tv Studio 1.0 Bloomberg March 26, 2016 11:30am-12:01pm EDT
emily: welcome back to the best of "bloomberg west." i'm emily chang. turning to cyber security, it is one of the hottest startups disrupting the industry, pulling in hundreds of millions of funding. they're racking up $3.5 billion in valuation. this week, i spoke to cofounder orion hindawi, who took the reins of ceo from his father.
orion: i think we are doing what i have wanted to do for eight years. to build something we are proud of, ship it to customers, and have 99% of them renew. so, the really interesting thing about our business is a lot of people obsess about things like revenue, cash flow and i do, too, but what is important to me is that our customers love our product. every year, they are able to pull out technology they do not like and replace it with tanium. emily: you raised another $100 -- $300 million you have not touched, is that the case is among >> yes. why take new money if you do not need it? orion: i said a year ago that what was happening in the valley will not continue. that we were running in a profligate environment. a lot of people were spending money like they didn't know what to do with it. they were just wasting it. i thought there was going to be a real turn. we saw an opportunity to raise
money because we did not we could do it again for a long time and if you look at the market now, it is very likely people will not be raising money in york county evaluations they want for a long time. wem happy we break it so have the cushion to execute without having to worry about the dynamics of the market, or if there is a downturn in the economy emily: who gets left . behind? orion: people are being left behind already. emily: what companies? orion: in the security industry, there is point solution after point solution that is losing millions of dollars per year and they are desperately trying to raise money or be acquired. eyesight was just acquired by fire eye. sometimes the acquired are unsustainable and will be a target for acquisition. a lot of the security market does not deserve to exist. that will shake out soon. emily: in this age where there
are more cyberattacks than ever, are there a lot of companies and people in danger because their cyber security firms are not doing their job? orion: 100%. a lot of people are relying on a yeah. a lot of people are relying on a foundation that is crumbling. very quickly, they will have to take antivirus and firewalls, some of the endpoint capabilities they have and some of the companies they deal with, and upgrade them if they want to prevent the next attack. the reality is our attackers are stealing billions of dollars a and healthit cards care data. the are not going to stop. industry come up and great solutions our customers will , lose that ip and information and credit card data at an increasing clip. emily: apple versus the fbi, your take? orion: it is more complicated than people give it credit. i know in the valley, it is a very popular to say definitely that apple but the reality is , our society is based on the
idea that a warrant, when issued, should be followed. if we end up with a black box in everyone's pocket, law enforcement will have a harder time doing their job. conversely, if you break encryption and put backdoors into products, nothing ever stays secret. it is a difficult problem to solve. while everyone wants to say encryption is awesome, if you don't have law enforcement, the society breaks down. emily: should tech companies be able to create warrant-free spaces? should the government be able to look at this? orion: i think the government has a reasonable need to get to data to prevent the next attack. if we build systems that are so closed that it is impossible for them to do their jobs, i'm afraid we will all suffer. emily: you said an ipo is in your sites. it is only fair to employees. is that something we will see this year? orion: that is hard to answer. i don't know what will happen
with the market. i think people are realizing it is frozen. i have seen the ceos counting on going public that are terrified. they are losing money, but thought the market would make up for it. they are realizing that won't happen. we are in a luxurious position where we are making money. we can choose when to go so we aren't forced into an unfriendly market. i will say, i continue to believe our investors and employees, and even our customers deserve to have us go ipo. emily: you think they would like to see you become a public company. orion: i think they want to see we are running a tight ship. they want to know we will exist in five years. frankly, some companies that have gone public opinion price for it. when customers look at their financials, they realize they are non-substantial. we are very clear. emily: i caught up with the adobe ceo.
the company is in the midst of a multiyear effort to shift its product lineup from desktop to the cloud. adobe shares were higher after the latest report. sales and profits beat estimates for the first quarter. adobe boosted its forecast for the full year. i spoke with the ceo in las vegas, asking him how he looks at his business. shantanu: we had a strong quarter across the board. all three of our growth businesses -- the creative cloud, adobe marketing cloud, and adobe document cloud did well. creative, as you know, we successfully reimagined the creative process by moving the business to the cloud. in the marketing business as well, we had a strong quarter. i think what is driving it is every single business around the world is talking about the impact of digital and how they have to put the customer front and center. our products and technology
enabled them to make the transmit -- that transformation. we are seeing demand for digital, and that is boding well for adobe. emily: you are very close to completing the shift from subscription to license based sales. in what particular areas of the business using the most current strength? shantanu: i would say that we are through the heart of the transition. that is why we have talked about how the creative business will grow greater than 20% this year from the peak. the marketing cloud will grow at 20% this year. so, i think both of those businesses are certainly fueling their growth. thereative, it is all about mobile applications that are being created. of the video being consumed a mobile devices. on the marketing, it is about the platforming the core infrastructure to deal with the demands of digital. emily: longer-term, what of the
areas of competition that you are more worried about quest t? we have been talking about andy grove today. the day after his passing. his famous line, "only the paranoid survive." what are you paranoid about? shantanu: we're paranoid in terms of how technology will disrupt the entire industry. i think the good news for adobe is that we have always been a product company at our core and in our dna. as long as we continue to innovate -- we have transformed our businesses by focusing on the customer. so, when you are always looking for that next innovative startup , and with individuals who have a great idea, i think, you know, we have been containing -- continuing to innovate within the company, and will continue to do so. emily: you are in las vegas hosting a digital marketing conference, one of the lesser known areas of your business. it is not photoshop. it is not acrobat. why is marketing a big focus for adobe?
shantanu: we have always been about art. if you look at the impact of our products like photoshop, illustrator, indesign, and premier, there is not a piece of communication out there that did not have some use of adobe software. if you years ago, -- a few years ago we recognized the world was moving to re-platform its web infrastructure. every business had to put the customer's digital journey front and center. we recognized that if we have done with art with the science of marketing, that would he a -- that we thought that would be a unique opportunity. finance had been automated. hr had been automated. no one was targeting the chief revenue officer, the chief marketing officer with technology. we are on -- we are the undisputed leader in that
category right now. it is a business that continues to grow north of 20%. first toe were recognize this large, untapped opportunity that we think will be something like a $25 billion plus opportunity. emily: that was shantanu narayen speaking to me from las vegas. coming up, shopify extending its partnerships, even as reports say it may be a target, and acquisition target or a silicon power player. tobi lutke. from then, we dive into the world of space startups. ♪ emily: reports this week that
ebates. the discovery act and the home design platform. shopify's ceo tobi lutke going well. they picked us up the year ago with the idea that let's get in more places. let's give people a place to show their products and buy these things directly and it has been going amazingly. we have great partnerships and as you mentioned. emily: facebook has tried e-commerce before. it has always fizzled. why is it going to work now? do people really want to shop on facebook? tobi: ads are behind a lot of facebook's business. they are advertising places that sell products. shopify is for advertising anyway. to bring us closer together with the identity and maybe the credit cards that facebook has on file -- a compelling
experience for the people shopping. emily: what about amazon? how much, in terms of sales, has been generated by the amazon partnership? tobi: amazon partnership has been mostly about their web store business. they have brought over a lot of merchants that have been selling on the platform. it has been a great partnership. payments enabled directly through amazon, the ability to ship the product directly into the amazon marketplace. it is a meaningful channel for the people on our platform. emily: what about google? what have your talks with google been like? tobi: yeah. it is a little bit hard for me to comment. i know where you're going with this. [laughter] emily: let's talk about the elephant in the room. has google talked to you? are they trying to buy you?
tobi: as a public company, i emily as a public company, i cannot comment. , emily: do you wonder about google as a competitor? they've been trying to expand their shopping efforts. tobi: google, and everyone else frankly is finally taking , e-commerce seriously. everyone realizes what an important role it plays. would be one to do it shopify is we want to be a neutral office. we want to power the merchants. we love helping entrepreneurship. we want to make it easier to build these online businesses. no one paid attention to how difficult this was. we built the back office. we are getting your orders in and getting your packets out. and then we integrate with facebook. we give you online stores or you can sell directly. that is really our role.
emily: you're getting so much information about the payments business because you work for these businesses. who is winning in payments? is it paypal, stripe? tobi: they both have a good place. now, paypal through acquisition , of a company called norv is, and in stripes' case it is more home-built, but it is a sign of how products like retail is very important. we have looked closely. if you sign up for a new shopify, you get shopify payments, which is related to stripe, and we automatically set you up with paypal as well. emily: now the new trudeau , government is making tech part of their plan. boost today.big how does the canadian government keep entrepreneurs from moving to silicon valley and taking their ideas here? tobi: well, coming to the
valley, you meet a lot of canadian friends. [laughter] it is the ambition of the canadian government to get everyone to keep building the companies in canada. we started in ottawa. we have 4500 people in canada. it is suddenly a great place to build long-term companies. and, the new focus is very welcome. justin trudeau is savvy on technology. he really, really understands it. it is fun right now. emily: that was shopify ceo tobi lutke. coming up, we dive into the world of space startups and the first accelerator for the aerospace industry. stay with us.
, the ground. i spoke with the founder, francois chopard, about what he is excited about. why did you start this accelerator? what kind of support do aerospace startups need, besides a lot of cash? francois: i am an engineer by my background. i worked for the u.s. air force research labs. i'm passionate about aerospace. then, i've been doing consulting for the past 20 years. so, you are in paris, l.a., munich, singapore here it why these places? francois: we wanted to be global. our startups need to be connected to grow their businesses with large corporations as fast as possible. for us, the major hub combining aerospace, science, corporate aerospace, also money and , entrepreneurs, we wanted to be in all the locations where the startups can meet and
collaborate with large corporations. emily: where does space talent cluster? do they come to you? francois: it is a combination. we start with universities, whether in the l.a. area, m.i.t., asia, europe -- these people, these engineers with phd's want to do something different. they do not want to work for large corporations anymore. they want more autonomy. they want more autonomy. they want to make a difference. they want to be more empowered. they want to put their name into history like elon musk with spacex. emily: so they're not only , trying to build rockets like musk? francois: there are so many different subjects and startups. we are working with more than 300 across the globe. out of the different areas, we can name electric cars, vertical
takeoff and landing capabilities. we are talking about -- there are probably 20 startups working in that area. there is a lot of them that want to work on satellite constellations, whether it is through observations or communications. inside the aircraft, a lot is going on. in the cabin, for example, more connectivity with the startups that want to do big data. there are more sensors. we want to operate aircraft that are smarter and more efficient. emily: now, a lot of people think of spacex as the only space startup. there is also sierra nevada. which we've had on this show. do you think we will see more space and aerospace startups on the main stage? when and why? francois: beyond spacex, people are spurred by what he was able to demonstrate with a proper
business model and good valuations. it showed the way too many more of them. now, with that, there is more and more who want to invest and more and more who want to develop their own products. lehigh not, there are 300 to 400 mature startups with strong technological world-class products coming to the market. so, maybe not all of them will succeed, but the landscape in 10 years to 15 years will be different. emily: and elon is helping? francois: absolutely. by what he is doing, what he has announced with hyper loop. with the launch electrical cars. yes, by showing the way, of course -- emily: that was the starburst accelerator founder francois chopard. that does it for this edition of the best of "bloomberg west."
♪ nejra: coming up on "bloomberg best," the stories that shaped the week in business around the world. a terror attack devastates brussels. we examined the global impact on policy, security, and markets. >> clearly it is in our business interests that borders remain open. the cooperation between countries has to be strengthened. >> people should not overreact to this. nejra: a busy week in tech as iphone goes small while twitter celebrates a big anniversary. bloomberg covers it all, from apple to xiaomi. >> it was a profitable company for a long time. nejra: and in the weeks best interviews, influential people speak on topics of critical importance. y