>> from pier 3 in san francisco, welcome to the best of "bloomberg west," where we focus on innovation, technology and the future of business. i'm emily chang. every weekend we'll bring you the "best of west," the top interviews with the power players in global technology and mediareshaping our world. that are it appears to be nothing more than a bunch of hot hair. the numbers are in and cybersummoned hotter than ever. it topped the $2 billion mark.

not all the numbers were as rosy. i.b.m. said sales did indeed grow 8% but that growth rate was actually lower than last year's. en you think of cybermonday, twitter is not the thing that usually comes to mind. for more on their e commerce road, i spoke with their director of retail and asked him ow busy it has been. >> we have a lot of really great things happening in the last couple of days and we are really excited to see brands engage with consumers, not only pushing offers, which is important, but also thinking about how they can add value to shoppers, so they can provide behind-the-scenes tips and tricks, to all generate interest and stay relevant in the season. >> twitter is obviously not the

first thing you think of when you think, i want to get a deal on black friday. how do you change consumer habits? i spent a lot of time on twitter during the week and i spent very little time on twitter this past week and a lot of time on amazon. >> when you think about twitter, it is about discovery. that is what we are enabling for you. we are helping you find what is good for you in a moment. that can be interest today, but also shopping. we think about holiday seasons, shopping is really important. we are really looking to drive the discovery for consumers. >> now you guys are testing out a buy button. what kind of progress have you seen so far? how are consumers behaving? >> buy button really exciting, is also the early days for us. we want to think about shortening the distance from the customer talking about a product to being able to purchase it. this is something we are testing today, but we want to take the time to get it right. we do not want to rush to get it out to market. we want to make sure it works first. >> anything you have learned

about how customers are using it. >> they are being used. we have great data. a great campaign is running today. amc theaters is emoting the ability to purchase a gift card through twitter and upon the purchase, they provide a voucher for a free popcorn at the inner. you might want to get away to see a film, this is a great opportunity. > is the idea to get merchants and retailers to offer exclusive deals on twitter? >> exclusives are great. it is about finding the right opportunity to capitalize. you have people asking for products and advice on what to buy. we want to shorten the distance from that to the actual purchase. >> what about the product with amazon? how is that going? >> i can't comment specifically on that, but really interested to see how consumers are thinking about a platform from a commerce standpoint. we're seeing nice traction there. all great learnings for us. >> what can twitter offer that other companies cannot?

other platforms cannot? >> we go back to that discovery. have this live public conversational platform and we are heavily accessed globally. when you put that together, he lends itself well to discovery. ultimately that provides an opportunity for a brand to interact with the consumer throughout the past purchase. that is really important. >> why not push a buy button out sooner when you have the biggest retail days of the year over thanksgiving? >> really good question. twitter is focusing on getting it right for consumers. there are opportunities to push products in a market, but we want to make sure it is right and it works well first. so i think we're just going to err on the side of getting it right versus getting something out. >> in terms of the business, what is twitter's cut? if i buy something based on what i have seen on twitter, what does twitter get out of it? >> we can't speak specifically to nose numbers, metrix.

what i can say is if we develop the product effectively and we shorten the gap, it will work really well for brands and we believe that will work really well for twitter as a business. >> twitter director of retail. so what is cybermonday like at an amazon fulfillment center? cory johnson traveled to tracy, california, about 60 miles from here. it is one of the centers using robots to help fill their orders. he spoke about the robots with dan clark of worldwide perations. when you think about the challenge we face, it is all about this massive selection we carry. this has over 3.5 million units. it used to take a lot of time. >> there are 21 million items ere?

>> it is interesting to watch children's toys and power drills and you name it. everything from toys to vitamins to toy rockets. we probably do 90% of our shopping at amazon. >> that is going to my house right now. >> is the method as effect wive the rockets? does that change the way it works? >> it fundamentally changed it. it eliminates the walk. you're seeing a value-added element to the customer. this stuff is available. same day delivery. order it by noon and get it tonight. the same thing on the pick side. when it is delivered to the picker, it is there. when we were previously processing orders in an hour or an hour and a half, our fastest times are down to under 15 minutes.

amazing. >> you have been at this for about six months. i would have to imagine there is of learnings amount you are going through in terms of that is actually going to help us with -- what? what are you learning the most about? >> three big pieces with the system. one is the capacity expansion. it is about getting more selection available locally for customers in the same footprint. in this building, we are getting 50% more product per square foot of space versus our previous generation. this is a function of the catacombs don't have to be reachable or the library? >> exactly. because the system does not need walkways for people, you don't need the intermediate handling system and you get more density of storage. there is very few aisles. you are always welcome. > your pickers are not 6'5". talk about the location of the facility. it is very interesting to me that it is an hour or two from

san francisco from san jose from sacramento. how do you select locations and how does the change in amazon tax policy aide that? >> we are about getting closer to customers. the first benefit is about getting closer to customers. then it is about speed of processing that you get and our ability to faster process for delivery to those customers. as we scale the network, moving from one building to many buildings, you are able to get much closer to customers. when you have five buildings like we did in 1999, you are more of a regional fulfillment player. we have 50 build information the u.s. 109 globally. we are able to be much closer to urban locations were customers are located. >> the impact of sunday delivery i was shocked a few days ago i walked out of church and a mail truck went by. i thought wait a minute.

it was chock-full of amazon packages. >> it is amazing how fast customers have really adjusted and love the sunday delivery. we now have 19 sort centers across the united states supporting sunday delivery to thousands of cities. it is a tremendous benefit of being part of our prime program and through seven-day elivery. >> is it better or work for the pickers working with the robots? they -- are they working harder, or they don't have to work 10-12 miles a day? >> i encourage you to talk to them. i think the pickers and stores enjoy working with the system because they get to do more of the direct things that customers appreciate. >> cory johnson with amazon's dave clark from an amazon fulfillment center on cybermonday. coming up, what can companies like g.e. and microsoft learn from startups? next we have some key takeaways. ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. what is the secret to success for young tech companies? often it is their nimble start-up culture that helps drive innovation and may put the company on a path to greatness. can large companies learn something here? we spoke with the author of "the lean startup" and founder to have lean startup movement. i asked if any companies were implemmingt the lean startup technique. >> i got calls saying we want to plement this system in our large company. so many issues that we are talking about a are the same.

once you have a product fit and you have a successful product, you have at least one other person working for you, how do we teach people to become entrepreneurs? >> what about a company like microsoft? the new c.e.o. microsoft obviously missed some of the technological hits of the last 10 years. how does a company like microsoft change? can they change? >> i believe they can. it is about are you willing to hange the whole blueprint? if you want to fost they are a kind of oin vegas inside the company, you to set up internal startups. >> i wonder about the companies where that is part of the culture. i've been thinking about amazon. amazon is this culture of pizza box teams. you don't want a team starting a

project that is more than one late night pizza session away rom being too big. hat is amazon. that is part of their culture. they are cheap, small teams that work fast. what about when that approach is wrong? >> i believe culture comes from the process. the way people get promoted. if you want to have a culture of small team or when you have a big problem, you find a way to break it into smaller problems. you have to set that process decision from the top. i think what is really interesting is when i go to corporate america, i meet with teams with a 25 or 30 person part-time committee. everybody is on the project 10% of their time. everyone got assigned there. there is no ownership. there is no sense this really atters to my job or my career.

in silicon valley, you don't get assigned to a start up every day. >> diversity, we have seen a lot of dismal numbers coming out from apple. what kinds of things -- where have you seen progress? when it comes to diversity other than the realization that we know these numbers are bad. we want them to be better? what are they doing to make them etter? >> diversity is the canary in the coal mine. you ask yourself if this was really a good selection process. >> if you walk into a room with straight white dudes like me and say you did not get the best people possible. you didn't even try. >> the people best at the job look like the person making the selection. the odds are extremely low.

just do the math. i think companies are starting to take this seriously but it's a slow progress. i believe the process we use determines who shows up. people don't apply when they don't think they are going to be selected. >> the blind screening process. they have a low number of women even though they are concerned about the problem. take a listen to how they've changed their process but won't go so far as to blind screen. >> how have you changed the interview process in subtle ways to make sure you are getting the best people and that you're not discriminating and everyone has an equal shot? >> one thing that has changed recently is that we have a female partner in every one of the interview rooms. >> why not completely blind screen everyone? >> how could you tell if they were telling truth then? >> i could not observe their interaction. >> they feel like they don't get a good read on someone if you don't meet them. >> i couldn't agree more. a lot of the selection processes are multi-staged. there is like a written

application that happens before you meet the candidates. how about look at the written application blind. that is what we do? we have people submit the written form and create the videos. we make sure everyone applying has to go through the same process. >> cory johnson and the founder of the lean start-up movement. >> up next, we'll be speaking with a man who has been on the front lines of civil rights issues for 50 years. jesse jackson. did he get answers in his meeting with microsoft? ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. tech companies from microsoft to google, from apple to facebook have reported their diversity

numbers and they are pretty much the same story across the board. the workforce is predominantly male and predominantly white or asian. what can we do? we spoke with jesse jackson where he was meeting with leaders of amazon and microsoft. i asked him what nadela had to say. >> i think the real zeal women and people of color represents mono, market, talent and location. it is not the cost of doing business. it is the key to growth. there is an opportunity there. we e we focus on engineers, can help increase that supply base. beyond that, 60% to 70% of the jobs are nontech. awyers and ad execs.

>> is it interesting to have a conversation with a guy of indian descent? for you to have that conversation with -- does he get it more because he is also in this country a minority? >> in microsoft, you have an indian president, female cfo and african-american members of the board and white attorney in terms of mr. grant. i think they do get it and they see that the market is like that. so his talent and creativity. and we also talked about that. also why not take a hard look at beginning to invest and -- in stem development. 600 children studying stem. they are teaching them in trailers. they need a school to do that.

and there is a pipeline to start with a pipeline. the chairman of the board, john thompson. hey teach computer science and a.n.t. and howard, they teach engineering. with florida a&m and other schools, they must see the value in such a relationship. we are over consuming and buying the product. >> we were just speaking with he author of the lean startup. they say tech executives can't blame this on a pipeline problem when the pipeline has changed. amazon executives, they tell us who they are meeting with and what is your message to amazon? >> we can't meet with amazon. amazon has been the most

reluctant in contrast to microsoft. amazon is all white, eight men and two women. i mean, they have a lot of shovel ready talent on the arket right now. capital e like -- luke and williams capital to be part of the offerings. we have a talent surplus. the myth has been they can't find us. we found them. we want to connect with them and s not a zero-sum game. >> on of the things that make silicon valley work is not just the innovation, the ideas, and the people with those ideas that want to execute those. but the university of california at berkeley, stanford, also the peninsula. bringing students to the

workforce ready to do this kind of work. and with tuition rising, it seems to be keeping out more people of color and more women out of those schools unable to pay for tuition. how does that lessen the possibility of having workers of color? >> that is a problem and should be the forgiveness of student loan debt. it could be a great stimulus to end the boomerang situation. soon it can be a big deal. and also, we find that we cannot just limit those schools. john thompson comes from florida a & m. the guy who wrote up the papers for google, david drummond is an

african-american. there is no talent shortage. working on an insecure basis, they can learn stem. they can learn apps and code right here right now. we bought shares of stock in these companies. we will be in this for the long haul. we'll be in your presence in the great northwest and silicon valley. >> are you saying you are against the program? it's costing african americans and people of color jobs in silicon valley? >> they are unnecessarily recruiting workers from abroad and not training them at home. that is the real point. >> i want to ask you about your conversations with tim cook because you have been speaking with apple specifically about pay disparity issues. what happened in your interactions with apple and tim cook around this issue of pay and equity?

>> we hope to meet with tim cook soon. we did meet yesterday with nadella. these companies have had the pleasure of having offshore tax havens having the tax breaks brought back home. they have not been as sensitive as they must be. so we can grow together. and work with security workers and truckers and advertising gencies and marketing. we are in this area. we should all be a part of it. i want our government to play its role demanding that equal employment opportunity be used here as well. >> jesse jackson, founder and president of the rainbow push coalition. up next, blackberries come back. on just a year on the job, john chen has made drastic changes to

revive the smart phone maker. will it work? my interview with john chen is next. ♪

welcome back to the best of "bloomberg west," where we focus on technology and the future of business. i'm emily chang. apple has obliterated blackberries market share. up tould john chen sign be blackberries new leader? this is my interview. >> people are telling you the blackberry is already dead. why did you take this job? >> that's a great question.

there are a bunch of reasons. i could give you a reason about it being iconic in the industry and it's a great company and has a lot of tech allergy and i think there is a lot of potential. that does not automatically answer the question why am i doing it. i started talking to the chairman of the company. i was going to formula to strategy. i thought i was too old to run around the world and play cowboys. it, i find it's hard to just guide without just doing. todon't have a lot of time find another team or find another person and talk about the strategy. we just have to get it done. decided to become the ceo.

i'm not crazy. i think there is a lot of good potential. it's not a done done deal. i think we have made a lot of progress in the last six month. >> the you like to feel needed to fix things? that is probably the negative part of my personality. i am a little bit paranoid of not being needed. i think it's important. what i do every day, i know that it means something to people. >> history has been cruel to phone makers area know kia. motorola. palm. what makes you think you can change history? >> i'm not following the same plate. we are trying to broaden ourselves the odd just the device. think isit there and can make another great phone and somehow everything will be well. >> you did vow to keep making phones. >> that is part of our strategy. being completely honest, have

you ever had a moment where you thought what that i get myself into? >> twice. yes i have. after the first 30 days, i said i am running against time on so many things. i did not dwell on it for too long. plan together and did one thing at a time. don't try to fix everything at the same time. that was once. and then i could feel when my mind is not very focused and i can feel it. ease now, i am quite at with the things we're working on. >> my interview with blackberry ceo john chen. this interview will air on "studio 1.0" on thursday.

he wrote the news about the hack attack at home depot. a cyber security journalist next. ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. from the target breach to the infrastructure warm, brian krebs has played role in exposing some the world's biggest cyber threats. a first person to report on the massive breach at home depot. he has learned russian, travel to eastern europe, and adopted aliases to talk to the hackers he communicates with. >> if you're going to sell something, you don't put it under a bucket. you tell the world. you tell people that you have

these fresh new credit cards. come to our store and don't go to the other guys. they will put ads out there. they will say get your balances ready to read we are about to push a new batch of fresh cars out there. whenever i see that, i wait for them to do it. i look at it and i reach out to sources in the financial i just lookeday, through this cash they are selling it looks like they have 10,000 of your customers cards that just went on sale. what do we do about it? you can go in by these cards back and tell me what you see. if there are any commonalities? >> you work backwards. >> if you get the same answer from enough financial institutions, it's time to make a call to the company and say it sounds like you are having a bad day. what happened?

more abouto know your methods. you are learning it russian. you are infiltrating chat rooms. tell me about the tools that you use to track these things down. said, a lot of these helpingies are about people get business done. cyber crime has become a big business. if you want to buy an atm tommer or start up a botnet start spamming but you don't know how, get on some of these forums and they will teach you this stuff. that's what i did in the middle of the last decade. i tried to establish a presence on all of these different criminal forums and then lurk and try to understand how this weird ecosystem works. reach out thei people and say if i were inches

to do this, where would i go? if i were looking for that, who would i talk to? who are the most trustworthy people? that's what those forums are all about, connecting people who have disparate resources and interests and put together people in a way that creates an enterprise. >> how do you protect yourself? communitiesthese and i am just lurking. i am not trying to be somebody i am not. >> if they knew it was you, wouldn't they stop talking? >> i normally don't register under my own name. i don't spend a lot of time reaching out to these guys and pretending to be somebody else. there is a lot you can learn and glean just from being on these communities and seeing what people are talking about. in the few cases where i have on a lark tried to register in my found that either

the account is already taken or the administrator just laughs it off. >> they are on to you. you have been a target in certain cases. people have sent unwanted things to you. you had a swat team on your doorstep. tell me about some of the situations. is a loteen -- there of stuff that people can do without a lot of effort and somebody else's credit card to orse you embarrassment inconvenience. some of the things that happened, they sent a heavily armed police force to my house by spoofing an emergency call from my home and saying that somebody invaded our home. that was interesting. if it never happens again it will be too soon. who runs a major

cybercrime forum take up a collection to send heroine to my door and then spoof a call from my neighbors saying that he is a big druggie coming and going. he has drugs delivered to the house. that was an interesting story because i was on that guy's and i was watching them plosser -- plot this out. i called the cops. that was a fun story. apparently there is a thing where you can send a big bag of feces to somebody's house. some of the weirdest stuff that has happened, i prefer not to talk about. i don't want to go through it again i doubt want to give people bad ideas. >> do you get scared? ,> if you are in this business

poking the bear as it were, you have to have tough skin and you have to take some basic six.utions to watch your my sense of security has increased over the last couple of years. we are working on getting the privacy reset button, that is a lot of work. >> brian krebs, researcher and author. more than 6 billion people are expected to have smartphones why the year 2020. how will tech and phone companies deal with the massive demand for data? i speak to the ceo of ericsson next. ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. the number of people smart phone subscriptions expected to double by the year 2020, two more than

6 billion. 90% of people over the age of six will have a mobile phone by then. these are some of the findings. i spoke with hans vestberg. development ofow technology. the next year will be an explosion. the prices are coming down. the technology is reaching so much further out. 93% of thethat earth's population will have coverage by 2020. the scale we have in this industry, it's amazing, the numbers. we been talking about smartphone saturation and concerns for samsung, it sounds like smartphone makers don't have anything to worry about. is it is aare facing very natural thing. billione over 7

subscriptions in the world. we need to understand that many countries and places on earth don't have the coverage. the handsets are coming down in price. of $10 forreduction a smartphone is 100 million people that can afford it. of tight logical challenges does this mean for your company? when you're coming into the more rural areas, a lot of things we need to think about are things to get power out there. samether thing is the technology we deploy in the united states we deploy in africa. then we get the cost down and we get scale. scale is the game. 90%'s how we can have over

over six years old have a mobile phone. you have an effort to bring connectivity to more remote parts of the world. how must you think internet.org will be driving these numbers? operatorsle scale of that carry the majority of traffic will do the majority of it. when you come to the more cumbersome areas, we knew -- need more innovative models. it is very important. we come with technology and they come with new innovation and apps. make devices that come than in price. this organization will be very important. >> what is ericsson doing a from an infrastructure perspective? how are they getting the internet onto dumber phones? >> one of the things we are

doing in silicon valley is we need apps that work on 3g or 4g. that is what app developers are doing it is in or mislead important. all around theg world. that is happening as we speak. $5 billion ong research and development every year to have the latest technology. that is what we are doing. >> what is the biggest challenge you have run into? .> nothing specific it's just coming out things from different angles. industrytry, the media , we are coming together. all of us need to work together. >> how did you become involved with internet.org? >> we had established relationships.

mark zuckerberg called you personally? >> he reached out to our organization and we thought it was a good or -- idea. companies that are in that many companies. , ericsson ceo.g you can check out my interview with mark zuckerberg. buy aitter looking to selfie app backed by justin bieber? we will talk about that next. ♪

>> welcome back to the best of "bloomberg west." i'm emily chang. tweeted twitter ceo about buying a company, many

thought they might be targeting shots, the selfie app act by singer justin bieber. if any talksnclear of taken place. i spoke with the possibility with jim scheinman, who runs the d.c. firm. >> it is a community of young adults age 13 through 19. the average age is 16. we have 3 million on the product now. it is all word-of-mouth. it started off with some justin bieber fans and celebrity fans. it's grown much beyond that. we are spending -- most of them dayspending 50% of their coming back to the site. 20 minutes every day. this is an apt that becoming part of their daily life. >> are all of these people real? theret comes to bieber,

are a lot of people with bieber in their username writing back to me. >> these are all real people. i should back up and explain why we were excited about investing in this company. it will explain what is going on with shots. they are great product developers. they have built these companies and mobile games for many years. they understand the demographic very well. they want to bring it to the world platform that is safe for the young demographic, where there is no bullying and still fun and cool and await for them express them cells. justin bieber shares the same vision. we believe that the world is a place where young adults come express themselves in a place

with your not going to be bullied. people don't realize that. i have a 13-year-old daughter and a 16-year-old son who are spending time of these forms. even places like instagram, 40% are being bullied on a daily basis. for a places time to exist where people are not being bullied. shots?they going to buy >> you are an investor. >> we were one of the first investors. ist i would tell the owners regardless of whether there is any truth to that or not, this is not the time to sell. right now, the company is doing great. we have 3 million users. it's growing very quickly. they are spending 20 minutes every day on the product. it's growing. there is no reason to sell right

now. if the founders decide that whatever they want to sell, they want to build this for many years to come. >> is there a meeting with twitter in december? that.an't confirm or deny i would like to point out that there is some speculation of other companies that twitter has been looking at. i am proud to say that two of the top three companies we are investing in. >> tell me how justin bieber got involved. >> the founder of the app is well networked. he understands this young demographic. he met justin and they shared the vision of what he wanted to do. just and immediately got it. public figures like justin are puttingeber themselves out there. some of the press they get is not going to be nice. they wanted to create a place

where people could express themselves and a safe way without being bullied. once they explained that, justin became a cash investor. >> how involved is just in question mark a postust recently did with his mother. the 3using it like million users as part of his daily life. to give advice to the founders, you would say don't sell now. this looks like another photo sharing app. what makes this stand out over time? there are so my options out there. >> when we look at investing with them early on, we asked our startups are you passionate about building a vision worth fighting for? everyone of our companies in our portfolio has a vision worth

fighting for. they are solving a big problem. there is a problem is to be solved can't be solved elsewhere. we said there needs to be a large marketplace for tens of millions of young adults to express themselves in a safe place. nowhere else can they do that. needs to exist. this is not just another selfie photo sharing app. in its own way. some of the new features we are launching are going to continue to make it further neat. >> why isn't instagram safe? >> you can comment. when you comment on instagram, a lot of the comments are kids saying that you look ugly or stupid. there is no commenting on a shots. everything you do is positive. there only positive feelings in the community. , an earlyeinman

investor. that does it for the best of "bloomberg west." you can catch us monday through friday. we will see you next week. ♪

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