>> business news from t the capital region. this is "washington business report" with abc7 national correspondent rebecca a cooper. thanks for joining us or a fresh look at business and finance in the washington region , i am morris jones. how, a womanoday who broke barriers in her field in the 1980's to cree a business custom-mamade to solve problems, and government innovation. it is s not an oxymoron. we have the man that will tell us about national security and have easy entrepreneurs are stepng up. of ourthe conclusion interview with overstock.com ceo patrk earnrned. last week he tolus how his personal fend and mentor warren bufuffett guided him through his projects a

successes. he also alluded to some of his beefs with wall street. more details into on his theories and how many people react to them. you are wearing a lot of hats. you are still very much running your company, a major company. you are an active philanthropist. you are a very active advocate here you are here in washington now to speak at a monetary conference here at the cato institute about your passion for digital currency, replacing the stock market. day to day, how do you look at these different big picture items and balance your daily life? >> it helps not having a family, just the cats. i am a bit of a recluse, and i get to spend a lot of my time picking about things and seeing -- a lot of these activities not only oveverlap, and are synergistic. if i spend all of this time

working in building this platform with e-commerce, it occurs to me, usually it is some light on moment. i think, we can apply this to that. >> let's take this to overstock. so many different facets of it. you can look at different things that the company has to offer, from mainstream businesses, world businesses, you have taken , a smallg countries woodcarvers somewhere that has special things to sell, great products, to pets. you are helping peoplple not jut with shelter pets across the nati. how do you bring together all the different facets as one company? >> we realized the technology we have built was all about connecting people, and would let us cut out the middleman in a whole lot of differentreas. we started farming out all over the world and finding artisan, inging their products in and

selling at a minimal markup. we try to make no money. we tried to run at breakeven. sometimes we make money and we take that and build schools. about 8000 kids in africa, central asia. a few horses, cats. i am turning into something of a william your novel. -- faulkner novel. we can turn this technologinto pet shelters around america. we do nonot deal with puppy mil, but rescue shelters. you can have one place where you can search all the shelters in america using this great search technology we have built. we starteded doing the same thig with entrepreneurs. we call it the mainstream revolution. getting small on jupiters around america plugged in. people with very nice businesses, half-million dollar businesses under their garage. we think of ourselves more as a plot or.

i am not out there like amazon with it the warehouses. i would much rather create a plot on that entrepreneurs can plug into rather than a system that squeezes the amount. on yourer big influence life, you say since your 20's, you have been grateful for every day you have, three-time cancer survivor. whwhat is your six-month philosophy? >> you have dug up some oldies. didid have cancer a few times, was treated at georgetown, save my life at one point. ththen i spent about three years hospitalized in and out. when i got out, i did not know it was or the last time. i figured i had six months to live. i thought, what do i want to do? if you told me, a 20

five-year-old guy, you h have to weeks to live, you would probably choose something that were not very productive, but with six months, i tried to do something useful. so i chose something to do, and that turned into something else. every six months i w would reevaluate, thinking what do i want to do? it sms like i have another reprieve. about 35 5 before i realized i had been living my life in these six-month chung. i thought that is probab not a bad way to live. concentrate,o focus, get a lot done, and someday you will be right. >> so what was the first agenda? >> i went to stanford for a masters degree. recover in theld hills of stanford, a nice way to spend nine months. cambridge.

i ended up getting close enough to my phd, i decided to stay and get my phd in philosophy. >> what were the things that you did right that allowed you and overstock to win and be the big one to succeed? > i think it goes back to tht buffet principle i described. all kinds of fax and groupthink on the internet. they were making such obvious mistakes. if we do this, somebody else will come up with something more valuable rather than building intrinsic value. we focused on keeping expenses tight, growing revenue, having margins. all the things your grandfather, if you ran the hardware store, that is how we ran our company. >> i don't want to get too technical, it is you should write a book about your velocities on washington alone. you are trying to explain som

of the worst practices on wa street. what wou you say? clear, i have nothing against shortselling specifically, but they give it this way. when you watch a movie, you know there are groups and gafferers d people running the lighting, but it is a background assumption. but when you buy and sell stock in the stock market, you know you are gigiving money, in some sense, you are getting stuck somewhere and you assume therere is all the stuff happening in the background, all th plumbing, so to speak. and you asassume it works a certain way. i promise you it does not work anything like most people think it works. there is a lot of fault tolerance in the system. in theast decade, some chararacters figure ouout how yu could use that all tolerance to play games and manipulate the market. it was very difficult convincing anybody here in washington, d.c. of this, but the evidence for was overwhelming. sec,d to come to the

senators, the tough guys would come in with me that w were part of it and explain. i read all of these people wewee on the edge of criminality who were willing to come in and talk and explain. very few people in washington would listen, but there is one corner of wall stree that is all mobbed up, and they are the ones that handle the settlements. they had figured out the games. eventually -- and i know this sounds a little nut job -- but ere is a blurry line between organized crime and some of our nation's enemies, like the russian intelligence service, pakistani isi, rue pakistani .ngineers amid extremists evidence thathis they were working together to manipulate and maybe crash the

system. post"ess -- "the new york woodlin photos of me with ufos coming out of my head. when everything went down, they had all these conferences, and they did three out of the four things i told them they had to do. it is kind of a chapter in history. i am told that when the history of wall street is written, there will have to be a whole chapter written about this. another aspect of my claim, and the city into the cato in two, is something called regulatory capture. it is an economist tm. regulatorss of these to protect us from certain industries but we forget that somemes ththose regulators become captured by the industry they are supposed to regulate and they get turned against us this is my objection to the left. i have a lot of friends on the left. generally, correct about the problems, but wrong abobout howo

fix the problems. this is an example. they want these muscular regulators to stand up to industry, they neglect to nsider what happens when that good regulator becomes a subsidiary of goldman sachs. then you have the worst of both worlds. >> clearly, a disruptor, willing to put yourself out there, willing to risk being called eccentric. clearly brilliant and still running a publiclcly traded company that keeps growing. what do your shareholders say when you are pushing the envelope like this? byrne of them are named -- >> that helps. >> another 35% are a canadian company, fairfax, an insurance company, sort of the warren buffett of canada. thatare quite unique in

they share my feelings about wall street. i think -- it's not why they invested in us -- but as this flight route, ey stood behind me 100%. their attitude is frankly go get those bums. >> a man with many ideas and passions and not willing to settlele for one. patrick byrne, thank you for joining us on "washington business report." >> straightahead, our small business spotlight. anlook at a woman who was innovator 26 years ago and continues to be today. we will be right back.

>> in our small business

spotlight, a vision, plan, and a whole lot of determination. back in 1998, the nonprogrammers were rare, but fran craig did not let stereotypes or label slow her down, and that is why her unassuming company is so profitable today. >> i just knew it had to work because it was a problem that needed to be solved. helpr vision is to companies run more efficient operations. >> instead of having a timesheet system here, and expense report system here, many of our competitors operate like that, budgeting, planning systems, reporting system, general ledger, and they cobble them together with chewing gum and rubble brands. ours is all-in-one. >> we wanted to look at a variety of other options and how people are using mobile devices. >> greg sees beyond the status quo and hurlers do not scare her. webe are doing a lot of

based development. somethingwe could do where we could get immediate results. i focused on our customers like merck, mci, something where we could get immediate global one, freddie --ticipated, and ask them actually i wrote a proposal to them saying, fund this and we will give you so many licenses. >> unanet software is constantly being updated and d specialized. her team is a strong one. it is like family, literally. she has watched heher son move p to the rags to be a top salesman. >> people ask me all the timee what it is like working with my mom here and i have a direct relationship with my mother, so it is like working when it -- with one of your best friends. >>mom here and our revenues are% a year. that is pretty good. >> the company is a success by most measures and is not

beholden to anyone except its customers. .> unanet is also funded there is no private equity, no venture capital. to be frank, there is no real interest in taking that on right now. it has been a decision that we made to focus on the growth of the company. we have invested in ourselves rather than taking on outside capital. the important thing about that is it allows us to focus on our customers. drivestomers of unanet the product roadmap and the company strategy. >> we had a couple of hard times . when we first went out to .com's in the 2000. then all of that one away and the customers went away. so we looked around and looked at what was stable, so we went into that market. >> the hardest part in all of this is to locate the right project. >> i remember somebody was painting our house when i was in fifth grade and he said what do you want to be when i grow up?

i said i wanted to be the president of the united states. i am not president but i am the ceo of unanet, sohat is good. >> coming up, government

>> welcome back. the pentagon is making clear it wants innovation for nontraditional soues. for the washington, d.c. region it means a door is opening. startups which have been chomping at e bit can't provide expertise in government techlogyn brand-new ways.

joining me about new opportrtunities and challenges s jonathan aberman of amplifier ventures. government innovation sounds like an oxymoron. what do you mean by this and why is it so? >> simply put, take out your cell phone. everything tt matters came out of the relationship we had with federal security r&d a the things that drive the economy. wewe are where we are as a natin bebecause of national security research and development. that is what i mean by innovation. the issue now more than ever is many new industries for technologies to drive our economy and to meet the emerging national security challenges. >> you are trying to convince government to do this. by the time they get funding for new systems, they are two years behind the curve in technology. how do you make them keep up? >> the good news is, we do not have to convince the government. secretary hagel last week, a whole host of people in the

tional security establishment, have said over the last couple of years, wewe need to get natitional security innovators d innovation into nontraditional source the threats we are facing to national security are frankly entrepneurial in nature, rapid moving. our socty needs to be more innovative and entrepreneurial. suggest the national security agencies are interested in being more innovative, why do -- why do you think so? >> i have been involved with the department of defense in the last couple of years. this is a trend that s a lot of support and is growing virally within the ageies cause, frankly, it has to, because of the challenges we are facing require more rapid and innovative responses. >> what are the risks to our region if we do not take advantage of this trend? >> it is an existential challenge for our region. we have benefited from an enormous religion with

government contracting services. the issue now is so many of the issues we face a rapid moving and have short breh cycles and are more amenable to innovators and entrepreneurs. country,ions of the for example, silicon valley, boston, and elsewhere, have highly developed national serity product ecosystems. we need to retool thee economy around you to do thahat. >> what are you doing to deal with these changes and how can viewers get involved? >> a year ago we launched a program in arlington county. it brings together onto printers andgencies with the expressed purpose of jumpstarting national security product companies. we are having an event on tuesday night where we are bringing entrepreneurs from 15 topanies to show their wares darpa, dia, and so forth.

it is a great initiative, a lot of support and momentum. >> you have worked with the darpa in the past. what is the economy looking like in next year? the problem with b business, government and private, ishat they are sitting on their cash becausthey don't know what's coming next. how do you see things? >> i think there is aa big diverge between what we need to do as a nation and the political risks we face. the midterms taught a lesson to both target that is iortant to worry about their base and keep it in lane. i worry about government shutdown resululting from the residence action on immigration. that aside, when youook at the nation's future, there is a profound and immediate need for innovators to get more involved in national security. the threatweace, things like jpmorgan profiles being stolen,

isis, comments that the power grid could be brought down by the chinese, all these things are happening. >> the public may not know but we are getting thousands of pings every day to see what the could dof they wanted to shut down something. it is happppening right now. >> it is happening right now and we need our entrepreneurs of three or four or five people, nontraditional sources ofnnovation. also engaging in researcand development of new technologies, whether it is robotics, articial intelliligence, or biotech. ebola became something of a politica foot all. it was a good dress rehearsal for a national security challenge. the could be a time when a genetically derived virus could threaten our nation. aberman, amplified ventures, thank you for being with us. we will be right back.

>> tnks for joining us. you have optns on n how to connect with "washington business report." use us on facebook, follow on twitter, and you can walk past interviews on wjla.com.

>> this week on "government matters." >> we have to different i.t. systems. >> and aging i.t. infrastructure amidst foreign defend. best foreign demand. >> the technology is not there yet. >> mission to big data. lessons of from the failure of that magnitude in a constructive way. the special episode from executive leadership conference. >> this is "government matters." to our viewers around the world on t american forces network and here in the nation's capital, thanks for joining us. government ithe enginehat runs city. that's why vernment matters.