Fireside Chat, Q&A and "Stern Tank" with Mark Cuban

- Wow. (Audience applauds) Friends, friends, friends, wait... Is this on? Hold the applause, please, because the real guests of honor are yet to arrive, so that's when you have to applaud. Good afternoon everyone. My name is Raghu Sundaram. I have the honor of being the dean of Stern and the even greater honor of starting tonight's program. A few words of introduction to the sponsors of this program and the context of this program. At Stern, entrepreneurship and innovation have always been at the heart of everything we've done for over a hundred years, in our very DNA. Over the last few decades, we have produced a huge variety of entrepreneurs who have transformed the industries they worked in, some very overtly, others much more quietly, but still quite fiercely.

For those who follow these industries, the list of names reads like a Who's Who, from Bill Berkley and Ken Langone to Andrea Bonomi, Lorenzo Fertitta, Liz Elting and Peggy Yu. Entrepreneurs have been the very face of Stern for several decades. Today we find ourselves at a time when entrepreneurship has become more central than ever to our activities, a time absolutely fraught with challenges, but also, therefore, full of opportunities, and at a time when The rhythm of Change makes the need for agile leaders who can think and move fast greater than ever. At NYU, as a university, across the university, we work with more than a thousand aspiring entrepreneurs across our 16 colleges and two global campuses in Shanghai and Abu Dhabi.

One of the many ways we foster entrepreneurship here at Stern is through programmatic innovation, both inside and outside the classroom. Two examples of that innovation are the co-hosts of today's show, Entertainment, Media and Technology, the EMT program at Stern, and the W.R. Innovation Labs. Berkeley. Berkley Innovation Labs prepares student and alumni entrepreneurs to launch and lead transformative companies. This year, 244 teams participated in the Entrepreneurs Challenge. In a few months, the Innovation Lab will award $300,000 to NYU startups on this very stage, in this very room. Teams from our shows were acquired by Amazon, Airbnb, and Twitter, and appeared and performed well on a show we all know well, Shark Tank, where Vengo Labs, the high-tech vending machine maker, secured a $2 million deal in 2016, and Keen Home, creators of a smart vent, took home $750,000 in 2015.

The other co-sponsor, our EMT program, gives students a global perspective across the spectrum of media and entertainment. business. The program offers more than one hundred courses taught by distinguished professors and thought leaders and industry professionals. Last year, 4,400 students from across the university took EMT courses here at Stern. One of EMT's most distinguished professors, a man I am proud to call my colleague, is Greg Coleman. Greg is the resident executive at Lerer Hippeau, a prominent early-stage venture fund that has invested in such notable companies as Casper, Glossier, Warby Parker, and BuzzFeed. At Stern, Greg teaches the popular Digital Marketing and Innovation class.

He brings more than 40 years of advertising and media experience to the course, spanning executive positions at Yahoo!, the Huffington Post and BuzzFeed, where he most recently served as president. Greg was also an early member of our Tech MBA Advisory Board and has been extremely supportive of our attempts to increasingly closely integrate business, entrepreneurship and innovation, including through the Creative Destruction Lab. Thank you, Greg, for invite Mark Cuban to campus. Mr. Cuban embodies, in every sense of the word, Stern's guiding principles of innovation, entrepreneurship and technology. We are delighted to spend this evening with him. Our thanks, again, to the EMT program and Berkley Innovation Labs for sponsoring this program.

Professor Greg Coleman. - Thank you so much. (Audience applauds) Thank you. Wow, we have a full house tonight. (Audience applauds) So, Dean, 40 years of experience. Did you really have to do that? - You know, I was impressed. - Oh my God, that's a lie. That's 10 years of experience (audience laughs) is what I've had. Before I make formal comments, I would like to ask Sara Kim to come. Sara is ours. (Audience applauds) Come on, let's give him a round of applause. (Audience applauds) Sara is one of my two teaching partners. Lucy Zhang is here too. There's Lucia. (Audience applauding) Round of applause.

Sara will introduce Mark. - Good night. My name is Sarah Kim and I am a Langone MBA student here at NYU Stern. I had the pleasure of being a student and teacher, as Greg mentioned, in Professor Coleman's Digital Media Innovation class. Last semester, we were lucky enough to have some amazing speakers, including CNN President Jeff Zucker, who came to speak with us after CNN sued the White House. We have also been hosts (laughs), yes. It was great. (Audience laughs) We also welcomed Jonah Peretti, CEO and founder of Buzzfeed, and Kara Swisher, renowned journalist and founder of Recode.

Tonight I have the privilege of introducing you to someone who needs no introduction. (doorbell rings) (audience laughs) You may know him as your favorite investor on ABC's Shark Tank or as the outspoken owner of the Dallas Mavericks. He has also been a lifelong businessman. Some lesser known facts about our guest tonight. At 12 years old he was a businessman selling garbage bags. He also took on the challenge of running a Dairy Queen for a day. He also set a Guinness World Record in 1999 for the largest e-commerce transaction when he purchased a Gulfstream jet for $40 million. (Audience laughs) He did this after selling his company Broadcast.com to Yahoo! for a fantastic 5.6 billion.

I don't know about you, but I don't think online shopping was very common back then. Clearly he was ahead of his time. He also may or may not have been quoted as saying that he wanted to speak to NYU Stern students and illustrious alumni as part of his impressive career. (Mark laughs) I'm delighted to help you do that today. (Audience laughs) Ladies and gentlemen, please join me in extending a warm welcome to the incomparable Mark Cuban. (Audience applauding and cheering) - Thank you. Where do you want me, Greg? - You will go right there, the furthest one. (audience applauds)-I gave Mark a NYU jacket, but he said he's an Indiana man (audience laughs), so he didn't do it. - See UI. - Which I respect. - OK thanks. - We have to do that.

Mark, thank you very much for coming. First, I'll tell you that Mark and I are on the board of directors of a company called ZergNet. In fact, CEO Reggie Renner is also here with us tonight. When I asked Mark at the end of one of the board meetings, I said, hey, I teach this class at New York University. Would you be interested in coming to talk to the school? He pulls the phone out of him and says, "Wait," and looks. I said, you're not watching to see when the Mavs play the Knicks, are you? (Audience laughs) He said, "Yes, because then I know I'll be here." (Audience laughs) You have many friends who calculate his schedule.

In a way, I see when I'm eating spaghetti and meatballs at home (Mark laughs) and I know I'll be there with other people, when their baseball club is there. Before we get into our questions and answers, we will now do a casual

chat

. We'll hear a little bit later from some students who will have some questions. Then we'll have three amazing presentations tonight, five-minute presentations that Mark will listen to and give some feedback, which will be a real treat for the students presenting. - I'm going to destroy some people (audience laughs). - But what I would love to do is say, I just want to share with you, for those of you who are not in my class, I did have the opportunity. opportunity this year to get some great speakers. (audience laughs) Mark, why don't you take a look?

This is the only thing I tried to rehearse. We had the head of sales at Twitter. - Wow, Greg, that's a great list. (Audience laughs) Okay, let's move on, let's move on. (Audience laughs) - The class had the opportunity to meet people who are the movers and shakers of the digital world. We had the opportunity, if you look up. As Sara mentioned, the morning we had Jeff Zucker, Jeff came at six o'clock at night, he did, he sued the president of the United States for taking away Jim Acosta's credentials. He didn't give interviews that day, but he gave our class the full talk, inside and out, of what the lawyers said, how he made the decision, how they served the papers.

It was a moment in time. Then one of the other standouts, as you heard, Kara Swisher, rampant. - That's her. -Her comments about the technological titans, at least they can't take it away. That was her generous view of people, Mark Zucker and the rest. Let's get straight to this. I started talking about ZergNet, Mark, and talking to Reggie, the CEO. One of the things that I discovered that I think this class would be very interested in, the school would be very interested in, is that after watching Shark Tank, Reggie sent you an email. -Yes.-He emailed you what he told me was a pathetically long email.

Apparently you read it and responded. - Yes. - Someone from outside contacted you with a long note. For those people who are sometimes afraid to take risks, what happened when you saw his note? -Well, first of all, he went to Indiana. (audience laughing) Or from Indianapolis. I receive hundreds of emails, business related emails a day and I receive proposals every day. m

cuban

@gmail. (Audience laughs) I'll read the first paragraph. If you say something substantive that catches my attention and I think it is different in some way, I will continue reading. That's exactly what Reggie did. He said, "We have some technology that," I won't go into the whole thing, but he caught my attention.

I started asking some follow-up questions. Very quickly, my BS meter is really good. Based on the answers, I can tell if it's real or nonsense. We kept following up, did my due diligence, and didn't meet until long after I invested in him. - Oh, wow. But Mark also attends all board meetings. From time to time he will have to call, but you do everything. - Of course. -How many forums are you on where you will spend that kind of time? - Only three or four, not that many. I really limit it because it takes time. Fortunately, I'm in a great position where I can dictate (laughs) where and when I want to go.

That is very beneficial. But I don't do many meetings. I don't make many phone calls. I try to do everything by email because it makes me more efficient. Now, if you want to write me a check, I'll show up. (Audience laughs) If there are some problems that I need to address or help them with, I'll show up, whether it's a Shark Tank company, Reggie's company, or much larger companies that I've invested in. Works for me. I've invested between $25 million and $30 million in companies where people cold called me, emailed me, and in many cases I've still never met them. - Wow. - I've made a lot of money with that. - Wow, well, you made a good investment in Reggie's company. - It's just starting. (Greg laughs) - It is.

I want to go back in time, to a company I worked for called Yahoo!. - I remember them. - That had a very significant role (audience laughs) in your life. -Yes.-I think everyone here knows that Mark and his partner Todd Wagner sold their company to Yahoo! What was it, 99? - '99, yes. - '99 for 5.6 billion dollars. - In stock, not cash. - I want to talk about that. When I came to Yahoo! In April 2001 two things happened. About a dozen people remained from the Broadcast.com acquisition. This is about a year after you sold it.

I remember my boss at the time, Tim Koogle, asking me if our Southeast regional manager would like to run Broadcast.com. I thought, oh my God, this is such a horrible thing... - What a disaster. - to know after all that happened. It would be great if you could give everyone a sense of, remember, this was the heyday. The internet was booming and moving and rolling, and valuations were different than we see them now. But if you could give us that glimpse because I haven't heard you talk much about this, about what happened, how they approached you or how you approached them.

So I'd love to know... - In terms of buying the company or? Well, let me give you the background because people probably don't know the company. In 1995, the Internet was just beginning. When I was a kid, which is referenced several times, I went to Indiana University, where basketball is big. The way we listened to basketball games in Dallas is that someone in Bloomington, Indiana, would put a speaker next to a radio, an AM radio, and then in Dallas, we had a table, a bunch of six-packs, and We would have a speaker and listen to the game.

This is how we listened to the game. The Internet was just beginning.Isabel. He is the great one. Because as you get older, there's something you think is fucked up in your heart. You don't know if it's a heart attack, you don't know if it's just a mistake, whatever it is, but it's hard for hospitals to discern, so you have to run all the tests. With just this little innovation using machine learning and sensors, all of that is changing right now as we speak. There are large and small companies. But I will tell you the most important thing and one of the things I wanted to convey here that is changing.

The way people perceive entrepreneurs is changing dramatically, and the way entrepreneurs contribute to society is changing right now. I see him on Shark Tank. The companies that now join Shark Tank, especially those of younger entrepreneurs, have a social component. You don't want to buy something unless you think the company is contributing. Even more so now, a lot of people were saying, “You know what?” If you are a businessman and it turns out that "you get rich, that's bad." Entrepreneurs, especially people of my generation, have sort of segregated themselves into, okay, get me all the money you can, into, okay, there may be something called compassionate capitalism.

Really, it's your turn now to set the message. If you are going to start a business, having a social component is good. Being a compassionate entrepreneur is better because when you change things, you can hire people. I had to look at the companies that I control now and I said I want to make sure that no one that works for, particularly the arena and the Mavs, gets public assistance because it's wrong. I think it's wrong that someone who works for me doesn't make enough money to get public assistance. That's the kind of attitude I think needs to change now among business owners.

That is now becoming part of your responsibility. I think that is vitally important. Guys like me, women like me, we can look and go back and correct the mistakes we've made. I have done many and I have learned from them. But it's your chance, and I think it's vitally important to recognize that you're going to set the tone for how people perceive entrepreneurs in the future. If you introduce compassion and look at the needs of the people who work for you, from the beginning, I believe you will have stronger companies, less turnover, and better results. - You have done many interesting things.

Everyone here in school will graduate and, at some point in their lives, get their butts kicked in business. They will get fired and have a boss they hate. In your case, you have done many interesting things to be able to talk about it, what was the biggest problem and learning, and how did you get up from the ground, if at all? - When I arrived in Dallas, I was a bartender at night. I moved in with one of my friends from Indiana. I said, you have to come to Dallas. I'm like, I'm there. My car would only go so far.

I had a Fiat X1/9 with a hole in the floor that was eating oil every 60 miles. I went there and found a place called The Village. It was the largest apartment complex in the world. We had six kids in a three-bedroom apartment. I didn't have my own room, I didn't have my own drawer, I didn't have my closet. I had a bunch and a tattered towel I stole from Motel 6. That was it. I was looking for my career. I got a job at a software store. I had no background in technology, so I was teaching myself all this.

Because the way I look at technology is that someone invents it and everyone else is tied for second in ability to learn it. If I work harder and faster to really dive in, even if that means reading the manual, just diving in, then I can have an advantage and I can... - How old were you during this? - He was 24 years old. I was sleeping on the floor, working at the software company, learning, learning, learning, learning, learning, getting better at what I was doing. Then one day, because I was dying to get out of that mousetrap I was living in, I had the opportunity to go out and close the sale that would have given me a commission of $1,500.

I went with my boss. His name is Michael Humecki. I said, boss. One of my responsibilities was to sweep the floor, clean the windows and open the door to open the store. I got this sale, you have to let me close the sale. He says, "No, you have to be here to open the store." I say, Michael, I mean. "No." I made the executive decision to go out, pick up the check, wondering if I hand this guy a check for $15,000, of course you'll change your mind (claps). I was fired on the spot. Here I was living in a shit hole, excuse my French, just this ratty place with a Motel 6 towel.

Sorry, Motel 6. ( audience laughing) I didn't really know how it was going to turn out, I decided, okay, I'm a terrible employee. I went to one of the companies I had been talking to, Architectural Lighting. I said, look, I need $500 to be able to buy the software that they had. You want, I promise you that even if it doesn't work, I will wash your car, I will walk your dog, I don't care what it is, I will do whatever it takes to make it up to you. They gave me the $500 that allowed me to create MicroSolutions. out of the rat hole and my company became a real company.

I sold it for $6 million when I was 29 or 30 years old. - The word balance. Obviously, you're wired a little differently than some people. - Some people think that, yes. - Only a little. But how do you find a center, how do you achieve balance, how do you spend time with your family? How do you do that to make all this worth it? - Two different things. I was at two different times in my life. Wait. I didn't have a family. When I was 24, 25 years old, I went seven years without vacations. For me, it was balanced, a lot of people disagreed, because I enjoyed every minute of it.

Yes, there were difficulties and my back was against the wall. I'll tell you a story, your back against the wall. After Michael Humecki fired me, H-U-M-E-C-K-I. (Audience laughs) But I don't hold a grudge. (Audience laughs) We had started this company, MicroSolutions, which is exactly what it's called. It's simply what it implies. We would connect PCs and LANs and this and that. One day I receive a call from the bank. We were small, four employees. We finally had $84,000 in the bank, which was amazing for us. We were maybe six or eight months old, I don't remember exactly what it was.

We were small. One of my friends helped us set up the computers; We had a guy, partner, Martin Woodall; and a receptionist. I thought I was using all the accounting principles I learned in Indiana, where I would review AP, accounts payable, and then one of the other people would sign them after checking them and put them in an envelope. Then the receptionist would take the printed check, lick it, put it in the envelope, lick it, and mail it. Easy, windy, right? Receive a call from the bank. "Um, we had a bunch of these checks" totaling $82,000 where someone "deleted the payee" and put in her own name, Renee Hardy.

Not that I hold a grudge. H-A-R-D-Y. (audience laughing) And cashed them. Literally, this woman, Renee Hardy, if you ever meet her, she's a little older now, she took 82 of our $84,000. I remember you called the bank you just let them launder a check and put her own name on it, and you cashed it. old school banker from Texas says, "Son, leave him alone." "You don't have a urinal to pee in." (audience laughs) I had two options. I could get mad or just get over it and go back to work. (laughs) I'm. like Boss Hogg, how could you do this to us? (Laughs) You guys don't know who Boss Hogg is, it doesn't matter (Audience laughs) I just got back to work and yada, yada, yada, we opened up. step and we returned the money that was supposed to pay the checks.

But shit happens. In terms of balance, I left. I made it very, very, very clear that I was in love with MicroSolutions. (Audience laughs) I would never leave him alone forever. The girlfriend said, is it me or your business. I asked myself: what is your name? (Audience laughs) There is no balance. But once I got to that point where I didn't have to stress about those things and I sold several companies and things were going well, then I started dating for real and started a family. Now my three children are nine, 12 and 15 years old. Now everything revolves around them.

It was worth the wait. I'm a little more mature. Sure, not much more, but a little more mature in terms of those things. It made me smarter. Now I can focus on balance and putting them first, but I waited. For those who try to do everything at once, it is difficult. I'm the wrong person to ask. - People are starting to throw their hat in the ring to become the next president of the United States. Do you know anything about that? - Well, I'm here to announce that. (Audience Laughs) The definition of bad parenting is running for president when you have three kids, ages nine, 12, and 15 (Audience Laughs) because of doxing and all that.

Look, it's an interesting time. I've been very vocal, I'm not a fan of the president, but I'm not going to go into the why or how because that's all pretty obvious and I'm not going to change anyone's opinion. But the reality is that I think it's time for a change. Obviously not only about him, but in general. Regardless of what I do, I think seeing Kamala Harris come out was amazing. Watching what she's doing AOC. There are people who want to break things because I think the system is broken and we need people to break things.

But I think what's happening now is that people are establishing themselves within one party or another first. However, I think both parties are responsible for a lot of the problems we are having because everything is so partisan. I think there will be an opportunity, whether it's me, someone else, whoever it is, whether it's from a party or independently, to go out and lead with solutions. I'll give you a perfect example: healthcare. How do we measure the success of the Affordable Care Act, the ACA? By number of people who are insured. The Biggest Lie Ever Told: What Does Insurance Have to Do with Health Care and Wellness?

You can have all the insurance in the world and most people don't have enough money to pay the deductible. Yet we're standing there saying, "Keep the ACA." Okay, it was a lot of effort, but insurance has nothing to do with well-being. For me, an entrepreneur, like someone here, has to find solutions, solve those problems. GDP. I think income inequality is one of our biggest problems. It is awful. It's one of the reasons I went back to my companies and made sure everyone was making at least $15 an hour, if not more, that no one was on public assistance and got the help they needed.

Again, compassionate capitalism. But we try to measure the strength of our economy based on GDP. The GDP is total. It has nothing to do with lifting people from below or helping those below, but no one is going to say anything about using GDP as a measure or proposing alternatives. That's what you have to start thinking about because if you can't measure it, you can't evaluate it, you can't find solutions because everyone will evaluate it based on GDP, and GDP is the worst possible measure. The number of insured people is horrendous, it is one of the biggest lies ever told.

There are solutions. If I come up with them, and I work on them, and I think there are better ways, then, okay, there's something to do. If I don't find the solutions, then I don't want to be someone who just stands there because it's typical. This is what I think. This is what I will do. This is what is wrong. Here's why everyone else sucks. Here's why you should choose me. To me, that's not the way this country is going to move forward. That won't unite people. But if you come in and say, "Forget about insurance," insurance is part of the problem. "Insurance should not be part of the solution. "Let's find a better answer." Okay, I think people will listen to that person. - Mark, last question I have, and then we'll get some really good questions from the audience, and that is that a lot of this team will graduate in the not too distant future.

We have many second MBAs in my class this year. Many other students are not all connected like you. We understand, but in terms of your point of view. about people, whatever it is, I take risks like I do in one-on-one meetings with my students. Some of them are in jobs that are fine, but they're not really doing anything to get out of it. We have a special talk when that. It happens. But I think my last question is, from a consultative point of view, what core do you give to people? Because as far as we know, this is not a dress rehearsal.

I say to everyone. One, you are 21, 22, 23 years old. You don't have to figure it out right now. Do not try. You spent all this money, I'm sorry, (audience laughs) paying to learn. Now is your chance to get paid to learn. You don't need the perfect job. You just need to go somewhere where you will learn and start to be exposed to different ideas. Now it's not like when Greg graduated 40 years ago. - Oh, Jesus Christ. (Audience laughs) Wow. - And me five years ago. (Audience laughs) It was like getting a career. The pressure was to get a race.

It's going to work for IBM or General Motors and receiving a pension. Those days are gone. TheThere is a service that I don't use. There isn't a platform that I won't use it on because, like I said, I want to be on the cutting edge and I want to be able to kick everyone's ass. That's one. Secondly, in terms of transition, obviously traditional television is dying quickly. I just read something that between 18 and 49 years old, grades have dropped 27% in just two years. There is a challenge there. The unknown question for traditional television is that as people get older, as Greg ages, (audience laughs), do they go back to traditional television or stick with streaming?

That's the second part. Now the most important question. Sorry, Greg. The same thing happens to me all the time too. The biggest question in all of this is 5G. Because 5G changes everything. I've been trying to convey to those industries that 5G with zero latency and much higher speeds will cut the broadband cord. For those of you, like you can sort your internet first thing when you move to a new place or whatever, not anymore. You won't wait for the cable to arrive. You'll just order 5G and it'll be wireless, connect to your phone and everything else.

Maybe you put your phone in the little case that connects your apartment or house or whatever. When you have zero latency available like that everywhere, apps will change and the way you consume all types of content will change. It can be much more interactive due to zero latency, so we'll see more of that. These are all types of questions that I think we don't have answers to and that will affect all of those outcomes. That's what I pay attention to. - Thank you. - Hello, my name is Alexander Heyman and I am... - Alexander Hamilton? -Alexander Heyman. - Heyman, it's okay. - Heyman, like hey, man, what's up? - Hey man. (Audience laughs) - Today I wanted to ask you how to generate passive income.

I'm a musician and that's what I want to do full time, but part time-- - Really? (Audience laughs) No, not the musician part, go ahead. The way to generate passive income is to start with a lot of money. (Audience laughs) - That wasn't my question. - Forward. - I have a lot of money. I wouldn't say it's... - Oh, good for you, good for you. - Leave aside... - Good for you. - I have made a couple of successful calls (Mark applauds) and put shares. (Mark applauds) I was wondering what your method is for investing and diversifying... - A couple of things. - Your wallets? - When you think about investing in stocks, you should always realize that whoever you buy from is not an idiot.

There's a reason they're selling it. Chances are, they've spent a lot more time than you trying to figure out what to sell for. That doesn't mean you can't make money from time to time because it's not easy to beat the professionals. Professionals can't beat professionals. I usually tell people two things. One, if you have any debt, pay it off because that debt, paying it off is a guaranteed return. If you are paying 19% on your credit card. Now, if you pay it within 30 days, more power to you. Most people can't. But if you pay off that debt, you just made 19% of your money.

Second way to do it, do you buy toilet paper? Do you buy toothpaste? Get that 30% discount, buy more. Oh really. Lots of toothpaste. (Audience laughs) The razor blades in particular. I bought all the razor blades I'll need for five years. I got my 40% off, I earned 40%. - Do you have a plane for that kind of articles (audience laughs)? - Although I have a big closet. - A small cargo plane somewhere that... - Where do I keep everything? But seriously, just be a smart shopper. If you know you're going to buy $5,000 worth of these things and you can save 40% on those things compared to how you would otherwise buy them, that's a return that's passive income.

Most people just don't see it that way. Paying off your debt, being a smart buyer and taking advantage of volume or whatever are two. Then three, only SXP funds. Really cheap mutual funds. At your age, you just put them away and forget about them. - Yes, I have Treasury bills. - There you go. (Audience laughs) You're way ahead of the game, congratulations. - Thank you. - What is your latest success so I know? - I'll be working for Kendrick Lamar's engineer during the summer. - Cool. - I will release my song very soon. You can check it in... - With what name? - Under Heyman, like hey, man, what's up? (audience laughing) - There you have it. (Audience applauds) - My song is about never getting into debt and always paying your credit. (Audience laughs) - Guys, we only have time for one more question, so I'm sorry to those of you who stood in line.

We have time for one more question on this side. - Hi Mark, thank you very much for coming and talking to us. - My pleasure. - My name is Rashiv, I am a university student here. My question is, I heard Reid Hoffman say that to scale, you have to do things that don't scale. Like when he interviewed Airbnb, he said, "Okay, don't try to create a three-star experience. "Try to create an 11-star experience." That sounds incredible, but the whole trend right now in startups is agile. read. Build an MVP, get feedback, build it some more, get more.

How do you reconcile that? How do you build something amazing, but get started, and then other people... ask your questions because it's. to your customers, it's all relative. If you have a great experience, then 11 is great, like, oh my God, it's great, but if you can't get to 11, just ask your customers. whatever you're doing, know better than that. Airbnb can talk about an 11, but if you've used Airbnb, I think they rented my old apartment in the best position to be successful in taking care of your clients. I would walk your dog, whatever, you just have to have that attitude and get out there.

But you have to have clients. There has never been a company in the history of business that has been successful without sales. Customers will tell you whether they spend money with you or not. - Sounds good, thank you very much, Mark. - Why did you wear a suit? - I forgot my Indiana jersey at home. (Audience laughs) - That's fast. (Audience applauding) - That's good, I give him credit. - Okay, I'm going to get in trouble. Let's do one more. - Thank you so much. Mark, I'm a graduate of New York University from... - Everyone else can sit down because we can't take it anymore. - Forward. - Thank you. - My name is Mahmoud.

I graduated from NYU School of Engineering about a year and a half ago. - Thank you, Mahmoud. - Since then I have worked in venture capital in New York and my technological knowledge has helped me a lot in that. I am now in the process of creating a venture fund. I have two questions basically. Many of the students here are all from other parts of the world, not the United States. Over time, because of immigration laws and labor laws and all that, a lot of them will end up going back to their home countries, essentially. - That's unfortunate. - Do you have any advice for people who are in this room and who have acquired a lot of knowledge and learning from here and now want to return?

So the second question is: how important is venture capital, in essence, and doing something to enhance your learning there and bring it back to the industry or whatever? - Well, the first thing I would do is talk to every person I know who is eligible to vote, kick them in the butt and make sure they vote. (Audience applauds and cheers) Because that's the only way this is going to change. But that's your way of helping control your own destiny. Go out and volunteer. You don't have to be an eligible voter to volunteer for candidates you support or think are really helpful.

In terms of venture capital, I'm not as big a fan of vulture capital as a lot of people. (audience laughs) I'm a big fan of sweat equity. Because once you take money from someone, everything changes, right, Reggie? (Audience laughs) It's just different because when it comes to your baby, and even though you have capital constraints, you get to make all the decisions. Once someone else comes in, everyone has their own opinions. If you can do it without needing capital, that's always the best bet. If you need to go out and get capital, friends and family. Once you have friends and family, or if you can't get friends and family, then you have to start getting, as the last gentleman talked about, MVP, the most viable products, and move on and start generating sales.

Because if you can get a company that generates sales, maybe even profits, then hopefully you won't have to raise money, but if you have to, you have... - The question I was asking, would you have advice for a person? Like me, who will return to his country in a few years and create a venture capital fund that takes advantage of the innovation ecosystem here to benefit the industry there? - Look, any time you can leverage your networks, that's something Greg is great at, so take advantage of it. But it depends on the country, the laws and the cultural norms of the country.

It's really individualized, so I'm not the right person to talk about that. But good luck. - Thank you. - Great, thanks for the questions (audience applauds). Now you'll see three of NYU's best presentations. - Cool. Now we need everyone to go du-du-du-du-du-du-du. (audience laughing) - We'll take a second. They are going to move these chairs. Someone is going to do that. Oh yes, oh yes, now we'll give you a gift. - Cool. - Come on, let's give a gift and a big round of applause. (Audience applauds) I'm taking a selfie with you, Mark. I'll take a selfie with the whole team.

My class knows this is our signature selfie. Oh, I forgot my selfie stick that (audience laughs) someone gave me. - I wouldn't take a photo with a selfie stick. (Audience laughs) - Come on, everyone has to at least pretend to be applauding. (Audience applauds) Thank you. Alright, let's get ready to do this. We will have someone make the announcement. - Mm-hm. - Yes. - Yes. Oops. Hello everyone. I'm Cynthia Franklin. I am Director of Entrepreneurship at W.R. Berkley Innovation Labs and I also have the pleasure of teaching in the Startup Lab, which is an undergraduate course here at Stern.

I just want to thank the Startup Lab students who are out there. Thank you very much, many of them are wearing Ideas Never Sleep clothing. You are helping, so thank you very much students. (Audience applauds) I'm normally pretty witty and funny, but I'm told I have about 13 seconds, so I'm just going to do a seven-second commercial. It is to invite everyone here in the room, whether they are students, alumni or faculty members of New York University, who are interested in starting a startup or who are already in the process of starting a startup . We would love to work with you.

That's what we do. For the last question, or the penultimate question on MVPs, this Sunday we have a boot camp in this very room on concept testing and prototyping. It is not incongruous. You can do both. We work a lot with that at W.R. Berkley Innovation Labs. It is my pleasure to introduce you to three teams that we have had the honor of working with over the years and who have come out of many programs at NYU because NYU has many resources , but the most notable is the 300K Entrepreneur Challenge, which is the largest entrepreneurial initiative my team organizes here at Stern.

First up will be Josh Sakhai of Ephemeral Tattoos. Go for it. - Ephemeral Tattoos. (Audience applauds) - Can I borrow your clicker? Hi Mark, hi guys. Thanks for having me. - What's up with Greg? -Greg. I didn't even see you, you look so young. (audience laughing) How are you? I'm josh. - That's great. - I am the co-founder and CEO of a company called Ephemeral and we are going to talk about tattoos. Tattoos have become a huge part of our culture. Today, about 90 million Americans have tattoos. Most people I've talked to who don't have one have thought about getting one because, well, they're pretty awesome.

But what's not amazing (the audience laughs) is the regret that comes with it. Tattoos are permanent, but people change. Your lifestyle, your relationships, everything will adapt as you start to grow. Figuring out what you want for the rest of your life can be really difficult. Forget about removing tattoos. The only way to remove tattoos is through laser surgery. Actually, that's my friend Seung's arm. He went through laser. He paid $500 for a session. He left her with permanent scars. They told him to come back 10 more times in two years. He didn't come back. If you want to get a tattoo, you have two options.

You can get one of those silly temporary stick-on tattoos that maybe lasts two weeks, or you can get something that lasts forever. There's really no space in between. That's why we started Ephemeral. We are the team of Doctors in Chemical Engineering. We are creating tattoo inks with different durations. Tattoo artists apply these inks the same way they would apply any other ink, but they fade completely naturally and on their own. The first product we launched is a four to six month long tattoo. We will open our stores at the end of2019 right here in New York.

Now, Mark, you might be thinking that maybe tattoos could be something for me when I was younger. I wouldn't forget my girlfriend's name. But now I'm a little older. - You want to see my hobo stamp, right? (audience laughing) - That's amazing. (Audience laughs) Honestly, I think you have to go to some Mavs games with some ink. Imagine how excited they would be (audience laughs) if he walked into the next game like that. I think they would go crazy. Seriously though, we see a huge application in sports. Players and fans can support the teams they love.

I think you would be the best one to lead that effort. (Audience laughs) We started researching our technology about four and a half years ago in a small lab space, literally just a table, in Harlem. Over the past four years, we have taken research through in vitro studies to the first human studies. When I say early, I mean very, very early. Right now, the tattoo industry generates around $2 billion dollars, a little more than in the US, but we think this

mark

et could be much larger. We've talked to about 500 millennials in New York and found that 2/3 of them who don't have tattoos actually want one.

The only thing holding them back is a lifelong commitment. Not even just opening the

mark

et to these new consumers, but changing the way people buy tattoos. Instead of getting three tattoos in their lifetime, we believe people will get three tattoos each year. They will come to Ephemeral, fall in love with its pieces, leave and come right back. A little about the team. I was born and raised in a Jewish family on Long Island that hates tattoos. He came to New York to study computer science at New York University. Now, obviously, he runs a tattoo business. (Audience laughs) Our CTO and co-founder, Brennal, was an adjunct professor here at NYU.

He recently came from Unilever's Open Innovations group. Our VP of Engineering and co-founder, Vandan, was actually Brennal's apprentice while he was doing his PhD at NYU. They have worked together for the last four years. A little history of the company. We started here at New York University. The first two years were supported, thank you, Cynthia, entirely by these funds, competitions, grants and any free capital we could get. NYU is very supportive, so thank you all for helping us get there. Two years later, towards the end of 2016, we got our first lab space and started doing some studies.

Raised around 500K in small round angels from free seeds and small VCs. It went through Techstars. At the end of 2017, we raised our first round of entrepreneurship. Mark's advice is good advice for starting a business. This year we expanded our studies. We are increasing from three subjects to 50. We should open our first stores. I think it says partnership with Mark Cuban somewhere, but we can talk about that later. (Audience laughs) Thanks guys for your time. If you want to know more, feel free to send me a note. Do you want to get some tattoos? You know where to go.

Thank you. (Audience applauds) - So when do you launch your product and what has stopped you from launching it until now? - Yes, R&D is very difficult, it takes a long time. In our business, particularly, there is a long feedback loop. If you want to get a tattoo... - Comments on what? Feedback on what? What is the item of the product that requires feedback that you are unsure about? - Good question. Watching the tattoo as it begins to fade. One thing that is important to us and our clients is to make sure your tattoo doesn't look like shit after a month.

It will last six months and look like shit for more than half of that time, that's not a good product. Something that's really important to us is optimizing your fade profile... - That's crazy. First of all, no one will expect perfection. Just one line to remember: perfection is the enemy of profitability. You don't need it to be perfect. You've already raised $3.3 million at what valuation? - The most recent price was 12. - 12. You have sold 25 or 30% of your company, depending on previous valuations, right? You don't want to have to raise more. Why do you think it has to be perfect in the way it fades, rather than just telling someone that each person's skin type will react differently to fading?

So it will work effectively for at least a month. How much did the ink cost you? - Ink is cheap. - Good. The time is just tattoo artist time, right? They'll charge you separately anyway, so why wouldn't you have already opened your store and said, "Look, it's going to be great." Depending on your skin type, "here's a little chart." Teach our tattoo artists "based off the beaten path." Surely you have 30 days, and we will only "charge you 10 dollars." "The tattoo artist will charge you whatever, "depending on the complexity." Then we'll learn why people are trying it. - That's a great question, great points.

For a while, that wasn't our problem. We were having trouble getting The ink will penetrate the skin, stay there and heal well. We are only now starting to solve those problems and this has started to become our concern. If we continue talking to clients... - Wait, wait, wait, wait, wait, wait, wait. wait, wait. So you're saying it didn't work. - Well, it didn't work, let me clarify for a second. - It's very binary. (Audience laughs) - No, to the extent that it worked, we got it. for the ink to go into the skin and disappear, but it didn't last long.

It lasted less than 30 days. Something we had to work on... - So why didn't you come up with a two-week tattoo - You can get it? just a sticker. - What is that? - You can get one of those stickers. - But still, you have the advantage of being able to retain it. Come back every two or three weeks. The point is, as someone said before, you have to be able to spread it. As long as you set expectations the right way. You may not sell as many, but at least you'll get feedback and as long as there's no threat of injury or complications, which you don't seem to care about. - No. - Then why don't you start doing it?

I'm sure the differentiation is based on skin type, right? - Sure. - The ink and the skin type, which is going to be a variation anyway, so you can't promise a specific amount of time anyway. Why wouldn't you do it now? - These are great points. - Well, that's why I'm here. (Audience laughs) You didn't answer the question. You've talked about it. - At this point, we haven't even gotten the ink to look that good. - Well, that's a problem, right, because that's not what you said. You said you're going to make it to 50. It either works or it doesn't.

Works? - Define work. (audience laughs) - Am I saying it looks like shit or can I live with that? - It depends, but it doesn't look very good now. - What's even worse is if you said, oh, I thought it was going to fade. If that... - That's not the problem at all. - That's not the problem? - It goes. - Did he leave, did he leave? - Yes. - What does it take to go from two weeks to four weeks to six weeks? Because that's the uncertainty from an investor's perspective. How is this problem solved and what is the solution? - Engineering.

That's exactly why we're doing the labs. Slight changes in the formulation, slight tweaks. - Is it engineering or is it chemistry or? - Engineering. - Engineering. Explain that because I'm not sure about that part when dealing with inks. - We have two more presentations. - It is fine, I am sorry. - You're starting to fade. (Audience laughs) - That's a great idea. - Very brief presentation. - It's really a great idea. The challenge on my part is that they have already raised $3.3 million. You have to be able to show me that you can effectively use that $3.3 million to get a salable product.

Now I'll say it again: perfection is the enemy of profitability. If you can get to the point where it's not a perfect product, but because it's so differentiated, it solves it. Just like henna tattoos and all that, people know what a henna tattoo is. Seriously, for a drunk at 12, you go out, you go to NYU and it's two in the morning and your friends are getting tattoos, and you don't want henna because you'll look like a bum, but you can do this and it lasts. a month or two weeks or whatever, and you get the ink and you go through the whole process, yeah, people will still say yes to that and pay a premium for that.

In this particular case, you need to know what business you may be in, as opposed to the perfect business you're looking to solve and the problem you're looking to solve. Again, you can plug this in and fix that nighttime, temporary problem, at least I got a tattoo. I saw what it was like, I know what it's about. Charge a premium for that and then work on your chemistry in parallel. I think it's a great idea. I think you've already raised too much money for me to participate, but you know my email and can keep me informed. - Sure.

Thanks, Marcos. Thanks guys. (Audience applauds) - Well, ladies and gentlemen, please welcome Kobi Wu from Visuwall. (Audience applauding) (Greg grunting) - Don't do that to me. Do not do that. (Greg grunting) It's great to be back. Thank you all. I graduated A15 from the Executive MBA program here. Cynthia, thank you for having me. I didn't win, Josh won that year, but that's okay. We are here today. I am very excited to introduce Visuwall Technologies to you and to all of you as well. Simply put, we are a data-driven marketplace that is paving the way for programmatic outdoor advertising, one storefront at a time.

As you know, the face of retail is changing, or maybe you don't know it, but you can see it if you're walking down the street. If you go down any street in Your Town, United States, you will see many vacancies. Those vacancies will remain empty for 24 to 36 months. The owners do not make any money during that time. It is painful. But it's a huge opportunity that's been hiding in plain sight. What we do is take an empty storefront and put a big, pretty image on it. Media, media at eye level. You've seen it before. Looks great.

But we're doing a little more than just creating an eye-level sign. We have computer vision technology behind each image that tells you how many people walk by and the level of engagement. What do I mean by commitment? ♪ Cardi B I do this shit like cardio ♪ - Let's talk about it for a while. ♪ Diamond District at the Jag ♪ - Turn up the volume, my team. ♪ Certified, you know I'm gang, gang, gang, gang ♪ ♪ Put the lid down and blow your brains out ♪ ♪ I said I like him like that ♪ ♪ Oh, he's so handsome, what's his ♪ - Okay, okay. Cardi B and I decided that's commitment, making those heads turn as they watch.

Okay, I slowed it down, but you know you saw two eyes looking at that photo. This is a very important analysis for any brand and, not in vain, also for the owners. Visuwall is basically a marketplace that allows an advertiser, a media buyer, a brand manager, whoever, to access the platform, find the placement, evaluate the media rate and plan their campaign. For us, production is turnkey. You simply give us the artwork and we take care of the rest. Then there's a dashboard that actually gives you your real-time analytics so you can see what's happening with your campaign in real time, by the second, by the day, by the hour, or at the end for a clean and tidy report.

The analytics we give you, like I said, are computer vision, so we can tell you the mark if it's a man or a woman walking, their approximate age and if they're smiling, happy, sad, neutral, upset, confused, whatever. be. It's no secret that most New Yorkers are either displeased or neutral. (Audience laughs) The way we deliver our artwork is simple. The medium can be an adhesive vinyl that adheres to the inside of a window. You could take over the entire landscape in the window. We call those landscapes. It's window sill to window sill. There are four-by-six sheets, which is the standard side of a bus stop, so you're very familiar with that.

We also have a shadow box where you can display a real product in the window. Just put that sucker in there and we'll take care of it for you. Then the third is something like the vision of where we are going. Digital screens in a store window, allowing us to... - Allow me to interrupt, sorry for interrupting, I apologize. - Sure. - Not all of the ones on the previous slide were digital screens, right? They were... - No, those are static. - Those are static, just sheets. It's okay, I got it, it's okay, I'm sorry. - You are moving towards digital. - I'm moving into digital.

Digital allows us to sell it, sell the media now instead of static, where it has to sit still for a week, two weeks, a month. Now we can sell it by seconds i.e. 10 seconds, 30 seconds or even a 60 second domination. Overall, the synopsis of our benefits is that we provide incomeincremental to the owner. Thank you so much. We offer demographic and traffic analysis that people on both sides of the market find very valuable. Not surprisingly, we are increasing curb appeal. Doesn't that look a lot better than that brown paper that's peeling off when it's cold and it looks ugly and you don't know what's going on inside and you actually wonder what's going on on the other side, but then you're?

Like, no, no, no, let me run past. Anyway. To date we have done very well. Since leaving Stern, we have worked with great brands. We even have Uber, adidas and Marie Claire in the pipeline. Hopefully it will be in the window in March. Our owners have provided us with properties in New York and Los Angeles. We have about 80 on the platform right now. We're looking to expand that as we grow our corridor strategy. We will probably see about $300,000 in this first quarter. Thank you. (Audience applauds) We're excited about that because of course that's over 50% of what it took us 12 months to do last year.

We will be in Chicago and Miami later this year. We will be expanding to additional markets such as Seattle, Boston, and Philadelphia by the end of 2020. By the end of Q2, you will see a new marketplace and dashboard that will allow anyone, if they have a property, to list it. yourself. Basically, we're like an Airbnb now, so to speak. We've kicked in the door, in terms of retail, in terms of beauty. Now we're looking a little bit at sports and entertainment. We think that traveling to the stadiums to see a game or concert is the next thing to do.

If you know someone. (Audience laughing) - But why, why? - Because. - Because that's always a good answer. - Because it's a great answer. No, if you're on your way to the stadium, brands are excited to present their messages. - Are you simply talking about better traffic availability? - Absolutely. - I understand. - It's a concentrated group of people on their way to the arena. But not in vain, the brands that are in the arena now have an opportunity outside. We can expand that footprint. Anyway. (audience laughing) Thank you very much. I'm looking forward to talking to anyone who has an arena in their pocket or a team franchise. (audience laughing and applauding) - Do you have anything, Greg? - My first question is measurement, attribution.

I get it, dominance and surprise. Brands will ask you to measure. I see you have the board. But at some point it has to become something. How far down the funnel do you take your customers? Or do you keep them at the top, with the plus mark? - We are absolutely willing to delve a little deeper. With the introduction of the QR code reader on iPhones, people are starting to find ways to implement it on Windows, which helps with at least that click engagement. We have geofenced all of our locations and can understand who is in those locations from mobile devices. - Good start. -We can deliver ads directly to those mobile devices.

Play that ad. If you see it, it will take you directly to any dedicated page... - Wait, wait, okay, okay. - Are you excited now? - No. - No. (audience laughs) - You have to explain to me exactly what you're doing from a computer vision perspective because a lot of people say that computer vision exists, but just put the little camera, like the one you have. there, it is not. It won't give you computer vision or precise demographic information or an accurate count. You have to tell me exactly what you're doing and how. - The sensor that is actually in the window looks at the people who are directly in front of it.

Count up to 30 feet. We have another sensor that would move over thirty meters. - What technology are you using? Because, again, and if you just don't know, you don't know, but there are different ways, using computer vision, there are different ways to tell what's happening in front of you. Most of them fail because once you go over, it counts double, triple, and quadruple. (crosstalk) Come back. Four people, it's hard to separate them. There are very specific technologies that do that, some of which are some of my companies that I have patents with. - I know one or two. (laughs) - That's why I ask specifically. - A, I'm open to using some of those other technologies. - It is expensive. - It is. - Leave the camera aside, you need connectivity because if you want it in real time.

Where I was going with this, you don't need it. - What, computer vision? - Yes, you don't need the demographic information. What makes this work is that I think it's a great idea, but what makes it work is that you just use leaves, which are cheap. If you are going to sell, if you are going to a brand. First of all, you have acquired a property. As you said, there are a lot of empty properties, so it's a great opportunity. But what makes it work is that you don't have to make capital, what would make it work well is not having to make any type of capital investment because by doing it this way, apart from the use of screens, you have to have energy, You have to have connectivity, you have to pay per bit or you have to pay setup fees, you have to monitor it, you have to measure it, you have to confirm the accuracy.

That complicates it dramatically. - He does. - In contrast and leave aside the music. The cost of a sheet, like one of the sheets you have, how much does it cost? - A couple hundred dollars. - At most. Even personalized and everything. Being able to say to a brand: "Okay, on the way to the American Airlines Center," or going down Fifth Avenue in New York, "for $27,000, we already know that, in general, "there are 26,000 people walking" at any given time. moment. day. "This is the cheapest way for you to have access to those people. "Everyone else has this huge cost of capital. "We're simple and bad. "We will give you a beautiful graphic" that will make you stand out. "We can change it as many times as you want. "Pay me." Now in your own way, you have complicated it because you feel there is a great need to provide demographic data so that everyone can be certain about how they see that you have increased your costs dramatically.

Instead of take the path of least resistance, which is always the best way because you can iterate, you can learn, you can serve your customers much more quickly and you're spending all that extra money to do the technology. If you said to me, "Mark," if you want. see my companies, "you can go to mark

cuban

.com. "I checked and looked at this company. "Alissa's cookies would be great. "Because all of your inventory is perishable, "I have this inventory and it takes us "three days to prepare the sheet," or maybe one day if you go to a quick print place. "We can have it upstairs." For thousands of dollars, you get it "for a day to promote your brand." That's easy money. - It is. - Then you make your separation with the real estate company... - The owner. - The property management company.

Boom, boom, boom, you can go everywhere immediately. You don't have to make sure they have power and all that. Why not keep it simple and just take the path of least resistance to get more money? (Audience laughs) - We are running out of time because we have one more group. - Very quickly, how much money have you raised? - 550,000 - Don't collect even five cents. - Seriously, that's a great idea... - Thank you. - If you simplify it, go where it's easy for people to spend money and you don't have any capital costs from the client who paid me X amount. dollars, depending on the traffic and how much inventory I have available because then you can vary it.

If you're selling everything on Fifth Avenue, for example, raise your prices. If not, lower them. They can be variable prices. Do it like this and it will be easy money. - So throw out the technology part... - Yeah, who needs that shit? - Oh, (laughing) okay. - Seriously because it's going to be wrong no matter how hard you try. That decreases the overall value there. - MMM. - Good luck. - Thank you. - Thank you. (Audience applauding) - Very good. -Who is my next victim? (Audience laughs) - Actually, do you still want to go up, Chris? (Audience laughing) Christopher Mitchell. - Wait, Christopher, before you leave, first of all, I was negligent.

Sunday nights on ABC, Shark Tank. (Audience laughs) I'm going to tell you that's exactly how it works. We don't know anything when people come in. On TV, you watch it for 10 minutes. If we go in there, we could interrogate them. If it's a dumb deal, it might take 20 or 30 minutes, but if it's legit, something like these companies, it might take two hours. - Wow. - Then they edit it. What you're going through, it's not just me. There are five idiots up there (audience laughs) and we're all interrogating you. Congratulations. - I'm sorry for those guys. (Audience laughing) - Me too. (Audience laughs) Go ahead. - Christopher Mitchell of Geopipe. (Audience applauding) - Hello everyone.

Perfect. Have you ever thought about what it would take to create a perfect copy of New York, San Francisco or Paris that you could explore on your computer? I'm Dr. Christopher Mitchell and I'm excited to introduce you and all of you to Geopipe. Creating detailed virtual copies of the real world is a central problem in many industries, worlds that can be used for visualization, simulation and interaction. While raw data about the world is available today, from photographs to laser scans and maps, it is still expensive and time-consuming to convert this data into usable 3D models. Geopipe aims to be that missing link between data acquisition and its presentation.

For example, consider autonomous vehicles. They need to be trained on virtual copies of real cities, virtual copies that show where every sidewalk, lane, tree, and road sign is. But creating those models today can take large teams of artists months. Geopipe aims to solve this by understanding what is in the world, not just what it looks like. Similarly, in the case of video games, you often want to take a game and set it in a real world, but creating a model of an entire city can take a team of artists months. Geopipe can create a model of an entire city in less than an hour.

Finally, consider an architect. Even to extrude and model, a smooth white model from a single block can take an hour. If you need to add details and color and expand it to an entire neighborhood, timing can get out of control and last for months. Geopipe allows you to obtain a model of a city with any level of detail, at any scale, in about 30 seconds. We are working on what is estimated to be a $17 billion 3D modeling and mapping space by 2020. Then within this, around 7 billion will be spent specifically on creating real-world 3D models for automotive applications, training simulations, entertainment and architecture, engineering and construction.

My co-founder Thomas is rarely seen without a Star Wars t-shirt and I really love trains. But the most relevant thing is that we share a passion for distributed systems and algorithms. I'm the chief scientific officer of Geopipe, the CEO, excuse me. I earned my PhD in computer science right here at New York University. Although Thomas almost made it to NYU, he is at Brown. He is in the last month of his PhD, also in computer science. We have exactly the skills needed to solve this problem and have spent 15 years working together building teams and solving big problems.

We have also assembled an advisory board with experience in business, entrepreneurship and academia, and now have a team of four people working with us. We consider one of the most interesting parts how it works under the hood. We start with raw data about the world, that same raw data that I talked about and that is quite available, from photographs to laser scans to maps. We obtain this data from a variety of sources, public, private and government. We then pass it through our proprietary algorithmic pipeline. As cliche as it may be, we use deep learning and computer vision techniques, and I'll be happy to go as deep as you want to examine this data and understand the shape and facades of each building, the location of the trees, the number of lanes on the roads, where the sidewalks are, where the water is.

We then go a step further and convert this rich understanding of the world into immersive and detailed 3D models. We allow our clients to access our models through a simple, easy-to-use web interface called Contextsnap. They simply select the area they need, the appropriate level of detail for their application, and then they can download those models to use in the software they already love. We also allow customers who prefer to take our models and put them directly into games, simulations, and VR experiences to use our Unity SDK and API to stream those worlds directly into their applications.

For example, our Unity SDK lets you fly, drive, or walk through an immersive copy of a real city with every detail reproduced. - Are these all the details that are being produced? - We're getting there. (Audience laughs) Happy to talk more about that. We funded ourselves with approximately $400,000 in undiluted financing over the last two and a half yearsto achieve a first fully functioning product. We have worked with clients in the field of architecture and in the field of games. We have had dozens of free and paid clients. We are working to generate an additional $200,000 of potential annual revenue across our portfolio to demonstrate product market fit this year.

Thanks to Techstars, the Berkley Innovation Lab and other places where we have been able to refine our company and our business model. We are in the process of expanding coverage, getting more clients, building our team and reaching higher and higher levels of detail. We are in the process of closing the final part of a 500K pre-seed round. If you're as excited as we are about understanding and analyzing the world on a grand scale, we'd love to talk to you. We are Geopipe. (Audience applauds) - The demonstration you gave us... - Yes. - Didn't you have all the details? - Correct. - Is that where you are and are you progressing to go further? - That's exactly it. - Is your real challenge the processing speed and the time it takes to process everything?

That's your cost and that's your time consumption? - Almost all of our budget goes to R&D. We have models that we can produce now and that are already good, more than enough, for architecture, engineering and construction companies. - Are those physical models that are printed? - No, these are virtual models. - Just virtual, okay. - They can watch them on a screen. They can print them, but they mainly use them for virtual applications. - When you say what's good enough, because that's the point. Because if it's good enough now, then you have a product. - Exactly. - If it's not good enough, like what you showed before, then there are different types of challenges. - It is good enough for architecture, engineering and construction.

We have had them as clients. - Did anything you showed us show us the level of detail that represents what you can do right now? - Yes, everything in that is what we can do now and it's good enough for that first group of customers. We are getting to the point where we are good enough for gaming and entertainment applications. - So I'm guessing, and tell me if I'm wrong, the challenges now are capturing enough data for your models, or having the right data in your models so that you can create them with the lowest possible expense in the smallest amount. of time because you're saying you can do it in an hour and a half. - Good. - Good.

What prevented you from reaching higher level production? - Yes. It is simply time to implement R&D... - But what are you doing in R&D? That's what I want to get at. - We, my co-founder and I, have experience in this area and we have... - I know, you told us. - We plan, yes, (audience laughs) exactly what we have to do. We know what additional computer vision techniques we need to extract more information from the data we already have, for example. - OK, it's OK. Are you creating the libraries or are you using third party libraries? - We are creating the libraries. - Are you creating libraries that can take a photograph, extract the data you need to be able to recreate it, and do you use other data sources in your model so you can find what you already know? - Good. - Good?

You will take satellite data, not satellite data, but you will take real data mappings... - It could be satellite data. - Yes, but that's typical. Well, it could be any data. Then you need to be able to extract more from the computer vision to get more discrete data. So you need to have the processing power. Writing those algorithms to extract more CVs, more data from computers, from images, will take a long time and will not be easy. Otherwise, you've already done it, right? - Good. - How long, when, how many more doctors, how many people? - So if I can add something else to that. - Please do it. - How are you going to win?

What easy money can you earn along the way to help you burn off and pay some of the bills? - To answer your question first, that's why it's good that we already have clients whose needs we are addressing, in terms of the level of detail, because those are clients that are already paying us and giving us money. - How are you charging them? - We charge monthly, depending on the number of users of the companies that are on the platform, or annually. That works fine. - Are you saying that these are the places and destinations that we have already created?

Do you have access to those models? - Good. - You preconfigure certain destinations and say, "Here's the level of detail" we have. "Does that fit your needs?" - Exactly. - If it's like a game where it doesn't have to be too detailed, then you just save them a bunch of coding time, they just download the model and put it into Unity or whatever? - Right, right. - Why not do something bigger with it? Because it seems to have a decent sized market, to Greg's point. - Yes, and that's exactly where we are now: expanding our marketing efforts so that more people introduce that product to more people.

We don't want to fall into the trap of letting perfection be the enemy of making money, so we're working on getting people to use that plugin for free, get them hooked, and then get paid. - How many people do you have working on CV algorithms and that side? - We have three people working on it. - Okay, three people. You want to use the 500K in your pre-seed round to do what? - We're looking to hire two additional backend engineers to work on exactly that, as well as a sales and business leader to continue introducing it to more clients across the company. - Are you working with any of the processor manufacturers, like Nvidia or the new Google stuff?

Who are you working with there? - We are working with Nvidia, we are in their Inception Program. We work with Google to get access to their cloud. We got several hundred thousand dollars of credit which saved us from having to spend money on servers. Well, AWS and Azure too. We are also looking to work with some of the companies that have more data than we have been able to get our hands on right now. - Have you written this in a personalized way? If I understand correctly, you have three main sellers. One is selling it because one has to get people to trust it.

The second is your extraction algorithms because you have to go into details. That is, as you said, research and development. Then three is your speed and processing time because that $200,000 in credit is very expensive for you because that bill can be huge, particularly when you try everything, because you're going to have to meet all your limits and all that kind of shit. It takes a lot of time to try to get it right, a lot of trial and error. How are you going to deal with that problem? Can you write it to specific processors, like some of the new ones being developed? - Yes, in fact, we don't have to write it for specific processors. - I know it's not necessary, but you need to get to the point where it's so fast that no one has to pay you a lot of money or it doesn't take you as long to do the test. - Right, but we're using things like TensorFlow, where we let someone else spend R&D time to give us GANs that we can use to look at a three-dimensional slice of points and understand that this is a tree and this is... - - No. , I understand the use of TensorFlow and then it's already in AWS and you're doing all that.

But what I'm trying to get at is, in terms of potential investment, whether it can be done much faster. Because Google won't optimize for you. None of them will be optimized for you. If you can optimize for yourself, for your GANs, whatever, or your neural networks, then you can have multiple processes running at the same time, one feeding the other, and you can do everything much faster. Is that an opportunity? - It's an opportunity. - At what moment do you get that opportunity? - We're going after that. When we generate these cities in about an hour, that's usually about four dozen processors in... - How much does it cost you?

Assuming you didn't have free AWS, because you'll run out of credits here at any moment, how much will it cost you per minute? - About 15 dollars an hour per computer. Just doing the numbers, it takes us... - So $60. - Yes, it takes us a few hundred dollars to generate an entire city. Then we amortize those costs. We then resell those models. - As you get more discrete details, it will require more processing... - That will increase, absolutely. - Look, I like the idea. I don't really know the industry at all, but obviously if you are able to create unique CV algorithms that allow you to get to the level of detail to recreate from external data points and train your models very quickly so that you can bring in new cities and new destinations , that is a unique opportunity. - We think so. - For your pre-seed, what is the valuation you are working towards? - We are increasing that with a cap of $4 million.

We've rounded up 400,000 of that so far and are raising the last hundred thousand. - 500,000 more or 500 in total? - 500 in total. We already have 400 and we have the last 100 left. - Now I will negotiate with you because I am a shark. Yes, contact me, you have my email. - Excellent, I will do it, thank you. - Wow. (Audience applauds and cheers) Thank you. - Thank you so much. - Thank you. That was great. So, Mark, thanks for coming. - A pleasure, thank you for inviting me. - People are going to dinner. Maybe next year in 2020 you can come back. - Okay, I'll call you from the White House, great. (audience laughing) (audience laughing) - Thank you, it was very good.