Return to Transcripts main page

YOUR MONEY

All About SXSW; Jobs In America; Startup Success; Women And Social Media; Creating a SXSW Buzz; Catching Up On Digital Security; Top Chef Tackles Hunger

Aired March 10, 2012 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ALI VELSHI, CNN ANCHOR: Good afternoon. I'm Ali Velshi at South by Southwest here at the CNN Grill in Austin, which is where all the cool kids are, even Brooke Baldwin. Turn around, you're on live TV on CNN.

BROOKE BALDWIN, CNN ANCHOR: Hi, guys.

VELSHI: Good afternoon. I'm Ali Velshi at South By Southwest here at the CNN Grill in Austin, which is where all the cool kids are. Even Brooke Baldwin, you're around. You're on live TV on CNN.

South By Southwest is a great, great place to be. So many of you will think about it as a music festival, live music festival and some of you will know that evolves into a music festival as well.

What you may not have heard yet is that it's also probably the world's biggest interactive digital festival. Foursquare got its big kickoff here a few years ago. Twitter, which had already been on the market really exploded here at South By Southwest.

CNN has a presence here every year. I'm here with two guys who I really, really like. I tweeted out this morning that I've got a man crush on Mario Armstrong although I think I said it was a tech man crush.

And of course, Baritunde Thurston who I said was a little bit intimidating, one of the most fun guys around, but you really understand this world.

Here's a thing. For people who are watching this, before you change your channel because you don't know what South By Southwest is or you don't care, why do we care that we're here?

UNIDENTIFIED MALE: We used to think of the internet as a separate space, as a different place, and as a culture, distinct from the rest of the world.

VELSHI: Yes.

UNIDENTIFIED MALE: It's too big for that now. The internet is not some other thing. It's in all of us. And so this festival, which began as geek culture, geek culture is now mass culture. So to understand the future that we're charting, these tools we're making affect all of us.

How we learn, how we spend money, how we find our mates, how we do our politics. So with the big picture of the whole world now, not something you can isolate as separate from the rest of us.

VELSHI: That's a good point you make. Because if we can do our politics the way people make deals about technology and come up with ideas for social media, it would be -- decision-making would be faster and probably more effective.

But, Mario, give us the candy. The fact is there are gadgets here. There are things that will be uncovered here, apps for your phone that we're going to be using for years to come.

MARIO ARMSTRONG, DIGITAL LIFESTYLE EXPERT: Absolutely for years to come. I mean, many of the things that you've already talked about. So folks that are watching at home right now, you're using many of the apps that have been here before that you were like I don't care about this stuff.

Why does it mean anything relevant to me? Well, apps are being made relevant for our life, relevant for education, for health care, for politics as it was mentioned. But also we're starting to do more around people discovery and really learning more about the people around us.

I call them kind of ice breaker apps, if you will. So we're seeing that as a trend. But we're also seeing other trends for social, for good.

I'm really excited about apps that are being developed around the non- profit space or these hybrid models of profit and non-profit kind of coming together like cause world and a couple of other really interesting apps that bring in donations and momentum and movement and missions all at the same time. All of that's here.

VELSHI: You're very big into this idea that this allows people to get access to better education, this digital world, but it's not just that.

There are people here who have nothing to do with an app, but they know this is a progressive-thinking community that knows how to change things.

So there are people here with causes who just come here to link up with other people with causes, with ideas and with money.

BARATUNDE THURSTON, DIRECTOR OF DIGITAL, THE ONION: And when you think about what this festival is, it is music, it is film and it is interactive. It's art and technology coming together and there's magic.

This idea of new ways to raise money and new ways to raise politics, at its heart, it's about a redistribution of power in our society.

The amplified voices that we as individuals have, the ability to connect each other and to form ad hoc communities and get more done for good, for change, that's amplified into the rest of the world, which we're now a part of. VELSHI: All right, good. Well, we're glad to be here and glad to have you guys kick of our show. Thank you so much, Baratunde Thurston and Mario Armstrong.

Stick around. We've got a lot going on here at the grill. Let me tell you about the CNN Grill, by the way. This is a place that took 36 hours to convert from the restaurant, the wine bar that it was, into the place that you're looking at right now.

Every table in the place has power running to it. There's a full menu here. The most popular item, I'm hoping to get one momentarily, is a chicken slider. We made 336 of them on the first day. I say we made them like I had anything to do with it.

Unless it's made in a microwave, I don't generally have anything to do with it. But all of this transition has created the CNN Grill. We even replaced the sign outside the restaurant and here we have it. We're in here.

It's a must-stop place at CNN. It's the place that all the movers and shakers come to. And I've got to tell you, at South By Southwest, it's kind of a place where people do deals. They have ideas. They hope to find people to finance or market or distribute their ideas.

And ultimately why do we care? Well, those people will get rich. But ultimately why we care is because if people have great ideas, those could become jobs down the road. This is America, it's about entrepreneurship.

But let's talk about jobs. Another month and another strong jobs report in the United States. Here's the breakdown of what we saw for February. We have -- we had the creation of 227,000 new jobs in the United States.

And 233,000 jobs were actually created in the private sector, which is where you want them to be created, 6,000 jobs were lost in government. So that's kind of -- that's the good story. That's 17 months in a row.

I know a lot of you were worried about the fact the unemployment rate is still above 8 percent. Don't worry so much about the unemployment rate, worry about actual jobs created. The unemployment rate will fluctuate for the next few months.

As we keep on creating jobs like this, more people will go into the job force and start looking for jobs. The labor participation rate will increase. As a result, the unemployment rate may go up, may go down, but we're creating jobs.

Speaking about a guy who has created many jobs in his past, Steve Case is the co-founder of AOL. He's now the chairman and CEO of a company called revolution. He's the chairman of this start-up America partnership.

He's also a member of President Obama's Jobs Council and was responsible for what remains the biggest merger in the history of the business world with AOL/Time Warner. Steve, good to see you. STEVE CASE, CHAIRMAN, STARTUP AMERICA: Good to see you.

VELSHI: You made a speech recently where you said entrepreneurship can become the next American manufacturing and that a 100 years ago would have sounded great or 50 years ago. You meant it as a warning.

CASE: Yes, I think it's a little bit of a wake-up call for our nation, particularly our leaders in Washington, D.C., because America was built by entrepreneurs as you mentioned. They started companies and entire industries and that's how it became the leading economy in the world.

But we're still great in some sectors like technology and digital media here at South by you see a lot of momentum. But a lot of other sectors, manufacturing, services, a lot of other regions in the country we don't have the same level of entrepreneurship.

In fact start-ups are down 23 percent over the last five years. If they stayed at the time same level, we'd have two million more jobs in the economy. Meanwhile, other nations around the world are stepping up their game on entrepreneurship recognizing the support.

VELSHI: We seem to think this is the American domain. This is the thing nobody can steal from us.

CASE: Yes, I'd be careful on that because I think we have a lot of things going for us. The reason we really be optimistic about American entrepreneurship like this week here at this festival.

But other nations are recognizing the secret sauce that's driven America's economy and its innovation engine has been entrepreneurship and they're putting policies in place to make it friendlier for entrepreneurs and for capital.

We need to respond. Now, the good news is people in Washington recognize it. The president is starting his Jobs Council. We laid out some proposals in the fall, bipartisan proposals to try to get entrepreneurship back on track.

VELSHI: And there are very specific things in there that you have advocated that will help entrepreneurships. For instance, a big tax credit if you invest in anything, if you create jobs. What are the other things? Making it easier for people who are educated here, but don't have visas to stay.

CASE: Some of it is the issue of winning the global battle on talent. To make sure we have immigration policies not just attract people because they to our school to get PhDs, but encourage them to stay here. Right now they come here, I know we kick them out and go back to their country and start a company there instead of starting a company here.

But there are also a whole slew of things around access to capital. Last week, the House passed with overwhelming bipartisan support, 390- 23 something called the Jobs Act, which allowed for crowd funding. So companies like this don't have to rely on venture capitalists. VELSHI: When you say crowd funding, you mean the ability for companies to raise money not just from venture capitalists?

CASE: Exactly.

VELSHI: -- or private equity firms to go out there and say I've got a great idea. Anybody want to finance it?

CASE: It creates a more democratization and access to capital for young start-up. People have great ideas to a certain limit like $10,000 if for an individual investors. I want to make the right precautions are in place.

But crowd funding can unleash a whole slew of new companies. The other thing in the Jobs Act was on-ramp for IPOs. Companies don't go public now because it's so costly so they put an on-ramp in place so eventually all companies would be subject to --

VELSHI: But smaller companies have a different set of rules.

CASE: Just temporarily.

VELSHI: A lot of small companies just can't bring on the staff and the re regulatory ability to ramp up.

CASE: And that's the problem when you look at our unemployment rate because 90 percent of job creation for venture backed companies happens after those companies go public.

VELSHI: Right.

CASE: So we get more companies public -- if they don't go public, oftentimes their investors get tired and they want to sell. When companies get sold, jobs decelerate and when they go public, they accelerate.

So I'm optimistic. With the president's leadership last week, the leadership of the Majority Leader Eric Cantor really built a momentum around this and this week the battle shifts if you will to the Senate.

Senator Reid will be introducing some legislation. Hopefully he just takes the Jobs Act, which I think make sense, puts it on the floor for a Senate vote. I think it will pass. If that's the case, I think the president will sign it and that would be great for entrepreneurs.

Great for access to capital and really ensure that we don't go the way of manufacturing, which 50 years ago was the core business and now we've lost some of that. Entrepreneurship still is a core business for America. We can keep it, but we need to act.

VELSHI: All right, Steve. We are talking about jobs here. Take a look at this. Christine Romans is going to break down everything you need to know about the state of the jobs situation in this country in 90 seconds -- Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Ali, by now everyone has seen the headlines, 227,000 jobs created in February. Unemployment rate steady at 8.3 percent. Let's go inside jobs and take a look at some important distinctions in this month's report.

For example, look, 233,000 private sector jobs created. That's important, two years now of private sector job creation. Take a look at this, 6,000 public sector jobs lost. That has been the drag on the labor market, quite frankly.

But it's better than we saw last year, 22,000 jobs on average in the government lost every single month, so a little bit of an improvement there. I want to look quickly at the trajectory because this is something that you and I both know is so important on the campaign, right?

This is the labor market under the last months of George W. Bush. You can see the financial crisis taking hold. Hundreds of thousands of jobs lost. This is the beginning of the Obama presidency, a very terrible, terrible 2009.

This is what a financial crisis and a jobs crisis looks like. And then here is a slow, slow plodding recovery that's gathering momentum by the end of this year and the beginning of 2012. This is the part of the chart that so many people are focusing on.

Will this mean the labor market can continue to gather some steam into the summer and can put some of those people who have lost their jobs here back to work -- Ali.

VELSHI: What a great explanation. Christine, thank you.

Small business, Steve case just said this, small business is critical to add fuel for this recovery that Christine was just talking about. I was talking -- talking to about us.

South By Southwest is so important for so many of these small tech companies, which are trying to catch their break. How about if you've got a great idea? Is starting your own business an option for you?

We're going to find out what makes a start-up successful and what ideas are doomed to fail next on a special YOUR MONEY live from the CNN Grill at South By Southwest.

(COMMERCIAL BREAK)

VELSHI: Welcome back to a special live edition of YOUR MONEY. We're at the CNN Grill at South By Southwest in Austin, which is why I'm eating. These are the chicken sliders we made -- perhaps eating on TV is not the wisest thing.

We made 336 of these just yesterday and they're going strong. But I do have to do some business here so I'll move on. South By Southwest, for those of you who don't know what it's about, it's a launching pad for start-ups.

Foursquare is a company that launched here. Twitter is a company that was already out there, but wasn't as big. South By Southwest was the place to make it big. So we want to explore what it takes to create a successful start-up in this economy and what role start-ups could play in fixing America's job crisis.

Back with me is Steve Case. Reid Hoffman joins me now. Reid Hoffman is the co-founder of LinkedIn, early stage investor in Facebook, in Zynga. You worked for PayPal.

These guys know how to start companies. Over on the end there is my good friend Peter Diamandis, he's the chairman and founder of the X Prize Foundation. He's the co-author of "Abundance, The Future is Better Than You Think." He's a co-found of Singularity University.

These guys know about starting things up. Steve, you and I talked about entrepreneurship facing the same fate as manufacturing in the United States. That's worrisome.

Reid, do you share the view that we have to make it easier for people to create businesses? What does my viewer who might have a great idea need to know about the state of creating a start-up in this country?

REID HOFFMAN, CO-FOUNDER AND EXECUTIVE CHAIRMAN, LINKEDIN: Well, I think one of the things that we have traditionally had a competitive edge in the U.S. is we're great at entrepreneurship. We're great at bringing people around the world to do it.

We're great at trying new things. So I think bringing the network around you, advisers, financiers, employees, people that understand the industry and launching.

And it's one of the things that Steve and I been doing with Startup America, which is how do you assemble a network in order to make your startup be more successful.

This is how we create the future. The world is changing in a faster and faster pace and so being able to adapt and innovate is critical.

VELSHI: Peter, let me take a sip. Peter, let's talk about you have been involved and you know people who just had little ideas. In fact, I think you said that every day -- the day before something became a great invention. It was just another stupid idea. Tell me what people need to know about creating ideas and getting them out there.

PETER DIAMANDIS, FOUNDER AND CHAIRMAN, X PRIZE FOUNDATION: I mean, having a real breakthrough requires taking risk. Before it's a breakthrough, it's a crazy idea. So the problem is in large corporations and governments we don't take big risks anymore.

Because we're concerned about large public failure that say could hit a congressional investigation or stock price. Really it's the entrepreneur, the small team that's willing to risk everything to go and make their dreams come true that drives real innovations. And the entrepreneur today has extraordinary resources at their fingertips.

VELSHI: Tell me about Startup America.

CASE: It really is a private sector effort to try to mobilize resource to help companies get started. Go to startupamericapartnerhip.org and just ask.co get resources.

Over 70 companies have contributed things to help start-ups, launched now in 20 regions. There's local efforts like Startup Texas, Startup Tennessee, really as Reid said, network together the resources.

They've created a network effect, increasing returns, network density to help these entrepreneurs and that's alongside what we talked about earlier. What the government needs to do around passing this Jobs Act to allow for crowd funding and IPO on-ramp.

There's a role for the private sector. That's what the Startup America partnership is all about. There's a role for the government. Ultimately, we do rely on entrepreneurs to be -- as Peter said, they're the attackers.

They are disrupting the status quo, creating innovation. Large companies are typically defenders. We need to make sure we unleash the attackers in this country so these companies and industries start and grow here and don't find themselves growing in other countries.

VELSHI: Do you still find those attackers, those disruptors at places like this?

HOFFMAN: Absolutely. I mean, one of the things that's great about South By Southwest is it brings a large segment of media and innovation and Austin is a very good center for design, which is one of the things that's important on the new web.

One of the things that we see through investing across the U.S. is that we still -- we can still do it. We just need to apply ourselves and no longer take it that the future is for granted, we can coast. It's how do we invest in ourselves and how do we go forward.

VELSHI: Peter, you're an internal optimist. Generally speaking, a place by South By Southwest is populated by optimists because they here thinking they have got great ideas that are going to power the future.

But you're a real optimist based on the fact that the name of your new book is "Abundance." You think there's stuff out there that is really going to make us work faster and better in the future.

DIAMANDIS: I mean, if you're an entrepreneur, you believe you can otherwise you wouldn't be doing it in the first place. That's half the battle. Mindset is half the battle.

So for example, we just launched with Qualcomm Foundation, the Qualcomm Strive Quarter X Prize, built a device that can diagnose you better than a board certified doctor.

There have 145 teams around the world who are going to do this so that will create an abundance of health care with any of the mobile device have got better medical diagnostics than the best doctors today.

VELSHI: I have a copy of Reid here somewhere. I'm never eating on TV again. HOFFMAN: Are you sure you don't want another bite?

VELSHI: Reid, you said something in a book that you have to think of yourself as a beta.

HOFFMAN: Yes.

VELSHI: You got to think of yourself as being in permanent beta.

HOFFMAN: Right, which is you're never a finished product. So if you think the world is changing, globalization, increasing competition, and the industries are being disrupted, you never look at yourself as a finished product.

It's always how do I invest in myself and play the next curve. This is borrowing a term from Silicon Valley, which is we release software in beta. G-mail was in beta for like eight years. We're in production, but we're not finished yet.

VELSHI: I feel so much better about myself knowing that this is not a finished product. There's somewhere that we have to go from here. Thanks to all of you. Peter's book "Abundance" is now near the top of the "New York Times" --

DIAMANDIS: We hit number two on the "New York Times."

VELSHI: That's excellent and I'm glad for you because people should read this book. It's optimistic. It's got some great ideas. Reid, I'm in the middle of yours right now. Somebody is probably eating a slider and enjoying it right now. Steve, it's always a pleasure to see you.

CASE: I don't have a book, but I would help people to use the hash tag jobs act and push the Senate to pass this act next week and make sure entrepreneurs have the resources to succeed in this country.

VELSHI: Very good. Thank you, Steve. Good to see you all of you.

This is going to be a great weekend. From Facebook to Google to Twitter, the majority of the big start-ups all share a familiar lead character and it's usually a man.

Where are the women when it comes to leading the next generation of technology innovation? We'll meet the women who are trying to change that situation next on a special live edition of YOUR MONEY from South By Southwest.

(COMMERCIAL BREAK)

VELSHI: Why is there a digital divide when it comes to women working in the tech world? We've got a panel here ready to change that.

Rachel Sklar who you've seen on the show before is the founder of Change the Ratio. Sharon Feder is the chief operating officer of Mashable. Kellee Khalil is founder of Lover Le, a wedding idea site and Kathryn Minshew is CEO and co-founder of "The Daily Muse," an online community for professional women. First of all, do we think that there is -- do you want to change the ratio? The ratio is not good?

UNIDENTIFIED FEMALE: The ratio can be better. There are two different ratios. The ratio of what actually is women to men and then the ratio of who's getting funded, who's getting highlighted in the press, who's keynote speakers at conferences.

Women tend to have a less clear, straight path to mentorship, to funding, to all of these things than men tend to do. I'm generalizing, but that's how we've seen it. More than ever now, every industry now is open to disruption and women are right in the middle of that doing it, as you can tell.

VELSHI: Let's talk about this for a second. Mashable is a media blog that covers web sites and social networks. Is there a difference in the way women in the industry market themselves?

SHARON FEDER, CHIEF OPERATING OFFICER, MASHABLE: Absolutely. We're covering technology and digital, which has become very mainstream, but you have women who are networking themselves. I think women are less likely to go as far as men to network themselves. You know, they're a little shyer about it.

VELSHI: Kellee, you've got a tech company. You're hoping to inspire women to do what you've done. Were there any unusual -- any unusual challenges that you felt because you're a woman?

KELLEE KHALIL, FOUNDER AND CEO, LOVER.LY: You know, I think that most entrepreneurs face the same challenges. You know, you need to be confident. I think women tend to be a little bit more shy and bashful sometimes. I always tell entrepreneurs be aggressive, be confident and don't back down, just keep going.

VELSHI: And do you think that places like South By Southwest, which really create a marketplace for people with ideas to get funding and to go further, does that work as well for women as it does for men?

KHALIL: A 100 percent. If you put yourself out there and you go embrace the event and put yourself out there, just be confident and just go ahead and do it.

VELSHI: Kathryn, is there a market niche for women or should they be competing in exactly the same places men are competing in?

KATHRYN MINSHEW, FOUNDER AND CEO, THE DAILY MUSE: I think there's absolutely a market niche. We've seen that women are interacting with the web in different ways. They are being attracted to different interfaces, different designs and there's absolutely an incredible niche here.

I think it's an opportunity rather than a digital divide. There is an incredible opportunity where you have all of these products that have been designed by men for men and I think we're just now seeing the resurgence of consumer products focused -- VELSHI: Are we starting off, Rachel, on the right foot, wrong foot or same foot as women competing in all other industries in other all spaces?

RACHEL SKLAR, EDITOR AT LARGE, MEDIAITE.COM: Tech is a meritocracy. I think if you create something and you get users and you get traction, you're halfway there, obviously. I think it's important to recognize that the unconscious institutional biases that every industry has.

And I think also important to emphasize that women make things better. Diversity makes things better. You have different perspective, access different markets, find different ways to get things done and it has shown the founding teams with mix members and companies that have women in key roles performed much better.

VELSHI: Sharon, is diversity in the digital world sort of a must more than it is in some industries that haven't caught on?

FEDER: Absolutely. And I would say there are parallels between the digital world and larger business world, but technology is becoming main stream and people leading these companies need to reflect the consumer that say they're reflecting to and building products for.

VELSHI: And that digital consumer is everybody.

FEDER: Exactly.

VELSHI: Have you found that the barriers, one of the reason women generally do well in business because barriers to entry that the corporate world imposes aren't there as much?

KHALIL: I think that the startup world is the same thing. It's a matter of having a plan, taking action and going after it. I think oftentimes female mentorship helps give you the confidence to kind of make that just.

You know, I work with corporate America for three years before I started my company and I did not -- I didn't realize that there was an issue as far as being a woman until actually when I came into start-up world and I was approached by investors. Like where's the male founder and I can do it by myself, thank you.

VELSHI: And you have done it by yourself. Thank you. Four successful women in the space and Rachel is out here waving the flag. She's really out there having this conversation with people.

Thank you for joining us here on YOUR MONEY. South By Southwest is known for its start-up power. Three year ago, one of those companies completely changed the way you interact with your friends and family online today.

I'm going to introduce you to the man behind Foursquare and what he has to say about all that personal data that tech companies gather on you. That's next on YOUR MONEY from the CNN Grill in Austin.

(COMMERCIAL BREAK) VELSHI: Welcome back to CNN's special live coverage of South By Southwest. Dennis Crowley came to Austin three years ago on a mission to launch a company called Foursquare. You can call it mission accomplished.

Foursquare now has 15 million users. Dennis, think back to your initial trip here. Really, were you like writing code to the last minute? What were you thinking? Just tell me what's going through your mind.

DENNIS CROWLEY, CO-FOUNDER, FOURSQUARE: Yes, my co-founder and I, we were writing code up until the point that we got on the plane. We were the guys like, sir, you must close the lid on your laptop for the flight to take off.

As soon as we land, you make a phone call. Is it still running? Is it alive and you know. Of course, it was then and it was still kicking three years later.

VELSHI: Here's the weird part about South By Southwest. You, all 22 years or whatever you are, are the old man of South By Southwest. You're a veteran. You've done it. You've seen it and now we're meeting kids who are, I don't know, 18 or 19 and they're trying to sell ideas. How do you manage that idea because this is where great businesses are born?

CROWLEY: You know, South By Southwest has the same feel to it every year. There are always kind of the incumbents and there are always, you know, 20 or 30 startups who are really trying to make their big launch event, really tell their story and get a lot of attention for what they're doing.

This is my seventh time being down here. This is our third anniversary for Foursquare. So it's nice everyone knows what we're doing. It's part of the fabric that is South By Southwest.

VELSHI: Just in case my dad is watching, which he should be, he may not know what Foursquare is. What's your simple explanation?

CROWLEY: Yes, we make mobile phones that help people connect with their friends and find their friends and also find new and interesting places nearby.

So people are using Foursquare down here to find what parties they should go to, where their friends are hanging out and just a general awareness of what's going on in Austin.

VELSHI: And this concept, which was very cutting edge when you got big with it, has now become very common. People use location-based services.

Those who don't are still concerned about safety and the amount of data that's collected and information. You have made the argument that that data that you collect is useful.

CROWLEY: Yes. VELSHI: What do you tell people who think it's not?

CROWLEY: What we're trying to do is like we collect little bits and pieces of the types of places that people go to and work really hard to recycle that data and give it back to people.

Because you like these places in New York, you're really going to enjoy these places in Austin. Every time you use Foursquare, Foursquare gets a little smarter.

And we can give those smarts back to the user to help them figure out what to do in the real world. But it takes people a little while to warm up to these things.

VELSHI: Frank Abagnale is in the house, you know him, and obviously one of the things that he talks about in a place like this where everything is digital and everything is moving into the cloud is the dangers people face. How do you confront that on a daily basis?

CROWLEY: I don't know. I think people that are most concerned about parts of Foursquare, the ones that have never used it before. There are people afraid of Facebook and always people afraid of Twitter.

I think you get some people that are a little bit skittish about using Foursquare sometimes. But when people start to play with the app and they realize all the things it can do and the way it can unlock the world for you, people warm up to it.

VELSHI: Tell me really quickly when people get off their planes to Austin like you did three years ago, what is that startup thinking? What do they want to achieve at South By Southwest? Is it usually funding or somebody to pick up their platform and run with it?

CROWLEY: It's a little bit of everything. I mean, people want to have a general mindshare down here. People talk about what's the breakout app at South By Southwest.

I think for us it was us in 2009 and us last year, maybe 2010 too, three years in a row. But you get to see other people having that same experience now.

It's playing out on the streets. It plays out in the conference rooms. It plays out at bars and restaurants. People experimenting with new technology trying to figure out what's going to be the next big thing.

VELSHI: And it takes less time to do a deal here than it does in Congress.

CROWLEY: Yes, things move very, very quick here.

VELSHI: Dennis, great to see you as always. Thanks so much. Continued great success for you and Foursquare.

CROWLEY: Thank you.

VELSHI: Well, if you don't know the name Frank Abagnale, I just mentioned it. You surely know his story. He was once known as the world's most famous conman. His story inspired the Leonardo Dicaprio movie "Catch Me If You Can."

We caught up with him and we'll talk digital security, a topic every single one of you watching should be concerned about next on this special live edition of YOUR MONEY here at South By Southwest.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Wait, please. Before you go, please tell me your name. Tell me.

UNIDENTIFIED MALE: Frank William Abagnale Jr.

(END VIDEO CLIP)

VELSHI: Welcome back to the CNN Grill at South By Southwest. "Catch Me If You Can" was all about fraudulent checks. Who even writes checks anymore? Now it's a whole different story. Doesn't matter what the company is.

If you give information to a website, it's stored and often sold to other companies. That's why you get so much free stuff on the web. Protecting your personal information in this digital age is something you should be concerned about.

Frank Abagnale has gone from cashing fraudulent checks to helping the FBI and other law enforcement and scores of financial institutions deal with fraud. Now he says it's time to protect your information online.

Good to see you, Frank. Mario Armstrong back with me right. We just talked to Dennis Crowley of Foursquare. Their company only succeeds and offers you better services the more information they have on you down to who you are, what you buy, where you go, and where are you right now.

Balance that out for me with the concerns that you should have about data storage.

FRANK ABAGNALE, SECURITY CONSULTANT: I think you always have to realize the information you're giving out. Let's take Facebook. We have 10 million children on Facebook, 7.5 million of them under age 13.

VELSHI: Right, which is not supposed to be the case?

ABAGNALE: No, and we have a million kids bullied last year on Facebook. There's a simple software-like Creeper where I can track a child on Facebook. If I take a picture of you in the airport, there's facial recognition software that I can match that to any face on Facebook.

If I go to your Facebook page and find your picture, I'll find out where you were born and when you were born so I'm 99 percent at taking over your identity. So I have nothing against the social sites, but when you put a picture of you, don't put a frontal photograph of yourself, put you on a boat, skiing down a mountain, something recreational.

When you talk about your life, don't say where you were born, don't say the date of birth that you were born on, don't give away pertinent information that you know people can take to become you.

VELSHI: Right, what's the balance here, Mario? We want free stuff on the internet. So we know we've got to give some information about us because these companies that use it sell it to advertisers who exactly want to target me, my age, my demographic, my weight, everything.

MARIO ARMSTRONG, DIGITAL LIFESTYLE EXPERT: Well, Ali, here's the deal. You said the key word. Free. If you're getting something for free, the monetary payment for that is your privacy. So you're paying for these things, these free tools with your privacy.

That's what Frank is talking about. What's really interesting about what Frank is saying is little digital footprints are now being made. These cookie crumbs.

So you leave a little information here or a little information there. In and of itself you think it's harmless because it's one little sprinkle of information. But the ease of aggregating all of that data and then making a trend or plotting an analysis around that is so, so fast.

VELSHI: So, Frank, how do you live a life in 2012 participating in all of these neat things that you want to participate in? I don't do a lot of location-based stuff because I'm not interested in people knowing where I am all the time. Can I fully be a participant and yet keep safe?

ABAGNALE: Yes, but again, you have to be a little smarter. You can't rely on the government, your bank to protect you. You have to be a smarter consumer and a wiser consumer. So when you use those, you have to ask yourself what are my risks associated with that. I protect myself from identity theft by three simple thing, I do use a shredder, I use a micro-cut shredder.

VELSHI: People still steal that stuff?

ABAGNALE: Yes.

ARMSTRONG: Dumpster diving is huge.

ABAGNALE: Most shredders you can put all the information back so you want to use a micro-cut shredder. I use a credit monitoring firm. I've used one since the '90s called privacy guard. And I don't use a debit card. Because in a debit card, I'm accessing my bank account so I use a credit card.

VELSHI: -- which is protection for you. ABAGNALE: A much better protection.

VELSHI: Maria, I mean, what's the trade-off? If you want all this location-based stuff, if I want the advertisers to advertise -- it's weird, right?

When you surf the internet after you've been looking to buy something, every ad that pops up is what you were looking for. I'm too dumb to realize that that was information sharing. I just think it's a great coincidence all of these advertisers want to advertise stuff I want to buy.

ARMSTRONG: What's interesting about that comment too is what if you're just researching something. You could not even be interested in buying diapers, but now all of a sudden you're getting ads pointed at you for diapers.

So it's not 100 percent working on the personalization. They want to get it there, but I think the bottom line is this. People have to be very conscious about the privacy policy. Many people don't read them.

VELSHI: No.

ARMSTRONG: We have location-based services that are launching now. Big buzz word for this event has been Highlight. It has been talked about, talked about, talked about. No privacy policy on their web site at all.

VELSHI: Highlight is a thing, which if you and I sign up for it, when we are in proximity of each other, it will tell us and tell us every other time we've been in proximity and even if I don't know you, I can find out what you're about, what you like, whatever information you put on there.

ARMSTRONG: And that's a good thing. We're trying to make ice break. So if I don't know Frank, but Frank is on the app and he shows up in the same venue, it helps us discover other people that may have similar interests around us.

I think that's a good thing in terms of networking, meeting new people, starting new conversations, creating new ideas, but the fact that that was done first without the forethought of privacy for the user first kind of worries me in this day and age.

VELSHI: Frank?

ABAGNALE: Well, on the other side of that, it's a great law enforcement tool because today we can track people by their cell phone. We can track them by their e-mail, by their website, so it becomes also a great tool to use on the other side for the government to use. But I think the key here is you have to educate the end user --

VELSHI: Yes.

ABAGNALE: -- as to how the proper way to use it. As a government and as a bank and as a corporation, we do a very poor job of educating the end user about how to protect themselves. Years ago we saw a lot of public service ads. We don't see those anymore.

VELSHI: The whole mortgage crisis.

ARMSTRONG: If you had the technology that we have today, would "Catch Me If You Can" be so much easier for you?

ABAGNALE: Four thousand times easier.

VELSHI: Guys, great to see you, Mario Armstrong, Frank Abagnale. What a pleasure to see you both. I hope you'll stay and eat some of our chicken sliders here at the CNN Grill.

The foundation of YOUR MONEY, this show is built on coming up with solutions, helping you come up with solutions. One of the top celebrity chefs in this country is taking on an important issue, it's hunger.

Hear how Tom Colicchio wants to fix the hunger crisis right here in America and how it could help the nearly 50 million people affected by it next on YOUR MONEY.

(COMMERCIAL BREAK)

VELSHI: Well, you may not know Tom Colicchio best as head judge of Bravo TV's "Top Chef." But he is the executive producer of a new documentary about hunger in America. It's called "Finding North." Take a look at a clip from the movie.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: One student in particular, Rosey. I just really felt she wasn't really applying herself in the classroom. I couldn't figure out why that attitude was coming from. I felt that she just really didn't care about what I wanted her to learn or that school was that important and what I realized when I brought her in one day was the main issue was she was hungry.

(END VIDEO CLIP)

VELSHI: Well about, 50 million Americans are food insecure in this country. More shocking, 16 million children, that means people don't really know where the next meal is coming from, at least once a month.

Earlier, I spoke with Tom about the issue of hunger across America as well as South By Southwest and, of course, I had to ask him about "Top Chef." Listen to what he told me.

(BEGIN VIDEOTAPE)

VELSHI: Tom, good to see you here. This, for us, for me, South By Southwest always involves a lot of food. But why are you here?

TOM COLICCHIO, CELEBRITY CHEF: I'm here actually -- we're doing a panel, one of the interactive panels. We had an adjunct show sort of along "Top Chef" called "Last Chance Kitchen." It was only online.

We actually successfully migrated the contestants from TV to online and then the winner actually got back into the actual competition. And it was wildly successful. So we're doing a panel on that.

VELSHI: You also have a great film that you have done and it's about hunger here in America. I know, you know, a lot of people know that there is severe hunger and this uncertainty about where your next meal is coming from, food insecurity. I don't know if everybody knows how big a deal it is.

COLICCHIO: It's a huge deal. I actually produced the film. My wife and her partner directed it as well. But, yes, 50 million Americans food insecure so food insecurity means that during the course of the week, a month, they will struggle to put food on the table.

That includes 17 million children. The problem that we can fix, that's why we did the film. For the last 30 years of being a chef, I've done a lot of fundraisers and active in raising money for various hunger organizations, whether it's feeding America or local food banks.

And they're doing great work. The problem keeps growing. And so we thought that we needed to maybe do something else, a call to action to fix this.

VELSHI: How is the fix for that problem different than the fix for all of the economic problems we have, joblessness and things like that?

COLICCHIO: It's an issue of poverty. But we make enough food in this country to feed everyone. The problem is connecting people to food.

VELSHI: Your point is there shouldn't be food insecurity for families in America because we have abundance of food.

COLICCHIO: We have enough food. We have a system that is broken. One of the problems that we find is if you look at subsidies, subsidies go to corn, wheat and soy, $20 billion of subsidies, only 1 percent of that goes to food.

And so when you talk about people trying to struggle to put food on the table and 30 hours buys $3,000 of junk food or 300 calories of whole foods. We can do that by offsetting fruits and vegetables with subsidies.

VELSHI: What is the aim of the film? It is to educate everybody else about the problem? Is it to try to convince people who are struggling to put food on the table to switch to more nutritious foods?

COLICCHIO: It's really everything. Number one, to show that there is a problem. Back in 1969, there was a documentary by CBS News called "Hungry in America."

After that came out, Congress got together and created the modern food safety net and fixed the problem. Now we're right back there again. We can fix it. We fixed it before. It's a matter of making it affordable for everybody and making sure that we get rid of food deserts, this idea that there are certain areas, in the rural areas and urban areas where you can't find food.

VELSHI: Food deserts, let's just explain that. These are urban areas --

COLICCHIO: And rural areas.

VELSHI: And rural areas where quality fresh food is not readily available.

COLICCHIO: Where fresh food is not available at all. The only option you have is to buy junk food and highly processed foods and that is causing the obesity problem. We look at obesity it is the flip side of hunger. It's not that people are overeating.

VELSHI: It's the opposite of the way it used to be. Poor people were skinny. Now we have poor people who put on more weight because they're eating the wrong foods.

COLICCHIO: Exactly, cheap foods. They're not healthy.

VELSHI: And that extends to health care problems because a lot of these people develop diabetes.

COLICCHIO: That's exactly right. If you want to fix the problem, experts say that about $20 billion will fix the problem per year. And associated health care costs are $120 billion.

VELSHI: What's the best fix for it?

COLICCHIO: I think the best fix for it, it's a combination of really get down to it. It's changing the poverty level. There is not a president out there that will change the poverty level because if you look at -- to qualify for food stamps or snap dollars, for a family of four, you have to make $28,000.

It's just not enough. It's not enough to get by. So I think it is changing the poverty level, number one. And there is a political fix to this, if look again at subsidies, if you look at getting more people to access the foods. It's on so many different levels. Our mission is to raise awareness.

VELSHI: Tom Colicchio, I'm glad you're doing it. Thank you for being here at South By Southwest. Hopefully, we've helped you raise some awareness. Good luck on the film and on "Top Chef" and all your ventures.

COLICCHIO: Thank you. Appreciate it.

(END VIDEOTAPE)

VELSHI: What a great guy. Don't go anywhere. We are back live from the CNN Grill at South By Southwest in Austin.

(COMMERCIAL BREAK)

VELSHI: All right, at least I have one chance on the show to wear this fancy hat of mine. This is my cowboy hat. We are in Austin. You don't see a lot of these around here. This is South By Southwest.

If you didn't know what it is, we hope this hour has helped you understand. It's a little better if you're here in Austin, come by the CNN Grill at South By Southwest.

We're going to be continuing to spend some time here over the next few days, finding some great ideas, businesses, application that's you're going to see on your mobile device over the course of the next year or so.

Stick with CNN and CNN.com for the very latest from South By Southwest. We'll be back here next Saturday on YOUR MONEY -- 1:00 p.m. eastern, Sunday at 3:00 p.m. You can stay connected to us 24/7 on Twitter. My handle is @AliVelshi, and the show handle is CNNyourmoney. That's it from the CNN Grill. Have a great weekend.