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>>Jonathan Zittrain: So we are going to open it up to questions and thoughts. And while
people find their way to microphones or steel themselves to ask a question, let me just
ask you guys generally, how much the intellectual property regime matters? To what extent, as
soon as you say Eureka, I have innovated, the next step is I need to call a lawyer and
secure my patent rights? I don't know. How much?
Is it fair to ask you, Chris, or can you just send an e-mail to the legal team and never
think about it again. >>Chris Urmson: We do that. It's, hey, start
with this great idea, pop it off and magic happens somewhere. We talk to a lawyer at
some point in the future. >>Jonathan Zittrain: Uh-huh. That sounds very
painful. >>Chris Urmson: It's pretty darn good.
>>Jonathan Zittrain: It's like e-mailing the dentist.
>>Chris Urmson: Yes. [ Laughter ]
>>Naveen Selvadurai: I don't know what's going to happen in the future. As we grow bigger,
obviously we have to think about these things differently. But as a small company, I think
it's been -- we have been very open about -- and Google, too, is very open about the
tools and the software that they produce. They give it out. They make almost a lot of
the things open source, Android included; right?
>>Jonathan Zittrain: Yes. >>Naveen Selvadurai: So we are very much in
the same mind set. We built this company on a lot of open tools
and open SO software. If it hadn't been for something like Google docs where they offer
the service up, it would have been harder for us to get e-mail and document management
and all that stuff. If it hadn't for something like Scala and MongoDB which are all open
and that we can contribute to, that as we build upon those tools, that we can also contribute
to and make the tools to improve them, we wouldn't be where we are.
So we build upon open things, so we want to continue opening up innovation for other people.
>>Jonathan Zittrain: So does that mean you are characterologically inclined against even
having a patent portfolio? >>Naveen Selvadurai: It's interesting, the
way I think of patents is as a method of publishing. So if you are in academia, you right a paper
but if you are not you maybe go to the U.S. PTO and you get your name on something and
now you have something to show off. That's as far as I really like patents or
I really kind of want to see patents. I don't really like the idea that someone else thought
of something, they didn't actually go do it, and here are 60 people that are working very
hard night and day to make the self-driving car and someone comes in and says, "Oh, yeah,
in 1980 I filed this patent that says cars are auto drive." And now this person who didn't
do anything gets credit, gets money, gets the royalties, and it's just frustrating because
you have a great team that's actually building this.
>>Jonathan Zittrain: So I think I hear you saying you just don't want play that game,
either offense or defense. >>Naveen Selvadurai: I think so. The stance
we take is we don't really worry about patents, we don't really worry about any of this -- to
preserve the ideas we have. We just innovate very quickly and get it into the market very
quickly and we let people and users decide. >>Edward Wray: I think that's absolutely right.
I think if you are sitting there relying on IP protections as sort of your route to success
on that, you will fail. It's amazing how many different people have
probably thought of very similar ideas. The people who succeed are the people who just
got on and executed really quickly. And I think one of the business measures we
try to use at Betfair is find reasons to say yes to doing things, not say reasons to say
no to doing them. And, actually, I think in many ways you can turn patents around to being
reasons to say no. So I think we say, look, you have got a great idea. Go and capitalize
on it but do it quickly because technology is shortening the business cycle rapidly.
>>Jonathan Zittrain: And in that sense on quick capitalization, do you see innovation
as there is this flash of insight, you get something going, you establish yourself as
a leader in the market and then just lock that in? Or is it some kind of continuous
process? >>Edward Wray: Personally, I think it's a
completely continuous process. And again, I think that's what we are seeing is that
the key here is to iterate, is to put ideas out there, listen to real-time feedback. We
heard a lot about this yesterday. We have the tools today to get feedback in
real time, and I think you are in very dangerous ground if you sit there and ignore the numbers
that come back to you and think, well, it wasn't 100 percent what I thought it was going
to be. The really great companies are the ones that sit there and say it wasn't 100
percent what I thought it was going to be, it is 80 percent, but I am going to quickly
realign myself. And you are always sort of sitting there following that feedback.
>>Jonathan Zittrain: And do you set up incentives within the company for people to be thinking
outside the box or is it just expected as a day-to-day?
>>Edward Wray: We try, but I think the hardest thing is making sure that people don't have
a fear of failure, because I think with innovation, you are going to fail plenty of times. And,
in fact, you should fail because you need to work out where the boundary is. You are
going to learn a lot more from when you get things wrong.
>>Jonathan Zittrain: And do you have proud failures you can share?
>>Edward Wray: We have got loads of products that we've released that haven't done as well
as we'd hoped they had. And the key there, as I say, is to recognize that, believe it.
Some of the stuff we launched ten years ago, we just quietly consigned to the bin because
your customers are telling you something. We struggle slightly. Obviously ours is slightly
different because we are in a very regulated environment, so sometimes, unfortunately,
the regulator finds a reason to say no and we have to convince them. They are not usually
the most innovative bunch of people out there. And we also deal with a lot of money. You
know, we sit on a huge amount of -- >>Jonathan Zittrain: you call that understatement.
>>Edward Wray: I'm English. We sit there on a huge amount of customers'
money, and so you have to find a fine line between being cavalier in your innovation
and what you are trying to do and then suddenly somebody saying hold on.
>>Jonathan Zittrain: I guess Betfair has been known as one that has not wanted to innovate
around the legal or regulatory lines. For example, you have said you haven't had a single
American using Betfair that you know of. >>Edward Wray: Correct. As I say, we are a
regulated environment. We took a very, what we think, conservative view of the law. We
don't have gray when it comes to legal innovation. It's black or white, and if it's gray, it's
black. And the U.S. will open up. Prohibition won't
work, we believe that firmly. We are seeing that now, but we'd rather, therefore, be positioned
to receive it rather than sort of pushing that kind of boundary.
>>Jonathan Zittrain: The firm that's not under indictment is the one that can succeed.
>>Edward Wray: I don't look good in orange. I apologize to the gentleman over there.
>>Jonathan Zittrain: Let's open it up to questions, and I'd like to give the first one, if he
doesn't mind, to Yuri. Yuri, in evaluating the ventures we have just
seen described here in triplicate, I don't know, what questions come to mind for you?
What would you be asking if were you about to potentially commit a good chunk of capital
to any of these ventures? >>Yuri Milner: Asking one of?
>>Jonathan Zittrain: Yes. >>Yuri Milner: I'd probably ask Naveen, you
know, how do you think your social graph is different from Facebook's social graph?
>>Naveen Selvadurai: Yeah. So the way we -- we've thought about -- one of the ways we thought
about foursquare as an idea is that -- and I recently have kind of come across in describing
it using this phrases that we are trying to use the Internet to get people off the Internet.
So what that means is we're trying to build software and we are trying to build great
tools and we are trying to improve upon these, make it faster, make it more efficient, tell
you exactly the right thing at the right time and lead you to the right experience.
And we want to do that so that you take your phone out or your phone buzzes and it tells
you go into this place because three of your friends are here and this is something you
have been wanting to try, it's a restaurant you have been wanting to try, and you put
your phone away and you actually do something in real life.
So that's kind of very core to the nature of the service.
So with that being said, what we want to do -- the way we see the social graph is your
social graph is really people that you would want to hang out, and you want to see in real
life. They are almost like your real-life friends. They are not people that you may
have just had an e-mail conversation with or something.
>>Jonathan Zittrain: Which means that if you are using foursquare you shouldn't engage
in a lot of courtesy friending with people you don't know very well.
>>Naveen Selvadurai: Yeah. >>Jonathan Zittrain: Because then you might
be eating dinner with them. >>Naveen Selvadurai: Or having a cup of tea
or whatever it is. >>Jonathan Zittrain: Yeah.
>>Naveen Selvadurai: A lot of users see it that way. And you find that actively reflected
in social graph where people really respect how to do the friendship, they keep their
graphs very kind of curated and use it to the best extent that they can.
>>Jonathan Zittrain: And is the value -- this is maybe a value behind Yuri's question. The
value in what you can deliver to those users, wow, a chance to eat at a restaurant with
a good friend of a friend -- >>Naveen Selvadurai: Yes.
>>Jonathan Zittrain: -- that I wouldn't have known otherwise was there.
>>Naveen Selvadurai: Yes. >>Jonathan Zittrain: Or is it, say, in the
data that you are able to extract? The way it's such a data rich environment in the self-driving
cars. >>Naveen Selvadurai: It's a little bit of
both. It's a little bit of that real-time value of, oh, my friends are actually here,
or I take out my phone on an early Saturday evening and say what should I do tonight?
Shall I go to dinner with three friends in my neighborhood that are having dinner? Should
I join them? There are friends from out of town. Should I go see them?
So it gives you this kind of real-time passive awareness of what's going on in the world
around you, in your neighborhood and all around the world, who is coming into town, who is
moving around. But the other thing we have now, we have more
than six -- more than half a billion data points, unique data points about check-ins
about where people have been, where people have been checking in all around the world.
A check-in from almost every single country. And what that enables is that we can take
all that data and we can extract a lot more value and meaning from it. And that kind of
completes the circle of the story of foursquare that we have been telling, which is you check
in, you do -- you check in to earn all sorts of rewards, whether they be physical rewards
like discounts and a free drink at the bar or virtual awards like the idea of points
and games that you briefly touched upon. >>Jonathan Zittrain: Yes.
>>Naveen Selvadurai: The points that don't mean anything but people do it because it
encourages -- >>Jonathan Zittrain: In foursquare, you can
earn a mayorship by checking in enough. >>Naveen Selvadurai: Yes.
>>Jonathan Zittrain: Can you tell if people are really competing for that?
>>Naveen Selvadurai: People love the game-like nature of foursquare. Foursquare, at the very
core of it, is a utility that helps you see kind of see this awareness of what's going
on around you, whether that be about your friends or other people or about recommendations
and tips. So in order to drive a little bit more active
uses, in order to drive a little bit more excitement about the product, we built this
idea of -- we built game mechanics over the whole system.
And the idea behind the game is that by giving you a virtual reward of some sort, by putting
you on a leader board and saying you have only gone out ten times in the last week,
but your friends have gone out 20 more times than you have, can we actually get you to
use the service more. So that's really the goal behind game mechanics.
>>Jonathan Zittrain: Do you suppose one could earn some money by just letting people buy
a level up? Could I just buy a mayorship? >>Naveen Selvadurai: At the moment we don't
want to do anything like that. I don't think that's exciting in itself.
>>Jonathan Zittrain: In that sense it's not like the real world.
[ Laughter ] >>Naveen Selvadurai: Right. What we want to
do is use the game-like idea just to encourage usage, just to encourage a little bit more
kind of a -- just to keep you come back to the product in a different way, to engage
with it in a different way. >>Jonathan Zittrain: I remember when a friend,
and I insist it was just a friend, tried to check into a place that she was nowhere near,
and for the first time the system caught her and said you are not really near here so this
isn't going to count toward your mayorship, and she was extremely disappointed.
>>Naveen Selvadurai: As with any game, people try to cheat. We say this all the time. You
even look at games from a long time ago, even before the digital world.
So even in a game like, let's say, football or something like that, people are trying
to cheat. People cheat all the time; right? It doesn't matter what the game is.
So you just have to put in guidelines and rules in place, and as the game improves,
the mechanics and the rules behind it also improves.
>>Jonathan Zittrain: Yuri, you want to say something more?
>>Yuri Milner: No. >>Jonathan Zittrain: It looked like you wanted
to say something. Shall we open it up? There's a hand in the
back here. Wait for a microphone. >>> Can you hear me? I can talk if you can
hear me. >>Jonathan Zittrain: I can hear you very well,
but I think this might be saved for posterity and it's all about the data so we are just
going to pass a microphone back to you. >>> Thank you.
>>Jonathan Zittrain: Feel free to tell us who you are.
>>Vito Lomele: My name is Vito. I am an Italian entrepreneur. And I have a question for Naveen
and Edward, because you are entrepreneurs yourself, and when you start a company, innovation
is really driven by the founders, the idea, you have the heros in the beginning. And then
as the business grows, I think you have been there, we are in this process now, you have
the problem of shifting innovation to your team and to other people. And, you know, you
must create that; otherwise, you are the single innovation point.
So I wanted to have your perspective on where you are in this regard. You know, how much
have you delegated innovation to make it sustainable in the future? Not to be focused only on yourself.
Both of you. Thank you. >>Naveen Selvadurai: Yeah, I think that can
be answered in two parts. The second part is, we don't know. We're still -- two years
ago we were two people, me and Dennis. And a year ago we were about 16 people, 17, and
now we are 60. So we are still very small as a company, the way I think about it. We're
still a baby, as I like to say. And the second thing is that we have been
very lucky in that we have been able to hire a great team. And it all goes back to the
team because the team is what is responsible for carrying your vision and your idea and
kind of get you excited about it. So early on the way we did hiring was we,
in the first round of people that we brought on were just friends and friends of friends.
People that we hung out with. People that shared our vision, that shared our idea, that
were passionate -- were equally passionate about what we wanted to do. They were all
people from New York City, from our circle, from our social circle. So we brought them
on, and they, in turn, went out and got their friends very excited about the idea.
>>Jonathan Zittrain: That's kind of your medium is your message. It's a foursquare method
of hiring. >>Naveen Selvadurai: Yeah. It's a little of
how the foursquare system itself works. A lot of the -- I don't want to say -- like
a lot of the energy and excitement around foursquare is not just driven by us but has
been driven by the users. And that's been very special and we have been really fortunate
about -- to have that and we have really tapped into that.
>>Jonathan Zittrain: And that's, again, thanks to the open API. So users are --
>>Naveen Selvadurai: Not just the open API. I think just the idea of sharing location,
the idea that we can use the Internet or tools like this to get people off the Internet.
The idea of the game mechanics that you see in the system have gotten people excited,
have gotten people talking about this and I think you saw this with Facebook and Twitter
and a lot of other services. And that's lent itself naturally to the culture
and to the way people kind of describe the service and the way it spreads. And that,
in fact, has gone out to, in fact, future employees. So that when they come on board,
they are actually really excited and passionate about the idea.
I think Google probably works the same way. You want to go work at Google because there
are a lot of other really smart guys there that share your vision of what can we do with
all this great data. So we see a lot of the same stuff in foursquare.
>>Edward Wray: I would say similar. Undeniably, it gets harder to keep innovation going as
you get bigger. I think one of the things we have managed to do is to embrace our customers.
Again, any liquidity-based system where the more people there are, the better it is, everyone
has an incentive to try to bring more people in. And we have got lots of people out there
now developing applications that sort of plug into Betfair. So in some cases if we see a
really good application, we are going to try to hire that person who built it. Sometimes
they say "The last thing I want to do is come and work for you. I want to carry on and just
do it independently," and that's fine. We'll sort of let them do that.
But the other thing is I think when you are developing your product cycle, a little and
often is the way to do it, so you have time to put it out there, and you have got time
to get the feedback, and you must make sure you allow yourself time to sort of adjust
and iterate it. And I think that's the big difference today from what it was sort of
10 or 11 years ago for us; that there is just instant feedback from a whole host of different
channels. >>Jonathan Zittrain: And maybe one of the
premises of Vito's question was that innovation is something that maybe can be self-consciously
brought into the enterprise; that you're asking at any moment who is doing the innovation
here, do we have an innovative idea. Can it be that explicit or do you tend to
just expect it to be part of the fabric of what you're doing?
Might there be an opportunity to do a retreat so that you're seeing forest instead of trees
each day, or is it more of a day-to-day thing? >>Edward Wray: Again, I think it's -- that
there are cultures, so it's making sure that if people try something and it seems like
it's a silly idea, you say, "Well, let's try it and see what happens," and --
>>Jonathan Zittrain: Yes. >>Edward Wray: -- you know, every -- we've
all sat there and tried something that's daft and it's proven to be fantastic.
So I think within a large -- as the organization gets larger, I think sitting there and allowing
a sort of ring fence, allowing people to have that starter mentality, of allowing them to
think that they're actually in a team of two, five, 10, 20 people --
>>Jonathan Zittrain: Yes. >>Edward Wray: -- rather than as we are now,
2,000 people, you sort of get back to that sort of -- those roots and, you know, Naveen's
said -- >>Jonathan Zittrain: Yes.
>>Edward Wray: -- he was 20 people a year ago, he's 60 now. That's still really nice
and manageable and you want to try and hold onto that for as long as you can.
>>Naveen Selvadurai: Yeah. So to go -- to add to that, I think a few of the things that
we do is it's not -- it doesn't tend to be top-down, so your culture has to spread. You
know, everyone has to be responsible. Everyone has to kind of carry that message.
So very much like with our users, where every user is empowered to go in and add locations
-- if you don't see something in the middle of your town, you go add it, and if another
user notices that an address is wrong, they go and fix it -- so in a very similar way,
all of our employees have a lot of transparency into what we do. You can join any mailing
list you want to in the company. You can speak up at any point you want to.
>>Jonathan Zittrain: Yes. >>Naveen Selvadurai: When we have team meetings,
anyone is welcome to stand up and shout out an idea.
>>Jonathan Zittrain: Yeah. >>Naveen Selvadurai: So it's kind of inherent.
It's built into who you are -- >>Jonathan Zittrain: Yeah.
>>Naveen Selvadurai: -- and we all welcome that.
>>Jonathan Zittrain: And Chris, Naveen and Edward -- and to some extent Yuri -- have
talked about innovation even available among the users and consumers themselves.
For your project, to what extent do you see this as kind of wholesale kit? Are these self-driving
cars able to be hackable by anybody with the kind of temerity to put a screwdriver to them
or is it supposed to be a sealed box, "Warranty void if seal is broken," kind of thing?
>>Chris Urmson: I think that's a really tricky question to answer. I think that in the automotive
industry right now, there's a lot of concern --
The reason why product cycles are very long in the automotive industry is because of the
depth of regulation in that space. >>Jonathan Zittrain: And the stakes, should
there be an accident. >>Chris Urmson: And the stakes, should there
be an accident. >>Jonathan Zittrain: Right.
>>Chris Urmson: And, you know, we, coming from a software company, are very used to
much higher-frequency innovation and getting that onto the vehicles.
>>Jonathan Zittrain: Failures are more unambiguously celebrated.
>>Chris Urmson: Right. >>Jonathan Zittrain: Right.
>>Chris Urmson: You know, you -- you know, something goes wrong, you fix it, and then
you launch it again. >>Jonathan Zittrain: Right.
>>Chris Urmson: And so it's a really delicate line. You know, how do you bring the rate
of innovation from the software industry into the automotive industry without being cavalier
-- I think somebody used that word earlier -- when it comes to regulation and keeping
the people safe. >>Jonathan Zittrain: Yes.
>>Chris Urmson: What I think -- where I think there will be lots of room for innovation,
you know, eventually down the road when this is commercialized is, you know, the car will
become a really interesting platform, right? So today there's a lot of constraints on what
you can do with it because the person is engaged with the driving task.
As soon as you remove the person from the immediate moment-to-moment engagement --
>>Jonathan Zittrain: They can be watching ads.
>>Chris Urmson: -- they can be -- well, yes. >>Jonathan Zittrain: Or anything.
>>Chris Urmson: But they could be doing whatever they want with their time.
>>Jonathan Zittrain: Yes. >>Chris Urmson: They have the freedom to use
that time however they see fit, and, you know, they'll be safer and they'll enjoy their time
in the car more. >>Jonathan Zittrain: Which actually means
radio is doomed because now they can be doing something more than just listening to radio.
>>Chris Urmson: Self-driving car killed the radio star?
>>Jonathan Zittrain: Self-driving car killed the radio star.
>>Chris Urmson: Yes. >>Jonathan Zittrain: Yes.
One more question? A guy scratching his head. That was a false alarm.
Right here. Feel free to tell us who you are. >>> I'm Alan (saying name), and this question
is for Yuri. I think you've innovated dramatically on the standard Silicon Valley venture capital
market and how those funds are allocated. Can you tell us a little bit more about how
you see the future of VC investing, given your model?
>>Yuri Milner: Well, I can tell you, you know, where we've been coming from, and then, you
know, I'm not sure where it leads, but we basically came from two premises.
One is that a private company is not worse than a public company, because I think there
was maybe a notion that, you know, you just have to be public, no matter what, and then
you're just a better company. And the second was that if you cash out, you
know, founders and employees, it basically destroys incentives, which we think is maybe
the opposite; that it actually encourages risk-taking in addition to what people would
otherwise do if they have 99% of their net worth in one place.
So we think that, you know, those were kind of the major themes that, you know, we think
was important for what we were doing. But, you know, I'm not sure that it's not
something new or something that was necessarily discovered, but we were just sticking with
these ideas for the last two years. >>Jonathan Zittrain: Yes. Well, a fun thing
has emerged from this. It is, again, the reinforcement that it is all about people, and we have had
four great people sharing some of their experiences with us and I hope in the informal times that
will follow as well. Please join me in thanking Chris, Naveen,
Edward, and Yuri. [Applause]