Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: Eastern only on Bloomberg Radio. Tell a little bit about
Speaker 1: what you're doing at Barras, because do you think about
Speaker 1: Amazon constantly when you're thinking about strategy for you guys, Uh,
Speaker 1: I fundamentally believe that one company cannot solve all problems.
Speaker 1: And I think if you look at e commerce right
Speaker 1: now is ten percent of overall retail filth and um.
Speaker 1: And there's a funny story. In two thousand four, I
Speaker 1: was a research channelist and I went to see Netflix
Speaker 1: and Rid Hastings told us that when he reached seven
Speaker 1: point five percent penetration in the area, first blogbuster was
Speaker 1: shut down. And he told us that when I get
Speaker 1: to seven and a half to ten percent penetration nationally,
Speaker 1: the blogbuster will go out of business, and that exactly happened.
Speaker 1: And then in advertising business, when Google and Facebook got
Speaker 1: ten percent of digital ad dollar, we saw an excelerated disruption.
Speaker 1: And now digital advertising is forty percent of all advertising.
Speaker 1: And if you look at online retail is now ten
Speaker 1: percent of overall retail sales. So I believe that in
Speaker 1: next ten to fifteen years online retail will of it.
Speaker 1: So we're gonna see excellent depreciation because the seven and
Speaker 1: a half to ten percent is the magic number when
Speaker 1: things start really falling apart. And so how do you
Speaker 1: capture that slice of it? You've been doing this even
Speaker 1: live for just a few months. Now, what are you
Speaker 1: learning about the marketplace that maybe you didn't know going
Speaker 1: into it? Yeah, I think the marketplace what's really missing
Speaker 1: is a lifestyle e commerce destination. Right, So if you
Speaker 1: need your commodity, dispose about utility product, Amazon is phenomenon.
Speaker 1: And if you need your luxury product, you know, like
Speaker 1: you want to buy Lucchi Bucchie bag or weave a
Speaker 1: turn back that you buy once a year, or you
Speaker 1: are a point one percent of world's population that that's
Speaker 1: all you buy. You know, you have a great relationship
Speaker 1: with those very expensive brands. But for your everyday luxury
Speaker 1: the like, let me ask you this, how many of
Speaker 1: you the clothes that you're wearing you bought from Amazon?
Speaker 1: Maybe one? Hello, it's two. So so really, if you
Speaker 1: think about it, for your everyday luxury product, you know,
Speaker 1: for everyday lifestyle product, there is no real destination to go.
Speaker 1: You know, you go to either Bricken Motor stores or
Speaker 1: you go to this boutique place. Uh. And that's also
Speaker 1: happening at a time that we're seeing explosion of direct
Speaker 1: to consumer brands. Right everybody is building direct to consumer brands,
Speaker 1: so there is no place for consumers to go find
Speaker 1: to discover new brands, find the brands all out and
Speaker 1: discover new brands. So we are creating a brand discovery
Speaker 1: platform where you can find all the cool brands for
Speaker 1: your everyday luxury plan. And with the convenience for Amazon,
Speaker 1: we now have the fastest free, fastest free online shipping
Speaker 1: in the marketplace, free one day shipping. We put our
Speaker 1: customers support number on the top so that if you
Speaker 1: want to call, you can talk to our customers you know,
Speaker 1: and I read every customers support emails, and so we
Speaker 1: really scan for convenience. We stand for quality, and we
Speaker 1: stand for discovery. So cool Brands does it all high end.
Speaker 1: It's I would call them every day luxury price points
Speaker 1: somewhere studying from seven to seven fifty dollars. What's to
Speaker 1: prevent somebody from going to your site saying okay, like
Speaker 1: this X y Z cool brand, and then going to
Speaker 1: the home site that brand in the future, and some
Speaker 1: people will do that, you know. Uh. The interesting thing
Speaker 1: is that consumers don't like putting their credit card number
Speaker 1: in five hundred different websites, right, so if you have
Speaker 1: a relationship with one reteller who knows you and your
Speaker 1: product shows up, that's a great place to do. The
Speaker 1: second thing is the convenience, right, So because we gregate product,
Speaker 1: we can uh do the delivery like free one day shipping,
Speaker 1: free return, customers, support, all those things that you can't
Speaker 1: get anywhere. And then the third we're bringing a lot
Speaker 1: of exclusive brand partnerships and things like that. So the
Speaker 1: really thing is that what we want to be, Like
Speaker 1: I fundamentally believe for every YouTube where you can go
Speaker 1: find everything, even like horrible things like people committing suicide.
Speaker 1: You need the world of Netflix right and Amazon where
Speaker 1: you can go find everything. They build the world's largest
Speaker 1: flea market. You need a premium lifestyle e commerce destination
Speaker 1: where you can discover cool brands and that we want
Speaker 1: to build a discovery platform and the browsing experience. One
Speaker 1: of the ways that you are sort of grabbing share,
Speaker 1: it seems, is through influencers. That is well known to
Speaker 1: a lot of the influencers in this room. What have
Speaker 1: you learned about them? Because it's not so easy to
Speaker 1: identify the right people to figure out the right essentially
Speaker 1: business model around that, and it's not inexpensive. Sometimes, yeah,
Speaker 1: we're not doing that much with you know, uh, influences.
Speaker 1: To be completely honest with you, I have a philosophy
Speaker 1: is do completely opposite what the world is doing. You know,
Speaker 1: if you look at in New York City, you will
Speaker 1: see our outdoor campaign in the taxi top or if
Speaker 1: you take the subway, you know, you will see a
Speaker 1: very sharp brand train. You know. I think so fundamentally,
Speaker 1: I believe that consumers are smart and if and they
Speaker 1: understand the authenticity you know, and and and the thing
Speaker 1: is that if influencers are too commercial and they're promoting
Speaker 1: too much of the product. I think it doesn't convert
Speaker 1: very well. So you really really have to understand that
Speaker 1: when you engage with the influences is an authentic relationship,
Speaker 1: because I think you really really have to appreciate that
Speaker 1: if you push your product in an inauthentic way, it's
Speaker 1: actually huge turnoff for consumers because consumers know that you're
Speaker 1: trying to dupe them, right, you know the but when
Speaker 1: we started the company, we call it very Shop and
Speaker 1: what is very Shop Verified Shop because we wanted to
Speaker 1: build trust. You know, the world is going from fake
Speaker 1: news to fake people to fake product, and we wanted
Speaker 1: to build this trusted platform. And and so you want
Speaker 1: to do marketing that you want to engage in a
Speaker 1: marketing and trusted with And is it right? One million
Speaker 1: shoppers or not yet? By the by the end of
Speaker 1: the year, you have a free one der shipping right now,
Speaker 1: but no in terms of the number of shoppers that
Speaker 1: are on your site right now? Oh yeah, I think
Speaker 1: by year and we'll have a million unique shoppers on
Speaker 1: a monthly basis. Alright, so we need to switch gear. Yeah,
Speaker 1: we gotta switch he gotta um when you talk about turnofs.
Speaker 1: One of the biggest turnoffs it feels like for the
Speaker 1: market this year and for a lot of people, was
Speaker 1: we work. You've got some thoughts on this. You've been
Speaker 1: watching this market as a banker, as an executive, as
Speaker 1: an entrepreneur, what happened, what went wrong? As you just
Speaker 1: still it down with we work? Um. The one word
Speaker 1: is corporate greed, right. I think the key thing is
Speaker 1: whenever we give someone money, you give them your trust.
Speaker 1: It is a fundamental thing that people don't appreciate that
Speaker 1: that when an investors are forget about investor, your friend
Speaker 1: or your parents or your uncle or and investors give
Speaker 1: you money, they give you the trust. And and when
Speaker 1: you take that money, you have a responsibility. You have
Speaker 1: a responsibility to leave by the trust they give it
Speaker 1: to you. And and I think oftentimes we saw that
Speaker 1: the corporate executives don't appreciate the trust that investors give
Speaker 1: it to them. And at and uh, at we Work,
Speaker 1: we saw the gross, gross negligence of that trust. And yeah, yeah,
Speaker 1: executive level, yes, And the corporate greed is to a
Speaker 1: level that fundamentally I didn't see the since the world
Speaker 1: of what about the role of soft Bank in this,
Speaker 1: right the big investor obviously in we work And what
Speaker 1: about the role of investor and bankers certainly when they
Speaker 1: tried to take it public and obviously all of a
Speaker 1: sudden all these issues came out. Yeah, you know, responsibility
Speaker 1: of investment bankers. So two different questions, you know, I think, Look,
Speaker 1: I think soft Bank as an investors, you have to
Speaker 1: make two decisions. Right. One, you have to analyze the
Speaker 1: investment as a scandal and investment opportunity, and we can
Speaker 1: argue whether we work with a good investment or a
Speaker 1: bad investment from an investment lengths perspective, But what soft
Speaker 1: bank and as an investors, you always have to trust
Speaker 1: the management and you give them the money, and if
Speaker 1: they don't follow through it, you know, I think it's
Speaker 1: very difficult for investors. So I actually sympathize with stob Bank.
Speaker 1: I know everybody blames soft Bank, but I actually sympathize
Speaker 1: with suft Bank because they gave money to someone who
Speaker 1: completely taar around and trying to didn't respect their trust.
Speaker 1: And UH. With regards to investment bank, look, I think
Speaker 1: you know, clearly investment bank would have higher standard of
Speaker 1: due diligence. But you know, the good news is they
Speaker 1: did the due diligence and they disclosed all this information.
Speaker 1: Do you feel like it was too late in the process.
Speaker 1: This is the company that was around for a while.
Speaker 1: I think investment banks. They couldn't have disclosed it before
Speaker 1: the filing anywhere because the company would not let them
Speaker 1: disclose it. Right. So, so when you think about it
Speaker 1: through your your banker lens, your research analysts lens, one
Speaker 1: of the moments where we seem to be is this
Speaker 1: exploration of private markets versus public markets when it comes
Speaker 1: to valuations, when it comes to when money gets put in,
Speaker 1: who makes the money in a lot of ways. You
Speaker 1: saw this in some ways, uh, at your job at SNAP.
Speaker 1: You know, it's sort of that that ride. What do
Speaker 1: you make of where we are at this moment and
Speaker 1: what's it going to take to to maybe fix this chasm,
Speaker 1: as it were, between private valuations and public valuations or
Speaker 1: is it working the way it's supposed to? I think,
Speaker 1: you know, but I think the private market, you know,
Speaker 1: the valuation is arguably you can argue that in many
Speaker 1: cases are inflated, not always many cases, but you know,
Speaker 1: I think I can see why investors like it right
Speaker 1: because you don't have to worry about day to day volatility,
Speaker 1: you know. Now the challenge with the public market, you know,
Speaker 1: is the market is so volatile and investors are short,
Speaker 1: short term oriented, and the people who are giving allocation
Speaker 1: to those investors are so short term oriented that it
Speaker 1: every little piece of news, you know, moves the stock
Speaker 1: every day, and and and that create challenges. So I
Speaker 1: think if you want to build a business for a
Speaker 1: long term and want to make a long term decisions,
Speaker 1: to be honest with you, it's very difficult to do
Speaker 1: that in public market these days. Um So I think
Speaker 1: I understand the excitement and on private market, uh, you know,
Speaker 1: but saying that, you know, a lot of great companies
Speaker 1: were built in a public market and Amazon went public
Speaker 1: very early, Netflix went public very early, you know. But
Speaker 1: I think it's getting more and more challenging. And the
Speaker 1: thing is that also a lot of the funds are
Speaker 1: getting really really big that that they're not really interested
Speaker 1: in a small and MidCap name anymore. So that creates
Speaker 1: a lot of challenges as well. And when when you
Speaker 1: look at and one of the themes that we've identified
Speaker 1: certainly for the year ahead is going to be what
Speaker 1: happens with big technology and the tech lash that we've seen.
Speaker 1: What are your expectations and should some of these companies,
Speaker 1: whether it's Amazon, whether it's Google, whether it's Facebook, should
Speaker 1: they be broken up? In your view? I don't. I
Speaker 1: think my personal view, it's an American to break up
Speaker 1: a company because just because they're big, right, that is
Speaker 1: completely opposite of capitalism. And I think that just saying
Speaker 1: that a company is big and we need to break
Speaker 1: it up, in my view a person who is an
Speaker 1: immigrant to this country, it's not American, uh, saying that
Speaker 1: if these companies are engaged in an situation where they're
Speaker 1: violated clear law, which I'm not aware of. If they're
Speaker 1: violate and the law, then obviously, you know, I think
Speaker 1: regular it should look into it and take action against it,
Speaker 1: whatever the right course of action it is. Well. And
Speaker 1: so let's talk about specifically like the digital ad market.
Speaker 1: In many ways, this is something that you watch from
Speaker 1: a number again of different angles, including in your role
Speaker 1: as chief strategy officer at Snap. What did you learn
Speaker 1: about that market specifically that maybe applies to the broader
Speaker 1: tech world and what did you learn at Snap that
Speaker 1: that you're applying, you know. I think look at Snap,
Speaker 1: when I started building the ad business in January, we
Speaker 1: had zero revenue, and by the time I left, we
Speaker 1: did almost one point six billion dollar anialized revenue. And
Speaker 1: so I think, and we did that in four years.
Speaker 1: So I think, you know, if you can build an
Speaker 1: audience and if you can recruit great team, I think
Speaker 1: you can build a business very fast. I still believe
Speaker 1: that there is an opportunity to build big businesses. You know. Look,
Speaker 1: when I'm not trying to defend anybody, but when Amazon
Speaker 1: came along with Walmart was really big, you know, and
Speaker 1: and and before when Facebook came along, Google was really big.
Speaker 1: Before Google, Microsoft was really big, and they're still big.
Speaker 1: So I think that the disruption is happening at a
Speaker 1: such a rapid pace. There's ten percent of e commerce
Speaker 1: market going to become fort or the cloud computing penetration
Speaker 1: will go so significantly. There's still room for build businesses,
Speaker 1: you know. So so I don't think, you know, targeting
Speaker 1: anybody because they became successful. I just fundamentally don't believe that.
Speaker 1: I think that's a very cynical view of the world,
Speaker 1: you know, And we need to be more, you know, uh,
Speaker 1: you know, have a more positivity about that. But again,
Speaker 1: if somebody broke any law which I'm not aware of,
Speaker 1: obviously should look into it and take action against it.
Speaker 1: If you're wearing your investment bank or hat right now
Speaker 1: and there was a technology that you want to invest
Speaker 1: in or that when you look at the landscape where
Speaker 1: there's AI with a trobotics what have you, or maybe
Speaker 1: something that we're not really talking about enough, where would
Speaker 1: you put your money? I would invest in my business. Okay,
Speaker 1: there's a look I actually think, you know, I actually,
Speaker 1: you know think that there's a lot of talk about AI.
Speaker 1: There's a lot of really really smart people are working
Speaker 1: on AI. You know, there's a lot of talk about
Speaker 1: self driving and these people are actually smarter than me.
Speaker 1: And I cannot really go figure those things out. But
Speaker 1: I look at e commerce in a retail you know,
Speaker 1: it seems like most underrated opportunity because if you really
Speaker 1: believe that seven and a half and ten seven and
Speaker 1: a half to ten percent is the is the number
Speaker 1: where you see accelerated disruption, you know, why wouldn't you
Speaker 1: go to online commerce? And so what's the biggest threat
Speaker 1: then for your business? And for the broader sort of
Speaker 1: e commerce, for that growth rate, What do you worry
Speaker 1: the most about? Maybe not from a competitive standpoint, but
Speaker 1: from a more existential standpoint. I think the market will
Speaker 1: go to whether we will be successful or not. That
Speaker 1: will depend on can we execute right? And so I
Speaker 1: think with our strategies right, are we executing right? You know?
Speaker 1: So so that's only you know, so I would say
Speaker 1: it's it's depends on the team. But overall the market,
Speaker 1: where the market is going, I feel very very confident
Speaker 1: that that's why the worry. Look, I went to the
Speaker 1: north Stone yesterday, you know, this big seventh straight north Stone,
Speaker 1: and after that, you know, my personal two cent I
Speaker 1: was like, I know, media love it, but you guys
Speaker 1: can have a good conversation covers what competitor do you
Speaker 1: most admire and why what competitors? Look, I wouldn't necessarily competitors,
Speaker 1: but look, I think, you know, like what Microsoft has
Speaker 1: done recently, really Satia has done a really amazing job,
Speaker 1: you know, turning around the business. You know, I think
Speaker 1: Amazon continued to impress me what they're doing doing you know.
Speaker 1: And and full disclosure, I own personally share of Amazon
Speaker 1: and Microsoft, so I don't want to feel like pitching
Speaker 1: my books here. But you know, I think there are
Speaker 1: a lot of great companies that continue to execute, a
Speaker 1: lot of small companies that continue to exhibute. All right,
Speaker 1: we're going to use this for an upcoming edition in
Speaker 1: a Business Week talks. And so when we have someone
Speaker 1: like you with us, another question, we like to ask
Speaker 1: his best advice. And this will be our last question.
Speaker 1: What's the best advice a mentor or a boss or
Speaker 1: someone has ever given you to sort of give the
Speaker 1: people something to think about when they go out to lunch.
Speaker 1: Be patient, you know, uh I And as I can see,
Speaker 1: I like to speak fast, talk fast, do everything fast.
Speaker 1: And um, when I was twenty four years old, UM,
Speaker 1: my boss gave me the advice that hey be patient
Speaker 1: and as I look at a lot of the millennial audience,
Speaker 1: you know. Um. And actually I was in a conference
Speaker 1: and I was listening to black Rock president. He was
Speaker 1: talking that how millennials come. They want promotion in six
Speaker 1: months and five five years two years later they want
Speaker 1: his job. And I think, you know, in life, sometimes
Speaker 1: you've got to be patient and uh and work really
Speaker 1: hard and everything works out. That's a great final note everyron.
Speaker 1: Thank you, thank you man, thanks for everybody, thank you,
Speaker 1: thank you. Thanks for listening to Bloomberg Business Week. You
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