Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily jay I'm Emily Jang in San Francisco, and this
Speaker 1: is Bloomberg Technology coming up in the next hour, from
Speaker 1: largest shareholder to board member. How Elon Musk's sudden moves
Speaker 1: at Twitter could raise alarm at the SEC We will
Speaker 1: have all the details. Plus Uber adds flights, trains, even
Speaker 1: hotels to a pilot program and it's super apt. Push
Speaker 1: will tell you how CEO Dara kus Rashah he wants
Speaker 1: to expand beyond rides and food delivery, and bitcoin is
Speaker 1: now underway in Miami. We will bring you the latest
Speaker 1: from the cryptoconference and catch up with some of the
Speaker 1: attendees later this hour. The big are in tech, of course,
Speaker 1: Elon Musk joining the board of Twitter twenty four hours
Speaker 1: after his nine point two percent stake in the company
Speaker 1: was disclosed. What does this mean from the platform's future?
Speaker 1: I want to dig deeper into this with Daphney Keller,
Speaker 1: director of the Program on Platform Regulation at the Stanford
Speaker 1: Cyber Policy Center. Daphney, great to have you back with us.
Speaker 1: So it's been a War one seventy two hours. In
Speaker 1: just the last twenty four hours, Musk has now filed
Speaker 1: to become an active investor in Twitter, not just a
Speaker 1: passive investor, meaning that he will advocate for changes. What
Speaker 1: influence do you think Musk will have on the platform?
Speaker 1: How will Twitter change as a result of his board membership. Well,
Speaker 1: I don't think anyone knows, and you know, there there
Speaker 1: are a lot of predictions people could make. But one
Speaker 1: thing that's particularly interesting is the possibility that he will
Speaker 1: join Jack Dorsey and current CEO agerwal in promoting decentralized
Speaker 1: models in you know, promoting ways to allow third parties
Speaker 1: to come in and offer different content moderations systems on
Speaker 1: top of Twitter or different content ranking systems, which would
Speaker 1: be a really important ship that had happened. So Twitter's
Speaker 1: Blue Sky project, which is this push for an open,
Speaker 1: decentralized standard for social media that is funded by Twitter.
Speaker 1: You know, is this something that you think Musk could
Speaker 1: or would take on? And you know what specifically would
Speaker 1: you be looking to change? Well, so the upside of
Speaker 1: the project is that it would let Twitter users pick
Speaker 1: the speech rules they want to live under. You know,
Speaker 1: they could sign up for a Disney flavor, or a
Speaker 1: church affiliated or Black Lives Matter affiliated flavor of the ranking,
Speaker 1: or of the rules on harassment or violence or nudity.
Speaker 1: So all of these things would allow Twitter to step
Speaker 1: back from being the one gatekeeper that decides the speech
Speaker 1: rules and bring in lots of different options for users.
Speaker 1: So you can see Musk, who has talked about, you know,
Speaker 1: open sourcing the algorithms and and is broadly interested in
Speaker 1: decentralization liking that um. On the other hand, you can
Speaker 1: see him liking consolidated control and preferring a world where
Speaker 1: Twitter does set the rules. So I think you know,
Speaker 1: it's it's a wait and see situation for sure. Could
Speaker 1: this have repercussions for other social platforms like Facebook? Sure?
Speaker 1: In a way, you can see Project Blue Sky, which
Speaker 1: is about decentralizing rules, bringing in more decision makers and
Speaker 1: more options for users, as like a counterpart of Facebook's
Speaker 1: oversight Board. In both cases, it's platforms saying we're uneasy
Speaker 1: being the deciders, especially on issues that divide the public
Speaker 1: so much that somebody is going to be angry no
Speaker 1: matter what we do, and so we would like to
Speaker 1: hand that role to someone else. Facebook's answer was keep
Speaker 1: it extremely centralized, funded with Facebook money, and build the
Speaker 1: oversight board to decide cases. And Twitter's answer answer with
Speaker 1: blues Styde potentially is to say, let's decentralize this, Let's
Speaker 1: put lots of different people in charge and sort of
Speaker 1: devolve control to the users that they can choose what
Speaker 1: they want and move the costs, incidentally, of all this
Speaker 1: content moderation out onto other competitors, so it's not sitting
Speaker 1: with Twitter where it's very expensive and very difficult as
Speaker 1: part of their business. Right now, now, the biggest, perhaps
Speaker 1: most existential question is what could this mean for free
Speaker 1: speech on Twitter and in general. Take a listen to
Speaker 1: a professor Jennifer Grigel from Syracuse University when I asked
Speaker 1: her how this could change how Twitter handles free speech.
Speaker 1: This really isn't about free speech. If anything, Twitter has
Speaker 1: just become a little bit more about you on speech.
Speaker 1: You just ball a large portion of this company and
Speaker 1: gets the kind of steer what happens there now. If anything,
Speaker 1: he's figured out that this is a oracle platform. Maybe
Speaker 1: he took some notes from Mark Zuckerberg and others that
Speaker 1: you need to have some influence over a platform. Daphne
Speaker 1: do you think this is more about Elon's speech and
Speaker 1: and and and how could this influence future moderation efforts
Speaker 1: at Twitter? Well, it would be more about Elon speech
Speaker 1: if we stay in the world of Twitter being a
Speaker 1: single centralized point of control over the rules that are
Speaker 1: imposed on users and their speech. So if we don't
Speaker 1: go in this decentralized direction that we've been talking about
Speaker 1: and that Jack Dorsey has been talking about for a
Speaker 1: few years, um, and instead there's just one decider in
Speaker 1: the middle, then obviously Elon Musk's roll there is really important. Um.
Speaker 1: But I don't think we should foresee a world where
Speaker 1: Twitter becomes, you know, a free speech mosh pit, free
Speaker 1: for all, because they're not going to make money that way.
Speaker 1: You know, if if you get onto Twitter and you
Speaker 1: can't help seeing a bunch of racist comments or bullying
Speaker 1: or spam or you know, all of these things that
Speaker 1: users don't like and that advertisers don't like, um, that
Speaker 1: is not a way to retain users or or to
Speaker 1: be profitable. So I don't think we should imagine a
Speaker 1: world where if anything goes on Twitter, it's you know,
Speaker 1: at most a world where Twitter still imposes its own
Speaker 1: rules but they're more influenced by Elon Musk. But possibly
Speaker 1: this really interesting other direction where Twitter steps back and
Speaker 1: gives users a choice. You know, you can choose to
Speaker 1: live under Twitter's rules, or you can choose to live
Speaker 1: under some other rules, which brings me to the question
Speaker 1: of Donald Trump and could just open the door to
Speaker 1: president former President Trump coming back to Twitter after being
Speaker 1: permanently banned. I've asked Ned Siegel, the CFO, this question
Speaker 1: several times over the last year. Is there a path
Speaker 1: for Trump to come back? Take a listen to what
Speaker 1: he's had to say. One somebody is removed from Twitter,
Speaker 1: there isn't a path for them to come back. Uh.
Speaker 1: And that's true for public officials, is true for anybody
Speaker 1: else who uses the service as well. Now, Trump, in
Speaker 1: a lawsuit against Twitter back in January, said Twitter has
Speaker 1: increasingly engaged in impermissible censorship. The immediacy of its threat
Speaker 1: to users and potentially every citizen's right to free speech
Speaker 1: cannot be overstated. Twitter censorship results in a chilling effect
Speaker 1: on our nation's pressing political, medical, social, and cultural discussions.
Speaker 1: Does former President Trump have a point? And do you
Speaker 1: see Elon Musk coming back? You know, could they reopen
Speaker 1: this question of whether he should be on the platform. Well,
Speaker 1: former President Trump does not have a legal point as
Speaker 1: a legal argument. This lawsuit is nonsense because private platforms
Speaker 1: don't owe you First Amendment protection the way that the
Speaker 1: government does. And courts have said this over and over
Speaker 1: again in cases very much like this Trump lawsuits. Um.
Speaker 1: But as a matter of public policy and things that
Speaker 1: we care about, Uh, is it a problem that there
Speaker 1: are a small handful of giant companies that really have
Speaker 1: a chokehold over what speech and information we can share
Speaker 1: and see? Yes, you know, of course people are worried
Speaker 1: about that. And so you know, I can imagine a
Speaker 1: future where Twitter's version of its content moderation continues to
Speaker 1: have former President Trump band for life. But there are alternatives. Um,
Speaker 1: you know, a lens on Twitter offered by some competitor
Speaker 1: that does allow him to come back, and then users
Speaker 1: can choose which of those universes they want to live in. Interesting.
Speaker 1: So you think that Twitter could find a middle ground
Speaker 1: here with when it comes to President Trump. Well, so
Speaker 1: imagine you know, their users can choose from fifty different
Speaker 1: flavors of competing content moderation services built on top of
Speaker 1: Twitter um. One version of that is an entirely federated system,
Speaker 1: meaning there is no centralized control, kind of like math
Speaker 1: stood on now, and so you know, in that version,
Speaker 1: anyone can build a system where President Trump does come back,
Speaker 1: and it's just a question of whether users want to
Speaker 1: sign up for that. I think what's more plausible as
Speaker 1: a future development with Project Blue Sky is a sort
Speaker 1: of hub and spoke model where Twitter does take some
Speaker 1: things down at the center, like things that are illegal
Speaker 1: or honoring d m c A notices, um, and then
Speaker 1: what left goes out to the you know, the competing
Speaker 1: offerers of content moderation services, and they can decide among
Speaker 1: among those things that are left. So more like how
Speaker 1: Reddit does some centralized content moderation, but then most of
Speaker 1: the decisions are made by different subreddits, you know, applying
Speaker 1: their own different policies. You know. So Twitter could choose
Speaker 1: to say, you know, we're going to take down all
Speaker 1: the illegal stuff at the center so no one can
Speaker 1: see it. And also some things violate our own policies
Speaker 1: so badly that we're also going to keep that down
Speaker 1: permanently for all of that, you know, competing flavors of
Speaker 1: content moderation but I just think that would be a
Speaker 1: step one flavors. We'll see if Twitter moves in that direction.
Speaker 1: Daphne Keller, director of the Program and Platform Regulation at
Speaker 1: the Stanford Hyper Policy Center. Thank you well. Elon Musk's
Speaker 1: swift ascent from Twitter shareholder board member could catch the
Speaker 1: eye of the SEC in this at a time when
Speaker 1: the Commission is demanding more transparency from big investors and
Speaker 1: ratcheting up fines for breaking rules. Here to talk about
Speaker 1: that and more, Bloomberg's Matt Robinson, who covers the SEC
Speaker 1: for US. So, Matt, is there any indication that the
Speaker 1: SEC is looking at this yet? Not yet, But the
Speaker 1: SEC is looking at Elon Musk and his brother for
Speaker 1: insider trading or potential insider trading issues about a share
Speaker 1: sale last fall. So uh, you know, as we know,
Speaker 1: the SEC and Elon Musco go back, you know, quite
Speaker 1: a few years now from teen with his infamous funding
Speaker 1: secured tweet and the subsequent penalty and settlement which limits
Speaker 1: ability to talk about his company on the platform. Now,
Speaker 1: Elon Musk initially filed to be a passive investor. We
Speaker 1: know now in the last twenty four hours he's changed
Speaker 1: that to become an active investor. We also know he
Speaker 1: started buying shares starting back in January. The CEO Twitter,
Speaker 1: Paragua Agarwal, said that they had actually been talking for
Speaker 1: weeks now, perhaps it could actually be months. What's significant
Speaker 1: about that to you when it comes to the interest
Speaker 1: of the SEC. So those are so the two different
Speaker 1: filings that, um, you know big investors have to disclose. Um,
Speaker 1: you know, we have a thirteen G, which is someone
Speaker 1: who's taking a passive steak, someone who doesn't have any
Speaker 1: interest in seeking any sort of business plans or changes,
Speaker 1: and then the thirteen D, which is what he filed yesterday.
Speaker 1: So there is room for from foreign investor to go
Speaker 1: from a thirteen G, which is the you know, um,
Speaker 1: the passive side, to an activist side. So, um, there
Speaker 1: are so by updating that, that's that's fine. The issue
Speaker 1: that Elon Musky may find himself into is that he, um,
Speaker 1: you know, as soon as you hit five percent, you
Speaker 1: have to disclose within ten calendar days, and it looks
Speaker 1: like he may have missed that window. So that is
Speaker 1: sort of a technical violation that he could see see
Speaker 1: some issues, but the SEC is generally they don't really
Speaker 1: bring those cases unless it's kind of repeated failures. How
Speaker 1: fast can we see the SEC move on with move on,
Speaker 1: move on this? Well, you know they it's obviously just happened.
Speaker 1: I mean, if it has, if they haven't you know,
Speaker 1: started an investigation in a couple of weeks, you know,
Speaker 1: is its smooth sailing? It's it's certainly could be quick.
Speaker 1: I mean, if you're back in eighteen you know, if
Speaker 1: I remember correctly, it was like early August that he
Speaker 1: brought the funny Security and at the end of September
Speaker 1: the SEC suit elon Musk So, I mean, if there's um,
Speaker 1: you know, the facts and and the certainly the motivation
Speaker 1: there from the SEC if they feel like this is
Speaker 1: an important case to bring that you know this is
Speaker 1: going to show too too, mus get to other investors
Speaker 1: that you know you have to take these sources of
Speaker 1: disclosure rules. Um SERI slee and promptly all right, Bloomberg
Speaker 1: Smott Robinson, who covers the SEC for us, thank you,
Speaker 1: coming up, darks Rasha. He is pushing Uber closer to
Speaker 1: becoming the go to travel app, adding long distance travel
Speaker 1: like planes, trains, hotels. Will it work? Could Uber be
Speaker 1: the next super app? We will explore next. This is Bloomberg.
Speaker 1: Let's get to Uber's continued push to become a super app.
Speaker 1: The ridehilling company planning to launch a pilot project in
Speaker 1: the UK that will integrate offers from travel partners. That
Speaker 1: means customers will soon be able to book long distance
Speaker 1: travel on planes, trains, buses, even hotels. Bloombergs Jackie Delavlos
Speaker 1: has more so, how exactly will this work, Jackie? From
Speaker 1: a customer's perspective, it's going to be a one stop
Speaker 1: shop for transportation. Now. While we were able to get
Speaker 1: a cab to the airport, now when you're at the airport,
Speaker 1: you know you can hail or book the next train
Speaker 1: ride or your bus from whatever city you're going to.
Speaker 1: It's really going to become a much more comprehensive travel hub.
Speaker 1: Now for Uber, this is the next step in their
Speaker 1: super app strategy. This is not something that is completely new.
Speaker 1: They telegraphed this even, you know, back in ten dar
Speaker 1: casra Shaw he had this big idea that it could
Speaker 1: become a super app. And when you think about it,
Speaker 1: it's not a concept that is very well known to
Speaker 1: Westerners in particular, but in Asia it's huge. Uber has
Speaker 1: a stake in Grab, which is one of the biggest
Speaker 1: players and examples of a super app where you can
Speaker 1: access payments, you can hail a ride, you can get
Speaker 1: food delivery, all in one. So this is a major
Speaker 1: step really jump starting those efforts for Uber. Now. You
Speaker 1: and I just spent time with Dara Cosa Shaw. He
Speaker 1: at shop Talk a couple of weeks ago, and he
Speaker 1: talked about this vision to deliver the future of retail,
Speaker 1: not just food. Take a listen to what he had
Speaker 1: to say when I asked specifically about these super app ambitions.
Speaker 1: So what we're doing essentially is building the largest local
Speaker 1: commerce and transportation platform on Earth. UM the users, riders,
Speaker 1: consumers get the ease of essentially being able to go
Speaker 1: and go anywhere, get anything same I d same payments, etcetera.
Speaker 1: We know the locations that you like to go or
Speaker 1: restaurants that you love, Jackie. It all sounds good, But
Speaker 1: how will this or could this help Uber's bottom line
Speaker 1: or could it hurt Well, when you think about this
Speaker 1: particular long distance travel move, the way it's going to
Speaker 1: be done is by using online travel aggregators. So think
Speaker 1: of an Expedia or a Booking They're the ones that
Speaker 1: are actually booking the ticket, but Uber is taking a
Speaker 1: cut out of that sale. It's a really high margin
Speaker 1: tie of strategy where you know, they're not the ones
Speaker 1: having the having to get that plane or the train,
Speaker 1: the actual hardware. What they're doing is just facilitating this
Speaker 1: this sale for customers that are already very engaged on
Speaker 1: their app. When you think about the different ways that
Speaker 1: Uber can tap people's lives, you know, you can book
Speaker 1: a restaurant, take a ride to the restaurant, pay for
Speaker 1: the meal. UH. The opportunity for growth is very, very significant.
Speaker 1: So what does this mean for competition? You know, especially
Speaker 1: given this is launching in the UK. Obviously there are
Speaker 1: big travel competitors like Expedia Bookings. You know, what does
Speaker 1: this mean for the rest of the industry For some
Speaker 1: of its direct competitors. Let's take you know, rideshare Lift
Speaker 1: for example. If this kind of a long distance rollout
Speaker 1: were to reach North America, it would be a huge
Speaker 1: blow for Lift, who doesn't have the kind of UH
Speaker 1: cushion that Uber has with its food delivery business. And
Speaker 1: also when you think about some of the marketplaces that
Speaker 1: are also vye to keep their customers on their apps, longer.
Speaker 1: Whether it's door Dash or insta cart, this is going
Speaker 1: to be a significant challenge, especially if upers making it
Speaker 1: easy to do all the things in the app, whether
Speaker 1: it's you know, a ride or a meal, convenience items retail.
Speaker 1: Uh so, I think it's rapid delivery. It's going to
Speaker 1: really um you know up the ante for marketplaces and
Speaker 1: rideshare rivals h to to find ways to keep customers
Speaker 1: on the app. Alright, we'll be watching how this plays.
Speaker 1: Applom works. Jackie Doagulos, thank you. She is one of
Speaker 1: the most popular stars on Twitch with more than a
Speaker 1: million followers. Meat iron Mouse. She not only plays some
Speaker 1: of the most popular video games on the streaming site,
Speaker 1: but also sings karaoke and cracks jokes to her many followers.
Speaker 1: For more on the ride is of iron Mouse and
Speaker 1: other v tubers, I'm joined by Bloomberg Cecilia Donastasio, who
Speaker 1: covers the gaming industry for US. So who is Iron
Speaker 1: Mouse and why has she gotten so popular? Iron Mouse
Speaker 1: is an anonymous woman Puerto Rican woman who became very
Speaker 1: popular on Twitch and on YouTube for live streaming herself
Speaker 1: as a virtual anime character through motion capture technology. Iron
Speaker 1: mouse kind of moves in front of a camera and
Speaker 1: that gets fed through animation software and that is what
Speaker 1: you see on screen. You see a v tuber or
Speaker 1: virtual YouTuber. So what don't we know about the woman
Speaker 1: behind this character. We don't know anything about the woman
Speaker 1: behind this character, but um, she keeps herself anonymous just
Speaker 1: to protect for her own safety. So talk to us
Speaker 1: about the rise of v tubers and who else is
Speaker 1: falling into the popular category. There are seventeen thousand v
Speaker 1: tubers right now. Iron Mouse broke records, recently becoming the
Speaker 1: most subscribed to woman on Twitch and the most popular
Speaker 1: vituber on Twitch last month. But vtubing has become a
Speaker 1: sensation over the last couple of years, with an over
Speaker 1: four hundred and sixty seven percent increase between two thousand
Speaker 1: and twenty and two thousand twenty one. And fans love it.
Speaker 1: They love the feeling of interacting live with an anime character,
Speaker 1: um or a person kind of presenting themselves as an
Speaker 1: anime character. You know. Obviously we've talked a lot about
Speaker 1: the rise of YouTubers and the kind of money they
Speaker 1: can make. I mean, is there a lot of money
Speaker 1: to be made? Here are their careers to be made
Speaker 1: here for a select few. There is money to be
Speaker 1: made and there are careers to be had. There are
Speaker 1: UM some larger brands who have invested in v tubers,
Speaker 1: particularly in Japanese vitubers. Companies like Sega have been involved
Speaker 1: UM in sort of helping sponsor companies. The first v tuber,
Speaker 1: Kazuna ai UM has done enormous deals with even like
Speaker 1: the Japanese Tourism agency UM. But generally king it is
Speaker 1: a competitive field right now, and only the top people
Speaker 1: with the best technology. You're going to succeed on the
Speaker 1: level of Iron Mouse House, all right, Cecilia Donastasio. Fascinating.
Speaker 1: We'll have to try to learn more details about Iron Mouse.
Speaker 1: Thank you for sharing that. Coming up, they just raised
Speaker 1: nearly two billion dollars. Looking at that big on tech.
Speaker 1: My exclusive conversation with lead Edge Capitals Mitchell green Up. Next,
Speaker 1: Welcome back to Bloomberg Technology. I'm Emily Check in San Francisco.
Speaker 1: What goes up must come down, right My next guest
Speaker 1: thinks tech valuations have gotten ahead of themselves and it
Speaker 1: has launched a new fund to put new money to
Speaker 1: work in this rapidly changing macro environment. Joining me now
Speaker 1: for more. Founding partner of lead Edge Capital, Mitchell Green. Mitch,
Speaker 1: great to have you back with us. So how do
Speaker 1: you think valuations are high right now? Are they too high?
Speaker 1: And what's next? Thanks? I only thanks to much for
Speaker 1: happing me on. Are we talking public or private company evaluations? Both? Both? Um?
Speaker 1: So we look at me. Anybody watching the markets has
Speaker 1: obviously seen that, especially in the software internet world, UM,
Speaker 1: public evaluations have come down, you know, fairly dramatically. Um,
Speaker 1: You wouldn't know what in the induscry has given just
Speaker 1: how much of the induscry has weighted towards like you know,
Speaker 1: the large camp companies like Apple and you know, um,
Speaker 1: you know Microsoft and Facebook and Google and stuff like that.
Speaker 1: But but underneath those, you know, companies like Snowflake or
Speaker 1: Toast or you know Acta or you know, these companies
Speaker 1: have come down hugely dramatically. And you know, public companies
Speaker 1: tend to you know, lead private company evaluations. And I
Speaker 1: think you will start to see and we're starting to
Speaker 1: see private company evaluations to climb. Um. You've had a
Speaker 1: lot of crossover hedge funds that had entered that had
Speaker 1: been into the space over the last five years, and
Speaker 1: you know we're looking at some large deals right now.
Speaker 1: That is you know, six months ago, it would have
Speaker 1: been kind of swarmed easily, you know, fifty sixty million
Speaker 1: dollar revenue companies that would have been swarmed by a
Speaker 1: crossoverpublic investors. And I think in this deal there's like
Speaker 1: one looking at it, So it should be a good din.
Speaker 1: Depressed valuations and less competition should be a good time
Speaker 1: to you know, uh deploy money. Right, So how do
Speaker 1: you plan to put this new one nine five billion
Speaker 1: dollars to work? Yeah? So UM s any way, we
Speaker 1: have been UM for many, many years. You know, we
Speaker 1: deployed our last fund, UM nine million dollar fund in
Speaker 1: like fifteen months, and so you know we want this
Speaker 1: fund to take you know two and a half to
Speaker 1: three years, two and a half years, three or to
Speaker 1: three years to invest. And so UM continuing to do
Speaker 1: what we do. You know, we're primarily uh Western European
Speaker 1: uh you know, UM North American investors. We've done some
Speaker 1: stuff in Asia over the year as companies like Aunt
Speaker 1: or Bite Dance, Sarah Ali Babbo Group, we were early
Speaker 1: investors in, but primarily US and Western European and Israeli
Speaker 1: based software, internet companies and fintech companies. So you know,
Speaker 1: when you when you look at valuations, are are you
Speaker 1: changing your own bar in terms of what is reasonable?
Speaker 1: And do you think more broadly, we're just gonna see
Speaker 1: a lot of air get let out of the balloon. Yeah,
Speaker 1: So since we our biggest mistakes, to be clear, over
Speaker 1: the last five ten years was UM not predicting multiple expansion. UM.
Speaker 1: Had we we would have made our LPs billions of
Speaker 1: dollars more than we've made. We've done really well, but
Speaker 1: we would have made a lot more UM. And you know,
Speaker 1: look the way we the way we mob way we
Speaker 1: make investments is we build five year models and this
Speaker 1: is this is new, different today that it was five
Speaker 1: years ago, and we slapped a reasonable you know, earnings
Speaker 1: and revenue multiple on them and and discount back. Um.
Speaker 1: There were a bunch of deals getting down over the
Speaker 1: last twelve you know, starting kind of like there are
Speaker 1: a bunch of deals I got done in one that
Speaker 1: we could not figure out how people were underwriting these
Speaker 1: these these valuations. Was when we stuck in our exit multiples,
Speaker 1: which we thought were reasonable based on historical averages, Like
Speaker 1: we just couldn't get there at all, um, And it's
Speaker 1: just we just you know, we kind of use a
Speaker 1: historical average multiple to excess stuff and we'll continue to
Speaker 1: do that. And so I think what's interesting is it
Speaker 1: in fund five we just raised Fund six. Um, we've
Speaker 1: only done one or two deals in the Bay Area,
Speaker 1: and a lot of our deals were just some like
Speaker 1: random other places around the world. Um, you know, in Arbor, Michigan.
Speaker 1: It was one of our biggest investments in Fund five.
Speaker 1: We just thought you got better valuations there. It's not
Speaker 1: because we don't like stuff on the coast. I think
Speaker 1: in Fund six you will see us do more stuff
Speaker 1: on the coasts, just because I think valuations are getting
Speaker 1: to be more reasonable now. Online payments company Fast just
Speaker 1: close shop yesterday saying they simply ran out of money.
Speaker 1: Are we gonna see this happen more often? I'm sure
Speaker 1: you will. So, yes, I'm sure you will. We have
Speaker 1: this one criteria that is super important to us called
Speaker 1: capital efficiency. And it's like our version of return on equity.
Speaker 1: It's like the very dumb persons and our views return
Speaker 1: on equity. Um, it's not like based in scientific fact.
Speaker 1: But what it is is is it are your revenues today,
Speaker 1: are your recurring revenues today or your annual recurring revenue
Speaker 1: are are greater or equal to the amount of money
Speaker 1: you've burned since day one of the business. Now, maybe
Speaker 1: you've raised a bunch of money, but if it's sitting
Speaker 1: in the bank, don't blame the entrepreneur. So, in other words,
Speaker 1: the world, the world is littered with like thirty million
Speaker 1: dollar revenue companies growing fast that have burned like a
Speaker 1: hundred million dollars to get there. But what we want
Speaker 1: to find the companies that are like thirty million of
Speaker 1: revenue that have burned like ten million dollars to get there,
Speaker 1: because those are companies that you know are just not
Speaker 1: going to like fall off a cliff if times get tough. Um.
Speaker 1: They also just if you can grow fast and not
Speaker 1: burn much money, you've got a good business. So it's
Speaker 1: just like a simple like a check that and every
Speaker 1: deal that we invest in, we we rate it. Is
Speaker 1: it a capital efficient or not. Now, not all the
Speaker 1: companies we've invested in our but the vast majority are
Speaker 1: just What are your thoughts? What are your thoughts on
Speaker 1: the crypto market? Where do you see hype and where
Speaker 1: do you see opportunity. Well, I think it's a giant bubble. Um.
Speaker 1: But we to be completely fair, we have not. Um,
Speaker 1: we have not. We've looked at some of this stuff
Speaker 1: in grypto more on, like the pis and shovels businesses,
Speaker 1: like a business called chain analysis. We looked at early
Speaker 1: we're not investors benchmark as an early investor. So where
Speaker 1: do you see the giant bubble? I'll know the right
Speaker 1: price for bitcoin is sixty seventy thousand, twenty tho or five.
Speaker 1: I just of this when I have a lot of
Speaker 1: random friends who know nothing about investing in telling me
Speaker 1: it's easy to make money in crypto, Like that smells
Speaker 1: bubble to me. I also Um, one of my buddies
Speaker 1: who has better really early investor in crypto and made
Speaker 1: a lot of money on it. And somebody I guess
Speaker 1: I should like I should have listened to UM say
Speaker 1: he's convinced that like every fraud ster in the world
Speaker 1: is now in the crypto world, like like this stuff
Speaker 1: is real and by if you believe that like crypto
Speaker 1: crypto is the next like Internet, then you might see
Speaker 1: a draw out of or but the stuff is real,
Speaker 1: Like I I just think a lot of this stuff
Speaker 1: is overhyped and like is not justified at all in
Speaker 1: um in you know, in fundamental fundamental investing. But I
Speaker 1: do think it's real. I do think it's here to say,
Speaker 1: one really interesting thing about crypto is it's like to like,
Speaker 1: it's really volatile. So I was reading recently what I
Speaker 1: saw that like Tesla was enabling you at one point
Speaker 1: to be able to pay for Tesla's in bitcoin. I
Speaker 1: thought that was like super cool. You could take a doubt,
Speaker 1: you could take a currency and use it for an
Speaker 1: exchange of goods or services. The problem is is, like
Speaker 1: and the reason they got rid of it, and why
Speaker 1: I think you haven't seen Amazon and other big weakdail
Speaker 1: or start to accept it is these currencies are just
Speaker 1: too volatile. Like I think there's been like something like
Speaker 1: ten days where bitcoin is moved like in a day,
Speaker 1: Like the biggest US dollar move ever like a U
Speaker 1: S dour Euro move ever has been like one and
Speaker 1: a half percent, and it's happened like five times. So
Speaker 1: these things are just too volatile right now. But I
Speaker 1: do think they're real. Yeah, all right, interesting little monologue there.
Speaker 1: Richell Green, founding partner at lead Edge capital some strong opinions.
Speaker 1: We'll see how you put your money to work. Thank you. Meantime,
Speaker 1: billionaire crypto investor Michael Novegrat says that once the FED
Speaker 1: takes a pause, Bitcoin could take off again, or in
Speaker 1: his words, bitcoin goes to the moon. Novograts leads Galaxy
Speaker 1: Digital Holdings at the Bitcoin conference in Miami. Novograts reiterator
Speaker 1: to call that bit and will eventually hit a price
Speaker 1: of one million dollars. It was trading today at a
Speaker 1: little over forty four thousand. He really truly understands the
Speaker 1: value of cryptocurrency, whether it be uh, you know, bitcoin
Speaker 1: or doge coin. He has and he knows the value
Speaker 1: of open source network. So what I think is going
Speaker 1: to be interesting is is he going to bring these
Speaker 1: elements of the crypto world, these anti censorship not elements,
Speaker 1: the open source elements and allow for a way for
Speaker 1: new people to come in and maybe import their own algorithm.
Speaker 1: H Time now for our crypto report. That was the
Speaker 1: Blockchain Associations Kristin Smith saying it's a good thing for
Speaker 1: Twitter that Elon Musk is now on board this day three,
Speaker 1: how of this developing story and I want to dig
Speaker 1: a to it all with our crypto Contributornelli Bostick. Jan
Speaker 1: Ali would love to hear how the crypto community is
Speaker 1: digesting Elon Musk joining the board of Twitter, given he's
Speaker 1: such He's been such a loud figure in the crypto community.
Speaker 1: There's a huge crypto community on Twitter, and the future
Speaker 1: of Twitter could be more decentralized. Yeah, it was interesting
Speaker 1: to hear christ and Smith talk about it from the
Speaker 1: decentralized social network standpoint, because you could also emily think
Speaker 1: about it from a commerce standpoint. Remember, Twitter has already
Speaker 1: started to integrate pieces of the Lightning Network here to
Speaker 1: be able to make some payments possible via the platform
Speaker 1: through the Lightning Network, which is obviously a very popular
Speaker 1: project when it comes to bitcoin and payment transfers. But
Speaker 1: the idea of decentralizing social media, there are a lot
Speaker 1: of projects out there that people try to use when
Speaker 1: it comes to media and decentralization, but they're still in
Speaker 1: early days. Now. The question is can Twitter play a
Speaker 1: bigger role in the space? Alright, Janel I say with us,
Speaker 1: I want to bring in our next guest who is
Speaker 1: joining us live from the Bitcoino conference in Miami, Pascal
Speaker 1: go taste, CEO and chairman of the crypto security startup Ledger.
Speaker 1: Before we dig in, Pascal, I'd love for you to
Speaker 1: give us a flavor of bitcoino this year. Of course
Speaker 1: it was big last year. Is it even bigger this year?
Speaker 1: And what are people talking about? Yeah, this year is
Speaker 1: very intense. Last year sadly I couldn't come because European
Speaker 1: and so I couldn't I wasn't allowed to travel to
Speaker 1: the US. But what I know from what people tell me,
Speaker 1: it's like this year is even more intense of last year.
Speaker 1: I think, you know, we're post pandemic, and so you know,
Speaker 1: people are very happy to meet, like a meeting with
Speaker 1: people that I've only met online so far, and right now,
Speaker 1: you know, it's a very happy moment and you can
Speaker 1: see that it's it's it's really going very strong with
Speaker 1: a lot of support from you know, all communities that
Speaker 1: are going towards bitcoins. So it's a great moment for bitcoin.
Speaker 1: Ledger is known for its crypto hardware wallet and you're
Speaker 1: out with a new one. How is this new better improved? Well,
Speaker 1: it's just that you know, crypto currencies are evolving, and
Speaker 1: so with the evolution of the protocols and the evolution
Speaker 1: of like you know, the application that's seen on top
Speaker 1: of protocols. You just need new hardware to enhance the experience.
Speaker 1: And you know the Ledger nos plus is it's just
Speaker 1: the result of that, Like you need norse, you need
Speaker 1: more space, you know, you need more usability, and so
Speaker 1: this is what's happening. So it's a product that was
Speaker 1: long overdue. It's out now in the market, and there
Speaker 1: will be many more products coming for Ledger in the future.
Speaker 1: You know, there have been a lot more instances of
Speaker 1: scams and hacks and the n f T and in
Speaker 1: the DeFi space. How is Ledger attracking attacking? What's happening here?
Speaker 1: And can you keep up with the technology that hackers
Speaker 1: are using to to get into new spaces? Yes, of course,
Speaker 1: I mean you know hikers are always hiking in exactly
Speaker 1: the same way. You know, the problem is education in
Speaker 1: the space, and you know people are understanding that they
Speaker 1: need hardware security. Just think you're their assets. You know,
Speaker 1: this is the fundamental truth of cryptocurrencies n f T.
Speaker 1: I mean, anything that has a private key needs hardware security,
Speaker 1: and so people need to learn and usually you know
Speaker 1: they sometimes they learn the hardware and we're sorry for that.
Speaker 1: But when it comes to n f T, you know,
Speaker 1: NFT is treated as a first class citizen on all
Speaker 1: Ledger products, and right now, depending on the n f
Speaker 1: T collection, you've got between twenty five and four of
Speaker 1: all n f T s that are already secured by Ledgers.
Speaker 1: So I think we're doing our job and you know
Speaker 1: the communities are responding well and using our product to
Speaker 1: secure themselves. What do you think about competition in the
Speaker 1: space also, you know there's news of Jack Dorsey and
Speaker 1: the block working on hardware wallets. Are you nervous about
Speaker 1: that and how does it change the competition when it
Speaker 1: comes to the wallet space. Well, first, I think competition
Speaker 1: is always welcome. You know, it means that there is
Speaker 1: a space and it means that there is something there.
Speaker 1: So you know, Ledger is is a very strong company
Speaker 1: and there are a few hardware manufactus what it manufacturers
Speaker 1: in the world. But you know the fact that Jack
Speaker 1: Dorsey and blog and taking a taking this is good.
Speaker 1: We we we know them, we talk to them, and
Speaker 1: you know, I feel that what they're doing is actually
Speaker 1: you know, something that is bitcoin mainly and within the
Speaker 1: realm of what Block and Square doing. You know, I
Speaker 1: think that Ledger is a much more holistic approach. Like
Speaker 1: you know, we are hardware manufacturer. We care for every community.
Speaker 1: We're not deedpoint only you know, of course, we're vary
Speaker 1: from a bitcoin, but we are multi chain, and I
Speaker 1: think the future is to hide away the complexity for users,
Speaker 1: like they shouldn't worry so much about the chain, but
Speaker 1: they should worry about you know, manufacturers like us worry
Speaker 1: about the experience in the future. So we are very
Speaker 1: focused on the journey of the user and making sure
Speaker 1: that we support every community in crypto, and I think
Speaker 1: that's where we're very different from everyone else. Well, speaking
Speaker 1: of communities in crypto, there's a big one on Twitter.
Speaker 1: And since we mentioned Jack Dorsey, I'm curious when you
Speaker 1: think about Elon Musk joining the board of Twitter, given
Speaker 1: his thoughts on decentralization and his own sort of role
Speaker 1: in the crypto community, how does that strike you? You
Speaker 1: know where what it strikes me the most is I think,
Speaker 1: you know, I followed all of this and I think
Speaker 1: Elon Musk is a beautiful troll and I think it's amazing,
Speaker 1: and so I think he's taking a stance at freedom.
Speaker 1: I think, you know, freedom is a concept here that
Speaker 1: you know that Elon is standing behind, and uh, you know,
Speaker 1: freedom of speech, and I think, of course is big.
Speaker 1: The reason why it's big on discerent t realization is
Speaker 1: because decentralization brings freedom to the people, and I think
Speaker 1: freedom is really motivates in here. And actually freedom is
Speaker 1: what ledgury is all about. Like we want to empower
Speaker 1: people with tools so they can you know, we claim
Speaker 1: their self sovereignty, like on you know, what they want
Speaker 1: to own, whether it's a bitcoin, whether it's an n
Speaker 1: f T or everything else that's going to go on
Speaker 1: blockchain in the future. So I'm very aligned with you
Speaker 1: much move and you know he roots for freedom and
Speaker 1: so are we. So go on. You don't normally hear
Speaker 1: the words beautiful and troll together. How can a troll
Speaker 1: be beautiful? Oh, because I think it's a is an
Speaker 1: Internet genius, Like every time you post something, he breaks
Speaker 1: the internet. So but I think sometimes it's throwing. I
Speaker 1: mean we're talking about like in being a promoter or crypto.
Speaker 1: I don't think you know, being a promoto does is
Speaker 1: you know the best that you can do for crypto,
Speaker 1: but Elon is doing it. So you know, I don't
Speaker 1: agree with everything that you know, the must say, but
Speaker 1: I have to say that, you know is the is
Speaker 1: an Internet magician, so you know, you have to respect that.
Speaker 1: You know, this idea of security and and some of
Speaker 1: these big names Elon Musk when it comes to potential
Speaker 1: crypto and Twitter and Jack Dorrisey getting deeper into crypto.
Speaker 1: At the end of the day, with crypto being down
Speaker 1: even among one of the biggest conferences that surround bitcoin,
Speaker 1: what are you seeing in terms of institutional interests and
Speaker 1: what's stopping people at the end of the day really
Speaker 1: from getting in. Nothing is stopping people to get in now.
Speaker 1: I think I think people need to understand that with crypto,
Speaker 1: we sort of we just got into like a thirty
Speaker 1: years uh you know, uh circle of like going up.
Speaker 1: You know, like there is massive adoption anywhere anywhere you
Speaker 1: look at, you know, whether it's cryptocurrencies, n f T s.
Speaker 1: I think that the next big thing will be played
Speaker 1: to earn um and so you know, everyone is coming
Speaker 1: in from from retail perspective, but also from an institutional perspective.
Speaker 1: You know, I've been in these games. It's two does
Speaker 1: and fourteen. And I can tell you that now no
Speaker 1: one is doubting the you know crypto or bitcoin or
Speaker 1: you know bloog chain technologies. Like everyone wants in and
Speaker 1: so you have an amazing phenomenon because it's worldwide two
Speaker 1: Like everyone is getting in from everywhere in the world.
Speaker 1: And this is actually very unique. This is the first
Speaker 1: time that everyone everywhere in the world is getting in
Speaker 1: into the same technology rail. And so this is why
Speaker 1: you see so much momentum going happening right now. Pascal
Speaker 1: Gaultier Ledger CEO and Share will let you get back
Speaker 1: to Bitcoin Miami. Thank you for taking the time along
Speaker 1: with Bloomberg. Apple is back online the iphonemaker, announcing it
Speaker 1: will hold its annual Worldwide Developers Conference virtually for the
Speaker 1: third year in a row, a sign that major tech
Speaker 1: events are still a ways off from returning to pre
Speaker 1: pandemic norms. I want to bring in our Mark German,
Speaker 1: who of course covers Apple for us, So we mark.
Speaker 1: Apple has been leading a push to come back to
Speaker 1: its office for its own employees. Why hold this event
Speaker 1: virtually again? Yeah, they really had no choice but to
Speaker 1: do this virtually, right, We don't know what's going to
Speaker 1: happen with COVID over the next two months or so.
Speaker 1: It's not predictable. These shows take several months to put together, right,
Speaker 1: They either have to put three months of time and
Speaker 1: developing an in person version or three months time developing
Speaker 1: an online version. And it's really hard to put you
Speaker 1: all your effort and if you're splitting it across both,
Speaker 1: so they have to pick one direction, and the in
Speaker 1: person direction is just not safe at this point. Who
Speaker 1: knows what could happen with COVID one week or the
Speaker 1: day of the event where they have to cancel the
Speaker 1: whole thing. Apple was in a position where it really
Speaker 1: couldn't afford to become stuck, so we'd have to go
Speaker 1: online only. And the compromises they're going to allow a
Speaker 1: small number of people in the Steve Jobs Theater at
Speaker 1: the Apple Park headquarters to watch the prerecorded video live.
Speaker 1: So what are we expecting the substance of this developers
Speaker 1: conference will be? What will be the big announcements? I
Speaker 1: think this is gonna be a fairly strong Apple Developer conference.
Speaker 1: Right They are scheduled to release new Max, including a
Speaker 1: new version of the MacBook Air, around the middle of
Speaker 1: the year, so perhaps they use ABDWDC to introduce that laptop.
Speaker 1: That's going to be a very big deal. Obviously there's
Speaker 1: lots of fans of the MacBook Air and this will
Speaker 1: be the biggest redesign and the product's history, and we'll
Speaker 1: have a new version of the Apple in house. Chips
Speaker 1: were also looking for major fitness tracking and health upgrades
Speaker 1: on the Apple Watch, as well as a pretty big
Speaker 1: update to iOS Dios sixteen, though I'm not expecting a
Speaker 1: full blown redesign. And additionally, there should be some conversation
Speaker 1: about a R and VR applications ahead of a larger
Speaker 1: reveal of its mixed reality hardware for its headset later
Speaker 1: this year or next year. You've been reporting on Apple's
Speaker 1: return to the office and push back from some employees.
Speaker 1: How is this evolving? I mean, and could you see
Speaker 1: Apple losing talent as a result when you know other
Speaker 1: companies are also pushing for people to come back. Yes,
Speaker 1: So next week that's the deadline to start returning to
Speaker 1: the office if you're an Apple corporate employee. Right, So
Speaker 1: they'll start one day a week in the office on
Speaker 1: April eleven, right next Monday, and then a few weeks
Speaker 1: after that, it will be two days a week, and
Speaker 1: by the end of May, or a week before the
Speaker 1: end of May, they're going to expect employees in the
Speaker 1: office Monday's, Tuesdays, and Thursdays. Now, I would say there's
Speaker 1: probably at least a few hundred employees who are leaving
Speaker 1: Apple over that policy. But you know, we should note
Speaker 1: that Apple has over a hundred and sixty thousand employees.
Speaker 1: Obviously most of that is retailed. It's still several tens
Speaker 1: of thousands of employees, so this is a small number
Speaker 1: of people all together. The interesting thing to me, if you,
Speaker 1: if anyone wants to read my Business Week story on this,
Speaker 1: is that Apple put out a nine minute advertisement how
Speaker 1: how great its own products, software and services are for
Speaker 1: remote work. Yeah, it's recording those very people who developed
Speaker 1: those products to work from the office. So a little
Speaker 1: bit of irony right there. Irony. Indeed, Mark German as
Speaker 1: always great to have you. Thanks, and that does it
Speaker 1: for this edition of Bloomberg Technology. We are back tomorrow.
Speaker 1: We're gonna be joined by J. B. Unknown, President and
Speaker 1: CEO of eBay. And don't forget to check out our podcasts.
Speaker 1: Find it anywhere you get your podcast. I'm Emily Chang
Speaker 1: in San Francisco. This is Bloomberg