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 as it happened. Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinevin on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. Carol Masser is taking some
Speaker 1: well deserved time off. Coming up this hour, it's not
Speaker 1: a week without talking about the shrinking gap between traditional
Speaker 1: finance and crypto. Plus, we're gonna hear from one tech
Speaker 1: CEO who's focusing on the fight against ransomware, and next
Speaker 1: hour we hear from the CEO of lands End. He
Speaker 1: talks to us about the outlook for the holidays and
Speaker 1: how tough it's been to find employees. All that and
Speaker 1: more to come over the next two hours, but we
Speaker 1: begin with the current issue of Bloomberg Business Week magazine.
Speaker 1: It's the City's issue and feature stories about cities all
Speaker 1: over the world, the challenges they faced throughout the pandemic,
Speaker 1: and what they'll look like years into the future. It
Speaker 1: also takes a close look at one area of Seattle,
Speaker 1: a commercial district that has undergone trial by virus. The
Speaker 1: pandemic changed the heartbeat of urban areas across the US,
Speaker 1: and a few more so than the Pike Pine corridor
Speaker 1: of Seattle's Capitol Hill neighborhood. I spoke with Noah bou Hire,
Speaker 1: finance reporter for Bloomberg News, and I was joined by
Speaker 1: my Bloomberg Quick Take colleague Katie Greifeldt. Well, it's UM.
Speaker 1: I think what a lot of people would imagine as
Speaker 1: a Biburne at all hours, retail arts, commercial district. There's
Speaker 1: music venues, a ton of restaurant. UM. It's not uh,
Speaker 1: giant buildings, but you've got a lot of you know,
Speaker 1: for six seven eight story UM apartment blocks that have
Speaker 1: retail at the ground floor. So it was really the
Speaker 1: part of Seattle that that that felt most citylike outside
Speaker 1: of UM downtown. And what happened over the last year
Speaker 1: as the pandemic took hold and commuters started staying home
Speaker 1: and not going to those restaurants, and and then just
Speaker 1: a few months later, in the aftermath of the murder
Speaker 1: of George Floyd, UM activists took to the streets there
Speaker 1: to demand racial justice. Yeah, so look, it was an
Speaker 1: interesting UM neighborhood to follow for all those reasons you
Speaker 1: just mentioned. UM. You know, a lot of the businesses
Speaker 1: in in this corridor UH were the kinds of places
Speaker 1: that you know, relied on a vibrant street life and
Speaker 1: and and people being able to get together. And obviously
Speaker 1: the pandemic UM made that difficult. And UM the other
Speaker 1: thing that was interesting about this neighborhood is that there
Speaker 1: are just a ton of UM, smaller businesses. So you know, uh,
Speaker 1: Amazon has one of their Grocery Stories stores there. There's
Speaker 1: a Starbucks reserve Rosty in the neighborhood, so there's some
Speaker 1: corporate presence, but there were also a lot of small
Speaker 1: uh scrappy businesses that just had to figure it out. UM.
Speaker 1: And UH you know, with this piece, I I followed
Speaker 1: UM a number of them uh through the last year
Speaker 1: and a half to figure out how they did it.
Speaker 1: Because while you know a number of businesses did UM
Speaker 1: go under during the pandemic, UM, a lot managed to
Speaker 1: get to this point uh through UM the generosity of customers,
Speaker 1: through UM government assistance programs, and just a lot of
Speaker 1: scrappiness that I don't think um uh people and fully appreciated,
Speaker 1: and so no, it's a great piece. And one of
Speaker 1: the reasons why it's such a good read is because
Speaker 1: you did track a group of four businesses over the
Speaker 1: past year and a half. And I'm curious, you know,
Speaker 1: you mentioned the scrappiness of the businesses and the business owners,
Speaker 1: but I'm curious if there was a uniting common denominator
Speaker 1: and how they were all able to get through the pandemic. Yeah,
Speaker 1: that's a great question. UM I I really think it
Speaker 1: is the constellation of factors it was. It was you know,
Speaker 1: these these were established businesses with loyal customers and UM.
Speaker 1: You know, to the extent UH some of them were
Speaker 1: able to do go fund means government assistance, which is
Speaker 1: absolutely key UH programs like the Paycheck Protection Program. Pretty
Speaker 1: much everyone took that money. UM. It was either a
Speaker 1: form of bridge financing or UM uh to get them
Speaker 1: to other federal grants or UM or or it was
Speaker 1: the thing itself that that helped get them through UM.
Speaker 1: And then you know, I think another uh under appreciated
Speaker 1: part of this is that, UM, we're talking about a
Speaker 1: city where a lot of people have been willing to
Speaker 1: get vaccinated, and even though we've had pretty strong, um
Speaker 1: strong public health restrictions here in Washington State throughout the pandemic.
Speaker 1: UM people were willing to go back to this neighborhood
Speaker 1: when when those things lifted, because we're talking about a
Speaker 1: city where you know, seventy five more than seventy of
Speaker 1: UH people twelve and up have have gotten their jobs. Well,
Speaker 1: it's interesting because one of the one of the elements
Speaker 1: of this that really sticks out to me, that really
Speaker 1: caught my attention is the graphical representation of the change
Speaker 1: in weekly visits from that are in here charts that
Speaker 1: just show how foot traffic has not returned to retail
Speaker 1: establishments there too, restaurants there even after the vaccine rollout,
Speaker 1: to music venues for example, in some cases restaurant visits
Speaker 1: are still down even after vaccinations fifty from nineteen. How
Speaker 1: are these business owners dealing with that? Yeah, that's a
Speaker 1: that's a great question. I do. I do want to
Speaker 1: highlight that the data here is really interesting. We were
Speaker 1: able to get foot traffic data on about fifty locations
Speaker 1: around this neighborhood. Most of them were you know, commercial establishments,
Speaker 1: and UM, I think that data really does show you,
Speaker 1: like you said, that things are a far are far, far,
Speaker 1: far from being back to normal. Um and the reason
Speaker 1: these businesses are still you know, any of these owners
Speaker 1: will tell you things are not back to normal. I
Speaker 1: mean they are. They are still very much in the
Speaker 1: thick of this. And we're, you know, going into the
Speaker 1: fall when things like outdoor dining are going to be
Speaker 1: harder to do, and frankly and Seattle just not comfortable
Speaker 1: because it rains so much here. So I think that's
Speaker 1: a big part of this part of this story is
Speaker 1: that these businesses have been resilient, but they are by
Speaker 1: no means, you know, out of the ways yet. That
Speaker 1: was Bloomberg Finance reporter Noah Boo Hire. You're listening to
Speaker 1: Bloomberg Business Week coming out of the CEO of cracking
Speaker 1: a bank, on closing the gap between crypto and traditional finance.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes Tim Spinovik from Bloomberg Radio. Now,
Speaker 1: this past week was a particularly notable one for crypto.
Speaker 1: We had the Bitcoin flash crash, where the crypto suddenly
Speaker 1: plunged sevent in just minutes. David Knitsky is the CEO
Speaker 1: at crack and Bank. It's one of the largest crypto
Speaker 1: exchanges with over eight million users worldwide. They've had about
Speaker 1: one million new sign ups in the second quarter of
Speaker 1: I spoke with David and I was joined by my
Speaker 1: quick Take co host Katie Greifeld. We started by asking
Speaker 1: why he's chosen Wyoming for the company headquarters. Wyoming past
Speaker 1: the first of its kind new regulatory license here for
Speaker 1: a special special purpose depository institution. It's a state chartered bank.
Speaker 1: And up until now, crypto companies have really been round
Speaker 1: peg square hold into existing licenses and regimes that didn't
Speaker 1: make a ton of sense, and we're kind of locked
Speaker 1: out of the existing banking mold. So for that reason,
Speaker 1: we'll bring in the US business under a more certain,
Speaker 1: more formal, and better regulatory regime, as well as expanding
Speaker 1: in the new opportunities, new products and markets. As you see,
Speaker 1: everything's converging between crypto, neo bank, spintech, traditional and were
Speaker 1: we want to be at the heart of that market.
Speaker 1: But but you do call yourself a bank, Yeah, we are.
Speaker 1: We are state chartered bank, and so Wyoming is interesting.
Speaker 1: Obviously has positioned itself to be a crypto hotbed. Where
Speaker 1: does that stand with the rest of the United States.
Speaker 1: Are other states moving towards Wyoming or is Wyoming really
Speaker 1: an outlier at this point? Why? I mean, definitely got
Speaker 1: the ball started, but the ball rolling. But a number
Speaker 1: of states have let's say, borrowed liberally from the Wyoming
Speaker 1: playbook and enacted their own version of a similar charter,
Speaker 1: and it's provoking federal regulators to take action as well.
Speaker 1: That's kind of the beauty of our republic and our
Speaker 1: system here where states can be the laboratories of innovation
Speaker 1: and push things forward faster than the federal government have.
Speaker 1: So it's really been a spark that's moved the whole
Speaker 1: industry forward. David, you say that kracking will be the
Speaker 1: first United States crypto bank, It's I'm wondering the problem
Speaker 1: that you're're setting out to solve here, what is not
Speaker 1: being met by traditional finance. Yeah, so in the traditional
Speaker 1: regimes right now, you can either apply for fifty state
Speaker 1: money transmission licenses or you can try and none of
Speaker 1: them have like crypto specific language. They're built for like
Speaker 1: Western unions and fin techs of the world. And then
Speaker 1: or you could try to pursue a banking license. But
Speaker 1: the federal regulators b C, the s c i C
Speaker 1: have been inconsistent about that UM and they don't have
Speaker 1: written moved about how they're going to treat crypto that
Speaker 1: has a dedicated supervisory and oversight manual. We just want
Speaker 1: to know, Hey, this is how we're gonna be regulated
Speaker 1: and what our expectations are and we can meet them.
Speaker 1: So for those reasons, the lack of clarity around some
Speaker 1: of the stuff in other states is really suboptimal. And
Speaker 1: banking has been a traditional problem for crypto cracking is
Speaker 1: lucky to have a swath of good third party banking partners,
Speaker 1: but there's nothing like vertically integrating and controlling your own
Speaker 1: destiny direct to the FED. And so, David, I've always
Speaker 1: been curious, you know, how do you scale? Obviously there
Speaker 1: are regulatory hurdles, but in terms of the average American
Speaker 1: who maybe only has a passing understand ending of what
Speaker 1: bitcoin and what cryptocurrencies are, how do you convince them
Speaker 1: that this is the next, you know, wave of banking,
Speaker 1: this is the next evolution of how you handle money.
Speaker 1: How do you bring that message beyond just the cryptocurrency community. Yeah, Well, one,
Speaker 1: the crypto currency community is is growing rapidly and more
Speaker 1: and more kind of mainstream adoption is taking place. We
Speaker 1: think that's going to continue. So on the one hand,
Speaker 1: the market is coming to us. But on the other hand, yeah,
Speaker 1: just banking license lets us offer online mobile checking accounts
Speaker 1: and savings accounts and traditional equities brokerage, things like that
Speaker 1: that you know mainstream America are used to. And so
Speaker 1: if you put that side by side or crypto, it's
Speaker 1: a kind of a great conversion mechanism. You do know
Speaker 1: on the Cracking Banks website that you are not f
Speaker 1: d I c ensured. The money that you put in,
Speaker 1: the crypto you put in is not f d I
Speaker 1: c ensured. Explain why that is a little bit and
Speaker 1: why you think that consumers from who might be a
Speaker 1: little concerned about that should or should not be Yeah, anything,
Speaker 1: their advantages to our structure. So the way that the
Speaker 1: SPDI charter works is we are required to be a
Speaker 1: fully reserved, fully back bank, so we maintain we take
Speaker 1: customer deposits and we keep a hundred percent of it
Speaker 1: in cash, so we don't have the types of market
Speaker 1: or credit risks or insolvency risks that the FBI c
Speaker 1: was meant to protect against. So as a result, we're
Speaker 1: kind of exempt from having to apply for that. There
Speaker 1: is no you know, risk because we're not lending money
Speaker 1: out in the mortgage portfolios, we're not putting it into
Speaker 1: we're not even putting the treasuries, let alone longer duration
Speaker 1: or risk your instruments. Given the increased interest in crypto
Speaker 1: the way, we do see traditional financial institutions starting to
Speaker 1: embrace it. If you expect to get significant competition from
Speaker 1: the big names in banking and even community banks, yeah,
Speaker 1: I mean I expect more and more to realize the
Speaker 1: opportunity and come to the market. We welcome them, not
Speaker 1: particularly concerned about it. As you see any new like
Speaker 1: technology medium, normally it's the folks who are kind of
Speaker 1: that native to that medium are the ones that do best.
Speaker 1: I think it'll be pretty cha vallenging for institutions and
Speaker 1: incumbents to really adopt the crypto fully. But I think
Speaker 1: it does help the market more broadly, and I do
Speaker 1: think the question is to find the existing financial industry
Speaker 1: coming to crypto rather than crypto coming to the financial industry.
Speaker 1: And so I want to switch gears and talk about
Speaker 1: stable coins because I'm kind of obsessed with them. For
Speaker 1: those listening who don't know, stable coins are cryptocurrencies that
Speaker 1: try to maintain a fixed exchange rate with a fiat currency,
Speaker 1: usually it's the dollar. They try to maintain a one
Speaker 1: to one peg. They've come under a lot of scrutiny lately.
Speaker 1: Some people might have heard of Tether. It's the largest
Speaker 1: stable coin. It was supposed to be back to one
Speaker 1: for one by US dollars. We learned in May that
Speaker 1: it wasn't. That actually holds a ton of commercial paper,
Speaker 1: maybe thirty one billion. If you look at Tether's market cap,
Speaker 1: I'm curious what that could look like going forward. We
Speaker 1: know that Treasury Secretary Jin Yellen is concerned about stable coins.
Speaker 1: Some FED policymakers have made worried noises as well. I'm
Speaker 1: curious even whether you think that we could see regulation
Speaker 1: in that space. Yeah. I always expect regulation in thought
Speaker 1: new financial markets, no doubt. I think the stable coins
Speaker 1: are a net benefit and a boon. In fact, the
Speaker 1: US should love stable coins. It is the best way
Speaker 1: to maintain our dollar reserve and hegemony and for our
Speaker 1: kind of global reach and global economic cloud. And so
Speaker 1: the U s should love stable coins. But we know
Speaker 1: that the US doesn't love stable coins, and you do
Speaker 1: have banks like Barkley's warning that this could raise some
Speaker 1: really thorny issues for the FED. If there is a
Speaker 1: run on Tether people trying to redeem their holdings, that
Speaker 1: could cause Tether to dump commercial paper on mass, and
Speaker 1: the commercial paper market is crucially important to just the
Speaker 1: functioning of companies. So I'm curious what would get the
Speaker 1: US on board if they should love stable coins. Not
Speaker 1: surprising that a bank would be wary of something that
Speaker 1: definitely is competitive to it, And there are certain areas
Speaker 1: of stable coins that you know could potentially use a
Speaker 1: little bit more and parency, no doubt, And in fact,
Speaker 1: even teather, which is certainly the more questionable ones in
Speaker 1: the market, like it's getting better and it is definitely changing.
Speaker 1: It's kind of like balance sheet to these concerns. So
Speaker 1: I do think that's going to change over time, and
Speaker 1: there's going to be more transparency, whether by force or
Speaker 1: just by market dynamics. So I expect that to happen
Speaker 1: sooner rather than later. That was David Kannitski, CEO at
Speaker 1: Cracking Bank, Still Ahead on Bloomberg Business Week. Who wins
Speaker 1: and who loses? In the Age of Tech Titans, We're
Speaker 1: gonna hear from the man who literally wrote the book
Speaker 1: on it. This is Bloomberg Broadcasting from the financial capital
Speaker 1: of the World, Bloomberg eleven Rio in New York to Washington,
Speaker 1: d C. Bloomberg to Boston, Bloomberg one O six one
Speaker 1: does San Francisco, Bloomberg nine six to the country Sirius
Speaker 1: XM Chamber one nine and around the globe the Bloomberg
Speaker 1: Business and Bloomberg Radio dot Com. This is Bloomberg Business
Speaker 1: Week with Kara A Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovin on Bloomberg Radio. Many people may think that they
Speaker 1: understand the secrets to the success of Silicon Valley and
Speaker 1: the Thing stocks, but the truth is well a lot
Speaker 1: more complicated. That's at least according to investment banker and
Speaker 1: Columbia Business School professor Jonathan Knee. He's the author of
Speaker 1: the new book The Platform Delusion, Who Wins and Who
Speaker 1: Loses in the Age of Tech Titans. We spoke to
Speaker 1: him earlier in the week. I was joined by Bloomberg's
Speaker 1: West Coast correspondent at Ludlow, and we started by asking
Speaker 1: him if there's any secret to the success of these
Speaker 1: big tech companies, calling them platforms is a way that
Speaker 1: makes people feel comfortable that, well, they're all doing great,
Speaker 1: and that's the secret. But the reality is many more
Speaker 1: platform businesses are unsuccessful than our successful and when you
Speaker 1: look at the sources of strength of each of those businesses,
Speaker 1: they are quite different. So let's start with Apple, for example,
Speaker 1: because there's a lot of news about Apple, including the
Speaker 1: fact that we do expect the company to unveil hardware
Speaker 1: and is that my colleague at though my co host
Speaker 1: on the show reported one of the key people in
Speaker 1: the Apple's car program, excuse me, has been posted going
Speaker 1: to Ford. Let's start with Apple. What's what's the secret Apple? Well, look,
Speaker 1: at the end of the day, Apple is a product company,
Speaker 1: and in fact, the vast majority of Apple's revenues has
Speaker 1: been for since the death of Steve Jobs, has been
Speaker 1: from a single product, the iPhone. That is still the case,
Speaker 1: that is still a majority of their revenues. But what
Speaker 1: makes it so phenomenally profitable is in fact the platform
Speaker 1: aspect of the business, which is really the app store,
Speaker 1: that has created an ecosystem of wild and extraordinary profitability
Speaker 1: and the new leadership post Jobs has done a phenomenal
Speaker 1: job of monetizing that ecosystem and monetizing that product. But
Speaker 1: you know what, in the world of products, eventually everything
Speaker 1: is a toaster. So if you if you don't come
Speaker 1: up with a new one, a radical, new one, at
Speaker 1: some point, you're not going to be able to ring
Speaker 1: out any more juice from that lemon. There's more to go.
Speaker 1: It's a phenomenally profitable and fantastic company, but eventually you've
Speaker 1: got to come up with something new, which is why
Speaker 1: you hear them throwing out crazy ideas like well, I'm
Speaker 1: going to build a car. Healthcare is the next thing
Speaker 1: for Apple, which is fine in theory, but there's no
Speaker 1: evidence that those are things that Apple is very good at.
Speaker 1: How do you assess this basket of mega cap tech
Speaker 1: companies as we come out of the pandemic. It seems
Speaker 1: they found some relevancy, some stickiness. But what is your
Speaker 1: main takeaway of the fortunes of those companies from COVID nineteen, Well,
Speaker 1: in many cases, what you've seen is phenomenon that we're
Speaker 1: going to happen eventually being pulled forward, people being willing,
Speaker 1: even even your grandma's willing to buy groceries online when
Speaker 1: the alternative is getting a deadly virus. So it definitely
Speaker 1: helped a number in permanent ways. But it's very important
Speaker 1: with a number of companies, not just the big ones,
Speaker 1: to distinguish things that are pulled forward and permanent and
Speaker 1: things that basically gave companies that frankly didn't have much
Speaker 1: reason to survive a an extra whiff of life and
Speaker 1: it's not gonna last after things normalize. That's not the
Speaker 1: case with any of those guys. All those guys are
Speaker 1: going to be here for a long time. A're going
Speaker 1: going to do well. And mostly it's a pull forward phenomena.
Speaker 1: But at least two of the five fang companies are
Speaker 1: in incredibly competitive marketplaces, Netflix and Amazon at least the
Speaker 1: part of Amazon is that is an e commerce and
Speaker 1: those are both very low margin businesses and they are
Speaker 1: both facing more competition than ever before. Well, let's talk
Speaker 1: a little about that, Anathan, because you write in the
Speaker 1: Platform Delusion who wins and who loses in the Age
Speaker 1: of tech Titans, that there is this myth that these
Speaker 1: companies are invincible and that discourages competition. Where are these
Speaker 1: companies vulnerable well, each one has got a different achilles heel.
Speaker 1: Let's start with the strongest one. You said, Google sits
Speaker 1: on top, and it sits on top for a reason.
Speaker 1: In search, it's mind blowing business. It is unlike many
Speaker 1: cases where people talk about learning and AI and big data,
Speaker 1: where actually, in practice those things don't do very much
Speaker 1: for you. In the case of Google, it does do
Speaker 1: a lot for you. And the thing about Google that's
Speaker 1: so incredible is it keeps doing more and more as
Speaker 1: it gets more and more activity. So in search it's
Speaker 1: a monster. But what's their achilles heel. It's that in
Speaker 1: anything other than search, their track record is miserable, I
Speaker 1: mean miserable. A great example of that is their attempt
Speaker 1: to compete with Amazon in AWS. It started trying to
Speaker 1: compete with AWS at exactly the same time as Microsoft.
Speaker 1: That's Columbia Business School professor Jonathan Knee. He's also the
Speaker 1: author of the new book The Platform Delusion. Who Wins
Speaker 1: and Who Loses in the Age of Tech Titans. You're
Speaker 1: listening to Bloomberg Business Week. Up next, we stay with
Speaker 1: the tech industry, but move closer to cybersecurity. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio. It seems
Speaker 1: like each week we learn of a new hacker attack
Speaker 1: on some computer network, whether it's on a pipeline at
Speaker 1: meat processing facility, the subway system here in New York,
Speaker 1: or even the u N as we learned just this week,
Speaker 1: we spoke to Wendy Thomas, the CEO of the global
Speaker 1: cybersecurity company Secure Works, just as she was appointed CEO.
Speaker 1: This week she's book with me and Bloomberg's Katie Greifeld Well,
Speaker 1: always feeling great about leading an organization that does such
Speaker 1: amazing work. Secure Works is all about securing organizations globally,
Speaker 1: and frankly, it's just a privilege for me to continue
Speaker 1: to fight the good fight with secure What do you
Speaker 1: see as the main challenge right now? Not just facing
Speaker 1: Secure Works, but facing each and every company that operates
Speaker 1: right now in a world where it seems like each
Speaker 1: and every day we hear new ransomware attacks, new cybersecurity threats,
Speaker 1: and companies essentially being taken to their knees. Were ransom
Speaker 1: You've absolutely hit on one of the prevailing trends in
Speaker 1: the security space. And you know, it's easy to take
Speaker 1: away from all these headlines that the attackers may be
Speaker 1: winning the fight. Frankly, we see many threat actors now
Speaker 1: frankly offering ransomware as a service and so for you know,
Speaker 1: hud six dollars, you can purchase hacking tools on the
Speaker 1: dark web, and when the barriers to entry are low
Speaker 1: and the rewards are high, you see proliferation of this
Speaker 1: type of crime. In fact, the ransomware payouts in globally
Speaker 1: alone we're about twenty billion dollars. So that is a
Speaker 1: top security concern for all of us. The stats show
Speaker 1: that there's a ransomware attack on a business every eleven seconds.
Speaker 1: So these attacks are, as you said, hitting closer and
Speaker 1: closer at a home for all of us, as supply
Speaker 1: chains and food and gas are disrupted, and we see
Speaker 1: headlines as business leaders and feel a responsibility to protect
Speaker 1: our organizations going forward. And here's the thing. It's such
Speaker 1: an opportunistic crime. It can feel when you're attacked that
Speaker 1: you were targeted, but frankly, they're very rarely targeted at
Speaker 1: a specific company or even an industry. They're targeted at
Speaker 1: companies that are an easy target. Let's talk about that,
Speaker 1: the fact that it is opportunistic, that it's not necessarily
Speaker 1: companies being targeted or singled out. I mean, how should
Speaker 1: businesses take that information that it is opportunistic? How do
Speaker 1: you even protect your business against that? What you want
Speaker 1: to be is a very expensive and hard target to hit. Right,
Speaker 1: Ransomware is all about a very lucrative criminal enterprise. And
Speaker 1: so if you set the foundational protections in place in
Speaker 1: a business, it is not complex, but it is it
Speaker 1: is diligent to protect your business with good security hygiene,
Speaker 1: strong passwords, multi factor authentication, being very guarded about your
Speaker 1: I T admin. Right, those are great ways to prevent
Speaker 1: the easy entry. Because companies are are really only as
Speaker 1: strong as their weakest link. Right, That adversary only has
Speaker 1: to find one crack in the armor to get in,
Speaker 1: and so we believe that you have to do everything
Speaker 1: you can to be a hard target for them, and
Speaker 1: it secure works. We also believe that eventually they're going
Speaker 1: to find a way in some some employee will probably
Speaker 1: click on that phishing email. So you've got to have
Speaker 1: complete visibility to detect anything and everything across your digital estate.
Speaker 1: And then, because speed is of the essence, you've got
Speaker 1: to have the ability to contain those threats in an
Speaker 1: automated way before real damage can be done. So, if
Speaker 1: it is inevitable that someone will gain access to a
Speaker 1: company network, what's the next step that the company needs
Speaker 1: to take to minimize damage. That's where the ability to
Speaker 1: be prepared for when when they're in and so that
Speaker 1: the time to detect them has to be absolutely rapid.
Speaker 1: And then the ability to have a platform like the
Speaker 1: tageous platform that Secure Works has. It tells you what
Speaker 1: good looks like. Right, it says this has happened, this
Speaker 1: is who the threat actor is, this is the asset
Speaker 1: they're targeting, and it's important to your organization click this button.
Speaker 1: It's time to contain this threat immediately. So it's that
Speaker 1: mean time to remediation. That is, it is important so
Speaker 1: that that threat actor doesn't have the time to get
Speaker 1: to a place where they can deploy that ransomware and
Speaker 1: cripple your organization. We've really seen a proliferation of attacks
Speaker 1: over the past few months. I'm curious why now, why
Speaker 1: have we seen just such a uptick in hacks. I
Speaker 1: think for a combination of of an increase in hacks,
Speaker 1: and certainly the shift to remote work increase the attack
Speaker 1: surface in the midst of the pandemic, and there were
Speaker 1: opportunistic opportunities for those threat actors to also use the
Speaker 1: fear or lack of information around the pandemic to create
Speaker 1: different kinds of attack vectors phishing emails around vaccine answers
Speaker 1: and that kind of thing. But I also think that
Speaker 1: the impact of those has been much larger, impacting everyday
Speaker 1: citizens like the pipeline attack, and because of that, the
Speaker 1: headlines and the focus of of even government has increased
Speaker 1: as a result of that. Wendy, whenever I'm talking to
Speaker 1: a cybersecurity expert someone in a position like yours, I
Speaker 1: want to ask, yes, about what companies can do, but
Speaker 1: also about what we can do as individuals. I mean,
Speaker 1: we carry around these phones with so much information on them.
Speaker 1: We have our email accounts that you know allow us
Speaker 1: to reset passwords if we forgot a password. What is
Speaker 1: the best way that we can think about protecting our own,
Speaker 1: per small data when it's out in so many places.
Speaker 1: What are some best practices for us? Well, first of all,
Speaker 1: I say that security is a team sport, right, and
Speaker 1: so one of the things that's important to Secure Works
Speaker 1: is increasing cyberliteracy generally, because if you make yourself again
Speaker 1: a difficult target, then the likelihood that that you'll be
Speaker 1: opportunistically targeted is lower. But your information does have value.
Speaker 1: Your your contact, your banking information, and to the extent
Speaker 1: that you don't put multi factor authentication in place around
Speaker 1: your particularly banking or other sensitive information or application access,
Speaker 1: you're creating unnecessary exposure strong passwords, not your dog's name,
Speaker 1: not your anything around your family. So there's just the
Speaker 1: same kind of hardening of compromise and access that companies
Speaker 1: need to do, the same thing that individuals need to do.
Speaker 1: And frankly, just be aware of where you're putting your information,
Speaker 1: especially on a public computer library or such, and that
Speaker 1: kind of awareness and vigilance will help keep you safe. Okay, well,
Speaker 1: I definitely need to go update a few passwords, but
Speaker 1: I do want to get a check on the secure
Speaker 1: Works business because you took over effective as of September three.
Speaker 1: Secure Works reported earnings on September two, and they were
Speaker 1: a little bit below analysts expectations. Both second quarter revenue
Speaker 1: and the forecasts going forward for the third quarter and
Speaker 1: the fiscal year. Revenue below what analysts had been expecting,
Speaker 1: and the stock is still up about eight percent, but
Speaker 1: definitely a rough week yesterday, plunging about for the week.
Speaker 1: So Wendy, I know you just took over. You're still
Speaker 1: getting the seat warm, but I'm curious, what's your priority
Speaker 1: going forward? How do you right the ship? So we
Speaker 1: actually have the right answer for today's toughest security challenges.
Speaker 1: And inside of the secure Works business, which was founded
Speaker 1: about twenty years ago, we first started this fight with
Speaker 1: really a services based approach to security. And as we've
Speaker 1: talked about, because of the technology evolution of the tools
Speaker 1: and threat actor's hand and the pace of this fight
Speaker 1: and the need for automated, rapid machine learning fuel detections
Speaker 1: and orchestrated remediation to prevent the kind of massive breaches
Speaker 1: and costs that we see in modern times, about four
Speaker 1: years ago we started to build a modern security platform
Speaker 1: called Tageous that is all about taking that full detection
Speaker 1: and response automation capability and putting it all together in
Speaker 1: a way that can solve the real security challenges of today.
Speaker 1: That business inside of secure Works is total services business
Speaker 1: is actually growing incredibly fast. Two and second quarter over
Speaker 1: last year hit a hundred million. Are are just two
Speaker 1: years after we launched the solution, and so while we
Speaker 1: are shifting away from some of the services that we
Speaker 1: previously offered as part of the total revenue, the right
Speaker 1: answer and the true value for customers in the security
Speaker 1: space is this emerging XDR platform and that's a ship
Speaker 1: we're gonna keep sailing. I'm wondering about breakdown of revenues
Speaker 1: in the fiscal year one where we are now revenue
Speaker 1: comes from managed security and threat intelligence comes from security
Speaker 1: and risk consulting solutions. How do you want to see
Speaker 1: that mixed change? We would like to see our XDR
Speaker 1: solutions are tageous solutions be about of our total revenue,
Speaker 1: and we shared that as a long term model. When
Speaker 1: you say long term, how many years are you thinking here, well,
Speaker 1: we don't have an exact number out there. That that's
Speaker 1: a that's a few years out. And I think the
Speaker 1: importance of continuing to provide some degree of consulting services
Speaker 1: to help customers really mature their security program is an
Speaker 1: important overall part of the business model to keep them secure.
Speaker 1: And so, Wendy, you made the point earlier that the
Speaker 1: attacks that we've seen they haven't been targeted. They've been
Speaker 1: more opportunistic in nature versus companies being singled out. But
Speaker 1: I'm curious, have you noticed any industry, or any type
Speaker 1: of country or not countries company being particularly vulnerable to
Speaker 1: ransomware attacks. We absolutely have seen certain industries that are
Speaker 1: more vulnerable. If you think about where the security adoption
Speaker 1: started many years ago, financial services companies were a lucrative
Speaker 1: target and they had a lot of compliance requirements. They
Speaker 1: became security hardened very quickly, and you don't often see
Speaker 1: them in the headlines today. What you see again are
Speaker 1: those unfortunately easier targets. So you see now unfortunately educational institutions,
Speaker 1: universities even k through twelve school systems under attack, or
Speaker 1: manufacturing companies who have had to go through very rapid
Speaker 1: digital transformation and so their exposure of their attack service
Speaker 1: has increased. We unfortunately see that those organizations, if they
Speaker 1: have not partnered with someone like secure Works to help
Speaker 1: put that security in place, they are quite vulnerable and
Speaker 1: often successfully attacked that Secure Work CEO Wendy Thomas. That
Speaker 1: wraps up the first hour of the weekend edition of
Speaker 1: Bloomberg Business Week from Bloomberg Radio. I'm Tim Stanobek. Coming
Speaker 1: up in our next hour, the CEO of lands And
Speaker 1: joins us to talk all about the struggle to find employees.
Speaker 1: Plus we talk gender diversity with the CEO of Heineken USA.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week, inside from
Speaker 1: the reporters and editors who bring you America's most trusted
Speaker 1: business magazine, plus global business, finance and tech news. As
Speaker 1: it happened, Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stinovic on Bloomberg Radio. Hello, I'm Tim Stanebek.
Speaker 1: My co host Carol Master is off this week. Plenty
Speaker 1: ahead in our second hour of the weekend edition of
Speaker 1: Bloomberg Business Week, just as kids head back to school
Speaker 1: and retailers start thinking about the holiday season, we're going
Speaker 1: to hear from the CEO of lands end Us. The
Speaker 1: CEO of Honeken USA joins us to talk all about
Speaker 1: gender diversity in the beer business. All of that to come,
Speaker 1: but first up this hour, the classic pay phone. Think
Speaker 1: about what it evokes. For so many years, it was
Speaker 1: really the only way for any of us to communicate
Speaker 1: with one another when we weren't at home or when
Speaker 1: we weren't at work, but with smartphones nearly everywhere, it's
Speaker 1: relatively rare that the pay phones that are still out
Speaker 1: there are even used. Joined by my colleague Ed Ludlow,
Speaker 1: I heard from David Dudley, a writer for Bloomberg City Lab,
Speaker 1: who profiled a photographer who's working to document surviving pay phones.
Speaker 1: So I spent the day with a gentleman named Eric Kunzman,
Speaker 1: who is a photographer and a photography professor in Rochester,
Speaker 1: New York, and a couple of years ago, he became
Speaker 1: sort of fascinated by the fact that it seemed like
Speaker 1: the neighborhood that he had moved to studio too was
Speaker 1: was full of payphones, and he hadn't noticed that in
Speaker 1: other parts of town. This is sort of a lower
Speaker 1: income part of Rochester. And he started um to this
Speaker 1: sort of take images portraits of the payphones that he
Speaker 1: saw in the neighborhood, usually in front of convenience stores
Speaker 1: and gas stations. And this sort of expanded into this
Speaker 1: sort of a kind of a global quest that he
Speaker 1: has launched to document every single payphone and Monroe County,
Speaker 1: New York. I'm a Londoner, right, I think phone box,
Speaker 1: I think iconic red phone box. I think tourism. But
Speaker 1: as part of this process, what exactly what do you
Speaker 1: learn about any neighborhoods given phone box? What does it
Speaker 1: tell you about the economy, about the people in that place. Well,
Speaker 1: Eric sort of theorized that some of these these phones
Speaker 1: were basically just sort of forgotten. They've been sort of
Speaker 1: installed in the nineties or earlier, and because no one
Speaker 1: had renovated the building that they were attached to, or
Speaker 1: no one had bothered to call the phone company and say, hey,
Speaker 1: could you remove this thing, the machines themselves has sort
Speaker 1: of persisted. So was sort of like a geography of
Speaker 1: the more sort of economically left behind parts of the city.
Speaker 1: And as part of his project, he sort of mapped
Speaker 1: all the phones across the county and overlaid that with
Speaker 1: with economic data and other information. So he became sort
Speaker 1: of interested sort of what the the whole kind of social,
Speaker 1: kind of geography of telephones meant um, which sort of
Speaker 1: made this more than just sort of an aesthetic project.
Speaker 1: It was sort of a social documentary. I do find
Speaker 1: that the the idea that this is based in Rochester
Speaker 1: New York just fascinating. As you point out, it was
Speaker 1: the home of George and Eastman, the founder of Eastman Kodak,
Speaker 1: and at its nineteen seventies peak, the photography giant employed
Speaker 1: about fifty thou people and fueled a quarter of the
Speaker 1: city's economic activity. It's absolutely a different picture in this
Speaker 1: day and age, David, And I'm wondering the juxtaposition of
Speaker 1: that and the symbolism there that this project is being
Speaker 1: done on film, first of all, uh, in in a
Speaker 1: place where Eastman Kodak was for so long the stalwart
Speaker 1: of the economy. Yeah. No, I mean it's that's sort
Speaker 1: of part of the conceit here as a sort of
Speaker 1: this convergence of of obsolete technologies, uh, that that Eric
Speaker 1: really still finds value in. He is a he is
Speaker 1: a film photographer, die Hard. He has sort of a
Speaker 1: a shrine to Kodak film in his studio. So he's
Speaker 1: shooting these things on an old half of Black Cameron film,
Speaker 1: using the this this product that is so associated with
Speaker 1: with Rochester and with the wealth that sort of built
Speaker 1: the city, and it's sort of part of his his
Speaker 1: his sort of thesis that there is value in things
Speaker 1: that that that might not be cutting edge technology anymore,
Speaker 1: but are still useful and still still serve different people.
Speaker 1: They're really encouraged Bloomberg Radio listeners to go on Bloomberg
Speaker 1: dot com onto the Bloomberg terminal and look at the
Speaker 1: actual photographs themselves. As Tim said, short and film. But
Speaker 1: there's something missing from every single photograph. There are no
Speaker 1: people in any of the shots a tool. Why is that?
Speaker 1: I didn't want you to sort of think about who
Speaker 1: who is using the phone. He wanted you to sort
Speaker 1: of leave that to your imagination because really, you know,
Speaker 1: and those of us who are out in age when
Speaker 1: we uh use payphones more regularly. In the eighties and nineties, um,
Speaker 1: it was a public amenity. Everyone used the payphone, and
Speaker 1: now it's sort of perceived as something as a communication
Speaker 1: device of last resort for people who really have no resources.
Speaker 1: And he really wanted you to think about who who
Speaker 1: might need that phone. And uh so it's this sort
Speaker 1: of gallery of of of unpeopled landscapes where you sort
Speaker 1: of see the phone as part of a kind of
Speaker 1: a streetscape. But yeah, there's no there are no people there.
Speaker 1: They're they're used sometimes, He's he's got data from from
Speaker 1: the telecom that still operates them that says that you
Speaker 1: know that most of these phones are used a couple
Speaker 1: of times a week still. Uh, the handful that are
Speaker 1: still working, a lot of them are just sort of corpses.
Speaker 1: They're their handsets are broken, the inside has been removed.
Speaker 1: But some of them still work and and those that
Speaker 1: do still do find people who need to use them.
Speaker 1: What did the company that oversees these phones, that these
Speaker 1: phones belong to, Frontier tell you about the status of
Speaker 1: the phones. It's not really a priority for your communications
Speaker 1: right now. This is a telecom that is, you know,
Speaker 1: pivoting to fiber optics and you know, cutting edge technologies.
Speaker 1: But it also happens to have about fifteen hundred of
Speaker 1: these phones scattered around the county. It's unlikely it's a
Speaker 1: major profit center. Let's just say it's a it's a
Speaker 1: it's a very very declining business. There less than a
Speaker 1: hundred thousand pay phones across all of the United States,
Speaker 1: probably a lot less. And uh, you know, it's it's
Speaker 1: very much a a part of the telephone tunations business
Speaker 1: that has has really been left in the past. That's
Speaker 1: David Dudley from Bloomberg City Lab. You're listening to Bloomberg
Speaker 1: Business Week. Coming up, we explore the pandemics impact on
Speaker 1: learning trends for women with an executive from Corsera. That's next.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio.
Speaker 1: It's hard to believe that students going back to school
Speaker 1: are entering their third year of class as a mid
Speaker 1: a pandemic, and it's unclear at this point what exactly
Speaker 1: things are going to look like when it comes to
Speaker 1: remote versus in person learning. Corsera is a company that
Speaker 1: has been working on online education for nearly a decade,
Speaker 1: way before we were even talking about the pandemic. The
Speaker 1: company works with hundreds of companies and universities to offer
Speaker 1: professional development courses. And we spoke to Dr Emily Sanz,
Speaker 1: the vice president of data Science at Corsera, on what
Speaker 1: learning trends we're seeing, and of course on the impact
Speaker 1: of the pandemic has had when it comes to online
Speaker 1: learning and skilling. You know, brief contexts on Coursera bit
Speaker 1: to situate the report. We were co founded by Professor's
Speaker 1: Daphne Caller and Andrew ng really with the mission to
Speaker 1: provide universal access to world class learning, and we believe
Speaker 1: new skills can open doors to new opportunities for folks
Speaker 1: from a range of backgrounds and giving more women around
Speaker 1: the world access to top quality learning, including in stem
Speaker 1: and digital fields that are fast growing in the labor
Speaker 1: market has been a big part of our work since
Speaker 1: the beginning, inspired in no small part by by Daphne's leadership.
Speaker 1: So the report was really inspired by the macro labor
Speaker 1: market trends we've been seeing amid the pandemic in particularly
Speaker 1: with UM women dropping out of the labor market UM
Speaker 1: and the unemployment crisis UM that has disproportionately impacted women,
Speaker 1: And so we took a look at how was that
Speaker 1: feeding through to their learning decisions UM and what if
Speaker 1: that imply about where the labor market might be headed?
Speaker 1: So emily, what are the skills that women are looking
Speaker 1: for when they turned to online learning? Are they turning
Speaker 1: to change jobs? Are they trying to get ahead and
Speaker 1: the jobs they already have? Yeah, so you know, we
Speaker 1: are seeing overall women turning to OurMine education at higher
Speaker 1: rates than pre pandemic and actually their growth and online
Speaker 1: learning UM is outpacing that of men during the pandemic,
Speaker 1: So that means the gender gap in online learning is
Speaker 1: starting to close. UM. This is a worldwide trend, but
Speaker 1: it holds through to the US as well. UM. And
Speaker 1: one of the things that's really striking, you know, you
Speaker 1: can look at overall course enrollments from women. They're increasing
Speaker 1: from about in to in Almost half of all course
Speaker 1: enrollments now are coming from women. But I'm party to
Speaker 1: see that this includes really strong growth in female enrollments
Speaker 1: in STEM courses and an entry level professional certificates, so
Speaker 1: some of the most job relevant content. UM. To your question,
Speaker 1: we do see women looking to advance in their current careers,
Speaker 1: especially those that are already in technology oriented fields like
Speaker 1: data and computer science. UM. STEM course enrollments in the
Speaker 1: US from women increase from about pre pandemic about um
Speaker 1: in this year. But we're also seeing a lot of
Speaker 1: women investing in online learning in order to transition to
Speaker 1: new careers. Especially entry level professional certificate enrollments for women
Speaker 1: have really exploded. They were about seven of those enrollments
Speaker 1: for by women in and it's now a much healthier
Speaker 1: one as during the pandemic, women are looking to transition
Speaker 1: to those entry level roles. We saw with the jolts,
Speaker 1: the job openings and labor turnover survey that this imbalance
Speaker 1: just continues to exist between the number of jobs that
Speaker 1: are available and the number of people who are unemployed.
Speaker 1: They're not necessarily meeting there is there is this imbalance
Speaker 1: that still exists. What is your data tell you about
Speaker 1: the way that people can use courserah coursework to actually
Speaker 1: get that job and be qualified for that job that's
Speaker 1: out there. It's a great question, and I think that's
Speaker 1: actually a lot of what we're seeing with this growth
Speaker 1: in global enrollments, but especially in female littlements. Right, many people,
Speaker 1: but in particular women, dropped as the labor market during
Speaker 1: the pandemic, including to care for children and other family members.
Speaker 1: They anticipated wanting to go back to work when childcare
Speaker 1: and other family constrains ease, and they know that developing
Speaker 1: incremental job relevant skills now can help them do that,
Speaker 1: can help them re enter the workforce in a better
Speaker 1: position than they left. And this isn't just about the
Speaker 1: pandemic um There are more and more jobs that are
Speaker 1: requiring digital skills. Digitization of a lot of customer employee
Speaker 1: workflowes have certainly been accelerated during COVID and and so
Speaker 1: while women have on average been very busy during the pandemic,
Speaker 1: I have two little ones myself. The business is real.
Speaker 1: They just sunfortunately managed to make the space to develop
Speaker 1: these new skills, to prepare them to re enter the
Speaker 1: labor market and potentially to even re enter in newer
Speaker 1: and more rewarding positions. Are faster growing and more lucrative
Speaker 1: than their former roles. Um and you know, really meeting
Speaker 1: that increased demand for digital skills. Tell us about who
Speaker 1: has been taking cours, error courses and how that's different
Speaker 1: from what we saw pre pandemic, and how that's evolved,
Speaker 1: Like like who is the ideal you know, user of
Speaker 1: the product or typical I should say, not necessarily ideal typical. Yeah,
Speaker 1: so our learners are very heterogeneous. We actually have just
Speaker 1: shy of ninety million registered learners on the platform, including
Speaker 1: over sixteen million from the from the US, and I
Speaker 1: would say that during the pandemic, we've seen a couple
Speaker 1: of major shifts in the composition of those individuals, although
Speaker 1: they continue to be very diverse in their backgrounds and goals.
Speaker 1: And interests. One major change has been, as I mentioned earlier,
Speaker 1: UM disproportionately women joining the platform to learn across the board,
Speaker 1: but especially in STEM and preparing for digital jobs. And
Speaker 1: then the second big shift we've seen is increasingly folks
Speaker 1: coming to Corsera not just to upscale in their current role,
Speaker 1: but actually to prepare themselves to enter new jobs, including
Speaker 1: entry level digital jobs. I think things like, how do
Speaker 1: I become a Google I T support special, how do
Speaker 1: I become an entry level data analysts, social media marketer,
Speaker 1: a data engineer UM. You know, early days of Coursera,
Speaker 1: a lot of the folks who joined the platform with
Speaker 1: folks who already had advanced degrees, including graduate degrees. Now,
Speaker 1: increasingly we're seeing people coming in who are in blue
Speaker 1: color jobs. Their work is being disrupted with increased automation,
Speaker 1: and they're looking for UM that gateway certificate program that
Speaker 1: can really be their foot in the door to an
Speaker 1: entry level digital job. And that's been awesome to see.
Speaker 1: We serve A learners, we asked them about the outcomes
Speaker 1: they're experiencing. UM. The vast majority of report positive career
Speaker 1: outcomes improving their performance at work or selecting a new
Speaker 1: career path and where we see the strongest outcome is
Speaker 1: from those professional certificate programs, especially the entry level ones,
Speaker 1: which are again aimed at preparing folks for those entry
Speaker 1: level digitals. So a question about this, how much is
Speaker 1: this replacing people need to go back to professional schools.
Speaker 1: The reason I asked that is because we're sitting here
Speaker 1: in a country where so many people are saddled with
Speaker 1: so much student debt, and there's a lot of questions
Speaker 1: about whether we can recreate the model so that school
Speaker 1: training gaining skills is both more affordable and most useful
Speaker 1: for the workforce. So are people doing uh, professional certificate
Speaker 1: programs rather than going back to school? Absolutely, And you know,
Speaker 1: we actually have a range of learning programs from individual
Speaker 1: courses to professional certificate programs all the way up to
Speaker 1: full diploma bearing degrees. But you hit the nail on
Speaker 1: the head that it needs to be one affordable and
Speaker 1: then too flexible. Right in today's world, learning can and
Speaker 1: should be done on your own time. You can take
Speaker 1: a class from the world's best instructor as well you know,
Speaker 1: cooking dinner or driving the kids to the park. And
Speaker 1: when you have to do hands on applied learning, you
Speaker 1: know where you really need to be at a computer,
Speaker 1: you can also do that on your own time and
Speaker 1: whatever little talkts you can find for you. And so
Speaker 1: I do think a lot of it is is cost reduction,
Speaker 1: being able to access this without um going into serious
Speaker 1: debt um. But there's also a real component around being
Speaker 1: able to continue to live your life, keep your job,
Speaker 1: be with your family, and progress in your career through
Speaker 1: online learning that thank and unlock a future career opportunity.
Speaker 1: That's Coursera's VP of Data Science, Dr Emily sans So
Speaker 1: to come on at Bloomberg Business Week. Back to school
Speaker 1: means it's time for back to school shopping. We're gonna
Speaker 1: hear from the CEO of lands End. This is Bloomberg
Speaker 1: Broadcasting from the financial capital of the World, Bloomberg eleven
Speaker 1: Frio in New York to Washington, d C. Bloomberg to Boston,
Speaker 1: Bloomberg one, O six one to San Francisco, Bloomberg nine
Speaker 1: to the country Sirius XM Chamber one nine and around
Speaker 1: the globe the Bloomberg Business and Bloomberg Radio dot Com.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes, Tim Stenovan on Bloomberg Radio. Lands End sees
Speaker 1: sales rebounding his in person classes resume, underscoring the broad
Speaker 1: strength that retailers are seeing in the crucial back to
Speaker 1: school shopping season. Jerome Griffith, the CEO of lands End,
Speaker 1: joined Ed Ludlow and me this week to give us
Speaker 1: an update on supply chain challenges and how the company
Speaker 1: has had to raise wages to find workers even prior
Speaker 1: to the pandemic. One of the things we wanted to
Speaker 1: do was to sort of spread the risk we have
Speaker 1: been producing about our products out of China up going
Speaker 1: into and we get to to expand that out into
Speaker 1: other countries so that we weren't really dependent so much
Speaker 1: on one country at all. What's happened to us over
Speaker 1: the course of the last let's a year to year
Speaker 1: and a half is that products getting into the States
Speaker 1: have started to slow down dramatically and costs have really risen,
Speaker 1: not just costs on shipping, but costs on raw materials.
Speaker 1: So you see cotton costs and we do a lot
Speaker 1: of cotton um rising pretty significantly, But then you look
Speaker 1: at just the cost of shipping things from any country here,
Speaker 1: whereas containers three years ago, we're costing around four thousand
Speaker 1: dollars a container. The last six months, they have been
Speaker 1: up in the twelve of the fifteen thousand dollar arrange,
Speaker 1: and I've heard quotes as high as twenty five dollars
Speaker 1: for a container. And the same things happened with airshipping,
Speaker 1: not that we ship a lot by air, but but
Speaker 1: those costs have been going up as well. So you know,
Speaker 1: we will continue to look at expanding our network to
Speaker 1: make sure that we have a little bit more options
Speaker 1: than than just going to one, two or three different
Speaker 1: places in order to get get products made and shipped.
Speaker 1: Such a pleasure to have you US. I love speaking
Speaker 1: to the retailers because you you have such a lens
Speaker 1: into what's going on in our US and global economy.
Speaker 1: You know, supply chain one thing. I want to talk
Speaker 1: a little bit about the labor market. You know how
Speaker 1: it lands end dealing with a pretty tight labor market.
Speaker 1: I mean, how are you staffing stores, facilities? You guys
Speaker 1: seem to be seeing some growth now in e commerce.
Speaker 1: What is the priority for hiring? E commerce really runs
Speaker 1: out of our corporate office, and that's of our business.
Speaker 1: So that's been running along relatively well. UM for the
Speaker 1: last two years, our core businesses, our US direct e
Speaker 1: commerce business, and then if the ad on the international
Speaker 1: businesses and the B two B businesses which we do
Speaker 1: online UH, it creates you know, quite a large, large
Speaker 1: annual volume what's happening with with these businesses. And we've
Speaker 1: been able to hire people because you know, we're an
Speaker 1: interesting company and the company is also doing well, so
Speaker 1: you know, that tends to attract people. Where we've where
Speaker 1: we struggle somewhat is just logistically how we ship goods
Speaker 1: out to UH customers. We are based in Wisconsin. We
Speaker 1: have three major facilities there and we're a major employer
Speaker 1: in southern Wisconsin. What you've seen with the labor market
Speaker 1: as of the last six to nine months is people
Speaker 1: aren't working as much, so it's been very difficult to
Speaker 1: entice people. We've given two raises so far this year.
Speaker 1: We've put on peak peak incentives for people to come
Speaker 1: into work, and we've had people working, you know, over
Speaker 1: time just to get the goods out the door. What
Speaker 1: we're we have just made it through our back to
Speaker 1: school peak, which actually worked out okay for us, and
Speaker 1: we'll be going into another hiring phase and it will
Speaker 1: be determined. You know, what of the people that have
Speaker 1: been getting unemployment and staying home are going to be
Speaker 1: ready to come back to work for the unemployment stops?
Speaker 1: Do you think they will be the day in most places?
Speaker 1: I think so and I hope so. But I have
Speaker 1: learned in the last year that I don't know when
Speaker 1: you say you've had to raise wages twice, what are
Speaker 1: we talking about here? Where are they right now? Depends
Speaker 1: on your your average. We've raised raised them through between
Speaker 1: three and four percent in May and another percent and
Speaker 1: a half just this past month. Um and obviously starting
Speaker 1: salaries are over fifteen bucks. So you know, we've been
Speaker 1: doing the right thing by the market. Uh, And the
Speaker 1: market really dictates, you know, what you need to do
Speaker 1: for the people who have been with you for a
Speaker 1: long time. Because we're a fifty eight year old company.
Speaker 1: You know, we've had we've had people that have worked
Speaker 1: for us for thirty five years, and you know, very
Speaker 1: loyal employees, and you want to make sure that they're happy. Sure,
Speaker 1: I'm a brit acclimatizing into life in the United States,
Speaker 1: so I kind of asked this hesitantly, But should we
Speaker 1: talk about the holiday season? Jost approaching. Everyone keeps telling
Speaker 1: me fast approaching the holiday season. How's it looking from
Speaker 1: your perspective? I think the holiday season is going to
Speaker 1: depending on getting goods here. Um. You know, this would
Speaker 1: be my forty three Christmas since I graduated college, and
Speaker 1: everyone gets just a little bit harder. But um, what
Speaker 1: we think, And you know, we've seen pretty good demand
Speaker 1: coming up until now, we haven't seen a huge slowdown
Speaker 1: in demand. We think the man is still going to
Speaker 1: be there and every year, you know, it ends up
Speaker 1: coming coming around because people always end up going out
Speaker 1: shopping for for Christmas. I think the people that are
Speaker 1: going to win, and this is our mentality, are the
Speaker 1: people that service the customer. If you're servicing the customer,
Speaker 1: you'll win. Yes, maybe your cost might be a bit higher,
Speaker 1: but as long as you can serve as a customer
Speaker 1: and keep them happy and keep them coming back, you'll
Speaker 1: continue to win. As a brand. How early do you
Speaker 1: want consumers to order from you for the holiday season?
Speaker 1: You know people start now. Uh. And we saw it
Speaker 1: last year, and we saw it for back to school
Speaker 1: this year. You know, people started early, ordering early and
Speaker 1: back to school and they started ordering more. UH. And
Speaker 1: my sense is the same thing is going to happen
Speaker 1: this year, is that people will shop early and they'll
Speaker 1: want to buy more because they've had ten up demand
Speaker 1: and they have good savings right now and people will
Speaker 1: want to spend. That's Lands and CEO Jerome Griffith. You're
Speaker 1: listening to Bloomberg Business Week. Coming up, we're ending the
Speaker 1: week with a beer and a look at how the
Speaker 1: booze industry is working on gender diversity. We hear from
Speaker 1: the head of Heineken USA, Maggie Timeny. That's next. This
Speaker 1: is Bloomberg. You're listening to Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes Tim Stinovich from Bloomberg Radio.
Speaker 1: Here at Bloomberg Business Week, we we talk a lot
Speaker 1: about and we record a lot about gender equity when
Speaker 1: it comes to representation at the top companies in the
Speaker 1: United States, and that's the top companies in the world. Well,
Speaker 1: the gender diversity in the alcoholic beverage industry has historically
Speaker 1: been not so good. It's been male dominated. But one
Speaker 1: company is trying to shed a little light on that
Speaker 1: and changes that have been made in recent years. That
Speaker 1: company is Heineken U S a and we have Maggie
Speaker 1: Timony joining us, now chief executive officer of Heineken USA.
Speaker 1: She joins us on the phone from Connecticut. I was
Speaker 1: joined by my Bloomberg Quickday co host Katie Greifeld. So,
Speaker 1: Maggie Haneken USA has a new white paper out titled
Speaker 1: behind the Label Gender Diversity in the Alcoholic Beverage Industry.
Speaker 1: What prompted you to take a deep dive into this topic? Hi,
Speaker 1: tim how are you good? Afternoon greetings from Connecticut. Yes,
Speaker 1: we are. You know, I'm a woman, uh, and I've
Speaker 1: been in the alcohol beverage industry for many, many years
Speaker 1: and I looked around the room over the years and
Speaker 1: I don't see many diverse faces. So Heineken USA it
Speaker 1: took a leadership position on God with a cohort of
Speaker 1: senior females across alcohol beverage and we had a discussion
Speaker 1: and we said, you know, it's really incumbent upon us
Speaker 1: to highlight the path and pave the way for the
Speaker 1: future generations of women. And I think, you know, it's
Speaker 1: easy not to do anything to raise the profile of
Speaker 1: highlighting path for females and our in our future females
Speaker 1: in our industry. But we said it's incumbent upon us
Speaker 1: to take on that task and put it firmly on
Speaker 1: our shoulders. And so how do you do that? I mean,
Speaker 1: is that through recruitment or advancement for women already in
Speaker 1: the industry, or I imagine some combination. I think it's
Speaker 1: a combination that two things. You know, when consumers look
Speaker 1: at and the think about Heineken USA, they think about
Speaker 1: the brand, and the same with other outbad companies. So
Speaker 1: I think we need to ensure that we market the
Speaker 1: people behind the beverages and the actual industry behind behind
Speaker 1: the beverages. These are these are fully blown businesses with
Speaker 1: P and L's and breweries and marketing departments and finance
Speaker 1: departments and HR departments and sales departments, et cetera. That's
Speaker 1: number one, let's market our industry for others. Number two,
Speaker 1: we need to elevate our recruiting programs. We don't do
Speaker 1: enough to ensure that we have a breadth and depth
Speaker 1: and scope of coverage across you know, different universities, and
Speaker 1: to highlight in particular to females. You can have a
Speaker 1: big opportunity and alcohol beverage at the same time. Katy
Speaker 1: I think we also need to level the playing fields
Speaker 1: to ensure that we're very flexible in how we show
Speaker 1: up at work and where and where you can work.
Speaker 1: You can work from home, you can work from an office.
Speaker 1: We need to highlight that to all of our future talent.
Speaker 1: Give us some numbers here, Give us some data about
Speaker 1: what you found in the industry and how it compares
Speaker 1: to other industries, because I think it's fair to say
Speaker 1: there are many industries when it comes to the corporate
Speaker 1: world that are dominated by men. Yeah, when we look
Speaker 1: at the recent studies, the percentage of women and see
Speaker 1: sweet roles across the marketplace remains relatively smaller. We all
Speaker 1: know that it's sort of a tent. When we look
Speaker 1: at women and sea sweet roles and food and beverage,
Speaker 1: it's a little bit lower at twenty percent. However, we
Speaker 1: look at women and see seat rules and food and
Speaker 1: beverage distribution, it's just ten. And you know, I mean
Speaker 1: you look at generals the sweet roles, we know that
Speaker 1: it's dropped from two. So you know, we talk a
Speaker 1: lot about gender diversity and you know, females and their careers,
Speaker 1: but the numbers are showing that we're actually going in
Speaker 1: the wrong direction. So how do we sustainably bring these
Speaker 1: numbers up and kick them up and then build off
Speaker 1: that base. That's our challenge across all industries and in
Speaker 1: particular focus on outbets. And so, Maggie, you mentioned that
Speaker 1: the numbers are going in the wrong direction. I'm curious
Speaker 1: what role the pandemic played in that, because obviously it's
Speaker 1: been a while since myself has been at a at
Speaker 1: an in person conference just meeting people organically to network.
Speaker 1: How does that factor, and that we've all been virtual
Speaker 1: for really a year and a half. Yeah, I think,
Speaker 1: you know, if I would if I can link that
Speaker 1: a little bit to mentorship and ally ship. Um, you know,
Speaker 1: when you look at females in the workplace, we need
Speaker 1: to be more flexible because our female voice is not
Speaker 1: heard when you're not in the room. And I think
Speaker 1: being virtual has not helped females in terms of their
Speaker 1: progression or even staying in the workforce. So how do
Speaker 1: we move away from mentorship and and move towards ally
Speaker 1: ships so that when you're not in the room, somebody
Speaker 1: is speaking and your voice is heard v as somebody help,
Speaker 1: v as somebody else on your behalf and at Haneken USA.
Speaker 1: I just want to say that you've done we we
Speaker 1: you know, over ten years ago we launched the Women's
Speaker 1: Leadership Forum. We have forty eight percent females at Heineken
Speaker 1: USA and globally for Heineken, we're looking to increase to
Speaker 1: thirty percent female of females in leadership positions senior leadership
Speaker 1: positions by twenty thirty. We have made that commitment. What's
Speaker 1: interesting because I look at your website and in preparation
Speaker 1: for this interview, and something sticks out to me. Um
Speaker 1: brands that are about substance rather than status, social rather
Speaker 1: than exclusive, personalized rather than mass. That's what you consider
Speaker 1: your portfolio of quote upscale international brands. I'm wondering how
Speaker 1: this report dovetails with the identity that you want consumers
Speaker 1: to have when they pick up a Heineken or when
Speaker 1: they pick up a dose a Keise or an Arizona
Speaker 1: Sunrise Heart Seltzer or one of your emerging brands. You know,
Speaker 1: and let mean you know we are a family owned company,
Speaker 1: Heineken globally and I'm not sure if you know this
Speaker 1: to him, but we are majority owned by the Heineken
Speaker 1: family and Charlie Heineken is our is, our owner and
Speaker 1: our founders. So we we put a lot of focus
Speaker 1: and we put our money where our motives when it
Speaker 1: comes to gender diversity and inclusion and diversity globally at Heineken,
Speaker 1: so we ensure that our advertising include diverse consumers. Because
Speaker 1: our brands are consumed by their first consumers. We ensure
Speaker 1: that our agencies are diverse. We ensured that the communities
Speaker 1: in which we operate that we give we provided diverse
Speaker 1: lens to all of the philanthropic efforts that we make.
Speaker 1: And so, Maggie, Heineken you know, matches its words with actions.
Speaker 1: But again I keep going back to your point that
Speaker 1: at an industry wide level, the numbers are going the
Speaker 1: wrong wrong way, the gender disparity is getting worse. How
Speaker 1: does that reverse? What would be the catalyst to to
Speaker 1: actually make the numbers go in the right direction? And
Speaker 1: how long might that take? You know what? It really
Speaker 1: could take a long time, Which is why were we
Speaker 1: at Heineken USA, together with other across the industry, other
Speaker 1: senior females are launching this campaign to look behind the label.
Speaker 1: We want to showcase our industry two people to consumers
Speaker 1: to showcase swat what's behind the beer they're drinking, what's
Speaker 1: behind the wine they're drinking, what's behind the spirit spirit
Speaker 1: they're drinking because there's a There's a lot of fantastic
Speaker 1: people who love this beautiful industry, and I were so
Speaker 1: proud to work for this industry, and many who have
Speaker 1: left the industry always say, oh God, I really want
Speaker 1: to go back, so behind the label. Our first chapter
Speaker 1: in our book is to showcase the people behind the
Speaker 1: industry so that our consumers and society at large can
Speaker 1: look and say, I admire that industry and I want
Speaker 1: to work there. I want to talk a little bit
Speaker 1: more about the business and get an update on you
Speaker 1: from the business. Many people may not know that Heineken
Speaker 1: USA is the parent company of Red Stripes, Strong Boat, Tiger,
Speaker 1: and Still Light, among many other beers and and spirits.
Speaker 1: I wonder about emerging areas. I wonder about innovation. Where
Speaker 1: are you really bullish? Where are you seeing growth? You know?
Speaker 1: I think, um, you know, years and years and years ago,
Speaker 1: it was the bigger brand, largers and consumers were happy
Speaker 1: with that. I think with the advent of social media
Speaker 1: and there are really no boundaries between countries anymore. You know,
Speaker 1: there's no geographic boundaries because people are on the phone, iPad,
Speaker 1: surfing the nest and and they're experiencing brands in different ways,
Speaker 1: and and people can say, well, that is that a
Speaker 1: big challenge. That's really that's really an opportunity that we
Speaker 1: can take our global brands from around the world and
Speaker 1: have them show up for our consumers in their locale
Speaker 1: and how our consumers want them to do. Out number one,
Speaker 1: number two, we have a huge opportunity to innovate. The
Speaker 1: lines for consumers are very very blurred and what they're
Speaker 1: looking for in the product, whether it's be lower calorie,
Speaker 1: lower alcohol, or what their own Heineken zero points there
Speaker 1: are no alcohol. We need to ensure that we are
Speaker 1: innovating and innovating at speed and being extremely agile and
Speaker 1: nimble to deliver for comes for our consumers what they want.
Speaker 1: And consumers today Tim and Katie are very promiscuous. They're
Speaker 1: going to try a plethora of different products, and we
Speaker 1: need to make sure that we are adapting and being
Speaker 1: fast to market to satisfy those consumer needs. Hey, just
Speaker 1: in the last thirty seconds we have with you, Maggie,
Speaker 1: you pique my interest when you talked about the no
Speaker 1: alcohol beer, the Heineken version of that, what type of
Speaker 1: growth are you seeing there, because we have spoken recently
Speaker 1: to the CEO and founder of Athletic Brewing who's raised
Speaker 1: a lot of venture capital money and sees growth just
Speaker 1: off the charts in about twenty seconds. Yeah, we come.
Speaker 1: We we are still seeing in your three double digit growth,
Speaker 1: high double digit growth um and a lot of new
Speaker 1: consumers actually coming into the beer category. And it was
Speaker 1: just fantastic that week that our brewers took twenty years
Speaker 1: to develop what I think is the perfect product, Heineken
Speaker 1: zero zero. Please, if you haven't, try to go out
Speaker 1: and try it. It is phenomenal. That's Maggie Timony, the
Speaker 1: head of Heineken USA. And that wraps up the weekend
Speaker 1: edition of Bloomberg Business Week from Bloomberg Radio. Thanks so
Speaker 1: much for joining us. I'm Tim Stanovic. Be sure to
Speaker 1: tune into our Bloomberg Business Week Daily show. It airs
Speaker 1: Monday through Friday and starts at two pm Wall Street
Speaker 1: Time on Bloomberg Radio. You can also watch our daily
Speaker 1: broadcast on YouTube. Just search Bloomberg Global News. Also check
Speaker 1: out our Bloomberg Business Week podcast. You can find it
Speaker 1: at Bloomberg dot com, Apple, or wherever you get your podcasts.
Speaker 1: Bloomberg Business Week is available on newsstands, now, at bloomberg
Speaker 1: dot com and on the Bloomberg Terminal. You can also
Speaker 1: see me at Bloomberg. Quick Take available on bloomberg dot com,
Speaker 1: slash Qt, and streaming platforms like Roku, Apple TV, Samsung
Speaker 1: TV and more. Have a great weekend. This is Bloomberg.