>> live from pier three in san francisco, welcome to "bloomberg west" where we cover the future of technology and business. the u.s. stock markets rallying today sending the dow and s&p 500 into record territory as the japanese yen plunges to a seven-year low and the bank of japan announced a surprise stimulus plan. starbucks getting into the delivery business. the largest coffeeshop chain says they plan to rollout food and drink delivery the second half of next year by integrating orders through the mobile app. this is part of the starbuck

strategy to increase u.s. sales growth and the ceo howard schultz describes it as e-commerce on steroids. theseeing development of android software using more than 70% of the world smartphones is leaving the company. andy rubin will be creating an incubator. i spoke with a silicon valley recruiter about the shift. at a a lot of action startup level. a lot of companies doing really interesting things with relatively small amounts of capital. you don't need to be at google anymore to be at the cutting edge of innovation. hiring steve schnell, the former vice president of operations at rival lyft. uber with two other executives. they said they left after disagreements with cofounders over how the company was being run.

lead, a spacecraft for sir richard branson's virgin galactic tourism operator crashed during a test flight in california mojave desert killing the copilot and injuring the pilot. an faa spokesperson says ground control lost contact just after 10:00 a.m. local time. following release from the white knight two jet that carried it aloft. in the last hour, virgin galactic ceo said richard branson was on his way to the crash site and is expected to arrive tomorrow morning. for more, i want to get to boeing assistant professor .f aeronautics and only worry child. also with us editor-at-large cory johnson -- and leroy chow. lots of information and speculation. of speculation about what happened here. what do you think went wrong?

what was goingke on from things i heard, it was a new powered flight with a new rocket fuel. i don't know if it's related at all. you have to wait and see what the review turns up. there are so many things in these complex systems that can go wrong. these are some of the very best engineers and test pilots in the world. even then, things can happen unpredictably. my guess is it might be related to the test of this new rocket fuel but it might not be. it might be something else in the system and they will have to go through the review to find out. >> the two pilots were some of the best in the space industry. they've been working on this project for many years. while customer let me know and what we don't. -- walk us through what we know. scaled started composites with some backing of

paul allen from microsoft. this novel motion of how to solve the problem of getting the spacecraft off the ground and into space. and the notion was you would have a plane that would carry the spacecraft to it the thousand feet. then the spacecraft would descend, basically be dropped by the plane and the rocket would fire and shoot in front of the plane carrying it and shoot that into space going straight. then it would slowly descend because it would have an almost eadminton shuttlecock lik designed to reenter the earth's atmosphere and land safely like an airplane. in order for that to happen, it would have to have features that no whether rocketship had ever had. it would be a lot lighter to be carried by a plane and a fuel that's a lot lighter as a result because it would have to power this spacecraft being carried by an only slightly larger plane. the experimentations around the

fuel would just as important as the composite materials built to hold the passengers in this thing. >> there's been a lot of criticism about the engine this particular spaceship was using, kerri. new engine.ively richard branson and virgin galactic have been enthusiastic but there was a lot of criticism. they said that this engine was never going to get customers to space. what can you tell us about that? >> i assume it's for good reason they keep the specifics of the designs close the home. i do know in the test and development process, you go through a bunch of different test to try to identify with the right combination is with the design to be the most efficient, be the most effect is. -- most effective. i'm guessing they were in the initial stages of testing with this. maybe it wasn't the final

design. without knowing very detailed specifics about the design, it's hard to say whether or not it has the potential to be the final design or not. >> kerri, what can you tell me about the fuel and the types of fuel they are trying with this particular scale composite solution? how does it compare to other rockets? the rocket fuel -- there are different types. there are solids that earn. that's what we're talking about and then there are liquids that you mix and you have a reaction that causes the thruster. this is a solid plastic, a thermoplastic. i think that's what they were testing from what i've heard. when you are dealing with these kinds of propellants, there's a

lot of uncertainty and how they will burn and if that structures housing them, the motors they are combined with. again, i don't know a lot of specifics about the design. play andat compares to kerosene in a traditional rocket? >> many think about lighting a fire or combusting something, the different type of process to use these solid propellants. >> kerri, quickly we talk a lot andhe show about jeff bezos blue origin, elon musk and spacex, sir richard branson and virgin. how big a deal is it for these guys? does it mean that nasa could get back in the game? very sad when there is loss of life but also in the space industry but also occupational hazard industries commercial product being developed in the united

states. these things happen. this just happens to be very visible. >> we're going to have to leave it there. assistant professor of aeronautics and astro-nautics. we will be back with more "bloomberg west." ♪

>> i'm emily chang and this is>> "bloomberg west" streaming on your phone, tablet, bloomberg.com and bloomberg tv. another management shakeup on twitter. the vp of consumer product daniel graf has been replaced. they have appointed the former vp of product to oversee all twitter products, just one of many executive shuffles over the last year. joining me now to discuss the shakeup in what it means, the former director of platform and now a partner at red point ventures with us via skype and

sarah who covers twitter for us. i will start with you. i know you're very close with the folks at twitter still. what happened here? why is this happening again? >> daniel was brought in to be the vp of consumer product and it continues to be. kevin was a longtime employee and [no audio] proven track record of continuing to execute and he's taking over to make sure revenue and consumer products are aligned and getting everything together in one cohesive strategy. weekspoke with kevin last as twitter was making its big push to developers with new product. take a listen to what he had to say about his vision for twitter. has been synonymous with the consumer application and that will still be a major focus for us. that has not changed.

the application reaches a recorder of the world and we built a vibrant and growing business around it but this is the next step for twitter, us becoming a key player in the mobile ecosystem going forward. that danielaying did not do anything wrong? that kevin weil was simply more well-positioned to succeed? them in't see opposition to each other. daniel was brought into do consumer product. kevin has a great track record within twitter of continuing to build great products. he started out as a data scientist and build the entire revenue product organization from scratch. he took over platform and launched at fabric. they look at him as a great leader with great ground to help align the experiences across revenue platform and product to build one cohesive product. daniel is [no audio]

do exactly what he was brought in to do. and he will grow the organization and laid everything across. >> what are you hearing? >> i'm hearing that the turnover is a surprise. if twitter had come out in the beginning of the year and said we're going to shuffle through the ranks and come up with a new and make a focus cohesive, people would say, we get it. we understand. at some of these things have just been so surprising. the cfo changeover was a surprise to people. and the engineers that left just earlier this week, it keeps going and the market does not like to be surprised. will thison now is continue? we all thought it was over when they got a new cfo. >> how problematic is a premier

perspective that so many changes keep happening? >> i think what's important is making sure you get the team right to build the best thing you can and not react to what the market thinks you should be doing. in the end, that's what they're focused on and what they think is the right move. they are not trying to react to what the market is telling them. kevin is the right guy to lead that. alex is running all of engineering and kevin will run product. twitter needs to make some really bold decisions. someone who is kind of an insider who's been there and has the respect of the entire company to make bold choices and lead people to expect where they were not going to go and i think he's the guy to do it. costolo andith dick talked about the management evolution, what he calls it. take a listen to what he had to say. >> management teams grow and

evolve and change over time and that's always the case. i love the team we have in place. we have developed tremendously does across the company. what's been your impression of morale at twitter, culture right now as all of this has been happening? around a want to rally solid direction. when you have a lot of changes in management, it's hard to know without direction is. of course, twitter says we have a plan. we've hired daniel graf and it's going to roll out to see these changes but we've yet to really see from the consumer side what that looks like. there has not been that much that we've noticed as users of twitter that has changed. it will happen. until it does come a investors are still going to be a little skeptical of what goes on in twitter products. costolo is incredibly

well regarded and incredibly a lot of pressure on him right now. why should we not be concerned about all of these changes happening at twitter? there's lots of criticism that the product has not really involved. why not? [no audio] the reason you still want to be excited about this is getting the right people in place for the team going forward. you heard him say this earnings report that he wants the team's execution to get faster. those are guys you've seen on the revenue side that has grown and executed incredibly well. i think you're going to see a higher urgency level. they feel like they are the guys to go do that. i'm not worried about the future. i think this is a really good move on their part. >> where would you like to see the product go? getting rid of usernames? what would you like to see twitter do in the next six to 12 months? >> everyone has talked about it

but i think it's about growth. twitter can be valuable to one billion plus users. its real-time information on a mobile device. that's valuable to everybody. the thing they need to cross is the chasm between hearing about twitter in truly understanding its value to you. i hope to see them really understanding on marketing and explaining that value and building a product around and delivering that as quickly as possible. if it were easy it would have been solved by now. it's about getting that involvement so all parts are moving towards that one effort. ryan, alwaysr and great to have you on the show. thank you. new tech products and services are launching all the time in san francisco. how should the government be involved in regulating and protecting consumers? that's just one topic we discuss with san francisco district

attorney george gascon when "bloomberg west" returns. ♪

>> welcome back>> to "bloomberg west." san francisco is a hotbed for innovation and a testing ground. sometimes those new services need regulation and scrutiny to protect consumers and existing industries. district attorney george gascon has been on both sides of these debates looking into the practices of ridesharing companies like uber and lyft and to protectitch built consumers. joining me now to talk about the overlap between tech and politics, san francisco district attorney george gascon.

thanks for joining us. i want to start with uber because it's such a hot topic. you investigated with the los angeles county da. background checks for drivers, ridesharing, how the money is split. what's the status on your warning to these companies and your investigation? >> we are in the process of negotiations so a lot of things i cannot talk about. the reason why this became public is one of the companies provided the letter that we sent to the media and therefore it became public. the concerns we have are the following. we want to make sure that the new business models are successful, but we want to make sure that occurs while we protect the consumer. one of the areas of concern is safety for the writers. but theyround checks claim they have the best in the industry.

after intensive investigation, we don't believe that's accurate. we want to make sure that there is truth in advertising. if you are relying on that information as a consumer, there information should be accurate betheir information should accurate. ensuring business is done safely, the reason my airports control access for a variety of public safety issues, more on the extreme to terrorism and the lower-level things like traffic flow, access to the terminals. have not necessarily been following those regulations. >> what should the background check be? what should they not have been doing? >> they need to do their best requiring fingerprints, looking deeply into a person's

background. >> a delay not do that? a very limited computer-based check giving them five to seven years. they are not required by law to do the other. ist they are required to do if they say they are doing the best, do the best. >> so drop the claim they are the best? >> they can do that or up the standard. >> a six-year-old girl was tragically hit and killed by an alleged uber driver. the driver was a partner and did not involve a vehicle or provider doing a trip on the system but the family has sued in a wrongful death lawsuit. what's the status of that investigation? >> that's a criminal investigation and we are looking at driver behavior. it's ongoing. this speaks to one of the areas of concern for us that has been somewhat ameliorated but i do not think it is fixed. is this a technology company or

transportation? >> can it be both? are ais but if you transportation company your liability to the public increases for the entire operational cycle. facilitator,ly a which they claim right now, then the driver is the old one really liable. and therefore you have issues about insurance coverage to protect the public. >> let me change topics to airbnb, a big employer. if the company changing the way that the cities communities run. they're being filled with people renting out. what is your role as da to keep neighborhoods the same as they are? our city attorney has taken the lead on this looking at it civilly. he and his department have the ability to do some of this work so we have sort of allowed him to take the lead on this

process. working for the mayor and the board of supervisors. we are just taking a wait and see approach. >> san francisco district attorney george gascon. great to have you here on "bloomberg west." thanks for stopping by. ♪

>> you are watching "bloomberg west" where we focus on innovation, technology, and the future of is this. how do you take it data and make it sexy and usable? you could create a plug and play interface that looks like facebook. their technology caught the eye khosla ventures. i will start with you. you have such a long history of investing in so many start ups.

what attracted you to thought spot? or two,, every decade you need to reinvent all technologies and business intelligence is very old. has gottenrization everyone used to the google search box. more,hough it cost a lot it's a lot less responsive to users. that is what thoughtspot changed. it gave everyone a search box just like google buzz. it's a very different experience. described as it google for business intelligence. is that the right way to think about this? thoughtspot it is a search designed for numbers.

traditionally business users had to rely on i.t. and then they d the data from the reports. with "bloomberg west you can -- with thoughtspot you can interact real-time. you can ask questions and get immediate answers just like you find flights on a kayak or the weather on google. financial data, marketing data, sale data on the fly. people really want right sized information. they don't want weeks and weeks. >> who are some of your customers? large enterprises. we are focused on scale making it easy but at the same time, keeping it scalable. when you talk about accessibility, that's great. on the other side of the coin is security and scalability. they have some large volumes of

data and a large number of users. butg able to provide these meeting scalability and manageability needs is sort of a key focus of thoughtspot. >> so much has been made about the potential of big data that we have yet to see it become truly usable. it's difficult to go through all of that information. ig data been overhyped or have we not figured it out yet? >> we are learning how to use it. thoughtspot is a classic way of turning data into insights. you don't actually need to know the full query. it suggests things just like the google search box but on enterprise data and very large amounts of data. applications like thoughtspot

make data usable. intos the key to turning reality. >> how do you turn it into a reality? how do you see this over the next 2, 3, 5 years playing out? >> business intelligence was a big step forward. going forward, we look at technologies that will be a lot more forward. in 10 years we're are probably looking at the kind of movies like "minority report" as you pull data on demand. ,he data is a great opportunity infrastructure that you use to store lots and lots of data. if you store all of this data and cannot deliver it to the end users who really need it to him and then it's not very useful. what we are building is the last mile. a longd, you have

history in silicon valley. other venture capitalists have sounded the alarm about raising money so fast. you concerned about the environment? where is your take on where we are in this cycle? >> good startups raise money. that's a good thing. i think spending too much money is the problem others have referred to. i get concerned when people use the money and start spending it. raising it is different than spending it. smallk thoughtspot is a company that's very prudent in how it's approaching this particular problem. in general, there is a concern. >> you recently sat down with the cofounders of google. two entrepreneurs you've seen --wn-up in between your right before your eyes.

i know there will never be another larry and sergei, but do you see other people who have that potential? racing see innovation ahead. i do see silicon valley becoming a state of mind more than just a place. there are many more people attempting to be larry and serg zuckerberg,os, mark the number of good entrepreneurs is going up and we will see more morer businesses creating disruption than the traditional sense and more icons like larry and sergei emerge. >> would you mean about silicon valley becoming a state of mind? >> it's an approach to doing business. it is less rigid and more looking to the future. thoughtspot is a classic example. what reinvent this to

users really want to do. centered city is disrupting businesses in many areas. i see that continuing and even accelerating. >> when you look at companies vinod khosla has invested in, what kind of role you are trying to follow? >> us the great thing about the valley. people in the valley are very successful and open and sharing their mistakes. what motivates me is working on really hard problems and being ambitious in delivering and building any kind of technology required to thinking about customers first. if you think about facebook,

zuckerberg is a classic example in the focus has been on penetration making it very easy for everyone to, the social network rather than thinking about purely business. approach towhole thinking about customers first, users first is the value evolving from the technology industry to a user industry, i get very passionate when i think about the google founders, facebook founders, and one of my personal idols is elon musk from a well-known problem, electric cars. everyone was trying to build it. they have made such an awesome car that it's not just the best electric car but the best on the market and it's the user therience but the handles, dash, all of those things. od, you have expanded on

black swans and companies that have a great chance of failure and investing in them. what is the next black swan? in every area we look, we find radical changes in assumptions. elon musk is a great example. changing in the way spacex comes in. i see it happening in almost every area. we're seeing interesting innovations in food and agriculture. we see surprisingly large efforts in machine learning and intelligence turning big data and real usable insights usable human-like judgment. almost every area i look at is open to innovation. khosla and ajeet singh,

,ounder of thoughtspot thanks for joining us. a hot button issue, how are educators implement in these tools in the classroom? that's next on "bloomberg west." ♪

>> i'm emily chang and this is>> "bloomberg west." the infusion of new technology in classrooms has boomed with students giving a school issued tablets. cory johnson is in the newsroom with more. >> in the bay area, technology is cutting ground. i think this will be interesting thet how this works with company.ounder of the we are the chief technology for the oakland unified school district. talk to me about the opportunity

presented by technology going in the classroom. >> thank you for the opportunity but i do want to make one correction. investor. i'm a part of a nonprofit that by providingon content as well as individualizing the content. >> what is the opportunity for content in the classroom? >> it is starting to take form now. many are starting to adopt our contents of there's. has such a wide variety of students and teachers and it's really hard for need to particularly teach across the board with 20, 30, 40 students. what happens as a result of that , trying to use one form, one textbook that has only one flavor, one-story, it's really hard. >> the opportunity is to

individualize things to fit certain students in a certain way. >> that's exactly what we do. across theis right bay here. with so many nationalities, so many schools, so many income levels, it different skill levels, it sounds nearly impossible to get that working in a classroom setting. importantis a really issue for us. it's a challenge. it wasold days, different. now we can get ck12 integrated right away. it's easier for teachers and students. >> i was picturing the situation like a teacher who already has a job getting 25 kids into a classroom and now they're supposed to all log on.

that would take a whole hour of class right there. >> exactly. we like the solution where it's one password, one user name and the students can just login. >> is this sort of the main problem you are trying to solve here? >> we realized there was incredible software being built, but when you try to use it in a classroom environment, you have these challenges like setting up the accounts and students and teachers trying to login to everyone. the average teacher spends about 25% of their time just getting kids along den. our goal is to give teachers that time back. doi would imagine want to that you have enabled all sorts of other problems to be solved because you have that login system and suddenly students are online digital presences way you can monitor. of the classrooms

today like in oakland, not every student is doing the same thing at the same time. it's a different way to think about learning when students can be challenged that the run level and learn at their own pace. >> and that's the personalized learning we are trying in oakland. meeting kids where they are with the right software at the right time. >> there's been criticism about bringing technology into schools. more technology does not make students smarter. learning is learning and technology is not the solution. there was this false promise of technology in schools wasting money. where does help happen and where does it hurt? thehen you think about transfer from slate to paper and pencil, that was a big issue. neither is a huge job where there's a lot more complexities

and the technology isn't always ready in the way you want to use it. part of the whole idea of is about the classroom. yet it is not quite ready to use because there is so much other stuff to do. getsromise of technology people nervous. isare not able to do what needed for development. they need to have access. what's happening since we started and where the situation that theypromised could print to getting access, customizing, and then printing for each student. that was impossible. now there's a lot more and we canin k-12 start making a lot of difference. >> we might the technology to be

so they have easy access. they make it possible with a single sign in and we want the technology to just work. >> so teachers can teach, how clever. neera khosla, thank you. >> runners headed to the big apple for the new york city marathon. find out how race organizers are turning to tech to track her performance next. watch a streaming on your phone, tablet, bloomberg.com, apple tv. ♪

>> the new rick marathon takes over the big apple this sunday. the event expected to attract 50,000 participants from around the world. how do race organizers track runners performance and determine the winners? we take a look at the tech being used with great games ceo abe klinefelter joining us via skype. they are looking with a company thatd chronotrack transports information back to media and race organizers in real time. how will this work this weekend? what happened the last

probably 20 years of information is there's aessing massive change in the amount of people and scale. you have to be able to process largely because of the internet and big data. the only way to process large amounts of data is what we call in memory computing. it stores your data in the you cans ram and process between 5000 and one million times faster than when it was saved and written to disk. it's necessary to support the real-time data collection and things like the new york marathon to be able to process that data and be able to report on the performance of athletes to be able to do any analytics on that. you have these chips that are thedded in the tags

athletes run with. as they passed through sensors that the course, information moves into the cloud, gets processed, real-time information is then provided not just to runners but spectators. the only way to do that especially when you're doing it with 50,000 runners or the 55,000 expected, to be able to do that across races happening across six continents and 50 countries, which is what chronotrack does, you have to use this in memory computing technology. >> what about accuracy? it can come down to seconds if not fractions of seconds? how do you ensure the accuracy? >> the sensors are directly on track keeping where people are. you are still going to have a finish line and it's probably a laser people cross. as people across these sensors, the exact time is recorded.

it is extremely accurate. you expecting -- how are you expecting this to play out this weekend? what will you be watching this closely? ronotrack has been using this technology now for a while and they operate in 50 countries across six continents and they've done thousands of these races including multiple new york marathons, l.a. marathons. they are very competent. i have 200 timing partners around the world. i don't think anything will go wrong. i think it will go quite well. kleinfeld. ceo abe we spoke with san francisco da george gascon about uber. i'm aaid four months ago rudy giuliani embarq on an independent strategic review of the driver background check process and now they are on track to complete more than 2

million background checks of potential drivers in 2014. a say what they are doing at the airport is entirely legal. ♪