this week even in expensive california, there are tax breaks for the right companies. we'll take a look at opportunity zones with venture capitalist marlin nichols. and invaluable advice for silicon valley start ups looking for funding. randy kamazar. our reporters from the los angeles times wendy li and the wall street journal this week on "press here." good morning. away may be in the middle of one of the longest economic booms.

prosperity is not equally distributed. we watch some people protest against new jobs and opportunities in san jose, other areas are waiting for a piece of the pie. it was with that in mind that then president obama signed the jobs act, it included a paragraph about opportunity zone. invest in a disadvantaged neighborhood and get a tax break. there are lots of opportunity zones along the water front along the coliseum, as well. marlin nichols is poring his money into oakland. he's a venture capitalist with cross culture ventures. one of the latest inventors is a maker of beauty products for women of color. he's here to explain opportunity zones and lay down rules about investing in underserved neighborhoods. joined by the wall street

journal. we'll start with the basic of opportunities zones. explain what these rules are. >> sure. one correction. >> sure. >> it doesn't manufacture beauty products. they're a platform around hair styles that sell beauty products. >> fair enough. thank you very much. >> opportunity zones, like you said, part of the jobs act. it's an incentive for investors like myself to pour money into businesses that are located into these opportunity zones, which are typically in the community. how do we know something is an opportunity zone. >> it's a local and federal partnership. there are two zones in each county and we pick them by criteria. the income level has to be below the average. >> sure. >> so, again, the porous.

>> i should point out i want to talk about oakland. there are opportunity zones in san jose, san diego, oakland, la. 879 in total throughout california. >> when you're building opportunity zones, how do you prevent against gentification. >> right. you can have folks like our fund we typically invest in diverse founders and communities. we see an economic benefit to doing that. there are others probably going to look and say, hey, if i do this thing, i can get a tax break. all right. how do you prevent the bad actors from taking advantage? and i think it's going to be up to the local government, actually, to put in place rules and regulations that, you know, fit on top of the federal law that has been set. some of the things that need to be put in place are you have to invest in a business that is

actually starting that that community. if it's starting in that community, chances are, they have to hire from that community. if you hire from the community, now you have the residents making increased wages and becoming a part of next wave of technology and industry. as opposed to bringing new folks in and moving the old folks out. >> can they have the local hire laws to ensure people are from that community? >> i'm not sure how exactly, you know, you would implement it. right. >> yeah. i was going to ask the same thing. i mean, gentification, depending on how you describe it, i mean, we've seen particularly in san francisco how it pushed out people who have lived there for years and young people from other parts of the united states have come in and run rent up. but how would you prevent, if you bring in investment and it succeeds and the buildings start to go up and then the little coffee shops starts at the

corner and the bike store and the things that are a sign of gentification. how do you prevent that? because isn't that almost exactly what you're trying to do in the first place? >> well, it's that old saying. right. teach me how to fish. >> yeah. >> creating things like training programs around coding. right. making it, you know, implementing maybe daycare facilities so that the locals can actually attend these coding classes. and then provide further incentives for these businesses to hire locally. i think these are some of the things that, you know, local governments can consider. >> sure. >> have you seen this succeed in other areas outside? >> well, it's brand new. right. hasn't been launched yet. we're waiting for the detail criteria of how you self-identify as an opportunity zone fund. which was expected to be released sometime this summer.

but we're still waiting. so jury is still out. >> is it a problem that the trump administration now is overseeing this? >> i don't know. right. i think this was a, from my understanding, it was a bill that had bipartisan support. so i wouldn't expect that the administration would be slowing it down. it's something that, you know, both sides of the aisle wanted to have yeah. it's complicated, though. maybe it's taking time to figure it out. if we want to get it done. >> tell me about your rules as far as avoiding gentification. i saw some hire locals is one of them. accelerate local entrepreneurs. i thought it was another. it was something that tech companies don't do very well. the twitter comes at the obvious kpac example of that. it was criticized. and they criticized that if the

employees there weren't going to the local restaurants, because they had a cafeteria. there is an opportunity if you move into a neighborhood and somebody says, well, wait a minute. i could service this new organization. that the organization themselves could take those people in and say here is how to make a business. we can help you. i think it's a fantastic idea. >> yeah. so go back a little bit to how the zones were, you know, were decided on. and one of the criteria was that it has to be an environment that would make a new business viable. and they define that by saying you have to have at least 30 other businesses in that zone. >> right. >> and so there are, obviously, businesses there. and so, you know, part of what the local government might need to do is say, look, if you're begin to do catering, as an example, then, you know, x

percentage of the catering jobs you do, need to come from the local vendors. right. because this only works if you actually create a robust entrepreneurial eco system. right. it means that one business has to, you know, be a patron of another business and so on and so forth. >> i want to ask you about maven. i've heard about maven when i worked at the chronicle. i'm, you know, i thought it was an interesting business. very unique. and it's founded by a person of color. >> uh-huh. >> and, you know, often times when investment community gets criticized for not funding enough businesses run by people of color. founded by women and i wanted to get your thoughts on that in terms of how maven is going and what you know what you would like to see happen in terms of the investment community. >> yeah. >> and supporting these local

entrepreneurs. >> that's something that is near and dear to our hearts. 66% of the portfolio are black, brown, or women-led. we get there not only by investing in people of color but challengeties and communities we care about. so we end up, you know, in a great company like maifb. they're doing incredible things. you know, the korea sis for us around the maven investment was they're targeting underserved air stylists. and the thing about that, hair styles that operate under certain communities said they can't afford to carry because they could go bankrupt. maven has the know how to know how much of the product to order and keep on demand and it corks directly with the hair stylists to sell the instructs. they take a portion of the proceeds and now they're gaining product revenue as opposed to just service revenue and growing

their business. it's a symbolic relationship and it works out perfectly. >> let me ask you about one last question about that. there's a criticism particularly in san francisco that a lot of companies that are building are things grarm how it goes. but thing our mothers used to go for us is now an app or something along these lines. kids come into san francisco and create something their mom used to do for them. money doesn't know, necessarily, what is needed in the communities. venture capital doesn't know what is needed in communities of color. they don't know what would work or what kind of problems need to be fixed. i'm assuming cross culture helps that. >> yeah. part of that disconnect is that you don't have people that look like me in leadership roles. right. one way to solve the problem is hire more black and brown

people. and obviously more women. right. with lived experiences that come from the communities that understand the challenges. when a machb walks into the door and starting the challenge or the opportunity that they're up against, you have someone sitting around table that will say i understand it. i don't know that, you have to see it. one of the things he did he took his investors on a tour of oakland and check out some of these will salons and said this what what i'm talking about. >> marlin, we appreciate you being with us. advice for sol con lal riley start ups.

welcome back to "press here" there are a lot of venture capital firms in the valley. the "new york times" called this silicon valley's most famous venture capitalist firm. we dragged out the old tape from storage. it's netscape. it invested in names like google and twitter and uber and amazon.com. he's partner at cliner perkins. he's writing books.

his latest is "straight talk for start ups." before that he was a baker, janitor, and caught economics at a cooking school. really? >> yeah. it was night school. >> desperately needed to cook and understand simultaneously. >> i guess. i guess. you teach through your books. it's hardly your first. how many do you have? >> four. >> and one of the most famous is -- >> yeah. that's probably about the heart and soul of entrepreneurship. it foretold the bust. >> i have a question for you in venture capital industry. have you been criticized for funding mostly male and white start ups.

i look at your investments and i saw all eight were founded by men. i was wondering do you see it as an issue? what are some steps you're taking to try to address this? >> i think it's an issue as a industry for the whole. i have invested in women-led in other companies, as well. unfortunately you don't see them in the bio because they weren't as successful. i don't attribute it to the fact they were women. as a whole, the industry isn't adds inclusive enough. we need gender diversity and color and age. >> what do you want entrepreneurs to take away from it? it has a lot of facts in there. if i'm an entrepreneur out there and they're trying to pitch a venture capitalist today, what should they know walking in the door? >> the book was written because we had seen so many start ups

ignore or simply not understand the best practices of entrepreneurship. which have been built in this value for 40 some odd yoords -- years. the idea was to keep people from crashing their cars. you shouldn't be surprised if young people, in particular, but entrepreneurs who go out and build businesses, you know, in the old days we taught somebody to drive in an old honda. we wouldn't be surprised if it came back dinged. the process is the same but the consequences are greater. >> does your metaphor include the evaluations? if are you giving too much money

to new firms and new entrepreneurs and giving them millions when you should be giving them hundreds of thousands? >> in my experience, more start ups fail from indigestion than starvation. the capital likes the scale. but entrepreneurs need to scale in more a methodical way. they need to prove their business and discover their business over time. if we force too much money on them, we can force them to ignore the information coming bang and the opportunities to pivot and refind their business. leading to fa leading to failure. >> i think i found an interview with you with cnbc, you were talking about too much money in the system. there was something like 2014. if there was too much money, too much venture capital. what is it like now? >> well, it's worse. since 2008, we've seen interest rates so low that almost every fund is trying to juice their

returns on gaining venture capital. without understanding the risks. we're ignoring the road kill that happens in the system. i think they're not properly valuing the risk in their investments. if you have an insider view of what is going on today and you were investing capital, i think you would want to put a bunch of your capital outside. >> do you think we should talk more about failures. you mentioned your own portfolios. it doesn't show the female-led companies that didn't do as well. do you think that -- >> i talk about them all the time. in the longest times in the early 2000 it was -- now i'm the luck guy. >> think it should be listed in the portfolio? >> i don't know what it'll tell you. i think we need to understand

this is an industry of value. over 70% of the investments we make will not turn out the way we want. >> yeah. >> this business operates on baseball odds. right. we need to operate the top 30% of our returns in our portfolio to generate returns for the funds to compensate for the loss in the 70%. and so you need to understand the innovation, if you can't fail, you can't innovate. there's no reason to be in the business if you can't fail. >> we'll continue to talk and need to make a quick commercial break. "press here" will be back.

"press here" is available as a pod cast on itunes. welcome back. we're talking with randy. i learned to fly many years ago, and i noticed it's in the book, as well. and i've taken there are amazing lessons in learning to fly that can be transferred to whatever it is you do in other parts of life. and you say that for entrepreneurs, as well. >> that's right. in the book, i talk about the fact you should hire like a pilot going through a very crisp checklist in the process. in hiring, this is addressed as an early issue. there are a lot of implicit biases. if you have casual conversations because we all think we are good judges of character. if you have the casual conversations you tend to hire people like yourself. if you follow a very clear checklist like pilots do to

avoid all of the simple stuff that gets in their way. the big stuff they're trained well in. it's the simple stuff that will crash the plane. it will also crash the organization. you end up hiring too many people like yourself. not enough diversity or inclusion. so hiring is if you're a pilot and using a checkbook is a way to compensate for the implicit bias in the system. >> you mentioned one of the issues of silicon valley's age. oifs wondering how you can speak to that? >> well, i think it's the same issue that we see elsewhere in discrimination and bias inside the organization. which is we need to actually measure. we need to understand how many older people we have in the system and how many people are being passed up for promotion. we need to measure carefully. we need to measure all these things in the system because it's too easy for us to ignore them if we try to deal with them

as a wholistic set of demographics. >> many company companies. >> i think it's important. i would love for them to do that. i think there's a whole demographic of older, very seasoned experienced deck workers who are finding it hard to get jobs with the young upstart emerging companies. >> cliner perkins you brought on some new partners. can you talk about where the firm is going and how that's changed >>well, what you're seeing in the firm now i think is a generational change. a number of us has been there for some time. i think that's where we are. i'm excited with the young

people we've got. >> what sort of investments do you think you're investing in? what's hot? i know that's a common question. where do you think there are problems in the world that need to be solved where you night be willing to give money to invest money? >> well, there's a whole list of hot spots in the investing in today, whether it's in technologies like ai or in bitcoin or block chain or whether it's in solving problems like education, health, the horrible nutrition. >> right. i look at the issue of global health as being credibly important. and so we are seeing a lot of investments. they're beginning to track that. but frankly i don't look at these. i wait for interesting people to come to me and tell me great

stories. these are the people that change the world. they're not conventional people. i wait for them to get me engaged in solving a problem i see that they don't see. if i keep looking for my keys under the lights -- let me follow up. i know a lot of young entrepreneurs watch this television show. how do you get through the door to talk to you about the idea you're going change the world? how do you do it? do you pick up the phone and call and say hello, i would like, you know, some time with randy? >> frankly, the best way to get to somebody is through a trusted source. there's people out there who know the sorts of people i like to invest in. the sorts of problems like to

solve. and they recommend people. they get a hearing from me. they've been filtered through the system. it's much harder to come in if you're not part of the network. they're becoming the credibility builders for people without networks. >> we talked about the crazy people. i want to ask about tony. he's one of the top investments. can we talk about he was well known but what did you see from him? what was his crazy idea that made his company work? >> well, i can still remember the day that tony pitched me on nest. i've been a long time friend but he wouldn't tell me what he was doing until he came into the office with the team and sat down and i can remember it was a long table. and he put at the end of the table some object under a black napkin. >> right. >> it was theater.

>> it was. and we went through about i would say 60 slides before i even understood what he was doing. and when he did the reveal and showed me essentially a round thermostat carved out of styrofoam i was crest fallen. >> we'll be back in a minute.

that's our show for this week. thank you.

damian trujillo: hello, and welcome to "comunidad del valle." i'm damian trujillo and today, the history of the spanish language in the united states. we have a professor from princeton university on your "comunidad del valle." male announcer: nbc bay area presents "comunidad del valle" with damian trujillo. damian: we begin with the monthly visit of the consulate of mexico in san jose. with me is consul rodrigo navarro, the consul de protection for the mexican consulate here in san jose. welcome back to the show. rodrigo navarro: thank you so much. damian: it's good to have you back. so, last week, we spoke with the san francisco consulate about the workers' rights, but it's important to repeat it because there are a lot of people, especially here in silicon valley, who are working who are being taken advantage of, they're not getting paid, they're being underpaid.