided not to.
I then had dinner with Martha
and my girlfriend at the time,
now my wife.
And Martha made lots of jokes
about needing a geek--
geeks weren't so chic then--
and about what a crazy,
crazy idea this was.
And then the next morning, I
rang and I said, you know, I
wasn't joking.
You should do this.
And so she left Carlton, and
together, we finished up the
business plan and raised--
interestingly, at the
time, this was '98,
we raised $1 million.
And our old boss from Spectrum--
because we were
both at Spectrum.
And our old boss said to us,
who do you know who's two
really inexperienced people
under 30 who have raised $1
million for a business plan?
It's so interesting now.
You think of that question, and
I'm sure all of you would
say, I know 10, 20 people
who had done that.
But in that time, we
didn't know anyone.
And almost no one in the
UK had done that.
So he was like, look.
Quite cute, cute idea, but why
don't you come back to us in--
you can come back to Spectrum
in six months.
Just set yourself a deadline.
If you haven't raised money in
six month, then come back.
So what we then did--
we wrote 20 people.
One of them, Martha and I, we'd
all declined to work at
Spectrum-- but a very bright guy
called Thomas Hoegh, who
has since gone on Arts
Alliance to be behind
companies like LOVEFiLM
and Lastminute.com
And I refound him through
Planet All, which is
interesting-- another example of
where you can be too early.
Planet All was, I guess,
Facebook many, many years
before Facebook.
And Amazon acquired it
and used the team to
do something else.
But I refound him
through that.
And so we wrote to 20 people.
It wasn't connections.
We didn't really know them.
My dad, actually, invests
in venture capital
funds in the States.
But he looked at the
business plan.
And this is-- he hates
it when I quote this.
But he said-- because there were
lots of commas missed out
and all sorts of stuff-- he's
a real detail guy, my dad.
He said, "The only person who
would invest in this business
plan is someone who's never
read it," which
I thought was damning.
But he's been very, very
supportive otherwise.
So we sent the plan off to
20 people, including me--
I remember chasing some guy down
Brompton Road and saying,
let me drop this in your letter
box and whatever.
So of the 20 we wrote to, 10
agreed to see us, and five
agreed to invest in the end.
The thing that created them
investing in was--
Arts Alliance were a typical
investor in those days, where
they were very-- all HBS--
very analytical, very much
asking for, look, what is the
number in year three?
How do you justify
this assumption?
And I was thinking, I used to
write business plans for a
living, but I know
this is fiction.
So why are you worried about
that assumption in year three?
And I understand now, as an
investor, how you want to see
people's logic and
how they work.
But they were not going to get
there until another guy called
Tom Teichman--
and I will just tell this
anecdote, because it is quite
fun and serendipity.
I had clipped from the Guardian,
when I was looking
for a job, a little
ad for a company
called New Media People.
And they said they
did recruitment.
And they also did some
investments.
So that clip, that piece of
paper, was still in my wallet.
I then rang up directory
inquiries.
You remember how inefficient
it was then.
Directory inquiries--
inefficiently good, I
guess, because they
got the wrong number.
They gave me the number for New
Media Investors, not New
Media People.
I then rang, spoke to a guy
called Tom Teichman--
I got straight through to him--
who ran it, and started
telling him the idea.
And after a couple minutes'
call, he's like, that sounds
fun and interesting.
Come and see me.
Martha and I went to see him,
and after five minutes, he
said, I'm in--
as opposed to the Harvard
Business School
guys, who were still--
and we'd seen them
months before.
And they were still
analyzing and
stressing us out and whatever.
Once he said he was
in, they were in.
Then we got Innovacom, which is
France Telecom's fund, and
then one of the other
investors,
[INAUDIBLE], got in--
North Zone from Scandinavia,
et cetera, et cetera.
So we had this actually really
bizarrely good roster of early
stage investors for just
this $1 million.
I asked for slightly less at
the beginning, and then
halfway through the process, I
realized the technology was
going to cost more.
So I couldn't raise the price,
so I had to sell 40% of the
company, I think, instead of 33%
is what we were going for,
for the first round.
I could go on a lot more
about the process.
But then what happened is lots
of disasters and absolute
roller coaster of
up and down--
site that really didn't work.
The first thing Martha and I
used to do every day was try
and buy something, because
it was such a challenge.
And it would so often be down.
It got me into this
real micro--
probably put me off running a
big tech company ever again,
because I would start to--
even as we got bigger and when
we had 2,000 people, I would
still get the sales every 15
minutes on my mobile by text
message, sales by product
category and conversion rate,
as a way of mainly, by that
point, making sure that the
tech team would be very
embarrassed if I got to a
problem before they did, which
unfortunately still happens
quite a lot.
So that was how that
one started.
And I won't go into too
much of the next bit.
But then we almost ran
out of money many
times, did bridge loans.
And I learned what a bridge loan
was and stuff like that.
And then luckily, the ramp
of the growth got there.
And then we actually went public
in 18 months after
going live and two years after
the company was founded--
I think faster than any other
European company had done.
We raised the price during the
IPO road show more than any
other European company had done,
which may not have been
so good, because then
it went down a lot.
Some of you may remember the
share price went down 95%
after we went public with
revenues of a small pub,
massive losses, but raised
120 million pounds.
Priced on March 10, the
day the market peaked.
March 10, 2000, the day NASDAQ
peaked, is when we priced.
We went up on March 14.
And the first day, the share
price went up a little bit,
and we knew it was all wrong,
because it was meant to go up
a lot on the first day.
And that day, everyone thought,
god, you guys must be
feeling on top of the
world or whatever.
And I remember just thinking, I
just feel the pressure of we
are priced for perfection.
And I actually wrote an article
on the guy who did
Facebook's IPO--
not that it was the
same thing.
They're very different
in a million ways.
But I just felt, again, they
were being priced for
perfection.
I didn't understand why they'd
done it at that price.
But anyway, for us, what
happened is we did raise 120
million pounds, which was quite
a bit of money in 2000,
particularly after no one else
could raise any money after
the bubble burst.
And then we went on to buy 14
companies, launch in, I think,
12 countries, and sold the
business in 2005 to
Travelocity for over
$1 billion.
And since then, I've done
a few other things.
I started mydeco.com, which was
based on the premise that
I'd just bought a house after
doing the cliche thing of you
sell your company, and
then what do you do?
You buy a nice house in
London, probably.
And I did.
And then I thought, how am
I going to do it up?
And even though my wife was an
interior designer, she would
describe to me what it
would look like.
And I'd say, I can't
visualize this.
Then I'd go and buy that CD
to try and visualize it.
And it was like a sledgehammer
to crack a nut, and without
real products, as well.
And I thought, this
doesn't work.
And then I went to
some tech guys.
And I said, could you actually
do a 3D tool that needs no
download and have
real products?
And what would it cost to model
real 3D products in it?
So we crazily raised money and
built 120,000 items in 3D of
real furniture.
About 700,000 people have
built rooms in it.
That's good, but not great.
Great would be seven
million, really.
I still think it's the best
tool out there for if you
really want to do something
very simple.
But it's not quite
good enough.
So what we did is we actually
sold it into a company called
Floor Planner who just work on
B to B and just work on doing
that sort of stuff.
So we've got a stake in a
very good company there.
And then the other thing that
happened out of mydeco is--
another thing in the business
plan-- often, it's the things
in the business plans I
don't do that are the
best models, actually.
So the one in the Lastminute.com
business plan
that got taken out was the
TripAdvisor model.
It was why don't we have a
reviews and rating site and
all that sort of stuff?
And a couple of people said
to me, Brent, you can't do
everything.
Cut that bit.
I don't understand.
It's too complicated.
Take that bit out, which
was probably
still the right advice.
I don't think we could have
possibly done one more thing.
But similarly, in the mydeco
plan was the obvious thing of
how do you disrupt an archaic
industry like
the furniture industry?
You go direct to manufacturer
and you crowd source.
Hence, the founding of Made.com,
where I did see--
I hate copycats, but I did
feel I'd had that idea.
Then I did see that there was
a company in France called
Myfab doing something related.
I thought I was meeting with
Myfab when I finally got to
one of the founders, Ning Li,
the Chinese co-founder.
And fortunately, when I met
him, he'd just left.
They'd had a little
bust up at Myfab.
And so I said to him, yippee.
Great.
Let's just do this together--
50-50.
Mydeco will give you all this.
You do it.
And we'll raise third party
money and do it.
And so that was how we did it.
So it was quite a good story of
that model plus the assets
mydeco could bring.
And also, mydeco put some
people in there.
Some of the co-founders
came from there.
So it's become a
very good team.
And we've raised quite a bit
of money from some good
investors for that business.
And it's scaling nicely.
Other ideas recently--
so the other recent one is
another idea I tried to do at
Lastminute.com in about 2002
or 2003, but the team said
you'd be nuts was actually
P2P car rental.
It was pretty obvious.
We owned Holiday Autos.
We did seven million car rental
days a year, and always
fighting with the margins--
very tough.
Still, car rental actually has
relatively high margins
compared to lots of the
other travel stuff.
But I still thought this
business might go the way of
air one day.
So I thought, right.
I've got my car in my drive.
It's not being used.
Why can't other people use it?
And at the time, I think the
key thing was that-- it
wouldn't have worked then, so it
was lucky the team said no,
because basically, what's
changed is--
it's Jason Calacanis who's done
this big thing now on--
the big Sequoia question,
he says, is why now?
Why is this the right
moment to do it?
So why is now the right moment
for peer to peer car rental?
And it's all the stuff that
you guys do every day.
It is because you can unlock
your car with a mobile.
You can walk around, you
see where it is,
et cetera, et cetera.
You don't have to wait for the
key holding stuff, all that
sort of stuff.
So the friction goes.
And I think there's also
something about security and
knowing who people are and
identity and trust and all of
these factors.
So I went to Stelios and
said, you've got
this EasyCar business.
We had been talking for
awhile about it.
Why not do P2P?
And he and I had many
conversations with Rogan,
who's now PROfounders'
capital.
And we decided we would
try it together.
So PROfounders invested.
And I'm on the board of
that one as well.
We have just confidentially
hired a CEO
who starts next week.
So we're very excited
about that.
So I think we'll start to see
some more traction there,
because initially, we didn't
really have a CEO of the
business, for various reasons.
But we do now.
So other stuff we've done--
another investment I mentioned,
the Jawbone UP, but
the one the more I use this,
the more excited I am.
Don't get me wrong, I love
the Jawbone guys.
But the more I use this, the
more excited I am with the app
we've invested in, which is
called Moves, because it's
just an app.
And it tracks.
It does tracking.
I know Google have actually done
something similar with
Google Now, I think
it's called.
But that seem to be a good focus
for you guys, which is
good, because all the privacy
guys will get at you and they
won't get a me.
Moves has been downloaded a
million times in a month.
And it's still very early.
But as I say, it's an app, uses
the accelerometer, et
cetera, as to how many steps
you've done every day.
And we're very pleased with
that initial launch.
So that's quite an
exciting one.
So otherwise, we've mentioned
some of the boards I'm on--
Guardian, Timeout, Talk
Talk, EasyCar.
Shazam is another I just
joined recently.
And one other thing I do is a
thing called Founder's Forum
where we get entrepreneurs
together to brainstorm--
top entrepreneurs.
And we've just done an event
in LA where we took 80
companies from the UK to meet
with the best of Hollywood.
We did a brainstorming
with will.i.am--
a little brainstorming with
him as the futurist.
As you know, he's actually
very good on it.
So it was really, really
quite fun.
And then next week,
we're doing Rio.
And then we'll do London
after that.
Questions?
[INAUDIBLE].
John.
Hi.
AUDIENCE: [INAUDIBLE].
BRENT HOBERMAN: Yeah.
Sorry.
The question was too much
info can be a bad thing.
And how do we cope with--
sometime's not.
AUDIENCE: [INAUDIBLE].
BRENT HOBERMAN: Yeah.
Sorry.
I got it, I've just been
told to repeat the
question for the mic.
Sorry.
Yeah.
So I first try and say--
if anyone's pitching us, I think
the first thing is just
can you convince me to use it,
that I would use it, that I
need it very quickly?
Or if I don't need it because
it's targeted at women or
whatever, can you help me
understand very quickly that I
know lots of people who would?
And it's amazing the number of,
firstly, ideas that we get
that don't go through
that very simple,
damn obvious thing.
The second thing is I do think
there is, for entrepreneurs,
there's salesmanship,
there's logic flow.
There's all sorts of other
things that doing those
spreadsheets do help
with and validate.
So I guess it's having a balance
of who's on the team.
So Rogan, who I mentioned on
PROfounders, is extremely
numerate, way more numerate
than I, and just loves
spreadsheets.
I'm allowed to say
that publicly.
He does.
So I think it's a
good balance.
But I always tell him, look, I'm
really not interested in
what their four year plan
is, because it's wrong.
I want to understand what the
team is, where the passion is,
and where the consumer
need is.
And is it big enough?
So those are the
sort of things.
But genuinely, so often, I think
the entrepreneur's best
friend is that blind optimism
and willful ignorance that
makes you go through stuff and
go overcome challenges.
And the other point is if we'd
known how hard Lastminute.com
was going to be, how hard it was
going to be to build that
website, how close we'd be to
running out of money because
the website didn't basically
work, how hard it would be,
how actually insane it was for
British Airways to say yes to
us in the beginning
when they had 50%
domestic market share--
and a lot of them didn't really
want the business,
didn't want Lastminute inventory
to be boosted.
So if you knew enough about the
industry, you'd say, well,
actually, BA logically
will say no to you.
And therefore, you haven't
got a business.
So you have to just be blindly
optimistic, come
at it another way.
I guess the way we came out
with them is like--
this internet thing.
You want to look smart to
your bosses, right?
Because there's this internet
thing out there and a few
people are talking about.
So we'll give you free R&D. It's
not going to work, our
thing, of course not.
But we'll give you free R&D.
And we'll work with faxes,
which people
criticized us hugely.
I remember lots of people
telling us we were idiots
because we worked with faxes and
there's this actual online
company and a fax line.
And I'm like, because it was the
only way to work with BA,
because BA, for tiny a operator,
for example--
and many of the airlines--
wouldn't build an EDI link for
you if you were selling 10
seats a week.
So you have to say, give me
a better rate this way.
So I think that ignorance
helps you
overcome your problems.
But it's instinct as well.
AUDIENCE: So I have
a question.
This is really weird.
So you said that you'd been
ahead of the market a few
times as an innovator
and entrepreneur.
When you look at the market
where it is now, from an
investor's perspective, from a
chairman and getting involved
on boards, et cetera, how
do you spot and identify
companies that are ahead
of the market?
And do you come across ideas
now that you think are way
ahead of the market but that you
wish you could invest them
because you know
there's a need?
BRENT HOBERMAN: Yeah.
That's a really good question.
So what ideas are ahead of the
market and do we see that are
too far ahead that you might
still want to do?
I guess robotics is
an obvious one.
As I said, I love to meet-- the
reason why I got into the
internet and the whole thing
was I just love gadgets.
I remember in '96 looking at a
robot hand across the world,
and you could control it from a
computer, and thinking, wow.
So I still think robotics today
is one where you see a
lot of these video conferencing
robots that run
around rooms.
And I get them to present to
things like Founder's Forum.
I think it's slightly
nuts, but I love it.
But when you think of what it
means for manufacturing and
all that sort of stuff.
3D printing is another one that
we've had for years, and
I've been tracking
it for years.
And obviously, we've done 3D
printer products, actually.
We've run competitions for
designers to build products
that, then, Alessi would
actually make.
So we did that at mydeco.
You'd print it 3D, and
then Alessi would
then make it properly.
So I think, then, it's just
understanding what do these
trends really mean?
So we've looked at-- and there's
mass customization.
There's an ex-Googler, Anastasia
Leng, who many of
you will know--
Makeably, looking
at that model.
And when you look at that sort
of model, you say, I love the
idea of mass customization, but
is it too early for all
that sort of stuff?
And then I think you just
have to look at
the longer term trends.
And in that case,
is the pricing--
is it disruptive enough
is another thing.
Often, I don't like the
ones which are just
not disruptive enough.
Other trends, I think, other
spaces we love that we haven't
done enough-- online
education.
Another thing I am--
I've got to say this proudly,
because I still
believe in the brand.
But in this country, you
normally have to be
embarrassed about it.
But I'm also on the board of
Eton or the governor of Eton
and looking at their
online strategy or
online education strategy.
And I think that's a whole
area which you all know.
And many of the big US gurus
will say, kids, when you look
at your university, make sure
that they've got enough money
to last you through that three
or four year course, because
they might be bust by the
end of it, is, I think--
I can't remember--
one of the US guru's
views on it.
So I think these
are areas where
you'll see massive change.
And med tech is the other one.
I think there was a TED Talk
yesterday I just saw tweeted
about, which--
apologies-- but analyzes your
pee through your iPhone and to
help your health.
I think there's others ones
where you lick something on
your iPhone and analyze your
glucose levels and all that
sort of stuff.
So there's got to be incredible
innovation there.
I think both those sectors,
though, are really hard,
because you've got regulation,
governments, and
philanthropists, actually.
Philanthropy is probably
the enemy of the
online education model.
We're in two of them.
One, Mangahigh, where you learn
maths by playing games,
and which is a great idea that
the only challenge-- the real
challenge is, is Salman Khan
or Bill Gates going to give
that stuff away for free?
And then the other one we're
doing is busuu, an online
language learning network,
social language learning,
which has got 25 million
people signed up to it.
So those sort of things like
language learning are great.
I guess you could look at the
disruptive and say, well, will
Google Translate do away with
language learning need?
But I don't think--
I think people will
still always
want to learn a language.
AUDIENCE: I was wondering to
what extent it's important for
startups to be able to generate,
quickly, revenue and
to be sustainable quickly.
Because when you look at the
press, all the startups that
lose a lot of money, all these
companies go public, they're
actually not profitable.
So I was wondering if there's
other criteria, or if you
think the market
is just wrong.
BRENT HOBERMAN: Yeah.
How quickly do you need to
make money as a startup?
I actually had--
I don't think it would be too
secretive to say, in the Moves
meeting-- and I could
be wrong.
So I had the meeting with
the Moves guy yesterday.
And they'd been talking about,
in their product pipeline,
doing lots of premium--
the old premium model.
You give it away free,
and then premium.
And then they said to me, look,
actually, we think we've
validated enough of this that
we're just going to go for it
and not worry about
the premium stuff.
And I said, yippee, because I
wanted them to have 10 million
downloads before they start
worrying about how to monetize
it, because monetizing from a
million downloads and the 1%
who's going to pay for
whatever-- it's
just not worth it.
And to be honest, there is
something about market.
There are enough--
the logical thing is if there
are enough investors who will
pay for traction, then you
should go for traction,
because otherwise,
your competitor's
going to kill you.
Because the other point is
there's a US company that
wants to do what these
guys are going to do
that's after them--
but if they're starting to price
for key features like,
say, calorie counting, then the
US company says, yippee,
I'm going to offer
that for free.
And I'll get Sequoia to
give me $30 million.
And I don't need to worry about
money for five years.
So I think you've also
got-- there's
the competitive dynamic.
Of course, I understand profit
and all that sort of stuff.
And I understand it's
a good thing.
And if you have one of those
rare business models that you
can do it all, fantastic.
But I think if the market's
going to pay for traction,
then somebody else is going to
get paid for that, and you're
going to limit your traction
if you're trying to eat too
much money out before
you're big enough.
And it's not enough money anyway
when you're small that
it's worth worrying about.
But equally, we have other
businesses like Made.com,
which we run much tighter.
We're not at the old Buy.com
model or Zalando, dare I say
it, where we try and
lose money on
every incremental sale.
But we do still pay a lot of
attention to lifetime value.
In other words, do we have to
make money on the first sale?
This PPC is so expensive.
[LAUGHING]
BRENT HOBERMAN: I know.
I'm glad that Graham from QuBit
is explaining to them--
or that they're all muppets,
if you've read his article.
Hopefully, that will depress
PPC prices and we'll--
well, some of us will be happy.
[LAUGHING]
AUDIENCE: Hi, Brent.
Thanks for coming in.
You talked briefly about your
role as an educator and
evangelizing computer science.
When do you think computer
science will become part of
the core curriculum alongside
English, maths, and science?
Because I think it will do.
BRENT HOBERMAN: It's funny.
It's a really good question
about computer science being a
core part of the curriculum.
Weirdly, and I was having this
discussion with Sherry Coutu,
who some of you will know,
yesterday, actually, because
Sherry is doing something which
Google will probably be
involved in, I think, to
encourage people who have
studied STEM to talk to schools
and excite them about
that career choice.
I think people like will.i.am
can do a lot more than me--
him going and saying, I'm going
to study programming and
this idea of geek chic
I alluded to earlier.
I think people like that,
saying-- and actually,
Christian Hernandez tweeted
it yesterday.
There's a Code.org video on
the web now with Gates and
people and basketball
players or whatever
saying, coding is cool.
However, from my ignorance
point of view, I actually
didn't code.
I coded in Basic when I was 12
or 13 and wrote some basic
games in Basic--
very basic.
I wasn't that good
at it, though.
I did it, fortunately,
with another guy
who was much better.
But I don't know
what he's done.
So my view is I actually went
and studied-- weirdly, I did
French and German literature and
went to Oxford, where, to
be honest, I think the only
thing I really learned that
was useful was being taught to
think laterally and to cram
incredibly, and to analyze a
huge amount of information
between midnight and 3:00 AM the
night before very quickly.
So I think those sort
of skills actually
are also very useful.
However, yes, I still think
learning kids to code--
but I'm not so obsessed that--
I have a 10-year-old daughter.
And I haven't--
at school, they have pushed,
and I've helped them push
CoderDojo or one of those
into the school.
But my daughter didn't
want to do it, and I
didn't push her to it.
She's definitely good on playing
apps, but less on--
so I don't think it's key.
I think the other interesting
point about this is going
back-- sorry to sound starstruck
about will.i.am.
But the other thing he's added
that I thought was very
interesting is that he is on
this campaign to add to STEM--
STEM is now STEAM.
So I don't know if you guys
have come across this
expression, STEAM.
So STEAM is where you
add the A into STEM.
So you say, it's
not just STEM.
You need to put arts
into there as well.
And that's really what
kids need to learn.
And I think that will give
you the creative element.
And I guess if people
want to talk about--
I guess they mentioned Jack
Dorsey and Steve Jobs as the
sort of brain that have the
right brain, left brain.
And so I think that saying
that bits of
both sides are good.
But I think the key thing,
actually, for kids is to do
whatever they're most passionate
about and what
they're best at.
AUDIENCE: [INAUDIBLE].
Back in your previous days
when you were pitching
Lastminute, did you ever go to
an investment or a VC or an
incubator and say,
this is our idea?
And then did they ever ask you,
well, what's your value
add if you're not actually
coding and providing the
programming?
Have you ever come
across that?
BRENT HOBERMAN: It's funny.
I guess there is--
I still don't see it, because
I think it's all about
building teams, right?
And I think the first value add,
I would argue, is can you
hire the right people?
So I think the thing that, to
be honest-- not to sound
self-congratulatory
or something--
but the thing that got people
about Martha and I at the very
beginning was just these two
nutters were so passionate and
excited about what they were
doing that I think they
thought other people
would follow us.
AUDIENCE: Right.
BRENT HOBERMAN: And probably,
also, we were smart enough to
know we didn't know.
So the fact that I wasn't
a techie, but
actually, I love tech.
So I do know how to talk to
techies, mainly that I would
go to them and say, this can't
take eight months.
It's really a whole load of if
statements, and how does it
take that long?
So I was a little
bit dangerous.
And I did make--
I think my real claim to fame
is in CIO Magazine, I was
rated as the third hardest CEO
to work for, for the CTO--
the third most impatient
and most unreasonable--
so I think having a level of
unreasonableness, and a
dangerous enough amount.
But what was it about this?
Also, for me, it was, could
I look at a web page and
understand a bit about
what's behind it?
What would really need--
and ask the right
questions of the techies.
So it was very much--
the dangers that would happen
at Lastminute as we got
bigger-- we put in these project
management layers.
And then I always cite the
example where I got into one
meeting where they told me this
project was going to take
eight months.
And I was like, it just can't.
It's not that--
it just doesn't seem
that hard.
And then when I got into asking
the right questions of
the techies, I was like,
this is obvious.
Which are the bits that
are really so hard?
They described one bit.
And I'm like, OK.
Brilliant, because I
don't need that.
We can get to that later if
it's really successful.
That bit--
and then what was eight months
became two months.
And then a project that you
would have said the ROI is too
risky or whatever suddenly
becomes very viable.
So I think that's a lot of the
skill is knowing how to ask
those questions.
And the problem it becomes
is you get lost
between all those layers.
AUDIENCE: Hi.
So looking at your various
startups, where do you think
the biggest hurdle is in terms
of number of users?
Is it from zero to 500, 500 to
1,000, or 5,000 to a million?
Where's the biggest challenge?
BRENT HOBERMAN: We often
talk about where--
it depends on the type
of company, right?
Is there a natural cap
out in some areas?
And some of our companies, we've
been looking at what's
happening on the market
and thinking,
god, does it cap out?
I still think that if you've got
a really good management
team, momentum is a very
addictive thing.
So you can keep building
on it.
So whatever defines momentum in
your space-- it's different
numbers in different
sectors, right?
But if you've got momentum and
you've got good enough
leadership-- so let's take
the Moves example.
They've got to a million.
Now, partly, granted, a lot of
that is that initial burst of
Apple store promotion.
So can they now build
on the momentum?
Can they build an Android
app fast enough?
And can they then get
the right people in
to build upon it?
So I actually think that's
still the hardest bit, is
getting from naught to that few
hundred thousand or whatever.
And that's the bit where
I'm most relieved.
I still think there will be
a time now where that will
probably flatten for a bit.
But I think during that time,
they'll have enough of a
validation story to get more
great people, to get more
great investors, and to take
it to the next level.
AUDIENCE: Thank you.
RICK JONES: Thank you
very much, Brent.
[APPLAUSE]
