perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. emily: square aims to go public by the end of the year. jack dorsey is reassuring people he will remain ceo, but what does it mean for twitter? ♪ emily: i'm emily chang and this is "bloomberg west." what's so different about 2015 compared to 2000? i will talk about tech bubble fears. plus, box shares closed below ipo earnings. i will speak with erin leavy about what he still has to prove. and why businesses are depending

on technology to track their own access? first, to our lead -- square plans to hold its ipo in the fourth quarter of this year according to people with knowledge of the matter. so, what is interesting about this news? timing, of course. sources tell bloomberg that square's ipo is more contingent on market conditions than whether jack dorsey remains ceo. either way, we have learned he has no plans to leave his job at square despite an open ceo job at the other company he founded, twitter. here to help us answer these questions is our ipo reporter alex barinka, as well as the cofounder of button, a mobile platform and has worked a long time in the payments industry. alex, what do you make of the fact that square is full speed ahead? does this have more to do with market conditions despite the volatility we have seen?

or dorsey possum job? -- dorsey's job? alex: right now it has more to do with market conditions. even if dorsey does not and up in the top spot, square would still go public. right now, we are going to watch market volatility, which is been a hot topic. the other thing to pay attention to, obviously, would be what the fed has to say about interest rates and whether or not the investor community gets uncertainty on what they are doing next. right now, we are pegged at q4 and it seems all pistons are firing for square for a fourth quarter ipo. emily: there have been a lot of skeptics around square, but sources have told me the numbers better than everybody thinks. what do you think is the real story? is this company going to have a strong ipo? i think this company, based on what i understand of their fundamental economics in their core business, they've done an amazing job at getting

margin that no one else can in the small business segment and that is tremendously impressive. i believe that bodes well for their ability to serve that customer segment with new products, and that is where i believe square's core growth opportunity is -- offering small businesses an increasingly large enterprises more services beyond payment processing, whether that be lending, food delivering and ordering, a host of acquisitions that they have done recently. the ability for them to generate margins in their core business that other folks have not traditionally been able to bodes well for their ability to serve that core segment that they are in with lot of success beautifully designed products that other folks are not able to achieve. emily: that is interesting coming from you -- you worked at

paypal. alex, what are we seeing when it comes to other private companies and their appetite for ipos right now? i know you broke news about first data planning to go public. but our -- our other companies -- are other companies going ahead or are they postponing? alex: everything i'm hearing is october could be a busy month. everyone is going to be watching and waiting for some of those things we talked about. first data we broke yesterday, they are pushing for a $2.5 billion offering. but as early as this month, according to my sources. that would be the biggest this year. the ipo market has been a little slow for 2015. that being the biggest, it is still small for a u.s.-listed company. these payment processors, when they are getting out there they will have to compete with the likes of paypal running in this area as well. to my point, square specifically has been trying to work its way up the food chain and find some of these higher-margin customers.

have beeniously, we talking about square, but the big question remains -- what is going to happen to twitter? recently spoke to john kelly from "vanity fair" he said they bagged dorsey to take the ceo job at twitter and he refused, seemingly because of his obligations at square. take a listen to what john kelly told me. john kelly: we learned at one point earlier this year, the board didn't just act dorsey to day 10to twitter, they -- begged him. we definitely can confirm that he was asked to take the job at some point earlier this year. emily: mike, do you think jack dorsey can do both jobs? mike: jack dorsey is an exceptional executive, a man of incredible work ethic. if you have ever worked for a

startup or growth stage company, there are folks who are just 10x in their ability to lead. have deep product inside that nobody else can have. it is clear from folks i have spoken with that jack dorsey has that ability. he is a rare breed of executive. given his work ethic and deep product inside that is so far beyond the average leadership executive, i am optimistic he could do both jobs were that necessary. and i think that for square, square has a really good set of other executives who could run that business, but i believe jack is a product visionary and it is important that you continue to lead square. -- that he continues to lead square. emily: i think you are in the minority there. many experts i have in speaking to don't think it's a good idea for him to do both jobs. we will have to see. thank you both. now, a stock we are watching --

paulo alto network shares jumping after results from the software security company -- another security software stock we are watching -- proof point. week, we come up with their ceo about the next generation of cyber security. >> the biggest factor of risk is e-mail. that's where hackers go and target individuals with enterprise. we are seeing social and mobile more as emerging areas where organizations have left them more vulnerable and are ultimately looking for better protection there. we are seeing a significant number of phishing attacks focused on wire fraud. the fbi had an alert in that area because it was becoming so prevalent. we see organizations in the finance apartment being targeted . we are seeing across the board one level from executives being , more vulnerable and more likely to click on a link that is malicious.

i think the reality today is that the security landscape is so different that security posture has fundamentally changed. they need to employee next generation technology to ensure they are well protected from this next generation of attacks. gary steal there. le there. up next, john callahan tells us where he sees the next big investment opportunity. ♪ emily: the gender

discrimination lawsuit that rocked silicon valley is

officially over. ellen pao has announced she will not pursue an appeal against kleiner perkins. she explained her decision in a statement to "bloomberg west." my actions have encouraged others to speak up about discrimination in technology more broadly. i am encouraged that companies are taking more action to address the severity -- address the disparity for women and minorities. they did not reach an agreement to settle the dispute because you would have to remain silent about her experience. kleiner perkins has offered to forgo the legal fees if she drops the appeal. according to a person familiar with the matter, that still stands, but she tells me that last she heard from kleiner was that they would not settle without the clause. she still intends to pay the fees. i spoke with a partner at kleiner perkins who spoke with worked closely with ellen pao. >> i'm sorry that this happened to ellen, happened to us, and

the tech community. this is a civil case, so is a question of liability. the jury found not liable, so it is not. emily: john doher of kleiner perkins. john callahan is an early investor and founder of true ventures. he was one of the first two invest in fitbit and now sits on the company board. it so great to have you because we have been talking so much about startup valuations and what is going on in private tech. what do you think about it? our valuations sustainable? john: it's great to be here. there's been so much conversation about high valuation in the late stage market, but if anything, i'm here to say venture capital is underinvested relative to the opportunity. emily: what do you mean? john: undervalued as an asset class. what is most exciting now and what is driving high expectations for unicorn companies is the in almaty of -- the enormity of

the markets we are investing behind. as an industry, we have never invested in markets this large. mobile, cloud computing, things like wearables and drone platforms -- these are large, horizontal, vast markets. at the same time you are having this wide-open playing field, you also have what would refer to as varied -- very deep verticals. what airbnb has been to hospitality and uber has done to transportation, we are seeing that across enormous markets like healthcare services and fitness and wellness. emily: there are over a hundred unicorns valued at over $1 billion. is that fair? a lot of these companies people are saying are raising money on an idea they haven't even executive on. on.xecuted john: for sure there will be disappointment.

valuation is a combination of high expectation and financial performance. not all the unicorns will have the performance necessary to exceed their private valuation. that is ok. venture capital is actually a very small industry, roughly $50 billion a year invested in 2000 to 3000 companies. the world economy needs venture capital to take these risks and build companies. the reason is simple. we don't just build great companies, we at the venture capital industry build industries. we build jobs and quite frankly, we build the future. the industry as a whole, unicorns are a tiny percentage of what is happening in venture capital, and they are clustered around a few markets, predominately consumer tech and -- predominately in consumer tech. emily: you were in the sake of the last bubble. would you say we are in a -- not in a bubble right now? john: i don't think we are in a bubble.

we are in a prolonged boom and there will be highs and lows certain companies and segments. the difference is in the word "fundamental." when companies work well now, they work extremely well. the financial performance of uber, it or in our case, fitbit, even some of the smaller private companies we work with, when it works, it works insanely well from both a growth and margin standpoint. it did not work that way in the last bubble. emily: let's take a look at fitbit then, for example. what do you think of people wearing these instead of an apple watch, and companies like which have jawbone, raised and raised and are clearly struggling in the wearables space? my experience is that many these thingsbuy and stop wearing them. john: i'm an athlete and i love my fitbit. just to give you some sense of scale, we have some fun with the

fitbit numbers. as of march this was announced -- fitbit users have taken 13 trillion steps. 11 trips to jupiter. we have never invested behind the types of scale our startups are experiencing. emily: quickly, i know you are big on drums. john: yeah. emily: why? john: we were the first investor in the commercial drug industry here in the u.s.. we invested in a robotic company based in berkeley. we think a great example of not only a huge horizontal market shift, bringing computing to all kinds of places in agriculture and industrial applications, search and rescue, but think about every one of those markets -- deep vertical, data collection, sensor collection, the company is growing like crazy. it is a very exciting time. emily: i have interviewed chris

anderson, the ceo of 3-d robotics, so i have heard that side of the story. john callahan, founder of true adventures -- true ventures. thank you for joining us. a stock we are watching today -- box. shares traded lower this night a -- lower despite a stronger than average quarterly report. box sees its revenue climbing in fiscal year 2015 and reported it topped 50,000 customers. i caught up with box ceo, aaron levie. anaren: -- aaron: we believe that investments will pay off in building the dominant platform for the long term this is already happen. you have seen the market begin to shift where even companies like emc are exiting our space because of the dominant position we have been able to create. we want to continue to invest in growth, but we did show some efficient the this quarter and

-- efficiency this quarter. it is now 70% of revenue, a pretty dramatic drop from about 90 plus percent the same quarter last year. you're going to see efficiency as the customer base continues to grow. as the customer base continues to grow, our sales and marketing dollars focus primarily on new customers as well as upselling existing commoners, versus simply maintaining that existing customer base. as revenue grows, you will see improvements and efficiencies on those core operation costs. , the numbersron are strong, but shares are still below the idea price and the stock is down today. why is that? erin: -- aaron: we have a lot of work to do -- where box differentiates, this is something we are spending more time on -- we are going after a tens of billions of dollar industry, but that industry is in a dramatic amount

of flux right now. box is building the next iteration content management form, but that's the consolidation of storage infrastructure, content management software, collaboration technology, and we obviously need to continue to educate investors on how we differentiate and why customers continue to spend on box as their key platform and why we have things like 75% gross margins. we are fundamentally in a very differentiated software category, unlike what some people would think. emily: the lockup on shares was supposed to expire after the quiet period listed. is that what is happening? are insiders selling? employees selling? aaron: the lockup expires next week, but the initial one expired in july. that is when outside investors and other investors and employees could sell. this is now the first time insiders can sell.

different investors have different points of view. i personally not going to be am selling anything. we see a tremendous amount of growth going forward. emily: would you buy more shares at any point? aaron: if i can scrounge up the money, absolutely. emily: box ceo, aaron levie. we will be right back. ♪ ♪

teily: time for the daily by -- $5.5 million. remember uber announced a , partnership in to help develop february driverless cars, but according to several reports,

uber has hired away dozens of carnegie mellon again -- carnegie mellon scientists this year, leaving one of the world's top robotics engineers in crisis. mobile analytics are a necessity for companies in silicon valley. one company has carved out a niche providing decision-making data to businesses here and beyond. they can track everything from to sales. user engagement i am here now the founder. the last time you run the show, you are the first person mentioned in this new york er profile about mark andreessen. andreessen horowitz investing the entire round. taking your entire round at an $865 million valuation because they think your promise is so big. what is the promise of mixed panels? guest: our goal is to provide data science to as many industries in the world as possible.

when we raised our round, we also released our pitch. in our pitch, we articulated the problems we wanted to solve. the promise being there are a number of industries that don't do a good job of quantifying information and being data-driven. we think we can apply analytics to product, marketing, sales, and finance. emily: one of the main things you track is engagement. as opposed to just traffic. i was talking to john callahan about how well some of these companies are doing. are they seeing strong engagements? suhail: the funny thing about that is fitbit is actually a customer of ours. spotify is a customer. those companies, they are tracking exactly how people are using their applications and that what people have found on mobile is that if people are engaging with their applications, they are coming back and using it again, that means their application is doing really well. you can see uber's valuation.

you can see fitbit's valuation. they are delivering on the promise that you can get these people to interact their apps. -- interact with their apps. measuring engagement is the right measurement for these companies. emily: i recently spoke with mark andreessen about his views on startups, valuations and bubbles. take a listen to what he had to say. mark: be measured, be cautious, be careful. but also, invest in growth. at companies that are growing fast, we don't tell them to pull back if the stock market flips. if anything, we tell them to push forward. the companies that are doing well will do really well. andreessen is telling you inside the boardroom? suhail: at mixpanel, the reason we raised money, the entire reason was to grow rapidly. inside the boardroom, he is saying we should lean in to whatever might happen in the economy. it turns out that even if something does happen in the

economy, the money that we were able to raise gives us the leeway to hire the most amazing engineers through any kind of market did. what he is telling us to do is, you should use the money we gave you to rapidly grow and dominate your own market, irrespective of whether the market is doing well or poorly. emily: your customers might be in a precarious position. how does that impact how you affect your business plan? quickly. suhail: we might go after small companies are parts of the enterprise, but our goal is to own that entire set of segments. we go up market and diversify. emily: thank you so much for joining us. everybody read the profile on marc andreessen. suhail makes a great cameo. that does it for this edition. we will be back here tomorrow. ♪

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