tv Best of Bloomberg West Bloomberg August 20, 2016 6:00am-7:01am EDT
uber users in downtown pittsburgh will be able to summon a self driving car as soon as this month beating out google, tesla and all the biggest are makers to a mega milestone for the auto industry. a self driving car. they started with a specialized volkswagen. we sat down with a contributing wrote this max who exclusive. >> uber will be watching the pilot program in the next couple of weeks where drivers, at -- riders and random will experience this new era. people experiencing it with a test driver and a copilot taking notes.
it is very, very early, but it is exciting. i rode and one of these and it is an experience. on -- you were on the show when we were talking to the founder. what is your take on it? >> it is stunning. impressed. i am not sure i would want to be -- of the people rider riding and it uber has put a lot of people and its labs. they may be disappointed with the outcome of that. from the way they are describing it, auto will be the center of rabidly of bloomberg's -- uber's
self driving efforts. maybe they are salvaging their self-respect by deploying cars in hometown. emily: you researched decision-making by humans versus machines. are we really ready to let robots take the wheel? are robots ready for the challenge? >> emily, this is all about trust and establishing trust. i have written about this extensively, when should we trust machines with decisions? uberis a bold move by because what they are really doing is going out of the simulation mode and putting this out there into the real world. that is the only way is to establish trust. trust with consumers and trust with regulators, really need to be convinced that this thing
works and it is better for society and it does not impose huge risks on individuals. and there is only one way to do it, which is to put it out there. it is absolutely brilliant because it puts them in a position where they are gathering really valuable data that others don't have. it gives them that first move withtage of gathering data vehicles operating in the real world, and that is different. and they need to do that in order to establish trust. emily: max, how will this work? beusers opt in wanting to picked up by self driving car, or just one shows up? >> as i understand it, you opt in and use the platform normally. it is like being color number 100. you get an alert that says you will be in a self driving car. hope you don't have a lot of luggage because these self driving cars have a lot of --
have large computers in the trunk. and also a limited number of passengers because of the driver and the copilot. one thing that is interesting about the uber self driving thing is that uber has driven many hundreds and millions of miles. but they are saying is that they may be able to use the data that their human drivers are collecting to train the robots, which is aexciting thing for people who are deep into space. that it isr thing is uber getting back into china in a way. this is an indirect way of getting back into the chinese scene. emily: interesting point. david, what about the people like you and me who may not opt road and didn the not choose to be driving next to
a self driving uber? >> they better hope that nothing goes wrong here. it reminds me, first of all, tesla was claiming they had more data about self driving because they have all these cars on the roads. maybe this is uber's way to jumpstart. look at what happened when tesla had an accident that was quite predictable. these overly valued companies, whether public or private, they had this pressure to prove they can do these things. that means they are in a perilous position if they go wrong. i think it is dicey to be doing this so early. they are not going to get those two people out of the front seat any time soon. if they did, they might be inviting disaster. coming up, we will have more on autonomous driving ambitions and a bit carmaker
they: ford, pulling back curtains on autonomous driving. the car would have no steering well and it is investing in different technology companies to get their. we have seennt -- taiex between general motors and lyft. andught up with the ceo asked him if you would consider partnering with a major tech player? >> as we look at the technology and the roadmaps, if there are things that others do better
than we do, we have announced new partners. emily: tesla is focused on a semi-autonomous model. your car is not going to have a steering wheel. why is that the best way? >> i cannot be for tesla. we are a leader and what we call level zero through 2 driver features. in stop and go traffic and we will continue to be a leader and invest. at level 4, we have a lot of confidence in we believe in our plan that taking the driver out of the loop is really important because this little no man's land, what point do you have to reengage the driver and a level three type vehicle? on how to doling
that responsibly for the driver. emily: so, some day, once you get your cars on the road, a ford self driving car will get involved in an accident. who was liable? discussionto have a with the regulators, the consumer advocate groups, insurance companies, etc. clearly, this is one of the areas we have to work together to come up with good policies, both regulatory and legal policies. emily: i spoke to the head of baidu. it will the investment help get ford self driving cars on the road in china? >> let's put some perspective on this. investment ande were not partners with baidu. they are just one of the
financial partners. i would not read any more into that. emily: what about your china strategy? >> we have a good strategy in china. it is growing. we are thinking about how do we play a role in addition to our core business of selling great cars and trucks. emily: specifically, on the fully versus semi-autonomous thing. and i know you are not going to speak to tesla specifically, but do you think the semiautonomous model, can it be dangerous? is it safe? >> when you think of a level three vehicle, how do you reengage the driver in a timely way? -- we have struggled with that. that is why we made the decision to only go to a certain level of semi-autonomous features. saw ingedy that you
florida, a gentleman -- a line emily emily: he was not from florida, but he was in florida. >> i cannot speak to tesla, i can only speak to what we are doing. speakingen it comes to for a platform, do you struggle with the idea of getting that much control to someone else? important that who controls a relationship with the customer is important. emily: had you see this playing out? this is a hotly competitive area of the market as we have talked about so many deals and partnerships. how do you see ford coming out? >> i feel really good about where we are at. i feel really good about our technical capability. but i also feel really good about how we are approaching
this and talking with others and being realistic about what we can do well and what things we can't and who we need to partner with to realize our vision. emily: do you think you need to invest and lyft to partner them what the future? 's i cannot speak to gm strategy. our focus is to get a fully autonomous vehicle on the road. throughat everything the lens of what will create profitable growth. emily: have you driven and one of the test cars? >> oh yeah, of course. it is have you been driven. it is fun to drive. and it is fun to be driven. emily: what is is it like -- what is it like? >> you get used to it very quickly. ceoy: that was ford motors mark fields.
♪ emily: dropbox considering a big leap into the public market. executives have met advisers about going public as soon as 2017. the file storage company wanted to get a sense of the population. that is a concern for any company, but especially dropbox. two years ago, the company was that a private funding round. we spoke with cofounder of the competitor and a bloomberg reporter who broke the story. the evaluation is going to be kind of top of mind when it comes to whether or not they want to move forward. andgement brought advisers
to say if we did do this in 2017, what with this look like and what would investors want to give up? thehave to remember, with backlog, we have seen a pullback in how much investors are willing to give these companies when it comes to valuation. at the company is not profitable, if they don't have a clear path to getting there, these are all things that have prompted public market investors to really push down on what they are willing to give at an ipo. drop pots gave that private funding round in 2014 at the markets running into private money. there have been questions since then and you have to think if they are going to go forward, they need to be aware of the optic. valuation fromw fidelity written down, these are things that did not play out well internally for morale or customers. emily: of course box went
public, one of their big competitors. it has struggled since its ipo. i did speak with the founder and ceo to houston where he told us that dropbox is cash flow positive. take a listen on what he had to say. flexibility and we can go public on our own timeline. he is saying, look, we will go public and can go public whenever we want. we are not on anybody else's timeline but our own. if they are looking at 2017 next year, what kind of a market with a becoming into? >> it is going to be one that might be more crowded. backedr venture capital tech companies have gone public in the u.s. to share.
their is appetite on the buy side for some of these bigger deals, but they will be going into a market where -- box took a 29% evaluation cut when it went public january 2015, and is still trading below is $14 a share price. they would headwinds focus on it they were to push out. investors cannot be locked in forever. there needs to be a liquidity event at some point. it seems like an ipo will make the short list of potential outcomes for this company. , your company is a competitor to dropbox. the cloud storage landscape has changed to manically in the last few years. we have seen the rise of amazon and microsoft and google really stepping up their move into this territory. madeas that landscape things more difficult for you guys, for dropbox? i know you are more focused on enterprise which drop box has
tried to focus more on. talk to me about this sort of changing tide. >> one of the key things to keep in mind is where the market started and where it is today. dropbox defined what it was to cloud storage for a consumer. they killed that model. they were wildly successful at it. that has changed significantly because the money here is to be made an enterprise. they value security more than anything else. when you look at dropbox, they have been a victim other own success. they have had so much adoption within the enterprise that the has almostx problem become a definition of dropbox, right? when you look at the market , he started with a consumer background and they are trying to be successful with
enterprise, it is winning hearts and minds and overcoming the whole perception that they were part of the problem. can be part of the solution? emily: can they? >> that is to be seen. a ghost to the core of whether you can change -- it goes to the core of whether you can change. you do consumer very well, but to do enterprise well, you have to do other things. emily: what are you hearing about how well dropbox is doing compared to other companies like yours? , they areke to drew always talking about fortune 500 companies and they haven't now, consumer side. most of those peoplereaying anything to use it? >> the question is s easy to talk about i have got lots of users in these uses are part of businesses. the core metric is going to be our enterprise cios buying this and sanctioning it within the
enterprise, or are they pay big money for it? when they open up their financials, i understand they're testing the market now, that is what the market is going to be looking at. when dropbox goes ipo, what are you getting? are you getting the consumer company that was successful in the past? , we talkedkly alex about a $10 billion valuation. some have said, this company has been written down in portfolios to half that are less than half that. gardner came out with information last week predicting that there are many cloud storage companies that will cease to exist in a few years. what kind of potential valuation are we looking at for dropbox? >> i don't have numbers for you, but i will ring them to you when i get them.
you have to think there is going to be a little pressure given the competition in the area. billi, i am hearing more negative sentiment than positive as to whether or not that number will stand. we also spoke with index ventures partner about dropbox's plans. he joined dropbox early on. here is what he had to say. >> i don't know what the exact plans for the company are. that the company has made incredible progress both in terms of cutting costs and moving up on the infrastructure side. of the business is growing quite nicely. growth, of revenue profitability, just reported being cash flow positive, all the metrics are there. it is up to them to decide when to do that.
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focused on several things. one is we are strong believers of artificial intelligence, changing the future of china's arch up in our ship -- entrepreneurship. -- areas likelike insurance, banking, hospitals, schools become more efficient and help users get more value. more.ur disease treated learning more in school, those because china has a massive amount of data that can be mined. we think that is a great way to use ai. we are building computers that can see, hear, and understand. a couple of initially re-think a very exciting are the securities home,ry, for commercial,
and government. we think robotics is very especially for certain vertical segments such as watching young kids in older people. we think robotics and commercial applications, like the amazon tiva is exciting for manufacturing economy like china. are probably our biggest investment. we look at enterprise services, which is now fledgling, but really started to take off. of greatt the creation content. the next stage beyond mobile games. we think that is a big area as well. emily: part of the reason it is so difficult for u.s. companies chinese companies to expend in the u.s. is cultural misunderstandings, is a
regulatory issues? what are the most common things that, reasons that relations between the u.s. and china at the investing and entrepreneurial level fail? a chineseare entrepreneur the ones to promote your application, you're never heard of facebook before. how do you do facebook promotions? when you distribute your apps, ten different app stores. there are various ways to get your app to the top. in google play it is owned by one company that has strict principles of how to operate. in china, if you are doing a security application you would just go and sell to the provincial government. opportunitieshe are completely different. you cannot only be fully
conversant with american business but drop all your practices in china. the reverse is exactly the same. also on top of that you're dealing with very aggressive peer competitor entrepreneurs. you are dealing with those who will quickly give you a lot of money, but a lot of pressure. you're dealing with competitors same may not follow the professional standards and create pr nightmares for you. you are dealing with a different set of government regulations. for example, when i was at google, i had to defend the company. one time we were -- we were a monthly was some tax payments. we became headlines about being prosecuted,-- being or something like that. we had some trouble with search terms, and those were blown up
as a pro-japanese search. warhe final japanese anniversary. these are ridiculous, outlandish, fabricated rumors. there created perhaps by our competitors and those that did not like us. they were spread out everywhere. very difficult to even clarify ourselves. those are the types of issues that makes it extremely difficult. i would generally advise american entrepreneurs to find a part or in china if you want to go to china. the same with a chinese partner to find an american partner an arrangement, let them in the people that know ther home country take decision-making responsibility and drive your company forward. on't try this yourself.
don't think you can just go hire someone to solve the problems. there are many casualties before you among great companies like yahoo!, amazon, ebay, google, and now uber. emily: that was the founder. coming up, backing one of hollywood's innovative new players. how to invest in the future of media. ♪
to the ofre. they announced they raise new funds with chinese investors including ccpw and tencent. we spoke with the ceo,and the growth fund founder, to co founded this and has been incubated the company. going to build an entertainment company today it is not going to work like the entertainment companies right now. are 100siness models years old. a lot of things they have done based on different revenue streams. instead, if we are going to build a company today it will be different. china will be part of the dna. to have it ill try as a bridge where it is part of the dna.
emily: private equity normally states in the company for a financial month of time. both happy different? -- will that be different? >> we sat together after being at a board meeting, and bod -- we have known each other since college first of we sat together and realized a lot of overhead been talking that which is the global landscape is so different. we could build a different kind of business together. our first check in this company was $1 million. people think of that is being willing to get in there and help build the business. we were working as partners all the way along to create this. that was aompany result of the 40 investments we made immediate businesses. -- in media businesses. of any the best roi hollywood producer. he is been a prolific producer
and is consistently generated profit. he has a respect for capital which is important as an investor. it has been a great marriage from the beginning. we ultimately have to return capital to our investors. e fairly patient. our goal is to maximize. >> it is unusual for a pe shop, a simpleg started as idea that is now grown into a multibillion dollar company almost overnight. what is amazing is that the way bill and his team approached the risk we were of growing something and having me have to empower to actually allow us -- power toe heft and allow that is a combination i haven't seen out there. emily: you have quite a resume, bill. another company
focused on entertainment, tech and different industries. you are a investor in a virtual reality firm. the do you think is potential for vr in mainstream entertainment? >> bob can talk about it as well. we made four investments in the most interesting vr businesses. it is based on a lot of work we have done, thematically, to understand how consumers are engaging with media. we believe sports, music, and media content nd gaming, vr will be a ubiquitous way we all engage. it is remarkable. emily: when will i be able to enjoy the vr experience comfortably? > starting at about now.
we are not technology people. we do not know who is going to win. our goal is to advocate the best storytellers. remember, with vr, is going to be huge. you don't control the frame. it is difficult new you can't actually manipulate that journey for them. it will be a completely different language to storytelling. we are trying to throw some of the best minds at that. the biggest stars and directors are fascinated with cracking this space. we figure that as the different companies are all vying for dominance, they will all need content. need compelling content. we want to be the ones that provide that. >> the other side is simply experiencing live events differently. you will see major bands allowing their fans to have a vr
experience that puts them on the stage. he will not necessarily spend what people sit -- spend ti sit -- to sit in the floor seats at the nba finals. emily: do you think there is room for the humble movie theater? the we still go to the cinema? he first off, yes, i think t movie theater isn't going to go anywhere. going back to the cavemen, sitting on fires. you want that communal experience, sitting in a dark room, laughing, or being scared, that is an awesome experience. different type of stories you tell to achieve that goal. being able to want something on tv, in your own living room, or even on a mobile phone. it is interesting that both
demographically and culturally people access stories differently. in china, it is normal to watch a 90 minute movie on your phone. that is not normal for us yet. this moves, that as the demand for quality content will increase. emily: you announced and i position this week. how does this consolidation play out across cable? >> cable, our bet, we create rcn and grande, created a top 10 cable platform. we are very excited about the company in the teams. we fundamentally believe that cable represents the 21st century utility. talkingng we have been about, the ubiquity of content and the exciting new developments taking place need that kind of infrastructure to
allow it to exist. it is no different than the infrastructure put into water distribution, basic utilities. nowadays, this is fundamental. these businesses will be doing quite well going forward as they realize the macro benefits driving that consumption pattern. youy: do content creators to keep one foot in distribution? >> that is our model. other people disagree. there are other points of view. we are convinced being able to -- if you are a great storyteller, or have a big brand, being able to control and be involved with the content from inception all the way to delivery is the key. you're never handing it off. bill, and bob, long simmering with
emily: who controls the internet? this week the obama administration formalizing long planned though to shift authority to a nonprofit multinational stakeholder on october 1. facebook, amazon among the big tech companies transfer -- supported me transfer. several republican lawmakers are putting up a fight. i spoke with the godfather of the internet, so-called. the former chairman of and asked him to explain what this was all important. >> it was planned to do this in 1998 when it was created to perform this function. the plan was to turn over the
responsibility without for the government oversight within two or three years. it is now 18 years later. the organization has performed well. the internet is not collapse. taken care of the internet allocation and parameters of protocol. thes time to show that internet doesn't require government oversight. what it requires is operation by the private sector. together, with all of the other entities, that is why multi-stakeholders are important. this couldnents a hurt u.s. businesses and put national security at risk. could this hurt u.s. businesses? >> i don't think so. if anything, this is the right thing to do. the current circumstances, there is a visible oversight role. other governments look at that and ask why should the u.s. government have the special position? it isn't necessary anymore after
18 years. it has formed and reformed itself multiple times during the course of my chairmanship. moreis stage, it is harmful to persist in the special relationship than it is to show that a multi-stakeholder organization is the way forward. harm could there be if the u.s. government does continue to oversee it as is? >> it has a severe impact was above the government feel that the u.s. shouldn't have this particularly special position are going to work very hard to fragment the internet, to insist they control more of it than they do today. the government's today have a lot of control over what happens inside the national jurisdiction. the don't have control over what happens to everybody else. if the u.s. government persists
in the special position, the other governments will feel the need to increase their control one way or another. i think, by stepping away from this we actually remove a lot of that pressure to make it much m ore egalitarian. ily: assuming this is happened, what will be different? will users notice a difference? absolutely not. the current role the u.s. government has is to verify that the changes to the zone of the domain name system have been properly catered for in the processes that lead up to those changes. the router needs to be pointed to a different ip address. the u.s. government's role as nearly -- merely to check that icann has performed its functions clearly. when they step away from that particular function, all of the
mechanics are exactly the same. we won't go through this loop. otherwise, it is exactly the same. emily: as one of the fathers of the internet, that is what you are considered to be. how do you think oversight of the internet has played out over the last couple of decades? how do you expect that the play out over the next couple of decades? >> for those that are listening, the u.s. government was the origin of this project. it started in the defense department. i am very proud not only of the defense department but other parts of the u.s. government including the national science stepping awayr from control and turning it over to a multi-stakeholder operation. when bob and i were in the defense department, we basically made the primary decisions on policy and what happened to the internet. that expand into multiple parts
of the u.s. government, including nasa and nsf, and the department of energy. step, the government has withdrawn from control of oversight. this is the last step. emily: you used to run icann. which is in charge of domain names first of the wrist talked the internet has become too big. is it possible for the internet to become too big? >> well, we certainly won't run out of domain names. icann has authorized the creation of some 2000 new top-level domain names. of internet address space you're quite right. ly: that was the former icann chairman puts that does it for the best of bloomberg west. we bring you the latest throughout the week.
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