The fbi official in charge of Cyber Security joined tech ceos, entrepreneurs and officials to discuss Technology Policy and on a Forum Innovation at a Fortune Magazine summit in aspen, colorado. Thank you. Moving on to our opening interview. Sometimes plan a does not work out. You have to be ready to improvise. That is one of the themes in our next story and conversation. I want to welcome the cofounder and ceo of post mates, Delivery Service that is part of the race to remake the way beast shop and get our stuff. He has raised a quarter billion dollars. You know, average in cilic and ballet. Sharing how his company is facing the challenges and also introducing us to a new friends. Please welcome sebastian lehman. Ok, the biss model is Pretty Simple. There are few other Delivery Companies out there that of gotten pretty big as well. But you guys have focused on innovating in certain areas can you explain how you approach innovation. Bastion good morning first of all. Thank you for having me. Excited to be here. We like to complete not dollar per dollar but with innovation as you mentioned. And i think in many cases it is the smarter way to compete. Money is one angle and an important one. But if youre not the most well capitalized player in a space that youre operating in, you have to find alternatives to compete. Do as a company at post mates. Have ithe innovations we think we brought here today. There is uphat piece of the networks we are building that can be served with Autonomous Vehicles. And ours is called serve. It drives itself, hopefully not off the stage and understands there is an object here, for example. We call that socially aware navigation. Sonavigates on the sidewalk, it needs to do things different lathe than on the street. It is all built inhouse. The team it needs to do things differently than on the street. It is all built inhouse. Excuse me, im a little distracted. So my. It is the first time she is on the stage. Sheet . All a robots rc. She. s all a robots are fromt you something here an ice bakery, apparently it is a staple in aspen. Paradise bakery. [laughter] the baked goods are fine. This is that. It is our little ipod. Ok so lets sit down while i im going task ask his questions. Why bring it inhouse. There are a few companies doing this. Already. Youre not offended if i do not . Why bring itou inhouse if that was not your competency two years earlier. Bastion we looked at the landscape to figure out if there were companies we can acquire to help us build serve. It turns out the way it sometimes is in Silicon Valley that the valuations of his companys works truly high. He said, you know what, we think we can do it inhouse, we do faster. Because the only thing that we need to do inhouse is to be our own customer. We do millions of delivery every month played we have all the data that every Company Needs in order to build the Autonomous Vehicles to perfection. We decided to ring it inhouse. Roadmap. S the when is it launching, house luncheon, where is it launching, how difficult is it to roll it out into cities. Bastion the beautiful thing about service that because it operates on the sidewalk we do not have to wait until it has achieved, until we have permission to to play with autonomy. This means we can use it in the mode we call semiautonomous. We have an operator that can look at it and intervene in situations where it cannot figure out yet itself what to do. Is the operator sitting in some war room . Bastion remote in San Francisco. We work with veterans organizations across the country help them have better help veterans find jobs when theyre back from serving this country. I think that is a bit of a part of it. But obviously, selfishly it helps us deploy it serve, and we are testing it now and l. A. Might get more questions on serve later and innovation. But lets get serious for minute, are you going public . Bastion ok. I think you know the official line is that i cannot comment on this in any way. Towould love to taste take postmates public. I have said it before. I think it is one of the Great AmericanConsumer Brands we have in the millennial customer group. It is well loved. And our plan is to take it public. Reports that the you are in talks with several other players, Companies Like uber for example. Where do those rumors come from . Are they, can you substantiate them . Bastion well if i would know where they are coming from i would have addressed that already. Look, it is a small industry. Theres a finite amount of players. Postmates has to mend distraction this year. We are growing twice as fast as he reads, as grub hub. I think people noticed that. If you take the necessary steps to prepare your company to go public you will get inbound. And we do with all inbound request the same thing we have done always appeared we look at it and make the smart decision. That is what we do. Theres quite a bit of overlap with Customers Using multiple brands in the space. Cases at someme locations at least, maybe not in los angeles, but at locations does the lacko brand loyalty naturally lead other factors the lack of brand loyalty does that naturally lead to other factors in the space. See the leastl overlap is between postmates and any of the other lap. Other brands. We are very focused on the melinda customer. 60 of our customers are female. We are focused on the millennial customer. 60 of our customers are female. We have a lot of exclusive merchants. We have carved out a Customer Base that we like and that is very unique. What is the reason for the popularity in los angeles . You seem to have large market share their specific. Bastion in a laypeople think postmates is cool. It is difficult to understand because in Silicon Valley in los angeles people think postmates is cool. In Silicon Valley, nothing wiles us. You almost have this, for players with the old market share. We were the first in los angeles. A superpower. People that have very limited time, musicians, entertainers discovered the app. Now five or six years ago. They thought adjustment is things. They started talking about it. Creative people started writing it in movie skips scripts, and tv series and movies. That helps. Im afraid to say that it was not me that medical. But that made it cool. But it really has an iconic status in l. A. In l. A. If you want to have something delivered, you will say to postmates it regardless of what service you use. You have become a verb. I want to go to you all for questions, please think of some. Speaking of california, how many of you are familiar with the bill that is coming up, ab5. This would potentially reclassify independent contractors as employees. Have any contractors you have currently . Bastion around 400,000. What does that do for your Business Model . If that passes . Bastion i think the right way to look at this is to understand what it does to the people that do the deliveries on the postmates platform. Forhave, and this is true most of the platforms in the delivery space, you have almost 90 of all the postmates we have on the platform they work on the platform less than five hours a week. It truly is some mental income. It is 400 it is truly supplemental income. 400, 500, 600 a month. It is the same amount of money that most americans cannot spare when it comes to medical offenses per year. We believe postmates fills a gap when it comes to income. An important gap. This is why the august lee believe that leaving these people as independent contractors, as matter fact not leaving them but make sure that in any bill it passes that we solidify their status as an infinite contractors is the right thing to do. And you think you have a good chance of making the case that they remain in petty contractors . Bastion postmates works with labor unions, the governors office. We have the fleet Advisory Board now for a much two years. It helps us do the fleet. And i think we have put forward a proposal that makes it very clear that we care deeply about the workers on the platform. Where will billing to willing to put a benefit fund, chat more worker voices on the platform. So yes, i think we are doing the right thing. Questions from the audience. People need more coffee. If you have a question, raise her hand. Lets talk about innovation. Raise your hand. Seems like its a Pretty SimpleValue Proposition here. What other ways are you looking at not only offering more to your customers, but also optimizing the way you operate . Bastion i will give you a few examples. When the comp he was two years old, we unveiled our api, delivery as a service. Thus first in a space. The space. T in it allows us to act more like fedex. If you are one of our our customers if youre apple or walmart or 7eleven, you can have access to the postmates fleet and do things that were priestley nolan are possible. Fastan deliver your goods in 3000 cities in the United States. It is a great product. It grows actually fast. Almost to hunter percent year over year growth on the api side. 200 yearoveryear on the api side. Over third of our orders come from subscribers today. Pay a monthly or annual fee and you get free deliveries in return. We launched Postmates Party a few month ago. It has done a lot more. It is the same age as my daughter, but it is done a lot more already. Theres a lot going on her brain. He does cannot see that. Bastion postmates allows you to free delivery or Somebody Just placed an order with your location. When you open the app you can see great places you can tag onto. So you trade a few minutes of your time for free delivery. And in your and it helps to increase efficiency. Bastion we do the thing selfishly, but many, many times they have a great benefit to the customer as well. Efficient ando be batch and bundle deliveries. We launched it to month ago and it is now 15 of total volume. Anyone here use postmates . Arty aixa the vehicle you said you are testing in los angeles, what if people randomly come upon it, how they react. It . People stop and look at a and do she have programmed responses and countering people . Is a great question. We have a team focused on the interactions part. Yup a few interactions on serve. You have an illumination around the ring. The display. People are very curious. They want to interact with it. To the extent that we will have a more sophisticated program as part of the launch that allows serve to get back. We are thinking about use cases where you could ask sir for help. Or serve could ask you for help. Theres a delivery robot in a hotel, i do not know which hotel, that delivery robot delivers food. Rims service. The one thing it cannot do is press the button to move the elevator to a floor. So it will ask you to press the button for the robot. It is a great interaction because it actually shows how we can come plenty to other. We started how we can complement each other. What does it do if nobody is in the elevator . Bastion it waits around. Serve does not do elevators yet. We started testing it in a community for elderly people. We wanted to do that in a gated community because we thought if we can figure out a way that it not justeatening to the millenials who are used to technology around them, but to a group of our society that is a little bit less used to it, we will achieve great learning. It was fascinating to see the interactions there. We wanted to make it as easy to use and interact with as possible. Question. That she collected data as she is going around because she has two pretty fearsome cameras. How are you approaching privacy of what she sees. Does postmates operate outside the u. S. And if not you want to and if so where . Bastion we do in mexico, where live index custody. It is a great market for a spring we may expand further. It is a great market for us. We may expand further. The data we collect, we did the same as everyone else, we will just sell it to the highest better. [laughter] withink it is unique facial recognition so no one will be safe once these are fully deployed. [laughter] your person here is just as like freaking out. That i was born in germany maybe that is just part of my evil plan. [laughter] you did make a joke. Backstage about how one point he could shoot lasers. At some point it could shoot lasers. Bastion there is always a little truth in everything. I wonder if you could talk a little bit about, it is not the space inside is not huge. How efficient is it and cost efficient in terms of replacing humans at some point . Bastion it is important to really understand when it comes to innovation that whatever you see in any moment in time does not is not how it needs to be forever. First imac was a slow computer but it looks great and it captivated people. It had a handle on it say thought you could carry around with you which of course nobody does of the desktop computer. We wanted to take the same approach. To create some thing nonthreatening that has a medium formfactor about the size of a kid when it is around 10 years old. That is in our peripheral vision when we walk on the street, that is where we walk and look and communicate. This is the first version. Fewnly needs to work for a number of deliveries on the platform for us to make sense to operate it. It does not have to do one had a percent of all deliveries. In fact we do not think it should. But it can do very short deliveries. Aixa do deliveries that are not time sensitive. It could deliver prescriptions from walgreens. There a lot of use cases where we believe the formfactor we have today is very sufficient. And to be honest most deliveries we do on the postmates platform do not take up more space than what is inside of serve. The question about independent contractors versus employees. I know at some point this is a question for uber and left a and,s and others. The same answer as with innovation or the idea that we will replace everything is as true as computers have replaced all of us up to this point. It will help, it will augment, it will make things possible that have not been possible before. I think it is also important to see the other side. Can you imagine we have deployed a few thousand of these. They are here to help us fulfill the dream of having an infrastructure that can deliver goods locally at zero cost or close to zero cost. With that allows is it allows local businesses to distribute their goods furniture miller low cost. I believe that is important. It helps to deliver their goods for an extremely low cost. It helps local businesses thrive. It helps hundreds of thousands of retailers in the United States compete with amazon because they will have a better and faster interceptor than amazon has. That is a Positive Side to things to look at. Talked about how you dreamed of coming to cilic in valley two senate call come to Silicon Valley. Has it become harder for you or others to come to Silicon Valley and scale in cilic and valley or San Francisco or elsewhere in the area echo bastion in my view there was a time when you could be a founder and entrepreneur and you had a year to tinker around. In a way that was enjoyable. Was unimportant to the bigger companies. It gave you time to figure things out. The huge challenge now is whatever you do, if it has the chance of success will get copied and it will get attacked from all sides immediately. It is a lot harder. Maybe that just means the ideas we need to work on or thing about have to be more fundamental than just how can we can get you a pizza and 25 minutes. Forward to seeing what news unfolds with you in the next few months. Thank you so much. Bastion thank you. I will see you out there. Baked goods for anybody. Givee we move on i want to a huge thanks to our premier partners, share well. Herman miller. Intel. Kpmg. Oracle. Nd Rbc Capital Markets i also want to thank our pack, ida ireland, new york stock exchange, and trip auctions. Thank you. Ok last september our next guest was appointed executive assistant director of the fbis criminal cyber and services branch. She is the fifth highest ranking official at the fbi and the top ranking agenda woman on the agenda. She oversees all fbi criminal and cyber investigations worldwide and works to protect rigell digital infra structure, most of it controlled and run by private companies. Please welcome amy hess with fortunes andrew ness got. Andrew good morning. Shelley . Re everyone, shall we. Recent poll say americans are more afraid of cyber activity then new clear weapons and terrorism. Should we be afraid . Amy short answer, yes. But i do not see those things as we usually exclusive. Cyber mean by that is involves all of those things all of those traditional threats we have seen over time, terrorism, espionage, intellectual property theft, crime, now takes on a whole new path in the sense of cyber capabilities. The x financial increase in technology we have seen has enabled those things to be really a lot scarier. Yes. Ew so before i asked you about the specifics, tell me about your role and what encompasses. We breakthe fbi ourselves down into separate divisions. One of the divisions i oversee is specifically focused on criminal investigations. Everything from public corruption and whitecollar Election Fraud all of those things, Violent Crime as well as financial crime. Another division i oversee is our cyber division. Those are the folks who are really looking at the intrusions. They what is out there as far as what the botnets or in skimming or business email compromise. And how it manifests itself. Im also responsible for all of our Global Operations across the planet. Seo plenty of free time andrew so you have plenty of free time. Amy right. We are about china and concerned about Global Competitiveness for United States p what are you saying come out of china and what w