emily: he is the owner of the world's very first model s, and an early backer of elon musk's tesla and spacex. a fast talker with an unconventional investing philosophy who once shadowed steve jobs. he has amassed one of the biggest private space collections in the world, and has spent his days pondering the future of artificial intelligence, genomics, 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 two things. in this case, it was jack smith and his partner. 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 e-mail server. we invested in what became the first example of viral marketing on the internet. emily: of course, microsoft went on to buy hotmail. i want to talk about how you became a guy who can make these kinds of predictions 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 intoxicating about the ability to code machines, unlike other experiments that take time to learn. the learning cycle is so rapid when you program. 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. emily: after you got all this schooling, you worked for apple, you worked with steve jobs at next, and he tried to recruit you at pixar. what was your relationship with steve like? steve: it was a short time, but it was pretty intense. he was someone who has this incredible, laserlike focus on who he is speaking with. what i remember so vividly, the walks that we would go on. i had hoisted into an agreement with him that i would study how he does businesses. emily: you are like his protége? steve: 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, sat across from the fireplace, and talked for like three hours. what i remember most vividly, when i was at next, he was obsessed with apple. next has nothing to do with apple, he is distraught. he sees this visceral pain when apple is getting beaten around in the public eye or the press. 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 ever bring you back and keep their job? of course, that's exactly what happened. he came back, and boom. 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 recall him stating a strategy. it was more like, this is crap and this is beautiful. more specifically, elon musk as well, which i came to learn, has this visceral agitation with imperfection. emily: tell me about your relationship with elon. he went into debt with tesla, writing checks to make payroll, and the headlines say that you saved him. steve: he was doing just fine. we first met in 1996, when he first came to california, pitching his first start up. i heard it, but we did not invest in it. the relationship -- seeing him develop these companies was fascinating. in december of 2008, he saves tesla single-handedly. he went to personal 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 of the total. assuming everyone else is in, i am in. it is a herd mentality. if everyone else's in, i will be in. we invested in a way to get him out of the hole, so that is why i became an investor in spacex and tesla. emily: you guys have such a close relationship. i feel 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. we go out to the black hawk desert, there are really big rockets. i have also converted the dfj lobby and hallways. it is full of artifacts from the apollo era. literally a piece of every lunar module that has been on the moon.

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: if it were up to just me, probably 5, 6 years. you don't want to go on the first flight. you have to wait for the fourth or fifth. the perception of fear is that it feels like a dangerous thing. this kind of visual failure with everyone. but the goal with spacex is to make it as routine as air flight, so to make the rocket reusable so that you don't 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 late june, and that was a huge blow. have they fixed the problem? steve: they believe they have. with a high degree of certainty, they have identified what the problem was. it was a single little bulge,

frankly in front of a larger tank. emily: so what happened? steve: it failed. but they can push that aside and put in a replacement design that won't have that problem. emily: so will spacex 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: 20 years to get the colony started? 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. and not just an s, but the very first s ever made. emily: you have the very first s ever made. wow. steve: yeah, elon and i got the first production model x. emily: how is it performing? steve: great. emily: how many times has it been serviced? steve: not much. i have yet to replace the brakes. there is no spark plugs, no muffler, no smog check. none of the usual stuff i used to get maintenance on, like tires.

that is really the only thing that has needed anything -- emily: so what features are you most excited about? steve: i get very excited about the future of autonomous driving. just like the electric car. you know that all vehicles will be electric. for most of us, driving in one of these -- a lightning bolt goes off in your head. the same thing with autonomous driving. you look back and think, why do we let our teenage kids drive? 10 years from now, we will look back to the present and think, wow, we thought that was ok? the way it will come to market is as a service. an uber or lyft-like service without a driver. low-speed, urban, vehicles that could almost certainly not kill anybody. in the abstract it is scary, but in the reality it's not scary at all. emily: when will it hit the mainstream? when will i buy a self driving car? steve: you might not buy one. 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. if you believe as elon does that all vehicles will be electric and all vehicles will be autonomous, as i do -- 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 vans 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? steve: yeah, it's hard to -- emily: how optimistic are you about an applecar? 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. the newton. they have a few misses. emily: you are not a fan of the apple watch? 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 s, which is arguably very expensive vehicle, if you factor in the cost of ownership over 5-7 years, which are so much lower, your total is not much different from a high-end ford taurus. if you start with that next vehicle and do the same analysis, it may come out to the like a civic, you know? that to me sounds like a more mainstream vehicle. ♪ emily: how concerned are you about google's ambitions? ♪

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: for the next five years, probably a little bit more than five years -- five-ish years, we have what we call 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, figure out what we want to do today. 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 in the world around us. traffic patterns for example. it will help us see things we didn't see and pointed out, wow, i can navigate more easily through this traffic. or i can optimize my calendar it away i just could not see before. i think that will start to acclimate as to what we call it ai slowly. rather than boom, robots take our jobs. emily: how concerned are you

about google's ambitions in ai? steve: how concerned? a little bit, just because there is a bit of a reckless abandon, almost like a technical utopian flair, with the occasional -- when pressed -- 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 they will feed us little treats and stuff. there's something else like a pollyannaish, 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. that ideally we may never 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

iterating a solution very rapidly. emily: what do you mean? steve: imagine much like a newborn baby who can learn anything, you literally build a brain in a box. it is exposed to photos like google is done. but that same program could recognize anything on the internet, recognize speech, or be used to find tumors in mammograms. or other pathology slides or radiology slides. you have these generic learning machines you can apply to different things, and you don't know how it is done. just like the brain works. we know how it got there, but we don't know what it is. emily: could these computers one day take over the world? steve: yeah, but why? emily: because they become smarter than us, like a lot smarter. steve: that's why we would make good pets. what they would do is -- one day we would wake up, and -- imagine a gap between us and our pets, like my cat thinks it is hunting

that toy mouse with the catnip. it thinks it is a fierce hunter, but it's in the house. i think we wouldn't even know. we would have much less violence overtime. 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 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 ask me a question like that, somewhere a fairy dies. the unicorn fairy.

you have to believe in them. i don't know. it is interesting how the private funding world is reaching valuations we have not seen before. 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. it doesn't really mean anything. 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 don't have 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 ability to revolutionize. there were these special kinds of needles. we wrote 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 -- but certainly not a week goes by that someone has not gotten us excited. we keep hearing about the steve jobs and elon musk of the next generation, but some of them are dead wrong. you are scratching your head. do i believe them? can this happen? i think the best partnerships are when the investor believes in the entrepreneur. when we first invested in tesla, i was absolutely convinced that all vehicles would be electric. it was not my idea. it was his, but i fully bought it. when i hear him explain it, he has won me over. i have been wrong, and i will be wrong again, but when it is right, it's really remarkable. and we talk about the ones that are right, right? emily: so the world of venture capital has changed a lot in the last years. andreessen horowitz has come on the scene and it is the hot new

firm. they've got a lot of people in recruiting, marketing. steve: like an operation. emily: right, right. 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 will not 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 a different approach, which is looking for industry sectors that are not over-invested. the ones where frankly, no one else is competing for the deal. the vast majority of investments i have made, there was no competing offer. emily: really? the question i was going to ask is, how do you get on the top list for every entrepreneur? steve: when were first investing

in space, there was that no one else saying they were in space, so what i try to do is be 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 ideally a small team of five to seven people, no more. i think almost every endeavor, whether it is creativity, or decision-making, or a state of ambiguity is needed, if you go beyond seven, you are less effective. emily: so what is next for steve jurvetson? steve: i think you will find me learning. one of our companies is working on pigs. we want to harvest organs for humans by changing the immune system of a pig to be like a human and solve the transplant problem. i think the field of biology and information technology -- we will grow technologies. we will build things that feel like brains, much less like computers. we will build things beyond the human design things which they can understand. if you ask the question, one day, will we have something smarter than humans. the answer will have to be yes.

it cannot be no. emily: smarter than me? steve: no, no, 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. if you just give it a billion years of normal evolution. to argue that nothing will ever be better than a human means that biological evolution suddenly ends right now, and that is obviously not the case. we have wicked smart humanoid like things that we evolve into. that begs the question, now that -- why can't we accelerate the process? now that we understand the process of evolution, what can we do today to rapidly evolve the things that will 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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