Speaker 1: This is Bloomberg business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Masser and Tim Stenebec from Bloomberg Radio.
Speaker 1: You know, we've talked a lot about the one year
Speaker 1: anniversary of that Russian invasion of Ukraine, and Carol, I
Speaker 1: did not know about this until reading this story. But
Speaker 1: President Vladimir Putin he begins the war. A network used
Speaker 1: throughout Europe, including by the Ukrainian military, then faced an
Speaker 1: unprecedented cyber attack, and it's one that everyone is finally
Speaker 1: talking about. Yeah. I feel like it went from no
Speaker 1: One to everyone, and they should be. The story is
Speaker 1: coming up in the new issue of Bloomberg Business Week
Speaker 1: on newstands tomorrow, already online at Bloomberg dot com, slash
Speaker 1: business Week, and of course on the Bloomberg Let's get
Speaker 1: to it with Bloomberg News Cyber and Emerging tech reporter
Speaker 1: Katrina Manson. She joins us via zoom in New York City.
Speaker 1: And of course you've got the editor of Bloomberg Business Week,
Speaker 1: Deil Webber, right here in our Bloomberg Interactive Poker Studio.
Speaker 1: So tell us about this hack in my ongoing propaganda
Speaker 1: for rto messaging m. Katrina and I found ourselves in
Speaker 1: the Washington DC bureau and Katrina was like, have you
Speaker 1: heard of this company vias that? And I was like,
Speaker 1: what are you talking about? She was like a satellite company.
Speaker 1: I was like, I don't know anything you're talking about.
Speaker 1: And it turns out that there was a hack at
Speaker 1: the beginning of the Russian invasion, and no one initially
Speaker 1: attributed that to Russia. But as the weeks passed and
Speaker 1: Western governments, you know, finally got around to pointing a finger.
Speaker 1: They pointed that figure a finger out Russia, which obviously
Speaker 1: Russia says that we're innocent. But what it really revealed
Speaker 1: was something that I thought was worthy of further exploration.
Speaker 1: And Katrina did a great job on this. And it
Speaker 1: turns out satellites are really unsecure and that is a
Speaker 1: little frightening when you think about the amount of data
Speaker 1: that is sent there um. And so this virset hack
Speaker 1: that you read about, Katrina tell us why it ended
Speaker 1: up being a much overdue wake up call for the
Speaker 1: satellite industry. Well, I think tracking it down was so fascinating.
Speaker 1: Reports came out in drifts and drabs. There were other
Speaker 1: journalists who are very obsessed with this issue, who were
Speaker 1: of course covering it, but it was very hard to
Speaker 1: put together the overall picture. And some cybersecurity researchers did
Speaker 1: incredible work really trying to encourage the company to talk
Speaker 1: about this in public. And when I say cybersecurity researchers,
Speaker 1: I mean hackers. They have been trying to hack Space
Speaker 1: for a decade clubs for white hat reasons. That's classically
Speaker 1: known as for good to share their information so other
Speaker 1: people improve. But it's a really sensitive area. And so
Speaker 1: one of the main people I spoke to for the story,
Speaker 1: Ruben Santa Marta, he's been warning since twenty fourteen that
Speaker 1: Space is insecure. And he said to me that page
Speaker 1: ten and eleven of one of these very esenteric papers
Speaker 1: that he'd written actually essentially predicted exactly what happened to
Speaker 1: the Ukrainian military, which relies on commercial satellite in remote
Speaker 1: places to get their Internet connections. That's essentially how they
Speaker 1: want to link frontline troops to commander control, to control drones,
Speaker 1: all the things that you would need to respond to
Speaker 1: a very swift or what was intended to be a
Speaker 1: very swift lightning invasion by the Russians. So the stakes
Speaker 1: were incredibly high, and it came down to a lot
Speaker 1: of researchers who've been clanging the bell for this for
Speaker 1: so many years. Another one I spoke to called James
Speaker 1: Parvell for the story. He intercepted satellite data transmissions that's
Speaker 1: from the satellite down to in this case, ships that
Speaker 1: were relying on satellite connections, and he got hold of
Speaker 1: the crew manifests, passport details, credit card details. It is
Speaker 1: extraordinary how much out there in space there's not encrypted,
Speaker 1: and how easy it is to get hold of it.
Speaker 1: I see, And I was still hoping she was going
Speaker 1: to talk about Captain Midnight, but we'll get to that later.
Speaker 1: I have to I wonder if you can talk a
Speaker 1: little bit about the US intelligence on this. The US
Speaker 1: looks into it gleans that the Russians were prepared to
Speaker 1: take significant diplomatic and strategic risks, which feels like something
Speaker 1: that you could have told us before the US intelligence
Speaker 1: looked into that, Katrina. But I wonder if you can
Speaker 1: talk about how much the US knows as we stand
Speaker 1: today and maybe the extent to which we don't know. Well,
Speaker 1: I can tell you what I know, which is definitely
Speaker 1: not everything. But I think the US worked very quickly
Speaker 1: within about four weeks to work out that they thought
Speaker 1: it was the GRU that's responsible. That's Russian military intelligence.
Speaker 1: They have allegedly done lots of hacking, according to the
Speaker 1: US in the past. And what was interesting about that
Speaker 1: was that it was coordinated with the invasion. Now, once
Speaker 1: they established that, they then spent six weeks trying to
Speaker 1: commence the Europeans that they were right. And I think
Speaker 1: it has interesting echoes for the rest of how the
Speaker 1: US approached the Ukraine invasion, which was to flag early
Speaker 1: on to the Europeans, look, this is going to happen.
Speaker 1: We have the intel, and the Europeans, namely the French
Speaker 1: and German, said no, we don't think so. And there
Speaker 1: in the case of the satellite hack, the US actually
Speaker 1: went above and beyond and shared additional intel I'm told
Speaker 1: by a European official with the French and the Germans
Speaker 1: to try and convince them not only that this had happened,
Speaker 1: but that it was really important to blame Russia in public.
Speaker 1: And that's something the countries simply don't usually do well.
Speaker 1: As you say, at the end of the story, you
Speaker 1: have a quote from a source who says it is
Speaker 1: super super repeatable. So that's that's distressing. I was going
Speaker 1: to say, the good news is that this will never
Speaker 1: happen again. I may well be invited back. I'm sorry
Speaker 1: to say, so. Walk us through what has to happen
Speaker 1: in order for this to not happen again. I think
Speaker 1: at the most extreme end, some groups in the US
Speaker 1: are calling to make space systems um a critical infrastructure sector.
Speaker 1: I mean, that is terrible job, and I'm sorry to
Speaker 1: even introduce it, but it's essentially to say, give this
Speaker 1: sect way more prominent government support and essentially potentially regulation.
Speaker 1: That's something satellite companies mostly don't want, and I think
Speaker 1: the US government isn't going to do that. It would
Speaker 1: require Congress to step in. It's part of a five
Speaker 1: year review. I mean, it's just going to get sucked
Speaker 1: into all sorts of bog down into stuff. But the
Speaker 1: easiest thing to do is to set standards. And that's
Speaker 1: actually what the source who said this is super super
Speaker 1: repeatable it's doing. He wants international countries to agree. Well,
Speaker 1: how do we run our satellite systems. What do we
Speaker 1: do with the satellite up in space? How do we
Speaker 1: control the link, what goes into the ground network. And
Speaker 1: as you have more and more satellites going up into space,
Speaker 1: I mean the numbers are kind of these numbers look
Speaker 1: like yeah, I mean, it's from about five thousand active
Speaker 1: satellites in orbit at the moment to within the next
Speaker 1: seven years. But my end predictions are one hundred thousand.
Speaker 1: That's because satellites are getting smaller. Launch is getting easier.
Speaker 1: Everyone's into this new blow or low Earth orbit, which
Speaker 1: is much closer, so easier to get to. The satellite
Speaker 1: that got hacked was a geostationary satellite way higher, So
Speaker 1: you're going to see way more satellites in which means
Speaker 1: that if one gets hacked, there are others you can
Speaker 1: rely on. But I think what's key is establishing standards
Speaker 1: and working out what goes into that gloom and protecting
Speaker 1: ground networks. I mean, that's actually what the entry was
Speaker 1: in this hack. And there are really convoluted chains between
Speaker 1: the different operators of a satellite network, and it seems
Speaker 1: that the ball got dropped in that case, there was
Speaker 1: a third party operator that's whose speech. Then it went
Speaker 1: all the way to buy that. It's our new kind
Speaker 1: of warfare, right, cyber warfare, and it like you think
Speaker 1: about nuclear deterrance, Like how we create that kind of
Speaker 1: deterrence when it comes to global satellites. Incredible story. Katrina Manson,
Speaker 1: Cyber and Emerging Tech reporter at Bloomberg News via zoom
Speaker 1: Joel Weber, editor at Bloomberg BusinessWeek. This story in the
Speaker 1: new issue at Bloomberg business Week Magazine. You're listening to
Speaker 1: the Bloomberg Business Week podcast just Live week days from
Speaker 1: two to five pm Easter on Bloomberg Radio, the Bloomberg
Speaker 1: Business a band You two. You can also listen live
Speaker 1: to our flagship New York station, Just Say Alexa play
Speaker 1: Bloomberg eleven thirty. All right, So, getting to a clean
Speaker 1: energy world, it is already up ending the establishment. It
Speaker 1: costs a lot of money, and it requires a whole
Speaker 1: lot of new infrastructure. So Carol, this is going to
Speaker 1: bring us to our next big story in the upcoming
Speaker 1: issue of Bloomberg business Week. This story takes us to
Speaker 1: a two hundred and eleven mile road in the Alaskan wilderness. Yeah.
Speaker 1: The new issue of Bloomberg Business Week, out on newstands
Speaker 1: later on this week. Already on the Bloomberg this story
Speaker 1: you can find it and also at Bloomberg dot com
Speaker 1: slash business Week. So let's get to it with us.
Speaker 1: Is David Wollman, Bloomberg Business Week contributor, joining us via
Speaker 1: zoom in Hawaii along with the editor of Bloomberg Business
Speaker 1: Week till web where he's here in our Bloomberg Interactive
Speaker 1: Broker studio. The story fits into another conversation we just
Speaker 1: had about energy infrastructure and all that it entails. Don't
Speaker 1: tell us about it. What really stood out to us
Speaker 1: when David pitched us the story was that it starts
Speaker 1: to look like how the US will will try and
Speaker 1: become energy independent. There's a lot of stuff that we
Speaker 1: need to achieve that, and you know, we're gonna need
Speaker 1: to continue to import stuff for the foreseeable future. But
Speaker 1: a little place called Alaska happens to have a lot
Speaker 1: of resources. But in order to get there, we might
Speaker 1: need to build a road, um like two hundred and
Speaker 1: eleven miles into the wilderness. And it really speaks to
Speaker 1: what a complicated idea energy and dependence actually is. It
Speaker 1: sounds great and then it's like, oh, right, how do
Speaker 1: you get that stuff out of the ground and into
Speaker 1: you know, electric batteries for cars? And David, what does
Speaker 1: that look like in Alaska? And how have we come
Speaker 1: to a moment where we might be willing to, uh,
Speaker 1: you know, compromise some wilderness to get some new cars. Yeah.
Speaker 1: I first learned of this story because a guy in
Speaker 1: this tiny truck stop of called Coldfoot Camp up there
Speaker 1: about sixty miles north of the Arctic Circle. He sent
Speaker 1: me a direct message on Twitter and he said, you know,
Speaker 1: there are these helicopters flying in and out of this
Speaker 1: place all the time right now, doing all this prep
Speaker 1: work for this very controversial road that would cross some
Speaker 1: two hundred and eleven miles through the wilderness to access
Speaker 1: this long sought after mining district called the Ambler. And
Speaker 1: he just was trying to sound the alarm about it, saying,
Speaker 1: you know, nobody really knows this is happening. There are
Speaker 1: a lot of these controversial infrastructure projects related to mining
Speaker 1: in Alaska. This one just you know, doesn't have any
Speaker 1: Trump family members who are making news about it. And
Speaker 1: so he felt like I gotta tell someone, and so
Speaker 1: I flew up there just before the snow in the
Speaker 1: fall to see this with my own eyes, and you know,
Speaker 1: like a lot of these big infrastructure debates, you know,
Speaker 1: it's just as thorny as you could possibly imagine. We
Speaker 1: absolutely need these minerals out of the ground for green
Speaker 1: tech future, and it would be absolutely destructive to an
Speaker 1: invaluable piece of wilderness. And so you know, then the
Speaker 1: question becomes where do we land on this particular one
Speaker 1: versus that particular one or Bristol Bay, because we do
Speaker 1: need to develop more domestic sources for the supply chain.
Speaker 1: But you know, mining doesn't exactly have the most impressive
Speaker 1: track record when it comes to careful extraction of these materials,
Speaker 1: and so that that was sort of them again, the
Speaker 1: really thorny issue I wanted to go see firsthand. So
Speaker 1: what's the status of the Ambler Access project currently? Yeah,
Speaker 1: it was really like a kind of pipe dream for
Speaker 1: a long time. You know, geologists have known about this
Speaker 1: impressive mineral resource out there for generations now, but it's
Speaker 1: just way way too remote for anyone to take seriously
Speaker 1: when it came to the economics of extracting it. Then,
Speaker 1: about ten or fifteen years ago, this idea of building
Speaker 1: a road connecting the famous Dalton Highway to the to Ambler,
Speaker 1: it began to get a little more grown up attention,
Speaker 1: I would say, And now that there's momentum from Biden's
Speaker 1: Infrastructure Bill, the Inflation Reduction Act, and of course Alaska's
Speaker 1: kind of pro mining senators, the road has really gotten
Speaker 1: gotten more of a push. And so now there are
Speaker 1: some mining firms that have claims both in the mind
Speaker 1: the Ambler Mining District and then all along the proposed
Speaker 1: route as well, that are just trying to keep inching
Speaker 1: this thing forward, inching it forward, trying to please all
Speaker 1: the various stakeholders, you know, critical among them, I should add,
Speaker 1: are the Alaska Native corporations, which are you know, very
Speaker 1: powerful up there and also own some of the land
Speaker 1: that the road would would travel through. So right now
Speaker 1: they're doing kind of preliminary groundwork with like studying animal habitat,
Speaker 1: building helicopter landing zones, and trying to get this environmental
Speaker 1: impact statement finally permitted so that they can they can
Speaker 1: press forward with the thing. David, can you talk about
Speaker 1: how the American consumer plays into this. I know in
Speaker 1: your story you talk about how increased demand for evs
Speaker 1: might actually be a helpful solution here. Yeah, I'm glad
Speaker 1: you asked that, because this stuff gets so dizzying with
Speaker 1: the like should we build it? Should we not? Should
Speaker 1: we drill it? Should we not? And I paused at
Speaker 1: some point and just thought about my own life frankly,
Speaker 1: and my children saying, hey, you know, can we get
Speaker 1: an electric vehicle already? Like we should? We should be
Speaker 1: doing this thing. They're worried about climate change like everyone else.
Speaker 1: And you know, we noticed this is more me and
Speaker 1: my wife than me and my kids. But the tax
Speaker 1: incentives now, thanks to recent legislation, so that the everyday
Speaker 1: consumer is gonna get a nice rebate if they buy
Speaker 1: an EV But there are various those evs have to
Speaker 1: be produced or I think the specifics are some percentage
Speaker 1: of the materials, and the manufacturing has to happen within
Speaker 1: the United States in order from the consumer to get
Speaker 1: that rebate. And so now suddenly, like beyond Alaska Native corporations,
Speaker 1: beyond the mining companies, even beyond the legislators, the really
Speaker 1: the big push to access these materials might just come
Speaker 1: from everyday people like me who want to replace you know,
Speaker 1: the families mini suv with an EV and I think,
Speaker 1: you know, that's one of those sort of demand wins
Speaker 1: kind of kind of conversations. David just got about thirty
Speaker 1: seconds left here, So it sounds, you know, we understand
Speaker 1: the demand and the need for this, at the same
Speaker 1: time it sounds like it could be a mess and
Speaker 1: impact the climate negatively as a result of building this road.
Speaker 1: So thirty seconds, that's a big deal, and that's a
Speaker 1: big part of this story. It is, you know. And
Speaker 1: then the pace i'd ad is the time horizon puzzle,
Speaker 1: because even if they greenlit this thing tomorrow, no OAR
Speaker 1: is going to be coming out of the ground any
Speaker 1: sooner than a decade from now. So the question is, like,
Speaker 1: will our critical minerals ten to fifteen, twenty years from
Speaker 1: now be the same critical minerals we're talking about today.
Speaker 1: It's an incredible attention to people end on right like
Speaker 1: the future, like this seems like the future, but like
Speaker 1: the future changes. That's right. Ten years is a long time,
Speaker 1: certainly when you're talking about this incredible story. Deep Dive
Speaker 1: highly recommend people check it out online or on the
Speaker 1: Bloomberg or pick up the magazine later on this week.
Speaker 1: David woman. Thank you so much. Rider joining us via
Speaker 1: zoom from Hawaiian. Of course, our thanks to the editor
Speaker 1: of Bloomberg Business Week, Joel Webber. As we said, that
Speaker 1: new issue out later on this week. This is Bloomberg Radio.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live week days from two to five pm Eastern on
Speaker 1: Bloomberg Radio, the Bloomberg Business app band you two. You
Speaker 1: can also listen live to our flagship New York station
Speaker 1: Just Say Alexa play Bloomberg e Love and Dirty. So
Speaker 1: much has come out of US lawmakers. You've got the
Speaker 1: infrastr Structure Investment in Jobs Act that's more than half
Speaker 1: a trillion dollars in spending, the Chips in Science Act
Speaker 1: that's almost three hundred billion, The Inflation Reduction Act that
Speaker 1: again is another half trillion for healthcare, climate energy. We know, Maddie,
Speaker 1: the US government has put forth some major, major spending initiatives.
Speaker 1: So with that in mind, we wanted to talk to
Speaker 1: our next guest about what he is seeing, specifically delighted
Speaker 1: to have with us. Bob Pragata. He is CEO at
Speaker 1: the nearly fifteen and a half billion dollar market cap
Speaker 1: company Jacob solutions. They do engineering, construction services, specialty consulting,
Speaker 1: and clients really across industries and across the world. They're
Speaker 1: based in Dallas, but he is here in our Bloomberg
Speaker 1: Interactive Broker's studio. Bob, good to have you here with
Speaker 1: Maddie and myself. First up, Always good to talk with
Speaker 1: someone like yourself because you see so much. How would
Speaker 1: you describe the economic and business environment right now? I
Speaker 1: would say that it's what we're seeing. You talked about
Speaker 1: the legislative kind of undercurrent right now really to stimulate
Speaker 1: the economy. We're seeing it robust. It's a generational kind
Speaker 1: of opportunity for companies like ours to take advantage of
Speaker 1: long history and success within the infrastructure world, the advanced
Speaker 1: facilities specifically semiconductor and life sciences, as well as all
Speaker 1: that's going in the whole energy transition environment today. So
Speaker 1: this is in my career, Caroline, I've never seen anything
Speaker 1: of this magnitude. Really, how do you decide what to
Speaker 1: do in that situation when you do have that much opportunity?
Speaker 1: What's your thinking behind like capital allocation and things like that,
Speaker 1: First and foremost a balanced capital allocation program, But really
Speaker 1: this is an opportunity for us to grow organically. You know,
Speaker 1: we made some big transformational moves within our portfolio and
Speaker 1: the end markets that we serve, the services that we're
Speaker 1: going to concentrate in on some digital platforms that we've
Speaker 1: invested in, and so we're feeling really strong strongly that
Speaker 1: this is the time for us to take advantage of
Speaker 1: some of these tailwinds that were that we're seeing, and
Speaker 1: so it's exciting times. It does sound exciting, So talk
Speaker 1: to us about tailwinds because one of the things I
Speaker 1: love to do, and this is why I also love
Speaker 1: to play. I know we focus on public markets, but
Speaker 1: I love private markets. Get an idea of the trends
Speaker 1: that are really taking hold as a result of whether
Speaker 1: it's the government money or private money. What trends are
Speaker 1: you guys working with or working on or involved in
Speaker 1: that you say, Okay, this is the future or these
Speaker 1: are the things we're going to all be talking about
Speaker 1: a lot in the future. First and foremost, climate change
Speaker 1: and what we describe as climate response. Obviously in a
Speaker 1: lot of press on this, it is the global disruptor
Speaker 1: of all global disruptors and the way that that then
Speaker 1: transcends down into the transportation world, the water world, everything
Speaker 1: about the environment, energy transition, and just how it affects
Speaker 1: all of our lives globally. Is the number one second
Speaker 1: that we've really been focused in on is digital enablement.
Speaker 1: So we don't want to turn into a technology company
Speaker 1: or a tech company. We're going to stay core to
Speaker 1: our intellectual horsepower and our science based consulting. But digital
Speaker 1: enablement is now turning our whole world upside down, is
Speaker 1: really enhancing the solutions that we can provide today. Favor
Speaker 1: before you go further digitally, what does that mean though specifically?
Speaker 1: Because I feel like we've been living in a digital
Speaker 1: world for some time and I know it can explode
Speaker 1: in a lot more ways. So what does it mean specifically?
Speaker 1: If you could, why don't it be specific? And then
Speaker 1: I'll give an example. Yeah, so right now in the
Speaker 1: broadest sense, is the use of software platforms combined with
Speaker 1: our intellectual horsepower in our services in order to facilitate
Speaker 1: and enable a more productive or efficient solution. Before all
Speaker 1: of that would be done, Yeah, with just us and
Speaker 1: what we knew about the domain knowledge we had around
Speaker 1: different facilities or infrastructure, etc. Today, with software we can
Speaker 1: expedite that that no how and use those algorithms even
Speaker 1: enhance the solution. And here's an example. We've been in
Speaker 1: the operations in maintenance world for water facilities, water treatment,
Speaker 1: wastewater treatment forever. These facilities generate a ton of data.
Speaker 1: Conventional means would we'd take that data and then in
Speaker 1: the field we would make decisions on treatment methodologies, what
Speaker 1: to do with some of the energy byproducts, etc. We're
Speaker 1: in partnership today with a company called Palenteer, and with
Speaker 1: Palentier as well as our own unique and proprietary algorithms
Speaker 1: that we've developed, we're enhancing worker productivity by fifty percent
Speaker 1: on having the data right in front of you that's
Speaker 1: already analyzed and ready to go, and our people in
Speaker 1: the field are able to capitalize on that. So's it
Speaker 1: expedites things, makes it smarter, quicker, all that good stuff
Speaker 1: and smarter on the smarter front, less efficiencies or defects. Okay,
Speaker 1: is there anything within all of the government spending that
Speaker 1: we mentioned at the top that's helping you achieve some
Speaker 1: of the goals that you've talked about specifically? And what
Speaker 1: would you say is maybe the single biggest thing that
Speaker 1: something like the IRA has enabled you to do. Specifically,
Speaker 1: on the IRA, I would say what it still probably
Speaker 1: three to four months out from being out. Public's what
Speaker 1: the effect that it's having in our environmental as well
Speaker 1: as potentially in the energy transition components. So those programs,
Speaker 1: whether it be grid modernization or everything that's doing to
Speaker 1: electrify the world, even to include the electric vehicle ecosystem,
Speaker 1: that's having a big effect on our business, even prior
Speaker 1: to the real funds fluent. The other one's a Chips ACT. Yeah, yeah,
Speaker 1: which is which is a big one, and the Chips
Speaker 1: ACT is in real time. But what companies, specifically large
Speaker 1: US companies have done is they've already announced and have
Speaker 1: started the design of these facilities. We've been involved with
Speaker 1: that from from the beginning. So the Chips ACT is
Speaker 1: going to do nothing but continue to facilitate that growth.
Speaker 1: So you're talking about the actual factories, the buildings and
Speaker 1: all that and manufacture the chips. Okay, how far along
Speaker 1: are we on the impact of both of those? I
Speaker 1: know you mentioned I already taking a couple more months.
Speaker 1: Like if we're in a football game, what quarter are
Speaker 1: we in here? Early first quarter? Okay, early first quarter,
Speaker 1: i'd say on i JA the Infrastructure Act. Yeah, we're
Speaker 1: probably we're in the first quarter break. We're talking about
Speaker 1: the CEO of Jacob Solutions, Bob Purgatta. One thing I
Speaker 1: think is interesting and I feel like these are things,
Speaker 1: you know, Mandy, that we've talked about a lot, climate change, renewables,
Speaker 1: bringing when it comes to chips, like more manufacturing back
Speaker 1: in the US. So what you're seeing is that, Okay,
Speaker 1: we've been talking about it for a long time, this
Speaker 1: stuff is really happening, and you're seeing tons of money
Speaker 1: going into it. That's exactly right and in the early
Speaker 1: stages and probably goes without saying, you know, we have
Speaker 1: been waiting for this. We got announced a couple of
Speaker 1: years ago. But how we measure it through our pipeline
Speaker 1: into actual opportunities and then flowing through our p and L.
Speaker 1: We're in the midst of that right now. What does
Speaker 1: it mean you think for like the US going forward specifically?
Speaker 1: I mean you work globally, so when you look at
Speaker 1: we've always talked about globalization and global supply chains, and
Speaker 1: it does feel like there's pushedback, Bob against that. So
Speaker 1: are you seeing that we are seeing it in a
Speaker 1: couple of different forms. But here's where Jacobs is a
Speaker 1: bit different. So you also hear about We talked a
Speaker 1: lot about the tailwinds. I think it would be fair
Speaker 1: to talk about some of the headwinds, things like inflation,
Speaker 1: the war on talent, these types of issues, labor shortages, etc.
Speaker 1: We've been able to really power through all of that
Speaker 1: because of our model, which is around optimizing our global
Speaker 1: talent and utilize them for local solutions. And that really
Speaker 1: has been in twine intertwined in our culture, our culture
Speaker 1: of inclusion and diversity and being a global company that
Speaker 1: provides local solutions. We've been able to really put that
Speaker 1: into great effect over the course in the last few
Speaker 1: years as we've seen these headwinds as well as tailwinds
Speaker 1: buoy our business. So even though you're seeing maybe the
Speaker 1: world pushed back against globalization, for you guys, in your strategy,
Speaker 1: it's key to have people in the local markets to
Speaker 1: understand those markets they're working with it and having people
Speaker 1: on the ground they're correct Fay, that's a fair way
Speaker 1: of looking at it, while at the same time having
Speaker 1: global talent for expertise that we may have in Australia
Speaker 1: or in Southeast Asia and India and Europe all over.
Speaker 1: So I think about for our investors who are listening
Speaker 1: to you, and you really do have this incredible vantage point.
Speaker 1: I wish we had like a half an hour more
Speaker 1: to talk. What would you say to them as we
Speaker 1: are in this kind of tricky environment. You know all
Speaker 1: the FED talk and it's all important, but you've got
Speaker 1: to be looking years ahead. What would you tell our
Speaker 1: investor audience about here's where you need to focus, focusing
Speaker 1: on companies that are not exclusively but have a heavy
Speaker 1: focused in those areas with long secular growth trends. We
Speaker 1: talked a lot about infrastructure. Oh, it's a big part
Speaker 1: of our business, advanced facilities, tech, manufacturing. I mean, these
Speaker 1: are trends that are not two three four year trends.
Speaker 1: These are trends that are tied to the digitization of
Speaker 1: the entire world, the energy transition that we're moving to
Speaker 1: in all of efforts around climate response. I would say
Speaker 1: investors that have opportunities to invest in those sectors and
Speaker 1: companies that support those sectors, it's a great investment. I
Speaker 1: didn't hear anything about chat GBT. All right, that'll be
Speaker 1: the next time. Another group of Investments Web. Thank you
Speaker 1: so much. Come back soon or join us via zoom
Speaker 1: because love the advantage point. Like I said that, you've
Speaker 1: got Bob Forgota. He's CEO at Jacob's Solutions. Joining us
Speaker 1: here in our Bloomberg Interactive Brokers studio, you're listening to
Speaker 1: the Bloomberg Business Week Podcast. Catch us live weekdays from
Speaker 1: two to five pm Eastern on Bloomberg Radio, the Bloomberg
Speaker 1: Business app band you two. You can also listen live
Speaker 1: to our flagship New York station, Just Say Alexa play
Speaker 1: Bloomberg eleven thirty. This next story has it all for
Speaker 1: US celebrities, fugitives, and even the Fuji's. On that last point,
Speaker 1: Pras Michelle, you might remember him as a Grammy Award
Speaker 1: winning rapper, longtime member of the Fuji's. What you may
Speaker 1: not know is his role in a high stakes negotiation
Speaker 1: between the US and China. Carrol, That's for sure. It
Speaker 1: is the cover story of the new issue of Bloomberg
Speaker 1: Business Week. It is mind blowing by the new issue.
Speaker 1: Add on newstands now on line up, Bloomberg dot com,
Speaker 1: slash business Week on the Bloomberg terminal. So let's get
Speaker 1: to it with Bloomberg News Investigations reporter Anthony Cormier. He
Speaker 1: joins us here in our Bloomberg Interactive Broker's studio. So
Speaker 1: I feel like Anthony, that this story, the more it
Speaker 1: gets told, the more riveting and the more cinematic it gets.
Speaker 1: So tell us about um the member of the Fuji's
Speaker 1: and the connection with one MDB. Right, So you know,
Speaker 1: Pras Michelle is one of the founding members of the Fuji's,
Speaker 1: the nineties winning nineties Grammy winning a rap act and
Speaker 1: he met a a unassuming, baby faced Malaysian businessman in
Speaker 1: two thousand and six at a nightclub and his life
Speaker 1: changed pretty dramatically after that. That Malaysian man was Jolo
Speaker 1: the Accused, a financier who who's facing very serious charges
Speaker 1: of embezzling from a Malaysian sovereign wealth fund. And we
Speaker 1: picked this story up after you know, Joelo has been
Speaker 1: charged with multiple offenses, He's at least been been accused
Speaker 1: of bezzling money, and he asks for a favor from
Speaker 1: his dear friend Praz Michelle. So many different places to
Speaker 1: go on this one, and I feel like you got
Speaker 1: to love a story that is not only being told
Speaker 1: by us in all the esteemed business outlets out there.
Speaker 1: But it's also being told by page six, So let's
Speaker 1: go to it. First of all, how did these two
Speaker 1: come together and how did Praz get so intertwined? Right? Well,
Speaker 1: Praz had, you know, process a connector. He's the kind
Speaker 1: of guy who has friends in business and in politics
Speaker 1: and in entertainment, and he, you know, he meets Jolo
Speaker 1: at a party and they slowly become friends, and they
Speaker 1: begin to explore these sort of business opportunities together, and
Speaker 1: Joe found that Praz had connections to the Obama White
Speaker 1: House and what they have been accused of is using
Speaker 1: straw donors to donate money to Obama's twenty twelve election campaign.
Speaker 1: Many years go by and Pras is essentially excuse me.
Speaker 1: Joe is essentially facing a slew of charges for for
Speaker 1: two complaints and he needs some help from representation. Turns
Speaker 1: to his dear friend Pras and he says, listen, do
Speaker 1: you have any help? How can you connect me with
Speaker 1: a lawyer with representation? So I can you know, make
Speaker 1: this thing go away? And that begins the sort of
Speaker 1: you know, saga of how pros assembles a team. He
Speaker 1: goes to an old friend who connects him with a
Speaker 1: gentleman called Elliot Broidy, who is a Republican fundraiser from California,
Speaker 1: and they put together this plan where they intend to
Speaker 1: influence the new and perhaps chaotic Trump administration. They're hoping
Speaker 1: that they can they can get an end there, and
Speaker 1: then things take a turn. They go and they meet
Speaker 1: with and they meet with Joe, and you know, at
Speaker 1: this meeting they're introduced to a gentleman called Sun Le Jeun,
Speaker 1: who is the Vice Minister of Public Security for the
Speaker 1: People's Republic of China, and they have a big question.
Speaker 1: They want to see if the Chinese can get back
Speaker 1: a critic who's living in the US overlooking Central Park.
Speaker 1: And this gentleman is called Guo Wangli and he's begun
Speaker 1: to make all of these absurd allegations about the PRC,
Speaker 1: and the Chinese want him back, and they say to
Speaker 1: Praz and his group of friends, can you get him back?
Speaker 1: And you know that that leads again to the very
Speaker 1: unusual set of circumstance. Well then what does PROS do
Speaker 1: after that? But you know, there's a number of things
Speaker 1: that happened between there, but one night Pros is sleeping
Speaker 1: and the Chinese, including suddenly Sean. They're in the United States.
Speaker 1: They're trying to meet with top members of the White
Speaker 1: House or the administration, and they can't get anywhere. They
Speaker 1: the meeting doesn't happen, and so they phone pros basically
Speaker 1: and say, get to the Four Seasons on fifty seven,
Speaker 1: Poe right across from our building. Get here now. And
Speaker 1: you know he arrives. There's this very cloak and dagger
Speaker 1: scene where he's told to exit the hotel and circle
Speaker 1: it twice to make sure I'm not being tailed. And
Speaker 1: his bag, his phone's going a bag and he's alone
Speaker 1: in a room with two chairs. He doesn't have any
Speaker 1: idea what's going on, and he's basically like, oh my gosh,
Speaker 1: they really they can't kill me in the Four Seasons.
Speaker 1: So let's bring in the editor of BusinessWeek, Joe whatever, Joel.
Speaker 1: I mean, I feel like we could just listen to
Speaker 1: Anthony go on and on about this because and we will,
Speaker 1: because who cares about me right now? The quote, the
Speaker 1: quote that you hit in the story was they can't
Speaker 1: kill me in the Four Seasons. Give me a T shirt?
Speaker 1: Yeah exactly. Yeah, when you get there, yeah, yeah, I'll
Speaker 1: go ahead and keep reading, and the story there's so
Speaker 1: many dimensions of the story and it just keeps you
Speaker 1: going until the end and then you're like, Wow, I
Speaker 1: can't wait to watch the movie about this. But so
Speaker 1: the next turn in this story is basically going to
Speaker 1: be when the prose uh goes to trial. Right, So,
Speaker 1: what are the charges against him that the US is bringing,
Speaker 1: because yeah, yeah, he faces campaign finance allegations. He faces
Speaker 1: violating what's called the Foreign Agins Registration Act, essentially acting
Speaker 1: on behalf of a foreign government. He faces some very
Speaker 1: very serious offenses. And many of the people who were
Speaker 1: also charged in this case, they've already, for lack of
Speaker 1: the word, they flipped. They're cooperating with US government now
Speaker 1: against prostincts. He says he's innocent, says, yeah, I'm not
Speaker 1: going to accept a plead to a t a charge
Speaker 1: I didn't commit. He plans to fight it, and h
Speaker 1: you know, as far as we could tell, he's going
Speaker 1: to launch a pretty vigorous efense defense. You know, I
Speaker 1: have to say, we've been looking forward to talking to you,
Speaker 1: and Joela has been like kind of teeing us up
Speaker 1: and just giving us little nuggets because part of this coverage,
Speaker 1: there's your great story, the three of you, this reporting,
Speaker 1: but there's also this incredible sidebar that talks about I
Speaker 1: said page six, right, this is a story that we've
Speaker 1: reported on all the financial journalists, but also page six
Speaker 1: because of Leonardo DiCaprio and Kim Kardashian. So tell us
Speaker 1: about that part. So you know, as the agents are
Speaker 1: as the FBI agents are pursuing Jolo, they want to
Speaker 1: find out where his money went, what he was up to,
Speaker 1: and they knew that he partied all of the time
Speaker 1: with all kinds of a list celebrities. Leonardo DiCaprio, Las Vegas,
Speaker 1: with Kim Kardashian, the record producer Swizz Beats. He gave
Speaker 1: them extraordinary gifts. He had financed the Wolf of Wall
Speaker 1: Street forri Leonardo Characrio. And so they begin to squeeze
Speaker 1: these celebrities. And you really rarely get a look at
Speaker 1: the way the FBI treats a list celebrities. And these
Speaker 1: documents are reporting shows how serious they took these these cases.
Speaker 1: And they brought you know, in fact, Leo in his case,
Speaker 1: they brought him, they sat him down for this this
Speaker 1: long and sort of invasive interview. They brought him back
Speaker 1: before grand jury. They went through his emails, his BlackBerry
Speaker 1: mess dog got grilled, ELDG. He did actually he did,
Speaker 1: you know, he you know, he had quite a lot
Speaker 1: that he did remember. And then if you read the
Speaker 1: report from the FBI, there's quite a lot of documents
Speaker 1: he didn't remember either. And you know, he had a
Speaker 1: pretty long and extensive history was showing. You know, while
Speaker 1: we know the parties, I think that's been pretty widely reported,
Speaker 1: what no one has known is how close they became.
Speaker 1: Their relationship went beyond this sort of you'll find it
Speaker 1: my film and you'll come to my yacht to let's
Speaker 1: build a billion dollar movie fund, Let's build an eco
Speaker 1: resort in an on an island. Let's you know, let's
Speaker 1: get money for this or for that. And you've got
Speaker 1: Leo connecting Joe with all of his you know, his buddies.
Speaker 1: I mean, their their relationship was much closer, I think
Speaker 1: than the public has known to this point. Okay, wait,
Speaker 1: Kardashian kim Ya, so play some poker? Does pretty well?
Speaker 1: She plays baker eye? Actually sorry, actually pretty well? Yes,
Speaker 1: she does very well. How well does she do? And
Speaker 1: what happens with the money. She does so well that
Speaker 1: she's up three hundred and fifty thousand dollars in chip
Speaker 1: one night, chips one one one night, and she her
Speaker 1: security guard effect says, you got it. Those aren't your chips.
Speaker 1: You can't take them home. She's OK, give them back
Speaker 1: to Joel, though Joela says, no, nope, they're for you.
Speaker 1: She has a note to do with this many chips.
Speaker 1: She walks to the casino counter. They literally give her
Speaker 1: a bag of two hundred fifty thousand dollars in one
Speaker 1: hundred dollar bills. They put it in a garbage bag.
Speaker 1: She puts it on her She puts it in her
Speaker 1: carry on luggage and gets on a Southwest flight back
Speaker 1: to la which is a roth. I love you Southwest,
Speaker 1: but that was I think to many of our right there.
Speaker 1: It's beautiful. You can't make it up. It is perfects.
Speaker 1: You're welcome, You're all. The teaming up was right on
Speaker 1: the money. Anthony, Thank you so much, Well done the
Speaker 1: whole team. Your investigation. Anthony Cormier, investigations reporter at Bloomberg News.
Speaker 1: Joe Webber, the editor of Business Week, this is the
Speaker 1: cover story. It's a mustrid. You're gonna have fun this
Speaker 1: weekend checking it out. This is Bloomberg. You're listening to
Speaker 1: the Bloomberg Business Week podcast. Catch us live weekdays from
Speaker 1: two to five pm Eastern on Bloomberg Radio, the Bloomberg
Speaker 1: Business app band you Doo. You can also listen live
Speaker 1: to our flagship New York station, Just Say Alexa play
Speaker 1: Bloomberg E Love and Dirty. So let's talk about the
Speaker 1: cloud a little bit, because you know, we talk about
Speaker 1: it so much, Mattie with I feel like, certainly through
Speaker 1: the earning season, whether it was Microsoft, where it was Amazon,
Speaker 1: Gartner has got some statistics out there about worldwide spending
Speaker 1: on public cloud services reaching nearly six hundred billion dollars
Speaker 1: in twenty twenty three, up more than twenty percent year
Speaker 1: over year. Yeah, and the next guest that we're going
Speaker 1: to talk with, Julia White, is going to give us
Speaker 1: some really good insights into overall cloud market dynamics. She
Speaker 1: is the chief Marketing and Solutions Officer and a member
Speaker 1: of the executive board at sapp. Julia also spent more
Speaker 1: than twenty years at Microsoft building out Microsoft Azure, and
Speaker 1: she is with us via zoom in Seattle. Julia thank
Speaker 1: you so much for being here. I wonder if you
Speaker 1: can just start off by giving us a background on
Speaker 1: your company, including the fact that I need to be
Speaker 1: calling it SAP instead of SAP, which is hilarious because
Speaker 1: you literally have that in your FAQs on your web.
Speaker 1: We've had a crazy all of a sudden, We've had
Speaker 1: like an earning stump, so it's like all of a sudden,
Speaker 1: we're going through our notes, so we're with us a
Speaker 1: little bit. But I love I love that you. I
Speaker 1: was literally just looking at and you have that in
Speaker 1: your FAQ, So yeah, just give us, just give us
Speaker 1: the background here. Absolutely great to be here with you
Speaker 1: and SAP or SAP as it's formally pronounced. We provide
Speaker 1: the cloud solutions for business transformation, right, so you talked
Speaker 1: about Microsoft in my past life or Amazon who have
Speaker 1: big cloud infrastructures, and SAP provides the business solutions, so
Speaker 1: for things like finance management, controlling inventory, supply chain, HR processes, procurement,
Speaker 1: all the business systems that run companies. Those are the
Speaker 1: cloud services that we build and provide to our customers.
Speaker 1: You know, Jel, what's great about talking to a company
Speaker 1: like you, and we've been talking in awful lot about
Speaker 1: Maddie and myself about it spending with a lot of
Speaker 1: our guests. What are you seeing, especially in a global
Speaker 1: macro environment where there's so much debate about the outlook
Speaker 1: FED policy, you know, the big macro stories that are
Speaker 1: out there, what are you seeing firsthand in terms of
Speaker 1: your clients and your customers. Yeah, definitely some interesting trends.
Speaker 1: I'd say for sure, we've switched into a rigorous process
Speaker 1: around tech spending. Right. There's no more nice to have tech.
Speaker 1: It needs to be proven, it needs to be able
Speaker 1: to demonstrate real business value. And you've you know, you've
Speaker 1: even seen in the recent earnings around some of the
Speaker 1: big cloud infrastructure providers, you know, some of the growth
Speaker 1: starting to slow a bit because customers bought a lot
Speaker 1: during COVID. Right, they've moved a lot of existing business
Speaker 1: systems to public cloud providers. But that was just basically
Speaker 1: picking up an existing system running in in a cloud
Speaker 1: to get some of the efficiencies, which is great, but
Speaker 1: now they needed some of that business value to come
Speaker 1: out of it, not just running it in a cloud model.
Speaker 1: But are you're seeing a lot more decision makers being
Speaker 1: in the mix as they purchase these things and really
Speaker 1: saying like, well, how are you going to help me
Speaker 1: with inflation? Right? How are you going to help me
Speaker 1: refactor my suffl That sounds like CFOs are in the
Speaker 1: inquation or the financial guys are like, okay, great, we
Speaker 1: want to spend it, but tell us how that helps
Speaker 1: us with the bottom line? Is that fair? Yeah? Way
Speaker 1: more CFOs in the mix. And really those value cases
Speaker 1: coming up, right, and I think the three big ones
Speaker 1: right showing shifting business models, which is a CFO led conversation.
Speaker 1: I need to go from selling products to subscriptions. I
Speaker 1: need full customer life cycle engagement. Right, that's something very hot.
Speaker 1: Supply chain refactoring. I mean, twenty years of going global
Speaker 1: supply chain, now we're refactoring all that to be more regional.
Speaker 1: And then interesting the last one, despite controversy or other
Speaker 1: things saying otherwise, sustainability still top concerns, switching to be
Speaker 1: more sustainable as companies, we still see constantly driving purchases.
Speaker 1: That's really interesting, especially given the change in the supply
Speaker 1: chain piece that you mentioned right before that, I would
Speaker 1: think that given some of those headwinds, it would be
Speaker 1: really hard for these companies to continue to prioritize that.
Speaker 1: How are you kind of seeing that play out? Yeah,
Speaker 1: you know, again there's lots of speculation and rumor that
Speaker 1: sustainability is dropping. We're not seeing that in terms of
Speaker 1: people behavior. And actually it's somewhat a little bit of
Speaker 1: a silver lining as people need to shift their supply
Speaker 1: chains right from big global to more regional and more suppliers.
Speaker 1: In some cases they're investing in more sustainable agriculture as
Speaker 1: an example, bringing new people into the supply chain that
Speaker 1: weren't participating before, which enables you to be more sustainable,
Speaker 1: bring more diversity into supply chains. So in some ways
Speaker 1: they're actually very aligned. Or also the case where you're
Speaker 1: doing more reuse I know in circular economy actually brings
Speaker 1: down costs, helps supply chain resiliency and improve sustainability. Your
Speaker 1: sweet spot for SAP is mid market, which you know,
Speaker 1: the big you know, large cap companies often get a
Speaker 1: lot of the headlines, a lot of the attention, But
Speaker 1: tell us about the mid cap space, which I think,
Speaker 1: just like small caps, tells us so much about the economy. Yeah,
Speaker 1: thank you for asking, Because most people think s IF
Speaker 1: the only serves the biggest of the world companies, which
Speaker 1: we do, but the majority of our customers are actually
Speaker 1: in mid market, and you know, the things that we're
Speaker 1: seeing big companies amplify when we talk to our mid
Speaker 1: market customers, right when they have little fluxes in revenue
Speaker 1: and it can be devastating impacts on their bottom line,
Speaker 1: and so working with them on how they manage inflation,
Speaker 1: better management own cash flow, better business planning. And the
Speaker 1: nice thing about cloud technology is it gives any size customer,
Speaker 1: but midmarket customers access the same sophisticated business process tools
Speaker 1: as a big company, right, so it really has a
Speaker 1: democratizing effect to it. So we're able to really help
Speaker 1: mid market in the ways we help big customers, but
Speaker 1: in a way that's more agile and cost effective for them.
Speaker 1: What would you say is one of the biggest mistakes
Speaker 1: that you see some of these Not to put it
Speaker 1: on them, but some of these midsize companies making when
Speaker 1: they are struggling and they don't necessarily have access to
Speaker 1: the tools that you offer yet Yeah, I think that
Speaker 1: the biggest mistake is they spend too long running their
Speaker 1: company on Excel and they you know, they're moving spast
Speaker 1: they're trying to be efficient, but they don't realize what
Speaker 1: they're missing out on. And you know, I was actually
Speaker 1: just recently working with a kind of mid size chemical
Speaker 1: company and they waited a long time to move into
Speaker 1: automation of business processes, which it just helps a lot
Speaker 1: of our ound efficiency and decision making. And you know,
Speaker 1: once they spent the time to know want some more modern,
Speaker 1: you know, enterprise resource management, they were able to react
Speaker 1: much more quickly and they saw remediate results, but you
Speaker 1: know they had to go through that journey to get there,
Speaker 1: and then in retrospect they're like, I'm should have done
Speaker 1: this earlier, but it takes time and focus. It does
Speaker 1: remind me a little bit, and we don't have to
Speaker 1: get into this, but it reminds me of FTX using
Speaker 1: quick books. When we all found that out, we were like,
Speaker 1: oh my god, how did you have such a huge
Speaker 1: company and do that. But then we talk to these
Speaker 1: startup guys who are like, if you have a big idea,
Speaker 1: just make it happen and do it. But it sounds
Speaker 1: like I'm I'm hearing from you that you do need
Speaker 1: to focus on the bones and the infrastructure a little
Speaker 1: bit as well. Yeah, really thinking about all these processes. Yeah,
Speaker 1: they're getting it done, but at what costs and what
Speaker 1: are they not getting? And it's oftentimes hard to see
Speaker 1: the opportunity cost or the missed cost of what they're doing.
Speaker 1: But as we work with them, and part of it too,
Speaker 1: is it used to be I mean big and hard
Speaker 1: and expensive to deploy, and you know an ear hear
Speaker 1: you know enterprise resource process right, it used to be
Speaker 1: on the premises, but now the cloud changes that so fundamentally.
Speaker 1: But I think a lot of mid market customers are
Speaker 1: still coming to realize that actually I can get a
Speaker 1: really robust enterprise resource system in place in a couple
Speaker 1: of months. You know, it's not three years and three
Speaker 1: hundred million dollars anymore. Julia tell us about just got
Speaker 1: about a minute or so left here the feedback loops.
Speaker 1: So in other words, you're talking with your clients and customers.
Speaker 1: You're saying that these organizations are feeling the impact of
Speaker 1: a downturn in the economy. So you say about value
Speaker 1: with fewer resources. So how do you go back to
Speaker 1: your creative team or your engineers, when your solutions team
Speaker 1: and say, hey, here's what we need to be doing,
Speaker 1: because this is what the customer demands. Yeah, I think
Speaker 1: the things that the big trends we're hearing from our
Speaker 1: customers are automation, which means, you know, using AI to
Speaker 1: identify where there's inefficiencies and automating that out and helping
Speaker 1: the customer be much more predictive with what's next. Right,
Speaker 1: Like the world's changing fast and all of our whistle
Speaker 1: balls are kind of imperfect these days, and so that
Speaker 1: agility to do different kinds of predictive planning is the
Speaker 1: generative AI move kind of impacting you guys all of
Speaker 1: a sudden, because it does seem like it's all of
Speaker 1: a sudden everybody's radar. Well, we knew it's not brand new, Yeah,
Speaker 1: it has, but it has definitely hugely revolutionary opportunities with it.
Speaker 1: So absolutely looking at how we use it in a
Speaker 1: bunch of our different products, whether it's HR and onboarding
Speaker 1: to customer engagement. All right, gonna leave it there, Hey,
Speaker 1: thank you so much, really appreciate it. Julia White's chief
Speaker 1: Marketing and Solutions Officer at SAP. Joining us via zoom
Speaker 1: from Seattle. You're listening to the Bloomberg Business Week podcast.
Speaker 1: Catch us live weekdays from two to five pm. Eastern
Speaker 1: on Bloomberg Radio The Bloomberg Business a band you two.
Speaker 1: You can also listen live to our flagship New York
Speaker 1: station Just Say Alexa play Bloomberg e Love and thirty.
Speaker 1: I'm so delighted at our next guest, looking forward to
Speaker 1: bringing him in because we want to talk a little
Speaker 1: bit about the startup world. Bloomberg is reported AI has
Speaker 1: been one of the only sectors. We're startups with little art,
Speaker 1: no revenue, have raised huge funding halls even an environment
Speaker 1: where checks are hard to come by. We talked about
Speaker 1: it chat gybt just with our brad Stone, So we
Speaker 1: wanted to get some thoughts about the startup world and
Speaker 1: we bring it someone who has built two unicorns. So
Speaker 1: great to have back with us and here in our
Speaker 1: Bluebird Interactive Brokers Studio, Studio or Levine. He is co
Speaker 1: founder of Ways They of course We're sold to Google
Speaker 1: for more than a billion dollars back in twenty thirteen.
Speaker 1: He was an investor and move It, which Intel bought
Speaker 1: for a billion back in twenty twenty. His book, which
Speaker 1: we recently talked about is fall in Love with the Problem,
Speaker 1: Not the Solution, a handbook for entrepreneurs or so great
Speaker 1: to have you here with Maddie myself. How are you
Speaker 1: thank you really happy to be here. I'm excellent, all right.
Speaker 1: So we're so glad to have you back with us.
Speaker 1: So much to talk about. We've got two nice long
Speaker 1: chunks of time to do it. Talk to us about
Speaker 1: the startup world right now and how you see it,
Speaker 1: because there is a lot of attention on AI, in
Speaker 1: generative AI, courtesy of that Microsoft investment. How do you
Speaker 1: see it? How do you think about it? So we
Speaker 1: startups are here to stay, right at the end of
Speaker 1: the day. There are many startups that are starting from
Speaker 1: the problem and trying to create value through solving a problem,
Speaker 1: and they're here to stay. And at the same time,
Speaker 1: we have seen in their recent years overinflated valuation that
Speaker 1: created some tensions with the parish market that we are
Speaker 1: experiencing in general. And I think just because there was
Speaker 1: so much money floating around out there, a major part
Speaker 1: of it us yes, right, And so for a certain extent,
Speaker 1: I would say, when you are being overwhelmed with amount
Speaker 1: of money, then you are actually urged to spend it
Speaker 1: in order to show progress, and the result is that
Speaker 1: you might be spending it on the wrong things. Well,
Speaker 1: I love to hear you explain it in such a
Speaker 1: simple way, But the way that I always think about
Speaker 1: it is just that's how you get a wee work.
Speaker 1: Is always what I think about because I'm obsessed with
Speaker 1: that story. What do you think is given that, do
Speaker 1: you think that maybe and a higher interest rate environment
Speaker 1: might actually be good news for the startup world? Um?
Speaker 1: You know, at the end of the day, the higher
Speaker 1: interest rate is in order to fight inflation. And over
Speaker 1: the years we have seen that that sort of medicine
Speaker 1: actually works, right, and so we are likely to see
Speaker 1: that until we will see some sort of a slowdown
Speaker 1: in the market and then and then interest rate will
Speaker 1: start to go down again and growth is going to
Speaker 1: come back. But does it make it harder to get funding? Right? Look,
Speaker 1: I describe building a startup in three dimensions. Right, It's
Speaker 1: a long roller coaster journey of failures and it's always
Speaker 1: like that. Right now, if you'll add to that, on
Speaker 1: top of that the environment that is making it even tougher. Um,
Speaker 1: And I would call fundraising as a roller coaster in
Speaker 1: the dark, you don't even know what's coming. And these
Speaker 1: days it's longer and it's harder, and but it was
Speaker 1: longer and harder before as well. Or how many times
Speaker 1: if people say no, no, no, no, hundreds of times,
Speaker 1: hundreds of times, how difficult was it? And were there
Speaker 1: times You're like I'm out of here? You know? One
Speaker 1: of the things that he's going to make entrepreneurs successful
Speaker 1: is the great is the never give up attitude, right,
Speaker 1: And so you will hear no so many times, and
Speaker 1: you might be going home crying, but it will never
Speaker 1: discourage you from your mission. So you kept add it
Speaker 1: obviously many times. But it is interesting because money support
Speaker 1: all these things are necessary. I mean, was there a moment,
Speaker 1: whether it was Ways or something else where you were
Speaker 1: just like, gosh, you know, we've got a couple of
Speaker 1: days left or a couple of weeks left of money
Speaker 1: or or something where you realize something's got to change
Speaker 1: positively in our direction. Or did it never get to
Speaker 1: that point? I would say that, you know, with Ways
Speaker 1: and Movie and ten of other startups that I was
Speaker 1: involved at in all of them, Throughout the journey, we
Speaker 1: ran into the near the end situation right really close
Speaker 1: to the end situation, and in most of it we
Speaker 1: will recover right. So so at the end of the day. Look,
Speaker 1: the persistency and the value that you create is going
Speaker 1: to be paid back. Now, if you don't create value,
Speaker 1: if you don't solve a problem, if you don't figure
Speaker 1: out product market feed, you will die. Unfortunately, you will die.
Speaker 1: You can't just create, right, it's gotta have it's gonna
Speaker 1: have a reason to exactly, yeah, and real value. I
Speaker 1: do wonder if we can also just go back to
Speaker 1: the idea of all of the nose in the room
Speaker 1: really quickly, because it's such a great point in question, Carol,
Speaker 1: I wonder if you can talk about the challenge of
Speaker 1: maybe not being part of the Silicon Valley broke community
Speaker 1: straight away, like a lot of times we talk about this,
Speaker 1: the VC folks who all went to Stanford together investing
Speaker 1: in one another, and you come from a little bit
Speaker 1: of a different background. Was that an added challenge for you?
Speaker 1: So for a second, I would say, Israel might be
Speaker 1: even a better ecosystem than the Silicon Valley for startups, right,
Speaker 1: And so Israel occasionally called startup Nation, and there is
Speaker 1: a good reason for that. The ecosystem is actually very
Speaker 1: supportive and very powerful, and so they are at the
Speaker 1: end of the day, they are more startups per capita
Speaker 1: in Israel than they are in out of place in
Speaker 1: the world, and it turns out to be working beautifully.
Speaker 1: Right at the end of the day, if you start
Speaker 1: in Israel, you might have equal likelihood of being successful.
Speaker 1: Then if you start in the Cilicon Valley. How come
Speaker 1: talk to us a little bit like because I feel
Speaker 1: like we've we've talked a lot over the decade and
Speaker 1: then some about how what a great incubator Israel is
Speaker 1: for so many different types of companies and technologies. So
Speaker 1: what is the difference? I think we just assume everything
Speaker 1: is Silicon Valley still in terms of the narrative, But
Speaker 1: what are the differences? What is it about the environment
Speaker 1: in Israel that attracts or makes it such a fertile
Speaker 1: ground for startups and ideas? So I would start with generalizations, right,
Speaker 1: So at the end of the day, what you want
Speaker 1: we have in an ecosystem that supports startups are actually
Speaker 1: four cornerstones, right, So entrepreneurs, investors, and then engineers and experience.
Speaker 1: These are the four cornerstones. And entrepreneurs will usually go
Speaker 1: into this journey if the fear of failure is low
Speaker 1: and the fear of failure is low in the Silicon Valley,
Speaker 1: and it's low in Israel, and it's actually high in
Speaker 1: many other places. People afraid to fail. The supportive of
Speaker 1: the investors is critical inspired It's the fuel of the ecosystem, right,
Speaker 1: and so you need to hear regulations that enables that.
Speaker 1: In many cases, you need to encourage them. But at
Speaker 1: the end of the day, if you invest in Silicon
Speaker 1: Valley or you invest in Israel from taxation points of view,
Speaker 1: it is going to be the same. So really allowing
Speaker 1: the same thing engineers a lot of engineers in Israel,
Speaker 1: and experience and one of the things that actually growing
Speaker 1: rapidly in Israel. More and more entrepreneurs are paying it
Speaker 1: forward to the community. I'm doing that through the book
Speaker 1: that I'm trying to help enterprise to become more successful.
Speaker 1: But the major difference is actually reside someplace else. Israel
Speaker 1: is in a tough neighborhood. And when you grew up
Speaker 1: in a tough neighorre, you grew up tough, right, And
Speaker 1: so military service is mandatory in Israel. And the result
Speaker 1: is during your three years of military service, you realize
Speaker 1: that giving up is not an option, and you realize
Speaker 1: how to build and work in teams, and the loyalty
Speaker 1: and commitment that you have to the mission is way greater.
Speaker 1: And these actually makes the Israel ecosystem so unique. Did
Speaker 1: you find We've only go about thirty forty seconds and
Speaker 1: then will come back and continue conversation. But your military experience,
Speaker 1: were you often in your pursuit of your companies and
Speaker 1: building of your companies drawing on your experience? Um so
Speaker 1: that was long time ago, right, you know what I'm saying,
Speaker 1: But yeah, absolutely to you. You know, at the end
Speaker 1: of the day, some friends that that I've been doing
Speaker 1: the military military service with them and they are now,
Speaker 1: you know, in different startups of mind and obviously you
Speaker 1: realize that there are a lot of things that you
Speaker 1: have learned over there and you don't pay attention that
Speaker 1: you've learned them there. We are here with Ori Levine,
Speaker 1: co founder of Ways and also a changed your life,
Speaker 1: which changed my life completely because I was living in
Speaker 1: Los Angeles at the time, driving to my like weird
Speaker 1: internships at four am and having Ways help me navigate
Speaker 1: the city. So it was very very critical for me.
Speaker 1: But Oria, I want to talk about how the tech
Speaker 1: has changed because what I think makes Ways so interesting
Speaker 1: is how much it relies on the community, of course,
Speaker 1: to help you understand where the bad traffic is and
Speaker 1: where things things are, you know, difficult that should be avoided.
Speaker 1: How have you seen that community driven technology change over
Speaker 1: the course of your career? So so, crowdsforces is a
Speaker 1: method that is not widely used, but at the end
Speaker 1: of the day, it's the best way to actually gather
Speaker 1: information and gather data. Right. So occasionally we are doing
Speaker 1: that because we're looking at the general behavior. But the
Speaker 1: case of Ways is really unique because we have created
Speaker 1: a paid forward social network of drivers. Right, so you
Speaker 1: report back to the rest of the drivers and help
Speaker 1: them to avoid graphic jams, to avoid speed drafts, to
Speaker 1: avoid accidents and so forth. And in return, you are
Speaker 1: doing the same for the drivers behind you. And so
Speaker 1: this magic that we help the rest of the drivers
Speaker 1: actually turns out to work beautifully and created the best
Speaker 1: driving tool there is. Do you think the other big
Speaker 1: tech companies, social media companies could learn a lesson from that?
Speaker 1: Like we talk a lot about the challenges of social
Speaker 1: media companies Instagram, the way that it's impacting young people, etc.
Speaker 1: Do you think that other big tech companies could learn
Speaker 1: from that community helping each other energy. So I think
Speaker 1: that you know, Ways is all goodness in some of
Speaker 1: the other social networks, it's not necessarily the case, right,
Speaker 1: And occasionally we are seeing overuse by in particular younger generations,
Speaker 1: and you look at it from the outside and say, no, no, no,
Speaker 1: there is something wrong here. Right, It's nearly impossible that
Speaker 1: they're spending so much time or this is so important
Speaker 1: for them that they might be leaving or dying by that.
Speaker 1: And I think that the essence of all businesses in
Speaker 1: the world should be very simple. Create value, and then
Speaker 1: the value that you're going to get out of that
Speaker 1: is a derivative of the value that you create. You know.
Speaker 1: The thing I love. You know, I've talked with Kathy
Speaker 1: Wood a lot of our canvest you know, this whole
Speaker 1: idea of innovation disruption, and I think it gets thrown
Speaker 1: around a lot, But this whole idea of a company
Speaker 1: like yourself, like creating Ways totally went after the establishment
Speaker 1: and change the way we do things. Uber did it
Speaker 1: with driving right and getting a car. It's like, just
Speaker 1: there are better ways, different ways, substantially changing the way
Speaker 1: we live and work. If you will, how do you
Speaker 1: look at at the future and what kind of catches
Speaker 1: your attention about things that you think, Okay, this two
Speaker 1: could really change the way we do things in a
Speaker 1: better way. So you're right. Disruption is not about technology.
Speaker 1: It's about changing behavior. Right at the end of the day,
Speaker 1: changing the market ecplibrium. Now, if you look at the
Speaker 1: pace of innovation, and if we will have a time
Speaker 1: machine and I will send you back into two thousand
Speaker 1: and seven, that means that I'm going to take away
Speaker 1: ways from you and Uber and your iPhone and Netflix
Speaker 1: and pretty much everything that you're using every day. Right,
Speaker 1: So it's unclear that we will survive, right, right, This
Speaker 1: is how fast things are changing. In fact, if you
Speaker 1: try to ask yourself, so what does it mean about
Speaker 1: the future. So for a second, I will make the
Speaker 1: following statement, Right a decade from now, if you think
Speaker 1: of the top ten companies of the world, right sop
Speaker 1: and Amazon and Microsoft and Google and Facebook and Tesla
Speaker 1: and whatever, and ask yourself which one is going to
Speaker 1: be in the top ten a decade from now. Now,
Speaker 1: the answer is that we don't know, but only five.
Speaker 1: If we would know, then I will tell you you
Speaker 1: know what sells short on those that are not, and
Speaker 1: this is it, right, and we are done, but we
Speaker 1: don't know. The more interesting perspective is going to be
Speaker 1: which one which companies are going to take their place
Speaker 1: in the top ten, some of those you haven't heard
Speaker 1: the name yet. This is how fast things are changing, right.
Speaker 1: So in particular, you look at AI today and you say,
Speaker 1: wait a minute, this is actually entering into our radar
Speaker 1: two months ago. Right before that, you never heard about
Speaker 1: chat Gypt or GPT in general, even though that the
Speaker 1: technology is being developed for a long while now. But
Speaker 1: all of a sudden, we are experiencing some sort of
Speaker 1: change of behaviors, right. And the change of behavior is
Speaker 1: not whether or not the technology is good or not good,
Speaker 1: or good enough or not good enough. It's not about
Speaker 1: that's about the fact that there are some people that
Speaker 1: are going to CHET GPT before they go to Google.
Speaker 1: And when this happens, that changed the behavior. Right now,
Speaker 1: in reality, you would say, wait a minute, it's not
Speaker 1: good enough. And actually, instead of getting multipled perspectives on
Speaker 1: the search of Google and then you can actually choose
Speaker 1: the one that makes sense for you, You're going to
Speaker 1: get one and it's going to be written in a
Speaker 1: beautiful way that it makes perfect sense, even though that
Speaker 1: it might not, but it's still the case right now.
Speaker 1: The reality is that you look around it and what
Speaker 1: happened in the market, and you say, wait a minute,
Speaker 1: Google just announce their own right, So obviously they haven't
Speaker 1: built it in the last two months, right, they have
Speaker 1: built it for a long while, and now they realize
Speaker 1: that maybe even if it's not ready, we have to
Speaker 1: go to the market with that, because otherwise we might
Speaker 1: be missing the opportunity here. And they're not the only one, right,
Speaker 1: So all of a sudden, there is a realizations that, okay,
Speaker 1: change is likely to happen in the market in the
Speaker 1: way that we are generating texts possibly searching for information definitely,
Speaker 1: because you're going to get nicer results. Right if you
Speaker 1: search Google, you're going to get whatever some other actually
Speaker 1: generated in a single web page. But if you use
Speaker 1: the language regeneration, then you're going to end with something
Speaker 1: that is written beautifully and you might like it. So
Speaker 1: all the time that we're spending since Microsoft, the news
Speaker 1: of Microsoft in their investment has come out, it's smart
Speaker 1: for us to be focusing on this because there's a
Speaker 1: lot of smart companies that are focusing on this, and
Speaker 1: so it has the power to dramatically impact our behavior
Speaker 1: or already is in my mind, definitely yes. And it's
Speaker 1: still a long journey for CHET, GPT and anyone else
Speaker 1: that is doing AI and MGPT language regeneration. There is
Speaker 1: still a long way to go. So if Google hired
Speaker 1: you right now as a consultant specifically on its rollout
Speaker 1: of its chat GPT, what would your biggest piece of
Speaker 1: advice be about how they could corner that area of
Speaker 1: the market faster, faster, even if it's not good. Look,
Speaker 1: everything that you go to the market, you go with
Speaker 1: something that is not ready, Like you go with not
Speaker 1: good enough first and then you eat rate with the
Speaker 1: feedbacks that you get from the users on for justice
Speaker 1: all the time. Right, they throw it out there and
Speaker 1: we all play with it. Ways was not good enough
Speaker 1: at the beginning, right, so, and there were multiple iterations
Speaker 1: until it became good enough. And when it's good enough,
Speaker 1: then this is where you are going to win the market.
Speaker 1: So at the end of the day, now they could
Speaker 1: have done that faster, right, but they actually look at
Speaker 1: the disruption as a threat and the real way to
Speaker 1: look at disruption is as an opportunity because if you
Speaker 1: take Uber for example, Uber is an amazing example of disruption.
Speaker 1: Before that, we only had taxi drivers. That's it. Right now,
Speaker 1: the market today is ten times bigger than it was before,
Speaker 1: ten times bigger for on demand trips. Right in this
Speaker 1: ten times bigger market, there is room for Uber and
Speaker 1: Lift and Grab in ninety nine taxi and there are
Speaker 1: three times bigger room for taxi drivers. So disruption is
Speaker 1: actually creating an opportunity because what we are saying about
Speaker 1: disruption is that it changed the market tech flibrium. Now,
Speaker 1: by definition the market tech flibrium, then new one is
Speaker 1: better than the previous one, because otherwise the market will
Speaker 1: not go there. Yeah. No, it's really fascinating, right. It
Speaker 1: didn't just displace. It actually grew a market so exactly
Speaker 1: an access and behavior. So people who didn't necessarily order
Speaker 1: cars to do things of a sudden, they could exactly
Speaker 1: so interesting or so go go, go, no go twenty seconds,
Speaker 1: thirty seconds. What's the next problem you're working on? God
Speaker 1: be quick? So you know, I'm really proud of my books.
Speaker 1: Steve Wasn't, a co founder of Apple, called that the
Speaker 1: bible for entrepreneurs. And I think that this has this
Speaker 1: is going to have a bigger impact in all of
Speaker 1: my startups because it's going to help entrepreneurs to become
Speaker 1: more successful. We were saying a lot of people didn't
Speaker 1: have a playbook, right, and now they do have a playbook,
Speaker 1: thanks to you. Because the book is called fall in
Speaker 1: Love with the Problem, not the solution, a handbook for entrepreneurs.
Speaker 1: Or it was so great to have you back in studios.
Speaker 1: Welcome anytime, so come back soon. Thank you. I really
Speaker 1: appreciate it. Or Levin, he's co founder of Ways. As
Speaker 1: we mentioned that book fall in Love with the Problem,
Speaker 1: not the solution of handbook for entrepreneurs, but it's so true, right,
Speaker 1: figure out a problem, yeah, watch the market size or
Speaker 1: look for the market and then go at it. Or
Speaker 1: of course inner Bloomberg Interactive Broker Studio. You're listening to
Speaker 1: the Bloomberg Business Week podcast. Catch us live weekdays from
Speaker 1: two to five pm Eastern on Bloomberg Radio, The Bloomberg
Speaker 1: Business a band you two. You can also listen live
Speaker 1: to our flagship New York station Just Say Alexa play
Speaker 1: Bloomberg e Love and Verdi. I did come across a
Speaker 1: research note that talked about online gambling in the betting market. Globally,
Speaker 1: the eyes and shared exceed one hundred and fourteen billion
Speaker 1: by twenty twenty eight, growing at a compound annual growth
Speaker 1: rate of nearly eleven percent. So we've got a great
Speaker 1: guest to talk about it. He's here in our Bloomberg
Speaker 1: Interactive Broker studio, Charles Gillespie excuse me, as co founder
Speaker 1: and CEO of the publicly traded SmallCap Gambling dot Com
Speaker 1: Group Limited. They operate in US, Ireland and Malta. They
Speaker 1: are across the globe. You might know some of their
Speaker 1: sites including Gambling dot com, Bookies dot com, and rhodowire
Speaker 1: dot com. Again, like I said, he's in studio with
Speaker 1: Maddie and myself. How are you. I'm very well, happy
Speaker 1: to be here today. Well, tell us a little bit
Speaker 1: about your business in the industry and what you're seeing
Speaker 1: in the last year or so. Our business is doing
Speaker 1: very well, and the entire industry over the last several
Speaker 1: years has shifted its focus away from Europe, which is
Speaker 1: kind of the historical home of regulated gambling, toward the
Speaker 1: United States, as the US has become the center of
Speaker 1: gravity in this global industry and the growth is just
Speaker 1: a phenomenal you know what's phenomenal? Give us an idea?
Speaker 1: Can you give some Paul Parks? Uh, well, you've got
Speaker 1: I think it's already up to something like ten billion
Speaker 1: in the US and if you look back three four
Speaker 1: five years, it was sub one billion. But what kind
Speaker 1: of growth are you seeing on your sites? Well? We uh,
Speaker 1: we delivered growth of one hundred percent and nearly one
Speaker 1: hundred percent in Q three and in the US, and um,
Speaker 1: the US has been been huge for us. You know,
Speaker 1: it's really you know, our story kind of mirrors the
Speaker 1: global story for the industry. Um. When we started the
Speaker 1: business coming off a lower levels exactly, you know, coming
Speaker 1: off of essentially nothing, you know, four or five years ago. Um,
Speaker 1: when we started this business back in the day, there
Speaker 1: was no regulated online gambling in the United States. So
Speaker 1: we left and we ended up building one of the
Speaker 1: most important affiliate marketing businesses in the industry, based in
Speaker 1: Europe with a with our biggest office in Ireland and
Speaker 1: our biggest markets really being the UK and in Ireland.
Speaker 1: And then slow, slow and steady things started to change
Speaker 1: in the US. You know, you actually got online casino
Speaker 1: gaming in New Jersey nearly ten years ago already, h
Speaker 1: and that was a big deal. Um, we didn't really
Speaker 1: see that, you know, spreading across the United States ten
Speaker 1: years ago, and it didn't. It took. It took a
Speaker 1: number of years before the dam broke, and the dam
Speaker 1: broke in twenty eighteen when the Supreme Court issued a
Speaker 1: ruling that invalidated this this nineteen nineties era sports betting ban,
Speaker 1: and that created the climate for what we've seen today
Speaker 1: with with regulated sports betting now rolling out, you know,
Speaker 1: across the US twenty plus states already with online sports betting,
Speaker 1: and you know, it's it's it's a states rights issue, right,
Speaker 1: so each each individual state is for you to kind
Speaker 1: of do it the way they want. And I means
Speaker 1: your growth basically just banking on that, like just the
Speaker 1: growth going across the United States. Yeah, we had a profitable,
Speaker 1: high margin, high growth business before any of this, and
Speaker 1: then you layer on this this incredible growth in the
Speaker 1: United States and it you know, it obviously gets very
Speaker 1: very exciting. New York sports betting regulated, you know over
Speaker 1: a year ago already that was the biggest launch to
Speaker 1: date in the United States. But the real prize that's
Speaker 1: going to come for the industry here is online casino games, right,
Speaker 1: which is frankly as a very different margin profile. You know,
Speaker 1: if you think about sports betting, it's actually quite a
Speaker 1: low margin product. Typically. I don't know a ton about
Speaker 1: this industry. I mean, I know generally, but so what's
Speaker 1: the what's the margin the sports betting? Well, if you
Speaker 1: if you think about think about it this way, think
Speaker 1: about player values. You know, an online sports betting uh
Speaker 1: player is worth you know, probably a thousand to two
Speaker 1: thousand plus depending on the operator. And that's how much
Speaker 1: there betting. What do you mean by that? That's that's
Speaker 1: what the lifetime value of the player would be to
Speaker 1: the online gambling operator that through the door. Um, and
Speaker 1: you know we're in the business of referring players to
Speaker 1: the operators, right, so they pay us something. Not they
Speaker 1: don't pay us the entire lifetime value of the player,
Speaker 1: of course, but it's a very healthy proportion of that.
Speaker 1: And when you compare sports betting to online casino, online
Speaker 1: casino is roughly twice the value. Okay, of course, there's
Speaker 1: not as many people that play online casino has been
Speaker 1: on sports. It's a more kind of niche products where
Speaker 1: sports betting is quite you know, mass market. Everybody can
Speaker 1: wrap their head around sports betting, but an online casino,
Speaker 1: the volume I would assume like there are people who
Speaker 1: just play it over and over again. Absolutely, and you
Speaker 1: know that's that's how the gambling industry works. It's part
Speaker 1: of it is the odds. Part, part of it is
Speaker 1: that house edge. But but you know the other part
Speaker 1: of it which people forget is it's how many times
Speaker 1: you pull that lever. If you only pull it once,
Speaker 1: even if the house edge is very high, it's not
Speaker 1: such a brilliant business. But if you pull that lever
Speaker 1: a lot, even if the house edge is very very low,
Speaker 1: like it is in slots, it's a fantastic business, and
Speaker 1: make it up on just the frequency. Yeah, where does
Speaker 1: the macroeconomic issue come into play with that? Because you know,
Speaker 1: we keep talking about whether or not we're heading to
Speaker 1: a recession this year. Is that concerning for the gambling industry? No,
Speaker 1: do people gamble more when the economy is bad. It's
Speaker 1: not that people gamble more, it's that the activity is
Speaker 1: largely resilient to the economy. Even in fairly mature online
Speaker 1: gambling markets, you know, you look at the UK, which
Speaker 1: has had regulated online gambling for fifteen years, you know,
Speaker 1: and that and even in the UK, it's still growing
Speaker 1: by eight or nine percent a year um. And in
Speaker 1: the US the growth is so spectacular that any any
Speaker 1: sort of headwind, which there isn't really even if there
Speaker 1: was a headwind, you probably wouldn't even see it, and
Speaker 1: you don't given you yeah, you wouldn't feel it. Given
Speaker 1: the over all growth. What's the biggest thing in the
Speaker 1: US that drives people that? And like for the Rihanna
Speaker 1: concert that some people call the super Bowl, was that
Speaker 1: a huge push for you guys? Is it stuff like that? Absolutely? Um.
Speaker 1: Player acquisition around sports betting is very event driven and
Speaker 1: you know there is no bigger event than the sport
Speaker 1: than the Super Bowl. So um, you know, March Madness
Speaker 1: is also coming up in a very very important time
Speaker 1: of the year for for player acquisition. Charles, how many
Speaker 1: people these player acquisitions could be you could be, Carol,
Speaker 1: exactly how many come in like on the Super Bowl?
Speaker 1: Can you give us an idea range? Well, you know,
Speaker 1: companies like ours would refer um, you know, in any
Speaker 1: given month, we're referring you know, over ten thousand new
Speaker 1: depositing customers an average. Um, yeah, I mean sometimes it's
Speaker 1: it's substantially more than that. But but you know, when
Speaker 1: you think about our business model, the the online gambling operators,
Speaker 1: they only pay us when we've delivered a customer to
Speaker 1: their door who has signed up, been verified, has deposited,
Speaker 1: and has made a bet in a regulated state. So
Speaker 1: if the value proposition we provide to them is crystal clear.
Speaker 1: And and you know, there's a lot of talk these
Speaker 1: days about so you've checked all those boxes before you
Speaker 1: pass them on. Well, that's their job that they need
Speaker 1: to do that, but they don't owe us any money
Speaker 1: until they've they've cleared all those checks. Do most of
Speaker 1: those people clear no? Like like like yeah, I'm just curious,
Speaker 1: like is it half? I mean, it's tough to speak
Speaker 1: to you know, each step in the process, but you know,
Speaker 1: a lot of one of one of the issues, a
Speaker 1: lot of people sign up but they're not in a
Speaker 1: regulated state. You know, if you're in California and you
Speaker 1: sign up for DraftKings, you can't bet, you know, and
Speaker 1: and and that you know. But if you if you
Speaker 1: hop on a plane and you come to New York
Speaker 1: for whatever reason, then you can. So. A lot of
Speaker 1: it is really education, and historically there has been challenges
Speaker 1: with payments, you know not you know, especially a couple
Speaker 1: of years ago, a lot of US banks just did
Speaker 1: not differentiate between illegal offshore online gambling and actually regulated
Speaker 1: tax paying legal onshore gambling. So you said on average
Speaker 1: about ten thousand that you're passing on. I understand it.
Speaker 1: It's usually it could be a lot more than that
Speaker 1: in any given month, but on super Bowl, so like
Speaker 1: at a super Bowl leading up to the Super Bowl,
Speaker 1: is it five times that amount? I understand over a
Speaker 1: lot it's going to even out, but yeah, uh yeah,
Speaker 1: or if it's March madness, substantially more. We were we
Speaker 1: haven't even reported Bloomberg. Did they tell you we like numbers?
Speaker 1: We love a number. We're just kidding. Will report Q
Speaker 1: four on March twenty three, and you know, we'll give
Speaker 1: a little color on on Q one at that point
Speaker 1: as well. I'm sure twenty seconds left. It sounds very rosy.
Speaker 1: You seem like growth is coming, especially as regulations ease. Um.
Speaker 1: Twenty seconds, What is the one tricky thing for you
Speaker 1: in your business? Um, if there's any headwind at all?
Speaker 1: It's uh, you know, inflation rights. Uh, you know, talent
Speaker 1: is expensive and um, you know we our business runs
Speaker 1: on people. You know, we do everything and wages are expensive. Yeah, yeah, yeah,
Speaker 1: you know and for the Fed. Yeah. But we've got
Speaker 1: people all around the world, so we can we can
Speaker 1: manage that by by hiring and lower cost jurisdictions if necessary.
Speaker 1: It's something we've heard from every head of a company.
Speaker 1: It's all about workers and um, finding them and then
Speaker 1: being able to pay them. Charles Gillespie come back soon.
Speaker 1: That was really fun, co founder CEO of Gambling dot
Speaker 1: Com group. Here in our interactive broker studio, you're listening
Speaker 1: to the Bloomberg Business Week podcast. Catch us live weekdays
Speaker 1: from two to five pm Easter on Bloomberg Radio, The
Speaker 1: Bloomberg Business Avandue too. You can also listen live to
Speaker 1: our flagship New York station Just say Alexa, play Bloomberg,
Speaker 1: e Love and Verdi. We'n get right to it, Mattie,
Speaker 1: because Season A to Bar Rescue debuts this weekend on
Speaker 1: the Paramount Network. My husband and I we definitely have
Speaker 1: binged on Bar Rescue in the past. Back with us
Speaker 1: as John Taffer, he's host an executive producer, Bar Rescue,
Speaker 1: creator his own restaurant franchise concept. It's called Taffer's Tavern.
Speaker 1: They're in Georgia, they're in Maryland and DC and they
Speaker 1: are growing. He's here back with us in our Bloomberg
Speaker 1: Interactive Broker studio. So nice to have you here. I
Speaker 1: feel like we're getting back to normal. I feel that
Speaker 1: way too, but not quite. There are things that aren't
Speaker 1: happening yet that need too. You came in and you're like,
Speaker 1: I gotta share something with you. Tell us what's going on.
Speaker 1: Why are our things not quite back to normal? John? Well,
Speaker 1: you know, in my wife, outside of television, in my practice,
Speaker 1: I help independent operations and I help large corporations, so
Speaker 1: I get a good perspective of both sides of that fence. Right,
Speaker 1: there's a tentativeness out there. Operators have been a little bit.
Speaker 1: When we used to make bold decisions, we're not quite
Speaker 1: making bold decisions right now. We've sort of stepped back
Speaker 1: in this conservative mode, if you will. Right, we're a
Speaker 1: little scared of employees. We can't lose them, we can't
Speaker 1: find them. They're sort of in control of the moment
Speaker 1: a little more than we are. At times that's concerning,
Speaker 1: our costs are concerning, and then we're all facing this
Speaker 1: issue a value proposition. Karen. What I mean by that is,
Speaker 1: if my steak goes up and cost three dollars, I
Speaker 1: got to charge you nine dollars more because my cost
Speaker 1: is one third. So here we're getting increases in chicken
Speaker 1: breast and in all these products a dollar or two,
Speaker 1: a dollar or two, but for us, it's a significant
Speaker 1: impact on the value proposition of our restaurants. So we're
Speaker 1: fighting that value proposition. We're dealing with the employees, and
Speaker 1: we're stung. So the industry isn't rising at the level
Speaker 1: I was hoping it would because of this tentativeness. So
Speaker 1: meaning what they're not opening up new establishments is what
Speaker 1: does that lead to? John? You know, it's not only
Speaker 1: opening new at Wishman's is taking bold steps into promotions,
Speaker 1: new day parts, new menu items, new creativity, new marketing programs,
Speaker 1: all the things that we would do to energize and
Speaker 1: keep our concepts fresh and entertaining. None of that seems
Speaker 1: to be happening right now. What's the biggest mistake that
Speaker 1: you see people making of all of those that you
Speaker 1: mentioned that you miss. Yeah, you know, I think that
Speaker 1: there's this view today that the customer will understand. Right,
Speaker 1: customers know that we're you know, we're short staff, They're
Speaker 1: going to understand. Customers know that our prices are going up,
Speaker 1: They're going to understand. I worry, madisone how long that
Speaker 1: understanding is going to carry for? You know, there's inflationary
Speaker 1: impact And I was talking earlier today. I just read
Speaker 1: an article this morning. Supermarket inflation is about eleven percent.
Speaker 1: Restaurant inflation is sitting at about eight percent. So in theory, comparatively,
Speaker 1: one could say, boy, the value might be greater at
Speaker 1: a restaurant today than at a supermarket in a sense, right,
Speaker 1: but it's not being realized at the rate that it should.
Speaker 1: And it's very concerning. Well, I mean, so what if
Speaker 1: that continues? John, what is the longer term impact? You know,
Speaker 1: it's interesting our Ka Crater, who is our food critic here,
Speaker 1: and she said pre pandemic like it was just an
Speaker 1: explosion in the restaurant. It was called, I forget what
Speaker 1: you's called like the golden age of restaurants, and just
Speaker 1: people were trying new ideas and throwing things out. Pandemic
Speaker 1: hits it's obviously a very different environment. And as you say,
Speaker 1: we're coming off and you're feeling this tentativeness. If it persists,
Speaker 1: then what longer term do you see happening? Potentially? I
Speaker 1: see flatter revenues long term, okay, because you know it's
Speaker 1: innovation because eventually that elevates us. Right, So when we're
Speaker 1: not having innovation, when we're not having the depth of employee,
Speaker 1: the concentration of management, all these things take their effect
Speaker 1: on This kind of concerns me a little bit. Yeah,
Speaker 1: you know that Boomtown, dude, Yes, but that Boomtown that
Speaker 1: you were talking about was a height of innovation. New concepts,
Speaker 1: new chefs, new things were abound everywhere. Not so much now,
Speaker 1: and it's just not the same experience, right, And this
Speaker 1: is such a privileged position to be in. I'm in
Speaker 1: New York. There's a great restaurant in every corner, but
Speaker 1: it doesn't feel the same. I feel like I'm paying
Speaker 1: more to be there for a longer amount of time,
Speaker 1: not necessarily get everything that I want. Right, do you
Speaker 1: see do you have a timeline for when I can
Speaker 1: get my great New York City restaurant vibes back? You know,
Speaker 1: It's funny. I was staying and I won't say the
Speaker 1: brand at a very high end luxury hotel, about as
Speaker 1: high end as you can get in New York. There's
Speaker 1: a few weeks ago, yes, and my breakfast room service
Speaker 1: came in a cardboard box, no plates. You didn't like that.
Speaker 1: It's like I was in the middle of the pandemic.
Speaker 1: So I called up the general manager and I said,
Speaker 1: when do you become a great hotel again? When does
Speaker 1: that happen? Is it next month? Is it six months
Speaker 1: from now? And we're being serious, I'm being serious, And
Speaker 1: when do we make that commitment as an industry to
Speaker 1: say no more, we have to get back to normal.
Speaker 1: I think that's a very powerful question, Madison. I wish
Speaker 1: I knew the answer to it. At some point, you're
Speaker 1: going to get disgusted and you're gonna go will you're
Speaker 1: taking care of and you feel better. That's my concern. Yeah,
Speaker 1: it does feel like I've been places too, and I'm like, wait,
Speaker 1: we're kind of out of the pandemic. Although we did
Speaker 1: talk to our team over at Hopkins earlier today reminding
Speaker 1: that we're not completely out of it, but it does
Speaker 1: feel like people are still falling back on those ways,
Speaker 1: and it's like, well, wait a minute, you know, we
Speaker 1: should kind of go back. Is it just because they're
Speaker 1: still looking to save costs or what? I think it's
Speaker 1: just some say they don't have the staff to do
Speaker 1: everything that they'd like to think about. Somebody who owns
Speaker 1: a business for years, they believe their life is stable.
Speaker 1: This pandemic comes along. Now they're not stable. The instability
Speaker 1: is very fearsome to them. Right now, we're coming out
Speaker 1: of the pandemic, but the fear isn't gone yet. And
Speaker 1: I think it takes time for that fear to sort
Speaker 1: of heal a little bit, Carol, you know, and then
Speaker 1: to get to that point of decisive decisions again. And
Speaker 1: I think the economic environment worries us. I think the
Speaker 1: international environment worries us. I mean, there's a lot of
Speaker 1: things to be concerned about if you want to strategically
Speaker 1: look forward, right John, you know what's great about you?
Speaker 1: As you say, you're talking to the mom and pops
Speaker 1: you own bars and restaurants, You're talking to the big
Speaker 1: businesses out there that all you own multiple establishments. Do
Speaker 1: those conversations often involved talking about recession right now? Yes,
Speaker 1: they do. Because it's really it's fascinating our market conversations
Speaker 1: where so many people like, nah, we're just gonna miss it,
Speaker 1: or it's going to be soft landing with no landing.
Speaker 1: You're hearing recession. I still hear the word recession quite
Speaker 1: a bit, and I hear it of course low end,
Speaker 1: mid end, what mid end okay, good end hiring that
Speaker 1: I think that there's more of an economic concern with
Speaker 1: regard to inflationary impact supply side impact, which is still
Speaker 1: a big deal. You know, a restaurant, if you get
Speaker 1: a certain hamburger style, your bun is sized for that,
Speaker 1: your plate is size for that. Now you can't get
Speaker 1: that hamburger. You get a smaller hamburger. Doesn't fit on
Speaker 1: the bun, doesn't fit on the plate. Here's a good
Speaker 1: one for you. Get a kick out of this. Those
Speaker 1: little ketchup packets, they were up at forty cents for
Speaker 1: a while. Yeah, there was the shortage. Ye, so now
Speaker 1: restaurants have to buy plastic cups. Get Ketchup squirt in
Speaker 1: a plastic cup, and now the plastic cup doesn't fit
Speaker 1: on the plate. With the French friend, these little things
Speaker 1: become big deals when you're in a production business. Yeah,
Speaker 1: and these subtleties become nightmares. I talked to the owner
Speaker 1: of a taco restaurant in Dallas, and he told me
Speaker 1: that the millennial obsession with Tapa Chico was like ruining
Speaker 1: his business because it got so expensive because of the
Speaker 1: glass shortage and he would just get wiped out of
Speaker 1: it all the time, but didn't want to raise the
Speaker 1: price too much. If you were giving that restaurant owner advice,
Speaker 1: what would you say. You know, it's funny. I did
Speaker 1: a rescue this season of a guy who's losing two
Speaker 1: dollars a hamburger. Yeah, and he's proud of the fact
Speaker 1: that he's selling one hundred hamburgers. It you'd be better
Speaker 1: if if you sold no hamburgers. That's what I would
Speaker 1: tell him. We're here to make money, well, so we
Speaker 1: have to raise the prices. It needs to be reasonable,
Speaker 1: you know. JC Penny. I love a quote that he said,
Speaker 1: if you don't take care of the customers, you'll lose
Speaker 1: the customers. If you don't take care of the business,
Speaker 1: you'll lose the business. So I have to say I
Speaker 1: wrote a note I'm always shocked here. I'm going to
Speaker 1: read on the generous pores that are done. Like as
Speaker 1: I watch your show, and you have the technology that
Speaker 1: measures it in an instant and the thousands of dollars
Speaker 1: that go out of a business, it seems like such
Speaker 1: an easy fix, right, So people are basically bartender's overpouring, right,
Speaker 1: And no, I'm stud I know. So I'm like, is
Speaker 1: it that easy to fix for most establishments? John that
Speaker 1: if they just completely Yeah? Completely. We have the systems. Now,
Speaker 1: we have devices that we stick to the bottom of
Speaker 1: a liquor bottle when you buy it and it goes
Speaker 1: into the supply room forget what it's called that when
Speaker 1: you pick it up and put it and bring it
Speaker 1: to the bar. On the map on your tablet, you
Speaker 1: see the bottle on its way to the bar. Now
Speaker 1: it's at the bar every time they pour it, I
Speaker 1: know exactly how much they're pouring from it. So all
Speaker 1: these systems are in place, it doesn't match up with
Speaker 1: the dollars that are ultimately Absolutely the consumption and the usage,
Speaker 1: the consumption and the sales don't match. Right. You consume
Speaker 1: the hundred drinks, but you only sold thirty, right, And
Speaker 1: the owners when they hear the thousands of dollars that
Speaker 1: are going at it sometimes add up to hundreds of
Speaker 1: or one hundred thousand dollars or whatever. For the year.
Speaker 1: Thirty seconds left, John, Unfortunately, season eight, what can we expect?
Speaker 1: Oh boy, it is a tough one. You know, last
Speaker 1: season pandemic was a valid excuse. Yeah, this year we
Speaker 1: were just talking about the lack of aggressiveness, of assertive.
Speaker 1: They need a kick in a butt. Yeah, I mean,
Speaker 1: customer traffic is up twenty percent of more. This is
Speaker 1: the time, seese, this right step, But they're not. So
Speaker 1: it's a very aggressive season, Carl. But I think I
Speaker 1: changed a lot of lives this year. I love hearing that.
Speaker 1: It's really fun. It's small business. I talked earlier about
Speaker 1: the backbone of our country is these small businesses. So
Speaker 1: I'd love to kind of watch and keep an eye
Speaker 1: on it. John, Thank you so much, good luck, Thank you,
Speaker 1: good to see you again. Always good to be here,
Speaker 1: always good good luck with the season. John taff Our,
Speaker 1: host and executive producer of Bar Rescue, joining us in
Speaker 1: our interactive broker studio. What a delight. Be well, travel Well.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch Just
Speaker 1: Live Week days from two to five pm Eastern on
Speaker 1: Bloomberg Radio, the Bloomberg Business Band, You Too. You can
Speaker 1: also listen live to our flagship New York station, Just
Speaker 1: Say Alexa, Play Bloomberg, e Love and Verdi. All Right,
Speaker 1: we do want to get to you. One of the
Speaker 1: big stories of the day, and it certainly was news
Speaker 1: coming off of the weekend. And I feel like it's
Speaker 1: something Maddie that we've talked about before when it comes
Speaker 1: to China and the coronavirus. Yeah, it's a really critical story.
Speaker 1: The idea that China's government rejected a US Energy Department
Speaker 1: assessment that the COVID nineteen pandemic likely originated with a
Speaker 1: lab leak. The Energy Department, which had previously been undecided
Speaker 1: on the origins of the pandemic, joined the FBI, saying
Speaker 1: the virus likely spread via a mishap, and The Wall
Speaker 1: Street Journal reported exactly that yesterday. Well, our next guest
Speaker 1: had talked about this back in April of twenty twenty.
Speaker 1: He came out saying that the most likely starting point
Speaker 1: of the coronavirus crisis was an accidental leak from one
Speaker 1: of the Chinese virology institutes in Wuhan, great to have
Speaker 1: back with us. Jamie Metzel, founder and chair of the
Speaker 1: global social movement One Shared World, and Atlantic Council Senior Fellow.
Speaker 1: He's worked at the US National Security Council, the State
Speaker 1: Department of the Senate Foreign Relations Committee so much you
Speaker 1: should check out his bio. We're so delighted to have
Speaker 1: back with us, Jamie, he joins us via zoom. Jamie,
Speaker 1: it is good to have you here with Maddie and myself.
Speaker 1: You saw this line. You've been front and center for
Speaker 1: a long time about the virus and where it came from.
Speaker 1: To see that journal headline, tell me how you're thinking
Speaker 1: about this, To see it once again in the headlines, Well, Carol,
Speaker 1: it's nice to speak with you again. You and I've
Speaker 1: been talking about this for years now. As you said
Speaker 1: when introwing me, from the earliest days of the pandemic,
Speaker 1: it was pretty clear that a lab origin was at
Speaker 1: least a very serious hypothesis that needed to be fully investigated.
Speaker 1: And now with more and more, albeit circumstantial evidence, it
Speaker 1: seems that the weight of the available evidence, which is imperfect,
Speaker 1: is leaning increasingly toward a possible lab origin of the pandemic.
Speaker 1: That doesn't mean a bioweapon, it means a lab accident
Speaker 1: and obviously then followed by what I've been calling a
Speaker 1: criminal cover up. The Department of Energy has America's leading
Speaker 1: national laboratories. Many of your listeners will have heard of
Speaker 1: the Lawrence Livermore National Lab. They have some of the
Speaker 1: top scientists in the world, and it's fantastic that they
Speaker 1: have been continuing to investigate, and they have shifted their
Speaker 1: perspective toward believing that a lab origin is more likely
Speaker 1: than not, which is, of course what I've always believed.
Speaker 1: What would you say is the single biggest piece of
Speaker 1: evidence that makes you feel like you said that it
Speaker 1: was a lab accident and a mistake and not necessarily
Speaker 1: something more intentional. So it just wouldn't make sense. It's
Speaker 1: just logic. If China was developing a bioweapon and then
Speaker 1: intentionally released it. Everybody knows that you can't control a
Speaker 1: deadly pathogen like this, It just wouldn't make sense. And
Speaker 1: we don't need to bend over backwards. We can use
Speaker 1: Akam's razor in trying to understand what happened, because we
Speaker 1: know that the SARS Kobe do virus ancestrally comes from
Speaker 1: a type of horseshoe bats that don't exist in Wuhan.
Speaker 1: Their natural habitat is more than a thousand miles away.
Speaker 1: We know that the Wuhuant Institute of Virology had the
Speaker 1: world's largest collection in the laboratory of SARS like viruses.
Speaker 1: We know that they were doing basically research and experiments
Speaker 1: attaching furan cleavage sites able to infect human cells two
Speaker 1: stars like viruses. And then in the exact city where
Speaker 1: they're doing exactly that, we have an outbreak of a
Speaker 1: virus exactly like what they were intending to create, not
Speaker 1: to release, but I'm guessing as part of a research
Speaker 1: program with the intention of developing some kind of of
Speaker 1: pan coronavirus vaccine. And so I don't know if if
Speaker 1: you or your listeners heard that the entertaining rant of
Speaker 1: John Stewart on The Colbert Show, but he says, wait
Speaker 1: a second, the virus and the lab have the same name.
Speaker 1: I mean, it was very, very funny, but it's it's
Speaker 1: an unimaginable coincidence that this could happen in the same place.
Speaker 1: And the more that we've learned, the more it's just
Speaker 1: seemed for me more likely than not that this does
Speaker 1: come from a lab origin, Jabe. Why is it important
Speaker 1: for us to know exactly where this virus came from.
Speaker 1: It's a really important question, Carol, because some people could say, well,
Speaker 1: maybe it came from a market, Maybe it came from
Speaker 1: a lab. Let's have better lab safety, and let's try
Speaker 1: to restrict the wildlife trade. If that were the case,
Speaker 1: every time a plane crash, we would say, hey, another
Speaker 1: plane crash, let's redouble our efforts in airline safety. There's
Speaker 1: a reason why we try to overturn every stone understanding
Speaker 1: why a plane crash, because we know that's a very,
Speaker 1: very real problem. We don't fix it, it's going to
Speaker 1: happen again. If, for example, we knew tomorrow that COVID
Speaker 1: stems from a lab accident in Wuhant, that would supercharge
Speaker 1: our efforts to regulate the proliferating containment virology labs around
Speaker 1: the world. China is building a level four lab in
Speaker 1: every one of its provinces, and right now, our safety
Speaker 1: and security you can hear I'm in New York with
Speaker 1: these sirens in the background. Our safety and security depend
Speaker 1: on the regulators and norms and other behaviors in every
Speaker 1: country in the world. So if you're we're here in
Speaker 1: New York. There's a regulator or a non regulator in
Speaker 1: Uzbekistan who is or isn't overseeing a virology lab, and
Speaker 1: our safety and security and lives may depend on what
Speaker 1: happens there. It's just a crazy way to do things.
Speaker 1: And that's why understanding what happened will, I think help
Speaker 1: focus our efforts to prevent these types of tragedies from
Speaker 1: happening in the future. Understood, Jamie, Why is it also
Speaker 1: important that China acknowledge that this is how it happened?
Speaker 1: And I think about this at a time when US
Speaker 1: China relations are not great to say the least, and
Speaker 1: there's such a need for transparency to be fair on
Speaker 1: both sides. Yes, So you know, people say, and many
Speaker 1: people have said this to me, let's let bygones be
Speaker 1: by guns. We're not going to get China to cooperate here.
Speaker 1: Let's play nice, let's not criticize them, and maybe hopefully
Speaker 1: they will collaborate in the future. What I say to
Speaker 1: that is, there is absolutely no way to expect transparency
Speaker 1: and accountability in the future if we can't have it now.
Speaker 1: After according to WHO estimates, fifteen million people are dead
Speaker 1: from this entirely avoidable pandemic, because that's what happened last
Speaker 1: time with the First Stars two decades ago. China did
Speaker 1: this same kind of thing, covering, up, lying, and eventually
Speaker 1: it was forced to tell the truth and forced to investigate.
Speaker 1: If we say, all right, well now we're giving China
Speaker 1: another past, but next time we really mean it, then
Speaker 1: next time we're going to see the exact same time
Speaker 1: type of behavior. And we need transparency and accountability, not
Speaker 1: just from China but from everybody. And that's why the
Speaker 1: standard is. Our lives are at risk. And whether you're
Speaker 1: a Democrat or Republican American citizen, I need citizen anybody.
Speaker 1: We all need to push for the highest standards of accountability.
Speaker 1: Jamie good to check in, come back soon. Jamie Matzel,
Speaker 1: founder and share of One Shared World and Atlantic Council
Speaker 1: Senior Fellow, and as we said, has worked with the
Speaker 1: US National Security, in the State Department, and more. You
Speaker 1: are listening in watching Bloomberg Business Week. This is Bloomberg Radio.
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