tv Best of Bloomberg Technology Bloomberg March 10, 2019 5:00pm-6:00pm EDT
♪ emily: i'm emily chang and this is "best of bloomberg: technology." where we bring you all of our top interviews. coming up, the social network is becoming less social. mark zuckerberg says he thinks the future is a more private platform. plus, the promise of the green new deal. congresswoman alexandria ocasio-cortez is making waves in washington and beyond. we speak to her chief of staff
about how they plan to push for change despite the opposition. and we dig into the new york city tech ecosystem as amazon pulls out, are investors still bullish on the big apple? first, mark zuckerberg, who has spent his career pushing for more open communication says the future is going to be more private. in a blog post on wednesday, he declared the future product development will be focused on encrypted and ephemeral communication. he wrote quote i believe the future of communication will increasingly shift private, encrypted services where people can be confident what they say to each other stays secure and the message and content won't stick around forever. this is a future i hope to bring about. this comes amidst heightened scrutiny of facebook's data collection practices. michael wolff and sarah frier joined us to give their perspectives. >> there is a little bit about increasing that trust of users.
around privacy. but in my opinion, a lot of it is about the fundamental problems that are facing facebook today, the public scrutiny and government scrutiny over privacy. also, the problem with content moderation. if it is encrypted about -- if it is encrypted, facebook can't even see what people are saying, therefore does not have to fix it. of course, the zuckerberg frames all of this is something that users want, he says users really want communication. -- really want more private communication. this is the fastest growing aspect of our business. we are doing this because of their demands, but it is worth noting how it affects the perception problems. emily: can we trust facebook to make it more private. >> mark zuckerberg talks like going from the digital town hall to the living room. the problem is i'm not sure if people do trust facebook. he is saying it because he recognizes this challenge. but in reality, what they're
doing is talking about protecting the privacy of people in a broader conversation. not necessarily privacy versus facebook. facebook is ultimately in the advertising business. emily: you are still giving them all of your information. >> the battleground will be around messaging. you look at facebook controls between messenger whatsapp and instagram, they control the majority of messaging around the world. that does not mean that people concerned about privacy are not going to go to other platforms -- let's not forget, we checked, which dominates, does not have a to stay in china. some of the things he is doing is purely defensive end users are going to be very skeptical. emily: talk about what he said. he said that services would be opt in. and if you want your messages to disappear, maybe they can disappear.
how is this going to look or feel different for a user? >> think about the position they are in. they are being scrutinized by governments around the world who say they do not give users enough choice. zuckerberg has always thought that if we give people choice, they probably would pick an on advertising supported network and they would pick to post publicly. a lot of this won't be as big of an impact as we think. that said, he was very eye -- he was very deliberate about explaining and that everyone has been using instagram stories and parts of the service that only last for 24 hours. he wants to bring that kind of disappearing nature to the content. becomes more of a rotating version of you. less of a permanent record of your life.
emily: you have done a light ton of research on digital and advertising. many think changes like this, no matter how they are put into practice, will affect facebook's business? >> a lot of it enables advertisers to target a very finely. to find specific groups of people and their interests. they will private a lot of it is unlikely to affect in one facebook's advertising in business, in fact, it and could enhance them. challenge is that andbook is going to emerge design a broadcast platform, which is where a lot of the problems were. a lot of the information took place in that broadcast.
they're saying it will be more one is private. a lot of users are going to you wonder to see what happens. ironically, facebook began as a private platform, something for university students to talk to each other. and in order to become a commercial you will enterprise they had will and a lot of the open up and you and the door. you are we can expect it would in be engineered and only all of it. there enhanced facebook's advertising is any business. emily: facebook won a freeze on need blankfein regulator longacre train some of their disclosures and in washington dc in a problem you privacy lawsuit are the attorney general has been suing the company to more than i working in a protect you are in consumer data. what does this mean? >> facebook has had a lot of big document leaks from governments or news reports. this is a small victory and a bigger picture. the company is going to face regulators and lawmakers. this is the year when it is going to happen. they need to be proactive about coming up with solutions before the government comes up with solutions for them. i think that is how that ties already into the new year today
in a were facebook is coming out are and saying we will give them in the more choice, we have heard them and are listening but like michael said, it will be in service to the advertising business. emily: what is your outlook on instagram, whatsapp, and whether users will keep though there is a coming back? are they so large users don't big bell have a choice? or will these privacy issues ultimately be the downfall? engagement on instagram far surpasses that on facebook. because they are younger, there are less concerned about and privacy and the content shared does not have the same level of depth. they will be less vulnerable. facebook itself, we should expect that lots of people will continue to be skeptical and made share last. and then you look at whatsapp i and messenger, and there is really no barrier to entry.
you can get up and running on a new service and that is where facebook may be the most vulnerable. we may see a new wave of social splinter as a result. emily: that was activate ceo michael wolff and bloombergs sarah frier. tesla blind-side, elon musk caught many by surprise when he and announced the carmaker would shutter most of its stores and move sales online. we tell you what's happening behind the scene. and if you like bloomberg news, check us out on the radio, our app, and in the u.s. on sirius xm. this is bloomberg. ♪
and were completely shocked. they were blindsided and that was made clear by the news that this was posted publicly. they found out about it, and apparently they found out with the media. many people are sending me an email saying -- thank you for writing this and for capturing how we felt. it is just stunning. emily: you reported there is a story in honolulu closing. and a store in palm springs. >> our understanding was that musk would be evaluating the stores. but it is clear that the low performing stores or stores without traffic are closed. emily: let's talk about the traffic from investors? they have recovered a little bit from their lows today. we spoke to investor who sold one all of his shares, this investor also tweeted that it
pains me to say this, but we have sold our position in tesla for our advisory client. i believe the decision to close retail stores is a bad one and points to a weakness in sales. and financial strength of the company. is that what most of the negative or pessimistic investors are telling you? >> it is important to note that alex lives in pasadena, owns a tesla, and has a very pro-tesla for a while. as a manager, he has a fiduciary responsibility to his clients. this decision to close the stores was a complete 180 from what tesla was trying to do if you look at their regulatory filings. emily: last quarter, they opened multiple stores, including more than they had in any quarter in a year-and-a-half. they also touted their retail strategies. it does not seem like something tesla was considering for a while. it certainly does seem like it was an abrupt decision.
>> that is what caught investors off guard. to be clear, there is an argument to be made that americans are shifting most of their purchases to online. there are a lot of dealerships and startups trying to help dealers with the online sales process. so it is not unreasonable that tesla would want to experiment. with online sales. it is to announce they are completely shuttering most of the stores. and switching to online only. that really caught people by surprise including the staff. emily: i do want to talk about tesla's employment worldwide. they employ almost 50,000 people. looking at this chart on the bloomberg, headcount has been increasing significantly. year on year. they are reporting new information that there are now dozens of jobs going to go away at the fremont factory tell us the very latest in terms of how
many jobs are actually going away. >> sure. in january, tesla did a 7% reduction in force worldwide. on the callhen they announced the pivot, musk announced they would be laying off a lot of the marketing people, but hopefully shifting some positions either to stores remaining open or service jobs. 's dana hull.erg we talked to another guest who remains bullish and thinks must is misunderstood. -- and thinks elon musk is understood. >> i think the mistake people are making is that elon is writing down a technology cost curve. prices should fall, they're going to fall and continue to fall because battery pack system prices are coming down. emily: even he says making a car at this price is excruciatingly difficult. >> we talked about that, we had a podcast with him. emily: you and your colleagues
flew out to fremont and sat down with him in person. >> yeah, he walks in, and first thing he says is traditional automakers, they are just unbelievable in terms of the ways they cut costs. what i said to him is, that's fine, but they have not been writing down a technology cost curve for a century. you are writing down this battery pack system cost curve. your prices will fall and continue to fall as theirs rise. what he said on his last earnings call was that the demand is there. people can't afford the high end prices, so he is bringing prices down. emily: but, can tesla afford to deliver the car at that price? >> i think so. you see the restructuring she is -- you see the restructuring he i think it is very sensible. i think he is making these moves
to scale more quickly than he otherwise would. these price points are very attractive. emily: so you don't have any concerns about him closing stores, shifting everything online so abruptly? and laying off people? >> it was abrupt. we got the sense something was up because he is still competing against other auto manufacturers. who have their costs screwed down. at some point, his pricing is below theirs,down well below theirs. battery packs are down, he's got the deep learning chip which will help him with autonomous vehicles. you know the story we are telling, but we are not concerned. emily: what was your impression meeting him in person? >> i think people misunderstand him completely. i just reflect upon the clips about joe rogan's interview. there was one clip. emily: the interview where he smoked pot? >> that is all people saw.
shame upon the news media for not delving into the content. emily: to be fair, you don't often see a ceo smoking pot in an interview. >> that was provocative, fine. but there was a two and a half hour interview, real content. and his brilliance was shining through. emily: what is your outlook on demand for the model three? demand, as prices come down, will be explosive. on our podcast, and in our models, we believe that ev sales as prices continue to come down will scale from 1.3 million globally last year to 26 million in five years. i asked elon what he thought about that? he said -- well, you might be off by a year or so, but yes,
we are talking about exponential growth. exponential growth happens because prices come down. this is a technology cost curve. those who follow traditional auto manufacturers have not seen one of these for a while. they do not know how to relate to it. they assume that cutting prices means demand is not there which is absolutely not true. emily: what is your outlook for the rest of the faang stocks? we have seen hundreds of billions wiped off the market caps of these companies. where do you see the positives and negatives? >> you are right, they are all different stories. i don't know why we lump them into this acronym. we don't own facebook, for the most part right now because we think they have got a loss to work through in terms of privacy. any time the regulators start going after an industry or a company, we kind of pull away for a while.
it is true that they are one of the few places for online advertising. as is google. but now, we see amazon advertising pretty aggressively. its advertising sales are screaming. i think they are -- the whole online market is growing quickly at the expense of television. we are not worried about that, whenever i see regulators going after a company, and i see what they are trying to do with blockchain technology -- they probably want to get more information on people but allow them the privacy. they are even trying to invest in this themselves. emily: you think there will be a crypto revolution? what does that mean especially
as crypto has not had a great run? >> they had a great run. bitcoin went from less than $20,000 to less than $2000, and it's now back at three or $4000. what happened was bitcoin's share of the entire crypto asset network value or ecosystem in. -- increased. that told us that bitcoin is the reserve currency for the crypto asset ecosystem. that is a huge role. last year, $1.3 trillion worth of transactions were on the bitcoin network. why? venezuela, and b2b, business-to-business. in africa where it is prohibitively expensive to trade from one currency to another. the average transaction sizes about $14,000. that is pretty amazing and this technology is only 10 years old. we do think there is a crypto
asset blockchain revolution underway. emily: that was ark invest ceo cathie wood. coming up, how this real estate company is creating its own pipeline of female talent. later, progressive politics. in the short time alexandria ocasio-cortez has taken center stage in washington -- we speak to the chief of staff about her agenda. this is bloomberg. ♪
emily: when bridget joined real estate tech company redfin , in 2011, she was just one of a handful of female engineers. she was promoted to the chief technology officer, and within a few years, women accounted as one in three of the engineers. she trained women with nontraditional backgrounds and even recruited women from their own marketing for engineering roles, teaching them all how to code. today, the company is making more money as a result. i highlighted the story in the
new afterward of my book broke -- "brotopia." which is out now in paperback. the author joined us from seattle to discuss. >> something we did is look for women working in roles adjacent to software development. for example, someone in a technical marketing role and we used all of this training we had built to teach them how to build software at redfin. what we found is that it's much easier to teach someone how to code that is to teach them how to be a decent human being, someone who can work collaboratively. these women are doing really well and it has been a huge competitive advantage for redfin. we are able to recruit engineers from pipelines that other people cannot. emily: instead of complaining about the pipeline, you created your own pipeline. how did you know it was really working and that these women could go on to be successful? >> one thing is that we measure everything.
we are a very data-driven company and we look at everything about our numbers, our numbers on gender diversity every time we go through a promotion cycle. we publish data on our pay gap publicly. by looking at these numbers, we can really see progress, really see people getting stuck or if we need to make adjustments. emily: in addition, you found that this paid off from a business perspective and you were working on your home touring products. it had taken years to get it right, it still was not quite right. somehow, when you added women to the team and built a more diverse team, you ended up making an extra >> we have been $30 million. working on this process for years. we built all the software and kept tweaking it, but just kept finding that our agents were not adopting software. and then we assigned a new team
with more gender diversity. from day one, they took a completely different approach. they said we are not going to build anywhere software. we're going to step back and listen to the real estate agents. we are going to spend time with them, see how they are using the software. this give them a whole new set of ideas that they never would have gotten had they not taken that empathetic approach. we have seen is that when you build a team of people from different backgrounds, they have to listen to each other, they have to stretch more and that means we build better products. emily: what can other companies learn from this? >> yeah, so, it really takes a lot of small changes to make your company more diverse and more inclusive. we have almost thought of ourselves as these diversity mechanics that are crawling over everything we do, develop careers. you and how we run meetings. you have to settle in and be prepared to make a lot of small changes along the way.
if you want to build a more inclusive company. emily: i want to talk to about other tech initiatives. at redfin, you have got your instant offer service, these algorithms that everybody wants to know how they work. how exactly do you decide how much a home is worth? what data are you using? >> we have an incredible data set. we have information about how people are visiting the website, how they are looking at homes but because we are a real estate brokerage, we also have agents walking through homes making offers. we know which homes are being toward and which aren't, so it gives us this rich data set to see how people are reacting. that means we have been able to build the most accurate home value estimates in the industry. emily: coming up, alexandria ocasio-cortez is not completely ruling out amazon coming back to new york. we hear from her top aide and
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♪ emily: welcome back to the best of bloomberg technology, i am emily chang. the green new deal is a sweeping proposal that outlines solutions and strategies to combat climate change, reduce income inequality, provide health care to all americans, and much more. there are two resolutions for the legislation sponsored by senator ed markey of massachusetts and newly elected congresswoman alexandria ocasio cortez of new york. the representative has captured the attention of the nation since she defeated a 10-term incumbent by double digits, becoming the youngest woman to ever serve in congress. to discuss the congresswoman's
agenda, we spoke with her chief of staff from new york. she is actually presenting really new refreshing ideas. you see her week after week, month after month, putting new options on the table new ideas course of thee conversation of what we thought possible. we saw that from the green new deal, to the marginal tax rate, to even things like health care and other policies. she is really pushing the debate, and people are engaged. it turns out people in the country want to talk about policy. emily: everybody talks about her social media. she has taken over twitter. but a lot of lawmakers are on twitter. what makes her so special? >> i would say again the content, the thing people engage with. emily: she is also unafraid? >> she is also unafraid. that is part of it, when you are pushing bold ideas, you have to defend it on its merits, and you got to argue it. she used twitter as a platform
for communication, two-way communication, not just one way communication. emily: let's talk about the merits of the green new deal. there are a lot of folks who say it is just too expensive. how do you respond? >> i find that funny argument. this is a gigantic investment. we always talk about the green new deal as a mass scale economic globalization on the scale of world war ii. there are all these plans about decarbonizing the economy. not even talking about the cost -- if you look at the cost of action, of investment, there are examples in our history. the interstate highway system, for every dollar spent on that, we made $6. during world war
seen. project drawdown is another example. they have one version of how you can get to a fully decarbonized economy that will make $3 trillion. it is a big upfront capital investment. coming from amazon, i understand that. emily: let's talk about amazon. she was vocal about hq2 not coming to new york city. folks say that this would have created a lot of jobs for a lot of people in queens and now it is not happening. >> sure. emily: isn't that a loss? >> what she was vocal about was the process by which it happened. the deal was sort of sprung on the community without any input. whenever these companies come in without community input rents , go up, there is a human cost. emily: but isn't there going to be a cost now that they are not coming? guest: amazon chose to walk away from the negotiating table once the community started demanding to be heard. amazon said no, we are not going to have it. they stepped away. if we can do it through a community process, if there was a way for the community voices to be heard, i think that would have been a better way to do that. emily: would you welcome amazon back if they had a change of heart? governor cuomo is trying to back peddle.
>> we have a community process but i don't know where the talks are at this stage. emily: let us talk about her tax proposal. bill gates has downplayed what he called extreme proposals, not singling her out specifically, but he did tell the verge this. "i believe u.s. tax rates can be or progressive now you have the politicians i said are so extreme that they know that it is even beyond. you do start to create tax dodging, disincentives, and an inset -- incentive to have the income show up in other countries. we can be more progressive without threatening income generation. what you have left to decide is how to spread it." >> there are two pieces to it. our top marginal tax rate has been as high as 90%. the greatest periods of our growth have been much higher than what it is now 70% or 80%. , you have economist like paul krugman saying that 70% is just about right. that is where the top article tax rate should be. she didn't pull that number out of thin air. this is what economists have
been saying we need to get to to fight the rampant inequality. second piece, if you do do a big development program like the green new deal, you grow the economy, grow the pie, if all of that is being captured by a few people at the top, sort of what we saw in the recovery from the recession -- we saw about i think 90% of new wealth was captured with the top 10%. if you do that again, all you will do is have a few people get really wealthy and the majority of people not seeing economic benefit. it is necessary that if you do generate wealth, you are spreading it equitably. emily: this proposal would only cover a fraction of the initiatives she has proposed. how does she plan to cover the rest? >> there are all kinds of ways to pay for wealth generating investments. deficit spending can be one way. it is sort of the same where we
paid for the massive wealth in world war ii, the green new deal, the republican tax cuts, the way we paid for getting the recovery after the recession. there are other examples in other countries, for example, the european central bank, they invest using that bank and make money back. nobody asks, how are you going to get the money to pay for it? you can pay for things when you make money back. emily: president trump has said that the left has embraced socialism, total government domination. saikat: when republicans have no attack to make, they just start calling everything socialist. they called medicare socialist. they called social security socialist. those things worked out well, so maybe they should keep telling everything socialist. it will work out. the thing that is particularly frustrating about that is if you look at sort of the system of economics we are talking about, the way to get the green new deal accomplished, they're way
-- it is incredibly american. it is the moonshot, it's what alexander hamilton talked about. it is really more like a return to the american system than it is whatever trump thinks it is. emily: does the congresswoman plan to endorse anyone in the 2020 race? saikat: she plans to hear them out for sure. emily: will she pick a favorite? saikat: we haven't even had the debate yet. firstthe thing we are excited about is actually a debate of ideas in the democratic primary. that is so interesting. you often get into these personality conflicts, a debate of who is what, but right now all these new ideas are coming out, from you know, elizabeth warren's childcare policy and others, and we just love it. emily: does she see room for less -- room for centerleft folks in the democratic party? saikat: it depends on what centerleft means. if by centerleft we talking -- we are talking about people who are really out of touch with where the people, talking about policies like medicare for all, 70% of people are for medicare
for all, and if you look at the democratic party, it is like 90%. so the centerleft should be strongly for medicare for all. right? but then if you are going to have this fringe group of conservative democrats that don't represent where the people are, who aren't presenting new ideas, folks like howard schultz, she is not a fan of howard schultz because we aren't hearing a single new idea from him. if he had an actual solution to a problem we face that would be , good. if you have a real solution, we are willing to debate on that. but if you don't bring any ideas to the table, then sorry. emily: that was the chief of staff for representative ocasio-cortez. huawei in court, the cfo now knows when her extradition battle against the u.s. and canada will start. we will discuss the latest next. this is bloomberg. ♪
emily: may 8. that is when exhibition hearings for the huawei chief financial officer will begin. she appeared before the supreme court of british columbia. the u.s. alleges she perpetrated bank fraud. this comes after the telecom giant plans to sue the u.s. government. huawei says the u.s. is out of line by trying to ban its 5g networking gear. huawei is also suing the canadian government for violating her rights. latest.ssed the >> this is a multi-pronged counterattack by huawei after pushback of course from the u.s. byis a pushback or campaign huawei on the legal front and we have outlined some of those cases there, but also on public relations front as well. that is why they have invited journalists down to their campus in shenzhen. they have opened up some of
their labs, they have taken us on tours, trying to show themselves as a company that is open and operates privately and separate from the chinese government. on the legal side, as you say, we have heard of course that they are looking to sue the u.s. government over what is effectively a ban on carriers that are using their equipment. we have had that case in canada, where meng wenzhou has sued the canadian government for what she claims is a violation of her rights. so it is a push on the public relations side as well by huawei who are now trying to commit themselves to argue against the u.s. campaign. the u.s. is trying to push its allies to push back and out and ban equipment from huawei, saying they pose a significant security risk. emily: how is this deal being covered in chinese media? tom: well that is interesting.
they clearly are watching this very closely indeed, watching the machinations of meng wanzhou in canada. i think it is fair to say that there has been an outpouring of support for huawei's cfo. the flip side of that is you have two canadians who were jailed in beijing in black jails or secret jails, no access to lawyers, the lights on 24/7, and very little consular access. the concerns about those canadian individuals were articulated outside the courtroom in canada a few hours ago. in terms of the, what is being written in the press here, they have to be careful about how they portray this, but certainly, there is sympathy for meng wenzhou. and there is broad support for huawei as well as the company, i think it is fair to say. reporter: how about u.s. allies? the u.s. government has been trying to argue that huawei is a
security risk. how is this being perceived by u.s. allies who are being lobbied by u.s. officials? tom: this is a real conundrum particularly for countries like germany, like the czech republic and like poland, who are wrestling with these issues. they want to have access to what is a cheap and high-performing gear from huawei, but they have to maintain the security alliances with the u.s. and we heard from the likes of mike pompeo and vice president mike pence saying that if you were to incorporate huawei technology, maybe the u.s. wouldn't be able to do business with you, that it could affect medications between the u.s. and those countries. this european debate is well underway. companies like the u.s. have their own system set up with gc hq overseeing some of huawei's code and its hardware. others may be looking for that as an example but clearly the u.s. is determined to pressure
its allies to block huawei as much as possible. emily: coming up, new york's tech scene is growing up, venture capital investment is ballooning homegrown startups , are beginning to find multibillion-dollar exits. we will talk to two new york-based venture capitalists about the current climate. next. this is bloomberg. ♪
emily: 2018 was a historic year for venture capital. according to pitch book and the national venture capital association, vc firms spent roughly $131 billion across 8000 deals last year, but will that trend continued this year? our guest joins us from to -- from new york on wednesday. >> at the end of last year we saw yield curve inversion and concern about slow down. but you know into the first quarter of this year, we haven't
seen that slowdown. the deals are just as competitive as last year, funding rounds are as big if not bigger. more deals being preempted. emily: what do you mean by preempted? >> so before they go out to market, someone will come in and give them a term shader, give them the deal. emily: [indiscernible] >> that is a good question. i think so. more fundsre and being raised. they are bigger and bigger. while softbank has invested big dollars in 2018, i think the bulk of the funds increases in the last year or so will make up for that. emily: are you at all concerned about the political uncertainty tied to the economic uncertainty given the election cycle and what is going on with china?
>> so in the private markets, particularly venture capital, we keep an eye on that, but we don't necessarily see those months until 18 they hit the market. some: let's talk about things. we have lyft on track to go out potentially in a couple of -- i knowr, pinterest you can't talk about its mix of the, but what is your -- talk about it specifically, but what is your outlook on this year? beth: it is shaping up to be a big year for ipo's. what makes me excited as an early-stage investor is we generally see after a wave of ipo's a lot of innovation. so the people who are building and scaling those businesses, coming out and thinking of new businesses and starting those businesses. so i think we will continue to see a bunch of innovation in 6, 12 months out. emily: you have an interesting
background because you worked at fab. you were the coo of fab, you worked at etsy early on, and you are an investor in pinterest. you see the best and worst of who you are competing with. amazon and other retail giants, what do you expect to happen in the e-commerce landscape over the next year? it seems like we're seeing a rise of these niche players who can compete against amazon, but you wonder for how long. beth: yeah. so when we are looking for companies, we are looking for those companies capturing the hearts and minds of the consumer. something that has differentiated, something that -- amazon is not doing right now. we are seeing a trend to investors having a closer eye on profitability and sustainability. and so -- emily: are they, though? lyft is losing as much money as it is making. [laughter] beth: but that is not e-commerce, right? especially in the e-commerce space, it feels like there is scalingcaps on the
pieces of some of those companies. there's a little bit more. emily: 8000 vc deals last year, 2% of venture capital funding went to women-owned companies. of those 8000 deals, i mean -- beth: very few. emily: a fraction. do think that will change in 2019, or do think it will take longer? beth: i hope so, but i think it will take longer. emily: what are you doing in your firm to try to make sure you are seeing women entrepreneurs and servicing all these people who have been overlooked? beth: one, we are spending more time sourcing and also having someone like me, which looks like some of those female entrepreneurs helps that pipeline as well. and you know in the last year, we have increased the number of female founders we have backed. emily: all right, so just quick 30 seconds, what are the hot trends in 2019? where will he be putting your money? beth: spending time in the
consumer space but also the backend of businesses supply-chain, customer service, , hr. how do we get the companies up and running and continuing at scale, and thinking about profitability also making them , more efficient? emily: lyft is targeting a public valuation of $20 billion to $25 billion for its ipo, based on its fast-paced growth and despite mounting losses, making it one of the biggest tech public offerings on track so far this year. the managing director joined us from new york to talk about lyft and more. >> i think the existing shareholders it gives them a , path to liquidity, and that is great for them particularly the ones who came , in earlier. drivers are being offered the ability to buy stock, and i think that the business model will have to change in favor of the drivers, give them more money. the company has lost $2.3 billion in the past three years. lost $900 billion last year.
emily: that is a lot, they are losing a most half what they bring in. eric: that's right. the top point is like $2.2 billion, so maybe $3 billion this year. so no question it is a good company, but it is hard to understand from vs1 what the profitability model looks like. and what the unit economics look like in order for this company to be profitable. emily: investors are used to giving tech companies a pass, but is this an extreme amount of money to be losing proportionate to what they are bringing in? >> to me it is, and we were talking about uber which loses even more money. emily: do you think uber's model looks worse? >> it is the same model except it is bigger. emily: but they have different businesses, they have ubereats, they are more penetrated in self driving, flying cars. >> all of these are investments. lyft is getting into scooters. all of that requires a lot of
capital, a lot of investments. it is not clear why the core business can't make money. emily: so where are you investing right now? >> we are primarily invested in new york-based companies. we reflect what new york is good at. we have a large portfolio in direct-to-consumer commerce companies. we also do a lot of, we are starting to do a lot of digital health. new york is a big center for health care. there is a lot of great ideas to simplify health care, give better care to people more directly, bypassing different kind of levels and intermediaries. ininvest in ai, we invest automation in general, we kind of reflect what new york is good at. emily: he also took over binary capitals portfolio, where justin caldbeck was ousted over sexual harassment allegations, the first investor to be exposed in silicon valley's metoo. why did you decide to take over their portfolio?
lp's askede of the if we would take over the binary . we have experience in that because we managed the success of two of the softbank early-stage funds, too. we learned that it is complementary to our business. we can attach it to our back end, to all of our compliance and audit, and we can supply a lot of support to these portfolio companies. emily: did you feel like there were any ethical issues that you -- or more that you were rescuing these companies that didn't have anything to do with this? >> the ethical issues, they were part of the old lp-gp relationship. none of that transferred over to the new relationship. we look to the portfolio and we felt it was very complementary. we had at least one company in veryn with binary, successful company growing very , fast.
so the question was, can we add value, can we really get these entrepreneurs back on track. and -- emily: dia, what do they make? >> is the leader in the plus size women clothing category. emily: they are killing it. >> it is a huge category. they are very successful. emily: is hq2 a huge loss? >> i don't think so. it is a lost opportunity. new york city, like all big urban areas, have to become a tech city. tech is going to replace our traditional centers of wealth like wall street. by losing out on the capability of bringing in 25,000 people plus all of the adjacent jobs that it brings, all in one go over the year, it is a big loss. emily: new york has a thriving tech ecosystem but still does
not have a $10 billion tax -- tech company. maybe that is not the right metric, but when does that happen? eric: i don't know if it will happen with that kind of prediction, but we least ten $1 billion companies. emily: i am going to have to count them to make sure you're right. eric: and many more. there are a bunch of really successful well-funded companies coming up in new york and maybe out of those -- emily: what about wework? very controversial company, but -- >> no, i think wework is a great business. yes, wework might be the very first. i don't know if they will go public this year, maybe next year, but they have the potential of being one of those. emily: eric hippeau there. that does it for this edition of the "best of bloomberg technology." we will bring you all the latest in tech throughout the week. you can tune in every day, 5:00 p.m. in new york, 2:00 p.m. in
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welcome to daybreak australia. i am haidi stroud-watts. ramy: i am ramy inocencio. ramy:sophie: i am sophie kamaruddinsophie:. we are counting down to the major market open. haidi: here are the top stories, making progress, china says trade talks are moving forward with meaningful discussions and general agreement. theresa may facing another difficult week. her brexit bill is expected to fail again and reports say she