The Exchanges

Q So talk to me about that. That's very interesting. So what do you look for then in those valuable businesses that you believe have potential? What's your kind of sourcing almost like?

A Yeah. So we're, we don't have a BD department. We don't have a corp dev department. I always like to say that we have the The best acquisition track record in the gaming space because we don't need to do deals and we have no one who's paid full time to do deals. We wait, we scour the market, but we wait for inbounds of compellingly priced assets. They're often on the border of distress. Um, sadly, that public and private market disjuncture has been so significant since I've been in the Bay Area. Since, since oh eight, I haven't seen public markets trade ahead of private markets in seven, eight years. I've seen them trade in line occasionally. You know, Glue's stock price has been fairly volatile. We've gone from, you know, two dollars to seven dollars three times since I've been here. Um, and when we're at six and seven dollars, I can afford to pick up private businesses that are, you know, that are, that are really firing all cylinders. When we're, you know, in most of our cycle, we can't pick up a business that is profitable. We have to pick up assets that are effectively turnarounds. Um, and so we have made seven, eight acquisitions Since I've been here of businesses that, you know, have raised huge amounts of venture money in some cases, but have not been able to find success on their own, that need an umbrella business that knows how to drive monetization, has support func…

AI assessment note: “we wait for inbounds of compellingly priced assets. They're often on the border of distress.”

Q And you mentioned that consoles, and, and talking of platforms then, Well, you know, we're obviously seeing more and more platforms emerging every day. What platforms are you specifically excited about and focusing on at Glue?

A Well, we think that mobile is still the place to play. Um, you know, there's only two and a half, 2.6 billion smartphones in the world, but the seven billion people, and we address phones and tablets and Apple TV and even the Mac store. Um, so we, we can, we can get to at least twice as many devices we have today as an addressable market working through our partners. Um, but we are beginning to think about the VR and AR promise that you're hearing, and there's a lot of capital flowing into that, could actually bear fruit in the gaming space. There's a lot of people at Glu actually that worked on VR for, you know, some, some cases a decade or two decades. Um, we, we have, we have people with doctorates at Glu that worked on game engines, uh, since the early days. You know, what I'm impressed by is the price points. You know, Oculus, the Oculus Samsung Gear equipment, if you have the phone already, it's 99 dollars. And I think that, you know, whilst Oculus Rift, you know, whatever it is, 700 dollars, Much more expensive, much better. Over the next two to three Moore's law cycles, you're going to see that Oculus Rift power turning up, I think, in handheld devices that cost nine dollars. And I am much more bullish on the nine dollar mass market approach than I am of the, you know, thousand dollar Kit. I think there will be hardcore PC gamers that take to VR in the next two years, a…

AI assessment note: “Well, we think that mobile is still the place to play.”

Q So what for you makes those great people great?

A Cultural fit, not in the fluffy sense, but in my sense, it really hit the ground running. Hit the ground running, understand where the company is, have exactly the skills that you need and have done it before. I love hiring people who are better than, you know, what we have currently. Head and control is better than we have currently. I've done it before, are confident they know what to do, and you know, that is sort of a wonderfully infectious momentum to have in a business when you've got confident people who are masters of their own domains, can execute well, have done it before, know what to do. We just hired a couple guys like that. Tim Wilson from EA and Nick Earl, also from EA, who are CTO and president of studios, they worked together for 13 years before, and, you know, they, they love telling me, they've been here, you know, just a quarter or two, and they like to tell me that this place reminds them of, you know, EA Mobile when that was just getting going, and we're about sort of same sort of scale, and so they have, they have tremendous trust amongst each other, but also confidence that sort of is wonderfully getting imbued in the rest of the organization that, you know, this is a good to great story in the making, and, you know, you're in the right place at the right time.

AI assessment note: “have exactly the skills that you need and have done it before”

Q And I mean, it's always very difficult to shift in such a massive way. Um, so from Feature Phone to, to where we are today. So, and that's, you know, normally so difficult with a private company. So let alone as a public company. So how is that for you making the transition so publicly and such a, a big decision moving away from it?

A Yeah, it's a real challenge. Um, I, I was confident coming into Glue because I had done a public company turnaround, you know, in the mobile media space with Monster Mob in the UK, and that was similar to Glue. It was sort of 20, thirty million dollar market cap business, you know, originally running out of money in six or nine months. Monster Mob, we took from 20, thirty million dollar market cap to about five million dollar market cap, almost FTSE two 50 by the time we were done with it. Um, and Glue, I thought, had a lot to work with. If you approach it From the perspective as I did for both Moss Rock and Glue, this is a late stage startup. It happens to be public. You've got to re-engineer every function to focus on the future. Like what, what happened in the past and how you made money the year before doesn't matter. What matters is how you're gonna make money in the next year or two and how you're gonna keep, you know, how you're gonna revitalize growth and then fundamentally continually grow. We've carried that philosophy forward for Glue to this day. Um, we, we're all forward looking. We're all professional managers. Um, Um, in the longterm, that actually is a strength for a business. There was no founders at glue. The business was founded in 2001. I am technically the third CEO, although I'm kind of the refounding CEO, if you will. You know, glue's got 850 people today…

AI assessment note: “Yeah, it's a real challenge. Um, I, I was confident coming into Glue”

Q Are you, are you expecting to see a massive increase in your portfolio towards the celebrity gaming sector with, uh, with the vice of Taylor?

A Yeah, of course. I mean, look, across, The whole celebrity game platform, I, it wouldn't surprise me if it's our biggest earner amongst the four genres we've got, but, you know, we have a big shooter game coming out as well in partnership with Tencent. Uh, we're bringing their Wii Fire game from, from China, where it's the, where it was the number one grossing game, and it's made vast amounts of money in just China alone. We're bringing it to the whole Western world, so North and South, you know, America. You know, I think shooter and celebrity are likely to be the two biggest categories for Blue this year. Hard to pre-guess what's bigger in the year, because remember, we report annual calendars, quarterly calendars, and so if we fire a shipping in the first half of the year and Taylor's the end of the year, you're not going to have as many revenue days from a Taylor. So Taylor's really about 20 17 in terms of revenue. Um, and even Nikki, you know, which is later in the year, you know, probably contributes more total dollar revenue in 2017 than this year, but the run rate, you know, is certainly something that we think could be, we, look, we, we certainly hope we'll be exiting this year At a much bigger run rate than we, than we enter the year. I'll put it that way.

AI assessment note: “Yeah, of course. I mean, look, across, The whole celebrity game platform”

Q I'm intrigued that if you were a VC, obviously, uh, metaphorically speaking, how would you react to an impending implosion? Would you pull back? Would you be more bullish? Would you stay the same?

A So I think the, the better VCs have already stopped, right? So they're not chasing prices up. I think the bigger and probably top tier VCs, I think regardless of what the external talking points are, I would bet that their credit committees, For months now, if not in some cases, you know, a quarter or two, I probably looked into 2016, half of the last year going, you know, we should probably pull out, slow down in these areas, pull out of these, these sectors, certainly not chase the stage or chase valuation up. Um, I think this is a good moment for backing your better capitalized portfolio companies to act as a consolidator, encouraging them to, to be on the offensive, so to speak, because I think you're going to get unparalleled deals in the next year or two. And that's true in the private and public markets and the stronger ones, stronger businesses, you know, the stronger the herd will get to consolidate and gobble up, you know, more of the rest. I think if you're, if you're a weaker business or a tougher sector or more poorly capitalized, you should be looking for that merger partner. Now look, look forward to the start of 2016. Don't, don't wait till the end of 20 16 when you can be, you can be running out of runway.

AI assessment note: “we should probably pull out, slow down in these areas, pull out of these”

Q And you mentioned that consoles, and, and talking of platforms then, Well, you know, we're obviously seeing more and more platforms emerging every day. What platforms are you specifically excited about and focusing on at Glue?

A Well, we think that mobile is still the place to play. Um, you know, there's only two and a half, 2.6 billion smartphones in the world, but the seven billion people, and we address phones and tablets and Apple TV and even the Mac store. Um, so we, we can, we can get to at least twice as many devices we have today as an addressable market working through our partners. Um, but we are beginning to think about the VR and AR promise that you're hearing, and there's a lot of capital flowing into that, could actually bear fruit in the gaming space. There's a lot of people at Glu actually that worked on VR for, you know, some, some cases a decade or two decades. Um, we, we have, we have people with doctorates at Glu that worked on game engines, uh, since the early days. You know, what I'm impressed by is the price points. You know, Oculus, the Oculus Samsung Gear equipment, if you have the phone already, it's 99 dollars. And I think that, you know, whilst Oculus Rift, you know, whatever it is, 700 dollars, Much more expensive, much better. Over the next two to three Moore's law cycles, you're going to see that Oculus Rift power turning up, I think, in handheld devices that cost nine dollars. And I am much more bullish on the nine dollar mass market approach than I am of the, you know, thousand dollar Kit. I think there will be hardcore PC gamers that take to VR in the next two years, a…

AI assessment note: “Well, we think that mobile is still the place to play.”

Q And then parting advice for entrepreneurs, what would you give?

A I've given so much already, Harry. You know, you might have, you might have, you know, sort of, uh, stealing my vestiges. You've milked me dry. Any more advice? Um, last time we talked about sticking to something you can be the best in the world at, and I would reiterate that, I think, particularly if you're going into tougher times, figuring out your core business, sticking to that, and executing like crazy is the way to go. Um, I am from a school of thought that, you know, ideas are great, But the world is full. Talk is cheap. The world is full of talk. Um, and I do think that, you know, a seven out of 10 idea you can execute 11 out of 10 is better than, you know, the 10 out of 10 idea that gets the three out of 10 execution. The world's just full of that kind of thing. Um, and I think that the seven out of 10 ideas with nine out of 10 execution tend to get profitable more quickly. They tend to be, you know, grounded, monetization focused. They have a lot better downside protection. And the same is true, by the way, To, you know, the kinds of people that we like to work with the glue, like we like to work with industrious types. You don't have to be Genius. You know, working hard goes a long way. You know, only the paranoid survive, as Andy Grove put it. That's true in every, in every sector. If you're on top of your sector and what's going on and you want to be the best, you…

AI assessment note: “figuring out your core business, sticking to that, and executing like crazy”

Q I'm intrigued that if you were a VC, obviously, uh, metaphorically speaking, how would you react to an impending implosion? Would you pull back? Would you be more bullish? Would you stay the same?

A So I think the, the better VCs have already stopped, right? So they're not chasing prices up. I think the bigger and probably top tier VCs, I think regardless of what the external talking points are, I would bet that their credit committees, For months now, if not in some cases, you know, a quarter or two, I probably looked into 2016, half of the last year going, you know, we should probably pull out, slow down in these areas, pull out of these, these sectors, certainly not chase the stage or chase valuation up. Um, I think this is a good moment for backing your better capitalized portfolio companies to act as a consolidator, encouraging them to, to be on the offensive, so to speak, because I think you're going to get unparalleled deals in the next year or two. And that's true in the private and public markets and the stronger ones, stronger businesses, you know, the stronger the herd will get to consolidate and gobble up, you know, more of the rest. I think if you're, if you're a weaker business or a tougher sector or more poorly capitalized, you should be looking for that merger partner. Now look, look forward to the start of 2016. Don't, don't wait till the end of 20 16 when you can be, you can be running out of runway.

AI assessment note: “we should probably pull out, slow down in these areas”

Q Um, but I'm sure you said there about a land grab, and there's no more competitive in industry, arguably, than the gaming industry. How do you approach the land grab methodology, then, with Glue?

A We take a long-term view. You know, we're, we're, we're already in our 15th year, so we're a multi-cycle business. We've been through at least two recessions, effectively, and, you know, I'm sure we'll, we'll weather the next two. Um, and what we do is we, we look at value relative to what we can do with our own business, our own balance sheet, and how we're trading. So, When we can pick up assets that we can make immediately accretive because of the fact that we have infrastructure that smaller companies don't need to carry anymore. Do GNA. We can do sales and marketing. We can do BI analytics. All sorts of things can be done by glue central services that you don't need to carry as a standalone. Well, as part of glue, you would have to carry the standalone business. So we keep an eye on, on accretive opportunities. We're opportunistic across the cycle. We never get deal heat. So we never chase opportunities and overpay for them. We don't have a corporate development team. Which means we're not trying to do deals. We do them when they make sense and when myself and our CFO and our C-suite thinks that this is so compelling that we should find time after the day job's done. You know, gaming is incredibly competitive. It's not only, uh, not only has a lot of companies, but it's a global market. So unlike a lot of businesses that you hear about, you know, you can build a game as we…

AI assessment note: “We keep an eye on, on accretive opportunities. We're opportunistic across the cycle.”

Q So in terms of protection from this impending, uh, implosion, uh, what, what would you say in terms of runway? I mean, we mentioned runway there, you know, private market CEOs, uh, will have 12 months and think we're absolutely fine. What would you optimally raise for them when going out to raise a new round, if you were a private market CEO?

A I would like to say that, you know, you raise enough money to not need more money. And I think that the way that that should be interpreted if you're a startup CEO is you've got to have enough money raised so that you have a lot of strategic options well in advance of liquidity prices. So there's a lot of business models that require land grab money, but I think it's important that you're able to cut off the land grabbing and be breakeven or better, right? Um, even if it means you're not the number one player in the space, you've got to be able to have that choice for your shareholders and that choice for your employees for that matter, because it's not responsible to throw hundreds of people out on, you know, on the street without a job because you went for, you know, scale at the cost of ever being a real business. Right. And I, and I think that the other advice I would give to anyone who's sort of a entrepreneur is think about monetization sooner, right? In markets that are tougher, if you were raising money, In 2001 isn't two. If you're raising money in oh eight or nine, you know, the firms that focused on proving they have a revenue model that is real usually end up to be great businesses five years down the line because they, they forced the discipline themselves to think about revenue and think about profit. They will break even early on. And they've grown that thinking …

AI assessment note: “you raise enough money to not need more money”

Q And then the hardest element of being a public market CEO?

A Well, the single hardest element is always, um, managing expectations. Um, you know, doing that well is the most important thing. I think for every business leader, uh, I don't think it's just public. I think doing, doing a good job of it, public or private is the same. Um, the, the, the element of fine tuning is what's different. So public companies do a good job, but have to set very fine ranges of guidance every quarter and every year. Um, I think private companies tend to be more cavalier about this. Um, but, You can use this as a talent attraction tool, as I mentioned, and you can also use this as a, a tempo for the business. Um, so in the broad sense of the word, managing expectations is the main challenge of management, right? How do you make the short term link up with the long term? That is, that's what management's about, right? The stuff I want to do today, guns versus butter today, guns versus butter in, you know, a year, as one would say with resource allocation. Um, and that's always tricky because you have to be able to carry, Your investors and your, you know, and your employees and yourself across this chasm of how the short term meets the long term. And what investments do I make today and how do I fine tune those to make sure that I'm always driving a better, fundamentally a better IRR, so to speak, on where we will be in a quarter and a year and two years an…

AI assessment note: “the single hardest element is always, um, managing expectations.”

Q Um, but I'm sure you said there about a land grab, and there's no more competitive in industry, arguably, than the gaming industry. How do you approach the land grab methodology, then, with Glue?

A We take a long-term view. You know, we're, we're, we're already in our 15th year, so we're a multi-cycle business. We've been through at least two recessions, effectively, and, you know, I'm sure we'll, we'll weather the next two. Um, and what we do is we, we look at value relative to what we can do with our own business, our own balance sheet, and how we're trading. So, When we can pick up assets that we can make immediately accretive because of the fact that we have infrastructure that smaller companies don't need to carry anymore. Do GNA. We can do sales and marketing. We can do BI analytics. All sorts of things can be done by glue central services that you don't need to carry as a standalone. Well, as part of glue, you would have to carry the standalone business. So we keep an eye on, on accretive opportunities. We're opportunistic across the cycle. We never get deal heat. So we never chase opportunities and overpay for them. We don't have a corporate development team. Which means we're not trying to do deals. We do them when they make sense and when myself and our CFO and our C-suite thinks that this is so compelling that we should find time after the day job's done. You know, gaming is incredibly competitive. It's not only, uh, not only has a lot of companies, but it's a global market. So unlike a lot of businesses that you hear about, you know, you can build a game as we…

AI assessment note: “When we can pick up assets that we can make immediately accretive”

Q And are you more bullish on AR or VR?

A I think gaming is going to be the killer app. I don't think it's going to be travel. I mean, there's, there's plenty of utility apps for AR. I mean, you know, GE is apparently using it for, you know, allowing engineers and, you know, one plant to diagnose problems 6000 miles away. There's plenty of, you know, sort of enterprise utility stuff, but, but the gaming, gaming experience works well, and I would call that normally VR because It's an immersive experience. You put the headset on, you're gaming, that's what you're doing. It's a pastime, it's an entertainment pastime. I don't think people are going to wear them around all day. You know, we built the first Google Glass game in 2013. It was a game called Spallista. And we thought, you know, Glass was going to come out and we thought it would ship. We thought the price points would come down and, you know, we thought that, you know, 200 dollars is something you might start to fit to your sunglasses. That obviously is not quite happening. Google is allegedly trying to reboot this with Tony, you know, Fidel for sort of a second go around at sort of Glass Two at some point.

AI assessment note: “the gaming experience works well, and I would call that normally VR”

Q And I mean, it's always very difficult to shift in such a massive way. Um, so from Feature Phone to, to where we are today. So, and that's, you know, normally so difficult with a private company. So let alone as a public company. So how is that for you making the transition so publicly and such a, a big decision moving away from it?

A Yeah, it's a real challenge. Um, I, I was confident coming into Glue because I had done a public company turnaround, you know, in the mobile media space with Monster Mob in the UK, and that was similar to Glue. It was sort of 20, thirty million dollar market cap business, you know, originally running out of money in six or nine months. Monster Mob, we took from 20, thirty million dollar market cap to about five million dollar market cap, almost FTSE two 50 by the time we were done with it. Um, and Glue, I thought, had a lot to work with. If you approach it From the perspective as I did for both Moss Rock and Glue, this is a late stage startup. It happens to be public. You've got to re-engineer every function to focus on the future. Like what, what happened in the past and how you made money the year before doesn't matter. What matters is how you're gonna make money in the next year or two and how you're gonna keep, you know, how you're gonna revitalize growth and then fundamentally continually grow. We've carried that philosophy forward for Glue to this day. Um, we, we're all forward looking. We're all professional managers. Um, Um, in the longterm, that actually is a strength for a business. There was no founders at glue. The business was founded in 2001. I am technically the third CEO, although I'm kind of the refounding CEO, if you will. You know, glue's got 850 people today…

AI assessment note: “Yeah, it's a real challenge. Um, I, I was confident coming into Glue”

Q And you said about over enthusiasm in the private markets. Uh, can you elaborate a little more on that and how you've seen that play out? You've been in the Bay area now for, for a while. So how have you seen that come into fruition? Has it always been here?

A Yeah. I mean, I have a, Board member at Glue who always likes to joke with me, you know, Nicola, when, when do you think it'll be that small new upstart businesses will not be viewed and valued in Silicon Valley as worth much more than the existing incumbents? Um, that's been going for years here. I mean, ever since the, you know, the original Silicon Valley was semiconductor driven, sixties, seventies, and that was where the innovation was. It was down in Sunnyvale. Today, you know, the center of center of gravity has moved Really just sort of Palo Alto and San Francisco, but increasingly San Francisco, and we've got a mayor, Ed Lee, who's done a good job of tax credit to moving tech companies up here. It's, it's where the bay is designed for commuters. So we can get commuters to San Francisco with an office here from the East Bay, the North Bay, the South Bay. You can't pick up all four areas and San Francisco if you, if you're located in Sunnyvale. So I think the optimism and sort of spirit of adventure has moved. San Francisco where we're based. And I've been here since oh eight, so I'm sort of in my seventh, eighth year of, of watching this through now, you know, arguably we might be into another, another cycle since the sort of great recession. You know, you can sort of sit here and go, well, 92 was a downturn, 2000, 2008, maybe 2016 will not be a great moment either. 209…

AI assessment note: “I do think they've gotten Well ahead of themselves compared to where the public markets”

Q So what's the catalyst for that realization that actually their business models aren't sustainable? Is it a macro public markets realization?

A I'll be, I'll be honest, Harry, the part that always makes me sort of laugh is like, I'm never surprised when this happens, because as I've always said to most tech, you know, CEOs at IPA, like, okay, you've gone out at five times revenue. If you were a betting man, do you think it's more likely that it's going to double from here or get cut in half, right? And then the reality is, if you trade at five times revenue, right, inevitably there's going to be a year that When you don't grow at a 50% kegger, which is what it takes. I mean, like, it's just so perfectly priced. Businesses can grow at 2030, 40, 5000% kegger. I mean, glue can grow. Glue has grown a hundred percent in some years, but I would never, I would never sit here as a responsible long-term CEO and say, I will grow at a hundred percent a year perpetually, you know, like, you know, like for the next 1020 years, I mean, like, it's just, it's just not likely, right? So people make their own long-term You know, estimates of growth and when it, you know, tapers off and what the capitalization rate for the perpetual and terminal value should be, but they inevitably price it more perfectly than will happen in the real world. Business is tough. Stuff happens. Macro stuff happens. Other people try and come and take your lunch. Consumers change, you know, their sentiment for a product. All of these companies are good busines…

AI assessment note: “inevitably price it more perfectly than will happen in the real world”

Q So is that why you made the decision to make the first game on Google Glass? Because you thought it would be a lower price point?

A Well, we thought eventually it would come down with Moore's Law and it would be something that could be mass market. I don't think the first version Was there, and we'll see the session. The reason I'm splitting hairs on VR and AR is there's companies like Magic Leap that have, you know, of course, tremendous demos out on, you know, YouTube and so on, and Google's put five hundred million dollars in that, and they probably raised more, and they're trying to be an end-to-end stack AR solution, but it's still a headset, and I don't think there's going to be that big of a difference between using your camera phone as your eyes and having an AR experience through your phone Um, as opposed to having goggles that really are overlaying An augmented reality in front of your glasses or goggles. So, for example, if you use your Samsung Galaxy Gear Oculus headset, you can actually turn on the camera and use the camera as effectively your goggles and look around the room the same way you could. I mean, it's a much cheaper, dumbed-down experience, I'm sure, than Magic Leap, but I think they're going to converge, is my point, and I think the most exciting intersection is going to be two or three more loss cycles away when VR and AR using your phone as the primary device Will be an option for the mass market. It won't be a million of these or even ten million sold. It'll be a hundred million …

AI assessment note: “we thought eventually it would come down with Moore's Law and it would be something”

Q So what's the catalyst for that realization that actually their business models aren't sustainable? Is it a macro public markets realization?

A I'll be, I'll be honest, Harry, the part that always makes me sort of laugh is like, I'm never surprised when this happens, because as I've always said to most tech, you know, CEOs at IPA, like, okay, you've gone out at five times revenue. If you were a betting man, do you think it's more likely that it's going to double from here or get cut in half, right? And then the reality is, if you trade at five times revenue, right, inevitably there's going to be a year that When you don't grow at a 50% kegger, which is what it takes. I mean, like, it's just so perfectly priced. Businesses can grow at 2030, 40, 5000% kegger. I mean, glue can grow. Glue has grown a hundred percent in some years, but I would never, I would never sit here as a responsible long-term CEO and say, I will grow at a hundred percent a year perpetually, you know, like, you know, like for the next 1020 years, I mean, like, it's just, it's just not likely, right? So people make their own long-term You know, estimates of growth and when it, you know, tapers off and what the capitalization rate for the perpetual and terminal value should be, but they inevitably price it more perfectly than will happen in the real world. Business is tough. Stuff happens. Macro stuff happens. Other people try and come and take your lunch. Consumers change, you know, their sentiment for a product. All of these companies are good busines…

AI assessment note: “Macro stuff happens. Other people try and come and take your lunch.”

Q And then the best piece of advice ever given to you?

A Well, given, given to me or my own advice? Can I, can I, can I, can I have my own advice? My own advice on this one is what I'd roll with. Um, uh, and it was something, uh, that, that I think I was, I was saying to you earlier, Harry, which is, you know, Sticking, sticking to something that you can be the best in the world at. Usually leads to more value being accreted for yourself as well as your business. It's better to be number one at something that, uh, you know, is a smaller market than it is to sort of be number 10 in a bigger market. Um, and invariably you find, you know, we, we do a lot of strategic exploration at Glue. I do a lot of strategic exploration, you know, in, for Glue, but also in my, in my own career the last, you know, 1015 years. And I inevitably find that you build up networks of not only information, but expertise, people, Um, and knowledge, which you usually find even after you've explored other things you could be doing that you're sticking to your core and trying to drive a little bit further up that curve of am I in third place, second place, first place, usually pays bigger dividends than deviating. Um, and so glue, uh, and my, and my own career, you know, I've been in mobile entertainment for 12 years. I will probably be in mobile entertainment the rest of my life because I think it's a trend that is only going to accelerate. You know, computing p…

AI assessment note: “Can I have my own advice? My own advice on this one is what I'd roll with.”

Q And how much of a role do the celebrities play in the promotion of it itself?

A Yeah, I mean, we love, so our celebrity selection process, it's got kind of three or four layers of the filter. The first one is, do you have a big audience? Do you have a hundred million social followers? That's what we typically look for. If you're female, if you're male, we can lower the bar, because men are not very good at this, actually. It's one of the things I've discovered. Women are social media mavens compared to men. There are very few men that break fifty million, let alone a hundred million followers, and you look at the top 20, 30 most popular people in the world, It's like three-quarters female, especially the over a hundred million. I mean, it's Katy Perry, it's Taylor Swift, right?

AI assessment note: “our celebrity selection process, it's got kind of three or four layers”

Q So is that the only reason that people would say no to essentially just the workload? Because in terms of financial gain, obviously it's, uh, undisclosed, but, but there is significant gains to be made. No, no, no.

A You can, you can, you can find your way into, you know, seven and then, you know, and even eight figure You know, earnings over the life of one of these. And so it can be a very significant piece of someone's income if you think about sort of the time, sort of, you know, outcome, income outcome ratio. I don't think they know that. I mean, Glute is the premier monetizer of social following today, I would argue. I always like to joke, like, how much does Facebook or Twitter, you know, pay to these people? Nothing. Like, they're building enterprise value for Facebook, you know, Twitter, et cetera. We're monetizing that for them. And so in the long term, interesting question for us all to ponder is whether or not More celebrities will try and take more of their lives sort of off deck and out of studios. You know, if you can do things in an app and be more B to C, you may not need, you know, Maria Bartiromo may be able to have her own financial show. Who needs NBC or Fox or whatever she's on now. I can't remember. And that is something which I think is a continuing trend that we're very much tapping into the personalization of media.

AI assessment note: “I don't think they know that. I mean, Glute is the premier monetizer”

Q And are you more bullish on AR or VR?

A I think gaming is going to be the killer app. I don't think it's going to be travel. I mean, there's, there's plenty of utility apps for AR. I mean, you know, GE is apparently using it for, you know, allowing engineers and, you know, one plant to diagnose problems 6000 miles away. There's plenty of, you know, sort of enterprise utility stuff, but, but the gaming, gaming experience works well, and I would call that normally VR because It's an immersive experience. You put the headset on, you're gaming, that's what you're doing. It's a pastime, it's an entertainment pastime. I don't think people are going to wear them around all day. You know, we built the first Google Glass game in 2013. It was a game called Spallista. And we thought, you know, Glass was going to come out and we thought it would ship. We thought the price points would come down and, you know, we thought that, you know, 200 dollars is something you might start to fit to your sunglasses. That obviously is not quite happening. Google is allegedly trying to reboot this with Tony, you know, Fidel for sort of a second go around at sort of Glass Two at some point.

AI assessment note: “gaming experience works well, and I would call that normally VR”

Q So is that why you made the decision to make the first game on Google Glass? Because you thought it would be a lower price point?

A Well, we thought eventually it would come down with Moore's Law and it would be something that could be mass market. I don't think the first version Was there, and we'll see the session. The reason I'm splitting hairs on VR and AR is there's companies like Magic Leap that have, you know, of course, tremendous demos out on, you know, YouTube and so on, and Google's put five hundred million dollars in that, and they probably raised more, and they're trying to be an end-to-end stack AR solution, but it's still a headset, and I don't think there's going to be that big of a difference between using your camera phone as your eyes and having an AR experience through your phone Um, as opposed to having goggles that really are overlaying An augmented reality in front of your glasses or goggles. So, for example, if you use your Samsung Galaxy Gear Oculus headset, you can actually turn on the camera and use the camera as effectively your goggles and look around the room the same way you could. I mean, it's a much cheaper, dumbed-down experience, I'm sure, than Magic Leap, but I think they're going to converge, is my point, and I think the most exciting intersection is going to be two or three more loss cycles away when VR and AR using your phone as the primary device Will be an option for the mass market. It won't be a million of these or even ten million sold. It'll be a hundred million …

AI assessment note: “Well, we thought eventually it would come down with Moore's Law”

Q And how much of a role do the celebrities play in the promotion of it itself?

A Yeah, I mean, we love, so our celebrity selection process, it's got kind of three or four layers of the filter. The first one is, do you have a big audience? Do you have a hundred million social followers? That's what we typically look for. If you're female, if you're male, we can lower the bar, because men are not very good at this, actually. It's one of the things I've discovered. Women are social media mavens compared to men. There are very few men that break fifty million, let alone a hundred million followers, and you look at the top 20, 30 most popular people in the world, It's like three-quarters female, especially the over a hundred million. I mean, it's Katy Perry, it's Taylor Swift, right?

AI assessment note: “our celebrity selection process, it's got kind of three or four layers”

Q So is that your turnaround strategy then to plug them into your existing, very experienced and successful departments and turn them around?

A Yeah, it certainly has been the case the last five or six years. Um, You know, we don't want to duplicate infrastructure costs. You know, we have centralized business intelligence analytics. We have centralized sales and marketing, centralized GNA. You don't need to have your own CFO. We have one. We have our own legal function. We have facility space. Playfirst is in our San Francisco office right outside the store. They used to have to rent their own office space. So considerable savings to be had from scale. And really, you know, the funny thing about sort of booms and busts and bubbles is if you, if you study these, You know, bubbles are great for consumers. They drive a lot of choice. They drive a lot of infrastructure. You know, the dot-com boom drove a lot of fast, you know, internet connections, and it also drove the railroads, right, um, you know, earlier, um, and, you know, there have been some silly bubbles, tulip manias, and that kind of thing over the years, but a lot of them have driven infrastructure investments, and the same has really happened, I think, in game. The same is happening across The sharing economy. Right now, you can live in San Francisco, and the old joke is, like, we are basically a retirement community for young people here. You can sit at home and order anything. I mean, you'd be amazed. Um, you know, you can get, startups can get office space …

AI assessment note: “Yeah, it certainly has been the case the last five or six years.”

Q Have we thought of a Justin Bieber game?

A Yeah, I mean, let me finish the selection. I'll come back to that. So big social following. That's the case of what's the engagement and trajectory of that. Is it growing? Growing social following, and are they getting a lot of likes and retweets? Then it comes down to what's the game mechanic? What is the game mechanic that's going to fit the aspiration of this fan base? If you can't figure that out, you're not going to have a great game. So, you know, examples I'd like to give here are, you know, Cristiano Ronaldo, Lionel Messi, David Beckham, they have big social followings for men. Certainly a hundred million in some cases. If, if you're going to, if you're going to build a game for them, it's got to be a kinetic action game. Nobody wants, you know, a fashion game. No one's a lifestyle. Not really. Most of the people following, you know, honestly want to see the ball in the back of the net, not what cologne's he wearing. You know, like, cause you have the right, you know, hair gel for the day. Right.

AI assessment note: “let me finish the selection. I'll come back to that.”

Q So where do they get this confidence from, do you think?

A Uh, I think it's a, you know, risk takers, not just VCs, but also, you know, the entrepreneurs that are doing the risk takers. It's a shell game as well, right, in the sense that there are always stories of private businesses that are convincing buyers that they have a hundred options and a hundred, you know, funders up until the last moment. You know, every year there's a number of businesses that are sold that really, Are hitting the wall, and they convince, you know, some stalking horse that they're, you know, who bids against themselves, that they're sort of, this is the one business they have to have. I mean, it happens with public companies too, but you don't have the ability to have as big a disjuncture between the value Today in the value, you know, in three months time. That all gets priced in. So, you know, and it tends to be, it tends to get priced in the downside much more on the upside. I would, I would say that you would be hard pressed, other than the .com boom, in the last 80 years, hundred years of the stock markets. I think you'd be hard pressed in the last hundred years. Other than that couple of years to find moments when public markets on average traded well ahead. There's been this sort of sort of phenomenon of smaller scale allows things to get sold at higher prices because bigger companies pretend they're going to synergize. And utilize this, you know, t…

AI assessment note: “It's a shell game as well, right, in the sense that there are always stories”

Q So where do they get this confidence from, do you think?

A Uh, I think it's a, you know, risk takers, not just VCs, but also, you know, the entrepreneurs that are doing the risk takers. It's a shell game as well, right, in the sense that there are always stories of private businesses that are convincing buyers that they have a hundred options and a hundred, you know, funders up until the last moment. You know, every year there's a number of businesses that are sold that really, Are hitting the wall, and they convince, you know, some stalking horse that they're, you know, who bids against themselves, that they're sort of, this is the one business they have to have. I mean, it happens with public companies too, but you don't have the ability to have as big a disjuncture between the value Today in the value, you know, in three months time. That all gets priced in. So, you know, and it tends to be, it tends to get priced in the downside much more on the upside. I would, I would say that you would be hard pressed, other than the .com boom, in the last 80 years, hundred years of the stock markets. I think you'd be hard pressed in the last hundred years. Other than that couple of years to find moments when public markets on average traded well ahead. There's been this sort of sort of phenomenon of smaller scale allows things to get sold at higher prices because bigger companies pretend they're going to synergize. And utilize this, you know, t…

AI assessment note: “It's a shell game as well... private businesses that are convincing buyers”

Q So is that your turnaround strategy then to plug them into your existing, very experienced and successful departments and turn them around?

A Yeah, it certainly has been the case the last five or six years. Um, You know, we don't want to duplicate infrastructure costs. You know, we have centralized business intelligence analytics. We have centralized sales and marketing, centralized GNA. You don't need to have your own CFO. We have one. We have our own legal function. We have facility space. Playfirst is in our San Francisco office right outside the store. They used to have to rent their own office space. So considerable savings to be had from scale. And really, you know, the funny thing about sort of booms and busts and bubbles is if you, if you study these, You know, bubbles are great for consumers. They drive a lot of choice. They drive a lot of infrastructure. You know, the dot-com boom drove a lot of fast, you know, internet connections, and it also drove the railroads, right, um, you know, earlier, um, and, you know, there have been some silly bubbles, tulip manias, and that kind of thing over the years, but a lot of them have driven infrastructure investments, and the same has really happened, I think, in game. The same is happening across The sharing economy. Right now, you can live in San Francisco, and the old joke is, like, we are basically a retirement community for young people here. You can sit at home and order anything. I mean, you'd be amazed. Um, you know, you can get, startups can get office space …

AI assessment note: “Yeah, it certainly has been the case the last five or six years.”