♪ emily: welcome to "bloomberg technology." i'm emily chang in san francisco. over the next half-hour, we will look back at some of our biggest interviews in this unprecedented year, 2020. while a global pandemic created tidal waves of uncertainty, the tech sector seems to do what it does best -- adapt. we begin with the tech companies that made it to the public in 2020. while the covid-19 endemic slams

the ipo window shut at first, momentum shifted and brought a flurry of public debuts by fall. >> we started assembling our institutional ownership a little over a year ago, so this is not something in the last couple of weeks. we had people buy into it in the january, february timeframe. >> if you are playing the long game and build a durable, sustainable company, it's not about the first day are first few days of trading. it's about quarter after quarter of deliveries so you can deliver on shareholder value and go after the market. >> we were very focused, especially in the past four months and understanding what's happening during covid, whatever is happening with the ipo on the first day of trading.

and we did the models to get j fog to the right price. from that point on, we did what we. emily: could to publicize the price. the coronavirus brought the travel industry to a standstill but airbnb rebounded as traveler slowly got back on the road to destinations closer to home. here's my chat with the ceo and cofounder of airbnb. brian: i feel really lucky. sometimes in life, you appreciate something when you can see losing it. if i didn't appreciate it before this year, having stared into what felt like the abyss for travel, and then to rally together with thousands of people and rebuild the company from the ground up, something i think that is stronger than it ever was before the pandemic, i feel incredibly fortunate and thankful not just for our

employees, but for our guests and hose that built this company for us. this is very humbling for me. emily: you say the company may be stronger than ever. why go public when we are still in the middle of this pandemic nightmare? why not wait until there is a vaccine or more clarity? brian: we were prepared to go public this year and when the pandemic broke out, we put the s one on hold and i could never imagine going public this year when it was april or may. then something pretty remarkable happened. people, this summer, after having been locked in their homes, sheltering in place, wanted to be outside. but they didn't want to travel far, so they started getting in their cars and staying at airbnb's. then it became clear that this business model is incredibly resilient and our hosts can

adjust to any travel behaviors. at that point, we thought we had a shot this year. this is our opportunity to bring shareholders into this company as the new travel season will be upon us and people who understand how resilient and unique this company is. i'm excited we can bring hosts and shareholders and as well. emily: we just got indication on your opening price -- shares opening at $139 a share, more than double what you priced at. are you at all concerned about froth? what do you think of that number and the potential you are leaving billions of dollars on the table? brian: that is the first time i've heard that number. in april, we raised money with the debt financing. that price would have priced us around $30. so i'd don't know what else to say. that -- i'm very humbled by it.

we know we are on a very long journey and we are going to be very, very focused -- today is a special day for everyone, but the higher the stock price, the higher expectation, the harder we will be working. emily: there are lockdowns, reopenings and lockdowns happening around the world. how is the fourth quarter shaping up for you? what are you preparing for as the covid outbreak surges? brian: the most important thing is health and safety. we have had to make difficult decisions. in april, we decided to give refunds to more than a billion dollars worth of customer deposits when people told us they could not travel. this was difficult for our hosts. even though we are burning a lot of money, we took $250 million on our balance sheet when we

didn't think we could raise money back then and give it to our hosts. we are going to make that our gold standard. we work with the former surgeon general of the united states and enhanced cleaning protocols and we are trying to work with every city and government as best we can to make sure that when people travel, it is responsible. emily: that was the airbnb ceo, brian chesky. during the lockdown, doordash saw orders surge. we talked to the ceo about their public debut. tony: it's a testament to the hard work of all the people inside the walls at doordash as well as the partnership with their ecosystem, everyone outside of our four walls for the past seven years as well as a reflection of the confidence that investors have about our future. emily: given that you are valued at $16 billion back in june, what is your case to investors that you are now worthwhile more than double that, especially out of the pandemic?

tony: i think the opportunity is so early and i've been focused on chasing customers and excellence versus chasing the scoreboard. the public company now, i think many investors, frankly any investor can have their turn at valuing the company. but what we saw in terms of strong demand during the ipo process was both a testament to the strong underlying business we built as well as an appreciation for what it can become in the future. when you think about doordash, one of the goals is building the marketplace where we are bringing anything in your city to you in minutes or hours, not days. we want to take the products we built for our marketplace and give them to merchants in the form of ordering and logistics so they can build it into a technology solution like we have so they can serve their own customers and compete in today's

convenience economy. emily: you own 50% of the market but you face rapidly changing competition, consolidating competition. what are you doing differently than your peers? why are you seeing this outsized growth? tony: our growth comes from the fact that we always obsess over building a superior product. that can be revealed and a lot of the metrics that are available and studied by analysts. for us, it is offering consumers an unmatched combination of the selection of restaurants we bring, the quality of the delivery experience as well as the affordability that has allowed us to grow from our existing customers. for having the ability to invest and reinvest as well as building new products, as well as new geographies. it starts as having built a superior product.

that has allowed us to build a massive scale advantage, which is key in a network based business like logistics. finally, we have achieved superior unity economics in getting waste out of the system as well as winning parts of the industry such as the suburbs, which are not owing the biggest part of the industry and fastest growing part, but also the most profitable part of the industry. emily: you definitely colonized the suburbs early on. if you have 50% of the market now, what will your market share be in a year or five years? tony: we don't chase market share, we chase excellence and we chase the customer. we have a lot of work to do. today, we are privileged to serve 390,000 merchants every month.

those statistics are averages. they are not distributed uniformly. there should be neighborhoods where we should offer more selection, get faster, be more affordable. so we have a long ways to go. for me, it's been making sure and reminding our teams that if we can master the inputs, then the score will take care of itself. emily: that was the ceo and cofounder of doordash. coming up, bill gurley has always been a vocal proponent of going public sooner rather than later. this bite the spike in recent offerings, he believes the ipo process is broken. he will tell us why, next. this is bloomberg. ♪

♪ emily: venture capitalist bill gurley spent years as an analyst on wall street before becoming a tech investor. the benchmark capital partner has backed companies ranging from uber to stitch fitch and has opinions that silicon valley is getting a lot wrong when it comes to ipo's. its shares spiked 100%. did the company leave too much money on the table? bill: the process we used to go public, if people spent the time to understand how it actually works, is the equivalent of using a paper map to do a 4 hour drive today. there's a much more elegant technology-enabled approach. because of conflicts of interest and because there's a lot of

money involved, there's a lot of people who want the broken process to exist and continue. unfortunately, it is getting worse. last year in the year before, there were about 6 billion dollars in underpricing across all of venture backed companies. jay ritter at the university of florida aggregates this data. snowflake alone was $4.5 billion. just one company. the day after the ipo, the people who are allocated the stock had $4.5 billion in wealth they did not have before and that money did not just come out of nowhere. unfortunately, the process is getting worse. we have a wonderful new age alternative called the direct listing that just matches supply and demand. now we are getting some momentum around that, but it is really night and day. it's a paper map compared to using ways.

emily: i know you are considering alternatives and some investors have been disappointed and palantir's. how should they consider the alternatives? bill: i'm a firm believer that once you get out and are public, how you got out there leaves no lingering effect. i will give you a list -- amazon, square, proof point, salesforce, netflix, peloton -- guess what they have in common? they traded below their ipo price. in the long run, how you perform as a public company is all about your long-term cash flow generation and how you doing your market. it is not how you went out. i just don't buy there's any legacy from how you went out the door. lyft went out as a traditional ipo. emily: how much have they lost

waiting this long? bill: there's a small set of people that happen to be people i highly respect. on the public side, it's rich barton and reed hastings. toby at shopper five. if you do google searches, they all say the exact same thing, which is companies are too afraid to go public and there are massive benefits to being first in category being public, having control of the narrative with the buy side. there was a long blog post on this that you can read. but there were voices in silicon valley five or 10 years ago raising late stage funds and wanted to pick off the investments before they got

public that started this stay private longer thing. but i like the analogy of football which is -- if there was some college quarterback that was in the top 50 list of the draft that held a press conference and said i don't think i'm going to go into the nfl yet because i'm really afraid of scrutiny and they track every single stat and i don't want to be that short term oriented. if someone did that, they would fall immediately. but that's the behavior of some of the founders in silicon valley that buy into this stay private ink. the minute you start giving stock to your employees, you are in the game and your job is to maximize shareholder value for investors and employees. if you don't want to keep raising your game, sell your company or consider hiring a ceo

that is. that's my point of view. emily: that was bill gurley, benchmark capital general partner. coming up, spac's became all the rage as an alternative to the traditional ipo. we will talk to one of the non-traditionalist, the cofounder of open-door, next. this is bloomberg. ♪ - i sent your new prescription to the pharmacy. - any idea how much it will cost? - you have a choice. insurance or goodrx. - i have insurance. - insurance is not what it used to be.

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>> we think it continues as long as the return holds up. we expect it should be a good year for issuance. put it on the map. emily: that was kathleen smith with her look on the public markets for 2021. meantimetime, a new favorite financial structure, special purpose acquisition companies -- they are billed as a shorter and more predicable route than traditional ipo's. among the companies that opted for a spac, the online real

estate company, open-door. the cofounder and general fund.r at foudnernders keith: there's a premium on speed right now. there's a lot of perception that post election, the volatility in the markets. who knows what the driver is, whether it's health care, elections, policy changes -- many companies that are ready to be public companies are focused on time to market. there are advantages to being a public company. i'm a big fan of being public early. i wrote a book that explains the benefits and many ceos are recognizing that there are significant benefits in terms of transparency, accountability, and access to capital in being a public company. emily: how are you advising companies to do this?

keith: to me, as soon as a company passes $50 million in revenue and has predictability and visibility with high growth upside, it should be a public company. emily: the process is shorter, there's not as much due diligence. how do investors know whether they should take a risk on these companies? do they bet on the jockey or the horse? keith: i disagree there's less diligence. i don't think that's actually true. i think there is just as much diligence. there are some subtle differences and we can talk about those but i don't think the quality or standard or bar is any different. emily: what about the direct listing route? peter thiel, one of the cofounders of palantir, some investors have been frustrated by the process and the returns thus far. do you think they made the right

choice? keith: basically, everything from a traditional ipo to a spac -- there are different tools for different companies with different needs. some companies need to raise a lot of capital. some companies are profitable and don't need it and a direct listing makes more sense. some have premiums on speed or want to guide more constructively one or two years out and a stock may make much more sense for that type of company. all of these are legitimate options. andreessen horowitz published an interesting blog choice the explains the choices -- each board of directors should evaluate them carefully. emily: there's been concern about the governance and how much control peter thiel has retained. is that something investors should be concerned about? keith: without speaking

specifically about anyone company because special rights have been applied to a vast preponderance of companies, i personally don't believe in special voting. i think it should be one chair, one vote for stop but that has nothing to do with palantir. emily: we have a big presidential election coming up, a lot of potential volatility ahead in the middle of this pandemic. airbnb is a company and a long time ago they look to going public in december. is there a risk given the ipo window has been open for the last few weeks? a lot of these tech ipos have done well. is december too late? keith: i can't speak to specific companies like airbnb or

companies i may be a shareholder in. but postelection is more treacherous for any company that wants to go public and public companies may see more choppiness and volatility in the market. if biden is the next president, they will surely raise capital gains tax rates. so the return may be very different. i would expect a selloff in public equities at the end of 2020 if the democrats win. certainly the presidency and the senate, we are definitely in for a tax increase. emily: the debate about politics and business has been continuing in silicon valley and you don't shy away from any debates. armstrong banning political activism at work and 60

employees are leaving the company. we've seen various ceos take a stand on both sides. jack dorsey come your former colleague says brian armstrong will be on the wrong side of history. what do you think? keith: i think you will be on the right side of history. you saw the data today that even with a very generous offer of six months of basically free money, only 5% of the workforce decided to take the free money. the trouble at work is created by a very small minority of employees and companies have been too afraid to crack down on a small fraction of people. but it is showing the high watermark of employee activism. facebook has been stringent. a couple of years ago, mark and cheryl decided to say there's limits to what you can do it facebook and if you don't like it, there are plenty of other

jobs in the world and i think more companies need to do that. emily: that does it for this edition of "bloomberg technology." stay with us. "studio 1.0" is up next. i'm emily chang. this is bloomberg. ♪

♪ emily: he grew up in stockholm, sweden playing guitar, sideelling websites as a hustle. by age 23, he was ready to retire. instead, he married his two passions, tech and music, launching spotify in 2008. a decade later, spotify went public and now accounts for 286 million users playing some 50 million tracks around the world.