Yuri Milner: Genius Investor or Gold Rush King?

Russian investor Yuri Milner, the man behind the aggressive venture group Digital Sky Technologies, tends to let his money do the talking. He doesn't make a lot of public appearances, but his significant investments in companies such as Facebook, Groupon, and Zynga — usually at very high valuations — are one of the driving forces behind the current wave of speculation around Silicon Valley and beyond.

His tactics, which seem to focus on buying into high-profile startups at almost any cost, have grabbed headlines and upset some of Silicon Valley's longer-standing investors. In particular, they focus on moves such as his offer of $150,000 to every company coming through Y Combinator, whetheror not he's seen the business.

There were thus high expectations when Milner showed up for an on-stage interview at the Abu Dhabi Media Summit. It doesn't seem to have gone well.

By all accounts, interviewer Jeff Randall—a seasoned British journalist who covers the business beat—struggled to elicit much from a monosyllabic Milner.

"worst" tech interview subject ever?

"Curious," tweeted one audience member. A "car crash," said another. David George-Cosh, a Canadian reporter with the National newspaper, went even further: "I strongly believe Yuri Milner is the worst interview subject in the history of the technology business."

The crowd stuck with it because they all wanted to know the answer to the question everyone asks about the DST boss: What can he see that we can't? From what Milner did say, the answer seems to be "not much." Milner has a fairly good track record online. After a string of failures and moderate successes in Russia, he built Mail.ru into the country's largest website. But his strategy seems to be the simple notion that bigger investments deliver greater rewards.

Here's a mixture of direct quotes and paraphrases taken from reports of the event:

"It's not about revenues: The fundamental economics in digital business is scale and margins. The top line has become the bottom line."

"We have to be near the younger entrepreneurs because they are more disruptive." By the time they reach 30 or 35 there are other factors they have to take account of in their lives (like families).

The adults of tomorrow will have fragmented attention spans, multitask, process more information, and be interactive as a group.

"Amazon will be the largest retailer in the world in 20 years."

The next big trend will be curation. The amount of information online is like Moore's Law, it's doubling every 18 months. In the future, 50 percent of our consumption will be driven by personal networks, 50 percent by algorithms.

"It's not how much something's worth today, it's what it's worth in five or 10 years."

"There are a probably a total of 25 companies in the world that fit our investment criteria."

When do you cash out? "I think you should at least wait until they go public," he said. "When the founder starts selling, you should start selling as well."

Not All DST Recipients Are Young

In a lot of these cases, it's hard to see how Milner's advice aligns with his actions. Younger entrepreneurs? Sure, Mark Zuckerberg and Groupon's Andrew Mason were young when they started. Zynga's Mark Pincus, however, is 45.

And the idea that just 25 companies fit his plans? Given that Y Combinator is putting 40 companies through in its latest boot camp, that seems odd—unless you count Y Combinator as an umbrella company for all the others. (I'm not sure Paul Graham would like to see it that way.)

Or when he spoke on the subject of exits? Well, none of DST's investments have turned into exits, despite the fact that—particularly in the case of Facebook—some of the founders have been cashing out for years. In many cases, that's specifically because of the money DST brought to the table.

Milner's further insights seem fairly straightforward: Fragmented attention, multitasking, and Amazon's continued success don't seem like radical bets. To be honest, I'm not sure what to make of it all.

Perhaps the real difference is not what Milner sees, or whether he follows a guiding philosophy in picking his investments. Maybe he sees the same things as everybody else, but is happier with risks others shy away from. Perhaps it's just that when he sees an opportunity, he's willing to pay more than others to be part of the game.

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