The Business of the Selfie: Bloomberg West (12/03)

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Dec. 3 (Bloomberg) -- Full episode of "Bloomberg West." Guests include Bloomberg Contributor David Kirkpatrick, "The Onion" CEO Steve Hannah, China Market Research Group's Shaun Rein and Eric Ries, author of "The Lean Startup." (Source: Bloomberg)

Live from peer three in san francisco, welcome to the late addition of "bloomberg west," where he the technology companies that are reshaping our world.

I am emily change.

Our focus is on the future of business.

Let's get to the run down.

Third time is a charm for space- x as a launch a satellite.

This excess should have boeing and lockheed martin a little worried.

It seems that everyone is embracing the age of or is business behind this.

Bill gates wants to build a better and.

We show you the innovation that has him betting on ads that do not come from chickens.

Elon musk launches rocket moments ago.

It was script twice last week.

Today there is no such problems of the rocket blasted off into a clear florida evening sky.

This will deploy into orbit nearly 50,000 miles above the earth.

It marks the entry into the commercial satellite market here it the satellite will provide high definition telecom services to southeast asia and pacific.

We had a roundtable to discuss the importance of this.

What it means for private spaceflight antiracist.

We are joined -- in the spaceflight race.

We are joined in the studio.

What is a successful launch?

It is a big deal.

It is an x there are men.

This is the first time i'm going to get to the highest.

They have a long ways to go before they get there.

Getting off the ground is probably the hardest.

What happens now?

What kind of things are they looking out for?

They lose communication for a little while.

It shuts down in the now they have to do the hard work of re- firing and getting to another stage and pushing to the satellite.

I know you have been looking to this closely.

What exactly is elon musk trying to do?

Is it more difficult to do than space ambitions of years pass?

This is not commercial tourism.

So far they have gotten to the space station.

This is going even farther.

Thousands of miles farther.

What they are trying to do is reduce the cost of commercial space and challenge entire countries like you're up in russia and then challenge companies like boeing -- europe and russia and then challenge companies like boeing.

What exactly is the business?

This is really interesting.

This has not been telecommunications and probably has not been government launches.

It has been hd television.

A lots of stations have gone from low d to hd.

Each one requires a new satellite to move it around the world.

It has been a really big boom in the satellite to broadcast hd.

That is slowing down.

The failures, the slowing from altar high definition creates some headwind in the business of satellite launches.

There are some questions about the growth rates going forward.

Nasa create a big hole in the u.s.. the underlying business is an interesting point.

Maybe biggest drivers in biggest years are going away.

Let's talk about some of the competition.

You mention lockheed martin.

What are other parties doing that is different than what spacex is doing?

They have a competitor concentrating on smaller launches.

Spacex is doing some of that business but they have the ambition of doing the biggest.

Spacex is also doing business to the space station.

They're also the only one that can come back from the space station with a launch vehicle.

With lockheed and boeing you are basically talking about a lot of military bowling.

What spacex is trying to do is sort of roof -- is true it chops chops.

It is interesting talking about jeff bezos who is also very interesting and space expiration.

Are we in the -- who is very interested in space exploration.

Are we going to look back on this as a particularly innovative time?

I think so.

This is a time, one of the goals of the government space program was to get a lot of hiring, to put a lots of jobs into big congressional districts.

They went for baked.

It was not built around the idea of putting up satellites.

It was built around other military uses and space exploration uses.

This is an entirely new area of materials, computer science.

The opportunity is there to do things in a different way.

One of the important things about today's launch is that they're trying to use this engine that's spacex has designed.

It is meant to be mass-produced.

The plan is to find out what this engine can do.

They have built this for one that continue to replicate.

The way they test this thing to the end, the one they brought to september of last year, that spacecraft they actually tried some experiments as it was hurtling toward the specific osha -- to the pacific ocean to see what the limits were.

It spun out of control.

Elon musk wanted to see what it could do.

They found them.

They will continue to explore what this thing can do and what business they can build around it.

We are continuing to monitor this particular flight of the falcon rocket.

Cory johnson a bloomberg businessweek.

Thank you so much for joining us.

They are being snapped by everyone from former president to celebrities.

We dig into the rise of the self theie and what it means.

? selfie is the word of the year.

These days world leaders commit real and fictional are getting in on the act.

The aly baba chairman tidbits of himself and david cameron when they were meeting in shanghai.

Disney has released this "selfie" on instagram as part of a marketing campaign for the movie that will not come out until 2015. to make sense of the "selfie" is daily kirkpatrick.

He is -- is david kirkpatrick.

He is with us from new york.

Everyone is doing it.

I thought it was just teenagers and camp kardashian -- and him card issue 00 and kim -- and kim kardashian.

People love it.

What does it mean?

They are taking it so they can connect with their audience.

In makes people seem more human.

It does.

Cell phones we now.

Are such good owns and the cameras that face us are so easy to use.

The technology to take a photo is so easy.

Photos are not a communication.

That is a new change.

A number of companies, they spec, twitter -- facebook, twitter, have developed a simple means to distribute.

It is a national -- natural convergence.

We talked about whether snapchat is a fad.

Do you think the "selfie" is a f ad?

Calling it is probably a fad.

It is probably not a fad to take pictures of yourself.

It is a little bit narcissistic.

It is a little bit exhibitionistic.

That has been a pair of us burst of terms that have been applied to facebook and social media from the beginning.

They are criticisms of the way we behave.

I do not think it is a fad.

I think people want to convey who they are and where they are going, . people want to be seen.

They will continue to want to be seen.

We will probably have a new word for it.

How important is the selfie to the business of facebook, twitter?

I do not think it is particularly important.

Facebook may profile pictures.

That is a good point.

The original selfie was a facebook rope off photo.

-- was the facebook profile photo.

I guess they are important to that way.

It is just a way of identifying ourselves.

I do think that snapchat is the service to watch.

Instagram has a much wider range of purposes.

Unfortunately, a lot of the snapchat selfies include more adjust the phase.

Turning down multimillion dollar offers, was that a mistake?

I do think that was a mistake.

I do not see them having the kind of growing business that would justify that sort of long- term confidence in their business potential so they can be worth so much more.

I think they are crazy to turn it down.

I want to talk to you quickly about twitter.

The first analyst reports to come back do not have a lot of optimism.

It will not go up much at all for at least a year.

What do you think about that?

Don't think that i am somebody who says we are in a bubble.

We can talk about the second company.

I agree that twitter does not have any business fundamentals that even really justifies current stock price.

Certainly not to justify an assumption that it would continue heading toward the heavens.

Until twitter shows a series of really impressive quarterly earnings like facebook has done with its ipo, the stock will not move.

It is not have any profit.

When comparing it to facebook, facebook started subtly showing profitable growth using mobile which is the one thing people were watching for.

They delivered it.

Twitter is a company whose losses are growing even though it's uses and revenues are growing.

Until they show some profit growth, i do not see where the stock will be going anywhere from here but down.

All right.

We will be watching it.

Thank you as always for weighing in.

Coming up next, you're next on right may be coming from a plant and not a chicken.

-- your next omelette may be coming from a plant and not a chicken.

? it is the end of an era.

" the onion" will stop it and addition after 25 years.

The brand may be more alive than ever after a major digital transition.

Jon erlichman is in l.a. with more.

The onion will be all digital as december 12. the ceo joins us from chicago where it is based.

How would you describe it today not compared to 25 years ago or a decade ago at the transformation we have seen even in the last five or six years?

I think the content is not a medically different than it was once before.

Or that it has been for two to five years.

The difference is the difference on the content side is the frequency of content.

We are a much more topical operation today than we used to be.

We write off the news every single day.

The volume of content we produce as much greater than ever before.

The transformation has really followed the transformation of the media business.

We are small and agile and we do not do anything particularly brilliant.

We saw it coming.

It was beginning to decline.

We got ahead of the game and decided to go all digital all the time.

That is what we have done.

Today we write about things that happen in real time.

In the old days we would not condescended to write that most people would consider to be news.

The satirical conceit and the humor is essentially the same.

You get a lot of credit to the content team.

It is led by the editor-in-chief will tracy.

How do you get everybody on the same page of where you are going and the content when things are moving so quickly?

Even if you're not doing things that different than before.

I think the most paramedics thing we did to get on the same page was to bring the company together here in chicago under one roof which we did about 18 months ago.

Prior to that, we started in madison, wisconsin back in 1988. we operated the business from chicago.

We operate in most of the creative functions of our company.

I personally found it almost impossible to, at a time when the media was changing so dramatically and we needed to be rolling in the same direction, we needed to have everyone together.

You put everyone under the same roof and everyday people come to work and they realize what you need to do to succeed.

For a small company what you need to do to compete against much larger competitors although competitors that are not nearly as funny as we are, and you know that.

It was the key.

I think that is essential.

Only 10 seconds left.

In november you had 89 million page views.

Are you on track to get north of 100 million anytime soon?

The combined properties did about 115 million page views in november which was an all-time record for us.

I am sure it will keep going up until we it puts every other media operation in the world.

There you go.

We appreciate your time.

Steve hannah, ceo of "the onion"." bill gates has funded a company that has a cheaper alternative to tags -- eggs.

This was made with a plant.

Hampton creek foods is a high- tech startup doubling as a food company.

Like most startups, destruction is the name of the game.

The $9 billion industry they are after/.r? eggs.

When he talked to crack in nestle and say why are you using eggs, they say they bind the cookie and they provide good mouth feel.

What you do not hear is i am obsessed with using a chicken egg.

What is wrong with my scrambled eggs?

They come from crazy places.

We think that is nuts.

As is full of tech geeks and biochemists.

92% of the world lance have not -- world's plants have not been asked lord for food.

-- have not been explored for food.

They have identified 11 plants that have the functional capability to replace eggs.

It is not without their own challenges.

It is hard to figure out the exact plant that will allow you to have a cookie dough or mayonnaise.

All products they are trying to replicate sans chicken eggs.

The first project is just mail.

They could be -- mayo.

It could be their first golden goose.

If you do not have an egg in mayonnaise, you'll get this sera p substance.

-- syrupy substance.

He have to find a substance to give you a nice, creamy mayonnaise.

The company trying to keep up with the egg toys, and thing up production from $80,000 to 3.2 million.

The company stand to gain from your company.

Who stand to lose here?

The global egg industry.

It is bizarrely unsustainable that we're going after with full throttle.

Rachel crane, san francisco.

This invention is sold in stores everywhere.

This man's dream may turn into a bankruptcy.

The pooper scooper lawsuit ? . we are focusing on technology and the future of business.

Google is making its cloud service available to general customers today.

It is also operating expanded support, faster storage, and a 10% price pad.

They're hoping to slight them away armed services.

Microsoft says it is seeing record demand for its new xbox one console.

It is selling every console a can make in the 13 countries in which the device is on sale.

Microsoft did not provide bloomberg with an exact number.

Sony says it has sold more than two point one -- 2.4 after launching -- 2.1 million playstation's. it is seen as a key part of the turnaround strategy.

This is officially the biggest cyber monday in history.

Shoppers around the country sent online sales up more than 20%. many on mobile devices.

Who were the biggest winners and losers?

Or editor at large cory johnson is here.

-- our editor at large cory johnson is here.

Ibm is doing this work because they are trying to sell their software service.

They monitor about 800 e- commerce sites.

It was pretty real time.

We have interesting data.

It is fumble to what they have done in previous years.

We have not done -- it is comparable to what they have done in previous years.

You go over the raw data, there are some contrary trends.

We keep seeing " biggest ever" but e-commerce is slowing down the growth rate.

It is down 21% year over year.

The growth in e-commerce is slowing and the size of the copying -- shopping cart is shrinking.

This started several days before cyber monday, the online deals.

It holds there as well.

Sizes of the shopping carts.

The growth rate is a little smaller.

There are a lot of trends.

To say this has traded up is not quite accurate.

It is slowing down a little bit.

Let's stalk about the mobile trend.

People looking for things on their phones and buying things on their phones and tablets as well.

The ios users on the apple device is better for shopping.

There was a lot more traffic.

They are using mobile more then the sales that resulted in mobile.

It was really through the roof, up 17%. the ios 7 i thought was fascinating.

Ios is just barely the majority but is such an easier device to shop with that we sell conversion rates and the users spent $120 versus $107 for android.

To me a great big surprise was that pinterest, a site designed to show user and buying intent, failed compared to facebook.

They spoke cap people spending more money.

-- they still had more people spending money.

You'd think a qualified lead from pinterest is as good as you can get.

People say i like this thing.

I want to own this thing.

You also have more female shoppers looking for something specific.

Women are different than men so i have been told.

Some of that might include shopping.

Here's another thing i thought was interesting.

The number of all, the percentage who put stuff in shopping carts into not complete a purchase was enormous, 60% or 70%. there are still a lot of room for improvement.

People put things in shopping carts and most of the time they do not buy them.

Those rates have got to come down.

I do that a little bit.

I do that.

-- i never do that.

Maybe you should.

Cory johnson, our editor at large.

Think you.

How does america cyber monday compared to another online shopping day, single stay in china?

Alibaba brought in a record shattering $5.75 billion on singles date which encourages unmarried people to buy stuff for themselves.

The managing director joins us from shanghai.

He helps companies develop their business strategies in china.

Other than size, china is four times the size of the united states.

How are the retail markets different?

It is great to see you.

There are some major differences.

It is really quite expensive to open up rick and more to her stores, even more than it is here in the united states.

-- brick and mortar stores, even more than it is in the united states.

A lot of companies are saying we're not going to open at these throughout the country.

We are going to push e-commerce as our first sign into china.

Nina market -- neiman marcus try to do this.

E-commerce is in many ways more popular than it is in the u.s. per capita they will spend more per year.

It is different from what you and cory were just talking about.

Sales are growing fast.

We expect it to grow 50% year on year.

We often hear allie bobbitt being compared to amazon and ebay.

They are different -- allie ibaba being compared to amazon and evebay.

Some say allie baba is more like google -- alibaba is more like google.

They are innovative on their own.

They have b to b. they are a very different cat.

I would look at it as being a very innovative company.

You are seeing companies having mobile payment systems through their instant messaging.

I think it was about 100,000 phone sold in a one-hour period after they started selling their instant messaging service.

Cori which is speaking earlier about how e-commerce is slowing down.

Do american companies have anything to learn?

Amazon does not really exist in china.

When we interviewed chinese consumers, and never comes in is one other top 10 e-commerce sites.

Ebay is even lower.

I do not know if they are in the market anymore.

What you need to do is get chinese managers to be in charge of your operations and let them react quickly to the marketplace.

They beat ebay because they were just quicker at being able to cater to what chinese consumers wanted.

It is something that we want.

When we interviewed chinese consumers, they much prefer to buy up e-commerce.

In new york it was clean air.

In shanghai, it felt like i smoked five packs of cigarettes.

You see a lot more people buying online.

How does the tradition of giftgiving in the united states compared to china?

Are chinese consumers more often buying things for themselves or gifts for others?

That is a great question.

About 20% of all sales are part of gifting.

It is common for a 25-year-old woman to see an item she likes and buy three get them to be able to get out to their friends . there is a big part of gifting which is government him where you give a correct gift.

-- corrupt gift.

That is being let down by xi jinping.

In china, about a third of e- commerce sales are actually returned because a lot of the e- commerce companies do not charge for returns or shipping and delivery.

When you hear the big number 6 billion, probably about one billion of that is returned to companies.

It is growing but not as big as a lot of people think.

That is an interesting point.

We will have to check into allie baba to see if they have a revised tally.

Thank you so much for joining us.

We will be right back.

Jeff bezos made headlines this week when he showed up -- showed us a small drone that can be used to deliver packages.

It would be called amazon prime air.

Core jon huntsman looking into this.

When i asked brad stone of those possible i got so much flack on twitter.

People said of course it will.


They deftly have the name.

The name is a real.

-- they definitely have the name.

The name israel.

Big about all the stuff you order.

There are probably two boxes in front of your house today.

That would have been five drones going 50 miles.

The distribution center will be about 70 or 80 miles away.

There is a lot that has to be worked out.

There are companies that are looking at this and trying to imagine ways that this business could work.

I talked to the ceo and cow phoned her -- cofounder of the brains behind the technology.

The first thing i asked them is is this possible?

If you're going to land in a huge variety, it'll be different looks.

Drones do not have a see and avoid system to avoid other aircraft or the dog in the backyard.

Do not hit my dog with a drone.

That is not at all possible?

It is not possible within the time frame.

It was out there.

We are interested in this application.

In africa there is a fleet of drones.

It is a similar application.

It will be from a known location to a known location, a central to a local hospital delivering very likely ingles in -- lightweight things in life saving circumstances.

Talk about what you are building and not building.

Some are dropping bombs in the middle east.

We showed them the amazon drone idea.

We are focused on commercial applications.

I think the military market is well served.

I think there is a huge opportunity.

These are going to be used for a wide variety of application.

One of the big challenges right now is there is no platform to people to build on top of.

People who want to build the drone are trying to reinvent the entire stack are using one of the black box solutions.

It makes the think where.

Everything from sensors to low level electronics.

As well as they some kind of application software.

That is what most companies would like to focus on.

I have to imagine the fsa, the difficulty of putting these devices.

In there are the regulatory hurdles they want to have rules in place so that drones are not crashing into each other.

We are big believers in that.

Our focus is building everything from the low level electronics to software so people who are using this build a complete joan for an agricultural solution they can bring that to the faa and they say this is common from one solution to another.

Can drones be doing business in america soon?


Will it be delivering packages to our doors?

Maybe not shared remembered -- maybe not.

Remember to join us as we broadcasting i from san jose.

We have interviews with some of ebay's biggest names.

We will show you how ebay has evolved from an online auction house into a tech giant.

Do not miss this all day friday on "bloomberg west." what can they companies learn from small startups?

The man behind the lean startup movement joins us next.

? behind every bake ipo there are small startups that never make it.

How many of the feel years are preventable?

Startups can often save themselves a lot of stress by adopting simple principles that help is are questions like how much are companies -- customers willing to pay question mark i am joined by eric ries.

It really has become a movement from the smallest company to companies as big as ge.

How would you say this movement has evolved?

No one is more surprised than i am when i started writing about these principles.

Since the book has come out it has become global.

People all over the world are adopting the ideas.

A lot of established companies.

You go into these companies and help them reorganize.

You are like a modern-day consultant.

It can be a dirty word.

You're trying to make it a good one.

Let's use ge as an example.

You have used -- helped them a lot.

What i have tried to do is help them recognize where they have entrepreneurial challenges, the matter how large the company is.

Every company has entrepreneurs working on new processes and internal systems.

The traditional way we go about that, the gigantic part-time team does not produce good results.

What is an will -- what is so striking is that they are less like valley started.

Not nearly enough customer feedback in your rotation.

Fermentation or is really important -- extremities and -- experimentation is really boring.

If you do not know what is going to work, you are an entrepreneur not what it says in on your business card.

You have written about diversity of all kinds.

Tell me about that and how you have try to bring that into companies.

If we are more data driven and everything we will do -- when you see selection processes and events that are producing an outcome, it says i do not believe that is a bureaucratic selection process.

One thing that is important to me is really thinking about how do we figure out how to eliminate all kind of biased remark decision-making even when we are selecting people to be in a startup?

Let's talk about the conference you're holding next week.

You said it would be different than any previous conference.

How so?

The last thing the world needed was another conference.

Our goal is to produce a conference that is entirely about practitioners, all case studies and real studies about actual entrepreneurs.

No speakers are people you have never heard of.

It is about people who are tying to advance.

You are trying to make the conference itself diverse.

We have been on a multi-year journey.

Unlike every other tech conference i've been to, we only have 50% white men.

A lot more women in our speakers and mentors in roles where they have expertise to share but maybe not on the common circuit doing the same thing.

What is the result?

It is pretty remarkable.

With no force to diversity but saying we're going to invite people who would not otherwise think of themselves as qualified to apply, just a basic single thing we have been able to dramatically increase the percentage of women and people of color.

We think that produces a better outcome and conference.

If you look at our program, it was a way better conference.

We will be looking out to see how it goes.

Eric ries, it has been so great to see you.

It is time now for the bwest byte where we focus on one number that tells a whole lot.

What do you got?

It is 11%. deutsche bank estimate the u.s. defense department is responsible for 11% of the global satellite business.

Military will back says space x is hoping to benefit from nasa pullbacks.

Nasa is the only one in much u.s. spy satellites.

Ipart of that is in decline.

This is still not out of the woods.

We will be watching to see how the fight comes off over the next few days.


I think it really put some pressure on some of the traditional players.

Elon musk has perhaps the upper hand in that perspective.

Thank you all for watching this addition of the show.

We will see you back here tomorrow.

-- edition of the show.

We will see you back here tomorrow.


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