emily: unarmed? kim: completely unarmed. emily: what did they take?im: thousands of servers, offline, that hosted the data of millions of users that have used our web services. emily: most of your assets are still frozen. kim: they are now saying everything they have seized here now belongs to the u.s. government. emily: i know you have said you are broke. would you call yourself broke now? kim: we recently had a judgment from the court releasing $4.6 million for legal fees and living expenses. so at the moment, if that judgment is not appealed, financially, i am in a better position now than i was a couple of weeks ago. emily: have you thought about moving to a cheaper place? kim: yeah, but that would also mean -- it is kind of my last stand, fighting for my castle, for my home. you know, i am also trying to send a message to them and show them i am not going to fold over. that i am going to fight back. emily: right now you are wanted by the u.s. government in the biggest copyright case in history. the charges include racketeering, money laundering,

emily: on valentine's day. chad: so romantic. emily: describe the last 10 years.had: for me, it has surpassed all of my expectations. we were really simply trying to solve a problem for ourselves and our friends. how do you share videos that were sitting on your desktop? and despite observing our own problems and coming up with a simple way to re-encode these videos and allow people to share these videos on the web, it kind of unlocked the potential for everybody else. emily: the very first video on youtube really was one of you guys going to the zoo. [video clip] >> the cool thing about these guys is that they have really, really, really long trunks. chad: it's not a cat video, but it's not bad. [laughter] emily: 18 million views. almost 19 million views. chad: really, that video and many others, we were uploading internally to test the system. yeah, shortly after that, we started receiving quite a few other uploads from around the world. emily: who is that? chad: that's jawed, one of the three of us that started the site. there is also steve chen. unfortunately,

hugo: hi, emily, how are you? emily: it's so great to have you

hugo: hi, emily, how are you? emily: it's so great to have you here. hugo: my pleasure.mily: how is your chinese? are you taking lessons? hugo: my chinese is coming along slowly. maybe next time, we can do it. emily: i am going to hold you to that. that is a big promise. hugo: next time may be two years from now, three years from now. it is a hard language. emily: i understand they call you tiger brother. "hu ga" is your chinese name? hugo: "hu ge." emily: how did you get that name? hugo: our ceo, lei jun, who is a social media rockstar, superstar in china, just did a simple post on weibo. and he said, "hey guys, hugo is joining us from google, we have to give him a name." then people went crazy. everyone started suggesting names. i had no say in it. i was communicated on my first day -- by the way, you are "tiger brother." emily: the big question is when are you going to start selling phones in the united states? hugo: i would tell you if i knew. but i don't. we don't have a set date yet. you know, selling phones is a big step up. it is a huge marketing undertaking. you

emily: what year was this? chris: 2007. emily: this was before drones were cool.hris: well, it was before drones were available to regular people. so there were military drones, but something had happened. in that moment, i got chills. it should not be possible for a dad and his kids to build a drone on the dining room table with toy parts. this was a moment -- 2007 turned out to be the key year. so this hardware renaissance that you have heard is all started in 2007. the guts of the smartphones -- the chips, the processors, they were being made in the millions. the reason regular people were able to make things like drones is that the essential enabling technologies were now available to everybody. the question was, what are we going to do with them? emily: and by drones you mean something that has its own brain. right? chris: exactly. the drones are aircraft that fly themselves. you can if you want manually control them, but you don't have to. they have gps, they have sensors, they have cameras. what that is is essentially a flying robot. you don't need any skil

emily: are you saying you will someday? hugo: of course. emily: what will it take? hugo: a sizable team to manage the process operationally, certification, ongoing engineering help. and so on. emily: months away, years away? hugo: no less than a year plus away. potentially much more than a year away. emily: you spent a long time at google. google is blocked in china, apps are blocked in china. is there a way forward for google in china? hugo: i don't know. it is a tricky issue. i do believe that it may not be the end of it. i personally don't think that it is the end of the road for google in china. purely thinking for how useful google is and the fact that people in china are universally study abroad. they depend heavily on google even despite the fact that it is blocked. that i just think at the end of the day someone is going to figure out a way to solve whatever issues exist to bring all of this innovation to the people in china. emily: how satisfied are you with the pace of innovation? hugo: i'm quite happy. i understand how hard it is to make progress. when yo

emily: why?d: it is something that is not good for venture, not good for kleiner, not good for ellen. it turned out to be something where there is a lot of drama and a lot of pain. i am not sure what good came out of it. i am hoping there will be some. there are some good lessons there about how you treat employees. maybe some lessons about document retention. maybe some thoughts about how you build your firm. john: at the meta-level, the pressure it puts on our industry is to make sure we are representative of full diversity is very good. we have a lot of work to do there. david: until a firm votes with their feet and their wallets, they can be judged harshly. emily: part of the reason kleiner found itself in this position is venture capital firms have historically had a problem with succession. how do you make sure greylock is around for 50 years? david: greylock at 50 years could sometimes get told it is too old or stodgy. the reality is, over 50 years, you cannot continue to survive and thriv

emily: so great to have you here. hugo: my pleasure. emily: how is your chinese?ugo: coming along slowly. maybe next time, we can do it. emily: i will hold you to that. that is a big promise. hugo: two years from now, three years. it is a hard language. emily: i understand they call you tiger brother. how did you get that name? hugo: our ceo, a social media rockstar, superstar did a simple post and said hey guys, hugo is joining us from google, we have to give him a name. people went crazy. everybody started suggesting names. i had no say in it. i was communicated on my first day, by the way, you are tiger brother. emily: when are you going to start selling phones in the united states? hugo: i would tell you if i knew. but i don't. we don't have a set date yet. selling phones is a big step up. it is a huge marketing undertaking. you know, building a smartphone brand. operationally it is complicated. you have to have after sales set up, customer support set up, and it takes a huge amount of work, plus, localizing the hardware. we are going to work our way to that,

emily: how is the money shared?ugo: they manufacture with a contract which we help them connect with, then they pay those guys and they sell it back to us and make margin. it is as simple as that. emily: how much? hugo: it varies tremendously. we make good margins through these products differently through our products. they make some margins. we make some margins. it is a good relationship. emily: what is the biggest revenue driver for xiaomi? hugo: it's still phones that drives most profits today without a doubt. the trend over time is for our services strategy to really grow and become the main profit engine for the company. emily: international growth. where is it working, where isn't it working? hugo: we are taking it slowly. we are paying attention to how markets react to our strategy, how we need to change things. we made our way to india and indonesia, two significant markets. india, in particular. emily: your model is being copied to certain extents. can you see where there is a micromax in india? hugo: our

emily: why now? chris: why speak up about it now? emily: yes.hris: the way i see it, i think we have the team to execute on this stuff. i think dick finally has his squad. emily: why do this publicly? why didn't you pick up the phone and call dick? why not email them? chris: i have. i wanted to take a shot at doing it externally. the audience important for me was those working at the company, not just senior management. people who have been there a long time that are just, "yes, yes, yes." if the company starts delivering on it, i think everybody wins. emily: you are not an engineer, you're not a product guy. why should they listen to you? chris: that's a good question. i do not know. i have a track record that has worked out pretty well. uber, instagram, kickstarter, optimizely, gawker, twitter. these are all things i would like to think one or two of them would be lucky, but at scale, it is probably not an accident. at the same time, i think you have to trust your own intuition as a person. i think one of the most interesting challenges in sil

emily:e has been dubbed the "venture cowboy," not just for his signature shirts, but for his brash and freewheeling way of doing business. along with bets on uber and instagram, nine years ago he , also wrote a $25,000 check to buy a piece of twitter. then amassed so many outside shares, he was the biggest outside investor by the time of the ipo. he recently made news by outlining his vision for the future of twitter. even addressing the possibility that twitter cell to a bigger company like google or facebook. i sat down with lowercase capital's billionaire founder chris sacca just days before twitter's ceo dick costolo announced he was stepping down. thank you so much for being here. chris: it is cool to be here. i hope you don't mind me calling you brash. chris: no, i think that's probably accurate. emily: you just released a 8500-word missive about twitter. what twitter can be. before we cut to an ad for a medicare sponsored scooter, what is twitter's future? chris: 8500 words sounds lik

emily: some people say -- dick: you suck, get off. emily: exactly.er] dick: i say i have heard that before. it was in an australian accent, though. emily: how do you deal with that? how does your team deal with that? and how do you, as a person, deal with that, when people say you should be fired? dick: i got invited to something a couple of years ago. and my daughter thinks that you should totally go to that. i said, i don't think i will because i got invited because of what i am, not who i am. i got invited to it because i'm the ceo of twitter, not because i am dick costolo. so i have always tried to make sure -- i have never paid too much attention to the, you know, ceo of the year stuff because the worst ceo of the year stuff is, you know, right around the corner. i therefore do not get worked up or, frankly, care too much when people say those things. in fact, i have had to make myself care a little bit about them only after i started realizing, oh, it could affect recruiting if people start thinking, well, i want to go to twitter but what if, y

emily: here's the question. talk about paypal as an acquisition target now that it is separate from ebay. alibaba would love to buy it, google would love to buy it. what do you think is going to happen? dan: we were split apart to create two great companies. both ebay and market places. devin will lead a fantastic companythere. we were set up to really capitalize on the changing chessboard that is going on in digital payments right now. and we think we have tremendous opportunity. our adjustable market now could be as large as $25 trillion. and focusing in on that and delivering value to those customers will deliver value as an independent company to shareholders. we are very focused on that. emily: so you see paypal staying as an independent company. dan: i do. emily: let's talk about acquisitions. you are working on an acquisition of xoom. getting into the international market. you bought braintree a few years ago. what other acquisitions might we see? what areas are you guys looking at? dan: we look at opport

♪ emily: i'm emily chang and this is "bloomberg west.", live as always for the latest iphone. will apple be able to bring up another sales record? plus blackberry confirms it's making an android phone. hen tells me the work for the company is over. plus, president obama and

emily: decacorn.: you know the culture secrecy we have here in silicon valley where you don't tell people your numbers or your business model, you don't tell them about the future. emily: isn't that dangerous? chris: it is really dangerous. the stories of founders living lavish lives and investors doing really well is attracting more attention and more posers, and with that attention comes sloppy discipline and a ton of money. think about the early days at y combinator. 12 companies, demo day lasted all day. everyone ran live code, there were 15 of us investing, we could ask questions, walk up and try it during demo day. if the deal didn't get done that day, we could work on it. demo day today, what is it, 80 companies a class? 450 investors. 3 minutes, no live code, and those deals, half of them are done before they even present at demo day. big overall it goes to a desperation on behalf of investors to be a part of this game. a lot of companies are raising that probably shouldn't be raising. they ar

emily: i went there.ughter] chris: these are by and large doing jobs that are not being done at all. emily: there is the ups guy taking the package out of the truck and putting it on my doorstep. chris: that is a ways off. ups is good at what they do. when it comes to drones, they are doing jobs that are not being done. robots are good at doing jobs that are dull, dirty, and dangerous. these are jobs people shouldn't or do not want to do. emily: how much are these going to cost? is it going to be economical for a farmer to have multiple drones flying over his house? chris: today they cost $750. maybe in a few years it will cost a few hundred dollars. you might not even buy one, just the data. the cost of the drone is immaterial compared to the material to create it. emily: will they ever be able to feel? will they have intentions? chris: there are other kinds of intelligence. the internet is much better than us at many things. perhaps it is already intelligent on some level we cannot define. by the time w

emily: thanks for joining us. great to have you. ♪ ♪ emily: he is tech's biggest outlaw, under house arrest after a massive raid by new zealand commandos. kim dotcom is known for his outrageous personality as he has trotted the globe from germany to hong kong to new zealand. now he is the target of the biggest copyright case in history, accused of trafficking in pirated music, movies, and tv shows, as he awaits an extradition hearing to decide his fate. joining me on this special edition of "studio 1.0" from auckland, new zealand, megaupload founder and self-proclaimed ruler of the

emily: thank you. we are at "hp discover."his is your annual tech conference and this is your last "discover" as one hp. is it a little bittersweet? meg: it is a little bittersweet because the company has been together for so many years. but i have confidence that this is the right thing to do because our markets are changing at lightning speeds. it will allow us to be more agile and focused and responsive to customers. it is a landmark, it is a moment in history, but i am really optimistic about the future. emily: what do you think the biggest challenge is going to be of being two separate companies? meg: first is we have to get to being two separate companies. this is an enormous undertaking. this is the biggest separation that has occured, as far as i know, in american business. once we get there, we have to launch the two companies successfully with two new leadership teams, with two new boards of directors. in many ways, clean sheeting two new fortune 50 companies. i think we are well set up. you never know until you actu

first course on the menu -- cyber security. ♪ emily: i'm emily chang and this is "bloomberg west."atson is moving west -- ibm is betting big on the artificial intelligence that won jeopardy. plus watch out apple -- a circular smart watch just announced that is thin and sleek. and you won't want to miss my interview from tech crunch disrupt. all of that ahead. first to the lead -- in washington tonight, the chinese president sits down for a private dinner with president obama. there will be more than food on the menu. the two men will attend a formal state dinner tomorrow, but observers say tonight's get together will allow president obama to have a much more frank discussion about the issues confronting both nations. one of the talking points will be cyber security. president obama is expected to bring up cyber attacks. how do you expect the dinner to proceed tonight? are these dinners constructive? guest: that is what the white house said. the president gets to talk with out many people in the room and discuss the issues that face both countries. cyber security is an issue both co

emily: the u.s.nds more than any country in the world on education. $1.3 trillion a year. and yet still, we are 25th in math, 17th in science, 14th in reading. what's wrong? sal: if you went 50 years ago and you said, give me a list of the 10 most innovative companies in the world, maybe 30% would've been american. if you were to do that list now, probably 80% would be american. what i like to think about is how can we bring that spirit of entrepreneurship, that spirit of failure not being stigmatized, how can we bring that to the schools? the transcript of the future doesn't just need to be your gpa and your test scores, it can be a portfolio of creative works, it can be your peer feedback. being a engineer is a creative endeavor. being a designer is a naturally creative endeavor. show us what you have done. emily: the u.s. is the only developed country with a high percentage of top performers and bottom performers. we live in the heart of innovation in the world, and the public schools in san franc

i am emily chang and welcome to a bloomberg special, "inside paypal." ♪ emily: after 13 years, e-bay'srown jewel is going out on its own again. we give you an inside look at the payment processor's business to show you what the future holds for mobile payments and paypal. but first, even if you have never shopped on ebay, you have probably used paypal without knowing it. i recently went on a search to find out the ways you can use paypal in the wild. take a look. here at whole foods, an apple pay partner, paypal's breakthrough technology actually powers every single apple pay transaction. ok, thanks. i just hold the phone up here, i will input the pass code in. paypal technology also powers transactions for airbnb and taskrabbit. you can use your paypal account to order an uber. speaking off, let me call a car. paypal is spending big on acquisitions, betting big on the move to mobile. >> mobile is really driving one of the most fundamental shift in human behavior we have ever seen. emily: the shift to mobile is still in its infancy. figuring out how people will spend money in the futur

emily: thank you. emily: h are you preparing? you are in a startup stage now. what are you doing in this environment? are you thinking of these macroeconomic issues? guest: definitely. it is the one thing that keeps me up at night. written large for all of the companies in the alternative lending space we need to care about where we are in the macroeconomic cycle. in general my advice, we should prepare for being able to withstand a sudden doubling of the consumer loss rates we have seen. we should prepare for at least a one and a half axing. emily: thank you. interesting to hear that perspective. thank you for joining us. currently ceo personal capital. thank you. turning to camera technology, go pro is dominating the action camera market with 67% of global market share but one company is hoping to get a bigger cut. ion camera is taking on 13% of the market. >> the video capturing industry has lost the female customer. young adults, moms, they are not carrying camcorders anymore. this is going to recapture that female customer. the idea you can send out a face