Good morning. Im scott mcgrew. Drones are an inkrezbly sensitive and misunderstood topic. Theyre not illegal to fly, though there are specific rules about who can use them to record video. Youre not supposed to fly them near airports, though someone did last week near l. A. X. One of those radio control helicopter things. It went right over the top of us at 4,000. When we talk about drones were often speaking specifically about this brand. The drones feature an incredible amount of Technology Including gps, auto pilot and a camera for relatively little money. It was one of these drones that made an unexpected visit to the white house earlier this year. Here to talk to us about drones is eric chang, a stanford Computer Science grad. And a former photographer. Joined by dylan tweetty of venture beat. This television show, weve done two, 300 episodes. And my bosses let me do this tv show any way i want. They trust me to do a tv show. This time they found out we were talking about drones and they wanted more information. They wanted to know what video we were running, how we got that video. Even on a television station people are very sensitive about how these drones are used. Yeah, absolutely. We have found that to be the case. Its mostly because here in the u. S. The regulatory landscape for commercial use is still sort of up in the air. Im not to use drones in a commercial sense, is that right . Yes but it depends who you ask as well. All this is being figured out right now. Is that not as much as an issue in other countries . Its in fact not as much of an issue because most countries say across europe australia canada, have already figured out how to use these commercially and are allowing people to use them commercially. Here in the u. S. , were trying to catch up because its been really clear how useful these tools can be. And we want to encourage everyone to do so responsibly. How long do you think it will be before the faa catches up to the rest of the world . Its relatively unknown. There have been repeated delays. After that, there will be a common period. So it could be as much as a year or two years before whatever is proposed its a very strange place to be in. Its not, you know did you break the rules or did you not break the rules, will somebody please tell me what the rules are. And nobody seems to be able to do that because theyre still figuring them out. There are suggested guidelines. And we try to push our users into following those guidelines. One of them in the 400 foot aboveground level. If you just go straight up you buy this thing, you get excited, go outside. At 4 feet it will stop. Thats got to be easy to hack though. Its totally easy to hack. We dont want to prevent people from flying above 400 feet necessarily, we want to encourage them in a strong way not to. Why are we behind here . This is a huge market for you guys. This is one of your biggest. The u. S. Is absolutely our biggest market. Were behind here because technology has been moving so fast in this space, its hard for any Regulatory Environment to keep up. The faas mandate is not to allow drone use. It is to have safe skies. Their only mandate is safety. Is the fact that the companys based in china part of the holdup here . Weve seen what has happened to other Chinese Companies trying to come into the American Market and being shut out in many ways. Not that i know. So far, it hasnt been an issue at all. Most electronic goods are made in china. Were in coalitions here in the u. S. With all sorts of companies trying to do other things than just take pictures in the air. The fact that they are electronic where you can build in safety. Assuming youre not hack k them or using them the way theyre designed. The one that landed on the white house grounds, you then updated the firmware so they cant fly over the white house anymore is that correct . Quite some time ago, we implemented no fly zones around airports. How do we access that data and make it consistent across the platforms. So were continually adjusting from a technology standpoint. But the responsibility really lies upon everybody. Of course. With any tool. I mean, obviously, the user. With that said if i take a dji drone into the parking lot of sfo and turn it on it wont fly is that correct . Wasnt there a problem with the software though . The geo Sensing Software . Well, there are continuous updates. If you have old firmware you take a product you bought two years ago and unwrap it it doesnt have that geo sensing in there. Also being flown by the nsa i believe. They got their own rules. Really what i meant by everyone being responsible, not just consumers. Its the regulatory bodies involved, its the people using the products. If you go to the u. K. For example, and someone buys one Everybody Knows youre not supposed to fly in certain areas. The rules are very well established. Kids model airplane, you also not supposed to fly next to the airport. Right. Nothing changed with drones. I was looking at an older article that was saying back when the first camera phones came out, people were really generally upset over the potential of everybody carrying a camera. Privacy. Those are conversations we have to have about new technologies. Then you do sort of look backwards and say you know what, we somehow managed to survive. This is a little different because its a flying camera basically. Yeah. It has the potential to be more invasive because youre not up there holding it in somebodys face. Or dangerous. Although it captures a lot less data than your phone does. Your phone is capturing your location at all times. Were taking pictures with a gps stamp. For some reason people are much more concerned about a picture coming out of something that is unexpected. In fact, a helicopter, hot air balloon, stepladder next to your fence, theyre all sort of similar tools and air space is very complicated. So i want to know about the backlash. It was rand paul that said if somebody tried to fly a drone over his air space he would shoot it out of the air. Especially carrying vaccines. Do people shoot drones out of the air . There have been a couple instances of it. Those people have been prosecuted because you cant just discharge a firearm into the air. This is something the ntsb said in november youre flying at an aircraft which is a federal offense. Dont shoot these things out of the sky. Once again using a tool responsibly. One last quick question. The people who buy your drones who use them beyond photography. Hey, what does my house look like from the air, what can you do with it once youve take an picture of your house from the air . Vacation videos are very common. You can imagine it as a freeing unlocking the third dimension for a camera and movement. People want to feel creative all the time theyre looking for new ways to document something. Drones are a very good way to do that. Roof inspection these are practical things to do as well. The line between hobby and commercial use is not hard you know. When you have a tool thats very useful it might become obvious one day that you can do something with it that will save you one. You may not have to climb up on a ladder. Utility inspection. These sorts of things from companies. Eric chang with dji drones. We wish you the best of luck and your industry as well. Up next can anyone really buy an internet address. Meet a guy who essentially bought all of them when here continues. Welcome back. Weve talked about the new top level domains on this show before. Things like dot store and dot buzz and even dot ninja. You can buy internet addresses using these domain names now. You buy them from people who paid 185,000 to manage them. Daniel owns. Xyz. He is the youngest registry operator in the world. Explain to me how this works. Is it that xyz was available and you bought it or you said i want to invent. Xyz. I can which is the regulatory body that governs the internet had an application process where anybody could apply for any new top level domain name. It was something you came up with. It was my baby. I figured you end the alphabet with xyz, you should end a domain name the same way. So if i want scott mcgrew dont xyz im buying it from you. That registrar buys that domain from the registry. How many of these have you sold so far . Weve sold about 800,000 domain names since we launched june 2nd of last year. How much do you get per domain . Have you paid off that 185 k. I paid it off the first month. Our wholesale price is 8. The thing thats going to bother all three of us i dont think any of us have gone to a. Xyz website. Not yet. To whom did you sell them . They have terrible websites because were not going to them. It takes more than a few months to build a website. It can be incredibly complicated. People forget dot come was started 30 years ago. We are selling domain names all over the world. Were about 30 in the americas. About 35 in asia. We have retailers who are selling. Xyz domain names and theyre building websites every day. We found that almost a third of all. Xyz domain names are currently being used today. Are these mostly Small Businesses . With xyz were trying to really appeal to everybody, whether it would be a business or individual. We are more utilized by Small Businesses around the world that want a top level domain that provides them truly like a worldwide brand that doesnt fit them into any specific box. They have no borders with a a. Xyz. Which other top level domain names have been most popular . Ive seen so many and which ones have taken off. All of the original top level domain names and theres about 700 new top level domain names that started coming out last year and they are still coming out. So there are some coming out like a. Web or. Store. Theres about 500 of them out today. Some of the more popular ones would be like a. Photography or a. Supply. Most of the new extensions that have come out are specific for some specific industry where were trying to change the game a little bit and really trying to be for everybody by having no meaning. The meaning is to the left of the dot. Im just not seeing any of these. Is it possible that clorox is buying clorox. Xyz out of safety. 8 bucks right . Most retailers are selling it for less than 10 a year. Most of the registrants are the new internet users. Were really trying to target that next Generation Internet user. Somebody coming online for the first time that maybe didnt have the privilege of coming online 20 years ago and securing nbc. Com. They cant have nbc. Xyz. That said you dont have to come up with absurd ones either. You can have actual words, or has somebody taken pretty much all of those. Theres a lot of dictionary terms available today. Theres a lot of three letter, three number. About 98 of all fourcharacter xyzs are Still Available today. Theres 800,000 registered. And theres 116 million dot comes that have been registered. They register domain names and dont use them immediately. Theyre holding onto them because they might be useful later or might want to sell them. Made a couple bucks himself doing that. Of those twothirds of your registrants, i mean, its sort of a question what those people are doing with them how much theyre concentrated in a few domain name land or what have you. There obviously is speculation in any market. And with. Xyz weve seen an above average utilization rate. For onethird of them to be used when we launched seven months ago, i think thats pretty good. Most people are using these for future ideas or new startups or businesses that theyre coming up with. Were seeing this use case happen especially in the emerging markets. Somebody in china when theyre being presented the option to buy, a lot of times theyre choose an xyz. For them xyz being the last three letters of the alphabet its really transcendent. The letter com doesnt mean much to them. It actually makes more sense. When theyre coming online theyre choosing an xyz as their brand. And were also seeing a lot of people rebrand completely. A great example might be homelessinternational. Org. Youve probably never heard of that. They completely rebranded on an xyz. Thats really what im trying to do is provide competition and choice in the name space. Im seeing other registries slash their prices because were so affordable. Its awesome to see people completely rebrand sflg we wish you the best of luck with the. Xyz boom. Thank you very much for having me. If youd like more information, we have an interview with the head of domains, for ican. Up next inside first floor labs when press here continues. First floor labs on a tour with an aol executive a number of years akboe, back when aol had less need for office space. Theyd given that space to local kids mostly from stanford. Now, while aol gets no equity in these kids the company does get to keep an eye on them as they work on the next hot thing. First floor labs has grown over the past few years as aol has gotten smaller. This is also a graduate of a price Checking Company got its start there. One of the first things i want to clarify it was on the first floor. Its not anymore. Thank you so much. We started on the first floor but weve graduated and were on the third floor. Kept the old name. Domain and everything. Email addresses. The way it was explained to me is aol thinks its smart to have younger, smart, gogetters in the building so what the heck, give them a couple offices. Our goal really is to help people do their startup. We know doing startups is hard. Theres a lot of shared knowledge that happens when youre around a bunch of other people also trying to do startups. This seems a little different from most incubators though. Most of them have this rigorous program, they have mentors and a demo day, they want a piece of your equity. You dont have any of that. We say were not going to assign you a mentor. Theres no pressure in three months to get to a demo day. There is a sixmonth program, but as a result we get teams that are more they have seasoned professionals. People who used to work at google. I did say kids but it doesnt have to be. It could be people working in their garages, it could be older people who say, office space. How do you pick them . We have a vetting process. They submit an application. Its a sixmonth program. So everyone starts for the beginning of six months and is around for the whole sixmonth class. Is there one i would know . A graduate i would say, i didnt realize that. Aifuate was one of the teams that came through the program. We said great wed love to have you in the space. They recently sold to yahoo. Another one is pixel apps. They just got bought by drop box. We also have some that havent exited yet. Earnest is one of those. Oh, yes. Hes been on the show. Theyve raised 15 million so far. Were really excited that they were part of the program. We have osmos. And youve got your own. What is smoopa do . Our goal is to help people shop with confidence and not over pay. We saw the proliferation of mobile devices really was going to change the Retail Industry and the commerce space in general. We said we want to be part of this. And really to help people with information to make better purchasing decisions. You guys have the cutest name in the world. There are things like fandango and google for that matter, that now you dont even think about them anymore. Smoopa. Yeah. What did first floor labs give you that you wouldnt have gotten out of a garage . One thing is you know we were working out of my apartment. We think ourselves, one step above apartment, one step above a coffee shop. Without office space, youre trying to go to a coffee shop. So its a place where you can be and actually work on your startup. The other part thats helpful is the network of people. So youre surrounded by other entrepreneurs trying to do their own startup. So theres a lot of shared knowledge. When we were trying to launch our app, it was one of those cases where one of the other teams had already done this. We could go to them and share that information. Same thing goes for fundraising. Theres a lot of information that can be shared between our teams. Does aol have any association with the companies . So aol is a sponsor of the program. They provide the space. There are some of them that will help us. But theyre a sponsor of the program. But they dont take equity in the companies. Theres no vested interest. What does it cost the companies . So its a free program. Its a free sixmonth program. Our goal really is to help them. Youre getting started. Its a really hard time as a startup to get the company going. And whats in it for aol . I do have an idea for you that im going to leave you with and that is smoopa. Xyz. Not yet, but maybe i will. Thank you for being with us. Well be back in just a minute. Thats our show for this week. Thanks to my guests. Im scott mcgrew and thank you for making us part of your sunday morning. A moment of pure magic. Intercepted at the goal line announcer the following is a presentation of nbc sports. The city of big shoulders, chicago. Those shoulders are all cover up today because of sub zero chill. In the warmth of qulited center the proud warrior head is worn by jonathan toews. Eight years in the league. Two stanley cups. Two olympic gold medals. About to face the man wearing the triangled penguin of pittsburgh. Sidney crosby. Challenging for for a world class title