WEBVTT - Sheryl Sandberg's Legacy at Meta and the Big Bet on Crypto 0:00:02.240 --> 0:00:05.560 From the heart of where Innovation, money and power Collie 0:00:06.360 --> 0:00:10.879 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.960 --> 0:00:26.600 Emily Jay. Hi'm Emily Chang in New York and this 0:00:26.640 --> 0:00:29.320 is Bloomberg Technology. Coming up in the next hour. He 0:00:29.320 --> 0:00:32.520 helped introduce RYL Samberg to Mark Zuckerberg and the rest, 0:00:32.680 --> 0:00:35.360 they say is history. I'll be joined by Roger mcnaman 0:00:35.400 --> 0:00:38.040 to talk about that meeting, Samberg's legacy and where the 0:00:38.040 --> 0:00:42.480 company goes from here. Plus he sat on Facebook's board 0:00:42.600 --> 0:00:45.600 for seven years, He's known Samberg for more than twenty. 0:00:45.720 --> 0:00:48.640 My exclusive conversation with Don Graham on Samberg's role in 0:00:48.680 --> 0:00:52.640 building the company and where Meta goes from here? And 0:00:52.760 --> 0:00:57.200 inflation keeps raging, no relief in sight according to President 0:00:57.240 --> 0:00:59.959 By This as the market and tech and cryptos dock 0:01:00.200 --> 0:01:03.440 in particular, keep whip sawing. We will be joined by 0:01:03.440 --> 0:01:06.800 Sebastian Malaby, author of a new book, The Power Law, 0:01:07.040 --> 0:01:10.280 about whether Silicon Valley can hold onto its role as 0:01:10.280 --> 0:01:13.400 a center of power. Later in the hour, why do 0:01:13.400 --> 0:01:15.399 you want to stay on Samberg's exit now from met 0:01:15.480 --> 0:01:17.320 end what it means for the company going forward. I'm 0:01:17.360 --> 0:01:21.400 joined by Jasmine Emberg principal analysts for Insider Intelligence. She 0:01:21.560 --> 0:01:26.319 covers social media and influencers look jasmine from a business perspective. 0:01:26.840 --> 0:01:30.440 Controversy about the business model aside. How confident are you 0:01:30.480 --> 0:01:35.720 that Meta can keep the money machine running without Cheryl Samberg? Well, 0:01:35.760 --> 0:01:37.520 I think you know. First of all, we have to 0:01:37.640 --> 0:01:42.039 address how powerful um Sandberg was able to build um 0:01:42.120 --> 0:01:45.679 Meta's ad business When she started In two thousand and eight, 0:01:45.760 --> 0:01:49.480 we at the market are now Insider Intelligence estimated that 0:01:49.520 --> 0:01:52.520 Facebook's worldwide ad revenues were just two hundred and fifty 0:01:52.680 --> 0:01:56.440 million dollars. Now, within two years that figure had grown 0:01:56.480 --> 0:01:59.520 to one point three billion dollars, and flash forward to today, 0:01:59.720 --> 0:02:02.440 Meta is the second largest digital ad seller in the 0:02:02.480 --> 0:02:06.080 world after Google. I mean, it's safe to say that 0:02:06.440 --> 0:02:09.160 the new leadership certainly has their work cut out for 0:02:09.200 --> 0:02:13.520 them to continue growing um metas business. But um It's 0:02:13.560 --> 0:02:16.320 still in a pretty good place despite all of the 0:02:16.680 --> 0:02:19.560 headwinds that it is facing right now. One Bloomberg take 0:02:19.600 --> 0:02:22.520 put it like this, Cheryl Sandberg is leaving Facebook at 0:02:22.520 --> 0:02:26.400 a perilous moment. What is your outlook on how fast 0:02:26.720 --> 0:02:31.160 Facebook and Instagram and WhatsApp can continue to grow while 0:02:31.200 --> 0:02:34.720 the company is making this massive pivot to the metaverse, 0:02:35.520 --> 0:02:38.240 and you're absolutely right. I mean, Meta is in the 0:02:38.280 --> 0:02:42.520 process of undergoing this massive shift towards the metaverse, and 0:02:42.680 --> 0:02:45.120 you know it is going to be something that is 0:02:45.240 --> 0:02:48.120 you know, pretty far down the line. It is still 0:02:48.360 --> 0:02:51.800 years and years away for the metaverse to become a reality. 0:02:51.960 --> 0:02:55.440 And right now there are some really immediate challenges that 0:02:55.560 --> 0:02:58.600 Facebook has to grapple with and Instagram has to grapple 0:02:58.680 --> 0:03:01.600 with as well. That as an ad revenue slowdown, that 0:03:01.840 --> 0:03:05.440 is a slowdown in user growth, it is also slowdown 0:03:05.560 --> 0:03:09.359 in time spent on on Facebook. Now Instagram of course, 0:03:09.360 --> 0:03:11.560 has been able to pick up the flack for Facebook 0:03:11.560 --> 0:03:14.480 for quite some time. That's proving to be more difficult. 0:03:14.840 --> 0:03:16.760 Um So it's going to require quite a bit of 0:03:16.800 --> 0:03:20.919 discipline and innovation to continue growing all of Meta's platforms. 0:03:21.400 --> 0:03:26.680 Jasmine Hamburg, Insider Intelligence principal analyst. Thank you, Jasmine. Obviously 0:03:26.720 --> 0:03:30.080 lots remains to be seen. Now Sandberg might never have 0:03:30.200 --> 0:03:32.840 been at Facebook if it wasn't for my next guest. 0:03:32.840 --> 0:03:36.520 He was an early investor and a mentor to Mark Zuckerberg. 0:03:36.680 --> 0:03:40.600 Here's Roger McNamee describing how he helped broker their partnership. 0:03:41.600 --> 0:03:43.480 It's Sheryl Sandberg. Have you ever met her? He said, 0:03:43.520 --> 0:03:45.120 I think I sugar hands once at a party I 0:03:45.160 --> 0:03:48.360 don't know at all, and I said, I want to 0:03:48.400 --> 0:03:50.200 try to get her to come and talk to you 0:03:50.240 --> 0:03:53.640 about being your chief operators somewhere, And next thing you know, 0:03:53.720 --> 0:03:56.920 she goes there is the chief operating officer, at which 0:03:56.960 --> 0:03:59.520 point basically they didn't need me anymore. I mean, she's 0:03:59.520 --> 0:04:01.840 way smart, and I am I mean one of the 0:04:01.880 --> 0:04:04.880 most I mean one of the most capable people I 0:04:04.920 --> 0:04:09.040 have ever met in any way. Joining me now Roger mcmee, 0:04:09.160 --> 0:04:11.920 co founder of Elevation Partners and author of the book 0:04:12.040 --> 0:04:16.599 Zucked Waking Up to the Facebook Catastrophe. So, Roger, we 0:04:16.640 --> 0:04:19.839 all know that your feelings about Facebook have changed over 0:04:19.880 --> 0:04:22.640 the years. I'm so curious what your first thought was 0:04:22.680 --> 0:04:26.640 when you saw the news that Cheryl was leaving. I 0:04:26.760 --> 0:04:32.440 take no joy in Sheryl Sandberg's resignation is CEO of Meta. 0:04:33.360 --> 0:04:38.400 For me, it's a really complicated situation because Cheryl was 0:04:38.480 --> 0:04:40.479 for many years a friend of mine and somebody I 0:04:40.520 --> 0:04:44.599 advised when she worked in the Clinton White House. She 0:04:44.760 --> 0:04:48.160 was responsible for introducing me to my future business partner, 0:04:48.200 --> 0:04:51.560 bono and for that, I'll always be incredibly grateful, and 0:04:51.600 --> 0:04:54.680 I tried to reciprocate. She came out to Silicon Valley 0:04:54.760 --> 0:04:57.640 in two thousand one, hung out in my office for 0:04:57.640 --> 0:05:01.320 a few weeks, and I introduced her to John Dore, 0:05:01.600 --> 0:05:04.200 who was on the board at Google, which began the 0:05:04.240 --> 0:05:06.919 process of her going to work at Google and creating 0:05:07.400 --> 0:05:11.560 the add engine behind AdWords, which obviously put Google on 0:05:11.600 --> 0:05:15.120 the map economically. So Cheryl and I were really close, 0:05:15.240 --> 0:05:17.800 and when she made it clear to me that she 0:05:17.920 --> 0:05:21.000 was thinking about leaving Google, I thought that Facebook was 0:05:21.040 --> 0:05:23.240 the right place for her, and so I talked to 0:05:23.320 --> 0:05:27.240 Mark about it for months, and you know, he definitely 0:05:27.279 --> 0:05:29.560 wanted a strong number two, and I think he was 0:05:29.560 --> 0:05:31.760 trying to figure out in his own mind what factors 0:05:31.760 --> 0:05:35.200 would really matter. But Cheryl had I thought two things 0:05:35.200 --> 0:05:38.839 that really were decisive. The experience at Google was the 0:05:38.880 --> 0:05:41.760 closest you're ever going to get to the business problem 0:05:41.800 --> 0:05:45.320 faced at Facebook. And secondly, you know, she had a 0:05:45.360 --> 0:05:48.520 maturity and an experience both in the political and the 0:05:48.560 --> 0:05:53.080 business realm that I thought would really complement mark strengths. 0:05:53.160 --> 0:05:56.039 And keep in mind, I think when she went there, 0:05:56.240 --> 0:05:59.440 they had fewer than a hundred million users. And so 0:05:59.800 --> 0:06:02.360 it was for me at least not possible at that 0:06:02.400 --> 0:06:06.160 time to imagine the kind of harms that eventually came 0:06:06.160 --> 0:06:09.000 out of Facebook, in part because the business model that 0:06:09.040 --> 0:06:12.120 did the harm wouldn't be invented for another five years. 0:06:12.200 --> 0:06:15.200 And so it you know, I look back on it 0:06:15.240 --> 0:06:17.240 and I go, oh my god, what could have been? 0:06:17.800 --> 0:06:20.920 I mean, Cheryl is so talented, you know, she could 0:06:20.960 --> 0:06:23.760 have both made a very successful company at Google and 0:06:23.880 --> 0:06:27.280 been a hero for democracy and public health. And how 0:06:27.320 --> 0:06:30.400 could she have done that? How could she have done that? Roger, Well, 0:06:30.600 --> 0:06:35.720 let's take a few simple examples. So in Facebook was 0:06:35.800 --> 0:06:39.159 implicated by the United Nations in an ethnic cleansing that 0:06:39.200 --> 0:06:42.080 took place in mean Mar, a country in Asia in 0:06:42.120 --> 0:06:45.760 which Facebook had no employees on the ground, had almost 0:06:45.800 --> 0:06:48.920 no employees that spoke the language, and they certainly had 0:06:48.960 --> 0:06:51.480 no expertise in need of the politics or the culture 0:06:51.480 --> 0:06:54.440 of the country. And it became clear that the product 0:06:54.480 --> 0:06:58.760 was being used by bad actors to instigate in ethnic cleansing. 0:06:59.200 --> 0:07:02.000 And different company, a different group of people might have 0:07:02.000 --> 0:07:03.839 taken that as a warning. It might have said, you know, 0:07:04.279 --> 0:07:06.960 we really shouldn't be doing business in countries where we 0:07:07.160 --> 0:07:09.800 don't have an economic interest in having people on the ground, 0:07:09.800 --> 0:07:11.720 where we're not willing to invest in the language, where 0:07:11.760 --> 0:07:14.720 we're not willing to invest in the culture. That kind 0:07:14.760 --> 0:07:18.120 of thing is super oubes. The FBI warren Facebook in 0:07:18.160 --> 0:07:22.800 early that Q and On was a very dangerous extremist 0:07:22.840 --> 0:07:25.760 group and they weren't Facebook. That there was a lot 0:07:25.800 --> 0:07:29.600 of recruiting going on on Facebook, and Facebook ignored it. 0:07:29.680 --> 0:07:33.360 Between twenty nineteen Spring of twenty nineteen the spring, about 0:07:33.360 --> 0:07:38.280 a one year period, roughly two million people were radicalized 0:07:38.320 --> 0:07:41.680 into Q and On on Facebook. And again that's based 0:07:41.720 --> 0:07:44.080 on Facebook admitting that there were at least three million 0:07:44.120 --> 0:07:48.160 members of Q and on groups by and internal Facebook 0:07:48.600 --> 0:07:51.840 reports released by the whistle Blower that showed that's sixty 0:07:52.120 --> 0:07:55.080 percent of the time when people joined an extremist group 0:07:55.080 --> 0:07:59.120 on Facebook, it's just Facebook recommended, and so they were 0:07:59.120 --> 0:08:01.320 responsible for that. Those are things that a different group 0:08:01.360 --> 0:08:03.320 of people I would have said, you know what, we 0:08:03.360 --> 0:08:05.400 don't want to be involved in that, because if they've 0:08:05.440 --> 0:08:07.640 taken action on Q and on, they might have prevented 0:08:07.640 --> 0:08:11.600 the insurrection, because the people who participated the insurrection have 0:08:11.720 --> 0:08:14.760 been radicalized into Q and at first, and again, all 0:08:14.800 --> 0:08:18.080 of these things are about the culture of the company. 0:08:18.360 --> 0:08:21.200 Do you prioritize the well being of the people who 0:08:21.280 --> 0:08:24.440 use your product? Do you prioritize the well being of 0:08:24.480 --> 0:08:27.960 the people affected by your product? And the reality was 0:08:29.200 --> 0:08:33.160 they viewed shareholder interest as the only thing that matters, 0:08:33.880 --> 0:08:36.560 and so when it came time to thinking about their 0:08:36.679 --> 0:08:39.360 users or the other people affected by it, that just 0:08:39.480 --> 0:08:43.000 wasn't a consideration. And it's that's certainly not unique to Facebook. 0:08:43.160 --> 0:08:45.679 What was unique to Facebook was the impact that it 0:08:45.800 --> 0:08:48.800 could have on those people, either in a pandemic or 0:08:48.840 --> 0:08:52.040 in an election cycle, or related to some kind of 0:08:52.280 --> 0:08:57.400 extreme it. So clearly you think her legacy is complicated, 0:08:57.440 --> 0:09:00.320 and I think many people would agree with you. Let's 0:09:00.320 --> 0:09:03.920 talk about where Facebook or Meta is now going. I 0:09:04.000 --> 0:09:06.520 asked her about this pivot to the metaverse and whether 0:09:07.120 --> 0:09:09.400 having to create a whole new business model or evolve 0:09:09.480 --> 0:09:12.400 Facebook's current business model for a future that doesn't yet 0:09:12.440 --> 0:09:15.000 exist was one of the reasons she's leaving. Take a 0:09:15.040 --> 0:09:18.360 listen to what she told me when we spoke. We 0:09:18.400 --> 0:09:21.400 have a current business, which is our current apps connecting 0:09:21.559 --> 0:09:24.120 customers to businesses, and I think there's a lot of 0:09:24.160 --> 0:09:27.520 opportunity there right right now, but also over the long run, 0:09:27.880 --> 0:09:32.319 and then the metaverse is a much longer term business opportunity, 0:09:32.400 --> 0:09:34.680 and it's going to take some of the same form 0:09:34.760 --> 0:09:36.600 and that I believe we will be a place and 0:09:36.640 --> 0:09:38.560 then the metaverse will be a place where businesses and 0:09:38.600 --> 0:09:41.319 consumers connect. But I think the exact form that takes 0:09:41.320 --> 0:09:43.319 in something that will be figured out over the next 0:09:43.480 --> 0:09:49.440 number of you a much longer term. How optimistic are 0:09:49.480 --> 0:09:54.560 you about Meta realizing this future of the metaverse, turning 0:09:54.559 --> 0:09:57.679 it into a business, And what do you think the 0:09:57.720 --> 0:10:00.880 company looks like without Cheryl Sandberg as it moves towards 0:10:00.960 --> 0:10:06.679 this new, but you know, very uncertain future. Emily, I 0:10:06.679 --> 0:10:13.160 think Facebook's near term is complicated enormously by Apple's application tracking, 0:10:13.200 --> 0:10:18.520 transparency and whatever things that follow that, which give iPhone 0:10:18.600 --> 0:10:21.360 users the ability to opt out of having their data 0:10:21.400 --> 0:10:24.520 shared with Facebook and others. Facebook's already said that that's 0:10:24.520 --> 0:10:26.800 going to be a ten million, ten billion dollar hit 0:10:26.840 --> 0:10:29.560 to revenue this year, and it wouldn't shock me if 0:10:29.600 --> 0:10:31.360 the number got bigger than that, because I don't think 0:10:31.360 --> 0:10:36.400 Apple's done. Secondly, Instagram, which has really been supporting the 0:10:36.440 --> 0:10:40.240 growth of the business, is under assault from TikTok, and 0:10:40.360 --> 0:10:46.080 I do think that TikTok is essentially locking Instagram into 0:10:46.160 --> 0:10:48.680 the group of users it has today by siphoning off 0:10:48.960 --> 0:10:53.040 all the new entrants into social media, and that's really 0:10:53.080 --> 0:10:56.000 bad for Facebook's growth long term. And then you get 0:10:56.040 --> 0:10:58.839 to the metaverse, where I think Facebook's current concept of 0:10:58.920 --> 0:11:03.880 the metaverse is insane. I mean, to my mind, virtual 0:11:03.920 --> 0:11:08.040 reality is a brilliant idea, and if you focus narrowly, 0:11:08.040 --> 0:11:11.200 if you say focus on video games, for example, the 0:11:11.280 --> 0:11:15.480 opportunities are unlimited. But the way Facebook's looking at it, 0:11:15.520 --> 0:11:18.760 where they're essentially going to try to replace reality with 0:11:18.840 --> 0:11:24.960 a virtual reality across every possible doll mean, entertainment, work, sports, 0:11:25.000 --> 0:11:29.320 the whole nine yards. To me, that's just that's never 0:11:29.360 --> 0:11:32.080 gonna work. And the amount of money they're spending on 0:11:32.120 --> 0:11:35.439 it today, I just think it's certifiably insane. If I 0:11:35.480 --> 0:11:38.960 were a shareholder, I would be incensed about this, because 0:11:39.760 --> 0:11:41.959 it's not that the metaverse is a terrible idea, it's 0:11:42.000 --> 0:11:44.800 that their idea of the metaverse is a terrible idea. 0:11:45.000 --> 0:11:47.800 And I don't think it matters how long they take. 0:11:47.960 --> 0:11:50.480 They're just by the time they get there, it won't 0:11:50.480 --> 0:11:54.720 be interesting. Roger McNamee Elevation Partners. Always great to have 0:11:54.800 --> 0:11:57.160 you here, Roger, thank you for sharing your thoughts with us. 0:12:05.320 --> 0:12:08.320 Now onto a Bloomberg exclusive. We've learned that Tiger Global's 0:12:08.360 --> 0:12:11.720 hedge fund has lost a whopping fifty this year, and 0:12:11.720 --> 0:12:13.760 in a letter to investors, the firm is vowing to 0:12:13.800 --> 0:12:17.079 try and earn that money back. Joining his now Sebastian Malaby, 0:12:17.160 --> 0:12:19.680 Senior Fellow at the Council on Form Relations, for more 0:12:20.120 --> 0:12:22.640 on this and the wider venture capital landscape. He is 0:12:22.679 --> 0:12:25.959 also the author of The Power Law, Capital and the 0:12:26.080 --> 0:12:28.680 Making of the New Future, a book on the rise 0:12:28.679 --> 0:12:31.920 of VC and Silicon Valley. Sebastian, so great to have 0:12:32.080 --> 0:12:34.120 you with us. I want to start on this Tiger 0:12:34.160 --> 0:12:37.240 Global news because you have pointed out that Tiger Global 0:12:37.280 --> 0:12:41.480 has been writing massive checks for companies with very little revenue. 0:12:41.559 --> 0:12:45.240 How big a problem has this been in Silicon Valley. 0:12:45.679 --> 0:12:48.160 I think it has been a problem. It's come with 0:12:48.200 --> 0:12:51.320 a lot of weak governance, right because the Tiger Global 0:12:51.400 --> 0:12:56.040 model included writing a huge check to somebody who was 0:12:56.040 --> 0:12:59.640 already running a Unicorn. That person, of course, because they've 0:12:59.679 --> 0:13:02.719 created Unicorn, is a bit imperious and then on top 0:13:02.760 --> 0:13:04.080 of that, you say, we don't want to go on 0:13:04.080 --> 0:13:08.080 your board. We're not going to exercise governance, and we 0:13:08.200 --> 0:13:10.120 defer to you because you were the founder and you're 0:13:10.160 --> 0:13:12.920 so great, and I think that's a good way of 0:13:13.040 --> 0:13:17.120 overseeing companies basically decide I'm not going to oversee them. 0:13:17.120 --> 0:13:19.959 And that's why you had this governance vacuum for unicorns. 0:13:20.040 --> 0:13:23.160 That's why you see companies like we Work or Uber, 0:13:23.240 --> 0:13:26.720 which actually started out pretty well in their early phases, 0:13:27.240 --> 0:13:30.360 go off the moral and commercial rails because nobody was 0:13:30.440 --> 0:13:33.480 monning the store on the board. So what's your wead 0:13:33.520 --> 0:13:36.120 on this massive market correction and how it will impact 0:13:36.240 --> 0:13:41.080 venture capital and private companies. Well, clearly it's bound to 0:13:41.160 --> 0:13:45.400 effect these late stage growth investors like Tiger Glogle first 0:13:45.440 --> 0:13:48.680 because they were investing late, so the exit that was 0:13:48.720 --> 0:13:51.920 anticipated was only a year away. That's in the public markets. 0:13:51.920 --> 0:13:55.440 Of the public markets correct by like the nurse Back 0:13:55.480 --> 0:13:59.600 has done this year, of course, your late stage privates 0:13:59.600 --> 0:14:01.679 are going to go down with it. The second thing 0:14:01.760 --> 0:14:05.079 is that the cost of capital matters when you're writing 0:14:05.080 --> 0:14:07.040 a check for a hundred million bucks, right if you're 0:14:07.080 --> 0:14:09.560 doing early stage VC, you're writing a ten million dollar check. 0:14:10.440 --> 0:14:12.400 It doesn't matter so much what the interest rate is, 0:14:12.440 --> 0:14:15.480 but it is material when it gets to these very 0:14:15.520 --> 0:14:18.640 big checks the Tiger Global is writing. So they've faced 0:14:18.679 --> 0:14:22.720 the brunt of the correction. They've announced that they're going 0:14:22.760 --> 0:14:25.720 to move into doing earlier stage investing, do more seed 0:14:25.760 --> 0:14:28.800 and so forth. That's obviously a smart pivot if they 0:14:28.880 --> 0:14:31.240 know how to do seed, because it is a different discipline. 0:14:31.720 --> 0:14:34.960 And then the question for the broader venture capital businesses, 0:14:35.440 --> 0:14:38.280 how does this ripple down the stack? And it doesn't 0:14:38.320 --> 0:14:42.240 mean that Series C valuations go down a lot, because 0:14:42.720 --> 0:14:44.800 Tiger Global is no wanting to not wanting to pay 0:14:44.880 --> 0:14:47.800 quite so much. In Seriously, if serious C goes down, 0:14:47.840 --> 0:14:50.000 does that mean Serious A goes down? And there's a 0:14:50.040 --> 0:14:53.520 certain point, Emily where there's a problem because the cost 0:14:53.600 --> 0:14:58.080 of hiring engineers is ultimately set by Google. If Google 0:14:58.160 --> 0:15:01.000 is going to continue paying a lot, then the startups 0:15:01.040 --> 0:15:03.760 have to pay a not to get good engineers. And 0:15:03.960 --> 0:15:06.360 if that price is not reset the price of talent, 0:15:07.080 --> 0:15:10.400 then you know, a small adventure capital check in a 0:15:10.520 --> 0:15:12.800 Series A is going to make it difficult for the 0:15:12.840 --> 0:15:16.200 company to work. Now, your book tells a riveting story 0:15:16.200 --> 0:15:18.160 of the history of venture Capital, which you'll have to 0:15:18.200 --> 0:15:21.920 read if you want to learn more. You argue that 0:15:22.000 --> 0:15:24.600 Silicon Valley and venture capital is the main reason that 0:15:24.640 --> 0:15:27.280 Silicon Valley is Silicon Valley. How confident are you that 0:15:27.440 --> 0:15:32.120 other Silicon Valleys can emerge or are emerging elsewhere, whether 0:15:32.200 --> 0:15:34.920 it is Boston or Austin, or New York or London 0:15:35.400 --> 0:15:37.760 or China. So I think the story up to around 0:15:37.760 --> 0:15:41.280 two thousand five is basically the Silicon Valley venture capitalists 0:15:41.280 --> 0:15:45.000 had a special source that other people didn't understand. They 0:15:45.040 --> 0:15:47.680 had this power law approach where they were quite happy 0:15:47.720 --> 0:15:50.440 to write eight checks out of ten that would end 0:15:50.520 --> 0:15:53.840 up losing money, and then a couple would have these 0:15:53.960 --> 0:15:57.200 extreme right tail power law returns that would make up 0:15:57.240 --> 0:15:59.640 for allal losers. And although that sounds a bit obvious now, 0:16:00.360 --> 0:16:03.880 before around two thousand five, vcs in Boston didn't really 0:16:03.880 --> 0:16:07.280 get it, vcs in New York mostly probably didn't get 0:16:07.280 --> 0:16:09.960 it either, and certainly nowhere else in the world, maybe 0:16:10.000 --> 0:16:13.200 with the exception of Israel, did anybody get it. And 0:16:13.240 --> 0:16:16.960 then in two thousand five American vcs from Silicon Valley 0:16:16.960 --> 0:16:19.920 went to China and they moved into India. The whole 0:16:20.000 --> 0:16:23.160 Israel e Consistent took off south the station began, and 0:16:23.240 --> 0:16:26.320 during code we've seen it spread to Austin, Miami and 0:16:26.320 --> 0:16:30.920 so forth. My belief is that the fundamental mindset of 0:16:31.080 --> 0:16:35.480 Silicon Valley venture capital is now spreading pretty much everywhere, 0:16:36.080 --> 0:16:40.080 and that as it arrives in different geographies, it transforms 0:16:40.520 --> 0:16:44.200 the attitude entrepreneurship. People take more risk, and you start 0:16:44.280 --> 0:16:48.280 up cultures which hitherto had been kind of concentrated. Cilicon 0:16:48.360 --> 0:16:51.120 Valley is going to be everywhere. Now. We've been covering 0:16:51.120 --> 0:16:54.440 the big story of Cheryl Samberg leaving Meta, and I've 0:16:54.440 --> 0:16:57.120 heard so many vcs over the years say we're just 0:16:57.160 --> 0:16:59.680 trying to find the next Facebook. Facebook story of course 0:16:59.720 --> 0:17:02.200 has got a lot more complicated. But what is going 0:17:02.240 --> 0:17:04.800 to drive the next cycle of venture capital and the 0:17:04.880 --> 0:17:07.639 quest to find the next Facebook or maybe it's a 0:17:07.760 --> 0:17:11.840 next something else? Well, you know, Facebook was amazing because 0:17:11.920 --> 0:17:16.359 it was this software company that scaled unbelievably fast. And 0:17:16.480 --> 0:17:20.680 the characteristic of both sas and consumer software is that 0:17:20.720 --> 0:17:23.760 you don't need very much capital to have an enormous 0:17:23.840 --> 0:17:27.280 value creation effect, right, And if you're looking at something 0:17:27.359 --> 0:17:32.919 that can do an equivalent miracle, the most likely frankly 0:17:33.040 --> 0:17:35.880 is crypto, right. I know we've had this big correction recently, 0:17:36.400 --> 0:17:38.879 but if you think of the story of unite swap okay, 0:17:39.800 --> 0:17:42.600 a guy called Haydn is in his apartment in New 0:17:42.680 --> 0:17:46.200 York City and he gets laid off from a engineering 0:17:46.280 --> 0:17:50.160 job at Siemens, and then he starts to write code 0:17:50.240 --> 0:17:53.800 because his flatmate, his housemate is is somebody who works 0:17:53.800 --> 0:17:58.200 for Ethereum, and he creates this automatic market maker which 0:17:58.240 --> 0:18:02.160 goes on the Ethereum blockchain. And this individual, pretty much 0:18:02.240 --> 0:18:06.600 as an individual creates a unicorn by himself. I mean, 0:18:06.640 --> 0:18:10.639 that's even more amazing than Instagram, which was people creating 0:18:10.640 --> 0:18:13.600 a unicorn. So I think if you're asking specifically, what 0:18:13.760 --> 0:18:17.120 can do a Facebook style value creation with enormous leverage 0:18:17.560 --> 0:18:20.280 on a small number of talented people, I think it's 0:18:20.320 --> 0:18:26.160 crypt We will be watching if it is. Indeed. Sebastianality, 0:18:26.280 --> 0:18:29.000 senior fellow at the Council on Foreign Relations, author of 0:18:29.040 --> 0:18:32.520 a new book, Power Law. Please check it out. Thanks Sebastian. 0:18:32.880 --> 0:18:44.639 We'll have much more head this this blue work a 0:18:44.680 --> 0:18:47.320 few other stories we continue to watch. Ford is investing 0:18:47.359 --> 0:18:51.679 three point seven billion dollars in factories across three midwestern 0:18:51.760 --> 0:18:54.520 US states to pump out more electric cars and traditional 0:18:54.800 --> 0:18:58.800 gas fueled cars, and a sweeping expansion that will create 0:19:00.040 --> 0:19:03.560 in union jobs. Five four plants will be expanded to 0:19:03.600 --> 0:19:06.639 proce more hot sellers like the electric F one fifty 0:19:06.760 --> 0:19:09.560 lightning pickup, and roll out new models, including a new 0:19:09.600 --> 0:19:14.000 battery powder commercial car. Plus. The crypto business, run by 0:19:14.040 --> 0:19:17.240 billionaire brothers Cameron and Tyler Winklevoss, is making its first 0:19:17.280 --> 0:19:20.720 ever job cuts. Gemini Trust is slashing ten percent of 0:19:20.720 --> 0:19:24.520 its staff as trading across the industry plunges. In a 0:19:24.560 --> 0:19:27.360 memo obtained by Bloomberg, the brothers blame the job called 0:19:27.440 --> 0:19:30.880 so what they called Crypto Winter. Last year, Gemini said 0:19:30.880 --> 0:19:32.920 it raised four million dollars in a round of funding 0:19:32.920 --> 0:19:36.040 that valued the company at seven point one billion dollars. 0:19:37.520 --> 0:19:41.000 Coming up, my exclusive conversation with former Facebook board member 0:19:41.160 --> 0:19:44.399 Don Graham on Cheryl Sandberg's departure and what he thinks 0:19:44.680 --> 0:19:47.320 is next for a woman he's known for more than 0:19:47.400 --> 0:20:18.280 twenty years. He joins us, next, this is Bloomberg. Welcome 0:20:18.280 --> 0:20:20.480 back to bloomber Technology. I Emily Chang in New York. 0:20:20.880 --> 0:20:24.679 Shares of the electric truckmaker Nicola rising Bloomberg reporting the 0:20:24.800 --> 0:20:28.960 latest twist in the story of the company's founder, Trevor Milton, 0:20:29.200 --> 0:20:31.360 who had to resign as chair last year. I mean 0:20:31.400 --> 0:20:34.960 regulatory probes voted against the company at its annual meeting 0:20:35.000 --> 0:20:37.840 to issue more stock are ed Ludlow broke that story 0:20:38.240 --> 0:20:41.640 and has all the details on what it means. Ed. Yes, 0:20:41.800 --> 0:20:45.240 So the proposal the annual general meeting was to include 0:20:45.240 --> 0:20:49.160 the shares increase the shares outstanding from six d million 0:20:49.320 --> 0:20:52.240 to eight hundred, meaning down the line Nikola could sell 0:20:52.280 --> 0:20:56.720 equity to raise money. Now, the biggest shareholder, the former chairman, 0:20:57.040 --> 0:21:01.359 the founder, Trevor Milton, according to sources, voted against that measure, 0:21:01.359 --> 0:21:04.160 and it's really hard to understand why. On the one hand, 0:21:04.200 --> 0:21:07.320 he wouldn't want to dilute his own holdings and diminish 0:21:07.359 --> 0:21:10.399 the value of his holdings. On the other, voting against 0:21:10.400 --> 0:21:13.160 that could inhibit the company from raising money, which means 0:21:13.240 --> 0:21:15.760 the company suffers, and down the line the shares full. Oh, 0:21:15.800 --> 0:21:17.640 there he is in the screen. We've all been wondering 0:21:17.880 --> 0:21:20.240 where he is because he faced his trial next month. 0:21:20.280 --> 0:21:24.760 You'll remember, and Emily accused of deceiving investors and exaggerating 0:21:24.760 --> 0:21:27.639 about the company's technology and claims he made about the 0:21:27.640 --> 0:21:31.520 company's performance. What's also interesting is a lot of retail 0:21:31.520 --> 0:21:34.320 investors are really into this stock. So the other problem 0:21:34.400 --> 0:21:36.480 that Nicola had it it's a GM and one of 0:21:36.520 --> 0:21:39.600 the reasons they had to adjourn it is because nobody voted. 0:21:39.840 --> 0:21:42.560 They needed a majority of the outstanding stock to vote 0:21:42.560 --> 0:21:45.119 on the clause to pass it. But even though Trevor 0:21:45.119 --> 0:21:48.240 Milton voted no, they still didn't get enough shareholders to 0:21:48.320 --> 0:21:51.000 vote generally speaking, So this is a stock there's not 0:21:51.160 --> 0:21:53.600 fed as badly as others years. Today it's getting back 0:21:53.640 --> 0:21:56.159 on its feet, trying to get over the ghost of 0:21:56.160 --> 0:21:58.919 Trevor Milton. But this was an interesting roadblock and a 0:21:58.920 --> 0:22:02.280 twist in the story that we probably didn't expect. All right, 0:22:02.960 --> 0:22:05.040 thanks for the update. I want to get back now 0:22:05.080 --> 0:22:08.440 to the impending departure of Cheryl Samberg at Facebook now 0:22:08.520 --> 0:22:11.240 met US chief operating Officer. This is a role she's 0:22:11.280 --> 0:22:14.120 held for the last fourteen years, growing the company into 0:22:14.160 --> 0:22:16.440 what it is today. I spoke with her ahead of 0:22:16.440 --> 0:22:18.520 the announcement and she told me how she came to 0:22:18.560 --> 0:22:21.239 the decision and how she feels about the company as 0:22:21.320 --> 0:22:25.000 she leaves it. This was a decision I made that 0:22:25.040 --> 0:22:27.520 I did not come too lightly, And it really is 0:22:27.560 --> 0:22:30.000 about how I will spend my time, not how much 0:22:30.000 --> 0:22:32.000 I believe in the company. I believe in the company, 0:22:32.320 --> 0:22:35.320 but as much as I ever did, and staying on board. 0:22:35.800 --> 0:22:38.120 And I really have complete confidence in the key Mark 0:22:38.160 --> 0:22:39.720 and I have built. I think they're going to do 0:22:39.880 --> 0:22:43.040 a great job building the future. Or accompanied us a 0:22:43.080 --> 0:22:45.040 huge part of my life and a huge part of 0:22:45.080 --> 0:22:49.359 my heart joining me now, Donald Graham. He served on 0:22:49.400 --> 0:22:51.760 Facebook's board for seven years. He was also the lead 0:22:51.760 --> 0:22:54.480 independent director when the company went public, and he's known 0:22:55.040 --> 0:22:57.920 Cheryl Samberg and Mark Zuckerberg since the early two thousands. 0:22:58.040 --> 0:22:59.960 He's also the former publisher, of course, of the y 0:23:00.000 --> 0:23:03.920 Shington Post and chair of Graham Holdings Down. So great 0:23:03.960 --> 0:23:06.679 to have you with us. Thank you for joining us today. 0:23:07.160 --> 0:23:09.720 Tell us about that Chryl Sandberg you met all those 0:23:09.760 --> 0:23:12.600 years ago in two thousand one, and what you make 0:23:12.760 --> 0:23:17.040