Speaker 1: This is Bloomberg business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 2: We've officially wrapped up the month of November, and the
Speaker 2: health of the US consumer is in focus during the
Speaker 2: all important holiday shopping season. Well ahead this hour, we'll
Speaker 2: speak with the founder and CEO of payments platform Chime
Speaker 2: on meeting the needs of millions of Americans who are
Speaker 2: living paycheck to paycheck, and our Bloomberg Business Week cover
Speaker 2: story explores how unprepared many of us are for AI's
Speaker 2: next frontier, especially when it comes to our kids. All
Speaker 2: of that to come, We begin with the story that
Speaker 2: made us stop for a moment this past week. Charlie Munger,
Speaker 2: the Alter Ego sidekick and foyle to Warren Buffett for
Speaker 2: almost sixty years as they transformed Berkshire Hathaway from a
Speaker 2: failing textile maker into an empire, has died. He was
Speaker 2: ninety nine. He passed away on Tuesday at a California hospital,
Speaker 2: according to a company's statement in which Warren Buffett said
Speaker 2: that quote, Berkshire Hathaway could not have been built to
Speaker 2: its present status without Charlie's inspiration, wisdom, and participation. Tim
Speaker 2: and I spoke with Bloomberg News reporter Noah Bouhier, who
Speaker 2: covered and wrote about Monger's passing, and Bill Smead, the
Speaker 2: founder and CIO of Smeed Capital Management and a longtime
Speaker 2: Berkshire investor.
Speaker 1: I wrote a.
Speaker 3: Letter to Buffett probably five years ago, just thanking him
Speaker 3: for how incredibly generous that him and Manger have been
Speaker 3: with all of us. I mean, it literally changed our lives.
Speaker 4: What do you mean by that?
Speaker 2: Yeah?
Speaker 3: Oh, by communicating the discipline that they practiced. They shared
Speaker 3: why they were doing what they're doing all these years
Speaker 3: in the writing, in the annual meetings, stay there taking
Speaker 3: questions for six hours all the way up, way up
Speaker 3: into their nineties. It's like a gold mine of wisdom.
Speaker 3: I used to get irritated because I kind of wish
Speaker 3: they would restrict the questions to better questions, because as
Speaker 3: the years went by, there were a lot of goofy
Speaker 3: questions that came.
Speaker 4: Up because sometimes they got some goofy answers, which were fun.
Speaker 1: Yeah, but.
Speaker 3: Here was this incredible resource, right. Charlie Munger was the
Speaker 3: Solomon of our era. He was the wisest man in
Speaker 3: the investment business. He was the what he was a
Speaker 3: cal Tech grad, Harvard law educated, started a law firm
Speaker 3: in Los Angeles, had a successful career in real estate,
Speaker 3: successful career in making common stock choices, and the right
Speaker 3: hand guide to the most successful investment selector and asset
Speaker 3: allocator of all time. I mean he is, he is.
Speaker 3: You know, we just admired him so much. And then,
Speaker 3: of course we admired him immensely because he'd say exactly
Speaker 3: what he was thinking and didn't really care very much
Speaker 3: Bill who he might have fended the process.
Speaker 4: You mentioned that you've been doing this for over forty years.
Speaker 4: What are some lessons that you've incorporated from Charlie Munger
Speaker 4: over these decades into the way that you manage portfolios
Speaker 4: and you allocate assets.
Speaker 3: Yeah, when we're talking to people, I'm here in New
Speaker 3: York talking to some possible new customers, and we tell
Speaker 3: them when it comes to value people, we hold our
Speaker 3: winners to a fault because compounding is the eighth wonder
Speaker 3: of the world. So if you can find a business,
Speaker 3: let's just right off the top of our head, pick
Speaker 3: Occidental Petroleum, who Munger and Buffett started buying in the
Speaker 3: last year and a half or two years. They're generating
Speaker 3: massive free cash flow, they're paying down debt with it,
Speaker 3: but then they're also buying backstock. So, like Buffett says,
Speaker 3: over the years, if it's a company generating high returns
Speaker 3: on equity, high free cast flow, buying back their stock,
Speaker 3: he ends up owning a larger and larger and larger
Speaker 3: part of the business as the years go by. That's
Speaker 3: what he did with Coke, That's what he did in
Speaker 3: the Iraq Express, That's you know what he did with
Speaker 3: a lot of different companies and holding your winners. The
Speaker 3: fault is a key component of alpha. As I explained
Speaker 3: to people, you buy a stock at thirty and pay cash,
Speaker 3: the worst thing happened is it goes to zero. You
Speaker 3: lose thirty points of alpha. If you buy a stock
Speaker 3: at thirty and it goes to ninety and you sell
Speaker 3: it it goes to two ten, you lose one hundred
Speaker 3: and twenty points. And Buffett Monger taught that to people
Speaker 3: as a powerful thing. It's it's much better to get
Speaker 3: a less spectacular company that you can hold all the
Speaker 3: way through a ten or fifteen times your money than
Speaker 3: it is a spectacular company that you might make five
Speaker 3: times in five years, but you've got to be smart
Speaker 3: enough to sell it and go to another project.
Speaker 2: Well, and you're you're you know something. I want to
Speaker 2: ask you a little bit more too, about what Charlie
Speaker 2: Munger was to Warren Buffett, what he what he brought out,
Speaker 2: and Warren Buffett having said that, I want to bring
Speaker 2: Noah Bouhier into this because you know, Noah, it's one
Speaker 2: of those things where you think, as we're hearing from Bill,
Speaker 2: you know, these are both brilliant men, successful men, and
Speaker 2: would have been on their own, but something about them
Speaker 2: together brought out even so much more.
Speaker 5: Yeah, I think that's a that's a critical point here,
Speaker 5: is there. The combination of talents that they they they
Speaker 5: brought to bear really was was deeply important in the
Speaker 5: evolution of Berkshire. The other thing, just just speaking as
Speaker 5: a journalist, the thing that I always found so incredibly
Speaker 5: amazing about Charlie Munger was his directness and his willingness
Speaker 5: to speak, his mind, even if his opinion wasn't necessarily
Speaker 5: a popular one. You know, as a as a as
Speaker 5: a business reporter and someone writing about investing, you you
Speaker 5: always knew that Charlie was not just going to give
Speaker 5: you the piffy quote, but something that actually had some
Speaker 5: real substance behind it. And I think that's, you know,
Speaker 5: in large part, what has resonated with a lot of
Speaker 5: investors over time. I mean, people would go One of
Speaker 5: the things that's underappreciated about Charlie Munger is is that
Speaker 5: deep into his nineties, people would go to Los Angeles
Speaker 5: to hear him speak at the annual meeting of a
Speaker 5: small publishing company called The Daily Journal. This was Buffett
Speaker 5: had nothing to do with this thing. They would just
Speaker 5: go to hear Munger alone. And I remember the first
Speaker 5: time I went to this thing, that were maybe one
Speaker 5: hundred or two hundred people, and you know, three or
Speaker 5: four years later word had gotten out and a couple
Speaker 5: thousand were going. I mean, you have to understand, Charlie
Speaker 5: Munger was respected in his own right. It wasn't you know,
Speaker 5: He's often known for his affiliation with with Buffett, but
Speaker 5: he really did have his own.
Speaker 3: Loyal following to back up Noah on that. One of
Speaker 3: our favorite things is when it comes to climate change.
Speaker 3: He just said, why don't we just build a sea wall?
Speaker 1: Right?
Speaker 3: That was his opinion. It's like, okay, if it's real,
Speaker 3: let's do what they did in Amsterdam and just build
Speaker 3: a sea wall in California and New York. And that's
Speaker 3: so simple and logical and less expensive. But that's Charlie Munger.
Speaker 3: It was always common sense, always won. The difference between
Speaker 3: the two men is Warren. Warren wants to die without
Speaker 3: any enemies. He has more of an urge to be liked.
Speaker 3: It's a wonderful man, and he wants to be liked,
Speaker 3: whereas Charlie could care less if he's liked, right, he
Speaker 3: wants to share wisdom, share truth.
Speaker 2: What was it like from the different meetings you went
Speaker 2: to and just kind of seeing them up on stage,
Speaker 2: things that kind of stood out for you.
Speaker 3: Well, there's hardly any better comedy routine that's ever been done,
Speaker 3: the back and forth. Of course, Munger had lots of
Speaker 3: the singers, but Buffett had plenty himself. And yeah, they
Speaker 3: played off fantastically. It was I had a next door
Speaker 3: neighbor that was four years ahead of me in school.
Speaker 3: And I had no brothers, three sisters, and he was
Speaker 3: one of four brothers. And here are extremely close friends.
Speaker 3: But he's four years older than me in the same
Speaker 3: way that that Munger was six or seven years older
Speaker 3: than six years older than Warren. But yet you know,
Speaker 3: we met and we were finishing each other sentences. And
Speaker 3: that's the way these guys were. They were finishing each
Speaker 3: other sentences. They'd say the first part of the sentence
Speaker 3: and they didn't have to continue because the other guy
Speaker 3: already knew what the rest of the sentence was going
Speaker 3: to be.
Speaker 2: Which is that kind of relationship.
Speaker 4: We know, Bouhire, I'm so glad you're with us because
Speaker 4: we've been reading from your obituary NonStop for the last
Speaker 4: hour here. And you know, to Bill's point about this
Speaker 4: idea of common sense and not you know, not always
Speaker 4: needing to be liked. You mentioned this some of his donations,
Speaker 4: and this one's this one's at the top of mind
Speaker 4: from him because it's it's relatively recent, forty five person
Speaker 4: dorm on UCSB's campus, which actually got a lot of
Speaker 4: people interested in dormitory architecture who didn't think that they
Speaker 4: would actually be interested in dormitory architecture. But you know,
Speaker 4: here Munger is trying to solve this problem of student housing,
Speaker 4: and he got a lot of blowback to this idea
Speaker 4: and ultimately they canceled it.
Speaker 5: What happened, Yeah, I mean, look, in his later years,
Speaker 5: Munger used these donations that he gave the universities to
Speaker 5: play architect I mean, he was deeply, deeply interested in architecture,
Speaker 5: and you know, he had some pretty unconventional ideas that
Speaker 5: I think really bothered people and it became its own
Speaker 5: you know, subplot. It's all right, But like you have
Speaker 5: to understand, for Munger, he was a incredibly wide widely
Speaker 5: read person. He wasn't as narrowly interested in investing and
Speaker 5: you know, how to make money. Obviously he spent a
Speaker 5: lot of time doing that, but he had an interest
Speaker 5: outside of it. The other thing I wanted to add
Speaker 5: and the stakes within a slightly different direction. But like
Speaker 5: you know, for all that Munger would you know, sit
Speaker 5: up on stage and sort of act as the skold
Speaker 5: and the curmudgeon next to Buffet. He did have a
Speaker 5: you know, a generous heart, and you know, when you
Speaker 5: talk to people who spent time with Charlie. You know
Speaker 5: he was He was a deeply nice and caring person
Speaker 5: and you know, on some level this sort of curmudgeon
Speaker 5: stance he would take on stage and in public sometimes
Speaker 5: was was a bit of an act, but like you know,
Speaker 5: it helped him make his points.
Speaker 2: So, Bill, how do you think about you know, Berkshire
Speaker 2: hath the way going forward? They've obviously thought about succession
Speaker 2: and there's Augy, Jane and Greg, but I do think
Speaker 2: about you know, Warren without Charlie, yes, and what the
Speaker 2: impact that might be.
Speaker 6: Yeah, So.
Speaker 3: Charlie and Warren have set a team together to to
Speaker 3: kind of come in. They've got two talented stock pickers
Speaker 3: in the wings. I'm guessing that this will be when
Speaker 3: when they begin to emerge at the annual meeting. Greg
Speaker 3: Abel runs the operating businesses, and Todd Combs and Ted
Speaker 3: Westlers are running about thirty billion dollars other important that's
Speaker 3: who we think bought the home builders for example, because
Speaker 3: it was smaller quantities than buff Advice, and so that
Speaker 3: will cause their emergence. But Charlie's acerbic common sense and sensibility,
Speaker 3: there's just not going to be any replacing that talent.
Speaker 3: He was a genius in that uh his uh he he.
Speaker 3: He would look at the situation and hit it only
Speaker 3: with the best logic right, each situation, regardless of who
Speaker 3: might be offended by the logic of it. So he'd
Speaker 3: quote scripture and and then he'd support abortion rights right. So,
Speaker 3: but logically, you know, he was trying to solve a
Speaker 3: problem with money. And the architecture thing just brings back
Speaker 3: to mind that he graduated from Harvard Law School and
Speaker 3: cal Tech and was an architect and and he was
Speaker 3: the most he was the renaissance man.
Speaker 4: Kind of different sides of the brain.
Speaker 3: Oh, just unbelievable mixture of mental model talent, just amazing,
Speaker 3: uh he he. His family called him a book of
Speaker 3: with legs because he's always reading. Our podcast is called
Speaker 3: a book with legs because my son Cole is a
Speaker 3: gigantic Charlie Munger fan, and that's what that's what we
Speaker 3: call the podcast. We interview authors of books, so we
Speaker 3: call it a book with legs.
Speaker 2: And he's quoted in Noah's story. Noah. We'll obviously be
Speaker 2: talking this all week and then some another thought, you know,
Speaker 2: as you were putting together Charlie's story, you know, for
Speaker 2: for Bloomberg, what jumps.
Speaker 5: Out for you here, Well, I think you know, to
Speaker 5: your point of what's next for Berkshire, it's a fundamentally bigger,
Speaker 5: different place than you know where he and Buffett started.
Speaker 5: So while you know, a mini levels manger is not replaceable,
Speaker 5: there are a lot of things that he and Buffett
Speaker 5: pioneered together that that you know, there's a lot of
Speaker 5: there's a lot of that's been written, there's a lot
Speaker 5: that has been and passed on based in the way
Speaker 5: that these guys did thing. And you know, again, Berkshire
Speaker 5: is a huge company now with different needs, but a
Speaker 5: lot of the ways that Munger and Buffett think about
Speaker 5: the company are you know, certainly going to live on.
Speaker 3: Right exactly what Munger said in late twenty twenty one
Speaker 3: that this was the largest financial euphori episode in his career,
Speaker 3: which was seventy five years. And then at the annual
Speaker 3: meeting this year he said, I really don't think stocks
Speaker 3: are going to do very well the next ten years,
Speaker 3: and then Buffett, I love this. Buffett chimes in he goes, well,
Speaker 3: if I was running smaller amounts of money, I think
Speaker 3: I still think I could do really well, which was
Speaker 3: heartening to us because our five billion dollars is smaller
Speaker 3: amounts of money.
Speaker 7: So you're like, okay, okay, we got a chance.
Speaker 2: Priceless and thank you for coming back. Bill Smeeaed. We've
Speaker 2: talked to you over the years. We've heard you talk
Speaker 2: about Berkshire, Warren Buffett and Charlie Munger. So great to
Speaker 2: get you to wag and be well. Bill Smeaed of
Speaker 2: Smeed Cappel Investment and of course our no boohire read
Speaker 2: his story on Charlie Munger. It's on the terminal and
Speaker 2: at Bloomberg dot com. Noah, thank you so much of
Speaker 2: Bloomberg News. This is Bloomberg Radio.
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Speaker 2: Some big news and financial services we talked about Apple
Speaker 2: and Goldman Sachs credit card partnership might be coming to
Speaker 2: an end. Apple recently sending a term sheet to the
Speaker 2: financial giant that would be a first step towards severing
Speaker 2: the contract. This is going to a person familiar with
Speaker 2: the matter. Apple, you know this right among those, But
Speaker 2: this is one of the big players looking to disrupt
Speaker 2: financial services by offering its own high yield savings account product,
Speaker 2: financing a credit card, Apple cash, and more. Yep, they
Speaker 2: know fintech disruption. There's a lot out there.
Speaker 8: Yeah.
Speaker 4: Well, someone else who's looking at disrupt financial services is
Speaker 4: Chris Britt, founder and CEO of the privately held fintech Chime.
Speaker 4: Chime offers consumers checking accounts with no monthly fees. They've
Speaker 4: got savings accounts, products such as secured credit card that
Speaker 4: helps users build credit and more. Chime says it has
Speaker 4: quote millions of members and back in twenty twenty one, Carol,
Speaker 4: when Chime last raised money, it was valued at twenty
Speaker 4: five billion dollars.
Speaker 2: Well, Chris joins us on Zoom from San Francisco. The
Speaker 2: company officially to launching the Chime scholars Foundation, which we
Speaker 2: will get to in a moment. Chris, great to have
Speaker 2: you here with Tim and myself. Hope you're well. Tell
Speaker 2: us a little bit about the environment for your business,
Speaker 2: because it sounds like you guys have a very front
Speaker 2: row seat if you will, to what's going on with
Speaker 2: the consumer right now.
Speaker 9: Yeah, sure, thanks for having me in the thrill to
Speaker 9: announce the foundation. But in terms of the consumer trends
Speaker 9: that we're seeing, Yeah, you know, we serve millions of consumers,
Speaker 9: and I think the.
Speaker 7: Relationship that we have with.
Speaker 9: Our members is is that they use Chime as their
Speaker 9: primary bank account and primary way that they do their
Speaker 9: day to day spending. So we actually do, you know,
Speaker 9: see a lot of we do have a front row
Speaker 9: seat to transaction activity balances. You know, I'd say we're
Speaker 9: starting to see a little bit of a weakening among
Speaker 9: the consumer that we see. You know, we've seen balances
Speaker 9: declined slightly, probably down about five percent year over year,
Speaker 9: but at the same time, we're still seeing spending that's
Speaker 9: been really solid.
Speaker 7: It's up you know, six seven percent year over year.
Speaker 9: And again, you know, our members mostly use Chime for
Speaker 9: their everyday sort of non discretionary purchases, so in many ways,
Speaker 9: we're insulated from you know, you know, ups and downs
Speaker 9: of the economy because people use our cards for their
Speaker 9: everyday you know, grocery transactions and daily habits that you know,
Speaker 9: really help you know, fuel our business.
Speaker 4: Chris, are you seeing their spending patterns change, like what
Speaker 4: they're actually spending money on this year versus what they
Speaker 4: were spending money on in twenty twenty twenty twenty one
Speaker 4: in twenty twenty two. Has that mix changed.
Speaker 7: Oh for sure.
Speaker 9: I mean we're seeing more and more just a normalization
Speaker 9: of the economy and where spend is happening. So you're
Speaker 9: seeing things like ride share at uber and Lyft is
Speaker 9: up pretty, you know, pretty significantly year over year. You're
Speaker 9: seeing more spending for you know, concerts and restaurants and
Speaker 9: and and those sorts of activities, and I you know,
Speaker 9: it's it's a well needed, you know, sort of normalization
Speaker 9: of you know, just getting back to post post COVID
Speaker 9: transaction activity and that's been really healthy, you know. At
Speaker 9: the same time, you know, we still see unemployment rates
Speaker 9: that are really really low. So and you know, we
Speaker 9: serve consumers that make up to about one hundred thousand
Speaker 9: dollars is just generally the sweet spot.
Speaker 7: That we serve.
Speaker 9: And those consumers can generally get jobs and they sign
Speaker 9: up for Chime accounts, they get direct deposit, and they
Speaker 9: use us for everyday transaction.
Speaker 7: So you know, I wouldn't say our business is countercyclical.
Speaker 9: But it's very resilient to you know, be able to
Speaker 9: withstand you know, ups and downs in the economy.
Speaker 4: Chris, are you because people use this for direct reposit
Speaker 4: for their salaries, for their paychecks, are you seeing are
Speaker 4: you seeing people lose jobs? Are you seeing them jump
Speaker 4: around more, jump around less? What can what can your
Speaker 4: data tell us about job hopping and the strength of
Speaker 4: the economy for those chime users?
Speaker 9: Well, look as you as you move down the income spectrum,
Speaker 9: there certainly is more turnover and more change in how
Speaker 9: and where people work and receive direct deposits. So we
Speaker 9: naturally we always see a little bit more turnover. You know,
Speaker 9: then you might if if the consumers that you served
Speaker 9: made hundreds of thousands of dollars a year a year,
Speaker 9: But like I said, it's still very healthy people. Can
Speaker 9: you know, there's jobs out there for people, they're readily
Speaker 9: available and and a lot of people have you know,
Speaker 9: multiple sources of income. That trend hasn't that's been pretty consistent.
Speaker 9: I would say, you know, where people might have a
Speaker 9: little bit of gig gig work for a side hustle,
Speaker 9: but still you know, the primary wages you know come
Speaker 9: from a corporation or you know office job that they have.
Speaker 7: You know, people are particularly.
Speaker 9: In our in our portfolio of members that we serve,
Speaker 9: they're just amazing, amazing people that are resilient and you know,
Speaker 9: can can go out and hustle and and you know,
Speaker 9: get the work and get the job that they that
Speaker 9: they need to help their families and move their financial
Speaker 9: lives forward.
Speaker 2: Hey, Chris, for those who might not be familiar though,
Speaker 2: with time, just remind us how it all kind of
Speaker 2: works and how what is the business of time and
Speaker 2: how you guys make money.
Speaker 9: So Chime exists to unite everyday people to help unlock
Speaker 9: their financial progress. And we do that by starting with
Speaker 9: offering a core checking account, a deposit account that you know,
Speaker 9: China is not a bank. We partner with primarily two
Speaker 9: fd I C insured banks that hold the deposits. What
Speaker 9: we're really good at is creating you know, really easy
Speaker 9: to use, intuitive, low fee services and a tech you know,
Speaker 9: end to end tech technology stack and and sort of
Speaker 9: operate all aspects of the consumer interaction, primarily through an app.
Speaker 9: So we don't you know, have the cost burden of
Speaker 9: a heavy you know, sort of branch infrastructure we're able
Speaker 9: to operate at a very low cost structure. And then
Speaker 9: what we do is we deliver to these to these
Speaker 9: members that we serve fee free checking accounts, so there's
Speaker 9: no there's no fee associated with you know, having the
Speaker 9: core underlying depositive account. We give them access to their
Speaker 9: paycheck a few days early. We give them free overdraft
Speaker 9: services and other services to help them with liquidity, and
Speaker 9: we also help them with credit building. So that combination
Speaker 9: of services has really resonated with millions of people.
Speaker 2: That rely on But you make money by getting a
Speaker 2: fee on what every transaction that they do off that account.
Speaker 2: Is that correct?
Speaker 9: You know, we have a few sources of income, but
Speaker 9: that is a very large part of our of our
Speaker 9: revenue is the interchange that is earned when consumers use
Speaker 9: their Chime cards for their everyday purchases. And what we
Speaker 9: like about that model is that it's very aligned with
Speaker 9: the consumer. Right, we only monetize when they're engaged with
Speaker 9: us and using the card for everyday transactions. We've been
Speaker 9: very careful careful to design the business to not profit
Speaker 9: from their misfortune, which is often times the way, you know,
Speaker 9: larger institutions make money off of this segment. So yes,
Speaker 9: we earn money off interchange, and it's really allowed us
Speaker 9: to unlock free banking for millions of people who otherwise
Speaker 9: we'll be paying huge amounts of monthly freeze draft fees,
Speaker 9: you name it.
Speaker 4: Let's talk about interchange fees. The FED is proposing lower
Speaker 4: caps on those interchange fees. This is your business. How
Speaker 4: concerned are you about this? Does that mean that you'll
Speaker 4: make less money if the FED does indeed go through
Speaker 4: with that proposal.
Speaker 9: Of course, well aware of the conversations happening in Washington
Speaker 9: around interchange. You know, none of the proposals being contemplated
Speaker 9: would have any direct impact on Chime or the banks
Speaker 9: that we that we partner with, so you know, we're
Speaker 9: monitoring it. It's sort of an age old discussion and debate.
Speaker 9: But at the end of the day, you know, interchange
Speaker 9: has been a huge positive for millions of people that
Speaker 9: suffer from, you know, paying outrageous levels of overdraft.
Speaker 7: Fees and monthly fees.
Speaker 9: And you know, like I said, that this interchange based
Speaker 9: business model has really been tremendously helpful for us to
Speaker 9: be able to disrupt this category.
Speaker 7: Look at look at the changes that have happened in overdraft.
Speaker 4: That's exactly where That's exactly where I wanted to go, Chris,
Speaker 4: because you guys were early to do to do this.
Speaker 4: You know, so many banks now though offer free online banking,
Speaker 4: no ATM fees, early direct deposits, no overdraft fees, something
Speaker 4: that you guys have been doing for years. How do
Speaker 4: you differentiate from those traditional banks that are now offering
Speaker 4: those services that you offer.
Speaker 9: Well, I think it's great that all those changes have happened.
Speaker 9: It's awesome for our country. It's awesome for people, you know,
Speaker 9: people in every state across across the country.
Speaker 4: What do we do.
Speaker 9: We have to keep innovating and push the envelope on
Speaker 9: the next service that's actually consumer friendly and actually help
Speaker 9: our members you know, move their financial lives ahead for
Speaker 9: themselves and for their families. So we certainly have more
Speaker 9: copy chat you know companies, you know, startup types. But
Speaker 9: also it's in many ways it's it's flattering that these
Speaker 9: big institutions now do advertising on getting paid early and
Speaker 9: and free overdraft. Note like I would say the overdrafts
Speaker 9: are the structure are friendlier, but you know there's still
Speaker 9: you know some gotchas, you know you, they may give
Speaker 9: you a little bit of extra grace period, but a
Speaker 9: lot of these institutions still aren't shy about being pretty
Speaker 9: aggressive on the on the fee schedule.
Speaker 2: Hey, Chris, just a few rapid business questions to wrap
Speaker 2: up the business part of our interview in three and
Speaker 2: sixty seconds. I want to ask you because we want
Speaker 2: to get to your foundation. We want to talk a
Speaker 2: little bit about your backstory. First of all, are you
Speaker 2: guys profitable?
Speaker 9: We have very attractive, highly profitable unit economics. We are
Speaker 9: not yet profitable, but that's a decision we've made.
Speaker 7: As a as a private company.
Speaker 2: Okay, will you be soon or that's not a goal,
Speaker 2: that's a part of it.
Speaker 9: We're not optimizing for profitabilit right now. We may actually
Speaker 9: be profitable in Q one, but it's not okay, it's
Speaker 9: not a stated goal. You know, we raise a large
Speaker 9: a round of financing in twenty one, so you know,
Speaker 9: we don't need to raise money again. But you know,
Speaker 9: we're feeling like there's an opportunity right now to continue
Speaker 9: to pursue our vision, which is to you know, be
Speaker 9: the number one market share company in terms of primary
Speaker 9: account relationships among consumers that make up to one hundred
Speaker 9: thousand dollars a year, and I think that's within reach
Speaker 9: for us over the next few.
Speaker 2: Years, which tells you a lot about the folks that
Speaker 2: you are reaching out to and help. Growth in users
Speaker 2: and how sticky if somebody is on the platform, do
Speaker 2: they stay with you?
Speaker 9: Oh yeah, I think that's if you were to, you know,
Speaker 9: in a nutshell describe what different differentiates Chime relative to
Speaker 9: other consumer fintech companies is just that it's the engagement.
Speaker 9: It's the primary account relationship that we enjoy with with
Speaker 9: millions of consumers. So the majority of people that that
Speaker 9: bank through the Chime app are using us as their
Speaker 9: primary every day.
Speaker 7: You know, transaction relationship and sort of way to manage
Speaker 7: their money.
Speaker 9: So yeah, it results in very high engagement, lots of
Speaker 9: transaction volume, and you know, for the business, extremely high
Speaker 9: our poo relationships with with our members, but in a
Speaker 9: way that's very aligned with.
Speaker 2: That, all right, and growth in users. Can you give
Speaker 2: us any kind of like year to year overgrowth.
Speaker 9: Oh yeah, I mean, you know, we're growing at a
Speaker 9: rate of you know, next year will grow well above
Speaker 9: of thirty percent. So I think in an environment where
Speaker 9: a lot of companies are you know, m a US
Speaker 9: or declining or flatlining a bit. You know, we are
Speaker 9: a real bright spot in that we're you know, growing
Speaker 9: at a at a nice clip right now.
Speaker 2: And just quickly, since you just did another funding round,
Speaker 2: any plans to go public anytime soon? I know this
Speaker 2: has been asked certainly in the past.
Speaker 7: Well, we did a funding around in twenty twenty one.
Speaker 7: That's been it's been a few years.
Speaker 9: But yeah, yeah, but look, we intend to be an independent,
Speaker 9: large public company. We've certainly you know, we've raised a
Speaker 9: lot of money and so we uh, you know, we
Speaker 9: want to make sure that we can do that for
Speaker 9: for our amazing investors and also for all of all
Speaker 9: the chimers that work here to support our members every day.
Speaker 9: So it's not something that we have planned on in
Speaker 9: the short term, but we're certainly about as IP or
Speaker 9: ip already as as you know a company could be,
Speaker 9: and were certainly of the scale to be able to
Speaker 9: to be a you know, a nice public company. I think,
Speaker 9: you know, we're going to wait and see how the
Speaker 9: the economy plays out and the stock market plays out
Speaker 9: over the course of you know, the first half of
Speaker 9: next year and figure out planes from there.
Speaker 4: Hey, Chris, I want to talk about the big news
Speaker 4: this week coming from Chime, the company announcing the Chime
Speaker 4: Scholars Foundation. I actually, you know, we've talked many times
Speaker 4: in the past, I didn't know your backstory. Give us just,
Speaker 4: you know, quick thirty seconds on your backstory and how
Speaker 4: that got you to launch a company like Chime, and
Speaker 4: then we'll get into the foundation.
Speaker 7: Yeah, you asked about public offerings.
Speaker 9: Well, this today is the public offering of Chimes Scholars Foundation.
Speaker 9: I'm so thrilled to announce it, and I appreciate you
Speaker 9: asking about my backstory. I actually wrote a little blog
Speaker 9: post about it too on the Chime website. But man,
Speaker 9: I was so lucky growing up. I grew up in
Speaker 9: Mount Vernon, New York, which is a sort of working
Speaker 9: class you know town, lived in an apartment building and
Speaker 9: my parents got divorced.
Speaker 7: My mom had to go to work and my dad
Speaker 7: wasn't around all the time.
Speaker 9: And by the grace of God, I had a neighbor downstairs.
Speaker 7: His name was Joe, and Joe used to look out
Speaker 7: for me.
Speaker 9: He made sure that I got to practice, did my homework,
Speaker 9: had some dinner, and we had so much fun. He
Speaker 9: became like a father figure, a grandfather, and really my
Speaker 9: best friend.
Speaker 7: And and why that's relevant to today's news is.
Speaker 9: That, you know, my mom, when the schools got pretty
Speaker 9: tough in my town, my mom decided to try to
Speaker 9: apply to a private school when I got in, but
Speaker 9: it was really difficult to pay for it, and Joe
Speaker 9: agreed to I mean, I had a scholarship, but still
Speaker 9: it was tough, and Joe.
Speaker 7: Agreed to pay for it.
Speaker 9: And then later in life, when I got into college,
Speaker 9: you know, neither of my parents had graduated from college,
Speaker 9: and I got into a great college, Tulane University. I
Speaker 9: got a scholarship there too, but again it was tough
Speaker 9: to make it all work, and Joe agreed to pay
Speaker 9: for you know, the remaining balance for me and I
Speaker 9: just you know that story, which probably sounds incredibly weird
Speaker 9: or lucky, it really was. And I think when I
Speaker 9: think about very Capua, Yeah, I mean, look, I think
Speaker 9: when I in ways that Chime could give back in
Speaker 9: some way. You know, I talked about our mission around
Speaker 9: unlocking financial progress. Higher education is the most powerful engine
Speaker 9: to allow for economic mobility. So it's very much brand
Speaker 9: aligned for us. Is what can we do to help
Speaker 9: people gain more access to education. Obviously, there's you know,
Speaker 9: lots of colleges and community colleges and different ways to
Speaker 9: get you know, post secondary education. But too often people
Speaker 9: are you know, saddled with tremendous amounts of debt and
Speaker 9: they start out life like really difficult starting place because
Speaker 9: you know, they may be sort of feel forced to
Speaker 9: go to a four year college, they've got a ton
Speaker 9: of debt, and the first you know, at of their
Speaker 9: professional lives are very difficult. So that's what we've tried
Speaker 9: to solve for with this nonprofit that we've started at
Speaker 9: Chime scholars Foundation. I think, you know, we're thrilled to
Speaker 9: announce it today. You know, we've already been in pilot
Speaker 9: for about a year. We've offered scholarships to over three
Speaker 9: hundred students. And one of the things that's really unique
Speaker 9: is that it's not just for four year university, it's
Speaker 9: also for community colleges, it's for vocational training, and you know,
Speaker 9: we're really optimizing for people that have the grit and
Speaker 9: the grind and people that we feel a high degree
Speaker 9: of confidence are going to see it through and get
Speaker 9: their degrees and move their financial lives for themselves and
Speaker 9: their family forward. And I think maybe you know, in
Speaker 9: addition to announcing the three hundred students, you know, the
Speaker 9: other announcement that I just wanted to highlight is Chime
Speaker 9: and our board of directors and investors have committed to
Speaker 9: allocate one percent of the equity of our company into
Speaker 9: this foundation to ensure that we can fund it for
Speaker 9: many years to come.
Speaker 2: Well, and I love it as you write, as we
Speaker 2: look at this release, you know, it's like everyday kids
Speaker 2: like you who have responsibilities at home, work hard, hustle,
Speaker 2: yearn for something more. It's not necessarily everybody who at
Speaker 2: a four point zero in terms of who you are
Speaker 2: providing this for, are possibly offering up. Thank you so much,
Speaker 2: Chris Brett, Happy holidays, have a good holiday season, Founder
Speaker 2: and chief executive officer of Chime.
Speaker 1: Right here on Bloomberg, you're listening to the Bloomberg Business
Speaker 1: Week Podcast. Catch us live weekday afternoons from three to
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Speaker 1: thirty Hi.
Speaker 2: Every now and then a story hits so hard it
Speaker 2: gives you the chills, and this is certainly one of them.
Speaker 2: It's about deep fake pornography images that have been digitally
Speaker 2: manipulated to depict an individual doing something they did not like,
Speaker 2: in this case, posing naked, and about a group of
Speaker 2: young women in a New York City suburb horrified to
Speaker 2: learn that their photographs had been manipulated and posted online,
Speaker 2: and they ultimately took matters into their own hands.
Speaker 4: It's the cover of the new issue of Bloomberg BusinessWeek.
Speaker 4: You can read the story now on the Blue Terminal
Speaker 4: and at bloomberg dot com slash BusinessWeek. The story by
Speaker 4: Bloomberg News investigative reporter Olivia Carville and a Bloomberg News
Speaker 4: cybersecurity reporter Margie Murphy, both of whom join us now.
Speaker 4: Olivia here in our Bloomberg Interactive Broker studio. Margie joins
Speaker 4: us from our San Francisco bureau. Margie, excuse me. Also,
Speaker 4: here's the editor of Bloomberg Business Week, Joe Weber here
Speaker 4: in our Bloomberg Interactive Broker Studio. Wow, Joel, how did
Speaker 4: this story get on your radar? Get on their radar?
Speaker 10: Olivia and Margy pitched it, and from the moment they
Speaker 10: brought the idea to us, we were mesmerized and then
Speaker 10: more honestly horrified, and we felt like it was a
Speaker 10: story that we had to do, and we needed to
Speaker 10: do it on the cover to make sure that the
Speaker 10: world found out about it, because it is a perhaps
Speaker 10: frightening sneak peek at the.
Speaker 4: Future and the lack of.
Speaker 10: Real common sense and laws about where generative AI might
Speaker 10: possibly take us. And the beginning of the story is
Speaker 10: like your worst nightmare, and Olivia, why don't you take
Speaker 10: us there?
Speaker 2: Because it's ultimately where this sort's about Cecilia.
Speaker 11: So the story starts in Levittown, Long Island, which is
Speaker 11: an interesting place to start. This is the birthplace of
Speaker 11: American suburbia, the first post War US suburb, and this
Speaker 11: group of teenage girls who had all attended the same
Speaker 11: high school discovered that their photographs that they'd posted on
Speaker 11: social media had been manipulated into deep fake pawn, that is,
Speaker 11: fake pornography created using deep learning models.
Speaker 2: Or artificial intelligence.
Speaker 11: And Cecilia Luke, who opens the story, discovered this while
Speaker 11: sitting in a car in a parking lot and a
Speaker 11: Strip Mall in Levittown, and as she's looking through this
Speaker 11: website that a friend had sent her who had also
Speaker 11: discovered the photos, she sees images that horrified, disgusted, really
Speaker 11: scared her. These are photos which showed her being digitally undressed,
Speaker 11: very graphic images. Content on the sex site included people
Speaker 11: posting about her being raped and murdered. In some of
Speaker 11: the cases the images, she was just a child. She
Speaker 11: was five years old. And she also saw photos of
Speaker 11: friends of hers who attended the same school. And it
Speaker 11: was that night New Year's Eve of twenty twenty that
Speaker 11: news of this website and these deep fake images really
Speaker 11: spread across the suburb in Long Island.
Speaker 2: Not them at all. In other words, those images obviously
Speaker 2: altered and they knew it, like they went through it,
Speaker 2: and they're.
Speaker 10: Like but not obvious to anyone else exactly. And that's
Speaker 10: where the horrifying part comes in.
Speaker 8: Go ahead, we yeah, I.
Speaker 11: Was gonna just say that for the woman now, because
Speaker 11: they're twenty two to twenty three. At the time, they
Speaker 11: were eighteen or nineteen years old. And the scariest thing
Speaker 11: was looking at these photos where they had been undressed
Speaker 11: and realizing that they look real enough that anybody else
Speaker 11: who sees them is going to believe it really actually
Speaker 11: is their bodies. Celia was looking at this nude image
Speaker 11: and knowing that the priests weren't hers, but also realizing
Speaker 11: that most people who saw this image would think that
Speaker 11: they were.
Speaker 2: So Margie, let's bring you into this. An incredible story,
Speaker 2: so not a problem. You call the police and you
Speaker 2: say this isn't me, and it's done, and they take
Speaker 2: it down. Right, It's that easy. I'm being sarcastic.
Speaker 12: Yeah, not quite at the moment. There's no federal law
Speaker 12: prohibiting deepfake pornography. So the challenge that these girls had were,
Speaker 12: you know, they were so incredibly brave. They did this
Speaker 12: investigation mostly on their own, figuring out exactly who had
Speaker 12: created these images of them, and they took them to
Speaker 12: the police, and there was very little legal recourse for
Speaker 12: them to get justice. And in fact, it was only
Speaker 12: after searching through everything that that Patrick carry the former
Speaker 12: classmate who've been posting these images. Looking through everything that
Speaker 12: he'd posted, they'd seen that he'd actually accidentally posted real
Speaker 12: child sexual abuse material, and that's what they got him on.
Speaker 12: It wasn't on the deep fake pornography at all, and
Speaker 12: that's an issue that's a frustration being felt by women
Speaker 12: around the world. Even though certain states in the US
Speaker 12: do have laws around deep fake pornography, it's just so
Speaker 12: patchwork across the US and internationally there are issues with
Speaker 12: the law as well because the technology has just advanced
Speaker 12: just at such a breakneck speed, just lawmakers haven't been
Speaker 12: able to keep up with it.
Speaker 10: What about the companies and the platforms on the AI front, like,
Speaker 10: what did we learn about what they can and can
Speaker 10: do or aren't willing to do?
Speaker 12: Margie right. So the issue with a lot of the
Speaker 12: technology that's around now and that from our reporting we
Speaker 12: saw was really popular for creating deep fake pornography and
Speaker 12: even child deep pornography. A lot of those tools are
Speaker 12: open source. So there's this kind of divide in Silicon Valley.
Speaker 12: You've got the developers who've created this really incredible image
Speaker 12: generation technology that you know, they want to be used
Speaker 12: for good, who believe that it should be kept out
Speaker 12: in the open for everyone to use and not gate
Speaker 12: kept by like big tech platforms who have typically provided
Speaker 12: services and you know, you might enter in a prompt
Speaker 12: and you get your image back, whereas with the open
Speaker 12: source technology, anyone can go and interact with the code,
Speaker 12: and therefore you can play with it. And even if
Speaker 12: a developer was to put a guardrail in place, like
Speaker 12: prohibiting adult content, it's relatively easy for someone to go
Speaker 12: in and change that. And so that's opened this Pandora's box.
Speaker 12: We've got all these open source technologies that even when
Speaker 12: a developer realizes a bit are being used for bad,
Speaker 12: the cats out of the bag and people are already
Speaker 12: exploiting it.
Speaker 4: Olivia. The story starts in Levittown. It's centered around Levittown,
Speaker 4: but it spans the globe. What happens in New Zealand,
Speaker 4: what's going on with a former police officer named Will Wallace.
Speaker 11: I think that was one of the most remarkable parts
Speaker 11: of reporting this story is that it really is a
Speaker 11: dual narrative. You have the girls in Leavittown investigating the
Speaker 11: predator who is posting images of them online on the
Speaker 11: sex site that an ex cop in New Zealand has
Speaker 11: discovered is already been posting images deep faked images of
Speaker 11: New Zealand women as well, and so he starts an
Speaker 11: investigation into the man behind this website. And it's very
Speaker 11: rear in journalism, or at least in my own career,
Speaker 11: where you have a story that has this jewel narrative
Speaker 11: where you can weave them together and see an investigation
Speaker 11: unfolding in suburban New York and at the same time
Speaker 11: in New Zealand, of all places, which happens to be
Speaker 11: where I'm from, there's an ex cop trying to work
Speaker 11: out who was behind this website. I remember one night
Speaker 11: I was driving back from Levettown to New York and
Speaker 11: I called Margie to talk to her about an interview
Speaker 11: I'd just done with Anna, who was in the story,
Speaker 11: and ultimately discovered the identity of Patrick Carey whod been
Speaker 11: posting the images and took that evidence to police. And
Speaker 11: I called Margie. I was excited because finally we had
Speaker 11: this key piece of the story to tell her about it.
Speaker 11: And that's when she responded, saying that she had discovered
Speaker 11: that there was also this whole other part to the
Speaker 11: story where there were these vigilantes, this movement trying to
Speaker 11: track down who was behind this website, and there was
Speaker 11: an ex detective from New Zealand who had been leading
Speaker 11: this fight to kind of combat deep fake pawn and
Speaker 11: to take down this deplorable internet sex site.
Speaker 4: So where do we go from here?
Speaker 10: Because, as you mentioned, there's no federal law prohibiting any
Speaker 10: of this, Marguie.
Speaker 4: But what happened in New York State?
Speaker 11: So in New York State we have seen the District
Speaker 11: Attorney in Nassau County, which is where this case unfolded,
Speaker 11: actually put forward or introduced new legislation trying to target
Speaker 11: deep fakes. The problem is that, you know, what do
Speaker 11: you focus on? Is it the companies that are releasing
Speaker 11: this technology? Is it the regulators who can't catch up
Speaker 11: to this technology, is it's being rolled out? Or is
Speaker 11: it the predators and bad actors like Patrick Kerry who
Speaker 11: are abusing it?
Speaker 2: And and yes, no, and I do also wonder and Margy,
Speaker 2: let's bring you back in. I mean in terms of
Speaker 2: police and law enforcement, you know how high up on
Speaker 2: the list is this in terms of prioritizing the things
Speaker 2: that they focus on?
Speaker 9: Yeah?
Speaker 2: Absolutely.
Speaker 12: One thing that was really interesting about Will Wallace, who
Speaker 12: you know, you guys have just mentioned, he obviously deeply
Speaker 12: involved in this website. It was a passion project of
Speaker 12: his to kind of find out you find help victims,
Speaker 12: find the people that were posting these pictures, but also
Speaker 12: uncover who the admin of the website was. But because
Speaker 12: he has a background in the police, he has this
Speaker 12: he really understands what it takes to be able to
Speaker 12: actually gather evidence, bring a good tip to law enforcement,
Speaker 12: and see that actually be followed through. And he would say,
Speaker 12: he would tell me how frustrated he was every time
Speaker 12: he would give a tip to law enforcement in different
Speaker 12: local law enforcements all around the world and not hear
Speaker 12: anything back. But he also understood that it's so challenging
Speaker 12: when there are you know, there are certain skill sets
Speaker 12: you need to be able to investigate this kind of crime.
Speaker 12: There needs to be better education so that when a
Speaker 12: victim comes forward in the first person they're speaking to,
Speaker 12: that they understand that yes, there hasn't been a physical crime,
Speaker 12: but this cyber crime is just incredibly traumatic and super
Speaker 12: damaging and that person is a true victim. And additionally,
Speaker 12: you know, when the laws aren't robust, laws aren't in
Speaker 12: place for prosecutors to deal with people once they've found
Speaker 12: a suspect, that all is just it's incredibly hard for
Speaker 12: police officers to do that work.
Speaker 2: When Patrick Carey, when it finally did come down on him. Olivia,
Speaker 2: Tim and I were talking about this before we got going,
Speaker 2: before you guys came into the studio. So he ultimately
Speaker 2: was sentenced six months in prison, ten years probation, lifetime
Speaker 2: status as a sex offender, can on a smartphone anymore,
Speaker 2: or any device with a camera, or be withinndred a
Speaker 2: thousand feet of a school or a playground. Six months,
Speaker 2: but he was out in four for good behavior. I
Speaker 2: don't see in a good behavior here that to me
Speaker 2: is not even a slap on the wrist. So it
Speaker 2: just kind of speaks to law enforcement not really necessarily
Speaker 2: respecting the severity because you talk to these women and
Speaker 2: they definitely felt harm, pain and there was an impact.
Speaker 11: Oh yeah, there's no doubt about that. I Mean a
Speaker 11: lot of these women have sort out therapy since this.
Speaker 11: One lost twenty pounds from stress, one dropped out of college.
Speaker 11: Three I talked to Carrie Pepper spray in their handbags,
Speaker 11: and two Carrie knives with them. Now they're so scared
Speaker 11: of what was done on the website, not only what
Speaker 11: Carrie was posting, but the hundreds, if not thousands of
Speaker 11: strangers in the world who saw those photos and tried
Speaker 11: to reach out to them. One of the craziest parts
Speaker 11: about this case is that Carrie also included the girl's
Speaker 11: names addresses social media information, so they had these awful
Speaker 11: messages and phone calls coming through to them, people harassing
Speaker 11: them for months, and one of the threads on the
Speaker 11: site had over thirty thousand views. That's thirty thousand people
Speaker 11: looking at a fake porn image of you where they're
Speaker 11: writing about you being raped and murdered. You know, the
Speaker 11: fear was real when I was talking to these young
Speaker 11: woman and there is a deep seated frustration and live
Speaker 11: it town from the families, teaches at the school, the
Speaker 11: girls themselves. That Carrie only received six months, he was
Speaker 11: out within four months, and he's back in the neighborhood now.
Speaker 3: It's amazing.
Speaker 10: I think the greater thing here, and obviously the circumstances
Speaker 10: of this particular story are totally frightening, but it also
Speaker 10: does just speak to this greater challenge that we're going
Speaker 10: to be living through now. We have a technology that
Speaker 10: the world is not prepared for, and this shows you
Speaker 10: how unprepared we are for it. And sure there's a
Speaker 10: lot of good that can come from it, but there's
Speaker 10: also your total nightmare, and you know, props to Olivia
Speaker 10: and Marty for being able to tell this story.
Speaker 2: Well and coming off of Open AI and the debate
Speaker 2: within that company about the ethics and the concerns about
Speaker 2: generative AI where it takes almost the perfect.
Speaker 8: Time for a storyline.
Speaker 4: He did it once again.
Speaker 10: He does They did it once again.
Speaker 2: Guy did do it once again. Olivia Carvell, investigative reporter
Speaker 2: at Bloomberg News. Margy Murphy, She's cybersecurity reporter apt Bloomberg News.
Speaker 2: Incredible story, the cover story, most read, the Bloomberg Big Take,
Speaker 2: and our thanks to Jill Weber. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on
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Speaker 1: or watch us live on YouTube.
Speaker 4: It is time now for another edition of Bloomberg Plugged In.
Speaker 4: It's your weekly look at EV's and all is not
Speaker 4: well when it comes to the world of EV's. Carol,
Speaker 4: we got the news that Ford is reducing capacity and
Speaker 4: hiring plans at a battery plant that it's building in Michigan.
Speaker 4: Because it sees weaker demand for EV's Remember, sales off
Speaker 4: it's signature F one fifty lightning plug and pickup fell
Speaker 4: forty six percent in the third quarter.
Speaker 2: All right, So let's see what Brendan Joan has to
Speaker 2: say about that. He is president CEO at Blank Charging.
Speaker 2: It's a two hundred and forty one million dollar marketcap
Speaker 2: company trades on the NASDAK. It of designs, makes, owns,
Speaker 2: and operates EV charging station and the company says it's
Speaker 2: contracted soldier deployed nearly eighty five thousand charging ports around
Speaker 2: the world. He joins us on Zoom from Miami Beach.
Speaker 2: Excuse me on the phone from Miami Beach, Florida. Hey, Brendan,
Speaker 2: great to have you here with us. Doc took a
Speaker 2: hit today, down about seven percent. Your down about sixty
Speaker 2: seven percent year to day. Before we talk about the business,
Speaker 2: because you guys had a good quarter. What are you
Speaker 2: hearing from your investor relations teams about what's going on?
Speaker 2: Why is the share price seeing so much pressure to
Speaker 2: the downside.
Speaker 13: Well, yeah, I think the whole industry. If we look
Speaker 13: at the EV charging industry and then more broadly at
Speaker 13: the EV industry in general, there. We've been under a
Speaker 13: lot of pressure for the past year. There's a marked
Speaker 13: difference from the frothy years that we saw about eighteen
Speaker 13: months plus ago to where we are now, and all
Speaker 13: the infrastructural companies seem to be suppressed at a much
Speaker 13: lower valuation. And if you listen to the advisors, you
Speaker 13: know what everybody's saying is the same thing to be
Speaker 13: a growth company. But we're focusing on profitability now. So
Speaker 13: you've got to continue to grow, and you've got to
Speaker 13: give us a definitive path towards profitability, and that's what
Speaker 13: we've done on Blank We give them the timeline and
Speaker 13: a target and we intend to get there by December
Speaker 13: of twenty twenty four.
Speaker 4: Well, you're not going to grow if they don't grow
Speaker 4: the number of evs that are out there significantly. And
Speaker 4: I think that's an important thing that I want to
Speaker 4: get from you, Brendan, is what's going on with EV's.
Speaker 4: I thought EV's were the future, and now on some
Speaker 4: dealership lots, they can't get rid of these things fast enough.
Speaker 13: Yeah, I mean, there's some micro issues in the in
Speaker 13: the industry, but when we look at aggregate sales both
Speaker 13: globally in the United States, they're up year over year
Speaker 13: and continue to be up. Eight percent was the sales
Speaker 13: pen rate on a US basis. In California, it was
Speaker 13: twenty two percent. In one of the earlier months of
Speaker 13: the quarter, it was actually at twenty five in California.
Speaker 13: You know, California has a twenty thirty five mandate of
Speaker 13: nothing but of evs can be sold in the state,
Speaker 13: and several other states have adopted that same thing. So
Speaker 13: I think we're certainly seeing a little bit of a
Speaker 13: downplay in the sales volume. But over time, you know,
Speaker 13: based on regulation and OEM commitment, well, we're going to
Speaker 13: see an uptick. And when you look at the broader numbers,
Speaker 13: you know, we're looking at a twenty thirty number of
Speaker 13: just thirty five percent EV penetration rate, and that would
Speaker 13: necessitate a need for thirty million chargers within the United
Speaker 13: States alone. So while there's some blips right now, we're
Speaker 13: still encouraged by the overall economic positiveness of the whole space,
Speaker 13: especially the states that are mandating evs and zero sales
Speaker 13: of internal combustion engines.
Speaker 2: Brendan unfortunately only have about forty five to fifty seconds
Speaker 2: left here. How do you compete though, with the likes
Speaker 2: of Tesla that continues to open up its charging network
Speaker 2: and capabilities to other automakers.
Speaker 13: Yeah, well, Tesla is primarily a DC as charge. Our
Speaker 13: owner operated model, Blink is a full on vertically integrated
Speaker 13: sales model where we sell chargers. The majority of the
Speaker 13: chargers we sell are L two chargers, and we own
Speaker 13: and operate them as well. So Tesla is primarily highway
Speaker 13: based charging. We provide charging in the metro, we provide
Speaker 13: charging in the home, We provide charging at multi family dwellings,
Speaker 13: and we do it when we install an own our
Speaker 13: operator as far less the cost the expense of DC
Speaker 13: fast charging, So it's a completely different business model. But
Speaker 13: we'll also be deploying chargers that can charge Tesla's and
Speaker 13: if we look more broadly at what our number one
Speaker 13: customers who plugs in the blink in Tesla drivers.
Speaker 2: Listen, promise to come back soon when we have a
Speaker 2: little bit more time. We would love to continue this conversation.
Speaker 2: Brendan Jones is the president CEO at Blink Charging. Joining
Speaker 2: us on the phone from Miami Beach.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 8: Plenty.
Speaker 2: Hen in our second hour of the weekend edition of
Speaker 2: Bloomberg Business Week, including what it's like to fly private
Speaker 2: and whether economic conditions are impacting demand, plus the guide
Speaker 2: to holiday entertainment from our friends at Bloomberg Pursuits, and
Speaker 2: from the founder of a company called Hire Santa. Apparently
Speaker 2: it's kind of hard to find a professional to dress
Speaker 2: up like Santa Claus this time of year. Talk about
Speaker 2: supply demand challenges. First up though this hour, I guess
Speaker 2: our audience knows very well. He's been joining our program
Speaker 2: for years. As Tim and I were discussing, he.
Speaker 4: Was on with you and Mike McKee. Mike McKee, Okay,
Speaker 4: the show is called taking Stock back in twenty fourteen,
Speaker 4: that was the year they actually launched Ron.
Speaker 8: That was the first year.
Speaker 4: That was the first so he's been here since the beginning.
Speaker 2: Nay check, it's of course, co founder and CEO of
Speaker 2: Ron joining us now. Welcome welcome back.
Speaker 14: Thank you so much. I feel I feel as close
Speaker 14: to being at home on air here than anywhere else.
Speaker 2: Well, likewise, we feel like you're part of the family
Speaker 2: and we're so glad to have you back. It's been
Speaker 2: I feel like a big year for you.
Speaker 8: Guys, really big year.
Speaker 14: I mean big month in particular, a lot of a
Speaker 14: lot of exciting things happening.
Speaker 2: Can we talk though, about the billionaire Blackstone executive David Blitzer,
Speaker 2: former hedge fund manager Gabe Pluckin, ex football stars Tim Tebow,
Speaker 2: Steve Young. They did a deal and they're now involved
Speaker 2: in the company.
Speaker 8: Yeah, it's so the quick story is not a.
Speaker 2: Year ago right, July twenty so we.
Speaker 14: Just announced it, but this happened July of last year.
Speaker 14: And effectively what happened is we put a group together
Speaker 14: in an SPB with really exciting names, a bunch of
Speaker 14: Kerrent and retired athletes as well as just incredible people
Speaker 14: like Blitzer and Gabe, and we bought out the private
Speaker 14: equity interest in our business so that we can really
Speaker 14: think about the business in a more long term way.
Speaker 4: What was it that the private equity firm wanted to
Speaker 4: do that you weren't ready to do.
Speaker 14: It really wasn't. They weren't pushing us to do anything,
Speaker 14: but the nature of private equity is a five to
Speaker 14: seven year whole time, and we were in we were
Speaker 14: coming into year five and they're great partners.
Speaker 4: In fact, they were talking about el.
Speaker 14: Caterton, the managing partner of their growth fund is still
Speaker 14: on our board even though they sold their interest. That
Speaker 14: was part of something that I really wanted as part
Speaker 14: of the deal and they you know, I just was
Speaker 14: kind of forecasting the future macroeconomically, time of uncertainty if
Speaker 14: they wanted us to sell the business and it wasn't
Speaker 14: right for us. So and more than anything, I kind
Speaker 14: of fell back in love with the brand and the company,
Speaker 14: and I thought, I kind of want to do this
Speaker 14: maybe for thirty forty years, not five years.
Speaker 2: Why had you fallen maybe out of love a little bit.
Speaker 14: Well, the pandemic was a really stressful time, you know, not.
Speaker 8: Just your statement. Yeah, it was a stressful.
Speaker 14: Time for every business, every person, but certainly I think
Speaker 14: for me as a leader of a company, it felt
Speaker 14: like there was a new crisis every single week, and
Speaker 14: we had some growing up to do.
Speaker 1: You know.
Speaker 14: The business still grew tremendously during that time. In fact,
Speaker 14: it was great for businesses like ours, but it really
Speaker 14: wrung me out, and I think I was at a
Speaker 14: point where, you know, just we talk a lot about
Speaker 14: mental health in our company, I was at a breaking
Speaker 14: point and I felt like I either need to sell
Speaker 14: this company or something needs to change. And for me,
Speaker 14: the thing that needed to change is I needed to
Speaker 14: feel almost more invested in it and I needed to
Speaker 14: make some changes.
Speaker 2: I heard a quote I just want to where you said,
Speaker 2: I think after this and kind of getting back control,
Speaker 2: nothing has changed and everything has changed. Yeah, which kind
Speaker 2: of says so much.
Speaker 14: Yeah, it's really exactly how I feel, even though conceptually,
Speaker 14: you know, el Catterton was a minority shareholder in the business,
Speaker 14: so in theory their ownership change to a new group
Speaker 14: didn't change anything, but the way I feel has changed completely.
Speaker 4: Do you feel more in control?
Speaker 8: Absolutely? Yeah.
Speaker 4: And I have a controlling stake in the company.
Speaker 14: Yes, so, uh, you know, we call it because of
Speaker 14: my other is involved. I've got a brother in law,
Speaker 14: so we've got family control of the business and the
Speaker 14: goal is to have a long term hold here.
Speaker 2: Dad's involved.
Speaker 14: That was one of the most exciting parts about this.
Speaker 14: I called him. You know, my parents have spent three
Speaker 14: years in London doing service and came back and I said, hey,
Speaker 14: I have this crazy idea. What do you think about this?
Speaker 14: And you know, he's an incredibly experienced executive and he said,
Speaker 14: I love it. What can I do to help? So
Speaker 14: we added him to the board and it's been a dream.
Speaker 14: I've told people. Look, there are people who are going
Speaker 14: to say, oh, you know you're working with your dad
Speaker 14: and I all I do is I forecast twenty years
Speaker 14: in the future, and I think if I could, if
Speaker 14: I didn't take this opportunity, I would regret it for
Speaker 14: the rest of my life. And I get a chance
Speaker 14: to I get a chance to work with him and
Speaker 14: you know, and have that family relationship. It's incredibly unique
Speaker 14: and special.
Speaker 2: Yeah, no doubt about it. Right, We allly get to
Speaker 2: do this once. Yeah, right, to figure out how you
Speaker 2: want to do it? Well, not investors though, in the
Speaker 2: sports world.
Speaker 9: Ye.
Speaker 2: So how are you then maybe thinking about you know,
Speaker 2: we talk often about branding and partnerships and especially with athletes.
Speaker 2: How are you guys thinking about that as part of
Speaker 2: the strategy, the growth strategy going forward?
Speaker 14: Well, it's interesting. Our brand launched as an active brand,
Speaker 14: so we were carried in Equinox and Peloton and Soul
Speaker 14: Cycle and Barry's boot Camp in places like that, and
Speaker 14: then we added in our commuter line. I'm wearing a
Speaker 14: full commuter shirt and a commuter you know commuter.
Speaker 4: We all love the computer.
Speaker 14: So it's been an incredible part of our business. But
Speaker 14: active is at our roots. That's how we still see
Speaker 14: ourselves as a performance brand. So the sports partnerships, the
Speaker 14: athlete partnerships, is something that we're planning to lean into
Speaker 14: more as part of this. We have seven professional sports
Speaker 14: team owners on the cap table. We have the NFL, NBA,
Speaker 14: Major League Baseball, Major League Soccer, English Premier League all
Speaker 14: represented across the ownership group, and that's that's a great
Speaker 14: opportunity for us.
Speaker 2: And a great revenue mover. Eventually, could you see yourself
Speaker 2: doing lines around an athlete.
Speaker 14: I certainly think there would be collections and collaborations in
Speaker 14: the future.
Speaker 8: Yeah.
Speaker 4: What's the bricks and mortar strategy right now?
Speaker 14: So we've opened eleven stores in the last twelve months,
Speaker 14: so we have we have fifteen source total now.
Speaker 8: Until was dead.
Speaker 14: Yeah, it's it is certainly not for us. In our
Speaker 14: stores are all profitable. The payback period has been incredibly
Speaker 14: quick on these stores and what they do for us
Speaker 14: in a market. We can measure the e comm impact
Speaker 14: and the awareness impact when we open a new store.
Speaker 14: So I think it's getting more competitive though. Every brand
Speaker 14: is trying to open retail. So there, you know, there
Speaker 14: was kind of a window of opportunity. I think that
Speaker 14: window is starting to close. Also, you know what's happening
Speaker 14: macroeconomically that may shift over time. But online digital acquisition
Speaker 14: costs have been growing at such an increasing rate. Everybody's
Speaker 14: playing in that space that it became really expensive to
Speaker 14: acquire companies online. Now now you can acquire companies or
Speaker 14: customers the old fashioned way through retail and make money
Speaker 14: as you're acquiring them.
Speaker 8: How do you track that, the eCOM left.
Speaker 4: Yeah, how do you try?
Speaker 15: Yeah?
Speaker 4: Exactly. How do you know that what's happening in the
Speaker 4: store outside of a store will lead to a sale online?
Speaker 14: So we have a baseline of data in every single
Speaker 14: market that we track by zip code, right and after
Speaker 14: you open a store, there's a thirty day measurement, a
Speaker 14: three month measurement, a six month measurement, and a year
Speaker 14: long measurement and you try and see did the baseline
Speaker 14: of e comm rise since the store opening? Is it
Speaker 14: complete direct correlation? Hard to know because the brand's also growing.
Speaker 14: But if you if you then minus overall brand growth,
Speaker 14: did the market grow at an above rate of the
Speaker 14: standard growth rate? And that's kind of how we think
Speaker 14: about measuring it.
Speaker 2: I am always curious about like a product line or
Speaker 2: a brand because I think sometimes you can grow too
Speaker 2: fast in terms of the stuff you offer that it
Speaker 2: just gets overwhelming. So how do you think about how
Speaker 2: you kind of you know, cultivate that or curate that
Speaker 2: so that you don't kind of overwhelm the concer.
Speaker 14: It's tricky because the customer has given us such opportunity
Speaker 14: to do so many things as we've introduced commuter, and
Speaker 14: we have to we have we have to guard ourselves
Speaker 14: a little bit against it. But right now we say
Speaker 14: we really can outfit about eighty percent of a guy's closet.
Speaker 14: We've been lucky. We've always paid above market for retail
Speaker 14: in particular. That's that was the toughest piece, you know,
Speaker 14: as we've scaled the but it's so critical to have
Speaker 14: good people in your stores. It makes all the difference.
Speaker 14: When if a store is not performing well and you
Speaker 14: put the right person in it will it will just
Speaker 14: completely transform how the store performs. So we've been fortunate
Speaker 14: that we've been able to attract really good talent.
Speaker 2: Speaking of those stores, they're going to start selling women's stuff.
Speaker 14: Finally, every every interview at the end either yeah, so
Speaker 14: when's it happening? Uh So this coming May, we will
Speaker 14: be launching women's and it's incredibly exciting. It's been a
Speaker 14: long time in the works. You know, we've started. We
Speaker 14: started as a men's brand. We did a women's capsule
Speaker 14: in twenty nineteen and it went so well it sold out.
Speaker 14: But you go into twenty twenty and do you want
Speaker 14: to take the inventory risk and continue to lean into it.
Speaker 14: But we brought an incredible chief product officer who is
Speaker 14: really the most talented fabric person I've ever worked with,
Speaker 14: and she has put together an incredible initial collection. It's
Speaker 14: been received so well as we've taken it to market
Speaker 14: and introduced it to wear testers. And part of the
Speaker 14: big story of Roan is that we added three very
Speaker 14: talented female executives over the last three years and they've
Speaker 14: been a big part of our success, and seventy percent
Speaker 14: of our team is female, so we wanted to build
Speaker 14: a collection that they were proud and excited to wear,
Speaker 14: and I basically just tried to get out of the.
Speaker 2: Way intentional hiring women.
Speaker 14: I would say, we hired the absolute best people for
Speaker 14: the position, and they happened to be women. I think
Speaker 14: we have always believed in building a diverse and strong team,
Speaker 14: and we needed.
Speaker 8: That at every level.
Speaker 14: We've just added a female board director named test Roaring,
Speaker 14: who's incredibly talented. But we always try and hire the
Speaker 14: best person for the job, and the best people for
Speaker 14: the job for these jobs were the women that we hired.
Speaker 4: I talked to us about financials.
Speaker 2: You guys have said publicly, are you going to do
Speaker 2: a commuter suit for women?
Speaker 14: I can't reveal new collections on waiting some numbers.
Speaker 2: I know you're going to be as we should be,
Speaker 2: but I'm just.
Speaker 4: Okay, So one hundred million dollar annual run rate profitable
Speaker 4: last three years. What else can you tell us?
Speaker 14: Well, the company's growing twice as fast since we did
Speaker 14: this transaction than we did, you know, than we were
Speaker 14: growing before, and better environment or what I would say,
Speaker 14: it's actually probably a harder environment. Most of the brands
Speaker 14: in our space are flat to down quite significantly. This year,
Speaker 14: we've opened eleven stores. As I mentioned, in the last
Speaker 14: twelve months, there's been strong growth in a couple of
Speaker 14: our categories. We have some product lines that are growing
Speaker 14: at north of three hundred percent this year. So we
Speaker 14: feel really good about where the business is today, and
Speaker 14: we you know, we have a lot of conviction that
Speaker 14: we can continue to grow in scale. It's not easy,
Speaker 14: but we're excited.
Speaker 8: All right.
Speaker 4: We got a little bit of a lightning round.
Speaker 14: The light round. I don't think this has ever happened
Speaker 14: before the first time at the point, just like you, Okay,
Speaker 14: you don't have.
Speaker 4: To answer in a lightning way because some of these
Speaker 4: are longer answers.
Speaker 2: Okay, go ahead.
Speaker 4: Work life balance, we talk a lot about work life balance.
Speaker 4: You share so much of your life on Instagram. I
Speaker 4: followed you for years. You have family, kids. Is work
Speaker 4: life balance and illusion?
Speaker 8: Yes it is.
Speaker 14: I mean, I don't even like the word balance. I
Speaker 14: think it's a I think it's the wrong term. And
Speaker 14: I think I've grown as I've thought more about this.
Speaker 14: I really love I can't remember where I heard this.
Speaker 14: I love the harmony because in theory, when you're doing
Speaker 14: it right, your work should help you at home and
Speaker 14: your home should help you at work, and that the
Speaker 14: balance makes.
Speaker 8: It feel like there should be a bucket.
Speaker 14: Of each and you need to make them equal or
Speaker 14: a certain proportion, and harmony shows you how they can
Speaker 14: really influence each other. And for me, becoming a better
Speaker 14: leader in the workplace, being more thoughtful and sensitive, how
Speaker 14: I approach conversations, how we think about long term planning
Speaker 14: has for sure made me a better parent and I
Speaker 14: hope a better partner.
Speaker 2: Do where to go? Okay, this is back to kind
Speaker 2: of hardcore business. What prompts men to buy activewear these days?
Speaker 2: Has anything changed? What gets their own target demo to
Speaker 2: pull out the plastic and buy?
Speaker 14: Yeah, what's really exciting is I think the shift during COVID,
Speaker 14: where I think in particular, we saw a shift for
Speaker 14: men to start taking better care of themselves, to allow
Speaker 14: themselves to take better care of themselves. That I think
Speaker 14: has continued and I hope never goes back. It's really important.
Speaker 14: And so you know, there's a lot of different modalities.
Speaker 14: It could be yoga, it could be running, it could
Speaker 14: be cycling, but most of our customers do a balance
Speaker 14: of all of those.
Speaker 2: You talked about the athletic side of the business. Is
Speaker 2: that still the big chunk of the business.
Speaker 14: It's pretty equal at this point between our active and
Speaker 14: our commuter lines. Yeah. Wow, there are a lot of
Speaker 14: customers who only know us for our commuter line.
Speaker 2: Wow, what's more profitable?
Speaker 14: I would say our commuter line is more profitable. It's
Speaker 14: a higher price point.
Speaker 2: Okay, okay.
Speaker 4: So when you told us earlier that covid was really challenging, Yeah,
Speaker 4: was that as challenging as the first couple of years
Speaker 4: of just getting the brand off the ground and like
Speaker 4: knocking on doors and getting Peloton and Equinox and berries
Speaker 4: to carry this stuff.
Speaker 14: It was more challenging for me, There's no question it
Speaker 14: was more challenging. In the beginning. You're so excited and
Speaker 14: you've got nothing to lose, right, So you're kind of
Speaker 14: trying to build this business from scratch, and if you
Speaker 14: lose it, you know, no harm, no fallid, it doesn't
Speaker 14: it's not worth anything at that point. But then as
Speaker 14: it grows, there's more pressure, there's more people, you know,
Speaker 14: and I care so deeply about how our team feels
Speaker 14: about work and and so the pandemic was hard again
Speaker 14: on so many people and so many families. I just
Speaker 14: felt that weight all the time, and I didn't know
Speaker 14: how to relieve it. So for me it was harder.
Speaker 2: Last question, right, Yeah, if everything goes according to plan,
Speaker 2: ron will fill in the blank.
Speaker 14: Ron will have a massive impact on the mental health
Speaker 14: in this country.
Speaker 4: Wow, we have we do have one minute left? Oh
Speaker 4: huh yeah, mental health okay, personally, Yeah, how did you
Speaker 4: get past that hump that you faced during the pandemic.
Speaker 14: Well, I think a big part of it for me
Speaker 14: was building a toolkit and understanding how to deal with
Speaker 14: those challenges because these things tend to catch us unaware,
Speaker 14: you know, anxiety, depression. You can't fully prepare for them,
Speaker 14: but you can build a toolkit to know how to
Speaker 14: address it when you feel that way. And there's a
Speaker 14: number of things that I do, but motion exercise. I
Speaker 14: got really into contrast therapy, cold plunging, saunas, and social
Speaker 14: connection intentionally seeking out. It's hard to build friends, you know,
Speaker 14: as you age, but getting yourself uncomfortable makes a big difference.
Speaker 2: Well, you've definitely made a big difference. You can tell
Speaker 2: in what you're doing in the last year, and you
Speaker 2: can tell how much you're enjoying it. So looking forward
Speaker 2: to the next ten years, oh at least twenty years,
Speaker 2: thirty years. Be welcome back soon.
Speaker 14: Thank you always welcome much of course.
Speaker 2: Nate check It's co founder and CEO of Rowan.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on
Speaker 1: Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App,
Speaker 1: or watch us live on YouTube.
Speaker 6: Well.
Speaker 2: As pandemic worries have faded, the travel business has definitely
Speaker 2: come soaring back, with airline traffic more than doubling since
Speaker 2: it's COVID a trough, and waiting times for deliveries of
Speaker 2: new commercial airplanes mostly stretching through the end of this
Speaker 2: decade because of robust demand. But there is one travel
Speaker 2: segment that seems a little bit stuck in a holding pattern,
Speaker 2: and that is corporate owned gents so road.
Speaker 4: Bloomberg's Thomas Black earlier this month, he reports on the
Speaker 4: aviation space and noted that even though the number of
Speaker 4: flights operated by the broader private aviation industry so that
Speaker 4: includes charter, fractional, individually owned aircraft managed by third party
Speaker 4: service companies, pretty much all the ways that you fly
Speaker 4: around Carrol totally. Yeah, not. It's almost nineteen percent higher
Speaker 4: than it was back in twenty nineteen, that was the
Speaker 4: last full year pre pandemic year. Company's in house flight
Speaker 4: departments are flying about the same as they did Carol
Speaker 4: four years ago.
Speaker 2: It's interesting. That's according to data from wing exit's Hamburg
Speaker 2: based provider of market data and analysis on the private
Speaker 2: aviation industry. We've got a great voice on this back
Speaker 2: with us is Janiniannarelli. She is founder and president of
Speaker 2: the private aircraft broker par Avian, and she really sees
Speaker 2: daily what is going on, minute by minute in the
Speaker 2: private av world. She's here in our Bloomberg Interactive Brokers studio.
Speaker 2: Welcome back. How are you delighted to be here. Thank
Speaker 2: you for the invitation. It's great to have you here.
Speaker 2: Tell me what you said though, when you walked into
Speaker 2: the studio and you were listening to our segment on
Speaker 2: the IPO market, which seems like it's having a tough
Speaker 2: time getting going, and how that kind of related to
Speaker 2: your industry.
Speaker 6: Yeah, just take your last guest story and slash ipo
Speaker 6: and insert the word jet.
Speaker 2: What's going on?
Speaker 6: That's a good question. What we have observed throughout the
Speaker 6: course of twenty twenty three The buyers are sitting on
Speaker 6: their hands and they've created excuses, and I would say
Speaker 6: the trade has as well for them quarter over quarter.
Speaker 6: So here we are, we're at the end of the year.
Speaker 6: This should be the busiest time of the year in
Speaker 6: the aircraft trading marketplace, and it's relatively quiet.
Speaker 4: Wait, I thought that we saw huge, huge announcements from
Speaker 4: companies like net Jets buying many many Cessna citations for
Speaker 4: example earlier this year. That doesn't count in a.
Speaker 6: Way, no, because that's the fractional share and they need
Speaker 6: to meet demand. Actually, fractional flying is up year over year.
Speaker 6: I want to say the number is somewhere like seven
Speaker 6: point nine percent, whereas private flying is down eight point
Speaker 6: three percent year over year.
Speaker 4: These can how can those things both be true?
Speaker 2: And Thomas Black and his story said flights are fractional operators.
Speaker 2: So we're talking about net Jets Flexjet. They've increased have
Speaker 2: increased forty one percent from twenty nineteen levels.
Speaker 4: You're still flying private when you use one of those operators,
Speaker 4: So make the distinction for our audience.
Speaker 6: So the private sector and the corporate sector is whole ownership.
Speaker 6: These are individuals and corporations that go out and acquire
Speaker 6: the asset and the management, the crewing.
Speaker 2: It's the company jet.
Speaker 6: It's the company jet. We're to fractionalize all the time.
Speaker 6: You're buying a piece of an airplane and so you
Speaker 6: have access to uplift pretty much on demand, but you
Speaker 6: don't own the whole aircraft and you don't control the
Speaker 6: operation of it.
Speaker 4: This is exactly what our own Thomas Black wrote about
Speaker 4: earlier this month. And the question is that I that
Speaker 4: I have for you, is is that era kind of
Speaker 4: over when it comes to private ownership. We've seen pushback
Speaker 4: from shareholders about flying private. So now about actually these
Speaker 4: companies owning corporate jets because of the carbon footprint, So
Speaker 4: companies are now not actually owning their jets outright and
Speaker 4: instead using those fractional services which do offer the on
Speaker 4: demand private flying, So the benefits of flying private without
Speaker 4: actually owning that asset.
Speaker 6: So it's a conundrum. I don't think demand has diminished,
Speaker 6: it's just action has diminished. We really don't see people
Speaker 6: pushing away from private jets and looking for other means
Speaker 6: of transportation. It still is the most efficient form of
Speaker 6: moving goods and service goods and people around the country, around.
Speaker 2: The world, but they don't want to own it, not necessarily.
Speaker 6: So I mean I personally have not experienced people say
Speaker 6: sell the jet because of all the issues that you
Speaker 6: just cited. There are ways to reduce their carbon footprint.
Speaker 6: You know, smart flying, direct flying in the United States
Speaker 6: is going to lead the way. Operators within the United
Speaker 6: States are going to lead the way to that goal
Speaker 6: of twenty fifty.
Speaker 2: Which I mean you brokeer deals right, correct, So how
Speaker 2: much is your deal flow down this year from I
Speaker 2: don't know what's is it the peak post pandemic that
Speaker 2: you measure against. I'd be curious about that, and also
Speaker 2: where it was maybe twenty nineteen.
Speaker 6: So good questions. My business is off significantly, but I
Speaker 6: attribute it to the aircraft that I'm actually offering. I mean,
Speaker 6: the market's sort of.
Speaker 2: You don't like your inventory.
Speaker 6: I love my inventory, right, but it's not what people
Speaker 6: will It's not in favor with the market today. The
Speaker 6: most active segment of the business aircraft marketplace. I would
Speaker 6: have to say, is the small jet that is the
Speaker 6: aircraft that initially led the decline and then started the
Speaker 6: rise back out of the global panel.
Speaker 4: What is this like a six person exactly?
Speaker 6: I put it more in a dollar perspective, but six
Speaker 6: to eight passengers somewhere two to seven million dollars, and
Speaker 6: the aircraft range is going to be anywhere from about
Speaker 6: a thousand nautical miles to fifteen hundred.
Speaker 2: So what don't people want then?
Speaker 11: Is it?
Speaker 2: Now? Yeah? What is it that they don't want?
Speaker 6: It seems to be the category that I would call
Speaker 6: the super mid size and the ultralong range aircraft.
Speaker 4: Why don't they want those?
Speaker 2: It's a good.
Speaker 6: Question, It's a really good question. So, first of all,
Speaker 6: if we talk about the ultra long range that that's
Speaker 6: the pinnacle of the marketplace, and the price point for
Speaker 6: those airplanes is anywhere from fifty million on.
Speaker 4: This not be like a Golfstream G six fifty correct.
Speaker 6: Yes, Tim's a little bit into planes, ah, I can tell.
Speaker 6: So that seems to have fallen out of favor. I mean,
Speaker 6: there are there are buyers out there, and there are
Speaker 6: plenty of inquiries. I mean, if I just look at
Speaker 6: the number of inquiries I've received here to date on
Speaker 6: every single aircraft I offer for sale. It's just my
Speaker 6: mind that not one person has stepped up to make
Speaker 6: an offer. Maybe more interesting is, let's say I get
Speaker 6: two hundred inquiries over the course of three months on
Speaker 6: an aircraft. My guess is ten percent are really going
Speaker 6: to buy an aircraft, but less than ten percent of
Speaker 6: that ten percent and actually done anything.
Speaker 4: Forgive me, but do interest rates matter? I mean when
Speaker 4: we're talking at this type of money, they don't matter
Speaker 4: for real estate, but they matter for at least that's
Speaker 4: what real estate, high end real estate mean.
Speaker 2: Do they finance these deals?
Speaker 3: Like?
Speaker 2: Yeah, that's a good question.
Speaker 6: So another good question my personal history is that I
Speaker 6: can count, maybe on two hands, how many people actually
Speaker 6: needed financing throughout my entire Cash needed to.
Speaker 4: Me need versus using financing are two different things. There
Speaker 4: are plenty of people who could pay, you know, outright
Speaker 4: for a forty thousand or sixty thousand dollars vehicle, but
Speaker 4: if they get zero percent financing, then they're going to
Speaker 4: take the financing exactly that.
Speaker 6: Now, I have a number of prospective buyers that they
Speaker 6: may pay cash outright and then refinance later. On most
Speaker 6: of them do that with a financial institution that they
Speaker 6: already have a business relationship with. The odd inquiry that
Speaker 6: I may receive for aircraft financing, frankly, is a little
Speaker 6: bit of a red flag for me, because they shouldn't
Speaker 6: be asking me. They already should have had that in place.
Speaker 2: Right, it's right. They've got their bankers, They've got the
Speaker 2: bank that they've been working with for years on everything.
Speaker 6: End qualified the case, come in everything.
Speaker 2: It's interesting. I'm thinking about our audience. So how do
Speaker 2: you then use what you are seeing to maybe tell
Speaker 2: you what's going on in the global economy. Is it
Speaker 2: an indicator for you or is it just maybe your business,
Speaker 2: Your industry is going through some changes.
Speaker 6: I would say flip that and say business jets are
Speaker 6: the indicator, and they always have been. Now I think
Speaker 6: we're writing new history, and have been since twenty nineteen,
Speaker 6: because you could take the playbook and throw it out
Speaker 6: the window. Looking back over twenty three, I was musing
Speaker 6: over the fact that we're going to chalk this year
Speaker 6: up to a year of rebalancing, and I'm wondering if
Speaker 6: this was not the downturn that always follows a great
Speaker 6: upswing and twenty four, because I'm going to use it
Speaker 6: to project a little bit is going to be relatively quiet.
Speaker 6: But the driver for that is mostly the presidential election
Speaker 6: and the uncertainty that comes along with who will be
Speaker 6: our new administration and what policies will go into effect.
Speaker 4: Well, President Trump was pretty friendly to private jets.
Speaker 2: To a certain degree.
Speaker 4: I mean some of those there were tax breaks that
Speaker 4: were given to people who used private jets during the
Speaker 4: coronavirus pandemic, for example.
Speaker 2: Well, that's true.
Speaker 6: The bonus appreciation was a huge driver to motivate people
Speaker 6: to buy aircraft.
Speaker 2: Twenty seconds. What are you worried about in terms of
Speaker 2: the presidential outcome and in terms of regulatory or overset?
Speaker 2: And I've got to ask you to be very quickly.
Speaker 6: I'm mostly concerned about tax implications. There's a lot of
Speaker 6: those expiring in twenty five. That's really the bigger concern.
Speaker 2: Really fascinating, right.
Speaker 4: I can talk about this all I know.
Speaker 2: I know it's a world we love talking about. We
Speaker 2: didn't even get into evitall's, which I know is a
Speaker 2: big thing. Time next time, come back soon, love to
Speaker 2: continue the conversation. Janine Jannarelli, Founder president of par Avion,
Speaker 2: a private aircraft broker. You can check out some of
Speaker 2: the stuff that she is involved in on her website.
Speaker 2: Here in studio, have a good holiday.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
Speaker 1: the Bloomberg Business App and YouTube. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station,
Speaker 1: Just Say Alexa Play Bloomberg eleven thirty.
Speaker 2: We turned out to our friends with Bloomberg Pursuits for
Speaker 2: their annual guide to holiday entertaining, and we have the
Speaker 2: recipe for sweet success no matter what kind of hosting
Speaker 2: duties you are facing this holiday season. Here with a breakdown,
Speaker 2: our Bloomberg Pursuits Deputy editor Jim Gaddie and a renowned
Speaker 2: food editor Kate Crater, who's joining us from London. And guys,
Speaker 2: let's cut to the chase. It's all about cheese, Jim.
Speaker 2: Apparently who knew.
Speaker 16: You know, when Kate came to us with this idea
Speaker 16: we have a holiday entertaining special every year. She said, guys,
Speaker 16: I just want to do something easy this year, And
Speaker 16: who knew? It was all about cheese Kate.
Speaker 2: It does feel like I feel like, even just going
Speaker 2: into Thanksgiving, just the holidays in general, everybody just wanted
Speaker 2: to like relax, go into comfort food, and I feel
Speaker 2: like cheese is like the perfect thing. Give me cheese, wine, crackers,
Speaker 2: And I really am such a happy little soul.
Speaker 17: Same Carol, we are exactly the same. And I know
Speaker 17: I'll see what the cheese board do very very soon. No,
Speaker 17: I think I think everybody has negative time around the holidays,
Speaker 17: and this year it seems more so than ever. And
Speaker 17: She's really is an instant party. I mean, it doesn't
Speaker 17: ask for much besides that you and wrap it and
Speaker 17: serve it at room temperature. And sometimes we actually found
Speaker 17: this one cheese that's it. That's upland rust Creek reserves.
Speaker 17: The makers recommend that you warm it a little bit
Speaker 17: so it becomes like this crazy, rich, savory custard. When
Speaker 17: you see a picture of it, you won't believe it.
Speaker 17: It looks. I mean, it really is like the most
Speaker 17: beautiful thing you've ever seen.
Speaker 2: Okay, so it's pretty. Does it taste good?
Speaker 6: Cake?
Speaker 17: It's so good. It's so good. It's like this thick, creamy,
Speaker 17: a little bit grassy, it's made from cow's milk and
Speaker 17: the cows have been munching on dry fall grass, so
Speaker 17: I think that gives it a bit of a toasty flavor.
Speaker 17: But it's also it's you know, have the best cheese
Speaker 17: when it's super creamy eazy, is a little bit sweet
Speaker 17: and salty, and that's exactly what this is.
Speaker 2: So what do you do? So Jim, like, come on?
Speaker 2: And I'm also from a family that even like the
Speaker 2: younger generations are really into charcuterie boards. I think that's
Speaker 2: what they all want as gifts, they and that's what
Speaker 2: they do. But it's really Jim and an easy way
Speaker 2: to entertain.
Speaker 16: Absolutely. You know, it's crazy how it's so simple. You
Speaker 16: don't really have to do that much. You know, you
Speaker 16: can you a charcotterie board, put four or five cheeses
Speaker 16: on it, pair it with some wine. Kate, I mean,
Speaker 16: how many times have you done this in your life?
Speaker 8: And how many times.
Speaker 1: Has it gone wrong?
Speaker 5: Yeah?
Speaker 17: Exactly. There's a very good like success ratio when you
Speaker 17: have a cheese board, as you know, and Carol you'll
Speaker 17: know from your daughter. So it's just like it makes
Speaker 17: like it's so easy and it's just so great to
Speaker 17: think because parties are stressful, they really are. And so
Speaker 17: if you can come up with some instantaneous ways to
Speaker 17: make people happy and guess happy that are no that
Speaker 17: are no stress and the thing is really worked for
Speaker 17: everyone because you can seguay into a sarcuitary board alongside.
Speaker 17: But there's also fantastic vegan cheeses now, so you can
Speaker 17: buy some of those to serve.
Speaker 2: Well, is there there's a reason, right?
Speaker 9: Is it?
Speaker 2: Because right? I love this part It's produced from cows
Speaker 2: that have been snacking on a dry fall hay. Right,
Speaker 2: So this is the reason why there's a sneaker drop, right,
Speaker 2: not a spring hay.
Speaker 12: Yeah.
Speaker 17: Yeah, don't try and give them spring hay. It's fall hey,
Speaker 17: which I guess if you think about it, what little
Speaker 17: I know about farming means that it's you know, sat
Speaker 17: there and like soaked up the sunshine all summer long
Speaker 17: and now and then it's like super concentrated, delicious hay
Speaker 17: and that you get in autumn.
Speaker 2: The caws were also smiling and they did this. God,
Speaker 2: I'm sorry to go ahead.
Speaker 16: The other thing that I found interesting about this particular
Speaker 16: cheese that our wine critic Ala McCoy found out is
Speaker 16: that you compare it with a red like a deep
Speaker 16: red wine, which was kind of surprising to me. And
Speaker 16: you don't have to serve it at the beginning of
Speaker 16: the meal. You can serve it French style at the
Speaker 16: end of the meal. So it's really kind of like
Speaker 16: whatever time you want to serve it. You can serve
Speaker 16: it with a white wine. You can obviously champagne. We
Speaker 16: have a Champagne this Bowlingair Special Cube which goes with
Speaker 16: kind of innie cheese that's kind of like the classic.
Speaker 16: But I was really intrigued by the idea that you
Speaker 16: could get this age kind of earthy red wine to
Speaker 16: serve with the cheese homage.
Speaker 2: Yes please, yes please. And you also, though, do list
Speaker 2: some other cheese. I mean, the girl it cheese, is
Speaker 2: it right? But you do, as you said, vegan cheese,
Speaker 2: because we have a lot of vegans in my family too,
Speaker 2: and we really have to think about that when we're entertaining.
Speaker 2: So there's there's a bunch of other ones. And I
Speaker 2: do like the wine, uh, the one one that goes
Speaker 2: with pretty much any cheese.
Speaker 17: I know, I wanted to quizz you on that, Carol,
Speaker 17: but but Jim sort of Jim killed it and be like, okay, quick, Carol,
Speaker 17: what's the one line to serve with any keys?
Speaker 8: Well?
Speaker 2: Yeah, sorry, Jim, Thanks very much. All right, So let's
Speaker 2: get into some of the other parts of the section.
Speaker 2: I love. I have to say over the summer, Kate,
Speaker 2: I imbibed in some of these pre mixed cocktails and
Speaker 2: I really had fun with them.
Speaker 17: There are some experts that are that are doing these
Speaker 17: canned cocktails. Now. One of them who you might not
Speaker 17: have picked on your Bengo card is Jennifer Lopez, who
Speaker 17: you might know might know her music in her some
Speaker 17: of her movies, but she's teamed up with a superstar
Speaker 17: called Lynette Morrero, who is a star bartender in New York,
Speaker 17: and they are making a sprits that sort of like
Speaker 17: a paloma, so it's got that tang, but then it's
Speaker 17: got like the fun and effervescence of the sprits. It's
Speaker 17: called the Do Lola Paloma Rosa Sprits, so it sort
Speaker 17: of rolls off your tongue and it's it's great. You know,
Speaker 17: it's like tequila plus bubbles. So he's not going to
Speaker 17: love that.
Speaker 2: Sign me up. I don't get it. She's got ben Affleck.
Speaker 2: She's beautiful, she's sings, she doesn't now she gets you
Speaker 2: like her own little call. Come on Jaylo's share a
Speaker 2: little bit. Also talk to us about this, you guys.
Speaker 2: Jim come on in on the open a box and
Speaker 2: pressed out like these ideas of kind of these kits
Speaker 2: that you can I think it's kind of a great
Speaker 2: hostess GIF.
Speaker 16: Yeah, you know, I love this idea. And again it's
Speaker 16: going back to like just make your life a little
Speaker 16: bit easier. You don't have to make your own.
Speaker 17: Here can we say, a Lottie, what did you say?
Speaker 2: You want it easy and simple?
Speaker 16: And you know, one of the one that kind of
Speaker 16: jumped out to me was the soup dumpling set. I
Speaker 16: had a brother in law and my sister who came
Speaker 16: to visit earlier this year, and they were like, you
Speaker 16: know what, I want the New York experience. I want
Speaker 16: to know where to get a bagel, I want to
Speaker 16: get some pizza, and I want to get the Chinatown
Speaker 16: soup dumpling. And so I sent them to the place
Speaker 16: where naan while where you get soup dumplings. I went
Speaker 16: down a visit last week. He was like, if you
Speaker 16: can bring some of those soup dumplings with me, and
Speaker 16: I'm like, you know what, I'm just going to send
Speaker 16: them to you.
Speaker 2: It's a great right, It's a really sweet gift, Kait, No.
Speaker 17: It really is. And they're pro they really are. Like
Speaker 17: those soup dumplings are the star of the dim sum
Speaker 17: table and they've really become synonymous with being kind of
Speaker 17: an expert. They're sort of tricky to eat, you know,
Speaker 17: because they're like so juicy, they're filled with froth, so
Speaker 17: you use a spoon but chop six. So this is
Speaker 17: actually a good way to practice to get really good
Speaker 17: at your dumpling soup dumpling eating game. But there's also
Speaker 17: the woman who did this, Caddo Deell got all these together.
Speaker 17: And there's also a really terrific biscuit company that comes
Speaker 17: out of Nashville. Their bisit is called Biscuit Levers Brecky Biscuits.
Speaker 17: I keep picking the names in they're hard to say. There.
Speaker 17: I've heard about these biscuits actually from people who have
Speaker 17: been to Nashville, and there's good and they actually you
Speaker 17: know him.
Speaker 2: Jim Yeah, oh my god.
Speaker 17: And they come with seasonal butter. So now I think
Speaker 17: in the fall they had maple butter and now they've
Speaker 17: just switched to brown sugar cinnamon, which sounds like a
Speaker 17: good dream, Like it sounds it's cold here in London
Speaker 17: today and I feel like that's what I want right now.
Speaker 2: All right, it's a red wine geez crackers for the crackers.
Speaker 2: Let's just get the business, all right. I want to
Speaker 2: get because they're running out of time. But the southern comfort.
Speaker 2: I love this story about what's happening at the airport
Speaker 2: in Atlanta, Like who knew?
Speaker 17: Have you ever? Oh my god, Carol. Literally there are
Speaker 17: people who book who book through Atlanta now, and that
Speaker 17: is no small airport. In fact, it's the busiest airport
Speaker 17: in the world, the Hartfield Jackson Atlanta Airport, and people
Speaker 17: book to go to one flu South, which has been
Speaker 17: around for a little bit. It started off it had
Speaker 17: like a really good reputation for cocktails. But in the
Speaker 17: last little bit the food. They have this really great chef,
Speaker 17: Todd Richards, and he creates a he just knows everything
Speaker 17: about stressed out travelers and stressed out people walking through
Speaker 17: the door, and he knows how to instantly make them
Speaker 17: feel comfortable. So and like part of it, I thought
Speaker 17: it was kind of great to talk to him because
Speaker 17: he says, do a buffet because it makes your life
Speaker 17: easier because you don't have to worry about doing plating,
Speaker 17: you know, for people. And you also don't have to
Speaker 17: worry about later early arrivals as long as you have
Speaker 17: things that can sit there and be reheated or just
Speaker 17: are don't have to be at a certain temperature. But
Speaker 17: he also encourages you to do a food, sort of
Speaker 17: food like chili that people will have their own stories about,
Speaker 17: and then that's like a conversation starter right there.
Speaker 8: I love it.
Speaker 2: I love it. Next trip, I'm gonna be like, I'm
Speaker 2: sorry I have to go through Atlanta because I've never
Speaker 2: done it.
Speaker 17: You really do.
Speaker 2: There's so much more to the in the section Panama City.
Speaker 2: I recently went to Panama. It's like interesting stuff going there.
Speaker 2: We're running out of time, but I have to. And
Speaker 2: James Tarmi on the new movie on Leonard Bernstein. So
Speaker 2: it's really really great read for the holiday and some
Speaker 2: great tips.
Speaker 8: Guys.
Speaker 2: I love, love, love you. Thank you so much.
Speaker 17: Have I got Carol? Yeah, you made my holiday.
Speaker 2: Likewise, likewise, Jim, thank you so much. Always a treat.
Speaker 2: Thanks to Bloomberg Pursuits Deputy editor Jim Gaddy and Bloomberg
Speaker 2: News Food editor Kake Creator. We love we do love
Speaker 2: you guys, and happy holidays. You're listening to Bloomberg Business Week.
Speaker 2: Coming up, we stick with the holiday entertaining theme and
Speaker 2: check on the soaring demand for people with white beards
Speaker 2: and red suits. We'll catch up with the founder of
Speaker 2: Hire Santa. He's actually also ahead, elf. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on
Speaker 1: Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App,
Speaker 1: or watch us live on YouTube.
Speaker 2: Tell you one s that's right. Everybody set a class
Speaker 2: is come to town at the most wonderful time of
Speaker 2: the year. The eras Chris Bloomingdales has its holiday window
Speaker 2: display up. People are decorating their Christmas trees and decking
Speaker 2: the halls, and a large team of Santa's are coming
Speaker 2: to town, appearing at malls and retail outlets around the country.
Speaker 2: He's everywhere and sometimes she's everywhere. Explain that in a moment.
Speaker 4: That's true. Hey, this year, things are a little bit
Speaker 4: different than years past, though. Demand for Santa's is actually
Speaker 4: far exceeding supply, at least according to our next guest,
Speaker 4: who knows quite a bit about goings on at the
Speaker 4: Old North Pole. Mitch Allen is the founder and head
Speaker 4: elf of Hire Santa. It's a Santa Claus talent and
Speaker 4: staffing agency and what it does is it places Santa's
Speaker 4: at events, parties, malls and more all over the US.
Speaker 4: Mitch joins us on a zoom from South Lake, Texas. Mitch,
Speaker 4: good to have you with us this afternoon. So the
Speaker 4: Santa biz you went pretty well in twenty twenty three, No,
Speaker 4: it sure is.
Speaker 15: We've had more demand for Santa Claus entertainers than we've
Speaker 15: ever had before, and all types of it, whether it
Speaker 15: be a home office, retail establishment, malls. Everyone wants to
Speaker 15: associate themselves with Christmas, the use of Santa.
Speaker 2: Totally get it. I'm also a fan of Velfa on
Speaker 2: the Shelf. Just going to put it out there, hey, Mitch,
Speaker 2: I mean, so our numbers up, demand is up from
Speaker 2: what pre pandemic levels, like, What's what is? I don't know,
Speaker 2: is it just been you've been seeing organic growth? Has
Speaker 2: there been a recent peak, give us an idea, give
Speaker 2: us some perspective.
Speaker 8: Sure.
Speaker 15: So here at Hiresanta dot com, we've seen the demand
Speaker 15: for Santa's people reaching out to us is up over
Speaker 15: thirty six percent over last year, and last year was
Speaker 15: record demand, even higher than pre pandemic. And that's turned
Speaker 15: into more events. Our actual events that we've booked is
Speaker 15: up over one hundred and fifty two percent over last
Speaker 15: year and many times that over pre pandemic levels. So
Speaker 15: people are using it. And what's interesting is we don't
Speaker 15: necessarily have a Santa index, but that's what I'm calling it,
Speaker 15: that small and medium sized businesses are really using Santa
Speaker 15: this year. I think that's going to be a blockbuster
Speaker 15: year for small and medium sized businesses. If the demand
Speaker 15: for Santa claus at these established is any indication.
Speaker 4: How much does it cost to rent a Santa?
Speaker 15: Yeah, so it really depends date, time, location, and how
Speaker 15: long you need Santa.
Speaker 4: Okay, during the Christmas season, I'm not talking about it.
Speaker 4: I'm not talking about it. Your life Santa.
Speaker 2: Here, everybody's invited. We're talking about four hours I need Santa.
Speaker 15: So if you need sand to come your home or
Speaker 15: office for just a couple of hours. You're talking about
Speaker 15: two to four hundred dollars per hour for a Santa
Speaker 15: Claus entertainer. Now if you do for a mall, the
Speaker 15: hourly rate is obviously much less.
Speaker 2: All right, Mitch, is there a Santa School?
Speaker 15: You know, this is one of the surprising things that
Speaker 15: people don't realize. There is a vibrant Santa Claus community
Speaker 15: out there, whether it be online or in person. Lots
Speaker 15: of organizations. There's Santa schools and conventions around the country,
Speaker 15: and that's where we go and recruit our Santa Claus
Speaker 15: is for higher Santa dot com.
Speaker 4: Hey, how seasonal is your business?
Speaker 15: Well, the actual delivery of our service is extremely seasonal,
Speaker 15: about six seven weeks, but it's a full year business
Speaker 15: at Hire Santa. The first half of the year is
Speaker 15: really about seals. It's getting those large contracts, those malls,
Speaker 15: those retail establishments we're working and then we're trying to
Speaker 15: get those contracts as well as we're trying to get
Speaker 15: more Santas. This last year we added over eleven hundred
Speaker 15: Santa Claus entertainers to our database alone, and so it
Speaker 15: is full season, but really it's go time. It's fourth
Speaker 15: quarter during the last part of November and of course
Speaker 15: all of December.
Speaker 2: All right, so what's interesting is you shared with us
Speaker 2: some research that you guys have done in some of
Speaker 2: the Santa's talk about their best experiences of twenty twenty two,
Speaker 2: which are incredibly heartwarming. But I want to go to
Speaker 2: the worst experiences of twenty twenty two. What are some
Speaker 2: of the rough experiences? We have about forty five to
Speaker 2: fifty seconds left, just give us a couple.
Speaker 15: Well, you know, the rough experiences are really when Santa
Speaker 15: gets sick or injured. You know, every single year for
Speaker 15: us we lose Santa Claus entertainers. You can imagine, they're
Speaker 15: older gentlemen, they're susceptible to COVID and negative outcomes with that.
Speaker 15: Or we've had this year alone, we had Santa's already
Speaker 15: in a car accident, a wife got sick. So those
Speaker 15: are really heart breaking themselves, as well as you really
Speaker 15: get the touching things whenever a child is wanting something,
Speaker 15: they're sick, or their parents are sick and they're wishing
Speaker 15: something for them. But it's a wonderful time, and Santa's
Speaker 15: really enjoys spreading that love and joy of Christmas.
Speaker 2: I thought you were going to tell me about the
Speaker 2: Santa that flobed the lyrics to Frosty the Snowman at
Speaker 2: a daycare. That's what I was opening for a little levity,
Speaker 2: A little levity.
Speaker 15: Yeah, yeah, we get that a lot too. And you know,
Speaker 15: we've actually been on air and asked somebody Santa's to,
Speaker 15: you know, name the reindeer. Uh, and they just froze
Speaker 15: and so.
Speaker 4: Did a lot of them.
Speaker 2: Mitch Allan, Merry Christmas, Happy Holidays, Founder and head elf
Speaker 2: of hires Santa, joining us from Texas where they're Santas.
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