mark zuckerberg outspoken, entrepreneur aaron leevey is the new college dropout in silicone valley. aaron is my guest this morning. plus, rethinking the old tired travel site and record ipad profits. our reporter sara lacy and john schwartz of usa today this week on press: here. >> good morning, everyone. as a college student, my first guest used $11,000 worth of poker winnings to launch his first company. a risky move, riskier considering they weren't even

his poker winnings. aaron leevie used his roommate's poker winnings to launch box.net and the decision to go on in paid off. box.net just got $48 million in funding, which makes aaron leevie a hot name in silicone valley. >> you have to do something that's actually really, really exciting. >> box.networks with big businesses to help employees store documents and data easily in the clouds. >> "the wall street journal" called his precocious. sara lacy, john, we'll let the precocious comments go past. >> i frequently have two words anytime i'm in the room with aaron leevie. >> what's that? >> calm down. >> because he's interesting and

dynamic and you just told him not to do that? >> and, remember, let me start with the business that putting things in the cloud for enterprise, as more and more companies are online, as more and more portable devices are out there, i'm thinking this becomes more and more important. >> we actually agree. the -- every business in the world is moving all of their information and all of their systems to the clouds. and when you think about that transition that's going on right now, the entire enterprise software ecosystem, the entire i.t. technology world is going through the biggest transformation that's ever happened. we're just fortunate, you know, to have built a technology that sits at the center of one of mess major transitions right now. >> if you have an ios device, you can't use icloud. >> we like that memo, actually. >> i bet you do. >> that's more business for us. actually, there's two kinds of companies that are emerged in this base. there's the consumer companies that create some challenges for

i.t. virus and there's other solutions that are focused on moving the i.t. strategy to something far more productive, far more fast moving and that's sort of what we feel we're offering for i.t. buyers. so large and small enterprises that are using box successfully. >> you've become a american evangelist that enterprise can be a hot space. you're your sort of, i guess, analog has drawn a lot more attention than you. >> can we break that in and explain it real fast. there will two companies. he's worth 5dz million. >> they're the consumer end and they're competing with -- >> well they have a greater

liability risk right now with what's going on with backup load. >> most of the guys starting, these kooipdz guys kind of came out of the oracle school. >> you're suggesting they have experience? >> no, no, you are like this young, energetic, you know -- like fresh out of college. there's not many kids who come out of college and say i'm going to do an enterprise company. did you do that or were you just like, oh, wait, i want to make money. >> when we started the company -- >> consumer, right? >> everybody sort of starts out. you are a product of the worldly environment that you're used to. so when we were in college, we

had no concept of what procter & gamble needed for their i.t. systems. the one interesting thing about the background of the company is we were in an environment that resembled a major corporation. when you're in krej, college, the i.t. systems aren't that different. most of them for universities are the same that you would see for large enterprise. so the problems that we were running into in school were actually the same exact problems that were happening in large organizations. so the technology that we ended up building wasn't more from just what an enterprise would need. it took some time to fully recognize that. from a timeline perspective, that would be early 2007. we had to choose one and ultimately we decided to go to the energize gap. >> you guys were growing like

five times. there were like 100 plus people a year ago. now you're on the wrap-up plan for 600. you guys just moved into a new headquarters. >> we just crossed about 410 people. and i should say that i actually -- you know, between david and tony and all these guys, there's a lot of amazing stuff happening in the enterprise space. but absolutely, we're trying to build the next generation enterprise software company. it's going to take a lot of technology for that to happen. >> is it hard to work for that company? >> you know, it probably was harder five or ten years ago. i think today what was real interesting about the dynamics and the market is we can attract the same kind of people that would normally be building farm games and often have a much better experience by building -- you know, taking a business software that's going to change how people work. you get the same kind of scale as the consumer. we have over 10 million users. so we're pushing code to the

site every single day and every single week. the speed of innovative that's happening very much resembles facebook. but the benefit is that we have a model that you can understand. >> why does procter & gamble trust you? this is a brand that's been around 100 years or more, right? you're, what, 26? >> i am 27. >> 27, oh, well, never mind. but you're a relatively new company, started by a guy who is the ceo in his first company. >> we tried to have a ceo that was over 100 years old. there were none on the market. >> they're all retired 37. >> in silicone valley, it's not unusual for a young dynamic fresh guy -- >> or woman. >> or woman to be young. >> sure. >> but let's take all of our

very valuable data and give it to that guy. >> yeah, i don't think how they're thinking of it. i want that guy right there to have any data. we built up a very strong organization. if our chief operating officer were here, you would see a very different kind of face. in fact, our ceo has a beard and lots of gray streaks in the hair. >> i have some gray. >> i have more gray under 30. >> and let me point out that a lot of gray has old people that messed the country up. >> i'm not going to get there because that's 50% of our work base. >> the 1% is 50%? >> the way that we've been able to be successful with the largest enterprise in the world is we focus deeply on security. we focus deeply on our operations. this is the issue that challenges any company that's trying to both balance consumer and enterprise. the things that we're doing to be successful with prakter and

gamble would preclude us from being successful with having my mom share photos. how do we go out and make sure that the largest enterprises to go out and get our need? for procter & gamble, they were looking at a situation where the alternative was between five and ten times more expensive, they forced their employees to move much more slowly. it's sort of easy to think about these organizations as slow and conservative, but ultimately, there are people in all of these organizations trying to develop new innovative strategies, procter & gamble is an example of one of these strategies. so there are teams and individuals and large organizations out there all throughout the world now that's trying to use the cloudy examples. >> there are a lot of start-ups in the security space. security, does that give the advantage? >> relative to the enterprise,

this is the important part of our background. we didn't realize this a couple of years ago. but our key competitive advantage is that we balance the complicity of the consumer world. with the security and scale that they use from a microsoft or oracle. and very few companies have found that sort of -- it's a very small -- sort of like you have to get the moon and the sun to merge at just the right time. >> john, i know you're -- >> at the risk of making an idiot of myself again, i understand that you're a magician. >> yes. >> do you have a -- >> well, where is the camera, actually. >> it would be this one right here. >> can you take the coin? >> yes. >> oh, my god. >> all right. we made a coin disappear on live

television. >> we didn't even have to edit that. >> oh, no. >> i take. rethinking the way you travel when press: here continues.

these days, it would be unusual not to book your hotel reservations on expedia or priceline. but some entrepreneurs at guest mob have a new model.

they guarantee you on a heavily discounted price at a quality hotel room, but you don't find out what hotel until just a few days before your day. that is because guess mob auctions your portfolio off at the last minute. >> the price you pay at a hotel could be half the amount you would pay even on this. the tour bus pulling up to the hotel and the tour bus operator going out and saying, i've got 50 people in that bus. what can you bid me? and then going to the next hotel. that's half the holths model right there, right? >> that's part of the model.

we have this expression that we call the bag of cash drive where we're basically approaching a hotel rel ofly last minute. and we've got a bag of $20,000. and we've got 50 people and we can learn, you can either get some or the guy across the street will get some. if they have capacity and they haven't sold it on the traditional channel, they take it. >> i think it's stucht tosy the way -- you need to be on the side of the consumers. and i feel like your sites have all been on the side of the travel partners. now they just have, you know, kind of become the storm act where they've been totally on the side of, like, a advice and the rental car companies and

everything else and no one is on the side of the consumer. we feel like because you can go online and book it, suddenly we're supposed to love it. innovation is good for the consumer. >> and the other half of this is that that hotel is guaranteed no matter what. >> when i book it on your site, i'm getting the analogy or i'm going to bid you out, but she's going there. >> within a certain -- we have a concept of connection. it's not kosher to say this on television, but we view it as a commodity, right? we don't work with the four seasons. i've got both of them across the street for one another. for some customers, they're interchangeable. so why don't you price it in a relatively commoditized way, it's still a high-end product,

but i want to get the best price that we can leave with one on either one of them. in the case of the buck, if you go to a customer and say, hey, i'm going to do this thing, go stagecoach, you're not sure you're going to get the hotel or at what price. so there's an unalternativety that works out. we're going to make a prediction to what we think looking at that hotel or taking you a risk away from you, the consumer. >> we guarantee you the room. we'll get you if you can give this basket. >> which you name. >> when we name. the collection is something that's very manly. a lot of times looking at these hotels and asking yourself the question, would i send my mom to

this property? >> it either needs to be occur rated or it needs to be used -- >> we're doing both. so you start with the crayation when you start the basket and then the algorithms come in. i'm a nerd for using a lot of data signals to say, what do we think is going to be the right level of occupancy metrics and demand metrics? we're making that guarantee, right? we're doing doing these sort of off and wind -- >> so the data is following you. i say february 8th, and then you see san francisco february 13th we're going to get the $130 price. you're then going to go out and bid me and everything else that wants to stay in this hotel at that price. if you get $120, you keep the

delta. >> and if we get $140, we get hit. there's a set of data, so we get, based upon the other factors that we throw in, we were off. so now on the next side of metrics, we will bid 40. >> this is not a whole lot different than selling wheat on the trade. >> think about how you think about a derivative in oerms of dropping. if you know it's going to go close to zero, technologically it goes in for the marginal government. >> i love to foresee the night. it's across the cleaning and across the shampoo bottle.

and this is supposed to be the internet. between 440, that's what i learned. >> and you saw this flaw in this crowded market. >> that's where we got into it. i'm coming at it from an analytical, this just doesn't feel right. there's something going on. >> so how do hotels feel about you? >> well, it's interesting. there's the hotel property itself, the guy or the gal what run tess property and then there are the brands that get a commission from the hotel. the brands aren't super about what we're doing, but the haelths, we're saying, hey, sell as much of brand as you'd like.

we're coming in last minute. what is going to minimize it, we're going to solve a timing problem. there's no channel cost, but some of them, not all of them, some of them are happy. whenever we have a collection of eight or ten hotels, then we have several friendly ones. >> which hotels are working with you? >> we don't disclose exactly which one. we show the entire collection, right? some work out for us. >> people some open. >> up next, apple at told ought of a color.

welcome back. it's with a certain amount of fear that we bring you this next video. >> three, two, one -- >> this video of a couple of guys in san francisco smashing a brand new ipad will get millions of views on youtube. it's a stunt, yes, but it's also an advertisement for a company called square trade. warranties that make -- >> for a certain fee, square trade will ensure your device from damage like there. now, the video is fun to watch. but for those in the media business it's sayre phiing. >> the ceo of square trade is a

graduate of harvard business school and is messing up traditional advertising. >> i'm new media. you can do it. >> so you get all kinds of hits because kids love watching this. it's brand new. you have had three, what, last friday and i broke it by friday afternoon. so kids love that. does that translate into any emotional sales. >> you know, at least a year or two ago, i was recording that it was the second. it's not a linear sale, but it's a broad awareness that square trade is -- >> sooner. >> yes. and i think one of the key things for the video is it's not an outright advertisement. it's more about making something

emotional, somewhat obedient. >> i actually think you're doing a public service. didn't "the wall street journal" just do a story about iphones and ipads? they can be fragile. >> let me adapt his question. are you advertising for the guys who fix ipads? that's not what you do. >> yeah. listen, i have two daughters and they play with the ipad differently than i play with the ipad. >> this one is just a simple drop. this is what happened -- >> accidentally dropped it on about 25 hammers. >> this was probably a couple of drops. i think what we do is, hey, a little fun. but, b, all of us have a friend that are carrying around a couple sheets of glass and they dropped it. and sometimes this thing can

drop ten times and never take a smash and sometimes one good drop and you're out 600 bucks if you don't have a warranty. >> and you still advertise other places. >> yes. television is awesome, by the way. i don't know when you've heard. >> we're trying to change the way consumers feel about warranties. so the same thing with the device. seeing that things do break, unlike the only way. they say, you know what? we're carrying around things that aren't very impressive. >> i don't know. you can't fit an ipad in a blender yet, so we're working on that. >> is there anything that you just couldn't break?

>> we do tend to focus on things that we can fix. one of the big things being a warranty company is we can turn around and fix the thing that we just broke and use it again. tongue and cheek, we try to make it practical and we do try to do things that happen to be. so we're not dropping at shoulder high height. >> have you anterior frheard fr apple? >> no. we compared the ipad to the al axy and then we did the iphone to a samsung. manufacturers love it. >> out in the air. >> we have to go to a commercial. your video is available on youtube under squaretrade.

>> that's our show this week. next week, reed hoffman. if you'd like to see that square trade video again, we put a link on our website. thank you for making us part of your sunday morning.