♪ emily: he is the owner of the world very first model s, and an early backer of tesla and spacex, a fast talker with an unconventional investing philosophy. he has amassed one of the biggest private space collections in the world. today, he is pondering the future of artificial intelligence and genomics. joining me today on studio 1.0 is venture capitalist and partner at draper fisher jurvetson, steve jurvetson.

emily: want to start in 1996 when you made an early investment in hotmail and you've bet on e-mail before e-mail was anything. what did you see? steve: a entrepreneur that gets me very excited. and an idea that was unlike anything i had seen before. e-mail wherever you go not tied to a corporate system, or a university server. we invested in what became the first example of marketing on the internet. emily: microsoft bought hotmail and you made hundreds of millions of dollars. how did you become the guy who could make big predictions? what kind of kid were you? steve: i do not know if i ever grew up. born in a arizona. son of estonian immigrants. i started programming when the

apple 2c computer first came out. there's something intoxicating about programming a machine and having immediate feedback. here is a learning cycle so rapid. emily: you graduated first in your class from stanford and got a masters in electrical engineering. steve: i love to learn and that is what i love about venture capitalism, always learning. but i did not want to leave school. i enrolled into a phd which i did not intend to take. i eventually had to go get a job. emily: after you got all the schooling, you worked at apple for steve jobs. he tried to recruit you at pixar, what was your relationship with him? steve: intense, he has this incredible focus on whoever he is speaking with. i remember the walks we would go

on. an agreement to study how he does business. i was an acolyte, that i could understand him. emily: how did you get that from front-row seat? steve: he came to my house and sat in front of the fireplace for three hours and i remember he was obsessed with apple. he did not own a share of apple but was distraught. he felt this visceral pain when apple was getting beaten up. emily: what would he say? like ite always felt should by next and bring him back as ceo. i would look at him like he was nut.

what company would bring the ceo back? who would do that and think they could survive? the ceo brought him in and was gone within months. the mass-market appeal apple has. everyone knew he had this fascination with design but at no point did i see him with a strategy. this is crap and this is beautiful. he and elon musk have a fascination with imperfection. tell me about your relationship with elon. he went into debt, and you saved him. steve: we met in 1996 in california. he was pitching his first start up. we were trying to invest in paypal. the relationship has morphed into more in my life as he .evelops these companies bi in 2008, he saved tesla,

invested when no one else would. the other investors were saying they would do a fraction. it is a herd mentality, that if everyone else is in, i am in. we invested in a way to get him out of a hole. that is how he became successful. emily: you guys have a close relationship, a mind meld. does he ever say anything to you that you think is crazy? steve: crazy is as crazy does. emily: are you on the same planet? tell me about your interest in space, you launch rockets in your yard. steve: my son and i have been doing that since he was three. we went into the desert and build these enormous things that go at mach two. i have built rockets people can fit inside. i have converted the whole dfj lobby into a space museum.

it is full of artifacts. there is a piece of every lunar module that has been to the moon. emily: you have not been to space? steve: no, i have been weightless a couple of times. emily: when is your first flight? steve: if it were up to me, five or six years. the perception of fear because it sounds dangerous and things blow up. there is visual failure in front of everyone, but the goal with spacex is to make it as routine as air flight. make the planes reusable. you can gain more experience. emily: the spacex falcon nine rocket exploded in june. it was a huge blow. have they fixed the problem? steve: they believe they have. it was a little bolt.

emily: what happened? steve: it failed, but they can push that aside and put in a replacement design that won't have that problem. emily: will spacex get to mars? steve: absolutely, 20 years. emily: 20 years to get the colony started? steve: yes. if you just want to send something to mars and not get it back, you can do that sooner. i could do that in a year or two. steveemily: you have a tesla mol preference? steve: i like both tesla models. emily: you have the very first s ever made. how is it performing? steve: great. i have yet to replace the brakes. there is no spark plugs.

there is no smog check. thingare really the only that has needed anything. ted abouty exci autopilot. to drive one of these is like a lightning bolt going off in your head. it is so obvious it will be awesome. we will be looking back and wondering, why did we let teenage kids drive. we will look at ththe present and think, wow. it will come to market as a service, and uber and lyft like service without the driver. vehicles that could not kill someone even if they tried to jump in front of the vehicle. in the abstract it is scary. in reality, it is not that scary at all. emily: when will it hit the mainstream?

steve: you might take a ride in one in vegas. emily: uber is making its own self-driving car. are you concerned about competition? steve: no and yes. if you believe that all vehicles will be electric and autonomous, all companies have to do it or they will not be in business. you have to do it or you will not be in business. they should. a whole fleet of different vehicles will come out, shapes,-- is fans, vans, shapes, two-person vehicles. emily: is apple working on a self driving car? steve: yes. emily: when you think they will have it? steve: by 2022? apple's thing is to do

what somebody has already done but better and different. can they do it? steve: sometimes they do and sometimes they do not, the watch is not grabbing me. emily: not a fan of the apple watch? steve: battery life is an issue for me. i have a lot of watches and i cannot fathom in my personal use the charging issue. emily: should tesla focus more on lower-priced, mainstream electric cars? the model 3, which is supposed to cost $35,000, but that is the base price. steve: that is their long-term vision, you either have many billions of dollars to put into equipment to mass-produce, or you do it in iterations, take a current model s, if you factor in the total cost of ownership over five or seven years, fuel cost and maintenance cost that are lower, your total cost is not that different from a high-end ford taurus. if you start with the next vehicle and do the same analysis, it might come up to like a civic. that starts to sound like a more mainstream vehicle. emily: how concerned are you about google? ♪

emily: i know you are super fascinated with machine learning, what is your vision for how ai changes our lives five years from now? steve: for the next five years or a little more, five-ish y ears, there will be things that are creepy or magical in their ability to do something we thought was somewhat human, like drive a car. manage your schedule and figure out what you might want to do today. it will creep into medical imaging analysis and diagnostics. medicine, all these areas where recognizing a pattern of human behavior, pattern in a picture, patterns will see these things. you will think, i can navigate more easily through this traffic, or optimize my calendar in a way i could not see before. i think that will acclimate us to ai slowly, as opposed to out

of nowhere, robots that are smarter than us and take our jobs. emily: how concerned are you about google's ambitions in ai? steve: it scares me a little bit because there is a reckless abandon, almost a technouptioan occasional, "we will we will be cautious, but technology is our future, we will make good pets for these ai's in the future and life will be good." you know. there's something that looks like a pollyannaish, "what could go wrong?" is purely be ai that digital, living off vast information feeds and operating in a way we cannot fathom that we may not ever detect their existence. emily: how is your interest in machine learning playing out in your investment philosophy? steve: the way we engineered

things is changing from everything we can think of that is engineering, to things growing and iterating a solution rapidly. emily: what do you mean? steve: imagine, much like a newborn baby, you build a brain in a box. is exposed to photos and recognizes things on the internet. that same program can recognize anything on the internet or speech, or try to find tumors in mammograms or other pathology slides. you have these generic learning machines that you can apply to many different things and you do not know how it works. we do not know how a brain works. we know how it got there, but do not know what it is. emily: could computers take over the world? steve: yes, but why? emily: because they become smarter than us. steve: to what end? emily: a lot smarter. steve: that's why we would make

good pets. imagine the gap between us and our pets, my cat thinks it is hunting the toy mouse with the catnip. it would be similar. we would not even know. the long arc of human intelligence is we have less violence over time. why would a more intelligent being used childish like kindergarten level, "that is my toy," as opposed to more sophisticated manipulation? you were an early investor in theranos, do you stand behind that? ♪

emily: what do you think about valuations, are we at peak unicorn? steve: every time you ask a

question like that, somewhere, a fairy dies. the unicorn fairy, you have to believe in them. [laughter] steve: i do not know. it is interesting how the private funding world is reaching valuations. at early stage investing, way before the unicorn phase, we are fine if people want to invest in those prices. two companies i am on the board of, we got new offers in unicorn. born everyns being week!" it does not mean anything. the ipo window may be shutting. it seems that way for biotech stocks. emily: i have to ask you, a $10 billion valuation in theranos, do you stand behind them and would you invest again? steve: we stand behind them in

the sense that we are in investor. we do not have the answers to the questions swirling around, can i give you an answer to the questions others are asking. i don't have that. here's what i can tell you. i remember meeting her when she was a stanford student, elizabeth holmes, as a teenager started the company with great passion. i remember, my partner tim, he was saying she is like steve jobs, long before the black turtlenecks. i do not know what he was referring to. i wrote it down on a piece of paper. it was fastening, she had a -- it was fascinating, she had a mesmerizing deal to revolutionize the entire field of medicine. we wrote the first check, before anyone else, but she has been somewhat independent and has been going at it on her own.

emily: you have a tough job because you want to invest in breakthrough technology. the early come at stages, separate something possible from something impossible. steve: there are people who walk .n our door every week a week does not go by when someone does not have gotten is equally excited because we hear about the next generation. some of them are wrong. do i believe them? i think this can happen? the best partnerships are when venture investors believe almost as passionately as the entrepreneurs themselves. with tesla, i was convinced tesla, all vehicles will be electric, when i hear him explaining it, he has won me over. i have been wrong and i will be wrong again. but when it is right, it is a remarkable thing. if we talk about the ones that are right. [laughter] emily: the world of venture

capital has changed, a hot new firm, recruiting, marketing. steve: like an operation. emily: where do you see dfj's place in the hierarchy today versus 20 years ago? steve: i try not to, in a healthy economy, you have many different firms that do different things, have different strategies. so, if we are doing our job well and if i am doing my job well, we will not come head-to-head with the same group over and over again because that might apply we are doing the same thing. i like a different approach, looking for industry sectors not over-invested, where no one is competing for the deal. the vast majority of investments i have made there has been no competing offer. emily: really? i was going to ask, how to get on top? steve: the sectors that have 18 different firms all well-known, pursuing the exact same sector. it is like a dog fight.

sectors, like space, there was no one else saying this. i try to be more vocal, and they find us. we do not need the same infrastructure to track down and find the opportunities competing with everyone else. in fact, i think the venture firm is ideally a small team, five to seven people. i think almost every endeavor where creativity or decision-making is needed here moment you go past you are seven, less effective. emily: what is next for you? steve: you will find me learning. a company you can harvest organs, we can take their heart, kidney, lungs and solve the transparent problems. information technology, we will grow technologies and build things that feel like brains and less like computers. that is how i think we will push engineering beyond certain limits, which is humans

designing things they can understand. if you would ask the question, will we one day have something that is smarter than humans, dramatically smarter, the answer has to be yes. emily: is it already smarter than me? steve: i mean literally smarter in every way. it has a conversation and gives you better answers to your question that i can. that will inevitably happen if you give it a billion years of normal evolution. to argue that nothing will ever be better than a human is argued that evolution and's right now. the buck stops here. that's not true. it begs the question, why cannot we accelerate the process? what can we do to rapidly evolve things that surpass us? emily: that is what you will be thinking about? steve: yes. 10 years from now, for sure. it has been great to have

you here. i will see you on the moon. ♪

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