cory: live from p three in san francisco, welcome to bloomberg west where we focus on the future, innovation, technology and the future of business. today our guests include richard branson, mark cuban, and they join me from the summit on education and technology. they are all gathering to talk

about the future of education. let's start with branson, he is also a high school dropout. so did steve jobs. i talked to branson about the challenges of educating entrepreneurs as well in the future of virgin galactic. branson: it is possible to school is not necessary. i learned the art of entrepreneurs and by getting out there and doing it. i also educated myself in the world world -- real world. i think that's for on for new ours.

obviously there are a lot of other professions that could be quite useful for most on for numerous i think the sooner they get out there and get their hands dirty, the better. corey:y: i wonder about the role the individual has with students. what is it about entrepreneurs and their struggle in school? branson: i think an entrepreneur is somebody that wants to change things and create things does not want to be put in a box and school is there to educate the masses and entre nous are rebel against that. i think if you have a good idea that you -- you feel would make

a difference i think you'd be better off not building up student debt. if you fail, you don't have a degree to fall back on. you have to have a good education in trying to set up and run your business. you have to pick yourself up and try again. you talked about your difficulties and school and dyslexia and what that meant. branson: i am dyslexic. i think i have been very good at keeping things simple because as a dyslexic i things -- i need things simple for myself. as for emergent, when we launched a financial service company or bank, we do not use jargon.

i think people have an affinity to the version brand because we don't talk above or down to them. what was the other thing? cory: with that, i also wonder when you talk about new ideas do you think you user dyslexia in some way or you have a different approach. branson: i think the other thing i was thinking about was simply delegation. if you have a learning disability you become a good delegator because you know what your weaknesses and strengths are. you find great people to deal with your weaknesses. and whether you are dyslexic or not delegation is such an important thing.

too many leaders cling on everything themselves. they never let go. they never grow. cory: another theme has been the discussion of what happens while people are in school and college. what will their resumes look like? from your perspective, you have started so many different kinds of businesses, what does a resume look like for someone you want to hire? branson: personally i don't look at how many a-levels they had or , what their academic career was. i look at what experiences they've had in life. what kind of person they are. if they will go to a leadership position. will they be good at motivating

people? will they look for the best in people? it is more that kind of area that i am looking for rather than academic abilities. having said that, if we are building rockets, we will look at that. cory: you mentioned rockets, what is the latest will be tragedy with the test flight what is the latest with virgin galactic? branson: i was there this morning in the mojave desert. they are working day and night getting the next spaceship finished. they are confident. they are back on track. there will be a year's delay. i still believe virgin galactic

has a great future. cory: do you still plan on that first flight? ranson: of course. cory: when we come back we will talk to mark cuban, an original thinker if there ever was one. ♪

cory: this is the best of bloomberg west. one of the most prolific owners has some strong thoughts on everything including how technology can change education. we caught up with him for a wide-ranging interview.

mark: there will be a lot of universities that go out of business. i'm not talking about university of phoenix. but schools themselves. if you look, you are starting the season changes. i think what people and investors fail to realize, let's just say for example, a school charges $40,000 a year for tuition. for a thousand students that's $40 million a year, there are not a lot of companies i can adjust to that loss. what is happening is i am looking for a investment perspective for companies that can puts -- kids through school. college or postgrad. if a school keeps a kid and graduates in four years, that is more cost effective for the school. they would make it more cost effective.

retention system would keep kids in school. those help schools reduce their cost so they can deal with the demographic changes. or a boycory: a uses big data. mark: systems help schools put together monetary plans. when kids have to turn in things, particularly online students, you want to monitor them. if something is not coming in time you want to check in with the student and school. cory: schools have advisors. mark: they had them, we never use them. cory: for those schools, when they look at this, they have a whole different interaction

because it is happening digitally. mark: it is not traditional like we are used to. now it is different. the course is online or all of it is. it is not just about taking a test at the end of semester. you want to know if the kid is reaching her milestones in order to be successful. it is harder to self monitor when you're taking online courses. cory: one thing that is changing the way books work. mark: one of my shark tank companies -- cory: is not backpack. mark: what they are trying to do is reengineer the whole e-book approach to college textbooks. they are working with publishers now to try to come up with

analytically the best approach to selling textbooks. replenishing e-books, and in some cases a pay-per-view for books as well. you may be like me, i would buy the books because i could -- i could not afford them. trying to create almost a move -- window system like the movie business. to get books the way you need them at the price you need them. cory: to publishers want that? mark: they are learning they do not have a choice. school gets more and more expensive. your books were a set amount. now tuition is dramatically expanding and growing so rapidly. what is happening now is the marginal cost of those books is enormous. kids are not always making the

choice to buy them. they are buying the used. pack back comes in and says we will analyze for you and come up with the best solution. cory: have you looked at those investments? mark: yes i looked at them. cory: how do you do that? mark: i'm fortunate because i do not have to limit my capital. you seem -- on "shark tank" it is one thing because i am trying to support entrepreneurs. i invest in companies that go out and find new students and find values for students. that is a different type of investment.

cory: we have snapchat pinterest and other companies that have been out there for a long time. mark: you are that unicorn. once you raise $500 million you see accelerating revenue. in order to do an ipo you have to outperform. you cannot just increased 30% quarter rated you have to blow up your numbers. that's why you see snapchat go to what they are doing. what's up get spot because they do not have that revenue outlet. revenue has become more important. back in the day with broadcast.com you could do a $30 million ipo. i read there were more $100 million private finances than ipos. over the last 10 years, more i.t. companies have gone through

private investment than ipos. there was only 231 that have grown through ipos last 10 years. because there is no ipo market because the sec will screw things up. cory: are we going to see a billion-dollar private education company? mark: yes. there is no outlet for ipos. outside of them, you are not seeing the traditional growth from the 90's where again you show dramatic growth and then you went to the public market to get capitalism. now you have to keep raising money privately or get bought out. until that ipo market reappears it may change. you will see a lot more unicorns

. you will see a billion-dollar education unicorn, the question is what happens next? you will see billion-dollar unicorns go out of business. cory: dallas mavericks owner mark cuban. ♪

cory: this is the best of bloomberg west. i am cory johnson. with learning platforms, recruitment tutoring, things are a lot bigger than textbooks. i spoke to dan rosen's wig about

the expansion of career development and internships. dan: 70% of college kids to college to get a job. the ratio of career counselors to college students is one to 1000. it is an underinvested area area this gives college students and internships fight -- site. this gives them career coaching and counseling to help them figure out the right job. cory: what is intriguing me is it seems like it extends customer life. you take your customer past the fifth year into a longer-term relationship that lets you advertiser marketing value longer.

is that part of the plan. dan: there is the right thing to do what do students need? we had to figure out what college to go to, matching them with scholarships. we extended it three years ago for the same business reasons. we have 75% of high school kids who plan to go to college in our network. we help them pick the right college pick the right major get their learning materials. now we have tutors, internships, and careers. it is now long beyond the original idea. cory: what is the customer like #dan: when we started it was rented, return it. now -- cory: that is a for your customer?

dan: it was more like a three-year. now i think our lifetime of the customer can expand. cory: does that mean you will spend more on the market going forward? dan: once we get you into the system, we have you. the data matching of relevant services is used. we can bring in your tutors, the right internship opportunities. it is a learning graph. our marketing dollar has not only gone down as a percentage of revenue it and it stayed flat. cory: you are getting involved in the college selection process. define because you are putting students to work that the

diversity of schools is much greater that you are reaching into the far as the business? you are sending people to schools they might not heard of? dan: yes it absolutely works in other ways. my daughters are at colgate, we know new york well. they were recruiting back in the day where it was upstate new york, massachusetts, and connecticut. today, colgate's number two state is california. not only are you introducing students to schools they have never heard of, or you're helping schools recruit diverse students from all over the country because we have the information. cory: my daughter is six. she said, hey dad, i have been thinking about something. i think i decided where i want to go to college. she says, dad, we like cow,

right? we don't like stanford. do you think that notion of where you are going to go and what she will do will change in bigger ways because we work you do? dan: we have 4000 colleges, we work with a thousand of them to recruit students. we see the diversity of gender race, income. that is what they are looking for. we are helping upstate new york schools like syracuse region to los angeles into zip codes they have never heard of. it is what way it -- it is the way americans work. we are both from new york, here we are and we live in california. why not move when you're in college? cory: we are in arizona, just to

be clear. you have had a big change in your business. you got out of the physical textbook business. dan boy we got out of owning them. the deal with ingram simplifies the business. it clears things up in our digital services, our college to high school recruitment business. those are growing it extraordinary rates. the print textbook business rental business, we invented it. we do 6 million textbooks. we do not have to run a warehouse, we do not have to buy the books. there is a company that had slower growth and now has faster

growth. cory: there was cash on the table because the way the market is they did not want it. dan: here's is the good news the most important thing to us is the student. we never lost focus of the ability to offer the business. we can now offer more because someone else's capital. we already do over 6 million textbooks a year. the opportunity to use that cash, the hundred plus million we used to buy our textbooks we get all the benefits in the front and. we have to give up some of the margin to her partner, they are better than -- they are better at logistics and we are. we use their eight warehouse is rather than are one. it works out. it is an interesting thing to see what investors think is important. we saw the same benefits, and we went ahead and pulled the

trigger years earlier. cory: up next, coastal ventures founder. ♪

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cory: you're watching bloomberg west. i am cory johnson bring you the best of bloomberg west. his venture capital work is some of the best ever in the valley. he owns coastal ventures. i talked to him about his investments in education startups. vinod: i think previously it was this lower faction view of technology applied to education. you always heard about speeches and classrooms, but there wasn't this notion of, let me create something for the student or the

teacher for interaction. now with cloud and mobile, we have gotten the basic infrastructure to do all kinds of interesting things. if you look at something like twitter or facebook, what they are about is taking a person and addicting them to the application. i think that ecosystem has been enabled for entrepreneurs to come in and start addicting students to learning. i think it will happen. cory: where do you see that happening? have you made investments in this kind of arena yet? vinod: we have made some investments. i will give you an example. piazza, little ecosystem that professors use in colleges do -- to essentially have a class forum, a place for students to ask questions, get help from peers, other classmates, teachers' assistance.

before investing i looked at my son's enrollment in three classes. he had 3000 interactions on piazza. cory: your son is at school where? vinod: my son is at stanford and computer science. he had taken three courses where the professors were using it. there were 3000 individual interactions across those courses in the forums. that is way more engaged than any classroom you can imagine. cory: do you make these investments saying, here is the big problem some company will need to fix? vinod: there are lots of big problems. starting with the problems is a good idea. the founder of piazza started with the idea that people need to interact in a forum, this lots of questions, lots of peer help, that then becomes a way to extend.

going back to the facebook analogy, it was a big idea that a billion people would use. cory: or it was used to pick up girls. vinod: what they started with was people knew to interact with this forum. lots appear help. that becomes a way to extend. imagine you can do assessment for class. in a normal class, professors give tests. but if you know every interaction the student had in class, you could get much better assessment of how the student understands. cory: not just the score on one test. vinod: what questions do they ask? what comments do they make on other people's questions?

i think all of this will change. that is mostly college education at the outset. teachers and other people who are passionate have created over 100,000 pieces of content to attach to. all of high school education is only about 2000 concepts you have to learn. for each of those, there are 100,000 concepts that have been created, elaborations that have been created and we call them modalities. these modalities are literally you describe photosynthesis, but can i see a simulation or a video, or can i play with what happens if the sunlight is late evening versus morning. being able to run those experiments right on your ipad

or android tablet, those kinds of things are getting students engaged. imagine that much content. we were talking about mcgraw-hill earlier. they don't have people who can offer that much content. the community has authored it. because c.k. 12 started with a complete set of stem textbooks for middle school through k-12 six through 12 education. because they have that platform people are now adding to it. they're a great simulations you can play with and say, why is summer and winter different in the northern and southern hemisphere? you can run a model and see how the earth is going around the sun and actually see it. cory: up next, groupon founder. ♪

cory: i am cory johnson, this is the best of bloomberg west. andrew mason is the ceo of groupon. he is becoming an audio tour guide. he has launched an iphone at called detour. we talked about this new business. andrew: we have 92 or's launch just in the san francisco bay area. each one takes you through a different part of the city. these are immersive high-quality walks where a tour guide is telling you where to go. your phone is in your pocket beagle time.

-- your phone is in your pocket the whole time. we have people who are real members of the community. we found a fisherman who has been fishing there for the last 40 years. you can see beyond the tourist facade. cory: are you just in san francisco right now? andrew: we did one in austin for sxsw. >> is it just for tourist? andrew: they are all different. there is one we did recently, it is all about trash. it takes you down to the city's goal to be landfill free by the end of the decade. it is an amazing experience. you learn a lot. i think it is an example of

types of ways we're pushing the medium. >> how big is the market? andrew: i have never thought about things that way. someone asked about how big the market was for groupon at the beginning, i don't think they would predict we would have a $5 billion company today. i just think is this something that people want? is this something i want? this is an idea i had when i would travel. before groupon i felt like there has to be a better way than being in a tour group with a bunch of people you don't know trapped in this three-hour experience that is kind of hit or miss. there had to be a better way to learn about these places that would allow people to explore. i think technology has finally reached the tipping point where you can have the sony pocket and get that experience. >> what groupon experience are

you bringing to detour? andrew: i have learned how to dress better. it is mundane. let me think of something awesome to say. the value of building a pristine consumer experience and not compromising on that at all is something that we saw again and again a groupon. it is something we're trying to stay true to. we believe this is a space where a lot of people and try to build something. none of it has been good. we said, we are going to not do that. we are going to make sure it is good, no matter how hard it is. it has been hard. we are building the consumer app so it is almost like we are

building to start up that once. -- at once. we're proud of the experience that we have created. >> to follow up, you had a public experience in your final years at groupon. has building something more intimate with detour has that been a healthy experience? has that help to recover from the battle scars at groupon. andrew: i feel good and happy about the whole groupon experience and grateful to be of been a part of it. we had some ups and downs, but that is part of the territory. everything about that experience , that was one thing, this is the next. i have -- i feel grateful for the opportunity.

cory: andrew mason. up next the team behind hbo's "silicon valley." ♪

cory: this is the best of bloomberg west. hbo's silicon valley returning. it is produced by two people who are no strangers to making it big and comedy. mike judge from "office space," "king of the hill,". mike: a second season is the

story about what happens to a company. techcrunch just finished. they are a hit. it's them going to the next level. series a financing and all the bad things and good things that can happen. emily: the winkle boss twins make a cameo. and we will see the snapchat ceo at some point. mike this is true. : emily: is there a good joke in this series? mike at least one. :i think it is a good one. emily: it is a joke worthy of season one? my: they are all our babies. emily: it might be the most talked about moment from season one and i think it's indicative of how you guys of what the show together because it is technically correct. i know you spend a lot of research on the technical part of things.

tell me how that came to be. >> when mike and i first started talking about working on the show we bonded over the fact that we said, i hate technically incorrect dick jokes. we vowed, if we do dick jokes they will be technically correct. they may not be funny but they will be correct. so far we have stayed true to that. emily: mike, you are an engineer. you worked in silicon valley once upon a time yourself. so you know about this world. mike: i had fun on that one. believe it or not, this guy who's got his phd just after we finished season one was sort of the compression consultant. we asked him for that dick joke. we said, can you give a stuff to put on the board we had a lot of . we had a lot of the technical stuff about the various angles. he went to town on it in a way that i couldn't believe.

that came about we were early on when we started, at some point i thought it would be cool to have a beautiful mind moment like he did with the men and women in a bar leading to this mathematical epiphany. i thought maybe we should have something like that with compression. we were looking for something maybe dumb. silly. it came from one of the writers mateo, he was just completely , separately talking about discussions with his roommates about how you could --i don't know how to say it on this show. alec: manipulate? mike: manipulate 4 men at the same time. alec overheard this.

emily: i just got spit on. emily: i'm good. very meta. [laughter] you guys do a lot of research for this show. you have come up here often. tell me about that. my:ike: a lot of the stories come from real stories up here. when alec started on it, i think we both have this desire to dig in and find out more about the real world and what these people really do. we were sitting after the pilot when it went to series. it just kept occurring to us that i don't know what these people are doing. i used to program but i wasn't building apps and platforms. i was doing a different kind of test engineering thing. the more we dug into it, the more great stuff we found. emily: hot shows were doctors and lawyers.

why write about computer geeks? alec: we asked her that on a daily basis. why do we do a show about people that sit and type all day? what they do is inherently un-filmable. it's a challenge. emily: un-sexy. unglamorous. un-plenty. -- unfunny. alec: but it couldn't be more relevant. look at the speed at which tech is moving and the roles that it plays in our lives. everybody has at least one mobile device on at all times. it is super relevant. to everyone's life. you do not see that much about how that stuff gets big. cory: mike judge and alec berg. up next, hip-hop group, de la soul. ♪

cory: this is the best of bloomberg west i'm cory johnson. in 25 years, the group they lost soul change the world of music with hits like -- ♪ the blend of conscious lyrics and sampled beats grew a cold following. technology has changed the music industry. that is especially true for hip-hop artists, back in the studio they have raised $400,000

on kickstarter to fund their new album. i asked them about sampling. >> making music was based off of how an early hip-hop you just rhymed over beats. as you said, we were experiencing with james brown and any other record that normally we would rhyme over from a hip-hop perspective. we did not think about the fact of who we had to pay for writing , or publishing. we learned. cory: what was it like it tommy boy? where was the notion of let's make the music first? >> yes. the creative aspect was more important.

heading into the studio and creating a song. a good sound was first and foremost. as time came we set down and looked at the list of the individuals who we sampled from and figured out what it be difficult to find this publisher , getting clearance on each song. the creative aspect definitely came first. cory: that was back in the day with tom silverman. now we look at the business, you want to get your music played on beats audio, pandora, spotify. what has happened licensing that music since the origin of some of those tracks are unknown? >> unfortunately, a lot of the earlier stuff we did, from what we understand, a lot of the legal language that needed to be

part of the contracts between ourselves, the master, and the publisher, it did not include the world of digital. so it was specifically to vinyl, cassette, cd. a lot of the contracts needed to be reworked. dealing with that, it has taken a lot of time to take -- reach out to those people. >> rework those contracts to make that language exists to the benefit of the individuals involved. it is a process. it is a long process to make that happen. that is why our stuff is not available in the digital world. cory: so as a result you are getting around this by giving it away? >> it is frustrating. of course we don't want to break

any rules but the fans are screaming and they want the music. they enjoy the music and at the end of the day, you want the fans to be able to enjoy the music. or you do what we are doing now through the kickstarter campaign. cory: a last question about that, do you see yourself getting paid for that music or ultimately supporting touring and live events were artist say they make more money there? >> that is one of the options for us. we have been able to tour for the last 20 years. without having new music out. the idea of stacking profit or anything, rewarding what you have done via publishing or anything like that. that's not available to us, really. cory: that is it for this edition. you can catch us monday through friday.

you can see more best of bloomberg west next week. ♪

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