00:00name is Balaji sure Boston I'm a general
00:01partner at Anderson Horowitz and today
00:05Airbnb digital ocean and local motion to
00:10talk about the end of ownership and so
00:14just to jump right in you know I'm gonna
00:15basically throw out some questions we
00:17will have each of our panelists kind of
00:20you know respond and then at the end if
00:22we have some time maybe we can do like
00:24an audience Q&A so just to you know
00:28how would you please also introduce
00:31yourself when I you know kind of go over
00:33so Joe how do you define the concert the
00:36end of ownership and maybe give a little
00:38sure I'm Joe Gebbia and one of the
00:40co-founders and chief product officer of
00:42Airbnb and we certainly seen this trend
00:45pick up in the last 7 years since this
00:48is the concept launched in your living
00:49room seven years ago I think that
00:52there's just been a general trend of
00:54what I've seen of the importance of of
00:57access to things trumping what we
01:00normally would put the value on of the
01:02ownership of those things and I think a
01:04great analogy for this is actually the
01:06music industry if you rewind about 15
01:09years ago the way to consume and to buy
01:12and purchase music was to physically own
01:14an asset of that piece of music and of
01:17course we're going to roll today where
01:18you don't need to own music anymore it's
01:20actually more valuable to have access to
01:21all the music you could ever want right
01:25okay and hi my name is Ben Uretsky
01:30co-founder and CEO of digital ocean and
01:33we're simplifying cloud infrastructure
01:35for developers so the way we think about
01:38the end of ownership is we deal with a
01:41real physical asset which is server
01:44space and computing resources sitting
01:46inside of a physical data center which
01:48empowers online applications but the
01:51idea is that we abstract that datacenter
01:54away we abstract the server away and
01:56what we present is a computing resource
01:59that we term a droplet to to a user and
02:02what that's allowed the user to do is
02:04essentially use a variable cost approach
02:07to building their applications and it's
02:10enabled so many companies to
02:13emerge in this new app economy and the
02:16new internet that we see spreading
02:18across the world so people from emerging
02:21markets are able to deliver their
02:23applications faster as a result they're
02:26able to start businesses whereas before
02:28they had a huge upfront fixed cost that
02:30was a difficult hurdle for them to jump
02:32but as a result of the flexibility that
02:36virtualization creates and cloud
02:38provides to these users they're able to
02:41actually build a business and and the
02:42barrier to entry into many markets has
02:45significantly dropped as a result of
02:48that and cloud is really leading the way
02:50we are one of the few companies that
02:53actually provides that raw server
02:55infrastructure that powers the Internet
02:58and I'm actually proud to say that in
03:01the majority of the servers that we use
03:04we don't own directly either and you
03:07know the banks actually own those
03:09physical assets and it's not a real you
03:12know it's not a differentiator for us
03:14because it's still the same silicon at
03:16the end of the day it's an Intel
03:17processor it's some memory component of
03:20some storage that connects to a network
03:21and what we deliver transcends the the
03:25physical asset and it really goes to
03:28create the experience for people that
03:30ultimately use that product so we're
03:32actually the fastest growing cloud
03:34provider on the planet today and that's
03:37because we've built an experience that
03:38looks like nothing else that's out there
03:40so you know by being able to abstract
03:44away from the physical world we're able
03:48to deliver a really unique experience to
03:50John you wanna talk a little bit about
03:52what local motion is and your secure I'm
03:55John Stanfield CEO and co-founder of
03:57local motion and what we do is we bring
03:59the sharing economy to the enterprise we
04:01work with large groups of high dollar
04:03assets vehicles and our target is to get
04:07to the eight to ten million vehicles
04:09that are in fleets across the United
04:10States today in large organizations
04:12whether that's University or private
04:15corporation public corporation or
04:16government we can basically walk in the
04:20door and save twenty to thirty percent
04:22on the fleet costs over time which
04:25if you have a thousand cars and it costs
04:26seven to eight thousand dollars per
04:27vehicle per yo that's quite a sum of
04:29money so optimizing these fleets is done
04:32through sharing and through making the
04:34experience of sharing actually better
04:36than owning so we focus on the user
04:38experience at the door making sure that
04:40everybody who walks up to a car that
04:42needs to have access can have access and
04:44then once they're in the car making that
04:46experience better than owning so
04:48everybody wants to use it right so you
04:51know one way also thinking about sort of
04:53the end of ownership concept is it's a
04:55consequence of software aiding the world
04:57in a sense that you know software is
04:58about for example it used to be
05:00manufacturing a CD so you wrote the code
05:03at high fixed costs and you manufactured
05:04CD is a very low variable cost and
05:07that's a very common theme you know
05:08Airbnb dissolution and local motion you
05:11are reducing fixed costs for people
05:12reducing upfront commitments up front
05:14prices turning that into variable cost
05:17so kind of you know how is that
05:19affecting people's behavior what kinds
05:21of things have you seen both of your
05:22employees and customers and you know
05:24what surprised you about behavior change
05:25so kind of like the principle the
05:27sharing economy is to look around and
05:29find what's going underutilized and
05:31connect that with somebody who wants it
05:33it's like somewhere from the South just
05:35told me recently oh yeah we've been
05:36talking about it for centuries it's
05:37called neat hey have hey and you connect
05:40those who want with those who have which
05:42we can do now in a way that's that's
05:44faster than we've ever seen thanks in
05:46large part to mobile and that there's
05:48billions of devices in people's pockets
05:49thanks in large part to how quickly it
05:51is to get ideas into people's hands and
05:53thanks in part to how much Trust has
05:56been built up on the internet through
05:57social networks over the last decade
05:59that can now transfer back offline right
06:02so what we see an Airbnb is a platform
06:04where you just put the pieces out there
06:06and your community comes see with its
06:08creativity of well sure I have a bedroom
06:10but there's actually four thousand boats
06:14where boat owners are seeing this as a
06:15possibility to say when my post is
06:17sitting in the marina going idle I could
06:19actually be leveraging that asset to
06:21make some extra money to pay off my I
06:23cost for that boat there's also people
06:25with whether or not there's 500 tree
06:27houses on Airbnb and one of our kind of
06:30classic stories is a couple up in
06:32it's beautiful treehouse right in the
06:34middle of the woods if you love autumn
06:35and New England this is the place
06:36the you literally state in the trees
06:38they used the treehouse to pay off their
06:40mortgage on their main home so it's it's
06:43about like seeing the world a little bit
06:44differently seeing what's what how to
06:46reuse the resources around you awesome
06:48Ben what about you what does
06:51digitalocean done how does it change
06:52people's behavior when they've got
06:53turned fixed cost and variable cost yeah
06:56I mean I can't take all the credit but I
06:58think cloud in general what we're seeing
07:01is this huge shift from you know the
07:04enterprise approach to the user
07:07experience approach and and what I mean
07:09by that is in a you know in the
07:12traditional infrastructure space
07:13companies would build out massive
07:15infrastructure to try to stay ahead of
07:18user demand and sometimes they did a
07:20reasonable job of capacity planning and
07:23we're able to stock up sufficient
07:25resources and then other times
07:26especially in a holiday season or some
07:30kind of peak burst event maybe a news
07:32story or something else that's relevant
07:34that capacity may not always be
07:36sufficient for that spike demand and as
07:40a result of cloud and this where you you
07:44don't actually own the infrastructure
07:45underneath you're relying on a larger
07:47partner who can actually excel at that
07:49you're able to switch the driver rather
07:53than it being the enterprise that's
07:54going on in procuring those resources
07:56the focus is now on the users that are
07:59actually beginning to use the
08:01application and the you know you can you
08:04can essentially bake an algorithm that
08:06reacts to that user demand so the user
08:08is the one who's now beginning to drive
08:10the actual procurement cycle and it's
08:13it's been really useful because
08:14businesses are able to operate at a much
08:16higher efficiency as a result of that
08:19closer parity between what a user is
08:22requesting and the deployed resources
08:25that they have to match that demand so
08:27you know the other interesting thing is
08:29that because the experience becomes that
08:32much better it's less about in some
08:35regards it is a little bit less about
08:36the efficiency so we've seen companies
08:38that care less how efficient they run
08:40each individual server but that they
08:42have sufficient resources to service
08:44that demand and I think it's interesting
08:46because their focus is finally like
08:48let's get out of you know the building
08:50users are having an amazing experience
08:52rather than hey how did we get enough
08:54servers and in the building to service
08:59John so local motion you take a
09:01company's fleet you turned it into
09:03something where anybody can drive any
09:05car how does that change people's
09:06behaviors yeah for us it's a little
09:07different because the fleet operators
09:09generally have the assets already either
09:11ownership or alesis sign so the money's
09:13basically been spent so what we find
09:16really interesting for the future fleet
09:18is taking that fixed cost and saying ok
09:20how can we turn this you know cost
09:22Center on potentially into a profit
09:24Center so if you think about a fixed
09:27group of vehicles there's a very
09:29determinate time that is used during the
09:32day and you can very easily map that now
09:34with our technology in every car we can
09:36show the owners of these assets where
09:38that demand versus the supply of
09:40vehicles is and we can lower that you
09:43know just to at least the match to save
09:45them on the overall cost of the fleet
09:47then we can take it a step further and
09:48say ok we notice for example in the
09:52French postal service that the vehicles
09:53aren't used after 2:00 p.m. and so we're
09:57talking to some of the innovation
09:58officers they're saying you know why
09:59don't you start making these available
10:01to other entities or to the public and
10:03actually make money back on these on
10:04these assets and that's a very
10:06interesting conversation and really
10:07flipping this on its head and saying you
10:10know here are all these vehicles that
10:11you already own why don't you make money
10:12from them interesting so you know each
10:17of your companies you don't own things
10:20directly you don't you know Airbnb you
10:22don't own houses you know digital ocean
10:24you don't actually own your servers
10:25locomotion you don't know the cars um
10:27how would you see your core value add
10:29what kinds of things are you adding you
10:31know the screen with you Joe I think
10:33probably for all of us it has to do with
10:34like the mechanics of the platform like
10:36you really you don't own the home in our
10:38case but we do on the platform that our
10:40hosts put the home on and the platform
10:42the guests discover and book those homes
10:44so behind the scenes it takes an
10:46incredible mount of work to figure out
10:47how to make the mechanics of something
10:49like that it's like how do you actually
10:49get someone comfortable with opening up
10:52their home to someone they've ever met
10:53that takes an incredible amount of work
10:55to try to figure out so I think in many
10:57aspects we own the platform we own the
10:59trust between our customers
11:03we own certainly the customer service
11:04aspect there's a couple components kind
11:06of like the the railroad tracks
11:08underneath it all but I think we don't
11:11been yeah I would just pick you back on
11:14Joel's statement and say really what
11:16that boils down for for us is the
11:19experience that the product ultimately
11:21creates right it's not so much the
11:23foundational elements that go into it
11:25although they do play a huge part but
11:27it's the interaction that a user has
11:29that really reign supreme here and
11:32that's what each one of our companies
11:34actually owns is that is that touch
11:36point with the user as far as they're
11:38concerned you know it's digitalocean
11:39it's Airbnb you know it's it's a local
11:44motion right and and they associate
11:47naturally that product with everything
11:51underneath it right so perhaps you know
11:53if I stayed at an amazing Villa I would
11:55say oh wow that was a great air B&B
11:57rather than saying hey it's a villa that
11:58belongs to John Smith and she the
12:02branding goes to the platform yeah
12:04exactly and the brand really is the
12:06expression of the product and the
12:08experience and the user and that's yeah
12:10it actually takes a lot of work like
12:12josa to to really understand the users
12:15needs and I think that's something that
12:16we really are able to focus on more so
12:19as a result of abstract in a way the
12:21things that aren't really vital to our
12:22success awesome John yeah I would agree
12:25I think I mentioned experience already
12:28but I think the in our case the user
12:30experience actually at the asset out the
12:33vehicle at the door is is essential
12:34because if it only takes one or two
12:37experiences where you try to open the
12:39vehicle and it doesn't open before you
12:41go back to using your own car and that's
12:43a failure on our point so we obsess
12:45about that and that's really hard thing
12:46to do it's a very technical solution
12:49which we take a lot of pride in on the
12:51other study this I would also say you
12:53know that the industry is a whole
12:55vehicle side of the owned asset world
12:57has kind of become very distributed
12:59because of there hasn't been a great
13:02deal of data flowing back to the
13:04managers so they really have no intel on
13:06what's happening on the ground in real
13:07time so being able to show them a way to
13:11pull these assets into more of a
13:13centralized model allows more clear
13:16across the board from the people who are
13:18actually managing the assets all the way
13:20excellent yeah you know one thing I
13:22would also kind of say sort of
13:24integrated lis is that you know the code
13:26isn't visible the data isn't visible but
13:27very complicated you guys are writing
13:29hundreds of thousands if not millions of
13:30lines of code at this point and that's
13:33not tangible to people necessarily if if
13:35I mean they're seeing it through the
13:36website they're not seeing the
13:37complexity of that always um so then
13:39kind of you know relate to this you know
13:42as you start you know having your
13:45purchases become more frequent and more
13:48small you know you're you're buying
13:50smaller increments of things small
13:52rentals of houses or of servers
13:54community reviews and that kind of thing
13:56become more important because you're
13:58making more buying decisions you want to
14:00see star ratings in line so you know how
14:02do you think about that Joe with the
14:04context of Airbnb um well I think that
14:06was a big learning first actually was in
14:09the early days like one of the biggest
14:10blockers to get someone to try this this
14:13new behavior right of like I previously
14:15have always stayed in hotels and now
14:17there's this new offering of a home and
14:19who's this person that's rented it out
14:21so to get people to cross that bridge it
14:23had all the classic ingredients of
14:25behavior change and so one of the key
14:28things that we learned as to get people
14:30across that bridge was with social proof
14:32there's really showing you that people
14:34just like you ideally your friends but
14:36if not your friends people who were just
14:38like you in their same industry your
14:39same profession they look like you like
14:40they're using this they're having a
14:42and you can actually track the metrics
14:44and see the cohorts of as reviews were
14:48added over times how the adoption
14:50started to to get into we're in the
14:53middle hyper growth right now yep at all
14:54you can all trace that back to like
14:55getting this first proof points of
14:57really positive reviews from people yeah
14:59actually I think there's probably one of
15:00the first sites where Facebook
15:02integration was actually useful you know
15:04we're totally Facebook integration you
15:06can see where your friends have stayed
15:07you can see friends or friends who are
15:09hosting and just like reduces the kind
15:12of complexity of like do I know this
15:13person we show you one of three ways
15:15what you already do awesome so been
15:18module ocean you you don't have the same
15:20kind of problem since you don't have a
15:21untrust semi trusted environment where
15:24you're a platform and you're mediating
15:25transactions to houses that you haven't
15:28personally vetted the servers you vetted
15:29but the software that people would
15:31deploy the platform is not 100% trusted
15:33it's sort of analogous so have you guys
15:35solved that or had anything of your
15:36community yeah we actually paid a lot of
15:39attention to the community early on and
15:41I think that's one of the big
15:42differentiators for digital ocean is as
15:45we focus on the developer segment
15:47worldwide what we found is that there
15:49isn't really a central gathering place
15:52where everyone can communicate and talk
15:54about open-source technology how to
15:56leverage it and what actually best fits
15:58the the business problem and the
16:01community that we've created it draws
16:03nearly three million visitors per month
16:05at this point really talks about the
16:07challenges that companies go through and
16:09trying to figure out the right software
16:11stack to solve a business problem so
16:14because customers are an actual you know
16:17just prospective users are visiting this
16:20community and they're finding out the
16:22right tool for the job that's vetted by
16:24people just like them rather than it
16:27being force-fed and saying hey you know
16:29we as the provider recommend that you
16:31use X Y & Z they're communicating with
16:34each other and saying I solve this
16:35problem using this technology and we
16:38just provide that central communication
16:41place as well as like a rich profile
16:44with you know likes and essentially
16:47trusts can can you trust this person's
16:49opinion and the more the conversation
16:51happens the likelier you are to try it
16:53and then go back to the variable cost
16:56since it is so flexible and it's so easy
16:59to get started they're much more likely
17:01to try out a number of different
17:03solutions for their problem and then
17:06ultimately land on one of the ultimate
17:08expression of that community is if the
17:09user finally comes back and says you
17:11know what guys I tried these three
17:13recommendations and they ultimately
17:15chose this one because it was the best
17:16fit and so other users then learn from
17:18it and it's a repeating cycle excellent
17:21so John in your case and correct me if
17:23I'm wrong you wouldn't have the same you
17:25know sort of reputation you know
17:27kind of issues but whereas would say
17:30dilution you'd use kind of the data to
17:32say installer to uninstall the software
17:33and Airbnb would say you know wrench or
17:36don't rent this this house in your case
17:38you guys are using data it slightly
17:39differently which is buy or don't buy an
17:41extra car can you talk about that yeah
17:43or in many cases you know maintain the
17:46the number that you have and just turn
17:48the dial up on the number of users
17:49increase utilization per vehicle which
17:52is really powerful something that when
17:53your first question kind of sparked in
17:56my mind was something interesting that
17:57we learned at the very beginning was you
17:59know we built scheduling devices and
18:01tools for people to plan their mobility
18:03in advance and you know ways to
18:05communicate with users etc and then what
18:07we found was that most people don't plan
18:09at all and so we had two very very
18:12clearly communicate with the user in
18:15real-time at the door so when they walk
18:18out the door and they're on their phone
18:20or doing whatever they're doing and
18:21their head pops up and they scan the
18:23parking lot they see the option and they
18:25can walk to it and utilize it and that
18:27was something that was anticipated but
18:29the effect of it was very surprising
18:31because more than 90% of all of our
18:34rides during the day are what we call
18:36tap and go some people just don't plan
18:38ahead I knew that about myself but but I
18:42didn't know that about the general
18:44population which was really fascinating
18:45that's interesting yeah I mean like one
18:47kind of common theme we can abstract out
18:49is sort of you know the end of ownership
18:50means greater mobility greater
18:52flexibility greater experimentation so
18:55you know you're not gonna live in a tree
18:56house your whole life or a boat but you
18:59can actually now go and try it without
19:00going and buying it and you can also try
19:02out a new piece of software and it's you
19:03know you know if it crashes your your
19:05thing or it's incompatible but I'm just
19:06wipe it and then you know get a new one
19:07and obviously one becomes more mobile so
19:09kind of becoming more nomadic more
19:11experimental and kind of in that spirit
19:13I remember like my dad growing up always
19:14wanna get a vacation home that the
19:15family could go do and it's like kind of
19:17in 2014 he doesn't need a vacation home
19:20anymore and the whole time share a few
19:21hundred thousand right put you somewhere
19:23an Airbnb in other sites so it's like
19:25that whole premise this whole kind of
19:27shifted way of thinking is shifted to I
19:29don't need to own it anymore it's more
19:31important to have access to many many
19:33options right I mean like that's kind of
19:35a thought of you know nineteen fifty
19:36that year was to own you know the
19:38American Dream own large consumer
19:40you know maybe by 2050 the goal is to
19:42own nothing at all and call everything
19:43on your phone right so okay so kind of
19:47relates that other industries may be
19:50entering the end of ownership you know I
19:52have my thoughts but I'd love to hear
19:53your guys so maybe it's re mojo hmm you
19:56know when I travel it turns out there's
19:59actually thousands of companies
20:00regionally around the world whether it's
20:02in Europe South America or Asia that
20:03have taken the basic premise of the
20:05sharing economy and said like okay we
20:07see this local problem let's just
20:09connect people who have and who want in
20:11our city and probably the most
20:13remarkable one that I heard of probably
20:15funny someone was as in Seoul South
20:17Korea an entrepreneur comes up to me and
20:20introduced hamby's business card and I
20:23read the card that says we were sharing
20:25economy company for business suits and I
20:29look and as explained to me later that
20:31in in Seoul it's very important when you
20:32go to an interview have a really nice
20:34suit on but it's like a catch-22 because
20:36you know have the job yet you can't
20:37afford the suit so this whole
20:39marketplace has been spun up in Seoul
20:41it's actually doing really well from
20:42what I hear so that if you have an
20:44important job interview you can have
20:45access to really nice business suit I
20:47have a true son that I want I want
20:48Airbnb or some hotel to actually offer
20:50suits so you don't have to pack right so
20:54this way you could just fly over there
20:55and not pack pick up the suit that'd be
20:56an amazing profit Center you know and
20:58then you just boom like this started in
21:00the Washington or the mobile closet no
21:01closet exactly that's right and then
21:04over time then you know airplanes could
21:05take away the overhead bins if you get
21:07enough volume but that's a long term
21:10then what do you think what weather
21:12industries are entering the end of
21:13ownership I'll talk about a little bit
21:16more broadly I think what we're seeing
21:18is a shift from a conventional way of
21:21doing business where it's a closed
21:23system and enterprises and companies are
21:26making huge capex investments into
21:29building out what they consider to be a
21:30competitive advantage or perhaps not
21:33even an actual advantage but a way of
21:35doing business and one of the biggest
21:38trends that I think will begin to emerge
21:40over the next decade is as enterprises
21:42become more aware that these nimble
21:45startups provide essentially a better
21:47service a better experience a better
21:49level of infrastructure at at the same
21:51time at a lower cost than can be created
21:54inside of a company the daring
21:58courageous businesses will go ahead and
22:00adopt the new way of doing business
22:02because it actually doesn't benefit
22:04their user and it doesn't benefit their
22:08and I think inherently because we've
22:10done business this way for for last you
22:13know five decades it'll be very
22:15difficult for many different industries
22:18and different companies of all shapes
22:20and sizes to make that transition and so
22:22I'm not sure exactly which industry but
22:25I think we're seeing this across the
22:26board is that as technology becomes more
22:28prevalent you're able to really change
22:30the business model and it's important to
22:33you know kind of get your head out of
22:36the clouds and really take a look around
22:37and make sure that the way that you're
22:39building your company today still is
22:42relevant in 2014 and it's not predicated
22:45on on a business model that was
22:47developed decades before John what do
22:50you think is yeah very concretely for us
22:52you know large high-value assets like
22:55dump trucks and graters and you know
22:57things that are not used every day but
23:01sit around for the majority of the year
23:04forklifts stuff like that yeah and again
23:07it's the same problem there's absolutely
23:08no data flow and how these things are
23:10being used and no ability to limit them
23:12or schedule them in the future another
23:14very interesting point there is actually
23:16licensing so for example you you really
23:19don't want me driving a dump truck
23:21I think that's a bad idea but of course
23:23there are people that are licensed
23:24professionals that do that and so you
23:27want to make sure you can not only know
23:28where these assets are and make sure
23:30they're you know utilized to the best of
23:33your ability whether that's sharing with
23:35Jason counties or whatever but you don't
23:38want people that are unlicensed and
23:39unqualified actually operating the
23:41equipment that reduces or increases your
23:44liability when you have you know
23:45basically the doors are open so for us
23:48it's really about looking at the next
23:50level of of equipment that's sitting
23:52around interesting one of my candidates
23:55for an industry entering the end of
23:57ownership or that may eventually is
23:59education in the sense that you know you
24:01have a huge upfront commitment of K
24:02through 12 and then four years of
24:04college and then maybe grad school and
24:05so on and you know with MOOCs and with
24:08Stack Overflow and github and all this
24:10online help you can start turning that
24:12more and more into on-demand rather than
24:13this enormous upfront fixed costs and
24:16learn basically on the go contextually
24:17as you need it so okay just and we can
24:21enter Q&A in a bit but you know kind of
24:24in a few sentences what do you think of
24:25the implications of this space this
24:27concept for people in the room CMOS CIOs
24:29other executives what does the indirect
24:30ownership mean for their business if I
24:33love your comment about education
24:34couldn't come back to that sure yeah I
24:36feel like you can kind of see the
24:37beginnings of what's going on with
24:39education happening now and Sebastian
24:42Thrun yep he had this crazy story he
24:44runs a Udacity which is his online
24:46education and he talked about how he
24:48opened up artificial intelligence course
24:49to the global audience they know getting
24:51a few hundred thousand people around the
24:53world for the Stanford artificial
24:55intelligence course and he shared an
24:56email which I'll never forget because
24:58this changed the way that I thought
24:59about this about a student a teenager in
25:02Afghanistan who wrote in to him and said
25:04professor Theron I'm really sorry I
25:06missed my homework yesterday my village
25:09was getting bombed but I was able to
25:11sneak into an Air Force Base and get an
25:12hour's worth of Wi-Fi here's my homework
25:14it just showed the great lengths that
25:17people will go to for education if they
25:18have access to it yeah absolutely
25:21so then thoughts on implications and
25:27yeah I'm Joe I agree by the way if you
25:29have thoughts on the implications
25:29outside in this region yeah I think the
25:31the variable nature of these call
25:34allows you know a much greater level of
25:36experimentation and you know as an
25:40enterprise scales ideally you also have
25:43profit that scales along with it and
25:45being able to allocate a portion of that
25:48profit towards new endeavors creating
25:52R&D labs and you know really trying out
25:55new technology new ways of doing
25:56business and figuring out what the
25:58future looks like is something that's
26:00really exciting and many of the
26:02companies that are staying relevant
26:03today are branching out and trying new
26:06ways of doing things and so I think it's
26:08it's important for us to look around the
26:11world and figure out the services that
26:12are complimentary to you know the
26:15industry that we're in and take
26:17advantage of them to to try new things
26:19faster and ultimately grow our companies
26:22right because if you're not growing then
26:25you're dying and so I think this is a
26:27much faster and easier way to continue
26:29to continue that growth John what do you
26:32think implications of the space for
26:33people in the room yeah I agree I mean I
26:35think it's it's very valuable to have
26:39all these in my case all these mobile
26:40sensors roaming around them basically
26:42helping us predict how people move and
26:46where they move because the larger
26:47problem here is is as I experienced this
26:49morning trying to get here from Mountain
26:51View is a there are just too many people
26:53in single occupancy situations so once
26:57we have more information flowing in to
26:59us about how people are actually moving
27:01in real time our goal is to be able to
27:04build models of how we can help reduce
27:06that that demand curve basically and
27:11really that's super powerful and it
27:13affects everybody in this room
27:14regardless of your position it just
27:16sucks to drive on the freeway by
27:17yourself and overall we're you know
27:20we're trying to build a massive
27:20connected network of vehicles that are
27:23communicating with us and with the user
27:25and through that network we can connect
27:27auxilary services you know push deals
27:30etc there's a lot of opportunity there
27:31to connect other services but really
27:34being able to predict that that demand
27:37is is it's time to do that excellent yep
27:41I would say you know my gloss on this in
27:44terms of implications for people in the
27:45room is any fixed call
27:47that you have think about how you can
27:49transform it into a variable cost any
27:50large upfront commitment or long-term
27:52you know kind of contract can you turn
27:55that into something which maybe is more
27:56expensive on a monthly basis but that
27:58allows you the flexibility to opt out of
28:00it and then switch into something else
28:01has your business changes the other
28:03aspect of it on the flip side of it is
28:05gonna mean that your customers are in
28:06some ways easier to acquire maybe but
28:08also more fickle because they're going
28:09to expect to experiment and maybe your
28:11reaction costs will be non-trivial and
28:13that that's kind of a pain if you're
28:15marketer but also maybe an opportunity
28:17so I think that's in to kind of prepare
28:20questions maybe you can do QA or
28:23hey so I guess a question for all of you
28:27whoever's encountered this the most so
28:31as you've kind of developed the sharing
28:34ecosystem somebody owns the asset and
28:38sometimes that asset is owned by a bank
28:40or financial institution sometimes sewn
28:43by somebody else and also there's a
28:45whole ecosystem that goes around the
28:47asset in terms of insurance etc have you
28:50guys encountered how that plays into the
28:54equation currently and how you think
28:56that's going to evolve to help support
28:59sharing becoming even bigger I'd say
29:04absolutely I think there's a whole kind
29:06of second supportive economy that's
29:08supporting a lot of the businesses that
29:10we've started kind of like an analogy we
29:14work very closely with Jeff Gordon and
29:15it tells a lot about their early days at
29:17you Bay and you know there's a whole
29:21economy that started just around a bay
29:23to support sellers right like whole
29:25businesses formed just to support that
29:27the whole eBay economy I think you see
29:29the same thing with our industries as
29:30well whether that's insurance whether
29:33that services a couple of things that
29:35we've had to figure out is like
29:37educating insurance companies about what
29:38this even is like a lot of them gave us
29:41blank stares when we first sat down with
29:42them but now we've actually innovated on
29:44insurance policies and programs
29:46so through ODEs and others there's now a
29:49sharing economy insurances not only for
29:51homes or for cars and other things out
29:52there that didn't exist even two years
29:53ago so I think this is just starting to
29:56emerge all these other kind of
29:58tertiary services that support the
30:00businesses that that we've started yeah
30:04I'd almost take the exact opposite
30:05approach right and when we look for
30:07insurance it feels like we're dealing
30:08with behemoths that have operated the
30:11same way for 50 years and so I think
30:13that's like an industry that could be
30:14ripe for disruption I mean obviously
30:17they're in it because they're making a
30:19what really prevents us from using a
30:21platform like tilt or any any kind of
30:24crowdfunding and provide insurance for
30:26fixed assets out there right I mean we
30:28need some pretty good statistics to make
30:29sure we're making the right bets but it
30:31doesn't necessarily have to come from a
30:33single enterprise entity I mean that's
30:35the way the world looks today but it
30:37doesn't necessarily mean that that's you
30:39know where we're headed in the future
30:40and so a lot of times the services are
30:44hidden right only a very select portion
30:46of the population or even the business
30:48population is actually exposed to those
30:50challenges and so while it may not be
30:53that frequently occurring there's a
30:56tremendous amount of revenue tied to it
30:57so I think as a result the opportunities
31:00is relatively large from my perspective
31:03it's a great question I think insurance
31:06is one of those kind of in my opinion
31:07pain of ownership so if you look at the
31:10hundred and thirty million families in
31:12this country that owned more than two
31:13cars every single one of those fleet
31:16managers has pain of ownership just the
31:18same as you know GE Capital or whoever
31:20has the large fleets out there insurance
31:22is one piece of that removing that pain
31:24of ownership is really what unlocks the
31:26sharing of this type of asset and so
31:29being able to innovate and create new
31:32companies that can help us do that on a
31:34fractional from a fractional perspective
31:37is essential luckily for us you know
31:39Zipcar and lyft and other companies
31:41similar in similar spaces have started
31:44to unlock that and then for me
31:46personally one of the reasons we are in
31:47the fleet space is because generally
31:50speaking that insurance policy is
31:51already established for the users that
31:53are on the ground today using these
31:54assets now when we started talking about
31:56pushing those vehicles into other use
31:59cases then it becomes an entirely
32:01different discussion where that pain of
32:03ownership comes back and we need a
32:04better solution we don't have it today
32:06so but removing that pain of ownership I
32:08think across our industries is really
32:11is really key to unlocking the sharing
32:14I would I would also maybe add you know
32:16to me slightly generalize it so
32:18insurance is kind of about dealing with
32:19rare error modes and the more samples
32:22you have the more you can kind of deal
32:24then to some extent you have to sort of
32:25blunder forward then find this rare
32:27error case and then put a patch in after
32:29that hopefully out not after like too
32:31much bad PR and the reason though that I
32:34think we're pretty confident that the
32:36sharing economy in general will be able
32:38to handle this is that you know if
32:40there's one thing that the internet does
32:41extremely well it's a very profitable
32:43private reputation review ranking system
32:46so for example Google rankings Apple's
32:48App Store Gmail spam filtering PayPal
32:50and eBay fraud protection Amazon reviews
32:52these things already happening in the
32:54cloud massive scale marketplaces where
32:56all the checks and balances rare error
32:58cases have been set up and you've got
32:59millions of people interacting and kind
33:01of sometimes trading sometimes sending
33:04meals back and forth but basically
33:05sending packets back and forth you know
33:07what we're doing is we're taking that
33:08cloud infrastructure and bring into the
33:10physical world and now rather than
33:11packets it's actually cars and houses
33:13and other kinds of things that are now
33:14moving back and forth and certainly
33:16there are new challenges here
33:17but the fundamental informational things
33:19are things that you know good software
33:20companies have figured out the building
33:23on that the first lift experience I ever
33:25I was going back to the office in San
33:28Francisco and yeah I have to admit I was
33:30a little bit hesitant at first which is
33:31no strange from the sharing economy but
33:33it's my first time doing something I was
33:34like okay this is different in the front
33:36seat and fist-bumping like right and the
33:39woman pretty quickly I learned that she
33:41was also a host on Airbnb how cool is
33:43that so I plot my the app and I'm like I
33:45find her listing I pull up her profile
33:47and she has 54 Airbnb reviews from
33:50guests from all around the world and I'm
33:52sitting there next to her and suddenly
33:53any kind of anxiety that had completely
33:55melted away right and it was like the
33:57the reputation of her as a host
33:59transferred to make me feel comfortable
34:01now in her car driving around San
34:02Francisco yes interesting we've actually
34:04seen a lot of pitches for companies that
34:06are abstracting out that you know
34:08reputation from Airbnb lyft
34:10TaskRabbit etc into kind of like a new
34:13report card you know like a like a
34:15portable reputation score so other
34:18questions I missed some other hands
34:21you're next so this is a question for
34:23Joe but the other panelists can feel
34:26free to chime in so it seems like
34:29looking forward at the demand there's an
34:33opportunity for you to actually give
34:35advice for where where there potentially
34:37is demand in a property that is not well
34:42suited for Airbnb and even as a future
34:44purchaser that you could provide data to
34:47say if you configured your house or did
34:49this type of remodel you could generate
34:51this amount of of income and help you
34:54know supplement just like the person who
34:55with the treehouse paying their mortgage
34:59I think there's stories down in for the
35:01masters that people have really nice
35:04homes and they rent it for a week during
35:05the masters and pay for their mortgage
35:07so do you see that as an emerging data
35:09service that that you guys will will
35:12help stimulate people to convert to
35:15Airbnb properties where they have demand
35:18in their area I do I kind of see it like
35:21the the Congress has the burger index I
35:22kind of see it like our our bed index
35:24right it's like you can look around the
35:26world and see where there's supply and
35:28demand it's like it's a great it's a
35:30great classic market place right you can
35:32actually see where the supply and demand
35:33starts to tip for things like the
35:36Masters in Augusta Georgia or certainly
35:39the Olympics certainly the World Cup
35:41which we just saw in Brazil where one
35:43out of every five people in Brazil will
35:45stain in someone's home on Airbnb and
35:46it's it's the is actually great for
35:49cities too in the sense that like you
35:50know hasn't to expand to take on these
35:53types of big events like the Olympics
35:55for example but that having to invest
35:58all the infrastructure right and pouring
36:00more concrete to build more rooms for
36:02people to sleep so there's a whole level
36:04that we're just starting to get into in
36:06terms of pricing data and helping coach
36:08hosts on like what's the right price at
36:10what time of the year yeah this is
36:12really I didn't think gel saw a broader
36:13trend which is basically good software
36:15we can start to invert the demand
36:16function right like you get data on
36:18other purchases aggregate them together
36:19and not just here but also in
36:20crowdfunding for example people
36:22entrepreneurs can now be told what is
36:23profitable before they build it
36:24teespring also which you just saw it
36:26does as well the product is materialized
36:28it's abstract in the cloud before enough
36:30people buy it then it's materialized
36:33that's kind of interesting you had a
36:35question when we look at the shared
36:38economy generally most of the companies
36:41that have emerged and been successful in
36:44that space are typically startups that
36:46are displacing traditional business I'm
36:49so Joey with Airbnb obviously in Travis
36:51with uber and the taxi industry and so
36:52and so forth in terms of a mindset shift
36:56that needs to happen in traditional
36:58companies like say Exxon City or even an
37:01institution like Harvard what what do
37:04that should they be thinking about what
37:05kind of mind shift mindset shift do they
37:08need to kind of be going through in
37:09order for their more traditional
37:10businesses to start to understand what
37:13the shared economy both means for them
37:14and how they can kind of start to enter
37:16that space potentially some of them are
37:19trying to adapt through leveraging their
37:20brand Harvard is a great example yes
37:22there's an X instead averaging
37:24companies like MOOC or other online
37:26portals and leveraging the Harvard brand
37:29to really push that quality education
37:31out to more people which i think is
37:32super powerful so they're smart they're
37:34gonna leverage what they've built
37:36already and and try to push their brand
37:38out there I mean at the end of the day
37:40you're teaching a physics problem it's
37:42the same physics problem but if you have
37:43a world-renowned physicist teaching that
37:46problem and solving that problem it's uh
37:48it's a much more powerful solution it'll
37:52be difficult for them to adapt though
37:53you know they some will be able to do it
37:55but like it'll be like newspapers which
37:56have the whole printing presses and
37:58stuff and then you've got a BuzzFeed
37:59that's coming in with a totally
38:00different cost structure okay looks like
38:03that's what we got so thanks very much
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