Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg business Week inside from the reporters and
Speaker 2: editors who bring you America's most trusted business magazine, plus
Speaker 2: global business finance and tech news. The Bloomberg Business Week
Speaker 2: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 1: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 1: Big focal point this week, I mean massive focal point.
Speaker 1: Let's be fair earnings from Nvidia, you know, the giant
Speaker 1: chip maker at the heart of the artificial intelligence revolution
Speaker 1: that has powered the bullmarket in stocks. More on that
Speaker 1: in just a moment.
Speaker 3: Man speaking of Nvidia, Jensen Wang, Satynadella of Microsoft, and
Speaker 3: Michael Dell. A lot of big names in the tech
Speaker 3: space this past week talking about AI and their plans
Speaker 3: and their partnerships. Our take on what is going on
Speaker 3: from the head of AI over at Qualcom, who weighed
Speaker 3: in on on device artificial intelligence, including so called aipcs.
Speaker 1: You're going to hear a lot about that in the
Speaker 1: coming months, that's for sure. Venture Capital crossed into a
Speaker 1: few topics for us this week as well, including a
Speaker 1: conversation with the author of the Venture mindset how to
Speaker 1: make smarter bets and achieve extraordinary growth.
Speaker 3: And speaking of VC bets, joe Ane corkran over at
Speaker 3: Golden Seeds joins us on investing in early stage women
Speaker 3: led businesses, and then the Business Week cover story It's
Speaker 3: about twenty three and meters once the recipient of millions
Speaker 3: of dollars from vcs and investors facing a big problem today.
Speaker 1: All of that to come. We begin with Nvidia, which
Speaker 1: gave another bullish forecast, shattering estimates showing that spending on
Speaker 1: AI computing remained strong and reinforcing its stats as the
Speaker 1: biggest beneficiary of AI spending.
Speaker 3: The company's so called AI accelerators, These are chips that
Speaker 3: help data centers develop chatbots and other cutting edge tools
Speaker 3: have become a hot commodity. For more on the quarter
Speaker 3: and the business, we caught up with the Bloomberg News
Speaker 3: at US semiconductor reporter Ian King.
Speaker 4: Were looking for doubling year of a year in this
Speaker 4: current quarter. In video, said yeah, we can do that,
Speaker 4: and we can do a bit more. So, even though
Speaker 4: there were lofty expectations, they managed to set expectations even higher.
Speaker 4: The data center business is already bigger than Intel an AMD,
Speaker 4: and it's getting bigger quicker than people had projected more
Speaker 4: than four hundred percent a year on year increase in
Speaker 4: that particular business. So all of the fundamental numbers that
Speaker 4: in Nvidia need to show we're heading in the right direction.
Speaker 4: It was able to deliver on.
Speaker 3: I was a little struck, and Carol mentioned this by
Speaker 3: a couple of the things that they also announced the
Speaker 3: ten to one stock split coming next month, and then
Speaker 3: increasing the dividend. Curious if you have any thoughts on
Speaker 3: either of those things.
Speaker 4: Well, I mean, you know, as you were just discussing
Speaker 4: with Bailey, I believe that the stock split is something
Speaker 4: that's aimed at retail investors, but it's also aimed at
Speaker 4: their internal audience as well. A certain percentage of the
Speaker 4: shares get bought by individuals. You know, they get like
Speaker 4: a discount slash, you know, allowance that they can buy
Speaker 4: at a certain point. So you know they want to
Speaker 4: to keep their employees happily, right. You need those engineers,
Speaker 4: you need those that staff that's that's you know, so
Speaker 4: invested in what you're doing, So that might be part
Speaker 4: of it as well.
Speaker 1: Can I ask you though, because I did scratch my
Speaker 1: head a little bit about it.
Speaker 5: I don't know.
Speaker 1: I was going back and forth with a brother of
Speaker 1: mine who has been in an Nvidia for years, and
Speaker 1: we're going back and.
Speaker 3: Got to get it. Your brother on the show.
Speaker 1: Yea, yeah, he's pretty smart, just really well read. But
Speaker 1: about the dividend, because I always feel like companies do
Speaker 1: that when maybe growth is slowing or something to kind
Speaker 1: of keep investors happy. Is there something, though, connected with
Speaker 1: that stock split that they raise the dividends so much?
Speaker 4: I mean, for some of you conductor companies, which are
Speaker 4: massively capital intensive, even when they don't own their own manufacturing,
Speaker 4: that the question is how much are they spending as
Speaker 4: a percentage of their revenue on R and D, on design,
Speaker 4: on making sure that the next product's coming along? And
Speaker 4: you look, you know, Nvidia is one of the highest,
Speaker 4: one of the biggest spenders by any measure in the
Speaker 4: chip industry. So as long as I'm doing that, I
Speaker 4: would say that most in video watchers don't care. It's
Speaker 4: just something nice to have. On the other side of things.
Speaker 1: Well, you talk about the R and D spend and
Speaker 1: it really, you know, certainly seems to be paying off
Speaker 1: for Nvidia. Having said that, talk to us about the
Speaker 1: development cycle, and I bring it up because I was
Speaker 1: listening to Bloomberg Intelligence man Deep seeing about how for
Speaker 1: Nvidia it's kind of a shorter time like almost every year,
Speaker 1: and that that is going to require companies who want
Speaker 1: to have the latest and greatest from Nvidia and in
Speaker 1: the AI chip world, that they're going to be adjusting
Speaker 1: their CAPEX spend to include that every year. So maybe
Speaker 1: you know, different from Moore's law. Right.
Speaker 4: Basically what Jensen lang to CEO said, he said, Look,
Speaker 4: we were bringing new product market for this market roughly
Speaker 4: sort of every eighteen months or so. Now we're going
Speaker 4: to do.
Speaker 2: It every year.
Speaker 4: We're going to do it every year for a number
Speaker 4: of he you know, put that the salesman routine. Look,
Speaker 4: we're helping our customers. This market is changing rapidly, so
Speaker 4: we need to bring soft and market much much quicker
Speaker 4: than we were doing to help support this, to help
Speaker 4: bring these new capabilities, everybody wins everything, you know, the
Speaker 4: pace of innovation increases. Flip side of that is, you
Speaker 4: remember earlier this year we were talking about what AMD's doing,
Speaker 4: what Intel's doing, you know, how are they going to
Speaker 4: get into the market and what Jensen Wang has basically
Speaker 4: said to them, is like that moving train that you
Speaker 4: are trying to catch is going even faster.
Speaker 2: Good look.
Speaker 4: So that's what's really going on on a competitive basis
Speaker 4: there as well.
Speaker 1: And Moore's law I meant doubling every two years, so
Speaker 1: forgive me, yeah, much faster here.
Speaker 3: Ian Ian, I want to to that end of this
Speaker 3: of jumping on that train. I want to talk a
Speaker 3: little bit about margins, because the company said that margins
Speaker 3: for the gross margins will be seventy five point seven
Speaker 3: five percent in the current quarter. As you noted, this
Speaker 3: is more like a software company rather than a chip
Speaker 3: comp And you yesterday talked about Intel being in the
Speaker 3: low sixties at its height when it really owned the
Speaker 3: server market. What can history tell us about the duration
Speaker 3: and durability of margins like this for a chip company.
Speaker 4: Yeah, I mean, right now, their margins are what they
Speaker 4: want them to be because it's just really a case of, well,
Speaker 4: our prices a sky high were sold out. We can
Speaker 4: essentially charge what we want, so obviously the pricing is
Speaker 4: very good for margins. On the flip side of that,
Speaker 4: as we just discussed, they can spend what they want.
Speaker 4: It's you know, how much do we want to spend
Speaker 4: on R and D, how well do we want to
Speaker 4: reward our employees. So the margins are sky high, but
Speaker 4: they could make them artificially higher. The fact that they're
Speaker 4: spending heavily, the fact that they're able to charge a lot,
Speaker 4: that's something that's going to probably persist. So they're setting
Speaker 4: very high targets, but they could be even higher. So,
Speaker 4: you know, as a measure of their health, it's pretty good.
Speaker 6: Stay.
Speaker 3: Do you agree with Jensen's comment that the freight train
Speaker 3: is moving faster and these companies will have a more
Speaker 3: difficult time, The AMDs and the like will have a
Speaker 3: more difficult time catching up with Nvidia.
Speaker 4: I mean Jensen's racing. I mean this one of the
Speaker 4: things that comes across in pretty much any time he
Speaker 4: says something, he's constantly aware of the tension that exists
Speaker 4: in his business and his market, and he's consciously trying
Speaker 4: to shape post what his company does, and his understanding
Speaker 4: of the relationships where we are in the cycle, where
Speaker 4: we are relative to the competition, what the customers want.
Speaker 4: He's trying to shape his narrative to fit that. He's
Speaker 4: very clever, and he's showing people that he understands what's
Speaker 4: going on and what he has to do to stay ahead,
Speaker 4: and that kind of institutional paranoia, that history of being
Speaker 4: the little guy still very much present in what he's doing.
Speaker 1: Unbelievable and just a fascinating story. Ian. Thank you. I
Speaker 1: know it's been a busy twenty four hours for you,
Speaker 1: so we really appreciate it. Ian King are US Semiconductor
Speaker 1: and Networking reporter at Bloomberg News, joining us from our
Speaker 1: San Francisco bureau, as we mentioned, and Vida shares continuing
Speaker 1: to trade higher, still up about ten percent in today's session,
Speaker 1: and again you're now looking at a two point five
Speaker 1: almost two point six trillion dollar market cap company, so
Speaker 1: it is in the league of some of the largest
Speaker 1: market cap companies in the world.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm. Easter Listen
Speaker 2: on Applecarplay and ed Brout Auto with a Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 1: This past week, the CEOs of Dell's Service nown and
Speaker 1: Video all at the Dell Technology World event in Las Vegas,
Speaker 1: talking about working together and on premise AI That conversation,
Speaker 1: by the way, can be found on the Bloomberg and
Speaker 1: at Bloomberg dot com. Dell unveiled a new line of
Speaker 1: personal computers optimized for AI tasks, with Michael Dell saying
Speaker 1: AIPCS will be quote pretty standard. In twenty twenty five.
Speaker 3: Meantime, Microsoft introduced a version of its Copilot assistant to
Speaker 3: help teams collaborate, extending a company wide push to infuse
Speaker 3: products with AI. Microsoft presenting new computers with the new
Speaker 3: AI focused features, powered by chips from Qualcomm, a maker
Speaker 3: of smartphone components that's been trying to grab a foothold
Speaker 3: in laptops for years.
Speaker 1: A lot going on, folks, as you can tell well,
Speaker 1: so we felt pretty lucky when earlier this month we
Speaker 1: got our own take on all of this with Durga Malatti,
Speaker 1: head of AI over Qualcom.
Speaker 7: There's a lot of things that are going on in
Speaker 7: the space of AI as it runs on devices that
Speaker 7: you and I usually use, whether it's handsets or phones,
Speaker 7: whether it is tablets or PCs and so on. So
Speaker 7: let me spend a little bit of time in terms
Speaker 7: of explaining what's really going on out there. So in
Speaker 7: the last two years or so ever, since generative AI
Speaker 7: started making waves in terms of its capabilities, pretty spectacular capabilities,
Speaker 7: and in terms of the kinds of use cases that
Speaker 7: it can unleash. As Falcom, we've been focused on trying
Speaker 7: to bring that technology into devices that you and I
Speaker 7: can use. You know, usually one of the questions that
Speaker 7: comes in is why why do you want to run
Speaker 7: this on a device? Why can't you just run it
Speaker 7: on the cloud? I mean, we do use the cloud
Speaker 7: for so many different things, and what's wrong actually, So
Speaker 7: it's kind of important to understand what are the benefits
Speaker 7: that you actually have when you run these amazing generative
Speaker 7: AI models directly on devices. The very first one is
Speaker 7: related to privacy and security. A lot of the times
Speaker 7: when you actually go through generative AI use cases, you
Speaker 7: might be wondering, maybe it's just a chat pot. Maybe
Speaker 7: I ask a question, I get a response, But it
Speaker 7: doesn't have to be just a chat pot. It could be.
Speaker 7: These days, we use a lot more of both voice
Speaker 7: based interaction with devices in addition to using camera and
Speaker 7: something else to bring in additional context to the question
Speaker 7: that you're asking. For example, you could be holding up
Speaker 7: your phone and pointing in a certain direction and saying
Speaker 7: what am I looking at and that information you want
Speaker 7: to actually do process it locally. You might not be
Speaker 7: fully comfortable actually dealing with all of this in the cloud.
Speaker 3: I totally get it why this makes sense to have
Speaker 3: on device, whether that's a smartphone or a PC. We'll
Speaker 3: talk about PCs in just a minute. You said you've
Speaker 3: been working on this a Qualcomm. Why hasn't it happened yet?
Speaker 7: So, actually, if you take a look at it, at
Speaker 7: least on the smartphone segment, if you take a look
Speaker 7: at some of the premium tier smartphones, whether it's a
Speaker 7: Samsung Galaxy S twenty four or a pixel device or
Speaker 7: something that we are seeing in China with Shaomi and
Speaker 7: Honor and some of the other devices, all these devices
Speaker 7: now are capable of based upon keeping aside the pixel part,
Speaker 7: but everything else based upon Snapdragon platforms from Pollcom, running
Speaker 7: very large language models directly on the device, up to
Speaker 7: seven billion parameters, and these devices are now capable of
Speaker 7: a lot more things than you're used to. I do
Speaker 7: admit that the use cases are still gradually waking up
Speaker 7: to what are the capabilities in the smartphones, because that
Speaker 7: is something that takes a little bit of time. But
Speaker 7: if you've kind of taken a look at some of
Speaker 7: the live translate features or AI based voice assistance, the
Speaker 7: capability to run very large models directly on device starts today.
Speaker 7: It's already exists today in smartphones, and the use cases
Speaker 7: are gradually coming up, and we're doing our part on
Speaker 7: the use cases as well as I kind of go
Speaker 7: through the rest of the discussion.
Speaker 1: You guys have you know, you've been talking about phones specifically,
Speaker 1: but I'm assuming that you're thinking also PCs as well,
Speaker 1: And I'm just curious if that's the case, and you know,
Speaker 1: you guys have been trying for years to get into
Speaker 1: the PC market, Why though, hasn't it happened so far,
Speaker 1: and why maybe is it different this time around? If
Speaker 1: that's also on your radar in your mission.
Speaker 7: Absolutely right, there is a massive disruption that's coming to
Speaker 7: this specific segment in the context of aipcs. Now, the
Speaker 7: definition of AIPC is it is a PC in which
Speaker 7: not only do you have like the equivalent of everyone
Speaker 7: has heard about copilots, in which you are constantly using
Speaker 7: something else that is running with which you interact with
Speaker 7: quite frequently and use it for productivity, whether it's in
Speaker 7: creation of documents, edition of the editing documents are taking
Speaker 7: one kind of a document and translating into another, and
Speaker 7: so on and so forth. This is what we would
Speaker 7: call as like a on demand AIK so a little
Speaker 7: bit like a chladbot. You ask a question, you get
Speaker 7: an answer. It is more, it is more to it.
Speaker 3: Well, okay, so if there's more to this and we
Speaker 3: can why do we need an AI PC to do this?
Speaker 3: Why can't we just do this on the powerful machines
Speaker 3: that we already have. Why do they need to be
Speaker 3: AI specific?
Speaker 7: So one thing that I mean these productivity tools are
Speaker 7: they make it significantly more simpler to actually not just
Speaker 7: interact with your device, but actually make it a lot
Speaker 7: a lot of the things that you end up doing
Speaker 7: tend to be far more richer in terms of the
Speaker 7: capabilities in itself. Let me give an example of that,
Speaker 7: by the way, imagine that you're actually on a chat
Speaker 7: session with your colleague and you're actually talking about a
Speaker 7: specific meeting that you just had, and the next thing
Speaker 7: you know, something pops up saying okay, you already share
Speaker 7: the meeting notes with the person and you just lick
Speaker 7: use and that it immediately goes in. Just think through
Speaker 7: exactly all the things that happened in that whole process.
Speaker 7: First of all, this is now the equivalent of what
Speaker 7: we have been calling as pervasive AI AI, which is
Speaker 7: constantly running inside your PC. It's actually kind of trying
Speaker 7: to encapsulate you as the end user and the PC
Speaker 7: into like one single state, and you're constantly predicting, You're
Speaker 7: thinking on itslf. You know, the PC is actually kind
Speaker 7: of almost thinking and anticipating the next move from the
Speaker 7: user and then being very proactively help in that whole process.
Speaker 1: So we've all got a couple of minutes though, So
Speaker 1: is that why we need an AI PC?
Speaker 7: Specifically combination the two of the productivity tools plus this
Speaker 7: along with a few other things associated with UH you know,
Speaker 7: as a as a as a code generator, or as
Speaker 7: a content creator. It is something that's constantly running in
Speaker 7: the background. Now, keep in mind that we use our
Speaker 7: PCs regardless of whether we are connected somewhere to the
Speaker 7: cloud or not. I mean, the simplest example is you
Speaker 7: might be on like a long flight and you want
Speaker 7: to actually get some work done during the flight, but
Speaker 7: all you have is just you and the laptop at
Speaker 7: that point in time regardless of what the connectivity is,
Speaker 7: and you still want to have the same kind of productivity.
Speaker 7: So it does actually really start growing on you. Quite
Speaker 7: a few of us insight Qualcom have been dog footing
Speaker 7: exactly that experience with our own internal reference designs on
Speaker 7: these aipcs, and trust me, it does change the user.
Speaker 1: Exped So what does an AIPC do for the consumer?
Speaker 1: What do they get out of this? The regular consumer?
Speaker 7: A regular consumer? I mean, if you categorize between we
Speaker 7: talked about productivity tools, let's talk about content creation. Content
Speaker 7: creation is also kind of a productivity in its own way,
Speaker 7: So that part is actually quite clear. But if you
Speaker 7: start thinking about all the other things, even when it
Speaker 7: comes to the social interactions and emails and documents, it's
Speaker 7: on a regular user at the end of the day,
Speaker 7: goes through a mix and match of these different kinds
Speaker 7: of use cases, and we believe that it's actually a
Speaker 7: pretty big differentiator between the before and after. Now, is
Speaker 7: it like a big bang moment that happens. That is
Speaker 7: something that remains to be seen. But we are on
Speaker 7: the cusp of all these launchers that are coming up
Speaker 7: over the next few weeks and let's see how that
Speaker 7: plays out.
Speaker 3: Do you want me to be replaced Carol by an
Speaker 3: AI PC? Is that where you're hinting at?
Speaker 1: Come on, No, not gonna happen.
Speaker 3: No, no, not gonna happen this year. Avatar Avatar to
Speaker 3: prepare for the show, and then the real life Carol
Speaker 3: and Tim get to do that.
Speaker 1: Avatar is can to all the work and h and
Speaker 1: then we just step in. Yeah, I'm down with that, tiger.
Speaker 1: Thank you so much. Really appreciate getting some time with you. Malati.
Speaker 1: He's head of AI over at Qualkam, joining us from
Speaker 1: San Diego.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Listen live
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Speaker 1: As we mentioned, this past week, we heard from the
Speaker 1: CEOs of some very well known companies you know, Microsoft, Dell,
Speaker 1: and Vidia to name a few. And yes they are
Speaker 1: household names today, but they weren't when they got their
Speaker 1: start many years ago, when they asked for the help
Speaker 1: of venture capitalists and their venture money.
Speaker 3: So what was it that made a venture capitalist or
Speaker 3: a group of them, or a VC firm decide to
Speaker 3: invest and make a financial bet on them over others?
Speaker 3: What were they thinking? And how can their thinking help
Speaker 3: you even if you don't work in venture capital.
Speaker 1: Which brought us to Iliustrebulaev. He's Professor of Private Equity
Speaker 1: and Finance at Stanford University's Graduate School of Business and
Speaker 1: founder and director of the Venture Capital Initiative. His new book,
Speaker 1: The Venture Mindset, How to make Smarter bets and Achieve
Speaker 1: Extraordinary Growth.
Speaker 8: The first principle to follow is why home runs matter
Speaker 8: and strikeouts don't. Because you talked about success, which is
Speaker 8: home runs for vcs, and failure which is about strikeouts.
Speaker 8: And the venture mindset is could be described as the
Speaker 8: new mental mindset that you should follow in the innovation
Speaker 8: driven world where you face a lot of uncertainty, a
Speaker 8: lot of unpredictability, and vcs had been facing this hostile
Speaker 8: environment for more than fifty years. Do you know that
Speaker 8: if you look at all the companies that became public
Speaker 8: in the United States in the last fifty years, every
Speaker 8: second one of them was ventchebaced do you know that
Speaker 8: six or seven or eight companies out of top ten
Speaker 8: by market cap today were venture backed when there were
Speaker 8: small companies and moreover, as my research shows, are stempered,
Speaker 8: there's causality, which means that had there been no bench
Speaker 8: capital industry, likely there would have been no many many
Speaker 8: of those companies that changed our lives, such as Apple, Netflix,
Speaker 8: bb Microsoft and Nvidia and so on.
Speaker 1: Well, what do you make though of the venture mindset
Speaker 1: back in the nineteen ninety nine two thousand era when
Speaker 1: it seems like money was just thrown at anything with
Speaker 1: a dot com after it.
Speaker 8: That is a great question. First of all, what we
Speaker 8: the Skatna book is for more fomo, which is fear
Speaker 8: of missing out. But what is really interesting is that
Speaker 8: smart vices are trying to avoid for more as much
Speaker 8: as possible. And one way to avoid it is what
Speaker 8: a friend of mine, Alex drampeldfrom andrsent FORRVIS calls it
Speaker 8: conviction must beat consensus, which means that if everybody is
Speaker 8: trying to invest in something, maybe that is time to
Speaker 8: invest in something else. So if we look in the
Speaker 8: late nineteen nineties, or indeed, if we look at a crypto,
Speaker 8: or if we look at some other bubbles in the
Speaker 8: last ten to fifteen years, many of them were driven,
Speaker 8: in fact by investors that were not following the Benure
Speaker 8: minds at principles. In fact, in the nineteen nineties there
Speaker 8: were also a lot of amazing companies born and a
Speaker 8: lot of investors made great investment decisions.
Speaker 3: I'm wondering about the idea of saying no more often
Speaker 3: than you say yes.
Speaker 8: So, first of all, this is the principle called say
Speaker 8: no one hundred times. When we think about how bench
Speaker 8: cabins make decisions. For each investment they make, they say
Speaker 8: no more than one hundred times. Okay, Now, if you
Speaker 8: think about this, if you spend a lot of time
Speaker 8: trying to decide how to make this nose, how to
Speaker 8: say this nos in fact, you will have no time
Speaker 8: to presider with a good due diligence. So what bench
Speaker 8: cabins do to make it more efficient. But I've discovered
Speaker 8: is that they use two different decision making modes at
Speaker 8: the beginning and at the end of their journey with
Speaker 8: each deal. At the beginning or at the top of
Speaker 8: their deal funnel, they use what I call the fast
Speaker 8: lane approach, and at the bottom they use the slow
Speaker 8: lane approach, and I think all of us can benefit
Speaker 8: from this. So what is a fast lane approach? You
Speaker 8: are approaching the potential investment opportunity or indeed any potential
Speaker 8: decision by asking why should I not proceed with even
Speaker 8: thinking about this investment decision? So this not is critical.
Speaker 8: If you're ask instead why should I do it? Then
Speaker 8: you will go down a completely different path. They're asking
Speaker 8: themselves a question why we should not do it and
Speaker 8: then try to identify a red flag. So the use
Speaker 8: red flags and red flax could be different for different
Speaker 8: types of investments. But once they heat a red flag,
Speaker 8: they will stop thinking about investing in this opportunity and
Speaker 8: we'll move on. Here's a quick example for you. Let
Speaker 8: me take back you to two thousand and seven when
Speaker 8: the first iPhone was released and file sharing was in
Speaker 8: the air, but was not yet possible because there's no
Speaker 8: Wi Fi, there were no smartphones. One investor of Sequa
Speaker 8: Capital at the time, his name was Sambur Gundhi, was
Speaker 8: very interested in this and with his partners, he tried
Speaker 8: to prepare his mind. He tried to meet with a
Speaker 8: lot of startups. He I think met with like more
Speaker 8: than fifty teams that were developing file sharing, and he
Speaker 8: decided not to invest in any He said no to
Speaker 8: every single one of them. Why because they hit his
Speaker 8: rad lack. What is his red lack, Well, it turns
Speaker 8: out to be his red lack was I wanted to meet.
Speaker 8: He told me a team from whom I could learn
Speaker 8: how to do it. You know, nobody was doing this,
Speaker 8: but I spent all the time trying to identify what
Speaker 8: that was. And I was meeting with those teams, and
Speaker 8: then I was not learning anything. And then he met
Speaker 8: with two guys who didn't have any money. I actually
Speaker 8: think they didn't have the money to flight was the country.
Speaker 8: They took a great coount, so they didn't have a prototype.
Speaker 8: And then they met with the Sequoia partners. I think
Speaker 8: in about half an hour there was a decision to
Speaker 8: proceed with the investment. Why because even though those two
Speaker 8: guys do not know it, did not could not do anything.
Speaker 8: They in fact thought through all cranes and looks about
Speaker 8: how they're going to implement everything, how they're going to
Speaker 8: execute everything, and so to go ended up investing in
Speaker 8: what turned out to be drum Box. But that is
Speaker 8: the power of saying no one hundred times. Otherwise you
Speaker 8: would not end up in drum box. It would end
Speaker 8: up with with another failure, another strikeout.
Speaker 1: It's like when I shot go on no no, no, no, no, no, no,
Speaker 1: okay do it. No, I'm having fun with you. But
Speaker 1: I do wonder if you have some thoughts though on
Speaker 1: artificial intelligence and how it might help a venture capitalists
Speaker 1: go through deals. I think you know, last year we
Speaker 1: were having conversations about how that it could help a
Speaker 1: VC investor who might not look at some smaller deals
Speaker 1: because it just wasn't worth their time. But if you
Speaker 1: use some kind of AI screening, who can kind of
Speaker 1: go through some of it, It might bring some deals
Speaker 1: that they might have said no on before, might bring
Speaker 1: it to their attention. But any smart kind of thought
Speaker 1: about that in terms of how that might help venture
Speaker 1: capitalists still kind of stick to their red flags and
Speaker 1: their mindset, but also provide maybe some new opportunities.
Speaker 8: AI is going to be very helpful for vcs. And
Speaker 8: the reason behind this is because one of the principles
Speaker 8: of the venture mindset is getting outside for boss, which
Speaker 8: means that you are trying to diversify where your sources
Speaker 8: come from For example, a friend of mine who is
Speaker 8: a venture capitalist in San Francisco. His name is Paul Arnold.
Speaker 8: He is the founder of a switch VBC. So he
Speaker 8: and his team develop an algorithm. They go through LinkedIn
Speaker 8: and other websites every single day, and the moment there
Speaker 8: is a founder who is looking on some kind of
Speaker 8: stealth startup or studying anything new, that founder will go
Speaker 8: into the algorithm, and then the algorithm churns, and some
Speaker 8: of the founders going to some critic will kind of
Speaker 8: bubble up, so that sometimes Paul will identify founders far
Speaker 8: away from Silicon Valley, faraway from California, that I'm working
Speaker 8: on something interesting but that is getting more sources. H
Speaker 8: So then to identify which of those sources are going
Speaker 8: to be good, you have to go back to the
Speaker 8: venture minds principles of saying no one hundred times. So
Speaker 8: I think AI is mostly working at the beginning of
Speaker 8: the funnel or expanding the funnel, not at the final
Speaker 8: process of the funnel. So here the venture capitalists still
Speaker 8: make the decisions themselves.
Speaker 1: Elliot, you know you talk about red flags by venture capitalists,
Speaker 1: and I do wonder about here we are once again
Speaker 1: talking about black entrepreneurs, women entrepreneurs still struggling to kind
Speaker 1: of get seen and get that VC money. It just
Speaker 1: doesn't flow like it does to white men. It's just
Speaker 1: you know, you know the numbers, you know the data.
Speaker 1: I don't need to explain it to you. So is
Speaker 1: it because for a venture capitalist that comes up as
Speaker 1: a red flag? What is that about?
Speaker 8: That is a great question, and I think that is
Speaker 8: a very important problem these days. First of all, let
Speaker 8: me go back and tell you about one of my
Speaker 8: research studies. What we did is we created with a
Speaker 8: miphd student, fifty fake startups. We had a lot of
Speaker 8: fun creating those stubs with fake website, fake profiles and
Speaker 8: so on. And then we created two hundred fake founders.
Speaker 8: Why two hundred because each startup had four fake founders
Speaker 8: either it had a white man founder, a white woman,
Speaker 8: an Asian man, or an Asian woman. And then we
Speaker 8: sent we created blurbs, decks and whatnot, and we sent
Speaker 8: the emails from this fake founders about these fake startups
Speaker 8: to actual venture capitalists also to actual active angel investors.
Speaker 8: We sent in total about eighty thousand emails, and we
Speaker 8: checked the responses and when I said the response, what
Speaker 8: we say is a positive response. For example, can we
Speaker 8: meet on zoom for a chat, can you send us
Speaker 8: the pitch deck, can you go and meet my partner
Speaker 8: who is interested in this deal, and so on. First
Speaker 8: of all, what we really found interesting is that the
Speaker 8: response rate was very high. You know, when I started
Speaker 8: this project, every single BC whom I talked to told
Speaker 8: me not to do it because they don't respond to
Speaker 8: call calls. We got between eight percent and fifteen percent,
Speaker 8: like every twelfth to every six and angel investor responded.
Speaker 8: In fact, most successful vices were more likely to respond.
Speaker 8: And we also found out that venture capitalists and most
Speaker 8: successful ones tend to respond more to female entrepreneurs and
Speaker 8: to Asian entrepreneurs as well. So the conclusion here is
Speaker 8: is that it is not at the beginning of the
Speaker 8: process where the problem lies. Its typically lies towards the
Speaker 8: end of the process. And here's something that is very
Speaker 8: important and just.
Speaker 1: Got about thirty maybe left, yeah, forgive me go ahead.
Speaker 8: Many BC films make decisions by consensus. You know what
Speaker 8: consensus is. It's like six people together in the same
Speaker 8: room have to make decisions. And I think this is
Speaker 8: where the problem lies. As my research shows. So to
Speaker 8: resolve this problem, to diversify the founders, we need to
Speaker 8: change how we make decisions in groups. And again, this
Speaker 8: is the part of the Venture Mindset principles, agree to disagree.
Speaker 3: Interesting, really interesting.
Speaker 1: Oh my gosh, what a great way to wrap up.
Speaker 1: Really enjoy this conversation. Thank you so much for stopping
Speaker 1: by and spending some time with us. That is, of course,
Speaker 1: Professor Ilias trebulaev his new books, The Venture Mindset, How
Speaker 1: to Make Smarter Bets and Achieve Extraordinary Growth. He's Professor
Speaker 1: of Private Equity and Finance at Stanford University's Graduate School
Speaker 1: of Business and the founder and director of the Venture
Speaker 1: Capital Initiative. We didn't really get into private equity, which
Speaker 1: would be a whole other It's got to come back, conversation.
Speaker 3: Got to come back and visit us.
Speaker 1: Bettius thoughts on private credit too.
Speaker 3: I bet he does, all.
Speaker 1: Right, maybe when it comes out softcover.
Speaker 3: Okay, well we'll go to California and do something on it.
Speaker 1: We've done.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple card Play and then Bright Auto with a
Speaker 2: Bloomberg Business app or watch us live on YouTube.
Speaker 1: Last year, in the US, startups founded exclusively by women
Speaker 1: accounted for only two percent of all funding that was
Speaker 1: invested in VC backed startups. This is according to the
Speaker 1: World Economic Forum. In Europe, the numbers even worse, only
Speaker 1: one point eight percent of the capital raised. What to
Speaker 1: female founded startups?
Speaker 3: As we heard in our last segment, the most successful
Speaker 3: venture capitalists tend to respond more to women entrepreneurs, which
Speaker 3: raises the question why hasn't that led to significant gains
Speaker 3: in funding for women led startups?
Speaker 1: Yeah? Why hasn't it?
Speaker 2: All?
Speaker 5: Right?
Speaker 1: Well, that is the world of Joe Anne Corcoran, co
Speaker 1: chief executive officer and managing partner at Golden Sea's, a
Speaker 1: network of angel investors that exclusively invests in early stage
Speaker 1: women led companies.
Speaker 6: Some good things have happened for women in the angel markets. Okay,
Speaker 6: I mean the last twenty years since Golden Seeds started
Speaker 6: has been phenomenally good for women in the angel markets.
Speaker 6: You know, twenty years ago women got three percent of
Speaker 6: the capital. Now women founders and co founders get about
Speaker 6: forty percent of the angel capital. And the most important
Speaker 6: thing is that the yield the percentage of companies that
Speaker 6: seek funding that actually get it is it's just about
Speaker 6: comparable for male and female entrepreneurs in the angel market.
Speaker 6: So that's really great progress in the angel markets. And
Speaker 6: you know why did that happen? I think a lot
Speaker 6: of the reason for that is that angels in the US,
Speaker 6: you know, individuals who invest in startup companies, about forty
Speaker 6: percent of those people are now women. And that's about
Speaker 6: I don't know, more than ten times since when we
Speaker 6: started in two thousand and four. So that's really great.
Speaker 3: I would imagine somebody listening right now might have the
Speaker 3: question from a returns perspective, if you're trying to maximize returns,
Speaker 3: why would you restrict yourself in any way by the
Speaker 3: types of companies you can invest in.
Speaker 6: There's equity issues are one thing, but there is research
Speaker 6: that say that women are better stewards of capital. I mean,
Speaker 6: there was a big study put together in twenty and
Speaker 6: twenty and nineteen by Boston Consulting and Mass Challenge that
Speaker 6: said that that's a huge data set. It said that
Speaker 6: women entrepreneurs generate two times the revenue per dollar of
Speaker 6: capital invested. So there is research. Let's say that you
Speaker 6: want to look at diverse founders.
Speaker 1: One thing I do think about when it comes to
Speaker 1: angel investing, right, you know, you can throw a little
Speaker 1: bit of money at a business, right, and it really
Speaker 1: can kind of get going, especially in this environment where
Speaker 1: technology and you know, social and so on and so forth,
Speaker 1: there's so much a part of sometimes a business getting going.
Speaker 1: Having said that, how many of the angel investments that
Speaker 1: get made in your world, how many of them actually
Speaker 1: turn into something that either gets sold or is fairly profitable.
Speaker 6: And the angel business and the venture business, we know
Speaker 6: that about thirty five percent of companies don't return all
Speaker 6: the capital. We know that in venture I've seen studies
Speaker 6: that said it's you know, half In our twenty years
Speaker 6: of experience, we've had just about thirty percent of companies
Speaker 6: who haven't returned capital. But the rest of our companies,
Speaker 6: in fact, I looked at it just the other day.
Speaker 6: Of all the money that we've invested, one hundred percent
Speaker 6: of it has come back in aggregate to our investors.
Speaker 6: And there's unrealized gains in the existing operating companies of
Speaker 6: about another seventy nine percent. And on average, our companies
Speaker 6: are still only a couple of years old.
Speaker 3: Our thanks to Joe Anne Corcoran, co chief executive officer
Speaker 3: and managing partner over at Golden Seeds.
Speaker 1: In a related story, twenty three and Me co founder
Speaker 1: and CEO and Jiski once had to make the rounds
Speaker 1: of investors and venture capitalists. That was nearly twenty years ago. Today,
Speaker 1: the company seems to be facing an ex exstential threat after.
Speaker 3: Years of mass market genetic testing that was designed to
Speaker 3: read a person's DNA code to address the risk for
Speaker 3: future diseases and live to one hundred years old. As
Speaker 3: it turns out, it's a lot more complicated than just
Speaker 3: spitting in a tube for twenty three and meters. It's
Speaker 3: become more geno hype than geno promise, and that's.
Speaker 1: Affecting the company's bottom line. This is the cover story
Speaker 1: of the current issue at Bloomberg BusinessWeek, reported by Bloomberg
Speaker 1: News healthcare reporter Kristin V. Brown.
Speaker 9: They're trying to, for some of these things, do what's
Speaker 9: called a polygenic risk gore and say, based on all
Speaker 9: of these genes, you might have a risk, but it
Speaker 9: winds up being more like you're slightly more elevated to risk,
Speaker 9: not an actual roadmap for what do you do to
Speaker 9: stay healthy and live to one hundred.
Speaker 3: Well, in a small portion of the folks who do
Speaker 3: the test, it does come back with some sort of
Speaker 3: result that says, okay, you do have the characteristics of
Speaker 3: this sort of genetic variant. But then treatment for that,
Speaker 3: as you note in your story, can be incredibly expensive.
Speaker 1: Right.
Speaker 9: Monogenic diseases, there's a lot of them. That's a single
Speaker 9: gene that causes a disease. There's a lot of them,
Speaker 9: but they're usually very very rare, and because they're rare,
Speaker 9: and the therapies are also very complicated, you know, fancy
Speaker 9: high tech things, they're expensive, small pots population, small market.
Speaker 9: So we have gotten a few of these therapies so far,
Speaker 9: but definitely not the therapies that we expected for very
Speaker 9: common diseases like Alzheimer's, like cancer. So we've gotten therapies
Speaker 9: that have a small market and so therefore they're really
Speaker 9: really pricey.
Speaker 1: We talked about people spitting in a tube. I'm not
Speaker 1: going to ask for show of hands in the control room.
Speaker 1: We're here, but you did it. I did it. Yeah,
Speaker 1: I did not do it.
Speaker 9: I have spit in so many tubes in the course
Speaker 9: of my journalism career. But I did for this particular
Speaker 9: story too.
Speaker 3: And it wasn't the typical twenty three and me twenty
Speaker 3: dollars thing, right, This is a.
Speaker 9: Very high test. Yeah, so twenty three meters. Latest offering
Speaker 9: is it's doing sequencing, not genotyping, which is a fancier.
Speaker 9: They're literally decoding every little bit of all of the
Speaker 9: protein coding regions of your genome, which are the ones
Speaker 9: that we think cause disease. In doing that, they really
Speaker 9: hope to get this really holistic, nuanced picture of the
Speaker 9: genome for me, and the sequencing they actually didn't find anything.
Speaker 9: And then in the genotyping, which is a sort of
Speaker 9: more low budget option, they found that I might be
Speaker 9: at risk risk or Celiac disease. But I can tell
Speaker 9: you I had avocado toast this morning for breakfast. I
Speaker 9: went fine, it went fine, So so for me at least,
Speaker 9: this is almost a thousand dollars test, and I learned
Speaker 9: that I might have a disease that I don't have.
Speaker 9: So I don't know, well.
Speaker 1: Did you do anything about that? Like I'm curious. Did
Speaker 1: it cause you to say, well, maybe I'll have a
Speaker 1: doctor look into this.
Speaker 9: Well, you know, usually if you have Celiac disease, you know,
Speaker 9: you have a violent reaction you eat gluten. So I
Speaker 9: was I felt pretty confident. Also said I might one
Speaker 9: day develop glaucoma.
Speaker 7: I have a.
Speaker 9: Slightly increased risk, but you can't actually do anything about that.
Speaker 9: So it's I don't know what to do with that knowledge.
Speaker 9: I felt like I sort of spent that thousand dollars
Speaker 9: on some shoes instead. Maybe I don't know, preach.
Speaker 1: Into the choir. Well, the medical community right has been
Speaker 1: to some extent they haven't embraced this idea. Yeah, So
Speaker 1: I mean, is that part of the problem. Is it
Speaker 1: just a case that it's complicated and maybe it is
Speaker 1: the right idea or what's the kind of feedback on this.
Speaker 9: I wrote this story because I started wondering, for the
Speaker 9: decade I have covered this topic, people have told me,
Speaker 9: you know, this is the year genetics is going to
Speaker 9: catch on, this is the year, this is finally the year. No,
Speaker 9: this year, and it just it just never happened. And
Speaker 9: so I started asking some of my longtime sources, you know,
Speaker 9: is this happening? You know, what's the status here, guys?
Speaker 9: And I was surprised to hear from many people who
Speaker 9: had been boosters for the genome who are now saying,
Speaker 9: we're not sure it's ever going to happen. And yeah,
Speaker 9: and you know, with science, you never you never know.
Speaker 9: Maybe we'll turn a corner, we'll find something that will
Speaker 9: suddenly unlock everything. But based on what we know now,
Speaker 9: it does feel like it's just so complicated that for
Speaker 9: the average healthy person, there won't be value really in
Speaker 9: getting a genetic street. Now, if you have a history
Speaker 9: of cancer in your family, if you want to become
Speaker 9: a parent and you want to make sure you don't
Speaker 9: have any genetic conditions lurking in your genome, you could
Speaker 9: pass on that stuff all worth it. But if you're
Speaker 9: just an average healthy person trying to live their best life,
Speaker 9: it just really seems like there's not going to be
Speaker 9: value in these tests.
Speaker 3: It raises the question about what the future is for
Speaker 3: twenty three and me, And that's a big part of
Speaker 3: your cover story for Bloomberg Business Week, the idea that
Speaker 3: the stock has been under pressure over the last few years,
Speaker 3: down more than ninety four percent over that period of time.
Speaker 3: Richard Branson lost over one hundred million dollars on it
Speaker 3: going public. What is the future for twenty three In
Speaker 3: me as.
Speaker 9: A business, they're in a real tough spot. They just
Speaker 9: got an extension to try and get their stock back
Speaker 9: up over a dollar. They have until I believe November.
Speaker 3: Concerns that they'll be delisted.
Speaker 9: Yeah, the concern is that they will be delisted, and
Speaker 9: I think and a move to prevent that from happening.
Speaker 9: CEO and Wajiski has filed an intent to take the
Speaker 9: company private herself, to buy it back basically, so that
Speaker 9: could be one thing we see. But I think that
Speaker 9: you know, it's a really rocky road ahead for them.
Speaker 1: Well, you know, it's interesting and I don't know, is
Speaker 1: this a company that might benefit being private in terms
Speaker 1: of having the time, the luxury, maybe the money, you know,
Speaker 1: to kind of figure this.
Speaker 9: Out based on what this doc did when she filed
Speaker 9: that eight k I, let's say that the market things
Speaker 9: that would benefit from from going private. It's it's it's
Speaker 9: a hard company because it's part consumer, part drug development,
Speaker 9: and the investors in those two different kinds of companies,
Speaker 9: and has said this herself, they kind of have different expectations.
Speaker 9: So it's a weird blend of things, and that has
Speaker 9: created an additional challenge on top of, you know, having
Speaker 9: a consumer product that a lot of consumers maybe don't
Speaker 9: want anymore.
Speaker 3: So what about the data and the data breaches that
Speaker 3: we've heard about the security of this information. I mean
Speaker 3: years ago, years ago, I'm going to say, my mom
Speaker 3: was right. She was like, why would I want to
Speaker 3: give a company this type of information once it's out there?
Speaker 3: And I was actually defended. I was saying, no, you
Speaker 3: know these you know this type of stuff says stay
Speaker 3: fast forward a few years, there's a big data breach.
Speaker 9: Anne has said that she thinks that privacy concerns has
Speaker 9: been one of the reasons K sales have slowed. She
Speaker 9: said that in the past, and you know, that could
Speaker 9: definitely be what's going on. One analyst joke to me
Speaker 9: that twenty three and meters would probably do better to
Speaker 9: just give the kit away for free in exchange for
Speaker 9: getting people's data, because that is the most valuable asseting of.
Speaker 1: How much we've talked about generative AI, and you think
Speaker 1: about the more data that comes into the pool, whether
Speaker 1: or not that can help kind of be a turning point,
Speaker 1: like more information.
Speaker 9: I mean, they have fifteen million genomes. That is one
Speaker 9: of the biggest genetic databases on par with ancestry and
Speaker 9: the country of China.
Speaker 1: So that's that's really valuable.
Speaker 9: And so if they can keep growing that asset, that
Speaker 9: could be big.
Speaker 3: And to be clear, there was a data breach of
Speaker 3: people's personal information.
Speaker 9: Yes, there was a data breach, not personal, and it
Speaker 9: did contain some genetic information.
Speaker 1: Any questions that you still have, you've reported this story out,
Speaker 1: you're thinking about it. Question are still kind of top
Speaker 1: of mind for you. Yeah.
Speaker 9: I mean I think for me, you know, having covered
Speaker 9: this field for a decade, it was sort of an
Speaker 9: existential crisis to actually do this story and be you know,
Speaker 9: questioning whether the thing that I have covered for a
Speaker 9: decade really doesn't matter. So I think that I just
Speaker 9: want to see how this science unfolds and what value
Speaker 9: we will wind up getting from the genome, because I
Speaker 9: don't think that it's going to wind up having been
Speaker 9: for or not that we sequenced the human genome twenty
Speaker 9: years ago, but I think what we're going to get
Speaker 9: isn't what we expected, so that's still to be written.
Speaker 1: It's fascinating. I remember kind of early on in my career,
Speaker 1: like you know, they'd map something and we'd do a
Speaker 1: story and then when they finally completed it like it
Speaker 1: was just like whay, you know, now we have all
Speaker 1: the information and what we can do with it. But here,
Speaker 1: we are here, we are here, we are more to come.
Speaker 1: That means more stories from you, more cover stories. Bloomberg
Speaker 1: News healthcare reporter Kristin V. Brown on this week's Bloomberg
Speaker 1: Business Week cover story, which you can get online on
Speaker 1: the Bloomberg and to catch it also on the newsstand.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 2: each weekday starting a two pm Eastern tout applecar Play
Speaker 2: and Androyd Auto with the Bloomberg Business Ad. You can
Speaker 2: also listen live on Amazon Alexa from our flagship New
Speaker 2: York station, Just say Alexa play Bloomberg eleven thirty plenty ahead.
Speaker 1: In our second hour of the weekend edition of Bloomberg
Speaker 1: Business Week, including the Active were apparel brand that's been
Speaker 1: focused on men for years now, embracing the better sex.
Speaker 1: I can kind of say that, don't you think.
Speaker 9: I think you can?
Speaker 1: I might get some mail.
Speaker 3: I'm not going to push back, all.
Speaker 1: Right, anyway, I've been hammering them for years about this
Speaker 1: we check it with Nate check It's I've Rown in
Speaker 1: just a minute.
Speaker 3: Plus homing in on the UK, including its answer to
Speaker 3: the hit a Netflix series selling Sunset Mayfair Anyone. We
Speaker 3: get into the buying and selling of London's most expensive homes.
Speaker 1: As well as where to go for more affordable weekend
Speaker 1: getaways outside of London, and a favorite conversation of mine
Speaker 1: about sailing alone on the I sees it's all in
Speaker 1: a new book on the surprising history of isolation and
Speaker 1: survival at sea.
Speaker 3: First up this hour, a look at the athletic wear
Speaker 3: space Roan, the active wear apparel brand backed by Blackstone
Speaker 3: executive David Blitzer, former Hedgehront manager Gabe Plotkin, an ex
Speaker 3: football star Tim Tebow and more. It was founded back
Speaker 3: in twenty fourteen as a men's only brand. It's a
Speaker 3: private company and it's been profitable for the past three years,
Speaker 3: eclipsing one hundred million dollars in annual run rate, and.
Speaker 1: Now with a big announcement, they are out with a
Speaker 1: women's line. And it's really fun because I've been pressuring like,
Speaker 1: what are you going to do it? What are you
Speaker 1: going to do it? Guess we've been talking to him
Speaker 1: for years. It launched earlier this month. We got more
Speaker 1: with Nate Checketz. He's the co founder and CEO of Ron.
Speaker 10: We did a capsule collection back in twenty nineteen on
Speaker 10: International Women's Day and the thought was, Okay, this will
Speaker 10: be a little test. We'll see how the market reacts
Speaker 10: to it. And it went well, and then of course
Speaker 10: we have a global pandemic the next year, so we
Speaker 10: decided not to anniversary it. We pulled back and then
Speaker 10: really we made the decision two and a half years ago, Okay,
Speaker 10: we need to do this, but let's do it the
Speaker 10: right way. Let's think through every aspect. And it impacts
Speaker 10: everything from store layout to mannequins to models, to the
Speaker 10: brand marketing. How are you shifting the message? So we
Speaker 10: really brought invest in class talent across every aspect of
Speaker 10: the business and starting most importantly with the product. And
Speaker 10: it just takes a while to do it right.
Speaker 3: Is it hard from a communications perspective because you've been
Speaker 3: known for a decade as being a place for men,
Speaker 3: and perhaps customers might walk by a store and say, well,
Speaker 3: I'm not going to go in there because they don't
Speaker 3: have product necessarily for me.
Speaker 10: Yeah, I think that has been the brand marketing challenge,
Speaker 10: and I think if you look at the industry, there
Speaker 10: are certainly brands who have done this very well, shifted
Speaker 10: from men's to women's or women's into men's, But then
Speaker 10: there have been brands who have taken some big missteps
Speaker 10: in that. And one of the things that we were
Speaker 10: adamant about from the beginning is this is not taking
Speaker 10: our men's product and creating women's product. This is creating
Speaker 10: take in our customer, putting her at the center of
Speaker 10: the journey, and making product uniquely for her, unique fabrications,
Speaker 10: unique fits, unique cuts, and that the lines can be complementary,
Speaker 10: but they're not meant to be symmetrical.
Speaker 1: Is it more difficult in terms of creating a women's
Speaker 1: line versus a men's line.
Speaker 10: There's certainly a lot more competition, and I think there's
Speaker 10: more pressure to have newness and be on trend in fashion.
Speaker 10: We joke in the men's space, it's like, well, make
Speaker 10: sure you have black, navy and gray, and you're fine.
Speaker 10: But even the men's space has evolved over the last
Speaker 10: several years, and men are are more kind of fashion
Speaker 10: forward and leaning into trend and style. So we brought
Speaker 10: in really a best in class team on the merchandising
Speaker 10: and the styling and the design side, and we're really
Speaker 10: seeing it on the initial reaction. We launched an early
Speaker 10: access yesterday and in the first day we started breaking
Speaker 10: on a couple of styles, meaning we were selling out
Speaker 10: of a few key sizes, which we had not anticipated
Speaker 10: to happen for the first four weeks. So the reaction
Speaker 10: has been just unbelievable.
Speaker 3: What's the ultimate goal for revenue mix for this is it?
Speaker 3: Do you want this to be fifty to fifty? Do
Speaker 3: you want women to be sixty forty.
Speaker 10: We've done a three year model and we see a
Speaker 10: path to getting the brand to a fifty to fifty mix.
Speaker 10: Women are obviously more prolific shoppers than men. They're just
Speaker 10: better at it. They know, they stop that, I hear
Speaker 10: that at home. They know what they want and they
Speaker 10: you know, they're willing to lean in and try new things.
Speaker 10: I think the challenge is if you can get a
Speaker 10: male customer, you can keep him generally a lot longer.
Speaker 10: He tends to go back to what he knows and likes.
Speaker 10: He's harder to get. That's the men are lazy, yep. Yep,
Speaker 10: that's a good, good interpretation.
Speaker 1: You tend to like what you like exactly right.
Speaker 10: But women, you have to earn that next purchase every
Speaker 10: single time, and we take that seriously. So to us,
Speaker 10: it starts at the fabric level, the quality of what
Speaker 10: we do, and I think as we put hands you know,
Speaker 10: everything from our fit model to our actual fashion models.
Speaker 10: They've said, you know, they work with every brand in
Speaker 10: the market and they're like, this is the softest best
Speaker 10: fabric I've ever felt. So we think we're doing something right.
Speaker 1: How do you go after getting the female customer? Women
Speaker 1: customers versus men, Like, I'm curious, what was your approach?
Speaker 10: Well, we have a slight advantage here versus a new brand,
Speaker 10: which is we already have a big database of women.
Speaker 10: Thirty percent of our men's product was being purchased by women,
Speaker 10: which is about the inverse of some of the big public,
Speaker 10: more female led brands. It's usually like the opposite of that.
Speaker 10: But we had a database of active female shoppers, and
Speaker 10: then we've just been very strategic about going out targeting
Speaker 10: who we think she is on social building up some anticipation,
Speaker 10: some great pr We've had a lot of incredible press
Speaker 10: and this is not a one month thing. This is
Speaker 10: a we've learned in ten years. You've got to keep consistent.
Speaker 10: I think one of the things that we have really
Speaker 10: prided ourselves on as we've built this line is almost
Speaker 10: every Active brand is based on the West Coasts, and
Speaker 10: there is definitely a West Coast aesthetic. And what I've
Speaker 10: said internally is, since when was New York not the
Speaker 10: capital fashion capital of the world. So we try and
Speaker 10: bring a New York aesthetic and trend and focus into Active.
Speaker 10: But we start with a root of performance at the
Speaker 10: center of what we do, versus taking kind of a
Speaker 10: ready to wear and then trying to use active fabrics.
Speaker 10: We combine the best of both worlds to kind of
Speaker 10: bring that to the market. And I think the other
Speaker 10: big focus for us is how do we make her powerful, strong, independent.
Speaker 10: We think a lot of these brands look the same
Speaker 10: because it's all yoga, endless hours of yoga loops. But
Speaker 10: we think our customer is maybe she's sneaking yoga in
Speaker 10: in fifteen twenty minutes and she's working hard, she's taking
Speaker 10: care of people, she's strong, she's independent, and we want
Speaker 10: to position her that way. Versus you've got two hours
Speaker 10: in a yoga studio to do whatever you want, because
Speaker 10: none of our customers live that way. Ath Leisure is
Speaker 10: obviously a term that has gained a lot of importance
Speaker 10: in the market. The way we think about ath leisure
Speaker 10: is it's made to look athletic, but you can't actually
Speaker 10: work out in it. Yeah, so we call it performance lifestyle,
Speaker 10: which is, you can do anything in our clothes. You know,
Speaker 10: you know, I've run a marathon in our dress shirt.
Speaker 10: You can literally do anything, but you're going to look
Speaker 10: professional when you wear it.
Speaker 3: When it comes to the women's line, I mean the
Speaker 3: more active formal line that you had that you developed
Speaker 3: for men's came a little later than that first active
Speaker 3: were stuff. Are you following a similar timeline? Are you
Speaker 3: going to kind of release everything right now?
Speaker 8: Now?
Speaker 10: We're following a very similar flow, which is let's root
Speaker 10: ourselves in performance. So the initial line you'll see is
Speaker 10: very active focused a lot of course to court. You
Speaker 10: may have heard we signed the LPGA, were the official
Speaker 10: Encourse apparel partner there, so you'll see us on a
Speaker 10: lot of green grass accounts, tennis courts, pickleball courts, and
Speaker 10: then a lot of the lifestyle will start to be
Speaker 10: added in afterwards.
Speaker 1: Do you still have fun doing this?
Speaker 10: Oh, my gosh, I'm having the most fun I've ever
Speaker 10: had right now. It's ten years, and certainly I've had
Speaker 10: periods of founder burnout. But I think since we took
Speaker 10: back full control of the business and we really kind
Speaker 10: of started to chart our own destiny, it just changed
Speaker 10: the way we feel about it.
Speaker 3: You took back full control eighteen months ago, roughly didn't
Speaker 3: make it public though, until just last fall. Give an
Speaker 3: update on the business since taking full control.
Speaker 10: Well, last year was our biggest absolute growth here ever,
Speaker 10: and the business is growing almost twice as fast this year. Yeah,
Speaker 10: so we feel really encouraged about that decision and the
Speaker 10: team that we've put into place and the investment in people.
Speaker 10: We have big growth goals, so we still feel like
Speaker 10: we're in the early innings of where this can go.
Speaker 10: But it's been a journey ten years.
Speaker 1: So expanding into women, you still talk about growth going
Speaker 1: forward ten years in what's the next ten years? Like,
Speaker 1: how do you think about it?
Speaker 10: Yeah?
Speaker 1: Well, sorry, no pressure.
Speaker 10: I think the thing that I am most excited about
Speaker 10: is we have from the beginning of our customer journey
Speaker 10: we have focused on what we call mental fitness, which
Speaker 10: is really just an emphasis on mental health, taking care
Speaker 10: of yourself both physically and mentally. When we came into
Speaker 10: the active market, you would see all of these marketing
Speaker 10: messages of you're an athlete, lift more weight, run faster,
Speaker 10: jump higher, and we think there's such a missing aspect
Speaker 10: of recovery and taking care of yourself and the space
Speaker 10: between your ears, and that is a very unique problem
Speaker 10: in the men's market. So it was an easy area
Speaker 10: to focus on. But everybody needs to talk about this.
Speaker 10: And what's great is the female customer is already naturally
Speaker 10: so much better at talking about it. So doing this
Speaker 10: together with our team has been really really helpful and powerful.
Speaker 10: So what I'm most excited about for the next ten
Speaker 10: years is to be able to supercharge that. And so
Speaker 10: we've got some big exciting plans in terms of how
Speaker 10: we're going to do that, how we're going to bring
Speaker 10: that to the market, and some of the unique things
Speaker 10: that we think about about being a wellness company. First,
Speaker 10: that just happens to sell clothes.
Speaker 1: Wow, was that.
Speaker 3: In your ethos from the very beginning or did that
Speaker 3: kind of transition happen over the pandemic.
Speaker 10: Yeah, it has been part of the DNA from the beginning.
Speaker 10: I think during the pandemic we were able to crystallize
Speaker 10: what that mission was and part of it was having
Speaker 10: my own crisis going through some of that with a pandemic.
Speaker 10: But we have always believed that wellness is much more
Speaker 10: than esthetic physical fitness, which is really where I think
Speaker 10: most of these brands focus on with a hyper level
Speaker 10: of focus on professional athlete endorsements. We just love this
Speaker 10: idea that teaching people how to take care of themselves
Speaker 10: is the best way to feel good, and part of
Speaker 10: that is having a uniform that you feel excited and energized,
Speaker 10: but also enabling and empowering the conversation. We've hosted hundreds
Speaker 10: of these events that we call minded Muscle events, which
Speaker 10: are twenty five minute body weight workouts followed by a
Speaker 10: group discussion. Is really like a group therapy conversation, and
Speaker 10: that format exists in alcoholics anonymous, It exists in a
Speaker 10: number of different formats, but it's been so successful in
Speaker 10: men's and we've had like groundbreaking moments with so many
Speaker 10: guys and it just enables them to feel comfortable talking
Speaker 10: about these things. It's my passion, Like that's the thing
Speaker 10: that gets me the most excited. And yes, I think
Speaker 10: we make the best clothes in our category and the
Speaker 10: best close in our market. That enables us to have
Speaker 10: a megaphone. And so we've got to grow the size
Speaker 10: of our megaphone to have the level of impact that
Speaker 10: we want. But our growth goal is to be a
Speaker 10: billion dollar revenue business and impact one hundred million lives
Speaker 10: through our education.
Speaker 1: It's fascinating to hear you say, like thinking of yourself.
Speaker 1: I mean, like you said, it's from the beginning, but
Speaker 1: as a wellness company kind of with clothes attached, if
Speaker 1: you will, I mean, how else do you I mean,
Speaker 1: is it a case that there are other offerings Nate,
Speaker 1: that you eventually offered to your customers.
Speaker 10: Even more so, that's the goal. From the beginning, we
Speaker 10: had an online journal that we called The Pursuit, which
Speaker 10: focused a lot on this bringing world class experts to
Speaker 10: the table sharing that content. But what we found is
Speaker 10: that this idea of you guys are in the content business,
Speaker 10: you know how hard it is, and so we were
Speaker 10: competing against advertised driven content engines and this was like
Speaker 10: something that we were doing on the site. So now
Speaker 10: we've taken that back in house and figured out how
Speaker 10: to do this in a way that we think is
Speaker 10: sustainable and meeting the customer where they're at in the
Speaker 10: form of video content and social first content versus written content,
Speaker 10: and then also live events and leaning more into that
Speaker 10: that I think will be really powerful.
Speaker 3: Can you give us an update on retail locations, because
Speaker 3: one thing that we talked about with you last time
Speaker 3: you were here was growth of retail in a time
Speaker 3: when we're seeing other companies pull back. Yeah, and I'm
Speaker 3: wondering how aggressive you're being this year when it comes
Speaker 3: to that retail footprint and what portion right now comes
Speaker 3: from e commerce versus those brick and mortar.
Speaker 10: Retail has been our fastest growing channel the last two
Speaker 10: years on a percent basis, and I think it's a
Speaker 10: channel we certainly believe in. We are slowing that down
Speaker 10: this year because of the women's launch. As you can imagine,
Speaker 10: it changes the layout of the store, the size of
Speaker 10: the store, the mannequins, the hangars, the training of the staff,
Speaker 10: the selection of the staff, like, there's just so many considerations,
Speaker 10: so we kind of want to absorb and.
Speaker 1: Because every store has to have a retrofit.
Speaker 10: Right exactly, So we're retrofitting all fifteen stores. We've kind
Speaker 10: of done that work, brought in the right people from
Speaker 10: a visual merchandising standpoint, but our store plan going forward
Speaker 10: is as aggressive as it was in twenty twenty three,
Speaker 10: and we think that these stores are really important, especially
Speaker 10: for our brand message, because you have to meet people
Speaker 10: where they are and meeting people in person and physically.
Speaker 10: We've all learned the importance of that over the last
Speaker 10: several years, so we're leaning into that and doing the
Speaker 10: right way. We're going to be highly selective. There are
Speaker 10: certainly a lot of brands in our space that, because
Speaker 10: of their capital stack and what they need to achieve,
Speaker 10: they're juicing their revenue numbers by opening as many stores
Speaker 10: as possible and in some cases over pain for real estate,
Speaker 10: which is going to be tough in three to five
Speaker 10: years when those those rates, you know, don't justify the
Speaker 10: sales figures. We're not taking that tactic. We're being really thoughtful,
Speaker 10: but we're going to you know, our store account will
Speaker 10: be more than two x by twenty twenty six.
Speaker 1: Forgive me, and I should know this wholesale You guys
Speaker 1: don't want.
Speaker 10: We do have some wholesale here. Yeah, We've got some
Speaker 10: great partners in the market. We have a high focus
Speaker 10: on specialty accounts, green grass accounts. You know, we're in
Speaker 10: some of the best golf and country clubs.
Speaker 1: Productive for you guys or is.
Speaker 10: It absolutely Yeah. I think it's a great business model.
Speaker 10: You can get carried away when you're driven when your
Speaker 10: wholesale account is driven by majors. For us, it's been
Speaker 10: about twenty percent of the business the last two years,
Speaker 10: so it's small.
Speaker 3: Equinox was an early partner, a.
Speaker 10: Partner still a partner and uh, and you know, we
Speaker 10: love that type of account because generally if you walk
Speaker 10: into an Equinox and you buy shorts, it's because you forgot.
Speaker 10: Nobody's like, hey, you know what, I'm going to go
Speaker 10: have that be my retail experience or I would say
Speaker 10: that's the minority, but you just do it. It's perfect
Speaker 10: and it's a great way for people to discover the
Speaker 10: brand and the product.
Speaker 3: You want to use the gym loner shorts all.
Speaker 10: Right, So here kids, Yeah, I won't say never. My
Speaker 10: wife's been begging for that from the beginning, but I
Speaker 10: think she'll I think she'll give me a minute, because just.
Speaker 3: To clarify, you have kids already, you're talking about a kid's.
Speaker 1: Yeh, kid's line.
Speaker 10: Yeah fair, thanks Tom, Yeah, but but yeah, so you
Speaker 10: never know. But I surprised my wife on the day
Speaker 10: that we launched, and I had just flown in from Asia.
Speaker 10: I arrived at three am. I set up a room
Speaker 10: in our house with every single one of the products
Speaker 10: for her, and then I brought her in a surprise her.
Speaker 10: And so I think she'll give me. I think she'll
Speaker 10: give me a year off before bothering that kids.
Speaker 1: Again, Well done, well done you Nate, always great to
Speaker 1: check in with.
Speaker 10: Good good luck with it, Thank you, thank you, thanks
Speaker 10: for having me.
Speaker 1: Nate check it is. He's co founder and CEO of Rown,
Speaker 1: joining us here in studio. All right, everybody, you've been
Speaker 1: listening and watching Bloomberg Business Week Carol Masser, Tim Stenovic,
Speaker 1: and this is Booberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple car Play and then brought auto with a
Speaker 2: Bloomberg Business app or watch us live on YouTube.
Speaker 1: Takes me, all right, So my husband and I are sailors.
Speaker 1: You guys probably know that. I talk about it a lot.
Speaker 1: I know, but we have been for over thirty years
Speaker 1: and some of our favorite moments are being out on
Speaker 1: the water. No one's around us for what seems like miles, however,
Speaker 1: coastlines and land is often still in sight. Neither of
Speaker 1: us have done serious offshore sailing or crossed an ocean alone,
Speaker 1: something that many others have done. Not yet, Yeah, that's right,
Speaker 1: we still have time. It is those solo sailors, both
Speaker 1: men and women, who have ventured out single handed, that
Speaker 1: really know what it's like to be truly alone out
Speaker 1: on the ocean and often for days.
Speaker 3: Tim our next guest, has crossed the Atlantic In his
Speaker 3: twenty eight foot sloop Fox. Richard King writes about it,
Speaker 3: weaving his journey through those of other sailors who have
Speaker 3: sailed out of sight of land and alone. It's all
Speaker 3: Carol in his new book Sailing Alone, A Surprising History
Speaker 3: of Isolation and Survival at Sea.
Speaker 1: All right, Richard, needless to say, this has been fun thing,
Speaker 1: and I've been looking forward to My producer, Paul Brandon
Speaker 1: Lake was like, you gave me the book a while ago,
Speaker 1: so it's been fun. We've been counting down the days
Speaker 1: to you. Welcome, Welcome, Welcome. Tell us about First of all,
Speaker 1: you are a sailor. You've gone at it alone on
Speaker 1: a boat across the ocean. But tell us why you
Speaker 1: wanted to kind of put this together. Tell your story,
Speaker 1: but also tell the story of many other sailors who've
Speaker 1: done that as well.
Speaker 5: Sure, and thanks a lot, Carole, tim for having me
Speaker 5: on and can look forward to hearing about your adventures.
Speaker 5: I sailed by myself in two thousand and seven across
Speaker 5: the Atlantic, and I definitely don't see myself as a
Speaker 5: super sailor. You know, it was a little bit of
Speaker 5: a bungling affair, and in some ways, going out ofside
Speaker 5: of land, you know, off the coast is easier, right,
Speaker 5: you know, there's there's less to hit and less to
Speaker 5: take keep track of.
Speaker 7: But I did it for a couple of.
Speaker 5: Different reasons, and that was one of the things that
Speaker 5: I explore in this book. You know, I'm really telling
Speaker 5: the history of people that have gone to see by
Speaker 5: themselves and crossed ocean by themselves since at least the
Speaker 5: early seventeen hundreds and all the way up to today.
Speaker 5: And so I was trying to explore like why did
Speaker 5: people go, why would they go? And then also what
Speaker 5: they saw out there, just like you did in that
Speaker 5: intro Carob, like what is it like to be out
Speaker 5: at sea by yourself on a quiet boat, really close
Speaker 5: to the surface, day after day and really getting that
Speaker 5: connection to the ocean world.
Speaker 1: Well, I love that the book about you know, why
Speaker 1: they go, what they see? So when you took your
Speaker 1: trip across the Atlantic on Fox, your twenty eight foot sloop,
Speaker 1: what did you or what why did you go specifically
Speaker 1: and what did you see?
Speaker 7: Yeah? I went.
Speaker 5: I was in graduate school at the time, and I
Speaker 5: studied literature at sea. I'm actually more of a scholar
Speaker 5: than you know, a sailor, and I'd spent so much
Speaker 5: time reading about these experiences and I was like, you know,
Speaker 5: maybe maybe I could do that, and so I put
Speaker 5: I'm really proud of sort of the logistics of the boys,
Speaker 5: not necessarily the execution, but I didn't make it. And
Speaker 5: you know, some of the things that I saw out
Speaker 5: there was just a really close connection with some of
Speaker 5: the seabirds, particularly storm petrels. I had one moment which
Speaker 5: I you know, many of the listeners will sort of
Speaker 5: connect with where I was fishing off the back of
Speaker 5: the boat and I saw a fin coming behind me,
Speaker 5: a really large dorsal fin, and I kind of freaked out.
Speaker 5: I was like, oh, my gosh, Jaws is going to
Speaker 5: like leap right on top of the boat and.
Speaker 7: You know, eat me up.
Speaker 5: And you know, I quickly went down below and I
Speaker 5: took pictures and I grabbed my boat hook as if
Speaker 5: I was going to you know, stab it in the
Speaker 5: eye or something like that. And then later when I
Speaker 5: look at the pictures, I realized it was this tiny
Speaker 5: little fin.
Speaker 1: It probably wasn't even the shark.
Speaker 7: It might have been like a pilot whale or something.
Speaker 5: But you know, you just really get that sort of
Speaker 5: intense connection, particularly the nights at sea and the sunrises
Speaker 5: and sunsets, and it's, you know, it's a rare, privileged experience.
Speaker 3: Really, maybe because I'm an anxious New Yorker. I'm just
Speaker 3: wondering about the anxiety of being out there.
Speaker 1: It's so it's soom.
Speaker 3: I know it's am but well, there's this feeling that
Speaker 3: I have. I'm not a sailor. I've sailed before, but
Speaker 3: I would not consider myself a sailor. Of not being
Speaker 3: in control of when you can get back on land,
Speaker 3: and that part of this totally freaks me out here.
Speaker 3: Were there any moments out there that you just found
Speaker 3: yourself terrified.
Speaker 1: Like when the engine died on that trip across the Atlantic?
Speaker 5: Yeah, Tim, totally. I would say ninety percent of the
Speaker 5: time I was an anxious wreck and my people are.
Speaker 1: Also from New York.
Speaker 11: I have that stream.
Speaker 5: Okay, you know, I think, and that's really the book
Speaker 5: is really about some of these great sailors who have
Speaker 5: gotten over that first anxious experience. I kind of never did.
Speaker 5: I did my first trip across the Atletic, and then
Speaker 5: afterwards I was like, Okay, I think, I think I'm good,
Speaker 5: but I do kind of wish that I had continued
Speaker 5: on because you look at some of the really extraordinary
Speaker 5: historical sailors Bernardo Martissier, Robin Knox, Johnson, Ellen MacArthur, even
Speaker 5: you know the early ones like Joshua Slocum, who got
Speaker 5: over those initial and anxious moments and then were able
Speaker 5: to carry on and really be calm and really enjoy
Speaker 5: themselves at sea. And often that's when you know these
Speaker 5: sailors really got these experiences in the natural world where
Speaker 5: they could finally relax and not have to worry so
Speaker 5: much about you know, this thing breaking or.
Speaker 1: There's something always breaking on a boat. You know that
Speaker 1: it's always breaking. Well, what's the joke? They say, it's
Speaker 1: like hours and hours of boredom broken up by you know,
Speaker 1: minutes or seconds of just sheer, terror and chaos. And
Speaker 1: that's kind of sailing, right, because it's really quiet out there,
Speaker 1: and then you have to go into harbor and you
Speaker 1: have to dock, and it's like there's always something that's
Speaker 1: going to go wrong.
Speaker 5: That's right, and you know, for a big part for
Speaker 5: solo sailers, trying to steer the boat and trying to
Speaker 5: get rest is a big part of it. And so
Speaker 5: one of the things I talked about in the book
Speaker 5: is sort of the development of various technologies that have
Speaker 5: made it a little bit easier for solo sailers. Whether
Speaker 5: it's GPS or fiberglass or the marine engine, but self
Speaker 5: steering mechanisms, whether they're wind based or electrical, have made
Speaker 5: a huge difference.
Speaker 1: You had a wind, but even in my kid, did
Speaker 1: you have a wind vane? That's what you used right
Speaker 1: to go across That's right.
Speaker 5: I had two different types of steering. I had a
Speaker 5: wind vane self steering, which you know doesn't require any
Speaker 5: power or any fuel, and that is about the most
Speaker 5: magical device on the planet. I was developed sort of,
Speaker 5: you know, in the nineteen fifties and sixties for recreational boats,
Speaker 5: and that was just amazing. But that requires that's based
Speaker 5: on relative winds. So if you want to sleep for
Speaker 5: two hours and you got up, the boat is adjusting
Speaker 5: itself based on an angle of the wind. So if
Speaker 5: the wind shifts, your boat is going to change. And
Speaker 5: then I also had a little electrical tiller pilot. Okay,
Speaker 5: you could say to a compass point.
Speaker 3: I'm curious about the reasons behind this and how not
Speaker 3: necessarily yours, which I want to get to, but the
Speaker 3: way that they've shifted over time, because, as you mentioned
Speaker 3: in the seventeen hundreds, a lot of this was exploration.
Speaker 3: It was in search of riches, it was in search
Speaker 3: of you know, at that point, not necessarily new lands,
Speaker 3: but sort of right, the great exploration of the seas
Speaker 3: of the of the earth. But these days a lot
Speaker 3: of it is about recreation, and it's about sort of
Speaker 3: personal challenges, and I'm wondering how you can characterize the
Speaker 3: evolution of why someone would do this.
Speaker 5: Yeah, yeah, No, that's a great point, and that's it's
Speaker 5: only something I sort of traced through going over time,
Speaker 5: because you know that the whole idea that going sailing
Speaker 5: by yourself across an ocean, that that isn't completely just
Speaker 5: a bit nan is idiotic kind of thing. That this
Speaker 5: idea that over time people start to respect that is
Speaker 5: a sort of interesting transition.
Speaker 7: And you do see sort of blips.
Speaker 5: You know, everybody is different, and everybody's complex about whether
Speaker 5: they're escaping a family situation, or they are trying to
Speaker 5: make money, or they're trying to make fame for themselves.
Speaker 5: But you do see sort of these sort of blips
Speaker 5: of where there's more recreational sailing and then even more
Speaker 5: solo sailing.
Speaker 8: One of these.
Speaker 5: Blips is right after World War Two, and I focus
Speaker 5: the book a lot, sort of frame it on Ann Davidson,
Speaker 5: who's the first woman that we know of to sail
Speaker 5: alone across an ocean, and she sales in nineteen fifty two,
Speaker 5: and she's part of this whole surge of people from Europe,
Speaker 5: from North America, from all around the world, that really
Speaker 5: are going out to the ocean and seeking that sort
Speaker 5: of respite, that sort of perception that the ocean is
Speaker 5: a clean, unhampered space, particularly after the trauma of World
Speaker 5: War Two.
Speaker 1: Yeah, it's pretty fascinating right to kind of hear what
Speaker 1: they sought out right to help them through it. I
Speaker 1: want to go back to something you said earlier, and
Speaker 1: that was I think the first solo circumnavigator or who
Speaker 1: was actually let me let you pick the story that
Speaker 1: you just were really drawn to. Because there's older folks,
Speaker 1: folks a long time ago. There's teenagers, which I'm always
Speaker 1: blown away by someone who's a teenager who gets in
Speaker 1: a book and their parents are in a boat and
Speaker 1: their parents are like, yeah, go for it. I think
Speaker 1: about there's a Netflix movie just on Jessica Watson, an
Speaker 1: Australian teenager, and it's kind of wild.
Speaker 5: Yeah, Jessica Watson is fantastic. And I think one of
Speaker 5: the things that I talk a lot about in the
Speaker 5: book is this relationship between being a writer, because going
Speaker 5: to see you, maybe even for you caroly the when
Speaker 5: you go out just for an afternoon or for a day,
Speaker 5: it's a literary endeavor you're keeping a log book. Maybe
Speaker 5: you're writing a note, you're writing a letter, you're reading
Speaker 5: about other sailors, and so it's this very sort of
Speaker 5: almost all of these people that are going selling alone
Speaker 5: are also thinking about it, and some of them are
Speaker 5: thinking about writing a book even before they've they've left.
Speaker 5: And so someone like Bernard Martissier, who in the nineteen
Speaker 5: sixties was the first to sail solo NonStop around the
Speaker 5: world one and a half times around the world in
Speaker 5: the late sixties, and he for him from the very start,
Speaker 5: it was about making a book about crafting this work
Speaker 5: of nature writing, not even as much about the expedition itself.
Speaker 5: It was like as if throw you know, was climbing Everest.
Speaker 1: Just got about a minute left here, I mean, thirty
Speaker 1: years of sailing. We saw our first whale play with
Speaker 1: us in a boat off of Rhode Island just this
Speaker 1: past summer, and my husband I looked at us, maybe
Speaker 1: it's time to sell the boat because it was just
Speaker 1: so unbelievable. But you have about a minute left here?
Speaker 1: Is there a moment in time where you just, I
Speaker 1: don't know, a little story before we go unfortunately?
Speaker 7: Sure?
Speaker 5: Yeah, I think one interesting story is you know if
Speaker 5: you're watching in the news, you're seeing orcas that are
Speaker 5: damaging boats off Gibraltar. They're actually seemed to be knocking
Speaker 5: into recreational boats. And one thing that you learned from
Speaker 5: the history is that's been happening for a while. And
Speaker 5: one former New Yorker, Teddy Seymour born in Yonkers, the
Speaker 5: first black sailor to sail alone around the world, and
Speaker 5: he was knocked by an orca off the Red Sea
Speaker 5: for about a half a day, but luckily just kind
Speaker 5: of banged into a self steering gear.
Speaker 1: But he tells a great story. I got to tell you,
Speaker 1: we watched the orc of videos, and we watch all
Speaker 1: these people, whether it's the YouTuber's project Atticus or Vagabond
Speaker 1: or you know, my husband and I are obsessed with it,
Speaker 1: and you get to get a feel of what it's
Speaker 1: like to be out on the ocean.
Speaker 3: Professor, just fifteen seconds left. Would you do it again?
Speaker 7: I think I do it with friends.
Speaker 1: Yeah, that's what I you know, that's what most of
Speaker 1: them do. And some of them have a couple of
Speaker 1: kids and they're going around the world, but they eventually,
Speaker 1: on some of those big crossings, bring friends on. This
Speaker 1: was so much fun. I hope we get a chance
Speaker 1: to talk again and maybe you will buy. Do you
Speaker 1: have a boat now.
Speaker 5: Yef any would like to donate one?
Speaker 1: Well said, Well said Richard King. His book is Sailing Alone,
Speaker 1: A Surprising History of Isolation and Survival at Sea, joining
Speaker 1: us from Santa Cruz, California. A great place to go sailing,
Speaker 1: no doubt about.
Speaker 3: That, Richard Visiting Professor of Maritime History and Literature with
Speaker 3: the c Education Association.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 1: We're all in on the UK this week, including a
Speaker 1: new show out from Netflix, which has swapped the Hollywood
Speaker 1: Hills for the manicured squares of Mayfair in its new
Speaker 1: real estate show Buying London, the UK's answer to the
Speaker 1: popular selling Sunset reality program.
Speaker 3: More on the new Netflix real estate show Buying London
Speaker 3: in just a minute. Thanks to Bloomberg Pursuits, the British
Speaker 3: take this week everything from London's most expensive homes to
Speaker 3: the beachside breaks and cozy countryside stays outside the city
Speaker 3: of London that are yes, kind of affordable.
Speaker 1: It's all relative, all right. Also the best shows and
Speaker 1: musicals to see on London's West End. Let's get to
Speaker 1: it with us. The editor of Bloomberg Pursuits Chris Rouser
Speaker 1: along with Sarah Rappaport. She is Bloomberg News Luxury reporter.
Speaker 1: She is based in London. Chris, I feel like you
Speaker 1: guys are doing a lot on London this year. Are
Speaker 1: Europe in general?
Speaker 11: Yeah, we've been looking a lot at Europe for the summer. Particularly.
Speaker 11: I think people are thinking about Europe because the Paris Olympics,
Speaker 11: and then people are like, math, I don't want to
Speaker 11: go deal with all that, And so we have been
Speaker 11: publishing lots of stories about alternatives and where places that
Speaker 11: you may not think of going, places that may not
Speaker 11: be so expensive. And Sarah is based in London and
Speaker 11: she is does a great job, has a great luxury
Speaker 11: When you said the luxury reporter, I was like, yeah,
Speaker 11: that does sound really.
Speaker 2: Good, not a bad.
Speaker 11: Yeah. And she specializes in real estate and travel and
Speaker 11: also something that's very close to her in my heart, theater.
Speaker 11: So she's got a lot of fun stuff for this summer.
Speaker 3: Okay, I want to start with travel before we get
Speaker 3: to real estate and then theater. So, Sarah, you wrote
Speaker 3: about the best to affordable new weekend getaways from London
Speaker 3: that are ready to book right now, and before we
Speaker 3: get into all of them, I want to just tell
Speaker 3: you what's stuck out to me is an American who
Speaker 3: struggles with public transportation in the United States. All of
Speaker 3: these are so accessible by train and then an easy
Speaker 3: cab ride. This is amazing.
Speaker 12: They're all under three hours away from London on a train,
Speaker 12: you know, bring a book, you know, pop on a
Speaker 12: train in or.
Speaker 3: There, so you're not sitting in traffic like all New
Speaker 3: Yorkers do trying to get somewhere.
Speaker 1: Like that's a luxury Carol, I know it sounds, it sounds.
Speaker 12: It's incredible, bless in Mahampton's drive right exactly.
Speaker 1: Well, so talk to us a little bit about of
Speaker 1: kind of where that led you to and how you
Speaker 1: thought about kind of what you wanted to highlight.
Speaker 12: Yeah, well, I think London right now can be quite expensive.
Speaker 12: We have a trend of rooms going for like one
Speaker 12: thousand pounds a night, which is like twelve hundred bucks
Speaker 12: but there are some really nice hotels you can get
Speaker 12: to outside of London that are more expensive than they
Speaker 12: were previously, but still affordable luxury. So three hundred pounds,
Speaker 12: which is like five hundred dollars is the top year.
Speaker 12: So there's a really cool new place in Oxford called
Speaker 12: this Store, and it was in the first department store
Speaker 12: actually in Oxford, and it's outside all the colleges. From
Speaker 12: the rooftop you can actually see all the famous spires
Speaker 12: and fancy buildings and all the people going to take
Speaker 12: their exams or have a drink in the bar and
Speaker 12: wash the students going around. And that's really special because
Speaker 12: I love Oxford. It's a very special place in the
Speaker 12: UK and it's only an hour away from London.
Speaker 1: I love that they have posters from the former department
Speaker 1: store that are still kind of hanging on their walls
Speaker 1: and just kind of incorporating to the design. It just
Speaker 1: kind of sounds very unique.
Speaker 12: Cool, like we had nineteen twenties outfits. They actually found
Speaker 12: them during the Renno.
Speaker 11: Sarah tell us about Boys Hall sounds like the place
Speaker 11: for me and Tim.
Speaker 3: It's where we've lost.
Speaker 12: Yeah, there's a removated manor house from the sixteen hundreds.
Speaker 12: Charles the First actually stayed there. You can get a
Speaker 12: room for under two hundred pounds. There's no spot and
Speaker 12: there's only nine rooms, but you can have a glass
Speaker 12: of wine in the gardens watch the world go by.
Speaker 12: It's in a very cool posteria clad manor house like
Speaker 12: thing of dark woods everywhere, like it's allegedly haunted. I
Speaker 12: stayed there. I hadn't see a ghost. Side, just had
Speaker 12: a nice time. But I love the history of all
Speaker 12: the old English manor houses.
Speaker 11: I think that's especially for like Americans and we want
Speaker 11: to go to the English countryside. That's what we want
Speaker 11: to say. In an old house, it feels very old.
Speaker 11: Definitely see a ghost and.
Speaker 12: Have a last one much older than America. And it's
Speaker 12: only like less than an hour away as well.
Speaker 3: Okay, so let's say, Sarah, if you're not necessarily into
Speaker 3: the interested in the idea of the countryside, what about
Speaker 3: the seaside? What are the options for that?
Speaker 12: I mean, like, heads up, it might be cold and rainy.
Speaker 3: You're not exactly South Florida vibes.
Speaker 12: Yeah, there's this place I like called number forty two
Speaker 12: in Margate that's a five minutes away from the Turner
Speaker 12: Art Museum and it's absolutely gorgeous. They have free snacks
Speaker 12: from a little retrofitted ticket booths. You can get popcorn
Speaker 12: ice cream at midnight, which I'm into. And it's like, yeah,
Speaker 12: beach side vibes, like open terraces, just a really chill
Speaker 12: experience less than an hour and a half from London.
Speaker 1: I want to go back to London for a minute
Speaker 1: if we can. Because we before we kicked off, we
Speaker 1: highlighted a little bit of this Netflix, Netflix's new real
Speaker 1: estate show Buying London. Chris. First of all, I mean,
Speaker 1: I got to tell you I kind of love these
Speaker 1: high end real estate shows. I just love watching them
Speaker 1: wherever the heck they are.
Speaker 11: I do too, I really. I mean there's there's one
Speaker 11: in New York that's really just called open House New York,
Speaker 11: which are just like nice houses and then selling Sunset
Speaker 11: and shows like that out of Hollywood are like really
Speaker 11: more about the drama and the outfits, and that can
Speaker 11: be fun.
Speaker 1: It can always made up and everybody's manicured perfect.
Speaker 11: Oh yeah, yeah, yeah, exactly. They show up. It's for
Speaker 11: the office like that at yeah at nine am, just
Speaker 11: like me, but not you know that isn't like a
Speaker 11: thing that has really translated into the London like UK
Speaker 11: and Europe versions of that of that show. It can
Speaker 11: it's a little more like peaceful. And so Sarah has
Speaker 11: a story about a new show that's kind of trying
Speaker 11: to combine the drama with the high end real estate.
Speaker 3: Okay, so Sarah, let's talk a little bit about that,
Speaker 3: and let's start with just who this guy, Daniel Daggers is,
Speaker 3: because if there's somebody with a perfect name for high
Speaker 3: powered real estate, ate up. But yeah, Daniel Daggers was
Speaker 3: literally born for this job.
Speaker 2: He was.
Speaker 12: Yeah, it was actually delightful in person though he got
Speaker 12: maybe a little bit of a villain edit on TV,
Speaker 12: but a very nice guy in person. And I met
Speaker 12: him at his offices which were not the ones that
Speaker 12: you saw on Netflix. Actually Netflix got another office with
Speaker 12: better light to film in.
Speaker 1: Of course, some secrets, some secrets from the show shocking,
Speaker 1: it's not really tho, Yeah, I thought.
Speaker 3: It was reality TV.
Speaker 11: Yeah, so what kind of range of houses are they selling? Like,
Speaker 11: what are we talking about?
Speaker 12: He called himself mister super Prime, which in London means
Speaker 12: ten million pounds and above. So the upper achealons of
Speaker 12: love in real estate. Thank you know Mayfair mansions kind
Speaker 12: of sprawling, notting Hill manors. On the show, they're selling
Speaker 12: one that you used to belong to Samahayak because she's
Speaker 12: not on the show. But I guess she stayed there
Speaker 12: or lived in it once. Wait certainly didn't have enough
Speaker 12: closet real estate for her. She needed a bigger closets,
Speaker 12: which is why she sold it.
Speaker 1: I totally get that.
Speaker 10: Totally get that.
Speaker 1: Wait. He has sold more than five and a half
Speaker 1: billion dollars of real estate, including what one hundred and
Speaker 1: twenty million dollar mansion two.
Speaker 12: Yes, that was one of the biggest real estate transactions
Speaker 12: of the year a few years ago, that one.
Speaker 3: Do you talk a little bit about how he ended
Speaker 3: up having his own firm, because there's a little bit
Speaker 3: of story there.
Speaker 12: There is a little bit of a story there, and
Speaker 12: this is under NDA, so he wouldn't give me details.
Speaker 3: About it, but it means, you know, it's good.
Speaker 12: He worked at Night Frank which Perch twelve years, being
Speaker 12: a partner there in their super prime division, and allegedly
Speaker 12: posted a picture of a client's house that was publicly
Speaker 12: available on Instagram, where he has thousands and thousands of
Speaker 12: followers and this personally wasn't happy about it, so he
Speaker 12: departed Night Frank. But his social media superstardom has made him,
Speaker 12: you know, a Nutflix star, so it all paid off
Speaker 12: in the end, so he started his own firm after
Speaker 12: leaving Night Frank.
Speaker 11: And that range of real estate though, hasn't been doing
Speaker 11: super well lately, right.
Speaker 12: No, it hasn't. It's a bit of a slowdown. People
Speaker 12: with the mega mansions have been having to cut up
Speaker 12: to thirty percent in order to get a sale, even
Speaker 12: in the spring, which is traditionally a very busy time
Speaker 12: in London. It's been called a little lackluster. Big deal
Speaker 12: aren't really happening at the same pace they used to be.
Speaker 1: Yeah, it's pretty shocking. I feel like some of the
Speaker 1: I mean, this is a fun story and a you
Speaker 1: know personality, no doubt about it, and a reality show
Speaker 1: on you know, super Lux real Estate, but it's also
Speaker 1: talking about some of the prices when you come to
Speaker 1: London properties. You say, in January, Prime Central London properties
Speaker 1: still below ninety percent of their asking price for the
Speaker 1: first time since early twenty nineteen. That's some data from
Speaker 1: lun Rest. But I mean, tim, we've talked about this, right,
Speaker 1: some of the high end luxury markets around the world,
Speaker 1: especially like in London, have really it's quite a market correction.
Speaker 3: You know, it's different depending on the market you're talking about.
Speaker 3: We certainly are still seeing some pretty high end stuff
Speaker 3: go in other.
Speaker 8: Parts of the world.
Speaker 3: But Sarah, I'm curious if that matters to the audience
Speaker 3: that's intended for this, Like, does do they care what's
Speaker 3: going on in the real estate market or is that
Speaker 3: reflected in the show? Does it make the show different?
Speaker 4: You know what?
Speaker 12: I'm not sure they do. I mean I asked Santel
Speaker 12: Daggers of Alpus and he said, you know, maybe it's
Speaker 12: great time for buyers. Now people will watch the show
Speaker 12: and get in contact with him, you know, super rich
Speaker 12: in other places who want a London how So, I'm
Speaker 12: not sure it matters to the audience who were also
Speaker 12: there for you know, all the fun outfits, the drama,
Speaker 12: the scripted tours inside houses they might never see.
Speaker 1: Hey listen, Chris, if we're in London, we got to
Speaker 1: go to the West End?
Speaker 11: Yes you do? And Sarah sees, I mean, I love
Speaker 11: to go to London, And Sarah tells me what shows
Speaker 11: to see. And you know, every season she does a
Speaker 11: preview of what showed, not just in the West End,
Speaker 11: but every kind of show that you should see. And
Speaker 11: she did a spring preview a little while ago, and
Speaker 11: she's going to do a summer preview coming up. And
Speaker 11: last week she saw one of the big shows, which
Speaker 11: was Romeo and Juliette.
Speaker 12: Yeah, starring Spider Man himself, Tom Holland. It was his
Speaker 12: first time on the stage as an adult. He did
Speaker 12: Billy Elliott as a kid, but it was his first
Speaker 12: time back as a grown up.
Speaker 11: And the tickets sold out how.
Speaker 12: Fast two hours.
Speaker 11: Yeah, it's a limited run, but it was a very,
Speaker 11: very hot commodity. And it's this director, Jamie Lloyd, who
Speaker 11: did Sunset Boulevard, who has this kind of like very
Speaker 11: stark modern approach to theater where they use camera work
Speaker 11: and stuff, and that his huge production of Sunset Boulevard
Speaker 11: is coming to New York with Nicole Scherzinger from The Pussycadult,
Speaker 11: So you guys should all see it.
Speaker 12: Kind of it's incredible. One of the best things I've
Speaker 12: seen sin is a Boulevard.
Speaker 3: Speaking of a hot commodity, we got to talk about
Speaker 3: the picture of Dorian Gray because this sounds amazing, especially
Speaker 3: for fans of Succession.
Speaker 12: God, yeah, Sarah Snook is incredible coming to Broadway next year,
Speaker 12: and that's a one woman show and I don't know
Speaker 12: how she does it, Like it's really a tour de
Speaker 12: force and just like pure athleticism for an actor, and
Speaker 12: that uses a lot of camera work too to show
Speaker 12: basically every angle of her face as the portrait age is,
Speaker 12: and she plays everyone in the play in the book.
Speaker 3: Is she going to be on Broadway?
Speaker 1: Yes, yeah, twenty twenty five.
Speaker 11: I know, I got to get tickets throughout Apples thing.
Speaker 1: Yeah, like do it now? Yeah, twenty six rolls right,
Speaker 1: one woman's show. It's unbelievable and she's won awards for it.
Speaker 1: Just one last thought in terms of any other shows
Speaker 1: that you want to highlight from that's going on in
Speaker 1: London right now.
Speaker 12: Wow, Operation Mints me to still on for big fans
Speaker 12: of it's actually a quite funny musical comedy about a
Speaker 12: World War two intelligence operation, which doesn't sound like it
Speaker 12: would make for a good comedy. You're like, okay, right,
Speaker 12: but it's mostly the funniest thing I've ever seen.
Speaker 1: Well, like yeah, and I can't see that. It did
Speaker 1: win right a New Musical.
Speaker 12: Best Musical at Olivia. This is the British Tonys.
Speaker 3: Sarah, if you ever want to do like a job switch,
Speaker 3: just come here Coinker Bloomberg Business Week. I'll be luxury reporter.
Speaker 11: It sounds pretty Sarah did do a job switch. She
Speaker 11: was a TV producer that wrote for us in her
Speaker 11: spare time, and she was so good at it that
Speaker 11: they transferred her to our team. So, Tim, if you
Speaker 11: start writing for pursuits, I'm just saying you know where
Speaker 11: I live.
Speaker 1: All right, that's going to leave it. Hey, listen, guys,
Speaker 1: thank you so much, really appreciate it.
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