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- [Katharine] So your company is heavily involved in the development of AI and yet you say that it doesn't quite exist yet. Can you explain that?
- [David] Well a lot of it is definition Right, so we all started with automation, then we built machine learning where the algorithm started to get smarter. Now as machine learning has gotten more and more complex because of Moore's Law, Bezos's law and others we're calling it artificial intelligence. So I always joke when we call it artificial intelligence, I say we have to because all our competitors call it that. But I believe to truly create artificial intelligence, you need to create curiosity. And even in an scenario where a machine can beat somebody at Go, or a machine can beat somebody at chess, the machine doesn't wake up that morning and say "I want to learn how to play Go, I think that would be cool. I'm going to Google Go" and it's going to learn the rules and get smarter and smarter. What happens is, the human tells the machine "we're going to learn to play Go together" and then it does that. So when the machine can actually wake up and say "I want to do this" that's when I think we'll really ascend to what I call now true AI.
- [Katharine] I got to say that's a little scary because I'm thinking of my Amazon Alexa waking up one day and being like "We're going to learn how to cook beef today"
- [David]Well that would be bad if you're a vegetarian.
- [Katharine] Ya exactly! So you also manage a platform that launches over two billion cookies a month and I'm wondering, we're seeing all these data privacy headlines, how do you keep those cookies safe?
- [David] So first of all, there's two things that when you're collecting the type of data we do, I'd say you've got to think about more than almost anything. Data privacy and data security. And we don't just launch 2.2 billion cookies a month, we're tracking it across 4.2 billion I'm sorry, 4.2 million publishers across 11.2 billion pages of content a day. And then we're able to synthesize that down to topics and intent base scores. Does somebody want to buy a car? Does somebody want to get a credit card? Does somebody want to churn off a cellular platform? All of that data is ingested into our platform and then we can identify the individuals. One of the big differences between Zeta and everybody else is, we never sell our data. So we're the world's third largest data platform arguably, and we never sell the data that makes it up. We use the data as electricity to drive our marketing automation platform. So this person wants to do this, the platform will target them on behalf of the client. And we sell software, that the data feeds into the software. So if makes the software substantially more efficient, substantially more effective. By never selling the data, we're really keeping the privacy of the 2.2 billion end users very very safe.
- [Katharine] But if you decided to sell that data, how could you protect that?
- [David] Well we don't sell the data, we have no plans to sell the data. If we ever did anything with the data it would all be atomized, we would never sell what's called the terministic data. So there's two types of data set. There's probabilistic, where you think you know something. And then there's deterministic, where you absolutely positively know it. We're one of the rare companies that has both, I mean, Facebook and Google also have both, you know they've managed to build nice little businesses for themselves. But that's really the biggest differentiator for us at Zeta. It was very weird when we said we're going to set out on building this ecosystem and then we're not going to sell it. But it's really fueled growth in our core businesses. I mean Zeta has a compounded growth rate of about 40% a year for the last four years, we continue to grow at scale and it's been the data assets that have driven the software sales. [Katharine] I want to ask you what the startup environment in New York is like?
- [David] Well as we talked about earlier, New York was just named the number one tech city in the world. Which for me is really cool. I grew up here. I don't live here anymore, I spend a lot of time here. I don't live here. And it's been a really unique ecosystem. You know, my friend to drop names, Fred Wilson over at Union Square Ventures, who is you know probably the most dynamic start up guy in New York. I mean, I get to talk to him regularly, he says he's never seen it this exciting in New York. I mean you're seeing in my opinion, capitol coming together with talent coming together with opportunities. And it's very very different and, listen, we have a very big operation in San Francisco, one in Silicon Valley, we have 26 offices on four continents and I would say among our most important offices are San Francisco, Silicon Valley offices in addition to our headquarters in New York. But the reality of the situation is, it's a very very expensive place to operate. And that's really what the study said. It's still great. But it's you know, rents, overhead. I mean I look at the benefits we supply to our people in San Francisco, the kitchen, we bring in lunch every day. I joke with our guys in San Francisco, a) I don't know how they aren't fat, and b) you could feed a family of 100 with the snacks that we put out on a daily basis. And of course we hail in comparison to Facebook and Google and Apple and all those guys.
- [Katharine] So I'm wondering, you have so many offices in a lot of different places, how... lets compare these two - how does New York compare to San Francisco?
- [David] As it relates to what?
- [Katharine] As it relates to office space.
- [David] They get a lot more benefits. Cost of office space?
- [Katharine] Ya
- [David] It's probably twice as much.
- [Katharine] For San Francisco? Wow. Is that due to Silicon Valley?
- [David] No actually, the city is now much hotter than the valley, I mean don't get me wrong the valley is not going anywhere. But the valley is made up of a bunch of campuses, right and the city though is really driven, and it's changed dramatically. When we first started operating out there probably about 10 years ago, we were purely in the valley. And we spent the vast majority of our time out on the west coast out there. And that's where everybody was. Now everybody is moving back into the city. And we're no different, we've got a pretty big operation on Market Street. And it's been pretty exciting. I much prefer to be in the city, no offense to the Silicon Valley guys.
- [Katharine] So I have to ask, do you have plans to go public anytime soon?
- [David] I can't believe you would ask me that on this program.
- You know listen, we've... it's been a complex market. The reality is the market has really been very very tough on IPO's up until probably last year where you started to see some tech IPO's happen. And now you're going to see what we believe to be a flood. You know Print Cris just filed 10 minutes ago or it came out. You know Lyft and Uber certainly rumored to be focused on that. You know, we would love to see those guys be canary's in the coal mine for how receptive are the markets to public offerings. But you know we are the size, the scale, we always joke that we're oddly profitable for a company that grows at our rate. We have fairly sizable operating margins. We are cash flow positive, Which once again is odd growing at our growth rate but it's something that we've focused on for years, and interestingly enough, of our 1400 global employees, 750 of them are in India. So we've really built a cost savings methodology around engineering, process management, financial and other functions that we run there which gives us the ability to hire the top people in the world, in San Francisco, New York, London and other places but still be able to afford to be profitable.
- [Katharine] You're cofounder is John Sculley and for those who don't know, he's the ex-CEO of Pepsi Cola and Apple. And I'm wondering, what have you learned from him?
- [David] Well John, I always joke, because with John as a cofounder, I always say he's just a little bit better known than I am. John and I have been partners now through three companies for literally 20 years. And he is without question one of the greatest marketers of all time. He not only created the Pepsi Challenge, he also was the force behind the 1984 ad for Apple. And of course partnered with Steve Jobs, and very rarely can you say that movies have been made about partners, but movies have been made about him. And watching Jeff Daniels play him was really fun and funny. And they've become pretty good friends so it's cool. John is more than my partner. He's one of my best friends. He's one of my mentors, he is truly a marketing genius. The thing I say about John, which you can read about him in books, you can see him in movies, what you can never know is how unbelievably nice a person he is. It's almost unusual. Like he's the type of guy that we'll be at lunch and somebody will come over and be like "I worked for you at Apple 20 years ago and I sat in a meeting with you at one o'clock on this" and most guys, you know I'm very very lucky, I have a lot of very successful friends who run big companies and CEO's and such. Everybody I know would smile, shake their hand, thank them. John gets up, he stands up, he talks to the person, asks about their family, he asks about their kids. And he does it because he really really means it. The first thing, I talk to John you know three or four days a week, the first thing that we talk about is our wives, his wife Diane and my wife Kristen are incredibly close friends, his wife's amazing and one of the great people out there. So it's, you know, to use the term I feel blessed to work with him sounds somewhat contrite. But I really do.
- [Katharine] Thank you for joining me.
- [David] Thank you for having me.

David Steinberg, CEO of Zeta Global, sat down with TheStreet to discuss why he thinks that "true" AI hasn't been invented and what it's like to work with John Sculley, who is the company's co-founder and also ex-CEO of both PepsiCo (PEP) and Apple (AAPL) . 

"Well a lot of it is definition, right, so we all started with automation, then we built machine learning where the algorithm started to get smarter. Now as machine learning has gotten more and more complex because of Moore's Law, Bezos's law and others we're calling it artificial intelligence. So I always joke when we call it artificial intelligence, I say we have to because all our competitors call it that. But I believe to truly create artificial intelligence, you need to create curiosity," explained Steinberg. "And even in an scenario where a machine can beat somebody at Go, or a machine can beat somebody at chess, the machine doesn't wake up that morning and say "I want to learn how to play Go, I think that would be cool. I'm going to Google Go" and it's going to learn the rules and get smarter and smarter. What happens is, the human tells the machine "we're going to learn to play Go together" and then it does that. So when the machine can actually wake up and say "I want to do this" that's when I think we'll really ascend to what I call now true AI."

Watch to see what else Steinberg says about his co-founder and the start-up space in New York City. 

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