rhetoric.nd divisive i think all of the republicans are having that rhetoric. that is not something that i .hink iowans like i will stay with the democrats, i am pretty proud of them. ms. tumulty: is there anything yourere wishing you heard candidates talking about more than they are? ms. mcguire: i do not think so. they have been really good about reaching iowans, especially local issues. an education veto that the governor did. they have been very good about including that in their talking .oints i think they are really listening. that is really important in iowa . we want them to listen to what we are saying. athink they have been in iowa

lot. i think they have been very happy about what they have done. the next 78rd to days and monday, february 1 to get our caucus going. ar there any. kapur specific issue that the democrats have catapulted t conversation?he how do you think the primary would be different if i were was not leading? ms. mcguire: we are having a lot of talk about income inequality. with equal pay for equal work. issues of fairness are in this election. mcguiren: dr. andy joining us from iowa as the countdown to the iowa caucus

continues. thank you for your time. ms. mcguire: thank you. >> john hinckley was the person president reagan. president reagan was not wearing a bulletproof vest that day. it was a short trip from the white house. "q&a," robert feynman on the book, "assassinations, threats, and .he american presidency >> there have been 16 presidents who faced assassination threats, .hough none eyeballed eyeball i talk about huey long who was assassinated. i talk about robert kennedy who was assassinated.

and, george wallace who was shot and paralyzed for life. i cover candidates, as well as presidents. it is a long list. >> tonight on c-span's "q&a." >> earlier this year, the h, held itsch crunc annual conference in san francisco. this portion of the event included a father-son venture capitalist team, and a drone expert. two hours. >> here i am. dancing monkey. thank you so much. mainuys are two of the guys. thank you for coming here to

talk with me. topher, thank you for coming here to talk with me and share what ever you are going to share with the audience. >> pleasure. >> i know there are some things you like to talk about but i would like to start with something else. >> you usually do want to talk about something else. and'm a venture capitalist it's not an easy job but it's also not the hardest i've ever had in terms of stress but a lot of these i see out there really seem like they have martyred themselves. knownare fairly well people talking about her need for support groups because of how stressful their jobs are. sometimes i wish there was a support group for a venture capitalist to talk to one another. these weren't ironic. these were sort of meta-very seriously defined the same

thing, that it's hard to be a venture capitalist and you wish you had it easier? >> we really do nothing compared to entrepreneurs. we play a very small role in the success of a company and its really us -- up to entrepreneurs to drive their own success. i don't think it's that stressful. it's one of the best jobs out there. it's a lot of fun actually. i'm not sure what the intention of those tweets are. i find them embarrassing. >> you are in there is. >> i'm and there is that a venture capitalist would think their job is stressful when starting a company is the most stressful thing ever and investors are bystanders who get to witness the creation of these

companies and we should be thankful for that, not stressed out and just help them out. >> i know what a venture capitalist does all day. [applause] >> that was fairly weak. [laughter] >> it's a relief. -- it's early. [applause] [laughter] >> now i think they haven't forgotten what you have said. if i was an outsider looking at what venture capitalists do, it looks like they tweet all day. humble bracts. i called them ego self these. is that what you need to do, regurgitate on twitter all day? >> not at all. we are here to accomplish something. as technology becomes more important, every company in the world these to be a technology company now.

silicon valley is under a microscope. ,> the world is watching us watching these idiots talk about how great they are on twitter all day. >> we need to be setting an example and showing the world of silicon valley is about. better capitalist don't need to be philosophers in 140 characters, they need to be helping their companies. >> the amount of face time with just the general public has dropped significantly. should be capitalists in the background. it's not our job to be in the limelight and taking all of the credit because we really deserve almost no credit. >> we need to understand that tech founders today are leading the next industrial revolution.

be honoredrs should they get to be a part of that help these down and companies be successful. how is sb note, doing? >> great. we continue to invest in about one company a week. we have seen great success over the last six years. currently, we are investors in 26 companies. companies like snap chat, pinterest. >> what people call in accordance. >> people to call them that. >> how many total unicorns are there now? >> just over 100. >> what happened to the other 70% you did not invest in? >> cap them as mrs. i guess. missescount them as mrs. i

i guess. least aboutknew at the other third. we understand the landscape. recently, david lee has retired. he was one of the partners in your fund. what happened there? two years ago, david decided to move to l.a. to spend time with his family. we started transitioning a lot of the day to day responsibilities from david to other members. now just a function of david being in a lay more. partners to have our be more involved in the day-to-day decisions. we are 11 people strong.

you didn'tid moved, tell the world this was a slow retirement for him, right? he sort of began to transition out. >> exactly. to the outside world, it was very abrupt but internally, it was seamless. he rest of our team members have stepped up and taken on responsibilities. >> any bad blood between you and david? >> none. i feel like there's more to talk about their. lastlast -- up until the fund, they were in the 40 million range. your last fund was 75 million. how has that experiment -- tell us why you almost doubled the size and how it's worked out and what the next fund will look like. fund raise a $75 million last summer as prices were increasing.

rounds were getting bigger. they went from $1 million to $3 million so we needed to have more capital to invest. that has gone incredibly well. we have some amazing companies in our portfolio. while we are not currently raising a fund, our next fund will probably be a little smaller. more in the 40 range. >> you are saying it's an experiment that went well but you are going back to the old size fund. it must a reason. -- there must be a reason. >> as we observe the market getting a little more crazy in a good way, it's all very positive for the ecosystem. we want to go back to a seed focused fund and you need to be nimble, quick and very decisive and trust your gut.

it's all about investing a great people and that comes down to trusting your gut. and you start to think more like a portfolio manager then an angel investor and we want to get more of that angel investor dna back and focus on that. >> the other thing about a smaller fund -- it's practical and obvious but with a smaller fund, you pay your investors back click and investors love that. >> we make less investments or smaller investments or both with the smaller fund? >> the investment size will probably be smaller. i think where fund gets larger, -- you areo

misaligned with the entrepreneur. being a true seed fund come you can be 100% aligned with entrepreneurs. >> that you are currently not aligned. >> we are, we are just investing in little more and we are accountable investing a little less. raising the size of your fund to $75 million was the best decision you ever made and trumped only by the better decision to decrease the fund size back to $45 million. are most every other fund has gotten bigger and we will be one of the only ones who decides it's time our fund is better. >> we never raised our fund size and you were last ones. >> a new trend. >> there's something else here.

in the is the trend ecosystem you see right now? too many companies, just the right amount? >> prices have definitely gone up. >> evaluations have definitely gone up. for us, that's not a negative. we're still searching for the company that will be the all you over $1 billion. with an ever, you see the number of companies over $1 billion has gone out of proportion with the number of companies being started. have gone out,s we still see companies making it to the stage where they are generating revenue with real businesses. >> you are pretty comfortable with the market.

we still attract some of the best entrepreneurs in the world and one of the best places to find companies and invest. perfected the system. it's so well thought through. then their screening process where they have the alumni evaluate the thousands of companies. with they you end up stanford of accelerators. >> paul graham recently said that ron conway is the most important and best investor in silicon valley right now.

-- you come up on stage and do you guys go to dinner, smoke cigars come and say listen, you say i'm the best and i will say your the best? you are called the godfather of silicon valley. is this payback for him saying you are the most important investor? >> i think it's about who adds value for founders and who helps those inflection points when a founder needs to accomplish something. >> so you do have cigar meetings. >> cigars give me indigestion. [laughter] >> investing is all about reputation. i think paul has realized that. we had a greater rotation because we are all about helping entrepreneurs. we have one customer and that's entrepreneurs. our entire firm is set up to help that one customer.

>> ok. are we in a bubble right now? i don't want to take this into the same path that everyone does but let's talk about valuation. you are comfortable in the market right now. you see any problems on the horizon? >> i don't. the opportunity has never been larger. the amount of mobile phones in the ecosystem today. >> how old are you? >> 29. >> have you ever been in a downturn? there are these young guys today who have never seen anything but the perfect world we live in now. he realized stuff goes down sometimes right? >> i believe i was in a great or high school -- in eight grade or high school. meetings attending

angel investors when i was 13. >> it was real rough on you when the economy fell apart. >> very rough. makes a great conversation piece. it was really interesting seeing the downturn. >> nothing concerns you right now on the horizon about the overall economy and the technology economy? interest rates rising? inflation? that are greats companies and great businesses will survive. the companies that probably aren't the best don't have a thought-out business model where having some products that can fit. having the doubletalk or not, i would say that no matter what. >> i am very concerned about the global economy but honestly, the

lps don't pay us to be. they pay us to invest in startups. to some extent, it doesn't matter. they want us investing in venture capital because that's how they hedge their risk. your optimism is awesome. >> eternal optimist. speaking of paul graham, i did have a dinner with him recently without cigars, a little wine. >> do you guys hold hands? >> no, no, our wives come with us. about all the up session over private company valuations today and paul said something that really struck me. he said there is multiple categories of investments in the

united states. and then youaq, have private companies and private companies -- it's just another category. it's companies that have investors and in this case, most of the investors and private companies are probably more knowledgeable in a lot of the investors in the public companies. it's actually probably a more qualified marketplace to have investments. categoryte company happens to have founders who don't want the scrutiny of quarterly earnings announcements. they want to build out of business but it's just another category. let's not obsess over it. i think people are obsessing over one of the investment categories. let's assess over nasdaq and nyse as well.

talk about the do good stuff you are up to no. are you finally addressing the plague of bicyclists in the city? is that one of the things you are working on? >> we're not going to get rid of them. >> to agree it would be for the best. >> we need to accommodate them because the city safer there are pedestrian bicyclist collisions every day and the mayor is trying to address that. >> wasn't your wife that bought a bicycle recently -- hit by a bicycle recently? >> she was. her other priorities in san francisco. bicyclists are- one. >> you do agree it's a problem that needs to be addressed. >> it is an opportunity.

a great motor transportation because people know there are too many cars. let's fast-forward to the letter h -- housing. san francisco has a huge housing problem. and the tech industry has a lot to do with the housing issue. 2011, 101,000 tech jobs have been created in the city of san francisco. give your selves a round of applause. [applause] san francisco's unemployment in 2011 was approaching 10%. today, it's less than 4%. on thegest problem agenda in 2011 was unemployment. that problem was -- is solved. a byproduct of that is housing ballotlee has put on the

a housing initiative called proposition a. we have a list of the ballot initiatives that are coming on the ballot in november and i cannot stress enough that the tech industry has got to register to vote. >> is this you telling people how to vote? >> it's recommending. recommendations. >> are you allowed -- >> is it on your screen? >> is this legal? can you tell people to register to vote at the same time to tell them how to vote? >> we ask and we recommend. ifwe asked the tech industry we are going to solve these issues, we have to register to vote and vote. grab your pencils and write down this url.

weupvote.us. you register to vote in three minutes and on november 3, you vote. we can make change. 1000 techncisco, over companies are members -- we recommend how to vote to make san francisco a better place. >> cap many times it should people registered to vote? >> usually just once. >> unless you have a spouse and register them. >> yes. >> think so much for this update. >> i want to talk about philanthropy for one second. over 400 companies have signed the 1% pledge. i talk about this every year. i give an update on philanthropy. the 1% pledge is where companies pledge 1% of their equity, 1% of

their time, and 1% of product for philanthropy. when a yelp went public, they did the 1% pledge. 1% of their stock when they were a startup turned into $50 million. they are not donating to the community $50 million. salesforce was the pioneer -- 400 have signed up. >> where does the money go? >> wherever the company who signs up for the pledge -- most of the companies have a group of employees and team members decide where that money should get donated. so san francisco is giving back. >> thank you very much. >> it's a pleasure. [applause] >> about 2.5 years ago, we had

our battlefield at the new york district. a little company called the benefits got on our stage and launched. secretly or may be, battlefield companies always hope to come back as speakers. that is what is happening today. please welcome to the stage, parker conrad and our moderator matthew lindley. [applause] ♪ >> how's it going? >> pretty good. -- it's been, what, 2.5 years? >> we were a startup. it's been kind of a crazy 2.5 years. it's been a crazy ride for you guys. >> it has been.

there has been a lot of growth. started right here -- well it was a new york event but it's been consistently growing since then. >> i imagine your growth is probably the and the other lot --people in this room dish growth is probably the end of a lot of people in this room. importantt thing people can do is set aggressive goals. and setcompany sat down goals we thought were ridiculously unachievable. because lars -- we told him we would go from one million to 10 million in a year and we were pretty proud of that. he said why aren't you going to do 20? why not something much larger?

we've reconvened and asked ourselves what would it take? it sounds impossible but what would it take for us to get there and we thought we would have to split our sales teams and hire more aggressively on the sales side and scale out this stuff faster than we thought we were going to. we kind of said let's try that and see what happens. it was working so we would just increase our targets. >> and how big are you guys now? about 1600 people. >> and you guys use zenefits internally, right? what is that like? >> internally, we say zenefits runs on benefits, which means we only do things supported by the , and sort of suffer if

it is not. are our own largest customer at this point, so it is pushing the envelope in terms of what the product can do and how it works for larger companies. >> do you have any crazy stories from the past 2.5 years? >> i'm trying to think. i'm sure there are. the craziest stories have been about how quickly we had to grow , the number of people coming on preparing for all the growth in customers. it focuses you. at one point, i remember we were not growing quite as quickly, but were doubling in size for eight weeks. >> are you right now as well?

>> not right now. that would be rough. but we work for a long period of time. it kind of means that every problem you encounter related to scale is going to be twice as bad in two months time, so you don't have a lot of time to fix it and address it. but it is exciting. it focuses everyone on what is really important. of course, it also helps attract and retain a lot of talent. thannly thing worse growing really quickly is not growing really quickly for a startup. it is a lot worse the other way around. .rowth feeds on itself growth is how startups put a stake in the ground about their vision of the future. it is how you say, listen, we are right. this is the shape of things to come. you prove that to the

world, and that means when you are growing, there is a lot of challenges to that, but it also means you can attract all the best people, attract a lot of capital. you get attention from the press and customers. it is a much better state of affairs than the alternative, to beng growing -- which is to growing slowly. >> and what is your pitch to engineers and salespeople as you continue to grow? >> basically that businesses only have three systems of record. they have one for customer information, which is salesforce, they have one for financial information, which is oracle and intuit, and they have a system of record for employee information. right now, there is a gaping hole in the universe for that third leg of the stool. by the way, we think it is the most valuable of the three. all of the companies that are successful in these spaces are

$50 billion, 100 billion dollar companies. we think our growth indicates zenefits is a company that has shaped the whole universe. our cage is, this is a chance to work -- are pitch is, this is a --nce to work for a company some of the stuff we do is boring -- but in several years bye, zenefits will be used thousands of businesses around thingsted states to make easier around benefits, compliance, all this sort of stuff. that is a fun project to work on. >> why did this fascinate you to begin with? was awas an area that real pinpoint for me personally. a lot of our product roadmap at zenefits comes from stuff that i personally disliked doing as a company founder, even today.

i am still the only admin in our system. we have people in hr who don't have access to the hr system. i kind of do all of it myself. >> why is that? just for practice? i am a little crazy. mostly it means that i experience a lot of pain points in the product. right now, we get a lot of employment verification requests. anders, people applying for apartment, that sort of thing. every time that happens, i have to go into the system and help pull that information so we can respond. we are thinking, how can we build an automated employment verification system that employees can use and do themselves and take that work off of hr staff at a lot of companies? it reveals a lot of the pain points and stuff that is not fun

to be doing. >> and you guys deal with interesting regulatory challenges as well. from what i understand, you guys are now compliant. watching a are product that is basically free affordable care act compliance for all of our customers. the thing about aca compliance is, it's one of those things that is super boring, but none of you guys want to do with it, in january or february, every business in the united states will have to start filing a socially a second tech -- essentially a second tax return. you will have to file a second one with the irs for health insurance benefits. people are estimating it is going to take most businesses about 13 hours of work a month to do this stuff, probably about $3000 or $4000 a month to cover the cost of doing it will stop

zenefits. -- the cost of doing it. zenefits will do this for free. keepll track everything, track of all the data, fill up the forms. >> is this mostly a problem that small businesses have to deal with, or do larger scale businesses have to deal with it? >> one of the things with the affordable care act -- by the way, i think zenefits is the only business in the united states where more government regulation is a good thing, because it creates more problems we can solve for our clients. when companies are doing all whenstuff in our system, you have your payroll connected, you are doing your benefits, all this stuff through zenefits, we have all the information we need to handle this other stuff for you. this ends up becoming like a protocol layer that we can build applications on top of. a lot of those can be compliance related, where we handle this stuff for you.

for larger companies, they have armies of people that can handle all this administrative work, but for smaller businesses, if you are a 75 person company, you don't have someone whose job it extra 15 hours a month just tracking all of this boring aca compliance stuff. if you could just give that to zenefits and make it go away, that is cool. >> that is one of the egg's sales pitches for zenefits in general for smaller companies. all this stuff you don't like go away. we think of our mandate is everything that has a nexus to , everything record with ties to employee information, which is one of the core systems of running a business. because we have all that data in our system, we can eliminate all these headaches associated with it.

and you can primarily work with smaller businesses, but eventually these businesses will grow up. do you expect to grow up with them, and if so, how do you convince them to stay with you instead of jumping to other payroll providers or hr benefit providers? >> right now, our size is five to 1000 employees, but we are much bigger than that ourselves. there is no fun a mental break point that occurs -- fundamental breakpoint that occurs at 1000 employees. it's just that above 1000 employees, other stuff exists. you can put oracle in for an hr system. you could spend 18 to 24 months and lamenting it, so i am not sure why you would want to do that, but it exists. -- implementing it, so i am not sure why you would want to do that, but exists. functionality is growing quickly enough to where we can support everyone as we get bigger. >> what are some of the markets

you can look at when you consider how you want to continue growing? about it is, think zenefits is fundamentally an employee provisioning system. it's like, listen, if you think about how this should work, there should be a button you click when you want to hire an employee. let's say i want to hire john, he starts on this date, reports to so and so, go figure it out and make everything happen. and we take care of everything. whether it is getting offer letters signed, getting them set up on benefits, getting them running on payroll. ,nd there is a button where when you need to terminate someone, it does everything in reverse. as the exchange with employees, they get married or have a kid, all the systems update automatically. the way we think about it is, what are all the places where new employees need to get set up?

what is all the administrative work, not just across hr, but across i.t. and other parts of the organization that someone needs to get up and running? that is where we look for products that either we are going to build or will partner with others to get integrated and connected up with zenefits. >> i do you feel about payroll thin? -- how do you feel about payroll then? >> i can't announce anything about new products or where we will be going, but pay well -- payroll is an important spoke. we partner with a lot of payroll companies, and we want to keep those connections open. when one businesses to choose the payroll company they work with. want businesses to choose the payroll company they work with. >> the last time we spoke, he compared it to plumbing. can you elaborate?

>> payroll is like plumbing. the concept of a payroll system is very binary. either it works, or it doesn't work. it is accurate or it isn't. if it is accurate, you don't get special points for getting more right, and if it doesn't work, it feels completely, even if there is one issue. it is kind of like plumbing for a house in that way. you don't really buy a house because the plumbing is really great plumbing, but if you have a house where the plumbing doesn't work, it would be a disaster. the important thing for us is that we make sure that there are solid payroll systems that clients can use with senators. but it is not at that layer of the stack. tax filing service. the differentiators about the applications you can build on top of that to make people's lives easier.

>> you have ridden this roller coaster-like growth. what would you recommend for people in here in terms of running a business and things like that? >> it sounds cliche, but hiring good people early. hire has never been a where we stretched upon the amount of equity we were going to give them, or the conversation we were going to offer, that we ended up regretting. sometimes we think, this is going to be expensive, should we go there? every single time only have done that,-- when we have done we are glad that we did that. i don't know where we would be today if we hadn't made that move. >> do you have a good story behind that?

>> for me, when i started -- iits, i probably was thought, listen. we are just going to have engineers and salespeople, what are these other functions, whitey need them? i was very naive about that. it was a long time before we had finance team in place. every single one of those functions, i looked back, and i'm like, man, i wish we had really invested in finance wish we i really invested in project management earlier. all of these things where we were late. once,n't do everything at but in retrospect i wish we started all that stuff sooner than we did. >> what would you advise

everyone to not do while running their companies? >> to not do. umm. a lotd probably worry less on evolution. i would focus on getting the right investors in early on, raising more money than you need. i started a company before this where we really struggled to raise money. we were told no by every vc in silicon valley and pretty much every vc outside silicon valley as well. i was erring on the side of raising more than i needed every round. we could find ways to use that to accelerate growth and investment were, things like

that. >> how do you deal with this onslaught of competition with people like adp coming after you? >> there are a lot of companies that are either pivoting to focus on our approach to the market, or there are a lot of new companies that are starting. it is flattering, because a lot of people are knowledge and this ,dea of an all-in-one system where as previously a lot of these systems were disconnected, creating a lot of headaches, it is the right approach to the market. of people adopting that kind of marketing messaging and branding. it is in some sense a reflection of what zenefits has done, a marketplace. i think there will be advantages of scale in this market. terms of broadly in being a system of record for employee information, but also on the health insurance side. real electronic

interfaces with all the major insurance carriers out there. that means we transact electronically while everyone else is having to deal with this stuff on pdf and over the fax machine. we can do that because we are the largest source of new business for almost all the major carriers in california, and probably most nationally now, in terms of the number of clients we send them. they are willing to do agreements with us and stuff like that. it will be a while before other companies can get to that kind of scale and create a more integrated experience for their clients. >> thank you for joining us. >> great, thanks so much, man. [applause] guys?p,

remember what i said about twitter and how you tweet? there is actually a prize involved. if you have been to disrupt, you know what it is, and it is not exciting -- not as exciting as you think it would be, but it is still a prize. in the meantime, we will get to our next panel. is it time to stick a fork in bitcoin? i hope so. i am sick of talking about bitcoin, but these guys aren't. get ready. please welcome our next guests. [applause] >> you go there. hi, i'm john biggs. we are selling bitcoin today. do we know what bitcoin is, everybody?

three people. this guy right here loves it. everybody knows what bitcoin is? is such i am john biggs. i am a reporter. there is another reporter down here, nathaniel popper. he wrote a book about bitcoin. a book, if you are not familiar, is multiple pieces of paper put between others. it is closed and you can read inside of it. he wrote one of these, which is fascinating. now. lee, founder of btcc it used to be bitcoin china. >> used to be bitcoin china, now we are btcc. guy.d arson tech -- our syntec guy,

. word all give a three description of bitcoin. >> a giant spreadsheet in the sky with money on it. >> we will leave the smaller words out of that, that's fine. >> the world's first digital asset. >> ok. >> the best form of money we have ever seen. >> is it all going to fail? what is the state of bitcoin? are my four bitcoins safe? >> depends on where you have it. >> where should i put it? what is the state of bitcoin? >> as an industry, we are paying the price. ironically, i see much better infrastructure than is really needed going on in bitcoin right now. i think we attracted a lot of

thanest and acquire more $600 million in a short. of time. everybody's expectations was that this would change in six months. that didn't happen. this will take longer. we are paying the price for that right now. hopefully things will get on seek soon, but i can also silicon valley giving up on bitcoin before things get better. even though i hope things get better soon, i imagine them getting worse before they get better. >> are you saying a lot of aboutot excited something too young and expected massive returns? never happened before. bobby, why don't you describe. >> it is sort of like they say it isrles dickens' book, the best of times, it is the worst of times. what is great about today is that we actually have bitcoin. we actually have a digital asset class that is fully visualize --

digitalized that we can have on a mobile phone or computer. that has never been done. we are also in two years of bear market. a lot of people lost faith and think the value will go down to zero, which i don't think. we will see. thingsill be interesting ahead of us. >> and a bear market is good because they are cuddling, right? >> that's right. it is a chance for all of you who raised your hand for not having bitcoin to look at it right now. >> so it is cheap. you can buy a lot of fishing line. unless you get in early and buy one, that's a different story. at the annual, what do you think? nathaniel, what do you think? >> bitcoin has been a reminder about what money is. money is about trust. bitcoin was initially sold as a

trust lists system -- trust-less system. that is why it was attractive to a lot of people. it promised this thing that was run by code, and you did not have to trust humans. i think what the bitcoin experiment has reminded people so far is that money always involves trust. you can't get away from trust with money. money is about knowing that somebody else is going to want this tomorrow, or thinking somebody else is going to want this tomorrow. with bitcoin, there have been a lot of things that have made people not trusted. people got excited about the idea, but you have to get more and more people to trust this thing. i think that the underlying code of bitcoin is still very strong. it hasn't been broken. that is something remarkable. that's why wall street is looking at it today. but for people to use it as money, they have to trust it. it even lessst

than they trust it today, the price could go down much further. if there is a problem with the code, if the cryptography behind that -- behind it is proved vulnerable at some point, it could become worth much less. on the other hand, there are a lot of smart people putting a lot of money into this right now. as i mentioned, wall street right now is plowing lots of resources into this. that certainly is reason to will beat the flaws corrected and this still has somewhere to go. was going on when this first started? you put in $100 million to test bitcoin? what happened after that? you actually did your children's -- your diligence, and all of a sudden it was robbed the children will stop >> i spent

it wasd money testing -- robbed by children. time and money testing the product. my experience with the product was the one that nathaniel just briefly mentioned. it is robust. you can always have a service on top of the product, and that is .hat happened they were incompetent, but if your weba problem with donate provider, it doesn't mean e-mailrily that the protocol is broken. it could mean that your provider is not up to par. puttingourself, you're bitcoin private keys into space? where are you putting them? >> we keep bitcoin private keys .ff-line >> and what actual location? >> we keep them off-line in good

locations, false. >> where do you keep the keys? >> they are in faults. the main one is in switzerland. >> do you have the password to get into the vault? >> i cannot do that alone. >> when you guys leave, we can talk about it. if you guys want to get out of here. no? sad -- issad, everybody enjoying this? do you like bitcoin? [applause] >> be happy about bitcoin. we are not going to stick a fork in it. it is still going to happen. do you like the way nathaniel portrayed you? a half god trade as half man who comes down and does amazing things, and you are a style action li hero. do you guys liked the book that he wrote? >> i do like it. i feel like it did a good job at

being entertaining, and it is very educational. because bitcoin has a very short story, if you read his book, you get up to speed on bitcoin. right now, he does a great job in getting up to speed in an interesting way. >> and you didn't finish it, right? >> i liked it. i'm in the middle of the book. have you guys read it yet? everyone. you should buy it. >> he likes it because he has not gotten to the part where he talks about you. >> is that right? did you have interesting stories when you research the book? researched the book? >> yeah, the book opened at this event up in tahoe. the latest edition was just this weekend. a private event held by the pantera capital, that brought together a lot of big people. what is interesting is that this

held at dan morehead state tatian house, which is a $1 million speed boat on the , which- vacation house is a $1 million speed boat on the lake, it is a gathering of these guys, many of whom were libertarians, not terribly social people. and then you see all the faces of bitcoins development. bitcoin's development. that drew me to write the book. if it goes away tomorrow, the fact that this thing came out of nowhere six years ago and became a global phenomenon is something -- andople actually something that people actually spent money on, it's crazy. time, i think to understand it, and understand any technology, it is useful to understand the people who are behind it, and the people who are deciding to use it. that coin is frequently a for bidding topic for people. you get into cryptography and

the code of it, and it is difficult to understand. is,if you understand why it it makes you excited. this guy basically left his job, sold his company to do this. what about bitcoin could get people so excited? thing, it was one a lot of different things. case, he grew up in argentina. the grandson of escapees of the communist revolution. those cases play into why bitcoin is attractive. different things in different places. that tells you a lot about the world, even if you are not going to buy a bitcoin. and it tells you a lot about why whatin could matter, and it could do in the future. >> it won't matter for sure. don't get the wrong idea. do you think that coin is going

to go away? >> i think it could. i think there are enough people who don't think that, that it gives it a good chance of not going away. likes the way i see it, bitcoin is not going away, the way internet is not going away. if you believe the internet will go away, bitcoin might go away. as long as the internet is with us, bitcoin is with us, because s first sourced' of electronic money and value not controlled by any government or system. already moderately successful, and the reason is because people actually value this. the genie is out of the bottle. >> i can imagine a couple of ways in which bitcoin fails or disappears, and then there are the things i don't know. i would say that i am the most biased coin person -- biased

bitcoin person, and i always tell people that they should not acquire an amount of bitcoin that they cannot afford to lose. there is a 20% chance that you can lose that money, so you cannot -- should not own an amount of that that you cannot afford to use -- lose. i also think there is a chance that that coin worth more than $100 million. -- that coin will be worth -- thanin will be worth more $100 million. all in all, it is a super risky investment. --will it stop the coming becoming a resourceful investment for the techno-nerds? if i put a lot of money and a bitcoin fund right now, what do you guys think over the next couple of months? >> if it succeeds, is it like

the internet, like the tc ip protocol, or is it like darknet? that is the big question that faces bitcoin. is it the predecessor to the thing that matters, or is it the thing that matters? at the beginning, you said, what is bitcoin? it is a decentralized spreadsheet in the sky that everybody keeps. that is the idea. that genie is definitely out of the bottle, and people are going to find ways to use it. the question is, are they going to decentralized spreadsheets, or are they going to use a different kind of spreadsheet that they build? called a private database and it has existed for a long time. bitcoin is a decentralized ledger. there is nothing

revolutionary about that. >> but the banks currently seem to believe that if 20 of them or theirthem are maintaining records together, and if one of those go down -- when visa goes down, you are screwed. in a system where 50 people are keeping the ledger, one of them goes down, you still have 49 of them. that is a little robust. running a joint venture with others. >> the difference is that in the existing banking system, the rest of us cannot elect to join the party. it is a boys club. whereas with bitcoin, anybody can join and become a partner. >> to me, this debate we are having is the debate over whether bitcoin is going to

matter, or whether the technology that bitcoin has introduced to the world, whether that is what's going to matter. >> are you into the block chain as a concept, or are you into bitcoin as a commodity? >> i think bitcoin is likely to continue on, as long as the technology -- these things can both happen. the banks can create their private databases if they want, and bitcoin can continue on. the question is how much each of them draws in. right now, there are still a lot of people using bitcoin itself for illegal transactions. it is not the only reason to use it, but there are people using it for that. let's say the banks go over here and create their own thing, people are still going to want to use bitcoin. you can have them both. the question is, does this actually and up feeding into this so that you get the $1

million valuation? >> one only give these guys start up i did -- why don't we give these guys start up ideas. line, what are the startups you see connecting to bitcoin in the new furniture -- in the near future? systems fornt transfers, etc., etc. >> what needs to happen for the next generation of bitcoins to pop up on the scene? >> i will go first. my suggestion is, a lot of in startups really get in the something they are passionate about. for me, it is bitcoin, for you, maybe something else. running a startup is hard. being an entrepreneur is hard. definitely go in an area where

you are passionate. for us, it was bitcoin. we are still excited about it despite the fact that the industry has wavered a little bit. what do you want to see to make bitcoin it to that next -- >> i think that things that have to happen, there are six other million dollars that have gone into bitcoin companies, and we are beginning to see the infrastructure -- $600 million that have gone into bitcoin companies, and we are beginning to see the infrastructure build. i think there are things that can happen on top of bitcoin, or copying the bitcoin model. some of the interesting things are building our own identity on top of the block, or creating a separate identity. there are companies doing great stuff there. if somebody had come to us six years ago and said, you guys have limited resources to work on the problem of solving money, it would have never occurred to me to work on building a public

good. in the have to work constrains i have always worked with. you have intellectual property, you raise money, you have a board, you provide a service. the way we solved the problem is brilliant, it has none of that. it is basically developing it as a public good. when you think about what other problems out there would benefit as being a public good shared between all of us, i think identity is the one that comes to mind. the near-term promise for bitcoin seems to be less in money. money is where it gets really dangerous, and you can really lose a lot of somebody's money. maybe if you start with lower impact uses of bitcoin, and i'm not saying that keeping somebody's identity is a lower impact use, but to me the real interesting thing about bitcoin

is this idea of a spreadsheet in the sky, and this notion that one day maybe every transaction and interaction will be recorded on this spreadsheet. a v.c. about avc -- company using their coin as their own capital. >> if you are a visa executive, a bank of america executive, or a wells fargo executive, you have to be professional and say, i am interested in the block chain, but not britt -- not bitcoin. that is the equivalent of saying i like a browser, but not the internet. it is ridiculous. they want to say something nice about it without saying something nice about it.

that thedon't realize block chain does not work without bitcoin. is a trust list database, because the minors maintain it, and they do so because they get paid in bitcoin. >> nathaniel, bobby, wenzel, this was beautiful. was this good, are we happy? [applause] >> thank you very much. let's head out. >> hello. am i on? the fork is in bitcoin, that's good. it's weird to introduce the interviews i'm going to do, but i am very excited about this one. when i first met our next guest, i was flustered. he is a big deal. he asked me, what is the

greatest question of all? i kind of sputtered out to a few awkward answers. he asked me, it's "are we alone?" successfulf the most investors in the world. he is exploring space with his cash. we are really excited to have him on our skit -- on our stage. gary miller.e quite welcome. >> thank you. >> you are worth $3 billion. is that correct. >> possible. >> no comment. our first question is, you invest in these companies that are supposed to reach huge demographics of people, the everyday man. you feel like it is hard to relate to the end-users of the services you invest in? >> say that again. to thet hard to relate end-users of the companies you

invest in? that sort of interesting we have capital invested around the world. 40% in the u.s., 30% in china, 20% in india and europe. one would think that things would look different, given the ,iverse city of cultures demographics, and so on. what you see it again and again is a lot of similarities and business models that, with small variations, repeat themselves all the time. >> you have that pattern down. that $200 million investment in facebook really put you on the map as an investor in a lot of ways. you had a $4 billion gain, and

you sold the stake in both facebook and twitter, right? >> we usually don't talk about , but weour positions made big investments in both facebook and twitter. -- $800ted a note million total in facebook and $400 million in twitter. >> and you don't want to tell me whether or not you sold the stock, but who should be the twitter ceo? thing is, as a matter of principle, we never join boards of companies. this is not for us to make those considerations. >> let's talk about that for a little bit, not joining boards. you are kind of known for having a very hands-off investment strategy. what is the purpose of that? why not get involved? we do get involved, but on an

informal basis. and we invest in companies, many of them already have strong boards. ourselvesver push onto those boards. tight dialoguery with the founders, and we often help them with insights, just from our experience locally. it happens that you would see something interesting in china or india, which can be applied in the u.s., in a particular situation, and that's where we come in and bring the founders' attention to all the amazing phenomena happening around the world. that's how we see our value. we developed this strategy of trusting the

that we give back to the founders so they vote our shares. >> have you made an impact by never taking a board seat? >> initially, i would think that would be the case. , it ise more recently our global experience and something we bring to the table, which really matters when they make the decision to take money from us. >> you said the other day, how many trips to the moon and back have you traveled? buthe team is really small, they way we are different from most of the other funds is that we have one team which is local, one team is covering all the continents, and that really .akes our job pretty physical

we have to move around a lot throughout the year. just before coming on stage, i -- i did quick math, and it turns out that six partners are traveling to the moon and back three times a year every year. >> that's a lot of travel. speaking of international investments, you invested in transportation startups in india and china. you said in an interview that uber was kind of your big flub it you lose sleep over. given the conversation going on right now around 1099 and w-2, general regulation issues with uber as they expand, are you still losing sleep over that deal, or is it something you are ok with? >> you have to start sleeping again at some point, so you can't just not sleep for a long time.

uber is really an amazing business. the reason this is so much more difficult than facebook and very muchthat it is an off-line business. it is really this, nation of off-line and online, which really makes it much more challenging to grow as fast as they have. it really calls for a special type of person to run these , because of this nation of off-line and online and online in the skill set required for that. combination of off-line and online and the skill set required for that. ask if the public market gets their hands on these startups and takes it down, do you think uber will live up to its $50

billion valuation when it goes public? >> i think so. what many people don't realize is that uber cannot be valued taste on existing market size, because uber itself is growing the market. taken into account, the valuation is absolutely justified. i feel confident that uber will do well from that point onward. earlier that about 40% of your investments are in china. i think i read on the internet, hopefully it is correct, that about 60% of games are for -- gains are coming from china. you have a birds eye view of that space. with what is going on with china's economy, is that part of the same pattern of growth and plato we have seen out of china, or is something larger happening? -- plateau we have seen out of china, or is something larger happening? >> it is really hard to see

right now. i think we will get more evidence of what is going on in china. i think of the u.s. experience is of any guidance, if you go back to 2008 or 2009 when we were making our investments in evidence it is clear a crisis that even in situation, when the economy is not doing well, some of the tech companies can accelerate. it is easy to understand because many corporations and individuals are more thinking about saving. of course, technology provides those saving opportunities. i think it is very possible that we will see a similar pattern in china. xaso you have a 7% stake in omi. is that one of the tech companies you see benefiting

from this kind of situation? >> yes. because they are producing high-quality, inexpensive phones, i think the world will insidegnificant drive china and other developing markets to get a high-quality thing maybe half the price of more established brands. >> you also have investments in alibaba, e-commerce platforms in china, as well as wish, and e-commerce platform in the states. if you can throw up the slides i have, chinese growth and commerce has well outpaced the u.s., despite the fact they got a later start than us. why do you think that is? >> it is really an incredible phenomena. later,tarted 10 years 2005 first is roughly 1995, and the e-commerce market is larger.

versus roughly 1995, and the e-commerce market is larger. there are actually a few reasons explaining that. one is that the reason the u.s. is much more organized. about 75% of retail is organized in the u.s., versus 20% in china and 10% in india. from that spot -- from that standpoint, off-line retail in the u.s. is doing well, so there is less of a disruptive potential and e-commerce. thehe other hand, difference in population with the u.s. is significantly less than in china and india. if you think top 10 u.s. cities

in all three countries, then you citiesee the chinese eating twice as densely populated as in the u.s., and in more denselyimes populated. of course, the density of the population is very conducive to efficient shipping. this is one of the drivers. but i think the hope for u.s. -- the recentt data, especially around generation y, shows that in the , and maybe this is the beginning of a trend, that there will be more opportunities for e-commerce in the u.s.. if you look at the data, baby , 75% wanted to live in a

single-family house, that 75% of generation acts and only 50% of generation y. this is a really dramatic shift into moving from single family homes to multi family homes in the u.s.. thater encouraging sign is 90% of generation acts and baby boomers have the propensity of using cars to travel to their jobs, while only 75% of generation y does. you see interesting finds of fundamentallyng more economical in the u.s.. -- dan the u.s. thanld say that the --

the u.s. i would say the prosperity of e-commerce and the u.s. is opening up in the next few years. >> i want to transition to the future. elon musk has interesting things to say about artificial intelligence. he is not a fan. he says it is an existential threat to humanity. what do you think the threat of ai is? >> i would disagree with elon musk on that one. although i am a fan of his space exploration and tesla. but i disagree, and the reason is that i do not believe that artificial intelligence has been developed in the way he believes it will develop, that robots will completely dominate humans, and what will be tracing -- chasing them in getting rid of them. see very clearly is that there is a convert -- convergence between human brains and computers.

google is a good example of that. one million people feeding the machine, all the content on google is created by human brains, and then there are a bunch of servers that are analyzing this data and feeding it back into the human brain. so there is a very peaceful coexistence between us and google. our brains are slowly adjusting to google being around. the same thing with facebook. around a billion people are entering information into facebook, and then servers are analyzing this data and providing advertisements. i think that is the way artificial intelligence will develop. another interesting example is chess. it is very obvious that beginning in the 1990's, computers are better at playing chess than humans. but all the tests that have been ane so far show that if

computer is assisting a human to play, then maybe -- they beat another computer. -- a humanan brain brain plus a computer is always better than just a computer. if that is evidence of how it will play out in the future, that is what i think is going to happen. >> rest assured, everyone, we will be safe. let's talk about your $100 million investment in breakthrough initiative will stop you are going to hunt for extraterrestrial life. -- breakthrough initiative. you are going to hunt for extraterrestrial life. why are you doing this now? my childhood dream. many factors have converged into launching this project now. one is that we now have scientific evidence that emerged due tolast few years

nasa telescopes that have been launched. now withcome clear scientific rigor that there are probably 20 million to 40 billion earthlike planets in our galaxy. to 40 billion earthlike planets in our galaxy. when i say earthlike planets, it is what you see when you look outside. it will be earthlike water. all the conditions that life can news to proliferate. -- use to proliferate. ago, we had no clue, but we know that justin our galaxy -- just in our galaxy the number is 20 billion. one star the size of the sun has a planet similar to earth with an inhabitable zone. we have options.

one is to ignore the scientific data and continue business as usual, and the second is, let's try to do something about it, assuming that given some of the possibilities, somewhere life is emerged. there is also evidence that life very earlyerged after the earth cooled down. .nd we have 3.5 billion to go other possibilities existing around the world have many more billions of years. this is one. the second is that we now have equipment, and we have the software to analyze data at the rate that is much greater than any previous effort. be able to will

analyze the data in a day as much as the previous one could in a year, because of the software and hardware. something that is routinely not appreciated is that communicating between civilizations is actually very cheap. i have prepared a couple of slides to demonstrate that. up thecould just pull first line. >> can we bring up the next slide, portal for? >> actually, the previous slide. >> the previous slide. >> this is the largest telescope on earth. it is in puerto rico. it is 1000 feet wide. we have been using it for many years. next slide, please. you can imagine that another civilization is no more developed than us, and they have ,xactly the same telescope somewhere in the middle of the

medical -- milky way, then they will be able to communicate with us using the same equipment. the next slide. it is extremely cheap to send a signal across 50 billion miles using the equipment we have. please.de, task,s a more challenging how to communicate between galaxies. this is a nearby galaxy, andromeda. there is a civilization exactly like hours sitting there. it takes 2.5 million years to send a signal that way. but what would it take to send a signal? next slide. this is the biggest energy generating facility on earth. it is located in china. if you go to the next slide, it

takes only two of those to connect to the same kind of transmitter to communicate galaxies across normal distances of 15 trillion miles. it is a cheap endeavor to communicate between the galaxies somebody should be sending something out there, and it is our responsibility to keep looking. part of the breakthrough is not just looking, but deciding how we communicate when it is time. i know you have open sourced that and asked people to submit their own ideas, but i am curious what you would do if you were in charge. what would you say to intelligent life that we find? >> and actually a complicated question. we need to come up with the content and the coding.

few's why maybe even a people will participate when we announced a $1 million prize for the best message when we hear from them what we will be able to send over. we will announce the rules shortly. >> what would you say? >> i don't know. i didn't think enough about it. >> fair enough. what do you want your legacy to be? >> this is not for me to answer that question and hopefully i and not done yet so we will see in the next years. >> thank you so much. [applause] he is so cool. i kind of have a crush on him and i'm gay. next guest. not a soul in here has not used dropbox, another one of our battlefield companies. please welcome.

>> much better than the ones in new york. there's been a bit of meandering as far as product placement. do you can take on. i think maybe some of the confusion arises from -- and we

launched here like seven years ago. the company started with this belief that everybody should have this home in the cloud for their stuff in we be better off if our stuff wasn't stuck on our phones and computers. fast-forward to today -- mission accomplished. now you have this new problem where now my stuff lives in 100 places in the cloud. how do i sort through all of it? the direction we have been pulled in most by our customers is to help us work that are together. like someone please make this complicated world simple. -- now we have 400 million people on the platform. what we are building is this way for people to collaborate where that connects every person, company, ecosystem in the world. >> does that take the shape of a

tool where people communicate and have access to their files and documents alongside that? what are you building that will take advantage of that opportunity? >> the way we think about it is thatarted by just getting people are putting their most important information in dropbox. there are a lot of moving parts. first is having a place for that and when you think about what collaboration is, its storage, communication, how you coordinate. the see that reflected in the product. weays thinking of how to remove the friction from these everyday things you are doing and how do we make it easier for you to work with other people so things like the badge. kind of like cloud enabling office. making it so you can share and eventually communicate from

dropbox or anytime you're looking at something. forward the fact there are other people around and moving from just a place to put stuff to a place for you can work with other people is a big theme. >> from a passive repository to .n active workplace is dropbox growing at a sustainable rate? >> yeah. if anything, we're struggling to keep up. we had 500 people the beginning of last year and we are 1500 now. we have 11 offices in growing. this is a problem that everyone here has. every person in this room, every company in the world struggles with these challenges and has the potential not just to be a user of dropbox but a paying customer. it starts there. you have to have a huge market and an austin -- awesome team

and a product people love and every year, those things get better for us. >> in terms of growth when you strategic conversations, do you discuss what would happen if we had an implosion of sorts? that that wasn't the case but do you talk about what would happen to dropbox if it happened, you lost access to is a forward-looking capital in terms of the private markets? >> we don't talk much about the broader market environment. we started in 2007. in the market was down and it's back up again. i think that certainly something you have to plan for. us, whether the economy is good or bad, people still have these problems. our focus is still -- even a we are leading in the space, we've

only made a small dent in the problem compared to where we could go and we also think about our business model. 2008, theaunched in business model meet -- we chose was his premium approach where you can start using for free and subscribe if you use it a lot and that's been a credibly powerful base. then we have layered on additional businesses as those 400 million people have brought it into millions of businesses. we've found companies are buying it at a faster rate. this is really the year that larger customers have tips. we have household name companies like under armour, news corp., nbc. >> let's talk about the dropbox business thing. customers doness you currently have and how many are paying?

>> about 130 paying business customers. that has been growing pretty quickly. there are something like 8 million businesses actively using dropbox. in a small company, maybe they can use the free product for a while. news corp.ike , they use a mix of free and pro accounts before they switch over to dropbox for business. in,000 -- to put that context, the salesforce has roughly 150,000. it's a super efficient model. we are still super early in this. >> is that end of your goals right now to snipe those whales? to say we need to convert these people have a significant user base using java box into paying

business customers? >> it such a big opportunity. if anything, our customers have pulled us up into these bigger companies. we had a huge market with the other stuff we are doing. we have been spending a lot of time growing our sales team. we hired an awesome new leader in sales, thomas hansen. >> is working mostly international or local? >> there's opportunity everywhere. it's roughly evenly split. how many people here use dropbox? >> all right. seems like the majority. activelyof you transfer files in and out once a month? a little less. how do you count those active users? do you count it as people who

-- hot itemsms they are saving or do you count it as people actively utilizing the product? >> we do all kinds of segmentation on activity. we look at how frequent people use it, different use cases. to focus ony want building out and helping people collaborate. if you had to characterize them are biggest user retention problem at the moment what would it be? what is the hard bit about keeping people using dropbox? >> i don't think it's keeping people using it as a problem. it's like how do we solve all of the problems in a big way. it very horizontal. people can share photos, collaborate.

pretty much anything you have you can put in there. supporting all of those different use cases is an interesting challenge. >> you said before you think dropbox is fine with some of its own infrastructure. have you changed any thought about that? >> the hybrid approach has worked since the beginning. the only changes we are at a much bigger scale now. billions of connections between users. that takes a lot of attention. >> let's get a bit abstract for -- second.ep some people have been talking .bout a world in the future

don't have a we file system, where there isn't a folder structure for files and people just have that access on-demand as needed in context. sort of like the slot approach where if you need a file comments in context with the conversations you're having. >are you preparing for that word whichthe initial concept is a strong -- are you preparing for a world where that folder is no longer people's consciousness? >> whatever we do we want to bring the future here faster. all the time we think about how mobile has changed and really will continue to change all aspects about how we work and live. if you were to start with a blank slate, there's a bunch of things he would design differently. the challenge is while files

might not be the center of the , i hope we're not all shoveling out our inboxes every morning five years from now. the problem is that stuff doesn't go away. a born in the cloud company -- even like us. and we use all of these new tools but we still have a fax machine. like, every office is like this time capsule of the last 50 years of productivity tools including paper and phones. i think the challenge is not so much what are the things we can and we have spent a lot of time working on that but how do you tie all of this stuff together because you have all of these tools and these different decades, none of which were designed to work together -- how can we design not to get to a better place.

>> you talk about building things that utilize dropbox, let's talk about consumers. you launched carousel and it kind of fizzled out. what happened? >> people love you carousel. it's early. all of these problems are big problems. we go after them because they are important. were easy to solve, someone would have done it already. building application for the apple tv? we will look at that. you have to start with what is the problem people have so they're all kinds of things you can do with photos and other things. when are you going to ipo?

>> to have any plans right now. we raised a bunch of money at the beginning of last year so we are really enjoying having the flexibility and not having to worry about that universe. >> how people will react to every little thing you do. >> we have been heads down for the last several months recruiting and building. it's nice to be able to focus on the. >> you have done this. . --what is next. >> the opportunity in front of us is -- like, one of the biggest areas we can help people is connecting you to the information and people that really matter to you. at our kind of scale, hundreds of millions of people on the platform, but we are building is the world's largest platform for collaboration.

we want to get to a place where it's like any group of people in in anyld in any country company using whatever technology they want can work together without problems. . it will be simple. all of these archaic ways of working we have been stuck with -- how do we get everybody out of there? are the apps you think you need to build or the services you need to offer to be competitive in the enterprise against competitors like in thatt, google particular collaborative document space? >> i think it's already working. because of things we are improving is there's a lot more we can do around communication. there's a lot we can do to tie the file world and post file world together. one difference with dropbox versus other folks is we want you to be free to use whatever tools he won.

-- you want. dropbox is baked into office. we partner with microsoft. we made an integration with gmail. that kind of thing will continue. just building a strong foundation. people love dropbox because it's reliable, it's simple, it works faster. in many cases many times faster than competing products. >> are you worried about box? >> is a huge market. on a -- wherever we are today, we can be 10 times bigger. >> i guess the last thing would be -- you know, if you are going yourtch i guess aol service, you are going to come

and say this is why you have to convert. what is your pitch? how do you go in there and say that? >> in our case, it's often a lot easier than the typical sale. for most products come you get someone on the phone and you are like hey, let me tell you about our product. hey, aspbox, it's like you know, thousands of people are already using dropbox in your company and we have all of these awesome ways for you to manage that the way you manage the other infrastructure in your company. voted.eople have i don't know how many employees they have but let's say let's get the other couple thousand on their to enjoy the same kind of benefits.

>> thank you very much, drew. [applause] >> all right. abruptly and i'm not entirely sure if our next guest is ready to go but i hope shoes. meantime -- i hope she is. start up alley is starting along this corridor and i believe right there. you should vote because what happens is the start up alley company is plucked and becomes one of our battlefield companies that gets to present on stage and in the running like everywhere hers to company. -- every rehearsed company. you can do that voting. there's a website somewhere.

place your votes. our next guest is ready. i keep getting promised robots. my roomba as one of those but our guest might be able to help. please welcome catherine and frederick. ♪ hands's get a show of first. how many people own a roomba? 25 maybe. how many of you own a drone? the same number.

of you have mounted a drone to your roomba? no one yet. if you own a roomba, you can thank helen for that one. in 1990d it i robot right out of m.i.t.. you left in 2008 after 18 years there. why did you leave? things were going well. >> it was going well. we had taken it public. it was my dream come true. outot over 10,000 roombas there and robots in the military that saved the lives of hundreds of thousands of soldiers and civilians. i didn't want it to be the only thing i did. the longestrs, overnight success you will ever see. companyt i had another

in the end that's the fun thing and doing a startup. it in your blood it was time to go and do something else? >> i think it was. 18 years is a long time to do one thing. it was a wonderful life experience. >> most startups don't last 18 years. in 2008, did you know you wanted to do drugs? >> -- drones? >> yes. the place you can make the most capability. with a droneround much easier than with a ground robot. outdoors is almost a superhighway for the drones. >> at that time, drones were not really a thing.

it's only the last two or three years. drones you think in 2008 were already possible and what did you see there? cheat and getto where you need to go very easily. outdoors above the treetops, about the telephone poles, it's really free space. not to avoid a plane once but in general, it's a big space and a very small drone. >> was the technology there in 2008? >> it had just come about when we started doing gps stabilization. incident needing a qualified pilot to fly, someone really trained, you can now set it and forget it and the drone can in one place automatically. i saw that as the key that would make things easy for everyone to fly, not just rumors but people

in industries. companies don't like to train pilots and have to give them continuous training. >> did you have done that as i robot? they have a lot of resources. could you have done flying robots there? >> we were having such success that itround robots would have been a stretch to jump in and create a drone company. there's a glut of robotics technology i'm bringing to the it's industry but also really drone technology. the aerodynamics, the control systems are very specific.

>> let's talk about the drones you have on the market now will stop they are different -- now. they are different from the drones people are thinking about now because they are tethered. >> we have two drones. customers about using them, what they told me was they are great but only last like 20 minutes. we put it on a tether so it can go up and stay up and you can get a birds eye view of an entire facility. it's kind of like a satellite ,ystem except it's real time high definition, and it always stays where you want it. it doesn't get flummoxed by cloud cover and other things. >> how high can they go? >> to 500 feet and stay there

for 100 hours. >> the other one you have is the pocket drone. it's more agile. we built these larger drones to go into building's first two help soldiers and police stay at to say that you a safe standoff distance. the feedback was great. they said if you could make one that put in your pocket, we would take them. that is our pocket flyer drone. there is not a tether. without the tether, it would last 10 minutes. ,hen it goes into a building the tether is an enabling technology. >> at every officer has a drone yet cap how close are you to

that -- not every officer has aged drone yet. how close are you to that? >> we are hoping to leverage that to get drones to all of the police officers and firefighters and swat teams around the world. like the enterprise drone business is going well for you. you have raised $12.5 million so far. you raise another round this year. how much did you raise this year? >> we raise $3.5 million this year. >> do have a good amount of money in the bank at this point. what is your research focused on right now? >> we've been looking at the consumer to run space. drone space.ce. -- a lot of the drones have a

gimbal underneath. we've got that was a little backwards. if we could just fly level and put the camera into the system to make it much more simple. simplicity is really good. complexity is the enemy. we have been looking at an entire different drone design that makes it more portable and i think we are really onto something. >> i think we have one of those here. i hope we can get one onto the stage. just one moment. there are going to try to not get killed by the drone in the next five minutes. it's flyingee how completely level instead of tilting into the motion. can replace you mechanical complexity with computation.

we consider that a really good thing. so that's our level one drone. >> very nice. [applause] benefitsthey get some from a gimbal that hangs underneath it? >> you can. we still have to use electronic image stabilization in the camera but those large microscopic motions, there is no need to take them out. we believe that simplicity of flight is the key. without drones, you are just flying the camera and you have to be able to control the shot. you don't want to have to plan and script everything. you want to be able to get that shot immediately and that's the system we created at the level one. >> looking at these consumer

there are quite a few competitors on the market already. fair to say they all have a lot of money. do you think enough of a distinguishing feature to compete with these guys? >> i believe there is. our consumers tell us if they want the small size, we talked dronest of people with with the gimbal system that goes bad. they are complex systems because they are tilting the camera and all of the wiring of the camera has to go through these multiple degrees. anytime your place mechanical complexity with electronic image stimulus nation, that's a good thing. i believe the drones will morph into designs like this.

there is another side when it comes to flying drones is the software side. this one is controlled by an iphone. it is hard to fly a drone. i have crashed many of them and i know what i am talking about. what are you doing to make that easier? you are used to trying to position yourself, your field of view in a picture or map. a swipe to fly interface. that is that we have on the level one. instead of learning to fly with these complex joysticks, we are making it easier for people

to learn how to fly right from their cell phones. it goes to the portability. you probably have your cell phone with you when you leave the house. smallermake it a little . put it right in your backpack. have your phone with you. you are good to go. the best drone is the one you have with you. this will be a fully functional capable drone, high resolution, camera, a very rugged package. >> one of the coolest features is the geo-fencing. what is that? helen: one of the features, we call it geo-fencing. instead of having to figure out how to put a fence up in a map, you walk the area where you want the drone to stay. werepeople, we found,

intimidated. if you walk the geo-fence, the drone will always stay in that boundary. we will connect it to keep out with another start up company that is making a database of where you cannot fly. for example, the white house. drone to the white house. i did not fly it. faa puts out alerts, like for the forest fires. many people did not know it was dangerous to fly near forest fires and they were flying the drones and hindering the rescue the fires because

helicopters could not fly because they were afraid they might hit a drone. notifying the users they should not be flying in that area. most people understand they do down.nt things to burn >> we have been talking about this as if it were on the market. helen: it will be on the market next year. , built akickstarter community giving us advice and information about what they would do with their drone. >> was that the main reason you did a kickstarter? you are pretty well-funded company. what we did with the room

ba, we did some focus groups, and you throw it on to the market and hope for the best. there, we have a new idea, see if there's interest. solicit what else you want in your drone. >> how many presales did you have on kickstarter? helen: 1500. >> a good number. this drone is called the level one. what happens when you reach level two? helen: this is a prototype system. to get something into production does take a lot of time and a lot of work. videos areay, robot a dime a dozen.

robots, very infrequent in the world of -- it does take a great effort to get there. that is what we are focused on right now. >> you have been doing this for seven years. for 18. at i robot works inyou see sci-fi 10 years from now? drone definitely in the space. i believe in delivery drones. you will be getting your packages delivered, you will be getting your pizza delivered with drones. >> sci-fi works pizza delivery grounds. boeing of to be the drones. >> do you believe in the idea of

drone delivery? helen: we can do it from a technical point of view. it will take some regulatory and cultural changes. i believe the faa is right not to allow it today. but to allow more experimentation, that would be a great benefit to the community. .t will come over time they have signaled they are very open to changing the rules. you really should have to prove that it is safe when you are carrying a five pound payload over a populated area. helicopters fly overpopulated cities day in and day out and nobody pays any mind to them. i look forward to getting my pizza delivered. [applause]