press here is sponsored in part by barracuda neck work. storage solutions that simplify i.t. a san francisco camera maker hopes to avoid the mistakes go pro made. barrett cohn takes us inside the secret world of preipo shares. and one of tesla's earliest employees thinks he can revolutionize batteries. our reporters from barons john schwartz and david baker from the san francisco chronical this week on press: here. good morning, everyone. i'm scott mcgrew. i have been covering silicon valley since the '90s, and in

that time i have come up with a few rules. conclusions based on what i've seen. one of my top rules is don't build the box. you will not make money making hardware. case in point, go pro. the camera company went public to great fanfare in 2014 and since then go pro shares have fallen by 75% in the company's laid off hundreds. now there's nothing wrong with go pros except their hardware. hardware gets cheaper, copy cats spring up and that's why you don't build the box. apparently san francisco startup was not aware of my wisdom because they're building a box, a camera, a great one that has all kinds of features. it records all angles simultaneously allowing you to choose later in editing what to feature in the video, and amazing image stabilization. the company just got its first foothold in retail debuting at

best buy stores nationwide. now we have the co-founder and ceo of rylo. one of us has a ph.d. from stanfo stanford, i will remind you. i will also remind you, it's you. joined by david baker of san francisco chronical and john schwartz of reuters. what do you think of my rule? >> i think it's a good rule as a whole, but it's missing part of the story. also one correction. i didn't finish my thesis at san francisco -- >> there you go. >> what is unique is the software approach. so it's a camera that shoots, as you mentioned, everything around it but then the magic really happens on the software. so the camera takes a bunch of the data, right? everything that happens around you so you don't even have to point the camera and then in our app you can with a slide box change where the camera is pointing. >> fantastic. you do it later. you can tell the software if you

have your dog running around the yard, you tell the software, follow the dog after you have shot the video. >> exactly. it ends up being so simple to capture great video that people have mounted it on their dogs and that's been previously impossible with regular cameras. that has enabled the hardware and software. >> i promise the only question i will ask about go pro -- >> not me. get ready for him. >> how do you differentiate to consumers? what is different from what you do and how in a sense does that help you get an advantage? >> focusing on the answer and experience of capturing, editing and sharing great content, right? the hardware is just the capture piece, right? what do you do after you capture the video, right? how do you turn that into something really compelling? we have video simulation build in. we give you full control of determining where the camera is pointing, how it's following certain objects that

traditionally there is a bunch of gear you have to carry with you. >> a very smooth kind of movement of the camera. >> exactly. it does the panning and it's done completely in software. traditionally in filming you would use moderate mounts, it would take several camera operators operating a camera like that. we do all of that through software. >> granted we see copy cats tend to start out with the hardware but they go off saoftware. there are engineers that they know how to reverse engineer. how do you keep ahead of them? how do you keep that from happening or stay a step ahead? >> the dma is software. both me and my co-founder, we build a bunch of the tools that people use to capture and share photos and videos. we've seen a lot of the challenges that people face in making great videos. that's what's led us to build this company. i think it's also easy to under estimate how difficult this is to make, easy to use in terms of

software. we've seen firsthand of instagram where we spend months getting a slider right and most people wouldn't go to such great lengths to get to that point, but the reason we care is it's enabling you to steal the experiment when things seem effortless, you get to the magical experience. we do a lot of processing but we completely hide it from the user. it's working, there's a lot of math happening. it's all live, you never have to wait for it. >> i'm going back to go pro because it's an obvious analogy. once you've created demand for this camera, one of the things go pro ran into is i have a go pro, they tried to upgrade, this one is better, this one is better. meanwhile, there were so many copies of things that hit, not rip off copies but the same idea from cheaper companies. how do you stay to the point where people are still buying

that camera? do you upgrade? do you lower the price? i realize it's hardly your first problem right now because this camera is essentially brand new but where do you go from here? >> we've been stripping shoft wear updates since launching. we'll have major features like time laps and other things and that is atypical for cameras in this space. typically you buy a camera and whatever software it came with, that's what you've got. we think of this as a device that captures interesting content. then there's a lot of things you can do on the software side. it can build new ways to share it. >> how do you keep revenue coming in other than sielling nw cameras if the upgrades are free? >> right now we're focused on selling this. as you mentioned, we're in best buy, but if you think about this, like this is a device that captures your memories. the memories are some of the most valuable content that are out there. capturing is one piece of it.

sharing, organizing, going back and looking, that in itself has a lot of interesting manife manifestatio manifestations. >> john -- >> read my mind. >> you and i have worked together for a long time. >> i know. that's creepy. that's crazy. sorry. so the significance of best buy in an online world, i mean, is it retail? >> yeah. yeah. >> why best buy and why retail based on the overhead costs? >> yeah, a lot of demand from customers, actually. they want to see rylo in person before they make a buying decision and the other thing best buy -- >> just -- excuse me. so when they go to best buy they want to try it? they want to demo it? >> they want to see it and we build a fully interactive experience inside best buy so you can not only see what the camera looks like and feels like, but you can also see how the app works. these are software experiences. so the answer is there. a lot of people who buy consumer electronics, they want to

experience before they make a purchasing decision. >> is that device made in china? i mean, it's designed here but where do you manufacture it? >> designed here but manufactured in asia. >> asia. >> in china. >> okay. in china. >> there's a taiwan component in china. >> understood. and there is a difference. with donald trump talking about tariffs and gadgets and electronics and stuff, has any of that talk affected your business yet? >> it hasn't really. the reason we manufacture overseas is -- >> i'm not asking you to justify it. everybody manufactures in china. >> like the foxcon ceo talked about how they're thinking about alternatives around the tariffs. as of monday, tech hadn't been affected by the tariffs. >> yeah. are you aware of any effect it's going to have on you? >> you know, honestly i haven't

followed that and i'm not really aware of that affecting us at this time. >> fair enough. alex from rylo, we appreciate you being with us. i tried that out. hold that up. it is super cool and i really enjoyed giving a try. alex, thanks for being with us this morning. few silicon valley unicorns are choosing to go public leaving employees with shares that don't make money. a way to cash them in when "press: here" continues.

welcome back to "press: here." uber and pin interest and airbnb were worth a billion dollars. the problem is as far as we know none of those companies are going to be public any time soon. if your company doesn't trade on the stock market, you can't sell your stock except maybe, yes, you can. derek cohn is an expert on buying and selling shares in companies that aren't ready for their shares to be bought and sold. barrett is ceo of scenic advisement joined by john schwartz of barons and david baker of the "san francisco chronicle." this is a secondary market, right? pretend i have no idea what that is. explain to me how somebody can sell stock if it's not on the stock market. >> the secondary market is just like buying anything that's -- it's like buying a used car, right?

when you go to a car dealership and you buy a car off the lot, that's the primary market. when you go to craig's list, that's the secondary market. >> okay. so there are shares out there of uber or pinterest or other companies that aren't public that can be sold and bought? >> a whole market has emerged dating back to sort of facebook amongst late stage technology companies where, yes, people are buying and selling private company stock. the phenomenon of companies staying private longer is very real, especially late stage technology companies because there is an abundance of capital for those companies to fund them, to -- large institutional investors. in fact, the largest in the world, they're saying grow privately. some of them are getting megacap valuations, you mentioned one, uber, and when you're ready to go public, when you are a real company with real revenue and sometimes even profit, go public

and what we're often seeing is those ipos are not even fundraising events for the company. they're just a means to get liquidity for employees and early investors. this whole secondary market has emerged. some of them have gone private. >> one thing to focus on is the late stage private company market is massive. a decade ago late stage private company valuations are about $5 billion. today they're about $600 billion. you know, 100 x growth over one decade. that's not employee stock that's making up that, right? what's driving the secondary

market and late stage private companies staying private and ipos sort of drying up is the availability of institutional capital in huge numbers. we saw yesterday that lyft raised another big round, right? doubled their valuation. >> valuation up to 15.1. >> fidelity has $8.1 million invested in the company. >> companies are getting the money. they don't need to go on the public market. if i'm an employee, how do i sell what i've got ahead of time? or if i'm watching this television show, i'm like, i wouldn't mind getting a couple of shares of uber. how would you go about that? >> so on the investor side, the easiest way to buy private company stock is to invest in the mutual funds that are buying them. those are accessible. you can buy the ticker. there are lots of mutual funds from large mutual fund houses that own that stock. >> these are mutual funds that are investing privately? >> correct. and buying a diversified

portfolio, right? so you get a sort of basket of these stocks as opposed to buying a single name. >> does the state of the ipo market have any impact on your market? >> right. >> this year it's been better -- can only be better than the last couple of years. >> right. >> does that have any impact? >> sure. the state of the ipo market is sort of our whole business, right? we founded an investment bank when no one needed more investment banks just for private companies because this new phenomenon was taking hold and real capital was being deployed, real enterprise values were being had. what's happening in the ipo market is not only as you eluded to are there -- there's more this year, but there's still materially -- >> just a fraction? >> down 15% of where they were five years ago. not only are fewer and fewer companies going private, technology companies, but when they do, they're floating half the stock they did five years ago. we saw recently drop box,

docusign, z scaler, spotify, adienne, a few companies. collectively those companies sold around 10% of their float, relative to the rest of the market, non-technology, they still sell 25% or so of their float. i'm happy to unpack that. the point is, not only are there fewer ipos. there's a lot less stock in the market. >> if you're an individual investor and you're interested in getting into the secondary market, are those shares being traded in any kind of investment platform that people can go to? >> there are retail investment platforms to buy stock. what i will say is this is an institutional investor's market for a good reason. these are still pretty young companies. they're complicated and when we sell and we only sell stock to institutional investors, that's our model, period. the amount of diligence that

goes in to making a decision whether or not to invest in one of these companies, whether it's 5 million or 500 million is pretty significant. to date individual investors don't have the ability to do any diligence at all. >> just one last follow-up question, this is all we'll have time for. you say we only sell to institutional investors. >> that's right. >> where are you buying from? >> right. >> i imagine you sort of like the guy out in front of the giants asking if anybody's got tickets. is that what you're doing is standing outside of uber? >> that's not. we work with the company's mandates. so as an investment bank, we only work sort of on the company's behalf or on a founder's behalf or on an early investor's behalf with company consent which is why we do have the information, we do have access to data. it's a different approach. >> baron cohn with scenic advisor, thank you for being with us. >> thanks for having me. well, one of tesla's

earliest engineers has an idea that could turn lots of cars into long range vehicles when "press clop cl "press: here" continues. ges impacting you. plus: the scam stealing six- figure down-payments from bay area home buyers. the frightening fraud and how widespread it )s getting. )today in the bay ) monday - 4:30 to 7.

"press clop clon here" is available as a podcast on itunes. welcome back to "press: here." we talked about advances in technology but let's talk about technology that disappoints. batteries. our devices get faster, thinner, cheaper. we take that for granted, but battery technology has not kept

up. batteries cash fitch fire and t lose their charge. they're the weak link. if you could build a better battery the electrons would beat a path to your door. at nano tech they're working on batteries to make them 40% better. that would be amazing. what they're doing is a secret, but we know it has something to do with the powder in these glass orbs. jean burcheski is the ceo. he knows what the powder is. he's so smart forbes named him as one of the most important people under 30 so m.i.t. named him as one of the most important people under 35. he was employee number 7 at tesla where he created that company's first battery. thanks for being with us this morning. employee number 7, were you there before elon musk? >> martin everheart was the ceo. elon had been an investor. >> but he wasn't an employee, was he? >> correct.

>> you were there -- got a lower than elon musk. >> we can go with that. >> i enjoy going with that. so i talked about the secret powder. i know physics on a sunday morning is pretty tough. >> yeah. >> what's going on that you're changing battery technology? >> yeah. so inside the battery in your phone and car there's an anode material that can store more of a charge. >> nobody ever thought of that? like oh, that's genius? >> no, the periodic table of ohms is small. it's been thought of and people have known you can store more charge. no one has made it practical and manufacturable at scale and make it drop into existing battery manufacturing infrastructure. >> is it over stating it to say that improvements in battery technology is in a sense like the holy grail in high tech? in a sense, it solves or improves nearly everything? >> yeah, i think that's right. i think in the sense that we

actually -- we expect the device manufacturers and car makers to take advantage of it in different ways. in your phone you might have 5g sooner, you might have better sensors, better cameras, things like that. you can make pretty much anything better, and the battery is in many ways the weakest link. >> you ee leluded to it a minut ago. the periodic table is set and fine. what was the engineering stumbling block that kept this technology from getting incorporated into batteries already? is there a particular problem? >> there are a lot of them without going into all of the details. silicon can store so much lithium when it's charged that it swells up about 4x. how do you manage that in a battery without having the battery expand and cause all kinds of issues? we were able to design a material that essentially contains that and keeps the entire particle constant in volume and so that keeps it -- lets it cycle and doesn't degrade the battery.

>> i should point out you don't make batteries themselves, you make them better. your secret sauce is the material around the silicon? >> around the particles and how we manufacture the particles. and once we've manufactured the particle, you're exactly right. we actually ship that material to battery manufacturers around the world. so anyone who makes a lithium ion battery can use our technology. anyone with a lithium ion technology can use the new battery. >> this is happening now, right? >> yeah. so we're scaling up production right now. we'll be launching next year in consumer devices. we'll be in millions of devices next year. >> tell me what that looks like. is it 40% longer charge? 40% more power? 40% more what? >> we work with both the battery manufacturer and also the device manufacture manufacturers. >> let's say better. what does the world look like with better batteries, whether that's cars, iphones, anything else? >> the big division is in cars. you can enable all cars to go

electric. the biggest challenge is of course cost. if you can use 40% batteries for the same range it will cost you 40% as much for that battery pack. that's the most expensive part of the electric car. >> think about the people who i guess are going to be your custome customers. if you're panasonic, tesla, you have a factory cranking out batteries. do they need to install any different hardware to use this at all? >> no, that's a big difference between what we work on and what others work on. we can drop into their giga factory. let's take tesla as an example. the main play capacity is 50 megawatt hours. ours becomes 65 or 70 without any investment in cap ex. that's a very attractive proposition. >> so are you talking with them? >> exactly. we haven't announced anyone other than bmw as our partner. more announcements coming in the future. >> it's interesting you brought up bmw. one of my theories about tesla,

gorgeous car, the reason you really want it is range. i mean, there are lots of electric cars out there and they go 80 miles and that's worthless. at what point, maybe it's soon, does the bmw catch up to the tesla? i mean, if my bmw electric car can go 300 miles, i'm real interested. >> we're working with other car manufacturers to make them go long range and an affordable price. next year you can buy cars that go 200, 300 miles and they're still on the higher end. our technology hopes to bring down that cost for everybody. i think in the next few years we're going to see an explosion of options in -- >> do you think that will have a significant impact in the number of cars that we buy that are electric? >> dramatically. so the growth is already 50% every year for the last six years. it's not going to slow down. what we're seeing -- >> do you think it spikes. >> 60% every year is -- >> i know. that's pretty big. >> very fast.

>> but i mean the fact that the very heart of the car is going to be significantly improved. maybe that's the last obstacle entry for some people. >> yeah, that's right. right now we still see half the auto manufacturers truly believe and really going for it and half are not. i think that's where we will see who wins and who doesn't. but i think as technology really reaches a tipping point, all of them will go electric in a big way. >> it does look like the 200 mile range, somewhere around there is the tipping point. if you look at last year's sales data in california, the best selling electric car wasn't a tesla, it was the chevy volt. it sold really well here. it's because it has the range and a price more people can swallow. you're talking about extending that to all models. >> even further. even the volt can take advantage of the technology and be more affordable or go maybe 300 miles which some people are waiting for that. >> you had eluded to the r50% every year which reminds you of

chips. they got better, better, better, smaller, smaller, smaller, cheaper, cheaper, cheaper. batteries haven't. you think you have a system that can do that? >> the batteries have been the same system. sony launched the first lithium ion battery. they've gotten better in 28 years. the chemistries we work on can reach a plateau double. over time we'll get there, but the periodic table of elements does run out at some point and then we'll work on other advantages like very long cycle life. battery packs that can go a million miles. >> gene is with cela nano tech. >> we'll be back in just a minute.

that's our show for this

week. my thanks to my guests and thank you for making us part of your sunday morning.

i'm damian trujillo, and today, what are your children eating during lunch for the summer vacation? we hope to have some answers, plus some mariachi classes on your "comunidad del valle." male announcer: nbc bay area presents "comunidad del valle" with damian trujillo. damian: we begin today with some summer answers. with me from the work2future program is jose rivera, also ruby carrasco is with the san jose works program out of mayor sam liccardo office. welcome to the show. ruby: thank you. damian: and ruby, your program has some of those answers because you're giving these youth some very viable options during the summer. ruby: correct, so, right now, we are actually running our summer works program through san jose works. like you mentioned, it is a mayor sam liccardo initiative to provide and close that gap of unemployment between our youth.