Transcripts For BLOOMBERG Bloomberg West 20141003 : comparem

Just as investors criticize the company for its tumbler investment, yahoo is close to nother deal. Yahoo s also buying a shawl Company Called message me a small Company Called message me. And tesla will unveil auto pilot to be announced next week. Will this selfdriving sales job really fly . Theres been buzz about new ipads for months. Now were learning just when theyll be unveiled. Apples unveiling a new fullsized ipad and a minute i mini ipad. Just in time for the Holiday Shopping season, according to a person familiar with the matter. Apples counting on these new ipads, which are said to include a gold colored option, to reverse plummeting tablet sales. It tries to reduce its reliance on the iphone which now accounts for roughly half of a. M. s revenues apples revenues. The growth rate of tablet sales has been amazing and really almost all of that has been the ipad. Yet weve seen this surprising stall in that growth. Almost as surprising as the growth itself. Yeah. I think as the platform diversifies and as you have different products, different price points, the phones getting bigger and the tablets getting smaller, i think that the ecosystem is starting to figure itself out. What is the price point across each of these devices . And what is the screen size across each of these devices and what is the use case across each of these devicess . I think were sort of the dust is finally settling. And the other part is the corporate use of tablets. Thats still probablied to grow. If you look at all of these projected to grow. If you look at all of these products, i think well start to find a balance between what the phone is going to be used for, what we will pay for the phone, and what the tablets going to be used for and what were going to pay for it. We talk about the Corporate Market figuring it self out. One thing we dont know about this product is whether the rumored 12inch ipad will be announced. Is that a Corporate Market device . If you look so, we use i. D. C. Numbers. If you look at the 2013 to 2018 projections youll see that the tablet market is expected to grow roughly 10 . But if you look at the corporate ecosystem within that, thats projected to grow almost a little bit more than double. 20 over the same time period. So theres room for corporate tablet adoption but the question is, and theyre not as price sensitive as the consumer is, so the question is, what are the features . Is it larger sized, is it the inclusion of a keyboard, is it control over the ecosystem that the i. T. Guy needs to have in order to make it corporate friendly . Those are all the things that need to be figured out for corporate adoption to sort of take off. So therefore when this announcement comes, clearly this time of year you announce products because you want to sell them during the holidays. When you sell them during the holidays, its not budget flush. Its more likely consumerfacing. Are there things in this announcement that you will be ing for that may speak to the corporate environment and different security options, different functionality in and of itself . Right. I wanted to see i think that with the adoption of a larger screen, as well as more clarity on pricing and the lower you want to see a platform broad continue self out. Right now if you look at it, youve got tablets starting 299, 399 and 499 across different the mini and the regular versions, across receipt in a and nonreceipt in a versions, so you want to see that expand. Number, two you want to see pricing and screen sizes achieve some sort of clarity. They need to be clear definitions and people ought to know, if i need a tablet for this sort of scenario, thats the tablet im going to pay for and thats a screen size i need. You want to see some clarity around that. Number three pricing and number four, you want to see some big announcements around corporations as we go through the end of the year. I think those are the sort of four key things and obviously the colors also help. Who doesnt like a little bit of color . Our senior analyst. Thank you. To other late news today. We see lots of interesting news. Yahoo the lead investor in snap chat. Its a Company Without revenues. Yahoo s interested. Maybe because of the way alibaba went. They brought that into the yahoo coffers, 9 billion with that i. P. O. Just land month. So question is, could last month. So the question is, could snap chat be yahoo s next alibaba . Also in new york is june group c. E. O. Let me start with you. Why such excitement about alibaba . Im sorry, snapchat . Theres so much startups, so little time. Yeah, theres a lot of excitement around alibaba as well. Snapchat represents an evolution in eembings mail. If you think about e mail as being old school, which is tough for some of us to do, you have it evolving into instagram and then snapchat is the way a lot of millennials like to communicate. If yahoo is true to its word, it wants two things. It wants to be very mobile and obviously snapchat solves that for them. And it wants to be a habit, every day. I think for a lot of millennials, that is check and check. Weve heard about a round for snapchat for a while. Is there really a round happening . Is there a lot of investor interest in this thing and from whom . There is absolutely investor interest and we have heard about this round going on for quite a while now. Everyone who deals with snapchat has to be super secretive. Its a very secretive company. But it really could be worth 10 billion. Thats what were hearing from our sources. And one of the reasons is the very high engagement, the last numbers that came out were 700 snaps per day. Im sure its much higher than that now. Ive been talking to advertisers all week as you know and they cant wait to get their hands on it. But of course there is no advertising to speak of yet. Theres no revenue. Maybe im just oldfashioned but i imagine businesses being profitable, let alone revenuecreating. But so the investors are smarter than i am. Surely, what do they see here . Sometimes they are, sometimes theyre not. I think they see lots and lots of eye balls and i think they see eye balls that are tough to reach in the form of millennials. That is how a lot of these businesses get evaluated and sometimes it works out, sometimes it doesnt. If you think back to youtube, they didnt have any revenue either and google was heavily criticized for that purchase and its turned out to be a big win for them. I think that thats what you look for in these kinds of things and there are busts also. The tumbler acquisition, kind of the jurys out on that one. That was another highprofile yahoo investment and well see where it goes. Im not sure that anyone could really say thats been a success yet. What does it mean if yahoo s an investor . Does it mean something strategic that they imagine and incorporate in their service or is it like earlier investments like alibaba and people forget, manly because its a secret, but yahoo was anvester in google. Google came around and ate yahoo s lunch. They made money on the deal but that was it. Yahoo , who nose if this is the beginning of whatever it could be, but they dont have a Venture Capital arm. So it looks like theyre just making investments in products. At they think will succeed of course yahoo is known as the company that buys up a lot of failing startups on the low end, right . They bought message me for less money than investors put into it today. So theyre playing all across the spectrum here. Yahoo needs to be cool again and this is part of the picture. And with snapchat, the other thing you need to think about with the valuation, is evan turned down facebooks offer for about 3 billion last year. So what youre dealing with is his idea of how much his company is worth. We actually dont know the company hasnt given any numbers for how many viewers they have, how many users they have. The controversial young c. E. O. Thank you very much. We appreciate your time. Thanks. One of the largest cyberattacks ever all started with a lousy single employee password. Up next, were going to look at the lessons that can be learned from the massive hack attack of jpmorgan chase. Im cory johnson. This is bloomberg west. Jpmorgan chase discloses the size of its data breach in one of the largest cyberattacks ever. The data on 76 million households, seven million small businesses, all discovered by hackers. Thats 2 3 of the u. S. Households affected. User content of information was swiped. But theres no evidence the hackers took account numbers, passwords, birthday and Social Security numbers, if you believe what jpmorgan has to say today. This happened after hackers exploited a single employee users name and password and wormed their way through the system for months. Earlier i spoke to our Center Editor and tripwire security. I started by asking if this was an unusual approach for the hackers to take . No, actually. Sferbley with the retail breaches weve seen. Finding different side channels. In target they were able to go in and compromise the system through a trusted business partner. Targeting employees, you know, in their home networks, generally those are going to be less secure than the corporate network. So it makes it a very easy target. 2 3 of americans. Thats an amazing number. Yeah. I mean, its to the point you really i mean, this year, lets just say, its to the point this year that its almost impossible to be shocked anymore. The scale of these intrusions have gotten so large that you look at a number like this and you say, wow, thats really big but its remarkable both in terms of the duration of these things, you know, in this case it sounds like they were in there for at least a month, possibly longer, and that was a similar situation with home depot as well, earlier in the year. I mean, so its not just the scale, its how long theyre inside the systems before people notice, which on both levels is remarkable. Yeah. Let me ask you also. When we look at sort of the size of this, its amazing number. Weve seen so many of these, perhaps weve become inured to this point. In this case, you know, jpmorgan came out and said, we are spending more they gave an exact number, about how much theyre spending on this, into the hundreds of millions last year. And yet they still got hacked. Right. A lot of businesses need to be aware of that. We always say that its not a matter of if youre going to be breached but when. And this is a good example of that. If attackers want in, theyre going to find a way in. Be it through a remote port, an application has a vulnerability, or of course people. Phishing attacks very common. I think jpmorgan did some good things here. This could have been a lot worse. The information that was compromised was limited to name and phone number and address. No Financial Information was compromised and no passwords were compromised. So thats actually a good thing here. That they actually were able to protect the inside of their net wsh and secure the data. So network and secure the data. So there are some good things about this particular case. If thats the case. Its not clear to me, i mean, thats what jp morgue season saying, that theres no evidence that further information was collected, but i mean, and not to force them to disprove a negative, but theres also no evidence that some of that information wasnt collected, right . My understanding of what theyve said so far is that it seems to be limited to some basic information. But given the duration of time inside the system, its just not clear to me that we have a really good handle on what information was collected. And their reassurances so far seem really tepid to me. What weve seen in the past from a lot of these things, what weve seen from so many of these are drib drabs of information. We throw that saw that disastrously with target. Where every single week or so wed get new information that it was worse and worse. Bigger and bigger. And that in fact the initial sort of promises that, hey this wasnt that bad, actually seemed to get worse. Is there any reason to think jpmorgans different here . Right. You raise a really good point. When there is an issue like this, when there is a breach, its very difficult for businesses to identify the scope of that breach. And look how long it took them to actually provide that information. Theyve had security teams working on this for a pretty long period of time. So thats why im assuming that given the amount of times theyve done to do this research, they wanted to be able to wait before they could actually speak with confidence as to what information was actually compromised. Theres still a chance more information could have been compromised but so far from what theyre telling us, you know, id like to believe them. That was ken weston of tripwire security and bloombergs paul. Up next, tesla isnt tripping, its hitting the gas, on an automatic mated driving feature. Find out what they are and how it could impact teslas business next. Im cory johnson and this is bloomberg west. Teslas adding some features to the model s that suggests a riverless car . Its new capabilities will be revealed in an announcement next week. The news comes after the c. E. O. Posted on twitter that the electric car make already, uote, unveil something else. It included a photo of a tesla. The date october 9. Joining me now is our bloomberg tech reporter. First of all, this announcement, i guess, i was wrong about the dog . It looked like the garage door was open just enough to let the dog get under. No one knows the extent of the announcement. We think we just have farther of part of it so far. Whats that . Basically, if youre buying tesla, unless youre cory johnson, its an expensive vehicle, so youre up against the b. M. W. s and mercedes of this world. Basically the average cost is about 95,000 per car last quarter. A lot of the competition amongst that bracket right now is whats called advanced driver assistance, lane keeping, automatic parking, the improved stop you running into the back of other vehicles. That kind of feature. Speaking of my fantasy life, i got inside of an audi, the new one, and it has a headsup display. Thats kind of hightech driver assistance. Is that really driverless or is that just driver assisted . You mentioned the audi. One drove itself onto the stage. Really . But that obviously there are a lot of regulatory issues. There are a lot of other issues in terms of testing that need to actually happen before we really get there. Before the regulators are going to allow cars to drive themselves. No ones more of a showman in the car industry possibly than elon musk. Talk to me about some of what sort of what this means . They billed themselves as a Technology Company. If you dont have the latest technology, then how can you call yourself a Technology Company . Right now weve seen the model s has a huge 17inch touch screen and it adds a lot of in a sense, the last generation of technology, which was the entertainment stuff, that was the revolution that they were a part of. Other automakers have passed them in bringing other electronics into the vehicle. Passed tesla. So last i checked, you were the chip reporter. Here you are doing these automotive stories. Whats going on with the chip business and the car business . Because cars have actually been a Huge Consumer of chips over the last decade. Its on the up and up. As weve reported, Companies Like invidia and intel, they want to talk about vehicles. Theyre looking for hundreds of millions of units and they see vehicles as one of them because theres so much electronics going into it. You need a strong brain. Take, for example, invidia. Lets back track. Were not talking national semiconductor, analog chips that make this signal go to this signal, but essentially funky exatter tos. Were talking about graphics processer to the most powerful computers, visual things ever done. Thats absolutely right. If you want to trust your car to be driving at speed and not drive into the back of some vehicle that slowed down immediately in front of it, what do you need . You need the ability to process those images as fast as is possible and send a signal to the car. Whats best way of doing that . With a graphics processer. Thats really interesting. It also makes me think, we see these stories about subprime lending into the auto sector and what could that mean beyond the auto sector . But were really talking about Technology Going into the auto business, Technology Going into every business, means that if the auto sectors of the overall economy, it actually can affect the tech sector in a big way. Its a great story. If auto sales go up 5 , down 10 , it doesnt really hurt them particularly because theres 10 , 20 , 30 more chips this cars every year. Specifically, do we think this is tesla playing catchup or are they going to play a leap frog here . Thats what were not in a position to be able to say right now. Depends on the sweep of capabilities that they bring, how they integrate them together. Ian king nose whats going on. Thank you very much, we appreciate knows whats going on. Thank you very much, we appreciate it. Were going to look at what and where and when and why, thats next. Youre watching bloomberg west. We focus on innovation, technology and the future of business. From fred wilson, to some of the loudest voiceses in Venture Capital, a warning that theyre burning through cash and way too fast. When the market turns, and it will turn, well find out who has been swimming without their trunks on. Many highburn Rate Companies will vaporize. So moneys sloshing around, we know that. Its getting spent, we know that too. But still, some startups need some help getting from point a to point b. I sat down with a man who does just that. Heres his definition. A super angel is one of the most unfortunate words ever selected for describing something. Youre super. You have that going for you. Great. Super april general angel though is an constitutional venture fund of smaller size institutional venture fund of smaller size. This word super angel got coined as a result of individual angels writing bigger and bigger checks and making their own Family Office see essentially the bank. And we now are stuck with a word that actually is the opposite what have it means. Were institutional seed funds. But you guys are looking at to me whats interest something that youre in this place. Ar the angel, the seed round, hey, i though this rich guy and ive got a great i know this rich guy and ive got a great idea, but you guys are almost there in a bridging capacity, yes . Its amazing whats happening right now. Its like theres two completely parallel universes of Company Called<\/a> message me a small Company Called<\/a> message me. And tesla will unveil auto pilot to be announced next week. Will this selfdriving sales job really fly . Theres been buzz about new ipads for months. Now were learning just when theyll be unveiled. Apples unveiling a new fullsized ipad and a minute i mini ipad. Just in time for the Holiday Shopping<\/a> season, according to a person familiar with the matter. Apples counting on these new ipads, which are said to include a gold colored option, to reverse plummeting tablet sales. It tries to reduce its reliance on the iphone which now accounts for roughly half of a. M. s revenues apples revenues. The growth rate of tablet sales has been amazing and really almost all of that has been the ipad. Yet weve seen this surprising stall in that growth. Almost as surprising as the growth itself. Yeah. I think as the platform diversifies and as you have different products, different price points, the phones getting bigger and the tablets getting smaller, i think that the ecosystem is starting to figure itself out. What is the price point across each of these devices . And what is the screen size across each of these devices and what is the use case across each of these devicess . I think were sort of the dust is finally settling. And the other part is the corporate use of tablets. Thats still probablied to grow. If you look at all of these projected to grow. If you look at all of these products, i think well start to find a balance between what the phone is going to be used for, what we will pay for the phone, and what the tablets going to be used for and what were going to pay for it. We talk about the Corporate Market<\/a> figuring it self out. One thing we dont know about this product is whether the rumored 12inch ipad will be announced. Is that a Corporate Market<\/a> device . If you look so, we use i. D. C. Numbers. If you look at the 2013 to 2018 projections youll see that the tablet market is expected to grow roughly 10 . But if you look at the corporate ecosystem within that, thats projected to grow almost a little bit more than double. 20 over the same time period. So theres room for corporate tablet adoption but the question is, and theyre not as price sensitive as the consumer is, so the question is, what are the features . Is it larger sized, is it the inclusion of a keyboard, is it control over the ecosystem that the i. T. Guy needs to have in order to make it corporate friendly . Those are all the things that need to be figured out for corporate adoption to sort of take off. So therefore when this announcement comes, clearly this time of year you announce products because you want to sell them during the holidays. When you sell them during the holidays, its not budget flush. Its more likely consumerfacing. Are there things in this announcement that you will be ing for that may speak to the corporate environment and different security options, different functionality in and of itself . Right. I wanted to see i think that with the adoption of a larger screen, as well as more clarity on pricing and the lower you want to see a platform broad continue self out. Right now if you look at it, youve got tablets starting 299, 399 and 499 across different the mini and the regular versions, across receipt in a and nonreceipt in a versions, so you want to see that expand. Number, two you want to see pricing and screen sizes achieve some sort of clarity. They need to be clear definitions and people ought to know, if i need a tablet for this sort of scenario, thats the tablet im going to pay for and thats a screen size i need. You want to see some clarity around that. Number three pricing and number four, you want to see some big announcements around corporations as we go through the end of the year. I think those are the sort of four key things and obviously the colors also help. Who doesnt like a little bit of color . Our senior analyst. Thank you. To other late news today. We see lots of interesting news. Yahoo the lead investor in snap chat. Its a Company Without<\/a> revenues. Yahoo s interested. Maybe because of the way alibaba went. They brought that into the yahoo coffers, 9 billion with that i. P. O. Just land month. So question is, could last month. So the question is, could snap chat be yahoo s next alibaba . Also in new york is june group c. E. O. Let me start with you. Why such excitement about alibaba . Im sorry, snapchat . Theres so much startups, so little time. Yeah, theres a lot of excitement around alibaba as well. Snapchat represents an evolution in eembings mail. If you think about e mail as being old school, which is tough for some of us to do, you have it evolving into instagram and then snapchat is the way a lot of millennials like to communicate. If yahoo is true to its word, it wants two things. It wants to be very mobile and obviously snapchat solves that for them. And it wants to be a habit, every day. I think for a lot of millennials, that is check and check. Weve heard about a round for snapchat for a while. Is there really a round happening . Is there a lot of investor interest in this thing and from whom . There is absolutely investor interest and we have heard about this round going on for quite a while now. Everyone who deals with snapchat has to be super secretive. Its a very secretive company. But it really could be worth 10 billion. Thats what were hearing from our sources. And one of the reasons is the very high engagement, the last numbers that came out were 700 snaps per day. Im sure its much higher than that now. Ive been talking to advertisers all week as you know and they cant wait to get their hands on it. But of course there is no advertising to speak of yet. Theres no revenue. Maybe im just oldfashioned but i imagine businesses being profitable, let alone revenuecreating. But so the investors are smarter than i am. Surely, what do they see here . Sometimes they are, sometimes theyre not. I think they see lots and lots of eye balls and i think they see eye balls that are tough to reach in the form of millennials. That is how a lot of these businesses get evaluated and sometimes it works out, sometimes it doesnt. If you think back to youtube, they didnt have any revenue either and google was heavily criticized for that purchase and its turned out to be a big win for them. I think that thats what you look for in these kinds of things and there are busts also. The tumbler acquisition, kind of the jurys out on that one. That was another highprofile yahoo investment and well see where it goes. Im not sure that anyone could really say thats been a success yet. What does it mean if yahoo s an investor . Does it mean something strategic that they imagine and incorporate in their service or is it like earlier investments like alibaba and people forget, manly because its a secret, but yahoo was anvester in google. Google came around and ate yahoo s lunch. They made money on the deal but that was it. Yahoo , who nose if this is the beginning of whatever it could be, but they dont have a Venture Capital<\/a> arm. So it looks like theyre just making investments in products. At they think will succeed of course yahoo is known as the company that buys up a lot of failing startups on the low end, right . They bought message me for less money than investors put into it today. So theyre playing all across the spectrum here. Yahoo needs to be cool again and this is part of the picture. And with snapchat, the other thing you need to think about with the valuation, is evan turned down facebooks offer for about 3 billion last year. So what youre dealing with is his idea of how much his company is worth. We actually dont know the company hasnt given any numbers for how many viewers they have, how many users they have. The controversial young c. E. O. Thank you very much. We appreciate your time. Thanks. One of the largest cyberattacks ever all started with a lousy single employee password. Up next, were going to look at the lessons that can be learned from the massive hack attack of jpmorgan chase. Im cory johnson. This is bloomberg west. Jpmorgan chase discloses the size of its data breach in one of the largest cyberattacks ever. The data on 76 million households, seven million small businesses, all discovered by hackers. Thats 2 3 of the u. S. Households affected. User content of information was swiped. But theres no evidence the hackers took account numbers, passwords, birthday and Social Security<\/a> numbers, if you believe what jpmorgan has to say today. This happened after hackers exploited a single employee users name and password and wormed their way through the system for months. Earlier i spoke to our Center Editor<\/a> and tripwire security. I started by asking if this was an unusual approach for the hackers to take . No, actually. Sferbley with the retail breaches weve seen. Finding different side channels. In target they were able to go in and compromise the system through a trusted business partner. Targeting employees, you know, in their home networks, generally those are going to be less secure than the corporate network. So it makes it a very easy target. 2 3 of americans. Thats an amazing number. Yeah. I mean, its to the point you really i mean, this year, lets just say, its to the point this year that its almost impossible to be shocked anymore. The scale of these intrusions have gotten so large that you look at a number like this and you say, wow, thats really big but its remarkable both in terms of the duration of these things, you know, in this case it sounds like they were in there for at least a month, possibly longer, and that was a similar situation with home depot as well, earlier in the year. I mean, so its not just the scale, its how long theyre inside the systems before people notice, which on both levels is remarkable. Yeah. Let me ask you also. When we look at sort of the size of this, its amazing number. Weve seen so many of these, perhaps weve become inured to this point. In this case, you know, jpmorgan came out and said, we are spending more they gave an exact number, about how much theyre spending on this, into the hundreds of millions last year. And yet they still got hacked. Right. A lot of businesses need to be aware of that. We always say that its not a matter of if youre going to be breached but when. And this is a good example of that. If attackers want in, theyre going to find a way in. Be it through a remote port, an application has a vulnerability, or of course people. Phishing attacks very common. I think jpmorgan did some good things here. This could have been a lot worse. The information that was compromised was limited to name and phone number and address. No Financial Information<\/a> was compromised and no passwords were compromised. So thats actually a good thing here. That they actually were able to protect the inside of their net wsh and secure the data. So network and secure the data. So there are some good things about this particular case. If thats the case. Its not clear to me, i mean, thats what jp morgue season saying, that theres no evidence that further information was collected, but i mean, and not to force them to disprove a negative, but theres also no evidence that some of that information wasnt collected, right . My understanding of what theyve said so far is that it seems to be limited to some basic information. But given the duration of time inside the system, its just not clear to me that we have a really good handle on what information was collected. And their reassurances so far seem really tepid to me. What weve seen in the past from a lot of these things, what weve seen from so many of these are drib drabs of information. We throw that saw that disastrously with target. Where every single week or so wed get new information that it was worse and worse. Bigger and bigger. And that in fact the initial sort of promises that, hey this wasnt that bad, actually seemed to get worse. Is there any reason to think jpmorgans different here . Right. You raise a really good point. When there is an issue like this, when there is a breach, its very difficult for businesses to identify the scope of that breach. And look how long it took them to actually provide that information. Theyve had security teams working on this for a pretty long period of time. So thats why im assuming that given the amount of times theyve done to do this research, they wanted to be able to wait before they could actually speak with confidence as to what information was actually compromised. Theres still a chance more information could have been compromised but so far from what theyre telling us, you know, id like to believe them. That was ken weston of tripwire security and bloombergs paul. Up next, tesla isnt tripping, its hitting the gas, on an automatic mated driving feature. Find out what they are and how it could impact teslas business next. Im cory johnson and this is bloomberg west. Teslas adding some features to the model s that suggests a riverless car . Its new capabilities will be revealed in an announcement next week. The news comes after the c. E. O. Posted on twitter that the electric car make already, uote, unveil something else. It included a photo of a tesla. The date october 9. Joining me now is our bloomberg tech reporter. First of all, this announcement, i guess, i was wrong about the dog . It looked like the garage door was open just enough to let the dog get under. No one knows the extent of the announcement. We think we just have farther of part of it so far. Whats that . Basically, if youre buying tesla, unless youre cory johnson, its an expensive vehicle, so youre up against the b. M. W. s and mercedes of this world. Basically the average cost is about 95,000 per car last quarter. A lot of the competition amongst that bracket right now is whats called advanced driver assistance, lane keeping, automatic parking, the improved stop you running into the back of other vehicles. That kind of feature. Speaking of my fantasy life, i got inside of an audi, the new one, and it has a headsup display. Thats kind of hightech driver assistance. Is that really driverless or is that just driver assisted . You mentioned the audi. One drove itself onto the stage. Really . But that obviously there are a lot of regulatory issues. There are a lot of other issues in terms of testing that need to actually happen before we really get there. Before the regulators are going to allow cars to drive themselves. No ones more of a showman in the car industry possibly than elon musk. Talk to me about some of what sort of what this means . They billed themselves as a Technology Company<\/a>. If you dont have the latest technology, then how can you call yourself a Technology Company<\/a> . Right now weve seen the model s has a huge 17inch touch screen and it adds a lot of in a sense, the last generation of technology, which was the entertainment stuff, that was the revolution that they were a part of. Other automakers have passed them in bringing other electronics into the vehicle. Passed tesla. So last i checked, you were the chip reporter. Here you are doing these automotive stories. Whats going on with the chip business and the car business . Because cars have actually been a Huge Consumer<\/a> of chips over the last decade. Its on the up and up. As weve reported, Companies Like<\/a> invidia and intel, they want to talk about vehicles. Theyre looking for hundreds of millions of units and they see vehicles as one of them because theres so much electronics going into it. You need a strong brain. Take, for example, invidia. Lets back track. Were not talking national semiconductor, analog chips that make this signal go to this signal, but essentially funky exatter tos. Were talking about graphics processer to the most powerful computers, visual things ever done. Thats absolutely right. If you want to trust your car to be driving at speed and not drive into the back of some vehicle that slowed down immediately in front of it, what do you need . You need the ability to process those images as fast as is possible and send a signal to the car. Whats best way of doing that . With a graphics processer. Thats really interesting. It also makes me think, we see these stories about subprime lending into the auto sector and what could that mean beyond the auto sector . But were really talking about Technology Going<\/a> into the auto business, Technology Going<\/a> into every business, means that if the auto sectors of the overall economy, it actually can affect the tech sector in a big way. Its a great story. If auto sales go up 5 , down 10 , it doesnt really hurt them particularly because theres 10 , 20 , 30 more chips this cars every year. Specifically, do we think this is tesla playing catchup or are they going to play a leap frog here . Thats what were not in a position to be able to say right now. Depends on the sweep of capabilities that they bring, how they integrate them together. Ian king nose whats going on. Thank you very much, we appreciate knows whats going on. Thank you very much, we appreciate it. Were going to look at what and where and when and why, thats next. Youre watching bloomberg west. We focus on innovation, technology and the future of business. From fred wilson, to some of the loudest voiceses in Venture Capital<\/a>, a warning that theyre burning through cash and way too fast. When the market turns, and it will turn, well find out who has been swimming without their trunks on. Many highburn Rate Companies<\/a> will vaporize. So moneys sloshing around, we know that. Its getting spent, we know that too. But still, some startups need some help getting from point a to point b. I sat down with a man who does just that. Heres his definition. A super angel is one of the most unfortunate words ever selected for describing something. Youre super. You have that going for you. Great. Super april general angel though is an constitutional venture fund of smaller size institutional venture fund of smaller size. This word super angel got coined as a result of individual angels writing bigger and bigger checks and making their own Family Office<\/a> see essentially the bank. And we now are stuck with a word that actually is the opposite what have it means. Were institutional seed funds. But you guys are looking at to me whats interest something that youre in this place. Ar the angel, the seed round, hey, i though this rich guy and ive got a great i know this rich guy and ive got a great idea, but you guys are almost there in a bridging capacity, yes . Its amazing whats happening right now. Its like theres two completely parallel universes of Venture Capital<\/a>. You have the big firms. Theyre trying to write 10 million checks, then you have microc. C. Microv. C. Firms. Were trying to put 10,000 in. The two worlds have completely different views of how the companies are, how theyre growing, and one of the big concerns right now, for example, among the big venture firms, is while the burn rates get really high, well, when you put 30 million into a reasonably early stage company, the burn rates going to go up. In our world that doesnt happen. When youre raising a 1 million round, a 200,000 a month burn rate is significant and op lent whereas when you put 30 million in from a battery or a bench mark, youre in a very different world. This has been a big topic of discussion right now. I think the op lens is not just for optics all over the world, new yorkers hate Silicon Valley<\/a> because they think they spend like crazy out here, but theres this notion that theyre not really businesses. But the concern is when youre writing young founders checks with a lot of zeros on it. Thats why i like what we do at benoit. We have a very kind of blue collar operational orientation to the way we do stuff. Were trying to put that last amount of money in before the big firms come in. If we do this right, the c. E. O. Actually has a very interesting decision during our investment window. Am i ready to go big . Is this a company thats actually figured it out and now i need money to scale . By keeping it lean and mean, our founders have the option of not raising that big round and getting profitable instead. This is not something you can do back in 1999 and 2000. I was talking to one of our producers about you coming on the show and he was saying, isnt the point of like the first the a round only going to a handful of the seed round companies, sort of the weaning process, darwinian thing that gets rid of the crumby companies that cant get there . Whats so interesting is the definition of an a round, thats the funniest thing of all. Were involved in companies that have done their fifth and sixth and seventh institutional closes. Were in the seventh institutional close, but someone comes in and puts 20 million in and calls it the series a. Its the seventh institutional close. So in many ways, by the time the big firm comes in, that company is actually derisked to an extent that we havent seen in other tech cycles because it was so cheap and Cost Effective<\/a> to get to those proof points. That doesnt mean you go spend all the money, but you do deserve the money because youve hit that point where youve hit those milestones. You also changed the negotiating stance. If someone comes in and says, youre going to accept these terms because you need the money right now, youve been there to sort of let them choose their terms a little better. A lot of times a c. E. O. Will come to us with a series a term sheet in hand from a bigger firm, say to us, hey, bullpen, i dont need this much money yet. What if i hit a couple more quarters of sales milestones before i took this big money, wont wont i have potentially a bigger offering and a potentially more derisked company, more peopled bying . We love when a company says that to us because thats in the interest of the company and the c. E. O. Can provide with proper information, is it time to go big or not . Thats one of the reasons weve been so successful. You probably have had a lot of cleaning up to do of these companies, where the paperworks all over the place, the warrants and the convertibles, who owns what and how thats going to change with further round of investment are probably a mess. In our first fund we had 34 deals. About seven of them, there was a salient mistake. Not some minor thing like a cap table was off by a couple shares. The price was wrong. Someone was not on it. A check was not in the round. And doing this kind of cleanup at the bullpen stage before the big money comes in, arms the companies to be better equipped to go in and not have the later round guys have to clean up the mistakes. But when a lot of institutional seed funds are one guy shops or Family Office<\/a>s, its not surprising that theres cleanup that needs to be done before youre ready for the big round. They really do make us eat our lunches at our desks at bloomberg. Thats the way they run this place. You name it, Digital Health<\/a> gadge he wills gadgets all the rage. Since the beginning of this year, Digital Health<\/a> companies have raised 5 billion, twice the previous year. But as the market is the market really big enough for all those companies . Joining me from new york, Global Health<\/a> care growth platform unity. Startup health is a global platt storm to flat form to help entrepreneurs who are transforming health care. Were building an army of entrepreneurs and innovaters who are using technology to literally reinvent every aspect of health care today. We help companies during the first three years of growth. We help them with customer development, we help them raise capital, we help provide the resources that these Early Stage Health Care<\/a> Companies Need<\/a> at the very beginning of growth. One of those companies basis, when he a basis executive on this week, talking about the new basis watch. Hes an intel executive. That company was sold off intel. Intel thinks theres something there. How big is this market . The market is huge. Theres already been 5 billion, as you mentioned, invested in 2014, which is double the size as last year. 347 companies have been funded to date. But health cares a 3 trillion market. And what were seeing is this moment of Creative Destruction<\/a> where the entire industry is being reimagined by technology. So, were seeing Health Reforms<\/a> let me we know health care is huge. Fitness isnt huge. I mean, it seems like a lot of this these devices, im geeked out with my up on my arm, my heart rate monitor or whatever, but i dont really believe that thats a huge business. This is why i think the apple watch announcement is so significant as well as intel buying basis which is one of our companies. Because wearbles are moving to the mainstream. It started with fitness and quantified selfers. But really now my mother now wears a device, the fitbit. So its starting to break into the mainstream. But these wearable devices are being designed into our clothes into our car seats, into our refrigerators. So if you start to look about where the markets going in terms of health and wellness, its larger than just the fitness market today. How large . How do you measure it . Really every aspect of our lives are being reinvented. So if you think about the Consumer Electronics<\/a> market, you think about the automobile market, and how they are these companies are now essentially becoming health care companies, ford is designing sensors into your car seat, into the steering wheel, as an example. Companies like google, with google sensors to measure what . To measure your stress level, to measure your heart rate. To measure your alertness and whether youre awake. Really . Thats pretty wild. So, from a startup perspective, are there sort of are there things that youre able to take from one to the next to the next and sort of apply some of those Lessons Learned<\/a> . Yeah. I think in Health Care Startups<\/a> today, one of the big differences from whats going on in internet tech or Silicon Valley<\/a> is that as a health care startup, you really have to work with the established stake holders in health care today. So the large hospitals, the insurance companies, government. It really takes being an entrepreneur to work with these other very important stakeholders so that you can grow and scale more quickly. When you look at the market, are there sort of lessons that companies in the startup realm here might believe certain things to be true and then they go through sort of a thought evolution to find out other things . Yeah. I think one of the big lessons is how long it can take to get your first customer. It can take 12 to 18 months to really validate your data and get your first customer. So the timeline can be a lot longer. So theres a lot of challenges at the early stage. But i think thats why organizations Like Startup Health<\/a> and other acceleraters out there in the ecosystem are so important today. Because coming together as a community of entrepreneurs to really try to solve some of these big challenges, the long sale cycles, privacy issues, the regulatory hurdles, its a lot easier as an ecosystem of entrepreneurs working together o tackle those challenges. Thank you very much. Thank you. Just a programming note. Has anyone seen my keys . Theyre right there. I cant find my keys. If youre watching and you found my key, let me know. If only there was an app for that. There is an app for that. Were going to be back with the makers of an app and a device called tile. Really interesting thing that helps people find their keys and other lost stuff. That story is next. Welcome back. This is bloomberg west. Next week, the Supreme Court<\/a> hears a key case involving amazon. Com. Workers at amazons Fulfillment Centers<\/a> have to wait at Security Check<\/a>points before they go home to make sure they havent stolen anything. Lines the workers say can take up to a half an hour to get through. Two employees at integrity staff solutionses, which supplies workers to amazon, are suing integrity staff solutionses to get paid for time that they spend in line. Theyre suing amazon as well. Earlier i spoke with bloomberg editor and news labor reporter to talk about this very issue. I started by asking josh whether this case goes back to the fair labor standards act of 1938 or before. All the way back in the 1930s the federal government said, if you have someone working for you, you have to pay them for their time. That very quickly turned out to be not as simple as it might have seemed. So in the 1940s congress came back and said, wait, wait, just to be clear, you dont have to pay people for the time they spend getting to the job. Or going home from their job. Then another nine years after that, in the 1950s, the Supreme Court<\/a> said, ok, well, what does that mean . So, for example, if you come in and youre at work sharpening your knife before you clock in as a butcher, do you have to be paid for that time . They said, yes. They said, the time you spend showering if youre at a battery factory and you might have acid on your clothes, that you should be paid for too. So the question now decades later for the Supreme Court<\/a> is, that up to 25 minutes, that you spend waiting in line for a Security Check<\/a> at an amazon warehouse, is that like the commuting time that you dont get paid for . Or like that Knife Sharpening<\/a> time that you do get paid for . And thats a question with potentially billions of dollars at stake, if it sets a larger precedent about how these checks are handled. Im so interested in the notion that these old rules about you know, im watching the ken burns documentary on the roosevelts and Teddy Roosevelts<\/a> efforts to sort of provide for Worker Rights<\/a> in the very earliest parts of his career, both in new york state and later on of course in the white house. Those old issues, for more than 100 years ago, are issues today for tech Companies Like<\/a> amazon. Yeah. Its really remarkable. It was a great story by the way from josh. Really sort of bridging across how these old labor standard flows kind of running into the malyabblet of work . What does it mean when people are tell commuting . When we have issues with respect to things like ecurity. You can see the argument with respect to amazon. This is closer to commuting than sharpening a butchers knife but at the same time, the reason why these acts existed was to try and attach some value to peoples time. So that you wouldnt force them to spend half an hour standing in line in the morning to get any more than you would have one elevator going up to the bloomberg offices in new york and everybody stands around for an hour. You want some value attached to time and so employers are forced to actually act in a way that gives people time to do whatever it is theyre being set out to do. Im very sympathetic surprisingly enough to me, to the union case here. Because it seems as if amazons not doing everything it can do to expedite the process. I think these are nonunion workers but to that point, whenever i do a deal with someone and they see me coming out on the other side, i think about, jeez, is an accident theyre coming out on the other side to their benefit or do they have a financial return . If you had to wait in line a long line and they were already paying you, theyd probably have more lines. Right . But in the same token, if you turn it around and say, its costing amazon money now to have people standing in line if they have to pay them, so what are they going to do . Well, theyre going to put more people in place to do these inspections and check for people who have actually got goods that theyre potentially taking out the door. The flipside argument is, well, you know, theft is not part of the job. So we shouldnt have to pay you while we try to figure out whether or not youre stealing things. Its a very interesting balance. What do you think . Indeed, one of the points the plaintiffs make is that, the point of the fair labor standards act was not just to make Companies Give<\/a> their workers more money. It was also to say, if you have to pay for your workers time, youre less likely to waste their time. And so the plaintiffs have argued i think very reasonably that if they were paying for those 25 minutes, if integrity or indirectly amazon in its contract with integrity were paying for those 25 minutes, then it wouldnt be 25 minutes. Maybe they would stagger peoples shifts, maybe they would put in more inspectors. And theres lots of mischief or negligence that can go on when you have a precedent that you can have people required by their employment agreement to stand somewhere for 25 minutes and not paid for that time. That was our Bloomberg News<\/a> labor reporter, i tweeted out that article. And our Bloomberg Contributor<\/a> editor joining us. Facebook goes to war with drag queens and loses. Well explain when bloomberg west returns. You can always watch us streaming on your tablet, phone and at bloomberg. Com. Welcome back to bloomberg west. B west now for the bite. Whats the number . Todays number is 23. 23, which is Michael Jordans<\/a> number. But thats not why you chose it. No, because in 23 short days, San Francisco<\/a> drag queens brought facebook to their knees. The issue was facebook kicking off drag queens from facebook. Well, 23 days ago, reports started to come in that drag queens were using fake names on their profiles so duh. Right, exactly, so our profiles start to disappear. So we mobilized and started a Mynameis Campaign<\/a> to get facebooks attention and we got it. To me this mirrors a lot of issues about privacy and their notion of what you disclose and how you disclose it and who has a right to privacy. Well, what they revealed is that they really want people to reflect their genuine identity on facebook so they can have an authentic relationship with people. In our meetinginging with them, they said that they want us to be able to use our chosen names and reflect our try identity. So we actually had a huge victory in our meeting with facebook. Mark zuckerberg said something in his book, ail read the quote. He said, you have one identity. Having two identities for yourself is an example of a lack of integrity. To me it shows he doesnt know much about drag queens, among other things. Well, that quote is a few years old. I think he may have come around since then. Thats definitely true they need to work on some of their policies, which theyre going to do. Before, when people reported profiles, there was no way to contest it. It was their way or the highway. Were going to shut you down unless you change your name. Now theyre going to have place where you can appeal the pro file. Theyre going to review it and see that we are genuine, real people. Because facebook has a huge responsibility. There are a lot of people who do creepy things on facebook. So theyre trying to keep the community really safe. Nobody wants predators and spammers and bullies on facebook. So were working together on this. It really feels very, very, very exciting. Fundamentaly, part of the Lgbt Community<\/a> and the drag Queen Community<\/a> is having a separate identity, having a second identity, yes . Exactly. If you ask anybody what my name is in or out of drag, its roma. That is who i am. Facebook realizes that. This is a great victory for people like me who have proven identities and a great big presence on facebook. And the Market Opportunity<\/a> for facebook gets a little bit larger. Exactly. Thank you very much. Thats it for bloomberg west today. You can watch us on your phone and tablet and at bloomberg. Com. Check you out next week. Welcome to money clip, where we tie together the best stories, videos, and interviews in business news. Im adam johnson. Here is todays rundown. Hong kong attacks at two different protest sites. Todays wildcard, bill gates talks about ebola and his latest project. Along with his new project, Digital Payments<\/a> for the poor. And jpmorgan suffers one of the biggest hacks of all time, but not like the other ones. We will tell you about it. In property, new","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia904504.us.archive.org\/6\/items\/BLOOMBERG_20141003_220000_Bloomberg_West\/BLOOMBERG_20141003_220000_Bloomberg_West.thumbs\/BLOOMBERG_20141003_220000_Bloomberg_West_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240621T12:35:10+00:00"}