 Hi everybody we're back this is Dave Vellante and we're here with Fred Destin VC extraordinaire from Atlas Venture. Fred welcome back to the Cube. Thank you very much. Good to see you guys a great event you know a lot of entrepreneurs here and I really think it's fantastic what you guys are doing for the community. So this was started by Jeff Fagnan at Atlas and Hemant and Andrew at General Catalyst and the idea was that the technology industry in Boston doesn't give enough back to the community so we started TAG as a way for the technology industry to get involved with local projects and in particular around education in a city education etc. especially when you can leverage technology. Yeah so so let's get into the technology discussion what are some of the things you're tracking what are the big trends you're seeing in big data or in general. So you know my partner Chris Lynch has been trying to plant a flag around big data in Boston and big data is a little bit like cloud six years ago which is people get lost in the in the mix between the concept and the actual reality of what big data means. So it's such a buzzword now that it's kind of gone past beyond beyond the hype curve and people wondering what can actually be done with big data and is this the next bubble. Well I work with a number of companies that actually make big data real and it mostly has to do with real-time you know big data gets really exciting when you have to deal with real-time issues. So have one company in the portfolio called Recorded Future. Recorded Future deals with large government agencies which you know typically go by the name of agency A, agency B, agency C but where you're effectively trying to help operatives behind the lines or people looking after the security of people like ambassadors deal with real-time issues around security and so what they do is they harness business intelligence at the scale of the web and help you understand location places and people and whether there are security issues that are emerging through social networks in Arabic through social networks in whatever language you want and kind of help protect key executives operating teams on the ground etc to make sure that they can carry out the mission whether it's diplomatic or military in a way that's safe and secure. So that's the example of Recorded Future as a way of people that are applying big data real-time data analysis on a very large scale to help in this case use government kind of carry out this mission in a good way. So I want to ask you a question about that so you know every year I look back and I say are we more or less secure than we were last year and it's like teams like the bad guys are just on our tail again so you're talking about an example where you're actually using analytics to predict as opposed to where most people react to events do you see this as a means this approach as a means to sort of keep pace or can we actually close the gap and become more secure and safer as a society. So I think security in general is an arms race and if you look at actually today is a fantastic day to talk about this so the New York Times led with a fantastic editorial about how they've been hacked by what they believe to be Chinese military hackers that have been hacking into the system for months and instead of trying to block the attacks actually let the attacks happen and then mapped how these people spread across their networks and then called called the first response security companies to help them track what was happening so and then the Wall Street Journal followed suit at 4 p.m. today with a similar story of how the Wall Street Journal had been targeted by military related Chinese hackers as to how they were reporting on China reporting scandals and issues related to leadership so I think what you're seeing is the the weaponization of technology including by governments to target US interest whether it's corporate or government and you know this is not there is no absolute response to this so security is a continuous arms race where you use a number of toolbox and you know big data plays a key part because you actually cannot link an IP address from a Chinese attack back to a Chinese attacker what you can do is link them to a number of hundreds of computers in American universities that you know by reconciling the data you can tell are in a pattern are on a pattern basis are related to previous Chinese cyber attacks and so without big data and without the analysis in real time of lots of log information you would not be able to derive any conclusions from what's happening to New York Times Wall Street Journal or two years ago the NSA and Google so this is what so-called advanced persistent threat you know it is a national security issue and it's something that can only be solved by real-time analysis of data and it is a it is an arms race because the bad guys have big data too let's talk about ad tech it's it's an area that's obviously gotten a lot of money because there is real business value there you know some people like Jeff Amabacher said things you know sort of derogatory statements like the best minds of my generation are trying to figure out how to serve up ads but in the reality it's a good business what are you seeing in ad tech and do you have any you know portfolio companies there and any interest there so commenting on Jeff you know you can take a societal view and say that America was built on commerce and marketing and you know is that a bad thing I mean I don't know it's just the reality of the US what we do it's got to what you guys do right so in ad tech I think same thing the first generation was built on cookie targeting and it's very blunt and so what's really interesting now is can I buy advertising in real time not targeting media so say CNN.com or your property but targeting an audience that's moving very fast across the web so if I have a changing audience and I'm throwing hundreds of variables at you really the only way to deal with accurate targeting an online environment in real-time bidding is big data right so we have one company that's called data zoo that helps people that helps very large advertisers deal with real-time decisioning on their overall advertising spend and it's actually a derivative of missile guidance systems how do I track a moving plane through wind and rain so that I can hit the target well there's the same problem is if I throw a 400 moving variables at you how do I make decisioning on individual impressions so the fundamental big data issue came out of US military is being applied to US marketing espos we have another company called integral ad science and so integral ad science is trying to deal with when you buy media online and you're buying a billboard let's say is your billboard facing a wall or is it facing the highway so there's a massive industry in online advertising but people don't know the quality of what they're buying and by buying an ad that's below the fold or above the fold is my ad next to porn or is my ad next to appropriate content is there fraud click happening on my advertising to drive up the CPAs and so we have a company that is using real-time contextual analysis to help people decide whether they should be buying ad inventory so think of it as your proctor and gamble and instead of blindly spending your ad dollars online you want an insurance policy that tells you I'm buying it on appropriate sites it's above the fold it's being showed not in Brazil between 12 and 2 but in Oklahoma between 8 p.m. and 10 p.m. which is my target and it's being showed in a way that's appropriate to me in other words the brands that are adjacent to it kind of fit my my my positioning in the market so again this is an example of a practical example of take real-time data take a big data problem which is contextual analysis and create an application that helps advertisers do their job better yeah and it seems the great description by the way it seems like the tech breakthrough there is to be able to take I'll put in quotes transactional data and feed an analytics database in near real-time is that right is that concept you know roughly proximate to what people are doing so I think that's correct so if you look at data zoo they provide decisioning information to the tune of hundreds of thousands of buying decisions per second and so you're looking at fundamentally you know how do I scale this thing through no sequel databases and highly efficient decisioning engines and big data analytics and at the same time provide a business value that is not reporting it's not after the fact I'm helping an advertising make buying decisions in real-time and the real challenges in a real-time world you know we all know social meters real-time inferences real-time how do I help the advertisers kind of espouse that world and actually make money a fit in a way that is contextual and relevant to the users and so I think that's a shining example of it didn't used to be cool big data but fundamentally this is not about algorithms it's about funneling gazillions of data points into machine learning environments where we're real-time adapting to what the market needs and wants and so this is a classic big data example you know when I first met you I interviewed you at Atlas venture and you made a statement to me that I haven't forgotten I was asking you about East Coast West Coast and sort of the difference and and and you guys gonna try to compete with the West Coast and you said it's pointless the West Coast is a vortex you know and in a sort of a universe on its own and we in the East Coast really have to identify our own persona and focused on what we do best and those words stuck with me then of course you guys land Chris Lynch so I gotta ask you first of all how'd you land a guy like that how did you convince him to come from an entrepreneur and an angel into this world of VC it's a it's a great question so Chris came to us as an EIR in between two gigs and he was looking at getting into his next play and he was particularly focused on big data and so we identified together a company called the Vertica and Chris was about to give up on Vertica and I remember driving down from New Hampshire with my partner Jeff and Jeff was on the phone with Chris convincing him to take a deeper look because he said look it's a it's a difficult company it's a damaged company but there's awesome tech and some great founders there's an asset you can work with and we had no ability to invest in the company and I think Chris went back into Vertica dug deeper on the back of that call ended up taking the CEO role made a lot of money for himself a lot of money for investors made everybody happy build a real company in the process by the way and then he came back to us and said look you didn't try to sell me your stuff you tried to do the right thing by me and I think there was a fundamental kind of trust relationship building the exercise that happened now that was only step one because Lynch is a guy who's raised 150 million bucks and returned something like 7 billion so to land the whale you know took a long time so there's a lot of relationship building and a lot of I think he's a he's a kid from Yonkers done good right so this man is somebody who's made you know a few hundred million dollars whatever his worth and he's a kid from Yonkers and you know he doesn't take shit he doesn't appreciate ego and at the same time he still wants to learn and so you had a unique mix of skills where you have a loudmouthed individual who could feature in the Sopranos mixed with an exceptional executive mixed with someone who wants to learn and I think there was we didn't actually try to sell him we tried to build relationship and see whether there was mutual fit and at the end of the day you know we took we took both our foreheads and shook them together and said we're gonna make this happen together which is typical Chris Lynch kind of activity and he decided to come on board instead of joining a number of firms that it worked within the past and you know Chris is a hand grenade on the table he's a phenomenal talent and he's a guy that we love and I think he's kind of learning what it's like to be patiently dealing with entrepreneurs instead of running the show and so he's going through this transition from executive to investor and as an investor we're finding many spectators of great entrepreneurs and I think he's doing that transition well and you know I I think he's gonna be vastly successful and he's an awesome guy and we're very grateful to have him here well certainly makes your world in our world more interesting making money for yourselves making money for investors making money for entrepreneurs and giving back to the community Fred Destin thanks so much for taking some time on the Cube it's always a pleasure thank you David it's a pleasure and thanks for watching everybody we'll be right back after this word