>> 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 of the week with the power players in global technology and media. to our top story. sony's hacking nightmare. the fbi has confirmed north korea was behind the devastating cyber attack, which forced sony

to cancel the christmas release of "the interview." movie theaters refused to show it. the movie tells to story of a journalist hired to kill korean leader kim jong-un. the cancellation could cost sony more than $200 million. matt miller talked about it with vice president hugh thompson and creative consultant kathryn arnold. he asked kathryn how upset the community is. >> to be honest, the creative community is up in arms. it is hitting us where american stance from a cultural perspective, freedom of speech and expression. the question is not only is it a horrific situation and is one and step the how will it a fact movies going forward and books and magazine and comedies? it has far-reaching affects and everyone is concerned because we do not know where it will end. >> if the north koreans can do it, anyone can.

hugh, does it surprise you that have the capabilities and is a well-known in the security? >> it is amazing. over the past 30 or 40 years you have seen building this capability on the defensive side but also cyber and offensive capabilities under training people and getting tools. we have seen on full display in this sony hack. >> if all they have to do is call in a 9/11 threat, can we expect countries to get any film canceled? >> you show what you have. there is a lot of uncertainties that sony has a whole was it really that launched the attack? was it folks from the government? there are pieces we will be

finding out. >> kathryn we will get you to weigh in. iran could hack and get a movie canceled as well. it is a slippery slope. >> most people in hollywood wish they would continue on with it on netflix or amazon. sony and all of the studios will have to work with third cyber security units and find a way. this is not my area and figure out how to get the movies out. it can come from any country. these are not logical people. these are people who are cultural fanatics and trying to censor the united states who has had freedom of speech as one of our most important tenets. >> how come we do not see other studios rally around sony?

why didn't we see the hollywood community get behind this company and say if you can shut them down, you can shut us down? we are behind them. let's release this film. >> well, that's a good question. everybody had a wait and see because they do not want to make the first move because it sets such a dangerous precedent. other studios are trying to rally and saying we want to support your freedom of expression, but at the same time, i do not think anybody wanted to make this the first move. if something happened, they would've looked as far of the liability. we are in uncharted territory. i think it really is just watching very closely what will happen next. >> hugh, what would you do if a studio came and said we had these threats of violence but will go ahead and put this film out because that is what we do in this country? how do you prepare for that sort of thing? >> it is challenging. we have seen on display, the

capabilities that this group has. we can achieve some level of security and recovery. you go back in and do a full forensics investigation. how did these guys get in? what kind of tools did they use? it is a wake-up call for a bunch of different industries that have not focused on security to say that in those industries are potentially at risk. there is a lot we can learn from this attack and certainly a lot of great cyber security capabilities out there in the market place. it is a call to the companies to bring the capabilities. >> how often do you see the threats cross over from the virtual world and real, physical violence? i have read a couple of incidents around the silk road case, and i was really surprised to see it come from the internet to a gunshot. >> if you look at what is

happening online outside of sony, all of these kinetic devices to a network connection and moving parts that can do things. it is becoming a serious issue of how to we get those things, those devices and companies secure online? they are making a lot of progress in the space, but with this attack and several others over the past year, it has shown us we have a lot of work to do. >> blue coat chief security strategist and vice president hugh thompson and entertainment consultant kathryn arnold. uber is on the defensive after a driver is arrested after allegedly raping a female passenger. is the company doing enough to protect customers? that is next. ♪

>> this the best of "bloomberg west." i am emily chang. a boston man who works as an uber driver was accused of taking a passenger to a secluded location and raping her. a spokesperson tells "bloomberg west" it is a despicable crime and our thoughts and prayers are with the victim. uber has been working close with law enforcement and will continue to do everything we can to assist their investigation. this comes as a they said they will do more background checks on its drivers. my colleague matt miller spoke with former chairman of the taxi and limo association. >> they have been lobbying and spending hundreds of millions of dollars on efforts to have less of background checks and do it themselves when every other taxi and limo like we did at tlc with a fingerprint which is more accurate.

it will catch fraud occurring with fake names and identities. and i do believe we need to do that. it is good uber is looking to acknowledge. >> uber have announced even before today's case came to light they will do more background checks and at least deeper background checks but also weird things like lie detector test. >> first of all, the expense they will go on is crazy. the government can do it for you, and they can get more information than uber ever can on their own. the government needs to do it. they are trying to have a special exemption so they can do it themselves. they have enough money. that can pay for the drivers to be vetted. it is unfortunate that all of these terrible tragedies and our hearts go out to california to new delhi in india, chicago and now boston. >> to be clear, even a yellow

cab driver has and can commit terrible crimes. sometimes they do commit horrible crimes. it is not just an uber driver. there was an attack this weekend that may have been a different company. >> what consumers need to know is there is a greater risk for uber and lyft, they do checks that are not as secure. a u.s. attorney general did a report of florida employees and license applicants and over 10% of them, people who had prior convictions. you will never catch every body. if you do catch somebody -- and people have a right to rehabilitation, but for serious crimes, dui, rape, murder, they should not be behind the wheel. consumers, we have control over our destiny. we have alternatives.

others that do government background checks. we have the options to delete that app. not only this but cyber security issues, we talked about sony and the things going on. senator al franken is really questioning the alleged, not just the alleged rapes and stuff, but the alleged spying and tracking use of data by uber. i don't know was really going on above hopefully we know in the future. the bottom line is when i put the gps in new york city yellow cabs under mayor bloomberg, we cut a deal with the liberties union where we said by law, we have to have security provisions of the data and any driver will not know -- and any owner -- where you are going in a new york city cab. we have laws that say it's illegal for the new york city

taxicab vendors that run the system to know where you are going a using the data. we should do the same for uber. >> maybe they will call you up and ask for your advice. >> i do not think that will happen. >> i want to read a statement. they said in november, the safety team began a global review to assess the areas where greater investments are required, and as we look at 2015, we will build new safety programs and intensify others. so -- >> well, if they call me i will talk to them. >> matt daus with matt miller. for more on uber, matt spoke with bill maris, managing partner of google ventures, which is an uber investor. he started by asking about uber's recent pr challenges. >> anytime you have a company growing as quickly as uber and this is a company probably the fastest growing have ever seen,

adding 50,000 jobs a month, you will face scrutiny of we are optimistic about the future. it has the potential of being one of the most transformative companies would have ever seen. >> an absolute home run for google. how was 2014? how are you doing? >> it was extremely busy. as of this morning, we had a company go public just this morning. we have quadrupled our investment in life sciences. and we announced a $125 million fund for europe and israel and on top of all of that, i managed to get married. it was a busy year. >> congratulations on the wedding. on the life sciences investment, it is obviously a hot area. health care is 1/3 of what you invest in now. is it the biggest growth area you are looking at? >> it is. it is a huge focus for us.

personally, an opportunity to make a profound impact on the world. life sciences is really becoming an information technology. there's a real chance to have an impact on the world that goes beyond just making people look at their phones more but help people live longer, healthier, happier lives. >> we all wish you luck because everybody wins if that is the case. for you to win, you have to have a good exit. that was more difficult over the past decade than it was this year. was it the best year for you as far as ipo's? >> it was a great year. we had nest exit our portfolio, which was the third-largest. we had 16 other exits including the one i mentioned this morning. i am proud of the work the team has done. >> ondeck this morning? >> yes, that is correct. >> what are we looking at as far as ondeck?

>> it helps small businesses get along that may not otherwise be able by using their own algorithms further risk. >> what do you think when somebody comes to you and say i have a company that is the uber of this or the airbnb of that? how do you react to that kind of a pitch? >> we get those pitches all of the time. we listen when people have an idea. the line between crazy and genius is a pretty thin line. we see that a lot. that is our job to listen to people who are telling us about their hopes and dreams. we are happy to hear the hitches. >> listening to david at tech stars last week and he was saying, most importantly, the people are pitching me than the people and then the idea. is that basically true across vc? >> ideas are cheap, they are free.

if i told you i had 50,000 ideas in it, you probably should not pay a dollar for that. if i told you i had someone who can execute on that and build the company, that is worth a lot. that's what we are looking for. people who can execute. >> does it matter if somebody helps out the google business or works on the android platform? >> it doesn't matter. if it is competitive and help google stronger that way, that is even more interesting. >> 2015, are you going to be focused even more on health care and life sciences since that was your biggest this year? >> that will continue to be a huge focus on our time, energy, and dollars even more than 2014. there is a huge opportunity there. >> you were instrumental in recruiting andrew conrad for google x. what does it mean for google ventures and for google in the

larger sense? >> andy has been a friend of mine for 10 years. i was proud of all the work he has been doing, which has the potential to be really transformative. it is not just a trend but important direction that the world is moving. think about health care as something as important as a mobile and delivery of internet services to the global population. health care is really important and it makes a lot of sense that the company and google ventures are investing in these areas. >> google ventures is not looking to make strategic and i am assuming you will work closely with andy and google x. how does it play with the other google properties? >> i have known andy and sergey, who runs google x, i have known for years, so we work closely with them. i have a huge amount of respect for them and their intellect. all of the people at google and

will work closely to understand the innovative areas they are working on. where destruction might come from and where opportunity is. >> bill maris, managing partner of google ventures. up next, can you make money on solving some of the world's most personal problems? that is the mission of a new firm started by twitter cofounder evan williams. we learn about obvious, next. ♪

>> i am emily chang, and this is the best of "bloomberg west." the goal of investing is to make money, but what if you could combine profits and purpose? twitter cofounder ev williams is hoping to do that with obvious ventures and will focus on what it calls world positive investing and will pour money into early stage companies focused on sustainability and health. for more on what it is, cory

johnson spoke with obvious ventures cofounder james joaquin. >> we are excited about it. we think the simple idea of combining profit and purpose is a great one and found it on our hypothesis they're really big companies will be billed by talking grand challenges in the world like climate change and chronic disease. we think there is an enormous amount of work and profit to be made and those are the company's world focusing on. >> that sounds cute, but does twitter solve a massive world problem? >> twitter have given hundreds of millions of people a voice and we can point to social change that happened through that. for us, that is positive. >> it is interesting in the case of twitter going back to blogger, media focus. you are talking about things far beyond and giving people voices through technology. >> we have three themes at obvious ventures. one is sustainable and that is

for-profit solutions to climate change. new kinds of sustainable resources. we invested in a company called beyond meat, and they are taking plant protein and craving protein products that are an alternative to eating animals and that is good for the climate and big business. >> it is huge. protein is the most expensive part of every meal and hard for people to get enough of. what is the second? >> we call people power. we think there is an opportunity to use cloud and mobile technology to empower individuals and small businesses. we have almost 30 million small businesses in the u.s. it is where job creation happens. those businesses have been underserved by technology. with the advent of the smartphone, new businesses that actually give small businesses a

full stack of services that their run on their smartphone. >> what is breezeworks? >> breezeworks is a great san francisco startup and they make software for plumbers, carpenters, people run their business out of their truck. they can do ever been from scheduling to accepting payments on the smartphone. >> it sounds like a huge opportunity. >> we think so. >> this piggybacks on these fundamental changes in technology, mobile and the cloud and social. >> we call it a digital democratization. everybody has a supercomputer in their pocket is fundamentally game changing. >> does it mean someone will walk in with a pitch and add one more page and say we are a do-gooder or fundamental way of thinking about it? >> one we have written about obvious ventures for us is the opposite of corporate philanthropy.

not about running a traditional business and doing some good on the side. not that we are against it. we are looking at businesses where it is integrated. >> every company should do what salesforce is doing, a certain percent of revenue to charity. >> that is right. we love that companies to do it and we want to go one step forward. we look at companies where each dollar of revenue has social benefits. >> does it change the way companies -- let me ask. when you look at your career when we met a long time ago, you were doing something, did you think about in terms of what it meant socially? that was not the purpose. >> photo was the beginning of my world-positive journey. i would get e-mails from customers saying thank you so much. i never met my granddaughter and

i just opened a photo envelope and saw pictures. a woman in guatemala sent me that note. >> it was a photo sharing service. >> one of the first. >> it was a competitor with a lot of other firms, flickr and others, taken over by kodak. [laughter] >> you had that happen to you. did it change the way you did your work? if the companies have a different sense and proceed to do it in a different way? >> i think so. it did for me. i certainly thought much more about what is the meaning of the business i am building? how do i combine money and meeting. that's another of our dualities. we are seeing a wave of millennial entrepreneurs that want to work on something that matters. >> james joaquin, cofounder of obvious ventures, with our own cory johnson. up next, making money on your smartphone by playing games

could be the next frontier for gaming companies. we speak with ea founder trip hawkins about the potential, next. ♪

>> you are watching the best of "bloomberg west," where we focus on technology and the future of business. i'm emily chang. these days, practically everyone plays games if they have the time. what if you could win some money while killing time? that's the goal of a company called skillz. it allows users to compete in cash tournaments on a bunch of mobile games like bowling and cool, and the company just got a big boost by hiring trip hawkins, founder of electronic arts. our cory johnson spoke with him and skillz ceo andrew paradise. >> we operate a platform inside each game. it's the games you know and love and now you can compete inside them for virtual currency or

cash. it's legal. >> if you are breaking the law, live television is not the way to announce it. >> it's like the pga tour. we only operate skill-based games. this is in jurisdictions where it's legal. the new york marathon is an example. the pga tour, there are a number of growing companies that are virtually organized. >> what do you see in the history of games where this fits and why it might be attractive? >> i think after defining and building ea sports, i think there are two big trends. i does want to comment. the first is running a little

company. there is a chance for us to do something for kids with game technology and a lot of ea sports fans have kids. >> yes we do. >> we just launch this on the iphone a few days ago. it's an emotional iq game. you can search for "if" in the app store. the other trend we are talking about is i am helping young entrepreneurs like andrew build new companies. he is a great example of this next generation of entrepreneurs that are going to carry the game industry forward. the idea of hard-core gamers that want to battle for prize money, it's a very big idea. it makes sense that sports are finally going to segue into the virtual world. this has the potential to be an enormous market. i got involved because they have a great platform. they can bring this in a scaled and fundamental way to mobile devices. >> we have reached this point

where we have been talking about forever, would this be competitive? would people compete in public? we see arenas of people playing games for money. is mobile the right platform for that? >> we care about what our culture values. i get into sports by watching sports on television. that is how i got into sports and sports simulation and building ea. today's kids are more likely to be playing video games. they would much rather watch a tournament of their favorite video games being played by professional gamers and if they want to compete -- it's like the rock 'n roll revolution. everybody wanted to be in a band. we all have that fantasy. video games are a big industry. >> i was more of a rapper. with my kangol and the chains. are kids important to this? >> what trip said when i first met him before he became our advisor is we are at a point in

time or video games have been around for about order years. you need a game or set of games to be around for that amount of time before they can transition into professional sports. when you look get videogames in the 1970's, the first cash competition was held by atari for space invaders for $20,000. games like that are iconic and they have lasted for that timeframe. now games are part of the same opportunity that professional sports like football or basketball that we are more familiar with. >> i remember betting on the side, that was probably illegal. >> i love that game. >> battle zone was a good game. trip, when you are counseling these people coming into the gaming is this, is her a common -- is there a common mistake that they tend to make in terms of building a popularity around certain games? >> there are a bunch of common mistakes, and i have made all of them.

one of my jobs is to tell guys like andrew not to fall into the same traps and holes. there are so many things. building the culture of the organization and your hiring decisions and how you motivate and reward people. those are the basics. one of the things i like about andrew and skillz is he's already gotten off to such a great start. he is going in a fundamentally sound direction. you need to have a big idea. this is a very big idea. >> working with someone like trip, has he given you any good ideas? >> there been a number of moments like that. it's interesting for me because growing up playing games from electronic arts, it was so exciting to work with a legend like trip. he pioneered a lot of my favorite games. the idea of him pioneering sports and bring that to mobile

in a new way was compelling. that was table stakes. as we started to work together, trip has been so insightful on things like human resources and how to build a great team and to inspire and lead them. that has been an amazing experience for us. >> electronics arts founder trip hawkins and andrew paradise, ceo of skillz with our own cory johnson. coming up, blackberry ceo john chen talks to me about the company's earnings. is blackberry really on the comeback trail? that is next. ♪

>> this is the best of "bloomberg west." i am emily chang. blackberry is it hit right keys with investors. they had disappointing revenue even as cash turned positive

earlier than expected. i spoke with ceo john chen. i started by asking -- when will we start seeing revenue growth again? >> we are going to turn out positive cash flow before we get to revenue growth. we are going to launch a lot of products. revenue growth will come sometime next year. >> new phones are showing promise. you have the classic just announce, the passport. tell us about who is buying these devices. how many of these are new blackberry customers? how many of them are upgrading from old blackberries? how many are using blackberries as an additional or second device? >> i think you see a lot of people using two devices. i have a new product year, around june. it will make -- i want to convince people to go to one device. obviously the blackberry device. in the case of the cloud space,

more uptick from the in-store base and people who have used the 9900 product. the older blackberry product. i think those people will be resonating with that. the passport is mixed. there are new users. they come from other devices. there is some win back. there are people who came back. there are a lot of loyalists. the classic is good for current users upgrading. >> we saw hardware sales down, but software sales are up. how do you expect that to play out over the next quarter? >> i am hoping both go up. the one reason that people need to understand and they need to

go into it, i understand the impatience of the revenue thing. it was the quarter that was important for us to clear out our old inventory. year over year, 93% of our inventory was cleared out. i am very pleased with where we are positioned. we have very little inventory. i can't produce the old phones anymore. that is clearing the way to get to the new phones. i'm not concerned about it. the investors have a different view at this point. >> apple and ibm, john, just showed off their apps geared toward the ipad. what do you think? how much of a threat are they? >> that is always something we have to take seriously. we are aiming in the same as space. the enterprise space. those are workflow products. it is not very deep. the one thing about their

collaborations, they are very much on a proprietary system, the iphone and the ipad. that is nothing to ignore. i am not the first one to tell you that. our solution, we have equivalent solutions, are more open oriented. they can be run on any device. we can manage all of those devices. the partnership we strike is a little but more broader. like with salesforce.com and others. i think we're going to continue to stay open. >> you just closed a deal, john. what are the chances we see another acquisition in the next six months or so? what area of the company do you think could be bolstered by another acquisition? >> acquisition is certainly something of interest to us. now that we have the ability to generate cash from operations, we have $3.1 billion in cash.

i shouldn't comment on acquisitions myself. if there is one to be done in the future, i'm interested in the iot world, the internet of things. you can see that we have a lot of partnerships in handheld and the medical world. you will see us more interested and more progressive in that world. >> i know we have talked to you about the internet of things. we know you are going to be speaking at ces. you are going to unveil the internet of things' strategy. what are the chances that we see a connected hub for the home device? >> not a connected hub for the home device, but something we are strongly interested in and working on. we have strong connected cars.

you come to ces, you will see one of those models. i think it's going to be the maserati. >> you gave yourself a better than 80% chance of turning the company around. what would you give yourself today? what are the chances? >> i hope we are going to be here to stay. i don't want the headline to be 100%. anytime you say that, you might jinx it. i will give it 99%. how is that? >> blackberry ceo john chen there. well, hampton creek, the start up behind eggless mayonnaise, has just raised $90 million as it fights a lawsuit against unilever. we asked the ceo what he plans to do with all the cash next. ♪

>> i am emily chang, and this is the best of "bloomberg west." hampton creek is hoping to change the future of food. the company behind egg-free mayonnaise just raised $90 million from some big-name investors, including marc benioff and eduardo saverin and yahoo! cofounder jerry yang. cory johnson sat down with the ceo josh tetrick to talk about the company's plans. >> it starts the basic premise that 99% of what we eat isn't any good at all. it's not good for our bodies or the planet. >> that leaves a pretty big market. >> we want to bring out products that we have the ability to make better. in the case of mayo, how do we

make something that is more affordable and has better health. we like to pick products that connect with people emotionally. cookie dough, there is a natural authenticity to it. we like markets that are large. we are going to come out with pasta next. that should be toward the end of next year. >> i am so conflicted about your business. it sounds like frankenfood. the way you talk about it, it is the opposite. there are natural ingredients instead of processed food. tell me about the conflict. >> let's talk about what it actually is. there are 400,000 plant species. the world has really only search through about 4% of them. we search through the plants, we pick the best of them, and then we use the best of them to make food better.

take this cookie dough. it is certified by the non-gmo product. there is no chemical engineering. we are using plants from the open and we make food better. >> why not do genetic engineering and use the best the chemistry has to offer? if you are going to use the best that math has to offer. >> it is perception. that is part of the reason. it's important to us we connect deeply to everyone. we don't want to get political about this. we don't need to. we can just use plants. without engineering them, they are good enough. that allows us to what we need to do. >> it's a marketing decision? >> it's both. it's a big perception and also can we do it without doing that, i think it's good to do that as well. just may philosophical perspective. >> the most intriguing thing about your business is the product itself. using notions of how to develop product from the technology and math world,

that's a different universe. how do you codify that choice how you run your business? >> to your point, let's use data sites. what we do is we screen plants. we get all the data and we put them in a database. we have computational biologists and food scientists that take the relationships and the data and bring it together to make better food. the reason we take that approach is i tried a different approach when we first got funded. i thought we would run out of money. >> the approach was what? >> the approach was let's order lots of commercially available ingredients like kellogg's or nestle or general mills might do. let's see if it works. let's see if we can make cookie dough with it. i got nowhere. i burned through the money. this was my dream to start this company. we did not get anywhere.

what if we bring in biochem and data science? with each discipline we brought in, we got better. if you think differently about it, it's almost as if we didn't know any better. that's when progress happened. >> do you have a roadmap to get stuff on the shelves? >> we definitely approach it differently, so we are not in the business of paying fees for our product. we have been fortunate with the retailers that we work with. that is not a part of a we do. >> whole foods? >> we are the number one selling mayo there. that was the first company to introduce the mayo. our most important partnership is not in retail. it's with the food service company. 4 billion meals this year. the scale is massive. it's not just about creating

template taste better, we went a cost structure that enables us to sell these things at a more affordable price. >> josh tetrick with cory johnson. leaving los angeles, will the adult film industry funded and home after losing an appeal over portrayal of unprotected sex on film. larry flynt is next. ♪

>> welcome back to the best of "bloomberg west." i am emily chang. a federal appeals court has upheld the los angeles longer wires adult film stars to wear condoms in movies that are shot in the city. the industry claims it violates free-speech rights. it seems to be having an impact. according to film l.a., there has been a 90% decline in the

number of x-rated productions in the city. matt miller spoke with larry flynt. >> we're going to appeal it to the supreme court. i've been there five times before, it's still a good batting average. as far as the photo shoots themselves, as token with all of the adult houses in the city. they are either doing it in mexico or canada. there are other venues were you can go shoot. it's not really increasing their overall budget during if they go to mexico, they do two to three weeks instead of two or three days. the whole thing about this is the public is not getting the

truth about this. this is not protecting actors from disease. it's an orchestrated effort to try to shut down the adult industry and this is the way that they are doing it. when all the testing that we have in los angeles for the actors that star in these films, you would be more likely to get an std from a one night stand the new wood from being a porn star. we have had half a dozen cases of hiv. compare that to the national average. >> some companies are playing ball. vivid uses condoms and a lot of its films. >> we have done marketing testing with this. so have all the houses i know

of. whatever the reason is, whether it's a psychological thing, people do not buy films or the actors are using condoms. >> larry, how much are people buying anyway? i recently asked a millenial about pornography viewing habits. she said it should i ever buy anything? >> or you can download it on cable or get it off the internet. that's true. that's why publishing is doing poorly and the dvd businesses doing poorly. there will always be a market for pornography. for born.

it's just a matter of delivering a quality product to people. >> larry flynt, first amendment advocate. that does it for this week. you can catch us monday through friday. see you next week. ♪

>> it clearly had an impact on the way people begin to think about economic policy. >> i was totally aware that a revolution was starting. >> if we did nothing else, we changed the world. >> this is how i tasted my first cup of coffee. >> boy, this is the first time in years. >> oh! [laughter] >> ooh. >> stand by, take three. >> knowing for sure whether it was going to work, no. but what a grand experiment.