David Rosenthal: observation

Transcript context

…That's a brilliant technological innovation that enables this. It's amazing to me that it both requires the breakthrough technology innovation which is still how maps work today. There's a lot more vector stuff than just this static tiles world. That's what enabled this mapping revolution. The vision innovation that he really nailed was if you made the map big, pretty, zoomable, and searchable, it itself could be a platform for other services. The map itself could be a platform. It could be the motive of interaction. Lars was like, "Yeah, okay. This is cool. Let's start a company around this and let's do this." He's moved to Australia. He convinces Jens to move to Australia and he recruits two other engineers who are friends of theirs, Noel Gordon and Stephen Ma. The four of them start working on this out of Noel's spare bedroom in Sydney, Australia. They decided that they'll name the company, Ben as you said, Where 2 Technologies. They started talking about how they're going to do this. The web isn't even on their mind. Clearly, the only way that you could build an application with this performance, this dynamic, would be with Desktop software. This would be the Encarta Encyclopedia. You're going to install this on your desktop computer. It will be super cool. You can find what you want. Maybe you can still print out the directions eventually. How else could you do this? They start working on it. They realized, "Hey, this is kind of cool." They might be onto something. They should search for funding—VC funding—for this. Lars and Jens fly back to California. They meet with the former Cisco consecutive they've known who is a prolific angel investor. His name is Frank Marshall. Frank says, "Okay. This is cool. I'll introduce you to my network to a bunch of VCs including Sequoia Capital." They get introduced to Sequoia. Sequoia gets pretty excited about this. Sequoia have been investors in Google. They're investors in Yahoo. They're investors in lots of great companies over the years as we've seen many times in this show. The start talking terms. It was unclear if this was a verbal offer or they actually gave a term sheet to the company to invest $2 million for 40% of the company. It was a different time back then. First of all, it'll be $5 million postmoney valuation selling 40% of the company for $2 million. Time's have definitely changed in the seed market since then. The brothers are excited about this. They're like, "Man, great! It's great capital. Premiere marketing venture out there, they're willing to fund us here in Sydney, Australia. This is great." They're excited to do it. Before they actually sign the deal, though, Yahoo! releases what the Google folks know what they're about to do is a big update to Yahoo! Maps. They add local yellow pages listing. It's clear like, "Oh, okay. This is going to be the business model here. We're going to have local businesses on these maps. We’re going to sell advertising around that. People are going to be able to find them." This is a gamechanger in the industry. Sequoia sees this and they pull out of the deal. They say, "Yahoo! is going to be the winner here. We're not as excited about funding this startup company and try to compete with these giants [...]." Sequoia gets a lot of things right but not this one.…

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