♪ emily: he is the owner of the world's very first model s, and an early backer of elon musk's tesla and spacex. witht talker conventional investing philosophy. -- unconventional investing philosophy. he has amassed one of the biggest private space collections in the world, and has spent his days pondering the future of artificial intelligence and self driving cars. joining me today on "studio 1.0," steve jurvetson. steve, thank you for being here. it is great to have you. steve: thank you.

emily: i want to start in 1996. steve: oh dear. emily: when you made an early investment in hotmail, and you bet on e-mail before it was anything. what did you see? steve: it is usually a combination of things. an entrepreneur getting excited and jumping out of his seat, and an idea unlike anything i have seen before, which is, wow, e-mail wherever you go not tied to a corporate system or an university server. that is when the lightbulb went off. we invested in what became the first example of viral marketing on the internet. emily: want to talk about how you became a guy who can make these kinds of protections and big bets. tell me about where you come from, what kind of kid were you? steve: i don't know if i ever grew up. i was born in arizona to estonian immigrants who came here. i was inspired by my dad growing up. i started programming when the

apple ii computer first came out. i think there is something inspiring about the ability to code machines, unlike other experiments that take time to learn. emily: you graduated from stanford first in your class, you got a masters in electrical engineering, an mba at stanford. steve: i love to learn, and that is what i love about being a venture capitalist, i am always learning. i enrolled into a phd, which i didn't intend to take. it sort of happened. i eventually had to get a job, so i took off. i guess the hoodies and dropping out wasn't as popular back then. emily: after you got all this schooling, you work for apple, you worked with steve jobs at next, and he tried to recruit you at pixar. what was your relationship with him like? steve: it was pretty intense. someone who has this incredible, laserlike focus on who he is speaking with. other thing i most vividly -- the thing i remember most

vividly were the walks that we would go on. i had hoisted into an agreement with him that i would study how he does businesses. i was an acolyte, not that i thought i could be like him, but i can understand him. he was a fascinating individual. emily: how did you get that front row seat? steve: i asked him. he came to my business school, set across from the fireplace, and talked for like three hours. he was at next, ira member he was obsessed with apple. next has nothing to do with apple, he is distraught. he felt his visceral pain when apple is getting beaten around. emily: what kinds of things would he say? steve: he would always come to the conclusion that apple should buy next and bring the next technology and operating system back in to apple. i would look at him like he was nuts. what ceo of apple would keep you and bring you back into your job? of course, that's exactly what happened. he was possessed. i think he had the mass market

appeal of the products that apple has. everyone knows he has fascination with design, but what fascinates me is that at no point do i ever call him stating a strategy. it was more like, this is crap and this is beautiful. more specifically, elon musk and he have a fascination with imperfection. -- have a visceral agitation with imperfection. emily: tell me about your relationship with eli. he went into debt with tesla, writing checks, to make payroll, and the headlines say that you saved him. steve: we first met in 1996, when he first came to california, pitching his first start up. the relationship -- seeing him develop these companies was fascinating. in december of 2008, he saves tesla single-handedly. he went into debt to invest in tesla when no one else would.

emily: so when did you come in? steve: the other investors were on the table, so i did my fraction. it's a herd mentality, if everyone else's in, i will be in. we came up with a way to get him out of a hole, so that is why i became an investor in spacex and tesla. emily: it feels like you have a mind meld to him. does he ever say anything to you that you think is absolutely crazy? are you on the same planet? tell me about your own interest in space. you launched rockets in your yard, tell me about that. steve: my son has been doing that since the day he turned three. you got the black hawk desert, there are really big rockets.

i have also converted the dfj hallways with artifacts from the apollo era. emily: but you have not been to space yet. steve: no, i have been weightless a couple of times. emily: when will your first flight be? steve: probably in 10 years. would you want to be only first airplane flight? i would wait for the fourth or fifth. the association with fear is that it feels like a dangerous thing, but the goal with spacex is to make it as routine as air flight, so to make the rocket reusable, throw it away after each flight, which radically lowers the cost, and when the cost comes down you can fly much more often, gain more experience. emily: a spacex rocket exploded in june, and that was a huge blow. have they fixed the problem? steve: they have identified what the problem was and its complex detail -- a little bulge, frankly in front of a larger tank.

emily: so what happened? steve: it failed. but they can push that aside and push a replacement design that won't have that problem. emily: so will spacex a publish -- accomplish its goal of getting to mars in the next 15 years? steve: absolutely. i'm picking 20 years to get the colony started. emily: wow. steve: but just sending something to mars and not getting it back, they can do it a lot sooner, in a year or two. emily: you have a tesla model s and model x. do you have a preference? steve: i like them both. emily: you have the very first s ever made. steve: yeah, elon and i got the first production model x. emily: how is it performing? how many times has it been serviced? steve: not much. i have yet to replace the brakes. there is no spark plugs, no muffler, none of the usual stuff

i used to get maintenance on, like tires. emily: so what features are you most excited about? steve: i get very excited about the future of driverless cars. for most of us, driving in one of these -- a lightning bolt goes off in your head. same with autonomous driving. you look back and think, why do we let our teenage kids drive? 10 years from now, we will look act and think, wow, we thought that was ok? the way it will come to market is an uber or lyft-like service without a driver. low speed, ruben, 25 miles an hour/ hurt -- not could hurt someone even if they jump in front of the vehicle. in the abstract it is scary, but in the reality it's not scary at all.

emily: when can i buy one? steve: you might be able to ride in one in vegas in two or three years. emily: are you concerned about competition from a company like uber? steve: no and yes. in the future, all vehicles will be electric and autonomous. all companies have to do it or they will go out of business. it is almost by definition. so they should, and you wish them well, and you hope that a whole fleet of different kinds of vehicles will come out, whether it is fans or two-person vehicles, bus like things. no one company can do it all. emily: do you think apple is working on a self driving car? how optimistic are you? steve: by the end of 2022. emily: apple's thing is to do what somebody has already done, but do it better. and different. steve: sometimes they do, but sometimes they don't. that apple watch hasn't really grabbed me. emily: so you aren't a fan? steve: no, the battery life, for me. i have a lot of watches, and i cannot fathom the charging issue.

emily: do you think that tesla should focus more on lower-priced, more mainstream electric cars? the model three, which is supposed to cost $35,000, but that is the base price. steve: that is a great question. that is their long-term vision. you either have many billions of dollars to put into equipment to mass produce something of that scale, or you do it in iterations. you take the model x, if you factor in the cost of ownership, which are so much lower, your total is not much different from a high-end ford taurus. you start with that next vehicle and you do that same analysis, it might come up to be like a civic? that starts to sound more like a mainstream vehicle. ♪ emily: how concerned are you about google?

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emily: i know that you are super fascinated with machine learning. what is your vision for how ai changes our lives, let's say five years from now? steve: what we call it will be the specialties, things that are creepy or magical in their ability to do something somewhat human, like drive a car. let's say, manage our schedule, they will creep into engineering analysis and diagnostics, the field of medicine. there will be all these areas where we are recognizing a pattern of human behavior, a pattern of picture, a pattern of the world around us. it will see things we didn't see and pointed out, wow, i can navigate more easily through this traffic. i think that will start to

acclimate us to what we call ai fully. emily: how concerned are you about google's ambitions in ai? does it scare you? steve: a little bit. just because there is a bit of a reckless abandon, almost like a technical utopian flair, with the occasional -- almost like this is the inevitable trajectory that technology is our future, we will make good pets for ai in the future, things will be good and stuff. the ai i worry about is those that we may not know exist, that are purely digital, living off of vast information feeds and operating in a way we cannot fathom. ideally we may not ever detect their existence. emily: so how is your interest in ai and machine learning

playing out in your investment philosophy? steve: i think the way we engineer things is changing. from everything we can think of as engineering to things that feel more like growing and reiterating a solution very rapidly. emily: what do you mean? steve: imagine much like a newborn baby who can learn anything, you build a brain in a box that is exposed to photos. then it's first to react cuts on the internet. -- cats on the internet. but that same program could recognize anything on the internet, recognize speech, or be used to find tumors in mammograms. so you know have this ai you can apply to different things, and you don't know how it is done. just like we don't know how a brain works, we know how they got there, but we don't know what it is. emily: could these computers one day take over the world? s yeateve: but why? emily: because they become smarter than us, like a lot smarter. steve: what they would do is --

one day we would wake up, and -- imagine a gap between us and our pets, my cat enjoys hunting that toy mouse. it thinks it is a fierce hunter, but it's in the house. it would be similar, we would not even know. we have much less violence overtime. there is a lot of evidence of that. why would a more intelligent being use childish-like kindergarten level -- it's my toy, i want that thing -- as opposed to much more sophisticated manipulation? emily: dfj was an early investor in theranos, now a $10 billion valuation. do you stand behind theranos? ♪

emily: what do you think about this bubble talk right now and valuations? are we at peak unicorn right now? steve: every time you asked me a question like that, somewhere a

fairy dies. [laughter] you have to believe in them. i don't know, it is interesting how the private funding world is reahing valuations we have not seen. we focus on early-stage investing and growth stage investing that is way before the unicorn phase. we are fine if people want to invest at those kinds of prices. in fact, two companies on the board just got offers at this new unicorn phase, new unicorns are being born every week. but it doesn't really mean anything per se. i think what is interesting is that the ipo may be shutting. emily: is it closed? steve: it seems that way, certainly for biotech stocks. emily: i have to ask you about theranos. dfj was an investor in theranos, now at a $10 billion valuation. do you stand behind theranos? would you invest again? steve: we stand behind them and

that we are investors and want them to succeed, but we don't have the answers to the questions swirling around, which is can i give you an answer to the questions others have? i can't do that. i remember meeting her, elizabeth holmes, when she was still a stanford student. she started the company with great passion. i remember my partner tim saying in the first meeting, she is like steve jobs. this is long before she was wearing the black turtlenecks. i did not see what he was referring to, i even wrote it down on a piece of paper. but it was fascinating. she had that mesmerizing zeal to revolutionize. there were these special kinds of needles the field of medicine. we were the very first check, we wrote a $500,000 check before anyone else, but she has been so independent and has been going at it on her own. so i don't have the answer to your question. emily: you guys have such a tough job because you want to invest in breakthrough

technology. how do you at the earliest stages separate something possible from something impossible? steve: there are people walking in that door every week, every day sometimes, but someone -- we keep hearing about the steve jobs and elon musk of the next generation, but some of them are wrong. you are scratching your head, do i believe them or not? could this happen? i think the best partnerships are when the investor believes in the entrepreneur. when we first invested in tesla, i was convinced that all vehicles would be electric. it was not my idea, it was his, but i fully bought it. when i hear him explaining it, i believe it. i have been wrong, and i will be wrong again, but when it is right it is a remarkable thing. can we talk about the ones that are right? emily: so the world of venture capital has changed a lot in the last years.

horowitz has come along, it is the hot new firm. they've got a lot of people in recruiting, marketing. where do you see dfj's place in the hierarchy today versus 20 years ago when you started? steve: i try not to compete with any of them. in a healthy economy, you are going to have different firms that do different things, have different strategies. if we are doing our job well, we won't come head-to-head with the same group over and over again, because that might imply we are doing the same thing they are, and why would we do that? i like looking for industry sectors that are not over invested where frankly no one , else competes. the vast majority of investments i have made, there was no competing offer. no one else was running. emily: really? the question i was going to ask is, how do you get on the good side of every entrepreneur? steve: when were first investing in space, there was that no one

else saying they were in space, so i am visible and vocal, and then they find us. we don't need the same sort of infrastructure to track down the opportunities to compete with everyone else. in fact, i think a venture firm is a small team of five to seven people, no more. i think every endeavor, whether it is creativity, or decision-making, or a state of ambiguity is needed, if you go bigger than seven, you are less effective. emily: so what is next for steve jurvetson? steve: you will find me learning. we want to harvest organs for humans by changing the immune system of a pig to be more like a human. i think the field of biology and information technology -- we will grow technologies, we will evolve technologies, we will build things that feel like rains less than computers. -- feel like brains less than

computers. we will build things beyond the human design things which they can understand. if you ask one day, will we have something smarter than humans, the answer will have to be yes. it can't be no. literally smarter than humans in every way, like, you have a conversation and gives you better answers than i can. that will inevitably happen. to say that nothing will ever be better than a human means that evolution suddenly ends right now, and that is obviously not the case. we have wicked smart humanoid like things. that begs the question, now that we understand the process of evolution, what can we do today to rapidly evil things that things that- evolve surpass us? emily: so that is what you will be thinking about. steve jurvetson, thank you so much for joining us. it has been great to have you.

i will see you on the moon. ♪

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