WEBVTT - Bloomberg Markets: CRV's Auerbach on `App Overload'

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>dot Com, the Radio, plus mobile Lab and on your radio.

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<v Speaker 1>This is a Bloomberg Business Left Carol Bloomberg World Headquarters.

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<v Speaker 1>I'm Charlie Palton. After the bell, miss from the Walt

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<v Speaker 1>Disney Company's second quarter adjusted EPs a dollar fifty estimates

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<v Speaker 1>were for a dollar forty one. Revenue also missed estimates,

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<v Speaker 1>Shares lower by one point four percent. We also heard

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<v Speaker 1>from Price Line first quarter adjusted EPs nine eight eight

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<v Speaker 1>estimates there eight eighty three. It's second quarter outlook also

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<v Speaker 1>missing estimates. Shares of Price Line down by three and

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<v Speaker 1>a half percent. Mixed picture for US equities today, with

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<v Speaker 1>the Dow and SMP both retreating. Nestack advanced seventeen to

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<v Speaker 1>a record sixty one twenty, up three tenths of one percent,

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<v Speaker 1>the SMP down two points, down one tenth of one

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<v Speaker 1>percent down, indust Reels down thirty six, down two tenths

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<v Speaker 1>of one percent, the Tenure down one thirty second with

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<v Speaker 1>the yield of two point three nine percent. Gold down

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<v Speaker 1>for fifty the twelve twenty two down four tenths of

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<v Speaker 1>one percent. West Texas Intermediate Crew down forty five cents

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<v Speaker 1>a barrel lower by. I'm Charlie Pellett. That's a Bloomberg

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<v Speaker 1>business flash. Thank you very much, Charlie Philly. You're listening

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<v Speaker 1>to Boomer Markets broadcasting live from the Museum of Science

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<v Speaker 1>in Boston. Yes, indeed we are alongside the river, the

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<v Speaker 1>Charles River to be exact, Carol Master, Corey Johnson, Bloomberg

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<v Speaker 1>Markets broadcasting live at the Museum of Science in Boston

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<v Speaker 1>on this Chili Tuesday. Um mention. Our next guy spent

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<v Speaker 1>a decade at the Boston Globe Wall Street Journal today

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<v Speaker 1>is a venture capitalist. John Airbach is partner at CRV

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<v Speaker 1>based in Cambridge, with us here at the Museum of

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<v Speaker 1>Science and Boston. Welcome to bloom the Radio. Thanks for

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<v Speaker 1>having me, although I wish we could host you with

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<v Speaker 1>some better weather. But I think this weather proves the

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<v Speaker 1>point that you don't moved to Boston for the weather. No,

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<v Speaker 1>that's for sure. Um. What's more fun being a journalist

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<v Speaker 1>or being a venture capitalist? They're both the same fun,

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<v Speaker 1>and the reason is is the jobs are surprisingly similar.

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<v Speaker 1>I've been doing this for uh coming on eighteen years now,

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<v Speaker 1>and both jobs allow you to interact with people who

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<v Speaker 1>are smarter than yourself. Which for me is a super

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<v Speaker 1>low bar. It's easy to get over. But the thrill

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<v Speaker 1>of speaking to people and learning about interesting projects they're

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<v Speaker 1>working on is exactly the same. And the two professions.

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<v Speaker 1>One pays a little bit better, but one is much

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<v Speaker 1>harder because as a journalist, you can report a story

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<v Speaker 1>and then you publish the story or you air the

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<v Speaker 1>story and you're done with it. When we make an investment,

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<v Speaker 1>the ten year birthing process begins. You're there for the

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<v Speaker 1>long haul, the very long haul. It's yeah, So I

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<v Speaker 1>went from being a journalist to being a money manager.

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<v Speaker 1>Very different, you know. I was. I was a head

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<v Speaker 1>fund on the principally on the short side, but my

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<v Speaker 1>investment horizons were not here as long as as what

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<v Speaker 1>you guys, uh deal with the venture. On the other hand,

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<v Speaker 1>I would have wake up more at a press of

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<v Speaker 1>press release what really could ruin my day, whether it's

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<v Speaker 1>accurate or not. It's a different kind of stress. But

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<v Speaker 1>talked about the kinds of ideas that that you're seeing, uh,

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<v Speaker 1>you know and what you know the former Charles Adventures

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<v Speaker 1>of CRV, what what are you're looking at? Sure? I

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<v Speaker 1>think in some ways this last tenure period It's interesting

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<v Speaker 1>we're in two thousand seventeen because the iPhone was launched

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<v Speaker 1>in July of two thousand and seven, and that really

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<v Speaker 1>heralded a ten year period of intense focus on apps.

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<v Speaker 1>And I think we're all suffering from a little bit

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<v Speaker 1>of app overload. If you talk to most people on

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<v Speaker 1>the home screens of their phones, they've got you know, eight, ten,

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<v Speaker 1>twelve maximum maps and a couple of utilities. But yet

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<v Speaker 1>you've had global corporations spending billions and billions of dollars

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<v Speaker 1>because even McDonald's needs an app, regardless of whether it's

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<v Speaker 1>been thought through exactly what someone's going to use that for,

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<v Speaker 1>why they'd want it. And in some ways, I think

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<v Speaker 1>we're entering the next chapter, which is it's not about

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<v Speaker 1>the app anymore. Who at our conference last week was

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<v Speaker 1>saying that beckamic haspent over billion dollars developing their mobile strategy. Yeah,

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<v Speaker 1>of cost, but but you can look at the of

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<v Speaker 1>a and say that makes a ton of sense. I

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<v Speaker 1>could point out some fast food joints. I'm not trying

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<v Speaker 1>to throw in any of the bus that no one

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<v Speaker 1>would ever use that app, right, It's just but you

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<v Speaker 1>needed to focus on it. And that showed that the

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<v Speaker 1>most important person in that period and that tenure period

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<v Speaker 1>was the designer, someone who could make something look pretty.

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<v Speaker 1>And that's important, but it was getting away from hard technology.

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<v Speaker 1>And it's so important that we're sitting here in Cambridge,

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<v Speaker 1>which is really one of the global epicenters of hard stuff.

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<v Speaker 1>Steve Kay's founder A Well writes about this. He calls

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<v Speaker 1>it the third wave, and he says that first wave

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<v Speaker 1>was just kind of getting everybody on the internet. Second

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<v Speaker 1>wave was apps, right, mobility, and anybody could create one

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<v Speaker 1>in there, bedroom, the garage, whatever. Third wave is where

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<v Speaker 1>those folks are going to have who have some expertise

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<v Speaker 1>in medicine or whatever that's going to be valuable in

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<v Speaker 1>kind of taking all of this to the next level.

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<v Speaker 1>Steve is absolutely right. The biggest returns, the biggest explosive

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<v Speaker 1>technological innovations happen in times when things are very hard

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<v Speaker 1>and we're entering a hard time where things like machine

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<v Speaker 1>learning and natural language processing artificial intelligence are really coming

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<v Speaker 1>to the front. Because now we're at a point where

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<v Speaker 1>the mobile infrastructure has been built out, the Internet has

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<v Speaker 1>been built out, we're all wired up, we're all unwired

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<v Speaker 1>all the time and now is the time when I

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<v Speaker 1>think technology can start really knocking down much harder challenges

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<v Speaker 1>regulatory environments, biotech, these areas that have been some ways

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<v Speaker 1>locked out of the technology wave. Like we just talked

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<v Speaker 1>about with one of our other guests. We're talking about

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<v Speaker 1>all this genetic material, that information that's out there, tons

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<v Speaker 1>of data. Right, you can now get a genetic mappings

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<v Speaker 1>all those people, all right, stop, but you know, and

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<v Speaker 1>then harnessing that information for treatment modality is and really

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<v Speaker 1>making some kind of an impact and the treatment of

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<v Speaker 1>someone who comes down with some disease or illness. I mean,

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<v Speaker 1>that's pretty powerful, but you need people who understand the

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<v Speaker 1>science and the medicine and so and so forth. I

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<v Speaker 1>think you make a great point because here before these

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<v Speaker 1>two areas of existed in silos. You've got healthcare on

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<v Speaker 1>one side and you've got technology and the other. And

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<v Speaker 1>when you bring them together, real magic can happen. I'll

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<v Speaker 1>give you a great example. There's a researcher Extentford University.

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<v Speaker 1>This did get a lot of press who comes from

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<v Speaker 1>the artificial intelligence side and decided to conduct some experiments

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<v Speaker 1>using UM image processing to look at skin cancers. When

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<v Speaker 1>we go to a dermatologist, they look at your back,

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<v Speaker 1>they try to decide what's what looks good, what looks bad.

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<v Speaker 1>If it looks bad, you get a biopsy. Imagine if

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<v Speaker 1>you could harness millions of images of people's backs and

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<v Speaker 1>suddenly with an iPhone you can actually perform as well

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<v Speaker 1>as a dermatologist. And that's fascinating. That's the conversion, uh,

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<v Speaker 1>the convergence of technology and healthcare. But then it changes rules,

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<v Speaker 1>things about access and things like that, because suddenly lots

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<v Speaker 1>more people who can't get to a doctor, or don't

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<v Speaker 1>have a doctor in their area or whatever, can they

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<v Speaker 1>get that benefit telemedicine. I think that's just what I've

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<v Speaker 1>been talking about forever. UM. Just lastly, do you think that, uh,

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<v Speaker 1>that the silicon aspect, the computing aspect of technological motivation

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<v Speaker 1>that is so dominated Silicon valid could have happened in Boston? Didn't?

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<v Speaker 1>Will that ever come back here? Do you think the

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<v Speaker 1>Boston is really going to be advancing in biotechnicsconds? I

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<v Speaker 1>think biotech this is the most important city maybe in

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<v Speaker 1>the world, and technology is um. I could give you

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<v Speaker 1>a story of hope. It would take more than five

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<v Speaker 1>seconds come back then please great stuff. So glad that

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<v Speaker 1>John rebeca partner at CRV formally Charles with revenuers. You

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<v Speaker 1>also a little bit markets and liberated. Corey Johnson and

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<v Speaker 1>Carol mass are We are here alive outside of the

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<v Speaker 1>Boston Museum Boston Museum of Science are indeed thank you,

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<v Speaker 1>John Blue