Transcripts For CSPAN2 2015 TechCrunch Conference 20160104

Here. Our next guest is very exciting to have him join us on the stage. Uri and i talked a little bit about a. I. Elons not a fan, uri is. Either way, the future is here. So please welcome to the stage dr. John kelly from ibm and our moderator, alex wilhelm. Okay. So were going to try to be different today. Were going to do a live demo which i props you works this morning promise you works this morning. Well see. What were about to see and why do we care . Well, alex, what youre about to see is something that no one else has ever seen other than people deep in my research labs. Many of you remember watson, the Artificial Intelligence machine, on the game of jeopardy. At the time it was an open domain, question and answer system at the forefront of Artificial Intelligence. Fast forward to today, what youre going to see is watson has ingested all of wikipedia and not only answers questions, but reasons over that and form opinions on any subject. Okay. Lets, so the tech guys can make it turn on for us. There we go. And i believe it has an introduction going on first. Watson . Is it going to do it . Is it going to happen . Lets go watson . Please start. Hello, and welcome to the ibm demonstration. Today we will demonstrate [inaudible conversations] capabilities in generating arguments for or against specific [inaudible] please select a topic. Okay. Lets go ahead and do wikipedia is reliable pro speech. Scanned approximately four million wikipedia articles. Scanned all 3,000 sentences in top ten articles. Assessed pro and con [inaudible] ready to deliver. Thank you for the opportunity to share my view about this interesting topic. It is the always good to start with some background. The reliability of wikipedia compared to other encyclopedias and more specialized sources has been assessed in many ways including statistically, through comparative review, analysis of the historical patterns and strengths and weaknesses inherent in the process unique to wikipedia. My opinion is that wikipedia is reliable, and i would like to state a few simple reasons for that. Its editors and contributors provide identification. Another reason is that wikipedia provided better coverage and longer articles in general. These claims are supported by the scientific literature. For example, an early study conducted by ibm researchers in 2003 two years following wikipedias establishment found that vandalism is usually repaired extremely quickly, so quickly that most users will never see its effect and concluded that wikipedia has surprisingly effective selfhealing capabilities. Im sure that my time here was not wasted, and i hope i have convinced you to support my view. Wikipedia is reliable. [laughter] thank you for listening. [applause] thatll make everybody so happy. Its reliable, we can use it on papers. So thats good. Im very curious, when you ininterest that much data into watson ingest that much data into watson, do you say i want you to answer this, do you train it . Or does it automatically understand how to the pull out different topics . All you coto is give it a topic all you do is give it a topic, alex. Watson was not trained in that domain. We gave it a topic and said form an opinion on this topic. It went through and organized all the information, it understood the context of all of the passages in wikipedia, took apart all the syntax, reassembled it and then machine generated the language. How does it understand the concept like authenticity or accuracy or whats good about wikipedia . How does it understand those concepts so it can actually pick how to argue its own position . Yeah. So it looks for multiple scenarios and reinforcing information. For instance, i was surprised to hear reference ibm research working in that area. [inaudible] yeah. So what it did was it found some passage in wikipedia, and then it went off and validated that that was a legitimate scientist from ibm research before it would say it. So its constantly looking for verification of what its about to say is correct. So is that piece of technology, is that currently something people can use on the market, or is it more of a forwardlooking thing you havent released yet . Thats a forward looking. Let me remind you all at the time of jeopardy, watson was a large Computer System in a room. Since that time we have taken watson apart, if you will, lifted it up to the cloud sure. Its available as a set of services and apis so that everyone in this room can now go out and start to compose their own mini watsons, if you will, in the application space. So how long until thats not forward looking but actually in the market . Is it a six month question . Is it a three year question . How far away are we from having that out . This is probably 1218 months or so away from being in the market. Okay. Imagine, though, thats a trivial example of wikipedia. Remember that in the area of health care, watson has ingested almost all of the worlds medical domain. So if you give watson a disease topic, it will go into all published medical journals and form opinions on diagnoses or drug discoveries. So i was doing some research, and i found a really fun story. Nikita khrushchev actually came to an ibm facility down in san jose thats right. This was back in the 50s. They are rigged up a computer he could ask questions of back in 56, 57. So you have been on this topic for decades and decades and decades. Have you solved it . Is it done now . Or are you still making progress on the issue . Yeah, thats a great question. So prior to watson, everyone in the Artificial Intelligence community had tried to solve open domain question and answer by writing a bunch of rules, rulesbased learning. Or organizing the information for search. Sure, sure. That had very limited success, and it really wasnt until we took a full open domain statistical approach and taught watt natural language watson natural language that it was able to answer questions in open domain. Okay. So on that point, ive heard more about a. I. In the last six months than in the last six years. It does seem to be a moment going on. Yes. Why are we seeing innovation grow so quickly right now . Whats changed in our approach maybe . Thats allowed us to do this . Yes. I think were sort of at the sort of proverbial perfect storm here. Much of the worlds information is now digitized including natural language in areas like health care, law, etc. So computers can now access it. We now have the compute power to do Something Like you just saw. We did not have that a few years ago. So just the raw metal capability. Yeah. And what has really changed then in the area of Artificial Intelligence is areas like Machine Learning, Statistical Analysis are now advanced to to the point where we can do things like you saw there. And just to make sure i understand correctly, Machine Learning is one of the things watson can use, part of the technology stack, if you will . Its one of the Building Blocks of watson itself . Thats right. Think of watson as a whole series of statistical learning engines. Its not one thing. And its constantly computing and trying to learn over information. We do not program watson. We give watson data or we give watson better data, but we do not reprogram it. We give it better algorithms or better Machine Learning. So you give it a stronger brain over time, but you dont tell it what to think. It learns over the information. Okay. I brought some with us today, we have them here, when you go out to pitch developers they should use watson at mit and new york, whats your core pitch . What do you start with . What do you tell them . The interesting thing is its such a powerful technology, i dont have to give a sales pitch. They immediately go into how can i use this . Can you give me an api or a set of services to do this . I was up at mit a couple of weeks ago, and theyre blown away by it. Theyre just using the services now that are coming out of this. We have opened up, as i said, the platform, and there are hundreds of startup companies. Ibm, we formed a 100 million fund to starlet the fund and bring additional to start the fund and bring additional. Is if they want a check, they should find you when were off tabling. They should grab me. Been kind of an outreach push for you, so how has developer update been so far . Has it been slow . Its been exponential, alex. Okay. We are returning as fast as we can to keep up with demand in the investor commitment. Even Large Enterprises now are using it to transform many areas of their business. So ibm is a very, very venerable company, very old, very respected, big history, lots of work. Young, its not snap you know, its not snapchat, its not facebook. Do you think you have the mind share you need here in Silicon Valley to attract even more developers to your company, or are you guys still fighting off that stodgy ibm pocket protector kind of image . [laughter] no fence. No, no, no. Well, we do not have mind share here. Its gaining rapidly, its growing exponentially. But if you listen carefully later this week, youre going to hear some things from us that i think are going to reinforce our commit to the Developer Community out here in San Francisco and in the valley. I would also remind you that when you think about the eras of computing, the first was tabulating machines. That lasted through roughly the 40s. And then we we started programme computers. Every device is programmable. Watson is not a programmable system. Its a learning system. St the first of a third era of computing. And ill just remind you that ibm played a pretty Important Role in the first and second eras of computing. We will play a key role in the third era of computing. Thats a really good, actual, segway. Whos your main competition here . Are any of the big players out there trying to encroach on your territory, or are you a bit out ahead . Yeah, i think well, first of all, theres a lot of great people working in the area of a. I. And cog cognitive computin. Most of them, though, are developing single algorithms or solutions to solve some problem so a very narrow theyre very narrow solutions. Were the only company, alex, that has developed a complete platform, the ability to innovate on top of this. And, i mean, if i had to make a prediction, i would say for every innovation going forward, therell be a hundred or thousands of pieces of innovation that will occur on top of the platform. And thats what we want because, yes, were an old to company, but we think in terms of era computing. We dont hi in terms of thunderstorm we dont think in terms of tomorrow afternoon. [inaudible] is that correct . We do a revenue share, value share on the platform. Aws has a different sort of platform, charges by usage and not by rev share. So why did you pick yeah. Well, you know, the first decision we made we could have, and we still could sell lots of watson boxes. But we decided that we wanted to open the platform up and make it as a service knowing where cloud was going, knowing where as a service was going. So that was a very strategic decision for us. And then its just a matter of do you charge by the click or not . And because this is a learning system and its constantly becoming better and smarter, it was very important that we share the value with our partners and customers, and, therefore, the rev share, value share model. Have you had pushback from developers saying they want to pay for it more on a click basis . No, because its a shared risk. For developers, you come on for free, develop your business, and as you start to earn your revenue, then well share that. But we want an easy onramp. We want to get going, and we think its very fair. Is watson going to be a key revenue driver for ibm moving forward . We have a set of Strategic Initiatives in the company which is our highest growth areas. Watson is part of our Analytics Business which is a 17 billion doubledigit high growth rate business. And watson is the Fastest Growing component of our Analytics Business. Okay. We can talk about future. Oh, great. Thank god. Im going to go ahead and presume you dont think that a. I. Or cog anity [inaudible] is going to end human kind as we know it. Because theres been some talk among luminaries about what this looks like and should we be worried. We talked about this seems relatively benign and more industrial than aggressive. Yeah. You know, i think that when any new Technology Come along, people get worried. And, of course, technology can always do great things or not so great things. It depends on how we use it and how we control it, you know, whether that was the steam engine, locomotives, automobiles, xrays, you name it. This is a brand new technology. Its going to change the world. There is no question in my mind. But when you think about what this technology is do, i mean, fundamentally if you look at decisions that human beings make, we make decisions with a bias, we make decisions on incomplete information. Yes. I believe that nearly or perhaps every decision that we are make of any importance mt. Future will be made with a in the future will be made with a watson by our side. Its giving us options that we can select from, so so its more of an addition. Thats right. So think of the simple demonstration we did, although complex technology around wikipedia. Think about watson where it has ingested all of the worlds information on drug therapies, cocktails for oncology, for cancer. I dont know about you, alex, but if i had cancer, god forbid, and the cancer board was meeting to decide what chemotherapy they were going to give me, i would want watson to have gone through to be sitting at that cancer board to augment the decision and say, hey, you know, guess what . You may want to rethink that. Or heres a new con to that procedure. Right. Okay, but as watson or platforms like it get smarter over time, will they less and less be help mates and more leaders in our lives, or are they always going to maintain that secondary status . Handsoff in a way stuff. Yeah. I think therell always be a set of decisions or moral decisions where itll be a joint decision, but we as humans will always have the control position. But i think as time goes on more and more decisions will be able to allow the system to make. Think about internet of things where we need constant response in milliseconds. Making those decisions in real time versus waiting for me to be able to digest something in seconds or minutes. So for all of our daily lives, does watson power apps and experiences we already control or is it a standalone product that i would talk to . Is it more baked in or standout . Yeah. So i predict its going to be literally everywhere. It will be powering things that you just take routine in your daily life. If youre applying or buying something, watson will be behind that in enhancing your experience. But it will also be visible in of your applications where youre being creative or you want information that you just dont have time. So i think its going to be invisible and highly visible, basically ubiquitous in everything that we do. But to be fair, you want watson to be a brand name in technology. Am i going to have a powered by watson sticker on my pone . Incredibly, alec, watson is already the premiere brand in cognitive computing and Artificial Intelligence. Not something we set out to do, but through the demonstration in jeopardy and what weve already applied it to, it already has very broad brand recognition. So as we move forward, well decide whether we want to do powered by watson. We already, for instance, opened up a new division of ibm around watson health. Sure. Thats your take on the health care vertical thats our health care vertical. Youve seen us recently stand up new divisions around internet of things, around education. So as watson then becomes capable of operating in those domains, well bring watson into those areas. Okay. Well, before we go, humor me with a last question. Was will a moment today where you and your team were like, oh, wow, it actually works . Howd that moment come to be . Yeah. So in the journey to jeopardy which was all the way back in 2011, there was a point many time in in time in 2009 when watson had made a quantum jump forward in it ability to learn and answer open domain questions. At that point i remember sitting in my Conference Room looking at the demonstration, and i said we have something thats to going to change the world. It was shocking. Did people believe you back then when you said that . Were they like, youre craze i or, yeah, we agree . Pardon me . Did people agree with you at the time . Yes. Obviously, my Research Team had high creation visions, but they were very much focused on just a q and a machine. When i saw that system could reason and learn, i said we have something thats going to change the world. This is not just another Computer System. This is a new era of computing. But, again, no zombies, no apocalypse, no taking over the world, no matrix . Only going to help us, alex, with really complex decisions. Good. Thanks for coming out, man. Thanks. [applause] [inaudible conversations] ground rules over there. Man, this room is filling up. Youre here to here the investor talk, arent you . Here hear the investor talk. How many entrepreneurs are in the room . So all of you. Listen up then. This is time that even like shut off your laptops and just learn something, because these folks are the ones that are going to give you money. Please welcome to the stage aileen lee, jeremy liew and dana sid t and settle and connie loizos. Big round of applause. Pleasure. Ooh, i like your shoes. All right. Thank you. Well, im so glad to have great panel here. Guys, im going to just roll right boo things and ask you a hypothetical right into things and ask you a hypothetical. Say i am this super smart intrup neuro. Ive entrepreneur. I live in austin, and everyone keeps telling me i have to move to San Francisco. Is that true . Dana . Not if youre raising money from greycroft. Why is that . [laughter] you know, i think 82 percent of our investments have actually been outside of ill con valley. Silicon valley. So were finding opportunities everywhere, and i think there are great growth pockets in austin, in new york, in l. A. , in seattle, in chicago. Sort of all over the country and all over the world. Yeah. I think it depends. I mean, if you are based many austin or new york or boston or l. A. And youve got a network where youve got a recruiting advantage in that environment, then it might make sense to stay there. If you feel like theres some expertise that doesnt exist in the market that youre in, i do think that the bay area is, i mean, kind of quantitatively the best place to found companies. Isnt it getting too expensive though . I organized the dinner last week, and your fellow investor had noted that being based in San Francisco basically cuts the runway in half. If you live in oakland, in san mateo, you can get so much more mileage out of your fundraise. Does that change things . I mean i think he said, like, as long as you dont spend all your money on kind bars, youre okay. Right. [laughter] jeremy . You know, the thing is i really do think you can start a company anywhere. The challenge is scaling that company to the next level. So you can find great individual contributors, you can find great developers, you can find great designers, you can find great product people in any country, in any city, in any town in the world. But then once you start to scale, lets say its working and you start to hit a hundred people on the team, and you want to have some very plevel folks who are actually not in the weeds doing the work, maybe not even one up, but maybe two up from the front line. Finding the people who have the experience, who have done that before gets more difficult the further you are from the bay area. It doesnt have to be, it doesnt matter whether its San Francisco or oakland or, you know, the peninsula or even, you know, north bay. There is a set of experienced especially on the consumer side. Even more so, frankly yeah, true. That only exists here. And there are certain cities in the world where you can, and new york, l. A. , increasingly in europe you are starting to see some of that Second Generation experience. But if youre in tuscaloosa, youre going to have a tough time finding that locally. Right. And more importantly, youre going to have a tough time attracting someone who has that experience to move there. Now, if youre in a city that is a global city where people are willing to move, and i think l. A. Counts, i think new york counts, austin, i think, is on the edge. It has some livability stuff that makes it very attractive to people. But it doesnt have the same ecosystem for what people do next. And i think thats something people care about. So really thats the key question. If you cant attract people who are willing to move to your city, then you do have to consider moving your headquarters to a place where those people already are. Right. Yeah, but i think aileen made a key point, sort of where your network is and what youre focused on. I would argue that l. A. , for example, probably has the most talented people in the Media Business of anywhere in the world. Its really been, you know, sort of the center and sort of the central ecosystem, and they understand the dynamics of that market better than anywhere. So i think if youre starting, you know, a Digital Media company in San Francisco, youd be recuting executives from recruiting executives from l. A. It depends on the industry, and like any great entrepreneur, youve got to be a pied piper, and youve got to be able to recruit people anywhere whether youre in reykjavik or whether youre in chicago. And, you know, weve seen Great Companies in both of those places. And i think that thats a huge part of it, being able to paint a vision and tell a story that attracts people to, you know, anywhere. Yep. What about new sectors and technologies . Maybe ill segway into asking what youre looking at that you werent a couple of years ago. Like, i dont know if theres a Virtual Reality, you know, place where you have to have a Virtual Reality company or a. I. Company, but youve john. Yeah, john. We just invested, Just Announced this morning we in disney coled an investment in the Virtual Reality Company Based in palo alto along with cmc which is a Chinese Investment platform. Interestingly, its the combination of both the technology and innovation you find here and the specific expertise on related to content and distribution in media that you find in disney, in ourselves we own caa, our partners at caa. And the other investments weve made through that evolution media platform that really drives that kind of investment. So its a combination of the l. A. shanghai media landscape married to the Technology Innovation here. And most of the most interesting Technology Innovations happening here, the Product Design and all of that where the interesting channels, Distribution Channels and innovation on business molds is happening elsewhere models is happening elsewhere. So its the combination of both. Aileen, have you found anything in the last couple of years that you maybe wouldnt have imagined funding a couple of years ago . I think were looking at a lot of things that two or three years ago we werent looking at. Obviously, like the food category, i think no one was looking at three or four years ago, and now its a trillion dollar plus market, so it makes sense theres been a lot of innovation, and theres some exciting startups. Looking at drones, for us, for example, weve been starting to look at some more Health Care Related things because when it, you know, when it takes a lot of capital, its probably not a great fit for us as a seed investor. But when things are now becoming increasingly consumerrized both on the enterprise and the consumer space, then i think it can make more sense for us as a seed investment. So thats been fun but also challenging to look at all these new things we havent looked at before like vr. Ive been hearing a lot more about health care and core signs. How long does it sciences. How long does it take you to get up to speed on a new sector . It just seems so afield from anything that a lot of vcs have been doing in recent years. Dances seen tremendous growth on the back of this wave of adoption by messaging and social media. I couldnt tell you we have this thesis that it would be a big driver and that this was the right time because like none of that made sense. At least since the early 90s. Why now . So the point is like we did need to have why we see this inflection points are now we need to recognize it, see who the leaders were and then to suspend judgment and say thats not silly come its actually a meaningful thing. Thats what i think some of the context matching being able to say this fits into a lens of selfexpression that has a true factor, email signature file through, you know, and the buddy icons and myspace profile pages and like a concert start to see that kind of connection. Thats where having the since thats where things are going, connects to where things have come from is aboard. Assessing heres what the big opportunities are going to be. We have a different model and to find that we work with investors like these as partners along with the entrepreneurs about the fact but we are really investing within industries or we have a strong history and track record. Health care is an example where we are probably the Health Care Industry in the world investing throughout services, biotechnology, a discovery companies, allied, farmer, et cetera. To get you a different perspective and allows us to be Strategic Partner to companies. We can to find ourselves not competing with venture firms or artistic investors but rather coming in where we think we can be a real partner. When we got involved with uber and airbnb, became the because the entrepreneur wanted a partner that was global, that the deep industry capabilities and a toolkit. Operationally that allowed us to help them steal. We are jumping into the boat with them and helping them strategically as opposed to being particularly wise at understand where things are going to unfold at the earliest age. I think a lot of people dont realize tbg growth was somewhat and early investor in airbnb and over. I think a lot of people start to think tbg as being one of these firms that drives valuations. Im going to back into that. What do we do . Its a problem. Are you writing bigger checks . Are you writing fewer checks . Eileen, how are you handling whats out of there . We are kind of at the beginning of the supply chain of Venture Capital because we do seated. For us this year we been slower to invest. Partially i think in our analysis that are years that have lots of great new ideas where the very kind of big swings going for very Large Industries that if you like maybe last year, there before were better years for big, new ideas. We havent seen as many this year. A lot of the ideas are looking for higher seed valuations. The entrepreneurs who are looking for what we feel like our somewhat rich valuations, they dont realize they could be setting himself up on the wrong trajectory for the rest of their life. We try to balance the fact that sometimes it doesnt, the valuation doesnt matter if youre on something big, whether its five or 15 you want to be involved but you dont want to set the company up for good because it starts out too expensive. This year seems like a great year for companies who are sort of a couple years ago to have follow on around. We have not been super active issue because we are looking for big ideas at the right valuation. Agreed. Theres just been i say a significant increase in number of funding but the valuations are still relatively constant. They have bumped up but theyre not crazy when you look at the series. Look from 2012 today, the premoney valuation to have essentially doubled. Thats just not healthy for the overall ecosystem and i think thats where you step back and look at average valuations, kind of 20 million in series b. Valuation of 40 million to look at average access going back for 30 years, 90 plus being a 100125 million. Dematha gets tough when you add in the risk. That is the real effect of the place and. So we think about that a lot. In the markets that we are investing more heavily, some geographies tend to have a little, a little more valuation discipline. Its just lower supply of capital. Are there any sectors that are better deals right now . Im wondering if people are interested in synthetic biology, relatively undiscovered. Weve invested, we continue to invest in Ecommerce Companies at the time was spent relatively out of favor. Our feeling is virtually never been a better time to start a new brand. If you sort of looking the market and you look at what millennials are essentially driving, a completely different brand message and an old bread cant change the past. Its not television and newspaper, and she cant spend in big volume on a lot of these other channels on instagram, facebook and those are even old know. I think theres never been a better time to start a new brand. Thats what were really excited about, Ecommerce Companies, the fifth great economics and a great Value Proposition and a great brand. We think there are great opportunities. Theres never been a better time to be an entrepreneur. For sure. I want to get a chance to talk, you and i talked earlier this year and we were talking about the fact that there are not ipos. You said you certified there was this private public confluence and thats not going to change. Theyre sort of a permanent shift. But at the same time i think everybody on this panel wants their companies to go public eventually. Have things changed in some permanent way, or are we like deluding ourselves that these companies linger in private thats a big question but youre talking about players, about 50 billion that is entered the market to invest that wasnt there before. So so far this your 7 billion of capital invested from historically public investors. 11 billion invested last year, all of which is allowing companies to raise capital at a scale that is again unprecedented. Which allows for a deferral, the ultimate public reckoning, if you will. It is precedent. There was a time when this happened before eric. Except even then if you look at 1999, 29 of all ipos doubled in value the first year, the first day of trading. 1 of ipos have done that this year. So 29 versus 1 . This isnt a public bubble today. To the extent theres a bubble in valuations, largely private which means that the caskets left out of the bubble is going to happen in a slowmotion way. Its not going to be some dramatic correction because its not a Public Market that has been participating. Does it ever happen . Do we see public investors participate . Of course. At some point liquidity as necessary. You will see a correction which what what we have seen, ipos have happened in corrected values relative to the private financing. Is a correction sort of hitting a wall . Its a funny thing. If you are a private company and you see this sort of correction happening, its much worse for founders and employees for the correction to happen as a private company than as a public company. You have preferences sitting on top of you from all of these investors who put in all of this money youre looking to get made whole before any proceeds go to employees and founders. If your public actually the math changes a little bit. All the preferences go away. Everyone has the same class of stock and so if there are fluctuations, everybody shares into an equally. Unlike, you know, unlike in the private markets where folks with preferences and folks who might feel like they were overpaid are going to be very unwilling to have those preferences messed with in the future if its required before more capital at a lower valuation. And deny you actually have better access to Additional Capital as a public company, and you have employees and founders in a more beneficial situation if there is some sort of correction but its interesting that theres been this reticence to go public for companies were able to do so spent im sorry, jeremy. A little trouble hearing you. Lets talk to the weve got to get them up on the panel. I know. Where is that guy . I was at a talk last week where bill gurley so talked about a few Companies Whose Unit Economics he didnt understand. He didnt necessarily say they were doomed. Maybe he implied it, i dont know, im just curious if, theres one in 50 companies doubt that about a more than a billion dollars. Are there any names that you can maybe offer . Again, a company that you dont know what its fate will be but you dont associate understand its Unit Economics. Im not going to name an a because that would be indiscre indiscreet. The interesting exercise we have is we have to try to make investments were 100 of investments work given the scale attacks we are writing. We are not playing alpha the way the 100 million public fund plays and ultimately its a basket of investments. If you look back at 1992 and you made 100 investments and within the tech sector, you would end up making about a 20 return on your capital by the time you exit 10 years later in 2002. But it would highly concentrate and microsoft ended the. If you could invest across a basket of unicorns, as aileen contended in 2013, you would do just fine because youre going to have a few of these companies that you were merely well but there will be a lot of roadkill and a lot of companies that dont survive. For exactly bills logic, their Unit Economics dont work. In rising markets people to ask the hard questions about cash flow generation, Unit Economics, balance sheet, leverage of skill, et cetera. They focus on revenue growth. Weve all learned this lesson before. Ultimately, they have to get a place where they generate cash, and ultimately valuations are a function of cash flow. Lets hope they work it out. I have about 20 questions but we have to get going. Thank you so much. Love talking with all of you. [applause] and were going to go to lunch. Just kidding. Why ar are you guys all here . What are you excited about . There so many people here. I dont really need to do this parpart of my job unemployed and im going to relish it. Please welcome to the stage snoop dogg and ted chung. [applause] whats up . We go way back. Wherever, well, not wherever you like to give going to sit right in the middle actually. Ill tell you where to sit. You are here. Yes, sir. Live and in the flash. Let me just breathe for a second. Youve been investing for a while now. Why . First of all investing that be fun, something i feel that is different and amazing. You know, because thats what i like to associate myself with. Subversive for most thats what im looking for when i do invest. Okay. And in terms of like what you learned from your investments, like where you investing with some plan in mind what were you seeking something out . In the beginning it was just more, you know, investing on creativity but then he became more business. And it was the things that apply, for example, you know, the cannabis industry. So i would always look and see things in that field and see that there was things missing. I was like, the best thing i could do was to develop my own system to see if i could get in were i fit in on outside. Because there has been rumors you have been building something, and i think you may want to tell us a little bit about that . Ive been building on something called merry jane. I can show you better than i can tell you we brought some bigger to try to help explain what it is. If you dont mind we would like to show you a little clip. Its a world mainstream cannabis. It has modernize how we interact and communicate with us to move. Hundreds of millions all around the world use cannabis and even more its on a global scale. In early 2015 cannabis was named the Fastest Growing industry in the united states, set to reach annual 11 billion a year by the year 2019. Every cultural obsession requires a place for lifestyles to unite. Via in sport or fashion, Rolling Stone is music and today merry jane, cannabis. Merry jane canadas 2. 0. Popculture Business Politics Health and a new generation to normalize sophisticated cannabis culture for all. Maryjane is tapping into the Global Expansion of cannabis. Culture, news, food video. Maryjane offer something for everyone at the center of cannabis lifestyle. In addition to content, merry jane offers the essential tools for the new frontier candidates business bringing together consumers and businesses in a streamlined fashion online. That good news is that the revolution way to discover all products for a new era of cannabis consumption. Its for dispensary, new locations to buy. Merry jane represents a new reality of cannabis as part of our daily lives. Cannabis culture is reinventing the cultural paradigm and merry jane is at the helm of the move. [applause] a whole new world. So what investments have made in the cannabis industry at what kind of partnerships are we going to see, or Network Effect kind of are we going to see . I think that this is probably the priority on everything were doing right now in the Cannabis Space but obviously snoop has been at the helm of this movement for his whole career globally, and the time is just right. We saw as the snoop mentioned a huge arbitrage with the way that the conversation around cannabis and utilities that are provided for the community, and for those are touched by cannabis and just want to learn more about it, it just wasnt available and it wasnt done authentically. It wasnt driven by i think a certain sophisticated standard of content which is really our expertise, along with some of the partners that we have been the space like your good buddy thats joining us in the content space spent seth rogen is done with the team so he will provide us with content. So you can look for some great content from mr. Logan on the merry jane site. We sort of breadcrumb anticelibate on the vmas when miley cyrus is part of the sport group of helping brandon merry jane during one of the skits. So its just sort of gathering the top tier influencers, content creators in this space and sharing the normalized, modern communication around cannabis. This might sound like an obvious question i maybe even a dumb question, but snoop, why do you like cannabis so much . Like, what is it . I mean come its been such a huge part of your brain. I would just be interested to hear, like why . I should take you to my green room. Im fine with that, maybe after this. For one, i enjoy it for medical reasons. [laughter] trouble sleeping . I mean, its come every time ive always been around i see beautiful things happen. Icing people, you know, manifest love, peace and happiness and harmony. Ive always been one come and advocate for nl i consider more of a business come is more educational and more technical, with a whole world in general, it gives off more than just me just fine to smoke in the giving you a whole explanation of what it is. If you want to learn about it, gets an insight about we will provide all the information. We will be like the encyclopedia to the cannabis world. Cool. Well, what kind of content can we expect to see books understood is going to be a Large Network of not only celebrities but other editorial burgers and videographers, but what exactly can we expect from this kind of video content . It really is a diverse range. Youre talking about cultural content with regards to technology, food. We have a cooking show and a bunch of original series coming out, and to kind of expense for the what snoop is saying, the great thing about the cannabis industry beyond its medical benefits and the social benefits, the job creation, we are talking about a business thats going to be in the 19 billion range domestically in a few years. A billion dollars in flowers sold in colorado last year alone. 30 went to the state and 10 went to board of education. Somewhere else in places like the heartland in america are you going to see a cultural and economic revolution like with cannabis . Thats a beautiful thing about what we are doing. Its a movement and integration into what popculture is and what real business is in america today. But as far as series, we do have one thing to show real quick. One of the series is called the flowered, and when the opportunity to meet with captain mike owens and Sergeant Matt from a charity called that helps veterans reintegrate into the workforce, and our series, deflowered, is very cool one on one interview series where the person gets to enjoy cannabis and share about any Life Experience that theyve had. So if we can roll that real quick and show everyone. I might, former marine captain. I run a nonprofit. By matt, former marine infantry sergeant. I can tell you the first time that i pretty much discovered alternative medicine, being in the military, being and, just to operate. Coming home and operating as you are, that white noise is deafening. I had a friend that transition out of the military and didnt properly transition. Went through a lot of turmoil, went down the path of least resistance and went to the veterans administration. Kind of did everything he was told and said heres whats been given to you, here you go. What i saw was a diabolical downward spiral of opiates, barbiturates, narcotics, you name it. I saw that. It wasnt a route i wanted to take and they knew that was something am and i went down almost the same pathway. I was taking a significant amount of medicine to help with stress, anxiety, sleeping. I couldnt function on a daily basis. I lost 30 pounds. I wasnt at the gym, wasnt eating healthy. Arrested. I knew i had changed what i was doing because it was going to be around for too much longer if i kept doing that. A lot of guys get out, we have to research on our own. I went on a hippie retreat down at ocean beach. It led me to this awakening and the kind of things i saw teach you how medical cannabis coupled with massage therapy, yoga, healing, all that combined to treat stress, treat anxiety. It is extremely beneficial. For me, additional marijuana alleviates taking so much medicine that veterans are on these days, its overwhelming. Its something veterans in need to consider. Medical cannabis is the only, i wouldnt say drug because its not a drug. Is the only medication ive experienced it has beneficial results. Did you feel a sense of empowerment on your own been able to take control of your own Mental Health . That america. I should be able to do that. Wow. Thats pretty awesome. Congrats on that. But i do want to move to a slightly lighter note. A wise man once said, got my mind on my money, my money on my mind. Media sites dont traditionally make a ton of money. Whats the plan in terms of Business Model for merry jane . Is it just standard advertising sponsored content or is there more to be expected . Com i make him advertising is a part of the model, content integration, of course. A huge opportunity here beyond and most importantly sharing and open up the door to the real discussion, and there will be serious content india such as deflowered. We will have lighter content and humor content. There will be music video exclusive. Partners like seth rogen are helping to put that together. The most important thing though is that the business itself, which is in the multibillions, does not have a definite destination to share. The brands dont have a place to share what they want to communicate, and the Retail Locations really dont have a place that has repeat usage where they can accurately provide information and medical staff and technical staff select a product that they offer. So merry jane will definitely be at the helm of that, will be launched in october. In terms of like legalization, like the industry and the country is changing pretty rapidly, you guys are behind medical Marijuana Legalization i would assume. I stand very high on legalization marijuana around america because its necessary. You know, its really doing a good thing. You look at all the medical studies and the people of saving the lives, you know, the kids its helping with the seizures. Its just doing a lot of great things out there. I stand high on it and i just want to see it to legalize around the whole globe. Even though the cost is going up for the enduser . Must return to look at colorado. They are making so much money and putting it back into the schools and came into. Theres jobs. The crime rate is dropping. Digital helping of the situation that we need help with right now which is just staying alive and staying strong as a community. Im looking at what it stood for colorado. It was doing government whole globe what kind of world would we be living in . You have a channel on youtube, and thats been very, very successful. Youve been kind of a media mogul for a long time with the launch of merry jane, like what have you learned from being so embedded in the social media space and a special on youtube, kind of a homegrown format content thats going to be brought over to merry jane . Just a comedic asian, the direct connect to the people. Like to be able to get feedback right now. Thathe people tell me i talked t it is they want, what they dont like and what to do it. Just to be will have a hotline, an information hotline with the people without it being a third party or a wall in the way. Thats the brilliance of the social Media Network analogies between myself and the people that i call my family. I dont even call them fans because we so close and theyre such a direct connect. In terms of getting user opposition for merry jane, you werent huge brand, but how our delight expect to get the word out . Do you think it will spread of viral leave the same way it doesnt youtube . We are going to do what we do. Were going to connect with the thai people who know what they do. We are providing an issue with something thats avoid right now. We are the information hotline, the cannabis. We are whats missing. We are what it is to be in that line because it is for me. It is for me, the grand professor, the face of it, again, the originator. Do you dig . I dig. I did it, snoop. By the way, you look at any other competitive space, the rp companies out there that have attempted to try to enter into the marketplace, and their download apps total and page views total are really numbers that were going to crush within the first six months. Even today if you look at, you can go to merry jane. Com. We are inviting about 420 people a day into our beta site. You can sign up there at merry jane. Com and today just off of this news alone we have tens of thousands of signups. I think the interest level and the demand is there. Its just about someone coming to the forefront, like snoop, like her other partners, and providing the site and the media platform that can take cannabis to the next level. Snooper, youve been smoking for ever, feels like, and you know, your brand is tied up in marijuana. It seems like with the merry jane, you know, the whole idea is the mainstream version of cannabis, right . Whether its cooking or music or whatever it may be, but its tied up in other things, not just a standalone kind of product. Given your history with it and the fact that you seem to be prepping for the future, what does the future look like in five, 10 years with regards to canadas . It gives me proud honored to say that merry jane will be the door to bring people out of the closet. Because theyre so many people in the closet right now and do what we do, and they come into, they really want to come out. China we are going to get an opportunity to come out in some form or fashion what its do the cooking show are watching this are just being down with the site in general. I just feel like we are a better world if anybody comes out of the closet and just admits they like to smoke. Just admit it spent just admit it, baby. My name is snoop dogg, and im a stoner stuck a round of applause for those who are a part of our community. Who here enjoys smoking marijuana . Be proud. There are so many yet to be out of the cause of the its okay, its okay. Were going to make a way to get you all out of that closet. Share your thoughts and ideas on merry jane. Snoop, like you have conquered a number of articles. Youve built an empire. Why not just like set up on an island and like to just soak like a nice Treasure Chest full of green and just like have a life with your friends . Why do anything, right . This is challenging for me. First of all its been an industry that is the with a bunch of geniuses like yourself, so ive always felt like i was a genius. So ive always wanted to challenge myself and im so for immigrant out to where i feel like this is the right opportunity for me and my team to monopolize off of something ive been pushing for so long. And not only make money off of it but make people understand what it is and why i love so much i want to love so much and just to make it a global interest around the World International 24 7. Thats what is all about. Is the challenge of getting up and try to conquer something want to get to see if im still great at what i do. Had, you said the other day when we were chatting that the merry jane will be influential not just to people who smoke or people who consume cannabis, but to everyone, that it touches everyones lives. That maybe things a little bit. My mom doesnt have any, she does have any interaction with cannabis ever. Right . How does it affect her life . But she might want to ask you about it, right . As long as you inspired communication in any vertical, then maybe at some point you and your mother can have a conversation and if she wants to find out more about it, merry jane is a Perfect Place to be at to ensur enjoy the content thats better while learning about it. Every portion of the site, with its original content, then its flexible and connects over to the product database which is full breadth. Is not only flowered but what we call ms. Marijuana products. Whether youre a smoker or not and you like to try and edible or oil we really provide you witwith a comfortable victory a. Its interesting ask about your mother. If she would be interested. I think the other part we realized was that all the other sites or apps that do exist, they are designed from a standpoint that may be even a little standoffish for a female fan or a consumer. And with that in mind snoop and i started out the entire kind of initial design plan for the site and to look into fuel. The whole design team is one of your yesterday i was Walking Around msi bunch of ladies who were involved in whats the name of the program . Its billed by girls. We think that school. This is about including everyone who might be left out of the committee patient or not thought of especially the female audience and consumers in the Cannabis Committee because they are growing at the highest rate. And to involve everyone into the discussion so that we can really kind of elevated the presentation and do something cannabis to point out that no ones ever done before. We are out of time for my last question, snoop, is, snoop lion, or snoop dogg, what are they going with . Im going with them just going to go with snoop right now, know what im saying . Were going to leave the last name out until if it is taxing out. Spent you are like moses in dont worry about the name. Where, to get you. Merry jane launches in october, correct . Yes. We are letting people into the beta site. Enjoy, come sign up. 420 people into the beta site. You know the address of this location is 420. We plan to that spent we planned about. We had them in the mind from the beginning. Relaunch in october, yes. Come check it out. We just want to make the experience of an better so we are doing that until launch day. It will be Available Online and on mobile. Awesome. You guys, a huge round of applause for ted and snoop. [applause] spent outcomes you in a minute, okay . Ill come and see you in a minute, okay . Im feeling good. You guys feeling good . Absolute silence. You guys were laughing at everything snoop said. All right, whatever. Our next guest was with us that Techcrunch Disrupt europe, the first one we did back then. He was working on russian word that i can say. Now its telegram. Please welcome to the stage pavel durov and our moderator, mike butcher. Have a seat here. Hello. My name is mike butcher an editor at large for techcrunch based out of london. Pavel durov created telegram after creating the day, effectively aside for russia. But now youve got onto great telegram which is to some extent reminds me the health of whats out, really, and yet at the same stupid youve got over 60 million users. What are you sending, about 5 billion messages a day . Last month 10 billion messages delivered daily. Right now i checked earlier today its over 12, 12 billion messages delivered daily. Mac. Thats breaking news to others today. 12 million messages a day. I think a lot of people would like to ask you what is the point of telegram in a world where there is so many other messaging platforms . Its a good question, but to put it simply, it doesnt matter how many other messaging apps are out there to all of them suck, right . Spent which ones suck for you . For me after most of my team, whats at suck most speak with you say that sox . Absolutely. I cant elaborate on that. Please do. Look. We are living in 2015. We are supposed to have flying cars and everything right now spent jet packs spent absolutely. But if you have whatsapp on your phone and your battery is low and your phone goes dead suddenly you cant get access to messages. Its over. Its not close to vice but it doesnt have the sync. You cant send a document with big media. There are lots of limitations in group chats, in your communication. Its not private or im not sure i was big fan of whatsapp about three or two years ago and im not sure i am now spent you mention privacy. Privacy. You have made a claim about telegram having the ability to be injured and encrypted. I mean, end to end spent we are living in a postsnowden world, but what does it do for the business in a sense, wheres the business proposition and encryption . Well look, i had a friend, back then when i was living in russia i had a friend and she told me that she was presented with a printout of her whatsapp messages in the police department. So they basically intercepted and decrypted her messages. She told me they try to use it as too blackmailer. So purpose is not something that is relevant only to Business Users but businesses most effective because they can be blackmailed, which people could be blackmailed and their information is more available. It could be compromised. You are saying he retain users because they trust you because the messages cannot be intercepted . Is one of the things that makes it different. There are many more. You are gradually rolling out a box platform. You want to describe that to us and why that might actually end up becoming a significant part of what telegram is . We launched a box platform i think a Third Party Developer. Yes, june of thi this year. Any Third Party Developer can create a bot, pseudouser that you can communicate with on telegram but on the other end of the medications theres a machine that is even with all the messages on that side. And actually a lot of services have appeared using that paradigm of communication, dating, education, productivity, lots of stuff. And i learned only yesterday that one of the most successful parts of the platform got acquisition attempt, eight digit acquisition attempt. Its only like three months old, already eight digit. So you are saying somewhere to acquire one of the box speakers yes. The company that created this bot. So in other words, your cingular launched startups launched on telegram that might be speeded thats true. Whats been happening. I think the news will break out later this fall. In a sense a bot platform is almost like an app for telegram . Thats true. And you think eventually Third Party Developers may make money in this white . Absolutely. We are thinking about launching a payment api for all the bot developers, Third Party Developers could accept the money easily from the users and telegram. Is it something you might extent in terms of advertising, that pots themselves may become marketing channels for brands . Thats already happening actually. Some of the bots are being used for sin as unfortunate or im not big fan of ads of these are third party bots and users opted in receiving messages on this bot. So its already happening. I hear there is a bot, a Third Party Audit agency, ad agency dealing with this. Really . So that might become a real sort of an ecosystem effectively you are developing spent absolutely. That spurred early stage, only three months old but what were saying we are very happy about it. One of the things that is that you clearly made some compromise on the platform. For instance, theres been reports that youve met with the iranian government to allow the fact that you shutting down some bots for instance, on telegram inside iran. Can you confirm that for us or not . Well, i can confirm the first part but i do confirm that we do block bots in markets where is prohibited. What happens in that environment is that websites which are blocked started to reappear in the form of bots on telegram platforms. As a results page this is happening in iran speak with iran, iran, saudi arabia, countries like the. As result we got all the users we didnt want to we are not big fans of porn. We dont want to telegram to proceed as ports we do block this kind of stuff. In this sense come to make a big play about being a libertarian and a freedom of speech and yet on the other side you are cutting off access at some level but is there any sort of secret behind these negotiations with some of these governments of . No. So, we do it purely for business decisions. We dont want come in some markets we dont want to be perceived as something that has to do with porn. This is actually the same reasoning behind apples decision to block porn content on apple store or instagrams decision to block porn or facebook or youtube or google. You can go on. We think this is the right thing to do. But if we stick about privacy and freedom of speech, we have very added that principles about it. Over two years of our existence we havent disclosed a single white of data to third parties, including governments. And it was not easy. And as for freedom of speech, like i said if there is a bot that has to do with criticizing governments or with some opposition activity, we would never block such a bot. You famously created a conduct and rushed which is kind of a facebook of russia. But you controversially, effectively told to get out of that by forces aligned with the government. Is not the case, right . Thats roughly true. Roughly two . Which part is true in which isnt . Well, mostly in the sense that its true and it is rough. But yeah, we found ourselves there were some incredible stories around that time that you are effectively framed for a car accident, that you were put under political pressure. Thats nothing out of the ordinary in russia, believe me. If you get to the country, you get used to it. It happened with other businessmen. I am no different from the rest of them. Youve now become a resident, youve roamed the world dressed in black big you live in a magic digital lifestyle. How are you going to manage to continue throughout the company in this way moving around the planet, trying to evade authorities . Do you feel like you are a target . Not so much, no. Although sometimes i feel excessive attention. For example, here in the united states. When i go in and out of the country, but well, thats a good question. Because right now we are a very small team. We can afford to rent houses, shortterm, all over the world. We spend the summer in finland. Great spring in paris. Just rented a house in philly, got your came together and continued because it was great, absolutely. Some of the guys they stay at the home. We outsource some of the design and Customer Support to Eastern Europe and southern europe. But other than that we are a small team of 15. We like to travel and we want to use this opportunity to see mo more. You havent raised money for telegram, have you . No. You took reportedly 300 billion from the sale of your share, correct . I cant confirm the exact number but i was very lucky visit 300 million or lower . I will say this but i was very lucky to get out before the market crashed but it was just before the ukrainian events broke out, and he was extremely fortunate. That would have effected the value. Yes. Because i do before the. And that after these events broke out in the local currency went down, and right now the value of the company isil is probably three or four times lower than it used to be. Do you think facebook will just eventually take over in russia speak with im not sure about face book. Im not a big believer in facebook. They are struggling to remain relevant because the small mobile apps started to attract users. Ibeam, instagram, whatsapp, fiber, snapchat, apps like that spirit you think it is ever likely to take outside investments . Any Board Meeting you had with an outside investor might, you know, might be in shambles because you move around the planet all the time. Time. We really like to be independent at this point. We think theres more than market shares and revenue streams. We like the opportunity i mean, do you have enough money to last for a while . Yes, definitely. And you can just continue to build u out a platform as you s . We will continue to do what we think is right. What about, i mean, in a way is this sort of your revenge on people, the secure messaging on putin. Spent im not sure im not focused on revenge too much. Its ironic that a lot of people, could i profile the people in russia, use of telegram. Im happy about that, but russia is like number seven market for us in terms of its size within the telegram ecosystem. Its not particularly important for us whether, for example, we are big in russia or we are small and russia were blocked in russia. Weve already been there. Weve already made a company which owns russia market. Thats not a new challenge. Can you ever go back to russia . I can. I was in russia this spring for my moms birthday. And well, i can go in and out of the country. Nobody seems to care these days because obviously they have other things to be worried about. But so you are not so high profile todays because no. Not anymore. Because i sold the rights of social network in russia. They shouldnt be worried about me at this point. But i try to spend as a few time as i can come as fulltime as i can in russia, just because i want to see other places. You like to travel. Does it concern you that i this is using telegram . They do. Does that concern you . Thats a good question. Do you sleep well at night knowing terrorists usurer platform speak with you know, thats a very good question, but i think that privacy, ultimately, and our right for privacy is more important than our fear of bad things happening, like terrorists. If you look at isis, yet theres a war going on in the middle east it is a series of tragic events. But ultimately the isis will always find a way to communicate within themselves, and if any means of communication turns out to be not secure for them, they will switch to another one. So i dont think we are actually taking part in this activities. I dont think we should be guilty or feel guilty about it. I still think were doing the right thing, protecting our users privacy. You think if they were not using telegram they would use Something Else . Absolutely. There is opensource apps that you can build, use encryption. You can install them and, you know, its all available. So the technology is already there and it up to us how we would use it. The messaging platform kick is raised 50 million from 10 cents in order to build out more of an asian style messaging platform where you can order a car or purchase goods. You can order pizza on 10 cents or Something Like that. Is the kind of the way you want to go with the telegram, it becomes a messaging platform not just for messaging but for other services as well . Yes and no. In order to go this eastern model, you have to have high penetration into the market. You have to be socially relevant for everybody. Its not always the case with apps like telegram or check, that you mention. Kicked. Although we are pretty big in some of the markets and i think we are number one in a couple of them, we dont have the dominance that we chat in china. And so yes, we will experiment with the Payment System with bots and Third Party Applications to build on top of telegram, but we dont see ourselves necessarily as going that way in the near future. Is that theyre the the danger you try to become an also ran . That company that sure is useful, people can use it for messaging, but theres not very much more to it than that. The interesting thing that we noticed is that people who sold telegram and massive numbers last year and this year and sold it just as a backup installed as a backup messaging, used it as their primary messaging application. Thats why we see this huge increase in user activity. We used a 1 billion messages delivered daily. Now we are over 12. Thats an indicator that people really love the telegram. They switch more and more of their activities there. Were often than not they start their day from their messaging app. Get their message apps is telegram they will start the day from telegram. I think that we should be really happy about this. Messaging is probably the biggest thing going on social media in this decade. We are definitely in the right place and time. To over 60 million users. What are the next big points that you want to get to, 100 million . When will you be at 100 million . We are getting there, but you know, something that is a bit discouraging about getting 60 or 100 million active users is that you always get compared an immediate with the older messaging apps. In the media covering this, telegram stats would say look, okay, they have 60, 70, 100 million but this is still a far cry compared to whatsapp, eight or 900 million. They dont take into account that we are actually two years old and whatsapp is over six years old. But if you start comparing telegram with other companies that appeared two years ago, these are pretty huge numbers, right . So we are not big fans of announcing numbers at this point. We will look with interest on your next moment of announcements, and thank you very much, pavel durov. Thank you, mike. [applause] our nextel focus on something that is hugely important, the health sector. Beth seidenberg, our investments that k. Pcb. Please welcome to the stage at seidenberg and our moderator, sarah buhr. Youre a medical doctor trained immunologist. You been involved in the pharmaceutical industry and youve been a vc for the last 10 years. How do you make that leap from coming to come into a common thing to be someone with a medical background that go into vc. When i started in medicine i didnt know what a Venture Capitalist was. You know, i had a long way to go but as i progressed in my career and started to develop new therapies are all out of diseases that are not in much better shape, i ended up at amgen, realize that i was on the board, actually the Board Members were still the Venture Capitalist undistorted to teach me about what they did, introduced me to brook byers and the rest is history. I love Building Companies and helping entrepreneurs. You seem like youre here in d. C. At a perfect time. Theres a lot of interest in synthetic biology. What are you seeing i needed you with this everyday but what are you seeing in terms of interest from possible cult investors in the space . Yeah, you know, in the biotech world its been a very specialized space to invest in, and are a lot of people who are traditional while tech investors, people who come out of banking or business development, som some with ph. D science degrees. We are now seeing somebody tech firms investing in traditional biotech as well. I think there was an announcement a week ago with peter thiel invest in a Company Called stimson tricks. Theres a tremendous opportunity to really change the way diseases are treated, using technology. So its easier to relate to now than it was before when it seemed like a black box. Youre taft starting to see com, but its really behind the times, so its really a green field now. Why do you think now theres such an interest in this space of a little bit more wild science . Like, for instance, sniffing out the dna of yeast and inserting whatever else you want to make anything from pharmaceutical drugs to opiates to, i mean, spider silk . Why do you think now is the time that this is happening . Yeah. Well, its really about tools. So in science and biology its always been about what tools do you have to understand either at a Cellular Level or individual molecule level whats going on. And when the human genome was sequenced, we all of a sudden understood thousands of diseases that we didnt have understanding of before. Now weve taken it to the next level. We actually can edit the genome, and we can take cells and insert different parts of genes that allow them to behave differently. Were doing that in areas, for example, in cancer with something called or car t cells. So youre taking a t cell from a patient with cancer, engineering it with a new receptor that hones right to where that cancer is, and essentially, were curing patients with diseases like acute limb to sittic leukemia. Its in my dreams as a physician to have such an impact on disease. I actually wasnt sure id see this in my lifetime. Now im just imagining what else were going to see. And that could actually mean that we dont have to have patients go through chemoup and lose their hair and yes. Some of these almost barbaric ways we have of getting rid of cancer. Yeah. The way weve treated cancer for decades is really a blunt instrument, you know . Its a giant hammer, and you just try your best to kill the disease. But youre killing all the cells youre killing everything, yeah. And now its very targeted, you know . It feels like a tumor type at a time, and were also learning that its not only the origin of where the tumor came from, but its the genetic profile of that cancer thats allowing us to engineer very specific drugs or cells as therapies to treat these diseases. Its pretty remarkable. So a lot of that is, a lot of that that you focus on is maybe specific to certain pharmaceutical drugs or certain therapies that maybe doesnt affect everybody. What are you seeing in the space that has the power to change medicine overall . Well, its, so lets take it from two different levels. So if we look at therapeutics in general, theres one area that people are very interested in. I have no idea if its going to change medicine, but thats the microbiome. Its basically taking advantage of what we know lives in us, organisms, and how it affects health and disease. And there are projects that people are thinking about how do we use big day a and analytics big data and analytics to understand how it can impact disease. Its really early days, but it could be something thats very impactful. The other area is technology. If we think about how medicine is practiced today and how and its evolving very, very quickly to the future, where you actually get your health care, where you see a doctor is all changing. We used to think doctors office, hospitals, emergency rooms. Now we think our cell phones, our smartphones through telemedicine, we think retail, if you go into target or cvs, theres a Minute Clinic waiting there. We think about social engagement that allows us to understand diseases. So the entire way we think about even Consuming Health care is going to be different, and its changing rapidly. Thats really interesting because your smartphone essentially becomes the clinic for you, right . Yep. Theres gadgets you can hook into your smartphone and, you know, theres certain things out there, you pee on a stick, and you upload the picture to your smartphone, send it to your doctor and, oh, youre pregnant. [laughter] crazy ideas out there. But were still waiting for some fda approval. With some, it depends. So one of the companies that im really excited about that we invested in is called kinsa, and its basically the worlds smartest thermometer, the most common medical device used in our country, and its basically an appenabled technology that allows you to have on demand what you need at the moment youve fallen ill. And so for parents its transformative, because they can have an interaction with a beings immediately instead of running an interfashion with their physician immediately. They can have their drugs or supplies they need delivered to their home from their local cvs or rite aid pharmacy, and they can also understand whats going on in the community and do kind of crowd sourcing of what diseases. It changes the whole way we think about just, you know, dealing with illness in our community. One small example. And there are many, many more. So you see a lot of pitches. You see all these pitches before we even see them. What are some of the wilder pitches that you are starting to see out there . Were seeing a lot of things related to just using big data to discover things that im not sure is a big data problem whether its, you know, what drug will work for what disease. It would be mice to think that be you could nice to think that if you could just analyze a set of data, you could figure out. I dont know be thats wild, but to me it is because it goes away from the basic biology and assumes its all a computational problem. Weve talked about this before, health i. T. Yes. Its a huge problem that no one really seems to know how to fix, in my opinion. I keep getting pitches of patches to, you know, the problem, but not really a solution. Yeah. What needs to happen to really, truly have a health i. T. Solution integrated into every hospital, people truly communicating with their doctor on an ondemand basis throughout the whole country . Yeah. What needs to happen . Theres a lot that needs to happen. So first is building the pipes, right . So you have to have places for data to flow and have it be ubiquitous so the data can be interpreted. Right now its still this silos. The governments going to help with that, and theyre already doing that through the hightech act where theyre basically saying every hospital, every practitioner has to have an Electronic Medical record. So the first is just get the data out there. As soon as we do that, then and its ubiquitous and its not in silos then we can have access to it on our phones or on our computers and, you know, analytics up in the cloud. Thats how were going to see changes. Were seeing hundreds of pitches from traditional tech entrepreneurs who are completely unencumbered with the really old School Nature of health care, hospitals and Insurance Companies and providers offices. And they are basically just ignoring that in a good way and coming up with apps or with different technologies that you can wear or use that allows you to understand your health. And then, hopefully, have it communicated back to your physician. Thats so fascinating because youll have this opportunity maybe, probably in our lifetime, in a very few, short years where you have people communicating with their doctor about all sorts of Different Things in an instant yeah. Rather than waiting on bureaucratic hospitals to get back your results in weeks yeah. And determining that maybe this medicine will work. Well try it and see what happens. Meanwhile, you know, people are suffering. Well see something a little bit more instant. Yeah. I mean, lets use another example of a company again, its a kleiner investment, but were really excited about it. Its a Company Called lavongo health, and theyre tackling one of the most highestpriced diseases in our nation, diabetes. There are 30 Million People in this country with diabetes. Theyve developed something think about onstar for your health. They have, you have to measure your glucose multiple times a day if youre a diabetic. If you dont, you have terrible consequences; blindness, kidney disease, you could lose limbs. Its something that you want to take care of. Yet its a pain to do. So theyve developed a fullyintegrated system where the data from their glucose meter goes right up to the cloud instantly. They have diabetic nurses who basically can call you the moment your glucose is too high and too low and tell you and give you the information you need. So instead of having logs of information, its instant where youre immediately connected at the moment that you need it as opposed to, as you say, having to wait for an appointment, having to find out how am i doing. Its onstar, right . We have it in our cars, why shouldnt we have it for diseases. We hear about these moonshot ideas in Silicon Valley about were going to live forever, were going to cure cancer, were going to, you know, swallow a pill and be beautiful at all times. Whats your level of optimism whether or not were going to actually live forever in our lifetime . Oh, boy. Yeah. So i think live forever is a flawed concept because the human body is going to age over time. So people talk a lot about aging, and, you know, look at what google has done with art levinson and calico and the fellow from the the National Institute of health is now over at calico. The problem with the live forever concept is lets say we can do a better job with alzheimers or with diabetes or think cancer, and we can cure these things or make them chronic diseases. You still have your bones, your muscles, your heart, your Everything Else that is going to age. So i think were pretty far off from that. And then i always ask myself a perm question, do i really a personal question, do i really want to live forever . [laughter] that is the question, right . I dont know that i want to live forever, but maybe extend life a little bit or live comfortably. Thats the key, right . You want to be healthy, and you want to be active up until the moment you drop dead. [laughter] it happens to everybody. It does. At least right now. Of i dont know, we might defy, you know, mortality at some point, who knows . How close are we to finding the cure for cancer overall . Well, its not going to be a single cure. Were curing one cancer at a time, and were doing a really good job at that. And so i talked about some of the leukemias and diseases like melanoma, breast cancer, prostate cancer. I mean, weve made huge strides. I dont know if you cure it, but you can make these chronic decide cans where youre not going to die diseases where youre not going to die from the cancer. Kleiner tends to invest in, you know, more Behavioral Health or database or gadgets that hook up to the cloud. Its not these moonshot, live forever type ideas. Why is that . Well, i hope were doing both. Okay. [laughter] so, i mean, if we look at some of the companies that weve invested in, i mean, we are really, you know, in cases like, i dont know, pick companies, atara, we are trying the cure cancer in those companies. So, you know, its a step at a time, but there is absolutely the moonshot ideas. With Digital Health were basically trying to transform the entire way health care is administered. So that, you know, we can get our health care on smartphone and all the datas in the cloud, and were doing all sorts of investments that hopefully will allow us to do that. You mentioned some of your portfolio companies. Whats something that is currently not in your portfolio but is under the radar that we should Pay Attention to . Whats a company thats something that we should Pay Attention to . Oh. Well, i think, you know, talking about disrupting health care, i think the companies that are changing the whole Way Insurance is administered, so whether its oscar, clover health, there was a big press on that last week, these are companies that are basically taking the oldfashioned way of thinking that, you know, some executives are going to put together a plan thats going to be right more you, sarah, and right for beth. And thats not the case. You need technology, you need smart data analytics, we need population insight. These are companies that are going to transform a lot of what we think about as health care and who pays for it in the future. Yeah. I want to talk to you a little bit about alan powell, because its on everyones minds. Yeah. But i feel like everybody asks you that question. What i really want to know is what is the sentiment right now at kleiner about how long do we have to be the vc firm . Yeah. We do always get that question, and, you know, look, were happy its over, right . So the case is done. I think the way that wed love to look at it and were happy to talk about is that a lot of good came from this. Theres always good that comes from adverse i. Adversity. And if we think about how weve leveled and increased the awareness and the conversation around diversity by Large Tech Companies in the valley, in the nation, in our firm, its really been incredibly positive. Whats different at kleiner now after the ellen powell trial . Whats different . You know, i kleiner has had the best track record for hiring women. 30 of our gps are women. Weve been probably the most forwardleaning firm. Its a good reason why i joined a decade ago. So i dont know that were different at kleiner. Theres more awareness in general. And were really excited about the partners that were hiring. Were focused on a number of initiatives. For example, we have a fellows program, 30 of the class this year were women, next year, 2016, our goal is 50 will be women and underrepresented minorities. So were more focused on it, which is a really good thing for our country. Its great for business, its the right thing for society, and its great for our firm and for all these entrepreneur. Last question for you. What Health Tech Company do you perceive becoming a unicorn in the next five years . Gosh, there are, there are a few unicorns already, and oscar is one, zoc doc is a unicorn. I hope that p instead of unicorns we have Public Companies that are billion Dollar Companies. So were really excited about teledoc, for example, were excited about a number of our companies that are going to go public. So i want to shift the conversation from unicorns to i was going to use this for biotech, but its fine for Digital Health, to call them rainbows. You know, if you think about, yeah, theres a pot of gold at the end of it. Its not just sitting there [inaudible] its going mix. It actually hasley quiddity. Has liquidity. But there are companies that are going public that are going to be billion Dollar Companies in the Digital Health, and there are already in the biotech sector. Thank you so much, beth. Thank you, sarah. Appreciate it. [applause] this morning the Brookings Institution will host a discussion on the future of afghanistan by looking at the u. S. Role and ongoing effort ors more maintaining security efforts for maintaining security in the region. Thats live at 10 30 eastern on cspan. And former president bill clinton is in New Hampshire today campaigning for his wife hillary. One of his stops includes an event in the town of exeter. Well have it live at 5 15 p. M. Eastern on cspan. This month marks the second session of the 114th congress. The house is back for legislative work on tuesday. On the weeks agenda is a budget reconciliation bill approved by the senate that would defund planned parenthood and repeal parts of the health care law. The Senate Returns monday, january 11th. Their first order of business will be consideration of a u. S. Circuit Court Nomination for pennsylvania. That same week we also expect a procedural vote on a bill from kentucky senator rand paul that would require an audit of the federal reserve. As always, you can follow the house live on cspan, the senate live on cspan2