♪ read: -- brad: i am brad stolen in for emily chang. this is "the best of bloomberg technology," where we bring you all of our top interviews from this week in tech. coming up, we just became a real car company. those are the words of tesla's ceo elon musk after reaching his goal of building 5000 model threes in the final week of june. but questions swirl surrounding quality. plus, dell is going public, offering a cash stock deal worth billions, entering a new stage

of a multiyear turnaround plan. and more institutional investors are diving into cryptos and coinbase is taking customers. how one of the world's biggest exchanges plans to sign billions under management by the end of the year. but first to our top story. tesla engineered a late quarter production burst with the model three, but delivered fewer sedans in the second quarter than expected. however, it has thousands more of the cars in transit towards buyers. and for the first time, tesla exceeded their target of building 5000 model threes in a single week. yet on tuesday, their claims were tested that the cars were of the same quality of those made inside the plant and the stock tumbled off the doubt. with ivan finds up on

monday along with "bloomberg businessweek's" max chapman. >> the stock is down because of auto trade issues more than it is up because of tesla meeting the milestone, but it was up in the morning. and the fact they have now produced 5000 model threes is a -- very positive and very powerful. >> the big question is, is this sustainable? all nighters, tents outside the factory. 5000 cars is a great accomplishment but is this a , company that can routinely week?000 model threes a >> i believe they can. the factory has more than enough capacity. they are in a facility that once produced over 1,300,000 cars when it was a gm factory in the 1970's. so there is more than enough capacity. today, they have one of the most

advanced auto assembly lines ever made so i think they will , sustain production level and this takes tesla to the next level from a niche car producer to a mainstream auto manufacturer. >> max, you have covered tesla four years. elon musk tweeted on his 47th birthday that he had spent the night in the factory. they cannot take a break, right? there is a lot of pressure on this company. can they keep it going, is this the turnaround some tesla watchers hope it is? >> you have to hope the way that elon musk has been living where it seems like he has been up all night and sleeping in the factory. you have to hope he will take a day or two and just rest. all of these tesla employees, as he indicated in this email that bloomberg published yesterday have been basically working , nonstop to hit this milestone. i think what they are doing now is not sustainable. the hope is, as time goes on, they will be able to improve

the sort of robotic manufacturing line and that will get them up to 5000 cars. the idea would be to hit the same production number without looking and feeling like you have been punched in the face every day, which is kind of what has been happening to tesla. >> elon tweeted, or he emailed employees, we have just become a real car company. that is pretty ironic considering the market cap of tesla exceeds many traditional car companies like gm and ford. why did he write that? well, because the model three reduction level is the transformational car for the company. it takes them from a niche car producer which originally started selling 20,000 cars a year, to get to 100,000. 12 months from now, if they maintain the model three production rate, producing over 600,000 cars a year, which makes

them a real company and are able to fill strong demand. and then they roll out the production of the truck next, so they are evolving. but i think they view themselves more as a technology company, than a car company. they do sell solar panels and battery wells as well. >> if you are a tesla customer who has had an order for a while on a model does it concern three, you that, perhaps, your automobile was made in a tent outside the primary factory? do we know if tesla cut any corners on the quality of these automobiles? butnly time will tell that, overall, the quality of tesla cars is very high. the customer satisfaction level is very high. the enthusiasm for the car is very high. and really, the strength in the car is its simplicity and its power, the design, the technology. they have had very few

mechanical or technological issues, and they do fit a lot. they monitor the cars and fix a lot of the software issues by pushing down software updates from satellite. so they are always adjusting and improving the cars. twitter feed has been a joyful circus show over the past few weeks or months. i don't know, does the company have to grow up? or will we continue to be entertained by elon and has pushed back on tesla critics? >> i have to say, i think the real car company thing, he was joking. he has felt for years that they are a real car company, and that is a dig at skeptics. i think one thing that is noteworthy about this big push to hit 5000 is this is the first time i can think of where elon musk has paid attention to what wall street and what outsiders are saying. outsiders said you have to hit

this milestone and he basically said, ok, we will do whatever it takes. we are going to, as he said, fly production lines in cargo planes, build this giant tent do , everything we can. i think that is interesting. it strikes me as a concession he has made both to wall street and the outside world where he has to start acting more like a conventional publicly traded company. >> you mentioned some of the upcoming milestones. the new benchmarks that tesla will have to meet. are they going to have to go back to the capital markets and raise more money to do things like the truck? to andlutely, they need , they should. however, the meeting of this 5000 car milestone will make it a whole lot easier. if they indeed become profitable by the end of the year, or are on track to do so by the end of the third quarter, it will make it much easier to raise capital. but yes, building cars is a

very capital intensive process. and they will have to and should raise money because every time they have come to the capital markets, they have gotten well received. i think they will come at the end of the year. >> max, last question to you. we started the conversation by talking about the underwhelming market reaction to tesla making this goal. has some of the halo some of the , glow faded from elon? are the markets looking at tesla a little differently? >> no, i do not think so. i think the reason for the muted wastion was this milestone a terribly kept secret. by design, if you are reading his twitter feed, they are telegraphing this for about a week. basically, people knew they would hit it. there was just a question of how they were going to do it. and we still do not know how

exactly how they were able to hit this milestone but you have , to think this is a big moment for elon musk, for tesla, and for electric vehicles in general. 5000 cars is nothing to sniff at. >> ok, ivan and max chafkin, thanks for joining us. coming up, what is old is new again. michael dell is taking the company he built from the ground up back to the public next. , and if you like bloomberg news, check us out on the radio . you can listen to the on the radio app, bloomberg.com, and on sirius xm. this is bloomberg. ♪

♪ brad: the world's largest private tech company is going public, again. dell is promising to return to the public markets by buying their stock in a cash and swap

deal valued at $22 billion. in january of this year, michael dell preached the benefits of remaining private. michael as a privately : controlled company, your time horizon is different. and so, you reimagine your business. you think about your business in years and decades. and it allows you to reconceptualize how you are investing and what the real priorities are. brad: bloomberg technology's nico grant joins us in the studio, and in new york, bloomberg opinion columnist brooke sutherland. nico, let's start with you. this is not a traditional ipo, yet they are being desk going public. how are they doing it? nico: this is a direct listing that would be more akin to say, spotify.

the idea is that dell gets all of the benefits of going public with none of the drawbacks. you are not seeing michael dell going on a roadshow and convincing investors to invest. you are also seeing it gives him a tremendous amount of control. in the process it helps to , simplify the corporate structure because tracking verys are obviously unusual. it was meant to merit the value of a software maker that they had a controlling stake in. it gets rid of that, and they have more direct control over ware, and also helps flight the markets and get the valuation benefits, the share benefits, without traditional drawbacks. brad: brooke, you call this the path of least resistance for dell. why? brooke: because the thinking amongst vm shareholders was they wanted this to remain a publicly listed, independent entity. they did win that today at the , cost of an $11 billion special dividend that will fund the

cash component of the buyout offer for the tracking stock. they pushed very hard for that, they were vocal in wanting to remain an entity they could invest in as a standalone. as i argue in my piece, winning that is not necessarily the best outcome for all those involved. i view this as an intermediary step. it does help dell simplify their structure, but does not go far enough. as muchl have vm ware , as shareholders want to push back, it is very much a part of dell. they have a majority shareholder that calls the shots, and most stocks with that dynamic content -- tend to trade at a discount. brad: nico, we just heard michael dell singing the praises of being a private company. what has changed? nico: a couple things. if we consider the timing, it comes about five months after dell said they were considering

strategic options, and five years after this big turnaround when they decided to go private. it saw the hardware landscape was changing and it needed to try to figure out how to catch up. it felt the easiest way to do this was with the least amount of scrutiny possible. i think michael dell is feeling more confident that he has in a while. we saw in the last quarter they had double-digit gains, particularly in servers and storage. it has been a good i.t. spending environment after years of either sort of middling or declining i.t. purchases. and so, he thinks now is the time to get all of the benefits. it could even include mna benefits. benefits. he could do a share swap in the future without having to trade cash. that is a precious resource.

brad: it does seem like we have seen this before. a company.flopped as are you confident that it is different this time around? brooke: you know, i think the proof will be in the results. we have to see how they handle this. to me, this does not necessarily solve a lot of dell's problems. the reason they were looking at these transactions in the first place is because the company is burdened with a significant debt load from their 2016 purchase of emc. it has to find a way to deal with that, and a lot of the thinking was they could use of s- they would use vm ware' balance sheet to shoulder the burden. that is not happening. as nico said, this is not rule out the option of merging down the road, so this is more of a intermediary step than a long-term solution. brad: what is then the next step? a direct merger or sell more

stock to the public? brooke: potentially, but we have to get this deal for the tracking stock done. i will point out, dell is paying a premium. and you are talking about a premium in discount, and there are some big holders of that stock. elliott is one of them, carl icahn said he is a holder. is this going to be good enough for them? this is something we have to watch. brad: last question, talk about the competitive environment they face. and the big cloud providers like microsoft. as a publicl fare company considering the competition? nico: in comparison to hpe, one of the closest companies, they will probably in the short-term should they get this done, trade and with more momentum that hpe which has been challenged. part of that is because of the close integrations with the software makers. dell, we have to remember, leads

the market in so many categories when we think about hardware. andvm they are leveraging ware -- and they are leveraging vm ware as much as possible, which has a lock of credibility amongst companies that once a modern infrastructure when we thinks about i.t.. when it comes to public clouds, dell will not see their explosive growth. and should we see the i.t. spending environment cut back a little bit for the hardware vendors, dell's stock will take a beating. brad: that was a bloomberg's nico grant and brooke sutherland. coming up, e-cigarette maker jewel is seeking more than a billion dollars. we discuss how they are expanding while traditional tobacco fades. this is bloomberg. ♪

♪ brad: electronic cigarette start ofpuul is raising billions dollars. the funding would value the company at $15 billion, making them more valuable than some of silicon valley's biggest names. that is a huge jump for a company less than three years old. bloomberg technology reporter olivia zaleski who broke the news, joins us now. a lot of people probably haven't have not even heard of juul labs. olivia: they were created as a replacement to the regular, tar burning cigarette. the people who created it came out of stanford and thought they will create this product that will be better for you than smoking a traditional cigarette. it doesn't have the tar, it uses a vapor that you inhale the nicotine. they thought they were doing something great for the world.

the problem is, teenagers love juul. it has become extremely popular in schools, especially among high school students, and has become a controversial product. so there are a lot of investors who are not willing to invest in it but we are seeing a lot are , because they are raising $1.2 billion. brad: that is extraordinary, and one number that jumped out was that juul has captured 68% of the market. that is with companies like phillip morris trying to get in here. what did they do right? olivia: it is remarkable, they launched in 2015 and already have 68% of the vape market. they are also replacing traditional cigarettes. we have seen phillip morris' stock go down 28%, japan tobacco down 15%. what we are seeing is e-cigarettes are growing. they grew about 3.5 percentage points this year.

and cigarettes are going down. they went down about four percentage points a year. people are not necessarily quitting traditional cigarettes. they are replacing it with vaping. brad: the fda is looking into this. they are asking how juul markets to teenagers. the regulatory challenges and what are they telling the fda? olivia: in april, the fda doorlly knocked on juul's and said we need to know more , about this product. what are your health concerns, provide us with your research. you also need to provide us with your marketing materials. what are you talking about in meetings, are you trying to target children? that is sort of an out dacia's act. -- audacious act. course they are not , targeting children. brad: even though they had candy colored flavors. olivia: they have actually tapered that down. there is another company called

kandi pen. it is interesting they have targeted juul because there are other companies with more kid friendly flavors and colors. brad: what about the health questions they are likely to get? they can say this is a healthier than traditional cigarettes, but i can imagine still, not good for you. , olivia: some experts say it is not bad and much better than smoking a cigarette. others are saying it causes this problem called "popcorn lung." i am still trying to understand. brad: but not good. olivia: doesn't sound good. this relatively unknown at point. it is a new product, but we know it is extremely popular. and one to watch, this company is on rocket ship. brad: they are raising $1.2 billion. what are they planning to do? olivia: they are planning to expand outside of the u.s. they are sold in israel, but they want to go to asia and south america. brad: thanks to bloomberg's

olivia zaleski in san francisco. xiaomi smartphone maker raise four point $7 billion after pricing its hong kong ipo at the bottom of the range. $54pricing valued xiaomi at billion, roughly half the initial target. still, it remains the largest in nearly twoion years. emily spoke with jim suba, managing director and senior analyst at citigroup, about the ipo and how it fits into the global tech landscape. >> the smartphone industry is highly competitive. in fact, super competitive. in fact, apple has clearly said they are not only interested in market share, they want profitable market share. so some of the statistics, whether it be a phone made by xiaomi or others, a lot of these --nds that may made not see that we may not see up and down the street in america are , growing fast globally. the question is profitable

growth and that is what apple is focused on. we expect the world to be competitive with smartphones. you cannot leave your phone without it. emily: do you expect xiaomi to stand out or just be one of many? think it will draw a lot of media and investor attention to a name that not everybody knows about. in asia, their market share is strong, and in the u.s., you do not see them very frequently. this, we think, will bring attention to it. it will help it stand out. we want to note that we believe apple has always seen this on their radar screen. years ago, there were other companies that were meant to dethrone apple, and we firmly believe apple is a stock you want to buy. there will always be competition, whether we talk about xiaomi, huawei, other brands. there is a lot of competition out there bring. emily: despite the market saturating, despite apple's own

iphone sales potentially plateauing you are still , optimistic. why? >> we are. apple services are growing. when you buy a new apple phone people are doing in app , purchases on games, on purchases, as well as buying applecare. emily but it will never outpace : hardware revenue. >> you car -- you are correct in terms of total. but in terms of units, we think they will grow single units. the surprise will be on the trailing model, the iphone 7. in india and in china, not so much the iphone x that you and i have in the u.s. brad: that was emily chang speaking with jim suba of citigroup. coming up, back to tesla's newly released production figures. why hitting this much lauded gallstone -- milestone could be a double-edged sword.

and bloomberg technology is livestreaming on twitter. check us out at technology and be sure to follow our breaking news network at tictoc on twitter. this is bloomberg. ♪

brad: this is "the best of bloomberg technology." i am brad stone. back to tesla. elon musk hit his long-delayed target goal of producing 5000 model three sedans in a week. he went to great length to hit his mark, including a giant tent housing an assembly-line. now, the ceo has the challenge of winning over doubters who say this is not sustainable and needs to address the accusation made tuesday that the model three cars made on a tent covered production line when not is the of the same quality as those made at the plant.

we caught up with bloomberg opinions liam denning. >> the company hits their 5000 a week target like they said they would. and i think a lot of a bulls will take comfort from that, but i think it misses the bigger picture, which is, you know, to be a profitable carmaker, which tesla have yet to prove they can be, they need to have sustained, high-volume, high-quality production. and hitting that target in one week at the end of the quarter, kind of in a repeat of what they did first quarter, it does not prove that. it hits a moment in time, one target, but is not prove they are sustainable. brad: you noted in your column that the burst week at the end of the quarter seems to set a baseline for tesla's weekly

production. are you confident they can do that now? >> it is tough to say. what i observed, just going on the last three quarters, what they have done is hit these burst weeks at the end of the quarter, and that sets the average for the next quarter. based on that, you might think they can keep going at 5000 a week. in fact, in today's release, they talk about getting to 6000. the issue is can they do it profitably? when you think about the tent you highlighted, this second assembly-line they put up, it looks like they made about 1000 cars on that last week, give or take. and if they are working 24/7, which they seem to be doing, that equates one car every 10 minutes. and that is nowhere near what you need to be getting for a profitable mass-market carmaker. brad: tesla was so focused on this 5000 cars per week goal, it really came to define what observers were looking for. what is the next milestone people will be looking for to

grade elon's performance at tesla? >> two things will be interesting. one is the results that come out in a month. we will see what the cost of the burst has been in terms of profitability. obviously, the other big one coming up is the company insists they will get profitability and some form of positive cash flow, it is not clear what. that is key to this company. it needs to show it can actually turn a profit, produce a mass-market car, and, you know, become self funding. becoming self funding is key. brad: profitability and self funding. liam denning, thanks for joining us. >> thank you. brad: coming up, one of the world's largest crypto exchanges is going live. details on coinbase's new customers next.

this is bloomberg. ♪

brad: just last week, coinbase custody accepted its first deposit and is now open for business. the cryptocurrency exchange says 10 hedge funds and family offices have begun using the custody service. the goal is to safeguard digital tokens in a manner similar to traditional securities. coinbase aims to have 100 large institutional customers by the end of the year with as much as $5 billion under management. joining us now with more detail is adam white from coinbase. also with us in new york is bloomberg's executive editor

joe weisanthall. not everyone is familiar, it's a -- talk about what you guys have made. adam: in the simplest terms, it is a way for institutions to store their crytpocurrency in a safe and compliant manner. when people look at the space, there has been a history of security incidents, and we have made security our number one goal. as we move into the institutionalization of the space, hedge funds and brokerages say they cannot trade crypto until we have a safe way to store it. we announced at the end of last year we would begin building, and we launched today and are already serving 10 hedge funds. brad: crypto prices have had a rough ride this year, characterized by vulnerability for a number of years. have investors stayed out because of the absence of the

service, and will this rectify the rough waters that bitcoin and other assets are in? adam: it is the opposite. with this recovery, we saw the price of bitcoin touch $20,000, the market cap of all digital currencies reach $800 billion. that has recovered, and we found institutions are more eager than ever. what was once thought is maybe this is a trade we missed. they have an opportunity to get in and are watching them do it thoughtfully through services like coinbase. brad: joe, do you agree with that? if you are a big institution, have you lost your appetite for cryptocurrencies considering the depreciation in value? joe: i find adam's answer to be interesting. there is no doubt that the second half of 2017, particularly the last few months, there was so much interest in that institutional money.

this wall of money that was supposed to come in. and it does seem like platforms like coinbase is what everyone said is missing. that as soon as there is custody, legal clarity, money would come in. and i have been fascinated to see a building of the institutional infrastructure, not only coinbase and others, totally coinciding with this relentless selling. almost no news whatsoever has boosted the price of any cryptocurrencies for any length of time. so really, the exact opposite of the second half of 2017, where it is clear the infrastructure is being built out and the capacity has expanded but it has not boosted the prices. brad: adam, is demand from institutions the same as it was when you announced that last year? adam: absolutely, it is greater than ever. institutions do not move fast.

they are thoughtful and deliberate. we spent a lot of time with our institutional coverage group in new york meeting with institutions day in day out. educating them on who we are, the processes we use. they really dig into things like cold storage. how do i make sure my funds are safely stored? and we bring in things like a faraday cage to make sure the numbers we use to decipher these keys was military grade, best in class. these are the questions we spent a lot of time on. brad: what competition do you have from traditional custodians? adam: we tend to not focus on competition, more on our customers. certainly, there is an opportunity for coinbase to work with others. when you look at institutions, they do not want just one custodian, they want to store across a few best in class custodians. so we are in conversations with others in the space.

just like we are with regulators. brad: joe, pretend adam is not here and tell me what you think of their competitive situation amongst the traditional custodians. joe: well, i think it is fascinating the way you seem to have two different clusters of companies reaching towards the center. obviously, you have upstarts like coinbase and like others who, all the time, seemed to be making inroads to resemble more legacy banking institutions. so you also have entities like circle, square. on the other hand, you have these legacy organizations are which for a long time were skeptical about the space. it does feel like a bigger battle is coming and it is unclear which side will win. something i am curious about is there is a debate about how this

space will evolve. whether it will be bitcoin centric or whether there is room for lots of different coins and protocols. i am curious whether the institutions that are signing up early on for the new coinbase service, how interested they are in holding a multitude of different coins. adam: great question, and it is spot on. what we are hearing is they want us to expand to more countries and add more assets. right now, we are supporting for you -- 4 assets. with plans to add more. as your colleague at bloomberg announced today with the introduction of this, we are starting with four assets but with plans to expand to asia, we will offer many new assets. brad: i will give you the last question. the price of bitcoin has been on a steady decline all year. is this the kind of thing that is needed for a restoration of trust in crypto?

adam: you know this better than anyone, markets are not always rational. to work in this space, you have to have a 20-30 year vision. our ceo said we have been in this space many years, we have seen the market reacts, and every time, he gives us an opportunity to stay focused on the mission. and to continue to invest the resources to bring this mainstream. for us, we tend to look at other metrics, like the number of developers, new teams launching, the number of daily transactions. all of those numbers continue to move up and to the right, so we are optimistic. one brad: that was adam white, vice president and general manager of coinbase institutional and bloomberg's joe weisenthal. coming up, ai versus civil in liberties.

is this technology infringing on your rights? we asked the aclu. this is bloomberg. ♪

you brad: we are continuing our and you look in the biases of artificial intelligence and the pitfalls that can come from this new forefront. facial recognition is not only gaining notoriety for misidentifying based on gender and race, it is also being used as a tool by law enforcement to track people. maryland authorities recently said they used facial recognition software to identify the gunman who killed five people at an annapolis newspaper. but there is also a growing voice speaking out against its

use as a surveillance. the aclu calls amazon's recognition software, that it claims can find 100 people from a single photo, powerful and dangerous. that software was being used by the orlando police department until the aclu revealed its use. they have since stopped using the software. our next guest covered the software. he is a technology and civil liberties attorney for the aclu and spoke with emily chang. >> people should be able to walk down the street without being watched by the government. face surveillance technology allows the government to watch us. and again and again, when we see governments deploying this technology, they are doing it without rules. emily: what about the argument

this could be a powerful rule for catching criminals or terrorists? matt: there are a lot of unanswered questions about whether this works reliably. studies have shown this is biased against people of color and women, and just this week, a prominent ceo of a facial recognition company said the government should not be using it, it is not ready. so right now, it is important that there be an informed debate about this technology before we rush forward with something that can be turned against immigrant communities, protesters, and activist. emily: let's say, hypothetically, if they can work out these issues, is this something that could be a valuable tool for law enforcement, or is it still dangerous? matt: that is not a question we should answer. what we are hearing from communities across the country, 150,000 people asking them to drop this tool, is that this technology is rushing forward

without public debate, without rules to protect of use, in a political climate where protesters are being villainized, immigrants targeted, and that is not the time to roll out a dangerous and untested technology. emily: is it possible for the government to use this in a way, at all, that is safe? matt: we have seen with surveillance technology, when it is rushed out with public -- without public debate, and initial uses to quote-unquote solve crime quickly slides into uses that are targeted at muslim americans, immigrants, and people of color. it is important that there is an informed public debate about how this could be used and abused in communities. emily: that said, take a listen. we had a guest earlier talking about the government's potential role in ai. >> we need a public-private partnership in how we use ai. it is in the early days, but

having said that, issues like transparency and explainability of these algorithms, we need to be a lot clearer about how these companies are using them. are they respecting the core values of society? emily: our guest from general catalyst. what are the values we should be talking about? how can we find some resolution on this debate that, in your view, would not violate civil liberties? matt: right now, we are seeing that technology companies and secret algorithms and secret conversations of these tools are driving how they are used. we have no idea how these systems look when we open the hood. i think they were exactly right, we need to have a conversation about the values of transparency, equality, and anti-bias. these are being built by tech companies who may not know what it means to equip officers with dangerous technology that can make split-second decisions

about public safety. before we hand our officers technology that can harm public safety, we should have a conversation about what is happening under the hood. emily: the problem is there are still no standards for law enforcement in place. this is happening in real time. that said, this is the future. this is where technology is going. apple uses this technology to unlock iphones. how do we avoid this? it is happening. matt: right now is the time to have a debate about the limits on this technology. communities deserve answers before potentially dangerous tools are rolled out on the street and secret algorithms are relying on. now is the time to have a debate, elected representatives should have a debate, and people

should join the 150,000 consumers who asked amazon to take this seriously. emily: california governor jerry brown signed a sweeping the data privacy law which allows consumers to opt out of the sale of their personal information. they can have the data deleted and have a right to know what is being collected. big tech is not happy, but i assume you think this is a step in the right direction. matt: we think it is the first step, but this bill does not go far enough. in the wake of the scandal, it is essential consumers have a robust set of laws that protect them and help them stop teacher -- future abuses and help them address the abuse. we do not think it goes far enough to protect those rampant abuses of information, and not far enough to provide consumers with the right tools to address those harms. that is shared across the injury -- industry. brad: that was emily chang

speaking with a representative of the aclu. the king of the smart speaker market is the amazon echo. according to emarketer, 47 million americans would use one once a month, putting amazon's market share at 67%. but that is expected to drop to 61% by 2020, but still almost double its biggest rival, google. and more and more of that user base is using smart speakers as a teaching tool. that is something our next guest is making happen. ian formerly worked at amazon where he led the teams that worked on kindle, echo, and alexa. he is now working at bamboo learning, teaching kids all about music using amazons alexa. ian: bamboo learning is a brand-new startup i cofounded. it is set up to create applications that are fun and

interactive to teach kids as young as six all the way through teenagers, and adults, different things they might like to learn casually in five minutes or less. brad: music theory and learning music, as i recall from my brief attempts as a kid, is very visual, right? you are reading music, hunting for the keys on a keyboard. so why is a voice activated speaker the right forum for learning music? ian: that is a great question. a few things. one, it is supplemental to taking music lessons. and one of the interesting things my cofounder learned is music teachers often will not teach younger children how to

play an instrument until they can read. and she and i both believe that children as young as six should be able to learn about music. so we have some examples, actually, of a six-year-old learning with bamboo music. and deciding after interacting with bamboo music and doing the questions we have that she would like to take a lesson. she is now learning the ukulele, and she is not yet a strong reader, but she is already learning how to play music based on starting on bamboo music. brad: bamboo music now joins thousands, or tens of thousands, of other alexa skills. for those folks who are not part of the audience a bloomberg technology, how do they find it? i am asking this as a former amazon executive. how does amazon solve the

discoverability problem with the echo, considering this explosion of new apps available for the device? ian: great question. we at bamboo learning have to do our own job at getting the word out about bamboo music. that is part of it. but amazon has created this new feature so that when you talk to your echo and would like to try out, for example, bamboo music. all you have to do is say to alexa "enable bamboo music." and it will start. we have to do our job, and amazon is increasingly finding ways to make the skills more available to customers. you can also just go to the amazon store and search bamboo music and find it that way. brad: we do not have a lot of time left, but i want to ask you about your personal journey. you went from being an inventor of the echo to a developer. why leave amazon to do this?

ian: great question. i had an incredible time at amazon, worked there for over 12 years. and i learned quite a bit across the board from business to technology, etc.. i just felt it was time to try something new. i want to get back to doing coding, which i haven't done in decades. and it just started as a fun project. and with my cofounder, who is an absolute expert in k-12 education and music, we thought it would be fun to educate through the bamboo music skill. brad: that was bamboo learning ceo and cofounder ian freed. that does it for this edition of "best of bloomberg technology." we will bring you the latest in tech. coming up, we have full coverage

of xiaomi's public listing. this is bloomberg. ♪

you are taylor: coming up on "bloomberg best," the stories the that shaped the week around the world. mexico swings left in a historic presidential election. >> this time, we do have a deal. in china's central bank steps up to stabilize a deteriorating yuan. >> fed officials in general say the economy is operating in top gear. >> the fed will hike at least once more. because wage growth is still sluggish. >> a return to public markets. they pull out all the sports to