48 hours, beginning tomorrow. the brazilian parliament has in the older the impeachment vote against dilma rousseff. the papers from a panamanian company show the use of shell companies. i'm mark crumpton. "bloomberg west" is next. ♪ emily: i'm emily chang. this is a special edition of "bloomberg west." we are in district hall. we will be spending the next three days diving in to the tech companies that call boston home. now the city is getting another huge boost from ge as it relocates its headquarters from connecticut to boston's growing seaport district, not far from where we are now. how it shapes the mind of current tech leaders -- but the city is working to improve itself. first, i want to start with a look at venture capital and the funding environment because a number of top vc's are based here. joining us, from mass challenge -- a not-for-profit headquartered in boston -- our guest. they have raised $5 billion with over $500 million in revenue. and my cohost for the hour bijan -- gentlemen, thank you for joining us. so, i will start with you. you have been on the show before. it is good to be in your neck of the woods. you guys invested in tech. what is it like to invest in tech in boston when the heart of tech is in silicon valley? >> i live here. i commute quite a bit. it's smaller, but is very exciting. when we started back in 2005., it felt very early. the market was restarting in a number of ways. a number of companies have been >> i live here. doing very well here. tripadvisor. a lot of great things are happening here. emily: john, you have been around the world. do you think investing in the heart of boston can be an advantage? john: yeah, totally, i think boston is the best place in the world to invest in a startup. it is not as trendy. we have a broader spectrum of industries we support through mass challenge, including nonprofits. and boston has all of these areas, from health care and biotech to high-tech, even retail consumer goods, nonprofits as well. i think it is a diverse, smart community with a lot to offer. bijan: it is a much bigger market. i think the difficulty with silicon valley is hiring. it's difficult. overfished, i don't know. it's still the epicenter, to be sure. emily: how do get the facebooks and the dropboxes to stay? john: we do not take any equity -- emily: why would you not take equity? john: startups are good. we have taken it upon herself to support startups because they benefit all of humanity and all of the community. emily: if you invest in the next uber, you get nothing? john: we get nothing. instead of getting a bigger slice of the existing pie, we focus on making more pie, and when there's lots of pie, there are lots of slices and we benefit from that. bijan: why did you pick boston for mass challenge? john: i am from here. my cofounder is an hbs guy. you mentioned facebook and dropbox. they started here. boston gets the first look at the best startups on the planet. i think there's a reason why boston was not succeeding in the 1990's and early 2000's as much as it should have been. we are very happy to be here. emily: some people may not know this, but mark zuckerberg actually said a few years ago if you were starting a company today he would start in boston because he felt silicon valley was to focus on the short-term and he would perhaps more room to breathe here. but why would a startup come to mass challenge as opposed to -- john: we take the price to zero and we offer essentially the same benefits. we can make offers to any investor, the federal level, abroad, we have a massive network with axes to investors, marketplaces, more talent, other technology. and then you see our relationship with the corporate entities like fidelity, verizon, microsoft, ibm, cisco, we have ge coming into town. we have access to doctors and health care, investors. we are a nonprofit support foundation. bijan: and you can have those companies work with mass challenge? john: that is right. we have had those companies come through and that is one of the vintages of our model grid we don't complicate that process. we are not trying to take a slice of that pie. we just want them to be successful. emily: mass challenge is actually home to more than 40 startups. i'm wondering what is the accelerator seem like here? >> look, i think that was missing was tech investors, incubators when we started smart capital. that part of the ecosystem was not that vibrant. but it's wonderful -- for us and this ecosystem. emily: what are the most underrated boston startups? john: there are so many. it is hard to pick. you will see later on the show -- a phenomenal company to invest in. a lot do not make a lot of noise early on. we have a lot of pharmaceuticals that are promising. there's a really novel technology for diabetes. but there's a lot of great stuff in the mass challenge pipeline that will not be that prominent for the next few years. emily: bijan? bijan: if people choose not to work with mass challenge, they go somewhere else. what is the biggest reason? they do not want to be in massachusetts? john: typically we do very well. we have had startups apply from 70 countries. if they are looking for a location, it is usually san francisco or new york. people talk about the weather. i don't think that san francisco or new york weather is that much better -- emily: all right, i live in san francisco. thank you for joining us. you are sticking with me for the hour. now a story we are following, lending club's founder has resigned after an internal review found a violation of the company's business practices. lending club matches borrowers with investors willing to finance their loans over the internet. lending club shares have been struggling over the last year and plummeted nearly 35% in monday from trading. coming up -- which school turns out the best entrepreneurs and engineers? and later, we will sit down with the president of boston-based zip car and talk about how it can survive in a future of self driving technology. stay with us. ♪ emily: this is a special edition of "bloomberg west," where we are looking at the innovation and creation feeding the boston startup scene. i am here with the general manager of a boston-based firm. they were one of the first to offer education in engineering in the 1800s, but the official engineering school is relatively new, founded in 2007. frank, thank you for being here. you just came from santa barbara where you had a long tenure. what attracted you to this position? guest: the legacy of harvard, the power of the institution, the creativity of the students. i was really drawn to the innate talent, the rock creativity in the students, combined with the power of harvard's professional schools writ large -- the medical school, the business school. also it struck me that harvard was interesting at an historic moment in engineering. we are growing the faculty. we are moving to a new building. all of this at the same time that these gifts are coming in. it's really an unusual confluence of amazing things. emily: that said, some would say harvard's in generic school has lagged other top programs like m.i.t. or carnegie mellon. you pledged to get to a top-five school within five years. that's ambitious. how do you plan to do that? guest: most of these metrics are based on the size of the program. if you look at the metrics of scale -- size of the faculty, publications for faculty members, funding for faculty members -- we are right there at the top. but we are a very small program. i don't think we want to change that. we want to keep the small, community, collegial field, which is part of how harvard does engineering and that will enable us to be of the top of the field on a scale basis compared to anybody. bijan: it's really impressive what is going on there. how are things going with getting more women to be engineers, things like that? are you happy with that trend? more work to do? how are things doing? guest: we are happy with the trend. we have more work to do. we are at roughly a third women in the that's lose program. what we call a concentration. the national averages somewhere around 20%. that it is no reason to rest on our laurels, right here it would make the top 10 rankings, but we have to keep pushing as we get closer and closer to the demographic in the population. emily: how do you push that? guest: great question. we need to recruit high school students into the undergrad program, and almost more important, we have to move on to our faculty ranks. if we do not address the pipeline at all of its stages, we will be falling short. we will not be a draw for the undergraduates. emily: some 1.2 stanford being the father of google and mark zuckerberg dropped out and went to silicon valley. how do you keep that from happening? guest: that's a great question. really as educators our mission is to bring the students all the way through to fruition with the degrees that they are training for. that is our mission. along the way, things happen. kids have ideas. they take them and run with them. i'm not saying we are trying to create short circuits to drop out early, but rather focus on the complete package, and use that as the springboard. emily: bijan? bijan: those are exceptional people. i tend not to get focused on those as the mass of students you are educating. do you think that there is room online to supplement these things. at do you have a view on online schools? do you think that's a way to widen the aperture of the harvard experience? guest: i do. engineering, computer science -- we tend to do more there. i think a big piece of this is bringing innovation more broadly into our curriculum, so this is something i would say has been slow to change at harvard, but there has been a mindset that harvard pushes -- no boundaries, full stop. over the last decade i have watched were a number of harvard faculty have been very successful osborne orders. i have a meeting with brian adams, one of our cs faculty. their excitement is infectious. there is an increasing fraction of our faculty inclined to do these things, outside ventures. if we can capture that and bring that to the curriculum, the classroom curriculum as well as the on my curriculum, i think we can be more effective. emily: how do you do that without encouraging kids to drop out? what is harvard's policy? guest: i've wrestled with this. you're thinking about an application on a one-dimensional perspective. there is this notion in the tech space -- i do not know if you are part of this, but the idea that there are two dimensions, elements and fundamental character. we can do both. we can push back against the classical approach to research, but do something useful at the end of this. that becomes a much more exciting opportunity for the students. emily: last question. obviously silicon valley is much more than silicon valley proper. but san francisco has a geographic advantage through what he you doing to improve harvard's brought a relationship with the tech community? so you have those bridges as well? guest: we do that and you don't waste. we have great networks on the west coast. we are recruiting students. we have great conduits. we have great connections out west. here in boston, we do amazing things. we have wonderful opportunities arising for us. there is a startup community. it is really uniquely boston. and we need to find the opportunity. emily: all right, frank doyle, dean of harvard's department of engineering. thank you. and l.a. judge has thrown that a lawsuit challenging media mogul sumner redstone as mentally incompetent. this comes after he testified by video that he wanted his daughter to make medical decisions for him if he becomes incapacitated. he said he wanted his ex-girlfriend out of his life. she is suing them for $70 million. the drama goes on. they are best known for companies like twitter, but these days they are focusing on robotics. a much more to come this week on's robotics. we will catch up with the irobot founder, and a deep dive into out m.i.t. is doing cutting-edge research on everything from self driving cars to artificial limbs. stay with us. ♪ emily: this is a special edition of bloomberg west, live from district hall, diving into the companies that are driving boston troll growing tech scene. joining me, our guest from behind the companies like twitter and oculus -- you guys were very early on oculus. you had crews animation. bijan: our job is to find exceptional entrepreneurs. we were very early with osha with twitter and tumblr. we are delighted to be the first investor in oculus, and lily, in my mind, is the next consumer flying camera. all of these machine learning, exceptional hardware. we think robotics is going to be a massive category. emily: how do you know that drones and robots are not the next 3-d tv? bijan: 3-d tv, we thought it was a gimmick. we did not invest in that space at all. we think entire industries can be transformed. going to get your drivers license him a it will be antiquated. emily: we talk about you being in boston. i wonder if it gives you a different perspective on the funding environment. bijan: we are in a time of mild correction -- emily: that is mild? bijan: we've been able to raise more money in the first quarter of this year than in the last decade. investors have lots of money under management. tens of billions. we have more startups i never, but we have this funk where the public markets have really taken a toll on public tech companies and that is a downward pressure on valuation and we are in a little bit of a correction now. it probably will get worse before it gets better. there are too many great ideas and too much capital to not forge ahead. emily: all right. you are with me for the rest of the hour. coming up, we have much more focus on the boston startup scene. we will hear from boston's business leaders. we will hear about hydroponics and jet technology when this special edition of "bloomberg west" continues. ♪ >> asian shares reverse early after new data showed chinese producers eased. it was a smaller drop than expected. tchedmer inflation ma forecasts. our latest full-year forecast predicted a $121 million loss, taking into account the near doubling of its u.s. recalls. japan's transport ministry announced in a 20 deadline for the company with a comprehensive recall plan. results tomorrow. fighting poverty will beat out priority as he claims victory in the european part -- in the filipino presidential election. he has more than 38%, ahead of his opponent. voters appear to have embraced his zero-tolerance approach to crime and a string of unguarded comments failed to damage his appeal. those are the headlines from bloomberg news. let's get the latest on the markets as japan comes back online after a down morning session. juliette: just having a look at the nikkei as it comes back on, up 11% on the break and still holding onto the gains. it has been an interesting session in china; we have been seeing a bit of a boost to equities on the data you are mentioning, although the market has been fluctuating in and out of negative and positive territory. here in hong kong, stocks down to the tune around one quarter of 1%. went over was the biggest loser on the index, down by about 7%. the philippines has now turned positive. we have seen the pay so start to rise against the dollar following the election victory. the us trillion market is up 2/10 of 1% despite the fall we saw in crude prices, and new zealand also looking quite strong, up by 4/10 of 1%. a different story when you look at the regional index excluding japanese equities. is down for its 10 session in a row, its longest losing streaks in september, 2000. we have had data out of china today showing that auto sales 1.7 2.4% on the year, million units. we are seeing a couple players looking a little bit higher, toyota up by 1.5% in tokyo trade. things are certainly looking next, but we are seeing some good games coming from japan, up by 1.5%. that's the state of play in asia today. ♪ emily: the goal is to succeed on -- now to a boston-based startup -- frank farms is the creator of the leafy green machine, a large shipping container outfitted with a hydroponic system and growing equipment. they have had success stories in 22 states. we are joined now. my guest for the day is an investor in freight farms. explain to us how this works. it is wi-fi and an app. >> it starts with a turnkey system and it is a light array and all of the equipment you need to be a commercial farmer. it allows the user to follow basic construction and workflows and get started in week one. emily: the goal is to succeed on a broader scale, right? what's absolutely. double when we got started, we wanted to activate marginal spaces in the environments. it was a drag on the community and not creating value. by putting the product in the hands of more people, it really allows us to create a network of commercial farms in all of the spaces in between every city. >> i am very biased. we are very proud. the thing that is being built near that we resonate is a great product and the mission, we really respond to the mission and this is a great example of want to give feed the world and solve a real problem. these are not founders looking to make a few dollars by splitting the company. they are looking to change the world. emily chang: is that correct? >> absolutely. the criticism of -- emily chang: the criticism of hydroponic food is that it is flavorless. >> that was true when it was new. we have allowed our growers, who constantly experiment and tinker, to crowd source the innovation and share it across a uniform platform that our growers are using add there is a unique flavor profile that can be shared. when a farmer in minnesota comes up with a basal taste, that can be shared wherever they want. >> boston is great. i am a boston guide. born and raised. >> no urge to go to silicon valley? >> there is a significant ecosystem. when i came out from undergrad in 2004, it was not here in boston. over the last 10 years, it changed dramatic. there is an ecosystem you can tap into and it is amazing. i would not want to do this anywhere else. >> all right. we will keep our eyes on you. my guess is what us for the rest of the show. a story we are watching is twitter cutting off a data miner for information. they are selling it to newsrooms and government agencies. they say that they never authorized data miner to sell it to the government for surveillance. this highlights an intense interaction between silicon valley and washington. coming up, the future of urban mobility and how it changes zipcar. we have commentary from our senior executive editor, brad stone. we will hear from alan powell, who sued a capital venture firm for gender bias. check it out. ♪ emily chang: this is a special edition in boston and we are digging into companies here. now, zipcar was around and, with the arrive of mass-driving services, the company may be vulnerable. the president of zipcar joins us now. so, what is zipcar's role in the future? >> our role is well-positioned to continue to lead. if we continue to talk about what is happening with urban mobility, you mentioned that this was a founding member of the sharing economy and our founders came up with the idea of giving people access to a car, without the cost and hassle of owning a vehicle. years later, we continue to lead. if we look at the rise of all of the different rideshares, it gives ways to continued growth we have. >> how would you define this space? >> i define leading the space as expansion and ongoing development of product's and -- of products and services. the strategy has not changed and our vision is of the world -- we have never been so close as today. >> do you think it is car and car ownership? >> the biggest competitor is car ownership and it is intriguing and flattering that companies, like car manufacturers and supply chain organizations for cars are getting into this space. once, we were laughed at. emily chang: a company is partnering with lyft. do you think of self-driving cars as a threat? >> i do not see it as a threat. you hear about a lot of companies talking about building a car. this company is not building a car. we operate and maintain a network where the members are and where the car needs to be and what sort of car needs to be there. we will continue to develop that technology and that information for the members. >> do you think that autonomous cars will happen in the next 5-20 years? >> i think that it is inevitable. i would not put a time or date on it. we are not building a car. we are enabling a service. if you reserve a zipcar, you walk a block. tomorrow, you walk to where ever it is and the car comes to your door and drops you off at your destination. the smart thing is that it goes the next lock over and it will pick up the next member and carry on. emily chang: what is your vision for the future of urban mobility? >> there is a convergence of technology and mobile players in the market that will enable smarter and cleaner streets. i believe that the sharing economy, whether car or ride, will continue to enable this. zipcar is a leader. >> we encourage companies to go the distance and stay independent. is the new owner integrating the company or leaving it alone? what is happening? >> avis-budget group. >> i give them credit for having the foresight to see the revolution in the urban mobility, before others will stop -- before others. the second thing i credit is recognizing a strong focus on members and how we work with cities with sharing and mobility. the system enables the network to work and it has been left to our devices. as you know, we are still located here in boston and we continue to operate and take advantage of the skills that avis-budget has. >> thank you so much. you are with me for one more block. we turn to digital music and video with spotify pushing into content. they will unveil a wave of original shows after adding clips from the bbc and comedy central. the programs will be available free to spotify users in the united states, the united kingdom, germany, and sweden. they want current customers to spend more times on the service. it is to compete with youtube and apple. up next, meets a startup working on a business jet to carry passengers faster than the speed of sound. supersonic jets. up next, deutsche bank at 7:00. ♪ emily chang: welcome back to a special edition of bloomberg west all stop this is a story we are watching. shares are plunging at the close. so, first quarter earnings missed estimates, reporting a loss. they pulled back the installation guide and they now expect growth as low as extreme percent this year. we are watching drones filling the sky in the future. this is a picture painted with drone technology ballooning to $127 billion by 2020. that includes verified insurance claims. poland was the first country to draft laws, followed by south africa and singapore. continuing to focus on boston innovation, i turn to aerospace. the company is doing cutting-edge research to bring supersonic jets, that can fly faster than the speed of sound, mach 1. after the industry-wide downturn, enthusiasm fell off of the map. a concorde crashed and killed people. nasa is working on for sonic flight again. a startup is working on supersonic jet technology that will take people from london to new york in three hours. we are excited for this segment. we have talked about it all day. explain the boston role in this. we think of florida, texas, the west coast. not necessarily this. >> you are right that they get a lot of attention. there is innovation and technology developing here in boston at schools like m.i.t. and harvard. the innovation is great for labs. a company in massachusetts supplies parts to our company in the boston area. it has innovation and the european market. it has a great ecosphere. we have everything right here within a quick hop. it is a great place to be. we have that. emily chang: it looms large in this deal. how can you prove that this is safe. >> the concorde exploded because of the mechanical. it was a puncture in a tire on the aircraft and it hit the bottom of the wing. the market has changed since then and the european market is exploding and the global expectations in the asian market has exploded. people go from asia to the middle east. >> i will do it. i will travel. we do a lot of business in europe and china and getting there would make my family happy . >> exactly. i fly frequently from boston and it is not something i want to do regularly. if i could get the flight down to six hours, i would go there once a month. you need to be there, shake hands, look someone in the eye. emily chang: the problem is that it is so loud. you can only do transoceanic flight. >> there are a lot of configurations to reduce the sonic boom to a background noise like an air conditioner. it can go over populated areas and people would rarely notice. >> we will start with europe and asian markets. the u.s. will restrict entry for 15 years. there is a enteral regulation that prevents supersonic flight. as they see it competing, they will look at the regulations. emily chang: you have elon musk and richard branson getting into space. you need $100 million to account for any and. -- for anything. >> it is not easy. you can raise money for the iphone easier. we have travelers and business users who are investors in the aircraft, if they can save that much time and do better business, they will want to. >> how much does it cost the passengers of flight -- the passengers to fly? >> the pricing will be around a first-class pricing. >> not exorbitant. >> all right. you are in. thank you so much. and, you missed your calling as a senior anchor. thank you for joining us. that will do it for this edition of bloomberg west. we are live from start of central, as well as -- tomorrow, a special focus on the boston tech scene continues at the convention center. we will talk about the biotech scene and speak to the mayor. thank you for joining us. ♪ anchor: the imf has good news. wildfires move away from oil facilities. paying on the horizon. rising badlands and slowing growth. heralding a downturn.