 Live from the Sands Convention Center in Las Vegas, Nevada, it's The Cube at AWS ReInvent 2014. Brought to you by headline sponsors, Amazon and Trend Micro. Okay, welcome back everyone. We are here, day two, wall-to-wall coverage. This is The Cube. We're live in Las Vegas for Amazon ReInvent. This is the show of the century. It's happening right now. Earth is shaking. This is The Cube, extracting the signal from the noise. Our flagship program. I'm John Furrier, founder of SiliconANGLE. Our next guest is Mike Dauber, general partner, founder, co-founder of Amplify Partners. I was going to say venture, Amplify Partners. Welcome back to The Cube. Good to see you again, John. Thanks. Congratulations. So let's just get the kind of the news out there. You guys have launched. You now have a new fund. You're the co-founder with Sunil, your partner. Formerly with Battery Ventures. We're going to talk about battery ventures. You're your partner. Formerly with Battery Ventures, a world-class firm. Out on your own. Out on our own, yeah. We left an S. So actually just one quick correction. So Sunil left two years ago. Sunil started the fund. Okay, so he did, okay. And then I joined this summer. So he raised 50 million solo. God bless him two years ago. Let me come in towards the end of fund one. And we've announced publicly we're going to raise our second fund early next year. But so far, everything's going great. How much cash do you have left of that 50 million? Do you spend it all? We have plenty to do new investments. Okay, cool. So you guys have some dry powder. Oh yeah, for sure. And you feel confident about the follow-on fund. No problems at all. We reserve pretty heavily for the investments that we make. Awesome. So let's talk about venture. Because we had Jerry Chen on early. We're a big fan. Big fan of Jerry. Big fan of what you guys are doing. And I'm almost 50, right? So like, you know, I've seen the generations of VCs from my friend Jim Anderson, who was a legend in the VC community. You know, you had Rob, you had those guys. John Doar was a young gun. Now he's more the senior guy. And you have the new guys now coming in. So the old guys, but there's a huge generational shift. Well, there's a generational shift that's happening in venture. I think it's a result of the generational shift that's happening on infrastructure side, right? So, you know, we're here at AWS re-invent. So it's worth bringing up. This cloud thing is real. You know, I think the interesting thing, if you went to re-invent, I think it was three years ago, there weren't that many security companies here. I mean, you walk around the floor today, there's probably two, three dozen. You're not worried about security as much for consumer app as you are for enterprises. But you know, Amazon just hired Stephen Orban, the CIO of Dow Jones to come and be kind of their guy for enterprise. Amazon is very, very, very serious about enterprises. And what you're starting to see is, you're starting to see this kind of, we call it at Amplify, kind of the for us, buy us movement, right? Developers at companies solving problems, realizing these problems are bigger than just them and starting companies around it. So this is Arthur Berkman who left Wikia to start Fastly on the CDN side. Or Olivier, who was at News Corp and started Datadog. Who has a huge booth at the front, by the way. But the reason why they have a huge booth is because all their customers are here. And it's interesting to us to see this trend towards these developers starting enterprise companies versus the way it used to be was, some product manager at EMC or a product manager at Cisco sees the gap in the market, they start a new company around it, right? So the VCs had to track those companies. Now they're coming out of these cloud infrastructure companies. And the investment required was high. That's right, the investment required was high. Today you can do a lot of technical proof off of very small dollars. It still costs a lot of money to go out and build a sales and marketing team, but you can push that out in the future after you've proven your technology. And so I think, as a result, you see this much younger crop of VCs, which I would include myself in, but you're also seeing a young crop of founders. And in Amplify, that was one of the reasons why, you know, I have focused where we focus, right? We think this is where the new great companies are going to be coming from. You know, I overheard a VC talking yesterday, and it's a young partner at a big firm. And one of the older partners went over and said, hey, show me this Tinder thing. You have it on your phone. None of the other partners even knew what Tinder was and didn't even have it on their phone. Or they wouldn't admit they had it on their phone. But it highlights Tinder being the hottest app if you're single. But it just comes back down to the awareness of the shift in consumption at the infrastructure, services level, and users. That's right. The customers look so different than they looked before, right? You no longer have, I think, James Hamilton made the comment yesterday, if you're selling to us, you know, buying me Super Bowl tickets or buying me around the golf won't help you. I think the same thing is true for a lot of customers that are at this show now. It's a nice dig at EMC. It is a nice dig at EMC. But not just EMC, Cisco, Oracle. Corporate sales, you know, the big license, wine and dine. Think of it this way. The trillion dollars in market cap is taken up by the Oracles, EMCs, HPs, Symantecs, IBMs of the world, Microsofts. What's happening to these companies? After HP announced their split up IBM and IBM and Microsoft had to announce they weren't splitting up. I mean, just the fact that that announcement had to be made to me is amazing. It tells you how much, how much, you know, change we're seeing in this landscape. Well, Dave Vellante is not here, and I will comment on this all the time. We believe that that whole shift and that forcing function of that, that quote, split up as Mark Andreessen said, everyone's going to split up someday, is from Amazon. I think Amazon clearly and others, but mainly Amazon from an economic and just a pure disruption machine. I said, look it, customers are coming in and they're dictating the terms. They're dictating the terms, but it's not just Amazon. We're seeing innovation at web scale moving into the enterprise, right? So the thing that's amazing is you look at the scale that Facebook runs their databases and compare it to the scale that Oracle runs their databases, right? And Oracle's not relevant to Facebook. So the new hard problems aren't being solved by Oracle. They're not being solved by IBM. It used to be if you wanted a great database engineer, the San Jose IBM office where all the database research was being done, today the best database people aren't at IBM, right? They're at Facebook, they're at Google, because those are the people who have the really hard problems. Or open source projects. Or open source projects. Around them, yeah. So open source has been a big factor in that and you've invested in some open source projects as well. Yeah, so it was called Continuity. They renamed themselves CASC, but it's an active layer on top of Hadoop. That's probably the... Today's Jonathan's birthday, actually. That's right. Today's Jonathan's birthday. Happy birthday to John Gray. Keep alumni. We're good to see you out there. I went on Facebook and said happy birthday to him. That was very nice of you. But yeah, if you're one of these big, trillion dollar about to be displaced or being displaced in incumbents, what do you do to solve your problems? You either buy yourself to maintain, buy companies to maintain relevance or just throw your hands and give up. These guys still have a lot of cash. So it'll be very interesting to see what happens here over the next couple years. Well, it's great to see you here and it's interesting to know that I'll share with the audience that all the top Silicon Valley VCs are here at this show. Certainly not a lot of, quote, press releases have gone out because they're out working. I mean, it's a working show. It's a working show. I mean, there's a lot of good action here, right, good early stage, but also buyers. Tons of buyers. I mean, the big guys are here and also the young guns. The young guns are here in force. I would say I think re-invent is becoming the new VMworld for enterprise infrastructure. This is the show that if you're an venture for enterprise infrastructure, you have to be here. You mark your calendar for what, the second week in November every year. The new VMworld. I like that. VMworld is an awesome show between VMworld and here. I got to say they're great shows. Now, IBM and HP are trying to reinvent themselves. Let's get back. Let's take a step back. Let's talk about Amplify. So I asked Jerry Chen this question. I'll ask you, what is your investment thesis? So like, you know, good fees lay out their thesis and a lot of stuff, they're figuring out the puzzle when you're hunting your detective. Use your resources, your brain, figure it out. What is your investment thesis? So our thesis is consistent with what we've been talking about before. It's that this shift, these incumbents are changing dramatically. So this new wave of founders, these people who are coming out of the web-scale infrastructure, either the Facebooks, Yahoo's, Googles, or companies like, like a wakira news corp, where you have people on the inside solving problems. It's this new younger class of founder that are going to displace this trillion dollars of market cap. And we were focused on early-stage enterprise infrastructure. So, you know, we partner with all of these other big firms. Is there segments in particular or is it a pretty broad stroke there? Well, we're only enterprise. So, you know, you mentioned Jerry at Greylock. You know, Greylock does lots and lots of e-commerce and things like that and digital media. We don't do any of that. So, cloud security, big data, storage, dev ops, for us, that's a lot of ground to cover. So what if a business buys digital media infrastructure? Is that an enterprise play? Or is that... We invest in technical founders who sell the technical buyers. So probably not. That's a little bit cleaner, tighter. Sometimes there's exceptions, but we're really trying to be core tech in IT. And look, we think there's a lot of other great firms out there that can hit their markets and they know, well, we think we win by being focused. And we think the entrepreneurs that we invest in, that we work with, win through our focus as well. All right. So really technical founders selling the technical buyers that could morph into something bigger? Sure, absolutely. And so, you know, I'll use another example. There's a security company we just invested in, right? Comes out of, you know, the IDF in Israel. And these are deep security guys. You know, they were involved in Stuxnet, but they can't exactly tell you where. And the people who are buying the product this company is selling is, you know, the CISOs at Fortune 500 companies. That's exactly the sort of thing we're looking to focus on, right? Awesome. We can talk about that at RSA next year. Look, I think focusing on enterprise is important because the buyers are the same and the types of go-to-market problems are the same. The technologies differ from company to company. But we think we're in a massive secular bull market for, and the enterprise space in the next 10, 15, 20 years. So we're really, really excited about it. We're here with Mike Dabber, Amplify Partners, a new hot VC firm, a lot of young guns, small firm. They're doing smaller checks. What kind of check sizes do you guys write in? Current fund is in the million to two million range. But we're first money in, typically, in the companies we work with. So series A or seed, whatever. Series A seed, yeah. Okay, got it. So what do you think of your results so far? Scouring the landscape here at the event. The keynotes were pretty awesome. This is an overall great event. What have you learned as you turn it over the dirt to look for those diamonds? I think, well, two things I learned. One is you don't want to compete with Amazon, right? If you're in a space that, if you're in a space that Amazon thinks they have proficiency in, they're going to go after you and they're going to drive the cost down to zero. If you get a chance to watch James Hamilton's talk from yesterday, it was fantastic. He came on earlier. He's awesome. Yeah, James is second to none, but you do not want to be in business competing with him. The resources he has and the amount of money he has to throw at the problems. Yeah, Amazon is going to win those battles. You want to be building value-added services on top of AWS. I think the other thing is, And Jassy's also a chess master too. He is. I'm going to start with those guys. I think the other big learning is, Amazon is really focused on the enterprise now. Two, three years ago, I didn't think that was the case, but they are making a commitment to say, we are going to work with CIOs to move you to the cloud, which means for us in the venture world, I think the time is clearly now to be looking for, if we haven't already, found companies to help enterprises move to the cloud. Okay, so let's get back to your job, which is to bet on horses. Bet on horses. Okay, in this ecosystem of Amazon, what kind of horses are you going to invest on? Obviously ones that aren't going to compete with Amazon. I think the one obvious hole that Amazon has not gone after, and will be hard for them to manage themselves as security, and I think that's where you are going to see a lot of solutions pop up, and you're going to see some big winners around security, just so I don't just amplify companies. A great example, I think of a company that's made a lot of noise, and justifiably so, is the Illumeo guys. Very, very exciting company. I really enjoy talking to those guys. Andrew Rubin's done a great job there, but I think there's a huge opportunity for third-party security vendors in the cloud to be successful, because if you're an enterprise, security matters deeply. It's the biggest concern people have over the last couple years. As enterprises are starting to be more aggressive in the cloud, security is one of the first things that you have to solve, and I think that's what you're going to see a lot of. Okay, final question. Big data in the cloud. Is big data now a dead sector? Meaning, I mean, you have Hadoop as a sector of the market. You have a lot of established players, but in a way, cloud absorbs the big data as a fabric. So does that change the dynamics of big data? So what's the big data relationship? Because there's an undertone here, big data. It's not like big data show. So I'll tell you a combination answer to that in my kind of viewpoint coming out of Strato, which is the big data space, the building block era is over. Two, three years ago, you could start a company that was a Lego block, and if it was a good Lego block, I think you could be successful. I think today in that space, you have to be very solution-oriented, and I think part of it is because of what you said with Amazon, right? Amazon's going to create solutions in the big data space as well, and I don't think people delineate between when I have a big data problem versus just a data problem. And so I think the solutions really need to be being built here as opposed to, you know, John, here's a bunch of Lego blocks and put it together. Okay, so prediction for next year. What do you think Amazon's going to work on given the trajectory coming out of this show? That's a great question. I think you're going to see a lot more solutions targeted at squarely at the enterprise CEO, CIO, come out next year. You know, they did a great job with the Aurora announcement this time. You know, they made the announcement around Docker. I think you're going to see... I think that's an early indication. Ali Wins came in. CIA, intelligence community. I mean, it's our government. What? Moving that fast? If the CIA can be on Amazon, then anyone can be on Amazon, right? I think we're going to see more solutions. They're really catered to the CIO as opposed to, you know, the 25-year-old startup co-founder in SOMA. Mike Dabber, Amplify Partners, one of the hot young guns rising stars in the community. Obviously, Amplify is a new firm. You know, we had Ryan Floyd on. Great storm ventures. Another great firm to work with in the enterprise. And of course, Jerry Chanick, Greylock. Great job. Thanks for coming on The Cube and sharing your perspective. Thanks for having me, John. I mean, you're good. We should do six pack of cores questions because you're like nail on this thing. Of course, if you're watching, we want some sponsorship. We'll do six pack of cold questions for Mike Dabber. I appreciate it, man. Thanks again. All right. Mike Dabber, the Amplify Partners, this is The Cube. We are live here at Amazon re-invent. We'll be right back after this short break.