♪ >> from our studios in new york city, this is "charlie rose." >> i'm filling in for charlie rose, who is away tonight and roger stone is a longtime advisor and friend to president trump. his new book is called "the making of the president 2016, how donald trump orchestrated a revolution." i am pleased to welcome him to this table. welcome back. you've know the president for how long? in 1979 when i came to new york to organize ronald reagan's campaign for president. i was introduced to president trump by his attorney, roy cohn.

i was trying to put together is a statewide campaign for reagan. cohn arranged an appointment for me. donald likes politics the way he likes sports, he follows it carefully. i said, mr. trump, i'm roger stone. he said, please call me donald. the day after he was inaugurated i said, mr. president, congratulations. he said, please call me donald. host: you met him when he was in his early 30's. how has he changed since then? roger: he's calmer, and he has a great deal more experience . i wanted him to run for president as early as 1988, more earnestly in 2000, and certainly in 2012. but in retrospect, 2016 was the right time, the perfect storm. host: when do you think he first started thinking about that? there's a clip with mike wallace in the mid-1980's.

i'm not sure whether he was going for the presidential look or not. one suspects may be a little bit. you first met him in the late 70's. when do you think he first started thinking about running for president? roger: i think he took a serious look at it in 2000. both ross perot and then governor jesse ventura urged him to look at the reform party nomination. the reform party was entitled to federal matching funds, a substantial amount of money for the general election. like me, he was dissatisfied with the choice between al gore and george bush. he concluded correctly that one can probably not be elected as a third-party candidate in this country. one probably needs to be a republican or democrat because there are candidates have to spend on an enormous amount of money just to get on the ballot and then there's the question of getting into the debates, which has been impossible for

third-party candidates. lastly, you start with no base. one thing he was consistent about, i don't want to run unless i have a shot to win. host: do you think today he feels most comfortable in one of the two major parties or in a different party in that ideal world for him? roger: his nomination was a hostile takeover of the republican party. i think he feels, and i agree, the party has left its moorings as the party of smaller government and strong national defense, personal liberty. he's going to now remake the party in his image, as all republican presidents have done, whether it is lincoln, theodore roosevelt, to dwight eisenhower, richard nixon, ronald reagan, all remade the party in their image. host: it's been a busy couple of weeks. got a plan? roger: he's a man of action. it's surprising to washington because the idea of a politician or political figure who actually

does what he says they were going to do on the campaign is kind of unheard of. george, read my lips. no new taxes, right up until the time that he raised taxes trade i think the washington establishment is more than used to elected officials who say one thing on the campaign for rhetorical for political purposes but then when they get to washington, they abandon that agenda. anyone who thinks trump is going to do that doesn't understand donald trump. when he sets his mind on a goal, he's extraordinarily stubborn, focused individual. host: washington is not necessarily designed for speed. and so there is going to have to be some coming together or compromise or not. it's the expecting or is the

administration expecting to bulldoze what they can through, or do you believe -- you said, the administration's potential biggest enemy is republicans. roger: conceivably. host: if they don't cooperate, it could be trouble for the president and administration. if you are advising him right now on the best approach and if the situation looks rocky with republicans, what do you tell him? roger: first of all, i think he will do as much as he possibly can through executive order. the trail has been blazed on this by none other than barack obama. therefore, those liberals screaming about his executive orders live by the sword, die by the sword. when it comes to legislative process, you have a republican president who won't be afraid to take on the republicans in congress if that's what it takes.

i think in the campaign, when paul ryan attempted to put distance between himself and donald trump in the closing weeks of the campaign, that turned out to be a plus. he really was liberated. he is not a captive of the elite of other party. unlike previous republican presidents, while they had no compunction to take on the democrats, if they have to take on the republicans, donald trump's ability to go directly to the people, over the heads of all the politicians, may be unique in our time. host: what is encouraged you are concerned you about these past few weeks? roger: i don't like the leaks out of the white house. i think that's disturbing. host: where are they coming from? roger: it's impossible to say. when you hire people who are not loyal to you or you hire people who didn't support your candidacy, a thank you run this risk. it is deserving -- disk serving

the president who hired you to leak. i am a good friend and have a very high regard for steve bannon. he is not a leaguer. the leaks are coming from elsewhere, and it's very disloyal to the president. host: bannin has gotten a fair amount of attention in recent times. is there anyone right now is -- that he's listening to more closely than steve bannon? roger: i think it's the other way around. this mean that steve bannon is trump's brain and he is the de facto president, that's nonsense. that steve bannon and donald trump are copacetic, they have a similar worldview, there is no doubt about that. i think he is merely implementing what donald trump laid out in the campaign. nobody puts words in donald trump's mouth. nobody makes up his mind for him. i've known him 40 years.

he will listen to others, he will take in advice. i hate to of the day, borrow this from george w. bush, but trump is the decider. he's not a marionette for anyone, he's his own man. in this case, not the holden to anybody but the american people. host: so the present campaign for president and then with president-elect who you see on twitter and other places is still the president and is not going to change. roger: not at all. what you see is what you get. this is the man the american people elected. these things have to be seen and some historical perspective. crude. ignorance. uninformed. a wild man. this is what they set about andrew jackson. an egomaniac. a guy who is constantly lying. these are things they set about theodore roosevelt. one of our other greatest presidents. it's very hard in the eye of the

storm to assess these things. it's kind of outrageous that people are trying to some of the administration when the man hasn't even been president for two weeks yet. host: there's also been a lot of focus on jared kushner, his son-in-law and his role in the white house. how do you see that? roger: the president has confidence in jared kushner and therefore, having mr. kushner has the ability to play an important role. on the other hand, mr. kushner is discreet about his advice to the president. that's the way it is supposed to be. i can't tell you what advice he's given the president. i shouldn't be able to tell you. the airing of dirty laundry in public by people who work for the president through leaks really disserves him. that is something jared kushner will never do. he has the president's trust, is highly capable, and he doesn't leak. host: the president talks about this movement. you call it a revolution.

i wonder, does he -- does he want to unite the country, bring people together, or as the main focus, you are playing to the base? roger: i think he understands that if he is successful in revitalizing our economy first and foremost, he will have the tools to bring us together. nothing makes people happier than a job. and therefore, i think he understands that no matter what the chattering classes say, if he delivers on the big picture things he said he would do, or a least he heads in that direction, because these problems go back 30, they cannot be solved overnight, that is the single best way to unite the country. many times in the campaign he would say, after a year or two, you will see. i will do a good job great i think that's exactly right. he's a manager, he's a pragmatist. he needs to be given a chance. host: the unemployment rate is very low right now. roger: yes, but the unemployment

rate appears to be low because we have taken the people who have stopped looking for work out of it. in other words, we read the numbers to make them look lower than they are. host: the relationship with the media has been a big topic in recent times, whether the media wants to talk about that or not, or anybody wants to talk about that and everybody wants to keep doing their jobs. the media has been the target. it has been the very dishonest press. how has his position on the press evolved over the years you have known him? roger: his relations with the press have benefited him and enormously. the fact that he came to this race with universal name id, perhaps enhanced by 15 seasons on "the apprentice," is an enormous asset. i like marco rubio, but first he had to tell people who he was before he could tell people what

he wanted to do. trump had no such stop. people knew who he was going in the door. i also think this election was one in which we reached the tipping point, and therefore the mainstream media, which enjoyed a monopoly on this is -- dissemination of political information and lost that monopoly, it's been broken. perhaps because of technological advances. more people now getting their political information from their handheld device than from a television set. and therefore, abc, cbs, nbc, and the two cable networks have really lost a lot of their srength and a lot of their viewers as they are two alternative media, all alternative media. net-based, radio-based, and so on. if that were not true, i don't think he would have been able to win this election.

it's the fact that we have demassified the media through technological advance that allowed a broader cross-section of sources for voters, and in many ways, i think that is the key to donald trump selection. host: do you think the media is dishonest? roger: some members of the media are exceedingly dishonest. some of them have no journalistic ethics. i don't want to mention names, but for cnn to let john podesta go on in prime time before the election and accuse me of having advance knowledge of the wikileaks and hacking of his email, and then come back on after the election and repeat it, and afford me no opportunity to respond, that's not journalism. that's opinion. cbs, to their credit, when these charges were made, they sent a camera, they recorded my response and played both of them back-to-back. that's what real news organizations do.

host: in fairness, you have also said some things about people on cnn. roger: i've apologized for most of them, that's true. who among us is perfect? host: i was fascinated by this old clip i saw from "meet the press." it was tom brokaw talking to richard nixon years ago. i think it was in 1988. you worked for president nixon. brokaw asked him if there was anything he would have done differently. nixon's response was, i suppose i could've treated the press a little bit better. then he followed it up by saying, i suppose they could have treated me better too. i wonder if you think at some point president trump might say something like that. do you leave room for that possibility? roger: the mainstream media monopoly was in full swing when richard nixon was president.

he took them on anyway despite the peril of that. in this case, the media is now in much broader than it was, frankly keeping reporters honest and some news organizations honest is not a bad thing. but this election is also the first one in which the majority of the voters figured out that big media was in bed with the big establishment, and to a great extent, many in the media thent -- parrot establishment blind. the president has no choice but to take them on. he's a fighter. he has enormous courage. a rapprochement? sure. i think he will be combat rape to those who he thinks are covering him fairly. but he's not at all hesitant to those who he thinks are not covering him fairly. host: so the approach in the first couple weeks is, bring some glass. -- break some glass.

and then reassess from there? i know you're not inside the white house right now, so you can't speak to what joe kushner, steve bannon, reince priebus reselling them right now. is that, as for as you can gather, one strategy, as the come out strong on everything and then figure out where you can back off a little bit? roger: i think it would be presumptuous to assume that they have a strategy that is that machiavellian. i think the president's really focused on action on the agenda. if he can continue to take the strides he has taken to implement his agenda in a big picture way, all this other stuff is noise. whether the president is wearing a bathrobe when he's in the

living quarters of the white house, i don't think any voter cares. so, i think -- it's not going to change. it will be out there, but if he's making progress on his agenda and people are happy about it, it won't matter. host: that was an interesting article. roger: it was, very controversial. host: you think it's a bad idea all the way around, articles like that? roger: it was too long of an article for me to recall all of it. host: who is leaking information about bathrobes? roger: somebody who works for the president and his disloyal to him. host: what are you telling you right now, if you're talking about the -- it is spring amazing, it's 2 weeks, isn't it? if you are talking to them right now, you may very well be -- are you saying, ratchet it down a little bit, or are you saying increase the volume, increase

the speed, increase the efforts? roger: i consider any conversation i might have with the president to be privileged and proprietary and private. the fastest way you can and those conversations is by leaking. i take neither position. i like where the president is going now. stay focused on your agenda, do as much as you can through executive order and then get ready to unveil a legislative program and go fight for it. his ability to use his twitter feed of 16 million people to speak in an unfiltered way to the american people is an enormous asset. i don't have any false hopes about how easy it will be to move his agenda. we have had from the bush, clinton, bush, obama

continuum, endless war, erosion of our civil liberties, massive spending and debt, immigration system that has left our neighborhoods and communities unsafe, trade policies that have sucked the jobs out of america, and a foreign policy in which we appear to be going out of our way to strengthen and embolden and arm our enemies and undercut our friends. there's a lot there that donald trump is going to challenge. that's the thirty-year orthodoxy of the 2 major parties working together. undoing that overnight will be very difficult, but that's a fight i think he faces. host: do you think he should be using the twitter account in different ways, while in a governing position as opposed to a campaign position? roger: it doesn't matter what i think. host: he does listen to longtime friends. i think he does take the friendship seriously.

he's ultimately going to make his own calls here, but he's listening to these folks he's known for quite some time. roger: a lot of people have said he should not tweet at all, it's not presidential. just like a lot of people told him he should give up his cell phone. when our presidents have become isolated, richard nixon being the best single example, they lose touch with what the people are thinking. that's the single most dangerous thing that can happen. i think trump's greatest strength is that while he's a billionaire, he's not an elitist. therefore, he speaks easily with people regardless of what strata of society they come from. he'd rather have a -- have lunch with a group of cabdrivers than fortune 500 executives. he likes people and he's very likable. he has a great sense of humor, he's fun to be with, he relates well to people. i think he's going to be himself, this whole idea that he needs to change and become more presidential, i reject that.

he's the man we elected. i think people will be pleased with his progress on issues, and all this other stuff becomes a side show that voters don't really care about. host: the book is called "the making of the president 2016, a donald trump orchestrated a revolution." i appreciate your time. roger: thanks for having me. ♪

>> welcome to the program. i'm sitting in for charlie rose. we begin this evening with a look at the confirmation of betsy devos as education secretary. the senate confirmed her with the aid of a tie-breaking vote from mike pence. it marked the first occasion for a vice president to break a tie on a cabinet nomination. two republicans, senator collins of maine, and the center of alaska, voted against. betsy devos has been criticized throughout the confirmation process for her limited experience with the public education system. our guest from "the new york times" joins us now. one of the more unusual and controversial confirmation processes we've seen in quite some time. i wonder if you can tell me, was it all still a question up until the end here?

>> a lot of democrats would like to think that, but i think when it came down to it, mitch mcconnell was not going to bring this to the floor without knowing he would get the votes he needed to confirm betsy devos as education secretary. over the weekend there was a lot of agitating, a light of constituents calling and hoping they could move one more defector from the republican side so they could tip the nomination over, but in the end it seems like it would be those two republicans. host: how much effort did it take from mcconnell's side to keep those 50 on his side? guest: it's a little unclear, but it was clear they were doing arm-twisting behind the scenes. they were holding out for a long time in scheduling the vote, which indicated that perhaps they were trying to keep things up in the air, police keep just at least keep democrats on their toes. however, in the end i think he was able to look at it and say, we can bring vice president pence in, and he can put through the tie-breaking vote. in that case, the senators could be free to then vote with their consciences.

host: what moved collins and murkowski? murkowski? guest: they described their concerns as a lack of familiarity with public schools. collins and murkowski come from states where they have a lot of rural districts. the problem at least as far as betsy devos goes is she is a proponent of school choice. school choice is great if you have a lot of schools close to each other, and parents and families can decide, i would like to send my student not to the school, but the school nearby. when you have those big districts, it's hard to choose your school because it's hard to get to another school. mccroskey and collins looked at this and probably thought, it's difficult for my constituents to get on board with someone who isn't interested in improving the schools that we have so far. host: the trump administration has made some bold moves. very quickly, what do you expect from devos in her first time in office?

>> betsy devos said, i'm looking at a couple of obama administration policies. one was whether for-profit colleges would get enough federal funding based on whether enough students were getting into the employment force. there was also one that had to do with sexual assault on campuses. she said it was pretty mature to commit to following through on a more aggressive adjudication review process for campus sexual assault. host: there's a lot of concern right now from the public school advocates over what the incoming secretary might do. do you have indications beyond what we just talked about here about how betsy devos might navigate those waters and what she might do? >> she has some options, but most of them and with congress. congress has really offered occasions of limited appetite as far as going forward on school vouchers. in 2015 they approved an overhaul of the education system that didn't include vouchers,

thus indicating there's probably limited appetite for them among lawmakers. and really, she's going to have to come to congress if she wants approval for a lot of her plans. she can do a few things through the administration, and for example, if she overturns those rules i just mentioned. host: how much appetite in congress is there for some of the changes she might bring? emmarie: some. the fact that she was such a controversial figure doesn't really help her. when she comes in to talk to lawmakers, they are going to remember it was a tough confirmation process, most likely, and there were republicans willing to defect against her, which makes it harder for her to convince them. however, she does have those connections now, at least, so we will see going for what she can manage with them. >> how is the incoming secretary handling these conflict of interest issues that came up? she has reorganized her finances, divested herself of whatever she thinks she needed

to do. are there outstanding issues that remain? emmarie: there are some concerns. she said she would step down from the board of a least one company she and her husband are part of a however, she does retain her investment in that company. there is a pretty tangled web of financial investments she's made. she is the air to a fortune -- heir to a fortune from her own family. she has multiple business interests all over the place. there's a lot of potential for pitfalls. host: if the incoming secretary is designing her ideal school system in america from scratch, what is that betsy devos system? emmarie: she's indicated that she's interested in making sure that in that ideal system, people can choose what school that is. she hasn't given many specifics as far as what that school looks like. those are some of -- where some of the concerns about her as education secretary come from. >> the choice being a variety of

different schooling options, including what? >> charter schools that are privately run, religiously run, run by for-profit organizations, these are schools she said she wanted to, in her career as a philanthropist so far, divert federal funds to in order to make sure students can get the education they wanted. host: has she been most focused on primary education, on kids when they are younger, or college education? emmarie: it seems she's been mostly focused on younger children, which is right in line with the department of education's purview. she spent a lot of time in particular looking at families and the young students who are a part of them. in particular she's talked about low income families because she's concerned about their school choice access, and a lot of people on the other side, people have criticized her and say the problem with that is she's not looking at the fact

that if you give school vouchers to some of these families, they can't necessarily come the rest of the way to funding their tuition. host: what do you expect teacher unions will do now that she has been confirmed and will serve as education secretary? emmarie: they've told us today that they are going to keep fighting. they don't consider this the end of the road by any means. they have showed their willingness to protest, and said they will keep showing up at her public appearances, forums, and at schools. they also say they're going to try to look for candidates who are more friendly to their perspective pro-public education , candidates to run for school boards, legislatures, and they have made it clear that if she has any missteps, they will be there to remind people of it. host: what can betsy devos change or dismantle within the system without congressional approval when she takes over? emmarie: she can look at the obama administration rules put in place to the executive branch, policies part of implementing the laws that came

over from congress. at that point it's in the purview of the agency to interpret what congress meant in the laws and put them into place. she could look at those rules and decide how she's going to go forward, set her own, rolls on some back potentially. she can do a fair amount from the inside right when it comes to money, she has go to congress. host: thank you very much. emmarie: thanks for having me. charlie: brad stone is here. his readers get an inside look at two of the largest and most successful startups in silicon valley, uber and airbnb. the right healing service and global marketplace -- ride hail ing service and global marketplace. this book is called "the art of the start, how airbnb and

uber are changing the world." what is an upstart? brad: an upstart can be a new business or person who comes in and create something new. it also has a secondary meaning where there's a negative connotation, they are disrespectful of the status quo or established leader. when you talk to airbnb and uber, you can look at them both ways. they created a lot of value, a lot of opportunity for drivers or homeowners. there is the opposition who would say they have been disrespectful. charlie: those companies are disrupted by nature. -- disruptive by nature. brad: i think that's right. amazon's a great example. uber and airbnb bring the realm , as amazon did the realm of the , digital into the physical world. unlike a lot of other companies, they encountered a thicket of local regulation. it's different in every city. they had battles. entrepreneurs of the past could

be inwardly focused and geeky. these guys had to be politicians every step of the way. charlie: they had to run up against some city councils and regulations of all kinds, trying to protect their own local industries. brad: incumbent companies who made a living out of influencing local politicians and getting regulators to serve their needs instead of the customers'. charlie: and they each have competitors now. brad: that is right. you have uber, lyft, and didi in china. then you have everyone working on driverless cars. airbnb, i would put them in the amazon category. they seem to have managed to establish a global network effect. if i am listing the competitors of airbnb i'm thinking of , expedia or priceline, the big travel companies who don't quite do what airbnb does in term of the home sharing. they do some of it. hotels is airbnb's competition.

charlie: what is the sharing economy? brad: it's a misnomer. [laughter] uber drivers aren't necessarily sharing the car. a lot of airbnb hosts are professional operators. i call it the trust economy. they are bringing strangers together. we never used to talk to our taxi drivers and now you get in a car and you almost always talk to your uber driver. these two marketplaces -- charlie: they take an interest in you. brad: most people like to quiz their uber or lyft driver and see how they're doing. it is this horrible cliche it's , kind of brought people closer together. the sharing economy to me has never quite fit. i would count lyft there. i spent the last chapter talking about the rise of didi. 40 companies that were copying uber, they emerged as the winner. charlie: most of the companies are doing the same thing they are doing. brad: that's right.

the other companies who emerged from this period of activity, like snapchat or slack, they are more in the mold of the previous generation. purely digital, software focused. to me, this is uber and airbnb and smaller players. charlie: for a while, uber was not liked, for ran into a significant amount of criticism. did that come from the fact that payment neighborhoods and communities they were taking , work away from taxi companies and others? brad: it started there. charlie: then what happened? brad: there was big pushback from regulators, taxi drivers. fleet owners. we like to see from our technology entrepreneurs a little bit of modesty. travis kalanick, a true visionary, amazing operator, but also arrogant, right? a part of driver and competitor.

i got into trouble. -- a hard driver and competitor. he got into trouble. charlie: what kind of trouble? brad: i will take a competitive one. tactic called slogging. uber had a campaign to basically enlist lyft drivers, offer them incentives to defect. when these kinds of tactics -- maybe fair play -- it's a tough world out there -- when they became public, the same things uber were pursuing, people started to say, maybe that's not my kind of company. i think the negative reputation spiraled and it is something they battled with. ton as ahas matured a company. the campaign around the trump order, there are some people out there who still have a negative impression around uber and are looking for ways to punish it. charlie: tell me about silicon valley and the reaction they have rose up against immigration orders. brad: in a remarkable way.

charlie: the leaders. brad: and of the employees. there was a protest of thousands of google employees recently. one, these are blue state companies. i think that not many people in california wanted to see the outcome we had, and so there's the opposition. charlie: it seems to me there is a genuine sense that they feel, not because they are democrats, but that they feel that immigration has given them a valuable core in part of their businesses. brad: that is exactly right. charlie: computer scientists who came here and trained and were able to stay. brad: immigrants are in the dna of silicon valley, from satya nadella, i knew go to any company in silicon valley, and these are multinational corporations that draw a lot of their entrepreneurial energy

from overseas. they are protective of their employees. this is limiting the mobility of some employees, limiting the potential to hire people from overseas. it started with mark zuckerberg's post on facebook, and we saw one by one -- these companies fall into line. almost to a point. and the companies that didn't make a tough enough statement saw pressure from their employees and then came along and did better. amazon started tepidly. over a couple days they ended up adding their name to a lawsuit by the attorney general of the state of washington. jeff bezos made a much stronger statement to his employees, uber also strengthened the statement. there was a little bit of a herd mentality, but you feel it. the tech industry is passionately against the idea of restricting immigration .passionately against the idea charlie: some like to dry difference between the idea of travis or brian and bill gates, and saying that gates and

zuckerberg, they are more geeky, these guys are more sales and marketing people. brad: and they had to be. they had to be storytellers. not only were they talking to regulators in every city, but they were trying to enlist their customers in the political blocks. the only reason they were ever legal in the city of washington, d.c. is because travis personally got thousands of customers to email every member of city council and tweeted them. each city councilmember felt the ceiling was caving in on them, they were getting so much mail. they dropped some of the restrictive things they had planned. i do feel like these ceo's had to be different. we talked to bill gates in the early days. mark zuckerberg and larry page -- brilliant, but not great storytellers. jesse and travis kalanick -- they would never -- they wouldn't of gotten out of the gate. charlie: where is silicon valley now? there is much talk now.

you had facebook, the big 5. amazon, apple, google, microsoft. now you've got artificial intelligence. which seems to me -- and ritual reality. these are things that these guys are buying into for an increasing competitive advantage. brad: at one point last summer the five most valuable companies in the world by market cap are the five you just named. that is the future. these are the largest companies in the world. i think they are the tent poles of our century. maybe uber and airbnb can join those ranks. when it comes to a.i. and virtual reality, some of it may be overhyped you look at amazon's echo, the talking device people are putting in their homes. my kids love it. this is a remarkable device.

it is getting better and better. charlie: how do your kids use it? brad: they talk to it. they ask it questions. we play music. charlie: weather, everything else. brad: everything. it is the way they know. they are growing up now knowing they can speak to computers. that's totally foreign to every other generation. i feeling silicon valley goes through seven-year cycles. we are at the end of this one. airbnb, uber, and snapchat will go public soon. the next wave is coming around the corner. charlie: what might that the? a.i. but there is not one company that's all about a.i. a.i. is something these companies are about. brad: it could be these five juggernauts are so big now that they are almost disruption proof, at least for the short term. instead of new companies being minted, we will see them all strengthen their position. it's not just amazon investing in a.i. it is the five we mentioned at ibm and salesforce.

they are also so richly capitalized that they buy smaller companies as soon as they see some promise. charlie: the interesting thing about amazon, jeff had a 7-year runway to developing enterprise as a better unit of his business. he had total presumptive develop -- freedom to develop something. brad: it's getting close. retail is probably bigger. amazon almost alone, and maybe facebook and google enjoy some of this, but having that space from investors who are not demanding short-term results. charlie: wal-mart is not competitive in enterprises. brad: without a doubt. charlie: they were out there in the cloud before microsoft and almost anybody else. certainly with the scale they

have. brad: they have a big lead, and microsoft and google are hoping to catch up. i go back to that 1998 shareholder letter, the first one that jeff wrote, saying he wasn't going to focus on profits, he would focus on cash flow. he's like a batter who called his shot and has been hitting it in the same spot ever since. the investors he has are in it for the long term. they let him take these experiments. charlie: is the valley libertarian or something else? in terms of how it sees politics? brad: it's looking awfully democratic. classically, maybe we did think of it as libertarian. charlie: peter thiel gave it that coloration. brad: he is standing alone right now. there's not a lot of other valley types that have come about in the way peter has for the trump administration. to me, it looks very democratic. the valley got behind hillary clinton. if there was any division, it was between hillary and bernie sanders. charlie: peter used to say among others we should take donald , trump seriously but not literally.

some of his friends are saying, peter, you had it wrong. you should have taken him literally. brad: it seems he was literal in some of the things he promised during his campaign. charlie: the book is called "the upstarts: how the killers of silicon valley are changing the world." brad stone, thank you. brad: thanks, charlie. charlie: back in a moment. stay with us. ♪

charlie: the cofounder and ceo of the next-door is here, a private social network which allows neighbors to connect with each other about issues that affect their community. next-door is different from other social networks in that it doesn't connect members through their preferences and favorites, but proximity. over 125,000 neighborhoods across the u.s. use it to find local resources, such as babysitters, plumbers, and dentists. the service encourages neighbors to report criminal activity. i am pleased to have our guest at the table for the first time. welcome. guest: thank you for having me, charlie. charlie: where did you get this idea? guest: we use facebook to connect to friends, linkedin to manage our professional profiles. we use twitter to find people that are interesting. it is funny that while technology has done such a great

job connecting us to people that or live far away from us people we don't even know, it hasn't done a lot to connect us to the people right outside our front door. that was the inspiration for nextdoor, to use the power of technology to improve what we believe is one of the most important communities of our lives, and that's the community right around us. charlie: you believe they can reach each other better through nextdoor than facebook or twitter or any other service that might be available? guest: it's a different modality of use. facebook is for your friends. when we started the company, almost 30% of americans could not even name a single neighbor by name. much less than friends. we did not know our neighbors. we needed a different platform that would connect us with the people around us, even if we didn't know who they were. charlie: as you began to start up, what did you do? go to a neighborhood and give it a whirl? guest: we started very simply. we had a neighborhood in menlo park that we felt was interested in this concept. they were using a mailing list prior.

we went and talked to them about why they would want to communicate with each other. sharing tips on plumbers, asking for recommendations on babysitters, coming together to form a virtual neighborhood watch, and we took all the things they wanted and try to re-create a tool that would use technology, that would use the mobile phones so you could carry your neighborhood in your pocket. after listening to them, we became very convinced that even though it's not new to talk with your neighbors, there is a new way that you can facilitate that, and it's using the internet. charlie: do you rate them, whether a plumber or babysitter? guest: none of the biggest use cases is neighbors asking for the best service provider, whether a plumber or babysitter or doctor or dentist. that is a handy way to find a service provider. charlie: what's the business model? guest: like all other social networks. it is free for consumers, but there's a great opportunity to connect those neighbors to local businesses in the form of

advertising. charlie: so it's an advertising model. guest: correct. charlie: have you grown from community to community or state-by-state? guest: it's been one neighborhood at a time. that first year it took us a while to get up and running. we had about 175 neighborhood in about 20 states that were using the app. today we have over 125,000 in all 50 states, and that's over 75% of all the neighborhoods in the country. charlie: how do you define a neighborhood? guest: we don't define the neighborhoods. our neighbors do. if you come to nextdoor and enter your address, we will to you whether there's a neighborhood available to its already working, or whether you would like to start one. you want to start one, we help you dry geospatial boundary, we help you name the neighborhood. most importantly in the first 21 , days, you have to get 9 of your neighbors to join you and all verify your addresses, and

then you have a launched nextdoor neighborhood. charlie: it seems like a fundamental and basic idea someone would have thought all long time ago. local newspapers connect neighbors, in a then you have a launched nextdoor neighborhood. charlie: it seems like ahave ot. guest: the beauty of the idea is that it is fundamental. when we started the company, there were probably 50 competitors. we are exceptionally fortunate that we are the ones who have emerged as the leader. in all 125,000 neighborhoods that use nextdoor, we are the only service they use in those neighborhoods. it has taken us quite a while, but we knew that the need existed. complicated -- it wasn't a complicated or innovative need, it was a very simple one, the need for community. charlie: warren buffett was here the other day and he was talking about starting up and growing businesses and how necessary it was to create a moat around them. do you have a moat around your business? guest: the moat is we don't know our neighbor. if there's a service that gives you access to your neighbors, that's the service you continue to use. if you think about other social networks, especially facebook, it's possible to create a kind

of facebook because you carry around your facebook friends on your phone. you have an address book. in your address book you don't have the information about your you have an address book. in your address book you don't neighbors. if you lose your dog and you need to contact people, nextdoor is a place you go. once nextdoor is established in the neighborhood and there is some density, some critical mass, it's a powerful mode. charlie: the notion of the service is dedicated to reporting crime. nirav: there's a big use case for next door, which we call virtual neighborhood watch. there is this idea you can come together with your neighbors and help everyone feel safer, whether it's in a time of crime or a time of natural disaster. charlie: and how does that work? nirav: it's very simple. if you see something that is suspicious potentially, criminal or some new that should be reported to your neighbors, you can post it to people and you do so the right way, in a way that is informative to all of your neighbors. even if you're not in the neighborhood, you can keep tabs on everything going on.

charlie: have you come up against racial profiling at all? nirav: when we started the company, we had no idea the neighbors would use the service to report suspicious activities that were going on. as time went on, we became aware that many well-intentioned neighbors, by making descriptions on the website such as, a dark skinned man is breaking into a car, had unintentionally racially profiled against all dark skinned people. this is something we took exceptionally seriously. we were saddened, we were shocked, but we were convinced we had to do something about it. not only did we state this was an acceptable the platform, we overhauled the product. we saw 75% reduction in problematic racial profiling type posts. we know the work is not done. any racial profiling, anything divisive is completely antithetical to the sort of community we're hoping to create. charlie: you are in the netherlands. do you expect it in the u.k.? nirav: we lost in the u.k. 4 months ago. -- launched in the u.k. 4 months

ago. charlie: you call that the gateway to europe. nirav: that is the gateway to europe for tech companies. when you look at the brethren we we look up to, they find the u.k to be their second-largest audience and their second most valuable audience from a monetization standpoint. it's critical for us to be strong in the u.k. charlie: constantly at this program we are looking at what new platforms might be. we are at things that might be causing a lot of attention. whether it's artificial intelligence or virtual reality. what kinds of things like that might affect what you do? nirav: one of the really interesting things about nextdoor is, it's not a new idea, talking with neighbors.

all we've done is create a technology tool that makes it easy to break the ice and come together. in terms of what we think is new, it's less about technology and more this realization that if we can easily stay in touch with our neighbors, what are all the things we can do to create stronger and safer neighborhoods? can we take a world that seems increasingly divided, and can we have constructive dialogue about the issues that matter? that's what we're focused on. charlie: you are saying, can we create community? nirav: that's the mission of the company, to bring back a sense of community to the neighborhood. if you feel a sense of community in the neighborhood, maybe you can start to feel that sense of community in a broader sense. charlie: thank you for coming. thanks for joining us. see you next time. ♪

host: political uncertainty continues to drive financial markets. bonds rally, while oil shrugs off a surge. >> in the sweet spot, how china has found a policy balance to get the yuan right where they want it. >> saudi arabia sales stall after management of its debt office. >> singapore airlines said it to be near a $14 billion deal with boeing.