WEBVTT - Bloomberg Businessweek Weekend - January 4th, 2020 0:00:02.520 --> 0:00:06.280 This is Bloomberg Business Week from Bloomberg Radio. Hi, I'm 0:00:06.360 --> 0:00:09.320 Jason Kelly. Welcome to Bloomberg Business Week. Over the next 0:00:09.360 --> 0:00:11.639 couple of hours, we're gonna bring you highlights from our 0:00:11.720 --> 0:00:14.040 daily radio show that's heard weekdays at two p on 0:00:14.120 --> 0:00:17.960 Wall Street Time, right here on Bloomberg Radio, and starting 0:00:18.000 --> 0:00:22.240 on Monday, you can also watch the show on YouTube. 0:00:22.320 --> 0:00:25.200 This week, we're gonna talk about how big tech betrayed 0:00:25.280 --> 0:00:29.640 its founding principles, plus conversations on luxury. We hear from 0:00:29.640 --> 0:00:34.080 the CEOs of Zenith Watches as well as Ducati North America. 0:00:34.159 --> 0:00:42.120 But first, by the end of the century, check this out, Jason. 0:00:42.159 --> 0:00:44.520 A third of the world's population and a greater fraction 0:00:44.520 --> 0:00:47.199 of its young people will be African. It's why many 0:00:47.240 --> 0:00:49.160 investors are eyeing the market not just for its size 0:00:49.159 --> 0:00:52.960 and potential, but also for its growing tech ecosystem. Back 0:00:52.960 --> 0:00:55.520 with us to talk about just that is Jake Bride. 0:00:55.520 --> 0:00:58.440 He's tech Crunch contributor. He's also author of The Next Africa, 0:00:58.520 --> 0:01:02.080 an emerging continent becomes a global powerhouse. He joins us 0:01:02.120 --> 0:01:04.760 back in her Bloomberg Interactive Broker Student, New York. Nice 0:01:04.760 --> 0:01:06.720 to be back with us. Great to be back. You know, 0:01:06.760 --> 0:01:08.479 we do talk a lot about investment, and we talk 0:01:08.520 --> 0:01:12.560 about specifically the raw materials or raw minerals, uh and 0:01:12.640 --> 0:01:16.320 kind of staking your claims to what's to come from Africa. 0:01:16.400 --> 0:01:18.880 You're taking a look specifically at the tech ecosystem. Are 0:01:18.880 --> 0:01:21.560 you talking about kind of the tech community overall? I'm 0:01:21.600 --> 0:01:24.920 assuming it's a growing one in Africa. Yeah, Africa has 0:01:24.920 --> 0:01:28.880 had a boom in UM tech startup growth, VC investment. 0:01:29.160 --> 0:01:31.720 The time span has really been about five to seven years, 0:01:32.080 --> 0:01:35.680 so this is relatively new. It's not shaping up everywhere, 0:01:35.680 --> 0:01:38.200 but there are some tech hubs that are becoming notable 0:01:38.480 --> 0:01:42.600 UM mostly Nigeria and West Africa. These are places are 0:01:42.600 --> 0:01:47.960 becoming centers of startup formation, of entrepreneurs going home of 0:01:48.280 --> 0:01:51.520 VC investments. So it's Nigeria the top hobbs in Nigeria, 0:01:51.600 --> 0:01:57.520 South Africa, Kenya primarily, with some others on the side, Ethiopia, Ghana, 0:01:57.760 --> 0:02:00.920 UM and you know what types of kind of startups 0:02:00.960 --> 0:02:03.080 and you know, I know like I feel like the 0:02:03.120 --> 0:02:06.280 financial industry finds a different way of you know, tackling 0:02:06.280 --> 0:02:08.840 the emerging markets and you can find some interesting things 0:02:08.880 --> 0:02:11.080 in that arena. Well, the big spending has gone on 0:02:11.160 --> 0:02:15.160 in in fintech and e commerce and internet services. But 0:02:15.520 --> 0:02:17.919 what you have right now is is you have these 0:02:17.919 --> 0:02:22.959 formalizing economies in these in these hubs. And even though fintech, 0:02:23.040 --> 0:02:26.160 in e commerce and some obvious UM startups sectors have 0:02:26.240 --> 0:02:28.560 got a lot of money, you basically have this new 0:02:28.600 --> 0:02:32.840 class of young African entrepreneurs that are descending into every 0:02:32.880 --> 0:02:36.919 possible sector you can imagine UM from ride hailing to 0:02:37.160 --> 0:02:41.559 education to multiplying you know, health services on mobile platforms. 0:02:41.680 --> 0:02:46.079 So UM, it's all wide open in every sector is 0:02:46.120 --> 0:02:48.760 open right now in Africa. And so where does the 0:02:48.800 --> 0:02:54.200 funding come from? Where they finding willing venture capitalists? Well, 0:02:54.480 --> 0:02:57.280 this is what's UM. You know. News over the last 0:02:57.360 --> 0:03:00.480 week is that UM primarily a lot of funding has 0:03:00.520 --> 0:03:04.560 come from European and US investors with some African angels. 0:03:04.560 --> 0:03:09.239 But over the last quarter I've tracked this, China has 0:03:09.280 --> 0:03:12.239 come in to invest nearly a quarter of a billion 0:03:12.280 --> 0:03:16.240 dollars a VC in African fintech, almost all entirely in 0:03:16.880 --> 0:03:19.960 companies that are based in Nigeria with outward growth strategies 0:03:20.000 --> 0:03:23.320 from there. And why this is notable is that UM 0:03:23.360 --> 0:03:26.400 that's roughly one fourth of all the venture capital that 0:03:26.440 --> 0:03:30.840 went to startups. And previous to this, China has had 0:03:30.919 --> 0:03:34.720 an elevated engagement with Africa, but it's been mostly related 0:03:34.800 --> 0:03:38.560 to trade in trade, finance and building things and bricks 0:03:38.560 --> 0:03:41.200 and mortar stuff. We've been waiting for China to go 0:03:41.320 --> 0:03:44.960 all in on African digital in full. UH. And these 0:03:45.120 --> 0:03:48.960 last several investment rounds in fintech UM kind of indicate 0:03:49.000 --> 0:03:52.760 that that's happened or happening. Why? Why is this? Is 0:03:52.760 --> 0:03:55.160 it of concern? Is it of interest? How would you 0:03:55.200 --> 0:03:58.440 describe it? Well, it runs a gamut. I should say 0:03:58.440 --> 0:04:00.480 a little bit more about their rounds. So you have 0:04:00.920 --> 0:04:04.440 um On, a group of Africa Chinese investors who the 0:04:04.440 --> 0:04:08.920 biggest round is just recently into Opera, the internet company UM. 0:04:09.000 --> 0:04:12.640 They've started to launch services startups in Nigeria. So they 0:04:12.720 --> 0:04:15.840 have a payment startup called Opae, which a group of 0:04:15.920 --> 0:04:19.840 Chinese investors Sequoia China UM source Code Capital invested a 0:04:20.040 --> 0:04:24.159 D twenty million in Opera's o pay Um just in 0:04:24.320 --> 0:04:27.800 this last month. UM. And what's happening is is you're 0:04:27.880 --> 0:04:32.480 seeing UM this start to expand into other areas. It's 0:04:32.480 --> 0:04:35.920 creating different dynamics with competition on the continent with existing 0:04:35.920 --> 0:04:39.520 players including Opera is gonna expand opay into Kenya, which 0:04:39.520 --> 0:04:44.440 has been Africa's capital for mobile money. When it comes 0:04:44.480 --> 0:04:46.200 to I mean, when it comes to what what's the 0:04:46.240 --> 0:04:48.800 look at here? UM One, there's more competition. Two, there's 0:04:48.839 --> 0:04:53.240 more investment for African startups overall, and that all sounds good. 0:04:53.440 --> 0:04:55.760 That all sounds good, but then it enters this complicated 0:04:55.800 --> 0:05:00.360 part of Africa's involvement in um our. China's involved in Africa, 0:05:00.440 --> 0:05:05.080 which has been somewhat controversial. To be objective, UM the 0:05:05.760 --> 0:05:09.280 conversation around China and Africa runs kind of the The 0:05:09.320 --> 0:05:12.479 extreme would be that it's neo colonialism and that China 0:05:12.560 --> 0:05:15.960 is taking over Africa. UM. On the positive end, Africans 0:05:15.960 --> 0:05:18.880 will often tell you that China is actually meeting us 0:05:18.920 --> 0:05:21.039 where we want to be. They're offering us money, we 0:05:21.080 --> 0:05:24.040 need infrastructure, they're building stuff. They're helping us with bridges, 0:05:24.080 --> 0:05:25.760 and a lot of people bring lecture, but they don't 0:05:25.760 --> 0:05:28.160 bring the funds. But there's concerns about data privacy. We've 0:05:28.200 --> 0:05:33.000 just got about five seconds. This pivot to digital creates 0:05:33.000 --> 0:05:35.520 a whole new topic in China and Africa. When you 0:05:35.560 --> 0:05:37.600 get to the concerns with Huawei. When you get the 0:05:37.720 --> 0:05:40.919 Chinese investors having major stakes and big consumer platforms that 0:05:41.000 --> 0:05:44.760 run a lot of data and and fintech information. Um, 0:05:44.760 --> 0:05:46.760 I think the continent is still getting its hands around 0:05:46.800 --> 0:05:49.320 that now after just grasping the amount of investment and 0:05:49.360 --> 0:05:52.360 who's doing what and where. And that's Tech Crunch contributor 0:05:52.480 --> 0:06:00.680 Jake Bright. If you think about those that have been 0:06:00.680 --> 0:06:03.600 an advocate for better governance and accountability in the private 0:06:03.600 --> 0:06:06.920 sector and in government, this individual definitely comes to mind, 0:06:07.160 --> 0:06:09.560 and not in Maddy's professor of Finance and Economics at 0:06:09.600 --> 0:06:13.320 Stanford Graduate School of Business based in Paladato, California, back 0:06:13.320 --> 0:06:15.800 in our Bloomberg Interactive Broker studio, and you're nice to 0:06:15.800 --> 0:06:18.760 have you back with us. Thank you. So I have 0:06:18.880 --> 0:06:21.520 to ask you, you're we're looking at Jason I reading 0:06:21.560 --> 0:06:23.720 your latest post. You seem to be calling at your 0:06:23.720 --> 0:06:27.839 own profession academia. What's going on? Well, you know, I 0:06:27.880 --> 0:06:30.000 look around, and you know there are a lot of 0:06:30.160 --> 0:06:32.680 problems in this world, and so we have an emphasis 0:06:32.720 --> 0:06:36.200 like you had just now about the private sector, uh 0:06:36.360 --> 0:06:40.000 for profit private private sector being e s G and 0:06:40.040 --> 0:06:42.880 doing good and doing well and all this stuff and 0:06:42.920 --> 0:06:46.240 I'm asking what's the role of my tribe of the 0:06:46.279 --> 0:06:51.520 academics in making a system work, capitalism, democracy, you name it. 0:06:51.600 --> 0:06:54.760 We say, we're very privileged in academia. Let me tell you. 0:06:55.080 --> 0:06:57.800 I mean, we don't make the money that some people 0:06:57.880 --> 0:07:00.479 who come on your show do make. But uh, but 0:07:00.560 --> 0:07:03.320 we're okay, and we have tenure and so, and we 0:07:03.360 --> 0:07:05.880 have expertise. So the question I have, what is it 0:07:05.920 --> 0:07:10.120 that you want? I want academics. So I I live 0:07:10.200 --> 0:07:12.360 in that bubble, and I've lived in that bubble for 0:07:12.360 --> 0:07:15.680 a long time until I came down from that eightie 0:07:15.760 --> 0:07:18.720 floor of the Ivory Tower down to the ground. And 0:07:19.240 --> 0:07:22.440 what I've seen, you know, it was pretty sobering about 0:07:22.480 --> 0:07:25.520 the realities of the kinds of assumptions, especially in my 0:07:25.600 --> 0:07:29.080 tribe of economists make, and so we you know, we 0:07:29.160 --> 0:07:32.560 became the field economics in particular of making assumption that 0:07:32.640 --> 0:07:35.760 every other academic silo of different departments is kind of 0:07:35.840 --> 0:07:39.040 living big gaps between them, and so you've got a 0:07:39.080 --> 0:07:44.400 bunch of siloed academics. Universities basically allow us all you know, 0:07:44.640 --> 0:07:47.520 free market of ideas to do what we want. And 0:07:47.840 --> 0:07:50.720 somehow the assumption is that when all of that the 0:07:50.760 --> 0:07:54.800 invisible hand of that happens the market for ideas for publications. 0:07:55.040 --> 0:07:58.480 However it works in academia that all of that produces 0:07:58.760 --> 0:08:01.440 kind of the best outcome of the world where nonprofit 0:08:01.680 --> 0:08:05.800 institution well, I think I think it does, but I 0:08:05.840 --> 0:08:07.680 think it can do better. I think that in the 0:08:07.760 --> 0:08:10.800 areas that I know about, in particular in business schools 0:08:10.840 --> 0:08:13.640 and in economics and in other areas including tech. I 0:08:13.680 --> 0:08:16.760 was recently involved in you know, even HBO Silicon Valley 0:08:16.880 --> 0:08:19.280 series to kind of as a medium to get through 0:08:19.320 --> 0:08:24.080 to the public we can do better both to uh 0:08:24.240 --> 0:08:28.200 to kind of make sure that you know, powerful people 0:08:28.200 --> 0:08:31.680 are accountable, including in governments, help the government, you know 0:08:31.720 --> 0:08:34.199 the words, the whole idea of private sector doing good. 0:08:34.240 --> 0:08:36.680 As I described last time I was here, we discussed 0:08:36.720 --> 0:08:40.079 my Harvard Business Review piece on on that was that 0:08:40.200 --> 0:08:43.720 governments can't do stuff. And I'm saying, if government can't 0:08:43.720 --> 0:08:46.239 do stuff, then why is that? And did you contribute 0:08:46.240 --> 0:08:48.559 to that in other ways? Did you steal their people? 0:08:48.640 --> 0:08:50.360 Did you know? Did you are you? Are we not 0:08:50.400 --> 0:08:52.280 paying them enough? In other wads? Why is it that 0:08:52.320 --> 0:08:55.080 the governments are failing? I want that problem to be 0:08:55.160 --> 0:08:59.559 more of our collective problem, including in particular academics. Well, 0:08:59.600 --> 0:09:01.319 and I do feel like the last time you were here, 0:09:01.360 --> 0:09:04.120 we were talking about the business roundtable, which came up 0:09:04.160 --> 0:09:07.080 at our last segment as well, and this notion that 0:09:07.280 --> 0:09:11.440 companies are having a moment where they're starting to think 0:09:11.440 --> 0:09:14.840 more holistically about their responsibility to society. And I guess 0:09:14.880 --> 0:09:17.160 what I would ask you is is it just a 0:09:17.200 --> 0:09:20.880 moment or is this a secular change? And and if 0:09:20.920 --> 0:09:23.760 we don't know yet, when will we Now? I think 0:09:24.000 --> 0:09:27.480 there's plenty to do for everybody, So I think it's 0:09:27.520 --> 0:09:30.400 all like welcome and find as far as it can go. 0:09:30.920 --> 0:09:32.720 But you know, we have a society in which we 0:09:32.800 --> 0:09:35.400 don't leave it to people to decide how fast to 0:09:35.480 --> 0:09:37.920 drive on the road. We have speed limited policemen and 0:09:37.960 --> 0:09:40.640 all of that. So my question is what are the rules? 0:09:40.800 --> 0:09:43.440 And you know, just last weekend over Thanksgiving weekends supposed 0:09:43.480 --> 0:09:44.920 to be a happy weekend, butt I happened to go 0:09:45.000 --> 0:09:50.160 watch Dark Waters, what a movie about DuPont and the lawyers. 0:09:50.160 --> 0:09:55.240 So and these are unregulated uh chemicals, And so the 0:09:55.280 --> 0:09:57.959 whole problem, the legal problem with DuPont was that it 0:09:58.520 --> 0:10:01.199 misled people sort of to back go style about the 0:10:01.320 --> 0:10:03.880 harm from those chemicals and people got sick. And this 0:10:04.000 --> 0:10:06.480 one lawyer you know over in this left twenty years 0:10:06.480 --> 0:10:10.600 and they're still here, and the actor producer now Ruffalo 0:10:10.720 --> 0:10:13.679 are are going around, you know, advocating that people should 0:10:13.679 --> 0:10:17.400 be aware of that. Then just to read something very comforting, 0:10:17.440 --> 0:10:20.000 I read a book called Bottle of Lies and Bottle 0:10:20.040 --> 0:10:25.640 of Lines is about the generic manufacturers that are I know, 0:10:26.160 --> 0:10:28.280 I was really like, why am I not reading something 0:10:28.280 --> 0:10:30.880 more cheerful, But it's like, who's going to solve that problem? 0:10:30.920 --> 0:10:32.840 Who's going to make sure that the drugs we take 0:10:32.920 --> 0:10:35.800 that come from India are inspected properly? I thought f 0:10:36.120 --> 0:10:38.480 F and then and then you're reading about Boeing. Okay, 0:10:38.480 --> 0:10:40.679 so f A, F d A, these are the regulations 0:10:40.720 --> 0:10:42.719 that we're supposed to be on. It's interesting is we 0:10:42.760 --> 0:10:45.160 have an administration Medista in the Bloomberg that talked about 0:10:45.240 --> 0:10:49.960 there's a lot more loveyist within the administration exactly. So okay, 0:10:50.000 --> 0:10:53.760 So what fifth risk of Michael lewis right? So what 0:10:53.960 --> 0:10:57.640 role does acadeb A play and kind of bringing to 0:10:57.800 --> 0:11:00.120 light some of this because what's interesting is, and I've 0:11:00.120 --> 0:11:02.560 worked at a business school, you know, you often have 0:11:02.600 --> 0:11:05.600 a lot of professors working with the business community consulting, 0:11:06.040 --> 0:11:08.440 and so there's not a very black and white or 0:11:08.440 --> 0:11:12.560 strong division exactly. So I'm here actually very related to 0:11:12.600 --> 0:11:16.800 this writing, and I just you know, got added in later. 0:11:17.400 --> 0:11:20.000 Uh for this week is in a conference and academic 0:11:20.000 --> 0:11:23.600 clabbing at Colombia tomorrow and Friday. That's why what brought 0:11:23.640 --> 0:11:25.920 me to this city. So this is what needs to 0:11:25.960 --> 0:11:28.400 be done. What I'll tell you what needs to be done. 0:11:28.679 --> 0:11:30.880 The incentives of the academics are not right because their 0:11:30.960 --> 0:11:35.360 incentives coming from the private sector expert witnesses, uh, consulting. 0:11:36.080 --> 0:11:38.840 Now we have a story about Google funding research in 0:11:38.880 --> 0:11:42.439 Wall Street Journal recently, etcetera, etcetera. So the private sector, 0:11:42.720 --> 0:11:45.880 you know, funds pharmaceutical research and you know, you just 0:11:46.440 --> 0:11:49.199 you I was promoting Coca Cola for great e s G. 0:11:49.640 --> 0:11:52.880 But it's it's a sugar, you know, manufacturers that distorted 0:11:53.040 --> 0:11:57.040 nutritional research back then, and that was again academics, uh 0:11:57.360 --> 0:12:02.120 for for sale, uh doing that, but lobbying for the public, 0:12:02.240 --> 0:12:04.520 which is really where the political problem is, where the 0:12:04.559 --> 0:12:09.040 thin political markets is where only conflicted academic conflicted experts 0:12:09.040 --> 0:12:12.640 in general, not academic necessarily are involved in writing accounting 0:12:12.720 --> 0:12:15.199 rules or whatever you know, is the underbelly of the 0:12:15.320 --> 0:12:18.839 of the whole thing. Why don't we as academics do 0:12:18.920 --> 0:12:22.440 not have incentives to do that sort of pro bono work, 0:12:22.880 --> 0:12:24.480 you know, the kind of thing I've been running around 0:12:24.480 --> 0:12:27.880 doing and I'm reflecting and so alone and schools need 0:12:27.920 --> 0:12:31.240 to kind of set encourage that, encourage that to be 0:12:31.280 --> 0:12:34.320 involved with our conflict. R So is it up to 0:12:34.360 --> 0:12:37.680 the university is then to set different rules? Well, we 0:12:37.679 --> 0:12:41.760 we we when we evaluate people for tenure or you know, 0:12:42.280 --> 0:12:44.640 the people who do well in that profession, in the 0:12:44.679 --> 0:12:48.719 academic profession, they publish papers and they teach, uh And 0:12:48.760 --> 0:12:51.040 then what they else they do is usually you know, 0:12:51.120 --> 0:12:53.640 consult If they do that or whatever, they can choose 0:12:53.640 --> 0:12:55.880 a cause, they can become involved in you know, school 0:12:55.920 --> 0:12:58.680 board or whatever else like everybody else on the side. 0:12:59.000 --> 0:13:03.600 But profess, what I think and what I've seen gaps, 0:13:03.960 --> 0:13:07.240 huge gaps in the understanding of policy makers of issues 0:13:07.320 --> 0:13:09.840 that we know about that we have a lot of knowledge. 0:13:09.920 --> 0:13:14.120 And it's our duty, I think, and and responsibility to 0:13:14.280 --> 0:13:17.000 help them and to hold him accountable. And that's a 0:13:17.080 --> 0:13:20.559 not at Muddy, Professor of Finance and Economics, at Stanford's 0:13:20.640 --> 0:13:24.640 Graduate School of Business, the number one business school according 0:13:24.679 --> 0:13:32.560 to Business Week. Let's see, Yeah, let's see what's going 0:13:32.600 --> 0:13:36.120 to happen in twenty when it comes to venture capital 0:13:36.160 --> 0:13:39.040 investing because I feel like Jason, we work, it's failed, 0:13:39.080 --> 0:13:40.839 I p O and it's a ray of governance issues 0:13:40.920 --> 0:13:44.720 and really impacted the conversation around startups private markets, and 0:13:44.760 --> 0:13:47.040 that includes of course venture capital. Let's talk about the 0:13:47.120 --> 0:13:49.720 VC world. David springs with us. He's founder and CEO 0:13:49.760 --> 0:13:53.440 at Runway Growth, based in San Francisco, in our Bloomberg 0:13:53.480 --> 0:13:55.840 Interactive Broker studio here in New York. Nice to see 0:13:55.840 --> 0:13:58.160 you again. You too great to be here, So tell us. 0:13:58.440 --> 0:14:01.360 I do wonder about the last to impact of we 0:14:01.600 --> 0:14:07.000 work on the VC world. Has it changed things dramatically? Yeah, 0:14:07.160 --> 0:14:09.880 it has changed things. I'm not sure how long that's 0:14:09.920 --> 0:14:13.960 gonna last, but it has definitely shifted from you know, 0:14:14.040 --> 0:14:18.240 growth at any cost to like path to profitability. You know, 0:14:18.320 --> 0:14:21.040 that's a that's a big thing. But I do think 0:14:21.080 --> 0:14:24.560 that you know, vcs really build companies so that they 0:14:24.560 --> 0:14:28.080 can be exited. So they're building a company so that 0:14:28.320 --> 0:14:31.040 it will please the buyers, and whether the buyers are 0:14:31.800 --> 0:14:34.680 institutions buying on an I p O which is very 0:14:34.760 --> 0:14:37.280 very rare by the way, that gets all the attention 0:14:37.320 --> 0:14:40.280 from the media. But on average there's only like a 0:14:40.360 --> 0:14:41.960 d I p O s a year for the last 0:14:42.000 --> 0:14:44.560 five years, so it's nothing um. But then on the 0:14:44.640 --> 0:14:47.880 M and A side, they're bought by corporate buyers or 0:14:48.000 --> 0:14:50.920 more and more PE firms are the buyers, and they 0:14:50.960 --> 0:14:53.560 do not want to pick up a big burn. So 0:14:53.760 --> 0:14:56.640 you know, you really that path the profitability thing I 0:14:56.680 --> 0:14:59.720 think is, you know, is here to stay, but there 0:14:59.760 --> 0:15:04.400 will be a growth at a measured or intelligent um 0:15:04.440 --> 0:15:07.680 you know spend if you David Wooden, thing that a 0:15:07.760 --> 0:15:09.600 venture capitalists said to me in the wake of We 0:15:09.680 --> 0:15:13.560 Work was this notion that it has changed and made 0:15:13.680 --> 0:15:19.160 much more sophisticated, maybe much more intense conversations between vcs 0:15:19.160 --> 0:15:22.680 and entrepreneurs around governance that essentially they're now able to 0:15:22.720 --> 0:15:24.760 walk in and say, oh, you don't want to do that, 0:15:24.800 --> 0:15:26.440 you don't want an independent board, you don't want to 0:15:26.440 --> 0:15:28.000 do this. Do you want to end up being we work? 0:15:28.120 --> 0:15:32.160 You know that it's become really almost weaponized to some 0:15:32.240 --> 0:15:34.480 extent in this conversation. Have you seen that, have you 0:15:34.520 --> 0:15:37.360 seen more talk about governance at this point. So, first 0:15:37.360 --> 0:15:41.480 of all, the governance extremes that we saw at we work, 0:15:41.920 --> 0:15:44.160 you know, and they are present in a few other 0:15:44.640 --> 0:15:48.240 really high profile deals that you know, we all know about. 0:15:48.720 --> 0:15:51.360 Those are not the norm in Silicon Valley. So and 0:15:51.400 --> 0:15:54.840 it never has been. You know, it's only the you know, 0:15:55.080 --> 0:15:59.760 the hottest of hot companies with the most aggressive CEO 0:16:00.080 --> 0:16:03.040 is that even ask for those things. So and you know, 0:16:03.080 --> 0:16:05.240 really where I operate is in the you know, the 0:16:05.680 --> 0:16:07.800 sung heroes, you know. And one of the things that 0:16:07.840 --> 0:16:09.400 I want to talk to you guys about is like 0:16:09.440 --> 0:16:13.200 this imbalance in the world of venture capital where there's 0:16:13.400 --> 0:16:16.040 so few exits. We talked about I p o s. 0:16:16.040 --> 0:16:18.880 There's only eighty. There's less than a thousand M and 0:16:18.920 --> 0:16:23.400 A exits, and new companies come into the system every year. 0:16:23.720 --> 0:16:26.560 So we're building up this giant mass and now it's 0:16:26.640 --> 0:16:30.320 up to about twenty five thousand companies that are you know, 0:16:30.560 --> 0:16:34.200 venture backed. They're not exiting and in a lot of 0:16:34.240 --> 0:16:37.880 cases they're outliving the ability of their venture firms to 0:16:37.960 --> 0:16:41.640 support them. And you know, dealing with how to fund 0:16:41.680 --> 0:16:43.720 those companies that for lack of a better word or 0:16:43.760 --> 0:16:46.760 good but not great. Uh, that's what we're all about. 0:16:47.160 --> 0:16:49.760 And to get your point, Jason, those people have never 0:16:49.800 --> 0:16:54.440 asked for these crazy, interesting, crazy governance uh you know, uh, 0:16:54.640 --> 0:16:57.400 abnormal requests. So among those you said, was it about 0:16:57.400 --> 0:17:00.840 twenty companies, did you say the true back companies in 0:17:00.840 --> 0:17:04.119 existence today? How many of them will ultimately exist in 0:17:04.359 --> 0:17:06.040 five to ten years from now? Because I do feel 0:17:06.080 --> 0:17:08.840 like in the VC world, certainly in the early startup world, 0:17:08.840 --> 0:17:10.960 whether it's angel investing, people throw a lot of money 0:17:10.960 --> 0:17:13.240 at things that never come to fruition. So I do 0:17:13.320 --> 0:17:16.359 wonder if those twenty five thousand that might be struggling 0:17:16.359 --> 0:17:20.480 to get capital that I love capitalism, maybe some of 0:17:20.520 --> 0:17:23.040 them shouldn't be able to exist going forward. I mean, 0:17:23.080 --> 0:17:26.359 that's the system working correct, definitely, So this you know, 0:17:26.800 --> 0:17:29.160 law of nature and survival of the fittest and all 0:17:29.160 --> 0:17:32.199 of that, it definitely works. I'm more talking about the 0:17:32.240 --> 0:17:35.800 people that deserve to survive and are not getting the 0:17:35.840 --> 0:17:39.840 attention because the venture capital business is so geared towards 0:17:39.880 --> 0:17:42.400 hitting home runs, not even home runs Grand Slam. Even 0:17:42.440 --> 0:17:44.600 with all that money that's lashing around, Jason, I constantly 0:17:44.640 --> 0:17:47.239 have conversation about whether it's private equity money, whether it's 0:17:47.240 --> 0:17:50.480 family wealth offices, whether it's you know, institutional money. There's 0:17:50.520 --> 0:17:53.160 so much money that's looking to go in that area. 0:17:53.240 --> 0:17:55.240 You're saying it's not it's not very all want to 0:17:55.280 --> 0:17:57.679 get into the unicorns, you know, the people that you 0:17:57.720 --> 0:18:00.520 guys talk about, that's where they want to invest. And 0:18:00.600 --> 0:18:03.159 there is a ton of money trying to fight their 0:18:03.200 --> 0:18:05.640 way into those deals, but not the guys that are 0:18:05.640 --> 0:18:08.480 doing our twenty or thirty or forty million that deserve 0:18:08.640 --> 0:18:10.840 to survive, but they're never going to be an I 0:18:10.920 --> 0:18:13.520 p O. How do you solve that imbalance? Well, I 0:18:13.560 --> 0:18:15.840 think we're going to have a new class called distressed 0:18:15.920 --> 0:18:19.280 venture where people will raise venture funds to come in 0:18:19.440 --> 0:18:23.200 and capitalize on the opportunity to build these companies and 0:18:23.320 --> 0:18:27.200 take advantage of the weakness of or inability of existing 0:18:27.240 --> 0:18:30.280 investors to continue to support those companies. And then people 0:18:30.320 --> 0:18:33.119 like us that do venture debt, where we lend money 0:18:33.119 --> 0:18:35.919 as an alternative or supplement to equity, we we can 0:18:35.960 --> 0:18:39.439 help those companies. It does seem like we're in for 0:18:39.600 --> 0:18:43.000 some sort of reckoning is probably too strong of a word, 0:18:43.080 --> 0:18:47.119 but across the entire private capital spectrum totally agree and 0:18:47.119 --> 0:18:51.879 that's David Spraying, the CEO of Runway Growth. Don't you 0:18:51.960 --> 0:18:58.680 want to So what if our next guest picked this song, 0:18:58.840 --> 0:19:03.160 We'll get into I about being evil, Um, and it 0:19:03.200 --> 0:19:06.680 speaks to a bigger, broader theme this year, and it's 0:19:06.680 --> 0:19:08.159 been a theme this year, and it's no dabt going 0:19:08.200 --> 0:19:11.280 to be a theme in big tech, the regulation of it, 0:19:11.359 --> 0:19:13.719 what big tech stands for, what they're all about, how 0:19:13.720 --> 0:19:16.520 they're impacting our world. Let's get into it because Vinnie 0:19:16.520 --> 0:19:19.280 Calano is back with us, the chief market strategists at 0:19:19.280 --> 0:19:23.920 Stuyvesant Capital Management, global investment strategists at Dafoux Redmount uh 0:19:23.920 --> 0:19:27.760 And also with us is CNN global economic analyst Rona Faruhar. 0:19:27.960 --> 0:19:30.600 She is also author of the book Don't Be Evil, 0:19:30.760 --> 0:19:35.040 Hence the Evil, How Big Tech betrayed its founding principles 0:19:35.080 --> 0:19:38.080 and all of us. They're both in our Bloomberg Interactive 0:19:38.080 --> 0:19:42.120 Broker Studio. Nice to have you both with us, Um, 0:19:42.240 --> 0:19:44.160 Jason and I talked about this all the time. First 0:19:44.160 --> 0:19:46.239 of all, talk to us a little bit about the 0:19:46.240 --> 0:19:49.600 premise for your book. Well, Um, you know I cover 0:19:49.720 --> 0:19:51.879 the markets and you just look at the numbers and 0:19:51.920 --> 0:19:54.719 you see that basically about eight percent of corporate value 0:19:54.760 --> 0:19:56.920 is living in ten percent of firms and other firms 0:19:56.920 --> 0:19:59.360 that have the most data the most intellectual property. So 0:19:59.560 --> 0:20:02.000 this is sort of a massive shift. That's really the 0:20:02.000 --> 0:20:05.440 industrial revolution of our time. So the economic story is there. 0:20:05.480 --> 0:20:07.840 The political story, I mean, we've been living this now 0:20:07.880 --> 0:20:10.960 for two years. The fact that the model of a 0:20:11.040 --> 0:20:15.080 Google or Facebook in particular is highly targeted advertising. It's 0:20:15.119 --> 0:20:19.960 about targeting us down to the individual. But that split society. 0:20:20.000 --> 0:20:22.200 I mean, it comes with side effects. It comes with 0:20:22.240 --> 0:20:24.440 a lot of great value, but it comes with side effects. 0:20:24.680 --> 0:20:28.000 Then there's the brain science, the social issues, and you know, 0:20:28.080 --> 0:20:30.600 to be honest, I got into this topic in some 0:20:30.640 --> 0:20:32.680 ways for a personal reason. I came home one day, 0:20:32.960 --> 0:20:34.880 I was looking at a credit card bill and there 0:20:34.880 --> 0:20:37.680 were all these tiny charges dollar ninety three dollars and 0:20:37.720 --> 0:20:39.959 I thought, my god, I've been hacked. And then I 0:20:40.000 --> 0:20:43.359 realized my ten year old son has my passwords. Turns 0:20:43.400 --> 0:20:46.520 out he had racked up nine dollars in a supposedly 0:20:46.720 --> 0:20:51.000 free online soccer game that was tracking him and selling 0:20:51.080 --> 0:20:53.159 him in app purchases. And I thought, you know, as 0:20:53.200 --> 0:20:54.720 a mother, I was horrified, but as a as a 0:20:54.720 --> 0:20:57.119 business journalist, I thought, I want to know everything about this, 0:20:58.160 --> 0:21:01.239 So Benny, come on in here, because, as Ronna so 0:21:01.720 --> 0:21:04.480 wisely noted at the top, I mean, there's a business 0:21:04.480 --> 0:21:09.000 story front and center, and for investors, what's not to 0:21:09.080 --> 0:21:11.040 love about tech? I mean, Carol just went through the 0:21:11.119 --> 0:21:14.640 numbers at the close of how well these big tech 0:21:14.680 --> 0:21:17.960 stocks have done. Investors have made a ton of money here. 0:21:17.520 --> 0:21:20.199 Fair missing out too if you don't chep on the 0:21:20.000 --> 0:21:22.879 on the investment training here. Sure, absolutely, I think I 0:21:22.920 --> 0:21:26.960 think the listeners investors should know that there is an 0:21:27.000 --> 0:21:30.720 investment paradigm here, uh, that they need to dig a 0:21:30.760 --> 0:21:34.600 little bit deeper into and understand. Ronna talks about it 0:21:34.640 --> 0:21:38.159 with the the targeted ads and the revenue streams that 0:21:38.200 --> 0:21:43.119 are coming from from this surveillance capitalism system that is 0:21:43.160 --> 0:21:46.439 going on. Uh. And it's interesting when Ronna mentions about 0:21:46.840 --> 0:21:49.840 that she was hacked, she thought she might have been hacked, 0:21:49.840 --> 0:21:53.160 And as I began to explore this area thanks to Rna, 0:21:53.680 --> 0:21:57.960