>> this is the best oh bloomberg west. the unveiling of a old plan to colonize mars. weighing in on why he is concerned about donald trump. ad, jumping in the race with potential bid to buy twitter.

what does that mean? we will discuss. buildays that he wants to a city on mars. elon: we want to do the impossible. it is something that we can do in our lifetimes. is there really a way that anyone could go if they wanted to? i think that is the important thing. emily: musk said it could take between 40-100 years to create a self-sustaining civilization of as many as one million people. he unveiled a framework of the rockets that spacex want to develop to get us there. stanford university professor of aeronautics joins us along with starburst accelerator founder to

discuss. >> i have been collecting reasons for the last 40 years. it is not only the science, and the return on investment, but it is exploration list of great civilizations explore. as elon said, this could be a hedge against future catastrophe. emily: do you believe we could face an extinction event here on earth and that we need to go to mars to survive? >> the dinosaurs needed a space program, right? it could happen to us, although personally i'm more interested in the science we could do if we get people to mars. emily: what are your thoughts on this? it could be easier to set up the city than just going back and forth.

>> it is a good point. i am sure at some point we have a city on mars. besides elon musk and spacex, there are already a dozen good startups working on the technology that it would take to build that city. it makes complete sense, of course. emily: the plan musk laid out, do you see any holes in it? >> there is nothing that is dilithium crystals or a transporter beam, it is all plausible but at a scale that nobody has ever attempted before. he is talking about a rocket four times the thrust of the saturn five. will it scale up? i wouldn't bet against elon. emily: being a partner here, nasa is actively different view of why we need to get there. more for exploration, a man's mission in the future. musk is going for an all-out civilization. >> i think this is extremely important. i think it would be a public-private partnership and maybe an international partnership as well. i don't see this as being just the u.s. and spacex. emily: talk to us about the funding of this. obviously, it is going to be extremely expensive. by traditional or conventional means it costs $10 billion a person to get out there. elon musk wants to drop that to $200,000 a person. what do you think about his

proposal to investors? >> i think it will be a multi step business plan. we can compare that mission with the international space station. it got funded even if at the beginning it was only make sense for research purposes. as soon as there would be a couple of people on mars, maybe will find some interesting new types of materials or properties that maybe for large corporates it would make sense to invest and put a laboratory or research center on mars. and so, they could participate in the funding of the next stage. then, in the 10-20 years when we will have improved the engines and reduce the costs to go go there to a couple of thousand dollars to go there, that would be another business case for more people like us to go there. so it will take time. i see that more in a

step-by-step approach. like we see or the start of support. emily: scott, they should a video at the event today detailing the plan to the extent that they know them. did that look right to you? did you see any issues? scott: he focused on the transportation. of course that is what spacex does, and he admitted apple to the pieces that weren't shown with things like the life support. how do you support 100 people in the months and months it takes to get to mars? once there, he said you can live off the land which i believe but didn't show any of the equipment with the necessary technologies to do this. then there are other pieces like on orbit refueling, this is something that nasa has started in the past but never implemented it. a lot of engineering development but the big picture, and

optimistic and visionary picture hangs together, i think. emily: how might you support life? even just getting there? >> first of all, you need water. and the food and as he said the luggage and other pieces you carry with you. if he can truly build a vehicle this big you can take a lot of that for your trip out. if you build a civilization you would have to convert all of the water ice we know about on mars into water and oxygen to breathe and rocket fuel and so forth. i think that is feasible, and there will be an experiment in the future that nasa will do to show that is possible. but, to this point, nobody has shown it can be done on this kind of the scale. emily: last question to you, do you believe when elon outsourced the hyperloop, a whole new wave of innovation started up. do you see this plan leading to the same thing? creating smaller companies out there trying to make it a reality?

>> so, i really believe that it can be possible and can be done the same way it was done for hyperloop. we see ourselves in that, a platform where we provide through startups and innovation that would be enablers for life on mars. even when you look already we have startups that are doing astroid mining, planetary resources and deep space industries. we have all the starters that have been funded by nasa. they are actually working on the plants on the moon, or vigaro is another startup right now building a condo in space. yes, there is already a dozen startups that are working on different streams. a quicker access to life on mars. emily: that was starburst accelerator founder and stanford professor. to a story we're watching cisco's them to spend $4 billion in mexico in the coming years as the company will upgrade

factories and raise production. but the planning could be delicate for cisco coming six weeks after announcing job cuts. in days after the first u.s. presidential debate in which donald trump threatened to hike taxes on companies moving jobs overseas. speaking of donald trump, still ahead, entrepreneur and investor reid hoffman had some choice words regarding his candidacy, saying a trump presidency would range between disastrous and terrible. that full interview, next. this is bloomberg. ♪

emily: now snapchat says it has 60 million daily active users in the u.s. and canada, but a third of the users facebook has, which is the most lucrative market for social media advertising. north america has driven the bulk of sales on facebook and twitter and will likely be for snapchat as well. now to the u.s. presidential election -- many business leaders have remained silent about their views on this cycle. reid hoffman is not one of them. the prominent silicon valley investor and entrepreneur recently offered to donate $5 million to veterans if donald trump releases his tax return. in an interview he went a step further by going in depth on why he thinks trump would be a disaster for america. he also opened up about his personal meetings with hillary clinton and his conversation with his longtime friend from his paypal mafia days peter thiel who endorsed trump at the republican national convention. it is the most emotional we have seen him in many interviews. take a listen to why he decided to speak out. mr. hoffman: i think is

important for the democratic process to understand the conflict of interest of our leaders. to reveal their income taxes, they don't lie. you can know whether the person is honest about what they are asserting about their wealth or the philanthropy or their care of america. you can see all of that from income tax. if you are hiding it, if you refuse to disclose it that is an important political thing which we should not allow as an american citizen. emily: so, from the cofounder of facebook offering $20 million to democrats in the election, to mark cuban offering $10 million to charities if donald trump sits down for an interview with him. what concerns you the most in particular by donald trump? hoffman: i think he doesn't have a policy plan for any thing he asserts -- he will defeat isis and fix the economy. i don't think there's any plans for that. he has no demonstrated record of public service, and he doesn't

know -- these are real problems. we need to solve them. we need people who have a plan were thinking about it and consulting with people about it for that that is what we need. that is not donald trump, that is hillary. emily: what would be the impact of a trump presidency on innovation and silicon valley? hoffman: it would range between disastrous and terrible, somewhere in there. that is partially because what we do is we take these risks to build a global product. we are essentially in silicon valley building these things which -- iphones, and google, to represent america to the world. and to bring back a bunch of positive economics into the u.s. system. trump's policies would greatly damage all of that. the world will look at us much worse. how do you invest in innovation and how do you do that over the long-term? it is not the art of the deal or a single deal maybe you don't pay your contractors later. it is not that kind of thing. it is the kind of thing where you invest in the long-term and that is what i see hillary doing

her entire career as a public servant. she asks me questions about how do i build the innovation economy? that is not trump. emily: what is your impression of hillary? mr. hoffman: she will be a great leader. she asks questions and wants to bring america together and is very focused on small business and how does every american get a job in the future? how do we make that happen? is it investing into computer science, small business, or capital for small business? how do we make all that happened so we are all getting a better future together. she approaches it with a question of how do i get everyone involved? what are the ways you can help with this? you would think she would sit down and talk only about winning. she never asks me that question. she asks me questions about the economy, about middle-class,

about technology helping the middle class. those are the kind of things we see from hillary. emily: you signed a letter endorsing hillary clinton. what do you think she needs to do to win younger voters? the people that don't even want to go to the polls? mr. hoffman: they want to hear a big vision. that is why they loved obama. i love obama for this reason. hillary is a competent leader. she says, how do i get everyone in the boat to make something happen. she doesn't say i will issue this totally big vision that will wow people with my charisma. she says i know how to get everyone in the boat and run a democratic process and govern in an effective way. what i hope to see, the young

people need to understand that it is and that she is selling a vision, but she is a competent leader. that is what i am voting for. she actually has her values. we should get out and vote because this is the future you want to be part of. emily: it is so clear to you what is the right decision. it is not so clear to some people in america. the polls have tightened up. why do think that is? mr. hoffman: people have to understand that we are in a mini crisis in america and that many people are worried about our future. we are worried that we have overextended globally, where will our children's jobs be. those are issues. those are super important. it is important to solve them. it is important to get everyone in the boat to get in a democratic process by which we are coming together, which we collaborate to make this happen as opposed to making vaguely racist slogans or other kind of things. it is important to do that. the reason to come together as people feel like we are in crisis and want to change.

that is important. i think the way to do that is working together versus sloganeering. emily: that was the first part of our conversation with reid hoffman. we will hear more next, and details around his conversations with longtime friend and trump backer peter thiel. later this hour, the silicon valley m&a cycle heats up we hear from veteran dealmakers about what is driving acquisition and buyouts. ♪

emily: now back to my lively conversation with silicon valley investor and entrepeneur reid hoffman. his views of u.s. politics this election cycles. i asked him for his thoughts on investor peter thiel's backing of donald trump. take a listen. mr. hoffman: peter and i have been arguing for 30 years. since we were undergraduates at stanford. we argue about a lot of different things. i think peter feels intensely that we need that kind of radical change.

part of the reason he was able to give what was by and large a very good speech at the commencement -- convention, which was actually a thought yes we are builders and should be building. actually, hillary is the candidate for that not trump. so, he and i because both value truth we talk about this a lot. we're in a constant state of argument about this. i think i am right and i think he is inventing policies that trump doesn't have. emily: do you think this will hurt peter when it comes to entrepreneurs and support within the valley? do you think he will lose opportunities because of this? mr. hoffman: i think the impact will be relatively minimal. i do think like most of the questions that i get from people

here who are strong business people who invent the future are trying to be good americans both in the u.s. and abroad think has he gone crazy? why does he have the views he has? that is the first question i get. we know what we need to do to try to help all of america. that is hillary, not trump. why is peter off in this weird place by himself? i have to explain that he thinks we need a radical change, and he is inventing policies that are actually never credibly seen from trump. emily: you don't think he has gone crazy? mr. hoffman: maybe in little. [laughter] emily: you work with a lot of different companies. why did you decide to step up to the plate? many business leaders have been tiptoeing around this. i'm sure there are some doing the same for hillary clinton. do they have an obligation to speak up? mr. hoffman: i think they do. i think one of the things -- when the candidates are close together, i think it is a reasonable business decision to say i will be inclusive by being apolitical. i will not comment. republicans buy nikes too,

da-da-da. i think this is literally two different planets of choices for stuff on one hand the most prepared candidate in history. who has a a lot of experience and great ratings as a secretary of state for steps you will be great on foreign policy. she has depth of experience in the senate and experience in the white house as first lady. you give is very long -- i know this game is played and i can start immediately day one being effective. then you have a reality television star who does slogans. when you are in that situation, we have to say we have to step up. this matters deeply to all americans in the next four years.

what will be our standing in the globe? larry summers says we will go into a recession nearly immediately if we choose wrong here. let's make the right choice. the business leaders need to say to be inclusive and to be closer to my customers but i need to step up and say as a leader what do i think? emily: you talk to everyone. you are the biggest networker in silicon valley. what have you been trying to encourage people to do behind the scenes? mr. hoffman: to figure out where they can lead. i think everyone can lead. i think if you are an individual, you can lead. the more power and resources the more influence you have you can lead more. speak up about things you think the most important. at the very least, inform the electorate. if you think this will be a complete disaster for business, i think his business has four bankruptcies? something like that. if you want to be a voice of

what is good for business, step up and say what that is. you can say it in a gentle way. you don't have to engage in the vitriol that is so common. look, here is what i think the right decisions are, and here's how i think you should think about them. emily: i know you are interested in the political process. you post about the political process. when it comes to the electoral process, what makes you most angry? the way that elections are run today, the way this country is run today? mr. hoffman: there is a lot of things. the thing that is most difficult is a little bit like the obstructionism in the confirmation of the ninth justice. we are in this boat together, let's work together. we may have points of difference we may say that x should be the policy rather than y. but we are in the boat together, let's not do lots of name-calling. let's not create fictions around

this birth certificate for years. let's not do any of that. let's say how do we actually figure out a way to improve the boat we are on. we are all on it. that is the thing that is most frustrating. emily: i know you love games. you created a card game called "trumped up cards," which you call a satire that reveals the absurdity of our recent situation. the proceeds you say will go to charities that are already making america great. what is the idea here? mr. hoffman: games are things that you do socially. it creates the context to have a conversation. i think it is absurd with someone who's primary qualification is a reality television star running for president. but, think about it -- be

informed. consider what the positions are. because absurdity in the tradition of the daily show and john oliver is very good education. we thought this would be a good way of having edutainment. people can play it then talk about it. kind of go, what would be the right choice. an informed choice. that is the idea. emily: this is a game that now everybody can buy, it says including vladimir putin he can buy this game. last question for you, i know it is hard to ponder at this moment but if donald trump is elected what will you do? will you move to canada? will you leave the country? mr. hoffman: my obligation as a citizen is to stay for stuff but for the first time in my life i have the impulse that vancouver is not such a bad town. that is part of the recent why i decided to get so active. i saw that decision and i thought i have to step up because -- if i, who feel very deeply about the patriotic responsibility of being a citizen. if i am having that emotion i should step into the game.

emily: my interview there with entrepreneur and investor reid hoffman. now to a story, u.s. regulators claiming alan tier technologies discriminates against asians, raising questions about diversity in silicon valley. the labor department said they relied on a system of employee referrals which along with the resumes and phone hiring process resulted in bias against asian applicants. regulators are asking the judge to award lost wages and benefits of employment to the applicants. palantir denies any allegations of bias. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com. this is bloomberg. ♪ ♪ emily: welcome back to "best of bloomberg west."

emily: this is "the best of

emily: this is "the best of bloomberg west." i am emily chang. it is time for series a, where we take a deep dive into the world of the private market. how tech investing has evolved with some startups commanding multibillion-dollar valuations, disrupting often heavily regulated parts of the economy. venture investing is also attracting private equity players to the tech space.

two veteran investors joined us for the conversation. and partner at tpg. >> the question of whether or not to go public has so many angles. can you go public? are the markets ready for it? will the markets be receptive? as long as they are investing privately, what is the hurry? the point you are making about valuation is a key one. you do not want to get to ahead of yourself because the public markets will probably be more disciplined about valuation than the private markets where we are seeing that with the proliferation of unicorns. arguably, there are not 160 are whatever it is billion dollars companies. if they were all to be public overnight, we would probably see a correction in several numbers of those. however, you have got these companies like airbnb and uber, which are completely breakout stories, and as david said, when uber was raising capital, because we did the series b, we were saying uber has so quickly transcended what the value is. it was a phenomenon. that is when we went to the guys

at tpg and said you need to get in here, and uber said yes, we can benefit from somebody like you, so these guys are exceptions. it is a barbell. i think if you look at the amount of dollars that uber and airbnb absorbed and finance, i think they soaked up one third in the recent quarter, so you are seeing a barbell affect. emily: airbnb is in the middle of raising $750 million. is it smart for these two particular companies to be waiting this long to be driving their own valuations up before they see what public market investors would actually pay?

>> i think they have the best of both worlds now. historically, the only way to access a lot of liquidity was to be public but in the private market you can access a lot of liquidity. they are not liquidity constrained. they have to benefit letting the back office catch up with the revenue generation of business, getting the ducks in a row. they are unique examples of thing able to have your cake and eat it too. i think the assumption of these companies staying private longer, it depends on your lens. perhaps if you are saying companies with those billions in revenue used to be public, that is fair, but if you look at the lens of when they are founded, these companies are six years old. plus or minus. i am not sure if you go back and historically whether you see much of a differential if you

look through that lens in terms of when companies go public after being founded. it is these businesses have scaled much more rapidly than a historic giant. i think part of it is give them time to get the back office in order to be that quarterly filer. as long as you can have your cake and eat it too, why think about it? >> i agree with what you have said. what is going to be the key determinant of valuations, is how willing the public markets will be to pass forward. in good ipo markets, tech investors, the same guys doing the private investing, they will go one or two years out and normalize margins, and give you a multiple from there. they are doing almost a mini discounted cash flow two years out. if they are willing to go to that extreme, i think you can start to see a lot of support for not only these valuations but premiums on these valuations in the public market.

the question is will the public market pay for growth? if you look at the past 10 ipos, they are all trading above issue. historically, about one third of tech ipos trade below issue. there is really know where to invest for these public investors. a lot of the flow has been absorbed. emily: what about m&a? what do you see more of? what do you see less of? >> we are in an m&a cycle. we are in an m&a boom and i think it will continue for at least a few quarters. when you think about what could trigger m&a, bloated balance

sheets at the corporate level. there is a lot of cash and little innovation and for the large part, corporate have outsourced a lot of r&d to tech startups, so we have seen a bunch of e-commerce recently. you are seeing the tech darlings start to put some hurt on the incumbents. it has been talked about for years. it is actually starting to happen. the rate of models that the amazons of the world have introduced need to be replicated. so walmart's acquisition is a great example of that. it made no sense by the numbers but the team is a fantastic team. they are building a marketplace and 58% of amazon's revenue is marketplace revenue, and walmart has zero. that is a problem. marketplace revenue, your margins are much higher. macy's closed 15% of their stores. that is a problem when you see e-commerce companies growing extremely rapidly because the new generation is willing to buy elsewhere. m&a is going to continue for

sure, especially while the ipo markets remain. emily: we saw microsoft, linkedin, walmart, unilever. what do you think, what, when, how much more? >> i think a few things scott mentioned have been true for a few years. low corporate balance sheets. they have access to cheap capital, people trying to manufacture growth anywhere they can. the thing that is starting to shift is more realistic seller expectations. you are seeing this private financing market change, and we see that in a few different ways. we see that in a few different ways, one is i would argue in this run-up in this environment we have been in, it is much more about access to investment opportunities rather than diligence. we probably put too much to industry to access without diligence and flipping back to diligence, it is great investors have both. i think you are getting more rationality, people realizing actually operating these businesses, scaling is tougher than expected. getting the unit economics maybe harder than expected. you are starting to see, i will go it alone and be fine, people are questioning that. i think that is starting to turn this m&a environment. emily: have we been in a bubble or are we in one?

>> i think we have been in one. we are slowly starting to see that reset. a lot of the private financing has been large. people have time. it is not going to be one of these things that the tap turns off, and in the private markets in 1999 and 2000 was very different than what happened in the public markets. one day to the next, you saw a massive changes in valuations. here it is much more concentrated in private hands. companies have much more cash in the balance sheet. businesses on average are probably healthier and better so i think it will play out over a bit of time. emily: twitter, what is going to happen to twitter? we have reported that disney is interested, salesforce, alphabet. >> i do not have any inside information as to what twitter is doing, but i would say it is a fantastic asset with its reach. it would be additive to a lot of folks. disney would make sense. if the football example is going to stick, that is a great example because disney does not own distribution in so much as they can have their own and operated distribution through a twitter platform.

that would be very positive for them. it has been rumored salesforce will be in it for the data, and i think it makes a lot of sense. it is an interesting story playing along the lines of what david was saying, although twitter under scrutiny, flat subscriber growth, and really trying to find themselves. now they are probably going to be defined by somebody else so i think it is clear by the signals, they are having conversations. we will see how that plays out. emily: you guys are investors in spotify. we just reported they are interested in buying soundcloud and expanding to japan. any thoughts on what this means for the future of spotify as an independent company or not an independent company? >> i cannot comment on m&a speculation. we invested in spotify rather this year. the results have been really

outstanding. i think when it gets reported, people always think it is kind of this fixed pie in the industry of streaming subscriptions, and if apple does this, what does that mean for spotify? the reality is i think we are in an environment where the vast majority of the addressable audience are not subscribers yet, and by more entrance into the space, the rising tide lifting all boats. consumers are becoming more aware of this value proposition in streaming. i think all of the new entrant activity is great for all the players. and when consumers do the research, they start saying, what is the best product and why? i think spotify wins in that. emily: you guys are both biased, but what about lyft? independent acquisition or bust? >> david, do you want to take that one? >> the rumors that have been out there, it feels like they want to try to solicit m&a interest,

not sure where that came out. it will be interesting to see how that business continues to evolve relative to competition with uber. then again, people focus on these car networks and have believed in self driving cars. i think it would take somebody with a very long-term corporate or strategic interest to see that relative to the underlying unit economics of the business. >> i think lyft is a sideshow. the real show is google, apple, facebook, what are they going to do? the car is one of the last devices. they need to own it. they need to be in a. emily: coming up, what does the future of tv look like? we will hear from an industry veteran and the maker of apple's first original program. this is bloomberg. ♪

emily: now to a story we are following. apple is moving its london headquarters to the south bank of the river thames. it will be the largest tenant at the former power station with 1400 employees across six floors, but not until 2021 when the project is complete. the future of content, who owns it? what does it look like? tech and media players are vying for the best original content and apple is now joining the race. it has a new show that we know will be about the app economy with jessica alba and gwyneth paltrow appearing. what kind of show is apple hoping for and how will it be different from the rest? we caught up with the media veteran cast with this did you, ben silverman, co-ceo at propagate and former cochairman of nbc. take a listen. ben: i have a long experience with apple, having produced "the office," which was one of the

original shows that helped in the rollout of itunes. a great, long relationship. incredible partners. it is thrilling. obviously, our all-star "mount rushmore" cast is exciting and something i'm thrilled to be working on. emily: i know you want the show to be different than anything that has come before so how do you expect to make it different from let's say "shark tank" or the voice, anything else on television? ben: i am not able to reveal that much about our format to the public at large but i will say i do not think there is a show with a lineup of such accomplished entrepreneurs. they come from an entertainment world but with a real perspective on how technology works and app development, but also how to build a business.

if you look at the valuations associated with what jessica has created and is potentially selling to unilever, and if you look at what gary has accomplished from being the first youtube star drinking wine to push products for his dad's liquor shop, and if you look at what will.i.am has done. in promoting content through devices and pushing out partnerships like the one he had with beats and apple previously. goop, gwyneth's company is doing well. she is building something brick by brick. i am excited about the combination of talent we have. apple as a partner is extraordinary and one of the reasons we were able to attract that talent is because we are in business with apple, and they are our partner. i am sure everybody wanted those ladies and gentlemen on their shows, and we got them because apple is our partner.

emily: we are looking forward to it. you also have a number of other different projects going on right now, and i'm curious, where do you see the future of content going with the rise of so many distribution platforms? having been on the front of the itunes revolution with "the office?" ben: i think we all need an updated tv guide. i took my mom and six of her girlfriends out last night and i will not reveal the median age, but let's say there was a seven in front of it. the first request they had for me in preparation for our interview was, i cannot figure out where anything is and what channels am i on? the organizing process needs to happen, and that is going to help it a great deal as it accelerates, but i think what we are also seeing is so many people differentiating their offerings through content. the fact that the internet has

developed at such an extraordinary pace but has also become a media platform, and as it becomes a media platform, more and more players need to use video to differentiate across it. that is great for people like me who create and produce shows at a premium level. you are seeing content initiatives from verizon to comcast on the kind of pipe delivery side, but they do it to the news that i watched on air as you are prepping around twitter's potential sale to somebody, and that could even be disney. i think it is an amazing time to be a show creator and producer and storyteller because there are so many players looking for those great stories to be told on their platforms and differentiate it. i think it is a great time to be a consumer because you have so

much choice as to what you want to watch, where you watch it, and how. emily: you have a new movie out. if content is king, what kind of content is running the kingdom, movies, tv, digital? ben: i heard something interesting today, movies on television have become commoditized and were almost the lowest rated option as you look to put something on air. traditionally, if you remember "it's a wonderful life" every thanksgiving would deliver a huge rating. or exodus around easter and get a huge rating. but there was a real lag as movies became available everywhere, but now you are seeing movies rate again on television because people recognize them and they can

watch a scene or two that they responded to. i know that turner networks just bought "star wars," which did well for them. that would not have been a deal they were excited about just five years ago. i think it also relates to the fact that the reruns are going down in ratings, but also, it only takes you to watch six minutes of the show for the rating to count, and with a movie you see the scene you like or the moment in that show where you recognize the actor, and it brings you a warm fuzzy feeling. you may watch six minutes and go to a show that you really cared about because i think tv is the best platform. the best medium and the best storytelling around. the story of "hands of stone" required a theatrical motion picture to tell. emily: ben silverman. that does it for "the best of bloomberg west." on monday we will hear from former twitter ceo, now founder of chorus. he will tell us about his new venture, 6:00 p.m. eastern, 3:00 p.m. pacific. we will see you then. this is bloomberg.

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♪ china's official factory gauge remains at its highest in two years amid continued stabilization and reducing prospects over stimulus. >> fears grow at a property bubble. seven leading cities introduce curbs to cool the market. last chance to show that it be profitable without raising more money. >>