emily: why is dropbox worth $10 billion? ♪ emily: you hear entrepreneurs talk about starting companies like staring into the abyss of death. what was it like for you? drew: i don't think it was that dramatic. when i add up all the times i , days of thumb drive were just wasted. that was a motivator, but fast-forward to today, people save the one billion files on dropbox. the design challenges in building something at that scale are really exciting for an engineer. emily: how many employees? drew: about 1200. emily: what does the bulk of the workforce do? drew: every time i wait a few weeks -- everything from the engineering of the product, interface design. people involved in marketing. emily: how many people are focused on security? drew: we have a dedicated security team. a couple dozen dedicated across all of these different facets of security. more broadly, you think about people who build our infrastructure are for the reliability of the service. emily: what does the office of the future look like? drew: i think there i

it's a photo app from dropbox.n you step back, we are like, ok, i have this problem of my photos are in 100 different places. in the future, we should be able to have every photo you've ever taken with you wherever you are in your pocket. you multiply that times hundreds of millions of people, and you're like, ok, this is one of the largest collections of human memory ever assembled. we want to reimagine how people work and remember their lives. those are going to keep us busy for a long time. emily: how much do you think about building your observers servers acca is that something you would do? -- building your own servers? is that something you would ever do? drew houston: we invest a ton in our own infrastructure and rent a bunch from amazon. i think for a lot of our infrastructure, we can get a lot out of commodity servers or commodity hardware. there may be additional gains. there are already companies all over that do a good job of that. emily: meeting steve jobs. how did that happen, what was that like? ♪ ♪

the three with the highest valuations are airbnb, dropbox, and stripe.mily: did you know early on that they were going to be hits? paul: we knew the founders were good. emily: what was it about drew houston and brian chesky? what was it about them that -- paul: it was different things. jessica: yeah. paul: different things about the two of them. in drew's case, he was the guy who could write this software. dropbox suceeded by solving an almost impossibly hard problem. whereas airbnb is different. airbnb is like this mass movement, where everyone is staying in other people's houses worldwide. jessica: we were skeptical, though. i just remember thinking, we don't really care what the idea is. these founders are awesome. we are funding them. paul: patrick collison from stripe, i have known since he was, like, 14. back when he was this high school kid in ireland, he used to email me questions about the lisp programming language, and i had no idea he was a kid. emily: now that these companies are worth multi-billions of dollars, when you look back, if they ha

my life is stored on dropbox. 252 gigas.

joining me today, cofounder and ceo of dropbox, drew houston. my life is stored on dropbox.

emily: there is a company you may have heard of called dropbox. aaron: yes, i have.mily: your name -- the name box is in the name dropbox -- you do overlap to a certain extent in terms of business, customers. how much of an inconvenience has dropbox been for you? over the last however many years? aaron: you know, inconvenience is a unique word. i think they are an innovative company. drew is obviously an incredible leader. we obviously are a fierce competitor from a business standpoint. in the business part of the market. but i think that the world is better with them. emily: why do you think you can offer business customers something better than they can? aaron: i think that, when you go after the enterprise, it is really, really hard to balance a strategy where you are world-class on the consumer side and also be world-class for a hospital or a life sciences company or a financial services institution. those are just very, very different types of problems. at box, we don't have any distractions. we are 100% focused on the enterprise. aaron: i am sort of between pet

dropbox isn't just sitting on the sidelines.pany telling cnbc it just poached former microsoft and dell executive thomas hanson to lead dropbox's global sales team. hamson will focus on growing dropbox's business partnerships. the cloud company has 400 million users at 8 million business accounts, up from 4 million in november of 2013. dropbox says 70% of users are outside the u.s. and carl it's an interesting hire, especially since dropbox last year inked a partnership with microsoft to bring office products to microsoft. >> windows 10 on the 29th of july. a couple of big things to watch there. dow closed a session lows as we're about to get europe's close. simon is back with that. >> wall street is weighing on europe, we were flat for much of the european session. but don't forget 9% gains on the broad market here in nine sessions, that's the big ebb picture, goldman went overweight europe stocks overnight for the next three months. they were already overweight for the year. they suggest you should fund that by being underweig

emily: you know, a dropbox for example -- you guys invested in dropbox, but you didn't get a board seat. why did that happen? john: because we were the "b" round, which is a wildly, expensive "b." but it'll turn out, in retrospect, to be a pretty good bargain for us because they were riding a very, very large wave that just got bigger and bigger and bigger. emily: how do you protect yourself as investors? how do you hedge your own risks? david: you know, we don't tend to use financial engineering, if there's a way to do that. emily: so, you do not have liquidation preferences? david: not in almost everything we do, but you're talking about unusual liquidation preferences, right? emily: right. david: and protection, downside protection? emily: yes. david: we don't do anything fancy there. our biggest thing is alignment with the entrepreneur and those tend to misalign the entrepreneur. and that comes out in these times in the weirdest moments just when you don't want it, and that misalignment can hurt you. we tend to manage our risk by picking well and having a diversified portfolio. emil

emily: you invested in dropbox but did not get a board seat. 20 that happen? -- why did that happen? b round.was a they were writing a large wave. emily: how do you protect yourself as investors? we do not tend to use financial engineering. emily: you do not have liquidation practices? david: you're talking about unusual liquidation preferences. we do not do anything fancy. is alignmentting with the entrepreneur. that comes out at the weirdest moments. misalignment can hurt you. we tend to manage risk by picking well. emily: there are always these unicorns worth more than a billion dollars. are they really? because of the liquidation practices. does that mean the values are inflated? valuations are just numbers you put in. until these become liquid, you do not know what the numbers are. david: if you want to be a public company, you will have to cross the chasm of public metrics. if you cannot cross the chasm, valuations from the early days can hurt you. then there is the opportunity to be acquired. you need acquirers willing to value you for whatever reasons

emily: you invested in dropbox but did not get a board seat. why did that happen? john: we were the b round. a wildly expensive b. but it'll turn out in retrospect to be a good bargain for us. they were riding a very large wave that just got bigger and bigger. emily: how do you protect yourself as investors? how do you hedge your risks? david: we do not tend to use financial engineering. emily: you do not have liquidation preferences? david: you're talking about unusual liquidation preferences. as a protection. downside protection we do not do anything fancy. our biggest thing is alignment with the entrepreneur. those tend to misaligned the entrepreneur. that comes out at these times at the weirdest moments, when you don't want it. misalignment can hurt you. we tend to manage risk by picking well and having a diversified portfolio. emily: there are always these unicorns worth more than a billion dollars. are they really? because of the liquidation preferences. and does that mean the values are inflated? john: the truth is, valuations are just numbers about how much

emily: john, you are behind some of the newer hits -- dropbox, instagram, tumblr. how do you fill the big shoes of david sze? john: what i learned is you probably don't try. instagram is a good example. i brought it in and people did not love it. emily: really? john: reid was not sure it would work. i believed in kevin and had enough affinity for the category and the product that i really wanted to do it. emily: why didn't reid think it would work? john: i don't know. he said some words, and who knows exactly what he meant? he thought it was interesting, but not huge. emily: is there a science to it, a formula to these things? john: with kevin, it took me a while to convince him to raise money. i chased him for the better part of six months. david: airbnb is another example. i was like, i don't get it. i don't get it. reid was on the other side pushing really hard to make it through. we think that dialectic, combined with respect for each other, allows us to get to good outcomes. emily: good that you own that. david: i have lots of things to own. 15, 16 years in th

we don't focus the consumer use cases or the consumer side of the market which is where dropbox is prevalent we spent a lot of time on ibm and ibm very clearly wants to get into faster businesses and they know that some of their legacy businesses aren't doing that well. i thought it was very interesting that they have to make partnerships and the next partnership i read about is box. >> yes. we like that. so the big partnership there is ibm. incredible company with a very large set of assets and the portfolio around how businesses really run and operate in the back end of their business and what we do at box is we help individuals and teams be able to share and collaborate. we saw this huge opportunity where what if we could take our technology which is meant for individuals that want to share and work together and connect them with the ibm technology which helps run the backbone of a business and the work flows of the business and the security of the business and so we decided that instead of competing with one another we account have a great joint partnership and we announced that two and

betty: airbnb, dropbox. what they all have in common, goldman sachs.in which goldman sachs is an investor. betty: as if the private capital world needed another player. goldman sachs, $95 billion market cap company, coming in. it has been there for many years, but recently has ramped up their injections of capital into some of these companies. in fact, they backed what many call the unicorns, $1 billion or above companies, uber being one of the most famous ones. it's no surprise. we have seen wall street banks go to silicon valley. we have seen wall street talent go to silicon valley, because that's the hot new thing. the former cfo of morgan stanley , morgan stanley being the most well-entrenched bank in silicon valley. ruth pratt went to google to be there cfo. not just goldman sachs, though. jpmorgan has also been ramping it up. last week, i met with german together from jpm, one of the people who went from new york and established a bigger office and presence in silicon valley. m andll the story of jp say, we are also tack investors -- tech investo

type of goldman sachs he came a powerhouse and technology investing backing companies like uber, dropbox and more. betty: we have seen killer but no expertss on artificial intelligence say the world needs to take action to make sure these robots do not become a real-life threat. pimm: good afternoon. betty: let's begin with a look at the markets. stocks are rebounding and we are close to our highs of the session. losingve had the longest streak since january but are rising on better than forecasted earnings and we have lots of earnings to go through. andre talking about china how it stabilized one chinese plunged after lower sales, trading almost 20% lower from yesterday's close. it's the biggest loss since 2009 for the company. moving onto oil and gold -- we have seen a commodities route. . oil prices are rebounding and oil is trading near a four-month low. down 19%still trading near the bear market of 20% territory from its may peak. pimm: let's take it check of the treasury market. there is little bit of selng on bonds. the 10 year is 2.25%. this is over the past week and we can see a

we're competing with the top people like google and facebook and dropbox.ilicon valley companies, but we aren't able to give the stock packages. we find we give a good salary, than othermission, great things to work around, it naturally feeds on itself. emily: what about your own financial position? >> i pinch myself every morning. i level we got to come in to begin by honda accord every eight years. we get to dream about what could the in the future. what is this next date of civilization that could reach a billion students a year. i cannot imagine being in a lock your position. are hanging out with billionaires and on the same list as mark zuckerberg. how do you feel you fit in as an entrepreneur? emily: i don't -- >> i joke that i was the poorest person on the cover of forbes. what is needed but silicon valley is as much wealth as there is here, it is not about the well. what people in silicon valley care about is what are you doing to innovate. what is the no change the world. that is what makes it silicon valley. i'm still changing diapers and cleaning

dropbox for example, you guys invested in it but you didn't get a board fee. why? hn: we were a wildly expensive b round. but it will turned out to be a pretty good bargain for us because they were writing a very large wave. emily: how do you protect yourself as investors? david: we don't tend to use financial engineering. we don't have liquidation in a most everything we do. but you are talking about unusual liquidation. we don't do anything fancy there. our biggest thing is alignment with the entrepreneur. most tend to misaligned the entrepreneur. that comes out at the weirdest moments. bytend to manage our risk picking well and having a diversified portfolio. there are ally: of these unicorns worth more than a billion dollars. but are they really? david: valuations are just numbers. liquidhese things become markets, until you have buyers and sellers on market, you don't know what the numbers are. if you want to be a public company, you have to cross the chasm of being held and accounted for on public company metrics. if you can't, the valuations you carry from t

in other ways, we are a nonprofit competing for the top people with google and facebook and dropbox, all these hot companies. but we are not able to give the stock packages. if you give them a good salary, a good mission, intellectually challenging work, then give them great people to work around, it feeds on itself. i feel good about it although it is a strange model. emily: i know you have three kids now. sal: i pinch myself every morning. this is what i love doing in life. we can buy a honda accord every eight years. that is all i need as long as i can pursue my passion. we can dream about how it can be in the future, are we creating the next harvard or oxford? could reach a billion students per year. i can't imagine being in a luckier position. emily: you are hanging out with billionaires and you are on the same lists as mark zuckerberg. how do you feel you fit in as an entrepreneur, yet? i was the poorest person on the cover of forbes. what is needed about silicon -- meet about silicon valley, it's not about the wealth. caree in silicon valley about, what you are doing to innova

that is dropbox ceo drew houston on his file storage and sharing business in an interview with "forbesstry is in a race to zero, while companies continue to cut prices and offer bigger storage limits, dropbox has been valued at $10 million. the industry very competitive right now. with apple. google, microsoft, amazon, all ramping up their products in the space. we talked about this on, with box, on their first day here, the kmot commoditization of thi business seems like it's not gone that far. >> amazon is investing so heavily, they can afford to. >> drew houston is in a tough spot. i was talking to somebody in silicon valley last week about how they needed to get started in the enterprise sooner. maybe in some ways that vox is better positioned because of that and so much business is expected to come in on that side. i hear they're trying to raise money now and the valuation could be interesting. >> meantime we have seen for the third day in a row, a gap down and some improvement during the course of the session. the headlines from the imf have helped bring the dollar in and that's

it has funded more than 700 companies to date, including dropbox, airbnb, and stripe.ehind the start up machine is a couple with their own start up story. how did they build y combinator into what it is today? joining me today on this edition of "studio 1.0," y combinator founders and husband-and-wife paul graham and jessica livingston. thank you so much for joining us.

there is no difference between megaupload and services like dropbox or the new mega today. you can use it for good things, and you can use it for bad things. you can buy a knife and stab someone in the heart, or you can use it to slice your bread. you're not throwing the knife maker into jail because someone is murdering someone with a knife. emily: copyright holders say you robbed them of hundreds of millions of dollars. kim: how can i have done that if i, myself, have never uploaded a single copyright file onto megaupload and shared it? emily: did you try hard enough to stop it? kim: we followed the law. when we got copyright notices, we took them down. in addition to that, we gave over 150 copyright holders direct access to our servers to delete links they did not like, that were infringing on their copyright. emily: you also -- you had a rewards program. you paid users to upload content. they made more money, the more popular their content was. what is popular? movies that have not been released, music that is free. in that case, weren't you complicit? kim: i do not thi

i passed on dropbox, i passed on airbnb. at google, i told eric not to invest in go pro.aid that airbnb was really dangerous. i think somebody might get raped or murdered while they are staying at someone's house and the blood will be on your hands, and i said this out loud to the guys. emily: you didn't pass on uber. you own 4% of the company. chris: i was lucky to be one of the very first investors. i had deep convictions about what it could be. emily: you don't think uber has used very dirty tactics? chris: i don't. i think they have used aggressive tactics. emily: how big do you think uber can be? chris: that is truly limitless. i do not think it is worth less than $200 billion by the time it goes public. they are nailing down the food business. that is a whole other business. emily: taking on fedex, is that something they would do? chris: they are delivering packages to hong kong now. there is that cool company, ship. i did not invest in it because i think it is likely that is something uber will likely do. i don't own instacart stock because i think it is something

year more than 75 tech companies have come to casa madrona or held meetings here, including ebay, dropboxwe positioned this property to cater to that clientele. all of these glass doors open up and this suite is very inspiring space. we, have essentially followed our clients' lead in breaking down barriers and innovating in their industries and we've done the same in this space. >> now this hotel offers guest rooms and cottages, but the property's signature 5,000 square-foot main residence is the so-called alexandrite suite, here guests can have access to their own private chef and private car and designated concierge and sailing lessons. the cost? a cool $10,000 per night. management telgs me there's no request that is too extravagant. guests used to be able to have champagne delivered by drones. but the faa unfortunately just put a stop to that service. guys, back to you. >> josh lipton in a beautiful part of the country, sausalito. >>> let's get to the cme group, rick santelli with the santelli exchange, hey, rick. like to welcome my last guest of the week, peter bookfar, thanks for ta

reporter: boney admitted the sweatshirt had once been his, but said he'd dumped it in a salvation army dropboxrop box that would have been a clean sweatshirt. your dna, chances are probably wouldn't have been on there, but it is. >> i see where you're coming from. >> reporter: as for david camm? >> do you know david camm? >> no. >> you ever met david camm? >> no. >> do you remember the murder of david camm's family? >> on television, yes. >> do you know where david camm lives? >> only on television. i don't even know what his address is. >> reporter: the interrogation went on for some 12 hours with boney sticking to his story. the detectives released him with a warning. >> make no mistake about it, if anything else links you to it, you're done, stick a fork in you. >> now see that would normally worry me. i wasn't there. >> reporter: then, two weeks after letting boney walk, there was something else. something big. >> "early, uh, yesterday morning, i was notified of some uh additional scientific evidence, uh, that linked mr. boney to the, uh, to the homicides." >> reporter: the prosecutor reve