And if we do well i think five years from now people will really look back and say wow, over the last five years all these products have now gotten better because im not doing the stuff alone, im doing it with my friends. Rose some of the most innovative people from Silicon Valley next. Funding for charlie rose was provided by the following . Additional funding provided by these funder its captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. He is a cofounder of pay pal, one of the most creative entrepreneurs in all of Silicon Valley. In 1998 he started paypal with peter tiel and elan musk, four years later the company was bought from ebay for 1. 5 billion. He has since launched a variety of companies. He started the customer view site yelp of which he is chairman. In 2010 he sold his social Media Company slide to google for 182 million. His latest project is a tech incubator hvf. Im pleased to have him here at this table for the first time. But this not the first time i have met him so welcome. Thank you. Rose yours is an interesting story. So bear with me so i talk about biography for a second. Born in the ukraine. Correct. Rose your mother was a scientist. Your father was a playwright. What a great combination, you know. There is a culture there. Theres both sides of your brain have been full of dna from both parents. I like to believe so. Rose and you had in an interesting way a series of doctors predict that you would not live that much longer because of bronchitis. That is true. Im amazed at your level of information. But that is true. My parents were apparently told several times that this guy is not going to work out for him until about two. And then after two they said maybe five. And then five, maybe seven and after seven they stopped listening to doctors and said hes going to be all right. Rose and then they moved to chicago. Thats right. In 1991 we were finally allowed out of the country. And weeks before the country collapsed. So i left with a red soviet passport and a few weeks later i had a passport to a country that didnt exist any more. Rose and do you feel what in terms of where your soul is, is it american, is it russian s it i would like to have a clever answer to this one. But i think i am now primarily, i define myself as an american immigrant. Im very clear about where i came from, who i was and who i am. Im very much an american. My formative years were spent here. I met most of the people that matter to me here, minus my family. Most of my work has been done in this country. But i know that i wasnt born here and i know that my development is shaped by the immigration experience, by the experience of growing up in a country that did not have the kind of freedoms we enjoy here at this sort of political and business freedom. And what immigration has meant to america, among those who say is a proud part of the development and evolution of this country is something that we essentially must cherish and preserve. Im passionate about. It very divisive. Just the fundamental notion of the melting pot, bringing people that have the ambition and drive to better themselves, better their fate, better their childrens fate and pay back to the country that welcomes them is fundamental to who i am and i feel it is critical parker does not lose that. Rose in the process, not only doing well for themselves but doing well for the country by creating jobs. Inventing things and doing a whole range of other things. Yeah, i think that just cannot be understated. Rose so you made your way to the university of illinois at urbana champagne. Thats right. Rose were you there when an creasean was there or not. Yeah, we overlapped by a couple of years. Did you know him. I certainly knew of him very well. We overlapped a couple of times in a hot dog place that he and i used to National Center for computing application. And when the start netscape a bf us undergraduates were hired to fill the holes created. In that sense i literally followed in his footsteps a little bit and after i graduated i followed him to palo aalto, event lyully. Rose mosaic was the first thing they did. Thats right. Rose it really was, at that time. It was an amazing place to be. And i dont like the idea of luck but just because i feel like i should be shaping my own fate as much as possiblement but as far as having luck in my life, other than coming to america, being allowed to come to america, being on university of illinois campus in 1997 or 1993 through 1997 was just a dream come true for a Computer Scientist it fundamentally reshaped me from somebody who thought of myself first and foremost as a scientist, future ago demic to somebody who thought there is no better way to be than create businesses. Be an entrepreneur, thats what it is all about. Rose when did you get that . I can tell you the exact moment. I was sitting in the lab around midnight. And this guy walked in. And this guy reappears in my life, his name is scott banister, his friend, all these guys are earlier paypal mafia members. They walked in and said you seem to be here all the time writing code into the wee hours of the night why do you do that . I just do it because its fun. I love building things. You should come with us and well start a company and you can do things that actually matter. Its like what a foreign concept. Why not. Im going to be here anyway. And that was the pivoting moment from that point on i never thought again about becoming an academic. I always wanted to have a company. Rose it wasnt idea are for ideas sakes it was idea that can be implemented to make a difference and create something that has products and people and yeah. Rose purpose. It went from building things for me to building things for others. Rose and so you made your way to california. Uhhuh. Rose and did what brought you to california . Probably the better answer is why didnt you make it to california sooner. Rose why didnt you make it to california sooner . So i am an immigrant and i have very immigrant family and they said if you do not graduate college, it will kill, fill in the blank, your mother, your grandmother so i graduated college. Rose you better get that bachelors degree. We had to haggle over the ph. D no bachelor, well, masters, no, no. Rose what did it have to be, bachelor. Bachelor was enough. Rose it was a compromise. No less. I got my bachelors in computer science. And as soon as i could i packed up all my belongings and left for california. But i got here primarily because as evidenced by andreessen and many people after him, starting companies in Silicon Valley was the thing to do. Late 90s, just the fabric of the time, the place, the idea of being a Computer Scientist, and not building things for abstract sake but to make the world a better place. To bring we all used the internet well before the web became public domain, public knowledge. But as we saw things like yahoo develop and netscape, all these companies. This is amazing, we have to be a part of it somehow. And where did you go. At that time i didnt know Silicon Valley existed so i spent a lot of time sneaking into free lectures at standford. Summer of 98 was ridiculously hot in palo aalto so i would look up seminar for this, it was summer. So it was generally just show up. And somebody said there is this really young, brilliant hedge Fund Currency trader peter thiel you should get to know him. Rose currency trader. He was at the time i guess wellknown for clever ideas around currency trading. He ran a small hedge fund and i knew his namement so when i showed up at sanford that day looking for a place to camp to cool off, i saw him giving a lecture on currency trading. I know this guy, i should go see him. I went in, there were maybe nine or six other people in the room. And i sort of plucked myself in the back and said if its boring i will nap. And if itss not i will get to know this guy. And it was amazing. He really had, he was exactly that guy, the smartest guy you know with the best ideas. You just want to gand say hello. Rose he was that guy at the moment. Yeah. And so i walked up to him which i normally dont do afterwards and said hi, im mark, i heard you of from leukin scottment i said we should have breakfast. All right so, we are had breakfast the next day and i showed up with kind ever a said what do you do. I said i start companies. Thats great, i invest in companiesment i showed up with a bag full of ideas. I said heres my idea number one, two, three. He said i like that one. And literally that one evolved into paypal. Rose now who was there . Because everybody makes a whole lot abouthe t paypal mafia. And there is a famous Fortune Magazine picture. Yup. Rose and there you all are, some of you. Some didnt come for whatever reason. Uhhuh. Its a big group. So its peter, its you, elon. Thats right. Hoffman. Jeremy of yelp. Steve chen. And chad hurley, the three guys. Rose if you had to describe the one quality you all shared, what would it be . Lets assume intelligence is given. We all knew we wanted to start companies. So we came to entrepreneurship from completely different points in our lives. But i think all of us were either starting this company and peter and elon and i were starting this company. And everyone else knew that this was basically their last job. They were going to do their own thing next. And this was training grounds. Rose yes. So i will just do this and then i will do my own thing. And then ill go and make a pile of money and then i will go do what i really, something else. I think thats what you think then. But when you wake up after the pile of money part, you kind of go the only thing i want to do is more of this. Rose exactly. But see thats is such an interesting process. You sell it to ebay, and it is very successful acquisition for ebay. And most of you left there was like boom, explosion out there of. Uhhuh. Rose was the drive at that time to create companies and make a lot of money or simply create successful companies, the sheer i can do it . There was a lot of that. I think it is untrue to claim that we never counted any dollars. Not at all. I think as a capitalist its irresponsible. It wasnt we want to go out, maybe it wasment you want to buy yachts and planes and 17 homes and fancy jewelry and clothes. No, no. I dont think any one of us ever measured our success in terms of the number of yachts or more possessions question possibly have. I think 2 was all about making an impact and leveraging the success in to bigger, better things. Primarily in the form of other companies. Rose so you sell pay pal and you leave. This should be the best time of your life. It was the worst time of my life. Rose why . I had spent so much time generally very stressed but very happy working very hard that the vacuum of not having to work very hard at all, not having the drive. Not knowing what the next day i was always overbooked. Always 10 hours to do 20 hours of things. I would wake up and say i have 12 hours and i can read some magazines. It was terrible. It really was a very, very depressing time. And my now wife basically kicked me out of the house. And said look g start a company out of something. Rose this is nelly saying get the hell out of here, you know, you can drive yourself crazy but youre to the going to drive me crazy. I think i was definitely driving both of us pretty far up the wall. Fortunately i got better. Rose so what did you do, you then went and started an incubator. Yes, so in part driven by my wife pointing out that im much happier when im work. I said i dont know what by am going to work on next. She said look, well, why dont you go rent an office and one, get out of here. But two, think about what you really want to do. Organize yourself around going it to a place of work. And think and invent, thats what you do best. And i did. But im better in a group of people than alone. And so i set up this Little Office and we, my friends and i, would get together and brainstorm what could be and just try to think as big and interesting as possiblement and from those brainstorms, thats when slide was founded that i ultimately ran and eventually got acquired by google. And yelp was created there. Its, you know, definitely it was a great time. It was very unstructured but it was a year of creativity. It was great opportunity. Rose when you build these companies are you always assuming that will you sell them or is it going to be like facebook which i very rarely, in fact never think of what is the terminal point. What is the exit strategy look like. I really dont like doing that because youre inherently limiting the outcome. You are always assuming how it is going to endment ideally i love the notion of a forever company. A forever company. Yeah. Theres not that many of those but the ones that exist are pretty impressive. You know, they always say some argue that companies are better if the founder stays with it. Yeah. But its just good. Steve jobs and apple, you think of larry and ser gei at google, you think of mark at facebook. They add something. And sometimes they need talent to come in to do certain kinds of things in terms of management. But in the end their presence makes a difference. I think so. I fundamentally agree with that. I think the dna, this is obviously a barred concept but there is a real nation of dna. The founders staying make sure the dna does not dekachlt i think thats the most important thing. Rose and that its always changing. Yes. David kkarp is here founder and c. E. O. Of tumblr. In 2007 he started the company in age 20. It is now the preeminent blogging company with 3 million active users. Forbes magazined noted it facebook is the internets phone book, twitter its wire service and tumblrs karp has build the webs canvas. Yahoo announces announced it would purchase it for 1. 1 billion. Im pleased to have david karp at this table for the first time. Welcome. Great to you have here. Thank you so much for having me. Rose how much time was there between the idea that that is what i can create and the ability to create it . That canvas. Probably took me a few months. And it was just working on my own blog. I was working on a little tool just for me. And at some point along the way it clicked for me like now, there might be some other people out there who have the same frustrations that i do. And look when we launched the thing we found some of them it wasnt like 100 million of them it was like a few thousand of them that showed up and were just as excited as we were. And a few thousand turn mood tens of thousands and in the first few months hundreds of thousands of creators who had found a real home on tumblr. And how do you decide, there are offers to buy this, now is the right time to sell. Who is not expecting to sell the company this year, certainly wasnt looking to sell the company this was a really, really remarkable opportunity that presented itself. You know, again going back to just how much sort of dumb lukiws had in my career and in my life. This was an unbelievable opportunity to shortcut a lot of the very hard things that we were about to be going through. Not say we werent excited about all of these next steps but this is a chance to join a company that has a history, a legacy and a huge amount of resources around all of the sort of business stuff. Rose an why yahoo . Again, you know, it was a company in a position and with a legacy sorry, it was a company with a legacy doing exactly the same kind of stuff that were hingeing our business on. It was a really creative brand advertising. They were the original digital Media Company. They took a very different approach to media. They approached media as an Editorial Team that created content and built creative brand advertising on top of that content. Thats the future of our, its a big part of the future of tumblr business is creative brand advertising and something they built technology for old, also something they have advertiser relationships around and something they have a whole big honking sales force. They have a hugh money guess team and huge resources behind that effort over at yahoo . Theyre at a place today, yahoo and marissa and her team today are looking for a future for yahoo , path forward and growth for that business. And thats where they saw a huge opportunity in this median at work that we were buildingment and what marissa showed me, what their team showed us was an opportunity for yahoo to help us fuel in a huge way its development of that network and the development of our ad business. What will tumblr be like . Hopefully we get this right, it will be home to the most aspiring and talented creators all over the world. Something that weve already started to do. I want to see all of them, not just calling tumblr their home but truly proud of the stuff that theyre making, the stuff that theyre creating on tumblr. The consume he Consumer Behavior so, what regular people out there in the world do, right now they spend a huge amount of time in front of their televisions consuming sort of, sort of premium content, someone call it stuff produced by publishers, networks, studios. You know f were not already there today certainly five years from now i expect the vast majority of the content that we enjoy not to be produced by a handful of creators that are selected and supported by those big studios. Rose what excites you the most, the building of the business or creating the product. So we have this look, i mean the product is why i got into this. I have to tell you the business end of this. Has become such an interesting, exciting fun challenge for us because weve got this thesis. We can build a business that not only does not compromise everything that is special about tumblr, makes it such an incredible home for these talented people but actually makes tumblr a better place in the same way that if you ripped all the ads out of vogue, one t would be half the magazine, but two it would actually lose a lot of great content. The way weve approached advertising doesnt look anything like advertising across the rest of the internet today. So much of theres a lot of nuance here but so much explain it because the essence of what you are trying to do. I think ive always built things for myself first, the fact that tumbl started very selfishly is something just for me. And for years was really just tiny small team where i was just like constantly pushing for features and capabilities that i wanted for me. That i wanted to use. And look there is one sort of defining thread in our tumblr, our teams culture, our companys dna, its that weve managed to assemble this really uniquely, this is just hard to see i think unless youve really spent time in the tech industry, but weve built this really uniquely Creative Team of engineers. Just like a really high concentration of people who moonlight in bands, are writing, are taking brilliant photos or brilliant