YouSaid · the spoken record

Bill Janeway

lines on the record: 124
first: 2016-01-04
most recent: 2016-01-04
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Though it really was a startup. But we had tremendous confidence in Bob Pepper. We helped bring up a board of really strong people. Some years later, Intel wound up acquiring the company for more than a billion dollars.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's When I got to Warburg-Pinkas, we'd made a small investment with some other investors. And the first go round, the first customer had been acquired by IBM and basically closed down. So we had a choice. We could either restart or just give up But the leadership of the company was an outstanding scientist named Bob Pepper who had worked very closely at RCA Sarnoff Labs with my new partner, Henry Crissell, who was himself a great applied physicist and also a great investor. So we took a deep breath and we said, we're going to restart level one behind Bob Pepper, make a second effort, and focus on making it possible for the plain old-fashioned copper wires to carry data at a high enough rate so that you can actually interact with a computer, not just, you know, push a button.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Level one, I'm thinking, not level one. Level one was not unrelated. It was silicon optimized for communications, and particularly for digital communications, for DSL.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we always invest out of one fund. It's one fund. We invest across it. And that means that when markets change, as they did in 1998, 99, 2000, we could be realizing the investments in technology while putting new money into energy at $12 a barrel. So we could move against markets within one fund. We've always invested from one big fund. Actually, the first real technology investment that we led, there were several. The first really early stage, it's a company called Level 1.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very broad. Warburg Pinkers has always had a very broad expanse investing contrarian to what the stock market thinks is the great thing to do.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“What was the It was for the same breadth of investing. Investing in emerging growth companies, investing in turnarounds, investing very occasionally in buyouts.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, Lionel Pinkus and John Bogelstein were great entrepreneurs. They were pioneers of private equity broadly defined from venture capital through growth equity investing. In 1986, they had raised the first billion-dollar fund that anybody had ever raised. Warburg Pinkers was always large relative to the industry And given that, As Warburg Pinkas, as a lead strategic investor rather than following other people”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“We'll play with that. But it gave you a view of what was going on in technology. And there were some really smart people. But the center of gravity of the firm was not doing these relatively earlier stage risky technology investments.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“No, that's not quite fair because, for example, Warburg Pinkers was one of the founding investors in Gartner Group. Gideon Gardner, another one of those great sell side investment research analysts who got the message and created one of the great advisory firms.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we sold the firm in 1985 to a great British investment management firm called Robert Fleming. Our firm was called F Aberstad. We sold it to Robert Fleming in 85. I served out my contract as part of the deal. And in 1988, I had the great opportunity to join Warburg-Pinkas and to help build this technology investing at Warburg Pinkas.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Commission start to decline. Fundamental research by the mid-1980s. You can see two paths forward. One, it becomes a commodity because you can't afford to pay the smart guys. They're going to the buy side. There are people like Ben Rosen, who is a great computer analyst at Morgan Stanley, creates Seven Rosen, the Venture Capital Firm. So there was a migration of the real talent. So either it becomes a commodity or you need another subsidy. If the subsidies investment banking, it's not a commodity, it's prostitution.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“You out there for? Well, I spent probably a week to 10 days a month for 35 years. I had 3 million miles on American by about 1990. And I should first say that the world of Wall Street was changing through all this. 1975. Brokerage commissions go away.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But that was how I made the transition. And became immersed in learning the technologies, learning enough about the technologies to be able to talk to entrepreneurs in their own language and to see the world in the course of the 80s, to see these highly special technical styles of computing that were used by engineers and by academics begin to grow in scale and reliability. And that led to this sense by 1990 that these technologies could spill out of the laboratory and come into the big markets for commercial computing. That's how we got to be BEA.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“1979 I spent as many nights after dinner hanging out there, watching the future unfold, seeing things like mice for controlling a computer.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Who were building simulation models of the economy, not purely statistical models, but what are now called agent-based models where you could watch an artificial economy evolve, and I got it. It just hit me like a ton of bricks that computers were not just flexible typewriters or quick adding machines that they were engines for exploring systems that were too complicated to model in simple mathematics. And I fell in love with computing. I then discovered by way of getting involved and understanding the first wave of artificial intelligence, I found my way out to Xerox Park in Palo Alto, California.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I did not have a technical background, but pretty good reader. And I learned actually as an economist about this new computing stuff. In nineteen seventy three, we had the first oil crisis. The economy went into free fall simultaneously. Inflation went up, unemployment went up. That wasn't supposed to happen. The models, the first econometric models all broke down. And I went and searched for people who were trying to make sense of this. I found some guys at MIT.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hasn't always existed. Did not always exist. And it grew up with the rise of institutional investors who would pay for research by directing brokerage commissions to the firms that provided smart guidance. So the firm I joined was one of those research firms which had a very distinctive style. It focused only on the science-based industries.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or brains. Donaldson Luffin and Jenrett. The LJ had created the idea of the research-based brokerage firm during fundamental research.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it happened by way of a very unusual firm. Now, this is back in the old days of Wall Street, when there were hundreds of private investment partnerships in Wall Street. They were all subsidized by being members of the New York Stock Exchange. Back then, brokerage commissions were fixed. monopoly profits were available. So, you couldn't compete on price, but you competed for business. There were usually three ways to compete. First of all, we all went to school together. We all went to St. Grottles together. Second, the three B's booze babes and baseball tickets.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I had a real heart to heart talk with myself Having been immersed in canes and uncertainty and ignorance and coordination failure, was I really going to be capable of teaching these naive and innocent young minds that we all know how to allocate resources efficiently, that the problem of economics is just about efficient allocation, that we can assume that all resources will always be fully employed And I said, I can't do that. I said to myself, I can't do that.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, in 1970, 1969, 70, there were jobs available, the best economics departments everywhere, because, frankly, because of the federal government, because of the response to Sputnik, the federal investment in higher education, huge increase in graduate schools.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“At least it did some. It did more than Congress wanted to do. It could have done more as the president's advisors begged him to. But in any case, before we get there, before we get to the policy message, there's another aspect. There's another aspect of this. Why I left academic economics. Because the third piece. Is economics by 1970 had fundamentally come to be about how do we allocate resources efficiently? How do we eliminate waste in the system? Now you need two assumptions for that to be the case. First, all resources have to be already fully employed. So it's a question of moving to the most productive application of labor, capital, natural resources. And second, coming back to where we began this whole discussion, you have to know what the return on that next investment is going to be in advance.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I want to save more money I want to save more money. And by the way, you're worried about the future too. And you save more money. And all of a sudden everybody's saving more money. Paradox of thrift, coordination failure, each person individually does what's rational and the result is a systematic mess.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The core message of Keynes in the general theory and his other writings, which was, first of all, Decision making under uncertainty. Nobody knows the future, and everybody knows that nobody knows the future.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I'll tell you what happened. I studied, as I mentioned briefly, I studied under Keynes's direct students I'm what they call they have post-Keynesians and neocnesians and new Keynesians. I'm a Paleo-Keynesian. I'm an old Keynesian. I took to heart.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Again and again for the last 200 years has been responsible for moving us from the Malthusian economy of misery through the railroad age, the electricity age, the automobile age, and now the internet age.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Bingo, but the second dimension is what's the object of speculation? Is it tulip bulbs? Is it those beach houses in the Nevada desert? Or is it some kind of technology that if it's deployed at scale and if enough exploration, enough trial and error takes place, it really can change the world. It can create a new economy. So that's why the lecture I give today mostly is called productive bubbles, separating out that small number of this phenomenon, of this crazy, irrational speculation which”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we were talking about bubbles. We talked about Minsky in the banking system bubbles. The stock market bubbles, and this is something that I think is really important. Bubbles are ubiquitous. Bubbles happen everywhere. And you can think about them in two dimensions. One is where is it taking place? It's at the banking system, highly leveraged. When it blows up, it blows up the economy. Or the stock market, very little leverage. When it blows up, the world doesn't come to an end.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“My wife, we met as partners in the firm where we both work before I joined Warburg Pinka. She was an investment professional, and her boss had a great saying because somebody would come to him and say, you know, I knew we should have recommended that stock. I knew we should have. And he said, you know what? Put it on the retrospect fund. That's the one where nobody ever loses any money.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“An Amazon outlet near you, and they can also find me. I've written for Forbes. I write for Project Syndicate. And I'm pretty visible on Google. And thanks, good part, to Bloomberg Television, Tom Keen, and Surveillance. And now with Barry Rithold.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, government isn't good at picking winners, but it's good at enabling competitive entrepreneurs to become winners. Funding science. And also, and this we can come back to, it's not just providing research funding, it's being a customer, an early, supportive customer for stuff that is not yet ready for commercial prime time.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a lot to that, Barry. There's a lot to that. There's another aspect of it too, however, and that is that it takes time to explore wastefully What this stuff is good for you. Remember, we started out talking about decisions under uncertainty, why we need a mission-driven government to subsidize the railroads and initially create the internet and why we need speculators. It's because we don't know what's going to work and what isn't. We've got to try and try. I like to say the innovation economy proceeds by trial and error and error and error. It's learning by doing. There's no roadmap that is given from on high that tells us how to get there at the frontier. It's a lot easier for somebody who's playing catch-up. But we're not playing catch up.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And in fact, again, taking a long historical look back, it took 50 years from the invention of the microprocessor to get where we are today. Well, going back to that railroad age, it took 50 years from the Baltimore and Ohio Railroad to get to Sears Roebuck. Going back to the age of electricity, it took 50 years from Edison turning on the Pearl River, the Pearl Street power plant in New York, the first generating station, to where you can have a mixed master and a refrigerator in every middle class home in America. And oh, by the way, you could have manufacturing factories where you could just move the machines around and reconfigure the process and create tremendous increase in productivity.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, and it has all sorts of impact. You know, it changes what kinds of jobs are available. It changes what time in terms of employment. A lot of people think that in this world you can't rely on your employer for health care. We really need to extend even more the social safety net so people can afford to play in the gig economy, whether as an Uber driver or whether making deliveries or whether writing software for a startup, writing code for open source. So it has a lot of social impact, but you're absolutely right. You're dead right. Innovation isn't over. It's on a roll.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But we're playing off is the maturation of the digital internet infrastructure spilling over into the open source software, the cloud computing. It is a golden age for innovating and developing new digital services. Obviously, we all talk about Uber and Airbnb, but there are 20 more a week. Now.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was talking to an old friend of mine, an old timer who goes back then and is doing a new startup and he's building some software for investment banks, how to pull together all the data they need for all those spreadsheets. And I said, so Chris, when you get this to where you can actually start shipping it to a customer, how much will it have cost you? He thought for a moment he said, you know. $60,000, $70,000.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“There certainly is a lot of money sloshing around, but you then have to think about the technology, the environment for innovation. And that's changed too. So back in the 80s and 90s, if you wanted to build a new IT company, talk about biotechnology separately. If you want to talk about a new IT company, to get to the first dollar of revenue, you have to be thinking $10 to $20 million of complete risk capital.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Then the returns, and since 2000, venture capital returns have been just for the average. Been just about what you'd get from investing in the NASDAQ index. You'd also have complete liquidity. So, this is a stress. This is a strain, and a lot of people are concerned about this.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's where we're going to come to a very interesting change in the last 15 years. It used to be that we could take in the 80s and 90s, we could kind of take access to the IPO market for granted. Each year, and this is frankly, this is my own research when I went back to Cambridge and became a financial economist again after 35 years as a venture capitalist. The correlation is really tight with the state-of-the-art. In a hot IPO market, venture capitalists look like geniuses. When the market cools down,”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, benchmark and sequoia, these firms have been successful over decades. So third, however, for the industry as a whole, for the median firm, the returns are very closely correlated with the public market.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, second, and this has been confirmed right through 2010, unlike most public market investors, there is persistence in the return. So it's not just a few funds, it's a few firms. So performance of firm one helps predict performance of fund two, fund three, and that's why you have these iconic names.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But American research and development, Greylock, Venrock, J.H. Whitney, Warburring Pinkers was a founder of the National Venture Capital Association. There were barely 25 firms. In the country that were founders of the NVCA? But one of the venture capital has been studied intensely. Through empirical analysis. And there are a few stylized facts. That emerge over these 35 years since 1980. The first is there is tremendous skew in the returns of venture capitalists.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think we want to frame this in thinking about venture capital as an industry. So to begin with, this is not a very old industry. It's about 1980 when it went from being a craft practice by people. We could get them all in this room, I promise you.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“We knew it was a bubble. We knew it wasn't going to last. We knew we'd built a real company, but it was time to realize the value that we'd created.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And what we were the sole funders. Sole funders through this line of equity. So we began distributing our shares to our limited partners. The shares were fully tradable, completely liquid. And the stock kept rising as we were distributing the shares. And so that's where that $6.5 billion of realized value came from. Distributing shares into a rising market. And, you know, we talked about Himensky. My senior partner, John Vogelstein, who was the chief investment officer at Warwick Pinkers, was a great student of markets. And way back at Cambridge had written my PhD thesis on 1929. To 1931 in Britain. So I'd seen, if you like, I'd seen the movie before. I'd seen the stock market bubble of 1929 when RCA, if you took the stock price chart of RCA from 26 to 29, it looked like BEA from 96 to 99.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But by 1998, that valuation was up to a billion, which was a very good thing. Because Dubai web logic, it took $150 million of shares of stock. If we hadn't had the public market valuation. Couldn't have done”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Web logic was already a hot company, even though it was just beginning to ship stuff, just beginning. The valuation happened it before, it'll happen again. This is what a bubble starts to smell like. Right. The valuation for the startup started rising and rising. But so did the stock of BEA. Because we've been able to go public.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But tuxedo wasn't designed for the internet. And this was the genius of Bill and Ed and Alfred. And Bill and Alfred, the technology guys, really came together. They did a search for technology that was internet native. And they found a little startup called WebLogic.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“We had already bought a couple of consulting businesses. By this time, we had committed, because we knew we were going to be buying stuff from scratch. This was the innovation We created what we call the line of equity, not a line of credit, a line of equity. So we priced out $50 million up front. And so when the guys went into Novell needing to do a deal, they didn't have to say, hey, Bob, don't do a thing. We'll be back in six months when we raise another round of. We were there with them. We could do the deal in real time. That meant that in a year, BEA was running at $100 million revenue base. Go public. Just in 1996-7 as the internet bubble started to take off.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, unless they can microminiaturize three systems engineers and put it in every red box so that they can come out and dance and make it work. So in any case, Ed Scott had a long conversation with the new CEO. Bob Frankenberg. Bob Frankenberg had come from HP. He knew enterprise computing and he knew that Novell and Tuxedo didn't mix. So we put together a deal which launched BEA by acquiring the tuxedo technology and having it in the hands of people, Bill and Ed and Alfred, who knew what to do with it.”
2016-01-04 · Masters in Business · An Interview With Bill Janeway: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source