Favorite Moments From Disrupt NYC Day Three

Our last day of Disrupt NYC was bittersweet, but we all got to ride a Tesla. Make sure to check out our favorite moments from Day One, Day Two, pictures of the whole event (including the Hackathon, Startup Alley, backstage, and our after parties), and all of the videos we shot while in New York.

Looking back, here are some of our favorite moments from our last day of Disrupt in New York City.

Chris Farmer, a partner at General Catalyst Partners, introduced InvestorRank at Disrupt and revealed the top 10 venture capital firms. He explained how InvestorRank looks at the connections between VC firms and is based on how connected and trusted a VC firm is. Many people were surprised to see where certain firms were ranked. Do any of the rankings below surprise you? Be sure to read more about InvestorRank here.

When Square COO and angel investor Keith Rabois took the stage with Michael Arrington, they began discussing the mobile payments product and his investment strategy. Knowing Square was on track to process $1 billion in payment volume within one year, Michael Arrington asked Rabois if he thought Square will ultimately do better financially than PayPal.

Rabois was more than a little optimistic about Square’s chances against PayPal, “We are not limited to just e-commerce, we actually enable real world payments, which is a much bigger market and is more valuable.”

To see more of Arrington and Keith’s chat, be sure to watch the video below.

You were busy, so I had to talk with others about amazing stuff he's going to say.

OKYou 're going to ride that offstage.

Why don't we just give it away to the audience right now?

OK, maybe we could.

Are we legally entitled to do that?

No.

Good morning everyone. I'm here with Keith Rabois, the COO of Square. Welcome to Tech Crunch Disrupt.

Thanks for inviting me.

Thanks.

So yesterday you were, was it yesterday? You were busy Monday. Yeah, it's already Wednesday. You were busy back in San Francisco launching some really interesting new products with Livestream to here. Thank you for doing that.

We appreciate you hosting us.

I want to talk a little bit about that. But in exchange for talking about that and pimping your new stuff, I want to pick your brain about a whole bunch of things, if you don't mind.

Sure. Let's go.

So first off, you hurt your knee.

That's true.

And that's why when I originally invited you to Disrupt you said I can't come because I hurt my knee playing soccer. And then now you actually made it out here even though your doctor told you not to travel.

So, yes. I sprained my myself.

My question for you is, what's a grown man doing playing soccer?

Some of us have to try to stay in shape. Some way or another and soccer's more fun than going to the gym. It's actually an
Did you just say I'm fat basically ?

I believe there is a connection between your physical fitness and your brain, so we try to encourage healthy activities.

So let's talk about Square.

Sure.

So what you announced. And who here has seen what Square announced? Are you guys aware of it? And OK, new question.

We should rebroadcast. Only about half of them have seen it.

We 'll force everyone. Who here has used Square either as a buyer or a seller?

There we go.

Wow. Yesterday how many people play CityVille, and it was like, me. Bing, Gordan and I, and that was it.

Awesome.

More people use Square than play CityVille. I'm actually proud of that the thought of.

That's the first statement from our perspectus.

So tell us about the two things you that announced on Monday.

So we were really excited to announce two things on Monday. One we call Square Register which is the default way to run a business in America in 2011 and 12, which is you take an iPad and you replace these clunky cash registers and replace these ugly point of sale machines. Your place in need for a menu, your place in need for ugly loyalty cards, paper and receipts that everybody throws away, all in the box, all three.

We just charge 2.75% for every transaction you swipe with your credit card. It tracks all of your sales. It gives you an inventory reporting. It's awesome.

Is it like an introductory rate? Sort of once you get them locked in, and you're taking over the hardware and the software in their business you're like it's 5%.

No, we don't believe in that at all. As you know, the financial services industry has historically been predicated on these teaser rates. where people, you'll see these solicitations in the mail if you're a small business or a local business, you'll get offers of 1.7% and then there's like 55 footnotes.

And in fact actually, if you look at these documents - and I went to law school, as you know - it takes me like an hour to read one of these documents. And, you know, like, I'm probably a little bit more suited than the average small business to do that. But there's no way to figure out what you pay with most services.

So we have a brand that stands for simple and transparent. What you see is what you pay. So all we charge for is 2.75% per credit card swipe. Everything else is free. Works with your iPad or iPhone or Android device.

So tell me about the card case.

So square card case is the flip side. So if you're a consumer, what we now offer you is a value proposition where you can just swipe your card once and return any time to a local institution - your favorite local coffee shop, your favorite local bar - and just pay with your name. So imagine going to your local bar...

So wait...so, okay. So, let's just say...so I come in and let's say this is my phone. I don't keep my...I don't have my phone with me on stage because all my friends call me. And then it's just buzz, but yeah, so...So here's my phone, right. This is the new...the Android H2O. All right. And...

It 's about as good-looking as one.

Yeah. So you are no longer the CEO of Square. You work in the local cafe.

Okay.

And you work the new iPad Square cash register.

Got it.

So I'm like heading down, right, and I pull up Square on my H2O. And I, you know, it knows I'm coming to a unit, it could pull up, like, your, sort of, stuff on Square, and see your menu.

So you see my menu updated in real time. So anything I change on my menu for the day, specials for the day.

It's right there on my phone.

You can even see the most popular items.

But I can't actually order.

You can't order that today.

But anyway, so I can't order, but I know, I like, oh, wow, the latte looks good.

Exactly.

Hey Keith, sorry about the knee, I would love a latte. Okay.

Right.

So you hand me a latte.

So I hand you a latte. And that's all you have to do now, since I know your name, I'll just say, "I'll just place it, put it on Mike." But if, let's say I didn't know who you were, you would actually tell me your name and say "Put it on Mike's tab."

Yeah, this is all confusing. I think what you're saying is on your iPad at the cash register-

Correct.

-it shows like the four people in the cafe that have Square sort of open or are users.

Exactly, you really need to see it.

If I've already swiped my card with you once, we're good. I just hit a button, "Pay."

You don't even have to hit a button, "Pay." You actually have to open the app sometime within a two block radius, like when you're approaching the store, consulting the menu. And then when you get to the cash register-

You hit a button.

I'm hitting a button.

I don't authorize at all.

I'm checking you out.

So you could just sit there and check everyone out for whatever you want and all I know is I get the receipt.

You get a SMS notification.

Is that legal? Can you charge a card without any authorization whatsoever?

It's very compliant. It's just like one swipe. Think about one click on iTunes or one click on Amazon.

There's no click. Except it'd be Apple clicking. It would be like-

You went to the store and said I want this. We 're just removing the friction and mechanics of paying.

Fair enough.

Led me to focus on talking to you about this great Cappuccino I just prepared for you.

So this is pretty awesome ut my question for you is, is why not stored value at this point? I mean, you're right there, right?

So, you're still charging my card for every little thing.

I think stored value, you have to create a stored value only where there's a value proposition for the consumer. So I don't think there's a lot of people running around that want to add balances to their phone. Like, would you do that?

Sure .

Who in here, raise your hand if you would actually add a balance to your phone, like in advance.

Why not?

Well, why?

Better than like, It's better than a separate 25 or $1.50 charge to my card why not have $20 or something in stored value. And you did this with Paypal because you're a Paypal exec and it worked out pretty well for you.

At Paypal, we never required you to have a balance. What would happen is, let's say I was an eBay seller and I would sell my goods on eBay.

Yeah.

We allowed you to preserve and keep them in the PayPal system. Actually it provided a very attractive interest rate. For a long time, it was the highest interest rate you could sort of earn in, let's say, a money market fund. And that encourages you to keep the money, because...

So you'll never do stored value, is what you're saying? Because backstage you said it's coming.

No, I didn't say...

I said, "is stored value coming?" You said, you know, "Yeah."

It's coming from other players.

You did that thing that said "I can't say, but it's definitely coming."

I don't believe in stored value where you have to advance money into your own account in advance of a purchase. I do believe there's some value proposition just like a bank, where someone makes money, they reserve the money somewhere, and they leave the money there, because it's attractive to do so.

Speaking of PayPal, We're talking about the growth rates at Paypal versus your growth rates at Square. And I know I used to love Paypal, not just because of the I think then at first and then the five dollars you got. Yeah, I loved it because you could pay through the infrared on the phone, you guys remember that?

Any of you guys just pay people and it's really neat. How, you told me that you're, actually even now, you're going to do a billion dollars in transactions this month.

No, I wish.

You're getting to the point where you've done a billion dollar run rate.

Run rate, Right, right, exactly.

And that's over seven, eight months?

So, no, that's if you annualize what we're currently doing.

Oh, I'm sorry. Actually you're on one billion dollars sort of run rate. So it'll imply that you're doing like, you know, you'll do, like, ninety million in a month or something. And it's been how long?

Seven months, we launched October publicly.

Okay, so where was Paypal after seven months? That's my question.

So Paypal had, the first three or four months actually, we out-executed Paypal so I used to have a slide presentation where I sort of compare our rate of growth versus That was before you joined the company, right?

No. I joined August last summer.

OK. That's when growth just hockey stick?

Yeah, totally accidentally, but good conflicts. But, in any event, the key comparison to PayPal is, PayPal was a free product. Many of you may remember that. Paypal charged That was, I was setting that up for the punch line.

Oh, you're setting up the punch line. OK, so in the fifth month, Paypal actually outperformed us in-group pretty well, but Paypal also provided its You're roughly tracking Paypal's growth?

Yes, except that we're not free.

Paypal paid for new users.

10 dollars per user per

How much did Paypal pay out?

$5 million in March of 2000, just that month.

Just in that month?

Just in bonuses. Let alone the cost of not

And PayPal was completely free, and you're charging the two point seven five percent introductory rate.

No, it's not an introductory rate. It's all, what you see is what you pay. No fancy calculator required.

This Google NFC, this They've announced without announcing, they're going to announce tomorrow, sounds like it's pretty competitive with Square, and you don't need the swipey thing. Is it just, like, game over, done? Go to your next start up, or?

Oh, of course, my, Well, that seems pretty compelling, right?

No, I think there's two things to point out, I mean, this is obviously all rumors. Speculation, I mean, I've read articles on the Web, there's no product yet live to play with, so, planning on a product that you don't get to use, It's pretty overt rumor and speculation at this point, they're going to use NFC that a lot of people check out, without a credit card.

So the way we think about NFC is, it's an interesting technology, but it's technology in search of a value proposition, so at Square we focus on how do we deliver, how do we deliver value to consumers, how do we deliver value to local businesses? So we start with, what can we do to make the world better for buyers and sellers, and how do we forge tighter relationships between them and take the friction and mechanics out of the way.

We don't see really any benefits to NFC in that process. Second thing is it has no relevance to a lot of. The core tentative square is that anybody can get paid with credit cards and debit cards, NFC has nothing to do with that. Google's not announcing a way for you to accept, get paid on your phone.

They're announcing potentially a way to pay with your phone, which is quite different than the core essence of Square.

When will you become an issuer, a credit card issuer? Because you're doing all the pieces, you say no stored value, although backstage you said definitely stored value, I thought you did, maybe, you had that look that said but the issue work, why not issue a credit card at this point? Square's a brand.

People love it. They certainly love it more than Chase or Bank of America. Why not just go there?

It's a great idea. We'll consider that. We have 100 employees, full-time at Square. We're growing really rapidly. We're adding one or two new people at least per week without fail. There's only so many things you can do at the same time.

If you did it, would it be, would you become a bank and do it, or would you just do it through a bank and a partnership to your local one?

I doubt that we would become a bank. But Paypal issued basically debit cards, they were called Paypal Preferred cards the top two hundred thousand users, they were very attractive, there was a lot of value proposition, it had like a five percent cash back, it was actually a great program that Reed Hoffman came So there's a lot of ideas in the space that we could take advantage of and innovate on top of, but we're not committed to anything right now.

Come on. Give me one piece of hard news besides the stuff that we live-streamed over there.

Hard news. I don't know.

The stored value? Probably not going to do it. No commitment. Issue a credit card? Probably not going to do it. No commitment. Google? No chance it competes with you. That's actually a pretty strong statement. But nothing else on this? If there's not, we can move on to your investment sort of stuff.

I 'm happy to chat about anything. Obviously we have lots of future product plans. We always explore them internally and debate them. We just did an announcement on Monday, so we'll have some interesting things.

Well, congratulations, I'm very excited about it.

Thanks, we'll get you using it as soon as you get back to San Francisco.

I'm, theoretically I'm an avid Square user. I just, I don't like it. I don't like the swipe thing so much. And I told Jack this, actually that is a question. I don't like the design of it too much, I think it would be better question about Jack is, like, you are...I assumed you were acting CEO, but you say you're actually still the COO.

He is the CEO of this company.

Of course.

Is it weird that he's doing both? Is it hard to get his attention sometimes or...?

No. I mean, my role hasn't changed a bit. Like, so I've been COO since I guess September of 2010, and the company operates the exact same way it always has. Jack sets the vision, product directions, the pixel perfection on everything we do, and runs engineering, runs design, and that hasn't changed at all.

Okay. And so it's working out really well?

It's working out great.

No complaints at all?

Oh, no. Not at all.

You don't feel like, you know, you're the mistress, and he's married to Twitter or anything like that? Nothing bad to say at all?

No. Absolutely not.

So you are one of the most impressive angel investors in Silicon Valley. I mean, you...there's this hit list for decades now that you've invested in. You've invested in...you're on actually the boards of Yelp and Zoom.

That's correct.

You have invested in Airbnb, which is just the darling right now of the...I mean, everybody You just saw onstage why.

What valuation do you invest in at Air B;B? It was the last round, right?

Oh, no. It was, well a while ago.

What was the evaluation then?

I can't tell you, but it was a lot lower than it is now.

What is it now?

Why don't you ask Brian?

You invested in Youtube at what valuation? This is one you can tell me, right?

It was the first, I can't remember, it was somewhere around $10 million dollars ?

$10 million dollars?

I don't remember.

And that sold for one point six five.

Correct.

Billion.

You were an investor in LinkedIn, or you were at LinkedIn, Both investor and employee.

How much money did you personally make on the LinkedIn IPO at a $10 million valuation.

How much money did you make on your sale to AOL?

I will tell you, if you tell us.

That 's a hard trade.

You invested in, to be honest, I would have made you tell first and then I wouldn't of told.

Journalist .

You invested in Quora.

Yes.

And that was a 90 million dollar valuation.

I won't confirm the valuation but it was part of Benchmark Surround. Okay. You like that investment?

Yes. Oh, yeah.

And then Palenteer?

Palenteer.

Okay. Anything else?

Event Right, another great company.

A huge winner. It looks like they're going to win.

Kevin's doing awesome. Kevin and Julia both are doing awesome. You should have them onstage.

What do you look for in an investment?

People. Mostly people.

Team.

Like, the individuals founders.

Idea really matters far less than--

People first, idea/product second, but product is really a way of reflecting back on the person. So, you can sort of see by the product instead of a resume.

Yeah.

Like, how the person thinks about the world and what kind of things the grasp.

Good.

And things they can teach you.

Yeah.

So, looking at the product is awesome and then people.

If you were fetching yourself, as an investor looking at you, What would you say your biggest weaknesses are?

I am not a product visionary. That's why I like working with those who are.

You're not a product visionary?

I'm pretty good at picking up whether a product will resonate or not, but I can't actually create that from scratch.

You like being with the product visionary and help making it happen.

Yeah, I mean, there's not that many product visionaries, like, in the Valley as a whole. I mean, that, we're sort of limited.

Let's name them. So Jack's the best. Jack's the best I've ever worked with.

Your boss, right?

Yeah.

Yeah, OK. Who else? Would Steve Jobs-

David Sacks is great. So David ran product to Paypal. He now-

Somebody who wasn't at Paypal. So Max, David, let's leave those guys out.

Okay. So the core team's amazing. It's a combination of Adam, Charlie, and Rebecca for the most part, started the original.

Okay, let's take out anything you've invested in as well.

Alright. Lots of Apple products. Unfortunately, I don't own any shares, never owned any shares of Apple. But I use them all.

Are all product visionaries a little bit crazy?

Yes. Absolutely. I think all great entrepreneurs are a little bit crazy actually. I sort of had this phrase once that, sort of I was brainstorming with Peter Till once which was like "Only disruptive people create disruptive companies." If you're completely conventional, it's very hard to create something radically interesting.

Tell me the chances, 0 to 100%, that Square will be more important culturally than PayPal.

Culturally, that's a good question. Fifty-fifty. and more, and we'll do better financially. Considering PayPal, the investors it was ultimately 1.5 billion. Right?

Yeah, so I'd say 95%.

95% chance.

Yeah. Yeah.

Also I just think our market is so much more massive. So PayPal only serves eCommerce which is 5% of the U.S. economy, 6% if you get, you know, sort of stretch things. We serve the rest of the world which is 20 times larger. So, Paypal is limited to eCommerce. The real world is 20 times larger so we should do 20 times better.

Plus our value proposition resonates better.

So, you're saying Square is worth 30 billion dollars then.

Today? No.

You said 20 times better.

Paypal has been around for a while. Paypal wasn't worth 20 billion dollars, a year after launch; it was worth maybe around 500 million dollars, so we're much more valuable and will be more valuable than PayPal.

So, you're only worth 10 billion right now?

If you want to invest at that, we can probably cut a deal.

So the headline is, Keith Rabois, Square CEO, says Square worth 10 billion dollars.

That'll be like the same as Peter Thiel like headline in 2006 about Facebook being worth 10 billion, which proved to be somewhat conservative.

I know you have been traveling, but have you seen any of the Disrupt battlefield companies?

Yeah, I've been to reading a lot about it.

Yeah, what's your favorite?

I personally like the heart rate monitor one. I think the technology is amazing. I think that's been incredibly difficult to do. I don't know if it's the biggest business of all the things you've had onstage, Yeah.

but it's the one product that I would love to have.

They got into a swearing match with Chris Sacca onstage yesterday. Didn't do so well with the judges. I liked it a lot, too.

I personally would really like to invest in it. I think it's awesome.

You 'd really like to invest?

Oh, yeah. Sure.

Are you guys out there in the audience? Or did they go home in a huff?

They went home.

You know, they might want to talk to you about that. Any of the others? I don't want to put you on the spot because I know you No, no. I mean, I love seeing the update from CloudFire, because you may What do you think about remember I was the judge for them last time, Yeah, but they're--

They're awesome.

What do you think about Get Around? You know, the, sort of Airbnb for cars.

I've invested a little bit in something that's partially competitive called Zimride, so I probably shouldn't talk about it.

You probably think Zimride's way better.

Zimride's amazing.

Yeah. Okay. Great. Actually, there are probably a couple of questions the audience would like to ask, Sure.

and we have a minute left. Anybody have a question for Keith? Just tell us who you are first.

I'm Cameron Kunduth, and I'm wondering, Square lets any individual sell goods and services. How do you see that disrupting traditional small business models?

I don't think we want to disrupt traditional small businesses, I think we want to empower them and make life easier for them, like, historically, most small businesses have been unable to accept credit cards, and credit cards will make your business grow. Depending upon what kind of business you're in, it may grow as little as ten percent, as much as eighty percent.

I think that's what you meant, is how will new Burton businesses flourish is what you meant.

No, actually, I see Square being disruptive in the sense that if I can hold inventory in my apartment, then I can sell it to you, and not have the overhead of having a storefront.

Sure. Yeah.

Well, it's been great for the drug and prostitution trade. Right?

That's why I said services as well.

Yeah. I know, the joke is old, but it's just, I can't let it go.

I think every time I see you, you have the same joke.

It 's just so obvious. Do you remember that guy did that video?

Yeah.

We'll play that later, of the guy that was joking selling drugs. Get a pile of cocaine and

We screen all of our transactions methodically, and all of our users are vetted very carefully. Cash is used for all of those You can say with 100% certainty, Square has never been used for any kind of illegal transaction including drugs and prostitution.

No. Nobody has ever moved money or any type of transaction whether Paypal, Amazon, Western Union Square CEO admits Square used for drugs and prostitution.

No. I said all other services have been used for drugs and prostitution, but our basic mission is to create the ability for small local businesses to thrive.

One of that is accepting credit cards without the friction, without being disqualified, so traditionally, to get a merchant account in the United States, you had to have a FICA score, and the FICA score would screen out sixty percent of our users. It has nothing to do with--

Yeah, but you can use PayPal.

You could use PayPal online.

You could use cash.

You could use cash, but then you would lose out on sales. So if you don't accept credit cards you're going to sell less. Like, people run out of money. Like, when say you're at a farmers market, you only brought with you, like, fifty dollars; and if you see that next good that you really are in love with, you have no way of purchasing it.

So, that's the first step.

Do you feel as though your question has been answered? Alright. One more.

Hi, my name is Rachel [xx]. my question is about using Square for charity, are there any plans to waive the 2.75% fee or to make it easier for sort of flash fund-raising, like for example, with the tornadoes in Joplin and Oklahoma?

So no, because our costs are the same, so in other words, Visa, Mastercard, AmEx, Discover charges the same regardless of whether the transactions from Mike's garage sale or for your charity.

I love garage sales, by the way. It's like a weird thing with me.

We saw that motorbike.

I want to give that away so bad. I don't know what the legal liability is if we just give that away. But if we gave to somebody, how are they not going to let us give it to them.

So processing for non-profit charities has been one of You want to do an auction later?

Yeah, let's do that. We'll sell it through Square.

We'll do it later. I'll check with the lawyers and see if we can get away with that.

So our rates are actually much better than if you look at other competitors, other options for processing for non-profits, actually they're actually very, very expensive a lot of compliance costs associated with nonprofits. The banking industry is quite conservative about nonprofits. Historically people have been able to abuse the nonprofit label so we have be very careful about who we process for.

I think what's best about it though is that it gives you an opportunity to make an on the spot donation that you maybe otherwise couldn't make, or wouldn't make it.

So imagine you're a candidate for office, and let's say I was running for Congress, and I come up.

Do you think you ever will run?

No, I have no intention to, but, as you know, Jack may run for mayor. So, a great product for raising money is, when you say, oh, I'd like to write you a check tomorrow for.

What do you mean I know Jack may run, I didn't know that.

You didn't read that in Vanity Fair? You need to improve your reading list. Well they enhance it. Well imagine I'm a campaign.

I'm not going to let that one go. Vanity fair would be improving my reading list. So go ahead. Sorry .

So imagine I'm running for office, and instead, normally, I would approach you, and say, will you write a hundred dollar campaign contribution?

Yeah.

And say, oh, I'll send you a check tomorrow.

Yeah, yeah, and that never happens.

Of course, you know, 90% of people forget to do that. Imagine now I come up to you and I say, "I'm running for office Mike, give me your credit card". And then not only are you on the spot to give me the contribution, which maximizes the opportunity and the chance that you do that, but also I'm going to look very carefully at the amount you're contributing.

Have you seen any homeless people try to collect donations using Square?

I have not.

It'd be a great marketing trick. Okay.

Thank you.

You want one more?

Sure.

She's been waiting.

We'll just cancel the next panel.

Okay, one quick question. I'm a student, I just finished my first year at Michigan, and I'm interning with the Kaufman foundation this summer, and I had a question about your take on investments. Right, so, I noticed that during the startup battlefield, a lot of the companies didn't mention what the current market was.

Looking like what competitors are out there, how do you rank that in what you evaluate throughout when you take a look at a company?

So I don't look at that very much at all either. And biggest reason is the best companies I think are in non-consumption markets, which is basically they are forging a market. If you think about Youtube or Air B and D, there wasn't necessarily a clear market opportunity. You're creating that andTwitter is a great example of this.

If you'd asked Twitter what was the market opportunity for Twitter, what would the answer have been? So, that's one reason. Second thing is, I actually don't believe that competition dictates your fate. I think, generally, if you look in the mirror as an entrepreneur, it's what your team decides to do or doesn't do that dictates your fate.

So I am more focused on what 's the quality of the individuals involved?

You know it's funny, everybody says that, and as an entrepreneur I get that, I mean, I've been in a lot of failed companies and one, as Carol Bart says, very tiny company. And it is that. It's sort of the decisions you make on the fly, the ability, it's not even intelligence, it's just ability of a team to work together and make those changes.

And I truly hate the idea of getting user feedback on what your product should be. I love that saying about, you know, a camera was a horse designed by committee.

Right.

The boldest entrepreneurs are the ones that say, "We're going to build this, and then they'll come". It's so easy with hindsight to say this Steve Jobs has done this over and over again, or same with Twitter. But that's what I get most excited about, is stuff where it's like, wow it's created a whole new market.

Yeah, I love that. That's what I'm looking for is someone who actually has a vision of what they want to do in the world and then they just make it happen. And eventually, you have to sell those movie-- it's like producing a movie you can't build a movie by, like, painting by numbers, and if you did it would probably not be a pretty exciting movie.

Eventually, you do have to sell those movie tickets, so the market will give you feedback whether the movie is interesting and entertaining, but you don't create the movie by saying, "oh, these four people want to watch a drama, they like this actor, we're just going to throw him over here". That generally doesn't work out so well.

And then you square to buy the movie ticket.

Exactly. Perfect.

Okay. The last question I have for you is, how many investments a year do you make? And how active are you right now? And how much do you invest normally?

So, last year I invested a lot. In probably forty five companies.

What 's a lot for you, like $10 million?

I don't even, actually, scarily, I didn't even add up the total. Generally I invest a typical amount for an Angel.

You probably don't even get out of bed for bed for less than a million dollars at this point, right?

No, I invest a very small amount of money. Typical Silicon Valley Angels invest, I'd say, below 50 to 100k is the most typical dose.

Yeah, that's a tiny amount of money.

So, that's generally what I'm investing.

Okay.

But since I've joined Square, I've tried to avoid investing as much as possible. I just don't have any free time. The only times I invest are really if I know the person. So, if somebody I know well is starting a company, they are going to call my cell phone or text me anyway for advice, so I might as well invest but I'm generally not looking for new investments.

Okay, so you're saying here that people should be emailing you then if you--

I can redirect them to other great investors.

Hey, thanks a lot for flying out here, especially with the bum knee. And congratulations on everything, it is really going well for you.

Thank you very much. Thanks for hosting me. See ya.

Careful .

Yeah.

As you can see in the video above, there was a shiny and orange Brammo Enertia electric motorcycle onstage behind Rabois and Arrington. After their chat, Arrington looked at it and spontaneously decided to give the motorcycle away. After running backstage to have a short talk with Brammo CEO Craig Bramscher, it was a done deal. Everyone got excited and audience members raced to the microphones.

Arrington called Bramscher up onstage, as well as Paul Graham (Y Combinator), Keith Rabois (Square), and Roelof Botha (Sequoia Capital) to help judge. Arrington told the audience they could submit 10-second pitches on why they should be chosen to win the motorcycle. Pitches were made that included shouts like, “It’s my birthday!” However, one sweet lady who wanted to win it for her son before he had to leave for the marines won the bike.

The pitches were really funny. Be sure to catch all of them below.

So the motorcycle, you guys know I keep trying to give it away. So I find out who it is. It's Craig, from Brammo, the CEO of Brammo. And, he's like yeah give it away. So we're going to give away not this one but one just like it, and we'll have it shipped to you. That's cool, right?

And what we are going to do is have 10 second pitches. So, if you want this motorcycle, start thinking about what you can say in 10 seconds to convince an excellent panel of judges we put together at the last minute. Paul Grahamm has volunteered, thank you very much for being up here.

And than Craig will you come up? It's Craig Bramshire is the Ceo of Oregon based, Brammo. Really cool stuff. It's like Tesla's, but they are motorcycles. Roulof Bhutta is from Sequoia. We interviewed him yesterday. He is going to help, and, the, Keith Roboy from Square is also going to help judge.

Keith, also for the runner up prize, offered to give away, for absolutely free, this otherwise normally also free, square card reader Which is, which is pretty cool, so actually he didn't. He meant to say well if we're going to take like a five dollar charge or something that we could use Square, but.

So you guys you know have a seat if you want. Start lining up at the microphone, we are going to have ten people make your pitch, you can say because, any reason you want at all, and we will do it quick caucus and then we'll give it away right now, and we will even ship it to you as long as it's in the United States.

Who wants the motorcycle?

So it's going to be the first five at either microphone will be able to make their ten second pitch. If you're not the first five, give up on it now or convince the person in front of you to give up your spot and ten seconds. Go.

My name is Muhammad. I don't know how to ride a motor bike, but I would love to have this motorbike, because I will trade it with Paul Gram for half an hour of his time and get me back on my show.

Great. Stay up here though. Go.

You've got a start up, we're building a platform where we already have 20 thousand daily active users. We can take care of sign up, inviting your friends and putting your well I just also all of the things, a combinator might use it.

Good, okay. Go No pitch, I just want to get the hell out of my mini van.

So that's it.

In my opinion, I'm only two thirds of the vote here, I would say that's OK.

My son enlisted in the marines and he wants a motorcycle but if I give him a motorcycle maybe he won't go in the marines and go to Afghanistan.

Oh, that's . Here.

Angela motocinta.me using everyday citizen to deliver your goods.

This is not a, well granted with these people on stage, I understand why you don't care about the motorcycle. Anyone such a, go.

Luke Depper, I am a pretty crazy guy, my lifetime is spent in the motorcar racing and I wants to do back flips on that motorcycle.

OK! How many is that, ten? I am not counting.

No it can't be ten.

OK go!

My name is Bill Fisher, I built the best team to make sure everyone sees thIt is my birthday.

Ohh. Boooo.

I did, I did, I will as if I did.

Come, may I see your driver's license, or ID before you go?

So, I just want the moral side of my idea. I am starting, people really self-indulgent using Twitter so I'm building basically a gaming platform that you just get points for tweeting and just saying what you're doing. Like, if you have mentos and diet coke, you get five points. People just get the best thing about video games is the instant gratification and people are self-indulgent, so gratified.

Great, go.

Name's Ian, I want the bike because my wife won't let me buy one.

Hmmm.

Hi, I am Henry King. I am from Cunningham Mania and I study Robotics. I want to get the bike and change it so that my grandmother can ride it. Thank you.

John Birdsong with Open Study. I drove a minivan all throughout high school. I am just getting up here to say I vote for that guy. The minivan folk. Jonathan Soundscape and mission that would help you find cafes that are playing the you music that you like or any other venue.

Go.

I'm Rachel I usually bicycle everywhere I go but I was recently hit by a car while bicycling and I can no longer pedal so I really need that to get up the hills of San Francisco where I'm living to start my startup.

Go .

Hi, Best Vendor, we're using social recommendations to help small business leaders make faster, smarter purchasing decisions, seek funding from Peter Teal.

Go.

I'm not an entrepreneur but married to one and I need a break.

Go.

An ultimate map that does actually what a map should do, tell you what's around you. When you go to Mapquest or Google Maps, youn app that uses social networks to do citizen science allowing researchers to connect with citizen scientists, crowd sourcing, data gathering.

Two more, go.

Alex Majursky, the biggest problem of my life is I spend way too much money on conferences. Am I right? I want that as my mascot. Go!

My name's Ian, it's a reddit or DIT clone, but they're both coming in real time after the comment.

Go!

Hi, I just turned 18 four days ago and I'll be entering at Kauffman in Missouri this summer and I need a motorcycle to run away from tornadoes.

That's it. OK, one more. Go!

Hey Scott, I'd love to get that bike and rent it out sort of Air B and B style.

No one up here is named Scott. Correct ? Oh, you are Scott. Okay, we're good, thank you! Can you turn our mics off, everyone on stage ? I don't know if that is possible but--

Hello?

is it that guys birthday? Wow, it's his birthday. Right the woman who couldn't pedal. Yeah, that's Mic's on.

It 's not even close to unanimous but we have a winner. It's the woman who has the son that may be going into the marines. Where are you? OK, come on up and we'll take your information well theoretically you're going to get a motorcycle so, thank you so much for doing this guys. Thanks very much.

Who wants the square reader? Don't all come up running. You can use your credit. OK, there you go. Thanks guys! Oh, look!

Tech Crunch.

Since this was our first Disrupt of the year, we wanted to try something new. To our delight, it actually proved to be one of the biggest hits of the whole event: Paul Graham’s ‘Office Hours’. The goal was to reproduce the sessions Graham and others hold with each of the startups who participate in Y Combinator. For these sessions at Disrupt, six startups were randomly chosen out of the audience to come onstage in front of a few thousand people to pitch their idea to Graham. If you haven’t seen it yet, be sure you watch the video below. It is a must see.

One last favorite moment was when Michael Arrington sat down with Google’s Marissa Mayer. With Mayer having been to all of our events, she’s a pro who is always ready for any hard questions. After revealing some key numbers and stats on Google, Mayer said she expects traffic on Maps for mobile to exceed those on the desktop Maps.

Wanting to know more, Arrington tried to get Mayer to name what percentage of total searches are made with mobile devices, which is a number Google hasn’t given out yet. Arrington jokingly tried to coax it out of her by threatening to tweet out her cell phone number. Asking if she’d rather he tweet out her cell phone number, or reveal the mobile search number, Mayer told Arrington he could tweet out her cell phone number. Of course Arrington never did, but it was a hilarious exchange to watch between the both of them.

Make sure to watch the whole interview below and continue to scroll down for some of our favorite pictures from Day Three.

maybe we can actually have a fire back here. But I love the fact that he duct-tape to his hand

Marissa, Please come up.

After you.

Hello hey, how are you ?

Nice to see you, I'm doing good. Thank you for coming.

Good to see you.

Look at this; getting ready for the finals.

Yep, right after it. Right after this is the break and then the finals.

Okay, welcome to this rack.

Thanks. I'm glad to be back.

You've been, I think you've been at every big conference we done.

I think so, The Defcon 14, The Defcon 15 last year, San Francisco You judge many startups and you've been on stage with me many times.

It's really fun. I'm excited to see what we've got in the final, in the final away I am particularly excited about this group of finals, I always love all the companies, but there's just there's someone here I am already addicted to. So, we have this, I don't think you know about this We have these motorcycle, the selected motorcycle. It's like Tesla.

Sure If you like it go for ride on, I almost got kicked out of my own event, security like swarmed me when I was like don't wreck but it's kinda cool so.

I'm a really bad driver and I haven't ever driven a motorcycle so that's probably not a good idea.

The first time I was ever on motorcycle; I just thought I could have ended badly, probably good. So we, I've interviewed you more than anyone else. And I like interviewing you, because there's always one or two things you'll give me, but you won't give ground on anything else. I never know quite what it is you are going to give me until it's all over, so, I tend to push pretty hard if something happens, so
you know, I want to talk about the products you are working on, I want to start with more general stuff, if that's okay?

Sure.

As a outsider I'm fascinated by what Goggles like now that Larry's the CEO sorta stepped aside "You know what are the changes, how does it feel?" You know that kind of thing.

Sure I mean I think that you know google are always gonna really focus on the user. And Larry So, I think that gonna spend big, even bigger focus now on products, on users and on the building great technology. we had some projects that started out small like Chrome and Android but over the years they've grown really, really big and those now feel a lot .

I want the control, to be a lot safer, I think it's rather a great change.

What's the general mood on the campus, do you say it's the same it's great Better, worst?

I think that it's really optimistic. I think there's a lot of optimism. It's clear we're providing a lot of value to users and we want to understand how we can even do.

More with that and so, I think that there feels like there's always been a lot of energy. I always joke like Google's really kind of almost twitchy place. Doing something, Yeah watching something, going somewhere, and there's even more of that now, so I think the energy is great.

You know, I've found in my career that the times that I've had real Petition and things weren't going to easily, there was a pond when I was most productive in doing my best work. Is it good that there's somebody actually doing good things out there, Facebook. But other, you know, being doing good things in search.

Right, I know, it's like sort of. But is that good, do you think?

Yeah, we've always had the philosophy. The rising tide floats all boats. But when there's increased competition or increased activity, right now there is in start ups, you can see that here today. And, you know, technology and search the Web, whenever that kind of thing happens, it causes one everyone to pay more attention.

So it's easier to get users and it's easier to get awareness. But it also causes everyone just to work that much harder and get much better. And you see that in a lot of the products. It's important then not to over focus on competition. With that said, healthy competition is really good for everyone.

It's clearly good for the end user but I also good for the companies.

Do you mind if we jump into.

Sure.

You are, what is your title? What it is.

It sounds more glamorous as VP of Product Management, but I'm VP of Maps and Local.

Ok.

So I some criticism or questions I guess, Did you see my April fool's joke?

I did.

So, in my April fool's joke, I suggested that places which is one of your properties has happened accidental categorized as a spam by a search team and removed from the search indexa And, I found it really funny. I really found it funny.

It didn't actually happen, though.

It didn't, no.

Watch as this big quote of mine ripple all through the press and having to answer all kinds of questions from people inside and go "Why did I say that when I had this headache?"

Yeah .

I did send you a message that said, "I'm sorry."

Yeah, it was good.

I was waiting and didn't expect for it to happen at 2 pm on March 31st?

Well it was April 1st. You know, our feeling is the International Date Lines are somewhat, you know, but fluid but if you look that my best- In my opinion my better April Fool's Jokes have had just a grain of enough truth in it that people sort of thought it was sort of funny.

I sued Facebook for privacy one year. That was when their privacy officer threw a latte at me, and actually people were saying I should sue him.

But there is something to be said here where you have control of a page now that if you do a search for a Starbucks at a certain corner, whatever, it has a map, which is yours, it has some database information about the company which, you own that, have you bought a company to have it?

And then you have, among other things, you have a lot of reviews and a lot of them are from Yelp and City Search or whatever you have. And there have been people who said that you're scraping that content nd that's a bad thing. What's your response to that?

Well our view is that for local, it's really about search. And so when people come to Google for search They expect it to be authoritative, they expect it to be comprehensive. And today, over 20% of the searches we see on Google are for local information. And when you go onto the phone, that jumps up even higher.

It usually looks almost like 40% of what people search for on the phone is about local information. So, we want to get people really good data when they do a search for that local information, so these pages that you're talking about really aim to be the comprehensive overview of all the different things about this place that are being said on the web.

And we have pointers follow them, we send lots of traffic all over the web to other local review sites, and it's really meant to be a directory. So, if you look at it there's a lot of information on the Place page, but there's really not enough information for you to make a decision.

Yup.

But where we see a lot of it, is people getting there, they get the open hours. They get the overall neighborhood Yeah.

And they jump in to some of these review sites.

One more time on this, then I'll let it go. Yelp used to be first, and now Places is first, and Yelp results are in there. And you send a lot of traffic to them through the Places... They freely admit that but is there a thought that you get your own, you take your own reviews, what you have enough, those other third-party reviews go away, and they're kind of gone for good.

How do you respond to that?

Well today we aren't getting a lot of long form of reviews, we get some ratings through things like google places, which are meant to help generated social recommendations and they are from phones and so they are going there if you look at the flow and when they going to end up on a place page. They end up on a place page when they've done a search for local information.

They may end up on places search or the may end up on place pages and the expectation and the promise we feel we need to meet to the user is to be comprehensive and authoritative and show them everything. And you feel like when you go to Google you get everything on the web about on a particular topic.

And so we're giving that to them, and then sending them on to those sites.

Alright. Another sort of not pleasant question, but there's some good stuff at the end. You have all these brands, I mean we were talking backstage, and my business is to understand this stuff, but there was stuff like Latitude oh yeah, and Latitude. And there's Places and there's social, there's local.

You told me that back when Maps first launched in 2005, it was under a tab called Local. I'm confused. What are the brands that matter going forward? What are we supposed to pay attention to?

Sure. So, there's been a lot of brands, and actually when I moved over to what we call Geo, Local and Maps last fall, that was one of the big first challenges, was looking at all these brands. Because we had Maps and latitude and navigation and places and HotPot and local search, and places search, and place pages, and you get the idea.

And we're really trying to streamline that. So, Places search is, just search. Place page is really about search. We had HotPot, which was an experiment, it's now a part of places, HotPot doesn't exist anymore. We had some local monetization products called tegs and boost, and we've unfunded tegs, we took Boost and made it part of the adwords family, so now it's called Adwords.

You're starting to confuse more at this point.

It's gonna be called Adwords Express. What we're trying to drive to...

It's called average at best.

Adwords Express. What we're really trying to drive to on the... Really two sides of the coin. There's maps and there's local. And maps is the geospatial exploration of a place, and we think it should be personalized, and it should tell you these were the businesses on the street that you were going to find really interesting, and give you a lot of information beyond just the map, which we already are doing today.

We show you things like latitude think as you know altitude should be a feature of maps, and then

Altitude is also your feature sort of how you gonna check in the place as well, okay.

and places is well local side of it. It's were you do a search and you get textual descriptions and photos and a good answer to that local search piece. So we think you need to have both. You need to have the textual, the descriptive side of it, and you need to have the geospatial side of it, and as I said earlier, when we first launched maps on the home page, if you look back at the internet archive, we called it local.

And the funny thing was, people came and they did a lot of local searches, category searches bakeries, pharmacies, and they didn't really know we had maps, and then and we named it maps, and then we kind of forgot that we had local. But those are really the two big pillars in this space, and that's what we're really focused on and how to make some of these brands and interesting features [xx] were done part of those two cores.

How are things going? Particularly, so much of, so much of what you do is mobile, and you talked about, you've mentioned mobile a dozen times already. You know, how are-how are things going on the mobile side with-with your properties?

So the Mobile 5 is growing hugely. I actually can announce a new mile stone today which is that we, just crossed the 2 hundred million installs of Goggle maps for mobile. So it's been something, it's beehuge tear.

It's installed and active, I think. Right?

That's active. Active and installed.

Yeah, yeah.

And so Google maps for mobile, we were lucky enough to win a crunchy back in-in January for best mobile app I think And with that much of momentum it has continued for us, so it's huge. The other thing is back in March we made the observation that of about 40 percent of our traffic was for mobile, which is really high. I mean something that was born on the web like maps, to be seen 40 percent traffic, you know that's really, really huge. And now what we're seeing is that it's crossing over on weekends.

So on weekends we have more mobile maptraffic than desktop maps. And it looks like it's going to cross permanently in June. At which point in time we'll always have more maps traffic than desktop traffic. Best top maps will always be important. But maps on the phone that in fact knows where you are and can actually help you figure out how do I get from where I currently am to where I'm going.

Those types of things that makes it a real killer app.

Navigation is also part.

Yeah.

That is my favorite. Yeah. So, that's the news. The two hundred million instals is inactive, that's new, that's never been disposed, right? Clearly one of, if not facebook, might be it' s one of the if not the biggest of their mobile apps.

One of the biggest mobile apps in the world. We're very proud of that.

And then the crossing over in June? You're pretty sure it'll happen in June?

I think it'll happen in June, yeah.

And you said that 40%, you said 20% of searches are local. What percentage of searches are mobile at this point?

We haven't actually disclose that number. It's been growing, it's been growing suddenly.

Right, so what is itSo 20% backs and 40% back on the front one but I can't give that sorry.

I really want to know. No?

Sorry.

No? Alright. The crowd is cheering that you are not giving information. Okay, so one more question on your day job. What is your goal? What is your goal next year to be successful, do you think?

Sure, y goal is to help people find where they are going and figure out, how do you get there efficiently, where are places you should that you never knew about. So can we get you great recommendations, and that really means getting a lot more users interacting with information. Getting them doing ratings, getting them checking in on latitude, really enhancing our data, really helping to figure out where people should be spending their time.

And on very far reaches I'm starting to look at what I call contextual discovery which, you know, I've always loved Search, I worked on Search for a long time and contextual discovery is, can we do a search without someone doing a search? So can we figure out from your context you know, where you are a little bit of where you've been?

What you've been doing? What we can pick up on? Can we give you just the right piece of information? Can we tell you your friends are right around the corner? Can we tell you, if you were a tourist somewhere, an interesting factoid about that business? Can we tell you, if you walk in to a restaurant where a friend was last week, what they ordered and what they thought of it?

So you know whether or not you should order it. Those types of things are the things we're starting to get very focused on.

You know there's are a couple of start ups that launched in the battlefield that aren't in the final group that you'll be judging. They're this close. One is that Leoda and one is Spot On. I think both of them those things you are going to want to copy.

I want to make sure you have the chance to meet them if you can. Are you guys, you know. I'll introduce you separately.

Yeah Yeah. It's just really cool stuff going on. That's alright, I said to copy, I'm mean.

Personal life. You, suddenly your name keeps popping up in investments. You know like, "Marissa Mayer is an investor." And so we know about Square, and we know about One King's Lane What else have you invested in?

There is a few of them. I really love entrepreneurs. I love investing. I love learning about new companies. That's one of the things that make me really excited about TechCrunch. One of the issues is that Google's business is really vast, and so there's a lot of times where there would be a conflict of interest, but there's a lot of companies like Square or like One King's Lane.

I'm also an investor and maintains, I have a friend who has a genetic company called Gene Security Network, and I've invested in that. So, I've been active as an angel now for a little while, and I really think it's fun. It's great to see. You know, I got to be at google when we were just 20 people.

Meeting them when they were just 8 people, and get to be there through that growth phase. And I love watching how the companies go through that, seeing if I can help people go through that, and I just think it's really exciting. Right now is a particularly exciting time in Silicon Valley and here in New York as well and I just think it's really great to see all the companies starting, how easy it is, and just the technology going in places that hasn't ever gone in before.

Do you work with anyone? People, if they want a investment from you, do just have to find a way to get to you or do they, I know you said you obviously. funds as well. But is it- you just try to keep that low key? Or are you an active investor?

Well I'm not an analyst or anything like that. So people generally do have to find me. But I'm findable. I mean, my first- my email's just my first name at google.com. My GMail is just marissamayer@gmail.com, so I'm pretty-

OK, what's your cell phone-

If you take a guess, you can find me.

What 's your cellphone number so people can text you?

That is one thing I will not put out there. But if you want to know.

So, I have your cellphone number. So would you rather tell me the percentage of Google searches that are mobile, or for me to tweet out your cell phone number? Which one would you rather have happen?

Well, I think you can put the genie back in the bottle if you give out my cell phone cause I could just get a new one even though I'd be really annoyed at you, but I can't put the genie back in the bottle if I tell you the mobile search number, so I think I would have to take the risk with the tweet.

Alright, thank you so much.

Thank you very much.

Yeah, alright. You'll be back out on stage in a minute, but thank you for this, alright.

Yeah, thanks.

Thank you.

Thanks. Man I'm exhausted.

Yeah it was really hard.

It was, she is a hard interview.

She is hard. It's like pulling teeth.

It just there's good information in there but you have to ask the right questions the right way to get it.

You got someone to get the 40 percent maps. So we're going to take a 15 minute break. And when we come back to the battlefield in the sixth

Again, we wouldn’t have been able to do any of this without our partners, sponsors, and volunteers. A huge thank you to: Ustream for providing our live streaming video, Parlor.fm for helping us network on-site, GroupLogic for putting files on our judges’ iPads, doMen (.ME) for giving us a new directory, Oyster.com for providing wonderful hotel discounts, New Atlantic Ventures for showing us exciting new startups, EventBrite for hosting registration, Business Only Broadband for keeping us connected, VCorp for providing printing and PR services, and DailySteals.com for offering giveaways.

Thanks to the additional support provided by PopChips and Smith and Keats. And to Ooyala and Producteev for online video, editing, and management services.

If you’d like to become a foundational part of the Disrupt experience and learn about sponsorship opportunities, please contact Jeanne Logozzo.

And of course we couldn’t forget to include this in as one of our favorite moments from Day Three. Congrats again to Disrupt NYC 2011 winner, Getaround!

Until next time.

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If you would like to attend Disrupt SF, September 12th – 14th, extra early bird tickets are on sale now.

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