Headlines oracle has reported its best this will quarter ever billiones of 9. 3 dollars and a 2. 6 billion profit. The competition from Cloud ComputingCompanies May have constrained sales and record results disappointed wall street, the stock selling off after hours. Oracles troubled hardware units fell by eight percent. Google has unveiled a new project for wearables with a focus on smart watches. They say they are partnering with a range of companies, including lg, samsung and fossil. The first smart watches will hit the market sometime later this year. The Washington Post is starting a new pilot row graham, giving subscribers of other newspapers full access to its website and mobile apps. This kicks off with six major newspapers signing on. Its a move by jeff as is to attract new digital traffic. First, weve got a special show for you today. Cory johnson is with me in the a partner atl as coastal ventures, celebrating one year as a venture capitalist. How is it going so far . Im investing in an amazing number of companies. To keep up with the entire entries. It has been an entire year. The a venture capitalist is interesting. You get to meet the most ambitious people in the world. The hard part is to discern whichone is sublime and one is ridiculous. How do you do that . When i was on a portfolio side of things, it was keeping up on 30. 18 is a lot of companies to keep track of. Did 30, i have 12 more. I had a history and things i could dig into that you do not have as a venture capitalist. That is true, but a lot of investments ive made have a common denominator. Common elements of local, social, community, payments so you know what you are looking for. When you are making an investment further away from your core expertise, thats much more ethical will stop you have to spend more time figuring out what matters and what doesnt. You were the ceo at square, a member of the paypal mafia. A long time company operator. How does that differ from what you are doing now . I know you did a lot of angel investing before becoming an official vp. What is different about your job now . The biggest friends is it is not your baby. You have a lot of babies. You have a lot of babies, but they are not yours. When you see people on the street using your product, its incredibly rewarding. All of the sacrifices rewarded when you see normal people that have no idea you have involvement with the Company Using your projects. In are running a team company, mentoring people, mixing dna. Its a lot like being the general manager of a sports team. As a venture capitalist, you are just editing at the senior level. On the other side, if you are intellectually curious, its awesome. Its like reading the world book encyclopedia everyday will stop you just read a different volume every day. Databases toom rockets to photo sharing back to rockets or automotive or engines will stop it is incredible. You nearly took a job at air b b. I wont comment. I could imagine news. Ont think its speaking of the sharing and sidecarer, lift you are a big investor in lift. Seattle is limiting the number andars for huber, lift sidecar. They can each only have 150 cars on the road at any given time. Also joining us is the ceo of sidecar from vancouver. But lets start with you. How big a blow is this . I think history is on the side of these companies. Americans andal real people all throughout the world love these products. At the end of the day, regulators will always cave to what real people want. Its just a temporary inconvenience in my view. Do you think it is temporary . We certainly hope so. Yesterday with that city council vote, innovation lost and the taxi industry won a battle. And thea longer war people really love sidecar and these other services. We will win the longer war. But youre right, it was a big setback yesterday. Speaking as a former taxi driver, i wonder about the response of the taxi industry. Were they really focused on the industry and shutting down you and your competitors . Yes. If you read the text of this legislation, it explicitly says one of the reasons they are creating it is because of competition with the taxi industry. Thats why they have created a cap of 150 drivers for each company. Feel a rationale for doing that is to protect the existing industry. These taxi lobbies have a lot of influence. Off greattually come under this new system because now they have choices. Operatet have to just under the oldfashioned taxi system. They have new systems like sidecar. What about the safety issues . Huge huber user. User. E uber there are times when they have taken me the wrong way down a oneway street. Has that ever happened with city taxicabsyork are a classic example. They certainly violate the speed limits and take clever route all stopped sometimes approved, sometimes not approved. The zero defect standard is ridiculous. Theyll have accidents, crazy drivers, people who violate load regulations. The comparison should be compared to what people do every day. This is archaic. When this stuff started, it would have been ok for ac to experiment and say we will allow incidence ofe the driver error and number of complaints. There are so many cities across the United States and now the told using these products scale, so theres no need to limit the experience in seattle and figure out whether users will be happy and drivers will be safe will stop will be safe. When i was a new york city cab driver, i would admit to going the wrong way down a oneway street once at least. Have you guys done comparisons . There are requirements in certain cities to have a certain amount of training. A certain degree of safety and training is probably necessary. Sidecar, we are incredibly proud of what has happened on the safety front. We are pioneers in creating this entire category of having background checks and Million Dollar insurance policies will stop but what is unique to and lift, if you look at the actual Safety Record and not the rhetoric in the use, the drivers drive as if they are driving their own car, because they are driving their own car. It is a very safe system. The vast majority of people who ride feel it is safer than a taxi. The safety argument is used a lot by the taxi industry, but the bottom line is these services are actually safer because you are being tracked by the phone, youve got a record and there isction, the safety of the crowd and other people have rated this driver. Rider is alsohe rated, so it is safer for the driver. I was just in austin for sxsw. Lift anduber and had trouble operating. It was so hard to catch a cab that you often felt stranded. Do you feel these regulatory issues will go away . We see tech friendly cities the very unfriendly to these services. Rex austen has always been this way. It has not changed and got worse. In seattle, the new development. But if you look at all of the cities, their welcome this to Tech Innovation and car service sharing has been incredible, mostly because at the end of the day, consumers love the service. Consumers vote with their feet. If they have an unsafe ride, they can stop at any time. Nobody requires them to use it and people will pick the services that provide a return on their time they appreciate. Versustalk about uber left versus sidecar. Clearly has the upper hand right now. I would not agree with that. Lift has a model that appeals to one segment and its a more friendly experience. You have a conversation with your driver, its a more social experience. You also have people driving their own cars which creates a Different Community dynamic. Theres a segment that appreciates that verses like sitting in the back like a vip, like you or me in a different service. But even drivers tell me the pink mustache is annoying. What if it rains . But it gives a sense of credibility to the company. When you are first trying lift the first time anyone has said a pink mustache gives credibility. Is thef there wall street journal just compared all three of us and find that sidecar is the winner because of the eta. Its a ride where you get a choice and its very different from uber and lift. Users will vote with their feet and i think their growth rates are astounding. I did not read the wall street journal study. I know my friends generally and lift, not sidecar. I wonder if it ends up being like a New York Stock Exchange the place where the most trades happened bring the most supply and it might be a winner take all. I would imagine that uber is making that argument. This is something debated all day long over coffee and drinks. There are some elements that are absolutely true. When you have a market in liquidity, winner take all dynamics take hold. But if you take different population segments were people prefer sitting in the back versus a conversation if you have different driver appeal, lift and sidecar have different agrees of flexibility. You have these discrete elements of the market, its difficult to have a winner take all situation. You think all three can and will coexist in a big way . I suspect there are probably to that longterm or viable. You could see pockets new york city is a very special market in transportation. London is a very specific market where the dynamics are different. Its not that you have a global winner take all. Which two . As you know, i am biased. Hang on i just want to hear keith say which two . I believe lift will do well clearly doing well. He has put you at number three. Im sure you dont like that. The bottom line is if you were to look back at other industries, in the beginning it looked like it was winner take all like facebook, but it does not end up being that way. There are lot of opportunities when theres a big market. To differentiate and as people look at sidecar and compare it to the experience like the wallr street journal did, they will find that sidecar is the clear winner. People have to give it a try and they will see. We will be watching. Thank you for joining us. Will stick around through the show. We will talk about your expertise, mobile payments. Welcome back. Im emily chang. Cory and my guest, keith rabois. We are talking about mobile payments would have doubled between 2012 and 2013. You are one of the big emerging players in this industry. You power lift, right . We work with lift and sidecar. Paypal powers you . That is the case today. Tell us what other platforms you power because you are behind the scenes. This is a platform for all sorts of Internet Companies and internet commerce. Work with side products side projects and startups and Public Companies. Some of the ones getting a lot of attention right now are the new mobile First Companies and folks like lift thomas sidecar talk about tend to in startup land. Just to explain a little further, its a little different than just a thing that happens at the payment spot will stop and we are not talking about some kind of crossfit wing and throwing the barbell up. We are not doing crossfit or batteries. Maybe it is more akin to the set and paypal. The focus of stripe is the idea that a lot of internet commerce is not happening yet that should be. Only 2 a macro basis of Consumer Spending happens on the internet today. We think of internet commerce of immature but we are actually it really early stages. Hard to turn back to the phone or hard Friday Market place like lift or sidecar to operate because the existing infrastructure is not set up well, we think there is a ton of opportunity to increase that 2 . We talk about the idea of increasing the gdp of the internet. Vocus. Stripes you are a long time expert, but you passed on stripe when you first a lot. I did. Big regret . Yes. Why did you make the decision to pass an income on the other side . Was a good thing to do in life. It took a lot of money. The real reason is i dont think i appreciated how much mobile was going to explode in 2009 or 2010 as opposed to substituting all the transactions occurring on paypal and other products to a new product which is difficult for anybody as opposed to unlocking a new opportunity will stop unlocking a new opportunity. Its a lot easier to build a company from scratch off of a new wave and i missed the new wave. But i dont think anybody sought back then. What is your number one question for stripe as an investor . Are mostly about not screwing up in some ways. Fast androwing really learning really fast and customers are demanding things. You are evolving internally very fast and differing mistakes is really important. Thats why you see in the media, things occasionally break open and linkedin had three ceos. That paypal, we had in the first year, we had three different ceos. It is a very complicated thing to build a company in a massive market. Just doing those things well usually yield excess. How do you make sure you dont screw up . We focus on every day. Areink he meant companies i think Payment Companies are ly difficult. In some sense, its remarkable we get to be the company that does this and we were founded in 2010. We have all of the challenges any other hightech startup has but you have to contend with international expansion, dealing with realtors and other countries and substantial capital requirement. The opportunity means you can change what has happened in the shape of internet commerce, but it 10 even harder market to exist than most. We have been lucky that the folks who have joined us so far have been up to the task. We will continue this conversation after the break. We will discuss the competitive landscape, next. We are talking about mobile payments here on bloomberg west. Keith rabois joins us. Offering on an initial from stripe. It is super competitive. How does this evolve question mark is it winner take all resid different . A i think there is kind of solipsism in Technology Companies were we think a Single Company can do everything in a space and its kind of ridiculous. A Media Company thought it might have an internet play. We are on one thing and that is enabling new internet commerce. These new services and websites, if you look at paypal, square, google and so forth, they are focused on much broader things. Square is doing peer to peer. Stripe is just this particular commercef internet accepting payment from consumers around the world. I think that focuses beneficial. When you look at the history of companies that do really well, that focus turns out to help. Thank you. We will continue this summer station we will continue a new conversation after this break with keith rabois. You are watching bloomberg west were we focus on technology and the future of business. Our special guest host for the hour is keith rabois. You have worked at some of the hottest companies, hottest Tech Companies ever. What do you think is hot right now . There is a lot of interesting innovation going on behind the scenes. Generation the next and the next generation. By the time things are in the public domain, it is already too late. Search works on the web is roque and on a mobile device. Whos going to figure that out first and be popular with users . You are seeing a proliferation of new apps powered by the address book instead of facebook and that will continue. Secret, whats up the address book is much more interesting. If you dont have a monopoly on the front graph, that poses a threat to facebook in the next five years. Ask how big a threat . Rex very serious. Fundamentally, we are somewhat fortunate apple does not lay in the social space and know how to massage the address book. They tried a little bit. The leadership that apple does not look at this. It could be a threat to all the social platforms. Withth the battle they had at t and face time, they are building a fiber infrastructure wildly so they can carry their own messages which i see as interesting in the world of google fiber versus verizon versus comcast. Suddenly, you have fiber laid by apple. They need the social layer on top of it, so they hire someone like david sacks and turn it into facebook overnight. Also former paypal mafia. That . O you think of desperate . I dont know. It is hard to tell. Buying up instagram was brilliant. Absolutely one of the best Business Decisions ive seen in my entire life. What app is a more complicated decision. I dont know if i would have made the same decision. It will take a couple of years to figure that out. What do you think of the fact that facebook seems to be buying versus building innovation. Any think longterm that is scary. Cisco has played this strategy well and it can be done. You could argue not well. You could argue there hasnt been actual return to investors theyve minted stock to give back shares bought to keep the flow lower, but there has not in a tremendous return in the past five years. A similar thing could be leveled at salesforce. But thereat is true, is some president by growing by acquisition but its almost always better to grow by innovation. It is scary when you depend on acquisition too much. Eclectic butvery insightful mix of acquisitions, so they purchase things like android which is absolutely indispensable. They purchase youtube which is very successful. Financials atg salesforce . I think there is an argument about how they are accounting and the sec has some concerns. They are not raking down revenue with the granularity you would expect from other Technology Companies. Look at google versus facebook versus apple, who are the best innovators right now . I think earlier stage companies, generally. Apple has a legacy of incredible innovation and i suspect theres another generation or two of innovations we cant even imagine yet. We will be wowed by them when they are shipped. I think the iwatch will be successful. Apple fries were you push the physical constraints. They will have to do that to keep the form, factor and limitations of a watch. Innovating inn various other dimensions that would not have been readable. I think it is possible to innovate successfully. Most of the core innovation and people we are looking for building things from the bottom up will stop you mentioned secret in passing. What do you think of them . I think it is interesting and there is going to be more anonymous to anonymous transactions. Read it has been massively successful. Its a very vibrant community. If you look at their metrics, they are on par or better than twitter. Its very influential and has real schedule. Hacker news is very influential in a tight community of startups. In other products they have to miss a story could well. The community can err on the side of a mob words not tied to realworld identity, but theres