Live from Disrupt SF 2019 Day 1


>>>LADIES AND GENTLEMEN, PLEASE SILENT ALL MOBILE DEVICES. THE PROGRAM IS ABOUT TO BEGIN. >>>LADIES AND GENTLEMEN, PLEASE TAKE YOUR SEATS. THE PROGRAM IS ABOUT TO BEGIN. >>>LADIES AND GENTLEMEN, PLEASE WELCOME TECH CRUNCH CHIEF OPERATING OFFICER NED DESMOND. >>>GOOD MORNING, EVERYONE. WE HAVE A VERY SPECIAL PROGRAM CALLED THE CUSTOM DISRUPTER AWARD. WE WORK WITH OUR PARTNERS ON THIS AWARD. AND THE LUCKY ATTENDEES THAT PARTICIPATE, CAN WIN LUCRATIVE PRIZES. AND THEY GET RECOGNITION IF THEY HAPPEN TO WIN A DISRUPTER AWARD AT THE END OF THE SHOW. THIS YEAR WE HAVE TWO COMPANIES THAT ARE PARTICIPATING IN THIS PROGRAM, AND I WANT TO GIVE YOU QUICK DETAILS ON WHAT THEY ARE AFTER AND HOW YOU CAN PARTICIPATE. FIRST IS PROFIT DOT CO. USING OKR AND KPI. WINNERS WILL RECEIVE CASH REWARDS UP TO $15,000. AND THE FIRST PLACE WINNER WILL BE RECOGNIZED AND AWARDED AT THE CLOSING KEYNOTE AT DISRUPT. MEANING ON DAY THREE, FRIDAY. YOU CAN VISIT THEIR BOOTH IN THE EXPO HALL TO LEARN MORE DETAILS. IF YOU ARE NOT ALREADY ON TO IT. THE SECOND IS MAGNA. THEY ARE PROUD TO PREVENT SOMETHING CALLED FUTURE MOBILITY DISRUPTER AWARD. THEY WILL GRANT A $10,000 PRIZE AND AN OPPORTUNITY TO MEET WITH THE R & D INNOVATION TEAM. AND THE PRIZE AWARDED AT THE END OF DAY THREE JUST BEFORE WE ANNOUNCE THE WINNER OF THE BATTLEFIELD. IF YOU’D LIKE TO LEARN MORE ABOUT MAGNA’S PRIZE, YOU FIND THEM IN ROOM 208 ON THE SECOND FLOOR ON THE SOUTH HALL. THANK YOU VERY MUCH. >>>LADIES AND GENTLEMEN, PLEASE WELCOME TECH CRUNCH EDITOR AND CHIEF MATTHEW PANZARINO. >>HELLO, EVERYONE. IT’S WONDERFUL TO SEE SO MANY PEOPLE IN THE SEATS THIS MORNING. IT’S ALWAYS NERVE RACKING COMING OUT TO THESE THINGS. IT’S A LITTLE EARLY SO WE CREEP OUT TO SEE IF THERE IS ANYONE IN THE AUDIENCE. AND THERE IS. WE HAVE A FANTASTIC SHOW OVER THE NEXT FEW DAYS. WE HAVE 42 SESSIONS JUST TODAY ALONE. AND WE WILL HAVE SESSIONS OVER THE NEXT COUPLE OF DAYS. YOU WILL SEE MANY PEOPLE HERE ON THE MAIN STAGE. BUT WE HAVE THE EXTRA CRUNCH STAGE AND Q & A STAGES AS WELL. WE FLUSHED ALL THREE OUT WITH WHAT WE THINK IS A REALLY CROSS SECTION OF CONTENT THAT COVERS ALL THE IMPORTANT SECTORS AND QUESTIONS AND THINGS THAT YOU MIGHT BE LOOKING FOR. ABOUT WHAT IS HAPPENING RIGHT NOW IN ENTREPRENEURSHIP. SO WE HAVE DONE OUR BEST TO KIND OF GO HIGH, GO LOW, BRING YOU GROUND LEVEL INFORMATION THAT IS ACTIONABLE, THAT YOU CAN TAKE TO YOUR NEXT MEETING, NEXT BUSINESS DECISION. DECIDE WHERE YOUR COMPANY WANTS TO GO FROM HERE. AND WE WANTED TO BRING IN PEOPLE THAT HAVE HAD SUCCESS AND VIEWING WHAT IT TAKES TO BUILD SUCCESSFUL COMPANIES. WE’LL TALK TO THEM AS WELL. WE WANTED TO MAKE SURE WE BRING YOU THIS FULL SPECTRUM ANALYSIS OF THE INDUSTRY. HOPEFULLY YOU LIKE WHAT WE HAVE PROVIDED FOR YOU. WE WILL BE TALKING ABOUT SPACE, IMMEDIATE Y AND AI. JUSTIN GORDON WILL BE HERE. RAY DALIO. STEVEN CURRY. WE HAVE AN AMAZING SELECTION OF SPEAKERS ON THE EXTRA CRUNCH STAGE AS WELL. ONCE AGAIN, BRINGING YOU THOSE ACTIONABLE INSIGHTS WHICH IS ONE OF OUR BIG AIMS FOR THE SHOW. WE ARE REALLY GLAD YOU ARE HERE. WE ALSO, IN ADDITION, HAVE THE STARTUP BATTLE FIELD. WE HAVE SELECTED A GROUP OF COMPANIES THAT WE THINK REPRESENT A SECTION OF THE HOTTEST, MOST INTERESTING SPACES. WE’VE BROUGHT THEM TO THE SHOW AFTER EXTENSIVE TRAINING. WE’LL PUT THEM ON STAGE IN FRONT OFEST STEAMED JUDGES AND PANELISTS. YOU WILL GET TO SEE THEM PITCH THEIR HEART OUT. YOU WILL GET TO SEE THE JUDGES GRILL THEM. YOU’LL BE ABLE TO SEE HOW THEY REACT TO THAT ON THE FLY. AND WE’LL HOLD THE COMPETITION OVER TWO DAYS. THE FINALISTS WILL BE ANNOUNCED AT THE END OF THE SECOND DAY AND THEY WILL GO ON STAGE AND WE WILL PICK A WINNER ON THE LAST DAY. THAT IS VERY EXCITING. I WOULD LIKE TO PERSONALLY THANK THE EVENTS TEAM JUST RIGHT NOW. THEY HAVE WORKED AROUND THE CLOCK. MANY SLEEPLESS NIGHTS. NOT FIGURATIVE, ACTUAL SLEEPLESS NIGHTS GETTING THIS READY FOR YOU. PLEASE GIVE THEM A HAND. [ APPLAUSE ] IT’S A BIG UNDER TAKING. THANK YOU VERY MUCH FOR BEING HERE. I’M GOING TO LET US GET ON TO THE SHOW. IT’S FANTASTIC SET OF PROGRAMMING AND I HOPE YOU ENJOY IT. THANK YOU. >>>LADIES AND GENTLEMEN, PLEASE WELCOME TECH CRUNCH MANAGING EDITOR JORDAN CROOK. >>WHAT’S UP, SQUAD? HOW ARE WE DOING? YEAH THANK YOU TECH CRUNCH. APPRECIATE THAT. AS THE VOICE OF GOD SAID I’M JORDAN CROOK. LY BE YOUR HOST FOR THE SHOW. YOU MAY KNOW ME FROM PREVIOUS DISRUPTS AND LITERALLY NOTHING ELSE. SO I’M REALLY EXCITED TO BE HERE. I HOPE YOU GUYS ARE TOO. I KNOW YOU ARE ANTSY TO GET STARTED WITH THE SHOW. I’M GOING TO COVER THE NITTY- GRITTY HOUSEKEEPING. IF YOU WANT TO INTERACT WITH ON SOCIAL MEDIA. GO TO [email protected] WE ARE GOING TO GET ALL KINDS OF LAUGHS IN HERE. FOR REAL. GO TO #TCDISRUPT. WE WILL BE WATCHING THAT, MONITORING ITS, IF YOU HAVE QUESTIONS, CONCERNS, COMPLIMENTS. WE HAVE AN AMAZING APP THIS YEAR. AS YOU CAN TELL THERE ARE LIKE, 40 THINGS GOING ON AT ANY GIVEN MOMENT. SO THE APP IS GREAT WAY TO NAVIGATE THE SHOW. CHECK THAT OUT. IF YOU ARE AN INVESTOR, A FOUNDER AND LOOKING TO MAKE A DEAL, GET A CHECK SIGNED, SOMETHING LIKE THAT, USE CRUNCH MATCH. IT MATCH UP INVESTORS AND STARTUPS AND LET YOU GUYS KIND OF CONNECT IN SPECIAL ROOMS THAT WE’VE SET ASIDE. AND IF YOU WANT TO CHECK OUT A TRANSCRIPT OF THE SHOW, ANY OF THE PANELS THAT ARE GOING ON, WE’LL HAVE ONE OF OUR PARTNERS OTTER AI. THEY ARE PROVIDING TRANSCRIPTS OF EVERYTHING HAPPENING. SO YOU CAN GET THE PLAY BY PLAY. CHECK THAT OUT. ON THE EXTRA CRUNCH STAGE RIGHT NOW, WE HAVE HOW TO BUILD A BILLION DOLLAR SASS COMPANY. SO IF YOU WANT TO CHECK THAT OUT, IT’S PROBABLY TIME TO GO. NIARGA AGRAA WALL. ON THE MAIN STAGE I WANT A WARM WELCOME CEO BOB SMITH AND MODERATOR DARRELL. >>LADIES AND GENTLEMEN, PLEASE WELCOME TECH CRUNCH SENIOR WRITER. >>ALL RIGHT. WE’RE GOING TO GET THIS EVENT STARTED RIGHT AWAY. I THINK WE ARE GOING TO WATCH SOME ROCKETS LAUNCH. RIGHT? WE BROUGHT A VIDEO. WE’VE GOT SOME OF BLUE ORIGIN’SSUCCESSFUL LAUNCHES TO DATE. >>>WE’LL JUST WATCH THE ROCKETS. THEY ARE GREAT. >>YEAH, EXACTLY. NOW WE GO. SO NOW YOU JUST SAW LEVIN SUCCESSFUL LAUNCHES. AND NOW WE ARE HAVES A SCAPE TEST. WHY? BECAUSE THIS IS A HUMAN ROCKET. THE WAY TO GET AWAY FROM THE BOOSTER AT ANY TIME. AND LAND SAFELY EVERY TIME. AND WHAT YOU SEE THERE IS A LITTLE PUFF OF DUST THAT COMES UP. EVERY TIME WE LAND ABOUT 1-5 MILES AN HOUR. SO IT’S LIKE SITTING DOWN HARD IN A CHAIR. AND IT SEATS SIX PEOPLE. YOU GET ABOUT THREE MINUTES OF ZERO G EXPERIENCE. WE HAVE DONE THAT 11 SEPARATE TIMES. AND WE ARE GETTING VERY, VERY CLOSE TO FLYING HUMANS FOR THE FIRST TIME. BECAUSE FUNDAMENTALLY WHAT WE’RE TRYING TO DO IS CHANGE THE OVER ALL COST CURVE AND AVAILABILITY OF SPACE FLIGHT. BECAUSE WE KNOW EVERYTHING ELSE GOES FROM THERE. WE HAVE COUNTLESS BUSINESS PLANS THAT ARE ON THE SHELF THAT ARE JUST WAITING FOR REUSABLE LAUNCH VEHICLES INSTEAD OF ACTUALLY IMPROVE THE COST AND THE OVER ALL SAFETY AND AVAILABILITY OF GETTING TO SPACE. ONCE YOU GET TO SPACE, EVERYTHING CAN BECOME POSSIBLE. >>THANKS. A COUPLE THINGS THERE. WHEN IS THAT FIRST PERSON GOING TO GO UP? I KNOW THAT THE TARGET IS 2019. >>THIS YEAR. IT IS TARGETED FOR THIS YEAR. OCTOBER 2ND. >>IT’S GETTING CLOSE. >>HONESTLY, WE’RE IN THE POSITION WHERE WE HAVE TAPPED THE BRAKES A LITTLE BIT. ONE THING THAT MAY NOT BE OBVIOUS TO A LOT OF PEOPLE HERE IS THAT, WHEN YOU GET INTO A SAFETY CRITICAL ENVIRONMENT, GETTING FUNCTIONAL READINESS IS DIFFERENT FROM VERIFYING SOMETHING. VERIFYING YOU HAVE SOMETHING THAT IS SAFE AND READY TO GO IS WHERE WE ARE. WE ARE JUST GOING THROUGH ALL OF OUR SYSTEMS AND MAKE SURE WE HAVE ALL THE SYSTEMS RIGHT. WE HAVE TWO FLIGHTS WE ARE GOING TO DO BEFORE WE GO FLY HUMANS ON THAT. THOSE FLIGHTS GO REALLY WELL, THEN WE MAY BE ABLE TO GET PEOPLE UP RELATIVELY SOON. IF NOT, WE’RE JUST GOING TO GO THROUGH THAT AND MAKE SURE THAT WE’RE ONLY GOING TO FLY WHEN WE ARE SAFE. >>SO YOU’RE SAYING THERE IS A CHANCE FOR 2019? >>I’M NEVER GOING TO GIVE UP PRESSURE ON THE TEAM TO GO GET IT DONE THIS YEAR. IS IT LIKELY? PROBABLY NOT. BECAUSE 2019 IS RAPIDLY COMING TO A CLOSE. BUT AGAIN, WE’RE NOT GOING TO BE DATE DRIVEN. WE ARE GOING TO BE DRIVEN BY WHEN WE ARE READY TO GO FLY. >>GREAT. AND THE OTHER PART OF THAT IS, CAN I BE ON THAT ONE? >>ABSOLUTELY. YOU’RE GOING TO HAVE TO GET IN LINE. >>WHAT DO THEY HAVE? MONEY? >>THEY DO. THEY DO. >>ALL RIGHT. THAT’S GREAT. LET’S TALK ABOUT WHAT IS THE PROGRESS HAS BEEN ON NEW GLEN? WHERE ARE YOU ON THAT? THAT IS YOUR OR OR BUTTAL ROCKET. >>IT’S TO GET SPACE TOURISM AND PAYLOADS. BUT IT’S ALSO THERE TO DEMONSTRATE ALL THE FUNDAMENTAL TECHNOLOGIES THAT WE NEED TO ACTUALLY GO FLY NEW GLEN WHICH IS OUR OR BUTTAL VEHICLE. WE’RE TAKING ALL OF THAT AND APPLYING IT TO OUR NEW GLEN VEHICLE. THE NEW GLEN VEHICLE IS A MASSIVE VEHICLE. AND IT’S WELL OVER 300 FEET TALL. JUST THE FIRST STAGE IS LARGER THAN MOST ROCKETS ON THE MARKET TODAY. WE ARE GOING TO LAND THAT FIRST STAGE, MUCH LIKE YOU SAW HERE, ON A MOVING SHIP. WHICH ACTUALLY GIVES YOU A LITTLE BIT MORE STABILITY AND ALLOWS YOU TO GET A LITTLE FURTHER CROSS RANGE. BUT AT THE END OF THE DAY, WHAT WE’RE TRYING TO DO IS THE EXACT SAME THING. CHANGE THE CROSS CURVE IN A VERY SUB CITITIVE WAY. AND 75% OF A COST OF A ROCKET IS ACTUALLY THAT FIRST STAGE. SO IF YOU REUSE THAT FIRST STAGE, YOU ACTUALLY HAVE FUNDAMENTALLY CHANGE WHAT YOU ARE ABLE TO PROVIDE. WE’RE IN THE DESIGN PROCESS NOW. WE HAVE PRODUCTION, HARDWARE, FLIGHT HARDWARE NOW DOWN IN OUR FACTORIES. WE BUILT OUR FACTORIES DOWN IN FLORIDA. AND STANDING UP OUR LAUNCH PAD. WE WILL HAVE OUR CRITICAL DESIGN REVIEW WHICH LOCKS IN THE DESIGN AT THE END OF THIS YEAR. WE HAVE A SERIES OF REVIEWS GOING ON RIGHT NOW AND STILL TARGETING 2021 FOR THAT FIRST FLIGHT. >>THAT IS THE FIRST TEST FLIGHT OR FIRST COMMERCIAL FLIGHT? >>IT WILL BE A COMMERCIAL FLIGHT. >>AND WHAT ARE WE LOOKING AT FOR COST FOR THAT? ESPECIALLY THE INITIAL ONES. I IMAGINE THE COST WILL GO DOWN. >>YEAH. THE COST CURVE WILL BE BASED ON THE FACT WE HAVE A COUPLE DIFFERENT THINGS. ONE, WE HAVE A REUSABLE AND EXPENDABLE FIRST STAGE. AND THE SECOND THING IS WE HAVE THE ABILITY TO DUAL MANIFEST. ONE OF THE THINGS WE HAVE IS A SEVEN METER FAIRING. WHICH IS LARGER THAN ANYTHING ON THE MARKET. WE CAN TAKE TWO VERY LARGE COME STATS AND PUT THEM STACK TOGETHER. >>THERE IS A LOT OF SPACE WORDS HERE. >>YOU CAN ACTUALLY GET TWO COMMUNICATION SATELLITES AND PUT THEM ON THERE. TWO VERY LARGE SATELLITES. AND THEREFORE BE ABLE TO GET EFFECTIVELY GIVE THE SAME PRICE. >>A TWO FOR ONE DEAL. >>A TWO FOR ONE DEAL. EXACTLY. AS WELL AS THE FACT FUNDAMENTALLY OUR COSTS ARE DIFFERENT. SO IT WILL BE INCREDIBLY COST COMPETITIVE. >>SO WHAT IS — WHY ARE SOME LEGACY PLAYERS STILL AIMING FOR FULLY EXPANDABLE VEHICLES? AND I KNOW THAT MITSUBISHI THEIR NEXT ROCKET IS TARGETING A $50-$60 MILLION LAUNCH. AND YET A FULLY EXPENDABLE VEHICLE. SO WHAT IS THE DISCONNECT? WHY IS THAT GOING ON SIMULTANEOUS TO BLUE ORIGIN? >>I THINK WE ARE IN THE PERIOD OF TRANSITION WHERE THE BUSINESS MODELS ARE ACTUALLY GOING TO HAVE A DIFFERENT RISK POSTURE. SO WHAT I MEAN BY THAT, YOU HAVE IN ONE CASE A REUSABLE ARCHITECTURE. REUSABLE ARCHITECTURE WILL BE CHEAPER. EFFECTIVELY YOU ARE NOT THROWING AWAY THIS HARDWARE EVERY TIME. SO EVENTUALLY IT WILL GET THERE. THE QUESTION IS, IS YOUR TIMING RIGHT? AND IS YOUR WILLINGNESS TO GO INVEST IN THE INFRASTRUCTURE TO GET HIGH RATE PRODUCTION. SO THE WAY YOU GET AN EXPENDABLE ARCHITECTURE TO WORK WELL IS YOU PRODUCE A LOT OF THEM. YOU INVEST IN THE FUNDAMENTAL INFRASTRUCTURE TO GET THAT DONE AND PRODUCE A LOT OF THEM. GET DOWN THE LEARNING CURVE. HAVE A VERY GOOD RUN RATE ASSOCIATED WITH IT. YOU PRODUCE A BUDGET OF WIDGETS, THEY WILL BE CHEAPER. PEOPLE HAVE TO FIGURE OUT IF THEY HAVE ENOUGH MARKET SHARE TO SUPPORT THAT INFRASTRUCTURE. OR FLIP OVER TO REUSABLE. OBVIOUSLY WE THINK THE REUSABLE PATH IS THE LONGER PATH, AND THAT IS THE ONE WE ARE FOCUSED ON. >>SO THAT BRINGS UP ANOTHER ENTRUSTING KIND OF AREA OF THE WHOLE SPACE BUSINESS AND THE EMERGING SPACE BUSINESS. THAT IS A LOT OF UP FRONT COSTS YOU HAVE JUST DESCRIBED. AND BLUE ORIGIN IS LUCKY IN THAT JEFF BEZOS’ PASSION PROJECT AND HE IS WILLING TO FUND IT, I THINK HE IS ON RECORD SAYING THIS IS PRIORITY FUNDING; RIGHT? SO WHAT ARE WE LOOKING AT FOR THE NEXT TEN YEARS IN TERMS OF ACCESS TO BUILDING NEW BUSINESSES AROUND SPACE? IS IT GOING TO HAVE TO SUBSIST ON THIS PATRONAGE MODEL? DO WE NEED THE KING AND QUEEN OF SPAIN TO SPONSOR OUR JOURNEYS? >>NO, WE DO NOT NEED THE KING OR QUEEN OF SPAIN. HAVING THAT LEVEL OF EQUITY IS A NICE PLACE TO BE. BUT WHAT WE HAVE SEEN, AND THERE IS A LESS THAN CLEAR RECOGNITION THAT THE LAUNCH VOLUME IS GOING UP. AND HAS BEEN GOING UP FOR QUITE AWHILE. IF YOU ACTUALLY GO LOOK OVER THE PAST YEARS FOR U.S. BASED ADDRESSABLE MARKET, IT’S BEEN GOING 3% A YEAR. AND SO YOU ARE RUNNING ROUGHLY AROUND 36 OR SO PER YEAR. AND THAT WILL ACTUALLY GO UP BY 3%, AT LEAST, A YEAR. PROJECTIONS SHOW IT GOING UP FROM 50 TO 80. RIGHT NOW THE LAUNCH VOLUME CONTINUES TO GROW. AND SO MORE LAUNCH PROVIDERS WILL BE ABLE TO COME IN AND GET THOSE RATES TO SUPPORT THE OVER ALL INFRASTRUCTURE. >>YOU ARE TALKING ON THE DEMAND SIDE. >>ON THE DEMAND SIDE. THE DEMAND CONTINUES TO GROW AND EXPANSIVE. AND THAT ISN’T EVEN INCLUDING THE MEGA CONSTELLATIONS BEING PROPOSED. YOU ARE SAYING A NUMBER OF CONSTELLATIONS BEING PROPOSED BY LARGE TECH COMPANIES AND OTHERS SAYING THE WORLD NEEDS MORE CONNECTIVITY. BECAUSE OF THAT THEY ARE GOING TO NEED A LOT OF LAUNCHES RELATIVELY SOON. AND SO THE LAUNCH VOLUME IS REALLY LOOKING VERY ATTRACTIVE OVER THE NEXT TEN YEARS. WHETHER YOU ARE TALKING ABOUT WHETHER THAT IS PRIVATELY FUNDED, HALF GOVERNMENT FUNDING. BUT IT IS FUNDAMENTALLY SHIFTING TO A MORE COMMERCIAL MODEL. EVEN NOW ONLY ABOUT 20% OF THE OVER ALL VOLUME FOR U.S. BASE ADDRESSABLE MARKET IS ACTUALLY SECURITY PROVIDER. SO IT’S ALREADY COMMERCIAL. IT’S ALREADY COMMERCIALLY DOMINATED. THAT IS A BIG CHANGE. IF YOU THINK ABOUT IT 10-20 YEARS AGO, IT WAS CERTAINLY NOT THAT WAY. IT WAS DOMINATED BY GOVERNMENTS THAT WERE FUNDING SPACE PROGRAMS. >>YEAH. SO YOU’RE SAYING FROM YOUR PERSPECTIVE FROM THE ROCKET PERSPECTIVE, IT’S A VIABLE BUSINESS RELATIVELY QUICKLY. >>ABSOLUTELY. >>WHAT ABOUT KIND OF LIKE OTHER PEOPLE WANTING TO DO BUILD STARTUPS OR HOW ACCESSIBLE IS IT FOR A NEW COMPANY STARTING OUT THAT DOESN’T, ISN’T THE BRAIN CHILD OF JEFF BEZOS? >>EXACTLY. THAT HAS BEEN THE FUNDAMENTAL PROBLEM IN SPACE BUSINESSES TO DATE. AND I ALWAYS LIKE TO MAKE THE ANALOGY TO AMAZON. AND WHAT AMAZON WAS ABLE TO GO DO IS BUILD ON INFRASTRUCTURE THAT ALREADY EXISTED. AND THE INFRASTRUCTURE THAT EXISTED WAS THEY DIDN’T HAVE TO INVENT THE INTERNET. THEY DIDN’T HAVE TOP INVENT THE CREDIT CARD. THEY DIDN’T HAVE TO INVENT THE PERSONAL COMPUTER OR THE SHIPPING, THE UPS, THEY DIDN’T HAVE TO DO THE POSTAL SERVICE AS WELL. THAT DOESN’T EXIST IN SPACE. SO THE FUNDAMENTAL INFRASTRUCTURE AND THE INFRASTRUCTURE THAT IS NEEDED IS HOW DO YOU GET TO SPACE? AND THEN ONCE YOU ACTUALLY HAVE THAT ACCESS TO SPACE, THAT IS ROUTINE AND CAPABLE AND CHEAP, ALL OF THOSE BUSINESS PLANS START COMING OFF THE SHELF. THAT IS WHAT YOU ARE SEEING NOW. THAT IS WHY THERE IS SO MUCH PRIVATE EQUITY. PEOPLE ARE RECOGNIZING THAT COST CURVE IS SHIFTING AND SHIFTING QUICKLY. AND I CAN GET FIRST MOVE OR ADVANTAGE BY INVESTING INTO SPACE NOW. >>RIGHT. BUT THE INVESTMENT IS GOING INTO WHAT KIND OF COMPANIES? IT’S NOT GOING INTO LAUNCH PROVIDERS. IS IT POSSIBLE YOU WOULD SEE MORE ALONG? WE HAVE SEEN A FEW. IS THAT AN AREA FOR NOW? OR IS THE AREA FOCUSED, NOT EASY OPPORTUNITY, BUT THE LOWER HANGING FRUIT DIFFERENT PARTS OF THAT KIND OF PRESSURE. >>I THINK IT WILL BE VARIABLE. I THINK YOU NOW SEE A LARGE NUMBER OF SMALL LAUNCH PROVIDERS. AND I THINK THAT IS GOING TO BE A REALLY GOOD PLACE FOR A LOT OF ROCKETS. I THINK THERE IS GOING TO BE DISTRIBUTED CONSTELLATIONS. THERE WILL BE A LOT OF OPPORTUNITIES TO DO REPLACEMENTS. THEY WILL DO REPLACEMENTS AND ALSO SMALLER VENTURES. I THINK THE SMALLER LAUNCH PROVIDERS WILL DO WELL. I THINK THERE IS ROOM IN THE LAUNCH MARKET FOR FOUR OR MORE U.S. BASED LAUNCH PROVIDERS. IN ADDITION TO THE ONES THAT ARE AROUND THE WORLD. BUT THEN IF YOU THINK ABOUT WHAT ELSE IS OUT THERE, YOU ARE NOW SEEING FUNDAMENTALLY DIFFERENT BUSINESS MODELS. YOU ARE STARTING TO SEE PEOPLE UNDERSTAND MUCH WHAT THEY SAW WITH THE COMPUTER WHERE THERE IS A SHIFT FROM HEY, WE AL CARE ABOUT THIS HARDWARE, NO, I DON’T CARE ABOUT THE HARDWARE AS MUCH. I CARE ABOUT THE INFORMATION COMING OFF OF THAT PIECE OF HARDWARE. I THINK PEOPLE ARE FIGURING OUT HOW TO MONOTIZE SPACE RESOURCES MUCH BETTER THAN THEY HAVE. WHETHER THAT IS EARTH OBSERVATION OR COMMUNICATIONS OR OTHER KINDS OF EVEN NAVIGATION. THERE IS A LOT OF VALUE THAT IS THERE THAT PEOPLE ARE STARTING TO UNDERSTAND AS BUSINESS MODELS NOW. >>THAT IS ANOTHER PART OF THE BLUE ORIGIN VISION. LIKE OPENING UP ACCESS TO THESE RESOURCES AND THEN MAKING BUSINESSES AROUND THOSE. SO CAN WE TALK A LITTLE BIT MORE ABOUT THE LONGER TERM VISION? >>SURE. ONE OF THE THINGS PEOPLE DON’T RECOGNIZE IS OUR NAME IS BLUE ORIGIN. >>IS THAT A DESTINATION? OR IS THAT THE THING? >>WE DIDN’T JUST PICK A COLOR. IT REALLY IS ABOUT THE EARTH. THAT IS WHY WE CALL IT BLUE ORIGIN. WE ARE COMMITTED TO THE IDEA YOU HAVE TO GO TO SPACE TO BENEFIT EARTH. YOU COULD HAVE AN ARGUMENT HOW LONG OUR RESOURCES ARE GOING TO LAST. BUT YOU CAN’T ARGUE THAT IT’S FINITE. WE ARE GOING TO RUN OUT OF RESOURCES AT SOME POINT. AND SO HUMANITY NEEDS TO PRESERVE THIS JEWEL. WE ARE NOT ABANDONING EARTH. WE WANT TO PROTECT AND PRESERVE EARTH. TO DO THAT YOU HAVE TO GO SOMEWHERE ELSE AND USE RESOURCES FROM ELSEWHERE TO ACTUALLY RELIEVE THE STRESS THAT IS ON EARTH AND HOPEFULLY RESTORE IT TO A MUCH BETTER PLACE THAN WHAT WE ARE SEEING. AND SO ONE OF THE THINGS THAT WE’RE PASSIONATE ABOUT IS NOT ONLY GETTING REUSABLE VEHICLES, BUT ALSO BEING ABLE TO UTILIZE OTHER RESOURCES. AND ONE THING WE TALKED ABOUT EARLIER THIS YEAR WAS THIS IDEA CALLED BLUE MOON. WITH IS A CARGO LANDER WE ARE DEVELOPING TO GO LAND ON THE MOON AND GET US TO THE POINT WHERE WE CAN UTILIZE LUNAR RESOURCES TO BUILD THAT INFRASTRUCTURE THAT GETS YOU MILLIONS OF PEOPLE LIVING AND WORKING IN SPACE. BECAUSE WE BELIEVE IN THIS MULTIGENERATIONAL VIEW OF HOW DO WE GET MILLIONS OF PEOPLE LIVING AND WORKING IN SPACE THAT THIS GENERATION HAS THE RESPONSIBILITY AND QUITE HONESTLY THE EXCITING OBLIGATION TO ACTUALLY BUILD THAT INFRASTRUCTURE. AND IF WE BUILD THAT INFRASTRUCTURE, IT WILL GIVE US A MUCH BETTER FUTURE FOR OUR CHILDREN AND GRANDCHILDREN. >>THAT SOUNDS GREAT. BUT IT ALSO SOUNDS LIKE, HOW DO YOU INCENTIVIZE THAT? HOW DO YOU INCENTIVIZE THAT WORK TO HAPPEN NOW FOR THAT FUTURE GOAL? ESPECIALLY WHEN TYPICALLY OUR ECONOMIC INCENTIVES ARE NOT THAT LONG TERM. >>WE HAVE A MUCH LARGER HORIZON. AND THAT IS PURPOSEFUL. THAT IS BEING VERY THOUGHTFUL OF EVEN DOWN TO OUR MOTTO OF WHAT WE TALK ABOUT. WHICH IS THE STEP BY STEP APPROACH. WE WILL MASTER CERTAIN THINGS STEP BY STEP. SO WE BREAK IT DOWN TO, WE’RE GOING TO MASTER HOW WE ACTUALLY MAKE SUB ORBITAL FLIGHT WORK. NOT LET’S GO INSPECT IT AFTER THE FLIGHT. TRULY MAKE IT SO YOU CAN MAKE IT SIMPLY FUEL IT UP AND GO FLY IT. WE’RE GOING TO MASTER THAT AND THE ENGINE TECHNOLOGY AND MASTER IT AT THE ORBITAL SCALE. SO WE BREAK DOWN THAT LONGER TERM HORIZON INTO SMALLER STEPS. AND AT THE SAME TIME, MAKE SURE WE ARE MAKING A SELF-SUSTAINING BUSINESS. BECAUSE BLUE ORIGIN IS GOING TO BECOME A SELF-SUSTAINING BUSINESS. WHY? BECAUSE A, CUSTOMERS MAKE YOU BUSINESS. AND SELF-SUSTAINING BUSINESSES LAST LONGER. THEY OUT LAST THEIR FOUNDER. >>AND IS THERE A CONSIDERATION IN THERE BRINGING OTHERS AROUND FOR THE RIDE? OR WILL YOU BE LIKE WE WILL TAKE CARE OF OUR OWN HALFS AND HOPEFULLY THE BUSINESSES WILL COME AFTER WE ESTABLISH THIS. >>I THINK THERE IS CLEARLY GOING TO BE AN ECOSYSTEM THAT DEVELOPS AROUND ALL OF THIS. AS YOU BUILD THOSE CAPABILITIES AND BUILD THAT TYPE OF ACCESS, PEOPLE START RECOGNIZING WHAT THEY CAN GO DO. LIKE BUSINESS PLANS COMING OFF THE SHELF, WE TRIED THIS BEFORE, WE THOUGHT ABOUT IT, IT WAS NEVER FEASIBLE. AND THERE IS DOZENS AND DOZENS OF PROFITABLE IDEAS THAT NEED THE CAPABILITY TO GET TO SPACE. >>SO ANOTHER CONCRETE PART OF THE BLUE ORIGIN VISION I FIND INTERESTING IS THIS CONCEPT OF THE SPACE STATIONS BEING MORE PRACTICAL, HAS BEEN BIATION HABITATION ON SPACE. >>O’NEIL HAD THIS IDEAL. IT’S HIS FUNDAMENTAL PREMISE HE PUT IN FRONT OF HIS STUDENTS. LET’S THINK ABOUT THIS. WHAT IS THE BEST PLACE FOR HUMANS TO LIVE OFF THE EARTH? AND WHEN THEY ASKED THAT QUESTION, THE ANSWER CAME BACK THAT IT’S NOT PLANETARY SURFACES. AND ISAAC HAD A FUNNY QUOTE IN AN INTERVIEW SAYING WE HAVE ALL BECOME PLANETARY CHAUVINISTS. LIVING ON MOON LIVING ON MARS, LIVING ON ANY OF THE HABITABLE SERVICES THAT WE SEE, IT’S NOT A VERY GOOD ENVIRONMENT. AND FUNDAMENTALLY ISN’T IN TERMS OF ONE SIXTH GRAVITY OR ONE-THIRD GRAVITY. REALLY DOESN’T HAVE MUCH OF AN ATMOSPHERE. SO LIVING THERE IS LIKE LIVING ON SOME OF THE WORST PLACES ON THE PLANET. IT WOULD BE MUCH, MUCH HARDER THAN WHAT YOU HAVE HERE TODAY. BUT IF YOU HAVE A MANUFACTURED WORLD. THAT IS WHAT O’NEIL COLONIES ARE. THAT WOULD HAVE ENVIRONMENTS ASSOCIATED WITH THE KIND OF GRAVITY YOU WANT. THE KIND OF ATMOSPHERE YOU WANT. COULD BE A VERY, VERY GOOD PLACE TO LIVE. AND THOSE KIND OF ISLANDS THAT WOULD BE AT EARTH RADIUS TO THE SUN. AND CLOSE TO HOME BECAUSE EVERYONE WILL WANT TO COME BACK HOME. THAT WILL BE A VERY APPEALING VISION. AND IT’S ONE OF MANY VISIONS, BUT IT’S ONE THAT SEEMS THE MOST REASONABLABLE THAT SEEMS THE MOST REASONABLE TO ME. >>IF YOU JUST REDIRECT IT EVEN A FRACTION OF THOSE RESOURCES TO MORE IMMEDIATE SHORT-TERM FIXES, YOU CAN MAKE A LOT OF PEOPLE’S LIVES A LOT BETTER, A LOT QUICKER. BUT IT SOUNDS LIKE THAT IS AGAIN, THE LONGER TERM DEAL OF BLUE ORIGIN? >>I THINK IN ANY PORTFOLIO WHETHER YOU ARE TALKING BUSINESS OR PERSONAL INVESTMENT STRATEGY, YOU SHOULD HAVE BOTH THINGS. YOU NEED TO HAVE SHORT TERM AND LONG TERM. I NEVER LOOK AT THIS AS A DICHOTOMY. I NEVER LOOK AT IT AS YOU CAN ONLY DO THIS IMMEDIATE THING OR THIS LONG-TERM THING. YOU SHOULD DO. AND WE ARE DOING BOTH. WE HAVE A WHOLE BUNCH OF THINGS THAT REQUIRE OUR RESOURCES AND ATTENTION RIGHT NOW. WE ALSO NEED TO PROTECT WHAT WILL HAPPEN TO OUR CHILDREN AND GRAND CHIRP AND WHAT THEIR FUTURE LOOKS LIKE. THAT IS ONE OF THE REASONS WHY WE HAVE BLUE ORIGIN. >>GREAT. ALL RIGHT. WE ARE GETTING CLOSE TO TIME. BUT A COUPLE QUICK QUESTIONS. WHAT IS YOUR NEXT PLANNED LAUNCH ACTIVITY? >>WE WILL HAVE A PALO LAUNCH COMING UP RELATIVELY SOON. THIS WILL BE TRYING TO EXERCISE THE OVER ALL SYSTEM. AND MAKE SURE WE HAVE IT VERIFIED TO THE EXTENT WE NEED IT TO BE. >>AND WHAT IS THE PRICE TAG ON THAT FIRST COMMERCIAL FLIGHT? >>WE ARE ALWAYS GOING TO HAVE A PRICE TAG THAT WE HAVE LISTED. AND RIGHT NOW WE HAVEN’T PUBLISHED THAT YET. I WOULD SAY FUNDAMENTALLY IT’S GOING TO NOT BE CHEAP. ANY NEW TECHNOLOGY IS NEVER CHEAP. WHETHER YOU ARE TALKING ABOUT THE FIRST IBM COMPUTERS OR WHAT WE ACTUALLY SEE TODAY. BUT IT WILL BE IN THE HUNDREDS OF THOUSANDS OF DOLLARS FOR PEOPLE TO GO. INITIALLY. BUT WE WILL GET THIS DOWN TO THE POINT MIDDLE CLASS PEOPLE CAN USE IT. >>AMAZING. THANKS VERY MUCH. >>THANK YOU, DARRELL. APPRECIATE IT. THANKS. >>I ALMOST LOST SOMETHING IMPORTANT THERE. YOU MAY KNOW OUR NEXT GUEST FROM 500 DAYS OF SUMMER, INCEPTION, SNOWED IN, OR MY PERSONAL FAVORITE MOVIES TEN THINGS I HATE ABOUT YOU. BUT HE ALSO — YEAH. BUT HE ALSO HAPPENS TO BE AN ACCOMPLISHED ENTREPRENEUR PLEASE WELCOME TO THE STAGE FROM HIT RECORD JOSEPH GORDON LEVITT. >>HELLO, EVERYBODY. >>WELCOME, WELCOME. >>THANK YOU VERY MUCH. >>IT’S ALWAYS AWKWARD WHEN YOU FIRST SIT DOWN LIKE YOU HAVEN’T BEEN TALKING FOR 20 MINUTES BACK THERE. >>SO HOW ARE YOU? >>FINE. HOW ARE YOU? I THOUGHT WE COULD START. RAISE YOUR HAND IF YOU KNOW WHAT HIT RECORD IS? >>THAT’S GOOD. >>YOU STARTED IT AS A HOBBY, AND NOW IT’S THIS WHOLE BIG THING. WHY DON’T YOU EXPLAIN WHAT HIT RECORD IS. >>IT DID BEGIN LONG AGO. NOT AS A STARTUP AT ALL. IT WAS A TIME IN MY LIFE I HAD BEEN ACTING EVER SINCE I WAS A KID AND I QUIT FOR AWHILE TO GO TO COLLEGE. WHEN I GOT BACK INTO IT OR WANTED TO GET BACK INTO IT, I COULDN’T GET A PART. NO ONE WOULD CAST ME. AND THIS FELT TERRIBLE. REALLY PAINFUL. IF YOU’RE AN ARTIST OR KNOW ANY ARTISTS WHO WANT TO DO THEIR THING BUT AREN’T GETTING THE OUTLET TO DO IT. AND SO I REALIZE AT THAT POINT OKAY I NEED TO TAKE RESPONSIBILITY FOR MY OWN CREATIVITY. I NEED TO BE ABLE TO DO THIS ONMY OWN AND HIT RECORD WAS THIS TURN OF PHRASE I CAME UP WITH TO BE LIKE A SYMBOL FOR MYSELF. I’M GOING TO BE THE ONE TO PUSH THE BUTTON. HAS A BIT OF WORD PLAY ON HIT RECORD AND HOW THE MEDIA IS CHANGING FROM — MY BROTHER HELPED ME SET UP A WEBSITE WHERE I WAS POSTING VIDEOS AND SONGEST AND STORIES. AND WE PUT UP THIS MESSAGE BOARD. WE PUT UP THE MESSAGE BOARD IN 2007. JUST THIS LITTLE PHP, OUT OF THE BOX MESSAGE BOARD. AND WHAT WE NOTICED WITH THE PEOPLE THAT STARTED COMING TO THIS MESSAGE BOARD, SOME WANTED TO CHECK OUT WHAT I WAS MAKING. BUT WHAT A LOT OF THEM WANTED TOO IS MAKE THINGS TOGETHER. AND WE THOUGHT, NOW THAT IS LEGITIMATELY NEW BECAUSE YOU CAN WATCH A VIDEO ON THE INTERNET AND THAT IS BASICALLY THE SAME AS WATCHING TELEVISION. YOU CAN LISTEN TO A SONG ON THE INTERNET. THAT IS BASICALLY THE SAME AS THE RADIO. USING THE INTERNET TO COLLABORATE, TO HAVE PEOPLE BE ABLE TO MAKE THINGS TOGETHER THEY MIGHT NOT HAVE BEEN ABLE TO MAKE ON THEIR OWN, THAT IS NEW BEHAVIOR THAT WOULDN’T HAVE EXISTED A FEW YEARS AGO BEFORE THIS TECHNOLOGY. WE THOUGHT IT WAS COOL AND WE LEANED INTO IT. MY BROTHER WAS A CODER AND WE STARTED BUILDING LITTLE FEATURES ON TOP OF THIS MESSAGE BOARD. STILL COMPLETELY AS A HOBBY. BUT THE COMMUNITY GREW. AND WAS SO MUCH FUN AND VIBRANT AND POSITIVE AND DIFFERENT THAN WHAT YOU SEE ELSEWHERE ON THE INTERNET BECAUSE I THINK WHEN PEOPLE ARE MAKING THINGS TOGETHER, THEY HAVE A COMMON GOAL. THEY TREAT EACH OTHER DIFFERENTLY THAN WHEN THEY ARE COMPETING FOR ATTENTION AND POPULARITY. SO AFTER A FEW YEARS MY FRIEND JARED WHO WAS HERE. SAID COULD THIS BE SOMETHING MORE THAN A HOBBY AND A LITTLE MESSAGE BOARD? COULD THIS BE A PRODUCTION COMPANY? AND IN 2010 WE LAUNCHED IT AS A PRODUCTION COMPANY. WE SAID LET’S USE THIS PROCESS WHERE PEOPLE ARE MAKING THINGS TOGETHER ONLINE AND LET’S — WE MADE A LIST OF GOALS. COULD WE MAKE A SHORT FILM LIKE THIS? THAT COULD PLAY AT A FESTIVAL? COULD WE PUT OUT A RECORD? COULD WE PUBLISH A BOOK. ONE DAY MAYBE MAKE A TV SHOW. OVER THE YEARS WE MANAGED TO DO ALL OF THOSE THINGS. AND WE FIGURED OUT THE IP AND IN THE TERMS OF SERVICE AND HOW TO PAY PEOPLE WHEN PRODUCTION WAS MONOTIZED. AND WE ARE REALLY PROUD OF THE COMMUNITY THAT FORMED. BECAUSE LIKE I SAID, EVEN AS IT GREW, IT MAINTAINED THIS POSITIVE FEELING THAT FELT DIFFERENT THAN OTHER PLACES ONLINE. AND SO NOW JUST RECENTLY WE STARTED THINKING OKAY, IT’S BEEN GREAT AS A PRODUCTION COMPANY, BUT THERE IS A LIMIT TO HOW MANY PEOPLE WE CAN REALLY INCLUDE IN THIS CREATIVE PROCESS. WITH THE PRODUCTION COMPANY MODEL. IN THE PRODUCTION COMPANY MODEL IT’S US LEADING THESE COLLABORATIVE PROJECTS. AND THAT DOESN’T SCALE. ONLY SO MANY PEOPLE CAN REALLY BE INCLUDED IF WE ARE ALWAYS THE LEADERS. SO WHAT IF WE COULD TAKE WHAT WE HAVE LEARNED DOING THIS FOR YEARS, LEADING THESE COLLABORATIVE PROJECTS AND BUILD TOOLS TO LET ANYBODY COME AND LEAD THEIR OWN PROJECT. AND LAST YEAR WE CAME UP HERE TO SILICON VALLEY AND PITCHED THAT IDEA AND RAISED VENTURE CAPITAL WITH EXCELLENT PARTNERS. I’M GOING TO SAY ALL OF THESE NAMES BECAUSE THEY ARE AWESOME PEOPLE. >>I WANT KNOW. I HAD THIS VISION. WE HAVE CELEBRITIES COME AND JOIN US AT DISRUPT AND MORE OFTEN THAN NOT THEY ARE INVESTORS AND NOT FOUNDERS. I LOVE THE IDEA OF JOSEPH GORDON LEVITT ON SAND HILL ROAD. TELL ME ABOUT FUND RAISING. WERE YOU INTIMIDATED? >>IT’S FUNNY. IT’S A MIX OF VERY MUCH INSIDE MY COMFORT AND VERY MUCH OUTSIDE. BECAUSE WHAT IS INSIDE MY COMFORT ZONE IS GOING INTO ROOMS AND RELATING TO PEOPLE AND BEING ABLE TO TELL A STORY. AND GET OTHER PEOPLE TO FEEL HOW I FEEL. THAT IS WHAT ACTING AND STORY TELLING IS. WHAT IS, IS BACKING UP THOSE FEELINGS WITH SOMETHING MORE SCIENTIFIC DRIVEN. ALTHOUGH I THINK TIE COD MY IS PROBLEMATIC. BUT WE WILL COME BACK TO IT. I THINK THE BIGGEST BENEFIT I GOT AND THEN I SHOULD SAY I AND MY TEAM GOT FROM RAISING MONEY EVEN BEYOND THE CAPITAL, WAS IN ORDER TO RAISE MONEY, WE HAD TO REALLY PUT OURSELVES THROUGH THEPACES AND REALLY FIGURE OUT WHAT WE WERE DOING WAS IN A WAY FAR MORE DISCIPLINED. ALL OF OUR DIVISION HAD BEEN INBOUND, BUT IT’S JUST BECAUSE WE WERE, NOT TO PAT OURSELVES ON THE BACK, WE WERE GOOD AT WHAT WE DID. WE WERE DOING SOMETHING UNIQUE. PEOPLE WOULD COME FIND US AND WE WOULD DO JOBS AND THAT PAID THE BILLS AND THAT ALLOWED US TO GROW. AND WE WERE 18 PEOPLE. BUT THEN LIKE I SAID WHEN WE STARTED SAYING HOW CAN WE INCLUDE A LOT MORE PEOPLE? OKAY, WELL THEN WE HAVE TO LEAN INTO TECHNOLOGY. IF WE ARE GOING TO LEAN INTO TECHNOLOGY, THAT WILL COST A LOT MORE MONEY. WHERE IS THAT MONEY GOING TO COME FROM? AND FIGURING OUT WHAT A BUSINESS MODEL IS. I DIDN’T KNOW WHAT — I HAD NEVER HEARD THE TERM KPI OR THINGS LIKE THAT. I STARTED COMING TO CONFERENCES LIKE THIS AND MEETING REALLY SMART PEOPLE. THEY WOULD ASK ME QUESTIONS ABOUT DATA. AND I WOULD BE LIKE WE DON’T PAY ATTENTION TO THAT. WE MAKE ART THAT WE LIKE AND WE MAKE ENOUGH MONEY TO PAY THE BILLS AND THAT’S WHAT WE’VE BEEN DOING SUCCESSFULLY FORREERS. AND THEY WOULD ASK QUESTIONS ABOUT RETENTION AND MONTHLY ACTIVE USERS. I DIDN’T KNOW THE ANSWERS. SO WE HAD TO START TRACKING THOSE THINGS. AND IT’S REALLY BEEN EDUCATIONAL AND I THINK GROWN US UP A LOT AND MADE US A LOT MORE EFFECTIVE. >>ALSO THERE ARE NO CONFERENCES LIKE THIS, BY THE WAY. >>RIGHT. OTHER CONFERENCES THAT WERE NOT AS DISRUPTIVE AS THIS ONE. >>THERE YOU GO. THANK YOU. SPEAKING OF SOME OF THESE BUSINESS MODELY TYPE THINGS. WHAT IS THE REVENUE SPLIT BETWEEN HIT RECORD AND THE PLATFORM. >>THERE IS A COUPLE DIFFERENT WAYS WE DO IT DEPENDING ON THE PRODUCTION. IF THE PRODUCTION IS TURNING A PROFIT, THEN WE SPLIT THOSE PROFITS AND HALF GO TO THE CONTRIBUTING ARTISTS, AND HALF GOES TO HIT RECORD. IT’S IMPORTANT TO NOTE THAT USUALLY IN THESE PRODUCTIONS WHERE WE’RE MONOTIZING, HALF IS BEING DONE BY CREATIVE PEOPLE IN OUR OFFICE. WE ARE WORKING WITH THOSE THAT ARE NOT PROFESSIONAL, BUT THEY LIKE TO CREATE. AND THE IDEA IS TO INCLUDE A LOT MORE PEOPLE AND HAVE THAT CREATIVITY END UP RESULTING IN A COLLABORATIVE EFFORT THAT IS OF THE KIND OF QUALITY THAT WE CAN DELIVER IT TO A BUYER. SO HALF AND HALF ALWAYS FELT FAIR. THERE ARE OTHER PRODUCTIONS THAT DON’T TURN A PROFIT. FOR EXAMPLE, WHEN WE DO A TV SHOW. TV SHOWS DON’T USUALLY TURN PROFITS. AND IF THEY DO TURN PROFITS, IT’S BECAUSE FIVE YEARS LATER OR WHATEVER, IT GOES INTO INTERNATIONAL SYNDICATION. SO WE WANTED TO MAKE SURE WE COULD PAY THE CONTRIBUTING ARTISTS EVEN THOUGH WE WEREN’T GOING TO SEE A PROFIT PER SE. SO WE EARMARK A LINE ITEM IN A PRODUCTION BUDGET. WE SAY WHAT THAT NUMBER IS AT THE BEGINNING AND THEN WE SPLIT UP THAT POOL AMONGST THE CONTRIBUTING ARTISTS. >>RECENTLY YOU STRUCK A DEAL WITH UBASOFT FOR TEN SONGS FOR ONE OF THEIR GAMES. TEN ORIGINAL SONGS FOR $20,000. WHICH IS $2,000 A SONG. LET’S SAY THERE IS FIVE CRAB TOURS THAT IS $400 A PIECE. THERE HAS BEEN SOME CRITICS THAT SAY THIS ISN’T ENOUGH. RIGHT? HOW DO YOU RESPOND TO THAT? >>FIRST OF ALL I WOULD SAY, I DON’T KNOW IT’S CLEAR THAT A LOT OF THAT WORK IS BEING DONE BY PEOPLE IN OUR OFFICE. LIKE I JUST SAID, I THINK THAT THE CRITICS ARE ASSUMING THAT PEOPLE ARE SUBMITTING FINISHED SONGS ALL BY THEMSELVES. PROFESSIONAL GRADE FINISHED SONGS WE CAN PLUCK OUT AND DELIVER. WHICH IS NOT AT ALL WHAT HAPPENS ON OUR SITE. ON OUR SITE IT’S PROFESSIONALS IN OUR OFFICE, MUSIC PRODUCERS, GOING OUT TO THE WORLD AND SAYING, LET’S LEAD A COLLABORATIVE EFFORT AND WHOEVER YOU ARE, WHEREVER YOU ARE, WHATEVER YOUR SKILL LEVEL, WE ARE GOING TO FIND A WAY TO INCLUDE YOU IN THIS. WHICH IS I THINK WHAT UBASOFT ULTIMATELY WANTED. WAS A WAY TO INCLUDE NOT JUST PROFESSIONAL MUSICIANS IN THE GAME, THEIR GOAL WAS TO NOT LIKE HEY, WE WILL FIND A CHEAP WAY TO HAVE MUSIC GET INTO OUR GAME. THEY ARE NOT SPENDING ANY LESS MONEY. THEY ARE NOT CUTTING ANY COSTS. THEY ARE NOT PAYING ANY FEWER PEOPLE. THE GOAL WAS TO INCLUDE AS MANY PEOPLE AS POSSIBLE. AND HIT RECORD ALLOWS FOR A MUCH MORE INCLUSIVE COLLABORATION BECAUSE LIKE I SAID, YOU DON’T HAVE TO BE, NOT THAT MANY PEOPLE HAVE THE CAPABILITY TO DELIVER AN ENTIRE SONG ALL BY THEMSELVES. BUT A LOT OF PEOPLE WANT TO SING ALONG OR PLAY A GUITAR PART OR WRITE A FEW LYRICS AND HAVE THOSE LYRICS BE COMBINED WITH A WHOLE BUNCH OF OTHER PEOPLE WHO WROTE LYRICS AND A WHOLE BUNCHOVER OTHER PEOPLE WHO PLAYED PARTS AND END UP IN A COLLABORATIVE SONG THAT CAN BE GOOD ENOUGH TO DELIVER TO UBASOFT. SO THAT IS THE SERVICE THAT WE ARE PROVIDING. AND WE’VE BEEN PAYING PEOPLE IN THIS EXACT WAY FOR ALMOST TEN YEARS NOW. WE’VE PAID ALMOST $3 MILLION TO DIFFERENT PEOPLE. THE CRITICISM YOU ARE TALKING ABOUT IS THE VERY FIRST TIME WE EVER GOT CRITICISM LIKE THAT. AND TO BE HONEST, MOST OF THE CRITICS DIDN’T HAVE ALL THE FACTS AND HAPPENING ON TWITTER WHICH IS NOT SO GOOD AT DELIVERING FACTS. >>YOU’RE NOT WRONG ABOUT THAT. CAN A CREATOR COME AND MAKE HIT RECORD A VIABLE CAREER? >>NO. AND WE NEVER POSITION IT THAT WAY. NO. THERE IS A LOT OF, I THINK MESSAGING OUT THERE THAT WILL SAY, WE CAN BE YOUR ENTREE INTO A CAREER AS A PROFESSIONAL CREATIVE. AND I THINK FRANKLY MOST OF THAT IS NONENTIRELY HONEST. YOUTUBE PRESENTS A NARRATIVE OF LIKE HEY, YOU CAN BE A STAR. YOU CAN BECOME AN INFLUENCER. THE AMOUNT OF PEOPLE WHO MAKE A LIVING ON YOUTUBE IS MINUSCULE COMPARED TO THE NUMBER OF PEOPLE THAT ARE UP LOADING VIDEOS. ON HIT RECORD WE REALLY DON’T EMPHASIZE THIS IS YOUR ENTREE INTO A CAREER. WHAT WE TALK ABOUT IS THERE IS MORE TO CREATIVITY TO MONEY AND SHOW BUSINESS. CREATIVITY IS SOMETHING THAT I THINK IS HUMAN UNIVERSAL. I’VE BEEN VERY LUCKY TO HAVE A CAREER AND WHEN I SAY LUCKY, I MEAN LUCKY. I HAPPEN TO BE BORN RAISED IN SOUTHERN CALIFORNIA. I HAPPEN TO BE A STRAIGHT WHITE MALE. I HAPPEN TO HAVE A LOT OF DIFFERENT ADVANTAGES THAT NOT EVERYBODY HAS. BUT THAT DOESN’T MEAN THAT EVERYBODY SHOULDN’T HAVE THAT URGE TO BE CREATIVE, MET IN A FULFILLING WAY. AND I THINK A LOT OF THE MEDIA TECH PLATFORMS RIGHT NOW DON’T REALLY COME THROUGH ON FULFILLING THAT SIDE OF CREATIVITY. BECAUSE THEY PUT SO MUCH FOCUS. YOU CAN BE A STAR, BUILD YOUR SUBSCRIBERS, GET FAMOUS, GET ATTENTION. BECAUSE THAT IS WHAT DRIVES THEIR BUSINESS MODEL. WE TRY TO EMPHASIZE WHAT I HAVE EXPERIENCED IN MY LIFE IS ACTUALLY WHAT BRINGS ME A LOT OF JOY AND HAPPINESS ABOUT THE CREATIVE PROCESS IS NOT THE RED CARPETS, IT’S NOT THE BOX OFFICE. IT’S NOT THOSE KINDS OF EXTERNAL VALUE DAZER. IT’S DOING IT. WHEN I GET TO ACTUALLY DO THE ART AND ESPECIALLY DO IT WITH OTHER PEOPLE. >>YEAH. DO YOU THINK — SPEAKING OF YOUTUBE AND INSTAGRAM WE ARE ACTUALLY GOING TO HAVE NEIL HERE SOON. DO YOU THINK YOUTUBE AND INSTAGRAM ARE A NET POSITIVE OR NET NEGATIVE FOR HUMANS CREATIVITY? >>I THINK THEY ARE A NET NEGATIVE. AND THEY ARE TWO DIFFERENT PLATFORMS. YOUTUBE IN PARTICULAR, AND I SHOULD SAY BOTH. YOUTUBE AND INSTAGRAM, THERE ARE TONS OF BEAUTIFUL THINGS THAT YOU CAN FIND ON BOTH OF THOSE PLATFORMS. SO YOU ASK ME NET. SO WHEN I SAY NET NEGATIVE, I DON’T MEAN ABSOLUTELY NEGATIVE. THERE IS TONS OF INCREDIBLE STUFF, BEAUTIFUL COMMUNITIES FORM. ALL KINDS OF CREATIVE HUMAN EXPRESSION. IT’S NOT TO SAY THAT IT’S ALL BAD, BUT I DO THINK THAT IN GENERAL THE BASIC BUSINESS MODEL OF WE’RE GOING TO OFFER A QUOTE, UNQUOTE FREE SERVICE IN EXCHANGE FOR THE RIGHT TO CONDUCT MASS SURVEILLANCE AND APPLY THESE INCREDIBLY EXPENSIVE ALGORITHMS TO THIS MASSIVE DATA SET TO OPTIMIZE FOR NOT THE BENEFIT OF THE USERS. NOT GOING TO MAKE THE USERS CREATIVE, INFORMED. BUT OPTIMIZE FOR THE AGENDA OF THESE THIRD PARTY ADVERTISERS. I THINK THAT IS A BASIC BUSINESS MODEL THAT IS WE ALL AS THE WORLD SHOULD GET OFF OF. ENTIRELY. WE SHOULDN’T BE MONOTIZING, SOFTWARE OR BUSINESSES THAT WAY. AND THAT MAKES SENSE IF YOU ARE THE ONE PAYING THE HIP THATTIST. IF YOU ARE THE ONE SAYING HIP THATTIST I WANT YOU TO HELP ME DO THIS. YOU DON’T KNOW WHAT THAT PERSON IS ASKING THE HYPNOTIST GETTING YOU TO DO. NO ONE AGREE TO DO THAT. BUT THAT IS WHAT WE ARE ALL DOING. I AM ON INSTAGRAM AND YOUTUBE AND TWITTER AS WELL. BUT IT’S NOT A BUSINESS MODEL THAT I THINK IS PROBABLY BENEFICIAL IN THE LONG-TERM. AND THERE IS A LOT THAT EXPERTS HAVE SAID IMPACTS GOVERNMENT. WHAT I CAN SPEAK ON WITH AUTHORITY IS THE CREATIVE PROCESS. AND I DO THINK THAT THIS BUSINESS MODEL IS BAD FOR PEOPLE’S CREATIVITY, ESPECIALLY YOUNG PEOPLE. I THINK IF YOU ARE SETTING OUT TO MAKE A SHORT FILM, FOR EXAMPLE, AND YOU ALREADY HAVE ON YOUR MIND WHAT’S GOING TO GET ME THE MOST LIKES, FOLLOWERS, SUBSCRIBERS, THAT IS NOT THE CREATIVE PROCESS THAT IS GOING TO MAKE YOU THE MOST HAPPY AS A CREATIVE PERSON. >>A COUPLE MORE THINGS. WE ARE RUNNING SHORT. I WANT TO TALK ABOUT NETFLIX A LITTLE BIT. NETFLIX IS ESSENTIALLY BEEN COLLECTING SO MUCH DATA ABOUT WHAT WE LIKE AND DON’T LIKE AND HOW WE CONSUME CONTENT THAT THEY ARE ABLE TO MAKE VERY DATA DRIVEN DECISIONS. THEY DON’T PAY A DOLLAR OVER WHAT THEY NEED TO FOR THE CONTENT THEY WANT. AND THEY CAN OPTIMIZE IT SO YOU CAN CLICK ON IT AND WATCH IT. YOU OPERATE ON A VERY DIFFERENT WORLD WHERE IT’S REALLY CREATIVITY THAT DRIVES SOME OF THE DECISIONS THAT YOU MIGHT MAKE. DO YOU — HOW DO YOU APPROACH THAT? IS DATA SOMETHING THAT IS GOING TO BE MORE AND MORE INVOLVED IN THE HIT RECORD PROCESS? >>I DON’T HAVE ANY PROBLEM WITH USING DATA. I DON’T HAVE ANY PROBLEM WITH MACHINE LEARNING. THE QUESTION IS, WHAT IS THE MACHINE LEARNING ALGORITHM OPTIMIZING FOR? WHOSE AGENDA IS IT SERVING? I THINK NETFLIX IS A GOOD EXAMPLE OF WHAT WE SHOULD BE DOING. THERE IS A DIRECT BILLING RELATIONSHIP BETWEEN THE CUSTOMER AND SERVICE. THE CUSTOMER IS LIKE HEY, I WANT TO WATCH STUFF I LIKE. NETFLIX IS LIKE COOL, WE WILL COLLECT A BUNCH OF DATA ON YOU AND GIVE YOU STUFF YOU WANT. THERE ARE MEDICATION APPS, THERE IS FITNESS APPS THAT USE DATA TO HELP YOU ACHIEVE THE GOALS YOU WANT TO ACHIEVE. GREAT. AND WHAT WE’RE TRYING TO BUILD WITH HIT RECORD, WE THINK WE CAN BUILD AN APP THAT WILL HELP YOU BE YOUR BEST CREATIVE SELF. BY PAIRING YOU UP WITH OTHER PEOPLE TO COLLABORATE WITH BECAUSE IT OFTENTIMES HELP IF YOU WANT TO BE CREATIVE TO BE DOING IT WITH OTHER PEOPLE. I’M ALL FOR USING DATA TO ACCOMPLISH A GOAL THE USER HAS SIGNED UP FOR. IT’S WHEN THE USER IS BEING SUBJECTED TO THESE ALGORITHMS NOT IN THEIR INTEREST BUT IN THE INTEREST OF SOME THIRD PARTY, I THINK THAT IS WHEN YOU GET INTO DANGER. >>SO MAYOR — IT WAS RECENTLY ANNOUNCED THAT YOU ARE GOING TO BE ON AN UPCOMING PROJECT THAT WILL BE ON APPLE TV PLUS. APPLE TV PLUS HAS NOT LAUNCHED YET. BUT THE COMPANY SPENT UPWARDS OF $6 BILLION ON CONTENT. AND I’M JUST WONDERING HOW MUCH OF THAT $6 BILLION IS GOING TO YOU? >>A LOT OF IT. I’M GETTING TO MAKE A SHOW AND APPLE HAS BEEN FANTASTIC. >>IS HIT RECORD INVOLVED IN ANY WAY? >>NO. OTHER THAN ALWAYS WHENEVER I’VE DONE STUFF IN CONVENTIONAL SHOW BUSINESS, IT HAS REALLY IMPACTED HIT RECORD. BECAUSE PROBABLY IF I WEREN’T IN CONVENTIONAL SHOW BUSINESS, YOU WOULDN’T BE HAVING SOME DUDE THAT RAISED A SERIES A SITTING HERE TALKING TO ALL OF YOU. >>DON’T SAY THAT. MY FINAL QUESTION IS WHY APPLE? I’M SURE THIS WAS SHOPPED AROUND. I DON’T KNOW HOW INVOLVED YOU WERE IN THAT DECISION. WHY IS APPLE A GOOD PROSPECT FOR SOMETHING LIKE MR. MCCORMICK. >>WHEN APPLE DROPS A SHOW, THE REACH IS GOING TO BE REALLY INCREDIBLE. AND I THINK IT’S GOING TO BE REACHING, I THINK THERE IS A LOT OF OVER LAP IN THE CULTURE OF WHAT APPLE IS AND APPEALS TO TO MY AUDIENCE IS AND WHO HIT RECORD AUDIENCES IS. THERE ARE NOT ANY OTHER TECH GIANTS THAT ARE MAKING GARAGE BAND. APPLE HAS A HISTORY OF MAKING THE BEST CREATIVE TOOLS EVER. AND THAT IS EXACTLY WHO I WANT TO BE CONNECTING WITH. I DO THINK THERE IS EXCITING OVER LAP BETWEEN THAT AND OUR TARGET FOR HIT RECORD. >> JOE, THANK YOU SO MUCH. >>THANK YOU. >>>ALL RIGHT. SO ON THE EXTRA CRUNCH STAGE RIGHT NOW WE HAVE A PANEL CALLED COULD THE U.S. GOVERNMENT BE YOUR NEXT INVESTOR. GOVERNMENT HAS A BUNCH OF OUR MONEY. IT’S WITH STEVE ASAKOWITZ. HERE ON THE MAIN STAGE WE ARE GOING TO BE TALKING A LITTLE BIT ABOUT GETTING TO IPO’S. WITH THAT I WOULD LIKE YOU TO WELCOME OUR NEXT GUESTS FROM BOX COFOUNDER CEO AND CHAIRMAN AARON LEVIE AND FROM PAGER DUTY JENNIFER TEJADA. >>>FOLLOWING A MOVIE STAR. >>YEAH. >>OBVIOUSLY NOW IS THE TIME TO TALK ABOUT ENTERPRISE SOFTWARE. >>NOW IT’S GOING TO GET HOT. >>IT’S DEFINITELY THE ACT TO BE FOLLOWING. >>TOTALLY. NOBODY IS LEAVING SO WE WILL BE FINE. >>STAY IN, PLEASE. WE’RE TALKING ABOUT, WE’RE GOING TO TALK ABOUT SASS MULTIPLES. >>I WAS ACTUALLY THINKING THIS WOULD BE FINE. WE WILL TALK ABOUT IPO’S IN 2019 WILL BE A GREAT YEAR FOR IPO’S. WE WILL TALK UBER AND LYFT AND HOW GREAT THEY ARE DOING. AND THAT JUST DIDN’T QUITE HAPPEN. WHAT HAPPENED THIS YEAR? >>WHY ARE YOU LOOKING AT ME? >>I WOULD SAY ACTUALLY I WOULD SAY THIS TALE OF TWO STORIES ON THE IPO SIDE. YOU HAVE I THINK COMPANIES THAT WERE PREVIOUSLY VALUED ON A PURE REVENUE MULTIPLE. IN THE PRIVATE MARKET. THAT ULTIMATELY DIDN’T TRANSLATE INTO REVENUE MULTIPLES. AND COMPANIES LIKE PAGER DUTY WHERE YOU ARE SEEING PRETTY DURABLE BUSINESS MODELS THAT TRANSLATE VERY WELL INTO THE PUBLIC MARKET AS SOFTWARE BUSINESSES. I THINK YOU HAVE TWO VERY DIFFERENT IPO STORIES AND PUBLIC MARKET STORIES >>SURE. THE STOCK PRICE DIDN’T QUITE RISE OVER THE LAST YEAR. >>FOR WHAT? YES. >>ALL OF THEM, BASICALLY. >>AS THE MOST RECENT IPO SHOULD TALK ABOUT THIS, I THINK WE HAVE TOO MUCH OF A FIXATION ON THE IPO MOMENT. AND VERSES JUST BUILDING DURABLE BUSINESS MODELS AND HOW DID THEY END UP TRANSLATING INTO VALUATIONS. THE VALUATION YOU GET AT AN IPO IS DUE TO A VARIETY OF FACTORS. WHAT DID THE BANKERS PRICTHINGS AT? I WOULD MORE LOOK AT SUSTAINABLE TRENDS ON HOW ARE THESE BUSINESSES BEING VALUED AND PERFORMING? >>I THINK IT’S IMPORTANT TO THINK OF THE IPO’S AS THE BEGINNING, NOT THE END. WE ALL LIVE IN SILICON VALLEY, KIT BE AN ECHO CHAMBER AND YOU TALK ABOUT EXITS ALL THE TIME. IPO IS AN ENTRANCE. IT’S PART OF A BEGINNING OF A LONG JOURNEY. FOR A COMPANY YOU WANT TO BUILD A LEGACY AROUND. IT IS A MOMENT. IT IS PART OF, IT’S THE START OF YOU REALLY SHARING A NARRATIVE BACKED BY FINANCIAL DATA TO HELP PEOPLE UNDERSTAND YOUR CURRENT BUSINESS, THE POTENTIAL FOR YOUR BUSINESS, THE MARKET YOU ARE IN. ET CETERA. I THINK WE TEND TO TALK ABOUT IT, IT’S THE BE ALL, END ALL. I THINK IT’S REALLY IMPORTANT TO THINK ABOUT WHY, WHY ENTER THE PUBLIC MARKETS? WHAT ARE YOUR MOTIVATIONS AND REASONS FOR GOING PUBLIC? AND IN OUR CASE, A BIG PART OF THE REASON WE WENT PUBLIC IS TO EXTEND OUR BRAND PLATFORM. PAGER DUTY IS A TECHNICAL COMPANY. IT’S A PLATFORM FOR REALTIME UNPLANNED WORK THAT IS WELL UNDERSTOOD BY THE DEVELOPER. BUT LESS WELL UNDERSTOOD BY YOUR TRADITIONAL GENERALIST FINANCIAL INVESTORS OR EVEN RETAIL INVESTORS. AND SO FOR US, IT WAS ABOUT GETTING THE STORY OF PAGER DUTY TO EVERY ENTERPRISE, EVERY BUSINESS, EVERY MODERN WORKER ON THE PLANET AND HELPING THEM UNDERSTAND HOW WE CAN CHANGE THE WAY THEY WORK. HOW TO IMPROVE THE FACT THAT MOST OF THE WORK THAT HAPPENS TO YOU DURING A DAY NOW IS UNPLAN THED. SOMETHING BREAKS DOWN BECAUSE OF ALL THE COMPLEX TECHNOLOGY SITTING BEHIND IT. AND BEING ABLE TO SORT OF TAKE A TECHNICAL PRODUCT AND DISTILL THAT NARRATIVE DOWN INTO SOMETHING THE FINANCIAL COMMUNITY COULD UNDERSTAND WAS A REALLY IMPORTANT PARTOVER OUR JOURNEY. BUT IT ALSO WAS A STORY THAT WAS EASIER TO TELL WITH THE NUMBERS. WHEN WE WERE PRIVATE AND WE WEREN’T SHARING THAT INFORMATION, PEOPLE WOULD SAY LITTLE PAGER DUTY. WHAT IS THAT LITTLE COMPANY DO? SO WHEN WE ACTUALLY CAME OUT AND SHARED OUR BUSINESS MODEL, WHICH TO AARON’S POINT AN ENTERPRISE BUSINESS MODEL IS DIFFERENT THAN A CONSUMER APP BUSINESS MODEL. WE SHOULDN’T TRY TO COMPARE THE GROSS MARGINS BETWEEN THE TWO. BECAUSE IT’S AN ENTIRELY DIFFERENT BUSINESS MODEL. >>BUT THE PAGER DUTY STORY HAS GOTTEN A LOT MORE COMPLICATED OVER THE YEARS TOO. FROM BEING THIS NOTIFICATION PLATFORM, TO BEING THE REALLY COMPLEX, REALTIME, OPERATING. >>I THINK THE TECHNOLOGY IS COMPLEX. THE STORY IS SIMPLE. TO DETECT AND UNDERSTAND ISSUES THAT WERE TAKING PLACE. INSTEAD OF WAITING FOR A PERSON TO FEEL THE PAIN AND RAISE THE TICKET OR CALL CUSTOMER SUPPORT. TO REALLY CONSOLIDATE THAT DETECTION PERIOD. WE HAVE BUILT ON TOP OF THAT PLATFORM OF INTELLIGENTLY ROUTEING THE MOST IMPORTANT INSIGHTS TO THE RIGHT PEOPLE IN THE ORGANIZATION. SO WE DON’T HAVE THIS SITUATION WHERE CUSTOMERS CAN’T USE THEIR PRODUCT OR SERVICE OR CAN’T ORDER THEIR COFFEE. AND YET IT WILL TAKE IT FOUR HOURS TO FIGURE WHO THEY SHOULD HAVE ON THE CALL. THERE IS A LOT OF COMPLEXITY THAT SITS BEHIND THAT IN TERMS OF MANAGING CONTRIBUTINGARCHITECTURE. PEOPLE ARE IN DISTRIBUTED TEAMS. BUT AT THE END OF THE DAY WHAT YOU’RE TRYING TO DO IS CLOSE THE GAP BETWEEN THE CUSTOMER EXPERIENCE, THE PERFECT CUSTOMER EXPERIENCE YOU WANT TO DELIVER, AND THE TECHNOLOGY OUTCOMES YOU NEED TO STOMACH ACHE IT HAPPEN EVERY TIME, ALL THE TIME. >>LET’S TALK ABOUT GETTING TO THAT POINT WHERE YOU GET TO TELL THAT STORY. YOU CAME IN WITH THREE YEARS FOR THE IPO. AS THE COO. WHAT DID YOU HAVE TO DO TO GET THE COMPANY READY TO GET TO THAT POINT? >>IT’S FUNNY, WE TALK A LOT ABOUT GETTING THE NARRATIVE READY AND THE ROAD SHOW. GETTING A COMPANY READY FOR THE PUBLIC MARKETS IS ABOUT UNDERSTANDING YOUR BUSINESS. UNDERSTANDING THE PREDICT ACT OF YOUR BUSINESS. WHERE THE STRENGTHS ARE, THE WEAKNESSES ARE. WE SPEND A LOT OF TIME AS EXECUTIVES WITH OUR BOARDS THINKING ABOUT, DO I HAVE 606 DOWN? WILL I GET THROUGH THE AUDIT? DO I HAVE TWO YEARS OF AUDIT FINANCIALS? WHAT I SHOULD BE TALKING ABOUT, DO I HAVE THE RIGHT LEADERSHIP TEAM FOR THE NEXT 3-5 YEARS. HAVE I FOUGHT THROUGH HOW A COMPETITIVE LANDSCAPE WILL EVOLVE? DO I HAVE THE RIGHT PEOPLE IN THE RIGHT PLACES? WHAT IS MY STRATEGIC WORK FORCE PLAN LOOK LIKE? HAVE I PRIORITIZEDTH RIGHT OPPORTUNITY? EXPERIMENTATION CAN BE A LITTLE CHALLENGING. SO GETTING READY IS ABOUT THE LEADERSHIP, ABOUT TEAM READINESS, ABOUT DO YOU REALLY UNDERSTAND AND CAN YOU SEE THE LEADING INDICATORS IN YOUR BUSINESS? AND NONE OF THOSE THINGS ARE EASY. AND WHAT WE TEND TO TALK ABOUT, IS THE STORY RIGHT? SO YOU HAVE TO DO ALL OF THOSE THINGS. THERE IS THE INSIDE THE COMPANY WORK THAT YOU ARE DOING TO TEST WHETHER OR NOT YOU ARE READY. I SAID TO OUR COMPANY ALL THE WAY THROUGH UP TO THE DAY WE LAUNCHED, WE CAN PULL THE PIN ON THIS AT ANY POINT IN TIME. AND I THINK WE SHOULDN’T BEMOAN PEOPLE WHO MAKE THAT DECISION. IT IS PROBABLY ULTIMATELY THE BEST DECISION FOR THE BUSINESS. I DON’T THINK THERE SHOULD BE A TON OF SHAME THINKING I HAVE TAKEN ANOTHER LOOK. NEW INFORMATION IS AVAILABLE TO ME NOW, WE ARE NOT GOING TO DO THIS. WE WILL STAY PRIVATE. >>WE’VE GOT SOMEBODY HERE WHO SPENT A LITTLE TIME THINKING OF IT. >>I AM THAT CASE STUDY. WE DID PULL THE PIN INITIALLY. WE DID A FILING AND IT TURNED OUT THAT OUR VIEW OF OUR WAS DIFFERENT. AND ANY TIME YOU HAVE THAT ASYMMETRY WHERE YOUR CASH BURN IS MAYBE MORE IMPACTFUL THAN TO WHAT INVESTORS WERE THINKING, THAT BECOMES A CHALLENGE. AND THEN WE GOT HIT BY A PUBLIC MARKET CORRUPTION. SO NOT A GOOD TIME TO ISSUE A KNEW FILING. SO WE PAUSED AND SAID, WE’RE GOING TO GET THE BUSINESS IN A MUCH BETTER STATE. SHOW BETTER FINANCIAL PICTURE AND DRIVE AWAY MORE ON THE CASH FLOW FRONT. BUT IT CAN BE TOTALLY CHALLENGING INSIDE THE ORGANIZATION. WE ENDED UP PAUSING OUR FILING AND STAYED EFFECTIVELY AND PRIVATE ANOTHER TEN MONTHS. LONGER THAN WE EXPECTED. AND THE RIGHT TIME TO TWO PUBLIC IS WHEN YOU HAVE THE TEAM TO BE ABLE TO GO AND DRIVE A PUBLIC BUSINESS. I THINK WHAT WE HAVE SEEN IN RECENT CASE STUDIES OR EXAMPLES IS WHERE ON THE MASKED BY THE PRIVATE MARKET STORY, COMPANIES WE’RE NOT OPERATING WITH THE LEVEL OF RIGOR OR EFFICIENCY OR ECONOMICS THAT THE PUBLIC MARKET WOULD BE ABLE TO GO IN VALUE AND MAKE SENSE OF. I THINK THE LESSON FOR ANY ENTREPRENEUR OR FOUNDER IS, THE NUMBERS ARE NOT GOING TO LIE. AND YOU HAVE TO MAKE SURE THE BUSINESS MODEL, THE FUNDAMENTALS OF THE BUSINESS MODEL ARE AS STRONG AS POSSIBLE. THAT IS WHY EVERYONE HAS READ OR RETWEETED. THE FRED WILSON PIECE THIS WEEK. BEN THOMPSON AROUND WHAT IS A SOFTWARE COMPANY AND WHAT IS NOT A SOFTWARE COMPANY? IT’S LESS INTERESTING TO DECIDE WHAT IS A SOFTWARE COMPANY AND MORE INTERESTING WHAT IS A BUSINESS MODEL. AND THE ONLY REASON WHY YOU CARE ABOUT GROWTH MARGIN, IT EVENTUALLY CHANGES INTO CASH FLOW. SO WHAT AND HOW SHOULD WE BE VALUING THEM AND DO YOU THINK ABOUT THEM? I THINK WE HAVE BROADLY SAID AS EVERY COMPANY WILL BE A TECH COMPANY. BUT THAT IS NOT ACTUALLY ACCURATE. EVERY COMPANY MIGHT BE A TECH ENABLED COMPANY BUT >>YOU HAVE TO THINK ABOUT OPERATING THEM IN A DIFFERENT WAY. >>WHERE WOULD YOU DRAW THE LINE BETWEEN A TECH COMPANY AND A COMPANY THAT USES TECH? >>I THINK WE TALK ABOUT TOO MUCH DRAWING THE LINE. IF YOU COULD USE TECHNOLOGY ENABLING YOUR CUSTOMER EXPERIENCE. THANKFULLY, YOU ARE TECH ENABLED COMPANY. AFTER THAT, WE SHOULD MOVE FROM THAT IDEA TO THE IDEA IT MEANS SOMETHING FOR YOUR COMPANY THAT IS DIFFERENT. IF YOU HAVE A SUBSCRIPTION REVENUE STREAM? IS IT ONE OF A HIGH GROSS MARGIN? WHAT IS THE STICKINESS OF THE CUSTOMER BASE AND WHAT ARE YOUR RETENTION RATES AND DO YOU HAVE A MODE THAT SOFTWARE IS ACTUALLY APPLYING TO AND INCREASING? THESE ARE THE THINGS THAT DEFINE WHETHER YOUR BUSINESS MODEL IS ON THE SOFTWARE CONTINUUM OR ON THE TRADITIONAL BUSINESS CONTINUUM? BOTH CAN BE FANTASTIC BUT THEY ARE RUN DIFFERENTLY AND THE CASH FLOWS ARE DIFF — GENERATED IN DIFFERENT WAYS. YOU HAVE TO RUN IT AND AN APPROPRIATE MATTER. WE WORK IN THINKING THE TECH WOULD MASK THE UNDERLYING ECONOMICS OF THE BUSINESS MODEL AND IT DOESN’T. IT IS CUSTOMER EXPERIENCE AND IT DOESN’T CHANGE YOUR BUSINESS MODEL. >>I’M ASKED THAT A LOT BY CEOS THINKING ABOUT GETTING READY TO GO PUBLIC. WHO IS YOUR PLAYBOOK? INSTEAD OF THE PLAYBOOK, YOU NEED TO THINK ABOUT WHAT YOUR BUSINESS LOOKS LIKE AND WHAT ARE THE KEY INDICATORS OF THE BUSINESS YOU WANT TO MARKET TO UNDERSTAND? HOW DO YOU DESCRIBE YOUR BUSINESS SO THE MARKET HAS AN OBJECTIVE UNDERSTANDING OF WHAT THE UPSIDE AND THE RISK IS? THAT IS ONE OF THE CHALLENGES OF THE IPO ROADSHOW. YOU ARE SELLING AT AT THE SAME TIME SETTING EXPECTATIONS. YOU WANT TO MAKE SURE THE MARKET UNDERSTANDS AND GETS EXCITED ABOUT IT, BUT THAT THEY DON’T ROTATE IN THEIR EXPECTATIONS. DEALING WITH HIGH EXPECT HAITIANS CREATES A LOT OF DOWNSTREAM DIFFICULTY. WE SAW THAT THIS YEAR FROM THE IPO. THERE WERE NUMBERS AND HIGH EXPECTATIONS AT THE FRONT HALF OF THE YEAR AND THE BACK HALF OF THE YEAR HAS BEEN DIFFERENT. THAT IS LITERALLY DRIVEN BY THE ENVIRONMENT WITH THE CHINA TARIFF WHARVES AND THE CHALLENGES EVERY DAY THAT OF CREATED VOLATILITY IN THE MARKET AS WE THINK ABOUT WHAT IT MEANS TO BE IN THE LONGEST BULL RUN IN THE HISTORY OF MANKIND. RIGHT? SO, THAT’S ANOTHER THING I WOULD SAY TO EXECUTIVES. YOU HAVE TO BE MENTALLY READY FOR THE EXTERNALITIES THAT YOU CANNOT CONTROL AND THAT YET PEOPLE WILL EXPECT YOU TO BE ABLE TO EXPLAIN THEM. >>YOU DEALT WITH THAT LAST WEEK, I THINK. YOU HAD NEWS ON MONDAY AND I REMEMBER YOU WRITING ABOUT IT AND YOU DEALT WITH IT THE SAME DAY. >>YOU PLAY THE LONG GAME. I’M GOING TO BE HERE IN FIVE YEARS AND 10 YEARS AND I’M BUILDING A BUSINESS THAT I THINK WILL CHANGE THE WAY PEOPLE WORK ALONGSIDE ERIN’S BUSINESS AND OTHERS. THE WAY I THINK ABOUT IT IS THAT I KNOW FOR MYSELF AND I TRY TO TRANSLATE IT TO MY EMPLOYEES THAT WE COULD HAVE THE BEST DAY AT WORK IN THE WORST DAY ON THE STOCK MARKET. AND LIKEWISE THE WORST DAY AT WORK IN THE BEST DAY ON THE STOCK MARKET. THE TWO THINGS ARE NOT WURLITZER. SO THERE IS NOT A TON OF EMPATHY FLOWING AROUND. YOU HAVE TO THINK ABOUT THE BUSINESS AND STAY FOCUSED ON THE LONG GAME AND MAKE SURE THAT YOU MANAGE THE RIGOR OF THE OPERATION. >>YEAH, I THINK THAT IN FRED’S PIECE THIS WEEKEND, IT’S ALL THEORETICAL UNTIL YOU GO PUBLIC. AS A PRIVATE COMPANY, YOU MORE OR LESS CONTROL TO A HIGH DEGREE YOUR EVALUATION. YOU GET TO CHOOSE WHEN YOU TAKE FUNDING AND THAT’S WHERE THE TURNS ARE AT. WHAT ARE THE BEST ONES? >>RIGHT, SO IT IS A VERY COMPANY FRIENDLY MARKET IN TERMS OF THE NARRATIVE AND BEING ABLE TO ENSURE YOU HAVE THE RIGHT STORY FOR EMPLOYEES AND THEN AGAIN WE HAVE MANY PRIVATE COMPANIES THAT HAVE PERFECTED THE ART OF DRIVING THAT. THE MOMENT YOU ARE A PUBLIC COMPANY, WITHIN 30 SECONDS OF PRESSING THE BUTTON AND LAUNCHING THE MARKET WHICH DOES EFFECTIVELY LAUNCH THE MARKET, YOU PRESS THE BUTTON.>>YOU GO TO PRESS THE BUTTON.>>I WAS INFORMED THAT EVEN IF I FELL OFF THE PODIUM, THEY WOULD STILL LAUNCH THE MARKET AND I FELT LIKE I HAD LESS CONTROL OF THE WHOLE ECONOMY THAT I HAD HOPED FOR ON OUR IPO DAY. BUT I WOULD SAY THAT THE MOMENT THAT YOU GO PUBLIC, WITHIN SECONDS, OTHER PEOPLE CONTROL YOUR VALUATION WITH EVERY SINGLE TRANSACTION. SO, THEY WILL BE DRIVING WHAT YOUR EMPLOYEES OR WHAT THE MARKET THINKS OF AS YOUR VALUATION FOR A VARIETY OF FACTORS THAT HAVE NOTHING TO DO WITH WHAT YOU DO INTERNALLY. IN MANY CASES THEY ARE DRIVEN INTERNALLY. I AM A FAN OF THE MARKET BECAUSE IT’S REALITY AND HOW YOUR VALUE — MAYBE YOU REACH YOUR MONTHLY QUARTERS AND THERE IS A DIFFERENTIAL AND YOU WORK TO MAKE SURE THE DIFFERENTIAL IS AS LIMITED AS POSSIBLE. >>AND TO BE CLEAR, THERE ARE BENEFITS OF RENOVATING AND THE MARKET. WE HAVE ONE THIRD OF THE FORTUNE 500. I THINK IT IS IMPORTANT FOR THE LARGE CUSTOMERS TO UNDERSTAND WE ARE A VIABLE BUSINESS THAT WILL BE AROUND A LONG TIME AND IS COMPLIANT. GOING THROUGH THE IPO PROCESS IS DEMONSTRATING YOUR METAL AND YOU CAN BE A PARTNER. THE IPO PROCESS CAN BE FUN TOO. IT IS A RALLYING CRY. >>DID YOU HAVE FUN? >>I DID. THERE’S A HIGH LEVEL OF CURIOSITY AND BREAKING THEM DOWN, ETC. . FOR US, THE CHALLENGE WAS TELLING A TECHNICAL STORY TO A NON-TECHNICAL AUDIENCE AND STILL BEING ABLE TO REFINE THE VALUE PROPOSITION IN HOW PEOPLE UNDERSTAND IT. THAT THE FINANCIAL ANALYST INVESTORS ARE PATTERN MATCHERS. YOU USE UBER FOR THIS OR THE BOX FOR THAT. THE CHALLENGES WHEN YOU ARE CREATING A CATEGORY THAT THERE IS THAT MUCH MORE ONUS ON YOU TO REALLY HELP THEM UNDERSTAND THE PROCESSES THAT YOU ARE SOLVING AND WHO YOU ARE SOLVING THEM FOR AND WHY YOU ARE UNIQUELY POSITIONED TO SERVE THE MARKET. WE ARE ON A JOURNEY OF LEARNING. I THINK THE PEOPLE IN THE INDUSTRY UNDERESTIMATE THE OPPORTUNITY WITH HOW EARLY THESE MARKETS ARE. NO, DIGITAL OPERATIONS AND REAL- TIME WORK IS DECENT, BUT NO ONE HAS HEARD OF IT AND IT’S UNFAMILIAR. YOU HAVE TO CONVINCE PEOPLE OF THE CATEGORY OF THE PRODUCT REVIEW AND LEADERSHIP. IF YOU LIKE A CHALLENGE, THAT IS FUN. IF YOU WANT IT ON A PLATE, THEN PROBABLY NOT SO MUCH. >>DO YOU AGREE?>>YEAH, THE THING I GET EXCITED ABOUT WHERE YOU THERE YOU LOOK AT ZOOM MORE SLACK, A LOT OF TIMES WE HAVE THOUGHT ABOUT DISRUPTION AS, OKAY I’M TAKING THE CURRENT MARKET TO MAKE IT MORE EFFICIENT, FASTER, CHEAPER AND A WAY THAT ONLY WE CAN DO. WHAT WE UNDERESTIMATE IS THAT WHEN YOU DO THOSE THINGS, HOW MUCH BIGGER IS THE MARKET? NOT TO X, THREE X AND SOMETIMES NOT EVEN 10 X. WHEN YOU THINK OF SOMETHING LIKE PAGER DUTY WHEN ONLY A SMALL SET OF LARGE ENTERPRISES IN THE WORLD HAD THEIR OPERATIONS FULLY ATTUNED AND FULLY AUTOMATED WITH ALL OF THE RIGHT ALERTS AND NOTIFICATIONS AND THE MACHINE AROUND WHAT IS GOING ON. IT WOULD BE THE COMPANIES THAT COULD AFFORD MILLIONS OF DOLLARS OF ENTERPRISE SOFTWARE PROJECTS INSIDE THEIR DATA CENTERS. THEN HE MOVED WHERE ANY DEVELOPER ON THE PLANET CAN USE THAT TECHNOLOGY. WE ARE TALKING MAYBE 100 OR 1000 AND WE ARE INSANELY EARLY. WHEN YOU LOOK AT THE NUMBERS OF CUSTOMERS THAT ALL OF US COLLECTIVELY WORK WITH, WE ARE IN THE EARLIEST OF INNINGS IN TERMS OF WHAT THE CLOUD WILL BE ABLE TO DO IN TERMS OF BUSINESSES GLOBALLY AND MORE OF THE END- USER ADOPTION THAT WILL HAPPEN IN THESE ORGANIZATIONS. I THINK THE BUSINESS MODELS WE ARE SEEING AS THE NEXT ERA OF ENTERPRISE WHERE IT IS MORE BOTTOMS UP IN SELF-SERVICE AND THE AUDIENCE IS MEASURED IN THE TENS OR MILLIONS OF PEOPLE AS OPPOSED TO THE THOUSANDS OR TENS OF THOUSANDS, IT WILL CHANGE THE LANDSCAPE. >>IS THAT TRUE OF BOX AS WELL? >>I HOPE SO. >>WE GOT OUR START IN THE FIRST WAVE OF CLOUD AND WE WERE ABLE TO RIDE THE FIRST WAVE OF CLOUD AND MOBILE. WHEN I LOOK AT OUR DATA AND THE CUSTOMER BASE — AS AN EXAMPLE FOR US, WE WILL DO $690 MILLION IN REVENUE THIS YEAR AND THE TOTAL SPEND THAT WE THINK WE CAN DISRUPT OR REPLACE IS 40 OR $50 BILLION. IT IS SMALL RELATIVE TO THE SIZE OF THE MARKET AND MOST OF THE MARKET WILL MOVE TO THE CLOUD OVER THE NEXT 2-5 YEARS. FOR ME, AND I HAVE THE GRAY HAIR TO PROVE IT, WE’VE BEEN DOING A LONG TIME AND HAVE THE TRACTION AND WE ARE STILL IN THE EARLIEST STAGES. WHEN WE GO TO BUSINESSES, AGAIN, GLOBALLY AND WE LOOK AT THE LEGACY WAYS OF WORKING THAT STILL EXIST IN THOSE ORGANIZATIONS THAT WILL MOVE TO THE CLOUD, WE ARE IN THE SINGLE- DIGIT PERCENTAGE POINTS OF THE JOURNEY AT OUR STAGE. >>YOU THINK THAT’S TRUE? >>CAN YOU VALIDATE WHAT I JUST SAID ABOUT MY BUSINESS? >>WELL –>>YOU HAVE TO BE SUPER OPTIMISTIC BE IN EITHER OF OUR JOBS. >>COMPLETELY. AS A CEO, EVERYBODY TEST YOUR CONVICTION ALL THE TIME. WHETHER YOUR FAMILY OR THE BUSINESS, ETC. . THERE IS SOMETHING NEW AND FRESH EVERY TIME YOU OPEN YOUR MOUTH. SOMETHING NEW AND SOMETHING BETTER AND YOU HAVE TO HAMMER AWAY AT THE SAME FUNDAMENTALS BECAUSE MOST ADULTS CAN’T LEARN SOMETHING UNLESS THEY HEAR IT THREE OR SEVEN TIMES AND OVER AND OVER AGAIN, ANYWAY. YOU ARE FIGHTING TO BE CONSISTENT AND STAIN YOUR COURSE AND ADOPTING YOUR NARRATIVE AND ALIGNING WITH YOUR WAY OF THINKING. AGAIN, SOMETHING NEW, FRESH, SMART, AND FUN. IF YOU ARE THE CHIEF STORYTELLER, YOU WANT TO GIVE THE PEOPLE WHAT THEY WANT AND YOU CAN’T ALWAYS DO THAT. IT’S TREACHEROUS TO DO THAT, I THINK. >>THE BALANCE IS EXTREME OPTIMISM WITH A HIGH DEGREE OF RIGOR AND SCRUTINIZING THE BUSINESS BECAUSE YOU HAVE TO MAKE SURE THE GAP BETWEEN OPTIMISM AND REALITY IS AS LIMITED AS POSSIBLE AND AS NARROW AS POSSIBLE, BUT YOU HAVE TO BE OPTIMISTIC IN OUR JOBS BECAUSE OF THE MARKETS AND WHAT WE HAVE TO CREATE. FOR US, IT COMES WITH THE TERRITORY OF BEING A PUBLIC COMPANY. WE HAVE DIFFERENT INVESTORS WITH DIFFERENT VIEWS ON THE PROCESS. WE ACTUALLY AGREE WITH MOST OF THE VIEWS WE HEAR ABOUT, ESPECIALLY THE VIEWS OF DRIVING MORE OPERATING PROFIT AND GROWTH . SO, I HAVE FOUND FEW TIMES WHERE WE HAVE BEEN MISALIGNED WITH INVESTORS. WE MAY HAVE DIFFERING VIEWS OF TIME FRAMES AS TO WHEN THEY WANT TO SEE RESULTS IN EXECUTION, BUT IN GENERAL, I THINK INVESTORS HAVE A PRETTY GOOD UNDERSTANDING OF AT LEAST OUR SIDE OF THE BUSINESS MODEL WITH CLOUD AND SAS. THERE IS THE SPEED AT WHICH THEY WANT TO GET TO TOP LEVEL SENATE MANY CASES WE SHARE THOSE VIEWS. >>YOU HAVE TO BE RESILIENT AS WELL AND GET YOUR TEAM READY TO BE RESILIENT. YOU GET YOUR EMPLOYEES READY TO BE RESILIENT AND STAVE FOCUSED ON WHAT IS AROUND THEM AS OPPOSED TO WHAT PEOPLE SAY THIS WEEK, LAST WEEK OR EVEN NEXT WEEK. IT CAN BE DISTRACTING. WE ARE IN A TIGHT TALENT MARKET AND WE NEED TO LOOK AT HOW UNIQUE THE OPPORTUNITIES ARE THAT WE CAN. MAYBE 5% OR 10% OF ALL SAAS COMPANIES . THE CHANCE OF FINDING A CAREER OPPORTUNITY SOMEWHERE ELSE IS LESS THAN A CHANCE OF BEING STRUCK BY LIGHTNING TWICE. >>REALLY? THAT IS A GOOD ANALOGY, I NEED TO BE CAREFUL. >>YOU COULD ALSO DIE BY SLIPPING IN THE SHOWER WHICH IS ANOTHER. >>THE CHALLENGE IS THERE IS A SHINY, OPTIMISTIC, NEW STORY ON EVERY STREET IN EVERY BLOCK. YOU HAVE TO BE REMINDING YOUR TEAM OF THE MISSION YOU ARE ON AND THE FACT YOUR VALUES HAVE NOT CHANGED AND THEN GOING PUBLIC DOES NOT CHANGE IT AND THAT IT’S A START. IF YOU LOOK BACK OVER TIME, PARTICULARLY IN SAAS AND CLOUD COMPANY, THEY HAVE CREATED FAR MORE VALUE POST-IPO THAN THEY DID PRE-IPO. YET EMPLOYEES THINK THAT IPO IS THE EXIT AND THEY NEED TO FIND A NEW START UP. JUST LOOK AT THE DATA.>>SO YOU HAVE TO DEAL WITH THE EMPLOYEES THAT WANT TO LEAVE?>>CULTURE MATTERS AND IT’S A PRIORITY FOR THE ENTIRE LEADERSHIP TEAM AND GIVING BACK. WE TOOK THE 1% PLEDGE TWO YEARS AGO COMMITTING 1% OF OUR EQUITY, 1% OF OUR PROFIT AND 1% OF EMPLOYEE TIME FOR NOT-FOR- PROFIT IN THE COMING DAYS. FUNDING A BROWN $20 MILLION OF OPPORTUNITY FOR THE COMMUNITY AROUND US. TO ME, IS THESE KINDS OF THINGS THAT FULFILL THE MISSION OF THE EMPLOYEES YOU ARE WORKING WITH. >>AND, I THINK THE STRUGGLE WE ALL SHARE IN THAT MANY FOLKS IN THIS ROOM SHARE IS THAT WHEN YOU ARE BUILDING A COMPANY THAT STARTS PRIVATE AND IT’S GOING WELL AND GROWING AND MAYBE YOU DON’T HAVE EMPLOYEES THAT HAVE BEEN THROUGH DIFFICULT PERIODS BECAUSE YOU ARE PAST THAT POINT. OUR FIRST THREE OR FOUR YEARS OF THE COMPANY WERE THE HARDEST AND MOST GRUELING YEARS EVER. THERE WERE HUNDREDS OF TIMES WE COULD HAVE GONE OUT OF BUSINESS. YOU MAY HAVE PEOPLE COMING IN THAT DIDN’T EXPERIENCE THAT AND HAVE ONLY EXPERIENCED THE ROCKETSHIP. NOW WE NEED TO RUN THE BUSINESS AS A HEALTHY PUBLIC COMPANY AND IT’S IMPORTANT ON THE RIDE UP THAT YOU GET PEOPLE IN FOR THE RIGHT REASON. YOU GET THEM FOR THE CULTURE AND THE MISSION AND THE VALUATIONS AND THE PRIVATE MARKET STORIES, HOPEFULLY YOU ARE ABLE TO ABSTRACT THAT AWAY AS MUCH AS POSSIBLE FROM WHY PEOPLE ARE JOINING THE COMPANY AND WHAT THE MISSION IS YOU ARE DOING. AND, WHY PEOPLE ARE ALONG FOR THE RIDE. >>YOU HAVE TO BE READY FOR THE RIDE. THERE IS NO BUSINESS CLASS ON THE ROCKETSHIP. IT WILL BE BUMPY AND YOU MAY THROW UP, BUT IT WILL BE INTERESTING AND YOU WILL LEARN THE WHOLE TIME. >>THE ANALOGY IS SLIPPING IN THE SHOWER, WHICH WOULD YOU RATHER HAVE? >>NO ONE THREW UP ON STAGE, SO WERE WE ARE GOOD. >>[ LAUGHTER ]. >>WE ARE OUT OF TIME, THANK YOU. >>THANK YOU. >>PLUS. — [ APPLAUSE ]. >>WE ARE ABOUT ONE HOUR IN, LET’S TAKE A TEMPERATURE OF THE ROOM. HOW ARE YOU FEELING? >>[ APPLAUSE ]. >>ALL RIGHT, MILDLY ENTHUSED. RAISE YOUR HAND IF YOU HAVE HEARD OF YOUTUBE. COME ON GUYS, I AM OUT HERE GIVING MYSELF TO YOU. THANK YOU KIERSTEN. PLEASE WELCOME TO THE STAGE, NUMBER TWO AT YOUTUBE. A WARM WELCOME PLEASE.>>[ ♪ ].>>THANK YOU.>>ABSOLUTELY, THANK YOU FOR BEING HERE. >>THANK YOU FOR HAVING ME. >>I MADE THIS INTERVIEW 20 MINUTES AND ONE SECOND LONG. THAT’S A YOUTUBE JOKE. IF YOU ARE A YOU TUBER, YOU GOT IT. >>LET’S START WITH YOUTUBE MUSIC, LET’S START WITH THAT. >>IT’S A MAJOR PRODUCT THAT YOUTUBE HAS ANNOUNCED. WE WERE INFORMED WITH THE WAY PEOPLE USE THE PLATFORM. HOW DOES IT COMPETE AND HOW WILL IT BE WITH APPLE AND SPOTIFY? >>SURE. MUSIC HAS BEEN A CORE PART OF YOUTUBE REALLY SINCE THE DAYS OF THE FOUNDING OF THE PRODUCT AND WHEN THE PRODUCT WAS FIRST CREATED. LOTS OF USERS COME TO YOUTUBE TO DISCOVER NEW MUSIC AND LISTEN TO FAVORITE MUSIC. THAT IS ALWAYS BEEN A PART OF YOUTUBE. WE DECIDED TO LEAN INTO THAT AND FIND WAYS WE COULD SERVE THE MUSIC LOVER ON OUR PLATFORM. IT STARTED WITH THE IDEA OF, WHAT IF WE HAD ACTUALLY HAD A SUBSCRIPTION SERVICE THAT WAS BUILT FOR MUSIC LOVERS ON YOUTUBE. WE STARTED WITH SOMETHING CALLED MUSIC KEY WHICH SOME OF YOU MAY REMEMBER FOUR OR FIVE YEARS AGO. IT WAS A SERVICE HELD ON THE CORE APP. WHAT WE HAVE LEARNED FROM THAT WAS TWO THINGS. ONE IS THE MODE USERS ARE AND WHEN I LISTEN TO MUSIC ON YOUTUBE IS OFTEN DIFFERENT. IT IS LEANED BACK AND DRIVEN MORE THAN THE AUDIO THAN THE VIDEO ALTHOUGH VIDEO IS A PART OF IT. ALSO MUSIC LOVERS ON YOUTUBE LOVE THE REST OF YOUTUBE AND SO WE DESIGNED OUR YOUTUBE PREMIUM SUBSCRIPTION SERVICE WHICH IS A MUSIC SUBSCRIPTION SERVICE AND ALSO BRINGS THINGS LIKE BACKGROUND ADS AND ONLINE PLAY. THE REASON MUSIC LOVERS COME TO YOUTUBE ARE SEVERAL REASONS. ONE IS THE CATALOG THAT OTHER PLATFORMS MAY HAVE. IT GOES DEEPER WITH LIVE TRACKS OR BESIDE TRACKS. >>ACCESSES PART OF IT, RIGHT? THE CATALOG IS ALMOST ACHIEVING PARITY WITH SERVICES.>>WHAT WE HAVE IS DRAMATICALLY DEEPER AND SOMETHING MUSIC YOU — LOVERS HAVE TOLD US THEY LOVE OVER AND OVER AGAIN. IT’S OUR JOB TO DISCOVER THAT IN A WAY THAT’S EFFORTLESS AND EASY AND WHERE THEY LISTEN TO THEIR FAVORITE MUSIC AND ARTISTS AND ALSO DISCOVER NEW MUSIC ALONG THE WAY. AND BY THE WAY, SOMETHING WE THINK THAT IS UNIQUE TO THE YOUTUBE PLATFORM GIVEN OUR HERITAGE OF CONNECTING CREATORS WITH FANS IS A WAY TO CONNECT MUSIC LOVERS WITH THEIR FAVORITE ARTISTS TOO.>>YOU HAVE SOME NEW PLAYLISTS ON YOUTUBE, WHAT IS THAT? >>THE MUSIC APP HAS BEEN OUT A COUPLE OF YEARS AND WE HAVE LAUNCHED THE PREMIUM SERVICE IN 71 COUNTRIES. AS WE HAVE ROLLED IT OUT, WE HAVE LOTS OF FEEDBACK FROM USERS ABOUT WHAT THEY WOULD LIKE TO SEE. ONE THING THE TELIS REPEATEDLY IS THEY LOVE THE FACT THAT THROUGH A COMBINATION OF THINGS LIKE MACHINE LEARNING AND HUMAN BEINGS THAT ARE MUSIC LOVERS, WE PUT ALL THIS GREAT MUSIC IN FRONT OF OUR USERS IN THE YOUTUBE MUSIC APP. SO, WHAT WE ARE ANNOUNCING TODAY IS BASICALLY TO RENEW WAYS FOR USERS ON THE MUSIC APP TO ENJOY AND DISCOVER NEW MUSIC . SO, WE ARE INTRODUCING NEW PLAYLISTS ON THE PLATFORM. ONE WILL BE WHAT WE ARE CALLING THE DISCOVER MIX. IT’S A WAY TO TAKE YOUR PERSONALIZED PREFERENCES AND WHAT YOU LISTEN TO AND USE THAT AS A SEED TO DISCOVER NEW MUSIC ON THE PLATFORM. >>SO IT USES HISTORICAL DATA. >>IT USES THE YOUTUBE APP AS WELL AS THE MAIN APP AND THEN WE HAVE ANOTHER MIX WHICH IS NEW RELEASES. IT’S A WAY TO DISCOVER EVERY WEEK A NEW MUSIC PROMPT. IT’S PRIMARILY FRIDAYS AND IT’S A WAY TO DISCOVER NEW MUSIC WE THINK YOU WILL ENJOY BASED ON YOUR HISTORICAL REFERENCES. THEN REALLY SORT OF MAKING IT EFFORTLESS WHEN YOU REALLY WANT YOUTUBE TO BASICALLY PLAY MUSIC THAT WE KNOW YOU ARE GOING TO LIKE YOU TO HELP YOU DISCOVER NEW MUSIC AND ARTISTS ALONG THE WAY. WE FOCUS ON WHAT YOU TRULY LOVE WHICH IS YOUR MIX. YOU DISCOVER THE NEW RELEASES MIX AND YOUR MIX AND IT IS WAYS DIRECTLY ON THE HOME SCREEN THAT YOU WOULD BE ABLE TO DO MUSIC ON YOUTUBE.>>WHAT IS THE DEFAULT LISTENING EXPERIENCE?>>FOR THOSE OF YOU WHO MAY NOT KNOW, WE MERGED THE YOUTUBE PRODUCT ENGINEERING TEAMS WITH THE GOOGLE PLAY ENGINEERING TEAMS A FEW YEARS AGO. WE SAID WE WOULD COMBINE THE BEST OF THE PRODUCTS INTO WHAT WE WOULD CALL YOU TO MUSIC. AND, WE ARE WELL ALONG THE WAY AND THAT JOURNEY. YOUTUBE MUSIC IS AVAILABLE IN 71 COUNTRIES AND WE CONTINUE TO ROLL IT OUT THROUGHOUT THE WORLD. BUT, WE ARE GOING TO ONLY SORT OF CUT OVER COMPLETELY TO YOU TO MUSIC WHEN WE KNOW WE HAVE SATISFIED ALL OF THE USE CASES THAT MANY OF THE USERS LOVED ABOUT GOOGLE PLAY MUSIC. THINGS LIKE SUPPORT YOUR MUSIC AND BEING ABLE TO PLAY MUSIC AND PLAY AUDIBLE FILES ON ANDROID DEVICES. TO BRING OVER THE WORK YOU DID IN TERMS OF YOUR FAVORITE PLAYLISTS, ETC. FROM GOOGLE MUSIC. THOSE ARE THE FEATURES WE WANT TO SUPPORT AS FIRST-CLASS CITIZENS OF THE YOUTUBE MUSIC APP.>>DO YOU HAVE A TIMELINE? >>WE WILL BE DRIVEN BY THE BEST USE CASES AND WE WOULD LIKE TO DO IT IN THE FUTURE. WE WANT TO MAKE SURE WE NAIL THAT FOR THE GOOGLE PLAY MUSIC LOVERS BEFORE WE MAKE THAT. >>OKAY, COOL. LET’S SHIFT GEARS AND TALK ABOUT SOME OF THE OTHER CONTENT ON YOUTUBE CREATED BY A VAST ARRAY OF CREATORS. WHAT INTERESTING DEVELOPMENT RECENTLY HAVE YOU SEEN DEBUTED ON YOUTUBE AND ON NETWORK TV AT THE SAME TIME? HOW DID THAT DEAL COME TOGETHER?>>SO, LILY SANG HAS BEEN AN INCREDIBLY SUCCESSFUL YOUTUBE CREATOR AND HER STORY IS AN AMAZING ONE. SHE STARTED TO TELL STORIES ABOUT HER OWN LIFE IN A VERY SORT OF HUMOROUS AND DOWN TO EARTH WAY. THEN, VERY CLEARLY, HER AUTHENTICITY AND PUTTING HERSELF OUT THERE CAME THROUGH, AS IT DOES FOR ALL SUCCESSFUL YOU TUBER’S. IT IS KIND OF CORE OF WHAT MAKES A SUCCESSFUL CREATOR ON YOUTUBE. SHE DEVELOPED A FOLLOWING OF MILLIONS AND OBVIOUSLY BECAME VERY POPULAR ON YOUTUBE AND THROUGHOUT THE INDUSTRY AND THE MEDIA CULTURE AS A RESULT. WHEN THEY WERE LOOKING FOR A REPLACEMENT FOR A HOST FOR THAT LATE-NIGHT SHOW, IT MADE SENSE IN A COUPLE OF WAYS. REALLY, NUMBER ONE IS LILY HAS A NATURAL WAY OF CONNECTING WITH AUDIENCES THAT IS CLEARLY APPARENT IF YOU SPEND FIVE MINUTES WATCHING HER. YOU CAN SEE THAT. ALSO BECAUSE OF THE NATURE OF A LOT OF THE LATE-NIGHT CONTENT, IN PARTICULAR, IS IT IS VIEWED NOT LITERALLY — LINEAR ONLY WHEN IT IS BEING BROADCAST, BUT IT IS VIEWED SLICED UP AND IN CHUNKS WHEN IT’S AVAILABLE. THERE ARE YOUTUBE CHANNELS WHERE THEY GET BROAD DISTRIBUTION AND CONSUMPTION WHERE FANS CAN INTERACT AND COMMENT. SO, THAT ASPECT COMBINED WITH HER CONNECTION WITH FANS WAS A REASON SHE WAS A NATURAL CHOICE FOR THIS. SHE WAS ON TWO WEEKS AGO. >>IT LOOKS LIKE IT’S A HIT ALREADY. >>FOR THOSE YOU TUBER’S WHO DEVELOP A ROBUST AUDIENCE, HOW DO YOU STOP THEM FROM JUMPING SHIP TO A NETWORK? WHAT YOU OFFER THAT’S BETTER FOR THEM?>> I SPENT A LOT OF TIME TALKING TO YOUTUBE CREATORS. EVERY TIME I HAVE TALKED TO LILLY HERSELF, HER EXAMPLE IS ACTUALLY SOMETHING THAT CARRIES ACROSS TWO OTHER TOP YOU TUBER’S LIKE HER. SHE KNOWS HER MOST ENGAGED AND PASSIONATE FANS ARE ON YOUTUBE. SHE TELLS US THAT REPEATEDLY. SHE FIRST LAUNCHED AND BROKE HER SHOW ON YOUTUBE BECAUSE THAT’S WHERE SHE KNOWS HER MOST AUTHENTIC FANS ARE AND SHE WILL BUILD ON THAT FAN BASE WITH HER NEW SHOW IN ALL OF HER OTHER PROJECTS. WHETHER A CREATOR LIKE HER OR OTHER CREATORS WHO GO ON TO THINGS LIKE IN A NEW BOOK, OR COUNTING A MAKEUP COMPANY. WE HAVE CREATORS WHO HAVE FOUNDED KITCHENWARE COMPANIES. THEY KNOW THE ESSENCE OF WHAT THEY DO IS THE CONTENT THEY PRODUCE ON YOUTUBE AND THE CONNECTIVITY THEY HAVE WITH THEIR AUDIENCE. THEY TELL US THAT IT’S ULTIMATELY THEIR HOME. IT’S NEVER ABOUT THEM GOING ON IN DOING SOMETHING NEW AND LEAVING YOUTUBE BEHIND. IT’S HOW DO THEY ENHANCE WHAT THEY DO ON YOUTUBE AND THE OPPORTUNITIES THAT COME ABOUT BECAUSE OF THEIR INCREDIBLE SUCCESS ON PLATFORMS LIKE YOUTUBE. >>OKAY, COOL. LET’S TALK A LITTLE BIT ABOUT — WE WILL START IT OFF TALKING ABOUT THE WAY YOUTUBE USES MACHINE LEARNING AND EVEN CURE RATION.>>ONE OF THE BIG FEARS IS BEING D MONETIZED. THEY SEE SOMETHING ON THEIR CHANNEL AND THERE IS AN ALGORITHM AND THEY CAN’T SELL IT TO INVESTORS. WHAT CAUSES A YOU TUBER TO BE D MONETIZED AND IS THERE A WAY TO BE MORE TRANSPARENT? >>ONE THING THAT’S GREAT ABOUT YOUTUBE IS THE MAGIC OF AN OPEN PLATFORM LIKE YOUTUBE. IT’S A PLACE WHERE ANYONE WITH A CREATIVE IDEA OR STORY TO TELL CAN CREATE AN IDEA AND SHARE IT WITH THE WORLD. THAT IS BEEN THE CASE SINCE THE FOUNDING OF YOUTUBE AND IT REMAINS THE SORT OF MAGIC BEHIND WHY YOUTUBE CREATORS HAVE ENJOYED THE SUCCESS THEY HAVE. THAT’S A CORE PIECE THAT WE WOULD NEVER WANT TO CHANGE. HAVING SAID THAT, WE’VE ALWAYS HAD A SET OF GUIDELINES THAT GOVERN THE CONTENT ALLOWED ON THE PLATFORM VERSUS NOT. THINGS LIKE HATE SPEECH AND HARASSMENT AND GRAPHIC VIOLENCE HAVE NEVER HAD A PLACE ON YOUTUBE AND WE WANT TO BE CRYSTAL CLEAR ABOUT THAT. WE TRY TO BE AS TRANSPARENT AS POSSIBLE ABOUT THOSE POLICIES. IN ADDITION TO THE COMMUNITY GUIDELINES, WE ALSO HAVE ADVERTISER GUIDELINES. AGAIN SOME — THAT IS SOMETHING WE TRY TO BE TRANSPARENT ABOUT FOR ADVERTISERS RUNNING MEDIA CAMPAIGNS ON YOUTUBE. THOSE ARE THE SET OF RULES THAT GOVERN WHAT KIND OF CONTENT IS ELIGIBLE FOR MONETIZATION VERSUS NOT. WE WANT TO MAKE SURE WE DO IT IN A WAY THAT IT IS AS STABLE AS POSSIBLE FOR THEM. WE TRY TO PUBLISH THOSE RULES AND WE ALSO HAVE AN APPEALS PATH SO THAT IF CREATORS BELIEVE A VIDEO WAS WRONGLY D MONETIZED, THEY CAN APPEAL THAT . THERE IS A TIME AND PROCESSING THAT APPEAL. THEN THERE IS A NEW PROGRAM WHICH IS BASED ON THE PREMISE THAT THE CREATORS THEMSELVES NO BEST ABOUT WHAT IS IN THEIR CONTENT. IT IS SELF CERTIFICATION WHERE THEY CAN TELL US WHAT’S IN THE VIDEO. WHETHER THE SWEARWORDS ARE CONTROVERSIAL CONTENT, THEY CAN TELL US THAT AHEAD OF TIME. WE CAN USE THAT IN A WAY TO TRUST THE CREATORS. OF COURSE, THERE ARE AUDITS AND IF SOMEONE VIOLATES THAT TRUST, THEY ARE PART OF THIS PROGRAM. WE WANT TO MOVE TO THAT TYPE OF A MODEL BECAUSE WE THINK IT IS TRANSPARENT AND STABLE FOR CREATORS AND IT ALSO MAKES ADVERTISERS KNOW WHAT IS RUNNING AND THEY ARE COMFORTABLE WITH THAT AS WELL. ONE OF THE THINGS THAT ADVERTISERS LOVE ABOUT YOUTUBE IS THE FACT IT IS DIFFERENT THAN OTHER PLACES SUCH AS TELEVISION AND WHAT HAVE YOU. AGAIN, IT’S THE AUTHENTICITY OF THE CREATORS. THE REASON ENGAGEMENT IS SO HIGH ON OUR PLATFORM IS THIS ENGAGEMENT. IT’S BECAUSE OF THE NATURE OF THE CONTENT. SOMETIMES IT’S EDGY BUT IT’S ALWAYS AUTHENTIC AND IT REPRESENTS CONTACT BETWEEN THE CREATORS SUCH AS LILLY SINGH AND HER FANS. >>I WOULD LOVE TO GET FROM YOU A WINDOW OF THE PROCESS WITH HOW YOU BUILD ALGORITHMS AND YOU DO CURRENT — CURE RATION.>>THEY PUBLISHED AWAY TO GET YOU D MONETIZED STRAIGHT OUT. THE VIDEOS WERE CAUGHT UP IN THE ALGORITHMIC DRAGNET. CAN YOU TELL US HOW YOU COME TO THOSE DECISIONS INTERNALLY?>>I WILL GIVE A GENERAL ANSWER IN TERMS OF HOW THIS WORKS IN TERMS OF A BROAD PHILOSOPHY STANDPOINT ON A PLATFORM LIKE YOUTUBE. IT’S A COMBINATION OF BOTH OF THOSE THINGS. SO, TO GIVE YOU A SENSE OF THE SCALE, WE HAVE ABOUT 500 HOURS OF CONTENT UPLOADED TO YOUTUBE EVERY SINGLE MINUTE OF EVERY DAY. IT IS ENORMOUS AND THE SCALE WITH WHICH WE HAVE TO ENFORCE OUR POLICIES ARE IN THE GUIDELINES AND IS QUITE LARGE. SO, WE HAVE TO USE MACHINE LEARNING ALGORITHMS AND CLASSIFIERS FOR WHAT MIGHT BE POLICY VIOLATION OR MAY OR MAY NOT BE SUITABLE FOR ADVERTISERS. OFTENTIMES WE ALSO COMBINE THAT WITH HUMAN REVIEWS. WE ANNOUNCED A COUPLE OF YEARS AGO THAT WE WERE GOING TO SCALE UP TO 10,000 HUMAN REVIEWS. AND TO GIVE A CONCRETE EXAMPLE, YOU KNOW MACHINES ARE GOOD AT FINDING POTENTIAL CANDIDATES OF CONTENT THAT MAY VIOLATE POLICY. LET’S SAY IT IS VIOLENT EXTREMISM. THEY CAN IDENTIFY VIDEOS THAT DETECT GRAPHIC VIOLENCE. THEY MAY SEEM LIKE VIDEOS THAT MAY BE A TERRORIST ORGANIZATION WOULD PUT UP TRYING TO RECRUIT PEOPLE. BUT, ONLY HUMANS CAN MAKE THE DECISION IN TERMS OF WHETHER THAT VIDEO IS ACTUALLY DOING THAT OR NOT. >>OR MAYBE IT’S AN ACTIVIST SAYING THIS IS A BAD THING AND WE SHOULD WATCH OUT FOR THIS. >>IT DEPENDS ON THE CONTEXT OF THE VIDEO, ETC.. WE USE A COMBINATION OF MACHINE LEARNING AND HUMANS. WE TRY TO BE A STERN PARENTS ABOUT THE RESULT AS POSSIBLE. FOR EXAMPLE, IN OUR MOST RECENT TRANSPARENCY REPORT WHICH WAS THIS YEAR, WE SAID WE TOOK DOWN 9 MILLION VIDEOS. IT SOUNDS LIKE A LOT AND IT’S A TINY FRACTION OF 1% OF THE ENGAGEMENT ON THE PLATFORM. OVER 80% OF THOSE VIDEOS, WE WERE ABLE TO REMOVE THROUGH A COMBINATION OF MACHINES AND HUMANS WITHOUT ANY EXTERNAL USER ACTUALLY SEEN THE VIDEOS. THAT, FOR US, IS A SUCCESS STORY. TO MAINTAIN OUR SYSTEM WHILE MAINTAINING THE MAGIC OF THE OPEN PLATFORM.>>ONE THING THAT IS THE CRUX OF THIS DISSOCIATIVE — DISCUSSION ABOUT SUPPORTABLE CONTENT AND POTENTIALLY THE PEOPLE IS WATCH NEXT. IT ALLOWS PEOPLE TO ESCAPE THROUGH TOPICS. I HAVE USED IT TO SKATE THROUGH HOW TO TOPICS OR HOW TO TO DO A PARTICULAR OBSESSION OF MINE AT THE MOMENT. MAYBE IT IS MODEL AIRPLANES OR SHOES OR WHATEVER. IT IS REALLY GREAT IN THOSE INSTANCES, BUT SOMETIMES YOU CAN KIND OF FALL INTO A RABBIT HOLE THAT GETS WORSE AND WORSE. ARE YOU FIGURING OUT HOW TO STOP THAT IF PEOPLE GET INTO AREAS WHERE THEY ARE ABOUT TO FLAG THE VIDEO? >>AND IN YOUR EXAMPLE TO ILLUSTRATE IT, THE VAST MAJORITY OF CONSUMPTION ON THE PLATFORM ARE THOSE TOPICS YOU LOVE. YOU KNOW, HELPING PEOPLE DISCOVER NEW TOPICS. THINGS LIKE YOUR FAVORITE LATIN MUSIC ARTIST OR AFRO BEAT ARTIST. YOU KNOW, CREATORS LIKE LILLY SINGH, OR ANOTHER CREATOR WHO JOINED ME ON STAGE EARLIER THIS YEAR, MOLLY BURKE WHO IS BLIND BUT AN INSPIRATION TO YOUNG WOMEN AND GIRLS ALL ACROSS THE WORLD. THOSE TYPES OF STORIES ARE WHAT THE MAGIC OF YOUTUBE IS ALL ABOUT. BACK TO YOUR QUESTION, THAT IS WHAT USERS ARE DISCOVERING. WHEN WE LOOK AT THIS MORE CLOSELY, WE SEE LOTS OF USERS ARE RECOMMENDING CONTENT THAT YOU WOULD CALL MORE MAINSTREAM. SOMETIMES IT’S IN ANOTHER DIRECTION AND EVERY JOURNEY IS DIFFERENT. AND, ONE THING WE WANT TO AVOID IS SENDING USERS DOWN THE PATH TO MORE AND MORE EXTREME CONTENT . ESPECIALLY WHEN THAT EXISTS ON OUR PLATFORM BUT IT IS BORDERLINE. MAYBE IT IS SPREADING HARMFUL MISINFORMATION . SO, WE HAVE HAD A CONCERTED EFFORT THAT WE ANNOUNCED BACK IN JANUARY THAT WE ARE TRYING TO REDUCE RECOMMENDATIONS OF THAT TYPE OF CONTENT IN PEOPLE’S FEES, ETC. IT IS REALLY CHANGES AND IMPROVEMENTS THAT WE MAKE TO THE RECOMMENDATION ALGORITHMS. WE HAVE HAD 20 CHANGES SINCE WE ANNOUNCED THIS BACK IN JANUARY. AS A RESULT, THERE IS A 50% REDUCTION IN USER EXPORT IS YOUR TO WHAT WE WOULD CONSIDER BORDERLINE. WE WILL CONTINUE DOWN THAT PATH. IT REPRESENTS A NEEDLE IN A HAYSTACK, THE POINT THAT I MADE WITH A FRACTION OF 1% OF THE CONTENT. BUT WE WILL CONTINUE TO IMPROVE OUR RECOMMENDATION ALGORITHMS TO DRIVE THAT AS CLOSELY AS POSSIBLE TO ZERO FOR OUR USERS AS WE POSSIBLY CAN. >>THANK YOU. AS A HEAVY USER OF THE PLATFORM, I APPRECIATE IT, THANK YOU. >>AND THEN THERE IS SUBSCRIPTION CONTENT AND YOUTUBE HAS HAD SUCCESS IN THAT ARENA. IS THERE ANY ADVICE YOU COULD GIVE THEM, A.K.A. US?>>[ LAUGHTER ]. AS I SAID AT THE BEGINNING OF THE CONVERSATION, OUR SUBSCRIPTION PRODUCT IS YOUTUBE PREMIUM WHICH BRINGS THE BEST OF YOUTUBE BACKGROUND THAT ARE ADS FREE AND OFF-LINE. WE HAVE HAD THAT ON THE MARKET A COUPLE OF YEARS. THERE’S ANOTHER SUBSCRIPTION PRODUCT CALLED YOUTUBE TV WHICH IS MEANT TO BE A REPLACEMENT FOR CABLE. IT IS TELEVISION DOWN THE WAY WE WOULD WANT IT TO BE DONE. AND MY KEY LEARNINGS FROM A PRODUCT DEVELOPMENT STANDPOINT AROUND BOTH OF THOSE SUBSCRIPTION PRODUCTS, THE FIRST IS FOCUS ON BEING CRYSTAL-CLEAR AND AS SIMPLE AS POSSIBLE ABOUT THE USER VALUED PROPOSITION. WHAT ARE THEY GETTING WHEN THEY ACTUALLY PAY YOU $12 PER MONTH, OR WHATEVER THEY PAY YOU FOR YOUR SUBSCRIPTION PRODUCT. TRY TO BE AS CLEAR AS POSSIBLE AND THAT IS POINT NUMBER ONE. SOUNDS OBVIOUS, BUT THAT’S WHERE YOU SHOULD SPEND THE MOST TIME ABOUT BEING ABLE TO ARTICULATE THAT VALUE PROPOSITION. AND IN THE SECOND THING WHICH IS A LITTLE LESS OBVIOUS IS THAT A LOT OF WHAT MATTERS, ESPECIALLY IN THE EARLY DAYS, IS YOU BUILD THAT RAMP TO THE GROWTH OF SUBSCRIBERS. IT IS ALL THE BLOCK AND TACKLE ISSUES AROUND HOW YOU OPTIMIZE THE FUNNEL OF ACQUISITION, ROOM RETENTION, INTERN MANAGEMENT. HOW DO YOU MONITOR HOW MUCH CHURN THERE IS IN THE FIRST WEEK OR MONTH AND THEN WHEN DOES IT STABILIZE? IS IT THE SECOND WEEK OR THE SECOND MONTH? UNDERSTANDING THE CUSTOMER ACQUISITION. IT IS REALLY HOW YOU MANAGE THE FUNNEL AND HOW WELL YOU UNDERSTAND THE LEAKING IS OF THE FINAL. DO YOU SUPPORT IF YOU ARE A GLOBAL PRODUCT AND WANT TO BE IN ALL THE MARKETS OF THE WORLD? DO YOU SUPPORT — HOW DO YOU HANDLE THE CANCELLATION FLOW? HOW DO YOU REMIND USERS THAT ARE ALREADY SUBSCRIBED ABOUT THE VALUATION OF YOUR PRODUCT? IT IS ALL THE BLOCK AND TACKLE AND THE NOT SO SEXY THINGS OF THE PRODUCT THAT COME INTO PLAY IN TERMS OF REALLY GETTING YOUR SUBSCRIPTION BUSINESS OFF TO A NICE START. THOSE ARE SECONDARY AFTER REALLY MAKING SURE YOU NAIL THAT CORE VALUE PROPOSITION. >>EXCELLENT. I’M SURE SOMEONE TAKE — TOOK NOTES AND I WILL REVIEW THOSE LATER. >>THANK YOU.>>[ APPLAUSE ]. >>OKAY, LIKE I SAID, WE HAVE 1 MILLION THINGS GOING ON AT ANY ONE GIVEN TIME IN THIS VENUE. ONE THING RIGHT NOW IS HAPPENING ON THE Q&A STAGE, HOW TO MAKE YOUR MEDIA STRAY TO TAKE STRATEGY. WE ALSO HAVE BROOKE HAMMER LAYING ON THE Q&A STAGE RIGHT NOW. AT 11:45 WE HAVE HOW TO EVALUATE TALENT AND MAKE DECISIONS WITH RAY DALIA WHO IS THE COFOUNDER AND CIO. THERE WILL BE A BOOK SIGNING AFTERWORDS IF YOU WANT TO SEE THAT. BUT NOW ON THE MAIN STAGE, WE ARE JOINED BY LOCKHEED MARTIN. UNFORTUNATELY MARILYN HUGHES WAS NOT ABLE TO MAKE IT DUE TO AN ACCIDENT BUT WE ARE EXCITED TO SIT DOWN WITH THE VICE PRESIDENT AND GENERAL MANAGER OF LOCKHEED — AEROSPACE AT LOCKHEED MARTIN, DARRELL ETHERINGTON.>>[ APPLAUSE ].>>HELLO, WELCOME. RIGHT BACK TO SPACE. I THINK ONE OF THE INTERESTING THINGS WE WERE TALKING ABOUT WAS A LOT OF THE TECHNOLOGY THAT LOCKHEED HAS BUILT INVOLVES A LOT OF THE CONSUMER TECHNOLOGY WE HEAR ABOUT. TALK A BIT ABOUT LOCKHEED’S BUSINESS AND THE COMMERCIAL AEROSPACE. >>SO, WE ARE BUILDING SATELLITES FOR MILITARY INTELLIGENCE AND COMMERCIAL APPLICATIONS AND COMMUNICATIONS. WE HAVE ACTIVITY ACROSS THE WORLD. IN ADDITION TO THAT, IN MY BUSINESS, WHICH IS THE COOLEST JOB AT LOCKHEED IS THAT WE BUILD SPACE CRAFT TO EXPLORE THE SOLAR SYSTEM. WE ARE BUILDING ORION WHICH IS A DEEP SPACE SPACE CRAFT THAT WILL TAKE HUMANS TO THE MOVE — MOON AND TO MARS AND POTENTIALLY BEYOND. >>YOU’VE MADE LOTS OF PROGRESS ON ORION JUST THIS YEAR. A KEY MILESTONE, YOU WANT TO EXPLAIN? >>SURE. IN JULY WE HAD A TESTING OF THE SYSTEM FOR ORION THAT WILL BE ON TOP OF THE CAPSULE. WHEN THE VEHICLE IS ON THE PAD TO LAUNCH AS WELL IS WHEN IT ACCELERATES DURING LUNCH. WE COULD TAKE, IF THERE’S AN ANOMALY THAT GOES ON OR AN ACCIDENT OCCURS, THE LAUNCH ABORT SYSTEM ACTIVATES AND PULLS THE CREW PORTION AWAY FROM THE ROCKET AND DEPLOY PARACHUTES AND SOFTLY LAND IN THE OCEAN. IT IS TO BRING ASTRONAUTS OUT OF HARMS WAY. IT’S AN IMPORTANT SYSTEM FOR SAFETY AND WE HOPE TO NEVER USE IT. WE’VE DONE A PADDLEBOARD TEST AND IN JULY WE DID THE ASCENT TEST AND WE PROVED THE SYSTEM IS NOW READY TO FLY. WERE EXCITED ABOUT THAT. >>THAT’S GOOD. READY TO FLY. WHEN YOU SAY THAT, I DON’T KNOW IF EVERYBODY UNDERSTANDS. DOES THAT MEAN YOU HAVE PEOPLE GOING OUT TOMORROW?>>YEAH, SO I THINK BOB SMITH TALK TO YOU EARLIER ABOUT SAFETY . SAFETY IS THE NUMBER ONE PRIORITY, ESPECIALLY WHEN FLYING CREW. THERE’S A LOT OF TESTING AND EVALUATION WE DO TO CONVINCE OURSELVES AND OUR CUSTOMERS THAT WE ARE READY TO FLY AND THAT IT IS SAFE TO FLY. SO, WE HAVE DONE THE LAUNCH ABORT SYSTEM TEST WHICH IS THE EMERGENCY EXIT, IF YOU WILL. NEXT, WE ARE GOING TO BE FLYING ARTEMIS 1 WHICH IS A UN-CREWED MISSION THAT WILL ORBIT THE MOON. IT IS REALLY TO TEST ALL THE SYSTEMS AND TO MAKE SURE THEY CAN WITHSTAND THE RADIATION ENVIRONMENT AND THAT WHEN WE COME BACK TO REENTRY THAT THE HEAT SHIELD IS SUFFICIENT ENOUGH TO PROTECT THE ASTRONAUTS INSIDE THE CAPSULE FROM THE EXTREME HEAT THAT THEY EXPERIENCE AS THEY ENTER THE EARTH’S ATMOSPHERE. THE PARACHUTES DEPLOY AND WE GET THE CREW OUT WHEN THEY RETURN TO EARTH. SO, THAT MISSION IS LATE NEXT YEAR. THE CREW MODULE FOR THAT HAS BEEN COMPLETED. WE HAVE HAD THE PRIVILEGE OF HAVING THE VICE PRESIDENT AT THE KENNEDY SPACE CENTER FOR AN APOLLO 50 CELEBRATION AND HE CONFIRMED THE ARTEMIS ONE MODULE IS COMPLETE. IT IS STACKED ON THE SERVICE MODULE THAT COMES FROM THE EUROPEAN SPACE AGENCY. THERE’S AN INTERNATIONAL FLAVOR AS WELL. IT WILL GO TO NASA FOR A HUGE THERMAL VACUUM CHAMBER TO TEST THE CAPSULE AND AND THE ENVIRONMENT OF SPACE. IT WILL GO THROUGH THAT AND THEN COME BACK AND BE PUT ON A ROCKET AND OFF IT IN. >>ALL RIGHT. SO YOU MENTIONED ARTEMIS 1 AND THIS IS THE ARTEMIS PROGRAM THAT NASA IS RUNNING TO GO BACK TO THE MOON. >>IT’S THE FIRST FEMALE AND THE NEXT MAN TO BE ON THE SURFACE OF THE MOON BY 2024. >>BY 2024 IS THE KING — THING . I HEAR A LOT OF SKEPTICISM IN THE SOCIAL COMMUNITY. HOW DO YOU FEEL ABOUT THAT? THE NASA ADMINISTRATOR REPEATS IT FREQUENTLY, HOW DO YOU FEEL ABOUT THAT DAY AND WHAT IS YOUR CONFIDENCE?>>I THINK IT’S EXCITING TO HAVE A DEADLINE TO GET HUMANS TO THE MOON AND BEYOND. IT’S NOT JUST THE MOON AND THEN WE ARE DONE. IT IS GOING TO THE MOON AND BEING THERE IN A SUSTAINABLE WAY. REALLY USING WHAT IT TAKES TO GET TO THE MOON AND WHAT IT MEANS TO BE IN DEEP SPACE SO THAT IT HELPS US TO BRING HUMANS FURTHER INTO THE SOLAR SYSTEM AND ONTO MARS. THEY HAVE TO BE SELF-SUFFICIENT . THERE IS A PTOLEMY REQUIRED AN AI REQUIRED IN THE SYSTEMS. THEY CAN JUST PHONE HOME AND SAY HOUSTON, WE HAVE A PROBLEM. WHEN YOU HAVE A DELAY IN TERMS OF THE LATENCY. I THINK 2024 IS DOABLE, BUT THERE ARE CONDITIONS FOR THAT. NUMBER ONE IS WE NEED FUNDING TO SUPPORT THAT AND NUMBER TWO, WE NEED TO REUSE WHAT HAS BEEN DEVELOPED. YOU KNOW AT LOCKHEED MARTIN, WE ARE REALLY PROUD OF THE LIFE- SUPPORT SYSTEM AS WELL AS THE CONTROLS WE HAVE BUILT, AND WE THINK THAT IS TRANSFERABLE TO TAKE HUMANS TO THE SURFACE OF THE MOON. PEOPLE MAY NOT UNDERSTAND THAT ORION WILL FLY TO THE GATEWAY WHICH IS AN ORBITING PLATFORM AROUND THE MOON. THE ASTRONAUTS GET OFF AND GO TO A LANDER. THEY GO TO THE LANDER TO THE SURFACE OF THE MOON. >>SO IT’S NOT A DIRECT FLIGHT. >>IT’S NOT A DIRECT FLIGHT AND NEITHER WAS APOLLO. THEY HAD A LANDER TO GET TO THE SERVICE OF THE MOON. AND THAT GOES BACK TO THE GATEWAY WITH THE ASTRONAUTS AND THEY GO BACK ONTO ORION AND COME HOME SAFELY. WHEN YOU TAKE THE ASTRONAUTS OUT OF ORION TO THE LANDER, IT WOULD BE GREAT IF YOU COULD TRAIN THEM ONCE AND THEY COULD USE THAT. THINK ABOUT WHEN YOU RENT A CAR AND IT’S A MODEL YOU’RE NOT USED TO, HOW LONG DOES IT TAKE YOU TO FIGURE OUT WHERE ARE THE WINDSHIELD WIPERS AND THE LIGHT CONTROLS? WE DON’T WANT THE ASTRONAUTS TO BE DEALING WITH THAT. WE ARE EXCITED ABOUT USING THOSE SYSTEMS WITH OTHER DEVELOPMENTS. WE’VE ALREADY DONE THE DEVELOPMENT AND YOU HAVE QUALIFIED THEM. IT’S A LOT OF TESTING WE HAVE TO DO TO CONVINCE OURSELVES THAT IT IS SAFE FOR HUMANS. SOME PEOPLE HAVE DONE IT, WHY DO THE RESOURCES TO DO IT AGAIN?>>AND ALSO NASA’S PLACE. THERE ARE 6-12 ORION CAPSULES. >>JUST LAST WEEK, THEY ANNOUNCED THE ORION PRODUCTION CONTACT. YOU ARE RIGHT, IT’S FOR THE MINIMUM OF SIX CREW MODULES AND IT IS FOR ARTEMIS MISSION 3, 4 AND 5. ARTEMIS 3 IS CRITICAL BECAUSE THE CREW MODULE TO TAKE THE FIRST FEMALE IN THE NEXT MAN UP TO THE GATEWAY. THAT WILL BE THE LANDING MISSION IN 2024. WE ARE REALLY EXCITED ABOUT THAT. THE TEAM HAS BEEN LOOKING FOR WAYS TO REDUCE THE COST ONE WAY WE DO THAT IS THROUGH REUSE. QUITE A BIT OF ORION’S REUSABLE . WE QUALIFY FOR EQUIPMENT FOR MULTIPLE USES. SO THERE WILL BE REUSE AND A LOT WE HAVE DONE IN AUTOMATION AND AUGMENTED REALITY. IT IS A COOL THING AND REALLY HAS A BIG BANG IN TERMS OF PRODUCTIVITY FOR THE TECHNICIANS ON THE FLOOR BUILDING ORION. WE ACTUALLY GIVE THEM GOGGLES TO PUT ON WITH AUGMENTED REALITY AND THEY CAN SEE THE INSTRUCTIONS AND YOU CAN SEE THE REPLACEMENTS OF WHERE THEY PUT FASTENERS AND OTHER THINGS ON THE SPACECRAFT. SO TASKS THAT USED TO TAKE TWO OR THREE TECHNICIANS TWO OR THREE DAYS TO COMPLETE, WE CAN DO WITH ONE TECHNICIAN IN ABOUT TWO HOURS. >>DO YOU DEVELOP THAT IN- HOUSE? HOW DOES IT WORK SPECIFICALLY? >>WE USE A LOT OF COMMERCIAL OFF-THE-SHELF AR TECHNOLOGY BUT WHAT WE DO WITH THE SPACECRAFT IS THAT WITH EVERY SPACECRAFT WE BUILD A DIGITAL TWIN. THINK OF THAT AS WE BUILD OUR SPACECRAFT DIGITALLY BEFORE WE BEND ANY METAL. BY HAVING THAT, WE CAN USE IT IN THE DESIGN PROCESS TO MAKE SURE WE HAVE THE RIGHT CLEARANCES FOR EQUIPMENT. WE CAN USE IT DURING MANUFACTURING, AS I JUST HIGHLIGHTED AS WELL AS WHERE DO YOU PUT FASTENERS AND TECHNOLOGY? WE CAN ALSO USE IT DURING THE MISSION AND WE CAN RUN THE MISSION IN OUR DIGITAL TWIN HERE ON EARTH. IF THERE ARE ISSUES, WE CAN SEE IT AND HELP TO DEBUG HERE ON EARTH. EVENTUALLY THE DIGITAL TWIN COULD BE ON THE SPACECRAFT ITSELF. WHEN THE ASTRONAUTS ARE ON MARS HUNDREDS OF THOUSANDS OF MILES AWAY FROM HERE, THEY COULD USE THE DIGITAL SYSTEM AND INTERROGATE THE DIGITAL TWIN TO HELP THEM MAKE DECISIONS ON WHERE TO LOOK FIRST FOR THE PROBLEMS THEY MAY BE HAVING. LIKE HOW TO USE THE BACKUP SYSTEM THEY MAY NOT BE AWARE OF.>>SO THEY WOULD BE INFORMED FIRST? >>IF THEY DID HAVE TO MAKE A REPAIR, THEY COULD USE THE DIGITAL REPAIR TO TRAIN BEFORE THEY ACTUALLY TOUCH THE ACTUAL HARDWARE.>>THAT SEEMS LIKE A GREAT OPPORTUNITY WHERE YOU COULD LEAN ON PEOPLE WHO ARE MORE EXPERT IN THE FIELD TO HELP. WHERE ELSE DOES LOCKHEED LOOK TO INDUSTRY AND OTHER COMPANIES TO SUPPORT THE WORK THEY ARE DOING? >>I’M EXCITED TO BE HERE BECAUSE THERE ARE SO MANY GREAT STARTUP COMPANIES AND MANY OF THEM ARE SPACE THESE DAYS. LOCKHEED MARTIN HAS A GROUP CALLED LOCKHEED MARTIN VENTURES. WE MAKE INVESTMENTS IN STARTUP COMPANIES AND WE ARE REALLY LOOKING TO TRY TO HELP ACCELERATE SOME OF THESE STARTUP COMPANIES BECAUSE THEY HAVE KEY TECHNOLOGIES WE NEED THAT ARE MAYBE USED ON EARTH BUT WE WANT TO APPLY IN SPACE AS WELL. IN THE LAST TWO YEARS, WE HAVE DOUBLED THE INVESTMENT WE WERE MAKING IN COMPANIES SO THE BUDGET IS $200 MILLION NOW. WE HAVE INVESTMENT IN SMALL SATELLITE COMPANIES AND SMALL LAUNCH COMPANIES AND WE CONTINUE TO WORK IN THE MENTORING WAY AS WELL AS A FINANCIAL WAY.>>IS THERE AN ACQUISITION FOR LOCKHEED? >>IT COULD BE. FOR EVERY DOLLAR SPENT ON ORION, 60% GOES TO THE SUPPLY BASE. WE HAVE A HUGE SUPPLY BASE AND OF THAT 60%, 30% OF SMALL BUSINESS. SO WE HAVE SMALL BUSINESSES ACROSS THE UNITED STATES IN ALMOST EVERY STATE IN THE U.S. SUPPORTING US IN THAT. IT IS ONE STORY AFTER ANOTHER. THERE ARE WAYS WHERE COMPANIES GET INTO SPACE AND AEROSPACE IS REINVENTING ITSELF IN MANY WAYS. IT HELPS THEIR BUSINESS AND HELPS THEM TO GROW OVER TIME. >>THIS IS INTERESTING. AGAIN, THERE IS THE PERCEPTION THAT THIS MONEY IS PERHAPS BETTER SPENT ELSEWHERE. YOU DON’T SEE THE EFFECTS A LOT OF THE TIME, BUT LOCKHEED MUST FACE THAT KIND OF CRITICISM. YOU’RE GETTING THESE VERY VALUABLE GOVERNMENT CONTRACTS PEOPLE ARE SAYING, WHY DON’T YOU SPEND IT HERE AT HOME? >>THE HERE IS THAT IT IS BIGGER HERE THAN ON EARTH. THE TECHNOLOGIES THAT WE ARE GETTING OUT OF SPACE. HOW MANY PEOPLE HERE USED GPS TO FIND THIS LOCATION? THAT CAME OUT OF GOVERNMENT INVESTING IN TECHNOLOGY. I LIVED IN FLORIDA FOR YEARS AND I HAD AN INNOVATION SYSTEM ON MY POOL THAT DIDN’T USE CHLORINE AND I CAME OUT OF THE SPACE SHUTTLE SYSTEM FOR PURIFYING THE WATER ON THE STATION AND IN THE VEHICLE. SO, WE BENEFIT FROM THE TECHNOLOGY. , SPACE IS REALLY COOL AND INSPIRES THE NEXT GENERATION. I’M EXCITED TO TALK ABOUT SPACE AND SENDING PEOPLE BACK INTO SPACE BECAUSE WE NEED MORE FOLKS TO BE EXCITED ABOUT SCIENCE AND TECHNOLOGY NINE ENGINEERING AND MATH. THE MORE WE INSPIRE THE NEXT GENERATION, IT WILL BENEFIT ALL OF US. >>THAT’S AN INTERESTING POINT. I HAVE TALKED TO A LOT OF PEOPLE WHO SAY, THERE IS EXCITEMENT THAT HASN’T BEEN THERE NECESSARILY SINCE THE SHUTTLE PROGRAM. >>RIGHT. >>I WAS TALKING TO AN ENTREPRENEUR AND HE WAS SAYING, I CAN HEAR NASA CHANGING ON THE PHONE. I CAN HEAR THE CHANGE HAPPENING AND HOW THEY APPROACH BECAUSE OF THE ENTRANCE OF NEW PRIVATE COMPANIES AND THE ENTHUSIASM. HAVE YOU NOTICED THAT? WHAT HAS IT BEEN LIKE TO CHANGE THROUGH THIS AS COMPETITORS CHANGE? THE COMPETITORS AND PARTNERS, SOMETIMES?>>IT IS SOMETHING. AGAIN IT’S THE EXCITEMENT AND WE ARE ON THE BRINK OF A NEW SPACE AGE. MORE THAN 900-1000 STARTUPS ARE COMING TO THE AREA. PEOPLE ARE GETTING EXCITED ABOUT IT. TO YOUR POINT, IT’S A DISCRETIONARY EXPENSE. IF WE COULD GET THE PUBLIC EXCITED ABOUT EXPLORATION AND SENDING HUMANS TO THE SOLAR SYSTEM, ALL OF IT IS TO BENEFIT WHAT WE DO HERE ON EARTH. THE MORE WE LEARN ABOUT OUR SOLAR SYSTEM, THE MORE BENEFIT AND UNDERSTANDING WITH HOW EARTH CAME TO BE AND WHERE IT’S GOING IN THE FUTURE. WHAT DO WE NEED TO DO TO PROTECT THIS PLANET? WE OWE THAT TO FUTURE GENERATIONS.>>THERE IS STILL THE WHAT IS IN IT FOR ME ATTITUDE. NOT IN A SELFISH WAY, BUT EVEN FOR THE START UP IN SMALL BUSINESS. WHAT DOES A MINISTER- BASED ECONOMY LOOK LIKE AND WHERE DO I FIT IN? WHAT YOU THINK OF THAT? >>WHEN YOU LOOK AT SPACE, THERE’S NO INFRASTRUCTURE IN PLACE RIGHT NOW OTHER THAN COMMERCIAL LAUNCH THAT IS THERE . HOW ARE WE GOING TO TRANSPORT PEOPLE? WHEN WE GET THEM GET OUR, WHAT WILL THEY DO? EVERYTHING WE HAVE ON EARTH THAT HAS TECHNOLOGY CONTINUES TO EXPLODE TO MAKE OUR LIVES BETTER. WE NEED TO TAKE THAT TO SPACE. SO, I THINK THERE’S A LOT OF OPPORTUNITY TO TAKE THE SAME INFRASTRUCTURE WE HAVE HERE AND MOVE THAT TO SPACE. THAT’S WHERE I THINK COMPANIES CAN CONTINUE TO GROW AND EXPAND. HOW DO THEY TAKE THIS TECHNOLOGY AND TRANSFER IT? I THINK SPACE IS SOMEWHAT UNCLEAR — UNFORGIVING. RIGHT? THE ELECTRONICS NEED TO BE HARDENED AND RELIABLE AND SELF- HEALING. BUT ONCE WE GET PAST THAT, AND WE HAVE FOR A LOT OF TECHNOLOGIES, THE SKY IS THE LIMIT. >>WHAT IS THE ECONOMIC ENGINE FOR THAT? IT SEEMS LIKE A LOT OF UP FRONT RISK FOR LONG-TERM REWARDS. IN OUR ICE — EYES, THEY DON’T NECESSARILY HAVE THAT. HOW DO YOU BUILD A SUSTAINABLE INFRASTRUCTURE? >>YOU START SMALL AND THE GOVERNMENT PLAYS A BIG ROLE IN THAT INFRASTRUCTURE. THEY ALREADY HAVE. WITH THE INTERNATIONAL SPACE STATION, THEY HAVE OFFERED IT TO COMMERCIAL INDUSTRY FOR MANY YEARS. THERE IS FREE TRANSPORTATION AND THEY LET THEM — THE DRUG MANUFACTURERS ARE LOOKING AT NEW DRUGS AND THERE IS FIBER OPTICS BEING BUILT IN SPACE. THERE’S A LOT OF NEW TECHNOLOGY IN NASA PROVIDES THE INFRASTRUCTURE TO ALLOW STARTUP COMPANIES TO TRY NEW TECHNOLOGIES TO SEE WHAT IT TAKES TO ACTUALLY PERFORM IN SPACE. I THINK YOU WILL SEE THAT CONTINUE.>>WHAT ABOUT NEAR-TERM? LOOK A LOT OF ROBOTICS AND ROBOTICS EXPLORATION. IF WE COULD BRING UP THE SLIDESHOW, WE DO HAVE A PRESENTATION. IT IS SUPER COOL. >>YEAH, WE’VE BEEN EXPLORING THE SOLAR SYSTEM FOR MORE THAN A DECADE AND PROBABLY LONGER THAN SOME PEOPLE IN THIS ROOM HAVE BEEN ALIVE. SO, WE HAVE EIGHT SPACE CRAFT WE OPERATE FOR NASA RIGHT NOW OUT OF OUR FACILITY. I BROUGHT SOME COOL IMAGES TO SHARE WITH YOU GUYS.>>THEY ARE UP THERE. >>OKAY. THE FIRST ONE IS AN ASTEROID THAT IS NEAR EARTH WE HAVE A SPACECRAFT THAT IS ORBITING, AND IT’S MADE THIS IMAGE FROM ITS INSTRUMENTS ON BOARD. WE CONTINUE TO LEARN THINGS THAT WE HAD NO IDEA ABOUT. WE FOUND OUT IT’S MUCH ROCKIER THAN WE EVER EXPECTED, AND WE ARE ACTUALLY NEXT SUMMER GOING TO TAG THIS ASTEROID AND BRING BACK A SAMPLE TO EARTH. THE REASON WE WANT TO KNOW MORE ABOUT THE ASTEROID IS IT HELPS US TO UNDERSTAND HOW THE SOLAR SYSTEM WAS FORMED AND EVEN BECAUSE IT’S A NEAR EARTH ASTEROID AND HOW EARTH WAS FORMED. THAT WILL HELP US UNDERSTAND OUR OWN PLANET BETTER. THIS ASTEROID IS REALLY ROUGH, SO WE’VE BEEN TRYING TO IDENTIFY WHERE WE ARE GOING TO TAG IT. ON TOP OF THAT, IT’S ACTUALLY SPITTING PARTICLES AT US, SO WE HAVE TO PROTECT THE SPACECRAFT FROM THOSE PARTICLES AS WELL. TREMENDOUS AMOUNT OF STUFF THERE. AGAIN, NEXT SUMMER WE WILL BE TAKING THAT AND THAT WILL COME BACK TO EARTH, SO PRETTY EXCITING. THESE ARE JUST SOME MORE IMAGES OF THAT. >>IS THIS A POTENTIAL COMMERCIAL APPLICATION? DO YOU THINK ABOUT THAT? >>SO THERE ARE COMPANIES OUT THERE TALKING ABOUT ASTEROID MINING. THERE ARE A LOT OF PRECIOUS METALS IN THESE ASTEROIDS. IF YOU COULD COLLECT THOSE METALS, YOU COULD DO IN SPACE MANUFACTURING, AND, YOU KNOW, ONE OF THE BIGGEST COSTS TO SPACE RIGHT NOW IS GETTING THINGS OFF OF EARTH. IF YOU COULD ACTUALLY DO THINGS IN SPACE OUTSIDE OF THE GRAVITY WELL, IT’S A LOT CHEAPER TO MOVE THAT AND THE COSTS GO DOWN INCREDIBLY. LET’S SEE WHAT ELSE. THIS IS A PICTURE OF INSIGHT ON MARS. THAT’S AN ACTUAL SPACECRAFT THAT LANDED, RIGHT AFTER THANKSGIVING. INSIGHT IS REALLY STUDYING THE INTERIOR OF ROCKY PLANETS. IT’S NOT SO MUCH ABOUT MARS BUT USING MARS TO HELP US UNDERSTAND MORE ABOUT PLANETS LIKE EARTH AND ROCKY PLANETS, SO IT’S GOT A SEISMOMETER ON IT, WHICH IS IN THE UPPER RIGHT- HAND CORNER. NASA JUST RELEASED YESTERDAY, IF YOU GO TO THEIR WEBSITE, SOME NEW SOUNDS COMING OFF OF MARS. SO THERE IS THE SOUND OF THE WIND, THERE’S MARS QUAKES, WHICH WE ARE MEASURING ON THE SEISMOMETER, AS WELL AS YOU CAN SEE WHEN THE ARM MOVES AROUND. THERE IS ALSO A THERMAL PROBE ON IT THAT’S GOING TO DIG INTO MARS AND UNDERSTAND MORE ABOUT THE CORE OF MARS. A LOT OF GREAT SCIENCE THERE. AND THEN THIS IS A PICTURE OF JUPITER. SO WE HAVE A SPACECRAFT WE ARE OPERATING THAT’S CALLED JUNO. IT ENTERED ORBIT THREE YEARS AGO IN JULY OF 2016, AND THAT BLACK SPOT ON TOP OF JUPITER IS ACTUALLY, WE CAUGHT AN IMAGE WHERE WE WERE SEEING THE SHADOW OF ONE OF JUPITER’S MOONS SHADOWING DOWN ON THE SURFACE OF JUPITER. WE ARE LITERALLY REWRITING THE SCIENCE BOOKS AROUND JUPITER WITH JUNO. WE ARE LEARNING MORE ABOUT IT THAN WE EVER THOUGHT BEFORE. WE THOUGHT IT HAD A TIGHT CORE WITH A LOT OF GAS AROUND IT. WE ARE FINDING THAT THE CORE EXTENDS ALMOST 50% OF ITS RADIUS AND IT’S VERY SQUISHY, IT’S NOT REALLY A HARD-CORE, AND IT’S NOT UNIFORM AT ALL. SO STAY TUNED. WE ARE LEARNING A LOT ABOUT THE SOLAR SYSTEM AND WE WILL LEARN A LOT ABOUT WHAT THAT MEANS FOR EARTH AS WELL FOR YOU. >>THAT’S GREAT. THANKS VERY MUCH, LISA. >>THANK YOU. >>THANK YOU. OKAY. COMING UP NEXT, WE HAVE A SPECIAL NEWS ANNOUNCEMENT. WITH THAT, I WOULD LIKE TO WELCOME TO THE STAGE, THE COFOUNDER AND EXECUTIVE CHAIRMAN OF FOURSQUARE, JANICE CROWLEY, AND YOUR MODERATOR.>>HEY, EVERYBODY. TODAY WE’VE GOT A LITTLE NEWS OF SORTS. WE GOT THE COFOUNDER DENNIS CROWLEY. FOURSQUARE HAS BEEN UP TO A LOT. WHAT ARE YOU UP TO RIGHT NOW? >>FIRST, THANKS FOR HAVING ME HERE. EXCITED TO BE HERE. WE BEEN DOING THIS FOR MORE THAN TEN YEARS NOW, AND IN THOSE TEN YEARS, WE FELT ALL SORTS OF AMAZING STUFF. WE’VE ACCUMULATED ALL SORTS OF TECHNOLOGY AND DATA ASSETS. I THINK WE’VE DONE AN AMAZING JOB TRYING TO SHARE THE THINGS WE BUILD WITH THE DEVELOPER COMMUNITY, STARTING WITH THE API WHEN WE RELEASED THAT IN 202009 AND 2010 AND ALL OF THE PLACES WE WERE LEARNING ABOUT AROUND THE WORLD. ONE OF THE THINGS WE ARE MOST PROUD OF IN TERMS OF TECHNOLOGY AND DATA ASSETS IS THIS THING CALLED PILGRIM. IT’S THIS PIECE OF TECHNOLOGY THAT HAS TAKEN US ALMOST FIVE OR SIX YEARS TO BUILD AND IT’S A COUPLE LINES OF CODE THAT YOU CAN PUT IN AN APP, BASICALLY, AND THEN THAT APP BECOMES AWARE OF WHERE IT IS, RIGHT? SO WE HAVE PACKAGED THIS UP IN SOMETHING CALLED — WE’VE SHARED IT WITH A FEW SELECT DEVELOPERS ON THE ENTERPRISE SIDE. IT’S A COUPLE LINES OF CODE YOU CAN PUT IN AN APP. WHEN THAT APP GOES INTO, YOU KNOW, A RETAIL SHOP, WALKS THROUGH A MALL OR A CITY, IT CAN UNDERSTAND, AND MY IN A BAKERY? AM I IN A NIKE STORE? HAVE I BEEN HERE BEFORE? IS THIS PLACE FAMILIAR TO ME? WE THINK THIS IS ONE OF THE FOUNDATIONAL BUILDING BLOCKS. THE THING THAT WE HEAR TODAY IS THAT THIS PIECE OF TECHNOLOGY WE’VE WORKED SO HARD TO BUILD OVER SO MANY YEARS WE’VE KEPT VERY CLOSE TO US WE ARE FINALLY RELEASING IT FOR EVERYONE TO USE AS A FREE TEAR. SO TODAY WE ARE RELEASING THIS AVAILABLE TO ALL DEVELOPERS. PEOPLE CAN JUMP IN AND START TO PLAY WITH US. PUT IT IN THEIR APPS. YOU ARE ENTIRELY FREE TO USE IT. UNLIMITED GEO FENCES AND FREE FOR UP TO HUNDRED THOUSAND. SO THIS IS — >>A PRETTY CENTRAL PART OF YOUR COMPANY NOW. IN THE CONSUMER SPACE TO SOME DEGREE, AND YOU ARE REALLY FOCUSING ON PILGRIM. >>EXACTLY. WE HAVE BUILT SO MANY — WE BUILT SO MUCH TECHNOLOGY AND DATA OVER THE LAST TEN YEARS, AND WE KIND OF SEE DECISION AS APPS THAT CHANGE BASED UPON WHERE YOU TAKE THEM, APPS THAT CHANGE BASED ON WHERE YOU BEEN. IT FOR A LONG TIME, WE WAITED FOR THE COMPANIES TO BUILD THIS TECHNOLOGY BEFORE WE REALIZED MAYBE FIVE OR SIX YEARS AGO THAT IF WE WANTED THIS STUFF TO EXIST, WE HAVE TO BUILD OURSELVES. IT TOOK US A LONG TIME TO DO IT. WE WERE TESTING INTERNALLY. YOU SEE THE STUFF NOW IN THE CITY GUIDE APP AND THE APP WE HAVE AS WELL AS A BUNCH OF ENTERPRISE PARTNERS. I THINK THE THING I’M MOST EXCITED ABOUT IS TO TAKE THIS TECHNOLOGY, GIVE IT TO AS MANY DEVELOPERS AS POSSIBLE, AND SEE WHAT PEOPLE END UP DOING WITH IT. WHETHER MAKING EXERCISE OR FITNESS APPS, FINANCIAL APPS, GAME DEVELOPERS, THERE’S JUST SO MANY THINGS YOU CAN DO IN ORDER TO BUILD APPS THAT CHANGE. >>SO YOU BEEN WORKING WITH THESE CUSTOMERS FOR A WILD. WHY DIDN’T YOU WAIT UNTIL NOW TO HAVE A FREE PRODUCT TO BRING THEM IN? >>THERE’S A COUPLE REASONS. FIRST OF ALL, WE WANTED TO MAKE SURE THIS STUFF WORKED AS WELL AS WE NEEDED IT TO PRAY WE’VE TAKEN A LONG TIME TO BUILD THESE PRODUCTS AND BUILD THE TECHNOLOGY. WE WANTED TO MAKE SURE THEY WORK AS ADVERTISED. WE ARE TESTING THESE THINGS ALL TIMES. THE SECOND THING, YOU KNOW THE THING WITH GREAT POWER COMES GREAT RESPONSIBILITY. YOU CAN MAKE ALL SORTS OF AMAZING THINGS WITH THE TECHNOLOGY WE’VE BUILT, BUT WE ARE VERY AWARE THAT PEOPLE COULD USE IT IN WAYS THAT WE DON’T WANT THEM TO. WE SPENT A LOT OF TIME INTERNALLY MAKING SURE THAT THE TECHNOLOGY THAT WE BUILD, WHETHER IT’S THROUGH THE API OR SDK, IT HAS CERTAIN RESTRICTIONS, THERE CERTAIN CATEGORIES YOU DON’T WANT TO MAKE AVAILABLE TO UNDERSTAND WHERE PHONES GO. WHETHER THOSE ARE SPIRITUAL CENTERS, CHEMOTHERAPY CENTERS, DIVORCE LAWYER. THERE IS CATEGORIES THAT DEVELOPERS SHOULDN’T HAVE ANY BUSINESS KNOWING THAT YOU HAVE TAKEN YOUR DEVICE THERE. WE’VE BEEN CAREFUL TO BUILD THOSE SAFEGUARDS INTO THE TOOLS THAT WE BUILT SO THAT PEOPLE CAN STILL BUILD AMAZING THINGS NOT EXPLOIT THEM IN WAYS. WE WANTED TO MAKE SURE THAT THEY HAVE THE RIGHT INFRASTRUCTURE INTERNALLY SO WE COULD BUILD THESE THINGS AND STILL THE DEVELOPERS THAT WERE USING THE SOFTWARE, AND HAVING SYSTEMS TO KEEP AN EYE ON THINGS. >>HOW DID DEVELOPERS GET ACCESS TO THIS? >>DO WE HAVE A SLIDE? I WILL PUT IT UP HERE FOR A SECOND. I’M GOING TO GO QUICK BECAUSE WE HAVE 15 SECONDS LEFT. YOU HAVE ACCESS TO ALL THESE AMAZING TOOLS, TECHNOLOGIES, DASHBOARDS, AND TO SIGN UP, TOTALLY FREE FOR ALL DEVELOPERS. IT’S A REALLY BIG DEAL, AND, YOU KNOW, A LOT OF THIS OFFER HASN’T EXISTED BEFORE. WE ARE JUST ENTERING THIS ERA OF CONTEXTUAL COMPUTING WHERE IT’S A LOT OF BUILDING BLOCKS THAT NEED TO BE BUILT. WE BUILT A LOT OF THEM AND WE ARE EXCITED TO SHARE IT WITH AS MANY DEVELOPERS AS POSSIBLE AND SEE WHAT PEOPLE DO WITH IT. >>DENNIS AND I WILL BE CHATTING AT 4:25 AND WE WILL DIG INTO THIS A LITTLE BIT MORE, TALK ABOUT FOURSQUARE AND ITS JOURNEY AS A COMPANY, BUT WE WILL CHAT THEN. PLEASE JOIN US. >>THANKS FOR HAVING ME. >>GOOD JOB. ALL RIGHT. SO WE ARE GOING TO BE BREAKING FOR LUNCH. A COUPLE QUICK HOUSEKEEPING NOTES. THERE’S GOING TO BE A BOOK SIGNING OUTSIDE THE ENTRANCE TO THE MAIN STAGE WITH RAY ON HIS BOOK PRINCIPLES IF YOU WANT TO CHECK THAT OUT. SWEET GREEN IS $10 OFF. I DIDN’T KNOW ABOUT THAT UNTIL JUST NOW, SO THAT’S COOL. AND THE TRANSCRIPTION OF THE MAIN STAGE CONTENT IS POWERED BY AUDITOR DOT AI. I WILL SEE YOU BACK HERE AT 12:50, PLEASE. ENJOY LUNCH. BYE-BYE. >>AS COMPANIES TRANSITION TO USING MICROSERVICE IN THEIR ARCHITECTURES, MORE APIS ARE CREATED ACROSS THE ORGANIZATION. WITH THIS INCREASE, IT CAN BECOME MORE CHALLENGING FOR DEVELOPERS TO FIND THESE INTERNAL APIS AND REUSE THEM WHEN THEY ARE DEVELOPING NEW SOFTWARE FOR YOU AND THAT’S WHERE RAPID API FOR TEAMS CAN HELP. RAPID API FOR TEAMS ENABLES DEVELOPMENT TEAMS TO PUBLISH THEIR INTERNAL APIS INTO A PRIVATE WORKSPACE. DEVELOPERS CAN FIND ANY INTERNAL API, VIEW ITS DOCUMENTATION, TEST IT, AND CONNECT DIRECTLY, OR COLLABORATE AND SHARE INFORMATION ABOUT THE API. TEAM MEMBERS CAN SUBSCRIBE TO ANY PUBLIC API AVAILABLE ON THE RAPID API MARKETPLACE AND THE ENTIRE TEAM CAN SEE IN USE THAT SUBSCRIPTION. THIS WAY YOU ONLY PAY ONCE FOR ANY API YOUR TEAM USES PRETTY RAPID API FOR TEAMS MAKES IT EASIER TO SHARE AND COLLABORATE ON API. GET STARTED TODAY. RAPID API.COM/TEAMS.>>OUR TEAMS LOVE BUILDING COMPANIES AT GREAT VALUES. AS WELL AS OUR INVESTMENTS IN COMPANIES. WE ARE BUILDING MEANINGFUL GLOBAL BUSINESSES IN ONLINE CLASSIFYING, FOOD DELIVERY. >>WE HAVE GREAT EXPERIENCE IN OPERATING AND INVESTING IN LARGE COMPANIES.>>WE HAD A VERY HELPFUL AND SPECIFIC ADVICE THAT THEY CAN GIVE TO US. >>WE THINK LIKE ENTREPRENEURS. THEY ARE A FANTASTIC PARTNER. >>OUR BIG VISION IS TO MAKE LIFE BETTER FOR 1 BILLION PEOPLE. I BELIEVE THIS IS THE PERFECT PARTNER TO HELP US ACHIEVE OUR DREAMS.>>WHY DO YOU COME TO THIS WORKSHOP? TO LEARN.>>I WANT TO BE WHERE WE ASK QUESTIONS LIKE WHY. THE BIG QUESTION I ASKED, IT’S A DIFFERENT WAY OF THINKING THEN IT IS AT ANY OTHER UNIVERSITY IN THE WORLD. >>I REALIZED I WAS GETTING STALE SO I SAID, YOU KNOW WHAT, IT’S TIME FOR ME TO MOVE ON AND LOOK FOR GREATER THINGS AND HAVE MORE.>>AT LOCKHEED MARTIN, WE ARE ON A MISSION. YOUR MISSION. WHEN MILLIONS OF PEOPLE ARE COUNTING ON YOU, AND YOU CAN COUNT ON US. TO BUILD THE IMPOSSIBLE, TO INVENT THE INCONCEIVABLE, AND SOLVE EVERY PROBLEM, SPEED, AND RELIABILITY. EVERY MISSION IS AN EXPEDITION OF THE GREATEST IMPORTANCE BOTH TO YOU AND TO US.>>WE ARE ACTUALLY INSPIRED BY THE TERMINATOR VIDEO. BASICALLY, THE IDEA THAT THE MASS FROM THE OBJECT COULD BE A LIQUID UNDERNEATH IT. IT’S REVOLUTIONIZING HOW PEOPLE DESIGN PRODUCTS, AND WE CRACKED THE CODE ON HOW TO MAKE PRODUCTS AT SCALE, THEREFORE, UNLEASHING THE POWER OF DIGITAL MANUFACTURING AND DIGITAL DESIGN AND ALL THE OPPORTUNITIES THAT THAT HAS TO MAKE IT AND HAVE PEOPLE’S DREAMS ON WHAT THEY WANT TO DESIGN COME TO FRUITION.>>WE’VE FIGURED OUT A WAY TO STILL GROW AN OBJECT. WE’VE INVENTED A VERY SPECIAL WINDOW THAT IS NOT ONLY OPTICALLY TRANSPARENT BUT IT’S ALSO PERMEABLE TO OXYGEN. THEY WORK IN POLAR OPPOSITE WAYS TO ALLOW US TO TAKE A LIQUID UNDERNEATH IT LIKE THE PUDDLE AND HAVE THAT BECOME THE MASS FOR THE OBJECT THAT’S GROWING.>>WHAT YOU GET OUT OF THE PRINTER IS THE FINAL PRODUCT. A LOT OF IT IS PROTOTYPING.>>WE ARE OUTSIDE OF PORTLAND, OREGON. ONE OF THE MOST INTERESTING COMPANIES WORKING IN ANIMATION TODAY. UNLIKE TRADITIONAL PLACES, THEY USE THINGS LIKE PRETTY — LIKE 3D PRINTING. WE GOT TO HEAR ALL ABOUT THE NEW FILM THAT’S COMING OUT.>>ON THE PAGE, THIS SEEMS LIKE NOT THE KIND OF MOVIE YOU SHOULD BE TRYING TO MAKE. IT WAS HUGE. I THINK THAT’S WHY WE DECIDED TO DO IT. I THINK ALL THE SKILLS THAT WE’VE HAD, THEY HAVE KINDA SET US UP TO MAKE THIS ONE. >>HOUSE MCGRATH? >>ON THIS MOVIE, THEY ARE SO MANY LITTLE THINGS THAT YOU MIGHT NOT NECESSARILY NOTICE, BUT TOGETHER THEY PROBABLY MADE THIS THE BEST MOVIE WE’VE EVER MADE. THE FACIAL ANIMATION ON THE PREVIOUS FOUR MOVIES, WE USE TO REPLACE THE FACES ON TO THE PUPPETS, AND WE WOULD PIECED TOGETHER DIALOGUE, SENTENCES USING PRE-EXISTING FACES. ON THIS MOVIE, WE WANTED MORE NUANCE. WE WANTED MORE SUPPLE ACTING, IN THE WAY WE ENDED UP DOING IT WAS ANIMATION SO THAT EACH SHOT HAS ITS OWN SPECIFIC FACES THAT ARE JUST FOR THAT SHOT. YOU NEED TO THAT THOUGHT, THAT LINE OF DIALOGUE. THAT’S SOMETHING WE’VE NEVER DONE BEFORE, BUT IT HAS, GIVEN THE ANIMATION, A LOT MORE COMPLEXITY. >>WE ARE USING 3D PRINTING IN A UNIQUE WAY. WE ARE ACTUALLY USING 3D PRINTING AS OUR MASS PRODUCTION TOOL WHERE WE ARE MASS PRODUCING HUNDREDS OF THOUSANDS. ACTUALLY, 106,000 UNIQUE FACES FOR OUR FILM, THE MISSING LINK. WE HAD THIS IDEA USING THIS ANGEL TECHNIQUE OF REPLACEMENT ANIMATION, WHICH WAS TYPICALLY DONE BY HAND SCULPTING INDIVIDUAL FACIAL EXPRESSIONS. OUR IDEA WAS TO FUSE IT WITH 21st CENTURY 3D PRINTING TECHNOLOGY. WE HAVE GONE THROUGH FOUR DIFFERENT TYPES OF 3D PRINTING TECHNOLOGY. WE STARTED WITH POLY JET TECHNOLOGY MADE BY STRATUS’, WHICH WAS A SINGLE COLOR RESIN PRINTING, BUT AT THE TIME ALL OF THE FACES WE PRODUCED NEEDED TO BE HAND PAINTED, SO STARTING ON PEER NORMAN, WE MOVED TO A COLOR 3D PRINTER, AND THAT WAS MADE BY A COMPANY THAT WAS CALLED THE Z-650. IT WAS POWDER BASED PRINTING WAY THAT TECHNOLOGY WAS OUR BASE TECHNOLOGY FOR PEER NORMAN BOX TROLLS, AND THE HUMAN CHARACTERS. STARTING HERE, WE PLAYED AROUND A LITTLE BIT. WE HAD THIS EMERGING RESIDENT COLOR PRINTING. IT WAS A STRATUS MACHINE, AND THAT ALLOWED YOU TO MIX THREE COLORS, WHICH IS PRETTY LIMITING. YOU COULDN’T PRINT THE RAINBOW. YOU SORT OF HAD TO CHOOSE WHAT THREE COLORS YOU ARE GOING TO MIX. SHORTLY THERE AFTER, THEY RELEASED THE J-750, WHICH ALLOWED YOU TO PUT SIX COLORS INTO A MACHINE AND MIX THEM AND COME UP WITH A HUGE GAMUT OF COLOR. AT THAT TIME, THE SOFTWARE THAT THEY WERE BUILDING TO RUN THE MACHINE WAS PRETTY LIMITED. WE ENDED UP NEEDING TO PARTNER WITH THE RESEARCH INSTITUTE OUT OF GERMANY. THEY DEVELOPED THIS ADVANCED COLOR 3D PRINTING SLICING SOFTWARE CALLED THE PUDDLE FISH. THAT UNIQUE COMBINATION AND THAT UNIQUE RELATIONSHIP ALLOWED US TO PRODUCE THE WONDERFUL FACES YOU SEE ON MISSING LINK. >>THE REQUEST FOR THE PERFORMANCE OF PUPPETS AS WE MOVE THROUGH EACH FILM IS INCREMENTALLY MORE. YOU KNOW, WE SPEAK ABOUT SORT OF PUPPETS TAKING A BREATH AND LIVING. THE MATERIALS THAT WE LANDED ON, THEY WERE, FOR THE REASON, THEY’VE GOT RANGE. THAT SAID, WHEN AN OBJECT IS MADE OF SOMETHING BUT IT’S SUPPOSED TO BE SOMETHING ELSE, ENSURING THAT IT DOESN’T LOOK LIKE THAT MATERIAL IS SOMETHING THAT WE DIAL IN ON. THAT HAS ITS OWN COMPLEXITY. IF WE LOOK AT THE LINK, FOR EXAMPLE, IT HAS KIND OF A SUIT FOR THE MAIN PART, AND IF THE FOR PIECES BUCKLE, AND THEN THAT DESTROYS THE ILLUSION. THAT DESTROYS PERFORMANCE. SO EVEN WHEN IT’S AS SIMPLE AS THAT, TO ACTUALLY ARRIVE AT AND THEN PUT IN PLACE FOR MANNED MASS MANUFACTURING. THAT SOMETHING YOU ALSO HAVE TO CONSIDER. IT’S REALLY SOMETHING.>>I BELIEVE STOP MOTION IS RELEVANT, BECAUSE IT REALLY IS THE QUINTESSENCE OF WHAT FILMMAKING IS. TO ME, THAT IS ITS REAL LIFE AND REAL OBJECTS. THERE IS SOMETHING ABOUT THE ACTIVITY THAT MAKES IT COMPELLING. >>WHEN WE DIP PARANORMAL AT THE END, SHE WAS A COMBINATION OF STOP MOTION PUPPET, AND SHE HAD A CG DRESS AND FACIAL ANIMATION WAS TOO DEEP, SO SHE WAS A HYBRID. I REMEMBER SITTING WITH PEOPLE, AND THEY COULDN’T QUITE WORK OUT WHAT IT WAS THEY WERE LOOKING AT. WAS IT A PUPPET? WASN’T IT? THAT’S WHAT I LIKE IS WHEN PEOPLE ARE KIND OF RIVETED TO THIS IMAGE ON SCREEN AND THEN YOU’RE NOT QUITE SURE HOW WE DID IT AND THERE’S SOMETHING MAGICAL ABOUT THAT. >>I AM NOT A PURIST. I LOVE STOP MOTION. I EMBRACE IT. I THINK IT’S MY FAVORITE MEDIUM, BUT IN THE END WHAT I WANT TO DO IS PUT AN IMAGE ON THE SCREEN THAT LOOKS THE BEST IT POSSIBLY CAN, AND REALLY FILMMAKING OF THIS KIND IS TELLING A STORY AND THE HOPE IS THAT YOU HAVE AN AUDIENCE OF PEOPLE WHO ARE COMPELLED BY THE CHARACTERS, CARE ABOUT THE CHARACTERS, AND ARE SUCKED INTO THAT STORY. I, CERTAINLY, DON’T WANT THEM TO TAKE THEM OUT OF THE STORY AGAIN. THAT IS A VALID ARTISTIC DECISION TO MAKE. YOU CAN DO THAT, BY ALL MEANS. I LOVE MOVIES THAT DO THAT. BUT FOR ME, THAT’S NOT WHAT WE ARE TRYING TO DO. WE ARE TRYING TO TELL A STORY AND USE WHATEVER MEANS POSSIBLE TO GET THE BEST IMAGE.>>BRAVO. >>THANK YOU.>>I WORK AT LOCKHEED MARTIN, MAINLY BECAUSE OF THE MISSION. IT’S NOT — IT’S REALLY KIND OF THE ONLY OPPORTUNITY IN THE SILICON VALLEY TO PUSH TECHNOLOGY FORWARD ON THE SKILL THAT YOU CAN’T IN A CONSUMER ENVIRONMENT. YOU ARE WORKING WITH A VERY DIFFERENT DESIGN METHODOLOGY. WHAT YOU’RE TRYING TO DO IS MAKE A ONE-OFF AS OPPOSED TO MAKING A MILLION OF SOMETHING. THAT HAS TO BE AS GOOD AS IT CAN POSSIBLY GET. SO YOU ARE PUSHING EVERYTHING FOR YOUR PUSHING ALL THE TECHNOLOGIES. IT’S REALLY JUST A MUCH DIFFERENT PROBLEM SET THEN YOU GET AT A DIFFERENT PROP COMPANY IN THE BAY AREA.>>AT LOCKHEED MARTIN, HELPED TO DEVELOP NEW TECHNOLOGIES IN ACTIVE AND PASSING SENSING AS WELL AS OPTICAL COMMUNICATIONS. CURRENTLY, IMAGING SYSTEMS FOR SATELLITE DOMINATE YOUR SATELLITE. THEY BECOME THE DOMINANT IN TERMS OF SIZE, WEIGHT, AND POWER. THEY BECOME THE SATELLITE THAT MATTERS. THE GOAL IS TO SHRINK THE SIZE OF THE TELESCOPE. THE SPIDER STANDS FOR THE SEGMENTED PLANAR IMAGING DETECTOR FOR ELECTRO- OPTICAL RECONNAISSANCE. IT MEANS THAT YOU HAVE AN IMAGE OR THAT TAKES IMAGES. IT INFERS WHAT AN IMAGE WOULD BE AS OPPOSED TO TAKING THE DIRECT DIMENSION. SO THE ALTERNATIVES WOULD BE MORE CONVENTIONAL, WHICH WOULD BE LARGE, BULKY GLASS OBJECTS LIKE WE BEEN DOING IN THE PAST. YOUR SATELLITE IMAGES FOR GOOGLE MAPS. THAT SATELLITE WAS EQUIVALENT TO THE SIZE OF A SCHOOL BUS. DESPITE HER IMAGERY WOULD BE THE SAME DIAMETER, SO IT WOULD STILL BE VERY LARGE IN DIAMETER. HOWEVER, IT WOULD BE MUCH THINNER FROM 20 FEET TO PROBABLY A FEW INCHES MAYBE SIX TO 8 INCHES AT MOST.>>THIS IS WHERE WE GENERATED THE FIRST IMAGE. THEY ARE COUPLED INTO THE FRONT OF THE CIRCUIT. >>WE KNOW THAT THE ENGINEERING CHALLENGE SHOWED US HOW TO DO THE ELECTRONICS, BUT IT’S A LOT TO BITE OFF, WHICH IS WHY WE WERE FOCUSING ON THE FRONT PART, WHICH IS THE TECHNOLOGY. >>IN THE FUTURE WHAT THIS MEANS IS THAT YOUR INSTRUMENTS AND SATELLITES GOING TO PLACES LIKE MARS WOULD BE MUCH MORE CAPABLE AND PROVIDE MUCH MORE SCIENCE IN THE SAME SPACE. IT COULD ALSO BE USED ON A DRONE OR IN ANY SPACE, WEIGHT CONSTRAINED ENVIRONMENT WHERE YOU WANT TO ADD IMAGING CAPABILITIES BUT YOU DON’T WANT TO DETRACT FROM THE OVERALL MISSION. >>I AM A RESEARCHER HERE AT LOCKHEED MARTIN. WE ARE IN THE NANO COPPER LAB. WHAT WE ARE DEVELOPING HERE IS CALLED NANO COPPER. WE CALL IT A NANO STRUCTURED MATERIAL. CURRENTLY, PEOPLE USE TEN SOLDERS. THE PROBLEM IS THEY CREATE TEN WHISKERS, WHICH ARE OUTGROWTHS THAT COME 90 DEGREES OUTSIDE THE JOINT. WHAT THEY END UP DOING IS SHORTING TWO DIFFERENT JOINTS AND DESTROYING THE CIRCUIT BOARD. ONE OF THE TECHNICAL FELLOWS ASKED WHAT DO I WANT SAUTER TO BE MADE OUT OF? WE CAME UP WITH COPPER. ALSO, COPPER IS THE IDEAL CONDUCTOR. IT HAS BETTER WILL THERMAL CONDUCTIVITY. THIS LEADS TO THE ABILITY TO MAKE NEW DESIGNS. WHAT WE HAVE IS THE NANO COPPER. WE HAVE MANY OTHER COOL USES FOR IT, SO I’M GOING TO PUT A LITTLE ON YOUR FINGER. SPREAD IT AROUND AND BUS IT A LITTLE, YOU’LL SEE IT MAINTAINS ITS SHININESS. IT LOOKS LIKE COPPER, AND IT SPREADABLE LIKE TOOTHPASTE. >>HOW LONG DOES IT TAKE TO MAKE THIS? >>OUR LAB PROCESS IS ABOUT FOUR DAYS. >>IN TERMS OF USE? >>A KILOGRAM. >>THE OTHER APPLICATIONS INVOLVE. WE’VE DONE WORK MAKING FLEXIBLE SUBSTRATE. IF YOU LOOK AT THE CHIP RIGHT THERE, THEY WERE PRINTED WITH NANO COPPER, BECAUSE REGULAR SAUTER IS NOT IDEAL FOR FLEXIBLE APPLICATIONS. ONCE THE NANO COPPER TECHNOLOGY MATURED ENOUGH THAT WE STARTED LOOKING FOR BUSINESS OPPORTUNITIES, LOCKHEED MARTIN DECIDED IT WOULD BE BEST TO HELP START UP A SECOND COMPANY, WHICH IS CALLED COOPER JAN, AND THEY HANDLED THE NON- SPACE, NONDEFENSE MARKETING OF THE NANO COPPER MATERIAL.>>LADIES AND GENTLEMEN, PLEASE TAKE YOUR SEATS. THE PROGRAM WILL BEGIN IN FIVE MINUTES. LADIES AND GENTLEMEN, PLEASE SILENCE ALL DEVICES. THE PROGRAM IS ABOUT TO BEGIN. LADIES AND GENTLEMEN, PLEASE TAKE YOUR SEATS. THE PROGRAM IS ABOUT TO BEGIN. ♪ ♪ ♪ ♪LADIES AND GENTLEMEN, PLEASE WELCOME TECH CRUNCH SENIOR WRITER AND YOUR BATTLEFIELD HOST ANTHONY HA. >>WELCOME TO THE FIRST ROUND OF THE STARTUP BATTLEFIELD. RAZOR HAD OF THE THE FIRST TIME YOU’VE EVER BEEN TO A STARTED BATTLEFIELD SESSION? EXCELLENT. I WILL TELL YOU EVERYTHING YOU NEED TO KNOW RIGHT NOW. WHAT HAPPENS IS HUNDREDS OF STARTUPS FROM AROUND THE WORLD APPLIED TO DISSIPATE. THE STARTED BATTLEFIELD TEAM, SOME OF THE FOLKS SITTING RIGHT OVER THERE AT TECH CRUNCH, THEY HELP NARROW IT DOWN. WE HAVE CHOSEN 18 STARTUPS PLUS 2 WILDCARDS WHO WILL PRESENT OVER THE NEXT TWO DAYS. EACH WILL PRESENT FOR SIX MINUTES, AND THEN THE ANSWER SIX MINUTES OF QUESTIONS AND ANSWERS FROM THE JUDGES. THE STARTUPS HAVE BEEN REHEARSING FOR MONTHS. THEY ARE SUPER PREPARED, BUT THERE IS ALWAYS AN ELEMENT OF UNPREDICTABILITY BECAUSE THERE IS A LIVE DEMO. A WHOLE BUNCH OF LAPTOPS OVER THERE, IN THE JUDGES GET TO ASK ANYTHING THEY WANT. WHAT THAT MEANS IS, THEY ARE GOING TO BE VERY NERVOUS. THINGS COULD GO WRONG. BUT I WOULD REALLY APPRECIATE FROM YOU GUYS IS JUST, WHEN THINGS GO REALLY WELL OR REALLY BADLY, JUST SHOW YOUR SUPPORT, BE GENEROUS, BE SUPPORTIVE. APPLAUD WHEN IT MAKES SENSE. I’M NOT GOING TO HAVE YOU DO THAT NOW. SAVE THE ENERGY. BUT WHEN THE TIME COMES, I WANT YOU TO BE READY TO HAVE THE STARTUPS FEEL LIKE THIS IS THE GREATEST EXPERIENCE OF THEIR LIVES. WHEN THE SESSION ENDS, THE JUDGES WILL GO BACKSTAGE AND HELP US CHOOSE SOME FINALISTS. THOSE FINALISTS ARE GOING TO PRESENT ON FRIDAY, AND THEN THE JUDGES WILL HELP US CHOOSE A WINNER. NOW, HOW WE CHOOSE THE WINNER IS , OR WHAT WE ARE LOOKING FOR ANY WINNER, THERE IS A WHOLE BUNCH OF DIFFERENT FACTORS WE ARE LOOKING AT. BUT FUNDAMENTALLY WHAT WE WANT IS FOR THESE FINALISTS IN THE WINTER TO THE COMPANY THAT 5 TO 10 YEARS FROM NOW IS WHEN YOU CAN TELL EVERYONE OH MY GOD, I AM IN THIS COMPANY LAUNCHED ON STAGE. THEY WILL ALSO GET $100,000 EQUITY FREE. I HAVE NOW TOLD YOU EVERYTHING YOU NEED TO KNOW. WHICH MEANS IT IS TIME TO BRING OUT THE JUDGES. FIRST UP WE HAVE BRIAN HIRSCH, COFOUNDER AND MANAGING PARTNER AT TRIBECA VENTURE PARTNERS. BEFORE STARTING TRIBECA IN 2011, BRIAN WAS FOUNDER AND MANAGING DIRECTOR OF GREENHILL AND ALSO HAS MORE THAN 20 YEARS OF EXPERIENCE IN THE VENTURE BUSINESS. NEXT WE HAVE GENERAL PARTNER AT CANAAN PARTNERS. SINCE 2000 SHE HAS INVESTED IN A RANGE OF COMPANIES WITH THE CURRENT FOCUS AREAS IN CONSUMER TECHNOLOGY, ENTERPRISE CLOUD AND MARKETPLACES. NEXT WE HAVE A PARTNER AT FORERUNNER VENTURES. SINCE JOINING FORERUNNER, MAY 2012, HE HAS SUPPORTED INVESTMENTS IN MORE THAN 40 EARLY-STAGE COMPANIES. NEXT WE HAVE MICHELLE McCARTHY, MANAGING DIRECTOR AT VERIZON VENTURES. SHE MAKE STRATEGIC INVESTMENTS FOR THE VENTURE CAPITOL GROUP FOCUSED PRINCIPALLY ON THE CONSUMER SPACE. AND LAST BUT NOT LEAST, WE HAVE PATRICIA, GENERAL PARTNER AT TRINITY VENTURES. SHE INVESTS IN EARLY-STAGE CONSUMER AND BUSINESS TECHNOLOGY STARTUPS AND SECTORS INCLUDING THE SHARING ECONOMY, REAL ESTATE AND FOOD TECHNOLOGY. SO LET’S GIVE IT UP FOR ALL OF OUR AWESOME JUDGES. [ APPLAUSE ] THAT MEANS IT IS TIME TO BRING OUT A VERY FIRST BATTLEFIELD STARTUP. THAT STARTUP IS TRAPTIC. COME ON OUT. [ APPLAUSE ] MANUAL LABOR. 200 YEARS AGO WE PICKED WEED BY HAND. EVERY SINGLE ONE. A BUNCH OF PEOPLE OUT IN THE FIELD WITH HANDTOOLS DOING THINGS MANUALLY. THAT WE INVENTED COMBINES. MACHINES HARVEST QUICKLY, EFFICIENTLY AND AT ENORMOUS VOLUME. BUT THEY LACKED THE DELICACY AND PRECISION NECESSARY TO HARVEST MOST FRUITS AND VEGETABLES. SO PEOPLE ARE STILL PICKING MORE THAN $200 BILLION WORTH OF FRUITS AND VEGETABLES BY HAND EACH YEAR. WHY IS THIS A PROBLEM? TAKE STRAWBERRY PICKING. 20% OF THE STRAWBERRIES GROWN IN THE U.S. WERE OUT OF THE FIELD BECAUSE THERE IS NOBODY AVAILABLE TO PICK THEM. LABOR IS ALSO SUPEREXPENSIVE. IT COSTS $15,000 PER ACRE, FOR $.25 PER POUND JUST FOR MANUAL LABOR FOR HARVEST. THIS LABOR IS GETTING EVEN MORE EXPENSIVE AND MORE SCARCE DUE TO AN AGING WORKFORCE AROUND THE WORLD, NATIONAL POLITICAL DYNAMICS, IN CALIFORNIA LABOR LAWS. OUR ROBOTS ARE SAVING THE FOOD PRODUCTION SYSTEM BY AUTOMATING THE WORK PEOPLE DON’T WANT TO DO. OUR ROBOTIC PLATFORM DRIVES ACROSS THE FIELD WHILE THE VISION SYSTEM DETECTS BERRIES AND FIGURES OUT HOW TO REACH THEM. THEN OUR PATENT AND GRIPPER DELICATELY EXTRACTS THE PRODUCE FROM THE PLANT. WHAT DOES THIS LOOK LIKE? LET’S SWITCH TO THE MACHINE. THE SYSTEMS CAMERAS TAKE A SNAPSHOT OF THE SCENE. OUR VISION SYSTEM DETECTS THE STRAWBERRIES, DECIDES WHICH TO PICK, FIGURES OUT THE POSITION OF THE BARRY, AND DETERMINES THE PLANT AROUND A. EVENT PLANS A PATH TO GRAB IT AND COMMAND THE ROBOT ARM TO MOVE THE GRIPPER TO THE BARRY. IT THEN LIFTED OFF THE FIELD AND CLOSES AROUND IT FIRMLY BUT GENTLY. WITH AND COMMAND THE ROBOT ARM TO YANK THE GRIPPER AWAY. WE FINISHED BY DEPOSITING THE BERRY ON THE CONVEYOR. JUST IN CASE YOU THOUGHT THIS WAS A LAB EXPERIMENT, LET’S PLAY THE VIDEO. OUR SYSTEM DOES ALL THIS IN REAL TIME WHILE HANGING OFF THE BACK OF A TRACTOR AND MOVING CONTINUOUSLY OVER REAL STRAWBERRY FIELDS. IT IS ROBUSTA DUST, DIRT, RAIN, WIND, VIBRATIONS AND THE OTHER ASPECTS OF THE TOUGH FARM ENVIRONMENT. AND OPERATE ALL DAY, EVERY DAY FOR MONTHS AND YEARS ON END. OUR GRIPPER IS TOTALLY UNIQUE AND PATENTED. THIS GRIPPER MUST ATTRACT FROM A CROWDED ENVIRONMENT, HOLD THEM AT A CERTAIN ANGLE, APPLY A GREAT DEAL OF FORCE TO BREAK THE STEM OF THE BERRY INTO ALL THIS WHILE BEING VERY DELICATE. GRAB THE BERRIES WITH SOFT FOOD SAFE SILICONE BELTS THAT WE MOLD AROUND STIFFER MATERIALS. THESE BELTS GIVE THE GRIPPER MECHANICAL COMPLIANCE WHICH ALLOWS IT TO GRAB OBJECTS ACROSS A VARYING RANGE OF SHOT SIZE AND SHAPE WITHOUT NEEDING ANY INFORMATION ABOUT THE OBJECTS PROPERTIES. WE CLOSING FIGURES WITH A DEFINED AMOUNT OF FORCE, ALLOWING US TO GRAB OBJECTS OF DIFFERENT SIZES WITHOUT CRUSHING OR DROPPING THEM. THIS LETS THE SAME GRIPPER GRABBED PRODUCE ACROSS A LARGE RANGE OF SIZE AND SHAPE WITHOUT NEEDING ANY INFORMATION ABOUT THE OBJECT PROPERTIES. WITHOUT ANY HARDWARE CHANGES OR ANY INFORMATION FROM SOFTWARE. BUILT ON A ROBUST DATA SET, THE TRAPTIC ROBOT IS CAPABLE OF FINDING BERRIES AND DEFINING RIGHTNESS AS WELL AS PEOPLE. AND FINALLY, IT DOES ALL THIS LOCALLY. NO INTERNET, NO OFF-SITE COMPUTER. INDUSTRY-STANDARD MACHINES ARE NOT DESIGNED FOR DELICATE PRODUCE. CONVERSELY, SOME STARTUPS TARGET LOW VALUE ACTIVITIES LIKE WEEDING ONLY WORTH $1000- $2000 PER ACRE. FOR THE HARVEST FOODS LIKE APPLES WERE THEY ARE ONLY NEEDED A FEW MONTHS PER YEAR. TRAPTIC FOCUSES ON YEAR-ROUND STRAWBERRY HARVEST . FINALLY, WE DON’T REQUIRE ANY CHANGE IN THE GROWING PROCESS, PROVIDING A SMOOTH PATH FOR DEPLOYMENT. OUR MASTER PLAN, GET $3 BILLION IN REVENUE BY PICKING STRAWBERRIES, $20 BILLION IN REVENUE BY PICKING THE OTHER FRUITS AND VEGETABLES, THEN GO AFTER $200 BILLION IN CROP VALUE BY AUTOMATING AND IMPROVING REMAINING ACTIVITIES. ROBOTS AS A SERVICE. WE PICK STRAWBERRIES, AND GROWERS WILL PAY US $.23 PER POUND. THIS IS SLIGHTLY LESS THAN THE CURRENT SPEND. WE PROVIDE ALL ASPECTS OF THE SERVICE. THE MACHINE, TRACTOR, DRIVER, ETC. TRAPTIC HAS DEVELOPED TESTING PARTNERSHIPS OVER THE LAST THREE YEARS WITH THE LARGEST COMMERCIAL GROWERS, INCLUDING NATURE RIGHT AND DRISCOLL’S, AND WE HAVE DONE DAILY TESTING OVER THE PAST SIX MONTHS. TRAPTIC WILL DEPLOY COMMERCIALLY NEXT YEAR. WE BUILT BIG FIXED WING AUTONOMOUS AIRPLANE FOR A UNIVERSITY PROJECT. THEN WENT TO WORK AT UTC AEROSPACE SYSTEMS AND I WENT TO WORK AT MICROSOFT. AFTER STARTING TRAPTIC, WE RECRUITED FROM UC BERKELEY, UNIVERSITY OF MICHIGAN, SPACE X, GM AND DRISCOLL’S. OUR ADVISORS COULD GLOBALLY RECOGNIZED PIONEERS. COMPUTER VISION, AGRICULTURE, ROBOTICS ALONG WITH MANY OTHERS. THE FUTURE OF ROBOTICS IS OUTDOORS. JOINED TRAPTIC AND HELP SAVE THE FOOD PRODUCTION SYSTEM. [ APPLAUSE ] >>STRAWBERRIES FOR THE JUDGES. >>THANK YOU. >>DOES ANYONE WANT TO START ASKING A QUESTION? >>CAN I EAT FIRST? >>I CAN JUMP IN. >>WE WON’T JUDGE YOU FOR ASKING WITH YOUR MOUTH FULL. I GET SOME TOO. SWEET. >>YOU TALKED ABOUT THE COST OF YOUR ROBOT RELATIVE TO LABOR, MANUAL BELABOR. WHAT ABOUT THE SPEED? HOW QUICKLY CAN YOUR ROBOT HARVEST AN ACRE SAY RELATIVE TO MANUAL LABOR? >>THAT IS A GREAT QUESTION. IT IS SOMETHING WE THINK ABOUT FROM TWO ANGLES. THE FIRST ANGLE IS WHAT THE GROWERS CARE ABOUT. THEY REALLY CARE ABOUT THE COST TO HARVEST THEIR QAEDA BERRIES, VERY STRAIGHTFORWARD BECAUSE WE JUST DECIDE HOW MUCH WE CHARGE WITH THE SERVICE MODEL. AND THE CARE ABOUT THE QUALITY OF THE BERRIES. WE HAVE RECENTLY HAD ONE OF OUR CUSTOMERS DO A DETAILED EVALUATION OF THE FRUIT WE ARE PICKING, AND THEY TOLD IS THE QUALITY FRUIT WAS EQUIVALENT TO WHAT HUMANS WERE DOING. AND THEN, THE OTHER SIDE IS THE SIDE WE CARE ABOUT, THE ECONOMICS. ONE OF OUR PRODUCTION MACHINES WILL DO AS MUCH WORK AS ABOUT 20 PEOPLE. BECAUSE WE ARE ALSO ABLE TO HARVEST AND RUN THE MACHINE YEAR-ROUND, ACTUALLY HAVE GREAT ECONOMICS. WE’RE ABLE TO PAY BACK THE CAPITOL EXPENSE OF THE MACHINE IN AROUND SEVEN MONTHS. >>THANK YOU. >>ARE YOU DOING THE DRIVING YOURSELF? BECAUSE YOU NEED TO HAVE SOMEBODY STAFFED NEAR THE MACHINE? BECAUSE IT TAKES SOME LEVEL OF EXPERTISE OR BECAUSE IT REQUIRES REGULAR SERVICING? IS THAT WHY YOU ARE DOING THE DRIVING? >>WE HAVE A HUMAN DRIVER ON OUR MACHINE. PRIMARILY BECAUSE WE DON’T NEED TO AUTOMATE IT. WE HAVE FOCUSED ON THE ASPECTS OF THIS. WE STARTED WITH THE ASPECT THAT PROVIDES THE MOST VALUE, PICKING THE STRAWBERRIES. AND WE FOUND THAT, EVEN WITH A HUMAN DRIVER, THE MACHINE WILL BE LARGE ENOUGH THAT HAVE LARGE ENOUGH SCALE THAT WE CAN PAY A HUMAN DRIVER AND STILL HAVE REALLY GREAT ECONOMICS. WE REALLY DON’T NEED TO BUILD THAT SELF DRIVING CAPABILITY. AND THIS ALLOWS US TO GET INTO MARKET A LOT SOONER. >>BUT WHY IS IT THE FARMER DRIVING? WHY AREN’T YOU JUST RENTING THE MACHINE OR SELLING HIM OR HER THE MACHINE? >>I SEE. THE REASON WE WANT TO PROVIDE ALL ASPECTS OF THE SERVICE TO MAKE IT VERY MUCH A TURNKEY SOLUTION. SO THE GROWER DOESN’T HAVE TO THINK ABOUT IT OR TRAIN ANYONE. THEY DON’T HAVE TO THINK ABOUT HOW TO RUN THE SERVICE. WE JUST PROVIDE EVERYTHING. WE SHOW UP, PICTURE STRAWBERRIES, THEY PAY US THE SAME WAY THEY’VE BEEN DOING ALREADY, IF IT’S NICELY INTO THEIR BUSINESS. THE IDEA IS TO PROVIDE A SMOOTH PATH FOR DEPLOYMENT. >>TO THAT END, HOW DO GROWERS THINK ABOUT THE CAPEX THEY ARE SPENT ON THEIR EXISTING EQUIPMENT, MUCH OF WHICH I AM GUESSING IS FINANCED WITH LONG- TERM LEASES OR WHATNOT. HOW DO YOU THINK ABOUT THE DECISION OF THROWING OUT ALL THAT CAPEX SPEND WITH THE EXISTING EQUIPMENT THEY MIGHT HAVE AND ADOPTING A SOLUTION LIKE THIS? >>THE WAY THEY THINK ABOUT THAT , THE IMPORTANT ASPECT, BECAUSE WE RUN THIS AS A SERVICE. OF COURSE THEY DON’T HAVE TO PAY A BIG CAPEX UPFRONT. THERE JUST PAYING FOR THIS AND USE IT. AND THE SYSTEM FITS NICELY INTO THE EXISTING PRACTICES. SO WE DON’T REQUIRE ANY CHANGE IN GROWING PROCESS. THEY DON’T HAVE TO THROW AWAY ANY MACHINES. THEY DON’T HAVE TO CHANGE THE WAY THE STRAWBERRIES ARE BEING GROWN OR ANYTHING LIKE THAT. WE JUST SAY YOU CONTINUE GROWING STRAWBERRIES THE SAME WE ALWAYS HAVE, AND WE ADDER MACHINE TO THE FIELD, AND IF IT’S REALLY NICELY INTO THEIR BUSINESS. >>YOU WON’T RETROFIT THEIR EXISTING TRACTOR? IT WILL BE USED FOR EXCESS CAPACITY? WHAT HAPPENS WITH THE EXISTING — >>BASICALLY, THE CONTINUE TO USE THEIR EXISTING TRACTOR FOR THE OTHER ACTIVITIES THEY NEED TRACTORS FOR. THEY ARE USING TRACTORS TO TELL THE FIELD AND SPRAY THINGS ON PLANS AND THINGS LIKE THAT. SO THEY CONTINUE USING THE EXISTING TRACTORS FOR THAT. AND THEN WE JUST ADDER MACHINE TO THAT FIELD AND PROVIDE THE TRACTOR AND THE MACHINE AND EVERYTHING. >>WHAT IS YOUR MARKET ENTRY PLAN? AND ARE YOU ALREADY DOING BETA TESTING RIGHT NOW? ARE YOU WORKING WITH SPECIFIC GROWERS YET? >>YES. WE BEEN DOING ALL THE TESTING OVER THE PAST THREE YEARS IN COMMERCIAL FARMS RUN BY THE LARGEST GROWERS IN THE WORLD. WE HAVE BEEN SPENDING A BUNCH OF TIME IN THE FIELD, INCLUDING RUNNING EVERY DAY OVER THE PAST SIX MONTHS PICKING BERRIES EVERY DAY. RUNNING THE MACHINE ALL DAY. WORKING THE LARGE COMMERCIAL GROWERS THE LAST THREE YEARS. ARE COMMERCIAL DEPLOYMENTS WILL BE MOST LIKELY WITH ONE OF THEM. >>WHAT PERCENTAGE OF THE MARKET DO THOSE GROWERS REPRESENT YOU ARE CURRENTLY WORKING WITH? >>ON THE ORDER OF HALF THE MARKET. >>YOU HAD A SLIGHT TALKING ABOUT THE EXPANSION OF THE TECHNOLOGY FROM BERRIES TO STRAWBERRY SPECIFICALLY TO OTHER BERRIES AND CROPS. WHAT IS INVOLVED IN ADJUSTING THAT SYSTEM TO EXPANDING THE PRODUCTS YOU CAN ACTUALLY PICK AND WHAT IS THE GENERAL TIME LIGHT TIMELINE OF THAT TECHNOLOGY? >>STARTING WITH THE $3 BILLION STRAWBERRY MARKET. WHAT WE FOUND IS THAT BECAUSE WE STARTED WITH ONE OF THE HARDEST CROPS WE COULD THINK OF, THE GRIPPER WE DEVELOPED FOR THIS ACTUALLY WORKS REALLY WELL FOR A LOT OF OTHER FRUITS AND VEGETABLES. AND SO, WE TESTED WITH A WHOLE BUNCH OF DIFFERENT FRUITS AND VEGETABLES. IT WORKS REALLY WELL. AS WE EXPAND TO THE OTHER FRUITS AND VEGETABLES, WE CAN REUSE ABOUT 80% OF THE GRIPPER TECHNOLOGY. AND WE WILL ALSO BE ABLE TO RETRAIN THE VISION SYSTEM TO DETECT OTHER CROPS. SO WE ARE USING MAYBE 75% OF THAT TECH FOR OTHER CROPS. AND THEN WE WILL ALSO DEVELOP TWO NEW FORM FACTORS OF ROBOTIC PLATFORM. OF THE CURRENT MACHINE THAT HARVESTS WHAT IS BASED ON THE GROUND AND WILL DEVELOP TWO MORE, ONE FOR VINES AND ONE FOR TREE FRUIT. THAT WILL EVEN THEN SHARE A LOT. BASICALLY THREE DIFFERENT MACHINES. THAT WILL ALLOW US TO REALLY EASILY EXPAND FROM THE $3 MILLION STRAWBERRY MARKET OUT TO THE $20 BILLION OF HARVESTING THE OTHER FRUITS AND VEGETABLES. EVEN AT THAT POINT, WILL HAVE MACHINES RUNNING IN ALL DIFFERENT FIELDS, DIFFERENT CUSTOMERS AND WILL BE ABLE TO DO OTHER THINGS AS WELL. >>GIVE IT UP FOR TRAPTIC. [ APPLAUSE ] >>GREAT JOB. SO BEFORE WE BRING OUT THE NEXT, I WANT TO REMIND THE JUDGES THAT YOU SHOULD EAT SOME STRAWBERRIES, ALTHOUGH IT IS A LITTLE MESSY. BE CAREFUL. THERE IS A TABLE BEHIND YOU IN CASE YOU DON’T WANT IT IN YOUR LAP. LET’S BRING OUT OUR SECOND STARTUP. DELOS. [ APPLAUSE ] >>HI EVERYBODY. THIS IS STAND. STAND IS 70 AND BUILT HIMSELF A RETIREMENT HOME OUTSIDE OF SAN DIEGO. FORTUNATELY, HIS HOME DID NOT BURN IN THE DEVASTATING 2017 AND 2018 WILDFIRES. HOWEVER, HIS INSURANCE COMPANY REFUSED TO RENEW HIS COVERAGE. AND THE ONLY OTHER OPTION HE COULD FIND CHARGED HIM $24,000 A YEAR WITH $100,000 DEDUCTIBLE. AND HE IS NOT THE ONLY ONE. THERE ARE MANY ARTICLES THAT DISCUSS MANY PEOPLE TO GO THROUGH THE EXACT SAME PROBLEM AS STAN. HUNDREDS OF THOUSANDS THROUGHOUT CALIFORNIA. SO WHY IS THIS HAPPENING? AFTER THE 2017 AND 2018 WILDFIRES, INSURANCE COMPANIES CAME TO REALIZE THAT THE THIRD- PARTY DATA MODELS, THE WILDFIRE MODELS THEY WERE BUYING, WERE INCREDIBLY INACCURATE. BECAUSE OF THIS INACCURACY, THEY DECIDED THEY SIMPLY CAN’T WRITE ANYWHERE NEAR WILDFIRE AREAS BECAUSE THEY DON’T KNOW WHICH HOMES ARE LOW AND HIGH RISK. THIS CREATES A HUGE OPPORTUNITY FOR A COMPANY THAT DOES UNDERSTAND THAT RISK. LET’S GO AHEAD AND TAKE A LOOK AT A SET OF HOMES THE BIRD IN 2017 AND 2018. LET’S LOOK AT THE MODEL THAT MOST INSURANCE COMPANIES BY. THE INDUSTRY-LEADING MODEL. LET’S SEE HOW THAT MODEL RATED THE RISK OF THESE HOMES BEFORE THEY BURNED. AS YOU CAN SEE, THEY INCORRECTLY THOUGHT THAT THESE HOMES WERE AT A LOW RISK OF BURNING. AGAIN, ALL OF THESE HOMES BURNED. BECAUSE OF THIS, INSURANCE COMPANY SIMPLY DECIDE THAT THEY WILL STAY AWAY FROM ANYWHERE NEAR WILDFIRE REGION. THEY DON’T KNOW WHICH HOMES ARE GOING TO BURN AND WHICH WILL NOT. DELOS TAKES ADVANTAGE OF THIS OPPORTUNITY. WE’RE LAUNCHING A PROPERTY INSURANCE COMPANY THAT WRITES INSURANCE SPECIFICALLY FOR LOW RISK HOMES WITH IN CATASTROPHE REGIONS. WE STARTED WITH WILDFIRES AND WILL HANDLE HURRICANES NEXT. THE KEY IS THE FACT WE CREATED OUR OWN PROPRIETARY WILDFIRE MODELS AND VASTLY OUTPERFORM THE MODELS AVAILABLE IN THE INDUSTRY. USES MODEL TO UNDERSTAND WHAT AREAS ARE LOW RISK AND OFFER INSURANCE TO HOMES THE OTHER INSURANCE COMPANIES SIMPLY WOULD STAY AWAY FROM. ON TOP OF THIS, OUR POLICY COMES ALONG WITH AN ACTIVE RISK MITIGATION SERVICE. WE REACH OUT TO EVERY HOMEOWNER ONCE A MONTH AND TELL THEM EXACTLY HOW THE RISK HAS CHANGED IN TALK ABOUT HOW THEY CAN CHANGE THINGS TO PROTECT THEMSELVES. OKAY, LET’S GO BACK AND LOOK AT THOSE HOMES AND BURNED IN 2017 AND 2018. THIS TIME LET’S SEE HOW THE DELOS WILDFIRE MODEL RATED THE WILDFIRE RISK OF THESE HOMES. AS YOU CAN SEE, WE CORRECTLY PREDICTED THAT THESE HOMES WERE LIKELY TO BURN. WE USED THIS ACCURACY TO UNDERSTAND WHICH AREAS ARE LESS LIKELY TO BURN, TO GO INTO THOSE AREAS AND BUILD A PROFITABLE PORTFOLIO OF HOMES. WE ARE NOT THE ONLY PEOPLE THAT UNDERSTAND THE VALUE OF OUR MODEL. THE REST OF THE INSURANCE INDUSTRY ALSO SEES THAT VALUE. WE HAVE SOLD AN ANALYTIC SIDE PRODUCT TO THREE DIFFERENT INSURANCE COMPANIES IN CALIFORNIA. HOW ARE WE ABLE TO UNDERSTAND, TO CREATE A MODEL THAT PERFORMS AS WELL? FOR THAT LET’S LOOK AT OUR TEAM. I HAVE EXPERIENCE IN AEROSPACE MANAGEMENT AND MASTERS IN AEROSPACE ENGINEERING FROM STANFORD, WE HAVE A PHYSICIST WITH EXPANSIVE PREDICTIVE MODELING, WILDFIRE SCIENCE PROFESSORS, SOME OF THE TOP IN THE WORLD. THEY HAVE COCREATED THE CALIFORNIA FIREFIGHTING DEPARTMENT WILDFIRE MODEL. WE HAVE APD HD AND ACTUARY, HOME INSURANCE AND. LET’S TAKE A LOOK THE MODEL. THERE ARE MANY DIFFERENT DATA INPUT LAYERS THAT GO INTO THE MODEL. THIS INCLUDES TEMPERATURE, WENT, SATELLITE IMAGERY, A VARIETY OF MICRO-PRODUCTION MODELS INCLUDING A FIRE WEATHER MODEL, WILDFIRE SIMULATIONS AS WELL AS A PROBABILISTIC IGNITION MODEL. ALL OF THESE ARE LAYERS THAT GO INTO AN AI ALGORITHM. THAT ALGORITHM IS TRAINED ON DECADES OF FIRE HISTORY AND OUTPUTS A FIRE RISK MAP. THAT MAP TELLS US WHERE TO WRITE INSURANCE, BUT ALSO HOW TO PRICE THAT INSURANCE. NOW LET’S GO AHEAD AND MOVE TO THE DEMO TO SHOW YOU HOW IT WORKS. HERE IS OUR WEBSITE. THIS IS WHERE A HOMEOWNER OR INDEPENDENT AGENT WILL COME TO GET A QUOTE. PUT IN THE ADDRESS, THEN PUT IN INFORMATION ABOUT THEMSELVES AND THEIR HOME. ONCE THEY DO THAT, THEY GET THIS SCREENED — LET’S LOOK AT WHAT GOES INTO CREATING THAT QUOTE. WE ARE NOW GOING TO PULL UP THE MAP MODELING SOFTWARE AND SHOW YOU THE DATA INPUT LAYERS LIKE THE SATELLITE IMAGERY AND MICRO- PRODUCTION MODELS. AGAIN, THOSE GO INTO THE AI ALGORITHM AND OUTPUT THIS. THIS IS OUR WILDFIRE RISK MAP OF CALIFORNIA. THOSE DOTS YOU SEE THERE ARE ADDRESSES THAT A BEEN PUT INTO THE WEBSITE. IMMEDIATELY GET IMPORTED IN THAT TABLE AS WELL THE INFORMATION PUT INTO THE WEBSITE, AND THE RISK SCORE IS IMMEDIATELY PENDING. THAT GOES TO THE ACTUARIAL MODEL AND THAT MODEL OUTPUTS A PRICE THAT GETS POSTED ON THE WEBSITE. THERE ARE 36 MILLION HOMES IN AMERICA THAT ARE HIGH RISK FOR HURRICANE OR WILDFIRE. WE SEE HALF OF THOSE AT LOWER RISK THAN THE INSURANCE COMMUNITY CREATED BY OUR MODEL. 18 MILLIONC000 CREATES A $54 BILLION PREMIUM POTENTIAL. WE’RE LAUNCHING AS A MANAGING GENERAL AGENT OR MGA AS ONE OF THE STANDARDS USED BY HIPPO, AND MANY OTHERS. THE IDEA IS IT WRITES THE INSURANCE, THE INSURANCE CARRIER PAYS OFF THE CLAIMS. WERE SELLING THROUGH INDEPENDENT AGENTS. WE ACTUALLY HAVE FIVE AGENCIES THAT HAVE INVESTED IN DELOS. THEY HAVE A COMBINED BOOK OF $150 MILLION IN CALIFORNIA. WERE CURRENTLY LOOKING FOR INSURANCE CARRIER AND REINSURANCE COMPANY PARTNERSHIPS. IF YOU’RE ONE OF THOSE COMPANIES, PLEASE COME TALK TO US. THANK YOU. [ APPLAUSE ] >>JUDGES. >>SO IS ANY OF THE DATA THAT YOU ARE INGESTING INTO YOUR ALGORITHM PROPRIETARY? >>YES. SOME OF THE DATA WE ARE USING IS FROM GOVERNMENT, BUT WE HAVE QUITE A FEW LAYERS THAT ARE PROPRIETARY SUB MODELS THAT THE TEAM HAS BEEN BUILDING OVER YEARS. THOSE DATA SOURCES INCLUDE SOME SIMULATIONS, ETC., WE HAVE DONE WITH OUR TEAM. >>OKAY. >>YOU MENTIONED THERE WERE 36 MILLION HOMES THAT RISK WHETHER IT IS FIRE OR HURRICANE AND 18 MILLION ARE LOWER RISK, WHERE MAYBE THEY WOULD NOT HAVE GOTTEN INSURANCE BEFORE, BUT YOU WOULD BE ABLE TO PROVIDE THAT INSURANCE. ULTIMATELY, IF THERE IS A HIGH RISK HOME, IS THERE NO ONE WHO WILL ENSURE THAT ONE? BECAUSE AT THIS POINT YOU’RE REALLY BIFURCATING THE MARKET TO BE ABLE TO SHOW WHO ISN’T GOING TO GET INSURANCE. >>THERE ARE PLENTY OF HOMES WE WILL SAY NO TO. THERE ARE HOMES THAT ARE TOO HIGH RISK. IT IS NOT A GOOD FINANCIAL DECISION. WE WANT TO HELP PEOPLE. THE ENTIRE IDEA WAS TO REDUCE LOSS THROUGH SHARING INFORMATION ABOUT RISK. FOR A LOT OF PEOPLE TO BE ABLE TO DO THAT AND PROVIDE AN INSURANCE POSSIBLY. BUT YOU CAN’T ENSURE EVERY HOME. THAT IS NOT SMART. >>THAT WAS GOING TO BE MY QUESTION. TRY TO UNDERSTAND THE MISSION OF THE COMPANY. THE MISSION TO GET MORE COVERAGE FOR MORE HOMEOWNERS, OR TO INCREASE PROFITABILITY FOR CARRIERS. BECAUSE I HAVE THE SAME QUESTION, WHICH IS, IF YOU IDENTIFY A LOW RISK HOUSE IS HIGH RISK AND A HIGH RISK HOUSE AS LOW RISK, IT IS A SHELL GAME. YOU’RE JUST MOVING THE RISK FROM ONE HOUSE TO ANOTHER. DO YOU THINK IT IS NET ADDS IN TERMS OF COVERAGE? OR IS THIS REALLY ABOUT HIGHER PROFITABILITY FOR CARRIERS BY SHARPER UNDERWRITING? >>A GREAT QUESTION. THE FACT THAT WE ARE ABLE TO PRODUCE A PROFITABLE PORTFOLIO SHOWS THE ADVANTAGE OF OUR MODEL. BUT THE REASON WHY WE GOT INTO THIS. WE STARTED THIS COMPANY ORIGINALLY TO REDUCE WILDFIRE LOSSES. AND WE FOUND THAT THE ONLY WAY TO CREATE A LARGE PROFITABLE COMPANY THAT GETS ENOUGH REVENUE TO CONTINUALLY TURN THE WHEEL OF INNOVATION, WILDFIRES ARE CHANGING. YOU HAVE TO CONSTANTLY UPDATE MODELS AND UNDERSTAND THE NEW PERIL. WE WANTED TO BE ABLE TO TAKE THESE LARGE MODELS AND EXPLAIN TO EACH INDIVIDUAL WHAT THEY CAN DO TO PROTECT THEMSELVES. WHEN A CLIMATE SCIENTIST SAYS THE ATMOSPHERE IS WARMING TO DEGREES, WHAT DOES THAT MEAN TO YOU WHEN YOU LEAVE YOUR HOME EVERY MORNING? WE WANT TO BE ABLE TO TAKE THIS DATA THAT WE WERE GATHERING AND USE IT TO IMPACT EACH INDIVIDUAL. FOR PEOPLE THAT LIVE IN WELFARE AREAS WE WANT TO GIVE THEM, WE ARE GIVING THEM THE INFORMATION TO BE ABLE TO PROTECT THEMSELVES. AND THERE ARE HOMES THAT ARE TOO HIGH OF RISK, BUT WE’RE GOING TO ENSURE THE ONES WE CIELO VISTA CREATE THE COMPANY WE NEED AND THEN GIVE THEM THIS ACTIVE RISK MITIGATION SERVICE SO THEY CAN COME AS A POPULATION, SLOWLY MOVE HOMES TOWARD WILD FIRED HARDENED IN THE UNITED STATES. >>I HAVE TWO QUESTIONS. SOMEWHAT RELATED. YOU TALK ABOUT THE COMPETITIVE ENVIRONMENT? AND IN NOT MAKING THIS DATA PUBLIC, DO YOU FEEL LIKE YOU HAVE A MORAL DILEMMA? THIS KIND OF GOES TO THE OTHER POINT. YOU WANT TO EDUCATE PEOPLE ON WHERE THEY ARE LIVING AND WHAT THE RISKS ARE? >>THE MORAL DILEMMA QUESTION IS SOMETHING WE HAVE TALKED A LOT ABOUT INTERNALLY. WE ARE VERY CLOSE TO CALFIRE, THE FIREFIGHTING DEPARTMENT. WE’VE HAD A LOT OF CONVERSATIONS ABOUT THAT. I WILL ADDRESS THAT QUICKLY. OUR PROFESSORS HAVE WORKED IN NGOS AND SEVERAL GOVERNMENTS FOR THEIR ENTIRE CAREER. AND WHILE IT IS A VERY NOBLE EFFORT, THE CREATED IMAGING TECHNOLOGY IN ORDER TO REALLY HAVE THE RESOURCES TO BE ABLE TO CHANGE HOMES, HELP PEOPLE WITH THINGS. BEING PRIVATE IN SOME WAY IS NECESSARY. HOWEVER, WE HAVE A CLOSE RELATIONSHIP WITH CALFIRE, AND WE HAVE BEEN IN A LOT OF DISCUSSIONS ABOUT NEW CONSTRUCTION IN WILDFIRE AREAS THAT WE CAN PARTICIPATE BACK BY SHOWING THE BEST WAY TO CONSTRUCT THEIR HOMES. AND THEN, WILL HAVE AN OPPORTUNITY TO ENSURE THESE HOMES BUILT IN THE CORRECT WAY. THE COMPETITIVE ENVIRONMENT. SO AFTER THESE TWO YEARS, ALMOST EVERY INSURANCE COMPANY REALLY DID PULL OUT. THERE ARE A FEW NON-ADMITTED CARRIERS THAT DO RIGHT, THE AVERAGE PREMIUM CURRENTLY FOR A NONADMITTED POLICY IS $8000 PER HOME. THE AVERAGE IN CALIFORNIA IS $1000 FOR NON-HIGH RISK HOMES. AND SO, THOSE ARE VERY OLD SCHOOL, BEEN AROUND FOR A CENTURY, TYPE OF COMPANIES THAT WRITE ALL TYPES OF HIGH RISK. WE ARE TAKING ADVANTAGE OF NEW DATA, NEW TECHNOLOGY TO BE ABLE TO REALLY FOCUS ON WILDFIRE AND HURRICANE. WE HAVE SOME HURRICANE MODELS WE’VE ALREADY GOTTEN IN THE WORKS. TO BE ABLE TO UNDERSTAND THAT SPECIFIC PERIL AND MAKE THAT A PROFITABLE PORTFOLIO IN THAT AREA. >>WE HAVE TIME FOR A REALLY QUICK QUESTION. >>ALL RIGHT. GIVE IT UP FOR DELOS. DELOS — [ APPLAUSE ] >>THAT MEANS IT IS TIME TO BRING OUT THE NEXT BATTLEFIELD START A. THAT START UP IS SEND ME. >>FOR YEARS NOW MY WIFE AND I HAVE BEEN ABROAD. MY WIFE CAME TO THE UNITED STATES WHEN SHE WAS JUST ONE- YEAR-OLD. SO A LOT OF FAMILY LIVES INTERNATIONALLY. WE’VE EXPERIENCED EVERY PROBLEM IMAGINABLE AS IT RELATES TO SENDING MONEY, LOST FUNDS, DELAYED DELIVERY OF FUNDS, HIGH COST, LOW TRANSPARENCY. WE HAVE BEEN PART OF THE $600 BILLION A YEAR PROBLEM ALONG WITH 232 MILLION PEOPLE THAT HAVE FAMILY LIVING AROUND THE WORLD. WE HAVE SOLVED THIS PROBLEM. MANY CASES PEOPLE WILL GET A PAPER CHECK, DRIVE ALL OVER TOWN AND GIVE UP 10% OF THEIR MONEY BEFORE MONEY GETS HOME TO MOM. TODAY WE LAUNCHED SENDME, A MOBILE APP THAT ALLOWS FOR SERVING A NON-CONSUMPTION MARKET. IT IS A GLOBAL FLEX PAY SOLUTION THAT INTEGRATES WITH AN EMPLOYER PAYROLL SYSTEM AND ALLOWS EMPLOYEES TO SEND PAYROLL FUNDS A CROSS-BORDER, TOP UP MOBILE PHONES AND PAY INTERNATIONAL BILLS. WITH EACH 1% REDUCTION IN THE COST OF THE INTERNATIONAL TRANSFERS, $6 BILLION GOES INTO THE HANDS OF RECIPIENTS. WHAT WE HAVE CREATED IS A SOLUTION THAT IS HIGH TRANSPARENCY, LOWER-COST. WE CHARGE AS LITTLE AS ONE DOLLAR, WHERE COMPETITORS ARE CHARGING FIVE DOLLARS, $50 AND UP AND WE HAVE A MUCH MORE EFFICIENT PROCESS. LET ME SHOW YOU HOW THIS WORKS. YOU WILL NOTICE I HAVE AUTHENTICATED TO MY EMPLOYEE ACCOUNT INTO THAT VIA TOOL FACTOR AUTHENTICATION. YOU NOTICE THE ACCOUNT BALANCE. IT IS HELD IN A FINANCIAL INSTITUTION AND IS FDIC INSURED, WHICH PUTS EMPLOYERS AT EASE. EACH PAY PERIOD A PORTION OF MY INCOME FLOWS OVER INTO THE SMALL IT — WALLET, AND ALLOWS ME TO SEND FUNDS ABROAD. I WILL SEND FUNDS TO JUAN RODRIGUEZ, OUR EMPLOYEE OF SENDMI IN MONTERREY MEXICO. WE HAVE BUILT A DIRECT CONNECTION TO THE CENTRAL BANK OF MEXICO, WHICH ALLOWS US TO DO AN INSTANT TRANSFER TO MEXICAN BANK ACCOUNTS. I’M GOING TO GO AHEAD AND SEND $53. THAT EQUATES TO 1010 PESOS. I’M ONLY GOING TO BE CHARGED ONE DOLLAR, WHICH IS ONLY 20% OF THE INDUSTRY AVERAGE FOR SETTING FUNDS ABROAD. WE HIT SEND, YOU NOTICE THE SPINNER POP UP. ONES THAT COMPLETES, THE FUNDS ARE SITTING IN MEXICO. SO LET’S GO AHEAD AND ROPE IN ONE SITTING IN MEXICO RIGHT NOW VIA VIDEOCONFERENCE TO VERIFY HE HAS RECEIVED THE FUNDS. HOW ARE YOU? >>FIND. >>WE ARE HERE AT TECH CRUNCH BATTLEFIELD IN SAN FRANCISCO. I JUST SENT YOU SOME MONEY. I WOULD LOVE FOR YOU TO POP INTO YOUR ACCOUNT AND LET US KNOW WHAT YOU RECEIVED. >>SURE THING. I LOGGED IN AHEAD OF TIME. I AM REFRESHING MY LIST. I CAN SEE I HAVE 1010 PESOS TRANSFERRED FROM PAUL AT 3:32 PM CENTRAL TIME. >>IT IS THAT EASY FOLKS. BACK TO THE PRESENTATION. WE ALLOW FOR — WE CAN ALSO SEND FUNDS TO A NETWORK OF OVER 10,000 ATMS IN MEXICO WITH A 16 DIGIT CODE A RECIPIENT CAN SHOW UP AT THE ATM AND RETRIEVE FUNDS. IT IS IMPORTANT TO NOTE THERE IS VIRTUALLY NO INTEROPERABILITY BETWEEN BAKING NETWORKS. WE ARE CREATING THAT INTEROPERABILITY BY BUILDING PARTNERSHIPS. WE PARTNERED WITH THE CENTRAL BANK OF THE UNITED STATES. WE HAVE A DIRECT CONNECTION TO THE CENTRAL BANK OF MEXICO. AND WE’RE WORKING ON ADDITIONAL CONNECTIONS. WHAT WE ARE DOING IS CREATING A NEW CATEGORY. WE COMBINE PAYROLL WITH MONEY SERVICE BUSINESS, AND IN SO DOING, SHIFT USER BEHAVIOR, REDUCE REGULATORY COST AND REDUCE CUSTOMER ACQUISITION COST. WE TAP INTO THE $33 BILLION THAT IS TRAVELING BETWEEN THE U.S. AND MEXICO AS OUR BEACHHEAD MARKET, BUT THIS IS EASILY EXTENSIBLE TO THE $134 BILLION MARKET OUTBOUND FOR THE UNITED STATES. AND THAT IS JUST THE BEGINNING. WE CHARGE BETWEEN ONE DOLLARS AND FOUR DOLLARS UP FRONT AND 2% IN FOREIGN EXCHANGE, BUT ULTIMATELY WE ARE DRIVING THE COST OF THE INTERNATIONAL TRANSFER TO ZERO. WE OFFER VALUE ADDED SERVICES LIKE CROSS-BORDER BILL PAY AND PHONE TOP UP SERVICES, INSURANCE SERVICES, SO THAT THAT GETS REDUCED TO NOTHING. WE ALSO SHIPPED THE PAYER FROM THE EMPLOYEE TO THE EMPLOYER. WE DISTRIBUTE THE PRODUCT THEIR BANKS, PAYROLL PROVIDERS AND DIRECT TO EMPLOYERS, AND WE ARE CURRENTLY IN ACTIVE CONVERSATION WITH SOME OF THE INDUSTRY LEADING PLAYERS IN THESE VERTICALS. I HAVE LIVED MEXICO, I HAVE LIVED IN ARGENTINA, I HAVE A RICH HISTORY IN FINANCIAL SERVICES. THE COUPLE OF FOUNDER EXPERIENCES AND AN EXIT. MY COFOUNDER IS A SERIAL PRINTER. HE STARTED THE FIRST TECH FUND IN MEXICO AND HAS MULTIPLE EXITS. EVERY SINGLE MEMBER OF OUR TEAM HAS DEEP EXPERIENCE WITH THIS PARTICULAR PROBLEM, AND WE ARE THE TEAM TO SOLVE IT. SO EMPLOYERS, DIVERSIFY YOUR BENEFITS OFFERING BY PARTNERING WITH SENDMI. EMPLOYEES, DEMAND THAT YOUR EMPLOYERS PARTICIPATE WITH US AND SAVE MONEY. AND BANKS AND PAYROLL COMPANIES, PARTNER WITH US TO BRING GLOBAL FLEXIBLE PAYROLL TO THE WORLD. THANK YOU. [ APPLAUSE ] >>JUDGES. FIRST QUESTION. >>WHO IS THE DECISION-MAKER AT THE EMPLOYER WHEN YOU TRY TO SELL AND CONVINCE THEM TO HAVE SENDMI AS PART OF THE SOLUTION? >>MOST TYPICALLY THE HEAD OF HR, BUT OFTEN TIMES WE ARE TALKING TO ANY OF THE C-SUITE. >>AND ARE THERE ANY USUAL HURDLES THEY HAVE CONCERNS ABOUT? ANYTHING THAT WOULD CAUSE THEM TO FEEL THAT >>THE FASCINATING PART IS THAT, WE ARE EARLY, BUT WE HAVE GONE OUT AND AS WE HAVE SOLD THIS PRODUCT, WHEN WE GET TOO DECISION-MAKER, WE HAVE 100% HIT RATE. THE MOST TEPID RESPONSE WE’VE GOTTEN FROM A PLASTICS COMPANY. THEY SAID COME SHOW UP AND SPEND SOME TIME AT OUR FACILITIES ON A SATURDAY, AND IF YOU CAN SIGN PEOPLE UP, YOU CAN OFFER IT. >>WE’RE REALLY THE ONLY GROUP THAT IS APPROACH THEM WITH THIS NEW PAYROLL BENEFIT. >>SO THE VALUE PROPOSITION TO EMPLOYER IS A RETENTION? >>EXACTLY. EMPLOYEE RETENTION. IT PROVIDES AN OPPORTUNITY FOR EMPLOYEES THAT ARE CASHING A PAYCHECK, LEAVING WORK, SENDING MONEY HOME TO ACTUALLY SAVE A LITTLE TIME. BUT ALSO GIVES THEM A LITTLE PAYRAISE AND BRINGS THEM INSIDE THE FINANCIAL SYSTEM. THERE IS NO REASON FOR THE PAYCHECK TO LEAVE THE FINANCIAL SYSTEM. LEAVITT INSIDE OF THEM BECOMES A FINANCIAL INCLUSION PRODUCT PROVIDING OTHER BENEFITS. >>HOW DO YOU ACQUIRE THE DEALS WITH THE U.S. FED AND CENTRAL BANK OF MEXICO? >>YEARS OF PAIN. IT IS ABSOLUTELY A MOAT BY THE WAY. THERE IS A SPECTACULAR AMOUNT OF WORK THAT HAS GONE INTO WHAT WE HAVE CREATED HIM. PEOPLE DON’T UNDERSTAND HOW DIFFICULT IT IS TO DO THAT. >>COULD YOU TALK MORE ABOUT WHY IT IS SO DIFFICULT? >>WE STARTED BY USING EXISTING FINANCIAL RAILS. SAYING, LET’S USE CROSS-BORDER TO SEND MONEY. IN THE FIRST TEST, THE MONEY DID NOT MAKE IT TO THE RECIPIENT, AND THERE IS NOBODY TO CALL. SO CROSS-BORDER PAYMENTS IS ACTUALLY A VERY DIFFICULT AREA. IT IS EXPENSIVE. SO THE U.S. FINANCIAL SYSTEM IS NOT CONNECTED TO THE MEXICAN FINANCIAL SYSTEM. SO WE ARE THE GLUE THAT PUTS THEM TOGETHER. SO WE HAD TO BUILD AN API CONNECTION INTO THE CENTRAL BANK OF MEXICO. WE HAVE ACCESS TO A FED LINE IN THE UNITED STATES. AND SO, WE TAKE THOSE SERVICES TO MOVE AROUND THE UNITED STATES AND MEXICO. WE ARE THE GLUE CREATING THE DIGITAL WALL. ALL THE MONEY GOES INTO THE OMNIBUS ACCOUNT FOR THE INDIVIDUAL. ALL THE EMPLOYEES. WE MANAGE THE SUBACCOUNT AND CAN MOVE IT AROUND CROSS- BORDER. >>HOW ARE YOU BUILDING AND PRIORITIZING YOUR SALES FUNNEL INTO THE EMPLOYERS? WHAT IS YOUR FIRST TARGET SET FOR EMPLOYERS? >>IF YOU THINK ABOUT WHAT WE’RE DOING HERE. WE ARE ATTEMPTING TO BRING CLEAN FUNDS INTO THE SYSTEM. THE REASON WE TAP INTO PAYROLL IS THAT, INSTEAD OF JUST TAKING MONEY OFF THE STREET, WE’RE BUILDING A NATURAL BARRIER AND SAYING WE KNOW EXACTLY WHERE THESE FUNDS ARE COMING FROM BUT THEY’RE COMING FROM AREA COOPERATION OR SOMEBODY ELSE. SO WE GO TO THE TOP END OF THE MARKET BECAUSE THE TOP END OF THE MARKET MAKES THE MOST SENSE TO MAKE SURE THAT THOSE, THAT THE INTEGRAL SYSTEM STAYS INTACT. AND THEN WE MOVE DOWNSTREAM FROM THEIR. TO ANSWER YOUR QUESTION, IT IS THE FORTUNE 1000 THAT HAVE VARIOUS THOUSANDS OF EMPLOYEES WITH FOREIGN NATIONALS WORKING FOR THE. >>WHAT IS THE SIZE OF YOUR SALES TEAM? >>YOU ARE LOOKING AT IT. IT’S TOUGH IN SIX MINUTES TO GET A DEEP UNDERSTANDING. >>HOW DO YOU COMPARE AND CONTRAST THE SALES TO PAYROLL SOLUTIONS IN NEW YORK? WHERE DO YOU START AND THEY STOP? >>GOOD QUESTION. WE ARE NOT CROSS-BORDER PAYROLL PER SE. LIKE YOU’RE PAYING THE EMPLOYEE IN THE EMERGING MARKET. YOU’RE PAYING A U.S. EMPLOYEE. YOUR ENABLING THAT EMPLOYEE TO THEN PAY BILLS BACK HOME FOR THEIR MOM, SEND MONEY HOME, SEND MONEY TO THE ATM. GET A LOAN. YOU’RE PUTTING THAT PERSON INSIDE THE U.S. FINANCIAL SYSTEM, AS OPPOSED TO JUST BEING A PURE PAYROLL PROCESS. >>OKAY. SOME OF THE SAME USE CASES OUT OF COUNTRY, SOME SIMILAR USE CASES — MAYBE I AM NOT FOLLOWING THAT ASPECT. >>WE’RE NOT PAYING PEOPLE CROSS-BORDER. >>IN THE UNITED STATES. OKAY. >>IF I UNDERSTAND CORRECTLY, THE RECIPIENT HAS TO HAVE A BANK ACCOUNT. >>THAT IS THE INTERESTING THING. A 70s GETTING A PAPER CHECK, BASICALLY ALL WE’RE SAYING IS, YOU CAN CONTINUE TO GET THAT PAPER CHECK, WE WILL CARVE OFF A PORTION OF AND DIRECTED TO THE WALLET, AND THEY CAN OPERATE AT THEIR. BECAUSE — >>I MET THE CROSS-BORDER RECIPIENT. AT LEAST IN THE DEMO YOU SHOWED IN MEXICO. IT WAS ACTUALLY DEPOSITED INTO A MEXICAN BANK ACCOUNT. I GUESS I WAS TRYING TO UNDERSTAND WHAT PERCENT OF THE MARKET IN THIS GLOBAL TRANSFER MARKET, WHICH WE KNOW IS ENORMOUS, THAT RECIPIENTS ACTUALLY HAVE BANK ACCOUNTS. >>CERTAINLY FOR DEMO PURPOSES, IT MAKES MORE SENSE TO SHOW TO SEND TO A BANK ACCOUNT. THE ATM NETWORK IS A GREAT WAY FOR MEXICANS TO RETRIEVE FUNDS. AND THEN WE ARE IN CONVERSATIONS WITH SOME MAJOR PLAYERS THAT WOULD ALLOW US TO GET INTO THE TOP MARKETS AROUND THE WORLD. SO ALL OF LATIN AMERICA, SOUTHEAST ASIA, ETC. >>SO THE PHYSICAL CASHEL, YOU CAN PICK UP MONEY AT THE ATM? YOU DON’T HAVE TO HAVE ACCESS TO — YOU DON’T HAVE TO HAVE ACCESS TO A BANK ACCOUNT BUT THE BANK IS JUST ONE OF FOUR MECHANISMS IN TERMS OF HOW TO TRANSFER VALUE INTO EMERGING MARKETS. >>ONE MORE ROUND OF APPLAUSE FOR SENDMI. [ APPLAUSE ] LET’S BRING OUT THE NEXT STARTUP. RENDERER. COME ON OUT. >>LARGE PUBLIC CLOUDS LIKE AWS ARE WORTH OVER $500 BILLION. BUT USING THEM IS LIKE PULLING TEETH. EVERY YEAR BUSINESSES SPEND BILLIONS OF DOLLARS IN ENGINEERING COSTS JUST TO MANAGE SERVERS ON AWS. I SAW THIS FIRSTHAND AT STRIPED, WHICH I HELPED LAUNCH AND GROW TO A $5 BILLION COMPANY, BUT NOT WITHOUT A MASSIVE DEV OPS TEAM. AFTER STRIPED, I BUILT A LOT OF APPS TO FIGURE OUT WHAT I WAS GOING TO DO NEXT. BUILDING THESE APPS WAS EASY. BUT HOSTING THEM WAS AGONIZING. I HAD TO SPIN UP VM, INSTALL NETWORKING, SETUP SSL, AND A TON OF OTHER THINGS FOR EVERY SINGLE APP. IT WAS TEDIOUS, IT WAS ERROR- PRONE, AND IT HAD TO STOP. THIS IS HOW RENDER WAS BORN. RENDER IS A COMPLETELY AUTOMATED PLATFORM PROVIDER. RENDER LETS YOU DEPLOY ANYTHING FROM A SIMPLE STATIC SITE TO COMPLEX APPLICATION CLUSTERS. AND YOU CAN DO IT FASTER THAN ON ANY OTHER CLOUD AND WITHOUT MANAGING SERVERS AT ALL. AND RENDER FITS INTO YOUR EXISTING WORKFLOW. SIMPLY PUSH YOUR CODE TO GET. WE AUTOMATE EVERYTHING FROM THEIR. THIS INVOLVES BUILDING AND DEPLOYING YOUR CODE, UPDATING AND SECURING THE UNDERLYING SOFTWARE, SCALING YOUR APPS AND AUTOMATICALLY LOAD BALANCING BETWEEN THEM, AND FINALLY, ALERTING YOU TO POTENTIAL PROBLEMS. NOW, I REALIZE I AM MAKING A BOLD CLAIM. SO LET’S SEE THIS IN ACTION. YOU MAY HAVE HEARD OF MATTER MOST. IS LIGHT SLACK, BUT FOR COMPANIES WHO WANT TO HOST CHAT THEMSELVES. TYPICALLY MATTER MOST REQUIRES A WHOLE TEAM OF DEV OPS ENGINEERS TO MANAGE. BUT RENDER MAKES IT EFFORTLESS. ALL I NEED TO DO IS TO CLICK THE DEPLOY TO RENDER BUTTON , WHICH BRINGS ME TO MY RENDER DASHBOARD LISTING ALL THE SERVICES IT IS GOING TO DEPLOY. I CLICK APPROVE, AND THAT IS IT. RENDER IS NOW THE POINT MY MATTER MOST CLUSTER, INCLUDING A DATABASE, OBJECTSTORE, SEARCH ENGINE AND MULTIPLE WEB SERVERS. RENDER IS ALSO PROVISIONING SSL AND LOAD BALANCERS BEHIND THE SCENES, AND I DON’T HAVE TO LIFT A FINGER FOR ANY OF IT. THESE SERVICES CAN TAKE A FEW MINUTES TO SPIN UP, AND WE HAVE LIMITED TIME. SO WE’RE GOING TO SWITCH OVER TO AN EXISTING MATTER MOST INSTANCE OF RENDER. RIGHT NOW AND IS RUNNING ON RENDER MOST.COM . AND YOU CAN ALL GO THERE RIGHT NOW TO SIGN UP. IT IS READY TO SCALE TO THOUSANDS OF USERS. LET’S TALK ABOUT BUT WE JUST SAW. INSTALLING MATTER MOST ON RENDER REQUIRES MINUTES. BUT IT TAKES DAYS OF SET UP AND CONSTANT ONGOING MAINTENANCE ON AWS. AND IT IS IT EVEN POSSIBLE TO DO THIS ON. BUT RENDER MAKES INSTANT THROUGH THREE MAJOR INNOVATIONS THAT WE ARE LAUNCHING ON STAGE TODAY. EVERY RENDER SERVICE CAUSE BUILT-IN SERVICE DISCOVERY, PRIVATE NETWORKING AND LOAD- BALANCING. RENDER IS THE FIRST FULLY MANAGED CLOUD TO OFFER SSD WITH AUTOMATIC BACKUPS AND ONE CLICK RESTORE. AND YOU CAN DEFINE ALL YOUR RENDER SERVICES AND JUST ONE FILE. YOU CAN UPDATE YOUR INFRASTRUCTURE BY SIMPLY PUSHING THIS FILE. HOW COOL IS THAT? LET’S LOOK AT THE COMPETITION. CLOUDS LIKE AWS CLAIM TO BE DEVELOPER FRIENDLY, BUT JUST ASK ANY DEVELOPER, AND THEY WILL TELL YOU JUST HOW FRUSTRATING THEY CAN BE. ON THE OTHER END, MANAGE CLOUDS LIKE THE ROKU HAVE STAGNATED UNDER SALES FORCE AND ART MISSING ESSENTIAL FEATURES LIKE SSD AND PRIVATE NETWORKING. THERE ALSO MUCH MORE EXPENSIVE. JUST TWO GIGABYTES OF RAM COSTS $250 A MONTH ON HAROKU COMPARED TO $55 PER MONTH ON RENDER. WE GIVE YOU THE BEST OF BOTH WORLDS, AMAZING EASE-OF-USE COMBINED WITH TREMENDOUS POSSIBILITY. AND WE ARE DOING THAT IN A MARKET THAT IS MASSIVE AND GROWING QUICKLY. RIGHT NOW WE’RE FOCUSED ON THE PLATFORM AS A SERVICE MARKET WORTH $20 BILLION. LONGER-TERM, WE ARE TARGETING THE ENTIRE CLOUD INFRASTRUCTURE AS A SERVICE MARKET WORTH $100 BILLION JUST THREE YEARS FROM NOW. BUT LET’S TALK REAL NUMBERS. THE RENDER REVENUE HAS GROWN BY OVER 50% MONTH OVER MONTH FOR THE LAST SIX MONTHS STRAIGHT. AND THIS GROWTH HAS BEEN ENTIRELY ORGANIC. WE ARE NOW SERVING OVER 100 MILLION HD PT REQUESTS EVERY WEEK. LEADING OPEN SOURCE PROJECTS LIKE REACT, AND GATSBY HAVE ALL SELECTED RENDER AS AN OFFICIAL HOSTING OPTION. ARE ALSO ONE OF JUST FOUR OFFICIAL CLOUD PARTNERS FOR KIDS LAB. WE HAVE THOUSANDS OF AMAZING USERS. INCLUDING A LEADING RESIDENT — PRESIDENTIAL CAMPAIGN USING RENDER FOR ALL OF THEIR INFRASTRUCTURE. SO IF YOU ARE A DEVELOPER OR FOUNDER, WHO IS FRUSTRATED WITH AWS OR HEROKU, AND YOU’RE LOOKING TO SAVE BIG ON ENGINEERING COSTS, AUTOMATE YOUR CLOUD HOSTING TODAY BY SIGNING UP ON RENDER.COM. THANK YOU. [ APPLAUSE ] >>JUDGES. >>AT WHAT POINT IN A COMPANY DEVELOPMENT DOES THE AUTOMATION START TO FALL APART AND CUSTOMIZATION START TO BECOME MORE NEEDED? >>WE HAVE NOT FOUND THAT POINT YET, AND THIS IS ONLY POSSIBLE NOW BECAUSE OF THE ADVENT OF THINGS LIKE CONTAINERS. BECAUSE CONTAINERS LET YOU ENCAPSULATE NOT JUST YOUR APPLICATION, BUT ALL THE DEPENDENCIES ALONG WITH YOUR APPLICATION. SO BACK WHEN HEROKU WAS STARTED IN 2009, THEY DIDN’T REALLY HAVE ANYTHING LIKE THIS. SO RENDER IS USING THE RECENT ADVANTAGES, RECENT ADVANCES IN TECHNOLOGY OVER THE LAST TWO OR THREE YEARS TO MAKES THINGS REALLY EASY FOR PEOPLE WHO CAN CONTAINERIZED THEIR APPS. >>SO THIS IS A GIANT MARKET WITH VERY DEEP-POCKETED COMPETITORS. WHAT IS YOUR MARKET ENTRY POINT? WHERE ARE YOU GOING TO — I MEAN, RIGHT NOW IS DESCRIBED AS LIKE YOU CAN BE ALL THINGS TO ALL PEOPLE, BUT I AM SURE THERE ARE SOME SEGMENTS FOR WHOM THE PAIN POINT IS JUST MORE EXTREME THAN OTHERS. SO WHAT IS THAT MARKET ENTRY POINT FOR YOU? >>YOU’RE NOT LOOKING AT GIANT ENTERPRISES RIGHT NOW. WE DON’T WANT PEOPLE WHO ARE RUNNING THOUSANDS OF MACHINES ON AWS TO SWITCH TO RENDER. THAT IS NOT GOING TO HAPPEN AND ALSO WILL BREAK EVERYTHING FOR THEM. SO THEY SHOULD NOT. OUR CURRENT MARKET IS DEVELOPERS AND STARTUPS. WE ARE IN MANY WAYS SKATING TO WHERE THE PUCK IS GOING BECAUSE EVERYONE ELSE SEEMS TO HAVE LOST FOCUS ON THIS PARTICULAR SEGMENT. WE ARE MAKING IT REALLY EASY FOR DEVELOPERS. JUST LIKE WITH STRIPED, I WORKED WITH THE TEAM TO MAKE IT EASIER FOR DEVELOPERS EARLY ON TO INTEGRATE PAYMENTS. WHAT ENDS UP HAPPENING WHEN YOU DO THAT IS, SOME OF THESE STARTUPS END UP BECOMING AIRBNB AND SNAP. AND THAT IS HOW YOU GET THE LARGE COMPANIES. >>SO WE HOPE TO SCALE. TO SCALE WITH SOME OF YOUR STARTUPS? >>WE WILL, YES. >>TO THAT END, WHAT YOU THINK THE BIGGEST CHALLENGES ARE GOING TO BE FOR YOU TO SCALE? >>FOR US TO SCALE? I THINK THAT WE NEED TO BE UP AT ALL TIMES FOR OUR USERS AND MAKE SURE WE ARE NOT MOVING FAST AND BREAKING THINGS. THAT IS NOT WHAT YOU DO WHEN YOU HOST. SO THE BIGGEST, NOT JUST CHALLENGE, BUT SOMETHING WE HOLD OURSELVES UP TO AS A STANDARD IS MAKING SURE THAT THE USER WORKLOADS ARE ALWAYS STABLE AND RELIABLE AT ALL TIMES. >>SO YOUR COMPETITORS LIKE AWS OVER THE YEARS HAVE BUILT SO MANY BELLS AND WHISTLES INTO THEIR SERVICE. I CAN GO ON AWS GO INTO THEIR MARKETPLACES AND GET THEIR PARTNERS PRODUCTS AND SERVICES. HOW DO YOU, ARE YOU GOING TO COPY THAT EFFECTIVELY? HOW DO YOU PROVIDE DATA >>WE NEVER WANT TO COPY AWS BECAUSE DATA >>BUT HOW DO YOU PROVIDE ALL OF THE ANCILLARY SERVICES? >>WE ACTUALLY HAVE AN ADD ON MARKETPLACE THAT WE LAUNCHED LAST WEEK. WE ARE PARTNERING WITH A COMPANY CALLED MANIFOLD THAT JUST STARTED OFFERING ADD-ON SERVICE AS A PRODUCT. AND SO, THEY ARE DOING ALL THE BUSINESS PARTNERSHIPS, AND WE ARE INTEGRATING WITH THEM TECHNOLOGICALLY. WE ALREADY HAVE COMPANIES LIKE LOG DNA AND SCOUT. SO WE WILL CONTINUE TO BUILD OUT MORE DEVELOPER PARTNERSHIPS WITH TOOLS LIKE THAT. WHICH MIGHT EVEN INCLUDE TOOLS ON AWS. >>THANK YOU. >>I KNOW YOUR EARLY ON, SO THIS ANSWER MIGHT BE PRETTY QUICK, HOW MUCH TURN HAVE YOU SEEN IN YOUR CUSTOMER BASE, AND IF THERE HAS BEEN CHURN, ONE OF THE MAIN WAS? >>THERE HAS NOT BEEN. THE THINGS ARE SEEING IS ACTUALLY THE OPPOSITE. ONCE YOU START USING RENDER FOR JUST ONE SERVICE, YOU END UP BRINGING ALL YOUR SERVICES OVER. SO THAT IS WHAT WE SAW WITH THE PRESIDENTIAL CAMPAIGN THAT IS USING RENDER FOR EVERYTHING PRISON STARTED USING IT FOR ONE TINY SERVICE AND OUR LIKES THIS IS SO MUCH BETTER THAN GOOGLE. AND NOW THEY ARE USING US FOR EVERYTHING. >>ONE OF THE INITIALS OF THE PRESIDENTIAL CANDIDATE? >>I AM NOT AT LIBERTY TO SAY. BUT IT WILL BE PUBLIC ON OCTOBER 15 BECAUSE THEY HAVE TO FILE THEIR FINANCIALS AND RENDER WILL BE PART OF THAT. >> CAN YOU JUST WALK THROUGH FOR A TYPICAL CUSTOMER WHAT THE ROI IS? WHAT THEY WOULD TYPICALLY SPEND ON AWS OR ON GOOGLE, VERSUS USING RENDER? >>SURE. RENDER IS NOT GOING TO BE CHEAPER THAN AWS OR GOOGLE IN TERMS OF INFRASTRUCTURE COST . SPECIFICALLY, SERVERS, VM. BUT WE’RE GOING TO SAVE YOU HUNDREDS OF THOUSANDS OF DOLLARS BECAUSE YOU DON’T HAVE TO HIRE EXPENSIVE DEV OPS ENGINEERS. THAT IS ONE OF THE BIGGEST THINGS WE ARE SEEING ACROSS THE MARKET RIGHT NOW. ENGINEERS ARE THE HIGHEST PAID AMONG ALL ENGINEER SEGMENTS IN THE MARKET. AND THEY ARE ALSO REALLY HARD TO FIND. THOSE ARE RELATED. SO WHAT WE’RE SAYING IS, YOU DON’T NEED TO BUILD OUT A LARGE DEV OPS TEAM. YOU DON’T NEED TO HIRE SOME AWS CONSULTANT TO SET UP ALL OF THIS FOR YOU, AND THEN THEY LEAVE YOU AND THEN YOU’RE LIKE, WHAT AM I GOING TO DO WITH THIS GIANT THING? WE ARE AUTOMATING ALL THAT AWAY. SO YOU DON’T HAVE TO DEAL WITH ANY OF THAT. AND THAT IS WHERE THE BIGGEST ROI IS. >>ONE MORE ROUND OF APPLAUSE FOR RENDER. [ APPLAUSE ] NOW LET’S BRING OUT THE FINAL STARTUP OF THE FIRST ROUND OF THE STARTED BATTLEFIELD. MUTINY. >>MUTINY HELPS B2B COMPANIES PERSONALIZE THEIR WEBSITE FOR EACH VISITOR. IN ORDER TO CONVERT THE 99% OF THEIR TRAFFIC THAT BOUNCES TODAY. FOR EXAMPLE, ONE OF OUR CUSTOMERS, AMPLITUDE, USES MUTINY TO TAILOR THEIR WEBSITE CUSTOMER CASE STUDIES AND LOGOS FOR EVERY SINGLE VISITOR BASED ON THEIR INDUSTRY. SOMEONE COMING FROM THE CONSUMER TECH INDUSTRY WILL SEE TWITTER AND IT’S THE CART, WELL AS A B2B COMPANY WILL SEE CISCO . THE RESULTS OF THIS PERSONAL INNOVATION IS A 54% INCREASE IN LEADS BECAUSE PEOPLE WANT TO KNOW HOW THEIR PEERS ARE USING AMPLITUDE. WE FOUNDED MUTINY IN JUST A LITTLE OVER A YEAR AGO AND ALREADY THE FASTEST GROWING B2B UNICORN SUCH AS SEGMENT, ARE USING MUTINY TO TAILOR THEIR WEBSITES. WE BUILT MUTINY AFTER OUR OWN HORRIBLE EXPERIENCE TRYING TO DO PERSONALIZATION IN HOUSE. WE WERE BOTH EARLY EMPLOYEES, AND I LED MARKETING AT GUSTO, AND WHAT WE REALIZED AS WE GREW OUR CUSTOMER BASE FROM 500 TO 50,000 CUSTOMERS WAS THAT, EVEN THOUGH OUR PRODUCT WAS A REALLY GREAT FIT FOR A LOT OF DIFFERENT BUSINESSES, THE SAME MARKETING MESSAGE DIDN’T NECESSARILY RESONATE FOR EVERYBODY. BUT WHAT WE TRY TO TAILOR OUR MESSAGE FOR EVERYONE, WE LEARNED HOW CHALLENGING THAT WAS. TO PERSONALIZE OUR WEBSITE FOR EACH USER, WE NEEDED TO KNOW WHO WAS COMING TO THE WEBSITE, PRIORITIZE BETWEEN ALL OF THE DIFFERENT GROUPS THAT WERE COMING TO THE SITE, CHANGE THEIR EXPERIENCE, AND MEASURE THE IMPACT SO WE CAN KEEP ITERATING. TO DO THAT WE NEEDED LOTS OF ENGINEERS, DATA SCIENTIST, DESIGNERS AND ANALYSTS. THE AVERAGE MARKETING TEAM DOES NOT HAVE ACCESS TO THESE TECHNICAL EXPERTISE. AND THAT IS EXACTLY WHY WE BUILT MUTINY, TO SOLVE ALL OF THESE PROBLEMS IN ONE PLACE WITH SOFT LAB. MUTINY IDENTIFIES THE VISITORS TO A WEBSITE VIA PREBUILT DATA INTEGRATION. IT ANALYZES THE WEBSITE TRAFFIC AND CONVERSION DATA TO RECOMMEND THE BEST AUDIENCES FOR PERSONALIZATION. IT HAS A VISUAL EDITOR THAT LETS ANY NON-TECHNICAL PERSON CHANGE THE EXPERIENCE OF THEIR WEBSITE, AND HAS BUILT-IN ANALYTICS TO MEASURE THE RESULTS SO THE COMPANY CAN KEEP ITERATING. NOW LET’S TAKE A LOOK AT HOW HALEY USES MUTINY TO OPTIMIZE CARTA. LET’S START WITH RECOMMENDATIONS. MUTINY ANALYZES CARTA.COM AND BASED ON THE VISITORS AND THEIR CONVERSION DATA MAKES A SERIES OF RECOMMENDATIONS TO KEEP HALEY FOCUSED. THE FIRST RECOMMENDATION IS TO PERSONALIZE FOR SEED STAGE COMPANIES BECAUSE THEY CONVERT AT 50 WERE PERCENT LOWER THAN OTHER SEGMENTS ON THE WEBSITE. DESPITE HAVING A REALLY HIGH CONVERSION RATE IN SALESFORCE. ANOTHER RECOMMENDATION HERE IS TO PROMOTE THEIR REFERRAL PROGRAM TO EXISTING CUSTOMERS. THIS IS A GREAT WAY TO GET MORE ORGANICALLY FROM AN AUDIENCE THAT TODAY IS COMPLETELY UNTAPPED ON THE WEBSITE. LET’S CLICK INTO THE FIRST RECOMMENDATION. HERE HALEY CAN SEE ADDITIONAL INFORMATION ABOUT EXACTLY WHY MUTINY HAS RECOMMENDED THE SEGMENT TO HER. SHE CAN SEE HOW TO PERSONALIZE DIFFERENT PARTS OF HER WEBSITE BASED ON THE TIPS WE HAVE PROVIDED. AND EVEN LOOK AT EXAMPLES OF HOW THIS SEGMENT HAS BEEN PERSONALIZED IN THE FIELD. LET’S CLICK TO ACTUALLY CHANGE THE EXPERIENCE FOR THIS GROUP. YOU CAN SEE IT IS ALREADY PRESELECTED THIS SEGMENT AS COMPANIES WITH 1 TO 10 EMPLOYEES, WHICH HALEY CAN EDIT IF SHE WANTS TO. WE WILL GO AHEAD AND CLICK NEXT TO CHANGE THEIR EXPERIENCE ON THE SITE. SO HERE WE ARE LOADING THEIR SITE VIA THE VISUAL EDITOR THAT LETS THEM CHANGE ANY ELEMENT OF THE SITE, WHETHER IT IS CTA OR IMAGING. KNOWING THAT THIS PARTICULAR GROUP IS NEW TO EQUITY, WE’RE GOING TO HIGHLIGHT THE CARTA EASE-OF-USE AND CHANGE THE CALL TO ACTION FROM DEMO TO SOMETHING A LITTLE BIT MORE HANDS-ON SUCH AS GET STARTED. AND HIT LAUNCH. AND JUST LIKE THAT, THAT SEGMENT WILL NOW SEE THE PERSONALIZED CONTENT ON THE SITE. LET’S TAKE A LOOK AT EXPERIENCES THAT HALEY HAD LAUNCHED PREVIOUSLY. WE WILL GO INTO ONE SPECIFICALLY FOR VENTURE CAPITALISTS THAT HIGHLIGHTS THE NEW PRODUCT FOR THIS AUDIENCE. THE NUMBERS YOU SEE HERE ARE FROM OUR ANALYTICS PRODUCT. WE DON’T SHOW PERSONALIZED CONTENT TO EVERYBODY THAT IS PART OF THE SEGMENT. AND WE MEASURE THE DIFFERENCE IN LIFT BETWEEN PERSONALIZED ENGINEERING. AS YOU CAN SEE HERE, THIS PARTICULAR PERSONALIZATION HAS INCREASED THEIR CONVERSION BY 129%. THE RESULTS FROM THE IN ARE INCREDIBLE. 200% INCREASE IN OUTBOUND LEADS, 40% SITEWIDE INCREASE IN LEADS FOR AMPLITUDE, AS A POINT OF COMPARISON, FOR MOST B2B COMPANIES AND COMMON CHANNEL IS AD WORDS. THAT CHANNEL TYPICALLY GENERATES LESS THAN 10% OF THEIR YOU ALREADY HAVE. THANK YOU. S HAVE >>JUDGES. WHO HAS QUESTIONS? >>SO THANK YOU FOR THAT. IT WAS WONDERFUL. TELL ME WHY THIS ISN’T A ONE TIME CONSULTING EDGE ENGAGEMENT AS OPPOSED TO SASSYFIED THAT WILL LIVE WITH ME FOR YEARS? >>IF YOU LOOK AT MARKETING FOR SOCIALIZATION TODAY, YOU RUN INTO TWO TYPES OF PERSONNIZATION FLARES. ONE IS A PLATFORM WHICH DOESN’T GENERATE MUCH RESULTS AND THE OTHER IS PRODUCTS THAT ENABLE THE PLUMBING. PERSONNIZATION BUT REQUIRE A IT TON OF EXPERTISE WHICH SPEAKS TO THE POINT YOU WERE BRINGING UP. MUTINY IS FOCUSED ON THE B2B MARKET TO BUILD A PRODUCT THAT’S REALLY EASY TO USE AND WE’RE ABLE TO RECOMMEND PERSONNIZATION PLAYBOOKS AND BEST PRACTICES THAT IS HIGHLY RELEVANT TO EVERYBODY IN THAT INDUSTRY. IT’S BOTH EASY TO USE AND JUST A SASS PRODUCT. >>THANK YOU. IT SEEMS LIKE AN INTERESTING WEDGE IN THE MARKET TO HAVE TO CAPTURE MORE ROI, CAPTURE MORE LEADS. OVER TIME YOU HAVE TO EXPAND. HOW DO YOU SEE YOUR PLATFORM OFFERING MORE PERSONALIZATION? >>OUR VISION IS TO START WITH THE WEB AND THAN EXPAND FOR THE ENTIRE BUYING EXPERIENCE FOR B2B COMPANIES OF WEB IS A REALLY GREAT PLACE TO START BECAUSE REGARDLESS OF WHERE THAT CUSTOMER COMES FROM, THEY’LL EVENTUALLY END UP ON THE WEBSITE. IT’S ALSO A GREAT PLACE FROM A DATA COLLECTION STANDPOINT, BUT ONCE WE’VE BUILT THIS VISITOR PROFILE AND THE AIN’T TO MAKE RECOMMENDATIONS, WE CAN PORT THE MAJORITY OF THAT TO ADDITIONAL CHANNELS AND IT JUST MAKES THE PRODUCT STRONGER. >>HOW DOES THE MARKET REORGANIZATION — HOW DOES YOUR PRODUCT PLAY WITH OTHER MARKETING AUTOMATION AND WEBSITE AUTHORIZATION TOOLS THAT MANY OF YOUR CUSTOMERS OR PROSPECTIVE CUSTOMERS MAY ALREADY BE USING ALONGSIDE THAT CUSTOMER LIFE CYCLE OR PROSPECTIVE CUSTOMER LIFE CYCLE. >>HOW DO YOU PLAY WITH THAT OR HOW ARE YOU THINKING ABOUT THAT ISSUE? >>ABSOLUTELY. WE INTEGRATE WITH SYSTEMS THAT CAN GENERATE VALUABLE DATA AND SO, YOU KNOW, SYSTEMS THAT ALREADY ARE COLLECTING A LOT OF USER INFORMATION,ING WITH ALREADY INTEGRATE WITH A NUMBER OF THEM SUCH AS SALES FORCE AND SEGMENT AND AS WE EXPAND, WE’LL INTEGRATE WITH MORE OF THEM. A.B. TESTING IS A LITTLE BIT DIFFERENT IN THE SENSE THAT THEY SOLVE A SLIGHTLY DIFFERENT PROBLEM AND YOU CAN THINK OF IT AS AN OLDER GENERAL VERSION OF THIS PROBLEM WHERE THEY’RE JUST SHOWING AN A AND B AND TRYING TO FIND THE NEW BASELINE VERSION, WHEREAS WE ARE DYNAMICALLY IDENTIFYING THE AUDIENCE AND SHOWING EVERYBODY EXACTLY WHATEVER IS THE BEST EXPERIENCE FOR THEM.>>HOW MUCH DATA TO YOU NEED IN ORDER TO THEN COME UP WITH THE APPROPRIATE SEGMENTS? THAT’S WHY I’M SORT OF GOING BACK TO THE QUESTION ABOUT FEELS LIKE THERE’S A CONSULTING PROJECT THAT NEEDS IT UP FRONT TO IDENTIFY THE SEGMENTS OR YOU NEED TO BE MONITORING TRAFFIC FOR A PERIOD OF TIME TO UNDERSTAND WHO IS COMING AND WHAT BUCKETS THEY FALL INTO. JUST HELP US UNDERSTAND THAT A LITTLE BIT. >>YEAH, YEAH TOTALLY. OUR IDEAL CUSTOMERS USUALLY HAVE ABOVE 20,000 UNIQUE VISITORS A MONTH. SO THIS IS A SIZABLE GROUP TO RUN A STATISTICALLY SIGNIFICANT TEST AND IT USUALLY TAKES US ABOUT ONE TO TWO WEEKS FROM THE TIME TO IMPLEMENT OUR SCRIPT ON THEIR WEBSITE. SO AT THAT POINT IN TIME THEY CAN START DEPLOYING PERSONNIZATION PERSONALIZATION AND ONCE WE START CAPTURING THAT DATA WE HAVE A REPRESENTATIVE GROUP. >>THEN YOU’RE TAGGING IT TO SORT OF IDENTIFY LIKE SIZE, INDUSTRY, ET CETERA? >>EXACTLY. >>OKAY. >>SO WE’LL INTEGRATE WITH THIRD-PARTY DATA SOURCES, THE THINGS LIKE REVERSE IP ENRICHMENT AND ACQUISITION CAMPAIGNS THAT BROUGHT THEM TO THE WEBSITE AND ALSO THE COMPANY’S FIRST-PARTY DATA, SO INFORMATION ABOUT WHERE THAT VISITOR IS IN THEIR PIPELINE, WE CAN GET FROM THE CR REM AND THE INFORMATION FROM THE SIGN- UP FORM. ALL THAT GETS CREATED INTO A SINGLE PROFILE. >>FINAL QUESTION? >>WHAT’S YOUR PRICING? HOW ARE YOU PRICING IT? >>WE’RE A SAAS SUBSCRIPTION SERVICE. WE CHARGE A PRICE PER MONTH. RIGHT NOW WE START AT $1,500 PER MONTH AND WE ARE LOOKING TO INTRODUCE A STARTUP PACKAGE THIS QUARTER AS WELL. >>AWESOME. GIVE IT UP FOR MUTINY! >>THANK YOU. >>THAT ENDS THE FIRST SESSION OF THE STARTUP BATTLEFIELD. THE JUDGES WILL FOLLOW ME BACKSTAGE AND DELIBERATE. THEY’LL HELP US CHOOSE SOME FINALISTS. BEFORE THEY DO THAT, THOUGH, LET’S HAVE ONE LAST ROUND OF A LAWS FOR OUR AWESOME JUDGES! >>MORE APIs ARE CREATED ACROSS THE ORGANIZATION. WITH THIS INCREASE THEY CAN BECOME MORE CHALLENGING FOR DEVELOPERS TO FIND THESE INTERNAL APIs AND REUSE THEM WHEN THEY’RE DEVELOPING NEW SOFTWARE. THAT’S WHERE RAPID API FOR TEAMS CAN HELP. RAPID API FOR TEAMS ENABLES DEVELOPMENT TEAMS TO TURN THEIR APIs INTO A PRIVATE WORKSPACE. DEVELOPERS CAN FIND ANY INTERNAL API, VIEW ITS DOCUMENTATION, TEST IT AND WORK COLLABORATIVELY. TEAM MEMBERS CAN SUBSCRIBE TO ANY PUBLIC API AVAILABLE ON THE RAPID API MARKETPLACE AND THE ENTIRE TEAM CAN SEE AND USE THAT SUBSCRIPTION. THIS WAY YOU ONLY PAY ONCE FOR ANY API YOUR TEAM USES. RAPID API FOR TEAMS MAKES IT EASIER TO SHARE AND COLLABORATE ON APIs. GET STARTED TODAY ON RAPIDAPI.COM/TEAMS. >>OUR TEAMS LOVE BUILDING COMPANIES THAT CREATE VALUE AND MAKE A DIFFERENCE AS WELL AS OUR HAVE. S INVESTMENTS IN COMPANIES BUILDING MEANINGFUL ONLINE GLOBAL CLASSIFIEDS, DELIVERS AND PAYMENT CONTACTS. >>THEY ARE GLOBAL AND THEY UNDERSTAND CULTURAL BUSINESS. THEY HAVE A VERY HELPFUL AND SPECIFIC ADVICE THEY CAN GIVE TO US. >>THEY THINK LIKE ENTREPRENEURS. THEY’RE A FANTASTIC PARTNER. >>OUR BIG VISION IS IT TO MAKE LIFE BETTER FOR 1 BILLION PEOPLE AND I BELIEVE THIS IS THE PERFECT PARTNER TO HELP US ACHIEVE OUR DREAMS. >>WHY DID YOU COME TO THIS WORKSHOP? TO LEARN. TO START TO UNLEARN EXAMPLES THAT HAVE BEEN CREATED VERY INCORRECTLY IN THE PAST. >>I WANT TO BE WHERE WE ASK QUESTIONS LIKE WHY AND THE BIG QUESTION I ASK IS WHAT IF? YOU KNOW, IT’S A DIFFERENT WAY OF THINKING AT STANFORD THAN IT IS AT ANY OTHER UNIVERSITY IN THE WORLD. >>I REALIZED I WAS GETTING STALE. SO I SAID IT’S TIME FOR ME TO MOVE ON AND LOOK FOR GREATER THINGS AND HAVE MORE IMPACT. >>AT LOCKHEED MARTIN WE’RE ON A MISSION, YOUR MISSION. WHEN MILLIONS OF PEOPLE ARE COUNTING ON YOU, YOU CAN COUNT ON US TO BUILD THE IMPOSSIBLE, TO INVENT THE INCONCEIVABLE AND SOLVE EVERY PROBLEM WITH SPEED AND RELIABILITY. EVERY MISSION IS AN EXPEDITION OF THE GREATEST IMPORTANCE BOTH TO YOU AND TO US. >>>LADIES AND GENTLEMEN, PLEASE WELCOME BACK TECH CRUNCH MANAGING EDITOR AND DISRUPT EMCEE JORDAN CROOK. >>MY OVERLY ENTHUSIASTIC CROWD, IT’S LOVELY TO SEE YOU AGAIN. YEAH. JUST NOTHING, JUST CHIRPS, OKAY. I JUST WANTED TO REMIND YOU GUYS THAT THE EXTRA CRUNCH STAGE IS VERY LIVELY RIGHT NOW AND ACTUALLY AT 1:55 WE HAVE A PANEL ON HOW TO HIRE A BREAK NECK SPEED. HIRING FOUNDERS START OFF AND BUILD THEIR PRODUCTS AND THEY’RE ALL INTO THE PRODUCT AND SUDDENLY YOU HAVE TO GO TO HIRING LIKE A BUNCH OF PEOPLE AND IT’S A COMPLETELY DIFFERENT SKILL SET. IF YOU WANT TO HEAR MORE ABOUT THAT, PLEASE GO CHECK THAT OUT ON THE EXTRA CRUNCH STAGE RIGHT NOW. ON THE MAIN STAGE I’M ABOUT TO BRING OUT MY BOSS AND LIKE MY BOSS’ BOSS’ BOSS LIKE ALL THE WAY UP. SO I’M NOT GOING TO MAKE ANY MORE JOKES. PLEASE WELCOME TO THE STAGE THE CEO OF VERIZON WIRELESS AND YOUR MODERATOR, WARM WELCOME, PLEASE. >>THANK YOU. WELCOME. >>THANK YOU. >>THANKS FOR COMING OUT AMIDST ALL ADVERSITY. >>YEAH. SOME ADVERSITY ALWAYS GOOD. MAKES US STRONGER, YEAH. WHY DOES VERIZON OWN TECH CRUNCH? >>VERIZON PRIDES OURSELVES TO HAVE THE BEST NETWORK AND THE BONUS IS ALL THE CONDUIT WE’RE DOING AND ESPECIALLY MOBILE AND I THINK THAT’S WHERE IT IF IT’S IN, THE WHOLE VERIZON MEDIA GROUP. THAT’S OVER THE TOP FOR US AND WHEN I THINK 5G WHICH I HOPE WE’LL COME TO, IT’S A TOTALLY NEW WAY TO ACTUALLY COMMUNICATE WITH CON CONSUMERS WHEN IT COMES TO CONTENT. I WOULD SAY WE ARE THE ONLY CARRIER IN THE WORLD IF YOU CALL US CARRIER THAT HAS AI IN- HOUSE AND THE NETWORK IS GOING VIRTUAL. WE’RE VISUALIZING THE NETWORK. WE NEED ALL THOSE TYPE OF FORCES AND GREAT CONFIDENCES. SO IT MAKES SENSE FOR MANY REASONS TO HAVE THAT INSIDE IN ORDER TO BE EVEN STRONGER FOR OUR CONSUMERS. >>SO WHY IS THE MEDIA GROUP SUCH A GOOD TEST BED FOR SOMETHING LIKE 5G? >>5G, IF I CAN JUST PULL BACK. WHEN WE TALK ABOUT 5G, WE THINK IT’S A FORWARD STEP FROM 4G. IT’S NOT. IT WAS BASED ON TWO PARAMETERS. YOU TOOK YOUR PHONE FOR DOING SMS AND VOICE AND THEN YOU CAN BROWSE ANY TYPE OF ONLINE IN 4G. WHEN THE START OF THE SIGN ON 5G, THE THINKING WAS HOW DO WE TRANSFORM ENTERPRISES AND SOCIETY WIRELESSLY? OF COURSE, GOING TO BE A LOT OF BENEFITS FOR CONSUMERS AND 5G HAS EIGHT CURRENCIES, NOT TWO. SO TWO PRESENT SPEEDS ARE EXPONENTIALLY MUCH FASTER. WE SEE ALREADY RIGHT NOW ON A SMARTPHONE 2, 3 GIG ON A SMARTPHONE, COUPLE YEARS FROM NOW IT’S GOING TO BE 10 BIG ON A PHONE EASILY. THE THROUGH-PUT IS ENORMOUS. THE LATENCY WHICH HASN’T BEEN THAT IMPORTANT ON 4G, WE’RE GOING TO DESIGN DOWN TO 10 MILLISECONDS AND TODAY ON THE 4G NETWORK, I WOULD SAY IT’S 80, 90 MILLISECONDS? >>10 MILLISECONDS IS FAST TOUCH. >>YOU CAN DO THINGS YOU HAVEN’T BEEN ABLE TO DO BEFORE AND BATTERY LIFETIME ONLY A 10th OF WHAT WE USED TODAY AND IF I SHOULD DO A SLICE OF OUR 4G NETWORK TODAY, IT WOULD TAKE US A COUPLE OF WEEKS IF I DO THAT FOR A CUSTOMER, SAY HEY, I WANT MY 4G NETWORK. >>RIGHT. >>WE SHOULD BE DOWN TO 90 MINUTES TO DO SLICES OF THE NETWORK. THE OTHER THING IS SPEED AND MOBILITY SPEED MEANING THAT WE CAN CAPTURE A SIGNAL UP TO 500 KILOMETERS PER HOUR IN 5G AND YOU ASK ME WHY DO YOU NEED THAT? YOU HAVE DRONES. YOU HAVE HIGH SPEED TRAINS WHICH TODAY WE CANNOT SORT OF CAPTURE WHEN WE HAVE 4G SIGNAL. SO ALL THESE EIGHT CURRENCIES ARE ACTUALLY A TOTALLY NEW TEST BED AND PLATFORM FOR DOING NEW TYPE OF BUSINESSES. IT’S DRAMATICALLY DIFFERENT FROM ANYTHING ELSE YOU HAVE SEEN FROM 4G. STILL IT’S GOING TO BE TAKE LOT OF GREAT THINGS FOR CONSUMERS AND ALL THESE CURRENCIES, BUT IT’S ALSO GOING TO BE MUCH WIDER. I SEE THIS AS A QUANTUM LEAP COMPARED TO 4G. >>WHEN YOU’RE TALKING ABOUT THE 5G IMPLEMENTATION OF VERIZON SPECIFICALLY, WHAT’S THE DIFFERENT OF ROLLOUT AND TECHNOLOGY AND IMPLEMENTATION ON THE GROUND VERSUS A COMPETITOR LIKE AT&T? >>I THINK THAT FIRST OF ALL, YOU ONLY BUILD EIGHT CURRENCIES IF YOUR CUSTOMERS ARE GOING TO USE THEM. SO LET’S ASSUME I’M A EUROPEAN CARRIER ONLY HAVING CONSUMERS. I WOULDN’T BUILD IT AS I BUILD RIGHT NOW. WE BUILD FIBER IN OVER 60 CITIES TODAY. WE’RE GOING TO HAVE FIBER READY BASED STATION BECAUSE WE’LL HAVE SO MUCH DATA. WE’RE BASICALLY GOING TO BUILD FOR ALL THESE EIGHT CURRENCIES WITH THE THROUGH-PUT SPEED, LOW LATENCY AND ALL THAT. THAT’S DIFFERENT FROM ANYBODY ELSE. I DON’T KNOW WHAT AT&T IS DOING TO BE HONEST OR AT LEAST I CANNOT TALK ABOUT IT. SO I THINK THAT’S A BIG DIFFERENCE FOR US HOW WE’RE GOING TO BUILD THE NETWORK AND YOU HAVE TO UNDERSTAND WE ARE FOUR BUSINESS CASES ON THE SAME INFRASTRUCTURE WHICH IS IMPORTANT FOR THIS AUDIENCE. NUMBER ONE, THE COST PER BIT IS GOING DOWN WITH EVERY TECHNOLOGY. >>RIGHT. >>THEN THE MOBILITY CASE, YOU’RE GOING AROUND WITH A SMARTPHONE WITH 5G. WE LAUNCHED 13 CITIES, 13 NFL STADIUMS AND THE NBA SEASON HASN’T EVEN STARTED. WE CONTINUE TO BROADEN THAT. THEN WE’RE 5G HOME. WE’RE ACTUALLY GOING TO INSTEAD OF HAVING A 5G HOME WHERE 5G FROM THE EDGE TO THE HOME AND YOU CAN HAVE THE SAME EXPERIENCE. WE HAVE THAT INFOUR CITIES TODAY. WE’LL HAVE MORE LATER THIS YEAR. ULTIMATELY THE BUSINESS CASE IS A 5G MOBILE EDGE COMPUTE. WHEN YOU BRING ALL THESE CURRENCIES, ALL THE CAPABILITIES OF 5G TO THE EDGE OF THE NETWORK SO YOU CAN HAVE THIS THROUGH-PUT AND THE SPEEDS OF THE 10 GIG, I’M NOT SURE, COULD BE EVEN HIGHER AND YOU START DOING APPLICATIONS ON THE EDGE FOR CONSUMERS, FOR ENTERPRISES. >>ON THE DEVICE THAT CAN TRANSMIT FASTER. >>ABSOLUTELY. IF YOU WANT TO LOAD SOFTWARES ON TOP ON THE MOBILE EDGE COMPUTE SO YOU CAN DO A LOT OF PROCESSING AT THE EDGE, THAT’S A TYPICAL USE CASE. THINK OF THE EXAMPLE WITH ROBOTICS IN IT, INSTEAD OF HAVING WIRES TO EVERYTHING YOU BASICALLY DO A 5G FACTORY AND ALL THE ROBOTS CAN BE RECONFIGURED IN SECONDS AND YOU HAVE MILLISECONDS OF LATENCY TO THEM. SO SUDDENLY YOU NEED TO RETHINK THE WHOLE WAY YOU HAVE DONE YOUR INFRASTRUCTURE FROM THE BEGINNING. >>SO WHEN VERIZON IS DOING ROLLOUT OF 5G AS IT’S IN THE PROCESS OF DOING RIGHT NOW, ONE OF THE THINGS I THINK IS IMPORTANT TO SEE WHEN YOU LOOK AT THE ROLLOUT OF 3G AND 4G IS HOW IT OFTEN ROLLED OUT IN AREAS THAT WERE, FRANKLY, RICHER AND WIDER THAN A LOT OF OTHER AREAS FIRST BECAUSE THEY FELT WE HAVE THE CUSTOMER BASE. WE CAN SELL TO THESE CUSTOMERS. WE KNOW THEY’LL BE AVAILABLE. IS VERIZON DOING WORK TO MAKE SURE BASICALLY THAT 5G TECHNOLOGY IS AVAILABLE ON A UNILATERAL BASIS VERSUS A SOCIOECONOMIC BASIS THAT TENDS TO FAVOR A CERTAIN GROUP OF PEOPLE? >>ABSOLUTELY. TO TWO OF THEM ARE VERY RURAL WE’VE LAUNCHED SO FAR. ON SATURDAY EVENING I ANNOUNCED TODAY WITH PHARRELL WILLIAMS THAT WE’RE GOING TO PUT 5G IN 100 SCHOOLS THE NEXT THREE YEARS. SO WE’RE REALLY TRYING TO BRING OUT 5G IN THE MOST UNDERSERVED MARKETS AS WELL, ESPECIALLY WHEN IT COMES TO SORT OF CLASSROOMS, SCHOOLS, THINGS LIKE. THAT REMEMBER ALSO WE START TO ALSO DEPLOY IN OUR 5G SPECTRUM WHICH HAS TREMENDOUS SPEED BUT NOT AS WIDE COVERAGE. WE’LL USE OTHER SPECTRUMS FOR. THAT CLEARLY WE SEE ANY SORT OF PLACE WHERE THERE’S A CLUSTER OF A LOT OF PEOPLE, ET CETERA, THAT’S THE SWEET SPOT FOR MILLIMETER WAVE RIGHT NOW, BUT ULTIMATELY ANY SPECTRUM WE WOULD HAVE WOULD BE 5G SPECTRUM AS ANY SPECTRUM TODAY IS A 4G SPECTRUM. IT’S TO MATURE THE INDUSTRY, THE DEVICES, WHATEVER YOU’RE CONNECTING TO. >>OKAY. I ACTUALLY HAVE AN INTERESTING QUESTION. SO THE INDUSTRY AT LARGE IS KIND OF DOING — WELL, THE TECH INDUSTRY, ESPECIALLY BIG TECH, HAS A SORT OF NAVAL GAZING THING GOING ON AS FAR AS REGULATION GOES. AS THE CEO OF A TELECOM COMPANY, HOW DO YOU FEEL ABOUT BIG TECH GETTING MORE SCRUTINY FROM REGULATORY INVESTIGATIONS? >>I THINK FIRST OF ALL, TECHNOLOGY IS EVOLVING EXTREMELY FAST ALL THE TIME AND TO RECOLLECT REGULATE IT TOO MUCH, YOU WOULD ALSO CAP TECHNOLOGY ENORMOUSLY. YOU NEED TO FIND A BALANCE OF LIGHT TOUCH AND CORPORATE RESPONSIBILITY BECAUSE THE BONUS, ONE OF THE BEST TECHNOLOGIES IN THE WORLD IS THE MOBILITY BROADBAND AND CLOUD. ANY SUSTAINABLE SCALABLE SOLUTION IN THE WORLD RIGHT NOW RESTS THE BIGGEST CHALLENGE ON EARTH WILL HAVE EDUCATION, HEALTHCARE, INEQUALITIES. THEN YOU HAVE THESE THREE TECHNOLOGIES AND THEY EVOLVED FANTASTICALLY AS A LOT OF DEVELOPERS, PLATFORM DELIVER COMPANIES. FOR ME IT HAS TO BE LIKE TOUCH BECAUSE TECHNOLOGY IS MOVING SO FAST. TODAY WHEN PEOPLE ARE WORKING WHAT’S GOING TO HAPPEN IN FIVE YEARS? THAT BALANCE, BUT ULTIMATELY IT WILL COME DOWN TO GUYS LIKE ME RUNNING BIG TECH COMPANIES THAT WE ARE RESPONSIBLE ALSO HOW THIS IMPACTS SOCIETY AND HAVING A WIDER RESPONSIBILITY THAN WE EVER HAD BEFORE. SO I THINK WE’LL BE DOING THIS AS WELL. WE ARE 120 MILLION WIRELESS CONSUMERS IN THIS COUNTRY. I THINK THAT BALANCE IS HOW IT HAS TO BE STRUCK, BUT I’M NOT A GENIUS ON DOING REGULATION, ET CETERA, BUT I THINK THAT’S — BECAUSE YOU DON’T WANT TO HAMPER THE TECHNOLOGY EVOLUTION THAT IS SO IMPORTANT TO THIS PLANET. I JUST CAME OUT FROM THE U.N. TALKING ABOUT ALL THE 17 SUSTAINABLE DEVELOPMENT GOALS, HOW ARE WE GOING TO ACHIEVE THEM? THE BONUS, IF TECHNOLOGY IS NOT GOING TO HELP THEM, I’M NOT SURE HOW WE’RE GOING TO DO IT. >>RIGHT. >>WOULD YOU VOTE FOR ELIZABETH WARREN EVEN IF SHE’S VERY, VERY REGULATORY HEAVY? >>SO REMEMBER I’M SWEDISH. >>SURE. >>SO I’M NOT VOTING IN THIS COUNTRY. >>THAT’S A GREAT OUT. I DID SAY WOULD YOU, NOT ARE YOU, BUT I GET IT. >>YOU HEARD MY ANSWER. >>SO DO YOU THINK THAT THERE IS A VALIDITY TO A COMPANY LIKE HUAWEI BEING UNDER SO MUCH SCRUTINY FOR THE COMMUNICATIONS EQUIPMENT IT’S PROVIDING THE COUNTRY? DO YOU THINK IT’S RIGHT TO BAN HUAWEI FROM SELLING COMMUNICATIONS EQUIPMENT IN THE U.S.? >>I DON’T HAVE ANY INSIGHT FOR THAT. I CAN’T EVEN ANSWER ON. I THINK IT’S IMPORTANT IN GENERAL I THINK THAT 5G, 6G NEED TO HAVE A FLOOR OR SORT OF SUPPLY CHAIN WITH MANY SUPPLIERS. I THINK THAT’S IMPORTANT, BUT ONE THING I THINK THAT PEOPLE UNDERESTIMATE WHEN IT COMES TO THE TELECOM INDUSTRY, THERE’S A REASON WHY ALL YOUR PHONES THAT YOU HAVE IN THIS ROOM ACTUALLY WORKS IN ANY COUNTRY IN THE WORLD, BECAUSE YOU SHARE PATENTS IN THE INDUSTRY. THE SMARTEST PATENTS. SO WHEN THE EIGHTH CURRENCIES WAS DECIDED AS THIS IS THE STANDARD FOR 5G, ALL THE TECH COMPANIES IN THE TELECOM SECTOR THROW IN THIS IS THE BEST PATTERN TO SOLVE IT AND FINALLY SAY THESE ARE THE PATTERNS WE’RE GOING TO USE TO BUILD IT. NOW EVERYONE IT BUILD. IF YOU’RE IN THE INDUSTRY, THE LAST THING YOU DO WHEN YOU HAVE A PATENT IS SHARE WITH COMPETITORS. THAT’S WHY THIS INDUSTRY IS TO CRITICALLY IMPORTANT AND THAT’S WHY SO MANY PEOPLE ON THIS EARTH ACTUALLY HAVE A PHONE IN THEIR HANDS. >>I THINK THAT YOU WITH THE THINGS THE PEOPLE IN THIS AUDIENCE ESPECIALLY ARE MOST INTERESTED IN, I THINK YOU TALK A LOT ABOUT 5G FOR THE ENTERPRISE AND THE OPPORTUNITIES DOWN THE LINE, BUT WHAT ARE SOME OF THE NEAR TERM PRACTICAL WAYS THAT YOU THINK 5G WILL ACTUALLY BENEFIT A VERY YOUNG COMPANY, LET’S SAY A COMPANY UNDER 100 PEOPLE JUST GETTING OFF THE GROUND? HOW ARE THEY BEST TO PREPARE THEMSELVES FOR THIS AND WOULD UTILIZE IT? >>I REMEMBER I GOT A LOT OF QUESTIONS ON STAGE WHEN 4G WAS COMING, YOU KNOW, OH, WHAT APPS GOING TO BE ON 4G AND I MISSED IT TOTALLY HOW MUCH WOULD HAPPEN IN THIS REGION OF THE WORLD, HOW MUCH INNOVATION THAT WAS ON TOP OF 4G. I SEE THAT THE 5G PLATFORM IS EVEN MORE OPEN AND HAVING EVEN MORE OPPORTUNITY. SO I THINK THAT WITH COMPANIES LIKE WE ARE DOING, WE HAVE OUR TEST BEDS. WE HAVE FOUR OR FIVE INNOVATION CENTERS ACROSS THE COUNTRY WHERE YOU CAN ACTUALLY ELABORATE WITH 5G ALREADY. WE HAVE 5G CHALLENGE. WE HAVE HUNDREDS OF COMPANIES COMING UP WITH IDEAS. THE 5G MOBILE EDGE COMPUTE WE HAVE SAID PUBLICLY WE’RE GOING TO LAUNCH THE FIRST 5G MOBILE EDGE COMPUTE CENTERS IN Q4 THIS YEAR. THAT MEANS THAT THEN ACTUAL SEE EVEN MORE OPPORTUNITIES START TO INNOVATE ON TOP OF THE 5G MOBILE EDGE COMPUTER. I HAVE TO COME BACK A LITTLE BIT ON EXACTLY, BUT I THINK THAT YOU NEED TO START THINKING ABOUT HOW WE CAN INNOVATE FOR CONSUMERS, ENTERPRISE SOCIETY ON THAT PLATFORM WITH THOSE ENORMOUSLY CAPABLE CURRENCIES THAT WE’LL HAVE IN 5G. >>TO BRING IT BACK TO THE MEDIA THING, I MEAN THE APPROACH OF VERIZON IN THE MEDIA BUSINESS DEFINITELY SEEMS TO BE MORE LIGHT TOUCH THAN SOMEBODY LIKE AT&T WHO IS GOING VERY HEAVY. THEY’VE OBVIOUSLY BOUGHT A BROADCASTER AND THAT SORT OF THING. WHY DO YOU THINK YOUR APPROACH IS DIFFERENT? >>I’M NOT SURE MY APPROACH IS DIFFERENT. IT’S STRATEGY. YOU BUILD THE STRATEGY ON WHAT YOU THINK ARE THE BEST DNA OF THE COMPANY. OTHERS MIGHT HAVE OTHER DNA AND OTHER ASSETS AND THEY BUILD ON THAT. I THINK THE STRENGTH OF VERIZON IS OUR NETWORK. OUR 3G AND 4G NETWORK HAS ALWAYS BEEN THE BEST IN THE MARKET. WE’LL CONTINUE TO HAVE THE BEST COVERAGE AND THE BEST THROUGH- PUT AND WE THINK OUR CUSTOMERS, THEY’RE ENTERPRISE, CONSUMERS, SMALL TO MEDIUM BASED, GOVERNMENT OR WHATEVER, THEY ARE TOGETHER WITH VERIZON BECAUSE WE HAVE THE BEST NETWORK. THAT’S WHY WE HAVE A NETWORK SERVICE MODEL. WE BASICALLY BUILD ONE NETWORK NOW. WE HAVE RESIGNED A WHOLE NETWORK TOPOGRAPHY IN ORDER TO SEE THAT AT THE EDGE WE DECIDE WHAT TYPE OF ACCESS WE’RE GIVING THAT CUSTOMER. SOME GET 5G. SOME GET 4G. SOME HAS THE FIBER. SOME MIGHT HAVE EVEN THE COPPER. WE SEE THAT WE’RE GOING TO GET OPTIONALITY. THAT GOES FOR OUR CUSTOMER BROADBAND AS WELL. WE GIVE THEM OPTIONALTY. YOU CAN CHOOSE YOUTUBE TV, FIOS, WHATEVER. WE WANT TO GIVE OPTIONALITY FOR OUR CUSTOMER ON A VERY STRONG BASE ON THE NETWORK. >>IN FIVE YEARS WHAT DO YOU THINK THE BUSINESS MIX OF VERIZON LOOKS LIKE? IS 5G THE PILLAR THAT YOU’RE RESTING ON IN FIVE YEARS? >>EXTERNALLY ESTIMATES SAYS THAT BY 2024 EXTERNAL VERIZON SAYS ROUGHLY 50% OF THE POPULATION WILL HAVE A 5G PHONE. THE SAME THING WILL SHOW BETWEEN 3D AND 4G. YOU NEED TO KEEP 4G FOR A LONG, LONG TIME AND I THINK THAT WE’RE GOING TO SEE 4G CONTINUE TO LIVE FOR TAKE LONG, LONG TIME AND WE ARE CONTINUING TO INVEST HEAVILY IN THE NETWORK OF 4G AS WELL. SO I THINK THAT WE’RE GOING TO SEE AN INCREMENTAL REVENUE WITH TIME AND WE HAVE SAID TO THE MARKET THAT 2021 WE WILL SEE SOME IMPACT FROM 5G HOME AND 5G MOBILITY AND2022 FROM 5G MOBILE EDGE COMPUTE. THAT’S WHAT WE’VE SAID TO THE MARKET. SO 4G WILL CONTINUE TO BE IMPORTANT. WE INVEST 17 TO 18 BILLION U.S. DOLLARS EVERY YEAR IN NETWORK. THAT’S HOW IMPORTANT WE THINK THE NETWORK IS. >>WITH THE MILLIMETER WAVE TECHNOLOGY THAT YOU’RE USING, THAT INVESTMENT HAS TO GO UP, RIGHT, OVER THE NEXT COUPLE OF YEARS? >>YEAH. REMEMBER WE STARTED WITH MILLIMETER MAYBE FOUR, FIVE YEARS AGO AND WHEN YOU BUILD THE NETWORK, THERE’S A LOT OF STUFF YOU NEED TO INVEST IN BEFORE YOU COME TO THE STATION, WHICH IS ONE PIECE BUT NOT ALL OF IT. >>SO THE PART THAT PEOPLE SEE. >>YEAH. BUT THE FIBER INVESTMENT THAT WE’VE BEEN ONGOING FOR A WHILE, WE DO 400 ROUTE MILES OF FIBER EVERY MONTH RIGHT NOW IN THIS COUNTRY. I DON’T THINK THAT ANYBODY IS EVEN CLOSE TO BUILD AS MUCH FIBER AS VERIZON IS DOING THIS MOMENT. SO THERE’S A LOT OF OTHER STUFF THAT WE’RE ALREADY DOING THAT IS EMBEDDED IN ACTUALLY THE DELIVERY OF THE 5G EXPERIENCE. YOU NEED ALL THE WAY FROM THE DATA CENTER ALL THE WAY OUT TO THE CONSUMER TO RECEIVING THE 5G IS A LOT OF INVESTMENT. WE CAN DO BASICALLY ALL THE INVESTMENT FROM THE DATA CENTER UP TO THE ACCESS AND WE’RE DOING THEM. >>IT’S NOT YET TO MY HOUSE. SO I’LL GIVE YOU MY ADDRESS AFTERWARDS. MAYBE WE CAN FAST TRACK THAT. I’M PRETTY HUNGRY FOR IT. OKAY. EXCELLENT. I THINK THAT THE LAST QUESTION I HAVE IS WHAT DO YOU THINK THE COMPETITIVE ADVANTAGE IS TO SOMEBODY BUILDING A COMPANY NOW OR IN THE NEXT LET’S CALL IT TWO YEARS? IF THEY WANTED TO BUILD OUT A PARTICULAR FEATURE SET THAT YOU THOUGHT WOULD BENEFIT OF THE MOST FROM 5G, WOULD IT BE A COMPUTE HEAVY LOCALIZED SERVICE? WOULD IT BE SENDING LARGE AMOUNTS OF DATA? LIKE WHAT CUSTOMERS ARE GOING TO BENEFIT THE MOST? >>I THINK THAT IF I WOULD BE THINKING ABOUT IT, I WOULD THINK A LOT ABOUT WHAT YOU WILL HAVE IN THE MOBILE EDGE COMPUTE BECAUSE YOU’RE GOING TO HAVE STORAGE COMPUTE IN THAT. SO YOU CAN ACTUALLY RETHINK THE WHOLE IDEA THAT YOU NEED TO HAVE THAT EITHER FOR UP IN THE NETWORK IN THE DATA CENTERS OR IN THE DEVICE, WHATEVER DEVICE. SOMETIMES WE LOCK OURSELF AS A PHONE. THERE ARE SO MANY OTHER DEVICES THAT IS CONNECTED. SO I THINK THAT WE’LL START RETHINKING HOW DO YOU BUILD A NEW — JUST ASSUME DIGITAL CAMERAS, FOR EXAMPLE. THE COST OF THE DIGITAL CAMERA, THEY HAVE A LOT OF COMPUTER STORAGE IN THE CAMERA. SO THEY BECAUSE OF THE LATENCY AND ALL THAT, JUST IMAGINE YOU CAN TAKE OUT THAT. YOU PUT IT INTO THE NETWORK INSTEAD. WHAT CAN YOU DO WITH IT AND HOW CAN YOU CHANGE THE PERCEPTION? HOW CAN YOU DO A SERVICE ON THAT? THAT’S WHERE I REALLY WOULD LIKE TO THINK ABOUT, BUT THE GOOD THING, THERE ARE THOUSANDS OF PEOPLE THAT ARE FAR MORE SMARTER THAN ME THAT ARE GOING TO SEE WHAT THEY CAN TRANSFORM AND AS I SAID, I THINK 4G WAS JUST DRAMATIC WHEN IT COMES TO INNOVATION ON THE NETWORK. 5G IS AN EVEN SUPERIOR PLATFORM FOR INNOVATION BECAUSE IT HAS SO MUCH MORE CURRENCIES THAT YOU CAN ACTUALLY BE A BUSINESS ON. >>EXCELLENT. THANK YOU VERY MUCH. I APPRECIATE IT, SIR. THANK YOU FOR COMING. >>THANK YOU. >>THANK YOU ALL. >>I NEED TO COME UP HERE. CAN YOU HURRY, PLEASE? I’M FIRED. NO. OKAY. UP NEXT ON THE Q AND A STAGE, I KNOW YOU GUYS ARE ALL HUSTLING TO GET OUT OF HERE BECAUSE WE DON’T HAVE ANYTHING EXCITING COMING UP NEXT, BUT JUST IN CASE YOU ARE ON THE Q AND A STAGE WE HAVE WINNING INVESTORS WITH PETE FLINT, RYAN HIRSCH AND PATRICK A NAKASKI. IF YOU GUYS CAN’T GET EXCITED FOR WHAT’S COMING UP NEXT, THEN WE ARE GOING HERE. YES. THANK YOU, THANK YOU. OUR NEXT GUESTS ARE ANG LEE AND WILL SMITH, BUT BEFORE I BRING THEM UP WE’RE GOING TO SHOW YOU A LITTLE VIDEO. ENJOY, GUYS. HAVE FUN. >>WHO ARE YOU? I DON’T WANT TO >> SHOOT YOU. >>FINE. MIND IF I SMOOT YOU. >>HAS THIS EVER HAPPENED BEFORE, YOUR OWN GOVERNMENT TRYING TO KILL YOU? >>THIS IS A MOVIE THAT WILL EXPAND FILM MAKING IN THE FUTURE, THE WAY WE SHOT IT AND WE HAVE A DIGITAL HUMAN BEING. >>IT’S REALLY THE FIRST TIME THAT THE VISION OF THE FILM WAS TECHNOLOGICALLY ABLE TO BE REALIZED. YOU CAN TAKE SOMEONE AND YOU CAN HAVE A 50-YEAR-OLD VERSION AND A 23-YEAR-OLD VERSION AND IT’S PHOTO REALISTIC. >>IT’S NOT JUST TECHNOLOGY. THEY’RE STILL CREATING ART. >>HOLY MOLY. >>GOOD WORK, EVERYONE. >>THIS IS THE FOREFRONT OF DIGITAL HUMANS FROM AVATAR TO THE REALISM AND EMOTION OF PLANET OF THE APES. >>THEY’VE REALLY BUILT ON SUCCESS. THERE’S ALSO A LOT OF NEW INNOVATION AND NEW DEVELOPMENT FOR THE TEAM TO PULL TOGETHER. >>WE ARE CREATING A DIGITAL HUMAN THAT NOT ONLY DOES HE LOOK CONVINCE IS AND BELIEVABLE IN A FRAME, BUT HE ALSO LOOKS BELIEVABLE AT 120 FRAMES A SECOND. >>OUR ANIMATION TEAM REALLY GETS TO THE BOTTOM OF WHAT MAKES THE ESSENCE OF A PERFORMANCE? WHAT ARE THE FINAL NUANCES? >>FROM BREATHING TO THE TICS IN THE FACE. WE’VE GOT A LITTLE HEARTBEAT SHOWING IN HIS NECK AS WELL. WE’RE TAKING IT TO AN EXTRA LEVEL WE HAVEN’T DONE BEFORE. >>WHAT WE PUT ON THE SCREEN HAS TO LIVE UP EVERY SINGLE THING HE’S DONE ON SET. >>OF ALL THE PEOPLE IN THE WORLD WHY WOULD HE SEND YOU? >>BECAUSE I’M THE BEST. >>YOU ARE OBVIOUSLY NOT THE BEST. >>TECHNOLOGY ALLOWS THE AUDIENCE TO ENGAGE BE IN THE THEATRICAL EXPERIENCE IN A NEW WAY. >>STARTED TO EXPERIMENT WITH HIGH FRAME RATE 3D BECAUSE HE WAS SEARCHING FOR HEIGHTENED EXPERIENCE FOR THE VIEWER. >>SHOOTING IN 3D PLUS THIS, EVOLUTIONARY FORMAT WHERE YOU CAN SEE SO MUCH MORE IN A FRAME, REALLY FEEL LIKE YOU’RE THERE. >>SEE DETAIL OF THE FIGHT, DETAIL IN THE MOTION THAT WOULD BE BURIED IN BLUR AT A NORMAL FILM FORMAT. >>THE LOOK AND FEEL TENDS TO SPEAK TO THE YOUNGER GENERATION AND ANG IS REALLY PUSHING THAT TECHNOLOGY IN SPECTACULAR WAYS. >>GUYS, WE BROUGHT WILL SMITH AND ANG LEE TO DISRUPT! >>YEA! >>HELLO. >>YEA! >>A FEW PEOPLE HAVE THEIR PHONES OUT. THAT’S NICE. I THINK THEY’RE EXCITED. SO I GOT A CHANCE TO SEE GEMINI MAN ABOUT TWO WEEKS AGO. ANG WAS AT THE SCREENING AND HE DESCRIBED IT AS A LEAP OF FAITH BECAUSE OF THE TECHNOLOGY. WE’RE GOING TO TALK A LITTLE BIT MORE ABOUT THAT TECHNOLOGY IN A SECOND, BUT FIRST I WANT TO GO BACK TO THAT MOMENT FOR EACH OF YOU WHEN YOU REALIZED THIS IS WHAT YOU WERE GOING TO DO, YOU WERE GOING TO BUILD A YOUNG WILL SMITH ON A COMPUTER. HOW NERVOUS WERE YOU? >>WELL, I WAS ACTUALLY IS VERY EXCITED. I JUST TURNED 51 LAST WEEK. SO I WAS EXCITED BY THE PROSPECT OF HAVING A DIGITAL CHARACTER DO MY STUNTS BECAUSE MY BACK AND MY KNEES DON’T NECESSARILY WANT TO DO THE STUFF THAT THEY USED TO WANT TO DO. SO THE IDEA OF A CREATION WHEN ANG EXPLAINED WHAT HE WANTED TO DO, THAT IT IS THE FIRST EVER DIGITAL HUMAN, THAT IT’S NOT A DEAGED WILL SMITH. IT IS ACTUALLY A 100% DIGITAL CHARACTER AND THAT MADE ME — THE POSSIBILITIES OF THAT GOT ME REALLY EXCITED. >>ANG, WERE YOU NERVOUS? >>EXTREMELY NERVOUS. KIND OF WHEN WE STARTED 20 YEARS AGO WITH ALL THIS WITH HULK. THAT WAS THE FIRST TIME I THINK ANYBODY TRIED A FULL DIGITAL HUMAN. THEN 10 YEARS AGO I DID THE TIGER QUITE SUCCESSFULLY, MORE SO THAN HULK AND I KNOW DOING DIGITAL HUMAN IN THE BACK OF OUR HEAD WE DON’T WANT TO BELIEVE IT. WE WANT TO CHALLENGE IT. I KNOW THAT’S THE HARD PART, BUT I KNOW SCIENTIFICALLY IN MY HEAD I’M NOT A SCIENTIST, BUT IT SHOULD WORK AND I CALL IT LEAP OF FAITH BECAUSE PEOPLE INVEST SO MUCH MONEY IN THIS AND I TELL THEM I DON’T WANT THE AGE. I WANT TO CREATE FULL DIGITAL. I THINK IT’S TIME. IT’S REACHABLE AS WE THINK REACH, BUT NOBODY HAS DONE IT OR PROVEN IT CAN BE DONE. SO I WAS EXTREMELY NERVOUS, NOT FOR MYSELF, FOR THE INVESTORS. THEY PUT SO MUCH MONEY IN IT. WHAT IF IT DOESN’T WORK? WHAT IF PEOPLE DON’T WANT TO BELIEVE IT? WHAT WOULD HAPPEN? BUT I FEEL PRIVILEGED. AT THE SAME TIME IT’S A PRIVILEGE TO EVEN GIVE IT A TRY TO IMITATE GOD’S WORK AND PLAY WITH PEOPLE’S IMAGINATION. THAT’S DEFINITELY A PRIVILEGE. >>ONE OF THE OTHER QUESTIONS YOU WERE ASKED AT THE SCREENING IS WHAT DID WILL THINK WHEN HE GOT TO SEE THE COMPLETE OR NEAR COMPLETE JUNIOR FOR THE FIRST TIME? ANG SAID WHO CAN SAY WHAT WILL SMITH IS THINKING, BUT WE DO HAVE SOMEONE ON STAGE WHO MIGHT HAVE SOME IDEA. WHAT WAS IT LIKE? >>WHEN I FIRST SAW THE FIRST SHOT WITH THE TWO CHARACTERS SIDE BY SIDE, IT WAS REALLY CHILLING BECAUSE I’M LOOKING AT IT AND IT’S ME, BUT IT’S NOT. IT’S NOT ME. IT’S A COMPLETELY IS SEPARATE CHARACTER AND THERE ARE LITERALLY THOUSANDS OF ARTISTS THAT ARE CREATING EVERY LITTLE NUANCE OF THE MOVEMENT AND THE COLOR OF THE EYES AND THE WETNESS AND, YOU KNOW, SO THERE ARE THOUSANDS OF ARTISTS THAT ARE CREATING THAT. SO FOR ME THE FIRST TIME THAT I SAW THAT JUST THE ARTISTIC POSSIBILITIES, WHAT IT MEANT THAT WE COULD DO IN MOVIES NOW REALLY BLEW ME AWAY. >>DID YOU FEEL LIKE JUNIOR WAS BETTER LOOKING THAN YOU? >>YOU KNOW, I MEAN IF I COULD BE HONEST WITH YOU, I’M GLAD YOU BROUGHT THAT UP, YOU KNOW, THERE IS A CERTAIN GORGEOUSNESS TO AGE THAT JUST YOUNG FOLKS CAN’T CAPTURE THIS, MAN. YOUNG FOLKS CAN’T CAPTURE THIS. WHERE ARE ALL THE 20-YEAR-OLDS? ARE THERE ANY 20-YEAR-OLDS IN HERE? SEE, YOU ALL ARE NOT AS ATTRACTIVE AS THIS YET. YOU GOT TO GROW INTO THIS. >>SO LET’S TALK A LITTLE BIT MORE ABOUT THE TECHNOLOGY. WILL, YOU WERE SAYING LIKE YOU SAID THAT IT WAS NOT ABOUT DEAGING. IT WASN’T JUST ABOUT — >>RIGHT. >>– I DON’T WANT TO USE THE WORD WRINKLES, BUT WHATEVER IS HAPPENING OVER THERE IS AMAZING, BUT IT’S NOT JUST ABOUT TAKING YOUR REAL FOOTAGE AND TURNING YOU. >>BLACK DON’T CRACK. THAT’S WHAT THEY SAY. THAT’S THE WORD ON THE STREET. >>WHAT WAS IT ABOUT THIS APPROACH THAT APPEALED TO YOU VERSUS JUST HEY, LET’S DO WHAT WE’VE SEEN IN SOME OF THE MARVEL MOVIES, SOME OF THE STAR WARS MOVIES ALREADY? WHY WAS THIS THE APPROACH YOU WANTED TO TAKE? >>FOR ME I LIKE BACK, I’M OLD ENOUGH TO SEE WHAT IF I FACED MY YOUNGER SELF? I’M JUST OLD ENOUGH TO THINK ABOUT THAT EVEN. WILL, I DON’T KNOW IF HE DOES, BUT I THINK THE BEAUTY IS WHAT IF — WHICH IS ALSO THE PROBLEM, THAT WILL IS A MUCH BETTER ACTOR NOW THAN BEFORE, RIGHT? SO THAT’S A PROBLEM. >>I HOPE. >>BUT IN MY HEAD WE PUT WHAT’S INSIDE OF THIS MAN AND HIS ATTRACTIVE YOUNG BODY, WHAT WOULD THAT CREATION BE AS KIND OF A BEST OF BOTH WORLDS AND WHEN HE FACES THAT IN SUCH MEDIA, YOU KNOW, I’M DOING THE 3D WITH MORE CLARITY, SMOOTH- OUT, KIND OF AN IMMERSIVE MOVIE, WHAT IS THAT LIKE? ACTUALLY NOBODY’S SEEN THAT, EVEN HIMSELF. >>RIGHT. >>HIS PARENTS, THEY’VE NEVER SEEN HIM CLOSE UP LIKE THIS. IT’S A NEW CREATION THAT HAS ALL THE BEST OF WILL AND ALL THE BEST OF ALL THE ARTISTS WE WORK ON AND WE TRY TO MAKE BELIEVE. SEE IF PEOPLE WILL BELIEVE THAT OR NOT. >>RIGHT. >>WILL IS WILL. YOUNGER AGE IS YOUNGER AGE AND THEN HONESTLY I DON’T REALLY CARE WHAT HE THINKS. THAT’S THE MOVIE. DOES THE MOVIE PLAY? DO THEY WANT TO INVEST? YOU KNOW, GET HIM OR EVERYTHING THEY TALK ABOUT IN THE INTRODUCTION. SCIENTIFICALLY THAT’S ACTUALLY THE EASIEST PART. THE STUDY THEY DO INTO AGING IS MIND BOGGLING, EVERY CELL, HOW DOES MOTION WORK, AGE, HOW TIME DO TO YOU, EVERYTHING. IT’S MIND BOGGLING, BUT WHEN YOU GET ALL THAT RIGHT, THAT’S JUST 10% OF THE WORK. THE OTHER 90% YOU JUST SCRATCH YOUR HEAD. WHAT’S THAT? GOD CREATED WORLD. IT’S NEARLY A CRAP SHOOT. THAT’S THE HARDEST PART, HOW YOU PLAY TO TAKE THAT ALONG TO PLAY IN SUCH MEDIA AND MAKE BELIEVE. THAT’S A NEW WORLD AND ALSO AN OLD WORLD YOU TRY TO REINSURE. >>SO LIKE YOU’RE SAY IS BEING, WHAT WE SEE ON SCREEN, JUNIOR IS PURELY A DIGITAL CREATION, BUT, WILL, YOU WERE ON SET WEARING THE DOTS, WEARING THE RIGS. YOU HAD TO PLAY YOURSELF. WHAT WAS THAT LIKE? >>IT’S REALLY A DIFFICULT UNDERTAKING TO TRY TO PLAY NAIVETE BECAUSE IT’S LIKE ONCE YOU KNOW SOMETHING IT SITS IN YOUR BODY. IT’S LIKE ONCE YOU HAVE SEX, RIGHT, YOU JUST WALK DIFFERENT, YOU KNOW? YOU GOT A DIFFERENT SWAGGER, YOU KNOW, BUT LIKE TO GO BACK TO THE MIND SET MINDSET AND TRY TO REMEMBER WHAT WERE YOU FEELING, WHAT WERE THE EMOTIONS BEFORE, RIGHT, IT’S A DIFFICULT UNDERTAKING AS AN ACTOR TO TAKE KNOWLEDGE AWAY. YOU CAN ALWAYS TAKE NEW THINGS IN. YOU WANT TO PLAY A DOCTOR, SO YOU PUT NEW THINGS IN AND LEARN HOW DOCTORS MOVE AND THINK, BUT TO GO BACK TO PLAY YOUTH WAS A VERY DIFFICULT UNDERTAKING FOR ME. >>HOW MUCH OF THAT WAS MEMORY AND HOW MUCH OF IT — BECAUSE OBVIOUSLY THERE’S AN INCREDIBLE AMOUNT OF FOOTAGE OF YOU IN YOUR TEENS AND 20s. >>RIGHT. >>DID YOU HAVE TO WATCH A LOT OF THAT TO TRY TO DO THIS? >>WHAT WAS GREAT THAT ANG DID IS HE ESSENTIALLY LOOKED THROUGH MY ENTIRE FILMOGRAPHY AND HE CREATED TAKES OF THINGS. HAD HE SIX DEGREES OF SEPARATION AND THE FIRST BAD BOYS, FRESH PRINCE OF BEL-AIR, MEN IN BLACK, INDEPENDENCE DAY AND HE WENT THROUGH AND GRABBED THESE THINGS AND SAT ME DOWN AND I’M LIKE OH, THIS IS GREAT. THIS DUDE’S A REAL FAN AND HE’S LOOKING AND HE WAS LIKE THIS IS VERY GOOD. NOTICE HOW YOUR EYES COMMUNICATE THE SIMPLE ESSENCE OF INNOCENCE. I’M LIKE YEAH, YEAH. YOU KNOW, THAT’S WHAT I WAS DOING BACK THEN, MAN. AND THEN HE WENT OVER TO THE NEXT ONE. HE SAYS THIS IS VERY, VERY BAD. DON’T DO THIS IN MY MOVIE. I WAS LIKE, YOU KNOW, HE WENT THROUGH ALL OF THE FILMS, BUT WHAT WE WERE ABLE TO DO IS WE WERE ABLE TO CREATE A DIALOGUE. WE ACTUALLY SORT OF CREATED A LANGUAGE AND IN THAT PROCESS I SAW THE DEPTH OF WHAT HE WAS TRYING TO DO, RIGHT, TO TRY TO MAKE A DIGITAL CHARACTER COMMUNICATE A BRIEF MOMENT OF UNCERTAINTY, BUT TO DO IT WITH BINARY CODE LIKE TO BE ABLE TO TRY TO CREATE SOMETHING THAT TO HAVE A COMPUTER CAPTURE THAT ESSENCE, IT WAS A POWERFUL UNDERTAKING. >>SO ONCE WILL HAD DONE HIS WORK ON THE SET YOU GUYS I THINK YOU SAID IT WAS BASICALLY A TWO-YEAR PROCESS WITH THE DIGITAL AND THEY TOOK WHAT YOU DID AND THEY BUILT JUNIOR. TALK A LITTLE BIT MORE ABOUT WHAT THAT PROCESS OF WORKING WITH THIS WAS LIKE. IT’S SORT OF UNPRECEDENTED. WHAT WERE THE BIG CHALLENGES? >>TWO YEARS, ONE YEAR IS IN PREP AND SHOOTING AND THE OTHER ONE YEAR IS POST. YOU WANT TO BE A GOOD CITIZEN WHILE YOU PLAN IT. IF YOU SAY I DON’T FEEL LIKE DOING IT. I WANT TO KILL HIM BECAUSE WE’RE PLANNING A LONG TIME. SO WE’RE GUESSING, EDUCATED GUESS, THAT IS, VERY GOOD GUESS AND WE DO MOCK-UPS, TRIED THIS, TRIED THAT. WE DO A LOT OF TESTS. WE DID OUR SIGNS OF THEN WE DEVELOPED METHODOLOGY ON THE SHOOTING DAY WHICH IS PRECIOUS MOST EXPENSIVE TIME AND THEN WE CAPTURE IT LAYER BY LAYER OUT OF THE CLUMSY 3D CAMERAS AND A LOT OF TECHNICIANS. THREE ROOMS OF TECHNICIANS. THEY ALL LOOK BUSY. I DON’T KNOW WHAT THEY’RE DOING. IT’S VERY INCONVENIENT. A GOT THING HE’S GOT A GOOD WORK ETHIC. YOU’VE GOT 500 ARTISTS IN NEW ZEALAND TO TRY TO MAKE IT WORK. SOME SHOTS WILL TAKE LIKE A YEAR TO REALIZE. IT TAKES MONTHS FOR ME TO TRY TO FIGURE OUT. WHY YOU WOULD WANT TO BELIEVE THAT A YOUNG WILL SMITH IS DOING THAT CHARACTER AND THAT IS TO BE STUDIED BY THIS. HOW DOES THAT FEEL, THE FLOW OF THE STORY? I THINK IT’S REALLY SURPRISING. TO MAKE HIM LOOK ALIVE IS NOT THE HARDEST THING. IMAGINING HIM BEING A BETTER ACTOR DOING THOSE THINGS TO LOOK LIKE SOMETHING IN THE TEXTURE AND THE LIGHTING AND ANGLED, ANGLES, YOU JUST COULDN’T FIGURE OUT. YOU JUST KEPT TRYING AND TRYING AND TRYING. SOMETIMES YOU FIND LITTLE TRICKS AND ALSO I THINK ON TOP OF THAT, WHY HE DO THIS SO LONG? HIS CHARM. WHY HE LOVE HIM? YOU PLAY A TERMINATOR TYPE OF GUY AND YOU STILL WANT TO FEED HIM CHICKEN SOUP? WHAT IS THAT SECRET? IS THAT THE CORNER OF HIS EYES, RAISE HIS EYEBROW? YOU JUST KEEP TRYING. THE DIFFERENCE BETWEEN PEOPLE ARE MUMP LARGER THAN 2D. SO THEN YOU HAVE ME SAYING ONE THING, THE SUPERVISOR SAYING ANOTHER, THE EDITOR. THE FIVE PEOPLE, THEY ALL TELL. IT’S VERY DIFFICULT, BUT IT’S ALSO A PRIVILEGE THEY GET TO FIGURE THAT OUT. >>YEAH. THE THING THAT WAS REALLY FOR ME — OH OH. YOU ALL RIGHT, BUDDY? HE FELL. YOU GOOD? ALL RIGHT. SECURITY. NO. THE FIRST THING IS IT’S 120 FRAME AND 3D. SO IT’S SO SHARP AND YOU’RE SO CLOSE AND IT’S SO CLEAR THAT THE ACTORS COULDN’T WEAR MAKEUP. THAT’S HOW CLOSE THE CAMERA COULD DETECT MAKEUP AND IT WOULD LEAVE A FILM, YOU KNOW, OVER THE SKIN AND ANG WAS LIKE YOU DON’T BELIEVE IT. SO YOU GET, YOU KNOW, RAW. IT’S WIDE OPEN AND WHAT ANG KEPT TALKING ABOUT THAT I LOVED IS TO GIVE PEOPLE A REASON TO GO TO A MOVIE THEATER WHERE YOU CAN SEE SOMETHING AND EXPERIENCE SOMETHING THAT’S DIFFERENT THAN YOU CAN ON YOUR BIG SCREEN TELEVISION AT HOME AND THE REVITALIZING AND THE ELEVATING OF THE CINEMA GOING EXPERIENCE AND ANG WAS SAYING PEOPLE CALLING IT HIGH FRAME RATE AND HE’S LIKE NO. I LIKE TO REFER TO EVERYTHING ELSE IN THE CINEMA AS LOW FRAME RATE AND, YOU KNOW THAT, IDEA TO TRY TO REALLY CAPTURE AND TO BE AT THE FOREFRONT OF A NEW WAY THAT PEOPLE WATCH AND CONSUME FILMS. >>YOU SEE THROUGH PEOPLE. THAT’S THE BEAUTY OF IT. I THINK CLOSEUP SUPPORT BEST THING OF THIS MEDIA. THEIR PERFORMANCE HAS TO BE ADJUSTED. THE WAY THEY PREPARE A CHARACTER AND LEAVING A MOMENT HAS TO BE REALLY JUDGED. I DO BELIEVE AS HARSH AS IT SOUNDS, SEEMS TO BE PUNISHING EVERY REAL HIGH FRAME RATE, SHARPNESS AND ALL THAT, AT THE SAME TIME YOU HAVE MORE TO WORK WITH. IT’S A DOUBLE EDGED SWORD. AT THE SAME TIME IT’S INTIMIDATING. ON THE OTHER HAND, YOU HAVE SO MUCH MORE TO GAIN. YOU CAN WORK ON THE THINGS. IT JUST GOT BLURRED OUT BEFORE. SO AS LONG AS YOU BE CAREFUL, IT’S VERY EXCITING ACTUALLY, CARB, BUT IT’S VERY EXCITING. >>I DO WANT TO TALK A LITTLE BIT ABOUT WHAT AT LEAST FOR NOW WE’RE TALLING HIGH FRAME RATE AND 3D BECAUSE I THINK THERE’S — >>I DON’T REALLY WANT TO SAY THAT. >>HE SAID IT ANYWAY. STROKE FREE. >>STROKE FREE. >>RIGHT. I THINK THERE’S BEEN WITH SOME OF THE INITIAL FILMS LIKE THE HOBBIT AND WITH BILLY LYNN WHICH YOU MADE BEFORE THIS I THINK THERE’S BEEN A LITTLE BIT OF SKEPTICISM. SOME PEOPLE SAID HEY, THIS DOESN’T LOOK LIKE A MOVIE. THIS LOOKS LIKE A SOAP OPERA. I DON’T KNOW WHAT THIS IS, BUT IT DOESN’T LOOK LIKE A MOVIE. WHY DO YOU THINK THERE’S A DISCONNECT WITH PEOPLE WITH ALL THE ARTISTIC POSSIBILITIES SAY I DON’T LIKE THE WAY IT LOOKS? >>I HATE TO SAY THIS. WE HAVE A NEW MEDIA. WE DON’T KNOW WHAT TO DO WITH IT. WE’RE NOT GOOD AT IT. THAT’S ALL. SOMEDAY IT WILL BE GOOD AND PEOPLE WILL ENJOY IT. IT WILL CREATE A DIFFERENT FORMAT OF OUR ART. IT’S DEFINITELY A DIFFERENT ART FORMAT, BUT WHAT WE KNOW IS FILM. THAT’S ALL WE KNOW. SO WE’RE IMITATING SOMETHING 40 YEARS AGO. I THINK THAT’S THE PROGRAM. >>PART OF WHAT YOU’RE DOING IS FIGURING IT OUT. >>AND ALSO THE CONVERSATION IT DID FOR LOWER GRAIN RATE OR THE GRAININESS OF FILM THAT ASSOCIATED WITH A LOT OF ARTISTIC APPROACH OR EVEN NEGOTIATION. THAT CREATES THE MOST TREMENDOUS OUTREACH EXPERIENCE, MOVIES WITH A LOT OF MOVIE LENS. SO THAT’S THE PART, NOT THE MEDIA. IT’S THE ARTISTIC ENDEAVOR IN DEALING WITH OUR MEDIA, THE STORY YOU TELL, THE BEAUTY. THAT’S FANTASTIC, BUT NOW YOU’RE HAVING DIFFERENT MEDIA. IF YOU DO THE SAME THING, OF COURSE, IT DOESN’T LOOK AS GOOD. YOU HAVE TO FIND THE THING THAT BELONGS TO THIS MEDIA WHICH I THINK INVOLVES IN MORE LIFELIKE KIND OF BEAUTY. WHY WE LOOK AT SOMETHING AND SAY THAT’S BEAUTIFUL, WHY IT’S NOT, WE HAVE TO GET TO THE BOTTOM OF IT AND FIND THE BEAUTY THAT BELONGS TO DIGITAL CINEMA. MAYBE IT’S DIMENSION, THE CONTRAST, MAYBE MORE LIFELIKE. I FOUND SOME OF THE SHOTS I DO IN 3D IT’S A LOT MORE BEAUTIFUL IN 2D. IT’S LIKE THERE’S NO WAY YOU CAN FILM WATER, YOU CAN DO SHOTS IN WATER, THERE’S NO WAY YOU CAN DO THAT CLOSE UP UNLESS YOU HAVE CLARITY, DIMENSION. THAT’S WHAT EYES DO IN REAL LIFE, BUT WHEN YOU’RE THAT CLOSE TO LIGHT, HOW CAN YOU CREATE ART? CAN YOU DREAM WITH CLARITY? STOP REALLY EXISTENTIAL QUESTIONS. GIVE US SOME TIME. WE’LL GET THERE. I BELIEVE THIS IS A NEW MEDIA WORTH GRABBING AND THAT’S DIGITAL. IT’S NOT TECHNOLOGY. TECHNOLOGY IS A TOOL LIKE, YOU KNOW, 100,000 YEARS AGO THERE’S NO SUV SUCH TECHNOLOGY AS OIL PAINTING OR WATERCOLOR OR EVEN LANGUAGE IN YOU GO BACK. SO GIVE US A CHANCE TO LEARN HOW TO DO IT, HOW TO ACT IN IT, HOW TO MAKE IT LOOK PRETTY, HOW TO TELL STORIES, HOW WE MAKE BELIEVE, HOW WE DO ART DEPARTMENT, HOW WE EVEN PULL IN FOCUS WHICH IS IMPOSSIBLE. YOU GO IN. WHEN WILL IS ABOUT TO DO SOMETHING, HE HAS A BIGGER FILMOGRAPHY THAN I DO AND HE KNOWS AHEAD OF TIME WHY HE’S TAGGING ALL THE DIGITAL DATA ALONG WITH HIM WHILE HE’S ONE SECOND BEHIND WE HAVE TO BE HALF A SECOND AHEAD OF WHAT HE’S ABOUT TO DO AND EVERY EYES GO TO DIFFERENT PLACES. PULLING FOCUS, IT’S IMPOSSIBLE AND YOU CAN SEE IT. HOW DID HE DO THAT? WHAT KIND OF A TECHNOLOGY WE NEED TO DEVELOP TO ACCOMMODATE THIS KIND OF ARTISTIC ENDEAVOR? IT’S A HUGE QUESTION. SO GIVE US SOME TIME TO FIGURE IT OUT. >>ACTUALLY GIVE US TILL OCTOBER 11th WHEN GEMINI MAN COMES OUT. MAKE SURE YOU GO SEE THAT. >>THAT’S RIGHT. SO CHANGING SUBJECTS SLIGHTLY, WILL, LAST YEAR YOU LAUNCHED WITH KISUKI HONDA WHICH VC FIRM CALLED DREAMERS VC. YOU ARE NOW A VENTURE CAPITALIST. YOU ARE NOW A STARTUP INVESTOR. WHY DID YOU WANT TO DO THAT? >>I MET WITH CASE K AND WE HIT IT OFF IMMEDIATELY AND WE FELT LIKE THERE WAS A BEAUTIFUL INTERSECTION BETWEEN BEING ABLE TO CREATE BUSINESSES, BUT ALSO TO STAY FOCUSED ON SOLVING PROBLEMS OF THE WORLD. SO WE SORT OF — OUR RELATIONSHIP STARTED TO DEVELOP AND THEN WE SAID KISKUI HAD A FEW BANKING RELATIONSHIPS IN JAPAN THAT WERE LOOKING TO MAKE THEIR WAY INTO THE UNITED STATES. SO THE RELATIONSHIP WORKED OUT WELL AND I HAD ALREADY BEEN INVESTING AND HE HAD ALREADY BEEN INVESTING AND OUR VALUES WERE IN ALIGNMENT. SO WE CAME TOGETHER AND A LOT OF PEOPLE THAT FELT THE INITIAL IDEAS JUMPED IN. JUST WATER WAS ONE OF COMPANIES THAT WE STARTED. WE INVESTED IN BORING TECH. SO, YOU KNOW, WE WANT TO SOLVE SOME OF THE WORLD’S PROBLEMS. WE WANT TO DO WELL BY DOING GOOD. >>SO OUTSIDE OF MOVIES WHAT ARE — YOU MENTIONED A COUPLE COMPANIES AND THEY’RE VERY DIFFERENT. WHAT ARE LIKE THE KINDS OF TECHNOLOGIES THAT YOU’RE EXCITED ABOUT? >>YOU KNOW, ACTUALLY WE’RE HERE AT TECH CRUNCH, WE SHOULD PROBABLY SEE WHAT’S GOING ON IN THIS SPACE, YOU KNOW. I’M WIDE OPEN. >>ALL RIGHT. >>I’M WIDE OPEN. >>THAT’S MY CUE BECAUSE WE TOLD WILL THAT THIS IS A STARTUP CONFERENCE. HE IS A STARTUP INVESTOR. HE WANTED TO MEET SOME OF THE STARTUPS. WE COULDN’T DO THE COMIC-CON THING OF PUTTING A MASK ON YOU AND HAVING YOU WALK AROUND. WE’RE GOING TO BRING SOME STARTUPS ONTO THE STAGE. THESE ARE STARTUPS FROM THE STARTUP ALLEY. WE’RE GOING TO GET 40 SECONDS TO PRESENT. SO IT’S GOING TO BE EXTREMELY TIME INTENSIVE. I’M GOING TO CUT THEM OFF. THEY FOUND OUT LIKE TWO OR THREE HOURS AGO. >>OH, WOW. IN MOVIES WE CALL THAT THE ELEVATOR PITCH. IN HUMAN I HAVES MOVIES CAN YOU MAKE THE ELEVATOR PITCH? >>LET’S BRING OUT OUR STARTUPS FOR THE ELEVATOR PITCH. >>I LOVE. THAT OKAY. >>ARE THEY HERE? THERE THEY WERE. >>HOW YOU GUYS DOING? HEY. >>WE ARE GOING TO START WITH AIR B. PRESENTING FOR AB IS CHRISTIAN RAMEY. >>WHAT’S UP, MAN? >>ALL RIGHT. >>ARE YOU NERVOUS? >>VERY NERVOUS. >>VERY NERVOUS. DON’T WORRY ABOUT IT. THIS IS ONLY AN OPPORTUNITY OF A LIFE TIME AND EVERYTHING RIDES ON THIS. SO JUST RELAX INTO THAT. RELAX INTO THAT. >>ALL RIGHT. >>THERE’S JORDAN. WHERE YOU TAKING HIM, JORDAN? OVER THERE. OKAY. SO THAT’S THE MARK. ALL RIGHT, ALL RIGHT. LOOSEN UP. YOU’RE GOING TO LIVE OR DIE ON THIS MOMENT. GO FOR IT. >>40 SECONDS. >>I’M CHRIS FROM AIR B. CITIES CONGESTED WITH TRAFFIC JAMS AND THE LAST MILE IS ALWAYS THE LEAST EFFICIENT PART OF A JOURNEY. MEANWHILE PEOPLE HAVE BICYCLES SITTING AT HOME THAT ARE UNDERUSED. AT AIR B WE WANT TO PROMOTE BIKE SHARES AS A MEANS OF TRANSPORTATION WHILE GENERATING REVENUES FOR THE BIKE OWNERS. WE HAVE DEVELOPED A SMART BIKE LOOK WITH A GPS THAT CAN BE INSTALLED ON ANY BIKE SO THAT ANYONE CAN START A BIKE SHARING FLEET IN JUST A FEW MINUTES. YOU CAN INSTALL IT ON YOUR BIKE AND START TO MAKE MONEY BY SHARING IT AND WE JUST TAKE A SMALL FEE. THANK YOU. >>WILL, YOU GOT QUESTIONS? >>SO IT’S SIMILAR TO LIKE THE UBER VIBES OF BIKES? HOW IS IT DIFFERENT FROM — WHAT DO YOU THINK YOU’RE IMPROVING ON? >>WE DON’T PROVIDE THE BIKES. WE USE BIKES OF PRIVATE PEOPLE AND THEY MAKE MONEY WITH IT AND WE SHARE IN THE FEE. >>I LIKE THAT. ANTHONY, DO YOU HAVE ANYTHING? >>NO. I’M GOOD. THE NEXT COMPANY COMING UP IS BITTER CONSTRUCTION APP. PRESENTING IT CODY SHEEHAN. >>CODY, WHAT’S UP, CODY? >>HOW YOU GUYS DOING? >>I’M GOOD. YOU NERVOUS? YOU GOT TO TALK IN THE MICROPHONE, CODY. SO LISTEN. THIS IS GOOD. YOU’RE VERY HANDSOME, CODY. SO IT’S ALREADY WORKING FOR YOU. I HEARD SOMEBODY WHEN YOU WALKED OUT, SOMEBODY WENT WOO. SO YOU’RE ALREADY IN A GOOD PLACE. SO YOU SHOULD SELL YOUR HANDSOMENESS ALONG WITH YOUR PRODUCT, OKAY? >>SOUNDS GOOD. >>YOU GOT IT? ALL RIGHT. GO. >>HI, GUYS. I’M CODY WITH BITTER. BITTER CONNECTS LATINO CONSTRUCTION WORKERS WITH JOBS IN THE U.S. OUR MISSION IS TO EMPOWER LATINO COMMUNITIES AND BRING EFFICIENCY BACK TO THE $1.3 TRILLION INDUSTRY. IN 2019 ALONE WE PROJECT OVER 1 MILLION NEW IMMIGRANTS ENTERING THE COUNTRY AND AT THE SAME TIME THERE’S A 79% MASS LABOR SHORTAGE. CURRENTLY OUR APP SERVES 40- BASED CONSTRUCTION CREWS. THIS UNDERSERVED WORKFORCE IS MISSING THE TECHNOLOGY TO HELP THEM CONNECT WITH HOMEOWNERS. >>YOU’RE OUT OF TIME. >>WILL? >>HOLD ON. ALL RIGHT. SO I LIKE THAT IDEA. TRYING TO SOLVE THE PROBLEM. THE APP IS ALREADY UP AND RUNNING. >>IT IS. >>WHAT CITIES? WHAT STATES? >>RIGHT NOW WE’RE FOCUSING ON HOUSTON, DALLAS, SAN FRANCISCO AND SAN DIEGO. >>. >>HOW DOES THAT FUNCTION? >>CURRENTLY WE’RE IN A REALLY LARGE SWING ONE DIRECTION AND I BELIEVE IN THE NEXT YEAR OR TWO WE’LL BE PUSHING IN THE OPPOSITE DIRECTION. THIS IS THE TIME WHEN BIDDER CAN CAPITALIZE ON THAT SWING OR THAT MOMENTUM. >>HOW ARE YOU INTERFACING THE COMPANY WITH THE WORKERS? >>SO WE’RE A TWO-SIDED MARKETPLACE WHERE WE HAVE AN APP WHICH IS ALSO IN ENGLISH AND SPANISH FOR THE WORKERS AND THEN WE HAVE THE APP WHICH IS THE HOMEOWNER USER INTERFACE. >>GOT IT. SO IT’S THE HOMEOWNER. SO IT’S NOT LIKE — >>IT COULD ALSO BE LARGER CONSTRUCTION JOBS. WE’RE KIND OF SMALL TO MID-SIZE JOBS. >>SO WHAT’S THE MAJORITY RIGHT NOW? MAJORITY IS HOMEOWNER TO WORKER? >>YEAH. THE MAJORITY WOULD BE THAT WAY. >>ALL RIGHT. HOW DO YOU MONITOR HOW THE JOBS WENT, HOW IT WENT WITH THE PEOPLE? HOW ARE YOU — >>SO AS THE JOBS GET CALLED INTO OUR SYSTEM, WE INPUT THEM INTO THE DATABASE AND THE CONSTRUCTION WORKERS IN LIVE TIME CAN VIEW THE NEW JOBS AND PLACE BIDS. >>WHAT IS GOING ON? >>WHAT IS HAPPENING? >>DID YOU KNOW THAT 75% OF PEOPLE CHECK OUT YOUR COMPANY’S SOCIAL MEDIA CHANNELS BEFORE EVEN POP APPLYING FOR A POSITION? WHAT IS THAT? IN ORDER TO ATTRACT THE BEST TALENT AND ENGAGE THE BEST EMPLOYEES, COMPANIES NEED TO SHOWCASE THEIR CULTURE. AT AN AFFORDABLE MONTHLY CONTRACT, SO SHE AND I DON’T MATCHES COMPANIES WITH FREELANCE EMPLOYER PLANTINGS THAT CREATE CONTACT SHOWCASING COMPANY CULTURE, WORK WAS ENVIRONMENT AND DIVERSITY. WITH OVER 250 FREELANCE EMPLOYER BRAND TEAMS ON OUR PLATFORM, SO SHE WILL NOT A WANTS TO TELL THE COAT MEETINGS BEHIND THE CULTURE THAT MAKES COMPANIES GREAT. WE ARE EXCITED ABOUT THIS $10,000,000.08 HIGH-TECH INDUSTRY. THANKS. >>RIGHT ON TIME, NICE.>>OKAY, I AM IN, I AM IN. SO YEAH, AS YOU CAN IMAGINE, THAT IS SOMETHING THAT IS REALLY CLOSE. AS I BUILD OUT MY SOCIAL MEDIA TEAM, THAT WAS THE IDEA THAT I WANTED TO TAKE BACK MY STORYTELLING FROM THE DAILY MAIL. SO I WANTED TO TAKE BACK MY STORYTELLING AND I THINK THAT IS HUGELY IMPORTANT. SO HOW IS IT WORKING BETWEEN HOW YOU INTERFACE THE COMPANY WITH PICKING THE PERSON THAT THEY ARE GOING TO USE? >>SO OBVIOUSLY, A LOT OF COMPANIES CARE ABOUT SOCIAL MEDIA FOR THEIR PRODUCTS. FORGET THE HR TEAM FORGETS ABOUT THE ACTUAL CULTURE AND PEOPLE THAT ARE USED TO ATTRACT TALENT. WE CUSTOMIZE AND MANAGE A TEAM. THE TEAM CREATES A CREATIVE DIRECTOR, A PRODUCT MANAGER AND THEN VIDEOGRAPHER, PHOTOGRAPHER AND THEY INTEGRATE WITH THE HR TEAM TO CREATE EMPLOYEE TESTIMONIALS, COMPANY ANNOUNCEMENTS, NEW THINGS THAT ARE HAPPENING WITH THE COMPANY. SOME COMPANIES EVEN LIKE NETFLIX, THEY HAVE A WHOLE SEPARATE CHANNEL SHOWCASING THEIR ENTIRE EMPLOYEE BRAND. WE WANT TO BRING THAT TO ENTERPRISES I DO NOT TYPICALLY USE CONTENT TO ATTRACT AND MAINTAIN EMPLOYEES AND THINGS OF THAT NATURE. >>THAT IS WILDLY WILDLY EXPENSIVE. I KNOW THAT FIRSTHAND. HOW ARE YOU CUTTING DOWN COST? >>IT IS EXPENSIVE. WE ARE TARGETING THEORIES BE FUNDED COMPANIES AND LARGER ENTERPRISES, BUT WE ARE STILL MORE AFFORDABLE THAN A CREATIVE AGENCY THAT IS GOING TO BRING THEM OVER THE HEAD WITH A. THAT IS WHY WE HAVE THESE FEELINGS EMPLOYER BRAND TEAMS AND OUR FREELANCERS THAT ARE PART OF THESE TEAMS, THEY HAD EXPERIENCE WORKING WITH LARGE COMPANIES AND ENTERPRISES. SO EVEN THOUGH OUR PRICES ARE SO EXPENSIVE, IT IS A BETTER OPTION THAN SAY SOME OF THE OTHER OPTIONS WITH THE LARGER CREATIVE AGENCIES THAT MIGHT WANT TO BE INVOLVED IN CREATING CONTENT SHOWCASING THEIR WORKPLACE ENVIRONMENT. >>THANKS. THAT IS VERY GOOD.>> SOCIONADO, THAT WAS VERY GOOD. >>WE HAVE ONE MORE ONE MORE AND I AM TAKING A LOT OF TIME. >>HOW ARE YOU FEELING? WELCOME. >>THIS IS MINUTE, PREVENTING SERGEY. HELLO EVERYONE. HOW IS YOUR MOOD TODAY?>>SPECTACULAR. >>I AM THE COFOUNDER AND CEO OF MOOD BIT. WE ARE AN ANALYTICS COMPANY FOCUSED ON EMPLOYEE SENTIMENTS TO IMPROVE ENGAGEMENT AND RETENTION. COMPANIES IN THE U.S. ARE LOSING MORE THAN $600 BILLION EVERY YEAR BECAUSE OF THIS ENGAGEMENT AND TURNOVER. WE INTEGRATE OUR AI PLATFORM TO COMMUNICATION PLATFORMS LIKE GMAIL OR MICROSOFT PLATFORMS. WE CAN UNDERSTAND THERE ARE SENTIMENTS AND MANAGERS CAN HAVE REAL-TIME SCORES AT THE SENTIMENTS AND THEY DO NOT HAVE TO WAIT FOR THE RESULTS OF SURVEYS ONCE OR TWICE A YEAR. ON TOP OF THAT, HE ANALYTICS IS NOT ENOUGH. WE ARE PROVIDING THE MANAGERS WITH ACTION PLANS SO THEY CAN HAVE HAPPIER EMPLOYEES.>> GREAT. >>I AM TRYING TO BE THE BAD YOU CAN BE THE TOP.>>THANK YOU VERY MUCH. WE HAVE A RED 000. I WILL SPEAK TO YOU BACKSTAGE. THANK YOU VERY MUCH.>>THAT IS A 000 FOR THE 40 SECONDS. >>OKAY, BECAUSE IT WAS WHITE AND THEN IT TURNED RED. >>OR THEY DID NOT TELL ME SOMETHING. WE ARE GOOD. >>SO YOU ARE THE CEO? HOW MAY PEOPLE ARE YOU WORKING WITH TWO >>WE ARE SEVEN PEOPLE.>>SO WHAT HAVE YOU DONE SO FAR IN TERMS OF WORKING IN THE WORKPLACE?>>WE CREATED A CONCEPT. WE CREATE THE PRODUCT AND LAUNCH IT. RIGHT NOW, WE ARE WORKING WITH ENTERPRISES. WE HAVE A PARTNERSHIP WITH ERNEST AND YOUNG. >>ALL RIGHT. I AM SORRY, I GOT DISTRACTED. I AM VERY SORRY. I WILL SPEAK TO YOU BACKSTAGE. I AM SORRY I GOT DISTRACTED. >>GIVE IT UP FOR A MOVE THAT.>>I DO NOT WANT TO PUT YOU ON THE SPOT. NOW SEEING THESE FOUR PAGES, A COMFORTABLE SAYING IS THERE A FAVOR YOU WOULD LIKE TO BRING UP HERE FOR IS HEALTHY?>>I THINK KOFI DID THE MOST BEAUTIFUL AND MOST AGGRESSIVE.>>COME ON UP, COME ON UP.>>I THINK ALSO, YOU KNOW, THAT WAS THE BEST PITCH. WE ARE GOING TO ROCK IS HEALTHY. THIS IS HEALTHY, I WANT TO LET YOU USE FOR PROMOTION BECAUSE I AM GOING TO INVEST 10 GRAND IN YOUR BUSINESS.>>THERE YOU GO.>>MAKING SOME NEWS.>>ALL RIGHT, YEAH.>>I LIKE THAT, GREAT ENERGY, I LOVE THAT. THANK YOU ALL, THANK YOU VERY MUCH.>>BIG ROUND OF APPLAUSE FOR OUR STARTUPS PLEASE. GREAT WORK STARTUPS. GREAT JOB, YOU GUYS CAN GO AHEAD AND EXIT. THE JOB. >>WILL SMITH, WE ARE GETTING THE HOOK. LET’S GO. >>THANK YOU GUYS VERY MUCH. THANK YOU THANK YOU.>>THANK YOU. THANK YOU VERY MUCH. THANK YOU SO MUCH.>>THAT IS MY GIRL, THAT IS MY GIRL. I FEEL YOU, I FEEL YOU. >>I REALLY LIKE YOU AS WELL.>> YOU ARE COOL, YOU ARE GOAL.>>OKAY, HE JUST CALLED ME HIS GIRL, SO I DIE. OKAY, WE HAVE GOT TO KEEP THINGS MOVING BECAUSE I WENT WAY OVER TIME. WITHOUT ANY FURTHER ADO, I WOULD LIKE YOU TO PLEASE GIVE A WARM WARM WELCOME TO OUR NEXT GUEST. GENERAL PARTNER CHRIS DIXON AND YOUR MODERATOR, JOSH CONSTANTINE. LET’S GO.>>I WANTED TO START THIS PANEL WITH A CRYPTO CURRENCY JOKE. HERE IT IS. LIKE COIN. ONLY A FEW PEOPLE GOT THAT. IN HONOR OF OUR PREVIOUS GUEST, I WANTED TO MAKE ONE WILL SMITH JOKE. WHAT DOES WILL SMITH SAY WHEN HE ASKED FOR BIT COIN, BUT SOMEBODY PAYS HIM IN DOLLARS? OH NO, YOU DID NOT SHOOT THAT GREEN STUFF AT ME. OKAY, SO LESS OF A LAUGHING MATTER IS LIBRA, FACEBOOK’S CRYPTO CURRENCY THAT SOME PEOPLE ARE WORRIED IS GOING TO CRATER THE WORLD’S FINANCIAL SYSTEM AND THE FRENCH FINANCE MINISTER SAID WE CANNOT AUTHORIZE DEVELOPMENT OF LIBRA ON EUROPEAN SOIL, BUT YOU ARE A LIBRA ASSOCIATION MEMBER. SO DO YOU THINK THAT LIBRA IS ACTUALLY GOING TO LODGE IN THE NEXT YEAR OR TWO?>>YES, I DO. MAY BE STEPPING BACK, I SAY WE ARE VERY EXCITED ABOUT CRYPTO CURRENCY AND THE WAY WE VIEW IT IS IN THE CONTEXT OF THE HISTORY OF COMPUTING, SO IF YOU GO BACK TO THE HISTORY OF COMPUTING, EVERY 15 YEARS IS A NEW MAJOR COMPUTING CYCLE. MAINFRAME COMPUTERS, PCS, THE INTERNET, SMART PHONES. WE ARE IN A PERIOD NOW WHERE A WHOLE BUNCH OF INTERESTING NEW COMPUTING THAT FORMS ARE GETTING BILLED. FOR EXAMPLE, VIRTUAL REALITY, SELF DRIVING CARS, A BUNCH OF STUFF AND AI IS VERY EXCITING AND WE THINK BLOCK JAMS ALSO. ANY TYPE OF COMPUTING SYSTEM THAT HAS A LOT OF INTERESTING POSSIBILITIES. WHEN YOU CREATE A BLOCK, DIFFERENT POSSIBLE APPLICATIONS, PEOPLE HAVE PROBABLY HEARD OF THAT COIN, THEY MAKE THOSE BLOCK CHAINS MAKE CERTAIN TECHNICAL TRADE-OFFS THAT MAKE THEM GOOD FOR SOME APPLICATIONS AND NOT FOR OTHER APPLICATIONS. WHAT LIBRA IS DOING, WHICH WE ARE EXCITED ABOUT IS THEY ARE DESIGNING A BLOCK FROM SCRATCH THAT IS BUILT TO OPTIMIZE PAYMENTS. AND WHAT DOES THAT MEAN? IT MEANS YOU NEED FOR EXAMPLE THE STABILITY OF THE CURRENCY, SO CURRENCY THAT, YOU KNOW, IS DENOMINATED IN SOMETHING LIKE DAUGHTERS. THEY ACTUALLY GET THE DOLLARS AND ALSO SOMETHING THAT HAS VERY HIGH FRUIT FOOT. AND WE THINK THEY HAVE DONE A GOOD JOB ON THE DESIGN OF THAT. THERE ARE ALL SORTS OF REGULATORY AND OTHER QUESTIONS. >>DO YOU THINK IT IS GOING TO LUNCH IN THE NEXT YEAR? >>I DO I DO, YEAH I THINK I DON’T KNOW IF IT WILL HAVE CHANGES MADE, IT IS GOING TO BE A DIALOGUE WITH REGULATORS AND PARTNERS AND VARIOUS OTHER STAKEHOLDERS. THAT IS EXACTLY WHAT THE DESIGN WILL BE. BUT LOOK, THIS IS, CRYPTO IN THE GLOBAL OF MITT. CHINA HAS SAID THAT BLOCK CHAIN IS A NATIONAL PRIORITY. IT IS HAPPENING, ALL OF THESE KINDS OF PROJECTS ARE HAPPENING ALL OVER THE WORLD. THE BENEFIT COULD BE IMMENSE. FOR EXAMPLE, THERE IS SOMETHING LIKE 2 BILLION PEOPLE WHO HAVE SMART PHONES TODAY, BUT DO NOT HAVE ACCESS TO THE MODERN BANKING SYSTEM, AS AN EXAMPLE. MANY OF THOSE PEOPLE WHAT’S UP. SO TO PROVIDE A PAYMENT SYSTEM, SORRY, I THINK I FOUND IS GOING OUT, TO PROVIDE A PAYMENT SYSTEM AND INCLUDE THOSE PEOPLE IN THE FINANCIAL SYSTEM WHILE ALSO PROVIDING A WAY FOR SOFTWARE DEVELOPERS AND ENTREPRENEURS TO BUILD APPLICATIONS ON TOP AND SERVE THOSE PEOPLE, IT IS A POWERFUL IDEA. IT IS EXCITING TO HAVE A COMPANY THE SIZE OF FACEBOOK SUPPORTING THAT. I HOPE THAT IT IS THE BEGINNING OF A PROCESS WHERE MORE LARGE TECH COMPANIES GET INTO THE SPACE. TO ME, AND I YOU ARE A FAN OF VR, LIKE I AM, FACEBOOK IS DOING A LOT OF INVESTMENT. I WOULD LOVE TO SEE MORE COMPANIES TO INVESTMENT. AT OUR FIRM, WE ARE PRO- INNOVATION, PRO-ENTREPRENEURS. WE WANT TO SEE TWO NEW TECHNOLOGIES DEVELOPED. THE MORE PEOPLE GETTING INVOLVED, THE BETTER. IT IS AWESOME THAT FACEBOOK IS MAKING THE BIG INVESTMENT. I THINK IT WILL LAUNCH. THERE IS A DIALOGUE HAPPENING. IT IS COMPLICATED. THEY ARE CREATING AN ASSOCIATION THAT WE ARE PART OF, WHICH IS HAPPENING NOW AND THEN THAT ASSOCIATION WILL HAVE A DIALOGUE WITH REGULATORS AND WITH VARIOUS OTHER STAKEHOLDERS AND MAKE SURE THAT WHAT IS CREATED IS SOMETHING THAT BENEFITS ALL DIFFERENT CONSTITUENCIES. THAT MAY INVOLVE CHANGES TO THE PROJECT.>>WHAT CHANGES DO YOU THINK THE LIBRA ASSOCIATION WOULD BE FLEXIBLE WITH? WHAT COULD CHANGE THAT MIGHT HELP REGULATORS COME TO TERMS? >>ONE THING IS I THINK LIKE IF YOU LOOK AT HOW IT WAS RECEIVED, A LOT OF PEOPLE THOUGHT IT WAS, THEY WERE TRYING TO CREATE A NEW CURRENCY THAT WAS SORT OF A SUPER NATIONAL CURRENCY. I THINK IT IS MUCH BETTER TO THINK OF IT AS A PAYMENT SYSTEM. >>WHAT WOULD CHANGE TO MAKE PEOPLE NOT THINK THAT? >>FOR EXAMPLE, DENOMINATED THE CURRENCY IN U.S. DOLLARS. I AM GIVING A HYPOTHETICAL EXAMPLE. I DO NOT THINK THE INTENTION. MY UNDERSTANDING IS THE INTENTION WAS NEVER TO CREATE A NEW CURRENT THE. YOU KNOW, YOU SEE SOME OF THE VARIOUS COMMENTS AROUND IT. IT IS MUCH MORE FOCUSED ON THE PAYMENT RAILS, PROVIDING A PAYMENT SYSTEM THAT YOU KNOW, ONE LOWERS FEES, 2, INCLUDES THOSE 2 BILLION PEOPLE THAT ARE NOT CURRENTLY INCLUDED IN THREE, ALLOWS A PLATFORM DEVELOPERS CAN BUILD ON TOP OF THAT THE WAY THEY BUILD APPLICATIONS ON THE APP STORE.>>OKAY. SOAP MOST RECENTLY, WE HAVE HEARD THAT VISA AND MASTERCARD ARE CONSIDERING HOW TO PULL BACK FROM LIBRA ASSOCIATION BECAUSE THEY ARE NOT REALLY ENJOYING ALL OF THIS LEGAL SCRUTINY. WHAT DO YOU THINK ABOUT THAT? ARE THEY TRADERS OR JUST LACKING COURAGE?>>I DON’T KNOW THE SPECIFICS. I THINK I WOULD SAY JUST GENERALLY, IT IS, YOU KNOW, WHEN YOU CREATE THESE NEW THINGS, THEY ARE, YOU KNOW, THERE IS A TENSION BETWEEN EXISTING COMPANIES THAT HAVE, YOU KNOW, HAVE SOME KIND OF STAKE IN THE STATUS QUO AND NEW TECHNOLOGIES THAT, YOU KNOW, I DON’T KNOW, IMAGINE IF YOU TRIED TO CREATE YOUTUBE BACK IN WHATEVER, 2005 OR SIX AND TRIED AT THE TIME TO WORK WITH, YOU KNOW, INCUMBENT MEDIA COMPANIES. THERE MAY HAVE BEEN CHALLENGES. WHAT I THINK TENDS TO HAPPEN OVER TIME IF YOU LOOK AT YOUTUBE NOW, LIKE OTHER MEDIA COMPANIES HAVE PRESENCE IN NETWORKS. SOMETIMES IT TAKES, YOU KNOW, FIRST TWITTER OR FACEBOOK OR ANY OF THESE THINGS. SOMETIMES IT FIRST REQUIRES HOLDING SOMETHING AND GETTING PEOPLE TO USE IT AND THEN TO REALLY GET THE BUY-IN OF THE LARGER INCUMBENT PLAYERS. CLEARLY LIKE THERE IS A BIG CONTORTION. IT IS, LOCATED. A LOT OF DIFFERENT INTEREST. THAT IS SOMETHING THAT NEEDS TO BE MANAGED. >>GIVEN ALL OF THE SCRUTINY AND ALL OF THE TOXIC BRAND THAT FACEBOOK HAS DEVELOPED, IS HOROWITZ SO COMFORTABLE CONNECTING ITS BRAND WITH FACEBOOK’S THROUGH THE LIBRA ASSOCIATION? >>IT IS IMPORTANT THING, WHICH IS I WROTE AN ARTICLE ABOUT THIS IF YOU ARE INTERESTED. THE PHRASE I LIKE TO USE IS NOT CHANGED, INSTEAD OF THE EURO, DO NOT BE ABLE TO BE EVIL. WHAT I MEAN IS THE WHOLE CONCEPT OF BLOCK CHAIN IS IT USES A GAME THEORETIC MECHANISM WHEREBY IT DOES NOT MATTER, LIKE WHAT THE CREATOR OF THE BLOCK CHAIN, THEIR INTENTIONS ARE OR IF THEY CHANGE THEIR INTENTIONS, IT DOESN’T MATTER BECAUSE IT IS BAKED INTO THE QUOTE WITH THE RULES OF THE KMART AND THE RULES ARE OPEN- SOURCE AND AUDIBLE. I WOULD SAY REGARDLESS OF WHAT I THINK OF FACEBOOK, IT IS A SEPARATE QUESTION. AS LONG AS THE BLOCK CHAIN IS ARCHIVED IN THE CORRECT WAY, YOU DO NOT NEED TO KNOW. YOU DO NOT NEED TO TRUST THEIR INTENTIONS. THAT IS ONE OF THE INSIDE IS ABOUT THIS MOVEMENT BECAUSE I THINK OF THE LAST 20 YEARS, PEOPLE FEEL LIKE THEY MADE A DEAL, LIKE WHEN HE FIRST JOINED FACEBOOK OR TWITTER, WHETHER YOU WERE A USER OR A MEDIA COMPANY, YOU MADE A DEAL WITH THAT, AND IMPLICIT DEAL TOOK A REAL DEAL LIKE TERMS OF DEVISEE, BUT THIS IS HOW THE NETWORK OPERATES. IF YOU TALK TO A MEDIA COMPANY AND HOW THEY FEEL ABOUT THIS BOOK, THEY MAY FEEL LIKE AT FIRST FACEBOOK WAS VERY HELPFUL AND LATER ON, THE RULES CHANGED. SO ONE OF THE IMPORTANT FEATURES OF LOCK CHANGES THE RULES ARE BAKED IN FROM THE START. THEY ARE TRANSPARENT IN THE CANNOT CHANGE. THAT COIN WAS CREATED BY SOMEONE THAT NO ONE KNOWS. IT DOES NOT MATTER WHO THAT PERSON IS BECAUSE THE RULES ARE BAKED INTO THE NETWORK. THAT PERSON CAN CHANGE HIS OR HER MIND. THEY COULD CHANGE THEIR INTENTIONS. SO I WOULD JUST ARGUE THAT ONE OF THE KEY FEATURES HERE IS THAT YOU DO NOT NEED TO SORT OF UNDERSTAND OR EVEN CARE ABOUT THE MOTIVES BEHIND IT WORK >>THAT WORKS WHEN THERE ARE RULES WRITTEN BECAUSE THE RULES CANNOT CHANGE. BUT WE HAVE SEEN A LOT OF PROBLEMS STEM FROM WHEN THE RULES ARE NOT RED AND WE, WHAT HAPPENS IS MOST RECENTLY, THE SEC ONLY FIND THAT U.S. MAKER BLOCK ONE $24 MILLION FOR THEIR NOT QUITE LEGAL SECURITY SALE FROM ITS ICO THAT RAISED 4.1 ALIEN DOLLARS. THAT IS A 0.5% FINE. DO YOU THINK THAT THAT IS FAIR AND IS THAT GOING TO EMBOLDEN BAD ACTORS? >>I DON’T KNOW THE DETAILS. THE WAY THESE THINGS WORK, IT COULD BE ONE OF MANY. IT COULD BE THE BEGINNING OF A PROCESS. I DON’T KNOW. WE ARE NOT INVOLVED. WE ARE NOT INVOLVED WITH THAT PROJECT. YOU KNOW, I WILL SAY THAT WE THINK, WE HAVE FROM THE START, THIS WHOLE ICO CRAZE IN 2017, WE NEVER PARTICIPATED. WHENEVER INVESTED IN ANY COMPANIES THAT DID THESE ICO’S. THERE ARE AN ACCREDITED INVESTOR SALES. WE BELIEVE THAT IT IS VERY IMPORTANT TO WORK WITH REGULATORS AND SO THE COMPANIES WE ARE INVOLVED WITH TAKE REGULATION VERY SERIOUSLY AND OTHER JURISDICTIONS ARE IN AND WE SPENT A LOT OF TIME ON IT. MY PARTNER IS IN AND WE HAVE A BUNCH OF PEOPLE AT THE FIRM WHO DO IT. I DO NOT KNOW ENOUGH ABOUT THE DETAILS. >>DO YOU THINK NO FINES OR VIOLATIONS ON LOTS OF MONEY RAISED MIGHT JUST BE BAD ACTORS LIKE WELL, SURE, IF THE RULES ARE NOT PERFECTLY CLEAR, I WILL BREAK THEM BECAUSE WHO KNOWS? WORST CASE SCENARIO, I GET A SLAP ON THE WRIST. >>ONE THING THAT WOULD BE NICE IF IT THE RULES WERE CLEAR. ONE OF THE FRUSTRATIONS WE HAVE NOW IS BASICALLY, WE HAVE ASKED FOR GUIDANCE AND LOOKED FOR MORE CLARITY ON THE RULES. SO SOME OF THESE, I THINK SOME OF THESE ISSUES ARE, LOOK, I AM SURE THERE ARE BAD ACTORS DOING SCAMS AND THINGS LIKE THIS, BUT I DO THINK SOME OF THESE SITUATIONS WERE SIMPLY THE LACK OF CLARITY IN THE RULES. SO YOU KNOW, I DON’T KNOW IF THIS IS ONE OF THOSE CASES, BUT , YOU KNOW, I DO THINK THERE HAVE BEEN A NUMBER OF CASES WHERE PEOPLE THOUGHT THEY WERE COMPLYING WITH REGULATIONS AND JUST, YOU KNOW, DID NOT UNDERSTAND BECAUSE NONE OF THAT HAS BEEN CLARIFIED. >>THINKING OF THAT, THERE IS SO MUCH CRYPTO CURRENCY SNAKE OIL OUT THERE AND OBVIOUSLY, THERE ARE PLENTY OF PROJECTS WHERE IT IS JUST OBVIOUS IT IS NOT GOING TO WORK. THERE IS A LOT WRONG WITH IT, BUT WHEN YOU SEE A LEGITIMATE PRODUCT THAT OTHERWISE SEEMS LIKE IT HAS REAL POTENTIAL, WHAT ARE THOSE FINAL RED FLAGS THAT YOU ARE STILL SEEING IN THIS DAY AND AGE THAT DISSUADE YOU FROM WANTING TO INVEST OR GET INVOLVED?>>I KIND OF FEEL LIKE CRYPTO TODAY IS A LITTLE BIT LIKE THE EARLY INTERNET AND THAT THERE WAS A SORT OF GOLD RUSH, RIGHT? AND IF YOU GO BACK TO THE 90s, THERE WERE A LOT OF BAD COMPANIES CREATED, A LOT OF IPOS AND OTHER THINGS, THINK THAT PROBABLY SHOULD NEVER HAVE BEEN IPOS. BUT THERE WAS ALSO GOOGLE, YOU KNOW, AMAZON, PAYPAL, YAHOO AND THAT IS OUR VIEW OF THE CURRENT CRYPTO WORLD IS THAT THERE’S A LOT OF THINGS WHICH WE DO NOT AGREE WITH, MAYBE THEY SHOULD NOT EXIST, BUT THERE’S ALSO A LOT OF REALLY HIGH QUALITY UNDER BENOIT AND TECHNOLOGIES. WE BELIEVE THERE WILL BE ICONIC NEW COMPANIES THAT ARE BUILT.>>IF I AM A COMPANY TRYING TO BE LIKE I WANT TO BE A LEGIT COMPANY, I DO NOT WANT PEOPLE TO SAY LIKE OH, I WENT TO BACK AWAY, WHAT ARE SOME RED BAGS THAT THEY CAN GET RID OF OR FIX TWO >>I THINK ONE OF, WHAT WE BELIEVE AS ONE OF THE CORE THINGS IS A LONG-TERM FOCUS WHERE THE EMPLOYEES, THE FOUNDERS, THE INVESTORS AND THE USERS ARE ALL ALIGNED AROUND A SPECIFIC GOAL. FOR EXAMPLE, THERE ARE ALL SORTS OF BEST PRACTICES WITH TRADITIONAL STARTUPS THAT, YOU KNOW, ABOUT HOW TO ISSUE EQUITY AND HOW TO, YOU KNOW, TREAT YOUR USERS IN ALL SORTS OF THINGS. TO TAKE A LONG-TERM WIN-WIN PERSPECTIVE ON THIS. SOME OF THAT HAS BEEN LOST IN THE CRYPTO WORLD. WE TRY TO ONLY WORK WITH ENTREPRENEURS WHO HAD THAT ATTITUDE. WE HAVE A VENTURE FUND THAT WILL INVEST. IT IS A 10+ YEAR VENTURE FUND, A LONG-TERM PERSPECTIVE. WE DO NOT TRADE THINGS. WE BUY, WE INVEST AND WE WORK AS PARTNERS WITH THE FOUNDERS WHAT WE DO FIND IS A LOT OF PEOPLE DON’T KNOW, ESPECIALLY IN A NEW AREA, THEY DON’T KNOW WHAT THE BEST PRACTICES ARE. FOR THAT REASON, I WANTED TO MENTION WE ARE GOING TO RUN A STARTUP SCHOOL IN FEBRUARY AND MARCH FOR CRYPTO SPECIFIC STARTUPS. THAT WILL TAKE WHAT WE HAVE LEARNED OVER THE LAST SEVEN YEARS AS BEST PRACTICES IN THE CATEGORY THAT I THINK HAVE NOT FULLY PROPAGATED OUT. ABLE TO NOT FULLY UNDERSTAND AND TRY TO SHARE THEM WITH PEOPLE THAT COME TO THIS CLASS AND THEN WE WILL PUT EVERYTHING ON YOUTUBE AND EVERY THING ELSE. THIS IS JUST AN EDUCATIONAL THING. WE ARE NOT TAKING EQUITY OR CHARGING. WE FEEL LIKE WE ARE NOW FAR ENOUGH INTO THIS CRYPTO MOVEMENT THAT THERE ARE BEST PRACTICES, BUT PEOPLE DO NOT UNDERSTAND THAT. IT REMINDS ME OF, I HAVE BEEN INVOLVED WITH STARTUPS FOR 15 YEARS. I USED TO BE AN ENTREPRENEUR AND BACK IN THE 2000, THERE WAS ALL SORTS OF LIKE IT, HOW DO YOU BUILD PRODUCT, HOW DO YOU RAISE MONEY AND THEN THERE WERE A BUNCH OF PEOPLE AND BLOGGERS, A BUNCH OF PEOPLE WHO DID A GREAT PUBLIC SERVICE, THEY TOOK ALL THESE PRACTICES AND THEY PROMULGATED THEM AND SO WE ARE TRYING TO DO OUR PART IN THE CRYPTO WORLD AND SAY HERE IS WHAT WE HAVE LEARNED, HERE IS THE BEST WAY TO DO ORGANIZATIONAL BUILDING. ABOUT GOOD MARKET, BUT TECHNOLOGY AND HERE ARE THE BEST PRACTICES WE HAVE LEARNED AND YOU KNOW, AND SHARE THEM WITH THE WORLD. >>IS THE HOPE THAT THESE COMPANIES WOULD THEN RAISE MONEY ? >>POTENTIALLY. THEY DON’T HAVE TO. WE HOPE THAT THEY LIKE US AND THEY WOULD COME TALK TO US IF THEY DID THAT. BUT YOU KNOW, GENERALLY THE WAY WE LOOK AT THESE THINGS IS IF WE, YOU KNOW, WE ARE GOOD COMMUNITY MEMBERS AND YOU KNOW, PROVIDE VALUE TO THE COMMUNITY THAT PEOPLE WILL, YOU KNOW, SEE THAT AND WANT TO WORK WITH US. THERE IS NO REQUIREMENT OR ANYTHING.>>YOU SPOKE ABOUT TRYING TO GET THERE TO BE BETTER MORE LEGITIMATE RULES, WERE CLEAR RULES SO PEOPLE KNOW WHAT TO DO AND WHAT NOT TO DO. IN MAY, YOU GUYS POSTED OFFICIALS FROM THE TREASURY DEPARTMENT, THE SEC AND OTHER REGULATORS ALONG WITH YOUR PORTFOLIO COMPANIES. IT IS KIND OF A CLOSED-DOOR MEETING THAT PEOPLE WERE SURPRISED ABOUT BECAUSE IT IS NOT USUAL FOR ALL OF THOSE REGULATORS TO GET TOGETHER WITH A PRIVATE COMPANY LIKE THAT. WHAT WAS THE MESSAGE THAT YOU WERE TRYING TO CONVEY TO THEM? >>WE ARE TRYING TO CREATE A DIALOGUE.>>ABOUT WHAT TWO >>OVER LIKE WHAT IS THE BEST WAY TO BALANCE INNOVATION AND REGULATORY CONCERNS? AND TO, I THINK WHAT WE SAW IS WE ENGAGE WITH BOTH CONSTITUENCIES AND WHAT WE SAW WAS A LOT OF MISUNDERSTANDINGS. SO BY THE WAY, WE PUT EVERYTHING ON. WE VIDEOTAPED THE WHOLE THING AND PUT IT ON THE INTERNET. SO IT IS PRETTY OPEN. IT WAS A WIDELY ATTENDED GATHERING. A REGULATORY MEETING. IT WAS A BUNCH OF PEOPLE, INCLUDING PEOPLE OUTSIDE OF OUR FIRM. THE IDEA WAS TO JUST SORT OF START A DIALOGUE SO THAT PEOPLE, YOU KNOW, LIKE LOOK, IF ALL YOU DO IS READ THE NEWS MEDIA REPORTS ABOUT CRYPTO, YOU SEE SCAMS AND ASK AND IT JUST LOOKS LIKE THIS BIG, YOU KNOW, MESSY THING WITH ALL THESE SKIMMERS AND THINGS.>>IT IS A BIG MESSY THING. >>THERE IS MESSY STUFF AS THERE WAS IN THE EARLY INTERNET. I TALKED ABOUT THIS A LOT. THERE WAS A LOT OF, YOU KNOW, CRAZY STUFF HAPPENING BACK IN THE 90s. YOU SAW FIRST HAND, SO THAT CERTAINLY DOES EXIST, BUT WE THINK THERE IS A LOT OF VALUE IN THE TECHNOLOGY AND WE THINK, I THINK IT IS IMPORTANT, I PERSONALLY BELIEVE IT IS AN IMPORTANT NATIONAL PRIORITY TO MAKE SURE THAT WE ARE THE LEADER . >>WHAT WAS THEIR BIGGEST PUSHBACK ABOUT THAT, THING LIKE YEAH, WE GET YOU WANT INNOVATION, BUT HERE IS WHY THE REGULATION, THE SAFETY IS MORE IMPORTANT.>>SO I THINK THAT IS A GREAT QUESTION. PARTLY IT IS JUST AN UNDERSTANDING LIKE WHY ARE YOU DOING THIS MONKEY SO I GAVE A TALK, IT IS ONLINE. IT IS ON A WEBSITE. I GAVE A TALK ABOUT WHY ARE WE EXCITED ABOUT THIS, JUST, YOU KNOW, WE HAD A BUNCH OF ENTREPRENEURS EXPLAIN WHAT THEY ARE DOING AND SEE THERE IS REAL VALUE POTENTIALLY IN TECHNOLOGY. SO THAT IS ONE LAYER SORT OF CREATING A SHARED UNDERSTANDING. THERE IS A LOT OF LEGAL QUESTIONS. SO IF YOU LOOK AT THE WAY THAT THE REGULATORY FRAMEWORK WORKS AROUND SECURITIES AND COMMODITIES, YOU KNOW, 70 YEARS OF KNOWLEDGE TO MAKE RULES. THEY HAVE SEEN VARIOUS ERAS AND ALL SORTS OF STUFF. SO THERE IS JUST A LOT OF TECHNICAL QUESTIONS LIKE WHAT IS THE BEST PRACTICE, WHAT SHOULD, YOU KNOW, BECAUSE WE BELIEVE THE RIGHT BUSINESS MODEL IS IN MANY CASES TO HAVE CERTAIN POINTS AND TOKENS WITH THE PROJECTS AND TO GIVE THOSE TWO EMPLOYEES TO HAVE, YOU KNOW, SO FOR EXAMPLE OUR STANDARD THING IS WE WILL INVEST, WE WILL BY TOKENS. THEY WILL USE THAT MONEY TO FUND THE COMPANY OPERATIONS, THE EMPLOYEES WILL BE INCENTIVIZED THAT WAY, JUST LIKE STOCK OPTIONS. AT SOME POINT TIME CAMINO, THE RIGHT STUFF IN PLACE IN THE RIGHT LOOK UP RULES AND THINGS LIKE THAT, THERE MIGHT BE OPPORTUNITY FOR OTHER PEOPLE TO PARTICIPATE. THERE NEED TO BE ALL SORTS OF SAFEGUARDS. YOU CANNOT HAVE WHAT ARE EFFECTIVELY UNREGULATED SECURITY OFFERINGS. SO YOU KNOW, SO I THINK THERE IS A SHARED UNDERSTANDING DIMENSION TO THAT. ALSO, START TO BEGIN TO WORK OUT SOME OF THESE WERE TECHNICAL QUESTIONS LIKE WHAT IS THE RIGHT REGULATORY FRAMEWORK.>>ONE OF YOUR BIG INVESTMENT PIECES FOLLOWING NERD ENERGY, THE PLACES WHERE ENGINEERS ARE REALLY KICKING OUT AND OFTENTIMES BUILDING SOMETHING THAT SUDDENLY BECOMES MAINSTREAM. WHAT AREAS ARE YOU SEEING LOSING NERD ENERGY IN WHICH AREAS ARE GAINING THAT ENERGY? >>BY THE WAY, I SAY THAT. USE THE WORD NERD VERY AFFECTIONATELY. >>ME TO. >>WHAT I MEAN BY THAT IS YOU KNOW, LOOK AT THE HISTORY OF SILICON VALLEY. >>WHICH ONES ARE GAINING ENERGY? >>TO ME, BY FAR THE BIGGEST NERD ENERGY THING IS CRYPTO. THAT IS WHY I AM ALL IN ON THIS. THERE IS A TON OF SMART PEOPLE AND IT IS MISUNDERSTOOD AND YOU KNOW, IT SKEWS ALL THE SMART TECHNICAL PEOPLE ARE IN IT. THEY ARE DEEPLY PASSIONATE AND THEY, YOU KNOW, LIKE IT IS OFF THE CHARTS. I THINK LIKE VR I KNOW I THINK THE OCULIST QUEST IS A BREAKOUT PRODUCT. I LOVE LIKE IT, YOU KNOW, THE OCULIST QUEST TO READ IS ONE OF MY FAVORITE THINGS TO READ EVERY DAY. I THINK THAT IS A REALLY INTERESTING AREA. >>ANYWAY MY NOT THINK THAT? CRYPTO MBR HAVE BEEN AROUND FOR A MINUTE.>>I THINK SOME OF THESE THINGS, SOME OF THEM LIKE A I USED TO BE ONE. SHE LEARNING TYPICALLY, BUT THAT HAS TRANSITIONED INTO THE MAINSTREAM. I AM STILL VERY INTO HARDWARE. I KNOW HARDWARE IS OUT OF FASHION RIGHT NOW, OR I THINK, I THINK YOU KNOW, I DON’T KNOW. I PERSONALLY SPEND MY WEEKENDS, YOU KNOW, WITH 3-D PRINTERS AND I THINK I LOVE ALL THAT. I THINK IT IS VERY EXCITING. I THINK THAT IS SORT OF NOT, YOU KNOW, IN RIGHT NOW, I GUESS. >>JUST TO RECAP SOME OF THE INTERESTING POINTS. CHRIS DOES THINK LIBRA WILL LAUNCH IN THE NEXT FEW YEARS. ONE OPTION MIGHT BE CHANGING FROM LIBRA TO U.S. DOLLARS TO MAKE REGULATORS A LITTLE BIT MORE COMFORTABLE WITH IT AND OBVIOUSLY, THERE IS GOING TO BE BIG COMPANIES THAT HAVE A STAKE IN THE STATUS QUO THAT MIGHT BE INTERESTED IN PULLING BACK BECAUSE THEY DO NOT NEED IT TO SUCCEED. AFTER THIS WHOLE GOLD RUSH, IF WE CAN FOCUS MORE ON THE LONG TERM AND GET EVERYONE ALIGNED FROM THE INVESTORS TO THE EMPLOYEES TO THE USERS WITH THE RIGHT INCENTIVES, CRYPTO MIGHT BE ABLE TO LAST A LITTLE BIT LONGER. WE WILL NEED STRONGER RULES AND TO ANSWER ALL THE TECHNICAL QUESTIONS OF REGULATORS, BUT IF YOU ARE LOOKING FOR THE NEXT BIG AREA, YOU KNOW, AUGMENTED REALITY, VIRTUAL REALITY ARE STILL IN, BUT THERE IS PLENTY TO BUILDING CRYPTO CURRENCY. I HOPE YOU — >>IF YOU ARE INTERESTED IN THE CRYPTO SCHOOL, WE HAVE A PLACE WHERE YOU CAN PUT IN YOUR EMAIL ADDRESS AND WE WILL SEND YOU MORE INFORMATION. >>THANKS FOR WATCHING. >>THANK YOU.>>THANK YOU.>>UP NEXT WE HAVE A SPECIAL ANNOUNCEMENT. PLEASE WELCOME TO THE STAGE KATE CLARK. >>WELCOME. WE ARE HAPPY TO HAVE YOU. I KNOW YOU HAVE SOME NEWS WENT TO GET INTO. FIRST THINGS FIRST, TELL EVERYONE WHAT BRACTS IS. >>THANKS FOR HAVING ME. MY NAME IS HENRIQUE. I AM A COFOUNDER OF BREX. WE BUILD FINANCIAL SERVICES TO HELP AMBITIOUS COMPANIES GROW. MY COFOUNDER PEDRO AND I STARTED THIS BACK IN MARCH 2017. SINCE THEN, WE LAUNCHED OUR FIRST PRODUCT, WHICH WAS FOR STARTERS. THEM AND KEPT LAUNCHING PRODUCTS THAT WERE TAILORED TO OUR CUSTOMERS, SUCH AS THE e- COMMERCE. SINCE THE BEGINNING, WE KNEW THAT BREX WAS NOT ONLY A CORPORATE CARD COMPANY. >>WHAT IS THE LONG-TERM VISION? >>WE FOCUS ON ONE PROBLEM, WHICH IS THE MONEY. I AM FROM BRAZIL AND WE USE THE SAY THAT NO MATTER HOW DEVELOPED COUNTRY, BASED ON HOW FAST YOU COULD DO THREE THINGS, ONE IS GET AN OFFICE, SET UP INTERNET AND THREE IS OPEN A BANKING ACCOUNT. WHEN WE MOVED HERE TO THE U.S., GETTING AN OFFICE WITH INTERNET WAS SIMPLE, BUT OPENING A BANK ACCOUNT TOOK WEEKS. EVEN IF WE GOT IT, WE HAD SO MANY ISSUES WITH IT. IT SEEMS LIKE THE INTERFACE WAS BUILT IN THE 90s. CHARGED US SO MUCH MONEY FOR WIRE TRANSFERS AND IT SEEMED LIKE THERE WAS MULTIPLE SYSTEMS BETWEEN WIRES THAT SEEM TO NOT INTEGRATE WITH ONE ANOTHER. HAVE ANY OF YOU ACTUALLY HAD A POSITIVE EXPERIENCE WITH YOUR BUSINESS BANK ACCOUNT? IT HAS BEEN A WHILE SINCE BANKS ACTUALLY WORKED FOR BUSINESSES. SO THAT IS WHY WE BUILD SOMETHING BETTER. >>OPENING A BANK ACCOUNT SUCKS. DO YOU HAVE A SOLUTION FOR THOSE OF US OPENING STARTED BANK ACCOUNTS? >>WE ARE ANNOUNCING BREX CASH. WE FOCUS ON TWO MAIN PROBLEMS. THE FIRST ONE IS YOUR PROCESS FOR MOVING MONEY IS COMPLEX AND SLOW. WITH BREX CASH, WE MADE IT FAST AND EASY. IN UNDER ONE MINUTE, YOU CAN SEND WIRES , WHICH IS DRAMATICALLY FASTER THAN ANY OTHER BANK. THEN, YOU CAN SEE THOSE SAME PAYMENTS IN ONE SINGLE DASHBOARD. NO MATTER IF YOU ARE PAYING THROUGH CARD, WIRES, CHECKS, AND ONE SINGLE PLACE, YOU CAN CONTROL EVERYTHING YOU ARE PAYING. THE SECOND PROBLEM WE ARE SOLVING IS FINANCIAL SERVICES ARE VERY EXPENSIVE. THE AVERAGE COST OF THE WIRE IN THE U.S. IS $23. WITH BREX CASH, WE MADE IT THREE. NOT ONLY DID WE MAKE IT THREE, WE REWARD YOU FOR MAKING THOSE PAYMENTS. SO YOU EARN POINTS FOR EVERY SINGLE PAYMENT THAT YOU MAKE. TRADITIONAL BANKS, THE USUALLY SEPARATE IS BETWEEN CHECKING AND SAVINGS ACCOUNT, SO YOU MUST INTEREST IN YOUR MONEY AS A WHOLE. THE AVERAGE INTEREST RATE FOR A SAVINGS ACCOUNT IN THE U.S. IS 0.1%. WITH BREX CASH, WE SUBDIVIDED INTO AN ACCOUNT THAT YOU EARN 1.6% OF ALL YOUR MONEY ALL THE TIME. SO WITH BREX CASH, IT IS LIKE THIS MODERN INTERFACE THAT CHARGE YOU KNOW FEES TO PAY AND WE HAVE AN INDUSTRY LEADING YOU.>>CAN YOU SHOW US WHAT IT LOOKS LIKE?>>OF COURSE. THIS IS THE DASHBOARD. VERY EASILY, YOU CAN ADD FUNDS FROM OTHER BANK ACCOUNTS.& HEY YOU ARE TRANSFERRING TO YOUR BREX CASH ACCOUNT. LET’S SAY $1500. AND THEN YOU JUST REVIEW IT AND MAKE SURE EVERYTHING IS OKAY AND BOOM, DONE. EVERYTHING IS NOW AVAILABLE. YOU CAN USE THIS IMMEDIATELY. MONEY IS VERY EASY. YOU TYPE YOU WANT TO SEND MONEY TO, LET’S SAY GENESIS LABS. WE CHOOSE BETWEEN WIRES AND ACH AND IF IT IS ALREADY REFILLED FOR YOU, LET’S SAY WE WANT TO SEND THE SAME $1500 AND THEN YOU JUST REVIEW EVERYTHING, MAKE SURE EVERYTHING IS OKAY AND BOOM, IT IS DONE. SUPER SIMPLE, SUPERFAST. >>YOU GUYS CAN ALL READ ABOUT BREX CASH ON TECH CRUNCH.COM RIGHT NOW, BUT WE ARE OUT OF TIME, SO I JOINING US. >>THANK YOU SO MUCH.>>OKAY, QUICKLY BECAUSE WE ARE BEHIND, ON THE EXTRA CRUNCH STAGE, IF YOU’RE INTERESTED IN GETTING INCOME YOU SHOULD CHECK THIS OUT, HOW TO GET INTO WHY COMMENTATOR WITH CONTINUITY. NOW , WE ARE GOING TO BE TALKING TO SLACK, SO PLEASE WELCOME TO THE STAGE THE COFOUNDER AND CHIEF TECHNOLOGY OFFICER AT SLACK CAL HENDERSON AND GENERAL PARTNER AT SPARK CAPITAL MEGAN QUINN AS WELL AS YOUR MODERATOR, KATE CLARK. WARM WELCOME PLEASE. >>IT HAS BEEN A YEAR FOR SLACK, PROBABLY THE MOST IMPORTANT YEAR IN THE COMPANY’S HISTORY, SO I WANT TO TALK ABOUT THE DIRECT LISTING. I WANT TO TALK EVERYTHING THAT HAPPENED THIS YEAR. I THINK WE SHOULD START REWINDING A LITTLE BIT AND TALK FIRST ABOUT GLITCH, THE GAME THAT SLACK BEGAN AS, OR TINY SPECK. CAN YOU JUST TELL US THE MOMENT YOU REALIZED THAT GLITCH WAS NOT GOING TO WORK TWO >>SO WE STARTED THE COMPANY TO WORK ON THIS VIDEOGAME AND WE SPENT FOUR YEARS ON IT. I THINK REALLY IN RETROSPECT, THE LAST YEAR WE KNEW THAT IT WAS NOT WORKING OUT. I THINK THAT WAS HARD TO ADMIT TO OURSELVES, THE THING WE WANTED TO BUILD WAS NOT GOING TO WORK AND IT WAS ALSO THE CURSE OF NOT BEING SO UNSUCCESSFUL BUT IT WAS OBVIOUSLY A FAILURE. WE SAT ON THE FENCE FOR TOO LONG. THE NEXT THING WE DO IS GOING TO REALLY, YOU KNOW, MOVE THE NEEDLE AND THEN WE WILL BE SUCCESSFUL. I THINK WE WERE A LONG TIME COMING TO THE REALIZATION THAT IT WAS NOT GOING TO WORK OUT AND MAKE THAT DIFFICULT DECISION TO STOP DOING IT AND TO WIND THE COMPANY AND THE PRODUCT DOWN. THAT WAS A TOUGH CHOICE. THAT WAS A REALLY DIFFICULT TIME FOR BOTH FROM A REALIZING THAT WHAT WE WANTED STEVE WAS NOT GOING TO WORK AND ALSO HAVING TO LAYOFF A WHOLE BUNCH OF PEOPLE THAT WE HAD CONVINCED TO COME WORK AT OUR STARTUP. SO IT WAS A HARROWING EXPERIENCE. >>THERE WAS A BIG MOMENT FOR YOU? >>NOT REALLY. YOU KNOW, WE HAVE BEEN TALKING ABOUT FOR SOME TIME. IT WAS NOT EVEN A DECLINE, JUST A WE NEVER MANAGED TO GET WHAT WE NEEDED. AND WE WOULD HAVE THIS CONVERSATION PERIODICALLY, SHOULD BE CONTINUED, SHOULD WE DO THE NEXT THING, WHAT WOULD TURNING THE CORNER LOOK LIKE? AND IT WAS MUCH MORE. WE REALIZED WE HAD QUITE A FEW MONTHS OF RUNWAY LEFT BEFORE WE WOULD HAVE TO MAKE THE DECISION TO RAISE CAPITAL OR NOT. WE DID NOT WANT TO HIT THE END OF OUR RUNWAY.>>SO MEGAN, YOU HAVE BEEN AN INVESTOR FOR YEARS NOW AND HE FIRST CONNECTED WITH THE COMPANY IN 2013 VIA DM WITH STEWART BUTTERFIELD WHO IS THE CEO, CAN YOU TELL US WHAT THAT MESSAGE SAID?>>YES. I FIRST CONNECTED WITH STEWART AT THE BEGINNING OF 2013. I WAS ABOUT SIX MONTHS INTO MY ROLE AS A PARTNER AT PERKINS, BUT I HAD PREVIOUSLY BEEN THE PRODUCT HAD. I THINK OUT OF THE BLUE HE SENT ME A DM THAT SAID WANT A JOB? I DID NOT TAKE HIM UP ON IT, OBVIOUSLY, WHICH WAS IN RETROSPECT MAYBE A MISTAKE. BUT I DID GET TOGETHER WITH HIM TO LEARN MORE ABOUT THE PRODUCT AND BECAME A BETA TESTER THEN AT THE BEGINNING OF 2013 AND AS I HAVE MENTIONED TO YOU, IF ANYONE HERE, YOU CAN UNDERSTAND WHY SLACK IS IN SINGLE PLAYER MODE IS NOT THE MOST THRILLING OF PRODUCTS. IT IS LIKE SHUTTING THEM INTO THE VOID. I WAS REALLY EXCITED ABOUT THAT. I CONTINUED TO STAY IN TOUCH WITH STEWART FOR A NUMBER OF YEARS. >>WHAT DID HE SAY TO YOU AT THAT MEETING? WHAT WAS IT? SIX YEARS AGO? >>HE WAS TALKING ABOUT HIS IDEA AND PLANS FOR SLACK AND HOW IT CAME TO BE. IT WAS A TOOL THAT THE TEAM HAD BEEN USING WHILE BUILDING GLITCH AND HE WAS NOT AN ENTERPRISE SASS GUY. BUT HE WAS A PRODUCT PERSONA. HE REALLY UNDERSTOOD AND EMPATHIZED WITH PEOPLE WHO IN THE WORKPLACE WERE LOOKING FOR NEW WAYS TO COMMUNICATE AND YOU KNOW, HAD FOUND SOMETHING THAT WORKED FOR CAL AND HIM AND THE TEAM AND WERE EXCITED TO GET NON-GLITCH FOLKS ON IT. YOU CAN CORRECT ME, THERE WAS LIKE 30 BETA CUSTOMERS AT THAT POINT BEFORE THEY ENDED UP LAUNCHING OUT OF BETA ON VALENTINE’S DAY. >>YEAH. BECAUSE IT IS NOT A PRODUCT THAT ONE PERSON COULD USE BY THEMSELVES, IT WAS A REAL UPHILL BATTLE GETTING THE FIRST FEW TEST, SO IT WAS NOT MISSING SOMEBODY, IT WAS CONVINCING SOMEBODY TO CONVINCE THEIR TEAM, SO WE WENT AROUND FRIENDS COMPANIES IN SAN FRANCISCO AND LIKE SPENT TIME TRYING TO CONVINCE PEOPLE, LIKE THREE OR FOUR MEETINGS OF GOING TO SOME AT HIS OFFICE AND BEING LIKE PLEASE USE OUR PRODUCTS. BUT I MEAN, THOSE IN INITIAL USERS, THEY WERE HUGE IN THE DEVELOPMENT OF THE PRODUCT. US UNDERSTANDING WHAT IT WAS WE NEEDED TO BUILD, WE HAD A CLEAR VISION OF THE KIND OF PRODUCT WE WANTED TO CREATE AND IT WORKED REALLY WELL FOR US AS A TEAM, BUT GETTING IT TO THE HANDS OF OTHER PEOPLE AND WATCHING THEM WORK IMMEDIATELY, YOU KNOW, BUT A WHOLE BUNCH OF THINGS TO LIKE ABOUT THE DESIGN OF THE PRODUCT THAT WE WOULD NEED TO EVOLVE. WE SPENT MUCH OF 2013 AND THAT ITERATION PHASE OF IT WORKS FOR US, LET’S MAKE IT WORK FOR OTHER TEAMS AS WELL. EVEN AT ANOTHER TIME, THERE WERE TEAMS THAT WERE JUST LIKE US. IT WAS A SMALL SOFTWARE COMPANY BASED IN SAN FRANCISCO, THEY WERE VERY EARLY ADOPTERS OF TECHNOLOGY, BUT STILL LIKE FINDING THAT PRODUCT MARKET IT WAS WHAT WE SPENT MOST OF THE FIRST YEAR DOING. >>IN JUNE, YOU HAD COMPLETED A DIRECT LISTING. HIGHLY ANTICIPATED TONS OF HEADLINES, IT WAS ONLY THE SECOND OF ITS KIND FOLLOWING SPOT IF I, WHICH DID IT A YEAR PRIOR. WHICH ONE OF YOU GUYS WANTS TO TAKE THE DIFFICULT TASK OF EXPLAINING WHAT A DIRECT LISTENING IS? >>I AM HAPPY TO TAKE THAT ONE. AS A COMPANY, WE WANTED TO BECOME A PUBLIC COMPANY. THERE ARE A LOT OF ADVANTAGES TO US BEING A PUBLIC COMPANY AND THE RIGOR AND SCRUTINY THAT COMES ALONG WITH THAT. BUT WE DID NOT NEED TO RAISE CAPITAL. THE USUAL PROCESS OF THE IPO IS TAKING ON ADDITIONAL DILUTION TO SELL NEW SHARES TO RAISE CAPITAL FOR THE BUSINESS. WE ALREADY HAD ENOUGH CAPITAL. WE DID NOT NEED TO RAISE. SO IT IS MUCH OF THE SAME PROCESS AND YOU WORK WITH THE SAME BANKS AND END UP WITH THE SAME OUTCOME , BUT WE DID NOT RAISE CAPITAL AND WE WERE ABLE TO OFFER LIQUIDITY TO OUR EMPLOYEES AND SHAREHOLDERS MUCH SOONER AS WELL. SO THERE IS A MARKER PERIOD AROUND IT. >>HAS BEEN A LOT OF TALK ABOUT DIRECT LISTINGS ESPECIALLY IN LAST FEW MONTHS. A LOT OF PEOPLE ON TWITTER, A LOT OF PEOPLE BLOGGING ABOUT IT. THERE WAS A CONFERENCE YESTERDAY ABOUT RINGING TOGETHER MUCH OF SILICON VALLEY’S TOP INVESTORS, WHICH YOU WERE THEREFORE. WHAT IS YOUR TAKE ON DIRECT LISTINGS?>>AS SOMEONE WHO INVESTS IN COMPANIES UPENDING THE STATUS QUO, THERE ARE SOME THINGS APPEALING ABOUT A FINANCIAL VEHICLE, AND INSTRUMENT THAT IS UPENDING HOW THINGS HAVE BEEN DONE FOR A LONG TIME. I THINK IT IS IMPORTANT TO UNDERLINE THAT DIRECT LISTINGS ARE NOT FOR EVERYBODY AND AS CAL MENTIONED RIGHT OFF THE BAT, ONE OF THE UNIQUE THINGS ABOUT A DIRECT LISTING TODAY AT LEAST IS THAT YOU DO NOT RAISE CAPITAL. IT IS ONLY APPROPRIATE FOR COMPANIES THAT DON’T NEED TO RAISE CAPITAL AS PART OF THEIR PUBLIC OFFERING. BUT THERE ARE OTHER REQUIREMENTS THAT I THINK I BEING SO STOP AT A MARKET. YOU HAVE TO HAVE A PRODUCT AND A BUSINESS THAT PEOPLE CAN EASILY UNDERSTAND AND YOU HAVE TO HAVE AN EXECUTIVE TEAM THAT IS WILLING TO GET OUT THERE AND POUND THE PAVEMENT AND TELL THAT STORY BECAUSE YOU DO NOT HAVE RESEARCH ANALYST WHO ARE ASSIGNED TO COVER YOU. AND YOU KNOW, I THINK FRANKLY MOST IMPORTANTLY, YOU HAVE TO HAVE SHAREHOLDERS WILLING TO SELL BECAUSE YOU NEED SOMETHING THAT IS ACTUALLY GOING TO TRADE ON THE FIRST DAY AND YOU NEED ENOUGH OF IT THAT THERE IS NOT GOING TO BE A CRAZY NOT VOLATILITY. THERE ARE A NUMBER OF REQUIREMENTS FOR DIRECT LISTING, BUT THERE ARE A LOT OF BENEFITS. I THINK SOME ENTREPRENEURS FEEL LIKE IT IS A MORE TRANS-PALLET PROCESS, YOU CAN PUT ALL YOUR MATERIALS ONLINE. I THINK SOME FOLKS FIND IT APPEALING THAT RATHER THAN HAVING UNDERWRITERS LINEUP INVESTORS AND SET THE PRICE THEMSELVES, YOU JUST AT THE MARKET HAVE AT IT AND WHAT COME WHAT MAY. I ALSO THINK AS CAL MENTIONED, THERE IS NO LOCKUPS, YOU DO NOT HAVE THE SMALL BEER AT SOME POINT IN TIME IN THE FUTURE. SO THERE ARE A LOT OF BENEFITS AS WELL. OF COURSE, YES, THANKS ARE INVOLVED. THE FEES ARE LESS, BUT THERE ARE STILL BANKS INVOLVED. >>ONE OF THE THINGS HE SAID BACKSTAGE IS MANY OF THE COMPANY’S HE WORKED WITH, DIRECT LISTINGS ARE PART OF THE CONVERSATION I. SO WHAT ARE YOUR PREDICTIONS IN THE NEXT FEW YEARS? HOW MANY MORE DO YOU THINK WE WILL SEE?>>I THINK SPOTTED BY AN SLACK HAVE OPENED THE DOOR FOR MORE PRESSURE. THERE HAVE BEEN RUMORS OF OTHER BIG COMPANIES THAT ARE GOING TO GO THROUGH THAT DOOR. SO I THINK WHAT WE WILL CONTINUE TO SEE MORE, I THINK WHAT IS UNPROVEN RIGHT NOW IS TO WHAT DEGREE YOU NEED TO HAVE BRAND RECOGNITION OR WHAT DEGREE YOU NEED TO BE SUPER SCALE FOR IT TO BE AN APPROPRIATE VEHICLE. THERE CAN BE GREAT COMPANIES, GREAT BUSINESSES, BUT MAYBE THEY ARE ONLY GOING TO BE VALUED AT 1 BILLION AT MAX. IS THE DIRECT LISTING. DO THEY NEED MORE OF THE SUPPORT AND INFRASTRUCTURE OF TRADITIONAL BANKS. I THINK YOU WILL SEE MORE OF THEM. I CANNOT PREDICT FIVE YEARS FROM NOW IS GOING TO LOOK 50-50 OR WHATNOT. BUT I DO THINK THAT THERE IS GOING TO BE MORE EXPLANATION AROUND ALTERNATIVE PATHS TO PUBLIC MARKETS. >>THIS WAS A VERY INNOVATIVE TOOL TO COMMUNICATE WITH EMPLOYEES AT YOUR COMPANY. THERE HAVE BEEN MANY COPYCATS AS THERE OFTEN ARE WITH COMPANIES LIKE THIS. ONE OF THOSE IS MICROSOFT, WHICH LAUNCHED TEAMS. IT WAS MAYBE 2017. SO YEARS AFTER SLACK LAUNCHED. YOU GUYS HAVE PUBLISHED AN AD PLAYFULLY. SORT OF THING WELCOME TO THE MARKET. IT IS NOT EASY. I AM WONDERING HAS THE SENTIMENT AROUND MICROSOFT AND THE FORCE OF TEAMS CHANGED AT FLOCK? >>YOU KNOW, HAVING MICROSOFT IS DEFINITELY A COMPANY TO BE VERY AWARE OF. THEY ARE VERY CAPABLE LARGE COMPANY WITH A CREDIBLE TRACK RECORD. YOU KNOW, ON THE ONE SIDE, I THINK IT HAS BEEN GOOD FOR US AS A MARKET VALIDATION THAT YOU KNOW, THERE IS A LOT OF OTHER SMALL COMPANIES THAT HAVE TRIED SOMETHING LIKE SLACK, BUT IF MICROSOFT IS BUILDING A PRODUCT IN THIS SPACE, THIS IS A CATEGORY THAT IS GOING TO CONTINUE TO EXIST IN THE FUTURE. THIS IS THE STRONG BELIEF THAT THIS KIND OF TOOL IS THE KIND OF THING THAT EVER ENTERPRISE IS GOING TO WANT AT SOME POINT. I THINK YOU KNOW, WE HAVE UNIQUELY MAYBE FOREIGN ENTERPRISE SOFTWARE COMPANY, WE HAVE FOCUSED ON THE USER EXPERIENCE AND WHAT IT IS LIKE TO USE SLACK. A LOT OF, MOST OF OUR EARLY GROWTH WAS DRIVEN FROM PEOPLE JUST PICKING IT UP IN TRYING IT AND FINDING IT USEFUL. AND YOU KNOW, AND LIKING IT, WHICH IS DEFINITELY NOT THE WAY PEOPLE USED TO BUILD ENTERPRISE SOFTWARE. I THINK WE ARE CONTINUING TO TAKE THAT APPROACH TO MAKING A REALLY GREAT EXPERIENCE THAT PEOPLE LOVE TO USE. I THINK THAT CAN BE A STRONG COMPETITIVE ADVANTAGE FOR US IN AN DURING WAY. >>I JUST HAVE TO ADD, IF YOU GO TO DUAL TRENDS AND YOU LOOK UP MICROSOFT TEAMS, THE TOP TRENDING ASSOCIATED TERMS ARE HOW DO I UNINSTALL MICROSOFT TEAMS. HOW DO I GET RID OF MICROSOFT TEAMS. SO THERE ARE DEFINITE BENEFITS TO OWNING YOUR DISTRIBUTION CHANNEL, BUT ALSO FROM A CONSUMER STANDPOINT, IT HAS REAL DRAWBACKS. >>[MUSIC] ABOUT CAN BUNDLE TEAMS. A LOT OF PEOPLE HAPPY ADVANTAGE IN THAT THEY CAN JUST SORT OF BE LIKE TAKE IT EVEN IF YOU DO REALLY WANT TO UNINSTALL IT. I THINK MANY SEE THAT AS A THREAT TO SLACK AND I THINK PARTIALLY WHY MAYBE SOME ARE HERE ON THE FLAT STOCK. >>YOU KNOW, THE MAJORITY OF ENTERPRISE COMPANIES IN THE WORLD ARE MICROSOFT CUSTOMERS. LIKE THE VAST MAJORITY. BUT MANY OF THOSE COMPANIES ARE SLACK CUSTOMERS AS WELL. SEWED DON’T THINK THAT WE SEE, YOU KNOW THAT DISTRIBUTION IS GREAT, BUT WE, ONE OF THE GOALS WITH THE PRODUCT IS THAT WE WANT EVERY BIT OF SOFTWARE THAT YOUR COMPANY USES TO BE MADE A LITTLE BIT MORE USEFUL, A LITTLE BIT MORE VALUABLE BY USING IT WITH SLACK. IF YOU ARE AN ENTERPRISE COMPANY, SOME OF THOSE COME FROM MICROSOFT. WE WENT TO MAKE THEM BETTER WITH SLACK AND A WHOLE BUNCH OF THEM DO NOT COME FROM MICROSOFT. THE TREND OVER THE LAST DECADE IN SOFTWARE IN THE WORKPLACE IS NOT THE LIBERATION OF TOOLS. THE AVERAGE MEDIUM-SIZED COMPANY TODAY IS BUYING 1000 DIFFERENT SOFTWARE TOOLS. TO USE IN THE WORKPLACE. AND YOU KNOW, INCREASINGLY SMALLER PORTION OF THAT OVERTIME IS COMING FROM MICROSOFT TO ALL THE BIG VENDORS. SO WE SEE PART OF THE VISION OF THE INTEGRATION PLAN FORM AN SLACK IS THAT WE WANT THOSE 5% OF APPS THAT COME FROM THE BIG SOFTWARE AND THE OTHER 95% OF APPS THAT YOU ARE USING TO BE PRODUCTIVE IN YOUR MARKETING TEAM IN YOUR SALES TEAM AND YOUR ACCOUNTING TEAM AND YOUR PAYABLE TEAM. SO THAT IT IS HOW WE LOOK AT IT. >>ONE OF YOU MENTIONED, YOU WERE ABLE TO DO A DIRECT LISTING HE HAD RAISED $1 MILLION. A LOT OF MONEY AS A PRIVATE COMPANY. ONE OF YOUR INVESTORS WITH SOFTBANK HE WENT TO ASK THEY OWNED 7% AND THERE HAVE BEEN MANY CONVERSATIONS IN THE LAST COUPLE YEARS AROUND SOFTBANK AND THE FACT THAT MUCH OF THEIR CAPITAL IS FROM THE SAUDI ARABIAN GOVERNMENT. SO I AM CURIOUS HOW YOU HAVE FELT ABOUT SLACK TAKING MONEY FROM SOFTBANK OVER THE YEARS?>> I THINK LIKE THE WAY THAT I FEEL TOWARDS THE ACTIONS OF THE SAUDI ARABIAN GOVERNMENT IS DEFINITELY YOU KNOW, IT IS THE ANNIVERSARY OF THE MURDER. LIKE, THAT IS A PART, YOU KNOW, OBVIOUSLY. HOW WE THINK ABOUT, WE ARE, IT IS A VERY HYPOTHETICAL QUESTION BECAUSE THE SITUATION TODAY IS WE ARE A PUBLIC COMPANY THAT IS VERY WELL-CAPITALIZED. IF WE WERE STILL A PRIVATE COMPANY AND WE NEEDED TO RAISE CAPITAL TODAY, RAISE A LARGE AMOUNT OF CAPITAL, THEN WE WOULD USE ALL THE INFORMATION THAT WE COULD WHEN ASSESSING AND DOING OUR DUE DILIGENCE. >>THAT IS TO SAY YOU MAY VERY WELL NOT HAVE TAKEN CAPITAL FROM SOFTBANK KNOWING WHAT YOU KNOW NOW. >>WE WOULD HAVE A LOT MORE INFORMATION TODAY. >>SIMILAR FOR YOU, YOU COINVEST WITH SOFTBANK. YOU ARE FIRST AN INVESTOR BEFORE THEM. I AM NOT SURE IF YOU COINVEST IT IN OTHER CASES, BUT HOW DOES THAT FEEL? HOW DO YOU FEEL ABOUT SOFTBANK AND ITS ROLE IN SILICON VALLEY VENTURE CAPITAL. >>ATTEND TO SAY THAT IF WE ARE LOOKING AT THE SAME DEAL AS SOFTBANK, ONE OF US IS LOOKING AT THE WRONG DEAL. THEY ARE TRADITIONALLY LOOKING AT EXTREMELY LARGE INVESTMENTS, HUNDRED MILLION IS THE MINIMUM YOU KNOW, 200, 300, 400 THEY ARE CAPITALIZING. I THINK SOME PEOPLE ARGUE CAPITALIZING BUSINESSES TO THE EXTENT IT IS NOT APPROPRIATE FOR US. WE ARE WRITING $30 MILLION CHECKS. WE THINK ABOUT VENTURE GROWTH AS A POST THAT THE EQUITY THEY ARE DOING. I HAVE GENERAL VIEWS ON RAISING THAT MUCH CAPITAL, NOT NECESSARILY SPECIFIC TO SOFTBANK. THERE ARE OTHER VEHICLES FOR RAISING THAT AMOUNT OF CAPITAL. YOU KNOW, I THINK WE ARE SEEING A BACKLASH AGAINST THAT RIGHT NOW. I THINK IT IS IMPORTANT TO UNDERSTAND YOUR BUSINESS AND UNDERSTAND HOW YOU WILL PUT THAT MONEY TO WORK BEFORE YOU RAISE IT AND I THINK THAT WE HAVE SEEN SOME LOOSENING OF THAT OVER THE PAST FEW YEARS THAT I FEEL AND SENSE THERE IS A TIGHTENING AROUND NOW. >>IF SOFTBANK WENT AWAY TODAY, DO YOU THINK THAT WOULD BE A NET POSITIVE OR A NEGATIVE ON THE ECOSYSTEM? FOR BOTH OF YOU?>>IT IS HARD TO IMAGINE THE SYSTEM WITHOUT SOFTBANK, SO THAT IS KIND OF HARD TO SAY.>> I WISH THEY WERE NOT WRITING QUITE SUCH BIG CHECK, THAT IS FOR SURE. IT DOES FEEL LIKE A LOT OF COMPANIES HAVE RAISED MORE CAPITAL THAN THEY KNOW WHAT TO DO WITH RESPONSIBLY. SO I CAN’T IMAGINE A WORLD WHERE THERE IS NO SOFTBANK, BUT I IMAGINE A WORLD WHERE POTENTIALLY SOFTBANK IS NOT SORT OF WRITING THE TYPES OF CHECKS THEY ARE WRITING TODAY. >>LAST QUESTION I WILL ASK, I AM CURIOUS WHAT KIND OF VALUE WOULD YOU SAY THEY ADDED TO SLACK?>>THE EXPERTISE IN THE MARKET IN JAPAN IS HUGE FOR US. THEY ARE THE KIND OF MARKET CATEGORY LEADERS IN UNDERSTANDING ENTERPRISE AND THAT MARKET, WHICH IS AN IMPORTANT MARKET FOR US. YOU KNOW, THAT WAS WHY THEY WERE SUCH A STRATEGIC INVESTOR FOR US. >>I DO WANT TO END BY TALKING QUICKLY ABOUT LITIGATION FATIGUE. BEFORE WE GET INTO IT, COULD YOU TELL US WHAT SLACK IS INTENDED TO BE USED FOR?>> INTENDED TO BE USED FOR WORK. WE HAVE WORK TEAMS AND COLLABORATION OF THE WORKPLACE. IS OF THE KIND OF INDUSTRY YOU ARE IN OR THE KIND OF ORAL THAT YOU FULFILL, IF YOU ARE IN A WORLD WHERE YOU COMMUNICATE WITH OTHER PEOPLE IN THE WORKPLACE CAN THEN SLACK IS THERE FOR THAT.>>MANY PEOPLE SAY SLACK HAS BEEN DETRIMENTAL TO WORK BECAUSE OF CONSTANT MEDICATIONS, SO SOME HAVE WRITTEN THAT IT HAS READ PRODUCTIVITY, WHICH IS MAYBE AN EXTREME OR HOT TAKE. MEGAN, YOU HAVE SAID YOU ARE SHAKING YOUR HEAD. YOU LIKE SLACK. HOW CAN WE MAKE, DO YOU THINK PEOPLE ARE USING SLACK WRONG?>>A LOT OF THE SENTIMENT COMES FROM THE RISE OF THE SMARTPHONE IN THE WORKPLACE. THAT HAS CHANGED HOW WE WORK OVER THE LAST DECADE. BECAUSE YOU HAVE THIS DEVICE WITH YOU ALL THE TIME, IT IS ALWAYS CONNECTED. IT IS EASY TO ALWAYS BE IN A STATE OF SEMI-WORKING WHERE YOU ARE NEVER USED TO BE AT WORK OR NOT NL YOU CAN ALWAYS BE IN THE WORKPLACE. AND I THINK THAT IS A GENERAL GLOBAL TREND. I THINK WE ARE VERY COGNIZANT OF THAT AND HAVE BUILT FEATURES AROUND THE PRODUCT TO TRUMPET THOSE CONTROLS IN THE HANDS OF THE USERS. SO THAT IS RINGS LIKE DO NOT DISTURB HOURS WHEN YOU KNOW YOU DO NOT WANT TO BE NOTIFIED OF THINGS OR BEING ABLE TO HOOK UP SLACK TO YOUR CALENDAR SO THAT WHEN YOU ARE IN A MEETING OR WHEN YOU ARE TRAVELING, YOUR STATUS IS AUTOMATICALLY THERE SO PEOPLE WILL KNOW IF YOU’RE AVAILABLE OR NOT, OR FINE- GRAINED NOTIFICATION PREFERENCES. THAT IS CONTROLLED BY THE USERS. I THINK YOU KNOW, THERE’S A SOCIAL ASPECT OR SOCIETAL ASPECT OF IT AND THEN THEY SAY WHAT CONTROLS CAN BE USED TO HAVE, YOU KNOW, TO BE ABLE TO CONTROL WHEN THEY WANT TO BE INTERRUPTED. >>POSSIBLE PEOPLE ARE NOT LEVERAGING THESE TOOLS THAT YOU HAVE? >>TO THE EXTENT THAT THAT IS TRUE, THAT IS OUR FAULT. WE ARE THE PROVIDERS OF THOSE TOOLS AND WE CAN ALWAYS DO A BETTER JOB OF EDUCATING OUR CUSTOMERS AROUND HOW WE THINK SLACK CAN BEST BE USED. >>I WILL SAY AS A MEDICALLY ACTIVE USER, ONE OF THE THINGS THAT SLACK HAS ENABLED IS THE REDUCTION IN USING OTHER DIFFERENT TYPES OF APPLICATIONS AND HAVING TO CONSTANTLY CHECK LOTS OF DIFFERENT TYPES OF APPS BECAUSE THE NATURE OF SLACK AS AN INTEGRATOR MEANS THAT I CAN GATHER INSIGHT AND DATA ON INFORMATION RIGHT WHERE I AM HAVING THE CONVERSATION WITH MY TEAM ABOUT THE VERY THINGS THAT WE WOULD HAVE TO BE GOING OFF AND PULLING FROM ELSEWHERE. I DO THINK THAT IS ANOTHER FUNCTIONALITY OF THE PLATFORM THAT HAS BEEN EXTREMELY POWERFUL FOR ME. >>I THINK THERE HAS BEEN A KIND OF EXPLOSION OF SOFTWARE CATEGORIES AND SOFTWARE IN THE WORKPLACE. THE WORK HAS BECOME FRAGMENTED AND IT IS PART OF SLACK, PART OF SLACK IS PULLING THAT ALL INTO ONE PLACE SO THAT ALL THE DIFFERENT WORK THAT HAPPENS ACROSS THE ORGANIZATION IS HERE. >>WE ARE SUDDENLY OUT OF TIME. THANK YOU BOTH SO MUCH. I HOPE YOU WILL COME BACK. >>THANK YOU.>>HERE WE GO, DO NOT MISS ME THIS TIME. THERE WE GO. ALL RIGHT. ON THE STAGE, 3:45, HOW TO BUILD A SUBSCRIPTION PRODUCT WITH COFOUNDER OF LOLA. YOU ARE A PARTNER OR RENTER VENTURES. FOUNDER AND CEO OF CUBIC OH. SURE TO CHECK IT OUT IF THAT IS OF INTEREST TO YOU. FOR NOW, WE ARE GOING TO BRING BACK OUT A FAMILIAR FACE AND ANOTHER FAMILIAR FACE AND A NEW FACE. IS WELCOME COFOUNDER AND CEO OF BREX, HENRIQUE . MICHELLE RAVENEL AND YOUR MODERATOR FOR THE THIRD TIME IN A ROW, K CLARK. >>HELLO, WELCOME, WE ARE HAPPY TO HAVE YOU HERE. TWO OF THE FASTEST GROWING STARTUPS, CONSTANTLY BROUGHT UP TO ME AMONGST FOUNDERS. I THINK YOU GUYS HAVE RAISED $500 MILLION IN VENTURE CAPITAL FUNDING. BUT THERE IS AN ELEPHANT IN THE ROOM I WANT TO ADDRESS BEFORE WE GET INTO THAT CONVERSATION AND THAT IS STRIKE. IF YOU GUYS PAY ATTENTION TO THE ECOSYSTEM, YOU HAVE NOTICED NEWS COMING OUT OF STRIPE. I WANT TO START WITH MICHELLE. STRIPE LAUNCHED SOMETHING CALLED STRIPE CAPITAL A COUPLE WEEKS AGO TO PROVIDE FINANCING AT A FLAT FEE TO THOUSANDS OF EXISTING CUSTOMERS. SO MAYBE YOU COULD EXPLAIN SORT OF HOW THAT DIFFERENTIATES EMPLOYER BANK AND WHAT YOU PROVIDE.>>OF COURSE. STRIPE HAS BEEN A GREAT PARTNER OF OURS AND WE KNEW THIS WAS COMING AND AT THE END OF THE DAY, LIKE SEQUOIA DID NOT GO OUT OF BUSINESS. SO I THINK IT IS LOSING SIGHT OF THE FACT THAT IT IS INCREDIBLY DIFFICULT FOR FOUNDERS TO RAISE MONEY FOR THEIR COMPANIES. SO MY BACKGROUND WAS I HAD STREP TO FIVE DIFFERENT COMPANIES BEFORE THIS AND ENDED UP SELLING ONE AND THEN GETTING ASKED TO JOIN THE CAST OF THE CANADIAN VERSION OF THE SHARK TANK TELEVISION SERIES. IT WAS THERE THAT I KEPT SEEING ALL THESE FOUNDERS GIVE SO MUCH OF THEIR COMPANIES A WAY TO BASICALLY GO BY FACEBOOK AND GOOGLE ADS. THE FIRST A DEAL WAS DONE ON THE SHOW WHEN I REMEMBERED TELLING A COMPANY THAT I WOULD GET THE 100 GRANT THAT THEY WERE WANTING TO GIVE 20% OF THE COMPANY UP FOR. I SAID LOOK, GIVE ME 5% OF YOUR REVENUE AND PAY ME BACK $106,000. SO THIS WAS NOT DEAD. I WAS NOT CHARGING MUCH FOR CAPITAL, BUT THERE WAS NO PERSONAL GUARANTEE SOMETHING WOULD GET SHARE. THERE WAS NO TIMELINE OR COMPOUNDING INTEREST. IT WAS TRULY LIKE IF YOU WERE USING MY CAPITAL TO GO BY ADS, I PAY BACK A LITTLE BIT FASTER BECAUSE THAT WAS A REVENUE GENERATING ACTIVITY. IF THE BUSINESS SLOWED IT DOWN, I WOULD WAIT IT OUT. I DO NOT THINK WE EVER EXPECTED THERE TO BE THIS MUCH DEMAND FOR OUR PRODUCT, LIKE WE WILL INVEST $1 BILLION INTO 2000 DIFFERENT COMPANIES THIS YEAR. AND I THINK THAT IS BECAUSE 40% OF THESE DOLLARS AND OUTGOING TO GOOGLE AND FACEBOOK, WHICH MEANS FOUNDERS ARE USING THE MOST EXPENSIVE CAPITAL, WHICH IS EQUITY TO DO SOMETHING THAT BY DEFINITION IS SCALABLE. I THINK THAT IS A DIFFERENTIATION. >>I WANT TO TALK ABOUT THAT. A COUPLE DAYS AFTER STRIPE LAUNCHED CAPITAL, THEY LAUNCHED THE CORPORATE CARD, WHICH IS ACTUALLY PRETTY SIMILAR TO WHAT BREX OFFERS, WHICH IS A CREDIT CARD FOR STARTUPS. FIRST QUESTION FOR YOU IS STRIPE COPY YOU?>>WE KNEW IT WAS COMING FOR A WILD. BETWEEN VENTURE CAPITALIST, WE ALWAYS HEAR THIS STUFF. THE SIMILARITY WAS QUITE SURPRISING. I THINK THAT, YOU KNOW, FOR US, YOU KNOW, I LIKE TO SAY THIS, THERE ARE 44 BANKS IN THE U.S. THAT ARE WORTH OVER $10 MILLION. SO IT IS DIFFERENT IN COMPANIES THAT HAVE WORKED EFFECTS. FINANCIAL SERVICES IS, YOU KNOW, NON-WINNER TAKES ALL INDUSTRIES. SO I THINK THEY CAN BE SUCCESSFUL. HE CAN BE SUCCESSFUL AND YOU KNOW, CHASE IS GOING TO BE THE ONES THAT WILL LOSE THE MOST SHARE. >>ARE YOU CONCERNED? STRIPE IS A $30 BILLION CUSTOMER. THEY HAVE BEEN AROUND YEARS MORE THAN BREX. CERTAINLY A BIG THREAT. >>EVERY TIME AN INCUMBENT LAUNCHES A PRODUCT, YOU KNOW, THE INSURGENT HAS TO COMPETE AND YOU KNOW, FOR THEM, I INC. IT IS THE ACE PRODUCT AND GLOBAL BATTLE. ALL THESE GUYS, FOR US, THIS IS OUR ENTIRE LIFE. WE WILL FOCUS ALL OUR ATTENTION ON TWO PRODUCTS. YOU KNOW, WE THINK WE CAN DO A BETTER JOB. >>ONLY OVERSEEING COMPETITION STRIKE, WE SEE A LOT OF STARTUPS. I THINK SINCE I HAVE BEEN COVERING CLEAR BANK, I HAVE NOTICED, JUST THE OTHER DAY, A $2 MILLION AROUND WHICH I THINK PROVIDES CAPITAL HAD TO DC BRANDS. THESE COMPANIES ARE TRYING TO RAISE THE SEAT AND THEY ARE LOSING SO MUCH EQUITY. DID YOU EXPECT TO SEE SO MUCH HAPPENING JUST IN SUCH A SHORT PERIOD? >>YEAH, I MEAN, THE SPACE HAS BLOWN UP I THINK THE CHALLENGE HAS ALWAYS EXISTED FOR FOUNDERS. I THINK ONE OF THE THINGS WE ARE NOT TALKING ABOUT, AND WE HAVE A LOT OF ADVANTAGES THAT I THINK, DATA HAS TOLD US SO MANY INTERESTING STORIES. WE ú18 TIMES MORE FEMALE FOUNDERS BECAUSE WE ARE LITERALLY LOOKING AT ECONOMICS AND DATA IN FINDING THAT. THE OTHER THING I FIND CRAZY IS THAT 80% OF DOLLARS ARE DEPLOYED IN FOUR STATES IN AMERICA. CALIFORNIA, NEW YORK, MASSACHUSETTS AND TEXAS. AS WE HAVE DEPLOYED IN 43 DIFFERENT STATES. I THINK ULTIMATELY WHAT IS HAPPENING IS THAT NO . >>AND ULTIMATELY I THINK THAT’S PROBABLY REACHED A PEAK AND WHAT’S DRIVEN THAT IS ACQUISITION COSTS WHICH I DON’T THINK PEOPLE ARE FULLY APPRECIATING IS THAT TECHNOLOGY USED TO BE A HUGE MODE. IT WAS REALLY DIFFICULT TO BUILD A WEBSITE AND SET UP SERVERS AND DO ALL THAT, BUT NOW THAT THAT’S SO SIMPLE IT’S REALLY ABOUT ACQUIRING AS MANY USERS AS POSSIBLE WHICH LED TO BIGGER AND BIGGER ROUNDS WHICH LED TO MORE DILUTIONS FOR FOUNDERS. >>YOU BOTH RAISED QUITE A BIT OF CAPITAL. IN TOTAL YOU’VE RAISED $380 MILLION. YOU’VE RAISED A LOT OF MONEY. AT THIS POINT HOW MUCH DO YOU OWN? >>WE DON’T DISCLOSE OWNERSHIP PERCENTAGE, BUT WE DEFINITELY SUFFER DILUTION OVER TIME. I THINK WE’RE ALWAYS FORTUNATE BY BEING SECOND TIME FOUNDERS IN A BIG MARKET AND TRUST INVESTORS TO RESIST DILUTION OVER TIME, BUT WE TALKED TO FOUNDER AND THEY HAVE EXACTLY THIS PROBLEM. I’VE BEEN IN BUSINESS FOUR YEARS AND HAVE 3% OF MY COMPANY. I DON’T KNOW WHAT TO DO. >>ONE CAN ASSUME JUST BECAUSE YOU’VE RAISED SO MUCH SO QUICKLY YOU CAN SUFFER FROM SOME OF THAT. ARE YOU HAPPY WITH THE AMOUNT THAT YOU OWN? >>I’M VERY HAPPY. >>THAT’S GOOD. WOULD YOU SAY THAT VENTURE CAPITAL IS BROKEN? >>THE WAY THAT I SEE IT IS THAT — AND WE GET THIS QUESTION ALL THE TIME. WE’RE LIKE ARE YOU TRYING TO DISRUPT VC AND PART OF THAT’S TRUE, BUT I THINK I WOULD LOOK AT USES OF CAPITAL LIKE VC USED TO BE TRUE RISK CAPITAL, RIGHT? YOU WANT TO GO SOLVE A CRAZY DISEASE OR HIGHER 100 DATA SCIENTISTS TO DO SOMETHING LIKE TRUE 0-1 RISK WHERE THIS WHOLE THING COULD BE WORTH NOTHING AT THE END OF THE DAY. THAT’S EQUITY LEVEL RISK, BUT COME ON, IF YOU’RE INVESTIGATION $1 IN FACEBOOK AND KNOW YOU’RE GETTING $4 IN SALES OUT, THAT’S NOT RISK FUNDED ANYMORE. ULTIMATELY I THINK A LOT OF VCs SAW THAT AS WELL IS THAT THERE CAN BE, YOU KNOW, DIFFERENT ASSET CLASSES DEPENDING ON WHAT YOUR USE OF FUNDS IS. >>BUT WHAT ABOUT THIS DIVERSITY ISSUE? YOU BROUGHT IT UP ONCE. YOU’VE ALREADY FUNDED SO MANY WOMEN USING THIS MODEL. >>YES. >>AND PEOPLE FROM STATES THAT ARE RELATIVELY UNTOUCHED BY VENTURE CAPITAL FUNDING. >>RIGHT. >>VENTURE CAPITAL IS A HUMAN TO HUMAN BUSINESS. IT IS ME GETTING TO KNOW YOU, UNDERSTANDING WHAT IS INCREDIBLE ABOUT YOUR BUSINESS AND TAKING THAT AND HUMAN HUMAN BUSINESSES CAN ONLY EXPAND SO QUICKLY. IT’S KIND OF BIZARRE BECAUSE THIS IS THE ONLY REASON WE’RE IN TECHNOLOGY BECAUSE WE GET THIS INSTANT SCALE THAT COMES WITH BEING ABLE TO DO. SO WHEN WE BUILT OUR SYSTEM, WE HAD TO USE DATA SCIENCE AND AT TO EFFECTIVELY DO WHAT VCs WERE DOING ON THE LTV TO CAC AND ECONOMIC BASIS BUT DO THAT TO SCALE. THERE WERE NINE STATES LAST YEAR THAT HAD ZERO COMPANIES THAT GOT VENTURE CAPITAL FUNDING. THIS IS AMERICA. THE LOGICAL CONCLUSION IS THERE WAS NO GOOD ENTREPRENEURS IN THOSE NINE STATES, IT’S THAT THE SYSTEM HADN’T REACHED THAT FAR. I THINK WE CAN BE PART OF THAT SOLUTION AND WE’RE BOTH SERVING A OF THESE S AND Bs WHICH ARE HALF OF THE GDPs IN AMERICA. WE’VE GOT A LOT OF GROUND TO COVER. >>I WANT TO TALK ABOUT BREX GOING THROUGH VICOMINATOR, SO 2 1/2 YEARS AGO YOU ENTERED Y COMBINATOR AS A VIRTUAL REALITY START UP? >>YES. >>WHAT KIND OF VR SETUP WERE YOU HOPING TO BUILD AND YOU WERE LIKE OH, I’LL DO A FIN TECH INSTEAD? >>WE HAD A PAYMENT PROCESSOR IN BRAZIL BEFORE AND WE SOLD THAT COMPANY, MOVED TO THE WEST AND WE WERE TIRED OF FINTECH. WE WERE TRAUMATIZED BY THE REGULATION, THE BIG BANKS, EVERYTHING WAS SO HARD AND WE GOT TO SILICON VALLEY AND WE’RE LIKE WE’RE ON THE BLEEDING EDGE OF TECHNOLOGY. LET’S BUILD SOMETHING VERY BLEEDING EDGE AND THAT WAS YAR AT THE TIME. A LITTLE BIT IN WE WERE NO, THIS IS TOO HARD. LET’S GO BACK TO FIN TEXTING WHICH IS A TYPE OF HARD WE ALREADY KNOW. >>THE DEVIL YOU KNOW VERSUS THE DEVIL YOU DON’T. >>EXACTLY. >>THE STORY OF THE FOUNDATION CAN ACTUALLY EVOLVE A LITTLE BIT BECAUSE THIS PRODUCT WE ANNOUNCED TODAY WAS ACTUALLY THE FIRST PRODUCT WE THOUGHT ABOUT DOING. >>OKAY. >>WEAPON THOUGHT — WE THOUGHT ABOUT IT. IT WASN’T CALLED BREG AT THAT TIME. THE STARTUP TO HELP PEOPLE KEEP THEIR MONEY AND MAKE PAYMENTS, BUT AT THE TIME IT WAS LIKE WHO IS GOING TO GIVE US THEIR MONEY IF THEY’VE NEVER HEARD OF THIS THING? IT MAKES NO SENSE. NO ONE IS GOING TO TRUST US. >>PROBABLY GOOD THINKING. >>THAT’S WHY WE DECIDED TO GO THE STRATEGY OF BUILDING A CHARGE CARD BEFORE IN WHICH WE’RE BUILDING A BRAND BY GIVING PEOPLE MONEY AND THEN LATER ON WE COULD ACTUALLY, YOU KNOW, HELP THEM INTAKE THEIR MONEY. >>MICHELLE, YOUR CO-FOUNDER ANDREW, AT WHAT POINT DID YOU REALIZE YOU WERE SO PASSIONATE ABOUT FOUNDER EQUITY THAT YOU WANTED TO BUILD A BUSINESS AROUND IT? >>THE FUNNIEST PART IS ME AND MY CO-FOUNDER ANDREW WERE TOTALLY DIFFERENT ON THIS ISSUE. HE HAD RAISED A TON OF VENTURE MONEY FOR THREE DIFFERENT COMPANIES BEFORE. I HAD BOOT STRAPPED THREE DIFFERENT COMPANIES BEFORE AND SO HE KIND OF UNDERSTOOD LIKE HOW HARD IT WAS. HE’S LIKE LOOK, I BASICALLY GOT HIRED. I HAD TO SPEND THREE TO SIX MONTHS ON THE ROAD. EVERY TIME A FOUNDER RAISES MONEY EVEN IF YOU HAVE THE BEST COMPANY, YOU DO 100 MEETINGS AND GET 90 NO’S FROM INCREDIBLY INTELLIGENT PEOPLE LIKE EVERY SINGLE ONE OF THOSE HURTS IN A DIFFERENT WAY. SO I DON’T THINK ANY OF US GO INTO BUSINESS I MEAN LIKE YOU WERE THERE BEING LIKE LET’S SOLVE THE PROBLEM THAT EVERY FOUNDER HAS. I’M SURE YOU DIDN’T START BREX TO RAISE A BUNCH OF MONEY AND DO 1,000 INVESTOR MEETINGS. IF WE CAN MAKE THAT A LITTLE EASIER FOR EVERY FOUNDER, WE CAN ACTUALLY EMPOWER WAY MORE PEOPLE TO BE FOUNDERS BECAUSE IT’S STILL ONE OF THE BIGGEST GAPS IS HOW DO YOU GET ENOUGH CAPITAL TO GET BIG? >>SINCE YOU BOTH HAVE GROWN SO QUICKLY, AS HUMAN BEINGS WHAT HAS BEEN THE MOST DIFFICULT PART FOR YOU IN BUILDING THESE FAST GROWING FAST SCALING BUSINESSES? >>I THINK FOR ME THE MOST DIFFICULT PART IS PROBABLY — IT’S A MIX BETWEEN I WOULD SAY THE PRESSURE AND THE PEOPLE ASPECT. WHEN WE RAISE THESE REALLY HIGH VALUATIONS, EVERYONE IS LIKE OH, WOW, YOU RAISED THESE SUPER HIGH VALUATIONS, BUT THE WAY IT KIND OF FEELS IS LIKE OH, WOW, NOW THIS COMPANY HAS TO DO AT LEAST $10 BILLION BEFORE ANYONE IS HAPPY. >>YEAH. >>SO I THINK LIKE THE HANDLING KIND OF THE PRESSURE AND EXPECTATIONS FROM, YOU KNOW, EVERYONE IS QUITE PERSONALLY TOUGH. >>YEAH. >>AND I THINK FROM THE OUTSIDE IT SEEMS LIKE YOU’RE ON TOP OF THE WORLD, BUT IN THERE WHEN EVERYTHING IS BREAKING AND ALL OF YOUR EMPLOYEES HAVE A LOT OF EXPECTATIONS ON YOU, IT’S A LOT OF GRIND. >>YEAH. I MEAN THE FOUNDER JOURNEY IS LIKE AT ITS BEST INCREDIBLY MESSY. THERE IS I ALWAYS SAY THAT, YOU KNOW, IN ANY GIVEN WEEK THERE’S GOING TO BE TWO THINGS THAT BLOW UP AND YOU’LL HAVE NO IDEA WHAT THOSE ARE GOING TO BE AND IT’S GOING TO BE LIKE HOW DO I FIX THESE NOW? I SHARE A LOT OF THAT. THERE’S A LOT OF EXPECTATIONS. THERE’S A LOT OF PRESSURE ON KNOWING WHAT’S GOING TO HAPPEN IN THE ECONOMY, WHAT’S GOING TO HAPPEN WITH EVERY COMPETITOR THAT ULTIMATELY ROLLS UP TO YOU AND I THINK PROBABLY WHAT’S HARDEST TO BE SCALED FOR ME IS I’VE ALWAYS RUN LITTLE COMPANIES WHERE I HAVE REALLY DEAL RELATIONSHIPS WITH THE PEOPLE I WORK WITH. AS YOU SCALE WE ADDED 100 PEOPLE LAST QUARTER. SO THERE’S LESS AND LESS OF THAT THAT YOU GET TO HAVE. SO WE GOT TO FIGURE OUT NEW SYSTEMS TO COMMUNICATE AND CREATE THOSE RELATIONSHIPS, BUT IT’S NOT EASY. >>SO IN THE TWO YEARS THAT BREG — BREX HAS BEEN AROUND THERE HAS BEEN THE TALK OF A THREAT OF A DOWNTURN. >>WE TALK ABOUT IT. ONE TWEET AWAY, ONE SOMETHING AWAY, WE COULD ALL SNEEZE, RIGHT? >>YEAH. OBVIOUSLY YOU GUYS DO RELY ON STARTUPS EXISTING IN THE FIRST PLACE AND RAISING AND SPENDING MONEY. SO HOW DO YOUR BUSINESS MODELS WORK IN A RECESSION? >>I CAN TAKE IT FIRST. IN OUR CASE IF SOMEONE ACTUALLY TELLS YOU THEY KNOW EXACTLY HOW IT’S GOING TO BE IN A RECESSION, THEY’RE PROBABLY LYING BECAUSE THOSE RECESSIONS ARE COMPLETELY DIFFERENT BASED ON HOW YOU LOOK AT THEM. THEY HAVE VERY, VERY DIFFERENT ASPECTS. SO THERE’S ONLY SO MUCH YOU COULD DO. SO WE HAVE BASICALLY THREE THINGS. ONE IS OUR UNDERWRITING MODEL IS REALTIME. WE’RE REWRITING EVERY CUSTOMER EVERY DAY. THE WAY RECESSIONS HAPPEN, THEY’RE NOT, YOU KNOW, HEY, TODAY’S A RECESSION. THE STOCK MARKET MAY GO UP AND DOWN, BUT THE SPENDING AND DEFAULTS AND ALL THE THINGS THAT ACTUALLY IMPACT OUR BUSINESS ARE MORE GRADUAL OVER TIME. SO I THINK THAT’S — THE FACT THAT OUR UNDERWRITING MODEL IS REWRIT REWRITING EVERY CUSTOMER EVERY DAY IS A SIGNIFICANT IMPACT THAT WE HAVE. A LOT OF PEOPLE ASK US OH, WHY DID YOU RAISE THAT MUCH MONEY? WE DON’T BURN THAT MUCH BECAUSE WE HAVE LIKE A GOOD BUSINESS MODEL, BUT WE ALWAYS HAVE A LOT OF MONEY IN THE BANK IN CASE SOMEDAY THIS RECESSION HITS. >>YOU’RE BUILDING A WAR CHEST. >>WE HAVE IT THERE, RIGHT? I THINK THE THIRD THING IS BEING VERY MINDFUL IT MAY HAPPEN AND HAVING YOUR PLAN OKAY, IF THIS HAPPENS, WHAT WILL WE DO AND HAVE IT ALL PLANNED OUT. >>YEAH. I THINK LIKE I SHARE A LOT OF THE SAME VIEWS. I THINK THERE’S TWO THINGS THAT ARE REALLY NUKE ABOUT WHERE WE ARE IN THE MARKET TODAY. WE’VE BEEN IN THE LONGEST BULL RUN IN A LONG TIME. THE SECOND CRITICAL FACT IS EMPLOYMENT IS AT AN ALL TIME HIGH AND IT WOULD BE HIGHLY UNUSUAL FOR US TO GET A CONSUMER LED RECESSION WHEN EMPLOYMENT ABBEY AT AN ALL TIME HIGH. WHAT’S PROBABLY IS GOING TO HAPPEN WITH PEOPLE COMING OUT OF THE WOODWORK WE DIDN’T THINK WOULD HAVE JOBS AND THESE NUMBERS KEEP GOING UP, WHAT COULD HAPPEN, EQUITIES TAKE A TUMBLE WITH AN INVESTOR LED RECESSION AND ULTIMATELY THAT COULD MEAN THE VCs PULL BACK. SO WE THINK THERE WILL BE WAY MORE GREAT COMPANIES THAT WE CAN FUND IF SOME OF THE VCs STOP WRITING CHECKS. THE SECOND THING I THINK A LOT ABOUT AND THE CF TO OF GOOGLE DURING 2008 WAS PRETTY CLEAR. PRICES DROPPED BY 20 TO 30%. SO ULTIMATELY IF YOU HAVE CAPITAL AND KNOW WHAT YOU’RE DOING AND HOW THOSE CONDITIONS HAPPEN, I THINK THERE’S A SITUATION WHERE SOME OF THESE COMPANIES COULD DO QUITE WELL. AND WE SHARED THE SAME VIEW. OBVIOUSLY WE RAISED A LOT OF CAPITAL THIS YEAR. >>RIGHT. >>BECAUSE IF YOU HAVE CAPITAL IN A RECESSION, I THINK THAT THERE CAN BE SOME REALLY GOOD COMPANIES WE CAN BACK. >>ARE YOU HEADING BACK OUT TO THE MARKET TO RAISE SOME MORE MONEY? >>WE TALKED ABOUT THIS IN A PANEL THAT WE DID AT THE OFFICE. I THINK LIKE GROVE STAGE COMPANIES, THEY’RE ALWAYS RAISING MONEY OF SOME SORT. SO, YOU KNOW, IF THE TIME COMES WITH THE RIGHT INVESTOR IS NOT WHEN WE NEED THE MORE, IT’S MORE WHEN IT’S OPPORTUNISTIC. >>SO YOU ARE RAISING, THEN? >>WE’RE NOT ACTIVELY GOING OUT AND RAISING MONEY, BUT WE ALWAYS KEEP IN TOUCH WITH A LOT OF INVESTORS. >>FAIR ENOUGH. AFTER STRIPE ANNOUNCED THEIR NEWS THEY ANNOUNCED A HUGE CAPITAL INFUSION. I THINK OFTEN WE SEE COMPANIES LAUNCH BIG NEW PRODUCTS AND THAT LAUNCHES WHOLE FRESH NEW ROUNDS. ARE YOU ALSO APPROACHED BY COMPANIES LOOKING TO INQUIRE BREX? >>ALL THE TIME. WE ALWAYS GET THE HEAD OF CORPORATE DEVELOPMENT FROM SOME BIG BANK OR SOMETHING. >>WANTS TO GRAB COFFEE. >>YEAH. FOR US WE’RE PRETTY CLEAR WE’RE NEVER GOING TO SELL THIS COMPANY. THE REASON FOR THAT IS WE THINK WE CAN HAVE SO BIG OF AN IMPACT AND THE ENERGY IS JUST RIPE FOR DISRUPTION AND I PERSONALLY DON’T LIKE STARTING COMPANIES. IT’S REALLY HARD LIKE, YOU KNOW HOW IT IS. IT’S VERY GRINDING AND NO ONE WANTS TO WORK WITH YOU OR GIVE YOU MONEY. YOU GET 1,000 NO’S. IT KIND OF SUCKS. SO I LIKE RUNNING COMPANIES. BREX IS DOING REALLY WELL. SO I WANT TO KEEP RUNNING IT IN A LONG TIME. >>MAYBE IN SIX OR SEVEN YEARS WE’LL SEE A BREX IPO? >>MAYBE. >>WHAT’S THE LONG VISION FOR CLEAR BANK? >>IT’S THE SAME THING. IT’S SUCH A GRIND AND WE JUST FOUND SUCH GOOD PRODUCT MARKET FIT. I MEAN I HAVE WORKED ON SO MANY PROJECTS WITH SO MUCH EFFORT THAT DIDN’T WORK FOR SO LONG IN MY CAREER, WHEN YOU HAVE SOMETHING THAT’S REALLY WORKING, YOU’RE LIKE OKAY, LET’S TAKE THIS ALL THE WAY TO THE MOON. SO I THINK WE’RE JUST GOING TO KEEP TRYING TO BE INNOVATIVE AND GROW THIS THING OUT. I THINK THERE’S A LOT OF FOUNDERS THAT COULD USE THE PRODUCT. >>ANDREW, YOUR CO-FOUNDER DID COMPARE CLEAR BANK TO SOFT BANK AT ONE POINT. IN AN INTERVIEW WITH ME HE SAID WE WANT TO RAISE BILLIONS AND BILLIONS. WE WANT TO BE LIKE SOFT BANK. IS THAT REALLY WHAT YOU WANT TO BE LIKE? >>NO. I THINK HE WAS SAYING SOFT BANK HAS TRANSFORMED THESE GROWTH ROUNDS AND CERTAINLY IN MANY WAYS REPLACED WHAT WAS EARLIER STAGED IPOs. IN OUR MINDS LIKE THERE IS JUST HALF OF THE GDP OF AMERICA IS APPROACH DO USED PRODUCED ON SNBs. BANKS DIDN’T TAKE PERSONAL GUARANTIES TO BE MEAN. THEY DIDN’T HAVE THE TOOLS AND DATA SETS AND AUTOMATION TO UNDERWRITE THIS IN A WAY THAT ACTUALLY MADE SENSE. SO IF WE’VE CRACKED THAT NUT, WE THINK WE HAVE A MASSIVE MARKET NOT ONLY IN AMERICA, BUT GLOBALLY BECAUSE IF YOU THINK IT’S HARD TO GET FUNDING HERE IT, IS WAY HARDER — YOU KNOW THIS — EVERYWHERE ELSE ON THE PLANET. >>YEAH. BRAZIL IS REALLY HARD. >>ONE THING I WANT TO ASK, WE’RE ALMOST OUT OF TIME, BUT YOU MENTIONED SNBs. BREX RECENTLY OPENED A RESTAURANT. I’M TOLD IT WAS BECAUSE YOU WANTED TO UNDERSTAND BETTER HOW SNBs OPERATE? IS THAT REALLY THE THINKING BEHIND OPENING A RESTAURANT? HELP US UNDERSTAND WHY YOU THOUGHT THAT WAS SOMETHING YOU NEEDED TO DO. >>I THINK THE RESTAURANT HAD MULTIPLE REASONS. I THINK THE FIRST REASON WAS WE HAVE OUR MEMBERS LOUNGE RIGHT ON TOP OF IT. >>YEAH. >>YOU KNOW, WE WANTED TO DO SOMETHING FOR THAT COMMUNITY OF SOUTH PARK AND THAT WAS A RESTAURANT EVERYONE LOVED, BUT IT HAPPENS TO BE IN THE VENTURE CAPITAL NERVE SYSTEM OF SAN FRANCISCO WHICH IS SUPER RELEVANT TO OUR BUSINESS, RIGHT? SO WHEN WE WERE FOUNDERS, WE WENT TO SOUTH PARK ALL THE TIME AND LIKE HAD MEETINGS THERE ALL THE TIME. SO IT MADE A LOT OF BUSINESS SENSE AS WELL AND I THINK A BONUS IS THAT AS WE EXPAND TO MORE VERTICALS, WE GET TO UNDERSTAND HOW AN SNB OPERATES. SO WE CAN SEE WHAT ARE THE STRUGGLES AND ISSUES AND WE GET TO LEARN FROM IT. >>IS IT FAIR TO SAY PERHAPS YOU’VE RAISED SO MUCH CAPITAL, YOU’RE KIND OF THROWING IT AROUND AND ABLE TO OPEN A RESTAURANT? THAT’S CERTAINLY OUT OF THE NORM FOR A FINTECH STARTUP? >>A LOT OF TIMES PEOPLE ARE LIKE CREDIT CARD JUST FOR STARTUPS. THEY GO OUT OF BUSINESS. THAT’S SO DUMB AND THEN OH, BILLBOARDS. THEY’RE BLOWING MONEY. THAT’S SO DUMB. >>SO WE’RE GOING TO SEE A BUNCH OF STARTUPS OPENING RESTAURANTS? >>I THINK PEOPLE WILL SEE THE RESTAURANT IS ALWAYS BLOWING MONEY AS THEY THOUGHT THE OTHER THINGS WERE AS WELL. >>THANK YOU BOTH SO MUCH. IT WAS A GREAT CONVERSATION. >>THANK YOU SO MUCH. >>THANK YOU. >>AWESOME JOB. >>ON THE Q AND A STAGE AT 4:15 WE’LL HAVE GETTING INTO FIN TECH WITH ENRIQUE AND MICHELLE ROMANO AND ANGELA STRANGE. IF YOU HAVE NOT GOTTEN ENOUGH OF ENRIQUE, THAT’S WHERE YOU NEED TO GO. IN THE MEANTIME WE ARE GOING TO BE TALKING ABOUT BEEF OR NOT BEEF. PLEASE WELCOME TO THE STAGE FROM IMPOSSIBLE FOODS FOUNDER AND CEO PATRICK BROWN AND YOUR MODERATOR JOHN SHEBER. WARM WELCOME, PLEASE. >>THANK YOU FOR STICKING AROUND. THERE ARE ANY NUMBER OF THINGS WE CAN TALK ABOUT, BUT I THINK THE FIRST THING TO TALK ABOUT IS REALLY WHY YOU’RE DOING THIS. YOU HAD AN INCREDIBLY IMPRESSIVE CAREER AS A GENETICIST AND A PROFESSOR AT STANFORD. NOW YOU’RE TAKING ON THE MEAT INDUSTRY. WHY? >>PRETTY SIMPLE REASON. ABOUT 10 YEARS AGO WHEN I WAS TRYING TO FIGURE OUT WHAT I COULD DO NEXT THAT WOULD HAVE THE BIGGEST POSITIVE IMPACT ON THE WORLD, I VERY QUICKLY REALIZED THAT BY FAR THE MOST DESTRUCTIVE TECHNOLOGY AND THE MOST DESTRUCTIVE INDUSTRY ON EARTH IS THE USE OF ANIMALS AS A FOOD PRODUCTION TECHNOLOGY AND I WAS IN RETROSPECT KIND OF EMBARRASSED I DIDN’T ALREADY REALIZE THIS, BUT AT THE TIME THE U.N. ENVIRONMENTAL PROGRAM HAD PUBLISHED A MONOGRAPH THAT CAME TO THAT CONCLUSION AND AT THIS POINT I WOULD SAY THERE’S PROBABLY A SIGNIFICANT MAJORITY OF ALL ENVIRONMENTAL SCIENTISTS WOULD SAY THE EXACT SAME THING. THIS IS BY FAR THE MOST DESTRUCTIVE TECHNOLOGY ON EARTH. HUGE SOURCE OF GREENHOUSE GAS EMISSIONS, BIGGEST USER OF WATER OF ANY INDUSTRY ON EARTH, BIGGEST POLLUTER OF WATER BY FAR OF ANY INDUSTRY ON EARTH, OCCUPIES A LAND FOOTPRINT THAT’S APPROXIMATELY HALF OF EARTH’S ENTIRE LAND AREA, BIGGER THAN NORTH AMERICA, SOUTH AMERICA, AUSTRALIA AND EUROPE COMBINED, LAND ACTIVELY IN USE EVERY YEAR RAISING ANIMALS FOR FOOD AT A TREMENDOUS COST TO BIODIVERSITY. IT IS OVERWHELMINGLY THE BIGGEST AND VIRTUALLY THE ONLY DRIVER OF A CATASTROPHIC MELTDOWN BIODIVERSITY THAT WE’RE EXPERIENCING RIGHT NOW WHERE THE TOTAL NUMBER OF LIVING INDIVIDUALS OF MA MAMMALSS, BIRDS, REPTILES, PROBABLY 40% TOTAL WILD ANIMALS LIVING ON EARTH IMPAIRED TO 20 YEARS AGO AND IT’S VERY CLEAR IT’S VIRTUALLY ENTIRELY DUE TO THE USE OF ANIMALS IN THE FOOD SYSTEM. I JUST WANT TO SAY ONE MORE THING. THE PROBLEM IS PEOPLE ARE NOT GOING TO STOP WANTING TO EAT THESE FOODS. THAT MEANT YOU HAD TO FIGURE OUT A WAY TO MAKE FOODS THAT DELIVERED EVERYTHING THOSE CONSUMERS WANT. >>THERE WAS AN ARTICLE IN THE NEW YORK TIMES TODAY WHERE SOMEONE WAS TALKING ABOUT THE MEAT INDUSTRY AND AN EXPERT WAS QUOTED SAYING IF EVERYONE GAVE UP HAMBURGERS TOMORROW, THE SAME NUMBER OF COWS WOULD STILLING RAISED AND FED. SO WHY START WITH GROUND BEEF IF GROUND BEEF REALLY ISN’T SORT OF THE DRIVER OF WHAT PEOPLE ARE ACTUALLY SORT OF CONSUMING MEAT FOR? >>WELL, I DIDN’T READ THE ARTICLE, BUT I’M SURPRISED BY THAT CONCLUSION BECAUSE MORE THAN HALF OF ALL THE BEEF PRODUCED IN THE U.S. TODAY IS SOLD AS GROUND BEEF AND ABOUT 25% OF THE BEEF PRODUCED IN THE U.S. CAN’T BE SOLD IN ANY FORM OTHER THAN GROUND BEEF BECAUSE IT’S BASICALLY TOO UNAPPEALING AS A WHOLE CUT. >>RIGHT. >>SO, IN FACT, GROUND BEEF SALES ARE A VERY IMPORTANT COMPONENT OF THE BUSINESS MODEL OF THE BEEF INDUSTRY AND THE GOAL THAT WE HAVE IS TO REDUCE AND ELIMINATE THE ECONOMIC INCENTIVE FOR COVERING THE ENTIRE FRICKING PLANET WITH COWS. RIGHT NOW THERE’S 10 TIMES MORE COW BIOMASS ON EARTH THAN THE TOTAL BIOMASS OF EVERY WILD LAND VERTEBRATE THAT’S STILL ALIVE. SO THIS IS WHAT WE’RE DOING RIGHT NOW. OUR GOAL IS TO BASICALLY ELIMINATE THE ECONOMIC INCENTIVE TO DO THAT ANYMORE, TO KEEP TEARING DOWN THE AMAZON TO CREATE MORE ROOM FOR GROWING COWS BECAUSE DEMAND GOES UP. THE EARTH’S NOT GETTING BIGGER. THE ONLY WAY TO PRODUCE MORE COWS IS TO DEEP FOREST THE AMAZON. SO THAT SMOKE YOU SEE COMING OUT OF THE AMAZON IS THE SECONDHAND SMOKE FROM YOUR BURGER. I THINK THIS IS A VERY GOOD STRATEGY AND I WOULD EVEN SAY BECAUSE THE BEEF INDUSTRY HAS PRETTY CRAPPY ECONOMICS, I DON’T THINK IT REQUIRES A HUGE AMOUNT OF DISRUPTION TO THEIR BUSINESS AND TO THEIR ECONOMICS TO SIGNIFICANTLY REDUCE THE INCENTIVE TO KEEP GROWING THE COW HERD SIZE. >>BUT THE ISSUE THERE IS THAT GROUND BEEF IS VERY, VERY CHEAP AS WELL. CAN YOU COMPETE ON A COST BASIS WITH THIS STUFF AT SOME POINT AND HOW DO YOU DO THAT? >>OH, ABSOLUTELY, ABSOLUTELY. I THINK THE STARTING POINT IS TO REALIZE THAT THERE’S A STRUCTURAL ADVANTAGE TO THE WAY THAT WE’RE DOING THIS AND IT’S REPRESENTED IN THE FACT THAT FOR US TO PRODUCE A BURGER AND WE HAVE PUBLICLY AVAILABLE AUDIT ON THIS REQUIRES LOW SINGLE DIGIT FRACTION OF THE LAND AREA LIKE CONSIDERABLY LESS THAN 1/25 OF THE LAND AREA TO PRODUCE A COW, ABOUT 1/8 THE WATER IN PUT, 1/12 THE FERTILIZER INPUT AND BECAUSE YOU NEED SO MUCH LAND AND WATER AND RESOURCES, ALSO LESS LABOR INPUT. THAT MEANS THE FUNDAMENTAL ECONOMICS ARE VASTLY SUPERIOR. THE ONLY THING WE DON’T HAVE THAT THEY HAVE IS SCALE AND A PREEXISTING INFRASTRUCTURE, BUT AT SCALE THERE’S JUST NO QUESTION. >>THAT’S A PRETTY BIG BENEFIT FOR THE INDUSTRY. HOW MUCH DOES IT COST YOU TO MAKE AN GROUND IMPOSSIBLE MEAT VERSUS THE SAME SIZE OF BURGER MEAT? >>WELL, I CAN’T GIVE YOU THE EXACT DATA BECAUSE IT’S KIND OF CONFIDENTIAL INFORMATION. I WOULD, BUT MY CFO WOULD KILL ME. I CAN SAY BASICALLY OUR PRODUCT IS BEING SOLD IN LOTS OF MASS MARKETPLACES, BURGER KING, WHITE CASTLE, TONS OF THESEBURG KINGS THAT SELL AT A PRICE AFFORDABLE TO CONSUMERS. IT’S GREAT FOR THEIR BUSINESS. IT’S HUGELY PROFITABLE FOR THEM AND WE AREN’T LOSING MONEY ON THOSE SALES EITHER. SO YOU CAN DRAW YOUR OWN CONCLUSIONS AND WE’RE AT A VERY EARLY STAGE. THREE YEARS AGO WE WERE OPERATING OUT OF EFFECTIVELY A GARAGE. >>RIGHT. >>SO WE’VE GOTTEN OUR ECONOMICS TO THE POINT WHERE WE’RE COMPETING IN THIS MASS MARKET, YOU KNOW, LOW COST BURGER MARKET AND WE’VE ONLY AT A VERY EARLY STAGE AND BRINGING OUR COSTS, OPTIMIZING OUR COSTS. >>SPEAKING OF FAST FOOD, EARLIER THIS WEEK ON MONDAY McDONALD’S LAUNCHED THEIR PILOT TEST WITH THE PLT, THE PLANT, LETTUCE, TOMATO BURGER USING BEYOND MEATS STUFF. DOES THAT PRECLUDE YOU NOW FROM SELLING TO McDONALD’S OR HOW DOES THAT SORT OF PITCH WORK WITH — >>OVER, NO. I DON’T WANT TO TALK ABOUT LIKE THE DYNAMICS OF THAT BUSINESS, BUT I GUESS WHAT I’LL SAY IS THE WAY WE THINK ABOUT THIS PROBLEM, FIRST THE ONLY COMPETITOR WE CARE ABOUT IS THE INCUMBENT INDUSTRY WHICH RIGHT NOW OWNS 99% OF THE MARKET. ALL THE PLANT-BASED PRODUCERS PUT TOGETHER ARE LIKE 1%. SO IT WOULD BE RIDICULOUS FOR US TO BE TRYING TO COMPETE IN THAT SPACE, BUT SECONDLY, THE WAY THAT WE THINK ABOUT THIS IS OUR WHOLE FOCUS IS ON JUST MAKING AWESOME PRODUCTS THAT DON’T JUST — WE’RE NOT TRYING TO OUTPERFORM VEGGIE BURGERS OR TRYING TO OUTPERFORM THE COW. IF WE FOCUS ON THAT AND PRODUCE THE MOST DELICIOUS, HEALTHIEST, AFFORDABLE GROUND BEEF ON THE MARKET, I DON’T THINK WE’LL HAVE TO BEG McDONALD’S OR ANYONE ELSE TO, YOU KNOW, PUT IT ON THEIR MENU. >>RIGHT. SPEAKING OF THE PRODUCT PORTFOLIO, I WAS IN YOUR OFFICES YESTERDAY AND I TRIED SOME OF THE FRIED CHICKEN THAT YOU ALL WERE WORKING ON OUT THERE. I WAS WONDERING WHEN YOU THINK ABOUT THE PRODUCT PORTFOLIO AND WHAT COMES NEXT, HOW DO YOU MAKE THAT CALCULUS ABOUT WHAT THE ROADMAP SHOULD LOOK LIKE GIVEN HOW MUCH DEMAND YOU HAVE FOR THE GROUND MEAT SUBSTITUTE RIGHT NOW? >>YEAH. THAT’S A VERY COMPLICATED QUESTION. IT’S A MULTI-DIMENSIONAL OPTIMIZATION PROBLEM. FIRST OF ALL, WE ARE TRYING TO CHOOSE PRODUCTS — OUR GOAL IS TO, YOU KNOW, SOLVE THE BIGGEST ENVIRONMENTAL PROBLEM THAT OUR PLANET HAS EVER FACED, WHICH IS THE CATASTROPHIC IMPACT OF THIS INDUSTRY, AND SO THAT REQUIRES US, FIRST OF ALL, TO BE ABLE TO MAKE ANY PRODUCT THAT IS CURRENTLY PROVIDING ECONOMIC INCENTIVE FOR THIS CATASTROPHE, BUT WE ALSO CHOSE BEEF DELIBERATELY BECAUSE BEEF PRODUCTION IS BY FAR HAS THE MOST DESTRUCTIVE IMPACT ON THE ENVIRONMENT. THAT’S WHY WE’RE PUSHING ON THAT RIGHT NOW. MEANWHILE OUR FUTURE IS IN OUR R AND D OPERATION BASICALLY. WHAT DETERMINES OUR SUCCESS IS, LIKE I SAY, IS NOT — WE HAVE AWESOME TEAMS, SALES, MARKETING, FINANCIAL, EVERY ASPECT OF BUSINESS AND WE HAVE TO BE GREAT AT MANUFACTURING, ALL THOSE THINGS, BUT ULTIMATELY IT COMES DOWN TO WE HAVE TO MAKE PRODUCTS THAT CONSUMERS PREFER TO THE PRODUCTS THAT COME FROM ANIMALS FOR THE PURPOSES FOR WHICH THEY’RE CURRENTLY USING THE AN A MEDICAL ANIMAL PRODUCT. SO IT HAS TO IN THAT NICHE DO A BETTER JOB. THAT’S WHY WE HAVE 120 PEOPLE ON OUR R AND D TEAM. WE’RE GOING TO APPROXIMATELY DOUBLE IT AND THESE ARE SOME OF THE BEST SCIENTISTS IN THE WORLD. THIS IS A REALLY HIGH PROBLEM AND IT’S SO HIGH STAKES, BUT WE WANT TO HAVE THE KNOW-HOW AND TECHNOLOGY PLATFORM TO BE ABLE TO MAKE THIS ENTIRE GAMUT OF PRODUCTS AND THEN IT COMES DOWN TO OTHER FACTORS THAT JUST INCLUDES, YOU KNOW, OUR BANDWIDTH FOR SCALING MANUFACTURING AND JUST SCALING THE TEAM AND SO FORTH. >>WHAT’S THE THORNIEST PROBLEM THAT THE R AND D TEAM IS WRESTLING WITH RIGHT NOW? >>WOW, I GUESS WHAT I’LL SAY IS WE FIGURED OUT I WOULD SAY LIKE 95% OF THE FLAVOR CHEMISTRY OF MEAT AND ANIMAL TISSUES RELATIVELY EARLY ON AND A LOT OF IT COMES DOWN TO, YOU KNOW, HEEM AS THE CATALYST THAT TURNS THE PRECURSORS AND VITAMINS AND STUFF LIKE THAT INTO THE UNIQUE EXPLOSION WHERE WE’RE GOING WITH MEAT AND THE BLOODY FLAVOR AND ALL THAT STUFF, BUT THERE’S STILL A TON TO LEARN THERE, TOO, ABOUT IT BECAUSE WE DON’T WANT TO JUST MAKE SOMETHING THAT IS A GOOD VERSION OF BEEF FLAVOR. WE WANT TO FIGURE OUT WHAT’S THE ABSOLUTE PINNACLE THAT WE CAN DELIVER THAT OUTPERFORMS ANYTHING A COW CAN DO AND A BUNCH OF OTHER STUFF. SO THERE’S TONS MORE WORK THERE. WE ARE LOOKING AT — AND TEXTURE IS A WHOLE OTHER ISSUE AND IT’S EQUALLY CHALLENGING AND WE HAVE A LOT OF PEOPLE WORKING ON, YOU KNOW, DEVELOPING MATERIALS THAT ARE FROM SUSTAINABLE PLANT SOURCES THAT HAVE A GREAT NUTRITION PROFILE AND HAVE THE PHYSICAL PROPERTIES AND, YOU KNOW, JUICINESS, TEXTURE, A SYMMETRY AND STUFF LIKE THAT OF ALL THESE ANIMAL TISSUES. >>WHEN YOU SAY JUICINESS AND TEXTURE, IS THAT TRYING TO GET AT SOMETHING THAT APPROXIMATES A MUSCLE MEAT LIKE MORE LIKE A CUT OF STEAK? >>OH, SURE. WE’VE MADE STEAK PROTOTYPES. WE’RE NOT NEAR SCALING THEM, BUT ULTIMATELY I THINK THAT’S SOMETHING FOR US TO REALLY TAKE AWAY THE ECONOMIC INCENTIVE FOR GROWING COWS. WE HAVE DEFINITELY HAVE TO HAVE SOMETHING THAT CAN COMPETE AGAINST COW DERIVED STEAK WELL. SO THAT’S — BUT THERE’S A TON OF THESE PROBLEMS TO SOLVE AND THE FACT IS THEY’RE ALL HARD. AND THEN THERE’S — BUT THEY’RE ALL SOLVABLE. >>RIGHT. >>I KNEW THAT WHEN I STARTED AND I KNOW IT EVEN MORE FIRMLY NOW, THAT THESE ARE HARD PROBLEMS AND THEY ARE SOLVABLE PROBLEMS. WE’RE ALSO LOOKING AT OUR SUPPLY CHAIN LIKE OUR GOAL, IF WE’RE SUCCESSFUL IN, YOU KNOW, 10, 15 YEARS, WE WILL BE RESPONSIBLE FOR A SUBSTANTIAL FRACTION OF THE WORLD’S OR NOT IMPOSSIBLE FOODS, BUT US AND THE PEOPLE WE ENABLE TO FOOD SUPPLY WHICH MEANS WE HAVE TO REALLY THINK ABOUT FOOD SECURITY. WE HAVE TO THINK ABOUT WHAT PLANTS SHOULD WE GET PROTEINS FROM AND HOW DO WE OPTIMIZE, HOW DO WE CREATE A SYSTEM THAT IS OPTIMIZED FOR FOOD SECURITY, OPTIMIZED FOR, YOU KNOW, THINKING ABOUT COMMUNITY SCALE AND STUFF LIKE THAT? AND WE HAVE WORK GOING ON ON THAT BECAUSE THAT’S SUCH A LONG LEAD TIME. WE NEED TO BE WORKING ON THAT NOW. >>THERE WAS A LOT TO UNPACK IN THAT ANSWER AND THERE ARE SORT OF THREE THINGS I’D LIKE TO TOUCH ON. YOU MENTIONED NUTRITION, MAKING A PRODUCT THAT’S MORE NUTRITION. EVERY TIME I TOLD SOMEONE I WAS GOING TO BE TALKING TO YOU THEY WANTED ME TO ASK YOU ABOUT WHETHER THE PRODUCT IS HEALTHIER THAN A BEEF BURGER AND THE PUSH NOW IS THAT IT’S NOT HEALTHIER AT ALL THAN A BEEF BURGER. SO HOW DO YOU RESPOND TO CRITICISM ABOUT THE FACT THAT THE IMPOSSIBLE BURGER IS NOT GOOD FOR YOU? >>WELL, WE BASICALLY MAKE ALL OUR NUTRITION INFORMATION AND EVERYTHING WE KNOW ABOUT OUR INGREDIENTS FREELY AVAILABLE TO ANYONE ON OUR WEBSITE AND, YOU KNOW, ANSWER ANY QUESTIONS ABOUT IT AND THEN YOU CAN DECIDE FOR YOURSELF, BUT I WOULD SAY THAT ONE OF OUR CORE PRINCIPLES IS THAT WE ARE NEVER GOING TO SELL OUR PRODUCT UNLESS WE HAVE CRITICALLY REVIEWED ALL THE DATA AND BELIEVE THAT IT IS BETTER FOR THE CONSUMER THAN WHAT IT REPLACES. WE ARE NOT MAKING HEALTH CLAIMS OF THE PRODUCT, BUT WE INTERNALLY HAVE A VERY LIE HIGH STANDARD FOR THAT. SO OUR PRODUCT MATCHES THE PROTEIN. MATCHES AND SLIGHTLY EXCEEDS THE PROTEIN QUALITY IN TERMS OF DIGESTIBILITY AND AMINO ACID CONTENT. IT’S LOWER SATURATED FAT. IT HAS THE SAME IRON THAT RED MEAT HAS THAT MAKES IT A FEELING FOR PEOPLE THAT NEED A GOOD IRON SOURCE. IT HAS THE SAME MICRONUTRIENT PROFILE. AND WE’RE CONSTANTLY OPTIMIZING THAT. SO I MEAN CONSUMERS HAVE TO DECIDE FOR THEIRSELVES, BUT I CAN, YOU KNOW, SAY WITH CONFIDENCE THAT THIS PRODUCT, SOMEONE WHO IS CURRENTLY EATING THE COW PRODUCT IS NO WORSE OFF EATING OUR PRODUCT AND IN MANY WAYS BETTER OFF. THE THING TO KEEP IN MIND, ALSO, IS WE AREN’T TRYING TO MAKE THE FOOD TO FULFILL ALL YOUR DIETARY NEEDS IN ONE BURGER. WE’RE TRYING TO MAKE A PRODUCT THAT WILL BE BETTER FOR THE CONSUMER IN THAT NICHE IN WHICH THE BURGER OCCUPIES WHICH WILL NOT BE REPLACED BY A KALE SALAD OR, YOU KNOW, WHATEVER. >>RIGHT. >>IT DOES A BETTER JOB OF DELIVERING NUTRITION TO THE CONSUMER FOR A PRODUCT THAT HAS TO PERFORM AS A BURGER. >>NOW YOU’VE ALSO SAID YOU TALKED ABOUT THE NEED TO SCALE DRAMATICALLY ON THE SUPPLY CHAIN SIDE. YOU’RE ADDING MORE R AND D FOLKS. YOU SAID YOU PLAN TO TAKE A DOUBLE DIGIT PORTION OF THE BEEF MARKET WITHIN FIVE YEARS AND PUSH THAT INDUSTRY INTO A DEATH SPIRAL. IT SEEMS LIKE YOU WOULD NEED A LOT OF CASH TO DO THAT. THE OTHER THING IS SO DOES THE NEXT FINANCING EVENT COME FROM A PUBLIC OFFERING? ARE YOU LOOKING TO IPO? IS THAT GOING TO THAN SOON OR HOW DO YOU GET THE MONEY TO ACHIEVE THESE GOALS? >>FIRST OF ALL, YOU’RE RIGHT. IT’S A HUGELY AMBITIOUS GOAL. IT WILL REQUIRE A LOT OF RESOURCES AND SO FORTH AND WE’LL HAVE TO GET THOSE RESOURCES EITHER FROM INVESTORS OR FROM GETTING OUR PROFIT MARGINS TO THE POINT WHERE WE CAN SCALE IT THE VELOCITY THAT WE WANT TO SCALE WITH THE PROFITS WE MAKE FROM OUR BUSINESS WHICH IT WILL BE A WHILE BEFORE WE’RE AT THAT POINT. SO WE’LL DEFINITELY HAVE TO RAISE MORE MONEY. I WOULD SAY WE ARE NOT LOOKING IN THE NEAR TERM FUTURE TOWARD AN IPO AS ANYONE HERE PROBABLY KNOWS. THERE’S A LOT OF COMPLICATIONS THAT COME WITH THAT. WE HAVE OUR HANDS FULL GROWING OUR BUSINESS, DOING OUR CORE JOB AND WE HAVE GREAT INVESTORS AND WE HAVE A LOT OF PRIVATE INVESTORS WHO ARE WILLING TO BET US ON, SO ON AND SO FORTH. AT THIS POINT IT’S NOT SOMETHING THAT WE NEED AND WE CAN JUST TAPE TAKE OUR TIME ABOUT IT BASICALLY. >>SO WHEN YOU THINK ABOUT WHAT COMES NEXT ON THE PRODUCT ROADMAP, IF YOU LOOK OUT FIVE YEARS, WHAT DOES THE IMPOSSIBLE FOODS PRODUCT PORTFOLIO LOOK LIKE? >>I’M NOT BEING EVASIVE BECAUSE, YOU KNOW, THAT’S A VERY COMPLICATED QUESTION AND IT DEPENDS ON A LOT OF THINGS THAT, YOU KNOW, HOW THINGS PROCEED IN THE FUTURE. IN THE R AND D SPACE WE’RE BUILDING THE CAPABILITY AND, YOU KNOW, ADVANCED PROTOTYPES FOR A LOT OF PRODUCTS THAT WOULD COMPETE IN THAT SPACE, BUT THE THING ABOUT SCALING RIGHT NOW IS THAT, YOU KNOW, SCALING MANUFACTURING IS A BIG DEAL. IT’S TOTALLY DIFFERENT FROM SCALING AN APP OR SOMETHING LIKE THAT. RIGHT NOW IF WE BELIEVE AS WE DO THAT OUR SALES ARE GOING TING, TO BE, YOU KNOW, 10 TIMES WHAT THEY ARE TODAY OR IN 18 MONTHS OR SO, THAT MEANS WE HAVE TO BE INVESTING RIGHT NOW TO GROW OUR MANUFACTURING AND SUPPLY CHAIN NOT JUST A LITTLE, BUT BY A LOT. THAT’S JUST KIND OF — THAT’S A HUGE CHALLENGE JUST FOR OUR EXISTING PRODUCT WHERE WE HAVE VERY STRONG DEMAND SIGNALS THAT WOULD JUSTIFY THAT AND BEING A SMALL COMPANY WE WANT TO HAVE THE PRODUCTS ALL READY IN R AND D, SO WHEN THE OPPORTUNITY ARISES, WE HAVE THE RESOURCES OR WHEN THERE’S A HUGE MARKET OPPORTUNITY THAT, YOU KNOW, JUSTIFIES IT, WE’RE READY TO GO. >>WOULD IT NOT MAKE SENSE IF THAT’S THE GOAL TO WORK WITH THE TRADITIONAL MEAT INDUSTRY? THEY HAVE A BUNCH OF MONEY. THEY HAVE A BUNCH OF INFRASTRUCTURE. THEY KNOW HOW TO SCALE. THEY HAVE A LOGISTICS SUPPLY CHAIN THAT’S ALREADY WORKED OUT. IF A COMPANY LIKE THAT WAS TO MAKE A CREDIBLE OFFER TO ACQUIRE YOU OR ANY COMPANY THAT’S GOT SCALE, YOU KNOW, MASSIVE AMOUNTS OF MONEY, WOULD THAT NOT BE A MORE EFFECTIVE ROUTE? >>WELL, FIRST OF ALL, IN TERMS OF BEING ACQUIRED, I MEAN LET’S PUT IT THIS WAY. WE AREN’T GOING TO LET OURSELVES BE ACQUIRED BY ANYONE WHO WE DON’T BELIEVE IS AS FIRMLY COMMITTED TO OUR MISSION AS WE ARE. SO FAR WE HAVEN’T SEEN ANYONE WHO MEETS THAT DESCRIPTION AND IS WILLING TO PUT ALL THE SAME RESOURCES INTO THIS THAT WE WOULD GO AFTER AND GET. RIGHT NOW I WOULD SAY ABSOLUTELY THE CURRENT PLAYERS IN THE MEAT INDUSTRY DON’T EVEN COME CLOSE TO MEETING THAT BAR. SO THAT’S NOT OF INTEREST. THEY HAVE WAY TOO MUCH TO LOSE FROM OUR SUCCESS AND I DON’T THINK THEY WISH US WELL. IN TERMS OF WORKING WITH PEOPLE CONNECTED TO THAT INDUSTRY, WE JUST ENTERED INTO A PARTNERSHIP WITH ACTUALLY THE MANUFACTURER THAT I THINK IS RESPONSIBLE FOR PRODUCING MOST OF McDONALD’S, YOU KNOW, BEEF BURGERS. A LARGE FRACTION OF THEIR BUSINESS IS SERVING THE, YOU KNOW, ANIMAL-BASED MEAT MARKET, BUT THE INTERESTING THING IS THAT THEIR TECHNOLOGY AND THEIR BUSINESS MODEL IS AGNOSTIC. SO IN OTHER WORDS, IT’S NOT LIKE OUR SUCCESS WOULD COME AT THE EXPENSE OF SOME OTHER PART OF THE BUSINESS. IF IT’S SOMEONE WHO IS ENGAGED IN THE FOOD INDUSTRY OR THE MEAT INDUSTRY OR WHATEVER, BUT WHERE THERE IS NO SUCH CONFLICT, LIKE IT’S ALL UP SIDE FOR THEM AND THERE WERE, THEY HAVE NO INCENTIVE TO PUT RISK ON US, YEAH, THAT’S GREAT. >>WE ARE OUT OF TIME. I COULD TALK TO YOU ALL AFTERNOON ABOUT THIS STUFF. IT’S FASCINATING. I REALLY APPRECIATE IT, SIR. >>THANK YOU. >>THANK YOU ALL FOR LISTENING. THANK YOU, SIR. >>COMPANIES TRANSITION TO USING MICROSERVICES IN THEIR ARCHITECTURES, MORE APIs ARE CREATED ACROSS THE ORGANIZATION. WITH THIS INCREASE THEY CAN BECOME MORE CHALLENGING FOR DEVELOPERS TO FIND THESE INTERNAL APIs AND REUSE THEM WHEN THEY DEVELOP NEW SOFTWARE. THAT’S WHERE RAPID APIs FOR TEAM TO ENABLE INTERNAL APIs TO BE DEVELOPED IN A PRIVATE WORKSPACE. DEVELOPERS CAN VIEW ITS DOCUMENTATION, TEST IT AND CONNECT DIRECTLY OR COLLABORATE AND SHARE INFORMATION ABOUT THE API RIGHT IN RAPID API. TEAM MEMBERS CAN ALSO SUBSCRIBE TO ANY PUBLIC API AVAILABLE ON THE RAPID API MARKETPLACE AND THE ENTIRE TEAM CAN SEE AND USE THAT SUBSCRIPTION. THIS WAY YOU ONLY PACE ONCE FOR ANY API YOUR TEAM USES. GET STARTED TODAY ON RAPIDAPI.COM/TEAMS. >>OUR TEAMS LOVE BUILDING COMPANIES THAT CREATE VALUE AND MAKE A DIFFERENCE AS WELL AS OUR INVESTMENTS IN COMPANIES SUCH AS 10-CENT AND DEVELOPING MEANING RELATIONSHIPS WITH COMPANIES. >>THEY ARE GLOBAL AND THEY UNDERSTAND CUSTOMER BUSINESS, THEY HAVE A VERY HELPFUL AND SPECIFIC ADVICE THAT THEY CAN GIVE TO US. >>THEY THINK LIKE ENTREPRENEURS. THEY’RE A FANTASTIC PARTNER. >>OUR BIG VISION IS TO MAKE LIFE BETTER FOR 1 BILLION PEOPLE AND I BELIEVE THIS IS THE PERFECT PARTNER TO HELP US ACHIEVE OUR DREAMS. >>LADIES AND GENTLEMEN, PLEASE WELCOME TECH CRUNCH SENIOR WRITER AND YOUR BATTLEFIELD HOST, ANTHONY. >>I APOLOGIZE. I DO NOT HAVE A WORLD FAMOUS MOVIE STAR COMING ON BEHIND ME, BUT I HAVE SOMETHING ALMOST AS GOOD, NO, BETTER, I SCREWED THAT UP WHICH IS BETTER, AWESOME START, SPECIFICALLY FOUR REGULAR BATTLEFIELD STARTUPS IN ONE WILDCARD WHICH I WILL EXPLAIN WHEN THE TIME COMES. BEFORE WE DO THAT, THOUGH, I HAVE TO BRING OUT OUR EXPERT JUDGES. FIRST UP WE HAVE SHAHEEN IS FARSHI, A PARTNER AT LUX CAPITAL, PASSIONATE ABOUT AI, ROBOTS, SPACE, CARS, ENGINES, PRETTY MUCH ANYTHING IN AN EPISODE OF STAR TREK. NEXT WE HAVE LINDY FISHBURN, MANAGING PARTNER AT BREAKOUT VENTURES AND FOUNDER OF BREAKOUT LABS, THE SEED STAGE PROGRAM FOR HEART SCIENCE. SHE’S BEEN INVESTIGATION AT THE INTERSECTION OF TECHNOLOGY AND BIOLOGY. NEXT WE HAVE PETE FLINT, MANAGING PARTNER AT NFX. PRIOR TO NFX PETE FOUND ATRULIA, A LEADING ONLINE REAL ESTATE COMPANY. NEXT WE HAVE ROGER LEE, A GENERAL PARTNER AT BATTERY VENTURES. BEFORE JOINING BATTERY ROGER SPENT 10 YEARS AS AN ENTREPRENEUR AND OPERATOR FACILITATING THE FIRST EVER RETAIL TRANSACTION ON THE INTERNET AT AGE 22. NEXT WE HAVE KARA NORMAN, A PARTNER AT UP FRONT VENTURES. BEFORE UP FRONT KARA CO-FOUNDED THE CHILDREN’S E COMMERCE COMPANY MOON FIRE AND ALSO SPENT SEVEN YEARS AT IAC. AND LAST BUT NOT LEAST, WE HAVE HIRO TAMARA, A PARTNER AT ATOMICO FOCUSING ON CONSUMER, FINANCIAL TECHNOLOGY AND SOFTWARE AND LEADING THEIR INVESTMENTS IN LATE STAGE VENTURE. ALL RIGHT. AS HIRO TAKES HIS SEAT, LET’S GIVE IT UP FOR ALL OF OUR AWESOME JUDGES. NOW IT IS TIME TO BRING OUT OUR FIRST STOPUP, OMNIVIZ, PRESENTING ARE DR. KATHERYN CLAYTON AND DR. LYNN CHANG. >>CHOLERA HAS NO BORDERS. AS A PhD STUDENT IN ENGINEERING, I LEARNED THAT IN HAITI THERE WAS NO CHOLERA FOR 100 YEARS UNTIL THE EARTHQUAKE HAPPENED IN 2010. AFTER THE DISASTER CHOLERA SPREAD THROUGH THE COUNTRY CREATING OUTBREAKS AND DEATHS TO THIS DAY, BUT HAITI IS NOT ALONE. THERE ARE 5 MILLION CHOLERA CASES EVERY YEAR IN 41 DIFFERENT COUNTRIES AND THIS LEADS TO $3 BILLION IN LOSSES FROM PRODUCTIVITY, HUMAN COSTS AND THERAPY. IT TAKES SEVEN DAYS TO DETECT FOR CHOLERA IN WATER FROM THE TIME A LAB SENDS SOMEBODY OUT TO GET THE SAMPLE, BRING IT BACK, DO ISOLATION, ENRICHMENT, CHANGE REACTION, SEROLOGY TCBS STREAKING AND A SECONDARY CONFIRMATION. THIS IS A LONG TIME. IT TAKES EXPERTISE AND IT’S EXPENSIVE, BUT WHAT’S WORSE IS THAT THIS LEAVES COMMUNITIES VULNERABLE TO THE WATER THAT THEY DRINK, THAT THEY COOK WITH, THAT THEY BATHE IN. SO I DECIDED TO SOLVE THIS PROBLEM. I TOOK MY PhD TECHNOLOGY IN RESEARCH AND I STARTED OMNIVIZ WHERE WE PUT THE POWER OF THE LAB IN THE PALM OF YOUR HAND AND WE DO THIS BY DETECTING FOR CHOLERA IN WATER ANYWHERE IN THE WORLD IN UNDER 30 MINUTES. WE’RE REVOLUTIONIZING DISEASE DETECTION AND WE DO THIS WITH AN EASY TO USE SYSTEM. WE HAVE A HARDWARE COMPONENT, DISPOSABLE TEST KIT AND A SMARTPHONE THAT WORKS SEAMLESSLY TOGETHER TO DETECT CHOLERA ACCURATELY AND AFFORDABLY. THE HARDWARE ACTS LIKE THE PORTABLE LABORATORY. IT HAS A HEATING UNIT IN ORDER TO DO DNA AMPLIFICATION AND IT HAS MICROSCOPE LENSES TO SEE DOWN TO THE NANOPARTICLE LEVEL. THE TEST KIT HAS REAGENTS INSIDE. WHEN THE TEST KIT AND HARDWARE COME TOGETHER, WE AMPLIFY FOR THE CHOLERA TOXIN GENE. WHEN IT’S AMPLIFIED, WE CREATE LONGER STRANDS OF DNA AND THE SOLUTION BECOMES MORE VISCOUS IN NATURE AND THAT’S EXACTLY WHAT WE’RE MEASURING IS THE CHANGE IN VISCOSITY THAT’S OCCURRING. WE HAVE TWO PENDING PATENTS FOR THIS VISCOSITY TECHNIQUE AND WE’RE MORE SENSITIVE THAN THE STATUS QUO. WE ALSO HAVE THE SMARTPHONE COMPONENT. WE’RE ABLE TO SEE WHERE AND WHEN CHOLERA HAS HAPPENED AND NOTIFY PEOPLE SO THAT THEY CAN COME IN AND ELIMINATE THE OUTBREAK BEFORE IT’S TOO LARGE. MOVE TO DEMO. IF I’M A FIELD WORKER, I TAKE THIS ENTIRE SYSTEM WITH ME OUT TO A WATER SOURCE. I FILL THE DISPOSABLE TEST KIT WITH WATER AND I LAUNCH THE SMARTPHONE APP. I BEGIN THE TEST. IT TELLS ME TO START HEATING THE SAMPLE AND DURING HEATING THAT’S WHERE DNA AMPLIFICATION IS TAKING PLACE AND THAT CHANGE IN VISCOSITY IS OCCURRING, BUT AFTER THE HEATING WHAT IT SAYS IS TO MOVE THAT TEST KIT OVER TO AN IMAGING REGION. WE TAKE A VIDEO AND WHEN WE’RE TAKING THAT VIDEO, WHAT WE’RE LOOKING AT IS THE MOVEMENT OF WHAT’S HAPPENING INSIDE. WE ANALYZE THAT WITH OUR PROPRIETARY ALGORITHMS. FROM THAT WE’RE ABLE TO SEE THE RESULT. IN THIS CASE IT’S CLEAN WATER. WE CAN ALSO SEE THE GPS COORDINATES AND TIMESTAMP. MOVE TO WEB PAGE. ALSO SOMEBODY CAN GO ONTO THE WEB, GO ONTO OUR PORTAL AND SEE WHERE AND WHEN CHOLERA IS HAPPENING AND HAVE THESE LARGE DATA SETS. MOVE TO PRESENTATION. MOVE TO PRESENTATION. THANK YOU. WHEN THE SOLUTION IS CONTAMINATED, IT LOOKS LIKE THIS. WE COULDN’T BRING CHOLERA ONTO THE TECH CRUNCH STAGE TODAY. WHAT’S HAPPENING IN THE BACKGROUND IS WE HAVE A CONTAMINATED SOLUTION WHERE THINGS ARE MOVING VERY, HAVE HE SLOW IN NATURE OR A CLEAN SOLUTION WHERE THINGS ARE MOVING VERY, VERY FAST. I INSPIRED MY PhD ADVISERS TO JOIN ME AS FOUNDERS OF OMNIVIZ AND OUR TEAM TOGETHER BRINGS EXPERTISE. RAPID TEST, WHICH ARE COMPETITORS, VERY INEXPENSIVE BUT HIGHLY INACCURATE WHERE CELL CULTURE METHODS ARE VERY ACCURATE BUT EXPENSIVE THE WE DO A B2B SALES MODEL WHERE OUR HARDWARE IS A SINGLE TIME PURCHASE AND OUR DISPOSABLE TEST KITS CREATE RECURRING REVENUE IN THEIR SINGLE USE. WE HAVE LETTERS OF INTENT FROM FIVE OF THE LARGEST COMPANIES AND NGOs WITHIN THE CHOLERA SPACE. BUT WE’RE NOT STOPPING THERE. CHOLERA IS A $2 BILLION MARKET FOR WATER DETECTION AND SURVEILLANCE, BUT THE WORD OMNIVIZ MEANS TO SEE EVERYTHING. SO BY USING OUR NOVEL IP, WE CHANGE OUT THE CHEMISTRY IN OUR DISPOSABLE TEST KITS AND WE CAN DETECT FOR MANY DISEASES IN IN DIFFERENT MARKETS. OMNIVIZ MOBILIZES THE LAB. RAPIDLY DETECTING PATHOGENS, SAVING LIVES. IF YOU’RE AN NGO, A WATER QUALITY EXPERT, OR A RESEARCH HOSPITAL, GO TO OMNIVIZTECH.COM. THANK YOU. >>JUDGES? >>WELL DONE. SO DO THE NGOs AND THE OTHER CUSTOMERS THAT YOU’RE SPEAKING TO HAVE A BUDGET OR A LINE ITEM ALLOCATED TO THESE TYPES OF IN FIELD DIAGNOSTIC AND TESTING DEVICES? >>I WOULD LOVE TO HAND THAT QUESTION TO LYNN. >>SO YES. WE’RE NOT INVENTING A NEW NEED. THESE ARE CUSTOMERS THAT ARE CURRENTLY ALREADY WATER TESTING. THEY’RE JUST TAKING A MUMP MUCH LONGER TIME COSTING THEM MUCH MORE MONEY. WE’RE EXPEDITING IT AND ADDING THE DATA, SO THIS ALLOWS US TO GET IN FRONT OF THE INFECTIOUS DISEASE. WE CAN ALERT AHEAD OF TIME BEFORE ANYONE HAS ACTUALLY FALLEN ILL. >>WHOEVER FEELS IT IN THEIR HEART. >>CAN YOU TALK A LITTLE BIT MORE ABOUT THE VALIDATION TESTING THAT YOU’VE DONE WITH YOUR SPECIFICITY IN THE SEVEN- DAY TEST. DO PEOPLE FEEL THE NEED TO DO YOURS QUICKLY AND STILL DO THE OTHER AS A BACKUP SO THEY HAVE TO TAKE FOR BOTH? >>WHAT WE DO IS WE WORK WITH THE LARGEST CHOLERA HOSPITAL IN THE WORLD KNOWN AS ICDDRB LOCATED IN DAKKA BACK LA BANGLADESH. WE WANT OUR STANDARD TO BE THEIR STANDARD OF APPROVAL FOR OUR TESTS BECAUSE WE KNOW THEY ARE THE BEST AND ORIGINAL RESEARCHERS WITHIN CHOLERA. WE HAVE TESTED OVER 400 TESTS TO DATE ON INTENSIVENESS, SPECIFICITY AND ACCURACY AND SENSITIVITY. >>SO INCREDIBLE BUSINESS. CAN YOU SHARE A LITTLE BIT ABOUT HOW YOU MIGHT EVOLVE INTO A PLATFORM INTO THESE OTHER AREAS AND JUST WHAT DOES IT TAKE AND KIND OF WHAT LIMITATIONS DOES KIND OF THE CURRENT DEVICE DEFINE FOR CHOLERA INHIBIT YOUR ABILITY TO MOVE INTO OTHER AREAS? >>SO WE’RE STARTING IN WATER TESTING. CHOLERA, WE WANT TO DO IT RIGHT THE FIRST TIME. WE WANT TO HELP THESE COMMUNITIES, BUT WE CAN SEE WE CAN CHANGE CERTAIN COMPONENTS IN THE TEST KIT MEANING OUR DNA PRIMERS AND WE CAN LOOK FOR OTHER DISEASES. THE NEXT ONES THAT OUR MARKET REALLY POINTS TO IS HEMORRHAGIC E. COLI WHICH COMES IN WATER AND TYPHOID WITH. THOSE IT’S A CHANGE OF THE CHEMISTRY. FOR ASKING HAVE WE KIND OF TESTED THESE OTHER THINGS? ABSOLUTELY. IN THE LABORATORY SETTING WE’VE TESTED QUITE A FEW DISEASES IN WATER AND A COUPLE IN BLOOD AS WELL. SO WE’RE GOING TO BE STARTING THERE. WHEN WE GO INTO BLOOD, THAT WILL BE SEEKING FDA APPROVAL OR A CE MARK DEPENDING ON WHERE WE GO. >>SO CONGRATS ON ALL THE SUCCESSFUL IT’S SUPER INSPIRING. JUST TO FOLLOW UP ON THE FIRST QUESTION, HOW MUCH DO ONE OF THE NGOs SPEND RIGHT NOW ON THESE TYPES OF WATER TREATMENT DEVICES AND WHAT’S THE PROCESS LIKE TO CONVINCE THEM TO GO AWAY FROM ONE OF THE EXISTING VENDORS TO YOU GUYS? >>A SINGLE TEST NOW FOR CHOLERA TAKES $100 AND FOR THE LAB EQUIPMENT, THAT’S TENS OF THOUSANDS OF DOLLARS AND THEN WHEN THEY WANT TO GO OUT INTO THE FIELD AND START MEASURING WHERE THEY’VE TESTED THESE WATER SITES, THAT’S A GIS MAPPING SYSTEM AND THAT’S $2,000. WE’RE AIMING FOR A DISPOSABLE TEST KIT OF $10, SO 1/10 THE COST PER TEST AND WE’RE AIMING FOR A HARDWARE DEVICE AND SMARTPHONE TOGETHER TO BE $1,000, SO HALF THE PRICE OF A MAPPING SYSTEM AND QUITE A BIT CHEAPER THAN THE LAB. >>DO YOU KNOW HOW MUCH THEY’RE SPENDING TODAY? PICK ONE OF THE NGOs AND WHAT WOULD THE ACTUAL BUDGET BE FOR LIKE THE WATER TREATMENT PRODUCT? >>IN FIELD CHOLERA TESTING. >>I’LL HAND THAT TO LYNN AND SHE CAN TALK ABOUT NUMBERS EVERY MONTH AS WELL. >>THOSE NUMBERS CHANGE SO MUCH DEPENDING WHAT REGION YOU’RE IN. LET’S TAKE THE LARGEST CHOLERA HOSPITAL IN BANGLADESH. BECAUSE THEY HAVE TO TAKE A WATER SAMPLE BACK TO THE LAB AND IF YOU NO DAKKA, TRANSPORTATION THERE IS A HEADACHE. SO AT MOST THEY TAKE FOUR TO SIX SAMPLES A DAY. WITH OUR PRODUCT YOU CAN DO A LOT MORE. IT TAKES ABOUT EIGHT PEOPLE TO DO THIS. SO YOU’RE NOT ONLY PAYING FOR THE TIME, TRANSPORTATION AND LAB COSTS, YOU’RE PAYING PEOPLE HOURS. OFF THE TOP OF MY HEAD, IT’S A REALLY DIFFICULT NUMBER BECAUSE CHOLERA IS SEASONAL THERE. SO THERE’S NO HARD NUMBER, BUT WE HAVE CALCULATED THAT FOR A SMALL CUSTOMER WE’RE ESTIMATING 240 TEST KITS PER MONTH. FOR A MEDIUM SIZE CUSTOMER THEY WOULD BE PURCHASING 2,000 TEST KITS PER MONTH AND THESE ARE NUMBERS THAT WE’VE ASKED THEM AND THEY’VE CONFIRMED. >>YOU HAD A QUESTION EARLIER. >>YEAH. IT’S A GREAT MISSION DRIVEN WHAT YOU’RE WORKING ON. IT’S REALLY FANTASTIC. I JUST WANT TO GET A SENSE OF WHAT IS YOUR — WHEN YOU TALK ABOUT BANGLADESH OR DIFFERENT MARKETS, WHAT IS THE SALES KIND OF JOURNEY THAT YOU HAVE TO GO TO TO GET YOUR CUSTOMERS ON BOARD? HOW LONG DOES THAT TAKE? I’D LOVE TO KNOW A LITTLE BIT MORE ABOUT THAT. >>BECAUSE OUR FOUNDING TEAM IS SO HEAVILY ACADEMIC AND ICDDRB IS THE MOST RESPECTED RESEARCH HOSPITAL IN THE WORLD FOR CHOLERA, THEY’VE ACTUALLY REACHED OUT TO US. SO WE HAVE A PILOT PARTNERSHIP AS WELL AS A RESEARCH PARTNERSHIP WITH THEM. WE ALSO HAVE LETTERS OF INTENT WITH THEM. SO THIS HAS BEEN AN ONGOING RELATIONSHIP. I’M ACTUALLY GOING BACK TO DAKKA IN ABOUT THREE WEEKS TO COMPLETE SOME FINAL STUDIES. >>AS YOU GROW IN SCALE, WHEN YOU HAVE TO REACH OUT, WHAT DO YOU ENVISION THAT MOTION TO LOOK LIKE? >>ANSWER QUICKLY. >>YES. >>OKAY. SO RIGHT NOW WORD OF MOUTH ACADEMIC CONFERENCES REACHING OUT TO RFPs, RESPONSE FOR PROPOSALS ANOTHER BIG ONE, PUTTING PAPERS OUT THERE. THEY FOUND A LOT OF OUR JOURNAL PAPERS OUT THERE AND SCIENTIFIC REVIEWED ARTICLES, SO THAT’S BEEN FANTASTIC TO HAVE ON OUR SIDE. >>NPR FOUND US. >>GIVE IT UP FOR OMNIVIZ! >>WELL DONE. >>WE HAVE ANOTHER STARTUP COMING OUT. THAT STARTUP IS OZONE AI. PRESENTING FOR OZONE AI ARE BEN COLEMAN AND LYNDON OH. >>FACEBOOK TOLD US THE FUTURE IS PRIVATE, BUT THE AVERAGE USER HAS NO IDEA WHAT DATA THEY’RE GENERATING OR WHO CAN SEE IT,LET ALONE HOW TO ACTUALLY SECURE THEIR DATA. DATA HARVESTERS LIKE FACEBOOK AND GOOGLE ARE NEARLY A TRILLION DOLLARS A YEAR. WHAT IS THEIR PRODUCT? IT’S YOU. DATA CONTROL SHOULD BE A FUNDAMENTAL HUMAN RIGHT WITH EQUAL DATA RIGHTS FOR ALL. UNTIL NOW WE HAVE SURRENDERED THIS RIGHT TO GIANT CORPORATIONS. I ASKED FACEBOOK FOR MY PERSONAL DATA AND I FOUND OUT THAT OVER 3,000 COMPANIES ARE FOLLOWING ME AND PAYING FACEBOOK TO DO THIS AND THIS IS HAPPENING FOREVER. INTRODUCING OZONE. TAKE BACK CONTROL OF YOUR DATA AND TAKE BACK THE BILLIONS THAT BIG DATA IS EARNING ON YOU. HOW DOES IT WORK? SIMPLY SYNC YOUR PLATFORMS LIKE FACEBOOK AND GOOGLE TO SEE ALL OF YOUR PERSONAL DATA ORGANIZED IN SIMPLE CATEGORIES FULLY ENCRYPTED AND AUTOMIZED. SORRY. OZONE OFFERS A REVERSE SUBSCRIPTION MODEL WHERE COMPANIES YOU APPROVE CAN PAY TO SUBSCRIBE TO YOUR ANONYMOUS DATA AND YOU RECEIVE A PAYMENT DIRECTLY INTO YOUR BANK ACCOUNT, VENMO OR PAYPAL OF YOUR CHOICE. ARE OUR TECHNOLOGY ENCRYPTS YOUR TECHNOLOGY. ONLY YOU HAVE THE PRIVATE KEY. ENCRYPTED MACHINE LEARNING MATCHES ONLY THE DATA YOU WANT TO SHARE WITH OFFERS TARGETED FOR YOU. WHAT’S IN IT FOR THE BUSINESSES? PICK A ZIP CODE, AGE, GENDER AND CATEGORY AND OZONE WILL RETURN PREAPPROVED AUDIENCES THAT MATCH YOUR TARGETED PROFILE. COMPANIES CAN ENGAGE THESE AUDIENCES IN TARGETED ADS AND DIRECT MARKETING THAT HAS A HIGH LIKELIHOOD OF APPROVAL, HIGH LIKELIHOOD OF CONVERSION. THIS IS ETHICALLY SOURCED DATA CONTROLLED BY THE USER. WE HAVE A SIMPLE MODEL WHERE CONSUMERS GET FREE TOOLS TO ORGANIZE AND SECURE THEIR PERSONAL DATA AND COMPANIES GET PREAPPROVED AUDIENCES AND ONLY PAID FOR CONVERSIONS, NOT JUST EYEBALLS LIKE ON FACEBOOK. WE APPROACH USERS DIRECTLY OFF OF FACEBOOK AND HAVE TWO LIVE PAYING ENTERPRISE CUSTOMERS. WE’RE ALSO BEGINNING A PROOF OF CONCEPT WITH A TIER 1 MEDIA COMPANY THAT’S LOOKING TO ETHICALLY SOURCE CONSUMER DATA FROM THEIR 100 MILLION MONTHLY UNIQUE USERS. MY CO-FOUNDER LYNN AND I MET IN THE GOOGLE ALUMNI GROUP. WE COME FROM THE BELLY OF THE BEAST AS ALUMNI OF GOOGLE AND FACEBOOK. WE’VE ALSO FOUNDED AND SOLD COMPANIES IN THE CYBERSECURITY AND MACHINE LEARNING SPACES. MOVING ON TO THE DEMO, HERE WE SEE LYNDON IS LOGGED INTO THE ACCOUNT WHERE WE CAN SEE REALTIME EARNINGS. WE CAN SEE REALTIME OFFERS AND DISCOUNTS BASED ON TARGETED ADS. FOR EXAMPLE, LYNDON CAN SAVE 15% ON UNITED AIRLINES BECAUSE HE’S CHOSEN TO SHARE HIS TRAVEL HISTORY INCLUDING HIS REGULAR FLIGHTS BETWEEN SAN FRANCISCO AND NEW YORK. OZONE USES ENCRYPTED MACHINE LEARNING TO MATCH OFFERS WITH LYNDON’S ANONYMOUS DATA. ON THE BOTTOM WE SEE OFFERS THAT ARE MATCHED TO LYNDON’S INTERESTS THAT ARE DERIVED FROM HIS ANONYMOUS THIRD-PARTY DATA. WE’RE ESPECIALLY EXCITED TO LAUNCH OUR INTELLIGENCE PORTAL WHICH SHOWS LYNDON WHERE HE’S SPENDING HIS MONEY AS WELL AS WHICH COMPANIES ARE PAYING TO SUBSCRIBE TO HIS ANONYMOUS DATA. ON ACT ACTIVITY FEED WE CAN SEE EVERY OZONE ACTIVITY ORGANIZED BY AND AND DOLLAR AMOUNT. HERE’S WHERE IT GETS REALLY EXCITING. IN THE ACCOUNT SLIDE WE CAN SEE LYNDON’S PROJECTED LIFETIME EARNINGS BASED ON HIS OWN DATA AS WELL AS EVERY PLATFORM THAT’S EITHER SYNCED OR UNSYNCKED. THERE’S $112,000 THAT REPRESENTS LYNDON’S ALTERNATIVE RETIREMENT SAVINGS. WE’RE WORKING WITH A TIER ONE BANK TO CONNECT THIS DIRECTLY INTO 401K CONTRIBUTIONS. BACK TO THE SLIDES. THERE ARE A FEW COMPANIES IN OUR SPACE, BUT NONE HAVE SOLVED THE PRIVACY VERSUS MONETIZATION PARADOX AS WE HAVE. THEY EITHER HAVE WEAK SECURITY, GIVE AWAY TOO MANY RIGHTS OR ARE MISSING OUR PATENTED TECHNOLOGY THAT PROTECTS USER DATA FOREVER. WE HAVE A NUMBER OF PATENTS PENDING THAT GIVE US A TWO YEAR HEAD START AT THE INTERSECTION OF MACHINE LEARNING, PRIVACY AND IDENTITY. WITH OZONE YOU CAN TAKE BACK CONTROL OF YOUR DATA. SIGN UP TODAY AT OZONE.AI. >>JUDGES? >>I’LL HOP ON WITH THE FIRST QUESTION. THANK YOU. GREAT PRESENTATION. I’M CURIOUS. WHAT DO YOU VIEW AS THE INITIAL TARGET CONSUMER PROFILE? WHO DO YOU THINK WILL BE THE EARLY ADOPTER? WHAT DO YOU WANT TO TEST TO DRIVE MASS MARKETED OPTION? >>YEAH. WE’RE TARGETING THE U.S. MARKET RIGHT NOW. THE AVERAGE USER WANTS TO SEE WHAT KIND OF EXHAUST AM I LEAVING? WHAT DATA AM I GENERATING EVERY DAY? WHAT KIND OF ADVERTISERS ARE SEEING MY DATA AND HOW DO I SEE IT IN A LANGUAGE I UNDERSTAND? THIS IS BASICALLY ANYBODY WHO IS MAYBE A LITTLE BIT LESS DATA SAVVY AND WOULD LIKE A LITTLE BIT OF VISIBILITY INTO WHAT THEY’RE DOING EVERY DAY. >>SO IS IT MORE OF THE DISCOUNT SHOPPER YOU THINK OR MORE OF THE SECURITY OBSESSED CONSUMER? >>IT’S PROBABLY MORE THE DISCOUNT SHOPPER. WE’RE TARGETING USERS WHO HAVE MAYBE CASUAL CURIOSITY AND DATA PRIVACY BUT ARE NOT OBSESSIVE ABOUT PRIVACY PRACTICES. >>PILING ONTO KARA’S QUESTION, HAS THERE BEEN OTHER ATTEMPTS TO DO THIS IN THE PASS AND GRANTED, THE TIMING FOR THIS NOW MAY BE GREAT GIVEN ALL THE KIND OF PUBLIC ATTENTION TO THE ISSUE? BUT HISTORICALLY THE TWO BIG CHALLENGES HAVE BEEN TRYING TO CONVINCE PEOPLE TO CARE ABOUT IT BECAUSE THIS IS A TRADEOFF MOST PEOPLE ARE COMFORTABLE MAKING. THEY GIVE UP SOME PRIVACY IN RETURN FOR VARIOUS MEDIA PROPERTIES AND SERVICES AND WHEN YOU ACTUALLY LOOK AT HOW MUCH THEY CAN MAKE, THE AMOUNT OF MONEY THEY CAN MAKE IS QUESTIONABLE. IT ENDS UP BEING A HANDFUL OF DOLLARS PER YEAR TYPE OF THING. HOW DO YOU GUYS THINK ABOUT THOSE DYNAMICS IN CONVINCING ENOUGH PEOPLE THIS REALLY IS WORTH IT AND THAT ECONOMICALLY IT’S IN THEIR BEST INTEREST? >>WE’RE TREATING THIS AS A PUBLIC UTILITY. IT’S TOTALLY FREE FOR USERS. WE’RE TRYING TO GIVE THEM THE SIMPLEST POSSIBLE WAY FOR THEM TO SOLVE THINGS LIKE DATA AMNESIA, WHAT AM I DOING EVERY DAY AND I FORGET I DO THESE THINGS? I KIND OF WANT TO KNOW WHO IS FOLLOW ONING ME. WE’LL MAKE THAT EASY FOR THEM INSTEAD OF HAVING TO DOWNLOAD A GIANT FILE AND SIFT THROUGH MANUALLY. AND THEN BEYOND THE FREE TOOL WE GIVE THEM THE OPPORTUNITY TO MAKE A LITTLE MONEY EVEN IF IT’S LET’S SAY $500 A YEAR. $500 A YEAR IS ENOUGH TO COVER THE COST OF SAY YOUR CELL PHONE BILL FOR THE AVERAGE COLLEGE STUDENT. IT’S NOT A HUGE AMOUNT OF MONEY RIGHT NOW, BUT DATA IS GROWING EXPONENTIALLY FOR EVERY USER AND THE PRIVACY PROBLEM IS GETTING BIGGER AND BIGGER FOR EVERY USER AND THIS IS A SMALL STEP FOR USERS TO TAKE BACK CONTROL. >>DATA HAS SHOWN THE VALUES OF THE ADS IS ABOUT $200,000 A YEAR. WE THINK IT CAN BE MUCH MORE THAN. THAT FOR US WE’VE BEEN WORKING TO PROVE THAT FOR OURSELF AND OUR POCs. >>I THINK MANY OF US WOULD PREFER GOOGLE AND FACEBOOK TO BE OPENED UP PERHAPS MORE THAN BROKEN UP, BUT YOU GOT TO IMAGINE FACEBOOK AND GOOGLE DON’T REALLY WANT TO PLAY BALL WITH THIS. SO LIKE CAN YOU SHARE LIKE HOW YOU NAVIGATE THEM COMING DOWN SO THAT THEY WILL PARTICIPATE IN A PLATFORM LIKE THIS? >>WE HAVE A BUILT IN ESCAPE HATCH, ALL WE NEED IS A TOKEN FOR THE USER. IN THE ABSENCE OF THE ACCESS TO THE DEVELOPER API, ANY USER CAN STILL ACCESS THEIR DATA. WE WOULD SIMPLIFY THE PROCESS FOR THE USER TO INJECT TO BASICALLY PUMP THEIR DATA DIRECTLY INTO OUR PIPELINES AND IF FACEBOOK AND GOOGLE WERE TO DENY A USER’S ACCESS TO THEIR OWN DATA, THAT’S A BIG PROBLEM THEY HAVE AND WE’RE HAPPY TO TAKE ADVANTAGE OF THAT. >>YOU THINK IT’S DOABLE? IS IT LIVE AND WORKING AND THAT YOU CAN SUCK IN ALL THE DATA IN REALTIME? >>YES, YES, YES. >>ALSO THAT WE DO HAVE SOME STRONG SUPPORTERS WITHIN GOOGLE AND FACEBOOK. WE HAVE ALSO THINK ULTIMATELY WHEN THEY REALIZE WHAT WE’RE DOING, WE’RE EXTREMELY ACCRETIVE TO WHAT THEY’RE TRYING TO DO. PEOPLE SPEND MORE TIME ON GOOGLE, MORE TIME ON FACEBOOK, CREATE MORE DATA EXHAUST, CREATE MORE MONETIZATION. >>WE THINK USERS ARE CREATING MORE INVENTORY EVERY DAY AND IT’S PORTED OVER TO OZONE AND WE’RE OPERATING ESSENTIALLY A MARKET ON BEHALF OF THE USER. >>YOU GUYS MENTIONED ETHICALLY SOURCING AND TO THE EXTENT YOU CAN SHARE WITH US YOUR THOUGHT PROCESS WHERE DEPENDENCE OR DEMOGRAPHIC THAT IS YOUNGER IS COMING ONTO YOUR PLATFORM OR SERVICE, HOW DO YOU THINK ABOUT WHAT IS THE CUTOFF IN TERMS OF EITHER AGE OR, YEAH. HOW DO YOU THINK ABOUT, YOU KNOW — >>TAKING BACK A STEP, A BIG PART OF OUR PLATFORM IS COMMUNITY. WE’RE GOING TO COME OUT WITH ALMOST LIKE A REGULAR DAILY WIKI IN SMALL SOCIAL MEDIA KIND OF BYTES TO START EDUCATING LESS TENTACLE USERS THAN WHAT WE’RE DOING. WE’RE GOING TO FOLLOW ALL THE SAME PATTERNS AS GOOGLE AND FACEBOOK AS FAR AS AGE CUTOFFS, BUT WE DO BELIEVE A BIG PART OF OUR PLATFORM IS EDUCATING ALL USERS ON HOW THEY CAN BETTER PROTECT WILL BECOME THE LARGEST ASSET OF ALL. >>LAST QUESTION. >>WHAT TYPE OF CRITICAL MASS OF USERS DO YOU HAVE TO HAVE TO ATTRACT THE FIRST ADVERTISERS TO BE PAYING YOU AND MAKING OFFERS ON THE PLATFORM? >>SO AT THE PREVIOUS COMPANY THAT I RAN I RAN A VENDOR TO A LARGE RESEARCH COMPANY THAT WOULD RUN REMOTE SURVEYS COUNTRYWIDE IN COUNTRIES LIKE BRAZIL AND NIGERIA AND TANZANIA. THE TARGETS THEY LOOKED FOR WAS ABOUT 5 TO 6,000 TO WHAT THEY CLAIM WAS TO ACCURATELY EXTRAPOLATE FOR THE ENTIRE COUNTRY’S POPULATION. THESE WERE LONG EXTENSIVE SURVEYS ASKING PERSONALLY IDENTIFYING QUESTIONS LIKE ARE YOU WILLING TO INVEST MORE IN PRIVATE EDUCATION FOR YOUR CHILD? ARE YOU CONFIDENT IN THE STATE OF HEALTHCARE IN YOUR DISTRICT, IN YOUR CITY? AND WE FOUND THAT 5 TO 6,000 WAS MORE THAN ENOUGH FOR A BILLION DOLLAR RESEARCH COMPANY. >>WE ARE OUT OF TIME. LET’S HAVE ONE MORE ROUND OF APPLAUSE FOR OZONE! >>THANK YOU. >>ALL RIGHT. LET’S BRING OUT OUR THIRD STARTUP. THAT STARTUP IS LEO AEROSPACE. PRESENTING ARE DANE RUDY AND BRYCE PRYOR. THESE MICROSATELLITES CAN GET DOWN TO THE SIZE OF A LOVE A LOAF OF BREAD. IN THE NEXT 10 YEARS ALMOST ALL SATELLITES WILL BE MICROSATELLITES. THEY’RE TRACKING GLOBAL CLIMATE CHANGE IN REALTIME ENABLING THE NEXT GENERATION OF IOT CONNECTIVITY AND EVEN PROVIDING VITAL INSIGHT IN THE WAKE OF NATURAL DISASTERS. FOR THE COMPANIES THAT USE THESE MICROSATELLITES GETTING TO SPACE IS JUST HALF THE BATTLE BECAUSE THEY ARE FORCED TO RIDE ALONGSIDE DOZENS OF OTHERS. THEY MUST COMPROMISE ON EVERY ASPECT OF THE LAUNCH. TO START THESE CUSTOMERS MUST PICK FROM PRESET SCHEDULES OF LAUNCHES. OFTEN THEY ARE FORCES AND MUST SPEND UPWARDS OF SIX MONTHS SLOWLY MOVING TO THEIR FINAL ORBIT. FINALLY INTEGRATING SO MANY CUSTOMERS UNDER ONE LAUNCH IS INCREDIBLY COMPLEX AND THIS INTRODUCES A NUMBER OF RESTRICTIONS THAT LIMIT WHAT SATELLITES CAN DO. WHILE THESE COMPANIES ARE WAITING, THEY’RE BURNING CAPITAL DEFERRING REVENUE AND ADDING TO A GROWING BACKLOG OF SATELLITES THAT ARE WAITING TO GET TO SPACE. THIS MODEL THE SPACE INDUSTRY CALLS RIDE SHARING. MICROSATELLITES HAVE TO LITERALLY SHARE A RIDE TO SPACE, BUT WHAT CUSTOMERS NEED IS THE EXPERIENCE YOU AND I KNOW AS RIDE SHARING WHERE YOU CAN CALL UP A RIDE THAT TAKES YOU WHERE YOU WANT TO GO, WHEN YOU WANT TO GET THERE, NO COMPROMISE. AT LEO AEROSPACE WE ARE FUNDAMENTALLY COMMITTED TO PROVIDING THE DEDICATED LAUNCH SERVICE THEY’VE ASKED FOR. THIS ALL STARTS WITH THE VEHICLE. CREATING A VEHICLE TO PROVIDE THIS TYPE OF SERVICE OUR FIRST THOUGHT WAS TO SHRINK THE ROCKET DOWN TO MATCH THE SIZE OF OUR CUSTOMER. THE PROBLEM IS WHEN YOU LAUNCH A ROCKET FROM THE GROUND, YOU CAN ONLY MAKE IT SO SMALL WHILE ONLY HAVING ENOUGH ENERGY TO REACH ORBIT. UNFORTUNATELY AT THIS SIZE IT’S TOO BIG AND EXPENSIVE. ONE OF THE REASONS FOR IN IS DUE TO ATMOSPHERIC DRAG. IF YOU COULD LAUNCH YOUR ROCKET ABOVE 95% OF THE EARTH’S ATMOSPHERE, YOU COULD MAKE IT SMALL ENOUGH TO COST EFFECTIVELY LAUNCH AN INDIVIDUAL CUSTOMER AND THAT’S EXACTLY WHAT WE DO. INTRODUCING THE HIGH ALTITUDE LAUNCH PLATFORM REGULUS THAT ALLOWS US TO LAUNCH ROCKETS 60,000 FEET IN ALTITUDE. WE CAN REDUCE THE ROCKET SIZE TO HALF OF WHAT IT WOULD BE IF WE LAUNCHED IT FROM THE GROUND. LET ME SHOW YOU HOW IT WORKS. RE GULUS IS FULLY MOBILE. A SERIES OF BURNERS IGNITE. THE HOT AIR BALLOON CARRIES IT AWAY FROM THE TRANSPORT TRUCK. IT’S CAPABLE OF FULLY AUTONOMOUS CONTROL DESCENT. IT ASCENDS TO 60,000 FEET WITHOUT HUMAN CONTROL. THIS ORIENTS THE LAUNCH PLATFORM AND STABILIZES IT DURING THE LAUNCH SEQUENCE. OUR FIRST STAGE IGNITES LAUNCHING THE ROCKET FROM THE PLATFORM. FIRST AND SECOND STAGES USE A SOLID MOTOR ARCHITECTURE. THIS ARCHITECTURE IS SAFE, SHELF STABLE AND MASS MANUFACTURABLE. INSERTING EACH SATELLITE INTO ITS PRECISE ORBIT IS VITAL FOR FINE TUNED CONTROL USING A THIRD STAGE NONCRYOGENIC LIQUID PROPULSION SYSTEM. BECAUSE WE TAILOR EACH LAUNCH TO AN INDIVIDUAL CUSTOMER, THEY CAN BEGIN OPERATING THEIR SATELLITES IMMEDIATELY AND WHILE THE ROCKET IS DEPLOYING THE SATELLITE TO ORBIT, AUTONOMOUS DESCENDS BACK DOWN TO THE GROUND WHERE ANOTHER ROCKET CAN BE LOADED OR IT CAN BE PACKAGED UP AND SHIPPED HOME. WITH THIS PLATFORM WE CAN PROVIDE A LAUNCH WITHIN WEEKS TO ANY LOW EARTH ORBIT AND SUPPORT A VERY HIGH LAUNCH FREQUENCY. FINALLY MICROSATELLITE CUSTOMERS WILL HAVE THE DEDICATED LAUNCH SERVICE THEY’VE BEEN ASKING FOR. LEO AEROSPACE MADE HISTORY IN 2018 AS THE FIRST AND ONLY COMPANY TO RECEIVE AUTHORIZATION FROM THE FAA TO LAUNCH A HIGH POWERED ROCKET FROM A REUSEABLE BALLOON PLATFORM. THIS SERIES OF SUCCESSFUL LAUNCHES VALIDATED MAJOR SUBSYSTEMS AND ALSO PROVIDED A CLEAR REGULATORY PATH FOR US MOVING FORWARD. WHILE WE WERE TESTING THESE SYSTEMS WE REALIZED THAT OUR PLATFORM COULD DO MORE THAN LAUNCH ROCKETS AT ALTITUDE. WE ARE WORKING WITH NASA JPO TO ASSESS HOW OUR TECHNOLOGY CAN BE USED ON THE PATH TO MARS. WE ARE WORKING TO FLIGHT QUALIFY OUR PLATFORM NEXT YEAR UP TO 60,000 FEET. THIS OPENS THE DOOR TO A $2.6 BILLION HIGH ALTITUDE PLATFORM SERVICES MARKET. LEO AEROSPACE IS UNDER CONTRACT WITH THE U.S. AIR FORCE. WE HAVE IDENTIFIED OVER 100 SCIENTIFIC PAYLOADS IN THEIR BACK LOAD. WE ARE WORKING TO LAUNCH THE FIRST OF THESE IN OUR SUBORBITAL LAUNCH TEST NEXT YEAR. THIS PROVIDES VALIDATION TO OUR COMMERCIAL CUSTOMERS AND ALLOWS US TO BEGIN TAKING CONTRACTS FOR ORBITAL LAUNCHES. WE WILL LAUNCH OUR FIRST PAYLOAD IN 2022 OPENING THE DOOR TO A $5.6 BILLION ASSOCIATED LAUNCH MARKET. AS A TEAM, WE BRING EXPERIENCED PROGRAMMING FLIGHT OPERATIONS SOFTWARE AT NASA, PERFORMING PROPULSION WORK ON THE JAMES WEBB SPACE TELESCOPE AND LEADING OPERATIONS AS A U.S. NAVAL OFFICER. GO TO LEOAEROSPACE.COM. JOIN US MISSION TO REVOLUTIONIZE ACCESS TO SPACE. WITH THAT I’D LIKE TO LEAVE YOU SOME FOOTAGE FROM ONE OF OUR RECENT TESTS. THANK YOU. >>GO AHEAD. >>WELL DONE, GUYS. WHAT IS THE PAYLOAD RANGE YOU’RE TARGETING AND WHAT IS THE COST PER KILOGRAM PER LAUNCH TO ANY OTHER ORBIT? >>OF COURSE. SO OUR BASELINE PAYLOAD CAPACITY IS 25 KILOGRAMS TO A 550-KILOMETER SUN SYNCHRONOUS ORBIT. SO THE SMALLER END OF THE SATELLITE MARKET. IN TERMS OF PRICE PER KILOGRAM WE’RE LOOKING TO PRICE COMPETITIVELY WITH CURRENT RIDE SHARE MODELS, BUT IN CONVERSATIONS WITH CUSTOMERS THEY’VE MADE IT VERY CLEAR THIS SORT OF DEDICATED LAUNCH WHERE THEY CAN PICK WHERE AND WHEN THEY’RE GOING IS A PREMIUM SERVICE IN THEIR EYES. THEY’RE WILLING TO PAY MORE FOR THAT. >>WE’VE LOOKED AT A VARIETY OF SPACE TECH COMPANIES KIND OF BROADLY DEFINED AND HAVE BEEN HESITANT TO INVEST BECAUSE OF THE CAPITAL INTENSITY OF THE CATEGORY. TYPICALLY YOU NEED HUNDREDS OF MILLIONS OF DOLLARS, MAYBE EVEN MORE TO KIND OF GET TO SCALE. DO YOU GUYS HAVE A SENSE WHAT TYPE OF CAPITAL YOU GUYS WILL NEED NOT JUST TO GET SOME OF THE INITIAL TESTS DONE, BUT GET THE PRODUCT ACTUALLY WORKING, GET THROUGH ALL THE SCIENCE RISK? THESE ARE TYPICALLY MULTI-YEAR SALES PROCESSES INTO THE GOVERNMENT THAT’S REALLY LONG AND EXPENSIVE TO GET THEM TO ENGAGE. WHAT IS THE ACTUAL SCALE OF CAPITAL NEED TO BE FOR YOU GUYS TO BE SUCCESSFUL? >>YES. SO YOU’RE ABSOLUTELY RIGHT IN THE FACT THAT SPACE TECH COMPANIES ARE GENERALLY VERY CAPITAL INTENSE ACTIVE. MOST SPACE LAUNCH COMPANIES HAVE RAISED ON THE ORDER OF HUNDREDS OF MILLIONS OF DOLLARS PRIOR TO GETTING TO ORBIT. VECTOR HAD RAISED 107 MILLION. SO WITH OUR PROJECTIONS, THOUGH, WE FORESEE BEING ABLE TO GET TO ORBIT ON THE ORDER OF TENS OF MILLIONS, NOT HUNDREDS OF MILLIONS OF DOLLARS. WE HAVE MADE STRATEGIC DECISIONS TO ENABLE US TO PULL THAT OFF. FOR EXAMPLE, FOR ANY STANDARD LAUNCH PROGRAM 70% OF THE R AND D COSTS GOES INTO THE ENGINES OF THAT PROGRAM. WE ARE NOT BUILDING OUR OWN ENGINES. WE ARE SOURCING THOSE FROM INDUSTRY SUPPLIERS. WE HAVE GREAT RELATIONSHIPS WITH THOSE SUPPLIERS WHO ARE ALREADY BUILDING UP FACILITIES TO BE ABLE TO SUPPORT OUR NEEDS. WITH REGARDS TO YOUR QUESTION ABOUT MULTI-YEAR SALES CYCLES FOR GOVERNMENT, THINGS LIKE THAT, WE ARE ALREADY ACTUALLY WRITING CONTRACT PROPOSALS NOW WITH THE U.S. AIR FORCE WITH IDENTIFIED CUSTOMERS AND END USERS WHO ARE BEGGING FOR OUR TECHNOLOGY TO PULL OFF SUBORBITAL LAUNCHES NEXT YEAR. >>COULD YOU MAYBE WALK US THROUGH WHAT IS IT THAT IS MOST PROPRIETARY ABOUT YOUR SYSTEM OR PLATFORM VERSUS USING EXISTING COMPONENTS AND PARTS, TECHNIQUES? >>ABSOLUTELY. A LOT OF OUR PROPRIETARY TECHNOLOGY COMES IN THE INTEGRATION AND COOPERATION OF HIGH ALTITUDE BALLOON AND ROCKETS TOGETHER. IT’S A COMPLEX PROBLEM. FOR EXAMPLE, THE U.S. AIR FORCE TRIED DOING IT BACK IN THE 1950s AND SUCCESSFULLY DID IT, BUT THEY LAUNCHED THE ROCKETS THROUGH THEIR BALLOONS EXPLODING IT. IT WAS NONREUSEABLE AND PRETTY HAZARDOUS. IN ORDER TO DO THIS AUTONOMOUSLY AND REUSEABLY, THERE’S A LOT OF PROPRIETARY TECHNOLOGY THAT ALLOWS US TO DO THAT. >>TO GET TO THE 60,000 FEET LAUNCH IS PROBABLY NOT TOMORROW. HOW LONG DO YOU THINK THAT WILL TAKE AND IN LIEU OF REVENUES WHAT ARE THE KPIs YOU GUYS ARE TRACKING THAT YOU THINK ARE MOST IMPORTANT IN YOUR JOURNEY TO GET TO THE 60,000-FOOT LAUNCH? >>ABSOLUTELY. >>WE’RE LOOKING TO GET UP TO THAT 60,000-FOOT LAUNCH EARLY TO MID-NEXT YEAR. IN TERMS OF THE KPIs, THERE’S A LOT OF DEVELOPMENT AND TECHNICAL MILESTONES THAT WE WORK IN PARTNERSHIP WITH THE OFFICE OF SPACE AND IN TERMS OF OTHER KPIs WE’RE FOCUSED ON THREE DIFFERENT CUSTOMER SEGMENTS, COMMERCIAL, DEFENSE AND CIVIL. THEY EACH OBVIOUSLY HAVE VERY DIFFERENT CYCLES. >>OTHER QUESTIONS? >>I GUESS IS THERE ANY ENVIRONMENTAL ISSUES JUST LIKE ON THE ONE HAND YOU TALK ABOUT SORT OF CONVENIENCE AND PREDICTABILITY, BUT I IMAGINE BALLOON LAUNCHING IS VERY DEPENDENT ON KIND OF WEATHER AND CLIMATE. SO DO YOU HAVE ANY SORT OF CONFIDENCE LEVEL THAT YOU CAN HIT THE WINDOWS BASED ON THE SORT OF DEPENDABILITY THAT YOU HAVE ON THE ENVIRONMENTAL FACTORS? >>YES. ENVIRONMENTAL CONDITIONS ARE ALWAYS A FACTOR FOR ANY LAUNCH VEHICLE. SO OUR SYSTEM IS DESIGNED TO FIT WITHIN THE BOUNDS OF ANYTHING YOU TYPICALLY SEE WITH A LAUNCHED VEHICLE. >>TO ADD ONTO THAT, BECAUSE OUR PLATFORM IS ENTIRELY MOBILE, IF WE KNOW THAT SAY THERE’S A HURRICANE COMING UP WITH FLORIDA, THAT’S GOING TO POSTPONE ANY LAUNCHES HAPPENING FROM CAPE CANAVERAL. WE CAN MOVE LITERALLY ANYWHERE WITH THAT SYSTEM THAT YOU ARE LICENSED TO FLY IN THE AIRSPACE. OBVIOUSLY WE WORK WITH ALL LOCAL GOVERNMENTS. WE CAN FLY THIS THING OFF OF LARGE BARGES AND THINGS LIKE THAT. >>CAN I ASK ONE FOLLOW-UP QUESTION? >>YEAH. >>HOW MUCH WILL IT COST TO GET THE FIRST ROCKET IN SPACE WITH YOUR FIRST PAYING CUSTOMER? >>ANSWER QUICKLY. >>YES. THAT’S THE LARGEST COST, THE NONRECURRING ENGINEERING GOING INTO DEVELOPING AND REGULATING AND LICENSING THAT VEHICLE. THE COSTS SEVERELY DROP OFF AFTER THAT. >>IS IT 10 MILLION, 50 MILLION? WHAT IS IT TO HAVE LIKE A REAL REVENUE PRODUCING CUSTOMER? >>I WILL SAY LOW TENS OF MILLIONS. HAPPY TO DISCUSS THAT OFFLINE. >>GIVE IT UP FOR LEO AEROSPACE! >>WE ARE GOING TO BRING OUT OUR FOURTH STARTUP, MOLECULE ONE. >>DURING OUR TIME AS MEDICAL EXPERTS, WE WATCHED MANY PEOPLE SUFFER FROM UNTREATABLE DISEASES. THIS HAS ALWAYS LED US TO TWO QUESTIONS. WHY DOES THE DRUG DISCOVERY AND DEVELOPMENT TAKE 12 YEARS AND WHAT CAN WE HAVING A BACKGROUND IN BOTH CHEMISTRY AND MATHEMATICS DO TO FIX THIS? FOR EACH DRUG THAT MAKES IT TO THE MARKET AS MANY AS 20,000 DRUGLIKE MOLECULES NEED TO BE MADE IN A LABORATORY FOR TESTING. THE PROCESS CALLED CHEMICAL SYNTHESIS, DESIGNING HOW TO SYNTHESIZE A GIVEN MOLECULE IS HIGHLY INEFFICIENT AND PRONE TO ERRORS. IT INVOLVES CHEMISTS MANUALLY DIGGING THROUGH TENS AND HUNDREDS OF SCIENTIFIC PUBLICATIONS. CHEMICAL SYNTHESIS IS THE OVERLOOKED BOTTLENECK IN DRUG DISCOVERY UNTIL NOW. INTRODUCING MOLECULE ONE, THE FUTURE OF CHEMICAL SYNTHESIS. MOLECULE ONE LEVERAGES ART INITIAL INTELLIGENCE TO DESIGN MOLECULE SYNTHESIS IN SECONDS INSTEAD OF HOURS OR DAYS. FIRST THE USER INPUTS THE STRUCTURE OF THE MOLECULE THEY WANT TO MAKE. IT IS THEN ANALYZED THROUGH PATENT PENDING TECHNOLOGY. THE SYSTEM TRIES TO FIND A WAY TO MAKE IT FROM COMMERCIALLY AVAILABLE MOLECULES. FINALLY FOUND WAYS ARE RANKED ACCORDING TO USER PREFERRED CRITERIA PRESENTED TO THE USER AND SUPPORTED WITH THE LAB TESTED EVIDENCE. LET ME SHOW YOU HOW IT WORKS. MOVE TO THE DEMO, PLEASE. WE CHOSE A MARKETED DRUG OF THE DESIGN PRODUCT. SEARCH PARAMETERS ARE PICKED TYPICAL FOR LATE STAGE DRUG DISCOVERY. MEDIUM QUANTITY, SHORT SHIPPING TIME OF STARTING MATERIALS. YOU CAN SEE THAT THE FIRST RESULTS ARE AVAILABLE WITHIN A JUST A FEW SECONDS. THE SYSTEM IS BASED ON DEEP LEARNING. IT UTILIZES INFORMATION ABOUT PREVIOUS EXPERIMENTS TO FIND OUT WHAT KINDS OF TRANSFORMATION BETWEEN DIFFERENT MOLECULES ARE VIABLE. IT IS THEN ABLE TO PROPOSAL THE STEPS. VIABLE STEPS ARE ASSEMBLED INTO MULTI-STEP PATHWAYS THAT LEAD ALL WAIT THE WAY FROM STARTING MATERIALS TO THE DESIRED PRODUCT. THE SEARCH HAS FINISHED AND THE BEST RESULT IS SHOWN TO THE USER. ON THE LEFT SIDE OF THE SCREEN WE SEE THE MOLECULE, ONE THAT THE USER WANTED TO MAKE. WITH THE AID OF DIFFERENT COLORS THE USER IS ABLE TO TRACE EACH ATOM FROM THE TARGET MOLECULE BACK TO STARTING MATERIALS. LET’S TAKE A LOOK AT A PARTICULAR STEP. IT IS POSSIBLE TO DIVE INTO LAB TESTED REFERENCE FOR THIS STEP. THIS HELPS THE CHEMIST TO EASILY PROCEED WITH THE DESIGN SYNTHESIS INTO THE LAB. BACK TO THE DEMO, PLEASE. THANK YOU. A PROCESS THAT USED TO TAKE HOURS AND DAYS CAN NOW BE DONE IN UNDER A MINUTE. A PROCESS THAT NEEDS TO BE ITERATED THOUSANDS OF TIMES FOR JUST ONE DRUG. THE SYNTHESIS TARGET IS USED TO TREAT AGGRESSIVE FORMS OF LUNG CANCER. IT BROUGHT $1.9 BILLION IN REVENUE IN 2018. THE PRODUCT YOU HAVE JUST WITNESSED IN ACTION IS THE WORK OF THIS COMPENSATIONALLY TALENTED TEAM WHICH EVERY SINGLE DAY BRIDGES THE GAP BETWEEN CHEMISTRY AND TECHNOLOGY. SOFTWARE OF OUR COMPETITORS DOES NOT UTILIZE AI TO LEVERAGE CHEMICAL DATA SETS FOR SYNTHESIS PLANNING AND OFTEN HAS TROUBLE GENERALIZING TO NOVEL MOLECULES. ALSO THEIR SOFTWARE LOOKS AND INTERACTS WITH THE USER LIKE IT WAS CREATED 15 PLUS YEARS AGO. OUR INITIAL FOCUS IS THE DRUG DISCOVERY ECOSYSTEM WHICH CRAVES FOR THE UTILIZATION OF RECENT ADVANCES IN ARTIFICIAL INTELLIGENCE INCLUDING DEVELOPMENTS FOR AG CHEMISTRY, IT’S A $500 BILLION MARKET. WE HAVE AN ENTERPRISE TIER OF CUSTOM INTEGRATIONS AND OPTIONAL ON PREMISE DEPLOYMENT. MOLECULE ONE HAS SEVERAL PARTNERSHIPS WITH INDUSTRIAL LEADERS. E MOLECULES, THE LEADING MARKETPLACE FOR MOLECULES, AWU WITH WHOM WE ARE EXPLORING A GIANT PROJECT AT A FORTUNE 500 PHARMACEUTICAL COMPANY. WE HAVE A TRIAL SCHEDULED WITH ANOTHER SUCH COMPANY WITHIN TWO WEEKS AND RIGHT NOW OUR SOFTWARE IS EVALUATED BY A MEDIUM SIZED DRUG DISCOVERY COMPANY. MAKE MEDICINES FASTER, CURE PATIENTS FASTER. GO TO MOLECULE POINT ONE TODAY AND OPTIMIZE YOUR SYNTHESIS PIPELINE. >>JUDGES. >>THANKS FOR THAT. CAN YOU TELL US MORE ABOUT THE DATA THAT YOU’VE BEEN TRAINING ON AND THE DATA THAT YOU’RE FEEDING INTO THE SYSTEM AND HOW IT GETS SMARTER AND DOES IT GET SMARTER ACROSS CUSTOMERS? >>YES, ABSOLUTELY. SO THE BASIC VERSION, THE ONE THAT YOU SAW TODAY, IS BASED SOLELY ON PUBLICLY AVAILABLE DATA. THE MAIN SOURCES ARE CHEMICAL PATIENTS AND REACTIONS THAT THEY’RE EXTRACTED FROM THERE. OF COURSE, WE WANTED TO GET SMARTER WITH TIME AND WE WANTED CUSTOMERS TO BE ABLE TO UTILIZE THEIR OWN DATA. SO WE BUILT THE SYSTEM IN SUCH A WAY THAT IT WILL BUILD MORE REACTION DATA AND GET SMARTER WITH THAT. >>A FOLLOW-UP QUESTION. DO YOU HAVE DATA ON THE SUCCESS RATE OR EFFICACY OF THAT AND OTHERS PERHAPS ETHICAL LIMITS THAT YOU CAN DO WITH THAT EXISTING DATA? >>IT’S KIND OF HARD TO DO THAT WITHOUT LABS, SO WE HAD TO RESORT TO OTHER MEASURES. ONE THING WE DID WAS PLANNING SYNTHESIS OR MOLECULES WITH KNOWN SYNTHESIS AND INSURING THAT THE SOFTWARE DOESN’T HAVE ACCESS TO THIS NONSYNTHESIS. SO WE TRIED TO FIGURE OUT WHETHER THE SOFTWARE IS ABLE TO RECREATE THE SYNTHESIS FROM OTHER INFORMATION AND IT WAS ABLE TO DO THAT IN ABOUT 85% OF CASES. SO THAT’S ONE AND WE PERFORMED A LOT OF EXPERIMENTS TO VALIDATE OUR MACHINE LEARNING MODELS AND SEE WHETHER THEY ARE ACTUALLY LEARNING STUFF ABOUT CHEMISTRY OR JUST RECREATING STUFF FROM MEMORY. >>DO YOU HAVE ANY — HOW WOULD THAT COMPARE TO PRANCE PERHAPS TRADITIONAL OTHER SOURCES THAT THESE CUSTOMERS MIGHT BE USING? >>THE THING IS THAT IF YOU USE TRADITIONAL SOURCE LIKE OUR COMPETITORS, IT’S VERY HARD, FOR EXAMPLE, TO PLAN A SYNTHESIS FOR A NOVEL MOLECULE. IT’S PRACTICALLY IMPOSSIBLE IN MOST OF THE CASES AND THAT’S WHAT WE WANT TO DO BECAUSE DRUG DISCOVERY NEEDS NEW MOLECULES. YOU CAN’T JUST RECREATE NEW MOLECULES WITHOUT HAVING CONSTRUCTED IN THE PAST AND IMPAIRING TO THE TRADITIONAL PEN AND PAPER APPROACH, IT’S MUCH FASTER. >>AS YOU’RE GOING INTO EARLY CUSTOMERS, TARGET BUYERS, ET CETERA, WHAT IS RESONATING FOR THE EARLY ADOPTERS AND WHAT ARE THE BIGGEST OBJECTIONS YOU’RE GETTING TO EARLY ADOPTION? >>SO THE PROBLEM WITH OUR IDEAL CUSTOMER IS BIG PHARMA AND THE PROBLEM WITH THEM IS THE LONG CYCLE AND THE BIGGEST REASON FOR THAT IN OUR CASE IS THAT THEY HAVE DATA SECURITY CONCERNS. SO IT’S HARD FOR THEM TO TRUST A SMALL COMPANY WITH THEIR DATA THAT THEIR PROPRIETARY. SO ONE EXAMPLE HOW WE’RE MITIGATING THAT APART FROM EMPLOYING SECURITY POLICIES IS PARTNERING WITH GUYS LIKE AWS WHO ALREADY HAVE A RELATIONSHIP WITH THE BIG PHARMA GUYS AND HELP US TO OVERCOME THOSE INITIAL PROBLEMS. >>ARE YOU FINDING EARLY ADVOCATES WHO ARE HELPING YOU BREAK THROUGH OR WHAT IS THE PROFILE OF THE INDIVIDUAL IN THESE COMPANIES THAT ARE THE MOST WILLING TO EXPERIMENT? >>CHEMISTS, ESPECIALLY MEDICINE CHEMIST BECAUSE THEY DO ALL THE MOLECULES. I WOULD SAY THAT BIGGER COMPANIES ARE BETTER BECAUSE THEY HAVE MORE TIME TO EXPERIMENT ON NEW STUFF AND WITH SMALLER COMPANIES YOU JUST LIKE NEED TO — THEY HAVE TOO MUCH TO DO EXCEPT FOR TRYING OUT NEW STUFF. I WOULD SAY THAT. >>IS THERE A PARTICULAR TYPE OF DISEASE THAT YOU GUYS ARE FINDING THAT CUSTOMERS ARE UTILIZING YOU GUYS FOR? >>I’M SORRY. COULD YOU REPEAT? >>IS THERE A TYPE OF DISEASE THAT YOU FIND THAT CUSTOMERS ARE UTILIZING YOUR SERVICE FOR? >>SO THIS IS AGNOSTIC. THE IMPORTANT DISTINCTION TO MAKE HERE IS THAT WE DESIGN SYNTHESIS FOR SO-CALLED SMALL MOLECULE DRUGS, SO NOT ANTIBODIES, NOT RECEPTORS AND ANOTHER IMPORTANT DISTINCTION TO MAKE IS THAT WE’RE NOT A WHAT COMPANY. THERE ARE COMPANIES LIKE ATOMWISE THAT DESIGNS STRUCTURES FOR ALZHEIMER’S DRUG, ET CETERA. WE TAKE THOSE STRUCTURES AND DESIGN THE PROCESSES TO MAKE THEM. >>SO — GO AHEAD. >>NO. GO FOR IT. >>SO THERE ARE MANY COMPANIES THAT HAVE GENERATED MULTI BILLION DOLLAR EXITS BY TAKING A MOLECULE THROUGH CLINICAL TRIALS. HOWEVER, I STRUGGLE TO THINK OF A SINGLE COMPANY THAT’S DOING OR THAT HAS BEEN DOING SYNTHESIS OR HIGH THROUGH-PUT SCREENING OR TESTING THAT’S BEEN ABLE TO ACHIEVE THAT KIND OF OUTCOME. WHY IS IT THAT YOU’VE CHOSEN TO LEAVE THE MONEY ON THE TABLE FOR THE COMPANIES THAT TAKE THESE THROUGH CLINICAL TRIALS OR THE FOOD AND CHEMISTRY COMPANIES THAT MAKE PRODUCTS OUT OF THESE AS OPPOSED TO DOING THAT YOURSELVES? >>ANSWER QUICKLY. >>I WILL TAKE UP WITH THE INTENSITY BECAUSE WHAT WE’RE DOING IS BASICALLY SOFTWARE, SO MUCH LESS CAPITAL INTENSIVE AND REGARDING WHAT YOU SAID THAT IT’S HARD TO SPOT AN EXIT. THAT’S BECAUSE THE NECESSARY TECHNOLOGY HAS EMERGED ONLY VERY RECENTLY. THE NEURAL NETS WE’RE USING WERE DESIGNED LAST YEAR OR EVEN THIS YEAR AND WE’RE TRYING NEW STUFF. SO THAT’S THE REASON. >>ALL RIGHT. ONE MORE ROUND OF APPLAUSE FOR MOLECULE ONE! SO OUR NEXT STARTUP IS NOT A REGULAR STARTUP BATTLEFIELD COMPANY BUT INSTEAD A WILDCARD COMPANY. THAT MEANS THEY WERE IN THE STARTUP ALLEY. WE PLUCKED THEM OUT OF THE STARTUP ALLEY. EVERY OTHER BATTLEFIELD COMPANY HAS KNOWN FOR MONTHS THEY’LL COME ON STAGE. I THINK THIS COMPANY HAS MAYBE KNOWN A DAY. THAT SAID WE’VE HAD FINALISTS AND WINNERS COME FROM THE WILDCARD. THIS COULD BE JUST AS BIG AS ANYTHING ELSE. SO THE COMPANY WHICH I THINK I JUST SPOILED IS MY MILK AND PRESENTED FOR MY MILK ARE SHARONE MIRAMONTE AND RAVID SCHECHTER. >>SO WHEN I GAVE BIRTH TO MY FIRST BABY GIRL, I KNEW THAT BREASTFEEDING IS ONE OF THE STRONGEST HEALTH PROMOTING ACTIVITIES. SO I KNEW I WILL BREASTFEED, BUT BREASTFEEDING IS DIFFICULT. SO IN MY MIND IT WAS SUPPOSED TO BE THIS NATURALLY OCCURRING FUN PROCESS AND ALTHOUGH I HAD MANY MAGICAL MOMENTS, REALITY WAS REALLY DIFFERENT. BREASTFEEDING WAS TOUGH. SO I SAW A LACTATION CONSULTANT AT THE HOSPITAL, BUT I REALIZED THAT WHILE I WAS VERY STRICT AND MONITORED ALL THROUGH MY PREGNANCY, WHEN IT COMES TO BREASTFEEDING, THERE ARE NO OBJECTIVE TOOLS TO ASSESS INDIVIDUAL BREASTFEEDING AT ALL. SO I WAS INSTRUCTED TO COUNT DIAPERS AND TIME BREASTFEEDING SESSIONS. I’VE READ ALL THE INFORMATION I GOT AT THE HOSPITAL AND RESEARCHED TONS OF CONTENT ONLINE, BUT EVENTUALLY I WAS LEFT WITH TONS OF UNCERTAINTY. IS MY BABY BREASTFEEDING WELL? DO I PRODUCE ENOUGH MILK FOR MY BABY? WHY IS MY BABY CRYING? I WOULD HAVE PAID ANYTHING TO GET SOME CONTROL AND PEACE OF MIND AND MY STORY IS NOT UNIQUE. SO TODAY ALMOST ALL MOTHERS INITIATE BREASTFEED ONING, BUT BREASTFEEDING, MASTERING BREASTFEEDING, IS REALLY CHALLENGING AND MOST MOTHERS DON’T STAND WITH BREASTFEEDING FOR AS LONG OR AS EXCLUSIVE AS THEY ORIGINALLY DESIRED. SO TODAY OVER 100 MILLION MOTHERS INITIATE BREASTFEEDING. HOW DO WE GET THEM TO CONTINUE? SO THE MAIN REASON MOTHERS REPORT STOPPING BREASTFEEDING IS I DID NOT HAVE ENOUGH MILK. THIS IS WHY WE HAVE HELPED MOTHERS LIKE US BE PROACTIVE ABOUT THEIR BREASTFEEDING SUCCESS. SO WE’VE BASICALLY TRANSFORMED HUMAN MILK TO THIS POWERFUL DATA SOURCE THAT REFLECTS ON THE BREASTFEEDING PROGRESS AND BREAST MILK PRODUCTION MATURATION. SO THE BREAST MILK REALLY CHANGES IN THE FIRST HOURS, DAYS AND WEEKS AFTER BIRTH. IT CHANGES FROM EARLY TO MATURE MILK AND THIS IS WHERE MILEY COMES IN, A MOBILE HEALTH DEVICE AND APP FOR IMPROVING BREASTFEEDING THROUGH DIRECT BREAST MILK SENSING. LET’S SWITCH TO THE DEMO. SO BASICALLY FOR THE FIRST TIME EVER A MOTHER CAN INTRODUCE JUST A FEW DROPS OF MILK INTO THE MILEY CAN DEVICE AND APPLICATION AND RECEIVE IMMEDIATE FEEDBACK ABOUT HER BREAST MILK SUPPLY AND BREASTFEEDING ESTABLISHMENT PROCESS. WITH ADDITIONAL INFORMATION SHE PROVIDES TO THE SYSTEM SHE RECEIVES ADDITIONAL INSIGHT IN THE FORM OF VISUAL AND TEXTUAL REINFORCEMENT TIPS AND ALARMS FOR IMPROVING BREASTFEEDING AND SHE CAN SHARE THIS UNIQUE REPORT WITH A LACTATION CONSULTANT THROUGH THE APPLICATION. LET’S SWITCH BACK. NEXT SLIDE. NEXT SLIDE. OKAY. SO LET’S SEE THE TECH BEHIND THE MILEY. SO IN MY MILK WE BASICALLY ESTABLISH THE FIRST HUMAN MILK DEAD DEDICATED CLINICAL LABORATORY WHERE WE’VE TESTED TENS OF THOUSANDS OF DATA POINTS LOOKING AT THIS DIFFERENCE BETWEEN EARLY MILK AND THIS PROGRESS TO MATURE MILK IN THE FIRST WEEKS AFTER BIRTH AND THE MILEY IS THE FIRST DEVICE TO TAKE THIS FROM THE LABORATORY DIRECTLY TO THE HAND OF THE BREASTFEEDING MOTHER. SO BASICALLY THE MILEY DEVICE SENSES THE ELECTROCHEMICAL PROPERTIES OF A TINY HUMAN MILK SAMPLE. THIS INFORMATION CORRELATES WELL WITH THE INFORMATION WE’VE ACCUMULATED IN OUR LABORATORY WITH A CHANGE IN MILK COMPOSITION. SO THIS INFORMATION IS TRANSMITTED TO THE SMARTPHONE DEVICE USING BLUETOOTH AND THEN OUR APP CALCULATES WHERE THE SPECIFIC SAMPLE IS AT ON THIS CONTINUUM TO MATURE MILK AND THEN IT GIVES VISUAL INDICATION REGARDING WHETHER THE SAMPLE IS DELAYED OR ADVANCED RELATIVE TO EXPECTED FROM THE SPECIFIC AGE OF THE BABY OR THE TIME THAT HAS PASSED SINCE BIRTH. OKAY. SO OUR COMPETITIVE LANDSCAPE INCLUDES BOTH BREASTFEEDING, TRACKING AND DIARY APPS AND TELEMEDICINE SERVICES APPS. THERE ARE ALSO TECHNOLOGIES ASSESSING DIRECTLY THE MILK FLOW FROM THE MOTHER TO THE BABY AND THERE ARE COMPANIES LIKE EVERLY WILL THAT OFFER DIRECT TO CONSUMER LABORATORY TESTING ASSESSING ANECDOTAL ANALYZE IN BREAST MILK. MY MILK IS THE FIRST AND ONLY INTEGRATED SOLUTION THAT GENERATES — THAT UTILIZED OUR UNIQUE MILK SENSING ABILITIES TOGETHER WITH OUR CONSUMER CENTERED OR PATIENT CENTERED MOBILE HEALTH SOLUTION. OKAY. SO IN OUR BETA PILOT WE’VE SUCCESSFULLY TESTED A SYSTEM WITH LACTATION CONSULTANTS THAT HAVE SCANNED OVER 500 MOTHERS USING THE SYSTEM. THEY LOVE THE SYSTEM. THEY SAY IT’S LIKE SCIENCE FICTION AND A NEW VALUABLE TOOL IN THEIR TOOLBOX AND THAT THEIR MOTHERS LOVE IT. SO OUR BUSINESS MODEL IS BASICALLY SELLING THE DEVICE PLUS DISPOSABLES AND THE USE OF THE APP AND OFFERING PREMIUM SERVICES SUCH AS TELEMEDICINE SERVICES AND ADVANCE LAB TESTING SERVICES. THE GO TO MARKET STRATEGY IS THROUGH LACTATION CONSULTANTS AND ALSO DIRECT TO CONSUMERS AND IN THREE YEARS WE SEE MANY OF OUR CUSTOMERS COMING THROUGH THE HEALTHCARE SYSTEM WHEN INTEGRATING OUR TECHNOLOGY TO THE HEALTHCARE SYSTEM FOR ENABLING CONTINUUM OF CARE. >>WRAP IT UP. >>SO WE’VE BOTH GRADUATED AS PhDs OF SCIENCE. OUR TEAM INCLUDES BOTH A SOFTWARE PROFESSIONALS AND MOSTLY MOTHERS STRIVING TO IMPROVE MOTHERS OF GENERATIONS TO COME. WE KNOW THAT MILEY WILL BECOME A MUST HAVE DEVICE FOR IMPROVING BREASTFEEDING OF ALL BREASTFEEDING MOTHERS AND WE ARE EXCITED TO LAUNCH AS PRESALE HERE. THANK YOU. >>EXCELLENT. JUDGES. >>AS A LONG TERM CONSUMER OF THIS PRODUCT ONCE UPON A TIME, I WISH I HAD IT, I’LL JUMP IN. THERE’S BEEN NO TIME IN MY LIFE WHEN I’VE HAD MORE CHALLENGES OR BEEN MORE GOAL ORIENTED. SO THANK YOU. I’D LOVE TO KNOW EXACTLY WHAT IS THE AHA, LIKE WHAT IS THE SPECIFIC THING THAT I WOULD TELL A FRIEND OF MINE THAT’S JUST HAD A BABY THAT’S NURSING FOR THE FIRST TIME AS TO WHY YOU HAVE TO USE THIS PRODUCT? >>BEFORE MILEY YOU BASICALLY HAD NO OBJECTIVE SENSE OF WHAT’S GOING ON. AFTER MILEY YOU KNOW. SO YOU BOTH GET THE AHA MOMENT OF KNOWING WHAT’S GOING ON. MAYBE YOU WON’T GET IT ON YOUR FIRST MEASUREMENT, BUT WHILE YOU GO ON AND CONTINUE PERMITS DAILY AND RECEIVE MEASUREMENTS DAILY AND RECEIVE INSIGHTS, YOU START ACTING ON IT. >>I THINK THERE’S NOTHING MORE AKIN TO A NEW MOTHER LEARNING HOW TO DO THIS. SO IT’S A REALLY POWERFUL MOMENT ON. GIVE ME AN EXAMPLE OF AN INSIGHT OR TWO IN THE FIRST WEEK YOU MIGHT USE THE DEVICE? >>WE TELL BOTH THE LACTATION CONSULTANT AND THE MOTHER, SO THIS TECHNOLOGY IS ALSO MISSING VASTLY FROM THE HEALTHCARE SYSTEM AND ALSO LACTATION CONSULTANTS WHICH ARE THE GO TO PERSON WHEN IT COMES TO BREASTFEEDING ASSESSMENT, THEY DON’T HAVE AN OBJECTIVE TOOL AND THIS IS WHY THEY WERE THE FIRST ONES THAT WE APPROACHED WHEN ASSESSING OUR BETA DEVICE AND THEY SAY THIS IS SCIENCE FICTION THAT BECAME TRUE. I CAN’T BELIEVE THAT YOU KNOW WHAT’S GOING ON WITH THIS MOTHER FROM MILES AWAY THROUGH YOUR CLOUD. SO THIS WAS REALLY A WOW MOMENT WITH OUR LACTATION CONSULTANTS. SO WE CAN SEE WHETHER THEY MOTHER IS BREASTFEEDING IS INTRODUCES LARGE AMOUNTS OF FORMULA. WE KNOW THERE ARE DIFFERENCES BETWEEN BREASTS. WE KNOW WHEN THE MOTHER HAS EXPERIENCED SEVERE PAIN ONLY BY UNDERSTANDING THE SPECIFIC ANALYTICS OF HER MILK ON THE SPOT. >>ARE YOU MAKING LIKE DIFFERENT DIETARY RECOMMENDATIONS OR DIFFERENT RECOMMENDATIONS AS TO WHEN TO INTRODUCE FORMULA? >>SO MOST OF THE ESTABLISHMENT OF BREAST MILK IS A BEHAVIORAL PROCESS OF EDUCATION OF THE BREAST TO PRODUCE THE MILK. SO BY INTRODUCING AN EARLY FEEDBACK ABOUT HOW THE NUMBER OF BREASTFEEDING, IF SHE NEED TO INCREASE BETWEEN BREASTFEEDING EXPRESSION, IF SHE NEEDS TO INCLUDE A NIGHT BREASTFEEDING AND SO ON, THE SYSTEM CAN HELP HER AS EARLY AS CAN BE. >>BUT IN THE LABORATORY WE DO HAVE BREAST MILK COMPOSITION AS WELL AS NUTRITIONAL ANALYSIS DONE AS A DIRECT TO CONSUMER LABORATORY TESTING BASICALLY BEING LIKE THE 23 AND ME FOR BREAST MILK. SO WE DO THAT AS WELL IN THE LABORATORY AND WE PLAN TO MOVE SOME OF THESE CAPABILITIES TO THE DEVICE SOON AS WELL. BE. >>IS THE KEY WINDOW THAT FIRST TWO WEEKS WHEN YOU’RE SEEING THE CHANGES AND THEN DO I CONTINUE TO USE THE TEST THROUGHOUT OR IS IT REALLY JUST AT THE BEGINNING THAT THERE’S THIS MOMENT OF CHANGE? >>THE FIRST REAL VALUE OF POSITION IS FOR THE FIRST DAYS TO WEEKS AFTER BIRTH. WE LOOK AT IT AS THE FIRST SIX WEEKS AFTER BIRTH MAINLY, BUT WE WILL INCLUDE ADDITIONAL SENSORS INTO THE SYSTEM THAT WILL ENABLE ACHIEVING ADDITIONAL INFORMATION SUCH AS NUTRITIONAL RECOMMENDATIONS, TAKING MORE AND MORE OF THE TECHNOLOGIES THAT WE KNOW HOW TO DO IN THE LAB AND PUT THEM IN THE DEVICE ITSELF AND ALSO THERE IS AN ABILITY TO SALE THROUGH THE APPLICATION AND RECEIVE ADVANCE TESTING LABORATORY TESTING. >>THANKS. >>AS A PARENT, I UNDERSTAND THE IMPORTANCE AND ALSO THE WILLINGNESS TO SPEND AGAINST YOUR CHILD’S NUTRITION. CAN YOU JUST TALK THROUGH HOW YOU THINK ABOUT THE POTENTIAL LIFETIME VALUE OF CUSTOMERS USING THIS SERVICE AND IT SORT OF FEELS INTUITIVELY THAT $300 IS SORT OF INSUFFICIENT GIVEN THE COMPLEXITY OF THE DEVICE. SO WHAT ARE THE OPTIONS FOR YOU TO INCREASE THE LIFETIME VALUE PER CUSTOMER THAT YOU CAN GENERATE? >>WHEN WE’RE TALKING ABOUT $300 LIFETIME REVENUE, WE’RE BASICALLY LOOKING MAINLY ON THIS FIRST SIX MONTHS AFTER BIRTH, BUT WHEN IT CAN BE VASTLY EXTENDED WHEN WE EXTEND BEYOND BREASTFEEDING TO OUR MATERNAL AND INFANT-RELATED HEALTHCARE AND WELL BEING ISSUES IN THE FIRST TWO YEARS OF LIFE. SO WE SEE BREASTFEEDING AS A VERY EARLY STAGE WHEN WE CAN GAIN OR GIVE REAL VALUE PROPOSITION TO THE MOTHER AND THEN WE CAN OFFER ADDITIONAL VALUES THROUGH THERE. >>WHICH COULD BE 10 TIMES THAT 300 OR DO YOU HAVE ANY BALLPARK NUMBER? >>WE CALCULATED UP TO 2,000, BUT I THINK THERE IS REALLY — THIS IS THE UPPER LIMIT WHEN IT COMES TO DIRECT SENSING WHETHER IT’S ANY BIOSCIENCING WITH THE DEVICE, BUT THEN WHEN WE HAVE SUCH A LARGE CONSUMER BASE, WE CAN BASICALLY BRING IT UP ANYWHERE. >>WE ARE OUT OF TIME. SO GIVE IT UP FOR OUR WILDCARD COMPANY, MY MILK! THAT CONCLUDES SEX — SESSION TWO OF THE STARTUP BATTLEFIELD. ONE MORE TIME GIVE IT UP FOR OUR JUDGES! >>WELL DONE. >>I SAID YOU KNOW WHAT? IT’S TIME FOR ME TO MOVE ON AND LOOK FOR GREATER THINGS AND HAVE MORE IMPACT. >>AT LOCKHEED MARTIN WE’RE ON A MISSION. YOUR MISSION. >>YOU CAN COUNT ON US TO BUILD THE IMPOSSIBLE, TO INVENT THE INCONCEIVABLE AND SOLVE EVERY PROBLEM WITH SPEED AND RELIABILITY. EVERY MISSION IS AN EXPEDITION OF THE GREATEST IMPORTANCE BOTH TO YOU AND TO US. >>LADIES AND GENTLEMEN, PLEASE WELCOME BACK JORDAN CROOK. >>AND THE CROWD GOES WILD. THANK YOU. YOU GUYS ARE TOO TIRED TO LAUGH, TOO. WE HAVE SO MUCH EXCITEMENT COMING UP. DID EVERYBODY HAVE A GOOD DAY SO FAR? YEAH. ME, TOO. OKAY. WE’VE GOT ONE MORE PANEL AND I BET YOU GUYS ARE EXCITED AS I AM. SO I’M NOT GOING TO DILLY-DALLY ANYMORE. PLEASE WELCOME TO THE STAGE FROM SNAP TRAVEL HUSSAIN FAZAL, FROM SC30 INC., BRYANT BARR AND STEFAN CURRY AND YOUR MODERATOR MEGAN ROSE DICKEY. BIG ROUND OF APPLAUSE, PLEASE. >>THE STAGE IS BIGGER. >>I WAS AT THE PIER LAST TIME. THIS IS DEFINITELY BIGGER AND A LOT MORE PEOPLE. >>WE UPGRADED FOR YOU. >>A LOT OF CRUMPLE GRADES UPGRADES GOING ON IN MY LIFE RIGHT NOW, CHASE CENTER AND ALL. >>THESE DAYS WE’RE HEARING ABOUT A LOT OF ATHLETES AND CELEBRITIES ALIKE INVESTING IN TECH STARTUPS. MAYBE WE CAN KIND OF KICK THINGS OFF HEARING ABOUT WHY YOU’RE INTERESTED IN STARTUPS. >>FIRST IT’S JUST ABOUT OPPORTUNITY. I HAVEN’T BEEN HERE FOR 10 YEARS. YOU START TO MEET PEOPLE, KIND OF GET INTO THE SCENE A LITTLE BIT AND UNDERSTAND HOW I CAN BRING MY PERSONALITY, MY TEAM ALONG AND REALLY LEARN HOW I WANT TO KIND OF GO ABOUT IT. AT FIRST IT KIND OF STARTED PURE INTRIGUE AND WANTED TO KIND OF GET YOUR FEET WET AND LEARN. WE HAD A HISTORY OF A STARTUP OF OUR OWN. BEING ON THAT SIDE AND NOW FROM THE INVESTMENT STANDPOINT. SO IT’S JUST EXCITING TO BE ABLE TO MEET AMAZING FOUNDERS THAT ARE PURPOSE DRIVEN, HAVE SIMILAR MINDSETS AND MISSIONS THAT WE DO AND IN LINE WITH THEM AND KIND OF GO ON THAT JOURNEY. RIGHT NOW OBVIOUSLY BEING IN THE NBA, THAT’S A VERY SHORT PERIOD OF MY LIFE. SO FROM 21 TO HOPEFULLY I CAN PLAY ANOTHER SIX YEARS AND YOU THINK WHAT DO YOU WANT TO DO THE REST OF YOUR LIFE? WE’RE HOPEFULLY SETTING UP THE GROUNDWORK AND THE FRAMEWORK FOR SUCCESS IN THIS SPACE AND DOING IT OUR WAY AND REALLY ENJOYING THE RIDE. AGAIN, BEEN FORTUNATE TO HAVE A GREAT TEAM BEHIND ME THAT’S ON THIS JOURNEY WITH ME. >>SO YOU AND BRYANT WERE COLLEGE ROOMMATES AND BACKSTAGE YOU TOLD ME YOU’RE THE BEST FRIENDS. >>EXACTLY. TWO GUYS IN THE WOLFPACK. WE’RE GOOD. >>SO CAN YOU KIND OF WALK ME LIEU. YOU AND BRYANT WORK CLOSELY TOGETHER AT SC30 AND YOU LANDED ON HUSSAIN’S STARTUP SNAP TRAVEL AS YOUR THIRD INVESTMENT, I BELIEVE. CAN YOU WALK ME THROUGH HOW YOU WERE INTRODUCED TO HUSSAIN AND WHAT LED YOU TO WANT TO INVEST. >>I’LL LET BRYANT TALK ABOUT HOW KIND OF OUR FIRST INTERACTION WENT. >>YEAH. WE MET THROUGH AN INVESTOR, SOMEONE LEADING A ROUND IN SNAP TRAVEL THAT I HAD MET A FEW YEARS PREVIOUSLY AND I WAS SITTING DOWN JUST HAVING A CONVERSATION ABOUT COMPANIES HE WAS LOOKING AT, THINGS THAT HE WAS SEEING. WE WERE TALKING A LITTLE BIT ABOUT HOW WE WERE THINKING ABOUT GETTING INTO INVESTING AND HUSSAIN HAD A MEETING WITH HIM RIGHT AFTERWARDS. SO WE WERE UP HERE IN SAN FRANCISCO. HUSSAIN WALKED IN AND SAID SOMETHING LIKE HEY, TELL HIM A LITTLE ABOUT WHAT YOU’RE DOING. SO HE SPENT 10 MINUTES TALKING AND ONE THING LED TO ANOTHER. WE PROBABLY SPENT THE NEXT FOUR TO SIX WEEKS KIND OF DIGGING IN. WE STARTED GETTING INTO A DUE DILIGENCE PROCESS WITH SNAP TRAVEL AND ULTIMATELY ENDED UP PARTICIPATING IN THAT ROUND OF FUNDING. >>I HAD A HUGE DILEMMA BECAUSE ANY TIME YOU BRING SOMETHING, I KNOW THEY HIT IT OFF AND THERE’S A GREAT OPPORTUNITY THERE, KIND OF HIT ME IN THE HEART A LITTLE BIT. HE WAS A RAPTOR FAN. I WAS LIKE I LIKE YOU, BUT I DON’T LIKE THE TEAM THAT YOU’RE RIDING WITH. >>I GOT TO GO TO HIS OFFICE BASED IN TORONTO AND MEET THE ENTIRE TEAM THAT’S MAKING SNAP TRAVEL A SUCCESS, DID A Q AND A AND GOT SOME FACE TIME WITH THEM TO SEE WHAT WAS GOING ON AND HOW THEY WERE BUILDING. IT WAS A PRETTY COOL INTRODUCTION AND OPPORTUNITY. >>HUSSAIN, WHAT WAS YOUR PITCH LIKE TO STEPH AND TO BRYANT? DID YOU TAILOR IT THE SAME WAY YOU WOULD A MORE TRADITIONAL VC OR ANGEL INVESTOR? WHAT WAS THAT LIKE FOR YOU? >>IT’S PRETTY SIMILAR. OBVIOUSLY I SPENT A LOT OF TIME TALKING ABOUT THE PRODUCT. SO IT WAS JUST SHOWING BRYANT — >>HIS MIC’S NOT WORKING. >>CAN YOU CHECK HUSSAIN’S MIC, PLEASE. >>KEEP TALKING. >>THEY DID COME TO LISTEN TO YOU. WE’LL WAIT. >>KEEP GOING. >>CAN YOU HEAR? >>ALL RIGHT. PEOPLE DO WANT TO HEAR ME. THAT’S COOL. >>THEY DO. >>FOR ME IT WAS JUST A STANDARD PITCH. I JUST SHOWED BRYANT THE PRODUCT. HE LIKED IT. HE WAS REALLY INTO IT. JUST KIND OF FOR THE BENEFIT OF EVERYBODY IN THE AUDIENCE, WHAT SNAP TRAVEL IS, WE ALLOW YOU TO BOOK A HOTEL ROOM OVER MESSAGING. SO YOU CAN PICK UP YOUR PHONE THE SAME WAY YOU’D MESSAGE YOUR FRIEND. YOU CAN MESSAGE SNAP TRAVEL. YOU CAN SAY HEY, I NEED A HOTEL IN SAN FRANCISCO TOMORROW NIGHT. WE HAVE A BUNCH OF MACHINE LEARNING TECHNOLOGY THAT WILL PICK THE BEST DEALS FOR YOU AND PRESENT YOU WITH HOTEL DEALS. I DID THE STANDARD. AND STANDARD DEMO TO BRYANT. HE LIKED IT ENOUGH TO GO THROUGH THE DUE DILIGENCE PROCESS AND WE WENT THROUGH FOUR TO SIX WEEKS OF DUE DILIGENCE BACK AND FORTH BEFORE HE WAS SOLD, BROUGHT IT TO STEPH. STEPH LIKED IT. THEN WE GOT TOGETHER IN TORONTO. >>IS THAT GENERALLY HOW IT WORKS? BRYANT, DO YOU KIND OF DO THE FIRST ROUND OF DUE DIFFICULT DILIGENCE AND, STEPH, DO YOU DECIDE IF IT WORKS? >>I THINK WE TRY TO FINE TUNE THE STRATEGY IN TERMS OF THAT PROCESS. SO OBVIOUSLY BRYANT IS OUT, THE WORKHORSE, TAKING MEETINGS, GETTING INTRODUCTIONS, GOING TO PURSUE COMPANIES THAT WE’RE INTERESTED IN. WE’LL PUT THE DECISION THROUGH OUR FILTERS THAT WE DESIGNED AND WE THINK WORK FOR US. WE CHECK THE BOXES. YOU KIND OF GET A MAJORITY, SOMETIMES RIGHT ON THE LINE AND THEN WE HAVE A CONVERSATION AROUND IT. OBVIOUSLY I GET TO MEET THE FOUNDERS, THE TEAM IN MOST CASES AND YOU TRY TO MAKE AS MANY EDUCATED DECISIONS AS YOU CAN AND HOPEFULLY WE’RE BUILDING THAT THESIS AND STRATEGY AROUND WHAT WE’RE TRYING TO DO AND HAVE SOME SUCCESSES ALONG THE WAY. WE’RE STILL YOUNG. INVESTMENT’S IN. IT’S PRETTY COOL THAT TO BUILD IT AND FINE TUNE IT AS WE GO BECAUSE WE’RE OBVIOUSLY ALWAYS ABOUT LEARNING. REQUESTBRYANT, YOU CAN PROBABLY SPEAK WHAT IT’S LIKE REPRESENTING THE INVESTMENT SPACE. >>WE’RE A CONSTANT WORK IN PROGRESS. WE HAVE A VISION WHERE WE LIKE TO GO AND IT’S HOW DO WE MAKE CONSISTENT STRIDES TO THAT. WE ALMOST THINK OF OURSELVES AS A SMALL FUND. IT’S INVESTING STEPHON’S CAPITAL, BUT DUE DILIGENCE, HUSSAIN CAN SPEAK TO THAT. WE AREN’T WRITING A CHECK BECAUSE A REPUTABLE INSTITUTIONAL VC IS LEADING AROUND AND SAYING THIS IS A GOOD BET LIKE WE’RE TREATING THIS AS HEY, WE HAVE TO MAKE SOUND INVESTMENT DECISIONS. HOW DO WE THINK ABOUT IT AS A FIT FOR STEPHON IN OUR OVERALL ECOSYSTEM TO ADD VALUE? I THINK WITH A LOT OF COMPANIES THEY SEE A CELEBRITY INVESTOR AND THINK OF TWEETS AND INSTAGRAM POSTS. LIKE HE’S NOT JUST A CUSTOMER ACQUISITION VEHICLE. THAT’S NOT THE WAY THAT WE WANT TO CONSIDER HOW WE CAN ADD VALUE AND SO WE WANT TO MAKE SURE WHEN WE’RE LOOKING AT COMPANIES, YEAH, WE BELIEVE IT’S A GOOD INVESTMENT. WE BELIEVE IN THE FOUNDERS, THE TEAM. YOU’RE BETTING ON THE TEAM AT THE END OF THE DAY AND WE WANT TO MAKE SURE WITHIN OUR ECOSYSTEM OF BRAND PARTNERSHIPS, THE MEDIA RELATIONSHIP, OTHER PORTFOLIO COMPANIES AND ON THE FOUNDATION SIDE WE’RE ABLE TO FIND WAYS TO ADD VALUE INTO THE COMPANIES WE’RE INVESTING IN. >>I CAN SPEAK TO SOME OF THAT VALUE. THERE’S A FEW THINGS SC30 HAS BEEN SUPER HELPFUL WITH SO FAR. ON THE CONSUMER SIDE FOR A LOT OF PEOPLE THEY CAN ONLY AFFORD MAYBE ONE TRIP OR TWO TRIPS A YEAR MAX. THEY PROBABLY HAVEN’T HEARD OF SNAP TRAVEL. WHEN THEY GO AND GOOGLE AND SAY SHOULD I SPEND $1,000 AND BOOK A TRAVEL WITH SNAP TRAVEL AND SEE STEPH AS AN INVESTOR, THAT GIVES THEM THE CONFIDENCE TO GO IN AND MAKE A BOOKING WITH US. ON THE CONSUMER SIDE STEPH WORE A SNAP TRAVEL HAT DURING THE NBA FINALS. >>THAT’S WHEN YOU KNOW I REALLY BELIEVE IN THE COMPANY. TORONTO-BASED COMPANY AND FINALS AGAINST THEIR TEAM. >>IN THE POSTGAME MEDIA CONFERENCE. BEYOND THE B2C SIDE THERE’S BUSINESS DEVELOPMENT OPPORTUNITIES. WHEN WE GO TO CHINA AND CHAT WITH ALIBABA AND 10-CENT, IT OPENS UP DOORS AND GETS US MEETINGS WE OTHERWISE WOULDN’T GET. THEY’RE LIKE OH, STEPH IS AN INVESTOR. YOU HAVE A STRONG BOND WITH CHINA. EVEN BEING ON STAGE TODAY, THE FACT STEPH IS HERE IS PROBABLY THE REASON I’M ON STAGE. >>NO COMMENT. STEPHON, YEAH, YOU WORE THE SNAP TRAVEL HAT. THAT WAS PROBABLY REALLY GREAT IT SOUNDS LIKE, BUT OTHER THAN KIND OF LIKE REPPING THE BRAND AND WHATNOT, WHAT KIND OF VALUE DO YOU SEE YOURSELF BRINGING TO LIKE SNAP TRAVEL OR ANY OF THE OTHER STARTUPS IN YOUR PORTFOLIO AT THIS POINT? >>I THINK BRYANT ALLUDED TO IT, BUT ACROSS THE FOUR PILLARS WE WORK IN THERE’S A LOT OF OPPORTUNITIES TOLEVERAGE THE ENTIRE PLATFORM, WHETHER IT’S THE INTRODUCTION OR VIDEO OR POSTS, THERE’S A LOT OF DIFFERENT WAYS WE CAN BE CREATIVE AND HAVE THAT CROSS POLLINATION ACROSS THE ECOSYSTEM THAT FOR US IS EXCITING BECAUSE THERE’S A MUTUALLY BENEFICIAL PLAY THERE AND WE’VE EVEN SEEN IT NOW, MY WIFE. WE JUST STARTED OUR EAT LEARN PLAY FOUNDATION. A LOT OF THINGS WE STARTED I THINK ABOUT NOW IN THE SPACE IS HOW CAN WE LEVERAGE THAT TO IMPACT THE COMMUNITY HERE IN OAKLAND AND CREATE A NICE WAVE OF MOMENTUM THROUGH THESE TYPE OF OPPORTUNITIES? AGAIN 12 MONTHS IN WE’VE HAD A LOT OF COOL EXPERIENCES IN THAT FRONT. I CAN ONLY SEE IT GETTING BIGGER AND BETTER. >>ARE THERE PARTICULAR SECTORS THAT YOU’RE MOST INTERESTED IN WITHIN THE TECH SPACE? >>THERE AREN’T ANY SPECIFICS WE’RE INTERESTED IN. I THINK BRYANT KIND OF TALKED ABOUT IT IN TERMS OF JUST ITS FOUNDERS, RIGHT? IT’S THE TEAM. IT’S THE PEOPLE YOU’RE PUTTING YOUR MONEY BEHIND AND YOUR BELIEF IN. THERE ARE SOME CATEGORIES THAT WE KIND OF STAY WAVE FROM, BUT — >>WHAT ARE THOSE CATEGORIES? >>WE CALL IT LIFE SCIENCES AND BLOCKCHAIN. THOSE ARE THE TWO THAT KIND OF STAND OUT, BUT IN TERMS OF OTHER THINGS, IT’S JUST ABOUT USING OUR STRATEGY, OUR FILTERS, TO MAKE THESE SOUND DECISIONS, BELIEVING IN THE TEAM AND REALLY DIGGING IN. THIS ISN’T LIKE SOMETHING THAT WE TAKE LIGHTLY. BRYANT TALKED ABOUT OUR DUE DILIGENCE. TIMES WE’VE HER HEARD FEEDBACK FROM FOUNDERS. >>ARE YOU ABLE TO LET US KNOW JUST HOW MUCH MONEY YOU’VE INVESTED IN TECH STARTUPS AT THIS POINT? >>I MEAN WE WON’T TALK PUBLICLY ABOUT EACH OF OUR INVESTMENTS, BUT EVERY INVESTMENT IS AT LEAST SIX FIGURES. I THINK THAT’S KIND OF WHAT WE’RE COMFORTABLE WITH SHARING. IT’S NOT A NOMINAL SIZE CHECK, BUT WE’RE CERTAINLY NOT STEPPING UP TO TRY AND LEAD AROUND ANY TIME SOON. >>OKAY. IN GENERAL, ARE YOU LOOKING AT LIKE SERIES A, SERIES B LEVEL OR I GUESS WHICH LEVEL ARE YOU LOOKING TO GET IN THAT? >>ACROSS OUR EIGHT HAVE. S INVESTMENTS TO DATE IT’S BEEN SERIES A, B, C. WE WANT TO SEE A REPUTATIONAL SERIES INVESTOR, SOMEBODY WE CAN LEAN ON THROUGH THE DUE DILIGENCE PROCESS. FOR US THIS IS AN EDUCATIONAL PROCESS AS WELL. THERE’S A LOT WHERE HE DON’T KNOW AS TWO PEOPLE RELATIVELY NEW TO THE SPACE. HOW CAN WE SURROUND OURSELVES AROUND PEOPLE WHO HAVE DONE IT A LOT LONGER, HELP US DIG DEEPER AND UNDERSTAND THINGS WE MIGHT BE MISSING. WE WANT TO SEE VERIFIABLE MARKET TRACTION. HAVE YOU HIT PRODUCT MARKET FIT AND ARE READY TO THROW SOME GAS ON THE FIRE AND ARE READY TO SCALE THE BUSINESS? WE’LL PAY A SLIGHTLY HIGHER VALUATION TO PULL THAT RISK BACK A LITTLE BIT TO WHERE WE’RE MORE CONFIDENT THE WAYS WE CAN ADD VALUE WHETHER IT’S THROUGH RELATIONSHIPS AT A CUSTOMER LEVEL, BUILDING THAT TEAM, ET CETERA, CAN MOVE THE NEEDLE FOR THE COMPANY AND THEY’RE READY TO DO THAT. >>YOU MENTIONED NEEDING TO EDUCATE YOURSELVES AROUND STARTUPS AROUND SILICON VALLEY. STEPH, WHAT IS YOUR PROCESS FOR MAKING SURE THAT YOU’RE REALLY LIKE UP TO DATE ON EVERYTHING THAT’S HAPPENING IN THE ECOSYSTEM AND THAT YOU’RE NOT GOING TO MISS OUT ON A BIG OPPORTUNITY POTENTIALLY? >>JUST LEANING ON MY TEAM. I HAVE A FULL-TIME JOB THAT REQUIRES A LOT OF MY ATTENTION AND TIME INVESTMENT, BUT WHEN IT COMES TO HAVING THE PERSPECTIVE AROUND WHO WE CAN CONNECT WITH AND KIND OF LEAN ON TO MAKE THOSE SOUND DECISIONS, WHERE I CAN KIND OF PUT MY CONFIDENCE IN THE TIME AND INVESTMENT I WANT TO BUT INTO IT BECAUSE LIKE BRYANT WILL TELL YOU, I’M ALL IN ON OUR WEEKLY UPDATES, OUR KIND OF PERIODICAL UPDATES ON THE PORTFOLIO COMPANIES AND HOW THEY’RE DOING, HOW DIFFERENT SECTORS ARE MOVING AND THINGS LIKE THAT, SO THAT PROCESS IS STILL FORMALIZING ON A CONSISTENT BASIS, BUT I’M ALL IN AND THAT’S BEEN THE FUN PART ABOUT IT. >>HOW AVAILABLE DO YOU MAKE YOURSELF TO THE FOUNDERS IN YOUR PORTFOLIO? >>A GOOD AMOUNT. >>YEAH? HUSSAIN, DO YOU — >>I CONCUR. IT’S ACTUALLY A LOT MORE THAN I EXPECTED. INITIALLY WHEN I WAS PRIMARILY DEALING WITH BRYANT, I THOUGHT STEPH WOULD KIND OF SHOW UP AND SAY HI, SHAKE SOME HANDS, KISS SOME BABIES, BUT HE ACTUALLY SPEND QUITE A BIT OF TIME. THERE WAS A SUMMIT WE HOSTED A FEW WEEKS AGO AND STEPH WAS THERE THE ENTIRE TIME, TWO, THREE DAYS, BEEN A LOT MORE INVOLVED THAN I WOULD HAVE EXPECTED. IT’S BEEN AWESOME. >>STEPH DIGS IN IN TERMS OF TRYING TO BE UP TO DATE WITH EVERYTHING. THE SUMMIT THAT WE HAD WAS ACROSS OUR ENTIRE ECOSYSTEM, EVERY FOUNDER FROM OUR PORTFOLIO COMPANIES WAS THERE ALONG WITH PEOPLE LIKE UNDERARMOUR, J.P. MORGAN CHASE, MEDIA PARTNERS, ET CETERA. A COUPLE WEEKS AGO WE WENT TO THE FORBES CLOUD 100 EVENT AND NOT JUST TO THE DINNER, BUT WE STRATEGICALLY SET UP ABOUT 90 MINUTES BEFORE THE DINNER TO MEET WITH KNIFE DIFFERENT COMPANIES AND DIG IN AND GET TO KNOW WHAT ARE YOU DOING? ALL ENTERPRISE COMPANIES A LITTLE DIFFERENT THAN HE MIGHT HAVE SEEN BEFORE, SERIES A TO COMPANIES THAT ARE A BILLION PLUS PROBABLY ON THE WAY TO AN IPO IN THE NEXT FEW YEARS FOR HIM TO UNDERSTAND WHAT DOES THAT SPECTRUM LOOK LIKE AND WHAT DOES IT MEAN WHEN YOU’RE A COMPANY RAISED AT A $1 BILLION EVALUATION VERSUS A $50 BILLION EVALUATION. SO HE’S MAYBE BEING A LITTLE MODEST IN HOW HE’S CARVING OUT TIME TO MAKE HIMSELF AVAILABLE. ON A WEEKLY BASIS HE KNOWS COMPANIES COMING INTO THE FUNNEL HEY, WE’RE HERE FROM A DUE DILIGENCE PERSPECTIVE. HERE’S HOW WE’RE WORKING DOWN IN THE FUNNEL. WE’RE GETTING CLOSE TO TALKING ABOUT TERMS. HE SEES THAT THE WHOLE WAY THROUGH. WE SEARCH AN INVESTMENT MEMO TO HIM AT THE END LIKE FINAL RECOMMENDING AND POP QUIZ HIM AND HE HASN’T FAILED YET. WE’LL GET HIM AT SOME POINT. >>IS HE GETTING 100%? >>YES. >>YES. >>SO YOU’VE MADE EIGHT HAVE. S TO INVESTMENTS TO DATE. WHY AREN’T YOU DISCLOSING ALL OF THEM? WE KNOW THREE. >>ACTUALLY WHY ARE WE NOT? WHY WOULD YOU SAY THE STRATEGY? >>YEAH. WE MADE THREE INVESTMENTS LAST YEAR THAT WERE ALL MADE PUBLIC. UP UNTIL THAT POINT IN TIME STEPHON WASN’T REALLY INVESTING IN THAT SPACE, MAYBE HERE AND THERE, SOMETHING THAT WOULD COME UP. WE WANTED PEOPLE TO KNOW WE WERE ACTIVELY LOOKING TO BEGIN INVESTING FROM A VENTURE PERSPECTIVE. I THINK AS WE LOOK AT THE COMPANIES NOW, WE DON’T WANT TO BE SO QUICK TO JUMP INTO THE EASY WAYS OF PROMOTING A COMPANY. SO WE’RE DOING A LOT OF THINGS BEHIND THE SCENES. TO US IT’S A LITTLE BIT OF A DATING PROCESS. LET’S GET TO KNOW EACH OTHER. HOW DO WE FIND WAYS TO ADD VALUE? LET’S MAKE SURE WHEN WE TALK ABOUT THE RELATIONSHIP PUBLICLY, WE ARE ABLE TO STAND UP PROUD AND SAY THESE ARE ALL THE THINGS WE’RE DOING TO SUPPORT THIS INVESTMENT AND THIS COMPANY. SOMETIMES THAT TAKES LONGER TO BUILD UP. RATHER THAN ISSUE A GENERIC PRESS RELEASE HEY, WE MADE AN INVESTMENT, THAT DOESN’T REALLY MOVE THE NEEDLE FOR ANYBODY, BUT HOW DO WE CONTINUE TO WORK AND BUILD STRATEGICALLY AND SAY THIS IS A WAY WE’RE BUILDING MATERIAL STRAW FOR YOU AND YOUR AND THIS THEN LET’S TALK ABOUT IT. >>HUSSAIN, WAS THAT KIND OF YOUR EXPERIENCE WITH THEM I GUESS FROM THE POINT OF RECEIVING THE INVESTMENT TO PUBLICLY TALKING ABOUT IT? >>YEAH. THERE’S DEFINITELY A PERIOD WHERE WE GOT TO GET TO KNOW EACH OTHER. THEY HAVE TO UNDERSTAND THE BUSINESS UNTIL I THINK THEY’RE BOTH VERY COMFORTABLE WITH MAKING IT MORE PUBLIC AND MAKING THE ANNOUNCEMENT. >>STEPHON, HOW MANY INVESTMENTS ARE YOU GENERALLY LOOKING TO MAKE? DO YOU HAVE GOALS IN PLACE LIKE BY THE END OF 2020 I WANT TO BE INVESTED IN THIS MANY COMPANIES. I WANT TO PUT THIS AMOUNT OF MONEY INTO THEM? >>WE’VE BROKEN IT DOWN PRETTY MUCH INTO A YEAR TO YEAR BASIS SETTING ASIDE A CERTAIN ALLOTMENT. BRYANT TALKED ABOUT OUR CHECK SIZE AND SPREADING ON IT’S ACROSS MULTIPLE INVESTMENTS. IT TAKES TIME TO DO DUE DILIGENCE AND SOURCE THESE DEALS AND OPPORTUNITIES AND MAKE SOUND DECISIONS. I DON’T EVER LIKE SETTING A QUOTA FOR THE YEAR, SO WE GET TO THE END OF THE YEAR AND SAY WE WANT TO MAKE EIGHT AND RUSH TO TWO TO MAKE THE GOAL. THERE’S KIND OF A SOFT QUOTA BETWEEN FOUR TO SIX A YEAR WHERE YOU’RE TRYING TO BE ACTIVE IN THE SPACE AND MAKE SURE YOU TAKE ADVANTAGE OF OPPORTUNITIES LIKE SNAP TRAVEL LIKE WE HAVE WHERE WE HAD INTRODUCTION. WE WENT THROUGH THE PROCESS. IT MADE SENSE FOR BOTH SIDES AND WE GOT IT DONE. THAT’S AN ACTIVE PROCESS THAT’S GOING ON CONSTANTLY. >>I THINK ONE OF THE THINGS YOU GUYS ARE LOOKING FOR IS THE MARKET TRACTION. SO WHEN WE CAME TO BRYANT WITH THE SNAP TRAVEL OPPORTUNITY, WE WERE AT A POINT WHERE WE HAD ALREADY DRIVEN OVER 100 MILLION IN SALES OVER MESSAGING. SO IT’S NOT A SMALL BUSINESS, BY ANY MEANS. THE PRODUCT MARKET THAT WAS THERE, WE’VE BEEN GROWING DOUBLE DIGIT QUARTER OVER QUARTER. WE HAVE PLANS TO GET TO A BILLION BY 2021. THERE’S BEEN A LOT OF MARKET TRACTION. I THINK THAT’S A LOT OF WHAT THEY’RE LOOKING FOR. >>I THINK AS WE BUILD THE PORTFOLIO, WE WANT TO DO IT IN A SELECTIVE METICULOUS MANNER. WE WANT TO SAY HERE’S OUR HYPOTHESIS WHY THEY’LL WIN AND BE ABLE TO LOOK BACK THREE, FOUR, FIVE YEARS DOWN THE LINE AND SAY THEY WON. WERE WE RIGHT? SO THAT WE CONTINUE TO ITERATE OVER TIME, BUT TO STEPHON’S POINT WE DON’T HAVE LPs. WE’RE NOT FORCED TO DEPLOY CAPITAL. IF WE WERE TO COME TO STEPHON AND SAY HEY, I THINK WE SHOULD MAKE 10 INVESTMENTS THIS YEAR BASED ON WHAT OUR PIPELINE LOOKS LIKE. WE CAN DO THAT, RIGHT? IF WE SEE TWO COMPANIES WE REALLY LIKE, WE CAN DO THAT. THERE’S A NICE COMFORT IN KNOWING WE CAN PUSH IF WE WANT TO AND WE CAN PULL BACK IF WE’RE SEEING THINGS THAT AREN’T OF INTEREST. >>THERE’S AN ONGOING ISSUE IN SILICON VALLEY REGARDING THE LACK OF DIVERSITY AND INCLUSION. I’M WONDERING IF YOU HAVE ANY GOALS IN PLACE AROUND INVESTING IN PEOPLE OF COLOR OR WOMEN OR OTHER UNDERREPRESENTED PEOPLE IN THE TECH ECOSYSTEM. >>I THINK IT’S VERY IMPORTANT. IT’S PART OF WHO I AM AND KIND OF I THINK THE INSPIRATION ON THE BASKETBALL COURT, HOW THAT CAN BLEED OVER INTO TRUE IMPACT AND CHANGE IN THE INVESTMENT SPACE AND THE TECH STARTUP SPACE. I NEVER LIKE TO TALK ABOUT THINGS I’M ACTUALLY NOT DOING. IN TERMS OF WHAT I LIKE TO DO IN LEVERAGING MY BASKETBALL PLATFORM TO CREATE OPPORTUNITIES FOR WOMEN IN THE GAME OF BASKETBALL, WE’VE BEEN ABLE TO BUILD WELL ONLY CAMPS THAT HAVE BEEN PROUD TO HAVE THAT EXPERIENCE AND IT’S BEEN REALLY REWARDING. THOSE TRYING TO FIND LIKE MINDED PEOPLE, LIKE MINDED CEOs AND OPPORTUNITIES THAT IS A CORE VALUE FOR THEM AS WELL. SO IT’S ON OUR RADAR. WE DON’T HAVE A STANDARD KIND OF ASK IN TERMS OF WHAT THAT IS FOR EACH OPPORTUNITY, BUT THAT’S A QUESTION THAT COMES UP. HOW DO YOU APPROACH THIS? IS THIS IMPORTANT TO YOU? ARE YOU ACTIVELY MAKING CHANGES WITHIN YOUR ORGANIZATION THAT REFLECT WHAT OPPORTUNITY AND CHANGE SHOULD THERE BE? THAT GIVES US CONFIDENCE TO GET BEHIND YOU AS WELL. >>HOW DIVERSE WOULD YOU SAY YOUR PORTFOLIO IS RIGHT NOW? >>I THINK THE WAY THAT WE LOOK AT IT, WHEN WE FIRST STARTED, I THINK TO STEPHON’S POINT, WE UNDERSTAND THE IMPORTANCE OF ARE YOU INVESTING IN FOUNDERS, WHETHER IT’S MINORITIES, YOU KNOW, WOMEN FOUNDERS, ET CETERA? ONE OF THE THINGS AS WE STARTED EXPLORING HOW WE GET IN THIS SPACE, WE SPENT A LOT OF TIME AND I CONTINUE TO DO THAT, WHETHER IT’S FEMALE VCs OR FEMALE FOUNDERS AND TRY TO UNDERSTAND THEIR PERSPECTIVE AND ONE THING THAT WE QUICKLY LEARNED WAS TO MAKE AN IMPACT IT DOESN’T NECESSARILY NEED TO BE A FEMALE OR MINORITY FOUNDER YOU INVEST IN BUT WHAT ARE THEY DOING THROUGHOUT THE ENTIRE COMPANY? WHAT DOES THAT TOWARD LOOK LIKE? WHAT DOES THEIR EXECUTIVE TEAM LOOK LIKE? WHAT DOES THE ENTIRE EMPLOYEE BASE LOOK LIKE? I THINK SNAP TRAVEL IS A GREAT EXAMPLE. MAYBE YOU CAN TALK ABOUT IT A LITTLE BIT IN TERMS OF WHAT THE MAKEUP OF YOUR COMPANY IS. IT’S A QUESTION THAT COMES UP THROUGH EVERY DUE DILIGENCE PROCESS, HEY, WHAT’S THE STRUCTURE OF YOUR BOARD? WHAT’S YOUR EXECUTIVE TEAM LOOK LIKE? WE’RE STILL TRYING TO UNDERSTAND AND LEARN. WE DON’T NECESSARILY WRITE A BIG ENOUGH CHECK TO SAY YOU HAVE TO DO THIS. WE CAN WALK AWAY. WE WILL IF THAT’S NOT BEING REPRESENTED APPROPRIATELY. BUT WE’RE STILL TRYING TO FIGURE OUT WHERE WE CAN PUSH FOR OUR CHECK SIZE VERSUS SOME OF THE OTHER STUFF. >>WE’RE FORTUNATE BEING IN TORONTO IN SUCH A MULTI- CULTURAL CITY, OVER 50% OF OUR EMPLOYEES ARE IMMIGRANTS OUTSIDE NORTH AMERICA. OVER 60% ARE VISIBLE MINORITIES. IT’S SOMETHING WE PUT A LOT OF IMPORTANCE ON. >>SO WE’RE JUST ABOUT OUT OF TIME, BUT, STEPHON, YOU KIND OF ALLUDE TO THIS EARLIER, BUT THAT THE INVESTING COULD KIND OF BE A POST NBA CAREER FULL TIME IS. THAT HOW YOU KIND OF SEE YOUR TRAJECTORY GOING? >>YEAH. I THINK THE OPPORTUNITY AND VISIBILITY WE HAVE AS NBA ATHLETES ESPECIALLY, YOU CAN TALK ABOUT GUYS NOT JUST IN BASKETBALL BUT ATHLETES OF ALL SPORTS HAVE KIND OF APPROACHED THIS SPACE. OUR EARNING POTENTIAL IS IN A VERY SHORT WINDOW, BUT HOW CAN YOU LEVERAGE THAT INTO OPPORTUNITIES THAT CAN SET YOU UP FOR GREAT SUCCESS POST CAREER, THOSE RELATIONSHIPS, THAT LEARNING EXPERIENCE WE TALKED ABOUT AND JUST KIND OF TAKING ADVANTAGE OF THE NOW SO THAT YOU SET UP LATER AND THAT’S BEEN A REALLY COOL EXPERIENCE. I’VE HAD SOME TEAMMATES THAT HAVE BEEN EXTREMELY INTERESTED. WE WANT TO GET TO A POINT WHERE WE CAN BE A LEADER IN THAT FRONT AND SAY THIS IS HOW WE DO IT. THIS IS KIND OF THE FRAMEWORK FOR BEING SUCCESSFUL IN THIS SPACE AND HAVE THAT BE A PROVEN CONCEPT AND BRING PEOPLE ALONG ON THAT JOURNEY DOWN THE ROAD. SO THAT’S THE LONG TERM GOAL. I’VE BEEN REALLY PROUD OF WHAT WE’VE BEEN ABLE TO BUILD SO FAR. SO HOPEFULLY MORE TO COME. >>YOU’VE CERTAINLY GIVEN US A LOT TO THINK ABOUT. SO THANKS SO MUCH FOR YOUR TIME. >>THANK YOU. >>THANK YOU. >>ON THE WAY OUT. ON THE WAY OUT. ON THE WAY OUT. ALL RIGHT. BEFORE YOU GET UP AND GO JUST A QUICK NOTE, I DON’T KNOW IF YOU’RE FAMILIAR WITH EXTRA CRUNCH. IT’S OUR PREMIUM PRODUCT AND WE’RE RUNNING A DEAL RIGHT NOW. SO IT’S $12 FOR THE FIRST YEAR. IT’S A STEAL, FOLKS. I’M TELLING YOU, IT’S A STEAL. IT’S GOT A LOT OF HOW TO GUIDES FOR LAUNCHING AND SCALING YOUR COMPANY. CHECK IT OUT. NORMAL PRICE IS 150 A YEAR. GO CHECK THAT OUT. CALL TIME’S 9:30 TOMORROW. THAT’S WHEN WE’LL GET STARTED. I CAN’T WAIT TO SEE YOU. YOU GUYS HAVE BEEN JUST SO MUCH FUN AS YOU ALL RUN TO THE EXITS WHILE I’M TALKING. LOVE YOU, TOO. BYE.

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