Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. Hi, I'm
Speaker 1: Jason Kelly and I'm Kaylee Lines in for Carol Masser.
Speaker 1: Welcome to the Bloomberg Business Week Weekend podcast. In this episode,
Speaker 1: we're going to bring you news of the week, insights
Speaker 1: from the magazine, and more, including your holiday gift guide.
Speaker 1: That's right, and before we get to that, Kaylee and
Speaker 1: I love the holiday gift Guide because there's some very
Speaker 1: high end things that probably no one's gonna buy from me,
Speaker 1: but that's cool. But there are things that I learned
Speaker 1: about that maybe I didn't even think I needed to know.
Speaker 1: We're also going to talk about Nike. We're going to
Speaker 1: talk about we work two companies in the midst of
Speaker 1: sort of challenges of their own, multiple challenges going on
Speaker 1: for those companies. Plus it might be my favorite story
Speaker 1: of the week, Jason. Open source software has gone from
Speaker 1: a joke to the engine of the world technology and
Speaker 1: it's hidden in an Arctic cave. Yeah, who knew that.
Speaker 1: If you really wanted to understand where the world might
Speaker 1: go in case of disaster, it's hidden in a cave
Speaker 1: way way way up north. But first up, Jason, it's
Speaker 1: one of the biggest stories of the week and of
Speaker 1: the year. I know you guessed it. It's trade. So
Speaker 1: kayleie trade. Obviously, it's a market driver, it's a business driver.
Speaker 1: It's a headline driver. To say the least, this trade
Speaker 1: war between the U S and China. Trade writ large.
Speaker 1: It feels like one of the only things we talk
Speaker 1: about ever. Sean Donnan, that's all he does. He is
Speaker 1: obsessed with trade, and that's why we love him. We
Speaker 1: love catching up with him, and his story in the
Speaker 1: magazine this week really talks about the contours of this
Speaker 1: trade deal, and maybe the contours aren't quite as ambitious
Speaker 1: as we once thought they might be. He joins us
Speaker 1: from Washington. So Sean, tell us where we are and
Speaker 1: how big or how small this deal looks. Yeah. What
Speaker 1: we really tried to do with this piece, my colleague
Speaker 1: Jenny Leonard and I, who cover this on a day
Speaker 1: to day basis, is to step back and and really
Speaker 1: look at the the arc of this thing. And we
Speaker 1: have gone. It's worth remembering from a carefully craft did
Speaker 1: plan to take on China and force some really fundamental
Speaker 1: structural changes in China's economic architecture to what now is
Speaker 1: shaping up as a pretty narrow deal and some more
Speaker 1: talks to come. And we really have gotten there as
Speaker 1: a result of Donald Trump and his unpredictabilities, what some
Speaker 1: would say his impetuousness, uh, and all of those tariffs
Speaker 1: that he has thrown on the table that have really
Speaker 1: changed the game here, and they're going to have lasting
Speaker 1: consequences for what is really the most important economic relationship
Speaker 1: in the in the world. Well, and what exactly are
Speaker 1: those lasting consequences going to look like? Because as this
Speaker 1: narrative is drawn out for the better part of eighteen
Speaker 1: months now, it now kind of looks like maybe we're
Speaker 1: just going to get back to where we were at
Speaker 1: the start of all this rather than some more fundamentally
Speaker 1: different than we were at the beginning. Yeah. So I
Speaker 1: think there's two big consequences here. One is is kind
Speaker 1: of the hard economic consequence, uh, the disruption that we've
Speaker 1: had from from this trade war. There are now tariffs
Speaker 1: from the U. S side on three sixty billion dollars
Speaker 1: in imports from China. That's about seventy or so of
Speaker 1: those imports. Uh. That is a big drag for a
Speaker 1: lot of businesses who rely on components from China or
Speaker 1: do manufacturing in China. UM, it also is UH has
Speaker 1: hit the more broadly business sentiment, and the risk is
Speaker 1: also a consumer sentiment down the line. There's a reason
Speaker 1: we were talking about fears of recession here in the
Speaker 1: US in August, and one of the big reasons was
Speaker 1: the trade wars, the second big consequences. Everyone agrees that
Speaker 1: the US or a US administration, whoever was in the
Speaker 1: White House, had to take on China and really had
Speaker 1: to kind of renegotiate the rules of the relationship. Donald
Speaker 1: Trump went all in on that in some pretty brutal
Speaker 1: tactics when it comes to international economic diplomacy. There's nothing
Speaker 1: blunt or than a tariff when it comes to negotiating
Speaker 1: these things. And UH, he raised the stakes. And the
Speaker 1: question is has he delivered, will he have delivered? And
Speaker 1: what does that mean for the future. Can another American
Speaker 1: president come in and repair the relationship or have another
Speaker 1: go at it? And that is really going to define
Speaker 1: the relationship going forward. We've got a new level of
Speaker 1: hostility between Washington and Beijing that we really didn't have
Speaker 1: three or four years ago. Well, and Sean, you know,
Speaker 1: one of the things you mentioned in your piece talks
Speaker 1: about the relationship and some of the moments along the
Speaker 1: way that the President and the administration have had with
Speaker 1: business leaders, you know who have stepped in at times
Speaker 1: to maybe try and convince him to do something different
Speaker 1: than what he was thinking. And these are well known names,
Speaker 1: the CEO of Walmart, CEO of Blackstone, CEO of Best Buy,
Speaker 1: UH and others. What role has business played, if any,
Speaker 1: in shaping this narrative, Well, we know that there's there's
Speaker 1: been two parallel conversations that have gone on between the
Speaker 1: president and his aids and between President UH and people
Speaker 1: he respects and counts on for advice in business. It's
Speaker 1: not just those he as you mentioned, It's Steve Schwartzman UH.
Speaker 1: It's also people donors like Sheldon Adelson and UH and
Speaker 1: mainstream business figures like Tim Cook from Apple, who really
Speaker 1: has all along been lobbying for the Trump administration to
Speaker 1: take a more cautious approach or to be careful what
Speaker 1: path it goes down because it does a lot of
Speaker 1: manufacturing in China and also relies on China in a
Speaker 1: big way as a market. So you know, Trump set
Speaker 1: out to disrupt this economic relationship. That also means disrupting
Speaker 1: business relationships, and business has really been trying to kind
Speaker 1: of restrain him or at least put him on a
Speaker 1: path uh to getting some meaningful changes that they do want.
Speaker 1: The businesses have long complained about things like the licensing
Speaker 1: process in China, the subsidies that big Chinese state owned
Speaker 1: companies benefit from also private sector companies, and that kind
Speaker 1: of unfair competition that you get from China, the intellectual
Speaker 1: property theft, and and and so on. Again. The big
Speaker 1: question as we kind of near the one year to
Speaker 1: go to the election, is has Trump's China gambit paid
Speaker 1: off for businesses? Has it really changed the equation? And
Speaker 1: that's Sean Dunn and talking about his story on trade
Speaker 1: with Jenny Leonard and Kaylee. One of the things that
Speaker 1: I really liked about this was if you've been following this,
Speaker 1: and especially if you haven't, it's a great summation of
Speaker 1: both the strategy and the tactics, the twists and turns
Speaker 1: that this huge trade conversation has taken. It's a really
Speaker 1: great reminder of the fact that where we are now
Speaker 1: is nowhere even close to where we began about eighteen
Speaker 1: months ago. All Right, Jason, I got to start off
Speaker 1: with saying, I love the headline on this next story.
Speaker 1: India's series of enguished Trolls and princesters to become the
Speaker 1: world's most popular YouTube channel. So here to tell us
Speaker 1: more about it is Lucashaw from Los Angeles. He co
Speaker 1: wrote the story with another reporter, I mean, Lucas tell
Speaker 1: us more about T Series. It's a Bollywood company, it's
Speaker 1: a film studio. It owns a bunch of music. What's
Speaker 1: their deal. It is the largest record label in India.
Speaker 1: It controls anywhere from thirty of the market, which in
Speaker 1: India is one of the most music craze countries in
Speaker 1: the countries in the world. All their biggest movies, or
Speaker 1: at least most of them feature singing and dancing in
Speaker 1: a way that the movies you'll see in the US
Speaker 1: and Europe don't. And what T Series has done over
Speaker 1: the past few years is kind of twofold. One is
Speaker 1: they've really expanded their film production, so they're you know,
Speaker 1: they started off buying the right to soundtracks, which is
Speaker 1: this weird business in India where before the movie even
Speaker 1: comes out, you sort of buy the right to release
Speaker 1: that soundtrack. Probably only one in every ten or twenty
Speaker 1: actually hits, but if that one hits, you make a
Speaker 1: lot of money. And that's how they that's in many
Speaker 1: ways how they started. Then they start making their own movies,
Speaker 1: kind of leveling up, and they also expand did heavily
Speaker 1: on YouTube, and over the past few years, as YouTube
Speaker 1: and internet more broadly in India has taken off, T
Speaker 1: Series has been one of the biggest beneficiaries. You know,
Speaker 1: they went from having just twelve million subscribers a couple
Speaker 1: of years ago to now having I believe a hundred
Speaker 1: seventeen million, which is more than than any channel by
Speaker 1: quite a bit. Well, and Lucas, one of the things
Speaker 1: you guys point out in the store, which I found
Speaker 1: so fascinating and didn't know before, is really just the
Speaker 1: way that media and music are consumed in India. To
Speaker 1: your point, it's it's just totally different and in some
Speaker 1: ways not hard to get your head around, but surprising. Yeah.
Speaker 1: I mean, one of the quirks from earlier in T
Speaker 1: series history is, you know, the music industry in the
Speaker 1: US and Europe. You sort of went from buying c
Speaker 1: d s, which was really the golden age of the
Speaker 1: music business because you'd pay twenty dollars for a whole CD,
Speaker 1: you probably only wanted three or four songs. Then you
Speaker 1: had piracy sort of disrupt the model. Then you know
Speaker 1: iTunes came along and it made it so that you
Speaker 1: could buy an individual song instead of having to buy
Speaker 1: the full album. That digital storefront in that we had
Speaker 1: in the West never really happened in India. So they
Speaker 1: went from hind of cassettes and CDs to having ring tones.
Speaker 1: For a really long time, was the one way that
Speaker 1: you could listen to music online. That was at one
Speaker 1: point T series is biggest line of revenue. And then
Speaker 1: it went into streaming, which is where we are now.
Speaker 1: But whereas paid streaming has become k of the biggest
Speaker 1: money maker for the music business in the US, Europe
Speaker 1: and in parts of Latin America, getting people to pay
Speaker 1: in India, which is a much poor country, has been
Speaker 1: a difficult proposition, which has enabled YouTube, which is really
Speaker 1: the biggest free music streaming service in the world, not
Speaker 1: just in India but everywhere. Think about the way people
Speaker 1: use YouTube in the US, in England, across Europe, music
Speaker 1: is the number one category and YouTube, but in India
Speaker 1: that is magnified times ten times A hundred and so
Speaker 1: if you look up globally the top like the top
Speaker 1: fifty music channels in India in any given week, excuse me,
Speaker 1: the top fifty music channels in the globe in any
Speaker 1: given week, about half of them are from India. I mean,
Speaker 1: how much more growth can they get on YouTube? Because
Speaker 1: and India has a lot of people, A lot of
Speaker 1: people are usually connected, but a lot of people aren't
Speaker 1: yet there should be plenty of growth kind of ahead
Speaker 1: of it. So far, I believe there are six hundred,
Speaker 1: six hundred fifty million Indians connected to the Internet. But
Speaker 1: this is a country with more than one point three billion,
Speaker 1: close to one point four billion people, growing at a
Speaker 1: rate where it's expected to surpass China's the most populous
Speaker 1: country in the world in in just a few years.
Speaker 1: And T series will will definitely reap the benefits of that.
Speaker 1: You know, YouTube has I think two three hundred million
Speaker 1: monthly active users in India. India is now the number
Speaker 1: one market for YouTube in the world, and most people
Speaker 1: at at YouTube and in the music industry expect that
Speaker 1: to grow. That's why you've seen Spotify, Apple Music, a
Speaker 1: lot of paid streaming services launched in India, in the
Speaker 1: past few years because they expect the number of people
Speaker 1: listening to music over the Internet to skyrocket well. And
Speaker 1: for foreign companies coming into India, does that pose an
Speaker 1: existential threat to those like T series or is that
Speaker 1: an opportunity for them. I think it's more of an opportunity.
Speaker 1: You know, there is certainly a threat as as companies
Speaker 1: like Netflix trying to make Indian originals. Maybe those movies
Speaker 1: are more popular than T series, but for the most part,
Speaker 1: they're gonna rely on T series to try to get fans.
Speaker 1: You know, T Series sees its future is having this
Speaker 1: this virtual cycle where they let's say they have a
Speaker 1: movie coming out that they're making. They upload a video
Speaker 1: to YouTube that's a song from that movie or that
Speaker 1: teases that movie. It gets a ton of attention. They
Speaker 1: make money from that from advertising that promotes this movie,
Speaker 1: which then becomes a hit, and it leads yours back
Speaker 1: to the YouTube channel to more music. And if you
Speaker 1: listen to big tech companies Netflix, Amazon, you know, this
Speaker 1: is a little bit Pollyanna Pollyanna ish of them, But
Speaker 1: they like to talk about how they're connecting people around
Speaker 1: the world two different types of culture and serving as
Speaker 1: these bridges. Sometimes that's not true. But in the case
Speaker 1: of T Series, it's a really great example where YouTube
Speaker 1: has taken a record label from India, made it the
Speaker 1: number one channel in the world. And while the majority
Speaker 1: of its viewership comes from India, T Series told me
Speaker 1: that thirty of their viewership comes from outside of India.
Speaker 1: That can be the diaspora in the UK, US, Canada
Speaker 1: and it maybe even just fans who decide they really
Speaker 1: like Bollywood right well. And it's such an interesting observation
Speaker 1: too in this week where Disney Plus is launching, and
Speaker 1: I feel like we're talking in a whole different way
Speaker 1: about business models, consumption of media, global brands, as you say,
Speaker 1: And so given that, where does this company sort of
Speaker 1: fit in to the global landscape as all of these
Speaker 1: companies have increasingly wide ambitions, I think they become a
Speaker 1: major supplier. That's at least the ambition, right is they
Speaker 1: They say that they're already talking to both Netflix and
Speaker 1: Amazon about selling them shows. Disney Plus, which launched in
Speaker 1: the US this week, is going to expand globally. It's
Speaker 1: going to go to Western Europe, it will probably go
Speaker 1: to parts of Asia at some point. Although Disney has
Speaker 1: its own streaming service in India called hot Star, and
Speaker 1: they'll just be a desire for local language programming because
Speaker 1: as we have services that exist all around the world
Speaker 1: as a recognition that US programming alone is not enough.
Speaker 1: It's something that Netflix has really been a leader in. Yes,
Speaker 1: Netflix has hundreds of original series and movies and documentaries
Speaker 1: that are in the English language, but they're also going
Speaker 1: to make more than a hundred shows next year that
Speaker 1: are in other languages, and that can be in Swedish,
Speaker 1: it can be in German uh, and then it can
Speaker 1: also be in Japanese. And T Series is there to
Speaker 1: to supply anybody who wants to come along and buy
Speaker 1: from them. I don't think the company sees itself as
Speaker 1: competing as owning its own platform. If you will, you know,
Speaker 1: STI has no interest in going head to head with YouTube.
Speaker 1: YouTube is just it's best distribution vehicle right now. Spotify
Speaker 1: as another distribution vehicle for it, and at another and
Speaker 1: maybe down the line that will be Netflix, Amazon, Disney
Speaker 1: Plus and so on. That was Lucas Shaw chatting about
Speaker 1: his T Series story and Jason. This was so interesting
Speaker 1: to me because it's a Bollywood film studio it's a
Speaker 1: music owner and it's a YouTube channel. I mean, they
Speaker 1: have so much going on here well, and it's one
Speaker 1: of these reminders as well, this notion that Bollywood what
Speaker 1: a massive industry, but also the size and scope kids
Speaker 1: lead of the Indian consumer economy. I think we underestimate
Speaker 1: or even forget how powerful that is for global companies
Speaker 1: and domestic companies there in India, especially considering only about
Speaker 1: half of them or even online to this point. So
Speaker 1: it's definitely an interesting story to watch. Eben O v
Speaker 1: Williams is here the sneakers arms race. What's going on? Yeah,
Speaker 1: So a couple of years ago, Nike released a running
Speaker 1: shoe that was significantly better than any other running shoe
Speaker 1: on the market from a from a speed and a
Speaker 1: recovery standpoint, and it became a big deal for you know,
Speaker 1: average joe runners like the three of us, but it
Speaker 1: became a bigger deal in competitive and professional circles where
Speaker 1: you know, the difference between a lot of these runners
Speaker 1: can be seconds over an entire marathon. Uh, Nike shoe
Speaker 1: which builds itself as four percent more efficient you know
Speaker 1: over a marathon, that's a couple of minutes, right, that's
Speaker 1: a huge gap. So the shoes became a huge deal
Speaker 1: in the professional world, where the people who are wearing
Speaker 1: them were setting records and winning races, and a lot
Speaker 1: of the people who were not wearing them, we're not
Speaker 1: having the same success. So I guess the question is
Speaker 1: is that fair? Yeah, so this is the major question.
Speaker 1: And as a caveat, you know, every other shoe company
Speaker 1: right now is working to reproduce what Nike has. There's
Speaker 1: a carbon fiber in these shoes. The four ft is
Speaker 1: a little steeper, so it kind of rocks you forward.
Speaker 1: It's new lightweight foam. You know. I've spoken to a
Speaker 1: number of designers at a number of other companies. Everyone
Speaker 1: is working on replicating exactly what Nike did. Um. But
Speaker 1: as they do that, Nike is working on whatever it
Speaker 1: thinks is faster and faster UM. And I think the
Speaker 1: fear in the industry is that, you know, Nike, he's
Speaker 1: a thirty six billion dollar revenue a year company. Most
Speaker 1: of these companies saw cony Brooks much much, much, much smaller,
Speaker 1: um that that Nike may be able to kind of
Speaker 1: keep iterating their way ahead of the pack and therefore
Speaker 1: consistently have the fastest shoes on the market. Well, and
Speaker 1: you make a really important comparison in your story back
Speaker 1: to something I think we all remember from the Olympics
Speaker 1: a few years back, which was those sleek swimsuits that
Speaker 1: led to a bunch of records being broken and then
Speaker 1: ultimately got bamned. Exactly. Yeah, back in the you know,
Speaker 1: eight two thousand's before um, those long speedo swimsuits which
Speaker 1: Michael Phelps was wearing. Over a hundred world records were
Speaker 1: broken in those suits, and the governing body for swimming
Speaker 1: came out and said, listen, we can't do this anymore.
Speaker 1: You know, the swimsuit can't cover this amount of your body.
Speaker 1: You know some of the materials in that suit, you
Speaker 1: know that we're helping with buoyancy. Can't do that anymore. Uh.
Speaker 1: The reason why I think the shoe story is so
Speaker 1: interesting right now is because the I double a f
Speaker 1: tracks governing body is now looking at this exact thing.
Speaker 1: You know, they've convened athletes and scientists and sports ethicists
Speaker 1: and they're getting together right now and they're saying, listen,
Speaker 1: what do we or do we do anything to kind
Speaker 1: of clarify our rules because right now the rules are
Speaker 1: very very vague and opaque. Well, and that begs the
Speaker 1: question how hard of a line is that to draw?
Speaker 1: When it's a okay, performance enhancement, it just makes you
Speaker 1: run better. To this is now putting others at a
Speaker 1: competitive disadvantage. We really need to read this. Yeah, and
Speaker 1: that's a great question. And it's not as easy as
Speaker 1: maybe it was for the swimming governing body. Right, they
Speaker 1: could theoretically outlaws some of the materials. I've heard people
Speaker 1: say there shouldn't be allowed carbon fiber plates and shoes.
Speaker 1: Other people say, you know, the four foot and hell height,
Speaker 1: or maybe the springing and the efficiency. There's different kind
Speaker 1: of metrics you can maybe used to draw the line.
Speaker 1: The funny thing is everyone in the shoe world wants
Speaker 1: no restrictions, right, whether you're Nike, whether you're Brooks, whether
Speaker 1: you're scconi. Everybody says, you know, we want to be
Speaker 1: able to create great technology and if it continues to
Speaker 1: make runners faster and faster, great And the truth is
Speaker 1: that that helps other runners, right that if you go
Speaker 1: to starting lines of the marathon, so many people are
Speaker 1: in these Nike shoes because they're faster and they're more efficient. Right,
Speaker 1: So Adidas, so all these other companies, even if you're
Speaker 1: not Nike, just feel like, listen, if I can make
Speaker 1: a better shoe, it's going to help me sell them
Speaker 1: to the masses, not just to put them on the
Speaker 1: on the feet of Olympians. And that helps my business
Speaker 1: as well well. And it's interesting to you think about
Speaker 1: other sports, especially that are widely played by consumers, whether
Speaker 1: it's tennis or golf. I mean, the technology revolutions in
Speaker 1: those sports have been massive over the last fifty years. Yeah,
Speaker 1: and and the really fascinating thing. And track is also
Speaker 1: a good exam right. You know, if you go back
Speaker 1: eighty years, they were running on cinder block track, right,
Speaker 1: and now they're running on a much faster surface. Um.
Speaker 1: But the main difference to that, to me is that
Speaker 1: that was a lot of those were were technology iterations
Speaker 1: that were available to everybody. Right. As soon as the
Speaker 1: track got better, everyone got faster. Right. This is a
Speaker 1: situation where if you're a Nike athlete, you got faster
Speaker 1: the moment Nike put out these shoes. But if you
Speaker 1: were a Brooks athlete, or you were an athlete of
Speaker 1: a different company, you know, you're kind of waiting for
Speaker 1: the engineers at your company to make you as fast
Speaker 1: as the as the other person got boosted. And this
Speaker 1: is the fear I think. I spoke to Ryan Hall,
Speaker 1: who's a former professional runner, and one of the things
Speaker 1: he was saying is that he fears that if Nike
Speaker 1: continues to make the fastest shoes, everyone who wants to
Speaker 1: be on the podium at the Olympics, at trials, at
Speaker 1: World Championships is going to be wearing Nike. And when
Speaker 1: Nike fully curbs the market on athletes, they kind of
Speaker 1: have already, but once they fully do it, then they
Speaker 1: can essentially set the price for whatever they want to
Speaker 1: pay these guys. And that's Evan nob Williams talking about Nike,
Speaker 1: and it's applicated for Nike, right, Kaylee, in the sense
Speaker 1: that they are so closely associated with running the roots
Speaker 1: of the company are there. It's been a huge driving
Speaker 1: force for them. But a new CEO coming in is
Speaker 1: going to have to deal with controversy in many forms.
Speaker 1: And it's so interesting to think about what the company
Speaker 1: is going to look like going forward, especially it's running program.
Speaker 1: How do they rebuild it? What does it look like?
Speaker 1: So Kayley, this week's cover story. It's about the ultimate
Speaker 1: backup drive. A cave in the Arctic holds the world's
Speaker 1: most important code. Bloomberg's Ashley Vance takes this inside with
Speaker 1: GitHub CEO Not Friedman. So we're here in Salvard at
Speaker 1: seventy eight degrees north latitude, at the site of the future.
Speaker 1: In GitHub Arctic Code Vault. He's depositing six thousand of
Speaker 1: the most popular open source projects in an archive inside
Speaker 1: this mountain. Open the vault. This is how it works.
Speaker 1: The data is stored on a reel of film coated
Speaker 1: with iron ox side powder. The information can still be
Speaker 1: read by a computer or, if need be, by a
Speaker 1: human with a magnifying glass. How long will this last?
Speaker 1: Were confident for a thousand and we're aiming now to
Speaker 1: do a research project to document two thousand, two thousand years.
Speaker 1: Do you think this could last years? Let me catch
Speaker 1: you up on who that is. That's company. Get hub
Speaker 1: is the main place people go to write open source code.
Speaker 1: Tens of millions of people hop on geth hub and
Speaker 1: create the applications that make the world tick, which is
Speaker 1: why not wants to protect it from terrorist hackers, electromagnetic pulses,
Speaker 1: and other unforeseen disasters. I mean, this is real one
Speaker 1: of the get hub Arctic code fault, and we're gonna
Speaker 1: put it here in small bard under the ice in
Speaker 1: the next two thousand years. I think twenty years ago,
Speaker 1: if you told someone that twenty years in the future,
Speaker 1: in the year all of human civilization will depend on
Speaker 1: run on open source code written for free and put
Speaker 1: into almost every product in the world, I think people
Speaker 1: would say, like that's crazy, like that's never gonna happen,
Speaker 1: like that software is written by big professional companies and uh,
Speaker 1: and yet here we are, and so how much of
Speaker 1: this is just making sure we could restore our way
Speaker 1: of life. I'm over all pretty optimistic about civilization, Like
Speaker 1: I think we can bet that, you know, humans will
Speaker 1: be thriving for a long time on planet Earth. And
Speaker 1: so another way to think about this is it's just
Speaker 1: like a time capsule, Like there's this amazing moment in
Speaker 1: history where the whole world is starting to run on software,
Speaker 1: and that software is made out of open source. Open
Speaker 1: source is sort of being everything that's actually advanced. With
Speaker 1: a look at protecting open source code in an Arctic
Speaker 1: cave and Jason, what really struck me is that the
Speaker 1: people who create this code. They're not paid to do it,
Speaker 1: they're not employed by any of these companies, and yet
Speaker 1: it's used by Apple, Twitter, Google, even in cars. It's
Speaker 1: wild well and in a post apocalyptic world, this could
Speaker 1: be the foundation for where we go from here. It's
Speaker 1: time now for another edition of Business Week Talks. This
Speaker 1: week we that would be me and Carol Masser spoke
Speaker 1: with Imran Kahan, the former chief strategy officer over it Snap.
Speaker 1: He's now the CEO of Veri, a shop. He talked
Speaker 1: about surviving the wrath of Jeff Bezos. Here's that conversation.
Speaker 1: So tell us a little bit about what you're doing
Speaker 1: a very because do you think about Amazon constantly when
Speaker 1: you're thinking about strategy for you guys, Uh, I fundamentally
Speaker 1: believe that one company cannot solve all problems. And I
Speaker 1: think if you look at e commerce right now is
Speaker 1: ten percent of overall retail sales and um. And there's
Speaker 1: a funny story. In two thousand four, I was a
Speaker 1: research channelist and I went to see Netflix and read
Speaker 1: Hastings told us that when he reached seven point five
Speaker 1: percent penetration in the Bay Area, first Blockbuster was shut
Speaker 1: down and he told us that when I get to
Speaker 1: seven and a half to ten percent penetration nationally, the
Speaker 1: Blockbuster will go out of business, and that exactly happened.
Speaker 1: And then in advertising business, when Google and Facebook got
Speaker 1: ten percent of digital ad dollar, we saw an excellented disruption.
Speaker 1: And now digital advertising is forty percent of all advertising.
Speaker 1: And if you look at online retail is now ten
Speaker 1: percent of overall retail sales. So I believe that in
Speaker 1: next ten to fifteen years, online retail of it. So
Speaker 1: we're going to see excellent depreciation because the seven and
Speaker 1: a half to ten percent is the magic number when
Speaker 1: things start really falling apart. And so how do you
Speaker 1: capture that slice of it? You've been doing this even
Speaker 1: live for just a few months. Now, what are you
Speaker 1: learning about the marketplace that maybe you didn't know going
Speaker 1: into it? Yeah, I think in marketplace what's really missing
Speaker 1: is a lifestyle e commerce destination. Right, So if you
Speaker 1: need your commodity disposable utility product, Amazon is phenomenon. And
Speaker 1: if you need your luxury product, you know, like you
Speaker 1: want to buy Lucci Bucchie bag or weave a turn
Speaker 1: bag that you buy once a year, or you are
Speaker 1: a point one percent of world's population. That's all you buy.
Speaker 1: You know, you have a great relationship with those very
Speaker 1: expensive brands. They think about it for your everyday luxury product,
Speaker 1: you know, for everyday lifestyle product, there is no real
Speaker 1: destination to go. You know, you go to other brick
Speaker 1: and motor stores, or you go to this boutique place. Uh.
Speaker 1: And that's also happening at a time that we're seeing
Speaker 1: explosion of director consumer brands. Right everybody is built saying
Speaker 1: direct to consumer brands. So there is no place for
Speaker 1: consumers to go find discover new brands, find the brands
Speaker 1: all out and discover new brands. So we are creating
Speaker 1: a brand discovery platform where you can find all the
Speaker 1: cool brands for your everyday luxury plant. And with the
Speaker 1: convenience of Amazon, we now have the fastest free, fastest
Speaker 1: free online shipping in the marketplace, free one day shipping.
Speaker 1: We put our customers Support number on the top so
Speaker 1: that if you are going to call, you can talk
Speaker 1: to our customers, you know, and I read every customers
Speaker 1: support emails, and so we really stand for convenience, we
Speaker 1: stand for quality, and we stand for discovery. One of
Speaker 1: the ways that you are of grabbing share. It seems
Speaker 1: that through influencers that is well known to a lot
Speaker 1: of the influencers in this room. What have you learned
Speaker 1: about them? Because it's not so easy to identify the
Speaker 1: right people to figure out the right essentially business model
Speaker 1: around that, and it's not inexpensive. Sometimes, yeah, we're not
Speaker 1: doing that much with you know, uh, influences. To be
Speaker 1: completely honest with you, I have a philosophy is do
Speaker 1: completely opposite what the world is doing. You know, if
Speaker 1: you look at in New York City, you will see
Speaker 1: our outdoor campaign in the taxi top or if you
Speaker 1: take the subway, you know, you will see a very
Speaker 1: sharp brand train. You know. I think so fundamentally, I
Speaker 1: believe that consumers are smart and if and they understand
Speaker 1: the authenticity, you know, and and and the thing is
Speaker 1: that if influencers are too commercial and they're promoting too
Speaker 1: much of the product, I think it doesn't convert very well.
Speaker 1: So you really really have to understand that when you
Speaker 1: engage with the influences is an authentic relationship, because I
Speaker 1: think you really really have to appreciate that if you
Speaker 1: push your product in an inauthentic way, it's actually a
Speaker 1: huge turnoff for consumers because consumers know that you're trying
Speaker 1: to do them right. You know the bus When we
Speaker 1: started the company, we call it very Shop and what
Speaker 1: is very Shop Verified shop because we wanted to build trust.
Speaker 1: You know, the world is going from fake news to
Speaker 1: fake people to fake product, and we wanted to build
Speaker 1: this trusted platform. And and so you want to do
Speaker 1: marketing that you want to engage in a marketing in
Speaker 1: the trusted way? And is it right? One million shoppers
Speaker 1: or not yet? By the by the end of the year,
Speaker 1: you have a free one day shipping right now, but
Speaker 1: no in terms of the number of shoppers that are
Speaker 1: on your site right now? Oh yeah, I think by
Speaker 1: year and we'll have a million unique shoppers on a
Speaker 1: monthly basis. Alright, so we need to switch. Yeah, we
Speaker 1: gotta switch. Um. When you talk about turnoffs, one of
Speaker 1: the biggest turnoffs it feels like for the market this
Speaker 1: year and for a lot of people, was we work.
Speaker 1: You've got some thoughts on this. You've been watching this
Speaker 1: market as a banker, as an executive, as an entrepreneur.
Speaker 1: What happened? What went wrong? As you just still it
Speaker 1: down with we work? Um, the one word is corporate grid. Right. Uh.
Speaker 1: I think the key thing is whenever we give someone money,
Speaker 1: you give them your trust. It is a fundamental thing
Speaker 1: that people don't appreciate that that when an investors are
Speaker 1: forget about investor your friend or your parents or your
Speaker 1: uncle or and investors give you money, they give you
Speaker 1: the trust and and when you take that money, you
Speaker 1: have a responsibility. You have a responsibility to live by
Speaker 1: the trust they give it to you. And and I
Speaker 1: think oftentime we saw that the corporate executives don't appreciate
Speaker 1: the trust that investors give it to them. And and
Speaker 1: uh at we work, we saw the gross, gross negligence
Speaker 1: of that trust and they by Adam Newman executive level, yes,
Speaker 1: and the corporate greed is to a level that fundamentally
Speaker 1: I didn't see the since the world of well, what
Speaker 1: about the role of soft bank in this, right, the
Speaker 1: big investor obviously, and we work, and what about the
Speaker 1: role of investment bankers? Certainly when they tried to take
Speaker 1: it public and obviously all of a sudden, all these
Speaker 1: issues came out. Yeah, you know, responsibility of investment bankers.
Speaker 1: So two different questions, you know, I think, look, I
Speaker 1: think soft bank as an investors, you have to make
Speaker 1: two decisions right. One you have to analyze the investment
Speaker 1: as a scandal and investment opportunity. And we can argue
Speaker 1: whether we work with a good investment or a bad
Speaker 1: investment from an investment lens perspective, But what soft bank?
Speaker 1: And as an investors, you always have to trust the
Speaker 1: management and you give them the money, and if they
Speaker 1: don't follow through it, you know, I think it's very
Speaker 1: difficult for an investors. So I actually sympathize with slob Bank.
Speaker 1: I know everybody blames Sobbank, but I actually sympathize with
Speaker 1: subbank because they gave money to someone who completely tar
Speaker 1: around and trying to I didn't respect their trust. And Uh.
Speaker 1: With regards to Investment Bank, look, I think you know,
Speaker 1: clearly Investment Bank could have hired standard of due diligence.
Speaker 1: But you know the good news is they did the
Speaker 1: due diligence and they disclosed all this information we found, Like,
Speaker 1: do you feel like it was too late in the process.
Speaker 1: This is a company that was around for a while.
Speaker 1: I think Investment Banks they couldn't have disclosed before the
Speaker 1: filing anywhere because the company would not let them disclose
Speaker 1: it and that was very shop co founder Imran Khan
Speaker 1: speaking with Carol Master and myself at Bloomberg's Sooner than
Speaker 1: You Think Summit, just a couple of weeks ago. As
Speaker 1: so many things seemed to do these days, this next
Speaker 1: story started with a tweet, a series of tweets. Really uh,
Speaker 1: and it was all about credit cards. It took on
Speaker 1: a life of its own over the next several days,
Speaker 1: ensnaring in some ways Apple, Goldman, Sachs, the credit card industry, misogyny, algorithms,
Speaker 1: all of it. Uh. We're gonna get into that with
Speaker 1: Shri Nadaraja and he covers Goldman and Wall Street for Bloomberg.
Speaker 1: This credit card hailed as this revolutionary thing, and yet
Speaker 1: over last weekend it took on a different tone. What happened, right?
Speaker 1: I mean this all started with a series of tweets
Speaker 1: from a tech entrepreneur, David Hanson, who applied to the
Speaker 1: Apple Card and started complaining that his credit limit was
Speaker 1: twenty times the size of his wife's credit limit, even
Speaker 1: though both of them share the same finances, have joined accounts,
Speaker 1: same spending power, had the same income. When it came
Speaker 1: to the field, when Apple Card was trying to determine
Speaker 1: the credit limit, and yet there was this huge disparity.
Speaker 1: Post immediately gained traction online. A lot of people shared
Speaker 1: similar experiences and to add insult to engineer and perhaps
Speaker 1: the embarrassing bit here for Apple was Apple co founder
Speaker 1: Steve wasn't the exit Wait a minute, I faced the
Speaker 1: same issue before you know it, a regulator saying we
Speaker 1: want to figure out how these credit risk assessment tools work.
Speaker 1: We're going to probe Goldman, and we're going to probe
Speaker 1: this Apple god issue to see if there are some
Speaker 1: biases in the algorithm. So as an algorithm, But how
Speaker 1: much blame does Goldman have to take here? Is it
Speaker 1: just the algo or you know, is there something that
Speaker 1: Goldman can really do to fix this? Look In many ways,
Speaker 1: I truly believe that Apple and Goldman to market names
Speaker 1: in the world of tech and finance. But what you
Speaker 1: have here is those two have become lightning rods over
Speaker 1: an issue that has been bubbling for a while. People
Speaker 1: have tried to figure out as there has been this
Speaker 1: mission creep off tech in the financial services space is
Speaker 1: trying to figure out that innovation keeps up with the
Speaker 1: important regulatory factors need to make sure that it doesn't
Speaker 1: come with its own set of biases. Computers are supposed
Speaker 1: to stamp out human risk and those errors, but in
Speaker 1: other ways, are they sort of reinforcing some of the
Speaker 1: issues we faced for a long time. And that's what
Speaker 1: folks are trying to figure out. So it's possibly not
Speaker 1: just limited to Goldman. It probably affects a largest set
Speaker 1: of the credit card industry. But for Goldman, this is
Speaker 1: baptism by fire. Remember they haven't done this for long.
Speaker 1: Consumer facing businesses are new for them, and that's why
Speaker 1: maybe they are facing this sort of a unique challenge
Speaker 1: in a way right and and taking a step back.
Speaker 1: I mean, let's remind people this card was hailed in
Speaker 1: many ways for all the reasons you just described. Treat
Speaker 1: this notion that Apple of course, anything it puts its
Speaker 1: name on, if it's getting into a new business, people
Speaker 1: are paying attention Goldman, as you say, getting into the
Speaker 1: consumer business in a new and different way and partnering
Speaker 1: with Apple. This was unveiled by relatively new CEO David Solomon,
Speaker 1: I believe, with Tim Cook at a big Apple UH meeting,
Speaker 1: which have you know, sort of drama and pomp and
Speaker 1: circumstances all their own. What was this meant to be
Speaker 1: in the market, This card, this is supposed to be
Speaker 1: something revolutionary in many ways, right. Both David Solomon and
Speaker 1: Tim Cook in their respective learning school all said this
Speaker 1: is the most successful credit card launch ever. I mean,
Speaker 1: they didn't really back it up with many statistics, but
Speaker 1: for now we'll take them for what they said. It's
Speaker 1: only two months in. We we've seen that they've already
Speaker 1: made more than ten billion in loan well not loans,
Speaker 1: but credit lines, so it's clearly had a good start.
Speaker 1: This was supposed to be the time when they could
Speaker 1: sort of unwind and celebrate the fact that they got
Speaker 1: a good launching instead facing this sort of mini crisis.
Speaker 1: What actual tangible penalty perhaps could Goldman actually face here?
Speaker 1: Of course they're being probed, but is there a law
Speaker 1: that they are potentially breaking and that they're going to
Speaker 1: get in trouble? Part of and trying to answer that question,
Speaker 1: you also have to think about what's the precedent here?
Speaker 1: And I have to think that when you're looking into
Speaker 1: Gothmic fairness, this all has to be fairly new. It's
Speaker 1: people have been talking about it for a while, but
Speaker 1: it is starting to gain more attention now. In June,
Speaker 1: you had lawmakers and d C saying, we want to
Speaker 1: make sure that fair lending practices are being applied, uh,
Speaker 1: and make sure that there are no issues with that.
Speaker 1: So you don't really know why, Hey, this is gonna
Speaker 1: be a ten million dollar fine or fifty million all fine,
Speaker 1: slap on the race or something worse. We really don't
Speaker 1: know anything about that. And what makes it worse is Goldman,
Speaker 1: for instance, says, there's no discrimination. Guys, we're not, you know,
Speaker 1: classifying by race or gender and taking decisions according to that.
Speaker 1: There is no intentional bias on our part. But consumer
Speaker 1: advocates are saying that's part of the problem. It doesn't
Speaker 1: have to be intentional bias. If it was intentional bias
Speaker 1: in a civil society, hopefully it's easy to spot and
Speaker 1: root out. It's the unintentional bias that's harder. It becomes
Speaker 1: deeply entrenched and by the time you become alert to
Speaker 1: the problem, you can't just flick a switch and say,
Speaker 1: you know what, let's reverse all this. And I think
Speaker 1: that's that's the issue that Goldman and Apple have to
Speaker 1: deal with here. That's the issue A lot of the
Speaker 1: financial services companies have to deal with going forward as
Speaker 1: they embraced technology more and more because it does obviously
Speaker 1: come with several benefits. Well, and another question that's just
Speaker 1: raised for me and all of this, says Jason said,
Speaker 1: the inputs matter, but also algorithms kind of can teach themselves.
Speaker 1: I mean, how do you control a self learning thing?
Speaker 1: That's actually very fascinating because a lot of the discussion
Speaker 1: has revolved around this. You obviously control the fact as
Speaker 1: you put into the system, but many data scientists who
Speaker 1: have been binding on this on social media have said
Speaker 1: it is very hard to sort of reverse engineer why
Speaker 1: a decision was ultimately made as to why did the
Speaker 1: machine spit out the decision it did. You have a
Speaker 1: general sense, but it's very hard to get a very
Speaker 1: precise sense. And that's Shrie not a Rajan covering a
Speaker 1: Goldman a different way this week, at different type of
Speaker 1: story because this collaboration Kayleie with Apple much heralded, very
Speaker 1: successful in some ways, but man, that story really took
Speaker 1: a turn. I mean, this was supposed to be what
Speaker 1: they were calling the most successful credit card launch of
Speaker 1: all time. Maybe that's not the case, all right, Jason,
Speaker 1: we've been talking a lot about we Work lately, and
Speaker 1: it's not just about corporate governance, a soft bank confusion,
Speaker 1: in anything like that. Now we're going to talk about
Speaker 1: toxic phone booths, which is a sentence I never thought
Speaker 1: I would say. I didn't either, And when this story
Speaker 1: first broke a couple of weeks ago, I just thought, Wow,
Speaker 1: these guys can't catch a break. And then it just
Speaker 1: becomes this emblem. In many ways, Ellen Huett has been
Speaker 1: following every twist and turn in and out of the
Speaker 1: phone booth as where she joins us from San Francisco.
Speaker 1: So talk to us about these phone booths, because it's
Speaker 1: become kind of a thing. Yeah, and and same same
Speaker 1: as you said, Jason. I also had this thought when
Speaker 1: I first read about the phone boosts. You know, they
Speaker 1: announced this issue first in mid October, that they had,
Speaker 1: you know, thousands of phone booths that potentially had elevated
Speaker 1: levels of formaldehyde, which is a carcinogen um in their
Speaker 1: offices in US and Canada. I remember thinking like it
Speaker 1: was on top of so much other bad news about
Speaker 1: we work. You you had to feel pretty bad for them.
Speaker 1: It seemed like an issue, but uh, you know, as
Speaker 1: we spent some time in the weeks following trying to
Speaker 1: figure out what exactly happened. You know, I think you
Speaker 1: can trace some of the uh, some of the forces
Speaker 1: at play at we Work that led to possibly this
Speaker 1: outcome of of these toxic phone booths. So this, you know,
Speaker 1: the story starts, at least from our point of view
Speaker 1: in October when this announcement was made, But the story
Speaker 1: in many ways actually begins a lot earlier, which is
Speaker 1: when we Work decided to design in house their own
Speaker 1: sound insulated phone booths. So these are important pieces of
Speaker 1: furniture for we Work offices because their offices are usually
Speaker 1: open plan. You know, if any of you working in
Speaker 1: an open plan office, you know, it can be hard
Speaker 1: to make a private phone call that other people can't here,
Speaker 1: and maybe if you don't want to bother your neighbors
Speaker 1: or anything like that. So so we Work makes these
Speaker 1: phone booths that are sort of single person only. They're
Speaker 1: about the size of say an airplane bathroom, and have
Speaker 1: a door that fold in the same way. You can
Speaker 1: step inside, sound insulated and you can make phone call
Speaker 1: or maybe like take a meeting. And and they were
Speaker 1: setting these up, you know, along hallways and in corners
Speaker 1: of their offices to give people uh private space. And
Speaker 1: they were so important to we work that we work
Speaker 1: decided to actually start designing them themselves in house, as
Speaker 1: opposed to like buying them elsewhere. Um and and they
Speaker 1: were at first very proud of this. You know, there
Speaker 1: are other stories, and there's a past story and Fast
Speaker 1: Company from about a year ago in which one of
Speaker 1: their executives talks about how great it is that they
Speaker 1: did this their own design for the phone booths. Um
Speaker 1: and it turns out, you know, it gets a little
Speaker 1: you know, we we did a lot of research and
Speaker 1: reporting and discovered, you know, there's kind of a complicated
Speaker 1: supply chain at play. But basically we worked designs the
Speaker 1: phone booth and then gets manufacturers in different parts of
Speaker 1: the world to make the phone booth. And one of
Speaker 1: their manufacturers, or maybe the only one in the U.
Speaker 1: S And Canada, was a company called Premier XD. It's
Speaker 1: a company that makes commercial fixtures for the likes of
Speaker 1: Starbucks and other companies. You know, those kiosks that you
Speaker 1: might see in like a grocery store. They were making
Speaker 1: these phone booths and they um, you know that this
Speaker 1: was not you know, publicly known, but something that we
Speaker 1: talked about with former employees and that kind of thing.
Speaker 1: And they were making these phone boots. Everything seemed fine
Speaker 1: until early summer when one of we Work's biggest customers, UBS,
Speaker 1: which had used we worked, to redesign one of its
Speaker 1: headquarters in New Jersey. Some of the employees at the
Speaker 1: UBS office noticed this phone booths smell funny, like there's
Speaker 1: a weird smell when I'm in them, or maybe I
Speaker 1: have some eye irritation, and they alerted their managers. Company
Speaker 1: did a test and found these elevated levels of formaldehyde.
Speaker 1: So this is early summer, and keep in mind, we
Speaker 1: worked and announced the formaldehyde issue until mid October, so
Speaker 1: there's several months at play here where there's UM, there's
Speaker 1: just you know, UBS had told we work at the issue.
Speaker 1: We work actually starts talking to vendors in August about
Speaker 1: maybe replacing or replacing future phone booths with new ones.
Speaker 1: UM and then it kind of and actually in September, Premier,
Speaker 1: the maker of the phone boots, actually suddenly shuts down
Speaker 1: with no warning. Some of its workers are less stranded
Speaker 1: with no severance. Uh, there's all sorts of there's kind
Speaker 1: of a like in in the background, like a series
Speaker 1: of events that leads up to the announcement of the
Speaker 1: phone booth. And that's kind of what we get into
Speaker 1: in this story. Well, and now we work as reinstalling
Speaker 1: phone Boost of the exact same design, just now a
Speaker 1: different manufacturer. By telling people won't wait, don't go in yet,
Speaker 1: we're not entirely sure they're safe. They're still holding some
Speaker 1: of the existing phone booths for further testing. I think,
Speaker 1: you know, into their credit, they're being very careful, but
Speaker 1: it does seem like they also took some time to
Speaker 1: announce to their major you know, to their customers in
Speaker 1: their coworking spaces, that that there was an issue with
Speaker 1: these phone booths. And so there are customers who are upset.
Speaker 1: They feel like their health has been put at risk
Speaker 1: by something that they totally didn't expect, which was the
Speaker 1: phone booth that they use at work, maybe to get
Speaker 1: a private moment or to take a phone call, or
Speaker 1: to hold meetings in I mean, can you talk about
Speaker 1: the uphill climb that the future CEO of the companies
Speaker 1: has to face here? I mean, what do where do
Speaker 1: they start? It just seems like such a difficult job
Speaker 1: and one that will be watched very carefully. I think
Speaker 1: we've seen similar pattern play out with Dara across Broshai
Speaker 1: at Uber. You know, he's taking over the troubled company
Speaker 1: from a very public CEO, someone who had a lot
Speaker 1: of ties to the spirit of the company as the founder,
Speaker 1: and then um, you know, was sort of outstand in
Speaker 1: a dramatic way. So anyone who steps into the top
Speaker 1: job that we work is certainly going to be thinking
Speaker 1: about what happened at Uber and and they're going to
Speaker 1: be facing I think similar problems having to establish kind
Speaker 1: of a new culture that still feels you know, um,
Speaker 1: comforting to existing employees and making them want to stay
Speaker 1: because there you know, as the company gets ready to
Speaker 1: um continue to do layoffs, they are facing really bad morale.
Speaker 1: You know, every time I talked to current WE Work employees,
Speaker 1: they tell me people aren't coming into work, People are scared,
Speaker 1: people are feeling unmotivated, and you can't blame them. They
Speaker 1: have had a lot of shifts of leadership at the top.
Speaker 1: The future of the company feels unsure, even though of
Speaker 1: course leadership is saying we're going to continue on and
Speaker 1: we're going to become profitable and the company's product is
Speaker 1: still really strong. You know, I think most employees believe that,
Speaker 1: but you have to imagine a lot of them are
Speaker 1: scared for their personal futures. So I think the new
Speaker 1: CEO is going to have to figure out how to
Speaker 1: motivate workers, how to cut a lot of costs, how
Speaker 1: to get um you know, future investors thinking that this
Speaker 1: company still has a lot ahead of it. And that
Speaker 1: was Ellen Hewitt. I mean, Jason, it's just hit after
Speaker 1: hit after hit for we Work at this point. And
Speaker 1: add to that, Kaylee, the news from Friday sources telling
Speaker 1: Bloomberg that we Work is drawing scrutiny from the SEC
Speaker 1: over whether the company violated financial rules in the run
Speaker 1: up to its failed I po. Yeah, there is still
Speaker 1: the open question of where does we Work go from
Speaker 1: here and what's it going to look like at the
Speaker 1: end of the day. Earlier this week, I had a
Speaker 1: chance to sit down with Admiral Mike Mullen. It was
Speaker 1: ahead of the second Annual Summit on Security hosted at
Speaker 1: the nine eleven Memorial and Museum, and Bloomberg, we should
Speaker 1: point out, was a media sponsor of that event. Mullen
Speaker 1: he served as the Chairman of the Joint chiefs of
Speaker 1: Staff for pre students Bush and Obama from two thousand
Speaker 1: seven to eleven. He was in the situation room with
Speaker 1: President Obama when Seal Team six killed the world's most
Speaker 1: wanted terrorist, Osama bin Laden. Well, we had been hunting
Speaker 1: for Bin Laden for intensely for years and um and
Speaker 1: I think just the fact that it took so long, Uh,
Speaker 1: it took a decade to to get to that culminating
Speaker 1: point is indicative of how difficult to target he was
Speaker 1: and the care with which he took to hide and
Speaker 1: those around him. Um. Uh And it was an incredibly
Speaker 1: intense effort to do that. Obviously, we were doing other things.
Speaker 1: We had a war in Iraq, we had a war
Speaker 1: in Afghanistan, but we never lost focus. And in one
Speaker 1: of the one of the groups I'd like to give
Speaker 1: credit to, uh there was a special I think run
Speaker 1: on CNN a few years ago the four ladies in
Speaker 1: the agency who in the late eighties really started and
Speaker 1: stayed after Bin Laden when they had no resources. Nobody
Speaker 1: was paying much attention to him, and so it had
Speaker 1: been going on for a long long time. Uh and
Speaker 1: uh and and then it culminated obviously in better intelligence
Speaker 1: and in the last few months. Really I didn't get
Speaker 1: involved until January in terms of what the possibilities might be.
Speaker 1: And that was right because one of my concerns was
Speaker 1: all of our concern was if there had been any
Speaker 1: indication that we knew he would have he would have left.
Speaker 1: And in fact, his his principal advisors were telling him
Speaker 1: in that time frame that we actually killed him, it
Speaker 1: was time to go. They were concerned he'd been there
Speaker 1: too long and they needed to move. So had it
Speaker 1: not happened that night, it could have been another decade
Speaker 1: before we found him. And what was that night? Like?
Speaker 1: People asked me of that famous picture, uh, And one
Speaker 1: of the reasons I think it's famous is because it
Speaker 1: really does capture the moment and it was very, very tense.
Speaker 1: That said, it was a decision, and it was a
Speaker 1: courageous decision from my perspective on a part of President
Speaker 1: Obama because we didn't actually know he was there. We
Speaker 1: had lots of circumstantial evidence. I viewed it as a
Speaker 1: bet the presidency. UH. Decision that the president made um
Speaker 1: and UH. And the night itself, the actual night of
Speaker 1: the killing, was we were into that operation, uh, you know,
Speaker 1: for two a couple of days at that point, so
Speaker 1: it had it had been going for some time, and
Speaker 1: there had been rehearsals and lots of preparation go on
Speaker 1: for literally four months in the event that we could
Speaker 1: pin him down. So uh we we had planned uh
Speaker 1: this down to a level of detail that would in
Speaker 1: the end allow us to kill him. But one of
Speaker 1: the things I'm I like to remind people of is
Speaker 1: that same night in Afghanistan, there were fourteen other missions
Speaker 1: similar to that that were that were carried out. And
Speaker 1: while strategically this one certainly had the highest risk, but
Speaker 1: we have done thousands and thousands and thousands of these
Speaker 1: missions over the course of the years that we had
Speaker 1: been fighting. So I had every expectation that if he
Speaker 1: was there, we were going to either be able to
Speaker 1: capture or kill him. That said, it was tense, and
Speaker 1: it wasn't over until it was over. And by that
Speaker 1: I mean literally not just the killing him or getting
Speaker 1: them out and getting him back into Afghanistan, taking his
Speaker 1: DNA and positively identifying him, getting him on a helicopter,
Speaker 1: flying him through Pakistani airspace, and getting him out to
Speaker 1: a carry at sea. Where he could be buried consistent
Speaker 1: with his beliefs, his religious beliefs, which is what we did.
Speaker 1: And when you think about that moment and you fast
Speaker 1: forward to today, what has it ultimately meant for the
Speaker 1: war in terror which has not ended in many ways
Speaker 1: and has only become in some ways more complicated. Well,
Speaker 1: I think it in terms of having a huge impact
Speaker 1: on the Alcada organization. It did when you take out
Speaker 1: a leader like that, just as the very recent killing
Speaker 1: of bagh Daddy has had a big impact on the
Speaker 1: ISIS organization. But it doesn't make the ideas go away.
Speaker 1: It doesn't make the aspiration go away. Uh, And it
Speaker 1: hasn't with al Qaeda, nor has bagh Daddy's death done
Speaker 1: that with ISIS. And so I think we have to
Speaker 1: stay at this. We still we still are in a
Speaker 1: situation where where we are seen as the evil empire,
Speaker 1: if you will, from the terrorists perspective, and they continue
Speaker 1: to come after us. And that was old Mike Mullen,
Speaker 1: former Chairman of the Joint Chiefs of Staff. You can
Speaker 1: hear our entire conversation. It's this week's Bloomberg Business Week
Speaker 1: Extra podcast, and I should point out Michael Bloomberg, the
Speaker 1: founder and majority owner of Bloomberg News parent Bloomberg Gulp.
Speaker 1: He is the chairman of the nine eleven Memorial and Museum.
Speaker 1: So Kaylee, the holidays are right around the corner. What
Speaker 1: a shopping list we have here in Bloomberg Pursuits. I
Speaker 1: want everything on this last If you buy everything on
Speaker 1: the list, you end up broke. So it's just an
Speaker 1: inspiration list, all right. So that's Chris Rouser, he's here
Speaker 1: with us, the editor of Pursuits, walking is through it all.
Speaker 1: So where do you want to start because I'll take
Speaker 1: one of each. Yeah. So we every year we try
Speaker 1: to think of a theme for our gift guide, and
Speaker 1: this year the theme is things that are handmade. Um,
Speaker 1: it's always nice to give someone something that you know
Speaker 1: a lot of time went into it, maybe a master
Speaker 1: craftsman worked on it. So on the first page of
Speaker 1: the section, we have this amazing marketry poker set. So
Speaker 1: it's a box with eight with a bunch of pieces,
Speaker 1: like eight hundred pieces cards and stuff. And it's all
Speaker 1: made with market tree, which is a little slivers of
Speaker 1: wood which are inlaid into the box. Um, and it's uh,
Speaker 1: you know, it's pounds. It's not cheap, but it's one
Speaker 1: of fifteen, so you know, not many people will have it,
Speaker 1: and so how do you go about acquiring one of
Speaker 1: these if there's only fifteen out there? So super competitive?
Speaker 1: You reach out to the artist, Alexander Llewellen. She's in
Speaker 1: the UK, and you know she's making fifteen of these,
Speaker 1: but she she makes other versions. She also makes backgammon
Speaker 1: sets and stuff. So you reach out, see what she's
Speaker 1: got and uh, give it to a friend. Alright, So
Speaker 1: a fan favorite, apparently down on the pursuit's desk was
Speaker 1: the claw for crustaceans. It's the pick of the critter.
Speaker 1: You know, uh, what is this? Okay, So, if you
Speaker 1: are a mainer like me, you've grown up eating lobster
Speaker 1: and you've probably used many different kinds of lobster picks.
Speaker 1: They're a little narrow forks that go into like the
Speaker 1: legs are a narrow part of the shell to pull
Speaker 1: out meat. A lot of them aren't actually that well designed.
Speaker 1: Often you get them their plastic in a restaurant. So
Speaker 1: this jeweler, Janey Cruise Garnett, who works out of the
Speaker 1: Upper East Side, came by the office and was showing
Speaker 1: us her wear since she had these silver hand carved
Speaker 1: lobster picks, which are so ingenious and also expensive. They
Speaker 1: have a little clamshell carved into them so you can
Speaker 1: put your thumb in it. They're very textures so they
Speaker 1: don't become slippery when they get covered in butter. And
Speaker 1: at the end of the little fork they have a
Speaker 1: little harpoon hook which is really which actually most lobster
Speaker 1: picks don't have, so when you reach in to get
Speaker 1: the meat, it comes out really easily. I know that
Speaker 1: sounds crazy, but if you're a lobster person, this item
Speaker 1: does not exist anywhere else and it's perfect. So you've
Speaker 1: had the chance to eat lobster with set items, yes,
Speaker 1: and it makes a difference. Yeah, I mean it's you know,
Speaker 1: it's a special occasion item, right. They are made of
Speaker 1: silver and there are two five dollars each, so it's
Speaker 1: you don't want to lose them, right, Yeah, So you're
Speaker 1: that that's a table setting that is gonna set you
Speaker 1: back before you even go by your lobster, right, Yeah.
Speaker 1: And those are the time of things that go missing
Speaker 1: after a dinner party totally. You know, you're serving some
Speaker 1: nice wine all right, So maybe while you're doing all that,
Speaker 1: you're playing a record because not Yeah, you know vinyl
Speaker 1: every year it gets bigger and bigger. Um. And so
Speaker 1: we found a record player that's handmade that is heavier
Speaker 1: than ever. It's actually seventy two pounds and it's made
Speaker 1: by this guy, Tyler Hayes. The company is B D
Speaker 1: DW in Philadelphia and he hand makes every part of it.
Speaker 1: The platter is marble, which is why it costs, which
Speaker 1: is why it's so heavy. Um. And the carcass, which
Speaker 1: is what they call sort of the exterior is made
Speaker 1: of wood. It's hand painted. It's really beautiful, got an
Speaker 1: incredible sound, and it makes a very impactful gift. Well,
Speaker 1: and it's a design piece just as much as it
Speaker 1: is an audio piece. It looks very cool. It looks
Speaker 1: like it's at a Star Wars kind of and it'll
Speaker 1: set you back just to meet. Yeah, it's a bargain
Speaker 1: for sure. Also want to smell good, of course, but
Speaker 1: this really you headline this a drop of perfume, You
Speaker 1: really are talking about a very small amount is a
Speaker 1: very small amount of perfume. The perfume company is called
Speaker 1: Regime de Fleur and they source these really exotic ingredients
Speaker 1: from around the world, and they're so rare that they
Speaker 1: actually can't make the perfume every year because they can't
Speaker 1: get all of the ingredients necessarily to buy this little
Speaker 1: tiny bottle. It's two inches high. It's like the size
Speaker 1: of a paper clip. But it has a very strong,
Speaker 1: very beautiful scent that's very unusual. And the bottles are
Speaker 1: hand painted by the artist. And it'll set you back
Speaker 1: dollars for eight millileaders. This is a real problem. This
Speaker 1: is shocking. I mean, you get how many uses out
Speaker 1: of this? You only use a very very small amount,
Speaker 1: so it actually lasts a long time. And think about
Speaker 1: how long it takes you to get through a bottle
Speaker 1: of perfume. Actually it takes a long time. Alright, your listeners,
Speaker 1: you cannot you cannot see Jason's face, but it is
Speaker 1: my skeptical face. I think is the way to put
Speaker 1: all right. So, after all that, I would love a drink,
Speaker 1: just a nice drink, but it doesn't I can't just
Speaker 1: have my drinking just anything. Yeah, So we found this
Speaker 1: company St. Louis, which since eighties six has been making
Speaker 1: has been handmaking glassware for like French Royalty. UM and
Speaker 1: they just started. They made a collection of glassware that
Speaker 1: they're just releasing for their first time altogether. UM and
Speaker 1: it's they're really beautiful. They're sort of colored glass. And
Speaker 1: we recommend that you maybe give the glasses to somebody
Speaker 1: with a bottle of auk, which is a new kind
Speaker 1: of liquor. It's made by a liquor company called Empirical
Speaker 1: Spirits UH and it's UM. It has a sort of
Speaker 1: a mescal ish flavor. It's very smokey. It's distilled with
Speaker 1: UH with passia chili's UM. It's not actually a mescal,
Speaker 1: but it tastes like it. And it's just an unusual thing.
Speaker 1: And it's just great to give somebody. If you're giving
Speaker 1: somebody a glass or a bowl, it's great to give
Speaker 1: something to go into it right well, and on those
Speaker 1: glasses too, just because this is all about those handmade
Speaker 1: gifts and the craftsmanship. It takes fifteen workers ten days
Speaker 1: to shape one of these. This is intricate stuff. Yeah, yeah,
Speaker 1: you know people are gonna put it in a special place.
Speaker 1: And the glasses cost for a set, Yeah, for the set, Okay,
Speaker 1: so that's just a bargain, all right. I want to
Speaker 1: go deep on this one because both Kaylee and I
Speaker 1: when we saw this next one, immediately went to frank
Speaker 1: House of Cards. This rowing machine, I think that was
Speaker 1: from season one actually was when you first see him,
Speaker 1: and it is an arresting just piece of art in
Speaker 1: some ways that also doubles as a rowing machine. Right.
Speaker 1: So there are these water Rower Inc. Is this company
Speaker 1: and they make uh, these rowing machines that are made
Speaker 1: with Appalachian hardwoods. And then the drum actually where the
Speaker 1: normally it's a fan in the wind or in the air,
Speaker 1: is actually filled with water. So as you saw a
Speaker 1: House of Cards, when Frank is rowing, it has a
Speaker 1: sort of soothing wishing sound. It's really beautiful. Um. And
Speaker 1: you know these are becoming increasingly popular and popular, and
Speaker 1: rowing is becoming increasingly popular. It's because of cross fit.
Speaker 1: It's also there's a bunch of rowing gyms, so you're
Speaker 1: seeing more and more of these than houses. And it's
Speaker 1: so you know that's that's expensive, but it's not crazy
Speaker 1: for a piece of gym equipment less than a pelton.
Speaker 1: So there you go, less than a pelton. Uh, and
Speaker 1: it looks lovely and as you say, and I'm sure
Speaker 1: you guys considered a lot of different because I know
Speaker 1: you like exercise in the section, you probably considered a
Speaker 1: lot of different things. And this, as you say, sort
Speaker 1: of checks all the boxes around craftsmanship. Yeah, it really does.
Speaker 1: It's except for the plastics for the drum with the water,
Speaker 1: everything is handmade, so they're all a little bit unique.
Speaker 1: And I am a Finnish junkie like Jason is, and
Speaker 1: I hate rowing actually in college and I promised myself
Speaker 1: I never would do it again. But I've been on
Speaker 1: one of these and they are really beautiful. And can
Speaker 1: you row vigorously on it without you know, fearing damn?
Speaker 1: Oh yeah, they're like indestructible. Wow. All right, So if
Speaker 1: you row it off, I'm going to skip ahead because
Speaker 1: what you're rowing off could be one of the most
Speaker 1: exquisite and ridiculous pastries that I have ever seen in
Speaker 1: my life. You did not bring us any which is
Speaker 1: a strike against you. It did not last long, and
Speaker 1: I'm sure it went fast on the desk. Tell us,
Speaker 1: just give us the size and scope of this pastry.
Speaker 1: So a Queen emmon is Um is from Brittany in France,
Speaker 1: and it's basically a Croissance, but it's sort of shaped
Speaker 1: in like a muffin shape, but it's formed like a croissant,
Speaker 1: which is layers of dough and butter. But then they
Speaker 1: also add a ton of sugar in there, so it's
Speaker 1: like a butter sugar bomb. And normally you get them
Speaker 1: kind of muffin size, but at men Raies of up
Speaker 1: Bread in San Francisco they make it um like cake size,
Speaker 1: so you get sort of an eight in huge one,
Speaker 1: and since there's so much sugar on the bottom, it
Speaker 1: all caramelizes, so it's actually like sort of an ice
Speaker 1: skating rink of sugar on the bottom. And actually by weight,
Speaker 1: so it's fives and by weight it's fifty butter and sugar,
Speaker 1: so there's two grams of sugar in these things. There's
Speaker 1: a DRAMs of sugar and a hundred grams of butter.
Speaker 1: Not at all unhealthy. You gotta row a lot plastic.
Speaker 1: You have no idea because I didn't bring you. Yeah,
Speaker 1: I really do have no idea. Interesting, yeah, interesting, um,
Speaker 1: all right, So if you're not rowing and you're not eating,
Speaker 1: maybe you're playing golf. That's sort of a middle ground.
Speaker 1: They're a beautiful putter or a set of putters that
Speaker 1: you feature in the magazine. Yeah, so you know, we talked.
Speaker 1: We talked about a lot of sports equipment, and with
Speaker 1: golf clubs, there's a lot of physics that go into
Speaker 1: the swing clubs, right, so there's kind of mathematics that
Speaker 1: go into it. Um. But potters you can be a
Speaker 1: little more creative with because it's actually much more personal preference.
Speaker 1: You're not swinging that much. Um. And so we found
Speaker 1: this potter which is hand forged, and it has these
Speaker 1: inserts that are made through a Japanese process called makum
Speaker 1: gan a uh and it's it's basically a process of
Speaker 1: folding together different kinds of different metals over and over
Speaker 1: and over and the it's so there are these inserts
Speaker 1: made through that process in the back of the putter,
Speaker 1: and they look really beautiful. And it's a process that
Speaker 1: was used on the hilts of samurai swords. So if
Speaker 1: you the more and powerful you were, the more times
Speaker 1: the medal was folded. Um and that. So you know,
Speaker 1: it's not really used much anymore, but it's in use
Speaker 1: in these putters, and people really become attached to it.
Speaker 1: That was pursued editor Chris Rouser and Jason, I did
Speaker 1: some math. Are you ready for this? Yes? If you
Speaker 1: buy one of each thing on that list, how much
Speaker 1: you think that's gonna cost you more dollars? Are someone
Speaker 1: extra special for Christmas? Alright, it's gonna wrap up Bloomberg
Speaker 1: Business Week's weekend podcast. Thanks so much for joining us.
Speaker 1: I'm Jason Kelly and I'm Kaylee Lines and for Carol Masser.
Speaker 1: Be sure to tune into Bloomberg Business Took Radio live
Speaker 1: Monday through Friday, starting at two pm Wall Street Time.
Speaker 1: And if you can't catch us live, get our daily
Speaker 1: podcast for the right home. Get that at Bloomberg dot
Speaker 1: com or wherever you get your podcasts, and you can
Speaker 1: get this week's edition of the magazine on newsstands now.
Speaker 1: We'll be back right here next week at the same time.
Speaker 1: This is Bloomberg