 Live from Silicon Valley, it's theCUBE. Covering Mobile World Congress 2017, brought to you by Intel. Okay, welcome back everyone. We're live here in Palo Alto, California for SiliconANGLE Media's theCUBE special two-day coverage of Mobile World Congress in Barcelona, Spain. As people are starting to get ready to take that nap to go out all night in Barcelona after they had their tapas and wine, we're here in California breaking it all down. Two days of coverage. This is end of day two in Spain. We're in the middle of it here. And breaking down the analysis, covering all the news, commentary, identifying the trends and talking to the folks here in the Bay Area that can add value to the conversation. And our next guest is Bob Stefansky, who's the managing director of E-Lab, located in Palo Alto, venture capitalist, making investments and really a key player, bridging Silicon Valley with Michigan Motor City here and bringing the two worlds together as the autonomous vehicles in the automotive industries under massive disruption and change. And the car companies know about it and they're not afraid of it. Ford's here, GM's here, they're all here. And now we have Bob Stefansky here in theCUBE. Bob, good to see you. Thanks for coming in. John, thanks for having me on. It's good to be here. So I love this story and I think this is not really well documented, but this is the beginning of what's been happening for a while, kind of an outpost to Michigan and Motor City. You have some satellite offices in Palo Alto or Silicon Valley that close to Stanford, close to Cal, close to a lot of the research. But now it's a change where you're starting to see Ford, GM, all the car companies, BMW, Big Venture Fund as well, all here in Silicon Valley because the software defined blank is everything. So software defined radios in 5G, big story at Mobile World Congress, software defined networks. The world is software driven, so they're here. So you're bridging the investments trying to identify the key trends to help identify those new game changing technologies that's going to bring a whole new world together. And certainly Intel and others are changing the networks, creating an end to end architecture digitally to bring autonomous vehicles, immediate entertainment, smart cities, a smart home. And we're seeing Alexa, Google's got their device and you're seeing smart cities. So what's the big bridge being built around? I mean, obviously the cars themselves are changing. What is this bridge between Silicon Valley and Michigan Motor City? Obviously that's a big part of Uber and whatnot. Yeah, absolutely, John. I grew up in Michigan. I grew up in the days before, there was a single chip, I think, in cars. I worked for General Motors when I was a summer intern in the early 80s in the engineering group there, and there was a very distinct automotive culture. I then fast forward 20 years and I'm in Silicon Valley. I've spent the majority of my career here in Silicon Valley doing Silicon Valley things. So software, enterprise software was where I spent most of my career with typical software. We are now bridging these two things. We're bridging the automotive industry as I think we all know, anyone who's paying attention, the car now has a lot of chips in it, right? And it's about to have a lot more. The car is becoming a data center on wheels, right? It's becoming another mobile device, a very big mobile device. And the really neat thing is we're the only venture fund with offices and partners located in both places. We have fairly deep networks and connections into the whole Michigan ecosystem back there in automotive. And of course, we're out here in Silicon Valley as well. And it's been fascinating to see after spending, after having that early childhood experience, young adult experience as I was growing up in the auto industry, and really kind of the heyday of the auto industry, maybe the beginning of the decline in the 70s and early 80s, and then having sort of spent the career working on the latest, greatest, newest technologies as they've come along out here in Silicon Valley. This is a fascinating, fascinating time to see these two now finally sort of merging together with autonomous vehicles. You know, one of the things that we're seeing in over the course of Intel is the bellwether and they always have the long game going and make the big bets in autonomous vehicles and virtual reality is that showcase. What I find interesting when I get your thoughts on it and reaction to is that I shared on my Facebook feed, a post by autoblog.com that says race for autonomous cars is over in Silicon Valley. And they were kind of pointing to kind of the obvious things that people are seeing today, which is, you know, kind of myopic and narrow in my opinion, but obviously Apple kind of tapped out a building a car and I think a lot of people didn't thought, oh Apple should build a car, they built a watch, why not build a car. I'll see, they forgot about Teslas here, right? So I'm not sure what they're thinking. But I think they missed the point that it's bigger than the actual car. So can you share some color commentary around the mindset of Detroit? Because we're seeing that certainly Ford's not looking the other way. They have their finger on the pulse. Others do as well. What is the general mindset for the folks in both ecosystems and how are they working together right now? Sure, that's a great question, John. And you said it right at the outset. Look, all the autos are here and they're here in our backyard in Palo Alto, right? They've all really sort of migrated here over the last five, seven years probably. GM is here, Ford is here in a big way. BMW is here, Mercedes here. So they all obviously recognize that the car is becoming all about technology and if they're going to be a key part of that in the future, they need to be out here and they need to be understanding that. On the other hand, making cars is hard. Making cars is not a simple thing. And this is where 70% of auto research in the US is still happening in Michigan and the Detroit area. Michigan has a very high density of automotive engineers and integration engineers and integrating IT with the autos and so forth. So there's a lot of talent there. There's a lot of experience there. I think, frankly, probably the biggest and most interesting thing in this bridge is going to be watch the cultures, either integrate or not. And there's a lot of talk about who wins and the autos can't move fast enough and that may be the case, but we'll find out. I'm not so sure. They know how to compete and there's a lot of smart people. There's no way that Detroit's going away. I mean, to me, my view is they're very solid and I think they got good self-awareness and I think if you look at the signals, I would say that I'm pretty confident. It's just a matter of how they get reconfigured in this new value creation model around 5G and whatnot. But I want to get your thoughts on another point, which is if you look at what the iPhone did, that created a new class of app developer and that, I would call them, on one hand, artisan developers, people who are composing, much more design centric, obviously, and then you still had the hardcore developers and that was lower in the stack but also other harder problems. But when you talk about automotive, there are some serious technology challenges that require, I won't say old-school engineering, but really hardcore engineering. You're talking about wireless, which is a physics issue. You have all kinds of policy challenges but really hardcore engineering and software development. I'm not discounting what the app guys are doing but certainly there will be plenty of apps. I call that more the finishing touches in say cars, for instance. What are some of those technologies because that's really where you need to see the classic doubly computer science, physics gurus, the real PhD kind of guys. What's your thoughts and what trends do you see in that hardcore area? Yeah, absolutely. I mean, look, we all know that cars are no longer about just axles and engines and those are hard things, those are, but I think when we make this transition to highly automated, to fully autonomous vehicles, the technologies that are driving that, the most, the fundamental technologies and the really hard stuff are around sensors, right? We're developing, we're constantly developing newer, faster, better, further range, more precise sensors. So we're talking about LiDAR, we're talking about, we're talking about, of course, mobile eye and what's happening with the camera and vision processing. We're talking about even radar, a 1940s technology that actually is changing very fast. There's a lot of interesting things happening. Yeah, I have an old technology coming back down and getting rebooted with cloud computing and whatnot. Yeah, absolutely. Well, and then connecting all that to the cloud, right? I mean, I think the hardest, and I think we talked about this before, the probably still the single hardest piece and the point of the spear on this is artificial intelligence, right? At the end of the day, it's the same stuff that's driving virtual reality, it's the same stuff that's driving a lot of different things right now, right? But it's also true in self-driving cars. These things, when you make a car, first of all, it's got to be safe. It has got to be safe. Department of Transportation, sort of the government regulatory interest is in safety. To make a car saved, they have to be tested, tested, tested, tested. What's that about? Well, when Autonomous takes over, it's no longer John Furrier driving that car, it's the AI driving the car, right? How do you make that AI smart? Right, this is fundamental deep learning. This is fundamental deep learning that the guys at Google know as much as anybody in the world in Facebook and all that we all know about the arms race and artificial intelligence, but that's at the core of what's happening in self-driving vehicles as well. And most of that talent, the talent is spread out, it's all over the world, but there's a lot of it out here, and they know they need to have those engineers. What's interesting about your background, you mentioned when we started this segment, you have an enterprise software background in Silicon Valley, and you've been very successful. It's interesting, we were talking yesterday, and we kind of validated this morning on our opening segment around Mobile World Congress. It's a two show game right now. It's kind of a bipolar show. You've got devices, the new phones, the glam and the sizzle, Samsung, and so on and so forth, LG, Huawei, and then you've got the telco show, which is the telcos trying to figure things out, but what's interesting is what we noticed is that there's really a trend between enterprise computing concepts, network data center with consumer clash. So there's a direct collision question between the telcos which serve as consumers, but the infrastructure challenges are all enterprise. And the number one thing that's key there is integration and ecosystems. Right. So you kind of have the right background for this. So you want to get your thoughts on ecosystem integration concepts where a lot of boats in the harbor, so rising tide will float all boats. We see that as a trend, but also integrating. You mentioned the testing, so it's not one company's going to do all this. It's not one company that's going to do all this. And in fact, it's going to be one of the more complex integrations we've ever undertaken, right, because we're going to have to have those automotive engineers. We're going to have to have those, you know, the software developers. We're going to have to have the AI guys. We're going to have to have the sensor guys. And it's all going to the cloud ultimately, right? And don't forget GPS. You got GPS and that you've got, you got a lot of connectivity challenges, right? And of course, 5G when 5G comes online is going to be a critical part of this as well. You're also going to have smart cities. You're going to have infrastructure embedded in the environment, and in particular the highly dense areas is where it'll happen first. It's not going to, you know, rural America and so forth. They're going to be probably driving their cars without the embedded sense for a while. But there are a lot of different components. We had a CTO on early before Val from Burcelli. He was talking about the cloud native architecture really plays well in this market because it's not sort of the one car. It's about the one cars in relation to thousands of other cars that are self-driving. So it's a multi-touch data equation. All right Bob, final question I want to get to you is, what are you investing in? What are some of the things that you're looking at? Can you share? I know some of the stuff is pretty stealthy on your end because it's pretty high end, but can you share any, show a little leg on the investments you've made or? You bet, you bet. Yeah, John, we're, some of the probably the coolest stuff I can't talk about right now, you're right. But hint, it's in some of the things I've already talked about. We're certainly in artificial intelligence. We are, we have a portfolio company in that. We're looking at others in better sensors. Some of the sensory areas I talked about, we are in the process of looking at companies. We have investments in the connected space, not autonomous but connected space, which is also going to be a very big and important part of this. Company called Aperia, right up here, that is at the end of the day, they're tire inflation, but it's all about data. They do automatic tire inflation. Connected, they'll be connecting every fleet in America and so we're. And so it's boring little efficiency areas that really yield a lot of cash. I mean, we just talked about the guests, I'm going to waste, Optimus, waste disposal industries. Absolutely. Little things that are boring billion dollar innovations. Little things, little things, very big problems, right? It's where you can marry things like tire inflation on commercial fleets with data, with heavily, with lots of data that we never had before. And then apply artificial intelligence to that, to learn what's happening and map an entire fleet or multiple fleets nationwide, worldwide, collect all that data and start to correlate and understand what, those are the problems that are where a lot of value can be added actually with these technologies. It's super interesting and I think you got a great opportunity. Congratulations, great to see the bridge between Silicon Valley and Michigan, really Motor City. And I think that's, anecdotally, means automotive, but it's probably other bridges you're connecting to. Bob, thanks for coming in and sharing. Final question for you while we got you, you got a little bit more time. What premises are you betting on? I mean, everyone has a premise, and you mentioned before you came on camera, that one of your premises is that automotive won't miss mobility. What other premises are you investing? What theses are you building around? You know, we're, well, look, we're, you're talking about autonomous vehicles or more general for the bridge to bridge fund and how you're looking at the future of autonomous driving and the connected ecosystem around it. What are the premise? Yeah, yeah, yeah, yeah. Well, look, the premise there is that, you know, we're in for what I think is going to be the biggest, the biggest change in the biggest, the biggest thing to happen in transportation ever, but it's not just transportation. So we're looking at, at areas that are not, you know, autonomous per se, but that are going to be fundamentally impacted. So services, you know, we're talking about things like insurance, talking about all the, you know, the shared services that are going to come out of this. Medicine is going to probably change and there's some interesting plays there. There are, and so all of this sort of periphery that is going to be disrupted, we're trying to look five years, 10 years ahead and look at how life is going to change, people's individual experiences are going to change, and how, you know, new services, in particular shared services are going to be enabled by autonomy. Bob Sofanski here inside the queue, breaking down his commentary and direction of his investments, bridging Silicon Valley with Michigan, Motor City, or really looking at the autonomous future of vehicles and transportation. This is theCUBE, I'm John Furrier. We'll be back with more coverage and analysis of Mobile World Congress 2017 after this short break.