Will try to stop me with tonights mystery guest. First, lets get headlines from carol massar. Our authorityc has negotiated with creditors to push up repayments of bank loans until july 31. The islands main provider of electricity has until monday to repay some bank lines of credit. The authority has 8. 6 billion of debt. Asset management Asset Partners and calling for the at supply seller to consider a sale. Petsmart would be more highly valued by private holders than investors in public markets. Thank you. The Transportation Safety administration is prohibiting battery dead electric devices at airports. Your smart phone has to have some battery life in it in order to board the plane. With a more on electronics, i am alatesta whom m joins me from washington. He is behind the fortress phone which boasts a Self Destruct button. Tom, great to have you with us. Can you tell people what is a fortress phone . A fortress phone is a secure phone. It works on the enterprise and hardens your phone calls from end and. No man in the middle. How do you do that . Give us a little detail. We use commercial offtheshelf technology. We are focused on the out android platform right now. We manipulate the hardware in the phone and we add our own software so it can control the phone and everything that goes on when the phone is either being used encrypted or nonencrypted. What does it cost . If youre on enterprise, you have a couple of versions. It is part of the system it is about 1000. It is something a corporation or other organization is going to buy to protect individuals or executives. We have a silver version that runs about 629. That phone is more apt for the consumer market. In that consumer market, is there a special network that has to be in existence in order to datahe background, the that would maybe be stored with the companys server . The network resides with the people that supply the phone. It would be us in that case. When you have the phone on and you were using our technology, you have to be on our network. So, basically, that is how it works. How big is this network right now . The network is small because we are an early company, about two years old. It is a Small Company and coming into the marketplace as we speak. Give people a little bit of your background. You have been dealing with electronics and security for quite a while. I have been on the entrepreneurial side of Cyber Security for about the last 20 years. I am a tech junkie. I want to work the miscreants so i am very interested in all technologies that help protect whether it is private information, company information, intellectual property or whatever. Europe work in a Public Private partnership for the state of maryland, correct . I was president of the chapter for the state of maryland which is a partnership with the fbi. I was president in 2013. A very good organization. It involves a lot of civilians are trying to work with Law Enforcement to keep people informed about threats to the critical infrastructure. My area of interest was on the cyber side. Talk about the infrastructure in the context of this new tsa move to ban certain smartphones that may lack a charge. Give us the details. What do you know . Afteryou remember back 9 11, if you are traveling, very often you take your notebook computer out of your bag. You have to start it up so they can see that the notebook itself actually worked. The same thing is going on with mobile devices. What they are concerned about is that there are explosives in phones that are hollowed out so that they can be remotely detonated at some point. I beg your pardon. I was saying is that something that would be a response to a specific threat or is it a response to the greater sophistication of smartphones and tablet device is . I think what youre looking at is an ever evolving enemy. Someone that is very good at developing new technologies to exploit weakness and to enhance their effort to hurt their enemies. We have the evolution of smart phones and mobile devices at the present time which are being used by tens of millions of people all over the world. If you are looking to blow up an airplane, that would be something that a lot of people would have with them on the airplane. Tsa is very concerned about how to make sure those devices do not become a Transmission Base for evil. What about the role of social media . The backandforth that goes on with facebook and twitter and the use of those services with lets say the fortress phone . Media can use any social that the fortress phone kernel recognizes. What you cannot do is download a bunch of apps on your phone that the enterprise is not aware of. The whole thing with enterprise is to make sure that whatever is on the phone when it is in encrypted mode, it is controlled by both the enterprise and the user. If you tried to download some noton the phone that is authorized by the enterprise, you will be able to download it on the phone, you just will not be able to use it when it is encrypted mode. Talk about your highend phone. I believe he said around 2000 but of course connected to a system. Enterprise the system. Would this be the kind of phone you take the china . It will be the kind of phone you can take any place on the globe. The purpose of of the phone is to allow secure communications between you and anybody else on the enterprise. The ability to maintain privacy and maintain secure communications. Is there a device on the market now which reports to offer the same type of feature . There are a number of competitors, yes. The one getting the most press right now is a device called the black phone. What do you make of that . Is the market big enough for both of you . You are talking about tens of millions of people. The question is how secure do you want to be . If you have some really valuable information that you need to communicate and you are worried about it being taken away by miscreants, what you are going to do is go for the most secure capability you can for a designated number of people. If you want to go to a wider audience, the question is how secured you want to be . Due want to be bulletproof, 90 , and 80 . That is a business decision. Very interesting. Thank you very much, tom. The founder and chief executive of ziglad systems. We are going to stay with Technology Next and talk to the cofounder of a Company Called shapve waves, a 3d Building Company that can build the next veneration of manufacturing. It is mystery guest monday, timed your first clue. My mystery guest likes to suit up every day. Ons is taking stock bloomberg. Worlds largest 3d Printing Community and marketplace is getting even bigger. Shape ways announced it was adding four special metals, platinum, gold, rose gold, and 14 karat white gold. They planted a big flag in queens, new york. Ripple talk to the cofounder and chief executive , peter. Thank you. Lets talk about how did you end up you have been doing this a while. 2007, you got bitten by the 3d bug. 2007 because in we saw the opportunity about three renting. 3d printing. Of the 3d Printing Technology that we may be familiar with is this constant layering that goes on. You do something slightly different and what comes out is a cube that really is like a present or something you have to pull apart and dig inside. Tell us about centering plastic. Actually theng is name from lots of different technologies and one of them is a plastic you talked about which basically is using a laser and powder to make products in plastic. Presents. Pulling what sets this apart . The material you can use . It is a surface that everybody can go to. Plastics, butnly also a wide variety of metals, ceramics. There are all types of options people can choose from whereas what you were referring to as the home printer is only plastic now. All you need is a. Cab file sent to you and you will basically do it for the cost of the material . The user gets opportunity software. The world is completely yours because you can make anything you can come up with. You can put in all these materials. If you do not know how to use the software, not all is lost. Designers and that have set up shop and you can choose from 8 million products. If you like something, you can buy it or you can contact the designer to change it to bilduid it. You are marketplace as well. You can make little cars or also youys, but can make things out of precious metals. We started with plastics but then in 2009, we started offering stainless and we added silver. Quite a right wing to gold wide range of gold. People gravitated to making jewelry. It is a good product choice for them. Is there any limitation you see on how big this could be . We will get to the business side and a second but in terms of the scale, model people who want to make . We have different size limitations. Plastic again pretty big. Precious metals, we have a limitation that is pretty sizable but not as big as plastic. For those sizes, you are paying thousands of dollars for one item because it can make something in gold and gold is pretty expensive. It is oneofakind . Yes. Let us talk about the business. Do getnds of things the most requested from his term is the biggest growth right now . Jewelry is pretty strong. It is growing the fastest at this point. There are a lot of design items that dont have function but are beautiful to behold. There are quite a bunch of Home Accessories and gadgets. It is a wide range of things people make and that is the cool thing because we dont know what it is and then it is making someone happy. What about Industrial Products . People do make prototypes with us. They make parts for showcasing or to fix things. I am fine with that but we are definitely focused on the consumer market. What would you like to say about the Company Six Months from now . How big would you like to make it . We dont make any comments about sales but will be due say is we currently make 150,000 unique products every month. The end of the year, i wouldnt be surprised if it was double. What about the funding for the actual machinery itself . These are not things you buy off the shelves. The machines are available but they are expensive. We are community for the reason that the machines cost up to 1 million and we want to get everybody the ability to use these very highend 3d printers to make anything they want. The printer you are using could cost 1 million . Who makes a printer that costs that much . A the one made by eos, german company. Are they the leaders in this kind of 3d printing . Definitely. Are they also the kind of thing you find out they are capable of producing new things and you publicized that they can create these things that are so specific and small . The cool thing about three printing is the machine really does not care. You can make things that are small all to the way to the maximum size and it is up to you as the user to define it in. We have apps you can use to customized. What about in the medical world . Being able to grade parts for people . Implant and other things, although that is not our area of expertise. You founded this company in the netherlands. Why are you now based in new york . Good question. Old pretty fast at the United States was going to become the biggest market. We wanted to have an office in the United States. When we received our funding, we really ask ourselves where do we want to have our main office because we want to attract a lot of people joining the team . If he dont find them in the place, where can you motivate them to go to . It made a lot of sense for us to put our main office in new york. Thank you very much for sharing your story with us. The cofounder and chief executive of shape wave. We are going to talk about the socalled corn avalanche. U. S. Farmers expect a record yield for corn. We will tell you what this means for you, next. This is taking stock. Of Food Processing and Commodity Trading corporation Archer Daniels midland announce they are going to buy the Food Ingredients maker wild flavors the price tag is 3 billion. The deal marks the biggest acquisition yet. I am joined from washington by allen. Tell us about why they want to do this deal . Commodities is a very volatile business. Archer daniels midland, one of the Worlds Largest shippers ingrain grain is volatile. They are looking both for some diversity and some stability. Wild flavors promises to give them a little more of that. Furtherthem a little downstream, little closer to the consumer in countries where Natural Foods are more common. It expands the global footprint and it gives them a little more diversity within the Food Industry which should help Archer Daniels midland get a little more consistent financial performance. Do you remember capri, the fruit juice . Capri sun. We used to sit in Elementary School and read through the ingredients. Those currents are of that High Fructose Corn Syrup high fructose currenorn syrup. They didnt get capri sun in this deal. When you talk about high syrup, deccaenorn be the segue to tell us what is going on with the corn crop. A lot of farmers think they could sell even more. Koran is heading for another bumper crop. It is a traumatic dramatic turnaround we had that a drought. You are seeing the opposite situation. Farmers cut back on their planting more than 4 this year. They planted less corn and more soybeans. The usdas looking at record yields. That is making the corn crop larger even though they have less acreage. It is driving down prices which drowned drives down profit margins. It is a huge turnaround. What are the implications for what farmers are going to play next season or do we not know yet . It has to do with supply and demand and weather patterns. They certainly can know what the supply situation will be. At the tight inventory of a couple of years ago coming to a huge surplus over the next several years, you may see less corn planting bed in some parts of the country, corn is just what you were going to do. It is what the infrastructure is suited for. There is a history of this with agriculture where you have a real bust and then there was a huge boon. There was a big pull for ethanol as well. Ethanol has been a big driver of this market for about the past decade. You have seen the mandate level law and you were seeing in some ways less ethanol being required by the government in there has been before. The varieties never took oof. As you continue to have better seeds, yields, we are on a treadmill and the American Farmer is going to have a hard time getting off. Thank you very much. Minutes past the hour, time for on the markets. About 4 10 of a percent down seven points. The Dow Jones Industrial average loses 44. The nasdaq falling 34 points down three quarters of a percent. This is taking stock on bloomberg. This is taking stock on bloomberg. For a look at todays headlines, lets go to carol massar. Bill ackman spurgeon Square Capital management proposed 60 doctorate directors. Which is ahead of valients takeover bid has taken over a meeting. Highs winds and crashing waves are threatntening open now up okinawa. That is the equivalent of a category four hurricane. Health sector,al nearly 250 deals in the first half of this year which raised a combined total of more than 3 billion. Investment platform that focuses on the sector and they hope to launch 1000 companies by 2020. The cofounder and chief executive, steve, joins us now. Tell people what is a Technology Platform . You are trying to funnel money from point a to point b and hopefully when it gets to b, it grows. It is a Global Startup platform that has an academy for entrepreneurs to help them build businesses. And network of all the stakeholders globally that are helping these people build businesses. A by rewrite vibrant community of entre nous worse entrepreneurs. Theyre working to transform health care. How do companies who are seeking funding or device get onto the network . They apply. We have got over 2000 companies applied. Weve expected fast accepted 71 of those companies. It is the kind of companies in from different locations that they come from that is most interesting to us. Give us an idea of the companies the ones that were acquired. Whichompany called basics is a really risk one watches that has a low of different accelerometers and devices and sensors to actually detect when you were getting sick. Wearables . Absolutely. We have a number of wearables that we are very excited about. A company that was acquired by web m. D. And huge area where all of a sudden patients are taking control of their health but a way for doctors to communicate in between. The third one is really fascinating out of houston which was acquired by a company in the consumer genomicsbased. Anything that limits what kind of Health Care Entrepreneur can apply . Not doing anything and the therapeutic or medicine side. Not any pharma. Anything that touches data, that scales and touches technology. The undercurrent of the data piece. All the devices in the medical world art figuring out to collect data and analyze it to give doctors and patients and caregivers a lot of information from that data. One of the things that helps you scale is your roster of investors and people helping you run this. We have a great group of really wellknown entre nous or is that understand the power of the Network Effect which is a really our thesis for building the start of health. Everyone from steve case, jerry live in, brad mark cuban. The entrepreneurs that built other industries and outputting their sites and efforts in the health care industry. It feels like it might be a bit of an irony with steve case having sold it well aol. T deal not recruiting precluding them getting together on this. You have health care reform. You have the aging population. Mobile devices and sensors and ipad and iphones emerging in the marketplace. Finally, it is the golden age of argument or ship entrepreneurship. It would not occur in the 2000s. We are living in the beginning of an epic decade. I think all these wellknown people, as well as people like theyd Cleveland Clinic, really understand that the entrepreneurs that are imagining or reimagining are the ones to get behind. Aretartup health if you bringing together that academy you described plus the pencil the potential mentors, where do you come in . We have a stake in this company anywhere from 2 to 10 . We make money when we build the business. You invest in the companies . We have a stake in the company through the development of this program which last three years. We support them for the first three years of the business where fund raising and capitalization and Customer Development come into play. Those are the 71 companies in. Yoyou have a take the you match them with individuals or existing companies for joint ventures . That is where the network comes in. If it is a big network like ge or a small one, our whole approach is to connect them with the individuals that the organizations that they want to partner with and see how we can match make in a way that is actually going to help build a value in the company that is getting funded with as well as a large company. The Big Companies that want to lean in like ge and aarp and Cleveland Clinic and so many others that want to figure out how to partner with these earlystage entrepreneurs. You would then work with Investment Bankers at established organizations that would help them make deals . This is just a complementary set of offerings . All the stakeholders the ventureutical, the capitalists, the foundations all the different stakeholders globally that are interested in tapping into this one moment in time where i think it is one of the most exciting times in history to be an entrepreneur, to lean in and help these organizations at a moment where these Large Organizations do not necessarily have an innovation agenda but they need to a partner. Thank you for transforming all that information for us. Coming up, i will take a look at one company that is looking to become the netflix of lego. We will help you save some big bucks instead of buying those expensive bricks. Time for our second clue. By mr. Get started working in the fashion industry went my mystery guest got started working in the fashion industry when he was just 16 years old. This is taking stock on bloomberg. Bridge toward the that is admired by children and adults. It generated 4. 5 billion in sales last year. Fitactual lego sets together like jigsaw pieces can get a bit pricey. Some of the sets can cost over 400. At that price, maybe you want to think about renting. Play is a rental lego service. They accept requests for specific sets. I am joined by the chief executive and cofounder. Great to have you with me. Explain how you started this business. Did you have a lego habit . Thank you for having me here. The way it started was about a year and a half ago when i realized i spent about 3000 on my son lego. Said there at it, i is definitely a better way to go about it, a way that will make it a lot more affordable for consumers to get those amazing toys and make it a lot more convenient for them. Basically, we created the model based on the traditional netflix model in which consumers can choose the lego set they want and it is being delivered to them. Work . Y, how does it the user comes to our website, pley. Com, and can register and they can choose from a catalog of more than 300 lego sets. There are sets for girls and boys and for unisex and architecture. The user basically added to their playlist and they get the first set to their door, they at that and when they are done, they send it back and get the second set. Lego sete star wars as an example in terms of cost and time and how often this would happen. Great question. You look at star wars, obviously a great franchise. The lego set like the death star or super destroyer can cost up to almost 400. On pley. Com, you can get it for 39 a month which is about 90 savings on the cost of actually getting it. We save the user about 70 on purchases. Is there any kind of refurbishing or any kind of cleaning that goes on with the legos before you let them out . Getting the lego sets and figuring out is probably the most challenging task. We have the former ceo of netflix and we figured out that we developed a very complex out weigh algorthim, we a gramiece to 100th of and we can figure out from that what is missing within the set. We can replace those bricks with new bricks. They go to very professional, commercial cleaning and sanitation process that cleans them to the level of a restaurant. If you let your son and daughter go to restaurants and eat from a fork or a spoon, even enough only give them our lego sets. What happens at the lego users, children or a dull, if it loses some of the pieces . We know kids will lose pieces, that is a very natural thing. That no brakes are very small and tiny so we have left it up to a normal wear and tear which is about 15 pieces and we do not charge for it. What about the lego that have those motorized capabilities . Are you offering those as well . Ande plan to offer them extend other educational toys on top of lego. I think the notion is we are trying to advocate science and engineering which is supported by the federal government as a curriculum. The notion is we are leveraging the economy and helping kids that until now did not know how to share or learn how to share. We are the First Company in the world that teaches kids how to share. You have been doing some math of your own as well. You have raised nearly 7 million. That is correct. To make sure that our operation run smoother. We are investigating a second in a second and a second operation to reduce the shipping time. I want to thank you very much for joining us. He is the chief executive and the cofounder of pley. Time now for our mystery guest. I have no idea what it is who it is but the producers have put together some clues. My mystery guest like the suit up every day. He started working in the fashion industry when he was just 16 years old. My mystery guest was reunited last year but the company that he started. Let us bring out our mystery guest. I have to say it is not very hard. You are mr. Apud. Nice to see you. I didnt have to start the clock. Great to have you here. You started when you were 16 years old. What were you doing . Working my way through high school and spending every dollar i had on clothing because i loved it. I worked my way through college working at a great mens store. I loved it ever since. I remember you started out working at lauck ralph lauren. You actually created a part of your persona that you then took. When i worked for ralph lauren as one of the directors of design for four years, which was a great experience. Thoughtstarted i there was a point of view for menswear which did not exist which is a more modern american not so, not so preppy, traditional, and the same time not so european. Is a design to be for men as opposed to boys . I think i have always wanted men to look like a man and not boys. When i started my first collection, my first idea was to take men from being too ivy league and they get a little more sensual, a little more sexy using different fabrics. We hit a nerve and american man really gravitated. The gravitated towards you in the sense that you sold your company . For millions and millions. Issuewas the trademark and through the relationship of mens wearhouse which has been amazing, we required the brand. We bought the factory in massachusetts where we employ 600 people on making incredibly beautiful suits. You are going to tell us more coming up. My mystery guest is not a mystery anymore. Never was. Joseph abboud. More next. This is taking stock. My mystery guest is a mystery no longer. He is menswear designer joseph abboud, the chief creative director at mens wearhouse. I want people to understand a little bit of your pedigree in the business. Deal wards that you of one, the changes you have made in menswear making it more accessible to more people. I think that was the whole thing when i launched my first collection with the get to the american man and not a pretentious way. To buy that perfect suit that makes you feel good. You are wearing a navy suit which is a great standard. It is not about dressing for somebody else, it is about dressing for you and feeling good and being professional. I love that my whole life and every day is a new adventure. I saw the National Suit drive going on. It is the seventh year for mens wearhouse and helping americans who are out of work, unemployed to get gently worn clothing that is donated to mens wearhouse so that we can empower them to get back into the workforce. You always stand a little straighter when you walk into a Job Interview with that right suit. We have done an amazing job in terms of designing suits, selling suits, but also giving back to the community. Tell us about making suits in massachusetts. I grew up in boston the south end of boston. Exactly. I love clothing my whole life and i was able to work for ralph lauren. The factory in massachusetts has such a place in my heart because we have over 600 people who make extraordinary clothes. They make suits and jackets that we sell. The nice part about it is the garment is made with a chest piece which is more comfortable, made with italian fabrics, and it is an incredible value. It is almost like going home because it is up in massachusetts. I will throw out some names. Louis of boston. That was probably one of the best experiences i had. The idea to be a retailer and believe in something. Louis who was like my dad and mentor taught me if you believe in something, do it all the way. He was a brilliant merchant, probably one of the greatest. You have obviously known the industry has changed because of the online application of customized suiting. What you take away from that . I think it is a reality and i think it is great we can do things online, but there is nothing like the experience of walking into a store and trying on a great suit and have a tailor custom fitted to you. We employ over 500 taylors. Ilor. A guy walks in and tries on the soup but it is also the tailoring that becomes important. What are some of the trends now been men suiting in men suiting . The problem with trends is that they are just that. I always believed in designing in the middle or little more on the fashion curve so if i sell you a suit, i have an obligation to say if you buy the suit, it is good for you for three to four years. I dont want to tell you next year that the suit you bought was good last year and not good now. With a certain obligation we have a certain obligation to the consumer. I dont like anything to wide or too skinny. Theet us move away from office because we know everybody is trying to get more casual. What are you seeing in terms of the kinds of things that are being offered to men specifically for summer wear . What is interesting is the guys getting dressed up again. The young consumer has never really tasted that wearing of suit, the idea that is getting dressed up. Now with all the information on the internet, theyre learning about custom tailoring. Their was a real hunger for the young guy to get dressed, but a guy can use the a suit must differently. It is a suit of clothes. When you see advertisements for blue jeans that cost 600, what goes through your head . I was thinking has to be a fair price value proposition. I know the price of fabric. I dont think anybody should pay for a name, they should pay for a product. For me, it is about price value proposition. When things get too expensive, i do not think they are credible and i think the customer is overpaying. Are we going to see different lines of joseph abbouds . We have launched our collection now and it is performing really well. The signatures to do something were really proud of, the suit made in massachusetts. You will see sportswear. It is a lifestyle brand. That is something that everybody is trying to capitalize. How do you do that . How do you make that happen . I think you have to understand the consumer. I spent my career trying to understand the American Consumer and how he dresses both in his business attire and how do you dress to go to a brunch or meet your real life. That is what it is about. I want to thank you for fitting into our lives. Joseph abboud. Thank you for taking stock. Good night. Live from san francisco, welcome to bloomberg west will be cover innovation, technology, and the future of business. First, a check on your headlines. Cloud storage provider is raising an additional 150 million in funding. People with knowledge of the situation say the latest round buys thebought it and company sometime after delaying its ipo. If you recall, they officially originally filed for the ipu in march and was hoping to raise 150 million in the offering. Google is temporarily cpi