emily: i'm emily chang and this is "best of bloomberg technology." coming up in the next hour, apple reports earnings that beat expectations with an upbeat forecast for the current quarter. we will bring you the highlights. plus, five important words. tesla says it will be sustainably profitable and cash flow positive by the end of the year. and sets yet a higher target for the model three, aiming to make 6000 cars a week by the end of the month. still, the company managed to burn through $740 million last quarter.

we will discuss. an investor is buying facebook as investors flee. he tells us why he is a big believer in mark zuckerberg, ahead. just last week, it looked like the tech sector was in for a massacre. this earnings quarter thanks to a disastrous showing by facebook. then came apple. the giant surged following its earnings report as much as 9% and thursday, it happened. $1 trillion. apple became the first u.s. publicly traded company to cross the milestone. how did it get there? mark gurman has the answer. mark: after months of waiting, it is finally happening. apple has become the first u.s. publicly traded company to hit a $1 trillion valuation, leaving the likes of amazon, alphabet, and microsoft in its wake, but not far behind. >> 2, 1 [cheering] mark: apple's milestone is significant and a testament to

rapid growth spurred by products

you have covered this company for years. what does this actually mean? gene: i think this means that apple has become really the fabric of our lives. it is testimony to that that this is something we do not even think about we rely on apple's devices. i think that is one piece, and i think it also means the company is so big right now it has an unfair advantage over a lot of other companies, just given the market cap, the stock it has. if they ever did want to acquire companies, they have more leverage on that. i think it is a wonderful reminder to be will to stick to doing one or two things exceptionally well. in apple's case, it has been one thing exceptionally well. tim cook got a lot of heat over the years for not going on in the phone, coming out with a

cheaper phone in the mass-market, and he got distracted or criticism for not doing m&a, but he stuck to what he believed in and that was a third piece i take away from hitting this milestone. emily: i do have this chart in my library showing apple at the top, but trailed by amazon, alphabet, microsoft in a pack rising behind apple. mark, you also make the point in your story that tim cook has had a lot of successes, even though he has caught a lot of flack for not being steve jobs. mark: this is no accident. if you remember that tim cook took over as ceo back in the fall of 2011, there was so much talk of, is he going to steer the company to new heights? is he going to be able to do more than stabilize it? at the same time, there was a lot of talk of, will he let this company go? will it become a company that became under john scully and other past ceos who succeeded steve jobs originally? the answer was a resounding no. this is that a market cap that was three times what it was when steve jobs passed away, and that is just a number, but the numbers are still representative of this historical marker, which represents so many new products

over the years, apple watch, etc. emily: apple isn't the first company to hit the trillion dollar market cap. it was actually petrochina, which fell as oil prices fell. caroline, you are digging into other historical markers here, and having the highest market cap isn't necessarily the recipe for success. caroline: certainly not. casting my mind back to microsoft, a key tech player, who back in 1999 hit that half trillion dollar mark and while it had four successive years of downward trajectory, it languished at the number 300 in terms of market capitalization. it does not always spell this will be a winning streak for the company. you mentioned petrochina. because oil prices crashed, it fell off its perch as well. so it does not always spell glory, but what is going to be taken into account with apple is not only is it ahead of the pack when it comes to the other in excess of half $1 trillion

companies, it is about $100 billion worth more than amazon and well ahead of microsoft and the like. its price-to-earnings is pretty reasonable. it is the lowest of those kilotech companies. it trades at about 18 times future earnings. compared to amazon, it trades at more than 100 times future earnings. this is a company that is already raking in a quarter trillion dollars in terms of revenue every single year and it makes money -- no wonder its valuation is so high. emily: what are the risks for apple? are there any risks apple hits this mark and then falls back down, given the challenges ahead, even though it is relatively cheap compared to its tech peers? gene: there is no immediate risk and that always concerns me when i can't identify an immediate term risk. i don't see any immediate term over the next one to two years. probably over the next five to

10 years will be the emergence of wearables. and this idea, it is an augmented reality first, which is something apple believes strongly in, but that will be a shift in devices people are going to use. the good news for investors is, we have a clean sailing ahead for the next several years, but the risk is kind of down the road relative to what could happen when we have the next hardware shift. and to remind people, that is one thing apple has done brilliantly well, embracing the idea of the innovator's dilemma. when they had successful products, 2005, the ipod was just over 50% of revenue, they were very aggressive at creating a new product to cannibalize that with the iphone. in the future, apple will have to cannibalize the iphone and that will present some risk to the story. emily: mark, wearables are up 60% in the last quarter in terms

of revenue, but will it be the apple watch or air pods that cannibalize the iphone? probably not. mark: it will be another product, augmented reality glasses. that is apple's next big thing. emily: how big can that be? mark: we declared that about two years ago. this is really what tim cook is banking the future of the company on in terms of hardware. the company has well over 1000 engineers working on this, an augmented reality headset designed to eventually succeed the iphone, to take the heat away from the apple watch not doing as well as expected earlier on. this is their next big product. emily: are you as optimistic about ar as mark is? gene: mark has done a wonderful job of covering the topic, and i wholeheartedly agree this is kind of the next thing in terms of the mobile device, but it is

going to be a long time away. i am very optimistic about apple's business over the next several years. i just want to emphasize that piece, because the hardware business, the iphone business is operating almost like a services business. but kind of putting it together and answering your question, i share mark's optimism about the future impact that augmented reality will have on consumers. emily: caroline, it is not just products that have led to this run-up, it is also share buybacks, correct? caroline: certainly when it comes to the share price. there is a fascinating chart that really highlights how much the ramp up in share price has been driven by buybacks. they bought back phenomenal quantities of shares, billions spent since they first announced those buyback intentions. and when you do all the math, you can see that basically 42% of the share ramp-up is because of these share buybacks. now, that doesn't mean the market capitalization is driven

by that, because when you buy back shares, there are less there times the price of them in some ways come to hold to your capitalization, but you drive up your overall price of each share when you are making the earnings they have managed to have. so a little complex realization in market caps, but the share price ramp-up has a lot to do with buybacks, not just innovation. emily: coming up, tesla ceo elon musk offers a mea culpa after scolding two analysts for what he called bonehead questions. more from tesla's report next. and if you like bloomberg news, check us out on the radio and listen on the bloomberg radio app, bloomberg.com and on sirius xm. this is bloomberg. ♪

emily: google staff awoke on wednesday to surprising news. their company is working on a search app tailored and censored for china. the company has been working on codename dragonfly since spring 2017. this would be an about-face for google, which largely withdrew from the country in 2010 when it refused to sell censored content. the project was kept secret from all but select team leaders and sparked a furious debate. some good news from tesla this week. the company burned through less cash than wall street feared in the second quarter and ramped up production of its model three sedan. production hit 5000 a week multiple times in july. elon musk predicted 6000 for

august. stock soared wednesday after musk apologized to the analysts he scolded earlier for asking "bonehead and dry questions on the company's previous earnings call." >> there was really no excuse for bad manners, and i am battling with myself in that regard. the reasons of course, i got no sleep and [inaudible] 10 hour weeks, 20 hour weeks, but my apologies. emily: we spoke to tasha keeney of ark investment and bloomberg businessweek's max chafkin wednesday as the call was just beginning. tasha: we are very much looking forward to more news about the china factory. in the letter, they said china is one of the largest markets for ev's, and that is true, but it is also one of the largest markets for autonomous driving.

we think that is the largest market opportunity for china, a $10 million market globally in the next 10 years. we are looking forward to that. we think they could raise some capital to support that can we -- and we are ok with that. emily: you have been diving into the numbers for the last hour or so. what else do you see that we are not looking at? max: the big question for me and it hasn't been answered yet, is demand. so we know that tesla, based on what they are saying, they have not even tried to sell the cars and they are selling them really, really well. we don't know what has happened with these hundreds of thousands of reservation holders. some analysts had suggested the possibility there were lots of cancellations, tesla has pushed back on that, but i think in the long run, that will be a big question. how many people really want this car? famously, electric cars are a very small percentage of the total auto market. obviously, tesla thinks that is

going to grow but it is unclear just how much and just how badly people want these things. emily: in fact, tasha, goldman put out a note saying they have seen interest decrease as availability and test drives had increased. does that concern you? tasha: i think there is more than enough demand for the car out there. we are seeing that in the sales. the model three sales outpaced all midsize premium sedans and that is pretty amazing for a new car. so we are not concerned on the demand side and we have seen really great resale values from these vehicles as well. model x sells for $75,000. four years later, it is worth $45,000. that is $10,000 more than a comparable bmw, so we think these cars are a great investment. once they go autonomous, you can actually make money off of them. we are not concerned from the demand side. emily: next, the bears are out there. david einhorn shorting tesla,

elon musk not so happy about it and in fact responded to a report from bloomberg's tictoc saying "tragic, will send einhorn a box of short shorts to comfort him through this difficult time." as always, punchy. max: this is the elon investors want to see, because like i said, the happy warrior, he is punchy, but at least he is rolling with it. in that report, einhorn was complaining about the quality of his car and saying he would cancel his lease. so the fact that musk is sort of taking it as a joke will probably be seen as a good sign from investors. emily: musk has opened the call with executives thanking them for their "mind- blowing performance" over the last month and confirm they have been doing 7000 total cars weekly into july.

obviously, the numbers are moving in the right direction. do you think that it is sustainable, even without the tent and the human production line outside? tasha: i think tesla is working hard on that sustainability aspect of it. they said they hit 5000 multiple times. of course, people are looking for that to be continuous, but to take a step back, there is a lot of undue focus on the production numbers. people are really missing the long-term story that tesla is producing this unbelievable product that actually improves after you put it on the road. i mean, no other automaker is doing that right now. these cars improve overnight. they gain value after you acquire them as a customer and that is really the tesla advantage, the software advantage. that is not going away anytime soon. that is why they attract such talent, because they have this star figure in elon musk. emily: that was tasha keeney of

ark investment and bloomberg businessweek's max chafkin. still ahead, seems like selling consumers on cool tech gear just proved easier than convincing investors of it. stumbling on the public market, next. and later this hour, earnings forecasts fell short this week. a rare miss for the company. we will speak with square ceo. this is bloomberg. ♪

emily: uber announced it will shut down its self-driving truck service as it chooses to focus solely on car development. uber started this in 2016 in the effort to remake freight trucking. a self driving car service has been surrounded by controversy following a lawsuit against uber claiming that levandowski stole trade secrets. as competition heats up, uber says it will move self driving truck employees to other roles

in the autonomous vehicle department. meantime, shares of wireless speaker maker began trading thursday on the nasdaq after an underwhelming initial public offering. they raised about $208 million. that gives sonos a market value of around $1.5 billion. in april, the company hoped for a valuation twice that size. patrick: it was the tech headwind we have seen the last couple of days. as we got on the road, it became apparent after the facebook drop and some of the weakness that investors were getting a little skittish. alex: patrick, i hear you but tenable listed last week above range and the discount was more than we have seen tech stocks fall out of bed. were there certain points in sonos's business that investors are paying more attention to that perhaps they didn't get as excited about as i know you are?

patrick: i think the whole roadshow was about educating investors in terms of our model, and i think the quick reaction is always oh, they make these rate sounding, great-looking speakers so they are a hardware company. we did have to spend a lot of time helping investors understand that we are a totally different type of company that builds products that last for a long period of time and then people come back and buy more of those products. we are unconventional in that sense. in consumer electronics, we are the only company that approaches it the way we do. so certainly some of that education was necessary and so i think there is that element, of course. alex: when i talk to sonos owners, they do love the product, but we all know that a product does not a good business make. when you do talk about that narrative you are pushing to the street, where is the growth going to come from? is it convincing folks to upgrade to new systems, new speakers? is it the platform itself? where do you see that growth in

the future? patrick: in this first phase, we have really been successful in breaking into the traditional home audio market. people that were looking for stereo systems in their home. what i am most excited about and what our investors got excited about was the fact there are 176 million people around the world now paying for streaming music. they are paying $120 a year, they love music so much, it's $149 to start with sonos. what our job is in the second phase is to get people who have all that great music from pandora, apple, on their phone and get them listening to it out loud at home. that is exactly where we come in, because of our open platform supporting those services. that is really what we are talking about in this next phase at sonos and what i am excited about. alex: patrick, on the roadshow, you definitely talked a lot about the opportunity of voice-activated speakers and we pair alexa with the next age of voice activated speakers, but amazon also strikes fear into

other technology companies. how do you manage that relationship going forward if they decide to push more into the wireless speaker space? patrick: we managed the relationships with amazon, apple, and google for over a decade. we work closely with them, respect all those companies. we have put alexa on the platform, google will come this year. it has been beneficial for both sides in terms of them getting services into our 7 million homes and us being able to offer that voice control of the music experience. so based on our experience and the last decade of history, i expect our partners will continue to want to bring their latest and greatest service to sonos and we will bring that to millions of additional homes. it will be beneficial for both sides. alex: looking forward to the latter half of the year, you are a public company now and some of the macro trends will undoubtedly impact how your stock trades, whether it is tech earnings for the broader group or political tensions with the

likes of china. what are the biggest risks for your business in the second half of 2018 looking forward? patrick: i really feel after 20 years in the tech space, i feel it is more about what you are doing and executing in your own business. i realize and i am a realistic about watching things around the tariffs and things like that, but it is more where we are in the market with a huge opportunity in front of us. i am much more focused in how we execute the products we need to bring to market, the countries we are opening and i feel at our size and scale, some of those macro trends, we will be mindful of, but it is also the opportunity ahead so big and we are so early in the game that we could maneuver around. emily: bloomberg's alex barinka speaking with sonos ceo patrick spence. coming up, a big backer of facebook and despite its last quarter, he is only buying more.

that is next. and bloomberg tech's live streaming on twitter. check us out at technology and be sure to follow our global breaking news network at @tictoc on twitter. this is bloomberg. ♪ two, down and back up.

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emily: welcome back to "the best of bloomberg technology." i'm emily chang. has facebook hit bottom or does it have farther to fall? second quarter results show signs it may be running out of new users. investors reacted swiftly, wiping $100 billion in market value off the stock. but one person who is not worried, investor gary vaynerchuk. here is what he had to say when one twitter user asked him about facebook drop. i bought the stock today. that's my thought. we sat down with him for a wide-ranging interview that began with, what else but facebook? gary: i bought a couple hundred thousand dollars worth of shares. i bought some more this morning

because i am a long-term believer in the stock and i don't think there will be a lot of moments over the next three to four years, outside of macro economics that i will be able to take advantage of it. i do not tend to buy a lot of publicly traded stocks. my original facebook came pre-ipo but when it got hit when all the cambridge analytica stuff happened and mark was on trial i bought a ton. and obviously, the missing numbers or news recently, i have been buying up a little bit more because i think in the next 4, 7, 9, 13, 26 years, it is a good buy. emily: it is interesting, and that is a big bet. roger mcnamee a very public critic of facebook compared facebook to philip morris in terms of facebook's negative impact on the world. what about concerns about fake news? what about online hate? what about concerns about our privacy?

gary: i think there is a stunning non-conversation about taking on some sense of responsibility, meaning, sure, but choosing cnn or fox or msnbc has as many dynamics as what you are seeing in your feed, and then more importantly what you are choosing to consume as real. i mean, to me the thought that facebook is any different than twitter or instagram, which obviously they own, or websites or a million different ways we consume is kind of laughable and silly. i mean, visa and target and the american government itself has had breaches of information far more dramatic. yeah, i understand the concept, but i think making a jump from philip morris, which systematically spent lobbying dollars and tried to pay off politicians for four to five decades to suppress information,

is an awfully big jump. emily: what about profitability versus privacy? will one always trump the other and can we actually trust facebook? gary: i have no problem trusting facebook any more than i trust any other company on earth. profitability and privacy is kind of funny to me. we choose to do convenience over profitability every day of the week, and privacy, the way we pick privacy on a pedestal is almost nonexistent in our actions. every person watching this right now gives up privacy every day for convenience and speed. so whether it is amazon or google or apple or facebook, any of these companies that sits as a layer over top of the internet, we have shown through our action over the last 30 years and continue to with the usage of instagram and others. i love all the people protesting facebook on instagram. we prove as humans all the time how we think about privacy, we

love to talk about it but do not fear it as much because the underlining issue the amount of bad things that happen to the health and well-being of our family or having our money stolen is extremely far and few between. emily: what about the forces that may be bigger than us? the fact russia tried to hack our elections using facebook and there is evidence they are doing it again to sow discord? has facebook done enough to prevent itself from being weaponized? gary: facebook, this network, fox, cnn, twitter, it is all the same game where i think about it from a macro which is we make decisions. facebook or the russians did not make us pull for trump or hillary. so i think the information that people are buying ads and running them in our streams is very interesting. if you look at the execution of people that run political ads, the cost of penetrating someone with a different opinion versus one that already reinforces your

stance is where this gets more interesting. i think this is one of the great examples in human time of us not interested in accountability. facebook did not make you a racist, you made yourself a racist. emily: let's talk about twitter. you use twitter a lot and we saw the same huge dip on the back of twitter earnings. it is very clear that twitter is not in a high-growth state. they have hit a plateau and actually lost users over the last quarter. the influence is there. the president of the united states is using it as his megaphone. it is not the next facebook. gary: it was never the next facebook. the truth is facebook is all encompassing with instagram and who knows what mark and cheryl and the team are up to on their next m&a. you have whatsapp, yes, it is not the next facebook, i assume it is not priced on wall street in the same manner.

i will say this, if you look very closely to moon pie, a small snack brand, if you look at what wendy's is doing, the business world is starting to understand how to use facebook to drive business. we are working with kraft heinz on miracle whip. it stuns me how much twitter is the backbone of driving sales at albertsons and walmart. so i will say that maybe the width of attention on twitter is not growing to what the stock market's wants and needs, but the depth of attention in the platform and the ways to maneuver in it and its ad products, over the last three to four years i have been critical and not excited about twitter publicly, but i, no question, have seen over the last six to 12 months a resurgence different from the trump effect in just how much attention is in the platform. and when you have attention, you have the ultimate currency.

to me, it will be interesting to see what they do with their ott. i think they should play in that space. they were flirting with that a year or two ago. again, i don't know how earnings are done or how much the street values things, but depth and maybe not width is emerging on twitter. emily: in 2007, just before the financial crisis, one of them was a tech company, which is microsoft. is the market putting too many eggs in the tech basket? gary: honestly, and i want to be very fair for the audience, i think about things in such long-term, like the thought of me understanding the short-term economics of 90 day terms and numbers that most of the viewers here play on, and the arbitrary nature and the fact that we are playing financial engineering, not actually building businesses, in the macro, of course not. we are not going backwards. tech companies will continue to gain momentum.

we are not going backwards. this is where we actually live, not here, so in the super long-term, no. in the short-term, i have no sense if the market has overpriced these companies based on what the numbers they can hit over the next 90 days. people will not be watching abc and nbc over netflix and people will not be consuming newspapers over facebook. we are just starting in that world. short-term economics and the way this street likes to play, that is up to you guys. but the danger in a 5, 10, 15 year macro, i don't see it because the reality is we are only heading in one direction. technology does not care about our feelings or short-term judgment or wall street. it just continues to advance, and humans are engaging deeper and deeper and deeper and will continue to in perpetuity. emily: that was vaynermedia ceo gary vaynerchuk. coming up, square's stock has doubled this year but spending on new businesses and growth is tempering profits.

are investors expecting too much? our interview with square cfo sarah frier is next. this is bloomberg. ♪

emily: when it comes to square, investors expect a lot. shares have doubled after a 154% gain last year. that means pressure to outperform expectations, but instead they got a rare miss. the company spending on new products and growth tempered profits. we caught up with square cfo sarah friar on thursday.

sarah: great quarter, 60% topline growth. we are super impressed. it is really speaking of our strategy of investing to grow so we think the right balance with all the opportunity in front of us, we want to put money back in the business. so we did beat on the top line with 60% growth. on the bottom line, we want to invest but also do it with financial discipline. we actually maintained our guidance for the full year, so $240 million to $250 million of adjusted ebitda. that actually stayed the same. if you look at the backhalf of the year, that is three points of margin expansion. so we want to invest to grow, but do it with financial discipline. emily: shares have more than doubled now so far this year. what do you say to the investors who say that is just too rich and investors are expecting too much? sarah: it comes back to what is the opportunity in front of the company. we were really clear at the beginning of the year we were focused on omnichannel, financial services, and international, three massive

services, and we keep adding to the product list. in my mind, what we're focused on is how do we continue to grow a big, impactful company? how do we do more for our sellers? how do we build a big individual platform? finally, how do we take this all out onto the global stage? emily: give me some more specifics of where you see investing in the business and where you see the most returns as a result of the investments. sarah: i will start with omnichannel. one of the big megatrends in the world, buyers are showing up everywhere. they are off-line in your store, online on your app, and a marketplace, you name it. so as a seller, you need to always make sure you can make the sale. one of the biggest investments has been, how do we do that across every vertical? we made a fairly large acquisition in q2 of weebly and we continue to augment that. we have put a lot of investment into the cash app, our platform for consumers, to open up access to the financial system.

pdp, and that would keep adding more and more utility. the cash card itself tripled in volume in the first six months of the year, so another big place for investment. emily: we want to talk about bitcoin. how many customers have you added since you started buying and selling bitcoin? sarah: sure. if you look at what bitcoin is, it is another piece of utility in the cash app. you can add a card, keep your balance, go to an atm and buy crypto. we talked about 7 million monthly active as of december before we went live with crypto. we have not given a new metric, but you can clearly see under the hood that their is real growth because we are a top 30 app in the app store. yesterday, we were 15, and could go even higher towards the end of the week. so that is in rarefied air and a really good way to monitor the growth going on in the platform. emily: so you can buy, send, and sell bitcoin right now. why not let people receive bitcoin? sarah: it is about utility.

again, do people need it today? so just opening up buy and sell, which is the easiest way to do it, that is the first step. emily: the price is extremely volatile and you have generated almost as much bitcoin revenue as you lost. you brought in about 3 million more than in the prior quarter. jack dorsey has said it does not just stop at buying and selling, so what are the next steps? sarah: utility in the cash app, the next steps for us there are what do consumers want to do when they start holding an account? a new thing we launched was boost, which is effectively a rewards and loyalty program for think about it as a a prepaid debit card, really almost unheard of in the industry. what boost allows is a carousel for sellers to say, i want to be able to drive buyers to my platform, and the buyer can look at it and say, i really want that 15% off a shake shack

burger or one dollar off my coffee. that's my prepared boost. these are just examples of how we are trying to rethink what financial services looks like for individuals. emily: what is the thing that has surprised you most since you started working in cryptocurrency? sarah: on the crypto side in terms of a surprise, just the fact that it is one of many pieces of utility that people want. it is not the be-all and end-all that we hear a lot on financial news. it is just like any other form of investment people are making. they want to have access and that is square's purpose. emily: that was square cfo sarah frier. up next, naked labs created a product that might know your body better than you do. we will take a look. and how the company is bringing 3-d scanning technology into the home. this is bloomberg. ♪

emily: it goes way beyond a normal scale. start up naked labs has made a 3-d body scanner with a full-length mirror that people can buy for their homes, the first of its kind. it delivers information on your body, including weight, height, bmi, measurements. the company just raised $14 million. we spoke with one of the most recent partners and an early uber and spacex investor. cyan: originally, the goal is to have it in every home. to begin with, it will be the person who buys a peloton, who really cares a lot about personal fitness, so the price point is higher to start off with. emily: it is $1300 and a scale is more like $20. cyan: televisions, when they first started out, they were $23,000 for flatscreen tv's. if you are a pioneer in the

space and someone who is an early adopter, you are paying more, but eventually we can drive the price down the scale. emily: how does the technology work? cyan: it has sensors that do depth reading. so when you stand on the scale and put your arms up. have you tried it? emily: i have not. i will take one. cyan: i highly recommend it. i will try to hook you up with doing one. you basically stand on the pedestal and it turns around. afterwards, in about a minute you get what looks like a silver surfer image of yourself, a flattened out image, and you can see a 3-d model of yourself. emily: so talk to me about the potential here, the kinds of information this can give you and how it might change your life or how you live it? cyan: i think we are scale obsessed and obsessed with numbers that do not really ultimately matter for your health. you get on a scale and you are like, gosh, i am two pounds heavier, five pounds heavier, 10 pounds heavier, but you are working out at the gym and making dietary changes, those changes really matter.

when you get a 3-d body scan, you can see how those life choices are impacting your body. like sometimes when you workout, you are gaining weight so you might become discouraged if you just got on the scale every day. emily: what about the privacy issues here? we are so concerned what companies know about us, especially in light of the facebook data scandal, how they are using that data, if they are being honest and if they know where our data has gone? cyan: naked labs takes that very seriously. that is one reason why the scans are done on the device. it is stored there and does not go back to the company. the only thing that goes back to the company is that silver surfer image of yourself. emily: you joined founders fund a couple of years ago and you were an angel investor before that. you backed uber and spacex. what do you think are the big megatrends now? cyan: gosh, well, i know what i'm personally passionate about. i do not know that i follow the market and try to figure out what the biggest trends are, but

i am very passionate about the future of entertainment, so i have been doing a lot of investing in that area and turning over rocks. i do not know if you have heard of hatsune miku, she is a virtual pop star who is a hologram and billions of people watch her. there is also little michaela on instagram, so there is things i am looking at and trying to figure out, what is the next pokemon go? how are we going to interface with our phones? how is augmented reality going to impact us? emily: you invested in uber. do you think scooters are the next big thing or not? cyan: my personal opinion is no, but i do think they are necessary for certain people. people are very happy about them and they are cost effective and an affordable way to get around town. emily: i have to ask you about elon, since you invested in spacex. it is tesla earnings day. the founders fund backed tesla. does that concern you at all that he is running two

companies, he has a lot of side projects, he is tweeting all the time, including minutes before the earnings call. does that concern you as an investor from an execution perspective? cyan: we are pretty bullish on elon, as you know. we are very proud of everything he has accomplished and it is a lot to take on, but he has shown he can do it. but i don't speak to elon on a day-to-day basis, and i do not even know the breadth of everything he is doing. emily: what about bitcoin? founders fund has made it big bets on cryptocurrency. are you still bullish? do you expect to make more investment given the volatility in the price? i know everybody was excited about blockchain but let's talk about the values. cyan: as a team, we are still bullish and personally, i am still bullish. i hold on for dear life. as a store of value, i think it is incredibly valuable,

basically digital gold. it is not the best way to transact and so i think there will be other types of currencies that are good for that and different infrastructures, but it is good for store value. emily: a lot was talked about when peter thiel backed donald trump and i am wondering if your experience at founders fund changed. if it has had a negative impact or changed the way you guys do business or interact in the business room? cyan: i think it made us closer at the firm, mostly because we like to celebrate diversity of thought. and not everybody there agrees with everyone. you know, we have people who voted for bernie sanders and people who voted for trump. it is a very personal decision. we talk about a lot of things that have nothing to do with politics, like the future of the world and what exciting things we could be investing in. politics has very little to do with what we do, but if anything, i think it made a lot of us stronger because we got to really know each other and

collaborate with each other more. and we had to be pretty strong. emily: have things changed since he moved to l.a.? cyan: we see him more, actually. if you think about it, his office was right next to ours and he could walk over for an hour or so. now he comes in and is there for a full day or two. so we actually see him in the office more as a result of him being in l.a., which is great. emily: in san francisco we are seeing increasing ebb tide tech. policies like bans on scooters, limits on commuter buses. i saw you tweeting about the promise of a silicon valley in the midwest. why stay in san francisco? could you see the firm moving elsewhere, or do you see potential elsewhere? if so, where? cyan: it is always possible. we are not discussing it right now. i think we have started looking outside of silicon valley for other possibilities, like the next great company might not be in our backyard. so we have looked at the midwest, looking at asia, we are

looking all over the place. we are no longer location specific. so we are sector agnostic, location agnostic, stage agnostic. so i think that is just -- we are not going to stop investing here and we are not going to stop eating here in the foreseeable future. emily: i am interested in diversity issues and you have spoken out on them. you are a self-taught engineer and entrepreneur. what do you think is missing from the conversation about diversity in silicon valley? cyan: diversity is often sometimes things you do not see. it is not what is on the outside. for example, i identify as genderclear, and thank you for asking me about my pronouns. that was very inclusive and wonderful. thank you. i think a lot of the times when we have these discussions, we do not realize there is neurological diversity so sometimes people say things like, that person is dense or whatever, and they are on the spectrum. i think there are things like that like age diversity -- these are certain things i do not feel

like we are having conversations about that also matter. emily: thanks to cyan banister, partner at the founders fund. and that does it for this edition of "the best of bloomberg technology." we will bring you all the latest in tech throughout the week. tune in tuesday, when we check in with etsy ceo josh silverman on the earnings reports and get new clarity on the digital tax bill. bloomberg tech is live streaming on twitter. check us out, and follow our global breaking news network on twitter @tictoc. this is bloomberg. ♪

♪ taylor: welcome to "bloomberg businessweek." julie: and i am julie hyman. taylor: this week, we are focused on that hospitality merger and the fight over loyalty points. julie: yes, a very loyal customers on both sides. we are also looking at the issue of key men risks. taylor: that is when one company is reliant on one ceo. julie: sometimes to the company's detriment.