1 00:00:02,360 --> 00:00:05,720 Speaker 1: From the heart of where innovation, money and power collive 2 00:00:06,480 --> 00:00:11,000 Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with 3 00:00:11,039 --> 00:00:26,759 Speaker 1: Emily Jay Primily Chang in San Francisco, And this is 4 00:00:26,800 --> 00:00:30,280 Speaker 1: Bloomberg Technology coming up in the next hour. Global recession 5 00:00:30,360 --> 00:00:34,159 Speaker 1: fears ramp up as a federal reserve struggle to tackle 6 00:00:34,479 --> 00:00:38,159 Speaker 1: widespread inflation, the NASTAC one hundred leading the charge in 7 00:00:38,320 --> 00:00:44,240 Speaker 1: tumbling US stocks, lost, potential layoffs, pay and freedom of speech. 8 00:00:44,280 --> 00:00:46,960 Speaker 1: It was all discussed at a virtual meeting with Elon 9 00:00:47,040 --> 00:00:49,800 Speaker 1: Musk and Twitter employees. We're gonna talk to a former 10 00:00:49,840 --> 00:00:54,720 Speaker 1: Twitter insider about the future of the social platform and 11 00:00:54,840 --> 00:00:57,800 Speaker 1: crypto crisis. A conversation with Mike nova Grats of Galaxy 12 00:00:57,840 --> 00:01:01,520 Speaker 1: Digital about when he expects this crisp crypto winter to 13 00:01:01,720 --> 00:01:05,120 Speaker 1: warm up. First, I want to talk about the markets 14 00:01:05,160 --> 00:01:10,320 Speaker 1: with Carol's Life BMO Family Office Deputy Chief Investment Officers. So, Carol, 15 00:01:10,400 --> 00:01:13,520 Speaker 1: how are you reading that up yesterday down today? How 16 00:01:13,520 --> 00:01:16,400 Speaker 1: do you make sense of it all? It's t It 17 00:01:16,480 --> 00:01:18,520 Speaker 1: is definitely tough to make sense of it, but I 18 00:01:18,560 --> 00:01:21,600 Speaker 1: think part of it reflects investors on a day to 19 00:01:21,680 --> 00:01:25,360 Speaker 1: day basis. Yesterday there was some exuberance particularly over Chairman 20 00:01:25,520 --> 00:01:29,560 Speaker 1: Powell's conversation after the actual FED meeting and the FED 21 00:01:29,640 --> 00:01:33,880 Speaker 1: release in the press conference talking about thinking that the 22 00:01:34,000 --> 00:01:38,280 Speaker 1: number of seventy basis point um increases might be limited. 23 00:01:38,319 --> 00:01:42,120 Speaker 1: So markets got a little bit exuberant about that yesterday 24 00:01:42,120 --> 00:01:45,119 Speaker 1: and relieved, if you will. Then flying into today, it's 25 00:01:45,120 --> 00:01:47,640 Speaker 1: sort of like the morning after, and people decided instead 26 00:01:47,640 --> 00:01:50,400 Speaker 1: of focusing on the glass half full, they focus on 27 00:01:50,440 --> 00:01:53,080 Speaker 1: all of the half empty things, and how much narrower 28 00:01:53,200 --> 00:01:56,360 Speaker 1: that makes the Fed's ability to traverse and trying to 29 00:01:56,480 --> 00:01:59,520 Speaker 1: stick a soft landing. So at this point, are you 30 00:01:59,560 --> 00:02:05,120 Speaker 1: thinking a recession is inevitable? Um, it's probably, it's it 31 00:02:05,560 --> 00:02:09,239 Speaker 1: maybe high higher likelihood, if you will. We weren't going 32 00:02:09,240 --> 00:02:12,840 Speaker 1: into this necessarily thinking a recession was highly probable. Markets 33 00:02:12,840 --> 00:02:16,080 Speaker 1: are discounting a seventy chance that you'll see a recession. 34 00:02:16,440 --> 00:02:18,679 Speaker 1: We do think if you see one, however, that it 35 00:02:18,720 --> 00:02:23,040 Speaker 1: will be shorter and then less deep than ever then 36 00:02:23,160 --> 00:02:25,840 Speaker 1: then we've seen in prior recessions. And so a piece 37 00:02:25,840 --> 00:02:28,600 Speaker 1: of that relates to the fact that there is so 38 00:02:28,720 --> 00:02:31,520 Speaker 1: much underlying business strength. And the other thing that goes 39 00:02:31,680 --> 00:02:33,960 Speaker 1: pretty unsung is the fact that a lot of our 40 00:02:34,000 --> 00:02:37,960 Speaker 1: companies have proven to be very adaptable and resilient and 41 00:02:38,160 --> 00:02:40,640 Speaker 1: able to shift their business model, but they're facing a 42 00:02:40,639 --> 00:02:44,919 Speaker 1: lot of challenges and so um the hope everyone is 43 00:02:44,960 --> 00:02:46,720 Speaker 1: waiting with bated breath to see if we're going to 44 00:02:46,800 --> 00:02:49,760 Speaker 1: have that recession, but we don't think it would be sharpened. 45 00:02:51,240 --> 00:02:53,560 Speaker 1: So how is this impacting your approach to tech? Of 46 00:02:53,560 --> 00:02:57,680 Speaker 1: course we're seeing Apple, Tesla, Twitter, mega cap tech stock sinking, 47 00:02:57,720 --> 00:02:59,560 Speaker 1: some other narratives going on there of course with this 48 00:02:59,680 --> 00:03:03,200 Speaker 1: elon Twitter thing, But how are you evolving your strategy 49 00:03:03,200 --> 00:03:05,839 Speaker 1: when it comes to big tech names. I think it's 50 00:03:05,880 --> 00:03:09,440 Speaker 1: not just big tech names, it's thinking through technology in general. 51 00:03:09,919 --> 00:03:14,079 Speaker 1: And typically what we've seen cycle after cycle over decades 52 00:03:14,160 --> 00:03:18,000 Speaker 1: is that what leads going into a recession isn't necessarily 53 00:03:18,000 --> 00:03:20,080 Speaker 1: what leads coming out, and so we might have to 54 00:03:20,120 --> 00:03:23,799 Speaker 1: be more discriminating figuring out where growth and technology comes. 55 00:03:24,160 --> 00:03:26,840 Speaker 1: A lot of the growth in this in the new scenario, 56 00:03:26,919 --> 00:03:32,800 Speaker 1: if you will will be reshoring, building, manufacturing, spending some 57 00:03:32,880 --> 00:03:36,200 Speaker 1: of the trillion dollars in aid money that is still 58 00:03:36,240 --> 00:03:39,240 Speaker 1: in the in the pipeline for infrastructure spend, that will 59 00:03:39,280 --> 00:03:42,760 Speaker 1: require your different kind of technology. So it's gonna require 60 00:03:42,800 --> 00:03:46,000 Speaker 1: investors to think more carefully about where their technology goes. 61 00:03:46,320 --> 00:03:49,600 Speaker 1: It's not necessarily just consumer based tech, which played so 62 00:03:49,680 --> 00:03:53,680 Speaker 1: well over the last couple of years a pandemic. You know, 63 00:03:53,720 --> 00:03:55,880 Speaker 1: we've been talking about the fact that Cisco, you know, 64 00:03:56,000 --> 00:03:58,160 Speaker 1: kind of like a poster child for the dot com bust, 65 00:03:58,320 --> 00:04:02,080 Speaker 1: hit its high before the combust and has since never recovered. 66 00:04:02,120 --> 00:04:04,200 Speaker 1: What do you think are going to be the ciscos 67 00:04:04,360 --> 00:04:09,320 Speaker 1: of this generation. It's tough. We're not necessarily allowed to 68 00:04:09,520 --> 00:04:13,040 Speaker 1: talk individual securities, but I do think looking at industries 69 00:04:13,080 --> 00:04:18,080 Speaker 1: that will support that restoring building and manufacturing and the 70 00:04:18,120 --> 00:04:23,599 Speaker 1: shifting of certain things like where individual people are in 71 00:04:23,720 --> 00:04:27,200 Speaker 1: lower paid or higher risk jobs, and you're automating, so robotics, 72 00:04:27,279 --> 00:04:30,440 Speaker 1: artificial intelligence, sensors, lots of different things that are going 73 00:04:30,480 --> 00:04:34,719 Speaker 1: to play into that new economy as we shift. Um. 74 00:04:34,760 --> 00:04:37,680 Speaker 1: It's not like technology as an entire industry needs to 75 00:04:37,720 --> 00:04:41,599 Speaker 1: be written off or pieces of it, because much of 76 00:04:41,640 --> 00:04:44,120 Speaker 1: it will still continue to play. But it's looking at 77 00:04:44,120 --> 00:04:47,599 Speaker 1: where you're going to have that investment and what industries 78 00:04:47,640 --> 00:04:50,560 Speaker 1: are likely to be able to play into the build out. 79 00:04:51,240 --> 00:04:54,360 Speaker 1: All right, uh cause life Thanks for sharing your views 80 00:04:54,400 --> 00:05:00,479 Speaker 1: with us. BMO Family Office Deputy Chief Investment Officer appreciate it. Meantime, 81 00:05:00,520 --> 00:05:03,719 Speaker 1: it stocks plunge and inflation rises, some companies are trying 82 00:05:03,720 --> 00:05:07,440 Speaker 1: to allure customers with new features. T Mobile just announced 83 00:05:07,440 --> 00:05:10,320 Speaker 1: it is expanding its coverage to hundreds of countries around 84 00:05:10,360 --> 00:05:13,400 Speaker 1: the globe and two flights. Let's get into that and 85 00:05:13,440 --> 00:05:15,440 Speaker 1: how it fits into the macro environment with T Mobile 86 00:05:15,440 --> 00:05:18,680 Speaker 1: CEO Mike sever Mike, always good to have you back 87 00:05:18,720 --> 00:05:20,640 Speaker 1: with us. Tell us about this announcement and why you 88 00:05:20,680 --> 00:05:23,240 Speaker 1: think now with all of this going on, is the 89 00:05:23,320 --> 00:05:27,159 Speaker 1: right time. Well, let's start with now. You know, consumers 90 00:05:27,160 --> 00:05:29,480 Speaker 1: are concerned, Emily, as you've been saying in this whole segment, 91 00:05:29,960 --> 00:05:32,280 Speaker 1: and that's not just about the possibility of a recession 92 00:05:32,320 --> 00:05:34,320 Speaker 1: that may or may not unfold throughout the rest of 93 00:05:34,320 --> 00:05:38,640 Speaker 1: this year. Consumers are feeling the pinch right now and 94 00:05:38,720 --> 00:05:40,720 Speaker 1: our view as we can use the size and the 95 00:05:40,760 --> 00:05:43,320 Speaker 1: scale of T Mobile to help. And what's interesting is 96 00:05:43,560 --> 00:05:46,960 Speaker 1: summers here and after two years, while feeling the pinch, 97 00:05:47,240 --> 00:05:50,320 Speaker 1: customers want to get out there and travel. Travels back 98 00:05:50,440 --> 00:05:55,279 Speaker 1: spendings up at at higher than pre pandemic levels, and 99 00:05:55,320 --> 00:05:57,560 Speaker 1: so you have this dual force, a desire to travel, 100 00:05:57,880 --> 00:06:00,719 Speaker 1: combined with pinched pockets, and we're here to help. And 101 00:06:00,760 --> 00:06:03,880 Speaker 1: so today's announcements are all about making travel easier for 102 00:06:03,920 --> 00:06:07,520 Speaker 1: the tens of millions of T mobile customers everywhere. I 103 00:06:07,600 --> 00:06:11,000 Speaker 1: have to ask your thoughts on the macro economic environment. 104 00:06:11,040 --> 00:06:13,760 Speaker 1: What do you see over the next six to twelve months. 105 00:06:13,760 --> 00:06:16,240 Speaker 1: If Elon Musks has a super bad feeling about the 106 00:06:16,279 --> 00:06:20,159 Speaker 1: economy and Jamie diamond says we're headed for an economic hurricane, 107 00:06:20,160 --> 00:06:23,479 Speaker 1: You've got the World Bank slashing their growth forecast, how 108 00:06:23,480 --> 00:06:25,960 Speaker 1: are you watching all of this? Well, I can tell 109 00:06:26,000 --> 00:06:28,000 Speaker 1: you that you know, we're in touch with our customers 110 00:06:28,040 --> 00:06:31,000 Speaker 1: and they're concerned. And my view is our job when 111 00:06:31,040 --> 00:06:34,200 Speaker 1: we have customers that are concerned about the economic situation 112 00:06:34,640 --> 00:06:37,200 Speaker 1: is to be ready to help. And that's why we're 113 00:06:37,240 --> 00:06:39,039 Speaker 1: doing the things that we're doing. And it's so different 114 00:06:39,040 --> 00:06:41,120 Speaker 1: than the rest of the industry. You know, our competitors 115 00:06:41,520 --> 00:06:44,320 Speaker 1: over the last month have, at this very moment, while 116 00:06:44,400 --> 00:06:47,560 Speaker 1: consumers are concerned about everything you're asking about, have done 117 00:06:47,600 --> 00:06:51,800 Speaker 1: two billion dollars of price increases between them. And so 118 00:06:51,839 --> 00:06:54,960 Speaker 1: it really showcases how different our strategy is. Ours is 119 00:06:55,000 --> 00:06:58,920 Speaker 1: to look forward at what's unfolding, understand the concerned consumers 120 00:06:58,960 --> 00:07:02,240 Speaker 1: have and poor value into our plans so that we 121 00:07:02,279 --> 00:07:04,840 Speaker 1: can help them. And by the way, this isn't just altruistic. 122 00:07:04,839 --> 00:07:07,479 Speaker 1: If we help them, it makes our most popular plan 123 00:07:07,600 --> 00:07:11,320 Speaker 1: more popular, Magenta Max. And if that continues to gain popularity, 124 00:07:11,360 --> 00:07:14,880 Speaker 1: well that helps our revenues to and everyone wins. So 125 00:07:15,280 --> 00:07:18,080 Speaker 1: you did raise some fees on on millions of customers 126 00:07:18,120 --> 00:07:21,920 Speaker 1: wireless bills earlier this year, and I'm curious how as 127 00:07:21,960 --> 00:07:29,000 Speaker 1: we move forward your plan to navigate inflation is evolving. Well, 128 00:07:29,000 --> 00:07:31,080 Speaker 1: one of the things that makes us different is that 129 00:07:31,120 --> 00:07:33,960 Speaker 1: we have what's called price lock, and so what we 130 00:07:34,000 --> 00:07:36,880 Speaker 1: don't do is take the fee that you signed up 131 00:07:36,920 --> 00:07:39,360 Speaker 1: for and during the term of an agreement with you 132 00:07:39,680 --> 00:07:42,680 Speaker 1: is change your price your ongoing price per month. And 133 00:07:42,720 --> 00:07:45,600 Speaker 1: so that's really important to people right now. And by 134 00:07:45,600 --> 00:07:48,200 Speaker 1: the way, our business as an industry and as a 135 00:07:48,240 --> 00:07:51,000 Speaker 1: sector is a little different than some We are probably 136 00:07:51,080 --> 00:07:55,160 Speaker 1: more insulated from inflationary pressures as a company than many 137 00:07:55,200 --> 00:07:57,600 Speaker 1: businesses and other sectors. You know, we have long term 138 00:07:57,640 --> 00:08:03,240 Speaker 1: tower contracts, long term connectivity contracts, long term technology contracts 139 00:08:03,240 --> 00:08:05,960 Speaker 1: with our tech vendors, and so those things insulate us 140 00:08:06,000 --> 00:08:08,880 Speaker 1: somewhat and allow us to do things like today's news. 141 00:08:08,880 --> 00:08:11,880 Speaker 1: You know, we're pouring hundreds of millions of dollars of 142 00:08:11,880 --> 00:08:16,040 Speaker 1: incremental value into Magenta Max and making travel easier for 143 00:08:16,120 --> 00:08:20,120 Speaker 1: customers by doing something nobody has ever done before, which 144 00:08:20,200 --> 00:08:23,720 Speaker 1: is put globally high speed data right into our most 145 00:08:23,720 --> 00:08:27,600 Speaker 1: popular plan at no extra charge. Plus connect you on 146 00:08:27,640 --> 00:08:30,600 Speaker 1: all of your flights for free on the most popular 147 00:08:30,640 --> 00:08:35,200 Speaker 1: airlines American, Delta, Alaska and coming soon United. No one's 148 00:08:35,200 --> 00:08:38,040 Speaker 1: ever done anything like this before. And you know, there's 149 00:08:38,080 --> 00:08:42,240 Speaker 1: so much to today's news, but it's about making travel easier. Now, 150 00:08:42,360 --> 00:08:46,640 Speaker 1: we are seeing a number of different companies hiring freezes, layoffs. 151 00:08:46,880 --> 00:08:49,120 Speaker 1: Are you considering are you having to make any cost 152 00:08:49,160 --> 00:08:52,439 Speaker 1: cutting measures? Um? Do you have any plans like that? 153 00:08:53,679 --> 00:08:56,520 Speaker 1: We're executing our post merger playbook and by the way, 154 00:08:56,559 --> 00:09:01,080 Speaker 1: I'll remind you, was the biggest growth here in our history. 155 00:09:01,440 --> 00:09:04,040 Speaker 1: The first quarter was the biggest growth queue one in 156 00:09:04,080 --> 00:09:07,240 Speaker 1: our history on new accounts. And so we're executing our 157 00:09:07,360 --> 00:09:10,760 Speaker 1: successful business plan. And obviously, over time we have to 158 00:09:10,800 --> 00:09:13,560 Speaker 1: be really smart about how we manage our company and 159 00:09:13,600 --> 00:09:16,480 Speaker 1: we'll do that. UM. But look, this is a model 160 00:09:16,520 --> 00:09:20,080 Speaker 1: that's unfolding exactly like we told investors it would unfold 161 00:09:20,240 --> 00:09:22,120 Speaker 1: when we did our analysts day and laid out our 162 00:09:22,160 --> 00:09:26,440 Speaker 1: five year plan last spring. All right, Mike Sivert, CEO 163 00:09:26,720 --> 00:09:28,800 Speaker 1: of T Mobile, Good to have you back with us. 164 00:09:28,840 --> 00:09:30,760 Speaker 1: Thanks for sharing the news with us, and hear your 165 00:09:30,840 --> 00:09:35,600 Speaker 1: views on the macro environment ahead. Meantime, the world largest 166 00:09:35,800 --> 00:09:39,600 Speaker 1: theater chain is once again branching out. AMC will create 167 00:09:39,640 --> 00:09:42,320 Speaker 1: a one million dollar fund to invest in other businesses. 168 00:09:42,400 --> 00:09:45,319 Speaker 1: That's from CEO Adam Aaron at the company's annual meeting. 169 00:09:45,440 --> 00:09:48,439 Speaker 1: A MCS board approve this plan, but Aaron didn't say 170 00:09:48,440 --> 00:09:51,079 Speaker 1: where the cash will come from. In March, am C 171 00:09:51,440 --> 00:09:56,440 Speaker 1: bought of high Craft Mining, a gold and silver mining stock. 172 00:09:57,480 --> 00:10:00,720 Speaker 1: Coming up. Musk stands his ground, tell us Twitter employees 173 00:10:00,720 --> 00:10:05,280 Speaker 1: the platform should allow quote pretty outrageous, thinks more on 174 00:10:05,360 --> 00:10:08,520 Speaker 1: his virtual visit to the all hands meeting next this 175 00:10:08,640 --> 00:10:38,400 Speaker 1: is Bloomberg. Ellen Musk took questions from Twitter employees at 176 00:10:38,400 --> 00:10:41,240 Speaker 1: an all hands meeting, addressing everything from potential layoffs to 177 00:10:41,280 --> 00:10:44,600 Speaker 1: remote work to his vision for free speech on the platform. 178 00:10:44,720 --> 00:10:47,520 Speaker 1: Musk didn't address whether he was committed to a deal 179 00:10:48,000 --> 00:10:50,680 Speaker 1: to buy Twitter. We're joined out by former Twitter employee 180 00:10:50,679 --> 00:10:53,440 Speaker 1: clar Diaz. Ortiz, author of a book called Twitter for Good. 181 00:10:53,520 --> 00:10:56,760 Speaker 1: She's also currently a venture scout at Kleiner Perkins. Bloomberg's 182 00:10:56,840 --> 00:11:00,280 Speaker 1: Ed Ludlow here as well. And you were obviously covering 183 00:11:00,320 --> 00:11:02,560 Speaker 1: the meeting in real time. We had the contents of 184 00:11:02,600 --> 00:11:05,240 Speaker 1: the meeting leak to Bloomberg in real time. Just remind 185 00:11:05,320 --> 00:11:09,319 Speaker 1: us what happened, what the flashpoints. You're right to phrase 186 00:11:09,360 --> 00:11:11,400 Speaker 1: it in that it's what he did not say, because 187 00:11:11,400 --> 00:11:13,160 Speaker 1: he had been built and reported in the Wall Street 188 00:11:13,200 --> 00:11:16,400 Speaker 1: Journal that he kind of outline his interest in buying 189 00:11:16,400 --> 00:11:20,000 Speaker 1: the company, you know, and and he didn't explicitly say 190 00:11:20,080 --> 00:11:22,680 Speaker 1: I'm committed to this deal, but he wasn't explicitly asked 191 00:11:22,679 --> 00:11:25,520 Speaker 1: if he was not explicitly asked, And basically how this 192 00:11:25,559 --> 00:11:28,760 Speaker 1: works was Twitter staff were invited to ask questions through 193 00:11:28,760 --> 00:11:32,959 Speaker 1: an internal Slack channel. Those questions were aggregated by U, 194 00:11:33,640 --> 00:11:36,079 Speaker 1: the CMO, who then asked the dealon must But you know, 195 00:11:36,160 --> 00:11:38,400 Speaker 1: he did give some really interesting insight into how he 196 00:11:38,520 --> 00:11:40,920 Speaker 1: changed the platform. You know, he actually left the door 197 00:11:40,920 --> 00:11:44,640 Speaker 1: open to advertising model, which was interesting because many assumed 198 00:11:44,640 --> 00:11:46,679 Speaker 1: that the ad model wasn't good. In his mind, he 199 00:11:46,720 --> 00:11:49,440 Speaker 1: talked about subscriptions being good, but the one that really 200 00:11:49,480 --> 00:11:52,720 Speaker 1: jumped out of me was this idea that he would 201 00:11:52,800 --> 00:11:57,320 Speaker 1: charge users for verification to verify that you're an actual 202 00:11:57,600 --> 00:11:59,640 Speaker 1: human as opposed to a bot, and obviously bought the 203 00:11:59,679 --> 00:12:01,959 Speaker 1: top of mind Frelon Musk, Claire, what do you make 204 00:12:02,040 --> 00:12:04,800 Speaker 1: of Let's start with the business plan. So I think 205 00:12:05,080 --> 00:12:08,640 Speaker 1: you know, some of these ideas are great. The verification program, 206 00:12:08,679 --> 00:12:10,560 Speaker 1: if you can call it, that has been broken since 207 00:12:10,600 --> 00:12:12,960 Speaker 1: it was created, so it would be fantastic if someone 208 00:12:12,960 --> 00:12:14,520 Speaker 1: comes in with some idea to fix that. And I 209 00:12:14,559 --> 00:12:17,160 Speaker 1: don't know the nuances of it, if charging is actually 210 00:12:17,160 --> 00:12:19,400 Speaker 1: a good idea or not. Yeah, But I think the 211 00:12:19,480 --> 00:12:21,760 Speaker 1: larger question here is just like I think all of 212 00:12:21,800 --> 00:12:23,560 Speaker 1: this is sort of window dressing. I don't think Elon 213 00:12:23,640 --> 00:12:26,320 Speaker 1: Musk wants to buy Twitter anymore. Right, His idea, if 214 00:12:26,320 --> 00:12:28,000 Speaker 1: you don't know, dumming, His idea was that if you 215 00:12:28,120 --> 00:12:31,000 Speaker 1: charge people, and he didn't put a price on it, 216 00:12:31,040 --> 00:12:34,440 Speaker 1: but to verify if you run a scam or a 217 00:12:34,480 --> 00:12:37,400 Speaker 1: spam or a organization where you have lots of accounts. 218 00:12:37,720 --> 00:12:40,439 Speaker 1: He kind of talks about disincentivizing bonds that to make 219 00:12:40,480 --> 00:12:43,440 Speaker 1: it so expensive they're having a load of fake accounts 220 00:12:43,520 --> 00:12:45,800 Speaker 1: is not worth as will be. Is that going to work? 221 00:12:46,000 --> 00:12:47,679 Speaker 1: And maybe it would work. I don't know. Twitter says 222 00:12:47,720 --> 00:12:49,760 Speaker 1: they've had less than five percent boats other people say 223 00:12:49,800 --> 00:12:52,360 Speaker 1: they have up to But is this relevant? I mean, 224 00:12:52,440 --> 00:12:55,640 Speaker 1: isn't sort of this whole elon Musk buy Twitter, dumpster 225 00:12:55,720 --> 00:12:59,080 Speaker 1: fire just kind of like extending on and on and on. 226 00:12:59,120 --> 00:13:01,560 Speaker 1: What do you think I I don't think he wants it. 227 00:13:01,640 --> 00:13:03,679 Speaker 1: I mean, you have kids. I have kids. There are 228 00:13:03,679 --> 00:13:05,360 Speaker 1: a lot of them in my house. When they want 229 00:13:05,360 --> 00:13:07,480 Speaker 1: a cookie, they start throwing a tantrum and eventually they 230 00:13:07,480 --> 00:13:10,000 Speaker 1: don't want the cookie anymore, but they're still throwing the tantrum. 231 00:13:10,360 --> 00:13:13,800 Speaker 1: I don't think he wants this. So you know, today 232 00:13:13,800 --> 00:13:16,240 Speaker 1: he says you should be able to say pretty outrageous 233 00:13:16,280 --> 00:13:19,480 Speaker 1: things on Twitter short of anything that breaks the law. 234 00:13:19,720 --> 00:13:22,920 Speaker 1: Is that good enough as a content moderation policy? That's 235 00:13:22,920 --> 00:13:24,240 Speaker 1: not good enough at all. I mean, I think you've 236 00:13:24,240 --> 00:13:26,719 Speaker 1: talked to Jason Goldman, one of my favorite bosses when 237 00:13:26,720 --> 00:13:28,640 Speaker 1: I worked there, and he's I think said it best 238 00:13:28,640 --> 00:13:29,920 Speaker 1: when he said that, you know, if you take the 239 00:13:29,920 --> 00:13:33,080 Speaker 1: guardrails off the platform, that in definition is anti free 240 00:13:33,160 --> 00:13:36,080 Speaker 1: speech because you're preventing a bunch of people from being 241 00:13:36,080 --> 00:13:37,960 Speaker 1: able to say anything because they don't feel safe on it. 242 00:13:39,679 --> 00:13:41,800 Speaker 1: Talking to Twitter employees who are still there today, I mean, 243 00:13:41,920 --> 00:13:44,280 Speaker 1: how do they feel? How do I feel for them? 244 00:13:44,360 --> 00:13:47,520 Speaker 1: I feel sad. I feel very sad. These are very smart, 245 00:13:47,760 --> 00:13:50,760 Speaker 1: wise people, you know, supporting families, and they're stuck in 246 00:13:50,800 --> 00:13:52,800 Speaker 1: the middle of this. And you know, I, like everyone else, 247 00:13:52,840 --> 00:13:54,800 Speaker 1: makes jokes on Twitter all the time about it because 248 00:13:54,800 --> 00:13:57,200 Speaker 1: it's so ridiculous and it just doesn't seem to end. 249 00:13:57,720 --> 00:13:59,839 Speaker 1: But but these are real people. I think it's pointing 250 00:13:59,840 --> 00:14:02,160 Speaker 1: out what Elomas said as well as it relates to 251 00:14:02,160 --> 00:14:04,400 Speaker 1: the staff. You know, the idea of work from home 252 00:14:04,480 --> 00:14:07,920 Speaker 1: remote work was really went over and over, and must 253 00:14:07,920 --> 00:14:11,080 Speaker 1: made the point that if you do excellent work, you 254 00:14:11,120 --> 00:14:13,560 Speaker 1: may have an exception to be a remote worker. But 255 00:14:13,640 --> 00:14:16,720 Speaker 1: he kind of seems to suggest that it's not gonna happen. 256 00:14:16,760 --> 00:14:18,800 Speaker 1: This is after Jack Dorsey had decided two years ago 257 00:14:18,840 --> 00:14:21,800 Speaker 1: that Twitter employees could work from home forever. So that 258 00:14:21,840 --> 00:14:24,000 Speaker 1: and that, I think, at least in our reporting of 259 00:14:24,040 --> 00:14:27,000 Speaker 1: the meeting, was the most disruptive part of it. You 260 00:14:27,040 --> 00:14:30,120 Speaker 1: had like absolute the employee chat just lighting up with it, 261 00:14:30,120 --> 00:14:32,760 Speaker 1: and he's saying excellent work. That's like Silicon Valley code 262 00:14:32,800 --> 00:14:34,840 Speaker 1: for saying, you know, if you're the best bro, we'll 263 00:14:34,920 --> 00:14:36,720 Speaker 1: let you work from home, but everyone else has to 264 00:14:36,760 --> 00:14:39,200 Speaker 1: be in the office. I think what's interesting for me 265 00:14:39,240 --> 00:14:41,000 Speaker 1: and I'd love your take on this is he talks 266 00:14:41,000 --> 00:14:43,360 Speaker 1: about what Twitter would look like as a private company 267 00:14:43,360 --> 00:14:45,240 Speaker 1: and compensation is is a big part of that. He 268 00:14:45,240 --> 00:14:47,760 Speaker 1: said it would be like SpaceX, where you have stock 269 00:14:47,800 --> 00:14:50,760 Speaker 1: and options awards a liquidity event every six months, which 270 00:14:50,760 --> 00:14:53,040 Speaker 1: I think he means stock would be able to trade 271 00:14:53,040 --> 00:14:56,680 Speaker 1: on the secondaries market. Um, but Twitter is kind of 272 00:14:56,680 --> 00:14:59,640 Speaker 1: like a San Francisco Silicon Valley mainstay. It has a culture. 273 00:15:01,720 --> 00:15:03,760 Speaker 1: How does that quote to change? I think the culture 274 00:15:03,800 --> 00:15:06,360 Speaker 1: will change dramatically. But I don't think employees are stupid, 275 00:15:06,400 --> 00:15:08,000 Speaker 1: you know. I mean at the beginning of this whole 276 00:15:08,000 --> 00:15:11,120 Speaker 1: sort of journey, we we all sort of I think 277 00:15:11,160 --> 00:15:14,000 Speaker 1: many of us thought this could actually be an interesting 278 00:15:14,040 --> 00:15:18,000 Speaker 1: but crazy idea. You know, Twitter stock has historically underperformed. 279 00:15:18,040 --> 00:15:19,720 Speaker 1: All of us who are early employees have probably cried 280 00:15:19,760 --> 00:15:21,560 Speaker 1: into our bank statements as sometime that we you know, 281 00:15:21,600 --> 00:15:23,840 Speaker 1: didn't work at LinkedIn instead or whatever. The talk. The 282 00:15:23,880 --> 00:15:26,760 Speaker 1: stock has been performing really badly since an I p O. 283 00:15:26,880 --> 00:15:28,400 Speaker 1: So I think there was some sort of a hope 284 00:15:28,800 --> 00:15:31,480 Speaker 1: that maybe this crazy idea could do something good, But 285 00:15:31,520 --> 00:15:34,280 Speaker 1: I think at this point it's just derailed. So where 286 00:15:34,280 --> 00:15:36,120 Speaker 1: does this leave Twitter? I mean, he you know, he 287 00:15:36,160 --> 00:15:38,680 Speaker 1: has these lofty goals get to a billion users. Again, 288 00:15:38,760 --> 00:15:40,960 Speaker 1: we don't know if he's still really committed to to 289 00:15:41,040 --> 00:15:44,040 Speaker 1: buying the platform, but he's got a deal assigned deal 290 00:15:44,160 --> 00:15:48,200 Speaker 1: that binds him to buying the platform. Nobody knows how 291 00:15:48,240 --> 00:15:50,040 Speaker 1: this is all going to play out. I think we 292 00:15:50,080 --> 00:15:52,520 Speaker 1: should acknowledge there is a contingent of people who are 293 00:15:52,720 --> 00:15:56,360 Speaker 1: super excited about Elon Musk buying Twitter, including some people 294 00:15:57,040 --> 00:16:01,200 Speaker 1: at the company. Um. I think the very best thing 295 00:16:01,240 --> 00:16:05,320 Speaker 1: that could happen in this situation is like like I 296 00:16:05,400 --> 00:16:08,120 Speaker 1: act with my toddlers when they're out of control. I 297 00:16:08,520 --> 00:16:11,160 Speaker 1: think we can convince Ellen he has won in some 298 00:16:11,200 --> 00:16:13,800 Speaker 1: way by giving him something, but then making this all 299 00:16:13,840 --> 00:16:16,440 Speaker 1: go away in some legal manner, something like what kind 300 00:16:16,440 --> 00:16:18,480 Speaker 1: of something? I don't know. Well, he said he wasn't 301 00:16:18,520 --> 00:16:21,520 Speaker 1: interested in the CEO role necessarily. He said he was 302 00:16:21,520 --> 00:16:24,760 Speaker 1: more focused on product development than a title. But from 303 00:16:24,800 --> 00:16:27,200 Speaker 1: what you know about Twitter, is the bod thing as 304 00:16:27,240 --> 00:16:29,640 Speaker 1: big a problem as he seems to think it is um. 305 00:16:29,680 --> 00:16:31,920 Speaker 1: I think we all think that that's just cover for 306 00:16:32,000 --> 00:16:34,360 Speaker 1: what's happening. Right. I'm sure there's a bod problem. There 307 00:16:34,360 --> 00:16:37,520 Speaker 1: always has been. But this is his, this is his out. 308 00:16:37,920 --> 00:16:40,240 Speaker 1: And remind us what the next steps are, the time 309 00:16:40,240 --> 00:16:43,880 Speaker 1: frame for this to this this to actually move forward, 310 00:16:44,320 --> 00:16:47,560 Speaker 1: standard deal stuff, schedule a vote with the shareholders. You know, 311 00:16:47,680 --> 00:16:49,880 Speaker 1: the board has given its unanimous approval of this deal 312 00:16:49,920 --> 00:16:52,960 Speaker 1: at twenty cents to share. As far as Twitter's concerned, 313 00:16:52,960 --> 00:16:54,920 Speaker 1: mindstanding that you want to hold him to the terms 314 00:16:54,920 --> 00:16:59,000 Speaker 1: of the deal. Signed, all right, basic stuff basic indeed 315 00:16:59,240 --> 00:17:02,160 Speaker 1: or not basic at home? And thank you, Claire. Thank 316 00:17:02,200 --> 00:17:05,600 Speaker 1: you for sharing your very unvarnished view of the state 317 00:17:05,600 --> 00:17:16,359 Speaker 1: of flight. Thank you, Clary as artees Now to a 318 00:17:16,359 --> 00:17:18,880 Speaker 1: few other stories we continue to watch. Tesla has hiked 319 00:17:18,880 --> 00:17:21,160 Speaker 1: prices across its line up by as much as six 320 00:17:21,160 --> 00:17:24,359 Speaker 1: thousand dollars. This at least the third price hype for 321 00:17:24,400 --> 00:17:27,040 Speaker 1: Tesla this year. CEO Elon must said earlier this week. 322 00:17:27,040 --> 00:17:29,720 Speaker 1: The electric car company has weathered a tough patch the 323 00:17:29,800 --> 00:17:33,800 Speaker 1: last three months, facing a month long lockdown in Shanghai 324 00:17:34,000 --> 00:17:38,960 Speaker 1: and supply chain snarls that have challenged production and Musk 325 00:17:39,040 --> 00:17:42,399 Speaker 1: and his companies Tesla and SpaceX were sued for billion 326 00:17:42,440 --> 00:17:45,399 Speaker 1: dollars over claims they're part of a racketeering scheme to 327 00:17:45,440 --> 00:17:48,959 Speaker 1: back the cryptocurrency dog Point. A man named Keith Johnson 328 00:17:48,960 --> 00:17:50,720 Speaker 1: is seeking to represent a class of people who have 329 00:17:50,800 --> 00:17:54,679 Speaker 1: lost money trading in DOS since April. He's asking for 330 00:17:54,720 --> 00:17:58,119 Speaker 1: eighty six billion dollars in damages, plus triple damages of 331 00:17:58,400 --> 00:18:02,280 Speaker 1: a hundred seventy two billion dollars, and an order blocking 332 00:18:02,359 --> 00:18:06,040 Speaker 1: musk At his companies from promoting dose coin. He also 333 00:18:06,040 --> 00:18:10,000 Speaker 1: wants the court to declare does trading constitutes gambling under 334 00:18:10,160 --> 00:18:15,080 Speaker 1: US and New York law. Inflation market turmoil investors pulling 335 00:18:15,119 --> 00:18:18,520 Speaker 1: back has many a startup tightening their belts and cutting costs. 336 00:18:18,680 --> 00:18:21,199 Speaker 1: But there's one new unicorn that didn't wait for the 337 00:18:21,240 --> 00:18:24,760 Speaker 1: downturn to be thirsty or maybe it's savvy. Start up 338 00:18:24,960 --> 00:18:29,080 Speaker 1: Vanta helps businesses protect against dated breaches. It's co founder 339 00:18:29,119 --> 00:18:32,680 Speaker 1: and CEO, Christina Cassiopo, joins US now along with David Sachs, 340 00:18:32,680 --> 00:18:36,520 Speaker 1: a partner at Craft Vncher's who led the investment in Vanta. 341 00:18:36,680 --> 00:18:38,400 Speaker 1: Thank you both so much for joining us. Christina, I'll 342 00:18:38,400 --> 00:18:41,359 Speaker 1: start with you. You started off in venture capital. You 343 00:18:41,440 --> 00:18:43,840 Speaker 1: worked in product at drop Box and you left to 344 00:18:43,960 --> 00:18:46,600 Speaker 1: form Vanta. What is the problem that you're trying to 345 00:18:46,640 --> 00:18:51,040 Speaker 1: solve here? So really broadly, we're trying to help software 346 00:18:51,040 --> 00:18:55,680 Speaker 1: companies be more trustworthy with their customers and build that trust. 347 00:18:56,000 --> 00:18:57,920 Speaker 1: And so the way we do that is help those 348 00:18:57,920 --> 00:19:01,320 Speaker 1: software companies improve their secure artie and then go off 349 00:19:01,320 --> 00:19:04,399 Speaker 1: and prove it, often through something like a compliance at it, 350 00:19:04,720 --> 00:19:08,119 Speaker 1: a stock to GDPR hit the you know, showing that 351 00:19:08,160 --> 00:19:11,560 Speaker 1: they're taking these regulations seriously and really using them as 352 00:19:11,560 --> 00:19:15,760 Speaker 1: an opportunity to build trust with their customers and ultimately 353 00:19:15,760 --> 00:19:19,879 Speaker 1: grow their revenue in businesses. Now, David, I know a 354 00:19:19,920 --> 00:19:22,199 Speaker 1: lot of investors are being very careful about where they 355 00:19:22,200 --> 00:19:26,320 Speaker 1: put their money right now. What attracted you to this company? Well, 356 00:19:26,640 --> 00:19:28,359 Speaker 1: Vanta as a company have been interested in for a 357 00:19:28,359 --> 00:19:31,000 Speaker 1: long time. UM. We started to notice a number of 358 00:19:31,040 --> 00:19:34,199 Speaker 1: years ago that many of our portfolio companies were using Vanta. 359 00:19:34,440 --> 00:19:36,240 Speaker 1: You know, we invest in a lot of SAS companies 360 00:19:36,240 --> 00:19:39,760 Speaker 1: and we saw Vanta becoming a critical enabler for SAS 361 00:19:39,760 --> 00:19:42,000 Speaker 1: companies that want to sell into enterprises. Basically, if you 362 00:19:42,040 --> 00:19:44,920 Speaker 1: want to sell enterprise deals, you have to get a 363 00:19:44,960 --> 00:19:48,600 Speaker 1: stock to certification you have to do twenty seven thousand one. 364 00:19:49,000 --> 00:19:51,080 Speaker 1: You have to comply with pc I and g D 365 00:19:51,200 --> 00:19:53,800 Speaker 1: p R. And we saw that the market was shifting 366 00:19:53,880 --> 00:19:57,760 Speaker 1: from using high priced, expensive and slow consultants to using 367 00:19:57,800 --> 00:20:00,640 Speaker 1: a software platform like Vanta. So we wanted to invest 368 00:20:00,680 --> 00:20:02,800 Speaker 1: in Banta for a long time, and when the opportunity 369 00:20:02,800 --> 00:20:05,880 Speaker 1: came up, despite their being this downturn, we really jumped 370 00:20:05,920 --> 00:20:09,399 Speaker 1: up the opportunity. So Christina talked to us about this 371 00:20:09,520 --> 00:20:12,720 Speaker 1: costco coffee only approach. I mean, I don't I love 372 00:20:12,760 --> 00:20:17,479 Speaker 1: actually food at Costco, but I understand that you guys 373 00:20:17,560 --> 00:20:20,879 Speaker 1: have been very conscious about, you know, keeping costs down, 374 00:20:21,080 --> 00:20:25,240 Speaker 1: you know, even before we found ourselves in this macro environment. Yes, 375 00:20:25,359 --> 00:20:27,840 Speaker 1: you mentioned. I was fortunate to start my career at 376 00:20:27,840 --> 00:20:30,600 Speaker 1: an early stage VC firm and unit to grad Ventures 377 00:20:30,640 --> 00:20:32,720 Speaker 1: and learned a lot there um. And one thing in 378 00:20:32,760 --> 00:20:37,000 Speaker 1: particular was that investors prefer funding businesses that don't really 379 00:20:37,040 --> 00:20:40,440 Speaker 1: need funding, um. And that's just informed how we've froun 380 00:20:40,560 --> 00:20:44,959 Speaker 1: Banta from the early days is to grow and be aggressive, 381 00:20:45,040 --> 00:20:47,479 Speaker 1: but also do so with an eye to controlling our 382 00:20:47,520 --> 00:20:50,760 Speaker 1: own destiny um. And so one early example of that 383 00:20:51,080 --> 00:20:53,640 Speaker 1: is we actually got to ten million dollars in revenue 384 00:20:53,760 --> 00:20:57,720 Speaker 1: onjust a seed round. Uh. And again some of that were, 385 00:20:57,760 --> 00:21:00,480 Speaker 1: you know, hopefully printing business decisions. And then there's a 386 00:21:00,520 --> 00:21:02,520 Speaker 1: lot of things kind of like the cost co coffee 387 00:21:02,600 --> 00:21:06,199 Speaker 1: that both help cut some costs that you might be 388 00:21:06,240 --> 00:21:09,760 Speaker 1: spending otherwise, and they're just a helpful cultural signal to 389 00:21:09,800 --> 00:21:12,320 Speaker 1: folks that you know, hey, we're here to build a business. 390 00:21:12,560 --> 00:21:16,800 Speaker 1: That's what's most important. David, you know, what's your advice 391 00:21:16,840 --> 00:21:19,640 Speaker 1: to start ups right now? In this macro environment, all 392 00:21:19,640 --> 00:21:22,679 Speaker 1: of this uncertainty. You had people comparing this to the 393 00:21:22,760 --> 00:21:26,400 Speaker 1: dot com bust. Mm hmmm, Well, this is clearly one 394 00:21:26,400 --> 00:21:29,040 Speaker 1: of the top three worst downturns that Silicon Valley has 395 00:21:29,080 --> 00:21:30,960 Speaker 1: seen in the last twenty years, along with the dot 396 00:21:30,960 --> 00:21:33,400 Speaker 1: com crash back in two thousand and then the Great 397 00:21:33,400 --> 00:21:36,440 Speaker 1: Recession in two thousand eight, and so I think this 398 00:21:36,480 --> 00:21:38,439 Speaker 1: one is on track to be worse than two thousand eight. 399 00:21:38,440 --> 00:21:40,520 Speaker 1: I don't think somebody as bad as two thousand, but 400 00:21:40,560 --> 00:21:43,040 Speaker 1: I think founders need to get aware that we are 401 00:21:43,080 --> 00:21:46,479 Speaker 1: probably headed into recession. The capital raising environment is very 402 00:21:46,480 --> 00:21:48,720 Speaker 1: different than it was last year. They need to lengthen 403 00:21:48,760 --> 00:21:52,159 Speaker 1: their runway advising all of our portfolio companies to try 404 00:21:52,240 --> 00:21:54,080 Speaker 1: and have at least two and a half years runway, 405 00:21:54,119 --> 00:21:56,800 Speaker 1: because you can't wait till the very end to raise. 406 00:21:57,119 --> 00:21:58,400 Speaker 1: So if you want to have two years to work 407 00:21:58,400 --> 00:22:00,440 Speaker 1: on your business, you actually need to a half years 408 00:22:00,440 --> 00:22:04,640 Speaker 1: of runway. So we are advising our founders cut your burn. Uh, 409 00:22:04,680 --> 00:22:07,960 Speaker 1: you know, do everything you can to survive this this downturn. 410 00:22:08,040 --> 00:22:10,679 Speaker 1: And I think, you know, Vanta one of the reasons 411 00:22:10,720 --> 00:22:12,840 Speaker 1: why we wanted to invest because they have been so 412 00:22:12,960 --> 00:22:16,840 Speaker 1: incredibly capital efficient. What Christina did in terms of setting 413 00:22:16,880 --> 00:22:19,479 Speaker 1: a frugal tone at the company, I think really worked. 414 00:22:20,080 --> 00:22:22,760 Speaker 1: The company has one of the best burn multiples we've seen. 415 00:22:23,320 --> 00:22:26,320 Speaker 1: That is our metric for measuring the capital efficiency of 416 00:22:26,320 --> 00:22:30,560 Speaker 1: a startup. And so you know, vcs are looking two. 417 00:22:30,640 --> 00:22:32,919 Speaker 1: We're still looking to invest in high growth companies, but 418 00:22:33,000 --> 00:22:36,119 Speaker 1: we also want to see capital efficiency and so the 419 00:22:36,160 --> 00:22:38,359 Speaker 1: trick for founders right now is they can't just grow, 420 00:22:38,640 --> 00:22:42,720 Speaker 1: They have to grow in a capital efficient way. Christina 421 00:22:42,960 --> 00:22:45,240 Speaker 1: tell us a little bit about your fundraising journey. Given 422 00:22:45,240 --> 00:22:48,200 Speaker 1: all the market dynamics right now, your own background as 423 00:22:48,200 --> 00:22:49,879 Speaker 1: a VC, what was it like being on the other 424 00:22:49,920 --> 00:22:51,920 Speaker 1: side of the table, you know, did you have any 425 00:22:51,960 --> 00:22:54,800 Speaker 1: moments of panic where you were worried are we gonna 426 00:22:54,800 --> 00:22:57,560 Speaker 1: be able to close this deal in this macro environment? 427 00:22:58,480 --> 00:23:02,040 Speaker 1: So what you will say, it's the fundraising in two 428 00:23:02,200 --> 00:23:06,240 Speaker 1: is quite different from doing so UM, I'm going to 429 00:23:06,320 --> 00:23:09,240 Speaker 1: two fold, right. There's just more scrutiny across the board 430 00:23:09,320 --> 00:23:12,480 Speaker 1: this year. Uh, and then a different set of metrics. 431 00:23:12,560 --> 00:23:15,320 Speaker 1: Right In one, it was all about revenue growth and 432 00:23:15,520 --> 00:23:19,400 Speaker 1: you know kind of how much are you growing how quickly? Uh? 433 00:23:19,440 --> 00:23:23,680 Speaker 1: And this year, as daven mentioned, burn multiple big deal, right, 434 00:23:23,960 --> 00:23:26,320 Speaker 1: So for every dollar revenue you're bringing in, how much 435 00:23:26,359 --> 00:23:33,200 Speaker 1: do you spend to do that? Um? Gross margin, burn rate, runway. Like, 436 00:23:33,560 --> 00:23:36,800 Speaker 1: all of these questions were just kind of not new 437 00:23:36,880 --> 00:23:39,280 Speaker 1: for us, because we've been thinking about these things for 438 00:23:39,320 --> 00:23:42,400 Speaker 1: the last couple of years and trying to manage them 439 00:23:42,400 --> 00:23:45,400 Speaker 1: internally and keep an eye on them. But it's certainly 440 00:23:45,440 --> 00:23:50,040 Speaker 1: different than the series A we raised last year. David, 441 00:23:50,119 --> 00:23:53,480 Speaker 1: You've been building and investing since before the dot com bust, 442 00:23:53,520 --> 00:23:57,199 Speaker 1: and I'm so curious if you think a recession is 443 00:23:57,200 --> 00:24:00,000 Speaker 1: inevitable at this point. If so, is it a risk 444 00:24:00,000 --> 00:24:02,560 Speaker 1: session with a capital ARE or a lower case are? 445 00:24:02,800 --> 00:24:05,800 Speaker 1: How bad does it get? I do? I mean, I've 446 00:24:05,800 --> 00:24:08,520 Speaker 1: been saying since February that I thought there were warning 447 00:24:08,560 --> 00:24:11,359 Speaker 1: signs of a slowdown, impossible recession, and now we have 448 00:24:11,480 --> 00:24:15,480 Speaker 1: the FED raising rates very aggressively. I think they waited 449 00:24:15,520 --> 00:24:17,480 Speaker 1: a year too long. We had the warning signs of 450 00:24:17,480 --> 00:24:19,760 Speaker 1: inflation a year ago, and they waited nine months before 451 00:24:19,800 --> 00:24:21,919 Speaker 1: doing anything, and now as a result of that, they 452 00:24:21,960 --> 00:24:25,280 Speaker 1: have to overcompensate by raising rates very very quickly. That's 453 00:24:25,760 --> 00:24:29,600 Speaker 1: basically causing the economy, I think to UH, to basically 454 00:24:29,680 --> 00:24:32,640 Speaker 1: do somersaults. So I think we are headed into recession. 455 00:24:32,680 --> 00:24:34,720 Speaker 1: There's already a slowdown. We had negative one a half 456 00:24:34,760 --> 00:24:37,480 Speaker 1: percent growth in the last quarter. So I think everyone 457 00:24:37,520 --> 00:24:41,119 Speaker 1: should be uh, I guess expecting a recession and if 458 00:24:41,119 --> 00:24:43,040 Speaker 1: it doesn't material lot and I think probably a pretty 459 00:24:43,040 --> 00:24:46,879 Speaker 1: serious recession. And if it doesn't materialize, that's great news. 460 00:24:46,920 --> 00:24:49,080 Speaker 1: But I think that's what founders should be expecting at 461 00:24:49,080 --> 00:24:53,600 Speaker 1: this point. Which of the company, now you're old enough 462 00:24:53,640 --> 00:24:56,320 Speaker 1: to remember, until them, I Cisco, you know, hitting its 463 00:24:56,320 --> 00:24:59,520 Speaker 1: peak in in the dot com boom, and it still 464 00:24:59,600 --> 00:25:03,280 Speaker 1: hasn't recovered. Of you know, the big established tech companies 465 00:25:03,320 --> 00:25:06,199 Speaker 1: that have enjoyed this ride, do you think any of 466 00:25:06,240 --> 00:25:10,200 Speaker 1: those could could become the next Cisco. Well, I think 467 00:25:10,320 --> 00:25:13,399 Speaker 1: I think the big public companies aren't much better shape 468 00:25:13,440 --> 00:25:15,520 Speaker 1: than they were. The big public tech companies are much 469 00:25:15,560 --> 00:25:17,720 Speaker 1: better shape than they were during the dot com crash. 470 00:25:17,800 --> 00:25:19,280 Speaker 1: I mean, in the days of the dot com crash, 471 00:25:19,320 --> 00:25:21,399 Speaker 1: many of those companies were just kind of illusory. They 472 00:25:21,400 --> 00:25:23,600 Speaker 1: didn't have real business models, they didn't have real customers, 473 00:25:23,640 --> 00:25:25,879 Speaker 1: they didn't have real revenue. That's not the case today. 474 00:25:25,880 --> 00:25:29,480 Speaker 1: I think what's happening today is evaluation multiples are changing, 475 00:25:30,000 --> 00:25:32,520 Speaker 1: but these are real businesses. Software is of service is 476 00:25:32,560 --> 00:25:37,040 Speaker 1: not going away. Software businesses are still incredible businesses. Their 477 00:25:37,080 --> 00:25:40,199 Speaker 1: high gross margins. Uh, they're eating more and more of 478 00:25:40,200 --> 00:25:43,280 Speaker 1: the economy. They're becoming a larger and larger category of 479 00:25:43,359 --> 00:25:46,919 Speaker 1: spend by enterprises on software. So I don't think that 480 00:25:46,960 --> 00:25:50,480 Speaker 1: this is existential. I think this is simply a big 481 00:25:50,520 --> 00:25:54,440 Speaker 1: rerating in terms of valuation multiples, driven mainly by interest rates. 482 00:25:54,920 --> 00:25:57,800 Speaker 1: And I think that, um, you know, what founders need 483 00:25:57,840 --> 00:26:00,000 Speaker 1: to do is just make sure that they've given them 484 00:26:00,000 --> 00:26:05,480 Speaker 1: sells the runway to persevere through a recession or downturn. Christina, 485 00:26:05,520 --> 00:26:06,960 Speaker 1: how do you think this is all going to impact 486 00:26:06,960 --> 00:26:10,960 Speaker 1: the war for talent? I mean, obviously you have employees 487 00:26:10,960 --> 00:26:13,320 Speaker 1: probably thinking twice about whether they want to make a jump. 488 00:26:13,600 --> 00:26:16,320 Speaker 1: You know, do do do workers want to work at 489 00:26:16,320 --> 00:26:21,640 Speaker 1: startups right now? Given the uncertainty? Yeah, I think. Look, 490 00:26:21,720 --> 00:26:23,840 Speaker 1: there's a lot of doom and gloom that we talk about, 491 00:26:23,880 --> 00:26:27,720 Speaker 1: you know, within an upcoming potential recession. And you know, 492 00:26:27,760 --> 00:26:30,439 Speaker 1: I don't think it's all bad news. I think, as 493 00:26:30,480 --> 00:26:33,680 Speaker 1: you've both implied, like downturns or when some really great 494 00:26:33,720 --> 00:26:37,320 Speaker 1: businesses have gotten built, um, and I think we'll actually 495 00:26:37,359 --> 00:26:41,200 Speaker 1: become easier to recruit for the companies that correctly manage 496 00:26:41,240 --> 00:26:43,720 Speaker 1: their burn and you know, stick around and are able 497 00:26:43,760 --> 00:26:47,040 Speaker 1: to you know, not just persist, but almost accelerate through 498 00:26:47,160 --> 00:26:51,840 Speaker 1: the downturn. David, I would agree with that, But I 499 00:26:51,840 --> 00:26:54,359 Speaker 1: would agree with that. You know, PayPal was largely built 500 00:26:54,359 --> 00:26:56,000 Speaker 1: in the wake of the dot com crash. You know, 501 00:26:56,040 --> 00:26:59,320 Speaker 1: my company Amor would be sold to Microsoft for unicorn valuation. 502 00:26:59,440 --> 00:27:01,200 Speaker 1: That company was mainly built in the wake of the 503 00:27:01,840 --> 00:27:04,520 Speaker 1: Great Recession of two thousand eight. So downturns can be 504 00:27:04,560 --> 00:27:08,359 Speaker 1: a great time to build enduring companies. Uh, the warfare 505 00:27:08,359 --> 00:27:12,359 Speaker 1: talent gets easier. Uh, there are fewer copycasts getting funded, 506 00:27:12,400 --> 00:27:14,560 Speaker 1: so the competition could be easier the only thing that 507 00:27:14,560 --> 00:27:17,320 Speaker 1: gets harder is fundraising. And so if you make sure 508 00:27:17,800 --> 00:27:19,800 Speaker 1: that you're that you raise money at the right time, 509 00:27:19,800 --> 00:27:23,040 Speaker 1: and you make that funding last lengthen your runway, then uh, 510 00:27:23,080 --> 00:27:25,320 Speaker 1: you know, building during a downturn could be a great 511 00:27:25,320 --> 00:27:28,520 Speaker 1: time to build a great company. Well, I have to 512 00:27:28,560 --> 00:27:31,680 Speaker 1: ask you about your former PayPal colleague and friend, Elon Musk. 513 00:27:31,760 --> 00:27:34,640 Speaker 1: He spoke to Twitter employees as at an all hands meeting. 514 00:27:34,680 --> 00:27:37,879 Speaker 1: We got some more details about his vision for Twitter. 515 00:27:38,280 --> 00:27:42,200 Speaker 1: Um the proposing the idea that all users get verified 516 00:27:42,280 --> 00:27:45,119 Speaker 1: to crack down on bots, also saying that, you know, 517 00:27:45,200 --> 00:27:48,119 Speaker 1: he believes folks should be able to say pretty outrageous 518 00:27:48,160 --> 00:27:52,280 Speaker 1: things on Twitter short of breaking the law. Um, you know, 519 00:27:53,359 --> 00:27:56,280 Speaker 1: do you think he I know you've obviously been supportive 520 00:27:56,359 --> 00:28:00,199 Speaker 1: of him buying the company, supportive of his idea. Is 521 00:28:00,760 --> 00:28:03,680 Speaker 1: what do you think is going to be most impactful 522 00:28:03,800 --> 00:28:08,480 Speaker 1: about Elon Musk potentially taking over? Well, you know, I 523 00:28:08,520 --> 00:28:10,639 Speaker 1: already see a lot of outrageous things on Twitter. So 524 00:28:10,680 --> 00:28:12,480 Speaker 1: I think what what Ellen is saying is that he 525 00:28:12,480 --> 00:28:14,480 Speaker 1: believes in the principle of free speech and he thinks 526 00:28:14,520 --> 00:28:16,280 Speaker 1: it needs to be applied in an even handed way. 527 00:28:16,320 --> 00:28:18,640 Speaker 1: I mean, we need rules created by Twitter that aren't 528 00:28:18,720 --> 00:28:20,600 Speaker 1: just made up as they go along, and that only 529 00:28:20,600 --> 00:28:22,399 Speaker 1: effect one side of the debate. They need to be 530 00:28:22,440 --> 00:28:25,480 Speaker 1: an honest, open marketplace for ideas. I think that's part 531 00:28:25,520 --> 00:28:27,520 Speaker 1: of what he's saying. And then the other part that 532 00:28:27,640 --> 00:28:29,359 Speaker 1: I hear is he's saying that Twitter needs to be 533 00:28:29,400 --> 00:28:32,200 Speaker 1: a real business. He's saying that your costs now exceed 534 00:28:32,240 --> 00:28:35,800 Speaker 1: your revenues. That's not sustainable. We need to cut costs, 535 00:28:35,800 --> 00:28:38,080 Speaker 1: we need to grow revenue. It sounds to me like 536 00:28:38,200 --> 00:28:41,760 Speaker 1: he wants to apply some business rigor to the company, 537 00:28:41,960 --> 00:28:44,360 Speaker 1: and um so I would expect that if he takes 538 00:28:44,400 --> 00:28:46,840 Speaker 1: over the company there will be some cost cutting. Sounds like, 539 00:28:46,960 --> 00:28:49,800 Speaker 1: you know, he believes in in person work. He said 540 00:28:49,840 --> 00:28:52,400 Speaker 1: that he would prefer that people be in the office, 541 00:28:52,440 --> 00:28:56,200 Speaker 1: although exceptions be made for you know, truly exceptional cases. 542 00:28:56,520 --> 00:28:58,760 Speaker 1: But I would expect him to apply some business rigger. 543 00:28:59,040 --> 00:29:00,520 Speaker 1: And that's half of what you do. In the other 544 00:29:00,560 --> 00:29:05,960 Speaker 1: half is um is basically creating some predictable rules around speech. Now, 545 00:29:06,000 --> 00:29:08,360 Speaker 1: there are some doubts as to whether he's really committed 546 00:29:08,480 --> 00:29:11,080 Speaker 1: to doing this deal, whether he's using bots. We had 547 00:29:11,080 --> 00:29:14,000 Speaker 1: a former Twitter employee on earlier who believes he's using 548 00:29:14,000 --> 00:29:16,280 Speaker 1: this spot issue to try to get out of it, 549 00:29:16,320 --> 00:29:19,040 Speaker 1: that he's not really serious, that he doesn't necessarily really 550 00:29:19,040 --> 00:29:21,160 Speaker 1: want it. Do you think he's Is he serious? Is 551 00:29:21,160 --> 00:29:24,680 Speaker 1: he committed to buying Twitter? Well, the fact he did 552 00:29:24,720 --> 00:29:27,800 Speaker 1: this town hall with the employees today actually is is 553 00:29:27,840 --> 00:29:30,520 Speaker 1: assigned to me that the deal is actually likely to happen. 554 00:29:30,560 --> 00:29:32,240 Speaker 1: I agree that there was some question a few weeks 555 00:29:32,280 --> 00:29:35,720 Speaker 1: ago about whether it was actually gonna happen, but I 556 00:29:35,720 --> 00:29:37,200 Speaker 1: think the fact that he did this meeting with the 557 00:29:37,200 --> 00:29:40,000 Speaker 1: employees leads me to believe it's more likely than not 558 00:29:40,080 --> 00:29:41,640 Speaker 1: that it's actually going to happen, that he intends to 559 00:29:41,680 --> 00:29:43,720 Speaker 1: fall through with it. So you know, I don't know 560 00:29:43,800 --> 00:29:46,520 Speaker 1: anything that he hasn't said publicly about it, but I 561 00:29:46,520 --> 00:29:50,960 Speaker 1: would take that as a signal. David Sacks Craft Ventures 562 00:29:51,080 --> 00:29:55,680 Speaker 1: and Christina Caciopo, CEO of Vanta, thank you both. Appreciate 563 00:29:55,720 --> 00:29:59,160 Speaker 1: you covering wide range of issues today. Okay, come up, 564 00:29:59,160 --> 00:30:02,200 Speaker 1: we're gonna hear from Gala see Digital founder Mike novograts 565 00:30:02,240 --> 00:30:07,200 Speaker 1: on Crypto's fall from grace and the sudden exodus of investors. 566 00:30:07,520 --> 00:30:35,480 Speaker 1: He's next. This is Bloomberg. It is time for our 567 00:30:35,520 --> 00:30:37,560 Speaker 1: Crypto Report. Now and there's no end to the pain 568 00:30:37,640 --> 00:30:40,360 Speaker 1: in the space as the route and bitcoin rolls on 569 00:30:40,480 --> 00:30:44,760 Speaker 1: now down for ten consecutive sessions. Galaxy Digital founder Mike 570 00:30:44,800 --> 00:30:48,120 Speaker 1: Novograt spoke earlier on Bloomberg Today about these headwinds in 571 00:30:48,200 --> 00:30:52,120 Speaker 1: digital assets. You have the whole crypto and context what's 572 00:30:52,160 --> 00:30:55,160 Speaker 1: going on macro right and we talked about there we're 573 00:30:55,160 --> 00:30:57,320 Speaker 1: gonna be headwinds this year because the FED was gonna 574 00:30:57,320 --> 00:31:00,560 Speaker 1: have to withdraw all liquidity and so assets that went 575 00:31:00,680 --> 00:31:05,240 Speaker 1: up based on cheap money forever, if they're growth stocks 576 00:31:05,360 --> 00:31:10,959 Speaker 1: or expensive watches or crypto, we're under certainly under pressure 577 00:31:11,000 --> 00:31:16,560 Speaker 1: all year long. What's exacerbated this move in crypto is, 578 00:31:17,400 --> 00:31:20,720 Speaker 1: you know a bunch of leveraged players that had far 579 00:31:20,800 --> 00:31:23,560 Speaker 1: more leverage I think people thought, uh, and so you 580 00:31:23,600 --> 00:31:27,760 Speaker 1: can talk about Celsius or three hours capital um. That's 581 00:31:27,840 --> 00:31:32,360 Speaker 1: caused almost something familiar similar to what happened with long 582 00:31:32,480 --> 00:31:37,280 Speaker 1: term capital management, UH alleged. You know market neutral players 583 00:31:37,280 --> 00:31:40,880 Speaker 1: with monster leverage and that's being unwound, and that's created 584 00:31:40,920 --> 00:31:43,000 Speaker 1: a ton of fear in the space. And so you've 585 00:31:43,040 --> 00:31:45,400 Speaker 1: seen lots of credit being withdrawn from the space. And 586 00:31:45,440 --> 00:31:48,560 Speaker 1: when credits with drawn, you know, you've seen prices collapse, 587 00:31:48,680 --> 00:31:51,440 Speaker 1: and so I had hoped this year was thirty thousand 588 00:31:51,520 --> 00:31:57,400 Speaker 1: fifty thousand bitcoin, and once we took out eight thousand, 589 00:31:57,400 --> 00:32:02,360 Speaker 1: we've cascaded. Uh. Yeah, twenty thousand is a pretty good 590 00:32:02,360 --> 00:32:04,800 Speaker 1: target with one thousand of the theory, and we've tested 591 00:32:04,840 --> 00:32:06,720 Speaker 1: that two days. You know, when I look at the 592 00:32:06,800 --> 00:32:10,680 Speaker 1: US stock market, um, it looks like it's got probably 593 00:32:10,680 --> 00:32:13,200 Speaker 1: four percent more to go to thirty five hundred, which 594 00:32:13,240 --> 00:32:17,200 Speaker 1: is where the two d week moving averages, whereas support 595 00:32:17,280 --> 00:32:20,960 Speaker 1: comes in, and I think you're seeing this liquidation of 596 00:32:21,080 --> 00:32:25,480 Speaker 1: risks and cryptos got caught up with it. Mike, tough question, 597 00:32:25,520 --> 00:32:27,760 Speaker 1: but did you directly have any sort of exposure to 598 00:32:27,800 --> 00:32:30,200 Speaker 1: those counterparts that you mentioned, the likes of Celsius, the 599 00:32:30,280 --> 00:32:33,840 Speaker 1: likes of three urrows, or is it more third you know, 600 00:32:34,000 --> 00:32:37,520 Speaker 1: third order effects that you gain the exposure and is 601 00:32:37,520 --> 00:32:41,160 Speaker 1: it you get you get exposure indirectly from any big 602 00:32:41,160 --> 00:32:44,880 Speaker 1: player in the space, right and when you have really 603 00:32:44,920 --> 00:32:47,520 Speaker 1: big players that have borrowed money from all over the place, 604 00:32:47,560 --> 00:32:50,600 Speaker 1: it creates this daisy chain effect. And I think that's 605 00:32:50,640 --> 00:32:54,240 Speaker 1: burning through the system right now. My senses, it's mostly 606 00:32:54,320 --> 00:32:57,240 Speaker 1: burned out, like these fires go until they run out 607 00:32:57,240 --> 00:33:00,200 Speaker 1: of oxygen, and so, uh, you know, you'd up to 608 00:33:00,240 --> 00:33:03,840 Speaker 1: be one heck of a diamond handed player to have 609 00:33:03,960 --> 00:33:06,280 Speaker 1: sustained all of this if you have too much leverage. 610 00:33:06,680 --> 00:33:09,080 Speaker 1: And so my guesses leverage has been knocked out of 611 00:33:09,080 --> 00:33:11,920 Speaker 1: the system. But humpty dumpy, doesn't you know, get put 612 00:33:11,960 --> 00:33:14,880 Speaker 1: back together right away. It takes a while to kind 613 00:33:14,880 --> 00:33:19,120 Speaker 1: of sort through. They'll be bankruptcy proceeds, uh in many companies, 614 00:33:19,560 --> 00:33:21,640 Speaker 1: And so I think while we should bounce off of 615 00:33:21,680 --> 00:33:24,640 Speaker 1: twenty tho and bounce off of a thousand, it's gonna 616 00:33:24,680 --> 00:33:26,480 Speaker 1: take a little while for a cryptot to regain and 617 00:33:26,560 --> 00:33:31,640 Speaker 1: narrative regain honors. Galaxy Digital's Mike novograts who can catch 618 00:33:31,680 --> 00:33:43,520 Speaker 1: up full interview at Bloomberg dot com. Rising inflation and 619 00:33:43,600 --> 00:33:47,760 Speaker 1: a looming recession have hit all sectors hard, but especially retail. 620 00:33:47,840 --> 00:33:50,080 Speaker 1: But Rent the Runway was one of the few companies 621 00:33:50,080 --> 00:33:54,080 Speaker 1: this earning season to beat estimates and raise guidance, joining 622 00:33:54,160 --> 00:33:57,200 Speaker 1: us NOW CEO and co founder Jennifer Hyman. So, Jen, 623 00:33:57,680 --> 00:34:00,680 Speaker 1: how are you bucking the trend here? I think the 624 00:34:00,760 --> 00:34:04,200 Speaker 1: Rent the Runway is about delivering enormous financial value to 625 00:34:04,240 --> 00:34:06,520 Speaker 1: the customer. So if you rent address for a special 626 00:34:06,520 --> 00:34:10,799 Speaker 1: occasion from US, you're paying off the retail price, and 627 00:34:10,800 --> 00:34:13,320 Speaker 1: if you have a subscription, each item is like eighteen 628 00:34:13,360 --> 00:34:16,640 Speaker 1: twenty bucks, So it's even cheaper than shopping at an 629 00:34:16,640 --> 00:34:19,720 Speaker 1: off price channel. It's cheaper than fast fashion and abborce 630 00:34:19,920 --> 00:34:22,279 Speaker 1: is the real thing. So we think that in an 631 00:34:22,400 --> 00:34:24,880 Speaker 1: environment where we've been cooped up for the last two years, 632 00:34:25,200 --> 00:34:27,600 Speaker 1: you're certainly seeing in kind of the earnings calls of 633 00:34:27,640 --> 00:34:30,600 Speaker 1: Airbnb and bookings dot Com and live Nation that people 634 00:34:30,600 --> 00:34:34,319 Speaker 1: are going out and they want ways to wear something new. 635 00:34:34,360 --> 00:34:36,440 Speaker 1: They just want to do it affordably. So rent the 636 00:34:36,520 --> 00:34:40,040 Speaker 1: runways an experience that goes along with events and travel 637 00:34:40,239 --> 00:34:43,040 Speaker 1: and going out to restaurants, going out to concerts, and 638 00:34:43,080 --> 00:34:46,640 Speaker 1: that's why we've been able to perform. There's no question though, 639 00:34:46,680 --> 00:34:50,719 Speaker 1: that inflation is going to hit folks even harder. People 640 00:34:50,760 --> 00:34:54,319 Speaker 1: are paying more for gas, more for groceries. What's your 641 00:34:54,760 --> 00:34:58,640 Speaker 1: forecast on how customer spending habits are going to change? 642 00:34:58,680 --> 00:35:01,040 Speaker 1: How much are they going to be willing to spend 643 00:35:01,360 --> 00:35:05,319 Speaker 1: on apparel versus some of these essential items, and and 644 00:35:05,360 --> 00:35:07,960 Speaker 1: how do they think about appare is it is it 645 00:35:08,000 --> 00:35:10,120 Speaker 1: more of an essential because we've been cooked up for 646 00:35:10,160 --> 00:35:16,399 Speaker 1: so long. I think that UM, first of all, rent 647 00:35:16,480 --> 00:35:19,560 Speaker 1: the runway has a customer base that's slightly different. It's 648 00:35:19,640 --> 00:35:24,560 Speaker 1: more of a higher income customer base. So I think, listen, 649 00:35:24,600 --> 00:35:27,560 Speaker 1: everyone is impacted by the by inflation and buy an 650 00:35:27,640 --> 00:35:30,320 Speaker 1: upcoming recession, and people are going to think about smarter 651 00:35:30,520 --> 00:35:33,279 Speaker 1: ways to spend in the category. So I think the 652 00:35:33,320 --> 00:35:35,680 Speaker 1: only data we really have is what happened in two 653 00:35:35,680 --> 00:35:40,200 Speaker 1: thousand eight was fascinating. In two thousand eight, Americans continued 654 00:35:40,239 --> 00:35:43,520 Speaker 1: to buy sixty five articles of apparel per year, which 655 00:35:43,560 --> 00:35:46,279 Speaker 1: was the exact same amount they bought in two thousand five, 656 00:35:46,400 --> 00:35:49,239 Speaker 1: six and seven. What they did is they flipped into 657 00:35:49,280 --> 00:35:53,640 Speaker 1: lower price per unit retailers. So they flipped into off chrice, 658 00:35:53,719 --> 00:35:56,239 Speaker 1: they flipped into value. And I really believe that re 659 00:35:56,400 --> 00:35:58,960 Speaker 1: commerce in general can now be part of that cost 660 00:35:59,000 --> 00:36:03,480 Speaker 1: consideration set. So even in recessionary times, people still want 661 00:36:03,640 --> 00:36:07,000 Speaker 1: variety in their wardrobes. Now, how does the fact that 662 00:36:07,040 --> 00:36:12,040 Speaker 1: we all went through covid um factor into this. I 663 00:36:12,080 --> 00:36:15,880 Speaker 1: think that this procession might feel different, might look different 664 00:36:15,920 --> 00:36:19,000 Speaker 1: than the last one. I think that we may end 665 00:36:19,080 --> 00:36:23,880 Speaker 1: up spending more on experiences in this uh, in this 666 00:36:23,960 --> 00:36:26,800 Speaker 1: recessionary period than we did in the last one because 667 00:36:26,840 --> 00:36:29,200 Speaker 1: we didn't travel over the last two years. We didn't 668 00:36:29,200 --> 00:36:32,360 Speaker 1: really go out to eat, we didn't see friends and rent. 669 00:36:32,360 --> 00:36:36,480 Speaker 1: The runway is spend that tracks with experiences. So I 670 00:36:36,520 --> 00:36:39,719 Speaker 1: think that you might travel you have inflation, maybe you 671 00:36:39,719 --> 00:36:42,240 Speaker 1: don't travel to Italy and you travel to Florida instead, 672 00:36:42,280 --> 00:36:44,959 Speaker 1: and you kind of book a cheaper hotel. You're still 673 00:36:44,960 --> 00:36:46,839 Speaker 1: going to get out there and go out. And I 674 00:36:46,920 --> 00:36:49,960 Speaker 1: think that as long as we can market value, we 675 00:36:50,040 --> 00:36:53,879 Speaker 1: will be able to be more. Uh. Part of her 676 00:36:54,600 --> 00:36:58,160 Speaker 1: considerations that now we're saying a lot of tech companies 677 00:36:58,160 --> 00:37:01,840 Speaker 1: have to make hard decisions layoffs downstizing you had to 678 00:37:01,880 --> 00:37:04,200 Speaker 1: make some tough decisions during the pandemic, and you've been 679 00:37:04,320 --> 00:37:07,200 Speaker 1: very open about that. Do you have any reflections on 680 00:37:07,280 --> 00:37:10,480 Speaker 1: that now, and you know, you know, potentially input for 681 00:37:10,520 --> 00:37:15,600 Speaker 1: these founders who are having to make those tough decisions now. Um, 682 00:37:15,640 --> 00:37:19,000 Speaker 1: we cut over our expenses in a three week period 683 00:37:19,040 --> 00:37:24,560 Speaker 1: in March, and it was a dramatic situation. And that 684 00:37:24,640 --> 00:37:28,959 Speaker 1: one weekend in March, you know, over of our subscribers 685 00:37:29,040 --> 00:37:34,000 Speaker 1: paused or canceled and so we had to act extremely quickly. 686 00:37:34,280 --> 00:37:37,120 Speaker 1: We had to change the way We acquired inventory too, 687 00:37:37,719 --> 00:37:41,360 Speaker 1: from buying inventory outright to actually revenue sharing and receiving 688 00:37:41,360 --> 00:37:45,280 Speaker 1: our inventory and consignment. So I would say to other 689 00:37:46,200 --> 00:37:49,640 Speaker 1: ceo s that there's not a moment to lose that 690 00:37:49,800 --> 00:37:52,120 Speaker 1: cash is king. You have to think about all of 691 00:37:52,200 --> 00:37:56,120 Speaker 1: your investments and be more conservative and kind of the 692 00:37:56,239 --> 00:37:59,680 Speaker 1: great thing about this environment is it's not happening overnight. 693 00:37:59,680 --> 00:38:02,840 Speaker 1: There will never be another experience where, like a pandemic, 694 00:38:02,880 --> 00:38:06,279 Speaker 1: we're all locked inside. You know, from March eighth to 695 00:38:06,400 --> 00:38:10,120 Speaker 1: March nine, we were living different lives. So we're constantly 696 00:38:10,200 --> 00:38:13,560 Speaker 1: looking at the data. Internally, we feel that we're able 697 00:38:13,600 --> 00:38:16,960 Speaker 1: to react and thus far we feel positively. We gave 698 00:38:17,000 --> 00:38:21,160 Speaker 1: great guidance for Q two. But and for you know, 699 00:38:21,239 --> 00:38:25,560 Speaker 1: reaffirmed our guidance for the year. We think that um 700 00:38:25,680 --> 00:38:28,280 Speaker 1: we every business has to be smart right now because 701 00:38:28,320 --> 00:38:32,480 Speaker 1: no business is pession or inflation proof. So last quick question, 702 00:38:32,520 --> 00:38:35,040 Speaker 1: if you beat estimates and you raise your guidance, does 703 00:38:35,080 --> 00:38:38,960 Speaker 1: that mean the pandemic era of sweatpants is over? Yes, 704 00:38:39,440 --> 00:38:43,919 Speaker 1: Black Time twenty two like sweatpants is to I mean, 705 00:38:44,239 --> 00:38:47,399 Speaker 1: people are dressing up in a way that I've never 706 00:38:47,440 --> 00:38:51,880 Speaker 1: seen before. They are bolder, brighter than they've ever been before. 707 00:38:51,880 --> 00:38:54,120 Speaker 1: And I think that this is just the example, like 708 00:38:54,200 --> 00:38:57,400 Speaker 1: they're dating again, they're going to parties again, like people 709 00:38:57,440 --> 00:39:00,160 Speaker 1: aren't going to stop doing that now, and so I 710 00:39:00,200 --> 00:39:03,280 Speaker 1: do believe that this recession might be different for service 711 00:39:03,320 --> 00:39:07,200 Speaker 1: based companies. All right, Jennifer Hyman, CEO and co founder 712 00:39:07,280 --> 00:39:09,239 Speaker 1: Rent the Runway. Always good to have you, Jen, Thank 713 00:39:09,280 --> 00:39:12,800 Speaker 1: you for stopping by. That does it for this edition 714 00:39:12,920 --> 00:39:15,400 Speaker 1: of the show. We will be right back here tomorrow. 715 00:39:15,400 --> 00:39:18,520 Speaker 1: I'm Emily Chang in San Francisco. This is Bloomberg