Speaker 1: From the heart of where innovation, money and power Colli
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily jay I. Remember like check in San Francisco, and
Speaker 1: this is Bloomberg Technology coming up in the next hour.
Speaker 1: For the first time ever, streaming topped cable, with US
Speaker 1: viewers watching more on Netflix, Who and Disney Plus and
Speaker 1: more than cable television. We'll digin to a historic see
Speaker 1: change in entertainment and just how far the wave will go.
Speaker 1: Plus the venture capitalist who claims Apple is the greatest
Speaker 1: monopolist today. Why he thinks regulators are losing the plot
Speaker 1: while chasing Meta and Amazon, and it could be the
Speaker 1: fire Festival of travel startups. We'll tell you about Pollen,
Speaker 1: a luxury trip planner that blew up during COVID. It
Speaker 1: started with big concerts canceled, then things quickly spiraled out
Speaker 1: of control. Meantime, for the first time ever, US viewers
Speaker 1: are watching more hours on streaming than cable, marking a
Speaker 1: historic change in entertainment. Subscribers to services like Netflix and
Speaker 1: Hulu accounted for thirty four point eight percent of all
Speaker 1: TV consumption in July, according to research from Nielsen, that
Speaker 1: edged out cable television at thirty four point four broadcast
Speaker 1: a distant one point six percent. Let's break this all
Speaker 1: down with Blue Ver Fluca Shaan Kevin Tran media and
Speaker 1: entertainment analyst for the Decision Intelligence Company, Morning Console Lucas.
Speaker 1: I'll start with you. Set the stage here, the big picture.
Speaker 1: What are these numbers tell us well that that streaming
Speaker 1: TV continues to gain share from broadcasting and cable. I mean,
Speaker 1: Nielsen rolled out this metric, the Gauge, a couple of
Speaker 1: years ago. It was one of the first of these
Speaker 1: third party metrics that Netflix actually endorsed. It had been
Speaker 1: very skeptical through the Nielsen weekly ratings, and there was
Speaker 1: a period of about a year ago, I want to say,
Speaker 1: where streaming share seemed to flatline, and you've had a
Speaker 1: lot of traditional media people saying, Oh, it's streaming hit
Speaker 1: its peak, and that clearly hasn't happened. The one thing
Speaker 1: I would note is that if you put cable and
Speaker 1: broadcast together, PayTV still accounts for more TV viewing than streaming,
Speaker 1: but streaming is gaining share and is only going to
Speaker 1: continue to do so. Kevin, what's your take, Um, you know,
Speaker 1: just a couple of months ago, we were talking about
Speaker 1: Netflix losing subscribers, and here we are with these big numbers.
Speaker 1: How do you square that? Yeah, I think it just
Speaker 1: speaks to the amazing amount of content that's available across
Speaker 1: the other services that are in Netflix, UM, Paramount Plus, Hulu,
Speaker 1: Apple TV Plus have all really pushed their original strategy
Speaker 1: really far ahead, especially after the initial COVID outbreak, And
Speaker 1: like Lucas just mentioned, UM, this streaming gauge that Nielsen
Speaker 1: has rolled out is in really helpful because the streaming
Speaker 1: companies themselves don't report a metric uniformly that can be
Speaker 1: allow others to measure uh you know, usage or reach
Speaker 1: among them across each other. So it's a big moment
Speaker 1: for for streaming to overtake traditional I would can expect
Speaker 1: to continue to happen, maybe not every month, uh continuously
Speaker 1: as uh major sports seasons start, like the NBA, But
Speaker 1: I don't think this will be the first time we
Speaker 1: see streaming overtake traditional TV. What do you think the differences, Kevin,
Speaker 1: between Netflix and Disney Plus. You know, we've been concerned
Speaker 1: about Netflix losing subscriber subscribers, but Disney, according to its
Speaker 1: latest earnings report, gaining subscribers. Yeah, I think the main
Speaker 1: differences Disney's historic vault if I p which families and
Speaker 1: really consumers globally can can identify with, and um you know,
Speaker 1: really go back to growing up with those types of franchises.
Speaker 1: And Netflix has been pushing forward with its UH initiative
Speaker 1: to build out more franchises for for for titles like
Speaker 1: Stranger Things and um other big originals that it's rolled out.
Speaker 1: So it's trying to push the envelope in terms of
Speaker 1: franchising titles as well, so that streamers are consumers have
Speaker 1: a better idea of what they're signing up for with
Speaker 1: the original strategy of Netflix, UM, which I think a
Speaker 1: lot of people will have more of an idea of
Speaker 1: what Disney Plus will offer with their originals. Now, there
Speaker 1: was a question when Disney launched Disney Plus about whether
Speaker 1: it would be too kids focused. I I was recently
Speaker 1: speaking with Ross Gerber, a longtime investor in Disney. Take
Speaker 1: a listen to what he had to say about that.
Speaker 1: Parents like me absolutely trust Disney content with my kids.
Speaker 1: And you know, just recently I took YouTube away from
Speaker 1: them because YouTube shorts has become the garbage hole of
Speaker 1: hell and I don't want my kids watching garbage whole content,
Speaker 1: and if I put them on Disney plus, there's nothing
Speaker 1: they can watch that's bad. So I think parents really
Speaker 1: trust the brand and and and that's starting to really
Speaker 1: pay off for them. Lucas, do you agree with what
Speaker 1: she said about YouTube? And also, can Disney really win
Speaker 1: over adults? There's no question that that parents trust Disney.
Speaker 1: I think that Ross is in the minority in terms
Speaker 1: of parent behavior. You look at the most popular channels
Speaker 1: on YouTube and in any given week, and almost all
Speaker 1: of them are kids channels. It's it's become a default
Speaker 1: babysitter for for so many different families. Um that there's
Speaker 1: not really a comparison. The other thing to keep in
Speaker 1: mind with Disney is Disney didn't grow in the US,
Speaker 1: so it's not like they're a bunch of parents who
Speaker 1: are signing up for Disney here. It's really overseas where
Speaker 1: Disney has been quite strong. Um And and that challenge
Speaker 1: that you outlined at the top is still one for Disney,
Speaker 1: which is that it's really good with parents. It's really
Speaker 1: good with fanboys people and fan girls, people who love
Speaker 1: Star Wars, Marvel and the like. But it has to
Speaker 1: try to broaden its appeal to a wider group of people.
Speaker 1: It's something that's that they're working on. That's why they
Speaker 1: started adding our rated movies. It's why you're going to
Speaker 1: see more different types of programming on Disney Plus because
Speaker 1: they need that to keep growing, to to keep Wall
Speaker 1: Street excited about the company. Meantime, Lucas Walmart also getting
Speaker 1: into streaming, teaming up with Paramount. Of course Amazon has
Speaker 1: Amazon Prime Video. What exactly our Walmart customer is going
Speaker 1: to get um from this tie up? And is it?
Speaker 1: Is it smart? Well, if you are a customer of
Speaker 1: Walmart Plus, which is if we want to make things
Speaker 1: simple sort of like Walmart's equivalent of Amazon Prime, you
Speaker 1: will have access to Paramount Plus, which is Paramount streaming service.
Speaker 1: And that's you know, they're trying to Walmart experiment that
Speaker 1: with making its own video service Voodoo. It didn't work
Speaker 1: very well. They're leaning on a you know, a trusted
Speaker 1: and growing brand and Paramount Plus. It has the potential
Speaker 1: to be mutually beneficial. But it works if for Paramount,
Speaker 1: if Walmart signs up a bunch of people for Walmart Plus, uh,
Speaker 1: and it works for Walmart if the Paramount is you know,
Speaker 1: enticing enough to get more people to sign up for
Speaker 1: a service. It's pretty early, walmut process is very small
Speaker 1: compared to something like Amazon Prime. Meantime, some big news
Speaker 1: and sports entertainment. You've got Paramount renewing the rights to
Speaker 1: the Champion League foot football matches. You've also got Fox,
Speaker 1: NBCCBS teaming up for the Big ten. I wonder, Kevin,
Speaker 1: is sports really the next and only way for these
Speaker 1: streamers to get to the next level, a whole new level,
Speaker 1: not an incremental level. Yeah, I think so. And and
Speaker 1: not just sports but news as well. So, you know,
Speaker 1: a lot of these newer streamers with the wave that
Speaker 1: started in late launching um, they came out of the
Speaker 1: gates strong with originals like The Mandalorian from from Disney
Speaker 1: Plus the Morning Show from Apple tv Plus. But one
Speaker 1: of the big things that consumers still can't really do
Speaker 1: with access to these major services like Netflix, Paramount Plus
Speaker 1: and Apple tv Plus is access a significant amount of
Speaker 1: live broad has from the major sports leagues like the NFL,
Speaker 1: or UM NBA. So it's not surprising that we're seeing
Speaker 1: these big packages increasingly being signed, uh, you know by
Speaker 1: these companies, and I think we're at a point where
Speaker 1: consumers already have access to so many on demand scripted
Speaker 1: and unscripted content, UH choices that right now, it's it's
Speaker 1: really up to the streamers to to differentiate themselves with
Speaker 1: live content, UH and sports being a major part of that.
Speaker 1: Apple has been dabbling with sports content, lucas. I mean,
Speaker 1: where are the battle lines going to be drawn? I
Speaker 1: mean which streamers are going to be bidding for what?
Speaker 1: And is that going to be the next wave of
Speaker 1: big competition. Well, the most aggressive of the streaming services
Speaker 1: in sports, if you take ESPN Plus out of the equation,
Speaker 1: because that's really part of the broader ESPN empire, has
Speaker 1: been Amazon. Amazon has Thursday Night Football coming up in
Speaker 1: in a couple of weeks. They have a lot of
Speaker 1: rights in Europe. They were a big player for both
Speaker 1: the Big Ten and Champions League and just didn't get it.
Speaker 1: So they've they've shown the biggest commitment and appetite. Apple
Speaker 1: has started to player on the edges. They have the
Speaker 1: MLS rights, They're seen as the front runner for NFL
Speaker 1: Sunday ticket. Netflix hasn't jumped in in a big way yet.
Speaker 1: They they offered a pretty what it sounded like kind
Speaker 1: of a paltry sum for the Formula one rights. They
Speaker 1: have been reluctant to spend big on live sports just yet.
Speaker 1: You know, we'll see what comes with with the next
Speaker 1: big rights negotiations. You have the NBA, NASCAR coming up
Speaker 1: in a couple of years. Well, if one of those,
Speaker 1: one of those leagues or organizations tries to carve out
Speaker 1: some rights for streaming, that would be another big package
Speaker 1: to go. But it's it's worth keeping in mind that, say,
Speaker 1: with something like the NFL, Amazon is the only major
Speaker 1: streaming service that has largely exclusive rights. You know, most
Speaker 1: of the other games are on broadcast TV. All right,
Speaker 1: knew potential Battleground Bloomberg, Lukashaw, Kevin Tran of Morning Consult,
Speaker 1: thank you both lots to watch. Apple has identified its
Speaker 1: next big business, bringing advertisements to more parts of your
Speaker 1: iPhone Today. Apple pushes ads in three places, the App Store,
Speaker 1: Apple News, and the Stocks app. In the News and
Speaker 1: Stocks apps, Apple shows display advertisements. That means that third
Speaker 1: party companies like card dealerships or mortgage lenders can showcase
Speaker 1: their advertisements just like they can on a website. On
Speaker 1: the app store, the situation is different there. Apple has
Speaker 1: search ads. This allows developers to buy their way into
Speaker 1: showing a pire on search results. For instance, an app
Speaker 1: store developer can bid for the term car, racing or basketball,
Speaker 1: so their apps would surface above competing apps in the
Speaker 1: list of results. Apples Push It Too Ads is a
Speaker 1: little ironic given that it's a t T or app
Speaker 1: tracking Transparency. Privacy feature limits the ability for Meta snap
Speaker 1: and even smaller developers to generate as much revenue as
Speaker 1: possible from advertising. That's because the feature allows users to
Speaker 1: choose if they want their data collected and tracked across
Speaker 1: third party apps and websites. Still, Apples hoping to expand
Speaker 1: its own ads business and is planning to add search
Speaker 1: ads to its Maps app. Other areas where ads could
Speaker 1: eventually appear are on Apple Books and Apple Podcasts, along
Speaker 1: maybe one day with an ad supported tier of Apple
Speaker 1: TV Plus to compete with new offerings from Netflix, another
Speaker 1: streaming video providers. I'm Mark Erman. This is power On.
Speaker 1: You can subscribe to Mark's weekly power On newsletter at
Speaker 1: Bloomberg dot com. I want to talk more now about
Speaker 1: Apple and ads with Benchmark partner Eric Fisheria, who has
Speaker 1: a few opinions about the iphonemaker's privacy changes. Eric, thank
Speaker 1: you so much for joining us. You had a tweet
Speaker 1: that caught our I this week saying that while regulators
Speaker 1: chase Amazon and meaningless tiny acquisitions from Facebook, the greatest
Speaker 1: monopolist today Apple has taken a trumpy intact, pushing a
Speaker 1: privacy narrative while stifling competition and favoring their own ads business.
Speaker 1: Why do you think Apple is the greatest monopolist today.
Speaker 1: I think that at the end of the day, Apple
Speaker 1: has tremendous market power. And as as Mark was saying,
Speaker 1: with the A T t rolloff that they had, which
Speaker 1: they've done under the cover of privacy, um they are
Speaker 1: they are simultaneously and I think ironically pushing their own
Speaker 1: ads business. And so while they're crippling other ads businesses,
Speaker 1: they are growing their own and benefiting and favoring their
Speaker 1: own And and look, Facebook, Amazon, They're going to be fine.
Speaker 1: I'm not really worried about them. But they're thousands of
Speaker 1: small companies, direct to consumer businesses, mom and pop shops
Speaker 1: that sell products online and targeted via those ad networks,
Speaker 1: gaming companies that are collateral damage with the A T
Speaker 1: t rollout, and and and so my concerns more for
Speaker 1: those companies than it is for Facebook and Amazon. Why
Speaker 1: take the trumpion tact the chumpion comparison. I think it's
Speaker 1: the hypocrisy of saying one thing, which is, hey, this
Speaker 1: is about privacy and privacy to consumers while simultaneously building
Speaker 1: and growing your own out network with its own targeting capabilities.
Speaker 1: Like it's it's literally in direct conflict with each other.
Speaker 1: So what do you think the government should be doing instead?
Speaker 1: I just think the regulators need to to think about,
Speaker 1: like what is actually impacting consumers and small businesses and
Speaker 1: it with that lens choose their targets. You know, Facebook
Speaker 1: making a meaningless acquisition and virtual reality is not that
Speaker 1: that doesn't negatively impact consumers, it doesn't hurt the ecosystem.
Speaker 1: It's totally fine. Um, whereas you know this this type
Speaker 1: of behavior, it's more complicated, it's it's more sophisticated, but
Speaker 1: but it is actually impacting small businesses and consumers. Still
Speaker 1: Meta arguing that their acquisition of this VR company within
Speaker 1: unlimited would actually be good for competition. Do you buy that?
Speaker 1: I do. I think that if we're in the earliest
Speaker 1: days of virtual reality, in many ways there are no
Speaker 1: established metaverse winners or goliaths. As it is today, we
Speaker 1: don't even really know what it is and what form
Speaker 1: it's going to take over the next five or ten years.
Speaker 1: And so you know, small acquisitions with teams and technology
Speaker 1: where everyone is trying to figure it out. Still that's okay,
Speaker 1: Like I feel like that's that's healthy competition. Maybe it'll
Speaker 1: turn into something, maybe it won't, we don't know yet.
Speaker 1: Whereas I think some of these other markets are much
Speaker 1: much more established and um and companies have a lot
Speaker 1: of market power. Like Apple, we're looking we're looking at
Speaker 1: the stock plunges of of these companies here today, Apple
Speaker 1: seems to be weathering the downturn the best. What's your
Speaker 1: view and Benchmark's view of what's happening in the markets
Speaker 1: right now, with of course, the benefit of you know,
Speaker 1: Bill Gurley and the hindsight of you know, being in
Speaker 1: late nineties, you know, one of the top tech analysts
Speaker 1: on Wall Street. Look, I think that one of the
Speaker 1: things that Benchmark has done consistently since our founding in
Speaker 1: the mid nineties is invest consistently. We most of what
Speaker 1: we do of the companies we invest in, our ten
Speaker 1: people a less or less at the time of investment,
Speaker 1: and so when you're doing that, you have a very
Speaker 1: long term view where you're not going to make money
Speaker 1: for eight or ten years if one of those small
Speaker 1: companies grows into something big. And so over the years,
Speaker 1: we want to be consistent pre global financial crisis, post
Speaker 1: global financial crisis. In the last few years and even
Speaker 1: now actually are usm at pace is almost identical. We're
Speaker 1: making the same number of investments every year, and so
Speaker 1: I think that consistency is really huge for the business
Speaker 1: that we're in. Obviously, the last few years, I would
Speaker 1: say we're characterized by FOMO in the growth markets, there
Speaker 1: were there was so much money slashing around. There were
Speaker 1: rounds getting done at insane prices with very little diligence.
Speaker 1: And so actually I think this correction broadly is healthy. UM.
Speaker 1: A lot of speculators will get wiped out, a lot
Speaker 1: of people who are only here to make a quick buck,
Speaker 1: We'll get wiped out. And I think to be left
Speaker 1: with a lot of people who have real visions, believers, UM,
Speaker 1: who are willing to put everything into it. And I
Speaker 1: think that's ultimately healthy, and so I'm actually optimistic. UM.
Speaker 1: You know, every once in a while, a little spring
Speaker 1: cleaning or or cutting is is good. So here we
Speaker 1: are in the middle of a correction, and you've got
Speaker 1: a lot of controversy surrounding Andrews and Harrow. It's writing
Speaker 1: not just a check to controversial We were founder Adam Newman,
Speaker 1: but it's biggest check ever. What do you make of that?
Speaker 1: As as you know, we didn't participate in that round,
Speaker 1: although we were Series A investors and we work, um,
Speaker 1: we did not participate in this this recent three or
Speaker 1: fifty million dollar round. And look, I can't defend another
Speaker 1: firms investment that's that doesn't there's no there's no value
Speaker 1: in doing that, and I'm not inside their heads. I
Speaker 1: would say this about Adam. We can debate a lot
Speaker 1: of things, but he is definitely top point zero zero
Speaker 1: one in terms of his ability to separate people from
Speaker 1: their money. And I'll leave it at that. Hang on,
Speaker 1: you can't leave it at that. What do you mean
Speaker 1: by that? He's he is very very good at raising money,
Speaker 1: as he's shown time and time again, and and he's
Speaker 1: done that again. Here would you write him another check?
Speaker 1: We didn't? Yeah, all right, So what do you think
Speaker 1: that says about Silicon Valley. Is it a broader indictment
Speaker 1: of Silicon Valley or does it showcase a problem in
Speaker 1: Silicon Valley or is this a very specific issue with
Speaker 1: potentially andreas In Horwitz. I think it's a I think
Speaker 1: these mega rounds, I don't know. I can't pretend to
Speaker 1: know what what goes into a mega round or growth
Speaker 1: in a growth round like this, I don't know what
Speaker 1: the calculus is. That isn't the type of investment that
Speaker 1: we make. You know, the vast majority of what we
Speaker 1: do is, you know, five fifteen million dollar investments in
Speaker 1: really small companies in their earliest stages, where we're making
Speaker 1: a tenure commitment to work with them, and and so
Speaker 1: I think that's the that's the business I know. I
Speaker 1: think there's a lot of uh, there's been a lot
Speaker 1: of changes in growth investing with soft bank and lots
Speaker 1: of firms raising larger and larger funds, But that isn't
Speaker 1: what we've done, so I can't speak to it all, right,
Speaker 1: Eric Vistia Partner Benchmark. I appreciate your stopping by, Eric.
Speaker 1: Thank you. Thanks from the biggest producer of the nickel
Speaker 1: used in electric car batteries, wants to be seen as
Speaker 1: more than just a source of resources. Indonesia's president spoke
Speaker 1: to Bloomberg's editor in chief John michaels Waite, what we
Speaker 1: want is the electric cars, not the battery for Tesla.
Speaker 1: We want to build electric cars in Indonesia from Ford
Speaker 1: electric Cars, Hyundai electric cars from Japan, Toyota, Suzuki gone gone,
Speaker 1: and we want a huge ecosystem of electric cards. Though
Speaker 1: Indonesia has held talks on potential partnerships with Tesla over
Speaker 1: several years, but there have been no agreements. Back to
Speaker 1: the story that's had everyone talking this week in Silicon
Speaker 1: Valley and recent Harrowitz writing its biggest check ever to
Speaker 1: controversial we Work founder Adam Newman. The check million dollars,
Speaker 1: instantly making flow Newman's new real estate startup a unicorn. Yes,
Speaker 1: the same Newman whose we Work hit a peak valuation
Speaker 1: of fifty billion dollars then plummeted to eight billion dollars,
Speaker 1: with lots of people losing their jobs and some investors
Speaker 1: losing lots of money. There's been quite a few tweets
Speaker 1: about this on both sides of the debate, including this
Speaker 1: from Winnie founder Sarah Moscow. People always ask me why
Speaker 1: I defend quote unquote toxic female founders and association my
Speaker 1: and with female leaders who might have done bad things.
Speaker 1: It's because women leaders aren't held to standards. Women leaders
Speaker 1: are held to standards. Men are not. Men get three
Speaker 1: fifty million dollars, women get ostracized. If I don't speak up,
Speaker 1: who will? Sarah Mosca joining me now, CEO and co
Speaker 1: founder of Winnie will get to that. But tell me, like,
Speaker 1: why did you want to speak up about this? Yeah?
Speaker 1: I thought you were going to mention my viral joke
Speaker 1: tweet making fun of Adam. That was good too. It
Speaker 1: was a little more inside baseball, but you can explain.
Speaker 1: It's so good. My comedy career is my next act.
Speaker 1: But you know, I don't think anyone was really surprised
Speaker 1: that Adam Newman was able to raise a mega round
Speaker 1: of funding. I think what really struck a chord with
Speaker 1: a lot of founders, especially women founders, is that he
Speaker 1: was given this second chance when so many women, under
Speaker 1: represented minorities aren't even given a first chance. Um, and
Speaker 1: you know what other big Bowl ideas and founders could
Speaker 1: we uncover if we invested in people besides white men?
Speaker 1: You know, I've spoken to a lot of people this week,
Speaker 1: and a lot of people who didn't want to speak
Speaker 1: publicly about this, you know, don't want to say anything
Speaker 1: negative about Andrews and Horowitz. Why do you Why do
Speaker 1: you think people won't talk about it. I don't think
Speaker 1: this is unique to andreasent Horowitz. I think in venture
Speaker 1: capital as a whole, there's been a really big emphasis on,
Speaker 1: you know, sort of growth at all costs and uh,
Speaker 1: you know, burning lots of cash on your way to
Speaker 1: the top. And I actually I am pretty optimistic because
Speaker 1: I think that is really changing, and I think that
Speaker 1: will serve women founders really well. Women get just two
Speaker 1: percent of the venture capital and so we have always
Speaker 1: had to operate, you know, in a profitable way or
Speaker 1: on the paths of profitability. Um, and now that is
Speaker 1: finally getting some respect. It's not just growth and burning
Speaker 1: lots of cash. It's actually growth that's sustainable, and that's
Speaker 1: what we've always done it, Whinnie, and I think lot
Speaker 1: of women founders have always done. I think part of
Speaker 1: the risk is, you know, if you come forward, would
Speaker 1: you ever get a check from Entrees and Horowitz, which
Speaker 1: is you know, one of the most prestigious venture capital
Speaker 1: firms in Silicon Valley. Why take that risk? Uh, I
Speaker 1: might never get funding from them. I I think, you
Speaker 1: know either way, like this is not anything having to
Speaker 1: do with just Andrews and Horwit's. I think a lot
Speaker 1: of firms across the board. I mean this is an
Speaker 1: industry wide uh number that two percent of the venture
Speaker 1: capital goes to women founders, and even less if you
Speaker 1: look at you know, underrepresented women founders. UM. So I
Speaker 1: don't think this is unique to them. I think this
Speaker 1: is just a great example and time to say, like, hey,
Speaker 1: what about all the women who weren't given second chances
Speaker 1: after they made a big bet that didn't work out? Um,
Speaker 1: and many that never gone a first chance, and many
Speaker 1: that didn't even get a first chance. And I think
Speaker 1: now is actually a really good time to talk about
Speaker 1: it because there is this greater emphasis aside from this case,
Speaker 1: a much greater emphasis on profitability and you know, sustainable growth.
Speaker 1: You and I talked when you were launching Whenny. What
Speaker 1: has your experience been like raising money not just as
Speaker 1: a female founder, but a founder raising money for a
Speaker 1: marketplace for childcare. It's been rough. I think childcare has
Speaker 1: historically been really underfunded UM and undervalued and overlooked and
Speaker 1: all the things. It's a ninety billion dollar market childcare
Speaker 1: for kids under six in the US alone annually, so
Speaker 1: it's it's massive, um. But the money just really hasn't
Speaker 1: been there UM. And I think you know, when you're
Speaker 1: building in an industry that's so big and so entrenched
Speaker 1: and you're trying to innovate, it takes a long time.
Speaker 1: And so a lot of what was invested in the
Speaker 1: past were these like really quick wins, and like you
Speaker 1: want to grow really fast at all costs, and that's
Speaker 1: not the way you innovate in child there. It's just
Speaker 1: not gonna work. It's so entrenched. Uh, it's so big, um,
Speaker 1: it's so fragmented, and so we've you know, taken a
Speaker 1: slower growth approach. We've been at this for almost seven years. UM.
Speaker 1: We were really fortunate to find investors who believed in
Speaker 1: kind of the long haul UM. And now you know,
Speaker 1: we are the leading marketplace for group childcare and early education.
Speaker 1: But it's taken almost seven years to get there. Did
Speaker 1: not happen overnight, and we had to be really careful
Speaker 1: with how we grew so that we would have the
Speaker 1: time in the runway to to get to where we are. Now,
Speaker 1: what's the funding environment like now? You know, we're in
Speaker 1: the middle of this big market correction and you're hearing
Speaker 1: about down rounds and flat rounds and layoffs. Is it
Speaker 1: hard then? It's been. If I could give advice to
Speaker 1: other companies, it would be, you know, if you can
Speaker 1: get to profitability, get there. I think we feel like
Speaker 1: we have so much more predictability in our own revenue
Speaker 1: and growth than in what investors are gonna like or
Speaker 1: be able to invest in, or you know, can they
Speaker 1: raise from their LPs um that we're focusing internally on
Speaker 1: just our business and we're really fortunate to be in
Speaker 1: a position to do that. We've never been able to
Speaker 1: count on the next round of funding. UM. I think
Speaker 1: there have been companies, especially in the childcare space, that
Speaker 1: have raised more and grown faster, and they're finding themselves
Speaker 1: in a tough spot right now because that next round
Speaker 1: of funding is it's not just out there easy to get.
Speaker 1: What's the state of the childcare industry right now, post COVID,
Speaker 1: post pandemic UM, What do you see One of the
Speaker 1: biggest issues right now in childcare is the teacher shortage,
Speaker 1: so the early educator shortage. So we hear about that
Speaker 1: all the time with you know, public education, but it's
Speaker 1: even worse in childcare. Uh and it's really really affecting
Speaker 1: these businesses. They're having to close classrooms, take less children
Speaker 1: into their program's creating this huge by issue. UM. So
Speaker 1: that's kind of one of the things we're now really
Speaker 1: focused on at WINNIE is helping daycares in preschools higher
Speaker 1: staff in addition to filling their open spaces, because if
Speaker 1: they don't have the teachers, they can't fill spaces, they
Speaker 1: can't meet ratios. So you know, what are the problems
Speaker 1: that we're we're not talking about and how do you
Speaker 1: see those problems being resolved? Problems in childcare? I mean,
Speaker 1: I think one big problem is the lack of investment.
Speaker 1: It does take investment to innovate. We see this in
Speaker 1: pretty much every other industry. So it's hard when you
Speaker 1: have to grow just based on your profits. Um, it's
Speaker 1: slower and it takes more time. Uh. So I would
Speaker 1: I would absolutely love to see more investment, not just
Speaker 1: from venture capitalists so that would be nice, but also
Speaker 1: from employers from the government, uh, you know, build back
Speaker 1: Better was supposed to be this great, big influx of
Speaker 1: cash to childcare. None of that is happening. And so
Speaker 1: you know, there is really a lack of investment going
Speaker 1: towards childcare. And I think it can come from many
Speaker 1: different sources, but someone's got a step up here. Um.
Speaker 1: I also want to ask you about Twitter. You've worked
Speaker 1: in a lot of different tech companies. Before you started
Speaker 1: your own, you worked at Twitter. What do you think
Speaker 1: about Elon Musk potentially owning Twitter? Want be good for Twitter?
Speaker 1: He recently he actually just recently tweeted something like, you know,
Speaker 1: being a mom, which he's a dad, so it's a
Speaker 1: little weird he's tweeting about moms. But being a mom
Speaker 1: is just as important as any career. Uh. And to me,
Speaker 1: that's just kind of like an underhanded way of saying,
Speaker 1: you know, moms, you go stay at home and take
Speaker 1: care of kids, leave us men to the careers. Uh.
Speaker 1: I don't think that's a fit for Twitter's culture. It's
Speaker 1: it's you know, I haven't worked there in a while,
Speaker 1: but I am sure they would not agree with that
Speaker 1: kind of statement or approach towards They hire lots of women,
Speaker 1: they have lots of moms working in leadership roles. Um.
Speaker 1: They have been big supporters and advocates of getting more
Speaker 1: women in leadership, So that just to me seems really uh,
Speaker 1: not aligned with their culture at all. What about the
Speaker 1: product itself, I mean, I'm sure even you would agree that, like,
Speaker 1: potentially there could have been more innovation at Twitter over
Speaker 1: the last decade. They could be making more money, they
Speaker 1: could have grown a lot faster. Maybe they need an
Speaker 1: Elon musk, maybe they've shang thanks, Maybe they need more women,
Speaker 1: more mobs working there. Um. I think also, you know,
Speaker 1: this has just been a massive distraction for the employees.
Speaker 1: So when you talk about innovation, I mean, how can
Speaker 1: you possibly focus on on innovating and making the product
Speaker 1: better for users if you have this massive distraction going
Speaker 1: on at the same time. So I don't think this
Speaker 1: has been good on that front either. All right, well,
Speaker 1: we'll continue to follow the drama there on all fronts, really,
Speaker 1: and thank you for helping. Time now for our daily
Speaker 1: crypto report. The Big Tokens, of course, going through a
Speaker 1: sell off, Bitcoin dropping as much as to its lowest
Speaker 1: level since late July. According to coin Glass, some two
Speaker 1: million dollars in crypto assets were liquidated in just one hour. Today,
Speaker 1: let's bring in David Tale now, president of crypto asset
Speaker 1: fund Prochain Capital. H David, how long does this downturn
Speaker 1: last for crypto? I think it's dead less through Labor
Speaker 1: Day at least. I think we're gonna have some dog
Speaker 1: days of summer not much going on. I think macro,
Speaker 1: we've had a good run up in equity markets, We've
Speaker 1: had a good run up generally in crypto, certainly very
Speaker 1: strong in ether, and I think right now the market
Speaker 1: is deciding between should we be in a risk on
Speaker 1: environment or do we need to pay more attention to
Speaker 1: inflation rates, policy and so forth. But how long does
Speaker 1: it extend beyond Labor Day? I don't think very long.
Speaker 1: I think actually we will start to get some announcements
Speaker 1: after Labor Day around things that the crypto community cares about, legislation, regulation,
Speaker 1: and then potentially additional industry related announcements like the one
Speaker 1: we received or the few that we received out of
Speaker 1: black Rock over the past couple of weeks. In terms
Speaker 1: of their foray into crypto. Do you differentiate between bitcoin
Speaker 1: and ether? You know, when you consider these big uh
Speaker 1: you know, potential market influencers. Given the merge coming up
Speaker 1: right now, you have to I think that the narrative
Speaker 1: around the merge for Ether is overpowering for it. Certainly
Speaker 1: today it didn't matter, but I think overall that narrative
Speaker 1: is very strong, and I think as we get closer
Speaker 1: and closely to the merge, that narrative will become stronger
Speaker 1: and stronger really lead the charge in terms of Ether's
Speaker 1: price movement. Now that being said, I don't know if
Speaker 1: the merge is necessarily you know, bullish up until the
Speaker 1: very end or um it'll be bullish for some time
Speaker 1: close to you know, the actual merge date, But then
Speaker 1: there will be a point of time where people will
Speaker 1: you know, quote unquote um, you know, start to sell
Speaker 1: the news. Now you're a fun protein prochein down fifty
Speaker 1: percent year today, but you actually jumped back up nine
Speaker 1: in July. How did you buck the trend? Uh? Well,
Speaker 1: we were you know, we had a fair amount of
Speaker 1: risk off attitude, you know, coming through May and June.
Speaker 1: We took a bunch of obviously losses, but we also
Speaker 1: took a bunch of cash off of the table and
Speaker 1: held it in reserve to go ahead and redeploy because
Speaker 1: we did think that things were going to go materially
Speaker 1: lower lower, and so we went ahead and redeployed that
Speaker 1: capital during that period of time. In addition, I have
Speaker 1: to point out we're not only invested in tokens, but
Speaker 1: we all so invest in equities. They're focused on the
Speaker 1: crypto and digital payment sector, and so there we've done
Speaker 1: fairly well as well. So it's been able to balance
Speaker 1: out our portfolio. How would you gauge broader institutional sentiment
Speaker 1: in crypto right now? Obviously you've got you know, the bankruptcies,
Speaker 1: you've got Celsius. How long does all this stuff hangover?
Speaker 1: So I think the institutions, Um, this is my my
Speaker 1: firm opinion. I think the institutions have been going through
Speaker 1: an educational process for an extended period of time now,
Speaker 1: you know, less at least two years, if not longer. Uh,
Speaker 1: they have the resources and the human resources in particular
Speaker 1: to go ahead and devote towards that education and becoming sophisticated.
Speaker 1: In terms of when they go ahead and decide to
Speaker 1: get involved. That usually happens, you know, over a period
Speaker 1: of time. But when they go ahead and throw down
Speaker 1: the hammer, it's actually you know, in very serious numbers,
Speaker 1: and I think they've you know, I think, if I
Speaker 1: had to guess, I think a number of them have
Speaker 1: on ahead and added or started to add started positions
Speaker 1: during this downturn. I think they are watching, though, particularly
Speaker 1: what's going on with the bankruptcies, and you raised that point.
Speaker 1: I think it's important right now in terms of the
Speaker 1: sector generally. I think the sector is learning a lot
Speaker 1: through the liquidations and bankruptcies of Three Arrows, Celsius, Voyager
Speaker 1: and so forth. It's it's a learning process in terms
Speaker 1: of being able to understand what the priorities are legal priorities,
Speaker 1: excuse me, in terms of legal rights of account holders depositors,
Speaker 1: and then what exactly those assets when held, whether they
Speaker 1: be directly in accounts, whether they be directly in crypto,
Speaker 1: whether they be rights to accounts in other institutions in crypto,
Speaker 1: what exactly that shakes out too. I think institutions are
Speaker 1: very keen on learning the results of this in tandem
Speaker 1: with at the same time understanding the regulatory framework. Right
Speaker 1: the SEC seems to be going off without any guard rails,
Speaker 1: and I think the legislature is trying to rain them in.
Speaker 1: I don't think we'll see that raining in until the
Speaker 1: midterm elections. But I think between the legal president being
Speaker 1: said in those cases, coupled with the uncertainty around the
Speaker 1: legal and regulatory environment, is leaving institutions and kind of
Speaker 1: a middling position at this point. And they're not going
Speaker 1: to go in full force. But yet they're still educating
Speaker 1: very rapidly, and I think at the right time they
Speaker 1: will go ahead and deploy very heavily. And there's no
Speaker 1: way of knowing when that right time will be, so
Speaker 1: I think you need to be there, ready and waiting
Speaker 1: for it. All right, Thank you for your analysis there,
Speaker 1: David tal Approaching Capital President, lots to watch. Appreciate you
Speaker 1: stopping by. It's branded as a new fire festival fiasco. Pollen,
Speaker 1: high flying travel startup at planned vacations and past locations
Speaker 1: with celebrities, has had to cancel dozens of its luxury
Speaker 1: events over the last year, prompting a wave of customer complaints.
Speaker 1: Now the company is going through restructuring. Pollen has been
Speaker 1: blaming the Omicron variant for its misfortune, but turns out
Speaker 1: employees say executives spare some of that blame to Let's
Speaker 1: dive into this with bloom Brooks Katie Roof, who's been
Speaker 1: all over these latest developments. Katie, what's happening here? Sure?
Speaker 1: So good to be with you. In my my ten
Speaker 1: years in covering startups, I have to say this is
Speaker 1: one of the most unusual situations I have heard UM
Speaker 1: in terms of money mismanagement. This is a company that
Speaker 1: was valued at eight hundred million just a few months ago,
Speaker 1: and UM now unclear if they're going to be worth
Speaker 1: anything because they've had trouble finding any buyer at all.
Speaker 1: So it is being called Firefests because it is a
Speaker 1: music related business. They actually booked festivals, and several of them.
Speaker 1: In one in particular earlier this year, they booked an
Speaker 1: event in Mexico for people to see the band departure,
Speaker 1: and after people arrived, I was told even as soon
Speaker 1: as an hour before the concert was supposed to begin,
Speaker 1: it was just canceled. So people were there and there
Speaker 1: was no event, and then people didn't even get refunded,
Speaker 1: So certainly people were pretty upset about that. UM. There's
Speaker 1: been a lot of customer complaints and UM according to
Speaker 1: um my sources that I've spoken to. While the company
Speaker 1: blames COVID for a lot of its misfortune. UM. In
Speaker 1: this particular instance, they actually hadn't secured the proper permit
Speaker 1: to have the concert to begin with. So UM, a
Speaker 1: lot of allegations of mismanagement UM all across the board,
Speaker 1: whether it be for poor planning or just um not
Speaker 1: spending money properly. What have we learned from employees specifically
Speaker 1: about what happened here and like the part of the
Speaker 1: story that wasn't being told? Sure, so we've heard a
Speaker 1: lot of different things, I think, UM. One thing that
Speaker 1: we've heard that resonated was that while it seemed like
Speaker 1: they didn't have money to pay their bills, and they
Speaker 1: weren't paying their bills, meanwhile they were spending money on
Speaker 1: expensive parties for themselves, the expensive villas. Uh. You know,
Speaker 1: we we got ahold of some documents that said they
Speaker 1: spent over fifty tho pounds on some villa, which you know,
Speaker 1: the company says was was actually for legitimate business purpose,
Speaker 1: but somehow it seemed like they were finding money for fun.
Speaker 1: But they were stiff and customers. They weren't paying their
Speaker 1: employees things like pensions and now severance and other compensation. Uh,
Speaker 1: they weren't paying vendors there's a long list of people
Speaker 1: they own money, and they literally kept a list. They
Speaker 1: kept an Excel spreadsheet and something on there said what
Speaker 1: will happen if if you don't if we don't pay
Speaker 1: these people? They were trying to figure out how to
Speaker 1: prioritize who they paid. We put in our story that
Speaker 1: sometimes it was just because someone got more attention on
Speaker 1: social media for their complaints, so um that that got
Speaker 1: them ahead of the line and getting a refund um. So,
Speaker 1: you know, certainly a lot of allegations of mismanaged funds.
Speaker 1: We spoke to sixteen people directly involved with this, and
Speaker 1: I think there's going to be more stories to come.
Speaker 1: We have a lot of uh, pretty damning allegations that
Speaker 1: we're looking into and um, you know, curious to to
Speaker 1: vet that some more. So. Yeah, last quick question, I mean,
Speaker 1: business company gonna make it or are they going to
Speaker 1: go out of business? Well, they struggled to find a buyer,
Speaker 1: so uh they hired Goldman Sacks and they were unable
Speaker 1: to find a buyer and um, you know it was
Speaker 1: it was unsuccessful. So, um, you know, will someone want
Speaker 1: to buy pollen with all of these problems? I don't know.
Speaker 1: I mean they did have connections. They did, you know,
Speaker 1: book Justin Bieber and other high profile events, so maybe
Speaker 1: you could say there's something to their brand, but I
Speaker 1: don't know. It looks like they're they're having some problems.
Speaker 1: All right, Well, we'll be watching for more of your
Speaker 1: reporting on this fascinating one. Bloombergs. Katie Routh, thank you,
Speaker 1: and that does it for this edition of Bloomberg Technology