act as if he is a king, as if he is at the hater. if you want to make changes, go to congress. but this is going to be another illegal executive action, which i am sure will be rejected by the courts. governor, let's talk about a couple of the specific ideas that it seems from all the reporting that president obama is likely to propose as early as this week. expand the number of gun sellers who have to do background checks. expand the number of accused domestic abusers who are barred from buying guns. governor, what is wrong with those pacific ideas? know theush: you don't details of it, but the gun show loophole does not exist. people that want to sell -- occasionally sell guns are to have the right to do so without being impaired by the federal government. if states want to create

specific rules, fine. as a relates to domestic violence, the state of florida when i was governor did exactly what he is suggesting. this top-down approach does not create freedom, safety, security. >> you are saying that you oppose the executive order, the way that he is doing this, and the policy itself. you don't think background checks -- >> i think we need to enforce the laws we have good and we are not doing so -- the laws we have, and we are not doing so. we have people like roof in south carolina, who should never have been sold a gun, and we have loads of criminals running around with guns. and we are not prosecuting them. in the meantime, barack obama has not presented the american people with a clear plan to keep this nation safe to we learned two days ago -- nation safe.

we let two days ago that we don't even know the people who have overstayed their visa. >> background checks happen for normal gun purchases at a normal store, so his argument would be you just do it here. >> i am going to take a look at it, but i don't like changing anything. right now, they have plenty of rules and regulations. we should look at mental health. we have sickos all over the place, and that is the problem. here is the problem. the bad guys are always going to get the guns. you can have all the restrictions you want. announcer: on "newsmakers" today mussen looks at terrorist threats against the u.s. and how the u.s. is responding. today at 6:00 p.m. eastern here on c-span. ,"nouncer: tonight on "q&a

michael ramirez on his career and his recent book of satirical cartoons. >> i have this figure that is kind of a conglomeration of extremist israeli settlers, and a palestinian figure who has -- if you notice, he is on a prayer rug, but he has his shoes on. so both these figures are sort of utilizing a false religion for political purpose. so it just proves once again i am an eagle opportunity offender. announcer: sunday night at 8:00 used in an pacific on c-span's "q&a." announcer: c-span has your best access to congress in 2016. the house and senate will reconvene on january 4 to mark the second section -- session of the 114th congress. i tuesday, the houses back for legislative work with paul ryan

as speaker of the house. 11, themonday, january senate returns at 2:00 p.m. houston. be sure to follow c-span's capitol hill producer on twitter for daily congressional updates. c-span, live coverage of congress on tv, on the radio, and online at seized and.org. -- at c-span.org. announcer: now we will hear from a father and son venture capitalist team. the ceo of dropbox cloud service. and a group talking about the future of bitcoin's. this is just over two hours. >> once a year, they dragged me out of wherever they keep me and bring me up. on stage. here i am. dancing monkey. thank you so much. you guys are two of the main guys.

thank you so much for coming here to talk with me and share whatever you are going to share with the audience. >> thank you. a pleasure. >> i know there is something you would like to talk about, but i would like to start with something else. >> you do usually want to talk about something else. >> well, look, i am a venture capitalist, you are eventual -- venture capitalist, and it is not the hardest job. but a lot of vc's i see out there seem like they have martyred themselves. i am not going to say who these -- this is, but these are fairly well known vc's. sometimes i wish there was a support group for venture capitalists to talk to each other. i wish there was a forum for vc 's to talk and share advice. do you guys find the same thing?

it is really hard to be a vc and you wish you had it a little easier? >> we really do nothing compared to entrepreneurs. we play a very small role in the success of the company, and it is really up to entrepreneurs to drive their own success. and so i don't think it is that stressful. it is one of the best jobs out there. it is a lot of fun, actually. >> i am not sure what the intention of those tweets. i find them and embarrassing. >> you are embarrassed. vci am embarrassed that a with think their job is successful in starting a company is the most stressful thing ever. are bystanders that get

to witness the creation of these companies. we should be thankful for that, not stressed out. and just help them out. >> i know what abc does all day. >> [applause] >> that was fairly weak. [laughter] it started. > it is early. [applause] [cheering] >> now i think they forgot what you said. >> mahalo. our.wo or three tweets an h i call them ego selfies. is that what you need to do to be successful? >> not at all. as technology becomes more important, every company in the

world needs to be a technology company now. silicon valley is under a microscope more than it has ever have been. >> the world is watching us. mr. topher conway: exactly. we need to be showing -- setting an example. it is all about hard work and perseverance and changing the world through technology. do not need to be philosophers. they need to be helping their companies. >> it does not need to -- [indiscernible] the amount of face time with just the general public has dropped significantly because i think there are other ways mr. topher conway: to help companies. mr. topher conway: vc's should be -- i think there are other ways to help companies. mr. topher conway: vc's should be in the background. mr. ron conway: we need to understand that tech founders

today are leaving the next industrial revolution. be obviousrs should that they get to be a part of that. and not go down and help these companies be successful. down and help these companies be successful. >> how are you doing? mr. topher conway: we are 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 that are valued at over $1 billion. companies like snap chat, pintrest. >> these are what people call unicorns. mr. topher conway: people call them that. >> how many unicorns are they now? mr. topher conway: just over 100. >> so what happened to the other 70% you did not invest in? isses, ier conway: m

guess. we are very proud of what we have done. mr. ron conway: we are investors in about a third, and we looked about another third. we understand the landscape. >> what happened -- you recently -- david lee has recently retired. he was the partner for a while. what happened? why did he leave? mr. topher conway: he decided to move to l.a. to spend more time with his family and his two young daughters. we started transitioning a lot of the day-to-day responsibilities from david to other members. our partners to be more involved in every day-to-day decisions. so now we are 11 people strong. our partners have conditioned

everything. >> when david moved, he did not tell the world this was a retirement for him. he began to transition him out? mr. topher conway: exactly. to the outside world, it was very abrupt. but internally, it was a seamless transition. >> is there any bad blood between you and david? mr. topher conway: none. >> [laughter] >> i feel like there is more to talk about there. up until the last fund, your funds were in the 40 million range. your last fund was $75 million. the one you are investing in now. how -- tell us why you raised -- you almost doubled the size and what the next part will look like. mr. topher conway: we raised the $75 million fund last summer.

prices were increasing, rounds were getting bigger. sedo rounds went from $1 million to $29 to $3 million. so we didn't -- needed more capital. and that has gone incredibly well. we have some amazing companies in our portfolio. currentlywe are not raising a fund, are will probably be a little bit smaller. more in the 40 range. so you are saying it is an experiment that went well, but you are going back to the old sized funds. they must be a reason. mr. topher conway: exactly. we want to go back to basics. a lot more companies are being started. we think that is all very positive we want to take it back to what it originally was. and to be a seed fund, you need to be nimble, you need to be quick.

and trust your gut. , youur fund size grows start to think more like a portfolio manager. so we need to get a little bit more of that angel investor dna back and focus on that. mr. ron conway: the other thing about a smaller fund, it is practical and obvious, but with a smaller fund you pay your investors back quicker. investors love that. >> investors definitely love getting paid back. will you make less investments or smaller investments or both with a smaller fund? mr. topher conway: we will make the same number of investments. the investment size will probably be smaller. we will not just be a fund that is buying an option to invest more in the a or b round. funds gets larger and they start to do that.

you start to -- you are misaligned with the entrepreneur. being a true seed fund, you can be 100% aligned with entrepreneurs. >> but you are currently not aligned with entrepreneurs. mr. topher conway: we are, we are just investing a little bit more. i think we would become triple investing a little bit less. -- we would be comfortable investing a little bit less. to $75aising your fund million was the best decision you made an trumped only by the decision to decrease the size. mr. topher conway: i think very few people would ever make that decision. [laughter] i think almost every fund around has gotten bigger. we will be probably one of the only ones who decides a smaller fund is better. you guysaked out when did because you are the last ones. and we didn't. mr. topher conway: a new trend. >> yeah.

wait, there is something else here. oh, ok. what is the trend in the seed ecosystem now? what does it look like out there? mr. topher conway: we are optimized for companies who are going to be smaller. more than ever you see the number of companies that have gone out proportionate with the number of companies have been started. while valuations have gone up, we are still seeing companies making it to this stage where they are high-volume, real businesses. >> you're comfortable with the market? >> ferry. very. --

>> how important is why companies are -- y combinator? >> very important. 12 of what charge of alone. invested in >> they are so well thought through. valuate alle alumni thousands of companies, and then they went away down. bestis why you and the the read. that is why we call them the stanford of accelerators. it exactly right.

-- i will not get it exactly right, but do you guys go to sayer and smoke cigars, and you are the best, and i will say you are the best? i think it is about who adds value for founders. points. the inflection --ars give me into dustin indigestion. [laughter] >> it is all about reputation. we have a great reputation because we are about helping entrepreneurs. we have one customer, and the customer is entrepreneurs.

our entire firm is set up to hope that one customer. -- helped that one customer. i don't want to take this into the same path and that everyone does, but let's talk about valuation. do you see any problems on the horizon? >> i don't. valuations have gone up, but the opportunity has never been larger. as will continue to grow and accelerate. that creates more opportunity for the company. >> how old are you? >> 29. >> have you ever been in a downturn? there are young guys today who have never seen anything but a perfect world. he relies this goes down sometimes? >> i was there. i was in eighth grade, or high school. i did my first angel investment in napster when i was in eighth

grade. i attended meetings when i was 13. >> it was real rough on you when the economy fall apart. [laughter] >> very rough. it was very interesting seeing the downturn. nothing concerned about the overall economy and the technology economy? interest rate raising, does that worry you at all? companies that are great companies and great businesses will survive and weather the .torm if we are having a bottle top or not, i would say that no matter what.

>> we were talking about these of sessions over private valuation companies today. paul said something that struck me.

there are multiple categories of investment in the united states. , you have theq nyse, and when you have private companies. private companies is just another category. companies that have investors. most of the investors of private companies are probably more knowledgeable than investors and the public companies. qualifiedably a more marketplace to have investment. the private company category happens to have founders who don't want the scrutiny of quarterly earnings announcement, and they want to build out their business. it is just another category. let's not obsess over it. i think people are obsessing over one of the investors categories.

let's obsess over the nasdaq and nyse does he is well. >> let's talk about to do good stuff you are up to right now. are you addressing the plague of by kilis -- bicyclists in the city? >> we will not get rid of bicyclists. >> but you agree it would be for the best? >> we need to accommodate them and make the city safer. pedestrians that need to be washed out corporate priorities -- that need to be watched out for. they are an opportunity. it is a great mode of

transportation because people in cars know there are too many cars. let's go to housing. san francisco has a huge housing problem. the tech industry has a lot to do with the housing issue. since 2011, 100 and thousand -- 1000 and one tech jobs have been created in san francisco. give yourselves a round of applause. [applause] conferences goes unemployment in 2011 with approaching 10%. today it is less than 4%. the biggest problem that they had on their agenda in 2011 was unemployment. the problem is solved.

a byproduct of that is housing. a has put on the ballot housing initiative. we have a list of the ballot initiatives that are coming on the ballot in november. cannot stress enough -- >> is this telling people how to vote? >> it is recommending. >> is this legal? can you tell people to register to vote, at the same time you tell them how to vote? >> we ask and we recommend. we asked the tech industry, if we are gorgeous solve these issues, we have to register to vote in and then we have to vote grab your pencils and writes down this url.

he registered to vote in three minutes. on november 3, you vote. we can make change. companies, weech have this slate card where we recommend how to vote to make san francisco a better place. >> how many time should they register to vote? >> just once. >> thank you so much. i want to talk about philanthropy for one second. signed0 companies have the 1% blood. -- pledge. i talk about this every year. the 1% pledges were companies

pledge 1% of their time, philanthropy. for of their stock, when they were a start of turned into $50 million. they are now donating to the community, $50 million. 400 have signed up. >> where does that money go? >> wherever the company who .igns up once it most of these companies have a group of employees and team members decide where that money should get donated. this is giving back. >> thank you. thank you very much. >> it was a pleasure. [applause]

>> about two and half years ago we had our battlefield at the new york jets wrote. little company called as benefits got up on our stage and launched. talkalways come back and as speakers. please welcome back the moderator and founder of benefizenefits. [applause] ♪ housing going? >> pretty good. >> two and half years since you were at disrupt? >> two and half years. we were a finalist in start of battlefield where we launched our product. >> it has been a crazy two and a half years.

it has been a crazy ride for you guys. >> we have been very fortunate that there has been a lot of growth. it started in the new york event. we have been consistently growing since then. >> i imagine that your group is the envy of a lot of people in this room. what would you say is the most important ingredient of that growth so far? >> half of the most important thing that people can do is set aggressive goals. there are a lot of times where we as a company sat down and set goals that we thought were ridiculously unachievable. , a biges, a board member personality would come in and we thought we would go from one million to 10 million, as he , and said wired you

going to do 20 million? why not something much larger than that? we asked ourselves, what would it take? it sounds a possible, but what would it take for us to get there? we would have to hire more aggressively, split our teams in two, scale out this faster than we thought we were going to. but we 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 zenefits, which means we

only do things supported by the product, and sort of suffer if it is not. we 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 board, 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 were 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. the only thing worse than growing really quickly is not growing really quickly for a startup. it is a lot worse the other way around. growth 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. it is how 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, which is to be 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 pitch is, this is a chance to work for a company -- some of the stuff we do is boring -- but in several years time, zenefits will be used by thousands of businesses around the united states to make things 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? >> it was an area that was a real painpoint 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? >> because 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. lenders, people applying for an 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. >> today we are watching a 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, and starting in january or february, every business in the united states will have to start filing 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. zenefits will do this for free. we will track everything, keep 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

this stuff in our system, when 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 is to spend an 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. >> yeah, make all this stuff you don't like go away. we think of our mandate is everything that has a nexus to the employer record, everything 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 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 implementing it, so i am not sure why you would want to do that, but exists. our 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? >> the way we think about it is, 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. and 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. >> how do you feel about payroll then? >> i can't announce anything about new products or where we will be going, but payroll is an important spoke. we partner with a lot of payroll companies, and we want to keep those connections open. we 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 always are solid payroll systems that clients can use with senators. but it is not at that layer of the stack. payroll is a 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 cliché, but hiring good people early. there has never been a hire 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 when we have done that, 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 zenefits, i thought, listen. we are just going to have engineers and salespeople, what are these other functions, whitey need them? i was very naïve about that. it was a long time before we had really solid 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 earlier, i really wish we invested in project management earlier. all of these things where we were late. you can't do everything at once, 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. i would probably worry a lot less on evolution. dilution. 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 idea 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. you see a lot 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. both more broadly in terms of being a system of record for employee information, but also on the health insurance side. we have built 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] >> sup, guys? 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 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? 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. bobby lee, founder of btcc now. it used to be bitcoin china. >> used to be bitcoin china, now we are btcc. >> our syntec guy. let's all give a three word 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

investment in infrastructure than is really needed going on in bitcoin right now. i think we attracted a lot of interest and acquire more than $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 track soon, but i can also see 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 vc's got excited about something too young and expected massive returns? never happened before.

bobby, why don't you describe. >> it is sort of like they say in charles dickens' book, it is 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 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. there will be interesting things 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-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. if people trust it even less than they trust it today, the price could go down much further. if there is a problem with the code, if the cryptography 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 think that the flaws will be corrected and this still has somewhere to go. >> what was going on when this first started? you put in $100 million to test bitcoin? what happened after that? you actually did your diligence, and all of a sudden it was robbed by children. >> i spent 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 what happened. they were incompetent, but if you have a problem with your web donate provider, it doesn't mean necessarily that the e-mail

protocol is broken. it could mean that your provider is not up to par. >> you yourself, you're putting bitcoin private keys into space? where are you putting them? >> we keep bitcoin private keys off-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? this is a sad, sad -- is 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? you are per trade as a half god half man who comes down and does amazing things, and you are a jet li style action 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 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 event, held at dan morehead's vacation house, which 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 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 and something that people actually spent money on, it's crazy. at the same 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. but if you understand why it is, it makes you excited. this guy basically left his job, sold his company to do this. what about bitcoin could get people so excited? it wasn't just one thing, it was a lot of different things. in one case, he grew up in argentina. bobby was 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 bitcoin could matter, and what 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 it is the world's first source of electronic money and value not controlled by any government or system. it is 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 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 should not own an amount of that that you cannot afford to lose. i also think there is a chance that bitcoin will be worth more than $100 million. all in all, it is a super risky investment. >> will it stop 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. i think 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 use bitcoin to decentralized spreadsheets, or are they going to use a different kind of spreadsheet that they build? >> that's 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 50 of them are maintaining their 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. >> it's like 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 end up feeding into this so that you get the $1 million valuation? >> why don't we give these guys startup ideas. down the line, what are the startups you see connecting to bitcoin in the near future? >> transparent systems for 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 people 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. >> i think that things that have to happen, there are $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.

i would have to work in the 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. >> yeah, to me 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. i heard about a v.c. 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 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.

but they don't realize that the block chain does not work without bitcoin. the block chain 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?" he is one of the most successful investors in the world. he is exploring space with his cash. we are really excited to have him on our stage. please welcome yuri miller. ♪ 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. >> is it hard to relate to the end-users of the companies you invest in?

>> it's sort of interesting that 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 diverse city of cultures, demographics, and so on. what you see 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 selling our positions, but we made big investments in both facebook and twitter. we invested $800 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? >> the 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. we will never push ourselves onto those boards. we do keep a very tight dialogue 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. in addition, we developed this strategy of trusting the founders, so 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. but more more recently, it is 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? >> the team is really small, but the 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 makes our job pretty physical.

we have to move around a lot throughout the year. just before coming on stage, 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 >> you have to start sleeping again at some point, so you can't just not sleep for a long time.

but i think uber is really an amazing business. the reason this is so much more difficult than facebook and google is that it is very much 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 companies, because of this unique combination of off-line and online and the skill set required for that. >> 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.

when that is taken into account, the valuation is absolutely justified. i feel confident that uber will do well from that point onward. >> you said 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 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 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 facebook, it is clear evidence right now that even in a crisis 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. >> so you have a 7% stake in xaomi. 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 be a significant drive inside china and other developing markets to get a high-quality thing maybe half the price of more established brands. >> you also have investments in jd and 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. china started 10 years later, 2005 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 standpoint, off-line retail in the u.s. is doing well, so there is less of a disruptive potential and e-commerce. on the other hand, the 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 would see the chinese cities eating twice as densely populated as in the u.s., and in india, four times more densely 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. markets is that -- the recent data, especially around generation y, shows that in the next few years, 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 boomers, 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.. another encouraging sign is that 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 e-commerce being fundamentally more economical than 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 that will be chasing them and getting rid of them. i think what we see very clearly

is that there is a convergence between human brains and computers. google is a good example of that. you have 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 done so far show that if a computer is assisting a human to play, then they beat another computer. so a human 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 and breakthrough initiative. you are going to hunt for extraterrestrial life. why are you doing this now? >> it is my childhood dream. many factors have converged into launching this project now. one is that we now have scientific evidence that emerged in the last few years due to nasa telescopes that have been launched. it has become clear now with scientific rigor that there are

probably 20 billion 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 use to proliferate. years ago, we had no clue, but we know that 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 on earth emerged very early after the earth cooled down. and 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. this effort will be able to 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. if you could just pull up the first line. >> can we bring up the next slide? >> 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. if you can imagine that another civilization is no more developed than us, and they have

exactly the same telescope, somewhere in the middle of the 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. next slide, please. this is a more challenging task, 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 between the galaxies across normal distances of 15 trillion miles. it is a cheap endeavor to communicate between the galaxies, so 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? >> it is actually a nontrivial, complicated question. there is another side when it comes to flying drones, 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? not a soul in here has not used

drop box. stage, ourome to the moderator. >> dropbox has been criticized. . am you have a different idea it seems there has been a bit of meandering. i think with dropbox, we saw a lot of problems. choosing between all the interesting challenges they could take on. confusion arises

from, when we launched here like companies said, we would be much that are off not stuck on our phones or computers. fast-forward to today, mission accomplished. whereow have new problems the stuff lives 100 places in the cloud. how do i sort through all of it? customers help us work better together. someone make this complicated world simple. we have found, now we have 400 million people on a platform. is a wayre building for people to collaborate that connects every company and

ecosystem in the world. >> does that take the shape of a plaque where people communicate and have access to documents alongside that? what are you building that will take advantage of the opportunity? isthe way we think about it are puttingpeople their most important information in dropbox. of moving parts. the first is having a place for that. whatyou think about collaboration is, storage, communication, you can see some of that reflected. make it easier for you to work with other people. kind of like cloud enabling office or the version of office people already have on the you can share and

communicate from dropbox or anytime you're looking for something where you also see other people. thereng forward the fact are other people around and there is a place to put stuff, a place where you can work with other people, that is what we are seeing. >> like an active workplace. is job box growing at a sustainable rate? >> yes. is anything, we're struggling to keep up. had 1500 now. back then, four offices. we now have 11 and growing. it is a problem every person in this room, every company in the world, struggles with these challenges and has the chance to be a paying customer. it starts there. you have got to have a huge

market and a product that people love. every year, those things get better and better for us. >> in terms of growth, do you discuss what would happen if you had an implosion of sorts? we obviously heard them say this morning that they felt that was not a case and they did not see it as a bubble that would pop and implode one day, but you lost that in terms of the private market? >> we don't talk much about the broader market environment. peak in theas the market was down and it is back up again. something you have to plan for, things going well or not but for us,lly, whether the economy is good or bad, people have these problems.

leading, we only made a small dent in the problem compared to where we can go. in 2008, ornched, launched publicly, the business model we chilled was this .reemium approach subscribe if you use it a lot. an incredibly powerful base. we have layered on additional businesses those people have brought dropbox into businesses. we found companies are buying at a faster and faster rate. this is the year we have household name companies like under armour and nbc, all kinds of different larger companies.

>> how many business customers do you currently have? >> about 130,000 paying business customers. it depends. a small company, a free product while, and we have this conversation all the time. they switch over to dropbox for business. to put that in context, i think salesforce -- it is a super scalable model. we are still super early in this. >> is that end of your goals right now to snipe those whales? -- sales? to say we need to convert these

people have a significant user base using java box into paying business customers? >> it's 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. who helped spearhead that transition the office made to the cloud when he was there. >> 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. how many of you actively 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

just hide items -- hot items 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. and we really want to focus on building out and helping people collaborate. >> if you had to characterize 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 operating at a much bigger scale now. billions of connections between users. that takes a lot of attention. >> let's get a bit abstract for a second step -- second. some people have been talking about a world in the future.

a world where we don't have a file system, where there isn't a folder structure for files and people just have that access on-demand as needed in context. this is 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 world where the initial concept which 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 future, 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. you might have 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 build 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 using carousel. it's early. all of these problems are big problems. we go after them because they are important. if they were easy to solve, someone would have done it already. >> be building application for the apple tv? >> i'm sure -- 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. >> 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 the world in any country in any 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? >> what 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 microsoft, google in that 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. a lot of it is 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. we are focused 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 to pitch i guess aol your 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. with dropbox, it's like hey, as 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. these people have voted. 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. that ended abruptly and i'm not entirely sure if our next guest is ready to go but i hope shoes. meantime -- i hope she is. in the meantime, 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. i don't count my roomba as one of those but our guest might be able to help. please welcome catherine and frederick. ♪ >> let's get a show of hands first. how many people own a roomba? 25 maybe. how many of you own a drone? the same number. how many of you have mounted

a drone to your roomba? no one yet. if you own a roomba, you can thank helen for that one. you found it i robot in 1990 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. we got over 10,000 roombas out 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. after 18 years, the longest overnight success you will ever see. i thought i had another company in the end that's the fun thing and doing a startup.

>> did you feel 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. when you left in 2008, did you know you wanted to do drugs? >> -- drones? >> yes. the place you can make the most capability. you can get around with a drone 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. why did you think in 2008 drones were already possible and what did you see there? >> it's a way to cheat and get 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 in the ground robots that it would have been a stretch to jump in and create a drone company. there's a lot of robotics technology i'm bringing to the drone industry but also it's really drone technology. the aerodynamics, the control systems are very specific.

>> let's talk about the drones you have on the market now will -- now. they are different from the drones people are thinking about now because they are tethered. >> we have two drones. when i talk to 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 system 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 officers to say that you stay at 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. when 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. >> seems 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. -- thrown space. -- drone space. 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. and 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. >> you can see how it's flying completely level instead of tilting into the motion. at any time, you can replace mechanical complexity with computation. we consider that a really good thing. so that's our level one drone. >> very nice. [applause] >> don't they get some benefits 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 drones, 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 to a lot of people with drones 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.

ofthe hardware is one side the business. there is another side when it comes to flying drones, 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? helen: 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 o 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.

we will make it a little smaller. 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. some people, we found, were intimidated. >> 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.

some people, we found, were intimidated. if you walk the geo-fence, the drone will always stay in that boundary. we will connect it to keep out zones with another start up company that is making a database of where you cannot fly. for example, the white house. i took my drone to the white house. i did not fly it. the 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

operations because the fire 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 not want things to burn down. >> we have been talking about this as if it were on the market. it is not quite ready to be released. helen: it will be on the market next year. we did a kickstarter, built a 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. helen: what we did with the roomba, we did some focus

groups, and you throw it on to the market and hope for the best. put it out 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. i li t