emily: welcome to "bloomberg technology." currentlychang sheltering in place in san francisco. up amidstd the nasdaq a stream of dismal data but a rising belief the economy may reopen sooner than expected. we are currently waiting now for the president tsai code daily briefing at the white house. the president tweeting earlier today, calling on liberating the

states, and even some states already taking measures, minnesota and texas, to ease restrictions. what thisget a lay of meanings for the tech economy. joining us now, our own tom giles, our editor in san francisco. the president is planning a phasing reopening of the economy but this depends on what governors want to do. for states like california and washington, what does that mean? the thing that you have to remember about the big tech companies in those two states is that in terms of keeping operations going, in terms of employees showing up to work, getting, working on their projects, delivering software we've seen companies in these

states have been performing fairly well. engineer working at google, if you are in the main office at amazon, those people are able to do their jobs by and large from home. there hasn't been the same kind of disruption. as you get into the physical space with the people who are in amazon warehouses, doing the deliveries, the people who are working apple stores, that is where you see it hit a lot harder. in the sense of people who are out in the physical economy, work, asget back to you kind of get the economy going, that is going to make a real difference for people like apple. tom, youy: in the meantime,

are in san francisco. officials are going to require folks to where face masks when they go out in public. this is certainly a rapidly evolving situation. through company by company. you have a company like google, facebook, based in the bay area, that depend on advertising. google says they are going to slow hiring. we wonder what facebook is going to do. if a company as healthy as google is making tough decisions, we can assume things are going to be tight even for the healthiest companies in the world. what are you looking for when it comes to corporate earnings? tom: google and facebook are a great example of companies that have a big impact when it comes to advertising

revenue. you are seeing a lot of people using google, using facebook to stay in touch, to communicate with each other. on the other hand, the businesses that advertise -- and remember, advertising is the lions share of these companies' revenue base -- we've been reporting on how company after theiry is really slashing marketing budget, their advertising budget, and that hurts google and facebook. on the one hand, you've seen this surge in demand from google and facebook, especially as concerns of delivery of information and news and helping people stay in touch with each other, which we all desperately want when we are sheltering in place. on the other hand, businesses aren't advertising. that is going to hurt their

revenue. we are going to be looking at the revenue and the advertising. giles all right, tom digging deep there. we are going to be covering tech earnings as they roll out over the next few weeks, from facebook to google and amazon and apple. we are going to bring you my exclusive conversation with kevin. he has been doing detailed modeling of the coronavirus outbreak and he's launching a new website that focuses on u.s. infections. we will be right back. this is bloomberg. "bloomberg technology ♪

instagram,ing now to

whose growth has soared over the last several years. kevin systrom sold the company to facebook in 2012 for $1 billion. now he's on to his next act. modeling the coronavirus. today he launched a new website that will update u.s. infection rates live. listen to my exclusive conversation with kevin systrom earlier today. kevin: the whole idea is that there's this number called the effective reproduction rate. it means how many people get infected per person who is currently infected. one,at number is less than infections are under control. over one, it is out of control. we are trying to take a complex topic and boil it down to a simple number. that is our hope, to make it simple for everyone.

emily: instagram's growth was the epitome of viral in the online sense. what are you applying that you learned from instagram? modeles that apply to the that we are seeing? this website is simply , if i cantionization call it that, of a notebook and a model that i published. you can access it without having to press refresh every day on the model. the viral growth that isolate instagram compares to the science of viral growth in general. they use similar math. , you can come to some really interesting conclusions.

emily: how much worse is this going to get, and how much worse will it get before it gets better? kevin: here's the really interesting part about that question. you can't answer that question in general. you will try to find a broad summary at the highest level across a region or a country, but it turns out that this virus is very local. louisiana may be doing far better than massachusetts, might be doing better than maine. you have to ask what is happening locally. we are basically breaking that down on a state level so you can see what is happening around you. i can't answer specifically, but what i can do is give you effective radar and see how it is going currently. emily: you do get really granular state-by-state.

let's take new york and california. states,ook at those two which have had vastly different kinds of outbreaks and different responses, what do you see? kevin: what is super interesting is that, number one, they've gone through a transformation in lockdown. like used to be something two or three, meaning for every person that got sick, they would make two or three other people sick. and after the lockdown, you see the number come down. it comes down as we begin to social distance, stop going to school, stop going to the workplace, start wearing masks. the r number comes down. but what is super interesting we as we become more lax, as

begin to open certain sectors of the economy, what happens to that number? i think that is why this is so important. it gives you a live insight into the effects of the choices we all make. i don't know exactly what is going to happen, but i will be watching just as closely as you. emily: you correctly predicted that the u.s. would have 10,000 cases by march 19. you also point out you are not an epidemiologist. who have you shown this to? how have they responded? has anyone from the white house reached out? kevin: i have sent it out broadly because i hope people take the concepts largely into the work they are doing. not necessarily the conclusions i'm making. is specifict i run on the data i'm using. but the idea that we can manage

our country or a state on this idea, basically that is the thing i want people to understand. if you watched governor cuomo yesterday, he got deep into the thatof this and the idea we can watch and as new york starts to open up again, it can be that gauge that allows us to decide what to do. angela merkel spent all of yesterday talking about the effective reproduction numbers. vernacularto build a around this concept. i truly believe this is the most effective way to manage coming out of this lockdown. balancee are trying to

economic prosperity with public safety. president trump outlining plans to reopen the economy. nowrs say we need this because the economic impact has been so dire. if you could say one thing to president trump, what would that be? kevin: that it is customized. you have to look locally and give power to local governments. if you look what he and his team realizee, they said, we this infection and this virus is a local epidemic as much as a global pandemic, and all of us have varying needs and varying levels of infection. so to give one medicine to every patient doesn't make sense. givewe need to do is customized guidelines and a framework to each local government and allow them to

follow the best practices. emily: is there something that scares you most about this in terms of people feeling or not being concerned enough? kevin: at the beginning i felt strongly that people weren't concerned enough, and very quickly after california shut down, all the other states started following suit. that doesn't mean we are out of the woods. the concern i have now is that people think we are past the peak. and all the models that we read are just as complicated, if not more complicated than mine. and no one really understands where we are. so instead of trying to predict the future, what we are trying to do is understand where we currently are. because the second we start opening up, it might go up, but

it might not. depending on where you live, it could go a bunch of different directions. the most important thing we can do is effectively have this radar to know where we are headed. that is what we are trying to do. kevin systrom, cofounder of instagram, more of that conversation coming later in the show. we talked about what he things of instagram today, how he thinks facebook is handling the coronavirus crisis, as well as his relationship with mark zuckerberg. some companies have found a way to conserve cash while keeping employees happy. this is bloomberg. ♪

emily: as the tech industry reels and uncertainty mounts, some startups have found ways to conserve cash and keep employees happy. that comes with offering stock instead of an increase in salary. joining us now to discuss, shelley, who has been looking into this. you profile a gaming startup where activity is actually booming because we are shot in, but even these employees have had to take pay cuts and they are getting offered equity instead. tell us more. this is one of the companies that has been doing well during the coronavirus outbreak as people are gaining more. they were in the middle of raising funding and they said, we don't know when that is ever going to happen, because funding

is likely to dry up and people are worried about the risk out there. the cofounder that i spoke to said, we need to conserve cash. the way they did that was, they asked everybody if they wanted to take a pay cut and in return stock units. emily: tell us a little more about how broadly you anticipate this will be. we are hearing from investors, from operators that the advice that is being given is, if you have to make cuts, do it now and cut deeper than you think you will need to cut. do you think that we are going to see a lot more companies employing this strategy? there is not a day that has

gone by that a startup has not come out with layoffs. that is certainly the easiest, fastest, and most direct way to conserve cash. wey are trying to say, believe in our business. let's see if we can offer them future earnings by cutting back their salary now. as they are alluding to, it is a big if. they are like, if everything goes well -- what if everything doesn't go well? emily: of course there is a big downside. if these companies don't do well, as most startups don't do as well as they might expect,

then what happens? whove got even more people are out on the sidewalk. >> exactly right. you are basically saying, take less pay and hope for the best. this only works for an employee who believes in the company and the future. company that has done well and is growing users quickly, it makes sense. , it might not bode as well. but there are those that i spoke to that said, try cutting your rent, try cutting back on contracts and software. really -- in this kind of environment, the thinking goes, you don't need to persuade people, but if they have a job

and they are getting a paycheck, these days it is a pretty good deal. emily: shelley, you moved back to the u.s. after covering the chinese for a really long time. how are they coming out of this outbreak? what does the tech economy look like? is it significantly weaker or not? >> i think it is varied across different ecosystems. funding has evaporated. while it is holding steady in the u.s., spending for new companies in china, raising funding has also really dropped. that tells you about the pipeline that is coming out. , some ofig companies them have been able to expand their reach and consolidate their power. companya food delivery really expand its customer base.

restaurants were shut down. these people still kept going. i expect the same thing to happen. when you see companies like amazon that seem to be gaining exactly whatis happens with alibaba and tencent and the bigger companies. that: is there anything silicon valley can learn from chinese tech and how they have weathered this? think a really interesting thing that we are seeing in the u.s. is that the chinese tech rose tos definitely this idea that everybody is reliant on us right now. , workplace,ncing

cloud services, those things help all sorts of companies stay alive. we are seeing some of that happen in the u.s. as well. , continueis idea of to provide things, will use this as an opportunity to show new customers what you do have to offer, and maybe they will stick with you. right, shelley reporting for us, thanks for bringing those insights there. coming up, more of my exclusive conversation with instagram co-founder kevin systrom. he has been tracking the coronavirus outbreak especially across the united states. we also got his thoughts on instagram today. how the company and facebook are battling the virus on their site , as well as his relationship with mark zuckerberg. also, we will take you to the

white house. we are monitoring the white house press briefing scheduled to start at the top of the hour. we will have headlines on the bloomberg as that begins. we will be right back. this is bloomberg. ♪

emily: welcome back to bloomberg technology. we turn now to my exclusive conversation with instagram cofounder and former ceo kevin systrom who left the company abruptly in 2018. we talk about the state of his relationship with mark zuckerberg. we talk about why he has not posted on instagram in almost two years. we also talk about why he believes -- how he believes facebook is handling this information about the coronavirus and more. kevin: knowing the people that work there, i think everyone has the best of intentions. and, if you could have planned for this and created a contingency plan for a global

pandemic that would shut the business down, i think that would have been great. let's be honest, very few businesses, if any, did. what we are seeing now are the effects of effectively a very rare event. i don't put the blame or onus on anyone of these tech companies for not having seen this because it is such a rare event. the question is how you respond to it. i think what you are beginning marke is that leaders like and others have stepped up. not only are they going live with doctors from the cdc, they are trying to get the word out. they are setting great examples for employees by keeping them home at this time. while it is challenging and the response has been variable, i think they are doing their best and we will see they continue to do that going forward. emily: that said, you left facebook in 2018 and i think it was pretty clear back that that

you are not pleased with how mark zuckerberg was running things. zooming out a little bit, misinformation is one thing. redirecting folks from instagram back to facebook. what are your biggest concerns about instagram's future right now? this is your baby, this is your creation. kevin: first, i will say the team that runs it now, i think they have been doing their best to grow what is a fantastic platform. you are right, it is my baby. mike, by cofounder, feels the same way. but how proudly we feel when we go on instagram during a crisis like this and you see people that are not able to connect physically and connecting digitally. you look at john krasinski's "some good news." the way he is sharing positive news through all of this through his followers and fans. you see people, artists going live whether it is djs or musicians, and serenading their

fans in a moment of darkness. the creativity that comes out online on a platform like instagram is really inspiring. whether i run it or not is a complete lease separate question, but i am very proud of him as a parent from a far seeing what the platform has become. emily: my colleague sarah frier came out with a book about instagram called "no filter." he conclusion is that facebook is under investing in instagram specific problems. i wonder if you agree with that. so, does that concern you about whether instagram's growth will falter? instagram for investors is one of the great hopes of facebook's overall growth. should they be concerned that instagram will grow -- won't grow like it did? kevin: i have not read the book. i did live the history. i saw places where i thought we invested appropriately and places where i wish we invested more.

but the truth of it is we grew the platforms over one billion people and you don't do that with nobody. you don't do that with no resources. knowbeing said, i don't what's happening on the inside. for me to speculate what investment have or have not been made is very difficult to do from the outside. but, if i were in charge of facebook and i saw something like instagram, i'd obviously invest in a lot into it to make sure that it becomes another pillar of the many products that we have as a company. i think that is the logical argument to make and the logical thing to do and i think mark is a very logical person. and hopefully he is following that. emily: have you had any contact with him since you left? what is your relationship like? kevin: we have seen each other a handful of times. it is amicable, i think. the most important thing to keep in mind is silicon valley is a very small place.

we are all very young. i'm 36. my career does not end last year or the year before. we're going to be around for a while and we will be crossing paths. i think it is really important to keep that in mind as you build relationships going forward. emily: that said -- i know we don't want to get into the policy changes, but you have not used instagram since may of 2018. kevin: no, that is not true at all. emily: why not? kevin: posting is very different than using. it is the first thing i check when i get up in the morning. i wouldn't know about the examples i just gave you about instagram being used if i did not check it incessantly. emily: you have not posted -- i should rephrase. kevin: to be fair, over the last two weeks, i have posted a bunch of my story about the work i've been doing with modeling. part of this is a personal choice of deciding when you leave something, leave quietly and have some introspective time on what matters to you.

and, part of it is just wanting some privacy every now and then. but, when i have something to say and something to share, i get really excited and that is why i have been posting a lot about the work i have been doing recently. i think you will see that with it live. i will be posting charts and updates and using instagram, what it is meant for, to give people a visual voice. emily: how is the pandemic changed your plans for what's next? your next act as an entrepreneur. kevin: i think a lot about this question, mostly because i think everyone likes the plan life out. they like to have their one, three, or five year plan. or people like me that like to do that. and, you never really know what curveballs are going to get thrown and how you are going to react. i don't know how this parlays into the next chapter, but what

i do know is the technology i am using, whether it is machine learning or just general data science will inform anything that i do in the future. the only reason i got into this in the first place was because i had a passion for data science and machine learning, and i wanted to apply that to problems that matter to people. i think that is what we have done with rt dot live. i don't expect rt.live to become a company. i don't excited to be the ceo of it, but i wanted to have the resource people could go to to see what was happening in their communities in real-time. i feel like my talents or my skills were just best used in that way in this moment. i hope it was for the better. emily: more broadly, google has announced hiring slowdowns for the rest of the year. it is clear the economy is going to take a massive hit from this. do you think there's going to be a big impact on the silicon asley and tick economy, even

a company historically healthy like google is making these tough decisions? kevin: google, remember, lived through the global financial crisis. i was there. i worked there. i saw everything from hiring freezes -- i was working on the corporate development team. the free snacks started to be different. as much as i joke, they took it very seriously at the time and i think they learned a bunch. i think companies that have not gone through this type of thing, this type of disruption economically -- emily: many startups. kevin: many startups are learning for the first time. what a super interesting is we actually have a bunch of leaders that have gone through this before and i think they are posting about their lessons having lived through a crisis like this before. hopefully, young leaders were starting companies today will avoid those mistakes. there is no way any company can avoid the issues that we are having right now. it turns out everyone who buys advertisement runs a normal

business that sells things to normal consumers. and if you have advertising, you can't escape the cycle of the lack of income and lack of jobs and lack of spending that will eventually influence advertising spending. some will come out more ahead than others depending on how useful the advertising they provide is. but, you know, that remains to be seen. i guess we will have to see. emily: is that going to be tough on google, facebook and instagram? these are advertising driven businesses. kevin: there is a short run and then there is the long run. in the short term, of course it's got to be painful in terms of revenue. but, these companies make a fair amount of -- they have tons of cash lying around. this is not like these companies are going to go bankrupt tomorrow and you won't see them again. that is not true for all companies, but the ones you are asking about specifically have

an enormous stockpile of cash. i think they will weather the storm. in the long run, hopefully this kind of pressure makes all of these companies better because they have to deliver even more on the promise, the promise that they give effective advertising to businesses. again, i think we will have to see. emily: my exclusive interview with kevin systrom, the cofounder and former ceo of instagram. coming up, we are talking about online talk therapy appeared all the shelter-in-place and some people feeling really isolated. we will talk to the founder and ceo of talk space, a company trying to help, coming up. this is bloomberg. ♪

toll that quarantines, social distancing can be immense and that everyone is able to get out or afford the therapy they need. there has been a growing surge in online therapy. one company working on this is talkspace. joining us now is the cofounder, head of clinical services, ronnie frank. it is your husband who is the ceo. thank you so much for joining us. talk to us about the kind of activity you have seen. have you seen a surge in activity on the site and how so? roni: hi, and thank you for having me. i'd like to share first what you see on the platform in the last few weeks as a quick overview as we are dealing with is global devastating pandemic. anxiety and fear have heightened dramatically in the last few weeks. at talkspace, we have seen a

spike of 65% in demand. we also see a spike in supply. we are getting five times more therapies a day. as a result, they are looking for a remote care solution. , over 5000 of them share they have never seen such an overwhelming level of anxiety and fear before. and it is getting worse almost by the day. in terms of what our clients are dealing with right now, many of our clients are extremely anxious about losing their job or they already lost their job. financial insecurity causes significant distress and leads to severe anxiety symptoms. that is a big topic therapists see in loneliness. in the u.s., 37 -- 35 million people live alone so naturally

locked out and social distancing leads not only to isolation and depression, but there's also a lot of fear about what's going to happen to me if i get sick and no one can help me? we also see a lot of people either they or their loved ones -- hello? emily: yes, roni, i can still hear you. michael phelps, some of our viewers might be familiar with your commercials. michael phelps is actually one of your spokespeople. when you talk about the surge in activities, is there any particular kind of person who is utilizing the services more? i know initially you saw women using the service more. the leader of this space, we are doubling down on our mission and we are offering additional mental health services. we have launched health care workers on the front line

because we started seeing the spike in health care professionals who need help and are dealing with so much burnout and pain during this time. we are donating thousands of masks for those medical workers across the country, as they desperately need emotional support. michael phelps is our partner and joined this program as well and added 500 additional months of free therapy. our therapists are joining with 300 months of donation that are met by the company. it is a beautiful thing to see how everyone is stepping up and contributing to the greater good. we are also offering free support on facebook -- emily: roni, it is such an important issue and i am so glad to hear about all the work you are doing because even some folks who don't have mental health issues normally are

probably are going a little crazy right now. do you think this could be the moment for telehealth? obviously, it can be a difficult proposition. some people can't afford it. do you think this is the moment these kinds of services take off and last beyond the pandemic? roni: as people are turning to remote care solutions because private practices are shut down, they are realizing the advantages of digital mental health. they see that not only is it safe, but it is also more affordable, more convenient. and at the same time, they are receiving quality care. it makes no sense for people to go back to expensive, inconvenient, traditional services. that is why this is a game changer for telehealth. it's changing consumer behavior forever. frank, cofounder of talkspace. thank you so much for joining us

and sharing your story with us. coming up, we will talk about the challenges of hiring in the covid-19 era. we're seeing layoffs after layoffs, hiring freezes we will be speaking with jenna rich of rich talent group who has some experience with this. we will be right back. this is bloomberg. ♪

emily: unemployment lines are long even in this age of social distancing. 22 million americans filing for unemployment in just the last four weeks. that is a decade worth of job

growth gone. joining us is rich talent group founder jana rich who has been working in silicon valley in recruiting and hiring for a very long time. i am so glad to have you with us. i want to start with google which has not instituted an official hiring freeze, per se, but they have said they are slowly hiring now through the end of the year. how significant is it that a company as healthy as google is even having these kinds of issues? jana: thank you for having me. it is a pleasure to be here. what i would say is somewhat surprising that you look at google and look at it as a very diversified and healthy company, who seemingly is one of those in position to do well in a. period of time like this. at least what i heard is some of the slowdown in hiring is there concern about onboarding people. it is interesting here that part of the attribution was because of that.

other companies have certainly embraced the idea that we are going to hire, we are going to bring people on remotely. it is interesting, i think google has expressed some concern that they will slow down hiring partially because of that fact. emily: so, then, how much more broadly do you think we are going to see layoffs and hiring freezes across silicon valley? it seems like almost everybody has been told to tighten their that and to make cuts now might be deeper than you need to make so you don't have to do this more than once. is a good question. i certainly don't think, to be honest, we have seen the end of this yet, unfortunately. i do think there's a lot of companies that are still doing scenario planning. it does not mean to say they have not cut deeply enough. they may not have cut yet. there are definitely companies that have looked at what are the next couple of months going to be like? i agree with you.

i think they will make tough decisions, potentially deeper cuts so they don't have to do numerous different downsizing, but i don't think we have seen them all yet. i think there is a lot that have already done so but there is still going to be in that boat. emily: so you have facebook and google that are probably going to be suffering from some kind of ad slump. you got tim cook saying apple will bounce back just like they did in the 1990's. you've got amazon struggling with warehouse issues and getting people the things they need. i'm curious if you see any bright spot. where do you see hiring happen? even companies that have been doing well like zoom video, blue apron -- you are seeing some of these companies pull back as we talk about reopening the economy and folks think maybe folks will not be using those as much now. jana: i think this a lot of different areas where there is some interesting and maybe even slightly unexpected growth. i will give you a couple of

examples, one of which is gaming. you are finding that a lot of people are engaging with gaming companies in deeper, broader, more frequent ways they had in the past. you have even seen certain gaming companies starting to morph their model. there is a gaming company down in l.a. called wave. throwingll around virtual concerts. they are moving into a home arena which is very exciting. this whole concept that you have the artist and studio somewhere where the sound quality is magnificent, but the audience is actually virtual. i think gaming is one space where there is some interesting moves that are happening. the other which i don't think has been spoken about a lot, but it is very large legacy companies need to be even stronger in the digital delivery of their service operators. so, working with one very large ppg company. one very large financial services company.

both of them saying we need to have a digital reporting directly to the ceo who is going to help us transform our business is really quickly to be able to adjust to a world in which so much more is remote than before. gone throughu've the hiring and recruiting process in a financial crisis, through the dot com bust, through 9/11. how do you think this will compare? two downturns i have seen, the difference in both of those from my perspective and it is a pretty big one is there was never an issue of people's personal, physical health and safety. so, it comes with a whole different level of, i don't know, seriousness, severity, concern. i also think this is extremely broad-based. i think it hits almost all industry segments, realistically.

whereas, the dot com bust was almost exactly how the title implies. it was heavily weighted towards tech. in 2008, the downturn was least impacted by tech and everywhere else more so. this one truly will be across the board. i do think this will be more serious than the two other downturns that have happened in the last 20 years. emily: all right, jana rich. really appreciate you joining us, obviously so much going on. jana rich, founder of rich talent group, with some fascinating insight across silicon valley. we are still standing by for the white house briefing to begin. you can check out the bloomberg for headlines from that. you can watch it on live . expect you details on the president's reopening plans, what that might mean state-by-state. he was earlier saying states needed to be liberated to do as they wish that they reopened.

we are already seeing states like texas and minnesota starting to ease their restrictions. looking at a live look at the podium there. tune into the bloomberg if you want to watch. this is bloomberg, and that is it for bloomberg technology. i'm emily chang. ♪

david: as the economy slips towards the abyss, people start plans to bring it back. this is bloomberg wall street week. i'm david westin. welcome back. ♪ david: it was a week of waiting. waiting to find out whether the virus is finally on its way out. waiting for economic numbers that we knew were bad and would only get worse. but at the same time, it was a week of hope as the number of hospitalizations in some places started to go down. and, we begin to understand just how much help is being given to the u.s.