WEBVTT - Harvard Business School Broadcast 0:00:00.560 --> 0:00:03.040 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.120 --> 0:00:05.600 Jason Kelly. We're here every day bringing you the latest 0:00:05.640 --> 0:00:09.880 news from the world's of business and finance, plus technology, politics, economics, 0:00:09.960 --> 0:00:13.560 all harnessing the power of Bloomberg Business Week reporters and editors, 0:00:13.600 --> 0:00:16.760 not to mention our journalists and analysts and more than 0:00:16.800 --> 0:00:19.440 a hundred and twenty countries. You can download Bloomberg Business 0:00:19.440 --> 0:00:22.280 Week on iTunes, SoundCloud, or Bloomberg dot Com. You can 0:00:22.320 --> 0:00:24.560 also listen to our radio show weekdays at two pm 0:00:24.640 --> 0:00:27.920 Eastern only on Bloomberg Radio. We are live at Harvard 0:00:27.960 --> 0:00:31.880 Business School in Boston. This is pretty exciting. It's very exciting, 0:00:31.960 --> 0:00:34.400 right when you think about top ranked business schools. I mean, 0:00:34.479 --> 0:00:36.479 this is it. And so we're gonna be hearing more 0:00:36.520 --> 0:00:39.080 about the community, about the teaching, some of the classes 0:00:39.080 --> 0:00:40.839 that they're doing, and we're going to talk to some 0:00:40.880 --> 0:00:43.239 of the prominent alumb But before we do that, we've 0:00:43.280 --> 0:00:45.159 got to bring in the editor of Bloomberg Business Week, 0:00:45.200 --> 0:00:47.919 Joel Weber. Because Joel, I mean Business Week magazine. They 0:00:47.920 --> 0:00:50.920 are known for their business school ranking. Yeah, that's been 0:00:51.440 --> 0:00:54.400 like one of the core competencies of the magazine for 0:00:54.440 --> 0:00:57.520 almost for more than thirty years now, right, and we've 0:00:57.560 --> 0:01:00.000 only tried to make it that ranking be more dynamic 0:01:00.000 --> 0:01:04.240 Ammack every year and it's gotten incredibly good now. And 0:01:04.440 --> 0:01:08.520 you have the ability to personalize it based on your interests, right, 0:01:08.560 --> 0:01:11.520 what's important to you, which just speaks to like what 0:01:11.640 --> 0:01:13.720 you know exactly what you would expect to get from 0:01:13.760 --> 0:01:17.320 something that's this dynamic. So you can bring something like 0:01:17.440 --> 0:01:20.360 that to bear in a place like Harvard, And it's 0:01:20.400 --> 0:01:22.440 just amazing to be here, you know, I'm like up 0:01:22.440 --> 0:01:24.920 in this Baker Library and there's a table over there 0:01:24.920 --> 0:01:26.920 that's been there for a hundred and fifty years. It's 0:01:26.920 --> 0:01:31.039 just incredible to have this kind of pedigree here. And 0:01:31.080 --> 0:01:33.280 when we think about what what what we try and 0:01:33.319 --> 0:01:35.000 do a business week, a lot of it is to 0:01:35.120 --> 0:01:39.000 take the story of modern business and then tell it 0:01:39.040 --> 0:01:41.120 with a lens that I kind of think of as 0:01:41.160 --> 0:01:44.120 like a pop business kind of way of interacting with it. 0:01:44.400 --> 0:01:46.639 And when you interact with people at the business schools 0:01:46.640 --> 0:01:49.800 where some of our curriculum enters that classroom, it's sort 0:01:49.800 --> 0:01:52.280 of an incredible experience for them because they can tell 0:01:52.320 --> 0:01:54.360 it's almost like law and order. We're like ripping it 0:01:54.680 --> 0:01:57.440 straight out of the headlines and bringing it into classrooms 0:01:57.440 --> 0:02:01.080 and helping people understand what modern business really great point well, 0:02:01.080 --> 0:02:02.920 and I also love the fact that this is a 0:02:03.000 --> 0:02:05.280 year long franchise. I mean, I feel like back in 0:02:05.320 --> 0:02:07.640 the day it was all about the rankings, but some 0:02:07.720 --> 0:02:10.400 of the continent and have this week really you know, 0:02:10.480 --> 0:02:12.840 you survey the students as you as you were talking about, 0:02:13.040 --> 0:02:15.960 it's very dynamic. It never ends, and this is an 0:02:15.960 --> 0:02:18.799 interest for people ongoing. It's not like it just is 0:02:18.840 --> 0:02:22.000 like once a year. So what we've come come to 0:02:22.120 --> 0:02:24.480 is this cadence that we can't stop talking about this 0:02:24.560 --> 0:02:27.760 stuff enough. And this week's data from the survey that 0:02:27.800 --> 0:02:31.440 we leaned into revealed actually some really interesting stuff about 0:02:31.480 --> 0:02:34.880 student debt, which is usually something we associate more with 0:02:35.080 --> 0:02:39.280 undergrad than graduate schools, and yet we're looking at data 0:02:39.440 --> 0:02:42.560 reveals that the survey respondents have, you know, six figures 0:02:42.560 --> 0:02:46.240 of debt coming out straight out of business school and 0:02:46.280 --> 0:02:48.480 then it hovers there. It's funny that you say that, 0:02:48.520 --> 0:02:49.960 because I think that's actually one of the things we're 0:02:49.960 --> 0:02:52.400 going to dig into with UM. One of the individuals 0:02:52.440 --> 0:02:54.920 who's involved with the NBA NBA program here at Harvard 0:02:54.919 --> 0:02:57.400 about the future of the NBA. You know what is needed? 0:02:57.480 --> 0:02:59.600 What is it that you know, the business community to 0:02:59.680 --> 0:03:01.480 ultimate they want and to bring it back. You know, 0:03:01.520 --> 0:03:03.280 this is the thing that you always hear about. Here 0:03:03.400 --> 0:03:06.200 is going to be r O I right and return investment. 0:03:07.040 --> 0:03:09.440 But what's the initial value and really what is the 0:03:09.600 --> 0:03:13.079 career trajectory that that degree might help you accomplish that 0:03:13.080 --> 0:03:15.840 you wouldn't accomplish without it, Right, That's ultimately why you 0:03:15.880 --> 0:03:19.440 do it. And also because as a place like Harvard reveals, 0:03:19.600 --> 0:03:23.840 there's a network, yes, right, and that network is really 0:03:23.880 --> 0:03:26.359 what it ends up being. All well, it's funny, I mean, 0:03:26.480 --> 0:03:28.280 just to make it a little bit personal for me. 0:03:28.440 --> 0:03:31.200 I mean, I'm back here. I lived here in nineteen 0:03:31.320 --> 0:03:33.320 eighty and eighty one when my dad was a student 0:03:33.360 --> 0:03:35.920 here and I was about five six years old. I 0:03:35.960 --> 0:03:38.640 went to David L. Barrett Elementary School around the corner, 0:03:38.640 --> 0:03:43.000 and I still have public school, and I still do 0:03:43.120 --> 0:03:45.520 think about, you know, the people kiddily that my dad 0:03:45.600 --> 0:03:47.680 keeps in touch with from those days. And I was 0:03:47.720 --> 0:03:50.520 talking about that with some of the faculty. For sure, 0:03:50.640 --> 0:03:55.520 we gotta ask you about this week's issue because it's 0:03:55.560 --> 0:03:59.760 super dynamic. The cover is devoted to Pride. Pride so 0:04:00.040 --> 0:04:03.480 this month bride month, uh, fifty years after Stonewall, So 0:04:03.720 --> 0:04:06.120 we wanted you know that that anniversary is just coming 0:04:06.160 --> 0:04:08.120 up in a matter of days. So this was a 0:04:08.160 --> 0:04:10.440 way to mark that moment, uh and talk about not 0:04:10.480 --> 0:04:13.200 only the progress that's been made, but also some of 0:04:13.600 --> 0:04:15.880 some of the fragility that remains with sort of the 0:04:15.920 --> 0:04:19.000 gay rights. And there's a number of court cases that 0:04:19.040 --> 0:04:21.320 we talked about that will be heard in front of 0:04:21.320 --> 0:04:24.360 the Supreme Court. And you know, every everyone might take 0:04:24.360 --> 0:04:27.279 this for granted that everything's you know, safety these days, 0:04:27.320 --> 0:04:29.320 and it's not. That's what really surprised me to all 0:04:29.360 --> 0:04:31.800 that I thought that there had been so much progress 0:04:31.920 --> 0:04:34.679 on the legal front. You think about the Supreme Court decision, 0:04:34.760 --> 0:04:37.640 and yet there is still a lot of legal framework 0:04:37.640 --> 0:04:40.000 out there that that really restricts the l g B 0:04:40.120 --> 0:04:41.960 t Q community. And then and we're talking about it 0:04:42.000 --> 0:04:44.960 on a federal level, right, there's nothing that really protects it. 0:04:45.080 --> 0:04:47.920 And it's a state by state level at this point, 0:04:48.160 --> 0:04:52.000 and some states obviously have made much more progress than others. 0:04:52.080 --> 0:04:54.000 And that's what you know, you can't take any of 0:04:54.040 --> 0:04:56.039 this for granted. So fifty years later, a lot has 0:04:56.080 --> 0:04:58.600 been done. A lot of the package of stories, and 0:04:58.880 --> 0:05:00.760 especially the cover that we talk about is how far 0:05:00.839 --> 0:05:04.440 businesses come and championing their their workers to make sure 0:05:04.480 --> 0:05:06.920 their workers have rights. But the US is in any 0:05:06.920 --> 0:05:09.080 ways even an anomaly compared to the rest of the world. 0:05:09.400 --> 0:05:11.800 So there's this international aspect that we brought to bear 0:05:11.839 --> 0:05:13.159 on it. And then I thought one of the things 0:05:13.160 --> 0:05:15.640 that was really interesting was this idea of rainbow vacation 0:05:16.200 --> 0:05:18.640 of rainbows on everything all of a sudden right, and 0:05:18.680 --> 0:05:21.000 there's a lot of businesses that deserve that, and also 0:05:21.080 --> 0:05:24.000 ones that are carrying something that there that they made. 0:05:24.160 --> 0:05:26.040 And let's talk about what I think is my favorite 0:05:26.040 --> 0:05:28.000 story in the issue, and we're talking about it over 0:05:28.080 --> 0:05:31.000 dinner at my house last night, which is the Ellen Walmart. 0:05:31.160 --> 0:05:33.719 I think this one is just the perfect concapsulation of it. 0:05:34.080 --> 0:05:36.440 Ben Steverman and Matt Boyle wrote it, and it really 0:05:36.440 --> 0:05:39.600 looks at Ellen who has become almost the Oprah of 0:05:39.640 --> 0:05:43.159 the day, and this it's really phenomenal, how big of 0:05:43.160 --> 0:05:47.120 a business empire she's built, she owns daytime television. It's 0:05:47.160 --> 0:05:49.560 just amazing. And this is a woman when she came 0:05:49.600 --> 0:05:53.640 out as a lasbian basically was dropped. Business didn't want 0:05:53.640 --> 0:05:56.400 to associate with herout all there were bomb threats on 0:05:56.400 --> 0:06:00.400 the studios, and here we are not so not along 0:06:00.600 --> 0:06:03.400 after all that, and in America's biggest retailer is now 0:06:03.520 --> 0:06:05.800 partnered with her to bring out an Ellen line, and 0:06:05.839 --> 0:06:09.640 a retailer that has had a complicated history with this issue. 0:06:10.160 --> 0:06:12.839 For every step forward they've taken, it's at least half 0:06:12.839 --> 0:06:14.880 a step back over time. I think that's really what 0:06:14.960 --> 0:06:19.560 makes the story that compelling is that Walmart Arkansas had 0:06:19.640 --> 0:06:24.560 this real, real legacy that especially in the gay rights community, 0:06:24.680 --> 0:06:27.679 it was not a champion of right. But over time 0:06:28.800 --> 0:06:32.480 it's changed and Walmart has had to wrestle with that. 0:06:32.880 --> 0:06:35.320 And if you're if you're Walmart and you're up against 0:06:35.360 --> 0:06:39.000 the Amazon Amazons of the world, you need every advantage 0:06:39.000 --> 0:06:41.040 you can get. And when you look at Ellen and 0:06:41.040 --> 0:06:43.520 what I mean she is so family friendly, right, That's 0:06:43.560 --> 0:06:45.039 one of the quotes that we got in that story. 0:06:45.920 --> 0:06:48.960 You just associate at every age level this is a 0:06:49.040 --> 0:06:52.440 person who actually just brings goodwill into business and moves 0:06:52.480 --> 0:06:55.520 products product. That's why all together here we are at 0:06:55.520 --> 0:06:57.760 Harvard Business School and I think about so well known 0:06:57.839 --> 0:07:00.600 for their case studies like Walmart alone own and how 0:07:00.640 --> 0:07:03.200 far they've come on this issue in particular, that's a 0:07:03.240 --> 0:07:05.000 case study in its own, a case study that you're 0:07:05.000 --> 0:07:10.720 reading Bloomberg Business Week. Yeah, exactly there, all right, Joel Webber, 0:07:10.800 --> 0:07:12.520 thank you so much, of course. Joell Webber, editor of 0:07:12.600 --> 0:07:15.920 Bloomberg Business Week magazine, which is hitting newsstands as we speak, 0:07:15.960 --> 0:07:18.240 and find the stories to on the Bloomberg and at 0:07:18.240 --> 0:07:22.200 Bloomberg dot com. This is Bloomberg Business Week with Carol 0:07:22.280 --> 0:07:25.840 Messer and Jason Kelly on Bloomberg Radio. We have a 0:07:25.880 --> 0:07:29.360 special guest, Scott Spirling. He's co president of th h L. 0:07:29.520 --> 0:07:31.400 Nice to have you here with us. Thank you and 0:07:31.440 --> 0:07:35.000 your class of nine one? I am class of Was 0:07:35.080 --> 0:07:37.720 that just a couple of years ago? Yes, you know, 0:07:37.760 --> 0:07:39.720 it's so funny. The inflation rate was more than ten 0:07:39.760 --> 0:07:43.040 percent back there than the Lorian cars were just making 0:07:43.080 --> 0:07:46.520 their debut. What do you remember of that era? I 0:07:46.560 --> 0:07:49.480 do remember a couple of years later after I graduated 0:07:49.600 --> 0:07:51.280 and I met my wife here and she was a 0:07:51.360 --> 0:07:54.360 year behind me at school, and we borrowed two thousand 0:07:54.440 --> 0:07:57.560 dollars to buy our first condo, and the interest rate 0:07:57.560 --> 0:08:01.360 was seventeen on the mortgage different iceper square foot was 0:08:01.400 --> 0:08:03.840 about a tenth what it is today, So it was 0:08:03.880 --> 0:08:06.000 a very different time than this today. What was your 0:08:06.000 --> 0:08:08.360 biggest takeaway from from going to school here. You came 0:08:08.400 --> 0:08:11.880 here after graduating undergrad from Purdue, right, So I came 0:08:11.960 --> 0:08:15.040 directly from undergrad from the Midwest. So I had no 0:08:15.120 --> 0:08:17.200 idea what an investment bank did. I had no idea 0:08:17.240 --> 0:08:19.800 what a consulting firm did. I took a summer job 0:08:19.840 --> 0:08:22.040 at McKenzie not because I knew what they did, but 0:08:22.120 --> 0:08:24.520 because it was the highest paying job I could find, 0:08:24.520 --> 0:08:27.000 and I had a lot of student loans. So it 0:08:27.080 --> 0:08:29.480 was a real education for me to come to this place. 0:08:30.120 --> 0:08:34.280 Uh them, the nature of the education here is really 0:08:34.320 --> 0:08:37.560 spectacular and it has been consistent for such a long 0:08:37.600 --> 0:08:41.600 period of time. And the teaching methodology, the case method, 0:08:41.840 --> 0:08:45.800 is one that I think really leave students with the 0:08:45.840 --> 0:08:48.400 ability to start to think about things on their own, 0:08:48.559 --> 0:08:52.280 be willing to engage in that verbal combat if you will. 0:08:52.360 --> 0:08:54.200 I think they've toned it down a little bit, but 0:08:54.520 --> 0:08:59.080 the verbal combat that prepared you for whatever came next. 0:08:59.440 --> 0:09:02.160 When I took first job after graduation at the Boston 0:09:02.200 --> 0:09:05.199 consulting group. Once they here in Boston. One of the 0:09:05.240 --> 0:09:08.000 first things I remarked upon is when where's the case 0:09:08.000 --> 0:09:09.520 where's all the data? And they said, well, that's what 0:09:09.559 --> 0:09:11.320 you have to do. You have to go put that together. 0:09:11.720 --> 0:09:15.920 But the methodology work still use it today. It's interesting. Well, 0:09:16.040 --> 0:09:17.880 and I'm curious about the case studies that are being 0:09:17.880 --> 0:09:20.560 written about some of the company's going public today and 0:09:20.640 --> 0:09:23.080 that they can stay private for so much longer. What 0:09:23.120 --> 0:09:25.319 do you make of that environment? Well, I think there's 0:09:25.320 --> 0:09:29.400 been a real willingness on the part of private investors, 0:09:29.440 --> 0:09:32.600 that particularly venture capital in late stage venture capital firms 0:09:33.120 --> 0:09:37.199 to invest enormous sums of money in these younger companies. 0:09:37.440 --> 0:09:40.080 If you go back years ago, the whole game was 0:09:40.280 --> 0:09:44.240 startup venture capital, and the amount of total capital available 0:09:44.280 --> 0:09:49.320 for a company was constrained in ways that are very 0:09:49.400 --> 0:09:51.920 different in the world of today. So when you have 0:09:52.280 --> 0:09:54.439 a soft bank out there with the Vision Fund willing 0:09:54.480 --> 0:09:57.840 to invest billions of dollars that would have been enormous 0:09:57.920 --> 0:10:01.680 relative to the public market in public offering providing capital. 0:10:02.080 --> 0:10:05.160 So it's been able to fund business models that are 0:10:05.240 --> 0:10:08.760 highly capital consumptive. Now, the valuations that are being put 0:10:08.840 --> 0:10:12.440 on these companies with the business models not yet fully proven. 0:10:12.840 --> 0:10:15.240 You know, I can't really opene on that. I'll let 0:10:15.520 --> 0:10:18.959 my colleagues on the public markets do that, but they 0:10:19.000 --> 0:10:23.800 do have the ability to stay uh private longer. I 0:10:23.840 --> 0:10:27.920 would also note that, well, it's probably a good thing 0:10:27.920 --> 0:10:31.880 for many of the models that are utilizing huge amounts 0:10:31.880 --> 0:10:35.640 of capital um because for a very long time, in 0:10:35.720 --> 0:10:37.520 order to go public, you had to show that you 0:10:37.559 --> 0:10:41.840 were at least uh a little bit free cash flow positive. 0:10:42.080 --> 0:10:44.400 Now you clearly don't have to do that. And so 0:10:44.440 --> 0:10:47.400 how does it change your mode of buying and selling 0:10:47.880 --> 0:10:50.319 at this For us, we're trying to we're buying companies. 0:10:50.360 --> 0:10:53.120 We've always been investors in growth oriented companies. So if 0:10:53.160 --> 0:10:55.840 you go back in our fourty year history, over the 0:10:55.840 --> 0:10:59.040 time I've been with the firm, we've looked for the 0:10:59.480 --> 0:11:03.200 um sectors that have better than GDP growth. We try 0:11:03.200 --> 0:11:07.320 to find sectors that have very good long term secular 0:11:07.520 --> 0:11:10.840 growth drivers to them and try to invest in these 0:11:10.880 --> 0:11:14.080 companies in order to build them into a much better enterprise. 0:11:14.480 --> 0:11:16.840 So we're buying companies that are already proven to be 0:11:17.120 --> 0:11:21.000 free cash flow generative. We're trying to buy them and 0:11:21.040 --> 0:11:24.440 then work with the management teams, bringing our own operating 0:11:24.480 --> 0:11:28.280 expertise to bear so that we can improve all of 0:11:28.320 --> 0:11:31.920 the key business processes of these companies in ways that 0:11:32.000 --> 0:11:34.600 allow them to take market share in order to grow 0:11:34.640 --> 0:11:38.080 their revenues more rapidly and hopefully to be more efficient 0:11:38.120 --> 0:11:42.400 in generating various metrics of profitability, whether it's IBADA, free 0:11:42.400 --> 0:11:44.880 cash flow or net income. And so in this market, 0:11:44.920 --> 0:11:46.800 giving every given everything that's going on in the world, 0:11:46.800 --> 0:11:49.600 do you a buyer a seller? Net? So we're both 0:11:50.679 --> 0:11:52.800 net is hard to say. It depends on the quarter 0:11:52.880 --> 0:11:56.640 that we're looking at. We've been enormous sellers UH. It's 0:11:56.640 --> 0:11:59.120 been a good time to be selling, but we really 0:11:59.200 --> 0:12:02.959 target just a few sectors for buying, and again it's 0:12:02.960 --> 0:12:06.520 sectors that we think have very strong secular growth drivers 0:12:06.559 --> 0:12:09.439 to them right now. And so UM we just announced 0:12:09.760 --> 0:12:13.640 the acquisition of company in the automation space. UM. We 0:12:13.720 --> 0:12:16.760 have acquired a series of companies in that UH space. 0:12:16.840 --> 0:12:20.280 We think that's a twenty year secular growth trend. It's 0:12:20.280 --> 0:12:22.959 been a very lucrative area for us in terms of returns. 0:12:23.480 --> 0:12:26.040 UH Fintech has been an area that we've been very 0:12:26.040 --> 0:12:28.480 big in for a very long period of time. Well, 0:12:28.480 --> 0:12:30.040 what did you Having said that, what do you think 0:12:30.040 --> 0:12:33.640 about Facebook this week? In terms of talking about the cryptocurrency. 0:12:33.760 --> 0:12:36.360 I've never been that big a believer, to be frank, 0:12:36.520 --> 0:12:41.200 in cryptocurrency, which has largely been seen as an investment 0:12:41.280 --> 0:12:46.079 vehicle as opposed to truly a mode of currency exchange. Uh, 0:12:46.120 --> 0:12:48.680 And I think that's the differentiation they're trying to make, 0:12:48.800 --> 0:12:51.720 and we'll see if that works for them. I've you know, 0:12:51.720 --> 0:12:53.760 I'm old fashioned, going back to the night day one 0:12:53.760 --> 0:12:56.040 that I've always believed sovereigns should be the ones who 0:12:56.040 --> 0:13:00.320 issue currency. And but what do I know, what's it 0:13:00.360 --> 0:13:02.680 like raising money out there? Now? What are you hearing 0:13:02.760 --> 0:13:06.040 from investors in general? What's the mood of the institutions 0:13:06.120 --> 0:13:08.480 as it relates to private equity. I think private equity 0:13:08.480 --> 0:13:10.760 has been a really strong performer. You know, we've all 0:13:10.760 --> 0:13:14.559 seen the data. It's outperformed every asset class over uh 0:13:14.880 --> 0:13:20.040 intermediate to long term. It outperforms in periods of extreme 0:13:20.800 --> 0:13:25.200 economic difficulty. So that has increased the popularity of private 0:13:25.240 --> 0:13:28.560 equity over the course of the last decade, in particularly 0:13:28.559 --> 0:13:31.840 over the last four or five years. So um uh, 0:13:31.880 --> 0:13:33.319 you know, it's not been a bad time when we 0:13:33.400 --> 0:13:36.400 put it that way, to be a investor in private equity, 0:13:36.440 --> 0:13:38.360 got just got about thirty seconds here that all the 0:13:38.400 --> 0:13:41.880 macro issues does it shape how you're buying or selling? 0:13:42.559 --> 0:13:45.520 So for six years I've been thinking more within two 0:13:45.559 --> 0:13:48.400 years of a recession, I make all our people, Yeah, 0:13:48.400 --> 0:13:51.679 I make all of our deal teams incorporated a recession 0:13:51.720 --> 0:13:54.880 into their base case. They've been laughing at me because 0:13:54.880 --> 0:13:58.000 I've clearly been wrong. Uh. It seems that we keep 0:13:58.120 --> 0:14:03.640 we see more in more difficult macro issues, and the 0:14:03.679 --> 0:14:08.199 market just tends to get over it really quickly. So again, 0:14:08.280 --> 0:14:11.520 I'm not smart enough to know, you know, whether that's 0:14:11.520 --> 0:14:19.080 a good or a bad thing. But tech did you well? Well. 0:14:19.080 --> 0:14:21.280 Here at Harvard Business School, we're gonna be talking a 0:14:21.320 --> 0:14:25.720 lot about the case method and the educational backbone of 0:14:25.800 --> 0:14:29.400 Harvard Business School. But someone who's really thinking around the 0:14:29.440 --> 0:14:32.720 corner about education is sal Con. He is the founder 0:14:32.720 --> 0:14:36.160 of con Academy. He is an alum of this fine institution, 0:14:36.680 --> 0:14:41.960 and his success in really teaching has led to an 0:14:42.120 --> 0:14:45.440 enormous uptake in the con Academy. He joins us on 0:14:45.440 --> 0:14:48.840 the phone from Mountain View. Sound great to have you 0:14:48.920 --> 0:14:53.440 with us. Thanks for having me. Alright, So so tell 0:14:53.480 --> 0:14:57.280 me a little bit about your experience here at HBS 0:14:57.400 --> 0:15:00.080 and sort of how it's set you on on your 0:15:01.920 --> 0:15:05.440 you know, my my whole decision to go to HBS was, uh, 0:15:05.560 --> 0:15:07.600 you know, I was working in tech. My original background 0:15:07.720 --> 0:15:09.360 was in math and computer science, so I was working 0:15:09.360 --> 0:15:12.200 out in Silicon Valley and then the first dot com 0:15:12.280 --> 0:15:14.520 bubble burst and I thought, hey, it might be a 0:15:14.520 --> 0:15:16.640 good idea to have to spend a couple of years 0:15:16.640 --> 0:15:18.560 and think about my my life and what I want 0:15:18.560 --> 0:15:20.440 to do with my career. And I also wanted to 0:15:20.560 --> 0:15:23.280 broaden what what people kind of thought of me, uh, 0:15:23.320 --> 0:15:25.600 you know, they think could be more than just a techie. 0:15:25.880 --> 0:15:28.920 And so I went to HBS, and I have to 0:15:28.920 --> 0:15:30.880 say it was it was exactly what I hoped it 0:15:30.920 --> 0:15:33.600 would be. It was a very broadening experience and it 0:15:33.640 --> 0:15:36.200 and it really gave me not only the background, but 0:15:36.240 --> 0:15:38.720 I would say the confidence to to to to think 0:15:38.760 --> 0:15:42.920 about how to make make change in systems. Well, you 0:15:42.960 --> 0:15:45.640 definitely have made change. And you know, before we got going, Jason, 0:15:45.680 --> 0:15:47.800 I were talking about I know my daughter has loved 0:15:48.280 --> 0:15:51.600 going to kN Academy looking at videos, especially for math. 0:15:51.760 --> 0:15:55.560 Many times you've had some eighteen million learners use kN 0:15:55.600 --> 0:15:59.920 Academy every month. You're also doing um some new things 0:16:00.360 --> 0:16:02.440 with n W e A talked to us little bit 0:16:02.440 --> 0:16:06.160 about what you guys are up to. Yeah, as you mentioned, 0:16:06.600 --> 0:16:09.240 your daughter is is one of many millions that come 0:16:10.120 --> 0:16:12.160 on a monthly basis. A lot of them just want 0:16:12.600 --> 0:16:16.120 help with one concept or another. But we're seeing more 0:16:16.160 --> 0:16:19.680 frequently teachers using us as a core part of their curriculum. 0:16:19.760 --> 0:16:22.160 And we're seeing if students even put in forty five 0:16:22.200 --> 0:16:26.720 minutes a week, that they're growing faster than than they 0:16:26.760 --> 0:16:30.000 otherwise would have, which is pretty significant. And so we've 0:16:30.040 --> 0:16:33.600 been forging partnerships with various folks. We famously did the 0:16:33.640 --> 0:16:36.080 partnership with College Board a few years ago where a 0:16:36.200 --> 0:16:38.440 con Academy is now the official practice for the S 0:16:38.480 --> 0:16:41.080 A T and the p s A T Exam, which 0:16:41.320 --> 0:16:43.840 most American students take. When we took it, it was 0:16:43.880 --> 0:16:46.040 just this random test. Now it acts as a diagnostic 0:16:46.080 --> 0:16:48.840 for personalized practice on con Academy and math and in 0:16:48.960 --> 0:16:51.160 English and language arts, and then we can we can 0:16:51.200 --> 0:16:54.080 figure out how it helps those students as they go 0:16:54.120 --> 0:16:55.840 from the p s A D through kN Academy to 0:16:55.880 --> 0:16:58.240 the S A T. And so the partnership that you 0:16:58.320 --> 0:17:00.840 just alluded to this is we're trying to do a 0:17:00.920 --> 0:17:03.680 similar notion, but do it at lower grade levels. So 0:17:03.720 --> 0:17:05.879 the N double E A map exam it's not as 0:17:05.960 --> 0:17:07.840 much of a household name as the S A T, 0:17:08.359 --> 0:17:11.720 but it's taken by of all grades three through eight 0:17:11.720 --> 0:17:16.520 students in the country. And uh, until today or recently, 0:17:16.600 --> 0:17:18.720 it was it was just it was a standardized test 0:17:18.760 --> 0:17:21.320 that students would take to benchmark where they are. But 0:17:21.400 --> 0:17:23.879 now it'll act as a diagnostic for con academy and 0:17:23.880 --> 0:17:25.680 then those classrooms are going to be able to put 0:17:25.760 --> 0:17:28.560 hopefully at least at forty five minutes or hour a week, 0:17:28.920 --> 0:17:31.600 and then the districts, the principles of teachers are going 0:17:31.640 --> 0:17:34.159 to get information on where their students are and what 0:17:34.240 --> 0:17:36.199 kind of interventions they can they can make above and 0:17:36.240 --> 0:17:39.040 beyond the software. So we're excited because we think it'll 0:17:39.480 --> 0:17:40.920 you know, our goal is a not for profit, is 0:17:40.960 --> 0:17:43.320 just to move the dial for as many students as possible, 0:17:43.359 --> 0:17:44.959 and we think this is going to be an important 0:17:45.000 --> 0:17:48.040 factor for that. Well. And sal it does feel like 0:17:48.520 --> 0:17:51.119 it's fair to say this has been revolutionary for for 0:17:51.160 --> 0:17:54.520 a lot of families mine included as well in many friends. 0:17:55.000 --> 0:17:58.640 Are we at some sort of catalytic tipping point in 0:17:58.760 --> 0:18:02.399 terms of online learning? What have you sort of learned, 0:18:02.440 --> 0:18:05.239 as it were, from your experience about where we may 0:18:05.280 --> 0:18:10.359 be going in the short term? You know, I do 0:18:10.440 --> 0:18:11.960 think we are at a tipping point. And it's hard 0:18:12.000 --> 0:18:15.440 to say how fast things will tip. You know, they 0:18:15.480 --> 0:18:18.000 tend to to start to tip a little slower than expected, 0:18:18.040 --> 0:18:20.359 but once the tipping happens, it tends to happen quite fast. 0:18:21.040 --> 0:18:23.680 I think you're going to see. So there's the work 0:18:23.760 --> 0:18:25.680 that's happening in classrooms, and I have to sit you know, 0:18:25.720 --> 0:18:29.040 over the last ten years, we have seen you know, 0:18:29.080 --> 0:18:31.200 I used to preach this whole idea of mastery learning 0:18:31.240 --> 0:18:33.879 that the reason why most students are struggling, it has 0:18:33.920 --> 0:18:35.480 nothing to do with their needibility, has nothing to do 0:18:35.520 --> 0:18:38.399 with the concept. It's because a traditional academic model, you 0:18:38.440 --> 0:18:41.320 push students together together at a fixed pace. You get 0:18:41.320 --> 0:18:43.160 a seventy percent on an exam you didn't know thirty 0:18:43.160 --> 0:18:45.679 percent material too bad. You move on to the next concept, 0:18:45.720 --> 0:18:49.119 which builds on that gap, and that keeps happening. And 0:18:49.160 --> 0:18:51.800 that's why we have a situation where seventy percent of 0:18:51.800 --> 0:18:54.399 the kids in America have to take remedial math when 0:18:54.440 --> 0:18:56.560 they show up at at a community college, which is 0:18:56.680 --> 0:18:59.800 a euphemism for for sixth or seventh grade math. And 0:19:00.000 --> 0:19:03.119 so you know as oh, go ahead, no, no, no, 0:19:03.200 --> 0:19:06.960 please finish. Oh. So you know, one of the values 0:19:07.000 --> 0:19:10.040 we think of a con academy is definitely access. Anyone 0:19:10.080 --> 0:19:12.080 in the world could now access things that might have 0:19:12.119 --> 0:19:15.600 been behind closed doors before. And not only can they 0:19:15.600 --> 0:19:16.960 access it, but they should be able to access in 0:19:17.000 --> 0:19:18.680 the ways so they can learn their own time and face. 0:19:18.720 --> 0:19:21.200 So you only know seventy of a concept, don't move 0:19:21.240 --> 0:19:23.200 on to the next one. Take the time necessary to 0:19:23.200 --> 0:19:26.720 get of that concept. So we think we can move 0:19:26.720 --> 0:19:28.640 the dial there. And I think the other tipping point 0:19:28.680 --> 0:19:31.880 is what's going to happen in credentials. Obviously everyone's talking 0:19:31.920 --> 0:19:33.840 about a trillion and a half in the student loans 0:19:33.880 --> 0:19:38.199 that aren't cancelable by bankruptcy. People are questioning the value 0:19:38.320 --> 0:19:41.199 of a college degree, and I think there's going to 0:19:41.240 --> 0:19:44.800 be um we are we are talking to employers about, hey, 0:19:44.840 --> 0:19:47.400 what kind of signals do you need that we can 0:19:47.480 --> 0:19:50.439 provide that that can be as good or better than 0:19:50.440 --> 0:19:53.240 a college degree. Yeah, it's definitely a strong conversation that 0:19:53.280 --> 0:19:55.680 everybody's having right now. Cell Con, thank you so much, 0:19:55.760 --> 0:19:59.040 founder of con Academy, on the phone from California. This 0:19:59.440 --> 0:20:03.240 is Bloomer Business Week with Carol Masser and Jason Kelly 0:20:03.359 --> 0:20:07.040 on Bloomberg Radio Live at Harvard Business School, and we're 0:20:07.080 --> 0:20:10.240