Expanded. Yeah, so the most refined idea which is by in my opinion no means confirmed is an idea called inflationary cosmology, a more refined version of how did it begin. What was it that caused space to start swelling in the first place . We all believe that the universe is expanding, the observation to support that. What got the expansion started and the inflationary theory says that gravity itself is the culprit because even though the gravity that were familiar with in everyday life is attractive, pulls things together, einsteins theory shows that in certain exotic circumstances, gravity can be repulsive. So you have a repulsive force that at the beginning pushes things out. Does it create space and time as well as particles and matter . Its again a hard question but our best answer at the moment is that space and time needed to exist already for this phenomenon to take place it leverages the preexisting space and time which could be a tiny nugget and turns it into a large cosmos. So it basically takes space and time as an input very small, yields big space and time and matter and energy as the output. What happened the day before this happened . Yes, i knew you were going there which is why i played defense here and said i dont know five times already in the first two minutes. So we dont know but we have ideas, right . One possibility is that the notion of before is a concept that doesnt actually make sense when it comes to the beginning of the universe. A good analogy is think about the concept of heading northward on earth, right . So if youre heading northward you say point me in the direction of further north. You point, continue to walk, pass somebody else, same question, they point you in the northward direction. If you ask somebody in the north pole, they look at you sort of oddly, quizzically this notion of going further north in the north pole doesnt make sense. So going back in time doesnt make sense. At the beginning of time, that may be where the concept of time only comes into play and theres no notion of before when it comes to the beginning. How do we get from general relativity to figuring out mathematically and theoretically the notion of a big bang . Well, thats an exciting and curious story, einstein himself after he fashioned the equations of general relativity, he started to apply the theory to a variety of circumstances. The orbit of mercury being one famous one. The bending of starlight by the sun. But he also noted that if you applied the equations to the whole universe it gave rise toen a unfamiliar, unexpected result, which is that the fabric of space itself should be stretching or contracting. The universe couldnt be static. And that cut against the philosophical perspective of the time, including einstein. So einstein changed the equations to ensure that result wouldnt come out, that the universe could be unchanging on the largest of scales. Then fast forward to 1929 when edwin hubbolt turns powerful telescope to the sky and sees that the galaxies are rushing away einstein smacks himself in the forehead and says why did i change the equations when i could have have predicted this amazing fact about the universe from my own mathematics. Yeah, calls it his biggest blunder. Then they walk the cat backwards. Had to evolve in this single point. Thats right. You basically in the hands of a belgium priest was the person to articulate this most precisely. He used einsteins math, the face value math, not the math that einstein mangled to meet his own philosophical prejudice. He called it the primortial atom. I think it was fred holly who was a critic of this theory and was talking about on the radio and said, oh, the big bang. Its our best understanding of how things started. You mention they get to it by walking the mathematical equations. In some ways mathematics is now your guide post to figuring out this is how physical reality is. For reasons that we cant fully yet understand, math seems to be the right language for describing phenomena in the universe. Math is the shining light that can illuminate the dark corners of reality that weve not been able to access directly. Dont we need evidence from physical reality . No. And the evidence comes from so many places. First, einsteins mathematics makes predictions about things we can directly access like the bending of starlight by the sun which was tested in 1919 during a Solar Eclipse 6789 einstein gets a telegram alerting him that his ideas had been confirmed through the observation. And somebody asked him, what would you say if the data showed that theory was not confirm ed and he said i would file sorry baa the theory is correct. How much residual heat should be left over from the big bang today at the socalled cosmic radiation. And we can make predictions on how the temperature of that heat should vary from one location in space to another. And the measurements agree with the theoretical positions to fantastic accuracy. And that is a breathtaking confirmation that this mathematics is not just speculation. Give me an example. They go to the north pole or south pole . You can access it through satellite born intelligence. The Background Radiation probe which has done a fantastic job at measuring the microwave Background Radiation. But the more recent one is the one youre referring to, the experiment down at the south pole where for three years a team of astronomers pointed this telescope at a patch of the polar sky and extracted information about the microwave Background Radiation that, again, bears out a yet more subtle prediction of the theory. And this is radiation that actually emanated from the bang. Yes. So in the beginning, it was hot, right . Really hot and as the universe expanded, the heat diluted and it cooled down and you can calculate how could it should be today. Thats the temperature. But you can go one step further. How the temperature should vary from place to place, and the math shows it should vary on the order of 1 100,000th of a degree. And you can do these precise measurements and, indeed see the temperature variation and the patterns that the mathematics predicts. What do you mean when you call something the fabric of the cosmos . Its a hard question is space really a thing . Or is it just a useful concept in order to organize our perceptions of reality. Youre over there, youre further away in space. The table is yet further. Is space merely the vocabulary that allows me to articulate locations . Or is space really a thing . And nobody fully knows the answer to that. But in einsteins general relativity and different people interpret it differently, i see space as a thing in einsteins theory. Space, meaning the fabric of space and time together. Space and time are stitched together. And they would exist even if nothing else existed . Thats right. Thats right. And theres been a lot of debate about this. If you were to remove everything from space, the moon, the sun, earth, everything, what would be left . Would you have an empty universe with space and time . Or would you have nothing . If you take an alphabet, right . And start to remove the letters. Z and x and a and b. And when you remove the last letter, whats left . Like an empty alphabet . Its like nothing. Comes into existence with the letters that make it up. Is that true of the universe . Does it come into existence when theres stuff populating it . Or can there be an empty stage called space time that would exist in the absence of matter . I think its the latter. Theres a wonderful thought experiment, which you deal with in i think your first book. Newtons bucket. Yes. Explain how that helps you think there is a fabric of space. Yes, this is a thought experiment that isaac newton came up with when he was trying to understand basically if space was a thing. And he imagined taking a bucket and filling it with water. And he noted that as you spin the bucket, the water climbs up the sides of the bucket. I think, you know, even kids do this at the beach, right . You spin it around and climbs up the sides. What we would call inertia. Thats right. The water has intrinsic quality that causes it to resist that motion and when it resists, gets pushed out, goes up the sides. He imagined doing that in a completely empty universe. Theres issues about that. Gravity is part of what makes a shape. We actually now imagine taking two stones, same idea, connecting them by a rope and spinning them around. Would the rope pull taut . And to newton it was obvious it would pull taut. And therefore he said, what is the rope and rock spinning with respect to theres nothing there. No earth, no sun. Therefore, the rope and the rocks must be spinning, something called space. Space itself must be setting the benchmark, the reference with respect to which that motion is happening. Others came along and said, no, we disagree, you remove everything from the universe and take your spiny rock and ropey thing and its not going to pull taut. Itll just kind of stay completely limp. And its still an issue that people debate. Is there any evidence we could find one way or the other . Its very hard to remove everything from the universe, right . Thats kind of what youd like to do. So what you do is you try to find alternate implications of one perspective or another. And i would say today most people havent done a survey, but i suspect most people say would pull taut. Sets the reference frame for a certain kind of motion, accelerated motion, but there are others who are holdouts and disagree with that. What have we learned from the super collider . We learned a lot. We learned how to build the biggest experiment that our species has embarked upon. These are really, you know, the fantastic temples of the 20th, 21st century. They are our pyramids in a sense. But in terms of the science that we have extracted, the most important thing is the discovery of the particle. I think most people have probably heard something. So there was this particle that was predicted mathematically in 1964 by peter higs and many others who really deserve equal credit for it. But it was just a mathematical idea that was a solution to a puzzle. How do particles get mass . How do they resist being pushed when you want to speed them up or slow them down . And the idea was space was filled with a kind of molasses kind of substance. They experience a resistance type drag force. What is the relationship of the higgs field to the fabric of space time . Well, if the higgs idea is correct, thered be virtually no distinction between them. This substance would fill every nook and cranny of space. And in a sense, it would be unremovable unless somehow you could recreate maybe the temperatures of the very early universe. The analogy that i think captures that idea is if i dont know, do you have any tattoos . Okay. Well, good. I dont know where you were looking and im not going to ask. But imagine that you start to have more and more tattoos and ultimately if you cover your entire body, then the distinction between the skin and the tattoo becomes kind of meaningless. You are the illustrated man at that point. Youre completely covered with tattoos. Similarly, space is completely filled with this higgs stuff. And if you cant remove it, theres almost no distinction between space and the stuff that fills it. What if they hadnt found it and found there is no higgs field . Does the entire standard model of quantum theory go out the window . Well, that would have been far more exciting for a theorist. Less exciting, you know, for peter higgs and others. Would we have lost mass . And lost weight . Well, i dont think the universe cares much about our understanding of the universe. It would have shrugged it off and, you know. But the wonderful thing is the theorist, we would have been sent back to the black board to answer these deep puzzles. Where does the heft of the fundamental constituents come from . That would have been tremendously exciting for an idea we thought was the answer to be proved wrong. We are not, theres sometimes a missed perception that physicists or scientists more generally get stuck on an idea theyll hold on to it in the face of evidence that suggest the contrary. No, its completely the opposite, we love it when ideas we cherish are proven wrong. To come up the next idea that will take place. This example, it was a wonderful triumph of mathematics and experiment where the idea was confirmed. Mathematics has led you to superstrength theory of which youre very associated. Explain why the math led you there. Well, since the 1960s and 70s, people have tried to put together ieinsteins theory of gravity with another theory, the theory of Quantum Mechanics. And turns out einstein, on his death bed, he was doing that. Well, sort of, einstein was trying to put gravity together with electromagnetic theory to build a unified theory thinking that he could do an end run around the uncomfortable features around Quantum Mechanics he didnt like so much. He was hoping in some sense to go this way and then like do that to Quantum Mechanics. That seemed to not work out. So we are trying the more straightforward approach and the standard model of physics, hugely successful is unable to put gravity and Quantum Mechanics together. That leads us to the new approach on paper does put gravity and Quantum Mechanics together. Is there anything in the next five or ten years that you say would help give you a physical test of what youre doing there. No. I wish the answer, i can go speculative here. Maybe speculation on speculation which is always an uncomfortable place to be. But just to say, we dont believe any of these ideas until they make predictions that we can test. So lets be real clear here. If you ask me, do i believe in theory . Absolutely no, i never have and never will until theres experimental data that supports it. Having said that, it is the most promising and, i have to tell you, mathematically compelling approach to putting gravity and Quantum Mechanics together. And thats an important puzzle to solve. That drives us to continue working on it. And the best of all worlds when they turn the collider back on in 2013, is it possible some of these ideas will make contact. Particles slam together, some of the debris can get knocked out of our dimensions according to the math. We would recognize that by loss of energy. Super symmetric particles that we havent yet seen. We could see microscopic black holes that would decay into a spray of other particles. All of these things are possible. I consider them long shots. When they dont come through it, i dont want it to be, hey, you guys predicted that was going to happen. And then it didnt. No. Its possible, but unlikely. Is it inevitable in strength theory that there are other universes . Its not inevitable. It is one of the very controversial developments over the last ten years. But you believe its true . Again, believe is a funny, funny word. So do i believe in other universes . Absolutely not. Do i find it a compelling possibility and can i see how the math naturally suggests it . And does that compel me to work on it . It does. But until theres observation or experimental support, i dont believe anything. And i guess einstein once said that one of the grand questions was did the good lord have a choice . Yeah. The way he invented the universe . Explain that and answer it for us or for einstein. So einstein asked a very important question, which is could the universe have been otherwise . Could the particles be different . Did god, did the lord have a choice . Or is somehow that dictated by logic and mathematics alone. And we dont know the answer. But if these ideas of other universes are correct, then its completely opposite. It may be that every possibility is played out in the grand landscape of reality. So rather than having one unique universe, it might be all possible universes. The truth is probably somewhere in between. Weve run out of time. Let me hit you with a couple of quick things. Why does this all matter . Well, if you ask my mom, it doesnt, right . She wanted you to be a doctor. Yeah, exactly, right. Gives her a headache and all that kind of stuff. But i think it helps many people get a sense of how we fit into the larger picture. How were part of this spectacular cosmos. And i dont consider it making us somehow small and insignificant, although we are. But take into account these tiny creatures Walking Around on the surface of the earth can figure out what happened a billionth after a billionth. That to me is an amazing story. That is the most exciting drama of discovery weve ever been engaged with. Thats why it matters. And for people who want to hear more, theres a world science festival that your wife is doing. Yes. And world science university. Give it a quick pitch. Yeah, world science u is a new Online Platform that we add the world science festival have developed to try to get these ideas out to the general public, but not just the level were talking about here, which is interesting and exciting, but the real math behind it in a highly visual way. If you like relativity or this kind of stuff, check it out, its a fun way to learn. Google world science u. Yep. And the festival is when . May 28 to june 1st. We have 50 events. Buy tickets, they went on sale. Although a few things are sold out. But 50 events around the city that will allow you to immerse yourself in science. Brian, thank you. Thank you. We are but specks in the universe, but two interesting ones. Two very interesting ones to come. Thank you, brian. Surprising came as a guest of a guest at dinner at my house and lo and behold, i had chabani yogurt in my refrigerator. He is the most interesting person who has revitalized whole section of new york with his wonderful product. He will be interviewed by Steve Clemens who, one of these days, youre going to open your closet and theres going to be Steve Clemens. The ubiquitous Steve Clemens. Thank you so much. And i want to thank everybody standing in the back, theres some seats open up here. Dont be shy, dont worry about the cameras. You know, aggressively ram yourself through those aisles and get a seat. Because its worth it for the lineup we have today. Thank you so much for joining us. Thank you. You were a guy, young man growing up in turkey, you came over here to study business and you said, a ha, feta cheese. Were not even at the yogurt story. But whats that you were going to make your fortune in feta. I just need to know why feta . Well, two things, one is i came to learn english. So i didnt know the word of english. And feta was a great english word. We dont call it feta, we call it white cheese. The reason i came one the idea is my father came to visit. Mmhmm. And the cheese, the white cheese is very big in our breakfast dishes. And when i brought the cheese i could find in the supermarkets, my father said, is this it . And i said, yes. Said, why dont you make some . Because i grew up in a cheese making, wine making. Basically my father not liking the cheese i brought for him for breakfast made me go into the cheese business. All right. Let me now we need to jump to the real story here. How many of you have lots of yoplait yogurt in your refrigerator . How many of you are dannon consumers . How many of you are chobani consumers . This was not set up. I thought it could go badly for you. The only reason i came to make it bigger, more. Youve moved into yogurt. And the storys fascinating. I love the tell you, not about why yogurt, but tell us the story about why entrepreneurship and the town and the factory. Well, i was to make this, you know, to make the story short, i started this cheese business. It was very small, you know, struggling with language, with running the plant, trying to sell, all the small all the big issues, the Small Businesses that go through every day that i did. And i was going through my junk mails one night in my office. And i saw this ad and said fully equipped yogurt plant for sale. And there was a picture of it on the front side of it. And i continued to throw it into the garbage can still smoking my cigarettes and making garbage. About half an hour later, i went back to that table and took it and now its, you know, dirty and and it was a craft yogurt. It was a craft. I didnt know that craft made yogurt. The brand called breyers. I see. I didnt know it then. But when i went to visit. This was about 90 years old plant, they were making yogurt and cheese. And they said it was the original plant they invented philadelphia cream cheese. Wow. Yeah. I said, how old is this . Everybody knows that. I know. So i couldnt believe the price they were asking for. I thought they were missing one zero. It was 700,000 or 7 million . And i was afraid to ask one more time. I didnt want to look so surprised, so cheap. Maybe you should asked if you knocked off another zero. On my way back, i called my attorney and said i saw a plant i want to buy. He thought i was the craziest guy ever. And he told me million things why i shouldnt get it. One was there was the Largest Food Company that was getting out of the category. This was a plant that they were selling as is. That means all the mistakes and crimes and everything done in that plant, it was on this turkish guys shoulder. And then he said, ill tell you one more thing is the biggest problem. You have no money. You havent paid me for the last six months. It was true, i hadnt paid him. So that was the thing. And i figured it out with a small bank to buy did you finally pay him . This is on the record because they could be used against you. At confession, yeah. He later said, i wish i was a partner with you then. So the first day i bought the plant with an sba loan, Small Business administration. Was august 15, 2005. And i have this cemetery, literally its a cemetery, waters are dripping and everything. And i hired five people from the 55 that kraft let go. And there was a bar across the street and people who were coming to the bar were bikers. I had only seen them on movies, and it was scary. Yeah. And when i saw them. They said come on over. And i said if i had seen them before, i probably wouldnt buy it. And that was the first day. And that five people and me and, you know, i could not describe how scary it was. And how lost i was, and everything that the attorneys said, its true that moment, i did something really, really crazy and i didnt know what i was going to do next. So my first Board Meeting with those five people. And they were factory people. And they said, what are we going to do next . And first thing i recognized from the picture and when i went there the first time is the wall our side, it was white, maybe 15 years ago, no longer. It was horrible. And i said lets go to the ace store. And lets grab some white things. And lets paint these walls. And mike said he was retired and then came back to the plant. Hes been in that plant for almost 25 years. He said tell me you have more ideas than this. Well, you know, i just want to ask you. We just had brian green up here, one of the most cosmic thinkers. Did you think the universe of yogurt was just a universe i remember the yogurt. I like the yogurt. I remember greek yogurt coming online and taking on more and more. It is interesting that a turkish guy is making greek yogurt. Only in america. Yeah, only in america. You go back to istanbul. Does that play well in turkey . Do they say, wow, our guys have gone out to own the greek yogurt in america . Yeah, the turks are angry, the greeks are angry. And americans we were going to come out here, by the way, and take a selfie like ellen and the Academy Awards and tweet. But in any case, it is a big thing. But how when i began thinking about talking to you today, i didnt know, where did you steal the market from . When you look at the absolute dollars out there, for this sort of product, theres a finite number. I didnt know whether you were displacing velveeta cheese or yoplait. Or have you made the universe bigger . Youve summarized the whole thing. Actually, its all of it. It was an accident if i did that. All of it. The market, some of them came from the other categories. And some of them, people start eating more. But when this started, there was greek yogurt by a company who brought from greece ten years before me. Talking 11 years, actually. They created this buzz as a greek yogurt in the Specialty Stores and, you know, some fancy places. Someone who grew up with yogurt. It was the simplest thing. Doesnt matter if youre rich or poor or live in the city. Its the simplest, purest food. And i couldnt understand why you have to go to new york city, a Specialty Store and pay 3 to get a good cup of yogurt. So i work two years to make that cup and then i made it, and i said im going to go to the mass market first. So my first store was shop rite. So my buyer went to shop rite and said, well, we have five chobanis to put on your shelf. And he said were going to charge 30,000 or 50,000 per cup to put on to the shelf. And he said we need that money to be paid and we didnt have that kind of money. And we said, what if we paid with the yogurt. So when you sell, you can take some of it and for the weeks we can pay it off. And then the guy asked a very nice question and said what if it doesnt sell . And we said, well give you the plant. We literally said we will give you the factory. But that guy did they want the factory . No, he sold it. Actually, he called me two weeks later and said i dont know what kind of stuff youre putting into this cup, i dont want to know, but i cannot keep it on the shelf. From that moment on, i knew it wasnt going to be about selling, it was going to be about can i make it enough . Im this tiny guy in upstate new york who worked two years to make this cup. Now its selling and im going to make the big guys wake up at one point. This is the destiny of every small food setup. You start a dream, work hard, dont sleep, you have neck pain, back pain, all kinds of pain, right . You dont go to bahamas. You dont do anything. Yeah. And he was in the bahamas last weekend. Dont feel too sorry for him. I was there for two days. I was trying to track him down for something, and he was telling me about the roosters on pearlcovered pink beaches. He was doing just fine. You then moved. Youve got another plant in twin falls, idaho. Are there similarities between this new york, which is a Chuck Schumer loves you for saving this town and these people. But tell me about twin falls really quickly. And thats our clock here. Ive got to get to Vladimir Putin and whether he eats chobani. We tried. It didnt work. What happened is from that five people, i launched the brand in 2007. This is something that people need to know what happens. The magic really happens in the small towns like upstate new york. With that five people, we created a brand became number one in five years. And from that five, we have right now 3,000 people. In 2012. From 2007 to 2012. Within five years, we went from zero to 1 billion in sales. Hmm. And this is, some people said and i havent seen anything otherwise that some people said this is the Fastest Growing startup ever, including all the technologies. One of the most amazing thing is until 2012, 2013, actually. We all did it independently. So we stayed independent. And we invested in that factory that i bought from 700,000, almost 250 million. And then we built a factory in twin falls for 450 million. And we built it in one year. I and all the people working the company had never had this kind of business experience before. We were never a marketer, finance people or, operators or anything like that. So we figured it out along the way and, you know what it is . Not that big of a deal. Its not a big deal as much as people tried to make it as a big deal. And what they do is when you talk about these things, sounds like, oh, you have to go to some kind of school so you have to get it from the big corporations, you have to have this kind of discipline, you have to know all the textbooks and everything. B. S. , you need to really be there. And along the way, you figure it out. What was the biggest mistake you made at the beginning . What was the thing . What was the thing. Obviously you got beyond your biggest mistake or maybe youre perfect and never made a mistake. But what was the biggest mistake you made from what you thought you would need to do and you changed course . The biggest mistake i made is a human mistake is towards as the business kept growing, you know, 500, 600 million, two plants, a plant in australia, the people that you start with is your friends. You share the dream together. And as business grows so fast the dreams become complex. Yeah. And the capability of being able to handle that kind of business is a different one. Right. You need to change the skin. And you need to bring more people, different people. And, you know, i struggle with it. I should have done it maybe a year or two years earlier. Including myself, you know, i could have brought some different people in. And these are the entrepreneurs kyki before you answer this question, i was in a green room last week with a young man, hes an entrepreneur out of washington. I dont know, theres a place called cake love. And this guy created something he brought in. Hes just created a big thing and he was out there talking about his new product, which is cake in a can, which hes supplying to various large chains now. It was interesting, and i was thinking about the fact i was going to be seeing you here and hes really moving toward forward. Hes struggling, not a billion dollar company. Its been a harder thing, hes worked hard in the community. And i was going to ask on his behalf, what is the biggest thing he can do to get on the a road to more dramatic success . Well, you have to have other than appearing on msnbc. Could hurt him with a lot of consumers out there. Usually have to have a great product. I worked two years. People said this is good. I said not enough. They said this is did it used to be crappy . It was good, then they made it the first month, it was still better than it was in the marketplace. My expectations was really, really high. And the cup and theres not yogurt cup in the world i havent seen. When we launched chobani there was five bags of cups from china to colombia that they took off from my office. You really have to be sick about what the product is. And so once the product is perfect, then the rest is really your capability. I mean, theres a lot of stuff you could do right. Marketing. Did Vladimir Putin not letting the official yogurt sponsor of the u. S. Olympic team. Did that help . Were all talking about it. Turns out those people in sochi are sanctioned now in the United States and europe. We were really heartbroken. The olympians were eating chobani. It was in the kitchen, in the smoothies. All the factory people, it was like a festival. All the community farmers, the kids, everybody in the factory. We all made this together. We signed. Everybody signed. We did this 2012 to london. We were hoping this was going to go and we hit the wall. There was a lot of speculation that the change of the uniform for underarmor uniforms affected some of the performance but it was the absence of chobani yogurt, right . Absolutely. We believe in that and we were sad. But the next olympic we think we will do it while in brazil. But it is food, as people forget, a simple cup of yogurt or simple loaf of bread. Or whatever you get from the store. Its available when youre in turkey and greece and italy and new york city. But you go to supermarkets in new york, or twin falls, new york. Its a shame whats in the supermarkets and the manufacturers, they could definitely do better. They can do better. They can take the preservatives out. Weve got 1 22 minutes. If any of you havent done it, you have a great web page. I went on my iphone. You have this thing called how matters. Tell us about how matters. And about the issue of ingredients. Can we really walk away from all of the preservatives and everything out there . Yeah. I think its interesting, when you go through the stores, there arent that many foods, i think, that im eating that are probably along the lines of the ingredients you have. Im pretty much of a bad eater. But youre telling me i can get on without all of that . Yeah, and its your choice. Maybe you live in washington, d. C. That you could if you wanted. I need stuff that will survive a month in my refrigerator, maybe two. But accessibility to natural, good food is, i believe, is a human right. Its a basic rights. So whos going to make this . Everybody wants better food. But either too expensive or is not there. So manufacturers like us, big guys, they have to put it in the center, somebodys going to eat this, somebodys baby is going to eat it, somebody friend is going to eat it. And it goes beyond that. When i started with that five people in that community, the culture of chobani became that everybody come to work and go back to their home and say we did something amazing today. And the promise that a certain portion of profit goes back to Community First in our own community and then expand. So i believe business is the best vehicle to solve issues in the community and society. And its the vehicle that is sustainable because its a business. But the business has the right mindset that not only the founder or the ceo but everybody in there that when they walk into the plant or the offices that theyre going to do something right, and the return that comes in, itll go back and do something more right. And itll be the, you know, effect of going on and on and on. And im proud that chobani every act that everybody does every day, were not perfect, but we have the right mindset. Were not perfect, were trying. Before we thank you and were right at the end. You just got a 750 million loan to expand. So which food company out there should really fear you . Big guys. I love fighting with the big guys. You know, i think one thing that message to all the especially in the food world is when they tell you oh, these are people they have a lot of marketing money, they have a lot of plants, a lot of people. You will find out that the big size that they have is actually become advantage for you to be fast and smart. And its really fun to play with them. Ladies and gentlemen, here, stand up for that. Were going to do everybody wave. Were going to do our selfie. Hold on, here. Everybody waving. Yeah. Say hi here. Hold on. Im going to send this to turkey. And here we go. Send it to greece, steve. There we go. There we go. Thank you. Thank you very much. Only in america. My favorite line. And that you can walk into my house one night and i can serve chobani. It was great. Thank you. Next we have david castenbom of npr is going to tell us whats happening to our money, where its going, how were going to spend it, how were going to pay for things. With Jeffrey Alberts who is a partner and prior cash man. Phillip bruno and Nicholas Caro who is ceo of block chain. Welcome. A few years ago, a reporter colleague of mine, we started hearing about bitcoin, and we said, lets do a story where we started to eat lunch with it. We thought, great, well go buy lunch in new york with it. Turned out to be incredibly difficult. Took two weeks to buy lunch with it. The exchange you would change dollars got hacked and had to shut down. In addition, bitcoin did something crazy, doubled from 12 to 20. What was the ultimate high . The ultimate high was about 1,000 to now 450. We had to hand him dollars cash, he then gave us some bitcoins digitally and only one place in manhattan that took bitcoins for lunch and it shut down. My big question is, where are we now since then . And there was also question of whether it was legal for currency and what it was. Could you maybe each of you could bring us up to date on that and tell us how far we are now. Sure. I can speak to some extent to the law, that relates to bitcoin. And the short answer is it is legal. But regulators are all still trying to figure out how it can be used. You can use it legally or illegally. So youve had a couple regulators that have come out and made some statement about certain Legal Compliance requirements, so made a statement, the irs had certain rulings. And bernanke said the word. All significant. It is legal, but i think its going to be a couple years until people figure out how the preexisting regulatory mechanisms apply to it because its constantly changing. Nick, can i buy lunch in new york . Yeah, i would say an awful lot has changed since the last time you probably went and tried that. So i live my life 100 on bitcoin, my company pays all its employees in bitcoin and were a bankless institution. So we have employees on four continents and theres an unbelievable amount of capital pouring into projects. So from the last year just in our company alone, weve seen growth from 100,000 users to over 1. 5 million. And i think its really important to remember that outside the confines of even this room, bitcoin is an absolutely global phenomenon. For example, in argentina, there are probably 400 or 500 Times Services accept bitcoin but here in new york. And thats for fundamental reasons why its more interesting and approachable Financial Solution for the people than maybe in the United States. Is there a restaurant in new york that takes them now . Yeah, there are several. A bar called ever and bar calle. And a bakery in brooklyn. Youre a payments guy . So i think whats having here is bitcoin is a currency where as a store of value, so we are seeing some interest in there, in that regard. Skpl explain what that yeah. Do you want to hold your life savings or some portion of it in bitcoin as a means of keeping your money. The other is a medium of exchange. And so thats for, you know, buying lunch and doing other things there. I think what we really find special though is thinking about it as a network, as a way to transact and to spend money point to point without involving a Financial Institution or intermediary. Most things up until now have been set up as networks where there is somebody in the middle an all of the transactions go through that. But this new phenomenon is a way to transact that doesnt involve the intermediateries or the fees. So one, there so real currency that everyone talks about how much they have and they use it to buy lunch and other people hold on to the bitcoin. The other is that it is just a way to send money from one place to another, in a cheaper way than the cred the card system or banking. Right . And youre saying the second one seems like more after go than maybe the current. I dont know how to handicap these but i would put more currency on the second one, which is, the ability to have it as a lowcost exchange vehicle. And as a network. And it is interesting, i interviewed 20 years ago one of the founders of visa. This is when i got into the payments ipd industry. He said, look, internet is going to revolutionize payments. Itll be point point to. I might not see it in any lifetime but you might see it in yours. I think we are coming into that now. It is basic lay digital version of gold. Economists lefting with right and center would tell you that gold is a very bad system to sprp mainly because you cant adjust the amount of money. There is no bank to say, there is a supply or no way to increase population for instance. So you get what is called deflation. Everyday that goes by, what you are holding is worth more. That may seem great but it is also a disincentive to spend. If you say, oh, i buy the car today, it is cheaper tomorrow. Cheaper the next day. Bitcoin has gone up in value. If you were stupid enough to buy a pair of alpaca socks, which were one of the first thing in the day, they are now worth thousands of dollars for a pair of socks. How big of a problem do you see, does that seem to you . That it is finite, digital dpoeld. Look, im not an economist but there is a couple responses to that. One, i think i have the same general instinct that phil does, that a primary value of bitcoin is as a means of payment. So the criticism that you have is more focus he on its value as central currency. The second is that i think we are so far from the notion that bitcoin would actually be like a foundational currency for a country or a large persianage of people but the deflationary aspect i dont think is terribly relevant. It would have to be a High Percentage of the economy before the deflation aspect. There are two parts of that. One, you cant have a central bank adjust the money. The second one is just na builtin deflation because you cant create more. Thats still a problem. Youve seen the value of them shoot up for different reasons. I would actually challenge this because new research has been conducted on the block chain itself. So we can actually study transaction i have loss knit a way thats impossible. And block change is whenever you do a transaction, it is the thing that records. So a professor at stanford is looking into this very carefully. Interestingly, about 50 years with this kind of plot, deflation would cause people not to send it is not accurate and and i believe that is a reduction in friction from the payment itself. The speed at which the money is moving the business coins con my is at parody with the u. S. Dollar. You know, the other thing here, we do have to have stability in the value. Right now theres been some estimates that 80 of the transactions are actually more speculative than nature. And i think this has to get to a period where we dont have 10 swings in the value a day or moreover the period of a week. People will trust that it is a value. And to get from there to something that is less speculative and much more for currency and commerce is going to be a messy process to get there. But thats the best that you would make, if were to be a story of value in the future. It can be used as an investment or as currency. Right now, if you believe it is valuable because it allows to you contract anywhere in the world basically for free, in toward ride those rails, you have to have currency of the bit coins themselves. You have to buy credits in order to play in the game and it is a little bit like, imagine if we were having this conversation in 1970 and a bunch of people were sitting around a room saying, man, ive got this idea. We are going to revolutionize the postal system. Allow people to send messages to Anyone Around the world basically instantly, for free. A and everyone says that is crazy. But we are doing it. Everyone is sending messages to each other basically for free. Imagine in 1970 you had the opportunity to invest in the Credit System that lets you use email everyday. Thats like bitcoin. Thats why there is a lot of speculation. It is totally young. Go study it. Because the ignorance would be like putting your head in the sand of the future. It is like stupid people we will move upon it is hard to see with the lights. How many people use bitcoin to buy something . Just raise a hand. Two . Anybody in the balcony . Three. One up there. Okay. Anyone want to reflect on that . I mean, my point is just i understand the theoretical, but what is the actual my credit card works great. Have you workshopshopped at reseptember rerecently. Well, there is a fee, i dont notice it. It is not a hassle. The target example, theres protection. Everyone is protected from using their credit card and it is just fine. No one lost any money doing that. There are lots of nice things about it. Except maybe some of the Financial Institutions. So bitcoin, the money is gone. Why is it good for you . When i needed to move money to rent a vacation house and i needed to transfer the money to sterling, its great because theres less friction and its cheaper. Tell me what you did again . So renting a house. I needed the money. I moved it to the Real Estate Agent in the uk. Who accepted bitcoin. Yes. Is the microphone, give it to him, go ahead. So the best time to plant a tree is 20 years ago and the second best time is today. There is more at stake than revolutionizing shopping in new york city. When you think about the 2. 5 billion people on planet earth that dont have access to a Financial System that completely ignored them, then today there is an opportunity for them with a smart phone to put a bank if their pocket. A bank that lets them inner face, interact with each other, basically for free, and thats a really powerful thing if you think about it. So lets put aside the shopping port of this as well. Because theres a lot more that we can revolutionize around the world and people have been ignored in a lot of ways. So one of the concerns voiced early on was that it would be used mostly anonymous, thats another selling point, and a lot of them because they are doing something illegal. And in fact we just they shut down a big online drug site. Do we have any information about what fraction of the overall transactions were through silk road . It is hard to tell from the data who is buying what. But we shut down one company. How many people were buying drugs . I dopt know the percentage. But a very large amount of money. Yeah, so silk road was in a marketplace where people could buy things from stocks to narcotics. It was shut down bit u. S. Government this fall. It was a secret hard to get to website. Yeah. But the interesting thing is it was shut down bit government. And a bunch of journalists said it would die and never survive and only used for bad things. Then two weeks later it started its fastest run up in value in its entire history. So it has been called a bubble and debt before. And that is just, i think, the challenge that we all face in the industry is to communicate the value that it serves. And we are still here, building and innovating. There is more money in bit dont related projects. What can we tell about what people are using bitcoin for. You can see, there are jumps in traffic, like in china. You can exchange for bitcoin and take them out and transfer them dollars. They arent using it to buy lunch but it is serving a need. How much do we know about what people are using bitcoin . Nobody . Ill try and talk a little bit. So people can tag addresses in the bitcoin network. So basically a way to verify that transactions are going to a place you like. Bitcoin brings people to the table for a lot of different reasons. If youre into donations for charity, you can make Immediate International transactions happen. If you are doing payments for vacation homes, game sing is a one for sure. And remittances will be a big story later as more systems come on line to replace the networks run by Companies Like western union. They have all this infrastructure in place they have to maintain. Now there is innovation to take advantage of. Ride the bit network and cash out on the other side. People will use bitcoin and not and realize it. So people that dont have much in common so you would be one of those people coming to the table, right . Companies and i assume banks and regulators. I understand you cant name names, but whats the feeling there . So theres a great deal of interest in this. I would say Financial Institutions are in the mode of just studying it right now. And i would say that this is not just something in passing. I think they are very serious about it. I have talked to some regulators around the world in september ral banks. That are really looking at this again. Looking more less from a currency stand point but more of this again from innovation of how to design Payment Network and what can they learn from technology. But their view is it is a little too early to go off and adopt this and design a Payment System that they are going to run a nation on. The idea would be that this would be a way, not just a better way to send money from one bank to another, which by the way we need, but a way for anyone to send someone to anyone. And they are looking at not just a way to design the Payment System, but also, how did they reach other areas. Whats the social good impact that you would have from getting unbanked in any market into the banking system. How do they think about making that more advantageous . And just as an example, when we see paper payments, cash and checks, go electronic in the traditional sense, we have seen countries add. 3 to. 4 to gdp growth to the year. So theres one in the drnup with impact we see there. The other would be, can we make it even more efficient through Something Like this and would there be even more impact on gdp growth globally. Can i ask you about that . Maybe not in terms of gdp growth, but just in terms of everyday transaction. Like if i were go, a bit of a Credit Card Fee attached with a credit card. Would bitcoin necessarily be cheaper . How much cheaper and how much cheaper is my cup of coffee. I will let you answer to onthat. Depends opt merchant fees. Right now they are quite high for accepting bitcoin. But there are typical Credit Card Fee for a transaction . Between 1. 5 to 2 for the fiscal world. Why is it a percentage and not a flat rate . Because if the merchant goes belly up or someone doesnt pay, that ips tugs has to stand in so a cup of coffee is 2 bucks, then it is 4 cents for the technology they are paying for. How much is bit . With bitcoin, the fee is basically less than a penny. Like one tenth of a penny. The settlement goes through instantly to the merchant. They can spend that money right away if they choose to. Huge online retailers are doing technical innovation. Tiger direct, okay cupid, and others. You will see a lot more online merchants starting to receive bitcoin. They have to deal with frod. Overstock. Com hasnt had a single fraud case. A few percent is like a big deal. They probably spend years in rooms trying to think of how to save few percent. On the other hand, they are taking on what you call currency risk. Which is if they hold ton discoins, they are more volatile, much more so than the dollar. Yeah, transaction costs are lower. And they take on other risk. So merchants have a choice. They can convert transaction and get dollars in their bank account at the end of the day or choose to keep it. And what i witnessed having traveled 400,000 miles around the planet, is the story is very different outside the u. S. Than it is internationally. So i met people in europe isnt it nice that you dont have to travel to talk to anyone any more . Sometimes it is nice to have a facetoface. I met a woman who receives bitcoin and it is easier for delivering coffee. It is a different way and they believe in it. Can the government still shut it down if they dont believe that government i dont think it would be possible for the u. S. Government to shut down from a practical perspective or legal ability . I think they dont have the ability, it functions outside the United States. I think they could criminalize any use of it here in the United States but there would be no way for them to stop the network due to its decentralized nation. Can you talk about the tax part . The government came out with guidelines. By the way, if you use them, this is how to treat them with your taxes. They have guidance on march 22, right before tax day, a little late to provide a substantial amount of guidance. Technology exists and by the way, you should be paying yeah, you should be paying taxes no matter where you are. I live internationally and still pay taxes. Every time a buy a cup of coffee, i have to calculate my capital gains. Bitcoin is truckee like that. Sometimes it looks like a commodity and sometimes like a digital currency. There is not a really easy solution for everything here. But they are acknowledging the working and they have conversations about how to move forward. So i expect likely guidance going forward. This is the most important thing to happen in this industry. We want this to be building jobs in north america and the United States and continue leadership here. But this is a totally International Global thing foop so we want to build a safe home for people to experiment and succeed and fail if they do and grow and get smarter. Thats what we are looking for in the industry. I think youre right that theres a certain extent to which it is a vote of confidence. To issue regulation. They may be good. They may be bad. But also decrease risk for major financial players, thinking about moving to the space. If there is no regulation, they have no idea which way itll go. If you have regulatory landscape, there is a certain value to that. One of the related developments that i think we have seen over the last year is major financial players have move need this and they bring their background and knowledge from people from the banking industry. Know your customer regulations. Apt eye moneylaundering regulations. They bring that knowledge to companies who have incredible coders that maybe have people that cant think about compliance because it is not their background. As you bring the players in, i think you will see a lot of development that really rapidly expands the industry. How would you feel about, part of the deal with bitcoin is it is kind of outside the system. How would you feel if citibank or bank of america started offering bitcoin. I would be thrilled. I hope they get involved. In 2013, the Credit Card Companies were going to issue us chips in the cards. Thats what theyve been doing in europe for 20 years. The challenge is on everyone to build bet are systems. I hope they get involved in the states. Theyve been working in finance for years. We dont know everything. We would love to see them come compete with us. You see any interest in anyone doing that . No comment. No, so what i say is right now, i would say that theyre all looking at this and trying it figure out what do. I dont think there is any commitments at this point on what to do with it. But i would say there is Old Technology in, you know, in cards. The thing is, that technology does nothing for an online transaction. So this is also a solution for the online space. When i think about the disruption over the last 10, 15 years, and look at the digitization, we used to bay mail, now we email. We used to listen to record, now we have itunes. We used to read books, now we have amazon. Some small part of it exists as paper and coin. It is also unaccounted, banks going back and forth. Right. One of the questions you asked earlier, circle back around to the economics, we see this money supply growth constantly. Maybe that helps control the inflation of the cycle. But of course if the money supply grows every year we get to spend less and less of that income and it funds all kind of programs and expansion of things that we may or may not have control over. It is just a choice. A marketplace. If we want something differently. I dont think thats a big problem. I think people vote with with confidence. Recently we moderated a bet between two with bitcoin. One was that bitcoin would die and no one would remember it in any of years. The other is very bullish, betting on whether in five years time, 1 in 10 people polled would sense they bought something with bitcoin. I want to ask all of you which side of that bet you would take . Do you think five years from now we do a poll of americans, 1 in 10 will have bought something with bitcoin, knowing they bought something with bitcoin. Like literally add wallet and got a cup of coffee. I think your caveat is important because i think 1 in 10 will have sent some form of virtual currency. It might not have been bitcoin. It might be bitcoin and they dont flow it because they deal with an app online. So i think speculating whether they know how the guts of the transaction would work as hard he maept not the gut of the infrastructure. I think it will just because of how quietly known bitcoin is now. Within five years, people will use bitcoin oh, not within the previous month. Okay. Sorry bb sorry. Whether they did it once is more common. The other part of that in common part is really important. We could argue, paypal which has come up, and a serious way to transact, i think about 80 million accounts now in the u. S. When you come down to how many people use it once a month or once a year. It is really important that 15 plus of ecommerce transactions but thats only a small part of everyone so you take the better now. Five years be a little tight. In five years, one in every ten people will absolutely be using bitcoin. Thats a nobrainer. If you look at dprogrowth, it i absolutely hockey puck. And it is growing. Stick. Hockey stick, sorry. You want to skate to where the puck is. Thank you very much. Its been fun. Thank you. Thank you. So follow the hockey puck. Thank you, guys. Im holding on to my wallet. Thank you for coming. Next up, yansi strik eller, founder and ceo of kick starter. I could make a lost squloeks about what we will kick start but i think you have heard all of them. He will be introduced by app drew ross of the new york times. And cnbcs squawk box. I have here my bribe for andrew ross and im going to give it to him when he completes the interview. These are your cronuts. Hello, everyone. Hi, how are you . Good. We have not that much time together. I will go quick because we have a lot of questions. I think a lot of people here have a lot of questions or at least want it understand what this whole kirk start thing is all about. Let me start with, what was the inflexion point . What was the thought that got this to happen . What is the story behind kick starter . In a way to explain to everyone what this is if they dont know. Sure. Kick start, the website, is five years old as of a week from yesterday. Thank you. As we launch april 2009, the original idea is 8 years before that by my partner, perry chin, currently our chairman. He was living in new orleans in 2001, 22002 wanted to throw a concert during jazz fest. He couldnt make it happen but wanted to do Something Like, to test an idea publicly and allow things to only go forward that there were people that would support them. So he had that concept and didnt really know what do with it. He worked as a recording engineer, preschool teacher and waiter. Moved back in 2 005. I was a rock credit and he was a waiter at a restaurant if brooklyn. We met there. He told me about his idea. He we brought in a friend and tried to make, and failed, this website for five years. Because we are a waiter, a rock critic and designer. And finally managed to get a group of tactical people to work with us tp april. April 2009, the line was finally live. Who is if for, though . There are people in the audience who are probably on kick starter. They get email from friends. Who is supposed to be using it on one side and what sort is a base case for me to actually hand over and fork over the dough . At this point, 150,000 people launched projects on kick starter. Supported by of Million People from 218 countries and territories around the world and all seven continents. Very global. If you went to kick starter right now, you would see people making movies. Starting rest runts. Making comic books. Pieces of design. Putting on plays. Canning preserves. Anything creative. Anything why where you are making something to share with other people. So we dont have any sort of demographic box. In fact we have zero Demographic Data about people who use kick starter. It is a van kass for people who want to create something. It is not a big investment. Oculus just sold itself to fa facebook for 2 billion. That is where you put them over your face. Pretty soon we wont even come here, well just wear goggles. There are people here today who gave them money who are pissed. Great. Yeah, sure, i will respond to that. Yeah, i mean, a lot of really cutting edge stuff that is happening in society is starting on kick starter. People hoorer funding the future. You go there, you get a glimpse of two or three years from now and crazy things that may oor may not happen. Just like really wild ideas. I saw yesterday, from the low liep spoke here, he is trying to build an underground park in new york city. A pool in the east river that you can swim in. Basically drop a britta filter in the east river. So the future is what happened here. This is a Virtual Reality started by this 21, 22yearold kid named palmer lucky. Con make it up. And he basically put up this project saying he created these goggles that created the height of Virtual Reality was finally real. And the internet loved it. So i can get an early prototype for about 300 bucks. It started to take off and became like the peoples text. Internets favorite thing. People go to video conferences, line up for an hour and a half, wear them for 10 minutes. They would throw up, be blown away tp it is incredible. It got bigger an bigger. Building hardware is expensive and hard. And then, about two months ago it was announced that facebook bought them for 2 billion. So if i have given them money, how am i supposed to feel about this . Well, i gave them money. You did. Yeah. So i will talk about how i felt about it. I gave them 25 bucks. Because i thought, this cool. This is awesome. This should exist. And now it does. For me, i support it because i thought the world would be better if oculus was for real. I dont want to wear one all the time but when i want to, it would be great. You know, just support the concept. Now it is complicated when you have facebook involved and watch the money. I thought a lot about nirvana. I used to be a rock critic. Music is my primary love. I thought about how you felt if you bought the first nirvana and you were into them with sub pop. Then smells like teen spirit happens then youre on tv. And you think, thats my band. What does that mean . That is a complicated thought. There is this notion of cultural ownership. And those feelings i think have largely gone away bp. Like west anderson, does American Express commercials, no one cares. White stripes, they are in nike commercials, no one cares. Like the grand machine of capitalism just won. You see the same thing come out about technology. It is a sign of where culture shifted. A lot of complicated things fwoing with that but i dont know that they would have been successful if they were trying to raise money from investors. I think they werent because they went to kick starter to take money to the public. To some degree you dont like when people try to sell stuff on the site. People can give quote unquote rewards or things back to you. Thank you stickers. Or if there is a film, you know, a back stage pass to something or credit on the screen. But for Something Like that, it really is charity. There a mantra we say a lot, that kick starter is not a store. We try to set up expectations for backers. You support the creation of something, not buying it. It is not like oculus is sitting in amazon in some warehouse and is ready to ship to you in hours. It has to be built first. You will see videos from the factory floor and lab and you get this relationship with it. It is not about the store. However, there a return. And general lit return is the copy of the thing being made or some experience with it. It is really interesting because it is not commerce. Not direct commerce. Not directly 1 to 1. There is a lot of fuzzy stuff in between. I dont think it is charity. This person is great, i want them do their thing. I just love them, here is 20 bucks. It has similarity to investment. However, something distinct to each of those. It has a common element. I think there is a fourth way of transacting. Most money moves around from one of the other three ways. Think think way is succinct and ultimately about creating a human relationship and money serving is like a mechanism of that. And about fostering something new. But doing it out of a desire to shape the world into what we want it to be. I think there is a true spirit to it that we try honor. So someone add vision for something and people got behind that. But most people dont start with zach brat, people with a tv show or movie or something and they want funding. There is an argument that bigger names to some degree have began to crude out the smaller names. What do you make of that . In the last year, spike lee, neil young, and lee, all kick started project. These are three of my heros. I was shocked that they even knew what it was. When i see someone say kirk kick start on their video, i feel embarrassed. It is strange. Still feels like it did seven or eight years ago. This is cool. People can share with the world. Even if youre spike lee. Even if youve done the right thing and malcom x and these incredible movies, you still have to answer to someone. When someone writes the check, there are demands can w that check. At that moment, we are a great opportunity. If you are zach braph, you can say, lets make this move pooepy y movie. They can stream the movie. Thats not scorcese begging you for money. That is him with the opportunity. That what phantom is. I think the cynical perspective thinks to think that audiencers are sheep. But i think audiences are smart. These are things that they would like to have but the industrial complex, the movie is 120 minutes after moving image on screen and not the entire experience around the movie. I think it is really shifting that. This is drowning people out, we see the opposite. Bringing people, tones of creators and there a halo. What is the most amount of money thus far that someone raised on kick start. Whats my shot on goal . If the audience sees my brilliant idea, whats the chance if i go on kick starter that i will succeed . Sure. For all of you fine beautiful people, a hundred percent, of course. Today a billion dollars has moved through the system. In total . In total. A about 1 p. 5 billion a day. Like 1,000 a minute. Something like that. Its nuts. In a great way. Largest Single Campaign with something called the pebble which raised 10. 2 million. That is a smart watch. First smart watch. Apparently apple is about to copy it. On my walk here, i saw a few people wearing them. That is the largest project in terms of money raised. Very first project raised 35 from three backers. That is called drawing for dollars. A guy said i want to draw a picture of something. If you give me 5, i will draw something for you. To me, thats an essence of kick starter. Pebble is just a version of that. Money only changes hands if someone reaches the funding goal. There is a mass vetting of every single project. This incredible safety mechani m mechanism. Say be this is cool, this is not cool. Over 90 of all of the money goes to those 44 . You either really make your goal or get very little. Where does the 10 go . You said the 90 . 10 is for people that dont make their goal is that is lost. That says that we as the public are sniffing things out. Sniffing out people or ideas that we like and think are worthy of support. I like that. I like theres a clear difference between what is getting done and what isnt. You just become a ceo. How many months now . January 1st. And right in the back, you just spent the afternoon with this coach. I want know what the coach tells you. Yeah. In just a moment. When you think about the Competitive Landscape and what this all looks like in the future, is there one platform that is kick starter . A fragmented thing where charity goes to one place. How do you feel about crowd source, true investments, where people actually have equity on the other end . We are very focused organization. Very missionorient organization. We will not support charitable fundraising. We are focused with where our hearts lie. And what we pursue with a lot of love. I think there is a pretty good chance that if we were a different people running this, we could try to be the walmart of crowd fupding and know all of the market and certificates. But i dont want that. Doesnt seem interesting to me. That not what we care about. There are plat forms focussing on charity and investment. And thats fine. There are plat forms existed before us. They have all copied us since to look exactly like kick starter. Original crowd Funding Campaign is alexander popes translation from the elliott to english. 700 people gave him money to transcribe 17,000 lines. Their names are in the credits. Ty think there is a big future for this too. I think this is very early on. At this point, more money has been pledged to kick starter than all other plat forms combined. I dont think that will always be the case. But i think this market will continue to grow and interesting things will happen. You said you wont go public. You wont sell the company. What does this look like ten years from now . Well, andrew we take a hard look at what we do. We want to be a cultural institution. We think of what we do as a public trust. We exist so other people can do things. You know, this is an idea that we believe in very deeply and we are trying to shepherd into the world. So if the longterm health of this mission is whats most important then we think that being owned by a giant company probably isnt the best thing for that. So instead we imagine things like Profit Sharing and dividend. Making sure that profit we make is shared with our community. Were out of time. What does the ceo coach tell you . His name is jerry calona. Former ceo himself. We just talk about the challenges of the job. Its a strange job. He is helpful as are some of my friends that are ceos. Just talking about the pressure and weight and the thrill and excitement of responsibility. I couldnt imagine anything bet are do with my life than that. Thank you for being here. Really appreciate it. Thanks again to yasi strik eller and aaron. And aaron, i take it these are your cronuts. First a quick word about willie geist. Willie geist is actually cloned. He is cohost with the today show and morning joe. If any of you noticed, they are on at the same time, basically. And the hugely successful ceo of hbo, richard butler. Good afternoon. How is everybody doing . Richard, you sold the place out, man. Good. You too. We were talking about what a cool place this is. Lazy susan of ceo. Kirk starter, spin it, ceo of hbo. Ceo of morgan out next. Lets talk about hbo right now. As we think about the history of television and the golden age, this renaissance of television, im curious where you trace it back. Some people say, it is oz, 97. Some people say sopranos, later than that. When did that start, in your mind . You know, its funny. Everybody always assumed the sopranos was the catalyst, sex and the city was the catalyst. All superiors shows. But i think the Tipping Point was in the early 90s with the Larry Sanders show. [ applause ] yeah. Because what gary did, is he said to the world, you can do something with a Truly Original voice. You can differentiate yourself from Everything Else in the medium. And excellence and quality will define success, not necessarily numbers. And i think what gary did is open the door. We saw the attention that garnered. Who saw not only the acclaim he got in the media. But the attention he got in the Creative Community. People were pauwatching what hes doing on hbo and wow, i think he opened the door to what really became the modern hbo. And the next question, why did it take so long to get there. Because the model of hbo and the model of television are very different. They are selling cpm. Selling advertising. Thats the way they measure success. Thats just the Business Model that informs their decision making. Our model is were selling a brand. And what were try doing everyday is elevate that brand. We believe if we elevate that brand and create more attic across the wide range of demographic, we will serve our brand and grow our business and motto all over the world, which is exactly what we are doing. Thats very different than trying to get the largest number of people in a certain demo to watch a particular show. Im coming from a lunch with the great steven sewedoburg about a show that will be on cinemax starring clive owen. Steven, a great artist, who did behind candelabra, with excel enas my metric, thats an extraordinary thing. Extraordinary for actors and everybody on the project. Whenever youre talking to in our family, thats a very liberating Creative Dynamic p. Thats, i think, our blessing. And you talk about people who benefit a long time and see something new. You mentioned candelabra, Michael Douglas comes to mind. Michaels line to me was, ive been doing this for 40 years, whats in the water here. And everybody i encounter at your company, marketing team, pr team, business team, and i think thats because all were trying to do is create the best product that we can. Thats very liberating dynamic inside the company. So we dont wake up the morning after a show premiers and say, whats the number. We wake up the morning after a show premiers and say, did it deliver on our expectation of excellence. We know that before it premiers. I said to barry levinson, after doing kevorkian for us, congratulations. He said to me, why are you congratulating . Youn dont know how this will. I said, but i know its brilliant. Ive seen it. Thats all i need to know. He said, look, ive been at this a long time. Youre the first ceo of a network or studio who ever said anything like that. Thats not because im more noble or because hbo is more noble. It is because that literally is what defines success for our brand and for our company. And i must say, globally as well. I was in singapore two weeks ago, france last week. Every we go our brand is traveling. What is fascinating is that media in each country is as sophisticated about what we are trying to do as they are here. And the questions and level of sophistication of the questions about our artists, about producers, about what we are trying do, it is as if they live in los angeles or new york and they are every bit as expert on what the brand stands for. Your point about the numbers, is girls. Girls if you mic its upon. Hello, hello, hello. yl there we go. Good hustle, thank you. A case in richards poise about it not being in the numbers is girls. I dont know what it is, average is like a million no, about 5. So in a single night a million, then the queue is 5. Thats not huge if we think about network shows. That is critical to your like heat, like Silicon Valley. High quality shows reaching a particular part. I look at this this way. 43 million constituents across hbo and he is ncinemax. We are trying to create more and more addicts among those constituents and trying to build a new generation of viewers. For some people, Silicon Valley to them, is the reason they subscribe to hbo. For some people, it is is game of thrones. Some people, girls. Some people watch boxing. Some people watch movies or documentaries. It doesnt matter to us if a subscriber feels emotional passionate engagement with our brand, thats what we are striving for. Today at lunch, they said, you guys strive for good [ bleep ]. This is the key, we are only as good as people who come to work fours p. My job and my colleagues and mike who runs programming, become a magnet for the best talent to want to work. And there is competition. A lot of people doing great work. This is not just a game. It is fine for other people do good work as long as we are playing our game to our full capacity. What we think about everyday, we will have more than our fair share of attention and acclaim. Thats the focus. Thats the north star. And what you want is lena dunham feeling that there is not a bet a better place to work because they stalks to her friends in the Creative Community and she is talking and saying, this is an incredible experience. And it becomes catalytic. If nothing else, we come out with a new slogan for hbo today, we do good [ bleep ]. It rolls off the tongue. Lena dunham, and coming with what you are known for, having a good instinct and and saying, make a good show for me. Actually it precedes me. What really happened, and this speaks to our culture i think, is a young executive in los angeles named cath mckajry, she saw tiny furniture, lien whyas first movie, can she made for 37,000, i think. And kat took the dvd for tiny furniture, brought it back to the team. Lena processed the tpilot. Everybody watched tiny furniture. You do know that is a differentiated voice which defines us. It was kat in l. A. All of us looking at it and feeling very very comfortable this is Something Special thp that is breaks into the wsh like it does, nobody knows. That thats going to happen. What we knew about true detective is that it was excellent. 12. 5 Million Viewers. That, you cant predict. So grant tinker used to have a celebrated executive at nbc back in the 80s and 90s. We are looking for the two ps. Proud and popular. The truth of the matter is, since you dont know whether you will be popular. You didnt even know that about thrones. All your north star has to be, are you proud of them. And if collectively were proud of the product, of the scripts, we feel shared vision with the people were working for, were very comfortable with that. And more and more if you stick to that, youre going to find that you have your fair share of things to break through. You were smart to trust your gut on true detectives. But again, another lena dunham story. A guy that wrote novels. Not particularly popular novels. But when when mike at the time, and myself, read Something Like 420 pages, you knew this was a remarkable piece of work. And to have matthew and woody attach to it, terry directing, everyone felt pretty comfortable this is consonant with our brand. What you dont know is that it is going to become such a huge part of the cultural conversation. That you just cant predict. Ill be honest, if you said that would do 12. 5 viewers, i would have said, highly, highly unlikely. It is very it is complex. It is dark. You have to stay with it. You have to pay attention. People loved it. People loved it. And in a huge audience. Speaking of which game of thrones has been a cultural explosion. What has that meant in terms of your brand, it is nice to have the 17 million, right, have that show 18. Oh, excuse me. Never get your numbers wrong with richard. Know that. But do you need a massive hit like that . No. Listen, it is wonderful to have something very high quality, very much on brand and it breaks through, becomes a global phenomenon, huge back end home video attached to it. This is, you know, the other side of the coin is the most pirated show on television. But i always say in response that, that the bad news story. The good news story is 18 Million People in the United States are watching it legally. But that all david benny, dan weiss and george martin. That is mike and i believing in david and dan, listening to their visions, seeing their passion. David and dan really are quintessential and they love the product. They know it in their bones. They breath it. And i think for george, whose whole life is built around the books, to have entrusted them with the legacy of the series speaks volumes about just how special they are. I was interested to read that at hbo, honest on the number here, 78 80 . 8 wi0 of viewership is for theatrical film. Yes. What does that mean for your business . It means you have to have the movies if you run a successful Premium Television network as we run. Because while the original programming takes a disproportionat share of the a littlo as it should, because it the original work of our network, the truth of the matter is that consumers still love to watch hollywood movies for a second, a third and fourth time. And they are in the tens of millions of viewers. So you put fast and furious on, you will have 21 Million Viewers of fast and furious over the course of that run. It is very important to make sure that your theatrical is there. The halo on the brand, the driving of the price power, i think, is the kcombination of that superiority with the cache of, and you have to have both. What do you do to make sure you are not flatfooted and celebrating irrelevance today. We spent about 10 seconds celebrating today. We wake up, i call this, to be polite, the what can be screwed up today list. Because youre right, velocity changes extraordinary. Hbo o go is a remarkable product. Itll evolve and get better and better. What i say all the time is we will not be caught without the ability to pivot with both partners. Whether cable partner or satellite part near, we want to grow with them. We think there is lot of growth left in the business. And having an exciting Digital Product where you can watch hbo on your xbox, on your kindle, on your ipad, thats very important, particularly for a generation of young people who will more and more as you well know are getting their video in another place from the tv. You feel yourself competing directly with say netflix . No. We feel ourselves wanting to always evolve our own brand. And what we think about is since more and more people want the option of watching hbo on different plat forms, we want to make sure to have that. Thats what hbo go is all about. You think about a billion tablets and smart phones around the world and imagine globery where we have 85 Million International subscribers and growing, thats a he have exciting dynamic p. So we make sure we continue to advance the digital possibilities of the brand. We are going to continue to make sure that we create as many options as possible for our customer. And all at the end of the day about the product. So yes you want people to have the convenience of people being able to watch it on ipad or play station, but there needs to be a magnet to take them thing. Make it outstanding. Second, build as much dexterity as you can so people can watch when they want, how they want, where they want. Okay, less than a minute. The light became yellow. On the way to red. Give us a hint, what ahead or hbo . We have a wonderful piece called ballers p. Which stars the rock about aging football players. A certain period of their life, in miami. Poignant about the end of peoples careers. We have a show called the brink. Starring tim robins. Jack black, a Foreign Service officers. I like to mash in southwest asia satire and parody of american hubris. Left overs, who brought us lost. A metaphysical. You saw the trailer. Wet world by j. J. Aip abrambram. And ju and sns our our job is to keep them coming in and make sure to create an environment for them to want to work in. Between us girls. Brad pitt . Well, i cant say, because of matthew and woodys brilliant work, are in line to do next season. So stay tuned, willie. All right. Brad pitt on true detective. Thanks, everybody. [ applause ] so richard, i hope you will be bringing brad pitt next year. Thank you. Thanks, willie. Willie, brad and me. For a change of pace, we have james gorman, ceo of morgan stanley. He will bent viewed by steven radener who may or may not, as you know from morning joe, have charged with limb. I dont know, james. That was not very enthusiastic applause for us. [ applause ] thank you. It is always danger us to follow two guys from entertainment who arent wearing ties. I think this is challenging but we will do our best. So we have 16 37, which i guess is a version of speed dating. I never went on speed date, i dont know about you. I did not. We will do about five years of financial history and the whole future in this time. So Everybody Knows who james is. He has done a great job at morgan stanley. Lets go back and try do this kw quickly and get ourselves caught up. Okay. Looking back at history, theres a lot of chatter about what could have been done differently. Im going back to the 1990s. To the time of the repeal, the derivatives, deregulatory phase. Capital on investment bank. Things like that. Take that time sweep, that ten years or so, what should we have done differently . Well, firstly, great to be with you again. Weve known each other a long time. For those of you who stayed for the bafrnking portion in the da we appreciate that. I thought they were giving away prizes outside as everyone got up to leave. But trying to adjust this in 45 second soor so. It is very complicated. The country went through tremendous prosperity. There was a great wealth affect from that. We came to believe that owning a home was a right, rather than necessarily something earned. And by the way, that rightright was promoted by successful government and by the banks. The banks in turn were complicit in frankly adopting appalling underwriting standard. To allow folks who couldnt own homes, to own homes. Which would ultimately lead to disastrous results, can which it d did. Some banks leveraged 60 times. That means effectively, if they are wrong 1. 5 of time, they wiped out their capital. Now not everything is that good. You have very overlevered banks. You add lost people purchasing real estate that could not afford it in a down cycle and eventually down cycle. And the barriers in protecting against the down cycle is it is okay because the banks have enough capital and liquidity. Guess what . They didnt. When everybody sees the filling its a wonderful life, when people want their money back, they go to get their money back and it is not there. It is lent to someone else who has a mortgage. So complicated story. But that is a liquidity crisis, not a solvency crisis. The money lent out to the house next door in its a wonderful life versus someone simply being bankrupt. Which was it in this case . Was it all liquidity . I think some banks were bankrupt. I think what happens is you had enough Bank Balance Sheets which are written that destroyed the capital buffer. When individuals, institutions or individuals, see the capital of their bank approaching zero, they say, you know, either this thing will turn around or the bank soust business. If the bank it out of business, i want my money back. I want it back sooner. Next bake, customers of the next bank look and say, that happened there. We could be next. Lets get my money out. There is this cascading thing. It began with poor asset quality, leading to credit leading to crisis in confidence leading to i want my money back leading to systemic run on the Financial System p. That is the single gravest challenge to our Financial System weve had since the great depression. So in a word, should we repeal the law that took deposit banking away from underwriting activity . Should that have been repealed . Yes nor no . No. But if you step back and look at the broader consequences for the Financial System, many of the modern line institutions, got into trouble. Lehman brothers got in trouble. Rock in the uk got into trouble. Wachovia bank, for all intents of purposes, got in trouble. And so on. What about regulating the derivative. Should that have been done sooner . Listen, you can always secondguess whether things could have been been done sooner right. And thats what im asking you do. Secondguess. And im avoiding your question. Okay. We will move on from there. That was quick. We covered the whole Financial Institution in five min puminut. No, im going ask you another question. When everything hit the fan, Lehman Brothers, they were saved, as we know, Lehman Brothers was the next one up, decision made not to save it. We can talk about whether they could or couldnt and legalities and all that stuff. In your opinion is that right decision . The aig crisis came right after. So Lehman Brothers handled right, handled wrong . I think handled right. They made the call they could at the time. Every Financial Institution would encounter the reckless behavior and the government made the decision that has been secondguessed many times. I was sleeping on my couch, working continuously for six weeks. You are making hundreds of decisions everyday
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