Speaker 1: This is Bloomberg Business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Sloomberg
Speaker 1: Business Week with Carol Messer and Tim Stentovic on Bloomberg Radio. Hi, everyone,
Speaker 1: Welcome to the weekend edition of Bloomberg Business Week. Davos Earnings,
Speaker 1: picking up US economic data showing the FED rate hikes,
Speaker 1: slag no more Well, it all added up to a
Speaker 1: market reset this week. With that in mind, this hour,
Speaker 1: we've got a bit of a theme on how the
Speaker 1: investing world and financial markets are changing. You might even
Speaker 1: call it a quote see change. More on that from
Speaker 1: oak Tree Capitals. Howard marks in a moment because that's
Speaker 1: what he says it's going on exactly. Also, the ever
Speaker 1: evolving narrative over how we work. We get into that
Speaker 1: with Aaron Levy. He's co founder and CEO at the
Speaker 1: online storage and document management software company Box and Well.
Speaker 1: Boxes largely weathered the storm that's battered the tech sector
Speaker 1: over the last year, so some of its peers have
Speaker 1: not been as fortunate. This week's issue of the magazine
Speaker 1: digs into the spade of layoffs it firms like Amazon, Microsoft,
Speaker 1: and Meta, and then on Friday, Google parent Alphabet said
Speaker 1: it will cut about twelve thousand jobs. That's more than
Speaker 1: six percent of its global workforce. And our cover story
Speaker 1: this week, It's All about a massive fake meat flop,
Speaker 1: will find out why the initial craze over plant based
Speaker 1: meat makers such as Impossible Foods and Beyond Meat has
Speaker 1: officially fizzled out. Oh of that to come. We begin
Speaker 1: with a voice familiar to the investment community, Howard Marks,
Speaker 1: the co founder and co chairman of oak Tree Capital Management,
Speaker 1: known for his investing in distress securities. The firm has
Speaker 1: a hundred and sixty three billion dollars in assets under management.
Speaker 1: He joined us in studio this past week to break
Speaker 1: down a recent research note that he published about what
Speaker 1: he calls a sea change in the world of investing.
Speaker 1: The point is that a sea change is something more
Speaker 1: fundamental than a minor cyclical fluctuation. It suggests a total
Speaker 1: transformation that will be somewhat long lasting. The point of
Speaker 1: the mo was that ever since the global financial crisis,
Speaker 1: the FED put in emergency measures to rescue the economy
Speaker 1: and the markets uh and they worked, but they were
Speaker 1: continued for a long time. Zero rates were the rule
Speaker 1: for seven years, which I was stunned to find out
Speaker 1: when I researched it. And uh, that conditioned the markets
Speaker 1: to depend on ultra low rates, which was unrealistic. And
Speaker 1: then when they tried in sixteen seventeen eighteen to raise rates,
Speaker 1: they got a lot of pushback. The fourth quarter of eighteen,
Speaker 1: you may recall, they took the Fed funds rate hit
Speaker 1: three and a quarter and the fourth quarter of eighteen
Speaker 1: was the worst fourth quarter in history as a consequence,
Speaker 1: So they were in a low return trap, and lenders
Speaker 1: likewise were in a low return trap. You know. I
Speaker 1: I gave a speech for eight years entitled investing in
Speaker 1: a low return World, and and it wasn't fun the
Speaker 1: because how do you get a good return in a
Speaker 1: low return world. You either accept the low returns or
Speaker 1: you take on more risk to try to get a
Speaker 1: high return, and that may not be a great idea either.
Speaker 1: So there is no easy out. And and we labored
Speaker 1: in the in the wilderness for a decade with low
Speaker 1: yields prevalent, and I think that that's not going to
Speaker 1: be the case to the same degree going forward. It's
Speaker 1: not just you know, low yields not being prevalent as
Speaker 1: being part of this sea change. What else do you see, which,
Speaker 1: by the way, you argue, this is only the third
Speaker 1: sea change you've seen in your career. Yes, well, And
Speaker 1: in the seventies I saw the adoption of risk return thinking.
Speaker 1: You know, before that a professional money manager or fiduciary
Speaker 1: the rules where this is okay to do, this is
Speaker 1: not okay to do. But with the advent of high
Speaker 1: yel bond issuance in the late seventies, people started to think, well,
Speaker 1: it may be risky, but I'm well paid to do it,
Speaker 1: so I'm gonna do it. It makes sense, And that
Speaker 1: has become the rule and been the rule ever since.
Speaker 1: And I think that was a very good change. Most
Speaker 1: of the things that we see in the financial world
Speaker 1: today are the result of that calculus. Then in the
Speaker 1: early eighties, of course, to fight the inflation that was
Speaker 1: prevalent in the US reaching mid teens, UH Vulker took
Speaker 1: the FED funds rate to twenty and that, you know,
Speaker 1: eventually killed off inflation and inflationary expectations. It kind of
Speaker 1: killed the economy, uh in the process. But then you know,
Speaker 1: I had a rate loan outstanding from a bank in
Speaker 1: eighty and I got a slip saying the rate is
Speaker 1: now two and a quarter. Forty years later, I was
Speaker 1: able to borrow money at two and a quarter. So
Speaker 1: we had a two thousand basis point decline and interest rates.
Speaker 1: And that was a major event. That was probably the
Speaker 1: biggest single financial event of the last half century. But
Speaker 1: nobody talks about it. How when do you want to
Speaker 1: ask you? And it's in your research note. You know
Speaker 1: you talk about when you see both rising asset values
Speaker 1: as well as a very low rate environment and what
Speaker 1: that does in terms of leverage, tell us how that
Speaker 1: maybe creates Ultimately, I'm assuming opportunities for you. Look, the
Speaker 1: government doesn't make anything. It doesn't add to GDP, it
Speaker 1: doesn't create anything. Oh it does is takes money in
Speaker 1: and puts money out, and it policy benefits some and
Speaker 1: hurts others. So the policies of the last fourteen years
Speaker 1: that I'm talking about benefited asset owners and borrowers and
Speaker 1: penalized lenders and savers. But it was a boon for
Speaker 1: anybody who owned assets and for anybody who borrowed. And
Speaker 1: what about people who did both, who owned assets on
Speaker 1: borrowed money, a double bonanza. The problem is that a
Speaker 1: the success of that depends somewhat on the persistence of
Speaker 1: that environment. And number two, environments that produced high profits
Speaker 1: usually encourage people to push the limits further and to
Speaker 1: go out and do riskier things because of the absence
Speaker 1: of of a risk aversion which you really ends up badly. Uh. So,
Speaker 1: you know, we've gone through an easy period for the
Speaker 1: last fourteen years. Be different now, and I believe that
Speaker 1: the coming period will be a harder period, not a cataclysm,
Speaker 1: not a depression. But you know, I think that people
Speaker 1: don't recognize that the last fourteen years have been unusually easy.
Speaker 1: So it opens up the question about where specifically you
Speaker 1: would see opportunities for distress, debt and beyond. Sure. Well, uh,
Speaker 1: first of all, I think we might see something and
Speaker 1: that would be a change. You know, in the in
Speaker 1: the very benevolent environment that we had over that period,
Speaker 1: it was very hard to default. It was very hard
Speaker 1: to go bankrupt. In fact, you had to have something
Speaker 1: seriously wrong to do that, because most companies that just
Speaker 1: burned money every quarter could borrow more. We just talked
Speaker 1: about the biotech sector that it's for them. Yes, so so,
Speaker 1: but when when risk aversion rears its head and you
Speaker 1: go in to get more, now, somebody might say, you
Speaker 1: know what, you're just burning money. We're not going to
Speaker 1: give anymore. So we're and I think it was November
Speaker 1: you talked with our team and you said, great bargains
Speaker 1: coming as recession looms. So we're specifically, I know we've
Speaker 1: been you know, is it energy, is it real estate?
Speaker 1: Is it where is it? Well? You know, uh, I'd
Speaker 1: never get down to that granular level. And uh, we
Speaker 1: our activities are kind of not planned. Uh, and we're opportunistic.
Speaker 1: When something pops up and we and and and some
Speaker 1: company has to roll over its debt and suddenly is unable,
Speaker 1: you know, we mobilize. So you know the point is
Speaker 1: we're not we're not laying plans in advance. Well, do
Speaker 1: we do we take something like Elon Musk and all
Speaker 1: the debt he took on for Twitter? Do we take
Speaker 1: a bed bath? And beyond another retailer falling to the wayside.
Speaker 1: I'm trying to think party City, Party City. Um, I
Speaker 1: feel like you could name any crypto firm over the
Speaker 1: last site. These these signs that are playing to what
Speaker 1: you're talking. Well, let me let me just say, without
Speaker 1: getting too specific, which I always try to avoid, that's okay. Um,
Speaker 1: that our our mantra is good company, bad balance sheet.
Speaker 1: A company a good company that has gotten over levered
Speaker 1: and that leverage level has turned out to be excessive
Speaker 1: for the environment that has unfolded. Uh, you can fix
Speaker 1: that by delivering the company. Maybe you take it through
Speaker 1: a bankruptcy in which you reject a lot of debt.
Speaker 1: But it's easy too. If you can delever a good company,
Speaker 1: it goes on to success or, or certainly it's it's reinstated. Uh.
Speaker 1: Bad companies are hard to fix as opposed to a
Speaker 1: good company with bad balance sheet. So you you you
Speaker 1: propose the list, you figure out which companies on that
Speaker 1: list you know are are important to stay in business
Speaker 1: for the next ten years. You mentioned a couple of retailers, Carol,
Speaker 1: which makes me question if you're any industries or sectors
Speaker 1: you would avoid historically. Um, we're okay with retail, although
Speaker 1: one has to be cognizant of the changing business model. Uh.
Speaker 1: You know, we're we're mostly active in what I would
Speaker 1: call the basic industries, the traditional industries. Uh, the ones
Speaker 1: with assets like energy, like like energy, yes, manufacturing, distribution, transportation, Uh,
Speaker 1: even retail under the right circumstances. Uh. You know where
Speaker 1: we historically have not been active has been, for example, technology,
Speaker 1: because there you need a higher level of expertise with
Speaker 1: regard to the subject matter. UM, intellectual property, style, fashion,
Speaker 1: things like that. UM, this environment, this see change, we
Speaker 1: only have about thirty seconds left. How long does it
Speaker 1: stay with us in your view? Because as you say,
Speaker 1: these don't happen a lot, but they do stick. Well.
Speaker 1: You know, I don't make forecasts, and I don't believe forecasts,
Speaker 1: especially my own. Having said that, you know, I'm not
Speaker 1: talking about uh, six months or a year, and I
Speaker 1: don't ever venture a thought to ten years. So I
Speaker 1: would say something in between. But I mean, this is material,
Speaker 1: and I would say a few or several years. Well,
Speaker 1: And I do feel like it mirrors some of the
Speaker 1: conversations we've had that this low rate environment of a
Speaker 1: generation who has never seen anything. But could we see
Speaker 1: a fourth sea change in your career? I hope I
Speaker 1: live long enough. That was Howard Marks. He's the co
Speaker 1: founder and co chairman of oak Tree Capital Management. Coming
Speaker 1: up next to Silicon Valley executives, as his company can
Speaker 1: serve users in any environment, regardless of whether workers ever
Speaker 1: returned to their offices. In all cases, you're going to
Speaker 1: be creating more digital content than ever before. And there's
Speaker 1: an explosion of video content, there's an explosion of written
Speaker 1: content as a result of companies getting more distributed, more collaborative,
Speaker 1: working in new ways. So in our case, these all
Speaker 1: point to long term tail ones because of just the
Speaker 1: massive digitization of our business processes and the way that
Speaker 1: we work. Box CEO Aaron Levy talks cloud technology, the
Speaker 1: outlook for the U S economy, and what he thinks
Speaker 1: of Elon Musk at the Helm of Twitter. You're listening
Speaker 1: to Bloomberg Business Week. This is Bloomberg. Please sees Bloomberg
Speaker 1: Business Week with Carol Messer and Tim Stinebeck from Bloomberg Radio. Well,
Speaker 1: it's been a while. In fact, the last time we
Speaker 1: talked with our next guest about his company, the world
Speaker 1: was in the thick of the pandemic we're talking about
Speaker 1: back in August of It's a very different environment today,
Speaker 1: and yet Tim one still with a ton of concerns. Yeah,
Speaker 1: we're talking about Box, the company develops internet application software
Speaker 1: and manages all types of multimedia content in the cloud.
Speaker 1: It was also a tech sector outlier in two shares
Speaker 1: of the nearly four point four billion dollar market cap.
Speaker 1: Company gained about nineteen percent last year. Yeah, I was
Speaker 1: kind of shocked when I checked out. I thought it
Speaker 1: was like a typo, a very different environment for that name. Certainly. Well,
Speaker 1: Aaron Levy is co founder and CEO at Box. We
Speaker 1: began by asking him about how his world has changed
Speaker 1: over the last two and a half years and what
Speaker 1: it all means for his company going forward. It's actually
Speaker 1: interesting reflecting on being in New York versus the Bay Area.
Speaker 1: I do think that, you know, it's a little bit
Speaker 1: of a tale of two cities in terms of actually,
Speaker 1: you know, kind of how much is back in both environments.
Speaker 1: We're back here more maybe by about in order of magnitude. Yeah,
Speaker 1: So it's it's definitely different environments, but we are seeing
Speaker 1: this across our customer base of companies coming back, returning
Speaker 1: to offices sort of, you know, establishing new work patterns,
Speaker 1: um And it's it's definitely going to be different than
Speaker 1: pre pandemic, but it's certainly equally going to be more
Speaker 1: different than during the peak of the pandemic as well.
Speaker 1: What makes you say that just just walking down the street,
Speaker 1: seeing the subways, what's going on. Every office building I've
Speaker 1: been in this week has been, you know, fairly packed
Speaker 1: and uh and maybe a little bit more muted than
Speaker 1: pre pandemic. But if you compare that to you know,
Speaker 1: sort of the Bay Area in California, it's it's definitely
Speaker 1: still pretty different. Okay. What's interesting about this though, is
Speaker 1: that we heard this week that Bob Iger and this
Speaker 1: is not a Silicon Valley company by any means, but
Speaker 1: he wants people to come back to Disney four days
Speaker 1: a week. And Caroline, I've talked about this quite a
Speaker 1: bit that you know, as the economy weekends and the
Speaker 1: work is not in as much control, we could start
Speaker 1: to see more and more people coming back. What are
Speaker 1: you seeing with with your data at box in terms
Speaker 1: of where people are accessing the product? Are they increasingly
Speaker 1: accessing it at home permanently? Do you think? Yeah? I
Speaker 1: think absolutely down from the pandemic peak. In terms of
Speaker 1: work from home, I do think companies are sort of
Speaker 1: all trying to figure out what are their rituals in
Speaker 1: terms of how people work and where they work from.
Speaker 1: You know, Bob Iger at Disney, you know Tim Cook
Speaker 1: at Apple, what we just saw from Howard Schultz at
Speaker 1: at at Starbucks, you know, pushing you know, some of
Speaker 1: these sort of three or four date policies. I think, um,
Speaker 1: you know, is sort of just now the tip of
Speaker 1: the iceberg of what might you know come next across
Speaker 1: fortunate hundred companies and and uh and more generally. But
Speaker 1: I do think, no matter what, some version of hybrid work,
Speaker 1: some version of more distributed work, some version of more
Speaker 1: flexibility is here to stay. Um. And what that all
Speaker 1: is going to point to is the need for digital
Speaker 1: technologies and cloud to be able to actually mediate how
Speaker 1: people work from any device or any location that they're
Speaker 1: working from. So we kind of are sort of fine
Speaker 1: with any outcome, whether everything's fully removed or partially back
Speaker 1: to the office or fully back to the It doesn't
Speaker 1: matter for you what the mixes does it in terms
Speaker 1: of your business growth. Now, in all cases, you're going
Speaker 1: to be creating more digital content than ever before, and
Speaker 1: there's an explosion of video content, there's an explosion of
Speaker 1: written content. As a result of companies getting more distributed,
Speaker 1: more collaborative, working in new ways. So in our case,
Speaker 1: these all point to long term tail ones because of
Speaker 1: just the massive digitization of our business processes and the
Speaker 1: way that we work. And you talk big broad and
Speaker 1: we do too, but remind our audience exactly like get
Speaker 1: down to the nitty gritty what you do for a company.
Speaker 1: So Box works with over a hundred thousand companies, uh
Speaker 1: and we have a platform that helps them securely manage
Speaker 1: their most important data, so their contracts, their financial documents,
Speaker 1: their presentations, their media content. We help you store it,
Speaker 1: share its secure it collaborate on that data from any
Speaker 1: advice anywhere. So it's a cloud platform that the powers
Speaker 1: how you work with your information. Bulks still small, mid, large,
Speaker 1: all size organizations. The majority of the revenue comes from
Speaker 1: large enterprises, so um so we tend to sort of
Speaker 1: be waited toward you know, the fortunate five hundred type organizations,
Speaker 1: but we support businesses of all sizes with with over
Speaker 1: a hundred thousand customers. Based on what you're seeing, sorry,
Speaker 1: I'm about I'll let you and based on what you're
Speaker 1: seeing recession, no recession globally U S what are you seeing?
Speaker 1: You know? I think you know these guys have to order,
Speaker 1: they have to work with you, they've got to say, hey,
Speaker 1: this is what we're thinking. I mean, I'm the last
Speaker 1: person that should decide the definition of a recession, but
Speaker 1: I ask no trend. Yeah, I think there's there's clearly
Speaker 1: a muting of um, you know, some degree of a
Speaker 1: muted kind of aspect of just share kind of corporate
Speaker 1: growth that that does tie into I t spend. Fortunately,
Speaker 1: we're in a position where we can help customers save
Speaker 1: money and drive up productivity and improve their security. So
Speaker 1: because we do see when people like I was just
Speaker 1: looking at lending trade, they cut workers in the stock
Speaker 1: like initially you know, went higher. So I do understand
Speaker 1: this idea of technology helping a company. Yeah, so technology
Speaker 1: will help companies get more efficient. Um, but we obviously
Speaker 1: want there to be a very robust, you know environment
Speaker 1: for for companies to grow. And I think there is
Speaker 1: a muting a little bit of the consumer economy, certainly
Speaker 1: in some of the consumer tech companies. You know, advertising
Speaker 1: dollars are are lessening a little bit. But our job
Speaker 1: is just to help companies no matter where they are,
Speaker 1: and that continuum to get more efficient, be more productive,
Speaker 1: stay more secure. Okay, something weird is happening because you know,
Speaker 1: most software stocks, most software stocks just got crushed. Okay
Speaker 1: last year, you guys are up ninety you're in fact
Speaker 1: close to record highs right now. How this is a
Speaker 1: high interest rate environment? What's going to really rough environment?
Speaker 1: I think connected with the cloud. Yeah, it is. It
Speaker 1: is a rough environment, particularly if you are a high
Speaker 1: growth company, UM, where your stock was largely bolstered by
Speaker 1: your growth rate and UM, and that with with kind
Speaker 1: of higher interest rates. UM. You know, the valuation of
Speaker 1: those companies have come down naturally. UM. You know, it's
Speaker 1: an interesting, you know, almost bitter suite dynamics. So we
Speaker 1: never really had an inflated valuation, so that meant there
Speaker 1: was sort of less less room to come down. At
Speaker 1: the same time, we've been working pretty um, you know,
Speaker 1: significantly on improving our profit margin in the past three years.
Speaker 1: So how do you do that? Just just hyper focus
Speaker 1: on efficiency across the business. UM. Actually not not really
Speaker 1: about cutting, but but you can kind of grow into
Speaker 1: um your your head count in a lot of cases
Speaker 1: largely by just remaining extremely focused on the areas that
Speaker 1: are working in the business. So doubling down in sort
Speaker 1: of the products that are are generating the greatest returns
Speaker 1: as opposed to diluting your bets, um, doubling down in
Speaker 1: the regions that are most productive, and so our case
Speaker 1: by region, I mean, you know where the most sort
Speaker 1: of you know, the largest I T spending markets and
Speaker 1: and not deluding our focus from a regional standpoint, um,
Speaker 1: getting really really focused on gross margin and the efficiency
Speaker 1: of our platform. So starting about three years ago, we
Speaker 1: kind of had a bunch of work streams across the
Speaker 1: business to get more efficient. And you know, fast forward
Speaker 1: to today that's actually in vogue, but it wasn't at
Speaker 1: the time, and so we never got that inflate evaluation.
Speaker 1: But as valuations came down, I think across the sector,
Speaker 1: ours by comparison was was holding up, you know, pretty nicely.
Speaker 1: You know, I want to ask you about something because
Speaker 1: this week, are we see was that with some research
Speaker 1: they anticipate there will will be kind of two has
Speaker 1: for US software stocks, and they talked about kind of
Speaker 1: overall what they see, but they did cut Box to underperform.
Speaker 1: They cut the price target to four from they're concerned
Speaker 1: about the sustainability of your turnaround, particularly of Japan growth
Speaker 1: slows your stock was down about six percent on that call.
Speaker 1: Can you address it? And they did also talk a
Speaker 1: lot about the Japanese market, which has been good for you. Yeah,
Speaker 1: so we we've seen tremendous growth in Japan. Um, we
Speaker 1: kind of got you know, sort of the right place,
Speaker 1: right time, and at the beginning of a kind of
Speaker 1: a SASS or cloud supercycle about you know, nearly ten
Speaker 1: years ago. So we had all the right partners, We
Speaker 1: had a great team on the ground, and we rode
Speaker 1: this wave of large companies adopting SASS and so that
Speaker 1: that's actually been a very strong tail into our business.
Speaker 1: Almost by definition, as that business get larger, the growth
Speaker 1: rate will come down. So so that you know, was
Speaker 1: in this sort of note, Um, it's actually something that
Speaker 1: we already anticipate and it's sort of built into our
Speaker 1: general model. UM. But but overall, you know, we we
Speaker 1: we we obviously care about the health of the global
Speaker 1: business even if the Japan growth rate comes down. UM,
Speaker 1: our job is to make sure that we manage that
Speaker 1: at a global level. Before we let you go. We
Speaker 1: got forty seconds your pointe on Twitter two point four
Speaker 1: million followers. Obviously you've been following with what are your
Speaker 1: thoughts on on what Elon Musk has done to the platform?
Speaker 1: So I'm I'm always a fan of kind of moving fast,
Speaker 1: innovating quickly, and so some of the some of the
Speaker 1: changes have been, you know, exciting to see some changes
Speaker 1: maybe I don't agree with as much. In general, I
Speaker 1: think that the platform should say, very very focused on
Speaker 1: getting to a global population of consumers. I think maybe
Speaker 1: less focus on the paid subscription product, more focused on
Speaker 1: more features at the free level. Still useful to you, Yeah, absolutely,
Speaker 1: I mean I just as useful as it was indispensable.
Speaker 1: That was Aaron Levy, the co founder and CEO at Box.
Speaker 1: Still ahead on Bloomberg Business Week, Where has all the
Speaker 1: money gone for biotech startups? Our team breaks down the
Speaker 1: sudden dearth of new investments in a space we rely
Speaker 1: on for new innovations, particularly ones that can benefit our health,
Speaker 1: whether they're public companies are private. People are focusing on
Speaker 1: only the most important z is or the drugs that
Speaker 1: have the biggest probability of success, And of course that
Speaker 1: means that those other diseases, those other patients who are
Speaker 1: waiting for medicines for their diseases are going to have
Speaker 1: to wait Plus we'll look at the growing wave of
Speaker 1: job cuts taking place across tech firms in Silicon Valley
Speaker 1: and beyond, and where displaced workers might turn next. This
Speaker 1: is Bloomberg Broadcasting from the financial capital of the world
Speaker 1: Bloomberg eleven Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one O six one does San Francisco,
Speaker 1: Bloomberg nine sixty to the country Sirius XM Channel one
Speaker 1: nine team, and around the globe the Bloomberg Business and
Speaker 1: Bloomberg Radio dot Com. This is Bloomberg Business Week with
Speaker 1: Carol Messer and Tim Stinove from Bloomberg Radio. What we
Speaker 1: said this hour was all about how things are changing.
Speaker 1: One area definitely seeing that biotech, which for a long
Speaker 1: time was the hot investment as venture capital firms and
Speaker 1: really investors generally poured tons of money into startups in
Speaker 1: the industry. It's a different story today, though, as VC
Speaker 1: investments are on track for the sharpest drop in more
Speaker 1: than two decades, surpassing the declines of the dot com
Speaker 1: crash and the financial crisis. Now biotech firms on the
Speaker 1: hunt for new money. This story in the Business section
Speaker 1: of this week's issue. We get more from Business Week
Speaker 1: editor Joe Weber and Bluemberg News healthcare reporter Angelica Peebles,
Speaker 1: who got some key intel at the annual JP Morgan
Speaker 1: Healthcare Conference earlier this month. So it's interesting because I
Speaker 1: speak to a lot of specialist vcs and they say
Speaker 1: that nothing has changed fundamentally. Um, there's still a lot
Speaker 1: of great companies. There's a lot of great science out there,
Speaker 1: and that actually we kind of needed a reset because
Speaker 1: there were so many companies that we're getting started and
Speaker 1: easily finding money, and that it led to sort of
Speaker 1: this overheated market where anyone could fund a company based
Speaker 1: on a dream rather than data. So they're not really
Speaker 1: upset to see this. Of course, if you're a company,
Speaker 1: UM that can't find money, that's a bigger problem for you.
Speaker 1: And there's always the risk that even the good companies
Speaker 1: won't be able to fundraise in this environment. So I
Speaker 1: like the idea that you know, this is there's a
Speaker 1: silver lining to this, that there's an opportunity here. I'm
Speaker 1: wondering if you got the sense from some of these
Speaker 1: folks you talked to out at the JP Morgan conference
Speaker 1: in San Francisco that this is part of a normal
Speaker 1: economic cycle or or if this downturn is any different. Yeah,
Speaker 1: that's what a lot of people say, especially the VCS.
Speaker 1: They've been through these cycles before. It typically happens where
Speaker 1: there's a boom and a bust and it's nothing new. However,
Speaker 1: there are some differences this time around. There's this big
Speaker 1: new law, the Inflation Reduction Reduction Act, that could cap
Speaker 1: drug prices in a few years, and people are wondering
Speaker 1: what exactly that will mean. Um, we're already hearing from
Speaker 1: some pharma companies that they are looking at potentially less
Speaker 1: lucrative evaluations for companies that they might invest in, partner
Speaker 1: with more eventually acquire. So that's an unknown. And also
Speaker 1: were coming out this period where evaluations were so hot,
Speaker 1: and you know, how will companies go moving forward. One
Speaker 1: person I talked to describe it as this sugar rush
Speaker 1: and now that sugar rush is over and and never
Speaker 1: really a new playbook. Yeah, that's definitely not a good thing.
Speaker 1: Maybe there maybe there needs to be some sort of
Speaker 1: like pharmaceutical to prevent desire for sugar. I don't know, Angelica,
Speaker 1: I do wonder though, you know, a lot of money.
Speaker 1: Sometimes it gets used recklessly when there's what it's really
Speaker 1: kind of loose and money is cheap. But at the
Speaker 1: same time, it also provides open opportunities I feel like
Speaker 1: for developments that really can change the way we're treated,
Speaker 1: whether it's healthcare or modalities. And I do wonder if
Speaker 1: the money isn't so easy, does it mean biotech really
Speaker 1: has to think hard about what they're going to work on,
Speaker 1: and maybe that's not great for innovation. Definitely, we saw
Speaker 1: this boom of platform companies as they like to call themselves,
Speaker 1: so companies that were working on many different diseases or
Speaker 1: um all kinds of areas as opposed to just one
Speaker 1: drug for one disease, and that was sort of the
Speaker 1: hot beam of one And this year already we're seeing
Speaker 1: the theame is prioritized. So one company at Aitas, they're
Speaker 1: based here in Boston, in the Boston area, and they
Speaker 1: said that they would stop the work that they've been
Speaker 1: doing on eye diseases and instead focus on blood disorders.
Speaker 1: And they're seeing that across the board, whether their public
Speaker 1: companies are private, people are focusing on only the most
Speaker 1: important diseases or the drugs that have the biggest probability
Speaker 1: of success, and of course that means that those other diseases,
Speaker 1: those other patients who are waiting for medicines for their
Speaker 1: diseases are going to have to wait. Okay, so things
Speaker 1: not good here? How uh, what do they look like
Speaker 1: in the UK compared to here or anywhere else, just
Speaker 1: to get a sense of what, you know, what the
Speaker 1: industry feels like around the world. Across the board, we
Speaker 1: saw funding dip this year or compared to one UM
Speaker 1: so it's not only the US, but of course the
Speaker 1: US and a lot of the companies I cover are
Speaker 1: focused here, and so that's why particularly we're focused on
Speaker 1: and what's happening in this this part of the world. Okay,
Speaker 1: so Angelica, if you know, the dominant theme over the
Speaker 1: last few years has been vaccines. What's what's kind of
Speaker 1: the most exciting thing to come out of or that
Speaker 1: biotech companies are thinking about right now. There's a lot
Speaker 1: of exciting stuff out there. So it's hard to pick
Speaker 1: exactly UM specific areas, but some of the ones that
Speaker 1: we have been talking to a lot of people about
Speaker 1: our obesity people are really really focused on that. I mean,
Speaker 1: you think about how many people are out there. UM
Speaker 1: that could be a have a huge impact on public health,
Speaker 1: and of course could be a very lucrative area for drugmakers.
Speaker 1: So we've heard a lot of companies focused on obesity
Speaker 1: at the conference this year, UM, an area that I'm
Speaker 1: really interested in, as well as gene therapy, so taking
Speaker 1: genetic diseases and actually potentially curing them UM by making
Speaker 1: permanent changes to someone's DNA. It sounds a little bit
Speaker 1: like science fiction, but it's actually reality UM. And then
Speaker 1: we're also seeing a lot of new technologies and cancer UM.
Speaker 1: So we spoke to one company, Siegeon, that's been at
Speaker 1: the forefront um of a type of cancer drug called
Speaker 1: an a d C and UM we spoke to their
Speaker 1: new CEO who said that they're going to keep working
Speaker 1: on that and they're also looking for lots of new technology.
Speaker 1: So it's it's a busy time out there. I actually
Speaker 1: think that the sector as a whole is again just
Speaker 1: like you know, one little big hit away from like
Speaker 1: everybody feeling like, you know, it's great, let's go back
Speaker 1: in and and you know, the big difference here versus
Speaker 1: like tech is it's so solution story, like all these
Speaker 1: things are people things that affect millions of people. Right,
Speaker 1: It's just ends up being a little bit of a
Speaker 1: crapshoot in terms of, um, what the r o I
Speaker 1: can look like. That was Bloomberg News healthcare reporter Angelica
Speaker 1: People's and the editor of the magazine, Jill Webber. Joel
Speaker 1: mentioned big tech there at the end. That's actor seeing
Speaker 1: hiring spreees replaced by firing rounds from the likes of Microsoft,
Speaker 1: which this week began slashing ten thousand jobs, or about
Speaker 1: five percent of its workforce, and then Google parent Alphabet
Speaker 1: followed suit on Friday, announcing it's set to cut twelve
Speaker 1: thousand workers, a six percent reduction, and staff also cutting
Speaker 1: jobs Amazon Meta salesforce and more. Writing about the trend
Speaker 1: in the Tech section this week, Bloomberg News technology reporter
Speaker 1: Austin car it's really been this fascinating about phase in
Speaker 1: Silicon Valley Parland's pivot from high growth, big risk to suddenly,
Speaker 1: hey in three we're going to preach more conservative ambitions
Speaker 1: for our roadmap, and that's a different narrative, right, Um,
Speaker 1: it does feel like it's a much more traditional narrative
Speaker 1: coming from these big tech companies akin to what we
Speaker 1: would normally hear from kind of the rest of corporate America. Yeah,
Speaker 1: I mean, it's it's it's really interesting even just to
Speaker 1: see how the layoffs compared to the rest of the economy.
Speaker 1: In two, we saw layoffs for most industries pretty low,
Speaker 1: you know, thirteen an increase of from the previous year,
Speaker 1: whereas in the sector it was actually an increase of
Speaker 1: six percent in two compared to the previous year. So
Speaker 1: they just went on this massive hiring binge and then
Speaker 1: suddenly are saying, you know what, we made some big mistakes.
Speaker 1: We uh. Mark Zuckerberg when he wrote his note to
Speaker 1: employees November describing this sort of trend, he said, you know,
Speaker 1: I just got the I got the prediction wrong. All
Speaker 1: this accelerated revenue I thought would be the new normal,
Speaker 1: and it's actually not the case. So the question now, Carol,
Speaker 1: is just how much Wallstering is going to buy this
Speaker 1: new sound sort of financial prudent and so tech signaling
Speaker 1: to the market. It can be prudent to um, I'm
Speaker 1: not sure if that's going to sort of win over
Speaker 1: Wall Street for for many years ahead. And that's why
Speaker 1: I think you see companies trying to balance that where
Speaker 1: you know, for example, Microsoft saying they're going to you know,
Speaker 1: double down on their core businesses, but they're still going
Speaker 1: to invest in AI or meta platforms. Mark Zuckerberg saying, Hey,
Speaker 1: you know, we're going to focus reprioritize our ads business
Speaker 1: from social media, but we're not giving up on the metaverse.
Speaker 1: So they're really trying to walk this five line between
Speaker 1: sort of being risky and also conservative for the next year.
Speaker 1: What are workers looking for maybe post pandemic in the
Speaker 1: tech industry. I love some of the data that you
Speaker 1: guys have UM when it comes to what are workers
Speaker 1: looking for? Is it cash? Is it perks? What is it? Yeah,
Speaker 1: I think they're looking for stability, much like what some
Speaker 1: of the tech companies are are sort of pushing for.
Speaker 1: UM that we have some new survey data from UH,
Speaker 1: the anonymous social network for professionals that's popular and Silicon Valley.
Speaker 1: It's called blind UM, and they said that of those
Speaker 1: surveyed prefer more cash and less stock based compensation because
Speaker 1: of the economic climate right now. UM. They're also looking
Speaker 1: for more sort of traditional companies. At the beginning of
Speaker 1: a lot of the companies that were searched for on
Speaker 1: this network we're sort of pre I p O startups
Speaker 1: such as Bolt or instat Cart or sort of bigger
Speaker 1: names like Nvidia. But more recently they've seen their search
Speaker 1: trends trend toward financial services firms like Capital One or Citadel,
Speaker 1: So it does look like one of the trends could
Speaker 1: be happening. Uh, they're still going to be interest in
Speaker 1: hunger to hire these engineers, but maybe they're looking beyond
Speaker 1: Silicon Valley to other sectors which have really been hunting
Speaker 1: for this talent for many years but had struggled to
Speaker 1: acquire it. That's Bloomberg News Technology reporter Austin Carr. Coming
Speaker 1: up next, we'll hear from Cisco Systems chief strategy officer
Speaker 1: also executive EP Liz and Tony on the macro environment
Speaker 1: going forward and the growing importance of AI. You're listening
Speaker 1: to Bloomberg Business Week. This is Bloomberg. You're listening to
Speaker 1: Bloomberg Business Week with Carol Messer and Tim Stinovic from
Speaker 1: Bloomberg Radio. I gonna say we've been looking forward to
Speaker 1: catching up with this next guest, having talked with several
Speaker 1: key members of the Cisco team, including CEO Check Robbins.
Speaker 1: Also Franca Sudis, Chief Cisco Executive ep IN, Chief Policy
Speaker 1: and Purpose Officer, and a few more. Listen. Tony has
Speaker 1: spent some twenty years with the firm in engineering and
Speaker 1: cloud computing, IoT and more. The executive vice president and
Speaker 1: Chief Strategy Officer at Cisco join us to shed some
Speaker 1: light on how the networking giant is planning for three
Speaker 1: and beyond. You just have to move. You can stand still,
Speaker 1: but you need to be able to also figure out
Speaker 1: how do you separate the trends from the hype. How
Speaker 1: do you focus on potential and monetization opportunities and metrics
Speaker 1: and make a strategic investment and not just look at
Speaker 1: the new shiny object that's out there, you know, look
Speaker 1: at the trends that really matter to your business, to
Speaker 1: your employees, to your shareholders. The other one that I see,
Speaker 1: and and here it being talked more often, is around
Speaker 1: how AI assisted is really becoming mainstream right. It's it's
Speaker 1: like what cloud was in maybe in like the two
Speaker 1: thousand eight, two thousand nine, two thousand ten time frame.
Speaker 1: If you think about AI gives you a starting point
Speaker 1: on everything from everything creative that you do, from from
Speaker 1: documents that we can build two presentations to art, to
Speaker 1: code processes, etcetera. So that's something that you know, I
Speaker 1: see a lot of focus on. And then the third one,
Speaker 1: which is near endeared to my heart, especially from running
Speaker 1: the applications business out here as well, is the view
Speaker 1: that is not just the buying centers. You've got to
Speaker 1: pay close attention to users because users are defining buying
Speaker 1: behaviors and that will not just influence, but it will
Speaker 1: define how things are bought as well. Caroline, I spending
Speaker 1: a lot of time this week talking about chat GPT
Speaker 1: and Microsoft's investment in chat gpt. Is AI a shiny object?
Speaker 1: Is chat GPT a shiny object? You know? I would say,
Speaker 1: is AI is definitely not a shiny object, right? I mean,
Speaker 1: AI is used in so many ways that we don't
Speaker 1: even know in our daily lives, in our portfolio here,
Speaker 1: AI is used extensively in collaboration and security in applications.
Speaker 1: But I think you know, when you think about um
Speaker 1: everything that you call generative AI, of which chat GPT
Speaker 1: and open AI is one part of it, I think
Speaker 1: got a look at you know, what's the potential use cases,
Speaker 1: what's the monetization opportunity and metrics, And there's a third
Speaker 1: part of it that we're looking at is around how
Speaker 1: do you go in with AI? Looking at it more
Speaker 1: from an ethical and responsible AI standpoint as well, And
Speaker 1: those are the things that we want to learn more.
Speaker 1: But also you know, as we look at our developpers
Speaker 1: that the idea of you responsibly use AI is something
Speaker 1: that we're training our teams on. How you collect the data,
Speaker 1: how you store the data. Do you know what insights
Speaker 1: that the model that you're building is delivering and is
Speaker 1: that the intent of what you expected to begin with?
Speaker 1: As well? When you think about and I think about
Speaker 1: our audience, the investing audience, what is it that you
Speaker 1: think that they need to keep an eye be specific
Speaker 1: to in terms of you understand this, you are have
Speaker 1: a front row seat in terms of I know security
Speaker 1: is a big issue, but that doesn't sound as the
Speaker 1: as interesting as the shiny new thing, but it's a
Speaker 1: real thing. What are the two or three areas that
Speaker 1: you think investors you gotta be watching. This is where
Speaker 1: companies are spending money and this is going to be
Speaker 1: you know, more of our world going forward. I think
Speaker 1: if you look at the base facts of it, carlel
Speaker 1: is that you know, companies are continuing to spend money
Speaker 1: and how applications connectivity and security are delivered and consumed
Speaker 1: as well. Right, So then there's the sustainability part of it,
Speaker 1: where you know, if you look at investments being made,
Speaker 1: technology will need to be sustainable by default and will
Speaker 1: require new technologies that are build with new processes and
Speaker 1: in service to these new business models as well. And
Speaker 1: then there's enablers of these things, right, of these business models,
Speaker 1: of which connectivity is one, security is the other one,
Speaker 1: AI is an enabling technology as well. And I think,
Speaker 1: as with everything, you know, one of the toughest I
Speaker 1: find that one of the tough parts of my job
Speaker 1: is how to separate out the hype from you know,
Speaker 1: kind of what will be like real trends that we
Speaker 1: can advise our customers on. That's list and Tony Executive
Speaker 1: vice president and chief strategy officer over It's SCO. And
Speaker 1: that wraps up the first hour of the weekend edition
Speaker 1: of Bloomberg Business Week from Bloomberg Radio. I'm Carol Masser
Speaker 1: and I'm Tim Stanavak. Ahead in our next hour, our
Speaker 1: cover story details the powerful headwinds facing the plant based
Speaker 1: meat industry. And where it's biggest players go from here.
Speaker 1: Plus how retailer American Eagle is expanding on a new
Speaker 1: supply chain model with an ion sustainability and sharing resources
Speaker 1: even with its own competitors. It's all coming up. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week inside from the
Speaker 1: reporters and editors who bring you America's most trusted business magazine,
Speaker 1: plus global business, finance and tech news as it happened.
Speaker 1: Sloomberg Business Week with Carol Messer and Tim Stentovic on
Speaker 1: Bloomberg Radio Flenny Hammer. Second hour of the weekend edition
Speaker 1: of Bloomberg Business Week, including this week's cover story on
Speaker 1: the fake meat flop heard around the world, will also
Speaker 1: dive deep into a special pursuit section of the magazine
Speaker 1: dedicated entirely sleep. I love sleeping. I just need to
Speaker 1: do more of it. Oh my god, the gadgets I
Speaker 1: have in my house all committed to help me inter
Speaker 1: night's sleep. Sometimes yes, sometimes no, alright. Plus, it turns
Speaker 1: out daydreaming on the job can actually make you more productive.
Speaker 1: That's not sleeping on the job, right, No daydreaming. Listen up,
Speaker 1: every boss, First up this hour, let's get though to
Speaker 1: this week's cover story. When Beyond Meat and Impossible Foods
Speaker 1: came on the scene a little over a decade ago,
Speaker 1: both startups and their respective founders had pretty high hopes
Speaker 1: and big promises. They thought plant based meat could help
Speaker 1: solve climate change, overhaul animal agriculture, and get humanity healthier
Speaker 1: by overtaking the two seventy billion dollar US meat industry.
Speaker 1: With their lab concocted a plant based burgers. But after
Speaker 1: tons of venture capital, years of consumer experimentation in a
Speaker 1: pandemic surge, the novelty has finally worn off. All right, well,
Speaker 1: fake meat sales they are plummeting. Publicly traded, Beyond Meat
Speaker 1: is in a free fall, and Impossible is doing its
Speaker 1: best to chase the uninitiated. In Middle America. Big News
Speaker 1: consumer reporter Dena shank Or details the origin and evolution
Speaker 1: of a food trend that's now reckoning with its own hype.
Speaker 1: Did It joins us along with the editor of Blueberg
Speaker 1: Business Week magazine, Jill Webber. The beef has always been there.
Speaker 1: The what hasn't been around forever has been the fake meat.
Speaker 1: And about a decade ago, you know, Impossible Burghers started
Speaker 1: to make some noise and then along came Beyond Meat,
Speaker 1: and when Beyond Meat went public, that I p O
Speaker 1: was the biggest I p O since the financial crisis.
Speaker 1: Was wild to sit to read that idea. And so
Speaker 1: that was all really interesting, and I think um consumers
Speaker 1: were beginning to think like, hey, this is the future
Speaker 1: of what meat is gonna look like. And then fast
Speaker 1: and I think, you know, the pandemic, more people tried
Speaker 1: this stuff, and then you throw in a little inflation
Speaker 1: and grocery bills going up, and then oh, by the way,
Speaker 1: what's this fake meat stuff making out of and the
Speaker 1: company's uh, have hit some headwinds. And what really caught
Speaker 1: my attention and our attention the magazine was Dina's All
Speaker 1: Star reporting throughout this and the headlines that we're starting
Speaker 1: to resonate with me were about the fast food stuff
Speaker 1: because all these fast food companies were suddenly was like, wait, wait,
Speaker 1: why isn't McDonald's doing this, you know, and where where
Speaker 1: isn't anything permanent on the menus? And so we started
Speaker 1: talking to Dina about, you know, what's going on with
Speaker 1: fake meat and and it turns out that, you know,
Speaker 1: there was a moment where fake meat was in a
Speaker 1: hyper growth mode, and it's beginning to look more like
Speaker 1: that fat right, Dina, take us inside your reporting, would
Speaker 1: you learn? Thanks so much? Yeah, it was. It's been
Speaker 1: years in the making because, as you said that I
Speaker 1: p O was huge and everyone was excited about it,
Speaker 1: I mean the entire industry. Suddenly you had like the
Speaker 1: small new startups that were coming up that we're getting
Speaker 1: tons of funding because everyone's an opportunity here. You had
Speaker 1: the big food companies coming out with new products or
Speaker 1: reinventing old ones. Everyone wanted a piece of this because
Speaker 1: everyone thought, yeah, we can convince meat eaters to up
Speaker 1: something else in But it turns out that that's a
Speaker 1: really hard sell and it's gonna get even harder if
Speaker 1: the food doesn't taste quite as good, and it doesn't
Speaker 1: according to most people that you will ask about it.
Speaker 1: It's also more expensive. And then yes, environmentally, these things
Speaker 1: are so much better for the planet, but most people
Speaker 1: aren't buying for the planet. They do care about their health.
Speaker 1: But then turns out these products are not healthy. Now,
Speaker 1: some people might say they're marginally healthier, but even that
Speaker 1: is not settled. So consumers just really started backing away,
Speaker 1: and we saw sales plummet at the supermarket, restaurants, just
Speaker 1: everywhere basically go ahead, Well, and this is something we've
Speaker 1: been talking about it before we got going. Is for me, like,
Speaker 1: if it was healthy, I'd be a buy in. I mean,
Speaker 1: what exactly is in it? I mean, I know there's
Speaker 1: a lot of sodium, right, not good? What else? So
Speaker 1: these are ultra processed foods, which means that the ingredients
Speaker 1: themselves are processed or their extracts of other foods. So, uh,
Speaker 1: that means the ingredients list, are they so crazy compared
Speaker 1: to other things in the supermarket? They're not. There's a
Speaker 1: ton of processed food out there, but which I also
Speaker 1: don't And that's exactly right. And so if you're trying
Speaker 1: to appeal to health conscious consumers, those are exactly the
Speaker 1: consumers who know to uh, flip the package and look
Speaker 1: at the ingredients and look at the nutrition facts. Okay,
Speaker 1: So that actually speaks to an interesting thing here because
Speaker 1: the audience for this has you know, when you look
Speaker 1: at it, it's like, okay, well if it's fake meat,
Speaker 1: that means vegetarians would want this, right, But how's it
Speaker 1: gone over with meat eaters versus vegetarians Since those were
Speaker 1: the two categories of people that they're trying to get here, right,
Speaker 1: So vegetarians and vegans by the most of this stuff
Speaker 1: per capita um. But at the same time, some of
Speaker 1: them are not really so into it either because they're
Speaker 1: not really looking for something that is that close to
Speaker 1: something meaty, like I'm a vegetarian, I don't want to
Speaker 1: see the food bleeding. There are plenty of vegetarians that
Speaker 1: like meat, but they have other reasons for animal welfare
Speaker 1: reason environmental reasons, and these are appealing to them, and
Speaker 1: they are probably the best customers. They're buying the most
Speaker 1: of it um. But then you also have the meat eaters,
Speaker 1: and meat eaters just don't buy with regular frequency. They
Speaker 1: kind of dip int about um. A lot of people,
Speaker 1: you know, thought I'd like to cut down my meat
Speaker 1: and take and tried these. Some of them said okay,
Speaker 1: well that was that was okay, and and then they've
Speaker 1: got comfortable with the idea of something like lentils or
Speaker 1: beans um, which is also a lot healthier and cheaper. Um.
Speaker 1: Other people were like, well, yeah, I'll go back, I'll
Speaker 1: have some chicken because chickens. I know, chicken is healthy
Speaker 1: and it's still a lot less expensive than beef and
Speaker 1: less expensive than this stuff. So the consumer base is
Speaker 1: just really very narrow. What is it about food fads
Speaker 1: that gets people so excited? And I'm old enough to
Speaker 1: remember like the snack Wells fat free food craze which
Speaker 1: you mentioned, the Olean slash Olestra stuff and potato chips,
Speaker 1: which I remember my dad explaining to me what that was.
Speaker 1: I mean, that was supposed to be really exciting, and
Speaker 1: then after a few months or a few years, people
Speaker 1: start to realize, wait a second, this isn't good for us.
Speaker 1: It's like we haven't even learned this. We're all just
Speaker 1: really obsessed with the idea of looking good and also
Speaker 1: want to eat all the time. And so anytime somebody
Speaker 1: can offer a solution that sounds like it will let
Speaker 1: us be both of those things, we all jump on it.
Speaker 1: Are you looking at me? Okay? One thing I do
Speaker 1: want to ask more about. The article is ultimately about
Speaker 1: two different companies right beyond and Impossible and beyond the
Speaker 1: publicly traded one. And we talked a little bit about
Speaker 1: that I p O before um, which you know, just
Speaker 1: to rewind the clock a little bit, and like think
Speaker 1: about how how rosy of a picture it was in
Speaker 1: twenty nineteen. In July, UH stop hit out all time
Speaker 1: high children four dollars to share. UH right now is
Speaker 1: trading at fourteen, So gives you a sense of how
Speaker 1: much enthusiasm has come out of this space. But so
Speaker 1: what what what do the prospects look like for Beyond?
Speaker 1: And what about Impossible, which is still privately held. So
Speaker 1: to strategic differences, I think here, yeah, to UH companies
Speaker 1: obviously with a lot in common, but also that operate
Speaker 1: very differently. Beyond has a lot of issues that I
Speaker 1: wouldn't attribute to the category or to consumers. They have
Speaker 1: a really hard time executing and we've covered that for
Speaker 1: a while. UM They've had a really hard time bring
Speaker 1: costs down because of that. UM their leadership is constantly changing,
Speaker 1: so they have their own problems. Impossible is private, so
Speaker 1: of course we don't know the same with the same
Speaker 1: level of detail about their sales. We do know their
Speaker 1: supermarket sales are way up. For two they went up
Speaker 1: by more than fifty according to the company. The way
Speaker 1: they did that was largely by just adding more and
Speaker 1: more products, which is a tried and true food UM strategy.
Speaker 1: To get people to buy more things. You know, you
Speaker 1: just in two ways. One is that the more products
Speaker 1: you can put on a shelf, the more likely a
Speaker 1: consumer is going to notice them. You know, when a
Speaker 1: yogurt company has like fifteen flavors, it's not because they
Speaker 1: think every one of those fifteen flavors is going to
Speaker 1: sell well. If they want that space and um, then
Speaker 1: whichever one of those products do sell well, they'll hold
Speaker 1: on too, and they'll keep cycling in and out of innovation.
Speaker 1: So that's the That's what Impossible is doing now in supermarkets,
Speaker 1: and it makes total sense because their CEO comes from
Speaker 1: Chobani and has all of that experience. You know, the
Speaker 1: thing about feeding the world and that the you know meat,
Speaker 1: what it does to the environment, to our earth, and
Speaker 1: especially as the population continues to grow, there is something
Speaker 1: to say that we've got to figure out some agricultural
Speaker 1: innovation right and food at innovation? Is it just a
Speaker 1: case that they need more time? Am I missing something?
Speaker 1: What do what do folks saying? We just have about
Speaker 1: thirty seconds? I think if it were me, I would
Speaker 1: never depend on consumer behavior for big changes because this
Speaker 1: kind tree has what three million consumers in it? And
Speaker 1: that's a lot of that's a lot of people to
Speaker 1: expect to change their behavior. I'd go, I try to
Speaker 1: get corporate behavior to change because there's many fewer corporations.
Speaker 1: That was Bloomberg News Consumer reporter Dina Shanker along with
Speaker 1: Business Week editor Joe Weber on this week's cover story.
Speaker 1: You're listening to Bloomberg business Week coming up. When faced
Speaker 1: with pandemic related disruptions and increasing pressure from the likes
Speaker 1: of Amazon, American Eagle decided it needed to reinvent its
Speaker 1: fulfillment strategy, and that meant the company would opt to
Speaker 1: start sharing its supply chain with other retailers in a
Speaker 1: bid to compete with the e commerce giant. So we
Speaker 1: are building a brand new category called collaborative commerce network.
Speaker 1: If you look at why the shipping networks work so efficiently,
Speaker 1: this collaboration, there's this consolidation at the at the port,
Speaker 1: and you know when it gets into it gets out
Speaker 1: of the factory, it's one giant shipping network which is
Speaker 1: bringing the product into the country and it is all interoperable.
Speaker 1: It's all trade moving on that ship. We don't have
Speaker 1: a system like that in US. It's unprecedented that we
Speaker 1: spent less money in, then we spent. We spend less
Speaker 1: money in, then we spent Why Because collaboration works, and
Speaker 1: collaborations across retailers on supply chain is the way of
Speaker 1: the future. American Eagle chief supply chain officers Shaker and
Speaker 1: Naura Jan joins us. Next, this is Bloomberg. Please is
Speaker 1: Bloomberg Business Week with Carol Messer and Tim Stinevic from
Speaker 1: Bloomberg Radio. Well, we definitely gotta check on US retail
Speaker 1: sales this week. It's so the consumer putting on the
Speaker 1: brakes as US retail sales fell by the most in
Speaker 1: a year, raising concerns that the economy is losing momentum
Speaker 1: under the weight of tighter FED policy. And that comes
Speaker 1: on the heels of recent consumer sentiment data that showed
Speaker 1: consumers aren't ready to tighten their belts just yet despite
Speaker 1: warnings of a booming recession. So with all this in mind,
Speaker 1: we were pretty eager to catch up again with Shaker
Speaker 1: naer Agin, executive vice president in chief supply chain officer
Speaker 1: at American Eagle. Yeah, trying to make sense of all
Speaker 1: these mixed signals when it comes to the consumer. Shaker,
Speaker 1: by the way, joined us though on the day before
Speaker 1: that retail sales figure was released, he's expressed confidence though
Speaker 1: in shopper spending power. Despite headwinds on both the demand
Speaker 1: and supply sides. Every retailer out there has experienced good
Speaker 1: sales during the peak season. Um. And at least that's
Speaker 1: what the master Card data says. And that's what basically
Speaker 1: the consumer sentiment is. UM. Like, I'm not allowed to
Speaker 1: talk about I was just you know, I knew that,
Speaker 1: but I was just trying to get you. I'm so
Speaker 1: sorry I disappointed you. UM. But that said, I think like, um,
Speaker 1: you know, last year was a year of just in
Speaker 1: case inventory in the system, primarily because the supply chains
Speaker 1: were all uh a month before your report you could
Speaker 1: share anyway, keep keeping so UM so we we we definitely, Um.
Speaker 1: Every every retailer had like just in case inventory. Like
Speaker 1: you know, the supply Chaine is slow, unpredictable, so people
Speaker 1: actually ended up like carrying more inventory. Like, just to
Speaker 1: give you some context, eight hundred million square feet of
Speaker 1: warehouse space in two was used for storing inventory. That
Speaker 1: number means nothing to me, So it's absent. It's a
Speaker 1: cent of space. It sounds like a big number. To
Speaker 1: make it, but it's quite free. It's it's allowed. What
Speaker 1: do they normally hold, Well, you don't have that, like
Speaker 1: you know, have any of that. Yeah, So so like
Speaker 1: we should see massive rationalization of inventory this year. People
Speaker 1: have begun to kind of like ration the inventory back
Speaker 1: in this because the supply chains are working. The supply
Speaker 1: chain is getting the product into the country is working.
Speaker 1: But basically, like there's inflation still like looking us at
Speaker 1: us from when it gets into the country to the
Speaker 1: doorstep when you start looking at basically what FedEx and
Speaker 1: ups have announced they have one it's like a six
Speaker 1: sour charged on every package, which means one pound package
Speaker 1: that you ship like less than two hundred miles for
Speaker 1: one pound is going to cost ten dollars. It costs
Speaker 1: eight cents to bring a unit from China to US.
Speaker 1: It costs ten dollars to ship a package for one
Speaker 1: pound because it's so expensive in the US. It's the
Speaker 1: last mile it's and that's what makes it expensive very much. So,
Speaker 1: but like you know, we live in a very fragmented system, right,
Speaker 1: So we live in a very fragmented system because basically,
Speaker 1: like everyone is sitting in the center of the country
Speaker 1: and and from a warehousing perspective, distribution and trying to
Speaker 1: access the customer. But the problem is that unless you're
Speaker 1: Amazon and you have your own network of delivery drivers,
Speaker 1: which is by not any means how they all are shipping,
Speaker 1: how Amazon ships everything, you're all kind of dealing with
Speaker 1: the same cards. Yes, so, and that's where what we
Speaker 1: are trying to do with like American Eagle, with particularly
Speaker 1: quiet platforms, is actually solving that very fundamental problem. So
Speaker 1: we are building a brand new category called collaborative commerce network.
Speaker 1: If you look at why the shipping networks work so efficiently,
Speaker 1: this collaboration, there's this consolidation at the at the port
Speaker 1: and you know, when it gets into it gets out
Speaker 1: of the factory, it's one giant shipping network which is
Speaker 1: bringing the product into the country and it is all interoperable.
Speaker 1: It's all trade moving on that ship. We don't have
Speaker 1: a system like that in US. Everyone is actually can
Speaker 1: we have a system like that? And we've talked about
Speaker 1: this with you before, Yes, very much, so very much.
Speaker 1: And that's what we've been growing so far. Like you know,
Speaker 1: when you when you hear Michael Rempel talk, who's our
Speaker 1: chief operating officer, He was on the even on the
Speaker 1: second quarter called the third quarter call, and he mentioned,
Speaker 1: it's unprecedented that we spent less money in then we spent.
Speaker 1: We spend less money then we spent Why Because collaboration works,
Speaker 1: and collaborations across retailers on supply chain is the way
Speaker 1: of the future. So tell us how much can you
Speaker 1: drill down because we're talking at this high level, which
Speaker 1: which is fine, but so say so you're collaborating with
Speaker 1: who or what in terms of moving stuff around. So
Speaker 1: we have we have fifty brand retailers on our platform,
Speaker 1: everyone from Sacks, Steve Madden's Fanatics, uh Sacks and so
Speaker 1: these are large customers who are actually doing business with us.
Speaker 1: And and primarily what we're doing is we are aggregating,
Speaker 1: just like Uber, We're aggregating all of the packages in
Speaker 1: inventory which is headed in one direction or fulfilling these
Speaker 1: packages closest to where people live. But but the thing
Speaker 1: that I don't get is it's not like I go
Speaker 1: back to Amazon, because I think it's what a lot
Speaker 1: of people are familiar with. If you make two separate
Speaker 1: orders on Amazon, sometimes they show up those two things
Speaker 1: up in the same package. If I order something from
Speaker 1: American Eagle and something from Steve Madden. Those are not
Speaker 1: going to show up in the same package. Right, That's
Speaker 1: what we're attempting to solve. Are you attempting to We
Speaker 1: are attempting of the same package. We are attempting to solve.
Speaker 1: So we have we we've designed and this is something
Speaker 1: that we have basically conceptualized design. But you know, you
Speaker 1: have to get to a certain scale for distinct to work.
Speaker 1: But you need sort of like one identifying characteristic from
Speaker 1: the consumer in order to make sure that you know
Speaker 1: the Tim stand off ex re orders this is the
Speaker 1: same as you know, my wife who has a different
Speaker 1: last name, who's ordering this? Yeah, right, so so so
Speaker 1: we we are we are doing like this is fundamentally
Speaker 1: happened in other industries. We have a concept called merge
Speaker 1: in transit. So primarily what it means is none of
Speaker 1: these networks, they're all push networks. When you when you
Speaker 1: actually like you know, buy something, you're pushing a package
Speaker 1: to like Tim's doorstep. The Quiet Platforms, which is a
Speaker 1: facility close to where you lived him is able to
Speaker 1: take packages which are all headed to your door and
Speaker 1: then give it to one carrier. So that one carrier
Speaker 1: delivers to your road in one one box. And that's
Speaker 1: essentially what we're building out right now. If you if
Speaker 1: you listen to Carole Tomy talk, you know, she talked
Speaker 1: about it like in a second quarter earnings earnings call.
Speaker 1: She said, the cost of last mile to your door, Tim,
Speaker 1: it's five dollars and fifty cents on cost spaces. The
Speaker 1: next package she delivers to your door is sixty cents more. Okay,
Speaker 1: So Carol, I'm gonna jump in here because I'm seeing
Speaker 1: this too. With Uber for example and Uber eats. If
Speaker 1: you order something on Uber eats, they say, okay, you
Speaker 1: have you know, X number of minutes to add something
Speaker 1: to your order from CVS for example, which is along
Speaker 1: the way. And I'm not using the names correctly, but
Speaker 1: it totally makes sense because that incremental cost to get
Speaker 1: that thing to your door is cheap. And imagine, right,
Speaker 1: you have in the last ten years, if you if
Speaker 1: you revolve the time back and look at it like
Speaker 1: what ten years was like, you had probably one package
Speaker 1: from one carrier in a diluted to your door. Now
Speaker 1: you have ten packages coming from ten different people, but
Speaker 1: ten different carriers showing up at your door with all
Speaker 1: they got about forty seconds left here? So what's key
Speaker 1: in making this work? Like, I get it. So what
Speaker 1: is it that you have? You have to have just
Speaker 1: a ton of people buy in and help support the
Speaker 1: infrastructure or what, Yes, it's it's it's this is like
Speaker 1: like I will put it in the words of what
Speaker 1: like you know and out of President told this is
Speaker 1: going to be game changing. What we're trying to do
Speaker 1: is going to be game changing because it brings sharing
Speaker 1: economy to a whole new level at the physical and
Speaker 1: the digital. Almost sounds like air the airline industry in
Speaker 1: the hubs of like I order a bunch of things, okay,
Speaker 1: and it all goes to Atlanta and it's put into
Speaker 1: one little box and then it goes out to me.
Speaker 1: Box is just a manifestation of coaboration. But you know,
Speaker 1: even if you don't put it in one box, but
Speaker 1: if all the packages which are headed tim goes to
Speaker 1: one carrier, you still get the efficiency that delivery provider,
Speaker 1: that shaker not arousing an executive vice president in chief
Speaker 1: supply chain officer at American Eagle still to come on
Speaker 1: Bloomberg Business Week. The pursuit of sleep it's the subject
Speaker 1: of our pursuit section this week. I feel like that's
Speaker 1: my life, feel like it's both my and my husband's life.
Speaker 1: You're not alone, and that's why a lot of money
Speaker 1: goes into this. Oh my God. From smart rings, sleep
Speaker 1: buds and sauna blankets to pillow menus and the jet sets,
Speaker 1: best tips for no jet lag, all the tricks on
Speaker 1: getting a good night's sleep. There's some really fun advice
Speaker 1: from Joe Malone who makes all the Lovely perfumes that
Speaker 1: her advice is to keep herself active. So get off
Speaker 1: the plane, go do something like go to a spa
Speaker 1: or even go to Joanne read like, get out of
Speaker 1: the plane and do something. Don't just don't. Just try
Speaker 1: to go to sleep if you can't, that's important. That's
Speaker 1: next on Bloomberg Business Week. This is Bloomberg Broadcasting from
Speaker 1: the financial capital of the world, Bloomberg You Live in
Speaker 1: Rio in New York to Washington, d C. Bloomberg to Boston,
Speaker 1: Bloomberg one O six one does San Francisco, Bloomberg nine
Speaker 1: sixty to the country Sirius XM Jentol Mine Team and
Speaker 1: around the globe. The Bloomberg Business in Bloomberg Radio dot com.
Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Stinebe from Bloomberg Radio. Well, we always look forward to
Speaker 1: the Pursuit section of Bloomberg Business Week magazine. Not only
Speaker 1: does it tell us where to travel, what to eat,
Speaker 1: which luxury items to invest in or buy, it also
Speaker 1: provides tips for long lasting health and wellness, such as
Speaker 1: a good night's sleep. This week's section and details some
Speaker 1: tricks from the trade for enhancing the way we live.
Speaker 1: Roughly a third of our lives, it's with our eyes closed,
Speaker 1: you know, Carol, We're not actually very good at it.
Speaker 1: How many times do we get into our our show
Speaker 1: or just before show, or we see each other. And the
Speaker 1: the more I'm like, I have termlized sleep. It's increasingly
Speaker 1: for me. It's like almost every day, I'm obsessed. And
Speaker 1: I know now that there's a word for it, if
Speaker 1: you're obsessed with your sleep data. But it's not just us.
Speaker 1: And you know what would have found and we have
Speaker 1: some incredible data in this story that shows that Americans
Speaker 1: are just not not good at sleep and how much
Speaker 1: it costs society. We're seeing the conversation really shift around
Speaker 1: the importance of sleep. Check this out. In the US,
Speaker 1: a staggering fifty percent of the population is sleep deprived.
Speaker 1: So you me and millions and millions of other people.
Speaker 1: So what does sleep deprivation mean? Well, it has real
Speaker 1: economic implications. Some recent data from the Rand Corps says
Speaker 1: that insufficient sleep has an estimated economic impact of more
Speaker 1: than four billion dollars each year. And that's just in
Speaker 1: the US. It's real, like, it really has an impact.
Speaker 1: And what's interesting is, all right, so it has an
Speaker 1: impact if you're just not as productive or you're tired.
Speaker 1: It also, though you know, on the flip side, has
Speaker 1: created this massive industry as we just mentioned, and I
Speaker 1: have to say in the pursuit section, there's a bunch
Speaker 1: of gadgets and I'm looking at least two of them
Speaker 1: have been in my household. Okay, less to say, I
Speaker 1: don't know if we're suckers or if we are just
Speaker 1: part of like a growing trend of tracking or sleep. Listen,
Speaker 1: we do it at home, and we do it also
Speaker 1: when we're on the road, and sometimes that can be
Speaker 1: even trickier. And that's what we want to bring in
Speaker 1: Bloomberg Prosuits. Reporter Sarah Rappaport. She joins us from London.
Speaker 1: We loved your part of this section because getting a
Speaker 1: good night's sleep it's really important because sometimes you've got
Speaker 1: a lot to do while working. Yeah, whether it's work
Speaker 1: rather it's vacation, it's really important to get your good
Speaker 1: seven to eight hours sleep. And the thing is you
Speaker 1: could be in the fancies I'll tell a sweep ever
Speaker 1: and the nicest beat and the best pillows, but you
Speaker 1: might not sleep well. And that's actually because evolution. You're
Speaker 1: in an unknown surroundings and your brain is like where
Speaker 1: am I am I safe? I'm gonna get attacked even
Speaker 1: though you're you know you're in a great place, you're safe.
Speaker 1: That's part of evolutionary response. You need to quiet it
Speaker 1: to get that good night's sleep, and that's easier said
Speaker 1: than done. Right. Hotels are increasingly getting smart to this though.
Speaker 1: They want to be a place where people are incredibly comfortable,
Speaker 1: that people want to come back to because they get
Speaker 1: a good night's sleep. Um, you spoke to some experts
Speaker 1: in doing this reporting. What did you learn about what
Speaker 1: hotels are doing to try to help us get a
Speaker 1: better night's sleep even if we've got jet lag well,
Speaker 1: the wellnest industry is being bigger than ever, and hotels
Speaker 1: obviously want to be a big part of this on
Speaker 1: vacation and for work travelers, and some hotels are offering
Speaker 1: a pillow menu. You can pick firebuds, but come on,
Speaker 1: does not sound delicious. Doctor Burbucca Robbins as affiliated with
Speaker 1: the Benjamin Royal Sanesta in Manhattan for a pillow menu,
Speaker 1: so you can pick one depending on how how do
Speaker 1: you sleep? So what's what's your sleep position? We'll find
Speaker 1: you a pillow. Can I tell you we have gone
Speaker 1: through probably three or four different types of pillows on
Speaker 1: our bed um and just been like, no, that doesn't work.
Speaker 1: That doesn't it's crazy. You're preaching to the choir over here.
Speaker 1: And then you know there's the special pregnancy pillows as
Speaker 1: well that people use even if they're not pregnant. It's
Speaker 1: like unbelievable. People people love them. I sleep on my back,
Speaker 1: so I need one that's less full on a side sleeper.
Speaker 1: But for me, I'm an easy type. But for people
Speaker 1: who like on their sides and need a bigger, one,
Speaker 1: nice fluffy pillow, yeah, I hear you. I have to
Speaker 1: say when I do travel every like it's somewhere we're
Speaker 1: going to go in the car. Not pillow goes in
Speaker 1: the car. It goes with me. Um. I like them
Speaker 1: on planes too, although differing advisable, Well they should sleep
Speaker 1: on planes or not? People have very strong opinions on this. Well,
Speaker 1: you know what, can we go right there because I
Speaker 1: love the part where you talked about the jet set
Speaker 1: no jet lag. Tell us about some of the advice.
Speaker 1: There's some really fun advice from Joe Malone who makes
Speaker 1: all the lovely perfumes, and her advice is to keep
Speaker 1: yourself active. So get off the plane, go do something
Speaker 1: like go to a spa or even go to Joane
Speaker 1: read like, get out of the plane and do something.
Speaker 1: Don't just don't just try to go to sleep if
Speaker 1: you can't, that's important. What about when it comes to
Speaker 1: caffeine or or other substances that we ingest, like alcohol.
Speaker 1: I would like some line on a plane when I'm
Speaker 1: on a plane, do not touch alcohol. I think you're
Speaker 1: more virtuous than the rest of us. And I'm gonna
Speaker 1: say virtuous. I just know that. I just know that
Speaker 1: I get such bad headaches from it if I'm traveling. Yeah,
Speaker 1: the doctor told me how day drinking is basically okay,
Speaker 1: but don't sleep before right before bed. That's because you
Speaker 1: might fall asleep, but it'll be worth quality sleep. You
Speaker 1: won't get into that perfect r M sleep that you want.
Speaker 1: So yeah, you can fall asleep if you drink, you're
Speaker 1: not gonna get any good quality sleep with that's accounts
Speaker 1: all right, Sarah. So Tim does not drink on a plane,
Speaker 1: but you know what he has big time. He eats
Speaker 1: till before he goes on the plane. He eats everything
Speaker 1: that's on the plane. We really shouldn't be eating, you know.
Speaker 1: I think it's fine. We had want We had a
Speaker 1: luxury travel company person tell us to eat nothing. She
Speaker 1: thinks a better at your restart your digestive system to
Speaker 1: help you sleep well, they or not at work. I
Speaker 1: think you know, to try it out for yourself. But
Speaker 1: she she did the New York of Singapore flight and
Speaker 1: said that's what helped her recover fast from the jet
Speaker 1: legs from all the way around the world. So yeah,
Speaker 1: give it a go. He might be hungry, though. I
Speaker 1: love the line in this section that you wrote that
Speaker 1: at super high altitude, your digestive system shuts down completely,
Speaker 1: like it kind of makes sense to literally from the
Speaker 1: peanuts at the beginning to the ice cream hot fudge,
Speaker 1: you know, Sunday, I'm like, wake me up to the
Speaker 1: flight attendant when you bring I think you should enjoy yourself.
Speaker 1: I think the healthiest advice though, from all the doctors
Speaker 1: is exercise and to do something productive for yourself. What
Speaker 1: about it where you are okay? What about pharmaceuticals, because
Speaker 1: there are people who just swear by popping a sleeping
Speaker 1: from melatonin, melatonin, I mean some of the prescription ones
Speaker 1: as well, if they're on a long flight. What's the
Speaker 1: advice about that. I think they're okay as long as
Speaker 1: you don't get dependent on that what the doctors are saying.
Speaker 1: I actually got a quite fun tip. I did the
Speaker 1: reporting on this before Christmas and I was flying from
Speaker 1: London back to my parents in Chicago, and Rebecca Robinson
Speaker 1: Harvard told me to move my calendar a little bit
Speaker 1: closer to Chicago every night week before my trip, so
Speaker 1: to stay up later in London to get closer to
Speaker 1: Central Time. And I tried it and it worked. I
Speaker 1: wasn't as jet lagged, so staying up later to get
Speaker 1: closer to Central time that's really smart. That kind of
Speaker 1: makes sense, right, I get it. Yeah, the other way around,
Speaker 1: if you're coming to Europe from the U S or whatever,
Speaker 1: wake up earlier. I think thinking about that timing element
Speaker 1: is really really important. I think about that too when
Speaker 1: I get in a plane, like resetting my watch and
Speaker 1: you know, but that immediately to try and do that
Speaker 1: for the second you get on the plane. I do.
Speaker 1: But I have to say, like, if we're on a
Speaker 1: broadcast calendar, we have to we're committed to the broadcast calendar.
Speaker 1: Let's see, we're going to the West Coast and we're
Speaker 1: in New York. We have to think about like I've
Speaker 1: got to have almost two watches so that I don't
Speaker 1: like miss something because that can happen the right wash
Speaker 1: for that. Roser, he does know a thing or that
Speaker 1: is so true. Um, some really good stuff. Um, we
Speaker 1: really appreciate it. Bloomberg Pursuits Reporter Sara Rapp report, and
Speaker 1: you're welcome, Tom. I just want to get to some
Speaker 1: of the other things that are in the issue, because
Speaker 1: first of all, this right for sore eyes, this product
Speaker 1: by thorough Body got it for Christmas? You did, I've started.
Speaker 1: Do you think of it. I kind of love it.
Speaker 1: It's first of all, some of it is because I'm
Speaker 1: having like headaches and our things, and it's like in
Speaker 1: massages around your eyes. There's heat. Um got this for you.
Speaker 1: I love this. This is a this is you got
Speaker 1: to see this in Santa hasband got it for me? Okay,
Speaker 1: Santa Husband. So this is thorough Body's new high tech massager.
Speaker 1: It's a bomb for screen time headaches. I guess what
Speaker 1: I like about it too, is it blocks you from
Speaker 1: actually getting to do anything on your phone and kind
Speaker 1: of takes you into the zone, right ye ye. You
Speaker 1: have to lie down because it's a little bit heavy,
Speaker 1: but it miss you know, massages kind of your cheeks, um,
Speaker 1: your temples, around your different eyes and there's different settings.
Speaker 1: So I kind of really love this idea because I
Speaker 1: always feel like a lot of tension kind of shoulders up.
Speaker 1: So it's it's a lot of fun. Hey, the other
Speaker 1: thing in the magazine, he does love me. He also
Speaker 1: listens when I'm like to see something on TV. Hey,
Speaker 1: that's really cool. I want that. Um. There's also with
Speaker 1: all the gadgets out there, there's a little section that
Speaker 1: says no track or no problem and there's a bunch
Speaker 1: of tips to really ace your z s getting to sleep.
Speaker 1: And one thing is be consistent um about your time.
Speaker 1: There's that rhythm, and that's one of the things I
Speaker 1: keep hearing about advice because I'm sometimes all over the place,
Speaker 1: like pick a schedule and stick to it. There's also
Speaker 1: the age old advice of just getting a workout in,
Speaker 1: you know, lift some weights, something you can do a
Speaker 1: few times a week that will help you get better sleep. Right,
Speaker 1: but running and cycling still great, but not immediately before bed.
Speaker 1: So a bunch of things. Anyways, it's a really great section.
Speaker 1: And I don't know about you you, but I feel
Speaker 1: like every time I have a conversation with someone in
Speaker 1: my orbit, so many times it's like I'm so tired,
Speaker 1: I didn't get a good night's sleep. So well, now
Speaker 1: you can use all these devices and these tips to
Speaker 1: to get a good sleep. I really encourage everybody to
Speaker 1: check out this entire section. It's in this week's issue
Speaker 1: of the magazine. It's out on newsstands, It's online at
Speaker 1: Bloomberg dot com slash business. Wee can always on the
Speaker 1: Bloomberg terminal, even if it's just for the pillow manual Alone.
Speaker 1: You're listening to Bloomberg Business Week. Coming up from the
Speaker 1: Business of Sleeping to the Art of Daydreaming. Why letting
Speaker 1: your mind wander well at work is key to thriving
Speaker 1: when you're at work. That's up next. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Tim Stentovic from Bloomberg Radio. One of our most read
Speaker 1: stories in The Bloomberg this past week was about how
Speaker 1: City Group, which has one of the more flexible policies
Speaker 1: in Wall Street when it comes to work, is cool
Speaker 1: until a worker's productivity dips. When that happens to him,
Speaker 1: they get summoned back to headquarters for some coaching. Our
Speaker 1: next guest conducts research on human performance in the workplace.
Speaker 1: Gabriella Rosen Kellerman is the chief product officer at Better Up.
Speaker 1: She's co authored a new book. It's called Tomorrow Mind
Speaker 1: Thriving at Work Now and in an Uncertain Future, and
Speaker 1: she explained why both personal success and corporate productivity suffer
Speaker 1: when we can't flourish on the job. One of the
Speaker 1: things that goes wrong in these environments is we react
Speaker 1: to change with a sense of threat. And fear it
Speaker 1: can result in very anti social behaviors. We also don't
Speaker 1: have the same kinds of deep and lasting relationships with
Speaker 1: colleagues that we once did. All of this allows us
Speaker 1: to come and at work from a more centered, empowered place,
Speaker 1: a more connected place. We talk a lot about how
Speaker 1: to build trusting relationships. Those factors are diminishing the fabric
Speaker 1: of connection and the fabric of positivity that at would
Speaker 1: be wonderful to restore. Look, I gotta be honest, you know,
Speaker 1: we work in a distributed world right now, and I
Speaker 1: feel a lot closer to my colleagues who I'm around physically,
Speaker 1: the ones who I see each and every day, than
Speaker 1: the ones who perhaps work in other offices around the world.
Speaker 1: I'm wondering, Gabriella, how you're able to do this in
Speaker 1: an environment where people are working in hybrid environments. Right
Speaker 1: when we're with people in person, that shared time and
Speaker 1: physical proximity is very valuable in helping us spawn to them.
Speaker 1: And part of what we're doing is our brain is
Speaker 1: learning to process them as in us rather than of them,
Speaker 1: so someone in our in group versus our out group,
Speaker 1: and that is a huge basis of trust, which then
Speaker 1: makes work easier and lighter and more fun, and we
Speaker 1: actually are more innovative in that mindset. And so we
Speaker 1: get into a lot of the science of how do
Speaker 1: you still build that trust in connection across geographic distance.
Speaker 1: One of the keys comes down to shared time. So
Speaker 1: just as you have that share time in person in
Speaker 1: the office, think about how little of that you have
Speaker 1: with people are at a geographic distance. But when you're
Speaker 1: able to create it doesn't have to be by zoom.
Speaker 1: It can also be by phone. But that shared sense
Speaker 1: of experience, we're experiencing something together in real time. You're reacting,
Speaker 1: I'm experiencing your responses. All of that rich data is
Speaker 1: part of what allows for that bonding and that trust
Speaker 1: to form. One of the things you talk about is
Speaker 1: why daydreaming is critical to thriving at work. Um, I
Speaker 1: love that you go there. I'm someone who believes strongly
Speaker 1: in meditation. I'm not always good about doing it, so
Speaker 1: tell us about daydreaming. Great. So daydreaming is very much
Speaker 1: a feature of the mind and not a bug. It's
Speaker 1: something that we need to do in order to generate
Speaker 1: our creative ideas. Connections we can't come to, we can't
Speaker 1: force ourselves to come to those with conscious attention. That
Speaker 1: daydreaming is the activity of the default mode network, which
Speaker 1: is the brain network that activates when we're quote unquote
Speaker 1: doing nothing, when we think we're sort of just sitting
Speaker 1: around staring in this space, and it actually activates every
Speaker 1: few minutes under normal circumstances, kind of go in and
Speaker 1: out of that day dream. Even while we're talking now,
Speaker 1: people are going in and out of that day dreaming mode.
Speaker 1: It's really adaptive, it's really important. It's a huge part
Speaker 1: of where creativity comes from. Unfortunately, a lot of our
Speaker 1: busy work today, whether it's zoom, meanings, slacks, emails, horrible
Speaker 1: for daydreaming, right, And so to be able to give
Speaker 1: yourself permission to just take a few minutes and take
Speaker 1: a walk meditating is fine. You know, you want to
Speaker 1: do things that are not going to overly tax your
Speaker 1: conscious attention, things that sort of like keep you in it,
Speaker 1: but not overly. And so the attention, the energy is
Speaker 1: going to this mind wandering, connecting, drawing on memories type
Speaker 1: of activity. Gabriella Rosen Kellerman, chief product officer at Better Up,
Speaker 1: also the co author of the new book Tomorrow Land
Speaker 1: thriving at work now in an uncertain future. All right,
Speaker 1: that wraps up the weekend edition to Bloomberg b This
Speaker 1: week from Bloomberg Radio, thank you so much for joining us.
Speaker 1: I'm Carol Masser and I'm Tim Stanavak. Be sure to
Speaker 1: tune into Bloomberg Business Week Monday through Friday. It starts
Speaker 1: at two pm Wall Street Time on Bloomberg Radio. You
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