tv Best of Bloomberg West Bloomberg April 24, 2016 6:00pm-7:01pm EDT
♪ emily: i am emily chang. this is "best of bloomberg west." we bring together the top interviews from the week in tech. the president of didi chuxing, the leading player in china's ride hailing space and a competitor with uber. we hear how the company plans to keep uber at bay. the third season of "silicon valley" premieres on sunday. we will hear from dick costolo, a consultant for the show, what
he has been up to since leaving twitter. as our economy becomes more highly automated, what will the future of work look like? we sit down with alec ross. first, didi chuxing. uber's largest competitor in china. it operates in 400 cities across china with over 14 million drivers. uber has a presence in 150 chinese cities. they announced a new partnership with lyft to take on uber internationally. how do they plan to keep ahead of uber in china? i sat down with jean liu. jean liu: chuxing means travel, commute in chinese.
we are serving 800 people to commute. emily: you are often referred to as the uber of china. how do you see yourself? jean liu: we are serving 800 million people with a variety of products, so that gives us a unique business model. about 2 million come from taxis. we do buses. we do china specific products that we can utilize the existing network in a more efficient way. emily: you are in 400 cities in china. what is the next phase? jean liu: the next phase is to invest more in artificial intelligence and machine learning. based on the 11 million ride scale, people should not make decisions anymore. it should be machines making decisions. the network will get smarter and smarter everyday by itself. i'm saying that because what we are facing now is a shortage of supply in china in general.
let's say in the bloomberg building here, at this second if there are 50 requests coming out, everyone wants to go in five minutes. i want to go now. what if there are only 20 cars around? you would never be able to match it. forget it. the network needs to learn to become smarter, so it can predict the demand from bloomberg building even before the passenger sends out a request. send enough drivers here so when you have demand, we can match immediately. the network will gradually learned for each particular area how many requests are coming out and how to move the drivers in time to match the requests. emily: what are the chances of expanding outside of china? jean liu: china is a huge market. we have 1.1% penetration for ridesharing.
if we get to 5.5% penetration, that gives us 16 million rides on a daily basis. that is a huge margin. from a global perspective, we think how we can serve chinese travelers who go abroad more easily? that is why we are launching the international product with lyft last week. a lot of travelers from china land in the u.s., they turn on our app and get access to service. it is only three days, but it is very exciting. thousands of travelers using it. that is our perspective. forming this global partnership so people can use our service overseas. emily: what is your relationship with regulators in china? jean liu: the chinese government has been more and more open to us.
supply issue is the top issue in china in general. the government understands we need to utilize existing resources to put into the commute system so people can travel around. right now, chinese people have the dilemma to travel, to commute around because there is a lack of existing systems to support them. that is number one. we are solving that basic issue. number two on our platform, there are 4 million jobs created on a monthly basis. there is a lot of restructuring going on. people will lose jobs. 4 million jobs means a lot. we are growing rapidly. that is the second issue we are trying to help the government. the third is the environment. when we carpool, we're pulling more people into one car. that will give us a lot of good talking points with the government. emily: when it comes to financials, what are the financials? how much money is didi losing?
jean liu: we are closer to profitability than ever thanks to the improved scale we have achieved and efficiency we have achieved. what i can share with you at the end of last year, we do have 3 billion on our cash value. -- balance. we are closer to finishing the second round at this time. we will have abundant cash on our balance sheets. emily: what do you think about the future of the ridesharing market? is this a two player market, a one player market, a multiplayer market? jean liu: for us, what we want to make sure is we are providing a unique service to our users, our passengers. i know a lot of questions will be a competition. i understand it. from our perspective, this is -- when you do hurdlers, you don't look to the side.
you run with a focus target. we think lyft is a company we share a lot with. they care a lot about community. their product is innovative. they have been growing magnificently recently. they have almost doubled their market share since last year. in san francisco, they have achieved market share of 50%. the last quarter they grow 50% as well. we are happy with that investment. emily: how many of your users have come to the united states and are taking advantage of your partnership with lyft? jean liu: it is just three days now. it is already thousands of users using it.
emily: this week, the tech world lost a giant. bill campbell died at 75 after a long battle with cancer. in silicon valley, he was known as the coach for his previous career as a football coach and his mentorship to the greatest minds in technology, from steve jobs to jeff bezos to larry page and eric schmidt. he played a major role in steve jobs' return to apple in 1997. we sat down with brad stone.
you interviewed him many times. brad: he would have spit in disgust and said something profane about this entire discussion. he was a behind-the-scenes operator. he did not seek the limelight. emily: he never spoke to press apparently. brad: what can i say? gregarious. delightfully profane. insightful, not in the traditional silicon valley sense, he did not care that much about bits and bytes. he was insightful about organizations and people. that is why so many executives and investors used him as a resource about how to structure their companies, how to deal with interpersonal issues. brad: what can i say? gregarious. delightfully profane. insightful, not in the traditional silicon valley sense, he did not care that much about bits and bytes. emily: eric schmidt said today that, "he helped us build google and made our success possible."
tim cook tweeting that "bill campbell believed in apple when few did. we will miss his love for life." he gave a memorial service for steve jobs on apple's campus. he spoke about scott forstall. take a listen to what he had to say. bill campbell: scott forstall was demoing the new phone. he was demonstrating siri. scott did it a couple of times. steve was across the room. he said, let me have that phone. scott said be careful. i have this attuned to my voice. give me the phone! [laughter] scott gives him the phone. steve asks questions. then he asks, are you a man or a woman? siri came back and said, they have not assigned me a gender, sir. [laughter]
emily: he was on the apple board for many years. he was involved in so many different companies. how did he become an invisible hand at companies that competed with each other? brad: google and apple came into war in 2011, somehow he managed to advise both companies. twitter and facebook. venture capital companies. i think it is because he was not involved in product or strategy. he operated as a kind of industry psychologist or organizational psychologist. he was a people person. people gravitated towards him. i think about a leader in war. someone who can just lead people. you want to listen to him. emily: it is interesting because, until recently, he was active on company boards. flipboard's john doerr said he suggested that he become chairman of kleiner perkins,
which he decided to do. is there anyone else in silicon valley today, a next generation bill campbell that is filling this role? brad: he was one-of-a-kind. i think we can look to people like ben horowitz or peter thiel. they have written great books that have a lot of wisdom. in terms of someone who was willing to advise a range of entrepreneurs and companies on different sides of the aisle and yet remain friends and inspiring to everyone, i don't think he will be replaced. emily: i know you interviewed him for your book about amazon. any fun anecdotes? brad: people say bezos was someone that he advised. the board sent bill campbell to fire jeff bezos back in 1999. jeff bezos told him to go away.
he did not see the magic. bill campbell correctly identified that this guy was something special. they should not displace him. he went back and told the board that they were crazy. jeff bezos has become one of the most popular ceos in history. emily: at twitter? brad: that may be true. emily: brad stone, our senior editor for technology. brad stone. "bloomberg west" will be right back. ♪
emily: "silicon valley," hbo's satire of the technology industry premiered its third season on sunday. ahead of the anticipated launch, we had a chance to catch up with alec berg and mike judge as well as dick costolo. take a listen. >> when we started doing the research for this season, we talked to people about what would happen if a guy like
richard got fired from a company like that. all the engineers we talked to, we said will the company work? they said, of course not. it would never work. we talked to vc's, and they said yes. they get rid of founders all the time. everyone had a different version of reality. emily: what was the dose of reality you brought to the writers' room? dick costolo: it would be hard to understate my influence on what you see. other than sitting in the background and saying you can totally do that. you can keep going. it is usually worse than that. [laughter] emily: is there anything where you said no? dick costolo: rarely. emily: what was it like having a real ceo in the writers' room? >> it was amazing.
we try to hew as much to reality as possible. we ask people whether or not this would actually happen. having him in the room was amazing because as we were thinking of things, we can look at him and asked is this real? emily: you are an improv comedian by background. i imagine this was fun, like a dream come true. dick costolo: 100%. it was three weeks before i gained to suggest. i would have things that i think i have an idea for a line. everyone in the room is so talented and funny, it was a while before i even. emily: you said you did draw on dick's on experience leaving twitter. mike judge: it was great because he used to be a programmer. there were occasional technical questions. what the big notes of people being fired and hired.
the ins and outs of this world. it is great having someone right there. we all read the twitter book. sometimes i would find myself going, in the book, oh no, he is right here. [laughter] emily: on that note, you and i have talked about how you had to deal with a lot of scrutiny. as far as pied piper, twitter has been portrayed in a certain way by the media by certain authors. is it as dysfunctional inside as it is portrayed in public? dick costolo: i think the reality of what goes on inside these companies is a lot different of however it is portrayed in the media. whether it is in the media as going well or really dysfunctional, the reality is completely, completely different on either side. emily: twitter is responsible for driving major changes in the way we watch television and the
way we consume media. when you were building the show, what did you think about netflix and amazon? why did you decide to go with hbo? mike judge: this started out as originally hbo pitching me the idea of doing a show about gamers and game developers. i had thought about that. that is a world where if you get it wrong, you get eaten alive. i thought i would stand a better chance against programmers. it was always going to be hbo. emily: what do you think about binge viewing? would you want to the episodes all out at once? mike judge: who knows? that is hbo's decision. there is hbo now. it is all changing.
i suppose it is possible. emily: how much creative freedom do they give you guys? >> unlimited. >> they will take all of the dick jokes we have. they don't cap the dick jokes. there is no content issues. emily: one of your writers for the movie "idiocracy" tweeted that, "i never expected 'idiocracy' to become a documentary." a jab at donald trump. are you surprised at how far he has made it? you did not expect that one. [laughter] >> yeah. i am surprised. emily: anyone? how about this, the man who wrote the twitter book alleged that silicon valley created donald trump, specifically social media. we know how often donald trump
uses twitter. what do you think of that? dick costolo: i think he understands how to use those forms. donald trump i am referring to. he is quick to tweet early in the morning, before the press cycle has gotten going. he can be in front of it. the press cycle becomes about whatever he wrote at 4:00 in the morning. i think he has an understanding of how to think about and leverage these platforms. emily: he has suggested pulling the plug on social media entirely in order to prevent a donald trump future? >> he is crazy. [laughter] emily: give us, without too many spoilers, give us a preview on the season. alec berg: we pick up right where we left off. richard has been fired. what does he do?
does he find his way back in? does he start a competing company? we do research at the beginning of every season, and those were the questions we were asking. what would happen, what would the repercussions be? emily: does the bubble play a storyline? >> it is referenced. emily: whether we are in one or not. dick costolo: i don't have any thoughts on whether we are in one. [laughter] emily: my interview with dick costolo, former ceo of twitter, along with executive producers mike judge and alec berg. jack ma weighing in on the health of china's economy. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app and in the u.s. on sirius xm. "best of bloomberg west"
emily: welcome back to "best of bloomberg west." i am emily chang. turning to alibaba, jack ma says he believes the chinese growth story will continue for the next 20 years. aligning his use in the south china morning post, now owned by alibaba. he says the rapid growth in china's economy in consumer culture could help temporary difficulties. how much of the slowdown is indeed temporary? how is it affecting the funding environment? i spoke to one of the most successful tech investors in china, hans tung. do you think the chinese economy will remain enviable for two decades? or will the slowdown have a pronounced impact? >> i think we are facing the reality that we are in a new normal situation.
growth rate has gone down from 10% a decade ago to around 6%. part of that needs to improve if consumption on internet and other things improves before we can grow again. changes need to be made to do that. everyone is watching how well they perform. emily: are you disagreeing with jack ma? >> i am cautiously optimistic. emily: what do you make of the fact that he is interviewing in a newspaper he owns? >> interesting. now, a more balanced perspective. you do have more pro-china in the newspaper. it is good to have both. emily: what are you telling private market companies in china about the environment? >> we love what internet has been doing in china the changes
it has brought. almost all our investments are internet related. as some continue to grow and serve customers well and take advantage of technology and efficiencies that can bring, we are happy with our portfolio in china. emily: are you talking about unit economics? >> we have to. we look at that. we invest in sectors. each sector, we have metrics we track. we benchmarked them against sectors. we look at how well they are doing as far as lifetime value over a 12 to 24 month period. we give them advice accordingly. most of our portfolios have been healthy. we are excited about that. emily: there has been a lot of volatility in the public markets here. that has sort of stabilized. we're hearing about startups having trouble raising money. how is this trickling down to the companies you invest in?
>> in china, in the last 12 months, there was volatility as you know. most of the companies in the non-internet space have difficulty raising money. the ones that are seeing online and mobile internet growth have done much better. emily: -- pioneered some of the features we are seeing facebook integrate into its own messaging service. would you say this is taking fair inspiration or is facebook copying the chinese? >> whether it is facebook or snapchat or instagram, everyone is looking at china. we are an investor in a company that has done very well. emily: this is a lip sync app that was completely built in china. it has users in the united states. >> you see more cross-platform opportunities.
doing stuff for global markets. emily: twitter just hired a new head of china which is interesting because twitter has been blocked in china for many years. there is a controversy about her potential bias and the chinese government. it is unclear, twitter says she is just there to help with ad sales and data. what you make of this? >> companies artists -- copies are looking to expand in china. twitter and pinterest are interested. having someone on the ground make sense from an ad sales standpoint. it is an option if facebook did get into china, twitter would have someone on the ground to look at what has happened to -- emily: are you optimistic that will happen? we know someone was presenting at the facebook conference. >> i think what mark has done in
speaking in chinese, and then he did a lecture in chinese. he has done a lot to impress the chinese government and chinese industry leaders. emily: really, i have talked to analysts that say it will never happen. >> never is a very strong word. i think exceptions could be made for the right company demonstrating the right attitude, approach, and strategy. emily: same for twitter? >> i'm not sure about twitter. emily: that was on stone managing partner at ggv capital. you'd asked me saying this week it is expanding into china. the second major international expansion after india. udacity will have machine learning as well as many of its most popular and no degree
-- nano-degree certifications to the chinese student. i started by asking why he targeted china for this expansion? >> i think the good we can do is unmatched. we look at the population there, there are very few really great universities. this is a first for education. emily: walk us through the steps. the cost to go to school, how many students your expecting. >> our goal will be 1.3 billion students, that is a lot. even hundreds of thousands or millions of student would be a success. we are intensely work getting students jobs afterwards. emily: your expecting to grow to 15 to 20 million by 2020. how are you localizing? >> we have translated 1000 classes to chinese. we have local mentors that work with our students there.
emily: are there companies you are working with in china on the ground? you work with google, salesforce here. >> we get the same perception in china we found here the didi chuxing, they are finding the best matching of drivers two passengers. we are working with jd a lot of companies to not just build content but also place students in jobs. emily: alibaba? >> we are talking to everybody right now. emily: everybody wants to expand in china. there are challenges. what are the challenges you had to overcome to make this happen? >> the biggest challenge so far has been to get the infrastructure working. the great chinese are well, in terms of streaming data from the united states.
the next challenge will be scale. to get a big customer base and defend it. emily: what about your spirits working with the chinese government? they have their own views on technology. has it been difficult, have there been regulatory hurdles? >> it has been really easy. we have strong partners for one. the most important thing is the chinese government and we have the same vision. there are talent that should be developed. it chinese town is not developed as it should be in creatively and original thinking, then -- emily: i was speaking to peter thiel who told me that he went to china and taught a class in china, he said the one thing that surprised him most was how ferociously competitive chinese students are. it actually scared him. do you think that china has the power to surprise silicon valley
when it comes to innovation and building great companies? >> i think all the crazy innovators in the world eventually find themselves in silicon valley. there is so much brain power in general that is underutilized. it is such a new country going from the 60's and 70's to today. you can really unfold yourself, get good income and a growing middle class. i think there will be amazing people in china as well. we need to find them and train them. emily: you do work with google and facebook. facebook is blocked in china. google left the company. -- country. my the chinese government have a problem with that? >> we have material that is exclusively focused on getting tech skills. we don't take commentary on political history and so on. for us, it is something that is good for people. emily: they help with your online courses. is that something the government?
>> we have zero roadblocks. they are really about teaching your android, they're not about making things searchable. emily: what about japan and korea? will you go to another region entirely? >> we're eyeballing places like south america. brazil is a large country for us today. we have a good connection to germany and japan. emily: that was the ceo of udacity who happens to be the founder of google apps and the inventor of the self driving car. as technology becomes highly automated, what will the future of work look like? we sit down with alec ross next. later in the show, stanford has long been considered an incubator for silicon valley startups. uc berkeley is looking to hop in. we will speak with that recent graduate leading the charge. ♪
emily: now to technology and automation as machines replaced humans and all kinds of workplaces, will new industries emerge? should we brace for a future of higher unemployment? the tech industry is developing a new idea known as universal basic income where everyone receives a monthly cash grant from the u.s. government. albert wenger of union square ventures has been a long time supporter of the issue. pilot projects are in the works in the netherlands. the swiss will both on a basic income referendum next year. what will the future of work look like? i spoke to alan ross, author of the industries of the future. senior adviser of innovation at the state department. you have thought a lot about this. what is the verdict? how much will technology and automation change the employment
outlook and in what industries? >> it will change the employment outcome significantly. in pretty much all industries. emily: would you say epically? >> epically. people usually end up utopian or dystopian. i think the reality is much more up the middle. later in the united states, labor markets will remain strong. it will require hibbitts and if called -- pivots and difficult pivots. i think people who have done work that is largely manual and routine, that work is going to increasingly be eliminated. the jobs for which most men in the united states work in is driving. emily: transportation. >> if you think about autonomous cars.
you're talking about literally the number one source of employmen for men in the united states. men without college degrees, it is far and away number one. there's going to be tricking us. emily: how could this happen? some people say driverless cars are happening soon. some say not for decades. >> this is a process. let's take driverless cars out of it. think about in general the combination of artificial intelligence and robotics. we are at the beginning of the next wave of automation. the last wave largely replaced the labor of men with strong shoulders working in ports, factories, mills, and mines. we are looking at labor being replaced is cognitive and nonroutine. people who go to work wearing white shirts and suits, that is already happening. we are going to lose upfield million jobs over the next -- a
few million jobs over the next couple of years. the question is in america are we the headquarter cities for ai? do we export robots to the rest of the world? is this a source of growth here and tension elsewhere. emily: what do you think of this idea of universal basic income where everyone gets fixed some of money a month? >> i think it is good that people are talking about this. i give albert wenger from union square ventures and some almond -- sam altman credit for thinking about it. the last expansion of an entitlement program we had was obamacare. people went bananas over that. universal basic income is obamacare times 50. it is good that coastal elites are beginning to think about this and study this. they were also supportive of obamacare. if you look at the angry
reaction to obamacare among the working class, middle-class americans. multiply that by 50 and you have the response to universal basic income. emily: you would say it is completely unrealistic? >> for the next 10 years. as technology changes labor and as we have a technology that economy that produces more billionaires and super wealthy people along with higher structural employment, the unemployment, resistance goes down. it is going to take a wild. the labor patterns have to shift. emily: you work for hillary clinton. income inequality has been a huge issue in this election. what does hillary think about this? >> it is why she is running for president. emily: would she support universal basic income? >> i think she is in favor in strengthening safety net rents. -- programs.
her big problem right now, all democrats' problem right now, it is not getting new programs. it is strengthening existing programs in place. keeping them from being gutted by the far right. she has to play defense and protect the programs we have. emily: what about the left? the new york primaries is happening now. are you surprised by the continued momentum of bernie sanders? >> i am. if you told me two years ago that three of the four remaining candidates for president would be two fascists and a socialist, i would be surprised. the right is going further to the right. the left is going further to the left. i am absolutely surprised. what is important, and i don't agree with fascists or socialists, but to understand where the support comes from and why people are supporting fascists or a socialist. emily: my interview with alec ross, author of "the industries
i have worked the last five years with faculty and we have accelerators focused on verticals. we have over half a million alumni and over 35,000 students so you have this vibrant ecosystem. emily: is the university getting equity stakes in these companies? >> not currently, but we are going to give a big portion of the upside to support entrepreneurship on campus. we are already supporting a
number of startups today and have made six investments. emily: stanford has been criticized for being too friendly to entrepreneurs, perhaps to the extent that there is a conflict of interest and the university does get a stake in startups that come out of there. do you think that is fair? >> one of the things we have seen in the berkeley community is startups have created tremendous value and have gone on to exit in ipo's. as a community they have never captured any of that value. our lps are alumni by design, serial entrepreneurs, angel investors, tech execs, and they believe in the opportunity that they want to invest and they believe they can help in other ways.
you will the community is will you capturing this value and they can say, cal wrote me an my first check. the companies will the next and -- more inclined. emily: stanford alum started google, snapchat, yahoo!, and stanford shouts that from the rooftops. what more do you think berkeley can do to create a network like that of their own? >> we need to get the alumni out shouting loud and proud. there are some incredible companies founded by cal alum, with over a billion dollars. there are also companies founded by students on campus. they are growing very quickly. these companies are out there and how alone should be shouting about it. emily: that was the house fund founder jeremy fiance.