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tv   Best of Bloomberg Technology  Bloomberg  June 25, 2017 3:00pm-4:01pm EDT

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♪ emily: i am emily chang, and this is the best of "bloomberg technology," where we bring the top interviews from the week in tech. coming up, mutiny in the world's most valuable startup. why investors decided it was time for travis kalanick to go and a way forward for uber. plus, sheryl sandberg opens up in a bloomberg exclusive interview. the facebook ceo gives her take on big branding, the future of digital ads, and cybersecurity. and the inside track on the trump administration's plans for tech.
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we talk with the founder of code for america, who was in the room alongside tech's heavyweights for the first meeting of the american technology council. but first, to our lead. travis kalanick is officially out as uber's ceo, resigning from the company he cofounded. kalanick's resignation comes just a week after the board announced he would take a leave of absence following months of scandal and employee exits. however, the pressure did not come from the board. instead, in a rare move, investors pushed kalanick to step aside. after all of these investors poured more than $15 billion into uber, a company worth $65 billion. caroline hyde broke down the news with our bloomberg tech reporter eric newcomer and nimay mehta, a partner at the lead edge and investor into uber. eric: kalanick had hoped the leave would satisfy critics and give him time to recharge after the death of his mother, and sort of, somewhat take responsibility for the findings
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of the holder inquiry. but then it clearly was not enough. bill gurley and some other major investors in uber sort of lead this campaign to tell travis that he needed to step aside, and that looks to be what finally convinced him to leave his position as ceo. caroline: as an investor, this is something you agree with, is it? and why did it come down to the investor base and not the board? nimay: i think the investor base represents a large voting interest of the company. and so that is an important source of control and influence of the business. i think it is important to recognize that travis kalanick also resigned sort of prompted by this, but he made the determination that this is the best for the company. he did not have to resign. so, let's not discount the role of travis making that decision for himself. yes, prompted by the investors,
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but he absolutely had a hand in it as well. caroline: eric, can you explain to us potentially why the board had not taken such action prior to this? were their hands tied? was it to do with travis' own voting share? eric: well, travis has a lot of control over the company, especially when coupled with his cofounder, garrett camp, and ryan graves, an early employee and early coo of the company. together, they had a pretty strong coalition there. and then, i think there was a lot of faith in travis. he has been a key man in defining the company, for good and bad. you know, uber did over $20 billion in gross bookings last year. amid the scandal, it is easy to forget how enormous this business is. how global it is. it will be a question how somebody else can step in and wrangle the business that travis knows more than anyone else. caroline: let's turn to nimay. now as an investor, are you as
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confident as ever that we can continue to see the company continued to grow, to see valuation continue to be supported when they lose such a divisive visionary such as travis? nimay: i think that travis' involvement, or lack of involvement, going forward is a challenge, and something the company will overcome. but there is plenty of precedent about non-founders stepping into the role as ceo and taking businesses forward. we look at eric schmidt at google, albeit earlier in the lifecycle of google, but took the reins and look at where google is today. not in the same view, but when steve jobs passed away and tim cook took the reins at apple. the founder and ceo passed away, and apple is up 200% since steve jobs' passing. so, there is absolutely a precedent for non-founders taking a backseat, and businesses continuing to appreciate value and continue to do great things. i am more excited about who is
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going to step in those shoes. they are big ones for sure. but there are lots of talk to people who are excited about taking on this opportunity, taking on this challenge. it's an incredible business. like eric said, they did $20 billion in bookings last year, and they continue to grow very quickly. we continue to believe their growth will be sustained. they just need to have the right leadership at the helm to continue that. caroline: we were just looking at the amount of executives that need to be filled. the positions of ceo, coo, cfo, cmo, svp of engineering, general counsel. first of all, who do you envisage being coo? have you got any names springing to mind? who is your eric schmidt? nimay: my vote is definitely for sheryl sandberg. there isn't anybody -- i don't know if she will take the job, but there isn't anybody who is more capable and embodies the culture and values that the
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company needs on a go-forward basis. but, more generally speaking, they need someone with global experience, experience running a rapidly growing business as complex as uber is, and someone that, again, embodies those values they are looking to define on a go-forward basis. inclusion, empathy, these are things that the board and the investors are going to be looking for as they look to define a new ceo and fill out the rest of the operating bench. caroline: and can i quickly ask, therefore, how much you worry about the control travis continues to have from a voting share perspective? nimay: going back to his resignation and him deciding to do that, i think that is the first step in a recognition that this is the right thing for the business, and from a governance and control standpoint, i think there will be steps taken on a go-forward basis that help create a little more balance and independence around the board.
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we believe those steps are coming and that travis will do the right thing from a governance standpoint. let's not forget that that is also split between garrett and ryan as well, so there is some diversity there, in the voting control and ownership in the business, but that we should continue to see that diversification on a go-forward basis as well. emily: that was bloomberg tech's eric newcomer with nimay mehta, speaking with caroline hyde. facebook chief operating officer sheryl sandberg led facebook's presence at the annual cannes lions advertising festival as the social network increasingly dominates the multibillion-dollar ad market. but before she traveled to france, sandberg spoke exclusively with caroline hyde and discussed the evolution of facebook's ad strategy as the market shifts. sheryl: our biggest message is that the small screen is big. people have moved to mobile, and businesses are catching up. it is now the case that the average u.s. consumer -- and these numbers are duplicated all
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over the world -- is spending about four hours a day on tv and five and three quarters on digital, the majority of which is mobile. and so, it is a really exciting time to be a marketer, because people are carrying around, in their pockets, this device that lets you reach them all of the time. and brands, products, services -- they have always been part of our daily lives, from the toothpaste we brush our teeth with to the shampoo we use, or the car services on the cars we drive. all of these are part of our daily lives. now, marketers can reach us, hopefully with messages we want to hear as part of our daily experience. that's pretty amazing. and the explosion of creativity. the cannes advertising festival is very much about the creative community. it is about how do we create messages that really resonate with people and that want them
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to be a part of their daily lives? caroline: this is almost playing into a discussion mark zuckerberg himself started this year of community building, off-line and online. how are brands going to be able play into that? sheryl: communities are very important. we are very focused on facebook, from mark and all of us, on how we build communities that provide support for people, off-line and online. brands are a huge part of that. airbnb is doing a great job. they have this great off-line experience, where people can rent house from host. but then, they have created lots of facebook groups that create online experiences, so even when you are not on that trip or on that vacation, you can be connected to the people who are a part of it. caroline: what about all the various products? you talk about how airbnb is making a good run of it at the moment, using facebook groups. what about messenger? what about whatsapp? what about instagram? the portfolio that you have, how are these products being adopted in the growth you are seeing? sheryl: in facebook and instagram, we have the two largest mobile ad platforms in the world, and we are seeing people really use that to build their businesses.
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there is a young woman in brazil named joanna. she started a company, and their idea was to sell fashion accessories. so, using facebook and instagram, she did all of her advertising herself on her phone, and she was able to target those ads to people interested in fashion accessories. and 79% of the business she had came from instagram. that is the small and local example. we also see the largest ad agencies, the largest clients in the world, figuring out how to reach people and create creatives that works for facebook and instagram. and we are starting to learn a little bit more about how businesses can interact on messenger as well. caroline: and what about video? this, of course, has been where the real explosion has been and what facebook has really driven forward. you are experiencing with new ways adverts can come in videos that run on facebook.
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how much is that being adopted? and how much are you starting to see that being added to your bottom line? sheryl: marketers have always loved video, because it is a great way to tell a compelling story. i think what this community is increasingly understanding, and we need to do better, is you have to create the video for the platform. so, the first tv ads were people reading their radio ads behind mics. now, people could see, but when tv evolved, video ads were made for tv, and it certainly was not someone sitting behind a mic. similarly, a lot of the first video ads in a social space were 30 second tv spots, just moved over to the social platform, and those can work well. caroline: is it either or when you think about brands putting their money to work?
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i am looking at data that says $70 billion is currently spent on tv. how much of that will go purely to the digital space now? sheryl: i don't think it is either/or. marketers should reach people on tv, they should reach people on mobile, they should reach people in the digital space, they should reach people everywhere they go. but how they reach people on all those different platforms needs to evolve. and facebook and instagram, we think we offer a really unique value proposition for marketers and people, because you can have the creativity of a video, the creativity of sound and light and pictures, but you can also do very specific targeting. you can target your current customers differently than new customers. people who are in the market for a car, people who look like people in the market for a car, so you can make sure the right message gets to the right person. emily: coming up, tech's biggest titans gathered at the white house to discuss the road ahead for u.s. technology. we will hear from code for america's executive director jennifer pahlka, who attended the meeting alongside apple's tim cook and microsoft's satya nadella. and later in the hour, more from our exclusive conversation with facebook coo, sheryl sandberg. this is bloomberg. ♪
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♪ emily: a story we are following -- the federal trade commission is challenging the proposed merger between fantasy sports websites draft kings and fanduel. the fcc says the combined company would control 90% of the paid daily fantasy business, depriving customers of the benefit of direct competition between the two companies. the ceos of both draft kings and fanduel said in a statement they are disappointed by the decision and considering their options. tech leaders say the u.s. government needs to modernize after trump's senior advisor, and son-in-law, jared kushner, held a tech summit at the white house on monday. apple's ceo tim cook was just one of the tech titans in attendance, and he commended kushner's steps in getting the government equipped with the
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latest technology. tim: the u.s. should have the most modern government in the world, and today, it does not. and it is great to see the effort that jared is putting in, in working on things that will pay back in 5 or 10 or 20 years. emily: we sat down with jennifer pahlka, code for america founder and executive director. she attended the meeting in washington and served as a deputy chief technology officer under president obama. jennifer: to the credit of the people who organized the meeting and the tech ceos, there were breakout sessions on pretty substantive topics, things that people do not normally put on the news, like procurement reform and how to get the government into the cloud and digital services for citizens, and i saw that most of the tech executives actually went to the sessions that i was in and had a pretty substantive dialogue about these issues. emily: so, you are walking into this having worked for the obama administration. give us some color from the room. what did it feel like? jennifer: well, again, to the credit of the folk there, it felt like the people who have
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come into the white house since obama left have looked at what i and many, many other colleagues did to say, "this is how we are going to modernize government, and let's continue and accelerate that." and i think that they are doing a good job of strengthening the united states' digital service and the technology transformation service, which are two units that do great tech for the american people. so that is good. i am happy to see them doing that. they have a long way to go. on the other hand, they are doing this in the context of an administration whose other actions do not necessarily represent what is best for the american public, if you are talking about services. emily: let's take a listen to what microsoft ceo satya nadella had to say to trump. take a listen. satya: all the technology we have today is because, in fact, it started in the government, and the recent institutions you
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funded, as well as the enlightened immigration policy. of course, i am a beneficiary of that, and i hope that we continue to be able to sort of really make sure the american competitiveness is what helps us that policy apart. emily: immigration has been a hot topic for trump. how did he respond to that remark? jennifer: i don't recall what the president said to that remark. i also know that there was a lot more probably said behind closed doors. they had five breakout sessions per slot, and i was not in the one on immigration, though i was very glad to see it on the agenda. emily: did trump seem receptive? to what was discussed? jennifer: trump certainly responded to those tech ceos. i would really look, i think, more toward what the tech ceos are saying to each other and how they are going to hold the president accountable, not just to the things that are about modernizing technology, but modernizing in the service of what? it should be in the services working for the american public,
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and they are going to have to stand up and ask those questions as this keeps going. emily: right. you posted ahead of this meeting and talked a little about why you are going. politics aside, why did you think it was important to be there, even if you did not agree with the politics? jennifer: right. because there is politics, and there is governing. governing is our problem. we have to get involved if it is going to work well. i mean we, as citizens, i mean we, as code for america, and i mean we, as the tech industry. we are going to have to get more involved if we are want to make
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the business of governing work. the guts of it. it doesn't work well today. try applying for food stamps, for instance. if you try to do it online, it is good that it is online. until recently, it is that almost an hour online, 50 screens, hundreds of questions, doesn't work on a mobile phone. we have shown you can do that in seven minutes on a mobile phone, including uploading your documents. it's not just that that is a burden on the user, it means we get bad outcomes. food stamps, "snap" nationally, is correlated with better education outcome for kids. so, when we have half of our population in this state not on the program, half that could be on the program, we are missing out on all those benefits that is going to cost us a lot more later when we have to intervene. emily: as the former deputy cto, what are the biggest challenges they are going to run into when it comes to modernizing government? jennifer: the biggest challenge they have right now is getting the talent that they need. there are amazing public servants working in the government now. most of whom came under the previous administration. a shout out to those who have come since annually really said, as one person replied to me on twitter, "i am going in because it feels like, yes, if our government is sort of a house on fire, i am going to run towards that, not away from it." those are great public servants, and some will continue to go. there's also wonderful people who have been working in government to try to do this for
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so long. but we really need to keep back talent going, and it's harder to do it when people don't agree with the policies of the administration. emily: you started an organization called "code for america." this issue came up. tim cook even spoke about it. what is the top of your priority list? for the president? jennifer: we are trying to prove that government services can work for all people with dignity, that government can work the way it should in the 21st century. so, we are there to reframe this conversation from "modernizing" to "making it work for people." and i think that we can do that, not just by speaking up at meetings, but by following up and showing that can work, and then asking everybody who works in tech to pay attention, get involved, support government when it is doing the right thing, and hold it accountable when it is not. emily: that was jennifer pahlka, code for america founder and executive director. coming up, tesla goes global. the company ramping up its presence in china with an agreement to produce cars in the
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country. and later, blue apron announces details of its ipo plans just as the food startup scene was thrown through a loop on the amazon-whole foods deal. we will break down how the competition in food delivery is heating up. this is bloomberg. ♪
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♪ emily: tesla has signed a preliminary agreement to explore production in china. according to people familiar with the matter, the electric carmaker reached a deal with the city of shanghai. it would move tesla a step closer to lowering its manufacturing and shipping cost in the world's largest auto market. bloomberg reported this on monday with our bloomberg tech reporter dana hull. dana: it sounds like there is an imminent announcement for tesla to produce vehicles in shanghai, and we are hearing this from china.
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not a lot of details yet on who the partner would be, but this is a huge move for tesla as it seeks to become a global automaker. right now, they have just one auto plant in america. emily: how significant is this? dana: it is significant because american carmakers cannot make cars unless they have a local production partner in china, and without that, the import taxes are high. having a local partner in china would allow tesla to access china, where luxury cars are all the rage. emily: how big a market do we think china could be for tesla? dana: it could be significant. we are already seeing signs sales of the model x are doing really well there. we came out with a model with a filter for climate control. in the width of the paris agreement, china is the leader on climate change, especially when it comes to auto. emily: there are two upcoming spacex launches. what can you tell us about those? dana: yes, so their next launch is bulgariasat, which is a communications sat. it has shifted around a bit, and is now scheduled for friday from cape canaveral in florida. on saturday, they are going to
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launch satellites for iridium from brandenburg air force base. they could potentially have two back-to-back launches from either coast. emily: what is the significance of these coming launches, given the challenges spacex has had? dana: i think what you are really seeing is spacex has come back from the mishap of last september, and they are launching rockets on a more regular basis. their goal is to launch 20 to 24 rockets this year, and if they hit that, that would be a pretty incredible launch cadence. emily: talk to us about what we are expecting. dana: we are expecting two launches. launches can shift a lot because of last-minute technical issues or the weather and permission from the air force. but if they launch one rocket from florida on friday, and another rocket from california on saturday, i mean, that is pretty unprecedented. emily: so put it in the big picture for us when it comes to the space race, the private space race, and spacex's role within it. dana: spacex is really focused on driving down the cost of space, and reusing rockets is a big part of that. they had a big milestone in
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march, when they reused a rocket for the first time. they will reuse the rocket again this weekend. they will be launching rockets on a more regular basis. the more they launch, the cheaper it gets as they reuse their boosters. emily: our bloomberg tech reporter dana hull there. well, airbnb is on the verge of launching a premium service, aimed at attracting customers who like fancy hotels. according to people familiar with the project, the service will send inspectors into host'' homes to make sure they meet a set of quality standards. the new airbnb program could launch by the end of the year. coming up, more of our exclusive conversation with facebook coo sheryl sandberg. her thoughts on combating terror online and solving tech's diversity problems. and a reminder that all episodes of "bloomberg technology" are now live streaming on twitter. check us out weekdays. 5:00 p.m. in new york. 2:00 p.m. in san francisco. this is bloomberg. ♪
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♪ emily: welcome back to the "best of bloomberg technology." i'm emily chang. we return now to our exclusive conversation with sheryl sandberg. the social networking giant announced it would increase you should of artificial intelligence to remove extremist content is european leaders put more pressure on tech companies to block material. bloomberg's caroline hyde spoke with sheryl sandberg about this issue. sheryl: there is no place for any of this on facebook, no place for hate, no place for violence, no place for terrorism, and we take that responsibility very seriously.
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we just announced last week we have been working on this for a long time, we will continue to work on it, but we have next steps. we are using artificial intelligence as a technology to help us find any content that may be inappropriate and get it off even faster. we are making a big human resources investment. we already have researchers and law enforcement and terrorism experts who work at facebook, but we are growing that, as well as our human review capacity. we have 4500 people around the world to review and remove inappropriate content. we are growing that by 3000. so that is a significant investment. we are working with nonprofits, governments, other companies around the world to make sure we all work together to make sure that this content is not on our platform. for brands, we offer a lot of tools for brands to know where their ads can show, to make sure they know that facebook is a safe community for them. caroline: you say you are working with nonprofits and governments. how have you in europe, for
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example, been talking with governments? are you worried about the talk about encryption and some of the fines that have been raised? sheryl: we are in constant conversation with the governments on issues of security and issues that affect all of us working together. we have worked with governments to talk about initiatives, occi. online content initiatives, where governments can not just make sure terrorism is prevented, but can actually do counterterrorism work, try to get positive messages out there that stop people from doing things that obviously hurts so many people. we also work with law enforcement officials all over the world to make sure that if there is anything we can do to support their work, we are able to do it in this area. caroline: something fascinating you launched in berlin, the online civil courage initiative.
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the innovative use of the counter narratives. it is so complex, therefore, how do you think you can understand if you are improving -- what is the end goal or target? is it to make sure the measurements come down and the numbers come down? what would you count as a success? sheryl: success from a company point of view is to make sure there is no inappropriate content of any kind. hate, violence, terrorism. any of this on our platform. we take our responsibility even more broadly. we want to contribute. for example, over the past several years, tech companies have started working together, sharing information. when anyone identify someone they think is going to put inappropriate content on a platform, we know we have a broad responsibility to do everything we can in the face of some of these threats to help protect people, and we take that very seriously. caroline: even though we are in the early days of brands responding positively, the
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terrorism element and fake news, do they feel this is changing? sheryl: brands know facebook is a safe place for them to be. we have worked very hard to inappropriate content is not on facebook and that brands have a safe way and a contextually safe way to communicate on facebook. caroline: i think what is also fascinating -- you talk very passionately about this element. you also talked passionately about diversity. and this is something we are seeing now, brands also becoming potentially involved in. what are your messages to brands to keep on drawing diversity, not only within companies, but also in advertising? sheryl: brands have such an important role to play because people see so many marketing messages. the estimates are that people can see hundreds of marketing messages a day. that means that if we market products and services, in a supportive of gender equality way, supporting female leadership, supporting men as caregivers, we can really make strides towards gender equality in the world.
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the lion foundation will announce the glass lion. it is an award given every year to cannes to the ads of the year for gender equality. last year, p&g won for an ad called, share the load, which showed a man watching a woman doing all the housework. realizing you never helped his wife or mother, and leaving his house, and going home to his wife of many decades and offering to do laundry. caroline: diversity closer to home then. talk to us about diversity in silicon valley. i'm a female looking to get a job and technology at the moment. i look at uber for example and maybe i am being put off. what advice as a coo might you give to uber and want to give to those people wanting to get into technology right now as a female? sheryl: obviously, the reports of what is happening at uber are super troubling. i'm glad they are taking action to address them, and all of us
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need to do more. we definitely need more women and underrepresented minorities in the tech field. we also need them in leadership in every industry in the world. we have these same issues. in technology, we have a special concern and opportunity which is that women are not studying computer science. in 1985, women were 35% of computer science degrees, and now we are down to 17%, 18%. we know girls are outperforming boys in schools in most countries in the world, including yours and including mine. all the way from elementary to university. we need to pursue our daughters and people of underrepresented minorities that tech is for them. emily: meal kit delivery company blue apron says it's targeting a $3.2 billion valuation. this is after shares of grocers and retailers fell on the news that amazon is planning to buy whole foods in a whopping $13 billion deal.
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we discussed the landscape with our bloomberg at large editor cory johnson. >> this is a company that operates in a space, we know that food delivery is so fueled by competition. it is expensive space to operate in because so much of the costs go to marketing. you are always fighting. it is a land grab for wallet share for customers. this is especially tricky for blue apron and that now whole foods will have the logistical empire that is amazon and amazon customers will have more access to hold foods. why is that important? those are the kind of higher-order customers, the top 10% of u.s. households who are willing to spend a little more to get the quality the whole foods promises. that kind of happens to be the same group that blue apron is targeting. i spoke to an analyst earlier today who said they are all fighting for the same wallet share of these high spending customers. it is going to be hard for blue
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apron to fight down the value chain because folks are not willing to spend $11 or $12 a plate for a box of fresh food, but that might spoil. when you think about where blue apron's growth is going to be, they are going to have to figure out how to make sure that they are the ones nabbing those dollars from those high-end consumers and not whole foods via amazon. emily: and yet blue apron is a very different business from whole foods, amazon. how does it change the competitive landscape? cory: whole foods and blue apron are very different businesses. yes, they serve food to consumers. what you see blue apron doing is trying to market this aggressively. it's a new kind of idea sending people just the amount of food they need to make for a certain meal with that recipe.
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they are spending vast fortunes to do it. alex mentioned their marketing costs. they spend $60 million just last quarter, $61 million just last quarter. look how much they are spending in advertising. there's a percentage of revenue is going way up. it was 25% of revenues last quarter. this is an extraordinary amount of money to be spending on marketing. that will help further their ipo because the name is better. they are spending like crazy, like drunken sailors try and get people into their service. the goal is to keep them and they have yet to show that ability. emily: almost every analyst says to expect more consolidation. could blue apron consider m&a, or reconsider the timing? >> right now, we have got nine days left for m&a to be on the table. this deal is scheduled to price next week. frankly, given where it is in the cycle of this deal, if something like that was going to happen, it probably would have already. what i can tell you is that a person familiar with the deal spoke to me and told me that management is focusing on refining its ipo pitch, really pushing this lifestyle idea that corey was talking about. the fact that his recipes and prepackaged ingredients and that
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is so different than what a grocery delivery company does. and they will be really pushing towards addressable market, not just the fact that they can expand, but only about 1% of all grocery shopping actually happens online. these are areas that amazon-whole foods could help if people get more used to buying their food off the internet. this seems to be an ipo for sure at this point, but i will definitely be keeping eye on it. emily: we have new reporting out about how this amazon whole foods will work. job cuts at whole foods, price cuts at whole foods. what can you tell us? cory: amazon denies the job cuts, but we have sources that say that will happen. the amazon style has been to do things at a very low margin. as bad as grocery margins are, whole foods has about a 5% operating margin and amazon is worse.
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the focus for amazon is very different, but amazon's overall profit margins are below 2%. they want lots of cash flow and use that cash flow to reinvest in their business. the very thing that whole foods shareholder activists are looking for. increasing operating margins, don't look for amazon to do that. emily: coming up, airbnb rolling out a new feature to combat the global refugee crisis. we hear from the cofounder, next. this is bloomberg. ♪
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♪ emily: airbnb is outlining an ambitious plan to use its platform to help refugees and evacuees around the globe on its new open home platform. the goal? to find housing for 100,000 displaced people in the next five years. we heard from an airbnb host from denver who hosted several refugees. she explained why she signed up for the program.
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>> when i was first contacted by airbnb asking if we could host a refugee in need, it was an unequivocal yes. it is consistent with our values as a family, and quite honestly, it aligns with the broader vision and mission of airbnb, which is to serve those in need. emily: and we spoke with there being the joe gebbia, who make new announcements about the platform from paris, and how the company is trying to get more people like susan signed up for the program. joe: well, you can imagine over the last five years, we have seen incredible growth of our host community. it is a big the question, what if we became proactive about situations in the world rather than just reactive to natural disasters? pretty quickly, the topic of displaced people can front and center. currently, there are 65 million displaced people. that's the most since world war ii. it also happens to be close to the population of the united kingdom. as we looked at what is airbnb good at? short-term hospitality, trust
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between strangers, and global presence. we thought we might extend this natural generosity into a platform that we are calling "open homes." emily: you called this 21st century philanthropy. why are you doing this? joe: i feel we have a responsibility. we have this incredible asset, this amazing committee of over 300 million homes in more than 91 countries. looking around in the world of how we might apply what we are good at with where it is needed the most, it makes a lot of sense. emily: you are a $31 billion company. you got investors who placed huge bets on your future. how do you sell them on the idea that this is worth devoting time and resources to, from a business perspective? joe: well, you know, i think this is really just a natural extension of what we are already doing. it is a question of, why not provide the same solutions to travelers to those who are displaced? emily: how does this benefit the business of airbnb?
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does it benefit the business financially? joe: well, airbnb does not take any transactions on these kinds of connections. this is all about generosity and hospitality in times of need. you know what, it is a part of the business. we have a great core business that is able to fund this sort of thing, but to us this is just an extension of our values in the company coming to life in the real world. emily: what happens when there's a problem, like when a host and a guest don't get along? or maybe there is a cultural clash? joe: well, we partner very closely with third-party agencies that are well respected. and have been doing this for many, many years, and we work very closely with them, and provide the same customer service we do with a regular product as well. emily: airbnb was hosting a massive convention for its hosts in november 2015 when the paris terror attacks happened. you were there. there is a very divisive debate
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going on around the world around immigration and terrorism. there is talk of closing borders and building walls. how do you respond to that? joe: you know, if anything, i think the world could use a little more understanding of each other. if that is something we can do with our platform by allowing people to open their homes to those who needed the most, then we are happy to play the part. emily: tech leaders are making critical decisions right now about how to work with the u.s. presidential administration. we have seen some tech leaders drop off presidential councils, for example, when they disagreed with president trump on climate change. what is airbnb's strategy when it comes to working or not working with the white house, even on issues you disagree on? joe: well, you know, we see home sharing as a nonpartisan issue. we work with democrats and republicans alike. and so, we work with any administration to bring home sharing to life. emily: airbnb is expanding with this "open home" platform. you are also adding more experiences to the platform, instead of just places to stay. give us an update on the
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business and plans for an ipo. joe: well, from a business standpoint, we are really excited. in 2016, we launched trips, which allows anyone to offer an experience. and really answer that question, what can i do? now that you helped me discover a local part of the city, how can i find out cool and interesting things to do? through experiences, it allows our hosts on airbnb to share their skills and passions and allow outsiders to feel like an insider when traveling. emily: joe, airbnb has three very involved cofounders. as the company has grown and moved forward, how do you distinguish your role, and what are your top priorities? joe: well, i think each of us is nicely settled into what our passions are, and what is most valuable in the company. i certainly enjoyed digging about the future. i run a design studio inside the company, which is a research and development team. that is where the origins of the "open home" platform began. i was thinking about how we
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might utilize airbnb's core competencies to put a dent in this global problem. emily: coming up, jack ma plays his trump card. alibaba founder delivers on a promise to create one million jobs in the united states, starting with small businesses in detroit. and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com, and sirius xm. this is bloomberg. ♪
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♪ emily: alibaba is pulling out all the stops for u.s. business entrepreneurs. the chinese e-commerce giant is kicking off a two day event in detroit, michigan right now, drawing in thousands of u.s. business owners and aiming to learn how to succeed in china, with the company's help. for the company's founder and executive chairman, jack ma, is following through on a promise he made to president trump to create one million jobs earlier this year. we discussed alibaba's plans.
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>> i think it's great what they are doing. i think they are trying to get out to american businesses, both small business owners, farmers, and agriculturalists, as well as larger brands, and they are trying to educate them on the opportunities in china, which are massive, and also get them signed up on the alibaba platform, saying, look, you have been selling in america for a long time, but there is so much opportunity in china and the economy is growing so much. you should bring business here and start exporting here. there are a lot of chinese consumers over the last 10 years with the rise of the middle class looking for interesting products produced in america. it's a great potential marriage. emily: brian, is the demand actually there? brian: that is a good question. i would separate the demand from the supply. i think there is a demand in china for american goods. we have seen that repeatedly. the question is, where will that supply come from?
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i think the conference is great marketing. it is strong politically when you think about beijing and washington, d.c. and playing to both constituencies. as a matter of practicality, i don't know how many of these small businesses will be successively selling on alibaba. however, there is demand from chinese consumers for foreign goods. emily: what do you make of that as an alibaba investor? >> i think they have to position themselves for the long term. maybe within the next six to 12 months, they don't have as many u.s.-based sellers, selling on their platform, but this is a long-term play. and when we think about modeling out the business, where we get excited is, what can they do over the next 3, 5, 10 years? if you look at some of the projections they made, and many of them are pretty ambitious, from their analyst day two weeks ago in china, they were talking about doing $1 trillion in gross merchandise value through their platform by the year 2020. that is three years from now. and i think certainly, some help they could get from american suppliers would help them reach that goal.
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so, i have become very excited, and i would agree with my counterpart here that most certainly, it might take a little bit of time, but over the long-term, i think this is certainly an opportunity for the company to capitalize upon. emily: your counterpart, the other brian, jack ma promised he would create a million jobs in the u.s. can he deliver on that promise? >> if we are looking at a 100 year timeframe, i think he could. [laughter] i don't think in the next three to five years. the math doesn't really work in his favor. that being said, there is a lot of trade that could obviously happen. what jack is doing is trying to open the u.s. market to alibaba more prodigiously than it has been. he's trying to get this brand in front of small businesses and try to make it more acceptable in the eyes of the u.s. chamber of commerce and other groups who have been battling with alibaba and some of the issues they've
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had regarding, for instance, counterfeits. emily: now, amazon made big news by agreeing to buy whole foods. alibaba has been investing in grocery for several years now. do you see alibaba and amazon now clashing on a new battle line? >> to some extent maybe, but they are doing this in very different geographies. when you look at what alibaba is doing, it is primarily in china, obviously. i don't think amazon has any plans to get in there, but who knows? and amazon's takeover of whole foods will certainly make for a lot of interesting dynamics, but i don't necessarily think that they are competitive head-to-head. i think that probably they are learning from one another's strategies, and you see that across the board. they have gotten into payments, media, cloud, so certainly they are learning from each other, but they don't directly compete in the same geography. so it is a little bit hard to say.
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emily: brian buchwald, there has been concerns about alibaba and amazon clashing more broadly. will that ever come to fruition, or no because of the geographic limitations? >> certainly, amazon has had ambitions in entering china more aggressively. they have looked for different paths as alibaba has looked to move out of china. alibaba has found greater success looking at the rest of asia and other non-u.s. centric markets. if you look at what alibaba is doing, it is taking the walmart approach. they are looking at more mass brands and investments in companies that they are in partnership with. other groups have been much more about discount marketers and large scale supermarkets, not whole foods of the world. alibaba is a marketplace, where amazon is the retailer taking principal risk. you could almost see amazon succeeding on alibaba with whole foods selling into china more so than the two of them really competing in china, at least in the near-term term. i just don't think amazon is the competitor that a tencent is for alibaba in china right now.
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emily: brian neider, as an investor in alibaba, do you feel a threat from amazon? >> certainly not. in the core china market, there are a lot of other companies doing well in china. and like brian said, certainly, tencent and jd.com are the ones that come to mind in their core retail business. but today, amazon has not really played that to the extent alibaba wants to move into the u.s. and is bringing u.s. based sellers to sell goods into china, i could see there being a little overlap, but at this point, not really. again, because of the geographical diversification. they learned more from one another than they compete with each other. emily: and that does it for this
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edition of the best of "bloomberg technology." be sure to tune in next week for my exclusive interview with the founder of four runner ventures. remember all episodes of "bloomberg technology," are live streaming on twitter. check us out. that's all for now. this is bloomberg. ♪
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carol: welcome to "bloomberg businessweek." i'm carol massar. oliver: i'm oliver renick. carol: this week, the current state of the workforce and what it might look like five to 10 years from now. oliver: how job advancement looks a lot different in asia. carol: the real reason the gender wage gap persists. oliver: all that and more on "bloomberg businessweek." ♪ carol: we're here with the editor-in-chief of "bloomberg businessweek." i love this issue.

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