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fifty nine. I'm Charlie Pallotte.

1:12

That's a Bloomberg Business flash.

1:16

You're listening to taking Stock with

1:18

pim Box and Kathleen Hayes on

1:20

Bloomberg Radio. Eat

1:22

or Be Eaten, Acquire or Be

1:25

Acquired? M and A madness in the startup

1:28

universe, and our next guest says, if

1:30

you want to survive and thrive, you better pay

1:32

attention to a very major trend,

1:34

the move from the information age into

1:37

the intelligence age. Joining us the

1:39

studio day is gust Tie. He's general

1:41

partner at Trinity Ventures in Menlo

1:43

Park, California, the heart of

1:46

the valley, and he's here today to join us

1:48

to talk about this. Gus, welcome, Thank you. So,

1:51

uh, there is certainly a lot of M

1:53

and A activity what is driving

1:55

in and we're talking about trends, but is there anything

1:57

about people uh

2:00

getting more confident, financing being

2:02

cheap? What's behind it? Yes, Kathleen,

2:05

I think we're in a super fascinating time

2:08

right now where you have Microsoft buying

2:10

LinkedIn for six billion, you have Walmart

2:12

buying Jet for three point three billion, and

2:15

even GM bought Crews for billion

2:17

dollars. I think that the trend is driving.

2:19

All of these are large corporations seeking

2:22

to bring in DNA and capability to

2:24

move from the information age to the intelligence

2:26

age. Hey, Gus, you

2:28

know, just to give some context here, at

2:31

Trinity Ventures, Zu

2:33

Lily initial public offering, that

2:35

would be you, Blue Nile

2:37

initial public offering, that would be

2:40

you. If I always keep asking

2:42

myself, if these are all such great companies,

2:45

whether it's publical private, why

2:47

sell them? Sure? Well,

2:50

from a venture capital standpoint, when we

2:52

make investments in companies, we do make

2:54

agreement with the management team and the other shareholders

2:57

to have some form of liquidity. And so if

2:59

the liquidity comes in other forms

3:01

such as dividends, that would be possible. But in

3:03

general, when a company is acquired

3:05

or goes public, it makes their capital

3:08

liquid and then we could we buy in

3:10

and we liquid eight and we distribute those

3:12

profits back to our LPs. That makes sense

3:14

to me. You want to put some money in your pocket when you put all that work

3:17

into starting up a company. What

3:19

about this? What are you talking about? Information

3:21

age to intelligence age? What does

3:23

that mean? It's it's very it's very compelling.

3:26

What does it mean? Yeah, we

3:28

view this as as transformative from

3:30

moving from the industrial revolution

3:32

to the information revolution. And so now

3:35

over the last twenty years, we've been aggregating

3:37

all of this information about things. So if you look

3:40

at Amazon when they pulled together

3:42

all the things you could buy, that's pulling

3:44

together information on one particular

3:46

place. However, the information

3:48

overwhelms all of us, whether we're individuals

3:51

or businesses, and so you need to add

3:53

intelligence to be able to sort through that information.

3:56

So you've seen this intelligence

3:58

revolution where you makes sense of

4:00

the data in in information technology

4:03

companies, but you haven't seen that shift

4:05

yet in all the other industries. And

4:07

that's what we're arguing is taking place

4:09

right now that if these large companies don't

4:12

add intelligence to all the information they have already,

4:14

they may become dinosaurs. Does

4:17

that same strategy apply to the

4:19

venture capital world? Well,

4:21

because I understand that what is it you know? You do ten

4:23

investments, seven dive, three maybe

4:26

live on, and one is the thing that

4:29

you know puts the roof over everybody's head,

4:31

it sure does apply to venture

4:34

capital in all other industries. And

4:36

you are seeing innovation at various

4:38

different types of venture firms, particularly the newer

4:41

ones that have this fresh look A

4:43

dear friend of mine who who inspires me in

4:45

the valley is Dave McClure. He

4:47

has five startups, and he would argue that

4:50

firms that are traditional, perhaps even a

4:52

firm like ours, as a dinosaur, and and

4:54

we have to pay attention to that because

4:56

you need to sort data better. I mean, seriously, what does

4:59

that mean for you? If you're a dinosaur? How could

5:01

you be a dinosaur? Well? You know, I would

5:03

argue that venture firms are more resilient

5:05

to this trend because we actually

5:07

are competing to understand

5:09

and makes sense of data we already have and

5:12

put it in the forms of or

5:15

what it's it's the model of

5:17

so so a thesis for a

5:20

disruption for venture capital what pim

5:22

the way, what I inferred from what Pim was saying is

5:24

that the traditional model is you make

5:27

two investments per partner per year. And if

5:29

you have a firm of ten ten partners at investments

5:32

per year, from a portfolio theory

5:34

basis, it may make sense to make a hundred

5:36

investments per year. If you have a strategy

5:39

for feeding the winners and calling the

5:41

losers, that's a legitimate strategy. And

5:43

if you have information that that you

5:45

can transform it intelligence to understand that trend

5:47

better. You could have a leg up. I just

5:49

want to go through some recent deals to get your thoughts

5:52

on this. Gillette, Dollar Shave

5:54

Club. Yeah, I mean Dollar Shave

5:56

Club, as I understand, doesn't make money necessarily,

5:59

at least not yet. Is

6:01

there a strategy or a theme that we need to understand

6:03

here? Yes? And and so? Uh

6:06

the theme and Uni Leaver purchased

6:08

Dollar Shave Club for a billion in Gillette, which

6:10

is owned by PNG, had a lawsuit against Dollar

6:13

Shave Club. If I understand the public information

6:15

properly, the theme would be

6:18

that Uni Lever, being a hundred and thirty

6:20

billion dollar, hundred forty billion dollar company,

6:23

would be interested in developing a deeper relationship

6:25

with end consumers and collecting information from

6:28

them and serving them. Dollar Shave Club

6:30

innovated in moving from a product

6:33

to a service and using analytics

6:35

of understanding the customers and how to tune

6:38

products for those customers. So it's very savvy.

6:41

So what what do you make of

6:44

I just have to ask you. Just Walmart just seems like

6:46

a match made in heaven potentially, sure,

6:48

yes, Uh, it's I think it's

6:50

a very savvy strategic move

6:53

and strategic moves have to play out operationally.

6:55

You have to execute. But why so savvy

6:57

strategically is that Walmart is

7:00

a four billion is revenue

7:02

company. Last year it actually shrank from the previous

7:04

year. It's online business

7:07

last year was fourteen billion dollars.

7:10

And if you think online revenue retail

7:12

is important, that fourteen billion dollars

7:15

barely matched the growth of

7:17

of Amazon, so they have to do something to catch up. You

7:21

remember a dollar Shape Club? I am not no

7:23

would you invest in that? Would you have invested in Dollar

7:26

Shape Club? I made the mistake in passing,

7:28

and I regretted, but you were offered

7:30

Yes both, Thanks

7:32

very much, Gus, general partner at

7:35

Trinity Ventures. They're based in Menlo Park,

7:37

California. You're listening to

7:39

taking Stock. This is Bloomberg

7:45

coming up. Designers on

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a dime, a global consignment

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commerce platform. I'm gonna take

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a look at how it works and why small business and

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focus something of the radio