Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay I'm only changing in San Francisco, and this
Speaker 1: is Bloomberg Technology coming up of the next hour market malaise,
Speaker 1: the SMP five hundred and the tech heavy NASDAQ one
Speaker 1: hundred having their worst weekly run of declines for a
Speaker 1: decade as US job numbers reinforce the idea that the
Speaker 1: FED stay in the course on rates plus Doordas shares
Speaker 1: get caught in the down draft, selling off for another day,
Speaker 1: hitting an all time low, this despite strong earnings that
Speaker 1: show customers still paying for takeaway as we move into
Speaker 1: our post pandemic world. A conversation with DoorDash CEO Tony
Speaker 1: Shoe is coming up, and Meta's latest leap into the
Speaker 1: metaverse is a real world store. We go behind the
Speaker 1: scenes and the company's first retail location ahead of its
Speaker 1: grand opening. I want to stick with that volatility that
Speaker 1: continues to dominate the markets and bring in Mark Mahaney
Speaker 1: of ever Car and Mark. Some of these companies actually
Speaker 1: a strong earnings results, but they're still getting caught up
Speaker 1: in this down draft. You know, what's your take here,
Speaker 1: how are you reading through this? Well, okay, Emily, I
Speaker 1: think my take on it would be the companies that
Speaker 1: actually had strong earnings actually did trade up, but there
Speaker 1: were very few of those companies in tech land. So
Speaker 1: let me try this. You know, you mentioned door Dash,
Speaker 1: Door Dash, you know is fulminentals got stronger, but they're
Speaker 1: not really yet putting up sustained gap earnings, and so
Speaker 1: the market is not willing to bid up stocks despite
Speaker 1: what happens on the top line. If they don't have
Speaker 1: a lot of bottom line cushion, then they don't trade
Speaker 1: somewhat close to our market multiple. It's gonna be a
Speaker 1: challenge for pure growth equities like DoorDash. I like doordashes
Speaker 1: the stock, but in this market it's gonna be challenge.
Speaker 1: Airbnb put up really good numbers earlier this week, stock
Speaker 1: couldn't hold the gains. Uber put up good numbers, Stock
Speaker 1: couldn't hold the games. The one that could, though, was Booking,
Speaker 1: and Booking had positive results. But they also have a
Speaker 1: market multiple app you know, real earnings. Uh, they've had
Speaker 1: them for a long time, a bulletproof balance sheet, etcetera.
Speaker 1: So this market is very discriminating and it won't. It
Speaker 1: won't tolerate growth assets right now. If you're a growth stock,
Speaker 1: you better have a good earnings track record. In that case,
Speaker 1: the stock can trade up. I think that's kind of
Speaker 1: what's happening. People are just going to the defensive end
Speaker 1: of growth tech in the Usually there's not too many
Speaker 1: names in that space. Based on the actions the FED
Speaker 1: is taking here, how concerned are you about a recession
Speaker 1: and just a prolonged market meltdown? Well, I don't know.
Speaker 1: I'm certainly no expert on that, but I can all
Speaker 1: my My interpretation is simply that the market on Thursday
Speaker 1: and Friday said we don't believe the FED can orchestrate
Speaker 1: a soft landing. That's how I interpret what happened. Maybe
Speaker 1: the FED can, maybe the FED can't. No expert on that,
Speaker 1: I think the odd that's not going to be an
Speaker 1: easy thing to do, but that's what the market is saying.
Speaker 1: And then as a as an investor in tech stocks,
Speaker 1: one thing I have to worry about is if there
Speaker 1: really is a recession that's not estimated in. It maybe
Speaker 1: priced in, but it's not estimated in. Almost all consumer
Speaker 1: tech is cyclical, So if the consumer if they're gonna
Speaker 1: entering in a recession. You know. Amazon on its earnings
Speaker 1: call said they hadn't seen any sign of consumer softening.
Speaker 1: They had a lot of issues in terms of costs,
Speaker 1: but not in terms of demand. So things could get
Speaker 1: worse at Amazon, they could get worse at Google, they
Speaker 1: could get worse at Apple. None of these companies skated
Speaker 1: away from a real recession. So that's potentially the other
Speaker 1: shoe to drop here. That's what the market, the markets
Speaker 1: fearing that it's pricing it in. And I hope the
Speaker 1: market is wrong, but but that's the until proven otherwise.
Speaker 1: I think that's what's gonna hold back tech stocks and
Speaker 1: growth equities, you know, for the foreseeable future. I don't
Speaker 1: know if that's a couple of weeks months, hopefully it's
Speaker 1: not quarters, but it's that time of that that kind
Speaker 1: of time frame we also might see be seeing a
Speaker 1: changing of the guard in terms of what counts as
Speaker 1: a tech company. Is folk With Robert Knwell of Upholding
Speaker 1: Portfolio yesterday, he had this to say about Netflix and NATA.
Speaker 1: Take a listen. Netflix is now being valued like a
Speaker 1: cable station. Other investors are looking at Facebook's meta's capital intensity,
Speaker 1: and saying is this does their future look more like
Speaker 1: a T and T S than it does Google? And
Speaker 1: you've seen multiples re rate faster than we've seen in
Speaker 1: a really long time across these assets because investors not,
Speaker 1: in our opinion, they've likely moved too far in that direction.
Speaker 1: But you know, we've got to do our jobs and
Speaker 1: passed through it and find the good deals here, Mark's
Speaker 1: all you're nodding there? Do you agree? I think there's
Speaker 1: a lot of really good points there. Look, you look
Speaker 1: at Netflix, It's trade off seventy year to date. There's
Speaker 1: about five or six someties. I looked at the trade
Speaker 1: off seventy year to date now with Netflix because they
Speaker 1: hit a growth wall. This stock was priced as if
Speaker 1: and I thought it very beginning of the year. I
Speaker 1: thought they could sustain million subs. You know going forward,
Speaker 1: say's not the case, and that stock was standing at
Speaker 1: a high multiple. So we had to take out the
Speaker 1: premium that it had, uh and then you had the
Speaker 1: lower estimates. That's what got me off the Netflix train,
Speaker 1: you know, earlier this, earlier this year. But yeah, when
Speaker 1: companies go X hype premium growth, they go X growth,
Speaker 1: you can have a real reckoning in terms of the
Speaker 1: stock price if they go x premium growth when they
Speaker 1: are sitting there with high multiples. That was absolutely the
Speaker 1: case with Netflix. Now I think there's a lot of
Speaker 1: very interesting valuation arguments think be made about Netflix. You've
Speaker 1: got thirteen dollars in pure gap burnings. What multiple do
Speaker 1: you want to put on that a market multiple seventeen times,
Speaker 1: fifteen times, twenty times were in that ballpark. So now
Speaker 1: there's a lot of valuation support for the name Facebook.
Speaker 1: I think it's different. And by the way, I really
Speaker 1: like Facebook here. I think the stock can rerate. I
Speaker 1: think the multiple can go higher. I think this is
Speaker 1: going to recover to have being a premium growth name.
Speaker 1: But I understand it's very controversial here. I like it.
Speaker 1: It's also got a lot of cash on the balance sheet.
Speaker 1: And you also, of course cover Twitter, which has got
Speaker 1: its own story going on with this Elon Musk takeover.
Speaker 1: He's lined up this long list of unusual investors to
Speaker 1: back his bid to buy Twitter, from Larry Ellison to
Speaker 1: a Saudi prince to the cryptocurrency firm Finance. He also
Speaker 1: was tweeting earlier today some more incess to what he
Speaker 1: plans to do with Twitter that'll be focusing on hardcore
Speaker 1: software engineering, design, information security, server hardware. What do you
Speaker 1: make of that? Well, I, um, I'm sorry I didn't
Speaker 1: see his tweets earlier today, But if he's started to
Speaker 1: develop a more detailed plan for what he wants to
Speaker 1: do with the asset, I think that's great. Um. You know,
Speaker 1: I think there's been a product innovation problem with Twitter
Speaker 1: for I don't know the better part of five, six,
Speaker 1: seven years, and so if somebody, if if it takes
Speaker 1: new management team, takes a new owner to shake it
Speaker 1: up and to really improve it, I think that's gonna
Speaker 1: be great for all of us. I do worry one thing,
Speaker 1: which is all the money for Twitter comes really from
Speaker 1: marketers and advertisers, and I haven't heard anybody talk about
Speaker 1: how they're going to improve the tools for them because
Speaker 1: they're the ones who paid the bills. At the end
Speaker 1: of the day. I don't think you're gonna make that
Speaker 1: much money if you try to charge a subscription for
Speaker 1: for for Twitter. So I hope he can improve Twitter
Speaker 1: as a as a service as a user, right, I
Speaker 1: think I want that. As an investor, I don't think
Speaker 1: there's much to do with Twitter here, I think the
Speaker 1: steel is going to go through. I think it's largely closed,
Speaker 1: but but maybe we'll see it to get into public
Speaker 1: markets in a few years. That's what I heard that
Speaker 1: he intends to do. If he can come out with
Speaker 1: a better asset, the market will be very interested in
Speaker 1: Twitter all right. We'll always appreciate your insights here and
Speaker 1: helping us wrap a really painful week for a lot
Speaker 1: of investors. Mark Mahaney of Evercore, Thank you. The music
Speaker 1: is stopping for some pandemic darlings like Peloton and Netflix's
Speaker 1: people get back out into the world to live their lives.
Speaker 1: But it is still humming so far for door Dash
Speaker 1: revenue beating analysts estimates and a strong outlook ahead with
Speaker 1: people still ordering more and more food for delivery. But
Speaker 1: how long does that keep up with inflation and a
Speaker 1: potential recession bearing down. I want to bring in door
Speaker 1: Dos CEO Tony Shoe for more on all of this,
Speaker 1: and Tony, it's a tough mark it to be in now.
Speaker 1: Despite your strong results, we saw shares take a leg down.
Speaker 1: You know, what is your takeaway from how investors are
Speaker 1: evaluating these results? Well, I think it's certainly a tough
Speaker 1: market out there, as you acknowledge, but you know, at
Speaker 1: the same time at DoorDash, we're focused on the fundamentals,
Speaker 1: and the fundamentals for doordesh are incredibly strong, as you saw,
Speaker 1: you know, with this for most recent quarter, we announced
Speaker 1: all time highs in our monthly active users or dash
Speaker 1: has subscribers, as well as order frequency across cohorts. We're
Speaker 1: continuing to build into new categories beyond restaurants and two grocery,
Speaker 1: convenience retail. We're launching more than just you know, the
Speaker 1: United States as a global business, and we're also making
Speaker 1: tremendous progress on building our platform in which we're helping
Speaker 1: physical businesses become digital powerhouses in addition to the local
Speaker 1: marketplace that we've been building. So in times like these, especially, um,
Speaker 1: you know, what I tell our teams is to focus on,
Speaker 1: you know, the fundamentals and keep building the business. Investors
Speaker 1: seem to really be punishing or at least questioning growth stocks,
Speaker 1: and I know some are wondering, oh, was it because
Speaker 1: of a Macron that DoorDash saw this boost in the
Speaker 1: last quarter. Is not going to keep up quarter after
Speaker 1: quarter after quarter. How do you respond to that well,
Speaker 1: it's been two years now or maybe a little over
Speaker 1: that um in during the pandemic season, and we've continued
Speaker 1: to see growth. I mean, our US restaurants business has
Speaker 1: grown two fifty percent over the last couple of years.
Speaker 1: We've gained fourteen points of absolute share in the category.
Speaker 1: And I think what you've seen, whether it was you know,
Speaker 1: early on in the pandemic, is certain states opened up
Speaker 1: maybe a little bit ahead of others or now where
Speaker 1: everyone thankfully or finally getting back into their normal lives
Speaker 1: of seeing their friends and family in person. It's that people,
Speaker 1: you know, even though they can they eat out and celebrate,
Speaker 1: they're continuing to order delivery. I mean, that's why you're seeing,
Speaker 1: you know, the all time highs that we've seen in
Speaker 1: the business. In addition to that, we've also increased our
Speaker 1: profitability on top of it already profitable business um altogether,
Speaker 1: and so you know, we've seen a lot of strength
Speaker 1: in the business, both in terms of the demand but
Speaker 1: also in terms of our bottom line. Consumers are under
Speaker 1: pressure though inflation is rising, gas prices are rising. These
Speaker 1: are factors beyond your control. How are you thinking about
Speaker 1: the macroeconomic environment ahead? I mean, are you just kind
Speaker 1: of preparing for more uncertainty. Well, we've been studying inflation
Speaker 1: pretty carefully now for the past four or six quarters,
Speaker 1: because I think it happened, actually, or the growth of inflation,
Speaker 1: I should say, you know, occurred maybe a bit more
Speaker 1: sharply than some had anticipated, and it certainly continues to
Speaker 1: be a real concern. Um. So for us, the focus
Speaker 1: is on taking care of all the audiences. You know,
Speaker 1: obviously we can't control the rate of change of inflation,
Speaker 1: but we can control um you know what we do
Speaker 1: for dashers, making sure that we're giving tem percent cash
Speaker 1: back on fuel expenses, making sure that we are paying
Speaker 1: bonuses for longer distances driven, making sure that we're working
Speaker 1: with merchants to find in new ways to grow as
Speaker 1: they're dealing with both labor shortages as well as inflationary pressures.
Speaker 1: And we can do that because we have a robust
Speaker 1: restaurants business for consumer demand is still very resilient, which
Speaker 1: gives us the ability to reinvest those profits into absorbing
Speaker 1: any costs from inflation so that consumers don't have to
Speaker 1: bear any of that burden. We did see a number
Speaker 1: of analysts cut price targets on DoorDash this morning, and
Speaker 1: I wonder how tight the labor market is for you
Speaker 1: in particular. I mean, because it's not just you know,
Speaker 1: restaurants that need labor. It's it's DoorDash and Uber and
Speaker 1: Left and Domino's Pizza that are fighting for for drivers. Well,
Speaker 1: we you know, we haven't actually seen any challenges in
Speaker 1: getting drivers on the road. In fact, even before the
Speaker 1: recent rises and fuel expenses or the sharp uptick I
Speaker 1: should say in fuel expenses, we had plenty of drivers
Speaker 1: on the road. And that's because structurally we have a
Speaker 1: pool of drivers that that is just much larger than
Speaker 1: other serve is like right sharing. Um, you know, of
Speaker 1: the dashers on door Dash, of the three million plus
Speaker 1: that come to our platform and and and does deliveries
Speaker 1: on a quarterly basis, them deliver more fewer than ten
Speaker 1: hours a week. The average dasher only completes about four
Speaker 1: hours of work every week. And and so when you
Speaker 1: think about it from that context, where it's truly part
Speaker 1: time and supplemental income, and you compare to something like
Speaker 1: right sharing, which is more full time, it's just orders
Speaker 1: of magnitude larger in terms of the base of drivers
Speaker 1: we can address and for those reasons, we actually haven't
Speaker 1: seen any of those pressures of getting drivers on the road.
Speaker 1: But that said, we do recognize that inflation is very real,
Speaker 1: and that's why we decided to invest in those dasher
Speaker 1: programs to make sure that their earnings would not be impacted. Interesting, Well,
Speaker 1: on one hand, you're hearing Lifts say they're going to
Speaker 1: have to invest significantly to incentivize drivers. We're saying they
Speaker 1: don't have to. What they are making some changes to
Speaker 1: the app, more transparency to keep those drivers coming back.
Speaker 1: And I wonder are you going to prioritize the courier
Speaker 1: app experience and how if your competitors are trying to
Speaker 1: step up those levers. Well, we don't really compete against
Speaker 1: right sharing for drivers. I mean nine cent of drivers
Speaker 1: that we've surveyed, you know, on the door Dash platform
Speaker 1: have no interest in um, you know, driving other people. Um.
Speaker 1: They just prefer to do deliveries. I mean, if you
Speaker 1: think about it, I mean, the two user basis couldn't
Speaker 1: be you know, further apart in terms of how they
Speaker 1: self select which platforms to work on. Um if what
Speaker 1: about eight? What about Instacart? But you know, Dominoes. Sure sure,
Speaker 1: sure sure. I mean, as the largest platform UM in
Speaker 1: the US that you know, provides more work opportunities on
Speaker 1: a daily basis across more geographies. Um, we're just the
Speaker 1: first consideration for most of these workers. I mean we're
Speaker 1: always going to you know, your question about investing the
Speaker 1: Dasher app. Of course, we're always investing, you know, behind
Speaker 1: that experience to make sure that it's lower friction UM
Speaker 1: to earn whenever you want, wherever you want, and to
Speaker 1: do it, you know, with consistent expectations of what you
Speaker 1: will learn when you are on the road because the
Speaker 1: work is so part time. Investors are also suggesting we're
Speaker 1: going to see a lot more consolidation in this space.
Speaker 1: And given that door Dash is the big player in
Speaker 1: this market, that makes you potentially a prime acquirer. We
Speaker 1: saw you buy volt for example. Are we going to
Speaker 1: see you do more deals? Are you looking for more deals?
Speaker 1: And if so, in what areas well? The bar for
Speaker 1: M and A is is very high for us at Doorash,
Speaker 1: and that's because we really respect how difficult it is
Speaker 1: to actually do it really well. UM, So for us,
Speaker 1: two things have to be true. Number one, it certainly
Speaker 1: has to be a creative to the business. Number two,
Speaker 1: it also has to be creative to the management bandwidth
Speaker 1: that we have at DoorDash. I mean, we're trying to
Speaker 1: build the largest local commerce business globally, so we have
Speaker 1: a lot of work on our plate, so we have
Speaker 1: to make sure that there can't be any distractions. That's
Speaker 1: entirely focused. That's why you know volt with such a
Speaker 1: perfect example. You know, Vulture only adds to our international
Speaker 1: global footprint, doubling almost our addressable market. But the way
Speaker 1: in which they build their business, the culture around building
Speaker 1: the best product, making sure that they do it in
Speaker 1: a capital efficient way that aligns very well with how
Speaker 1: we do things. That dortsh and that was a perfect
Speaker 1: example of when M and A made sense. All right, well,
Speaker 1: we'll be watching your next moves there, do you know,
Speaker 1: and co founder Tony Schu always going to have you
Speaker 1: thank you for taking the time. Monday is opening day
Speaker 1: for Meta's first ever physical store. It is a brick
Speaker 1: and mortar bet on the metaverse. Facebook's parent Hoping hardware
Speaker 1: plays a central role in its virtual and augmented reality strategy.
Speaker 1: Bloomberg's at Ludlow got a behind the scenes look at
Speaker 1: the store in Burlingame, California. If you needed any more
Speaker 1: proof that Meta is going cool in on Web three,
Speaker 1: then look no further. Come take a look inside the
Speaker 1: company's first retail store where VR and are hardware, or
Speaker 1: at the forefront as the company charges into the Metaverse. Yes,
Speaker 1: this is a Metaverse store in the real world. This
Speaker 1: store is the size of a small house, less than
Speaker 1: six square feet opening it is a pretty gutsy move
Speaker 1: for Meta, considering other tech giants have tried and failed.
Speaker 1: Microsoft shut down its store locations permanently to focus on
Speaker 1: online sales, and earlier this year, Amazon announced it was
Speaker 1: closing its physical bookstores, Amazon four Star locations, and more
Speaker 1: pop up kiosks so that the company could better focus
Speaker 1: on its grocery business. So why does Meta think it
Speaker 1: will be more successful than its peers? Well, CEO Mark
Speaker 1: Zuckerberg said quote the best way to understand virtual reality
Speaker 1: is to experience it, and he believes that the metaverse
Speaker 1: is the next major computing revolution after the invention of
Speaker 1: cell phones. Here we have metas virtual reality goggles, the
Speaker 1: quest to which sell for about two are the RayBan stories.
Speaker 1: Hold tap for a photo, single tap, start filming, double
Speaker 1: tap you get some music going volume up, volume down.
Speaker 1: Meta wants this store to be a bridge that connects
Speaker 1: users to the metaverse, but that means that it has
Speaker 1: to rely on users actually being interested in the metaverse.
Speaker 1: That might not be so hard. One out of the
Speaker 1: eleven point to million A R and VR units sold
Speaker 1: worldwide were metas quest two. So Meta does have a
Speaker 1: large market share, but can it keep up the moment
Speaker 1: to and will stores like this one help the company
Speaker 1: expand its metaverse footprint. Bloomberg's ad Ludlow there at The
Speaker 1: store opens next week, and here are some other stories
Speaker 1: we are following. Peloton still trying to turn its business around.
Speaker 1: According to Bloomberg sources, the fitness company trying to sell
Speaker 1: a stake of about hoping to find a big name
Speaker 1: corporation or a private equity firm that could help validate
Speaker 1: the business with its investment. Peloton has been contacting potential buyers,
Speaker 1: but the process is still at an early stage. Palant
Speaker 1: Here meantime, just struck a ten million pound contract that's
Speaker 1: twelve and a half million dollars with the UK's Ministry
Speaker 1: of Defense. The data analytics company will offer support with
Speaker 1: its Foundry platform which lets users cut costs by automating
Speaker 1: work and reducing data processing time. This is the firm's
Speaker 1: largest contract to date with the high profile department. Welcome
Speaker 1: back to Bone More Technology and Emily Check in San Francisco.
Speaker 1: Let's stay on Zillo and welcome back Spencer Raskov, one
Speaker 1: of Zilla's co founders who ran the company for more
Speaker 1: than a decade. He is also the co founder of
Speaker 1: S and Sonny, a venture firm based in l A.
Speaker 1: So I want your view, Spencer on the big market picture.
Speaker 1: But let's start with the housing market and how all
Speaker 1: of these trends, rising inflation, rising rates for the foreseeable future,
Speaker 1: how that's going to bear down on the housing market. Well,
Speaker 1: what's driving home price appreciation is limited supply. So for
Speaker 1: most decades, starting in the sixties, we had twenty million
Speaker 1: new homes be built. In the decade after the financial
Speaker 1: crisis of two thousand eight, we only had ten million
Speaker 1: homes that were built, and so there's just a lot
Speaker 1: of missing supply and that's what's driven this huge uptake
Speaker 1: and home price appreciation over the last five or so years.
Speaker 1: So as mortgage rates have gone up and and they're
Speaker 1: gonna they still have further to go. Clearly, homebuyers are
Speaker 1: gonna have to trade down to slightly lower price points.
Speaker 1: But most of the data that I've seen around housing
Speaker 1: still predicts strong housing appreciation, not as high as it was,
Speaker 1: not uh ten, but probably five to ten percent home
Speaker 1: price appreciation. Now, the stocks that underlie this, like Zillo,
Speaker 1: that's a bit of a whole other question. And there's
Speaker 1: obviously been a risk off trade in the public markets
Speaker 1: away from growth and more towards profitability, and that's hurting
Speaker 1: companies like Zello and many other prop tech companies as well.
Speaker 1: So I just want to lean around this because there's
Speaker 1: a lot of people trying to get into the market
Speaker 1: who think they just can't right now if they didn't
Speaker 1: buy something first ten years ago. You're saying, prices are
Speaker 1: still gonna go up, and there's still a lack of supply,
Speaker 1: so there's still gonna be competition. Even though we're we're
Speaker 1: seeing forty year inflation and rates going up and people's
Speaker 1: portfolios are getting pummeled, we're still only at about one
Speaker 1: to two months supply of housing, which is amazing. I mean,
Speaker 1: a normal's market would have six months supply of homes
Speaker 1: for sale, So homes there's just are not enough homes
Speaker 1: for sale. We need home builders to build more homes
Speaker 1: if you want this supply demand and balance to to
Speaker 1: come back, uh, you know, into balance. So if if
Speaker 1: home prices are still going to keep going up in
Speaker 1: most major markets, not as quickly as they were, but
Speaker 1: home prices are in fact still appreciating. So let's talk
Speaker 1: about the sell off. How much worse does it get?
Speaker 1: Has a bubble popped? Is this you know what we're
Speaker 1: going to see for you know, the next several years. Well,
Speaker 1: it's a bit of a blood blath out there. Obviously,
Speaker 1: public market investors and viewers can see in the public
Speaker 1: markets just how bad it is in among public companies.
Speaker 1: I can give you a little insight into what's happening
Speaker 1: in the private markets, and unfortunately it's pretty ugly there
Speaker 1: as well. So the closer you are to being public,
Speaker 1: the harder ago of it one will have. So companies
Speaker 1: that were already in the I P O window hoping
Speaker 1: to go public this year, that window is shut as
Speaker 1: ones are being pulled. Those companies are not getting public
Speaker 1: anytime soon. Late stage growth companies are pulling back. Early
Speaker 1: stage companies are getting rounds done. I mean, there's a
Speaker 1: real venture chill a foot, unfortunately, and I'm seeing companies
Speaker 1: across all of the private sec all the venture funded
Speaker 1: companies that I'm involved in, are pulling back in different ways.
Speaker 1: So many of them are tightening headcount, many of them
Speaker 1: are cutting marketing, most of them are hunkering down. Some
Speaker 1: of them are doing inside rounds because they can't raise
Speaker 1: outside rounds from new investors. So it's amazing how quickly
Speaker 1: the weather has turned, and just really a couple of months,
Speaker 1: we've gone from an incredibly ebulent market to one that's
Speaker 1: extremely challenged. So how long are they going to hunger
Speaker 1: down for? How long are they going to have to
Speaker 1: be hiding well? I had one investment banker telling me
Speaker 1: the other day that if you look back over the
Speaker 1: last twenty years, the I p O window has only
Speaker 1: ever been closed for about six months, and we're already
Speaker 1: in month four of closure. So that bodes well for
Speaker 1: reopening of the I p O market sometime later this year.
Speaker 1: But private companies, venture funded companies, they're just assuming that
Speaker 1: this year is kind of a write off. I mean,
Speaker 1: every company I'm involved in, I've I've said you should
Speaker 1: assume you should operate your business assuming you'll not be
Speaker 1: able to raise a venture around this year. That's how
Speaker 1: that's how conservative, at least at least my companies are
Speaker 1: being so I think this could last for for quite
Speaker 1: a while. It's this risk off trade. As interest rates
Speaker 1: ticked up, public market and private market investors are prioritizing
Speaker 1: profitability over growth, and that's increased the cost of capital.
Speaker 1: It's made it difficult for high growth companies to raise money,
Speaker 1: and they're all pulling back as a result. Sorry to
Speaker 1: be the bearer of bad news on a Friday afternoon. Well,
Speaker 1: given it to us straight, we appreciate it. There is
Speaker 1: one person out there who seems to have no trouble
Speaker 1: raising money, and that is Elon Musk, who has lined
Speaker 1: up a long list of investors to help him take
Speaker 1: over Twitter. He was tweeting earlier some of his ideas,
Speaker 1: more ideas for how he plans to change the company
Speaker 1: those there's still a lot of unknowns. You're a big
Speaker 1: prolific tweeter, what do you think about Elon Musk owning
Speaker 1: this company? Well, I was surprised, to be honest, and
Speaker 1: I tweeted as such. I was surprised at this deal
Speaker 1: got done, although it actually hasn't gotten done yet, so
Speaker 1: so we'll see. But um, as a Twitter user, I'm
Speaker 1: sort of excited to see what Elon's products insights are
Speaker 1: going to bring to the product, the product that I've
Speaker 1: used for so long and so many of us love,
Speaker 1: so it should be interesting to watch. Um. I am
Speaker 1: a little surprised that he's gotten so much financing lined up,
Speaker 1: given that he has publicly stated that he's not going
Speaker 1: to try to run this like a normal business. He's
Speaker 1: not trying to maximize profit. He doesn't he's not even
Speaker 1: really interested in a financial return, and yet he is
Speaker 1: still convinced others to invest alongside him. This just goes
Speaker 1: to show how much amazing magic and pixie Dust Elon
Speaker 1: Musk has uh associated with him, that he's able to
Speaker 1: get people to co invest, even when he says it's
Speaker 1: an unconventional investment. Um. You know, I I do worry
Speaker 1: as a Twitter user that the company has made great
Speaker 1: strides to reduce spam, reduced bullying, and a lot of
Speaker 1: the discussion about how we're going to restore free speech
Speaker 1: to with Twitter On Twitter, it sounds really good, but
Speaker 1: with free speech comes a lot of spam, a lot
Speaker 1: of harassment, and a lot of bullying, and those are
Speaker 1: things that Twitter management has worked very hard to reduce
Speaker 1: over the last couple of years. So I worry about
Speaker 1: a possible step back in that in that regard, but
Speaker 1: benefit of the doubt has to go to one of
Speaker 1: the greatest entrepreners of all time, who has created so
Speaker 1: many extraordinary companies, and obviously he uses the product as
Speaker 1: much as anybody, So it'll be amazing to watch. There'll
Speaker 1: be plenty for for you to talk about and for
Speaker 1: me to tweet about as as Elon takes this company
Speaker 1: from it. What do you think about the role of
Speaker 1: Jack Dorsey here and and the the future of a
Speaker 1: decentralized Twitter. Is that a good idea? I'm not really
Speaker 1: sure what that means, to be perfectly candid, Um, I mean,
Speaker 1: I I there's talk about open sourcing the algorithm and
Speaker 1: providing more transparency, but I don't really know what that
Speaker 1: means to the user, and I don't know how it
Speaker 1: affects the business model. Um. You know, this company has
Speaker 1: always had it's always been a little dysfunctional right at
Speaker 1: the board level of the management level. It's always had challenges,
Speaker 1: It's always punched of its weight in terms of media
Speaker 1: attention and consumer interest. And so you know, maybe out
Speaker 1: of the public eye, maybe private for a couple of years,
Speaker 1: it'll be able to stabilize its leadership team, stabilize its board,
Speaker 1: focus on the product, and then hopefully come back out
Speaker 1: the other side and improved company and hopefully an improved product.
Speaker 1: All right, Spencer Rascoff, always appreciate your thoughts here on
Speaker 1: the show, co founder of Zillo and seventy and Sonny
Speaker 1: is such a great need for a venture firm given
Speaker 1: today's weather. Thank you. It is time now for our
Speaker 1: crypto report and bitcoin and other cryptocurrencies taking a beating
Speaker 1: along with the rest of tech in this cell often works.
Speaker 1: Katie Greifeld here with the big picture, Katie, what a week?
Speaker 1: What a week? It was an especially bad week four
Speaker 1: risk assets, an especially bad week for bitcoin in particular.
Speaker 1: Actually didn't start out so bad. We actually rallied on Tuesday,
Speaker 1: but you add in Thursday's nearly nine percent drop in bitcoin,
Speaker 1: such a end the week with losses of nearly six percent.
Speaker 1: It's training in about thirty six thousand dollars right now,
Speaker 1: about a hair below at one point it hit forty
Speaker 1: dollars this week. That is a distant memory at this point, Emily.
Speaker 1: But a big reason why we saw bitcoin performs so
Speaker 1: poorly is because it really trades like a tech sock
Speaker 1: more than anything else. Bitcoin's correlation with the NASSEQ one
Speaker 1: it's currently at its strongest level in data going back
Speaker 1: to at least, which really tells you something. As you
Speaker 1: can see in that chart there, that relationship has really
Speaker 1: strengthened in the past couple of months, in the past
Speaker 1: couple of weeks even, and now you have tech socks
Speaker 1: really under pressure from rising rates. Bitcoin is two. And
Speaker 1: what's interesting in this cell off, this tech cell off,
Speaker 1: this crypto sell off. You have Ether. It's been a
Speaker 1: relative haven, still down for the week about four point
Speaker 1: five percent, but obviously less than Bitcoin. And that's interesting
Speaker 1: because Bitcoin is built is digital gold. It's clearly not
Speaker 1: acting as a haven lately, though, and as you can
Speaker 1: see or Ether, rather it's outperformed not just this week
Speaker 1: but over the past few years. At this point, Emily,
Speaker 1: you're not safe anywhere, are you. I want to ask
Speaker 1: you about another story, and that is an Nvidia agreeing
Speaker 1: to pay a five and a half million dollar fine
Speaker 1: is part of a settlement with the SEC over crypto mining.
Speaker 1: What do we know about this? This is fascinating. So
Speaker 1: it basically boils down to the video allegations that in
Speaker 1: the video failed to adequately disclose just how much of
Speaker 1: its revenue comes from demand from crypto minders. So the
Speaker 1: SEC said that for two consecutive quarters in the video
Speaker 1: didn't make clear that demand from crypto minors in particular
Speaker 1: made up a significant part of its sales increase for
Speaker 1: graphics processing units. In the video of course settled that case.
Speaker 1: They didn't admit wrongdoing, but they did pay that five
Speaker 1: point five million dollar fine. And this is fascinating, and
Speaker 1: because if you think about Ethereum, it's moving away from
Speaker 1: proof of work mining to proof of steak and what
Speaker 1: that really means is that it's no longer going to
Speaker 1: require those graphics cards. It's much less intensive. And already
Speaker 1: in December, the video had warned that it's seen revenue
Speaker 1: from crypto mining dropped by over compared to the previous
Speaker 1: few quarters. And Ethereum hasn't even moved to this proof
Speaker 1: of state mining process yet that's still yet to come
Speaker 1: further this year but already the video under pressure really
Speaker 1: reminded me of the conversation we had yesterday about how
Speaker 1: these movements in the crypto market they affect the equities
Speaker 1: of stocks and the companies that are involved just broadly
Speaker 1: in the crypto sphere. So, Katie, what aren't going to
Speaker 1: be watching when the markets open next week and of
Speaker 1: course crypto trades through the weekend. It's a great question. Honestly,
Speaker 1: I'm most interesting interested in this dynamic between Ethereum and Bitcoin. Again, Bitcoin,
Speaker 1: it's the largest cryptocurrency out there, it's supposed to be
Speaker 1: the most liquid, the most stable. This haven the area
Speaker 1: clearly giving it a run for its money. We'll see
Speaker 1: if this out performance can continue, both on the upside
Speaker 1: and the downside. All right, Bloomberg's Katie Greifeld, thank you
Speaker 1: for wrapping all that up for us. We saw tech
Speaker 1: stocks fall for the fifth straight week, marking the sector's
Speaker 1: worst weekly streak since two thousand and twelve. I'm joined
Speaker 1: out by Tuilio CEO Jeff Lawson. The company just reported
Speaker 1: it's earnings results and better than expected, but still they
Speaker 1: couldn't escape the sell off either. Jeff, thank you so
Speaker 1: much for joining us. So let's put Tuilio aside for
Speaker 1: the moment. I really want to get your view on
Speaker 1: the broader picture of what's happening in the markets here. Inflation, macroeconomics,
Speaker 1: certain uncertainty, rising rates. How are you reading all of this? Well,
Speaker 1: you know, the way I look at it is, you know,
Speaker 1: we're seeing the end of a long era of free
Speaker 1: money that our economy and the global economy has been in,
Speaker 1: you know, going back all the way to September eleven
Speaker 1: and then refreshed again during the Financial crisis and then
Speaker 1: with COVID, and so you know, investorors are obviously reacting
Speaker 1: to and the whole world reacting to the government's reacting to.
Speaker 1: You know what the implications of that are to now
Speaker 1: for the really almost the first time in twenty years,
Speaker 1: like managing inflation versus interest rates, and so, yeah, a
Speaker 1: lot of rescent going on. You know, we're not happy
Speaker 1: about obviously what's been happening with tech stocks or our
Speaker 1: stock but at the same time, you know, new world
Speaker 1: that that we're entering. And I just think about the
Speaker 1: fundamental value proposition that Toyo provides, you know, to our customers.
Speaker 1: And we're now in three and a half billion dollar
Speaker 1: revenue run rate. Business growing incredibly fast, and so yeah,
Speaker 1: we just keep our eye on the ball, which is
Speaker 1: serving our customers. And I think that's what a lot
Speaker 1: of companies are probably just doing there in this time.
Speaker 1: You say you're planning to deliver thirty percent more than
Speaker 1: organic growth over the next couple of years, does not
Speaker 1: still happen if we go into a recession. Well, we
Speaker 1: just reconfirmed our guidance that we are going to deliver
Speaker 1: thirty percent annual organic growth through two and we started
Speaker 1: that guidance um UH in twenty uh and so we
Speaker 1: have yet again reconfirmed it as well as last quarter
Speaker 1: we added that we intend to be profitable for the
Speaker 1: fiscal year for twenty three and uh and so we
Speaker 1: just reconfirmed both of those Now. Now, luck if the
Speaker 1: whole world hits some you know, the worst case scenario
Speaker 1: of a macro environment, you know, who knows what could
Speaker 1: happen in that world. But from every indicator that we
Speaker 1: see today, that that gave us a reason to reconfirm
Speaker 1: both of those points of titants on our call this week.
Speaker 1: So talk to us more about how things like messaging
Speaker 1: and other new features are evolving. So you keep those customers,
Speaker 1: new customers signing up, and sales coming in. Yeah, we
Speaker 1: have almost two hundred and seventy thousand companies that use
Speaker 1: Tilio to engage with their customers. And when you think
Speaker 1: about what's been happening in the long trend of last
Speaker 1: twenty years of digital transformation, more and more companies, businesses
Speaker 1: are moving online and they're seeing more more digital transactions.
Speaker 1: That means they meet their customers in this digital world.
Speaker 1: And we provide the tools and the communications channels and
Speaker 1: now the data infrastructure to allow companies to know their
Speaker 1: customers based on all the data that they see about
Speaker 1: their customers first party data, and then take that understanding
Speaker 1: of their customer and use it to engage with those customers.
Speaker 1: And engagement is essentially the act of personalizing all of
Speaker 1: your interactions, making every interaction relevant. It's the act of
Speaker 1: actually buying relevant ads to target your customers. It's the
Speaker 1: act of tiving a direct channel of conversation with your customer.
Speaker 1: And companies who do this well see outsized performance in
Speaker 1: their revenue. In fact, we recently did a survey of
Speaker 1: three thousand different executives and a wide variety of companies
Speaker 1: all around the Globe, and we found that those companies
Speaker 1: that invested in customer engagement, which is building that digital
Speaker 1: relationship with their customers, on average, saw seventy revenue growth
Speaker 1: last year. And so that just goes to show you
Speaker 1: that when you build a strong relationship with your customer
Speaker 1: using all this amazing technology that is out there that
Speaker 1: Tilio powers, well, it has outside returns in terms of revenue. Now,
Speaker 1: I want to ask you about a slightly different topic
Speaker 1: and the leak of the draft opinion from the Supreme
Speaker 1: Court on Where versus Wade. Tuilio came out last year
Speaker 1: opposing the Texas anti abortion law, and I'm I'm just
Speaker 1: curious for your reaction to this league what you're telling employees. Well,
Speaker 1: you know, I think it is it is a dark
Speaker 1: day to be removing fundamental rights from basically half of
Speaker 1: our population. And we think it is a woman's right
Speaker 1: to choose her health care decisions for her body. We're
Speaker 1: going to support our employees in their need to to
Speaker 1: get the health care options that they need. And ultimately,
Speaker 1: we think that healthcare is a personal choice and that
Speaker 1: should be a choice that's left up to the individual.
Speaker 1: And how do you think about this as a business leader,
Speaker 1: because there certainly are customers who don't necessarily agree with you. Absolutely,
Speaker 1: it's a very tough issue and it is it is
Speaker 1: an issue that science has not answered the question of,
Speaker 1: like when does life begin? And so therefore it becomes
Speaker 1: a matter of beliefs, and there are religious beliefs, personal beliefs,
Speaker 1: etcetera involved in this decision, which makes it a very
Speaker 1: hard issue for leaders, um like myself or I need
Speaker 1: to to actually kind of you know, a pine on
Speaker 1: and so in some ways it's like stop asking me
Speaker 1: a man just because I'm a CEO what I think
Speaker 1: about it? Like what I what I ultimately can say
Speaker 1: is I believe that women should have the choice to
Speaker 1: to to make decisions health care decisions about their own bodies.
Speaker 1: And you know, and that's not an opinion of when
Speaker 1: life begins and all that. Science doesn't know the answer.
Speaker 1: Nobody knows the answer to that. But what I do
Speaker 1: believe is that women should have the ability to make
Speaker 1: those decisions for themselves. Fair Enough, I want to ask
Speaker 1: you about another hard issue, and that is of free speech.
Speaker 1: You in the past, for example, the Pittsburgh synagogue shooting,
Speaker 1: you called on social media to do a better job
Speaker 1: cracking down on hate and misinformation. What do you think
Speaker 1: about Twitter being owned by Elon Musk given that his
Speaker 1: big thing quote unquote free speech. Well, I do think
Speaker 1: that reality like free speech in a broad sense is
Speaker 1: a nice thing to rally around, but then you do
Speaker 1: right into reality, which is that when people say things
Speaker 1: or do things that violate the community standards, and every
Speaker 1: community has standards online, offline, you name it, um, what
Speaker 1: are you gonna do? And that there's business consequences, like
Speaker 1: if users stop liking the community of of of social
Speaker 1: media network, they'll stop using it. That is very real
Speaker 1: business impacts. And so the way I thought about, you know,
Speaker 1: free speech, whether free speech is a legal doctrine that
Speaker 1: governs the government's um uh imposition of things you can
Speaker 1: say or can't say, It has nothing to do with
Speaker 1: what private companies um actually how they drive their terms
Speaker 1: of service and how a company builds its community. And
Speaker 1: so the very real business question will be is if
Speaker 1: some of those engagement, if some of those rules get loosened,
Speaker 1: or you know, there is more community breaking type behavior
Speaker 1: on Twitter, people should vote with their feet. And look,
Speaker 1: you can go to the metaverse, you can go to
Speaker 1: the muskie verse, you can go to the snappy verse,
Speaker 1: you can go to the insta verse, whatever. Like, There's
Speaker 1: a lot of options out there, um and so, and
Speaker 1: people can and will vote with how they use the service.
Speaker 1: And ultimately it's a business and uh that is probably
Speaker 1: going to drive a lot of the decisions that that
Speaker 1: that owners will make. That was quite an epic way
Speaker 1: to end this show on a Friday afternoon. Jeff Lawson,
Speaker 1: thank you for waiting through some very thorny issues with
Speaker 1: the CEO of Toilio. I was good to have you
Speaker 1: on the show.