♪ >> this is "bloomberg technology." we are showcasing the diversity and power of the tech economy. coming up, we find out how the start of help over 1000 businesses get off the ground. plus, one of the most procedures universities in the world weighs in on the benefits of online curriculum.

plus, how blockchain could be the future of fintech. u.s. startups received a record of $46 million in venture capital last year. here at mass challenge, many of the areas find their footing and funding. ♪ >> off-road wheelchairs is one problem mass challenge is trying to solve. >> it was founded here in boston in 2008. >> she is managing director that offers grants. >> we bring you all the resources in terms of space, education and at on a challenge

based model where we raise $1.59 to give to some of the top startups and created 18,000 jobs. >> it strengthens the ecosystem and the fact we are connected and bill thousands of connections so we are that network connection for getting them the right resources they need. >> these companies just partnered with mass challenge. >> pepsi is a great way to optimize what they're working on and how they are actually deploying their advertising which saves money and time.

>> mass challenge is also growing beyond boston with programs in rhode island some of texas, switzerland, and jerusalem. the accelerator is also adding to boston's innovation theme, which ranks as the country's best city for entrepreneurial growth. >> when you bring innovation and entrepreneurship, other things come. >> for now, we are joined by the mass challenge ceo. boston, what are you finding in terms of accelerators in the

city? >> in boston, we are good at hard check. we have outstanding universities and those universities invest a lot in laboratories and hard-faced science technology. we see a lot of health care, the really anything that has to do with science. >> dimension rhode island, but also israel, rhode island, london. >> we want to see an ecosystem that is strong and an eagerness to work with us. we need to find sponsors. we are a nonprofit program that lives on foundation money, so we look for eager partners that are willing to partner with us.

>> talk to me about why you are nonprofit. >> the main reason is philosophical purity every startup begins with the problem. they are solving a major problem for humanity. it could be curing a disease or helping children were bringing clean water or improving the way we buy shoes. they are looking at a major problem and trying to fix it. as a byproduct, they've produced wealth, growth and optimism. they produce jobs in great numbers, so that is good for humanity. we don't want to take anything from them. >> does it make getting them funding slightly easier? >> this is a great example of doing good helps you do well.

if you have what we believe is a multibillion dollar startup? >> we are in an era when many are focusing on the ethics. how are you starting to have this conversation with the startups coming in? >> at the very beginning we have all of the conversations with the start of spirit you have to get them to create as much value as possible. focus on solving a really big problem. if you solve a major issue, people pay you money for. >> june is the next cohort.

>> we receive applications from at least 40 countries and over 5000 globally. anyone can enter anywhere in the world heard we are helping early-stage startups. we are looking for is startups that have significant potential to make a positive impact on society. >> how are the conversations you are having changing? >> we continue to see people that are really idealistic and want to change the world in a positive way. we graduated 1500 startups and they have raised over $3 billion. if you talk to the startups, you

will find that all of them are focused on solving a problem. >> so the conversations haven't changed? >> i haven't found that to be the case. i think today we are seeing more of the ultra stick mentality of people trying to get a job and survive. >> how do you ensure -- they are being supported by your lifeline. how do you ensure they make the problem there something is really there? >> we want to provide support for startups, but not so much support that you problem or

subsidize a startup that should die overtime. our goal is to take 12 months of activity for four months. we're giving them access to mentorship, training, network events, so they are not sitting pretty here. they are being very active getting a lot of work done in four months. after that, market forces will take over and they will be required to get help like anyone else. >> thank you for being here. coming up, feeling supersonic? a new, faster way to fly.

this is bloomberg. ♪

>> welcome back to "bloomberg technology." the supersonic passenger jet that would get you to new york from london and around 3.5 hours, it has been 15 years since it last took flight. now there is a new race minus the sonic boom. one of the companies working is boston-based spike aerospace. joining me now, the ceo.

it blows my mind that it still takes a seven hours to get from london to new york. back in 2010, it used to take me half that time. what happened? everybody wonders why we are not flying faster than the concorde. >> aviation is incredibly difficult technology. you are flying people in the air and you have to fly them safely and efficiently. you can't make the sonic boom that the concorde made. >> is that the main technological challenge you are trying to overcome?

>> you can fly fast, but they are running a lot of fuel. you have to be able to fly at a reasonable cost and without disturbing people on the ground. it is a loud sound which is critical. >> the aircraft you are working on, how much is it going to cost? >> unlike iphones and cars, you don't buy a 747. you buy a ticket, so what is more important is how much it will cost as a bus ticket. two major airlines are working on buying it. >> you don't have a price point? >> $125 million.

>> where is the main demand for the slightly more expensive form of travel? >> 2017, 4 billion people got on the plane. in 10 years, it will be 6 billion people. in the next three months, i have 10 trips coming up. >> the wealthiest in the world, where they based? >> the people we are targeting, the people that are going to -- business executives and managers, senior executives. they are not necessarily the 1%.

a good friend of mine building a manufacturing plant, a mid-level guy, he flies a lot. >> lockheed martin has been looking at this form of travel. have you ensure that you will be the first one there? >> there's a lot of companies approaching it a different ways. what they are doing is doing a test aircraft. it is a single pilot, no passengers. it is strictly a test aircraft. eventually, they would have to

have a commercial aircraft. we have our design one that will fly by the end of 2023. >> what is going to push the timing back? is the perfectionism or technological challenges? >> there is an incredible amount of innovation going on. there's a lot of resources and partnerships. you have goals and targets you want to meet, but there are a lot of pieces that have to come together. all of that takes time to develop and mature. this is a new aircraft, so it takes time. it is tremendously exciting and it is happening. >> thank you very much. wonderful to have your time. ceo of spike aerospace. coming up, we will hear about bringing the cost down for

higher education. this is bloomberg. ♪

>> welcome back to a special edition of bloomberg technology from boston. we recently spoke to emily chang about how technology can help bring down the cost of higher education. >> this is such an important question and one we have all struggled with because we compete based on the experience we can offer students, the resources we can offer faculty for their research and teaching. we don't compete on cost and so the way higher education is organized financially, there is

not that sense of pressure to bring down costs. we have brought down price by running significantly so that any student who comes from a family that makes less than $65,000 of your has to have no parental family contribution so that it is very accessible in terms of what it cost the students, but in terms of the cost of what we do, that is something we need to get under control and addressed more fully. technology is going to help with that. what can we do online to supplement or replace certain parts of instruction so we can lead to people the parts that we actually need people for? i think we will see some of that coming forward, but constraining costs is going to be a real challenge.

>> there are a lot of countries trying to disrupt and some say a harvard degree won't matter by the time my kids go to college. how do you respond to that? how does harvard stay the gold standard? >> we have to attract the best talent. the experience of living in that community with other students from who you learn probably as much as any class you take, that is the core of what a harvard education is. that is not going to be disrupted by a simply online experience.

you can learn a lot from an online experience, but what you are learning is the subject matter of the online experience. that is such an important part of what happens both in and outside our classrooms. >> there's a sense that stanford has surpassed harvard, especially when it comes to technology. is that a fair assessment? >> of course not. we are different institutions and i think that is the great strength of american higher education. there are different institutions and opportunities. i don't want to have a stanford

-harvard competition here. we have a growing presence in technology and field of engineering. our students concentrating in engineering have tripled in the last 10 years. we also have such deep-seated strength in life sciences and the humanities and the arts and such a commitment and social sciences. the endeavors that are not simply involved in technology and we compete very successfully with stanford for students and faculty, so we are pleased to be harvard and expect to remain harvard. >> orders harvard doing differently to train the worker for tomorrow -- what is harvard doing differently to train the worker for tomorrow? do you think harvard needs to do

anything differently? >> there have been changes in how we approach education that respond in part to what you're saying. we find students much more eager . our students are also interested in making in the arts the creativity and innovation that are part of making things as you learn. we also see students much more involved in wanting to solve problems and have an effect on the world. doing and thinking are intertwined much more.

a used to be that you thought in college and when you left -- now those things intersect with one another and that is to be an important part of letting students take on the challenges they are so eager to learn. >> that was the harvard president speaking to emily chang. coming up, one firm is harnessing the power of blockchain. we look at how circle is going all in on cryptocurrencies. this is bloomberg. ♪ mom, dad, can we talk?

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♪ caroline: welcome back to "bloomberg technology." i'm caroline hyde. circle, you may know, is known for mobile payment solutions and is based in boston, but now thanks to a $100 million funding round, circle finds itself more and more enmeshed in the world of cryptocurrencies. it's the largest vc ever for a crypto making company, and it's making circle worth some $3 million. more and more, it is working to

harness the power of the blockchain. joining me now, the cofounder and president of circle. welcome. mr. neville: delighted to be here. caroline: $110 million. talk to us about what the vision of circle will be. it seems like the very infrastructure of blockchain within crypto. mr. neville: we're excited about reimagining what global finance can be if there is such a thing as an internet for finance. in the same way we are connected to one another directly over the internet of content, we're looking for capital formation, fundraising, payments, and selling globally if we can be connected in such a way for finance. caroline: the payment solution you already have, there's a way to invest, trade crypto and some of the products you already have, but what has everyone talking is the so-called stable crypto, a token for cryptocurrency but underpinned by the u.s. dollar. why is this so important? mr. neville: one of the things interesting to us is how we use the blockchain infrastructure to

underpin money and how we leverage those things with the dollar, the euro, the sterling. at the same time, there's a problem with using existing crypto assets. they are very volatile. it makes sense to have something like the u.s. dollar represented as a token that can be exchanged anywhere in the world. caroline: one of the desires is the speed of transactions. you are all using the ethereum blockchain. when will we really strike that sort of efficiency by putting the dollar on a blockchain? mr. neville: we're also working on other solutions. there are some fundamental issues we are trying to address. one is stability. the other is how we make things faster and how we scale.

and then the other is governance, how we do this in a way that can further a standard with multiple members, not just one new member of the network, but multiple members that participate together in an ecosystem. caroline: talk about the stability and governance. there is another key stable coin, meant to be underlined with the u.s. dollar pegged to it, but there has not been much clarity that for each token out there, there is a dollar. how will you prove you have the stability? mr. neville: it is imperative that the entity that governs the network, that verifies that there are in fact funds sitting behind these tokens, governs membership and makes sure all entities are behaving is separate from the entities issuing these tokens. there will be a separate network

-- not circle specifically, but a separate network multiple participants can participate in, and that will provide protections for everyone who uses it. caroline: this is called center. mr. neville: yes. caroline: the bitcoin mining company will be part of it. who else will be part of it? mr. neville: banks are very interested in this. bitmain is the one we are talking to most recently. it is a very interesting company. they are one of the core interest providers of bitcoin, but specifically one of the blockchain providers at large, so they are a key participant. caroline: we have recently seen many upset members -- we've had federal reserve members coming forward saying i don't understand why we would need a central bank issued crypto. how are they reacting to the fact you want to put the u.s. dollar onto additional tokens?

mr. neville: there are banks interested in helping this to happen here to perspective is this is an improvement for the infrastructure, the rails the ferry dollars into the sterling and europe around the world. there is also the opportunity to do much more and that these tokens can pay into things like smart contracts which are software code enforced by a distributive computer that spans the world. i think tags as well as technology companies are particularly fascinated by this idea. this is the future of the internet of money. caroline: how are you having conversations with regulators, and are they going the right direction? mr. neville: they are. when we look at existing licensure, there is a little bit of a square peg/round whole issue, and regulators are, to their credit, coming up with these and addressing it in ways we hope ultimately will lead to innovation globally, even though

right now, much of the regulation is driven by what the united states is doing. caroline: you talk about the dollar, the euro, the pound, perhaps not asian currencies because there's a lot of competitiveness already. what is your vision in terms of what circle will provide? will it be digital tokens can live alongside currency, and you can perform transactions face-to-face and computer to computer? mr. neville: there should be other issuers and also other kinds of tokens that represent different kinds of value, physical goods, real estate, baskets of goods. everything of value we believe ultimately will be tokenized, and when you pay into or out of

those smart contracts, you want those to be stable coins. caroline: the irony to me is it seems the utopia for many of those that want to see the decentralization is you ultimately have to have centralization to get there. many do not want to see currency issued by banks at all, but you are looking at tokenizing the currency issued by banks. do you see a different type of utopia? mr. neville: there is room for centralization of super nodes on a network, just as there is much room for decentralization, and those can interact with one another directly, just as you and i can send each other a photo directly, but we also might use instagram. it is a rough analogy, not perfect, but it will regardless be more evenly distributed and

inclusive than the global financial system we have today. caroline: you have just come back from manhattan. you said you had a good week. from what i can see, the event happening in manhattan was quite crazy, a huge gathering of all those in cryptocurrency in manhattan going from conference to conference, party to party. what was going on? it felt like there was a lot of champagne being sprayed and snoop dogg rapping, but is there style as well as substance? mr. neville: i think there is a lot of substance under the glitter. when we started, it was a dozen people at a meet up, and those conferences have grown to include institutional investors

and very serious players and regulatory, banking, tech, or startups. caroline: wonderful having you here showing us some of the substance. thank you very much indeed for joining us right here in boston. speaking of payment apps, paypal is making a $2.2 billion purchase, the biggest ever for paypal as it competes with the likes of square. the small business started off with a mobile phone gadget for accepting credit card payments and is now expanding into software to support businesses. izettle expects gross revenue of $2.2 billion in 2018. coming up, could more multimillion dollar fines be on the way for google? that's next. ♪

caroline: welcome back to "bloomberg technology." shares of alphabet fell by as much as 1.5% friday after news that "60 minutes" will air a segment with google critics accusing the company of stifling competition. emily: here now with mark bergen, who covers alphabet for bloomberg technology. we watched shares fall on the news of the "60 minutes" report is going to go hard at google for potential antitrust violations. what is new? mark: what is new will probably be the audience. a more mainstream consumer audience, older audience. i imagine this will be targeted to presenting what is now a years-long case the eu has been building, reminding regular consumers that google has this massive market share in search

and is also kind of taking over more and more of our lives. emily: as you say, this has been going on for years. google has already been fined around the google shopping services. there are two more investigations going on with android and ads. what is the status of those investigations? mark: there's talk about potentially bringing additional cases around something like local search and the way google uses its position in search to point users to things like restaurants and mapping software. i think the bigger concern for google will be how much of this regulatory pressure comes over here to the u.s. we've seen democrats and republicans scrutinizing google.

there has been no clear case the ftc is going to bring charges, but we have a republican running for senator in missouri who has brought similar antitrust cases against google. emily: there has been talk about this for some time now. let's listen to something set about google more broadly last year. >> it has denied other companies the chance to compete on the merits and to innovate, and, most importantly, it has denied european consumers the benefits of competition and innovation. emily: google obviously has huge market share outside the united states. it is a virtual monopoly. how could this actually impact google's business? are we looking at another fine or are we looking at google

potentially having to scale back and change fundamentally the way it runs its business? mark: the happenings in europe did not seem to have much of an effect. it has been a very lucrative business for google, the shopping has. i think a bigger concern for google is going to be amazon and the response from the eu, that when consumers turn to online commerce, they turn to places like amazon and ebay. google is thinking a lot about the future of voice search and its potential where a lot of consumers stop typing things into the web or mobile browser. that is a greater concern for their business. emily: let's talk about the future of voice search. you have another story out today about duplex. we have heard the google assistant on the show a couple of times this week speaking to a restaurant, sounding very much -- almost too much -- like a human, which caused a big uproar

and google has come out saying they are going to identify when you are speaking with a robot essentially versus when you are speaking with a human. what did you find out today? mark: they had their weekly all hands meeting with staff yesterday. they showed the demo, and they said in states, likely states that require two-party consent for recording, they will say, "i'm the google assistant. i'm recording this call." will that turn people off? will restaurant who receives the call slammed the phone down? i think google wants to show their ai strength for consumers.

we mentioned talking about antitrust. they talked about the collection of data and ai's potential antitrust issue. emily: there is a chance that zuckerberg could be called along with other tech ceos to testify as part of the discussion on what regulators and others should be doing to protect our privacy. mark: senators have said it would be nice to get the ceo's in, but they have not ordered them in. so far, that is where we are. emily: thank you so much. caroline, i will send it back to you in boston. caroline: thank you very much coming up, we will hear from boston mayor marty walsh and where the city stands on autonomous driving. that's next. this is bloomberg. ♪

caroline: welcome back to "bloomberg technology" in boston. this week, we've been talking to leaders in tech, education, and politics in the region. our bureau chief caught up with boston mayor marty walsh and discussed amazon's hq2 search after the city announced it is expanding its boston home. mayor walsh: i don't think it has any impact at all on it. i think this is a separate piece amazon did. they've been negotiating for several months with the developer and with us in the city. a lot of people saying it must be a good time for hq2. i don't beget has any impact at all. i think they are two different projects. tom: do you have any insight at all on who's going to get headquarters? mayor walsh: we are in the mix. that's all i will say. tom: what are you looking for from amazon?

ge, for instance, made a big generous donation for public schools. what would be amazon's ante up, so to speak? mayor walsh: providing jobs across the board is important. different income levels, that's key. amazon is a very generous company. they are very philanthropic, very involved in different communities. they are in seattle, they are in boston in a big way. they have been putting up matches in different organizations, so i know they are philanthropic. i would love to see some of their executives get incorporated on boards and commissions around the city if they move here. not ours, the city of boston's, but all the nonprofits. ge made a great investment of $50 million with a first came here, but more importantly, i think, in some ways, having the power of ge, the executives, is important. tom: be embedded in the community? mayor walsh: yes, and we think they would be.

having a company like amazon come to boston is exciting. tom: what does boston do to get to where it needs to be should amazon put their second headquarters here? mayor walsh: we are working on it. it is not just roads and bridges. it's education and schools because people want to live here. it is housing. we launched an initiative to create 3000 low-income units by 2030. it is about housing. that is the infrastructure we have to look at. one of the things i heard about amazon, when they went to seattle in the beginning, the housing product was not there. we are doing that in boston. our goal is to create more housing opportunities for

boston, and i am partnering with our cities and towns adjacent to boston. that is important to any growth. companies are going to look to an area like boston and ask about the housing stock in the city and surrounding communities. that is important. tom: if this is a tech revolution boston is in right now, is there some chance it could backfire? could you have too much traffic or not enough housing? i know you have answered that question, but what are your concerns about the great growth the city is undergoing right now? mayor walsh: my constituents might not like the fact that -- i know it can be a burden to move around the city of boston, but it is about growth. boston is in competition with other cities in america and the world. the more we can attract startups and investment companies and diversify our business portfolio, it is something i think is really important.

we have to figure out traffic. traffic is not just a boston problem. traffic is a new york problem, and l.a. problem, a san francisco problem, and austin, texas problem. we should be able to count on government to be able to help us with infrastructure improvement when it comes to transportation. that has not been the case across the board. across the country, we need an infusion of investment made by the federal government. tom: let's talk about self driving cars. boston may be one of the capitals of self driving cars. there was some trouble in march. there were a couple of the taliban is. you put a hold on testing. that lasted a couple of days as i remember. mayor walsh: it was for a five days over a weekend, just to see what would happen with the tragic accident that happened and we want to make sure we put some safety precautions in place, making sure what is happening in boston -- you can

never prevent something tragic from happening, but making sure it is less likely to happen. tom: what are some of the things you have done? you put in new safety measures? mayor walsh: making sure the safety plan they have and where they are driving around, if they go into areas with a little more density, making sure the safety precautions are there. those are some of the things we are doing. they are still for the most part on the south boston waterfront, doing their testing there. i was talking about boston as an incubator, and self driving cars is an important incubator for us. we are doing other important things. some are working, some will not work, but if you don't try them, you will never know. when it was first brought to me, dan was telling me that in 30 years, no one is going to be driving a car. i said if i'm still around, i will still be driving my car. i'm starting to think i won't.

tom: that leads me to my next question -- would you get into a self driving car? mayor walsh: i would. tom: i'm not sure i would. mayor walsh: at some point, you may be forced to. caroline: the last five days, we have gone inside museums, tech innovation hubs, and one of the most famous venues in sports, fenway park. i know my son was soaking up all that new england has to offer. we thank you for that, boston. that is all for now. from boston, this is bloomberg. ♪

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