>> welcome to a special edition of "bloomberg west." we are alive at the next big things summit, and we're are bringing together influential investors and entrepreneurs. it has been eventful few hours so far today. >> a tornado is even picking up. it is beautiful here.

a lot of cross disciplinary sharing of ideals coming out today. >> we will be speeding up drones. >> the kitchen thing is interesting. there has been a lot of cooking, and he is using social media to grow his business and share his message of food. we will talk about how he does that while a cook up in the kitchen. >> the fusion of technology and culture, talking about the genesis of beats. >> there was a very heated debate about any quality.

i spoke at length with the head of social capital partnership. ron conway stood up to challenge him and challenge some of the things he said. i do want to get to the news of the day. marcus leaving paypal to lead the messaging app. >> he seemed like the heir apparent. paypal has never done better than it has been doing lately. it is growing much faster than the rest of the ebay, even though they are investing so much into it. it is shocking to see him leave that company. but the guy is well respected in silicon valley. it is a testament to mark zuckerberg in his ability to recruit some of the best talent.

>> he had a quite heartfelt post in leaving. it is interesting, he will not be leaving whatsapp, that is completely separate. they have 200 million monthly users, 12 billion messages shared every day. the numbers are enviable for any startup. >> i was on with trish regan when the news broke, and she was talking about carl icahn's take that the company should be split. with the faster growth of paypal, they might have had evaluation, but also much greater reward for the people that worked there. carl icahn made the point that by being part of ebay, it does

not get the best and the brightest because that big lottery ticket the stock options is not as lucrative. and now david is going to a company that has the kind of growth we have seen out of facebook. >> i wonder if this is a big loss for paypal. should paypal be a separate company? a lot of the paypal mafia believe it should be. >> one of the things that david said in his facebook post, there's also a link on linkedin, he says that the team was so deep that paypal that not only was it a ton of people working there but the manager team was so strong that he thought this was a good time to leave. >> we will be watching to see what he does at facebook, personally recruited by mark

zuckerberg. we want to talk about that inequality story. a lot of people have been talking about what is the solution? that is what i started off asking about. he is an interesting thoughts about more systemic solutions to the problem, trying to fix the political system. bigger picture kind of solutions. ron conway stood up and told him he was wrong. take a listen. >> i live in the city of san francisco, you live in palo alto. you said the city of san francisco -- [indiscernible] that is false. the city of san francisco is tenant approved.

you ridiculed -- how dare you -- put out a mandate for 30,000 new housing units. >> all i was talking about is that you can create very simple economic measures to fund all of that and more. that is all. >> then you said -- you recommended one percent of the equity. >> test a choice. if you want to be in the city went back you ridiculed -- >> ron. ron. listen to this.

if you wanted to be in the city, there are all of these people in the city right now that are really frustrated. all you see it with the riots. all i'm saying is -- >> [indiscernible] >> all i am saying is there is a ton of people that feel like they are getting push out of subsidized housing, that feel like -- >> having a mandate in every city -- [indiscernible] >> i think you have to see the follow-through. all i'm saying you can find economic framework to solve these problems. you could provide another kind of tax that says this is a subsidized housing tax, and we want a piece of your equity. and the company can choose to not be there. but if that comes home, imagine more units that could build. imagine how much free education they could get. this is about making what they

are doing an order of magnitude more impactful. that is all i was saying. >> last point -- you ridiculed them for not being generous. you don't know what you're talking about. >> they could have taxed them $10 million and they would have paid. >> and angel investor ron conway said the mayor should resign. it took significant offense to some of the things-- >> he was a major fundraiser for the mayor as well so he is all in. this notion of technologies role in changing the way that the city behind us is shaping up and

changing cannot be underestimated. we see that happening throughout the city. >> it is certainly a debate that is very important. very much far from over. we were talking about it following that interchange, and somebody said perhaps the solution has been piecemeal, but what he is saying is systemic and harder to accomplish. >> someone else came up to me and said ron conway is ron conflict. >> coming up, we will be bringing tech into the kitchen. ♪

>> welcome back to "bloomberg west." we're live at the next big thing.

we're not just talking about technology, we're talking about the fusion of technology and cooking. social media and cooking. cory johnson went to the kitchen. >> i am here with the chef at two great restaurants. coconut is of note because it has been nominated for the james beard award of the best new restaurant. >> social media is so important. they want to know what is going on our everyday life, so as we are building this restaurant, we have 3000 twitter followers and thousands and thousands on instagram. they can watch us work on the dish and watch it from here to the menu. >> is the food what really draws

social media? >> my daughter is part of it, but the food is the most important thing. you can batter this shrimp, and the social media folks like to know how you take something that everybody understands and present it in a new way. this is new technology. >> what is in the batter? >> chickpea vodka, it burns off in the cooking. and our customers really want to

see how we take this and how does it work at home? people get freaked out about technology. >> people who work in the kitchen love to buy new stuff. >> if you look at the volume we have added, we are able to lighten this up. someone on social media might be tweeting this in real time, and have a chance to learn with us. >> your instagram followers are also huge. >> hot olive oil, try not to burn yourself if possible. this turns into-- >> i always dress like this when i cook. >> that goes in the oil and we are able to cook this today and

have the recipe up on the website. we will pair a wine with this. we will show the technique with what we are doing, and then they are talking about what would we drink with this? the social media chatting with the others out there-- >> to you find other people coming in the restaurant who have now come because they saw it on twitter? they have been following along, they saved up for an anniversary? you establish a relationship with them.

>> i seldom do any personal things. but my daughter's birthday party, it blew up, it was something we might not normally do. >> are fish is about done. we will finish and eat this. i think it is very interesting that social media helped you to get the attention that last year. >> i will put the recipe is on social media. follow us on barn raiser for social good. >> we are going to eat. back to you. >> that is so not fair. coming up, we are talking to max levchin.

he will tell us about his next big thing. ♪

>> welcome back to "bloomberg west." a firm launched by max levchin has announced $35 million in funding today. what is it actually and how will they use this money? you have been in stealth for the past couple of years.

>> the long-term plan is to revolutionize paying for purchase at the online point of sale, and splitting them into several installments. if you do not trust your credit card, if you kind of know but can calculate that it is too high, he can make it simple for you. we can split it into payments, and make it transparent and honest. >> you already have partnerships with retailers. do i have to fill out applications? >> you fill in just a couple of recent information that basic pieces of information. in less than a second we can tell you we will take the risk and we will stand behind the transaction. no complicated approval, no

access to this store and filling out a credit card application. >> you have to get the payment to the place, but the other challenge is understanding the credit risk. >> the latter is far more important. we are fundamentally changing the way risk pricing and risk underwriting happens. we're looking at new kinds of data. we think of ourselves as what they should be if they were invented in the last couple of years. >> what makes you comfortable taking on the risk? >> a fair number of the team come from the old risk underwriting team at paypal,

although most of us are the young acolytes of the finance sector. >> this is actually a result of the old paypal risk team, you were brainstorming and came upon this. >> we asked ourselves if we don't really deep and did not put a veneer over the old rails and went to the core of the banking structure-- >> in the way that payments go through the banking structure. >> we were looking at the banking world, why has not someone taken this on and the answer was they did not have to. >> give us a piece of data that you use. >> we look at what he knew buying, where are you buying, and what the cost is. and based on that information, what the risk is. >> give me an item that would define risk in your profile.

>> a mattress is a classic thing that someone who graduated college has to buy. it is just enough of a debt in the cash flow that they have to decide whether or not to put it on the credit card or to suck it up and sleep on the floor. >> you decided to basically work full-time on this. you are looking for someone else, but you'd decided-- >> i'm a glutton for punishment. two things happened. they were still be intellectual outlet of my many different

curiosity projects. i loved running a company, there's something thrilling about coming into a company with goals and kpi's. key performance indicators. it is all about the team. we have an amazing group of people that i worked with at paypal and a bunch of really brilliant young people that are now motivated by the center of this attempt to bring back trust, honesty and transparency in banking and finance. we are our own customers. >> do not go anywhere. we will get max levchin's take on wearables. plus, it has been dubbed the world toughest drone.

is it really? ♪

>> you are watching a special edition of "bloomberg west," where we cover innovation, technology, and the future of business. we are live from cobol point in sausalito for bloomberg's next big thing summit and we are talking right now about health care and innovation in health and fitness tracking devices . joining me is our editor at large, cory johnson. >> i am well trackable. >> i'm wondering if mr. dyson beat you? he joins us now along with max levchin.

can you explain what you are wearing on your wrist? >> i'm focused on health to avoid health care. this is the nike band. >> i'm not wearing my heart rate monitor today. >> the nike band will be discontinued, but the business lives on. the shine from misfit wearables which max is involved with. you can wear it while you are swimming which is why i like it. finally, this is the basis which says low memory. >> is that your memory? >> i'm doing so much stuff. it is owned by intel. >> how does it help you? >> it helps me be a better investor. i'm already a fitness nut. how much difference do they make? the top then doesn't need it, the bottom and won't use them.

if you are an insurance company, can you improve health so that it's a large enough population that it matters? >> max, you are an avid cyclist. i know you have experimented. >> i think my lack of wearables today is a message, but i did not plan it this morning. to impact the middle, you had to go from active tracking to passive tracking. i don't have to remember to put a parameter into my bike because it's built into the crank. so i have a perfect record of how hard i peddled with a microsecond resolution. the companies can start pricing it correctly and start sending people in before we have a heart attack all stop that is after our bath mats start out telling us what our wait is doing in the mirror in the bathroom starts telling us what is pumping in our eyes.

>> is it the biggest pot of money with the dumbest price and burials? >> it's the biggest with the interest of eating healthy. the challenges of you ask an insurance company what is your estimated average lifetime as your customer, they do not want to tell you because that is their actuarial secret. but if you can keep these people but if you can keep these people for a long time, you benefit from them being healthy because you don't need to provide health care. >> is having your life measured and tracked a good thing? >> i think so, so long as you have control of your data. fundamentally, the trade-off is correction and prevention. frankly, i don't mind someone, let alone my computer, know what my weight is doing if it's going to keep me healthy. >> the things that people share and don't share, that's one of the most interesting things will

stop i will share my data with some people. my sleep date i will share with fewer people because that is more intimate. >> going back to is a good to be tracked -- we track our cars, we track our equipment, why not track our bodies? if you look at sustainability long-term, we are looking at the environment, it matters a lot more. some people care about price, the other people care about am i going to get fired. you have less sympathy for that, maybe your premiums should rise if you cost society a lot more. the stuff you do voluntarily, not are you likely to get some disease. >> apple just rolled out -- is there one company that can make it more mainstream or will it come from outside?

>> the most exciting stuff is going to come from startups. we are able to take more crazy risks. we have no brand to lose. innovation nationally happens in small chunks. the company's step into the market legitimize it. they put the stamp on the market by saying we will be behind these efforts. >> how optimistic are you about an apple iwatch? >> i think it will be beautiful. >> i don't really care. i care that it happens and i think it's going to be a startup we've never heard of on one hand, but what we need is long-term money. our long-term interests at heart, our employers and even we don't think long-term. one interesting phenomenon we are exploring is if you order your groceries online, you buy

more healthier food. that old saying don't go shopping when you are hungry is really true. how do you spread this? it's not just what you do. >> that concept, the fundamental driver is not going to be an individual, for me, i've always found my best times in my life when i'm training the hardest is when it is measured, but i don't know if i'm peculiar or if it's just me. you are talking about it effort marketplace. >> you are talking about a different business model let things long-term on how to keep things healthy. >> do you have to make that happen? >> i'm making it happen and i have a startup that's not for profit. >> what are the most exciting things you are invested in right now?

>> 23 and me is one. >> there have been huge issues with the fda. is it going to get beyond the red tape? >> yes. i have no problem with regulation. we want to keep out people and snake oil. on the basis of your genome that says you should do x and y. we did not provide the fta with all the data they wanted and we are in the process of doing that. that will be sorted out and over time, there's the broad environmental stuff like that food you can buy. >> i have a relatively prolific portfolio and am a huge fan of misfit will stop thank you for remodeling. on the device side, the software side there's a product out of

new york which is a really cool way of making the data around dna and other things more accessible. it is going to be revolutionary. the biggest problem in the health world at this point is not lack of information, it is lack of accessibility and control. health is just getting into the company. there's another company called human api which is a different approach to higher-level eta, human records, i'm an investor in that and i'm very proud of that decision. i was at one point an investor in a couple of diets companies, but they have not panned out. >> it feels like in terms of

timing that we are very close to this becoming more mainstream. i would not say it is mainstream now, but it seems like we are close to greater accessibility. >> when you have the baby, you use low to get your baby. >> i don't mean to to my own corn, but the most important investment is low which helped you have a baby naturally. >> then you monitor what your baby is eating and how you change the diapers. >> that is changing behavior. it is fascinating. >> thank you both so much for joining us. we will be speaking with you a bit later in the show. coming up, we will talk about the private space race. plus, companies like amazon are looking to use drones for delivery. we are going to play a game of drones coming up.

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>> welcome back to a special edition of "bloomberg west" at the next big thing summit. you know elon musk and spacex, richard branson and virgin galactic, but there are a lot of layers in the commercial space trade. whack with us now is esther dyson, the chairman of adventurer holding. she's an investor in x core aerospace and is even a trained cosmonaut will stop she spent several months training in russia. i wonder, elon musk and richard branson don't have cosmonaut on their resume. you have an edge on them. >> you know exactly what it's going to be like. >> how does that help you as a space investor? >> it makes it more real. a lot of people think of space is being exotic and intangible.

my dad was actually a physicist and still lives and astronomer. for me, i took it for granted as a kid and i take it for granted as far as what you actually learn and cosmonaut training. it's very basic. it is space plumbing. how do you fix the air exchanger? space medicine -- what happens to your body? how do you keep the oxygen level appropriate? >> have you been to space? >> no. i have been weightless seven or eight times and i will probably go up sometime most likely next year. as an investor and board member, i get to do the last flight before we go commercial. >> tell us what x core is. >> it was started in a guy named jeff grayson from intel. he is very concrete stop space is actually building a

spacecraft that works. we are competing in the suborbital spaceflight area with virgin galactic. both of us want to be first and at the same time, both of us want to make sure this thing is perfect before it goes. we are both of us trying to create a real market. virgin is more on the luxury side and we are more on the extreme sport side. >> space funding has been cut and public funding has been cut. why is it it orton to explore space? >> why was it important to discover america? i don't think russia should own the world and i don't think u.s. should own the world and i think everyone should own the universe. in terms of getting to mars and learning how to create an atmosphere -- we've kind of messed up the one on earth and

maybe we can experiment with synthetic biology. it's not just rockets, it's biology, space mining, making pharmaceuticals because in zero gravity, crystals grow much better because they don't have any gravity spoiling a lot of things. there is a huge amount space means to us besides a bunch of guys going up and rockets. >> and you, like elon musk, would like to die on mars. >> yes, but not soon. >> why mars? >> it's the best place for us to live. mars is a real planet. we could probably generate an atmosphere. it is similar to earth but there is less remedy, so when you get old, you don't get hunched over. it's a great place to retire. >> i have heard about experiments that can only be done at zero gravity like cancer saving treatments.

tell us about the work being done in space that can help solve problems here. >> i don't want to oversell it then everything needs to begin somewhere. you can grow crystals much more. if you try and grow crystal in gravity, it collapses. without ravi, it can just grow more elegantly. we are not sure what it does to biology but it's clearly going to do something interesting. there are lots of rare metals in asteroids and then there's the stuff we don't know about yet. just like when you explore the sea or explored america, you discovered things you'd didn't know yet. >> we will be watching for your first flight into space will stop thank you for joining us today. up next, we catch up with the

technology and design of drones. how durable are these unmanned flying machines? the cofounder of game of drones, a group dedicated to creating an indestructible drone is here. ♪

>> welcome back to "bloomberg west" live from sausalito, california and bloomberg's next big thing summit. amazon and google are investing in drones, but there are a lot of companies out there working on drones themselves. believe it or not, drone enthusiasts have been doing this for a long time. our editor at large, cory johnson is with us as is the cofounder of game of drones. you came out for the show, i'm assuming. what is game of drones? >> we are a group of inventors and engineers and we have been flying drones for about four

years now. we have discovered biggest problem with them is their very fragile. they are made to basically fly as a components platform. one of the first things we do is we found that when we crashed, we had very expensive fixes. we solve that problem by making the only fully rugged airframe worthy of any sport. >> so this is indestructible? it can resist fire? >> and baseball bats. easily. >> should i move? i will just stand here. >> ready? that broke. and this is not going to break? that is one of the leading frames on the market today. >> nice swing, johnson.

>> nothing. let's go to town on it. >> what is it made of? >> it's a proprietary ballistics material. as you can see, it survived. it is a proprietary blend of hot sticks we developed ourselves . >> what i didn't realize is there are drone fight clubs. people fight each other's drones. >> it evolved from the robot wars you might have seen on tv. all of us do that. as soon as we learned we could fly, we abounded ground-based robots that have gladiatorial combat in the air. >> do people actually get hurt in these things? i imagine the drones collide. >> we are very big on safety. >> we are going to have a drone off here. >> i would be happy to fly.

>> you are operating which one? which one is yours? >> the black one is mine. here we go. >> this seems like it great idea. >> we like it. >> where do the drone battles happen? >> all over the bay area. we have a warehouse in san francisco. >> is this a localized thing? is it happening all over the country? >> it will be soon. we are developing a sports league and we had a huge turnout for maker fair. we discovered they are very popular. >> has the fda ruled-- >> all we do is flip them over. >> a little less lucky than "game of thrones." >> the one that can't get acting here loses. >> that looks a little different

than the drone that will be delivering my amazon package. >> absolutely. but we can make those drones crashproof and i know they are going to need us. >> do the faa rules prohibit the growth of this business in any way? >> not the growth of the business, but the use of the product at the end. you cannot fly within two miles of the airport all stop hobbyists can only fly as far as 400 feet and it's good to be insured for property damage. you will not have drone damage anymore thanks to us. >> speaking of which-- >> it's time for the bwest byte. >> we are getting ready for the game of drones battle we're going to have here this evening over beverages because you have to serve beverages before the drone fight. one drone got stuck in the trees last night and the guys underneath was throwing a stick at it for about 20 minutes until i said isn't this what the drones are for, to get the drones out of the trees.

so they sent a drone up. >> is my package going to get stuck in the trees? >> it depends on the pilot. autonomy is the next big thing with drones, so basically you could program them for admission and they will go complete it with very little human interaction. they will fly at an altitude where they don't have to worry about trees and structures and have avoidance detection on board so they can avoid a certain obstacles. >> that they actually have to get down to the ground. >> traditionally, the delivery man comes to your front door. with drones, there will be a platform in your backyard or roof area where they will start to deliver. >> a landing pad. how far away is this? >> within a year or next year, you will see a massive revolution with the technology of drones. >> thank you so much for joining us and thank you for joining us for this special edition of "bloomberg west."

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>> these statements have not evaluated by the fda. this product is not intended to diagnose, treat, cure, or prevent any disease. >> thank you for watching.