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tv   The David Rubenstein Show Peer to Peer Conversations  Bloomberg  November 16, 2016 8:00pm-8:31pm EST

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david: what propelled do to pay google is a company? who cares about his search engine? eric: i do not think google was going to be a successful. david: is it awkward when you are the ceo dealing with founders? eric: our dress code, you have to wear something. david: you have been in one of these cars and you feel safe? eric: we are doing this to save lives. david: europeans seem to not like google as much as americans do. have you resolve those issues with europe? > will you flex your time please. david: people would not
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recognize me if my time was fixed. let's do it this way. all right. ♪ david: i do not consider myself a journalist. nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a good -- day job of a private equity firm. how do you define leadership? what is it that makes somebody tick? joined at google was a very small company. in your wildest dreams did you ever imagine it would become the second most valuable company? eric: i do not think any of us did. i did not. and certainlyry seemed incredibly intelligent, a huge argument over something technical and i have not heard back of the document and a long time and i thought, i have to work with these people. i wanted to work with the
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company that would stayed in one building but today we are many buildings. david: you with the ceo of novell at the time. what propelled to take that as a company wanted to go to? eric: i actually did not interview anywhere else. he asked me to visit google, and i said who cares about his search engine? who uses search engines? he said, go visit with them. what they were doing was so way theyng and the were created so compelling that i had to be there. search engines were not that novel because there were plenty of search engine companies, so why do to think google had a search engine that was going to change the world? eric: i did nothing google was going to be successful but i did think the technology was unusually special. google headed into the new way of doing ranking. in all of the previous search engines had used ranking that was easily manipulated by business forces and so forth. larry page had invented
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something known as page rank which is a different algorithm, a different way of doing research and it had spread .irally throughout the bay area it was all word-of-mouth and i thought, what a great project. a word thate is existed before and it kind of made infinity but it is spelled differently. dated google intentionally spell it differently? eric: there was a number content to the 100 and i will spare you the details, but this is a very large number. it was named by a russian gol and it was goo too hard to pronounced so they decided it should be pronounced google. today the company is not called google anymore but it is called alphabet. david: why did they pay google as the original name and why did you change it to alphabet in terms of the parent? eric: google has always done different things. after 15 years, the role of these other companies that were
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proto-companies. we talked internally at great length about, how do you get great companies founded? the answer is strong ceos, incentive programs, boards of directors. there are other problems out of the creek create that within the context of google? that is what alphabet is. it is a holding company of which google is the best known. david: many technology companies that are well known apple, microsoft are run, the ceos are the founders. you had a different situation. you had two people that were the founders, but they want to the ceo with more experience. was it awkward to come in and be the ceo when you are dealing with the founders that do not have the ceo title? eric: in their case they had been searching for someone to work with for 16 months. they would have each of the candidates do something with
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them for the weekend, so that we go skiing with one of them in the go play sports with the other want to see if they were compatible. when i met them, we all have similar backgrounds as computer scientist but it was an immediate click. i always knew with what happened with steve jobs it was their company in my job was to make their company successful. david: when you were interviewed, was in the normal interview? eric: i walked into their office and it was a tiny office in this incredibly crowded building, which google still has by the way, and this tiny little office they have a lot of food in my biography on the wall. they proceeded to ask each and every question that was possible against the biography. i had never been so thoroughly questioned and i just gone to visit. they came to a product i was building at novell and they said , this is the stupidest product ever made. i had to respond to that. david: you did not think you are going to get the job? eric: i did not realize it was a
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job interview. as i left the building which was curiously a building i had when i worked at the sun years earlier, to show you how history repeats itself, i knew i would be back. david: when you did come back, a small company when you joined, did you realize that advertising would be the medium to which you would actually make the company grow? no, i was convinced the advertising strategy they took were not work. when i was ceo i was very concerned that something was wrong and i asked them to audit the cash accounts to make sure people selling these ads and what we learned was these target ads worked incredibly well, even though they were these little text ads and that discovery and in the subsequent augur the improvements which allowed for auction and so forth, which were done by a possibly young a creative engineers who i saw reviewed is experimenting with things, created what is today
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google. david: the culture was unusual at the time. others of any later did but it is a culture of do what you want, where what you want, sleep in the office if you want. eric: we do have a dress code. you have to wear something. david: ok. eric: we have problems were engineers would move in and put cots on the floor and we would explain, you can do anything you want but you cannot live here. you have to have a bed somewhere else. we famously encourage people to bring pets. we had a lot of rules about the pets but no rules about the people. you had keep your pet over here. david: what about the food? event free free for everybody. what was the purpose? is thehe comment was free food changed everything but the real reason we had free food is because many of these things are marketed, but there was a serious behind them. food, case of the families eat dinner together and
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he wanted the company to be a family, and is so you had people with proper, good food, breakfast, lunch and dinner. they would literally work and eat and work in whatever way made the most sense. they invented something called 20% and the idea is for each of the employees, especially the engineers, if they are interested in something, they can spend 20% of the time on whatever they are interested in. david: how could you run a company that way? eric: that a lot of these engineers to have conversations about what you think? anything? i will give you another example, larry page was looking at our ads as they came out and he had studied them and he put a big sign on the wall and he wrote "these ads suck." i was looking at this and he said -- i said, this is another
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stupid thing. you have an ad steam coming manager, a plan. so, this was friday afternoon. i come in monday morning and a completely different set of teams had seen the sign, invented over the weekend what today is the underlying out of google and delivered it on monday morning. that could not have occurred with such culture. david: 20% time, have you got be businesses that came out of the 20% time? eric: two most interesting examples are maps, the at system components. most people believe the 20% time is the source and re-creativity and what is a large company. david: one time i think you told me previously that you were out of the office and then you can back to her office and somebody had occupied your office. eric: it is important to remember that at the time google's culture was seen as unusual and i knew this and i was always careful to not commit a faux pas in a culture.
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in if, one morning i walked and my assistant has this look on her face, like something that has happened. i walk into my offense which is 18 feet by 12 feet and here is my new roommate. he has moved himself in it is working and so forth. i did not know i was going to have a new roommate as i am the ceo. i want you to tell me these things. i said, hello, who are you? i go, ok. he goes, nice to meet you. i said, why are you here? your office was not occupied. you are never here and i was in the six person office and it is too loud. i thought, what to say to this? say, get out of my office, they are going to fire me or something. i thought, ok. did you ask permission?
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he goes, yes, i asked my boss and he said it was a great idea. i said, ok. we sat next to each other. he would program and i would do my work, literally next to each other for a year and we became best friends. david: do you think united states government is better at cyber terrorism and other governments are against us? eric: the one i worry the most about is russia.
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david: i just want to talk about your background. your father was an engineering professor? eric: international economics. david: you grew up in virginia? eric: yes. david: what made you want to be
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an engineer? eric: i was a boy at the time of the space program where everyone wanted to be an astronaut. in my high school they had a terminal with paper tape and my father had the good thought to sort of get one for our house which is highly unusual at the time, so i was spent every easy working in reprogramming. today, if i was a 15-year-old home i would have five personal computers and the super network and a sound blaring out of the speakers. david: he went to high school in virginia, must've done pretty well to get into princeton? eric: well, it was easier back then. david: you knew you wanted to be an engineer at princeton? eric: i actually applied as an architect and when i got to princeton i discovered i was not a very good architect but it was a much better programmer. and that ias kind was advanced enough that i could be able to skip the introductory courses and go straight into the advanced courses in the graduate courses. david: you must've done pretty
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well because then you got a scholarship to go to berkeley and get your phd. was it hard to move across the country? eric: no, but to give you an example of how naive people were back then, i decided i wanted to move to california because i heard it was nice and sunny beaches but of course i went to the wrong part. this is of course before google maps. yourked at bell labs where next which is the basics of computing today, i was a junior programmer and i worked at xerox for the workstation and screens and many of the editors and many of the networking things were invented. to beunusually fortunate as a young person, and this is to doing that kind of research. from there i would work on micros systems. david: from there you were recruited to novell? eric: i was at the sun for 14 years, novell for an approval for 16 plus. david: as the company became
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bigger and bigger, it dominated the search business, 90%, more or less. why did google say, we want to do other things. we do not want to just be in the search business. let's talk about a few of them. eric: google's motto was not only search the web, but all of the world's information. out with all of the hiring we will able to do and begin to solve problems and became very interested in maps. developing their own maps and was hugely successful. we bought a company called youtube which is incredibly successful today, another form of intimate -- information. i can go on and on. in some cases we bought little companies that we grew like a workers and in some cases these were technologies we grew ourselves. the whole idea was to integrate around information. david: at some point for five years ago, it became interested
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in solving other problems, not just information problems but problems for digital technology could make a material difference. the most obvious is self driving cars. we have been working on that as a research project. david: you feel safe when you are driving? eric: i get on the car on the the most obvious is self driving cars. highway in california and it is driving and i decided, it is following too close and i complained to the engineer who said, no, no we are exactly right and of course they got it right. he gets off of the freeway and parks itself and all of that. in another case i am driving in the self driving car and it turns left with a mother and a child crossing the street illegally. i am going, oh no this is the movie we see, and it stops. the technology works. it works because it has a very powerful laser imager which sees
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more accurately than we do. imagine a car that has vision all around it than just in front of it. 32,000 people scheduled to die this year in america, we just do not know who they are. that is how bad this is. imagine if we could reduce out by half or one third or one quarter. most of the accidents are driver induced. we may be able to make a driving accidents a very rare event. david: you have been involved in artificial intelligence better known as ai. is it dangerous for humans or is it going to be helpful? eric: i would say this extraordinarily useful. let me give you examples. today, artificial intelligence is being used to do things which are hard for humans to do which is data. there is a disease called diabetic neuropathy. we can detect that 99% of the time.
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why are we so good at it? .e see more eyes we can train the computer. there is a lot of reason to think this kind of intelligence will allow things which are either repetitive or require deep pattern analysis will be much, much better. david: do you think the united states government is better at cyber terrorism and other governments are against us? u.s. government has never acknowledged it plays an active role in cyberspace and is active offensively, although the people who might be our targets certainly claim we have been doing this. the consensus of people that you got no one knew the details, which includes me, is america is very good at this, but other company -- countries are as well. the one i worry the most about .ight now is actually russia if you look at their actions, they have done a number of very publicized invasions, tax and alterations which can only be
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andrstood as cyber activity they are not shy about it. they do not mind people knowing about it. this must be part of their strategy. seem to noturopeans like google as much as americans do. have you resolve those issues with europe? eric: the core issue is the european governance model is not set up to look at global companies.
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♪ david: a few years ago you gave up the position of ceo. now you are the executive chairman of alphabet. in that role you have become a technology advisor to the president of the united states, secretary of defense and the well-known commentator and advisor on technology to many people. the human joy this role? eric: i do. it is important in life as you get older to got to the same thing your entire life. there are better people now doing the work i used to do and this is something i can uniquely do because of the background i have. what always hard to know to get off the stage and joined the next stage, but from my perspective this is the right time and a decade is a perfectly good amount of time. david: you have the native visor
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to president obama. is he a person that understands technology? eric: he does now. when he started, i do not think he knew a lot about technology but he is educated himself a lot. he appointed a group of scientists advisors and two spent a lot of time listening to these signs, the impact of technology and he is also become very successful and popular in the new forms of social media. the fivethat today, most bible companies are technology companies. --is not just an interesting five most successful companies or technology companies. it is not just an interesting thing but a core growth of share growth and financial growth. david: peace five companies i assume are apple, google, facebook, microsoft and amazon. eric: that is correct. david: it seems when you pick of the paper they all want to be the business somebody else is in. eric: that is called competition.
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david: everybody wants to have driverless cars, do you expect them all to be in everybody else's business? eric: what i love about this question is, this is how it is supposed to work. people are supposed to identify business opportunities and they are supposed to produce a better product. i believe our products are better than our competitors, but our competitors keep trying and i can assure you in areas we are not quite as strong in market share, we have a new idea, you approach we want to solve the problem in a new way. in the tech industry you cannot do the exact same product as somebody else that is already there, so why would you switch? the switching cost is too high. you have to come up with a new idea, new approach. for us, we have decided the new idea is the use of machine intelligence to be an assistant. everything we are doing will make you smarter because it anticipates and helps you and make suggestions. larry says this is going from
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search to suggest. we want to go from you telling us what you are searching for to make suggestions for what you are interested in. david: you have been a visible spokesperson for google around the world. let's talk about your. the europeans seem to not like google as much as maybe americans may be because it is american company. have you resolve those issues? eric: we have not been able to resolve those issues in europe. we have more than 10,000 employees in europe and love europeans. they are incredibly smart, capable. many of the products you use in america were developed partially or completely in europe. the core issue i think for the european governance model and with the universities are set up, venture capital is not yet set up right, not set up for these global companies. they have every piece, every tool that they need. they have the people, the discipline, the educational system but they have not congealed it together. we are furthermore funding a
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number of innovation banks and also doing her own venture capitals. we need europe to be more competitive against the american companies. david: one of the effects of building a successful company is that you have made a fair a lot of money by any normal human standard, but it is hard to spend that amount of money in your lifetime. what have you decided to do with it? eric: i am most interested in climate change and science. science is what is gotten us to this point, and so my philanthropy has been focused on the underlying issues around environmental causes, philanthropy and oceanography. oceanography is interesting because there is a most no private philanthropy in an and yet there is a mass extinction going on in the ocean where we are losing most of the current lifeforms. humans areworld's dependent for fish for daily food.
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all of the carbon we put into the air goes into the ocean, so even small changes in how the ocean works could have debilitating impacts on society. david: what would you like to do in the next 10 years and what would you hopefully like to have as your legacy? eric: hopefully i do not need to answer the legacy question, but from my perspective what i'm doing now is the most interesting. i do not want to work in any government. i have seen government up close to have that i'm not a government person but i would like to make sure that the governments around the world promote technology, innovation and make the world a better place. i am very concerned this is happening so quickly that governments, which are designed to move slowly will either miss out on opportunities or worse, pass laws that prevent things from happening. every once in a while we will have a near miss so i like working on that. i personally believe the learning and ai technology is going to be transformative and far deeper. david: you are a leader in the
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science and technology world. do you think leaders are born, may become educated? eric: leadership is a little bit of both. you have to have some skills but it can certainly be learned. i also believe as leaders you need to do something very well. that sort of stereotype of a general manager is not how the world works today. now the managers are uniquely good at something and then they learn other things. i do not think it matters for you start but i think you need to be incredibly good at that one thing and then you brought in your skills. discipline, hard work and loving what you do will get you very far. ♪
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♪ >> she has been one of the most powerful women at google from literally the very beginning. in 1998 two-on-one on your knowers set up their first office in her garage. susan majewski became employed never 16 and became the starter of the advertising business. buyaired sure boss to youtube for $1.65 billion. on the 10 year anniversary of that acquisition youtube was in the off of the


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