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David Orban Founder/Managing Partner Network Society Ventures David is an investor, entrepreneur, author, blogger, keynote speaker, and thought leader of the global technology landscape. His entrepreneurial accomplishments span several companies founded and grown over more than twenty years. An early adopter of blockchain technologies and an active Bitcoin investor since 2010, he was the first to own Ether during the Ethereum launch in 2014. He also led the adoption of Bitcoin and blockchain in start-ups and is an advisor and investor in numerous blockchain companies and funds, such as Bitnation, Neuromation, Sun Exchange, Wealth Migrate, Blockchain Capital, Bancor, Swarm Fund, and others
So could you tell me a little bit about I guess what’s happening in New York? I mean, we just heard pretty dire things about the crisis.
Well, the, the, the interesting thing is that a network society ventures is a global firm and especially I personally commune moved to between Europe and New York or the U S in general, typically every couple of weeks. Right. And I will also speak at conferences all over the world. And at the end of February, I was supposed to fly to st Petersburg and add the time I was in Milan. And then I decided it was better not to go and to be even more precise, I was in Bergamo because I have a home in Bergamo when, when I’m in New York and, and we are at the night’s dinner around the table and people ask me, well, where is Bergamo or where’s your home? I invariably point to the bottle of Pellegrino on the table to kind of know that that is where that Springs, right?
So I decided not to go to st Petersburg because I said I’d rather not spend a couple of weeks in a Russian current teen hospitality facility, whatever it would be, and then easily locked down. So for the past two months, I, I am, I’m stuck here. It’s wonderful. And, and as a, as a matter of fact, I was on, on air before the, the, the brunt of the situation arrived in New York. And some, some news you know, agencies picked up the interview that I gave because I was trying to alert the U S in general and New York in particular, or what was already happening here in Bergamo. And the situation was, was really terrible. So many people were dying that military convoys were peaking up the bodies in the night to be cremated elsewhere, 60, 70 military trucks and then coming back for more. And so now Italy is very slowly lifting the the, the heaviest log down. I literally didn’t leave my house for two months.
Well, but I’m so glad that you’re in Italy and not in Russia. That’s right. I expect
To get better. In the U S too. However, with such a large country, such diverse population cultures and behaviors, this is impossible to speak uniformly about what is going to happen all over the place. So I urge people to apply common sense to be very alert because the the, the, the sickness is, is, is real and, and we still don’t know, even if you don’t die from it, what potential longterm effects you have and whether you develop some secondary damage in your organs that appear to be traceable during autopsies and you don’t want that. And so being alert, wearing masks, washing hands, not being in close quarters with many other people altogether that is coming says that everybody should apply.
Fantastic. Thanks for that. Feedback and yeah. I know that Italy was hard here to, and my daughter’s married to an Italian in Australia and
Talking about daughters, my daughter is in Seoul. So the sequence was really mind boggling because she she has been there for many months and, and the Dan I was planning to, to, to fly to visit her. And then after VU hon, Seoul was the second hardest head place and then it came to Italy, then it went to New York. I mean it, it was psychologically really confusing. And, and that is also something that is under estimated how concrete and heavy, the psychological burden is both because either you work in an environment where people are sick or you are running the risk of, of getting sick or because you knew people that fell severely ill or died, but also the financial consequences on anything that you do. And we are all in the, in the same boat, in the, in the sands that we are exposed to the upheavals that are already here and that are potentially going to be amplified as cascading effects may and golf supply chains and complex systems that can be stopped but may not readily restart the way that they were before.
Yes, it’s going to be a new normal I think. Thank you for that. I was wondering if you could tell me what you guys focus on as regards investments.
So I started network society ventures based on my experience with singularity university where I was part of the group that designed it. 12 years ago at the university itself was born from a meeting between Peter Diamandis the creator of the X prize foundation that sponsored the contest for the first private space flight and Ray Kurzweil, the inventor, now director of engineering at Google and the author of the book, the singularity is near about sales modifying artificial intelligence and how transformative its impact is going to be on society. And at singularity university we study how exponentially accelerating technological change is it changing the world, changing business, changing communities and, and, and, and the entire society around us. But I was also able to ask myself what are the consequences if we take all of that for granted.
And I concluded many years ago that decentralization was a natural, unavoidable consequence, which we could already observe in many industries independently being transformed by technology going in that direction, whether it is solar in energy, digital manufacturing, hydroponics, synthetic meat, personalized health, peer to peer learning, blockchain and Bitcoin in finance. Of course I published at the network society manifesto and then we had partners of mine in, in New York. We created our investment firm that looks at how the intersection of accelerating exponential technologies and the centralization creates opportunities where startups can thrive, going with the grain of history going and thriving in an environment that is extremely disruptive, but where they know that the transformation is going to go in their advantage. Great. And so how have you managed to keep investing like during this period of lockdown? And it’s funny because I, I recently spoke with a with a colleague not, not of our firm, but a, of another fund in, in the Valley.
And he was very proud because just the day before they, the documents and he never physically met the founders that were, that they were investing in and, and, and wonderful hats off. Excellent. Then of course, it’s a very successful and procedures firm that has been investing for, for 20 years, but evidently they were privileged enough in Silicon Valley, in the, you know hottest, the investment periods of, of, of ever not to have to think about how to conduct business remotely, how to conduct business digitally. Evidently they would just hop in the car and, and drive to visit their investee companies, sit in their offices, waiting for the startups to show up to pitch. And if somebody was too far and it was inconvenient to drive to them, they would decline to invest. Now, in our case, that has never been like that.
We were always the centralized, distributed geographically agnostic. We would invest in Africa, in Europe, in, in, in everywhere. And, and that is why, for, for us, the question wasn’t what we should be doing differently because apart from the fact that my wife is asking me, are you still here? What are you doing here? You haven’t been home for two months in a row for 20 years. It, the difference is really in, in, in in our investee companies in the portfolios. Are they able to cope with the changes? A friend of mine coined that, the neologism in analogy with pivoting, he says, how are you coveting? How are you adapting the business model, your roadmap, your outlook with Coveo 19 with the pandemic? And so we are asking our portfolio, how can we help enabling them, coveting better? And I think it is a very healthy exercise and, and necessary, you know, vitally so in, in many cases. And and I’m, I’m glad to say that most of them are, are able to adapt even though some of them are, you know, in in businesses that are extremely impacted. And, and, and some of them may not make it but in, in the world of investment that is that is also part of the game.
Yes, exactly. So how do you think like what I’m hearing from you is that this is par for the course really because of the way you’ve set up your investments. And I’m wondering though, generally speaking, how you see the whole investing scene for the next 12 months because it’s obviously hard to predict. I know but you know, everyone’s in sort of still in a state of shock of how different life could be as it has been for the last few months.
So, so network society ventures invests predominantly at the seed stage or even pre seed stage of startups. And one of the most important questions that we must ask ourselves to get to with our investee companies or the companies that we decide that we are about to decide that we want to invest in is how are you going to go about raising your next round and around after the next and so on until your liquidity event. And obviously we are there to help, but fundamentally it is the healthy growth of the business that must prove itself in the financial markets in front of those investors that are specialized in a rounds or B rounds or or whatever other stage of the growth of a, of a startup. And that is where the really tricky questions start arising because it is easy for me to say I am not impacted.
I have the ability and the desire and the means and, and, and all the processes in place to keep investing. And, and then I look out and ask myself, okay, a community of eight round investors, how are you feeling? And then they ask, okay, community of be around investors. How are you feeling? And as soon as, at any point, one of the components of the virtuous circle stops operating or behaving the way that that would be otherwise expected. There is a cascading effect. And, and I could be forced to decide not to invest because of the fear that there would be a difficulty in raising the next round. So typically we don’t eh leaned investments or, or if we do, we do like to syndicate and typically we are very explicit with the startups to made sure that they understand that that we are specialized in, in, in seed and it is explicit with with not only them but with the next round investors that they may be in conversations with further on so that there is no negative signal around that at all.
But as of right now, we are having a internal conversations, how to adapt our model and thesis so that we could counter act the potential freezing up of, of investments at some other stage. So we are looking at our own network to see whether we should be adapting our model. And, and do a further investment rounds. Exactly. In order to preserve the investments that we already did.
Understood. so how do you think like how do you think we’re all gonna move forward, the startups and the investors with this very like this big circuit surprise, this big shock and then following that, trying to create a new normal what do you think are the things we need to watch out for? Like the dangers and what do you think at this point you do you see the opportunities?
So, so I think it is important that everybody considers not only whether it is possible, but it is desirable to go back to where we were before. Many of the challenges and the tensions that were really building up in society were brought to the surface by the pandemic. But actually they have been brewing and accumulating for many years, even decades. And it is the, the, the, the difference between radical social changes happening or economic changes. As a matter of fact that happening in the past, that that are the result of, of all these tensions being eliminated through bloody Wars and revolutions or today where as a consequence of the pandemic and the common enemy that the alien virus represents. Well not the alien but alien, the us humans that that gives us the chance of confronting these stanchions without having had to resort to two Wars and revolutions.
So that is the starting point point I think. And also the shock that all of us are feeling is in many ways liberating because it allows us in conversations with ourselves and with others to, to do away with the dogmatic views that we were parroting, assuming they were true, but without having necessarily examining them from first principles. So we are really able to ask, ask ourselves, can we have a new economic model? Can we have a new social contract? Can we build a different values? And one of them, and it is a principle very close to to, to, to network society ventures, which itself is a, is a benefit corporation. And I may explain what that means. If some of our listeners are not familiar with it, it is is sustainability for too many, too long. We pretended that we could count out to marketing and greenwash our companies and then the initiatives pretending to want to be sustainable without actually putting in the hard work.
And now I think everybody realizes that sustainability is not only loving a pop or, or not killing lions. It sustainability is building and maintaining complex structures for the long term where the resilience and the robustness of the system that is able to withstand extreme variations of the parameters of functioning is approve that we can test in practice. So those organizations that are going to be born during the pandemic and out of the lessons of the pandemic, our module better suited to withstand whatever a future shock is going to come regardless of its source, whether biological or AI or, or economic or, or military, these sharks are going to come. And if you build your initiative, project business startup on those principles, you will be better positioned to be able to withstand those shocks than not the organizations that are not going to make it already today.
Right. so one last question. This is fascinating to me but is we’re all been in self isolation for a couple of months. And here in California we’ve got it definitely for another month till the end of may. How do you think that’s going to affect the ecosystem with people having to spend time by themselves and not have that distraction of and the buzz of other people and other people’s ideas and stimulus. How do you think that’s going to affect us generally
As an investor? For me it is fundamental to think about the physical and the mental health of founders. Often these are very young people who are told to burn themselves on the altar of success. And that is so wrong that from a human point of view, and it is preached by ecosystem participants, whether, you know, a law firm or an investor or their peer, whoever they are, who don’t realize that it doesn’t matter if you make it on average because anybody who lose in the meantime is Iraq irrecoverable. And whether it is due to a simple quotation marks, nervous brag, breakdown or it is leading to suicide, you must not drive somebody to those extremes of, of South neglect. So today the opportunity is for everybody to experience certain deprivations, certain degrees of, of trauma and to, to be able to observe how they themselves react and to analyze those emotions, analyze those reactions, and then decide how they want to face those about themselves and how they want their fellow startup ecosystem participants to to, to, to feel.
Because we can support each other and, and, and keep each other well, or we can ignore each other’s issues and then everybody loses. So, yes, I am. I am very much on, on the side of, of sharing frustration, sharing defeat sharing the, the, the drama that is the daily life of all of us including our weaknesses. And I, I am privileged of, of, you know, having a thick skin. So, so I can afford, for example, to cry. I know I can afford to cry because I don’t mind the showing of weakness because I know I’m strong. And by showing that superficial weakness, I am transmitting the sense of, of fundamental strength to the others, letting them understand our humanity and the, the, the, the, the joint thrill of making it together at the end and the thriving together as humans.
Fabulous. That’s a very nice, a little equate. Thank you so much. Look, absolutely delightful to talk to with you today, David. And I look forward to hopefully more in the future. Certainly I guess when things settle down, it’d be good to circle back and have another discussion.
Wonderful. And if any of our listeners want to reach out, I am very easy to find online. Just Google my name and I am a very liberal in all channels.
Fantastic. Thank you so much David, and all the best for the new normal.
Thank you. Thank you. And bye. Bye.