 Should we plan on meeting at the front around one time? 330, okay. 330? Okay. It's all I have. I have a 30, so I'm guessing it doesn't. Yeah, say 334, I'll text you or... Sorry, I'm cardless, but I'm 35, but that sounds good. I was looking out, I've gone off the card. Should be okay. Hopefully we'll miss rush hour coming out. Are you basically in China? What we're gonna do is we're gonna have another card that's gonna take us away to the city. Okay. She would do the wrap around. Got it. So, I'll set the logistics. I'll set the logistics. It's an interesting low... So you guys aren't driving? Yeah, yeah, yeah. There's a car. Oh, okay. It's a van. Oh, okay. Well, I thought you were literally behind the wheel drive. What's the feel of the inside? From the inside, the kind of thing you're worried about. Do you ever drive when you're in China? I do, in Shanghai. In Shanghai's a little better. Yeah. Yeah. It's just like driving to work. I visited Shanghai last year for the first time. There's a great Vietnamese restaurant in the French Quarter. Often? Yeah, I don't know if you've ever tried it, but they fly and push for this every day. I forget the name of it, but there's only one in that. What's the name of it? Is it one of the fancy ones? What's the fancy one? It's got a little patio courtyard area. And it's fairly authentic Vietnamese cuisine. I'm trying to remember if there were some fusion dishes. Yeah. But there's only one in that area there. It's good. You should try it. Do you remember the name? Yeah. Yeah. I don't know if you make it down in that area, or is it so touristy that you just try to stay away? It's a very residential area. There's a bunch of nice restaurants in the area. What do you think about the interesting, internal apartments? So you're over there a lot? Yeah. It's a fairly big area. That's not controversial. It's all down there. How much slower and how long before? Yeah. Yeah. My office is right on the east side of the French concessionaire. Okay. Yeah. Yeah. There's always a new restaurant, so I'm always interested. Yeah. Well, every time I go, I make it a point to have the soup dumplings. Sounds like he's been there for, you know, there's 20% of restaurants go away after you know. Is that right? Oh, I hope that one, I hope that one didn't. It sounds like, you know, okay, thank you. It was just last year, and, you know, and the restaurant owner, this woman is just sweetheart. I mean, she's out there, you know, talking to the patron. I think I gave that. Having just as good a time as all the tourists are. It was interesting one day. Yeah. It was interesting. Yeah. After the game, right? Yeah. We had a discussion about the, the risk of Chinese economy. Sorry, I can't remember. Yeah. What's your take on Chinese economy right now? I've been advocating about it. They should give up this target or this tournament mentality. And it's getting perverse now. It is the, it's the premier who used to say, we shouldn't have this hard right now. It's the premier for himself. Who's now very stick to it. We're speaking to the system. Exactly. Exactly. Get the hold of it. Exactly, yeah. Once you're sitting in that post, then you're thinking from that post perspective now that what is right of the country. The economy. Yeah. Yeah, exactly. Or trying to massage that. Yes. I love that. I will send you an email and don't get set up. I will be out of the country for three weeks. But I'll be back in early October. We'll talk to it. Hi, Rebecca. I'm Jim. Hi. Hi, Ron. Nice to meet you. Hi, thank you. Nice to meet you. Good day, everyone. My name is Rebecca Blumestine. I'm the deputy editor and chief of the Wall Street Journal and I first of all want to apologize for being late. I don't know if any of you have been caught in TNG and traffic, but I had an appointment outside the center and my apologies. Thanks very much for being here. We have a great panel here. And one thing we really want to do, according to the title of this panel, is to debate whether or not we're in a dot-com bubble. And I'm going to start out by taking a survey of all of you before I introduce our panelists and see what you think. And what I'd like to do is also take a survey at the end and see if any of the opinions here have changed your mind. So could I get a show of hands? How many of you do think walking into this panel that we're in the middle of a bubble? Could I just see a show of hands? Okay, a few hands. So how many don't think we're in the middle of a bubble? Okay, so I'd say that that carries the room at this point. Well, with that, let me introduce our panelists. To my left is Ron Cao, who's founder and managing director of Lightspeed China and has been investing in companies across the tech sector in China for some time. Juning is deputy director of finance at the Shanghai Advanced Institute for Finance. And as we get started here, Ju, I'd love you to get us going with the definition of what a bubble actually is since you're the sitting economist in the room. We're very honored to have Max Levchin here. He's the co-founder of PayPal and Yelp, two rather small internet successes, and is now working in San Francisco-based innovation lab HVP and in the belly of the beast, I'd say. So I'm very interested in getting your view of what's happening. And finally, Jim Yagin, who's co-founder and executive of Truecar USA, which had an IPO just in May, raised $70 million. And even on the day of your IPO, had some interesting comments about whether or not we're in a bubble. So, Ju, I'd love you to get us started. What is a bubble? And what are we talking about here in terms of tech? So I was sharing with my panelists before coming in that I'm gonna give a very honest, but not very useful comment about bubbles. That is only after the bubble burst we would be able to know whether we were in the bubble or not. So I've been working with Professor Bob Schiller, who was the Nobel laureate last year at Yale on bubble-related research. And it's just amazing to see how people's disbelief in their living in a bubble can make the bubble become even bigger. I'll give you one example. 400 years ago, back in the Netherlands, one tip of Tilly Bob combined 20 townhouses in the center of Amsterdam. So that is how crazy the bubble could have gone. And now I want to come back to this particular time period. Well, I think by going through the 1998 to 2000 internet bubble, I think the investors, the companies and the regulators have all learned quite a bit about what is a bubble back then. So I think those knowledge has been really helpful in preventing or at least attenuating the extent of having another bubble. And I want to just put two things into perspective. One is from a valuation perspective. Yes, we are looking at some richer valuations than historical average, but it's not as far as to choose standard deviation, which is a little bit too aghast, but it's not too far away from the historical average. So I think we are looking at richer valuations than average, but not that bad. And another perspective is, if you look at the motivation behind this higher valuation, I think that's closely related to the reflow of capital from emerging markets back into the U.S. And in this bigger context and in the context of very low interest rate in the U.S. right now, there's really not any better investment vehicles in the U.S. So in some way, I want to draw the analogy between the internet sector in the U.S. and the real estate sector in China. The difference is, I think, for one, for the internet bubble or the internet valuation, it is higher, but it's not too far away from the average. Whereas the Chinese real estate sector is probably beyond what most people could imagine. So I'll put this stuff here. So in coming days, we're going to see the IPO of Alibaba, which may be one of the biggest, or the biggest IPO ever in the world. So far this year, I believe in the U.S., there's been a $47 billion raised in IPOs. And we're getting back to 2000 in terms of this level of activity. Ron, do you, from your perch, are you getting worried about what's happening in China, particularly with the Alibaba frenzy? Well, I'm sure this is nil. I mean, the, you know, I was studying this topic and I actually saw the chart right before you showed up there, it showed the number of IPOs from 1997 to 2011. And, you know, in 2000, 99, it was a long time ago. And I think we forgot how big of a party that was, how great of a party that was. You know, there were 300 IPOs in 99, 2000. And I think last year we had, I think less than 100, I think it's about 80 or so, sorry, 30 or so, I saw this data, 30 or so venture-backed tech IPOs. I mean, that's, it's a one-tenth of the number. And we also looked at numbers internally from just, you know, looking at valuation numbers. The, you know, the number of IPOs that, in addition to the number of IPOs, the number of IPOs that had doubling the first day of trading in 99 was about like 100. One third of the IPOs doubled the first day of trading. And, you know, those phenomenon is not, you're not seeing that today. Certainly there are exceptions. Alibaba, I think, you know, it's a company that's been around for so long. It's a great IPOs. It's going to be pretty valued. But on par, I would say we're still, you know, we're going to perhaps a bubble situation, but I think right now we're fairly rational in general. Max, from your perch, what's your opinion? So I think it's just way too easy to oversimplify the whole thing. And I'm opposed to our simplification on the principle basis. So I think there's a bunch of things going on. One is important to remember that the stock market is just a proxy for value. It's not actually a true representation of value being created by entrepreneurs. Alibaba is one of the greatest companies ever established, controls 80% of e-commerce in China, has after, seems like a forever existence, something like 46% growth year and year in the last quarter alone. It's, you know, whatever price it fetches, that's what the market thinks how valuable it is, but it is uniquely valuable. So a whole bunch of companies like Alibaba, public and private in the US and worldwide today, and the world has flattened in a sense that there's plenty of these companies outside of the US, but the typical recipient of barbs on the valuation side of things is Uber. And if you think about Uber rationally, it's very easy to see that given their success today and the lock in the network effects, the fact that they have a global and local network effect, all of it together combines into essentially a potential market cap, there I go using market analogies of course, it's a totally addressable market that's roughly Hertz times FedEx. So this could be an enormous, enormous success much in a vein of Alibaba. So those companies deserve the rich valuations and calling them a bubble is insulting to them and to the people that built them. Having said that there's a ton of little companies still working on things that are entirely pedestrian and worthless and will die. And if anything compared to 2000, it's much better because they will never go public. There's plenty of good ones to take public. So the little ones still get aqua hired and there's no better place to put an entrepreneur these days than into a director role in one of these companies that's a rocket ship. So as far as I'm concerned, things are generally pretty rational. Jim, you've actually lived through an IPO. What's your sense of the bubble? Well, it's interesting just four months ago next week would be our four month anniversary of being a public company and the public markets were extremely choppy. Then I remember reading headlines on whether two cars IPO would be a bellwether we were in a bull or a bear market and we priced under guidance and we came out with a market cap of just over 700 million and today we're 1.6 billion. So we've done extremely well in the four months but to Max's point, I don't know that's an indicator of the value that we've been. What's the true value? Right. Given your name, you should be pricing yourself to what your worth. That's right. And so where we think our value is how we address the market that we're addressing and the value that we deliver. We've saved consumers over three and a half billion dollars off the sticker price of a car that's a million and a half consumers and on the other end we've saved automotive retailers over 350 million and have created market efficiency in their marketing spending, customer acquisition costs and I think over time and that's with just over 1% market share. So we have a long ways to go and over time if we can continue delivering that kind of value then hopefully the market will continue to see and it'll translate into our stock price. There's certainly a role of big companies in all this. I know that earlier this year Facebook and the WhatsApp purchase I think is something that set this debated off into an entirely new level. It was valued at 19 billion dollars and we continue to see as Max you just said the dynamic of big companies swallowing up smaller companies. Are you seeing this in China as well with Alibaba and Tencent, this phenomena and do you worry about that? The big companies kind of bulking up as quickly as they can to fend off each other. Well as an early stage investor we actually like that. You like that. So like Max says that not everybody's gonna go public not every company's gonna become great but they have a certain value, a certain period of time. The fact that the giants in China are very competitive right now fighting over turf with commerce and social and eyeballs and traffic. It creates a lot of opportunities for startups. I think this is in terms of venture in China been doing this for about 10 years. This is probably the best time in terms of creating new ideas. Not just one is because the exit market is more healthy. You don't need to just go public or that's not the only route. There's other routes to create exits for companies but also we're probably going to a little bit more at this panel hopefully. Things like mobile, things like peer-to-peer, sharing economy, some of the enterprise technologies are these areas are quite exciting right now. Junior Max, do you have any sense of the big companies threatening to really ruin this for everybody else with such high valuations? I don't think so. I think it's not as though on any given day there are billions and billions of dollars being spent on these acquisitions. Every time something like this happens it's typically reporting where the event, the WhatsApp deal was heavily debated and it's still heavily debated and I don't think Facebook has another five of those tucked away ready to happen. The probably biggest danger of these incredible valuations we see in the public markets is the currency they wind up having not so much in the acquisition scenario but in the scenario of compensating workers. So startups are in Silicon Valley which is why China has such an enormous advantage just being larger have the terrible time of hiring in part because every 21 year old college graduate says well I have a $2 million effective currency offer from Google and $95,000 plus 3% of a company that probably will get acquired by Google anyway. This one seems faster. I just want to make one quick comment. I think for large companies such as Yahoo, such as Time Warner, such as AT&T and Microsoft if we were in the bubble they're making just as dumb decisions as anybody else is. So I mean they have made really crazy acquisitions during the peak of the last internet bubble so there's really not too much peace of mind to have if it is an offer from a large company. I think they sometimes are actually sprouting the party because they're driving like Max said and they're driving the competition even higher for the valuation and for the compensation to the key employees. I think this is true so long as you mean in terms of the high upper echelons of the acquisitions, at the small scale the half a million dollar, a million dollar aqua hard type acquisitions are actually seem to work pretty well. There's no pretense about what's going on just getting engineers paying $100,000, $200,000 signing bonus to their investors which is a strange dynamic but you appreciate it. The thing that I completely agree with is every time you look at the fill in the blank Microsoft buying whatever it is at the most recent ridiculous like you know it will not work out. You know they cannot absorb the company because the desires to take over the synergies seem to really capitalize on that and the only kind of thing that works is you buy and you let it be sort of Google YouTube being the classic success story. Jim have you thought of, you've obviously opted to go alone and that's your strategy but you know Ford comes along or GM, has that been something as you look at possibilities here? There would be very unlikely suitors but we certainly had the big companies come knocking pre IPO. It was quite a frenzy but it did, I think as one of the co-founders and as an entrepreneur it forced us to really sort of go through a self-examination process about what we're trying to do and why we started the business in the first place and how that would change if we didn't go it alone and stay the course. And there's certainly when you're a public company there's always the pressure of the public markets and are you able to withstand that pressure? Are you able to ignore the volatility in the stock price? We never looked at the stock price when we were a private company and we never base our decision on the day-to-day fluctuation in the stock price. Our stock price has grown nearly 136% in four months but it wasn't a linear trajectory. I mean, just this week we had 15% volatility in the stock price and making short-term decisions that compromises the long-term sustainable value in the business and why we started this business is a challenging thing and a trade-off certainly as a public company. So I'll share one more thing. I think relative to China, I think in sort of a follow-up here, you're seeing more of these deals being structured in China where the giants are taking a significant piece of ownership. They won't buy 100%, they'll buy 50%, 51%, 60% in some cases. Trinar is a perfect example of buy-to-buy controlling interest but let the management run with it, make decisions, retain their talent and go for the venture IPO and still be somewhat independent. We just sold a company to Qi Hu in the same similar structure over multi-hundred million dollar acquisition, controlling interest, management team still, it has some cash out but hey, there's still more to do. So I think that we haven't seen as many of those deals in the US. Maybe that's a China phenomenon because talent is even harder, I think even harder to hire in China or retain for that matter. So that's something that's worked out pretty well. I wanna talk for a moment about value creation and Max, to your point earlier, setting aside the stock market, what are you looking at in terms of value creation? Are we talking about jobs? Could we be simply looking at a significant shift that technology is playing around the world across industries, across the way people live? Could we be in many respects seeing the promise finally of what was talked about in the dot-com era? How do you think about value beyond the short-term Wall Street outlook? So in that sense, I think if you define bubble, not economically but sort of humanely as in, is there really a proportionate level of elevation from poverty, improvement of human condition, et cetera, compared to the nominal growth as exhibited by stock markets, no matter what you think of the valuation and the dollar exchange ratio, we are certainly solving harder, more important problems today than we did 10 years ago. 10 years ago, the internet was all about, not all about, but half of it was about something that remained and the other half fizzled. Today, number of companies that I look at that are curing cancers and figuring out how to mine planets for precious metals is way more. Those are not outliers. Those are kind of the sort of things that I like to look at and invest in and help create. So to me, the assessment of how we're doing as an industry is first and foremost around number of human lives that are being changed for the better worldwide. Because of the developing economies participating so much more aggressively, it's actually easier. There's this internal notion of elevating 10 million people out of poverty in China every year, things like that. It's easier to do today, frankly, because technology is reaching us and 10 years ago, starting a farming technology startup in the US was a joke, starting a farming technology startup in China, which just wasn't talked about, but today, we're looking at a half dozen farming agriculture technology startups in the US and it's gonna be 10 times more important in China where urbanization is a huge problem and the food supply, food safety is just continuously a strain. So in that sense, couldn't be more excited about where we are. I mean, value's being created very, very rapidly. I wish there was more investment in those categories, independently you think of the availability of the investment dollars. And you see investment dollars going into more of those social good companies beyond the traditional tech ones. I do. Is the interest to classify them as social good because that almost puts them into this bucket of like, well, those things that aren't really gonna make money, but they're important anyway, I disagree. I think those are fundamentally gonna make a ton of money and they are touching things that are traditionally thought of low margin industries, but a very, very small fraction of a penny and something that's a couple of trillion dollars such as energy is a pretty good amount of potential impactful revenue. So it does appear to be that most venture capitalists are starting to think beyond the standard four year cycle, which is where a lot of this actually came from in Silicon Valley, certainly. One nice side benefit to it is that most bubbles, the ebb and flow goes through at most a decade, typically four to five years at least in my sort of internet memory. If you invested something that's supposed to live for a hundred years or at least 20 years, you're gonna live through a couple of bubbles and you're just gonna condition yourself to not care what your stock is doing. If you're going 15% week and week, whatever, you have another couple of million weeks to think about as a lifespan of your company, that's not an important event. Juneen, should we be looking at value differently than just numbers? Absolutely, I think it meant, well, I think Warren Buffett said something during the last internet bubble, he's saying, well, I'm not going to buy anything I can not understand from an evaluation perspective. So I think valuation is really important because valuation reflects the balance between risk and returns when it comes down to investments. But I want to first add up to Max comments, I think I was in the university leaders forum yesterday and we were talking about how technology has transformed from the education's impact in health, wealth, impact and knowledge. There's so much that has going on due to the contribution of technology innovation. So that's really changing how people live their lives and how we communicate and how we are educated. So I think it's really being underappreciated just from a pure dollar or from a stock price perspective. And related to that, I think, well, what's wrong with a bubble? I think if it's simply a rise and decrease in the share prices, then it's really not a big deal. I think the really true implication or the consequence of a bubble is the misallocation or the prolonged misallocation of resources and risks in this society. I think as long as that is not happening, that people with very good training in other fields are giving up their day jobs and then just trying to become day traders of internet stocks. I think as long as that is not happening, I think that is still within the reasonable range. But if everyone, as it is the case in China right now, everyone is trying to build their biggest chunk of wealth through real estate investment. And that's probably having a worse consequence on the entire society than the internet bubble. Ron, valuation in China. Obviously there are a lot of issues here as Vax was saying that technology can help address and is addressing. Yeah, I mean, we focus on early stage. The valuation fluctuation there is typically not that large over years. I think maybe 2009 was five, six million pre. Now it's maybe 10 million pre. So, but at the serious C and D level, I think that's where you can see there's a huge valuation increase. I think we're, I don't have the numbers, but I suspect a series of C or D are averaging in the 100 to 300 million range. Then if you're investing that round, then you're saying this is gonna be a $2 billion company, right? And we know that's not gonna happen for a lot of those companies. So, and there are fairly aggressive investors that are doing convertible debt. I don't wanna set a valuation. I don't know if it's 200 or 300, but I'll give you money. I'll convert later. In some ways you're protecting principle, but in some ways that's a sign of aggressive pricing to get into the deal. But I think I do echo the things that are being funded are fundamentally different. In China, we're focused more on consumer economy investments. So, my, our nanny just got an iPhone. I mean, that's one month of salary. She's on wage change. She's buying things, I'm sure. So we, and that's very interesting. We are, we're investments in investments in, for example, we did an investment in a company that does, it's a mobile platform to allow you to find a temporary driver. It's called Yi Dai Jia. So if you had a couple drinks and you go out and you can't drive home and drinking driver laws are very strict in China, you open this app and you can find 20 drivers nearby that's willing to work. And what's happening is that these drivers before this app, they would, they're probably a taxi driver or they're just a factory worker. They're not making a lot of money. And we interview a lot of these drivers. They're increasing their salary by twice the amount by working extra 10 hours a week at night time. So this is an example of how technology is helping lives in a direct sense. I just want to add very quickly to Ron's comments. But there is, I think there's a great deal of investment opportunities in that area, but then there's also an additional layer of risk which is the regulation. Absolutely. And for that reason, I didn't talk about Uber because that's more sensitive and here is more about labor and directly applying that. Jim, you have a very different landscape in the US. A crowded one, perhaps. How do you look at value and what your company and other tech companies can bring? Well, a lot of what we do is addressing a lot of inefficiencies in the automotive retail process. I mean, an interesting stat. When you look at the number of new car franchises in the US, it outnumbers the number of Starbucks, Dunkin Donuts and Coffee Bean combined, right? It outnumbers the number of McDonald's, Burger King and Wendy's restaurants combined. It's just a staggering number of dealerships for a purchase that happens once every four or five years and the process that consumers go through and the investments that dealers and manufacturers make, there's still much inefficiency and so what we do in terms of the value creation is saving time and money and time is money and so when we can do those things then hopefully the reallocation of the time and the resource translates into value somewhere else. You mentioned the R word regulation. We're seeing the Facebook acquisition being reviewed in Europe. Obviously there's different countries with different laws where Uber may not be as successful in some places though I might add, I believe the company is facing some of its biggest challenges in Miami. Is regulation something that investors are perhaps underestimating when they bid up these shares and have as much confidence than they do in tech? It's a tough question because it's China, it's a lot of things are moving in progress. Even in the Western world, the technology oftentimes are ahead of regulation. For example, the whole digital asset class, that is something that's got regulators trying to figure out how to deal with that. Certainly the sharing economy where we've made a lot of bets with the Airbnb model, I talked about the E-dive job model. We also invested in a PDP car rental company. If you can rent your house out to someone else, can you rent your car out to someone else? It seems like it could work, so we're experimenting with that. Certainly all those things are touching on regulation. It's unprecedented what happens, something happens. Who's responsible for and is it the platform? Is it the other person? So I think these are things that needs to be worked through. In general, we make an assessment on that risk and there are certain areas you don't wanna be touching. I think if it's sort of areas where it's just not clear and we wanna work it through, we're willing to take that risk in many ways. Juning, are you seeing regulation keeping up here in China and elsewhere or is this gonna continue to be an issue? Well, I personally do not think that is such a huge issue for entrepreneurs and I think going back to Max comments, if you're really keen with one key technology or one business model then it's just a matter of whether you're willing to live long enough to see the eventual success. But I think it is a bigger issue to investors like Ron or, I think if you were looking at there's a timeline for your exit then there's really considerable amount of risk you would have to evaluate. Especially I think in emerging markets including China because the environment is so dynamic and there are so many other factors that could marginally touch upon your particular investment. So I think it is definitely far more important factors to consider than it is in the US or in Europe. I wanna open it up for questions in just one moment but Jim on the topic of regulation, part of the intrinsic nature of what you're doing is budding against franchise laws and some decades old regulations in the US and did you talk about that? Sure, I mean it's remarkable how regulated automotive retail is in the US. The concept of auto e-commerce in the US probably won't happen in our lifetime just because of the franchise laws. One of our investors Elon Musk has his own challenges trying to retail Tesla and in the state of Texas alone he can't sell a Tesla. And so it's a remarkable challenge and we as a company had a near death experience in 2012 purely because of the regulatory environment and whether we were violating advertising laws and our websites and our mobile complied with font size laws, right? And that were there to protect the auto industry and consumers around the print in a classified ad. There's regulatory protections for the franchise system that you mentioned that outlaws brokering in some states and if you get paid in the connection with the sale of a car, which we do, you might be viewed as a broker but how someone pays for a service being rendered doesn't necessarily mean they're a broker. We don't set the price of the vehicle. We don't take possession of the vehicle. We don't take possession of the consumer's money but the laws are written so broadly it can be defined however the incumbent system wants to define it, right? And so we had some real challenges. And Max, before we open it up, I mean PayPal you must have been thinking a lot about banking and the way we finance and running intrinsically into a lot of laws and regulations. How do you frame that in your mind? So actually you regulation as a competitive advantage. So I think one of the things you learn as an entrepreneur having gone and succeeded in a heavily regulated market, you realize that it's a tax you pay and it's a little bit of a seemingly insurmountable amount from the outside looking in but once you've been there you realize it's irrational but it's not insane. There's a lot of regulatory pieces that just really don't make sense but they were there 100 years ago and they're still kind of there waiting for their time in a spotlight in the Senate in the US and the equivalent bodies worldwide. As an entrepreneur if you choose to go into that industry it's always by definition huge and very hard to disrupt and has enormous amount of inefficiency. So if you really want a big opportunity and a big challenge pick it a regulated market. So healthcare, energy, education, finance, insurance, any one of those markets are the last laggards in the world of really being reinvented using software. Every one of those things is a trillion dollar opportunity worldwide. So as far as I'm concerned grow a spine and then go for it. I'd like to open it up for questions. I don't know if Fad is in the house. Fad what are your thoughts about the bubble and have any of the opinions up here changed your mind? For these folks because one of the things that really stick in my mind is what are the hidden dangers for a company go public during times of high valuation? I think he's the best qualified person to answer that. At a time well I would say that we were probably undervalued when we weren't out and so I don't know that that was an issue for us being overvalued but from a employee standpoint that Max brought up when you're overvalued as a company if the market say there's a bubble that corrects itself then you have some real employee morale issues. That's just a simple fact of recruiting, retaining and trying to build an environment where employees, you're trying to build a culture around passion of solving a problem but at the same time that they wanna see the rewards and when they see that evaporate because of the bubble then it becomes incredibly challenging for you to manage the business. I think in times of being public independent of what the market is like the employee productivity drops good 15 to 20% of times simply wasted reloading the page on NASDAQ or NYSE. I think the, at PayPal when we went public I one of my jobs was running security for the company just for local security and one interesting thing that occurred is we saw an entirely new traffic pattern emerge when every one of our employees downloaded the Java applet that would connect to a level two quotes on NASDAQ and look at the trades not at the price but at what contracts were being traded for our stock all of this happened within 24 hours of going public even though every single person was locked up for six months. So none of these people traded they were all just looking. So productivity goes quite down. And I just want to add briefly I think it also gives both the management and the ordinary folks this sense of complacency and we're reaching this milestone and then we can finally take a breather and relax for at least some time but then if you're going on the round track because you are so well funded then you might be just taking a slack and going on to the round track so that combination cannot be very good to the company. Ron what have you seen here in China? Well I mean certainly if you have options in terms of when you go public that's the luxury right you can but certainly a market when it's good it's you know you have more flexibility in going public then but you know but I think if you look at companies that have been around for a while it didn't really matter when they put one public didn't really matter right it's sort of Audibaba took many years go public that could have gone many times earlier so it's really it's a complex question but market conditions is probably just one of the few factors. Are there any other questions? Yes. Hi just a thought in terms of the question you asked about is there a difference between 2000 and what you're seeing now? I think there's a huge difference. Just my perception 2000 was a lot about novelty and not really showing how you could actually create value it was just more about can you throw cool stuff up on the screen and have lots and lots of folks look at it whereas if you look at the companies we're talking about now they're fundamentally creating value through process efficiency. I mean the question of does technology create more jobs I think is a misguided question. If you got rid of all technology we'd have 100% employment because we'd all be running around gathering grass and killing rabbits for dinner. That's not the point. The point is that for Truecar he's saving someone from having to go to seven or eight different dealers to find something that's a possible experience. In the case of Yelp he's saving someone from having to call up five or six friends have you been there? What was the restaurant like and so on and so on. What we choose to do with that extra time both societally and personally is really what the issue is. I mean the environment is going to continue to change and there's a societal imperative to reinvest in our society but it's also a personal imperative. You know if you're the guy who's driving the who's the best buggy whip driver in the world and all of a sudden that job no longer exists you have a responsibility to learn how to drive a car. And could you introduce yourself please? My name is Shane Padham CEO of Health Integrated we're a data enabled health care services company in the US. Thanks for that. Anyone else and if you could introduce yourself. Thank you. Name is Eric Moteirowork for AMIA we're a loyalty marketing company Canadian for a global company. The question I have is how much of this bubble question really isn't about thinking about capitalism with a bit of an old frame of mind right. I mean it used to be that if you're an industrial company you do one thing and do one thing really well. So if something is wrong or a question when you're a business model that's it. But if you look at the new economy I mean I think similar points you made right. You're creating value in a very different way. You're not going to you know stop going to Facebook because they're making less money or more money. You're building a customer relationship and a franchise. And so how much of this is we just need to think about valuations and value frankly from a capitalism point of view in a different way than we used to. I don't spend a lot of time thinking about reframing capitalism I trust and it's free market mechanics to guide me. I'm not sure it's actually all that relevant to think about the markets in between the times you're fundraising as an entrepreneur in which it becomes an existential question. And as far as I'm concerned about public markets primarily in terms of how to put off that moment in time when all of your employees start tracking level to quotes. So I'm relatively bearish on participating in markets if I don't have to. How does this play out in China? It is interesting that Alibaba's listing in the U.S. Well I think there are probably two layers of explanations. One is why is Alibaba listed outside. The other is I think why is Alibaba becoming so big I think the Chinese top three technology companies are taking three spots of the top six largest IT companies in the entire world these days and why is that? So I think the gentleman has a valid point in terms of what information technology has created a lot of value by serving the entire society. But at the same time it is also changing the way how wealth is being actually allocated across the society. So there's definitely a stronger sense of winner takes all mentality that is part of the reason behind why I think those companies are able to create more values and having a higher chance of creating more bubbles because they have so much wealth they have to spend. So I think this is related to how, I don't think that is necessarily the entrepreneurs or the investors agenda, but I think it is how the government or the regulators would have to set a line between what if there is such a great deal of wealth being created, how can we have the value of serve the greater good or the bigger part of the society? Yeah, I mean, you know, it takes one data point to create a bubble, it's sort of the crazy deal and everybody feels everything's crazy, but I think what the greed factor in all this is that a young kid with an idea, understand technology can create a billion dollars for this company, for these investors. So a few years ago that wasn't apparent. Right now it's apparent. So everybody say, well, even if I have a one out of a hundred chance probability, I'll invest a million dollars. You know, angel investors become VCs and PE guys, hedge fund people become PE guys and all that's creating this little bubblish feel. But I think, you know, one thing about China, which is interesting, I think it's a slightly different topic, but there's a lot of wealth being created too and it's going to a few hands. So the whole social enterprise, the whole, you know, the whole philanthropy movement is very clear to us on the front line. These are things that people are talking about and people are doing. So hopefully those things translate to really meaningful social enterprises that can help to bring the level up for everybody. We have time for one more question. China Business News. Thanks, you've talked about the Alibaba frenzy and now its price is range from 60 to 66 US dollars per share. So do you think it is kind of overvalued and given the overall regulation and the atmosphere in the United States, how do you think it's prospect down the road and any suggestions for a slum term sustainable development there? Want to take that? Advice for Alibaba? And what do you think Alibaba itself is overvalued with the estimates for it? Well, you know, we're focused on the series A, so that's a research topic for the big banks. But I think what's interesting is that, you know, we interview a lot of people from Alibaba. I think that's interesting, they see the IPO coming and they're looking for other things. I think, you know, put the business model aside and all that. What is Alibaba, what's interesting about Alibaba, it's corporate culture. That to me is very fascinating. Those interviews come across very consistent. It's got a strong alignment of individual interests and also the company's interests where people can fight for the company. That's something that's intangible but I think that's gonna drive the company too for the heights. I found Jack Ma's letter to the shareholders. Fascinating, on corporate governance, around the focus first towards the customer and employees and the shareholders last. I think all the elements in the letter that he addressed the shareholders, if you're gonna invest in this company, expect these things. I think if he can hold true to that, I'd be an investor in the company. Before we take our final vote that I mentioned, I'd like to go around and see if you all have final thoughts that you'd like to share kind of a sound bite or what you predict is gonna unfold as we move on from here, especially in coming weeks with the Alibaba issue. Well, I think, you know, China is not much different than the US. I would say the environment here is very entrepreneurial. I would say as an investor, this is probably, you know, you can never say it's the best time because you never know, but it feels like there's a lot of things we can do that can be really meaningful outcomes. I do agree, there are a lot of areas where that's heavily regulated, that's being disrupted by technology and those are mega opportunities. So, you know, I think, you know, so we're quite excited about, you know, at least the next few years, you can't really see too far away, but the next few years, it would be very interesting companies being built. Well, I think technology have created a lot of really great companies ever in human history, but I also want to caution from a pure academic or research perspective, sometimes great companies can make terrible investments. I think I'm very bullish entrepreneurship. So I think so long as the apparent nature of a kid with the technology knowledge and a billion dollar outcome is more transparent, more believable, people will try more things as long as the market supports those initiatives, we're all gonna be better off and incidentally just to echo your point, I think the, it's a topic for a different panel, but we should never allow ourselves to slow down innovation, simply out of fear that someone's gonna have to finally give up that horse and buggy business that they treasured so successfully for 100 years. The thought of a bubble doesn't give me any anxiety. I like bubbles, I like bubble gum, I like bubbly water. I'm in LA and it's been 20 years since we've had an earthquake and everybody knows it's coming, right? And you can build the right foundation and anticipate and survive the earthquake or you can ignore it. Bubbles are bad if you're an investor and investing in the wrong company. If you're an entrepreneur and you ignore it and you're not building a company with sustainable value, then the bubble will get you. I'll say to close, how many of you in the audience feel that we are our pro-bubble that we're in a bubble? I think I see you are hands, okay? How many put your hands up if you, I think we have a relative consensus here of convinced you that we are not in a bubble? Excellent. Well, I'd like to thank our panelists for a really fascinating discussion and thanks to all of you.