time get 150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you needu and me. order your health plus ancestry kit today. >> this is the best of bloomberg technology where we bring you our top interviews from this week in tech. coming up our exclusive conversation, his first interview since being named coc.e.o. plus, anti-social. president trump's campaign against what he is calling unfair search and social media. what are his next steps and how are tech companies responding? and 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. our top story, sales force gave a disappointing forecast in the latest results and unearned revenue which indicates user subscription sales came in below expectations. meantime san francisco based software maker has recently promoted keith block to run the company alongside the founder. block started with sales force in 2013, became chief operating officer in 2016, and also served as vice chair. i sat down with him for an exclusive conversation and talked about his experience as co-c.e.o. so far. >> we're certainly in a situation where mark and i have been working together very, very closely. we've been together for over five years. we've known each other a long time. this is just a natural extension of the operating model. when you think about our company we're a large, global enterprise, 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 and as natural extension. >> he is a cofounder of the company, a big personality. how do you decide responsibilities? >> we've been operating under these principles for the last five years and it is a trust based relationship. it gives us the opportunity to think about -- focus on our strengths. mark is a visionary and has great ideas around product strategy. he is an outstanding c.e.o. he is passionate about the culture. my focus is on growth and execution and customer success and operational excellence. it allows us to focus on our strengths and areas of expertise. >> co-c.e.o. structures haven't worked out well in other cases. some would say it has prevented the ability to decisive. how do you overcome those historical precedents? what are the plans to trouble shoot if necessary? >> think it starts with trust. we have a very trust-based relationship. we're trusted advisers. we collaborate all the time. we make decisions. we see this as a way to execute

speed at scale. we are growing at scale. look at our results in q2. we are wildly excited about what we've done in q2. this is a great operating model. >> you've boosted your forecast for the year. the stock is down slightly after hours. what should investors look at? >> i think investors should be thrilled. we are thrilled with these results. we are the number one leader in the number one category of enterprise software, the fastest growing category. number one in sales and marketing and platform and growing at a rate that is twice the rate of the market. so we're taking shares, driving success with our customers and we're very, very pleased. we're operating at scale, growing at scale. we are very pleased with the performance. >> you said you are well on your way to that $23 billion in 2022. what do you need to do to get there? >> i think the growth strategy is in place. when we think about our growth leverage we think about international expansion, our

fastest growing region this year with 32% growth. when you think about our focus on industries and speaking the language of our customers, we are doing incredible things in financial services, manufacturing, public sector. then of course we have the world's largest ecosystem in the cloud. we have our systems innovator and we are very thrilled with our growth strategy. we're operating and executing at scale and on the path to the $23 billion grow which makes us the fastest growing software company in the world. >> sales force has redefined customer resource management. what do you see out there that still exists for you? >> there is plenty of opportunity just in the space we play. as you know we are considered to be one of the most innovative companies in the world. having the market share lead inner sales and service and marketing and platform there is a lot of room to run, focus on our industry, specialization in industry strategy and solutions. focus on our international expansion. all of that just realizes great

customer success and great growth like our success in the quarter. >> sales force is known for making big deals. how much will m & a be part of your strategy and where? tveragets is very interesting. when we think about our growth strategy we think about organic and inorganic. our ideas always come from our customers. we listen to our customers. when we acquired meal soft our most recent acquisition in q2 as you know we've seen great success already. we got the idea from our customers. we listen to our customers to drive our innovation saturday. >> i take plenty of sales task acquisition rumors, often we hear twitter come up that sales force is interested in buying a company as big as twitter. has that ever been of interest? >> we listen to our customers. they are an inspiration for us and that is how we decide how we innovate wh organic or inyorkally. >> are you open to big,

potentially transformative but also risky deals? >> again, meal soft was the largest acquisition in the history of the company. it's barely 90 days. we are super excited about what we're seeing. >> what is the actual status of international acquisition? sales force has a lot of untapped opportunity. >> we've made a lot of investment to drive growth in the last five years. and really this is a strategy born out of driving success for our customers globally. we want to be able to service our customers globally. there is a lot of room to run. we are very excited about those results. you can see it in our q2. >> you worked at oracle for 25 or 26 years. we've heard them trade barbs many times. is oracle in as dire straits as he seems to think it is? >> we are in a wonderful place. that was a planet a long, long time ago, far away ago.

i've been with the sales force five years. i just celebrated my fifth year anniversary in june. i couldn't be more thrilled to be here with mark and leading the company forward and excited to be here. there is competition in every element. in any given time there is a different type of innovation that could enter our space. our category of c.r.m. continues to broaden. we see competition but the fact is look at our results. we're the leader in c.r.m., fastest growing segment of enterprise software growing at twice the rate of the market. we're taking share, operating at scale, growing at scale, executing at scale. at the end of the day our job is to focus on our customers. we have over 30,000 employees that wake up every single day and their focus is on driving custom success. if we take care of that everything else will take care of itself. >> as the company continues to verticalize its sales strategy what are the industry sectors we'll see you target? >> certainly financial services

is a hot bed for us. also health care, public sector, manufacturing, telecommunications. kind of the classic you would expect. we can see just huge opportunities to drive success with our customers there. >> what should we be looking forward to? >> dream force is our big event of the year. over 175,000 people will be attending. millions of viewers online. it is a celebration of innovation and success for our customers. it's going to be the end of september. it's always a great event. >> so, un, obviously the cloud is growing. but yet it is a war. it is a war between amazon and microsoft and google and potentially sales force depending how you look at it. do you have any concern that will big, big companies make it impossible for a company like you to ever get there? >> we like tongue of ourselves as a big, big company. we have partnerships with amazon, google, i.b.m., dell,

microsoft. >> it is always difficult with sales force and some of the other companies like dell to draw that line between frenemy or enemy. >> it is really coopertition. this is not unique to the cloud. it's been around forever. as long as you have a transparent relationship and work collaboratively it works out for the customers. >> coming up another conflict brewing between tech and washington. google responds to criticism from president trump as new the results-# favor left. this is bloomberg. ♪

emily: instagram has announced it will offer users the option of using more secure third party apps to log in.

this was after instagram users reported they were being hacked only to discover their account credentials had been replaced with russian e-mail addresses. president trump 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. president trump: google and twitter and facebook. they're really treading on very, very troubled territory and they have to be careful. it is not fair to large portions of the population. emily: google responded to the president's accusations of rigged search results this week saying when users type queries into the google search bar our goal is to see they receive the most relevant answers in a matter of seconds. the search is not used to set a political agenda and we don't bias our results toward any political ideology. we sat down with kate mitchell the cofounder, and our other guests. >> he might have a little bit of a point in that some of the

new conservative sites further 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 and, you know, we here in d.c. 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's been the response from google? >> i talked to some folks there, the claim that this is outrageous, that the idea google does this intentionally, they dealt with this two years ago with the notion that they were suppressing negative surf results about hillary clinton. certainly privately they said that. part of the issue is that google for 20 years has been secretive about its algorithm

and hasn't shared a lot of details. that can inname the conspiracy theories. to ben's point they have like facebook and twitter have done a lot this past year dealing with criticism. the other direction, that they serve as news disinformation and they tend to weed out a lot of sites both on the right and the left but predominantly on the right. that sort of led to this moment. >> you've spent a lot of time in washington. what do you make of the fact that google, facebook, twitter, they are all under attack by the president? do you think they actually have something to worry about? >> well, it'll be interesting to see. they are big platforms and become big companies. when you look at the top largest companies on the planet, a lot of them come out of silicon valley so of course they'll be in trump's cross hairs and particularly for someone who cares about coverage these are communications platforms so he is going to hear and read about himself and the people he cares about all the time. i do think they have something to substantially be worried about or involved in. you see them taking a bigger

role in washington. they all have large offices as we know and starting to have more communications, more senior people showing up there next week to talk to the senate intel committee on the broader issue of russian meddling and the election and how we prevent it going forward. i don't know that, worry about it, certainly everyone worries about over regulation but inc. they can't avoid as you point out, mark, being something that needs to be discussed when we talk about communications. is it fair and equal? emily: ben, the white house adviser said they're taking a look at google at the same time google is exploring expanding back into china with a censored search engine. what could the government actually do here? >> in terms of news there may not be a lot 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 suits and things like that. i have not seen a lot of appetite to do that in congress. i've heard a lot of threats. i have not otherwise heard a lot of appetite. the federal communications commission might also have a little bit of a nexus here but, again, just 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're looking over their shoulder for right now. emily: to that point, facebook, twitter and perhaps someone from google will be testifying before congress next week. google has said they would send kent walker. congress has said that is not good enough. >> just this morning our reporter spoke to some senators both republican and democrat that said they want the c.e.o.

but they're not going as far as we know right now to subpoena. emily: why not? >> i don't know. google's former c.e.o. eric schmidt loved this kind of stuff. right? he loved getting in toronto front and he was partly the to do so chairman the founders didn't have to do. this is a product guy, he loves being up in front of the company, at the development conferences. he does not love addressing politics and certainly doesn't love sitting in front being grilled by senators. emily: kate, is google making a mistake? by not sending their top executive? >> i think they are missing an opportunity. he is an incredible communicator. part of it is that seriousness that now facebook and twitter are showing i think is well received in washington. i think it's well received by the public. remember we are part of the audience here, too. it is a missed opportunity. one of the challenges for all

these companies is data has been one of their biggest assets. their algorithms are. they should also be playing a role from a shareholder point of view and perhaps making sure they're in the conversation to defend part of their assets that are so important while being responsive to the public. i think not having somebody senior there makes their voice have less clout in the middle of this conversation. emily: bloomberg's ben brody as well as mark bergen and kate mitchell of scale venture partners. well, facebook, google, and twitter recently all took down iranian government backed accounts meant to influence global affairs. the cyber company they have to thank? fire eye. our conversation with the c.e.o. is next. and after three weeks of chaos elon musk says he won't be attempting to take tesla private after all but investors and regulators still have a lot to question. this is bloomberg.

emily: it began with the news facebook had shut down 652 iranian and russian backed accounts trying to spread global misinformation. then twitter and global's turn taking action against 284 and 52 accounts respectively. and it provoked the following reaction from facebook c.e.o. mark zuckerberg. >> security is not something that you ever fully solve. our adversaries are sophisticated and well fund eand we have to constantly keep improving to stay ahead. the shift we've made from react toiv proactive detection is a big change and will make facebook safer for everyone over time. emily: one company helping secure internet is fire eye. it is thanks to fire eye's warning that facebook and google spotted the disinformation campaigns. fire eye's c.e.o. joined us to talk about what the company discovered. >> first off you get a sense for these sort of things. a couple decades of responding to cyber attacks you start

learning the trade craft of the adversary and a lot of times there is a direct link between folks doing cyber attacks, breaking into networks and folks doing information operations. you can't really separate them. sometimes they're walking down the hall talking to each other. when i talked to the analyst that found this, a lot of it was luck and a lot was their unique training and experience. they started pulling a thread on a twitter account that just didn't seem right. pro iranian, anti-saudi. yet the character behind the account just didn't feel right. it felt more like a state sponsored account. as you pulled the threads more things emerged and we landed with at least the lowest bounds of multiple sites and accounts. emily: air talking about the lowest bounds. what else could there be? we have to believe there are other countries doing this as well. >> i think so. one of the reasons we do all these information operations trying to find them is it is tangential to protecting our customers but 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? what is the government's role in the information space? what is fair game? what's not? as we set the rules we feel let's find where there is disingenuous sites, not authentic news and point it out to folks. emily: do you believe these threats could be originating from other countries as well? north korea, china be doing the same thing? what are you seeing? what kind of evidence have you steen support this? >> if we see evidence we'll tell folks. at the end of the day it stretches to think it won't happen. information is just another tool governments use to promote their agenda. emily: we had the microsoft president brad smith on the show last week. they also identified several web pages operated boo i a group tied to the russian military. they took control. take a listen. >> what we are seeing now is a pattern that in many respects 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 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? >> i think it makes sense. if you are a political official, wealthy, influential, if you have power, you'll always be targeted by a criminal element or potentially for espionage purposes. emily: so what would you say the extent of the disinformation campaigns -- how difficult is it to actually stop? >> i think it is very difficult to stop. it is going to take zone defense by many different folks. that's why it's good we're talking about it today on bloomberg. the more people that are aware of it the more people will spot it. it is easier for folks trying to be divisive to spread fake news, to do that, than it is to sometimes catch it. so it will take group defense, zone defense. we're out there looking for it. if we can see it and it's

organized we hope to make a difference. emily: what should we be looking for? my inbox fills with spam every day. hundreds of twitter messages are fake or seem suspect. >> i think everybody can play a role in it. give certain credibility to certain things and maybe less to others. 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 new sites but you know it is disingenuous and not authentic i think they have a right to know about it. emily: at the same time when you have a president who says google is completely biased, facebook and twitter also biased does that run contrary to what you're trying to accomplish? >> i'm not sure. i don't know if i have an opinion one or the other on that. what we're trying to accomplish is just protecting our customers the best way we can. we have found the direct link between geo politics and cyber attacks. we just need to be informed about those. >> fire eye as i understand it was recently engaged by google

to detect breaches. tell us about that. >> i don't know if they were recently engaged or not. i just can tell you we have thousands of customers who want to -- is our industry more at risk today than yesterday? that is probably odd to tell you. there are a lot of companies that rely on our intel. emily: what can you tell us in general about how much you've been approached by po thrings new businesses in this new threat landscape now that we are more aware of what is out there? >> i think almost every business -- i am a cyber security expert but i don't work on the front lines of industrial control system 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 geo politics and their current security platform. the bottom line is we promote the intel to folks so they can assess their own risk and better safeguard their own

networks. emily: do you think it is too late to save the mid-term elections or protect them? >> i'm speaking more as a lay person than a cyber expert. it is hard to judge how the hearts and minds of people are won or altered by fake news or from anonymous people. emily: why is it so hard to stop? >> the anonymity of the internet makes it really hard. you can sit 10,000 miles away and say you are from ohio or texas and no one can tell the difference. emily: do you think these companies have a bigger responsibility that they have not been living up to, the fact that you tipped off facebook but facebook couldn't see that for themselves isn't that a little concerning? >> i think they might have been able to see it for themselves. i don't know their internal policies but policing a platform of hundreds of millions of people worldwide would be a very complex challenge to do. emily: fire eye c.e.o. kevin mandia there. iphones are likely to have a new design. why the company is planning to

double down on the iphone 10. details ahead. check us out at technology and be sure to follow our global breaking news network tictoc on twitter. this is bloomberg. ♪ this isn't just any moving day.

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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'm 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 musk wrote a blog stating the electric car maker will remain public. he wrote i knew the process of going public would be challenging but it is clear it would be even more time consuming than anticipated. after considering all these factors i met with tesla's 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 focus to return to the fundamentals, tesla's ability to turn out the model 3 sedans as well as turn

a profit on the car. >> he said when he tweeted that funding was secured but if you look at both his statement and the reports that came out, you know, it wasn't there. and that aside, this deal didn't 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 somehow less of a distraction for the company, which is what musk initially said, didn't really make a lot of sense. as we saw this created kind of a circus for two weeks. >> ivan, you have potentially multiple sec inquiries here, issues around potential sec fraud, market manipulation. is this something that investors and analysts can easily forget or is tesla going to be plagued by uncertainty for the foreseeable future? >> i think there will be some issues surrounding musk in that tweet. in the end i don't think it will be some type of bad

punishment but i believe he will be fined. i think he will be able to keep his c.e.o. role but this was just an issue of bad process and bad governance and i think was motivated by elon's own frustration of dealing with production issues and market 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? >> yes. absolutely. i think elon, even the critics probably would be cautious about just tossing him out because, you know, the fact is that the company needs to do so much over the next couple years to justify its valuation and even in the way that elon musk has failed or has failed to live up to expectations, it's not easy to see how you bring

in regular car executives and you necessarily do a whole lot better. the fact that a lot of these investors see it as a bet on him not as a bet on tesla, not even a bet on electric cars. so it's this kind of weird box they've been in for basically the last year. emily: i wonder, ivan, has elon musk fundamentally undermined the trust that investors will have in him? i mean, we uncovered multiple untruths here not only that funding wasn't secured but that he didn't actually spend only two hours in spain but he was gone for five days from the factory as he should and easily could have been but there is this, you know, pattern of lying essentially. >> well, he has never met his production goals and the market and investors forgive him for that. i think you have to look beyond some of the 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 out the additional models in the pipeline, to justify the valuation. emily: talk to us about the potential penalties that could result as a result of the sec inquiries. we've talked about potential criminal liability, fines, new street research suggesting that he could agree to certain controls on his communications. would that mean he can't use twitter? >> i think a lot of tesla investors would hope that. one of the ironies of this is if elon wanted to squeeze the shorts he probably would have been better off stopping tweeting announcing a three-month hiatus from all tweet activity which probably would have cheered up a lot of investors and helped him out. one thing that happened here is we saw a, basically a crack in the support for elon musk both at the board level and on the investor level. it is not as if people want to just dump him overboard or necessarily rein him in but i think this combined with some

other stuff could start to lead to some significant changes and those other things could be, you know, disappointing results in terms of the bottom line or production numbers or something more dramatic from the sec than just a fine. emily: meantime, ivan, bloomberg's model three tracker appears that that tesla could have actually exceeded 6,000 model threes a week this month. presumably that is good news if they can keep it up. but what are you actually monitoring on the factory floor? >> well, i think the target of 5,000 and even potentially six would be good. to go over six may not be good. you don't want toffer increase the production too much and then have issues with the cars. i think in the bigger picture in what has happened here, there is a need for increased governance at tesla and the whole event may actually make and make tter company

elon more focused on production and less distracted by the outside issues. this could be a benefit in the long term. emily: well, 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 10 offering three new models this fall with a range of prices, features, and sizes to increase their appeal. however, none will be wholly new designs like the iphone 10 was last year. >> we know there will be three phones. they're all going to look like the iphone 10 and have face i.d. there are going to be two high end models one lower l.c.d. model that comes in several colors. should be appealing to people upgrade forsberg previous

years' iphones to perhaps iphone 6 or 7 coming from the iphone 5 or sc so it should abbig upgrade for them but coming from an iphone 10 last year not a lot new this year. emily: gene, this is a smart decision for apple? >> yeah, it is. we're just by the way following mark's reporting here on this, and done a great job on it but, yes, it is a smart decision. the reason why is what they're trying to do is really inch up a.s.p.'s. the streets are looking for flat a.s.p.'s in 2019 other 2018. so 745. if you look at the math the most high end phone about 25% bigger than the current iphone 10 is probably going to start close to $1200. you kind of pool all of this together. what you come out with is an $840 of probably $830, at its peak and the last peak

was just under 800. that's a big deal and i just want to also point out that this is yet another step in them broadening out the product line. the lowest iphone starts at 350. now we'll have the most expensive one with the higher capacity is going to be $1300. emily: mark, do you think apple will continue to make the now lower priced iphones, that older design, which a lot of people are actually more familiar with? the iphone 10, you know, you have to have new -- new behavior in order to actually get used to that phone. >> that as good question. i would look at the iphone 7 specifically. this is the device that came out in september of 2016. i would be pretty unsurprised if they kept that around, dropped the price between 50 and a hundred dollars and made that the new low end iphone, replacing maybe the iphone s.c.e. that is something to pay attention to as well. emily: talk to us about the colors, mark. >> the colors are fun.

so we're told that the two phones, obviously they'll continue to offer gray and silver. they've been working on gold. they're having some trouble getting the gold color working correctly so perhaps we'll see that at a later update perhaps next year or maybe ready for this year. on the cheaper models we're likely to see those three main colors, the gold, gray, and white/silver but also sort of a blue color and perhaps a red color as well. so a little bit more color this time around on the low end phones. emily: gene, what kind of growth are you looking for over the next year? we had guests on last week expecting 2019 to be a really disappointing year for the iphone. would you agree? >> no. i think it is going to be this zero to 5% growth. emphasis here is on stability and visibility of the iphone franchise. that's a shift to how we've thought about the apple story

since the iphone came out. it's always been about the excitement going in and then the inevitable anxiety as we get into the throes of the product cycle. i think we're shifting away from that, emily. this is one kind of easy way we can see if investors are starting to be more comfortable with kind of zero to 5% iphone growth. the answer is look at the stock action after the announcement of the iphones. it's been moving up more recently and in part anticipation of what mark's 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 investors are ok with that slow kind of zero to 5% as long as it's growing investors are going to be fine. emily: so let's say it is closer to zero percent. where does the growth come from? is it services? the purchasing of apple music and apps on the iphone? >> well, part of it is services. obviously we spend a lot of

time thinking about that. the other piece getting kind of -- the layers are getting peeled back right now is around a.s.p.'s so we should be higher a.s.p.'s we just talked about. you can have zero to 5% unit growth but with the a.s.p.'s you get to a higher revenue growth number. and then those two capture probably about 80% or so of apple's revenue and, you know, the other x factor the thing that can get investors excited obviously is the cash they'll be returning. we think they'll be returning cash at twice the pace that investors think over the next two and a half years. that is another x factor and don't forget about autonomy and other things they're working on, too. there is a lot even though the stock is at all-time highs, a lot of reason for optimism going into those, what seem to be slow iphone growth numbers. emily: coming up, we catch up with coastal ventures on the latest investment into residential real estate

platform bung lowe. later, shares of the cloud computing company have skyrocketed this year thanks to a setup timeline for profitability. we'll hear from the c.e.o. jeff lawson. this is bloomberg. ♪

emily: amazon and whole foods have expanded delivery of groceries through prime now and new cities across the united states including columbus, dayton, portland, greater washington, d.c., and additional areas of new york city. as amazon pours more money into the whole food venture competitors have also stepped up their online grocery presence. bungalow is hoping to make a name for itself in the competitive real estate market. the firm aims to offer people affordable places to live with roommates who have been 'vetted on the platform. the company has just raised a $14 million round of funding led by coastal ventures. -- we of the round am caught wup the c.e.o. to

discuss. >> residential real estate is the largest across the united states and it has been basically unaffected by technology. all other air yaffs the economy other than real estate have actually been reinvented over the last 20 years. it is time for real estate to djust to the modern world. bungalow takes existing inventory where families and lifestyles were very different and converts it into the demand we see today for millennials in urban environments. emily: everybody has heard about people trying to get an apartment. it is so hard and such a headache. how does it actually work? >> we streamline the process and make it much easier with online listings. we have 3d walk throughs on the website where people can come even if not in person to walk through and we help individuals with find orge great people to live with as well. that is the real bread and butter of bungalow. emily: why isn't this something air b & b could do? >> bing lowe is in the business

of -- bungalow is in the business of providing permanent places to live. they are very different. airbnb provides vacation travel and does it well but there is a big difference providing a place to live for three to five years and three to five days. emily: what about regulatory issues? how do city regulators feel about this? >> for us we're really helping increase inventory of long-term housing and so airbnb has really paved the way with sub letting is now explicitly provided for as long as it's greater than 30 days. our leases are generally four to 18 months. on average our renters are staying with us for close to a year in the initial lease. emily: you've been working on this for 18 months and already raised $64 million. that is a lot of money super fast. isn't it? >> you mentioned we work. but real estate is expensive and works really well when you know what you're doing. when you have an advantage and you can price things accurately you can build incredibly interesting products and services but it is not cheap.

every house open door costs $240,000. we do it well we get more than that back but fundamentally real estate can't be done for $10. it takes real money to change the world. emily: open door has been called a home flipper. basically you buy -- i know you don't love that term. you buy homes from home owners, fix them up, turn them around. what sort of trends are you seeing in the real estate market given what is happening with rates, the administration, the stock market? >> well, we see open doors live in 13 cities and basically adding one new city a month and next year probably two. by the end of next year we'll be in 50 plus cities. we see markets move differently in the united states. san francisco is very unique. the prices are four times the national average. the days on market for a house is one-fourth the national average. new york city is very different. overall at the very high end of the market which isn't main stream there has been a softening of million dollar, several million dollar homes. but in the main stream part of america people want places to live. they want to upgrade.

you know, they want to get an extra bedroom for their kid. they want to move to a better job. none of that has changed. the number of houses being exchanged, 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 likely to have appreciation across the board except at the top 1% of houses. but then if you talk about the 83% of houses, the median home in the united states is worth $234,000. even two distributions away from that is worth $500,000. as you think about those homes they're not -- there is more demand for them. you see in urban environments, there are more people that want to live in san francisco than supply of bedrooms. san francisco didn't build enough inventory. seattle went through this and decided to build but a lot of cities didn't. cities that didn't build and have high paying jobs have an

issue with how do you have all the people that want to live there? a little like the immigration debate. people should be able to live in any city they want in the united states and pursue the best career they can find for the most compensation and best mission that aligns with their values but 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 and that makes no sense. things like bungalow can help fix that. open door allows people to flexibley move whenever they want which is another part of moving to a better job, a better career, better environment. emily: andrew, what about the safety and security question? you're watching up roommates. have you to do back drops i presume. a lot of scary roommate stories out there. >> absolutely. a lot of scary roommate stories because people can't do the background checks so they don't have the same capabilities we as a company can provide so that is one of the things we think the most strongly about and as an organization we can provide that safety and trust you can't do if you're searching on craigslist for a

roommate on your own. emily: how can you confidently say you can do the background checks? we've seen uber and even lyft struggle to do background checks on their own drivers. >> we also are fundamentally doing reference checks, interviews, and helping roommates through the decision process so that it is not just background checks. emily: do you think trump and the rate issue is going to affect prices? >> obviously there are connections between real estate values and interest rates. most people buy other than the bay area for the mortgage. the effective cost is fundamentally driven by the interest rates and as interest rates go up mortgages are more expensive which means the purchasing power of a home owner declines. i think there is a fundamental connection there. that said everybody who lives in the united states needs a place to live and we're not adding supply fast enough in many cities so it causes appreciation where people can afford less which creates a mismatch. nobody knows exactly how it is going to play out. emily: andrew, what is the cost of the service?

you're paying for convenience, right? >> correct. but because we're helping individuals find great other individuals to live with and renting by the room it is 40% to 50% less than a studio apartment would less. emily: so talk to us then about how you're projecting the data of the people you're working with. >> sorry? emily: are there privacy issues? you are getting very personal with these people who are roommates and potential roommates. >> absolutely. we are keeping all of that information and privacy internally to our team and it is something we think very houghtfully about. emily: coming up how does twilio make a name for itself in the crowded cloud computing sector? we hear from c.e.o. jeff lawson next. ♪

it is a program by which china works with other countries. >> it's about the story of therise of china and the reality of the size of china's economy. >> in its simplest form china is looking to revive the roots of the ancient silk road with modern infrastructure. >> traditionally when we think about maritime silk law it might be westbound but given the increased relationship between asia and latin america it could be eastbound. >> the infrastructure sounds nice but if it doesn't generate a lot of business then it's not good infrastructure.

he said it very clearly. e are not going to build a garden in our back yard. we are interested in building beautiful garden with beautiful flowers which will be enjoyed by all of the nation in this world. emily: since going public in

2016 cloud computing software vendor tulio has been competitively growing its customer base in what is a very crowded market. in the most recent earnings report the company posted its second ever profitable quarter and had a rosie outlook. we talked to twilio's c.e.o. jeff lawson about the strategy going forward. >> there is nothing particular in this quarter. i think it's been a gradual process of building the company over the last 10 years that focuses on customer success. we have this amazing business model which is that we have the platform approach which puts developers first. developers bring twill yo into companies of every shape and size and use twilio to build all sorts of different types of interactions with their customers. we see this in industries from travel and hospitality and real estate to tech companies, old companies, new companies. verything you can imagine. with a useage based pricing model it starts small as investors experiment and then as they succeed we succeed. what you see in the platform business model is an efficient

way to acquire customers with developers at the lead of that and then this base pricing model that gives us a great expansion rate, the confluence of all that is what you see in the strength in our financial performance. emily: so your biggest customer, what do you help them do? >> when you sign up or install it on a new phone they send me a text message to confirm your identity. twilio is powering that. emily: what steps are you taking to engage with larger corporate clients? >> we are seeing software become an important part of every company's strategy. what it used to be you outsourced software that was not strategic, well now every company needs to be good at building software to differentiate themselves. they hire software developers and the developers bring in twilio. if you're a startup maybe you bring in twilio and that's enough but then there is more complex decision making going on so our sales team comes in. we get the ball rolling with twill eugene often build a prototype with very little

friction and maybe put it on the credit card but then our sales team will come in and help the initial prototype and idea the developers are working on turn into reality at scale inside a bigger enterprise. emily: twilio is involved with voter engagement. talk about the tools you're selling to politicians and lobbyists. >> we see use cases in politics. if you think about twilio and engagement it is about connecting people together. we've been really excited to partner with organizations connecting voters with their elected officials as one of the big areas where we've seen a lot of tracks. we announced an initiative a couple years ago now called voices for democracy and this is part of twilio.org. we said we have a very polarized world right now. we think what the world needs is people to connect with each other and in particular for representative democracy to work voters need to believe that their elected officials are listening and that is the most important communications that need to happen. direct constituents to representative communications. emily: we're seeing democracy

under threat, seeing state actors trying to meddle in u.s. elections. how do you make sure if you are the middle man those interactions are secure? >> we've been working with great organizations like the open gov foundation bringing a solution for how to talk to constituents straight into the u.s. house of representatives. and so what they're doing is actually working directly with the elected officials to power their communications but to use modern and there are now representatives in over 200 of the reps' offices where they say, look. text us if you want to talk. don't try to call us. the phone line is always busy. now you can text us and the 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 their voices so their voices are heard by their elected officials. emily: that was the twilio c.e.o. jeff lawson. that does it for this edition "the best of bloomberg technology." we'll bring you the latest in tech through the week. tune in every day 5:00 in l new

york. 2:00 p.m. in san francisco. bloomberg live is streaming live on twitter. check us out at technology and follow tictoc on twitter. this is bloomberg. ♪

>> emerging markets remain under pressure. argen tina faces judgment day. >> meantime turkey vows to refashion monetary policy after the slump in the lira and with inflation at its fastest pace in 15 years. >> trade trumps gulf. the president canceled a labor day round to work the phones. mexico says canada must be in a post nafta deal. >> china rebuffs criticism of its initiat