WEBVTT - Businessweek Talks with Verishop CEO Imran Khan

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<v Speaker 1>This is Bloomberg Business Week. I'm Carol Masser and I'm

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<v Speaker 1>also listen to our radio show weekdays at two pm

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<v Speaker 1>Eastern only on Bloomberg Radio. Tell a little bit about

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<v Speaker 1>what you're doing at Barras, because do you think about

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<v Speaker 1>Amazon constantly when you're thinking about strategy for you guys, Uh,

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<v Speaker 1>I fundamentally believe that one company cannot solve all problems.

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<v Speaker 1>And I think if you look at e commerce right

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<v Speaker 1>now is ten percent of overall retail filth and um.

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<v Speaker 1>And there's a funny story. In two thousand four, I

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<v Speaker 1>was a research channelist and I went to see Netflix

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<v Speaker 1>and Rid Hastings told us that when he reached seven

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<v Speaker 1>point five percent penetration in the area, first blogbuster was

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<v Speaker 1>shut down. And he told us that when I get

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<v Speaker 1>to seven and a half to ten percent penetration nationally,

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<v Speaker 1>the blogbuster will go out of business, and that exactly happened.

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<v Speaker 1>And then in advertising business, when Google and Facebook got

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<v Speaker 1>ten percent of digital ad dollar, we saw an excelerated disruption.

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<v Speaker 1>And now digital advertising is forty percent of all advertising.

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<v Speaker 1>And if you look at online retail is now ten

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<v Speaker 1>percent of overall retail sales. So I believe that in

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<v Speaker 1>next ten to fifteen years online retail will of it.

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<v Speaker 1>So we're gonna see excellent depreciation because the seven and

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<v Speaker 1>a half to ten percent is the magic number when

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<v Speaker 1>things start really falling apart. And so how do you

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<v Speaker 1>capture that slice of it? You've been doing this even

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<v Speaker 1>live for just a few months. Now, what are you

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<v Speaker 1>learning about the marketplace that maybe you didn't know going

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<v Speaker 1>into it? Yeah, I think the marketplace what's really missing

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<v Speaker 1>is a lifestyle e commerce destination. Right, So if you

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<v Speaker 1>need your commodity, dispose about utility product, Amazon is phenomenon.

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<v Speaker 1>And if you need your luxury product, you know, like

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<v Speaker 1>you want to buy Lucchi Bucchie bag or weave a

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<v Speaker 1>turn back that you buy once a year, or you

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<v Speaker 1>are a point one percent of world's population that that's

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<v Speaker 1>all you buy. You know, you have a great relationship

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<v Speaker 1>with those very expensive brands. But for your everyday luxury

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<v Speaker 1>the like, let me ask you this, how many of

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<v Speaker 1>you the clothes that you're wearing you bought from Amazon?

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<v Speaker 1>Maybe one? Hello, it's two. So so really, if you

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<v Speaker 1>think about it, for your everyday luxury product, you know,

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<v Speaker 1>for everyday lifestyle product, there is no real destination to go.

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<v Speaker 1>You know, you go to either Bricken Motor stores or

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<v Speaker 1>you go to this boutique place. Uh. And that's also

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<v Speaker 1>happening at a time that we're seeing explosion of direct

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<v Speaker 1>to consumer brands. Right everybody is building direct to consumer brands,

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<v Speaker 1>so there is no place for consumers to go find

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<v Speaker 1>to discover new brands, find the brands all out and

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<v Speaker 1>discover new brands. So we are creating a brand discovery

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<v Speaker 1>platform where you can find all the cool brands for

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<v Speaker 1>your everyday luxury plan. And with the convenience for Amazon,

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<v Speaker 1>we now have the fastest free, fastest free online shipping

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<v Speaker 1>in the marketplace, free one day shipping. We put our

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<v Speaker 1>customers support number on the top so that if you

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<v Speaker 1>want to call, you can talk to our customers you know,

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<v Speaker 1>and I read every customers support emails, and so we

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<v Speaker 1>really scan for convenience. We stand for quality, and we

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<v Speaker 1>stand for discovery. So cool Brands does it all high end.

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<v Speaker 1>It's I would call them every day luxury price points

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<v Speaker 1>somewhere studying from seven to seven fifty dollars. What's to

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<v Speaker 1>prevent somebody from going to your site saying okay, like

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<v Speaker 1>this X y Z cool brand, and then going to

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<v Speaker 1>the home site that brand in the future, and some

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<v Speaker 1>people will do that, you know. Uh. The interesting thing

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<v Speaker 1>is that consumers don't like putting their credit card number

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<v Speaker 1>in five hundred different websites, right, so if you have

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<v Speaker 1>a relationship with one reteller who knows you and your

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<v Speaker 1>product shows up, that's a great place to do. The

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<v Speaker 1>second thing is the convenience, right, So because we gregate product,

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<v Speaker 1>we can uh do the delivery like free one day shipping,

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<v Speaker 1>free return, customers, support, all those things that you can't

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<v Speaker 1>get anywhere. And then the third we're bringing a lot

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<v Speaker 1>of exclusive brand partnerships and things like that. So the

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<v Speaker 1>really thing is that what we want to be, Like

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<v Speaker 1>I fundamentally believe for every YouTube where you can go

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<v Speaker 1>find everything, even like horrible things like people committing suicide.

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<v Speaker 1>You need the world of Netflix right and Amazon where

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<v Speaker 1>you can go find everything. They build the world's largest

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<v Speaker 1>flea market. You need a premium lifestyle e commerce destination

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<v Speaker 1>where you can discover cool brands and that we want

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<v Speaker 1>to build a discovery platform and the browsing experience. One

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<v Speaker 1>of the ways that you are sort of grabbing share,

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<v Speaker 1>it seems, is through influencers. That is well known to

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<v Speaker 1>a lot of the influencers in this room. What have

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<v Speaker 1>you learned about them? Because it's not so easy to

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<v Speaker 1>identify the right people to figure out the right essentially

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<v Speaker 1>business model around that, and it's not inexpensive. Sometimes, yeah,

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<v Speaker 1>we're not doing that much with you know, uh, influences.

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<v Speaker 1>To be completely honest with you, I have a philosophy

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<v Speaker 1>is do completely opposite what the world is doing. You know,

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<v Speaker 1>if you look at in New York City, you will

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<v Speaker 1>see our outdoor campaign in the taxi top or if

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<v Speaker 1>you take the subway, you know, you will see a

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<v Speaker 1>very sharp brand train. You know. I think so fundamentally,

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<v Speaker 1>I believe that consumers are smart and if and they

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<v Speaker 1>understand the authenticity you know, and and and the thing

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<v Speaker 1>is that if influencers are too commercial and they're promoting

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<v Speaker 1>too much of the product. I think it doesn't convert

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<v Speaker 1>very well. So you really really have to understand that

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<v Speaker 1>when you engage with the influences is an authentic relationship,

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<v Speaker 1>because I think you really really have to appreciate that

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<v Speaker 1>if you push your product in an inauthentic way, it's

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<v Speaker 1>actually huge turnoff for consumers because consumers know that you're

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<v Speaker 1>trying to dupe them, right, you know the but when

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<v Speaker 1>we started the company, we call it very Shop and

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<v Speaker 1>what is very Shop Verified Shop because we wanted to

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<v Speaker 1>build trust. You know, the world is going from fake

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<v Speaker 1>news to fake people to fake product, and we wanted

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<v Speaker 1>to build this trusted platform. And and so you want

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<v Speaker 1>to do marketing that you want to engage in a

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<v Speaker 1>marketing and trusted with And is it right? One million

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<v Speaker 1>shoppers or not yet? By the by the end of

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<v Speaker 1>the year, you have a free one der shipping right now,

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<v Speaker 1>but no in terms of the number of shoppers that

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<v Speaker 1>are on your site right now? Oh yeah, I think

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<v Speaker 1>by year and we'll have a million unique shoppers on

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<v Speaker 1>a monthly basis. Alright, so we need to switch gear. Yeah,

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<v Speaker 1>we gotta switch he gotta um when you talk about turnofs.

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<v Speaker 1>One of the biggest turnoffs it feels like for the

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<v Speaker 1>market this year and for a lot of people, was

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<v Speaker 1>we work. You've got some thoughts on this. You've been

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<v Speaker 1>watching this market as a banker, as an executive, as

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<v Speaker 1>an entrepreneur, what happened, what went wrong? As you just

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<v Speaker 1>still it down with we work? Um. The one word

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<v Speaker 1>is corporate greed, right. I think the key thing is

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<v Speaker 1>whenever we give someone money, you give them your trust.

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<v Speaker 1>It is a fundamental thing that people don't appreciate that

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<v Speaker 1>that when an investors are forget about investor, your friend

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<v Speaker 1>or your parents or your uncle or and investors give

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<v Speaker 1>you money, they give you the trust. And and when

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<v Speaker 1>you take that money, you have a responsibility. You have

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<v Speaker 1>a responsibility to leave by the trust they give it

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<v Speaker 1>to you. And and I think oftentimes we saw that

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<v Speaker 1>the corporate executives don't appreciate the trust that investors give

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<v Speaker 1>it to them. And at and uh, at we Work,

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<v Speaker 1>we saw the gross, gross negligence of that trust. And yeah, yeah,

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<v Speaker 1>executive level, yes, And the corporate greed is to a

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<v Speaker 1>level that fundamentally I didn't see the since the world

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<v Speaker 1>of what about the role of soft Bank in this,

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<v Speaker 1>right the big investor obviously in we work And what

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<v Speaker 1>about the role of investor and bankers certainly when they

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<v Speaker 1>tried to take it public and obviously all of a

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<v Speaker 1>sudden all these issues came out. Yeah, you know, responsibility

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<v Speaker 1>of investment bankers. So two different questions, you know, I think, Look,

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<v Speaker 1>I think soft Bank as an investors, you have to

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<v Speaker 1>make two decisions. Right. One, you have to analyze the

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<v Speaker 1>investment as a scandal and investment opportunity, and we can

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<v Speaker 1>argue whether we work with a good investment or a

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<v Speaker 1>bad investment from an investment lengths perspective, But what soft

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<v Speaker 1>bank and as an investors, you always have to trust

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<v Speaker 1>the management and you give them the money, and if

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<v Speaker 1>they don't follow through it, you know, I think it's

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<v Speaker 1>very difficult for investors. So I actually sympathize with stob Bank.

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<v Speaker 1>I know everybody blames soft Bank, but I actually sympathize

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<v Speaker 1>with suft Bank because they gave money to someone who

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<v Speaker 1>completely taar around and trying to didn't respect their trust.

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<v Speaker 1>And UH. With regards to investment bank, look, I think

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<v Speaker 1>you know, clearly investment bank would have higher standard of

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<v Speaker 1>due diligence. But you know, the good news is they

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<v Speaker 1>did the due diligence and they disclosed all this information.

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<v Speaker 1>Do you feel like it was too late in the process.

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<v Speaker 1>This is the company that was around for a while.

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<v Speaker 1>I think investment banks. They couldn't have disclosed it before

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<v Speaker 1>the filing anywhere because the company would not let them

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<v Speaker 1>disclose it. Right. So, so when you think about it

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<v Speaker 1>through your your banker lens, your research analysts lens, one

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<v Speaker 1>of the moments where we seem to be is this

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<v Speaker 1>exploration of private markets versus public markets when it comes

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<v Speaker 1>to valuations, when it comes to when money gets put in,

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<v Speaker 1>who makes the money in a lot of ways. You

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<v Speaker 1>saw this in some ways, uh, at your job at SNAP.

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<v Speaker 1>You know, it's sort of that that ride. What do

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<v Speaker 1>you make of where we are at this moment and

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<v Speaker 1>what's it going to take to to maybe fix this chasm,

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<v Speaker 1>as it were, between private valuations and public valuations or

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<v Speaker 1>is it working the way it's supposed to? I think,

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<v Speaker 1>you know, but I think the private market, you know,

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<v Speaker 1>the valuation is arguably you can argue that in many

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<v Speaker 1>cases are inflated, not always many cases, but you know,

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<v Speaker 1>I think I can see why investors like it right

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<v Speaker 1>because you don't have to worry about day to day volatility,

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<v Speaker 1>you know. Now the challenge with the public market, you know,

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<v Speaker 1>is the market is so volatile and investors are short,

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<v Speaker 1>short term oriented, and the people who are giving allocation

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<v Speaker 1>to those investors are so short term oriented that it

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<v Speaker 1>every little piece of news, you know, moves the stock

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<v Speaker 1>every day, and and and that create challenges. So I

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<v Speaker 1>think if you want to build a business for a

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<v Speaker 1>long term and want to make a long term decisions,

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<v Speaker 1>to be honest with you, it's very difficult to do

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<v Speaker 1>that in public market these days. Um So I think

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<v Speaker 1>I understand the excitement and on private market, uh, you know,

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<v Speaker 1>but saying that, you know, a lot of great companies

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<v Speaker 1>were built in a public market and Amazon went public

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<v Speaker 1>very early, Netflix went public very early, you know. But

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<v Speaker 1>I think it's getting more and more challenging. And the

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<v Speaker 1>thing is that also a lot of the funds are

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<v Speaker 1>getting really really big that that they're not really interested

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<v Speaker 1>in a small and MidCap name anymore. So that creates

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<v Speaker 1>a lot of challenges as well. And when when you

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<v Speaker 1>look at and one of the themes that we've identified

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<v Speaker 1>certainly for the year ahead is going to be what

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<v Speaker 1>happens with big technology and the tech lash that we've seen.

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<v Speaker 1>What are your expectations and should some of these companies,

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<v Speaker 1>whether it's Amazon, whether it's Google, whether it's Facebook, should

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<v Speaker 1>they be broken up? In your view? I don't. I

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<v Speaker 1>think my personal view, it's an American to break up

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<v Speaker 1>a company because just because they're big, right, that is

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<v Speaker 1>completely opposite of capitalism. And I think that just saying

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<v Speaker 1>that a company is big and we need to break

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<v Speaker 1>it up, in my view a person who is an

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<v Speaker 1>immigrant to this country, it's not American, uh, saying that

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<v Speaker 1>if these companies are engaged in an situation where they're

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<v Speaker 1>violated clear law, which I'm not aware of. If they're

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<v Speaker 1>violate and the law, then obviously, you know, I think

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<v Speaker 1>regular it should look into it and take action against it,

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<v Speaker 1>whatever the right course of action it is. Well. And

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<v Speaker 1>so let's talk about specifically like the digital ad market.

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<v Speaker 1>In many ways, this is something that you watch from

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<v Speaker 1>a number again of different angles, including in your role

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<v Speaker 1>as chief strategy officer at Snap. What did you learn

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<v Speaker 1>about that market specifically that maybe applies to the broader

0:12:21.360 --> 0:12:23.520
<v Speaker 1>tech world and what did you learn at Snap that

0:12:23.520 --> 0:12:26.200
<v Speaker 1>that you're applying, you know. I think look at Snap,

0:12:26.440 --> 0:12:30.840
<v Speaker 1>when I started building the ad business in January, we

0:12:30.920 --> 0:12:33.480
<v Speaker 1>had zero revenue, and by the time I left, we

0:12:33.559 --> 0:12:38.040
<v Speaker 1>did almost one point six billion dollar anialized revenue. And

0:12:39.080 --> 0:12:40.840
<v Speaker 1>so I think, and we did that in four years.

0:12:41.160 --> 0:12:43.240
<v Speaker 1>So I think, you know, if you can build an

0:12:43.240 --> 0:12:45.360
<v Speaker 1>audience and if you can recruit great team, I think

0:12:45.360 --> 0:12:48.000
<v Speaker 1>you can build a business very fast. I still believe

0:12:48.480 --> 0:12:51.920
<v Speaker 1>that there is an opportunity to build big businesses. You know. Look,

0:12:51.920 --> 0:12:55.360
<v Speaker 1>when I'm not trying to defend anybody, but when Amazon

0:12:55.400 --> 0:12:58.160
<v Speaker 1>came along with Walmart was really big, you know, and

0:12:58.160 --> 0:13:00.960
<v Speaker 1>and and before when Facebook came along, Google was really big.

0:13:01.000 --> 0:13:03.480
<v Speaker 1>Before Google, Microsoft was really big, and they're still big.

0:13:03.720 --> 0:13:06.880
<v Speaker 1>So I think that the disruption is happening at a

0:13:06.920 --> 0:13:09.200
<v Speaker 1>such a rapid pace. There's ten percent of e commerce

0:13:09.200 --> 0:13:12.920
<v Speaker 1>market going to become fort or the cloud computing penetration

0:13:12.960 --> 0:13:16.040
<v Speaker 1>will go so significantly. There's still room for build businesses,

0:13:16.280 --> 0:13:18.840
<v Speaker 1>you know. So so I don't think, you know, targeting

0:13:18.920 --> 0:13:23.280
<v Speaker 1>anybody because they became successful. I just fundamentally don't believe that.

0:13:23.320 --> 0:13:25.320
<v Speaker 1>I think that's a very cynical view of the world,

0:13:25.679 --> 0:13:29.280
<v Speaker 1>you know, And we need to be more, you know, uh,

0:13:29.360 --> 0:13:32.440
<v Speaker 1>you know, have a more positivity about that. But again,

0:13:32.559 --> 0:13:34.840
<v Speaker 1>if somebody broke any law which I'm not aware of,

0:13:35.280 --> 0:13:37.319
<v Speaker 1>obviously should look into it and take action against it.

0:13:37.440 --> 0:13:39.560
<v Speaker 1>If you're wearing your investment bank or hat right now

0:13:39.679 --> 0:13:41.680
<v Speaker 1>and there was a technology that you want to invest

0:13:41.720 --> 0:13:43.280
<v Speaker 1>in or that when you look at the landscape where

0:13:43.240 --> 0:13:45.840
<v Speaker 1>there's AI with a trobotics what have you, or maybe

0:13:45.960 --> 0:13:48.240
<v Speaker 1>something that we're not really talking about enough, where would

0:13:48.280 --> 0:13:51.960
<v Speaker 1>you put your money? I would invest in my business. Okay,

0:13:52.080 --> 0:13:58.080
<v Speaker 1>there's a look I actually think, you know, I actually,

0:13:58.559 --> 0:14:02.520
<v Speaker 1>you know think that there's a lot of talk about AI.

0:14:02.760 --> 0:14:05.360
<v Speaker 1>There's a lot of really really smart people are working

0:14:05.360 --> 0:14:07.720
<v Speaker 1>on AI. You know, there's a lot of talk about

0:14:07.760 --> 0:14:10.200
<v Speaker 1>self driving and these people are actually smarter than me.

0:14:10.440 --> 0:14:13.040
<v Speaker 1>And I cannot really go figure those things out. But

0:14:13.120 --> 0:14:16.120
<v Speaker 1>I look at e commerce in a retail you know,

0:14:16.400 --> 0:14:20.200
<v Speaker 1>it seems like most underrated opportunity because if you really

0:14:20.240 --> 0:14:22.080
<v Speaker 1>believe that seven and a half and ten seven and

0:14:22.080 --> 0:14:24.760
<v Speaker 1>a half to ten percent is the is the number

0:14:24.840 --> 0:14:28.800
<v Speaker 1>where you see accelerated disruption, you know, why wouldn't you

0:14:29.080 --> 0:14:32.480
<v Speaker 1>go to online commerce? And so what's the biggest threat

0:14:32.520 --> 0:14:35.440
<v Speaker 1>then for your business? And for the broader sort of

0:14:35.560 --> 0:14:38.280
<v Speaker 1>e commerce, for that growth rate, What do you worry

0:14:38.320 --> 0:14:41.560
<v Speaker 1>the most about? Maybe not from a competitive standpoint, but

0:14:41.640 --> 0:14:45.240
<v Speaker 1>from a more existential standpoint. I think the market will

0:14:45.240 --> 0:14:48.280
<v Speaker 1>go to whether we will be successful or not. That

0:14:48.400 --> 0:14:52.440
<v Speaker 1>will depend on can we execute right? And so I

0:14:52.440 --> 0:14:55.320
<v Speaker 1>think with our strategies right, are we executing right? You know?

0:14:55.400 --> 0:14:58.120
<v Speaker 1>So so that's only you know, so I would say

0:14:58.120 --> 0:15:01.360
<v Speaker 1>it's it's depends on the team. But overall the market,

0:15:01.680 --> 0:15:04.840
<v Speaker 1>where the market is going, I feel very very confident

0:15:04.880 --> 0:15:06.360
<v Speaker 1>that that's why the worry. Look, I went to the

0:15:06.440 --> 0:15:10.720
<v Speaker 1>north Stone yesterday, you know, this big seventh straight north Stone,

0:15:12.240 --> 0:15:14.800
<v Speaker 1>and after that, you know, my personal two cent I

0:15:14.840 --> 0:15:21.160
<v Speaker 1>was like, I know, media love it, but you guys

0:15:21.160 --> 0:15:24.000
<v Speaker 1>can have a good conversation covers what competitor do you

0:15:24.040 --> 0:15:30.840
<v Speaker 1>most admire and why what competitors? Look, I wouldn't necessarily competitors,

0:15:30.880 --> 0:15:35.120
<v Speaker 1>but look, I think, you know, like what Microsoft has

0:15:35.160 --> 0:15:38.600
<v Speaker 1>done recently, really Satia has done a really amazing job,

0:15:38.680 --> 0:15:41.080
<v Speaker 1>you know, turning around the business. You know, I think

0:15:41.400 --> 0:15:44.720
<v Speaker 1>Amazon continued to impress me what they're doing doing you know.

0:15:44.800 --> 0:15:47.840
<v Speaker 1>And and full disclosure, I own personally share of Amazon

0:15:47.880 --> 0:15:51.040
<v Speaker 1>and Microsoft, so I don't want to feel like pitching

0:15:51.080 --> 0:15:52.760
<v Speaker 1>my books here. But you know, I think there are

0:15:52.800 --> 0:15:55.960
<v Speaker 1>a lot of great companies that continue to execute, a

0:15:55.960 --> 0:15:58.280
<v Speaker 1>lot of small companies that continue to exhibute. All right,

0:15:58.320 --> 0:16:00.040
<v Speaker 1>we're going to use this for an upcoming edition in

0:16:00.120 --> 0:16:02.200
<v Speaker 1>a Business Week talks. And so when we have someone

0:16:02.240 --> 0:16:04.920
<v Speaker 1>like you with us, another question, we like to ask

0:16:05.000 --> 0:16:07.400
<v Speaker 1>his best advice. And this will be our last question.

0:16:07.880 --> 0:16:10.160
<v Speaker 1>What's the best advice a mentor or a boss or

0:16:10.200 --> 0:16:12.440
<v Speaker 1>someone has ever given you to sort of give the

0:16:12.480 --> 0:16:15.040
<v Speaker 1>people something to think about when they go out to lunch.

0:16:17.720 --> 0:16:22.920
<v Speaker 1>Be patient, you know, uh I And as I can see,

0:16:22.920 --> 0:16:26.080
<v Speaker 1>I like to speak fast, talk fast, do everything fast.

0:16:26.520 --> 0:16:33.280
<v Speaker 1>And um, when I was twenty four years old, UM,

0:16:33.280 --> 0:16:36.040
<v Speaker 1>my boss gave me the advice that hey be patient

0:16:36.520 --> 0:16:39.760
<v Speaker 1>and as I look at a lot of the millennial audience,

0:16:39.840 --> 0:16:42.680
<v Speaker 1>you know. Um. And actually I was in a conference

0:16:42.720 --> 0:16:44.880
<v Speaker 1>and I was listening to black Rock president. He was

0:16:44.920 --> 0:16:47.800
<v Speaker 1>talking that how millennials come. They want promotion in six

0:16:47.840 --> 0:16:50.680
<v Speaker 1>months and five five years two years later they want

0:16:50.720 --> 0:16:53.400
<v Speaker 1>his job. And I think, you know, in life, sometimes

0:16:53.440 --> 0:16:56.520
<v Speaker 1>you've got to be patient and uh and work really

0:16:56.520 --> 0:16:59.440
<v Speaker 1>hard and everything works out. That's a great final note everyron.

0:16:59.520 --> 0:17:01.760
<v Speaker 1>Thank you, thank you man, thanks for everybody, thank you,

0:17:01.840 --> 0:17:04.760
<v Speaker 1>thank you. Thanks for listening to Bloomberg Business Week. You

0:17:04.760 --> 0:17:07.880
<v Speaker 1>can subscribe to the podcast on iTunes, SoundCloud, or Bloomberg

0:17:07.960 --> 0:17:10.160
<v Speaker 1>dot com. You can also listen to our radio show

0:17:10.240 --> 0:17:13.320
<v Speaker 1>every weekday at two pm Eastern only on Bloomberg Radio