 Live from Las Vegas, it's theCUBE, covering InterConnect 2017, brought to you by IBM. Okay, welcome back everyone, live here in Las Vegas for IBM InterConnect 2017. This is theCUBE's coverage of InterConnect. I'm John Furrier with Dave Vellante, my co-host. Our next guest is Deon Newman, CMO of IBM Watson, IOT and Slava Rubin, the founder and chief business officer of Indiegogo. Great keynote today, you're on stage. Welcome to theCUBE, Deon, great to see you. Thanks for having me. So I got to first set the context. Indiegogo, very successful crowdfunding, you guys pioneered, it's now pretty obvious, now looking back, this is creating so much opportunity for people starting companies, whether it's labor of love or growing into a great business, so congratulations on your success. What's the IBM connection? Because there was some stuff on the tweets, I don't want to break the news, but you guys are here, share the connection. What's the packaging, why is IBM and Indiegogo working together? Yeah, so back up to 2008, we launched to be able to get people access to funding and over the last several years, we've done a pretty good job with that, sending over a billion dollars to over half a million entrepreneurs around the world. And more recently, we've had a lot more requests of Indiegogo, can you do more? And we knew that we couldn't do it all on our own. So we partnered first with Arrow to be able to bring these ideas more into reality around components and engineering and supply chain. And we knew we needed more in terms of, these are IoT products, so they need to be smart. And they need software, so we were really excited to be able to announce today the partnership with IBM around everything, IoT clouds, security, and being able to provide all the blockchain and any other elements that we need. Dean, I want to ask you to get your thoughts on, we have the Watson data platform guys on earlier in the segments, and the composability is now the normal around data. This brings the hacker maker culture to IoT, which if you think about it as a sweet spot for some of the innovations. They can start small and grow big, is that part of the plan, is that? Yeah, I mean, if you look at what's going on, we have about 6,000 clients already working with us in the IoT space. They tend to be the big end of town, whether it be a Daimler or Airbus, or whether it be Kone, the world's biggest elevator company or ISS, the world's biggest facilities management company. So we were doing a lot of work up there really around optimizing their operations, connecting products, their wrapping services around them so they can create new revenue streams. But where we didn't have an offering that was being used extensively was in the startup space. And when we saw what Indiegogo had been doing in the marketplace, and when our partner Aro, who is Slava, said has really built up an engineering capability and a component capability to support these makers, it was just a match made in heaven. For an entrepreneur who needs to find a way to capture data, make that data valuable, we can do that. We have the cloud platform, we have the AI, et cetera. It's interesting, we were just at the Strada, we have our own big data at Silicon Valley event just last week, and the big thing that came out of that event is finally the revelation, this is probably not new to Slava, what you're doing is that the production under the hood hard stuff that's being done is in some ways stunting the creativity around some of the cooler stuff, like whether it's data analytics, or in this case, starting a company. So Slava, I want to get your thoughts on your views on how the world is becoming democratized, because if you think about the entrepreneurship trend that you're riding, there's a democratization of invention, right? There's a democratization, this is the creative, it's the innovation, but yet there's all this hard stuff that's like what's called production or under the hood that IBM's bringing. What do you expect that to fuel up? What's your vision of this democratization culture? I mean, it's my favorite thing that's happening. I think whether it's YouTube democratizing access to content or Indiegogo democratizing access to capital, the idea of democratizing access to entrepreneurship between our partnership just really makes me smile. I think that capital was just one of those first points and now they're starting to get the money, but lots of other things are hard. When you can actually get artificial intelligence, get cloud capabilities, get security capabilities, put it into a service, so you don't need to figure all those things out on your own, so you can go from a small little idea to actually start scaling pretty rapidly, that's super exciting. When you could be on Indiegogo and in four weeks get 30,000 backers of demand across 100 countries and people are saying we want this, it's good to know that you don't need to start ramping up your own dev team to figure out how to create a cloud on your own or create your own AI. You can tap right into a service that's provided, which is really revolutionizing how quickly a small company can scale. So it proliferates more entrepreneurs starting because they know there's more accessibility, plus it improves their potential for success, which in the long run just means there's more swings at the bat to be able to have an entrepreneur succeed, which I think all of us want. Explain for the audience how it works a little bit. You got the global platform that you built out. Arrow brings its resources and ideation, IBM brings the IoT, the cognitive platform. Talk about how that all comes together and how people take advantage of it. Sure, I mean you could look at it as one example like Waterbot. So Waterbot is an actual sensor that you can deploy against your water system to be able to detect whether or not your water that you're drinking is healthy. You're getting real time data across your system and for some reason it's telling you that you have issues, you can react accordingly. So that was an idea. You go on Indiegogo, they post that idea and they're able to get the world to start funding it. You get customer engagement, you get actual market validation and you get funding. Well now you actually need to make these sensors, need to make these products. So now you get the partnership with Arrow which is really helpful because they're helping with the engineering, the design, the components. Now you want to be able to figure out how you can store all that data. So it's not just your own house, maybe you're evaluating across an entire neighborhood or as a state you want to see how the water is for the whole entire state. You put all that data up into the cloud, you want to be able to analyze the data rapidly through AI and similarly this is highly sensitive data so you want it to be secure. If Waterbot on their own had to build out all this infrastructure, we're talking about dozens, hundreds, who knows how many people they would need. But here through the partnership you get the benefit of Indiegogo to get the brilliant idea, to actually get validated. Arrow to bring your idea from back in the napkin into reality and then you get IBM Watson to help with all of the software components in cloud that we just talked about. Great and how did this get started? How did you guys fall into this and how did it manifest itself? So can I tell a story? Go for it. So I love this story. So Slava's explained at the front end of this it was really a partnership of Arrow and Indiegogo that came out of the need of entrepreneurs to actually build their stuff. You get a funder and then you say, oh boy, now I've got a bunch of orders, how do I now make this stuff? And so Arrow had a capability of looking at the way you designed, looking deeply at it with their engineers, sourcing the components, putting it together, maybe white boxing it even for you. And so they put that together. Now, we're all seeing that IoT and the connected products are moving from just connection to actually generating data and that data having value. And so Arrow didn't have that capability. We were great partners with Arrow. When we all looked at it, the need for AI coming into all of these products the need for security around the connection, a platform that could actually do that connection. We were a logical map here. So we're another set of components, not the physical, where the cloud-based components and services that enable these connected devices to set. If you think about the impact, I mean it's mind-boggling what the alternative, you mentioned that the example you gave, they probably might have abandoned the project. So if you think about the scale of these opportunities, what the alternative would have been without an Indiegogo, you probably have some anecdotal kind of feeling on this. Any thoughts on what data you can share around, you have any kind of reference point of like, okay, we funded all this and 90% wouldn't have been done or 70% would have been done. Do you have any flavor for what's here? Hard to know exactly. Obviously many of these folks that came to Indiegogo, if they could have gotten funded on another path earlier in the process they would have, Indiegogo became really a great choice. Now you're seeing instead of being the last resort, Indiegogo is becoming the fourth resort because they're getting so much validation and market data. The incredible thing is not to think about it at scale when you think about 500 or 700,000 entrepreneurs or over a billion dollars and it's in virtually every country in the world. If you really just look at it as just like one product. So like Flow Hive is just one example. They've revolutionized how honey gets harvested. That product was bought in almost 170 countries around the world. And it's something that hasn't been changed in over 150 years. And it's just so interesting to see that if it wasn't for Indiegogo, that idea would not go from the back of the napkin to getting funded. And now through these partnerships they're able to realize so much more of their potential. So it's interesting the machine learning piece is interesting to me because you think the seed funding which is great product market fit as they say in the entrepreneurial culture is validated. So that's cool. But it could be in some cases small amounts of cash before the next milestone. But if you think about the creativity impact that machine learning can give the entrepreneur with through on their discovery process. So early stage that's an added benefit to the entrepreneur. Absolutely. Yeah, great example there is again smart plate. Smart plate is trying to use the combination of weight sensing plate as well with photo detection if image detection software. The more data it can feed its image detection the more qualified it can know is that a strawberry or a cherry or is that beef, right? And we take that for granted that our eyes can detect all that, but it's really remarkable to think about that instead of having to journal everything by hand or make sure you pick with your finger what's the right product and how many ounces. You can take a photo of something and now they'll know what you're eating, how much you're eating and what is the food composition. And this all requires significant data, significant processing. Well, I'm really pumped about that. Congratulations, Dion, on a great deal. I love the creativity. I think the impact to the globe is phenomenal. Think about what the game changing things that are coming out. Just loving how to ask you and Dion if you could weigh in too. Maybe you have some of your favorites. The craziest thing that you've seen funded and the coolest thing you've seen funded. I mean, cool is hard because it's kind of like asking, you know, well, who's your favorite child? I have like 700,000 children. I'm not even Will Chamberlain and I like them all, but you know, it's everything from an activity tracker to security devices to be able to see what the trend is 24, 36 months ahead. Before things become mainstream today, we're seeing these things three, five years ago. Things are showing up at CES and you know, these are things we get to see in advance. In terms of something crazy, it's not quite IOT, but I remember when a young woman tried to raise $200,000 to be able to get enough money for her and Justin Bieber to fly to the moon. That's crazy. That didn't quite get enough funding, but something that's fresh right now is Numuno Loops is getting funded right now on Indiegogo Live. And they just posted less than seven days ago and they have Lego compatible tape. So it's something that you can tape onto any surface and then the other side is actually Lego compatible, so you actually put Legos onto that tape. So imagine instead of only a flat surface to do Legos, you could do Legos on any service, even your jacket. It's not the most IOT-esque product right now, but you just ask for something creative and there you go. That's a creative. I think once you go, we'll change that and Justin Bieber and the conversation, I'm out. It's a mic drop moment there. Keep it a fresh. Keep it a fresh. Slava, how does Indiegogo sustain itself? Does it take a piece of the action? Does it have other funding mechanisms for the platform? Yeah, so the beautiful thing about Indiegogo, it's a platform and it's all about supply and demand. So supply is the ideas and the entrepreneurs and demand is the funders. It's totally free to use the website and as long as you're able to get money in your pocket, then we take a percentage. If you're not taking any money into your pocket, then we get no money. As part of the process, you might benefit from actually not receiving money. You might try to raise 100 grand, only raise 31 and learn that your price point is wrong. Your target audience is wrong. Your color is wrong. Your bomb cost is too high. All this feedback is super valuable. You just saved yourself a lot of pain. So really it's about building the marketplace. We're a platform. We started out just with funding. We're really becoming now a springboard for entrepreneurs. We can't do it all ourselves, which is why we're bringing on these great partners. And you know what, we've done just to add to that because I think it's a relevant part here too. We've actually announced a freemium-based service for the entrepreneurs to get onto the cloud, to access the AI, to access the services. As a starting point, it's a complete freemium model. So they can get started very low, very low entry and obviously scale as they grow. What do you call that? Is it IBM IoT freemium or is it? It hasn't got a name specifically to the freemium element of it. It's just a Watson IoT platform available on Bluemix. Right, so it's like a community addition of Watson. So, Dion, new chapter for you. I saw a good quarter for mainframes last quarter. It's still drafting off your great work. And now you've shifted to this whole new IoT role. What's happened like? Relatively new initiative for IBM building on some historical expertise. But give us the update on your business. So about 15 months ago, we announced a global headquarters that we were going to open in Munich and we announced the Watson IoT business which brought together a lot of IBM's expertise and a lot of our experience over the years through Smarter Cities, through the Smarter Planet Initiative. We'd been working the internet of things but we made a three billion dollar commitment to that marketplace that we were going to go big and go strong. We've built out a horizontal platform, the Watson IoT platform. On top of that, we've got market leading enterprise asset management software, the Maximo portfolio, TriRiga for facilities management and then we have a whole set of engineering software for designing connected products as well. So we've built out a very comprehensive, industry vertical aligned IoT business. We added last year, we went from about 4,000 to about 6,000 clients. So we had a very good year in terms of real enterprises getting real outcomes. We continue to bring out new industry solutions around both connected products and then operations like retail, manufacturing, building management, telco, transportation. We're building out solutions and use cases that leverage all that software. So the business is going well. We officially opened the Watson IoT headquarters three weeks ago in Munich and we're jam-packed with clients coming through that building, building with us. We've got a lot of clients who've actually taken space in the building and are using it as a co-laboratory with us to work on PSEs and see the outcomes they can drive. All right, D.N. Newman with IoT, Watson IoT platform, Slava Rubin founder of Indiegogo, collective intelligence is cultural shift happening. Congratulations, crowd sourcing and using all that crowd funding. It's real good data, not just getting the entrepreneur innovations funded, but really using that data and writing your wheelhouse, IoT. Thanks for joining us on theCUBE. Appreciate it. More live coverage after this short break. This is theCUBE live in Las Vegas for IBM Interconnect. We'll be right back. Stay with us. Thank you.