Tech Deciphered

In this episode, the end of our 2nd Season, we close our discussion on the crisis that is upon us and deep dive on what will happen next. We finalize with a brief recap of our season 2 and on what we got right and wrong.

Navigation:

Intro (01:34)

Section 1: What Will Happen Next

Section 2: End of Season 2 - a Quick Recap

Conclusion

Our co-hosts:

Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmitt

Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Bertrand

Welcome to Tech Deciphered episode 34. This is our second episode on the bubble that's finally burst winter that has arrived. We will talk more in this episode about what will happen next. If you want to listen to our episode 33, where we talk about what has happened, what is happening, go back to that episode. And for this one, we'll be focused on future, short-term, medium-term, where we believe this is going.

Nuno

So what is happening next? There were some significant changes in the world that we're really not coming back from. And we've heard some amazing things and some well-written analysis, or at least some very pointed notes from people like Benedict Devin and many others that we have inspired ourselves with.

Nuno

But in effect that the whole notion of digitization is true, I think we have had a forced digitization over the last two years, which has really brought us forward. Our ability to do ecommerce, our ability to actually use services that we legacy services and have ways of interacting with those services that are more virtual than they were ever before, our ability to get telemedicine and many other things.

Nuno

So there's been a lot of moving forward that has been positive. There's a lot of things that, in our personal experiences, for example, in the home, we don't accept anymore. I think Benedict was the one saying no one is going back to cable. I'm not sure that holes in that sense, but obviously there's been a lot of court cutting streaming seems to have one day. Clearly, it was already relatively clear. Probably, it got accelerated through COVID.

Nuno

We'll now see the reckoning of that in the next few years on who's going to be the big winners in that space, but certainly, I think that's moved forward. The ability for us to really communicate with each other at a distance is now a theme that needs to be addressed by everyone. So it's no longer an afterthought. It's not like, okay, oh, maybe we can get on a plane and go somewhere. No, no, no, no.

Nuno

Do we have a good way for our team, for example, in a professional environment, to interact with each other at a distance? What are the tools we have to do that in? So all this notion of hybrid versus remote versus being in the office doesn't really matter. Remote work needs to work. And we've learned our lessons and there is a lot of tools missing. There's a lot of things that haven't been done properly.

Nuno

We also know for a fact that there are pieces of the acceleration that we saw in biotech driven by COVID and the vaccines that ultimately are here to stay. So there's definitely not a going back on this either. Obviously, there's a lot of work still to be done in digitization, in particular, across different sectors of the economy.

Nuno

But honestly, with all the tragedy that COVID has been and all the crap that we've been embedded in for the last two years as a global society, the silver lining is, guys, we've got the digitization we've been asking for. The whole digital transformation stuff we've been talking about, it happened in two years, what probably would have taken 10 years.

Nuno

And again, it's not perfect, there's still pieces missing. But even the pieces that are missing, I think, because of this shock that happened to the world, we are all working from home. Because of the shock, the pieces that are missing are now much clearer. The flaws in the systems and tools that we had are all much clearer.

Nuno

Again, I think this is an amazing situation for us to be in as investors. This is an amazing situation for us to be in as entrepreneurs. It is now clearer that there are things missing that we can build.

Bertrand

I totally agree. A lot of things got accelerated are not disappearing. Another big example is around the cloud computing. The move to the cloud has been accelerated. It's more efficient, it's easier, ultimately, for many cases, less costly. So this is not something we are coming back. The same with mobile devices, which in some ways, strangely enough, did pretty well.

Bertrand

Mobile devices, mobile content in a situation where a lot of people were spending much more time at home. But even at home, you prefer the smaller screen that you have really everywhere with you. You don't just want to be focused on one big screen. Some of those sectors are going to probably go a bit more back to normal.

Bertrand

Edtech has seen a lot of tension, not just because of COVID, but also because of regulations and changing platforms rules. Edtech is probably going to face a lot of unknowns, especially in front of an economic prices that are coming. Ecommerce, we probably keep moving forward, but as we have seen, it has been coming back a bit more in line with past trends.

Bertrand

But obviously, yes, a lot of things are not coming back, a lot of habits are not coming back. It's still amazing for me to see how now everyone, there's a video confer individuals, professionals, such situation, investment situation, stuff that in many cases were not possible, two, three years ago, would have been seen as a platform.

Bertrand

Yeah, it's that acceleration of digitization is there to stay and more is to come. And I would say you could even argue that with an economic crisis where typically you want to optimize your spend more, there should be more digitization because people will realize that the most efficient channels are digital to which consumers transact with them. And you will need to be even more hardcore in order to optimize your spend.

Nuno

In some cases, the nuances of what happened during COVID have become very apparent in the last few months in particular. So for example, for us, one thing that wasn't clearly solved in this whole stack of communication within the Enterprise and within the company was definitely the water cooler moments, the ability that people have going to each other's offices or each other's desks and asking something about something else that's very quick in answering.

Nuno

And for example, for us, that has led us to some thinking around that thesis, we actually might make an investment in that space, so I'm preempting a little bit that. But there's definitely pieces of the puzzle because they got so disjointed they became clear.

Nuno

The notion for me right now that is super exciting is this acceleration that we got, nobody probably would have asked for it that we got a global pandemic, but it provided a shock to society that has at least given us some positive things. And those things are things that we can build upon that can help us move forward across a variety of areas.

Nuno

One is that there's been obviously advancements in artificial intelligence. We've been paying attention quite heavily at artificial intelligence. We think we are now at the point of what we call the app economy and artificial intelligence, where there is a lot of leading platforms that you can build on top of. And so what you're effectively doing is you're being amazing in terms of algorithms.

Nuno

You have amazing engineers with you and data scientists that really allow you to go to the next level, in terms of how you build your own platform around existing and underlying platforms. I think we're going to see advancements around artificial intelligence that go well beyond it. That what got us here is not what is going to get us to the next level, what got us here was brute force.

Nuno

The next level is going to be finesse. It's going to be smaller datasets, better algorithms, bare methodologies, less computer or compute intense methodologies. A lot of exciting stuff happening around it.

Nuno

And we've talked a lot about other big advancements. Quantum computing has moved forward. I'm not sure we're there yet, to be very honest in that field. Biotech has had incredible movements. I think anyone that's in biotech today should feel like totally vindicated that was the right choice.

Bertrand

Yes, indeed.

Nuno

That's something for the future. Anyone that's around data manipulation and from anywhere from data quality, data engineering, data science, it's essential. The word becomes more digitized. Data becomes actually more important even. There's a lot of amazing things happening in the world. And obviously one of your favorite, which is nuclear energy and nuclear fusion.

Bertrand

I've been a big fan of nuclear for more than 20 years. I'm glad that finally, this is something that is back on the table for people who are thinking carefully about how you solve energy needs instead of proposing to go back to prehistoric times and stop using energy. I'm very excited that nuclear fission, it's back on the table that companies are investing more into nuclear fusion programs as well.

Bertrand

That's two fantastic technologies. I believe we absolutely need more of them. You take one famous example, in France, around 80% of all electricity is nuclear. That's a big difference in terms of energy dependence, but also in energy pollution. Let's not forget there is no pollution coming from a nuclear reactor,...

Winter Has Arrived - the Burst of the Bubble and the Crisis Upon Us… AND WE GOT IT RIGHT!

In this episode, we share … that we were right, all along. We were in a bubble and the crisis is upon us. We share context on the current crisis and what is happening, exactly at a macro level - inflation, recession, over-stimuli, etc - as well as in the start-up and VC world.

Navigation:

Intro (01:34)

Section 1: First of All… We Told You So… Repeatedly (02:05)

Section 2: What is Happening…Exactly (04:25)

Conclusion (41:37)

Our co-hosts:

Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmitt

Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Nuno

Welcome to Episode 33 of Tech DECIPHERED. This will be the first of two episodes on the bubble bursting. We've called it very nicely. Winter has arrived when we're really in summer. Today's episode, we're going to go through what's happening exactly in this bursting of the bubble. But let's actually start with congratulating ourselves in having predicted the bubble. There was a dramatic bubble and that it was going to burst, which we did in our duology on the bubble a couple of episodes ago Bertrand.

Bertrand

Yes, we released these two episode in October or November, about the bubble and how was supposed to burst at some point. I guess timing was perfect to talk about the bubble when it was at the top of the bubble, right before it start to explode. I think you could fit it in a lot of our discussion in the past two years on our podcasters, that we were on one side amazed to see the increase in transaction values, in VC financing and startup financing, and at the same time, constantly reminding that didn't feel right, and this was probably just a big bubble, and we call it right. It's not just about congratulating ourselves. At the end of the day, it's a pretty scary times for everyone, but obviously, it happened for a reasonw and [inaudible 00:01:19] reasons, and that will help us understand what happened and what's going to happen.

Nuno

Maybe a parenthesis... I think we got it right in several ways because when COVID first hit, we were predicting that that mini-crash was going to lead to a fundamental crash, and it didn't. Part of what we're now going and suffering through was that, because there wasn't that crash, and the market continued to go bull market for another two years, thank you very much, because of governments giving money, incentives to consumption, a bunch of stuff that was really artificial now we know, we ended up actually having top of the market when we did launch the duology in 2021.

Nuno

I know it's not a great signal. I certainly, I think, in my own professional activity as an investor, in looking at companies et cetera I've used it. I used it throughout to advise my companies, "Raise now when never knows when it's going to burst", "Make sure that you have a plan B". There was a lot of things that instructed me in how I behaved within my professional activity.

Nuno

I'm sad to say that it didn't inform everything that I do. I probably could have avoided one or two things on that if I'd sort of followed my own advice on it. But in some ways, having been disciplined through the last year and a half, two years, and now we looked at investments. In some ways, I feel a bit vindicated. I don't want to do the "I told you so", but we told them so. Now, we have plenty of proof that we told them so. There's episodes, two episodes that talk about it in October, November, last year. Although I know this is not about really being vindicated or not, it is good to know that we weren't smoking dope, that we were seeing something that made sense.

Bertrand

I will say that the sad truths about this and about people who tell you they cannot see the bubbles, because actually, you can see the bubbles, actually. It's pretty obvious and I think you have to be pretty blind not to see them. Unfortunately, our officials, elected or not, seem to be totally blind to this sort of stuff. I don't know if it's simply incompetence or if it's on purpose, but this is what we have to deal with at this stage. Maybe to go back in time, as we discuss, indeed, initially, we are very scared about the impact of COVID you don't put hundreds of millions in lockdown. We saw consequence. Early on it was probably the best approach. You don't know what's happening. You don't know how bad it is. You don't know how it works. You don't even have access to masks or testing, so you have to take a lot of precautions. I think that initial reaction, which was not immediate, by the way, it was only after it was probably too late, made sense. Beyond that, I think that's when the craziness started, when we kept locking down too much, when we started to print money too much, I must say, I didn't see that we would be so fast on the printing press.

Bertrand

I was reading an article recently, and they were saying, "It took us two months in 2008 to push the printing button. It took us two weeks in 2020 to push the printing button. I was expecting myself it will go down further and it would take longer for recovery. But I was obviously underestimating what was the readiness of the government, the central banks to print money, distribute money and send checks to everyone, to do nothing. Obviously, it just delayed the inevitable and you probably could argue it made worse as inevitable. I'm really not happy to hear a lot of self congratulations from a lot of people to say it was the right thing. An early reaction was the right thing, but continually printing money as if nothing happened for two years is another story. That over-stimulus is probably the start of all of this. Do you have anything to add on the over-stimulus of the economy? When we talk about this, obviously it's happened in Europe, in US, in Japan, in many countries.

Nuno

I think the initial reaction was the right reaction. It was truly tragic and everything was happening at the same time. I think the stimuli that were applied in different parts of the world, obviously we don't know all the policies by heart, but we can look, for example, at the U.S. I think the indiscriminate stimuli, I'm not sure is a good practice. We need to follow the money when it happens at scale and you give money to everyone, even some people that might not necessarily need it, or it's extra savings or whatever. What are people going to do with it? They're going to apply it to something that they believe, "You know what? I might as well apply it to something that gives me high returns." Maybe it's higher risk. We saw, and we've talked about this before in a couple of other episodes, and move towards putting into public equities. We saw that the public equities were ridiculously overvalued. The reason for that is also because at some point in time, bonds stopped being attractive, and other things stop being attractive because of how the economy was moving. Where did you put your money?

Nuno

I'll put it to public equities. Then valuations public actors go through the roof. The multiples of public equity companies are commanding, are going through the roof. We always know what happens next. What happens next is then private markets going through the roof, the later stages goes first, then the mid-stages, and then early stage. We saw this panning out very cleanly. Then there's a little bit of lag in markets, the corrections starting in November. But it took, I think, until the beginning of this year, probably the end of first quarter, maybe beginning of second quarter, for us to start really seeing significant withdrawals in the private markets, where term sheets for early stage investments were being renegotiated because people didn't want to pay that valuation anymore. Investors were just scrambling at some points, there were a couple of term sheets that were left on the table where people and investors just walked away. Now we're back to a market that, obviously we'll go through a tough time, and we'll talk about what's next in our next episode. But it will go through a tough time necessarily. There was an exaggeration of everything. I mean, entrepreneurs that were raising left and right, and they were like, "We're the best thing to slice spread" and they were not.

Nuno

There was just a lot of capital and the capital needed to go somewhere. Everyone was flush with capital to give around. In some ways, after a big, big, big high of a bull market, now we're going to have a low, low, low, low because these things need to rebalance over time. For me, that's the big issue of the over stimuli... The over stimuli, if it hadn't been applied to other things, if it had been focused on consumption of things that were really necessary, if it hadn't been applied, for example, to savings accounts in certain circumstances, if it hadn't been done in discriminate way, maybe after the first check round. If it had been done in a different way, and I know politically this sort of creates all sorts of cans of worms, but if it had been done in a different way, maybe the over stimuli would have been more positive than it wasn't the end. In the end, it propped up a bunch of stock. It propped up, also a lot of investment in crypto assets, which were even riskier. That crash we haven't seen yet. We're going to see it. We started seeing some of the early signals of it, but it will happen and there will be consolidation.

Nuno

It's not that crypto is bad, it's not that Web 3 blockchain is bad. It's just it was too much....

In this episode, we end our discussion on Leadership and Management: we delve into how to execute; explore values systems, including our own; and share our core beliefs. 

Navigation:

Intro (01:34)

Section 1: How to Execute (02:08)

Section 2: Culture & Values, Our Core Beliefs (20:11)

Conclusion (34:57)

Our co-hosts:

Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmitt

Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Bertrand Schmitt

Welcome to Episode 32 of Tech DECIPHERED, our second and last episode of this series on leadership and management. In our previous episode, Episode 31, we focus on defining leadership versus management. We spend time talking about the different styles of leadership management. In this episode, Episode 32, we are going to focus on how to execute and how to create and build the right culture through the right values.

Section 1 - How to Execute

Nuno Goncalves Pedro

How to execute, how to do this? What are the levers that you have to lead and to manage?

Bertrand Schmitt

I would like to share one perspective I've got, what the CEO's job? I'm talking about a company at some level of scale, obviously not five people, ten people team, but we're talking about 50 people plus type of company. What's your job at scale? I believe that you have to have on one side a deep vision, clear vision. You have to bring your team on board.

You have to either keep convincing your existing team, bring new members on board, evaluate existing ones, and you have to manage the cash, because if you run out of cash, that's a big problem. In a way, there is this metaphor of being like the bus driver. You have to view outside of you, you have to let people in, sometimes, unfortunately, let people out, and you have to keep the gas. If you don't do all these three, at the very least, that's big trouble for the business.

As we discussed, if you are a tech organization, specifically a tech company, you probably need to be as well a product CEO. But at the very core at minimum, you need these three vision, bringing a team, managing cash, as the key pieces of the game as a CEO.

Nuno Goncalves Pedro

Agreed. I would make a caveat here, which is my view on product CEOs in tech is they are the most dominant type. There are other types that work well, in particular in the B2B environment, in business-to-business. The more commercial-driven CEO, the person who has extreme experience in sales or in business development or corporate development. We've seen a few of those people doing very well in B2B.

Again, by nature, tech product CEOs do relatively well. But in B2B, certainly I think we've seen great examples of amazing CEOs that, honestly, are not that technical. But they are very good at selling and they're very good at doing a bunch of other things. There's a few people that come to mind, but again, not to get any hate mail, I will not go into details.

I agreed fully with your vision, Bertrand, and the metaphor is very accurate on the bus. The job of the CEO has several dimensions to it as well. Effectively, a CEO needs to manage for the long term and for the short term, and when managing for the long term, strategy comes into play. A set of integrated actions that leads to competitive advantage. Normally, you measure it in years, two to five years. It's something that is really far in the future.

You have tactics. Normally, tactics is something that you think through as more the one to two year things. It might be a big initiative, a big product launch, something that is neither four or five years from now, but certainly not something that we're going to get done this year. You need to think through how that is done and then serve the classic final pieces operations, which is the one month, three months, six months, one year, we need to get this done. What are we doing in our day to day and how are we thinking through this?

In some ways, the CEO role is very difficult because of this, because it is a little bit of a necessarily paranoid role where you're always looking very, very far ahead and trying to think about two to five years, how big can this be and how can we scale, et cetera, but at the same time, you're thinking about right now and what happened today and how can I compete and how can I go and do this, et cetera.

What makes this particularly difficult is time allocation, for example. How do I allocate my time? I remember having clients at McKinsey, one client in particular, I won't name them, but one client that one day turned to me and said, "I envy you." I said, "Why do you envy me?" This guy was CEO of an organization. He said, "I envy you because you have time to actually think about my business."

I was like, "Wait a second, you're the CEO of this business. I'm a consultant. I'm leading a team of consultants working on projects, engagements for you. How can you say that?" "I went to my calendar, and I would estimate that, at most, I have 15 to 30 minutes a week that I get to actually have thinking time about my business.

Normally, I'm just basically 80, 90% firefighting crap, stuff that happens, that just goes across whatever. I get maybe 5% more on managing stakeholders, board, customers, clients, whatever, in a more proactive manner. It's not so much firefighting, more proactive, whatever. Then there's very little time left for anything else. You guys, in whatever three-month engagement that you're doing, for me, will have more time to think about my business than I did in the last six years."

In some ways, I know he was exaggerating. This was not a badly run organization, just to be clear. Sometimes you do work with badly run organizations. It was just a very large organization where the CEO, at the end of the day, his role was just tough. It's tough to think strategically when you don't even have the time to do it.

Bertrand Schmitt

It was not just on being you because you were young and handsome. That was for other reasons.

Nuno Goncalves Pedro

I was young back then, I'm not sure I was handsome, but it was many kilograms ago. How is that handsome?

It shows the difficulty of the role. For example, one thing that I always do when I have leadership roles in different organizations is I carve out time to think. I put time in my calendar. I'm extreme calendarer as many people have told me. I put time in my calendar on a weekly basis to actually just think.

I create situations in which I think. I create situations where I can be in my backyard overlooking the ocean and I think, I can create situations in which I go to a place that is particularly pleasant to me, like drinking coffee or whatever, to think. To be very honest, a lot of my best ideas in terms of forward-looking strategic elements and even sometimes even operations, like day-to-day stuff that were not cracking.

Some of the best ideas come during those moments where your brain just creates the space to not have the day-to-day biases. The bias towards an action that comes after another action. The bias to say maybe this is the wrong way, maybe we should just change this. I think having that discipline, the discipline to create those spaces is very, very important.

Bertrand Schmitt

Yeah. To double down, because it's an important topic, sometimes I see people who tell me, "Oh, I only have time for the tactics." I think it's a big mistake. You absolutely need to do both. When I say you need to do both, if you are the CEO, maybe you are stronger on one side or the other, but that's why you have to build a team and work out all together.

Ultimately, you need to spend enough time on the short-term view, running the business, operations, and the long-term view. What does it mean? Why are we doing this? What's our strategy? How are we going to get there on the longer run? You have to combine both. People will tell you they can do only one thing or the other. They don't have time. You have to make the time to do both well.

Strategy without tactics, you are going to die pretty quickly if you don't have the execution right. If you just have the execution right, you are going to run very fast to a cliff or to a wall. Both don't work. People have to really get that to build a great and maybe even a good organization, you need absolutely both. You need to get right both. Not negotiable.

Nuno Goncalves Pedro

I studied with Professor Burgelman at Stanford back in the day, and he wrote this book called Strategy is Destiny that formed a lot of my thinking around strategic planning. I had a variety of strategy roles in my career, and in some ways, I always thought the title of the book, I told him this, shouldn't have been Strategy is Destiny, but Strategy is Direction. Probably less sexy of a name, I guess.

Strategy defines where you're going to, to shoot to find North Star. A lot of people think about strategy as beautiful charts in a slide deck. It's not that. Strategy, as I mentioned before, is an integrated set of actions that leads to competitive advantage, right? There's actions for strategy.

For me, tactics then becomes a little bit the pillars, the building of the core pillars, the present ones and the future ones. Then operations, to your point, is the building, it's getting stuff done. It's, "Okay, how do we now move this?" That's how I look at these three dimension, strategy, tactics, and operations put together.

One other topic is the whole topic of, and we've already addressed it a little bit, of breadth versus depth in the CEO role,...

In this episode, we demystify Leadership and Management: we delve into what sets them apart; typify the different styles; explore values systems, including our own and share our core beliefs. As always, we go below the surface and deep dive into this topic, at a time when it matters more than ever. This episode, on the topic of leadership and management, will be concluded by episode 32.

Navigation:

Intro (01:34)

Section 1: Definition (01:58)

Section 2: Typifying Leaders (06:34)

Conclusion (38:56)

Our co-hosts:

Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmitt

Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Nuno

Welcome to our Episode 31, the first of two episodes on leadership and management. Bertrand and I will demystify leadership and management, define the difference between both, typify them, explore value systems, and also share our own core beliefs. As always, no BS. We will go below the surface and deep dive into this topic.

Section 1 - Definition

Nuno

From the ground up let's start with the actual definition of this and a bit of a caveat emptor. Buyer be aware, as they call it. Obviously we will share what we think are great practices of leadership and management, but by no means these are the only practices, and by no means we aim to be professorial about it.

Secondly, most importantly, probably by sharing our own views, we're not saying that we are amazing leaders or managers. Obviously, that's not for us to judge, but for people that have worked with us, for us, with us along the years. So that is not the assumption. Obviously, there is some assumption that we have something to say about this topic, otherwise you wouldn't be listening. But we don't aim to be arrogant enough to say that.

Maybe starting with the definition of leadership versus management, and this comes from someone I used to work with, a very good friend, but also someone I worked with for a very long period of time in two different roles. The way she would qualify the difference between leadership and management is, if the objective function is to get to hell, a leader is the person that can convey to people with amazing charisma and presence that we're going to go to hell and hopefully we'll come back for sure, hopefully we'll come back, etc. The leader will likely not define necessarily very much how one will get to hell and back, but they will convince people to go with them, certainly the first time around.

A great manager might lack the charisma, but the great manager will define the steps to get to hell and back, will be clear about what needs to be done to get to hell and back. They might have difficulty in convincing people to go to hell in that first time, but it will be easier for them to convince them to go or try to go to hell a second or third time, even if they fail the first time, because they have a clearer view of the process to get there.

So again, a leader normally, in my opinion, a little bit more linked to... In some ways great aspects of charisma and management is basically linked to great aspects of understanding steps that need to be done and things that need to be done. A great manager might not be a great leader. A great leader might not be a great manager. There are very few great leaders that are great managers. So that's maybe a little bit more flesh around the definition. Bertrand, do you agree with that definition?

Bertrand

That definition would be fit for Churchill, for instance, Churchill fighting the Germans, fighting Nazi Germany. That's really what he did to rise to the occasion and convince people to fight. I think it's an interesting version. I've never heard this one. I guess you have different type of leaders, different type of situation, different type of CEO, but this one is the benefit to be very generic and very illustrative.

Nuno

Yes. We should talk a little bit about the origins of management. Management as a so-called science is relatively young. We should go back to people like Peter Drucker—may he rest in peace—people that started looking at management and formulating what management actually is and the different sides and aspects of management.

I'm a computer engineer by background. I have a Masters in science, computer engineering, and I had a professor for a management optional, but he was an engineer himself, that used to say, "Management arose from engineers not wanting to do management as a science." I always felt that was interesting.

But certainly I think Drucker is probably one of the precursors to management as a science. Obviously, if we look at management in measured ways, we can even go back to, for example, the origins of McKinsey & Company. Mckinsey & Company in the early days was very much focused on measuring activities, for example, in manufacturing, which was emerging back then in the '30s and '40s in the US, and understanding the impact that certain operations would have.

Again, management is a young science. Leadership, I would allege, is still probably not a science, still not at that level. But obviously as a science that is young, it's a science that some people still feel is a little bit BS. There's still a little bit of, "Okay, what did you study in college?"

Well, I studied economics."

And then you have someone else, "I studied management."

It's like somehow the person who studied management might not be seen in the same light as the person who studied economics. Economics feels more of a science than management, although one could also say that economists don't have a particularly amazing track record of impact in society. As a science, it may also have some work to be done.

For today's definition, we will use both leadership and management at times a little bit interchangeably. But just beware as I said at the beginning, we do believe there is a difference. The leader is sometimes a little bit more charismatic, the person who can convince people without necessarily proof, the person that can go for the moonshot. The managers, sometimes the person is more process-driven, more step-driven. Again, today we'll use it relatively interchangeable just to make our lives easier and your lives as the listeners a bit easier as well.

Bertrand

Maybe to add to your point about management being a young science, maybe leadership is still an art in some ways.

Section 2 - Typifying Leaders

Nuno

Indeed, it's still at art level. Maybe we'll see developments there that will get it to science level as well, whatever that may entail. Let's start by typifying the different styles, the different styles that we've seen of, let's call it leaders, managers.

Bertrand

Maybe we can start with one level and go back to leaders, assist manager. There is a typical, let's call him or her, quote-unquote, statesperson, chairman, visionary. So someone who will be very high level, providing very high level vision, high level orders, maybe some tactics, but we will rely on CEO, managers to really execute per se.

That type of person, it's pretty typical in many companies that you have a separation between these two roles to function, but some companies don't have that separation. Of course, you have the same person as chair and CEO. In that situation what you might have, however, is a CEO in the organization, someone who will be more focused on the execution side of the business. Every business will be different. What's your perspective on the chairman vision?

Nuno

It's funny because you can see Chairman Visionary states person archetypes across many large organizations in various different roles, right from VP to directors. Sometimes even individual contributors, which obviously ends up not working very well. Obviously you see it in CEOs.

The archetype is defined by people that are always at a very high level, they're always at 30,000 feet, etc. Normally they have difficulty in articulating their high-level vision and what they think they're conveying into actual actions. It's normally very difficult for this type of leader or manager to convey very specific type of actions.

Now this type of manager, this type of leader, is not necessarily ineffective. They can be effective, but to your point, Bertrand, they need to surround themselves with the right level of talent. If it's a CEO position and the person is very high level, then they need to have a heck of a COO, they have to have a heck of a chief revenue officer, a heck of a chief product officer, etc. They need to delegate a lot, and they need to work normally with teams that are extremely good at doing that translation, extremely good at understanding high-level objectives and views into actual tangible actions and outcomes.

Again, I'm not a huge fan of this type of manager. They normally skew towards, "Oh, I'm so brilliant that I don't need to get in the dirt and define actions and processes," and stuff. They're also normally that people that behave like chairpeople, chairman or chairwoman, and they show up last minute for meetings, and they show up into a discussion where everything is decided and they are the ones, "No, no this doesn't make sense, let's change it all," having a convincing opinion and decision-making logic 

They like to leave decision-making as late as possible. They would be what I would call extreme Ps in Myers Briggs Type Indicator. I'm not a huge fan of that type. I've worked with many through my career. Fortunately, nowadays I don't have many in my life, thank God. But it's that type of action. It's the action as if,...

In this, the final episode on the Metaverse - or is the Metaverses - we discuss what the Key Players are doing in the space, as well as the so-whats for entrepreneurs and investors. As you, our listeners are accustomed to, only straight talk and “straight shooting” in this duology on the Metaverse.

Navigation:

Intro (01:34)

Section 1: Key players (02:02)

Section 2: So-whats for entrepreneurs and investors (22:36)

Conclusion (30:35)

Our co-hosts:

Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmitt

Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Bertrand

Welcome to episode thirty, our second episode on the metaverse. In episode 29, we talk about our definition of the metaverse, we talk about the key enablers for the metaverse. This episode will have two section. One, first section around the key players. And we will have a section about what it means. The so what for entrepreneurs and VCs. Nuno, should we go into the key players?

Section 1: Key Players (02:02)

Nuno

And a very good segue to what the key players are doing around the metaverse or the metaverses and all these different technologies. And maybe sticking to Google again, not because we dislike them particular. I think we've shown them a lot of fondness in the past. But we're starting with another failure, Google Glass, which I already talked about earlier. I love those glasses. They were so cool. There was so much promise in it and then nothing. It was just like, nothing's gonna happen. Sorry guys.

Bertrand

For me, it was also an example of something that was hyped way too much, way too early, and totally out of context. When you have something for total geek that are only going to touch the most crazy early adopters of all, why do you start to brand it?

I remember they were showing off celebrities at modeling shows. It was like crazy. It was as if it was going to be mainstream next month. It's like, wow, a lesson of how to set expectations wrong, as if they did everything they could to make sure it was really going to fail. Because the expectations are so disconnected from the reality of how bad it was. Bad maybe is a strong word.

Nuno

It wasn't that bad for what it was. I think it's more the point of what you're making, yeah.

Bertrand

As we see today, it was at least 10 years too early. And you know there is something in history when people tell me, "Oh yeah, we're just 10 years too early." I'm like, "Oh yeah, that's not much, ten years, I guess." I don't like it when people make it wrong by 10 years. There are so many things you could do instead, especially in our world of tech, where in some ways I feel it could be predictable. Google Glass, total fiasco, because it was 10 years too early. But I said 10 or maybe 20.

Nuno

Maybe 20.

Bertrand

The jury still out for this until we have something really working. What was about this other company that was promising crazy shit and ultimately went nearly bankrupt?

Nuno

Magic leap, yeah. By the way, I don't know anyone there. I'm telling our friends just as a way to not throw them under the bus. Yeah, Magic Leap.

Bertrand

But Magic Leap is a fantastic company. I was from very far smelling a rat. I will call it a rat when you burn billions of dollars and you don't deliver at all anything of value, at least value connected to how much money was invested in the business. I wish them the best in their new version, just focused on enterprise. But there was so much bullshit.

And I'm frustrated because some of these companies are so much actively destroying value. And they have a lot of people who put years of their life, in this trying to make it work when ultimately there was not much if anything. And it's easy to create hype but it's another thing to deliver. There have been constantly shocked.

And for me, what something typical is when you're very secretive about it when you promote too much hype, you are very secretive of how it works. Typically it doesn't end well. Either you are fully secretive, like Apple and you wait until it release, and I respect that 100% or you are very more transparent. You have to be transparent.

So in a way, people probably do not like us to talk about Magic Leap because it's making their metaverse effort look in danger. But I would say that the life of tech there has been a lot of promising companies in some ways that go bust. And a few years after that, you have the real thing coming up. So I don't want to hold ourselves to Magic Leap. But that's also a sign of a market going too hot.

Nuno

Just a couple of notes. One, I think they're now led by Peggy Johnson. We're not buddies, but I have a lot of appreciation of the work certainly she did at Microsoft. So a lot of respect there. Hopefully, they'll be able to really make a business out of the enterprise side. A couple of points. One is they've been a ton of companies that have risked quite a lot of money. And even in the AR space, which is what this sort of portrays a little bit more closely to ODG, HoloLens in the end who ended up at Microsoft. But honestly, they really haven't made much with it, to be honest, either.

So there's been a lot of these sort of false starts. I think what was particularly, I wouldn't call egregious, but particularly significant about Magic Leap was 2.6 billion, just incredible. It sort of edifies a little bit the case of companies that over promise and under deliver very good salesmanship on behalf of the founder, CEO, and people that are really running with the company.

And then sort of this huge delta, what I was mentioning as vaporware early on, this huge delta between what they are promising and what it actually can do, which is not necessarily very positive for the expectations of the world and consumers and others. So I don't know, hopefully they'll make a go at it that works well for enterprise. I'm sure they have a lot of tech that they've developed over the years. They better have given all the money they raised.

But it does exemplify these types of companies that are to your point, Bertrand, secretive, arrogant, aggressive, we're the best things since sliced red. And then you go a little bit under the hood is like, I really don't get what's special. And they're not the only one. I don't think they're going to be the last one, such as the price of tech innovation.

Bertrand

I'm deeply respectful of deep tech, but I feel that Magic Leap is one of these companies that went a step too far in terms of what they promised to investors and the reality of the technology and the business. And at the same time, you could argue some of these investors might have only themselves to blame. I don't know. I'm still deeply troubled when I see that. In some ways, if you think about it, at the time it was a time when journalists were friendly to tech, I guess.

But people were not questioning much, to be frank. It was just accepted at face value. And I was still shocked about that. Going to a player that I must say I'm much more impressed what they have delivered, it's Facebook. If there is one player in the metaverse, at least today, that is open and public about what they build, it's Facebook. I mean, they built on Oculus, of course, but it has been very impressive. I mean, they went all the way from buying the best company in the space at the time with Oculus to investing huge amount of money since 2014 in that space.

And not just money, but AI research. So a lot of pretty precious resource. And it's pretty impressive to see everything they have done. And to be clear, they are probably, at least from my perspective, the best working product with Oculus Quest 2. The only issue obviously, is that it's not a massive success to the scale. It's really needed to make a difference. At the same time, it's costing this year around 13 billion of spend. One-three.

Nuno

Fair enough.

Bertrand

So of course, Magic Leap with 2.6 billion of funding and nowhere to run when you are facing a player who can spend 13 billion a year in that space. And I'm very thankful because in a way they are pushing all alone, by themselves, the space.

Nuno

For all the crap I give Oculus Quest 2 etc it is a pretty good device and it's sort of the closest we've had to real mainstream-ready VR experiences, right? So they've put money where their mouth is. They've made it evolve as a product. The experiences they're creating in terms of software, I think are still... Jury is still out.

We'll see where they head and if they really scale. Maybe they'll be the guys that'll hit it with the next Oculus Quest and that will sort of untap the whole world. Or then again, it will be our friends at Apple, and they'll come out of nowhere. They'll just launch it and it will sort of work. We'll see.

Bertrand

That's a tough part because if we look at computer history, Microsoft was very early in mobile. I had a Microsoft at the time. I forgot the exact name, and I'm sure I will be wrong, but it was called HPC, one of the first iteration of a windows mobile. Then they had a pocket PC and a palm PC. It had so many things every year to change branding.

But my point is that being first doesn't guarantee you a spot. And that's exactly what happened. Actually they had too much baggage, were not ready to make the move quickly to a new approach. Instead of having a dedicated slimmed-down version of Windows, what ended up winning in a way was an OS built from the ground up for more powerful devices. That was iOS based on macOS, and that was Android based on Linux.

...

In this episode, we talk about the Metaverse - or is the metaverses? - specify what it is/will be, debunk myths around it and detail its/their key enablers. Everything you wanted to know and also … that you didn’t know you needed to know. This will be followed by episode 30, focusing on understanding what the key players are doing in this realm, as well as implications to entrepreneurs, investors and others.

Navigation:

Intro (01:34)

Section 1: The Typical Silicon Valley hype machine?/ Definition of Metaverse (01:57)

Section 2: Key enablers to the Metaverse (17:44)

Conclusion (41:21)

Our co-hosts:

Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder at App Annie, business angel, advisor to startups and VC funds, @bschmitt

Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Nuno

Welcome to episode 29. In this episode, we will go into the metaverse, not literally, but we will discuss the metaverse, its definitions, how people see it evolving, its core enablers, and some of the lessons learned that we believe entrepreneurs and venture capital firms should have. Bertrand, metaverse, what is the metaverse?

Bertrand

Big question. I guess that's a billion dollar question. There's been so many definition of what the metaverse is or is not. I like one definition from Matthew Ball—a well respected analyst—and I believe he has his own VC firm. By his definition, "Metaverse is a massively scaled and interoperable network of real time rendered 3D virtual worlds, which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data such as identity, history, entitlements, objects, communications, and payments."

Bertrand

That's the full definition. I like it, because you are not missing any piece of the puzzle, at the same time, by its very complexity, I feel it's showing us that it's not an easy definition. It might even be seen as a very contrive definition. If you think about the internet, how different is it really? The 3D part for sure. Beyond that, it's not very clear, actually, except that it's maybe more unified than the internet that we know. You could argue if you are just inside Facebook, how different it is about just being inside Facebook and just never leaving Facebook.

Of course it to be horrible, at least from my perspective, using Facebook less and less. That's one vision. Some will say, we'll talk about what it is, but also what it is not. I will quote again Mathew Ball. For him it's not just a virtual world. It's not just a virtual space. It's not just VR. It's not just a digital virtual economy. It's not just a game. It's not just a virtual theme park. It's not a new app store. It's not a New UGC platform. For sure, it's a big buzzword in Silicon Valley these days, especially thanks to meta rebranding itself. Just from that perspective, it was huge on Google trends. Since the renaming of Meta everyone has been Googling what the metaverse is, I guess. What you think, Nuno?

Nuno

A lot of respect for Matthew Ball as an analyst, and his definition, as sound as all the other definitions that are out there. I have a couple of objections to his definition. It starts with interoperable. It starts with, "The metaverse as a massively scaled and interoperable network of real-time render 3D virtual worlds." Interoperability is not a given in the metaverse. Nobody has told us that the metaverse will be an interoperable bunch of worlds working together.

Actually, if I had to make a bet, using my computer engineer hat and architect, we will not end up in anything that is interoperable. We'll end up in silos of worlds that are interoperable between them, but they're owned by specific entities. So in my simplistic world of the old internet, if we're delayering the internet, when we're thinking through the network layers, the transport layer, where TCP/IP was lying, I think the analogous of what we're having going forward might, in some ways, be fulfilled by what now people are calling—in my opinion very poorly—web 3.0, which I would call internet three, sort of the blockchain stack and what's being implemented. Again, I'm not saying it's all going to be blockchain, but there's some elements of that that might be blockchain.

Here the analogy is, this is the upper layers, this is the application and presentation layers, that's where the metaverse will reside. If we're thinking through this, who owns the applications? Well, the different players own the different applications, and they own their different worlds. They create their worlds around those applications. What I'm seeing is, everyone's talking about the metaverse, and I'm like, "No, it's not the metaverse. It's going to be the metaverses."

That's the first issue that I have, because I don't assume interoperability, therefore you have siloed owners, and therefore it's likely that we will have competing owners. And we're already seeing that. We're going to talk about players and what they're doing, and Facebook is doing what Google's doing, and all the other players are doing, to create their own worlds, to create their own entities.

For me, it is clearly virtual. It is clearly a realm that goes beyond the physical world. It's not clear to me that it's only virtual. Our favorite movie, Ready Player One, edifice a bit of that. It's not clear that it's fully virtual. There might be some consequences in the real world as well. Input and output manifests itself in the real world, but it's certainly a world that is constructed beyond the world that we're in.

I think the experiences that are being created are experiences that are either synchronous or asynchronous. I don't think they all need to be synchronous experiences, so that's the other part I have an objection from his definition. They don't all need to be persistent. If anything has been taught to us, people don't want persistency in everything. The advent of messaging tools and communication tools like Snapchat has shown us that people actually sometimes just want to send something that disappears, and they want to do stuff that is not persistence.

Actually, if anyone's building virtual worlds or metaverses right now that are listening to us, please do allow us to have the ability to make stuff disappear and never be found again, which we're missing in the internet today for the most. Definitely, I think the experiences don't all need to be persistent either, but there is an element, and that for me is what is a metaverse. It's sort of a different type of universe in itself, where those manifestations are bound by different rules, by a different ecosystem, by different interactions, and that what makes it powerful.

I agree with Matthew and him saying this is not a new app, not a new as a generated play. It's not just a very basic virtual 3D world. It's much more complex than that. I agree with all of that stuff, but I do think it will have different manifestations. In the world where it has different manifestations, the likely prayers that we'll be able to build it are players that already have virtual experiences that are very powerful.

Gaming companies come to mind. Gaming companies would be an obvious creator of metaverses. We'll talk about, later on, a bunch of companies, but obviously companies like Epic Games, and what they're doing seem to be well positioned in the creation of these metaverse or metaverses. We're looking at companies that are very pervasive today in the tech stack, like Facebooks, etc, of the world.

I have great respect for Matthew. I think the definition's a decent one. I think he's taking a couple of things for granted and making the definition very complex, but I'm not sure it's a given. I'm not sure any of these elements are given. Interoperability—I come from a world I spend a lot of years in Telecom— interoperability is never given in systems, never, never when there are different players that have different incentives, it's never given that there will be interoperability, so I wouldn't give that as a part of the definition of what it is.

Bertrand

I respect Matthew Ball a lot. That's why I pick his definition, because it's probably as good as it can get. I think the big issue is that metaverse means different things to different people. How do you define this? And the fact that when you hear in the news at push of a metaverse, everyone means something different. I don't see how a single player being as big as Facebook, who owns that piece of puzzle. If one player is not owning it, good luck with interoperability.

Of course, if you think interpretability from an internet perspective, like different players have some level of interoperability, yes, you can have common standouts, that's possible. But to go that far, massively scaled interoperable network of speedy worlds, it's not an easy one at all. And the other piece is, how is it beneficial? That's the part where I'm constantly struggling.

Typically you start something, you need to solve a pain point. Here I'm not clear about the pain point we are really solving. And that's probably a bigger piece of the puzzle for me. That connection to 3D it's great, but what does it really enables that you cannot enable otherwise? Don't get me wrong, I like a lot of 3D games, first person shooters, so there's a logic for using 3D in a lot of situation, but for that one, I'm not that clear.

Maybe to go back, you touched briefly about the book, Ready Player One, which was made into a movie. It was really an eye opener. It was at the time a preocular,...

In this episode, we talk about Strategic Investors, detail what they are, their underlying realities and structures of operation, and present the case For and Against them. We also share Lessons Learnt that can be of value to you, if you are an Entrepreneur, a Financial/Institutional VC or a Strategic Investor. 

Navigation:

Intro (01:33)

Section 1: Context Setting (02:44)

Section 2: The Bad Examples (12:01)

Seciton 3: The Good Examples (21:39)

Section 4: Other Players Join the “Party” (36:30)

Section 5: Lessons Learnt for Strategic Investors, Entrepreneurs and VCs (41:25)

Conclusion (51:31)

Our co-hosts:

Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder at App Annie, business angel, advisor to startups and VC funds, @bschmitt

Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show:

 

Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Bertrand: Welcome to episode 28 of Tech DECIPHERED. This is a special episode on the topic of strategic investors. What are they, who are they, and are they helpful, how helpful can they be? I think it's one of the typical questions as an entrepreneur you would have to answer when you are considering getting financing. What type of investors, should I bring on board? And typically, early on, you might look at business angels. You might look at seed fund. And at some point, you would consider working with VCs. And you will probably discover that you have different type of VCs.

 On one side the sides we typically hear about in the news, in the press we are talking about more financial VCs. And on the other side of the spectrum you have what is called strategic investors, strategic VCs. Strategic sometimes for short. And we are going to talk about them. Who are they, what are they helpful for, how useful they are, how bad could they be for your business, for your startup. 

Welcome, Nuno, good to be with you to discuss this topic. How are you today? 

Nuno: I am well, in sunny California, so very well. 

Section 1 - Context Setting 
(02:44)

Nuno: Maybe starting by defining what is strategic investors and where does that come from? The notion of they invest in, but they also contribute something that is more strategic. Maybe in the form of a partnership, or in the form of resources or other types of things that you put at the table. Normally, strategic investors are looked in the light, or as opposed to financial investors. So investors that are solely driven by the financial return and therefore, also solely driven by the capital that they put in.

The world has become a little bit muddy over the last decade or so. There's now, investors that are more what I would call operating investor. So operating investors that jump into the company, and spend a significant part of their time in the company, sometimes even taking a significant part of the company, not just the classic minority in the company. But in order to simplify our discussion today, let's stick to the financial investor side, and the strategic investor side. So a financial investor would be someone like Chameleon, Red River West other VC firms that are out there, Sequoia Capital. We are investors that invest in a company, the biggest upside we can get is really financial.

And obviously, we will produce value for the company under the form of helping the company scale, helping the company hire, helping the company get access to resources, and a variety of other things. So there is a little bit more operational minus in VC in general today, but the key objective of the whole thing is financial returns. A strategic investor, in many cases, when we talk about it, we use strategic investor as opposed to corporations, but it means the same thing in our minds. Their main value out of investing in the company is not actually just financial. In many cases, it might be more nonfinancial than financial. And that's what it being mean, strategic in that sense.

So it's not strategic, necessarily to the company they're investing in, but it's strategic to themselves as investors. They're trying to reap benefits from investing in that company that are not just financial returns. And why would they do that? They would do that because they want to tap into a specific technology that's being developed over time, and that they want to be one of the first users of it. They want to use it, and they want to tie it to other activities that they have within the company. So maybe to really set the stage of how do investments fit into, for example, corporations, let's start with the broader remit of what a corporation does.

Corporations grow in two way. They grow organically, and they grow inorganically. Organically is through their own products, their own existing resources, et cetera. Inorganically, normally this fits within what we call development, which includes business development and corporate development. Corporate development, historically, is mergers and acquisitions, investments, we will come back to it in a second. And business development, on the other side, is partnerships, strategic alliances, and other formats of basically working with an industry at a very strategic level without necessarily buying anyone or investing in anyone.

In many cases, business development, corporate development are under the same person. The Chief Strategy Development Officer, in some cases, under the CEO directly but it's a pretty vital piece of how big corporations in particular, grow. As part of that, and as they're looking at this right mix between inorganic and organic, basically what corporations do is what assets should I allocate to each of these pools? Should I be active within M&A? Should I be buying companies out? Or merging parts of my area of production and development with other companies out there? Should I be doing joint ventures? Should I be investing in companies tapping into it?

So classically, investment fits into corporations that want to tap into earlier stage type of innovations. Not necessarily early, but earlier to where they are. And in many cases, it's linked to R & D. It's a way of externalizing some of their R & D, it's a way for them to really figure out what's out there in terms of technologies. It might be because they want to tap into that market, understand the key trends of what's happening into that market. It might be that, they want to go into a space that might be disruptive to the space that they are in the first place. There are cases where corporations go into spaces that are totally greenfield to them, so that are totally new to them as a way of expanding their horizons and starting to explore new ways of accelerating their growth outside of their core business.

So there's obviously a lot of reasons why a corporation would start investing. It fits within the larger realm of inorganic growth, as I mentioned before. It is normally a space where I want to tap into that space earlier in terms of innovation, but also I don't want to necessarily own that space. And why would I want to do that? Why wouldn't I just acquire a company? Because in many cases, if it's very early in the development, if I'm a big corporation acquiring someone, I might just, by the virtue of the scale that I have, killed that company upon acquiring them.

I bring them on board, and then what happens to them? They're sort of basically killed by all the processes internally, all the governance. And so I actually don't want to buy into that company. I just want to help them, I want to invest in them, I want to basically shepherd them to a stage where they might bring some value to me. And we'll come back to that notion of value to me, because it's really important this helps us distinguish between good strategic investors and bad strategic investors and how they act as agents in this market. But again, that's in a nutshell, where it fits within the realms of the company.

Bertrand: Thank you Nuno, I think that is very helpful to get a good sense, and if we keep going into where do they fit as a company, I would say typically, of course, you will see these teams as part of a bigger corpdev team, itself usually split between M&A, biz dev, alliance, partnership or direct investment. Maybe we can also talk more about how do they invest, typically. And I think there is a big difference with typical financial investors, is that some corporations can invest directly from their balance sheet. Which might mean actually that compared to a more traditional firm, they might not have a limit on their time or horizon, at least not technical limit.

Nuno: Yes and we will come back to it, on what are the motivations and incentives part. On one hand to your point if they invest from their balance sheet they are not bound by 10 year funds, and you know the recycling of capital and all of these things, but at the same time corporations have another dynamic to them, you know, CEOs do change. And sometimes more often than funds, some CEOs don't last 10 years or more in a company. So it depends really you know under which part of the organization this seats.

Our episode today, as you guys will figure out is going to be very nuanced. There's a lot of nuances to the discussions we're gonna have. There isn't a black and white answer to whether, strategic investors can create value for you or not. Already, that's the punchline of our episode today. But there is definitely a lot of nuances on the organization you're working with, who's actually commanding that investment, where does it fit within the larger corporation. Is this part of the overall strategy of the company? We look at some corporate venture capital arms,...

We deep-dive into the nuanced - and somewhat less than stellar - history of Tech in Europe and how start-ups and investors are making up for lost time, leading to an ever maturing ecosystem, with significant reasons for optimism. Finally, we discuss the increasingly intertwined destinies of US and European Tech.Navigation:Intro (01:33)Section 1: Framing the European start-up and investment landscape (02:20)Section 2: Investment Approach in Europe (17:18)Section 3: Movements from US to Europe (51:19)Section 4: Movements from Europe to US (59:02)Conclusion (1:05:39)Our co-hosts:Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder at App Annie, business angel, advisor to startups and VC funds, @bschmittNuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedroOur show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Nuno: Welcome to episode 27 of Tech Deciphered. We're going to address the tech landscape in Europe, focusing on the investment landscape, as well as the startup landscape, we will go into the typical entrepreneurial approaches as well as investment approaches in Europe, the mindsets, the tactics, the profiles, as well as the typical exits, we will then deep dive into the present state of Europe and how we see it evolve over time.  


Bertrand: Thank you Nuno, good to be here today with you and to discuss this fascinating topic for us, we are both Europeans. Obviously I'm French, you're from Portugal. We have seen the European landscape changing dramatically over the past 20, 25 years. So that will be very exciting to talk about this. 


Section 1 - Framing the European startup and investment landscape 
(02:20)

Bertrand: I guess maybe we can start about controversies that happened a few months ago in June when The Economist had a big cover on the state of the investment in Europe and how Europe was really not doing much in the tech industry. interestingly enough, there was a quick swift reply from the founder and CEO of Stripe Patrick Collison, who is not just running Stripe from the U S but he's also a European citizen being Irish  


Nuno: Yeah. His comment was basically saying, all of the points that you raise are great, I think you haven't really shown the case for optimism right? Where there's a lot of great successful companies coming out of Europe. He was mentioning a few that, are obviously runaway successes, like Spotify, Klarna, N26, UIpath, wise and a few others. 


And he also obviously talks about Stripe and its role, although Stripe is more of an American company, to be honest, but Stripe in its role in working with very innovative companies in Europe as a counter position to the economists headline and main articles in that edition. 


So to be honest, I think he is onto something in saying there is a case for optimism that wasn't duly manifested in that edition of your magazine or newspaper as they call it. It's very funny cause they call the economists still the newspaper, although it's in my view of magazine.  


Bertrand: Maybe you want to restate the position of the economist. 


Nuno: Yeah. The position of the economist is that basically the U S has taken over, right? You have companies like apple that are worth more in their view than 30 firms in the German blue-chip Dax index combined. Obviously we have Amazon, we have Microsoft, we have Google all these are multi-trillion dollar companies now, actually. 


And so their point is, in some ways, Europe has lagged behind. I think their point was very focused also on the old Europe and where, even the big emerging tech winners, like SAP took a long time to get to fruition, took a long time to get to a certain scale. Whereas it seemed like magically in the US, they popped up not just like mushrooms, but they also got to valuations that were ridiculous much faster. 


So that was their position. I don't think their position is totally wrong in some ways. And I believe it was an editor letter actually. So it was a letter to the editor by Patrick Collison, I guess if it wasn't Patrick, they wouldn't have published it. But it was a letter to the editor where he was saying well, you sort of missed the optimism case. And we will talk about it a little bit later in our section two and beyond, that there is definitely a lot of great stuff happening in Europe in terms of investment landscape ,startups swift changes in mindset from everyone concerned, all the key stakeholders around government, venture capital, private equity, the entrepreneurs themselves. So all of that I think is a case to be made. 


So it was a little bit of a semi controversy because the economist's obviously is incredibly well-respected, and rightfully so, publication, and Patrick is also a very well-respected entrepreneur, very smart, very sharp someone who's blazed the nuances very well, obviously with a very successful company in Stripe. 


But at the end of the day, I feel the case we're going to make around the European landscape is a little bit along the side of Patrick, there was a lot of optimism to be had around what's happening in Europe.  


Bertrand: Definitely. And let's not forget Stripe might be the highest valued private company in the US at this stage. I'm not sure what's the latest private valuation, but it's a biggest as far as I know. So he's not any random entrepreneur, it's not any random company. And for me it felt, what the Economist publish was a vision of Europe five or 10 years ago. It's a vision you could have of China maybe in 2000. But without thinking, where is it going? And we will see the landscape in Europe has changed dramatically in the past five years. And it's not coming from nowhere obviously there was a gradual buildup over the years over decades. 


Let's not forget how many engineers, scientists are trained in Europe. So there was a huge base of talent that was in Europe, but that was not directed towards entrepreneurship, towards tech. Europe is starting from I would say a very strong base and we will talk more about it. 


But yeah, I think there has been a dramatic change in trajectories in the past five years. I am personally pretty optimistic about where this is going. And actually these are some data points where you could argue that Europe is actually is the next big thing after US, after China. It might be Europe that's next in term of how many unicorns are being shaped. Obviously we don't just want to go to unicorns, but to real exits. Be they IPO or acquisition. And that might be the one piece that's still a bit missing from Europe, but we can talk more about that later. 


Nuno: And dipping a little bit into the past. And I won't go into the fact that I actually met John, Patrick's brother, and still very much involved in Stripe at a panel many moons ago and failed to invest in Stripe. So that's definitely very high on my list of antis. So I won't go into that. 


That's still very sore but going into the entrepreneurial approach in Europe and what it has been over the last few decades, if we go back in time, Europe in some ways was built on small and medium businesses. If we look at the best of the best the real companies that are the backbone of Europe we typically talk a lot about the famous mittelstand companies in Germany, the sort of small and medium business of Germany that really fuel the economy and that whole engine that, obviously some of them are cyclic some of them are not so cyclic, but that of which stood the test of time, but rarely we've associated Europe with fundamental entrepreneurial behavior from a very high risk-taking perspective. 


If we look at the origins of a company like SAP we see it as almost like an emergence of a really good software house that then at some point figured out that there was a productization around that they're doing. And then maybe a couple of decades later just hit product market fit at a scale, probably never before seen in Europe and went to that next mile. 


So this whole notion of very rapid growing tech companies, startups, is a little bit more recent. The entrepreneurial approach in Europe has been to businesses that are self-sustaining. Normally relatively revenue generating even from very early on in the development of the company, which is, we will go back to that when we talk about the investment approach in Europe in the past versus today, is very different from the U S so this notion that you start making money earlier, that almost you're like cashflow positive earlier, that you need to generate cash earlier. And this is not only true in B2B. It's also true in B2C, which has been actually a big issue in particularly in consumer plays in Europe, because there wasn't that much of a focus on traction and retention engagement of users. 


Actually very early on there's a focus on monetization. And so the entrepreneurial approach has been very much around that, around building solid businesses relatively early on. And there's nothing wrong with that. The problem is when you're building very solid businesses early on, and you're very focused on monetization and making the company profitable, you're missing growth. 


You're not being as aggressive on, on growth as you should be for reasons maybe Bertrand you want to talk a little bit about, but certainly that is very different from sort of your classic, in particular Silicon Valley / Bay Area, company that thinks through growth in a very different way, thinks through profitability in a very different way. 


Profitability is something that will emanate later on, product market fit is not always linked to profitability. It's actually in many cases,...

In our second and final episode on the Bubble, we share what is happening in Venture Capital, on the exit - IPO, M&A, etc - front, as well as share clear “so-whats” for entrepreneurs and VCs. For in-depth views on the status of the economy, listen to our previous episode, episode 25.

Navigation:

Section 1: What is happening in VC? (02:05)

Section 2: Exits are great, though, right?! (17:52)

Section 3: So-what? Implications for entrepreneurs and VCs (25:57)

Conclusion (43:49)

Our co-hosts:

Bertrand Schmitt, Tech Entrepreneur, business angel, advisor to startups and VC funds, co-founder at App Annie, @bschmitt

Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show:

 

Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Nuno: Welcome to episode 26 of tech deciphered. This episode will conclude our two-part series on the bubble and why we actually believe there is one going on. In this episode, we will discuss the VC landscape and how it is evolving. We will talk about exits, not just IPOs, but also other types of exits like mergers and acquisitions and how that landscape is looking like.

And finally, we will end up with something pragmatic, the "so what", the takeaways, the implications for both entrepreneurs and investors. 

Section 1 - What is happening in Venture Capital? 
(02:05)

Nuno: Moving to venture capital, there's a lot of interesting elements to talk about. Some really interesting analysis from our friend Tom Tunguz but also of what's happening in the macro space, some analysis of what we've seen from PitchBook and CB insights, it seems we're going to have an incredible year in venture capital. This is it. There's no crisis there's a ton of money, dry powder, there's new funds, I actually have a new fund going. So I'm very happy with that, but in some ways it's like, woh, this is all fantastic. Increasing everything, increasing everything, more deals, more money deployed.

We're all great. We're going to have, a flagship year in venture capital. And somehow I'm like I like being in the market. We just closed our first deal, which is great. Thank you. So what's going to happen? In our micro world of startups and entrepreneurs and venture capital firms, 2021 is going to be an amazing year, but what's going to happen?

Bertrand: Yeah. And to share some numbers it's pretty insane what we see. And for me, what's crazy is that it's at every range. So maybe it varies by country, by industry, but overall if I take Series A valuations, for instance, you have seen a jump from what? like more than 50% in two quarters this is the very definition of insanity.

I'm not sure if we have ever seen that, and it's happening. At every level in the stack. So maybe early on in the pandemic, it was less true that it was at every level of the stack. Maybe, initially it was more: you are only investing in people you already knew, in companies you already knew, the first quarter or two. And because you are not used to work like this, you didn't know how long it would be like this. So you had a different approach that maybe favored existing companies bigger rounds, insider the rounds. But now I believe that we're at a stage where it's not at all about that anymore. 

Or not just that anymore. It cannot be: to stay competitive you have to stay in the market, you have to invest. And maybe on that point maybe not every fund agree. We have a wide range from Tiger Global investing I forgot how many deals a day, actually 1.3 deals a day from Tiger global these days. 

But at the other extreme in a global ranking I have not seen Sequoia U S in the top 10 investors. So I wonder if there is less investment from them and they decided that right now is not the best timing. So I think there are still, some fair questions, and a wide range of answers to these questions. But numbers are pretty insane.

And stuff are changing. 

So, one is that we see a record financing $ 156 billion in Q2 alone. We see new unicorns, it's a record high of 136 new unicorns globally in Q2. That's six X what was a year ago, six X more unicorns in Q2 2021 versus Q2 2020. 

These numbers are just totally insane. One of my big worries is that the number of good entrepreneurs has not increased by six X. And I think you and me, Nuno, have been around the block long enough, maybe too long You don't increase the number of great entrepreneurs six X, year after year. I'm not sure where it's going to go. I think that at least in the private markets, implosions will happen more often but it can take a long time before it's visible. It can be years before we see the effect of too much money in the wrong hands. 

Nuno: Yes, and it's pretty pervasive, as you said, it's not just late stage companies that should probably already have IPOed that are getting more capital like Epic and others. It's not just, mid stage growth companies that are getting funded to ridiculous levels. It's early stage in general. 

We play in the early stage for the most, and valuations are going up series A in particular. They're growing up at levels that are just, in some ways mind-boggling. Post money valuations. I think there was some analysis from Tom that was talking about the 75th percentile post money valuation of a cloud software infrastructure company has grown 11% annually. In 2021, it's spiked 60% in 2021. It's 60% again, growing 11% annually in last 10 years, if that's not a sign of a bubble, what is. It depends what you are, right? If you're a VC firm where there's an optional value of just putting a lot of capital to deploy a lot of assets under management, a lot of dry powder, coming to the end of your investment period for the fund that you are currently deploying capital from, maybe you are like, you know what, I'm just going to increase pace because I need to, and that's life and I'm going to pay and be relatively valuable insensitive. So I won't pay much attention to the valuation, I just need to deploy my capital. 

If you have the chance, if you're early in a fund or if you're more seasoned investor and you have a chance to wait a little bit, you'll probably do that and be a little bit more selective on your investments. I think we're probably playing more of that, of the latter approach, let's call it the Sequoia capital Silicon valley approach. The Sequoia China seems to be very aggressive as well right now in terms of number of deals done. 

Bertrand: Sequoia China is very aggressive. 

Nuno: So I think we're more on that camp. I wouldn't call it conservative, but we are not valuation insensitive. So if we see a deal and there's no ARR, there's no annual recurring revenue and people are like, oh, we're worth 30 millions. Like why?

Even if you're a price earnings ratios forward would be a 30 X, 40 X, 50 X, 40 times zero is zero. I'm kidding. Anyway, at the end of the day I think this is the time where the discipline will be there and you can have a little bit of Delta in early stage. It's like the difference between.

You know, a 15 or 20 million valuation on certain deals is nothing. The difference on a 20, 30 million sometimes and in other deals is nothing. The difference between a 30 million and a hundred million in terms of valuation is huge. And so you can't be just insensitive at that point in time.

And we're starting to see silly deals like that. A lot of party rounds, a lot of angels deploying capital, family offices, newly formed micro funds, deploying capital. Like there is no tomorrow. Maybe there won't be for them. I don't know. At some point in time and we'll come back to that when we're talking about the "so what", and the advice to entrepreneurs at this stage is something that we want to really put a stick on the ground on. You have to be a little bit cautious on who are you receiving capital from as well, will these guys be around? Will they be able to follow on?

Will they be able to stick with you through thick and thin? But definitely I call it bubble it's more serious than that. And maybe that's a good segue into our next section, which is, this is not just the US right. This is not just the US or China that are just super hot because they're super big markets.

And there's a lot of capital to deploy into those markets because historically they've had a lot of capital deployed. Europe is going silly right as well in terms of capital deployment. And, I look at my country Portugal and it's an interesting, I would call it still a tier two European VC landscape / startup landscape.

We got to tier two, I think we will get even higher. It's a really interesting market. There's a lot of talented entrepreneurs, startups, a lot of talent migrating. But I look at deals right now. I'm like, why is that company getting funded? And they're getting funded by international investors, which is again, great news for the ecosystem.

But sometimes if there's no fundamentals, you're like, why is it so easy for those guys to raise money? I just saw a company. I won't mention their name or the area, just so that I don't booboo them too much. They were at much lower rate of annual recurring revenue than the company for example, I'm investing, which is actually an American-based company.

And they're getting a similar round to this company that I'm investing in at a much higher valuation, much, much lower ARR, let me again, be clear much, much lower ARR. And I'm like, what's going on. And again, international investors, not just Portuguese investors. So there's something going on on supply and demand as well in Europe. I don't know. Can you make sense of it Bertrand?

Bertrand: I would be glad to make sense of it. I think that a few things, first I'm excited for Europe....

Is this a bubble? If so, what type of bubble? Where are we heading? We share our views on where the economy is going, the importance and effect of COVID, several key opinions on both sides of the spectrum and land on whether the current situation is sustainable or not.

Navigation:

Introduction (01:33)

Section 1: The COVID effect (02:43)

Section 2: The economy...stupid? (11:08)

Conclusion (43:33)

Our co-hosts:

Bertrand Schmitt, Tech Entrepreneur, business angel, advisor to startups and VC funds, co-founder at App Annie, @bschmitt

Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show:

 

Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

Subscribe To Our Podcast

Intro (01:34)

Bertrand: Welcome to Tech Deciphered Episode 25. So this episode 25 is part of a 2-serie episodes: episode 25 and 26 that will be around the current bubble. We believe that at this stage from a big macro perspective there are a lot of questions around where's the economy going, and this would be the topic of episode 25, that big picture perspective on where is the economy going?

Of course, all of this being impacted big time by COVID. We'll talk a bit about that. We'll talk about inflation, prices where all of this is going from a macro perspective. In episode 26 we will talk more about, in more details, what does it mean for entrepreneurs, tech entrepreneurs, tech industry, VCs, where the VC landscape going, where are exits going, and what does it mean for me as an entrepreneur or me as a VC?

Nuno: And today we start with, where is the economy heading, all the macro conditions that are happening in the market and their implications. Bertrand?

Section 1 - COVID effect 
(02:43)

Bertrand: We have to start with COVID it has so much impact, not just on our lives, but on the state of the economy, on some big decision on the financial market side, on additional government interventions, or not. So I would say it's a very mixed picture. I think I had a sense of optimism that day to day life was going in the right direction just maybe a month ago, even if I was, and we were being both realistic as we discussed in some previous episodes. Back to normal, like international travels and the like, as we used to do on a regular basis might just be for some time next year, maybe summer next year. I guess there are some serious concern that our basic everyday life might be back to some sort of war footings. In where I live in Seattle area, King county, we are back to mask mandates indoor.

It's not yet forced, but I guess it will be there soon. It's highly recommended we all heard about the CDC recent news also advising for masks mandates indoors for everyone. Vaccinated or not. It seems it's both because we cannot trust people who are not wearing their masks, that they have been vaccinated and because now there is also the risk that even if are vaccinated with delta, you might harbor the virus and share it with others.

And I guess, in your region in the bay, it's also back to mask mandates. This time it's mandatory actually indoor.

Nuno: From what I just saw. And, basically I got information from a club that I'm actually a member of that everyone now in San Francisco should wear a mask indoor, irrespective of being vaccinated or not. My understanding it's going to be mandatory at least for a period of time, but I'm not fully sure.

Certainly there is a step back. From what was promising to be very nice summer for everyone. If you're vaccinated, you don't need to wear anything, et cetera, et cetera. In some ways, leaving this to the criteria of people wasn't a wise idea in the first place, because how do I know that someone's vaccinated or not?

We saw a little bit of reverse engineering later on. There were bars and San Francisco clubs, there was a bunch of different stakeholders that started basically enforcing this notion of you have to share with us that you've been vaccinated or not either through your digital card for California.

Forget the name exactly of it. Or just a copy of your vaccination card and digital format or a negative test. We already saw some news around that in the last few weeks, but in some ways I feel there now is going to be a more aggressive stance on this. The Delta variant is upon us and in some ways we sort of got it right, Bertrand, right? A couple of episodes ago, we talked about this isn't going to be until next year, 2022. Despite getting it right as we probably both became a little bit more optimistic about the conditions around us and probably also ease some of our guards in how we behaved.

Bertrand: Yeah, and it feels like for a grand two weeks, I started to stop wearing masks indoor initially taking my time. And then as soon as I saw the rise in not just delta variant, but the fact that the that Delta variant might be more risky. Then I started before there was this news of new mandate, that I felt that the right thing was to actually start wearing a mask again indoor. I also noticed other people doing it by themselves. And of course we have to talk about Europe, I think in some ways Europe was, at least continental Europe, was a pioneer of starting to mandate showing your vaccine or a proof of recent test for a lot of activities and France actually was one of the pioneer to force that big time, basically saying, you know what vaccinated people are doing all the right things, we need to make their life easier, not worse because of the others.

And I think that in some perspective it felt like it was actually the right thing to do. That you have to force a lot of inconvenience on people who are not vaccinated so that they become vaccinated in order to make us all safe. And that was the result, I think, in France there was 14 million registration in two weeks after that, a 1.5 million in just a few hours. So it had a huge impact. Israel maybe might have been doing that, some other Southern Europe countries. And I have the impression it's coming to the US a bit more indirectly. More like employers in a way are starting to force vaccination.

So we saw some employers forcing it. I believe Walmart is forcing it, the federal government intends to force it, or force you to do a lot of testing. So I think that it's also coming to the US in one way or another. It might not be exactly the European standard, but it feels like it's coming and personally, I feel it's the right thing to do. But I must say that I start to feel, this is way more, how can I say, way more difficult to predict where it's going next. And that's my bigger worry. I think that we are going to go through the current delta virus. We are going to get more people vaccinated all over the place because people have no choice keep to keep living a good life or just go to their office and keep their work. But I'm not sure it will be enough. I'm seeing more and more articles that are, I'm not sure they are pessimistic, but I think they might be more realistic that we don't know where this is going. The last big pandemics were flu virus, they were not SARS, at least not at scale. And realistically we don't know where it's going and you have a chance that as we see with Delta, for instance, that: yes, you are more resistant, yes, you don't die thanks to the vaccine, but now it looks like you might still get infected, you might still infect others way more than expected. It might get worse with a new variant and you might have a new variant where your vaccine is not enough at all to protect you against a severe disease.

Or, worse, you might have new variants where young people, kids, become more at risk. It feels actually realistically there might be a lot more uncertainties in front of us in the coming months, if not years actually and on the good side, the good news thanks to the new mRNA approach for vaccines like Pfizer, like Madonna. we can create very quickly new vaccines, very fast based on the latest variant. So on the positive side, if the virus evolves quickly, we may be able to make vaccines even faster. And hopefully now we have the capacity to distribute even faster, but. it feels like it might be a long game of hide and seek, whack-a-mole type of approach for potentially years to come.

And I start to think we will have to live with it, with this level of uncertainty for quite a while. And some people say, oh, that's okay. You just get used to it or you're vaccinated. So it's less dangerous. I don't know. In six months we might have a variant that is as dangerous as the first one when you were not vaccinated.

Nuno: This is a complex system. And in some ways we've been, over-simplifying all along the analysis. And by we, the world, not us too, but the world it's oh, it's very simple, and we have these tiers and we move counties and cities and countries back and forth and openness and closeness. And we're now realizing the system is actually super mega complex.

The variants make it extremely complex. We don't know what's next. Then after the Delta variant, I'm sure there will be others. We now obviously start to understand that obviously the effectiveness of vaccines is different. The Astra Zeneca vaccine, the SINOVAC vaccine doesn't have the same efficiency, the same effectiveness in some ways and efficiency of the Pfizers and Modernas, et cetera.

We are running into a very complex system. I think the mandates now in vaccines, that we're starting to see all over the world. As you mentioned, also in the US also in government, not just private sector is pushing people to really behave in a more concerted way. But maybe we are right.

Maybe it's going to be next year. And I hope at this stage, given that we've started having some bad signals that we are right that next year, is it,...