Brainstorm Tech 2020

Nicola Mendelsohn, Vice President, Global Business Group, Meta 
Interviewer: Michal Lev-Ram, FORTUNE


Brainstorm Tech 2022: Meta And The Metaverse

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Brainstorm Tech 2022: Meta And The Metaverse


Nicola, I interviewed you on stage at a fortune event way back in 2016 and a lot has changed since then in the world obviously and that the company formerly known as as Facebook and your role has changed as well. So let's just start without you are running a media at the time. Um tell us about how your role has evolved in the move that you recently made. So Michael, you're absolutely right, I mean what a lot of changes, right? None of us could have predicted all of that, But yes, my role has changed. I'm at the company now nine years and in november I took on the global business group, I moved to new york, I'm having the most fantastic midlife adventure, which I'm loving and so I'm responsible for you know, the global business and it's been very exciting because as you said, the company has changed its name and we've put a whole new direction in terms of looking out towards the metaverse, the vision for the next 3 to 5 to 10 years and what that's going to mean and you know, just heard the announcement of some of the size of the investments that we're making here because we really do think that this is going to be The next computing platform that we see about every 10 to 15 years, so all in on the matter, so and you have said that um For a fully realized metaverse it'll take 5-10 years, what does that mean, exactly what does it look like in your view of the future and uh and does that also mean that does a fully realized metaverse for meta mean that it's also a fully realized revenue stream. So we are a company. So it means yes obviously we we want to be making sure that we're making money but at the moment we're not the only people that are thinking about building the metaphors, it's going to be something that's built by many different companies. Many of the people in this room are are invested in looking at that and understanding what that could look like. But for us it's you know it's still early days we're investing in the hardware but also in the software as well looking at Horizon World and it's really really early days. So we're just starting to see business is starting to build our own worlds in there with us which is exciting. We saw recently that mini created a mini verse which if you haven't tried it is a wonderful experience that you can go in. You can customize your own driving suit, you can customize your car and you can do a virtual track with loop the loop things that you can't do in the real world. So there's a lot of potential, there's a lot of fun and so many different use cases, my own leadership team. We we every week go into work rooms and we meet we put on the quest uh and we have you know a virtual coming together as avatars where we can brainstorm was just talking earlier with someone about how much better it is to I. D. Eight together and actually create when you're in there? Yeah, I've actually ever heard you saying that one of the advantages is that you can talk over people which is a funny advantage but but but it's hard to do on zoom or you know, other video conferencing apps, right? Yeah. Very much so. And so you don't have that whole pause wait for someone to a mute then come back on and you really have that feeling of presence in the way that you and I when you're talking, I'm looking at you and I'm talking you know, you move you really feel that sense of presence And it's so much more immersive than than what we have today. And for us as a social technology company, we're always looking for ways that people can communicate with one another. It started 17 years ago just by sending messages in many ways on Facebook then we had pictures, then we had videos, short videos and now we're moving into the world of a AR and VR and so the ways that people can communicate and the ways that businesses are going to be able to communicate with people. Well it's only really going to be limited by our imaginations um by the way, what what kind of setting are you in when you do your team meetings in the metaverse. Are you in like an office environment? Are you all like on a tropical beach? Well a bit of both actually. So I played around with my backdrop, so there is one which goes and looks out onto the beach which is quite fun when you're in a meeting and you suddenly have a little look out at a view of the beach. But I've also got one that actually looks a bit like aspen because I like a bit of the mountains and some lakes as well. So again We can choose what we want to do, we need to start thinking in different ways about what really being in a 360 immersive environment can mean for us how you have a lot of conversations with with obviously many, many different brands large and small. Um a lot of cmos um how much of these conversations today tend to focus on the metaverse and sort of the future and how much of it is about your current core business is? Yeah, I mean those are the two hours that I'm talking to when I'm talking to Ceos when I'm talking to cmos, they want to know about the metaverse, they want to understand what they should be doing when they're building, you know their own long term strategies, successful businesses are looking today medium term but also the long term as well, whole host of companies now have created chief metaverse officers or the like so that their full on on that but they're also talking to me about you know how can you help us get growth? You talked at the beginning about some of the challenges that are out there, all businesses are focused on growth, keeping the you know the customers that they have but also looking at who the who the new customers are going to be as well and you know they're coming to us, they want to understand our new products, they want to understand real, Our short form video which is you know growing incredibly fast, 20% of the time spent on Instagram now is unreal. They want to know about business messaging and how they can communicate with customers in much simpler ways and already we see billion messages a week going between people and businesses. So those are the things that they're asking us about all at the same time as to how we can help them, you know bring bring in the growth. So talk a little bit more about challenges to the current business because we're seeing uh not unique to meta necessarily of course, but we're seeing a host of challenges and and what is unique to you is really for for the first time, a bit of a slowdown. Um and so I'm curious to just hear more what are the primary concerns that you're hearing from advertisers in light from brands in light of the slowdown on the ad side. Yeah, so I mean businesses are talking about at the moment, a whole raft of different headlines that are coming out and you mentioned some of them at the beginning, they are talking in general about, you know, the ongoing effects of the, of the war in Ukraine, the supply chain issues, the fact that we are still living in a pandemic and what that means on, you know, staff shortages, etcetera. But as I said, they're actually when they're coming to us, they're hungry to know what they should do in terms of how they can reach their customers. They want to know about what they can do to get growth. And so they're looking at innovation, they're looking at the sorts of things that they're in that they can control. And that's actually a bit of a mantra that I'm talking about as well, which is control what you can control. And so, you know, utilizing things like rials, utilizing things like messaging and our basic ad platforms that we have across so many of the different formats. Have we got the creative right? Have we got the targeting right? What else can you help us to do? We're seeing a lot of excitement as well around a our ads as well. So, you know, the fact that you can now, if you're a company like charlotte tilbury or like Sephora, you can actually look feel like you're trying on the makeup, then click through and to buy. Well, those are the sorts of innovations that businesses are really excited about the likes of walmart being able to, you know, do you have a desk that you can look and see what it looks like in your house and of course you don't get the, you know, the returns back because you can actually see what it looks like and you you you just said something about, you know, control what you can control as as part of your your advice. Uh two brands. Um one thing that that meta can't control uh is Apple, Apple's IOS google's android and some of the privacy controls that they've put in place, which has had an impact on your business and broadly, of course on other small businesses as well. Um can you talk a little bit more about what you're doing or what you could be doing to re engineer the ad platform to make sure that you are still delivering value to advertisers? Okay, so we've been very vocal as a company about the changes that Apple was going to make from about 18 months ago and the impact, as you said that it would have, particularly on small businesses and it really has hurt those small businesses From our side, we've been very clear that we're building privacy enhanced technologies that we can do more with less data going forward. And we've also been working on one of the issues that really that happened with Apple was that it's not like the people went away, there's still 3.6 billion people that are using our platforms, what advertisers couldn't see quite as clearly was the ability to see the conversions That were happening. One of the things that we've managed to reduce in the last few months is from going down from over 18% down to 8% now, so we've really narrowed that gap and we're going to continue to make sure that on a continuous basis we continue to make improvements here. By the way. Speaking of small businesses, um I was in Israel recently and I was so amazed by how small businesses are using WhatsApp and I know that it's not an Israel specific phenomenon that this is the case and much of the world, not the US what it's not a new phenomenon, right? But but why? And have you as a company attempted to make more inroads in the US and in small businesses specifically with WhatsApp? So we what we see, you know, we have both WhatsApp and messenger that you know, businesses around the world and different countries go with one or the other is typically what we've seen and it is a surprise I think still for many in the US to understand the strength and the scale of WhatsApp, but as I said, we're really seeing that, you know, conversational commerce, the people want to have a relationship with a customer that doesn't mean that your darling one to speak to someone, wait for two on your phone. 34 you want to have an answer straight away. And so we have a number of different products already with which called click to x. So click to whether it's messenger and you can actually start to open a thread from an ad into that, into that relationship with that person that you can then continue on an ongoing basis. Consumers love it because they have all the information in one place and it's also good for the advertisers as well. So this is an area of focus for us and you continue to see us do more here crab. Um I will go to you all for questions in just a minute, coming to you down um real quick tapping into your global perspective again for a minute here. So on the regulatory side obviously lots of headwinds for the company there as well. And I don't even know where to begin because I could ask you about so many different things here. But um I'm really curious to hear your take on um this recent development Ireland's privacy regulator wanting to block facebook and Tiktok apparently from transferring data to the U. S. Tiktok to china. Obviously, how big of it. Like is this like a near catastrophe? I was reading, you know, we've been covering it too, of course everyone's covering it. Um is this a big deal or are you confident that something will be worked out in time? Yes. I think it's important to take a step back here. That the pace of change of technology over the last 20 years has been extraordinary. And I think it has been a challenge for governments regulators around the world to keep up as a company. We've really wanted to engage because we don't think that it's these are the decisions that an individual company should make on the specifics that you're talking about there. That was something that wouldn't it's currently still in draft. But that wasn't something that would impact just matter. That was something that would impact actually all businesses, literally every business of all sides that transfers data across the US and the EU. Now at the same time what I what I think has been very good and I think the right direction of travel is when when all sides come together and have deep and thoughtful conversation about what regulations should look like. And so that's why we'd obviously welcome the fact that the both the EU and the US at the same time, I've worked on an agreement about The new transatlantic agreement around that passage of data between the two. So that's good and that's what we're encouraged by because what it means is that people and businesses can still continue to do the things that they want to do and to be in communication with with their friends and families matters to me because of course you know I'm living in new york now my family is in the U. K. I want to be able to send them the pictures. That's what it means. Okay Dominic let's go to can you stand up and introduce yourself? I'm dom I have been with SAS platforms streaming and now private company trading platforms forge. So it's very interesting the panel before you was talking about mental health and so I'm just very curious how does the metaverse play into that and what are the safeguards that are there? You've had my former boss Benny off say you know um Mhm. Social media is the carcinogens of of our modern world. I'm just curious how do we look at those safeguards around mental health and self reflection? Yeah so I think it's a really important topic that that you raised. Um and I'm you know we were talking before I'm a mom of four so you know this is something that matters to me as I think it does to everybody in the room from a metaverse perspective we're still really early on but we're not waiting we'll take some of the lessons and learning from you know web to to wait for it to be fully realized before we start to grapple with these sorts of issues. And so one of the things of the company that matter has done is actually to create a $50 million dollar fund that we're going to spend over the next two years working with academics working with governments working with informed, different areas of society to really understand what the guardrails are that we need to be putting in place and to be building those early doors. It's something also that we think about a lot with our existing platforms that they're there and we've created a number of different products that sometimes I don't know if people are so aware of That that are important in this area. And particularly on things like Instagram where there's actually an option where you can take a break and it can give you a nudge and nudge. I'm a great believer in nudge technology, you know, nudge theory and you know, it's actually good and it's a healthy thing to actually say, yeah, I'm gonna do my 15, 20 minutes. And then, you know, it's nudged me to remind me so we're constantly investing and looking at different ways that we, we can understand this better and more that we can do. And certainly as we build, not just us, but many other companies will build towards that, I think it's important that we have an agreed set of guardrails. And one of the things that you've put in your putting in place specifically like literal guardrails is you have like a four, is it a four ft diameter around you in the metaverse people get into, which I would really like in the real world, by the way. Yeah. So it's actually something a physical, um, it's like a perimeter and it feels like if somebody comes too close to you in horizon world on our areas, then actually they're not allowed in there, not allowed in. So then of course you get the thing that people say, well what if I want them in? And then you go, well that's another whole conversation. But I think it's being thoughtful about the creation of those sorts of things early doors that matters and I think is important. Well, social media has been complicated in, in, in its present form. I'm sure we'll see all sorts of challenges and opportunities in the future form in the universe. But thank you so much for being here with us today. Nicola, thank you.

MATT HEIMER: Ron, this is a question I'm passing on from the audience. A couple of different people are curious to know, what's your ratio among your investments of successes to companies that didn't make it? And a sort of corollary to that question would be, what have you learned from the companies that didn't make it? RON CONWAY: Well, it's definitely a [? hits-driven ?] business. About 60% of all of the companies we invest in go out of business. We don't make a nickel. Another 30% of them, maybe we will get our money back. And there's that slight balance, you know, 10% to 20% that you make more than you put in. And it's enough to pay for all the ones that went out of business. And in a lot of cases, you learn more from the losers. The lessons I learned at Napster about people, and how egos get in the way of business, and can destroy a business plan [? that ?] was totally reasonable-- many, many lessons learned from the companies that didn't make it. And those founders, if they do an orderly shutdown of their business, we're standing in line to invest in them again. Now, if they let the company run out of business and they don't even meet the last payroll, that's not a considerate founder. But if they are a considerate founder, we will definitely invest in them again. Sean Parker started three companies after Napster, and we invested in all of them. 

Often described as one of Silicon Valley's "super angels", Conway shares tips about returns from investments.

Lessons about investing from Ron Conway

Uncategorized

 PHIL WAHBA: Seleta, you are in charge of a lot of the transportation infrastructure in Los Angeles, biggest county in the country, home to 10 million people, which makes it bigger than New York. So, what are the kinds of weighing on your mind, the tech that you see in the future? I want to get back to the Hyperloop, of course, in a moment, but broadly speaking, what's your philosophy about the kind of tech you want to use to ease transportation problems in your city? SELETA REYNOLDS: So first of all, I just want to thank a New Yorker for giving props to LA because it is such a complex place. And a lot of folks, when you ask them what do you think the job is of the general manager for the Department of Transportation in Los Angeles, they'll say something along the lines of fix traffic. And I think for me, the challenge in sort of crafting any kind of solution has to begin with that problem set of what is the problem we're really trying to solve? And from my perspective, we are trying to dismantle a legacy of overtly racist decisions that created sort of the infrastructure and public health and economic outcomes that we see in cities. When we lay down the federal interstate system, we decided to go right through the middle to the hearts of our cities and dismantle our cable car and other sort of high capacity forms of transit. So when we evaluate any kind of tech, my question is first what problem are you solving and whom are you solving it for? Because it's really about disentangling the myriad of choices that people have to make transportation something that's seamless, that actually improves the quality of life, and more importantly that connects them to opportunity, so that your economic mobility is not determined by whether or not you own a car, or what neighborhood you were born into, or what zip code you belong to. So things like even car sharing, public transit, and anything that amplifies those and makes paying for them easy and seamless and affordable, maybe even free, are the kind of tech solutions that we're really interested in. And then there's the low tech solutions that still feel very radical in a lot of American cities, which have to do with things like protected bike lanes, bus only lanes, giving primacy to the most efficient, cleanest, and most affordable ways of moving people around. 

"We are trying to dismantle a legacy of overtly racist decisions" says L.A. Dept. of Transportation General Manager Seleta Reynolds

Reimagining transportation systems as we know it

 SPEAKER 1: Patrik, Under Armour is a shoe and apparel company. But the company, before your time as CEO, made a lot of investments in digital fitness, and you've been busy consolidating some of that. Could you share that with everyone, please? PATRIK FRISK: Yeah, sure. The connectivity is becoming really important for the consumer. And we've seen that accelerate now during the pandemic. Under Armour's here to try to make the consumer that we're focused on better. And we've seen that, for example, in our connected shoes, we've seen the interest for that increase dramatically. We've seen our 1 millionth shoe now connected by our app. And what we're working hard to do is to make sure that we're creating one ecosystem for the consumer. The connectivity aspect is important because, for us, it's about helping the consumer to get better. So what we can do in that connected experience is truly help coach them as well, which is unique to the Under Armour experience. And we're seeing the choice for the consumer in terms of why they buy one pair of our shoes, for example, that are connected. But 2/3 of the consumers that have bought our connected shoes are interested in these shoes simply because of their connectivity. So for us, it's an incredibly important part of our future. SPEAKER 1: Tell everyone specifically, you have several digital brands. I mean, you have Under Armour itself. You have MapMyRun. You're selling MyFitnessPal, which Under Armour had bought, or you already have sold, I'm not sure which. Why the need to consolidate? PATRIK FRISK: Yeah, I think for us, again, what we've seen is we've had different platforms. And over the last four to five years, what we've been able to do is really understand data, what matters in terms of the data that's going to be working for us. And ultimately, what we're here to do is to make the consumer better and to do that through either the experience or the product, the shirts and shoes. And what we've seen is our ability to connect is really the differentiator for us, so our connected footwear, for example. So ultimately, for us, what we're doing now is creating one ecosystem. And we feel that we're going to be able to do that best through our MapMyRun app. And the MyFitnessPal divestiture kind of helps us get there faster. So for us, it's all about building that one environment now for the consumer where we can not only help connect them in terms of the product, but also make the product accessible and available to them. 

Under Armour has one million customers connected through their shoes.

A connected ecosystem of sportswear

 ANDREW NUSCA: --Dominion one coming up, right? DONNA LANGLEY: Yeah. ANDREW NUSCA: I saw some amazing stats about it-- 18 months, I think, for filming, 40,000 COVID tests. Can you tell us a little bit about how the pandemic is, in a visceral way, affecting the business of moviemaking, putting people on set? DONNA LANGLEY: Yeah, so we were 10 days into shooting Jurassic World: Dominion when the world went into quarantine. We were at Pinewood Studios, which is in the UK. We had the biggest stages there already built, ready to go, and 1,000-plus crew members and a cast on site. We had to get everybody home safely and expeditiously. And so the first couple of months of COVID, what we were looking at is-- the question we asked was, OK, how do we get this movie back up and running again? And is it even going to be possible during COVID, or do we have to wait for a vaccine? That was some of the thinking early on in the pandemic. So I thought, well, you know what? Let's see what's possible. Let's start to put a roadmap in place, because at the very least, it's going to show us what our challenges are and what the obstacles might be to get movies to-- get us back, get the industry back to return into production. So it was important from a business perspective, obviously. We were paying rent on those stages. It was costing us hundreds of thousands of dollars a month to keep the movie there. It was imperative to try and jump-start our business again. Also, the industry employs hundreds of thousands of people around the globe, not just in the US here, but in the UK, there's a massive filming industry there. And so it was important to try to see if there were a set of protocols that we could devise that could get the industry back up and running. And I'm happy to say that as we sit here today, we wrapped about three weeks ago. We did over 100 days of shooting very successfully. And we devised for that movie 150-page playbook of safety protocols. And the basic premise of it was really three-fold. It was, of course, testing, as you mentioned was at the cornerstone of it, figuring out how to be able to make a big movie with that of hundreds of extras and a very large crew but design different ways of doing things that prevented hordes of people having to be together at any given time. And there was some real innovation that came from that. And of course, contact tracing-- our premise going in was, it's not about what happens, nobody getting COVID. It was about what happens when somebody tests positive for COVID, which did happen a couple of times. But fortunately, it didn't cause us any massive business interruption because of the protocols that we had. 

Donna Langley of Universal Filmed Entertainment Group details the timeline and procedures that were necessary.

Making a blockbuster in the middle of a pandemic

 MICHAL LEV-RAM: Apple also has a very HQ-centered culture and an in-office-centered culture historically. Obviously, the last 10 months have greatly forced you to change that, at least temporarily. But moving forward, how does that change the company? I know you haven't quite yet said what things could look like. But in your mind, what could things look like post-pandemic? DEIRDRE O'BRIEN: Well, we've been so, just so thrilled with the way our teams have come together during this time. I can't say enough. I just want to point to the fact that we just had our busiest fall of announcing innovative, new products, our busiest ever. And our teams did this working primarily from home. And it's something that, if you would have asked me a couple of years ago, could Apple do what we've done this year, shifting to working from home, I would have been really-- I would have been challenged to imagine it. And our teams have just stepped up in every way. And so we're thrilled with what we've done so far. In terms of looking forward, it's really hard to predict exactly what the future will look like. But we do feel like we're going to take these learnings and really just make sure that, as we think about the future of Apple over time, that we're taking advantage of the new skills that we've all learned. However, we also do feel that collaboration and many times, face-to-face work does allow us to do our best work and sometimes move a little faster. And so we'll find that right balance of being in person and also working remotely. And I'm very confident, no matter what, we're going to be really thrilled with the outcome of all the things that we've learned over this last year. 

Apple looks to a post-pandemic world

SVP, Retail & People at Apple, Dierdre O-Brien

SVP, Retail & People at Apple, Dierdre O-Brien, points to the fact that the company just had its busiest fall product launch ever - working mostly from home.

 ANDREW NUSCA: So the Rakuten of today is internet services is your largest segment, which includes retail. You've got the financial arm, which you mentioned. An industry unto itself. And then your newest one, last year you began reporting mobile as a breakout business. It's your smallest, but that's a relative term. So let's talk about your telecommunications ambitions, 5G and all the plans you have. You have great ambitions. Tell us about them. MICKEY MIKITANI: Rakuten has been evolving centered around our membership. So Rakuten is not really a pure e-commerce company. We're a membership company. And managing the brand and also our reward program, which we are doing in the US, Rakuten Rewards. And also the data. And so this has been a playbook. How we can bring the customer to the stores, or to the internet shops, or to the hotels and cross use the members. But I have started to realize the communication is going to be very, very important part of our ecosystem. And so that's why we wrote one of the largest messaging app company called, Viber. And it has been number one messaging app in most of the eastern European countries and some Southeast Asian countries. But I started to realize, we got to go to the hard core and why don't we try to get into the mobile space. Where lifetime value of the customer is very, very big. And also the synergy with our other ecosystem is also very, very large. And initially, I just thought we're going to do this mobile [INAUDIBLE] business in Japan. But as we move forward we started to realize, oh my gosh. What we are building is not just mobile service, but we are trying to transform mobile network from the architecture point of view, by converting hardware to software. To be very, very honest, this is a secret talk thing. But-- and just about buying the network devices and equipments from Chinese Vendors Chinese equipment companies. And that's when I realized, oh my God. We may have a little bit of political risk here. And started to the alternative. And I realized buying the network device that's existing, Western network device companies, is too expensive for us. And we can not justify it. So we came up with the conclusion, why don't we try to convert all these hardware to software and make it like a Cloud? And everybody thought we were kind of crazy. And in some of the [INAUDIBLE] in your country, categorize us as pie in the sky. My friends who are big CEOs of big [INAUDIBLE] and network device companies, it was laughing at us. Hey Mickey, I'm going to warn you. You guys are going to fail. But you know, I challenge that, we change that. And now everybody was shocked that we made it happen. ANDREW NUSCA: So Mickey. MICKEY MIKITANI: Yeah? ANDREW NUSCA: Let me ask you a little bit more about this. So telecom is indeed a brutally competitive industry. It's also a very, very expensive one. And indeed your company has plowed billions of dollars into the investment that you've outlined here. You just mentioned that you see it as kind of connective tissue for other parts of your business. Could you explain that a little bit more? How will you see the return on all that investment? MICKEY MIKITANI: Well, it depends on how you define the competitiveness. Obviously, [INAUDIBLE] is very, very high for three reasons. One, upfront capital investment is huge. Because you need to build a network. Or maybe you can do a roaming agreement, but which is also very, very expensive. The second is spectrum. You need to have a spectrum. Whatever how good you are, you don't have a spectrum, you don't have any business. Right? And Sometimes it's a location, like in Japan, or sometimes you need to be over the ocean. And the third is membership accretion. Right? But we have hundreds million members already in Japan. So membership accretion is not a problem for us, it's about the first two. And now we are convinced that we can really decrease initial investment by more than technology, by virtualizing, by automating using AI here and there. Our capital investment is probably less than half of what they have paid. And then, once you get in, it's not like e-commerce. You have a limited number of players, which is a lot like Amazon, Google, Facebook. So it depends on how you characterize the competition. And I'm very, very confident we will be extremely competitive for network mobile services in Japan, as well as mobile platform provider in the world. 

Rakuten CEO lays out ambitious plan to enter the telecom industry

Tech

Mickey Mikitani at Fortune's Brainstorm Tech conference.

Rakuten CEO lays out ambitious telecom plans

Mickey Mikitani spoke at Fortune's Brainstorm Tech conference.

Watch: Rakuten CEO lays out ambitious plan to enter the telecom industry

 STACEY CUNNINGHAM: 2021 is shaping up to be an exciting year, but we just need to take a step back and think about what 2020 was. It was a historic year when it comes to IPOs. We had the busiest year we've ever had in the history of the New York Stock Exchange both September, and then we broke that record in October. So we're coming off a really busy year, which is surprising when you think about it, because the market's been pretty volatile throughout the year. And obviously, when you see market volatility, very often, that's a time when companies choose not to go public because they want a more stable environment when they come out to the market. So typically, there's an inverse correlation between market volatility and the IPO activity. 2020 has broken that mold, just like it's broken so many other molds for us this year. And we've actually seen record-breaking IPO activity, not just IPOs, but also through follow-on offerings as companies are using the public markets to raise money to fight off the challenges of COVID-19 that they've been facing. So 2021 has a pretty high bar to beat. But it's looking busy so far. LUCINDA SHEN: Right. And to your point, volatility has been insane this year. You know very, very well, especially around election years, not even just including a pandemic, but there's a lot of uncertainty that comes with a US presidential election. And we have had one heck of one this year. It's been unprecedented in its own way. It's been long. It's been protracted. And so typically, we see IPOs slow down around that time. But we've seen almost a buildup of even larger IPOs coming out. And so what's been happening there? Do companies-- do these large private companies just not care about the presidential elections anymore? STACEY CUNNINGHAM: They're reacting to market conditions. And if you think about how companies-- the profile of companies has changed, before they go public, it's really evolved pretty dramatically. They're much larger now before they're going public. So companies were staying private for a much longer period of time, and they had access to private capital. What we saw in March when the market volatility really picked up, and the pandemic effect started to unravel, is companies realized that it was much more expensive suddenly to raise money in the private markets. And those public companies were very easily and efficiently raising money in the public markets. So really, the value of the public markets was on display. I think that left a lot of companies asking themselves the question, would they always have the same access to capital in the private markets? And so some of them started to dip their toe into going public sooner. I started having conversations with CEOs that were saying, we're not sure when we want to go. But we know we want to be ready to go, because there was a little bit of a concern that they might not have the same flexibility they always thought they would have. And I think very quickly, you started to realize people were concerned they might be taking the public markets for granted and their access. And so you started to see a lot of companies getting ready to go public. Most of them thought they would avoid the election time period. But if you look historically, the election really has had pretty minimal impact on the actual companies going public and their performance. Markets don't like uncertainty, but as soon as they have a sense of who wins, they react to whatever political landscape there is. And that's not really unusual. It's just that uncertainty right around the election. So I would advise people to avoid that first week in November. This year, it turned out to be a little bit longer as we were figuring out what the election results were. But as that became clear, people are coming back off the sidelines, ready to go public, not just in the month of December, but in early 2021, it picks up again. So I think the election had a pretty minimal impact. The market is reacting to the vaccine news and largely everything else that we're digesting. And you're seeing a lot of market moves up and down, which also is something that's an interesting dynamic when companies are asking themselves how they might go public, because it's not just the IPO. And the IPO tends to be a little more dependent on market conditions than things like SPACs or direct listings, where there isn't a capital raise happening at the same time. And so it's less important what the actual market is doing that day. 

NYSE's Stacey Cunningham describes why this year saw so many IPOs - and what could be in store for 2021.

2020 was a historic year for the stock market

AARON PRESSMAN: We're speaking today from our home offices-- I can tell. I'm sure the audience can tell. What do you think you've learned about the Google workforce? And maybe even when the pandemic is gone, will there be more flexible work? THOMAS KURIAN: Yeah, we always say, if somebody sat in January of 2020 and said, let's imagine a time where everybody would have to work from home, 100% of the people, they would have said, well, that'll take us six years to transition to that, you know? And people adapted amazingly well. And what we have seen that's kept our teams motivated is two important principles. One, a sense of purpose, and leadership during this period can be done a lot more effectively if everyone shares a unified sense of purpose. And for us, it was lots of organizations are going to depend on our cloud technology to do their business. So we need to have a shared sense of purpose with them in supporting their mission. Secondly, being flexible and adaptive. I'll be honest with you. We've seen different shifts in different parts of the world. Some parts of the world are largely back to normal. Other parts of the world are still affected and so, rather than have a global policy, we've been very adaptive letting leaders in our different cities and countries make decisions because people do work in a local context in many ways. If you have younger employees, they depend on public transit to get to work. And if they can't take public transit, saying, you need to be back at the office does not make sense. So being adaptable and having a common shared sense of purpose has probably been the two most important lessons we've learned during this period and we continue to learn in new ways. And the biggest thing we've seen is listening to our employees has always been a thing that's given us the most insight in what to do next. AARON PRESSMAN: And I heard you've invented the on-site, off-site? Is that right? Tell me about that. THOMAS KURIAN: Yeah, the on-site off-site came from this idea that engineering leaders typically, when they wanted to collaborate and build a product plan for the next year or come up with a new concept, they used to go off-site to find uninterrupted time. But now, with everybody off-site every day, how do you bring people together in a more physical space? And so we came up with this notion of an on-site off-site where people would come to the office, be in a socially distanced environment in the office-- for instance, in some places, we have campuses where we have lawns and other things. They sit outside. But it allows them to have more of a physically intimate team meeting than just doing everything digitally. And we've seen that that has helped a lot to bring greater cohesion to some of our teams, particularly for newer employees to meet the managers and things like that. AARON PRESSMAN: Think I'm going to bring that idea to Fortune. 

Google Cloud CEO on lessons learned from pandemic

Thomas Kurian spoke at Fortune’s Brainstorm Tech conference.

Thomas Kurian sat down for a one-on-one with Aaron Pressman at Fortune’s Brainstorm Tech conference.

Watch: Google Cloud CEO on lessons learned from pandemic

 MAKAN DELRAHIM: Well, first, let me just say that I believe that antitrust is law enforcement. It is not and, in its best form, should not be, a function of picking winners and choosers, but really protecting competition and the free markets. And let innovation and consumer choice decide who should be the winner or loser of an industry. For a lot of reasons, I think creating a specialized agency could lead us into a path where we would actually diminish innovation. By that, I mean you would be put in place-- those types of agencies might put in place inflexible rules of the road that would end up benefiting those with the greatest market and political power. And you'll see that either through the agency and regulatory capture, those with the greatest political power will then favor appointees to those specialized agencies that benefit them. And it's just part of our system. So I'm a big believer in the law enforcement capabilities to go into court. You raise a legitimate issue-- are the courts able to address concerns about anti-competitive conduct fast enough? And that, I think-- and we're fortunate to have Judge Forrest here, who's actually had experience sitting in a courtroom, listening to these issues. And we have a lot of incredibly capable judges. But there is no question that you have conduct, and especially in the tech area, where you have business practices that change, what does advertising technology look like today, as opposed to it did just a year ago, let alone seven years ago? And when you have an investigation in a law enforcement function bring the case into court, go through the appeals process, you're talking about a five-year process before you actually have a resolution. And so should we rethink the design of that? I have come recently to Judge Ginsburg, who's the chief judge of the D.C. Circuit and at one point held this job as the head of the antitrust division in the '80s, had an article several years ago where he suggested not a specialized court, but a rotating specialized court where the chief justice appoints a handful of judges who have expertise in the field of law and economics and antitrust. And they could rotate around, but from the same generalist judges. And I think there's some value to that, where we wouldn't overload a judge who is now faced with this massive decision, but you have judges with some expertise in the field, and they could move these cases along faster. So I think there's a legitimate issue for policymakers to think about that as an issue. 

The fine line between anti-trust and anti-tech

As tech companies grow ever larger, do new oversight rules need to be put in place?

AARON PRESSMAN: You mentioned the COVID pandemic, which, of course, has been affecting all of us. In another parallel universe, you and I are sitting across from each other in a chair. But tell me, how has it affected IBM? How many people are back at work at the office now? And what's your vision going forward? Will you need as many offices as you had before? ARVIND KRISHNA: Aaron, it's a question that everybody is asking. And when me and my peers sit around, that is a question we're all asking. And I'll give you my point of view. So we are-- 98% of our people are effective and working. About between 10% and 15% in the office, the rest are really being able to work remotely. I'll say home, but let's call it working remotely. And it's quite effective right now. Remote delivery is happening. Remote R & D is happening. A lot of our back office function's remote, but 10% to 15% are indeed in the office. I believe as we get through the pandemic, now that people are used to this style of work, we're going to end up in a hybrid model. And by hybrid, I mean I expect that the vast majority of people will come into the office, but they're going to come into the office for meetings, for serendipity, for creative work, where you need to be with other people. And to baby-sit culture a little bit. However, I think 40, 50, 60 hours a week in the office, with 8 to 5, or 8 to 6, or 8 to 8 fixed times, are going to be a thing of the past, except for maybe 10% to 15%. And so what will be the model where you might only have, on any given day, 30%, 40%, 50% people in the office is going to be what changes. That means the office becomes a place to meet, not a place of cubicles where you sit down and do routine work. And that will decrease the footprint, but also change what, fundamentally, is the make-up of an office space, in terms of the tasks therein. 

Is remote work here to stay?

IB CEO Arvind Krishna says that as the pandemic ends, work will become a remote/in-office hybrid.

 JULIE SWEET: Today, I wanted to focus on something that I don't think we're hearing enough about. And that has the disproportionate effect on our diverse employees in terms of career advancement. There's been a lot of discussions about the pandemic hurting diverse communities. But at our own companies, what we're finding is that many of our diverse employees pre-COVID, we talked a lot about the fact that they needed help with their networks. They had different kinds of networks. And what we're seeing eight months into the pandemic, is that those networks smaller and sometimes more fragile before COVID have been really challenged in a world where things are remote, where it's harder to connect. And so if you haven't done so already, and you run a company, you're at a company, it's really important to ask yourself the question-- have you focused on the impact of the COVID on networks and advancement for your diverse employees? Similarly, what we're seeing as people are going back to the office, we're having lots of conversations about how fast to go back, who to go back. But you need that same intentional discussion around how do you bring people back and not disproportionately affect those who may not be able to go back, for example, those with children. And that I think has been a missing part of the conversation that's important that all of us focus on both now, and as we bring back our employees. [NO AUDIO] 

The pandemic's effect on diverse communities

 CLIFTON LEAF: There's an old adage, of course, that what ultimately matters is what we measure. And the visualizations that the GIS software that you work with, Este, really provides a template for what seems important. We've seen those dashboards in terms of the number of people getting the disease, COVID-19, and dying of it around the world. What is missing? What would you like to see us measure from there in those dashboards that is emerging as a critical component for our decision making? ESTE GERAGHTY: think I would say probably first and foremost, that we need to do a better job of disaggregating aggregate data. So making sure we understand gender issues, race/ethnicity issues, age cohort issues, , so that we can really get a better handle on what's going on for different populations. I think in public health and health care for that matter, we've not had that disaggregation of data at a scale where we can easily do the research and understand what's going on behind those aggregate numbers. Because when you aggregate data, you miss disparities. And so that would probably be the first thing that I think we need. And then the second thing I would say is finer scale mapping. When we see mapping across the country, often the best we can do is at the county level. And problems, again, happen at the community level and we need to be able to hone in on what's going on in different communities to make really targeted interventions that have an impact. CLIFTON LEAF: You know-- MICHELLE WILLIAMS: If I may-- CLIFTON LEAF: Yeah, please jump in. MICHELLE WILLIAMS: If I may, I think that was just a beautiful response. And I would say that that's public health. It's using the data to identify, to frame the challenge, identify where the problems are, where the vulnerable population. And once you get past that, then there has to be very clear, effective, thoughtful communication about what the risks are of the status quo versus the opportunities for interventions that will make the status quo better. And so I think it's really evidence-based, data driven pursuit of identifying where the risks are. And then doing interventions that mitigate, if not eliminate those risks. 

The problem with pandemic data - what we need to fix

Este Geraghty, MD, and Michelle A. Williams

Changes include disaggregating the data and finer scale mapping.

 Dan, about this California DMV thing. Seems like a huge milestone. Could you tell us about that process and honestly what it means for this bigger project? Sure. I mean, we've been working in R&D mode really for several years in building driverless technology and getting it to the point where we can safely deploy without a human in the driver's seat or without a human behind the wheel. And we've now reached that point where we're ready to begin doing that, testing that on the streets of San Francisco. And that represents the beginning of the transition of this technology from R&D mode into the earlier stages of commercialization. So it's a hugely exciting milestone for everybody at Cruise and I think for transportation more broadly, given the impact this is going to have on our cities. And if you're a baseball fan, which inning would you say we're in terms of this? I think it's still extremely early days. I mean, this is the first fully driverless testing that's occurring in a major US city. So, that's a huge milestone on the one hand and represents the culmination of years of work. But, on the other hand, it's just the very, very beginning of us seeing how this technology can be deployed in the real world and then moving into commercial service, and then having the huge impact that we expect us to have on transportation down the road as we scale this up. So, it's a big moment on the one hand. But it's just another waypoint on a much, much longer journey. Right. So, Dan, this being virtual brainstorm tech, it would be a shame if we didn't show everyone what on Earth you were talking about. So, you brought a video with you. Could we cue that up? And, Dan, could you explain what we're looking at? Yeah, sure thing. So, what you'll see here is one of our cars or a couple of our cars our testing on the streets of San Francisco. We have done more than two million miles of autonomous driving on city streets. And, as you pointed out earlier, San Francisco is one of the most demanding and challenging driving environments. You can see here both what the car is seeing and some of the 3D representations of that. So, it's an enormously challenging driving environment. And some might ask, why are we doing this in such a difficult place? And the short answer is that our cities are where the transportation crisis is most severe. And it's where we believe we can have the biggest impact with this technology. And so that's the place that we need to figure out how to make this happen. 

Driverless tech celebrates a huge milestone in California

Driverless tech can begun the transition from research and development to actual application.

 PAUL RYAN: Yeah, so to be brief and blunt, I would not have affiliated myself with a traditional SPAC. Frankly, because I didn't like the structure. I spent a career in public policy trying to reform programs, making them better. That's what I feel like we're trying to do here with EMPC. So the traditional SPAC, you have a misalignment of interest to start with. You have short term view. All the sponsors really care about is getting the transaction and the bankers like Liz was saying, just get big thieves. And that means you have to be a weaker than normal company, or a tough story going to market. But there are benefits to the SPAC process. What we propose is let's fix these deficiencies. Let's have perfect alignment of interest from the get-go, lower dilution and a focus on long term sustainable value creation. So what we propose as opposed to the traditional SPAC is not a 25% sponsored take at the transaction, 5%. And then 20% for the next 12 years of the stock appreciation after a high watermark and a 10% hurdle rate. So only does the sponsor do well if over the long term, the company does well. And we bring to the company a team of people invested in and capable of helping grow the business. So we're bringing top notch executives who really know the space we're going to go into to help grow the company over the long term. And the benefit of all of that is lower dilution, which competes favorably with a regular way IPO. But you get speed to market. You have a larger size, you can use projections. And so those things-- you have value certainty for the seller. You have the ability to bring a big team to help. So I think those things taken together sort of take the best from both. The best from the regular way IPO, the best from a SPAC, combine it into a product. I think that as a result, you'll get a healthier company coming to market. And some companies have more nuanced stories that need longer telling. You have a three month road show instead of an eight day road show, for example, with the kind of fact that we're proposing. So I think what we're trying to do is get the best of both worlds, align everyone's interest from the get-go, focus on long term sustainable value creation. And to me, that's good change. That's good reform. And that's what we're trying to bring to the marketplace here with this product. [NO AUDIO] 

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Paul Ryan shares his proposal for a new SPAC.

Brainstorm Tech 2020

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