Transcripts For BLOOMBERG Bloomberg West 20150910

On andreessen harlot backed technology to track their own access. First, to our lead square plans to hold its ipo in the Fourth Quarter of this year according to people with knowledge of the matter. So what is interesting about this news . Timing. Sources tell bloomberg that its more contingent on Market Conditions. Either way, we have learned he has no plans to leave his job at square despite an open ceo job at the other company he founded, twitter. Here to help us answer these questions is our ipo reporter and a cofounder of button, a mobile platform or that has worked in the payments industry. What do you make of the fact that square is full speed ahead . Does this have more to do with Market Conditions despite the volatility we have seen . Guest right now it has more to do with Market Conditions. Even if dorsey does not and up in the top spot, square would still go public. Right now, we are going to watch market ability. The other thing to Pay Attention to his what the fed has to say about Interest Rate and whether the Investor Community gets a little certainty on what they are doing next. It seemsid that q4 and all pistons are firing foursquare for a Fourth Quarter ipo. Emily there have been a lot of skeptics round square, but sources have told me the numbers are better than people think. Is this Company Going to have a strong ipo . I think based on what i understand of their fundamental economics in their core business, theyve done a job getting margin that no one else can in the Small Business segment and that is tremendously impressive. I believe that roads well for their ability to serve that customer segment with new products, and that is where i believe squares core Growth Opportunity is offering Small Businesses an increasingly Large Enterprises more services beyond payment processing, whether that be food delivering and ordering, who setback was issued they had done recently, the ability to generate margins in their core business than other folks have been able to bodes well for their ability to serve that core segment that they are having a betterexcess in with economics and other folks are able to achieve. Interestingis coming from you you worked at google wallet. What are we seeing when it comes to other private companies and their appetite for ipos right now . I know you broke news about first data planning to go public. Our other Companies Going ahead or are they postponing . Alex everything im hearing is october could be a busy month. Is going to be watching and waiting for some of those things we talked about. First data we broke yesterday, they are pushing for a 2. 5 billion offering. According to my sources, that would be the biggest this year. The ipo market has been a little slow for 2015. That eating the biggest, it is still small for a u. S. Listed company. They are going to have to compete with the likes of a paypal running in this area as well. Been trying to work its way up the food chain and find some of these highermargin customers. Emily we have been talking about square but the western remains what is going to happen to twitter . I spoke to john kelly from vanity fair he said they bagged dorsey to take the ceo job at twitter and he refused, apparently because of his obligations at square. John we learned at one point earlier this year, the board didnt just act dorsey to return, they egg him, according to someone who was in the room. We are watching with bated breath to see what happens, but asked tonfirm he was take the job at some point earlier this year. Do you think jack dorsey can do both jobs . Mike jack dorsey is an exceptional executive, a man incredible work ethic. If you have ever worked for a aretup, there are folks who. 0 x in their ability to lead it is clear from folks i have woken with that jack dorsey has that ability. He is a rare breed of executive. Given his work ethic and deep , i am optimistic he could do both jobs were that necessary. Has a reallyquare good set of other executives who could run the business, but i jack is a product visionary and i think it is important he continues to lead square. Think you are in the minority there. Many experts i have in speaking to dont think its a good idea for him to do both jobs. Thank you both. , a stock we are watching Palo Alto Networks dropping after results from the Software Security Company Another Security Software watching shares rising on the back of that were cast. We caught up with the true point ceo about the next generation of cyber security. Isthe biggest factor of risk email. Thats where hackers go and target individuals with enterprise. We are seeing social and mobile more as areas where organizations have left them vulnerable and are ultimately looking for better protection there. We are seeing a significant number of attacks focused on wire fraud. The fbi had an alert in that area because it was becoming so prevalent. We see organizations in the finance apartment being targeted and we see one level from executives being more vulnerable and more likely to click on a link that is malicious. The security lands a biz so different that Security Posture has to be changed. Have two employed at Generation Technology to ensure they are well protected from this next generation of attacks. Callahan next, john tells us where he sees the next big investment opportunity. Emily the gender discrimination lawsuit that rock hill con valley is officially over. Ellen pao has announced she will not pursue an appeal against Kleiner Perkins. She explained her decision in a statement to lumber request. Statement to bloomberg west. They did not reach an agreement to settle the dispute the dispute because you would have to remain silent about her experience. Kleiner perkins has offered to forgo the legal fees if she drops the appeal. According to a person familiar with the matter, that still stands but ellen pao said the last she heard from kleiner was that they would not settle without the clause. I spoke with a partner at Kleiner Perkins who spoke with you worked closely with ellen pao. Sorry that this happened to ellen, happen to us and the tech community. This is a civil case, so is a question of liability. The jury found not liable, so it is not. John callahan is an early investor and founder of true ventures. He was one of the first two invest in fit it and sits on the company board. It so great to have you because we have in talking so much about startup valuations and what is going on in private tech. What do you think about it . John theres been so much conversation about high valuation in the late stage market, but if anything, im Venture Capital is underinvested relative to the opportunity. Undervalued as an asset class. What is most exciting now and driving High Expectations for Unicorn Companies is the in almaty of the markets we are investing behind. As an industry, we have never invested in markets is large. Mobile, cloud computing, things like wearables and thrown flat worms, these are large, horizontal, vast markets. At the same time you are having this wideopen playing field, you have what would refer to as deep verticals. What airbnb has been to hospitality, we are seeing that across enormous markets like Healthcare Services and fitness and wellness. Over a hundrede unicorns valued at over 100 million. Is that fair . These companies are raising money on an idea they havent even executed on top john for sure there will be disappointment. Valuation is a combination of high expectation and financial performance. Not all the unicorns will have the performance necessary to exceed their private valuation. That is ok. Venture capital is a small industry, roughly 50 billion to year invested in 2000 3000 companies. The world needs Venture Capital to take these risks and build companies. The reason is simple. We dont just build companies, we build industries. Frankly,jobs and quite we build the future. A whole,try as unicorns are a tiny percentage of what is happening in Venture Capital and they are clustered around a few markets, predominately Consumer Tech and that. You were in the sake of the last bubble. Would you say no bubble right now . Are in aont think we bubble. We are in a prolonged boom and there will be highs and lows Certain Companies and segments. The differences in the word fundamental. When Companies Work well now, they work extremely well. Privatee of the smaller itpanies we work with, when works, it works insanely well from both a growth and margin than point. It did not work that way in the last bubble. It. Y lets talk about what do you make of people wearing this in seven apple watch and Companies Like jawbone which have raised and raised and are clearly struggling in the wearables space . My experiences many people live these things and stop wearing them. John im an athlete and i love my fit it fit bit. Give you some sense of scale, we have some fun with the fit bit numbers. Fitbit users have taken 13 trillion steps 11 trips to jupiter. We have never invested behind types of scale our startups are experiencing. Emily i know you are big on drones. Why . First investorhe in a commercial drones is is here based in berkeley. We think a great example of not only a huge horizontal market shift, bringing computing to all agriculturees in and industrial applications, search and rescue, but think about every one of those markets data collection, sensor collection, the company is growing like crazy. It is a very exciting time. I have interviewed Chris Anderson and i have heard that side of the story. For joining us. A stock we are watching today vox. Shares traded lower this night a stronger than average courtly forecast. Box sees its revenue climbing in fiscal year 2015 and reported it topped 50,000 customers. Ceo, aaron with box levie. N you have seen the market begin to shift where even Companies Like emc which are large incumbents in the category are exiting our space because of the dominant position we have been able to create. Invest in continue to a growth but we did show some efficient the this quarter and that was a pretty dramatic drop from 90 plus percent the same quarter last year. You will continue to see efficiency is the Customer Base continues to grow. It is recurring revenue, so our sales and marketing dollars focus primarily on new customers as well as up selling existing customers. Seeevenue grows, you will improvements and efficiencies on this core operation costs. The numbers are strong, but shares are below the ipo price. But the stock is down today. Why is that . Ron we have a lot of work to do where box differentiates, this is something we are spending more time on we are going after a tens of billions of dollar industry, but that industry is in lux right now. Boxes building the next iteration content management form, but thats the consolidation of storage infrastructure, content management, Collaboration Technology and we need to continue to educate investors on how we differentiate and why customers can in you to spend on box as their key platform and why we have things like 70 gross margins. We are in a differentiated software category, unlike what some people would think like storage or commodity infrastructure. Emily the lockup on shares was supposed to expire are insiders selling . On the lockup expires next week, but the initial one expired in july. Thats when investors and employees could sell. This is the first time insiders can sell. Different investors have different points of view. Im personally not going to be selling anything. We see a tremendous amount of growth going forward. Emily would you buy more shares at any point . if i can scrounge up the money, absolutely. Mily box ceo, aaron levie we will be right back. Uber announced a partnership to help develop driverless cars, but according to several reports, uber hired away dozens of Carnegie Mellon again scientists, leaving one of the worlds top robotics to two shenzhen crisis. Mobile analytics are a necessity for companies in silicon valley. One company has carved out a niche providing decisionmaking data. Y can track everything rum everything from user contracts to sales. In select time you were on the show, you were the first person mentioned in this new york profile about Mark Andreessen. Andreessen horowitz investing the entire round. They think your promises so big. What is the promised the promise of mixed panels . Our goal is to provide data science to as Many Industries in the world as possible. Wen we raised our round, articulated the problems we wanted to solve. The promise being there are a number of industries that dont do a good job of quantifying information being datadriven. We think we can apply analytics to product, marketing, sales and finance. Of the main things you track is engagement. I was speaking about how well some of these companies are doing. Are they seeing strong engagement . The funny thing about that is they are a customer of ours. Companies, they are tracking exactly how people are using their applications and what people have found on mobile is that if people are engaging with their applications, they are coming back and using it again, that means their application is doing really well. Ubers valuation. You can get these people to interact their apps. Measuring engagement is the right measurement for these companies. Emily i recently spoke with Mark Andreessen on his views on startups, valuations and bubbles. Some to what he had to say. Mark be measured, be cautious, be careful. But also, invest in growth. We dont tell them to pull back if the stock market flips. The companies that are doing well will do really well. Emily what is he telling you inside the boardroom . Raised the reason we money, the entire reason was to grow rapidly. Inside the boardroom, he is saying we should lean in to whatever might happen in the economy. It turns out that even if something does happen in the economy, the money we are able to raise gives us the leeway to hire the most amazing engineers through any kind of market. Thes saying you should use money we gave you to rapidly grow and dominate your own market, irrespective of whether the market is doing well or poorly. Emily your customers might be in a precarious position. How does that affect how you affect your Business Plan . Suhail we might go after small companies, but our goal is to own that entire set of segments. We go up market and diversify. Emily thank you so much for joining us. Rc andhe profile on ma recent. We will be back here tomorrow. And recent. John two all due respect to donald trump who said that je b bush made ben carson look like the energizer bunny, we thought that would help with a little illustration. Happy national concussion day, sports fans, which means the nfl season is getting underway. The lineup on our shop yet we e biden, boehner and