emily: i'm emily chang, and this is the "best of bloomberg technology." coming up, our exclusive conversation with keith block of salesforce, his first interview since being named co-ceo. president trump's campaign against what he is calling unfair search and social media. what are his next steps and our technology companies responding? elon musk has made a dramatic u-turn on his controversial attempt to take tesla private. we wrap up the saga of the deal

that never happened. first to the top story, salesforce gave a disappointing forecast in his latest results in which sales came in below expectations. the san francisco-based software maker has promoted keith block to run the company alongside cofounder marc benioff, embracing the idea of two chief executives. i sat down with him for an exclusive conversation and talked about his experience as co-ceo so far. keith: we are certainly in a situation where marc and i have been working together very closely. we have been together for over five years and have known each other for a long time. this is a natural extension of the model we have been working together. so when you think about our company, we are a large global enterprise that has been growing quickly. this is an opportunity for us to put together a decision-making process that enables us to make

decisions quickly for our customers. emily: he is a cofounder of the company and a big personality. how do you divide responsibilities? keith: we have been doing this for five years. it is a very trust-based relationship. it gives us an opportunity to focus on our strengths. when you think about marc, as you described him, he is a visionary who has great ideas around the product strategy, he's an outstanding ceo, passionate about the culture. my focus is on growth, execution, operational excellence, and it allows us to focus on our strengths and areas of expertise. it us to focus on our strengths. emily: co-ceo's have not necessarily worked out in other cases. in fact, some might say it has prevented the ability to be decisive. how do you overcome those historical precedents? like, what are the plans? keith: again, i think it starts with trust. we have a very trust-based relationship. we are both trusted advisors to each other, we collaborate all the time and make decisions together.

look at our results in q2. we said this session we see this as a way to execute at scale. we are excited with what we have done in quarter to and this is a great operating model for us. emily: you have boosted your forecast for the year on the stock is down. what should investors be looking at in this quarter? keith: i think investors should be thrilled because we are thrilled with these results. we are the number one leader and number one category in enterprise software. we are growing at a rate that is twice the rate of the market, so we are taking shares, we are driving success with our customers, and we are very pleased. we are operating at scale, growing at scale, and everything is going well with the company. we are very pleased with a performance. emily: you said you are well on your way to that $23 billion in 2022. what do you need to do to get there? what will you do to get there? keith: i think that growth strategy is in place. when we think about our growth, we think about international expansion.

our fastest-growing region was 33% so we are super excited about that. we think about our focus on industries and speaking the language of our customers. we are doing some incredible things in financial services, in manufacturing, public sector. and of course we have the world's largest ecosystem in the cloud, great business with our systems integrators, so we are thrilled with our growth strategy. again, we are operating and executing at scale and we are on our path to the $23 billion goal, which makes us the fastest-growing top-five enterprise software company in the world. emily: salesforce has redefined customer relationship management. what are the white spaces you see out there that still you see out there that still exist for you? keith: there's plenty of opportunity just athat we play, but also we are considered to be one of the most innovative companies in the world. having the market share leader in sales, service. there is a lot of room to run. focus on our industry solutions, international expansion, all that just realizes great customer success. and great growth, like our

success in the quarter. emily: salesforce has been known for making big deals. we have seen you make big acquisitions. how much will m&a be part of your strategy and where? keith: we think about organic and inorganic and our ideas always come from our customers. we listen to our customers. they give us our great ideas. when we acquired wheel soft, our most recent acquisition in quarter two, we got that idea from our customers. we got that idea from our customers. so we listen to our customers for innovation strategy. emily: i've heard plenty of salesforce acquisition rumors. often we hear twitter come up. is that something that has ever been of interest? keith: again, we listen to our customers and that is really our guiding light. that is how we decide how we innovate, whether it is organically or innovative. emily: let me put it this way, would you do a deal that big? are you open to big, potentially

transformative deals? keith: again, real soft was a largest acquisition we have done in the history of the company. it's been barely 90 days and we are super excited about what we are seeing. emily: let's talk about international expansion. you said we should look for growth there. what is the actual status? because that is where salesforce has a lot of untapped opportunities. keith: we have made a lot of investment over the last five years to drive growth in the international space. aipac was 28% growth in the quarter. really, this is a strategy born out of driving success for our customers globally. we want to be able to service our customers globally, so there is a lot of room to run. and we are very excited about those results. you can see it in our q2. emily: you worked at oracle for for 25 years, 26 years. we have heard marc benioff and larry trade barbs many times. is oracle in as dire straits as benioff seems to think it is? keith: we are in a wonderful place. that was a long time ago.

i have been with salesforce five years, just celebrated my fifth year anniversary in june, and i could not be more thrilled to be here working with marc, leading the company together with marc. we are excited for the future. emily: who is the competition then? keith: there is competition and every element. in any given time there is a different innovation and enter our space. our category of crm continues to broaden. so, we see competition. but look at our results. we are the category leader in crm, we are growing at twice the rate of the market, taking share, we're operating at scale, growing at scale, executing at scale. and at the end of the day, our job is to focus on our customers. we have over 30,000 employees . they wake up every single day and their focus is on driving customer success. if we take care of that, everything else will take care of itself. emily: so as the company continues to verticalize its sales strategy, what are the industry sectors we will see you target? sectorhealthcare, public

communications, kind of the classics you expect. we can see huge opportunities there. emily: dream force coming up. what should we be looking forward to? keith: dream force is our big event of the year. over a hundred 75,000 people will be attending, millions of viewers online, it is a celebration of innovation, success for customers. it will be at the end of september. and it is always a great event. emily: obviously the cloud is growing. but yet, it's a war between amazon and microsoft, and google, and potentially salesforce, depending on how you look at it. do you have any concern that those big, big companies will make it impossible for a company like you to ever get there? keith: we like to think of ourselves as a big, big company. again, we are the number one category leader and will be at $23 billion by 2022. these are our partners. we have partnerships with amazon

and google and ibm. emily: it's always difficult, though, with salesforce and some of these other companies like dell to draw the line between friend and enemy. keith: this is not unique to the cloud. this has been around forever. as long as you have a transparent relationship with your partners it works out for the customers. emily: that was our conversation with salesforce co-ceo keith block. coming up, another conflict brewing between tech in washington. google response to criticism from president trump that news search results favor the left. check us out on the radio and listen on the bloomberg app, and on bloomberg.com. this is bloomberg. ♪

emily: instagram has announced it will now offer users the option to use more secure

third-party authentication apps to log in. users reported getting hacked with their account credentials had been replaced with russian email addresses. president trump in the meantime has issued a warning to social media companies after he accused google of rigging search results to show negative news about him. take a listen. >> google and twitter and facebook are treading on troubled territory. they have to be careful. it's not fair to large portions of the population. emily: google responded to the president's accusations of answers, saying that when users type queries into the search bar, our goal is to make sure they received the most relevant answers in a matter of seconds. we don't bias our results towards any political ideology. to talk about this story we sat down with kate mitchell, mark bergen, and then brodie. -- and ben brodie. >> he might have a little bit of a point in that some of the new conservative sites are farther

out on the right, more conspiracy minded, probably aren't showing up very much in google search results. beyond that, fox news, which of course he loves and watches religiously, comes up all the time. we in dc, we hear this from politicians all the time. you only write the bad things. the answer is that is kind of what the news media does. it is a common critique and something we hear a lot from the president. emily: what has been the response from google? >> i was talking to some folks there that claim that this is outrageous, that the idea that google does this intentionally. they dealt with this two years ago with the notion that they were suppressing negative search results about hillary clinton. they did not come out at that time with a full endorsement, but privately they said that. part of the issue here is that google for 20 years has been pretty secretive about its algorithm and has not shared a lot of details.

so that can flame these conspiracy theories. to ben's point, facebook and twitter have done a lot this past year dealing with criticism in the other direction, that they served misinformation. they tend to weed out a lot of sites from both the right and the left. but predominantly on the right. that's what led to this moment. emily: kate, you spent a lot of time in washington. what do you make of the fact that facebook, google, and twitter are under attack by the president? do you think they have something actually to worry about? kate: it will be interesting to see. they are big platforms. they have become big companies. when you look at the largest companies on the planet, and a lot of them come out of silicon valley, so of course they will be in trump's crosshairs. particularly for someone who cares about coverage, these are now communications platforms. he will hear and read about himself and the people he cares about all the time. i do think they have something to potentially be worried about or involved in.

you see them starting to take a much bigger role in washington. they have more communications, more senior people will be showing up next week to talk to the senate intel committee on the broader issue of russian meddling in the election and how we prevent it going forward. so, i don't know that worry about it -- certainly everybody worries about over-regulation, but they can't avoid being something that needs to be discussed when we talk about communications, and is it fair and equal. emily: white house advisor larry kudlow said they are taking a look at google. this is at the same time that google is exploring, expanding back into china with a censored search engine. what could the government actually do here? ben: in terms of news, there may not be a lot that the government can do. there is a liability shield that internet sites enjoy for third-party content. and if you were to cut into that, google would probably face

a lot of libel lawsuits and things like that. i have not heard a lot of appetite to do that in congress. i have heard a lot of threat not a lot of appetite. the federal communications commission might have a little bit of an emphasis here. but again, they have shown no appetite generally to do this sort of thing. what i would be looking at is whether or not the government can do things on privacy or as kate said, russian election meddling that would otherwise hurt the company. whether that is for coverage of trump or something else, i think that is what they are looking over their shoulder for right now. emily: to that point, the ceo of facebook, sheryl sandberg, and jack dorsey, ceo of twitter will be testifying before congress next week. google has said they would send kent walker. congress has said that's not good enough. mark: reporters this morning spoke to senators that said they

want to see the ceo, sundar pachai, but they were not subpoena him to arrive? emily: why not? mark: he loved this stuff. i would say he is much more in the mold of google founders. he is a product guy, engineering. he loves being in front of the company, the developer conferences. he does not love addressing politics and does not love sitting in front of and being grilled by senators. emily: kate, is google making a mistake by not sending their top executive? kate: i think they are missing an opportunity. he can be an incredible communicator. that seriousness that facebook and twitter are showing is well received in washington and by the public. remember, we are part of the audience here, too. so i think it is a missed opportunity.

one of the challenges for all these companies is that data has been one of the biggest assets, their algorithms have been one of the biggest assets. so they should also be playing a role from a shareholder point of view and perhaps be making sure they are in the conversation to defend part of their assets that are so important while being responsive to the public. and i think not having somebody senior there makes their voice have less clout in the middle of this conversation. --ly: ben borid,e facebook, google, and twitter recently altered down iranian-backed accounts. our conversation with the ceo is next. after three-weeks of chaos, elon musk says he will not be attempting to take tesla private after all. investors still have a lot questions. this is bloomberg. ♪

emily: it began with the news that facebook had shut down 652 iranian and russian-backed accounts tried to spread global misinformation. and it provoked the following reaction from facebook ceo mark zuckerberg. >> security is not something that you ever fully solve. our adversaries are sophisticated and well-funded, and we have to constantly keep improving to stay ahead. but the shift we have made from reactive to proactive detection is a big change and it will make facebook safer for everyone over time. emily: one company helping to secure the internet is fire eye , and in fact, it is thanks to their warning that they were able to spot those disinformation campaigns. the ceo joined us to talk about what the company discovered. kevin: first off, you get a sense for these sort of things. you have a couple decades of

responding to cyberattacks you start learning the trade craft of the adversary. a lot of times there is a direct link between folks doing cyber attacks breaking into networks and folks doing information operations. you cannot really separate them. sometimes they are walking down the hall talking to each other. but when i talked to the analysts that found this, a lot of it was luck, and a lot of it was their unique training and experience. they started pulling a thread on a twitter account that just did not seem right. pro-iranian, anti-saudi, but the character behind the account didn't feel right, it felt more like state-sponsored count. as you pull the threads, more things emerge. we had the lowest bounds of multiple sites and accounts. emily: you are talking about the lowest bounds here. what else could there be? we have to believe there are other countries doing this as well. kevin: i think so. one of the reasons we do all of these information operations is that it is tangential to protecting our customers. also the rules haven't settled yet. nobody knows what is fair game. as i travel the world and meet

other departments of defense and other government officials, everybody is thinking what is the government's role on offense, in the information space, what is fair game, what is not? we feel, let's find where there is disingenuous sites, where there is not authentic news and point it out to folks. emily: do you believe these threats could be originating from other countries as well? what kind of evidence have you seen to support this? kevin: if we see evidence, we will tell folks, but at the end of the day it stretches could credulity totches think it won't happen. the information space is another tool governments will use to spread their agenda. emily: we had microsoft president brad smith on the show last week. they also identified several webpages operated by a group tied to the russian military. they took control of those webpages. take a listen to what brad smith had to say. brad: what we see now is a pattern that in many respects is a similar to what we saw in the united states in 2016 when

certain campaigns and political parties were attacked. it is similar to the pattern that we saw in france in 2017, when we really saw every major candidate for the french presidency targeted. we're seeing it again. emily: would you agree with that? kevin: i think it makes sense. i think if you're a political official, wealthy, influential, have power, you will always be targeted by a criminal element or potentially for espionage purposes. emily: so what would you say is the extent of these disinformation campaigns? how difficult is it to stop? kevin: it will be very difficult to stop. it will take zone defense by many different folks. that is why it is good we are talking about it today on bloomberg. the more people that are aware of it, the more people that will spot it. it is easier for the folks who are trying to be divisive to spread fake news than it is to catch it. we will take a group defense, zone defense. we are out there looking for it. if we can see it and it is

organized, we hope to make a difference. emily: so what should we be looking for? my inbox is filled with spam every day. hundreds of twitter messages that are fake or seem suspect. kevin: i think anybody can play the role. give credibility to certain things and less credibility to others. i think in general most people don't want to be surrounded by lies. they want to be surrounded by truth. when you see sites going up purporting to be news sites, but you know it is disingenuous, i think you have a right to know about it. emily: at the same time when you have a president that says google is completely biased, facebook and twitter also completely biased, does that run contrary to what you are trying to accomplish? kevin: i'm not sure. i don't have an opinion on that one way or the other. what we are trying to accomplish is we are trying to protect our customers the best way that we can. we have found a direct link between geopolitics and cyberattacks and we just need to be informed. emily: fire eye was recently

engaged by google to detect breaches. tell us about that. kevin: i don't know if they were recently engaged or not, but i can tell you we have thousands of customers that want to stop this and come up with their own intel. a lot of companies rely on our intel. emily: what can you tell us about how much you have been approached by potentially new businesses in this new threat landscape? now that we are more aware of what is out there. kevin: i think almost every business wants threat intelligence. because what we cannot be -- i am a cybersecurity expert. i work on the frontlines of industrial control network. we need to get the intel out to every single entity so they can assess the risk to their industry based on their business, based on what they know about geopolitics, on their current security platforms. so, the bottom line is that we promote the intel to folks so they can assess their own risk and better safeguard their own networks. emily: do think it is too late to save the midterm elections,

or protect them? kevin: speaking not just as a layperson, it is really hard to judge how the hearts and minds altered byre won or anonymous people or fake news. emily: why is it so hard to stop? kevin: the anonymity of the internet makes it really hard. you can sit 10,000 miles away and say you are from ohio and texas and no one can tell the difference. emily: do you think these companies have a bigger responsibility that they are not living up to? the fact that you tipped off of facebook but facebook couldn't see that for themselves? isn't that disconcerting? kevin: i don't know if they could not see it for themselves. but i can tell you this, policing hundreds of millions of people worldwide would be a complex challenge to do. emily: the fire eye ceo there. coming up, apple's new iphones are likely to have a familiar design. why the world's most valuable company is planning to double

down on the iphone x. details on that, ahead. follow our breaking news network on twitter. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving...

simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. emily: welcome back to the "best of bloomberg technology." i am emily chang. elon musk has made a dramatic u-turn on his controversial attempt to take tesla private. after almost three weeks of fever pitched excitement, elon musk wrote a blog saying that the electric carmaker would remain public. he knew the process would be challenging, but it was clear it would be more time-consuming and distracting than initially anticipated. after discovering these factors i met with the board of , directors and let them know i believe the better path is for tesla to remain public. with the distraction out of the way, analysts expect the folks -- the focus to return to the fundamentals, tesla's ability to sedanst its model three at a steady pace and profit on

the car. a chief investment officer and bloomberg businessweek's reporter joined us for reaction. >> he said when he tweeted that funding was secured, but if you look at both his statement on -- and the reports that came out, you know, it was not there. and you know that aside, this , deal did not make a whole lot of sense to begin with. tesla has done very well on the public markets, and the argument that this was going to be less of a distraction for the company, which is what musk initially said, did not really make a lot of sense because we saw this created a kind of a circus for two weeks. emily: ivan, you have potentially multiple sec fraud and market manipulation. is this something that investors and analysts can easily forget? or is tesla going to be plagued by uncertainty for the first evil future? ivan: i think there will be issues surrounding musk and that treat. i don't think it will be a bad

punishment, but i think he will be fined. i think he will be able to keep his ceo role. this was just an issue of the bad process and bad governance. i think it was motivated by elon's own frustration of dealing with production issues and journalists and analysts and short-sellers that motivated him to send a tweet in the first place. emily: max, what are broader investors and analysts, what is the community saying? do they still as far as you can tell want elon musk in this job? max: yeah, i mean absolutely. elon, even the critics probably would be cautious about just tossing him out. because you know the fact is , that the company you know needs to do so much over the next couple of years to justify its valuation, and even in the way that elon musk has failed to to live up to expectations, it's not easy to see how you bring in you know a regular car executive

and you necessarily do a whole lot better. a lot of investors see it as a bet on him, not as a bet on tesla, not even as a bet on electric cars. it is this weird kind of box they have been in for the last year. emily: i wonder, ivan, has elon musk fundamentally undermined the trust that investors will have in him? i mean, you know we discovered , multiple untruths here, . only that funding was not secured, but he did not spend two hours in spain but he was gone for five days from the factory floor, as he should and easily could have been, but there is this you know pattern of lying, essentially. ivan: well, he has never met his production goals and market and investors forgive him for that. i think you have to look beyond some of these short-term issues and unfortunate issues and look as max says to the bigger picture of what the company must do over the next few years to increase production, bring up the

additional models in the pipeline to justify the valuation. emily: max, talk to us about the potential penalties that could result as a result of these fcc inquiries. -- sec inquiries. we have talked about potential criminal liability, fines. new street research suggested that he could agree to certain controls on his communications. you know would that mean he , cannot use twitter? max: [laughter] i think a lot of tesla investors would hope that. one irony is if elon wanted to squeeze his shorts, he probably would have been better off stopping tweeting. announcing a three-month hiatus from tweet activity. which probably would have cheered up a lot of investors and help them out. i think one thing that happened here is we saw basically a crack in the support for elon musk, both at the board level and the investor level. it's not that people want to dump him overboard or rein him in, but i think this combined with some other stuff could lead

to some significant changes. those other things could be disappointing results in terms of bottom line or production numbers, or something more dramatic from the sec than justifying. emily: meantime, bloomberg's model 3 tracker appears that tesla could have actually exceeded 6000 model 3's per week this month. presumably, that is good news, if they can keep it up, but what are you actually monitoring on the factory floor? ivan: well, i think the target of 5000 and even potentially 6000 would be good. to go over 6000 might not be good. you don't want to ever increase the production too much, and then have issues with the cars. then have issues with the cars. i think in the bigger picture and what has happened here, there is a need for increased governance at tesla. this whole event may make tesla a better company and make elon

a more focused on production and less distracted by the outside issues. this actually could be a benefit in the long-term. emily: that was ivan of tigris financial partners and max chafkin. mark your calendars. apple has announced it is holding its next event september 12. the world's most valuable company plans to triple down on the iphone x, offering three new models this fall. they will have a range of prices, features, and sizes to increase their appeal, but none will be fully new designs. gene munster of loop ventures and bloomberg tech's mark gurman joined us to discuss. >> we know there will be three phones that are all going to look like the iphone x, all have face id. there will be high-end models, one model that comes in several colors. should be appealing to people upgrading from previous years'

iphones, people coming from the iphone five or sc, but if you are coming from the iphone x from last year, not a lot to see here new this year. emily: jean, is this a smart decision for apple? gene: yeah, it is. following mark's reporting, done a great job, but yes. the reason why is that what they are trying to do is really inch up asp's. the streets are looking for flat asp's. in 2019 over 2018. this if you kind of just kind of look at the math, the most high end phone, the one that will be about 25% bigger than the current iphone x, is probably going to start close to $1200. and so you kind of pool all of this together, and what you come out within asp of probably $830 or $840 at its peak. undere last peak was

$800. that's a big deal. this is yet another step in their broadening out the product line. the lowest iphone starts at $350. now we will have the most expensive one with the highest capacity at $1300. emily: well you know, and mark do think apple will be able to , make the lower-priced iphones, that older design which a lot of people are more familiar with? havephone x, you have to -- it is new behavior to actually get used to that phone. gene: that is a good -- mark: that is a good question. i would look at the iphone 7 specifically. this is a device that came out in september of 2016. i would be pretty unsurprising i would be pretty unsurprising if they kept that around, dropped the price, and made that the new low-end iphone, lacing may be the iphone se -- replacing maybe the iphone se. that is something to pay

attention to. emily: talk to us about the colors. what are the options? mark: colors are fun. they will continue to offer grey and silver, they are working on gold. they have been trouble getting the gold color working correctly, so maybe you will see that at a later update next year or maybe for this year. on the cheaper models, we are likely to see those three make -- main colors, the gold, white, gray/silver. perhaps a red or blue as well. and little bit more color this time around on the low-end phones. emily: so what kind of growth are you looking for over the next year? we had someone to research last week who expected 2019 to be a really disappointing year for the iphone. would you agree? ivan: -- gene: no. i think it is going to be this kind of 0% to 5% growth. i think the emphasis is on visibility. that is a shift to how we have thought about the apple story

since iphone came out. it's been about the excitement going in and the inevitable anxiety as we get into the product cycle. are shifting away from that, and i will point out there is one kind of easy way we can see whether investors are starting to be more comfortable with a kind of 0% to 5% iphone growth. the answer is look at the stock , action after they announced the iphone's. the stock has been moving up more recently, and in part anticipation of what mark is reporting here. but also this is typical in any given year. if it holds its gains, because usually it sells off, i think that is a sign that investors are ok with that slow of 0% to 5%. as long as it is growing, investors are going to be fine. emily: let's say it it grows at 0%, where does the growth come from? is it the purchases, is that the apple music and apps on the iphone? gene: part of it is services. we spend a lot of time thinking about that. this other piece that is getting

kind of the layers are getting peeled back is around asp's. we should see higher asp's than -- that we talked about. 0% to 5% unit growth, the asp's get to a higher revenue level, and then those two capture probably about 80% or so of apple's revenue. the other x factor, the thing that can get investors excited obviously is the cash that they are going to be returning. we think they are going to be returning cash at twice the pace that investors think over the next 2.5 years. that's another x factor. don't forget about autonomy and there is other things they are working on. there is a lot even though the stock is at an all-time high, a lot of reason for optimism. going into what would seem to be slow iphone growth numbers. emily: that was bloomberg's mark gurman and gene munster. we catch up with kiefer boeing. his later investment into the real estate platform. and then shares of the cloud

computing company has skyrocketed this year thanks to a sped up timeline for profitability. we are going to hear from the ceo jeff lawson. this is bloomberg. ♪

emily: amazon and whole foods have expanded delivery of groceries through prime now to cities across the united states including columbus, dayton, portland, greater washington, d.c. an additional areas of new york city. as amazon pours money into its whole food ventures competitors , like walmart and kroger have also stepped up their online grocery presence. bungalow was hoping to make a name for himself in the competitive real estate market. the firm aims to give people with roommates affordable places to live. the company has raised funding. it was led by coastal ventures. a new man joined the board of directors. we caught up with him and the ceo andrew collins to discuss.

>> residential real estate is a -- is the largest asset class in the united states and has not really been affected by technology. all areas of the technology -- the economy and real estate have actually been reinvented over the last 20 years, and is time for real estate to adjust to the modern world. what is exciting about bungalow is it takes existing inventory from the 1940's and where 1950's families and lifestyles very different and adjust it to today. emily: everybody has heard about trying to get an apartment, it is so hard it is such a , headache. how does it work? >> we streamline the process. we make it much easier with our online listings. we have 3-d walk-throughs. people can come even if they are not doing it in person to really walk through, and we help individuals with finding other great people to live with as well. that's the real bread-and-butter of bungalow. emily: why is this not something that airbnb could do? >> airbnb is not really in the business of providing permanent places to live. bungalow is in the business of providing permanent places to

live. airbnb provides vacation travel. short-term travel, vacation travel, does it well. there is a big difference between providing a place to live for 3-5 years, and providing a place to look for -- to live for 3-5 days. emily: what about the regulatory issues? airbnb has run into a lot of regulatory issues. i mean, how do city regulators feel about this? >> for us we are helping increase the long-term housing. airbnb has paved the way. subletting is explicitly provided for. as long as it is greater than 30 days. our leases are generally 4-18 months. on average, renters are staying with us for close to a year on the initial lease. emily: so you have been working on this for 18 months and have already raised $64 million? i mean, that is a lot of money super fast, isn't it? >> you mentioned we work. [laughter] real estate is expensive and real estate works really well when you have an advantage i can price things accurately. -- and can price things accurately. it is not cheap.

every house is expensive. fundamentally, real estate cannot be done for $10. it takes real money to change the world. emily: open doors you buy homes , from homeowners, fix them up, you turn them around. what sort of trends are you seeing in the real estate market given what is happening with rates, what is happening with the administration, the stock market? inwell, we see open house is one new city per month. we will have two cities a month soon. by the end of next year we will be in 50 plus cities. we have seen markets move differently in the united states. san francisco is a unique real estate market. the prices here are four times the national average. the days on market for a house is one fourth the national average. new york city is also very different. overall, i think at the high-end of the market, which really is not mainstream, there has been a softening of several million dollar homes. but in the mainstream part of america, people want places to live. they want to upgrade.

they want to get an extra bedroom for their kid, want to move to a better job. none of that has changed, so the number of houses being exchanged , which is the primary metric isn't changing, at least right , now. emily: where do you think the market is going? >> i think the market is still like up in -- likely to have appreciation across the board, except at the top 1% of houses. but then if you talk about 83% of houses, the median home in the united states is worth $240,000. even two should christians away from that is worth $5,000 -- two distributions away from that is as you think about those homes, $5,000. there is more demand for them. there is more people that want to live in san francisco than there are supply of bedrooms. because san francisco did not build enough inventory. seattle went through this, but other cities did that. cities that did not held over the decades that have high-paying jobs have an issue of getting the people that want

to live there. it is like the immigration debate. people should be able to live in any city they want in the united states and the best career that they can find for the most compensation, with the best mission that aligns with their values, but they literally cannot do that. people cannot move to the bay area because there is not enough housing. there is not enough housing in many cities in the united states and that makes no sense. so things like bungalow can help fix that. open door allows people to move flexibly whenever they want. it is another part of moving to another job, career, environment. emily: andrew what about the , safety and security question? you are matching up roommates. you have to do background checks, i presume. there are a lot of scary roommate stories out there. >> yeah, absolutely, but there are a lot of scary roommate stories because people cannot do those background checks. then have the same capability that we as a company can provide. it is one of the things we think most strongly about. as an organization we can provide that safety and trust are you can't do if you searching on craigslist for a roommate on your own. emily: how can you say you can

confidently do those background checks? we have seen uber and lyft struggle to do background checks on their own drivers. >> it's not just background checks. we are doing interviews and helping for may through the process, so it is not just background checks as criteria of one how we check. emily: do you think trump and the rate issue is going to affect prices? >> obviously there is a relationship between interest values and real estate. most people buy the mortgage. the effective cost of a mortgage is driven by the interest rate. as interest rates are up, mortgages get more expensive, which means purchasing power of a homeowner declines as rates go up. there is a fundamental connection there. that said, everybody who lives in the united states still needs a place to live, and we are not adding enough supply fast enough, so that causes appreciation where people can afford less. that creates a mismatch that nobody knows exactly how it is going to play out. emily: what is the cost of this service? you are paying for convenience,

right? >> that is correct, but because we are helping individuals find with,individuals to live and renting a room, it is 40% to 50% less than what a studio apartment would cost. emily: how are you protecting the data of people you work with? >> protecting? emily: there are privacy issues here. you are getting their personal with these potential roommates. >> absolutely, but we are keeping all that information and privacy internally to our team. and it is something we think very thoughtfully about. emily: that was the bungalow cofounder and ceo. does twilio make a name for itself in the crowded cloud computing sector? we hear from ceo jeff lawson next. ♪

emily: since going public in 2016, cloud computing software vendor twilio has been growing

its customer base and what is turning out to be a very crowded market. in its most recent earnings report, the company posted its second ever profitable quarter and had a rosy outlook. we talked to the twilio ceo jeff lawson about the strategy going forward. >> there is nothing particularly we didn't do this quarter. i think it has been the gradual process of building the company over the last 10 years that focuses on customer success. we have this really amazing business model which is that we have the platform approach which puts developers first. developers bring twilio to build all sorts of different types of interaction with their customers. we see this in industries from travel and hospitality and real estate to tech companies old , companies, new companies, anything you can imagine. with a usage-based pricing small,del, it starts out and then as they succeed, we succeed. what you see in this platform is an efficient way to get

customers with developers at the lead, and then this usage-based pricing model gives us this great expansion rate inside of all these customers. the confluence of all that is what you see in the strength in our financial performance. emily: whatsapp is your biggest customer. what do you help them do? jeff: when you install whatsapp on a phone, they send you a text to confirm your identity. twilio is powering that. emily: what about larger corporate clients? >> we are seeing software become an important part of every company's strategy. so what used to be you , outsourced software that was not strategic. now every company needs to be be -- to be good at building software to differentiate themselves. when they do, they hire developers, and those people bring in twilio. if you are start up, maybe you bring it in and that's enough. when you are an enterprise, there will be more complicated decisions being made. our sales team will come in and follows the lead of the internal developers, help them bring a prototype with very little friction and maybe credit card,

then the sales team will help the initial prototype and idea the developers are working on turn it into reality at scale , inside of a bigger enterprise. emily: twilio is involved with voter engagement. talk to us about the tools you are selling to politicians and lobbyists. >> we see cases in politics. it is not about connecting -- we have been excited to partner with organizations that are connecting voters with their elected officials. that is one of the big areas we have seen a lot of traction. we announced an initiative a couple of years ago now called voices for democracy. this is part of twilio.org. what we said is that we have a polarized world right now. we think what the world needs is people to connect with each other and in particular for representatives of democracy to work voters need to believe that , their elected officials are listening to them. that is the most important kind of communication that it to -- that needs to happen. direct constituents representative communication. emily: at the same time we are seeing democracy under threat, we are seeing state actors trying to meddle in elections,

and how do you make sure those interactions, if you are the middleman are secure? , jeff: we have been working with great organizations that are bringing a solution for how to talk to constituents directly into the u.s. house of representatives. what they are doing is working directly with the elected officials to power their communications and use channels like sms. there are representatives in over 200 offices where they say text us if you want to talk to , us. don't try to call us, it is always busy. now you can text us. staffers are manning that. we focus on working with great organizations that represent official channels of communication and help people to mobilize each other and get out there voices so that their voices are heard by their elected officials. emily: that was twilio's ceo jeff lawson. and that does it for this edition of the "best of bloomberg technology." we will bring you the latest in tech throughout the week. 2:00 in san francisco.

bloomberg technology is live streaming on twitter. be sure to follow our global breaking news network tictoc on twitter. this is bloomberg. ♪

haidi: president trump turns up the heat on canada, slamming what he calls years of trade abuse and is warning congress to keep out. ramy: the president is skipping important summits in asia this year. that raises questions about u.s. commitment to the region. isdi: the administration accusing others of currency manipulation. we hear from the bank of finland. ramy: sydney's margin -- mortgage pain says the rba will stay on hold to the next decade.