 Great, thank you all for being here. I'm delighted to have a fabulous roster of panelists. And we will be talking about investing in the sharing economy, equity and ownership. But what we'll really be talking about is sort of sharing the wealth in the sharing economy and different perspectives on that. If you are watching the livestream and you'd like to ask us a question, because we will have a bunch of time for audience questions, tweet the question to me, Digital Arun, and use the Socap 14 hashtag. At some point in the middle of the panel, we will pause, take a look at these questions and ask a few of them. So we've got four amazing panelists. And what I'd like to do is to start by just having each of them introduce themselves in about 30 seconds. So we'll start with Lisa. Thank you, Arun. It's a pleasure to be here. I'm looking forward to our conversation. My name is Lisa Ganski. I'm a serial mischief maker, entrepreneur, and about. And I've been involved with the internet from the side of a startup for 15 or 16 years, possibly more, and then secondly, in 2010, I wrote a book called The Mesh, Why the Future of Businesses Sharing, mostly because I considered that I was a successful entrepreneur and a failed environmentalist. And I started to observe that the world was changing in important ways in terms of our ability to access talent, goods, and services. And so for the last four years, four and a half, five years, since I wrote the book and it's been a conversation, I've had the privilege of going around the world meeting a lot of really interesting people who are doing projects and startups, some of whom are on the panel, including Arun. And probably many of you who are watching or in the audience. All right. Thank you, Lisa. Mike? Mike Jackson, it's a pleasure to be here. I'm a partner at the Western Group. We're a clean tech focused venture capital fund. I've been investing since about 2007. I've made investments pretty broadly throughout clean energy and wind, solar, biofuels, electric cars. And more recently, over the last few years, placed a few investments in a couple of sharing economy companies so I can kind of hopefully share that perspective of an institutional investor. Not the least of which is Adam's company, who we'll be hearing from in a little bit, but investors in Yurtle, a company called Feastly, a company called Good Eggs, and a few others that touch on some of the aspects of the sharing economy. Hi, everyone. I'm Janelle Orsi. I'm a lawyer. And my focus is laying the legal groundwork of more sustainable and equitable economy. So I co-founded the Sustainable Economies Law Center. I give legal advice to a very wide range of things that I consider to be part of the sharing economy. And our organization writes a lot of laws to lower the barriers and pave the way for more resilient communities. Morning. I'm Adam Warback. I am the co-founder and head of product for Yurtle. Y-E-R-D-L-E sometimes have to spell it. Yurtle is a store where you give and get things for free. It's an app, an iOS app. There's about 150,000 members in the US right now. And our mission is to reduce the number of new things we all have to buy by 25%. We're set up as a California Benefit Corporation. And I'm excited to be with you all. OK, thanks, Adam. And over the last two or three years, I've participated in maybe 30 or 40 discussions about this emerging sharing economy and what it means for the future of business and the future of ownership. And I'm really delighted to have you guys here, because this is sort of among the smartest group of thinkers about the sharing economy and about the issues that we're going to discuss that I have encountered. So it's wonderful to have you all on the same stage. So I'd like to start by asking each of you in turn for your perspectives on what the term sharing economy means to you. Just to sort of set the stage, one perspective is that the phrase sharing economy reflects a set of business models and philosophies that provide what someone in Seoul a couple of days ago called a cloud lifestyle, capital goods and services on demand with lower levels of long-term possession of any of the associated assets, and lower or no long-term commitment to any specific supplier. And in parallel, a blurring of the boundaries between professionally provided services and goods and things that are provided personally, where we sort of shift economic activity away from direct corporate provision, a company sort of selling to a consumer, and towards either market mediated or community mediated peer-to-peer transactions. So that's sort of one perspective on what the label sharing economy might be referring to. And I'll stick with sort of the order in which we're arranged for now and start with Lisa to get your perspective on like, well, what is the sharing economy to you? First off, I would say it's a fundamental shift from what we have many of us grown up with as last century's model. We're moving away from, and fairly rapidly moving away from, this one-to-many bureaucratic top-down, don't worry, we have it handled, kind of mentality to something that's much more distributed and many-to-many the ability for us to reach out to the crowd and the necessity for governments and corporations to become porous, meaning that instead of being vertically integrated, talking into themselves and having corporate campuses, to start to understand that resilience of the brand and resilience of the planet comes from this meshing or integration, which is benefited by porosity or the ability for us to connect to each other. So for me, the sharing economy is a fundamental shift and the most conspicuous way for us to see it is that we're moving from a world where we were organized around ownership to one in which we're moving to access of talent, goods and services and that the second main tenant for me is that unused value is waste, that things that we value that are on the asset side of the balance sheet, when they're not being used in this second, they're wasted. That form of waste is excess, bless you, that form of waste is excess capacity. The other flavor of waste is kind of the stuff we throw away and that too is part of, for me, what I consider to be part of the sharing economy because we actually have the ability and some people call that the circular economy but we have the ability to now see things that we couldn't see before in what I call the blue dye effect that we effectively with technology sensors and the internet and mobile devices, we've made it much easier to track each other and things and so now we can see what was invisible before. Unused factory time, intellectual property sitting around, homes basically being wasted, lots of cell phones and lots of materials being thrown away, all of those things are waste that because of us being now connected in new ways and other demands like climate change and things is driving us to now rapidly think very creatively together to convert that waste to value and so for me that's a core of the sharing economy. Okay, that's great because you're sort of touching upon a theme that sort of resonated through your description was sort of increasing the efficiency with which we use the capital and the assets that we have sort of leveraging digital technologies in ways that sort of allow us to use this more efficiently towards sort of like multiple objectives including sort of like financial but also environmental. And the other thing for me, and I'd be interested to see what other perspectives is many years ago E.F. Schumacher wrote a book called Smaller's Beautiful and one of the things in the book which is very for me core is that what we have considered to be revenue in many companies actually isn't its capital. Capital is not supposed to be diminished as you generate the revenue and if you're using nature for example, you're diminishing resources as a function of generating the capital that goes back to this conversation about shared value. You know, who created the value and who captures the value and how come? And so part of what I think we're hoping that we'll get into is this idea of the relationship in the sharing economy between created value and captured value is related a little bit to that idea of efficiency of capital. Absolutely. Okay, so Mike, does this sort of resonate with what your conception of the sharing economy is? Sure, yeah, absolutely. I think I agree with everything that Lisa just said. I think what I'd add to it from an investor perspective and one of the reasons why we're so excited about sharing economy companies is that the business models are extraordinarily scalable and they're very simple and elegant. So if you think about a company like Airbnb as compared to Hilton Hotels, they don't need to build buildings, they don't need to hire maids, they don't need to check people in. All of that is handled in a distributed fashion and so the level of complexity of what they have to do as a business diminishes incredibly while at the same time they can add a new building, a new hotel every week, every day. You think about Adam's business with Yurtle comparing it to a traditional commerce player like a Walmart, they don't own trucks, they don't have to take the risk of building a big store in a small town and hope it works out. And so that ends up being a really scalable and as we've seen very, very disruptive model when it's gone into different markets and so that's particularly interesting to us as we think about how these companies have the ability to create a huge amount of change and a huge amount of value in a pretty short period of time. Okay, interesting. Janelle? Yeah, I'm glad these two went first because I could also say I really like, especially the way Lisa that you described it and break it down and I was thinking maybe I will just add one more thing on top of that which is maybe my hope for the sharing economy is for it to be the response to realizing that what we have now predominantly is more of a taking economy. It's one where we've kind of set ourselves up to take from each other and to take from the planet and to compete and to extract and we're suddenly realizing, oh, this is not making us happy, we're destroying our planet. And so the sharing economy is the reaction that says, wait, we can take the resources that we have, we're in this together and we can work it out to make sure that everybody is provided for and in that respect, the sharing economy also incorporates elements of shared power and shared profits all with the goal of just making sure that everybody is fully provided for. Okay, so contrasting sort of the sharing economy with the taking economy. Sure. That's an interesting characterization, Adam. Yeah, I really like the we're in this together and I think the broadest thing we might talk about sharing economy is our aspiration for a better economy. And that's where the definition gets really hard sometimes because the aspirations and practically what it is sometimes differ and that's, I think, probably the nature of much of our conversation today. As a simple definition for me, the sharing economy unlocks unused value through the application of technology and community. So unlocks unused value, I think we sort of talked about that and I'm particularly interested in the application of technology and community. And some people would say that some things are part of the sharing economy that don't have technology, it's true. But I think a lot of the interesting things we're seeing right now are the technology application and in that communal desire, probably best expressed by Janelle, that we're in this together. This desire, there's something broader in this than just making money. There's a desire to actually solve something more fundamental. Okay, that's, you know, I mean, the reason why I started with that is that talking about the sharing economy often sort of, you know, I've had many conversations about the sharing economy but I've realized sort of midway through the conversation that I'm talking about something completely different than the person that I am talking to. And I'm also happy that we've sort of brought out a couple of key points sort of related to what we want to dive into in the panel that have to do with sort of equity of value distribution, like, you know, as the value is created and ownership models. And so, you know, I've been following a discussion that has sort of been unfolding over the last couple of years, I guess, but sort of seems to have intensified over the last few months in light of the sort of the stunning valuations that are associated with some of the sharing economy platforms. And it seems to me that in this discussion we paint a couple of sort of caricatures and I want us to sort of move past those. And so, one caricature that I see often is of the sort of the soulless venture capital backed Silicon Valley platform building one of like, you know, what Mike called one of those scalable business models sort of perpetuating what Janelle might refer to as the taking economy, pursuing sort of world domination with limitless capital and ruthless efficiency, creating sort of in the process underpaid and underprotected assembly line sort of labor. So that's that sort of one sort of picture of like, you know, how the sharing economy is unfolding. Guilty is charged. Well, you know, that's and sort of it contrasts with a picture that is also being painted of an alternative which is the benevolent worker cooperative where each of the workers is also an owner. They reap sort of their fair share of the value that is created. They're all sort of in this together. They wake up in the morning, hold hands and sort of sing the circle song. But this is sort of, but where this cooperative is sort of paralyzed in its sort of inability to raise capital using sort of like, you know, financial markets has inefficient organizational decision-making models. And so this is sort of the alternative picture that is painted. And so I mean, you know, I'd like to start with Janelle and like, you know, from your point of view and you've written a lot about this, what's wrong with this picture? Does this sort of reflect the reality of, you know, sort of VC backed private corporation versus benevolent cooperative? Is this the reality or is this in fact a caricature? I kind of think that both of those are real and I think the sometimes are so real I just get frustrated and want to cry especially the worker cooperative example. But I just think we can let those go a little bit because we've reached a point in history where we can just look at, well, what is possible? We can get beyond both of those and harness a lot of things that we just didn't have before. I mean, some of that is technology and we were mentioning the worker cooperatives and how inefficient they can be and frustrating especially in their decision-making and capital raising. Well, technology can change how we make decisions, how we get feedback from the people we're interacting with, how we, you know, create feedback loops and integrate ideas much more efficiently. We're also reaching a point in history where we can harness capital from the crowd and not just from the wealthy but we have crowd funding laws coming down the pike and platforms that enable us to raise capital that way. So I think it's kind of a breath of fresh air that we could just look beyond both of those and create organizations that harness the ideas of the crowd, that harness the capital of the crowd and that do so for the purpose of benefiting the crowd. Okay, Lisa, what do you think? I mean, is this sort of an accurate picture of the alternatives that we have in front of us now? I think it's the polarity of the alternatives. I think we, you know, the big bad VC, you know, this guy's, you've sent, you've central casting did a bad job if that was your intention here, but, you know, I think. He took off the devil horn. Just before, just before he came because it bothered your microphone. You know, I think the idea of capturing all the value, squeezing all the juice from the fruit is certainly something that happens all the time on the way in. I heard on NPR that, you know, BP's spill in the Gulf was way worse and that now they're, you know, all this nonsense. I mean, the, there are big corporations and VC's fall into that sort of what I'll call extreme capitalism idea, which is the me model of, you know, I had the good sense to invest in this and therefore all of the value comes back to me. Whereas, for example, the sharing, what we're calling the sharing economy enabled by technology is really built on GPS, which was something that the Department of Defense did in the United States. It's built on DARPA's internet. It's built on a lot of technology and other things, including all of the natural resources and things that we use to power all this stuff. And so this is, I like what Adam said, which is a lot of what we talk about, what's now coming on under the moniker of the sharing economy is really the, hey guys, we're gonna reinvent something and what do we wanna reshape this to be? Because clearly we're way out of balance on what we are currently or historically as of a couple years ago calling the economy. And so a lot of, I think, what's happening under the moniker of the sharing economy is this kind of rebalancing of value creation and value capture. And also this idea that on the planet we have many talents, goods, and services that we aren't using, the ability for us to now see each other, to make those things blatant and to provide value and to stop subsidizing the waste that has happened with the last economy. All of those things are powering what we're calling the sharing economy and this emergence of many different kinds of platforms. And there's not that many business models, but there's a lot of instantiations or versions of like an Airbnb type offering or a Lyft or Sidecar or Yurtle. You'll see that around the world these sorts of things are being tried under different brand names with slightly different twists on the terms in which they engage customers. But fundamentally we're all doing experiments trying to rapidly learn and hopefully we'll learn together. Okay, and so you've got sort of like, as you said, like the sort of the polarity of the characterization of these two alternatives, but a point that we'll get to sort of like a little further down in the discussion is whether the objectives that are embodied in what we are calling the sharing economy do in fact offer by themselves sort of alternatives that wouldn't exist if we were talking about, for example, oil extraction or investment banking. I mean, Mike and Adam, do you have sort of anything to add to this picture before we sort of move ahead? Well, I'm a little curious how involved people here in the room are in this thing that we're talking about. I mean, how people here have participated in the sharing economy company or organization in the last year. Okay, so it looks like more than 50, 60%. And how people are professionally involved or volunteer for sharing an organization, so a few. Okay, I mean, I'll put my agenda out there. I'm recruiting, not just for your little, but really for like, for this space. And it feels to me a lot like, Lisa, you know I've taught this a lot, a lot like sort of sustainability was seven or eight years ago where there's a lot of opportunity. It's really interesting. There's technology taking off, there's kind of money coming in, but there's not enough people in it yet. There's really not enough of people who have time, energy, thought, great ideas, and sort of the passion to run something, start something, build something, whether it be a tool shed in their community or a startup or joining something else. So the thing that I think we need right now is people power. We have a lot of participant power and it's pretty amazing to watch how many people, there's some surveys that say 60% of Americans plan to use a sharing economy. Is that right, Chelsea? Some study like that. 60% of Americans plan to use a sharing economy company in the next year. So like there's an aspiration for it, but really they're among the kind of leadership and people, I mean all of us have been on panels or something like it before together. And it's actually just sort of remarkably small. What it desperately needs is more people to come in, own it and take a part of it and kind of make it their own right now. And there's a tension that I have perceived sort of recently in philosophy of the people who are in fact drawn to what is labeled the sharing economy, either as providers or as thinkers or as people who want to sort of nurture and grow the idea and grow the companies. And there seems to be a tension between people who are drawn to the fact that this seems to be a incredibly lucrative industry in which you can play. This is sort of the new hot sort of tech startup space and it attracts people who would have been attracted to Facebook a few years ago or Google a decade ago or Microsoft 20 years ago. And sort of in parallel what seems to be different here is that there seems to be a extremely large community of people who are drawn to it for the philosophical appeal, for the objectives that are embodied in that term sharing economy. Perhaps with a different conception of what the end goal is compared to sort of the former set of people who just sort of see this as the next wave of sort of Silicon Valley VC backed sort of. And so I think that we're all in favor of some form of sharing the wealth among the wealth creators. I think it's hard for me to imagine that we're not in favor of some form of taking advantage of the, at least in the United States, the market economy that has sort of nurtured the growth of business so admirably over the sort of last hundred years. Perhaps it hasn't sort of taken us to where we wanna be. But like, I'm a business school professor and so I think that capital markets generally are good for an economy, even though they might have sort of their downsides. And I, we'd probably agree also that there are trade-offs, you know, both for society in terms of like, you know, one model may sort of grow the size of the pie tremendously, but sort of lead us to a unacceptable division versus another model might sort of like, you know, provide equitable division that lead to a smaller pie. And so for any individual stakeholder sort of making decisions like in an environment like this where you've got a set of objectives that are often like, you know, multiple and this, you know, it could be a triple bottom line kind of set of objectives. It could be like, you know, but it's a broader set of objectives than would typically be characterized with I'm starting a tech company or I'm starting a new venture. It seems to me that these trade-offs are definitely different for a sharing economy platform and, you know, the way in which we decide to sort of structure the ownership of the platforms that we create will then influence how well we achieve each of these objectives sort of like, you know, the total value creation, the division of value and the objectives that are met as this value is created of like, you know, sort of financial returns versus environmental impact versus equity. So Adam, I want to sort of call on you here because you have started a platform that sort of plays in this space and you have sort of thought through and like, you know, actually grappled with some of these trade-offs and you chose a particular structure for Yerdl. And so can you sort of give us a bit of insight into what your thought process there and why you ended up where you wanted to end, where you ended up? Sure. So we came up with an idea for Yerdl and then figured it had to make it into a company or an organization of some sort and called people like Lisa and talked about how we should do that. And the first need was some money. We had funded it ourselves but we needed to raise a seed round of capital. And as we began to look at incorporation, I don't know if you and I talked but I definitely was familiar with what your work you were doing at the time and definitely familiar with kind of co-op structures and had a bunch of conversations about all of the different models of doing that. And they rapidly became a sort of a swamp hole for us like really hard, no good models to point to, couldn't actually know what to do. And meanwhile, we were trying to build a product and organization. So we found as an option starting up a California Benefit Corporation which is basically a simple stricture that says that people are pretty familiar with Benefit Corpse. So this is a part of the California Corporate Law that allows you to set up a corporation and essentially say that your mission is your top priority and you can actually make a choice that would be non-economic in favor of your mission and your directors wouldn't be able to fire you for that or your shareholders wouldn't be able to sue you for that which is a basic protection essentially for the organization. So we set ourselves up like that. We raised our seed round with that and our seed investors including Lisa were fine. I think actually attracted to us because of that. Like it was a very popular thing and we were successful in growing and getting to it and we got to the point of having to raise an A round and then it sort of changed because we were immediately told that no one will fund us as a B Corp but you have to be set up as a, or you could be set up as a C Corp or a Delaware B Corp and a Delaware B Corp is sort of like, Delaware Corporate Law applied to everything so it sort of takes the fangs out of B Corp I guess and still allows all the things happen. So we had to make a decision, do you go over that higher hurdle? Do you actually turn away a lot of potential funders? Do you do that in order to maintain this social commitment or do you avoid it? And we were lucky enough to be relatively successful enough in our seed round that we were able to attract a great investor initially in Wesley. They were actually involved in our seed round, continued to the A round but we were, I mean obviously we were nervous. Like we thought it was gonna be, it was one of the deal terms that we were talking about and you actually had to, I mean I'd be curious how you had to run it up the flagpole and how you guys were able to do that because as we were told, we couldn't find another example of a venture fund A round in a California Benefit Corporation at the time but maybe there's been some since. So I'd be interested in what happened for you. Sure, yeah. So we, you were actually not the first B Corporation we invested in. We had previously invested in a company called Honest Buildings based in New York which was a B Corp and a lot of the way that we think about it is the way that I'd hope most people would think about with the B Corporation is that when you are focused on issues that are not necessarily trying to maximize short-term value, they maximize long-term value often and we're in the investing world as venture capitalists not to write Adam a check and try to sell it next week but to hopefully turn his small company into a very large one over six, seven, eight, nine years and so we're long-term investors and so we need to have a long-term perspective on what makes for good business and so I think that's how we get ultimately comfortable with that as a concept. I think one other piece I'd add to the equation which is one that I think Adam raised a bit in his conversation is I think most of the value that's created by sharing economy companies is already distributed. If you look at Airbnb and you spend $100 on a night hotel room, $85 of those dollars is going to some guy renting out his apartment so already 85% of the value has already shifted from Hilton Hotels to a guy at Bob. Then the company is hiring folks and growing in that capacity and so again more of that wealth has been distributed and so focusing on the corporate structure and how do we share that wealth I think is focusing on a very small slice of ultimately the value that's created by these companies. I'm all for trying to figure out how to make that more equitable, more distributed but I'm much more, I'd much rather make sure that we create more yurtles, more Airbnb's, more lifts because that's where the majority of the wealth will be spread and if we focus too much and as Adam saw in his fundraising process if it becomes too difficult to structure yourself that it maybe prevents you from starting the company that would be a, we'd lose so much of the value distribution that would have been created. No, I mean that isn't interesting and I spent a little bit of time trying to sort of look for historical examples of the ways in which we might anticipate companies like Airbnb sort of and Yurtle eventually spreading the wealth and Airbnb Yurtle's a little different I realize and so I looked at eBay's sort of most recent balance sheet and their marketplace business I believe generated last year $76 billion of revenue flowed through the marketplace of which eBay captured 9 billion which is somewhere between 10 and 15% and so it's sort of roughly consistent with the value distribution. Now the margins on these are potentially different sort of for eBay and for the person who's selling on eBay but those margins are probably going to be different for service providers that are leveraging existing capital relative to someone who is simply sort of selling a good on eBay and so the news I think is a little better for like service providers that service platforms in the sharing economy than even for eBay where I was sort of favorably inclined when I sort of looked at that value distribution picture. So that's sort of the corporate or the B corporation the Delaware B corporation, the California B corporation we're sort of preserving the structure of ownership by a relatively small group of stakeholders and value creation and capture through sort of transactions by a relatively large so I'm just going to jump to Janelle and then I'll come back to you Lisa because I wanted to ask Janelle what the alternatives if you were advising Adam at the time that he was sort of creating Yerdel I mean what alternatives would you have put on the table for him? Yeah I think anybody who really has a social or environmental mission when they're starting a company and I think a lot of people do I think my best advice is to just not allow the potential for limitless wealth accumulation to invade your company at all because the thing I've noticed about people in general is that it's very rare for a person to look at the money that they have and the wealth that they have and say all right that's enough now I don't need anymore there's this kind of tendency in this society to accumulate limitlessly it's kind of pathological and it's been such a process over the last say 150 years especially that wealth has like such a huge amount of wealth has accumulated in the hands of just a few people and that is going to make our society collapse I mean yes the ice caps are melting and I'm extremely worried about that I'm also like equally worried about the fact that we're gonna just have complete chaos when 80% of the people in the society really are working with only 7% of the wealth whereas the top 20% are controlling 93% of the wealth and you know that 10 to 15% that is being paid to Airbnb or that's being paid to the platform that's a pretty powerful chunk of money and I think at this point in history we don't have to pay that to these big platforms because ultimately we're paying it to people who already have money, they don't need any more money we can create new platforms that basically take all of the earnings and either reinvest them in the platform for the purpose of creating the world we wanna live in or distribute them back to the users in ways that incentivize good participation by the users and so generally it means that you can be a benefit corporation but I would actually say if you're gonna take capital from people just make sure that it's limited that the return is limited so that there's not always an investor voice in your head saying well if you do this we'll make more money you never get to the point where you feel like okay now I've earned enough for my investors and I can focus on my social mission there's always this voice well if you do this we can make a little more money and that voice is always gonna be in your head it's not good to have that voice in your head I think if your real goal is to change the world so cooperative corporations, non-profit corporations especially any entity that is democratic meaning that the participants say the users of Yerdal, the hosts of Airbnb the drivers for Lyft where they have a vote in the election of the board of directors and where their voice is actually taken into account in a wide variety of ways it means that the platform is gonna make decisions solely that benefit the users and it's not gonna be swayed by anybody who's on this wealth accumulation so you've sort of got a much more decentralized model of ownership in mind than any of the sort of corporate structures that we've discussed whether it be traditional, be Delaware, be so I mean Lisa moving to you is you know I wanna sort of as the final sort of structured point before we open it up for questions sort of explore what where the boundaries lie as an investor and so if you sort of take off your sort of entrepreneur hat and sort of thought leader hat and put on your investor hat and you invest in a number of early stage sharing economy platforms I'm just wondering what to you is the limit of decentralized ownership where you sort of stop and say well I'm not gonna get the kind of return on my investment that I want and so I'll help this company in other ways but not with my money like you know how decentralized can ownership be while you're still sort of participating as an investor. So I think there were two questions in there for me one of the things before I switched to the investor as an entrepreneur how many people in the room by the way consider who considers themselves a conspicuous entrepreneur meaning you're actively managing something, starting something or a closet entrepreneur because you're cooking it up as we're speaking if you follow in one of those two categories were you? It's a thin number yeah. Okay so you know as an entrepreneur I would just say courage is an absolute necessity always and one of the things that we see always is that investors will follow courageous entrepreneurs who are grounded dreamers you know the right amount of helium and Velcro kind of thing. And so if you, if entrepreneurs like Adam and Andy on the Yertle team and Dan and Billy on Solar Mosaic and a couple other companies I could think of honest buildings rigs you know come forward and say this is the vision we have and this is the way we wanna structure the company and here's why and the logic of what is being proposed from a business perspective makes sense especially as it starts to you know become a snowball downhill. Investors will follow things that work. That's the first spool and so entrepreneurs increasingly will begin to create and I think we're at the very beginning of as entrepreneurs experimenting with new kinds of forms of structures including ownership and so will some of the Solar Mosaic investors who are investing in solar on rooftops also be equity holders of the company at some point because the thing that we're talking about is there's two kinds of value capture. There's operational value capture as in 85% of the transaction when Arun stated Bob's house goes to Bob but there's another kind of value capture which is $18 billion of value for Uber. The people who invested you know a hundred or a million dollars very early are getting a disproportionate amount of on aggregate value captured from a market capitalization perspective that the people who have worked to build that network especially in something like Lyft or Sidecar where it's or UberX where it's individuals cars are not participating in that enormous value capture and that's where the wealth is being made. It's not happening at the lifestyle level. Bob gets 85% of the hundred dollars but more that such and such a firm is gonna have a $5 billion take away at some moment when the company goes public and so I think that that's part of what's being asked. As an investor, by full disclosure I'm invested in Yurtle and Honest Buildings and Solar Mosaic because for me I'm a distorted investor. I'm not really a good example because I'm also. That's part of the reason why you're on this panel. Yes, I'm distorted. We're all distorted in different ways. You know I have chosen to, I always invest in people not things, first of all. So every place I put my money is always because I think the people A, they laugh at my jokes and B, but more importantly, they're awesome entrepreneurs with a strong vision and they are people who are resilient enough to go through the whole ride of what it is and make a start-up work and so, and the idea is big and it's worth investing in, time and money and so from my perspective that's the fundamental deal. If the entrepreneur said we wanna make it this way or that way then they've hooked me with both the team and the idea that's the sort of irresistible offering. Even if it were a worker cooperative and they just wanted to borrow your money at the fixed rate of return. Absolutely, yeah, absolutely. I mean, would I do that always from a, if I was trying to invest in sort of a more risky thing, probably not, then I would have to turn to some other weird, you know, like wind power with kites and things that are really R and D. But I think the whole idea for me is, the idea of having a ceiling on a return, like the bank gives us some crap return for our money. If Yertle was giving me a five times or whatever, a two times my principle or whatever we agreed to in the beginning and it produced the social impact because this is like the big kind of bullshit thing which is social impact investing. We have all these cute words, patient capital and social entrepreneurs. If you're building a business that's changing the world you're a social entrepreneur, congratulations. You know, Uber, whether Travis knows it or not, is changing the way that we see transportation. Is he a social entrepreneur from central casting? Absolutely not, you know. But the impact of what they are doing is changing the way we see ourselves in cities all over the world. And so I think that we're seeing this, again, this kind of mushing together of a lot of things that we were very careful to make very distinct in the sustainability era. We're now seeing that entrepreneurship is social. Yeah, it makes me think of three things. One, there's sort of an interesting conflation between a model of wind power with kites and your earlier reference to helium and Velcro. I'd be interested to see how those two go together. But also making me think of Silicon Valley, the TV show, making the world a better place, for those of you who have seen that. I was on a flight from Seoul a day ago and I actually sort of watched all eight episodes when I was asleep, so it's very heavy on my mind. I'm sorry. But there's a third point that comes up because there's an inherent tension here between sort of Janelle's idea that we should cap the returns to investors up to a certain point because it creates distortions in society that are not good for society in the long run. And the philosophy of venture investing, as I understand it, which is sort of a portfolio approach where you expect that a lot of your investments will not turn a return, but sort of like the record label you are sort of gonna make the money back on your superstars. So just sort of the final point maybe from Mike and then we'll open it up to questions. I mean if a company came to you, I mean you're sort of like a traditional venture capitalist, traditional enough venture capitalist and said like, you know, here's our model and here's our ownership structure and here's sort of the offer, but there's a cap on the upside. I mean, is that something that you'd consider? So I think it's important to, it's important to realize that, then this will be a- He didn't say no. Maybe controversial in the industry community, but entrepreneurs are the leaders and investors are the followers. And if you go around and talk to a whole bunch of investors, they will say, we invest in these sorts of companies, we don't do this other thing. And then all of a sudden a really successful company shows up in this thing that they all said they wouldn't do and everybody wants to pile in and follow it and figure out how to possibly do that. Perfect example would be a company like Groupon where people said, you know, we just know barriers to entry, don't like it, don't, oh geez, let's fund 10 more Groupon competitors because that really took off. And so I think if companies can do it well and they're truly great companies, money will figure out its way to get to them. You may not be able to get existing structures into that. So we started a fund in 2011 that told the folks that invested in our fund, here's how we're going to operate. It's very difficult for us to change now in this fund structure. We're gonna throw that all out. We're gonna invest in it with a different set of constraints. We're not gonna try to get an enormous amount of upside. We're gonna be maybe a little bit lower risk, lower return investors. And so, but over time, if as those types of structures, if they become more popular, if they have successful stories they can point to, you will see money figure out its way to get into them. And so it's a big task for any one company to try to do. But if you do it, you'll see the money follow. Okay, yeah. One more quick thing is just the stories, you know, that if it leads, it leads thing in the news business, well it's also true, certainly around finance. And so the unicorn phenomenon of the three or five big companies that have billions of dollars of valuation and have raised a crazy amount of money has captured a disproportionate amount of the stories. The reality for most of us that do investment is that we actually rarely have the opportunity to invest in something that's a Google or a Facebook or a Tesla. And- Or a soon to be Yurtle. Or a Yurtle. My point is that we don't know it is until it is, that Yurtle becomes Tesla, but the strategy when you're making the investment is that it's filling out a kind of thesis that you have, you know, that you're seeing the world move in a certain way and you're betting on that. And so for me, and I'm sure for Mike and Wesley, and many of the VCs it's the same, is part of the early experiments allow for all of us to learn and that's why, again, there's value shared because we're all investing after we're learning what's working and not. Yurtle is not the first one to take this thesis, but Yurtle is the one that will succeed at a global level because they've actually been able to learn from a lot of other, no pressure, a lot of other people who have gone before them and so that's the phenomenon as we all stand on each other's shoulders, whether we make that explicit or not. All right, and so there may be a process of experimentation that we have to go through in order to sort of vet the alternatives, but if we find an alternative that works, the capital will flow there and it will flow there in part because the mythology of sort of all of venture capital goes sort of seeking the next Google or the Facebook may be actually sort of mythology and may not be reality. Yeah. We've got, since all of you are here, I'm going to sort of reward you for your presence by actually sort of looking for questions on Twitter. Before I, but like, you know, we have a hand up, but I'm gonna sort of toss two of the questions that I see out and sort of let them float here and then we'll take one more question or maybe a couple of questions from the audience and then I'll just sort of let the panelists sort of address all of the questions at once rather than sort of doing them sequentially. And I mean, one question comes from Rashmi Khare where she wants to know if there's anything that the government can do to sort of like, you know, facilitate better ownership structures that sort of lead to the kinds of outcomes that we want. Is there a role for government which I think of as the original, yes, cooperative? You know, anything that we can ask them to do to sort of make things better. Marissa Feinberg sort of like, you know, is highlighting the fact that, you know, is there really enough benefit in the transactions themselves or is there gonna sort of have to be, you know, if there is going to be genuine well-sharing, does it have to come through sort of like, you know, stakes in the IPO? And yeah, so those are two questions from the audience and just sort of state your name and state your question. We'll go around to maybe three or four people. Hi and truly. I'm setting up an unprofit to give free breaks to the ill, less able and unpaid carers using gifts from the shared economy. Should I partner with all the platforms as they are now to get the gifts flowing to an approved list of people who really need a break or should I go alone and set up my own nonprofits? Okay, so that's one question. Sorry, what was he, what is he getting? What is he giving? Sorry. It's kind of hard, it's hard to hear up here actually. We have an echo. We've got a lot of echo. I want to give free breaks to the ill and their unpaid carers, give them an eye to weigh, using gifts from the shared economy. Got it. Do I get the gifts through the existing platforms and give them to the people who need the break or do I go alone to the public and get the gifts directly to a standalone platform and give them to the people that need them? So do I ask homestay websites to ask their hosts to gift two nights a year and a car share company to gift some transport for the transport to get to the break or do I just go directly to the public? Right, okay, fair enough. Thank you. Hi, what do you think? Everything it's possible to share? Is it possible to share everything? Is that your question? Where are the boundaries? Where are the boundaries? Okay, so. I would love to hear from you that you have experience. All right, so anyone else with questions before we? This one. Go to the... Yeah, can you see this guy? Yes, yes. That's a good question. Okay. I'm curious if y'all are seeing any emerging trend. I'm not an accredited investor, but I am a consumer daily. And I am also an entrepreneur and the number one investor in my company is people who buy and wear our shoes. How can we value their contribution as an investor in our company in a way that actually maybe not builds them equity but builds them that sense of ownership and belonging in the company and respects the contribution that they've made as a self-funded business. They are the number one and only investor at this point. So how can we use a sharing economy to build that idea? So for people who are consumers of your company, you want them to sort of feel a sense of ownership. Is that the question? And how do we get people to feel a sense of ownership? Okay, and like why don't we take one final question and then we'll sort of recap and then go to answers. Did you have a question? Yeah. Well, I think mine was, I'm trying to figure out some of the line between, just to keep the line. Some of the rhetoric behind every entrepreneur or every business entrepreneur, like the revenue market in Goldman Sachs changed the way we see the world and made an impact. Was it positive? No. And as far as like a common ground between these two individuals of the two pictures you painted, there are other, that seems to be a dichotomy that there are many other options like New Belgium, Bob's Red Mill, other places where they've been able to figure out a middle ground between the two of these things. And I think that's, I guess my difference is telling the difference between yes, you're making an impact, is it positive and are there more interest to narratives? Okay, all right. So just to sort of recap real quick, we've got the question about like, what role can the government play? We've got a question about like, is there really the potential for sort of genuine sort of sharing of value through transactions or does it have to come through sort of sharing of ownership and wealth creation? We have the question from the gentleman here about like sort of like going to the public versus like going to a smaller group of people. We have the question from the gentleman here about the limits to what can sort of be shared sort of under a sharing economy model. The question about like, how do we give our consumers a better sense of ownership sort of in a sharing economy platform? And then finally the question about like, what are the realistic middle grounds between the two caricatures that I painted? So I'm going to let you guys sort of duke it out. I mean, I was hoping that you would start throwing things at each other at some point. Since we haven't gotten to that point, I'm just going to sort of turn it over to the floor of you to sort of take us out. Okay. What's your story in government? Government, well, you know, I think governments have a huge role to play in just making sure that everybody in society can make a livelihood and be sustained. And I think at some point, governments have just got to realize that certain legal entity structures are doing that a little bit better than others. And so cooperatives, I'm really hard pressed to think of really any type of business that can't or shouldn't be a cooperative. I think you could have a shoe company that's owned by the people who buy the shoes. You could have an Airbnb that's owned by the users or just the hosts. Just it's fun to get creative and think of what's possible. What the government can do, we need to change securities laws because right now if you're not an accredited investor there are a lot of barriers but I don't want to say that there are too many. I think people, every day people can sort through these laws in fact and do direct public offerings, use the new crowdfunding law when it's implemented and we can advocate in each state for crowdfunding laws that are narrowly tailored to the things that we want to do. Crowdfunding laws to finance solar projects, to finance farmland purchase, really anything. So hopefully everybody in this room will think of themselves as an investor no matter who they are and think about investing in entities that are going to generate the most wealth for your own community. I'll just add two quick things to that. One is that we measure gross domestic product, gross domestic product which doesn't include the $76 billion of transactions that happen on eBay. We don't measure gross domestic productivity and if we started doing that we'd actually begin to have some of the numbers to map some of these things. The second piece you asked about should you work with these companies? I think that's great. I think the ideal is that these companies are giving back by actually making the services available in ways that are beneficial to the community and a big challenge is actually the interoperability of them and that's a piece that we have to kind of work towards. Yeah, Mike, Lisa. I would say, well I agree with those two comments so no fighting so far, sorry. I think you can do both partner and explore not not, right? But I think the whole idea of one of my personal frustrations about the so-called sharing economy companies is that we don't share. And so, and I've been pretty vocal amongst us kids but I'm now saying publicly that the challenge is for somebody like you to come and say, wait, if I could just tap into the waste within the network or on aggregate value of all these sharing economy companies you could provide all this extra value. And so I think that that's a challenge that we as sharing economy companies should take on but I would say that one of the things that I think is an artifact of the VC funded winner take all I'm a unicorn I hope strategy is that the ideology around intellectual property and the need to be the winner often prevents the whole orientation towards building an ecosystem. And we see that with companies like Airbnb and Uber who are actually building their own reputation systems and all these things that the smaller companies will end up outsourcing and creating a different structure. In terms of the shoe company one of the models that I'm a huge fan of and unfortunately not an investor in is a company called Quirky. They're based in New York. They were started by a lovely guy named Ben Kaufman who himself is a product designer and basically the idea is that everybody can contribute to how products get designed and marketed. And so what they've done is they've created for example these consumer products that in some case 805 people contributed to and it could have been a room just said I like the blue one or why don't you let's use this packaging instead of that everybody gets their name on the package when it ships and everyone who participated and contributed to the project actually get a small percentage of royalty. And that's a system that I think is quite interesting when we look at how that could play out in other markets. The second thing about Quirky is that they were we shouldn't think that big corporations and governments don't have a role in the sharing economy. And so GE for example discovered that a lot of unused value in the form of waste was there are billions of dollars of intellectual property that they invested in over the years but decided they weren't gonna be in the consumer business and so they partnered with Quirky. And about two months ago, a month and a half ago the first product shipped which was called the Aeros Air Conditioner. It's beautiful, it looks like if Apple did air conditioners this is a window air conditioner. It was done by the main inventor from the Quirky platform using GE Aviation Intellectual Property was Dr. Garthyn Leslie who is a 68 year old retired department of energy worker who came up with the idea. It's a brilliant success for both companies. Dr. Leslie got a $750,000 check so it worked out well for him too. So there are these structures that we're again experimenting with and I would encourage all of you to dive in and start playing. Okay, any sort of thoughts, Mike, before I wrap up? Yeah, I mean I guess I would just close and answer the question of are there kind of limits to what can be shared is that I think as soon as you hear somebody say, here's where the line is drawn, the next great company is just right across that line. And we, I'm consistently amazed when you kind of think through, okay what can be shared, here's how it may work and then a company walks in the next day and blows your mind with a completely different way to think about that. And so I think that we will continue to be amazed at the creativity of entrepreneurs to come up with ways to share different pieces of our economy and so that's what makes this whole thing pretty exciting. Okay, I mean I think that we're almost out of time in my sort of fictitious clock. But like, so I just want to sort of close with a couple of thoughts. I mean like, I've had this picture in my mind of a two by two being a business school professor where you sort of got asset value on one dimension and fallowness or inefficiency of use on the other dimension and there's sort of this frontier that sort of, so the more valuable assets can sort of be shared even with a relatively low level of sort of lack of use. And so even if you're only not using your apartment 10% of the time or your house 10% of the time, a market will emerge to sort of share it for that 10% because the asset value is high. On the other hand, for products where the asset value is really small, you're going to have to have a really high level of fallowness like power tools and you'll see sort of markets for those emerge because it's sitting in your garage 99% of the time. And so it makes sense to sort of start to create a market. And I think we've also made a lot of progress in thinking about that middle ground between like the two caricatures that we started with and the Chelsea and her colleagues are sort of spending a lot of time thinking about alternative cooperative models as well. But I like the idea that we were often wedded to this notion that sort of capital only goes after or specialized capital goes after things with multiple objectives. So you've got sort of triple bottom line investors but sort of traditional capital goes after things where like there is no bound on the returns. But if you think about other forms of capital beyond venture capital that we have today, I mean like capital goes after the whole bunch of a spectrum of sort of profiles of return. And it's just up to us to sort of invent the ownership models and sort of demonstrate that they work and that the capital will then sort of follow them. There's a flashing sort of sign here that says please finish. I expect that at some point a giant hand is going to emerge from underneath the stage and pluck me off. So I'll stop before that happens. And so thank you guys for coming and thank you guys for wanting to do stuff with me. Thank you. Thank you.