cory: live from pier three in san francisco, welcome to "bloomberg west." every weekend, we will bring you the best of west's top interviews. our top story, the fcc approving historic new rules preventing internet service providers from blocking or slowing down traffic. it also subjects the internet to title ii regulation. the vote was 2-1 along party

lines. here is fcc chairman tom wheeler. chairman wheeler: after a decade of debate and an open, robust, year-long process, we finally have legally sustainable rules to ensure that the internet stays fast, fair, and open. cory: over the next 20 minutes we will have an in-depth discussion on net neutrality and what it means for global business. we caught up with steve wozniak who attended the vote and had these comments. steve: the internet was so beautiful when it first came. even when it was dial-up. it was such an open and free expression form, and over time decisions were being made by the isp's, the gatekeepers, you might call it. do we trust them to make

decisions? no, we need some kind of supervision of their bad behavior. are they likely to make deals and accept bribes? peter: you are confident that the rulemaking adapted today will in fact ensure an open and free internet? steve: i think it will be a positive step. i think the other side is also for open and free internet. the decision today goes a lot further than net neutrality. title ii regulation means oversight of bad behavior, not meddling, not controlling things, but looking for bad behavior. or could be a lot of things that are illegal, unconstitutional behind the scene of the big isp's. i do not think we can trust them that much. this is for the people, the consumers, the average joe against the suppliers, that have all the power and the wealth. they feel hopeless and helpless. here 4 million of us signed

petitions, and it is an indication that the people can sometimes win. we have had a lot of defeats over the years, but sometimes we have a win. peter: some say this will stifle investments. that is going to dry up. steve: tom wheeler himself pointed out in an article in the "wall street journal" that said, we really do not think it will matter. no, i do not think this is running their business. this is just having oversight of bad behavior, when they do bad things for the people and customers. peter: what about the notion that this a solution to a problem that does not really exist? throttling and discrimination is happening now on the web? steve: there are maybe things in the background we do not even know about that of been going on inside those companies, because they have not had enough oversight. we do not even know about it.

as far as net neutrality goes, everyone agrees we need net neutrality. there are bills by republicans in congress, of course after fighting it for years and trying to overturn it, now they say it is the right thing to do. at least pertaining to that part of this decision, this order. peter: let me just ask you, if you were trying to start a company today, the apple of the future, will today's decision making easier? steve: i do not know that make a difference. yesterday it would. in the earlier days, it would. after a while, it condenses down to a few take players, the big 800-pound gorillas who do everything to stifle and not let the little guys get in. and the innovators from the outside. i think it improves it but slightly and only in restrictive places. i'm hoping things like broadband, able to be declared a necessity, brought to everyone. there is no big isp that will

bring broadband to my house. i live a little segway ride into town. i do not have broadband. i am in silicon valley, and i do not have broadband because i have no choice. it is a monopoly. that pipe, that is what i grow up with knowing, these are the utilities. the things that we needed for life they came into our house that we had no control over and did not have a choice. cory: apple cofounder steve wozniak and bloomberg's peter cook. it is a huge win for some internet activists, who launched a grassroots campaign. here's evan greer of fight for the future. evan: this is an unprecedented victory that everyone, a year ago, thought was impossible. they did not anticipate what happens when any institution of power comes to take away people pass internet freedom.

and they should have because any time that happens, people rise up. we use the internet to defend the internet. we do not have millions of dollars or an army of lobbyists we can send to the fcc to get our voices heard. we built tools using cutting-edge technology that made it easier for the millions of people who care about this issue, to have their voices heard in washington, d.c. cory: it is really an amazing thing with our society that does not like to vote unless it is a presidential election, to see such an uprising of voices regardless of what side you are on. even if there is a side to this issue. you did things like a countdown clock to the vote, which kind of kept the drumbeat going. talk to me about how that worked and health people were able to incorporate that in other places of the internet, not just your site. evan: sure.

what we did is, we built a 12 that made it so that any website could put up that countdown timer, ticking off the seconds literally until we get net neutrality. we got more than 20,000 websites to do that for the month leading up to the fcc vote, which helped drive an enormous amount of phone calls and e-mails to members of congress to let them know that if they come and try to take away this victory from the internet, the internet will come for them and it will not go well. cory: evan greer, campaign for fight for the future. we will be right back, talking with some opponents of the net neutrality vote, call it dangerous for american consumers. ♪

cory: i'm cory johnson, this is the best of "bloomberg west." congressional republicans are

criticizing the fcc's decision to subject the internet to title ii legislation. i spoke with representative kevin cramer just moments after the vote. representative cramer: i disagree with him fundamentally on the need for this type of a rule, that i do agree with him -- and i think the vast majority of republicans in congress agree at we ought to caught a fight in law some of these provisions. throttling, those things we agree on. the idea, however, even the idea the fcc is overwhelming the title ii authority i think is the wrong way to go. we talk about process, and i appreciate what he had to say about the timelines and meetings and whatnot, but it did not seem like this rule reflects the majority of congress.

i think provides more certainty and frankly more confidence, both to the consumer and the investment public. it is unfortunate they trumped congress today, but this is the only the beginning of the litigation process. cory: congressman, it is interesting to hear you take a middle stance. there's an argument of no regulation at all. there's the argument that says title ii is the best way to go because these companies have a responsibility to consumers to provide them important access. i guess the argument that you are making is title ii is the wrong way to do it. chairman wheeler just said look, under title ii, the telecom companies have spent hundreds of millions of dollars providing service. are you saying that is a bad thing? that that kind of innovation will not happen? rep. cramer: i am saying that it is unnecessary, and when you give that type of leeway, that type of authority to a regulatory agency, which pass

this on a 3-2 vote, it opens the door to lots of other things. while he has given assurances that other things like price controls would not be part of his leadership, there is nothing to prevent the next chairman, or the next commission. and why go that way? why always rely on forbearance to be the exception? why don't we leave the internet as open as we can, and let the consumer, let the innovator to be the regulator as opposed to the government? quite frankly, whether it is the fcc, or name your agency, over regulating which could lead to why open that door when we already have people working from both parties on a congressional solution i think is more middle ground. cory: you struck on an important word here, "forbearance." forbearance gives the fcc some

leeway in terms of enforcing this rule, yes? rep. cramer: it does give them some leeway but it gives them discretion. if we will trust our discretion to forbear certain things, why would we not trust their discretion on other things like specialized services, as an example? if we are going to give discretion to the commission let's trust them a little more to do the right thing, as opposed to give them the authority and hope they do the right thing. cory: in defense of the commission, they tried that before. the courts threw that out and said you have to have a stronger legal basis. title ii gives them that, yes? rep. cramer: yes, title ii gives them the legal basis if this can in fact be upheld, and i'm not sure it can be. it will be litigated, and litigation as we know is a long process, throws uncertainty into the mix. it is my hope that once the litigation begins, and the chaos

begins, quite frankly, that that will bring more democrats who in recent months have drifted in defense of their president, in defense of mr. wheeler. hopefully it will bring them back to the negotiating table for a more common sense, moderate approach as being proposed in the energy and commerce committee. cory: that was congressman kevin cramer, republican of north dakota. also speaking out, former fcc commissioner harold furchtgott-roth who says these rules are not good for consumers. harold: here we have in the united states, for 20 years writing itself on not regulating the internet, and something has changed. this cannot be good for the american public. cory: yet those who advocate title ii say that something has changed, the internet service providers have started to charge fees to pick favorites, winners

over losers on the content side. are you saying that title ii is the wrong way to do it, or any regulation on the internet is bad? harold: i do not believe there is any need for regulation. all of these allegations about isp's imposing charges on service -- on content companies, this is all hypothetical. they cannot point to actual examples. this is all regulation in the name of what might possibly happen in the future. it is not addressing actual problems that we have today. it is not addressing actual complaints that are before the fcc. cory: let me respectfully disagree. netflix has been compelled to pay to get ahead of the line. as a company that opposes having to make those kinds of things. let me read a statement from reed hastings, the ceo of netflix. what he had to say about this specifically, he said strong net neutrality prevents isp's from charging a toll to services like

never ask. they must provide significant access to their network without charge. he goes on to say "allowing fast lanes gives isp's the perverse incentive to allow networks to congest, and the power to pick winners and losers on the internet." this is a company that has been compelled to pay this to comcast, to verizon, to get ahead of the line. harold: i respectfully disagree. i am afraid that what we are seeing here has just been from netflix. netflix entered into agreements for contracts with verizon and comcast to effectively put themselves at the head of the line, in front of millions of other content providers and users on the internet. before netflix entered into that agreement, it was treated the same as everyone else. that is what title ii is going to require. it will quite frankly prohibit the type of contract netflix

entered into. cory: they do not want that. that is their argument. furthermore, what they say is that it lets the isp's congest their networks or make their networks look congested so they could charge that fee, and there was sort of the perverse problem. what do you do for that problem, creating an incentive to create that congestion for the benefit of more income? harold: first of all, i do not agree that there is a problem. i believe a lot of this is a manufactured problem. let's hypothetically say there is a problem. is the solution to impose telephone regulation on every broadband provider in america? is that really the path we want to go down? is the solution to congestion problems to make every isp in america look exactly like the telephone company? i do not think so. i think this is the wrong solution for a wrong problem and a problem that likely does not exist.

it is all hypothetical. cory: hypothetically, but not hypothetically, twitter has not had to pay this type of fees but has come out strongly against it. i want to read a statement from twitter to see if i can get your reaction. twitter telling us through a blog post on our site saying -- "we strongly support ensuring that such net neutrality rules include prohibition against blocking, or throttling of sites and services, as well as paid prioritization of some traffic over others." i feel like the companies in silicon valley, maybe most of them, see real problems and this for the development of the services they have already created and the development of the services going forward. harold: first of all, again, twitter does not point to an example of a single website that is being blocked by isp's. in the past 20 years, the fcc has had complaints about one site blocked, and the fcc took decisive action to unblock that.

it did not require new title ii regulations to do that. cory: that was former fcc commissioner harold furchtgott-roth. we will be right back. ♪

cory: this is the best of "bloomberg west." i am cory johnson. it was a blockbuster trial that had a major influence on silicon valley culture. she is suing her former employer. in her lawsuit, she says she was pressured to have sex with a coworker, and spent five years retaliating against her after she broke off the affair. they say she never complained about the affair until later. what does this say about the place of women in silicon valley? professor williams: this is quite different from what we have been hearing about.

on one hand, i just completed a survey in stem, and one third reported sexual harassment. most of what we have heard of, of women in silicon valley is much more subtle stuff, women being called aggressive as opposed to a assertive. women having to prove themselves over and over again. as alleged in the complaint and we will see in trial what comes out, but there were literally quite different business rules applied to women and men. business rule that were directly related to pumps, for example. women not invited to important male-only business dinners. this is very, very different from what has come out before, and really is the kind of thing that was going on, for example in law and medicine 20 years or 30 years ago. cory: bill, is this an outlier

for something that is more subtle and pervasive things that are affecting women in silicon valley and technology? bill: not necessarily in my view. the courts look at each situation case-by-case. when you are in the trenches you are looking at exactly what happened here. she has direct evidence that statements were made to her, she was denied compensation, she was sent to siberia, men were promoted over her. this is typical of her most sexual harassment cases, and women face this all the time. it will be a situation of what the jury feels occurred, and how they want to dole out the damages if they think there was a problem. cory: as a straight white guy, the last thing i want to do is take the devil's argument here, but i wonder if the case proves she was not sexually

discriminated against and indeed that she was such a crummy employee. if the case does prove that, is it still useful to look at these issues through the lens of this case or is it damaging to do so? prof. williams: i think it is important to look at it through the lens of this case for many of reasons. she does not allege sexual harassment, she alleges retaliation. once she brought this to the attention of people in the firm, the coo, the head of hr, and they basically were not responsive, or they were inappropriate. for example, she alleges that one partner suggested a one-on-one lunch with the man who had in fact harassed her. not a professional way to handle that kind of complaint. if you have an employee who is

alleging either sexual harassment or gender discrimination of any kind, very important to take it seriously to get on it, immediately conduct a thorough and responsible investigation, and act on it. cory: i would say, duh, except that kleiner perkins did not get this if what she is alleging is true. bill, is it damaging, is it even not helpful to have this discussion if it was a crummy investor as opposed to someone who is sexually discriminated against? i have no idea. i just wonder about this point. bill: basically, in every one of these cases you have the same situation. you have the employee saying they'd have been retaliated against, that things have happened here it and you can employer saying there is a legitimate business reason. what is striking to me, cory, is the case is actually going to

trial because there will be a lot of inquiry into the way the company does business. no one wants to know about the way you make salami, and that will be revealed here. with respect to mr. howe, a lot will come out about her life her emotional distress caused with other things, her relationship with her husband, her motivations. it is really nobody wins. it is less about money and more about vindication and position in the industry and trying to not accept each other's position. most of the time these cases do not make it this far, so there is definitely some bad blood going on here. cory: the fact that tom perkins, one of the initial principles of the company, stated the company had returned to its highest ethical standard, does that matter a lot? that was one of the first things that came out of the trial. bill: it will hurt the company just being in the trial. when you are brought to task with the national spotlight on you and you have to explain yourself, regardless of the outcome, i think the company

will take a hit. talking ethics is probably a good spin at this point. cory: frumkin & hunter partner bill frumkin and professor joan williams. best of "bloomberg west" will be right back. ♪

cory: you are watching the best of "bloomberg west." we focus on technology and innovation. massive charges, layoffs falling sales, currency headwinds -- everything is happening at hewlett-packard. except for sales success. the 76-year-old tech pioneer in a critical phase as it prepares to split into two. they say the cost of that split will now hit $2 billion over several years and it doesn't include the cost of layoffs. and yes, there will be more layoffs. job cuts will hit 55,000 by the end of the fiscal year. but cfo cathie lesjak is hinting about even more cuts during that

spinoff process. meanwhile, ceo meg wittman insists that the turn around is on track, even though sales fell for the 13th of 14 quarters. i spoke with jayson noland. jayson: the biggest surprise to me was the free cash flow. $3 billion. and some of that was currency translation some was foreign tax. but a big component was the cost of separation. legal fees, consulting fees, there's a lot of work that has to be done to separate these two companies. i think it's the right move long term but that was a big surprise to me. i did not expect $3 billion. cory: let's talk about this. it's very different than earnings. free cash is the money that the company collects. there's a lot of sort of back and forth stuff that goes on on the balance stuff that leads to that but it sounds like that didn't include the cost of layoffs. that could be more than that. we have argued that is beating

to become a smaller, more focused company. cory: but the free cash flow at hewlett-packard for the last year or two or 18 months has had cory: but the free cash flow at hewlett-packard for the last year or two or 18 months has had the benefit of factoring, which is barely mentioned in the quarterly reports in the circular reference. the word factoring shows up twice in these reports. but they've been selling their receivables from their customers. these are their customers.

good debt. they've been selling that. boosting free cash flow but are they kind of running out of those kind of tricks to boost free cash flow? but they can only take that so far to your point and that 10-day to 12-day range that they cory: so if you look at that the way they boosted that free cash flow by selling receivables make. maybe i'm a conspiracy theorist but i look that a quarter of the pay or bonus pay is based on cash flow earnings improving and they're selling receivables. am i crazy to look at the profit motive? jayson: not at all. but you can only do that for a certain amount of time. the company was obviously overly enthusiastic when they gave that $6 billion knowing they had to separate the two companies. they should have been more forth right with investors, but a lot of people were caught off guard by the guidance coming down. cory: finally, we couldn't talk about this forever but we cannot

talk about it forever. enterprise services, the business of -- which i think of as armies of consultants marching in and helping with the technology solution. that should be a great strong business for them. that was horrible of course down over 10% year-over-year. jayson: that's another one where it's getting smaller, profitability starting to come back. they inked a big deal with a large investment bank. and that is really were hp can come in, sell services software, infrastructure, and be better at selling the breadth that they have. they have more breadth than any other large cap tech enterprise company. they need to do a better job of stitching that together. cory: that was jayson noland with baird. the best of "bloomberg west" will be right back. ♪

cory: i am cory johnson. this is the best of "bloomberg west." google buying technology and patents from softcard, a service backed by three of the biggest wireless providers. at&t, verizon, and t-mobile worked with google to preinstall its app. but is this going to help google take on apple pay? i talked with the ceo of the pay plan called zipmark. jay: apple pay now has the first real competitor. i think if you look at the way that apple pay had been approaching the market they approached it in a sort of holistic kind of way. they lined up the bank, they lined up the hardware obviously, because that's what they do. and the consumer experience. and then they launched. and they're continuously adding issuers. they have some support from mastercard, etc. google wallet is the early entrant didn't approach the

market quite that way and i think what you're seeing now with this deal with soft card is the capitulation of the model that the mobile carriers are going to run with it. so now you're seeing that model being exited and really having a full staff competitor with google at the helm to compete with apple pay. cory: google may have been the pioneer, but you can judge by the arrows in their back. tim cook last week said that two thirds of all contactless payments were going through apple pay in the fourth quarter. suddenly they're the one to beat and they're very new to the market. jay: i think that's more of a statement on how poor the adoption has been for the other two players in the market. not to take anything away from apple. it speaks more to the adoption and thus to overall market share. we will see that start to even out as more standards emerge. cory: you tell me, the requirements of merchants to accept liability after october 1

if they don't have new cash registers. is that going to drive a big upgrade cycle towards contactless payment as well? jay: i think that it will. because in order to incentivize these kinds of changes merchants really need to have a business driver in order to retrain their staff, change all their hardware, all this infrastructure that they have. and a lot of these merchants have lots of locations to do this in. when you put something in place that has a real functional money value to it, that decision can be made. and the other players in the ecosystem benefit as well with this shift. cory: is this a marketplace kind of business where really it's going to be one company that ends up dominating or will there be a couple or even dozens of payment platforms? jay: i think that there's certainly room for a couple of winners. i think with this move and google lining up with mobile carriers and being able to distribute their application by default on all the phones, it will also bring a space where more innovators can enter more easily.

and it will be interesting to see if google does what apple did with the banks and line them up. at zipmark, we are a payment processor. we know how important it is to have good relationships with banks. so i think it will be interesting to see how they bring the ecosystem in line with their new standard. and that will determine how much of the market they can control. cory: is the fingerprint only as an option on the iphone, or for the 5 and 6 plus, is that a significant differentiator here? or do you think customers are going to continue to engage in sort of unsafe activity with their payment systems and phones? jay: i think that biometric identification will ultimately become something of the standard as it becomes cheaper and cheaper. whether it will standardize on a fingerprint or eye scan or voiceprint all of those can become a dominant standard. i think right now it is a differentiator for apple in terms of convenience for users.

cory: that was jay bhattacharya. just when you thought you had seen the most of what ed snowden could release this incredible revelation that the nsa, partnered with the u.k. spies were spying on google, facebook, wireless carriers so they can get the secret codes to sim cards made by a company called gemalto. i talked to a former nsa employee about those very charges. listen to what he had to say. col. leighton: encryption is after all, all about the keys and in this case and very complex algorithms denote the most modern encryption systems. and it's very hard by themselves for agencies like the nsa to go in and break the more modern encryption systems. that's why they're constantly looking for things like back doors for other ways to get in there while so that they can read traffic when they need to. and the whole idea is to get after a target when it's necessary to get after that

target. but the basic elements of course pertain to everybody that uses sim cards and that's basically the entire population that uses the cell phone. cory: there's a mention -- one of the documents indicates that the brits got access to 300,000 cell phones or mobile phones in somalia and said, we do not need to use these. we gave them to the nsa and they were appreciative. but the notion that they would go after 300,000 phones that they had no reason to want suggests that this is a vacuum cleaner of access, not a target of terrorists. col. leighton: this is the entire program with collection as it exists right now. intelligence agencies have to look at, do i approach this from a vacuum cleaner perspective or do i go ahead and have targeted collection? technically, of course the targeted collection piece, going after specific people, entities, phone numbers, is a much better way to do it, much more

efficient. the problem that you have is if you do not understand the general landscape of this signals environment that you are operating under, you will not have a way of actually finding that proverbial needle in a haystack. the target you are looking for will not become evident until you understand the background of that target. that is the difficulty intelligence agencies have and that is why the vacuum approach is still being used. cory: gemalto responded to the article of the intercept, and i want to give them their chance to respond, they said -- “the intercept indicates the target was not gemalto per se, but to cast the widest net possible to reach as many mobile phones as possible.” essentially they are saying, that is what was going on, there was this approach to try to get everything without letting anyone know.

certainly in holland they are ticked off about this because the u.s. is supposed to be a cooperative partner with holland. is this the kind of thing that has always happens by agencies or is this a change that is happened in prior decades? col. leighton: what you did in prior decades was cooperate. so when you are dealing with a partner like holland or other western european partners, it was decades ago to tell them what you were interested in and they would assist from their local law enforcement agencies or their intelligence themselves, there are a lot of things that are different about this. the business relationships that global companies like gemalto have is because it is not just a dutch company, it is a global player, and they are the largest producer of sim cards in the world. they have a vested interest in maintaining security.

the nsa and counterparts in other nations have a vested interest in finding out how to go after certain signals and encryption algorithms so they can then track people they are interested in. cory: that was cyber security analyst colonel cedric leighton from washington, d.c. we will be right back. ♪

cory: this is the best of "bloomberg west." i'm cory johnson. smartphones and tablets have transformed the way television is watched, and the way it is made. this week's episode of the popular abc show "modern family" was filmed entirely on apple devices. shelby holliday spoke with a producer of the show, steve levitan. steve: the bigger story to me was the fact that the entire episode takes place on claire's computer screen. i find that to be the most

interesting part of this. we just wanted to do it in a way that seemed as real as possible. so we just used the devices that one would use in real life. shelby: picking up a device is really easy to do, and connecting with someone across the country is really simple now. i have a feeling that producing this episode and directing it they not have been so simple. what challenges did you run into? steve: there was a lot that went into this. first of all, the hardest part was coming up with the storyline in which we could feature all of 11 or 12 of our actors, and still stay on one person's computer screen. once we had the original idea for the story, things fell into place quickly. it was not so much how are we going to feature everyone, but

how will we fit all this into one episode? originally, we were going to have the actors shoot themselves, holding up a phone but there were other considerations about framing things properly and not shooting things off the set. we devised a method where the cameramen, our camera people were used to shoot them with the phones, so it did not look like the phones were floating out in space. the actors were instructed to always keep their hand on the cameramen's hand. that is how we did it. it was a very romantic day. shelby: was there any product placement involved? did they pay for any of this apple placement? steve: other than providing the products that we use for the episode, no. this was purely a creative decision on our part, just like the ipad episode was. i happen to be very tech-y and i like this stuff. in the last episode, we needed a reason for phil to be waiting in line, and it happened to line up with when the ipad came out. it was a natural fit.

and here, once again, this just came from my life. i was facetiming with my daughter from college and looking at my screen, and there was some e-mails and a script i was working on. i could see her and myself and my wife standing behind me, and some webpages opened. and i thought, this paints an amazing picture of my life. you can tell a lot about me from this one screen. that is where the idea started. shelby: this is not the first time you have featured apple devices in your show. we see devices of on television all the time, but we do not necessarily think about the collaboration between the technology company and the television studio. how important is that relationship? steve: well, listen, it is a fine line because we are not here to sell apple products. that is not our goal in terms of

this episode. they may advertise with us, and that is wonderful. i know steve jobs was a big "modern family" fan, and that was very meaningful to me. i know many of the people at apple are fans of the show. we are big fans of their products. really, this is much more of a personal interaction than it is a business relationship. shelby: how impressive are these cameras that can capture an entire episode on television? steve: i think the smartphones today, not just apple's, but other companies' cameras on their phones are amazing. most viewers would be hard-pressed to tell a difference. we have actually snuck in some footage from iphones in the past in our episodes, just because we needed a quick shot. it is pretty hard to tell the difference. it is amazing. it opens up a whole new world for amateur filmmakers and

budding filmmakers, people who are just beginning, because you do not need the initial huge investment anymore. you can make a compelling movie on your phone and your computer. and all you really need is a great story and some great characters, and off you go. cory: that was "modern family" executive producer steve levitan and bloomberg's shelby holliday. "bloomberg west" will be right back. ♪

cory: i'm cory johnson. this is the best of "bloomberg west." what does snoop dogg and mark zuckerberg have in common? they enjoy philz coffee. philz recently closed a $50 million closing round with people like jonah hill and silicon valley veterans like ron

johnson, and maynard webb. he joined me with the ceo jacob jaber for a discussion of brewing coffee and technology. jacob: we have most of our stores in the bay area, so there is a lot of technology folks who come in and drink a lot of coffee, especially the engineers. especially to keep on going. that is a big part of it. cory: do you invest in technology companies? maynard: this is my first venture outside of technology, and i will tell you my story. i love coffee. i am one of those tech guys that loves coffee. i cannot drink caffeine, so i drink decaf. that is like being a loser. [laughter] nobody has a lot of choices, and my son told me about philz, and said, dad, there is this great place you have to try here it he brought me a cup and i said, you put cream in this? he said, i did not.

i said that is pretty good. cory: i feel like there is more to it. there is more about the technology of -- let's talk about it. what is disruptive? jacob: i think we possess a lot of similar values that technology companies do, so the best coffee in the world is the one that comes to your taste. cory: comes to your taste? jacob: comes to each person, individual's taste. we had to platform for customization and personalization. we do not even do express out of stores because we believe that sometimes it is about what you'd do not do. every cup is handcrafted, and we convert latte drinkers and espresso drinkers into phil's triggers every month. maynard: the one problem i have is it always takes too long for me. i am always running from place to place, and i go in there and have to wait. cory: me, too. decaffeinated people can be in a

hurry. [laughter] jacob: it does not take that long, it could take 3, 4, 5 minutes per cup. it may take a little longer than that, but there are opportunities for efficiencies but we optimize for quality. we realized something will do not have time, so what we have is an app where you can order ahead, you can pre-order and prepay when you are getting up from your bed, choose the blend you want and when you want to pick it up. it is already paid for. it is like a philz express. more and more of our stores are having that. you walk in and you walk out, it is a two second visit. maynard: now all i need is a runner. cory: that does it for this weekend's edition of "bloomberg west." we will see you later. ♪

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