Speaker 1: I'm Caroline Hyde up Bloomberg's San Francisco studio. Welcome for
Speaker 1: New York. Together back in San Francisco and d Lovelow.
Speaker 1: This is Bloomberg Technology and how nice it is to
Speaker 1: have you here, so many headlines to pass over many
Speaker 1: of the market moving when there's some feel good right
Speaker 1: now around technology, despite layoffs, despite everything that's going on,
Speaker 1: and it is centric to being in San Francisco this
Speaker 1: week with all the earnings to come, first and foremost,
Speaker 1: we talk about valuations here in Silicon Valley. Microsoft's ten
Speaker 1: billion bet on open Ai is just the start of
Speaker 1: the artificial intelligence revolution, is what Microsoft's chief product officer
Speaker 1: is pitching as quote the defining technology of our time
Speaker 1: and more local to us. Elliott's multibillion dollars stake in
Speaker 1: sales Force comes as a way of the activist investors
Speaker 1: pushed companies to act more on behalf of their shareholders.
Speaker 1: And we now know what Apple's mixed reality headset is
Speaker 1: capable of as a company explores a new approach to
Speaker 1: eye and hand tracking controls. But first let's do it.
Speaker 1: Let's get to how the focus on any investment management
Speaker 1: has had us all eyes on the tower that is
Speaker 1: here in San Francisco. Of course, what is Mark Benioff,
Speaker 1: Where is his focus now? And what does the activist
Speaker 1: Steake really mean for his business? Swooping in of course
Speaker 1: after layoffs, after deep stop plunge at the enterprise software
Speaker 1: giant mean Wes Leana Veka is more every New York Leanna,
Speaker 1: As I sit here in San Francisco, and I think
Speaker 1: of initially the worry Mimmi many had for Mark Benioff.
Speaker 1: Perhaps as we've seen some of the other executives shed away,
Speaker 1: many thought maybe that meant he was going to be
Speaker 1: doing more dealmaking, spending more. But does an investor like
Speaker 1: Elliott mean that's off the cards? At this point, we
Speaker 1: don't know exactly what Elliott is pushing for, but we
Speaker 1: have seen their public statement that was pretty complimentary of
Speaker 1: Mark Bennioff, so it doesn't look like it'll be a
Speaker 1: nasty fight. That said, Elliott Management has taken on so
Speaker 1: many big tech companies over time that have made so
Speaker 1: many changes, so there could really be a range of
Speaker 1: things that they would like. I think ultimately they want
Speaker 1: the stock to go up and that they believe there's
Speaker 1: probably ways for shareholder value to be improved, you know, Leona,
Speaker 1: this time around Salesforce, Elliot's name crosses the Bloomberg terminal monthly.
Speaker 1: It seems to me, you know, the cadence of their investments,
Speaker 1: what is their track record on working with companies? Because
Speaker 1: you said you read the statement from the company deep
Speaker 1: respect for Mark Bennioff was the word they used. It
Speaker 1: doesn't seem hostile. It seems they want to work with
Speaker 1: Mr Benioff over at Salesforce Tower. And one of the
Speaker 1: reasons they might be wanting to work in a friendly
Speaker 1: manner with the company is that I've been joking with
Speaker 1: sources that Salesforce is now a hedge fund hotel. There's, uh,
Speaker 1: you know, first there was Starboard, Now there's Elliott, Inclusive Capital,
Speaker 1: Jeff Odden's firm. He used to be a value actors
Speaker 1: in there. And then there's a mystery Activists that we're
Speaker 1: trying to figure out. CNBC, you know, has report it
Speaker 1: on that. So there might be a sense that maybe
Speaker 1: Elliott's the White Knight activists to work with. In twenty nineteen,
Speaker 1: eBay fell in the crosshairs of Elliott and also Starboard,
Speaker 1: and they gave them both board seats. So That's another
Speaker 1: example that we're kind of looking back in history to
Speaker 1: see what could happen here. At this point, we don't
Speaker 1: know if Salesforce is willing to offer those board seats,
Speaker 1: but Jesse Cohen, who is the one leading the investment
Speaker 1: for Ellie Management, he sat on some pretty big boards
Speaker 1: and Leanna just put into perspective twenty twenty two, the
Speaker 1: last quota, we saw so many more activist steaks really
Speaker 1: being built globally worldwide. How many offenses are there? I
Speaker 1: can already think of what Disney's outlet, Intel, how what
Speaker 1: other companies? So you nailed it with Disney. That's kind
Speaker 1: of the big one that the whole activist community is
Speaker 1: watching because that looks like it's headed to an actual
Speaker 1: shareholder vote at some point. Um Elliott doesn't usually get
Speaker 1: to that shareholder vote, so I'd be surprised if that's
Speaker 1: where Salesforce is headed. But right now we're entering this
Speaker 1: what we call proxy season. These nomination windows are starting
Speaker 1: to open at various companies, so we're seeing investors come
Speaker 1: in and say, hey, we want to nominate shareholders. Salesforce's
Speaker 1: window is coming up in February. We'll be watching that
Speaker 1: really closely. All right, Bloomberg's the Aanna Baker who leads
Speaker 1: our deals coverage investor coverage. Thank you so much, Caroline.
Speaker 1: Welcome to San Francisco. If you jump in a cab acuet,
Speaker 1: you go downtown whatever, no preference, but you'll see the
Speaker 1: Salesforce tower. And this is what jumped out at me
Speaker 1: on the Bloomberg terminal earlier, this single chart about salesforces
Speaker 1: marketing spend as a percentage of its sales. You start
Speaker 1: to realize what it is that investors, activists, investors might
Speaker 1: be getting at. They're almost at fifty right of their
Speaker 1: their sales spend being on marketing, which is kind of
Speaker 1: mind blowing a little bit, right, But then they have potential.
Speaker 1: You know, this is a software company margins it also
Speaker 1: though that spend as largs you were on dream Force.
Speaker 1: I think the last time we was. Lenny Kravitz is
Speaker 1: performing there. These big parties. Basically it's a massive music festival.
Speaker 1: It does a lot for the San Francisco ecosystem as well.
Speaker 1: Those sorts of events they bring people to gatherings, which
Speaker 1: are a city that they're really taking on the road
Speaker 1: to the marketing spenders about being in people and in
Speaker 1: person and sharing ideas. But they're probably going to want
Speaker 1: him to pull back on that. And this is a
Speaker 1: company that has had to pull off on the on
Speaker 1: the layoffs front, you know, in pausing her in other areas,
Speaker 1: and where M and A has been just absolutely right.
Speaker 1: The other big story we're watching here out on the
Speaker 1: West Coast is, of course, Microsoft and open Ai are
Speaker 1: reported ten billion dollar investments set over a number of years,
Speaker 1: which open Aron Microsoft have now confirmed sort of in
Speaker 1: a blog, the company saying Microsoft will involve invest multiple
Speaker 1: billions of dollars. Remember, this is a company that mass
Speaker 1: more than a million users just within days of launch
Speaker 1: back in November, and we've already started the debate where
Speaker 1: does this all fit in with Microsoft strategy? Where does
Speaker 1: it fit in our lives? The use of chat, GPT
Speaker 1: and other AI tours a fascinating one, and also how
Speaker 1: does this help soft gain market share from the likes
Speaker 1: of aws. Now we know that Amazon is the power
Speaker 1: player when it comes to the cloud provision. Overall the
Speaker 1: fact that Microsoft wants to intertwine open Ai into every
Speaker 1: really every part of Azure the business it wants to
Speaker 1: set itself apart as a cloud offering, and open Eye
Speaker 1: is such a clever way to do it. What's so interesting,
Speaker 1: of course, is the open Eye once upon a time
Speaker 1: was an off profit, now as a capped profit right company.
Speaker 1: So this deal, there's ten million that's being invested. It's
Speaker 1: kind of awkwardly done, isn't it, because you're kind of
Speaker 1: being it's offering in kind. Basically open ai is able
Speaker 1: to use the firepower of Microsoft's own cloud provisions, so
Speaker 1: so it's a really significant investment from Microsoft seven days
Speaker 1: after they have laid off ten thousand staff. But the
Speaker 1: closed profit model is where basically any money that open
Speaker 1: Ai mates, which is by licensing the tools to software developers,
Speaker 1: they put back straight into the development because they still
Speaker 1: feel like it's in the nascent stage, after they've paid investors,
Speaker 1: after they've paid their dus, and after they pay their
Speaker 1: own employees. Right, yeah, I mean, we've been trying to
Speaker 1: identify what is the next big company for the next decade,
Speaker 1: the next twenty years. You know, there's a lot of
Speaker 1: debate whether actually open ai is it, and the emphasis
Speaker 1: of them in the news cycles amazing, And you're right,
Speaker 1: Microsoft are already implementing this and as you're cloud for customers.
Speaker 1: You can use chat GPT or even dally on the
Speaker 1: imaging side, So it's out there in the real world.
Speaker 1: You and I have played with it to a lesser extent,
Speaker 1: you know here on the show. But interesting a lot
Speaker 1: of cash math on chat GPT. That was my learning,
Speaker 1: my podcast learning over the course of the weekend. And
Speaker 1: I can't tell you how nice it's about in San
Speaker 1: Francisco known fat that chat GPT wouldn't tell you about
Speaker 1: my family. My son's middle name is Francisco. That's how
Speaker 1: much the city. Because of your time here, well, let's
Speaker 1: make the most of it while you're here. We've might
Speaker 1: have been positive. I'm big deck for I don't know
Speaker 1: a year, a year and a half. We do believe
Speaker 1: that there is still some deflation to come out of
Speaker 1: this market after the exube. I actually think that the
Speaker 1: tech sector is one of the few sectors that is
Speaker 1: really discounting a recession in its outlook. And the longer
Speaker 1: the macro volatilely persists, we do expect early stage and
Speaker 1: seed to start to see that crunch that the late
Speaker 1: stages you see right now, there is going to be
Speaker 1: some amount of normalization of the demand. Uh well, frankly,
Speaker 1: we in the tech industry will also have to get efficient, right.
Speaker 1: It's not about everyone else doing more with less. We
Speaker 1: will have to do more with less. There was just
Speaker 1: some of our recent guests discussing the state of the
Speaker 1: tech sector. And another week, another day, more headlines all
Speaker 1: to do with layoffs. This Monday, Spotify six percent of
Speaker 1: staff six dred and then just as we were getting
Speaker 1: ready for the show, Gemini a second round of ten
Speaker 1: percent and just keeps going un relenting. Really feels like
Speaker 1: the numbers that are coming out ten percent smaller amount
Speaker 1: for Gemini, of course, a sixth cent number layoff over
Speaker 1: Spotify I means six thousand people are going to be
Speaker 1: going this vote again. It's about a CEO trying to
Speaker 1: own the mistakes made, basically saying his words were I
Speaker 1: was too ambitious. They put out a note from Daniel
Speaker 1: talking about the fact that they once again hired too
Speaker 1: many but also invested too far perhaps and the fact
Speaker 1: that the executive changes going on at Spotify they want
Speaker 1: to have more efficiency. That is the watchword. There's a
Speaker 1: debate of how much embassis you put on layoffs announced
Speaker 1: versus laos and acted you know, we have the Challenger
Speaker 1: Christmas data and people say, well, those are just announcements,
Speaker 1: they're not fulfilled. And there are others out there in
Speaker 1: the market who say there's bright spots here. And that's
Speaker 1: why I'm delighted to say we can discuss with Spencer Green,
Speaker 1: managing partner at t s VC, which actually is invested
Speaker 1: in C state companies over the last twelve years. A
Speaker 1: good example, you invested in Zoom eleven before they were
Speaker 1: even had a product, really, you know, and that was
Speaker 1: coming out of a financial crisis or downturn. When you
Speaker 1: see these headlines crossing the Bloombog terminal time and time again,
Speaker 1: Spotify six the latest as somebody who invests in companies
Speaker 1: that actually may still be trying to hire. What's your reaction, Well,
Speaker 1: I mean, nobody roots for a recession, but it's definitely
Speaker 1: good for the seed stage economy. Um, the seed I
Speaker 1: mean you heard, you know, one of your your prior
Speaker 1: guests talking about a crunch and seed we see the opposite.
Speaker 1: We see that brand new company formations are booming and
Speaker 1: it's become much easier to hire staff, to hire staff,
Speaker 1: to hire talent. Um. We had a year ago, what
Speaker 1: I would call it double whammy that it was hard
Speaker 1: to hire people, and also these big companies were investing
Speaker 1: in some of these innovative projects. As they cut their investments,
Speaker 1: they leave room for competitors and they put more talent
Speaker 1: on the street spent. So we delight to have you
Speaker 1: in the studio, Caroline and I while we're together in
Speaker 1: San Francisco. It feels like the story is not just
Speaker 1: playing out here. But the reason you hear is, I
Speaker 1: tweeted over the weekend, hold on, is there anyone that's
Speaker 1: kind of actively trying to go out there and hire
Speaker 1: all these people? Because we do hear that, but we're
Speaker 1: looking for some concrete evidence that it's true. I mean,
Speaker 1: are you saying to your portfolio companies, Hey, now's a
Speaker 1: great chance to get top to absolutely. And we have
Speaker 1: portfolio companies. We have one here in San Francisco called
Speaker 1: Zoom Transportation that runs electric school bus services for San
Speaker 1: Francisco and for Oakland and for Los Angeles and so forth.
Speaker 1: They're hiring. We have a recent company we funded called
Speaker 1: Ebots that does assembly robots for electronics. They're hiring. Angle
Speaker 1: Health is hiring. You know, lots of our portfolio companies
Speaker 1: are hiring and a year ago it was much more
Speaker 1: difficult for them. It's interesting, and I suppose in many
Speaker 1: ways this is why the relentless headlines that we talk
Speaker 1: about the hundred tens of thousands being let go at
Speaker 1: Metro and they're like on't showing up in the federal
Speaker 1: data because many would say anninkdotally, they're snapped up very quickly.
Speaker 1: They get great severance and then they move on either
Speaker 1: to be become a talent at Zoom one of your
Speaker 1: new ventures and the transport company, or are they becoming
Speaker 1: entrepreneurs themselves and yet to see any sort of charts
Speaker 1: on new business formation. Are you starting to hear from
Speaker 1: these people getting great severance packages. I know they probably
Speaker 1: want to remain at a company and employed, but if
Speaker 1: they are let go, are they willing to take on
Speaker 1: a can build something? You know, It's it's a huge
Speaker 1: point and I think it's definitely fueling a lot of
Speaker 1: the entrepreneurial activity because what you have is, you know,
Speaker 1: as you said, folks who maybe have a little bit
Speaker 1: of money, they've gotten a severance, they've been doing very
Speaker 1: well over the last few years working for these larger
Speaker 1: companies and in some cases, you know, the Silicon Valley
Speaker 1: spree and what's happening in San Francisco has always I mean,
Speaker 1: so many people that you meet here they have another
Speaker 1: startup going on on the side, right, So there are
Speaker 1: people who are and so if you think about, like
Speaker 1: who's going to get laid off some of these people,
Speaker 1: maybe you were not rated as the best employees by
Speaker 1: their big company employers because they were giving half of
Speaker 1: their time to the company and half of the time
Speaker 1: to their startup. So now you say, well, I've got
Speaker 1: a little extra cash, I've got all my day free
Speaker 1: to work on my startup. Not a bad situation. Is
Speaker 1: there an element that you're seeing this worldwide? This is
Speaker 1: very much where are the talent that you're currently hiring
Speaker 1: and seeing hiring from? Do people want to remain remote?
Speaker 1: Are you seeing some of your startups that are SF
Speaker 1: based hiring talent for being let go in Austin Miami?
Speaker 1: Where is this all going on at the moment? It
Speaker 1: is much more remote than what it used to be.
Speaker 1: You know, we we've been in you know, I've been
Speaker 1: in Silicon Valley since the nineties and it was definitely
Speaker 1: you know, you'd set up a facility, everybody would come there. Um,
Speaker 1: you even had, of course, you know, companies like Facebook
Speaker 1: where they were relocated by their investors to Silicon Valley
Speaker 1: because the story was, oh, yeah, we love you, but
Speaker 1: you can't do it from where you are. It's not
Speaker 1: so much a destination for companies. I think a lot
Speaker 1: of companies are formed here still, and the companies that
Speaker 1: are formed here have done so much more with remote talent,
Speaker 1: and some of it's offshore. More of it now is
Speaker 1: actually on shore, but outside of the area. The conversation
Speaker 1: that Caroline keep having is that across the startup curve,
Speaker 1: the opportunity of three is going to be seed stage,
Speaker 1: earlier stage investments, and actually it's the growth stage funds
Speaker 1: keeping their power to dry even though they raised all
Speaker 1: that capital over the last two years. Is that a
Speaker 1: fair interpretation of where the industry sits. Certainly? I think
Speaker 1: something it ts. You see, we do seed stage primarily,
Speaker 1: and we feel like the markets coming to us because
Speaker 1: they need. Um. Well, the market is coming to us
Speaker 1: in the sense that it's just hard to make money
Speaker 1: at late stage right now. Um, if you have a
Speaker 1: company that was overfunded at too high of evaluation a
Speaker 1: year or two ago. Yes, you can do a down round,
Speaker 1: you can get a better price, but then the employees
Speaker 1: are not happy, so you lose momentum in the business.
Speaker 1: So even though you might normalize or rationalize the pricing
Speaker 1: of the company, that doesn't mean that it's going to
Speaker 1: take off and be successful. So I would hate to
Speaker 1: be writing Hunter million dollar checks right now. I think
Speaker 1: it's it's a difficult time. We write a million dollar
Speaker 1: checks into early companies and you think about something like Zoom.
Speaker 1: There's a photograph which I wish I had with us,
Speaker 1: but photograph of the of the assume founder er qu
Speaker 1: N two engineers in our offices in two thousand eleven.
Speaker 1: That was the company. It was himself and two engineers
Speaker 1: a power point deck. Right, fantastic ambitions. Um, those are
Speaker 1: the kinds of folks that we're funding right now. Tweet
Speaker 1: ask off to the show you when you've done Absolutely yeah,
Speaker 1: and Ginko Bio Works and and Cata they I haven't
Speaker 1: been a one trick plony TSPC managing partner. He's a
Speaker 1: coal spencer green. What joy having him right here in
Speaker 1: the studio with us. Nice tweeting from you had to
Speaker 1: get him on as well, meanwhile, coming up Apple's headset,
Speaker 1: it's going to be controlled by your hands, by your eyes.
Speaker 1: More details on the mixed reality device next, and it's
Speaker 1: price point. Li's a Blien Bug New Day, New Week
Speaker 1: News scoop for one Mark Gum and let's talk about
Speaker 1: new details that are out about the highly anticipated three
Speaker 1: thousand dollar mixed reality headset by Apple. Of course, it's
Speaker 1: according to sources, which boast an eye and a hand
Speaker 1: tracking system that could set the technology pretty much apart
Speaker 1: from rivals. Right, Mark, you've got this new story and
Speaker 1: just tell us about how this one's going to be
Speaker 1: different from the other ones in the market. Yeah, that's
Speaker 1: exactly right. So this is Apple's next big thing. They've
Speaker 1: been working on it for north of seven years. At
Speaker 1: this point. They have well over engineers on the project.
Speaker 1: They're getting ready to unveil it in the next couple
Speaker 1: of months and put on sale later this year. The
Speaker 1: factories are going to start churning them out starting at
Speaker 1: the end of next month in China. But the eye
Speaker 1: in hand control, right, some devices on the market area
Speaker 1: now already can read your eyes and have hand control,
Speaker 1: but with Apple's device, it's the way they work together.
Speaker 1: That makes it so special. If you remember the touch
Speaker 1: screen on the first iPhone, that was a big differentiator,
Speaker 1: the crown on the watch. For this, it's eye in
Speaker 1: hand control. So let me give you an example. The
Speaker 1: way you control the device is you can just look
Speaker 1: at something, whether you want to launch an app, whether
Speaker 1: you want to swipe through a list or toggle a setting. Right,
Speaker 1: you look at it and then you pinch your thumb
Speaker 1: and your index finger together when you're looking at it
Speaker 1: to launch it. Just like on a touch screen you
Speaker 1: tap what you want or on a mouse, you point
Speaker 1: the cursor toward it and then you click. This is
Speaker 1: you look and tap your fingers together. So pretty nifty.
Speaker 1: I guess. The question is how do we get to
Speaker 1: a three thousands of the price point? Right? How does
Speaker 1: this headset differentiates itself from metas quest? The other real
Speaker 1: question I have to you is like, as an iPhone
Speaker 1: user and thinking about emoji or emojis and and emojis
Speaker 1: right where you use the camera to kind of map
Speaker 1: your face and interact with that technology. Is this the
Speaker 1: kind of extension of that. Yes. So in terms of
Speaker 1: the price point, well, it has fourteen cameras, right, you
Speaker 1: have a bunch of cameras outside. You need cameras that
Speaker 1: can look forward, you need cameras that can look up,
Speaker 1: and need cameras that could look down, right down to
Speaker 1: see what your legs look like and what your body
Speaker 1: looks like in order to recreate what you look like
Speaker 1: in virtual reality. For that feature you alluded to in FaceTime,
Speaker 1: there's also cameras and sensors inside the device to be
Speaker 1: able to read where your eyes are looking at. In addition,
Speaker 1: there's two four K displays, right you know the four
Speaker 1: KTV you have maybe in your living room. Well, there's
Speaker 1: two of them, many ones inside of the headset to
Speaker 1: perform virtual reality. The cameras also, in addition to being
Speaker 1: sensors to see what everything looks like, it's a way
Speaker 1: to create augmented reality. Right. Are usually uses clear lenses,
Speaker 1: but in this case it's going to use cameras to
Speaker 1: create sort of a fake of a r VR mixed
Speaker 1: reality reality effect. It's a pretty cool and practice, I'm told.
Speaker 1: The other interesting thing to your point is you're going
Speaker 1: to be able to replicate a lot of the features
Speaker 1: of an iPad on here, right, So you'll get Safari
Speaker 1: mail maps, calendar, health tracking, even there's also a feature
Speaker 1: where you can hook it up to your Mac and
Speaker 1: you sort of can control your Mac and then you
Speaker 1: can see what your Mac stream looks like in virtual
Speaker 1: reality while using your keyboard, mouse, and track pad. Mark
Speaker 1: very briefly, how much is this moving the needle for
Speaker 1: Apple valuation perspective from an analyst perspective to people ultimately
Speaker 1: think this is gonna be a game change for them.
Speaker 1: So in year one they want to sell about a
Speaker 1: million units at three thousand dollars, right, and I believe
Speaker 1: that's about three billion dollars. So in terms of overall
Speaker 1: revenue for Apple, it's not going to move the needle,
Speaker 1: uh in the short term, But long term this could
Speaker 1: be a multi hundred billion dollar market and Apple, given
Speaker 1: the layoffs at Meta and the hardware changes that Google
Speaker 1: and Amazon as well, they seem to have a clear
Speaker 1: runway not only VR but other hardware products in the future.
Speaker 1: Right Bloomberg s Mark German another day, another big scoop,
Speaker 1: As Carrow said, welcome back to Bloomberg Technology right here
Speaker 1: from San Francisco and Caroline High and I med lovel
Speaker 1: and it is a pleasure to have you back out West,
Speaker 1: back in the Bay Area. We've got to talk about
Speaker 1: social media, and we've got to talk about regulation. Has
Speaker 1: been a big theme in the show. For a number
Speaker 1: of days now. The federal government and several states have
Speaker 1: raised cybersecurity concerns as you know carry around Chinese own TikTok,
Speaker 1: and as we reported last week, dozens of U S
Speaker 1: schools and US universities had moved to ban the app
Speaker 1: from campuses, hoping to prevent it from spying on students,
Speaker 1: asserting the Chinese government could access the private information of
Speaker 1: its users. Let's bring in Mickey Bowland to talk about
Speaker 1: the potential risks associated with the Actually is global cybersecurity
Speaker 1: architect and security evangelist over at Checkpoint Software Technologies, which
Speaker 1: is a cybersecurity solutions provider. I mean you heard the backstory.
Speaker 1: Caroline and I have been trying to make sense of
Speaker 1: this for a number of days now. Campuses moved to
Speaker 1: remove the ability to access TikTok while on campus through
Speaker 1: the WiFi network. What we're hearing from the users is
Speaker 1: they don't understand the risk that is being warned about here.
Speaker 1: Is there a risk? Yes? Yes. Um. First, I want
Speaker 1: to say thank you so much for having me in checkpoint.
Speaker 1: We believe that everyone deserves the best cybersecurity. So I
Speaker 1: will say this for for end users that are unsuspecting
Speaker 1: or really don't understand the risk, Yes there is risk,
Speaker 1: and this is why we're seeing organizations come together, so agencies,
Speaker 1: enterprise UM like nonprofits for actually doing a joint responsibility
Speaker 1: for risk. Right, So we need to approach risk. Is
Speaker 1: that we have privacy and we have security. We have
Speaker 1: privacy for data, for protected data, for privacy and end
Speaker 1: user data endpoints, also for corporate assets. We also have
Speaker 1: to protect our network. So people are writing the networks
Speaker 1: to get to these applications, and our networks are vulnerable
Speaker 1: to attack by militia's actors and malicious spread of malware.
Speaker 1: Uh so, and then we have corporate assets and university
Speaker 1: assets in this case to protect. So it is a
Speaker 1: joint responsibility, and we do need to help students understand
Speaker 1: the risk and and really educate everyone. Mickey, going back
Speaker 1: to basics, the argument is that ultimately uh personnel in
Speaker 1: mainland China might be able to access the personal data
Speaker 1: of TikTok users in the United States. The proposed solution
Speaker 1: from TikTok is to house the data of US users
Speaker 1: on Oracle servers based here in the United States. Is
Speaker 1: that an acceptable mitigation of risk for industry professionals like yourself?
Speaker 1: I think I I hate to speculate about that, but
Speaker 1: I will tell you that our Checkpoint research we actually
Speaker 1: did extensive testing. We're super curious back in about was
Speaker 1: TikTok Um. Were they delivering consistent policy and security privacy
Speaker 1: and security rather And we did find several vulnerabilities. Our
Speaker 1: research team found cross site scripting for their ads um.
Speaker 1: We actually found a way to kind of circumvent um
Speaker 1: registration using a mobile device and use SMS, you know,
Speaker 1: spoofing or registration. Uh, there was API vulnerability. So I
Speaker 1: guess ultimately what I'm saying is we need to demand
Speaker 1: of organizations that are offering the social media applications and
Speaker 1: other applications, primarily for mobile devices, that they actually have
Speaker 1: a consistent security and privacy policy that we can actually address.
Speaker 1: Can compare TikTok to other viraly growing social media companies
Speaker 1: of old? How many vulnerabilities does it have visaving competitors?
Speaker 1: I really, I mean across the board. I'd refer to
Speaker 1: our research team for that. I think that they TikTok
Speaker 1: to their um to justice to TikTok, they actually did
Speaker 1: fix the vulnerabilities that Checkpoint Research team presented to them,
Speaker 1: and indeed we work together in one to help them
Speaker 1: fantast these vulnerabilities. I think that from uh, I guess
Speaker 1: just ultimately what we understand is from an attack surface,
Speaker 1: these applications are going viral. I think, TikTok, Now I
Speaker 1: just install it again to test this. Over a billion
Speaker 1: installs or downloads, there's a u S I read there's
Speaker 1: now currently over a hundred million active users and globally
Speaker 1: it's billions of people. Right, So I think that we
Speaker 1: have to uh think that these these um social media
Speaker 1: platforms are going to be like a huge tasty attack
Speaker 1: surface for malicious actors. Uh. We also have to take
Speaker 1: responsibility for our own personal data. When Mickey told to
Speaker 1: us about that, because you say you're a self proclaimed
Speaker 1: global cybersecurity warrior, be a warrior for us. If I
Speaker 1: can't leave it up to TikTok, what do I do
Speaker 1: to prospect myself? Thank you so much. I am a
Speaker 1: warrior and I wish everyone would be. And we were
Speaker 1: asking more people to join the way your vandreg and
Speaker 1: souff please do. But what you need to do. First
Speaker 1: of all, when you download anyone, I mean from anyone.
Speaker 1: If you go to the app store and you download
Speaker 1: social media applications, go read the details. What is their
Speaker 1: security policy and their privacy policy? What kind of data
Speaker 1: are they collecting on you? And then are you actively
Speaker 1: you know, looking at the permissions that you're granting to
Speaker 1: this application when you install it. If it's like click click,
Speaker 1: test you know, touch, touch, and I just gave access
Speaker 1: to my phone, my camera which you know you're doing
Speaker 1: videos on TikTok and other applications. Um, your camera, you're microphone,
Speaker 1: your you know location, all your contexts, I think your calendar.
Speaker 1: This is probably too much information to share. Then you
Speaker 1: also have the need to redefined bying print. What are
Speaker 1: they saying they're doing with analytics that are that are
Speaker 1: being collected from you? And then who do you trust? Right?
Speaker 1: Ultimately you have to have a trust in the application,
Speaker 1: any software key and be exploited. They're never going to
Speaker 1: be perfect. Mickey Boland, keep worrying and being a work
Speaker 1: checkpoint global cubersecurity architect. Great tous in time with you. Meanwhile,
Speaker 1: well let's head down to DC now because we're going
Speaker 1: to talk much more about regulation of social media the
Speaker 1: US Supreme Court in this instance, because actually ask the
Speaker 1: Biden administration for input on Florida on Texas laws that
Speaker 1: could sharply restrict the editorial discretion of social media platforms.
Speaker 1: Greenberg's Greg Store has the latest for us on basically
Speaker 1: censorship concerns on either side of the aisle. Greg, just
Speaker 1: talk us through what in fact the Intreeen Court wants
Speaker 1: to hear from the administration. Well, the Supreme Court wants
Speaker 1: to hear advice on should we take up these appeals.
Speaker 1: There are appeals from both sides. There are two cases,
Speaker 1: one involving Texas, one involving Florida, And basically these are
Speaker 1: laws where the conservative governors and the conservative lawmakers of
Speaker 1: those states are saying, we're worried that social media companies
Speaker 1: are discriminating against conservatives, silence and conservative voices. So we're
Speaker 1: gonna get in there and we're gonna oversee their content,
Speaker 1: their content management, uh, and uh say, you know, impose
Speaker 1: a lot of new requirements on them. And the social
Speaker 1: media companies are saying that's a violation of our First
Speaker 1: Amendment rights. Greg look at your reporting on the Bloomberg terminal.
Speaker 1: You know, you have this Texas set of laws and
Speaker 1: the Florida set of laws. The Texas set seemed to
Speaker 1: be the most sort of sweeping in terms of the
Speaker 1: actions they take against social media platforms. Tell us what
Speaker 1: they're based on. What do they quiet social media platforms
Speaker 1: to do? Sure, the biggest provision in the Texas law
Speaker 1: would say that you that social media companies can't discriminate
Speaker 1: on the basis of viewpoint. Now, there are a few
Speaker 1: exceptions to that, but basically the idea is, you can't
Speaker 1: take something down if it's coming from a conservative voice,
Speaker 1: if you wouldn't take something uh down coming from a
Speaker 1: liberal voice, And the social media companies say, hey, that
Speaker 1: that might make it impossible for us to stop bullying,
Speaker 1: to stop spam things like that. Uh. There are a
Speaker 1: number of other provisions involving disclosure and operational requirements as well,
Speaker 1: and the Florida law has a whole series of particular
Speaker 1: requirements that are in some cases the same, in some
Speaker 1: cases different. One of the ones that a federal appeals
Speaker 1: court struck down or at least blocked, said that social
Speaker 1: media companies have to provide a thorough rationale every time
Speaker 1: they make some sort of content management decision. And to
Speaker 1: that end, thus far these laws have been to put
Speaker 1: on ice. Shall we say, Greg, what's the next step?
Speaker 1: When do we hear ultimately from the Supreme Court? Yeah,
Speaker 1: they are on ice. Although a federal appeals court upheld
Speaker 1: the Texas laws, of the Supreme Court turns away that case,
Speaker 1: that law will go into effect. So right now we
Speaker 1: wait for the Biden administration and will probably take several
Speaker 1: months to say, you know what it thinks the Supreme
Speaker 1: Court should do, and then probably possibly at the end
Speaker 1: of the Court's term in June, but more likely I
Speaker 1: would say when they come back in October for the
Speaker 1: next term, the Court will tell us whether it's going
Speaker 1: to take up these cases. Because of the widespread impact
Speaker 1: because of the lower court divide over these issues, there's
Speaker 1: a pretty good chance the Court will take it up,
Speaker 1: and then then those will be huge cases for next term. Greg,
Speaker 1: still a lot of work cut out, it would seem.
Speaker 1: We thank you for your time, and we'll continue this
Speaker 1: really important conversation later this week. We're gonna be having
Speaker 1: none of them. The SEC Commissioner Brendon car all about
Speaker 1: of course, I focus on TikTok, I focus on social
Speaker 1: media hire in the United States. That's Thursday, well and
Speaker 1: coming up, how one startup managed to raise funds and
Speaker 1: secure a multi billion dollar valuation, spice and down rounds
Speaker 1: to spite a tough market for startups over the last year.
Speaker 1: This is Bloomberg. Welcome back to blom Meg Technology and
Speaker 1: we do so much in terms of public market coverage.
Speaker 1: But ed, you're so smart giving us up to speed
Speaker 1: in the world of VC venture capital startups. Get us
Speaker 1: up with what's happening this weekend? Yeah, I think talking tech,
Speaker 1: we need to focus on what's happening in that part
Speaker 1: of the world because there are so many headlines. Starting
Speaker 1: with Sequoias Regional arm in South and Southeast Asia. It's
Speaker 1: weighing up special audits of several of its investments in
Speaker 1: the region following allegations of financial irregularity some portfolio companies,
Speaker 1: including ze Lingo and go Mechanic. Over In Europe, Highland
Speaker 1: has raised a new one billion euro fund that aims
Speaker 1: to invest in private software and consumer internet companies in Europe.
Speaker 1: The firm going to focus on growth stage companies. Interesting
Speaker 1: that they've raised and closed that in this environment, and
Speaker 1: finally fintech to HR outfit. Deal says it's reached two
Speaker 1: million dollars in annual recurring revenue by the end of
Speaker 1: two but that was a jump of more than four
Speaker 1: from the end of the company also confirming its valuation
Speaker 1: has reached twelve billion US dollars. Carr. Fascinating that we're
Speaker 1: getting more focused on valuations where they're being held out
Speaker 1: after the funding from last year. Let's talk about it
Speaker 1: with the co founder, the CEO, Alex Boss. Alex is
Speaker 1: great to have you on from Deal and I was
Speaker 1: on the website everything you need to scale a global team.
Speaker 1: Just talk to us about the need for your services
Speaker 1: in an environment where unfortunately talking more about layoffs than scaling.
Speaker 1: How is your HR offering being well scaled in and
Speaker 1: of itself by other companies right now? Of course? Well,
Speaker 1: first of all, Caroline, thank you so much for having
Speaker 1: you today. Are very excited to be here. Um. You know,
Speaker 1: Deal started as a company that enables you to hire globinly,
Speaker 1: so let's say too more. Bloomberg wants to hire someone
Speaker 1: in South Korea and they don't have the structure to
Speaker 1: do that just yet. There we'll enable you to hire
Speaker 1: someone as an employee there and give them the best
Speaker 1: benefits in a day. As the company kind of grew,
Speaker 1: we realized that we could do so much more right.
Speaker 1: Expanding globally as a company is so key and right
Speaker 1: now with the latest readings, we basically become the full
Speaker 1: sta HR solution for you to really go global. I'm
Speaker 1: looking at the global companies cabin Klein, Nike, they're all
Speaker 1: US space, but we've also got private twenty one Shopify
Speaker 1: Canadian business. Where for you do you look to increase
Speaker 1: your own footprint and and econ economy the worldwide is
Speaker 1: slowing down right now? Yeah, I mean, you know, we've
Speaker 1: always been genuine agnostic when it comes to regions, right
Speaker 1: we want to have the best companies obviously, I think
Speaker 1: over fifty of our business comes from the United States,
Speaker 1: and then you know, we really have a global footprint
Speaker 1: and heads of countries in every country actually and really
Speaker 1: has a global business, you know, being European, myself and
Speaker 1: my co founder being Chinese, right, we really wanted to
Speaker 1: be able to cover most of the companies from the
Speaker 1: get go, and that's what we've been able to do
Speaker 1: so far. So to do you have us companies, but
Speaker 1: you have companies from all over the world and across
Speaker 1: all segments using them. Alex, I want to go back
Speaker 1: some of the numbers and the timeline of this. There
Speaker 1: are reports last May they were raising funds. You close
Speaker 1: that deal, I believe over the summer you've announced today
Speaker 1: evaluation of twelve billion dollars. That is completely at odds
Speaker 1: with what Caroline and I are hearing every day on
Speaker 1: this show, founders finding it hard to raise money down
Speaker 1: rounds being more common, the evaluations growing. Was it a
Speaker 1: difficult environment for you? I mean, you know for us
Speaker 1: we closed that around in June. Really they do was
Speaker 1: not to raise money for the capital, but you know,
Speaker 1: we get to to work with the team at Emerson,
Speaker 1: which is very impact driven, right, and that's what we
Speaker 1: wanted to do a deal. The mission of the companies
Speaker 1: to have hundreds of millions of people get to work
Speaker 1: for the best companies in the world. So it was
Speaker 1: less about the money, but more about the people. And
Speaker 1: that's why the valuation was a bit easier to get to.
Speaker 1: And we've been really focused on the business itself. You know,
Speaker 1: we announced that from September we actually started being being
Speaker 1: a bit depositive, so we have a lot of money
Speaker 1: in the bank, and really it was about getting to
Speaker 1: the right number for us and bringing the right people.
Speaker 1: That's interesting, So you're saying essentially that you know, from
Speaker 1: very recently you started to be profitable. The other financial
Speaker 1: that you disclosed is that your and your average revenue
Speaker 1: growth essentially jump from at the end of twenty one
Speaker 1: to the end of last year. Are you worried now
Speaker 1: that when you see layoffs freezing of expenditures in this environment,
Speaker 1: that you might see a delayed response from your customer
Speaker 1: base as well. Well, not exactly, because the way we
Speaker 1: think about it is there's kind of two trends that
Speaker 1: are happening. The first one is more and more companies
Speaker 1: are cutting custs on software and they want to consolidate
Speaker 1: their HR infrastructure, and we've this new product that we
Speaker 1: are on today will help them by being the HR
Speaker 1: infrastructure and the Falce life solution, not just global hiring,
Speaker 1: but really everything for them. The second part is, as
Speaker 1: a lot of businesses starting to grow global, they realize
Speaker 1: that a lot of their custom San Francisco right hiring
Speaker 1: in there's that five hundred K didn't make a lot
Speaker 1: of sense for their business and for their unit economics.
Speaker 1: So thinking about expending their footprint and hiring people in
Speaker 1: location where it's a bit more affordable is definitely your trend.
Speaker 1: We're seeing from most companies, and some of the largest
Speaker 1: one are coming to us to understand what is the
Speaker 1: best way to do So what is a globally focused
Speaker 1: business right now? Alex because many would say the economies
Speaker 1: are splitting in two and particularly as we see a
Speaker 1: more geopolitical tension, whether it's your versus Russia, whether it's
Speaker 1: China versus the US. You said your co founder is
Speaker 1: from China. How do you see companies wanting to scale
Speaker 1: their footprint at the moment. Are we being limited to
Speaker 1: certain spares? Not really. I think you know, she's American
Speaker 1: but originally was born in China. And you know, the
Speaker 1: way we look at the world, whether it's her or myself,
Speaker 1: is that it's it's less about the geos, It's more
Speaker 1: about the talent. Right. You just want as a company
Speaker 1: to be able to hire the best people wherever they
Speaker 1: are and bring them to your company. Right. So, I've
Speaker 1: not seen people think about regions apart when it comes
Speaker 1: from to time zone, right, And how you want to
Speaker 1: build a culture of the company, and how do you
Speaker 1: want to be very sus in office and not in office.
Speaker 1: But when it comes to those deos, we've seen maybe
Speaker 1: Rush I get less less less hires at the moment,
Speaker 1: but in general, most people have been very geoagnostic when
Speaker 1: it comes to town. Alex, what about your own company
Speaker 1: and its health? You know, Caroline and I are talking
Speaker 1: about tens of thousands of talented people in technology being
Speaker 1: laid off. Are you one of those companies that's currently hiring? Yeah,
Speaker 1: I mean for sure, we are two thousand people across
Speaker 1: a hundred plus locations. You know, we've always been as
Speaker 1: efficient as we could, and being a bit depositive now
Speaker 1: enabled us to really be able to scale further. So
Speaker 1: you know, we have over I think five D plus
Speaker 1: million dollars in the bank. We're generating money now, so
Speaker 1: we'll keep hiring to really bring the message transflution to
Speaker 1: market and really help companies go global. So if you
Speaker 1: know great people, send them send them away. Alright. Deal
Speaker 1: co founder and CEO Alex Bozis, thank you so much
Speaker 1: for sharing Evaluation news but also getting insight into what
Speaker 1: it's like to run a company right now. For me,
Speaker 1: that's the take. It's all well and good having the
Speaker 1: vcs on the public market, investors, the activists talking about
Speaker 1: what they want from a company. When you're at the
Speaker 1: helm trying to raise money, trying to make decisions. It's
Speaker 1: interesting to see somebody so confident and there's a lot
Speaker 1: of negativecy out there. Well, I mean a bootstrap business
Speaker 1: to begin with, a why combinator, well known Silicon Valley
Speaker 1: focused startup culture. I'm interested that he was talking already
Speaker 1: all the Lexican that investors, public investors and private investors
Speaker 1: want to hear. Ebitdre positive efficiencies, hiring across the world
Speaker 1: to ensure that they're basically making sure that they're efficient
Speaker 1: right now, that they're not over scaling, over hiring, over indulging,
Speaker 1: which is what so many of the big companies have
Speaker 1: been doing basically and having to rewind them to be fair.
Speaker 1: The other big theme that we've heard is that investors
Speaker 1: look for quality in times like these where okay, actually
Speaker 1: being profitable for many companies as a distant dream right
Speaker 1: now could be an attractive investment. But if you're scaling
Speaker 1: a revenue at four with the many years time so
Speaker 1: they're doing now with us both stood right here in
Speaker 1: San Francisco. Let's do something very local for going viral,
Speaker 1: because the Tesla fraud trial is underway right here in
Speaker 1: this city. And look Elon Musk continuing his testimony right
Speaker 1: on Monday, and he said, what the saludo ABIs sovereign
Speaker 1: well fund quote unequivocally wanted to give him the money,
Speaker 1: But there was no email about it. He just said
Speaker 1: it was their word was as good as that. But
Speaker 1: of course it's all in defenses and tweets here sent back.
Speaker 1: That's part one of the defense. The other thing, and
Speaker 1: it extends from Friday, is that Elon Musk kind of
Speaker 1: rejected the idea that his tweets influenced Tesla's share price,
Speaker 1: and actually he questioned how seriously anyone took his tweets.
Speaker 1: But having since bought Twitter, he talked about Twitter being
Speaker 1: a very trustworthy, reliable sort of news in journalism. Yeah, well,
Speaker 1: we did what we always do on this show. We
Speaker 1: asked our audience to react to the quote that he
Speaker 1: put about whether or not his tweets should be trust
Speaker 1: did He said, just because I tweet about something doesn't
Speaker 1: mean people believe it will act accordingly, do you agree
Speaker 1: negative say that's insane? Of course, they felt that he
Speaker 1: puts out tweets that people believe that act on. I mean,
Speaker 1: there has been criticism time and time again of the
Speaker 1: way in which he's perhaps talked up certain companies, certain
Speaker 1: crypto assets. Goodness knows what. But people move and they
Speaker 1: make asset allocation decisions of what he tweets. Yeah, and
Speaker 1: why he doesn't use a regulatory filing instead of the tweet?
Speaker 1: Tweet is his method of choice? Yeah, many politicians would agree.
Speaker 1: Was it a tweet that almost broke the internet today
Speaker 1: as well? Is then an m using not Eminem the rapper,
Speaker 1: Eminem's when you eat, look at this, we'll bring it
Speaker 1: up on the screen and just a moment, Eminem's is
Speaker 1: reconsidering It's spokes candies. You see the former spokes candies
Speaker 1: along the bottom there. They have a new spokesperson. Yeah,
Speaker 1: and apparently everyone can rally behind her. Is kind of
Speaker 1: what they say, Maya Rudolph, They say, we're confident Mss
Speaker 1: Rudolph will champion the power of fun to create a
Speaker 1: world where everyone feels they belong. Of course, many think
Speaker 1: this might be about the Super Bowl rather went out
Speaker 1: from the Super Bowl. Let's wait and see if this
Speaker 1: is real life. Eminem's are determined to break the Internet.
Speaker 1: We didn't break the Internet. We talked all about it.
Speaker 1: That that does it for this edition of Bloomberg Technology Tuesday.
Speaker 1: We've got so much more in terms of interactive advertising.
Speaker 1: Ber O c O David Cohen's going to be joining.
Speaker 1: Don't forget, you've got to recap everything on the podcast Spotify.
Speaker 1: This is Bloomberg