Transcripts For KQED Charlie Rose 20140421

We always felt that the best companies, including our own, were the ones run by the inventer, the people who started by the company and Venture Capital, at the time, was set up for the opposite. The inventer would invent and get it to a certain point then you bring in the adults who knew how to build a business. Charlie david brooks and ben horowitz next. Theres a saying around here you stand behind what you say. Around here, we dont make excuses, we make commitments. And when you cant live up to them, you own up and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it, when you know where to look. Captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Charlie david brooks is here, he is an oped columnist at the New York Times and a regular contributor to pbs newshour, teaches on moral philosophy at yale and coteaching weekly seminar studies in grand strategy. A recent appearance at the ted talks in vancouver, canada, in which he talked about eulogies and resumes. So i have been thinking about that problem and what was helping me think about it is a rabbi who wrote a book of faith in 1965, said there are two sides of our natures, which he called adam one and adam two. Adam one the worldly, ambitious external side of our nature. He wants to build, create, create companies and innovation. Adam two is the humble side of our nature, not only the do but to be good, to live in a way internally that honors god, creation and our possibilities. Adam one wants to conquer the world, adam two wants to hear a calling ando bay. Adam two accomplishment, adam two consistency and strength. One wants to know how things work, two is wonders why were here. The two sides of our nature are at war with each other where youre living in perpetual self confrontation between the external success and the internal value. We ha happen to live in a sociey that favors adam one and often neglects adam two and that turns you into a shrewd animal that treats life as a game and you become a cold, calculating creature who slips into mediocrity who knows theres a difference between your desiredself and your realself. Charlie where with you been . Writing a books teaching undergrad. Charlie writing a column and making speeches. Yes. Charlie can you tell us what the book is about . Yeah, the book, well, i guess i can say its name, i think its going to be called the road to depth. Its about people whove led rich inner lives and a distinction between the resume and the eulogy virtues. There are some things you put on the resume that you bring to the market and some things that get mentioned in your eulogy and these are nonoverlapping characters and qualities. Like a lot of people, i think most of my time spend most of my time thinking about the resume. Its about how people over time have developed the eulogy virtues. Charlie this is part of your pep talk in 2014 which you can get online. Yeah, hundreds of thousands of people do this. Charlie they do. The interesting thing about the subject, it is the notion a long time ago i heard somebody say, imagine your death decades from now, hopefully, and think what you would like for people to say about you, and then get on with living that life. Yeah. Its easier said than done. So sermons and even books dont get you there. I was writing a column a couple of years ago about how hard it is to communicate through words, and i got a great email from a guy named dave jolly, a veterinarian in oregon. He had great sentences, one was is what the wise person says is the smallest part of what he gives. The message is the person. Hes saying what comes out of our mouths when we speak to the people around us may register but its the way you act in the smallest of ways, the disciplines, the habits, the considerateness or inconsiderateness, thats what gets communicated and those habits and behaviors were give ton you by somebody in your life and so on and so on back into the dimness of time. So that is worth remembering that we talk about these things that i write for a living but its the behaviors. Charlie behavior trumps words. It is what children learn from their parents and when you think about when you go back to people who mattered most to you in your life, you or even teachers you sort of remember what they said, but you remember the way they are, and those things that are sometimes hard to communicate, i just ran across a sentence, that when i was young i admired intelligence, as i get older i admire kindness. But the people who go deep inside dont think theyre wonderful, they think theyre sinners and theyre combating the sinfulness. And the people who are oppressive, hard character, have this sense that theyve fought themselves and in some small way theyve defeated themselves. Its this combat thats whats missing in culture that used to be in culture and now we think were wonderful inside. Its the little word we associate with desserts is sin, and that word sin once prevalent in the culture is nearly absent from the culture and thats a gigantic historical shift. Charlie one of the things i remember you said in a column years ago was the following a lot of people always talk about finding themselves, and you thought it was more important to lose yourselves. Lose yourself for something that was grander and broader and more purposeful than yourself. This is the biblical logic whether jewish, christian, muslim. The business logic, economic logic is inverse, investment needs to return. Risk reaps rewards. Biblical logic, greatest failure is humility. To get your desires you have to renounce your desires. The bible is filled with paradoxes and thats a moral, not an economic logic and i think people used to be more aware of that logic. You know, theres a famous book which i highly recommend people to read which millions of people have read called man search for meaning by Victor Frankel and he goes against the common view to have the commencement address which is today find your passion, look inside, what do i want to do, find your passion. He was a guy, he was in europe and was put in the concentration camp, and he said, i didnt plan on this. This wasnt the life i would have planned if i was choosing my passion, but this is what life presented for me. He said the crucial question is not what i want from life. Its life is questioning me. What is life questioning me to do. So hes there in the concentration camp and he said life has presented me with a suffering and he said suffering became a problem on which i did not want to turn my back. First he decides to suffer well, the nazis will not take away his dignity, but second he would study suffering, and this is what life thrust upon him. The lesson is dont look inside for what you want to do for your calling, look at the world and what questions is the world thrusting on you . Being a columnist was the opportunity that came along and presented its ownself with a set of challenges. If youre in your 20s, its foolish to think whats my calling. Let life happen to you. Charlie leave that to circumstance. The great philosopher bill mero was here and he doesnt have a planned life. Life has spoken to him as he moved along. I think he said you have to be alert and responsive. Im not giving justice to it, but it was you have to make sure that youre responding to the stimuli that might change you. Yeah. I wouldnt only do that. I think you take the circumstances and i think its important to serve a cause thats greater than one lifetime. So something you cant complete. Theres a jewish phrase, you do not have to complete the task but neither are you free from starting it. Think of a cause that will still need to be done after youre dead and that will give you a longlong obedience to somethingd that transcends life. Charlie this came to you because . One, a mid life crisis. Second, the feeling that this is not being served by the public the way it was in the 50s and 60s. There was just a lot of that out there and, so, to me theres a gap there. Third, when you write a column, youve got to shift ground every few years or else you get steal. So ive stale. So ive tried to shift ground. Charlie in terms of subject matter . I think so. Staleness is a great threat to people that do. This sometimes when you shift you make a total fool out of yourself but its important to shift. Over the course of my life, my writing career, ive trod the same ground hopefully one level down each book. I wrote about consumption, then baubles in paradise, then pay tim, neuroscience and down to moral philosophy. I dont know whats further down charlie what did you teach at yale . I teach two classes, one called grand strategy. These are both great books classes. Grand strategy is grand strategic thinkers fro thinkers. About how a nation and individual should think about the biggest issues of its situation. Charlie whats the reading list for that . We do some bismarck, we just did lincoln, we do some cold war. One of my cold war proffer profs john gattis. Paul kennedy that did a book at the logistics of world war ii and charlie hill, those are the three grand figures. Charlie i think the most popular class at yale. A very good class. Ill say one good thing about it is we spend one term its a twoterm class. One term going through the books, and the next the students have to present to us, and we pretend were like a panel of the president and his advisers and they present a policy and then we cut them off every sentence and we say, have you really thought about that . That makes no sense. Through thought about that study . And we just try to rip them and its totally fun. You dont want to make them cry but hit them hard. Charlie its totally beneficial. I believe in that confrontation as a way to harden the truth. They present to us twice, the first time we really tear them to shreds. They come back five weeks later, so theyre so much better. If you look at selfmade millionaires. This was a book called the millionaire mind. What was their collegiate gpa . 2. 75. They were not good students. But they had a common thing, somebody said they were too stupid to do something and they set out to prove them wrong. Thats a common trait of people. Charlie and to make your parents proud, especially fathers and sons. I came across a study a number of years ago. Charlie which said . Which was th the opposite, if you look at the great figures in history, a widely disproportionate number of them had their father die when they were about 12. Charlie those that were successful . Good and evil, stalin, mozart. The theory would be your father, maybe your mother dies when youre 12, you have a sense of complete insecurity so you become ferociously motivated to establish some security for yourself. I told my kids who are all over 12 that i failed them. Im still here. Charlie they would have been stronger. Absolutely. Charlie youve also been writing about politics and putin. I still do my day job. Charlie so here we are, with the crisis in ukraine. Tell me how you see it and what the possibilities are and the options. Im a relative press mist on this subject. Whats fascinating to me about this situation is rarely do we have a world crisis so dependent on the mind of one man. Charlie vladimir putin. Right. So the interesting thing about him is he is obviously a coldeyed cynic, but also something of a true believer, and its possibly both those things. I had written a column earlier about he had sent his Regional Governors these books, 19t 19th century works of theology, but they were a certain sort of theology of russias exceptionalism, russias exceptional roles in history combined with a russian theocratic and belief that god will complete russia by establishing its glory. If youre an ambitious, coldeyed guy with russian patriotism who wants to change history, this is going to grab you. So i think he is somewhat motivated a bit like that, not just narrow selfinterest and i think the people around him in the country still has that russian theology of their history. So i am not convince they did are a normal country that they will respond to carrots and sticks, i think they see themselves driven by a larger purpose. And i guess i fear theyre going to get to a place where they cant turn back. Even when the innocentsives are there. Charlie would that loss of face without a sense of loss of identity that this is their mission. Charlie yeah. Obviously, theyre going to do it slowly. They could just contribute to the internal collapse of ukraine and then come in. But theyre sort of a relentless pressure, and we face this interesting question, which is also a psychological question, is obviously were not going to send troops into the ukraine, were not going to do that, but does it ever become necessary to arm the ukraine, to raise the costs . And if you do arm the ukrainians, for example, do you deter putin because hell think, oh, it will cost me something, or do you inflame him . Thats a debate thats happened within the administration and they decided it would inflame him. But youre really guessing about his psychology all the way through the process, and a very opaque person sphoo are you suggesting that sanctions and nothing we can do can deter or, in fact, if we know that he knows that we can inflict pain that will make russia a miserable place, he might be. A couple of things. I only know what ive read and the translations in the russian press, and ive certainly read enough statements there that, you know, we survived stalingrad, a few sanctions, thats really not who we are. I have friends who are russian who says if you take every russian kid out of english boarding school, that will have effect on the oligarchs and theyll put pressure on him. Charlie will he respond to oligarch pressure . He can trade one for the other and im not enough of a russia expert to know whether he runs the oligarchs or they run him. Charlie is this argument picking on individuals in which they target sanctions . That was the goal. Again, back to psychology. I think the Obama Administration has handled this quite well. In general, they have been firm, understood the problem, been inpinged by allies and the law, but they have been as lenient as they can be given the circumstances. But when we started the sanctions, we sort of eased our way into them, relatively light, and you could say the proper psychological approach would be give everything youve got in the first blow, so hes surprised as opposed to con temp chows. Clearly, judging from his statements in the past months, there has been at least a broadcast of contempt that you guys cant touch me and they have a lot more leverage than we do. Charlie what does that say about the u. S. In the 21s 21st century . I think we have underestimated to the sense there was such a thing as a postcold war order, that even though the postcold war didnt go as we wanted. I covered ukraine, africa and the middle east in the years of the 90s and everything seemed to be turning up roses. The peace process, mandela coming out of apartheid and a sense of openness. The National Borders were going to matter less, that Global Communication would matter more, global trade and the sense of we can be free now, and i think what weve learned is a couple of things one, establishing political order is more important than being free. Its easy to be free. Establishing Just Authority and just order is where there is failure. Charlie is this part of your passover column . Yeah, so i wrote a book, a column about exodus. We all go to the movies, charlton heston, the disney movie, oh, were free, were free and thats the movie version. I mentioned that when our founders i think it was john adams, Benjamin Franklin and thomas jefferson, wanted to put moses on the great ceiling. Charlie i know that from your column. It wasnt because he was a liberator, its because he took a people off in the wilderness and imposed law on them, and, of course, thats what they were doing with the constitution. Weve had liberation around that, but writing the constitution was the act of genius. So this is a perpetual failure of us. Charlie the capacity to to impose Just Authority. And francis has devoted a lot of his career to this problem. So we dont know how well, its hard to. We dont put enough emphasis on imposing law and order on places. And two quick examples. I was in the soviet union as it was collapsing. We sent over economists because we thought, if we just get the right privatization reform, then well get the invisible hand working and theyll get order. And, in fact, they needed cops and they needed prosecutors and they needed judges. Charlie did they need a mcarthur . I dont know if i would go that far. They needed social trust. The more contemporary example is foreign aid. Foreign aid, theyre compassionate people and want to help and be kind and gentle. But if you actually talk to the people in much to have the developing world, theyve got a problem with hunger, but also they cant go out at night because somebodys going to shoot them in the back of the head. And if you do not establish law and order with honest cops, real prosecutors or any prosecutors and honest judges, doesnt matter how much aid you dump into a place charlie im also thinking of examples. Was there rock after the invasion . Absolute total. Its a faith in spontaneous order that if you set people free, they will spontaneously form communities and build civil societies. Belief in spontaneous order and that is rarely the case. Charlie look at libya. Exactly. Charlie they killed the dictator you know, the elks, the knights of columbus will come in, form little communities, and then democracy and that and that. But if you dont have social trust, if you dont have deep institutions that stretch back generations, you can just as easily get chaos, and this is something we talk about in our grand strategy class. A lot of how you see that sort of thing happening depends on your view of human nature. If you have an overly rosy view of human nature that people are naturally cooperative then you wont worry too much about order. But if you have a low view of nature that people are ungrateful, then the problem of establishing order is going to be uppermost on your mind and you can realize if you dont do it, society can get really nasty. Charlie where do you think obama would be in all of this in terms of understanding this and the instinct to create order . I do think he understands it. Hes a student of randall neiber and has a view of how barbarous human beings can become. We dont have an apparatus in government that does this enough. We have military that could blow people up, blow things up, and foreign aid feeding people, pharmacies that do drugs and great stuff, but we do not have an official order of creating political institution. That was a problem in afghanistan and iraq where this is how you set up municipal authorities, police forces, so we really have struggled with that. We dont have what we came to call nation building. Charlie im thinking of something out of a significant and serious and hugely disruptive event, world war ii. Would you use japan and germany as a model . And it was pretty intrusive. Charlie yeah. I really hesitate to say this, but i do think its historically true that the British Empire believe me, im not supporting the British Empire but i think the places they left, they left behind some tradition. Charlie because it was the traditional rule of law. I think they left that behind to some degree with all the flaws. Charlie interesting where the chinese are finding that now, the necessity, when they talk about reform, some of things they have to deal with, whether climate or rule of law, because of corruption and confidence of the citizenry and the government and all has to do with survival and political survival. Right. Charlie but clearly there is a reckoning of Something Like that. And i could say even in our own domestic politics, a piece written by beater binart who said if you look at the elections of the last 20 years, americans tend to vote for the candidate who seems most orderly. Say in 2008, the financial crisis hits, mccain is suspending his campaign, obama is marching calmly along and seems orderly. Charlie thats when the campaign turned. You look at the bushkerry race or 9 11 happened, bush, you may have liked him, not liked him, may or may not support his policies but he seems to offer some security. So people generally understand that the highs in politics are not as low as the lows are low. By that i mean our political leaders can do a lot more damage than they can good. Theres an upside to political, Government Action but a huge down side if they mess it up. So, therefore, you want somebody who is going to be sort of stable and i do think our voters tend to pick the most stable candidate. Charlie when you look at the president , where you wrote another column that i remember something about, you know, what the president needs to do now. In part, you seem to be suggesting, look, any chance of legislative action is either gone or will be theres special with what might happen in the midterm elections that are coming up. So what should he do . Lay the ground for his successor. Its going to be tough to pass big things. He actually talks this way, too. I cant remember who did it first, but he is using the white house to create coalition around opportunity. Say reducing inequality. Theres a great opportunity to take republicans businesses, organizations, create coalitions, meetings, foundations, he did this with his initiatives for black men. You create a groundswell, and maybe there wont be legislation now, but there will be a greater chance for, say, real opportunity of legislation, real inequality battling legislation for the next person. And that will involve some ideas from the left and right, that will emerge from the groundup. I was really struck by this is again my theme for the night that we overemphasize politics. We just had the commemoration of the civil rights charlie in austin at the j. F. K. , in one place. And there have been great books. Charlie at the l. B. J. Library. And when you go back and look at that, johnson did great legislative work, no question. But without the march on wanted the year before, was it possible to pass . I dont think so. So the work, two heros of mine, randolph and rustin, came up with this wacky idea, we should march on washington. At first all the big civil rights organizations said we dont want to do that. We want to work within the system. System. Rustin, a great controversial activist. Charlie one of the intellectual forces. His is a life, just to detour, a life of great humility and praise. He was being groomed to be the gandgandhi of the passivist movement. He went to jail as an objector to world war ii, an heroic prisoner, battling segregation in jail, battling racism and Getting National attention for the abuse he was taking for really battling segregation. But the early part of his life he was extremely promiscuous and gets caught with sexual acts in prison and later in pasadena has a morals charge and, after that morals charge, in those days it was illegal to be gay in public, i guess, he could never be the leader. He had to be behind the scenes. So he submerges his ego, serves randolph, serves Martin Luther king and, behind the scenes, does so much good for the country even though he himself can no longer be the star, and thats an active, heroic service, you have to put your ego on hold given your past. You also wrote in which you said this is Global Affairs with the head chopped off, political leaders are not at the forefront of history, real power is in the swarm. I think weve seen that. Well, putin is the example. Charlie right. Is the exception, i mean to say. When i was covering the soviet union collapse, we had leaders who were pretty dominant figures in the world, whether margaret thatcher, mandela, reagan, you would say they were large fecial. Large large figures. Now its the village square. So the mainly major confrontation is the autocrat versus the village square. Were seeing that in ukraine and the arab strain, libya, little bits and pieces in china, and those two forces, the square and the autocrat are one of the defining features of our day. So i was beginning to say, when i talked about how order is essential for our era, thats the crucial confrontation in giving the square the power to organize is crucial. You look charlie but it also makes order more difficult. Right, but you have to teach people to accept authority and hierarchy. You look at the occupy wall Street Movement and it was not a lasting movement because they wouldnt accept authority and create charlie within ranks. Yes, and everything is a flash in the pan if you dont have authority and institutional structures. Charlie great to have you, david brooks, New York Times columnist. Cant wait for the book. When will it be out . A year. Charlie back in a moment. Stay with us. Charlie ben horowitz, cofounder of andreessen horowitz, a mentor to the new generation of tech entrepreneurs. Mark zuckerberg calls him one of the most important leaders not just in Silicon Valley but the Global Knowledge economy. His insights on founding, managing and investing in Tech Companies are compiled in his new book, it is called the hard thing about hard things building a business when there are no easy answers. I am pleased to have ben horowitz at this table for the first time. How could that be . Thank you so much. I appreciate very much being here. Charlie Marc Andreessen has been here many times on the show. And hes always good. Charlie so you once described him, i think, as the beyonce and you the kellie roland. Charlie tell me about your background, what brought you to Silicon Valley . An interesting thing. I grew up in berkeley, my grandparents were communists, my father is a fairly colorful figure, a political rabbl rebele rouser. My mother was a nurse. It was a defense transition for me to go here. I learned about computers when i was a kid and i just thought they were going to be everything and changed the world. If youre into computers, you end up in Silicon Valley. Charlie you just loved them at first knowledge . Yeah, well, i loved, you know, working with them. I was always the kid who you buy me an alarm clock and i take it apart to figure out how it works, so i was kind of an engineer at heart. And when i understood the math on how fast things were growing, when i first kind of understood moores law in the eighth grade, i never forget the feeling, like the world is going to be completely different. Charlie you got to Silicon Valley, what did you do . I joined a Company Called silicon graphics, which was, for those in Silicon Valley, was the google of its day, where every engineer wanted to work. They had the greatest engineers, the best environment for engineers and they made these computers that were charlie with jim clark. Yeah, jim clark. Charlie oh, yeah. And they were the computers that made the movie the terminator. What an amazing thing. It was just kind of love at first sight. As soon as i got there, i was, like, this is so much better than the other jobs i had which were, like, being a bellhop and waiter. I couldnt believe it was called work. Charlie did you make your way to netscape . Yeah, over the years, i made my way to netscape and actually just got myself an interview there. Charlie with marc . I did interview with marc, my partner, and he was a kid. He must have been 23 years old when he interviewed me. Charlie it wasnt a traditional interview, was it . No, no. It was mostly him trying to learn everything i knew. It was just, like, what do you know about everything . Right. Why did you go into Venture Capital with him . So when we were entrepreneurs charlie because i announced it on this program, i think. Thats right. You were the very first thing that we did. Charlie yeah. When we were entrepreneurs, we always felt that the best companies, including our own, were the ones run by the inventer, the ones run by the people who started the company, and Venture Capital, at the time, was set up for kind of the opposite. Like the inventer would invent things and get to certain point and bring in the adults, the guy who built the business. Charlie you thought they were better at the founder because the founder was a technologist generally. Because were in a technology business. Youre in the business of doing things in a better way, kind of a better way of doing things. So, at some point, somebody is going to catch the invention that youve made and youre going to have to invent something again. And if the inventors arent running the company, if the innovator isnt running the business, thats the end of the business, and what we saw is the great, Great Technology companies, places like hewlett packard, microsoft, oracle or google were all run by the founders because they could keep hitting new product cycles, which the ones run by professionals end at the product cycle. Charlie its often the case Venture Capital firms force founders because theyre providing money and bringing in somebody whos a dazzling business person. Yes, yes. And, you know, startups can drive Venture Capitalists crazy, if you come from a financial background used to getting straight as and you look at a company and its oh, my gosh, its chaos in there, and freaks them out and has them bring in a professional, but thats strategically dangerous. Charlie soon after aol acquired netscape, did you and mark and a couple of others founded it elsewhere. At that time it was loud cloud, kind of the original Cloud Computing company. If you go back in the literature, cloud wasnt used till loud cloud. We were the ones who put it on computers. Didnt work out that well. We were about eight years too early. Charlie interesting aspect of technology to me, sometimes you can be too early. Oh, absolutely. In fact, thats the more common mistake than being too late is too early. Charlie what does it mean to be too early . Well, a lot of the internet bubble is too early. A lot of the ideas from 1999 that everybody laughs at and made the funny movies about and. Bomb and all that, but the cost structure was wrong. It was very expensive. It was proprietary hardware and there was no cloud really available. And the audience was tiny. The internet at the peek of netscape, there were about 55 Million People on the internet and half of those on dialup, so thats not a big market. But that same idea, if there were 2. 5 billion people on the internet, might work, so thats really what it means to be too early. The seeds are not sewn for you to grow your wonderful garden. Charlie and microsoft had some products that were too early, too, as big as they were. Oh, yeah. Charlie th as Technology Oriented as they were. Their technology called courier was a tablet, quite a brilliant design, and the guys who built it have a new Company Called 53 which is building quite an amazing product, probably the best product for a design for tablets thats in the world right now, and they were the microsoft guys who built the tablet long before apple and arguably with a better design, but it was too early, microsoft, for a lot of reasons, canceled it and, you know, here we are. Charlie what are the reasons . Can you have multiple operating systems, the cost, is it going to work in the market. Theres always reason. Charlie why did you write this building a business when there are no easy answers . Two kids, 20 years old and just sold their business to facebook for 2 billion, lets go to Silicon Valley yeah, lets go, right. Charlie its that easy. Turns out those guys well, youve interviewed a lot of them so you realize how unusual they are who build these things. Charlie whats unusual about them . What do they have . Youre an advisor to them. Well, one is an unbelievable original view of the world. They believe something, peter says what do you believe that nobody else does. Charlie great saying. Its a great interview question because even if you know its coming, its very difficult to answer. Its okay, if nobody else believes it, my interviewer doesnt believe it, what can i say . I can say marc answering that question. Maybe you know something he doesnt know and now hell know it. Right. So you need someone with that original thinking and then the other side of that which is the courage to kind of both say it and then build a company around it and thats a tremendous amount of courage and, really, the underpinning of the leadership that you need to build a company. So aristotle said courage is the first virtue and the reason is you need it to activate any of the others. You may have integrity until, like, youre going to lose your job over your integrity, then you may lose your courage and your integrity. Charlie right. So courage is fundamental and whats required to build a company and is very rare to have that kind of brilliance and that kind of courage in the same person to build one of these things. Charlie whats the most common mistake they make . Well, there are so many mistakes. You know, i think one charlie yes, i know. I think probably the most common mistake is trying to be consistent. What happens is you get an idea, sell people on the idea, investors, employees, and you get into it and the idea turns out to be wrong, but you want to be consistent and you hold on to it longer than you should. Its better to be right than consistent and thats hard to learn, particularly early in life. Charlie whats been the reason for your success of your Venture Capital firm with marc . Why is his name first . Well, hes beyonce laughter it was actually an argument where he wanted my name first and i wanted his name first. Charlie really . Yeah. Charlie why did he want your name first . One of his points is it has a better ring to it. And then he wanted to make it clear that it was the partnership and not kind of his thing. I argued the other way because, for me, we needed people to know who we were, which is the whole reason we used our own brands on it. His brand was just so much better than mine that having him first would make it so everybody would know him, even though nobody knew me. Charlie you invested early in facebook. Did you know something we didnt know . Well, you know, facebook, i think that, for me, not only early, but charlie marcs on the board of facebook. Yeah, marcs on the board and we had known mark for many years. Charlie Mark Zuckerberg. Mark zuckerberg. And the original investment and how long, you know, weve held the stock and kind of not worrying at all about the i. P. O. Pricing and so forth is all about Mark Zuckerberg, who at least in my view is definitely one of the greatest tech c. E. O. S there is. Very, very, very smart, very courageous, done a great job of managing the company. So a lot of things people have identified is, oh, like facebook has this problem, you know, teenagers are drifting, or facebook has that problem, theyre not on mobile yet. All true, but if Mark Zuckerberg is running the company, dont worry about it, he will solve it. This is not a static company. Charlie or like he doesnt know that. Yeah, he knows it and is going to do something about it. Charlie hes known for a long time he had to figure out a way to get advertising on mobile. He doesnt have to make Nuclear Fusion work, just advertising on mobile laughter charlie how about skype, what did you see in skype . Skype was a different kind of thing which, at that time, nobody wanted to buy skype from ebay, even though the skype phenomenon was impressive, but there was an intellectual property issue where ebay didnt own all the intellectual property to have the company. In fact, they didnt own the most important piece of intellectual property. So when people possess the investment, they said, well, theres a chance that the founders will sue the company, shut down the service and then your 2. 5 billion will be nothing. So you cant make a 2. 5 billion purchase if its going to be worth nothing. We looked at it differently. We looked at it from the founder point of view which is the last thing founders will want to do is shut down skype. So even though they might be able to do it legally, theyll never do it. So its just a matter of what is the price at which theyll sell us back the intellectual property and that turned out to be reasonable, which you would expect, and thats how we were able to do that investment. Charlie did you make the investment in oculus before facebook . Yes. Charlie how much before . Four months. It was one to have the best investments it was one of the best investments weve ever made, very good return. Charlie marc is on the board of facebook . Well, he recused himself from decision making. Nobody tells zuckerberg what to do, even if he had wanted to. Charlie oh, Mark Zuckerberg has that kind of personality, too. He knows whats best for facebook . Yes. People have been trying to tell i think he even said people have been trying to tell me i have been wrong all my life and, so far, i havent been wrong. Charlie whats happening to the stock prices of Tech Companies . They go up and down. They go up really fast and go down and bounce a Little Charlie seriously, tweets, mark raised questions about high evaluations. Well, you know, on private companies is a little different than Public Companies. Charlie no, i understand. There has been kind of a shift with traditionally Public Market investors getting into investing in private companies and thats, you know, partly because the rules of Public Companies have changed enough that private Companies Stay private much longer. So things that used to be public investments are usually private investments in terms of the stage of company, so anytime you have a lot of capital entering a certain stage of a market, you know, prices go up. Its kind of the nature of it. Thats definitely happening in sort of the later rounds of Venture Capital. Charlie heres something i do not understand. I have no idea about whether its going to be successful or not. You know what im talking about, bitcoin. Were in Silicon Valley where many of us are super excited about it. Charlie really . Yes. Charlie you could start by tell us who invented bitcoin laughter whoever did should get the kind of noble prize in mathematics and Computer Science. Its an amazing Computer Science breakthrough in that it solves a 30yearold problem and enables you to transfer, not copy, but transfer a piece of digital property from one person to another, and thats never been possible before. Charlie what do you mean by digital property . Money, an mp3, a contract, digital car keys, anything where i can have something and then i can give it to you and i no longer have it. Thats just not been possible. So when you think about, well, what is that change . Well, it kind of changes everything. You you have money on the internet. One problem for Media Companies has been that, you know, theres no easy way to kind of buy anything. So if you dont have something that people really want, then you have to rely on advertising dollars, which you need tremendous scale for because people dont want to put their credit card on the internet because when they do someone will take it and bill them every month and you have to call them tuesday at 3 00 a. M. To get it back. So it solves that problem. I can give you a dollar or a penny and i can read your article or a nickel and, like, were done. You dont have my address or your phone number, you just have my nickel. I can load my browser and read stuff. Charlie spam. Everybody gets spammed all the time. Easy with bitcoin, charge everyone 100th of a cent for spam, done. So you need a Stock Exchange and a third party to do a lot of things to act as a trusted service. But bitcoin because you can transfer property, you can trade stocks like the new york Stock Exchange. Charlie so you think bitcoin is stunning or whatever word you use. The internet of money. Charlie and what are those people who talk about most of the people are engaged in bad conduct, criminal transactions. Well, i think thats a little bit of a misunderstanding of what has gone on. In fact, you notice that a lot of guys have gotten arrested who used it for crime because its actually very traceable because what bi bitcoin is a ledger. Every transaction gets recorded in a ledger. Its pseudoanonymous. I can send you an email from Fred Flintstone but it comes from me. But if somebody wanted to figure out who sent it, they could. Thats how bitcoin is as well. So its not really an anonymous guarantee, its a pseudono, pse, maam now guarantee pseudoaanonymous guarantee. Charlie the internet is here and will exponentially grow. Its really interesting and were at the very early days of it. You know, what happens if you can put anything on the network. I think probably the most interesting applications are things that people havent thought about. I mean, its probably not programming your house. Charlie exactly. We get pitches on that. Oh, when you walk in the door, the lights turn on. What if my wifes asleep on the couch . Charlie what do you mean by the internet of things . Well, its much more anything that you have can be connected to the network and, so, at that point, you can there are a lot of services and other things, like one example is just like security, so if you have, you know, security cameras now, then youve got to kind of you know, they sit somewhere, like maybe you can record them to a big car driveway you never look at and so forth, but with the internet of things, they can be connected to other things, like, you know they can be connected to the cloud and people can analyze the data and figure out interesting steps. Charlie its easier to teach an invariety to be a c. E. O. Than a teach a c. E. O. To be an invariety. Yes, i really believe that. The c. E. O. Skill set is a mystic skill set. One of the things i try to do in the book is demystify it. Why do you have an organizational design . Why do you put a process in place . Why do you have a meeting . These kinds of things are important. Charlie your single biggest personal improvement as c. E. O. Occurred on the day when you stopped being positive. Yes. Thats an interesting story. It actually was a conversation i was having with my brotherinlaw who worked for the phone company climbing the telephone pole and installing peoples phones and so forth. I knew one of the executives at the company he worked at and i asked him, do you know chuck . And he said, oh, yeah, chuck comes along once in a while and blows a little sunshine up my butt. You know, it took me aback. I was, like, wow. So i wonder if people are saying that about me . They probably are. And it kind of just got me to understand that, you know, as a leader, honesty is one of the most powerful things because honesty is the basis for highquality communication and, in companies, communication is really the most fundamental and important thing. Charlie coming to the end here. This thing about you and rap music. That thing laughter charlie you look different than a normal rapper i know. Yeah, thats true. Well, life has taken me down a different path since i started rap. Charlie its an interesting story how you started. It had to do with a friend. Yeah, was shot. Charlie yeah, was shot and blind. Blind. Charlie tell the story because it was a heart warming story. It was kind of out of desperation. A friend i grew up with who was more like a brother to me, he got shot and became blind and incredibly depressed as you would expect as a kid who got shot in the face, and i was trying to search for ways to cheer him up and, at the same time, you know, this whole, like, thing, this rap music thing was erupting in new york in 1986, and when i listened to it, i was, like, wow, these guys have nothing at all, but theyre very proud and positive about it and just talking about what theyre going to do despite the fact they come from these areas and have all these problems. And i thought, you know, first, i is sent him the music. Thats the first thing i did. But then i thought, you know, we could be a rap band and rap about being blind and, like, that would be just so cool, it would be the best, and we called it the blind and deaf crew. And its kind of, you know, the power of the art form and the power of the music has been with me since that time. Charlie but he got into it and it changed his attitude. Oh, yeah. It made him a whole new person. You know, in my view, it saved him and, you know, hes doing great now. Charlie helped him with the depression. Right. Charlie you wrote this book for young entrepreneurs so they would know how to be a good c. E. O. And have a realitiesest view. Great to see you. Great to see you. Charlie the hard thing about hard things. Thank you for joining us. See you next time. Announcer the following kqed production was produced in high definition. Must have soup the pancake is to die for it was a gut bomb, but i liked it. I actually fantasize in private moments about the food i had. I didnt like it. You didnt like it . Dining here makes me feel rich. And what about dessert . Pecan pie, sweet potato pie