Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stinovan from Bloomberg Radio. Hi'm Carol Messer
Speaker 1: and I'm Tim Stenovk of Bloomberg Quick Take. Welcome to
Speaker 1: the weekend edition of Bloomberg Business Week, Week forty eight.
Speaker 1: Working from homest but who's counting, Carol for so many
Speaker 1: I guess apparently I am. We were at Bloomberg headquarters
Speaker 1: in New York City, and man, it was a week
Speaker 1: tim where there were so many cryptocurrency headlines. This week
Speaker 1: we're going to talk about that and what's going on
Speaker 1: with bitcoin and all of those cryptocurrencies with former f
Speaker 1: d i C chair Sheila Bear. And we're also talking toys.
Speaker 1: Looking forward to hearing about how Mattel is creating more
Speaker 1: culturally relevant toys and also just what a good year
Speaker 1: was for the company. Yeah, big time. Also, so many
Speaker 1: of us can't wait to get on a plane again.
Speaker 1: I cannot wait for work for fun, We've got the
Speaker 1: outlook for travel. I mean, I'm excited to go somewhere.
Speaker 1: I don't really want to sit on a plane again. No,
Speaker 1: I don't miss being in airports. I don't miss being
Speaker 1: on airplanes, but I miss going places airports, walking around.
Speaker 1: We're gonna hear from the CEO of Trovago all of
Speaker 1: that to come. We begin, though, with an interesting interview
Speaker 1: this week and Tim, it's around COVID. It's one company
Speaker 1: that actually made some news this week. We're talking about
Speaker 1: Tonics Pharmaceuticals share surging this week and really this year.
Speaker 1: You might recall the stock was the target of day
Speaker 1: traders last month, touting the company on message boards for
Speaker 1: no apparent reason, as Bloomberg reported, Well, this week the
Speaker 1: stock shooting up on news that it's developing a COVID
Speaker 1: nineteen antibody skin test. Yeah, it really caught investors attention.
Speaker 1: This was a really interesting interview. We both really liked it. Tonics,
Speaker 1: by the way, also working on a COVID vaccine, and
Speaker 1: that's where we started the interview. We're developing a vaccine
Speaker 1: primarily that stimulates T cell immunity. It's based on a
Speaker 1: live viral factor that's called Horsebox, and it's a one
Speaker 1: shot vaccine that we believe from historical parallels, could provide
Speaker 1: decades of protection. We have monkey data supporting the vaccine,
Speaker 1: so we were very happy when we in ounced that
Speaker 1: we're developing a skin test that will measure T sell
Speaker 1: immunity to COVID, and we think that this is important
Speaker 1: because there are two arms of the immune system, antibodies
Speaker 1: and T cells. Antibodies are transient. They can be measured
Speaker 1: for maybe three or six months. The T cells last
Speaker 1: for years or decades, So we think it will be
Speaker 1: very important to figure out how many people have T
Speaker 1: cell immunity instead of just the antibody test. How long
Speaker 1: do you think that will stick or I mean, how
Speaker 1: long do you think we will have to know this?
Speaker 1: I mean I'm thinking about this in the context of
Speaker 1: right us being on the other side of this pandemic
Speaker 1: at some point, But how many more years do you
Speaker 1: envision us actually needing to get tested for immunity. Well, unfortunately,
Speaker 1: I think that COVID is here to stay. I think
Speaker 1: it's the majority opinion of people that have experts that
Speaker 1: COVID will become endemic after Okay, I just want to
Speaker 1: make sure I understand this here to stay. We've only
Speaker 1: eradicated one one thing, and that is smallpox in around
Speaker 1: the world. Smallpox, we were very fortunate was eradicated because
Speaker 1: it was extremely deadly thirty of infected people died. But
Speaker 1: part of the success of smallpox eradication was the vaccine
Speaker 1: that was used. And the other part of the success
Speaker 1: with smallpox vaccination was that there were no animal reservoirs,
Speaker 1: And by animal reservoirs, I mean that no other non
Speaker 1: human animals got infected with it. With covid, we already
Speaker 1: know that's not the case. Manx, hamsters, tigers, a variety
Speaker 1: of different animals get so it's very unfortunately unlikely that
Speaker 1: this might be eradicated. So I think that the solution
Speaker 1: long term will be childhood immunization in the same way
Speaker 1: that we immunize for MMR measos moms and rebella. We
Speaker 1: probably will go to a system of immunizing children, and
Speaker 1: that's why we think of vaccine like ours, a live
Speaker 1: replicating vaccine which can provide years and decades of protection,
Speaker 1: is the best solution for that post pandemic covid problem. UM.
Speaker 1: But it wouldn't be infants, because a lot of viral
Speaker 1: vaccine is for UM. You know, in the case of smallpox,
Speaker 1: it was administered to children about five years old or so,
Speaker 1: but not not for infants. But yes, I think that
Speaker 1: that would be the plan. But clearly, first we have
Speaker 1: to get out of the pandemic. And for this, I
Speaker 1: think we're all extremely grateful to people who have quickly
Speaker 1: developed these vaccines, the MR and A vaccines and maybe
Speaker 1: now these at A valuous vaccines. Uh. They definitely have
Speaker 1: an incredibly important role and I can't wait to get mine.
Speaker 1: So you know, first we have to put out this
Speaker 1: fire and then we can go to more durable solutions.
Speaker 1: So and forgive me, I just want to go back
Speaker 1: to because I know and just reading in before you
Speaker 1: are coming on, and I know you are working on
Speaker 1: the vaccine, But what about this skin test, because it
Speaker 1: does seem like investors are very enthusiastic. Are they wrong
Speaker 1: to be so enthusiastic about that and not focus on
Speaker 1: the vaccine instead? The skin tests is very important. I
Speaker 1: was mentioning the vaccine because it tells a little bit
Speaker 1: of this story about how we got to the skin test.
Speaker 1: But the skin test is very important because we really
Speaker 1: don't know how many people have immunity and we can't
Speaker 1: measure it. So there are many cases, for example, where
Speaker 1: there's a husband or wife and one of the spouse
Speaker 1: who gets infected the other cares for them, but for example,
Speaker 1: the caregiver frequently doesn't get sick, doesn't develop antibodies, etcetera.
Speaker 1: We believe that a number of these cases actually T
Speaker 1: cell immunity develops without antibodies. There it's now known by
Speaker 1: much more complicated laboratory techniques that T cell immunity is
Speaker 1: protective of developing serious disease. So we just think this
Speaker 1: skin test is important, and we think the excitement is
Speaker 1: justified because we would really get a better handle on
Speaker 1: how much T cell immunity is in the population. We're
Speaker 1: going to be in human trials with both of them,
Speaker 1: we believe this year. But I think in terms of,
Speaker 1: you know, getting out beyond trials hopefully, Tim's got to say,
Speaker 1: it feels like a long time away, at least right now,
Speaker 1: and it is. They're also a reminder that we're gonna
Speaker 1: ultimately need multiple vaccines to get ahead of all of this.
Speaker 1: That was Tonics Pharmaceuticals co founder, CEO and chairman Dr
Speaker 1: Seth Ledderman. Coming up. Also in the news this week,
Speaker 1: Coco Bitcoin. We check in with a former banking regulator
Speaker 1: who's not a fan. You're listening to Bloomberg Business Week
Speaker 1: this is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes. Tim Stillavan from Bloomberg Radio.
Speaker 1: Another big story this week bitcoin and cryptocurrencies. Bitcoin jumping
Speaker 1: to a record high after a MasterCard and Make of
Speaker 1: New York mill and moved to make it easier for
Speaker 1: customers to use cryptocurrencies. Felt like the global corporate community,
Speaker 1: Tim was all of a sudden weighing in on bitcoin
Speaker 1: and cryptocurrencies. Yeah, did it really felt like Monday morning
Speaker 1: was a turning point. It's when we learned from a
Speaker 1: Tesla regulatory filing that the company would hold one point
Speaker 1: five billion dollars of the cryptocurrency on its balance sheet.
Speaker 1: Also in crypto news, Elon Musk saying that he quote
Speaker 1: bought some doge coin for lile x. That's his son,
Speaker 1: right it is? And I gotta say to the water
Speaker 1: Bloomberg Galaxy Crypto index touching a record as well. Everyone
Speaker 1: everyone talking about crypto this week, although Tim, I kind
Speaker 1: of say not everybody is a fan. Yeah. Bank of
Speaker 1: Canada said that cryptocurrency boom is speculative mania. And Carol,
Speaker 1: you caught up with Sheila Bear, former head of the
Speaker 1: fdi see, who was there during the two thousand eight
Speaker 1: Finefel crisis along with Bloomberg News Wall Street recorder Shanali
Speaker 1: boss Sheilabert doesn't see bitcoin replacing the dollar at least
Speaker 1: anytime soon. First, let me say I'm expressing my individual views.
Speaker 1: I'm not speaking for any any companies have affiliated with
Speaker 1: and uh, you know, I think, Look, I don't I
Speaker 1: don't give a financial advice. I can tell you my
Speaker 1: personal uh bilosophy on this is that you know, stay
Speaker 1: away from it. It's it's volatile. Uh, it's a nose
Speaker 1: lead levels. Now we don't know how sustainable that is. Uh.
Speaker 1: You know, if if you're a very wealthy person with
Speaker 1: some some money to risk, fine, But now I don't
Speaker 1: have a lot of confidence in it. I mean the
Speaker 1: problem bitcoin is it is so volatile, right, So it's
Speaker 1: original promises a as a method of payment. Really it's
Speaker 1: volatility gets in the way of its usefulness as a
Speaker 1: method of payment. I mean there's some if you're if
Speaker 1: you're buying a very expensive car, maybe you know, I
Speaker 1: guess that's the idea of test lab. But I'm skeptical.
Speaker 1: I've always been more interest to the technology that underpins
Speaker 1: bitcoint as opposed to the bitcoin itself. I think blockchain
Speaker 1: distributed ledger technology has a whole host of use cases
Speaker 1: that can make our financial system much more inclusive, much
Speaker 1: more efficient, um well less costly. Uh. And so that's
Speaker 1: that's where I think people should be focusing in terms
Speaker 1: of finding real value about that for a second, more specifically,
Speaker 1: I was very surprised to hear you say that about bitcoin,
Speaker 1: because I have heard you talk about how digital currency
Speaker 1: could have done more during this pandemic to get money
Speaker 1: to people who needed it. How far the way do
Speaker 1: you think our financial system is from that? Actually that
Speaker 1: sort of thing actually happening, right, So I was speaking. So,
Speaker 1: there are lots of different cryptocurrencies. Bitcoin is the granddaddy
Speaker 1: of them all. Uh. It's a lot of hype around
Speaker 1: a lot of nostalgia, a lot of romance around it.
Speaker 1: But when I spoke of I was talking about stable coins.
Speaker 1: There are a cryptocurrency that is that is tied to
Speaker 1: the dollar. Disclosure. I'm on the board of a company
Speaker 1: that that offers a stable coin that that is like that.
Speaker 1: It's a dollar for dollar collateralized. You give a dollar
Speaker 1: to the company, it goes into an f d I
Speaker 1: c ensured bank account or a short term treasury. You're
Speaker 1: issued a dollar of cryptocurrency representing that that maintains stable
Speaker 1: value because it's fully collateralized and tethered to the fiat
Speaker 1: currency of the US dollar. So if those and there
Speaker 1: are other companies that offer there, there's a possibility that
Speaker 1: fed through a central bank digital COURTNESY could digitize a
Speaker 1: dollar as well. But that's what I was talking about,
Speaker 1: not using bitcoin, but using a crypto version of the
Speaker 1: dollar tethered to the dollar so maintain stable value. That's
Speaker 1: interesting because there's a ton of people out there who
Speaker 1: invest in bitcoin that don't believe in the dollar, that
Speaker 1: don't believe in the current financial system as we have it.
Speaker 1: What would you say to those people? Well, I would
Speaker 1: say I believes in the dollar a lot more than
Speaker 1: I believe in bigcoin and holding value. Uh you know,
Speaker 1: look I I people would know me. Know. I've been
Speaker 1: a critic of the highly aggressive monetary policies we have.
Speaker 1: We have pursuits as a great financial crisis. Uh, it's
Speaker 1: not manifests itself an inflation. We've got an asset inflation.
Speaker 1: It's got some very other unpleasant side effects in terms
Speaker 1: of the build up of leverage, uh, inflated financial asset values.
Speaker 1: So I you know, I'm not in love with the
Speaker 1: with the monastery highlight commodated monetary policies we have pursued.
Speaker 1: But even given that, Yeah, now I would, I would
Speaker 1: have a lot more confidence Santigolo than I would in
Speaker 1: big coin. Again, it's speculative, it is volatile. Uh, understand it,
Speaker 1: don't you know, buy it unless you can, you know,
Speaker 1: withstand significant losses because it goes up. But it goes
Speaker 1: down to what about other countries? Right? We know China's
Speaker 1: racing to do a digital currency. If the US doesn't
Speaker 1: catch up, what's at risk for US here? Well, that's
Speaker 1: a good point. And again, the China's central bank currency
Speaker 1: is tied to the r m B. It's tied to
Speaker 1: their own fiat currency, so they're or not. They're not
Speaker 1: using bitcoin to do this, They're using a cryptographic version
Speaker 1: of their own. There are the R and B. So yeah,
Speaker 1: and I think most observers think that part of the well,
Speaker 1: there's some privacy issues around the China's use of cryptocurrency,
Speaker 1: because you can so the goodness and the badness. You
Speaker 1: can really you've got a you know, a very clean
Speaker 1: trail of transactions. So there's privacy issues around that that
Speaker 1: may be good if for law enforcement purposes, it may
Speaker 1: be bad for privacy, but but also yeah, I think
Speaker 1: a lot of observers think China wants to become the
Speaker 1: reserve currency, eventually the world's reserve currency. And if you have,
Speaker 1: if you have, if you have digitized your own fiat currency,
Speaker 1: going into these developing countries where they're already heavily involved,
Speaker 1: they have unstable currencies, it's very easy to get those
Speaker 1: countries to adopt the digital version of your own fiat currency.
Speaker 1: Something we wanted to ask you about Chila is we
Speaker 1: heard from FED Chief J. Powell. He said, workers, small,
Speaker 1: all businesses, they still need continued support. You have been
Speaker 1: very vocal about wealth inequality and the need for many
Speaker 1: US families to build financial security. Um, what do we
Speaker 1: need to make sure with this latest COVID relief package?
Speaker 1: All right, Well, I think it's it's right to focus
Speaker 1: on household payments, and people of good will can say
Speaker 1: it was a fifty thousand, seventy five thousand, uh, but
Speaker 1: I think they need to be sizeable payments and that
Speaker 1: needs you know they're using fiscal policy. Who can get
Speaker 1: the money directly into into household budgets where it can
Speaker 1: be saved, It could be used to pay down debt,
Speaker 1: or could be used to spent. Any of those are
Speaker 1: good uses of money. UM. You know, the wealth inequality
Speaker 1: since the Great Financial Crisis really has gotten much much worse.
Speaker 1: Low bit of income of families UM have been saving more,
Speaker 1: but there's still their ability to build wealth has paid
Speaker 1: in comparison to the three top issial on the society
Speaker 1: which has benefited so highly from the monetary policy we're
Speaker 1: talking about earlier and inflating financial last note, so they
Speaker 1: need more financial security. So if the money saved, that's
Speaker 1: a good thing too. If it gives them more financial security,
Speaker 1: they spend it. That helps the economy. So I think
Speaker 1: that should first and form must be the top priority.
Speaker 1: Continued supplemental unemployment benefits again, a direct household support is important. UM.
Speaker 1: I think the uh those are how I prioritize it.
Speaker 1: There's controversy around to help state local governments. We have
Speaker 1: definitely seen that to be the case. That was former
Speaker 1: head of the fdi C. She lived there along with
Speaker 1: Bloomberg News Wall Street reporter Shinali Bassik. The full conversation
Speaker 1: can be found on our podcast feed at Bloomberg dot com.
Speaker 1: She'll addressed the responsibility that banks have to minority communities.
Speaker 1: Next hour, we'll hear more about that with the founder
Speaker 1: and CEO of Runway, which is looking to close the
Speaker 1: racial wealth gap for good, and Tim speaking of race
Speaker 1: and culture still ahead in roads towards inclusivity. We're going
Speaker 1: to check in with the Mattel's CEO on creating culturally
Speaker 1: relevant toys. That and an update on the company's strong,
Speaker 1: really strong fourth Warner is Bloomberg. This is Bloomberg Business
Speaker 1: Week with Carol Masser and Bloomberg Quick Takes Tim Steinovy
Speaker 1: from Bloomberg Radio. So, Tim, quarterly earning season in the US, Yeah,
Speaker 1: it's largely over. We still heard though, from some well
Speaker 1: known companies and big brands throughout the week. One in particular,
Speaker 1: Mattel they had a really, really strong fourth quarter. Yeah.
Speaker 1: You know, we hear a lot about trends during the pandemic,
Speaker 1: but nothing more puts a smile on my face than
Speaker 1: the image of grandparents and parents buying their kids toys
Speaker 1: because they're they're stuck inside and they want their kids
Speaker 1: to be able to do stuff. That was kind of
Speaker 1: an interesting storyline at Yeah, exactly and the toymaker specifically
Speaker 1: Mattel surpassing Alice estimates during that fourth quarter, they had
Speaker 1: its best performance in years. Listen, e commerce was up,
Speaker 1: dolls and more really leading the way at the company. Well, Carol,
Speaker 1: you caught up with Mattel chairman and CEO E Non Cries.
Speaker 1: That's right, and we kicked it off with talking about
Speaker 1: the company's performance. This was an exceptional quarter for Mattel
Speaker 1: without best performance and years, really driven by strong consumer
Speaker 1: demands and another mile stool year for the company. For
Speaker 1: the second quarter in a row, we achieved double digit
Speaker 1: sales growth, outpaced the industry, and gained share on a
Speaker 1: global basis. You know, our results really exceeded expectation on
Speaker 1: on pretty much across the board, with the highest fourth
Speaker 1: quarter growth in fifteen years and a significant increase in
Speaker 1: profitability with fullier operating income that was twoing a half
Speaker 1: times higher than last year. But this is not just
Speaker 1: about the quarter or the year. It's about a multi
Speaker 1: year ten around that is tracking very well, which puts
Speaker 1: us in a strong position to continue to increase profitability
Speaker 1: and accelerate growth in one and beyond. You know, talk
Speaker 1: to us about that because you know, reading through some
Speaker 1: of the research and uh, there are you know folks saying, well, listen,
Speaker 1: it's really because of the pandemic. Families our home, they've
Speaker 1: had a fine different ways to spend time with their families, games,
Speaker 1: you name it, and kids, you know, being at home
Speaker 1: that parents are spending a lot more on toys. Talk
Speaker 1: to us a little bit about what you have been
Speaker 1: doing and your team have been doing at Mattel to
Speaker 1: really kind of juice some of the brands that have
Speaker 1: been you know, that have been in your portfolio for
Speaker 1: for a long time. You know, there's no question that COVID,
Speaker 1: the COVID lockdown drove strong demand for toys. Uh, and
Speaker 1: the year ended up seeing extraordinary growth for the industry.
Speaker 1: You know, the toy industry proved its resilience, is that
Speaker 1: it's a strategic category for retailers, and it highlighted the
Speaker 1: importance of play. But the demand driven by COVID, however,
Speaker 1: is difficult to quantify, as the industry was projected to
Speaker 1: grow even before the pandemic, and we've believed that much
Speaker 1: of our overall performance has been driven by the work
Speaker 1: of our organization and by the strength of our brands
Speaker 1: and quality of our products. We didn't just right the wave.
Speaker 1: We outpaced the industry and gain share on a global
Speaker 1: basis in the third quarter, the fourth quarter and the
Speaker 1: full year. In the US, our growth rate in the
Speaker 1: fourth quarter was one point three times higher than the industry.
Speaker 1: In Europe we grew five times more than the industry,
Speaker 1: and in Latin America we continue to gain share in
Speaker 1: the quarter and for the full year. So you know,
Speaker 1: we re lived the categories where we are a global leader.
Speaker 1: Vehicles and infant of the pre school will continue to
Speaker 1: perform well, and we expect to accelerate the growth and
Speaker 1: increase overall share. We'll talk to me about some of
Speaker 1: the brands. Listen, I have grown up with Mattel. I'm
Speaker 1: from a large family, you know. Inheriting my older sisters,
Speaker 1: Barbies was a big thing. And then I've got a
Speaker 1: seventeen year old where I've Bitty Baby Kit, Marie Grace.
Speaker 1: These were all throughout my home. Um, so tell me
Speaker 1: a little bit about some of the brands. Talk to
Speaker 1: me about Barbie, Talk to me about Hot Whales, Talk
Speaker 1: to me about American Girl and then games what what
Speaker 1: what kind of growth have you seen? This was a
Speaker 1: very exciting quarter for all of our ends. Barbie continue
Speaker 1: to go from strength to strength, up eighteen p in
Speaker 1: the quarter and for the year, with retail sales up
Speaker 1: more than thirty Bobbie ended up being the overall number
Speaker 1: one toy property globally for the industry both in the
Speaker 1: fourth quarter and full year. The Barbie Dreamhouse was the
Speaker 1: number one toy in the US in the fourth quarter
Speaker 1: and the full year. Had one of those in my house.
Speaker 1: I had one of those in my house a year,
Speaker 1: so you know exactly what I'm talking about. Yeah, yeah,
Speaker 1: So it's been really you know, an incredible monta year
Speaker 1: journey for Barbie, um carrying the flag for diversity and
Speaker 1: plusivity and purposeful play. But you know what what is um,
Speaker 1: what is interesting is that you know, without taking anything
Speaker 1: away from the incredible success of Barbie, this is you know,
Speaker 1: very much a story about the matel playbook because the
Speaker 1: Barbie success is driven by the same methodology, same capabilities, uh,
Speaker 1: same approach um that we is that we applied across
Speaker 1: our entire product offering meaning about brand. So it's about brand, purpose, design,
Speaker 1: lead innovation, cultural relevance, and execution of accident. You know, Tim,
Speaker 1: we're definitely seeing and hearing a lot more companies listening
Speaker 1: to consumers in the broader society about what's going on
Speaker 1: and staying relevant and trying to be much more culturally
Speaker 1: sensitive when it comes to their products. That was Mattel
Speaker 1: chairman and CEO E Non cries. You're listening to Bloomberg
Speaker 1: Business Week. Up next to explanate the boarding process, We're
Speaker 1: going to ask that you please step out of the
Speaker 1: alb once you have found your assigned feet abcre on
Speaker 1: your right, d E N upper on the leaf. Well,
Speaker 1: so many of us can't wait to hear that sound again.
Speaker 1: And when will we be regularly hopping on planes? We'll
Speaker 1: check in with Tree Bago CEO Axel Heifer. This is Bloomberg.
Speaker 1: This is bloom Bird Business Week with Carol Measure and
Speaker 1: Bloomberg Quick Takes. Tim Stillavan from Bloomberg Radio Traveling. Tim, Uh,
Speaker 1: what's the last time you got on a plane for
Speaker 1: a vacation. I know exactly when because I've been thinking
Speaker 1: about it a lot. I went skiing at the end
Speaker 1: of February early March last year, and that was the
Speaker 1: last time I went on a vacation. It's a long time,
Speaker 1: I know. I think I traveled around the Super Bowl.
Speaker 1: We had a remote for work. Uh and so it's
Speaker 1: been a really, really long time. And that doesn't count, Carol,
Speaker 1: you were working. Even if it was the Super Bowl,
Speaker 1: that's not a vacation. No. It was a lot of fun.
Speaker 1: It was Florida, it was warm, it was a lot
Speaker 1: of fun. And we've got a story this week to um.
Speaker 1: You know, we're all wondering about when it kind of
Speaker 1: gets back to quote unquote normal. The Biden administration, they
Speaker 1: are considering whether to impose domestic travel restrictions, including on Florida.
Speaker 1: I mean, they're worried about the coronavirus mutations threatening to
Speaker 1: reverse all the progress that we've made on the pandemic.
Speaker 1: The travel industry hit hard. We've talked with him many
Speaker 1: times throughout the health crisis, giving us a great frontline
Speaker 1: view of what's happening or not happening in the travel industry.
Speaker 1: Axel Heafer is CEO of the online travel platform tree Vago.
Speaker 1: I mean that the times are still pretty difficult um
Speaker 1: for travel obviously, but then for for all of us
Speaker 1: with all the restrictions around the world. On the other hand, UM,
Speaker 1: I do think that there is is clear hope and
Speaker 1: there is a clear path to UM to return to
Speaker 1: a more normal life. And the second half of the
Speaker 1: year with some countries being very successful in vaccinating very
Speaker 1: quickly UM and more and more vaccination production capacity coming online.
Speaker 1: So it's it's a mixed um of of a very
Speaker 1: very difficult present and an improving outlook for the future.
Speaker 1: Before we look forward a little bit, tell me, I mean, so,
Speaker 1: is everything pretty quiet still? Is it like it's been
Speaker 1: largely the last year or so? Are you seeing some
Speaker 1: activity a little bit on your platform? I mean the
Speaker 1: travel is travel activity is very limited, UM. So we
Speaker 1: we've we've seen quite a lot of travel in the
Speaker 1: third water of last year where the infections came down
Speaker 1: pretty much everywhere in the northern hemisphere, and you could
Speaker 1: clearly see that there is a huge demand of UM
Speaker 1: of all of us getting a break and traveling, seeing
Speaker 1: friends and family and and just going to the beach
Speaker 1: or the mountains. But then with the autumn coming, infections
Speaker 1: have obviously come up and travel has collapsed pretty much,
Speaker 1: UM in all of our main markets. So the demand
Speaker 1: is is very quiet, but you know we are we
Speaker 1: are focusing on on the recovery and improving our product offering. Well.
Speaker 1: It's interesting to watch and Expedia reporting, Disney reporting earnings.
Speaker 1: You know we're watching too in terms of uh, you know,
Speaker 1: indications of when they start to see their parks opening.
Speaker 1: How do you see this is a second half story,
Speaker 1: a third quarter, fourth quarters story, I mean, how do
Speaker 1: you see it? Maybe you know playing out here, It's
Speaker 1: very difficult to predict that we are we are very
Speaker 1: confident that by the third quarter most of the main
Speaker 1: markets will have made a lot of progress UM and
Speaker 1: and in the vaccination program, so that there will be
Speaker 1: returned to to travel in summer. And the question when
Speaker 1: the summer will start will will obviously be answered slightly
Speaker 1: differently market by market. If you look at countries like Israel, UM,
Speaker 1: I mean, they will be fully vaccinated much much earlier
Speaker 1: than than some countries in continentally Europe and UM, the
Speaker 1: UK and the US being somewhere in the middle. So
Speaker 1: as soon as there are sufficient progress and through the
Speaker 1: better weather the new infections wild dropped, there will be
Speaker 1: some return to travel. Well. And what's interesting too, and
Speaker 1: I think you and I actually have talked about it before.
Speaker 1: You know, this whole idea of health passport or some
Speaker 1: kind of COVID, you know, vaccine certificates to allow you
Speaker 1: to go you know, a cross border. Are we gonna
Speaker 1: do we need that in order for this to work
Speaker 1: and for the travel industry to really open up. It's
Speaker 1: a good question, and I think it's a It's the
Speaker 1: question is to me more political question, how this would
Speaker 1: be im amentment. I mean, if you if you would
Speaker 1: only allow UM for vaccinated people to travel, I think
Speaker 1: that that is UM could create quite some some issues
Speaker 1: because there is a certain certain sequence of handing vaccinations
Speaker 1: out UM, so so there is a clear preference to
Speaker 1: a certain age groups in particular. Whereas if you use
Speaker 1: the vaccination passport to make it easier to travel so
Speaker 1: to UM, to lift the requirements of a quarantine or
Speaker 1: of UM of multiple tests UM, I think that that
Speaker 1: is a different matter, and it would for sure help
Speaker 1: to make it easier. But the key thing that is
Speaker 1: holding travel back is more the predictability. So will I
Speaker 1: be able to go somewhere, what kind of experience will
Speaker 1: I have? And will I be able to return without
Speaker 1: an unexpected position of a new quarantine restrictions or travel restrictions.
Speaker 1: Do you anticipate to And I think we've talked about
Speaker 1: this too, that the type of travel that maybe we
Speaker 1: continue to see, at least for at least the first
Speaker 1: half of the year and maybe even into the second
Speaker 1: half of the year is much more country within a country,
Speaker 1: you know, and it's a lot more of local travel.
Speaker 1: Do we continue to see that kind of thing versus
Speaker 1: cross border? Yeah, I would expect the same pattern that
Speaker 1: we've seen in twenty twenty. So first friends and family UM,
Speaker 1: and predominantly domestic or neighboring internationals, so for the US, Mexico,
Speaker 1: and then UM continently. For example, for Germany was a
Speaker 1: lot of Netherlands and Austria UM, and then UM with
Speaker 1: more progress also some international travel, and international travel obviously
Speaker 1: requires a lot more improvement, as you need an improved
Speaker 1: situation in the country of origin and the country of
Speaker 1: destination to then UM installed travel corridors. But domestic will
Speaker 1: will be the first for Shure to recover. You sound exhausted.
Speaker 1: I don't know, I mean I I it has been
Speaker 1: it has been pretty much exactly a year. Actually we
Speaker 1: reported we reported this week and I looked it up.
Speaker 1: So the the first earnings that we report a que
Speaker 1: for twenty nineteen, actually February eleventh, we we had this
Speaker 1: one sentence on the share all the latter that said,
Speaker 1: there is the new virus spreading in Asia, and we
Speaker 1: don't think that we can make give any guidance because
Speaker 1: there is some uncertainty. Um. And of course it turned
Speaker 1: out very, very different than what we anticipated. But I
Speaker 1: think now that we are in one, we we are
Speaker 1: closer to the end of the pandemic than than to
Speaker 1: the beginning. And and that's the way to think about it. Yeah,
Speaker 1: so today I have an optimism, be an optimist and
Speaker 1: and focus on on the recovery rather than looking at
Speaker 1: the difficult times that we are still in right now.
Speaker 1: Right because I know all the times that we've talked
Speaker 1: to you over the past year, I mean, this whole
Speaker 1: idea we talked about. You know that we don't have
Speaker 1: a playbook. We're kind of finding our way through it.
Speaker 1: And I do feel like vaccines are certainly a game changer.
Speaker 1: Dr Anthony Fauci, at least here for the US, as
Speaker 1: US vaccine supply should increase enough by April to allow
Speaker 1: anyone who wants a shot to begin getting one. That
Speaker 1: to me like, we're getting, you know, goal posts like this,
Speaker 1: signpost like this to give us some idea of a
Speaker 1: visibility going forward. You I'm assuming you're talking to a
Speaker 1: lot of people in the travel industry, you know, you
Speaker 1: talk about the second half? Is everybody kind of talking
Speaker 1: about the second half at this point? I think there
Speaker 1: there's there's a wide consensus that in the second half
Speaker 1: we should see a significant improvement. UM, whether we see
Speaker 1: it a bit earlier, they're obviously the very very different
Speaker 1: assumptions and and the different perspective on the on the
Speaker 1: second quarter is predominantly driven by the uncertainty around the
Speaker 1: new virus variants. So how quickly will they spread? What
Speaker 1: exactly will that mean for um, the increase in infections?
Speaker 1: And on the other hand, how quickly, UM will the
Speaker 1: vaccination programs be rolled out? And how quickly will the
Speaker 1: mortality rate drop? And depending on on your view on
Speaker 1: those two questions, you're you're more positive or more skeptical,
Speaker 1: UM for a bit earlier recovery and earlier start of
Speaker 1: the summer. So how do you continue to run a
Speaker 1: company in this environment? I know you've got to worry
Speaker 1: about employees. UM, tell me where you are with that.
Speaker 1: And and I'm also how do you do kind of
Speaker 1: long term strategic planning in this type of environment or
Speaker 1: do you kind of just have to put it on
Speaker 1: hold until you get through this, I mean on the
Speaker 1: on the business side, UM, it is actually not that
Speaker 1: difficult because the every every data point that we look at,
Speaker 1: every survey that you look at, shows that there is
Speaker 1: an increasing desire to travel. I mean the longer the
Speaker 1: lockdowns and the restrictions last, the more we all want
Speaker 1: to travel and you know, see friends and family and
Speaker 1: and really get out of there and and break out
Speaker 1: of the routine. So there is very strong demand and
Speaker 1: we are not worried at all that there will be
Speaker 1: no no rebound ones. Things are more under control. The
Speaker 1: bigger challenge, UM is is I think I mean, not
Speaker 1: specific to travel, is it's a chance that we are
Speaker 1: all facing that this has been going on now depending
Speaker 1: on where you live for for a year and and
Speaker 1: we all exhausted. I mean, it's just it's difficult to
Speaker 1: live in a in a world where, um, you basically
Speaker 1: spend most of your time at home, where the schools
Speaker 1: are closed in a lot of countries and a lot
Speaker 1: of regions where you need to be a parent and
Speaker 1: employee and the teacher at the same time in parallel basically.
Speaker 1: And that's why I think what what will make it
Speaker 1: make much easier and give us a lot of relief
Speaker 1: will be the reopening of schools wherever they are closed,
Speaker 1: and then also the reopening of some activities that that
Speaker 1: allow you to allow us to break out of the routine.
Speaker 1: And then the step after that is travel UM. And
Speaker 1: I think once we see the first steps that that
Speaker 1: that that allow us to to have a bit more
Speaker 1: normal life, the pressure that we all feel will will
Speaker 1: be UM will ease a lot. And and that is
Speaker 1: also the key challenge in running a travel business, but
Speaker 1: running any business, I would say, I mean, do you
Speaker 1: anticipate that in the second half you could see your
Speaker 1: business up two D three hundred as people who as
Speaker 1: you said, I'm with them, I'm tired of it. You know,
Speaker 1: I've been basically living in a bubble for the most part,
Speaker 1: and um, you know, can't kind of wait to be
Speaker 1: able to just kind of break out a little bit.
Speaker 1: Do you anticipate that we could see some kind of
Speaker 1: off the charts kind of increases when it comes to travel.
Speaker 1: There there there would be definitely be a rebound. I
Speaker 1: mean how much exactly is almost impossible to predict, to
Speaker 1: be honest, because you will still have certain parts of
Speaker 1: the population that we'll see friends and family but will
Speaker 1: be reluctant to really travel, will not fully safe. That
Speaker 1: was one of our go to voices on the travel industry,
Speaker 1: Travago CEO Axel Heifer, and that reps up the first
Speaker 1: hour of the weekend edition to Bloomberg Business Week from
Speaker 1: Bloomberg Radio. I'm Carol Messer and I'm Tim Stantin. Back
Speaker 1: more ahead in our next hour, including our cover story
Speaker 1: Apple is the two point three trillion dollar fortress that
Speaker 1: Tim Cook built, plus people getting direct recurring cash payments
Speaker 1: and income. Is it more than a pipe dream? And
Speaker 1: at another question for all of you, do you want
Speaker 1: to be famous? How about fake famous? That's the name
Speaker 1: of a new documentary. We're going to talk about that
Speaker 1: and go into the world of influencers and grab a
Speaker 1: glass of a nice cabernet or coat drone. We're catching
Speaker 1: up with the founder of Vivino on raising money. There
Speaker 1: was a lot of money too, and more people raising
Speaker 1: glasses during the pandemic. You had me at grab a glass.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes Tim Stenovic from Bloomberg Radio.
Speaker 1: Hi on Carol Masser, and I'm Tim STENOVK of Bloomberg
Speaker 1: Quick Take Clay Ahead in our second hour of the
Speaker 1: weekend edition of Bloomberg Business Week, including city programs to
Speaker 1: provide unconditional cash payments to residents. Why we need them.
Speaker 1: Plus you two can become on Instagram influencer. It's all
Speaker 1: in a new HBO documentary, Fake Famous. We've got the filmmaker,
Speaker 1: even meet him, even you, anyone can do it. I
Speaker 1: love this story and it's five o'clock somewhere. A lot
Speaker 1: of that going on during the pandemic. We're going to
Speaker 1: check in with the founder of wine app startup first though.
Speaker 1: This week's cover story. It was a good one and
Speaker 1: it's all about Apple, A deep dive into Tim Cook's
Speaker 1: company and Carol. One thing that I was really surprised
Speaker 1: and interested in is is just how quickly Apple went
Speaker 1: from one trillion dollars to two trillion dollars. It only
Speaker 1: took twenty four months. It's amazing. Yeah, but it took like,
Speaker 1: you know, the entire history of Apple to reach one
Speaker 1: trillion dollars. It's pretty remarkable, right, And I gotta say
Speaker 1: this was among our most read on the Bloomberg this
Speaker 1: week and reporting for Bloomberg Business Week, another deep dive
Speaker 1: by Bloomberg News technology reporter Austin car check it out.
Speaker 1: We lead off the story with a big quote by
Speaker 1: Warren Buffett, who said, you know, Tim may not be
Speaker 1: able to design a product like Steve, but he's some
Speaker 1: He's a real phenomenal manager and someone who understands the
Speaker 1: world to a degree that very few CEOs over that
Speaker 1: he's met over the past sixty years can match. And
Speaker 1: we wanted to explore what that means. You know, how
Speaker 1: was it that he was still able to build Apple
Speaker 1: into a two point three trillion dollar company without being
Speaker 1: a product visionary, which is what as he noted, Apple
Speaker 1: was known for with jobs at the helm And how
Speaker 1: Cook did that was through Apple supply chain, through his
Speaker 1: operational management, through his handling of China, especially during the
Speaker 1: trade war, as well as his diplomacy efforts during the
Speaker 1: Trump administration. So this story is sort of a deep
Speaker 1: dive into the other half of Apple, the side that
Speaker 1: you really don't see that often doesn't get as much
Speaker 1: attention because it's it's a little bit complicated and wonky,
Speaker 1: and and it's just hard to explain. And we wanted
Speaker 1: to bring that that side of Apple to live. But
Speaker 1: that that's Tim Cook, right, He's complicated, he's wonky. He's
Speaker 1: supply chain guys. He's not Steve Jobs right, He's not
Speaker 1: the product guy. He's the behind the scenes, like get
Speaker 1: it done guy, right. Absolutely, it was. It was funny
Speaker 1: some of the people that we we talked to very
Speaker 1: early in his days at Apple, um they actually described him,
Speaker 1: which is so anti Steep Jobs. They describe One person
Speaker 1: we talked to described him as quote exceptionally boring, which
Speaker 1: is such a funny way to describe someone exceptionally boring. Um,
Speaker 1: But that's because he's he's a numbers guy, He's a
Speaker 1: spreadsheet guru. He's someone who can just find the minutia
Speaker 1: in the tiniest of of of part costs, of component
Speaker 1: issues and and sort of managed to build up an
Speaker 1: outsourced supply chain that Apple depends on for all its products.
Speaker 1: And I think that the major thing is Apple gets
Speaker 1: so much credit because Steve Jobs and their former design
Speaker 1: head Johnny I've can design a product like the iPhone
Speaker 1: or iMac or iPod, But equally as important is that
Speaker 1: Tim Cook was able to manufacture millions of those products.
Speaker 1: So it's not just that a person can design a
Speaker 1: single product, is that Tim Cook can can turn out
Speaker 1: tens of millions, hundreds of millions of these devices. And
Speaker 1: that's how Apple was successful. If they couldn't do that,
Speaker 1: if they couldn't get their supply chain to be economic,
Speaker 1: there's no way Apple would have been successful. Uh, you
Speaker 1: know over the last ten years or even during the
Speaker 1: Jobs era. I want to also say, and you write
Speaker 1: about this in such great detail, Tim Cook also kind
Speaker 1: of a master politician. Yeah. One of the things that
Speaker 1: I feel like has not gotten enough attention is just
Speaker 1: how he handled that relationship in Washington. If you think
Speaker 1: about the last four years, Apple was uniquely vulnerable. I
Speaker 1: mean Trump came into office, um, you know, with with
Speaker 1: threats of a trade war with tariffs and threats that
Speaker 1: that could have really disrupted Apple's supply chain. There was
Speaker 1: a lot of calls and personal attacks on CEOs for
Speaker 1: outsourcing jobs. Um and and the reliance on China and
Speaker 1: the tech industry, and you would think that that Tim
Speaker 1: Cook would have really not been in a good position,
Speaker 1: uh to sort of navigate those those rough waters. But
Speaker 1: instead the company thrived during the Trump era. And when
Speaker 1: we talked to to to Washington insiders, you know what
Speaker 1: they really said was he was in Washington more than
Speaker 1: any tech CEO, perhaps as much as any CEO in
Speaker 1: the world, just sort of always offering to help where
Speaker 1: they could sort of find overlap in common ground. And
Speaker 1: when we talked to Gary Khane, who was the former
Speaker 1: Chief Economic by Or, he was just saying that what
Speaker 1: really struck him was not just how much he was
Speaker 1: at the White House, but also that he wasn't just
Speaker 1: all about asking about tax issues or tariff issues or
Speaker 1: trying to focus the attention on what can benefit Apple,
Speaker 1: but he was more so offering, how can I help
Speaker 1: you guys with your agenda when it comes to just
Speaker 1: other political issues. And I think that really positioned him
Speaker 1: well to sort of escape more attacks from Trump personally
Speaker 1: as the CEO, but also put him in a good
Speaker 1: position to exploit potential tariff exemption. It allowed him to
Speaker 1: receive tax exemptions on products ranging from the Mac pro
Speaker 1: to the iPhone and Apple Watch, and these tariffs could
Speaker 1: have been huge, hugely disruptive. There was analysts that would
Speaker 1: have estimated that had some tariffs go into two and
Speaker 1: let's go into place, it could have added a hundred
Speaker 1: and fifty dollars or more to each sale of an
Speaker 1: iPhone iPhone, which would have been tremendously disruptive. So the
Speaker 1: fact that Tim Cooke was able to avoid that, in
Speaker 1: part by these sort of constant outreach to to President
Speaker 1: Trump and Jared and Ivanka UM, you know, really helped
Speaker 1: the Apple uh sort of cause over the last four years.
Speaker 1: It's kind of to Austin like an odd couple. I
Speaker 1: think safe to say that most would say Donald Trump
Speaker 1: and Tim Cook. But yet there are pictures of them
Speaker 1: touring a factory, and I have to say, that's one
Speaker 1: of my favorite parts of your story about this factory.
Speaker 1: I think it was was it in Austin, UM and
Speaker 1: the optics that Tim Cook made sure happened? Yeah, I
Speaker 1: mean that that was another thing that that someone that
Speaker 1: had worked in the Trump administration told us that that
Speaker 1: that Tim Cook was also very skilled at at trading optics.
Speaker 1: He recognized that this was a president that really wanted
Speaker 1: mainstream business validation. He wanted to be seen with the
Speaker 1: big CEOs out there, uh, to sort of, you know,
Speaker 1: as a testament to his art of the deal bona fide.
Speaker 1: And and this the Texas Factory, which is something that
Speaker 1: they had gone to tour together Tim Cook and Donald
Speaker 1: Trump in November, and it was supposed to sort of
Speaker 1: exemplify the restoring efforts, the bringing jobs back from shen Z.
Speaker 1: That was Bloomberg News technology reporter Austin Carr. Check out
Speaker 1: that story and more in the current issue of Bloomberg
Speaker 1: Business Week, on newsstands, online at Bloomberg dot com, and
Speaker 1: on the Bloomberg You're listening to Bloomberg business Week coming up.
Speaker 1: Runway has been trying to think of innovative ways to
Speaker 1: make sure that businesses that we care about stay active,
Speaker 1: continue to employ folks and make wonderful product We're gonna
Speaker 1: hear from the leader of a black and brown woman
Speaker 1: led firm about helping to build wealth for people of color.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes. Tim Stinovic from Bloomberg Radio. So, Tim,
Speaker 1: one of the things the pandemic really brought to light
Speaker 1: is about the disparities that we are seeing in our
Speaker 1: society and our economy, specifically wealth gaps that we are
Speaker 1: seeing between black and white people. Reminded of it every
Speaker 1: day with the unequal recovery and the unequal impact that
Speaker 1: this pandemic has had. We did catch up with the
Speaker 1: head of one company though, that's working to change that.
Speaker 1: That's right. Jessica Norway is who we spoke with. She's
Speaker 1: the founder and CEO of Runway. The firm describes itself
Speaker 1: as a financial innovation company and they're committed to dismantling
Speaker 1: systemic barriers and reimagining financial policies and practices, and it
Speaker 1: helps to build black community wealth through early stage funding
Speaker 1: and more. Check it out. We started off thinking about
Speaker 1: Runway and the disparity of black businesses, which unfortunately right
Speaker 1: now due to covid and UM and just the historical
Speaker 1: imbalance of African Americans ability to access capital, the racial
Speaker 1: wealth gaps. That gap prior to covid UM was somewhere
Speaker 1: around about ten thousand dollars in combined wealth on average
Speaker 1: across the country for black people in about a hundred
Speaker 1: and forty two thousands for white folks around the country
Speaker 1: combined wealth. UM. And since COVID, everybody a white blacks. UM,
Speaker 1: everybody has taken a hit, and so that number has
Speaker 1: been completely decimated. Uh, and Runway has been trying to
Speaker 1: think of innovative ways to make sure that these businesses
Speaker 1: that we care about, UM, stay active, continue to employ
Speaker 1: folks and make wonderful products as we know them to do. Well.
Speaker 1: It's interesting you guys, and we did a great Bloomberg
Speaker 1: story about some of the work that you're doing, specifically
Speaker 1: about these guaranteed income pilot projects. Tell us little bit
Speaker 1: about this where you're actually giving residents money no strings attached, um,
Speaker 1: you know, to help out specifically small businesses. Uh, tell
Speaker 1: us little bit about that. All right, So this this
Speaker 1: started right as at the time when everything was closing
Speaker 1: down around us. This is probably April, and UM, the
Speaker 1: funding Uh, the fun team at Runway came together to
Speaker 1: talk about our portfolio of companies and they range um
Speaker 1: from uh wonderful you know, food makers and artisans and
Speaker 1: all kinds of tech companies and so forth. What could
Speaker 1: we do to make sure where that that group of
Speaker 1: folks UM made it through, and we really believe in
Speaker 1: the community of our entrepreneurs and we believe that our
Speaker 1: survival is really dependent on there. So we thought about
Speaker 1: it and we came up with thinking that what we
Speaker 1: needed is cash UM and that they needed a guaranteed
Speaker 1: income payment, something that they knew every month that was
Speaker 1: gonna come in that could help them to make some
Speaker 1: of the adjustments and some decisions that we all had
Speaker 1: the face around childcare and flowing of business. We have
Speaker 1: one company that was a florist that did a lot
Speaker 1: of events in the summer, and so how do those
Speaker 1: companies start to pivot UM, go online more UM, and
Speaker 1: just deal with the things that happened day to day
Speaker 1: in their life. So we decided that a cash payment
Speaker 1: every month for a few months would help give some
Speaker 1: of that breathing space to make those decisions. And one
Speaker 1: of the things that was so important for us is
Speaker 1: for us to say that it didn't matter what they
Speaker 1: did with that money. They didn't have to report to us,
Speaker 1: they didn't have to make an application to get it
Speaker 1: or anything. It was a conversation with them about what
Speaker 1: we could do that would help them in this moment
Speaker 1: in time, and when we look at the success of it,
Speaker 1: our businesses are still active and going and hiring people,
Speaker 1: and the amount of money that we were able to
Speaker 1: to move to them was really nominal. When we look
Speaker 1: at the ripple effect of what it means for those
Speaker 1: businesses to be up and running right now at this time,
Speaker 1: well like, if you think about it, right, if you're
Speaker 1: able to keep these businesses going, the impact on the
Speaker 1: family specifically the business owner, but then again anybody they employ,
Speaker 1: and then ultimately is that business gets bigger, it becomes,
Speaker 1: you know, casts a wider net. What's interesting is you've
Speaker 1: done a lot of research on this UM and have
Speaker 1: looked into and it's something that we actually talked this
Speaker 1: week with the former head of the f d i C.
Speaker 1: Sila Bear, about banks they, you know, in terms of
Speaker 1: lending to minority community ease or minority business owners, especially
Speaker 1: the big banks, they're not so good. That's right, that's right.
Speaker 1: One of the really incredible things that came out during
Speaker 1: this time CARE was a report from um I think
Speaker 1: it came out in August or maybe the beginning of
Speaker 1: September from um UM the Federal Reserve of New York
Speaker 1: that talked about this very issue and said specifically that
Speaker 1: it was because of systemic racism inside of the financial
Speaker 1: institution that made it so that these businesses that we're
Speaker 1: talking about were under capitalized from the very beginning and
Speaker 1: therefore could not sustain this level of a blow of
Speaker 1: closure and so forth. So we we also looked at
Speaker 1: the data UM from the p p p UH program
Speaker 1: that the banks were administering, and again we saw numbers
Speaker 1: where African American entrepreneurs UM did not get the same
Speaker 1: access to those UH funds as other businesses did, and
Speaker 1: so we have a historic blind spot UM. A side
Speaker 1: of the financial industry, particularly with banking and Runway has
Speaker 1: been really active since the very beginning to work with
Speaker 1: depository institutions like banks and credit unions UM, even some
Speaker 1: uh c df I loan funds and so forth, but
Speaker 1: to talk with them about those in these underlying biases
Speaker 1: that are coded inside of their underwriting process, how we
Speaker 1: can change those things right and and incentivizing those changes
Speaker 1: so we're able to bring a lot of folks who
Speaker 1: are investing alongside of us, who are really ready to
Speaker 1: put their money into banks that are going to be
Speaker 1: the kind of actors that are going to actually help
Speaker 1: these businesses well. Listen, and I feel like so much
Speaker 1: of the work you're doing too, it's and and we're
Speaker 1: getting much more clarity and being much more deliberate and specific.
Speaker 1: It's not just gaps and income, it's really gaps in wealth.
Speaker 1: And and I know in the Bloomberg story that we
Speaker 1: wrote because of the racial wealth gap, the media net
Speaker 1: worth of white families is in estimated a hundred and
Speaker 1: seventy one thousand dollars compared to seventeen thousand, a hundred
Speaker 1: fifty media net worth of black families. I mean that,
Speaker 1: Jessica is huge. It's huge, It's huge, And I think
Speaker 1: what why Runway is so um important in this time?
Speaker 1: As you describe, we're a financial innovation firm, and what
Speaker 1: we mean is we don't think that there's a one
Speaker 1: size solution I think that's going to actually change it.
Speaker 1: I think that there's been multiple failures along the way
Speaker 1: that have gotten that level of wealth to where it is,
Speaker 1: from places around income inequality, to housing um to business
Speaker 1: you know, their education spending. There's a lot of places
Speaker 1: where we can really look at this. But what is
Speaker 1: what it's important at this point is for us to
Speaker 1: be deeply innovative that the things that we used to
Speaker 1: do for disaster or for business supports will not solve
Speaker 1: a historical problem. We have to be much more creative
Speaker 1: about it. And I think that's why a Runway firm
Speaker 1: um is really growing at this particular time. That was
Speaker 1: Jessica no World, founder and CEO of Runway. Still to
Speaker 1: come on Bloomberg Business Week. We've been looking forward to
Speaker 1: this one. Do you want to be Famous? Yes, yes,
Speaker 1: absolutely Batch the HBO documentary Fake Famous. The filmmaker and
Speaker 1: creator of Instagram influencers, Nick Bilton joining us. That's next.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick takes Tim Stenovy from Bloomberg Radio. So, Tim,
Speaker 1: do you want to be famous? That's a good question. Well,
Speaker 1: it's a question also asked by a new HBO Max documentary.
Speaker 1: It really provides a great window into the world of influencers.
Speaker 1: It's called Fake Famous, and it's been described as a
Speaker 1: yearlong social experiment to turn three individuals into Instagram influencers. Well,
Speaker 1: there are no shortage of people who want to become
Speaker 1: famous behind the camera in front of the camera and
Speaker 1: the person creating the influencers is veteran technology journalist Nick
Speaker 1: built In. He's written for Vanity Fair, the New York Times.
Speaker 1: He's also the author of Hatching Twitter, a true story
Speaker 1: of money, power, friendship, and betrayal. Nick wrote, produced, and
Speaker 1: directed the film. He joined us from l A. I've
Speaker 1: been a technology report for almost twenty years now, and um,
Speaker 1: I was a Vanity Fair about five years ago, and
Speaker 1: Graydon Carter was my editor in chief, and you know,
Speaker 1: we were kicking around a few documentary ideas over the years,
Speaker 1: and a couple of years back, he said, oh, we
Speaker 1: should do a documentary on influencers, uh. And I said, oh, well,
Speaker 1: the whole industry is a bit of a joke. And
Speaker 1: he said, what do you mean. I said, well, I
Speaker 1: could make an influencer in ten minutes. And he said, well,
Speaker 1: that's our documentary. And um and that was essentially how
Speaker 1: this all began. And I had been at the New
Speaker 1: York Times. Uh, I had written about box. You know,
Speaker 1: these these uh fake accounts that exist on social media
Speaker 1: that can be created by writing code and so on.
Speaker 1: And I had written about the rise of them and
Speaker 1: how advanced they were getting over the years. I had
Speaker 1: then written about them when I was a Vandy fair
Speaker 1: talking about the election, how Donald Trump and Hillary Clinton
Speaker 1: both had millions and millions of fake accounts following them,
Speaker 1: and of course influencers employed these same tactics, and that
Speaker 1: was essentially what we wanted to show in the film.
Speaker 1: And Nick, you say that influence our culture is is
Speaker 1: a bit of a joke, but hey, there's there's real
Speaker 1: money behind this, and and there's real money behind it
Speaker 1: still even though it seems like a lot of people
Speaker 1: and companies are in on the joke. Well, I think
Speaker 1: it's interesting because there is real money behind it. Um.
Speaker 1: But it's at the same time it's not. It's it
Speaker 1: is so inauthentic in the way that the money, you know,
Speaker 1: changes hands, in the way that influences essentially purport to
Speaker 1: be kind of these these new bearers of ideas and
Speaker 1: culture and consumerism and so on. It's, you know, when
Speaker 1: we really kind of show this in the film, I mean,
Speaker 1: one of the things that we talk about is is
Speaker 1: how influencers the entire concept of it, uh is it
Speaker 1: is it is very similar to advertising, but even more extreme,
Speaker 1: and that the whole goal is to make you feel
Speaker 1: worse about yourself, so that you want to experience what
Speaker 1: an influencer experiences in their wonderful life of their free
Speaker 1: vacations and their fancy Lamborghinis and this, that and the other,
Speaker 1: and and really they're getting all this stuff for free,
Speaker 1: but they're not necessarily being honest about whether they actually
Speaker 1: like it or not. This is like kind of social
Speaker 1: media at its core though. Right, it's not just influencers
Speaker 1: who we are posting the highlight reel. Right, this is
Speaker 1: like how how normal people use Instagram. Right. They show
Speaker 1: off the best parts of their lives. It's like the
Speaker 1: holiday letter, you know, the trips to Africa and the
Speaker 1: kids are all getting straight a's on steroids. Well, it's
Speaker 1: it's completely true. I think that you know, Instagram, I
Speaker 1: personal would believe is the worst at this. They're the
Speaker 1: guiltiest of it because Instagram was founded on this idea
Speaker 1: of of being deceptive to the viewer. And the whole
Speaker 1: point of filters that were there was a highlight of Instagram,
Speaker 1: which can make your really bad photo look really good
Speaker 1: by just pressing a single button. And and the founders
Speaker 1: of Instagram they wanted it to feel like like a
Speaker 1: Vogue magazine or a vanity fair. They wanted people to
Speaker 1: post the beautiful shot images and make it appear as if,
Speaker 1: you know, that was the life that you were living.
Speaker 1: And I think that the end result of that was
Speaker 1: that you now have a system in place where I
Speaker 1: think it's just the most inauthentic platform on the Internet.
Speaker 1: Every every platform has the problems. You have Twitter, where
Speaker 1: it's you know, everyone's just angry at everyone else, and
Speaker 1: you know, they all have their things, but Instagram, I
Speaker 1: think is the absolute most deceptive of them. All kids
Speaker 1: want to do this, They want to be influencers, they
Speaker 1: want to be famous, which is something you ask a
Speaker 1: group of of twenties some things, right when you kind
Speaker 1: of line up a couple of people to to work with.
Speaker 1: So the one of the other aspects of the beginning
Speaker 1: of this film that we did a lot of research
Speaker 1: into and I had read about before, was um when
Speaker 1: you look at the studies that have been done. There's
Speaker 1: all these longitudinal studies who have been done, Ustlas done them,
Speaker 1: other other universities to where over the years they ask
Speaker 1: kids every single year, what do you want to be
Speaker 1: when you grow up? And back in the sixties and seventies,
Speaker 1: kids used to be wanted to be a teacher or
Speaker 1: a lawyer, doctor. Back in the eighties, they started to
Speaker 1: kind of get a little bit interested in fame, but
Speaker 1: it was famed for something that they had done, like
Speaker 1: they wanted to be a basketball player or an actor
Speaker 1: or something. Fast forward to today and kids just want
Speaker 1: to be famous, and they want to be famous influencers
Speaker 1: because they think that is the fast track to get there.
Speaker 1: You know what, Carol, I think what's so surprising to
Speaker 1: me is just how many kids want to be influencers
Speaker 1: when they grew up. Like, I'm actually disturbed by it.
Speaker 1: I was just gonna say, when you started talking about it,
Speaker 1: that's what I found most disturbing. I think about the
Speaker 1: documentary is the idea of kids. It's not about being doctor, lawyer, teacher.
Speaker 1: It's about being an influencer at a really early age.
Speaker 1: Who knows, maybe that will change in a few years. Yeah,
Speaker 1: well that was better. In technology journalist Nick Bilton coming up.
Speaker 1: Grab a nice glass of red or white or whatever
Speaker 1: you like. We're going to catch up with the founder
Speaker 1: of online wine marketplace and at the Vino, who has
Speaker 1: seen usage take off during the pandemic What I loved
Speaker 1: about this interview, Carol, is you were able to drink
Speaker 1: wine while you did the interview, you know, for research purposes. Right.
Speaker 1: I did not, but I might be drinking as I
Speaker 1: listened to us over the weekend. You're listening to Bloomberg
Speaker 1: Business Week. This is Bloomberg. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Bloomberg Quick Takes Tim Stellovy from
Speaker 1: Bloomberg Radio. So some recent news. Wine started Vivino. They
Speaker 1: recently raised a hundred and fifty five million dollars. Tim.
Speaker 1: They're looking to expanded in new countries, are adding staff.
Speaker 1: They really want to build out their recommendation engine after
Speaker 1: more than doubling wine sales during the pandemic, doubling do well,
Speaker 1: can we talk about this hundred and fifty five million dollars.
Speaker 1: I mean, that is a big funding round. You got
Speaker 1: up with the Vivino CEO and founder, Heinie Zacharison. Full disclosure,
Speaker 1: I love great red wine and I do use the
Speaker 1: Vivino app. We began now by talking about how his
Speaker 1: world has been. We didn't know what was going to happen, right,
Speaker 1: so we had to We have people in Hong Kong too,
Speaker 1: they have seen something. But once it hit the US,
Speaker 1: we're talking mid marchers, So we actually started by sort
Speaker 1: of popping the brake a little bit and say, Okay,
Speaker 1: what's this gonna be, what's this gonna look like, what's
Speaker 1: gonna happen to our sales? But we pretty quickly saw
Speaker 1: that it was gonna move us sillswise in the right direction.
Speaker 1: So so things when we had twenty of the March,
Speaker 1: things just jumped, you know, revenue just went way way
Speaker 1: up there in the beginning. We also had a little
Speaker 1: bit problems with you know, customers support and supply and
Speaker 1: so on, So that took us a month or two
Speaker 1: to really get back up to speed, but like a
Speaker 1: crazy time for us. And and you know it was
Speaker 1: it was rough, but but numbers were good. Yeah, but
Speaker 1: so pretty quickly March that all of a sudden, um,
Speaker 1: you know, and has it been pretty consistent in terms
Speaker 1: of growth or have you seen a steady increase from
Speaker 1: month to month? It was it really jumped up for
Speaker 1: for two or three months and went like totally crazy, right,
Speaker 1: And we may be in the beginning thought, okay, what
Speaker 1: is this is just like a short term thing? People
Speaker 1: want to make sure they have winers. So, but then
Speaker 1: stabilized at a certain level, and and it's been really
Speaker 1: really good ever since that, you know, just more buyers
Speaker 1: converting and and just higher numbers all over. And even
Speaker 1: when Europe sort of opened up over the summer, we
Speaker 1: didn't see numbers really go down again, So we just
Speaker 1: landed at a new level. Well, that's what I want
Speaker 1: to ask you, and I'm sure listen, honey, that a
Speaker 1: lot of people are asking you, and we all wonder that, Okay,
Speaker 1: there are these trends, whether you're a peloton, whether you're
Speaker 1: you know, what have you? You know, do what we've
Speaker 1: seen over the last year because of the pandemic and
Speaker 1: we were forced to predominantly be in our homes, work
Speaker 1: from our homes, living our homes. Do do those trains
Speaker 1: trends stay with us? What indications do you have that
Speaker 1: the growth that you've seen that you hold on to
Speaker 1: it and it continues to stay with you as the
Speaker 1: world starts to reopen. Yeah, it's a good question, right.
Speaker 1: I think first we can say for certain, like wine
Speaker 1: is probably not a fan, right, it's probably gonna stay
Speaker 1: with it, not in my world. So so they're probably
Speaker 1: gonna keep buying wine. But what our theory and what
Speaker 1: we we we've seen so far, especially when you're opened again,
Speaker 1: is that you know, it's really really hard to get
Speaker 1: people to change habits. But if you have something that
Speaker 1: is more convenient and easier and so um, you know,
Speaker 1: they don't go back. Like like we buy most of
Speaker 1: our supermarket stuff online now miss me personally, and I
Speaker 1: would never go back, Like, once I've seen it work,
Speaker 1: I'm just not going back. And the same goes for
Speaker 1: something like Amazon. Right, there's a reason why we do
Speaker 1: it because once we start doing it's it's incredibly convenient
Speaker 1: and and the same goes for for buying wine online. Well,
Speaker 1: and I'm curious about your demographic who your Do you
Speaker 1: have a typical user and if so, describe who they
Speaker 1: are and what kind of buying do you typically see
Speaker 1: from them. So so, we we have fifty million users
Speaker 1: around the world, so it's really really difficult for us
Speaker 1: to to say what a typical user is. UM. Previously,
Speaker 1: i would say pre pandemic, it was people that were
Speaker 1: a little bit more into wine, not like not the
Speaker 1: high end user, more the the higher end of the
Speaker 1: casual drinkers. But now I think it's changed, Like we
Speaker 1: we see everybody doing it now. We also see price
Speaker 1: points moving down. That doesn't mean people dry, people buy
Speaker 1: wine that's less expensive. It just means that we're taking
Speaker 1: more from the offline part and people are starting to
Speaker 1: buy less expensive wines online now too. Full disclosure. I
Speaker 1: love the you Know app. I use it. I think
Speaker 1: what's really cool about it, um honey, to be quite honest,
Speaker 1: is I can be anywhere and if I have someone,
Speaker 1: I can quick take a picture, I quick get some views,
Speaker 1: I can buy it. Like it's just wonderful and it's
Speaker 1: so easy. I do wonder too, like how stick is it?
Speaker 1: Once you've got somebody who's on the platform, do they
Speaker 1: automatically become a buyer shopper? Do they continue to increase it? Like?
Speaker 1: How does it? How does it play out? It varies
Speaker 1: quite a bit. It is obviously an app, so you
Speaker 1: do lose a lot of people in the beginning, but
Speaker 1: once people start going right after people have used it
Speaker 1: for you one year, it just doesn't change. Like once
Speaker 1: their own board have used it for one year, that
Speaker 1: feels like it's a lifetime. We've been around for ten
Speaker 1: years now, so we have pretty good data on that,
Speaker 1: so so the people that really appealed to they just
Speaker 1: keep going. So so that's amazing. Obviously we built new
Speaker 1: features all the time and so on to make it
Speaker 1: better and better. Is the US your best market, your
Speaker 1: fastest growing? Or where is it? US? Is by far
Speaker 1: our biggest market commercially around Our sales are in the US,
Speaker 1: so by far the biggest, not the fastest growing, I
Speaker 1: mean relative to to the market, it's by far the biggest.
Speaker 1: But but some other markets have started late. Uh, this
Speaker 1: might be a bit strange, but actually France started relatively late.
Speaker 1: It's going really really. It took them a while to
Speaker 1: accept us, like we're not French show, so they wouldn't
Speaker 1: accept us. But now they love us, so so we're
Speaker 1: happy with them now. Well, so what are you gonna
Speaker 1: do with the money hundred million that you guys have raised?
Speaker 1: How do you need to spend it? And I am
Speaker 1: always curious for an app like yours? What's your most
Speaker 1: expensive you know, when you go through the balancy, is
Speaker 1: it the people, is it marketing? What's the most expensive item?
Speaker 1: Line item? Yeah, we're very privileged in the way that
Speaker 1: we spend very little money on marketing historically, right, because
Speaker 1: we have twenty thou people that installed up every single
Speaker 1: day organically, so that's a privilege when it comes to that.
Speaker 1: That might change in the future just we have a
Speaker 1: little bit more cash now. But but for us, it's
Speaker 1: all about, you know, helping people drink better wine. So
Speaker 1: number one on our list is really upgrading product and
Speaker 1: engineering just to make the product even better. And a
Speaker 1: lot of that is about using machine learning and AI
Speaker 1: to really learn every single user. You know, we know
Speaker 1: all these wines. We have twelve million wines on there
Speaker 1: and then we have these fifty million research and one
Speaker 1: thing is giving them ratings. But we want to give
Speaker 1: them personal ratings, just like Netflix does. So we're launching
Speaker 1: something called match for you. So once once you scand
Speaker 1: of wine, you're not just gonna see the ratings, also
Speaker 1: going to say, you know it's eight nine and certainly
Speaker 1: Chibil like this wine, so that we're very excited about it.
Speaker 1: That's really interesting, that's really clever. Where are the areas
Speaker 1: in the world that you're not yet in terms of
Speaker 1: geography that you want to be, that you need to be. Yeah,
Speaker 1: I think Asia has been a slower region for us
Speaker 1: usually starts with the real wine lovers that start using it,
Speaker 1: and then it's slow. Then it's spreads after that, but
Speaker 1: there's no doubt about like North America and even South
Speaker 1: America and Europe our strongest places. Asia is lagging a
Speaker 1: little bit after but we're starting to grow there now.
Speaker 1: So yeah, no interesting, Um, And I'm also curious. So
Speaker 1: I think I was just looking at some of the
Speaker 1: numbers and at least some of our reporting. This recent
Speaker 1: funding round million values you you guys, between six and
Speaker 1: eight hundred million. Does that feel about right? That's a
Speaker 1: good question. We have some bloom Brig analysts estimate that,
Speaker 1: and I'm not kind of coming in further. Okay, fair enough,
Speaker 1: fair enough, Maybe over a glass of wine we can
Speaker 1: talk about it sometimes take a lot of wine. Okay,
Speaker 1: that's fair a lot of good wine. Um, you're not
Speaker 1: profitable yet, right, and probably not this year nor next.
Speaker 1: Why if it's doing so well and you guys are
Speaker 1: adding you know, I'm just curious. Actually we were profitable,
Speaker 1: so we so we did bring even. As soon as
Speaker 1: this hit, we broke even, and I honestly I think
Speaker 1: that's also why we managed to really raise a lot
Speaker 1: of money people says, wow, this business really really works.
Speaker 1: The uneconomics are Charlotte growth is there. Let's put some
Speaker 1: real money on this and see if you can grow
Speaker 1: it even faster. Show. So we've really shown that the
Speaker 1: business model and the union numics are strong and that
Speaker 1: profitability continues this year, next year. There's your pretty confident
Speaker 1: of that. We're not yeah, no, we're not planning to
Speaker 1: do that because now we really want to invest. Right.
Speaker 1: So so we've managed to show that, you know, it
Speaker 1: all works, but now we're going to invest a lot
Speaker 1: more fuel the growth. Got it? Got it? And so
Speaker 1: what's the endgame for you? Guys? Do you plan to
Speaker 1: I know, and I know you probably get asked these
Speaker 1: questions a million times, but I have to ask you, um,
Speaker 1: what is the endgame? Go it alone, continue to grow
Speaker 1: the business. You've just gotten another capital raised. There's a
Speaker 1: lot of money out there. There's also a pretty healthy
Speaker 1: I p O market, you know, and it's been yeah, exactly,
Speaker 1: So how do you want to do it? I think
Speaker 1: it's a good question. I think my answer has always
Speaker 1: been and and and you know, we're closer to something
Speaker 1: now obviously, but really build a sustainable business also a
Speaker 1: business that could stand alone. Right when you think about
Speaker 1: the wine market being like almost like four hundred billion dollars,
Speaker 1: if we get a slice of that, this could be
Speaker 1: a really big sustainable business. So you know, I think,
Speaker 1: you know, someone might be interesting acquiring us, but I
Speaker 1: think I p O is something I really like at
Speaker 1: some point too well. And it sounds like, you know, honey,
Speaker 1: from what you told me is now that you've got
Speaker 1: this money, but you said you did break even. You've
Speaker 1: shown kind of the world that we can do this. Um,
Speaker 1: so you've got some more money that you mentioned you
Speaker 1: want to put into upgrading your product engineering and so on.
Speaker 1: Is that what you need ideally to kind of move
Speaker 1: the platform in the business to the next level because
Speaker 1: you've got a lot of users. Yeah, yeah, yeah. But
Speaker 1: I think it's also about like the thing about we
Speaker 1: are a global business. Right, we are actually in seventeen markets.
Speaker 1: The marketplace open in seventeen markets, right, We're only two
Speaker 1: hundred people, so we really want to go a little
Speaker 1: bit deeper into each market. That was veno CEO and
Speaker 1: founder Heine's acharizing, and that reps up the weekend edition
Speaker 1: to Bloomberg Business Week from Bloomberg Radio. Thanks so much
Speaker 1: for joining sum Carol Masser and I'm Tim Stanovk. Be
Speaker 1: sure to tune into our Bloomberg Business Week daily show
Speaker 1: Monday through Friday, starting at two pm Wall Street Time
Speaker 1: on Bloomberg Radio. You can also watch our daily broadcast
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Speaker 1: that's where you're going to find our extra podcast this week.
Speaker 1: Here more of our conversation with veteran technology journalist Nick
Speaker 1: built In on his HBO Max documentary Fake Famous. Find
Speaker 1: out how to fake being on an airplane. It's easier
Speaker 1: than you think. All you need is a toilet seat
Speaker 1: and a big screen. That's all we're gonna, you know,
Speaker 1: giveaway here. You can also see more of me on
Speaker 1: Bloomberg Quick Take, available on Bloomberg dot com, slash qt,
Speaker 1: and streaming platforms like Roku, Apple TV, Samsung TV, and more.
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Speaker 1: good and safe weekend everyone. This is Bloomberg,