Transcripts For CSPAN3 TechCrunch Disrupt New York Conference Part 2 20240622

Its a significant step forward for us. From the kick starter edition. Its six times faster, its got double the memory, twice the usb ports, and its filled with these wonderful new creative projects. Theres make arts, which is a digital easel to learn code by painting characters and fractels. Its immediate, and the game mechanic is step by step. You learn how to type simple commands, magic spells we call them. And you see beautiful washes of color and shapes appear before your eyes. Weve also creative a narrative adventure called terminal quest, which i think some people in this audience who came up on the commodore 64 may enjoy. Terminal quest is a mystery, a narrative mystery told step by step, where you use linux command spells to unlock new powers, save your town and borrow into basically a new world. You go down the rabbit hole, you try to solve the mystery, you dont realize it, but youre learning about the linux command line spells that make a lot of the modern world work. Another area is with counter blocks. Drag and drop these visual blocks, create real code, change games, change music, it can change software. Were added some really cool new features, you can bring in new types of blocks into the mine craft world, much requested ones like diamond. You can make sounds and characters appear before your eyes in the classic game pong. To put it briefly, the new cano is more than anyone can make. More speed, more creativity, it allows you to make real magic. I think we are going to have to leave it there. Thank you so much, alex. Thank you. A lot of cleanup to do up here. Were about to go for a quick break. Id like to remind everyone, follow me on twitter twitter, jordanrcrook. See you soon. More now from the tech crunch disrupt new york conference. The annual conference examining the latest technology startups. Entrepreneurs, investors and media heard from heads of companies involving on demand Delivery Services, electronics, cosmetics and an Online Service providing designer dress and rentals. Tom wheeler and bill de blasio also spoke. People are still filing back in, we have an amazing speaker coming up next. Please hurry back if youre not already in your seats. Here in new york, were obsessed with the on demand economy, were all really lazy or working a lot harder than the folks in San Francisco, and we dont have time to get things. Ive been used to get eggs, coffee, milk, chipotle on demand, ive decided to take it to a new level and start asking for impossible stuff like a sunny day or like a better attitude. Something like that and i think our next guest is thinking along those lines too. Please welcome to the stage our moderator. You all want a good panel, and we will hopefully deliver. Lets do it. This is huge. I guess we should start off with, whats new . Whats been going on . Busy signing up partnerships. Chipotle, starbucks, a few others in the pipeline. I think whats interesting is that after weve been like doing this for three years. In the last six months, what happened is a lot of the larger players in the market, they got out and they started to talking to firms like post mates. They believe there is no market for on demand or same day delivery, and they are trying to close partnerships and were in a fortunate situation to win a few of them. Now, lets for the traditional use case, or for sort of the Main Business of delivering food from restaurants, you have 1 1 2 million deliveries youve done. Youre up to 1 1 2 million deliveries, right . Since last week, were at 2 million deliveries. Wow remember, it took us 10 weeks to get to 1. 5 million. It took us 7 1 2 weeks to get to 2. Its still going faster. There you go. Is a lot of that growth being driven by these partnerships . How much of that is predicated on these new deals you have with fogs at starbucks or chipotle . Those deals are still getting implemented. Starbucks will roll out in june in seattle. The great thing about that is that were fully integrated into their mobil order and pay system. And chipotle was Just Announced last week, most of the growth you see is excluding any of the large partnerships. When you started the business, it didnt start out in food delivery, right . No, it started out as more of a getting someone to run an errant for you, basically . When did you transition into the delivery model and what was what drove that sort of shift . Zero traction. The very first was a service that merchants could use to deliver items that they have in stock. Now, three years ago. We went to San Francisco and signed up 60 or 70 merchants all retail. In furniture stores, electronics stores, in and you know we went in there and said, heres an app you can push a button and sell something to a customer, have that thing delivered in San Francisco. This is the greatest thing in the world. I wanted this forever. Were like, cool, we built it for you. And then nothing happened. There were 1 or 2 deliveries a day, very few deliveries and we called these merchants and are like, whats going on . I dont know, didnt come up, couldnt use it. Person took this stuff. So but what happened at the same time, and this is how this is a great way so think about products sometimes and why its important to listen to what happens with your products. Customers use the app as consumers, like you and i would download it, and try to get post mates to purchase something, they would say things like, go to safeway and get this for me. We had no means of payment. I would get angry as i do, because im german. Youre not allowed to do that. After a while there were so many of these requests, we decided to do a test on the weekend, and on that weekend my cofounder and i clipped our fleet at that point like 25 people in San Francisco with visa gift cards. These visa gift cards were used to make purchases. I dont remember the exact number. We said hey, if you include the hash tag include it now. Were going to go out and purchase that thing for you and on the first weekend, we saw Something Like 10,000 worth of stuff. If you were to launch post mates from now, would it look like digit, would it look like these on demand tech services. Do you like the interface that these guys have . Where do you see yourselves falling . Im a big fan of it, again, the first version of post mates and still today, the custom order field is a super popular thing you have. It allows you to say things like, get me gauacamole from a chipotle. I think post mates was one of these companies that really pioneered the name get it now i think its a great idea creating Something Like creating a human cloud. Looking back, do you think that was you could have spent that time narrowing in on the food category, it seems like when these businesses are successful, theyre successful because they attack a niche market. They go after Something Like organic food or prepared food or food from the burrito place down the street. Thats what we did. For the public we left post mates open for your imagination a little bit. The idea of anything from anywhere helped us, its very sexy. What we did internally, we had a strategy that is based around the principle of food is like books, if you look at food, its a category that has universal demand at a universal pass point. We did the same with food. Today were the Largest Online delivery company, we focused on prepared food. It allowed us to scale the fleet very fast, high competitive usage opinion. Whats next for you in terms of markets that you all might look to enter. Where else can you expand within this notion of food delivery. Would you like to compete or go after someone like inis a car or someone doing deliveries . Yeah, were thinking about having a better grocery product on the road map. Theres a notion were already competing with inis a car. The reality is, its a really small portion of our delivery little time in that category. But for q3, there are a few items on the road map that will make it a lot more attractive, with or without partnerships, well see how that works. There is a lot of interest in that category. Personal hygiene is another category. We think about corner store, thats another category were very interested in. For you all what do margins of this business look like. And how are you doing in terms of revenue. When do you think you might hit profitability. So again we try to build a company that can generate a profit with every delivery. And that is what were doing. I think we actually have a quite healthy gross margin and were very proud of that and were trying to keep that. And were also operating on a path to profitability, in 2016, we want to be profitable or can be profitable as a company if we decide to do that. I think its something thats very attractive, i think it shows that we are able to carefully model a complex business with a lot of moving parts. That were able to drive improvements, and that the product really is a product that customers understand that they pay for the value that it provides. So i started writing about tech here in new york in 1999, 2000. And i remember when i first started writing, there was this Amazing Company that had a cool logo, and a really great delivery service. Huge one of the bigger busts of like that first dot comair rah. How are you not what lessons did you learn from them. You brought up instacard, might you all be cosmo, and how do you avoid that . It was a super interesting company, i believe that they were way ahead of their time, and i mean that they were way ahead of their time that the project that they offered, they werent able to modernize in a way you need to do it in order to have a profitable business. So cosmo was free for a long time, when it wasnt free, it was a ridiculously low delivery fee. They could monetize what they would selanne a take a cut of these things. They had Warehouse Space in manhattan. Crazy expensive at the time, there is an old version of the Balance Sheet available somewhere on the web, and you find some of these things. I know that, because when we started post mates, there was nothing single. A single mention of same day delivery. Which is nuts, if you look at google today. We want to use the city as a warehouse, were relying on an existing infrastructure. Those are two key differentiators. I dont know how many messengers they had. Lets say it was around a couple hundred in new york. They routed them. Most of the it was two way radios, imagine how good of a person, regardless of how efficient you are as an operator that tries to rally your four or five guys, theres a limit to the efficiencies you can derive from that system. In post mates land, very similar to uber and liftland, you have these very big teams of engineers working on trying to make the logistic side more and more efficient. You mentioned sort of the number of the provision of on demand Delivery Services that are now available. You google it and get all sorts of responses. According to crunch based data, theres 1. 28 billion raised this year, for delivery startups of one stripe or another. Thats a lot of money many how do you deal with all of that is it does the industry have to consolidate . I think this is a space where the first mover advantage is there. It may not be a winner takes all market, its a winner takes most market. You look at the 24 markets that were operating in, some of them, San Francisco, obviously l. A. Is our largest city, chicago is large, so is new york. We see that were really able to lock in supply that were able to grow even though were live over a year in some of these markets at a fast pace. Getting into these markets early paid off for us, and locking in the supply side is what comes with that. So again i said it before, i dont want to sound like im repeating the point, but within three years, we were able to build the largest undemand delivery fleet. 10,000 people doing deliveries, twice as much as the closest competitor. If amazon decides theyre going to take this more seriously, when do they acquire you . Would you accept a couple someone earlier said, any offer with a b, ill take a look at everybody would of course you would consider it. Are you talking to them now . No. The job as a co is to do that. And at the same time make sure the reason that this company was created can be fulfilled in either of these scenarios. What does it mean . It means if there is an opportuni opportunity. In return it would mean that we could fulfill this vision a lot faster, that is something that is very entertaining to think about. An acquisition that would look like, yeah, great heres a ton of money now talk about brand x and go in the basement and work on it, is way less compelling. All of the three founders, we come from backgrounds, very middle class, very driven by the idea that post mates can really help i want to shift gears a little bit i want to talk about the collaborative consumption. You have these contractors where youre working for delivery. What does that mean what are the ramifications of that for the broader american economy. Are we creating a class of people who have to do these sort of menial jobs while tech entrepreneurs. You have a malfunction here. They sort of get to chill out and make more work i think its probably americas best Part Time Job. I would love for this to be a full time job in the future. There is around 15 to 20 of our post mates that look at it as a full time job. Its probably a really good Part Time Job. It pays a lot more than other Part Time Jobs. If we look at immediate compensation in San Francisco during peak times. Maybe around 19. Around 17 per hour. Again, median. Thats 40, 50 more than a barrise ta makes. I think its has a lot to do with the approach and how you want to position the company and i think were not running around and claiming that this is the greatest full time job in the world. This is a really solid job our platform reflects that. What is a typical post mates delivery guy, employee. Do you have a sense of their demographics . People that have another job or maybe another Part Time Job. We do these surveys to the fleet, and we obviously talk to them, and we have we get together in all these markets. The flexibility is what people like is the number one reason. Is the income, the income at the times when they want it. And thats a huge thing. Who they are i mean, theyre just amazing. I really believe that which is something i think Corporate America should think about a little bit. There is a movement that is a lot against the 9 to 5 clock job. There are people out there that are writers, artists, that probably in the past have to have specific jobs in order to provide an income that provide incomes like post mates where they can be active in a much more flexible setup. You dont think that in some ways. Youre not worried at all about the labor pool that is post mates bread and butter. Theyre not going to go away as sort of the economy improves and you get further out from the financial crisis, which was part of a motivator for people to take on these Part Time Jobs. I dont think so. I give you an example. Hes doing it more for fun. He posted about his earnings, i think he worked for three hours on duty, during peak times. He made 98 doing a bunch of deliveries. That is substantial income. I believe theres going to be room for that. I think its the company has to adjust along these changes, but for now, i think this being a Part Time Job is attractive for a lot of people. What is the weirdest thing that youve ever seen anyone have to deliver through most makes. I get this question asked all the time. Im glad to know im so basic. Im such an idiot, that i really never ever think before it. I tell the same story every time. There must be something beran he can totally, at night, people get whippets delivered. We have the weed startup earlier today. The delivery that i reference to a lot was a bottle of champagne and a pregnancy test. What libertarian you are and which side you are on. Those are kind of people are having things dropped off on one side of town . They do it, but most of it is purchases. I think with that, im going to say thank you so much for the time, sir, its a pleasure. You all have a good one. Enjoy the rest of the show. Who here has heard of a term called Net Neutrality . Were going to learn something today then. What would happen if he did the one elevator stopped on every lane, this is a fast lane, you just have to pay extra for that. Fcc chairman please give him a huge round of applause as well as our moderator. I like your jacket. Thank you. Welcome to the yearly gathering of the nerds. Its only the new york ners. S some fly in on this, actually. Nerds on the train. Before we get to Net Neutrality, were going to do a lot on that. Recent news, the proposed comcast Time Warner Cable deal. 45 billion is done. Correct. And today in its earnings comcast reported a 99 million charge related to the transaction that failed. I want to ask, were you surprised when comcast zoided to drop the ball on this and walk away from it . No, i think it was a responsible decision by brian roberts. And i what he said when he said its time to move on. I think perfectly encapsulates the reality, why why go and fight this through the courts or whatever the case may be, lets keep looking toward the future. I think thats one of the things. Would it have worked . Would they have pulled the deal off . Or were they doomed and it was not going to work . I dont know what they thought. What i think is it was a good decision. It was a good decision because it would be a long drawn out process to challenge our decision. And two, because of the whole attitude of its time to move on. Lets look for the next thing, this is an industry that is going like this, why do you want to keep fighting that fight. Do you think this is going to be a poison pill for future large combinations of this sort. I think we will look at each of them on the merits. One of the things is that it was incredibly data driven. La. An awful lot of economic data, a lot of market data a lot of data inside how the industry operates. Do you think the define the Public Interest in this case. Theres a broad definition of the Public Interest. That is will the market continue to operate . And the market is the cable market and the broadband market. Whats the impact on the future of video and video competition . Whats the future of cable rates, and then you say, okay, are there offsetting Public Benefit benefits and we came to the conclusion no. What about net harm . Thats what we say. When you view competition, is that the main lens you look at deals through . You cannot vet these large transactions. Its interesting. Clearly competition is a key poen end of what is in the Public Interest. The Justice Department and we were going on parallel paths. They have very strict competition rules and decisions that they have to make. Ours is a little fuzzier in terms of whats the general Public Interest. And clearly competition is one of those issues. Weve done alln0 want to talk to you about. One of the most that was a warmup . That was the opening bit, if you will. One of the most surprising things during the Net Neutrality saga was the massive outpouring of Public Comment many were you surprised at the amount of problems that came in, and how early were you shocked by that . This is bigger than most policy debates are if youre the sec. There was a day early on when we had 100,000, 150,000 kind of comments being filed, you go, whoa but thats why this will degate, thats why this decision was so important. Because what those 4 Million People who were filing with us, and not all of them were pro. It was mostly it was about three quarters were pro. That still means theres a Million People that didnt like the idea, okay which is a nontrivial amount. The point of the matter is, that this proved the power of an open internet to free expression. And it just happened that the issue being decided, and the ability to communicate using that technology happened to cone side. I dont think its the end of how do they impact your actual rule making process . What impact can they have and how do you measure that for how you do rule making. Obviously, the total impact. The total number of comments is something that you have to sit up and take notice. This is not something where you make a decision based on bulk. You could. Im not sure thats the what the statute had in mind. Were supposed to go through and make a decision based upon the authorities in the statute, what is in the Public Interest. And thats what we did. You are not personally swayed then in your Decision Making process, by the comments themselves. You did notice the bulk of them right. I think that the bulk of the comments indicated how when youre talking about the internet, youre talking about something very personal to people. And they then used that personal medium of theirs to express themselves, that is what was significant. On the other side of this over in congress. Senator franken called it the free speech issue of our time. Where senator cruz who is running for president , called Net Neutrality obama care for the internet. I dont get it either. But what divides congress on this issue. Theyre divided into two camps, there doesnt seem to be a lot of room in between them. So why do you think weve seen a division on this very important issue . You know, i mean, i think that there is a reality in all policy debates that people bring their own experiences and their own ideological approach to the role of government to the Decision Making. And those kinds of comments arent surprising. You were not at all surprised when they said the Obama Caroline . No. Complete unshock . I think youre the only one. Are you going to point to a Digital Divide between the fc doctor and congress. In terms of knowledge and competency that you deal with . I think what the congress is, i had an interesting discussion during a hearing on thursday, with a member of the House Communications subcommittee, on that issue, that what congress does is, Congress Enacts broad principles and then delegates authority to an Expert Agency. And, of course, theres a situation where somebody will come in and say, thats not what i meant to do, thats not what i wanted you to do. But when you delegate to an Expert Agency, youre counting on the process that that agency runs. And in fact the courts have held whats called chevron deference. Its a terrible premise. Its based on a Supreme Court case called the chevron case. The courts should give the Expert Agency deaf rans when having to make decisions. Because they are the Expert Agency. In this case, in the runup of the actual Net Neutrality, you saw congress losing its mind of what was going to happen. Theyre still proposing bills on Net Neutrality itself. If were supposed to defer to you, why is congress so violently reacting to doing your job. They make the rules, they have the ability to do that. Theres nothing untore id about that, they have the right to do it. My job is to take the statutes that congress has passed to look at the facts presented in the context of those statutes and make decisions. If some people want to say, no, its the wrong decision, or thats the right decision, thats entirely their right. If they want to change the law, thats entirely their right. They are the congress of the United States, they are the peoples elected representatives. But i hope that in this debate, what we recognize is that on june 12th, which is when the rules will take effect. On june 12th, there will be in place the strongest open internet protections that anyone has ever imagined. And we shouldnt be going backwards from them. Thats a good point. Okay. There we go. But maybe theres a number of legal challenges out there right now. How many people are suing you. Its as of today, its over a dozen. Over a dozen. Do you expect that number of challenges . Sure. I mean, i said all along, i said the big dogs are going to sue. And i mean, theres nothing surprising in the kinds of things that we do, the big dogs will sue on things they dont like. Its their right to. Youre too nice, i feel. Deaf rans. We have in place the most stringent and expansive open internet rules in history. One of your lawyers said that the approach this time around was belt and suspenders. As in youre really protected on this. Are you as confident that she is, that youre going to beat these lawsuits . Yeah. And actually, when you say beat the lawsuits, theres a twopart process here. Long about july. It will probably get filed in the next 10 days, two weeks. There will be motions filed in the court to stay the order, to keep us from enforcing it. Probably that will be decided in the julyish kind of time frame by the court. And im confident that well do well in that situation for a multitude of reasons. Theres a list of issues that the court has to decide use to decide on it. Is there irreparable harm to the plaintiffs. And two is there a likelihood of prevailing on the merits in the argument, i think well be good there. Then we go to the actual argument itself. Theres several appeals courts that were contesting for. And when you stop and think about the fact that the verizon decision which overturned the 2010 open internet rules was basically based on the concept that the agency had imposed title ii common carrier kind of requirements without stepping up and saying you are a title ii common carrier. We solved that, that issue is gone. That was the big issue last time. And the courts sent that back to us. Thank you, we have addressed that issue. I feel confident on the outcome of the court cases. If you do lose, whats the next stop . Whats your short term plan . Not to lose. Thats the short term plan. Go ahead and cross off that. There are a number of bills proposed in congress that change the way your agency operates. Thats okay, thats your right. Its their per view to right, exactly. Are the bills that are going to proposed, do you think they will be conducive to the fcc working well, or harm the functioning of your agency . What i testified last thursday was that i had serious concerns that these proposals which are described as transparency actually are delay in introduced delay. And that delay in the rule making proce process . Delay in the fcc getting to a point where it can make decisions. The Public Interest is served by getting to decisions. And that we shouldnt be building roadblocks along the way that allow the fcc to make decisions about the open internet. Whats going on here is, okay, there are specific things that the fcc has to look at both during my tenure and in all the years to follow. And the question is, will there be the traditional kind of process, which is open transparent and somewhat rapid. Thats your version of rapid . The alternative is to slow it down even more. And so what were talking about will the activities that are necessary to to enforce the open int internet rules be slowed down by the imposition of new processes that clog up the administrative process. These bills would do that right away zm. What was the response . The republicans werent too happy with me. They drive you through, was it five hearings and eight working days after the vote . Yes. How fun was that . I think you know the answer to that. Were they political theater to chastise you for doing your job . They say we want you to show up, youre the congress of the United States. I respect the congress of the United States. I will show up and you respect the congress of the United States . Yes, sir. Yes, sir. Youre the guy that says yes on that poll. We only have a few minutes. You were in Venture Capital for about 10 years, you watched the texting as a hole. One of the questions were always talking about among ourselves. Are we in a bubble. Is it a risk bubble. From your perspective, how overvalued do you think tech is right now. You have a conclusion in your conclusion. In this case, im congress, and youre the fcc. I lung up my spurs. I stepped out of that world. All i know is what i read in tech crunch. Actually, were not good. I cant decide. Once youre done with this job. Are you going to go back to bc . I have no idea. I truly dont. Im not exactly a spring chicken. I dont know if youve noticed that. Youre 69. Yes, ill be 71 when i leave this job. I may just play with the grandkids. Would you be open to being the chairman . She hasnt asked me. Thats popular. All right, fine. If you want to do it that way. Its not going back to bc. You used to work as lobbyists for both the cable and the wireless industries. Given that youve made a lot of nonfriends, im kind of curious, do your old friends call you up and ask me if youve lost your mind. They used to call me up and ask that question back in the old days. Im sewer yous. A lot of people we expect them to act in a certain way, given your past immoment, you really turned them on their head. I think you surprise a lot of people. Alex, when i was an advocate for the cable industry and the wireless industry. There were a couple lobbyist . Sure. I hope i was a good advocate for them. I have a different assignment today. My client today is the american people. I want to be the best advocate i can be for the american people. And thats how i look at issues. Okay. Well bring you back next year, and see how it played out and see if youre right. I look forward to it. Take care. How cool is that, direct from the source something a little bit unrelated to talk about. I took a newspaper class when i was a senior in high school, and my first ever mentor jamie is here supporting me, i thought that was cool. Can we give her a round of applause . When i was a kid, made in china stickers on everything. Everythings been made in china, manufacturing has been moved outside of the u. S. These guys didnt get that memo, we have people building stuff in downtown manhattan, brooklyn, and detroit. Theyre manufacturing right here within the United States, theyre going to talk to us about how hardware is eating the world. Please welcome to the stage matt burns. You really sink down into these chairs, dont you . My goodness. Thank you for joining me. Everyo everyone. Anyway, were going to talk about hardware today behave Jonathan Grado from brooklyn, and lemore freed. Thank you so much. Ill let you guys talk in a minute. But when i look at your companies, youre all radically different, you have a fundamentally similar story in go to market scheme. You guys are based in detroit, made in detroit is the big thing. You guys makes bikes, Leather Goods, mostly watches, and you told me a few weeks ago, you guys are making motors in detroit, just really tiny motors. I thought that was kind of neat, jonathan, you guys have a Family Business making some of the worlds best headphones. Thank you. Theyre hand made here in brooklyn. Yes. Which is really neat. Yeah. And if i may, lady atta. Hello. You guys are in the business of selling things that makers use to make things . Yes. Its very interesting. Lets start first with the question why do things, tangible objects . You want to start . Deep question. It is. I think that, you know, everybody, like all humans we love to create, whether its art or writing or technology, we love to do things with our hands. Its emotionally fulfilling. So whether were making head phones or watches or software or hardware, i think it full fills a deep need to be creative. Thats great. And jonathan, your family has been doing this for how long . 62 years last month. 62 years. Give us a brief history of your yeah. So in the early 50s my great uncle, he started building cartridges at his kitchen table. Cartridges . For turntables. So its that little generator that holds the needle. He realized that he really liked doing it. We also owned a fruit store at the time. He went around the corner, closed down the fruit store and was like, were going to get into audio. And from 1953 to 1990 we made cartridges, just cartridges. At the end of the 80s we were doing 10,000 a week and then one year it changed to 12,000 for the year. There are a ton of more things that are more practical than turntables. So he was going to close up shop. My dad, who had been doing daytoday business since the 70s, came in, bought the company. We lived on the top floor from 90 to 99. And from 95, it was my mom and dad going downstairs and building the orders. Wed get an order for ten head phones and it would be a party. So while i was building legos you were building headphones . I was also playing with legos. My parents were building headphones. What keeps your family involved or driving your family to keep on doing this . Thats a great question. Thanks. My great uncle was a master watchmaker and he started tinkering with cartridges and fell in love with it. My dad trained with him and he also fell in love with it but he focused more on building the headphones. And i mean i used to be embarrassed by my familys company because no other parents were building these things. So on career day id be the only one who would come in with head phones around my neck and no one understood what was going on. I stopped telling people that. And then one day when i was in college a few years ago i woke up and like, i am so dumb. I jumped into it. Maybe it was because i was never forced. They still tell me you should go out and do something else. This is really what i want to do. Jack, your company in detroit, how many people do you employ making watches and Leather Goods . Were up to 400 people total globally. A little over twothirds of the 400 are in detroit. What have you found whats the reason people come to you to make the movements inside of watches . Is there something let me clarify real quick, matt. The made and the make and the terminology can be construed. We like to be clear and authentic with how we present what were doing. Were actually building movements, were building watches and bicycles in detroit. Our Leather Goods are made in the United States. But unfortunately given the industry today and where we stand here in the United States in terms of making componentry for watches, we have to source components in from all over the world as we do with bicycles. And then our Movement Components come from switzerland and we assemble everything there in detroit. Describe the process involved. The made in detroit part. You guys actually built a watch factory recently in detroit. It could be argued that was the dumbest move ever. But we did it anyway. And its been an incredible journey. Weve been able to train local detroiters to build watches in detroit and to build movements in detroit which is very exciting. Its an industry that left our shores about 50 years ago. And today is alive and well again in detroit. Detroit, michigan of all places. So the company shinola, when you were looking for a place to house the company, you did a nationwide search, correct . We did. Was there a practical reasoning choosing detroit or was it a marketing opportunity . You touched on it a minute ago. We are making motors. The motors power the watches. A little quartz motor thats powered by a battery. If you want to make a motor in the country, theres not a better place than the motor city. When you get to motor city and meet people in that town, you realize theres Something Special there. And you know, the city and the community has really given us the good old bear hug and we realized that very early on that the people there want better and they want to move, not just that region, but they want to move our country down the road and bring back manufacturing and bring back manufacturing at a level of quality that we like to represent as well. Now jonathan, you guys make your head phones here in brooklyn. Why do you still do hightech manufacturing here in brooklyn, or assembling . So were in a people come and visit us and expect what they see is like the entrance to something bigger. But at the end im like, no, that was it. Theres nothing more than that. Yeah, its, i think its that my dad is really happy being in that building and being that close to the product. He still goes in six and a half days a week. Hes a big fan of the machines that dont have software because he can get in there and fix it and then we have one machine that does work on software and it breaks, thats when we have to call in a specialist. But the old machines from the 40s, those are our workhorses. Our family has been there. So i guess a better question would be, could the head phones be the head phones if they were made elsewhere . We can still get the sound as good as they do but the story would be different. And were not into that. So youre going to stay here for the long run . Oh, yeah, im pretty sure. How many people do you guys employ . At the whole company, theres like 20. 17 are in brooklyn and 3 work from olie. So you guys sell your product based on story. What do you see as your Competitive Edge . I think by far the Competitive Edge that adafruit has is what you learn, the knowledge and the story behind it. We actually do have the best dined technology. This is a tutorial company. We teach you a skill which is solder bing, microelectronics, you follow our tutorials, we have like 800 tutorials now on our site. At the end, its like, did you like this tutorial . Would you like to follow it . Click here to follow your card. Thats how it works and we get to focus on the quality of instruction and the quality of the goods. Once people have that first unboxing experience learning, theyre like, wow, that was actually not so hard. Like i can become a maker, i can do electronics design. They become addicted to it. Who do you see as your key customer, then . Oh, everybody. A lot of the customers we have right now, the growing market we see is cosplay. A lot of people who do cos play i dont know if youve been to comiccon here or other events, but there are a lot of people would want costumes and they want to integrate sound or lights. We have a lot of people who are into fashion and they want to do wearable electronics. Like the flora people tell me you bring toys. Yeah, thats right. So you sew this on to your costume and its actually really easy. You dont have to go to m. I. T. And spend 100,000. You can learn all this stuff on the weekend. How much do you contribute the success of your company directly to you beating out there and being the visible face to this company . I think its important to have a face because for every company, the culture comes from above. So even though we have 85 or so people, what i set up, what we see is what i put into it and what the employees see. So i think its important for the ceo to set the culture and continue to disseminate it. Right. Great. Lets switch gears and talk about crowd funding. Crowd funding has exploded over the last few years, right . Everything from buying kits that you guys sell to selling headphones and watches, theyre all people are trying to crowd fund and start. Now, think back to when shinola started. Would it be possible for a company to raise enough money through crowd funding to even build a watch domestically . I guess it depends on the skill. Man, im not an expert on crowd funding by any means. How much money do you think it would take to start a small watch company here in the states . I dont know. It depends on, again, what you want to do. If you want to make a couple of watches a year, you can start it up in a bedroom. If you want to make a case and you want to make the crystal and you want to make the crown and make a watch like, you know, there are some makers here in the United States and theres a guy in pennsylvania who is making, you know, i dont know how many makes a year, but hes doing it in an old bank. So i dont know, man, to be honest with you, what kind of money you would need to raise. How about a little to a lot . How is that . Thats fair. Do you ever see a situation with crowd funding to start a product or pay for a product, jonathan . I dont think so. Weve never taken any kind of funding. But i know whenever some big kick starter success starts my mom is like, why dont we just raise 2 million. And im like, its not that easy. Im not a funding expert or anything like that. No, thats fair. Crowd funding has exploded, but then theres been a lot of failures with it, as well. Lemore, when you look at all this stuff, people come to you to prototype a lot, right . Yeah. We see kick starters and im like, thats an ada fruit thing. The electronics ones, easily 20 , 25 . What do you think people are doing wrong with the crowd funding . I think that, you know, theres a lot that goes right with crowd funding. So i dont think its like if you do crowd funding youre making a mistake. I think that the people who use crowd funding as one tool in their toolbox are the ones that get the most out of it. Of the kick starters ive seen that have been successful its people who have taken something to manufacture something before and theyre like, this is an evolution of something i already did. I made headphones, now these headphones have a slightly different effect. Maybe they have audio blue tooth. Ive designed the headphones. I know how to build and get cones and do the Power Management and all that stuff. Those people succeed. Not always, but usually. The ones that struggle are people who i think they look at, you know, the electronic market and they say how hard can that be . Like how hard can it be to make a watch . You can buy a casio for 2 like it cant be that hard. And they dont realize the decades of experience that are required to get to that point. So i think that i think crowd funding is only the first part. But if you have experience with design for manufacturer, you can use it properly. If you and your crowd Funding Campaign and now youre like, all i have to do is hire an engineer, youre going to have a bad time. Right, right. Jonathan, youre smiling over here. What do you see as the big pain point in training people to build your product . Luckily, most of our staff has been with us for over a decade. We dont have a high turnover rate. So i havent had on to train anyone. So i guess im looking forward to that. But i think its just you need to sharpen that skill. With our cartridges. We tip our cartridges with diamonds and then if the dmoond diamond doesnt go on just right, the whole entire piece needs to be scrapped. Its practice. And i guys have the same. Ive been to your watch factory and its quite astounding. Its right in detroit and right by the old General Motors facility. And you have this clean room where you have people assembling absolutely microscopic parts. How do you train somebody to do that . Or what do you look for . Well, you look. I mean, theres a visual test and a dexterity test and overall Aptitude Test that people take. But the beautiful thing is, weve been able to train people to assemble the movements and the watches. And we look for, obviously, a steady hand. But we look for people that have character about them and people that are willing to learn something new. And thats what we found in detroit are people that have this incredible will and desire to want to make things. And have the patience. I dont know that people understand how difficult it is to sit and do the same thing a thousand times a day. If youve never been into a factory, it might be hard to wrap your head around that. But seeing someone do the same thing a thousand times a day helps you understand how challenging it is. For me, i dont know that i could do that job to sit and do the same thing time and time and time again. But weve been very fortunate in finding people who pour their hard and their soul into each and every watch or bicycle. Or leather good that leaves our factories and our facilities in detroit. What are you working on now that youre most excited about . What are we working on now . Well, were working on expanding our capabilities of leather manufacturing in detroit. Today we make about 50 of our leather straps are made in detroit. The other 50 are made down in largo, florida, with a different manufacturer. But we would like to expand our ability to make tech accessories, so ipad cases, covers, bags, wallets, etcetera, there in detroit. So we have to train people to be able to do that. Could we see a shinola watchband for the apple watch sometime . Oh, boy. I was waiting for that. Our stance on the apple watches was that our watch is so smart you can look at it, it can tell you time just by looking at it. So, you know, thats kind of all i have to say about the apple watch at this point. I like that. Jonathan, what are you guys working on here in brooklyn now . Well, we dont come out with new headphones every eight to 12 months like some other companies. How many products does your company have in the history . 13, 14. Just headphones, not cartridges. Theres a lot more of those. Our first head phone came out in the early 90s and some head phone res sprinkled into the lineup until 2007. In 2007, they got a whole revamp. This past june was a new generation. But we are working on some limited editions and i think were farther enough along to talk about our next limited edition head phone were making headphones out of brooklyn trees. So were taking trees and making headphones out of those. Thats like the most brooklyn were going to get now. Thats hip. The hipsters will like that, dude. Yeah. Only one person even knows what the word hipster means and thats me. Im the youngest one there by 35 years. Were out of time. Thank you so much for joining me today. Thanks, matt. Thank you all. Okay. I just got yelled at backstage because ive been forgetting this whole time to mention we have a whole give away thing that were doing that i just learned about. So if you like gopro Everybody Knows what a gopro is, right . I got one hand. Guys are active and engaged. You all know what a gopro is. Weve got the new black one, like, with a head mount its like literally everything you couldny with a gopro weve got back stage. Our winner will be selected in some way that i dont understand at all. But put a selfie of yourself on instagram at Techcrunch Disrupt and use tcdisrupt. And well choose on the third day. God chose on the third day, seventh day, Something Like that. Im excited about this next panel because this is a taste of the future. Were going to talk about modern commerce and thats exciting and thats obviously going to change as we move into the future. What im really excited about is were about to bring three incredibly successful strong women on our stage and one token male. Get ready for that. Thats what its going to look lite like from here on out. Please welcome to the stage julie, jennifer, david and our moderator, colleen taylor. Have fun, guys. All right. We only have 20 minutes and each of you are fantastic and i just want to dive into our conversation. So for the benefit of time, im going to do a quick rundown of each of your companies and what they do. David tissue is the cofounder of spring, which is a mobile marketplace for brands to sell directly to consumers on their phones. David is also an investor, well known here in new york, probably to a lot of you. In the middle were happy to have Jennifer Hyman who is the cofounder of rent the runway, which im sure a lot of you know about. Its the online definition for designer apparel and accessory rentals. And they also have a subscription business and an ala carte business, which were going to talk about. And to my right is julie frederickson, who is the founder of stowaway, a direct consumer ecommerce startup that makes makeup that you love in small sizes that you can carry and actually finish, which is a novel concept. So, jen, i want to start with you because youve been doing this a long time very successfully. And whats interesting to me in the past couple of years is that rent the run away was so established as an Ecommerce Company and you guys want some brick and mortar locations, some showrooms. What made you decide to do that . I think snap building a brand is always multi facets and you need to think about all the channels through which youre going to acquire customers. Weve found that our physical Retail Stores accomplish two things. Number one is theyre the most effective way for us to spend effectively marketing dollars because they have the strongest brand impact on the customer. Its much stronger to have a physical retail store than to buy paid ads on google, as an example, especially when youre trying to serve up to the customer a new Customer Behavior like renting clothes. The second thing is by nature of having a physical retail store in a market like chicago or d. C. , which are two of our markets where we have Retail Stores, im able to use that store like a mini Distribution Center and provide a better level of Customer Service and experience to all the women who live in that market. Because im in the business of renting clothes, theres a percentage of the time where you will receive something as a customer and you will not like it, it will not fit. That is kind of a Cardinal Rule of ecommerce. Now that i have a store in the gold coast of chicago, if you live anywhere in that area, and lets say you receive an order and it doesnt fit, we can currier you more options from the store. So what would have been a return, now comes back and is counted at cash. So using the store as an operational hub is incredibly important to solve problems that also allows us to have a last minute business in those cities. So around 30 of fast fashion, so h m, etcetera, are of their revenue comes from people having a last minute need and going into the store and booking it. And now we can really compete with fast fashion, as well. Is that something that you always knew you wanted to do from the very beginning . Did you guys have this dream of having a brick and mortar store or was that something that came up later . Having stores with something, that did come up later. Weve seen success of some of our friends companies, having physical outposts and seeing how it ignites the brand and we still are in the ecommerce business. People love to see and feel the inventory, try things on, it addresses a new customer segment. Now the difference between us and a traditional retailer is we see a strategy of potentially longterm having 15 to 20 stores in major metros. We dont ever see a strategy of having hundreds of stores. Which is what a traditional retailer or brand would do. Do either of the two of you think a retail store or brick and mortar shop is in your future . David, ill start with you. To me, i think what jen said thats super important is, a, extending the brand and, b, service. You need to provide your customers with fantastic service and if that means the ability to exchange something because it doesnt fit the day of your event, if youre renting a dress, thats a vital piece of their pie. If for spring, were working with other brands. Our brand partners, they have their own stores. Were not looking to compete in the channels that they exist. If youre a passionate brand evangelist for a brand, you may download their app. But if youre a shopper and you love a brand, but not obsessed enough to put it on your home screen and an app, how are they going to reach you on your mobile . Thats where were trying to fit in. For brands to figure out a communication and a Sales Channel where theyre able to control the entire experience, thats what spring is to their brands. Is that going to extend offline . I dont think in the near term theres marketing opportunities to take your brand and put it into places where consumers can find it more successfully. Since 2009 when we launched the company, one of the major things thats changed in shopping is that a huge portion of discovery of new products is now happening on instagram and pintrest for women. So those pintrest and instagram basically serve as virtual malls or virtual kind of cataloging for every woman across the globe right now. So the business of spring is very smart in how theyre using instagram as a channel. Thanks, jen. So i think whats really important to remember is that direct to consumer means youre interacting directly with the consumer, right . Like it seems really stupid and obvious, but Specialty Retail is direct to consumer. When you go to a small and you go to an ann taylor, thats direct to consumer. Anyone who is building a direct to Consumer Brand means that any channel through which i can directly have a conversation with you, we will explore. So its very new. Would he have been alive for i think ten or 11 weeks. Whether or not we do a store is far in the future. But all i care about is reaching consumers in the medium thats make accepts for them and physical mediums do make accepts. For these brands, and you definitely understand this is theres a margin involved, right . When youre a wholesale brand and youre giving up half your margin to that Retail Partner versus a brand like h m zarah, stowaway, theyre selling direct to consumer and that brings down prices. Thats happened offline, brands build their own stores. On mobile, that channel is really hard to develop, again, because consumers raise your hand in the audience if you have an individual brand app sitting on your home page. Look, we have a lot of people here. Nobody raised their hand. One. And hes faking it. Its like please download our app and you can get this. Seriously, theres nobody who is waking up and downloading that brand app to go shopping. They might download the brand app because they love the content, they love the community. Theyre not going to download each brands app to shop from that brand and i think thats the struggle with mobile that has been solved offline and on the web. The future of retail is the end of wholesale. And i think thats why spring and runway retail is exciting for me. Im thrilled to be able to go and rent the runway and be like this is what i want. Im wearing something now. And just knowing that those experiences are going to be future because it just makes more money for everyone. Thats kind of why were all here. Everybody benefits, both the brand and the consumer benefits. Technology is supposed to remove middlemen. I would imagine, though, it still would be hard to turn down if someone were to come to you tomorrow and say we would like to have stowaway in all of our stores worldwide, would you say no . I have. I turned down a 10 million p. O. Not from them, but from another retailer. How many women are in the audience . I have a struggle seeing. Theres not a ton. But of you, how many have finished a lipstick ever . Yeah, thats what i thought. So the makeup industry is highly entrenched in a position in which everyone is a wholesaler. When youre a wholesaler, you care about your margins which means theyre latching enormous products that none of you are finishing. One of the reasons no one manufacturers the smaller sizes is theres a cost of goods issues and it costs the same to make a smaller size as well as a larger size which is why theyre selling you costco sizes you cant ever finish. Its not the customer experience. There are plenty of ways to scale and weve seen it with all of our Brother Companies in a direct way that dont involve cutting out all of those margins because we dont make any money off that. There are two things to this. When youre looking at a retail experience, the retailer tale takes southernship of that experience. When youre working with a marketplace like spring, we allow them to use their own packaging experience. The customer can take a videotape and bring it online like they do in all of these brands. So i think thats the piece, too, thats important is to give the brand the ability to sell their product in a way that they want to sell them, which tells their story. I think that when amazon started and has become a huge and successful as it has, there has been kind of a point of view in the tech world in particular that ecommerce is just better. Why would you ever use a physical store . Now that you have ecommerce and mobile commerce . From the customers point of view, yes, its much easier to order your commodities and your essentials on amazon. But there are still reasons why you would go into a physical location, whether thats discovery of something new, whether its experiential, whether its just fun. Now, it happens to be that startup webs because were a Technology First company, you know, we started most of the people that work at rent the run away are in engineering or logistics. I can recreate what a retail store is to service the customer need a lot quicker than a Traditional Department store ever would be able to. So i can understand that customers want to come into my store for personalized styling and a unique experience. So a huge part of our business is subscription where people have essentially a netflix for fashion. You can receive three things at a time off of your queue, et cetera. Imagine a world where you can come into our retail store and take the necklace that julie is wearing and her bag and say, im tired of this. Here it is. I want to kind of steal two things from the store and walk out of the store without paying, were going to beacon you and grab whatever you want. The store is essentially a portion of this dream closet that were creating. I can do that because i can build out that functionality and disrupt the industry way before an anticipate mayor with do that. Youve seen this first hand, rent the runway has been a pioneer. I feel like what weve seen is these incumbents trying to appear more savvy because of this, because of this threat of disruption. So what has that experience been like from being first mover here and now were seeing it seems like more pressure from these Big Companies whether they want to offer a better experience online or have these parts of your business. I think its better for customers if everyone ups their game. I dont see anyone entering the rental sector in any way, which is great, because its really complicated to do so. But i welcome anyone who wants to your question, i think as we started spring and as we went into this business, its been fascinating that in the tech world, everybody who sells something is grouped as competitive. So anybody in ecommerce is overlapping because were selling stuff. If you go out on the street, walk up eighth avenue or across 34th street, theres hundreds of stores. Theyre not all directly competitive with each other opinion and there is nuance in each of the offerings. So i think in the tech world theres been a broad assumption that its everybody against amazon and if youre selling anything, youre competitive with anybody else would is selling anything. I totally agree. We have 5 million members right now and on average, theyre 25 years old, which is 25 years younger than the average age of the traditional designer customer. But people views as competitive with these things that have no relevance to you, right . Completely. But i think there has been a change where the incumbents five years ago might have thought i was competitive, now they actually think that i am adding to the market and increasing the total Addressable Market and to just build on your point, not only are many of these ecommerce businesses not competitive, but one thing that really benefits rent the run away is the existence of spotify, netflix, birch box, which is all about discovery commerce, class pass. Anything where you would change the model in which you consume things, that helps my business grow because it creates a mentality around access and rental and new ways of getting what you want. Anybody else who is selling something on mobile and teaching consumers that buying something nice and on your phone that will show up the next day is benefiting our business, its not hurting our business. And so i think that theres a broad education thats happening in the market around new ways of buying things and new ways of getting those things delivered to you and what those experiences can be thats benefiting all of our businesses. Do i think investors have you seen a shift how investors are talking to you and your respective businesses . Is some of that concept of if youre in ecommerce, youre under this one umbrella and you might be competing with amazon. I imagine some of that comes from the investment community. Has that shifted, has it become more nuanced at all in the past few years . Of course. When you have real numbers to back up what your investment thesis is. Right now, when we raised our last round, they were investing on the success of what we had done, not the dream any more. And so rental is a much higher gross margin business than if i were just to sell that product because its utilizing your inventory more effectively. I also think that having more female founders and having many of those female founders being extremely successful has also had a real benefit in our fundraising over time and hopefully were a part of that. You know, i want to see as many female founders actually succeed in creating multibillion dollar businesses because it liftses all boats. I thought it was amazing last week when the news came out about parker and their recent round. It helps everyone in new york to see other businesses that are successful here. We have to start thinking of ourselves as a community a lot more. Julie, whats been your experience in pitching a Cosmetics Company . I think cosmetics will be this year as food was to last year from a ventral perspective. The market is so large and so few people are playing in it that theres so many opportunity. I quote the statistic endlessly, but 70 of the industry is consolidated into ten conglomerates. When Technology Comes into a space that hasnt changed in 50 years, thats real money. From that perspective, our fund raise was a breeze because the white space is very much there. I anticipate that it will get entirely competitive. But makeup, just makeup is four times the size of shaving and shaving is killing it as a category online. So i think its where there are two trends, where you commodify and you brand. Branding has better margins and were seeing the success of that branding because thats what consumers resinate with. Were all going to do very well when we establish something that means something, solves a problem, makes womens lives easier and thats where money is. I also want to say that there has been the word fashion in the tech world is often viewed historically as being a dirty word. The reason why i started the disruptive fashion business is that its the second largest industry on planet earth. Its a 1. 7 trillion Global Industry that we are disrupting. The only thing thats larger is the transportation and automotive industry. Its one of the few things that people have to do every single day. You have to put on clothes. So at least i hope so. So lets understand where the stereotypes are coming from that five years ago when i went out to raise funding around a fashion company, people were like, oh, this is some kind of niche thing, etcetera, for women. Im like, no, its actually one of the Biggest Industries on earth. Our fundraising is and i think what differentiate spring as our Business Model, we dont touch inventory, were not doing warehouses, were not figuring out how to get the product. Were working with brand partners. We have 850 brands. Anybody from mark jacobs to ever lane to estee lauder. What were able to do is build a Business Model. The Business Model is being built first in country thats havent had a big ecommerce giant emerge. If you look in china, if you look in india, the marketplace model is what succeeded there. What happened in america is desktop and amazon came first. So if you start with mobile and if you start with brands having the ability to do the logistics themselves, the marketplace model, which is what were focused on, is totally differentiated and to consumers, it should deliver a better experience in the end. Were just about outs of time. I want to thank you all for coming. Thank you. Thank you. Thank you. Male, three brilliant females, love it. So like ive been saying all day, the new york tech scene is the best one and the other ones arent as great, including San Francisco. So weve actually yeah, thank you. I appreciate that. We can actually all clap for that. Go, new york. Yeah. Im proud of new york. Proud to be from here. Proud of all the companies out here, and i know our next guest feels the same way. The success or failure of this ecosystem with regards to Tech Startups is largely dependent on the decisions he makes while in office. We are truly honored to have him on our stage. Its a really exciting moment for tech crunch and im sure for him, too. Please welcome to the stage mayor bill de blasio. Thank you so much, everyone. I want to thank jordan to the introduction and jordan is one of my favorite kinds of human beings. She is a brooklynite. So i thank you, jordan, for all you do. Are there brooklynites here . Brooklynites . Thank you. I want to say its a great honor to be at Techcrunch Disrupt this conference. Everyone knows its an extraordinary opportunity to talk about where we are Going Forward and what it means for new york city. And we are so energized by the Tech Community. We think it is quintessential to the future of this city. I believe theres tremendous opportunity for further growth here and great opportunity for the Tech Community not only to make is a stronger city economically but to make us a fairer and better city. So im thrilled to talk to you about some of the things were doing and some of the ways i look forward to working together. I want to take a moment to acknowledge some folks who have done a lot of great work and are part of this growing community and deepening of the Tech Communitys involvement with the city as a whole. First of all, i think a great example are some of the schools represented today from our Public School system. Id like to shout out the academy for Software Engineering and the ralph mckee cet school on staten island, give them a round of applause. [ applause ] an extraordinary effort being made to pilot our schools around Software Engineering. It is great to have young people in these schools here to connect with this industry and deepen their opportunities ahead because they will be the leaders of the Tech Industry in this city in the future. I know you had the chairman of the fcc here earlier, tom wheeler, who i think has done extraordinary things to protect the freedom of the internet. And i gave them a lot of credit for standing up for open access. I also want to thank the members of my team and we are very, very proud of the team that we have put together at city hall, focus on the Tech Community and what it means for this city. I want to thank my council who has spearheaded our Broadband Access that we are very proud of. I want to thank our new cto. I want to thank jessie singleton, our digital director and the director of our tech Talent Pipeline kristin titus. They are doing an extraordinary job linking this community to the broader work of the city. Now, i will be quick, but it must start with a little bit of positive bragging. I like to brag about the glories of my city. Sometimes its tempting to feel competitive with other places that are well known for a technology presence. Maybe california would be an example. Well, this year, new york city has surpassed california in startup funding requests. And we are very proud of that fact. The tech ecosystem here provides nearly 300,000 jobs making it one of the biggest employers in our economy, generates over 30 billion in wages annually. And if having a transformative effect on other quintessential new york city industries, including food, fashion and entertainment. So the impact is great and the speed with which this has happened is breath taking and incredibly energizing. And a positive example of good change happening in the city. And i know, again, theres a lot more where that came from. I see the strengths of this community being the ability to open up opportunity for more and more new yorkers, including many new yorkers who have not had opportunity for the kind of qualities of jobs that you provide and have not had opportunity for the kind of career paths that you provide. I think thats why this community is transcended not only the way we think and the way we do things and helping to do things better, but in create a different economic paradigm that could open doors for so many of our people. From the beginning, we knew in our administration that we have to work with the Tech Community to make it truly a five bourough community. And i like what im seeing with the growth of this community all over the five buroughs. We had to expand the Tech Education and we knew that if we were going to achieve our larger goals of combatting income inequality that the Tech Community would be a crucial ally. From all i have seen, a willing and energized ally in the fight against income inequality. Let me talk briefly, three key areas were working on. Talent first. Our goal is to help this community by building an extraordinary pipeline of talent for the ever growing needs of the community. Our hope and our belief is that we do our work well and if we partner with you properly, over the next decade, a majority of tech jobs in the city will be filled by graduates of our Public Schools and universities. And that will be transcendence for this city. We know, again, these are quality jobs that you create. Jobs that actually define a middle class lifestyle and thats what we want for our people and we want to make sure every kind of new yorker knows that this community is for them in all five buroughs. Wooerve investing to create the tech talent pipe line, working directly with industry so we can Shape Training programs that get young people the right skills and get them to the jobs. We are about to announce in our city budget on thursday an additional investment in quni, in s. T. E. M. Programs for quni, especially for our twoyear community colleges. 29 million will be invested in this upcoming year and that will increase to 51 million the year after for s. T. E. M. Programs for quni. We are very excited about what that means and i have to tell you so much of the impetus from those investments came from leaders of this community who said we love some of the tremendous things that are happening. We need them, but we need a broader approach that gets more and more people, especially young people, the skills that will give them opportunities of all kinds in this industry. And quni is the perfect tool for realizing that vision quickly. Second, were focused on giving all new yorkers, i want to emphasize the word all new yorkers Broadband Access. We want to defeat the Digital Divide. So were investing 70 million over the nn next ten years in broadband infrastructure. Much greater investment than youve seen in other places. We believe this is necessary. One of the key realities is that we know this city cant be a place of inclusion, cant be successful if so many of our fellow new yorkers dont have access to the internet. So were building the worlds largest, fastest, b free municipal wifi network. In terms of the number of people who have have access, in terms of the numbers of devices that will be out there to connect people, in terms of the speed that it will allow them to connect, it will be the largest and fastest in the world. Over 10,000 hot spots, obviously, connecting potentially all 8. 5 million of us and growing. We know this is something that has to happen to realize our vision. We just put out a plan in the last ten days called one new york. It is a plan for the future of the city, and its a plan that looks at everything from Economic Growth to resiliency to sustainability. And adds to that notion that we must address income inequality and its one that is environmentally sustainability and economically sustainable for its people. We need to hit both notes at once, and that is what our plan addresses and thats why broadband is such a crucial piece of the equation. Third, innovation. This community understands in a particularly powerful way that innovation has to be a constant. It can never be feared. It must be embraced. I can safely say in government we have not always had the best track record when it comes to innovation. In fact, a lot of us have been frustrated over the years at some of the bureaucratic road brocks to necessary change. Not just on the macro policy level, but literally on how we do the work daytoday. What weve found is working with the Tech Community, we are figuring out ways quickly to do things a lot better and were listening to the community when people say here is how government can work better, but here is how the community can help the government work better and can be more of a partner. Were trying to respond to that energetically which is why we appointed the first ever cto for new york city. Which is why my council, mya wylie is spearheading our broadband Expansion Efforts because we understand that we can do Something Different and better and we want to be pushed by this community to be different and better and to innovate. The fact is, there are so many examples already. Members of the Tech Community have helped us to find a better way of doing things. Weve pulled together a Broadband Task force which we are really excited about and we thank all the members of task force who may be here or may be watching right now. This is a group of experts that are going to help us close that Digital Divide. We pull out calls for innovation, places where we believe the community can help us to specifically solve nagging problems that government has not resolved. We believe all these efforts will help us reshape the city. So ill end where i began. The goal is a stronger city, economically the goal is a better city and a city where this community grows, but we have to do it in a way that is more inclusive and more fair than the new york city of today or yesterday. That is our vision and we see this community as one of the great allies in that effort to create a better city for all. Thank you very much. Hello there. Why dont you have a seat. All right. Another round of applause for mayor bill de blasio. Were going to bring out kimmai cutler. Thank you for coming. Youre welcome. The former mayor of bloomberg was a big proponent and after the crisis, you know, that strategy helped pay off in terms of the job market and the rebound. What is your what kind of mark do you want to leave on tech in new york and how is that different from the Bloomberg Administration . I think bloomberg built a good foundation. Obviously, it was very native to him with the work he had done previously in the private sector. He reoriented Government Policies towards the growth of the community. I think that was fantastic and he certainly gets tremendous credit for cornell tech which were very excited about. But i think at the same time we take a more populist approach. We are trying to build on that foundation, but build out. Build to all boroughs. We want to see a much more diverse tech in every sense. We want to see the opportunities that are in the tech sector available to every kind of new yorker. So we have a muscular effort in terms of training, in terms of the efforts we want to undertake in our Public Schools and universities. It all adds up to creating a much bigger talent pool and were proud of the fact that we believe the only way we get there is with a strong Government Role working with industry, but the goal is to make this industry this community, this industry a transcendent part of the efforts to fight income inequality and thats a supreme focus for us. One of the things that you one of the differences between the finance industry and the Tech Industry is the financials industry favors a lot of office space but tech tends to like you know, theres tech offices popping up. How much do you think about rezoning these other burrows for commercial Office Development . I think, to begin with, its crucial to be a five burough industry. One of the things im thrilled with is thats not an idea. Its a pleasant reality. And we want to support that. I think in the first instance theres a lot we can do with our xurnt rezoning. I think there may be some specific areas where there will there would be smart rezoning around live work space where theres been a great command for. And were trying to build a super structure around that in terms of Affordable Housing and creating better transit options. But i would say right now we can accommodate a great expansion of this industry in a lot of our communities without needing to get to rezoning. Speaking about this populist approach attack, i mean, since google released its diversity numbers, basically this month a year ago, weve seen the data for lots and lots of companies. Its very obvious. Its predominantly white, its predominantly male. And when i talk to Tech Industry leaders, you know, the sort of truism is that, well, its a pipeline problem. To what extent do you think that the racial makeup of the Tech Industry and gender makeup of the Tech Industry has to do with cultural shortcoming of the industry itself and the way it hires people versus whats coming out of our k through 12 system . I think that moment a year ago was a wakeup call for all of us. A lot of soul searching occurred which is good and healthy. I think part of the approach weve taken in government where you could argue some of the same historic issues have been raised in terms of pipeline. You know, im very much in the if you build it they will come school, meaning if you send a message from the beginning of inclusion, if you insist in the hiring process that there be maximum opportunity for inclusion, you find a lot more success at inclusion. Our entire tech team happens to be women, including some women of color. Our administration thank you. Our administration as a whole in terms of senior jobs and our administration across all agencies is 53 women in Senior Management roles for the entire new york city government. So i think it is quite available if the mindset of what is valued changes. I would argue this is not just about social responsibility or building a more inclusive society. I think its smart in terms of recognition of markets. Who are going to be the biggest markets Going Forward . The majority of our people are women, obviously. We are in a society that is increasingly people of color and an increasing percentage of our community. So i think the further integration of the sector is good for everyone and every sense. Were going to try and do all we can through our Public Schools, our public universities, our Training Programs to really improve that pipeline. But i think one of the things that people in the Tech Community can do is meet us in that process, help us figure out how we can do that well. But then really lean into hiring people that come out of our Public Schools, our public universities and our Training Programs. Youve done this program. Its a 10 million effort. When i look at a lot of the over the past several months, and the year ive gotten to know a lot of Different Community groups and organizations and different parts of the San Francisco bay area. Also, organizations here Like Coalition for queens and theyre often run by dedicated, invested, Wonderful Community leaders. But those graduating seems so small relative to the kind of needs and the skills gaps that these employers have. 10 million seems small in what Tech Companies are going to hire if youre going to ask them to hire locally. We continue investing more deeply to ensure that the City University system is a constant generator of talent for this community. If you think about the impact that mentorship programs would have, internship programs, summer jobs and were going to emphasize we want people in the community to participate in all those, one of the things we want to do is we want to constantly see if its working. This is really one of the greatest opportunities to get our people good quality jobs. If we think theres more investment necessary to achieve that goal, you know, thats going to be something were very open to. How are you looking to get that feedback . Whats the best way that Tech Companies can do that . Certainly the tech Talent Pipeline is an example and the working groups we put together with the community to give us that constant feedback about what kind of training is needed that will actually maximize the likelihood that people going through the training will get to a job. So were thrilled that our tech team is in constant dialogue with the folks doing the hiring and we want to constantly adjust the training approach to the literal and specific needs of the community. Thats something i think was not the way government handled things in the past. Im a firm believer, look at the jobs of today and look at the jobs of tomorrow and reorient. We do a half billion in training. This will give us perspective. Each year, a half billion dollars in Training Programs. Previously not oriented to the real economy. We want to do that now. I grew up in the i grew up in the bay area, in the Tech Industry and ive been reporting in tech for many, many years. I think about when i remember when i started coming in and working in tech journalism, it was about, like, realtime search and social, and every year its literally changed so much. One year, its bit coin, and the next its the on demand economy. I have a hard time understanding how public educational institutions can be as flexible as, say, some of the vocational schools that have come up like General Assembly or flat iron. How do you think about your allocation of time, resources between some of these boot camplike resources . Versus the quni system . I think its a great point. And i dont pretend that we will always be, you know, at the exact cutting edge. But i think the question is how we are increasingly improving our approach. I think if you look at it in terms of the core skills people need and the connection to the Tech Community they need, that is not necessarily implied oops. That does not necessarily imply that were doing everything perfectly or weve got people calibrated to the exact most recent trend. It does suggest if you turn out generation upon generation of young people with the basic skills and the orientation of this community and the sense that they belong and the exposure, which is why i emphasize internships and a lo. Within the community itself, what i would call the finetuning can occur. One of the other things that has been a central piece of your administration focuses on Affordable Housing. 200,000 units preserved. Both our cities from San Francisco have an incredibly crazy housing prices. Can you tell me a little bit about that . Sure. San francisco obviously had to deal with some of these challenges ahead of us. And we have learned from some of the struggles. We have the most ambitious Affordable Housing program in the history of any city. 200,000 units built and preserved over the next 10 years, its enough for about a half a Million People. So far, were actually very much on schedule to achieve that. Its wildly ambitious were getting a great response, and our investments as were going to show in a few days, were going to increase to support that plan, i think if you find enough housing for a half a Million People in the five borrows, its keeping this a city for everyone, for every economic group. But the work in effect never ends. Because we need a lot more market rate housing as well. Which were working on. And one of the challenges is, we have to make sure the highest percentage possible is for the folks at the lowest income level. A substantial quantity of people in this city are living below the level. I would like to get them out of poverty which is why our one nyc plan just published lit ralphly puts a goal to that much we want 800,000 people out of poverty in the next 10 years, it will require a substantial increase in the minimum wage, which is long overdue, and the state needs to work more aggressively on that front. Plus the Affordable Housing programs, a whole host of things, we are committed not only to building the Affordable Housing, but to matching it with a specific Poverty Reduction goal. Inclusion airy housing is a key component of your platform, its a practice we have in San Francisco. Were always debating about the appropriate share that is devoted to being permanently affordable. It seems to me like i get why were doing it. Theres not as much federal or state funding for Affordable Housing as it seems to be. It seems to exacerbate you do inclusion airy, the cost of the affordable units gets passed on to the market rate buyers. It feels like theres a tension there. Were grappling it with 12 , 20 , 35 . What does that do to our housing stock. These are real issued given the inequality crisis and the depth of it. Since the end of quote unquote the end of the recession. Its being felt by so many americans. Since the recovery officially began, the vast majority of the gains of the recovery have gone to the top 1 in terms of income. I think what it means is, we have to recognize how intensive our efforts are going to have to be to address income inequality. We have an aggressive approach. If some of those costs are passed on to the highest sector, i dont think thats unfair, because we dont have the federal funding, i agree with you. Its going to be a long time before we seafare federal fu funding its something were going to work on energetically in washington. Right now, society just stops working for middle class people, and for hardworking lower income people, that Society Stops working. People literally have nowhere to go, just not a healthy society, we think in a the Affordable Housing effort done aggressively, can be a profound part of the solution. Its the number one expense in peoples lives, we think we have to address it aggressively. Last thing, earlier today we were talking about ways that the Tech Industry can get involved and how it can work with local government. Do you have specific recommendations for the Tech Industry here . I sure do. I appreciate what wilson has done in 2er78s of education, im a big fan of ron conway, i appreciate theyre putting forward real models for this community. A Real Community wide levels of commitment that they think makes sense. Its healthy, it shows an engagement, if you think in terms of economic sectors, that shows a level of enlightenment and engagement from the Tech Community we dont see from every sector o