Elon Musk Reveals Hyperloop: Bloomberg West (08/12)

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Aug. 12 (Bloomberg) -- On today's "Bloomberg West" the focus is on innovation, technology, media and the future of business. Hosted by Emily Chang with Editor-at-Large Cory Johnson and Senior Correspondent Jon Erlichman from Bloomberg's San Francisco studio, it showcases the personalities, companies and trends that are transforming the global economy. (Source: Bloomberg)

Live from peer three in san francisco, welcome to bloomberg west, we cover the global technology and media companies reshaping our world.

I'm jon erlichman in for emily chang, our focus is on invasion, technology and the future of business.

Let's get straight to the rundown.

Elon musk reveals his plan for hyperloop, going across land at 800 miles an hour.

If that sounds unlikely, we'll hear from musk himself on how he achieves the impossible.

Are we weeks away from a brand-new iphone?

Apple may be planning september 10 as the launch date for the new device.

Could we finally be seeing the lower cost version?

And microsoft co-founder bill gates has critical words for google.

Find out what he says the search giant is doing wrong when it comes to changing the world for the better.

First the lead, after weeks of hype, billionaire elon musk has reveals plans for his travel system called the hyperloop.

Musk claims the system would let someone travel from san francisco to los angeles in a half hour and more vimetally friendly way than trains, planes, or cars.

Here is how it works.

A traveler rides in a pod that sits on a cushion of air in an elevated tunnel.

Skis on the bottom will help push it to its destination, it may seem far fetched, there is a report complete with detailed instructions on how to make this a reality.

It would actually feel like being in an airplane.

There would be initial acceleration and once you're traveling at speed, you wouldn't really notice the speed at all.

It would just be extremely smooth like you're riding on a cushion of air really.

Musk says the capsules will depart every 30 seconds and carry 28 people each.

He says it would only cost $6 billion for a passenger only, $10 billion if the pods transport cars.

The plans will be open source because musk is too busy running his companies to take on this project.

We're joined by ashley vance who spoke with musk about the hyperloop.

Ashley, good of you to join us.

Why is elon doing this, putting this proposal forward now?

Well, i think his biggest concern is the california high speed rail system which he thinks is too expensive and too slow and too impractical.

Elon gets bent out of shape when he sees people trying things that he thinks are poorly engineered.

This is his answer for that.

And obviously a lot of thought and energy has been put into this, not just elon, but his teams, i would imagine, companies like space x and tesla.

He told you he has too much on his plate to make a go of it himself.

Tell us more about that.

Yeah, he just had a press conference where he said he changed his mind.

I had been talking to him all of the last couple days and last night and he said he would open source the plans just as you mentioned and turn it over to someone else.

On this press conference that he just had, he thinks he will build a prototype at least to prove it can be done.

He has about 12 people helping him on this.

What is going to go into that and how should we think of this project?

Is this an elon musk project or a tesla or spacex project, billions of dollars are required to really make this a reality.

That's right.

It sounded like he hadn't slept a lot since yesterday.

I'm not sure exactly what is going on yet.

He said he would build this prototype.

He didn't think it would be a proper company behind it and he has talked in the past about this maybe being folded under tesla if nobody else developed the technology.

It just sounds like elon wants to prove to people it can happen and then make accelerate somebody else getting behind it by building a prototype and showing it can be done.

He had first talked a little bit about this idea when he spoke to you as part of a previous piece for business-week.

Tell us about what interests him, what drives him when it comes to engineering and technology that he would want to go ahead and put energy into this?

It's got to be more than just being truffed with the california high speed rail system.

Yeah, he seems to be this guy that wants to make the big leaps forward in technology.

He lives in los angeles half the time and he is grousing about the traffic there and would like to put some of his businesses in solving the commuting issues in l.a. just in general, he gets frustrated by things that seem to take too slow.

He was obsessed with this idea of building a supersonic all-electric jet.

He is trying to push the limits of where the technology can go.

He flies from l.a. to silicon valley, every week, twice a week, back and forth.

You can sort of see in his head, he wants a way to do that quicker and more easily even than his private yet.

Right, and very quickly, not to say he isn't realistic about the challenges that could stand in his way including on the security side?

Yeah, he had given a little short shrift how long it would cost and how long it would take to build.

He dodged those a little bit more so than the technical details.

All right.

Ashley, fascinating story that you put ahead of this big announcement.

Ashley vance joining us via skype.

How far fetched is this idea?

Colorado-based e.t. 3 has been working on its own hyperloop project and has been cited as a possible model for musk.

For more on the company and how it is from offering the service, i'm joined by the chief operating officer.

Nick, you recently met with musk.

Tell us about that meeting and what you guys talked about, what the point of it was.

Yeah, we met with musk about three weeks ago and he reached out to us.

The state of journalism and everything got combined, we got mixed together with hyperloop.

You can cause us two, it's not a loop.

He reached out to us.

There was a meeting.

There was a lot of talk about going fast in tubes and he told us, he started the meeting off talking about the high speed rail, kind of just reported on, and he wants to save the state of california.

And so do we.

We're getting real close.

I got to say, thank you, mr.

Musk, for just having the courage to talk about the legalization of innovation in transportation.

I think that's the key issue is that there are technicalologists now that -- technicalologist now that can solve our transportation problems.

We have to let them loose.

Your company, e.t. 3, it stands for evacuated tube technicalologist.

People over the last hour and into the evening, will see a lot of videos, pictures of how this might work.

Tell us as simply as you can what it is you're hoping to achieve.

So as simply as possible, e.t. 3, it's a vehicle the sides of a -- size of a car but shaped like a red bull condition.

It is on an evacuated tube.

There is no air resistance, there is no rolling resistance.

It's space travel conditions on earth.

So you enter through an air lock and then you're accelerated at one g of acceleration which people are quite comfortable with, the same linear electricity motors that accelerate superman the ride at six flags, that's 4.2 gs of acceleration.

We start out at 400 miles an hour, but eventually this will all be networked.

There are key differences between hyperloop and e.t. 3. to build on what you guys are focused on, i believe you would like to do a big demo of this, like a three-mile demo -- exactly.

Guys build the demo and that's what we're about to do.

We need to build three miles of e.t. 3. the first mile, you accelerate up to 400 miles an hour.

The middle hour we coast and show that the capsule can switch lanes.

We decelerate and recapture that energy.

We'll open it up as a ride.

Do it red carpet style and open it up, i want it to be like 20 bucks and make it affordable for everyone to come and experience this.

You have a 5-year-old and his grandma ride this, the world changes.

Ashley vance of bloomberg businessweek was highlighting some of the comments we hurt from elon musk.

Maybe now that he has been thinking a lot about this, he does want to be involved, even if he is busy with some of his other projects now.

What does that mean for you guys?

Does that mean there is competition or collaboration?

Elon would be the ultimate e.t. 3 licensee.

He talked about open source, it's an open consortium.

That's why we have the business model.

All of the existing manufacturing ca missty and the now how, they're already there.

The market just needs to be opened up so they can spread, you know.

Before we go, i mean, when you talk about the patents behind smart phones and tablets, what about the technology behind all of this?

Who has it, what do you guys have, what does that mean in terms of the potential future?

So, yeah, we have our patents, the original e.t. 3 patent that was issued in 1999. just this march, we issued another two patents in the cooling and on the switch, the lane switching capabilities of the capsules.

That extends it another 19 years.

The high temperature super conductor magnet, with a little bit of liquid nitrogen, it will levitate the capsule, not in a vacuum, china rolled out the red carpet for our c.e.o. who has been on tv today and a lot of channels and got them started.

Their students studied it in china right now.

We have pictures of the demo.

This idea goes back over 100 years, you know.

So it's finally going to happen, the technology is there and really the only thing in our way right now are the politicians.

We need a framework.

We need to work with them so this technology can happen.

An important part and we'll see how it all plays out, nick, thanks for your time, the c.o.o. from e.t. 3 joining us from los angeles.

Does hyperloop sound crazy to you?

Elon musk doesn't care.

Hear how he achieves the impossible coming up.

First, is a new iphone coming our way in a few weeks?

Will it be innovative enough to silence apple critics?

That's next on "bloomberg west." ? i'm john amaechi.

This is -- jon erlichman, this is "bloomberg west." a supplier for both apple and microsoft has reported a profit of $46 million in its second quarter, it's below estimates.

Apple accounts for 27% of pegatron sales.

It makes the ipad mini and the surface tablet for microsoft.

There is a big forecast and sees revenue growing 40 to 50% in the communication and consumer segments in the current quarter due to new consumer products.

That has fueled new speculation the new low cost iphone may be released.

Apple has set a day of september 10 to review the new iphone.

Given how much criticism has faced lately for not innovating faster, will this new phone have enough new features to really stand out?

Brian blair covers apple and he joins us from stanford, connecticut.

Brian, what do you think, potentially a month from now, one new iphone, two iphones, a high end, a lower end one, what are you thinking?

A brand-new iphone 5 s, which looks the same as the iphone 5 but has a new operation system.

They're having a new fingerprint system.

We are seeing a new mid tier iphone likely called the iphone 5 c. that seems to be the most obvious name for it.

It would be similar to an iphone 5 in terms of screen size, a plastic back that would denote the c for color.

We are going to see those two new phones, they're the new product announcement september 10. is a fingerprint sensor enough to get people excited to buy a new phone if they just bought one 12 months ago?

I think it's going to be the combination of the new operating system and the fingerprint sensor that will bring some of those new users in.

Really it will grab new users from two years ago.

Most of the carriers are still structuring their plans, most people are still on a two-year replacement cycle with the exception of t-mobile who are trying to make them buy a phone every year.

They are grabbing people two years ago.

People who had not upgraded iphone 4s or 4ses will jump all over this.

Is it going to be for security or e commerce play.

That will be important to see what actually do they plan to have consumers do with this?

Would a low coast iphone be something you buy in north america or only in emerging markets?

That's one of the big question marks.

I think the focus is really going to be outside of the u.s. and european because right now if you look at the global hand set market, most of the smartphone growth of the last six to 12 months is coming from emerging markets in the sub$250, $300 price range.

Apple is giving that away to android by not playing there.

It makes the most sense for this to be priced in that range, $250 to $275 and to focus on that market.

Eventually, if it's a great looking phone, it will find its way here for sure.


I want to switch gears to blackberry.

It announced today it could be up for sale.

It's exploring all of its options.

You had suggested if there was someone interested in buying blackberry, it might be one of the asian players, z.t.e., why do you think those friends might be interested in blackberry?

A lot of things that the chinese manufacturers do better than anybody in the world, they make great hardware and they're willing to take a low margin on it in order to grow volume, to grow users.

Much more so than your average european tech company.

They might look at blackberry's legacy business, the less expensive blackberry, the sub$200 blackberries and we can profitablely sell those into emerging markets in china, southeast asia, india and latin america and sell these for $200 profitablely.

They might be willing to buy that business for somewhere around $5 billion with that $3 billion in cash coming with that and see if they can make it a profitable business.

I don't know that there are a lot of american companies that would be willing to come in and attack that low end business and hope to get a small margin.

A lot of the chinese players would consider it.

Really quickly, what do you think apple thinks of blackberry putting itself up for sale?

I think they probably expected them to do it a few years ago.

I think that for them, they have seen the market share numbers.

They have seen the user response.

I don't think they're surprised.

I don't think anybody is that surprised by this.

The only shock is maybe that they're doing it now.

I think given the confidence of blackberry management over the previous six months, i would have guessed it would have been sometime 2014. i think they're seeing it decline faster so it's happening now.

Brian, we packed in a lot, thanks as always.

Brian blair joining us from stanford, connecticut.

Thank you.

It may help you lose pounds, but today popular at my fitness pal is about gaining some big bucks.

We go inside the start-up next on "bloomberg west." ? welcome back to "bloomberg west." i'm jon erlichman.

Actor and tech investor ashton kutcher plays apple founder steve jobs in the movie jobs which is out this weekend.

We sat down with him and talked about the movie.

Talk about somebody who understood i think neithering and understood art at the same time, i have said it out loud, i would say it again, i really think he is like the leonardo davinci of our day, someone who had an appreciation for aesthetic beauty and art and understood how to make things that worked.

You can catch the full interview on charlie rose tonight at 8:00 p.m. eastern right here on bloomberg television.

On friday, we'll bring you more on the jobs movie, here what kutcher says playing steve jobs taught him about his own tech investments and how he got into the role which at one point landed him in the hospital.

Now to a big investment in health, while the popular app my fitness pal is about helping users lose weight, the company is about gaining.

It raised $18 million in new funding from venture capital firms and joining me with more on this story is bloomberg news reporter doug mcmillan.

For those who don't know much about fitness pal, what can you tell us?

This is a glorified calorie counting app.

You go on and you log your daily routine of how much exercise you did and what exactly you ate.

They have mobile apps for ipad and iphone and so forth.

They have also developed a really robust online repository of nutritional data so you can search for the taco that you had at taco bell and somebody has entered kind of the specific nutritional data on that item.

This is a big, my wife disuse this app.

Instead of having to type in, people don't want to type in this many calories.

If the item comes up, it makes your day easier.

They have combined self-entries.

They have a whole community of people who go on and they plug in items that aren't already on the site.

It's a pretty big library of data.

Let's talk about the money, the venture capital aspect to this.

Why the money and coming in at this point?

This is a boot strapped company.

They have never raised money from traditional venture capital firms.

It's all been funded by friends and family.

That's kind of a more and more of a rarity in silicon valley, when you have so much readily available access to big kind of private funding, a lot of people are tempted to take that.

You get not only money, but you get access to the networks.

You get access to branding and the stamp of approval that comes with those v.c.'s. up until now, they have gone it alone.

They have opened the door to v.c.'s and some big ones.

A big issue in about 10 seconds, there is a lot of competition out there?


The big new category, a lot of competition.

We have to see if this money can help them expand.

Thanks, doug joining us here with the latest in the v.c. world.

Bit coin is getting bit by financial regulators and some high profile tech know gulls may have been hit.

Details coming up on "bloomberg west." you're watching "bloomberg west" where we focus on technology and the future of business.

I'm jon erlichman in for emily chang.

Let's get straight to your headlines, a hearing too fast track the lawsuit against dell has been delayed.

A judge will now hear arguments friday.

They are trying to stop dell from changing the rules on who can vote on the michael dell buy-out.

Nbc news is buying a streaming news service.

It allows users to essentially become citizen journalists streaming footage from their phones straight to a tv station.

The founder will be joining nbc's digital group.

And yahoo!

Japan is hiring a former goldman sachs investment banker as they gear up for more acquisitions.

He has been working in mergers and acquisitions at the bank.


Japan has announced eight acquisitions in the past 16 months.

We have some breaking news on apple.

Bloomberg news has learned some details on two new ipads, a traditional ipad that is going to have potentially a thinner overall design and a new ipad mini that will have a high resolution screen.

Both of those devices expected to be introduced in the last three months of this year according to sources who have spoken to bloomberg news.

Adam covers apple for bloomberg news.

He just broke that story.

Adam, give us a little bit more detail.

Let's start with the big ipad and the changes that are coming.

Well it's been rumored for a little while essentially that apple will be introducing a bigger ipad, the one that has the 9.7-inch screen.

That will look more like the ipad mini that has been out there now.

It's a little bit thinner, a small bevel around it, things like that.

What is the significance of being thinner, the appeal of that?

Well, it puts out something fresh out there to sort of reignite demand for this sort of thing.

Apple has had the sort of cadence over the past few years where their release schedule has become increasingly truncated around the holiday.

You have these ipads coming out, the ipad mini will have a sharper definition screen, new iphone is expected.

And so around these launches you see a huge speak in sales and profit and this is really where the company makes its money.

So let's move to the ipad mini and this high resolution screen.

A lot of people have been waiting for a device like that.

Give us some more details.

Their prayers have been answered.

This is something that the ipad mini came in at a lower price point and having a lower definition screen was something that it didn't have and maybe apple calculated that this was the way to reach that price point and still have a good profit margin.

Now you can, with a higher resolution screen, some of the applications out there will look a little bit sharper.

And for those that's a really important feature, maybe this is what pushes them over the edge to buy them instead of a device from google or somebody else.

Only a few seconds left, adam.

You have confirmed that the next iphone will be unveiled at this september 10 event which had been reported on, is that correct?


That will be a september 10 event, that was something that was reported earlier by all things d, but, yes, we'll see you there.

Sounds like a plan.

Great reporting as always.

Adam breaking that news on the next generation of ipads from apple.

Bloomberg news has learned that new york's top banking regulator is looking into bit coin for possible illegal activities.

New york's department of financial services has sent subpoenaas to two dozen nearly digital companies.

A spokesperson for the venture capital firm says the firm has not been subpoenaaed and neither has marc, the venture capital israel who founded the firm.

Two others were also issued a subpoenaa.

The c.e.o. of virtual currency platform for businesses and governments.

He joins me here in studio.

Firstly, was trade hill sent a subpoenaa?


we look forward to speaking to regulators and legislators.

What is your take on the regulations of bit coin and what regulators are looking for answers on here?

In the financial crimes enforcement network, they issued a guidance that it is money transmission.

I think this is an information gathering mission.

It sounds like they have sent subpoenas to a lot of different investors and a lot of different companies that are working in the space.

It sounds like they just want to see what is going on instead of just prosecuting people.

A fascinating quote from benjamin, the new york state superintendent of financial services.

"serving as a money changer of choice for terrorists, drug smugglers, illegal weapons dealers, money launders and human traffickers could expose the virtual currency industry to extraordinary criminal penalties." first of all, do you agree with the statement and, secondly, is there more we need to know about who is actually using bit coin?

I think in some ways bit coin is a lot easier to track.

We were part of a founding committee to put a group together data to establish these policies and when these policies are in place and everyone follows them, it will be more difficult to commit crimes with bit coin than with cash.

If i were to say what's the impact of what is going on right now on the rise of bit coin?

I think this is going help.

Had this is bringing attention.

They're asking the right questions and they're looking to establish bit coin as a form of currency that actually does follow rules.

This is good for bit coin and virtual currency.

You welcome having a dialogue or discussion.

Does that mean that you plan on doing your own reachout or you're expecting that they are going to come to you and you'll talk more about it?

We have began to reach out.

We're happy to speak with them.

For anybody who is curious how this process works, what are some of the questions that you think are going to be the biggest ones and sort of getting everybody on the same page?

There is a lot of myths out there.

They say bit coin is untraceable.

It's not true.

Every single bit coin transaction that ever happens is recorded with our company trade hill.

Every identity is verified when the user signs up.

It's far, far easier to track illegal transactions and then prosecute those people than it would be with cash.

The subject of the twins, do you think if regulators are asking a lot of questions, those who maybe were sort of early movers into this area and got a lot of press for it will think twice that it's not worth the headlines even if the headlines are misleading?

I think some people will.

We have seen a lot of high risk investments in the past.

There are those who will take the high risk for the reward.

With that said, tell us about the rise of bit coin.

Obviously it is something that the regulators are watching because of its rapid growth.

What is the most compelling number about the adoption, how fast this has all happened?

The number of merchants that accept it and the number of people that use it, 10,000 merchants that except it now.

You can buy sushi and cupcakes in san francisco.

You can buy all kinds of things with it.

Word press takes it, the 25th largest website in the world, i believe.

Over a time frame -- over a few years.

And as the growth expectations from here on out?

I mean, it's really, the growth so far has been exponential and everybody believes it's going to continue.

Interesting stuff, thanks for shedding light on it for us.

The c.e.o. of trade hill.

Football season is right around the corner.

Millions are at risk of not seeing games thanks to the time warner cable cbs deal.

Will the start of a nation's most popular force finally force the two sides to the table?

That's next on "bloomberg west." football on your phone.

? football on your phone ? that was a clip from the commercial "football on your phone" featuring nfl stars peyton and eli manning, it has gone viral and viewed well over 6 million times on youtube since being posted last week.

The senior vice president of marketing joins us from new york.

I get the chuckled, john.

You guys are known for your wacky ads.

Where did the idea for this one come from?

Well, we briefed in our agency partners a couple of months ago.

We knew one of the things we wanted to talk about this season is the fact that you can watch all of the games on sunday on your phone.

They came up with this great concept and we put it into production and we have been overwhelmed by its success to be quite honest.

Well, and how do you measure the success, i mean, all those views on youtube is a big number.

What can a successful viral video actually do for a property like sunday ticket which is incredibly important.

You guys pay a lot of money for the rights to it.

Yeah, well, i mean, it's one element of the overall marketing mix that we employ.

We got tv spots, ads, radio, printouts.

There is a whole host of tactics that we leverage to get word out.

It's just another important component of the overall marketing plan.

Just out of curiosity, how many people are watching football on their phone?

I think you got in the neighborhood of a couple of million subscribers who pay for sunday ticket and you can pay a little extra to get it on your phone or your mobile?

That's right, get the max product.

On any given sunday, a couple hundred thousand of our customers watching live games on their phone.

It's a fantastic service.

You're away from the house on sunday and to catch the games, it's a great way to follow along with what is happening live.

Maybe the manning brothers have convinced them to spend a couple extra bucks.

You guys did the football cops video, also, with the manning brothers.

What is it about the mannings that you like so much?

Well, they really are the personification of sunday ticket.

A lot of times on sunday, they are both playing at the same time.

Archie has the issue of how can he follow along with both games at the same time.

Sunday ticket allows you to do that.

They have been long-time partners.

Peyton has been part of the directv family for 15 years, eli a little over 10. they're great partners.

They love doing this kind of creative.

They're good sports about it.

They're fun to work it.

Just looking at some of the footage from one of those zany ads.

Are you seeing opportunity because of this ongoing battle between cbs and time warner cable which seems to bleed into football season?

Well, that is really between cbs and time warner.

It really doesn't have much of an impact on our business right now.

Right now our focus is solely on communicating all of the different benefits of sunday ticket and why people should switch to directv.

There are a lot of questions, i guess, right now about the future of paid tv.

As the marketing guru, has the marketing, is the marketing more important today than it ever has been?

Quea, i think that's right.

I mean as bills continue to rise, the programmers charge us more and more for their content, it's incumbent upon us as distributors to communicate to customers why they should continue to if a for the service month in and month out.

It does become more difficult, sure.

Using the manning brothers in a rap video is a great way to get people's attention.

We appreciate you giving us some time, john.

Thank you.

John joining us from new york.

As we just mentioned, it's now been 10 days since time warner cable blacked out cbs leaving more than 3 million viewers without hit shows like "under the dome." there is a bigger incentive to get a deal done soon, the start of the nfl season.

Normally when the new york jets practice, sideline talk is all about players, stats, and injuries, but with cbs currently unavailable to time warner cable customers in new york, jets players seem just as concerned as to what their faithful followers can't see.

It's hard for the fans, especially if they want to follow their fans, how they're doing.

Jets fans sub described to time warner cable had to sit out a preseason game against the detroit lions broadcast on cbs.

On the jets website, the team said all is not cost, saying you could still catch the game on the radio?

Perhaps the website folks don't know who we're talking about here.

Sure, other team games are being blacked out, but jets fans, they may be the most passionate in professional sports, something the team's newest quarterback is quickly learning.

I suspect they would be pretty upset.

I mean, i know that jets fans are devout fans and they want to follow their team.

There is nor at stake.

Cbs, abc, nbc and fox, $3 million to the nfl to broadcast games.

If will is still no settlement when the season starts?

I don't know, find a friend who has a game or go to a restaurant with a game, i don't know.

Not bad, mark.

We'll see if jets fans have to do the same when they play the patriots on cbs next month.

As we head to break, here is a look at what is coming up tomorrow on "bloomberg west," paypal co-founder will be here to talk about his new fertility app, glow, and his role on the yahoo!


That's tomorrow on the early edition of "bloomberg west." elon musk has shaken up cars and space flight.

Now he is turning his attention to the mere impossible.

More on elon musk's hyperloop next on "bloomberg west." ? ? welcome back.

I'm jon erlichman.

This is "bloomberg west" on television and streaming on your phone, tablet and at bloomberg.com.

Back to our top story, elon musk's plans for his newest project hyperloop, the high speed transit system that he believes could get people from los angeles to san francisco in a half hour.

The spotlight hour, bloomberg has teamed up with a group called big think to cut through information overload and bring big ideas to the forefront.

How to achieve what some say is impossible.

We're looking for an opportunity, i think it's important not so much to focus on disruption for the sake of it, but where is an industry either stagnant or in decline where the product service has stayed pretty much the same or maybe even gotten worse over time.

It's worth looking at industries which a lot of people think are impossible, think you can't succeed at, that's where you have opportunity.

If everybody thinks there is failure, people dive in.

In the space industry, we were able to go to the moon in 1969 and with the space shuttle we were able to go to lower orbit.

The space shuttle has retired.

And the united states cannot get a single person into orbit without the help of the russians.

And liftoff of the falcon nine rocket.

On the face of it, it appears to be somewhat daunting, how can you prevail in an industry dominated by giants that receive huge subsidies.

Once the subsidy is done, they're inefficient and their not good at innovation and unwilling to take risks.

Provided you can get through the initial start-up phase, once you exceed them in capability and technology, they have no real ability to catch up.

That's what we're finding with x. they have won more launch contracts than any other one other than company in the launch business.

The world is going to change so dramatically in the 21st century, to identify something and try to aim for a big problem instead of a small problem.

Industries that are functioning poorly and that have been stagnant for some period of time or even in decline and then it's worth trying to start a company to change the way that industry behaves.

And for more on elon musk, don't miss a special edition of risk takers tonight on bloomberg television, 9:00 p.m. eastern and pacific.

We focus on one number that tells a whole lot, joining us with today's bloomberg's b-west buy, doug, a special elon musk show, a special day on bloomberg.

A special monday.

Talking about a small fortune today, $91 million, that's the value of facebook shares sold by c.o.o. cheryl sandburg last week.

It's a small portion of her share.

She has only sold 12% of her shares, but still $91 million is a big number.

That's a a lot of moola.

Everybody has talked about the stock getting back up to the i.p.o. price.

Is this because of a program she already has in place, like a computer is selling stock at different times or oh, no, cheryl sandburg is selling stock?

It's not that unexpected.

She has a large portion of her wealth tied up in facebook stocks.

It's normal for someone like her to diversifying stuff.

You ask the question, they taking her steps away from the company?

We have seen her engage in a long book tour, the "new york times" best selling book "lean in," has had a lot of success.

Is she starting to move those chips away from facebook?

No definitive proof, but maybe one more piece of evidence?

Something to look at.

What about her role at facebook today?

Lots of high fives there with what is happening with the mobile strategy and earnings and all of that stuff.

What role is she playing right now?

Hard to tell.

She is still the top businessperson.

Mark zuckerburg hear gaining some, but he is largely focused on product and cheryl runs the business.

Slowly she is delegating some of that away.

Last week we saw facebook hire its first chief marketing officer.

That position is going to be reporting to chris cox.

Leave it there, doug, see you tomorrow.


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